ALKEM Laboratories (ALKEM) delivered better-than-expected revenue/EBITDA/PAT, with a beat of 6%/9%/13% for the quarter. The superior performance was driven by broad-based higher revenue growth and lower-than-expected R&D spend for the quarter. Despite the GST transition in Sep’25, ALKEM delivered better-than industry growth in the domestic formulation (DF) segment. Specifically, it outperformed IPM in respiratory, dermatology, pain management, VMN, and anti-infective therapies.
OutlookWe reduce our earnings estimate by 2%/4% for FY26/FY27, factoring in: a) additional operational costs related to new growth drivers (CDMO and Med tech segments). We value ALKEM at 28x 12M forward earnings to arrive at a TP of INR5,560.
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