ICICI Direct is bullish on Alembic Pharma has recommended buy rating on the stock with a target price of Rs 1140 in its research report dated July 23, 2020.
ICICI Direct's research report on Alembic Pharma
Revenues grew robust 41.4% YoY to Rs 1341 crore due to 72.8% YoY growth in US to Rs 596 crore. Additionally, better-than-expected sales in 1) RoW (up 62% YoY) as serialisation issues especially in Europe have been addressed, 2) API segment (up 54%) due to Azithromycin and other opportunities propelled revenue growth. Domestic formulations de-grew 5.6% to Rs 306 crore. EBITDA margins improved 587 bps YoY to 30.4% mainly due to lower other expenditure amid lower promotional, travelling and R&D costs. EBITDA grew 81.1% YoY to Rs 407.4 crore. Adjusted PAT grew 103.7% YoY to Rs 302 crore mainly due to strong operational performance.
Although this is fraught with a new set of challenges, Alembic now looks in much better shape to withstand those challenges. We maintain BUY and arrive at a target price of Rs 1140 based on 22x FY22E EPS of Rs 51.9.
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