HDFC Securities is bullish on Alkem Labs has recommended buy rating on the stock with a target price of Rs 2340 in its research report dated February 09, 2019.
HDFC Securities' research report on Alkem Labs
Alkem’s 3QFY19 performance was in line with our expectations. A softer acute season led to a 1% fall in the domestic business, while the 44% jump in the US helped in maintaining 10% plus YoY top line growth. Poor business mix (lower India sales) and increased raw material cost led to a ~680bps drop in gross margin. As a result, EBITDA margin shrunk 450bps YoY and EBITDA declined 13% to Rs 3.1bn. Reported PAT at Rs 2.1bn was up 14% YoY owing to higher taxes in 3QFY18.
Maintain BUY with a revised TP of Rs 2,340 (22x Dec-20E EPS).
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