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Last Updated : May 09, 2019 04:56 PM IST | Source: Moneycontrol.com

Hold Alembic Pharma; target of Rs 560: ICICI Direct

ICICI Direct recommended hold rating on Alembic Pharma with a target price of Rs 560 in its research report dated May 09, 2019.

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ICICI Direct's research report on Alembic Pharma


Q4FY19 revenues grew 8.6% YoY to Rs 927 crore (I-direct estimate: Rs 1028.1 crore) on account of 32.3% YoY growth in RoW markets to Rs 82 crore (I-direct estimate: Rs 139.5 crore) and 16.2% YoY growth in API segment to Rs 230 crore (I-direct estimate: Rs 207.9 crore). While domestic formulations de-grew 0.7% YoY to Rs 302 crore (I-direct estimate: Rs 340.2 crore), US formulations grew 7.9% YoY to Rs 313 crore (I-direct estimate: Rs 314.5 crore). EBITDA margins contracted 109 bps YoY to 19.2% (I-direct estimate: 21.9%) mainly due higher other expenditure. EBITDA grew mere 2.8% YoY to Rs 178 crore vis-à-vis I-direct estimate of Rs 224.8 crore. Net profit grew 39.2% YoY to Rs 130.6 crore (I-direct estimate of Rs 157.6 crore). Delta vis-à-vis EBITDA was mainly due to lower tax rate (14.9% vs. 38.5% in Q4FY18).


Outlook


The benefits are most likely to be back-loaded. Immediate cash burn is likely to weigh on sentiments in the near term. We arrive at our target price of Rs 560 based on 22x FY21E EPS of Rs 25.4.


For all recommendations report, click here


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First Published on May 9, 2019 04:56 pm
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