Hold Alembic Pharma; target of Rs 625: ICICI Direct

ICICI Direct's research report on Alembic Pharma

Alembic Pharma operates in international generics (US:31% & exUS: 15% in FY22), domestic branded (36% in FY22) and API (18% in FY22). Domestic business has 1.5% of market share of IPM with three brands in the top 300. Going ahead, emphasis is on the specialty segment • The company has invested ~ Rs 1800 crore in recent years in facilities geared mainly towards US formulations. As of Q2FY23, it has filed 242 ANDA and has 170 approvals with 115 launches in the US.

Outlook

We upgrade from Reduce to HOLD but maintain neutral stance as we await traction rom the US focused facilities (F2, F3)), which received three USFDA product approvals (plant approvals pending) amid significant cash burn. We also keep tabs on consistency in India formulations performance. Valued at Rs 625 i.e. 30x P/E on FY24E EPS of Rs 20.8.