KR Choksey's research report on Alembic Pharmaceutical
Alembic Pharma’s revenue missed our estimates (-2.2%) due to weak growth in domestic and API business. EBITDA fell short of our estimates due to a miss in revenue and higher operating expenses. Adj. PAT missed our estimates due to higher-than-expected tax expenses and lower-than-expected other income. We decrease our FY26E/FY27E EPS estimates by 6.3% and 7.9% to INR 40.8 and INR 53.5 respectively factoring in weak Q3FY25 performance coupled with ongoing struggle in the API business, and muted growth in the domestic market.
Outlook
Currently, the stock is trading at PE multiple of 21.8x/16.6x based on FY26E/FY27E EPS, respectively. We roll over our valuation multiple to FY27E and assign a PE multiple of 17.0x to arrive at a target price of INR 909 (previously: INR 1,122) and maintain our “HOLD” rating on the stock.
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