Neutral Alembic Pharma; target of Rs 550: Motilal Oswal

Motilal Oswal recommended Neutral rating on Alembic Pharma with a target price of Rs 550 in its research report dated May 06, 2023.

Broker Research

May 08, 2023 / 13:43 IST

Neutral

26 Aug, 2025 12:21

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Motilal Oswal's research report on Alembic Pharma

Alembic Pharma (ALPM) delivered 12%/14%/7% beat on sales/EBITDA/PAT estimates for 4QFY23. Superior performance in domestic formulation (DF), Non-US exports, and the API segment led to better-than-expected operational performance for the quarter. We revise down our earnings estimate by 4%/2% for FY24/FY25 factoring in a) ongoing price erosion in the US generics segment and b) incremental operating expense due to commercialization of new injectable facilities. This is partly offset by robust growth momentum in the DF segment and improving outlook in the API segment. We value ALPM at 17x 12M forward earnings to arrive at a price target of INR550. While a) the operational cost related to new injectable facilities would be expensed in P&L and b) there would be controlled R&D spend, we await better clarity on potential product approvals for the US market to provide meaningful improvement in profitability as well as return ratios. Also, the current valuation is fair for projected earnings growth over the next two years. We reiterate our Neutral rating on the stock.

Outlook

We value ALPM at 17x 12M forward earnings to arrive at a price target of INR550. We reiterate our Neutral stance on the stock.

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