Motilal Oswal's research report on Alembic Pharma
Alembic Pharma (ALPM) delivered a slight miss on 2QFY24 earnings. The improvement in export formulation and API segment was offset to some extent by muted performance in domestic formulation (DF) segment. We reduce our FY24 earnings estimate by 6%, factoring in a) weak season impact in DF segment, and b) increased marketing and promotional spending in DF segment.
Outlook
We value ALPM at 19x 12M forward earnings to arrive at a TP of INR710. While an establishment inspection report (EIR) is in place for all facilities focusing on US generics market, sales are expected to pick up with new launches in injectable/oncology products. ALPM also plans to add a division in high-growth therapies to further enhance growth prospects in DF segment.
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