Reduce Alembic Pharma; target of Rs 705: ICICI Securities

ICICI Securities recommended reduce rating on Alembic Pharma with a target price of Rs 705 in its research report dated August 07, 2023.

Broker Research

August 09, 2023 / 12:29 IST

Reduce

26 Aug, 2025 12:21

Volume

Todays L/H

ICICI Securities research report on Alembic Pharma

Alembic reported a healthy 17.7% YoY revenue growth driven by traction in the export business and APIs. Operational cost of three new plants impacted margins. Management does not expect any material escalation in overhead costs ahead. Company has launched only 5 products (15-20 filed) from the three new sites, which may not be able to improve profitability in the near term. India growth at 9% was higher than market growth and seasonality will likely play a pivotal role in driving growth for the next two quarters. We raise our FY24E / FY25E EPS by 9% / 7% to factor-in lower depreciation cost ahead. Post price run-up of 25% in last 1 month, the stock trades at an expensive 26x FY25E earnings.

Outlook

Downgrade to REDUCE with an increased target price of INR 705 (prior: INR 590) on 23x FY25E earnings of INR 31.

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