Sell Alembic Pharma; target of Rs 560: Axis Securities

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26 Aug, 2025 12:21

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Axis Securities's research report on Alembic PharmaAlembic Pharma's(ALPM) revenue was 3% higher than expected and EBITDA was 34% higher led by upsides from higher margin gAbilify sales (one-off) (~USD50 mn revenue, in our view). We expect the contribution to start declining due to increasing competition (Aurobindo, Apotex etc.) implying pressure on pricing and market share.While specialty segment continues to show strong growth, India formulations growth rebounded to 15% YoY (after 3% YoY in Q2) due to recovery in acute segment. We increase our FY16EPS by 21% led by higher than expected contribution from gAbilify in US. While ALPM is in a sweet spot with strong ramp-up in US coupled with steady India business, we maintain SELL with TP of Rs 560 (21x FY1E7 EPS of Rs 26.7) as it trades at expensive valuations(23x FY17 PE).For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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