Buy Alkem Laboraties; target of Rs 3680: Motilal Oswal

Motilal Oswal is bullish on Alkem Laboraties recommended buy rating on the stock with a target price of Rs 3680 in its research report dated May 14, 2022.

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May 17, 2022 / 07:37 IST

26 Aug, 2025 12:21

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Motilal Oswal's research report on Alkem Laboraties

ALKEM delivered a better-than-expected 4QFY22 at the operational level, led by superior performance in Domestic Formulations (DF) and in international markets, excluding the US. Incremental business from launches was offset by higher price erosion in the base business for US Generics. We cut our FY23/FY24 EPS estimate by 8.5%/4% to factor in: a) elevated raw material and freight cost, b) price deflation in the US Generics base business, and c) gradually rising OPEX towards Biosimilars. We value ALKEM at 21x 12- month forward earnings to arrive at a TP of INR3,680. While the cost-related headwinds will affect near-term performance, we remain positive on ALKEM on the back of a strong prescription brand franchise in the DF segment, consistent launches, successful compliance track record, and superior execution in international markets, excluding the US. We maintain our Buy rating.

Outlook

We continue to value ALKEM at 21x 12-month forward earnings to arrive at our TP of INR3,680. We remain positive on ALKEM on the back of strong growth prospects in DF and improved outlook in emerging markets. We maintain our Buy rating.

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