Indiaexport formulation drive earnings

Company
11 Mar 2024
5 Min read 
  • Alembic Pharma reported better-than-expected operational performance in 3QFY24.
  •  Sales growth was driven by formulation exports and the domestic formulation segment.
  •  Earnings estimates have been raised for FY24/FY25/FY26 due to superior execution in animal healthcare, new launches in non-US exports, controlled R&D spending, and better operating leverage.
  •  The company is valued at 22x 12M forward earnings with a target price of INR910.
  •  Despite the expected earnings growth, the rating remains neutral due to the current valuation.
  •  Sales in the US generics business are expected to grow gradually with the expansion of the niche portfolio.
  •  The company plans to launch new products in the US generics segment and is working on GLP-1 products.
  •  The India business showed strong growth in the specialty segment, particularly in Gynecology.
  •  The animal health segment registered significant growth and a new division has been established to sustain growth in this segment.
  •  Financials and valuations show positive growth in sales, EBITDA, and earnings over the forecast period.
  •  Ratios indicate a stable financial position and reasonable valuation multiples.
  •  Cash flow from operations and investments are positive, contributing to a healthy cash balance.
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