Alembic Pharma Q1 Results Review - Execution Remains A Key: Dolat Capital

Dolat Capital Report

Alembic Pharmaceuticals Ltd.’s Q1 FY24 showed a mixed bag performance with Ebitda margin below estimates while revenue and profit after tax above our estimates.

Revenues at Rs 14.9 billion (above estimate), grew by 17.7%/5.7% YoY/QoQ on higher international generic sales. Ebitda stood at Rs 1.99 billion inline (+73%YoY/- 11.0% QoQ).

Alembic Pharma's Ebitda margin at 13.4% was below estimates due to higher than expected operational and staff costs. Profit after tax stood at Rs 1.2 billion (above estimate) grew by 233.8% YoY due to lower depreciation expenses, tax and higher other income.

We upgrade our earnings per share estimates by 26.2%/23.1% in FY24E/FY25E assuming higher international generic and active pharma ingredient sales coupled with lower tax and lower depreciation cost.

With limited upside, we downgrade to 'Sell' with a revised target price of Rs 700.

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