Alembic Pharma Q2 Results Review - Miss On Operating Performance: Dolat Capital

Dolat Capital Report

Alembic Pharmaceuticals Ltd.'s Q2FY25 sales came in line with our estimates while operating performance was below. After adjusting for the extraordinary income from insurance claim, Adjusted profit after tax also came below estimates.

Management guided for 10 new launches in H2 FY25 in the U.S. Research and development expenses are expected to be in the range of Rs 5-5.25 billion in FY25.

We downgrade our FY25E/FY26E EPS estimates by 3.8%/4.5%, assuming lower API and domestic sales.

We roll over to FY27 and upgrade to ‘Reduce’ rating from Sell at 22 times FY27E P/E with revised target price of Rs 1,133.

Key upside: Higher than expected launches and growth in the US business.

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