Alkem Labs Q1 Results Review - Margin Gains Offset Revenue Shortfall: Nirmal Bang

Nirmal Bang Report

Alkem Laboratories Ltd.’s Q1 FY25 results were a mixed bag. Revenue fell short of our/consensus estimates but there was a beat on the margin front due to softening raw material prices and lower-than-expected tax outgo.

Revenue increased by 6.4% YoY in the Domestic business due to higher secondary sales in major therapeutic segments. U.S. business grew by 2% QoQ. Ebitda margin stood at 20.1%, up by ~700 basis points YoY, driven by softening raw material prices and stabilizing US pricing pressure at single digits.

We like Alkem given its higher proportion of India sales and a consistent track record of outperformance in the Domestic market. However, majority of its revenue comes from the Acute segment, raising concerns about revenue concentration. Therefore, we maintain an Accumulate rating with a target price of Rs 6,152, valuing it at 24 times June-26E earnings per share.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit. 

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.