Alembic Pharma - Diwali 2012 Pick - Angel Broking

The company's domestic formulation business which contributed 54% to its total sales in FY2012, with ~70% of its revenue coming from the acute segment, has at least grown in line with the industry growth rate, before the share of the high growth chronic segment improves from the current levels of ~30%. For FY2012-14, we expect the domestic formulation business to grow at 14.0% CAGR.

On the exports front, the formulation business contributed 20% to the total turnover, with majority of the contribution coming from Europe and the US. The company, going forward, expects to keep its momentum high in terms of number of filings, by filing around 12-18 ANDAs per annum. For FY2012-14, we expect the exports to register a CAGR of 21.1%.

Alembic's growth and profitability profile have improved post the restructuring carried out by the management. Over FY2012-14, we expect the company to post a CAGR of 13.3% and 14.6% in its sales and net profit respectively. We maintain our Buy recommendation on the stock.

Source : Equity Bulls

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