Alembic Pharma - 4QFY2013 Result Update - Angel Broking

Alembic Pharmaceuticals (Alembic)'s 4QFY2013 results have come above our expectations on the sales front. The company grossed sales of Rs. 375cr, registering a growth of 10.0% yoy, above our expectations of Rs. 349cr. On the operating front, the company posted an OPM of 17.1% vs an expectation of 14.6%. This led the net profit to come above our expectation at Rs. 44cr (expectation was of Rs. 19cr). We recommend a Buy on the stock.

Results above expectations: Alembic reported a revenue growth of 10.0% yoy to Rs. 375cr, mainly driven by the domestic formulation business which grew by 16.0% yoy. However, the exports segment grew only by 3% yoy, impacted by de-growth of API exports. On the domestic front, the sales growth came on back of the API segment, which grew 30% yoy, while the formulations posted a growth of 12% yoy. Consequently, the OPM came in at 17.0%, much higher than the 14.6% expected, ie an expansion of 560bp yoy. This aided the adjusted Net Profit to grow by 115.0% yoy to end the period at Rs. 43.7cr.

Outlook and valuation: Alembic's growth and profitability profile has improved post the restructuring carried out by the Management. Over FY2013-15, we expect the company to post a CAGR of 11.6% and 26.1% in sales and net profit respectively. We maintain our Buy on the stock with a target price of Rs. 139.

Source : Equity Bulls

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