Views on Alembic 1QFY2016 Results: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research - Pharma, Angel Broking) on Alembic 1QFY2016 Results:

"Alembic Pharma, for its 1QFY2016 results, posted results lower than expected, on the OPM and net profit front, while sales were marginally lower than expected.

On topline, the company posted sales of INR 583cr V/s INR 601cr expected and V/s INR 492cr in 1QFY2015, posting a yoy growth of 18.4%. The growth was driven by domestic formulation (INR 291cr) and export formulation (INR 176cr) markets, which posted a yoy growth of 17.2% and 29.0% respectively. The API sales (INR 117cr), posted a yoy growth of 10%.

The Indian formulation sales (INR 263cr), posted a yoy growth of 18.0% yoy. The growth in the domestic formulation market was driven by specialty segment, which posted a 22% yoy and acute segment posted a growth of 12% yoy. The Indian generic segment (INR 29cr), posted a yoy growth of 13%.

In export formulation markets, the generic formulation exports (INR 168cr) posted a yoy growth of 47%. The export formulation branded market (INR 84cr) posted a yoy dip of 63%.

On the operating front, the gross margins came in at 63.4% v/s 64.0% in 1QFY2015, which lead the OPM's to dip from 17.4% V/s 19.8% expected V/s 19.5% in 1QFY2015, a dip of 216bps yoy. The gross margins dipped, on back of sales mix change. The Formulation: API moved to 80:20 in 1QFY2016 V/s 79:21 in 1QFY2015. OPM dip was sharper than the gross margin contraction, on back of the R&D expenditure, which was 8.2% of sales in 1QFY2016 V/s 6.0% of sales in 1QFY2015. Consequently, the PAT came in at INR 70cr V/s INR 86cr expected V/s INR 65cr in 1QFY2015, a growth of 8% yoy. We maintain our NEUTRAL rating on the stock, on back of valuations."

Shares of ALEMBIC PHARMACEUTICALS LTD. was last trading in BSE at Rs.710.95 as compared to the previous close of Rs. 746. The total number of shares traded during the day was 146730 in over 6010 trades.

The stock hit an intraday high of Rs. 749 and intraday low of 661. The net turnover during the day was Rs. 104939293.

Source : Equity Bulls

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