Alembic Pharmaceuticals - 4QFY2017 Result Update - Angel Broking

Alembic Pharma posted marginally lower than expected results for 4QFY2017. In Rupee terms, revenues grew by 17.8% yoy to Rs. 737cr (Rs. 770cr expected) v/s Rs. 626cr in 4QFY2016. In sales terms, the company posted growth on the back of international formulations, which grew by 44% yoy, while the Indian domestic formulations grew by 6.0% yoy. On the operating front, EBITDA margin came in at 18.2% (19.9% expected) v/s 22.7% in 4QFY2016, a dip of 460bps yoy. Thus, PAT came in at Rs. 93cr (Rs. 101cr expected) v/s Rs. 91.2cr in 4QFY2016, up 2.4% yoy. We recommend an Accumulate rating.

Results marginally below expectations: In Rupee terms, revenues grew by 17.8% yoy to Rs. 737cr (Rs. 770cr expected) v/s Rs. 626cr in 4QFY2016. In sales terms, the company posted growth on the back of international formulations, which grew by 44% yoy, while the Indian domestic formulations grew by 6.0% yoy. API business on the other hand posted a yoy growth of 9.0%. On the operating front, EBITDA margin came in at 18.2% (19.9% expected) v/s 22.7% in 4QFY2016, a dip of 460bps qoq. The dip was mainly on the back of lower gross margins, which came in at 72.8% v/s 80.2% in 4QFY2016. Thus, PAT came in at Rs. 93cr (Rs. 101cr expected) v/s Rs. 91.2cr in 4QFY2016, up 2.4% yoy.

Outlook and valuation: Over FY2017-19E, we expect the company to post a CAGR of 22.5% in sales, while profitability will witness a CAGR of 17.3% yoy. We maintain our Accumulate rating on the stock.

Shares of ALEMBIC PHARMACEUTICALS LTD. was last trading in BSE at Rs.609.2 as compared to the previous close of Rs. 600.05. The total number of shares traded during the day was 5804 in over 259 trades.

The stock hit an intraday high of Rs. 611.05 and intraday low of 599.85. The net turnover during the day was Rs. 3530584.

Source : Equity Bulls

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