Alembic Pharma - Q1FY21 Result Update - ICICI Securities

Revenues grew robust 41.4% YoY to Rs. 1341 crore due to 72.8% YoY growth in US to Rs. 596 crore. Additionally, better-than-expected sales in 1) RoW (up 62% YoY) as serialisation issues especially in Europe have been addressed, 2) API segment (up 54%) due to Azithromycin and other opportunities propelled revenue growth. Domestic formulations de-grew 5.6% to Rs. 306 crore. EBITDA margins improved 587 bps YoY to 30.4% mainly due to lower other expenditure amid lower promotional, travelling and R&D costs. EBITDA grew 81.1% YoY to Rs. 407.4 crore. Adjusted PAT grew 103.7% YoY to Rs. 302 crore mainly due to strong operational performance.

Valuation & Outlook

Key takeaway from Q1FY21 numbers were significant traction from ROW and API segments (that hitherto were lumpy). Elsewhere, we expect US run rate to sustain at +US$70 million on the back of established US base amid significant market share gains in Sartans. On the domestic front, barring Covid-related disruptions, the management expects a steady run rate. For ROW markets, the management has guided the current run-rate to be the base, going ahead, having addressed serialisation issues in Europe. The management has also guided for 15-20% growth in the API segment. With the aggressive R&D, capex, the management has already signalled its long term strategy that includes a foray into niche areas like oncology, injectables, derma, etc. Although this is fraught with a new set of challenges, Alembic now looks in much better shape to withstand those challenges. We maintain BUY and arrive at a target price of Rs. 1140 based on 22x FY22E EPS of Rs. 51.9.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_AlembicPharma_Q1FY21.pdf

Shares of ALEMBIC PHARMACEUTICALS LTD. was last trading in BSE at Rs.961.55 as compared to the previous close of Rs. 999.35. The total number of shares traded during the day was 87102 in over 6196 trades.

The stock hit an intraday high of Rs. 1027.8 and intraday low of 952. The net turnover during the day was Rs. 86190323.

Source : Equity Bulls

Keywords