Add Alkem Laboratories, target price Rs 5,700: HDFC Securities

HDFC Securities has an Add call on Alkem Laboratories with a target price of Rs 5,700. The current market price of Alkem Laboratories is Rs 4932. Alkem Laboratories, incorporated in 1973, is a Large Cap company with a market cap of Rs 58835.55 crore, operating in the pharmaceuticals sector.

Alkem's key products/revenue segments include Pharmaceuticals, Other Operating Revenue, Export Incentives and Scrap for the year ending 31-Mar-2024.

Financials

For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 3467.27 crore, down -2.31% from last quarter Total Income of Rs 3549.15 crore and up 1.46% from last year same quarter Total Income of Rs 3417.51 crore. The company has reported net profit after tax of Rs 640.79 crore in the latest quarter.

The company's top management includes Mr.Basudeo N Singh, Ms.Sudha Ravi, Ms.Sangeeta Singh, Mr.Arun Kumar Purwar, Mr.Sujjain Talwar, Mr.Sarvesh Singh, Mr.Mritunjay Kumar Singh, Mr.Srinivas Singh, Mrs.Madhurima Singh, Mr.Sandeep Singh, Mr.Narendra Kumar Aneja. Company has BSR & Co. LLP as its auditors. As on 31-12-2024, the company has a total of 12 crore shares outstanding.

Investment Rationale
Sales growth to be moderate due to ~8% growth in India formulation business and ~8% growth in international business (ex-US) to partly offset by muted US business (-1% QoQ). Gross margin to see YoY improvement but higher costs towards growth initiatives to keep EBITDA under pressure.

Promoter/FII Holdings
Promoters held 55.66 per cent stake in the company as of 31-Dec-2024, while FIIs owned 10.14 per cent, DIIs $Parser.toNumber($MarketsData-marketResults.newShareHolding.summary.dii.percentage) per cent.