Buy Alkem Laboratories, target price Rs 3916: ICICI Securities
Alkem Laboratories Ltd., incorporated in the year 1973, is a Large Cap company (having a market cap of Rs 33880.54 Crore) operating in Pharmaceuticals sector.
By ETMarkets.com | Updated:
Agencies
ICICI Securities has buy call on Alkem Laboratories with a target price of Rs 3916. The current market price of Alkem Laboratories is Rs 2876.35. Time period given by analyst is one year when Alkem Laboratories Ltd. price can reach defined target.
Alkem Laboratories Ltd., incorporated in the year 1973, is a Large Cap company (having a market cap of Rs 33880.54 Crore) operating in Pharmaceuticals sector.
Alkem Laboratories Ltd. key Products/Revenue Segments include Pharmaceuticals, Other Operating Revenue, Export Incentives, Scrap, Royalty Income and Subsidy for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 2504.38 Crore, down -6.29 % from last quarter Total Income of Rs 2672.50 Crore and up 11.88 % from last year same quarter Total Income of Rs 2238.44 Crore. Company reported net profit after tax of Rs 108.21 Crore in latest quarter.
Investment Rationale
Alkem Laboratories’ (Alkem) Q4FY22 performance was lower than estimates on the profitability front mainly due to cost inflation. Revenues were in line with estimates and grew 13.3% YoY to Rs24.8bn (I-Sec: Rs24.3bn) driven by robust domestic growth. It believes the domestic business will continue to be key value driver for Alkem. EBITDA margin contracted 330/540bps YoY/QoQ to 13.6% (I-Sec: 18.0%). Lower EBITDA and prior-period tax expenses (of Rs910mn) pushed adj. PAT to Rs1.1bn (-64% YoY). US revenues declined 5.4% QoQ due to continued pricing pressures. It remains positive on the long-term outlook given sustainable growth in the domestic market with consistent outperformance, scale-up in US generic business, and potential for operating leverage, although near-term margins are likely to remain under pressure due to cost inflation. It reiterates BUY with a revised target price of Rs3,916/share.
Promoter/FII Holdings
Promoters held 57.13 per cent stake in the company as of 31-Mar-2022, while FIIs owned 5.41 per cent, DIIs 14.14 per cent.
Alkem Laboratories Ltd., incorporated in the year 1973, is a Large Cap company (having a market cap of Rs 33880.54 Crore) operating in Pharmaceuticals sector.
Alkem Laboratories Ltd. key Products/Revenue Segments include Pharmaceuticals, Other Operating Revenue, Export Incentives, Scrap, Royalty Income and Subsidy for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 2504.38 Crore, down -6.29 % from last quarter Total Income of Rs 2672.50 Crore and up 11.88 % from last year same quarter Total Income of Rs 2238.44 Crore. Company reported net profit after tax of Rs 108.21 Crore in latest quarter.
Investment Rationale
Alkem Laboratories’ (Alkem) Q4FY22 performance was lower than estimates on the profitability front mainly due to cost inflation. Revenues were in line with estimates and grew 13.3% YoY to Rs24.8bn (I-Sec: Rs24.3bn) driven by robust domestic growth. It believes the domestic business will continue to be key value driver for Alkem. EBITDA margin contracted 330/540bps YoY/QoQ to 13.6% (I-Sec: 18.0%). Lower EBITDA and prior-period tax expenses (of Rs910mn) pushed adj. PAT to Rs1.1bn (-64% YoY). US revenues declined 5.4% QoQ due to continued pricing pressures. It remains positive on the long-term outlook given sustainable growth in the domestic market with consistent outperformance, scale-up in US generic business, and potential for operating leverage, although near-term margins are likely to remain under pressure due to cost inflation. It reiterates BUY with a revised target price of Rs3,916/share.
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Promoter/FII Holdings
Promoters held 57.13 per cent stake in the company as of 31-Mar-2022, while FIIs owned 5.41 per cent, DIIs 14.14 per cent.
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