Alkem Labs - Focus Remains On Domestic Formulation, U.S.; Valuations Priced In: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Alkem Laboratories Ltd. is one of the pharmaceutical companies with the highest proportion of (66% of total sales 9M FY24) sales from the domestic formulation segment. While it continues to outperform the industry in the DF segment, the outlook is dependent on the variability of season and acute infections as it derives 82% of DF sales from acute therapies. After muted performance in the U.S. generics business (23% of sales) over FY18- 23, there has been some recovery in 9M FY24. The sound compliance trackrecord and a healthy product pipeline would enable 6% sales compound annual growth rate in constant currency terms to $394 million over FY24-26. Further, Alkem Labs is focusing on the biosimilar and contract development manufacturing organisation business through Enzene biosciences and expects to reach breakeven in FY25.Over FY18-23, Alkem Labs has delivered 13%/10%/12% revenue/Ebitda/profit after tax compound annual growth rate. However, return on equity decreased from 15% in FY18 to 14% in FY23. Considering 9% earnings CAGR and return ratio stabilising at ~18% over FY24- 26, we value Alkem Labs at 25 times 12 months (in line with its 10-year average and 17% discount to sector average) forward earnings to arrive at a target price of Rs 5160. We believe the current valuation and ~65% stock appreciation over the past one year adequately factor the upside in earnings. We reiterate our Neutral stance on the stock..Click on the attachment to read the full report:.Jubilant FoodWorks To Replicate Its 20-Minute Pizza Delivery Promise For Popeyes.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Alkem Labs - Focus Remains On Domestic Formulation, U.S.; Valuations Priced In: Motilal Oswal

We value Alkem Labs at 25 times 12 months forward earnings to arrive at a price target of Rs 5,160.

NDTV Profit

NDTV Profit

Follow Us

DOWNLOAD THE APP