ICICI Direct's research report on Alembic Pharma
Revenues grew 10% YoY to Rs 949 crore (I-direct estimate: Rs 980 crore) due to 53% YoY growth in US to Rs 345 crore (I-direct estimate: Rs 317 crore). Domestic formulations declined 2.1% to Rs 324 crore (I-direct estimate: Rs 374 crore). EBITDA margins improved 620 bps YoY to 23.7% (I-direct estimate: 19.0%) mainly due improvement in gross margins (78.5% vs. 70.4% in Q1FY19). EBITDA grew 49% YoY to Rs 224.9 crore vis-à-vis I-direct estimate of Rs 186.2 crore. Net profit grew 27.4% YoY to Rs 115.2 crore (I-direct estimate of Rs 119.3 crore) mainly due to a strong operational performance.
Outlook
The benefits are most likely to be back-loaded. Immediate cash burn is likely to weigh on sentiments in the near term. Our target price arrives at Rs 540 based on 22x FY21E EPS of Rs 25.4.
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