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Alembic Pharma (Alembic) reported a strong performance for 2QFY2012. The
company’s growth was driven by exports and the domestic formulation business
(which performed better than others), as restructuring of the business segment has
now started showing results. Alembic reported robust sales growth and
improvement in the OPM. At the CMP, the stock is trading at attractive valuations.
Hence, we maintain our Buy view on the stock.
Results above estimates: Alembic reported strong revenue growth of 23.9% yoy to
`396cr. Although the domestic formulation business grew by just 9.7%, it
performed well given the slow growth in the industry. However, the main growth
driver was the exports segment, which grew by 51.2% yoy, driven by API and
formulations business. OPM for the quarter came in at 15.3% (14.6% in
1QFY2012). The company recorded net profit of `38cr, primarily driven by
revenue growth and expansion in OPM.
Outlook and valuation: The company’s growth and profitability profile has
improved post the restructuring carried out by management. Over FY2011-13,
we expect the company to post a CAGR of 15.4% and 30.6% in sales and
net profit, respectively. At the CMP, the stock is trading at attractive
valuations. Hence, we maintain our Buy recommendation on the stock with
a target price of `77.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Alembic Pharma (Alembic) reported a strong performance for 2QFY2012. The
company’s growth was driven by exports and the domestic formulation business
(which performed better than others), as restructuring of the business segment has
now started showing results. Alembic reported robust sales growth and
improvement in the OPM. At the CMP, the stock is trading at attractive valuations.
Hence, we maintain our Buy view on the stock.
Results above estimates: Alembic reported strong revenue growth of 23.9% yoy to
`396cr. Although the domestic formulation business grew by just 9.7%, it
performed well given the slow growth in the industry. However, the main growth
driver was the exports segment, which grew by 51.2% yoy, driven by API and
formulations business. OPM for the quarter came in at 15.3% (14.6% in
1QFY2012). The company recorded net profit of `38cr, primarily driven by
revenue growth and expansion in OPM.
Outlook and valuation: The company’s growth and profitability profile has
improved post the restructuring carried out by management. Over FY2011-13,
we expect the company to post a CAGR of 15.4% and 30.6% in sales and
net profit, respectively. At the CMP, the stock is trading at attractive
valuations. Hence, we maintain our Buy recommendation on the stock with
a target price of `77.
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