MOSL: ALEMBIC PHARMACEUTICALS (Neutral)-Growth plans for the US market on track
Alembic Pharmaceuticals: Growth plans for the US market on track; Momentum of filings from new site to build in FY20 onwards
(ALPM IN, Mkt Cap USD1.5b, CMP INR540, TP INR615, 14% Upside, Neutral)
We met the management of Alembic Pharma (ALPM) to understand the progress of its ongoing significant capex over the past 3-4 years. Key takeaways:
- With investments of INR12b largely over, ALPM is moving towards exhibit batches and subsequent filings of oral solids and injectable facilities. Accordingly, FY21 would be the year for a revenue ramp-up and stabilization of operational costs associated with these facilities.
- We expect 9% earnings CAGR over FY19-21, which appears moderate, partly due to the high base of FY19. We further expect earnings momentum to improve greatly, FY21 onwards, as ALPM starts reaping benefits from its new investments. We value ALPM at 18x 12M forward earnings and arrive at a PT of INR615.
- We remain positive on ALPM, on the back of its strong product pipeline in onco-injectables/derma/oral solids dosages, creation of capacity/capability to support manufacturing and for its sound compliance record in the US market. Even the domestic branded formulation business is in good stead to outperform the industry. However, we maintain Neutral on limited upside from current levels.
Alembic Pharmaceuticals Limited is a pharmaceutical company. The Company is engaged developing formulations and active pharmaceutical ingredients (API). The Company focuses on anti-infective, analgesic and, cough and cold therapies. It also focuses on therapies, such as cardiology, diabetes, gynecology, gastrointestinal, orthopedic, dermatology and ophthalmology. Its APIs include independent manufacturing blocks for Macrolides, non-steroidal anti-inflammatory drugs (NSAIDs) and other drugs. The Company offers international and domestic formulations. Under domestic formulation, it offers Branded Formulations and Generic formulations. Its domestic formulation include Roxid, Zofix, Althrocin, Tellzy AH, Revas H, Lactonic, Folinal, Gestofit, Glisen 1/2, Glimser 1/2, Veldrop, Azithral, Brinzemic and Neolap. Its generic formulations include Cetral, Ephedrex CD, Sicor, Worid, Alcephin, Alcizon, Baciclox, Comeba, Furobid, O Win Suspension, O win T, Silomag Gel, Pentab, Aginal AT and Pyremol.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.