MOSL: ALEMBIC PHARMACEUTICALS (Neutral)-One-time US sales drive better-than-expected performance
Alembic Pharmaceuticals: One-time US sales drive better-than-expected performance
(ALPM IN, Mkt Cap USD1.5b, CMP INR580, TP INR595, 3% Upside, Neutral)
- ALPM’s revenue increased ~43% YoY to INR11.3b (our estimate: INR9.1b) in 2QFY19, primarily led by US business. Gross margin expanded 290bp YoY (+550bp QoQ) on account of a superior product mix. EBITDA margin expanded ~410bp YoY to 26.8%, primarily due to a higher gross margin and lower employee expenses (-400bp as % of sales), partially offset by higher other expense (+230bp). EBITDA grew ~69% YoY to INR3b (our estimate: INR1.6b), mainly led by strong revenue growth and margin expansion. Interest expense stood at INR58m v/s INR4m in the year-ago period. PAT grew ~65% YoY to INR2b (our estimate: INR1b). For 1HFY19, sales/EBITDA/PAT grew 38%/62%/54% YoY to INR19.9b/ INR4.5b/INR2.9b. We expect 2HFY19 to be relatively soft as the base effect comes into play.
- Valsartan shortage drives sales: International sales (52% of overall sales) grew robustly by ~124% YoY to INR5.9b, led by both non-US (+133% YoY) and US (+121% YoY, led one-time sales of Valsartan due to shortage) segments. API business grew ~9% YoY to INR1.6b. Domestic business (34% of sales) remained flat at INR3.9b due to a high base. Acute segment sales declined marginally by ~3% YoY, while Specialty sales were flat.
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.
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