Motilal Oswal’s research report on Alembic Pharma
Alembic Pharma (ALPM) delivered a better-than-expected performance in 4QFY25. A strong performance in export markets was offset partly by a muted show in domestic formulation (DF) segment. API business also witnessed healthy recovery during the quarter. ALPM plans to build a product pipeline in the peptide space for regulated markets and scale up its injectables and ophthalmics product offerings.
We largely maintain our estimates for FY26/FY27. We value ALPM at 21x 12M forward earnings to arrive at a TP of INR930. ALPM ended FY25 with a modest 7%/8% YoY growth in revenue/EBITDA and an earnings decline of 7% YoY. A weak performance in DF and API segment, coupled with financial leverage, impacted its FY25 performance. Having said this, ALPM is enhancing its product offerings in the US market and implementing effortsto improve growth in the DF market.
Accordingly, we estimate a 23% earnings CAGR over FY25-27. We maintain Neutral rating due to limited upside from current levels.
