“For 4QFY2012, Alembic Pharma’s (Alembic) performance on the top-line front came in-line with our expectations. However, the company’s performance on the bottom-line front was below our expectations, on account of lower-than-expected OPM. However, we maintain our Buy view on the stock.”
“For 4QFY2012, Alembic reported revenue growth of 14.9% yoy to Rs338cr, with domestic formulation business growing by just 17% yoy. However, the exports segment grew by only 12.5% yoy, because of the decline in the international generics segment �" a major contributor to the exports segment. OPM for the quarter grew to 11.6% from 9.0% in 4QFY2011, though it came in lower than our expectations. During the quarter, the company’s net profit increased by 97.9% yoy to Rs20.3cr, below our expectations. Net profit growth was primarily driven by revenue growth and OPM expansion during the quarter.”
“Alembic’s growth and profitability profile has improved post the restructuring carried out by management. Over FY2012-14, we expect the company to post a CAGR of 13.9% and 14.6% in its sales and net profit, respectively. At the CMP, the stock is trading at attractive valuations. Hence, we maintain our Buy view on the stock with a target price of Rs91,” says Angel Broking research report.
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