Neutral on Alembic Pharma, target price Rs 1070: Motilal Oswal

Neutral on Alembic Pharma, target price Rs 1070:  Motilal Oswal

Motilal Oswal has neutral call on Alembic Pharma with a target price of Rs 1070. The current market price of Alembic Pharmaceuticals Ltd. is Rs 1004.

Alembic Pharmaceuticals Ltd., incorporated in the year 2010, is a Mid Cap company (having a market cap of Rs 19911.84 Crore) operating in Pharmaceuticals sector.

For the quarter ended 31-12-2020, the company reported a Consolidated sales of Rs 1314.33 Crore, down 9.80 % from last quarter Sales of Rs 1457.10 Crore and up 8.70 % from last year same quarter Sales of Rs 1209.13 Crore Company reported net profit after tax of Rs 259.20 Crore in latest quarter.

Investment Rationale
The brokerage lowers EPS estimate by 3%/4% for FY22/FY23, factoring in price erosion in Sartans on account of peers’ re-entry and the delayed commercialization at the injectables facility. It values ALPM at 19x 12M forward earnings and arrive at TP of INR1,070

Promoter/FII Holdings
Promoters held 69.8 per cent stake in the company as of Dec 30, 2020, while FIIs held 7 per cent, DIIs 10.1 per cent and public and others 13.1 per cent.

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