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Alembic Pharmaceuticals Ltd.(APL) | Q2FY13 Result Update




IndiaNivesh Securities Pvt Ltd


19 Oct 2012





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Alembic Pharmaceuticals Ltd. (APL) | Q2FY13 Result Update Slightly below estimates (due to fire accident in API plant) … Maintain target price of Rs 79 APL’s Q2FY13 numbers were slightly below our estimates mainly due to fire accident in Panelav API unit, which impacted company’s API export business during the quarter. Company’s revenue grew 2.2% y-o-y & 10.9% q-o-q to Rs 4.06 billion (INSPL estimates = 4.31billion) in Q2 FY13. Formulation business grew1% y-o-y to Rs 3.14 billion on the back of healthy growth of 12% y-o-y in domestic business linked with robust growth in specialty business partially offset by slow growth in anti infective and cold segment. International generics business declined 29% y-o- y (inline with management guidance) due to price erosion, product mix and capacity constraint. API business grew merely 7.1% y-o-y to Rs 940 million on the back of 52% y-o-y increase in domestic APIs, partially offset by 4.7% decline in international API business because of fire accident in Panelav API unit during the quarter. Valuation: At CMP of Rs 70, the stock is trading at P/E multiple of 9.14x of FY13E & 7.15x of FY14E earnings estimates. We have recommend buy on the stock in our “initiating coverage report released on 7th June 2012 at the prevailing price of Rs 49“ with the target price of Rs 79, which has been already achieved . Further, stock has dipped from that level to Rs 70, hence due to limited potential from current level, we revise our rating from Buy to ACCUMULATE and maintain target price of Rs 79. (Valuing at 8x of FY14E earnings estimates).

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