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Alembic Pharmaceuticals Ltd. | Visit Note




IndiaNivesh Securities Pvt Ltd


02 Sep 2013





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Alembic Pharmaceuticals Ltd. | Visit Note Currently fair valued but outlook seems positive We visited Alembic Pharmaceuticals Ltd. (APL) expanded facility of the company in Panelav (Gujrat). Key takeaways from the meeting are followings: Focusing on complex molecules filings; Regulated generic business to grow above 30% CAGR during FY13-15E; Increasing focus on chronic therapies in domestic market is reaping fruit: Valuation: At CMP of Rs 137, the stock is trading at P/E multiple of 12.6x of FY14E & 10.2 x of FY15E earnings estimates. We had recommended buy on the stock at prevailing price of Rs 49 in our “initiating coverage report released on 7th June 2012” with the target price of Rs 79 & further updated to Rs 163, which has been achieved. On account of healthy growth performance of the company in the last one and half year, valuation has expanded from forward P/E multiple of 5-6x to 11-12x. Further expansion in valuation will depend on the consistent outperformance and deliverance on guidance. We believe that currently stock is fairly valued and most of the positives have been factored in the price. We continue to maintain HOLD rating on the stock with target price to Rs 163 (valuing at 12x of FY15E).

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