Alembic Pharma Delivers Strong Q3 Results, Benefiting from Domestic and Export Markets

Alembic Pharmaceuticals Ltd. has experienced a robust third quarter, boasting better-than-expected operational performance. This surge has been primarily fueled by their formulation exports and strength in the domestic formulation market, signifying a positive outlook for the company's financial growth trajectory.

Enhanced Earnings and Upgraded Estimates

The company has notably improved the U.S. generics business foundation, while also experiencing a substantial demand increase in non-U.S. exports which has augmented their financial uplift. Motilal Oswal, a prominent financial services firm, has acknowledged this progress by enhancing their earnings estimates by 2%, 3%, and 4% for the fiscal years 2024, 2025, and 2026, respectively. These amendments are reflective of the company's superior execution in the animal healthcare segment, the introduction and broader reach of new product launches in non-U.S. markets, controlled spending in research and development, and improved operating leverage.

Growth Projection and Valuation

With these factors in mind, Motilal Oswal has assigned a valuation of 22 times the 12 months forward earnings to Alembic Pharma, setting a target price of Rs 910. Looking forward, forecasts indicate an expected 12% and 33% growth in Ebitda and earnings year-over-year by the end of FY24. Furthermore, a compelling 16% compound annual growth rate in earnings is projected over the span of FY24-26, driven by the robustness of core markets, domestic formulation (DF), and exports.

Despite the optimistic earnings outlook, the firm has advised a neutral rating, suggesting that the potential earnings growth is already reflected in the current valuation of Alembic Pharma shares. Investors are invited to review the detailed analysis in the complete report for a comprehensive understanding of the forecasted financial performance.

Alembic, Pharma, Earnings