(Rating: BUY, TP: Rs1,100, Upside: 20%)
– Alembic has withdrawn its FY22 guidance of Rs50 EPS which was reiterated in Q4 FY21. More than the sharp fall in US, what has led to the withdrawal is the uncertainty around US business which has seen severe, and probably unexpected, price erosion in the ex-sartans business.
– We forecast US business to clock US$230mn revenues, down from US$280mn in FY22 with corresponding cut to FY23 estimate though FY24 remains largely unchanged.
– A single quarter of US reversal does not preempt the case for optimism on FY24 performance. This is the key reason for not cutting target 25x PE on FY23 (even as we await filings from new facilities) though we have taken the axe to FY22/23 estimates by 22%/15%.
– Retain BUY with revised TP Rs1,100, based on 25x FY23 EPS. If US sales recover beyond US$60mn/quarter run rate in FY22, it would be an additional upside not factored in our estimate.
Shares of ALEMBIC PHARMACEUTICALS LTD. was last trading in BSE at Rs. 807.1 as compared to the previous close of Rs. 910.75. The total number of shares traded during the day was 282880 in over 23034 trades.
The stock hit an intraday high of Rs. 868.55 and intraday low of 800. The net turnover during the day was Rs. 233445408.