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Alembic Pharmaceuticals 4QFY2014 performance highlights and results update

April 29, 2014, Tuesday, 16:41 GMT | 11:41 EST | 21:11 IST | 23:41 SGT
Contributed by Angel Broking


For 4QFY2014, Alembic Pharmaceuticals (Alembic) delivered numbers much ahead of our estimates on the OPM front; however, the net profit came in below expectations. The net sales came in at Rs.463cr V/s an expected Rs.492cr, registering a yoy growth of 23.4%. The company's OPM came in at 19.6% V/s 18.7% expected, posting an expansion of 248bp yoy, which led the company to post a net profit growth of 40.4% yoy to Rs.61cr V/s our expectation of Rs.69.9cr. We maintain our Neutral rating on the stock.

Results better than expectations on the OPM front: For 4QFY2014, Alembic delivered numbers much above our expectations on the OPM front. Net sales came in at Rs.463cr V/s an expected Rs.492cr, registering a yoy growth of 23.4%. The growth was driven by exports, which rose 58.6% yoy. Domestic sales on the other hand stood at Rs.199.5cr V/s Rs.175.3cr in the corresponding quarter of last year, registering a yoy growth (with domestic formulation growth) of 14%. The company's OPM came in at 19.6% V/s an expected 18.7%, posting an expansion of 248bp yoy, which led the company to post a net profit growth of 40.4% yoy to Rs.61cr V/s our expectation of Rs.69.9cr.

Outlook and valuation: Alembic’s growth and profitability profile has improved post the restructuring carried out by the Management. Over FY2014-16, we expect the company to post a CAGR of 16.1% and 14.6% in sales and net profit respectively. We recommend a Neutral rating on the stock.

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