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Alembic Pharmaceuticals: Opportunities abound for future market growth

SPA Securities | 14 Sep, 2017  | Follow Author | Add to my Favourites 
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Alembic Pharmaceuticals Ltd. is principally engaged in the manufacturing and selling of APIs and Formulations. With an emphasis on innovation and technology, the company has established a state-of-the-art research facility - Alembic Research Centre (ARC)-including formulation research and 150-bed bioequivalence facility at Vadodara, Gujarat. Additionally, APL has recently invested in ultra-modern R&D center at Hyderabad. APL is one of the leading players in the industry to have invested ~14% of its turnover in R&D. As a growth strategy, the company has aggressively started investing in the international generics market with successful ANDA and DMF filings. APL has also filings across Canada, Europe, Australia, South Africa & Brazil. The company caters to the rest of the world markets through branded formulation sales. The company aims to explore opportunities in the therapeutic areas such as Dermatology, Oncology, and Injectable Formulations.


- US key trigger for exports growth

- Specialty Segments to drive Domestic sales growth

- High capex and R&D to drive long term growth plans


Outlook and Valuation:

The company is aggressively investing in R&D and expansion, especially to build a strong US foothold. This includes a foray into niche areas like oncology, injectables, derma, etc. We believe the benefits from increased R&D and capex could materialize for the company by FY20. Immediate cash-burn is likely to weigh on the operational margins and return ratios in the near term, however, consistent launches in domestic and generic markets with FTF opportunities are expected to provide above market growth for the company going ahead. The company is currently trading at a P/E of ~24x FY17 EPS of INR 21.4.

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572.00 +18.90
571.05 +16.25
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About SPA Securities

SPA Securities was promoted by a team of finance professionals in 1995 with an objective to provide value added financial services. Initially, the Group focused as a niche financial solutions provider in corporate finance and wealth management to Indian companies and high net worth individuals. In January 2000, the Group expanded its operations and the range of services. Today, SPA provides services for securities broking, merchant banking, wealth management, financial advisory, corporate finance , risk management and insurance broking.


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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

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