Alembic Pharma hits 52-wk high, rallies 20% in 3 days on robust Q4 numbers

The stock is close to its all-time high level of Rs 792, hit in July 2015

Shares of Alembic Pharmaceuticals continued their northward journey on Friday and rose 6 per cent on the BSE to hit a fresh 52-week high of Rs 743 after reporting robust earnings for the quarter ended March 2020. The stock has rallied 20 per cent in the past two trading days and is nearing its all-time high level of Rs 792, hit in July 2015.

Alembic Pharma's consolidated profit before tax (PBT) more than doubled to Rs 298 crore in the January-March quarter (Q4FY20), on the back of healthy revenue. The drug maker had a PBT of Rs 139 crore during the same quarter in the previous fiscal.

The company's total revenue during the quarter under review grew 30 per cent year-on-year (YoY) at Rs 1,207 crore against Rs 927 crore in the corresponding quarter of previous year. The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) during the quarter jumped 95 per cent to Rs 339 crore from Rs 174 crore in Q4FY19. Ebitda margin expanded 900 basis points to 28 per cent from 19 per cent in the previous fiscal.

The management said the company has recorded highest ever revenue and profit for a financial year. This was led by strong growth in the US generics business. During the fourth quarter the company saw India and rest of world (ROW) business also get back to a robust growth, it said.

“The domestic formulation (DF) segment of Alembic Pharma has finally shown signs of revival after four quarters of muted growth. The company remains on track in terms of finishing its large capex project (Rs 2,500 crore) to enhance new dosage offerings and increase capacity requirements in the US Generics segment. We expect the benefit to be witnessed from FY22,” brokerage firm Motilal Oswal Securities said in stock update.

The brokerage firm has increased its EPS estimate on the stock by 11.4 per cent/6.2 per cent for FY21/22 to factor in the favorable outlook for its base portfolio and new launches in US Generics.

“Given the high base of the US business in FY20, we expect compounded earnings to decline 5 per cent over FY20–22. Moreover, we are yet to see consistency in the DF business’ performance following the implementation of this renewed strategy,” analysts at Motilal Oswal Securities said.

At 09:44 am, Alembic Pharma was trading 5 per cent higher at Rs 736 on the BSE, against 1.4 per cent decline in the S&P BSE Sensex. The trading volumes on the counter more-than-doubled with a combined around 1 million shares changing hands on the NSE and BSE so far.