Alkem Labs up 6% on Q4 beat; early Tolvaptan launch, tax cut cheer Street

Alkem Laboratories shares gained 5.5 per cent on BSE, logging an intra-day high of ₹5,757 per share, after the company released its Q4FY26 results on Thursday.  The buying was driven by a broad-based beat — revenue, Earnings before interest, tax, depreciation and amortisation (Ebitda), and profit after tax (PAT) all came in ahead of estimates, guidance also surprised positively, with the company guiding for double-digit India formulations growth and high single-digit US growth in constant currency — both ahead of analyst forecasts.

 

However, at 9:20 AM, Alkem Laboratories’ share price pared some gains and was up 5.41 per cent at ₹5747.05 per share. In comparison, the BSE Sensex was up 0.32 per cent at 76,112.32.

 

 

In the March quarter, Alkem Laboratories reported a fall in consolidated net profit by 22.7 per cent year-on-year (Y-o-Y) for the fourth quarter (Q4) of the financial year 2025-26 (FY26) to ₹236 crore. 

 

However, revenue from operations rose 14.6 per cent to ₹3,603 crore. The profit was impacted by one-time exceptional items and a higher tax charge. Check detailed Q4 results here 

Brokerages’ view on Alkem Laboratories Share

Nomura | Buy | Target: ₹6,890

Alkem's Q4FY26 revenue was in line with estimates, while Ebitda came in 11 per cent ahead, aided by gross margin of 65.4 per cent — up 606 basis points (bps) Y-o-Y and 420 bps ahead of estimates. Profit after tax (PAT) was impacted by an exceptional loss of ₹135 crore — comprising a real estate impairment of ₹74.7 crore and Labour Code impact of ₹60.3 crore — and a higher effective tax rate.

 

FY27 guidance was in line to ahead of estimates. The company expects double-digit India formulations growth, high single-digit US growth in constant currency, and high-teens growth in international markets excluding the US. A key positive was the early confirmation of gJynarque (Tolvaptan) launch in September-October 2026, ahead of Nomura's FY28 estimate. Ebitda margin is expected at 20-21 per cent for FY27.

 

Alkem's move to the new tax code from FY27 will lower the effective tax rate to 27-29 per cent from Nomura's earlier estimate of 36 per cent — a positive for reported EPS. The pending Occlutech acquisition is expected to close in 45-60 days and is not yet factored into Nomura's estimates.  READ | Supriya Lifescience up 15% on healthy Q4 results; should you buy or hold?

Motilal Oswal Financial Services | Neutral | Target hiked to ₹5,840 from ₹5,540 

Alkem delivered a better-than-expected Q4FY26 performance, beating Motilal's estimates by 4 per cent, 6 per cent, and 16 per cent on revenue, Ebitda, and PAT, respectively. Strong traction in the exports segment and higher other income drove the outperformance. 

 

Motilal Oswal has raised its EPS estimates by 3 per cent and 5 per cent for FY27 and FY28, respectively, factoring in a limited competition product pipeline for the US market, enhanced efforts to benefit from Semaglutide opportunities, and a reduction in the effective tax rate estimate. However, the brokerage expects moderation in earnings growth over the next two years due to operational costs related to biosimilars for the US market, efforts to improve the Occlutech business, and a step-up in tax rate from 18 per cent in FY26 to 27-28 per cent in FY27.

Choice Institutional Equities | Add | Target cut to ₹5,755 from ₹5,995

The brokerage expects revenue to sustain low to mid-teens growth, driven by new launches and scale-up of recent acquisitions. Upcoming launches, including Valsartan, Tolvaptan, and select biosimilars, are expected to help offset pricing headwinds. Ebitda margin is expected in the range of 20-21 per cent for FY27, with a further approximately 100 bps expansion likely in FY28. Margin expansion is, however, expected to moderate going forward. Choice also sees incremental upside potential from the successful ramp-up of the Medtech and CDMO verticals.

 

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