Poised for robust growth
Alkem Labs is a leading Indian pharmaceutical company engaged in the manufacturing of branded generics, generic drugs, active pharmaceutical ingredients (“APIs”) and Nutraceuticals. Indian business contributes 73% to overall sales while international business contributes for the rest.
View & Valuvation:
We expect revenue and PAT to grow at a CAGR of 18.5 & 21.7% respectively over FY16-19E. Further, EBITDA margin is expected to improve by 280bps on account of increasing launches in chronic products coupled with consolidation in acute therapies. Hence, we initiate Alkem with a BUY rating with a TP of Rs.1926 based on 19x FY19E EPS.
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