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Multi Baggers

SP Tulsian

Investment Advisor

5.30 AM Jan 1st 1970

Alembic Pharma

BSE ID : 533573     NSE ID : APLLTD

RECOMMENDED PRICE 70.00

PEAK FROM RECO 1150.00 1,542.86%

CURRENT PRICE 982.35 Resource id #8

Alembic Pharmaceuticals, a mid-size vertically integrated and research based pharma company, is part of the Alembic group (flagship company being Alembic Ltd., which holds 29.18% stake in the company) having interests in power generation, real estate, speciality chemicals and engineering solutions.

Alembic Pharmaceuticals

Alembic Pharmaceuticals, a mid-size vertically integrated and research based pharma company, is part of the Alembic group (flagship company being Alembic Ltd., which holds 29.18% stake in the company) having interests in power generation, real estate, speciality chemicals and engineering solutions.
 
Alembic Pharma has many business segments such as active pharmaceutical ingredients (API), bulk pharma chemicals, formulations, herbal nutraceuticals, veterinary, contract research services, of which, domestic formulations accounts for the largest pie, with little over half of company revenues, followed by international API.
 
The company has formulations plant at Baddi in Himachal Pradesh. In the branded formulations space, company enjoys a strong presence in anti-infective, pain management, cough & cold. Besides thrust on cardiology, gynaecology, diabetes, orthopaedics, ophthalmology and rheumatology, it has newly launched dermatology division.
 
Enjoying market share of 1.62%, its 4 brands, viz. Azithral, Roxid, Althrocin, and Wikoryl, feature in the top 300 brands of the industry.
 
It operates its international division from 3 US FDA approved API plants and has cumulative ANDA filings of 49, with 20 approvals (including two tentative approvals), indicating a strong pipeline.
 
As of 30th June 2012, its equity stood at Rs. 37.70 crore comprising of 18.85 crore shares of face value Rs. 2 each. Of this, promoter holding is 74.13%, institutional holding 7.62%, while balance 18.25% is public float. 
 
For FY12, company reported consolidated income from operations of Rs. 1,466 crore and PAT of Rs. 130 crore, with EPS for the year of Rs. 6.90. This entails net margin of 8.9%. EBITDA for the year stood at Rs. 255 crore, entailing healthy margins of 17.3%.
 
During the first quarter of FY13, company maintained consistency in its financial performance, with consolidated income from operations increased to Rs. 368 crore, up 7% QoQ from Rs. 343 crore in 3 months ended 31st March 2012.
 
During Q1FY13, EBITDA stood at Rs. 61 crore, up from Rs. 50 crore in the immediately preceding quarter, strengthening margin to 16.6% from 14.7%. PAT jumped 51% to Rs. 31 crore, from barely Rs. 20 crore in Q4FY12. EPS for Q1FY13 was Rs. 1.64.
 
As of 30th June 2012, company's networth was Rs. 426 crore, while its current market cap is Rs. 1,338 crore. Company is expected to close FY13 with 10-12% topline growth and ~15% PAT growth, which leads to EPS of close to Rs 8 and PE of 9x. For FY14, expected topline is Rs 2,000 crore with EPS of about Rs 10.
 
Share at 70, is recommended for a buy with target price of Rs. 90 for the next 12 months. 

Disclosure: No holding in the stock

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