Nuvama cuts target price on Alkem Lab: Find out why?

Nuvama Institutional Equities cut the target price on Alkem Laboratories by 3.5% to Rs 5,840 from Rs 6,053 as the brokerage house sees a slowdown in acute business. It retained its ‘Hold’ call on the stock. It also slashed the earnings per share estimates by 3% for FY26 and 2% for FY27. It further cut the return on equity estimate to 17% in FY27. 

The brokerage firm said that the company’s domestic business declined sequentially, which reflects a slowdown in the acute business. Adding, the impact of no price hike in the NLEM portfolio, which makes up 30% of domestic revenue. 

Alkem Laboratories’ domestic business in the third quarter of the current fiscal year dropped 4% sequentially to Rs 2,400 crore. However, it grew 6% year-on-year. The domestic business missed Nuvama’s estimates. 

Also Read HDFC AMC shares jump 5%. Here are 4 reasons why brokerages are bullish Nomura maintains Buy on ITC. Here are 3 reasons why… ‘US to deport 7.25 lakh Indians’, Rajiv Shukla shares key data, ‘they were earning good, suddenly turned…’ Why is the stock market falling today? Here are 3 reasons…

Not just domestic business, but international business also faced some heat. The US exports contracted 7% YoY while the international exports contracted 14% YoY. However, the brokerage firm thinks that it may return to normal levels with growth in the domestic acute and US generics. 

“We note Alkem’s gross margin in 9MFY25 is attractive; however, this may not sustain in FY26E with growth in domestic acute and US generics business. We think cost optimisation is necessary to expand EBITDA margin,” said Nuvama in a research note. 

Further, it said that acquisitions have a small quantum as the company recently acquired Bombay Ortho and Adroit Biomed, which made a combined revenue of Rs 60 crore for FY24, 0.5% of consolidated revenue. “We note, that under new management, Alkem is making some hard decisions (divestment/M&A), even though the quantum is very small for now,” Nuvama said. 

Alkem Laboratories in Q3

The company’s consolidated net profit rose 6% YoY to Rs 641 crore from Rs 604 crore in Q3 FY24. Sequentially, profit fell almost 9% from 702 crore in the previous quarter of the same financial year. Its total income for the quarter stood at Rs 3,467 crore,

 » Read More

Related Articles

Flexi cap funds vs Multi cap funds: Which is an appropriate choice during volatile times

In September 2024, I wrote a piece, ‘Flexi Cap Funds v/s Multi Cap Funds: Which Is Better at a Market High?’. The valuations of the Indian equity market then were exceptionally high: the BSE SmallCap P/E and BSE MidCap P/E were at around 36x and 34x, respectively, while the BSE LargeCap Index was nearly 26x.

Top 10 mutual funds holding IndusInd Bank may take a Hit: Do you own these?

Indian banking has witnessed various challenges over the last few years, from mounting non-performing assets (NPAs) to regulatory action and issues of corporate governance. Banks are generally considered pillars of country’s financial stability, and thus any disruptions within prominent banks could have extensive ramifications. Institutional investors, regulators, and analysts are keenly watching such events because

High demand for adventure, once-in-a-lifetime trips

If sixty is the new forty, the travel industry is making the most of it, offering curated packages for the sexagenarians, septuagenarians and even octogenarians. From cruises to skiing, Europe to Japan, there is something for everyone, even a trip to Antarctica. Booking.com’s Travel Predictions 2025 suggest baby boomers (those born between 1946 and 1964)

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

0FansLike
0FollowersFollow
0SubscribersSubscribe
- Advertisement -

Latest Articles

Flexi cap funds vs Multi cap funds: Which is an appropriate choice during volatile times

In September 2024, I wrote a piece, ‘Flexi Cap Funds v/s Multi Cap Funds: Which Is Better at a Market High?’. The valuations of the Indian equity market then were exceptionally high: the BSE SmallCap P/E and BSE MidCap P/E were at around 36x and 34x, respectively, while the BSE LargeCap Index was nearly 26x.

Top 10 mutual funds holding IndusInd Bank may take a Hit: Do you own these?

Indian banking has witnessed various challenges over the last few years, from mounting non-performing assets (NPAs) to regulatory action and issues of corporate governance. Banks are generally considered pillars of country’s financial stability, and thus any disruptions within prominent banks could have extensive ramifications. Institutional investors, regulators, and analysts are keenly watching such events because

High demand for adventure, once-in-a-lifetime trips

If sixty is the new forty, the travel industry is making the most of it, offering curated packages for the sexagenarians, septuagenarians and even octogenarians. From cruises to skiing, Europe to Japan, there is something for everyone, even a trip to Antarctica. Booking.com’s Travel Predictions 2025 suggest baby boomers (those born between 1946 and 1964)

Zetwerk IPO at least 15 months away: CEO

Contract manufacturing marketplace Zetwerk Manufacturing Businesses is eyeing an initial public offering (IPO) within the next 15 to 24 months, a senior company official said. “I don’t know if it (IPO) will happen this year. We are looking to file. We are doing all the preparation work, but I think 15 to 24 months is

E-commerce under fire; uncertified products seized in BIS raids on Amazon, Flipkart warehouse

The Bureau of Indian Standards (BIS) has conducted raids on warehouses operated by major e-commerce platforms, including Amazon and Flipkart, resulting in the seizure of thousands of uncertified consumer products, according to the consumer affairs ministry. Key seizures from Amazon and Flipkart  On March 7, BIS officials raided an Amazon warehouse in Lucknow, confiscating 215