Here is HDFC securities report on alembic pharma:
http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/3002381
Thanks for report
The one thing that caught my eye was assumption of currency rate of :Rs 64/ $ in 2015 andRs 65/ $ in 2016.
With the current assumptions of HDFC, what can be possible impact if lets say Rupee appreciates in the range of Rs 45-50/$ post elections.?Does Alembic have hedging for currency risk for next 2-3 years? It says they have simple 3/6 months forward contract. Does it mean , revenue in Rs term would be simple $ x Exchange rate with no or minimal hedging losses/gains?
Wouldn’t in that case, revenue & EBIT in Rs terms be significantly impacted if rupee appreciates to 45-50 or am I missing something here?
View invited.
Am sure Alembic enthusiasts would have already read it,but this was quiet enriching.Got to know & understand about the excellent backward integration at APL.MOSL again:
http://breport.myiris.com/MOTOSW/ALEPHARM_20140312.pdf
Results out…in line with expectation
http://www.bseindia.com/xml-data/corpfiling/AttachLive/Alembic_Pharmaceuticals_Ltd_280414_Rst.pdf
At CMP it is trading around** 24.8 **times Current year EPS of 12.5
Disc. No position
RK
Highlights of the call by Capital Mkt:
The Net sales grew by 23% YoY to Rs 465.2 crore for the quarter ended March 2014 and net profit was up by 40% YoY to Rs 61.3 crore for the same period. The Net sales grew by 22% to Rs 1868.4 crore for the year ended March 2014 and net profit grew by 43% YoY to Rs 235.5 crore for the same period.
The EBITDA margins expanded sharply at 19.6% of Rs 91.3 crore for the quarter against 17.3% at Rs 65.6 crore for corresponding quarter last year. Also, The EBITDA margins are 19.2% at Rs 357.7 crore during the year against 16.5% at Rs 252.0 crore last year.
Other income includes income of Rs 1.5 crore from the insurance claim settlement during the quarter.
The India Branded formulations sales grew by 14% to Rs 199.5 crore for the quarter ended March 2014. It grew by 14% YoY to Rs 850.6 crore for the year ended March 2014. As per ORG IMS, Alembic has market share of 1.73% (MAT-Mar 14).
The Specialty and Acute segments grew by 17% and -3% respectively in current years (MAT-Mar 14) versus Industry growth rate of 11% and 3% respectively.
The Share of Specialty segment went up to 55% in Q4 FY 14 from 51% in Q4 FY 13. The Growth of 11% in Specialty business in various therapies like Ophthalmology 27% growth, Cardio 16% growth, Anti Diabetic 22% growth, Gynecology with 14%, Gastro with 6% growth and Orthopedics with 8% growth
The Acute business remained stagnant with 3% growth in Cough and Cold and degrowth of 8 % in Anti infective due to NLEM impact.
The Share of Business on Anti-Infective have gone down to 32% in Q4 FY14 from 36% in Q4 FY13 of total India formulation sales. Share of cough and cold remains same at 13% in Q4 FY14 in line with Q4 FY13 of India formulation sales.
The International Generic Formulation grew by sharp 76% to Rs 136.7 crore during the quarter and grew by sharp 99% to Rs 468.4 crore during the year.
During the quarter, it has filed 1 ANDA application and 4 ANDA applications for the year taking cumulative ANDA filings of the Company to 61. During the quarter, it received approval for the 1 ANDA and for the year 8 ANDA approvals were received taking cumulative ANDA/NDA approvals to 32 (including 4 tentative approvals).
During the quarter 2 DMF applications and for the year 6 DMF applications were filed taking cumulative DMF filings of the Company to 66.
The API recorded sales of Rs 80.9 crore in current quarter against Rs 78.7 crore in corresponding period in previous year.
The R & D expense for Q4 FY 14 is Rs 31.2 crore representing 6.7% of sales as against Rs 22.7 crore of sales in the corresponding quarter last year
It has continued focus on International Generics through New Filings/ Launches
It is growing specialty therapies through multiple marketing divisions and new product launches. The Niche products (Para IV, NDA, FTF and technically complex products) filings in regulated markets is focused on. It is Extending global presence across more geographies with wider product portfolio.
The ANDA’s filed for FY’14 are lower on account of trying to file more complex products coupled with some capacity constraints during the year. It expects gradual ramp up in filings going forward.
It expects to launch 6-8 products every year for the next two years in the US market.
It expects to file Warfarin by the end of this year.
The front end cost in the US will be coming by the end of the FY’15.
The Company expects to outperform domestic market and to grow high double-digit for FY’15. It expects the NLEM impact to have in Q1’FY15 and expects to normalize the base effect thereafter.
The MR’s strength is 3500 (4000+ including managers) as on 31stMarch 2014.
It expects to spend significantly higher Capex for the next two years. The Capex expected to be Rs 250 crore (previously Rs 100-120 crore run rate) for the FY’15. This is to be spent on the API’s, Oral Solids, International and domestic branded side.
The R&D expected to be 6-7% of Sales for the FY’15.The tax rate expected to be under MAT rate for the FY’15.It has hedged 20-25% receivables.
Here is indianivesh report on alembic pharma
APL is certainly ‘expensive’ now.I feel investors are upbeat about their excellent R&D capabilities & the exports markets.Incremental revenue seems to have been taken care of with the large no. of filings they have.Interestingly,quiet a few of them are F2F or low competition,high margin opportunities.Moreover,the transformation the company has had,increasing Free Cash Flow,high capital efficiency,policy to share profits(payout is around 25%) & overdelivering on margins front as a whole is leading to optimism.The Motilal Oswal report on APL clearly puts it on par with Ipca & the likes.Moreover,it may also be getting some corporate governance premium. 
In the recent concall,the company talks of high double digit growth in the Domestic markets & an improving margin profile in FY15.6-8 launches per year should help on the Exports front.They have a capex of 250cr. lined up for FY15 as well(as Hemant bhai has already stated above) So,the company should again do a 30% kind of EPS growth for the year.I can understand an investor’s apprehension,but taking a third party view,I don’t feel too scared due to an ‘overvaluation’,etc. here.
Sagar,
Overvaluation should not be scared instead one should think why a stock is overvalued in the first place? That happens when majority is convinced that future prospects are good. This conviction to accord high PE is an offshoot of many important parameters like credible mgmt, improving cash flow, strong RoE/RoCE and most important superb future growth prospects.
In fact over a period of time i started looking at overvalued stock as first filter in search of steady compounders. If overvalued stock is supported by convincing stories then i feel comfortable to take a bet. APL seems like one such stock, i owned it. As long as it grows 30-40% per annum i retain otherwise sell.
Lupin was trading 30 PE at Mar’04 and 24 PE at Mar’05. Current PE is 24.
Stock return since Fy03 is 7700% that is 78x
As Manish said, one needs to find why stock is trading at higher PE and what are the future prospects.
Is any pharma expert following this case against Alembic? Any idea what is the current and long term impact of such a lawsuit on their numbers.
why alembic falling more than its peers? Something wrong fundamentally?
helppppppppp…stilllearning…
thx
vaibhav
This is probably why Alembic is tumbling:
http://www.law360.com/cases/5371213726cdbf5786000003
Otsuka of Japan has filed a lawsuit against Alembic for a Para-4 ANDA filed in 2013 whichpertains to manufacture of aripiprazole. It may not yet be contributing anythingto revenues. I’d watch the proceedings carefully, but this is not likely to have anymaterial impact on revenue in short term.
One has to expect such legal incidents as also FDA events in any Pharma company
Cheers,
Arun
It seems, sales growth and PAT growth is stagnated. is it the reason for fall?
Disl: Exited after results.
The strong reason is USDINR reversal. Not only Alembic Pharma is affected but most of the export oriented Pharma, IT sector stocks are down for time being.
There is no reason to be panic. Fundamentals are intact and one should hold.
Request the opinion of the seniors on the link below:
While looking for information on Insider Trading I came across some information related to Alembic Pharma, I tried digging in more and found 2 more things, none of this seems positive or I did not understand it, I maybe wrong as am just learning but was not able to relate this to positives of the company.
1). The below link for insider trading on Motilal Oswals Website, shows Chirayu Amin selling some of his shares. The Share holding in nos is still 9 lacs but Percentage holdings is 0.0, so is forInaaya Shaunak Amin
http://www.motilaloswal.com/Broking/Markets/Company-Information/Insider-Trading-History
2). Then I moved to Screener.In and looked for Alembic Pharma, found a share holding pattern On BSE. Now the shareholding table lists most of the names with Amin Surname (assume its family owned business), but the table is listing most of the names twice, why is it not aggregating the shareholding by a person under single name, why two different entries for same person
3). I moved to Edelweiss Page, and it shows promoter holding as Insignificant…why? Are they moving out?
4). Moneycontrol FII Shareholding screener does not give me Alembix Pharma name, where as the PDF file submitted to BSE shows shareholding as 9.11%
http://www.moneycontrol.com/bse/shareholding/shareholding_tracker.php?tracker=1&type=1&pno=5
I have very few shares of Alembic Pharma for tracking purpose form Edelweiss recommendation, was thinking of adding more after my own research but the above things came up. Now am skeptical about the company. Also going thr the initial pages of this dicussion did not make it look very exciting.
Please add your thoughts what should we infer from about findings or is it all normal?
Sujit
From Motilal Oswal link I can only infer that Chirayu Amin transferred some shares to Innaya Shaunak Amin. This is the shareholding pattern for 4Q FY2014 from BSE website
And regarding your query on two names, please see the note below shareholding pattern.
Alembic Pharma is ready for big uptrend. It has recently broken RSI from 30 to upwards and broke CCI from -100 to upwards.
If result is positive, we can expect huge upward journey. Let’s wait and see the progress.
Kunal
Alembic Pharma FY14 AR link: