Monday, April 26, 2021

Alkem Laboratories Ltd(539523)- No 1 in anti­infectives.

Alkem Laboratories Ltd(539523 closes   at 2796.35 with  a  Gain  of   -+0.70%   on    26-April-2021  with formation of  a  Small  Green  Candle    on Daily  Price Chart.

About the Company : Alkem Laboratories Limited is a pharmaceutical company. The Company is engaged in the development, manufacture and sale of pharmaceutical and neutraceutical products. The Company operates through two segments: pharmaceutical and investing. The Company produces generics, generic drugs, active pharmaceutical ingredients (APIs) and neutraceuticals, which it markets in India and approximately 50 countries internationally, primarily the United States. The Company offers various products, such as CLAVAM 375, CLAVAM BID DRY SYRUP, CLAVAM INJ 300MG, FREEAIR NASAL SPRAY, PAN 40MG INJECTION (VIAL), PAN/40MG TABLETS, PROWEL DRY SYRUP (30ML), TAXCLAV 100 DT TABLETS, SATROGYL O DRY SYRUP, XONE/500MG VAIL, MEROSURE KIT 500, MEROSURE 500 MG and ZADONASE, among others. The Company has approximately 16 manufacturing facilities, of which 14 manufacturing facilities are at geographically diversified locations in India and two in the United States.

Sector Update : Positive

Strength :  1. It is ranked No 1 in anti­infectives. In the chronic segment, too, it has managed to raise its market share despite a smaller presence.

Financials : Alkem Laboratories Ltd  has posted Net Sales / Revenue   of 8344.40 Cr & Net Profit of 1127.10 Cr in FY2020 and expected to post Net Sales / Revenue   of 8967.60 Cr & Net Profit  of 1635.40 Cr in FY2021 and Net Sales / Revenue   of 10067.20 Cr & Net Profit of 1602.20 Cr in FY2022  and Net Sales / Revenue   of 11113.60 Cr & Net Profit of 1821.70 Cr in FY2023.

Valuations  : The Company is now Trading at X 1.90  of its  valuations ( last 4Quaters earnings considered here) with ~90 % premium   and at X1.23 of its FY 2021, which is now almost  ~23%  premium   to its value and  X 1.25 of its FY 2022 earning with a premium  of ~25% and X1.10 of its FY2023 earning with ~10%  premium to its valuations.

Margin of Safety (1Yr Bond Yield: Value>1 ) is now  0.80  which  makes is attractive after a ~20% fall in market price. The  Equity Value Per Share ( Enterprise Value Method ) is  2687.10

Whats  best in It   : Alkem Laboratories Ltd  is now available at EPS of 94.30(FY2020), which will improve to 151 by FY2023, Free Cash Flow will rise to 1359.50 Cr in FY2023 from 237.40 Cr during the same period.Book Value per Share will  be 822 in FY2023, which is ₹515 in FY2020.

If We factor its earnings/valuations, its Price arrives at 4795 with consideration FY2023 earnings.

Disclaimer : We are / may going to take exposure shortly.

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