Buy Alkem Laboratories; target of Rs 2500: Motilal Oswal
Motilal Oswal’s research report on Alkem Laboratories
Alkem Laboratories (ALKEM) has guided for GST -adjusted (impact of ~7%) growth of mid -teens in the domestic market in FY18. This would translate into >20% growth in 2HFY18 (growth will be >25% if we normalize it for GST). Also, in 1QFY19, we expect similar growth levels due to a low base effect (had lost almost one month of sales in 1QFY18 due to GST – related channel destocking).
We have upgraded ALKEM to Buy from Neutral, with a target price of INR2,500 @24x December 2019E PER (v/s INR1,950 @ 1HFY20E PER.
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