India's Alembic Pharma posts lower Q3 profit on weak domestic demand

Alembic Pharmaceuticals

03/02/2025 10:11

Feb 3 (Reuters) - Indian drugmaker Alembic Pharmaceuticals  ALEM.NS  reported a lower
third-quarter profit on Monday, weighed down by weak local sales of its drugs that treat acute illnesses.
    The company's consolidated profit dropped 23% to 1.38 billion rupees (nearly $16 million) in the
quarter ended Dec. 31.
    Its sales in India, its biggest market, grew 3% from 9% a year earlier.
    
    KEY CONTEXT
        Alembic Pharma said its sales were hurt by lower demand for its drugs to treat acute conditions,
its second-biggest segment, which fell 11% during the quarter. 
        A significant chunk of revenue for most Indian generic drugmaker comes from the U.S. and fierce
competition in the North American market has weighed on domestic firms' margins.
  
    Alembic's rivals Sun Pharma  SUN.NS  and Cipla  CIPL.NS  beat third-quarter profit estimates, while
Dr Reddy's  REDY.NS  missed expectations. However, all three reported muted growth in the North America
market.
    
    PEER COMPARISON
    
                                                Estimates (next 12      Analysts' sentiment      
                                                     months)                                     
                      RIC        PE     EV/EBI  Revenue   Profit    Mean     # of      Stock to  Div
                                        TDA     growth    growth    rating*  analysts  price     yield
                                                (%)       (%)                          target**  (%)
 Alembic               ALEM.NS   23.72   15.08   10.78     24.04    Buy             9    0.81        1.20
 Pharmaceuticals Ltd                                                                             
 Zydus Lifesciences    ZYDU.NS   21.34   14.42    7.84      4.22    Hold           28    0.89        0.31
 Ltd                                                                                             
 Cipla Ltd             CIPL.NS   22.94   14.46    8.20      5.96    Buy            33    0.88        0.88
 Dr Reddy's            REDY.NS   17.20   10.77   10.17      6.15    Hold           35    0.90        0.66
 Laboratories Ltd                                                                                
 * Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
 ** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is
trading above the PT
        
  
        OCTOBER TO DECEMBER STOCK PERFORMANCE
 -- All data from LSEG
 -- $1 = 87.0650 Indian rupees 

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 (Reporting by Kashish Tandon in Bengaluru; Editing by Sumana Nandy)
 ((Kashish.Tandon@thomsonreuters.com; 8800437922;))