Company Details

Alembic Pharmaceuticals Limited, an integrated pharmaceutical company, develops, manufactures, and

markets pharmaceutical products, pharmaceutical substances, and Intermediates in India and internationally.

The company operates in three segments: International Generics, Branded Formulations, and Active

Pharmaceutical Ingredients.

It offers active pharmaceutical ingredients for anti-infective, cardio-vascular, musculoskeletal, erectile

dysfunction, and gastro-intestinal products. The company also provides bulk pharma chemicals, including

phosgene gas and phosgene based specialty chemicals/intermediates for use in pesticides, pharmaceuticals,

dyes, plastics, perfumeries, etc.; and drug intermediates, specialty chemicals, and fine chemicals, as well as is

engaged in contract manufacturing and custom synthesis activities. In addition, it offers finished dosage

formulations for various therapeutic areas, including anti-infective, cough and cold, cardiovascular, and oral

anti-diabetics, herbal nutraceuticals, veterinary products, and contract/collaborated research services. The

company was founded in 1907 and is headquartered in Vadodara, India.

Until 2010 Alembic was a pure domestic focused company. Post demerger of company’s core Pharma

business (now Alembic Pharma) from Alembic Ltd, ALPM transformed into an aggressive and focused

company. Management started focusing aggressively on export to regulated markets (US and Europe) and

chronic therapies in the domestic market.

The current market capitalization stands at Rs 7,766.86 crore. The company has reported a consolidated

sales of Rs 510.95 crore and a Net Profit of Rs 70.65 crore for the quarter ended Dec 2014.

Category No. of Shares Percentage

Promoters 139,738,620 74.13

General Public 24,819,280 13.17

Foreign Institutions 18,143,075 9.62

NBFC and Mutual Funds 2,379,009 1.26

Other Companies 1,652,299 0.88

Financial Institutions 1,071,795 0.57

Foreign - NRI 543,679 0.29

Others 168,157 0.09

Market Cap (Rs Cr) – 7748

Company P/E – 28

Industry P/E – 26.21

Book Value (Rs) – 33.40

Dividend (%) – 150%

EPS (TTM) – 14.68

Dividend Yield (%) – 0.73

Face Value (Rs) - 2

Share Holding Pattern Financial Details

Industry Details

The Indian pharmaceutical industry ranks 3rd by drug volumes (10% global market) and 14 by sales at US

$25 billion (3% global market). The size of the Indian pharmaceutical industry was estimated at US$12 billion

in 2013 (estimated), compared to US$10.9 billion in 2012. The sector experienced a slowdown from 16.6% in

2012 to 9.8%; the sector grew at a CAGR of 15% between 2010 and 2012. Chronic therapies (cardio, gastro,

CNS and anti-diabetic) outperformed the market for 4 years, growing at 14%, faster than acute therapies (anti-

infectives, respiratory, pain and gynecology) which grew at 9.6%.

India now figures in the 5 leading emerging pharmaceutical markets, expected to grow to a size of US $20

billion by 2015. The global spending on medicines is expected to shift towards generics in 5 years, rising from

27% of the total spending to 36% by 2017, even as brands account for more than two thirds of all spending in

developed markets. Absolute spending on brands in developed markets is expected to decline by US $113

billion in the next 5 years due to exclusivity losses, slower uptake of new medicines and restrictive access

approaches. This is expected to be offset by projected US $40 billion generic spending, resulting in a US $73

billion patent ‘dividend’ in 2017.

In the U.S., US $83 billion (34%) of 2012 brand spending will shift to generics at lower prices. In other

developed markets, the average brand spending exposed to generic competition will be 22%, except in

Canada where 30% of spending will be exposed. Generics consumption will be highest in emerging markets

(63% of all spending). Patients in emerging markets will enjoy an increasing access to affordable generics for

primary care treatment. Total spending on traditional pharmaceuticals in these markets is expected to rise from

US $199 billion in 2012 to US $336 billion in 2017.Total global medicinal spending is expected to exceed one

trillion U.S. dollars for the first time in 2014, touching almost US $1.2 trillion in 2017.

Balance Sheet

Mar '14 Mar '13 Mar '12 Mar '11

Sources Of Funds

Total Share Capital 37.70 37.70 37.70 11.00

Equity Share Capital 37.70 37.70 37.70 11.00

Share Application Money 0.00 0.00 0.00 26.70

Reserves 591.99 422.06 323.16 238.51

Networth 629.69 459.76 360.86 276.21

Secured Loans 47.39 70.11 99.89 181.85

Unsecured Loans 30.26 70.53 134.43 146.05

Total Debt 77.65 140.64 234.32 327.90

Total Liabilities 707.34 600.40 595.18 604.11

Application Of Funds

Gross Block 665.06 572.46 462.89 433.52

Less: Accum. Depreciation 268.10 228.24 195.08 161.54

Net Block 396.96 344.22 267.81 271.98

Capital Work in Progress 20.67 32.26 62.19 26.50

Investments 33.33 3.35 3.35 3.35

Inventories 310.78 266.83 258.74 219.23

Sundry Debtors 260.56 232.38 186.83 201.97

Cash and Bank Balance 5.34 4.25 2.68 1.25

Total Current Assets 576.68 503.46 448.25 422.45

Loans and Advances 134.81 115.38 205.37 133.07

Fixed Deposits 0.00 0.00 23.05 0.04

Total CA, Loans & Advances 711.49 618.84 676.67 555.56

Current Liabilities 377.94 330.16 373.81 205.11

Provisions 77.17 68.12 41.05 48.18

Total CL & Provisions 455.11 398.28 414.86 253.29

Net Current Assets 256.38 220.56 261.81 302.27

Total Assets 707.34 600.39 595.16 604.10

Contingent Liabilities 68.60 51.70 36.38 35.66

Book Value (Rs) 33.40 24.39 19.14 45.36

Profit and Loss Account

Mar '14 Mar '13 Mar '12 Mar '11

Income

Sales Turnover 1,843.79 1,492.64 1,380.82 1,169.52

Excise Duty 0.00 0.00 10.63 14.30

Net Sales 1,843.79 1,492.64 1,370.19 1,155.22

Other Income 3.19 3.93 8.78 6.20

Stock Adjustments 40.65 -21.34 64.44 4.72

Total Income 1,887.63 1,475.23 1,443.41 1,166.14

Expenditure

Raw Materials 784.60 653.27 715.92 572.20

Power & Fuel Cost 32.06 26.66 29.57 24.58

Employee Cost 244.46 193.79 168.46 149.21

Other Manufacturing Expenses 0.00 0.00 24.96 22.05

Selling and Admin Expenses 0.00 0.00 266.53 223.53

Miscellaneous Expenses 464.29 353.82 16.62 13.41

Total Expenses 1,525.41 1,227.54 1,222.06 1,004.98

Operating Profit 359.03 243.76 212.57 154.96

PBDIT 362.22 247.69 221.35 161.16

Interest 9.81 14.57 37.55 29.25

PBDT 352.41 233.12 183.80 131.91

Depreciation 40.49 34.96 33.65 29.59

Profit Before Tax 311.92 198.16 150.15 102.32

PBT (Post Extra-ord Items) 311.92 198.16 150.15 102.32

Tax 73.63 40.71 29.62 20.83

Reported Net Profit 238.29 157.44 120.54 81.51

Total Value Addition 740.82 574.26 506.14 432.78

Equity Dividend 56.55 47.13 26.39 18.85

Corporate Dividend Tax 9.61 8.01 4.28 3.06

Per share data (annualised)

Shares in issue (lakhs) 1,885.16 1,885.16 1,885.16 550.00

Earning Per Share (Rs) 12.64 8.35 6.39 14.82

Equity Dividend (%) 150.00 125.00 70.00 50.00

Dividend History

Index and Company Price Movement Comparison

Company Forecast

PBIT – 17.24 v/s 13.95

RoCE – 45.48 v/s 35.43

RoE – 32.9 v/s 28.8

Net Profit Margin – 12.90 v/s 10.52

Return on net worth – 37.84 v/s 34.24

D/E Ratio – 0.12 v/s 0.31

Interest Cover – 32.80 v/s 14.60

Current Ratio – 1.46 v/s 1.29

Reserves – 591.99 cr v/s 422.09 cr

PAT – 238.29 cr v/s 157.44 cr

Total assets – 707.34 cr v/s 600.39 cr

Net sales – 1843.79 cr v/s 1492.64 cr

Book Value – 33.40 cr v/s 24.39 cr

Important Ratios

Days BSE NSE

30 448.56 449.10

50 444.51 445.07

150 411.47 411.95

200 375.91 376.30

Simple Moving Average

Symbol Value Action

RSI(14) 70.990 Buy

STOCH(9,6) 75.392 Buy

STOCHRSI(14) 2.130 Oversold

MACD(12,26) 87.390 Buy

ADX(14) 74.335 Overbought

Williams %R -29.050 Buy

CCI(14) 76.8979 Buy

ATR(14) 62.9643 High Volatility

Highs/Lows(14) 35.9571 Buy

Ultimate Oscillator 47.919 Sell

ROC 95.157 Buy

Bull/Bear Power(13) 120.8480 Buy

Technical Indicators

Recommendations

Buy Alembic Pharmaceuticals Ltd. at

current or lower market levels

Reasons for the recommendations are :

Change in business model helped the company to change the products mix and growth

strategy.

Increase in demand for the products will help in optimum utilization of the production

capabilities.

New product launch and getting of licenses will add to the revenue of the company.

JVs and MoU with leading foreign players will add to the growth of the company.

Sound financial position and healthy financial ratios.

Companies strategy to give more importance to products with higher profit margin.