Alkem Laboratories Ltd shares surged more than 3% on Wednesday to hit an all-time high of ₹4,807 apiece on BSE extending the rally for the second straight day. Alkem Labs stock is trading with a market capitalisation of ₹56,503 crore and has given strong returns of over 57% so far this year (year-to-date). It has gained 24% over the past one month alone.
As per the pharmaceutical company’s September quarterly earnings highlights, its revenue grew by 11.7% on a year-on-year (YoY) basis in the three months, with a lower contribution coming in from India’s business, which rose 5% to ₹2,327.8 crore YoY. The domestic business was impacted by a slower acute season.
Alkem Laboratories’ US contribution came in higher for the second quarter of the financial year 2024 (Q2FY24), rising by a healthy 27.1% on YoY to ₹767.5 crore, with the region’s price erosion stabilising at 5-6% as compared to a high teen figure seen last year.
The pharma company also witnessed its best margins in the September 2024 quarter since Q2FY23, while its gross margins grew by 180 basis points (bps) on a quarter-on-quarter (QoQ) basis to 61.4% due to softening API (active pharmaceutical ingredient) prices and a better product mix in the US.
The company has retained its guidance of high single-digit growth for India in FY24 while slightly raising its margin guidance for the fiscal year to 16.5% from 16% earlier.
Last month, global brokerage Nomura upgraded its rating on Alkem Labs to ‘buy’, with a target price of ₹4,963 per share set on the stock, backed by its earnings led by lower costs and tax rates. The target price indicates an upside of more than 6% from Tuesday’s closing price.
Shares of Alkem Labs settled 1.42% higher at ₹4,719 per piece on NSE at Wednesday's closing.
(Edited by : Ajay Vaishnav)
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