Shares of Alkem Laboratories Ltd. plunged as much as 7.5 percent on Friday after brokerages downgraded the stock post its June quarter results.
Global investment bank HSBC downgraded Alkem Labs to ‘Hold’ with a price target of Rs 3,945. It said that the India segment (65 percent of June quarter sales) grew slower than the market as delayed monsoon impacted sales of acute therapies.
Strong volume pick-up in the India segment will be a key catalyst going ahead, noted HSBC.
Bank of America (BoFA) also gave an ‘Underperform’ rating to Alkem Labs stock with a price target of Rs 3,500.
It said that the June quarter was an in-line quarter for Alkem, but consensus cuts are likely on the lower India growth guidance by the company. “Muted India growth is likely to overshadow international and gross margin beat,” BoFA said.
Nomura remains neutral on Alkem Labs with a price target of Rs 3,632. It said that while the company saw higher-than-expected international sales, gross margins were negated by slower domestic growth, high expenses and high tax rate.
Shares of Alkem Labs are trading 7 percent lower at Rs 3,858.20. The stock is the biggest loser on the Nifty Midcap index. Out of the 26 analysts that track Alkem Labs, nine each have a buy and hold recommendation, while eight have a sell rating.
