Mehabe score: 7 G Factor: 4 Piotski Score: 7 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 7.
Description
Alkem Laboratories is engaged in pharmaceutical business with global operations. The Company is engaged in the development, manufacture and sale of pharmaceutical and nutraceutical products.(Source : 202003-01 Annual Report Page No:107)Site:ALKEMMain Symbol:ALKEM
Stock trades at 3351.0, above its 50dma 3133.28. It also trades above its 200dma 2897.05. The stock remains bullish on techicals
The 52 week high is at 3379.00 and the 52week low is at 2415.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has been maintaining a healthy dividend payout of 24.77%
-‘s median sales growth is 15.96% of last 10 years
Weakness
– Promoter holding has decreased over last quarter: -1.32%
-Tax rate seems low
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 31.8x. Sun Pharma.Inds. trades at the industry’s max P/E of 56.9x. ALKEM trades at a P/E of 25.3x
– Industry’s mean G-Factor is 2.2 while the mean Piotski score is 9.0. ALKEM has a G-Factor of 4 and Piotski scoreof 7.
– Average 1 month return for industry is 3.7%. The max 1- month return was given by Piramal Enterp.: a return of 8.7 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 2192.0 cr compared to Rs 2049.0 cr for period ended Mar 2020, a rise of 7.0%
Operating Profits reported at Rs 291.0 cr for period ended Mar 2021 vis-vis 303.0 for period ended Mar 2020 .
Operating Margins contracted -151.2 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 20.07 compared to Rs 37.72 for previous quarter ended Dec 2020 and Rs 15.79 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 8865.0 cr for period ended Mar 2021 vis-vis sales of Rs 8344.0 cr for the period ended Mar 2020, a growth of 5.9%. The 3 year sales cagr stood at 11.5%.
Operating margins expanded to 22.0% for period ended Mar 2021 vis-vis 18.0% for period ended Mar 2020, expansion of 400.0 bps.
Net Profit reported at Rs 1585.0 cr for period ended Mar 2021 vis-vis sales of Rs 1127.0 cr for the period ended Mar 2020, rising 28.9%.
Company recorded a healthy Net Profit CAGR of 35.9% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 1265.0 cr for period ended Mar 2021 vis-vis Rs 585.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 34% on a 1 Year basis vis-vis a return of 22% over the last 3 Years. – The compounded sales growth on a TTM bassis is 6% vis-vis a compounded sales growth of 11% over the last 3 Years. – The compounded profit growth on a TTM basis is 41% vis-vis a compounded profit growth of 36% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 4.5% vis-vis 4.42% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 22.17% vis-vis 22.22% for Mar 2021
Conclusion
– has been maintaining a healthy dividend payout of 24.77%
-‘s median sales growth is 15.96% of last 10 years – Promoter holding has decreased over last quarter: -1.32%
-Tax rate seems low
– might be capitalizing the interest cost
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 3133.28 and is trading at 3351.0, thus bullish price action wise.
