(Reuters) – Indian drugmaker Alembic Pharmaceuticals 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 and Cipla beat third-quarter profit estimates, while Dr Reddy’s 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 23.72 15.08 10.78 24.04 Buy 9 0.81 1.20
Pharmaceuticals Ltd
Zydus Lifesciences 21.34 14.42 7.84 4.22 Hold 28 0.89 0.31
Ltd
Cipla Ltd 22.94 14.46 8.20 5.96 Buy 33 0.88 0.88
Dr Reddy’s 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
(Reporting by Kashish Tandon in Bengaluru; Editing by Sumana Nandy)
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