Alembic Pharmaceuticals reported a strong 1QFY27 revenue of INR 2,150 crore, driven by a surge in US sales. Despite the performance beat, Motilal Oswal has maintained a 'Neutral' rating with a target price of INR 845, citing that current valuations are already factoring in the growth.
Alembic Pharmaceuticals saw a significant jump in its performance for the first quarter of fiscal year 2027. The drug maker reported a 26% year-on-year increase in revenue, reaching INR 2,150 crore, while its Profit After Tax grew by 12% to INR 173 crore. This strong start exceeded analyst forecasts, largely supported by a rise in sales across both its API (active pharmaceutical ingredients) and export formulations segments.
A major driver for this growth was the US market. The company achieved USD 83 million in US sales during the quarter, moving well past its previous quarterly average of USD 55-60 million. This increase is linked to the launch of seven new products in North America, which helped support performance during the period.
Despite the positive quarterly numbers, brokerage firm Motilal Oswal has maintained a 'Neutral' rating on the stock with a price target of INR 845. The firm noted that the positive surprise in earnings appears to be already reflected in the stock’s current market price, suggesting that the company is trading at fair value, or approximately 17 times its 12-month forward earnings.
Investors may note that the growth in revenue and profit is being partially balanced out by higher tax expenses and depreciation charges. These costs, along with continued investments in manufacturing and research, are key items that may influence the company’s bottom line in upcoming quarters. Margin pressure remains a factor to watch as the company balances expansion spending with operating profitability.
Moving forward, the sustainability of the US sales run rate will be a key factor for shareholders. Investors will likely track whether the company can maintain this momentum in US formulations, or if pricing pressure and competition in the generic drug market continue to weigh on the broader outlook for the fiscal year.