Alkem Laboratories share price rallies over 11% in two days after Q2 results beat estimates; brokerages raise target

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Alkem Laboratories share price rallied over 6% to hit a 52-week high on Wednesday after the company’s better than estimated September quarter results prompted some brokerages to raise target price on the stock. Alkem Laboratories shares rallied as much as 6.08% to a fresh record high of ₹4,272.00 apiece on the BSE. Alkem Laboratories stock had ended more than 5% higher in the previous session on November 7 after the company announced its Q2FY24 earnings.

The pharmaceutical company reported a net profit of ₹620.5 crore in the second quarter of FY24, registering a growth of 87.5% from ₹331 crore in the corresponding quarter of last fiscal. The company’s revenue from operations in Q2FY24 increased 11.7% to ₹3,440 crore from ₹3,079.4 crore, year-on-year (YoY). India sales grew 5% YoY to ₹2,327.8 crore, while international sales grew 27.1% YoY to ₹1,054.2 crore.

Also Read: Apollo Tyres stock soars 5.7% as net profit rises 164% in Q2 Operating performance during the quarter improved sharply as earnings before interest, tax, depreciation and amortization (EBITDA) jumped 64.5% to ₹746.6 crore from ₹454 crore, while EBITDA margin rose by 700 basis points (bps) to 21.7% from 14.7%, YoY. Nuvama Institutional Equities said its positive stance on Alkem is underpinned by its strong domestic franchise, chronic expansion, export turnaround and cost savings. With softening input prices, easing US price pressure and management putting weight behind India productivity, the brokerage sees no risk to sustained margin improvement.