Synopsis: The share of this company surged after strong Q4 EBITDA growth of 32 percent, record margins, and robust international sales, while brokerage views remain mixed amid cost pressure and a stable FY27 outlook.
The article outlines how this pharma company will maintain its growth, which is one of the oldest industrial houses in India, specializing in the research, manufacturing, and global marketing of generic formulations and Active Pharmaceutical Ingredients
With a market capitalization of Rs 62,842 crore, Alkem Laboratories Ltd’s share closed at Rs 5,256 per share, down 0.39 percent from its previous day’s close. The share of the company gave a return of 8 percent over the last years.
Nomura on Alkem Labs
Nomura maintained a Buy rating on Alkem Labs with a target price of Rs 6,890, indicating an upside potential of 31 percent. The brokerage cited strong margin performance and viewed the quarter’s exceptional losses as one-time in nature.
Brokerage noted that Alkem Labs reported Q4 revenue largely in line with expectations, while EBITDA came in 11 percent above estimates. The better-than-expected performance was supported by a strong gross margin of 65.4 percent, expanding by 606 basis points on a year-on-year basis.
The company reported an exceptional loss of Rs 135 crore during the quarter, mainly due to an impairment charge on real estate investments of Rs 74.7 crore and an additional Rs 60.3 crore impact arising from changes in the Labour Code. These were identified as one-time items.
As a result, profit after tax was impacted by the exceptional charges and a higher effective tax rate. Nomura highlighted that Alkem Labs’ FY27 guidance was either in line with or ahead of current market expectations, while the stock is trading at 23.6x FY27F and 19.7x FY28F adjusted earnings.
Jefferies on Alkem Labs
Jefferies maintained a Buy rating on Alkem Labs but reduced its target price to Rs 6,500 from Rs 6,550, citing a steady growth outlook with limited margin upside due to cost pressures.
Brokerage highlighted that Alkem Labs delivered a Q4 performance ahead of expectations, supported by strong execution across key business segments. While the company remains on track for steady growth in FY27, the brokerage noted that rising cost pressures could limit the scope for significant margin expansion.
The brokerage stated that the India business grew broadly in line with expectations during the quarter, while the US and Rest of World segments outperformed. The better-than-expected international performance provided additional support to the company’s overall earnings growth.
Management guided for stable growth in FY27 along with largely steady margins despite the prevailing cost environment. Jefferies expects the India business to outperform going forward, driven by new product launches and an improving chronic therapy mix, which could support sustainable growth.
Macquarie on Alkem Labs
Macquarie maintained an Underperform rating on Alkem Labs with a target price of Rs 4,900, citing a muted profitability outlook despite stable growth guidance and ongoing cost pressures.
Macquarie noted that Alkem Labs’ Q4FY26 results showed a profitability miss, even though overall guidance remained largely in line. The brokerage highlighted that the quarter reflected some pressure on earnings performance despite steady operational trends.
Management expects the India-branded generics business to outperform IPM growth by 100–150 basis points in FY27, supported by rising traction of Semaglutide in India. It also guided EBITDA margins for FY27 in the range of 20–21 percent, indicating a stable profitability outlook.
Q4 Business update
EBITDA Hits Record Levels with Margin Expansion: Alkem Laboratories Ltd reported Q4 FY26 EBITDA of Rs 5,174 million, up 32.2 percent YoY, while EBITDA margin improved to 14.4 percent from 12.4 percent in Q4 FY25 due to better business mix and operating leverage.
International Business Continues Strong Momentum: International sales grew 25.4 percent YoY during Q4 FY26, led by strong US business growth of 26.2 percent YoY. The company also filed 5 ANDAs and received 4 approvals during the quarter.
Profit Before Tax Surges Over 40 Percent: Profit before tax before exceptional items increased 40.7 percent YoY to Rs 5,578 million, supported by strong growth across domestic branded generics and international operations.
Domestic Business Outperforms Industry Growth: The company outperformed the Indian Pharmaceutical Market across key therapies, including Gastro-intestinal, Pain, Respiratory, VMN, and Anti-Diabetic segments during Q4 FY26.
Company Overview
Alkem Laboratories is one of the largest generic and specialty pharmaceutical companies in India, ranking among the top five companies in the Indian Pharmaceutical Market. Founded in 1973 and headquartered in Mumbai, Maharashtra, the company develops, manufactures, and markets pharmaceutical formulations, active pharmaceutical ingredients (APIs), and nutraceuticals across more than 50 countries.
Financial highlight: The revenue from operations grew by 15 percent to Rs 3,603 crore in Q4 FY26 from Rs 3,144 crore in Q4 FY25, and EBIDT grew by 32 percent to Rs 517 crore in Q4 FY26 from Rs 391 crore in Q4 FY25. This was accompanied by a net profit growth of 2 percent to Rs 251 crore in Q4 FY26 from Rs 322 crore in Q4 FY25, resulting in an EPS decrease of 23 percent to Rs 19.78 per share in Q4 FY26 from Rs 25.58 per share in Q4 FY25.
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