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Alkem Laboratories shares fell 3.05% intraday after reporting a 14.8% decline in adjusted net profit for Q2 FY27.
Shares of Alkem Laboratories dropped nearly 3% on Friday following the release of its second-quarter results, which showed mixed performance despite strong international growth. The stock fell to ₹5,140 from a closing price of ₹5,194 as investors reacted to weaker-than-expected adjusted net profit and ongoing regulatory challenges at Daman.
The company reported revenue up 13.8% year-on-year to ₹4,550 crore in Q2 FY27, driven by growth in its domestic formulation business—up 9.5% Y-o-Y to ₹3,030 crore—and a sharp rise of 22.3% in international sales to ₹1,450 crore.
However, adjusted net profit declined 14.8% to ₹650 crore due to higher depreciation and tax rates, prompting MOFSL to maintain its 'Neutral' rating with an FY28E target price of ₹5,890. The firm cited operational cost front-loading and regulatory issues at Daman as key factors behind the short-term financial pressure.
Despite these challenges, Alkem’s international expansion—particularly in Latin America where sales grew 58.2% to ₹670 crore—and its US business growth of 2.4% to ₹780 crore suggest potential for future revenue acceleration.
MOFSL maintains a 'Neutral' rating with an FY28E target price of ₹5,890 as the company's performance in FY27 will be closely watched for signs of consolidation progress and revenue growth.
Alkem’s Q2 results reflect strategic shifts toward new business expansion despite short-term financial pressures. The key question remains whether earnings recovery materializes by FY28E.
Topics: Pharmaceuticals Industry, Stock Market Analysis, Financial Performance Reports, Corporate Strategy Updates, Regulatory Challenges In Pharma
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Source: Business Standard
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