Alkem Labs shares in focus after Q4 results; Jefferies ‘underperform’, Nomura ‘buy’ with Rs 5,430 target

Alkem Laboratories reported a mixed Q4FY25, with net profit at Rs 3,059 million, up 4.2% YoY. Total revenue from operations rose 7.1% YoY to Rs 31,438 million, while India sales grew 8.1% YoY to Rs 21,355 million. International sales rose 7.2% YoY to Rs 9,747 million. However, EBITDA margin came in at 12.4% for Q4.

For FY25, total revenue grew 2.3% YoY to Rs 129,645 million, with net profit rising a healthy 20.6% YoY to Rs 21,655 million. India sales for the full year were up 6.5% YoY at Rs 89,837 million, while international sales saw a 4.5% decline. EBITDA margin for FY25 stood at 19.4%.

The company outperformed the Indian Pharmaceutical Market (IPM) in key therapy areas and maintains a strong balance sheet with net cash of Rs 46.2 billion.

Jefferies cuts Alkem Labs TP; Nomura remains positive on growth outlook

Jefferies downgraded Alkem Labs to ‘Underperform’ and cut its target price to Rs 4,460. It flagged that Q4 missed estimates due to lower margins, and while the company is pivoting towards accelerating growth after 18 months of margin improvement, its FY26 EBITDA margin guidance of 19.5% is flat YoY due to higher R&D investments. Jefferies also cut FY26/27 EPS estimates by 3-6%.

In contrast, Nomura maintained a ‘Buy’ rating with a target price of Rs 5,430. It said Q4 sales were in line, with EBITDA/PAT 2%/6% below estimates. However, the FY26 guidance remains a mixed bag. The company expects its effective tax rate (ETR) to rise to 35-37% in FY27E versus the previous estimate of 20%, which will impact reported earnings but not cash flows.

Nomura expects Alkem Labs to outperform the domestic market in FY26E, with growth ~100bp ahead of the market. The company also expects to be among the first to launch semaglutide in India by March 2026 — a key growth driver.

Management commentary

Dr. Vikas Gupta, CEO of Alkem, highlighted the strong performance of the India business and improved profitability for FY25. He reiterated the company’s focus on strategic growth opportunities and pipeline expansion.

Disclaimer: This article is purely informational and based on inputs provided. It does not constitute investment advice. Readers should consult a certified financial advisor before making any investment decisions.