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Last Updated on: 21 November, 2024
Author: Getaka|Social: Getaka Financial Services X (Earlier Twitter) Profile Getaka Financial Services LinkedIn Logo
Stock Ticker - BSE: 539523 | NSE: ALKEM

Alkem Laboratories Ltd: Intrinsic Value and Fundamental Analysis

Share Price and Basic Stock Data

Last Updated: November 20, 2024, 11:22 pm

Market Cap 66,117 Cr.
Current Price 5,530
High / Low6,440/4,407
Stock P/E30.4
Book Value 961
Dividend Yield0.72 %
ROCE19.7 %
ROE19.6 %
Face Value 2.00
PEG Ratio4.41

Stock P/E, Current Price, and Intrinsic Value Over Time

View Share Price Target for Alkem Laboratories Ltd

Competitors of Alkem Laboratories Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Gujarat Themis Biosyn Ltd 3,574 Cr. 328390/10867.8 20.50.20 %45.0 %33.8 % 1.00
Gujarat Terce Laboratories Ltd 61.0 Cr. 82.294.9/25.823.4 11.90.00 %9.72 %3.44 % 10.0
Gujarat Inject (Kerala) Ltd 28.0 Cr. 19.119.5/8.3536.3 6.640.00 %4.06 %3.33 % 10.0
Godavari Drugs Ltd 87.0 Cr. 116155/87.013.0 55.40.00 %12.7 %15.5 % 10.0
Glenmark Life Sciences Ltd 13,269 Cr. 1,0831,335/62031.3 2072.08 %28.1 %21.1 % 2.00
Industry Average19,512.62 Cr1,182.8154.42184.880.32%16.40%16.92%6.61

All Competitor Stocks of Alkem Laboratories Ltd

Quarterly Result

MonthJun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024
Sales2,7312,8002,6192,4842,5763,0793,0412,9032,9683,4403,3242,9363,032
Expenses2,1382,1762,1212,1472,3732,6252,4422,5492,5792,6932,6162,5342,423
Operating Profit593624498337203454599353389747708402609
OPM %22%22%19%14%8%15%20%12%13%22%21%14%20%
Other Income4742546515145-346664276120
Interest13121117262527293030252729
Depreciation71737783767778787274708380
Profit before tax556582464243152402539212353648655367619
Tax %14%4%-15%55%13%14%15%68%18%5%8%17%11%
Net Profit48055953310813134846068288615604304550
EPS in Rs39.1545.5243.969.0010.6827.6738.035.9423.9851.9049.7624.5545.60

Last Updated: Unknown

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: Unknown

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023TTM
Sales2,0112,4853,1133,6744,9055,6886,4017,3578,3448,86510,63411,59912,634
Expenses1,6452,1232,7003,2484,0384,6875,3926,2376,8686,9208,5809,97710,438
Operating Profit3663624134278661,0011,0091,1201,4761,9452,0541,6222,197
OPM %18%15%13%12%18%18%16%15%18%22%19%14%17%
Other Income1541671621762271101158210223014610179
Interest5888938171455555655952107115
Depreciation2940527193101143193253275304310294
Profit before tax4334024304519289659269551,2601,8421,8441,3051,867
Tax %6%4%-1%13%19%6%31%19%9%12%9%23%
Net Profit4073844353927529056387741,1491,6181,6801,0071,575
EPS in Rs340.02321.01364.1032.7562.0274.6152.7763.6194.26132.57137.6382.31131.58
Dividend Payout %6%6%5%12%20%20%25%25%27%23%25%61%

Profit & Loss Yearly Chart

YoY Net Profit Growth

Year2012-20132013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-2023
YoY Net Profit Growth (%)-5.65%13.28%-9.89%91.84%20.35%-29.50%21.32%48.45%40.82%3.83%-40.06%
Change in YoY Net Profit Growth (%)0.00%18.93%-23.17%101.72%-71.49%-49.85%50.82%27.13%-7.63%-36.99%-43.89%

Alkem Laboratories Ltd has shown an inconsistent trend in YoY Net Profit Growth (%) in the last 11 years from 2012-2013 to 2022-2023.

Growth

Compounded Sales Growth
10 Years:15%
5 Years:11%
3 Years:13%
TTM:3%
Compounded Profit Growth
10 Years:16%
5 Years:20%
3 Years:7%
TTM:45%
Stock Price CAGR
10 Years:%
5 Years:22%
3 Years:19%
1 Year:22%
Return on Equity
10 Years:18%
5 Years:19%
3 Years:17%
Last Year:20%

Last Updated: Unknown

Balance Sheet

Last Updated: November 15, 2024, 1:44 am

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024Sep 2024
Equity Capital12122424242424242424242424
Reserves2,1602,5672,9753,6684,4444,8405,4156,1377,3538,6149,02110,28811,469
Borrowings1,5521,1281,3066586599989441,6161,7922,6681,3971,4181,478
Other Liabilities5476049861,1841,4401,8031,8242,1692,3512,7633,3153,8444,146
Total Liabilities4,2714,3115,2915,5346,5687,6648,2089,94611,51914,06913,75715,57517,117
Fixed Assets1,0721,1701,3741,4501,7972,2842,5302,9082,7932,9022,6832,8732,807
CWIP00111172299381493363393339323159292
Investments4785884815095534443242613333716224841,160
Other Assets2,7212,5533,3253,4033,9184,5554,8616,4138,00010,45710,12912,06012,858
Total Assets4,2714,3115,2915,5346,5687,6648,2089,94611,51914,06913,75715,57517,117

Reserves and Borrowings Chart

Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Cash from Operating Activity +782903257264712667805851,2651,1111,6821,948
Cash from Investing Activity +-403353-235205-294-351-318-737-995-1,433120-1,011
Cash from Financing Activity +356-600-52-927-13885-37979-272380-1,761-1,145
Net Cash Flow314439340082-73-25842-207

Free Cash Flow

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Free Cash Flow366.00361.00412.00426.00208.00-658.00-997.00-943.000.000.000.000.00

Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)

Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.

Free Cash Flow Chart

Financial Efficiency Indicators

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Debtor Days474352424662627266656765
Inventory Days191163169169198221186198241262194197
Days Payable998110110812214711910411210287129
Cash Conversion Cycle139126121103122135129167196225174132
Working Capital Days96746048658488109117120107169
ROCE %15%14%12%23%21%17%16%18%22%18%14%20%

Financial Efficiency Indicators Chart

Share Holding Pattern

MonthSep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024
Promoters58.84%57.13%57.13%57.14%57.16%57.16%57.16%57.16%56.74%56.74%56.74%56.38%
FIIs5.33%5.40%5.41%5.67%4.46%4.41%4.44%5.63%6.03%8.49%9.11%8.69%
DIIs13.99%13.94%14.14%14.10%15.73%16.44%16.69%16.34%17.63%15.91%15.63%18.56%
Public21.84%23.53%23.32%23.09%22.65%21.99%21.69%20.85%19.58%18.86%18.51%16.37%
No. of Shareholders87,39286,88181,86984,10479,72176,51673,44066,79069,44265,18465,83069,627

Shareholding Pattern Chart

No. of Shareholders

Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)Previous Number of SharesPrevious DatePercentage Change
DSP Mid Cap Fund1,566,4214.73782.59790,0002024-11-1698.28%
Axis Midcap Fund813,1601.66406.26790,0002024-11-162.93%
Nippon India Growth Fund790,0001.62394.69790,0002024-11-160%
ICICI Prudential ELSS Tax Saver Fund475,9021.89237.76790,0002024-11-16-39.76%
Kotak Emerging Equity Fund - Regular Plan472,2180.6235.92790,0002024-11-16-40.23%
SBI Contra Fund452,4000.96226.02790,0002024-11-16-42.73%
DSP Flexi Cap Fund441,1062.19220.38790,0002024-11-16-44.16%
UTI Mid Cap Fund394,4051.96197.05790,0002024-11-16-50.08%
ICICI Prudential Multi Asset Fund388,5260.59194.11790,0002024-11-16-50.82%
Nippon India Pharma Fund377,4122.74188.56790,0002024-11-16-52.23%

ROCE Trend

EPS Trend

Key Financial Ratios

MonthMar 24Mar 23Mar 22Mar 21Mar 20
FaceValue2.002.002.002.002.00
Basic EPS (Rs.)150.1982.31137.63132.5794.26
Diluted EPS (Rs.)150.1982.31137.63132.5794.26
Cash EPS (Rs.)176.56110.18165.98158.29117.28
Book Value[Excl.RevalReserv]/Share (Rs.)896.23789.21740.05632.20527.73
Book Value[Incl.RevalReserv]/Share (Rs.)896.23789.21740.05632.20527.73
Revenue From Operations / Share (Rs.)1059.61970.24889.52741.53697.98
PBDIT / Share (Rs.)213.83152.70185.33181.98131.96
PBIT / Share (Rs.)188.79126.73159.90159.01110.82
PBT / Share (Rs.)169.23109.14154.27154.09105.38
Net Profit / Share (Rs.)151.5284.22140.55135.3296.14
NP After MI And SOA / Share (Rs.)150.2182.32137.65132.5894.28
PBDIT Margin (%)20.1815.7320.8324.5418.90
PBIT Margin (%)17.8113.0617.9721.4415.87
PBT Margin (%)15.9711.2417.3420.7715.09
Net Profit Margin (%)14.298.6715.8018.2413.77
NP After MI And SOA Margin (%)14.178.4815.4717.8713.50
Return on Networth / Equity (%)17.4110.8819.0521.4818.29
Return on Capital Employeed (%)19.4915.0720.6324.0119.77
Return On Assets (%)11.527.1511.6913.7511.33
Long Term Debt / Equity (X)0.000.000.000.000.01
Total Debt / Equity (X)0.110.140.290.220.25
Asset Turnover Ratio (%)0.860.830.710.690.77
Current Ratio (X)2.612.351.761.921.70
Quick Ratio (X)1.941.651.131.281.14
Inventory Turnover Ratio (X)1.251.091.331.231.39
Dividend Payout Ratio (NP) (%)0.0053.450.0021.1231.82
Dividend Payout Ratio (CP) (%)0.0040.630.0018.0025.99
Earning Retention Ratio (%)0.0046.550.0078.8868.18
Cash Earning Retention Ratio (%)0.0059.370.0082.0074.01
Interest Coverage Ratio (X)22.7417.0042.3136.9224.25
Interest Coverage Ratio (Post Tax) (X)18.2011.3433.3728.4618.67
Enterprise Value (Cr.)59097.0539701.2743453.4033002.6928474.91
EV / Net Operating Revenue (X)4.673.424.093.723.41
EV / EBITDA (X)23.1221.7519.6115.1718.05
MarketCap / Net Operating Revenue (X)4.663.504.073.743.34
Retention Ratios (%)0.0046.540.0078.8768.17
Price / BV (X)5.734.495.014.494.52
Price / Net Operating Revenue (X)4.663.504.073.743.34
EarningsYield0.030.020.030.040.04

Profitability Ratios (%)

Liquidity Ratios

Liquidity Ratios (%)

Interest Coverage Ratios (%)

Valuation Ratios

Fair Value

Fair Value of Alkem Laboratories Ltd as of November 21, 2024 is: 5,767.25

Calculation basis:

  • Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.

As of November 21, 2024, Alkem Laboratories Ltd is Undervalued by 4.29% compared to the current share price 5,530.00

Intrinsic Value of Alkem Laboratories Ltd as of November 21, 2024 is: 6,165.12

Calculation basis:

  • Intrinsic value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
  • EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.

This formula allows us to gauge the intrinsic value of the stock by analyzing its fundamental indicators along with EPS growth.

As of November 21, 2024, Alkem Laboratories Ltd is Undervalued by 11.48% compared to the current share price 5,530.00

Last 5 Year EPS CAGR: 6.90%

*Investments are subject to market risks

Strength and Weakness

StrengthWeakness
  1. The stock has a high average ROCE of 17.50%, which is a positive sign.
  2. The company has higher reserves (6,073.15 cr) compared to borrowings (1,354.92 cr), indicating strong financial stability.
  3. The company has shown consistent growth in sales (6.23 cr) and profit (422.69 cr) over the years.
  1. The stock has a high average Working Capital Days of 94.75, which may not be favorable.
  2. The stock has a high average Cash Conversion Cycle of 147.42, which may not be favorable.

Stock Analysis

  • Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in Alkem Laboratories Ltd:
    1. Net Profit Margin: 14.29%
      • Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
    2. ROCE: 19.49% (Industry Average ROCE: 16.25%)
      • ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
    3. ROE%: 17.41% (Industry Average ROE: 16.45%)
      • ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
    4. Interest Coverage Ratio (Post Tax): 18.2
      • Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
    5. Quick Ratio: 1.94
      • Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
    6. Stock P/E: 30.4 (Industry average Stock P/E: 43.94)
      • Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
    7. Total Debt / Equity: 0.11
      • Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
    The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions.
    Stock Rating:

About the Company - Qualitative Analysis

Alkem Laboratories Ltd. is a Public Limited Listed company incorporated on 08/08/1973 and has its registered office in the State of Maharashtra, India. Company’s Corporate Identification Number(CIN) is L00305MH1973PLC174201 and registration number is 174201. Currently Company is involved in the business activities of Manufacture of pharmaceuticals, medicinal chemical and botanical products. Company’s Total Operating Revenue is Rs. 8829.81 Cr. and Equity Capital is Rs. 23.91 Cr. for the Year ended 31/03/2022.
INDUSTRYADDRESSCONTACT
PharmaceuticalsAlkem House, Senapati Bapat Marg, Mumbai Maharashtra 400013investors@alkem.com
http://www.alkemlabs.com
Management
NamePosition Held
Mr. Basudeo N SinghExecutive Chairman
Mr. Sandeep SinghManaging Director
Mrs. Madhurima SinghExecutive Director
Mr. Srinivas SinghExecutive Director
Mr. Mritunjay Kumar SinghExecutive Director
Mr. Sarvesh SinghExecutive Director
Mr. Sujjain TalwarIndependent Director
Mr. Arun Kumar PurwarIndependent Director
Ms. Sangeeta SinghIndependent Director
Ms. Sudha RaviIndependent Director
Mr. Narendra Kumar AnejaIndependent Director

FAQ

What is the latest intrinsic value of Alkem Laboratories Ltd?

The latest intrinsic value of Alkem Laboratories Ltd as on 21 November 2024 is ₹5767.25, which is 4.29% higher than the current market price of ₹5,530.00.

What is the Market Cap of Alkem Laboratories Ltd?

The Market Cap of Alkem Laboratories Ltd is 66,117 Cr..

What is the current Stock Price of Alkem Laboratories Ltd as on 21 November 2024?

The current stock price of Alkem Laboratories Ltd as on 21 November 2024 is ₹5,530.

What is the High / Low of Alkem Laboratories Ltd stocks in FY 2024?

In FY 2024, the High / Low of Alkem Laboratories Ltd stocks is 6,440/4,407.

What is the Stock P/E of Alkem Laboratories Ltd?

The Stock P/E of Alkem Laboratories Ltd is 30.4.

What is the Book Value of Alkem Laboratories Ltd?

The Book Value of Alkem Laboratories Ltd is 961.

What is the Dividend Yield of Alkem Laboratories Ltd?

The Dividend Yield of Alkem Laboratories Ltd is 0.72 %.

What is the ROCE of Alkem Laboratories Ltd?

The ROCE of Alkem Laboratories Ltd is 19.7 %.

What is the ROE of Alkem Laboratories Ltd?

The ROE of Alkem Laboratories Ltd is 19.6 %.

What is the Face Value of Alkem Laboratories Ltd?

The Face Value of Alkem Laboratories Ltd is 2.00.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Alkem Laboratories Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE