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ALKEM: Higher Profit Outlook Will Likely Fail To Offset Rising Risk

Rising Cost Pressures And Regulatory Risks Will Undercut Margins

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ALKEM
AnalystLowTarget
Not Invested
Published 23 Jun 2025

Update shared on 14 Dec 2025

Fair value Increased 12%
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AnalystLowTarget's Fair Value
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1Y
2.4%
7D
-1.3%

Analysts have raised their fair value estimate for Alkem Laboratories from ₹4,030 to about ₹4,530 per share, reflecting expectations of slightly stronger long term profitability and a higher justified earnings multiple, despite a more moderate revenue growth outlook.

What's in the News

  • Received a demand order from the Uttarakhand GST authority for GST of about INR 2.7 million plus a similar penalty and interest for FY 2018 to 2023. The company plans to contest the order, which largely alleges excess input tax credit claims (company regulatory filing).
  • Launched DSS, the original De Simone formulation probiotic blend in India, in licensed partnership with Next Gen Pharma India. The product offers four strength options to address a wide range of gastrointestinal and liver related conditions (company announcement).
  • Expanded presence in India’s fast growing prescription probiotic market, estimated at around INR 2,071 billion with a five year CAGR of roughly 14 percent, by introducing a globally researched, guideline endorsed probiotic range (IQVIA data, MAT October 2025, cited by company).
  • Introduced Pertuza, an indigenously developed pertuzumab biosimilar injection for HER2 positive breast cancer, aiming to improve affordability and access versus the innovator product (company announcement).
  • Scheduled a board meeting on November 13, 2025 to review and approve standalone and consolidated unaudited financial results for the quarter and half year ended September 30, 2025 (company regulatory filing).

Valuation Changes

  • The fair value estimate has risen moderately from about ₹4,030 to about ₹4,530 per share, implying higher long term value expectations.
  • The discount rate has inched up slightly from 12.73 percent to 12.76 percent, signaling a marginally higher perceived risk or required return.
  • Revenue growth has fallen meaningfully from about 9.60 percent to about 6.62 percent annually, reflecting a more tempered top line outlook.
  • Net profit margin has risen modestly from about 13.72 percent to about 14.50 percent, indicating expectations of better profitability.
  • The future P/E has increased from about 29.35x to about 31.65x, suggesting a somewhat richer valuation multiple applied to projected earnings.

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