Alkem Laboratories Limited: Comprehensive Stock Analysis Report | Scrolls
- Editor
- Oct 2
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by KarNivesh | 02 October, 2025
Stock Analysis Overview
Alkem Laboratories Limited is a leading mid-cap pharmaceutical company in India, valued at around ₹64,960 crores, trading at ₹5,433 per share as of September 26, 2025. Despite facing a -12.33% return in the past year, the company continues to demonstrate strong fundamentals, operational efficiency, and consistent growth, making it attractive for long-term investors.
Business and Market Presence
Founded in 1973 and headquartered in Mumbai, Alkem operates across 40+ countries through branded generics, international formulations, and active pharmaceutical ingredients (APIs). It ranks as the 5th largest pharmaceutical company in India with a 4.1% market share, and has maintained leadership in the anti-infective segment for over 15 years. Its revenue streams are diversified: 65.5% from India, 19.6% from the US, and 14.9% from other international markets.
Financial Performance
Alkem has shown resilient financial growth. In FY2025, revenue stood at ₹13,458 crores (6.2% YoY growth) and net profit at ₹2,216 crores (22.3% YoY growth). EBITDA margin improved to 19.4% from 16.8% the previous year. ROE was an impressive 19.84%, the highest among peers like Sun Pharma, Cipla, Lupin, and Dr. Reddy’s. In Q1 FY2026, revenue rose 11.2% YoY to ₹33,711 million, while net profit jumped 21.8% to ₹6,643 million.
The company is also investing in innovation, spending around 3.9% of revenue (₹520 crores in FY2025) on R&D. It has 147 ANDA approvals from the USFDA and continues expanding its product pipeline.
Industry Outlook
The Indian pharmaceutical industry was valued at ₹4.57 lakh crores (≈ $55 billion) in 2024 and is expected to reach ₹10.79 lakh crores (≈ $130 billion) by 2030, growing at 15–18% CAGR. India enjoys advantages such as lower manufacturing costs, a large export base to 150+ countries, and favorable government policies like the PLI scheme worth ₹15,000 crores.
Strategic Initiatives and Acquisitions
Alkem recently launched its MedTech business, contributing ₹2.5 crores in Q1 FY2026, with projections of ₹40–50 crores by FY2026-end. It also acquired Adroit Pharmacoeuticals, adding about ₹15 crores in quarterly revenue. With 19 manufacturing facilities, including one in the US, Alkem is positioned for strong global expansion.
Corporate Governance and Shareholding
The company maintains high governance standards under the leadership of Executive Chairman Basudeo N Singh and CEO Dr. Vikas Gupta. As of June 2025, promoters held 53.04%, mutual funds 16.67%, FIIs 9.11%, and retail investors 16.05%. Importantly, promoter shares remain unpledged, reflecting financial strength.
Risks and Challenges
Key risks include USFDA compliance issues, competition in the US generics market, and domestic price controls affecting 20–25% of products. Alkem mitigates these risks through diversification, hedging strategies, and strong compliance measures.
Valuation
As of September 2025, the stock trades at a P/E of 28.9x, a P/B of 5.3x, and an EV/EBITDA of 15.8x, which is attractive compared to historical averages. Its 52-week price range is ₹4,491.65–₹6,439.90, currently trading 15.6% below its peak.
Conclusion
Alkem Laboratories combines a strong domestic market presence, industry-leading profitability, conservative debt management, and expanding international operations. With the Indian pharmaceutical industry poised for rapid growth, Alkem’s diversified portfolio, R&D investments, and strategic expansion position it as a compelling long-term investment, despite regulatory and competitive challenges.
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