Key Insights:

ALKEM’s domestic business is its key strength. With strong market positions in anti-infective, gastrointestinal and pain segments, Alkem is a leader in acute therapy segments.

In recent years, ALKEM has entered chronic segments such as cardiology, anti-diabetics and dermatology, and has deployed a sales force of ~3000 in these segments.

Pan-India presence, strong distribution network (>7,000 stockists), doctor relationships and tier III/IV/rural reach should aid ALKEM in increasing share in chronic therapies

ALKEM has built a decent platform for growth in the US with its diversified manufacturing base (6 FDA approved facilities including 2 in the US), pipeline of ~57 ANDAs (~67 ANDAs approved) and front-end presence.

ALKEM’s US business targets 12-15 filing and above 10 launches each year

International business (~21% of FY19 sales) with focus on certain markets Australia, Chile, some European countries, Kazakhstan and East Africa should aid growth in long-term

ALKEM’s investments in biosimilars (facility under construction in Pune) with aim of launching biosimilars to India and emerging markets should aid medium-to-long term growth.

Valuation Multiples:

Strong earnings growth from growth in the domestic market, strong FCF generation and global growth make Alkem an interesting stock to consider at this point.

Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.

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