Alembic Pharma posted marginally lower than expected sales for 2QFY2018. In Rupee terms, revenues de-grew by 10.2% yoy to `789cr (`980cr expected) v/s. `879cr in 2QFY2017. International formulation came in at `262cr v/s. `352cr in 2QFY2017, a yoy dip of 26.0%. Indian formulation sales came in at `385cr v/s. `363cr in 2QFY2017, a yoy growth of 6.0%. On the operating front, EBITDA margin came in at 22.6% (15.4% expected) v/s. 20.3% in 2QFY2017, an expansion of 230bps yoy. Thus, PAT came in at `122cr (`108cr expected) v/s. `120cr in 2QFY2017, up 1.4% yoy. We recommend a Buy rating.

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