The stock at the CMP of Rs1,837 is available at P/E of
17.5x of FY19E EPS of `105. The stock price in CY2017 has appreciated by 13%
leaving less room for further upside at this juncture. We expect company to report
CAGR of 17.4% and 22.4% in top line and bottom line respectively in next two
years. Its ANDA pipeline has not seen strong traction this year so far, despite
which Alkem maintains guidance of high single digit ANDA launches going
ahead. This justifies the ~29-30% growth in the US business over next two years.
We rate Alkem Accumulate with PT of 1,996 based on 19.5x of FY19E EPS.

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