22% Upside: Jefferies Recommends ‘Buy’ on this Pharma Stock

Synopsis: Jefferies maintains a Buy on Alkem Laboratories, highlighting its strategic Medtech expansion, ₹1,000 crore revenue vision, and 20-25% margin potential, viewing diversification as a key driver for 22% upside.

This Mid-cap Pharma Stock, engaged in manufacturing and marketing branded generics, APIs, nutraceuticals, and biosimilars across acute and chronic therapies globally, is in focus after Jefferies gave a target of Rs. 6,550, which has an upside potential of 21.86 percent.

​With a market capitalization of Rs. 64,266.19 crore, the shares of Alkem Laboratories Limited were currently trading at Rs. 5,375 per equity share, rising nearly 0.01 percent from its previous day’s close price of Rs. 5,374.40. 

Jefferies, a prominent brokerage firm, has recommended a “Buy” call on Alkem Laboratories Limited with a target price of Rs. 6,550 per share, indicating an upside potential of 21.86 percent from its current market price.

Jefferies maintains a Buy rating on Alkem Laboratories, seeing Medtech as a promising long-term growth driver. While the business is still at a nascent stage, management has laid out a clear roadmap. Alkem plans to consolidate its recent acquisitions and gradually scale the segment organically. 

The company has guided for Medtech revenues of around Rs. 1,000 crore, with healthy EBITDA margins of 20-25 percent over time. Its strategic investment in Occlutech marks an entry into the cardiac Medtech space, expanding beyond its core pharma operations.

Although the acquisition closure is awaited, Jefferies believes this move strengthens Alkem’s diversification strategy. A successful scale-up of Medtech could add a new earnings engine, improve margins, and support sustainable growth, backing the stock’s upside potential.

Business Highlights:

Alkem Laboratories Limited is a leading global pharmaceutical company with a strong presence in more than 40 countries. It has 4 R&D centres that focus on developing new and improved medicines. 

The company operates 18 manufacturing facilities across India and the US, including 6 USFDA-approved plants. Alkem has a wide distribution network with 7 central warehouses, 73 sales depots and CFAs, and over 8,800 stockists, helping it reach customers efficiently.

Alkem is ranked as the 5th largest pharma company in India in terms of market share. It employs more than 21,000 people worldwide. With strong manufacturing, research capabilities, and a large workforce, Alkem continues to expand its global footprint and strengthen its position in the pharmaceutical industry.

Alkem Laboratories Limited was established in 1973 as a pioneering force in India’s pharmaceutical sector. The company specializes in manufacturing and marketing branded generics, APIs, nutraceuticals, and biosimilars across acute (anti-infectives, gastro, pain) and chronic therapies (cardiac, diabetes, dermatology).

Coming into financial highlights, Alkem Laboratories Limited’s revenue has increased from Rs. 3,374 crore in Q3 FY25 to Rs. 3,737 crore in Q3 FY26, which has grown by 10.76 percent. The net profit has also grown by 1.87 percent from Rs. 641 crore in Q3 FY25 to Rs. 653 crore in Q3 FY26. Alkem Laboratories Limited’s revenue and net profit have grown at a CAGR of 9.21 percent and 14.03 percent, respectively, over the last five years.

In terms of return ratios, the company’s ROCE and ROE stand at 20.4 percent and 19.4 percent, respectively. Alkem Laboratories Limited has an earnings per share (EPS) of Rs. 198, and its debt-to-equity ratio is 0.18x.

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