Fact based stock research
Alkem Laboratories (BSE:539523)

INE540L01014

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

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Alkem Laboratories stock research in summary

alkemlabs.com

ANALYSIS: With an Obermatt Combined Rank of 36 (worse than 64% compared with investment alternatives), Alkem Laboratories (Pharmaceuticals, India) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Alkem Laboratories are a good value (attractively priced) with a consolidated Value Rank of 61 (better than 61% of alternatives) but show below-average growth (Growth Rank of 29), and are riskily financed (Safety Rank of 48), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 36, is a hold recommendation based on Alkem Laboratories's financial characteristics. As the company Alkem Laboratories's key financial metrics exhibit good value (Obermatt Value Rank of 61) but low growth (Obermatt Growth Rank of 29) and risky financing practices (Obermatt Safety Rank of 48), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 61% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	61
Growth Rank	29
Safety Rank	48
Combined Rank	36

Country	India
Industry	Pharmaceuticals
Index
Size class	Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Alkem Laboratories

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	53	71	51	61
GROWTH
GROWTH	76	37	97	29
SAFETY
SAFETY	76	57	42	48
SENTIMENT
SENTIMENT	n/a	26	80	^new
360° VIEW
360° VIEW	n/a	47	88	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 31-Mar-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Alkem Laboratories is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	53	71	51	61
GROWTH
GROWTH	76	37	97	29
SAFETY
SAFETY	76	57	42	48
COMBINED
COMBINED	84	61	85	36

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Alkem Laboratories the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 61 (better than 61% compared with alternatives), Alkem Laboratories shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Alkem Laboratories. Price-to-Profit (also referred to as price-earnings, P/E) is 54 which means that the stock price compared with what market professionals expect for future profits is lower than for 54% of comparable companies, indicating a good value concerning Alkem Laboratories's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 49, which means that the stock price is lower as regards to invested capital than for 49% of comparable investments. On the other hand, Price-to-Sales is less favorable than 53% of alternatives (only 47% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 45% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 61, is a buy recommendation based on Alkem Laboratories's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	41	59	50	47
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	67	64	38	54
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	19	54	44	49
DIVIDEND YIELD
DIVIDEND YIELD	63	62	47	55
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	53	71	51	61

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Alkem Laboratories; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), Alkem Laboratories shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Alkem Laboratories. Sales Growth has a rank of 50 which means that currently professionals expect the company to grow more than 50% of its competitors. Stock Returns are also above average with a rank of 59. But Capital Growth has only a rank of 6, which means that currently professionals expect the company to grow its invested capital less than 94% of its competitors. Profit Growth is also low, with a rank of only 42, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 29, is a hold recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 59% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	66	39	44	50
PROFIT GROWTH
PROFIT GROWTH	n/a	34	86	42
CAPITAL GROWTH
CAPITAL GROWTH	n/a	73	79	6
STOCK RETURNS
STOCK RETURNS	79	47	91	59
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	76	37	97	29

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Alkem Laboratories.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 48 (better than 48% compared with alternatives), the company Alkem Laboratories has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Alkem Laboratories is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Alkem Laboratories and the other two below average. Refinancing is at 62, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 62% of its competitors. But Leverage is high with a rank of 44, meaning the company has an above-average debt-to-equity ratio. It has more debt than 56% of its competitors. Liquidity is also on the riskier side with a rank of 48, meaning the company generates less profit to service its debt than 52% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 48 (worse than 52% compared with alternatives), Alkem Laboratories has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Alkem Laboratories are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with Alkem Laboratories and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	42	44	48	44
REFINANCING
REFINANCING	52	64	62	62
LIQUIDITY
LIQUIDITY	100	57	37	48
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	76	57	42	48

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Alkem Laboratories and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	62	25	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	13	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	20	83	^new
MARKET PULSE
MARKET PULSE	n/a	67	83	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	26	80	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Alkem Laboratories.
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