Alkem Laboratories stock rating upgraded by BofA on margin improvement

Published 13/08/2025, 17:30
Alkem Laboratories stock rating upgraded by BofA on margin improvement

Investing.com - BofA Securities upgraded Alkem Laboratories Ltd (NS:ALKEM) from Underperform to Neutral on Wednesday, raising its price target to INR5,530.00 from INR4,900.00.

The upgrade follows Alkem’s strong first-quarter FY26 performance, which demonstrated better-than-expected margins of 22% compared to BofA’s estimate of 19.5%.

Alkem’s India business grew 12% year-over-year in the June quarter, showing improvement after several quarters of muted trends, according to BofA Securities.

The investment bank now projects FY26 margins at 20%, up from 19.4% last year, despite factoring in higher investments in R&D and new business initiatives throughout the year.

BofA Securities adjusted its FY26-28 earnings per share estimates upward by 5-6% while maintaining its valuation multiple at 18.5x one-year forward EV/EBITDA.

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