Shares of Alkem Laboratories Ltd. garnered significant attention on Wednesday following a major block deal where promoter Jayanti Sinha divested her entire holding in the pharmaceutical company. The transaction involved 12,38,220 shares, representing a 1.04 percent stake, sold at an average price of Rs 5,200 per share, totaling Rs 643.87 crore.
Promoter Exit and Other Sellers
In addition to Jayanti Sinha's significant sale, data also revealed that the Samprada & Nanhamati Singh Family Trust offloaded 5,50,000 shares, generating Rs 286 crore from the transaction. This combined activity marked a notable shift in the ownership structure of Alkem Laboratories.
Institutional Investors Step In
The shares sold in the block deal were acquired by a host of prominent institutional investors. Key buyers included:
- Goldman Sachs Bank Europe
- Societe Generale
- HDFC Mutual Fund
- ICICI Prudential Mutual Fund
- Morgan Stanley Asia Singapore PTE
- DSP Mutual Fund
- Edelweiss Mutual Fund
- BNP Paribas Arbitrage ODI
Specifically, ICICI Prudential Mutual Fund emerged as a major acquirer, purchasing 9,03,527 shares, while HDFC Mutual Fund bought 5,09,615 shares. Goldman Sachs Bank Europe, Edelweiss MF, Morgan Stanley Asia Singapore PTE, Nippon India MF, and BNP Paribas Arbitrage each acquired 48,090 shares.
Analyst Outlook and Financial Projections
The block deal comes shortly after Choice Institutional Equities revised its target for Alkem Laboratories on May 29, citing a likely moderation in the company's margin. The brokerage anticipates Alkem Labs' revenue to grow in the low-to-mid-teens, primarily driven by new product launches and the scaling up of recent acquisitions.
Despite expected revenue growth, margin expansion is projected to moderate. Upcoming launches, including Valsartan, Tolvaptan, and select biosimilars, are expected to help mitigate pricing headwinds. Choice Institutional Equities forecasts an EBITDA margin for Alkem Labs in the range of 20–21 percent for FY27E, with a potential 100 basis points expansion in FY28E.
Consequently, the brokerage revised its FY27/28E EPS estimates downwards by 7.3 percent and 7.8 percent, respectively, maintaining a valuation of 25 times FY28E EPS. The revised target price for Alkem Labs stands at Rs 5,755, down from Rs 5,995. However, analysts also see incremental upside potential from the successful ramp-up of the company's Medtech and CDMO (Contract Development and Manufacturing Organization) verticals.