HSBC has maintained its hold rating on Alkem Laboratories while raising the target price to ₹5,170 per share following a better-than-expected Q2FY26 performance. The beat was driven largely by lower R&D expenses during the quarter, the brokerage said.
India and U.S. revenues were in line with expectations, while the rest-of-world (RoW) markets delivered robust sales growth, helping support overall topline momentum. HSBC said the company’s EBITDA margin improved due to the one-off reduction in R&D spending; however, management has guided for FY26 EBITDA margin of 19.5–20%, factoring in higher R&D investments and new strategic initiatives.
HSBC noted that while these new initiatives hold long-term promise, they will take time to yield meaningful financial results. The brokerage remains cautious in the near term due to rising competitive pressures, higher investment requirements, and slower margin expansion compared to peers.
Disclaimer: The views and recommendations above are those of HSBC. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
