Q1 2027 Alkem Laboratories Ltd Earnings Call Transcript
Key Points
- Alkem Laboratories Ltd (BOM:539523) reported a robust 11% year-on-year revenue growth, with India sales up 10.3% and international sales surging 16%.
- The company outperformed the Indian Pharmaceutical Market (IPM) by 100 basis points, with strong growth in chronic (17.9%) and acute (12.3%) segments, and outperformed in seven key therapies.
- EBITDA margin improved to 20.5%, a 3.7% year-on-year increase, driven by better product mix and favorable currency movements.
- The company received five ANDA approvals in the US during the quarter, and its biosimilar portfolio in India is performing well, generating around INR150 crores in annual sales.
- Management remains optimistic about the US business, expecting high single-digit growth for the year, supported by currency tailwinds and a stable supply situation despite the Daman facility's OAI status.
- Net profit declined 21.7% year-on-year due to a higher consolidated tax rate (30-32%) and losses in new entities, impacting overall profitability.
- The Daman facility received an OAI status from the US FDA, which could pose regulatory risks and potential future supply disruptions, despite current uninterrupted supplies.
- The US CDMO business is incurring significant operational expenses (around INR60 crores per quarter), with breakeven not expected until FY28, and the sales cycle is longer and lumpier than traditional pharma.
- Trade generics business growth was flat in Q1, dragged down by intense competition, tightened credit policies, and higher API prices, leading to lower overall India growth.
- The launch of the denosumab biosimilar in the US has been delayed by a few months, and the company faces intense competition in the European biosimilar market, limiting near-term revenue potential.
Ladies and gentlemen, good day, and welcome to Alkem Laboratories Limited Q1 FY27 earnings conference call hosted by Motilal Oswal Financial Services Limited.
(Operator Instructions)
Please note that this conference is being recorded. I now hand the conference over to Mr. Tushar Manudhane from Motilal Oswal Financial Services Limited. Thank you, and over to you, sir.
Thanks, Yusuf, and sorry for the delay in the start of the call. Good evening, everyone, and a warm welcome to our first-quarter FY27 earnings call of Alkem Laboratories. From management side, we have Mr. Sandeep Singh, Managing Director; Mr. Nitin Agrawal, CFO; and Purvi Shah, Head of Investor Relations.
Over to you, Purvi.
Thank you, Tushar. Good evening, everyone. On behalf of Alkem Laboratories, I welcome you all to our quarter one FY27 earnings call. Earlier today, we announced our financial results along
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