ALKEMNSEQ1 FY2026August 12, 2025

Alkem Laboratories Limited

7,998words

131turns

15analyst exchanges

4executives

Download PDF ↗ALKEM stock page →

Management on call

Vikas Gupta

CHIEF EXECUTIVE OFFICER – ALKEM LABORATORIES LIMITED

Nitin Agrawal

CHIEF FINANCIAL OFFICER – ALKEM LABORATORIES LIMITED

Purvi Shah

HEAD OF INVESTOR RELATIONS – ALKEM LABORATORIES LIMITED

Tushar Manudhane

MOTILAL OSWAL FINANCIAL SERVICES LIMITED

Key numbers — 40 extracted

INR33,711 million

will now present the key highlights of Q1 performance. The total revenue from operations stood at INR33,711 million with Y-o-Y growth of 11.2%. India sales at INR22,656 million with a Y-o-Y growth of 12%. U.S. b

11.2%

performance. The total revenue from operations stood at INR33,711 million with Y-o-Y growth of 11.2%. India sales at INR22,656 million with a Y-o-Y growth of 12%. U.S. business grew by 8.8% Y-o-Y to

INR22,656 million

l revenue from operations stood at INR33,711 million with Y-o-Y growth of 11.2%. India sales at INR22,656 million with a Y-o-Y growth of 12%. U.S. business grew by 8.8% Y-o-Y to INR6,982 million. Non-U.S. busi

12%

3,711 million with Y-o-Y growth of 11.2%. India sales at INR22,656 million with a Y-o-Y growth of 12%. U.S. business grew by 8.8% Y-o-Y to INR6,982 million. Non-U.S. business revenue grew by 9.1% Y

8.8%

th of 11.2%. India sales at INR22,656 million with a Y-o-Y growth of 12%. U.S. business grew by 8.8% Y-o-Y to INR6,982 million. Non-U.S. business revenue grew by 9.1% Y-o-Y to INR3,556 million. EBIT

INR6,982 million

India sales at INR22,656 million with a Y-o-Y growth of 12%. U.S. business grew by 8.8% Y-o-Y to INR6,982 million. Non-U.S. business revenue grew by 9.1% Y-o-Y to INR3,556 million. EBITDA grew by 21.4% Y-o-Y t

9.1%

of 12%. U.S. business grew by 8.8% Y-o-Y to INR6,982 million. Non-U.S. business revenue grew by 9.1% Y-o-Y to INR3,556 million. EBITDA grew by 21.4% Y-o-Y to INR7,391 million, resulting in an EBITDA

INR3,556 million

business grew by 8.8% Y-o-Y to INR6,982 million. Non-U.S. business revenue grew by 9.1% Y-o-Y to INR3,556 million. EBITDA grew by 21.4% Y-o-Y to INR7,391 million, resulting in an EBITDA margin of 21.9%. Net pr

21.4%

6,982 million. Non-U.S. business revenue grew by 9.1% Y-o-Y to INR3,556 million. EBITDA grew by 21.4% Y-o-Y to INR7,391 million, resulting in an EBITDA margin of 21.9%. Net profit after minority inte

INR7,391 million

Non-U.S. business revenue grew by 9.1% Y-o-Y to INR3,556 million. EBITDA grew by 21.4% Y-o-Y to INR7,391 million, resulting in an EBITDA margin of 21.9%. Net profit after minority interest was INR6,643 millio

21.9%

3,556 million. EBITDA grew by 21.4% Y-o-Y to INR7,391 million, resulting in an EBITDA margin of 21.9%. Net profit after minority interest was INR6,643 million with a Y-o-Y growth of 21.8%. R&D expens

INR6,643 million

INR7,391 million, resulting in an EBITDA margin of 21.9%. Net profit after minority interest was INR6,643 million with a Y-o-Y growth of 21.8%. R&D expenses for the quarter were INR1,184 million, that is 3.5% of

Advertisement

Guidance — 20 items

Purvi Shah

opening

“Before we begin, please note that this call is being recorded, and the transcript will be made available on our website shortly after the call concludes.”

Vikas Gupta

“So, I find it a little too early to revise the guidance upward, but I can clearly tell you if the year progresses, the way we are seeing for some more time, then definitely, we would overachieve on the guidance that we have given.”

Vikas Gupta

“But at this stage, I will stay with the guidance that we have issued primarily because it has been just 1 quarter that we have done, though there are no one-offs in this.”

Vikas Gupta

“But still, since it is just 1 quarter of the year, that has happened, I would stay with the guidance.”

Vikas Gupta

“I would say the probability of us whatever guidance we have given, getting there is much higher backed on a strong start on the Q1.”

Vikas Gupta

“So that's my take on the overall guidance at this stage.”

Vikas Gupta

“Our overall annual guidance has been within the range of 4.5% to 5%, and I stay put with that.”

Vikas Gupta

“So, we are bullish about that strategy and hope to scale it in the coming quarters.”

Vikas Gupta

“So, it will be gradual ramp-up by the year-end it will be INR40 crores, INR50 crores?”

Vikas Gupta

“You can never -- if there are no such substantial new products, which will lead to pipeline filling where -- for which there will be a gap in primary and secondary sales.”

Risks & concerns — 1 flagged

Which would then be from FY '28, given that the drag from these businesses should not be there FY '28 onwards?

— Rahul Jeewani

Advertisement

Q&A — 15 exchanges

Okay. So Kunal, the start has been very good to the year. But I would say, at this stage, it is just 1 quarter of the year that has gone by. So, I find it a little too early to revise the guidance upward, but I can clearly tell you if the year progresses, the way we are seeing for some more time, then definitely, we would overachieve on the guidance that we have given. But at this stage, I will stay with the guidance that we have issued primarily because it has been just 1 quarter that we have done, though there are no one-offs in this. We do not see any reason for the performance to slow down

Vikas Gupta

Yes. I think it's more about phasing of the expenses. Our overall annual guidance has been within the range of 4.5% to 5%, and I stay put with that. And that is why I'm saying some of the coming quarters, we will - - we may have a higher expense in R&D because if you see our filings trend as well, I think it's loaded more towards -- in Q4, we do the maximum filings. So that is the cycle, which has been following as far as R&D spend is concerned. So, we stay put with that guidance. Kunal Dhamesha: Sure. And last one from my side. Is there any forex gain which has been offset against other expen

Sir, my question is regarding the India business. So, I just wanted to understand what is the contribution from the new MedTech business to your India revenues for this quarter?

Vikas Gupta

So, see, MedTech business, we've just started. So, our first quarter revenue is around INR2.5 crores, which is very minimal. But we are pretty confident with the way we have started that business. And in the initial months itself, the uptake has been -- the response of customers has been quite positive. So, we are bullish about that strategy and hope to scale it in the coming quarters. But I mean, in terms of the overall contribution to the India business, it's way too small at this stage. Sir, is there any annual run rate that you see for that business in the coming quarters? Yes. So, we'll s

So, Sidharth, thanks for your compliment. But we have never given these kinds of breakups earlier. If you look at IQVIA data, we are outperforming in our Branded Generic business. So, I think if that is any reflection of our growth then IQVIA, we are reflecting a 9.7% growth against a market growth of 8.5%. But what I can tell you is our majority business is Branded Generic business only. If you look at the India business, the major part of our revenue is from the Branded Generic business. And if overall business has grown strong, then we have -- that has contributed to the overall growth. Sid

Vikas Gupta

Of course. No. So this has always been the case with India business. You can never -- if there are no such substantial new products, which will lead to pipeline filling where -- for which there will be a gap in primary and secondary sales. So, it has been a stable business, which we are running for a good number of years. So, I think this is all by the secondary business. Sidharth Negandhi: I was referring to more of the recent part. And accordingly, one can get a sense on what the remainder of the growth would be. That's question?

So yes, first of all, I think there was a positive impact on account of lower API prices, so which was around, say, 0.8%, 0.9%. And the mix has improved because our domestic contribution is higher if you look at the overall growth. So, whenever the domestic business will contribute more to the total sales, that gross margin will improve. There was negative impact on account of price drop in U.S. So, we still see 3% to 4% price drop in U.S. in quarter 1 also. So, the growth because in margins, because of better mix, has been offset by a drop-in price in U.S. market.

Neha Manpuria

In which case, this -- should this gross margin level be broadly sustainable? I mean obviously factoring in the seasonal change. Should we able to be -- should Alkem be able to maintain the 65% gross margins through the year? So, we have given a guidance of around 64%. So, we maintain our guidance of 64% because generally, quarter 1, quarter 2, the contribution of domestic business is higher as compared to quarter 3 and quarter 4. So, at a full year basis, we still maintain a guidance of 64%. Okay. Understood. My second question is on the MedTech business. What is the -- roughly the cost assoc

So, this higher R&D that you're talking about, this is -- I mean, typically last 5, 6 years, you've on an average done INR500 crores, INR550-odd crores kind of R&D spend. Is there something higher that you are budgeting for? And what are they on account of that higher budget?

Vikas Gupta

So, you were asking about the absolute cost of R&D? Yes. So yes. So, see, like I mentioned, we are also focusing on growing our non-U.S. business. So, there are a lot of filings that we are doing in the non-U.S. markets as well. And the kind of products that we are working on in our R&D, I think it's just mix and some total of all - even in India, we have to do certain clinical trials on certain products that we are undertaking. So, this is why on an overall absolute basis, the cost may be looking higher. But if you look at percentage-wise, it will be still within 4.5% to 5% of our overall rev

This quarter, we have seen a good in the U.S. sales. So, what is really driving this? And have you launched valsartan/sacubitril in the U.S. And will this be the new base now in the subsequent quarters also or do you still maintain your mid-single-digit U.S. growth for full year?

Vikas Gupta

Yes. So, Rashmi, I think two, three points that you had asked. On the sacubitril/valsartan, we have launched with everyone else as far as the U.S. business is concerned. On the -- your other part was on the growth from the U.S. market. U.S. market, like I said, has grown. The trends, the pricing trends continue over there. But what had happened is, like I said, we were battling with our supply chain and stock position, at least we are doing a lot better as far as that is concerned. So overall, I think our guidance was about mid-single-digit kind of growth from U.S. markets. I will maintain at

Y-o-Y basis. Kunal Dhamesha: Okay. And was there any contribution from Adroit in this quarter?

Vikas Gupta

Yes. See, Adroit has been a small company. So, there was around INR15 crores overall revenue that we recorded from Adroit, which is in line with our plan when we had acquired that company, and that's largely domestic play. Kunal Dhamesha: And it got closed in quarter 1 only or in quarter 4? Yes. We completed the acquisition in quarter 1, mid of April, somewhere around mid of April. Kunal Dhamesha: Sure. And what would be our capex outlook for FY '26 and '27? Around INR750 crores. This is what we have said before also. INR750 crores for FY '26. How about the -- is it just for FY '26? FY '26, ye

Yes. So, from a management bandwidth point of time, of course, the branded business takes the maximum time and for the right reasons because that is our biggest contributor. Then I would say, the CDMO business and the biosimilars business, that takes the -that takes even the other chunk of the business, of the management bandwidth. For the MedTech business, we have one of the leaders, Kaustav, who manages the MedTech business. So, I think he dedicates maximum time over there. But from an overall management bandwidth point of view, of course, it's the smallest business. It takes whatever time i

Vikas Gupta

So again, the largest capital is put behind the Branded business itself. But it's not a very capital-intensive business, so to say. So, there's no -- in terms of -- if your question is more about the capex, et cetera. I think the largest capex at this stage is going behind the biotech and the CDMO opportunity because that business needs that kind of capital. But that doesn't mean that we reduce investments in our core business, which is our largest branded generic business. Whenever there is a need for capital to be deployed on that part of the business, that, of course, remains our biggest pr

So, this 12% growth, which we saw in the India portfolio this quarter, can you call out what was the organic growth in the business given that we had some asset acquisitions? So, you called out Adroit contributed INR15 crores. There was Bombay Ortho as well. So, if you can just call out this organic inorganic piece for the India business.

Vikas Gupta

I think those are the only 2 inorganic numbers, which is very small, which is not -- I think, 0.4% to 0.5% is something that would have come from that inorganic piece. Otherwise, the growth is largely organic only. Okay. Sure, sir. And sir, in terms of, let's say, you're coming back, the focus is largely on branded business in India, and scaling up the non- U.S. export piece. So, given the focus on these businesses, what is the kind of EBITDA margin trajectory, let's say, you envisage for the overall business 3 to 4 years down the line? So just some clarity there would be helpful? Rahul, I thi

Can you provide some insights on when do you plan to submit Enzene's Denosumab biosimilars in the U.S.?

Vikas Gupta

Sorry, Sandeep. Your voice is not clear. Can you repeat, please, the question? Can you provide some insights on when do you plan to submit Enzene's Denosumab biosimilars in the U.S.? So, we have already filed the BLA in U.S. as far as denosumab is concerned. The expected time frame is somewhere middle of next year when we are expecting the approval provided the regulatory pathway is complied. So, we will be looking at commercializing it subsequent to that. The patent expiry is around May '26. So, we should -- and I mean, in that range, depending on the litigation outcomes that the innovator ha

Sir, the sequential improvement in the U.S. business that we saw this quarter, does that have any benefit of sacubitril/valsartan?

Vikas Gupta

No. Sacubitril/valsartan and got launched in the month of July, towards the last part of July. So that will -- that you will see in Q2. So, this is improvement in base business or some other new launches that happened in Q1 then? So, this is a blend of the base business, some new launches as well as some of a small portion from CDMO revenue as well. And this would see a ramp-up with the new launch in Q2 as well? Would that be right? Yes, we should be -- so we should see the sacubitril/valsartan getting -- revenue getting recognized in Q2, which would add overall. But of course, there is -- in

On an average, once the facility will be up and running, you can -- the estimate is around INR50 crores per quarter in INR terms for the U.S. CDMO facility. Tushar Manudhane: And for MedTech business, sir, how much is the opex probably in this quarter or subsequently, how much sort of stabilizes?

Nitin Agrawal

So, once it will stabilize, the opex will be in the range of, you can say, per quarter, it will be around, say, INR25 crores to INR30 crores. Tushar Manudhane: And what would trigger additional opex for both the segments actually? Sorry, I didn't get the last. Is your question, would we need more opex in times to come? Tushar Manudhane: No, of course, as the business grows, we'll need it. But let's say, for the foreseeable future for next 2 to 3 years? So, when I say, say, INR50 crores for Enzene CDMO facility and say INR25 crores for our MedTech, this is considering 100% utilization of our cu

Okay. Sir, the first question is, if one splits your domestic sales in NLEM and non-NLEM buckets, given that the WPI-linked price increase in NLEM was around 1.8% this year. Is it a reasonable inference that the non-NLEM piece would have grown by 15% plus?

Vikas Gupta

I do not have the data handy. You can check it from the IQVIA data. But we have never given product level or segment specific. The thing what I can tell you is our NLEM percentage, the portfolio that we have is around 30%. And there is volume growth. Price growth is just one piece. Even if you look at the volume growth, we are growing much faster in terms of volumes even on this portfolio as compared to market. So, I think that's the way we look at. But if you do the math and take a 5% increase in the NLEM piece, which is one-third of your portfolio, arithmetically, the balance of your portfol

Thanks for the opportunity and congratulations on the great set of numbers. Sir, I got two questions.

Vikas Gupta

Thank you Neha.

So, thank you all for joining today's call and your questions and the engagement. If you have any follow-up queries, need any clarification, please feel free to reach out to us directly. So, thank you once again.

Management

Speaking time

Vikas Gupta

Nitin Agrawal

Moderator

Chirag

Gagan Thareja

Gaurav

Neha Manpuria

Rashmi

Rahul Jeewani

Purvi Shah

Advertisement

Opening remarks

Purvi Shah

Thank you, Tushar. Good evening, everyone. We appreciate you joining us for our Q1 FY '26 results call. Earlier today, we've released our financial results, press release and results presentation, all of which are available on our website and have also been filed with the stock exchanges. We hope you've had a chance to review them. Before we begin, please note that this call is being recorded, and the transcript will be made available on our website shortly after the call concludes. Also, today's discussion may include certain forward-looking statements, so this should be viewed in the context of the risks and uncertainties associated with our business. With that, I now hand over the call to our CEO, Dr. Vikas, for his opening remarks. Over to you, sir.

Vikas Gupta

Thank you, Purvi, and thank you, Tushar. Good evening, everyone, and thank you for joining us for our Q1 FY '26 Earnings Call. Q1 FY '26 marked a strong start to the year with healthy growth across both our domestic as well as international markets. Our performance was driven by strong top line growth and an improved gross margin, which resulted in a better EBITDA profile. These results reflect the disciplined execution of our strategy, focused investments and a deliberate pivot towards value-accretive products and markets with a sharper focus on EBITDA. We are strategically accelerating our focus on the non-U.S. business segment by strengthening our presence in high potential non-U.S. markets as well and capturing new opportunities that align with our long-term growth ambitions. I will now present the key highlights of Q1 performance. The total revenue from operations stood at INR33,711 million with Y-o-Y growth of 11.2%. India sales at INR22,656 million with a Y-o-Y growth of 12%. U.

Advertisement

← All transcripts ALKEM stock page →

Alkem Laboratories Limited

Market Movers