Alembic Pharma Q3 results: Profit up 48% as raw material cost declines

Alembic Pharmaceuticals posted a 48.02 per cent year-on-year (Y-o-Y) increase in profit after tax (PAT) during the third quarter of financial year 2023-24 concluded on December 31, reaching Rs 180.45 crore.

The company also posted an 8.06 per cent increase in its consolidated revenue from operations, which came in at Rs 1,630.57 crore, in contrast to Rs 1,509.02 crore in the corresponding period last year. This increase in PAT was attributed to tax deduction, decline in the cost of materials consumed, and improvement in Ebitda.

On a sequential basis, the company exhibited a 2.24 per cent increase in revenue along with PAT which rose 32.13 per cent.

The Ebitda witnessed an increase of 14 per cent Y-o-Y, reaching Rs 269 crore, and sequentially, it was up by 24 per cent.

In Q3FY24, the Indian branded business grew by 9 per cent against the Indian Pharmaceutical Market (IPM) growth of 8 per cent reaching Rs 596 crore. In the Animal Health business, a growth of 32 per cent was recorded on a Y-o-Y basis. This growth can be attributed to the portfolio of strong brands.

Commenting on the results, Shaunak Amin, MD, Alembic Pharmaceuticals said, “The India Branded Business was underpinned by a continued incremental improvement in core operations. The Specialty and Animal health segments continued its strong outperformance; whereas the Acute performance was relatively satisfactory despite challenging market conditions. The Ex-US generics grew 32 per cent in the quarter, whereas the US returned to a 9 per cent growth on the back of 11 launches and 7 approvals.”

Commenting on the same, RK Baheti, CFO Alembic Pharmaceuticals said, "Our 48 per cent increase in profit is attributed to making good money in the unpredictable US market. We focus on what's under our control – supply chain and compliances. The improvement at the Ebitda level is a result of both actual business improvement and lower tax provisions due to the impairment process.”

In the US Generics business, there was a 9 per cent Y-o-Y growth reaching Rs 474 crore, due to the introduction of 11 new products during the quarter and market share gain in recently launched and commercialised products.

In the API (Active Pharmaceutical Ingredients) segment, there was a decline of 11 per cent Y-o-Y which stood at Rs 289 crore as compared to Rs 326 crore in the corresponding period last year. This was primarily due to reduced off-take from selected customers. Speaking on this, Baheti stated, "API business growth has been extraordinary in recent years, but at a higher base, a pause is needed before another growth phase. Price erosion and pressure on generic prices have led to value degrowth, not volume."

For the markets excluding US Generics, a growth of 32 per cent Y-o-Y was reported which stood at Rs 272 crore for the quarter. This growth is attributed to successful product registrations and dossier extensions to new markets.

This quarter, there were 7 ANDA approvals received along with 196 cumulative ANDA approvals. "In the US generic market, we usually aim to file 5-6 ANDAs per quarter, with an average of 7-8 approvals. While therapeutic focus matters, our primary approach is opportunity-based rather than therapeutic-based," Baheti further added.

Speaking on the future of Indian market launches, Baheti stated, "In the Indian market, product launches are based on DCGI approval. We continue to launch 20-25 products annually, including brand extensions, particularly in cardiology, gynaecology, and smaller segments like ophthalmology."

Alembic Pharmaceuticals share price rose by 0.64 per cent, ending the day's trade at Rs 963.20 apiece on the BSE.