Alkem Laboratories (ALKEM) Q1 24/25 earnings summary

Executive summary

• EBITDA margin improved to 20.1% in Q1 FY25 from 13.1% in Q1 FY24, driven by product mix, cost control, and favorable API pricing; EBITDA up 56.4% year-over-year.

• Net profit after minority interest surged 90.1% year-over-year to ₹5,452 million.

• Domestic business outperformed the Indian Pharmaceutical Market in key therapies, while US sales declined 7.7% year-over-year.

• Successfully resolved USFDA Form 483 at Baddi facility, reinforcing regulatory compliance.

• Standalone and consolidated unaudited financial results for the quarter ended 30 June 2024 were reviewed and approved, with auditors issuing unmodified review reports.

Financial highlights

• Revenue from operations: ₹30,318 million (up 2.2% YoY); India sales: ₹20,223 million (up 6.4% YoY); International sales: ₹9,677 million (down 4.6% YoY).

• Net profit after minority interest for Q1 FY25 was INR 545 crore.

• Gross profit: ₹19,559 million (up 10.6% YoY); gross margin: 64.5% (vs. 59.6% YoY).

• PAT after minority interest: ₹5,452 million (up 90.1% YoY); PAT margin: 18.0% (vs. 9.7% YoY).

• Basic and diluted EPS (consolidated) for the quarter were ₹45.60, up from ₹23.98 year-over-year.

Outlook and guidance

• EBITDA margin guidance for FY25 maintained at around 18%, with gross margin expected at 62%-62.5%.

• R&D spend projected at 4.5%-5% of sales for FY25, with higher spend in Q3 and Q4.

• India business expected to grow in line with the market, estimated at 8%-10%.

• Non-U.S. international business expected to grow at mid-teens rate over the next 2-3 years.

• U.S. business guided for single-digit growth, with new launches like Dabigatran expected to impact revenue in H2.