ALKEM LABS -
Q3 FY 24 concall highlights -
Revenues - 3323 vs 3040 cr, up 9 pc
Gross margins @ 61 vs 59 pc YoY
EBITDA - 707 vs 599 cr, up 18 pc ( margins improved 160 bps to 21.3 pc )
PAT - 604 vs 460 cr, up 30 pc
R&D expenses @ 111 cr, 3.3 pc of sales ( on the lower side - imho )
India sales @ 2232 cr, up 12 pc
International sales @ 1024 cr, up 3 pc
Domestic business grew strongly led by GI, Anti-Diabetic, Vit-Minerals segments. Trade generics also grew strongly
Company’s rank in various therapeutic areas-
Anti-Infectives - 1st
Vit-Minerals - 2nd
GI - 3rd
Pain/Analgesics - 3rd
Company is an emerging player in Diabetic, Neuro, Derma, Cardiac segments
US sales @ 683 vs 761 cr, down 10 pc due very strong base in the previous FY. 9M US sales are up 12 pc
Non-US international ( Australia, EU, LATAM ) sales @ 340 vs 230 cr, up 47 pc !!!
Company has launched 7 biologics in the domestic market via its subsidiary - Enzene ( doing sales of around 200 cr/yr )
Company holding a cash surplus of around 3500 cr
Chronic sales as a percentage of India sales @ 17 pc ( still quite low for the company ). Should be able to take it to above 20 pc in 3 yrs or so
LATAM growth continues to be strong - plus its a healthy EBITDA margin business
Guiding for a full year EBITDA margins of around 17 pc as Q4 is a weak Qtr for Alkem Labs
Looking at deploying cash on balance sheet for growth - ie - acquisitions, organic projects
Anti-Diabetic, Respiratory are strong focus areas for the company in IPM
Enzene ( Biosimilars - subsidiary ) likely to break even this FY
As the Chronic sales in India, RoW sales pick up - margins should improve ( beyond the current annual run rate of 17 odd pc at EBITDA level )
Going fwd - Intend to spend 100-150 cr / yr on R&D related to Biosimilars
Acute portfolio on an avg has 10-15 pc lower Gross Margins vs the Chronic portfolio
Remain bullish on RoW mkts. Should continue to grow well in LATAM, EU
Aim to keep increasing EBITDA margins by 100 bps / yr for the foreseable future
Expecting tax rates of 10-12 pc for next 2-3 yrs for the company. Tax rates will go into the 20s range post FY 27
Around 30 pc of company’s portfolio falls under NLEM
Expecting Q4 EBITDA margins @ 12 pc or better
US business’s economics is now far better vs previous 2-3 yrs
Disc: hold a tracking position, biased, not SEBI registered
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