Alembic Pharmaceuticals (APLLTD) Q4 16/17 earnings summary

Executive summary

• FY17 revenue declined 1% and EBITDA fell 39% YoY, following an exceptional FY16 driven by the US day-one launch of gAbilify; underlying profitability was supported by heavy R&D investment.

• Strategic focus shifted toward complex generics, specialty therapies and expanded manufacturing capacity, backed by more than ₹900 crore of FY17 investment.

Financial highlights

• Consolidated revenue was ₹3,134.61 crore vs ₹3,165.99 crore in FY16; profit after tax was ₹403.16 crore vs ₹720.03 crore.

• Consolidated basic and diluted EPS was ₹21.39 vs ₹38.19; total comprehensive income was ₹401.03 crore vs ₹719.63 crore.

• CFO cited pre-R&D EBITDA margin of 32.8% in FY17 vs 25.4% in FY15, up 740 bps; FY17 R&D investment exceeded ₹450 crore.

Outlook and guidance

• Target to file ~100 ANDAs over the three years starting FY18 and launch 10–12 US products annually over that period.

• FY18 international generics priorities include 8–10 US launches, faster filings, compliant supply-chain execution and commissioning new oral, injectable and dermatology facilities.

• FY18 investment plan was ~₹1,000 crore: ~₹500 crore to complete capacity projects and ~₹500 crore for R&D; funding expected from financial institutions.

• India formulations outlook called for healthy double-digit growth, supported by specialty therapies, improved field-force productivity and the Sikkim facility operating at full utilisation.