Alkem Laboratories (ALKEM) Q1 26/27 earnings summary

Executive summary

• Revenue from operations reached ₹37,402 million in Q1 FY27, up 10.9% year-over-year, with India sales at ₹24,978 million (10.3% growth) and international sales at ₹12,224 million (16% growth).

• EBITDA margin stood at 20.5%, up 3.7% year-over-year, with EBITDA at ₹7,661 million.

• Net profit declined 21.7% year-over-year to ₹5,200 million, mainly due to higher taxation.

• Outperformed the Indian pharmaceutical market (IPM) in both acute and chronic segments, with notable growth in key therapy areas.

• Standalone revenue from operations was ₹26,677.3 million, up from ₹23,721.7 million year-over-year.

Financial highlights

• Gross profit rose 15.4% year-over-year to ₹25,389 million, with margin improving to 67.9%.

• EBITDA margin at 20.5%, with R&D expenses at 4% of revenue.

• Profit before tax grew 1.8% year-over-year; PAT margin dropped to 13.9% from 19.7% YoY.

• EPS decreased 21.7% year-over-year to ₹43.5.

• Gross margin guidance maintained at 66.5%-67% for the year, with Q1 margin supported by favorable mix and currency.

Outlook and guidance

• India business expected to grow close to 12% for the year, with branded formulations leading and trade generics recovering.

• U.S. business guided for high single-digit to mid single-digit growth, aided by currency, with Daman plant OAI not expected to impact FY27.

• CDMO U.S. business not expected to break even in the next 12 months; breakeven requires $25-30 million annual revenue, targeted by FY28.

• Occlutech acquisition targeted for ₹4,000 million sales and break-even EBITDA in FY27, with gradual margin improvement over 3-4 years.

• Continued focus on outperforming the market in key therapy areas and ongoing R&D investment at 4% of sales.