Alkem Laboratories (ALKEM) Q4 17/18 earnings summary

Executive summary

• FY18 consolidated revenue rose 9.9% to ₹64,312 mn; EBITDA increased 2.9% to ₹10,284 mn, while PAT fell 29.4% to ₹6,309 mn.

• India and international operations grew, with domestic sales affected by GST-related trade destocking and US performance facing pricing pressure.

• Investment in manufacturing capacity, R&D, distribution and product development remained central to the long-term growth strategy.

Financial highlights

• Consolidated revenue from operations was ₹64,311.8 mn, up 9.9% YoY; GST accounting changes make FY18 and FY17 revenue not strictly comparable.

• EBITDA was ₹10,284 mn, up 2.9% YoY; EBITDA margin declined 110 bps, partly due to GST impact and higher other expenses.

• Consolidated PBT fell 4.0% to ₹9,259.8 mn; PAT attributable to owners declined 29.3% to ₹6,309.4 mn, and EPS was ₹52.77 vs ₹74.61.

• Higher tax expense reflected manufacturing facilities losing fiscal benefits and a one-off charge from US tax reform; the consolidated effective tax rate rose to 31.1% from 6.2%.

Outlook and guidance

• Domestic growth plans emphasize chronic therapies, new products and therapy segments while sustaining leadership in acute therapies.

• US growth is expected to continue through new ANDA filings, R&D, in-licensing and partnerships, despite ongoing pricing and regulatory headwinds.

• International expansion will focus on select markets, local presence, differentiated products, new launches and strategic partnerships or acquisitions.

• Capacity additions are expected to support demand and product-mix improvement; new facilities will be commercialised in phases.