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Alkem Laboratories Q1FY22 Conference Call Highlights

Alkem Laboratories Q1FY22 Conference Call Highlights

Published on 09 August 2021 .Views 61 .Comments 0
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Financial Highlights

  • Revenue from Operations stood at 2731 crores from 2003 crores a 36% rise YOY & 25% rise QOQ
  • Expenses stood at 2139 crores from 1470 crores rising 46% YOY & a 13% QOQ
  • EBITDA stood at 640 crores from 577 crores rising 11% YOY & 90% QOQ
  • EBITDA Margin stood at 23% from 29% YOY declining 6% YOY & rising 8% QOQ due to higher cost of raw materials YOY & inventory net realizable value provisioning as well with around 38 crores being a one-off
  • PAT stood at 468 crores from 422 crores rising 11%YOY & 95% QOQ
  • PAT margin stood at 17% from 21%, a decline of 4% YOY & a rise of 6% QOQ due to higher employee cost & the company increasing its basic pay from 37% to 42%  of CTC & higher another expense cost.
  • R&D expenses in the quarter were ₹ 120 crores at 4.3% of revenue from operations with around 12% to 14% spent on biosimilars
  • Healthy Balance Sheet with net cash of ₹ 980 crores as of June 30, 2021
  • Free cash flow stood at 450 crores as of 30th June 2021

Business Highlights

  • India sales contributed 70.7% to total sales in Q1FY22 and stood at 1909 crores from 1155 crores, a growth of 65%
  • In Q1FY22, the Company’s secondary sales grew by 61.1% YoY compared to the Indian Pharma Market growth of 39.2% YoY
  • Growth was mainly led by acute therapies like anti-infectives, vitamins/minerals/nutrients, gastrointestinal and pain management segment
  • The Company also outperformed in chronic therapies like neuro / CNS, cardiac, anti-diabetes, and derma during the quarter
  • Company’s Trade Generic business delivered a robust growth during the quarter
  • Secondary Sales growth: Acute Therapies YOY Growth: Anti Infectives: 88.5%, Gastro-Intestinal: 32.8%, Pain: 43.7%, Vitamins: 86.6%
  • Chronic Therapies: Anti Diabetic: 34%, Neuro: 39%, Cardiac: 25%, Derma: 51%
  • US sales contributed 22.4% to total sales in Q1FY22 and stood at 604 crores a decline of 9% YOY
  • During the quarter, the US business registered sequential growth of 11.2% over Q4FY21
  • In Q1FY22, the Company filed 2 ANDAs with the US FDA and received 5 final approvals
  • The company has also signed a few important licensing and supply agreements in the biotech space worth 100 Crores.
  • As on June 30, 2021, the Company has filed a total of 154 ANDAs (including 2 NDAs) with the US FDA and has received 114 approvals (including 15 tentative approvals and 2 NDAs)
  • ST Louis Formulations Facility has received 2 observations & the company has sent a detailed response regarding the same
  • The US FDA had also conducted a remote and virtual Bio-Analytical inspection of the Company’s Bioequivalence Center located at Taloja, Maharashtra from 26th to 28th July 2021. At the end of the inspection, no Form 483 was issued
  • 15% to 16% growth guidance for the next two-three years driven largely by new launches in US markets is broadly maintained by the management
  • Other International Market sales contributed 6.9% to total sales in Q1FY22 and stood at 186 crores from 118 crores a rise of 56% YOY
  • The Company has a presence in Australia, Europe, South East Asia, Latin America, Africa, and CIS.  Key markets like Australia, Chile, the Philippines, Kazakhstan, and UK registered healthy growth during the quarter
  • The company has made an overall investment of 650 crores  in Biosimilars
  • The company has experienced higher selling & distribution cost with particularly high freight cost for international business
  • Price deflation has been experienced by the company in the US with particularly high deflation in Covid Products
  • The company has around 11000 MRs
  • The company currently as of now is not keen on Mergers & Acquisitions as per the management
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