Analyst Concall
Alkem Lab EBITDA margin growth seen flat in FY26
This story was originally published at 19:43 IST on 29 May 2025
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--Alkem Lab: Bullish on India business going forward
--CONTEXT: Alkem Lab mgmt's comments in post-earnings call with analysts
--Alkem Lab: Jan-Mar gross margin fell on year owing to production slowdown
--Alkem Lab:Expect domestic ops to surpass mkt growth by 100 bps or more FY26
--Alkem Lab: Expect US business to grow in mid single digit in FY26
--Alkem Lab: See 5-6 new product launches in US in FY26
--Alkem Lab: See FY26 capex INR 7 bln-INR 7.5 bln
By Shakshi Jain
MUMBAI – Alkem Laboratories Ltd. expects its operating margin to remain largely unchanged at 19.5% in 2025-26 (Apr-Mar), company management said in a post-earnings analyst conference call Thursday. In FY25, the pharmaceutical company logged a 170-basis-point on-year improvement in its earnings before interest, taxes, depreciation, and amortisation margin to 19.4%.
Any gains from active pharmaceutical ingriedient prices in FY26 may be partially offset by operating losses anticipated in the company's newly acquired businesses in the contract development and manufacturing segment and medical technology category. "There will be around 100 to 125 crores (INR 1.00 billion to INR 1.25 billion) of operating losses which we will incur for these two business combined," one of the company officials said.
However, over a three-year period, Alkem Laboratories is eyeing INR 4.5 billion–INR 5.0 billion in sales from its contract development and manufacturing segment with full capacity utilisation.
Alkem Laboratories is aiming for a capital expenditure of INR 7.0 billion-INR 7.5 billion in the ongoing financial year, the company's management said. Its research and development expenses are expected to hover around 5% of the revenue from operations, the management added.
REVENUE GROWTH
Alkem Laboratories is bullish on its business in India going forward. In FY26, the company expects the India arm to surpass the pharmaceutical industry growth by 100 basis points or more, a company official said.
In its US markets, sales are expected to grow in mid single-digit during the year, the company said. It aims to launch 5-6 new products in this market across FY26.
Earlier Thursday, Alkem Laboratories posted a 4% on-year rise in its consolidated net profit for the March quarter to INR 3.06 billion. Its revenue rose over 7% on year to INR 31.44 billlon, driven by growth in domestic sales and a decline in other expenses.
In the March quarter, gross margins of the company saw a slight decline on year due to lower production, the company said.
For the full year, Alkem Laboraties reported a growth of over 20% in its bottom line to INR 21.65 billion. Its top line for the year rose over 2% to INR 129.65 billion. The company's EBITDA for the same period grew nearly 12% on year to INR 25.12 billion.
Shares of Alkem Laboratories closed 0.6% up at INR 5,294.50 on the National Stock Exchange. End
Edited by Akul Nishant Akhoury
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