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Informist, Monday, Oct. 27, 2025

By Narayana Krishna

HYDERABAD – Growth in its domestic formulations business along with an improvement in the US business led by launch of the chronic heart failure drug Entresto's generic version, is likely to help Alkem Laboratories Ltd. report healthy growth in its consolidated earnings for the September quarter, analysts said.

Alkem Labs is expected to report a consolidated net profit of INR 7.4 billion, up 7% on year and 13% on quarter, according to the average of estimates from six brokerages tracking the company. Revenue for the quarter is projected at INR 37.7 billion, up 10% on year and 12% on quarter, the estimates show.

Estimates for the company's net profit for the September quarter range from a low of INR 7.1 billion from ICICI Securities Ltd. to a high of INR 7.8 billion from Yes Securities (India) Ltd. Revenue projections for the quarter vary between INR 36.6 billion at the lower end, estimated by Nirmal Bang Equities Pvt. Ltd and INR 38.6 billion at the higher end, projected by Nuvama Wealth Management Ltd. Alkem Labs is scheduled to announce its September quarter earnings on Nov. 13.

Analysts expect strong momentum in the company's India formulations business, likely to grow 8–12% on year, driven by healthy traction in key therapies and continued strong execution. The US business is seen reporting double-digit growth, led by new product launches, including the generic version of Entresto and benefits from a low base. Other international markets are also expected to contribute positively on the back of robust growth in regions such as Australia and Europe.

India is the dominant market for Alkem Labs and accounts for roughly two-thirds of its total revenue. The US is the second-largest market, accounting for 20% of overall revenue and serves as a key market for the company's international expansion strategy. Other international markets, though smaller, have been growing steadily and currently contribute around 10% to the company's total revenue.

For Jul-Sept, analysts expect Alkem Labs to report stable or slightly improved operating margins. The company's earnings before interest, tax, depreciation, amortisation margin for the September quarter is expected to come in at 22.3–23.0% against 22% in the quarter a year ago. This improvement is attributed to a better product mix, operating leverage and softer raw material costs. The average of estimates of eight brokerages pegs the company's latest quarter EBITDA at INR 8.5 billion, with estimates in the range of INR 7.9 billion to INR 8.9 billion.

Analysts will look for market share gains for the generic Entresto in the US, as Alkem Labs is competing with other Indian companies such as Torrent Pharmaceuticals Ltd., Zydus Lifesciences Ltd., and Dr. Reddy's Laboratories Ltd. Analysts will watch out for any outlook on margins and US sales in FY26.

Of the seven research reports on the company available with Informist, four have a 'buy' or equivalent rating on the stock with an average target price of INR 5,828. Two brokerages have a 'hold' rating on the stock with an average target price of INR 5,151 and one has a 'sell' rating with a target price of INR 4,915 per share.

The stock has risen nearly 8% since the announcement of the company's June quarter earnings on Aug. 12. At 1306 IST, the stock was at INR 5,499 on the National Stock Exchange, down 0.8% from the previous close.

Following are the Jul-Sept earnings estimates for Alkem Labs from six brokerage firms in the descending order by the estimate of net profit:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Nishant Maher

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