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Informist, Tuesday, May 26, 2026

By Ruchira Kagita

MUMBAI – Alkem Laboratories Ltd.'s net profit for the March quarter is likely to see steady growth on year but fall on a sequential basis. The company's US sales are expected to be healthy, with the depreciation of the rupee providing additional support. Analysts will focus on the company's guidance relating to operating expenditure.

The consolidated net profit of Alkem Laboratories for the three months ended March is seen rising 48% on year to INR 4.54 billion while its revenue may rise nearly 13% to INR 35.40 billion, according to an average of estimates from five broking firms. Batlivala & Karani Securities India Pvt. Ltd. has the highest estimate for the company's net profit at INR 6.17 billion. The lowest estimate of INR 3.67 billion is from ICICI Securities Ltd.

On the revenue front, too, Batlivala & Karani Securities has the highest estimate of INR 35.98 billion while Motilal Oswal Financial Services Ltd. has the lowest prediction of INR 34.77 billion.

The pharmaceutical company's consolidated earnings before interest, taxes, depreciation, and amortisation are seen around 32% higher at INR 5.18 billion, according to an average of estimates from four brokerages. A calculation based on the revenue and EBITDA estimates suggests the company's EBITDA margin could be around 14.6% in the quarter under review. The margin could come under pressure from higher operating expenses linked to the company's medical technology arm and contract development and manufacturing organisation business, Nuvama Wealth Management said in its report. The brokerage expects the margin to be unchanged on year at 12.7%.

Sequentially, the company's revenue, net profit, and EBITDA are all expected to decline. However, the fall is attributable to the March quarter being traditionally weaker for the company, brokerage Equirus Securities Pvt. Ltd. noted in a report.

The pharmaceutical company's US business is expected to do better than its India business, according to ICICI Securities. While growth in its domestic division is expected to be 12% on year, the US segment is seen growing 14%, according to the brokerage.

Alkem Laboratories had announced plans to acquire 55% stake in Switzerland-based Occlutech Holding AG, which focuses on manufacturing cardiovascular equipment. The business is expected to see a compounded annual growth rate of 14% over the next five years based on estimates from existing products, and it is seen contributing INR 6 billion to the revenue of Alkem Laboratories. The Occlutech deal is likely to be closed by the end of June. The outlook on additional synergies from the acquisition would be of interest to analysts.

In terms of expenses, the management sees an investment of INR 2 billion-INR 3 billion more in its medical technology business in the next 3-4 years. Investors will be focusing on commentary regarding the company's plan to increase its investments.

Over the trailing quarter, Alkem Laboratories launched its semaglutide injections under the brand names "Semasize", "Obesema", and "Hepaglide". These launches are likely to support the company's bottom line and margins from the June quarter.

For the financial year 2025-26 (Apr-Mar), the company is likely to see its consolidated revenue rising 13% to INR 145.86 billion, according to Motilal Oswal. The brokerage expects the company's net profit to grow 15% on year to INR 24.91 billion. The management had earlier guided for a double-digit increase in revenue for FY26.

Vikas Gupta, chief executive officer of Alkem Laboratories, has resigned and will continue in the post only till Jun. 30. The probability of the board of directors appointing an external candidate as chief executive is not high and the company will most likely follow a promoter-led model in the near term, Nomura Equity Research noted in a report. Going ahead, Managing Director Sandeep Singh may take on more responsibilities, the brokerage said, adding that Gupta's exit is not expected to have a major impact on the company's outlook or earnings.

Since Alkem Laboratories reported its December quarter earnings on Feb. 13, the stock has remained largely steady. Tuesday, the stock closed at INR 5,380, down 0.4% from Monday, on the National Stock Exchange. The company is slated to release its March quarter and full-year earnings on Thursday.

Of the eight brokerage reports on the company available with Informist, four have a "buy" recommendation on the stock with an average target price of INR 6,534. This implies an upside of 21% from the current market price. Four broking firms have a "hold" call.

Following are the estimates for the March quarter earnings of Alkem Laboratories, in INR billion, from five brokerages in descending order of net profit:

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Edited by Rajeev Pai

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