Alkem Laboratories Ltd (NSE:ALKEM) Q1 2020 Earnings Conference Call Transcript

Aug 13, 2019 • 01:30 am ET

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Alkem Laboratories Ltd (NSE:ALKEM) Q1 2020 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, good day and welcome to the Alkem Laboratories Limited Q1 FY '20 Earnings Conference Call hosted by Motilal Oswal Financial Services Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes.

[Operator Instruction]

Please note that this conference is being recorded. I now hand the conference over to Mr. Tushar Manudhane from Motilal Oswal Financial Services.Thank you and over to you.

Analyst
Tushar Manudhane

Thanks, Steven. Good morning, everyone. Thanks for joining this call. From Alkem senior management team, we have with us Mr. Sandeep Singh, Managing Director; Mr. Rajesh Dubey, Chief Financial Officer; Amit Ghare, President, International Business; Mr. Yogesh Kaushal, Senior Vice President, Chronic Division; and Mr. Gagan Borana from Investor Relations. Over to you Gagan.

Executive
Gagan Borana

Thank you Tushar. Good morning everybody, and thank you for taking your time and joining us for Alkem Laboratories Q1 FY20 Earnings Call. Yesterday, we have released our financial results and the same are also posted on our website.

Today in this call, we have the senior management team of Alkem to discuss the business performance and outlook going forward. Before I proceed with this call, I would like to remind everybody that this call is being recorded and the call transcript would be made available on our website as well. A brief disclaimer for today's call, today's discussion may include forward-looking statements and the same must be viewed in conjunction with the risks that our business faces.

At the end of this call, if any of your queries remain unanswered, please feel free to get in touch with me. With this, I would like to hand over the call to Mr. Sandeep Singh to present the key highlights of the quarter and strategy going forward. Over to you sir.

Executive
Sandeep Singh

Thank you Gagan. Good morning everyone. I am pleased to share that we have made positive start to the financial year with both our India business and international business delivering a steady double digit year-on-year growth during the quarter.

Our EBITDA margin has also shown a healthy year-on-year improvement of 200 basis point during the quarter, highlighting a continuous efforts towards cost optimization and productivity improvement. This coupled with lower effective tax rate on account of investments made in manufacturing facilities that are entitled to fiscal benefits, they have delivered a robust net profit growth of 36% compared to the previous year.

On the working capital front also, we showed good improvement over the last year which has translated into better operating cash flows during the quarter. Talking in greater detail about the India business, I'm happy to share that as for IQVIA data, for the 12 months ended June 2019, Alkem has gained one rank and now is ranked the fifth largest company in India. This has been achieved on back of continuous outperformance by the company vis-a-vis industry driven by strong brands, formidable product portfolio, extensive marketing and distribution network and an experience