Alembic Pharmaceuticals Limited (NSE: APLLTD) Q3 2026 Earnings Call dated Feb. 05, 2026
Corporate Participants:
Mr. G. Krishnan — Mr. G. Krishnan
Shaunak Amin — Managing Director
Mr. Pranav Amin — Managing Director
Analysts:
Unidentified Participant
Candice Pereira — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Q3FY26 onnings conference call of Alembic Pharmaceuticals Limited. We have with us today Mr. Pranav Amin, Managing Director, Mr. Shaunak Amin, Managing Director Mr. R.K. bharti, Executive Director Mr. G. Krishnan, CFO Mr. Ajay Kumar Desai, Senior VB Finance. As a reminder, this conference call is only for analysts, institutional investors. 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. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. G. Krishnan. Thank you. And over to you sir.
Mr. G. Krishnan — Mr. G. Krishnan
Thank you. Good evening everyone. Thank you for joining the conference call to discuss the financial results for third quarter and nine months ended December 2025. Let me briefly take you through the numbers for the period before handing it over to Shaunak. So moving on, we continued the momentum that we had in the first half of the financial year into the third quarter. Revenue for the quarter grew by 11% year over year, 2876 crores. The quarter saw broad based growth driven by volume expansion, new product launches and increased traction in ex UL markets, offset in part by pricing pressure in US generics and API.
Gross margin was at 72% for the quarter compared to 74% in the previous year. The moderation was primarily driven by change in product mix and pricing challenges, partially offset by cost improvement programs that we have in our international business. Pricing pressure in international generics, particularly in the US and API businesses, persisted during the quarter. These headwinds were mitigated by sustained cost efficiency programs helping us remain competitive in the market. As communicated earlier, our gross margin remained in the operating range of 70 to 75%, so hence the gross margin of 72% for the quarter is something that we are comfortable with.
EBITDA before R and D expenses and exceptional Items stood at 464 crores for the quarter representing 25% of revenue compared to 23% in the previous year, again reflecting an improved operating leverage and prudent management of discretionary spending during the quarter and hence the year. On year, EBITDA growth was at about 20%. R&D expenses increased by 33% year over year to 165 crores for the quarter. And this is in line with the full year guidance of 600 to 650 crores that we had provided earlier. Profit before tax for the quarter but but before exceptional Items grew by 15% year on year to 205 crores again reflecting underlying revenue growth and margin improvement that we have seen during the quarter.
Profit after tax for the quarter before exceptional Items grew by 21% year on year to 168 crore. Pursuant to the changes under the new Labor Code, the company has recognized a one time provision of 42 crores towards employee benefits. However, this does not impact operating performance or any immediate cash flow. Adjusted for this exceptional item pertaining to the Labor Code related impact, reported profit after tax was lower by 4% compared to previous year. Net working capital stood at 2944 crores broadly near the September levels. Net debt marginally declined to about 1213 crores compared to the previous quarter.
Moving on to the nine month results, revenue grew at 12% year on year to close to about 5500 crores. Again growth was broad based across all the businesses. EBITDA before R and D spend in exceptional items for the previous for the period was about 1391 crores which is 25% of the revenue and resulting in a 25% year over year growth. This reflects strong revenue growth and better utilization of facilities. Of capacity utilization across facilities. EBITDA post R and D expenses was 921 crores which is 17% of revenue and PAD before exceptional items for nine months grew by about 22% to 505 crores. While I have given a broad overview of the financials for the quarter, I now request Shaunagh to take you through the India Branded business. Over to you Shanook.
Shaunak Amin — Managing Director
Yeah, thank you Krishnan. The India branded delivered a 6% year on year growth reaching a revenue of 625 crores for the quarter. Gynecology, Ophthalmology, Animal Healthcare segments have demonstrated accelerating performance. Our anti infective segment grew in line with performance and we have launched successfully four new products in this quarter. I will now hand over the discussion to Pranav for
Mr. Pranav Amin — Managing Director
Thank you Shauna. I’m pleased to present the performance for the third quarter of FY26. The Q3 performance reflects continued momentum as we strengthened our presence across key markets and achieved growth in both formulations and API. The performance was driven by a 36% growth in row markets reflecting our strategic geographic expansion and focused execution. The US business grew 6% supported by higher volumes and new launches in the last few quarters despite continuing pricing challenges. We have executed few out licensing and manufacturing agreements as well that support injectable and onco capabilities. These strategic contracts along with the Announced products will help us scale utilization in these new facilities over the next 12 to 18 months.
We continue to maintain sharp focus on profitability and operational excellence. We filed one ANDA during the quarter and cumulative ANDA filings were at 270. Our R&D investment is approximately 9% of revenue and it demonstrates a sustained commitment to pipeline development and long term value creation. The focus remains on complex and differentiated areas such as injectables, peptides, oral solids and drug discovery with an emphasis on early entry opportunities including first to file, day one and NCE one minus launches. We received seven approvals in the U.S. we launched two approved products in the U.S. during the quarter and humidity have 23 ANDA approvals and 2020 tentative approvals.
We hope to launch another four to five products in the fourth quarter of the year. We are also on track to launch our first branded product in the US in February 2026. Sometime in Q4 we’ll do it. Pivia is a first line oral antibiotic targeting uncomplicated urinary tract infections in women with a track record of low treatment and emergent adverse events. This will help us target the this particular market in the US While the launch will have an impact on near term profitability, we expect the product prescription share to scale up during the course of next 12 to 18 months.
We are confident of the medium to long term market opportunity that the product will help us capture. Moreover, this helps us with a strategic shift towards part branded. We can ramp up hopefully in the years to come. With this I would like to open the floor open for Q and A.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue you may press STAR and two participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Tamayanty from HSBC please.
Unidentified Participant
Hi good evening and thank you for the opportunity. My first question is in India business. So Seanus we have seen some improvement but the growth seen so far is still below the market growth rate. So when we when we are anticipating Alembic India growth to catch up with the market growth and what kind of progress you have seen versus last quarter when we spoke.
Shaunak Amin
Yeah, so you know the India business is quite complicated and it’s some of a lot of moving parts and to grow it on a sustained basis requires a lot of interventions to make it happen. I think at this point in time, I think Q1 of the coming financial year is where we feel we should be back in line with the market growth rate.
Unidentified Participant
Okay. So whether that will be driven more by improvement in processes or you are looking forward for some some meaningful launches etc, which can really help you to catch up with the market growth rate.
Shaunak Amin
So I mean obviously launches continue to happen, but I think we’re basing this to be more back of operational execution to drive this growth in Q1.
Unidentified Participant
Okay, so say next fiscal is the timeline where you think your India growth will converge with the market growth rate?
Shaunak Amin
Yes.
Unidentified Participant
Okay. My second question is to Pranav regarding your upcoming launch of Libya in the us so this is a branded product. Right. And in this phase I think what we had seen in the market, there were earlier launches which were good in terms of efficacy but somehow there were problem on the reimbursement part, etc. That’s why many brands went out of the market. So what are your expectations in terms of reimbursement for this product and what preparation are currently underway and what makes you think like this will be a success compared to other AMR products which were there in the US market?
Mr. Pranav Amin
Yes, I think success is relative. Right. I think what we’re trying to build is just some kind of incremental business. As you know, we’ve said given the details about the licensing, it wasn’t very expensive. It’s a higher royalty outcome for us. We believe there’s quite a few. There’s a couple of products already in the market and we can position ourselves well. There’s some new ones which are very expensive. There’s some older ones which are genericized in terms of efficacy. I think we sit on a sweet spot. So I think let’s see how it goes. It’s still early days. I think let’s take a couple of quarters to see where we stand. I think in terms of the reimbursement and the CO pays and we think the team is US team is working on that with the respected customers and the bodies.
Unidentified Participant
Okay, but it’s on track for launch this quarter, right?
Mr. Pranav Amin
Yes, yeah, it’s on track for launch in this quarter. I think the Mr. Training, the Mrs. Are being onboarded right now. The material is being shipped to the US so. And the material is already. So I think we’re on Track for a Q4 launch.
Unidentified Participant
Okay. And my last question is on US business again where we continue to see challenges on the pricing part. And then you mentioned some contracts on the Injectable and onco safe, which might help you in coming quarters, etc. So besides first, when these contracts will start appearing in your numbers and when you think US will be back on growth track.
Mr. Pranav Amin
So I think US is already on the growth track as we speak. We are growing in terms of volumes. We’re growing quite a bit with the pricing pressure. You take it. So with that, it’s 6% last year Q3 we had a higher base because we had a few more launches in Q3 of last year, big launches that bumped up Q3 last year. But I expect the US business to grow between 10 to 12% on a full year basis. And I think we’re well on track for that. We have a few interesting launches happening in Q4 as well.
Unidentified Participant
Okay, that’s helpful. Thank you.
Mr. Pranav Amin
Thank you.
operator
Thank you. Before we take the next question, we would like to remind participants who wishes to ask a question, you may press star on one. Now the next question is from the line of Candice Pereira from Solid Capital. Please proceed.
Candice Pereira
Yeah, hi. So just to clarify, The R is 165 crores, right? For this quarter?
Mr. Pranav Amin
Yes.
Candice Pereira
Okay. And will it remain in this range for the next year as well? So that’s why.
Mr. G. Krishnan
Your voice is a bit muffled. Muffled. If I understand the question is, is it going to be at the same level for next year?
Candice Pereira
Yes.
Mr. G. Krishnan
So you know, next year we will guide sometime when we start the next year. But for the current year we have, we’ve seen it about 8 to 9% of total revenue as the R and D spend and it’s been at the similar levels for Alembic in the last few years. So for next year specifically, we will discuss at the time when we do the quarter four results.
Candice Pereira
Okay.
Mr. Pranav Amin
By and large, I think we will be along the same numbers between, we’ll be between that 8, 9% kind of range generally.
Candice Pereira
Okay, got it. And the other income is slightly higher this quarter. So is there any forex gains and how much is it?
Mr. G. Krishnan
Yes, and forex gain should not be big. I think you should say that. So, yeah. So the other income is about 15.5 crores and most of that will be forex gain.
Candice Pereira
Okay. All right. Yeah, I think. Yeah, that’s a bit from my side. Thank you.
Unidentified Participant
Thank you. Participants who wishes to ask a question may Press Star on 1. Now, Participants who wishes to ask a question, we Press Star on 1. The next question is from the line of Rahul from iifl. Please proceed.
Unidentified Participant
Yeah, thanks for taking my question, sir. On the domestic business, can you talk about the challenges which we are facing because our domestic business growth has been quite tepid over the past three to four years. So we have been underperforming market growth and in the past as well we have talked about growth improving but we haven’t seen that playing out. So just in terms of how our domestic business is shaping up to be, do you think that with the kind of scale up in investments which we were doing for the US business over that period, maybe the investments on the domestic business have been on the lower side due to which now we are struggling to grow even in line with market?
Shaunak Amin
No, I think Rahul, I mean I don’t think there’s a issue of underfunding the business. I mean if you want to talk about something that maybe we were too conservative on, I think the whole doctor Spend scenario in the context of ucmp, possibly we were too conservative and extremely sensitive to it relative to the market. That’s what I understand. So maybe that was one of the factors which has led to this. I think X of this. I think historically Alembic has not been a high growth company period. But I think we wanted to fix the fundamental issues that have been plaguing us.
I think that compounded with the post Covid drop that we saw rather the, the COVID bump that we saw for a large part of our large brands in the business, I think dealing with those when those markets prepped, I think it compounded the whole view. But I agree with you. I think the growth has been tepid but I think we’re quite confident of this going forward at this point in time.
Unidentified Participant
Sure sir. So some of your peers have also been actively expanding their teams in India in order to let say drive penetration in some of the smaller tier 2, tier 3 markets. So while we adhering to the ethical norms might have slightly impacted our growth, but do you think that there is a need for us to expand our field force in order to drive better penetration at a market level which could help us to drive better growth going forward?
Shaunak Amin
I personally don’t think at this point we are looking at any further large expansions. But that being said, yes, there is a large opportunity in the India market. Assuming if things start going as per expectations operationally, I mean we would consider and look at those plans to take it forward. On that point of the ucmp, I don’t think it’s a small bit. I think it’s very large bit relative to there are extremes of this. So I think that’s a large part of many companies where there is extremely High growth.
Unidentified Participant
Okay, sure, but, but that, that then if that is your stated strategy, that’s not going to change going forward. So then our domestic business in the best case scenario would let’s say grow only in line with market or continue to slightly underperform market.
Shaunak Amin
I think Rahul, we can take this offline. I think it’s a lengthier discussion because it’s. We’re talking of multitudes of company. But yes, I think the alignment to ucmp, possibly more companies are sensitive to it today than they were in the last two years.
Unidentified Participant
Okay, sure. And question with respect to the U.S. business. So while we have been aggressively investing in terms of R and D, so FY25 we saw a slowdown in our R and D spend but again this year there has been an acceleration. So when do we actually see our US growth picking up from whatever complex opportunities which we are pursuing? So talked about injectables, peptides, even drug device combinations. So just some outlook in terms of how do you see the US trajectory over the next two to three year period? Because as I said we have been aggressively investing behind this business.
Mr. Pranav Amin
So the US business has been growing. I think what’s happening is due to increased competition and competitive intensity we are finding that the opportunities are becoming less. Having said that, in terms of volume, we continue growing and I think with some of the injectables that we’re doing, we’ve got few injectable opportunities, we’re getting a few more. And I think over the next two years is when we should see a lot more of that coming up. I think ophthalmic, we’ve done a pretty good job and we’ve got a lot of market share in most of the ophthalmics that we’ve got and a lot of leadership positions over there and injectables, the general injectables and complexes also, we’ll do that over the next years of couple. Couple of years once we get the additional approvals.
Unidentified Participant
Okay, sure. So do you think that the US business can grow at a mid teens kind of a constant currency rate going into 27 and 28?
Mr. Pranav Amin
Yeah, it could. I think I would say, you know it’s. It’s tough for me to say. Ideally yes, I would like to go into mid teens but yeah, like between 10 to 15 at least. I would expect the US business to continue growing every year.
Unidentified Participant
Sure. And one last question from my side with your permission. So with respect to this branded product launch, what kind of a margin drag should we factor in? Let’s say for an initial period till the product starts scaling up.
Mr. Pranav Amin
So I think till the product starts scaling up there would not, we wouldn’t have any margin because you know you have, until it gets to a certain point you have your Mr. Cost, you have the royalty payments, you have everything else. So I think, let’s see, I think let’s wait for a couple of quarters and you guys will all get a much better idea. We will also get, get a much better idea how quick the ramp up is happening.
Unidentified Participant
But let’s say if we had to budget in the OPEX for this business, what kind of opex do you envisage for this business for let’s say 527.
Mr. G. Krishnan
So Rahul, I think the way you should look at it is that overall company level, the margin is something that you should factor and what we are seeing is that the core business margin have shown improvement in the current financial year and with better capacity utilization in the existing facilities that we have put the margin expansion is something that we should see coming out in the next few quarters. Now we are like Pranav said, we don’t know exactly where we will land on the top line. So hence the margin pressure on PBR launch is something it’s not possible for us to predict at this point. But from a modeling perspective you could assume that the margin expansion will be sort of a cushion for the expenses that will come from pvm.
Unidentified Participant
Okay. Sure sir. Thank you. I will join back the queue.
operator
Thank you. Participants who wishes to ask a question may press star in one now. Participants who wishes to ask a question may please press star and one now. As there are no further questions from the participants, I would now like to hand the conference over to Mr. G. Krishnan for his closing comments.
Mr. G. Krishnan
Thank you for joining on the call for third quarter. Please feel free to reach out to the team for any clarifications or questions you might have. And thank you once again. Have a very good evening.
operator
Thank you. Ladies and gentlemen, on behalf of Alembic Pharmaceuticals Ltd. We conclude this conference. Thank you for joining us. And you may now disconnect your lines.