Alembic Pharmaceuticals Limited (NSE: APLLTD) Q4 2025 Earnings Call dated May. 06, 2025
Corporate Participants:
Unidentified Speaker
Raj Kumar Baheti — Director – Finance and Chief Financial Officer
Shaunak Amin — Managing Director
Pranav Amin — Managing Director
Analysts:
Unidentified Participant
Damayanti Kerai — Analyst
Rashmi Sancheti Shetty — Analyst
Bharat Celly — Analyst
Tushar Manudhane — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q4FY25 earnings conference call of Alembic Pharmaceuticals Limited. We have with us today Mr. Pranav Amin, the Managing Director Mr. Shaunak Amin, the Managing Director Mr. R.K. bahiti, the Director of Finance and CFO Mr. Ajay Kumar Desai, the Senior Vice President of Finance. Mr. Nilesh Vadhwa, the Head of International Business and Security. As a reminder, this conference call is only for analyst and 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. R.K. bahati. Thank you. And over to you sir.
Raj Kumar Baheti — Director – Finance and Chief Financial Officer
Thank you. Good evening everyone. Thank you all for joining the fourth quarter as well as annual results call for March 2025. I’m sure you would have got all the financials. But let me briefly take you through the numbers during the quarter. Very pleased to inform you that this quarter our revenue grew 17% to touch 1770 crores. EBITDA is 286 crore which is 16% of sales and it grew by 9%. PBT grew by 5% to 192 crore. It was because of higher tax provision and net Profit is at 157 crore. During the whole of FY25 the total revenue grew by 7%.
6672 crore. EBITDA at 1053 crore is again 16% of sales and 10% growth over the previous year. Pvt. Grew by 10% to 676 crore and net profit is at 583 crore. EPS for the quarter is rupees 7.98 per share. This is for the quarter and rupees 9.07 for the previous corresponding quarter. For the whole year 2425 it is 29.68 per share versus 31.33 per share for the previous corresponding year. That is due to higher other income and deferred tax. Our borrowings are at 1196 crore and debt equity ratio is healthy 0.23. Cash in hand is 83 crores.
At today’s board meeting the board has announced a dividend of rupees eleven per equity share. That is 550% for the financial year. We have a par value of 2 rupees per share. This is same edge was the dividend for the last year 23, 24. Of course this is subject to approval of shareholders at the agm. I would now request Shaunak to take you through the business part. The India Business Trust.
Shaunak Amin — Managing Director
Yeah, so. Hello. Yes, good afternoon everyone. From the India business. We grew by 8% in the quarter with the top line of 545 crores and 6% for the whole year at 239 crores. I think within this quarter we had good growth in couple of key segments which is Gynecology, anti diabetic, ophthalmology, dermatology and anti infective and coffin cold which are two large product segments for us which was struggling this year due to a market slowdown. Both grew at 7 and 11% for the quarter. We had 4 launches during the quarter and 14 new launches this year.
And new launches continue to do well along with a line of robust new launches lined up for this year. The bright spot for the last multiple quarters has been the animal health business. It continues to grow by 19% for the quarter and 21% for the year backed by a basket of strong brands and new launches. I’m also happy to announce that we commissioned a new formulation facility in Kitampur near indoor which will help us augmenting our manufacturing capacity and as well as help it include logistics. I hand this over to Sadhavna for the IBU International business.
Pranav Amin — Managing Director
Thank you. Our IBU business was pretty relatively strong performance in quarter four and I’m quite happy with the performance in terms of that. Our ex US business which is ROW business, had a strong growth with 43% growth. The US business also grew 20% for the quarter driven by volume as well as new product launches. And the API segment returned to growth. Our focus remains on cost optimization initiatives, improving facility utilization and targeted investment in R and D as a key strategic priority. The R and D expense was 9% of sales at 151 crores for the quarter and for the full year it was 522 crores.
We filed five ANDAs during the quarter. We received two approvals and launched four products in the US during the quarter. Cumulatively we have 220 ANDA approvals. We will launch four to five products in Q1 as well. All our facilities are fully compliant that eirs in place. As I mentioned, the US generics grew 20% to 508 crores for the quarter and 13% to 1957 crores for the year. The ex US generics row generics grew by 43% to 375 crores for the quarter and it grew by 18% to 1243 crores. For the quarter, the API business grew by 4% to 342 crores.
Whereas it degrew by 9% to 1133 crores for the year. With that, the next year outlook looks good for all three businesses. And I would like to open the floor for Q and A.
Questions and Answers:
operator
Thank you, sir. We will now begin with the question and answer session. Anyone who wishes to ask a question May Press Star N1 on their Touchstone telephone. If you wish to remove yourself from the question queue, you May Press Star N2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Damayanti Keray from HSBC Bank. Please go ahead.
Damayanti Kerai
Hi, good afternoon and thank you for the opportunity. My first question is for Mr. Baheti, sir. Can you explain the significant jump in inventory and capex for this fiscal year and how we should look at these numbers in coming years? Also if you can explain the R and D, the relatively higher R and D spend during the fourth quarter and again, how should we look at the trend ahead? Thank you.
Raj Kumar Baheti
Sure. No, very valid observations. Part of it I’ll respond and part of it maybe Pranav can supplement it after I finish. So you are right. We have built inventories because we have scheduled multiple launches in this of course the previous year and the launch products or to be launched products stay at us. Inventory at US level is high. You have to keep a backup API another step. So that is high. Plus all manufacturing facilities have now higher level of utilization with multiple products. So inventory tends to go up. Now having said that and there are some inventories which have been built in anticipation of some good launches which are coming in next few months.
But having said that, we are aware that inventory levels have gone up and there will be efforts to rationalize inventory as we progress during the year. As far as Capex is concerned, I think we were in midst of two large CapExes or three large CapExes rather on the domestic side we have commissioned P Tempur. So 2425. We have spent a good amount of money on Pitampur manufacturing facility community. About 200 odd crores. But not all of that was spent in 2425. Some of it was carried forward. We also built a new peptide block for manufacturing peptide at API2 and we have commissioned.
Not commissioned, commissioning is still pending, pending approval. But we have completed putting up an additional line at F3 for injectables. So these have led to larger Capexes going forward? Yes, I think major projects are over and going forward. As of now I can emphasize only the maintenance capexes and regular Capex and I don’t expect a significant Capex R, D. R and D. Actually you know, you can’t look at it. I mean a quarter and quarter basis sometimes filings are more so expense becomes more. But on a yearly basis we have given a guidance of about 500 odd crores and I think we in that range.
That’s from my side. That turnout can supplement my information.
Pranav Amin
No, I think Mr. Vedee has answered the questions. I think first is I agree that R and D can’t be looked at quarter on quarter because it’s project to project and then the filing happens. I think at the start of the year we had guided about 550 crores or so far. Indeed. So we’re around that range with 522. So R& D is okay in terms of the inventory buildup? Yeah, I think we have a lot of launches in the US that have that we’ve done and more are coming up and we built up some inventory for that.
Damayanti Kerai
Yeah. So Pranav, this inventory buildup should we also think in a way that the US administration will shortly come up with tariffs announcement on the pharma side. So is it more to you know, before, before that comes are you also like building inventory? Say like we don’t know right now what will happen on the terraform.
Pranav Amin
No, no, no. Actually no we haven’t. So we’ve actually we’ve discussed this with all of our buyers but the inventory buildup is not because of that. The inventory buildup is there was some launches, one launch, particular launch that was going to happen. We just got pushed back and we had some inventory for that. Apart from that we had a couple of other day one launches. So we built up some inventory for that. As you know when we pick up an account we like to carry a couple of months of inventory but it has nothing to do with the tariffs and what’s going on with the current government policy.
Damayanti Kerai
Okay, so most of the launches for the US market. Right. Or you are also like accounting the row. Okay. And just I think. Okay, continue on that. Again I think coming back to the tariff so we don’t know like what kind of things will come up. But what are your backup plans in case you know if we assume the worst outcome that Indian exporters are imposed under heavy tariffs and then there will be no pass through mechanism. Also so in that scenario what will be fallback option for you? Because I think some of your peers have planned in the US but you don’t have theirs. So what’s your take on it?
Pranav Amin
So to be honest, I’m talking about the whole industry. Forget about lmv. No one has enough capacity in the us Even our peers who have plants in the us it is a fraction of the volume that they are supplying. I think it’s going to be a macro issue that everyone will face it and the buyers in the industry so as to know. I don’t think there’s anyone who’s going to be able to take that because you can take. No one would have more than 5 to 10% of the total US volumes that have capacity in the US.
So let’s wait and see what happens. Right now the government’s trying to work it out. I don’t believe it will be such a drastic step because as I said only about 10% of the volumes can be manufactured in the US. The rest of it is going to be a huge shortfall.
Damayanti Kerai
Okay, before I get back to the queue, can you just point out what will be the maintenance capex or regular. Capex going ahead since we don’t have anything major coming up in say 26 or at least for 26.
Raj Kumar Baheti
Sure. Roughly I’m budgeting about 400, 450 crores. This should include some spillover of expense which will come from those existing products. Projects rather indoor and others included.
Damayanti Kerai
Okay, thank you. I’ll get back in the queue.
operator
Thank you. A reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Rashmi Shetty from Daulat Capital. Please go ahead.
Rashmi Sancheti Shetty
Yeah, thanks for the opportunity. Just a follow up from the earlier participants. So this year also our receivable days will almost remain at the high level only, right? Whatever is at the current stage.
Raj Kumar Baheti
No, I’m not clear. You are talking about the inventory inventory.
Rashmi Sancheti Shetty
Days and the receivable days also.
Raj Kumar Baheti
So inventory bage as I said going forward will taper down and in terms of days it will go down because my business will grow so my denominator will be higher and inventory will come down from these levels. So the impact on inventory days would be had receivables we have been for a long time they have been around 70 between 70 and 80 days. This has gone up slightly on account of last quarter sales and some new launches where the collection is little higher. For the new launches that would also go back to about 75 days or so in next few quarters.
Rashmi Sancheti Shetty
And sir, your short term borrowings have also shot up. Is it because of the same reason of capital working capital requirements which has gone up?
Raj Kumar Baheti
Absolutely. You are spot on.
Rashmi Sancheti Shetty
Okay. And will it reduce in FY26 or it will remain at that level only?
Raj Kumar Baheti
I hope to reduce the borrowings out of the cash flow which I generate from release of working capital and the profit I make.
Rashmi Sancheti Shetty
Okay. And just on from the quarter perspective, so what we are seeing that despite, despite a very decent sales growth, you know, we are still seeing that, you know, gross margins are pretty low during the quarter. So if you can call out the reasons behind it and you know, how should we see gross margins for the entire year of FY26?
Raj Kumar Baheti
So I won’t call it pretty low. Yes, they have fallen from a high of 73, 74% to about 70% plus. But if you have been attending my calls in past few quarters have always said that we are happy or rather we know that it will come down to 70%. So it’s largely because of product mix. So in a quarter when you have a high volume product where the realization is lower or margins are even lower, the impact would be on gross margin. But we are not concerned as the volumes build in and as the new product chips in.
We are okay, we should be okay with it.
Rashmi Sancheti Shetty
So we should assume like you know, whatever for the full year, whatever is the current gross margin within that range only we will be able to maintain next year also.
Raj Kumar Baheti
No, I won’t say that because too early for me to say that because we have large number.
Pranav Amin
Actually this Mr. Bedi, what he had said earlier, Mr. Betty is that margins of around 70% is what we find acceptable. And I think this is what we will look at strive at being around for the. See even last year we had few quarters where it was a little higher because there’s some one time opportunities. But by and large our internal Target is about 70% because all the new launches and the pipes erosion and the higher volumes that we are pushing.
Rashmi Sancheti Shetty
Okay, why I’m trying to understand this is that you know, from last three years our operating margin is at 15%. You know we, we are doing a flat EBITDA margin know from last three years. So what is the scope that in FY26, you know, you know there could be some operating leverage and everything would play out and we would be able to see a good 100 basis point or you know, more than that improvement in the EBITDA margin. If you can give some comments on that.
Pranav Amin
Yeah, so sure, sure. So yeah. So actually in terms of this also I think couple of quarters back I’d given a call and what are the levers to at that time we were at about sub 15%. How do we go back up to like 18, 19, 20% kind of EBITDA levels. And I haven’t given a time frame. But how that will happen is we have these three new facilities, four new facilities out of the two of them are relatively new are the injectables. As we get more capacity utilization in those facilities, as we start getting more volumes out of those facilities that will automatically give a lot of operating leverage because these are not fully utilized right now.
So that’s creating a drag on the ebitda. Number two is the R and D. Also we have optimized R and D spend being from the high of 14%. We come down to about 9%. So that is the second area where we’ll get operating leverage. So with this all this in place, we will see EBITDA margins going up over the next couple of quarters and next couple of years.
Rashmi Sancheti Shetty
Okay. And R and D expenses. Can you guide in the absolute term like you know what you have guided earlier in FY25?
Pranav Amin
Yeah. So I think for FY26 I would say R&D we’ve done about 522. This year our guidance was 550. Next year again we look at about 600 to 650. Depends how the project goes.
Rashmi Sancheti Shetty
Okay. Okay, thank you. That’s it from my side.
operator
Thank you. A reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Rashmi Shetty from Tolup Capital. Please go ahead.
Rashmi Sancheti Shetty
Yeah, thank you for the follow up. So on the US segment, you know, despite we have seen a strong growth on yoy basis but quarter on quarter there is a dip. Despite we have done, you know, four product launches. The reason behind that, are we seeing any pricing pressures still in the base business level? If you can explain that. And on the pricing pressure for the entire year?
Pranav Amin
Yeah. So the pricing pressure remains in the US market and it’s still there product to product. If you look at it, one of the reasons why this is lower and actually you have to put into perspective is that quarter on quarter, in my opinion the volume growth in the US would be far higher. You know, while the revenue growth is 20%, the volume growth will be far higher. The reason is because last year we had a few one time buy opportunities, but there were some products in shortage. And that really gave, you know like a little bit of an outlier kind of a performance.
That is, that is one of the.
Rashmi Sancheti Shetty
Reasons last quarter we had some one time opportunity, right?
Pranav Amin
Last, last Q3 we had some, not much Q4, I’m talking about more of last year. But Q3 also we had some that was just a quarter on quarter shift. You know, because what happens when you have a new product launched, sometimes the buyer takes a lot of the quantity right on day one. You know, they take a couple of months supply. So that’s what happened to us in Q3. So we had little higher than Q3 of some new launches.
Rashmi Sancheti Shetty
Okay. And you already gave the guidance that FY25 will be showing a double digit growth in the US if you have already achieved it now in FY25 you have already tied up more than 15 product launches in FY26 which has been highlighted in the presentation. Low teens growth or mid teens growth in FY26 also.
Pranav Amin
Yeah, to be honest, for all the businesses, if you see the way it’s going, I expect the US business to grow on mid to high teens. It should grow by 526 depending on how the launches pick up and what kind of erosion, which I don’t know but I expect that from what we’re seeing mid teens around 15 odd percent should be good growth for the US market. The row business will continue between somewhere around there growth and the EPI should be about 10% or so.
Rashmi Sancheti Shetty
India business also we will be able to see we’ll come back to that 8 to 10% growth or still we might see some struggle in anti infective segment, antibiotic segment and it would be a single digit growth only.
Pranav Amin
Shauna, you want to take that?
Shaunak Amin
I think for India business I think we’re quite positive to get a double digit growth for the whole year. There might be some quarter to quarter variability based on things like onset of monsoon. But X of that we’re quite confident that we have a plan in place to drive a 10% plus growth.
Rashmi Sancheti Shetty
Okay. Okay sir, thank you so much. That’s it for my side.
Shaunak Amin
Thanks.
operator
Thank you. The next question comes from the line of Bharat from Aquarius securities. Please go ahead.
Bharat Celly
Yeah. Hi sir, thanks for the opportunity. I just wanted to pick your mind. What exactly is happening in the domestic market largely in the Indian sectors? Why the growth is not picking up since last two years and how do you see going forward for FY26?
Shaunak Amin
Yeah. So are you talking about us or are you talking about the industry in.
Bharat Celly
General for Alembic as well as for the industry. If you could give.
Shaunak Amin
Yeah, so I think the answer is in. If you go back, take this number back to 2000, 2001, 2002, 3 onwards. There was significant ramp up in the antibiotic base. So what you’re seeing right now is more of a moderation of the base effect that’s coming into it. So at some point it needs to balance out and I think we’re quite hopeful that both the market should start growing from this point on.
Bharat Celly
And according to you is Janoshadi or Genesis is something which is impacting anti infectors at all?
Pranav Amin
No, no, not right. The IMS data doesn’t say that.
Bharat Celly
So. Okay. And on the US market so we have around 15 launches for FY26. How many you are considering it to be high value and going to be less competition for FY26 at least.
Pranav Amin
It’s tough to say on those launches I see about 20%, 30% could be interesting opportunities. Depends on how many people launch. About 20 odd percent. 20, 30% should be interesting.
Bharat Celly
And does FY26 includes Bozotine as well? That is Bozilier.
Pranav Amin
So Bozotine it is not. You know, it may be there. I think we have a technical issue so it may. May come. You know that’s. I’m not committing to that as yet.
Bharat Celly
And how about adambas that is recognized.
Pranav Amin
We are not there on day one. You have the data with you for which product?
Unidentified Speaker
Yeah, we. That’s. We’ll get back to you offline but.
Bharat Celly
But you are looking it to be a sizable product for you. Sorry, I didn’t get. I beg a pardon, I didn’t get you.
Raj Kumar Baheti
Hello, Sorry, can you repeat the question?
Bharat Celly
Is it going to be a sizable product for us? Adam? Pass.
Raj Kumar Baheti
Decent size.
Bharat Celly
Right. And on injectable we have not seen some exclusive or a big launches coming through. When will be the time when we’ll start seeing those niche ones or the complex ones start occurring for us?
Pranav Amin
I think it’s still going to be, you know, it’s a new area for us. That’s something we’re trying to do, attempting to do. Hopefully let’s say next year or so we will see some limited competition, interesting ones coming up.
Bharat Celly
Next year. 26 it says right.
Pranav Amin
FY27 outside towards end of 26. Early 27.
Bharat Celly
That’s great. Okay, thanks a lot. I will get back in my team.
operator
Thank you. The next question comes from the line of Tushar Manudane from Motila Loswal Finance Financial Services. Ltd. Please go ahead.
Bharat Celly
Thanks for the opportunity, sir. Just on the API side, so at the industry level are you seeing the inventory getting normalized and which is where now we are sort of seeing the revival in growth. That is first question.
Pranav Amin
Yeah. So on the API side it wasn’t a question of inventory per se, it was just pricing pressure and erosion. We lost out some business because a lot of pricing pressure. I think the Chinese are back in the market and even from India. So a lot of pricing pressure. That’s one of the reasons we lost out. We made it up by existing relationships and some of the older products that we had and some new ones. So that’s what compensated for it.
Tushar Manudhane
Got you. As far as the India business is concerned, we’ve been pretty stable in terms of number of misses so safe to assume that this will be the number like 5500 for HY26 as well or do we intend to add any more? Mrs.
Shaunak Amin
It’s pretty much the same. There might be some incremental balancing but no major expansion is expected. Maybe might be a hundred odd people we will add. That’s it.
Tushar Manudhane
Got you. And maybe I missed the remarks or maybe I heard it wrongly, but anything you commented in the opening for the peptides as a product category,
Raj Kumar Baheti
I talked about the block. Manufacturing block is part of capital. Yes. So obviously we’ll be doing some filings and then it will take some time for products to go to the market.
Tushar Manudhane
Okay. Okay. All right. That’s it from us.
operator
Thank you. The next question comes from the line of Damayanti Kai from HSBC Bank. Please go ahead.
Damayanti Kerai
Hi. A clarification on R and D outlook for FY26. So Pranav, you mentioned 600 to 650. So first can you explain where the majority of spend is going? And then I understood earlier that your intention is to keep your R D somewhere, you know, 500 to 550 level. But this seems, you know, higher than what you earlier spoke about. If you can also talk about this, please.
Pranav Amin
Yeah, so I said at the start of the year that we’ll have, we’ll do R and D about 515. We’ve ended up about 522 or so. And next year, as I said, 600 to 650 depends on how the product scores. Amongst that I would say about 30%. Yeah, about 30, 35% would be towards peptides and complex injectables. If you had ophthalmic complex ophthalmics also about 40% would be towards complex products and peptides. This would be the API and OSD, R&D. And when you say peptide in terms of filings, we’d say roughly half would be on Almost half what? 45% of the new filings would be on injectable.
So this would be OSD and little bit on derm and ophthalmic.
Damayanti Kerai
Okay. And I think you mentioned about this peptide opportunity etc and then you have peptide blocks coming in. So is it more to address the semaglutide sort of opportunity which is coming up or what is, what is your.
Pranav Amin
I’ll be honest. Yeah. So wait, tell me a couple of peptides, not just the GLP ones. GLP is one class but there’s a couple of other peptides that we have in our pipeline as well. I said in the call earlier that semaglutide. We are a little late for the US launch. We don’t have the day one but we will be there in some of the row markets. Whereas Tirzepatide is the one we hope to be there on day one.
Damayanti Kerai
Day one in the US was Terzipatide.
Pranav Amin
Yeah. The filing still has to happen. It’s still time and see minus one. It hasn’t happened. But yes, we would like to be there on day one in all markets.
Damayanti Kerai
Okay. Okay. Thank you.
operator
Thank you ladies and gentlemen. That was the last question for today. I would now like to hand the conference over to Mr. R.K. bahati for the closing comments.
Raj Kumar Baheti
Thank you all for joining the call. Pleasure as always talking to all of you. If anybody has any follow up question you, you can always reach out to me or Ajay on a mail or phone call and we’ll be happy to respond. Look forward to see you again next quarter. Thank you all.
operator
Thank you sir. Ladies and gentlemen, on behalf of Alempic Pharmaceuticals Ltd. That concludes this conference. You may now disconnect your lines.