Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Alembic Pharmaceuticals Limited (NSE: APLLTD) Q4 2026 Earnings Call dated May. 15, 2026
Corporate Participants:
Mr. Pranav Amin — Managing Director
Mr. G. Krishnan — Chief Financial Officer
Analysts:
Janhvi Mishra — Analyst
Rahul Jivani — Analyst
Tushar Manudane — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4FY26 earnings conference call of Alembic Pharmaceuticals Limited. We have with us today Mr. Pranavameen, Managing Director, Mr. G. Krishnan, CFO, Mr. Ajay Kumar Desai, Senior Vice President, Finance and Ms. Isha Lamba, General Manager, Corporate Development and Investor Relations. 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 this conference call, please signal an operator by pressing Star and then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Pranav Amin, managing Director. Thank you. And over to you sir.
Mr. Pranav Amin — Managing Director
Thank you and good evening everyone. Thank you for joining us at the Alembic Pharmaceuticals Q4 and FY 2020 investor call. I am joined with Mr. Krishnan, the CFO as well as members of the management team. I will begin with a brief perspective on the environment, performance across our businesses and strategic actions and the directional view for FY27 and then Trishan will take you through the financial performance for the quarter and the full year ahead. The external environment continues to remain dynamic across the markets.
Pricing pressure, competitive intensity, regulatory expectation and supply chain volatility continue to shape the performance. In this backdrop, outcomes are being driven less by market tailwinds and more by execution, quality, portfolio choices, cost discipline and capital allocation. Our approach through the financial year has remained anchored on four clear priorities which is maintaining our gross margin, protecting the core business, improving operating leverage and investing selectively in future growth platforms while sharpening operation excellence across all the businesses.
So while FY26 included strategic investments and some quarter specific impacts, the broader direction remains clear. We are working to build a stronger and more execution led platform for the medium term starting with the India business. The business delivered 4% year on year growth. The quarter was supported by price led growth and new launches while within the portfolio specialty therapies and animal healthcare continued to perform relatively better. Specialty growth was supported by gynecology, gastrology and ophthalmology while animal healthcare grew strongly and remained an important growth driver focus Brands also continue to grow ahead of the broader portfolio which is important from a quality of growth standpoint.
The indoor facility is fully operational, capacity utilization is improving and this gives us a better base for supply reliability, logistics, operating efficiency and future scaling. We also continued the portfolio refreshed with new product launches during the quarter and that should support better growth quality moving forward. For the full year India business delivered a growth of 5%. Operationally the India business is on a firmer footing and we continue to strength continue to strengthen the field operations and productivity metrics.
Focused governance to drive performance the Q4 international business growth remained positive with US showing growth led by volumes and new launches. The US market, the ex US markets also continued doing well and grew 20% for the year whilst the quarter was muted but the full year grew 20%. The quarterly performance of EX US has mainly muted due to a higher base and one off variances. We’re confident of continuing this growth in the ensuing quarters. We continue to build the pipeline and launch platform.
During the quarter we had six new launches in the us, further ANDA filings and approvals and progress on partnership led opportunities. Our new facilities are getting better utilized and we foresee much greater volumes coming out of these facilities in the current year. The broader international business remains a key growth engine but the business will require sharper product selection, disciplined launch and tighter control on a yearly basis. I think we are pretty happy with the operational outcomes and the way the business has panned out and I’m confident that moving forward this year will show some of these results.
The API business delivered a modest growth in Q4 driven primarily by volumes while pricing remained a headwind. This is consistent with the broader market environment we have discussed in earlier calls as well. Our response continues to be on cost improvement, portfolio choices and capturing opportunities where our development and manufacturing strengths provide a better economic profile. At a broader level we are consciously moving towards a more execution led strategic model. This means higher focus on quality of portfolio and launches, better asset utilization, stronger cost and working capital discipline and selective investments and platforms.
One part of the strategic pivot is a US branded business approach. We view this as a calibrated strategic entry with a focused go to market model and measured investment. The objective is not rapid scale but to build a credible and sustainable specialty platform over a period of time. While there may be a short term impact on profitability which should get offset from improved operating leverage in the core business. In terms of the FY27 directional outlook, we are planning a pragmatic view of the external environment.
We are not assuming any major easing in pricing pressure, competition or supply chain volatility, at the same time we do see room for performance through internal levers on the international business. We expect product launches to be phased through the year with a few meaningful Day 1 launches in the first couple of quarters and better volumes from the existing portfolio. We also expect the US branded business to scale up supported by selective product additions to strengthen the franchise. New product additions, deeper collaborations and expansion into new territories across Europe and Asia will also support the ex US markets.
We expect the India business to improve in growth momentum and hope to be closer to market growth with a renewed approach to stem and focused brands. The international generic business are also likely to grow in a decent amount by low to mid teen range and the API business to grow in the high single or low double digit growth. This will translate it to an overall top line consolidated growth to be in the low double digit range. R and D investments are likely to be around 750 to 800 crores as we calibrate our portfolio and structurally move towards higher value opportunities, focusing on NC minus one first to file and day one molecules while being cautious in global geopolitics and related developments.
The focus will be not only on growth but on the quality of growth, better capacity utilization focus, cost savings, working capital and investing in a differentiated product portfolio. With that let me hand over to Krishan who will take you through the financial performance for the quarter and full year.
Mr. G. Krishnan — Chief Financial Officer
Thank you Pranav. Good evening everyone. Let me take you through the financial performance for quarter four and then the full year of 2026 and give you some flavor of FY27 as well. For the quarter, revenue from operations stood at 1848 crores up by 4% year on year. The quarter reflected resilient performance in the top line supported by new launches in the US volume led growth in APIs and animal health partly offset by pricing pressure in certain segments. On the operating front, EBITDA before R and D stood at 455 crores up by about 8% year on year with core margins at almost at 25% compared to 24% in the previous year same quarter.
This reflects better business mix with slightly better gross margins at 71% but staying in the previously mentioned range of about 70 to 75%. The EBITDA is after net operating expenses of the US branded business which started operations in quarter four. Going forward we continue to expect the operating leverage improvement to offset the new offset the launch based margin impact of the US Branded business. R and D spending for the quarter was at 209 crores compared with 151 crores in the same quarter last year representing 11% of revenue versus 9% last year.
The increase was driven by peptide related development activities that we did during the quarter and higher filings in US and EX US markets compared to the previous year. This we believe will help us position for growth in the subsequent periods. At the profit level, reported profit after tax for the quarter stood at 203 crores. The quarter included an exceptional item of 24 crores as well as one time tax adjustments of 101 crores which is a positive impact relating to net credit and tax regime related adjustments.
From a balance sheet perspective, net working capital stood at 2000 almost close to 3000 crores, an increase of about 50 crores versus the December levels mainly driven by receivables that are not in due. Gross Debt was at 1361 crores broadly in line with the December levels for the full year. Revenue grew by about 10% year on year supported by growth across businesses while absorbing a higher level of investment in R and D and strategic growth initiatives. For FY26, EBITDA before R and D and exceptional Items stood at 1846 crores representing 25% of revenue and a 20% year on year growth.
This reflects growth in the business with better operating leverage across facilities. EBITDA after R and D was at 16% of revenue. Profit before tax and before exceptional Items grew at 10% broadly reflecting the revenue growth that we had during the year. Reported profit after tax grew at 16% to 675 crores. Overall, FY26 was a year of steady core operating delivery alongside higher investment in the pipeline and future growth platforms. While some of these investments have a near term impact on reported profitability, they are very well aligned to improving medium term growth, quality and strategic positioning.
As Pranav mentioned earlier, our current view for FY27 is directional and based on current visibility. At a consolidated level we are targeting a low double digit growth, top line growth alongside the growth. Our focus will remain on margin protection, working capital management and capital efficient execution. We expect margin improvement from core business to give enough headroom to support the launch phase of US Branded business. With the launch of pbr we expect the branded business franchise to scale up to a meaningful revenue profile in the next few quarters.
We expect capital expenditure for the year to be in the range of 300 to 350 crores, primarily towards capacity debottlenecking and replacement CAPEX. In summary, FY26 reinforced resilience while FY27 we believe is focused on maintaining the momentum and winning through execution. With that we can now open the floor for questions and answers.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press STAR and then one on Their touchstone phone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles again to register for a question. You may press star and then one. Now, Participants, you may press star and then one to ask a question.
Your first question comes from the line of Janhvi Mishra from Green Portfolio Private Limited. Please go ahead. Ma’, am. You’re sounding a lot distant right now. If you’re using a speakerphone or any external headset, may I request you to use a handset, please?
Janhvi Mishra
Yes. Hi. Am I audible now?
Operator
This is much better. Yes, please go ahead.
Janhvi Mishra
Yeah, yeah. Good evening, everyone. So, actually I would like to ask about the F2 and F3 facilities that remain underutilized pending FDA approvals. Like, could you tell us roughly how much cost these facilities are adding to the PNL every year without corresponding revenue? And at what point, whether through our own product approval or the contract manufacturing deals that we have signed, do these facilities start covering their own cost? And what is our internal timeline for that?
Mr. Pranav Amin
So we don’t give facility wise breakup, but I can just give you a flavor of what’s happening. I think both F2 and F3 are working at a much higher occupancy level than they used to. We’re seeing more meaningful contribution from these. If you see F3 has multiple lines, right? And I think the ophthalmic line is already chock a block. In fact, we’re doing an expansion of the ophthalmic line because it’s already at full capacity. In terms of the other two lines in F3, those are also about 40 and 60% capacity utilization for both.
In terms of F2, the injectable line and OSDA both working at a decent amount, we have a few limited competition opportunities coming, which is what is going to enable them and use these facilities. So I think the unabsorbed overheads of both these are not as much of an issue for us. They may be. It’s too small a drag in the whole scheme of things. But it’s more important for us to keep some headway in these facilities as we have some important day one launches coming from these facilities, as well as we’re seeing a lot of opportunities for product launches in the next couple of quarters.
Janhvi Mishra
Okay, sir. And sir, of the contract manufacturing deals that are already signed for F2, F3, like, are any of them exp expected to generate meaningful revenue in 27 itself? Or like is it more of a FY28 story?
Mr. Pranav Amin
No, it’s already started. I think some of the licensing and some of the contract manufacturing is in progress. So we’ll see part contribution from that in FY27 itself.
Janhvi Mishra
Okay. Okay, thank you so much.
Operator
Thank you. Our next question comes from the line of Rahul Jivani from iifl. Please go ahead.
Rahul Jivani
Yeah, hi sir, thanks for taking my question. Sir, can you call out what kind of an impact you saw in the quarter from the investment into the US specialty business. So is there any drag sitting on the current quarter’s margins because of Pivia and how do you see that going forward as well into FY27? So that’s my first question. Yeah.
Mr. Pranav Amin
Yeah, thanks Rahul. Yeah. So there was a drag in the quarter due to the alembic therapeutics business which is the sub that has launched the Pivia product. Once I finish I’ll let give a direction and Krishnan will give you further details. So there was a drag on the business because of that. I think the product just got launched in February so we had taken up some of the costs. I think I expect another quarter or two of drag, the drag coming. I think by the end of the year we should start seeing a decent contribution and we think the last couple of quarters, last quarter is when we’ll see it starting to turn around.
It’s an interesting area only thing it’s branded so it does take more time to get the doctor habits to change. But we’re quite confident, I think the initial trend is quite healthy. So I think yeah there will be a drag for another quarter or two. Krishan, you know.
Mr. G. Krishnan
Yeah, so on the specific drag, I don’t want to put a number to this then you know it becomes a continuous discussion on you know, what’s the product level margin that we’re going to disclose or directionally if you see for the full year we have been able to maintain the margins for the quarter there is a bit of drag coming in from the higher R and D spend as well. So I think from a, purely from a modeling point of view I would take about 100 to 150 basis points of impact coming from Pibya, from the branded business in U.S.
And we believe that the margin trajectory for FY27, the core, core EBITDA margin that comes from the generics formulations and API business should be more than sufficient to offset this impact.
Rahul Jivani
Sure sir. And sir, on R and D this quarter we saw an increase, you said that the increase was on account of Development. But can you talk about in terms of how do you measure the R and D productivity, particularly for the US business? And, and why I say so is because when we were benefiting from certain opportunity in the US at that point in time, our annual R and D spend was around 650 crores which we had moderated over last couple of years to let’s say closer to 550 crore, kind of an annual number.
Now for next year as well, we are again guiding for increase in RMD spend to 758,800 crore. So just in terms of how do you measure productivity of this R and D investment? Because the high R and D investments are in fact driving your reported EBITDA margin.
Mr. Pranav Amin
Yeah, Rahul, a good question actually. So a few things. So first of all, the Q4 was a little bit of an outlier at 11% of sales, a little higher than we would have liked to be. You’re right. Historically we have gone up to about 14, 15% of revenue as R and D spend, I think. But we had tapered it down last couple of years. I think what we’re doing is, I think the quality of the filings that we’re doing is also going up, which has caused some higher spend. But moving forward for the year, I don’t expect it to be at 11%.
It will come back down to about 9% again and I think in an absolute amount we’ll be at that 750 odd crore level. The reason why this last quarter was still higher is because, because we had few selective complex and peptide developments which were a little more expensive. That’s what created a bump. But I think in terms of how we measure it, I think we generally have an IRR for each of our R and D projects. That’s what we base our calculations on and what we think makes sense as it’s getting more competitive, development cost is also getting more expensive.
So the threshold IRR has come down, but we see some opportunities and that’s how we’re measuring. We’re measuring it by opportunity to opportunity. I think the only way we can grow is if we do have products in the market and hence we will not go up to the 15% levels. But I think it’s 8 to 9% of revenues where we’ll be at.
Rahul Jivani
Sure, sir. And you said you measure R and D productivity through IRR. So let’s say over by 20 to 23 or 24, the R& D spend, which we would have done at that point in time, what kind of an IRR would those spends would be generating as of now. If you can share some numbers.
Mr. Pranav Amin
Sorry, can you repeat? So it’s tough to say because I think what’s happening is a lot of the filings that happen there especially from the new facilities. Let’s say the Tinibs and everything they’re all late expiry. I think the whole point of the Tinibs facility was that you know it’s we were locking in some of the day ones. I think you’ll see one of them one launch happening in the end of this quarter. So it’s a tough to put it all together. I think as I mentioned the returns came down compared to the returns that we were seeing pre2020.
The returns were large. That’s one of the reasons why we tapered down some of the R and D costs as well.
Rahul Jivani
Sure sir, last question from my end before I join back the queue. You talked about FY27 guidance from a top line growth perspective. Can you provide some color in terms of EBITDA margins as well? Given that we will have the drag of PVR this year while on the base business F2, F3 will see an improving utilization by the end of the year. So do you think you can improve margins over FY26 levels or we should be baking in flat margins versus
Mr. Pranav Amin
It’s a good question Rahul. So I think what’s going to happen in my is the way I see the business is that the pivot drag as I mentioned by the end of the year it will not be a drag anymore and for the rest of it will be covered up by the core business and the business growth that we’re seeing. I think we have a few interesting opportunities in the US. I expect the US business to grow between 10 to 15% at least. ROW will continue the growth at 15 plus percent. API will be closer to the 10% growth and India we hope that some changes will get to market growth.
So with all this we’ll have a high contribution in terms of capex also we don’t have too much this year. So I think we will see definitely see an improvement in the margins this year. I expect as I mentioned at some point we have to go back up to the 20% kind of EBITDA margins over a two, three year period and I expect that this year is going to be a good year that we will start seeing improvement in the margins as well.
Rahul Jivani
Sure sir. Are we quantifying any number for FY27?
Mr. Pranav Amin
No, no, I’m not giving any guidance. I Think let’s see how the first couple of quarters go and then we’ll get an idea.
Rahul Jivani
Sure sir, thank you. I will join. Magnificent.
Operator
Thank you. Before we take the next question, a reminder to all the participants. You may press star and then one to ask a question. Our next question comes from the line of Tushar Manudane from Motilar Oswal Financial Services. Please go ahead.
Tushar Manudane
Thanks for the opportunity sir. Just on your US guidance of 10 to 15% is INR terms. Right? So 5, 6% depreciation is what is currency. Depreciation is what is baked in. So effectively 7,8% growth in constant currency terms. Is that the way to think about?
Mr. Pranav Amin
Yeah, I think again it’s not a guidance but just the way I see the business right now we’ll definitely have growth in the market. Yeah, that’s one way of looking at it I’m saying. Yeah. In terms of INR terms I mentioned 10 to 15%
Tushar Manudane
And so on peptide side like what kind of investment we are envisaging in terms of RND and in terms of Capex separately.
Mr. Pranav Amin
So Capex is all done. I think we’ve already completed the capex for the Peptides. This was a filing that had to happen. So the batches and it’s important, it’s a big filing so hence we had some cost related to that. Moving forward we will not have as many such costs I think as and when a product comes into development. But this was an outlier because the batches were conducted and there was an NC minus one filing.
Tushar Manudane
So how many filings are we sort of thinking on Peptide? Maybe over the next 12 months
Mr. Pranav Amin
We’ve got a couple. I think the portfolio is about five to six that we have. I think two of them are filed already and the rest are going on.
Tushar Manudane
And sorry for my ignorance but how much Capex we have already done for the states?
Mr. Pranav Amin
I think, I think we haven’t given a disclosure but it’s a part of our already ongoing existence existing API facility. That’s where we’ve done the peptide API investment in terms of the formulation it gets taken care of by a regular formulation capacity that we have.
Tushar Manudane
Okay, so this is not a dedicated Capex for peptide defense.
Mr. Pranav Amin
No, it is part of a facility and an ongoing facility where we’ve fine tuned one block.
Tushar Manudane
So on the API side at a portfolio level have we seen like sort of price increases given the, the crude linked derivatives of solvents have seen sharp increase in prices. So, so subsequently have we seen API prices moving up for us.
Mr. Pranav Amin
So API prices
Tushar Manudane
Still do some.
Mr. Pranav Amin
Okay, good question. So I’ll just give you a background I think just, you know, as you said, I’ll give a background about our API business. Our API business. We generally. It’s a pretty high margin business and a pretty high. It’s quite a profitable business for us because one of the reasons is we do sell APIs at a much higher price. I think we don’t compete at the bottom level with the weather for lack of a better weather Chinese or the dropping prices I think so we do have premium prices on the markets.
That’s one. And our business values the compliance and the supply chain resilience. Right. So we have good prices on the API side in the market. Secondly, I think in terms of are we seeing increase in some solvents? Yes, we’re seeing it. Have we passed it on? No, it’s still not a materially big issue for us. As you know we generally do carry a higher bit of inventory and that’s helped us out right now I think we’re okay with utilizing the inventory. We do have higher prices so that’s not as much of a concern for us at this stage.
Tushar Manudane
Understood. So probably considering the current inventory is at least for. At least next. Yeah, I
Mr. Pranav Amin
Think it’s, it’s. Yeah it’s not impact any margin, it’s not not impacting any margins for us.
Tushar Manudane
And as far as branded business goes, so post launch of course it’s too short a time period but any sort of either in terms of increasing prescription or any, any color you would like to.
Mr. Pranav Amin
Yeah, so I don’t have any, Yeah, I don’t have any data that I can share with all of you but I can just say just been only feminine right. That we launched. It’s only been a couple of months and I think this is where we’re visiting the doctors. We’ve started off with a smaller field force reaching out to doctors only in high prescription territory for UTIs. So we’re seeing a good trend, we’re seeing a good feedback. I think it’ll be a couple of be another quarter or two till we are more comfortable giving out more metrics on this.
Tushar Manudane
Lastly, just a broader question sir like in terms of capital allocation like the peptide is one area where we’ve done reasonable investment over last one to two years. Now this branded business is there. So likewise in any other areas where the capital allocation would happen in let’s say over FY27, 28 or. These are the key areas to focus on now.
Mr. Pranav Amin
Yes. So I think what’s going to happen is in terms of capital allocation. If you say in terms of Capex, we’re broadly done with all our Capex, even the branded business, it doesn’t entail any Capex. I think the only investment was in licensing of the product. So on the branded side we will in license few more products. We’re seeing some opportunities that we can build into Alembic Therapeutics to grow the branded business. So that is one part. Second is R and D investments will continue though in a measured manner to see where it happens and that’s it.
I think these are the two broad areas and complex products is where. So basically it’ll be R and D and the branded business.
Tushar Manudane
All right, thanks. That’s it for me.
Operator
Thank you. Participants, if you wish to register for a question, please press star and then one. Now. As there are no further questions from the participants, I now hand the conference over to Mr. G. Krishnan for closing comments.
Mr. G. Krishnan
Thank you for joining us on the quarter four and full year conference call. If you have got any follow up questions, please reach out to the investor relations team. Thank you.
Operator
Thank you ladies and gentlemen, on behalf of Alembic Pharmaceuticals Ltd. We conclude this conference. Thank you everyone for joining us. And you may now disconnect alliance.