Alkem Laboratories Ltd (NSE: ALKEM) Q3 2026 Earnings Call dated Feb. 13, 2026
Corporate Participants:
Purvi Shah — Head of Investor Relations
Sandeep Singh — Managing Director
Vikas Gupta — Chief Executive Officer
Nitin Agrawal — President and Chief Financial Officer
Kaustav Banerjee — Chief Executive Officer Alkem MedTech
Analysts:
Unidentified Participant
Tushar Manudhane — Analyst
Damayanti Kerai — Analyst
Saion Mukherjee — Analyst
Neha — Analyst
Kunal Dhamesha — Analyst
Nikhil Mathur — Analyst
Chirag Dagli — Analyst
Bharat Sali — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Elcome Lab Q3FY26 results call hosted by Motilal Oswal Financial Services Ltd. 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. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded from Motilal OSWAL Financial Services Ltd. Thank you. And over to you sir.
Tushar Manudhane — Analyst
Thanks Iqra. Good evening and Warm welcome for third quarter FY6 earnings call of Alchem Laboratories. From the management side we have Mr. Sandeep Singh, Managing Director, Dr. Vikas Gupta, CEO Mr. Nitin Agarwal, CFO Mr. Kaustav Banerjee, CEO Alchem Medtech and Ms. Purvi Shah, Head of Investor Relations. Over to you Purvi.
Purvi Shah — Head of Investor Relations
Thank you Tushar. Good evening everyone. On behalf of Alkem, we welcome you all to today’s quarter three FY26 results call. Earlier today we released our financial results, press release and results presentation. All of which are available on our website and have also been filed with the stock exchanges. We hope you’ve had a chance to review them before we begin the call. Please note that this call is being recorded and the audio transcript will be made available on the exchanges and on our website shortly after the call concludes. Also, today’s discussion may include certain forward looking statements.
So this should be viewed in the context of the risk and the uncertainties associated with our business. Since we have made a major acquisition announcement today for Alchem Medtech. We also have our MD Mr. Sandeep Singh with us on the call who will throw some light on the same. And all the questions pertaining to the Medtech business will be answered by Mr. Sandeep Singh along with Alchem MedTech CEO Mr. Kaustav Banerjee. So with this I now hand over the call to Mr. Sandeep Singh.
Sandeep Singh — Managing Director
Thank you Purvi. So guys, it’s great news that we have got into medical devices. I think after Biotech this could be one very valuable subsidiary that we will create in in the long term I would just like to share some facts about this market. And then of course we know Vikas will talk about the business operations and then we can go through Q and A. So largely Medtech in India is a $10 billion market with significant headroom for growth. And India is still an underpenetrated market. Per capita is $7 for India, it’s $50 for China and even Brazil is at $40.
So we all know there’s large headroom left in India. There are technological advances leading to profilation of in use cases across disease areas and there’s low competitive intensity historically smaller value pools, limited tech know how and lack of at scale domestic players even yet. And let’s not forget Medtech can be like generic, you know, version two. And India can become a supplier globally to to the best parts of the world, to the most advanced countries in the times to come. So shift towards localized manufacturing and emergence of Indian players will happen and we are very sure of it.
The two areas which you want to focus is ortho and cardio. And though I spoke about India, but today is global I believe Insene and Alkene Medtech both can be value accretive not just in valuation but even on pure ebitda margins. In four, five years both businesses will have a EBITDA margin of 25%. And with this I’ll pass it on to Vikas and I’m happy to take questions later on. Thank you.
Vikas Gupta — Chief Executive Officer
Thank you so much Mr. Sandeep. Good evening everyone and thank you for joining us for Q3FY26 earnings call. In Q3 we delivered a stable performance in a dynamic operating environment supported by strong fundamentals in our domestic business and consistent execution across our international businesses. We remain bullish on the growth opportunities in domestic as well as in the international businesses and are on track to deliver our full year guidance. We are seeing good revenue growth across our core markets. Core markets. So in domestic market if we look at our YTD numbers, we have grown at close to 10% during Q3 of last year we undertook measured adjustment to our distribution setup in certain areas which was aimed at strengthening the channel effectiveness and improving the service levels and supporting overall long term growth.
So we had realized certain sales in Q3 FY25 which led to a high base for that quarter. So if we adjust the base effect, there has been a still strong double digit growth of domestic business that continues even in Q3 of FY26. Our chronic business is seeing very strong growth trajectory both YTD as well as quarter for this year. We also have carved out our Alchem Wellness business as a separate entity which is seeing certain headwinds. However, our Prescription business is growing at a strong rate which is reflected in IQVR data as well. We continue to gain market share across specialties as reflected by the prescription research data as well.
I will now present some of the key highlights for Q3FY26 financial performance the total revenue is at 37,368 million rupees with a YoY growth of 10.7%. International sales were at 12,157 million with a YoY growth of 26.6% while India sales like I mentioned is looking at pyy growth of 5.5% with 24,959 million, EBITDA margin of 22.2% and EBITDA stands at 8,280 million with a 9% YoY growth. R and D expenses for the quarter were 1390 million which is 3.7% of the total revenue from our operations. PBT was 7812 million with a YoY growth of 7% and net profit at 6360 million with a YUI growth of 1.6%.
There is an exceptional item for the quarter which includes the impact of rupees 528 million on a preliminary basis related to the notification by the Government of India regarding the labor codes. According to IQVR data we have outperformed IPM in six therapies which is anti infective which is our core. We are growing 1.4x vitamins and minerals. We are growing 2x of the market pain at 1.4x. Antidiabetic is 1.2x but if I adjust for the GLP1 it is more than 2x of the market respiratory 1.2x and derma 1.8x. So we are seeing a very strong trajectory both in IQV as well as internal business performance.
We are encouraged by the opportunities ahead supported by our expanding portfolio, upcoming launches and investments in the new growth areas. We will continue to navigate the evolving operating environment with agility. Thank you for your continued trust and support. I would now like to hand over the call to the moderator so that we can open the session for questions.
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 touch tone telephone. If you wish to remove your 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. The first question is from the line of Damayanti Kai from hsbc. Please go ahead.
Damayanti Kerai
Hi, thank you for the opportunity. My question is on Medtech to Sandeep. So Sandeep, you clearly mentioned this could be generic too in terms of growth opportunities which are available and from Elkham perspective I just want to understand what kind of scale you want to build over next three to five years and then what kind of investment or cost will be required to build that scale.
Sandeep Singh
Sure. Thank you. So yes, I do believe in that. So in the next three to five years revenue could be around thousand crores and EBITDA would be around say 20, 22%. 25% would take higher but since your question was two to five years I’ve answered that. And Kaustav, you can give more color to it please.
Kaustav Banerjee
Yeah, so if you look at from the business of ortho and cardio, our ortho business is more like organically growing and we just introduced and the tech transfer product that we did last year that is under manufacturing and we expect to launch it in the end of, end of June next year.
If I give you a volume perspective we should be around 10% of the market by in five years time. And if you ask me in terms of numbers that would be around 250,000 implants in five years cumulative numbers. So it will be a very strong growth. And we have already launched the product, Indian brand manufactured product in the second quarter of this year. And if you look at the sequentially we are growing at a number which is 50% quarter on quarter. And if I look at the overall EBITDA I think which Sandeep already mentioned
Sandeep Singh
and your question was on incremental cost so I think more or less maybe it will take 2 to 300 crores more of investment in the next 3 to 4 years.
Significant investment I would say is almost done. Yes, thank you.
Damayanti Kerai
Sorry. So out of the 200, 300 expected spend majority are already done. That’s what you’re seeing.
Kaustav Banerjee
Yeah, yeah, yeah, yeah.
Damayanti Kerai
Okay, just continue that. We understand Medtech is very different than pharma. Right. So what gives you so much of confidence that you can really scale up big in just a startups at three to five years. And what could be the major challenges if you can just talk on this business.
Sandeep Singh
Yeah. So Kostav, maybe you can go ahead but I just say this, that of course it’s different. Therefore we have a different team, we have a different company and that’s why we acquired this company because those skill sets we don’t have it. So we are very clear about it. We will run it independently and it is different, but it falls under healthcare. Yeah, Costa, please.
Kaustav Banerjee
Yeah. So if you look at Medtech, we are in the process of building the team and with the ortho we have already built the team and the people we have brought in are from large global companies with significant experiences, anything between 15 to 20 years.
And if you look at, look through my background you will see that I have grown in the medtech sector before joining Alchem and I was hired to build this portfolio. I have spent around 26 years into MedTech starting with large three global companies, Detronic, St Jude Abbott and then Zimmer Biomed. So it has been. And I have worked through cardiology and orthopedic all through my 26 years before I chem.
Damayanti Kerai
Sure. Thank you. I’ll get back in the queue. All the best.
Kaustav Banerjee
Thank you.
operator
Thank you. The next question is from the line of Thaher Mukherjee from Nomura. Please go ahead.
Saion Mukherjee
Yeah, hi, thanks for taking my question. If you can provide some more color on this acquisition of QTech, if you can give some history about the company, you know the product segment geography, any concentration risk and then you know, and beyond the profile. If you can just talk through the strategic rational for this particular deal as to how this will sort of help in your long term aspiration and then the financial metric, how does it make sense is that it is, you know, what’s the EBITDA margin for the company, whether it will be earnings accretive or not.
If you can give color on that and any, any breakeven timeline for.
Kaustav Banerjee
These are good questions actually from your side. Let me start with the rational and what the company is about. Very briefly this is a research oriented company which has solved one of the biggest metric problem in the world which is being in high entry market barrier markets. I mean entry barrier markets which include United States and Western Europe as well as Japan and Australia. And this segment is a very niche segment of cardiology. So for us it’s more like a platform. So if you look at intervention cardiology, this is a sub segment of that intervention cardiology where the occluders which is basically treating the septal defect of the heart.
And the three primary areas is definitely number one is atrial septal defects, number two is the treatment of heart failure and number three is prevention of stroke. So that’s a therapeutic area. Now why this is important to us in this particular segment, they are the third largest company in the world and given their revenue coming from Western Europe and US to the tune of 85% of their total revenue. It’s a very, very strong portfolio which is waiting to be expanded across the globe. And in Europe this company is already holding a number two position. Apart from this, this company has a very strong R and D setup with their own research lab, multiple research lab, own clean room and own testing facility which is not very commonly seen any of the other companies that you come across in the segment.
And as a result of this, this company has a very strong product pipeline. And one of this product pipeline is another occluder which is left atrial appendage where the revenue in the market, I mean the global market size is $1.4 billion and which is a oligopolistic market today. I would still say duopoly being shared by Abbott and Boston Scientific. These are two companies which are leading this occluder segment. And this is a product which is in the pipeline. We’ll be very soon getting approval. Another important thing you need to recognize, while they have got into us just in last one and a half years and within this one and with one product, they have already achieved 5% market share.
PFO is about to be launched and we are expecting a market share, I mean we are expecting approval by 2027 that can significantly help us scale up in a high value market. Now coming to your question on EBITDA first, this company is already EBITDA positive in the present year, which is financial year, sorry calendar year 2026. And our estimate is to have 10% EBITDA by FY27 which will take us to around 23 to 24% in three years time. And our market share if you see in Europe already is 23%. And we expect to replicate the same experience in the United States.
And given the company do not have significant presence in emerging markets, that’s a huge opportunity for us to grow. Okay, so if you have more financial. Questions you can ask, I think please go ahead.
Saion Mukherjee
You know like you’ve got 55%. So, so who owns the company and why not owning 100%? Is there a plan to own 100% at some point in time?
Nitin Agrawal
So if you look at the shareholding, there are around more than 150 shareholders currently in the company and majority around 32% is held by the founder himself. And so the reason why we are buying 55% because the balance shareholders, they want to retain their shareholding and again as part of the say value creation which we are going to do in next five years together. So the current management will also continue the Current promoters will also grow the company along with us and maybe over years, over say next four to five years they may look for an exit but as of date there is no such plan and they want to grow the company with us.
So that’s the reason that we are buying 55% stake. But yeah, maybe after three, four years we can again look at buying the balance stake from them.
Saion Mukherjee
So 30 odd percent for the promoter. The promoter is still owning that much stake?
Nitin Agrawal
No, he will sell some part of it but definitely he will own significant stake after we take control.
Saion Mukherjee
Okay, can you share like how much stake he would own after the transaction?
Nitin Agrawal
So we will share once we sign the SPA still in the discussion process but yeah, but we will acquire overall we will require 55% stake that has been dec in terms of the promoter stake. How much they will continue? That exact number will come to know once the we reach the signing of SPA stage and the promoter will continue.
Saion Mukherjee
As the CEO of the entity. Is that like already decided?
Nitin Agrawal
Yes. So the plan is that the same management will continue and definitely we have taken a commitment from him to continue at least for a year and even for the other management, say senior management staff also the commitment has been taken. So the plan is that this company will run as it is because of the strength we have bought this company, their R and D and manufacturing capabilities and as Kaustav said that there are a lot of opportunities to use the brand name of Oclotech and launch more number of products in the structural heart and other similar say cardiovascular segment.
So definitely this is a big big brand which we have bought and we want to retain the brand image as it is.
Saion Mukherjee
Okay, thank you, I’ll be back.
operator
Thank you. The next question is from the line of Neha M from Bumpa. Please go ahead.
Neha
Yeah, thanks for taking my question. Sorry I missed the number for what is the incremental investment that we are planning, you know on growing the assets.
Nitin Agrawal
So the initial investment will be of around 1100 crores but yeah, over two years since we want to also exploit few of the R and D projects. As Kaustov spoke that they have LA which is a great product in this segment and we want to definitely exclude launch of LA at least in Europe market over next three years. So we will maybe invest 100 to 200 crores more over next two years to fund their R and D program. But definitely I think at operations level they will be cash flow positive and I don’t see any challenge from operating.Cash flow
Neha
this 100 to 200 crores. Is largely R and D
Nitin Agrawal
. Yeah. Mostly to fund or accelerate their R and D program. However it seems already EBITDA positive. I think there are some concerns on the PAT numbers because they have a loan also in their books of around 450 to 500 crores. The loan is currently at 10%. But yeah, definitely we have plans to reduce the interest loans since Alkem has such cash equity in the market. So definitely the PAT will also improve once the loan is supported by a corporate guarantee.
Neha
And the plan to launch more, I think that product that you mentioned in 27 in US and expand it in other markets that wouldn’t require too much investment or that would be. And above this under 200 crores.
Nitin Agrawal
No. So as Kaustav spoke about PFO launch in US that will be June 27th. So most of the R and D spend or investment on that project is already done. So we are just waiting for the approval to come and we will most probably launch that in June. From June 27th onwards we will start marketing that product.
Neha
Okay. What I’m trying to Understand is this 200 crore number includes on marketing spend as well.
Nitin Agrawal
Yes, yes. As we said that we are already, if you look at cash flow at the operating level, we are already, we have positive cash flow so we don’t need to invest further in sales and marketing. The current business can manage its own sales and marketing expenses. But for R and D program and to accelerate the R and D program definitely there will be some amount of investment which we will do in the clinical trials and also the clinical program.
Neha
Thank you. And what would be the payback period for the acquisition based on your initial assessment?
Nitin Agrawal
See as we said that this will be more for us. This will be a platform to access developed markets like Japan, US and Western Europe. And there is a plan to also launch more number of say products in cardiovascular using this platform. But if you don’t consider the additional portfolio which we are going to launch or you don’t consider LA which is a big opportunity, the payback is around 10 years on this asset. But after considering LA or say new set of products which can be launched under this platform, the payback will significantly be lower.
As I said it’s 10 years. It can be significantly reduced but it’s very difficult to predict as of.
Neha
Okay and sorry, my last question. You know the additional cardiology assets that you’re mentioning. Are we looking at more acquisitions, asset acquisitions to add on to this portfolio? Is that the eventual idea other than what’s there in the pipeline for this.
Nitin Agrawal
The idea is not about acquisition. See when we get if you understand the business and this, this company is very well manufacturing a simple scaffold kind of technology which is based on Nitronol. There are many adjacent technology to that which can be very easily manufactured by them. Doesn’t require an inorganic acquisition but product can be developed and manufactured through the same organization. Because they have already mastered one of the most difficult skill of delivery systems. And given that they have already done it, I feel that whatever investments in R and D Nitin mentioned that should help us and suffice to introduce our newer products.
Neha
Understood. Okay, thank you so much.
operator
Thank you. The next question is in the line of Kunal Dhamesha from Macquarie. Please go ahead.
Kunal Dhamesha
Hi. The first question on the domestic formulation business, Dr. Vikas alluded that we had some higher base last year same quarter. But if I can see last year same quarter also we had kind of mid single digit growth, right? And if I look at the 2 year CAGR removing that whatever restructuring we did, we are still at mid single digit growth, right? So what is happening in our domestic formulation business that continues to grow at a lower level, much lower than the IPM level.
Vikas Gupta
So I would disagree here because if you look at our YTD numbers, you know I think we are close to 10% and if I split that out even further, like I mentioned, you know we have this year some headwinds in the generic business. We carved it out as a special separate entity. So if you remove that we are actually close to around 11% or 12% in that range. Now in a market which is growing at around 7 and a half to 8% YTD numbers are looking at around early double digit kind of numbers. So in fact we are seeing very good traction across segments within our domestic business and chronic which always has been a question that people have asked or whether you look at IQVR numbers, whether you look at internal performance numbers, I think it’s the growth story is at its, at its high, you know we are, we have a high teens kind of growth that we are registering in our overall chronic segment.
So I think if you YTD basis.
Kunal Dhamesha
On YTD basis we also have adroit adding the inorganic growth and Bombay also getting added. Right.
Vikas Gupta
That’s hardly, you know if you ask me the number for YTD for adroit sadly 40 crores, you know, so that’s not a very big number which is even otherwise, you know, if you look at our prescription business is seeing a, you know, very strong growth and you can See even it in iqvr. So we have, I think we do not have any challenges. In fact our growth is very good. We are very bullish on the same. In fact now with we all getting ready for semaglutide launch also which will be. We are also geared up for day one entry into semaglutide.
So. And you know, in fact that would require addition of some people. But even in other therapies, you know, looking at our growth trajectory, you know we are very bullish on our domestic market and we will add some more, you know, manpower to drive the growth further in the coming years as well.
Kunal Dhamesha
Sure sir. The second one on the occludech business, how is the gross margin profile of the business? And when we say that we’ll improve the EBITDA margin from around 4% to more like 25% over the next three to five years, is it more driven by operating leverage, gross margin improvement and does the company have manufacturing facility? If yes, where is it and what kind of utilization it is currently working?
Kaustav Banerjee
Yeah, so first of all, you know the gross margin of the company is as of now close to 73%. There are multiple things that will be driving our margin going forward. Definitely one of them is operating leverage. And number two is there is lot of opportunities to optimize cost utilizing the significant back office that Alkem already has including the gcc. And also one of the things we need to recognize that there are certain new products that will be introduced in very high ASP market. For example, when we launch our PFO in US the ASP is almost to the tune of $9,500.
And number four, that is going to drive the margin going forward. While we recognize the fact anything that is labor oriented or that can help us build labor arbitrage or anything which is labor intensive process, we will move to India. But we still want to retain the organization’s international DNA. So we will continue to make investment on optimization. But ASP increased coverage, operating leverage and utilizing Alkem’s strong back end to reduce operating cost.
Kunal Dhamesha
Regarding the manufacturing facility.
Kaustav Banerjee
Yeah, the manufacturing facility, as I said it will take time because it is also regulated and already currently it is, it is in Germany and Turkey as well. And this manufacturing facility will continue to operate and eventually we will see opportunities to utilize optimize.
Kunal Dhamesha
Sure sir. And lastly the 450500 crore debt on the balance sheet which is at a high interest rate. So is there a plan to kind of provide loan from the Alchem balance sheet at a lower percentage Point or you would refinance from the market. How should we think about it?
Nitin Agrawal
So we will not provide loan from Alchem India, but definitely we will get it refinanced with help of corporate guarantee, the rate can be reduced from current 10% to 5 to 6% easily. And this is a rate we pay for our other subsidies also for working capital loans. Yes, to answer your question, it will not be from Alcant but it will be refinancing.
Kunal Dhamesha
Sure, sir. Thank you. And all the best.
operator
Thank you. The next question is from the line of Nikhil Mathu from HDFC Mutual Fund. Please go ahead.
Nikhil Mathur
Yeah. Hi, good evening. Sorry, I wanted to understand the India numbers a bit better. So there is a divergence what you are suggesting between the primary sales and the secondary sales. So 1Q 2Q were much better possibly on the secondary side. And so on the primary side and this quarter the primary is worse off than secondary. So any particular reason for this divergence between the two? And when do you see this anomaly getting corrected in the business?
Vikas Gupta
So let me clarify it once again. There is no divergence or no anomaly in in this number. If you see it is just a cutoff adjustment. You know, when we had changed our distributions setup in last year Q3, there were certain markets where we could realize it is just the spillover impact which already got corrected in Q3. So there is no divergence. It is looking at like a 5% growth. But if you see YTD, you know, this year numbers, there is no divergence in primary and secondary. And YTD numbers are 10% kind of growth which is overall domestic.
And as you know, in our overall domestic there is a large component of the generic business as well. Now that generic business this year has been more flattish. So if you look at only the core business, the branded generic business, then the growth trajectory is strong. It is early double digit kind of growth. And we are also bullish of ending this whole year also at that number only. So just to clarify, there is no divergence in any primary or secondary. It is just because last year because of the cutoff more of a base impact in the last year Q3 because of which only this quarter is looking a little sluggish.
Otherwise, you know, there is no. I hope it is clear, Nikhil.
Nikhil Mathur
So you will be back to a 10% growth level from 4Q. Is that the.
Vikas Gupta
So we are already at YTD also. We are at that number and Q4 also will be, you know that number because that base was only for Q3. You know, which got corrected. Now after that it has been the same cutoff principle, you know, that we have followed. So even in Q4 you will see touchwood if everything goes well. You know, a similar.
Nitin Agrawal
Just to add what Dr. Gupta said, if you look at billing to billing growth for the quarter, it was 10% plus for the prescription business. So it was just because of the cutoff adjustment that the reported growth looks lower.
But billing to billing, if you look, if you compare the growth, it is 10% plus for quarter three also
Nikhil Mathur
understood. And so slightly medium term, let’s say FY27, FY28. Now this generics business, I don’t know, I mean if you want to grow this business or not, would it drag your Overall growth in FY27 28 if you don’t?
Vikas Gupta
No, it won’t. As I said, it’s a large business for us and we would definitely want to grow it, of course, because we had carved it out as a separate entity. Whenever you do that, we have seen that in the short term business goes through certain headwinds and even in the market, you know, that it has become a highly competitive market. I think we will be back to our high single digit to early double digit kind of growth even in generic business from next year. So this year we have taken certain conscious calls also in the interest of keeping the margins intact from that business.
So we are very hopeful. So overall, if I have to give you a domestic story picture, then we are very bullish on this. I have always maintained that we will continue to grow at 100250 basis point more than the IPM growth. In the recent months we have seen even IPM growth getting recovered and similar trajectory. We are seeing actually in the recent months in our overall domestic business as well. So I think this kind of growth would persist and continue even in the coming year.
Nikhil Mathur
Got it. And I have a question on octotech as well. Before that, just final question on the core business. So you are at 66% gross margin now if I look at nine months, somewhere around 65, 66%. So any particular guidance on the gross margin going into FY27 28, especially in light of the MIP that has been announced for Pengi and its derivatives. Does that create some sort of a headwind?
Vikas Gupta
So see, of course, you know, MIP is a very recent event. We are just waiting and seeing, you know, how the market pricing would unfold. If the India players, you know, increase their supply, then clearly the cost impact, you know, would be lesser. You know, on our Balance sheet. But as of now, the way it looks like, it looks like overall, you know, close to say 80 to 100 crores impact. But some of this, you know, would get, should get nullified by some of the market pricing because even our trade generic business, you know, we have a big, you know, portfolio on that front so we can pass it on, you know, to the customer.
So we will try and see how we minimize that impact and then there will be certain other products as well where we are working on improving our overall procurement. So I think put together as of now we are looking at say a similar guidance on the gross margin, maybe 0.5 to a percentage basis points here, there. But we’ll try and we’ll actually get to see it closer to how the market unfolds, you know, in, in the coming quarters.
Nikhil Mathur
And how many months of inventory do you usually hold off of these derivatives?
Vikas Gupta
We have close to 5, 4 to 5 months of inventory, you know, with regards to the number of days.
Nikhil Mathur
Got it. I have a set of questions on Oklotech as well. Now, Sandeep. Sir, historically Alchem has been very conservative with regards to capital allocation. Only we are seeing these acquisitions. What gives you confidence on these acquisitions, especially this one, given your conservative nature and the consuming loss making it seems a bit departure from your past practices.
Sandeep Singh
So you said I have many acquisitions, so I think this is the first one. Not many. You can’t count Bombay or. That’s a sneeze. Don’t even bring it up. This is the first one. And many times you all kept asking that you should acquire and acquire. So maybe we listen to you all. Now what gives me confidence is what we answered in the first question. I think we believe in people. I think we have the best people in the medical devices. We have acquired a company which I’m kind of repeating. So this is not a in house development or in house management.
This is an acquisition not only of company, but of talent. And yeah, and Costa, you can add on that if you want anything.
Kaustav Banerjee
No, I think. Yeah, so. Yeah, yeah, yeah.
Nikhil Mathur
So the, the current promoter.
operator
Sorry to interrupt. Mr. Mathur, please rejoin the queue for follow up questions. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to two per participant. Should you have a follow up question, please rejoin the queue. The next question is from the line of Chirag Dagli from DSP Mutual Fund. Please go ahead.
Chirag Dagli
Yeah, so thank you for the opportunity. Sir. When you think about the acquisition in three years, this incremental growth that is going to come, is it a lot this is going to come? New products in similar markets or similar products in newer markets. If you can just flesh out some details here, that will be helpful. And the second one was that. As and when you get comfortable with the SharePoint purchase agreement, we need a lot more color around how the balance sheet looks like, what you paid and what’s the historic finances of this company look like and maybe some literature around what product approvals they have, etc.
That will really help because this is a fairly large acquisition, large capital allocation, but a lot more details required is the feedback. I just wanted to sort of.
Kaustav Banerjee
Yeah. So your. I’ll take the first question first. That is your question on how are you doing to grow? So fundamentally there are three things that will drive our growth. One is definitely newer products that will be introduced which are awaiting regulatory approval. For example PFO in the United States, which is a very large opportunity. Similarly increasing the footprint in emerging markets. That’s the second large opportunity that we have with this product. And, and the third thing is it’s about going deep into markets where we just have little bit of presence, where we have low market share because Western Europe we have already have a very good, very high market share thereafter.
APAC and EMEA are the markets where we have the headroom to grow. So multiple factors and us at the PFO launch and the deeper penetration with asd.
Chirag Dagli
Did you flesh out any guidance for these numbers on the next three years kind of growth?
Kaustav Banerjee
Yeah, you know, 600 crore. We are estimating in. In the, you know, calendar year 26 and then subsequently we will grow that number up to 780 crores in. In. Yeah, approximately 14% CAGR about for the next five years. That is not counting your bolt on. Not counting as a bolt on conservative. Number, if I can say correct.
Chirag Dagli
And this 15, 14, 15% growth equally split across all the three aspects that you talked about. Your geographic expansion, newer markets and of course existing markets. Higher penetration almost equally is how we should think about.
Kaustav Banerjee
Would be very difficult to say equally because in certain markets you will drive higher volume, may not be at the very high asp and certain markets like us where you will have very high ASP may not be at the same volume. So it would be distributed. But largely our estimates will grow at 14% CAGR over the next five years.
Nitin Agrawal
Just to add on what Kaustav said, that this 14% CAGR is without any new product as we have LA also in our product pipeline and also without adding any portfolio, any addition to the portfolio like we can add TAVI or Stent or other products also going forward. So 14% CAGR is only from the existing products.
Chirag Dagli
I understand. So the reason I’m deliberating on this point so much is that the execution hurdles across these three buckets is very, very different. Right. Getting newer products in developed markets versus getting our developed product markets sold in India versus all of these are very different execution project. Right. So and I get the point that you’re bullish about the business, but when you think about this group, we have to kind of at least try and you know, get some sense on how you are thinking about these three verticals in terms of the contribution to the box.
Kaustav Banerjee
We are, we are already having a full blown team with Olflotech. We are just acquiring 55%. The team remains, the management continues and we would like to continue with the DNA of an international company.
Chirag Dagli
Understood? Okay, fair point.
operator
Sorry to interrupt. Mr. Bagley, sorry to interrupt. Please rejoin the key for more questions. Yeah, thank you. The next question is from the line of Bharat Sali from Equis Securities Private Limited. Please go ahead.
Bharat Sali
Yeah, Hi, good evening. I just wanted to understand on ocular. So we are doing this acquisition from company’s perspective. What do they expect what we will be adding as a value to them.
Kaustav Banerjee
Overall, what we are going to add as a value.
Bharat Sali
Right?
Kaustav Banerjee
Yeah. So definitely number one is we are going to put muscles into the company by making investments. We are a strategic investment investor into it. Number two we are going to add is in terms of the alchem strength in building organization sector of the globe. And third is alchemy, you know, large infrastructure and GCC to reduce the sgna.
Bharat Sali
When we say to reduce sgna, what exactly we are doing there per se because we don’t have a manufacturing facility. So what exactly we are pursuing there.
Kaustav Banerjee
SGNA is outside manufacturing. We are, we are talking, we are talking about foster sales. So foster sales. Eventually we will, we will look at optimizing by moving some of the labor intensive activity. But SGN I’m talking about is more on the. On the expenses side. Admin expenses side. For the support function.
Nitin Agrawal
For the support function.
Bharat Sali
Right, right. And when it comes to the future acquisitions, are we geared up to even further invest into Medtech any longer or the future investments is going to be in different areas? You could explain that.
Sandeep Singh
No, I think so. First, I mean we will look at investments but as you know, somebody said we have been conservative. So we are very selective. So coming To Medtech. I think more or less is done. We might look at something small, but nothing significant for sure. I think a large part is done. Yes. We will look into a core business as well, obviously, like pharmaceuticals, at a reasonable valuation. Something is reasonable. We will look at it. But we continue to be a company which doesn’t have acquisition as its main thing. So don’t look at it as we’ll do some big ticket acquisitions.
Bharat Sali
Right. And what will be the ROIC expectation if we go for future acquisition in the Commerce side?
Sandeep Singh
I think on a business which generates 20% is great return on equity.
Bharat Sali
And that will be a threshold for us as well when we are investing.
Sandeep Singh
Yeah, but you know this theoretical if the great growth we can compromise the return on capital depends on. Right.
Bharat Sali
I mean surely. And Ricardo, if since you were mentioning about trade generics, are you giving any absolute number what was our trade generic business during this quarter?
Vikas Gupta
So I think that we will not, you know, we’ve not called out that, but we know that, you know our percentages in terms of our overall business. I think you have, you, you know, you know how it has been. I can say that it has been flattish, you know, for this year.
Bharat Sali
Right.
Sandeep Singh
Sorry. Yeah.
Nitin Agrawal
You are saying and on quarterly basis for the quarter.
Sandeep Singh
For the quarter it was flat. For the ytd. At YTD level it was at lower single digit.
Bharat Sali
Thanks a lot. I will get back in the clip. Thank you.
operator
Thank you. The next question is from the line of Sandeep from Sylves. Please go ahead.
Unidentified Participant
Thank you for the opportunity. Could you please provide some insights about the Denisima biosimilars in the US I know it was recently submitted and as well as like what is the recent status in the Europe region and when will the ex diva bias and will be submitted? No.
Sandeep Singh
Great. So I mean denosumab we have both XDIVA and Prolia both number one part. Number one answer is that us we are undergoing FDA inspection as we speak and an entry date would maybe it would be later on, not during this year because of litigation with Amgen. Even though there are many players, Amgen still litigates on it. So US entry is going to be 26 end hopefully and Europe will be entering very, very soon in the next couple of months.
Unidentified Participant
Okay, thank you. Thank you so much.
operator
Thank you. Before we take the next question, a reminder to all the participants. If you wish to ask a question, please press star N1. The next question is from the line of Kunal Dhamesha from Macquarie. Please go ahead.
Kunal Dhamesha
Hi. Thank you for the opportunity Mr. Kausab, the PDA occluded device which is currently under filing. So is it already filed or is it under clinical trial? And we, we are yet to file and June 27 is the approval date. So June does it refer to calendar year 27?
Kaustav Banerjee
Yeah. So your question is PDA or PFO? PDA is already an approved product. If you are talking about PFO not only filing even the clinical trials are being conducted. The results will be shared with us FDA and we are expecting by mid of June 2027. And when I say June 27th it’s specific like it’s not about calendar.
Kunal Dhamesha
So that’s a target action date we have already received or it’s a clinical trial still going on.
Kaustav Banerjee
It’s the, the data.
Kunal Dhamesha
Okay, okay. And you know on the, on the, some of the antibiotic portfolio we have where Dr. Gupta alluded that we can pass on some of the increases MIP related increases to customer. But my understanding is lot of these products are under nlem. Right. And the price increases are linked to the WPI index.
Vikas Gupta
Yeah. Let me clarify, I didn’t mention on mrp what I said is in the trade generic business, you know where it is sold at a say a higher discount. Right. To MrP is where we can look at increasing the price. So that is where you know I mentioned we can pass on some of the cost to the customer. But I don’t know, you know we will see how it, how it goes and how it plays out in the market.
Kunal Dhamesha
Know, percentages,So sir, of our anti infective portfolio, how much is in the generic division and how much is in the prescription division? If you can share the broad, you.
Vikas Gupta
large brands, you know that’s a branded generic market, say Clavmic, say Taximo, you know the, the injectable range, zoom, etc. So it’s a mix, you know the breakup of the same. We have not shared but we’ll have to look at overall if we get to say the IQVR numbers which you get is only for the prescription. So for generic I think trade generic, the IQV numbers they don’t cover it. Yeah. So you can make out IQV number. What is our prescription size of anti infect?
Kunal Dhamesha
My understanding is IQVI do capture some of the trade generally but we can take that offline.
Sandeep Singh
Some doesn’t make it representative.
Kunal Dhamesha
Yeah, I agree but. But some gets captured.
Sandeep Singh
Yeah, yeah, that’s good.
Kunal Dhamesha
Yes, thank you.
operator
Thank you. A reminder to all the participants, if you wish to ask a question please press star N1. The next question is from the line of Chirag Dagli from DSP Mutual Fund. Please go ahead.
Chirag Dagli
Yes sir. Thank you. For the follow up. The trade generic business. 9 months. The margin on that is. Given that we’ve been flattish would the percentage margin on the trade generic business be better this year versus last year?
Nitin Agrawal
Sorry Chirag. Come again Chirag. I think we mentioned that the growth was flat for the quarter. And at YTD level the sales growth for trade generic was in lower single digit. If you look at EBITDA as we have given our shared increase previous calls also that the EBITDA for generic business is 2 or 3% lower than our corporate EBITDA but not very much. It’s not very different from our corporate varying from quarter to quarter. But it’s on the same line as corporate.
Chirag Dagli
Understood sir. And just the second one sir. On the anti biotic business or basically the pen, you know volume wise would the branded business be larger than the trade generic business? Just whatever is dependent on failure.
Vikas Gupta
I think you know we will have to do that calculation. But it’s. It’s. It’s more or less similar because trade generics and effective is equally big. Yeah. So the impact will be almost similar because the volumes are higher in trade generics.
Chirag Dagli
Understood. And this 100 crore is a total number. A part of that gets offset by price.
Nitin Agrawal
Always higher as compared to prescription. So the impact will be more on generic.
Chirag Dagli
Understood. Thank you.
operator
Thank you. Anyone who wishes to ask a question please press star N1. Ladies and gentlemen, we will take that as the last question for today. I now hand the conference over to the management for closing comments.
Purvi Shah
Thank you everyone for joining us today and for your thoughtful questions and active questions participation. I’d like to you know inform all the participants that we have organized an Investor meet on the 18th of February, that’s Wednesday to outline the strategic direction of the Alchem Medtech. And the invite will be shortly shared on the exchanges with a registration link. So kindly register yourself and we wish to see you in person. We look forward, we look forward to engaging further with you there. The venue is St. Regis so you’ll have all the details on the registration form and please feel free to connect with us in case if you need any further help and should you have any follow up question you can reach out to us.
We appreciate your continued interest and support. Have a pleasant evening and a happy weekend. Thank you.
operator
Thank you very much on behalf of Motilal OSWAL Financial Services Ltd. That concludes this conference. Thank you all for joining us today. And you may now disconnect your line.