ALKEM - Alkem Laboratories Limited Share Price

In the Q1 FY2026 earnings conference call, management provided an optimistic outlook, highlighting a robust start to the fiscal year with revenue growth and improved margins. Key highlights included:

• Total revenue from operations was INR 33,711 million, representing a Y-o-Y growth of 11.2%.
• India sales reached INR 22,656 million, growing 12% Y-o-Y.
• The U.S. business contributed INR 6,982 million, reflecting an 8.8% Y-o-Y growth.
• Non-U.S. business revenue was INR 3,556 million, with a 9.1% Y-o-Y increase.
• EBITDA grew by 21.4% Y-o-Y to INR 7,391 million, resulting in an EBITDA margin of 21.9%.
• Net profit after minority interest reached INR 6,643 million, a 21.8% Y-o-Y increase.
• R&D expenses accounted for 3.5% of total revenue, with a forecasted guidance of 4.5% to 5% for FY2026.

Management also indicated strong performance in various therapeutic areas, registering growth rates that outperformed the Indian Pharmaceutical Market (IPM). The domestic segment contributed 68.3% to total sales, up from 67.6% in Q1 FY25.

Additionally, management acknowledged the commencement of revenue generation from the Alkem MedTech initiative, with a modest initial contribution of around INR 2.5 crores in Q1, and projected an annual run rate of INR 40-50 crores by year-end. The focus on non-U.S. markets for growth was reiterated, with expectations of scaling up operations.

While maintaining existing guidance for R&D and revenue growth, management expressed confidence in the ability to surpass targets if current trends continue. Overall, the forecast remains positive with a focus on increasing profitability through strategic investments and operational efficiencies.

1. Kunal Dhamesha: "With the Q1 backdrop, would you like to update our FY '26 guidance?"

Vikas Gupta: "The start of the year has been strong, but it's too early to revise our guidance. However, I believe we have a higher probability of achieving our guidance based on Q1 performance."

2. Amlan Jyoti Das: "What is the contribution from the new MedTech business to your India revenues this quarter?"

Vikas Gupta: "We've just started the MedTech business with revenues of around INR2.5 crores. While it's minimal now, customer response has been positive, and we're optimistic about scaling it up in the future."

3. Neha Manpuria: "What drove the gross margin improvement?"

Nitin Agrawal: "The improvement was due to lower API prices and an increased contribution from our domestic business. However, we still face 3% to 4% price drops in the U.S., so our guidance remains at a gross margin of around 64%."

4. Rashmi: "What are your strategies regarding potential tariffs in the U.S.?"

Vikas Gupta: "Tariffs are hypothetical; we'll adapt as needed. Meanwhile, we're focused on scaling our non-U.S. business and validating our strategies regardless of potential tariff impacts."

5. Gaurav: "What is the revenue from Enzene in Q1?"

Nitin Agrawal: "Enzene generated around INR90 crores in revenue for Q1, including CDMO business in the U.S., with EBITDA near breakeven."

6. Sandeep: "When do you plan to submit Enzene's Denosumab biosimilars in the U.S.?"

Vikas Gupta: "We've already filed the BLA for Denosumab, expecting approval around mid-next year, aiming for commercialization after patent expiry around May '26."