Conference Call with Alkem Laboratories Ltd. Management and Analysts on Q2FY21 Performance and Outlook. Listen to the full earnings transcript.
Conference Call with Alkem Laboratories Management and Analysts on Q1FY21 Performance and Outlook. Listen to the full earnings transcript.
Conference Call with Alkem Laboratories Management and Analysts on Q4FY20 and Full Year Earnings Performance and Outlook. Listen to the full earnings transcript.
Comments from Sandeep Singh, Managing Director
The lockdown resulted in significant delays in transportation starting from March 22. Despite this we saw healthy double digit growth in Q4, and our international business grew 20%+ led by the US which grew 25%. In dollar terms growth was 22% YoY. For the full year India grew 11.9% and crossed Rs. 5000 crore revenue mark. Adjusting for the lockdown growth would have been even higher.
As per IQVIA data, during the quarter, the company registered value growth of 8.8% YoY, compared to the Indian Pharmaceutical Market (IPM) growth of 9.6% YoY.
For the twelve months ended March 2020, the company's secondary sales grew by 16.9% YoY compared to industry growth of 10.8% YoY. The outperformance during the year was mainly led by the anti-infectives segment in which the company grew at more than 1.5x the therapy growth rate.
Also in the vitamins/ minerals/ nutrient segment, the company grew at more than 2x the therapy growth rate. In the chronic therapy segments like neuro / CNS, cardiac, anti-diabetes and derma, the company continued to grow significantly ahead of the therapy growth rate, thereby gaining market share and improving its market ranking.
This outperformance was driven by the company's strong brands, effective sales and marketing strategies, robust supply chain and distribution network and contribution from new product launches. During the quarter we had two launches in the US market and over the entire year 14 new launches in the US.
US grew 16% YoY and crossed key dollar milestones. Our EBITDA margin expanded by 220 bps YoY.
Our focus on cost containment, better productivity and higher capacity utilization will be key drivers for EBITDA margins.
We invested Rs. 470 crore in R&D. We received 22 approvals in our ANDAs with 6 tentative approvals as part of the list.
All our six manufacturing facilities in India have received EIRs as of current date. We continue to invest in standards for these facilities.
We have observed an overall slowdown in new prescription generation, shutdown of OPDs and slowing of elective treatment. We expect that to continue until the lockdowns are lifted.
While FY21 has started on a challenging note due to COVID-19, we are positive that the inherent business strengths that we have built over the years in terms of strong brands, marketing and distribution infrastructure and H&U investments, will help us to navigate through these testing times and deliver a sustainable and a profitable growth.
Earnings Call Transcript - Call with Alkem Management and Analysts on Q3FY20 Performance
Opening Remarks
Quarter 3 FY2020 has been a strong quarter for the company with revenue growth of 13.3%, EBITDA margin of 20.8%, which is a significant 450 basis points improvement over the last year, and net profit growth of close to 89%. Similarly, for the 9 months of this financial year, we delivered a revenue growth of 14.4%, EBITDA margin of 18.6%, which is 260 basis points higher than last year; and a net profit growth of 58.2%. Touching upon the key performance highlights of the quarter, our India business, which contributed about two-third to overall sales, grew by 14.1%.
The growth was broad based with all our 3 segments, acute, chronic and trade generic, registering a healthy year-on-year growth. As for IQVIA data, our secondary sales grew at more than 1.5x the IPM growth rate. This was largely driven by significant growth in our anti-infective portfolio, which registered a secondary growth of close to 21% compared to the therapy growth rate of 12%. In gastrointestinal and vitamins segment also, we delivered a secondary sales growth, which was higher than the market growth rate, thereby maintaining our leading position in these therapies.
In our chronic segments like neuro, CNS, cardiac, anti-diabetes and derma, we grew significantly ahead of the therapy growth rate, thereby improving our ranks and market share. We have a comprehensive product portfolio with several market leading brands, which are well complemented by a large field force and pan India distribution network. This along with effective sales and marketing strategies, have been the key reason for our strong performance in India market. Coming to international business, which contributed about one-thirds to overall sales and grew by 11% during the quarter. This was mainly driven by our US business, which grew at 12.6%. During the quarter, we invested about Rs.121 Crores in R&D, which is about 5.5% of operating revenue.
We filed 4 ANDAs during the quarter, and received 4 approvals, which includes one tentative approval. Thus, for the 9 months of this financial year, we have filed a total of 11 ANDAs and received 15 approvals, including 4 tentative approvals. On cumulative basis, we now have a product pipeline of 136 ANDAs, already filed with US FDA, with 70 final approvals. With more than half our filings yet to be commercialized, timely product approvals and their launches would be our key focus to drive growth in the US market.
Talking about CGMP inspections, I am very happy to share that during the quarter, the US FDA inspected our Bioequivalence center located at Taloja. We cleared the inspection without any Form 483. Also in November 2019, both our formulation facilities in India at Daman and Baddi received an EIR. To update, we just concluded an inspection at St. Louis last night, which we have updated the stock exchange. We got three 483s, and we would like to highlight that we had got eight 483s than last time, and none of them have repeated this time. We are confident that we will close this in the next few months.
Summing up the performance for the quarter and 9 months gone, I would like to say that we have already made a lot of investments in our people and infrastructure, which we are looking to leverage going forward. Improving the productivity and utilization would be one of the important focus areas for the company.
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