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.