Earnings Call Transcript - Q3FY20 for Alkem Laboratories
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. Click pdf to read full transcript09-02-2020