Alembic Pharma falls 6% post March quarter results

Alembic Pharma Q4FY21 operational performance was marginally below estimates, largely due to lower traction in US and Domestic Formulation (DF) sales

Shares of Alembic Pharmaceuticals dipped 6 per cent to Rs 948 on the BSE in intra-day trade on Wednesday following a weaker-than-estimated operational performance in the March quarter of the financial year 2020-21 (Q4FY21).

The company’s consolidated earnings before interest, taxes, depreciation and amortization (Ebitda) margins declined 45 basis points (bps) to 26.7 per cent in the March quarter (Q4FY21).

The consolidated adjusted profit after tax (PAT) grew 6.5 per cent year-on-year (YoY) to Rs 251 crore. The company’s Q4 revenues grew 6.1 per cent YoY to Rs 1,280 crore with strong growth in RoW formulations and API segment being partly offset by a 17.7 per cent YoY decline in US sales to Rs 475 crore.

Alembic Pharma's Q4FY21 operational performance was marginally below estimates, largely due to lower traction in US and Domestic Formulation (DF) sales. The company awaits feedback from the USFDA on the resolution of observations at the recently inspected injectables Unit (F3). 

"We tweak our estimates for FY22/FY23, factoring in a slowdown in US sales and lower expensing of the operational cost related to newer facilities," analysts at Motilal Oswal Securities said in result update.

Alembic Pharma’s Q4 topline performance was in line with expectation (albeit skewed), impacted by the decline in US sales. Profitability was better-than-expected due to lower-than-expected staff costs, other expenditure (ex-R&D) and a lower tax rate, ICICI Securities said in a note.

Owing to pricing pressure across the Sartan portfolio, the management expects US quarterly sales to remain subdued in the near term. In the API segment with Chinese players returning to the market, the management expects some sales moderation but expects steady growth. Apart from this, the management is aggressively spending on R&D and manufacturing for US oncology, injectables, derma segments which provides growth optimism for the medium to long-term but may impact near term margins, the brokerage firm said.