Detailed Narrative
Robust Q4 Performance and FY25 Summary
Alivus Life concluded FY25 with a strong Q4, reporting revenue of ₹650 crores, a 21.1% YoY increase. EBITDA margins for the quarter reached a high of 32.1%, driven by a favorable product mix and successful new launches in ROW markets. For the full year, the company achieved ₹2,387 crores in revenue, meeting its 4.5% growth guidance despite the absence of PLI benefits. The therapeutic mix remains dominated by CVS and CNS, which together contribute 55% of the top line.
Strategic Capex and Capacity Expansion
The company is embarking on an aggressive investment phase, guiding for ₹550-600 crores in capex for FY26. This includes ₹190 crores carried over from FY25 and ₹350-400 crores in new approvals for Greenfield expansion in Solapur, Brownfield expansion in Ankleshwar and Dahej, and a new R&D center near Mumbai (budgeted at ₹70-80 crores). Management has strategically pushed out the 2650 KL capacity line to FY28, opting to prioritize brownfield pharma capacity that will be completed this year.
US Market Dynamics: Navigating Pricing Erosion
The US market, which accounts for 25-30% of total business, is experiencing pricing erosion of approximately 4% to 4.5%, particularly on newer molecules. Despite this, management is confident in achieving mid-teens volume growth (~15%) in FY26, which they expect will translate into high single-digit revenue growth. The company also noted that the Ankleshwar plant received its EIR following a US FDA inspection in January 2025, reinforcing its regulatory standing.
CDMO Segment: Recovery and Pipeline Progress
After a soft year due to cyclical demand and customer destocking, the CDMO business showed signs of recovery with 22.6% growth in Q4. The segment currently relies on three commercial products, with a fourth project gaining traction and a fifth Japanese innovator project expected to commercialize in H2 FY26. Management targets scaling the CDMO business significantly by FY28, though they acknowledged that reaching 4x the FY24 size by then might be challenging.
Working Capital and the Glenmark (GPL) Relationship
Working capital days increased to 192 in FY25, largely due to a ₹200 crore increase in receivables from Glenmark Pharma (GPL). Under a new agreement, credit days for GPL have been extended to upwards of 150 days. While this impacts cash conversion, management maintains that the non-GPL business remains steady and the company continues to be net debt-free with ₹549 crores in cash and short-term investments.