Alembic Pharma

The US business grew 5% to ₹467 crores, a result that masks a significant 25% surge in volumes. This volume growth was necessary to offset persistent price erosion, which management characterized as being in the high single to low double digits. With 8 launches in Q2 and another 10 planned for H2, management expects market share gains to accelerate as these products ramp up. The oncology facility also successfully cleared a surprise US FDA inspection with zero observations (no Form 483).

India revenue grew 6% to ₹609 crores, led by strong performance in specialty segments like Antidiabetic (18%), Ophthalmology (13%), and Cardiology (11%). However, the Acute segment, particularly the flagship brand Azithral, faced a high base and a slow start to the monsoon season, leading to flat performance. Management expects a recovery to high single-digit growth in H2, driven by improved doctor footfalls and better productivity from the existing field force rather than headcount expansion.

The API business was a major drag this quarter, declining 15% YoY. Management attributed this to a 'fundamental business shift' where some partners moved to alternate sources for better pricing. Increased aggression from Chinese suppliers and general price erosion in the segment have impacted margins. While management expects H2 to remain at these lower levels, they anticipate a recovery starting in FY26 as they work to regain lost accounts and leverage their high-margin API portfolio.

Alembic is making significant investments in the peptide and GLP-1 space, including a new peptide block at their existing API facility. They have confirmed plans to target Semaglutide and Tirzepatide with in-house manufacturing capabilities developed over the last 4-5 years. While they admit they will be 'a little late' and not part of the first generic wave for Semaglutide, they view the expanding indications for GLP-1s as a massive long-term opportunity that justifies current capex.

Gross borrowings rose to ₹995 crores, up from ₹784 crores a year ago, primarily due to a ₹200+ crore dividend payout and strategic inventory build-up to support H2 launches. Management expects working capital to normalize and debt to reduce significantly by the end of the fiscal year. R&D guidance was slightly moderated to ₹500-520 crores as the company focuses on more complex filings, which has caused a temporary lag in the number of ANDA submissions.