Alembic Pharmaceuticals Limited — Q4 FY25 earnings call

Call held 6 May 2025

Management summary

Alembic Pharma delivered a strong finish to FY25, characterized by robust double-digit growth in international markets and a recovery in the US generics segment. While gross margins have moderated to 70% due to product mix, management is focused on operating leverage from new facilities to drive EBITDA margins toward 18-20%. The company is pivoting its R&D toward complex injectables and peptides, aiming for high-value launches in FY26 and beyond.

Highlights

  • Q4 Revenue grew 17% YoY to ₹1,770 crores, driven by strong international performance.

  • FY25 full-year revenue reached ₹6,672 crore, a 7% increase over the previous year.

  • EBITDA margin remained stable at 16% for both Q4 and the full year FY25.

  • US Generics business grew 20% in Q4 to ₹508 crores; Ex-US (ROW) Generics surged 43% to ₹375 crores.

  • India business grew 8% in Q4 to ₹545 crores, with Animal Health growing 19%.

  • R&D spend for FY25 was ₹522 crores (approx. 8% of sales), with guidance increasing to ₹600-650 crores for FY26.

  • Net Profit for Q4 stood at ₹157 crores, impacted by higher tax provisions.

  • Management announced a dividend of ₹11 per equity share (550% on par value of ₹2).

Key financials

  1. Revenue ₹1,770 Cr +17%YoY
  2. EBITDA ₹286 Cr +9%YoY
  3. EBITDA Margin 16%
  4. Net Profit ₹157 Cr
  5. EPS ₹7.98 -12%YoY

What they filed

Q1 FY27: revenue up 25.7%, net profit up 11.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,648 1,693 1,770 1,711 1,910 +16%1,876 +11%1,848 +4%2,150 +26%
EBITDA239 260 271 281 316 +32%292 +12%228 −16%332 +18%
Net profit153 138 157 154 184 +20%132 −4%202 +29%172 +12%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹1,770 Cr Total
  • India Business ₹545 Cr 30.8%
  • US Generics ₹508 Cr 28.7%
  • Ex-US Generics (ROW) ₹375 Cr 21.2%
  • API Business ₹342 Cr 19.3%

Guidance & targets

Revenue

  • US Business Growth Revenue · FY26 · Medium confidence 15%
    I expect that from what we are seeing, a mid-teen, like a 15%-odd should be a good growth for the U.S. market.

    — Pranav Amin, Managing Director

  • ROW Business Growth Revenue · FY26 · Medium confidence 12-15%
    The ROW business will continue between 12%, 15%, somewhere around there.

    — Pranav Amin, Managing Director

  • India Business Growth Revenue · FY26 · High confidence 10% plus
    we are quite confident that we have a plan in place to drive a 10% plus growth.

    — Shaunak Amin, Managing Director

  • API Business Growth Revenue · FY26 · Medium confidence 10%
    growth and the API should be about 10% or so.

    — Pranav Amin, Managing Director

Margin

  • EBITDA Margin Target Margin · next couple of years · Medium confidence 18-20%
    How do we go back up to like 18%-19%-20% kind of EBITDA levels? ... we will see EBITDA margins going up over the next couple of quarters and next couple of years.

    — Pranav Amin, Managing Director

Capex

  • Maintenance and Regular Capex Capex · FY26 · High confidence ₹400-450 crores
    Roughly I am budgeting about Rs. 400 crores-Rs. 450 crores. This should include some spillover of expense which will come from those existing projects.

    — R. K. Baheti, CFO

Other

  • R&D Expense Other · FY26 · High confidence ₹600-650 crores

    Previously ₹550 crores → ₹600-650 crores

    Next year again, we'd look at about 600 to 650, depends on how the project goes.

    — Pranav Amin, Managing Director

Risks & concerns

  • US Pricing Pressure

    medium

    Pricing pressure remains persistent in the U.S. market on a product-to-product basis.

    Management acknowledged

  • Chinese Competition in API

    medium

    Chinese players are back in the market with aggressive pricing, impacting API business margins and volumes.

    Management acknowledged

  • Inventory Buildup

    low

    Inventory levels rose due to anticipated US launches and facility utilization; management expects this to taper down in FY26.

    Analyst acknowledged

Areas of evasion (1)

  • Specific high-value product names for the 15+ US launches were kept general (20-30% interesting opportunities).

Q&A highlights

3 direct
US Tariffs and Backup Manufacturing Plans Direct
No one has enough capacity in the U.S... only about 10% of the volumes can be manufactured in the U.S. So the rest of it is, going to be a huge shortfall.

Management clarifies that US tariffs would be a macro industry issue rather than a company-specific risk, as domestic US capacity is insufficient to meet demand.

Asked by Damayanti Kerai

Gross Margin Compression and EBITDA Outlook Direct
Our internal target is about 70% because all the new launches and the price erosion and the higher volumes that we are pushing.

Management resets expectations for gross margins at 70% (down from 74%) but expects EBITDA expansion through operating leverage from new injectable facilities.

Asked by Rashmi Shetty

Peptide Pipeline (Semaglutide and Tirzepatide) Direct
Semaglutide we are a little late for the U.S. launch... whereas Tirzepatide is the one we hope to be there on day one.

Provides specific timelines for high-value GLP-1 opportunities, indicating a strategic focus on being a 'Day 1' player for Tirzepatide.

Asked by Damayanti Kerai

2 min read 5 chapters

Detailed narrative

International Markets Drive Growth

The International business was the primary growth engine in Q4, with US Generics growing 20% to ₹508 crores and Ex-US (ROW) Generics surging 43% to ₹375 crores. For FY26, management expects the US business to maintain mid-teen growth (approx. 15%) supported by a pipeline of 15+ new launches. The ROW business is also projected to grow steadily between 12-15%.

Strategic Pivot to Complex Injectables and Peptides

Alembic is significantly increasing its R&D investment to ₹600-650 crores in FY26, with 30-35% of this spend dedicated to peptides and complex injectables. The company aims to be a 'Day 1' player for Tirzepatide in all markets, although it acknowledges being late for the US Semaglutide launch. Nearly 45% of new filings are now focused on the injectable segment.

Margin Expansion through Operating Leverage

While gross margins have stabilized at 70% due to product mix and price erosion, management is targeting an EBITDA margin of 18-20% over the next few years. This expansion is expected to come from higher capacity utilization at three new facilities, particularly the newer injectable plants. Operating leverage from optimized R&D spend (down from 14% to 8-9% of sales) will also contribute to profitability.

India Business and Animal Health Resilience

The India business grew 8% in Q4, reaching ₹545 crores, with a full-year topline of ₹2,339 crores. Animal Health remains a 'bright spot,' growing 19% in the quarter and 21% for the full year. Management is confident in driving 10% plus growth in the domestic market for FY26, supported by 14 new launches in the past year and a stable field force of 5,500 MRs.

API Business Recovery and Capex Outlook

The API business returned to growth in Q4 (+4%) after a 9% decline for the full year, primarily due to pricing pressure from Chinese competitors. Management expects a 10% recovery in API for FY26. Capex is expected to moderate to ₹400-450 crores as major projects like the Pithampur facility and peptide blocks are now commissioned.

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