Alkem Laboratories Limited — Q2 FY24
Alkem delivered a strong Q2 with 12% YoY revenue growth and EBITDA margin of 21.7%, well above the full-year guidance of ~16.5%.
bullish
high
✓ Verified against BSE filing
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
67%Questions answered3Evaded / deflected12Questions auditedContradictedNumbers vs filing
Partial answer
High priority
US business growth drivers and medium-term outlook
Asked by Saion Mukherjee, Nomura Securities
Provided qualitative outlook but no specific numbers for next two quarters.
no specific quarterly guidancequalitative only
Read the exchange
Question
So just a question on the U.S. We have seen a good increase quarter-on-quarter. If you can elaborate, you mentioned about volume growth, but are there any seasonal factors and how should we think about the next two quarters?
Amit Ghare, President of International Business
The first part of the question, there has been small seasonal effect in the quarter two numbers... For the next two quarters, obviously, our base is now higher, so repeating this kind of growth obviously is going to be a challenge... we are looking at a high single-digit growth in dollar terms.
Answered
High priority
Tax rate guidance for this year and next
Asked by Saion Mukherjee, Nomura Securities
Provided revised guidance range for current year.
Read the exchange
Question
You had guided for higher tax rate earlier, around 18%. So where do we stand? If that guidance holds for this year and next year?
Rajesh Dubey, President and CFO
Yes, our earlier guidance was somewhere close to 18%, but we reviewed our revenue generating from eligible unit, that is Sikkim, and we revised our guidance from 18% to 12%-15% for this year.
Answered
Medium priority
Tax rate trajectory for H2 FY24
Asked by Kunal Dhamesha, Macquarie
Provided specific range for H2 tax rate.
Read the exchange
Question
So that means second half would be 18%, right? Like, close to 18%.
Rajesh Dubey, President and CFO
Not 18%. So around 16%, kind of 15%-16%.
Answered
High priority
US price erosion rate and outlook
Asked by Kunal Dhamesha, Macquarie
Provided current rate and cautious outlook.
Read the exchange
Question
On the U.S. business, you said that the price erosion has kind of reduced, but any number that you would, or range that you would like to put out?
Amit Ghare, President of International Business
Currently, the pricing deflation is in the mid-single digit numbers, around 5%-6%. That's where it is. Future, we hope it remains in those levels, but future is future.
Answered
High priority
Gross margin guidance upgrade possibility
Asked by Rashmi Shetty, Dolat Capital
Reiterated existing guidance, no upgrade.
Read the exchange
Question
Do we upgrade our gross margin guidance from currently 59% to around 60%-61% now for this year?
Rajesh Dubey, President and CFO
I think we are going to remain... guidance we have given, we are going to remain, there only and not below that.
Answered
Medium priority
Enzene Biosciences sales and profitability
Asked by Rashmi Shetty, Dolat Capital
Provided specific sales figure and profitability status.
Read the exchange
Question
What was the sales contribution which has come in from that? How do we see the profitability also in this quarter?
Rajesh Dubey, President and CFO
I think the quarter was around INR 88 crores. In the quarter two... It's slightly negative, but close to breakeven.
Answered
High priority
Sustainability of high EBITDA margin
Asked by Bino Pathiparampil, Elara Capital
Provided annual EBITDA margin guidance.
Read the exchange
Question
This quarter margin has come exceptionally higher... you think this level is sustainable going forward?
Rajesh Dubey, President and CFO
I think we, if I forget the quarter, quarter is great, but this is not sustainable on an annual basis. I think we will be close to 16.5% for this year, year ending.
Partial answer
High priority
Update on Dabigatran and Suprep launches in US
Asked by Bino Pathiparampil, Elara Capital
Provided status but no timeline for resolution or launch.
no timeline for resolutionno launch date for Suprep
Read the exchange
Question
Any guidance on any update on launch of Dabigatran and in the U.S. and Suprep in the U.S.?
Amit Ghare, President of International Business
Dabigatran we obviously launched. We are the only one of the two generics which are approved, and we continue to face supply chain challenges... Suprep, we haven't launched. We haven't been approved and haven't launched as yet.
Evasive
Medium priority
Medium-term gross margin upside from Pen G price easing
Asked by Bansi Desai, J.P. Morgan
Acknowledged potential but gave no specific upside number.
hypotheticalno quantificationdeferred to future
Read the exchange
Question
If you were to take a medium-term view, assuming Pen G prices ease off, what is the upside on gross margin?
Rajesh Dubey, President and CFO
Our estimate says our gross margin is going to remain somewhere close to 59%-60%. Of course, we have considered Pen G price... if price comes back to $9, then accordingly there will be upside.
Evasive
High priority
Rank order contributors to gross margin expansion
Asked by Nithya Balasubramanian, Bernstein
Did not rank contributors; reiterated annual guidance instead.
no rank orderdeflected to annual guidance
Read the exchange
Question
If you can help us understand what were the contributors, at least if you can rank order the different contributors... so that we understand what is possibly one-off and what is likely to sustain.
Rajesh Dubey, President and CFO
There is nothing one-off in this quarter, Nithya, and our guidance is for annualized... Q2 is not, in all respect, indicator for annual. So 59.5%, I think, we'll be able to achieve.
Evasive
Medium priority
Achievement of INR 250 crore cost-cutting target
Asked by Gagan Thareja, ASK Investment Managers
Denied the specific number and reframed as overall cost savings.
denied specific targetreframed as overall
Read the exchange
Question
In the start of the year, you had indicated that for U.S. specifically, you had a INR 250 crore cost-cutting program. Are we trending at the INR 250 crore annualized savings?
Rajesh Dubey, President and CFO
I don't think INR 250 crore, it was alone for U.S. I think, we never quantified any amount... it is combination of USA, R&D, domestic plants...
Answered
Medium priority
Expected R&D spend on Denosumab
Asked by Kunal Dhamesha, Macquarie
Provided specific range for clinical trial cost.
Read the exchange
Question
One on the Denosumab, what is the expected R&D spend on this product?
Sandeep Singh, Managing Director
It'll be like between $30 million-$40 million for particular party. This is a clinical trial cost... R&D cost you could add up few million dollars.
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| Enzene Biosciences Q2 sales INR 88 crores | ₹88 cr | ₹3,440 cr | Understated vs filing |
| Annual EBITDA margin guidance around 16.5% | 16.5% | 21.7% | Understated vs filing |
| Gross margin guidance 59.5% on annualized basis | 59.5% | 21.7% | Overstated vs filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.