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Price erosion in Sacubitril/Valsartan
View Risks →Alkem Laboratories Limited — Q2 FY26
Alkem delivered a strong Q2 FY26 with revenue of INR 4,001 crore (+17.2% YoY), EBITDA of INR 921 crore (+22.3% YoY), and PAT of INR 765 crore (+11.1% YoY).
bullish
high
Financial stats pending filing verification
2-Minute Summary
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Alkem delivered a strong Q2 FY26 with revenue of INR 4,001 crore (+17.2% YoY), EBITDA of INR 921 crore (+22.3% YoY), and PAT of INR 765 crore (+11.1% YoY). India business grew 12.4% YoY, US sales surged 28% YoY driven by Sacubitril/Valsartan launch, and non-US markets grew 32.4% YoY. EBITDA margin expanded to 23%, aided by gross margin improvement and operating leverage. Management expects India to outperform IPM by 100-150 bps and US to deliver low double-digit growth for FY26. Full-year EBITDA margin guidance is 19.5-20%, with H2 headwinds from US CDMO plant OpEx (~INR 50 cr/quarter) and GST impact (~INR 50-60 cr in H2). Key risk: price erosion in Sacubitril/Valsartan could pressure US growth.
अल्केम की दूसरी तिमाही (जुलाई-सितंबर 2025) के नतीजे मजबूत रहे। कंपनी ने 4,001 करोड़ रुपये का कारोबार किया, जो पिछले साल से 17.2% ज्यादा है। मुनाफा 765 करोड़ रुपये रहा, जो 11.1% बढ़ा। भारत में बिक्री 12.4% बढ़ी, अमेरिका में 28% का उछाल आया (खासकर नई दवा सैक्यूबिट्रिल/वलसार्टन की वजह से), और दूसरे देशों में 32.4% की बढ़त हुई। कंपनी का मुनाफा मार्जिन 23% रहा। प्रबंधन का अनुमान है कि भारत में बिक्री बाजार से 1-1.5% ज्यादा बढ़ेगी और अमेरिका में सालभर में 10-12% ग्रोथ रहेगी। पूरे साल मार्जिन 19.5-20% रहने का अनुमान है, लेकिन दूसरी छमाही में अमेरिकी कारखाने के खर्च (हर तिमाही 50 करोड़) और जीएसटी (50-60 करोड़) से दबाव पड़ सकता है। खतरा: सैक्यूबिट्रिल/वलसार्टन की कीमत गिरने से अमेरिकी ग्रोथ प्रभावित हो सकती है।
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Read Transcript →Quarter Snapshot
India Sales Growth
INR 2,766 crore
+12.4% YoY
India business grew 12.4% YoY, outperforming IPM by 100-150 bps as guided.
US Sales Growth
INR 765 crore
+28% YoY
US sales boosted by Sacubitril/Valsartan launch; constant currency growth ~23.5%.
Non-US Sales Growth
INR 424 crore
+32.4% YoY
Strong performance in Germany and Australia; management expects high-teens growth for FY26.
R&D Spend
INR 130 crore
3.3% of revenue
R&D at 3.3% of revenue in H1; expected to reach 4-5% for full year as filings ramp up in H2.
What Changed vs Last Quarter
NEW
US business to deliver low double-digit growth in FY26
US growth expected to be ~10-11% for FY26, driven by new launches including Sacubitril/Valsartan.
NEW
US CDMO plant to reach INR 300 crore annual run rate in 12-18 months
The US CDMO plant is expected to achieve an annual revenue run rate of INR 300 crore within 12-18 months of operations.
UPDATED
India business to outperform IPM by 100-150 bps
Management expects India growth to continue at double-digit, outperforming IPM by 100-150 bps in H2 FY26 and FY27.
UPDATED
Full-year EBITDA margin guidance of 19.5-20%
Despite H2 headwinds from US CDMO OpEx and GST impact, management expects FY26 EBITDA margin of 19.5-20%.
DROPPED
U.S. business mid-to-high single digit growth expected
U.S. business is expected to grow mid-to-high single digit in FY26, subject to tariff and pricing trends.
DROPPED
CapEx of INR 750 crore for FY26
Capital expenditure for FY26 is guided at INR 750 crore, primarily for CDMO and biosimilar facilities.
NEW RISK
Price erosion in Sacubitril/Valsartan
The key US launch faces competitive pressure; price erosion could impact US growth trajectory in coming quarters.
NEW RISK
GST impact on profitability
Loss of Sikkim facility benefit will result in INR 50-60 crore impact in H2, pressuring margins.
NEW RISK
US CDMO plant ramp-up risk
New US CDMO plant will incur ~INR 50 crore quarterly OpEx with only ~INR 20 crore revenue initially, delaying breakeven.
NEW RISK
Penicillin G MIP uncertainty
Potential government MIP on penicillin G could increase costs; management declined to comment as it is speculative.
RISK GONE
U.S. tariff impact on pharma exports
Potential U.S. tariffs could affect pricing and margins; management acknowledged uncertainty and said they will evaluate strategies once tariffs are announced.
RISK GONE
Higher R&D and new business OpEx in H2
Management flagged that R&D spends (4.5-5% of sales) and OpEx from CDMO/medtech initiatives will weigh on H2 margins, potentially offsetting operational improvements.
RISK GONE
U.S. pricing erosion continues at 3-4%
U.S. business faces ongoing price erosion of 3-4% YoY, which could pressure margins if volume growth does not compensate.
RISK GONE
Medtech and CDMO businesses may take longer to break even
Medtech business expected to break even only by FY28, with losses of INR 40-60 crore in FY26-27; CDMO facility will start contributing meaningfully only from Q4.
🤫 Topics management stopped discussing
Mentioned in Q1 FY26, Q4 FY25
Capital expenditure for FY26 is guided at INR 750 crore, primarily for CDMO and biosimilar facilities.
Mentioned in Q1 FY25, Q3 FY25
Q4 implied growth of ~9.5-10% driven by strong secondary optics and low base.
Mentioned in Q2 FY25, Q4 FY25
Management expects EBITDA margins to remain stable at around 19.5% in FY26, supported by operating leverage and despite higher R&D investments.
Mentioned in Q2 FY25, Q3 FY25
Price erosion in US generics is ~5% (2.5% on NRV basis) and expected to persist, pressuring US revenue growth.
Mentioned in Q1 FY25, Q4 FY25
US revenue is expected to grow at a mid-single-digit rate in FY26, driven by 5-6 new product launches and improved supply.
Fast read
Guidance and risk preview
Management expects India growth to continue at double-digit, outperforming IPM by 100-150 bps in H2 FY26 and FY27.
The key US launch faces competitive pressure; price erosion could impact US growth trajectory in coming quarters.
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