Concall Summary: Alembic Pharmaceuticals Ltd Q1FY21

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Business updates

  • The net borrowings stand at Rs 1179 crores
  • The SARTANS market is quite stable and no single company has too big a market share
  • The current quarter was an exceptional quarter for Europe & ROW business along with good performance in the API business
  • The management expects growth in API business to continue in subsequent quarters as well
  • Have filed 8 ANDA’s during the quarter and cumulative approvals stand at 125
  • The India business de grew by 7% YoY


  • Aviva
  • JM Financial
  • Axis Capital
  • Vallum Capital
  • HSBC Securities
  • Credence Wealth
  • Dalal & Broacha
  • Nirmal Bang
  • Sanmati Consultants
  • Equirus
  • Centrum Broking
  • Mittal Analytics


  • Two major expenses got reduced, which are field people who couldn’t travel and also sales promotion expenses.
  • The R&D expenses were also comparably lower
  • In the US, the company will be launching 15-20 products during the current year
  • The competitive intensity in the US market has come down a little bit and the company will continue to invest in the market
  • The liquid formulations are a drag at the current moment in the India business
  • The company is not getting into biosimilars
    • There are 3-5 companies that are dominant in the SARTANS portfolio
    • Not chasing market share but chasing higher profitability within the SARTANS opportunity
    • Currently, the company is holding onto its market share in SARTANS and it is up to them to lose
  • The target for the US markets is to launch 15-20 products on an annual basis for the next few years
  • API
    • The API segment has not been a focus area for the last few years
    • The API sales are lumpy because we do contract manufacturing for a client in the USA
  • There is no clarity on the domestic business because states are going into lockdown at different times and thus predictions on domestic business will be a guesswork
    • The maintenance CAPEX is Rs 350 crores a year
    • Over the next two years planning to spend Rs 650 crores on expanding injectable facility
    • The government is relaxing regulations on API facility so will be spending CAPEX on API facilities as well
  • The management is looking at a QIP which will be used to augment capacity as well as payback some debt
  • There was zero revenue in the current quarter from the contract manufacturing business in API segment
  • In the ROW market, the company has no front end and works on a B2B basis
  • In the US market, the company sells to the distributors and sales channel
  • The injectable portfolio will start with plain vanilla products and then slowly move towards complex generic products.
  • Will be filing in the oncology segment over a period of six months
  • No decision currently by USFDA as to when inspections for the new facilities will start
  • The product shortages in the US market have been continuing for a long time and the management remains confident of the opportunity in the US market
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Image source: Company website

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Karan Sharma

Karan Sharma

The Concall Summary Guy | CFA | Investor
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