Alkem Laboratories on Friday reported 70 percent fall in net profit to Rs 71.6 crore in the first quarter ended June impacted by destocking of inventory in trade channels on account of GST rollout from July 1.
Alkem Laboratories on Friday reported 70 percent fall in net profit to Rs 71.6 crore in the first quarter ended June impacted by destocking of inventory in trade channels on account of GST rollout from July 1.The company posted net profit of Rs 238.8 crore in the corresponding period previous year. Revenues declined 12.5 percent to Rs 1295.2 crore.
Alkem domestic formulation sales declined 21.4 percent to Rs 867.5 crore. India contributes little over two-thirds of Alkem total revenues on channel destocking due to GST rollout.According to market research firm AIOCD AWACS – the inventory days have declined from 37 days at the end of May 2017 to 13 days on June 28.
US sales that constitutes company’s major portion of international business contributed 23.3 percent to total sales for Q1FY18.
In Q1FY18, the company filed 2 ANDAs with the US FDA and received 2 final approvals. As on June 30, 2017, the company has filed a total of 93 ANDAs including 1 NDA with the US FDA and has received 40 approvals including 6 tentative approvals.
The R&D investments during the quarter was 5.4 percent of total revenue from operations. Alkem said it has successfully closed the US FDA inspection at its bioequivalence facility at Taloja, Navi Mumbai without any Form 483 observations.
“Q1 FY18 has been a below-par quarter, not only for the company but for the entire Indian pharmaceutical market as the stockist and other trade partners operated at a significantly lower inventory levels in the run-up to the GST roll-out on July 1, 2017,” said Prabhat Agrawal, Chief Executive Officer of Alkem.
“However, we expect the inventory levels to gradually normalise over the remaining part of the financial year, leading a pick-up in growth rates in the domestic business,” Agrawal said.Shares of Alkem dropped 5.04 percent and were trading at Rs 1632.80 on BSE at 2.54 pm, the benchmark Sensex declined 1.04 percent to 31,203.23 points.