Alembic Pharmaceuticals is looking towards FY26 with optimism, anticipating a resurgence in domestic market volumes, continued growth in the US despite price pressures, a steady active pharmaceutical ingredient (API) business, and strategic expansion in non-US international markets, the company chief financial officer (CFO) R.K. Baheti told Moneycontrol.
Baheti said the company expects improved EBITDA margins in FY26, led by improved capacity utilisation, and relatively lower capex spends in FY26. The Ahmedabad-based drugmaker's EBITDA margin stood at 16 percent in FY25, while the capex was Rs 575 crore.
"As we ramp up our revenues and my facilities get optimally utilised, my EBITDA margin should only go up from here," Baheti projected. Capital expenditure is expected to be "much lower" in FY26, as major projects are largely completed. R&D expenditure will continue to be significant, targeted at "about 7-8 percent of our revenues," focusing on oncology, non-onco injectables, and peptides, including GLP-1 products.
Alembic Pharma reported Rs 1,770 crore revenue in Q4FY25, a 17% YoY increase and 5% quarter-on-quarter (QoQ) growth led by growth across segments including domestic formulation, US, non-US international markets and APIs.
The company reported an Ebitda of Rs 286 crore, up 9% YoY and 6% QoQ. Net Profit stood at Rs 157 crore, representing a 12% YoY decrease but a 14% QoQ increase. For the financial year FY25, revenue grew 7.1% YoY to Rs 6672 crore, while net profit declined 5.2% to Rs 584 crore.
Expects bounce back of domestic formulation volumes
The Indian domestic market, a significant revenue contributor, is poised for a revival in FY26, with expectations of volume growth returning after a period of normalization. Indian formulation business constitutes about 35% of total revenue saw 6.1 percent growth to Rs 2339 crore which is less than the Indian pharmaceutical market (IPM) growth of 8.4 percent in FY25. The company attributed to the slower growth to volume drop in its acute segment.
"I think volume should come back. Growth will come back," Baheti stated, reflecting confidence in the market's recovery. This optimism is partly tied to easing food inflation, which is expected to increase disposable income for healthcare. "With low inflation and if we continue to have a decent GDP growth rate... I think we should see revival not only in pharma, but in FMCG and other discretionary purchase items," he elaborated.
While FY24-25 was seen as a year of volume normalization, FY26 is anticipated to bring healthier growth dynamics. The company plans to capitalize on upcoming patent expiries, with . Baheti confirming, "So, FY26. So, we will be launching almost all products which are going off patent and which are available in the country," particularly in cardiovascular, gastroenterology, and gynecology.
Alembic ranks 20th in the Indian Pharmaceutical Market (IPM). Sales operations include 5,500+ Medical Representatives across 21 marketing divisions. Four flagship brands surpassed Rs 100 croer in sales. Animal Health division recorded 19% growth in FY25
US market
Despite ongoing price erosion challenges in the U.S. generics market, Alembic Pharma is eyeing robust growth. US contributed about 27% or Rs 1957 crore of Alembic's revenue, grew 13.1 percent in FY25. "Unfortunately, price erosion in spite of all our expectations that they have come to a level where further erosion may be limited, etc., etc., but price erosion continues," Baheti said.
For FY26, the company is "expecting to launch about 20 products in US, almost throughout the year." These launches will include "quite a few" day-one and limited-competition opportunities, primarily oral solids and some injectables. Based on these plans, Baheti suggested, "I can assume any growth of 15% upwards as far as US is concerned." The potential impact of U.S. tariffs remains an uncertainty, though the belief is that it "may not have large impact on Indian generic companies because India, rather US needs Indian generic companies as much as we need US market."
API
The active pharmaceutical ingredients (API) segment that contributes about 17% of revenues declined 9.1% YoY. The segment has shown signs of a comeback. Baheti noted that the "API came back to growth path after three quarters." He further explained that the recent small growth in Q4 was "largely driven that we are regaining some of our customers at a lower price." Raw material costs have "remained soft", but future market dynamics, particularly China's behavior in response to potential U.S. entry barriers, are being watched closely. "Going forward, we do not know how China will behave because if China gets some kind of an entry barrier in US and if it decides to dump in other markets, then I think there can be trouble for a lot of companies," he cautioned.
Non-US markets
Alembic Pharma is actively pursuing a strategy of geographic diversification beyond the U.S. "We are making conscious efforts to diversify our regional portfolio," Baheti confirmed. This strategy is driven by a desire to de-risk from the U.S. market's volatility and leverage expanded manufacturing capacities. "Now that we have created additional facility, we have more flexibility to diversify." Growth in non-US markets has been "massive", attributed to both demand and strategic efforts. Key growth regions include "Canada, Australia, Europe, and then some emerging markets, like Latin America in this year, in our case." The company sees an advantage due to its "USFDA-approved facility, we have USFDA-approved products, so we can get faster approvals" in these stringent regulatory environments. The new Indore plant is also expected to cater to domestic and some emerging markets.
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