- 05 Aug 2022
- ICICIdirect Research
Alembic reports weak Q1, US concerns persistAPLLTD - 485 Change: -4.90 (-1.00 %)
News: Revenues declined 5% YoY to Rs 1262 crore. Domestic Formulations was flat YoY at Rs 480 crore while domestic business grew by 20% YoY adjusting for Covid sales in Q1FY22. US generics was also flat YoY at Rs 367 crore, mainly due to price erosion across the portfolio and high stocking in Q4FY22. International formulations sales de-grew 8% YoY at Rs 182 crore while APIs also declined 16% YoY to Rs 233 crore mainly impacted by lower volumes. EBITDA margins declined by 1647 bps YoY to 1.2% mainly due to higher other expenditure (Aleor’s recurring R&D expenses of Rs100 crore). Adjusted EBITDA margins were at ~ 9.1%. EBITDA declined 94% YoY to Rs 15 crore. Adjusted EBITDA for Q1FY23 was Rs 115 crore. Alembic posted loss of Rs 66 crore versus adjusted PAT of Rs 164 crore in Q1FY22. Adjusted for Aleor’s impact, PAT was at Rs 36 crore.
View: Alembic’s numbers were a miss on revenues on back of lower traction in the US and RoW markets. On the profitability front, Q1 was impacted as intangible assets (R&D development expenses) of Aleor Dermaceuticals worth Rs 115 crores were charged off during the current quarter. India branded business continues to perform well on back of 23% YoY growth in specialty segment and likelihood of recovery in acute segment. US is weighing on numbers as company is witnessing double-digit price erosion and squeezing of base business. New launches and commercialization of new facilities earmarked for the US market and consistency of performances in the Indian branded formulations are key levers for the company.