Alkem Laboratories Limited Q3 FY26 Earnings Call Summary

Summary

Alkem Laboratories Limited - Q3 FY 2026 Earnings Call Summary Friday, February 13, 2026, 5:00 PM IST

Event Participants

Executives Kaustav Banerjee (CEO and President of Alkem MedTech), Manish Narang (President - Legal & Company Secretary), Nitin Agrawal (CFO), Purvi Shah (Head of Investor Relations), Sandeep Singh (Managing Director), Vikas Gupta (CEO)

Analysts Bharat Celly (Equirus Securities), Chirag Dagli (DSP Mutual Fund), Damayanti Kerai (HSBC), Kunal Dhamesha (Macquarie), Neha M (BofA), Nikhil Mathur (HDFC Mutual Fund), Saion Mukerji (Nomura), Sandeep (Cilbas)

Financials & KPIs

Geographic & Segment Commentary

• Domestic Market: Growth was reported at 5.5% YoY, though YTD growth is ~10%. Branded prescription business outperformed the IPM in six therapies (Anti-infectives 1.4x, Vitamins 2x, Respiratory 1.2x). Chronic segment grew at high teens, while the trade generic business remained flattish due to high competitive intensity.
• International Business: Delivered robust growth of 26.6% YoY. Focus remains on the U.S. and Europe, with the company preparing for the launch of Denosumab biosimilars in Europe in early FY27 and U.S. by late 2026.
• Alkem MedTech (New Segment): Strategic entry into the $10 billion Indian MedTech market. The segment aims for ₹1,000 crores in revenue over 3-5 years with 25% EBITDA margins, focusing on high-barrier Ortho and Cardio devices.

Company-Specific & Strategic Commentary

• Occlutech Acquisition: Alkem acquired a 55% stake in Occlutech for ~₹1,100 crores. This provides a platform for structural heart devices (occluders) in the U.S., Europe, and Japan, with a PFO occluder launch targeted for June 2027 in the U.S.
• Biosimilars (Enzene): Management noted clinical trials for Denosumab (Xgeva/Prolia) are progressing. Europe entry is expected within months, while the U.S. launch is delayed to late 2026 due to Amgen litigation.
• GLP-1 Expansion: The company is preparing for a “Day 1” entry into the Semaglutide market in India, planning to add specialized manpower to drive this launch.
• Operational Restructuring: Alkem Wellness was carved out as a separate entity; while it currently faces headwinds, the core prescription business remains the primary growth driver.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Acquisition Rationale (Saion Mukerji)

• Question: What is the strategic rationale for the Occlutech deal and its financial metrics?
• Answer: It is a research-oriented platform for high-entry-barrier markets (US/Japan). The company is the #2 player in Europe for heart occluders. It is already EBITDA positive for CY26, with a target of 23-24% margins in 3 years (Kaustav Banerjee/Nitin Agrawal).

Domestic Growth Divergence (Nikhil Mathur)

• Question: Why is primary growth lower than secondary growth this quarter?
• Answer: This is a base effect issue from last year’s distribution adjustments. Billing-to-billing growth for the prescription business remains strong at 10%+ (Vikas Gupta/Nitin Agrawal).

MedTech Investment (Damayanti Kerai)

• Question: What is the incremental investment required for MedTech?
• Answer: Approximately ₹200-300 crores over the next 3-4 years, largely to accelerate R&D clinical trials for products like the Left Atrial Appendage (LA) occluder (Sandeep Singh/Nitin Agrawal).

MIP Impact on Margins (Nikhil Mathur)

• Question: How will the MIP on PenG affect gross margins?
• Answer: Estimated impact is ₹80-100 crores. Alkem holds 4-5 months of inventory and will attempt to pass on costs in the trade generic segment to nullify the impact (Vikas Gupta).

Key Takeaway

Alkem Laboratories delivered a stable Q3 FY26 with total revenue growing 10.7% YoY to ₹3,736.8 crores, underpinned by 26.6% growth in international markets. While domestic growth appeared muted at 5.5% due to high-base distribution adjustments, the core branded business continues to outperform the market in key therapies. The quarter was highlighted by the strategic acquisition of a 55% stake in Occlutech for ₹1,100 crores, marking Alkem’s major entry into the global MedTech space with high-margin structural heart devices. Management expects this segment to reach ₹1,000 crores in revenue with 25% EBITDA margins within five years. Despite cost headwinds from new import floor prices on PenG, Alkem remains focused on chronic segment expansion and its biosimilar pipeline, with Denosumab launches expected in Europe shortly. The company maintains a positive outlook for FY27, targeting growth 100-150 bps above the Indian pharma market.