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Alembic Pharma Q4 Results Review

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Alembic Pharmaceuticals Ltd. reported a decent set of numbers for Q4 FY23, with revenue coming in line with our estimate and a beat on margins, driven by lower-than-expected marketing and promotional expenditure.

Revenue growth was flat at Rs 14 billion (our estimate: Rs 14.2 billion), largely on account of U.S. business sales declining by 42.6%/18.1% YoY/QoQ to $43 due to a high base and persistent pricing pressure.

However, this decline was offset by strong growth across other markets and active pharma ingredient business. India business grew by 9.1% YoY (excluding Covid 12% YoY) to Rs 4.9 billion, led by strong growth in both acute as well as specialty segments, and the company intends to outpace industry growth in FY24 through strong volume uptick. API business grew at a robust pace of 41.4% YoY to Rs 3.1 billion on the back of a better product mix and high offtake.

Alembic Pharma expects this momentum to continue with 10-12% growth expectation in FY24, backed by a strong order book. Ebitda margin contracted by 491 bps to 15.1% due to lower gross margin and higher operating overheads on account of commercialization of new facilities.

Alembic Pharma has guided for 15% Ebitda margin for FY24 as well.

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