India’s Alembic Pharma Q2 profit roughly in-line with estimates

BENGALURU (Reuters) – India’s Alembic Pharmaceuticals on Tuesday reported second-quarter profit roughly in line with estimates, as higher sales in its domestic and overseas markets offset a jump in expenses.

The generic drugmaker’s consolidated net profit came in at 1.37 billion rupees ($16.5 million) for the quarter ended Sept. 30, up 3% from last year.

It was largely in-line with analysts’ estimate of 1.38 billion rupees as per LSEG data.

Analysts expected generic drugmakers to benefit from new product launches and easing price competition in the United States, from where Indian pharmaceutical companies draw the bulk of their revenue.

The waning impact of high-cost inventories also helped these companies, they added.

Alembic Pharma’s revenue from operations rose 8%, with all of its segments posting growth in the reporting quarter.

Its India and U.S. segments grew 5% and 6%, while the rest of the world (ROW) segment, which includes markets like Europe, Australia and Brazil, grew 17%.

The company makes drugs like Azithral, used to treat bacterial infections, and anti-ulcer medicine Deltone, besides active pharmaceutical ingredients (APIs) used in drugs to manage diabetes, osteoporosis and depression.

Its API business, which constitutes 20% of the revenue, climbed 10%.

However, expenses rose about 10%, mainly due to higher raw material costs, which caused the company’s core profit margins to shrink to 14% from 16% a year earlier.

Last month, larger peers Cipla and Dr Reddy’s Laboratories beat second-quarter profits estimates, helped by higher sales in the U.S.

($1 = 83.2340 Indian rupees)

(Reporting by Kashish Tandon in Bengaluru; Editing by Varun H K)