financial results Q3: Alkem net declines by 23.4% as tax provision moved up, interim dividend of 300%

Alkem Laboratories, a Rs.5,850 crore plus pharma major, has reported lower consolidated net profit of Rs.180.87 crore during the third quarter ended December 2017 from Rs.236.26 crore in the corresponding period of last year due to one-off charge of Rs.44.90 crore on account of significant changes to the US corporate income tax system. Its tax provision went up sharply to Rs.151.54 crore
from Rs.19.17 crore. Its profits before interest, depreciation and taxation, improved by 31 per cent to Rs.384.39 crore from Rs.293.52 crore. Its consolidated net sales increased by 17.4 per cent to Rs.1,740 crore from Rs.1,482 crore. EPS remained under pressure at Rs.14.36 as compared to Rs.19.52 in the last period. 

The board of directors has recommended handsome interim dividend of 300 per cent. Its R&D expenditure increased to Rs.92.7 crore from Rs.85.1 crore and worked out to 5.3 per cent of total revenue. It filed 3 ANDAs with the US FDA and received 7 approvals during December quarter. Further, it filed 3 ANDA. Thus, it filed total 96 ANDAs upto end of December 2017 of which 41 are Para IV filings including first-to-files. It received total approvals for 48 ANDAs. All the 6 manufacturing facilities catering to the US market have an EIR with no pending observations in any of them. 

For the nine months period ended December 2017, Alkem's consolidated net sales increased by 6.9 per cent to Rs.4,917 crore from Rs.4,601 crore in the similar period of last year. Due to higher provision for taxation, its net profit declined by 25.5 per cent to Rs.572 crore from Rs.768 crore and its EPS declined to Rs.47.16 from Rs.63.15 in the last period. Taxation provision went up to Rs.273 crore as compared to Rs.61 crore. R&D expenditure increased to Rs.252.9 crore from Rs.228.9 crore and worked out to 5.1 per cent of total revenue. 

Sandeep Singh, managing director, said, “Q3FY18 has been a strong quarter for the company, Amidst the challenging regulatory environment and competitive landscape, we have not only achieved robust revenue growth but have also complimented it with improvement in our profit margins. W are continuously investing in our capabilities, people and infrastructure to build newer avenues of growth.”

Its domestic sales, during the first nine months ended December 2017, grew by 5.1 per cent to Rs.3,530 crore from Rs.3,359 crore in the same period of last year. Its international sales moved up by 11 per cent to Rs.1,310 crore from Rs.1,181 crore and its US sales increased by 5.1 per cent to Rs.960 crore and that in other international market increased by 30.9 per cent to Rs.351 crore.