X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Alkem Labs: GST Impact Weighs Heavily on Net Profits - Views on News from Equitymaster
MidCapSelect
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  
  • Home
  • Outlook Arena
  • Aug 23, 2017 - Alkem Labs: GST Impact Weighs Heavily on Net Profits

Alkem Labs: GST Impact Weighs Heavily on Net Profits
Aug 23, 2017

Alkem has announced its 1QFY18 results. The company has reported 12.5% YoY decline in net sales and 73.8% YoY decline in the net profits for the quarter. Here is our analysis of the results.

Performance summary
  • Net sales declined by 12.5% YoY during the quarter, mainly due to the GST impact. The Indian business de-grew by 21.3% YoY, due to de-stocking of inventory by dealers on account of GST implementation. The expansion of NLEM list, led to downward revision in some of the key brands. Over and above, WPI induced price cuts too impacted the certain revenues from key brands.
  • Company's sales growth was impacted mainly due to de-growth of 7.4% in the anti-infectives segment which contributes 37% to its domestic sales. Overall therapy growth for Q1 was at 1.7% as compared to industry growth of 4.8%.
  • The US business grew by 8.9% for the quarter. In Q1 FY18, the company filed 2 ANDAs with the USFDA and received 2 final approvals. As on 30th June 2017, the company has filed a total of 93 ANDAs (including 1 NDA) and has received 40 approvals (including 6 tentative approvals)
  • Other International markets grew by 25.8% Y-o-Y for the quarter. Its key markets of Australia, Chile and Kazakhstan recorded healthy growth. The company's strategy is focus on key select markets rather than expanding over too many geographies.
  • Net profits were down by 73.8% YoY. The de-growth was largely attributable to lower sales and EBITDA margins on account of decline in domestic sales. The company expects tax rates of around 20% in FY2018 and a tax rate of 12-15% in FY19.

    Financial performance: A snapshot
    (Rs m) 1QFY17 1QFY18 Change
    Net sales 14,808 12,952 -12.5%
    Other operating income - - -
    Expenditure 12,097 12,009 -0.7%
    Operating profit (EBDITA) 2,711 944 -65.2%
    EBDITA margin (%) 18.3% 7.3%  
    Other income 280.7 294.9 5.1%
    Interest (net) 99.6 125.6 26.1%
    Depreciation 229.5 306.3 33.5%
    Profit before tax 2,663 807 -69.7%
    Exceptional Items 0 0  
    Tax 230 169 -26.4%
    Minority Interest 0 0  
    Profit after tax/(loss) 2,433 638 -73.8%
    Net profit margin (%) 16.4% 4.9%  
    No. of shares (m)   119.55  
    Diluted earnings per share (Rs)   59.97  
    Price to earnings ratio (x)*   29.1  
    *based on trailing 12 months earnings
To Read the Full Story, Subscribe or Sign In



DISCLOSURES UNDER SEBI (RESEARCH ANALYSTS) REGULATIONS, 2014
INTRODUCTION:
Equitymaster Agora Research Private Limited (hereinafter referred to as "Equitymaster"/"Company") was incorporated on October 25, 2007. Equitymaster is a joint venture between Quantum Information Services Private Limited (QIS) and Agora group. Equitymaster is a SEBI registered Research Analyst under the SEBI (Research Analysts) Regulations, 2014 with registration number INH000000537.

BUSINESS ACTIVITY:
An independent research initiative, Equitymaster is committed to providing honest and unbiased views, opinions and recommendations on various investment opportunities across asset classes.

DISCIPLINARY HISTORY:
There are no outstanding litigations against the Company, it subsidiaries and its Directors.

GENERAL TERMS AND CONDITIONS FOR RESEARCH REPORT:
For the terms and conditions for research reports click here.

DETAILS OF ASSOCIATES:
Details of Associates are available here.

DISCLOSURE WITH REGARDS TO OWNERSHIP AND MATERIAL CONFLICTS OF INTEREST:
  1. 'subject company' is a company on which a buy/sell/hold view or target price is given/changed in this Research Report
  2. Neither Equitymaster, it's Associates, Research Analyst or his/her relative have any financial interest in the subject company.
  3. Neither Equitymaster, it's Associates, Research Analyst or his/her relative have actual/beneficial ownership of one percent or more securities of the subject company at the end of the month immediately preceding the date of publication of the research report.
  4. Neither Equitymaster, it's Associates, Research Analyst or his/her relative have any other material conflict of interest at the time of publication of the research report.
DISCLOSURE WITH REGARDS TO RECEIPT OF COMPENSATION:
  1. Neither Equitymaster nor it's Associates have received any compensation from the subject company in the past twelve months.
  2. Neither Equitymaster nor it's Associates have managed or co-managed public offering of securities for the subject company in the past twelve months.
  3. Neither Equitymaster nor it's Associates have received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months.
  4. Neither Equitymaster nor it's Associates have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months.
  5. Neither Equitymaster nor it's Associates have received any compensation or other benefits from the subject company or third party in connection with the research report.
GENERAL DISCLOSURES:
  1. The Research Analyst has not served as an officer, director or employee of the subject company.
  2. Equitymaster or the Research Analyst has not been engaged in market making activity for the subject company.
Definitions of Terms Used:
  1. Buy recommendation: This means that the subscriber could consider buying the concerned stock at current market price keeping in mind the tenure and objective of the recommendation service.
  2. Hold recommendation: This means that the subscriber could consider holding on to the shares of the company until further update and not buy more of the stock at current market price.
  3. Buy at lower price: This means that the subscriber should wait for some correction in the market price so that the stock can be bought at more attractive valuations keeping in mind the tenure and the objective of the service.
  4. Sell recommendation: This means that the subscriber could consider selling the stock at current market price keeping in mind the objective of the recommendation service.
Feedback:
If you have any feedback or query or wish to report a matter, please do not hesitate to write to us.

Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

ALKEM LABORATORIES SHARE PRICE


Nov 21, 2017 11:39 AM

TRACK ALKEM LABORATORIES

  • Track your investment in ALKEM LABORATORIES with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

MORE ON ALKEM LABORATORIES

ALKEM LABORATORIES - NATCO PHARMA COMPARISON

COMPARE ALKEM LABORATORIES WITH

MARKET STATS