Alkem Laboratries’ 3QFY16 sales were up 29% y-o-y. Domestic business (70% of overall sales) grew 28% y-o-y. US business (21% of overall sales) grew 19% y-o-y. EBITDA margin during the quarter was 18.5% vs 17.9% in 1HFY16. The tax rate in 3QFY16 was 15% vs 4.6% in 1HFY16.
India sales grew 28% y-o-y partly due to the consolidation of Indchemie and Cachet sales.
Alkem acquired 51% stakes in both companies in March 2015. The company continues to grow ahead of the broader market across key therapies such as anti-infectives, gastro-intestinal, pain and analgesics as well as vitamins, minerals and nutrients. Volume growth in mega/legacy brands, price hikes and new product launches are some of the key levers management will use to drive growth.
The company significantly ramped up its sales force to increase its presence in the chronic space; at present the field force strength is approximately 5,745.
Going forward, the company is unlikely to hire more sales representatives and will focus on improving the sales force productivity to improve profitability.