Alembic Pharmaceuticals has upgraded its FY27 US growth forecast to mid-to-high teens following a 49% revenue jump in its US segment during the June quarter. While total consolidated revenue rose by 26%, investors should monitor profit margins, which saw a slight dip due to higher spending on research and operations.
Alembic Pharmaceuticals has revised its growth outlook for its US business for the fiscal year 2027, raising expectations to mid-to-high teens from the initial forecast of 10-12%. This upward revision follows a strong start to the year, with the company reporting consolidated revenue of Rs 2,150 crore for the June quarter, a 26% increase compared to the same period last year. Net profit also rose by 12% to Rs 173 crore during this time.
The primary driver of this growth was the company's US formulations segment, which saw revenue climb 49% to Rs 778 crore. A key factor behind this performance was the strategic launch of new products and the company securing a 180-day exclusivity period for Bosutinib, a drug used in cancer treatment. The company expects this exclusivity to have a greater impact on sales in the September quarter, marking its first full three-month period of availability.
While the top-line growth is strong, the company's profit margins have faced some pressure. Operating margins dipped slightly to approximately 15.4%, primarily due to higher investments in research and development and operational costs required to support the expansion of its US branded portfolio. Sustaining these margins will be a key factor for investors to watch as the company continues its plan to launch over 15 new products in the US market by the end of the fiscal year.
Alembic’s performance was not limited to the US. The Active Pharmaceutical Ingredient (API) business grew by 33% to Rs 346 crore, while its international generics business, excluding the US, expanded by 17%. In the domestic market, the company’s branded formulations business grew by 7% to Rs 642 crore. Management indicated that recent leadership changes in the domestic human health business are aimed at correcting past execution gaps, with improvement expected to become more visible from the September quarter.
From a risk perspective, the pharmaceutical sector remains subject to regulatory scrutiny. A positive development for Alembic is that all its manufacturing facilities currently hold valid Establishment Inspection Reports (EIRs) from the US Food and Drug Administration, which reduces the immediate risk of regulatory roadblocks. Moving forward, shareholders will likely monitor the company’s ability to maintain its growth momentum while balancing the costs of its aggressive product launch schedule, as well as its success in turning around the domestic India business.