Alembic Pharma to Spend Rs. 720-crore on Capex in 2018-19

Alembic Pharmaceuticals has earmarked a capital expenditure of Rs. 720-crore for this fiscal year to complete existing projects and on maintenance.

“We need about Rs. 600-crore to complete the existing projects in FY19. We have four projects under execution at present. We are also spending Rs. 120-crore towards maintenance capex,” Alembic’s Director of Finance and Chief Financial Officer, Mr. R.K. Baheti said at a recent investors’ conference call.

The company had reported capex of Rs. 600-crore in the last fiscal year (2017-18).

The company has six formulation and three API manufacturing facilities. It manufactures general oral solids in Panelav near Vadodara, Gujarat, and is in the process of putting up oncology oral solids and oncology injectable facilities at the same location. The pharma firm has filed 12 ANDAs (abbreviated new drug applications) during the March quarter, taking the total filings in FY18 to 26.

“Our efforts to add capabilities are also progressing well. Both the oncology injectable and the general injectable facilities will be ready in FY19. New oral solid dosage facility in Jarod will be ready in the second half of FY19,” said Mr. Pranav Amin, Managing Director, Alembic.

Focus on US market

The firm had spent Rs. 411-crore on R&D in FY18, about 13% of total sales, and is planning to scale up this investment. “We should inch up R&D spend gradually, depending on other projects’ progress, anywhere between Rs. 450-crore and Rs. 500-crore,” Mr. Baheti said, adding around 90% of the R&D spend is towards the US market, where the company will focus on quality and supply chain.

The company’s international formulations business was relatively flat at Rs. 1,200-crore in FY18, whereas the US business was flat at Rs. 920-crore. However, despite the pricing pressure and buyer consolidation, the company is betting big on the US market.

The company reported a net profit of Rs. 412.63-crore in FY18, against Rs. 403.16-crore in the year-ago period, while its consolidated revenue from operations stood at Rs. 3,130.81-crore, against Rs. 3,134.61-crore in FY17.