Continued price erosion in the US market due to growing competition dragged the second quarter performance of pharma major Alembic Pharmaceuticals Limited.

On a standalone basis, the company posted a net profit of ₹156 crore for the quarter, as against ₹348 crore, a fall of 55 per cent. Standalone revenues from operations stood at ₹1,190 crore as against ₹1,400 crore in the same period last year.

Consolidated net profit for the quarter ended September 30, 2021 stood at ₹169 crore, down 49 per cent from ₹333 crore in the corresponding quarter last year. Revenues from operations stood at ₹1,292 crore for the quarter as against ₹1,457 crore in the same period last year.

The US formulations business dropped 40 per cent to ₹348 crore from ₹582 crore in a comparable quarter last year. “There were no surprises about the US business. Our first quarter and second quarter had the similar impact. So it was on expected lines and we see this price erosion due to competition to continue for next six months,” Pranav Amin, Managing Director, Alembic Pharmaceuticals Limited told Businessline .

Also, the overall net margins came under pressure to 13.1 per cent for the quarter as against 22.9 per cent reported in the same period last year.

However, Amin stated that the loss of business in the US is seen getting compensated by the strong growth in the domestic formulations business, which grew by about 23 per cent to ₹509 crore for the quarter from ₹415 crore in the same quarter last year. “Domestic business has done very well. The chronic segment is growing at 19% higher than the industry average of 13%. We will continue to grow faster than the market in the therapies such as gastro, gynaecology and diabetes,” said Amin.

Company's rest of the world (ROW) business remained stable at ₹197 crore.

Alembic had a strong performance in the API business during the peak Covid period in the first half of the fiscal. With this high base, API business in the second quarter has fallen by 9 per cent to ₹239 crore for the quarter.

For the half year period (April-September), company’s standalone net profit stood at ₹349 crore, as against ₹667 crore in the comparable period last year, indicating a 48 per cent drop year-on-year, while standalone revenues for the half-year period stood at ₹2,459 crore as against ₹2,658 crore last year.

The consolidated net profit for the half-year period stood at ₹334 crore as against ₹635 crore in the comparable period last year. Consolidated revenues from operations stood at ₹2,618 crore as against ₹2,798 crore.

Alembic Pharmaceuticals shares ended positive with 2.5 per cent gains at ₹799.40 on BSE Wednesday.

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