Alkem Labs Faces US Pressure as India Sales Continue to Grow

Alkem Labs continues to strengthen its domestic business as pricing pressure, regulatory delays, and slower contract manufacturing growth weigh on its US operations.

The company expects India sales to follow the Indian Pharmaceutical Market (IPM) in FY27, while its American business may deliver only mid-single-digit growth.

This contrasting performance highlights how domestic demand supports revenue expansion even as international operations face challenges.

However, continued dependence on India also raises questions about how quickly Alkem Labs can strengthen overseas growth through new product launches, biosimilar approvals and contract manufacturing opportunities.

India Business Provides a Stable Growth Base

India remains an important growth driver for Alkem Labs, with domestic sales increasing 9.5 percent to Rs 3,027 crore in the September quarter, according to ET Pharma. Acute therapies grew 12.1 percent, broadly matching the IPM's 12.3 percent expansion, while chronic therapies delivered stronger growth of 22.4 percent.

The chronic portfolio offers an important opportunity as the company expands its presence across long-term treatment categories. Management expects domestic sales to grow around 11 percent in FY27, broadly tracking the projected IPM growth of 11.3 percent.

However, trade generics continue to face competition from new entrants and tighter credit policies, limiting further market share gains.

Also Read: Moving Indian Pharma from Volume to Value Through Innovation and Strategic Partnerships

US Pricing Pressure Tests Alkem's Growth Outlook

Alkem Labs faces a more challenging outlook in the US, where second-quarter sales declined 3 percent on a constant-currency basis. Revenue reached Rs 783 crore after currency adjustments, reflecting rupee depreciation against the dollar.

Regulatory delays at its Daman facility have stalled new product approvals, while slower CDMO expansion adds pressure. The delayed denosumab biosimilar approval and REMS requirements for tolvaptan could further restrict growth.

Management expects mid-single-digit US growth in FY27. New product approvals, complex generics and improving CDMO contracts could support recovery, although regulatory hurdles and competition remain significant challenges.

The company's growth outlook ultimately depends on maintaining domestic momentum while restoring stronger performance across its US portfolio and contract manufacturing operations.