Alkem Laboratories , a prominent pharmaceutical company, has received a Goods and Services Tax (GST) demand order from Gujarat authorities, challenging the company's input tax credit claims. The order alleges excess availment of ineligible input tax credit.

Details of the GST Demand

The GST demand order breaks down as follows:

Company's Response

Alkem Laboratories has stated that it disagrees with the order and intends to contest it. The company maintains that there will be no material impact on its financial or operational activities as a result of this demand.

Disclosure and Compliance

In compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Alkem Laboratories has made a formal disclosure to the stock exchanges.

Next Steps

Alkem Laboratories has indicated that it is in the process of taking appropriate action, which may include filing an appeal against the order. The company's stance suggests confidence in its position regarding the alleged excess availment and utilization of ineligible input tax credit.

Market Implications

While the company asserts that there is no material impact on its financials or operations, investors and market watchers may want to keep an eye on the developments of this case. The outcome could potentially set a precedent for how input tax credits are interpreted and applied in the pharmaceutical sector.

Alkem Laboratories , a leading Indian pharmaceutical company, has reported robust financial results for the second quarter and first half of fiscal year 2026, demonstrating significant growth across key metrics.

Financial Highlights

Half-Year Results (H1 FY26)

• Revenue: Alkem's revenue from operations increased to ₹27,144.90 million from ₹24,816.90 million in the same period last year.
• Net Profit: Consolidated net profit rose to ₹2,394.00 million, compared to ₹2,063.20 million in H1 FY25, marking a 16% increase.
• Earnings Per Share (EPS): Basic EPS for the six months was ₹119.55, up from ₹103.20 in the previous year.

Q2 FY26 Results

• Revenue: Revenue from operations surged by 17.2% year-over-year (YoY) to ₹40,010.00 million, up from ₹34,147.00 million in Q2 FY25.
• EBITDA: Earnings before Interest, Tax, Depreciation, and Amortisation (EBITDA) grew by 22.3% YoY to ₹9,208.00 million, with the EBITDA margin improving to 23.0% from 22.0%.
• Net Profit: Net profit for the quarter increased to ₹1,279.80 million, compared to ₹1,152.00 million in the previous year quarter.
• EPS: EPS for the quarter stood at ₹64.00, up from ₹57.60 in Q2 FY25.

Segment Performance

Domestic Business

• Domestic revenue grew by 12.4% YoY to ₹27,660.00 million, contributing 69.9% to total sales.
• Alkem became the number one company in the Indian Pharmaceutical Market (IPM) for the Acute segment during the quarter.
• The company outperformed the IPM in six key therapy areas, including Anti-infectives, Gastrointestinal, VMN, Pain, Respiratory, and Derma segments.

International Business

• International sales showed strong growth, increasing by 29.5% YoY to ₹11,890.00 million.
• US sales grew by 28.0% YoY to ₹7,649.00 million, contributing 19.3% to total sales.
• Non-US international sales rose by 32.4% YoY to ₹4,241.00 million, driven by robust growth in Australia and key European markets.

Operational Highlights

• During Q2 FY26, Alkem filed 2 ANDAs, received 1 ANDA tentative approval, and launched 4 products in the US market.
• As of September 30, 2025, the company had filed 187 ANDAs, 2 NDAs, and 1 BLA with the USFDA, receiving approvals for 163 ANDAs (including 17 tentative approvals) and 2 NDAs.
• R&D expenses for the quarter were ₹1,302.00 million, representing 3.3% of total revenue from operations.
• The company's total assets stood at ₹174,260.80 million as of September 30, 2025.
• Exceptional items for the half-year included a gain of ₹142.90 million from the sale of Indore facility.
• Alkem executed a Business Transfer Agreement effective October 1, 2025, transferring its Generic Business Undertaking to wholly-owned subsidiary Alkem Wellness Limited.

Management Commentary

Dr. Vikas Gupta, CEO of Alkem, commented on the results: "Q2 FY26 has been another strong quarter for us, marked by robust growth across India, the US, and key international markets. We also saw healthy traction in new product launches across markets. The GST revision is a positive step, and we adapted swiftly to ensure a seamless transition. Our improved gross margins and operating leverage have contributed to a stronger EBITDA profile. As we look ahead, we remain focused on accelerating growth and continue to strengthen our presence in key markets."

Alkem Laboratories' strong performance in Q2 and H1 FY26 reflects its solid positioning in both domestic and international markets. The company's focus on key therapeutic areas and expansion in international markets, particularly the US, continues to drive its growth. With a robust pipeline of ANDAs and strategic initiatives in place, Alkem appears well-positioned for sustained growth in the coming quarters.