Top domestic, global investors queueing up to invest in Alkem: Prabhat Agarwal, CEO

In a chat with ET Now, Prabhat Agarwal, CEO, Alkem Laboratories, shares his business outlook and talks about its public issue. Excerpts:

ET Now: Give us an indication of the subscription of anchor book. Who are the major investors?

Prabhat Agarwal: We've had very good demand from anchor investors — both from domestic mutual funds and FIIs. We are very happy to see this kind of response. A lot of top domestic and international names have expressed interest in investing in Alkem.

The top domestic funds include names like HDFC Mutual Fund, SBI Mutual Fund, ICICI Pru, Reliance, etc. You can count on each of these names. The top global names include DSP BlackRock, Abu Dhabi Investment Authority, etc., among others.

ET Now: What is your strategy for the US markets? You have 25% revenue share there currently. How will you change this over a period of time?

Prabhat Agarwal: We are very well-positioned for growth in the US market. We have made significant investments over the last few years in developing our ANDA pipeline. It is currently pretty strong.

We have invested in R&D. We have acquired a commercial platform to market our products in US. We have the necessary manufacturing infrastructure in place to supply products in US. So, we are very confident about growth in that market.

ET Now: What is the ANDA pipeline like? Also, what about FTF and other new drugs lined up for US?

Prabhat Agarwal: We have filed 69 ANDAs including around 30 Para 4 filings that include first-to-file opportunities.

ET Now: Your margins are currently in the rage of 14%. Where do you see margins over the next two or three years?

Prabhat Agarwal: If you look at the first six months of this year, there has been a margin improvement on the back of strong revenue growth.

We are very confident that the investments that we have made in the past will yield returns in near to long term.

ET Now: The first half of the year saw a big surge in numbers and margins mainly on consolidation of Cachet and Indchemie. Give us the details of these two companies in terms of revenue and margins.

Prabhat Agarwal: We have not disclosed separate numbers for these two companies in our document. All I can say is that a large part of our revenue growth has been delivered on like-to-like basis. A lot of the margin improvement has come from the existing businesses.

So, it is a combination of both organic performance and the consolidated thrust from these two subsidiaries.