#1Alkem Laboratories Ltd. Investor Presentation Q2FY23 November 11, 2022 LED ALKEM अल्केम ALKEM#2Safe Harbor Statement ALKEM This presentation contains forward-looking statements and information that involve risks, uncertainties and assumptions. Forward-looking statements are all statements that concern plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are other than statements of historical fact, including, but not limited to, those that are identified by the use of words such as "anticipates", "believes", "estimates", "expects", "intends", "plans", "predicts", "projects" and similar expressions. Risks and uncertainties that could affect us include, without limitation: General economic and business conditions in India and other key global markets in which we operate; • The ability to successfully implement our strategy, our research and development efforts, growth & expansion plans and technological changes; • Changes in the value of the Rupee and other currency changes; • Changes in the Indian and international interest rates; • Allocations of funds by the Governments in our key global markets; • Changes in laws and regulations that apply to our customers, suppliers, and the pharmaceutical industry; • Increasing competition in and the conditions of our customers, suppliers and the pharmaceutical industry; and . Changes in political conditions in India and in our key global markets. Should one or more of such risks and uncertainties materialize, or should any underlying assumption prove incorrect, actual outcomes may vary materially from those indicated in the applicable forward-looking statements. Any forward-looking statement or information contained in this presentation speaks only as of the date of the statement. We are not required to update any such statement or information to either reflect events or circumstances that occur after the date the statement or information is made or to account for unanticipated events, unless it is required by Law.#3Key Highlights of Q2FY23 ALKEM • Revenue from Operations grew by 10.0% YoY during the quarter, with EBITDA margin of 14.7% and Net Profit margin of 10.7% • India Business: As per IQVIA, Company's sales in Q2FY23 registered growth of 13.2% YoY compared to IPM growth of 8.2% YoY • Market beating performance in domestic business • Volume and new launches led growth in domestic market • • • More than 3X market growth in anti-diabetic therapy supported by good launches US Business posted sequential growth of 8.5% QoQ compared to Q1FY23 and decline 0.9% YoY compared to Q2FY22 Non US Business posted sequential growth of 10.4% QoQ compared to Q1FY23 and 15.2.% YoY compared to Q2FY22 • • R&D expenses in the quarter was 1.3 billion at 4.2 % of revenue from operations • The Company filed 3 ANDAs with the US FDA and received 4 approvals (including 2 tentative approval) in Q2FY23 Healthy Balance Sheet with net cash of 13.5 billion as on September 30, 2022#4Key Financial Highlights - Q2FY23 (Consolidated) Revenue from Operations India sales 28,000 YoY: 10.0% 30,793 19,605 YoY: 13.0% 22,161 Q2FY22 QFY23 QFY22 Q2FY23 International sales 8,052 YoY: 3.0% 8,291 Q2FY22 Q2FY23 All figures in mn ALKEM#5Key Financial Highlights - Q2FY23 (Consolidated) Gross Profit and Gross Margin 17,425 YoY: 1.7% 17,724 EBITDA and EBITDA Margin 6,244 YoY: (27.3%) 4,539 All figures in mn 62.2% Q2FY22 57.6% 22.3% Q2FY23 Q2FY22 PBT (before Minority Interest) 5,815 YoY: (30.8%) 4,023 14.7% Q2FY23 PAT (after Minority Interest) 5,443 YoY: (39.2%) 3,308 Q2FY22 Q2FY23 Q2FY22 Q2FY23 ALKEM#6Key Financial Highlights - H1FY23 (Consolidated) Particulars (mn) H1FY23 H1FY22 YoY growth Revenue from Operations 56,558 55,314 2.2% Gross Profit 32,534 33,791 -3.7% Gross Profit margin 57.5% 61.1% EBITDA EBITDA margin 6,572 12,172 -46.0% 11.6% 22.0% PBT 5,542 11,377 -51.3% PBT margin 9.8% 20.6% PAT (After Minority Interest) 4,585 10,124 -54.7% PAT margin 8.1% 18.3% EPS (/share) 38.35 84.67 -54.7% All figures in mn ALKEM#7• India Business India Business: Q2FY23 Sales of 22,161 million (13.0% YoY growth) • India sales contributed 72.8% to total sales in Q2FY23 ALKEM As per IQVIA, In Q2FY23, the Company's secondary sales grew by 13.2% compared to IPM growth of 8.2% YoY. Outperformance in acute therapies was mainly led by anti-infectives, vitamins / minerals / nutrients, gastrointestinal and pain management segment. Outperformance in the chronic therapies was driven by anti-diabetes and urology during the quarter. Trade Generic continues to play an important role in growth of the company. Q2FY23 India Sales (mn) 19,605 YoY: 13.0% 22,161 H1FY23 - India Sales (mn) 38,702 YOY: 3.3% 39,976 Q2FY22 Q2FY23 H1FY22 H1FY23#8Chronic Therapies Acute Therapies Secondary Sales Performance Market beating performance across major therapeutic segments in Q2FY23 Market rank Market rank Anti-infectives 7.8% 7.2% | Alkem sales growth YoY1,2 17 Anti-diabetic 29.5% 2 Gastro-intestinal 22.7% Pain/ Analgesics 19.2% Vitamins/Minerals / Nutrients 12.5% 11.6% 11.5% 6.4% 8 Neuro/ CNS 7.8% 9.8% 5.4% Indian pharma industry sales growth YoY1,2 -1.4% 28 Cardiac 17 Derma 10.1% 4.5% 0.1% Alkem sales growth YoY1,2 Source: IQVIQ data 1 Domestic formulations sales; 2 For 3 months ended September 30, 2022 Indian pharma industry sales growth YoY1,2#9US Business US Business: Q2FY23 Sales of 6,040 million (YoY decline of 0.9%) • US sales contributed 19.8% to total sales in Q2FY23 • During the quarter, the US business registered sequential growth of 8.5% over Q1FY23 In Q2FY23, the Company filed 3 ANDAS with the US FDA and received 4 approvals (including 2 tentative approvals) As on September 30, 2022, the Company filed a total of 167 ANDAs and 2 new drug applications (NDA) with the US FDA and has received approvals for 128 ANDAs (including 15 tentative approvals) and 2 NDAs. Q2FY23 US Sales (mn) 6,097 YoY: (0.9%) 6,040 H1FY23 US Sales (mn) 12,140 YoY: (4.4%) 11,605 Q2FY22 Q2FY23 H1FY22 H1FY23 ALKEM#10US Business Update on US FDA inspections Facility Capability Last inspection Status post last inspection Indore Formulations July 2022 St. Louis (US) Formulations November 2022 Received 1 observation. The Company has already submitted a detailed response to the US FDA on the corrective and preventive actions it is taking to address them. Received 3 new observations. The Company is preparing the response for USFDA. Bioequivalence Taloja (India) April 2022 Successfully closed inspection without any observations Centre Baddi (India) Formulations February 2020 Inspection is closed. EIR# received in March 2020 Daman (India) Formulations August 2019 Inspection is closed. EIR# received in October 2019 California (US) APIs Ankleshwar (India) APIs Mandva (India) APIs August 2018 December 2016 September 2015 Inspection is closed. EIR# received in October 2018 Inspection is closed. EIR# received in March 2017 Inspection is closed. EIR# received in March 2016 #EIR - Establishment Inspection Report ALKEM#11• Other International Business Other International Business: Q2FY23 Sales of 2,251 million (15.2% YoY growth) Other International Market sales contributed 7.4 % to total sales in Q2FY23 The Company has presence in Australia, Europe, South East Asia, Latin America, Africa and CIS Key markets like Australia and UK registered healthy growth during Q2FY23. Q2FY23 Other International Sales - 1,954 (mn) YoY: 15.2% 2,251 H1FY23 Other International Sales - 3,815 (mn) YoY: 12.5% 4,290 Q2FY22 Q2FY23 H1FY22 H1FY23 ALKEM#12Latest Shareholding Pattern Shareholding pattern as on September 30, 2022 Non-Institution, 22.65% Promoter & Promoter Group, 57.16% Institution, 20.19% Institution – Mutual Funds, Alternate Investment Funds, Foreign Portfolio Investors, Financial Institutions / Banks Non-Institution - Public, Other Bodies Corporates, Clearing Members, Non Resident Indians, Hindu Undivided Family and Trusts ALKEM#13Thank You For further information or queries, please contact Amit Kumar Khandelia AVP Finance Tel: +91 22 3982 9999 E-mail: [email protected] ALKEM