Ajanta Pharma Limited — Q4 FY26 earnings call

Call held 5 May 2026

Management summary

Ajanta Pharma reported a strong Q4 and FY26, achieving significant milestones with revenue exceeding ₹5,000 crores and net profit surpassing ₹1,000 crores. The US Generics and India businesses were key growth drivers, while the Asia Branded Generics segment faced headwinds due to geopolitical issues. The company provided FY27 guidance for high-teen revenue growth and an EBITDA margin of 27% (+/- 1%), factoring in continued investments and rising costs.

Highlights

  • FY26 Revenue reached ₹5,453 crores, a 17% YoY growth, surpassing ₹5,000 crores.

  • FY26 Net Profit reached ₹1,056 crores, a 15% YoY growth, crossing ₹1,000 crores.

  • FY26 EBITDA margin stood at 26%, with Q4 EBITDA margin at 23%.

  • US Generics sales grew 49% YoY to ₹1,557 crores in FY26, driven by 8 new launches.

  • India business grew 14% YoY to ₹1,654 crores in FY26, outperforming IPM growth of 10% with 13% growth.

Concerns

  • Asia Branded Generics sales declined 10% in Q4 FY26 and 1% for the full year, impacted by geopolitical developments and supply chain disruptions in the Middle East.

  • Mark-to-market hedge loss of ₹42 crores in Q4 FY26 and ₹103 crores for the full year impacted profitability.

  • Trade receivables increased to 125 days in FY26 from 94 days last year, mainly due to higher US sales.

Key financials

3 periods

Q4 FY26

  • Revenue from Operations
    ₹1,422 Cr
    YoY +21%
  • Net Profit
    ₹267 Cr
    YoY +18%
  • EBITDA
    ₹333 Cr
    YoY +12%
  • EBITDA Margin
    23%
  • Gross Margin
    79%

FY26

  • Revenue from Operations
    ₹5,453 Cr
    YoY +17%
  • Net Profit
    ₹1,056 Cr
    YoY +15%
  • EBITDA
    ₹1,395 Cr
    YoY +11%
  • EBITDA Margin
    26%
  • Gross Margin
    78%
  • R&D Spend
    ₹252 Cr
  • Return on Capital Employed
    33%
  • Return on Net Worth
    25%
  • Effective Tax Rate
    23%

% of Revenue FY26

  • R&D Spend
    5%

What they filed

Q1 FY27: revenue up 24.8%, net profit up 31.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,187 1,146 1,170 1,303 1,354 +14%1,375 +20%1,422 +22%1,626 +25%
EBITDA311 321 297 351 328 +5%382 +19%333 +12%424 +21%
Net profit216 233 225 255 260 +20%274 +18%267 +19%334 +31%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentSales (Q4 FY26)YoY Growth (Q4 FY26)Sales (FY26)YoY Growth (FY26)
Branded Generics (Asia & Africa)————
Asia Branded Generics₹274 Cr-0.1₹1,175 Cr-0.01
Africa Branded Generics₹182 Cr0.37₹861 Cr0.15
US Generics₹505 Cr0.56₹1,557 Cr0.49
Africa Institution₹48 Cr0.71₹160 Cr0.09
India Business₹404 Cr0.09—0.14
India Trade Generics₹49 Cr—₹188 Cr—

Capital allocation

high confidence
  • Capex ₹330 Cr
    Capital expenditure for the full year stood at Rs. 330 crores, in line with our guidance. As we embark upon new capex cycle to meet our continued growth requirements. We expect capex to increase to around Rs. 400 crores in the FY 2027, which includes Rs. 150 crores of maintenance and balance for new capacity expansion.

Guidance & targets

Profitability

  • Gross Margin Profitability · coming year · High confidence around 77% with a variation of plus or minus 1%
    We expect gross margins to remain around 77% with a variation of plus or minus 1% in the coming year.

    — Arvind Agrawal

  • EBITDA Margin Profitability · coming year · High confidence 27% with a variation of plus or minus 1%
    We remain confident of maintaining EBITDA margin of 27% with a variation of plus or minus 1% in the coming year as well while making further investment in developing our market.

    — Arvind Agrawal

Capex

  • Capital Expenditure Capex · FY27 · High confidence around Rs. 400 crores
    We expect capex to increase to around Rs. 400 crores in the FY 2027, which includes Rs. 150 crores of maintenance and balance for new capacity expansion.

    — Arvind Agrawal

  • Maintenance Capex Capex · FY27 · High confidence Rs. 150 crores

    — Arvind Agrawal

  • Capacity Expansion Capex Capex · FY27 · High confidence Rs. 250 crores
    So we are looking at about Rs. 150 crores of routine capex, maintenance capex, and Rs. 250 crores of capex for the capacity additions and expansions there.

    — Yogesh Agrawal

Revenue

  • Total Revenue Growth Revenue · FY27 · High confidence high teens (16-18%)
    Yes. Tushar, high teens is absolutely we are really looking at.

    — Arvind Agrawal

  • Asia Business Growth Revenue · next year · High confidence high double digits
    So you see slowly the logistic have been coming in place, just the transit time has increased. With this, we have not seen any demand challenge or the demand has not been impacted. It was more of a supply chain concern or issue. With that supply chain now getting streamlined, in fact, we are looking in the next year, our guidance for the Asia is in the high double digits. So we should be able to deliver a good performance.

    — Yogesh Agrawal

  • US Business Growth Revenue · next year · High confidence mid-single digit
    So I think going forward for the next year, we are looking at a mid-single digit growth for the US business considering that for the whole year we have delivered an extremely robust growth of 49%. As the base is very high, on back of that, we are projecting to be a mid-single digit growth for the year.

    — Yogesh Agrawal

  • Africa Business Growth Revenue · FY27 · High confidence high double-digit
    Africa also we are looking at a high double-digit growth. Africa also we should be able to perform well.

    — Yogesh Agrawal

Headcount

  • MR Additions (India) Headcount · FY27 · Medium confidence 250 to 300
    Yes. So we are looking at an addition of 250 to 300. This is a very broad ballpark working. Of course, it will keep unfolding every quarter. This is to optimize the coverage as we go along.

    — Rajesh Agrawal

  • MR Additions (Asia & Africa) Headcount · FY27 · Medium confidence 5% to 6% (~130-150 people)
    Yes, we are intending to add MRs even in Asia and Africa also, again, 5% to 6%. So you can imagine about 130-150 people will be added here as well.

    — Arvind Agrawal

Tax

  • Effective Tax Rate Tax · FY27 · High confidence 26% to 26.5%
    We are expecting about 26% to 26.5%.

    — Arvind Agrawal

What to watch in Q1 FY27

Asia Branded Generics Growth Recovery

next year (FY27)
Current -1% YoY (FY26)
Target High double-digit growth

Why it matters

Recovery of the Asia business, which faced headwinds in FY26, is crucial for overall revenue growth as guided.

So you see slowly the logistic have been coming in place, just the transit time has increased. With this, we have not seen any demand challenge or the demand has not been impacted. It was more of a supply chain concern or issue. With that supply chain now getting streamlined, in fact, we are looking in the next year, our guidance for the Asia is in the high double digits. So we should be able to deliver a good performance.

Risks & concerns

  • Geopolitical developments and supply chain disruptions

    medium

    Geopolitical developments in the Middle East led to supply chain disruptions, impacting Asia Branded Generics sales and increasing freight/RM costs, which are currently absorbed by the company.

    Management acknowledged

  • Mark-to-market hedge losses

    medium

    The company incurred a mark-to-market hedge loss of ₹103 crores for FY26 due to INR depreciation against USD and Euro, impacting reported EBITDA.

    Management acknowledged

  • Increased trade receivables days

    medium

    Trade receivables increased to 125 days from 94 days last year, primarily due to higher sales in the US market where payment cycles are longer, which management considers a 'new normal'.

    Management acknowledged

  • USFDA observations at Paithan plant

    low

    5 observations were received for the Paithan facility, but management states they are procedural and do not impact filings or ongoing business, with a response to FDA planned.

    Management acknowledged

Q&A highlights

8 direct
Impact of Middle East conflict on costs and absorption Direct
Yes. So the freight have increased, both air and sea across geographies. It is not only restricted to the Middle East supply, but the freights have increased in general for the air and sea... It is absorbed by us in our P&L.

Clarifies that increased freight and raw material costs due to geopolitical events are currently absorbed by the company, impacting margins.

Asked by Avnish Burman

Reason for FY27 EBITDA margin guidance being lower than FY26 Direct
But however, as you know, we are investing quite a bit on the market in terms of product range especially in terms of the MR addition across the markets. All that investment is going on. So that investment also is something which is charged to P&L.

Explains that the slightly lower EBITDA margin guidance for FY27 (27% vs 26% in FY26) is due to continued strategic investments in market expansion, product range, MR additions, and increased R&D for filings.

Asked by Tushar Manudhane

India business slowdown in Q4 FY26 Direct
If you look at the annualized performance, we have recorded 14% growth, which is significantly higher than the IPM growth rate as well as the covered market and the sub segment growth rate. This 1 quarter has been an aberration due to inexplicable kind of reasons.

Management attributes the Q4 slowdown in India to an 'aberration' and expresses confidence in recovery, citing strong annualized growth and positive prescription data.

Asked by Abdulkader Puranwala

Trajectory and confidence for US business in FY27 after strong FY26 Direct
So I think going forward for the next year, we are looking at a mid-single digit growth for the US business considering that for the whole year we have delivered an extremely robust growth of 49%. As the base is very high, on back of that, we are projecting to be a mid-single digit growth for the year.

Provides specific guidance for US business growth in FY27 (mid-single digit) following a very high base of 49% growth in FY26, indicating a more normalized growth trajectory.

Asked by Abdulkader Puranwala

Increase in trade receivables days Direct
So I think this is mainly because of the higher sales at US As you are aware, the US outstandings are a little longer. And US sales were very, very high this year with 50% increase. So that is the contribution which has come in. And I think at this moment of time, I think we can consider this as a new normal now.

Explains the increase in trade receivables to 125 days as a consequence of strong US sales, where payment cycles are longer, and suggests this is the 'new normal'.

Asked by Foram Parekh

Impact of USFDA inspection observations at Paithan plant Direct
No. So the 483 as we have informed on the stock exchange, we have got 5 observations for our Paithan facility... So there are no impact on the filings also. We continue business as normal.

Management clarifies that 5 observations from the USFDA inspection at Paithan are procedural and do not impact product filings or ongoing business operations.

Asked by Rohan

Promoter pledged shares Direct
Yogesh and Rajesh Agrawal, they don't have any pledge at all. So there is 0 pledge from their side. It's only the other 2 brothers who are developing their new businesses, so they have pledged the shares to borrow the money.

Clarifies that the pledged shares belong to other promoter family members for their separate businesses and not to the Managing Director or Joint Managing Director, nor for Ajanta Pharma's borrowing.

Asked by Udhayaprakash

Semaglutide opportunity and commercialization timeline Direct
I think it will be 2 years by the time product will get commercialized in various markets. I think third year from today is when we should start seeing the revenues, and probably fourth year would be where we will have launched and we would have probably increased our penetration in the market and got some market share.

Provides a clear timeline for the semaglutide opportunity, indicating commercialization in 2 years, revenue generation in the third year, and significant market penetration by the fourth year.

Asked by Vamsi

2 min read 6 chapters

Detailed narrative

Strong FY26 Performance Driven by Key Markets

Ajanta Pharma achieved significant milestones in FY26, with revenue surpassing ₹5,000 crores and net profit crossing ₹1,000 crores. Revenue from operations grew by 21%, while margins expanded by 18%. The company reported a robust Return on Capital Employed of 33% and Return on Net Worth of 25% as of March 2026, underscoring its strong financial health and operational efficiency. This performance was broad-based across its key business verticals.

US Generics and India Business Lead Growth

The US Generics business delivered an excellent performance, with sales growing 49% YoY to ₹1,557 crores in FY26, contributing 29% to total revenue. This growth was fueled by 8 new product launches over the past 15 months. The India business also showed strong momentum, growing 14% YoY to ₹1,654 crores in FY26 and outperforming the Indian Pharmaceutical Market (IPM) growth of 10%. Ajanta Pharma improved its ranking to 24th in the Indian market as per IQVIA MAT March 2026.

Asia Segment Faces Geopolitical Headwinds

The Asia Branded Generics business experienced a decline, with Q4 sales falling 10% to ₹274 crores and full-year sales marginally down 1% to ₹1,175 crores. This was primarily attributed to geopolitical developments in the Middle East, which caused significant supply chain disruptions and impacted dispatches. Management expressed confidence in the business regaining growth momentum in the coming quarters, with a guidance of high double-digit growth for Asia in FY27 as logistics issues are streamlined.

Strategic Investments and Margin Outlook

The company's EBITDA margin for FY26 stood at 26%, with a Q4 margin of 23%. For FY27, management guided for an EBITDA margin of 27% (+/- 1%), factoring in continued strategic investments in market development, product portfolio expansion, and increased R&D costs for new filings. Gross margins are expected to remain around 77% (+/- 1%). Personnel costs increased 18% in FY26 due to MR additions and a provision for the new Labour Code.

Capital Allocation and Working Capital Dynamics

Capital expenditure for FY26 was ₹330 crores, in line with guidance. For FY27, capex is projected to increase to approximately ₹400 crores, with ₹150 crores allocated for maintenance and the balance for new capacity expansion. Trade receivables increased to 125 days in FY26 from 94 days last year, mainly due to higher US sales and a shift from factoring to working capital loans. Inventory levels improved to 63 days from 72 days, reflecting focus on efficiency.

New Therapies and Semaglutide Opportunity

In India, the gynaecology segment is progressing well and is expected to contribute meaningfully in the next 2-3 years, supported by planned MR additions. The nephrology segment, while more challenging, shows positive signs but will take longer to scale. Regarding the semaglutide opportunity, the company plans to start filings outside India this quarter, anticipating commercialization in 2 years, revenue generation in the third year, and significant market penetration by the fourth year.

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