Alembic Pharma

Alembic Pharma reported Q4 FY26 revenue from operations at ₹1,838 crores, a 4% year-on-year increase, supported by new U.S. launches and volume-led growth in API and Animal Health. EBITDA before R&D stood at ₹455 crores, up 8% YoY, with core margins improving to 25% from 24% in the prior year. For the full fiscal year 2026, revenue grew by 10% YoY, and profit after tax increased by 16% to ₹675 crores, reflecting resilient performance despite a dynamic external environment.

The company's strategy in FY26 focused on maintaining gross margins, protecting core businesses, improving operating leverage, and selectively investing in future growth platforms. This approach aims to build a stronger, execution-led platform for the medium term, emphasizing quality, portfolio choices, cost discipline, and capital allocation. The Indore facility is now fully operational, improving supply reliability and operating efficiency, and contributing to future scaling.

The India business delivered 4% YoY growth in Q4 and 5% for the full year, with specialty therapies (Gynecology, Gastrology, Ophthalmology) and animal healthcare performing well. The international business saw positive growth in Q4, with ex-U.S. markets growing 20% for the full year, driven by volumes and new U.S. launches. The API business achieved modest growth in Q4, primarily volume-led, though pricing remained a headwind, consistent with broader market trends.

R&D spending in Q4 FY26 was ₹209 crores, representing 11% of revenue, an increase from ₹151 crores (9% of revenue) in Q4 FY25. This higher spend was attributed to selective complex and peptide developments. For FY27, R&D investments are projected to be around ₹750-800 crores, with the R&D spend as a percentage of revenue expected to normalize to about 9%. The company evaluates R&D projects based on their internal rate of return (IRR) to ensure productive capital allocation.

Alembic launched its U.S. branded business, Pivya, in February 2026, which is expected to cause a margin drag of approximately 100 to 150 basis points for another one to two quarters. Management anticipates that by the end of FY27, Pivya should start contributing decently, with the core business's operating leverage expected to offset this initial impact. Early trends and feedback for Pivya are positive, but more concrete metrics will be available in the coming quarters as doctor habits change.

For FY27, Alembic Pharma targets a low double-digit consolidated top-line growth. This growth is expected to be driven by 10-15% growth in the U.S. business (in INR terms), over 15% growth in ROW markets, high single to low double-digit growth in the API business, and India business growth closer to market rates. The company expects margin improvement in FY27, aiming to reach 20% EBITDA margins over a two to three-year period, supported by better capacity utilization and a differentiated product portfolio.

The company plans capital expenditure for FY27 in the range of ₹300-350 crores, primarily allocated towards capacity expansion, debottlenecking, and replacement capex. Gross debt stood at ₹1,361 crores, broadly stable compared to December levels, while net working capital increased by ₹50 crores to ₹3,000 crores. The focus remains on capital-efficient execution and selective investments in growth platforms, with capex for peptide developments already completed and integrated into existing API facilities.