Alembic Pharmaceuticals Limited — Q4 FY26 earnings call

Call held 21 May 2026

Management summary

Alembic Pharma reported a resilient Q4 FY26 with a 4% YoY revenue increase to ₹1,838 crores and an 8% rise in EBITDA before R&D to ₹455 crores, driven by new U.S. launches and volume-led growth in API and Animal Health. Full-year revenue grew 10% and PAT increased 16% to ₹675 crores. The company is strategically focusing on execution, quality, and portfolio choices, with an outlook for low double-digit consolidated growth in FY27, despite near-term margin drag from its new U.S. branded business, Pivya, and higher R&D investments in complex products.

Highlights

  • Q4 revenue of ₹1,838 crores, up 4% YoY, driven by new U.S. launches and volume-led growth in API and Animal Health.

  • Full-year revenue grew 10% YoY, demonstrating resilient performance across businesses.

  • Q4 EBITDA before R&D increased 8% YoY to ₹455 crores, with core margins improving to 25% from 24% in the prior year.

  • Full-year PAT grew 16% to ₹675 crores, reflecting improved operational outcomes.

  • Ex-U.S. markets showed strong performance, growing 20% for the full year, contributing significantly to international business.

Concerns

  • Q4 R&D spending was higher at ₹209 crores (11% of revenue) due to selective complex and peptide developments, impacting near-term profitability.

  • The new U.S. branded business (Pivya) is expected to cause a margin drag of 100-150 basis points for another one to two quarters.

  • The external environment continues to present challenges with pricing pressure, competitive intensity, regulatory expectations, and supply chain volatility.

Key financials

2 periods

Headline

  • Revenue (FY)
    —
    YoY +10%
  • EBITDA before R&D (FY)
    ₹1,846 Cr
    YoY +20%
  • EBITDA before R&D Margin (FY)
    25%
  • EBITDA after R&D Margin (FY)
    17%
  • PAT (FY)
    ₹675 Cr
    YoY +16%
  • Net Working Capital
    ₹3,000 Cr
  • Gross Debt
    ₹1,361 Cr

Q4

  • Revenue from Operations
    ₹1,838 Cr
    YoY +4%
  • EBITDA before R&D
    ₹455 Cr
    YoY +8%
  • Core EBITDA Margin
    25%
  • R&D Spending
    ₹209 Cr
  • R&D Spending % of Revenue
    11%
  • PAT
    ₹203 Cr

What they filed

Q1 FY27: revenue up 25.7%, net profit up 11.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,648 1,693 1,770 1,711 1,910 +16%1,876 +11%1,848 +4%2,150 +26%
EBITDA239 260 271 281 316 +32%292 +12%228 −16%332 +18%
Net profit153 138 157 154 184 +20%132 −4%202 +29%172 +12%
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

  • India Business
    4% Growth (Q4)5% Growth (FY)
  • International Business
    — Growth (Q4)20% Ex-U.S. Growth (FY)
  • API Business
    — Growth (Q4)

Capital allocation

high confidence
  • Capex ₹300 Cr
    • Capacity, debottlenecking and replacement capex ₹300 Cr
    We expect capital expenditure for the year to be in the range of INR300 crores to INR350 crores, primarily towards capacity, debottlenecking and replacement capex.
  • Debt Gross ₹1,361 Cr
    Gross debt was at INR1,361 crores broadly in line with the December levels.
  • Liquidity Liquidity disclosed Net working capital stood at almost close to INR3,000 crores, an increase of about INR50 crores versus the December levels, mainly driven by receivables that are not at due.
    From a balance sheet perspective, net working capital stood at almost close to INR3,000 crores, an increase of about INR50 crores versus the December levels, mainly driven by receivables that are not at due.

Guidance & targets

R&D Spend

  • R&D investments R&D Spend · FY27 · High confidence INR750 crores to INR800 crores
    R&D investments are likely to be around INR750 crores to INR800 crores as we calibrate our portfolio and structurally move

    — Pranav Amin

  • R&D spend as % of revenue R&D Spend · FY27 · High confidence about 9%

    Previously 11% → about 9%

    But moving forward for the year, I don't expect it to be at 11%. It will come back down to about 9% again.

    — Pranav Amin

Revenue

  • Overall top line consolidated growth Revenue · FY27 · Medium confidence low double-digit range
    This will translate into an overall top line consolidated growth to be in the low double-digit range .

    — Pranav Amin

  • International generic business growth Revenue · FY27 · Medium confidence low to mid-teen range
    The international generic business are also likely to grow at a decent amount by low to mid-teen range

    — Pranav Amin

  • API business growth Revenue · FY27 · Medium confidence high single or low double-digit growth
    and the API business to grow in the high single or low double-digit growth.

    — Pranav Amin

  • India business growth Revenue · FY27 · Low confidence closer to market growth
    We expect the India business to improve and growth momentum and hope to be closer to market growth with a renewed approach to strengthen focused brands.

    — Pranav Amin

  • U.S. business growth Revenue · FY27 · Medium confidence 10% to 15%
    I expect the U.S. business to grow between 10% to 15% at least.

    — Pranav Amin

  • ROW business growth Revenue · FY27 · Medium confidence 15-plus percent
    The ROW will continue the growth at 15-plus percent.

    — Pranav Amin

Profitability

  • EBITDA margins Profitability · FY27 · Medium confidence improvement this year
    We will see definitely see an improvement in the margins this year.

    — Pranav Amin

  • EBITDA margins Profitability · 2-3 years · Low confidence 20%
    As I mentioned, at some point, we would go back up to the 20% kind of EBITDA margins over a 2, 3 year period.

    — Pranav Amin

Capex

  • Capital expenditure Capex · FY27 · High confidence INR300 crores to INR350 crores
    We expect capital expenditure for the year to be in the range of INR300 crores to INR350 crores, primarily towards capacity, debottlenecking and replacement capex.

    — G. Krishnan

What to watch in Q1 FY27

Pivya's margin drag reduction

Next quarter or two
Current 100-150 bps impact in Q4 FY26
Target Reduced impact, approaching decent contribution

Why it matters

Pivya is a new strategic growth platform; its profitability trajectory is key to overall margin improvement.

I expect another quarter or two of the drag coming, by the end of the year, we should start seeing a decent contribution.

Risks & concerns

  • External Environment Volatility

    medium

    Pricing pressure, competitive intensity, regulatory expectation, and supply chain volatility continue to shape performance across markets.

    Management acknowledged

  • U.S. Branded Business (Pivya) Margin Drag

    medium

    The launch of Pivya is expected to cause a 100-150 bps margin impact for another quarter or two, before contributing positively.

    Management acknowledged, with a timeline for offset

  • Higher R&D Spend

    low

    Q4 R&D spend was 11% of revenue, higher than desired, due to complex and peptide developments, but is expected to return to ~9% in FY27.

    Management acknowledged, explained as an outlier, expected to normalize

Q&A highlights

5 direct
F2 and F3 facilities underutilization cost and timeline for covering costs Partial
We don't give facility-wise breakup, but I can just give you a flavor of what's happening. Both F2 and F3 are working at a much higher occupancy level than they used to... No, it's already started. Some of the licensing and some of the contract manufacturing is in progress. So we'll see part contribution from that in FY '27 itself.

Addresses concerns about underutilized assets and their drag on profitability, providing a timeline for contribution without specific numbers.

Asked by Jahnvi Mishra

Impact of U.S. Specialty business (Pivya) on current quarter margins and FY27 Direct
Yes there was a drag in the quarter due to the Alembic Therapeutics business... I expect another quarter or two of the drag coming, by the end of the year, we should start seeing a decent contribution... from a modeling point of view, I would take about 100 to 150 basis points of impact coming from Pivya, from the branded business in U.S.

Provides specific quantification of the margin impact from a new strategic initiative and a timeline for its resolution.

Asked by Rahul Jeewani

R&D spend productivity, measurement (IRR), and increase in Q4 Direct
the Q4 was a little bit of an outlier at 11% of sales is a little higher than we would have liked to be... The reason why this last quarter was a little higher is because we have a few selective complex and peptide developments, which were a little more expensive. That's what created a bump. But in terms of how we measure it, we generally have an IRR for each of our R&D projects.

Explains the reason for higher R&D spend in Q4 and the company's internal metric for evaluating R&D effectiveness.

Asked by Rahul Jeewani

FY27 EBITDA margin guidance given Pivya drag and F2/F3 utilization Partial
The way I see the business is that the Pivya drag, as I mentioned, by the end of the year it will not be a drag anymore. And for the rest of it will be covered up by the core business and the business growth that we're seeing... We will see definitely see an improvement in the margins this year.

Clarifies the expected trajectory of margins, linking it to the resolution of the Pivya drag and core business growth without providing a specific number.

Asked by Rahul Jeewani

U.S. guidance of 10-15% growth in INR terms, and if it accounts for currency depreciation Direct
Yes. again, it's not a guidance, but just the way I see the business right now, we'll definitely have growth in the market. Yes, that's one way of looking at it. I'm saying, yes, in terms of INR terms, I mentioned 10% to 15%.

Confirms the growth is in INR terms, implying a potentially lower constant currency growth, which is important for understanding underlying business performance.

Asked by Tushar Manudhane

Investment in peptide R&D and capex Direct
So capex is all done. We've already completed the capex of the peptides... We haven't given a disclosure because it's a part of an already ongoing and existing API facility and that's why we've done the peptide API investment.

Provides clarity on the status of peptide-related investments, indicating capex is complete and it's integrated into existing facilities.

Asked by Tushar Manudhane

API pricing trends, especially given crude-linked derivatives and solvent price increases Direct
Our API business, we generally -- it's a pretty high-margin business... we do sell APIs at a much higher price. We don't compete at the bottom level... Have we passed it on? No, it's still not a materially big issue for us... So that's not as much of a concern for us at this stage.

Reassures on API segment's profitability and resilience to raw material price fluctuations due to premium pricing and inventory management.

Asked by Tushar Manudhane

Initial traction and metrics for the new U.S. branded business (Pivya) Partial
I can just say it's just been only February end right that we launched. So it's only been a couple of months... So we're seeing a good trend. We're seeing good feedback. it will be another quarter or two until we are more comfortable giving out more metrics on this.

Sets expectations for when more concrete performance data for the new branded business will be available, indicating it's too early for detailed metrics.

Asked by Tushar Manudhane

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Detailed narrative

Q4 and Full Year FY26 Financial Performance

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.

Strategic Priorities and Execution

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.

Business Segment Performance

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 Investments and Productivity

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.

U.S. Branded Business (Pivya) Performance

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.

FY27 Outlook and Growth Drivers

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.

Capital Allocation Strategy

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.

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