Detailed Narrative
Record Financial Performance in FY26
Aurobindo Pharma achieved its highest-ever revenues and EBITDA for both the fourth quarter and the full financial year 2026. For FY26, revenues reached ₹33,653 crores, with EBITDA at ₹6,856 crores, resulting in a healthy EBITDA margin of 20.4%. Q4 FY26 also demonstrated strong performance, with revenues of ₹8,853 crores and EBITDA of ₹1,801 crores, maintaining a robust margin of 20.3%. Net profit for FY26 increased by 2% year-on-year to ₹921 crores, reflecting sustained growth across businesses despite insignificant Revlimid product sales compared to Q4 FY25.
Segmental Growth Across Geographies
The formulation business grew 5% year-on-year in Q4 FY26 to ₹7,646 crores, contributing 86% of total revenue. The API business saw a 25% quarter-on-quarter improvement, reaching ₹1,208 crores in Q4 FY26 and ₹4,047 crores for the full year. Europe formulations achieved a significant milestone of €1 billion in annual revenues for FY26, with Q4 revenue at €261 million, up from €236 million in Q4 FY25. Growth markets also performed strongly, with Q4 revenue at ₹980 crores, up 25% YoY and 13% QoQ.
US Business Outlook and Lannett Acquisition
US formulations revenue for Q4 FY26 was $387 million, a decrease of 18% year-on-year on a constant currency basis, primarily due to higher gRevlimid sales in Q4 FY25. The full-year US formulations revenue stood at $1,631 million. The company is targeting a $2 billion revenue milestone in the US over the next 1-2 years, supported by base business expansion, new product launches, and the Lannett acquisition. The closing of the Lannett deal, initially expected earlier, is now anticipated by early Q2 FY27 due to delays caused by government closures affecting FTC approvals.
Biosimilars and CDMO Development
Aurobindo is strategically building its biosimilar business, focusing on products with longer life cycles and a strong COGS model to navigate market competition and price erosion. By 2030, the company aims to have 7-8 biosimilar products in Europe and growth markets, plus potentially 2-3 products in the US, targeting gross margins of 65-70% in the US. The Biological CDMO Unit-1 is expected to be commissioned by the end of this year, with revenues commencing in 2028, while Unit-2 revenues are projected to start from 2031. The long-term ambition is to evolve into a multi-modality, multi-customer CDMO by 2032.
Pen-G Plant Operations and China Plant Profitability
The Pen-G plant significantly ramped up operations in Q4 FY26, leading to increased power and fuel consumption, which contributed to higher operating costs. However, this enabled captive consumption of 6-APA, reducing raw material costs. Pen-G and 6-APA together achieved a positive EBITDA contribution in Q4 FY26, though for the full year FY26, they incurred an EBITDA loss of approximately ₹200 crores. The China plant, which also reported a loss in FY26, is expected to become profitable in FY27, targeting a low double-digit EBITDA margin.
Capital Expenditure and Liquidity Management
Net CapEx for Q4 FY26 was $82 million, bringing the full-year CapEx to $341 million. These investments were directed towards capacity enhancement projects, plant expenses, and the CMO project. The company's net cash position improved to $317 million by March 2026, up from $276 million in December 2025, after accounting for a $32 million payment for the Khandelwal Laboratories non-oncology business. The average finance cost for the quarter was 5%.