Aurobindo Pharma Limited — Q4 FY26 earnings call

Call held 22 May 2026

Management summary

Aurobindo Pharma reported record revenues and EBITDA for both Q4 and full-year FY26, driven by stable volumes and new product launches across businesses. While US formulations saw a decline due to prior year's high gRevlimid sales, Europe achieved a €1 billion revenue milestone. The company is focused on strategic growth levers including biosimilars, CDMO, and expanding its US and domestic businesses, despite facing increased operating costs from Pen-G plant operations and delays in the Lannett acquisition.

Highlights

  • FY26 revenues stood at ₹33,653 crores, while EBITDA came in at ₹6,856 crores, translating into a healthy EBITDA margin of 20.4%, both highest ever.

  • Q4 FY26 revenues were ₹8,853 crores and EBITDA stood at ₹1,801 crores, resulting in a robust margin of 20.3%.

  • Net profit increased by 2% year-on-year to ₹921 crores.

  • Europe formulations achieved a significant milestone of €1 billion revenue in terms of annual revenues for FY26.

  • Net cash position improved to $317 million at the end of March 2026 from $276 million in December 2025.

Concerns

  • U.S. formulations revenue decreased by 18% year-on-year on a constant currency basis in Q4 FY26, mainly due to high gRevlimid sales in Q4 FY25.

  • Operating cost excluding R&D increased 11% QoQ and 17% YoY, predominantly due to power and fuel consumption for the Pen-G plant.

  • Lannett deal closing is delayed to early Q2 FY27 due to government closure (FTC not functioning).

  • Ryzneuta product launch was delayed, and the market is very competitive, requiring time to establish a scientific story.

Key financials

2 periods

Q4 FY26

  • Revenue
    ₹8,853 Cr
  • EBITDA
    ₹1,801 Cr
    QoQ +2%
  • EBITDA Margin
    20.3%
  • R&D Expenditure
    ₹400 Cr

FY26

  • Revenue
    ₹33,653 Cr
    YoY +6%
  • EBITDA
    ₹6,856 Cr
    YoY +4%
  • EBITDA Margin
    20.4%
  • Net Profit
    ₹921 Cr
    YoY +2%
  • R&D Expenditure
    ₹1,590 Cr

What they filed

Q1 FY27: revenue up 16.3%, net profit up 25.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue7,796 7,979 8,382 7,868 8,286 +6%8,646 +8%8,853 +6%9,150 +16%
EBITDA1,566 1,578 1,760 1,603 1,678 +7%1,773 +12%1,750 −1%1,880 +17%
Net profit817 846 903 824 848 +4%910 +8%921 +2%1,032 +25%
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

SegmentQ4 FY26 RevenueFY26 Revenue
Formulation business₹7,646 Cr—
API Business₹1,208 Cr₹4,047 Cr
U.S. formulation—₹1,631 Cr
Europe₹2,795 Cr—
Growth markets₹980 Cr₹397 Cr
ARV Business₹36 Cr₹157 Cr
Specialty and Injectable₹122 Cr₹513 Cr

Capital allocation

high confidence
  • Capex $82 Mn this quarter · $341 Mn (FY26) planned
    • Capacity enhancement projects
    • Plant expenses
    • CMO project
    Net CapEx for the quarter is $82 million and for the year around $341 million, which includes capacity enhancement projects and plant expenses and CMO project.
  • Debt Debt disclosed Cost 5%
    The average finance cost for the quarter was 5%.
  • M&A Khandelwal Laboratories non-oncology business Acquisition · Closed · Consideration ₹[object Object] (cash)
    the business generated a net cash inflow [of $35mn] after payment of purchase consideration of Khandelwal Laboratories non-oncology business around $32 million.
  • M&A Lannett Acquisition · Pending regulatory · Consideration ₹[object Object] (undisclosed)

    Part of US business expansion to reach $2 billion revenue goal.

    Expected to contribute $300 million incremental sales.

    So, on that note, are you on track to close the Lannett deal, as indicated earlier? ... Probably, there will be some difference in timing. We will probably close by Q2 of the current fiscal. ... And you are already aware that Lannett is about $300 million.
  • Liquidity Liquidity disclosed Net cash position of the investment improved to $317 million at the end of March 2026 from $276 million in December 2025.
    the net cash position of the investment at the end of March 26 improved to $317 million from the net cash position of $276 million in December’25.

Guidance & targets

Profitability

  • EBITDA Margin Profitability · FY27 · High confidence north of 21%
    We expect EBITDA margins to sustain and progressively improve to north of 21%, reflecting the scale of our operations, execution capabilities and leveraging the new business lever.

    — S. Subramanian

  • China Plant EBITDA Profitability · this year (FY27) · High confidence profitable, low double-digit margin

    Previously loss in FY26 → profitable, low double-digit margin

    And in terms of the China plant also we incurred loss, which is expected to do a profitable EBITDA contribution this year. ... At least we are working to achieve a low double-digit EBITDA margin for the year.

    — S. Subramanian

  • Biosimilars Gross Margin (US) Profitability · going forward · High confidence 65%-70%
    On an average, you are looking at a gross margin (read, in the US) of around 65%-70%, Tushar. ... As we continue to evolve in the next 5-6 years, we will make the transition from around 65%-75% with more first wave or differentiating products or retail products adding into the business

    — Satakarni Makkapati

Revenue

  • US Revenue Revenue · near term (next 1-2 years) · Medium confidence $2 billion
    With these initiatives, our U.S. business is aiming to touch the $2 billion revenue milestone over the near term. ... Maybe in the next 1-2 years, definitely we are getting there.

    — Swami Iyer

  • CDMO Unit-1 Revenue Start Revenue · from 2028 · High confidence 2028
    So, a steady stream of revenues, to answer your question, would begin in Unit-1 from 2028.

    — Satakarni Makkapati

  • CDMO Unit-2 Revenue Start Revenue · from 2031 · High confidence 2031
    Two years from then, 2031, would be the start of revenues from Unit-2.

    — Satakarni Makkapati

  • Specialty and Injectable (ex-Revlimid) Growth Revenue · going forward · High confidence similar double-digit growth
    It is the other than the Lenalidomide, it is 13% and I feel like the same double-digit growth is expected going forward.

    — Yugandhar Puvvala

Product Portfolio

  • Biosimilars Products in Market Product Portfolio · by 2030 · Medium confidence 7-8 products in Europe and growth markets, plus potentially 2-3 products in the US
    By 2030, we are looking at biosimilars business having 7-8 products in Europe and growth markets, plus potentially 2-3 products in the US.

    — Satakarni Makkapati

Capacity

  • Pen-G Annualized Production Capacity · annualized · High confidence exceed 10,000 metric tons
    Based on current operating levels, we expect, annualized production, Pen-G production, to exceed 10,000 metric tons with a capacity utilization level exceeding 80% at consistent yields.

    — S. Subramanian

Market context

  • Europe Business Growth Revenue · going forward · High confidence double digit
    We are definitely trying to achieve the double digit growth. And, of course, considering the current geopolitical situations, we have taken it bit conservatively but we are confident it will be minimum double digit.

    — V. Muralidharan

  • Domestic Formulation Business Growth Revenue · this year (FY27) · High confidence double-digit
    And we expect overall; the entire domestic formulation business will grow in double-digit during this year.

    — S. Subramanian

What to watch in Q1 FY27

Lannett Acquisition Closing

Early Q2 FY27
Current Pending regulatory approval, delayed
Target Closed

Why it matters

The Lannett acquisition is a significant inorganic growth driver for the US business, crucial for achieving the $2 billion revenue target.

Probably, there will be some difference in timing. We will probably close by Q2 of the current fiscal.

Risks & concerns

  • Biosimilar price erosion and intense competition

    high

    The biosimilar market is highly competitive with significant price erosion, requiring a strong COGS model to maintain profitability.

    Management acknowledged

  • Increased operating costs from Pen-G plant

    medium

    Power and fuel consumption for the Pen-G plant significantly increased in Q4 FY26, leading to higher operating costs, which are expected to continue.

    Management acknowledged

  • Raw material, solvent, and freight price volatility

    medium

    Rupee depreciation is linked to rising raw material and solvent prices (solvents up 2.7X), and freight costs, which can offset benefits.

    Management acknowledged

  • Regulatory delays for Eugia facilities

    medium

    Waiting for EIR for Eugia Unit III and Unit I, which impacts new product launches from these plants.

    Management acknowledged

  • Market competitiveness and delayed establishment for Ryzneuta

    medium

    Despite approval, Ryzneuta's launch was delayed, and it will take time to establish the product in a very competitive market.

    Management acknowledged

Q&A highlights

6 direct
Operating cost increase due to Pen-G plant Direct
what is the main factor which has increased the cost, is predominantly power and fuel consumption, for the Pen-G plant which has taken off very significantly in the last quarter, i.e. the Q4 of this quarter. That is the reason why it has increased.

Clarifies the reason for increased operating costs and indicates this trend will continue as Pen-G operations scale up, impacting overall cost structure.

Asked by Tausif Shaikh

EBITDA loss from new projects (Pen-G, Eugia, Biosimilar, China) Direct
if you take Pen-G and 6-APA put together, we have got a positive EBITDA contribution last quarter. ... Last year as a whole, we would have incurred around ₹200 crores plus EBITDA loss on account of Pen-G and 6-APA (Lyfius & Qule). And in terms of the China plant also we incurred loss, which is expected to do a profitable EBITDA contribution this year.

Provides specific figures for losses incurred by new projects in FY26 and outlines the path to profitability for Pen-G and China plant in FY27.

Asked by Tausif Shaikh

Timeline for US business to reach $2 billion revenue Partial
we cannot say any time be it in the near future, probably in the next maybe couple of years I would think. ... Maybe in the next 1-2 years, definitely we are getting there.

Gives a broad timeline for a key revenue target, highlighting dependence on acquisitions and business opportunities.

Asked by Damayanti Kerai

Lannett acquisition closing timeline Direct
Probably, there will be some difference in timing. We will probably close by Q2 of the current fiscal. ... I think early Q2 may be a better estimate.

Provides an updated timeline for a significant acquisition that is crucial for US growth, explaining the reason for the delay.

Asked by Damayanti Kerai

Commercialization and revenue start for Biological CDMO unit Direct
About the CDMO unit, the Unit-1 will be commissioned by end of this year. ... a steady stream of revenues, to answer your question, would begin in Unit-1 from 2028. ... Two years from then, 2031, would be the start of revenues from Unit-2.

Clarifies the phased approach and specific timelines for revenue generation from the new CDMO facilities.

Asked by Charul Agarwal

Biosimilar strategy, market entry, and gross margins Direct
What is important is to ensure that you have a basket of products that you can go to into the market, create a brand name, ... and make sure that your COGS setting is good enough to still give you a reasonable margin. ... On an average, you are looking at a gross margin (read, in the US) of around 65%-70%, Tushar.

Explains the strategic rationale for biosimilar market entry despite competition, focusing on COGS and product mix for sustainable margins, and provides specific margin targets.

Asked by Nitin Agarwal, Tushar Manudhane

Impact of INR depreciation on EBITDA and FY27 margin guidance Partial
See, nothing comes free. When rupee is depreciating, why is it depreciating? Raw material prices are going up and solvent prices have gone by 2.5X. ... So, you have to look at it in a holistic manner rather than seeing it in a very limited manner.

Highlights that while INR depreciation can be positive, it's offset by rising raw material, solvent, and freight costs, implying that the 21% EBITDA margin guidance already factors in these dynamics.

Asked by Kunal Dhamesha

Launch of eczema product (ADQUEY) and Ryzneuta update Direct
for the ADQUEY, which is the brand name for our eczema drug, we are going to build the suitable infrastructure as it is required because we will be in a competitive space... Most probably Quarter 2 of our fiscal year is when we are aiming to launch. ... for the Ryzneuta, though we had an approval for a year and a half, the product launch was delayed. ... The market is very competitive, so it will take us some time for that product to be established.

Provides specific launch timeline for a new NCE and acknowledges challenges and delays in establishing another key product (Ryzneuta) in a competitive market.

Asked by Tarang Agrawal

3 min read 6 chapters

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%.

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