Ajanta Pharma Q1 FY27 Results (NSE: AJANTPHARM)
Signal: Margin pressure
The read
Q1FY27 delivered revenue growth acceleration (+25% YoY, vs +21.5% in Q4FY26 and +13.8% in Q1FY26) on stellar US generics (+57%) and India branded (+24%) performance, but OPM contracted 200bps YoY to 26.1% as other expenses (including forex loss) grew 36% YoY — partially offset by a 169% surge in other income (mainly forex gains) that lifted PAT growth to +31% YoY. The adjusted EBITDA margin (ex-forex) of 28% still shows underlying margin pressure from higher employee and selling costs. The Asia segment remains a drag, declining 16% YoY. Management declared a ₹32/share interim dividend (₹400 Cr total payout).
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,625.96 Cr | 25% | 14.4% |
| EBIT | ₹446.8 Cr | 35% | |
| Net profit | ₹334.22 Cr | 31% | |
| EPS | ₹26.75 | 31% | |
| EBIT margin | 26.1% |
P&L walk
Revenue surged 25% YoY to ₹1,626 Cr, driven by US generics (+57%) and India branded generics (+24%); OPM contracted 200bps YoY to 26% as other expenses (incl. forex loss) grew 36% YoY, but PAT jumped 31% aided by a 169% surge in other income.
Segments
The filing reports only one segment ('Pharmaceuticals'), but the press release provides geography-level detail: India branded generics ₹509 Cr (+24% YoY), Asia branded generics ₹255 Cr (-16%), Africa branded generics ₹295 Cr (+30%), US generics ₹487 Cr (+57%), Africa Institution ₹70 Cr (+83%). The US generics business was the standout growth engine (+57%) while Asia declined sharply (-16%).
Key positives
- Revenue growth accelerated to 25% YoY (vs 21.5% in Q4FY26), driven by US generics surge (+57% to ₹487 Cr) and India branded +24%.
- Gross margin expanded ~100bps YoY to ~80%, indicating favorable input cost trends and product mix.
- PAT grew 31% YoY to ₹334 Cr, aided by strong operational revenue and higher other income – EPS at ₹26.75 (+31% YoY).
- India branded generics outperformed IPM by 36% (IQVIA MAT Jun 2026) with volumes exceeding IPM by 40% and new launches beating IPM by 76%.
- Board declared ₹32/share interim dividend (₹400 Cr payout) – strong capital return to shareholders.
Key concerns
- OPM contracted 200bps YoY to 26.1% (reported EBITDA margin) as employee cost (+26% YoY) and other expenses (+32% YoY) grew faster than revenue.
- Asia branded generics revenue declined 16% YoY (₹255 Cr vs ₹304 Cr), attributed to war-related disruptions – continued drag.
- Other income inflated PAT: forex gain of ₹50.47 Cr (vs ₹9.38 Cr in Q1FY26) contributed ~15% of PBT; base effect may reverse.
- Tax expense grew 49% YoY (₹112.58 Cr vs ₹75.79 Cr) primarily due to higher current tax – effective tax rate rose from 23% to 25%.
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