Summary
Ajanta Pharma Limited - Q3 FY 2026 Earnings Call Summary Friday, January 30, 2026
Event Participants
Executives 4 Arvind Agrawal (CFO), Rajeev Agarwal (VP, Finance and IR), Rajesh Agrawal (Joint Managing Director), Yogesh Agrawal (Managing Director)
Analysts 8 Aman Kumar Singh (Individual Investor), Abdulkader Puranwala (ICICI Securities), Dheeresh (WhiteOak), Dhruv Maheshwari (Perpetuity Ventures LLP), Foram Parekh (Bank of Baroda Capital Markets), Kashish Thakur (Elara Capital), Kunal Randeria (Axis Capital), Tushar Manudhane (Motilal Oswal)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹1,375 crores | +20% YoY; Driven by strong performance in India and US Generics. |
| India Business Revenue | ₹409 crores | +19% YoY; Outperformed IPM growth (11% vs 9% MAT Dec '25) through volume and new launches. |
| US Generics Revenue | ₹399 crores | +52% YoY; Benefit from 8 new launches in 12 months, market share gains, and flu seasonality. |
| Asia Branded Generics | ₹288 crores | -9% YoY; Below internal plan due to softer traction in specific markets and delayed shipments. |
| Africa Branded Generics | ₹230 crores | +33% YoY; Significantly outperformed initial mid-single digit growth expectations. |
| EBITDA | ₹382 crores | +19% YoY; Margin at 28% for the quarter. |
| Gross Margin | 79% | +100 bps YoY; Management targets 78% (+/- 1%) for the full year. |
| R&D Expenditure | ₹63 crores | 5% of revenue; Consistent with strategy of investing in complex products. |
| Return on Capital Employed | 34% | Reflects high capital efficiency as of December 2025. |
| Return on Net Worth | 26% | Sustained high returns to shareholders. |
Geographic & Segment Commentary
- India Branded: Delivered 19% growth, significantly outperforming the Indian Pharmaceutical Market (IPM). Growth was driven by dermatology (outperforming market by 2x) and gynaecology, while cardiology remains a core pillar despite IQVIA data anomalies. The company added 300 medical representatives (MRs) YTD to strengthen field execution.
- US Generics: Recorded robust 52% growth, contributing 26% of total revenue for the 9-month period. Performance was bolstered by a “flu seasonal product” and market share increases in older products. Management anticipates double-digit growth for this segment in FY 2027.
- Emerging Markets (Asia/Africa): Africa Branded saw an “impressive” 33% surge, while Asia faced a 9% contraction due to shipment delays and market-specific softness. Management expects Asia to recover to mid-to-high single-digit growth for the full year.
- Africa Institution: Grew 22% in Q3 to ₹41 crores. Despite a 6% degrowth for the 9-month period, management expects a stronger Q4 to lead to modest full-year growth.
Company-Specific & Strategic Commentary
- GLP-1 Strategic Partnership: Partnered with Biocon for Semaglutide across 26 emerging market countries (23 exclusive). Ajanta will handle regulatory filings starting Q1 FY27, with revenue expected by FY28 under Ajanta’s brand names.
- Field Force Expansion: Total MR strength increased to 3,750 following the addition of 150 reps in Q3. The expansion focuses on increasing coverage in high-productivity therapeutic areas like Cardiology, Ophthalmology, and Dermatology.
- Manufacturing Expansion: Commenced a new liquid line manufacturing facility at Pithampur. This contributed to higher depreciation costs but supports the US and international product pipeline.
- Capital Allocation: Management is actively scouting for pharmaceutical acquisitions with a corpus of ₹1,000 crores+. This may influence future dividend/buyback payout ratios, which were 44% in the current period.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Consolidated Revenue | Mid-teens growth (FY 2026) | Driven by India and US outperformance offsetting Asia softness. |
| EBITDA Margin | 27% (+/- 1%) (FY 2026) | Resilient margins despite higher OpEx and MR additions. |
| Capital Expenditure | ~ ₹300 crores (FY 2026) | ₹235 crores already spent in first 9 months. |
| Asia Branded Growth | Mid-to-high single digit (FY 2026) | Recovery expected in Q4 as delayed shipments are realized. |
| US Generics | Double-digit growth (FY 2027) | Expecting continued momentum from new launches and market share. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regulatory/Labour Costs | New Government of India labor codes resulted in a ₹7 crore additional provision this quarter for gratuity and liabilities. |
| Geographic Concentration | Softness in specific Asian markets led to a 9% quarterly degrowth, highlighting reliance on regional economic stability. |
| Competition in GLP-1 | While emerging markets are expected to have lower competition (4-6 players), India will see high intensity (15-20+ players). |
| Forex Volatility | Mark-to-market forex loss stood at ₹61 crores for the 9-month period, though partially offset by gains in other income. |
Q&A Highlights
US Business Sustainability
- Question: What drove the 52% growth and is it sustainable into FY27? (Tushar Manudhane)
- Answer: Growth was a “triple play” of 8 new launches, market share gains in base products, and a seasonal flu product bump in Nov-Jan. While FY27 may not match this year’s high growth rate, double-digit growth is certain (Yogesh Agrawal).
Biocon Partnership
- Question: What are the details of the GLP-1 (Semaglutide) tie-up? (Abdulkader Puranwala)
- Answer: Biocon provides the dossier and finished product for 26 countries. Ajanta handles regulatory approvals and commercialization under its own brand. Revenue is expected to start in FY28 (Yogesh Agrawal).
India Growth Discrepancy
- Question: Why is Ajanta reporting 19% growth while IQVIA shows 15%? (Kunal Randeria)
- Answer: The discrepancy is primarily due to an anomaly in IQVIA’s cardiology data. Internal records show cardiology growing in line with the market; there is no channel stuffing involved (Rajesh Agrawal / Arvind Agrawal).
Acquisition Strategy
- Question: Why has the payout ratio dropped to 44%? (Aman Kumar Singh)
- Answer: The company is increasing its thrust on acquisitions and has set aside ₹1,000 crores+ for potential pharma-related deals, which may impact cash distribution (Arvind Agrawal).
Key Takeaway
Ajanta Pharma delivered a strong Q3 FY 2026 with 20% revenue growth, underpinned by a 52% surge in US Generics and a healthy 19% growth in the India Branded segment. Despite temporary softness in Asia due to shipment timing, the company maintained resilient EBITDA margins of 28%. Strategically, Ajanta is positioning for the next growth phase through its 26-country GLP-1 partnership with Biocon and the addition of 300 medical representatives this year to deepen market penetration in chronic therapies. Management remains committed to a ₹1,000 crore+ acquisition strategy and expects to maintain mid-teens revenue growth for the full year. Looking ahead, the focus remains on stabilizing the Asia business and operationalizing the GLP-1 pipeline to sustain double-digit growth into FY 2027.
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