Summary
Alivus Life Sciences Limited - Q3 FY 2026 Earnings Call Summary Thursday, January 22, 2026 18:00 IST
Event Participants
Executives 3 Dr. Yasir Rawjee (MD & CEO), Mr. Tushar Mistry (CFO), Ms. Soumi Rao (IR)
Analysts 8 Ahmed Madha, Ankit Minocha, Karthik Swaminathan, Krishnendu Saha, Nitin Agarwal, Pratik Kothari, Sajal Kapoor, Sunil Kothari, Tarang, Yog Rajani
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹673 crores | +4.8% YoY, +14.4% QoQ; Highest ever quarterly revenue driven by CDMO recovery and non-GPL growth. |
| Gross Profit | ₹397 crores | +11.2% YoY, +16.9% QoQ; Driven by new launches, favorable product mix, and operational efficiencies. |
| Gross Margin | 58.9% | +330 bps YoY; Expansion attributed to high-margin new products and yield improvements. |
| EBITDA | ₹245 crores | +22.1% YoY, +26.5% QoQ; Highest ever reported quarterly EBITDA. |
| EBITDA Margin | 36.4% | +510 bps YoY; Benefited from CDMO ramp-up and cost optimization in manufacturing. |
| PAT | ₹150 crores | 22.3% PAT margin; Strong flow-through from operational performance. |
| 9M FY26 Revenue | ₹1,863 crores | +7.2% YoY; Non-GPL business grew at 16.1%, offsetting fluctuations in GPL business. |
| R&D Expenditure | ₹23 crores | 3.4% of sales; Focus on flow chemistry, green chemistry, and particle engineering. |
| Capex | ₹105 crores | Focus on Solapur (Greenfield) and brownfield expansions at Dahej/Ankleshwar. |
| Cash & Equivalents | ₹733 crores | Net debt-free status maintained with ₹221 crores free cash flow in 9M FY26. |
Geographic & Segment Commentary
- CDMO Segment: Delivered exceptional recovery with 85.3% YoY revenue growth and 100% QoQ growth. Momentum was driven by new projects (Project 4 and 5) contributing significantly in H2. Management expects to conclude 1-2 additional projects by Q1 FY27.
- Generic API (Regulated Markets): Strong performance in Europe, Japan, and North America. Business is supported by 595 cumulative DMF/CEP filings and a steady pipeline of new launches as patents expire.
- Generic API (Emerging Markets/ROW): Robust traction in LATAM, Russia, and India. While subject to quicker vendor changes than regulated markets, these segments contributed meaningfully to the 16.1% non-GPL growth.
Company-Specific & Strategic Commentary
- Operational Efficiency & Flow Chemistry: Management achieved 40% cost reduction on a major product via flow chemistry. This initiative is being scaled to high-volume APIs to optimize energy and material usage.
- High-Potent API Portfolio: Currently has 27 products in the active grid with a total addressable market of $70 billion. Nine products are validated, with meaningful revenue expected to begin in late FY28.
- Capacity Expansion & Backward Integration: Total reactor capacity is increasing from 1,400 KL to 2,100 KL. 400 KL is specifically dedicated to backward integration to secure margins and supply for high-volume molecules.
- Solapur Greenfield Site: Operations are delayed by approximately three months, now expected to start in July 2026. The site will initially service ROW markets and shortage products to trigger regulatory inspections.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | High single-digit (FY26/FY27) | Driven by non-GPL expansion and CDMO ramp-up; volume growth expected at 15-17%. |
| EBITDA Margin | 30% - 32% (Sustainable) | Upward revision from earlier 28-30% guidance due to operational efficiencies and product mix. |
| FY26 Capex | ₹450 crores | Revised down from ₹600 crores; ₹150 crores deferred to FY27 due to fine-tuning of Solapur timelines. |
| CDMO Revenue | ~$12M+ from Proj 4 & 5 | Expected to top out in H2 FY27; incremental projects likely to be added in Q1 FY27. |
Risks & Constraints
| Risk | Context |
|---|---|
| Geopolitical Instability | Global operations are exposed to fragile international relations; however, geographic diversification acts as a partial hedge. |
| Concentration/Pricing | Regulatory market pricing is stable, but ROW markets face higher competitive intensity and 4.5% - 5% annual price erosion across the portfolio. |
| Project Attrition | CDMO business involves niche specialty molecules where innovator attrition is high; deal sizes are currently limited to $4M-$8M per project. |
| Currency Volatility | Strengthening Renminbi against the Dollar and weakening Rupee creates a “double hit” on sourcing costs from China. |
Q&A Highlights
- Margin Sustainability
- Question: What explains the significant margin jump compared to 2-3 years ago? (Pratik Kothari)
- Answer: Three levers: increased CDMO contribution, high-margin new launches (Europe/China/LATAM), and operational yield improvements. These are considered sustainable, justifying the 30-32% guidance (Dr. Yasir Rawjee).
- Solapur Delay & Strategy
- Question: Why is the Solapur capacity lower and delayed? (Pratik Kothari)
- Answer: Delayed by three months (July start). Capacity was calibrated to avoid under-absorption. It will focus on backward integration and shortage products to trigger FDA inspection by late FY28 (Dr. Yasir Rawjee).
- CDMO Scale
- Question: Why not target $50M-$100M NCE opportunities like other CDMOs? (Sajal Kapoor)
- Answer: Such large opportunities are rare as big pharma keeps manufacturing in tax-efficient hubs like Ireland. Alivus targets lifecycle management with faster commercialization (18-24 months) and lower risk (Dr. Yasir Rawjee).
- Asset Utilization
- Question: Why is asset turnover low at 2.3x? (Krishnendu Saha)
- Answer: Low turnover is a function of being in an investment/capex phase. It is expected to stabilize around 2.0x as new capacities come online (Tushar Mistry).
Key Takeaway
Alivus Life Sciences delivered a record-breaking Q3 FY26, characterized by its highest-ever quarterly revenue of ₹673 crores and an exceptional EBITDA margin of 36.4%. This performance was spearheaded by a 100% QoQ recovery in the CDMO segment and steady 16.1% growth in the non-GPL business. Strategically, the company is pivoting toward higher complexity through a 27-product high-potent API pipeline and the implementation of flow chemistry to drive 40% cost reductions in high-volume molecules. While the ₹450 crore capex program at Solapur and Ankleshwar/Dahej has seen minor timing shifts, management remains confident in maintaining 30-32% margins. The company’s net debt-free balance sheet and ₹733 crore cash reserve provide significant stability, though management maintains a conservative “quality-over-volume” stance regarding inorganic growth. Looking ahead, Alivus is positioned for high single-digit revenue growth supported by a 15-17% volume expansion as it navigates a 5% pricing erosion environment.
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