Ajanta Pharma Limited reported strong audited consolidated financial results for the quarter and year ended 31 March 2026, with the Board of Directors approving the results at their meeting held on 5 May 2026. The specialty pharmaceutical formulation company posted a 21% rise in quarterly revenue and an 18% increase in profit after tax, reflecting broad-based growth across its key business segments. Following the results, management shared its outlook for FY27, forecasting revenue growth of 16-18%, an EBITDA margin of 27% (+/- 1%), and gross margins of approximately 77% (+/- 1%), factoring in ongoing investments, more filings, and rising freight and raw material costs. Pursuant to Regulation 47 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the financial results were published in the Mumbai edition of Business Standard and the Mumbai edition of Navakal on 6 May 2026. Additionally, pursuant to Regulation 30, the audio recording of the earnings call held on 5 May 2026 at 4:30 p.m. has been uploaded on the company's website, with the written transcript to be submitted in due course.

FY27 Management Guidance

During the post-results earnings call, Ajanta Pharma's management provided forward-looking guidance for FY27. The company targets revenue growth of 16-18%, while aiming to maintain an EBITDA margin of 27% (+/- 1%), taking into account continued investments in the business, increased ANDA filings, and headwinds from rising freight and raw material costs. Gross margins are anticipated to remain around 77% (+/- 1%) for the next year.

Q4 FY26 Consolidated Financial Performance

For the fourth quarter of FY26, Ajanta Pharma delivered robust top-line and bottom-line growth compared to the corresponding quarter of the previous year. Quarterly revenue from operations rose to Rs. 14.22B from Rs. 11.7B YoY. Consolidated net profit rose to Rs. 2.70B from Rs. 2.25B YoY. EBITDA stood at Rs. 3.33B against Rs. 2.97B YoY, with an EBITDA margin of 23.42% compared to 25.38% in the prior-year quarter. The company noted a mark-to-market forex loss of Rs. 42 cr. during the quarter; excluding this impact, adjusted EBITDA stood at Rs. 375 cr., reflecting 26% growth with an adjusted EBITDA margin of 26%.

FY26 Full-Year Consolidated Performance

For the full year FY26, Ajanta Pharma sustained strong growth momentum. EBITDA for FY26 was Rs. 1,395 cr. against Rs. 1,260 cr. in FY25, with an EBITDA margin of 26%, representing 11% growth. Excluding the mark-to-market forex loss of Rs. 103 cr., adjusted EBITDA stood at Rs. 1,498 cr., reflecting 18% growth with an adjusted EBITDA margin of 27%. Return on Capital Employed (ROCE) stood at a healthy 33% and Return on Net Worth (RONW) at 25% for FY26.

Segment-Wise Performance

The US Generics segment was the standout performer, with Q4 FY26 revenue surging 56% to Rs. 505 cr. from Rs. 325 cr. in Q4 FY25, and full-year revenue rising 49% to Rs. 1,557 cr. from Rs. 1,047 cr. Within Branded Generics, the Africa market posted strong growth of 37% in Q4 and 15% for the full year. The India Branded Generics business grew 9% in Q4 and 14% for the full year. The Asia segment reported a decline of 10% in Q4 and 1% for the full year. Africa Institution revenue grew 71% in Q4 and 9% for the full year.

India Branded Generics and Therapy Performance

As per IQVIA MAT March 2026, Ajanta Pharma's India branded generic performance exceeded Indian Pharmaceutical Market (IPM) growth by 33%. Growth was driven by new launches, which exceeded IPM by 68%, and volumes, which exceeded IPM by 34%. The company's overall India growth of 13% outpaced the IPM's 10% growth. Therapy-wise performance compared to IPM is detailed below.

ANDA Status and R&D Investments

As at the end of FY26, Ajanta Pharma's ANDA pipeline reflects continued investment in the US generics business. The company filed 5 ANDAs during the year, received 4 approvals, and launched 4 products, bringing total commercialized ANDAs to 49, with 19 awaiting US FDA approval and 6 holding tentative approval.

R&D expenditure for FY26 stood at Rs. 252 cr., up from Rs. 161 cr. in FY25, maintaining a consistent 5% of revenue. In Q4 FY26, R&D spend was Rs. 70 cr. compared to Rs. 53 cr. in Q4 FY25, also at 5% of revenue.

Auditor's Emphasis of Matter and Key Disclosures

The statutory auditors, B S R & Co. LLP, issued an unmodified opinion on both the consolidated and standalone financial results for the quarter and year ended 31 March 2026. However, the auditors drew attention to an emphasis of matter: in August 2025, Income Tax Authorities carried out search operations at certain premises of the company. The company subsequently received a notice dated 6 February 2026 under Section 158BC of the Income Tax Act, 1961, for the block period from 1 April 2019 to 17 November 2025. The company filed the return for the said block period on 6 April 2026. Pending any subsequent communication from the concerned authorities, the consequent impact on the financial results for the year ended 31 March 2026, if any, is currently not ascertainable. The auditors' opinion was not modified in respect of this matter.

On the standalone basis, Ajanta Pharma reported revenue from operations of Rs. 4,845.92 cr. for FY26 against Rs. 4,322.04 cr. in FY25, with standalone profit for the period at Rs. 946.82 cr. compared to Rs. 916.89 cr. in FY25. The company operates exclusively in one reportable business segment — Pharmaceuticals — and has 7 manufacturing facilities in India along with an R&D centre in Mumbai, with ground presence in 30+ countries globally.

Ajanta Pharma has received a maintained Buy rating from Jefferies, with the brokerage setting a target price of ₹3550. The reaffirmation follows a Q4 performance that Jefferies described as an all-round beat, underpinned by robust geographic expansion across key international markets.

Strong International Performance Drives Q4 Beat

The standout contributors to Ajanta Pharma's Q4 outperformance were its Africa and US segments, which delivered impressive year-on-year growth. Africa recorded a growth of +37% YoY, while the US segment surged +55% YoY, emerging as the primary engines of the quarterly beat. These results reflect the company's strengthening presence in high-growth international markets.

The following table summarizes the key highlights from Jefferies' assessment:

Operational and Strategic Highlights

Beyond the headline numbers, Jefferies highlighted several operational and strategic factors supporting its positive stance on the stock:

• Supply chain normalization is improving, providing a more stable operational foundation.
• Management outlook on branded generics remains positive, reinforcing confidence in the company's core business model.
• US momentum continues, though Jefferies noted it is moderating from the elevated growth levels seen in Q4.
• India growth remained moderate during the quarter.
• Asia experienced temporary weakness, though this is not viewed as a structural concern.

EPS Estimate Revised Downward

Despite the broadly positive assessment, Jefferies trimmed its FY27E EPS estimate by 3%, attributing the revision to a higher tax rate. This adjustment reflects a recalibration of earnings expectations rather than any deterioration in the company's underlying business fundamentals. The maintained Buy rating and target price of ₹3550 indicate that Jefferies continues to view the stock favorably on a risk-reward basis, even after accounting for the earnings revision.