Ajanta Pharma Q1 FY27 Earnings Call: Guides High-Teens Revenue Growth, US Mid-Single-Digit Growth Flagged (AJANTPHARM)

Ajanta Pharma Ltd held its Q1 FY27 earnings call on July 30, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Strong Start to FY 2026-2027 Across Revenue, Profit & Returns

• Revenue grew 25% YoY — to Rs.1,626 crores in Q1 FY 2026-2027, with PAT rising 31% YoY to Rs.334 crores.
• Gross margin at 80% — improving ~100 bps QoQ in Q1 FY 2026-2027, though management guided the full-year FY 2026-2027 gross margin to ~78% (±100 bps), reflecting expected US price erosion.
• Adjusted EBITDA of Rs.454 crores — margin of 28% in Q1 FY 2026-2027, with full-year FY 2026-2027 EBITDA margin guidance set at ~27% (±100 bps), excluding forex gains/losses.
• Interim dividend of Rs.32 per share — board approved Rs.32 per share (face value Rs.2), with a total payout of ~Rs.400 crores.
• ROCE of 37% and RONW of 28% — as of June 2026, reflecting efficient capital deployment.
• Q1 FY 2026-2027 included a forex gain of Rs.20 crores in other income — management excluded this from the underlying EBITDA margin guidance.

India Delivers 24% Growth; Africa Branded Maintains Momentum

• India business grew 24% YoY — to Rs.509 crores in Q1 FY 2026-2027, contributing 32% of total company revenue (Q1 FY 2025-2026: Rs.409 crores).
• IQVIA MAT June 2026 data shows Ajanta outpacing IPM — the company grew 15% vs IPM's 11%, with volume growth 40% higher and new product launches 75% above market averages.
• Core therapeutic segments in Q1 FY 2026-2027 — cardiology (37% of India branded sales), ophthalmology (29%), dermatology (22%), pain management (10%), and new therapeutic areas (2%).
• Trade generics contributed Rs.48 crores — in Q1 FY 2026-2027, up from Rs.39 crores in Q1 FY 2025-2026.
• Africa branded sales grew 30% YoY — to Rs.295 crores in Q1 FY 2026-2027, with three new product launches; management maintained high double-digit growth guidance for full FY 2026-2027.
• Africa institutional business grew 17% YoY — to Rs.49 crores in Q1 FY 2026-2027, in line with expectations, with management reiterating high double-digit growth for FY 2026-2027.
• PCPM for India MRs stood at 4.5 lakhs — in Q1 FY 2026-2027, below peer averages of 5+ lakhs, which management attributed to segment mix: ophthalmology at par, while newer segments (gynecology, nephrology) started only 18 months ago have lower productivity.

Geopolitical Headwinds Hit Q1; Supply-Chain Normalisation Expected from Q2

• Asia branded generic sales declined 16% YoY — to Rs.225 crores in Q1 FY 2026-2027, attributed to supply chain disruptions from Middle East geopolitical developments.
• Q1 FY 2026-2027 Asia sales of Rs.255 crores — compared to Rs.310, Rs.290, and Rs.274 crores in the three preceding quarters of FY 2025-2026, showing a clear sequential dip.
• Volumes pushed to Q2 FY 2026-2027 — management noted that supplies have already been dispatched and sales realisation is pending, providing visibility for elevated Q2 FY 2026-2027 performance.
• Management reiterated high-teens growth guidance — for full FY 2026-2027, expecting catch-up in Q2–Q4 as delayed deliveries shift into Q2.
• No material raw material cost impact in Q1 — due to inventory holdings, but management flagged a potential impact from Q2 FY 2026-2027 onwards.

57% Q1 Growth but Mid-Single-Digit Guidance; Tariff Exemption Until April 2027

• US generic revenue grew 57% YoY — to Rs.487 crores in Q1 FY 2026-2027, driven primarily by existing products; management declined to provide a volume vs. new-launch breakdown.
• Management maintained mid-single-digit growth guidance — for the full FY 2026-2027, citing expected competition and price erosion; Q1 momentum is not expected to persist.
• Section 302 policy exempts generics from tariffs — "until April 2027", according to management, but the US President announced a new study with a 2-year timeline from August 28, 2026, creating uncertainty around the post-exemption period.
• 5 to 7 filings expected in FY 2026-2027 — with only two launches in Q1 FY 2026-2027 (minimal contribution so far); most launches are anticipated in Q4 FY 2026-2027, subject to FDA approval.
• Most US portfolio products hold 20%+ market share — per management, providing a competitive moat in the base business.
• No FY 2027-2028 guidance provided for the US business — management cited uncertainty around approvals, product launches, and market share.

Gross Margin to Normalise; Employee Costs Rise; Rs.400 Cr Capex Plan

• FY 2026-2027 gross margin guided at ~78% — (±100 bps), ~100-200 bps lower than Q1's 80%, primarily due to expected price erosion in the US business.
• Employee costs rose 12% QoQ — in Q1 FY 2026-2027, driven by normal annual wage hikes and the addition of ~50 new international MRs during the quarter.
• FY 2026-2027 capex guided at Rs.400 crores — comprising Rs.100 crores for maintenance and Rs.300 crores for the Pithampur plant expansion; Q1 FY 2026-2027 capex was Rs.83 crores.
• R&D expenditure expected at ~5% of revenue — for FY 2026-2027; Q1 FY 2026-2027 R&D was ~4% (Rs.66 crores).
• Other expenses grew 32% YoY — in Q1 FY 2026-2027, but only 11% QoQ, reflecting continued strategic investment.
• No operating cash flow data was provided — for Q1 FY 2026-2027.

High-Teens Revenue Growth; Segment-Level Guidance Maintained

• FY 2026-2027 revenue growth guided at high-teens — management reiterated this at the consolidated level, supported by broad-based segment performance.
• India business: mid-teens growth for FY 2026-2027 — driven by volume, new launches, and field force expansion; Q1's 24% was above the guided run-rate.
• Africa branded: high double-digit growth for FY 2026-2027 — management noted the 30% Q1 growth was slightly elevated but sustainable, supported by field force expansion and new product launches.
• Asia business: high-teens growth for FY 2026-2027 — with recovery expected from Q2 FY 2026-2027 onwards as supply chains normalise.
• US business: mid-single-digit growth for FY 2026-2027 — with 5-7 filings, though most launches are back-ended to Q4, subject to FDA approval.
• Effective tax rate expected at ~26% — for FY 2026-2027, with EBITDA margin of ~27% (±100 bps) excluding forex.
• Fematen aid opportunity remains early-stage — management noted that "IQVIA data for May–June 2026 shows no significant growth on a MAT basis" in India (market size ~Rs.850 crores), and launches in Asia/Africa are "two years away", making it too early to assess.