Ajanta Pharma Ltd held its Q2 FY27 earnings call on October 30, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.
Broad-Based 33% Revenue Growth with Margin Expansion
Q2 FY 2026-2027 revenue grew 33% YoY to Rs.1,794 Cr (vs Rs.1,354 Cr in Q2 FY 2025-2026), with every business growing; H1 FY 2026-2027 revenue rose 29% to Rs.3,420 Cr.
EBITDA grew 47% YoY to Rs.543 Cr at a 30% margin in Q2 (vs 27% in Q2 FY 2025-2026); H1 reported EBITDA was Rs.971 Cr (28%), or Rs.997 Cr adjusted (29%) excluding a Rs.26 Cr FX loss.
PAT rose 49% YoY to Rs.388 Cr (~22% of revenue) in Q2; H1 PAT was up 40% at Rs.722 Cr, with an H1 effective tax rate of 26.5% expected to hold for full FY 2026-2027.
Gross margin held at 79% in both Q2 and H1 FY 2026-2027, improvement over FY 2025-2026 primarily due to favorable currency; full FY 2026-2027 guided at ~78% ±100bps.
Balance sheet strengthened sharply between March 2026 and September 2026: ROCE improved from 33% to 41%, return on net worth from 25% to 31%, receivable days fell from 125 to 100, and net cash and investments stood at Rs.574 Cr after ~Rs.400 Cr of interim dividend paid in Q2.
Revenue mix affirmed the diversified model: India 28%, Asia & Africa branded generics 38%, US generics 27%, Africa institutional 7% of Q2 FY 2026-2027 revenue.
US and Africa Surge; Asia Rebounds After Soft Q1
US generics grew 41% YoY to Rs.484 Cr in Q2 (H1: Rs.971 Cr, +49%, partly on a lower base); constant currency growth was ~30-35% in Q2 and ~35% in H1 FY 2026-2027 per MD Yogesh Agrawal.
Africa branded generics grew 41% YoY to Rs.312 Cr in Q2 (H1: Rs.607 Cr, +35%), on market share gains, new launches (3 in H1), field force additions over the last 2-3 years, and favorable currency.
Asia rebounded with 18% growth to Rs.366 Cr in Q2 vs a depressed Rs.255 Cr in Q1 FY 2026-2027; management said geopolitical supply-chain and logistics disruptions have been ironed out, with sales pushed out of Q1 expected to reflect in Q2-Q4 FY 2026-2027.
Africa institutional business (7% of revenue) beat expectations: Q2 sales grew 259% to Rs.116 Cr; H1 sales Rs.187 Cr, up 164%. Management does not expect H1-level sales to sustain in H2 FY 2026-2027 given unpredictable institutional procurement timing and value.
India sales grew 16% YoY to Rs.504 Cr in Q2 (H1: Rs.1,013 Cr, +20%), with trade generics contributing Rs.56 Cr in Q2 and Rs.104 Cr in H1 FY 2026-2027.
Currency was a tailwind: ~4-5% exchange gain across the entire export business (Asia, Africa, US) in Q2 FY 2026-2027, possibly slightly higher; net H1 FX effect was a Rs.43 Cr gain.
Outpacing IPM; MR Productivity Steps Up Markedly
MR productivity (PCPM) reached Rs.4.5 lakhs in H1 FY 2026-2027 vs Rs.3.7 lakhs for the entire FY 2025-2026 — characterized by Rajesh Agrawal as a substantial gain.
Per IQVIA MAT September 2026, Ajanta grew 17% vs IPM growth of 13%, with volume growth of 18% and new-launch growth exceeding the market by 70%; ranking improved to 23rd from 24th in March 2026.
Ajanta is number one in ophthalmology; derma and pain are growing ahead of IPM, while cardiovascular is almost par or marginally better — management cited "some anomaly in the EQR numbers" being sorted out. Gynecology and nephro are doing well but the base remains very small.
India branded mix: cardiology 37%, ophthalmology 28%, dermatology 22%, pain 10%, newer therapies 3%; gynecology was entered in FY 2025-2026 and is gaining strong internal momentum.
Emerging markets field force expanded by ~100 to ~2,500 MRs as of Q2 FY 2026-2027 (from 2,400), with productivity at ~Rs.8 lakhs and above; field size guided to expand ~7-8% over full FY 2026-2027.
Therapy diversification is a 3-to-5-year progression — management will enter new specialties only with a strong go-to-market strategy; no committed timeline or specific therapy targets given.
US Filings Cadence Intact; In-Licensing Ramps from FY28
US pipeline in H1 FY 2026-2027: 3 products launched, 4 final approvals received, 1 ANDA filed; 17 ANDAs pending approval, with a cadence of 5-6 ANDA filings annually and 5-7 filings planned (period unspecified), none Para IV.
R&D spend was Rs.72 Cr in Q2 (~4% of revenue in H1), guided at ~5% of revenue for FY 2026-2027 with a step-up in H2; roughly 50% is for the US and 50% for India and emerging markets.
More than 50% of the portfolio is delayed-release/extended-release, with 15-20 products in development at a time and an outlook to file 8-10 ANDAs every year (period unspecified).
Semaglutide in-licensing revenue is expected to start trickling in from FY 2027-2028 — average product registration approval lead time across countries is ~2 years and dossier filing has just begun; the arrangement covers a large number of countries including Africa and MENA, building gradually rather than via one sizable single-country launch.
Management will fold the in-licensing contribution into annual growth guidance shared at the beginning of each year, rather than assess it as a separate incremental number.
H2 FY 2026-2027 EBITDA margin implied at ~26% vs ~29% H1 actual — CFO Arvind Agrawal confirmed the analyst's math, citing the US business being "a little lower" and institutional business "a little down" as competition enters a key limited-competition US product.
US FY 2026-2027 growth guidance raised from mid-single-digit to high-single-digit; no FY 2027-2028 US guidance yet — management indicated it would share next-year guidance around Q4 FY 2026-2027 or Q1 FY 2027-2028 depending on approvals and launches.
India guided to mid-teens growth for FY 2026-2027, consistent with the framework of growing 20-25% faster than IPM; FY 2027-2028 guidance will possibly be addressed in Q4 FY 2026-2027. On sustainability into FY 2027-2028, management only "hopes" the trend continues — aspirational, no formal guidance.
Asia mid-teens growth guidance for FY 2026-2027 reaffirmed despite soft Q1, with catch-up expected in Q3-Q4; Africa high double-digit guidance reaffirmed, though H2 growth could be slightly below H1 against a high H2 FY 2025-2026 base.
NLEM pricing impact is zero — products brought under NLEM are only in oncology, where Ajanta does not operate; on a hypothetical extension to cardiology, Rajesh Agrawal said until the government issues a specific product list with specific pricing, no impact working is possible and there is "no immediate threat."
Working capital days expected to broadly return to March 2026 levels by end of FY 2026-2027 — receivables may improve further, but inventory days will revert after the temporary H1 reduction.
Quality of Beat vs Durability of Drivers
Q2's 49% US growth and 259% Africa institutional growth are flagged as partly non-recurring — the US was aided by a limited-competition product now facing new entrants, and management explicitly does not expect institutional H1 sales to sustain in H2 FY 2026-2027.
Emerging markets weakness was framed as external — management attributed the recent weak year to a geopolitical issue impacting the entire industry, citing a 13-15% CAGR across Asia and Africa over the last three years, and said the "Ajanta story" has to be seen in a "three years horizon and plus."
Management declined geography-wise margin disclosure, reiterating its policy when asked about US run-rate margins for H2 FY 2026-2027.
No constant currency figures were available for Asia and Africa when asked; investor relations offered as follow-up on several undisclosed splits (Asia-vs-Africa MRs, acute-chronic mix, specialty-wise MR counts).
Disclaimer: This earnings call summary is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.
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