Ajanta Pharma (AJP IN) – Q1FY27 Result Update – Strong operating performance – BUY
Published on 31 Jul 2026
AJP’s Q1FY27 EBITDA grew strongly by 20% YoY (INR 4.54bn; 27.9% OPM) which was 3% above our estimates. The beat was aided by higher Domestic and Africa business revenues and margins. The recent in-licensing agreement with Biocon for marketing semaglutide in 26 countries across RoW markets is good fit given its strong existing franchise across these markets. Further AJP’s play on high growth branded generics (BGx) market spread across India, Asia and Africa which contributed 70% to total revenue in FY26. Strong annual free cash flow of INR8–10bn further supports sustained investments and potential inorganic opportunities, reinforcing medium-term growth visibility. Our FY27E and FY28E EPS stands increased by 2-5%. Overall, we expect EBITDA/PAT CAGR of 18% over FY26-28E with healthy RoE/RoCE of 25%/31% in FY27E. At CMP, AJP is trading at 30x P/E and 20x EV/EBITDA as of FY28E. Maintain BUY rating with revised TP of INR3,725/share (32x FY28E EPS).
