Ajanta Pharma (AJP IN) – Q4FY26 Result Update – Strong FY27 revenue guidance – BUY
Published on 06 May 2026
AJP’s Q4FY26 EBITDA grew strongly by 26% YoY (INR3.75bn; 26.4% OPM) which was 15% above our estimates. The beat was aided by higher US 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 1-3%. Overall, we expect EBITDA/PAT CAGR of 17% over FY26-28E with healthy RoE/RoCE of 25%/31% in FY27E. At CMP, AJP is trading at 25x P/E and 17x EV/EBITDA as of FY28E. Maintain BUY rating with revised TP of INR3,400/share (30x FY28E EPS).
