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Stellar performance continues

Ami’s earnings print was significantly better than our and consensus expectations. Its 4QFY25 EBITDA was 19% above our estimate on account of a sharp jump in CDMO sales and resultant positive operating leverage. We had, in our Mar’25 report (click here), highlighted the robust demand for Nubeqa intermediates supplied by Ami. Considering the continued strong off-take of Nubeqa intermediates along with other CDMO projects (one of which is expected to contribute to top line from FY26), the company has reiterated its target of INR 10bn of CDMO sales by FY28E. We, however, have conservatively built in INR 9.2bn of CDMO sales by FY28E. We believe, Ami has multiple growth levers in place in the form of - i) continued robust Fermion contract sales, ii) commercialisation of another CDMO contract, iii) healthy growth in generic intermediate portfolio and iv) contribution from electrolyte additives from FY26E. Further, on a full year basis, company’s EBITDA margin is likely to inch up to ~26% by FY27E. Factoring in 4QFY25 results and management commentary, we have raised our FY26/27 EBITDA and EPS estimates by ~1-2%. We estimate Ami to register 31%/32% EBITDA/EPS CAGR over FY25-28E. We maintain BUY with a revised Mar’26 TP of INR 1,330/share (based on 35x Mar’27E EPS). Higher than 5% QoQ sales growth in Nubeqa (reported by Bayer) in the next 3-4 quarters may act as a positive surprise.

* Jump in CDMO sales to Fermion drives EBITDA beat: Ami Organics' 4QFY25 consolidated gross profit came in at INR ~1.5bn (up 15%/62% QoQ/YoY) as revenue came in 8%/15% above JMFe/consensus at INR 3.1bn (up 12%/37% QoQ/YoY) and gross margin increased sequentially to 47.3% (vs. 47% of JMFe and 46.2% in 3QFY25). During the quarter, other expenses came in at INR 377mn (vs. JMFe of INR 385mn). EBITDA was 19%/25% above JMFe/consensus and stood at INR 850mn (up 24%/97% QoQ/YoY). Further, PAT was 28% above JMFe and stood at INR 627mn (up 38%/144% QoQ/YoY).

* Sales beat driven by jump in pharma intermediate sales: In 4QFY25, Ami’s pharma intermediate sales jumped to ~INR 2.7bn (vs. JMFe of ~INR 2.5bn and ~INR 2.4bn in 3QFY25, up 14%/44% QoQ/YoY). This jump could be due to a jump in CDMO sales to Fermion. Specialty chemicals revenue fell slightly to INR 357mn (vs. JMFe of INR 375mn and INR 361mn in 3QFY25, down 1% QoQ while up 1% YoY). In 4QFY25, pharma intermediate EBITDA margin was 24.5% and speciality chemicals margin was 14.7%.

* Estimate 32% EPS CAGR over FY25-28E: On account of i) healthy growth in generic intermediate portfolio due to patent expiration in CY25-26, ii) continued strong ramp-up of Fermion contract sales, iii) commercialisation of another CDMO contract in FY26E and iv) contribution from electrolyte additives from FY26E, Ami has strong revenue visibility. Factoring in jump in EBITDA margin, our FY26E/27E EBITDA and EPS estimates are revised upwards by ~1%/2% and ~2%/2% respectively. We estimate Ami to register a robust 25%/31%/32% sales/EBITDA/EPS CAGR over FY25-28E. We maintain BUY with a revised Mar’26 TP of INR 1,330/share (based on 35x Mar’27E EPS) (from INR 1,303 earlier).

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