Reduce Ajanta Pharma Ltd for Target Rs. 2,760 by Choice Institutional Equities
Key Conference Call Highlights
India Business
* Launched 26 products in India in FY26, including five first-time-incountry launches.
* New product launches contributed 4.7% to India business growth versus the industry average of 2.8%.
* Gynaecology therapy is progressing better than internal expectation and is anticipated to contribute meaningfully in the next two to three years, while Nephrology is showing early positive signs but will take longer to scale up.
* Around 250 to 300 medical representatives will be added in India.
* The management has guided for mid-teens growth for the India business.
US Generics
* products launched in the last 15 months.
* 4–5 launches planned in H2FY27, supporting pipeline visibility.
* The management has guided for mid-single digit growth in FY27.
Branded Generics Asia
* Decline was attributed mainly to Middle East-driven supply chain disruption.
* Asia is guided for high double-digit growth, on the back of a low FY26 base and logistics normalisation.
Branded Generics Africa
* 8 product launches in FY26, supporting portfolio expansion and growth sustainability.
* Management has guided for high double-digit growth in Africa.
Africa Institutional
* Africa Institutional business grew 9% for the full year, recovering better than anticipated in the second half, owing to improved order flow.
Middle East Crisis and Semaglutide
* Both, freight cost and raw material/packaging cost, have risen meaningfully and the company is fully absorbing these in its P&L rather than passing them on to customers.
* Existing inventories have cushioned near-term impact, but, if the conflict persists, cost pressures could begin reflecting more materially from Q2FY27.
* Generic Semaglutide filings outside India are commencing in the current quarter, with approvals expected in 1.5 to 2 years across various markets and meaningful revenue contribution anticipated only in three to four years.
Outlook
* Revenue growth is guided at high teens and EBITDA margin guided at 27% for FY27.
* Gross margin is expected to stabilise at approximately 77%. CapEx is guided at INR 4000 Mn for FY27 — INR 1500 Mn for maintenance and INR 2500 Mn for capacity expansion at existing sites where additional land is available.
* R&D spend is expected to continue at around 5% of total revenue
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