Ajanta Pharma Q4 Review: Revenue Inline But Margins Contract- Systematix Maintains 'Buy', Cuts Target Price

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Systematix Research Report

Ajanta Pharma Ltd.’s Q4 FY25 revenue (Rs 11,704 million) was in-line with expectations (up 11% YoY and 2% QoQ), but Ebitda came in lower owing to higher than expected employee costs during the quarter. Employee costs were up 5.5% QoQ led by recent sales force additions.

The branded business growth remained strong (12% YoY), US generics outperformed expectations with 25% YoY growth offset by sharp decline in institutional business (53% YoY).

The growth momentum in US should sustain in FY26 (mid-teens growth) led by recent launches (H2 FY25) and new launches in FY26. Africa Institutional business almost halved YoY and impacted overall performance. Institutional business is now only 3% of sales and hence the overall future growth is de-risked from the uncertainties in this space (owing to funding challenges).

We tweak our forecasts to account for weakness in the institutional business. We retain Buy with a revised target price of Rs 3,293 based on 35x FY27E earnings per share.

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