This article first appeared on GuruFocus .
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Consolidated Revenue:INR8,640 crores, up 8.4% year-on-year.
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EBITDA:INR1,773 crores with a margin of 20.5%, a 9% year-on-year growth.
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Formulation Business Revenue:INR7,683 crores, 10% year-on-year growth.
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API Business Revenue:INR9,633 crores, contributing 11% of total revenue.
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US Revenue:$420 million, with US injectable sales growing 17% year-on-year.
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European Revenue:INR2,703 crores, 27% year-on-year growth.
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Growth Markets Revenue:INR865 crores, stable performance.
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ARV Formulation Revenue:INR376 crores, 22% year-on-year growth.
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Gross Margin:9.7%, supported by softer raw material prices.
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R&D Expenditure:INR409 crores, 5% of total revenue.
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Net CapEx:$79 million.
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Net Cash Inflow:$18 million for the quarter.
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Net Profit:INR910 crores, after a one-time cost of INR65 crores.
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Warning! GuruFocus has detected 3 Warning Signs with BOM:524804.
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Release Date: February 10, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Aurobindo Pharma Ltd ( BOM:524804 ) reported an 8.4% year-on-year increase in consolidated revenue for Q3 FY26, reaching INR8,640 crores, driven by strong performance in European operations and stable US business.
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The company's EBITDA grew by 9% year-on-year to INR1,773 crores, with a margin of 20.5%, showcasing strong operating leverage and fiscal prudence.
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The European business delivered a 27% year-on-year revenue growth, amounting to INR2,703 crores, indicating consistent execution across key markets.
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US injectable sales grew by 17% year-on-year, supported by volume expansion and recent product launches, reflecting a strong pipeline performance.
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Aurobindo Pharma Ltd ( BOM:524804 ) is confident in sustaining growth momentum with a diversified operating model and strategic acquisitions, aiming for an EBITDA margin target of 20% to 21% for FY26.
Negative Points
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The company faced procedural observations during the Eugia III inspection, although these are expected to be resolved without production stoppage.
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The growth market revenue remained flat at INR865 crores, indicating challenges in expanding market presence.
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The company is yet to receive full clearance from the FDA for the Eugia facility, which could impact the trajectory of US injectable sales.
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The Pen G facility, while ramping up, has not yet fully contributed to profitability due to predatory pricing in the 6-APA market.
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The company is experiencing elevated tax rates due to losses in subsidiaries like CuraTeQ and Lyfius, which are not yet offset by tax credits.
Q & A Highlights
Q: Can you provide details on the Eugia III inspection and any potential impact on production? A: Puvvala Yugandhar, CEO of Eugia Pharma Specialties Ltd, stated that the observations were procedural and technical, with no production stoppage required. The company is confident in responding to the US FDA within 15 working days.
Q: What is the outlook for US injectable sales given the current FDA status? A: Puvvala Yugandhar mentioned that while the company is cautiously optimistic about the future of the facility, the FDA's decision on the warning letter is pending. The company expects double-digit growth in the next year, supported by ramp-up from various facilities.
Q: How is the European business expected to perform with improved China supply? A: Venugopalan Muralidharan, CEO of Europe Formulation Business, noted that the European business is growing in low double digits in constant currency, ahead of market growth rates. With more launches and improved China supply, further growth is expected.
Q: What is the status of the Lannett acquisition and any potential overlap concerns? A: Swami Iyer, CEO of Aurobindo Pharma USA Inc, stated that the FTC process is progressing well, with no negative surprises expected. The acquisition is anticipated to close in Q1 of 2027.
Q: What is the expected impact of the Pen G facility on EBITDA and margins? A: Santhanam Subramanian, CFO, explained that the full impact of the Pen G facility will be seen from the first quarter of the next fiscal year. The company has already broken even on the facility, with improvements expected as market conditions stabilize.
Q: Can you provide an update on the Vizag injectable facility? A: Puvvala Yugandhar mentioned that the company has filed three products from the Vizag facility, with more filings expected. Commercialization is anticipated to begin in FY27, with significant contributions expected by FY28.
Q: What are the key milestones for the biosimilars business in the next 12 months? A: Makkapati Satakarni, CEO of Biologics, Vaccines, and Peptides businesses, highlighted recent approvals in Canada and Europe, with launches planned in these regions. The company aims for comprehensive coverage across Europe, LATAM, and Canada, with significant commercial momentum expected by 2029.
Q: How is the company managing capital allocation and potential M&A activities? A: Santhanam Subramanian stated that the company is not pursuing major greenfield projects and will consider M&A opportunities that align with strategic goals. The focus remains on prudent capital allocation and strategic investments.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
