Aurobindo Pharma reported robust Q3 FY26 results, with consolidated revenue growing 8.4% YoY to ₹8,646 crores and EBITDA reaching ₹1,773 crores, marking a 9% YoY growth with a 20.5% margin. Growth was fueled by strong performance in European operations and stable US business. The company highlighted positive momentum from pipeline launches, regulatory progress, and strategic initiatives like the Pen-G plant ramp-up, reinforcing confidence in achieving FY26 EBITDA margin targets of 20% to 21%.
Aurobindo Pharma Q3 FY26 Performance Summary
Aurobindo Pharma announced its financial and operational performance for the third quarter of FY26 (ending December 31, 2025). The company demonstrated sustained business momentum across key segments.
- Consolidated revenue grew by 8.4% year-on-year to ₹8,646 crores.
- EBITDA for the quarter stood at ₹1,773 crores, representing a 9% year-on-year growth and achieving a margin of 20.5%. This reflected strong operating leverage and minimal transient product impact compared to the previous year.
Business Segment Highlights
Formulations and API
The overall formulation business showed a strong 10% year-on-year growth, contributing 89% of total revenue, reaching ₹7,683 crores. The API business accounted for 11% of revenue, amounting to ₹963 crores.
U.S. Business
U.S. revenue stood at USD 420 million (excluding gRevlimid). The core Oral Solid business remained stable, supported by volume expansion and new launches. U.S. injectable sales grew by an impressive 17% year-on-year. During the quarter, the company launched 9 new products and secured 7 approvals.
European Business
The European business maintained strong momentum, delivering 27% year-on-year revenue growth, amounting to ₹2,703 crores (€261 million in Euro terms). Management reiterated the trajectory to exceed €1 billion in annual European revenue by the close of FY26.
Growth Markets and ARV
Revenue from growth markets remained flat at ₹865 crores (USD 97 million). The ARV formulation segment grew by 22% year-on-year to ₹376 crores (USD 42 million), driven by volume and new tender wins.
Operational and Financial Highlights
Margins and Investment
The gross margin for the quarter was strong at 59.7%. Excluding gRevlimid, sales increased by approximately 9%, gross profit by 13%, and EBITDA by 15% year-on-year. R&D expenditure was ₹409 crores (5% of total revenues).
Net capex for the quarter was USD 79 million. The company generated a net cash inflow of USD 118 million, improving the net cash position.
Net profit for the period stood at ₹910 crores, after accounting for a ₹65 crore one-time cost related to a labor code amendment.
Pen-G Plant and MIP
The ramp-up of the Pen-G plant is progressing as expected, with annualized production projected to exceed 10,000 metric tonnes over the next 12 months. The government’s notification introducing a one-year CIF (Minimum Import Price) for Pen-G, 6 APA, and Amoxicillin was cited as a very important and positive catalyst for the company.
Outlook and Strategy
Management expressed confidence in sustaining growth momentum and creating long-term value, supported by a diversified operating model and expanding manufacturing footprint.
- The US business is entering a growth phase, with the Dayton facility transitioning to commercial manufacturing, expecting significant contributions from FY27 onwards.
- The strategy focusing on PEN-G, 6APA, and Amoxicillin is expected to structurally enhance cost competitiveness and strengthen margins.
- The company is building a differentiated portfolio focused on complex generics across dermal, transdermal, nasal, respiratory, and oncology areas.
- The outlook reinforces confidence in achieving an internal EBITDA margin target mostly on the higher side of 20% to 21% for FY26.
Q&A Session Key Takeaways
Eugia III Inspection
Management confirmed that observations from the Eugia III inspection were procedural and technical in nature, with no data integrity issues. They are confident of responding to the USFDA within 15 working days, with production continuing without stoppage.
European Growth Drivers
European growth remains strong, with leading geographies like France, Portugal, Germany, and Netherlands showing double-digit growth. Increased supply from China operations is expected to further boost momentum.
Lannett Acquisition Update
Regarding the Lannett acquisition, engagement with the FTC is ongoing, with management hoping for completion early in Q1 of FY27. The settlement amount for Lannett’s past liabilities remains solely Lannett’s responsibility.
Biosimilars and Future Capacity
The AuroVaccines merger is focused on consolidating capabilities and supporting the future biosimilars roadmap. Key near-term milestones include launching multiple products in Europe and moving beyond development into commercialization, targeting 2029 as the inflection year for biotech.
Capital Allocation and CapEx
For FY27, overall CapEx (excluding the ongoing biologics strategy) is projected to be around USD 150 to 200 million, as the company is not planning major greenfield projects. Biologics CapEx (CDMO/TheraNym) totals approximately USD 120 to 130 million spread over several quarters.
Source: BSE
