Alembic Pharmaceuticals has signalled a sharper focus on its branded portfolio in FY27, even as its latest quarterly results show continued margin pressure from stepped‑up R&D and new‑plant investments. A research note from Equirus Securities describes the stock as “under the weather” on earnings quality but retains a LONG stance with a March 2027 target price of ₹995, reflecting optimism that coming high‑value product launches will restore operating leverage.
Weak margins but resilient profit growth
For 4QFY26, Alembic’s consolidated EBITDA margin slipped to 12.3%, a multi‑quarter low, as the company ramps capacity and pipeline ahead of revenue ramp‑up. Consolidated revenue grew a modest 4% year‑on‑year to ₹18,477 crore, while net profit jumped 29% YoY to ₹2,027 crore, supported by a one‑time improvement in tax credit and a cleaner income statement.
Domestic: Reforming branded portfolio
Domestic formulations revenue stood at roughly ₹5.7 billion in the quarter, up 4% YoY, with the human‑branded business at ₹4.4 billion, down 1% due to softness in acute and chronic therapy areas, including gastro, diabetes, and dermatology. Management is counting on new launches, better field‑force productivity, and animal‑health and specialty segments (gynaecology, gastro, ophthalmology) to gradually match growth with India‑market trends.
US and global: Launch‑led revival
In the US, Alembic generated about US$62 million in the quarter, flat over the previous quarter, as the pipeline remains thin despite six new launches in 4Q and improved utilisation of its F2 and F3 facilities. The company expects mid‑teens sales growth in constant‑currency terms over FY27–FY28, anchored by 25–30 planned launches, including high‑value products such as generic Adempas, Bosulif, Selexipag and Sprycel‑like molecules.
Ex‑US international markets delivered around 20% full‑year growth in FY26, led by Canada, Australia, the EU, and other regions, with management targeting mid‑teens CAGR in these geographies through new product fill‑ins and expanded collaborations.
Specialty foray via Pivya and pipeline build‑up
Alembic has launched Pivya, its US‑specialty‑care platform, for urinary‑tract‑infection indications, with the field force currently focused on high‑prescription territories. The brand is expected to add 100–150 bps of EBITDA drag through FY27, even as the company works on in‑licensing further products to expand the platform.
At the same time, Equirus notes that many of Alembic’s new plants remain loss‑making, which tempers the impact of upcoming launches. The broker expects the company to keep R&D around 8–9% of sales (₹750–800 crore in FY27) and restrict CapEx to ₹300–350 crore for debottlenecking and replacements, signalling a preference for pipeline‑driven growth over fresh heavy‑CapEx bets.
Margins and earnings trajectory
The research house expects EBITDA margins to expand by about 300 bps over the next two years, as better facility utilisation, a richer launch mix, cost optimisation, and contract‑manufacturing revenue help offset the drag from Pivya and capacity build‑out. On earnings, Equirus forecasts FY27 consolidated sales of ₹82,766 crore and FY28 sales of ₹93,207 crore, with PAT rising from ₹6,918 crore in FY27E to ₹9,776 crore in FY28E, underpinning the 20x FY27 earnings multiple for the ₹995 target.
With Alembic now sharpening its branded and specialty‑care focus in both India and the US, investors are watching FY27 closely to see if its “launch‑led” playbook can translate into a sustainable recovery in margins as well as revenues.
