Ajanta Pharma's margin recovers sequentially despite year-on-year squeeze
Revenue growth accelerated sequentially, but higher costs and a larger tax rate limited the conversion into net profit.
Filed 30 Jul 2026, 14:35 IST · Ajanta Pharma Ltd (AJANTPHARM)
Key takeaways
- Consolidated revenue grew 24.82% year on year, but expenses rose faster at 26.39%, narrowing operating margin by 0.92 percentage points.
- Operating margin recovered 2.60 percentage points sequentially as revenue growth of 14.37% outpaced expense growth of 10.49%.
- Net profit rose 30.89% year on year, with other income contributing 15.87% of pre-tax profit and the tax rate increasing 2.31 percentage points.
Price around the results
Revenue momentum returns in Q1FY27
Ajanta Pharma reported consolidated revenue growth of 24.82% year on year and 14.37% sequentially, taking revenue to Rs 1,625.96 cr. The sequential improvement was accompanied by better operating conversion because expenses grew 10.49%, below the 14.37% rise in revenue. Year on year, however, expenses grew faster than revenue, keeping the quarter's operating margin 0.92 percentage points below Q1FY26.
Margin rebounds from Q4FY26, but remains below Q3
Operating margin expanded 2.60 percentage points sequentially as revenue growth outpaced cost growth, reversing part of the Q4FY26 decline. The margin was 27.80% in Q3FY26, fell to 23.45% in Q4FY26 and recovered to 26.05% in Q1FY27, so the latest quarter shows a rebound rather than a sustained multi-quarter decline. Ajanta's margin was 0.15 percentage points below the 26.20% median for 19 Healthcare peers that had reported the quarter.
Other income and tax rate shaped profit quality
Other income rose 169.27% year on year to Rs 70.90 cr and accounted for 15.87% of pre-tax profit, making it a material contributor to reported earnings. The tax rate increased 2.31 percentage points year on year to 25.20%, which restrained the conversion of 34.93% pre-tax profit growth into 30.89% net profit growth. Interest expense fell 39.54% year on year, although it increased 34.75% sequentially.
The stock's usual results-day move is mixed
After its previous eight results, the stock rose five times and fell three times, with a median absolute move of 3.01%. That history points to a mixed but generally moderate reaction pattern, rather than a consistently one-way response to quarterly results.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,626 cr | ₹1,422 cr | +14.37% | +24.82% |
| Other income | ₹71 cr | ₹61 cr | +15.42% | +169.27% |
| Expenses | ₹1,202 cr | ₹1,088 cr | +10.49% | +26.39% |
| Operating profit | ₹424 cr | ₹333 cr | +27.04% | +20.56% |
| Operating margin (%) | 26.05% | 23.45% | — | — |
| Interest | ₹3 cr | ₹2 cr | +34.75% | -39.54% |
| Depreciation | ₹45 cr | ₹45 cr | -1.92% | +7.77% |
| Profit before tax | ₹447 cr | ₹347 cr | +28.72% | +34.93% |
| Tax | ₹113 cr | ₹80 cr | +40.01% | +48.54% |
| Net profit | ₹334 cr | ₹267 cr | +25.32% | +30.89% |
| EPS (₹) | ₹26.75 | ₹21.35 | +25.29% | +30.87% |
Operating margin of 26.05% compares with a Healthcare sector median of 26.20% across 19 peers that have reported Q1FY27.
What to watch
- Whether operating margin holds above 26.05% after the 2.60-percentage-point sequential recovery.
- Whether expenses remain below revenue growth after rising 26.39% year on year against 24.82% revenue growth.
- Whether other income remains near its 15.87% share of pre-tax profit.