Ajanta's Q4 profit rose 18.40% as faster cost growth squeezed margins
Revenue grew 21.47% YoY, but expenses rose faster at 24.62%; other income contributed 17.70% of pre-tax profit.
Filed 05 May 2026, 15:24 IST · Ajanta Pharma Ltd (AJANTPHARM)
Key takeaways
- Ajanta Pharma's consolidated Q4FY26 net profit rose +18.40% YoY, but operating margin fell 1.94 percentage points.
- Quarterly momentum weakened as expenses grew +9.63% QoQ against revenue growth of +3.40%, cutting margin by 4.35 percentage points.
- The stock gained +6.74% by t+1 after the results, above its 3.23% median absolute post-result move.
Price around the results
Q4 revenue growth held up, but sequential momentum slowed
Consolidated revenue grew +21.47% YoY, while operating profit increased only +12.20%, as expenses expanded faster than sales. Sequentially, revenue growth slowed to +3.40% and operating profit declined -12.77%, pointing to weaker operating momentum in the quarter.
Faster cost growth cut operating margin
Expenses rose +24.62% YoY against revenue growth of +21.47%, reducing operating margin by 1.94 percentage points. The sequential gap was wider: costs grew +9.63% while revenue grew +3.40%, lowering margin by 4.35 percentage points. Other income accounted for 17.70% of pre-tax profit, making reported profit less dependent on operations alone.
Higher tax rate diluted the profit conversion
The tax rate rose 6.78 percentage points YoY to 23.17%, so net profit growth of +18.40% lagged pre-tax profit growth of +28.84%. Interest expense fell -61.12% YoY, but that benefit did not offset the higher tax burden and weaker operating margin.
Margin reversed Q3's improvement but stayed near the healthcare median
Operating margin had risen from 24.22% in Q2FY26 to 27.80% in Q3FY26 before falling to 23.45% in Q4FY26. The Q4 margin was just 0.07 percentage points above the 23.38% median among 48 healthcare peers that had reported the quarter.
The initial market reaction was modest, then turned positive
The stock was down -0.11% on the results day but gained +6.74% by t+1 and +6.58% by t+5. That was larger than the stock's 3.23% median absolute move after its previous eight results, during which it rose six times and fell twice.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,422 cr | ₹1,375 cr | +3.40% | +21.47% |
| Other income | ₹61 cr | ₹25 cr | +146.02% | +239.20% |
| Expenses | ₹1,088 cr | ₹993 cr | +9.63% | +24.62% |
| Operating profit | ₹333 cr | ₹382 cr | -12.77% | +12.20% |
| Operating margin (%) | 23.45% | 27.80% | — | — |
| Interest | ₹2 cr | ₹5 cr | -53.73% | -61.12% |
| Depreciation | ₹45 cr | ₹44 cr | +4.27% | +14.05% |
| Profit before tax | ₹347 cr | ₹359 cr | -3.20% | +28.84% |
| Tax | ₹80 cr | ₹85 cr | -5.21% | +82.13% |
| Net profit | ₹267 cr | ₹274 cr | -2.58% | +18.40% |
| EPS (₹) | ₹21.35 | ₹21.91 | -2.56% | +18.61% |
Operating margin of 23.45% compares with a Healthcare sector median of 23.38% across 48 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.11% | +0.25% |
| Next session | +6.74% | — |
| 5 sessions | +6.58% | +9.65% |
| 15 sessions | +6.77% | — |
| 30 sessions | +6.16% | — |
Volume on the results session was 1.03× its 20-day average.
What to watch
- Whether operating margin recovers from 23.45% after the 4.35-percentage-point QoQ decline.
- Whether expense growth falls below the +9.63% QoQ pace.
- Whether other income remains close to 17.70% of pre-tax profit.