Ajanta Pharmaceuticals Limited (AJP) reported a robust first quarter for FY27, with consolidated revenue rising 25% year-on-year to Rs. 16.26 billion, as strong performances in its Domestic and Africa branded businesses more than offset a sharp slowdown in Asia caused by Middle East-related supply disruptions. 

However, brokerage Equirus Securities has retained a REDUCE rating on the stock, flagging margin headwinds and a valuation that already prices in near-term catalysts.

EBITDA for the quarter came in at Rs 4.24 billion, up 13% year-on-year, though this was about 2% below Equirus' estimates due to higher operating expenses and forex losses. EBITDA margin stood at 26.1%, down 133 basis points year-on-year and slightly below expectations, even as gross margin improved by 100 basis points to 79.8% on a favorable product mix. 

Profit after tax, however, beat estimates handily, rising 31% year-on-year to Rs 3.34 billion — around 13% ahead of Equirus' forecast — aided by a sharp jump in other income.

Earnings per share for the quarter came in at Rs 26.7, up 30% year-on-year.

India revenue grew a robust 24% year-on-year to Rs 5.1 billion, now contributing 32% of total revenue, supported by eight new product launches and improving field-force productivity following two years of sales-team expansion. 

Growth was broad-based across therapies, with cardiology, ophthalmology, dermatology and pain management together making up the bulk of domestic branded sales. Management reiterated guidance for mid-teens growth in the India business for the full year.

Africa branded sales grew 29-30% year-on-year to around Rs 3 billion, powered by new launches and stronger field-force execution, with the region continuing to outpace the broader African pharmaceutical market's typical 7–12% growth rate. 

Africa institutional sales nearly doubled year-on-year to Rs 490 million.

Asia branded revenue declined 16% year-on-year to roughly Rs 2.6 billion, as deferred supplies linked to Middle East disruptions weighed on the region — a trend management characterized as logistical rather than demand-driven, with sales delayed from Q1 expected to be recognized in Q2. 

The company reiterated its guidance of mid-to-high-teens growth in Asia for the full fiscal year.

US revenue rose a strong 30% year-on-year in dollar terms to $51 million, though it declined sequentially by $4 million. 

Management struck a cautious note on the outlook, guiding for only mid-single to upper-mid-single-digit growth for the rest of FY27, citing price erosion, new competition, and a thin pipeline of launches — with no new US launches expected in the second quarter and most potential approvals now pushed to Q4.