Ipca Labs Q4 FY26 EBITDA Margin Expands to 25.3%

Domestic formulation business grew 12% to ₹853 crores (vs ₹764 crores in Q4 FY25)
Stand-alone EBITDA margin improved to 25.27% (vs 21.19% in Q4 FY25) - 408 basis point improvement
Consolidated EBITDA margin improved to 20.52% (vs 18.24% in Q4 FY25) - 228 basis point improvement
U.S. business (Ipca + Unichem) grew 10% to ₹428 crores (vs ₹388 crores in Q4 FY25)
Institutional business declined to ₹74 crores (vs ₹111 crores in Q4 FY25)
Promotional branded export business grew 14%
Generic business (excluding tenders) grew 17%

Consolidated revenue grew 8% to ₹9,646 crores (vs ₹8,940 crores in FY25)
Domestic formulation business grew 10% to ₹3,817 crores (vs ₹3,455 crores in FY25)
Export formulation business grew 9% to ₹2,083 crores (vs ₹1,919 crores in FY25)
Stand-alone EBITDA margin improved to 25.18% (vs 22.66% in FY25) - 252 basis point improvement
Consolidated EBITDA margin improved to 20.72% (vs 19.94% in FY25) - 178 basis point improvement
U.S. business grew 14% to ₹1,567 crores (vs ₹1,379 crores in FY25)
API business grew 10% to ₹1,396 crores (vs ₹1,266 crores in FY25)
Promotional business grew 14% to ₹664 crores (vs ₹582 crores in FY25)
Institutional business declined to ₹270 crores (vs ₹355 crores in FY25)

Consolidated revenue growth guidance: 12-13%
Consolidated EBITDA margin guidance: ~22-22.3% (improvement of 130-160 basis points)
Domestic market growth expected: 12-13%
CIS market growth expected: 10-11%
Promotional market growth expected: 12-13%
Generic market growth expected: 12-13%

Significant input cost inflation of 10-12% observed
Specific price increases: Solvents (40-50% higher), packaging materials (aluminum, PVC, PVDC), APIs (paracetamol, metformin)
Supply chain disturbances affecting ammonia, acid/alkali materials
Company plans 6-7% price increase in domestic market (vs normal 5-6%) to offset cost pressures

FY26 EBITDA margins declined to 8% (from 12% previously)
U.S. business did not grow due to market share loss in high-volume products
FY27 Outlook: 10% growth expected with margins improving to 12-13%
Cost savings expected from closure of Ireland facility (€4-5 million overhead reduction)
Production shifted from Ireland to India

Trophic Wellness (domestic neutraceuticals): ₹125 crores revenue, ~₹40 crores profit
Lyka Labs (associate company): Facing P&L pressures due to field force expansion for injectables and animal healthcare
Krebs Bio: Nellore plant EBITDA positive; other plant facing operational issues
Onyx Scientific (US research services): Facing reduced inquiry levels
UK subsidiary: Loss of £2-3 million due to poor pricing scenario
Pisgah Labs (US): Formulation facility under construction, expected commissioning in Q4 FY27

Domestic product launch strategy: 18-20 products annually across 20 divisions
U.S. market: Currently marketing 8 products
Inventory management: Working capital under control with no significant cash deployment in last 2 years
Unichem reduced air shipments from 40% to 4-5%, increasing ocean freight usage
R&D expenditure: 3.71% of sales for FY26

Domestic: 12% growth (driven by pain, cardiac, derma, neuro, CNS portfolio)
Branded formulations: 14% growth (driven by CIS and French-speaking African markets)
Institutional: 33% decline in Q4 (due to funding constraints)
Generics: 39% growth in Q4 (Europe, Australia, New Zealand, and US launches)

Freight costs increased 25% in Q4 due to geopolitical tensions (Iran-US conflict, Strait of Hormuz)
Air cargo availability becoming constrained with 10-15 day delays
Elevated oil prices impacting logistics costs