Alivus Life Sciences Q4 FY26: Better mix, higher margins, and a capex-led runway

Alivus Life Sciences, formerly Glenmark Life Sciences, closed FY26 with a clear improvement in operating performance. In Q4 FY26, revenue from operations was 689.1 crore, up 6.1% year-on-year. EBITDA stood at 237.3 crore, up 13.8% year-on-year, while PAT was 162.7 crore, up 14.7% year-on-year. Gross margin for the quarter improved to 60.7%, and EBITDA margin was 34.4%.

For the full year FY26, revenue from operations was 2,551.8 crore, up 6.9% year-on-year. EBITDA grew faster at 19.6% to 857.7 crore, taking EBITDA margin to 33.6% from 30.0% in FY25. PAT rose 16.2% to 564.5 crore and PAT margin improved to 22.1%.

The company positioned FY26 as a year where the quality of business improved, driven by a rising share of non-GPL revenues and a recovery in the CDMO business in the second half. Management also reiterated confidence for FY27, indicating high single-digit revenue growth and margins sustained above 30%.

FY26 performance: steady growth with margin expansion

The financial profile shows a widening gap between revenue growth and earnings growth, reflecting operating leverage and a better mix. The company highlighted that margins expanded even without PLI benefits since Q1 FY25, attributing the improvement to product mix, new launches, operational efficiency, and a higher CDMO contribution.

A notable quarterly detail is that Q4 FY26 other expenses increased, which management linked partly to a one-off event. The CFO stated that a loss of about 20 crore was booked under other expenses due to a fire incident at the Dahej facility, impacting the intermediate side.

Mix shift: non-GPL becomes the growth anchor

A central theme in both the presentation and the earnings call was the increasing contribution of non-GPL revenues. In FY26, non-GPL contributed 71% of total revenues, while GPL was 29%. Management stated that non-GPL revenues grew 13% in FY26, while GPL de-grew by 4.9%.

This change in mix matters because the company framed it as structurally accretive to realizations and margins. The narrative is that the business is becoming less captive and more diversified across global customers.

In Q4 FY26, the mix was more volatile quarter-to-quarter, with GPL contributing 35.4% and non-GPL 64.6%. But the full-year numbers show a steadier transition.

On the broader business split, Alivus remains predominantly a generic API company. In Q4 FY26, Generic API accounted for 93% of revenues, while CDMO was 7%. CDMO contribution increased modestly on a full-year basis from 6% in FY25 to 7% in FY26.

Strategy and capital allocation: from cash build-up to growth capex

Alivus described the post-transition phase under Nirma as a reset in capital allocation. The company is now retaining cash for a standalone growth agenda, rather than upstreaming operating cash. This is visible in both cash levels and the step-up in capex.

The company reported FY26 free cash flow of 259 crore. Cash and cash equivalents including short term investments stood at 782.4 crore as of March 31, 2026. The credit rating was noted as IND AA, upgraded in September 2025.

Capex has moved from maintenance levels to growth-led investments. FY26 capex was reported at 306.2 crore, and the CFO guided FY27 capex at about 540 crore, including carryover commitments and fresh investments. Management stated this capex will be funded through internal accruals.

The core capacity plan is to increase total reactor capacity from 1,198 KL in FY24 to 2,690 KL by FY28. The planned milestones include brownfield additions of about 100 KL at Ankleshwar and about 160 KL at Dahej, targeted for operational timelines in Q2 FY27. The Solapur greenfield expansion includes Phase 1 and Phase 1.1 capacity and further Phase 2 additions into FY28.

Management also discussed utilization expectations. Brownfield additions are expected to ramp faster due to existing regulatory approvals. For Solapur, management indicated it may start with around 40% to 50% utilization and ramp further in the following year. Importantly, management cautioned that a portion of Solapur capacity is aimed at backward integration, which should not be treated as direct front-end revenue in forecasting.

R&D and future levers: complex chemistries, CDMO, and API plus

R&D spending has risen over time, and management signaled a continued focus on advanced capabilities. In FY26, R&D spend was stated at 91 crore, with management indicating that R&D as a percentage of sales is expected to approach around 4% over the next one to two years before settling.

The company’s R&D and pipeline commentary emphasized complex chemistry, oncology research, flow chemistry, and additional platform work in API plus. The presentation also disclosed land acquisition at Taloja (10,000 square meter) for a new R&D centre intended to strengthen work on flow chemistry, particle engineering and green chemistry.

The filing footprint remains extensive. The company reported 611 cumulative DMFs and CEPs across major markets as of March 2026.

What to track after FY26

Management’s stated direction for FY27 is high single-digit revenue growth with margins sustained above 30%. It also suggested confidence in maintaining EBITDA margins between 30% and 32% while noting supply chain constraints due to the ongoing war environment.

There are also operational watch items. Working capital days are elevated at 199 in FY26, and fixed asset turnover has trended down to 2.2x. Management noted asset turnover could temporarily go below 2 as new capacity comes online before utilization normalizes.

Overall, FY26 shows a company improving profitability through mix and execution while building a capex-led runway for future growth. The next phase depends on how quickly new capacity ramps, how backward integration benefits show up in margins, and whether CDMO momentum translates into signed contracts and sustained scale.