Emcure Q4 FY26: International momentum powers a strong FY26, while India works through Zuventus disruption

Emcure Pharmaceuticals closed FY26 with a clear step-up in scale and profitability. Consolidated revenue from operations rose to INR 9,204 crore, up 16.6% year on year, helping the company cross the stated USD 1 billion revenue milestone. EBITDA increased to INR 1,789 crore, up 21.8%, with margin expanding 83 basis points to 19.4% despite higher R&D investment. Adjusted PAT grew 40.9% to INR 1,008 crore and adjusted PAT margin improved to 10.9%.

Q4 FY26 stayed consistent with this trajectory. Revenue grew 16.7% to INR 2,470 crore, EBITDA rose 24.5% to INR 485 crore, and EBITDA margin improved 123 basis points to 19.7%. Adjusted PAT came in at INR 279 crore, up 36.0%, with adjusted PAT margin improving 160 basis points to 11.3%. Management framed FY26 as the first year of its five-year strategic roadmap, emphasizing measurable outcomes in growth, margin expansion, and pipeline progress.

What drove FY26: International markets scaled up

The mix shift toward international markets was a key driver of FY26 performance. International revenue grew 22.2% to INR 5,177 crore, versus domestic revenue of INR 4,027 crore that rose 10.0%. In FY26, the segment revenue mix was disclosed as Domestic 44%, Emerging Markets 20%, Europe 20%, and Canada 16%.

Europe delivered the sharpest growth. FY26 Europe revenue increased 25.5% to INR 1,850 crore, supported by base business ramp-up, the Manx integration, and Amphotericin B launches in select markets during H2 FY26. Management expects Amphotericin B to contribute meaningfully in FY27, and also indicated an expectation of mid-teens growth CAGR in Europe over the next two years.

Canada continued to expand, with FY26 revenue up 18.7% to INR 1,487 crore. The company attributed performance to market share gains, new launches, improved product availability, and portfolio expansion. The presentation noted 7 plus new product approvals in FY26.

Emerging Markets revenue grew 21.8% to INR 1,840 crore, with management highlighting balanced growth across ARV and non-ARV segments. The company stated it filed 80 plus molecules and received 30 plus registrations in FY26 across non-ARV markets, while maintaining a healthy ARV order book through selective contract prioritization.

India: Strong full-year growth, but Q4 impacted by Zuventus restructuring

Domestic revenue grew 10% in FY26 to INR 4,027 crore, and management cited leadership hires, productivity enhancement, and portfolio expansion through partnerships as key contributors. Field productivity was highlighted with PCPM increasing to INR 7.0 lakh in FY26.

However, Q4 FY26 domestic growth slowed to 5.2% (INR 977 crore). Both the presentation and management commentary attributed this to disruption in the Zuventus business following the minority stake buyout and subsequent portfolio and team reorganization. Management acknowledged higher attrition and division restructuring in Q4, but stated the business was tracking as per plan from April.

The company also disclosed that in-licensing contributes about 15% of domestic sales. Portfolio expansion in India during FY26 included a partnership with Novo Nordisk for Poviztra, an expansion of the Sanofi partnership to include Amaryl and Cetapin, and a distribution agreement with Roche for select nephrology and transplant products starting from Q1 FY27.

Margins, investment, and balance sheet: Improving returns with higher R&D

Gross margins for FY26 were 60.3%, broadly stable versus FY25. EBITDA margin improved to 19.4%, which management attributed to productivity enhancement and scaling of in-house products, even as R&D spending rose.

R&D investment increased to INR 384 crore in FY26, representing 4.2% of revenue (up from 3.6% in FY25). Capex for FY26 was disclosed at INR 434 crore.

Return metrics improved, with ROCE rising to 23.7% as of March 31, 2026, up from 22.0% a year earlier. Net debt increased to INR 1,054 crore, with net debt to EBITDA at 0.6x, up from 0.3x. Management attributed the higher debt to payouts for Manx and the Zuventus minority stake acquisition.

Financial summary

Pipeline and strategic execution: Near-term launches and longer-term bets

Management emphasized four scientific focus areas shaping the long-term pipeline: complex injectables, biosimilars, new delivery routes for existing drugs, and antibody drug conjugates.

Near-term pipeline updates were specific in two areas. First, Amphotericin B was launched in select European markets in H2 FY26, with broader expansion planned in FY27. Second, the ophthalmic biosimilar Bevacizumab for wet AMD received endorsement from CDSCO’s Subject Expert Committee, with a launch planned in H1 FY27 pending approval.

In HIV, management stated it filed the DMF for Lenacapavir and expects product registration in FY27. On ADCs, management described an approach that includes both a biosimilar ADC and a more innovative program with in-house work on linker and payload, while partnering for the monoclonal antibody component. Timelines were not quantified due to evolving regulatory pathways.

The company also highlighted early-stage AI adoption across R&D, manufacturing, and support functions to improve speed, efficiency, and workforce productivity, while noting benefits are expected to accrue over the next two to three years.

FY27 outlook: Growth to continue, with margin expansion targeted

For FY27, management guided low to mid-teen revenue growth and reiterated its intent to expand EBITDA margin by 75 to 100 basis points, subject to stable regulations and macro conditions. The company guided FY27 capex of around INR 400 to 425 crore.

On operational risks, management discussed higher solvent prices and higher freight and insurance costs due to longer shipping routes, describing this as an industry-wide issue. It also noted that most markets carry one to two quarters of inventory, limiting immediate impact, while longer-term impact would depend on duration of cost inflation and ability to pass on costs.

Emcure’s FY26 performance shows strong international execution and meaningful margin improvement while increasing R&D spend. The near-term investor focus is likely to remain on two variables: whether the domestic business normalizes after Zuventus restructuring, and whether Amphotericin B meaningfully scales in FY27 as management expects.