Innova Captab ends FY26 with strong growth and a big Jammu ramp-up story

Innova Captab closed FY26 with its highest-ever annual revenue, backed by a sharp finish in Q4. Revenue from operations rose to INR 1,630.0 crore in FY26, up 31% year on year. Q4 FY26 revenue came in at INR 447.8 crore, up 42% over Q4 FY25. Profitability also expanded in absolute terms, even as margins eased. FY26 EBITDA was INR 250.3 crore with a 15.4% margin, and PAT was INR 140.9 crore with an 8.6% margin.

Management attributed the year’s performance to momentum across both business areas: CDMO services and products, and branded generics. The other defining theme was capacity. The company’s Kathua, Jammu greenfield facility completed its first full year of operations and is now moving through its ramp-up phase. Management indicated that incremental scale from Jammu should improve operating leverage over time.

FY26 performance: growth came from both engines

The revenue bridge in the investor presentation shows that the CDMO business remained the larger contributor, while branded generics delivered faster growth. CDMO services and products reported FY26 revenue of INR 1,133.4 crore, up 24% year on year. Branded generics reported FY26 revenue of INR 496.7 crore, up 51%.

In Q4 FY26, the company reported CDMO revenue of INR 314.8 crore and branded generics revenue of INR 133.0 crore. Exports were highlighted as 28% of revenue in Q4 FY26 and 31% for FY26, reflecting a meaningful international contribution.

The company also emphasized scale indicators such as 4,200 plus products, 350 plus CDMO customers, and 2,50,000 plus touchpoints in India.

Margins: mix-driven softness, but operating leverage is the thesis

Despite strong growth, margins moderated. Q4 FY26 EBITDA margin was 14.9% compared with 16.2% in Q4 FY25. FY26 EBITDA margin was 15.4% compared with 15.9% in FY25. In the concall, management attributed the gross margin and EBITDA margin changes mainly to product mix, and stated that raw material price inflation was not the driver of the year-on-year gross margin decline.

Below EBITDA, the cost base also reflects the company’s expansion phase. Depreciation increased to INR 45.2 crore in FY26 from INR 24.8 crore in FY25, and finance costs increased to INR 16.9 crore from INR 2.4 crore. Management linked the profitability trajectory to the ramp-up of Jammu, stating that depreciation and interest related to the facility are largely fixed and already reflected in the base.

This was discussed explicitly in the Q&A. When an analyst estimated an ex-Jammu EBITDA margin of about 18% based on Jammu nearing breakeven, management agreed with the estimate. This detail matters because it frames the margin opportunity as the new plant scales and blended utilization improves.

Jammu plant: the key operating lever, with incentives and a multi-year ramp

The investor presentation positions the Kathua, Jammu site as a multipurpose greenfield facility with four independent blocks: Cephalosporin, Penem, Penicillin and General. The facility is designed to handle a wide range of dosage forms including oral solids, dry syrups, dry powder injectables, and BFS formats such as large and small volume parenterals and respules.

The presentation states total capital investment of over INR 480 crore and eligibility for benefits under the central government’s New Central Sector Scheme, including a GST-linked incentive of up to 300% of eligible plant and machinery investment and a 6% per annum capital subvention on eligible capex-linked loans.

Utilization guidance in the deck is conservative and long-dated: 5 to 10% utilization in FY26, a ramp-up to 40 to 50% over 2 to 3 years, and an optimum utilization range of 70 to 75% in 5 to 6 years.

The concall added a key operating datapoint. Management stated Jammu delivered around INR 300 crore revenue in FY26. They also said the plant was nearing EBITDA breakeven in Q4 FY26 and that they expect it to turn EBITDA positive in coming quarters, as it begins to cover fixed costs.

Regulated markets and Sharon integration: building credibility and optionality

The company highlighted regulatory milestones that support its ambitions in regulated markets. The investor presentation states that the Baddi cephalosporin facility received a UK-MHRA Certificate of GMP Compliance and that the Jammu facility received PIC/S certification via SMDC Ukraine. The presentation also lists accreditations such as MHRA and EU GMP.

Management also discussed Sharon Bio Medicine, which the presentation notes was acquired on 30 June 2023 and includes facilities at Dehradun and Taloja. In the concall, management said Sharon generated around INR 240 crore revenue in FY26 and has a better-than-average margin profile, driven by its presence in export regulated markets. Management specifically referenced markets such as Canada, the UK, Europe and Australia.

This matters because it indicates the company is not positioning regulated markets as a distant aspiration only. It is also trying to build operating muscle through existing platforms and certifications.

Outlook: 20% plus growth guidance and a Baddi expansion under evaluation

For FY27, management provided explicit growth guidance. They stated confidence in delivering 20% plus revenue growth from FY26 to FY27 at a group level. They also expressed confidence that EBITDA growth should outpace revenue growth as Jammu utilization ramps, and that PAT growth should outpace EBITDA growth due to fixed depreciation and interest already captured in the base.

On capex, management discussed a land acquisition at Baddi and said a new general block expansion is under deliberation. They indicated that once finalized, capex could be spread across FY27 and FY28. In Q&A, management provided a broad estimate of INR 150 to 170 crore for the potential capital outlay, with an indicative optimum revenue capability of about INR 450 to 500 crore for that block.

Takeaways

FY26 delivered strong headline growth for Innova Captab, with both CDMO and branded generics contributing. The near-term margin picture is shaped by product mix and the costs of new capacity, but management’s central claim is that operating leverage will improve as Jammu scales. With regulated certifications secured and Sharon contributing in export regulated markets, the next phase will be defined by how quickly the new capacity moves from early utilization to steady-state throughput, while maintaining the company’s quality and compliance positioning.