/** Metadata is provided separately in blogpostMetadata. */

Jubilant Pharmova in FY26: growth held up, but Montreal pulled margins down

Jubilant Pharmova closed FY26 with consolidated revenue of Rs 8,280 crore, up 14% year-on-year, backed by broad-based growth across radiopharma, allergy immunotherapy, CDMO sterile injectables, CRDMO, and generics. EBITDA rose 8% to Rs 1,326 crore, but the EBITDA margin softened to 15.9% (down 99 basis points) as production disruptions at the Montreal facility reduced output and led to cost under-absorption.

Management positioned FY27 as a transition year, with margins expected to be “a story of two halves”. The company expects continued growth in FY27, but H1 FY27 margins are expected to remain under pressure because of a shortage of high-margin SPECT products in radiopharmaceuticals. Management quantified the H1 revenue impact from SPECT supply at around USD 14 million, with normalization expected from H2 FY27 once supply stabilizes.

FY26 performance: growth led by CDMO SI, radiopharma steady, generics profitability improved

At a segment level, radiopharma remained the largest contributor, with FY26 revenue of Rs 3,690 crore (radiopharmaceuticals Rs 1,178 crore; radiopharmacies Rs 2,512 crore). Radiopharmaceuticals revenue grew 10% year-on-year, but EBITDA fell 5% and margins compressed to 41% due to the temporary production impact at CMO Montreal. Radiopharmacies grew 9% year-on-year; however, profitability remained low with FY26 EBITDA margin at about 1%.

CDMO Sterile Injectables was the standout on growth. FY26 segment revenue rose 38% to Rs 1,755 crore, supported by incremental revenue from Line 3 at Spokane. Consolidated segment margin declined to 18% due to Montreal under-absorption, but Spokane itself delivered strong operating leverage. Spokane revenue grew 48% to Rs 1,714 crore and EBITDA increased 59% to Rs 463 crore, lifting the Spokane margin to 27%.

Allergy immunotherapy remained a high-margin specialty business. FY26 revenue grew 12% to Rs 785 crore and EBITDA rose 13% to Rs 278 crore, with margin steady at 35%. In the concall, management disclosed that around 90% of the allergy business is in the US and 8% to 10% is outside the US. They also said FY26 growth was driven largely by stronger non-US volumes along with some market share gains in the US.

CRDMO delivered stable growth. Drug discovery services grew 15% to Rs 654 crore with FY26 EBITDA margin at 23%. The API business faced continued industry-wide pricing pressure. FY26 API revenue declined 3% to Rs 564 crore and EBITDA declined 5% to Rs 83 crore, with margin at 15%. Management said the business is focusing on profitable products and expects custom manufacturing mix to increase in FY27.

Generics showed a clear improvement in profitability. FY26 revenue increased 13% to Rs 774 crore. EBITDA rose to Rs 83 crore from Rs 24 crore in FY25, lifting EBITDA margin to 11%. The company cited better mix and new product launches in the US, including four new products launched in FY26.

Financial summary (consolidated)

Note: Revenue, EBITDA, PAT are in Rs crore. Net debt table is shown on constant currency basis, net of DIC.

Strategy and capex: building capacity for PET and biologics programs

The investor presentation frames the company’s strategy around specialty products and services, with FY26 segment mix shown as radiopharma 45%, CDMO SI 21%, allergy immunotherapy 9%, CRDMO 15%, and generics 9%. Currency exposure is materially USD-linked, with the presentation stating 94% of FY26 revenue is USD denominated.

A key operational theme is capacity expansion in the US and Canada, both in PET infrastructure for radiopharma distribution and in sterile injectables capacity for CDMO customers.

In radiopharma, Jubilant highlights its integrated model spanning development, GMP manufacturing (Montreal), and a US distribution network (45 radiopharmacies and 3 PET manufacturing facilities). The company plans to expand PET manufacturing from 3 to 9 locations in the US by FY28. The presentation states the PET capex is USD 50 million, expects asset turnover of 1.0x and RoCE above 20%, and expects the network to be fully operational by FY28.

In CDMO sterile injectables, the company is doubling capacity at Spokane through Line 4, with the presentation stating technology transfer revenues should start in Q4 FY27 and full utilization in around 3.5 years. Separately, the Montreal site is investing in a new isolator fill-finish Line 5 with USD 114 million capex, supported by a USD 35 million concessional loan, with tech transfer revenues expected from FY29.

In the concall, management outlined FY26 capex at Rs 1,668 crore and said FY27 capex is expected to be similar, reflecting ongoing spend on Line 4, Line 5 and PET projects.

Near-term outlook: FY27 is a two-half year, with H2 expected to normalize

Management repeatedly emphasized that FY27 will see temporary margin headwinds in the first half. The key driver is SPECT supply constraints in radiopharmaceuticals caused by Montreal-related production issues. Management said products are now being manufactured at the site and expected to release mid to end Q2, which should lift volumes in Q3 and Q4.

For consolidated margins, management stopped short of providing a full-year number but did indicate that H2 FY27 consolidated EBITDA margin could be in the 17% to 18% range, which they described as a more normal margin profile going into FY28.

On the growth side, management used “low double digits” language for radiopharma growth outlook on the concall and reiterated confidence in Ruby-Fill continuing to expand, supported by both market growth and market share gains.

What to watch

First, the pace of normalization in Montreal matters disproportionately because it affects high-margin radiopharmaceuticals and also drives under-absorption in the sterile injectables segment.

Second, CDMO execution will be tracked through the transition of Line 3 programs from tech transfer revenue to commercial production. The CDMO CEO said there are 10-plus products undergoing tech transfer on Line 3, with the majority described as complex biologics, and commercial production expected to commence in late FY27 subject to FDA approvals.

Third, radiopharma pipeline execution could reshape the margin profile from FY28 onward. The presentation indicates seven launches across FY28 and FY29 with a combined incremental TAM of USD 535 million and potential peak annual sales of USD 140 million. MIBG is highlighted separately with potential peak sales of USD 70 to 100 million, with a pre-NDA meeting planned in Q3 FY27 and NDA filing expected in H2 FY27.

Closing view: Vision 2030 remains the anchor, but execution in FY27 is the bridge

Jubilant Pharmova’s Vision 2030 targets are explicit: revenue of Rs 13,500 crore, EBITDA margin of 23% to 25%, net debt at zero, and RoCE in the high teens by FY30. FY26 moved revenue in the right direction, but margins were held back by Montreal-related issues.

The company’s near-term narrative is therefore straightforward. FY27 is expected to carry temporary margin pressure in H1, with a return to a more normalized operating profile in H2 as supply stabilizes. If Montreal remediation holds and capacity ramps proceed as planned in Spokane and PET manufacturing, the building blocks for the FY30 targets become more measurable from FY28 onward.