RPG Life Sciences nears API deal as FY26 sales rise

RPG Life Sciences is close to acquiring a “major API asset”, Managing Director Ashok Nair said, as the company works to restore full operations at its Navi Mumbai API plant following a January 2025 fire. The acquisition effort comes alongside steady growth in its formulations franchise, which management said continues to outperform the broader Indian Pharmaceutical Market (IPM).

The update adds a strategic layer to an operational recovery story that has influenced recent segment performance and margins. Management has indicated that API operations should be fully restored by March 2026, with Q4 expected to be stronger for the API business.

Management signals inorganic push in APIs

Nair said the company is nearing an acquisition of a major API asset, while also flagging that valuations in the sector remain elevated. He described API asset valuations as ranging roughly from 8.5 times to 13-14 times EBITDA, suggesting prices have “not cooled off.”

RPG Life Sciences has also communicated that it is actively pursuing inorganic opportunities across formulations and APIs with a “disciplined approach” to valuations that it believes can be value accretive.

Navi Mumbai API plant: recovery after the 2025 fire

The company’s API business has been operating under disruption after a fire at its Navi Mumbai plant in January 2025. Nair said restoration has progressed with about 60% of product validation completed. He expects the plant to be fully operational by March 2026, and said API performance should improve as the business returns to previous levels.

Management indicated that Q4 should be better for APIs once full operations resume. Nair also said clients remained supportive through the disruption and that none moved away during the outage.

API growth outlook and near-term normalisation

Nair said the API business is expected to return to its normal 10-12% growth once operations stabilise. The disruption was described as operational rather than demand-led, with recent pressure linked to plant availability and related execution constraints.

Analyst commentary referenced in the provided material also noted that API volumes should normalise by year-end, positioning the recovery as a key driver for revenue and margin improvement.

Domestic branded formulations remain the core engine

Management said domestic branded formulations continue to be the company’s primary growth driver and account for about 70% of revenue. Nair said the business maintained momentum with 12.6% growth compared with IPM growth of 8.8%.

The company highlighted therapy-area performance including nephrology growth of 17%, oncology growth of 22%, and monoclonal antibodies growth of 17.4%. Nair also pointed to volume growth of 5.3% versus 2.1% for the IPM.

Brands, pricing environment, and gross margin commentary

Nair said around 30-32% of the portfolio is under price control, yet the company continues to report a gross margin of about 70%. On flagship brands, management said Naprosyn is on track to become an INR 100 crore brand by FY27, and later commentary in the provided material noted the brand reached INR 76 crore.

In the same set of remarks, other portfolios were cited, including immunosuppressants with turnover of INR 79 crore and a monoclonal antibodies (mAbs) portfolio that contributed 8.2% and grew 15%.

New subsidiary for APIs and planned business transfer

RPG Life Sciences has announced a new wholly owned subsidiary, RPG Active Pharma Limited, to focus on API manufacturing and marketing, subject to approvals. The API business transfer from RPG Life Sciences to the subsidiary is expected by March 31, 2026.

The provided material also referenced an INR 105 crore investment linked to this API-focused expansion plan.

FY26 revenue and margin snapshot

RPG Life Sciences reported Q4 FY26 revenue of INR 176.9 crore, up 23.6% year-on-year from INR 143.1 crore, while Q4 EBITDA margin was stated at 25.6%. For the full year FY26, revenue increased 8.3% to INR 707.5 crore from INR 653.4 crore.

Quarterly revenue figures disclosed in the material include Q3 FY26 revenue of INR 180.0 crore (up 4.2% year-on-year from INR 172.7 crore) and Q2 FY26 revenue of INR 181.7 crore (up 7.6% quarter-on-quarter from INR 168.9 crore and 5.5% year-on-year from INR 172.2 crore).

What the fire meant for margins and supply chain

Management described FY26 normalised EBITDA margin at about 24%, noting that the prior year’s 30% included a one-time reversal and that the comparable margin was 26.5%. Nair said 24-25% is a reasonable EBITDA margin range going forward.

The disruption at the API plant also affected captive sourcing, with the company needing higher-cost external manufacturing for certain requirements during the outage. The provided material also referenced an estimated INR 16 crore sales loss linked to the fire incident.

Stock reaction and near-term focus

A CNBCTV18 segment referenced in the provided information said the stock slipped about 7% following what it described as a weak set of Q3 earnings, while management reiterated that the domestic portfolio looked robust and that the API business was expected to return to normalcy by Q4 FY26.

Operationally, the company’s key near-term deliverable remains completing validation and restarting the Navi Mumbai plant to full utilisation by March 2026.

Key numbers at a glance

Why this matters for investors

The company’s near-term narrative is defined by two parallel tracks: recovery of an API facility that faced a major operational disruption, and sustained growth in domestic formulations that management says is running ahead of the market. The API business recovery is closely tied to utilisation normalisation, while inorganic ambitions suggest RPG Life Sciences is looking to add capacity or capabilities beyond internal rebuilding.

Management has also laid out longer-term revenue goals, stating it is targeting INR 1,000 crore revenue by 2028 and discussing a longer horizon of INR 1,500-2,000 crore by 2030, with both organic and inorganic levers.

Conclusion

RPG Life Sciences is positioning its API business for a restart by March 2026 after the Navi Mumbai fire, while keeping domestic formulations as the main growth anchor. The next set of operational updates, including completion of validation and progress on any API acquisition, will shape how quickly the API segment returns to normal performance levels.