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Misses estimates; branded exports & Unichem drag profitability

• IPCA’s sales grew 10.3% YoY to INR23b (our est: INR23.7b) in 1QFY26.
• Formulations sales grew 11% YoY to INR14b (62% of sales).
• Exports of formulation sales grew 13.7% YoY to INR4.4b (20% of total sales).
• Domestic formulation sales grew 10% YoY to INR9.6b (42% of total sales).
• Exports (generic formulation) grew 19% YoY to INR2.7b (60% of export sales).
• Exports (branded formulation) rose 9.6% YoY to INR1.2b (28% of export sales).
• Exports (institutional sales) were flat YoY at INR580m (12% of export sales).
• API sales grew 13% YoY to INR3.3b (14% of sales).
• Export API sales grew 28% YoY to INR2.5b (77% of API sales).
• Domestic API sales declined 18% YoY to INR760m (23% of API sales).
• Revenue from subsidiaries grew 7% YoY to INR5.6b (24% of sales).
• Gross margin (GM) expanded 80bp YoY to 70%, due to superior product mix/lower RM costs.
• However, EBITDA margin contracted 70bp YoY to 18% (our est: 20.7%), as higher GM was offset by higher opex (other expenses up 130bp YoY as % of sales).
• EBITDA grew 6% YoY to INR4.2b (our est: INR4.9b).
• PAT grew 21% YoY to INR2.3b (our estimate: INR2.8b).
• Unichem financials: Sales came in at INR5.3b, up 18% YoY. EBITDA margin at 4.3%, down 550bp YoY. Loss of INR105m in 1QFY26 vs PAT of INR93m YoY.
• Revenue/EBITDA/ PAT missed BBG estimates by 1%/10%/5% for 1QFY26.

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