Alivus Life Sciences’ non-GPL API growth and CDMO pipeline support earnings outlook

Investment View and Valuation

ICICI Securities’ July 31, 2026 result update on Alivus Life Sciences retains a BUY rating and revises the target price to Rs 1,330, based on 15 times FY28E EBITDA of Rs 1,029 crore. The constructive view is underpinned by upgraded FY27 growth guidance, sustained profitability, healthy momentum in the non-GPL API business and an expanding CDMO opportunity pipeline.

At the report CMP of Rs 1,140, the target implied 17 per cent upside over a 12-month period.

Business Overview

Alivus Life Sciences, formerly Glenmark Life Sciences, is an API developer and manufacturer. APIs accounted for about 93 per cent of FY26 revenue, while CDMO services contributed about 7 per cent.

The company serves over 700 customers in more than 75 countries with over 150 products, focused on chronic therapies including cardiovascular disease, central nervous system disease, pain management and diabetes. Its reactor capacity is about 1,424 KL, including 1,198 KL of API capacity and 226 KL of backward-integrated capacity, across Ankleshwar and Dahej in Gujarat, and Mohol, Kurkumbh and the upcoming Solapur site in Maharashtra.

Q1FY27 Performance

Q1FY27 performance was broadly in line with ICICI Securities’ expectations and featured healthy margins. Revenue rose 9 per cent year on year to Rs 640 crore, led by 30 per cent growth in non-GPL API sales to Rs 520 crore. Non-GPL growth was volume-led, with API volume up about 21 per cent despite 1-2 per cent price erosion, supported by recently launched products scaling up across geographies.

GPL API revenue declined 53 per cent year on year to Rs 72.3 crore because of inventory rationalisation. CDMO revenue grew 5 per cent year on year to about Rs 38 crore. EBITDA increased 11.6 per cent year on year to Rs 221.4 crore, with a 31.8 per cent margin, up 126 basis points year on year, while PAT rose about 15 per cent to Rs 162.7 crore.

Growth Outlook and Business Pipeline

Management expects the GPL business to remain broadly flat in FY27, with recovery weighted towards the second half because the business is structurally more H2-skewed. CDMO growth was muted in Q1FY27, but management expects two additional contracts to be commercialised in H2FY27.

Alivus Life Sciences is also in active discussions for seven CDMO projects, which ICICI Securities views as a healthy medium-term pipeline. The company has 29 high-potency API products in active development, addressing an estimated market opportunity of about US$82 billion. Of these, 13 have been validated, seven are at advanced development stages and nine are in laboratory development. Management expects new launches and high-potency molecules to become meaningful revenue contributors from FY28.

Management Guidance and Capacity Expansion

Management upgraded FY27 revenue-growth guidance from high single digits to 10-12 per cent and reiterated confidence in sustaining EBITDA margins in the 30-32 per cent range. FY27 capital expenditure guidance is Rs 540 crore, fully funded through internal accruals.

Project timelines for capacity expansion have been pushed out, which ICICI Securities views positively because capital expenditure is being aligned with demand visibility. Construction has begun on an R&D facility at Taloja, Navi Mumbai, focused on flow chemistry, complex products, particle engineering, oncology research and green chemistry. Solapur Phase 3 expansion will follow regulatory inspection. Management expects inventory days to rise in the coming year.

ICICI Securities’ Financial Estimates

Key Risks

• Uncertainty in the CDMO business.
• Volatility in the GPL business.