Shares of Ajanta Pharma Ltd skyrocketed 14% and hit a 52-week high of Rs 2,540 on 3 May after the company announced its quarterly earnings for January-March. 

Ajanta Pharma’s board of directors has approved the company’s fourth buyback request in as many years, a strategic move that underscores the company’s commitment to enhancing shareholder value. As part of this buyback, the pharmaceutical company intends to repurchase up to 10.28 lakh equity shares, or 0.82% of its total outstanding shares, a clear signal of the company’s confidence in its future prospects.

The buyback price, at Rs 2,770, represents a 24.5% increase over the stock’s previous close. The corporation intends to spend Rs 285 crore on its buyback plans.

Ajanta Pharma’s Q4 earnings marked a significant milestone, with the drugmaker’s consolidated net profit soaring by 66% year on year to Rs 202.72 crore in January-March, a substantial increase from Rs 122.25 crore in the previous fiscal year. This robust performance is a testament to the company’s resilience and potential for future growth.

Revenue increased 20% from Rs 881.84 crore to Rs 1,054.08 crore, or 20% year over year. The expansion of all the primary businesses contributed to the topline increase.

Among the company’s several business segments, US generics, which make up 25% of sales, saw a year-over-year gain of 32%, while Asia branded generics, which make up 18% of revenue, saw an increase of 18%.

Africa branded generics and institutional sales, which make up 17% of the company’s total revenue, increased by 17%, while the domestic formulation segment, which makes up 31% of sales, increased by 14%.

Ajanta Pharma’s operating margins witnessed a significant boost in Q4, primarily driven by a decrease in the cost of raw materials, a decrease in labour costs, and other expenses. This operational efficiency led to a substantial improvement in the company’s overall performance. The EBITDA margin expanded by 1,000 basis points, from 16.9% in the same quarter last year to 26.4% this quarter, a clear indication of the company’s strong financial health.

At 1:45 pm, the shares of Ajanta Pharma were trading % higher at Rs 2,376.15 on NSE.