Pharma API, CRAMS firms see sharp profit acceleration in Q1 FY27

Pharma active pharmaceutical ingredients (API) and contract development and manufacturing services (CRAMS) companies saw a sharp acceleration in profit growth in the June 2026 quarter, according to a report by SOIC and StockScans.

The report’s analysis of 24 companies in the Pharma-API & CRAMS segment shows that median year-on-year growth in profit after tax rose to 47.1% in June 2026 from 8% in March 2026. Median operating profit growth also increased to 35.6%, while revenue growth stood at 18.8%.

The improvement in profitability was significantly greater than revenue growth. The report’s company-level analysis points to the commercialisation of CDMO projects, capacity coming on stream, new product launches and higher utilisation as some of the factors supporting the growth.

CDMO is emerging as an important growth driver across the companies covered in the report. Morepen Laboratories, for instance, started commercial dispatches under an approximately ₹825-crore multi-year CDMO mandate in Q1 FY27. Another around ₹225 crore of supplies is expected in Q2, subject to customer schedules. The company is also expanding its API capacity towards 1,000 KL from around 500 KL.

Aarti Pharmalabs is also seeing a growing contribution from CDMO. Its CDMO revenue rose from ₹32 crore in FY22 to ₹276 crore in FY26, and the company is guiding 40-50% growth in FY27. The report says the business has 37 commercial projects across 22 customers.

Capacity utilisation is another theme highlighted in the report. At Innova Captab, the Jammu facility generated around ₹300 crore of revenue in FY26 despite utilisation of only 5-10%. The report says the facility could generate around ₹1,400 crore or more at targeted utilisation levels, with fixed-cost absorption expected to support profitability as the facility ramps up.

For Concord Biotech, the report highlights a pipeline of new products, including oncology, anti-infective and antifungal products, alongside two USFDA approvals received in June 2026. The company is also targeting a larger contribution from CDMO, which currently accounts for around 1-2% of sales.

The report also flags peptides and GLP-1 therapies as emerging opportunities for the sector. Companies are adding peptide manufacturing capacity and developing projects around newer therapies, while semaglutide is already contributing to growth at some businesses.

Alongside API and CRAMS, the report finds continued growth across other healthcare businesses. Median revenue growth in June 2026 was around 20% for hospitals and 21% for diagnostics, while median operating-profit growth was about 17% and 27%, respectively.

Within pharma, however, the report’s data shows the most pronounced acceleration in the API and CRAMS segment. Median PAT growth rose from 8% in March to 47.1% in June, while operating-profit growth reached 35.6%. The report’s company-level analysis points to CDMO projects, capacity additions, new products, and increasing utilisation among the factors behind the improvement.