Alivus Life Sciences Limited (ALS), formerly known as Glenmark Life Sciences Limited, received a major credit upgrade from India Ratings and Research (Ind-Ra) on 16 September 2025, with the rating agency upgrading its bank loan facilities’ long-term rating to ‘IND AA’ from ‘IND AA-’ and maintaining a Stable Outlook. The short-term rating was affirmed at ‘IND A1+’, reflecting the company’s healthy financial profile and operational strength.

This marks an important milestone in the company’s journey as it continues to expand capacity, diversify its product portfolio, and strengthen its financial flexibility under the ownership of Nirma Limited, which holds a majority stake of 75%.

Why the Upgrade Matters

The upgrade highlights several strengths of Alivus Life Sciences:

1. Sustainable business profile with portfolio diversification into niche and complex APIs, ensuring less competition and higher value realisation.

2. Strong operational performance in FY25 and 1QFY26, despite industry-wide pricing pressures.

3. Net cash position and strong return on capital employed (ROCE), which ensures resilience even amid high capital expenditure.

4. Association with established groups like Nirma and Glenmark Pharmaceuticals Limited (GPL), offering credibility and financial flexibility.

Ind-Ra’s analysis shows that ALS managed to grow revenues to INR 23,869 million in FY25, compared to INR 22,832 million in FY24, supported by 10% year-on-year volume growth. Despite reduced gross profit margins due to the absence of PLI scheme benefits, the company sustained a healthy EBITDA margin of 28.6%.

Capacity utilisation remained above 95%, reflecting efficient operations even as ALS increased capacity by 86% between FY22 and FY25.

Diversified Portfolio and Research Investments

ALS currently has a portfolio of 165 molecules with a pipeline of 49 new product developments, including high potent APIs (HPAPIs) and complex iron complexes. This positions the company in a USD 29.34 billion global HPAPI market, expected to grow at a CAGR of 9.27% to USD 45.70 billion by 2030.

The company invested INR 805 million in R&D in FY25, accounting for 3.4% of total revenue, underscoring its focus on innovation, validation batches, and cost improvements. ALS has also filed over 569 DMFs and dossiers across major regulated markets like the US, Europe, Japan, and Brazil.

This robust pipeline and regulatory presence across multiple geographies enhance its competitive positioning in the global pharmaceutical landscape.

Financial Strength and Expansion Plans

ALS remains net cash positive since FY19, with cash reserves of INR 5,487 million at FY25, almost double the INR 3,014 million held in FY24. These reserves provide significant comfort to fund ongoing capex plans worth INR 6,000 million during FY26-FY27.

The company’s ROCE stood at 23% in FY25, supported by efficient utilisation of existing capacities. With new greenfield and brownfield projects set to increase reactor capacity from 1,424 kilo litres in FY25 to 2,690 kilo litres by 2028, ALS is well-placed to drive growth. Importantly, Ind-Ra expects minimal reliance on external debt for these expansions.

The association with Nirma adds another layer of stability. While strategic decisions are consulted with Nirma’s leadership, ALS operates independently, ensuring operational autonomy. Analysts expect most of ALS’s cash to be reinvested in growth, with only calibrated dividends paid upstream to Nirma.

Risks and Challenges

Despite its strengths, ALS faces some risks:

1. Regulatory risks – Since over 85% of sales come from regulated markets, any adverse compliance issues could affect operations. However, ALS’s facilities in Ankleshwar, Dahej, Mohol, and Kurkumbh are all USFDA-approved, reducing immediate concerns.

2. Geopolitical risks – Given its export-driven model, global uncertainties could impact demand and supply chains.

3. Foreign exchange risks – With 53% revenue in foreign currency and most costs in INR, currency volatility could affect profitability. ALS mitigates this with a board-approved hedging policy.

Liquidity Position

The liquidity profile of ALS remains strong. The company holds adequate unencumbered cash, has low non-fund-based utilisation (19%), and continues to generate healthy free cash flow (INR 2,253 million in FY25).

Despite a rise in the working capital cycle to 192 days due to extended credit terms with GPL, liquidity remains robust enough to fund future projects without external strain.

Market Outlook and Growth Potential

The outlook for ALS is Stable, with opportunities for further upgrades if the company:

• Improves scale of operations while maintaining healthy ROCE.

• Reduces product concentration risk.

• Generates sustainable free cash flows alongside a strong credit profile.

On the flip side, ratings could come under pressure if profitability weakens, liquidity declines, or net leverage exceeds 1.0x on a sustained basis.

Conclusion

The upgrade of Alivus Life Sciences Limited to IND AA reflects the company’s financial resilience, operational efficiency, and diversified portfolio. With a strong pipeline, planned capacity expansions, and backing of a reputed group, ALS is well positioned to strengthen its role as a leading player in the global API and CDMO market.

While regulatory and forex challenges remain, ALS’s consistent performance, robust cash reserves, and strong governance structure ensure that it remains on a growth trajectory, aligned with the needs of both domestic and international pharmaceutical markets

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