Fredun Pharma — Q3 FY26 earnings call

Call held 12 Feb 2026

Management summary

Fredun Pharma delivered strong financial performance in Q3 and 9M FY26, with significant year-on-year growth in revenue, EBITDA, and net profit. The company is rapidly expanding production capacities and seeing strong traction from new brands. Management reiterated its conservative guidance approach and outlined plans for continued growth in both legacy and new-age businesses, with a focus on asset-light manufacturing for newer segments.

Highlights

  • Q3 FY26 total income stood at INR160.92 crores, registering a strong growth of 57% year-on-year.

  • Q3 FY26 EBITDA came in at INR26.34 crores, reflecting a robust growth of 99% year-on-year, with EBITDA margin improving to 16% (expanded by 384 basis points).

  • Q3 FY26 Net profit was INR10.48 crores, nearly doubling with a growth of 96% year-on-year, and Net profit margin improved to 7%.

  • For the 9-month period, total income reached INR426 crores, marking a 48% year-on-year growth.

  • 9M FY26 EBITDA stood at INR65.66 crores, up by 74% year-on-year, with EBITDA margin improving to 15% (expansion of 237 basis points).

  • 9M FY26 Net profit increased to INR26.98 crores, delivering a strong 96% growth year-on-year, with Net profit margin improved to 6%.

  • Management confirmed no immediate need for funds in the next 12-18 months, with fundraise money from Q3 to be used for working capital.

  • The company expects a 'sudden growth in profits' in the next 2-3 years, driven by operational efficiencies in high-margin new businesses like dermaceutics and pet care.

Key financials

2 periods

Q3

  • Total Income
    ₹160.92 Cr
    YoY +57%
  • EBITDA
    ₹26.34 Cr
    YoY +99%
  • EBITDA Margin
    16%
  • Net Profit
    ₹10.48 Cr
    YoY +96%
  • Net Profit Margin
    7%
  • EPS
    ₹22.19

9M

  • Total Income
    ₹426 Cr
    YoY +48%
  • EBITDA
    ₹65.66 Cr
    YoY +74%
  • EBITDA Margin
    15%
  • Net Profit
    ₹26.98 Cr
    YoY +96%
  • Net Profit Margin
    6%
  • EPS
    ₹57.13

What they filed

Q1 FY27: revenue up 90.0%, net profit up 85.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue107 103 167 120 145 +36%161 +56%213 +28%228 +90%
EBITDA14 13 17 17 22 +57%26 +100%29 +71%33 +94%
Net profit4 5 7 7 10 +150%10 +100%11 +57%13 +86%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Debt Debt disclosed
    Any growing company and rapidly expanding company has -- always requires working capital. So certain things, plus we had changed our banks also. And we have taken new machinery loans also. So those all add up to the finance cost part of it. This will decline over the next 2 to 3 quarters because our fundraise money has come in this quarter actually, on the third quarter, and we are going to sizably use it for working capital as planned.
  • Liquidity Liquidity disclosed Management does not envision any sudden need for funds in the next 12-18 months, with fundraise money from Q3 to be used for working capital and improving internal cash flows.
    So yes, we do not envision any sudden need of funds in the next 12 to 18 months. Business is dynamic. We are growing. If there are a need of funds maybe after 18 months or 24 months or 30 months, we might look into it. If we have to raise funds for a different division or something, we might. There is nothing on the table right now, and there is no immediate need for any funds for that.

Guidance & targets

Revenue Growth

  • Legacy Business Revenue Growth Revenue Growth · next 5 to 7 years · High confidence 12-18%
    The legacy business is expected to grow at somewhere around 12% to 18% year-on-year.

    — Fredun Medhora

  • New-age Business Revenue Growth Revenue Growth · year-on-year · High confidence 20-25%
    in the new-age business, the growth is about 20% to 25%.

    — Fredun Medhora

Revenue

  • Total Revenue Revenue · FY26 · High confidence INR550-580 crores
    runway to reach around INR600 crores and we are comfortable -- and around INR550 crores, INR570 crores to INR580 crores, and we will easily achieve those numbers.

    — Fredun Medhora

Business Mix

  • New-age Business Contribution to Total Revenue Business Mix · by 2029, 2030 · High confidence 51%
    by 2029, 2030, 51% of the business should be from the new-age business.

    — Fredun Medhora

Profitability

  • Sustainable PAT Margin Profitability · next 1-2 years · High confidence 5-6%
    See, anything over 5%, 6% is a great margin at the rate that we are growing because our top line is growing, our margins are also growing.

    — Fredun Medhora

  • Profit Growth from New-age Businesses Profitability · next 2 to 3 years / next 6 to 7 quarters · Medium confidence sudden growth
    There will be a sudden growth in the profits even further in the next 2 to 3 years because of the operational efficiencies coming into our high-margin business, especially dermaceutics, especially our pet care, especially our new line of businesses. So you might, in fact, see a further jump in the profits coming in the next 6 to 7 quarters.

    — Fredun Medhora

Finance Cost

  • Finance Cost Decline Finance Cost · next 2 to 3 quarters · High confidence decline
    This will decline over the next 2 to 3 quarters because our fundraise money has come in this quarter actually, on the third quarter, and we are going to sizably use it for working capital as planned.

    — Fredun Medhora

Mobility Segment

  • Mobility Segment Growth Mobility Segment · year-on-year · High confidence 25-30%
    It is growing almost at 25% to 30% year-on-year. This year, we'll anticipate further growth also.

    — Fredun Medhora

  • Mobility Segment Geographical Coverage Mobility Segment · coming year · Medium confidence 60% of India
    I mean, I'm talking about the coming year because we are adding another 4 to 5 states, and that will kind of complete almost 60% of India.

    — Fredun Medhora

What to watch in Q4 FY26

Finance Cost Reduction

next 2 to 3 quarters
Current Increased in Q3 FY26
Target Decline in finance cost

Why it matters

Reduction in finance costs will directly impact profitability and reflect efficient utilization of recent fundraise.

This will decline over the next 2 to 3 quarters because our fundraise money has come in this quarter actually, on the third quarter, and we are going to sizably use it for working capital as planned.

Q&A highlights

7 direct
Sufficiency of funds for future growth Direct
So yes, we do not envision any sudden need of funds in the next 12 to 18 months. Business is dynamic. We are growing. If there are a need of funds maybe after 18 months or 24 months or 30 months, we might look into it.

Addresses concerns about capital requirements for rapid expansion, indicating no immediate dilution risk.

Asked by Abhi Jain

Conservative nature of guidance Direct
every single guidance has been conservative because I do not believe in just giving a number and then if I overachieve that number, I'm comfortable. I don't want to be ever in a position where I'm underachieving a number.

Explains management's philosophy behind guidance, suggesting potential for overachievement.

Asked by Abhi Jain

Legacy vs. New-age business revenue split and growth Partial
The legacy business is expected to grow at somewhere around 12% to 18% year-on-year... So the remaining portion of that business is the new-age business. So this year, we have pegged -- this year at year-end closing, we are pegged to do somewhere around INR60 crores of our Gx business, around INR42 crores of our pet care business, around INR26 crores of our nutritional business.

Provides a breakdown of growth expectations and current run-rates for different business segments, clarifying the contribution of newer ventures.

Asked by Pritesh

Increase in finance cost and other expenses Direct
Any growing company and rapidly expanding company has -- always requires working capital. So certain things, plus we had changed our banks also. And we have taken new machinery loans also. So those all add up to the finance cost part of it. This will decline over the next 2 to 3 quarters because our fundraise money has come in this quarter actually, on the third quarter, and we are going to sizably use it for working capital as planned.

Explains the reasons for higher finance costs and provides a timeline for its expected reduction, linked to recent fundraising and working capital utilization.

Asked by Sayandeep

Sustainability of PAT margins and future margin expansion Direct
anything over 5%, 6% is a great margin at the rate that we are growing... Margin growth, you will see a sudden increase after a few quarters once the cost efficiencies of the new-age brands start kicking in because they are intrinsically higher gross margin products, 50%, 60%, 70% gross margin products.

Clarifies the current sustainable PAT margin and outlines the significant potential for future margin expansion driven by the higher gross margins of new-age products.

Asked by Sayandeep / Kush Gangar

Correction on prior guidance regarding US business contribution Direct
It's not U.S. It's new-age business, new age, not U.S. 51% of our business will come from new-age business. New-age business is the brand that we are... May be. It might be a mistake. I will get it corrected. It's not U.S., new-age business.

Corrects a significant misunderstanding from a previous transcript, clarifying that future growth will be driven by 'new-age business' in India, not US exports.

Asked by Gaurav Shukla

Manufacturing strategy for new-age business (asset-light vs. internal) Direct
the new things that we are going to start is going to be asset-light. It suits our things also. We don't want to start manufacturing everything we sell. We want to use someone else's cost efficiencies... say, 4 to 5 years from now, more and more products will be manufactured not directly by us.

Outlines the company's strategic shift towards an asset-light model for new-age products, leveraging third-party manufacturing for cost efficiencies.

Asked by Ishika

Inventory write-off concerns Direct
Inventory write-off is not possible in the kind our write-off of inventory is like INR1,000, INR1,400, INR7,000 like that, sometimes if there is any damage. Big inventory -- generally in pharmaceuticals, the innate inventory of the raw material is around 3 to 5 years. So there is no question of any pertinent write-off at this point in stage or even in the conceivable future.

Reassures investors about the low risk of significant inventory write-offs due to the nature of pharmaceutical raw materials and current inventory levels.

Asked by Pal Balar

2 min read 6 chapters

Detailed narrative

Q3 & 9M FY26 Performance Overview

Fredun Pharma reported robust financial results for Q3 FY26, with total income growing 57% year-on-year to INR160.92 crores. EBITDA saw a 99% increase to INR26.34 crores, leading to an EBITDA margin of 16%, a 384 basis point expansion. Net profit nearly doubled by 96% to INR10.48 crores, with a net profit margin of 7%. For the nine-month period, total income was INR426 crores (up 48% YoY), EBITDA was INR65.66 crores (up 74% YoY) with a 15% margin, and net profit grew 96% to INR26.98 crores, achieving a 6% net profit margin.

Growth Strategy & Capacity Expansion

The company is undergoing rapid expansion, increasing production capacities at existing plants and adding 37 new partner facilities. This expansion supports the strong traction observed in new brands launched over the past 2-3 years. Management confirmed that current funds are sufficient for the next 12-18 months, with recent fundraise money from Q3 FY26 earmarked for working capital and internal cash flows improving.

Legacy vs. New-Age Business Dynamics

Fredun Pharma's legacy business is projected to grow at 12-18% year-on-year for the next 5-7 years, supported by 1,300-1,400 product registrations in the pipeline. The new-age business, encompassing Gx, pet care, nutritional, mobility, dermaceutics, and cosmetics, is growing at 20-25% year-on-year. For FY26, new-age business is targeted to contribute approximately INR60 crores from Gx, INR42 crores from pet care, and INR26 crores from nutritional segments. The company aims for new-age business to constitute 51% of total revenue by 2029-2030.

Profitability & Margin Outlook

Management considers a PAT margin of 5-6% sustainable given the current growth trajectory. However, a 'sudden growth in profits' is anticipated in the next 2-3 years (or 6-7 quarters), driven by operational efficiencies from high-margin new-age businesses, which boast gross margins of 50-70%. The increase in finance costs in Q3 FY26 is attributed to working capital needs and new machinery loans, but these costs are expected to decline over the next 2-3 quarters as fundraise money is utilized.

Manufacturing Strategy for New-Age Business

For its new-age products, Fredun Pharma is adopting an asset-light manufacturing strategy. The company does not intend to build dedicated plants for all new product types, such as wheelchairs. Instead, it plans to leverage third-party manufacturers' cost efficiencies. This approach means that within 4-5 years, a growing proportion of products will be manufactured externally, allowing the company to penetrate markets more effectively.

Mobility Segment Expansion & Penetration

The mobility segment, which includes over 800 products under brands like 'Braceon' (ortho), 'DGon' (BP meters), and 'Nebon' (nebulizers), is growing at 25-30% year-on-year. The company is actively expanding its distribution, adding 30-40 retail outlets weekly. It plans to add 4-5 more states in the coming year, aiming to cover approximately 60% of India. Operational leverage from states like Maharashtra, where products are widely available, is expected to kick in within 9 months, with overall leverage from new brands anticipated in 5-7 quarters.

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