Bajaj Healthcare Q1 FY27 earnings call

Bajaj Healthcare Limited reported a robust Q1 FY27, with revenue growing 11.3% year-on-year to INR165.6 crores. Gross profit saw a 16.2% increase, reaching INR80.4 crores, and the gross margin expanded by 210 basis points to 48.3%. EBITDA for the quarter stood at INR29.6 crores, translating to an EBITDA margin of 17.8%, a 70 basis point improvement YoY. Profit after tax from continuing operations increased 14.1% YoY to INR13.9 crores, with a PAT margin of 8.4%.

The company is strategically expanding its portfolio into high-value science-led APIs, specifically Peptides and Oncology. A dedicated peptide manufacturing facility, with an installed capacity of approximately 250 kg per annum, is targeted for commissioning by Q4 2027. This facility is expected to generate peak revenues of INR200-300 crores with an EBITDA margin of 18-20%. Additionally, a dedicated manufacturing facility for oncology APIs is under development, with commercialization targeted by Q4 2028.

Bajaj Healthcare is shifting its formulation mix towards high-margin branded and specialized products. The company achieved a significant milestone by becoming the first in India to secure SEC recommendation for manufacturing and marketing Cenobamate Tablets, with an expected revenue contribution of INR10-12 crores in FY27. Bioequivalence studies for Suvorexant Tablets have been successfully completed, and regulatory approval is in process. The Bajaj Oncocare platform, launched in 2024, has expanded its presence across 23 states and 3 union territories with 15+ brands.

R&D spending has scaled meaningfully, increasing from 0.4% of sales in 2024 to 2.2% in 2026, reflecting a commitment to innovation. A new large R&D facility, spanning over 10,000 square feet, is expected to be operational by August 2026. The company also secured exclusive licensing rights for Magnesium L-Threonate (Magtein), a specialty nutraceutical, which is currently an export product with an anticipated growth of 15-20%.

The company maintains a disciplined approach to capital allocation, with an annual capex plan of INR40-50 crores. The balance sheet has significantly strengthened, with the debt-to-equity ratio improving to 0.45 as of March 31, 2026, from 1.19 in FY24, demonstrating meaningful deleveraging. Cash and cash equivalents at year-end FY26 stood at INR37.2 crores, a substantial increase from INR2.6 crores at the start of the year.

The domestic API segment was a key growth driver in Q1 FY27, growing 27% year-on-year to INR92.3 crores. The company is actively pursuing backward integration for 8-10 molecules, which is expected to contribute 20-25% to revenue and improve margins by 1-2%. This strategy aims to reduce dependency on external suppliers, particularly from China, and enhance overall profitability.