Concord Biotech Q1 FY27 earnings call

Concord Biotech commenced FY27 with a strong performance, reporting revenues of INR257 crores, a 26.2% year-on-year increase. This growth was broad-based, with healthy contributions across immunosuppressants, anti-infectives, oncology, and antifungals. The API segment was a key driver, growing 42% to INR219 crores, while the formulation segment saw a 23% decline to INR39 crores. The company achieved a gross margin of 78.9% (up 100 bps YoY) and an EBITDA margin of 32% (up 190 bps YoY), with EBITDA reaching INR82 crores. PAT grew 31% to INR58 crores, with a margin of 22.4%.

Export business was a significant growth engine, with export revenues increasing 46% year-on-year in Q1 FY27, supported by rising inquiries from major regulated and semi-regulated markets. The company successfully completed inspections by ANVISA Brazil for its Limbasi facility and PPB Kenya and NDA Uganda for its Valthera Unit 2 formulation facility. Additionally, Concord received ANDA approvals from the U.S. FDA for mycophenolate mofetil and Tofacitinib tablets, enhancing its market reach and future growth prospects.

Concord Biotech maintains a robust product pipeline, planning to launch 2 to 3 new products annually. Fusidic acid, commercialized in FY26, is expected to contribute meaningfully to revenue growth in the current and next financial year. The company's front-end distribution platform, Stellon Biotech, commenced commercial operations in the U.S., aiming to market both Concord's products and in-licensed third-party products. The injectable facility is also progressing well, with customer engagements and commercial discussions at advanced stages, though current utilization is low at 5%.

Management reiterated its long-term vision to achieve INR3,000 crores in revenue within 5 to 6 years, with INR600-700 crores from formulations and INR2,200 crores from APIs, leveraging existing infrastructure. Current capacity utilization stands at 80% for Unit 1, 55% for Unit 3, and 25% for Unit 2. Decisions on further API capex will be considered when Unit 3 utilization reaches 80-85%. The company aims to increase CDMO contribution from the current 1-2% to double-digits in the coming years.

The improvement in gross and EBITDA margins was attributed to strong pricing discipline, favorable product mix, and limited competitive intensity. While the company expects EBITDA margins to improve further, reaching the 40% mark is projected for FY28, contingent on the full ramp-up of the injectable facility and Stellon business. Concord Biotech is a zero-debt company, holding over INR442 crores in cash and equivalents as of June 30, 2026, and incurred INR9.5 crores in capex this quarter. The company is exploring both organic and inorganic growth opportunities in fermentation adjacencies.

Concord Biotech was awarded a silver medal by EcoVadis for its sustainability performance, placing it among the top 15% globally assessed companies. This recognition reflects its commitment to responsible business practices and scientific excellence. The company continues to engage with innovators, with several projects in advanced stages, expected to reach closure by the end of the year, leveraging its scale, expertise, and comfort in handling fermentation products.