Concord Biotech Limited — Q4 FY26 earnings call

Call held 1 Jun 2026

Management summary

Concord Biotech faced a challenging FY26, reporting significant revenue degrowth across API and formulation segments due to geopolitical headwinds, supply chain disruptions, and regulatory delays, leading to a 12% full-year revenue decline and 30% PAT reduction. Despite these challenges, the company strengthened its regulatory compliance, commenced operations at its injectable facility, and maintained a zero-debt balance sheet with over INR 414 crores in cash. Management anticipates a stronger FY27 with growth exceeding historical rates, driven by new product launches and improved market conditions, with operating leverage expected to boost margins.

Highlights

  • Strengthened regulatory filings with successful US FDA, EU GMP, Russian GMP, NAFDAC, and WHO-GMP inspections.

  • Injectable facility commenced operations and completed its first year of manufacturing with WHO-GMP certification.

  • Commenced supplies of APIs to 2 innovator companies and commercialized Fusidic Acid manufacturing.

  • Zero-debt company with cash and cash equivalent of over INR 414 crores as of March 31, 2026.

  • Expects FY27 growth to be slightly better than historical 18%, with good visibility in the first half.

Concerns

  • FY26 was a challenging year with industry headwinds, geopolitical issues, and supply chain disruptions.

  • API revenues for Q4 FY26 degrew by 27% to INR 264 crores, and for FY26 degrew by 12% to INR 829 crores.

  • Overall revenue degrowth of 24% for Q4 FY26 and 12% for FY26.

  • PAT down by 30% for FY26 to INR 260 crores.

  • US Veterans Affairs business impacted by an unfinalized tender, representing an INR 25 crores impact.

  • Inventory days increased to 480 days from 286 days last year due to staggered procurement and delays.

Key financials

3 periods

Q4 FY26

  • API Revenue
    ₹264 Cr
    YoY -27%
  • Formulation Revenue Degrowth
    -8%
  • Total Revenue Degrowth
    -24%
  • Adjusted EBITDA Margin
    40.4%
  • API to Formulation Mix
    80%

FY26

  • API Revenue
    ₹829 Cr
    YoY -12%
  • Formulation Revenue Degrowth
    -13%
  • Total Revenue Degrowth
    -12%
  • EBITDA
    ₹367 Cr
  • EBITDA Margin
    35%
  • Adjusted EBITDA Margin
    39%
  • PAT
    ₹260 Cr
    YoY -30%
  • Capex
    ₹65 Cr
  • CFO
    ₹267 Cr
  • CFO to EBITDA Conversion
    73%
  • Domestic Sales Degrowth
    -15%
  • Export Sales Degrowth
    -9%

FY26 end

  • Cash & Equivalents
    ₹414 Cr
  • Inventory Days
    480 days

What they filed

Q1 FY27: revenue up 27.9%, net profit up 41.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue310 244 430 204 247 −20%278 +14%326 −24%261 +28%
EBITDA137 98 190 61 91 −34%102 +4%122 −36%87 +43%
Net profit99 74 142 43 63 −36%68 −8%90 −37%61 +42%
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
  • Capex ₹65 Cr
    • Soft gel facility
    • Project with innovator company (modifications)
    • Additional facility for topical range
    Our capex for the year stood at INR 65 crores, and our cash flow from operations stood at INR 267 crores with a CFO to EBITDA conversion of around 73% with the manufacturing capacities across all 4 units supporting a peak revenue potential of approximately INR 3,000 crores, along with a strong cash surplus position and limited capex requirements, we are well positioned to capitalize on future growth opportunities and drive sustainable growth. (Raviraj Karia, Page 5) ... So as I mentioned earlier that we have also set up the soft gel facility within this year. So capex has also gone towards that in addition to the maintenance capex. And in addition, we have also, as I mentioned, that started work with one of the innovative companies. (Ankur Vaid, Page 9)
  • Debt Debt disclosed
    We are a zero-debt company with cash and cash equivalent of more than around INR 414 crores as on 31st March 2026. (Raviraj Karia, Page 5)
  • M&A Stellon Biotech Acquisition · Integrated

    Enables direct marketing, distribution and commercialization of Concord Biotech's products in the U.S.

    Expenses fully booked in FY26, future contributions positive for EBITDA.

    We have commenced commercialization of soft gel facility, creating additional avenues for revenue generation and incorporated and acquired licenses for Stellon Biotech, our U.S. subsidiary, which enables direct marketing, distribution and commercialization of Concord Biotech's products in the U.S. (Ankur Vaid, Page 5)
  • M&A Celliimune Biotech Investment · Closed

    Invested in growth platforms like our entity into cell and gene therapy.

    We have also invested in growth platforms like our entity into cell and gene therapy through investments in Celliimune Biotech. (Ankur Vaid, Page 3)
  • Liquidity Cash ₹414 Cr Sufficient cash on hand for growth, zero-debt status.
    We are a zero-debt company with cash and cash equivalent of more than around INR 414 crores as on 31st March 2026. (Raviraj Karia, Page 5)

Guidance & targets

Revenue

  • FY27 Revenue Growth Revenue · FY27 · Medium confidence >18%
    As I said that our historical growth has been around 18%. So we expect it to be slightly better off is how we are looking at this financial year.

    — Ankur Vaid

EBITDA Margin

  • EBITDA Margin Impact from Solar Plant EBITDA Margin · FY27 · High confidence 1-1.5% positive impact
    Yes. So those savings have started and we expect around 1% to 1.5% positive impact on the EBITDA.

    — Ankur Vaid

  • Overall EBITDA Margin Improvement EBITDA Margin · FY27 · Medium confidence closer to 1.5% EBITDA mark
    And I think if that improves, then we should get closer to the 1.5% EBITDA mark is what we see.

    — Ankur Vaid

  • Gross Margin Range EBITDA Margin · FY27 · Medium confidence similar range
    See, I mean, I would say gross margins to be kind of in a similar range because as one sees that there has been some pressure on the supplies of the goods. and of course, I don't expect that to be there for the full year.

    — Ankur Vaid

Capex

  • General Capex Capex · FY27 · High confidence INR 20-30 crores
    General capex is around to the tune of INR 20 crores, INR 30 crores. And as of now, there is no particular requirements per se.

    — Ankur Vaid

  • Next Large Capacity Creation Capex · 2-3 years · Medium confidence INR 50-100 crores
    Anything above I mean, INR 50 crores to INR 100 crores, probably 2 to 3 years could be a good estimation.

    — Ankur Vaid

  • Next Large Capacity Creation (Longer Term) Capex · 4-5 years · Medium confidence >INR 100 crores
    But beyond INR 100 crores, I think it will be probably 4 to 5 years down the line.

    — Ankur Vaid

Profitability

  • Injectable Facility Breakeven Profitability · next financial year · Medium confidence breakeven
    So full breakeven, I would say, will take time. I would say probably in the next financial year is what I would look at.

    — Ankur Vaid

Operations

  • Stellon Biotech Supplies Operations · H1 FY27 · High confidence supplies to happen
    Also with respect to Stellon, we are expecting the supplies to happen in the first half of the year as well.

    — Ankur Vaid

Working Capital

  • Inventory Normalization Working Capital · H1 FY27 · High confidence normalize
    So that slight increase was on factors, which we spoke about, which, as I mentioned, should get addressed in the first half of the year.

    — Ankur Vaid

Product Mix

  • API to Formulation Mix Product Mix · FY27 · High confidence 80:20
    Yes. I mean, overall API to formulations, as you saw last year and last to last year and also last year, we were in and around that 80-20. So plus/minus 2%, 3% here and there is what we expect also in this year.

    — Ankur Vaid

What to watch in Q1 FY27

FY27 Revenue Growth

FY27
Current FY26 degrowth of 12%
Target Revenue growth >18% for FY27

Why it matters

Key indicator of business recovery and effectiveness of new strategies.

As I said that our historical growth has been around 18%. So we expect it to be slightly better off is how we are looking at this financial year.

Risks & concerns

  • Industry Headwinds & Geopolitical Issues

    high

    Slowdown in procurement (US), uncertainties around US tariff measures, broader complex geopolitical environment, and Middle East conflict impacted FY26 revenue.

    Management acknowledged

  • CDSCO Approval Delays

    high

    Restricted supplies to European region for nearly 3 months due to delays in written confirmation approvals from CDSCO, deferring revenue.

    Management acknowledged

  • US Veterans Affairs Tender Hold

    medium

    Tender not finalized during FY26, resulting in lower sales and an INR 25 crores impact, with resolution dependent on geopolitical situation.

    Management acknowledged

  • Increased Inventory Days

    medium

    Inventory days increased to 480 from 286 due to staggered customer procurement and delays, impacting working capital.

    Management acknowledged

Q&A highlights

6 direct, 1 evasive
FY27 Growth Visibility and Magnitude Direct
So we have a very good amount of visibility in the first half. And basis on that, we have been pretty confident that the coming financial year, we should expect the growth, which should be better off than our historical growth, which has been there.

Confirms management's confidence in near-term recovery and growth acceleration for the upcoming fiscal year.

Asked by Ankur Kumar

EBITDA Margin Outlook and New Business Breakeven Partial
So this is a cycle that one goes through and we have established the infrastructure last year, which was the injectables. And in this year, we have set up Stellon Biotech. So whenever you're establishing newer business units, it takes time to kind of build-up and have positive contributions to the top line. ... But that being said, all the expenses that have been there for these 2 entities have been fully booked in the last financial year. So anything that would go going forward would be like a positive impacting only to the EBITDA.

Addresses the drag from new ventures in FY26 and signals future margin improvement from operating leverage, though without specific numbers.

Asked by Ankur Kumar

Middle East Exposure and Tender Impact Direct
Sure. So the tender impact, we had already captured that in quarter 3, and we had informed that the tender was to the tune of close to around INR 25 crores. ... So I would say it would be close to around INR 50 crores.

Quantifies the impact of geopolitical issues on revenue and clarifies the nature of the business affected (primarily formulation tender).

Asked by Dhawal Khut

Injectable Plant Losses and Filing Progress Direct
Yes. So for injectable plants, we have previously also mentioned that the quarter-on-quarter expenses are around INR 10 crores, while the full year number would be around INR 38 crores to INR 39 crores. ... So our target markets is the Southeast Asia and the Africa markets to begin with. And the documentation and the submissions are going to be initially targeted towards the emerging markets, which is the Southeast Asia and the Africa markets.

Provides specific financial impact of the new injectable facility and outlines the market entry strategy through regulatory filings.

Asked by Dhawal Khut

Pricing Growth and Facility Utilization Direct
So as I said that there has been no price growth for us. So all the volumes, it has been primarily on the basis of volume. ... Yes. Yes. So the capacity utilization for the Unit 1 was 77%, Unit 2 was 30% and Unit 3 is around 53%.

Clarifies revenue drivers (volume-led, no price growth) and provides current capacity utilization rates across different units.

Asked by Aniket Singh

US Veterans Tender Resolution Timeline Evasive
It all depends upon how the war situation improves. But I think nobody has that clarity, not even us. ... So I just wanted to clarify on this. So this INR 25 crores impact is an API impact or is it the formulations impact? Management: Formulations impact.

Highlights an ongoing revenue deferral and the uncertainty surrounding its resolution, with management unable to provide a timeline.

Asked by Naman Bagrecha

Operating Leverage and Margin Improvement Potential Direct
That's correct. So as I mentioned earlier that the full cost has been factored into the last year. So there would be operating leverage kicking in. But as I also mentioned that typically, it does take a little bit longer time for it to kind of have a full breakeven because the supplies to Stellon are going to happen in the first half of the year. ... Possibly, yes, because as I said, 1% to 1.5% should be from the power and around 0.5%, 50 bps from the rest of the business, one can look at that, yes.

Provides a clear path for margin expansion in FY27 through operating leverage and energy savings, with some caveats on timing for full breakeven.

Asked by Gagan Thareja

Working Capital and Inventory Normalization Direct
So it's a mix of two things. One is that as mentioned during the call earlier that certain of our customers made it more staggered procurement approach than the bulk approach. ... So that inventory is sitting in our books as well. And some delays because of which customers delayed because of all that was happening in the last couple of weeks of March. ... So we expect this to slightly moderate as well in the coming quarters as staggered supplies to these customers would start happening.

Explains the reasons behind the increase in inventory days and provides a timeline for its expected normalization, impacting working capital.

Asked by Agraj Shah

2 min read 6 chapters

Detailed narrative

FY26 Performance Overview & Challenges

Concord Biotech experienced a challenging FY26, marked by a 12% revenue degrowth for the full year and a 24% decline in Q4, primarily due to industry headwinds, geopolitical issues, and supply chain disruptions. API revenues fell by 12% to INR 829 crores for FY26, while formulation revenues saw an 8% decline in Q4 and 13% for the full year. Profit after tax was significantly impacted, dropping 30% to INR 260 crores for the year.

Regulatory & Operational Strengths

Despite financial setbacks, the company strengthened its regulatory compliance, successfully completing US FDA, EU GMP, Russian GMP, NAFDAC, and WHO-GMP inspections across multiple facilities. The injectable facility commenced operations and achieved WHO-GMP certification, positioning it for domestic market entry and contract manufacturing. Concord also commercialized Fusidic Acid and initiated API supplies to two innovator companies, contributing to future growth.

Impact of Geopolitical & Regulatory Delays

Geopolitical uncertainties in the Middle East and delays in obtaining CDSCO approvals significantly impacted revenue, restricting European supplies for nearly three months and deferring an INR 25 crores US Veterans Affairs tender. These issues led to a shift in customer procurement strategies towards more staggered approaches and increased inventory days to 480, up from 286 in the prior year, affecting working capital.

Financial Health & Capital Allocation

Concord Biotech maintains a strong financial position as a zero-debt company, holding over INR 414 crores in cash and equivalents as of March 31, 2026. FY26 capex stood at INR 65 crores, with future general capex projected at INR 20-30 crores annually. The company's existing manufacturing capacities are deemed sufficient to support a peak revenue potential of INR 3,000 crores, with additional capex for a soft gel facility and an innovator project.

Outlook for FY27 & Growth Drivers

Management expresses confidence in a stronger FY27, anticipating revenue growth 'slightly better off' than the historical 18%, starting from Q1. This growth is expected to be driven by new product launches like Nystatin and Fusidic Acid, increased market share in anti-infective and oncology segments, and operating leverage from new ventures like Stellon Biotech and the injectable facility, which are projected to reach breakeven in FY27.

Margin Improvement Potential

The company expects EBITDA margin improvement in FY27, with a 1-1.5% positive impact from solar plant savings and additional benefits from operating leverage as new businesses ramp up. While gross margins are expected to remain in a similar range, the normalization of inventory and resolution of geopolitical issues are anticipated to further support profitability, with overall EBITDA margins potentially moving closer to the 1.5% mark from power and fuel improvements.

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