Dishman Carbogen Amcis Q1 FY27 earnings call

Dishman Carbogen Amcis is actively strengthening its sales force and commercial leadership, marked by the hiring of Angela Ameriks as Global Chief Commercial Officer and a new sales leadership team for India. The SPRINT initiative, focused on acquiring early-phase projects, has yielded positive results, securing promising new projects. The company is also promoting its packaged drug substance product, particularly in the bioconjugation space, and fostering increased collaboration between Dishman and Carbogen Amcis for process transfers to India, aiming for competitive pricing and enhanced group margins.

The French drug product subsidiary is gaining market recognition, leading to an increase in RFPs and new project acquisitions, alongside successful big pharma audits. The drug substance unit has successfully transitioned multiple Phase II projects into late-phase programs, with over 10 such projects now in its portfolio. The specialty business, encompassing cholesterol and Vitamin D, demonstrated strong performance in Q1 FY27 with increased sales and improved margins. New markets in Vietnam, Africa, and South America are being actively penetrated for these products.

The Naroda site successfully completed an inspection by the Ministry of Food and Drug Safety from South Korea, and both Bavla and Naroda sites maintain certifications from all major international health authorities. Additionally, two new liquid softgel drug products received approval in Myanmar. The company is making significant progress with tech transfers from Switzerland to India, having already signed one commercial contract and with three others in advanced discussions, with the first transfer expected to be completed within the current financial year.

For Q1 FY27, Dishman Carbogen Amcis reported income from operations of INR 6,776 million, representing a 4.29% year-over-year decline from INR 7,080 million in Q1 FY26, primarily due to a postponed order. EBITDA for the quarter stood at INR 600 million, a substantial decrease from INR 1,406 million in the comparable prior-year quarter, resulting in an EBITDA margin of 6.3% compared to 17.9%. The company recorded a loss before tax of INR 512 million, partly influenced by a foreign exchange impact^🌐 of INR 117.3 million.

The CDMO segment generated revenue of INR 5,343 million in Q1 FY27, down from INR 6,112 million in Q1 FY26, with an EBITDA margin of 6.3%. In contrast, the Marketable Molecules segment exhibited robust growth, with revenue increasing to INR 1,432 million from INR 968 million in Q1 FY26, marking a 47.93% YoY rise. The segment's margin for Q1 FY27 was INR 18.6 million, which was normalized due to higher sales of cholesterol.

The company's net debt, excluding lease liabilities, was CHF 153.6 million as of June 30, 2026. Shareholders have approved a promoter-backed loan of up to CHF 200 million at an all-inclusive interest rate of 4% over a 10-year tenor. This funding, anticipated within the next 60-90 days, is intended to prepay high-cost debt in India and support future CapEx and working capital needs, with an aim to reduce net debt to CHF 140-150 million and annual interest expense to INR 130-140 crores.

For FY27, the company projects overall single-digit revenue growth, with the Indian entity expected to achieve a significant 30-35% revenue increase and an operating margin of approximately 10%. Looking further ahead to FY28-29, management anticipates double-digit revenue growth exceeding 10% YoY, driven by strong performance in both Indian and French operations. The EBITDA margin is targeted to return to the 25-26% range, aligning with levels prior to the EDQM issues.