Dishman Carbogen Amcis Q4 FY26 earnings call

Dishman Carbogen Amcis delivered a robust performance in Q4 FY26, with revenue reaching INR 851 crores, marking a 19% year-on-year growth. For the full financial year 2026, the company reported an 8% increase in revenue to INR 2,932 crores. This strong top-line growth translated into significant profitability improvements, with the full FY26 EBITDA margin expanding by 200 basis points to 19.3% from 17.3% in FY25. Consequently, Profit After Tax for FY26 surged to INR 97.4 crores, a substantial increase from INR 3.2 crores in the previous fiscal year.

Both key segments contributed to the growth. The CDMO business saw a 21% revenue growth in Q4 FY26, reaching INR 690.8 crores, and contributed 83% of the total FY26 revenue with a 6.5% growth. The Marketable Molecules segment, particularly Vitamin D analogs, performed exceptionally well, growing 9.3% in Q4 FY26 to INR 160.5 crores and 17% for the full year to INR 490.65 crores. While the overall FY26 EBITDA margin improved, the CDMO segment's Q4 margin dipped to 18.7% from 23.9% in Q4 FY25 due to a less favorable product mix with fewer high-margin late Phase 3 molecules.

The company is focused on late-phase projects, with over 10 such projects including PPQ campaigns, and sees high demand for ADC and related linker-payload compounds. Strategic initiatives like the 'sprint activity' have successfully attracted new early-phase projects from diverse pharma clients. Collaboration between Dishman India and Carbogen Amcis Europe is strengthening, with the first API tech transfer from Europe to India initiated to leverage cost advantages. The company is also offering a combined drug substance-drug product package to the market, aiming for single-supplier convenience for customers.

Dishman Carbogen is undertaking a significant debt restructuring, planning to replace its high-cost India debt of approximately INR 800 crores (10.5-11% interest) with a long-term (10-year), unsecured external commercial borrowing (ECB) from a promoter entity. This is expected to reduce interest costs by INR 30-35 crores per quarter from Q2/Q3 FY27, with the consolidated interest cost for FY27 projected to be not more than INR 100 crores. Net debt (excluding lease liabilities) decreased by CHF 11 million to CHF 146.8 million in FY26. The ECB funds will also support working capital and future CapEx, with no major CapEx planned beyond maintenance and digital transformation investments.

The French subsidiary, despite generating EUR 8 million in revenue, incurred a loss of EUR 9 million in FY26. However, management projects an increase in revenue to EUR 11-12 million and a reduction in losses to EUR 6 million for FY27, targeting breakeven at the EBITDA level by FY28. The consolidated effective tax rate remains high at 50% for Q4 FY26 and is guided at 40% for FY27 and 30% for FY28, primarily due to accumulated losses in subsidiaries like France, Shanghai, and India, which are expected to normalize^📎 as these entities become profitable.

Management is optimistic about future growth, targeting a 15% CAGR for overall revenue over the next three years. The India business is expected to grow by at least 25% in the current financial year (FY27) and achieve a top line of INR 500 crore-plus by FY28. The company aims to reach an overall EBITDA margin of 25% by FY28, driven by improved product mix, cost optimization, and increased utilization of facilities. Annual net debt reduction of CHF 10-15 million (approx. INR 150 crores) is also targeted.