Emcure Pharmaceuticals Limited — Q2 FY26 earnings call

Call held 11 Nov 2025

Management summary

Emcure Pharmaceuticals delivered a strong Q2 FY26, driven by sustained momentum across all business segments, leading to double-digit revenue and profit growth. Strategic initiatives like the Novo Nordisk partnership for semaglutide and the full consolidation of Zuventus are expected to further bolster future growth and market positioning. The company remains on track with its annual guidance for margin improvement and aims for debt reduction in the coming 18-24 months.

Highlights

  • Revenue from operations grew 13.4% YoY to INR 2,270 crores.

  • Highest quarterly Profit After Tax (PAT) of INR 251 crores, marking a 24% YoY growth.

  • EBITDA margin stood at 19.3%, an increase from 19% in Q2 FY25.

  • Domestic business achieved 10.6% YoY growth, reaching INR 1,031 crores.

  • International segment grew strongly by 15.8% YoY to INR 1,238 crores, with Europe up 22.7% and Canada up 17.5%.

  • Entered into an exclusive partnership with Novo Nordisk for semaglutide (Poviztra) in India.

  • Completed the purchase of the remaining minority stake in Zuventus, allowing full consolidation.

Key financials

  1. Revenue from Operations ₹2,270 Cr +13.4%YoY
  2. PAT ₹251 Cr +24%YoY
  3. EBITDA (excl. other income) ₹439 Cr +15.2%YoY
  4. EBITDA Margin 19.3%
  5. Gross Margin 60.8%
  6. Depreciation & Amortization ₹105 Cr
  7. Interest Cost ₹33 Cr
  8. Effective Tax Rate 26%
  9. Net Debt ₹837 Cr

What they filed

Q1 FY27: revenue up 32.3%, net profit up 62.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,105 1,029 1,278 1,097 1,261 +14%1,418 +38%1,468 +15%1,451 +32%
EBITDA158 124 245 228 225 +42%300 +142%372 +52%340 +49%
Net profit87 50 140 123 118 +36%259 +418%234 +67%200 +63%
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.

Segment breakdown

Share of Revenue
₹3,507 Cr Total
  • International Segment ₹1,238 Cr 35.3%
  • Domestic Business ₹1,031 Cr 29.4%
  • Emerging Markets ₹446 Cr 12.7%
  • Europe ₹444 Cr 12.7%
  • Canada ₹348 Cr 9.9%

Capital allocation

high confidence
  • Debt Net ₹837 Cr
    Net debt for the quarter was at INR 837 crores. The debt has increased primarily due to partial payout of the ZHL stake purchase.
  • M&A Zuventus Acquisition · Closed

    Allows full consolidation of the business and expected synergies on the back-end.

    Debt increased due to partial payout of the Zuventus stake purchase.

    We have now completed the purchase of the minority stake in Zuventus, which allows us to fully consolidate the business. We also expect some synergies on the back-end going forward.

Guidance & targets

Margin

  • EBITDA Margin Improvement Margin · this year · High confidence 150 basis points
    So I think what we have even guided at the start of the year, we expect the margins to go up. So this quarter's 19.3% odd that we are seeing that includes the new Sanofi in-licensing that we did. So I think what we have guided for is we expect this year the base margins to improve by about 150 basis points. I think we'll be on track for that.

    — Piyush Nahar

  • Second Half Operating Margins Margin · second half · Medium confidence substantial improvement
    So is it then, you know, reasonable to infer that second half operating margins year-on-year improvement would be substantial? Second half last year, I think, was relatively weaker than first half. Yes, that is correct. I think given some of the launches and I think what we are seeing in the domestic side, we do expect the second half to be much better versus last year.

    — Piyush Nahar

Debt

  • Debt-Free Status Debt · end of next year (18-24 months) · Medium confidence debt-free

    Previously FY26 → debt-free

    So Foram, when we have guided for FY '26, that was without any acquisitions. As you have noticed in this quarter end, basically in the last few months, we have acquired the remaining stake in Zuventus. So the debt increase that you are seeing is because of that. So I think with post that acquisition, we expect now to be debt-free by end of next year. So it'll take about 18 to 24 months.

    — Piyush Nahar

Growth

  • Organic Growth (excl. Sanofi) Growth · current quarter · High confidence 8.5%-9%
    Yes, except that, it has been at 8.5%-9%.

    — Piyush Nahar

  • Organic Growth vs Industry Growth · High confidence industry growth rates + 100 to 200 basis points
    I think what we've continued to guide is that organically, we would look to be at industry growth rates plus 100 to 200 basis points.

    — Vikas Thapar

Product Launch

  • Amphotericin B Launches in Europe Product Launch · by year-end · High confidence across Europe
    We expect Amphotericin B to see launches across Europe by year-end.

    — Satish Mehta

  • Biosimilar Bevacizumab File Submission Product Launch · next few weeks · High confidence submit file for evaluation
    And as far as the pipeline goes, we have completed our Phase III of Bevacizumab. We believe it's gone up very well, and we should be submitting our file for evaluation by the SEC and subsequent approval by the regulators in the next few weeks.

    — Samit Mehta

Market context

  • Organic Growth (overall) Growth · going forward · Medium confidence double-digit
    So if you look at last quarter, in Q1, we were at double digit. I think last quarter, as you have noticed across the industry, there was some impact that we had because of the GST changes. So I think going forward, we should be at that double-digit growth level.

    — Piyush Nahar

What to watch in Q3 FY26

EBITDA Margin Improvement

next quarter / FY26
Current 19.3%
Target on track for 150 bps improvement for FY26

Why it matters

EBITDA margin expansion is a key strategic goal for the year, indicating operational efficiency and product mix benefits.

I think what we have even guided at the start of the year, we expect the margins to go up. So this quarter's 19.3% odd that we are seeing that includes the new Sanofi in-licensing that we did. So I think what we have guided for is we expect this year the base margins to improve by about 150 basis points. I think we'll be on track for that.

Risks & concerns

  • Crowded market post-LOE for semaglutide

    medium

    Management anticipates a very crowded market in India post-Loss of Exclusivity (LOE) for semaglutide.

    Management acknowledged

  • Debt increase due to Zuventus acquisition

    low

    Net debt increased primarily due to the partial payout for the Zuventus stake purchase, pushing back the debt-free target.

    Management acknowledged

  • Lumpiness in ARV business

    low

    The ARV business experiences lumpiness in quarters, though management maintains good order book visibility.

    Management acknowledged

Q&A highlights

6 direct
Novo Nordisk Semaglutide (Poviztra) Opportunity vs Sanofi Portfolio Partial
This product we will be launching and we're going to various segments for the first time. So let it play out over a period of time, and we'll keep you posted on a quarterly basis about the progress that we are making.

Analyst sought quantification of the new partnership's potential compared to an existing successful in-licensed portfolio, but management deferred specific numbers.

Asked by Foram Parekh

Revised Debt-Free Timeline Direct
So I think with post that acquisition, we expect now to be debt-free by end of next year. So it'll take about 18 to 24 months.

Management revised the previous debt-free target from FY26 to 18-24 months due to the Zuventus acquisition, impacting capital structure expectations.

Asked by Foram Parekh

Impact of Poviztra Patent Expiry and Deal Structure Direct
I think if you look at the construct of this deal, obviously, post-LOE, we anticipate a very crowded market in India. And so the ability to partner with Novo and launch this brand ahead of the competition and allowing ourselves to shape the market and have brand recall versus being lost in the crowd probably 4, 5 months down the line is something that we feel strongly will allow us to succeed in terms of our aspirations for the market share and what we think the potential of the brand is.

Analyst questioned the deal's value given anticipated patent expiry, and management emphasized the first-mover advantage and market-shaping opportunity.

Asked by Tushar Manudhane

Increase in Inventory Levels Direct
Yes. So what happened is for the European market, we are anticipating some new launches and even the Canadian market, and that's where the inventory has gone up. So inventory based on the forecast for the H2, the H2 forecast is a bit higher. On that basis, inventory has been accumulated to that. Over the next 6 months, we see inventory normalizing.

Analyst inquired about rising inventory, and management clarified it's strategic build-up for anticipated H2 launches in Europe and Canada, with normalization expected.

Asked by Tushar Manudhane

Progress on Biosimilar Bevacizumab Direct
And as far as the pipeline goes, we have completed our Phase III of Bevacizumab. We believe it's gone up very well, and we should be submitting our file for evaluation by the SEC and subsequent approval by the regulators in the next few weeks.

Analyst sought an update on the biosimilar pipeline, and management provided a clear timeline for the Bevacizumab file submission, indicating progress in a key growth area.

Asked by Utkarsh Kedia

Manufacturing Strategy for Semaglutide in India Direct
In fact, this is there global product. So they will continue to be importing the product for us to market and distribute in India and no plans to locally manufacture.

Analyst questioned if Emcure plans local manufacturing post-patent expiry, and management clarified that the current strategy is import and distribution, with no local manufacturing plans.

Asked by Rahul Jeewani

Organic Growth Excluding Sanofi Oral Anti-Diabetes Brands Direct
Yes, except that, it has been at 8.5%-9%.

Analyst sought clarity on underlying organic growth, excluding the impact of recent in-licensing deals, providing a clearer picture of core business performance.

Asked by Rahul Jeewani

2 min read 6 chapters

Detailed narrative

Q2 FY26 Performance Overview

Emcure Pharmaceuticals reported a robust Q2 FY26, with revenues from operations growing 13.4% year-on-year to INR 2,270 crores. The company achieved its highest quarterly Profit After Tax (PAT) of INR 251 crores, reflecting a 24% YoY increase. EBITDA, excluding other income, rose 15.2% YoY to INR 439 crores, with the EBITDA margin improving to 19.3% from 19% in Q2 FY25, driven by operating leverage and productivity gains.

Novo Nordisk Partnership and Semaglutide Strategy

A significant strategic move in the quarter was the exclusive partnership with Novo Nordisk to distribute semaglutide (Poviztra) in India. Management highlighted the substantial potential in the GLP market, given India's large obese/overweight population (250-350 million). This partnership provides an early entry into the obesity market, positioning Emcure to shape it, leveraging Novo's extensive clinical data and Emcure's strong distribution network and field force.

Domestic Business Traction and Zuventus Consolidation

The domestic business demonstrated strong traction, growing 10.6% YoY to INR 1,031 crores, outperforming the industry. Growth was observed across key segments like gynecology and cardiology, with new areas such as derma, consumer, and diabetes also performing well. The company completed the acquisition of the remaining minority stake in Zuventus, enabling full consolidation and anticipating future back-end synergies to further drive growth above industry averages.

International Segment Growth Drivers

The international segment delivered strong growth of 15.8% YoY, reaching INR 1,238 crores. Europe was a key driver, growing 22.7% YoY, primarily due to the ramp-up of Amphotericin B and benefits from the Manx acquisition. Canada also saw healthy growth of 17.5%, fueled by market share gains and new launches. The Rest of the World business grew in teens, largely led by the non-ARV segment, with good product pipeline visibility for future growth.

Margin Expansion and Debt Management

Gross margins for the quarter stood at 60.8%, slightly up from 60.6% in Q2 FY25, attributed to product and business mix. The company aims to improve its base EBITDA margins by 150 basis points for the full year. Net debt for the quarter was INR 837 crores, an increase due to the partial payout for the Zuventus stake. Management revised its debt-free target to the end of next year (18-24 months) from the previously guided FY26, acknowledging the impact of the acquisition.

R&D and Biosimilar Pipeline Progress

Emcure continues to invest in internal R&D efforts and partnerships with MNCs. In the biosimilar space, the company completed Phase III of Bevacizumab and expects to submit the file for evaluation by the SEC and regulatory approval in the next few weeks. This progress, along with a pipeline of complex injectables and biosimilars for emerging markets, underscores the company's focus on leveraging its manufacturing capabilities for future growth.

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