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    Entero Healthcar

    ENTERO
    Consumer Services·2 Jun 2026
    Management Summary

    Entero Healthcare Solutions reported strong Q4 and full year FY26 results, driven by robust organic growth, strategic acquisitions, and margin expansion. The company achieved a 4.5% EBITDA margin in Q4 and 4% for the full year, along with significant PAT growth. Management provided an optimistic FY27 guidance, targeting 23% revenue growth and 5% EBITDA margins, while focusing on operational efficiencies and MedTech expansion.

    Highlights

    5

    • Q4 FY26 EBITDA grew 76% YoY to INR86 crores, with margin expanding 85 bps to 4.5%.

    • Full year FY26 revenue grew 31.5% like-for-like to INR6,591 crores, outperforming IPM by 1.6x.

    • Full year FY26 PAT grew 36% YoY to INR146 crores, achieving a 2.2% margin.

    • Operating cash flow for Q4 FY26 was INR104.6 crores, contributing to a full year OCF of INR96.2 crores.

    • Return on Capital Employed (ROCE) improved to 18.4% in Q4 FY26 from 14.8% in Q3 FY26, and 14.6% for FY26 from 10.7% in FY25.

    Concerns

    2

    • Minority interest contribution in Q4 FY26 was abnormally high at 38% of PAT, though management expects it to normalize to 25-27% for FY27.

    • Interest costs are expected to rise for some time due to recent acquisitions and increased debt levels, following the utilization of IPO funds.

    Key financials

    Metrics

    15

    Periods

    2

    Q4 FY26

    8
    • Revenue Growth
      42.6%
      YoY+42.6%
    • EBITDA
      ₹86 Cr
      YoY+76%
    • EBITDA Margin
      4.5%
      YoY+0.9%
    • PAT
      ₹45.1 Cr
      YoY+44%
    • PAT Margin
      2.4%

    FY26

    7
    • Revenue (like-for-like)
      ₹6,591 Cr
      YoY+31.5%
    • EBITDA
      ₹266 Cr
    • EBITDA Margin
      4%
      YoY+0.7%
    • PAT
      ₹146 Cr
      YoY+36%
    • PAT Margin
      2.2%

    Segment breakdown

    MedTech Segment
    ₹1,000 Cr Annualized Revenue15% Revenue Contribution
    List

    Capital allocation

    1
    high confidence
    CategoryHeadline
    M&A

    7 acquisitions (including Anand Chemiceutics, Ace Cardiopathy and Biode Technology)

    acquisition · closed

    Guidance & targets

    7
    CategoryTargetPriority
    Revenue
    Consolidated Revenue Growth (excluding new acquisitions)
    23%
    		High
    Profitability
    EBITDA Margin
    5%
    		High
    Cash Flow
    EBITDA to Operating Cash Flow Conversion Ratio
    at least 50%
    		High
    Minority Interest
    Minority Interest Contribution to PAT (before minority interest)
    25% to 27%
    		Medium
    Tax Rate
    Effective Tax Rate
    22% - 23%
    		High
    MedTech
    MedTech Annualized Revenue
    INR1,000 crores
    		High
    Return Ratios
    ROCE
    exceed 20%
    		Medium

    Minority Interest Contribution to PAT

    Next year
    Current38% of PAT (Q4 FY26)
    Target25-27% of PAT

    Why it matters

    To verify the normalization of minority interest and its impact on reported PAT, as Q4 was abnormally high.

    This quarter, the minority interest was almost 38% of our PAT. That will be reduced by 10% to 12% in the next year.

    How to verify

    guidance_and_targets[metric='Minority Interest Contribution to PAT (before minority interest)']

    Risks & concerns

    3
    RiskSeverity

    Impact of Middle East Crisis on Supply Chain

    Analyst inquired about potential disruptions from the Middle East crisis. Management stated they are largely insulated as direct imports are a very small portion of sales and they work with local subsidiaries of global partners. — Analyst downplayed

    low

    Minority Interest Volatility Affecting Overall Numbers

    Analyst expressed difficulty in making sense of overall numbers without clear minority interest contribution. Management provided guidance for FY27 to normalize this. — Analyst acknowledged

    medium

    Rising Interest Costs

    Analyst questioned the sustainability of increased interest costs. Management confirmed interest costs will go up for some time due to recent acquisitions and increased debt levels from IPO fund utilization. — Analyst acknowledged

    medium

    Q&A highlights

    8

    “In the last quarter of financial year '26, we had an abnormal contribution from one of our subsidiaries, which -- where we have partial stake, not full stake. And that's the reason the minority interest contribution for quarter 4 was abnormally high, but over next year, it's going to normalize.”

    Analyst questioned the significant increase in minority interest, which management attributed to an abnormal, one-time event from a subsidiary's preponed sales.

    asked by Govindarajan Chellappa

    2 min read6 chapters

    Detailed Narrative

    01

    FY26 Full Year Performance Overview

    Entero Healthcare Solutions reported a strong full year FY26, with like-for-like revenue growing by 31.5% to INR6,591 crores, significantly outperforming the IPM by 1.6x. The company achieved a 4% EBITDA margin, up 67 basis points year-on-year, with total EBITDA reaching INR266 crores. PAT for the year stood at INR146 crores, marking a 36% year-on-year growth and a 2.2% PAT margin. Operating cash flow for the full year was INR96.2 crores, reflecting improved working capital management.

    02

    Q4 FY26 Quarterly Performance Highlights

    The fourth quarter of FY26 demonstrated solid growth momentum, with revenue increasing 42.6% year-on-year, driven by 17.1% organic growth and 26% from new acquisitions. Gross margin expanded by 110 basis points to 10.9%, leading to a 59% year-on-year growth in gross profit to INR207 crores. EBITDA for the quarter was INR86 crores, up 76% year-on-year, with the margin at 4.5%, an 85 basis points expansion. PAT grew 44% to INR45.1 crores, achieving a 2.4% margin, and operating cash flow was INR104.6 crores.

    03

    FY27 Guidance and Strategic Focus

    For FY27, Entero Healthcare aims for a consolidated revenue growth of 23% year-on-year, excluding any new acquisitions, and targets a 5% EBITDA margin. The company also expects to achieve an EBITDA to operating cash flow conversion ratio of at least 50%. Management emphasized a focus on profitable revenue growth, operational efficiencies, and leveraging the existing platform, including the MedTech segment, rather than pursuing new acquisitions in the near term.

    04

    MedTech Expansion and Contribution

    The company has significantly expanded its presence in the MedTech segment, closing 3 acquisitions in this space during FY26, including Anand Chemiceutics, Ace Cardiopathy, and Biode Technology. The MedTech segment now contributes over INR1,000 crores in annualized revenue and accounts for more than 15% of the total revenue, with potential to grow to 20%. MedTech margins are higher than pharma due to the company's commercial role in demand generation and sales for manufacturers.

    05

    Working Capital and Cash Flow Optimization

    Entero Healthcare continued to optimize its working capital, with net working capital days improving to 59 days in Q4 FY26 from 64 days in the previous quarter. The increase in payables was primarily attributed to the MedTech segment, which typically has longer payment cycles compared to pharma. The company's strategy includes releasing working capital from low-margin businesses to invest in more profitable assets, contributing to improved operating cash flow.

    06

    Acquisition Strategy and Integration

    During FY26, the company completed 7 acquisitions, which contributed 26% to Q4 revenue growth and 16% to full-year inorganic growth. Management stated that they typically acquire partial stakes with call options for full ownership within 3-5 years, based on predetermined valuations (5-7x EV/EBITDA). The focus for the next 6-8 months is on integrating and driving organic growth from these acquired entities, with all key management personnel from recent acquisitions remaining with the company.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.