India ▾

Fredun Pharmaceuticals Limited — Q1 FY27 earnings call

Call held 13 Aug 2026

Company page: Fredun Pharmaceuticals share price, financials & guidance record

Management summary

Fredun Pharma delivered a strong Q1 FY27, with significant top-line and bottom-line growth driven by new age brands and strategic capacity expansion. The company is actively developing its pet care ecosystem, Wagr.in, and projects robust growth across its business segments for the coming years. While confident in its trajectory, management provided cautious guidance on specific high-end targets and margin expansion timelines.

Highlights

  • Stand-alone total income grew 90.44% YoY to INR228.25 crores.

  • EBITDA grew 92.90% YoY to INR32.78 crores, with margin expanding 18 bps to 14.36%.

  • Net profit grew 94.63% YoY to INR13.17 crores, with margin expanding 12 bps to 5.77%.

  • Management projects a blended growth rate of 30-35% for the next three years.

  • Pet care business is targeted to achieve INR100 crore revenue within 3-3.5 years from launch/plant building.

Concerns

  • Management was evasive about providing a specific EBIT margin target for the next 15-18 months, only stating it would be 'near that number' within 12 quarters.

  • Management declined to comment on the INR1,000 crore revenue target for FY27, stating their internal target is INR800 crores.

Key financials

  1. Total Income ₹228.25 Cr +90.4%YoY
  2. EBITDA ₹32.78 Cr +92.9%YoY
  3. EBITDA Margin 14.4%
  4. Net Profit ₹13.17 Cr +94.6%YoY
  5. Net Profit Margin 5.8%

What they filed

Q1 FY27: revenue up 90.0%, net profit up 85.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue0 103 167 120 145 161 +56%213 +28%228 +90%
EBITDA0 13 17 17 22 26 +100%29 +71%33 +94%
Net profit0 5 6 7 9 10 +100%11 +83%13 +86%
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 ₹30 Cr
    • Capacity expansion to become one of the largest manufacturing units
    • Upgrading facilities and machineries, adhering to cGMP protocols
    Yes. In terms of CapEx, as we are growing, we're expanding. Our goal by end of December 2028 and earlY29 is to be one of the largest manufacturing units at a single location in the country. We have a plan of about INR30 crores to INR40 crores of CapEx in this financial year from now. From onwards, maybe the same plan for the next year as well, about INR30 crores to INR40 crores. At around INR1,000 crores of revenue, about 2% is generally a maintenance CapEx in itself because we have to constantly upgrade our facilities and machineries and create the latest, what you say, protocols for our new upgraded rules and regulations as per cGMP. So some CapEx will always be there for the plant for perpetually. But for the next 2 years, we are looking at around INR35 crores to INR45 crores per year for the next 2 years.
  • Debt Debt disclosed
    Interest costs are slowly reducing. Our cash flows are getting better. So the interest is I mean we are using less and less of our limits. So that is also there. Of course, there are certain spurts in requirement when we do some procurement or when we do some penetration for certain states. But overall, the need for working capital is reduced. Interest rates have also -- the interest spending versus the top line has also drastically reduced. Yes, because of our credit improval also, we went from a BBB to a BBB+. Hopefully, we'll have better ratings in the coming years. So that has helped reduce the interest rate even further. And overall factors also has helped. So it's a part of accumulation of a lot of things and not just one thing in particular.
  • Liquidity Liquidity disclosed Working capital is INR170-175 crores, with almost 50% as cash on hand. Management expects positive cash flows to reduce reliance on bankers for working capital.
    So we are currently at now a run rate of around INR850 crores. We have a working capital of somewhere around INR170 crores, INR175 crores, which is not a high working capital for a company our size. We also have a lot of debtors. We have a good stock, and we have almost 50% of our working capital as cash on hand. So we will definitely -- will our absolute number of working capital increase? Yes, it will increase. No doubt about it at INR2,000 crores or INR3,000 crores of revenue. Of course, we're going to have a higher working capital, but that would be in line with most manufacturing companies. Hopefully, we will have further positive cash flows, which will deter the requirement of higher working capital need from other bankers.

Guidance & targets

Revenue

  • Blended Revenue Growth Revenue · next 3 years · High confidence 30-35%
    So a blended growth of somewhere around 35% to 30% for the next 3 years is kind of on the charts and it's going to be a combination of all the new brands and our existing ones, plus the increase in the capacities that we are building currently at our own facility.

    — Fredun Medhora

  • New Age Brands Growth Revenue · year-on-year · High confidence 35-45%
    One is our new age brands, which are growing at around 35% to 45% year-on-year.

    — Fredun Medhora

  • Vintage Business Growth Revenue · year-on-year · High confidence 15-20%
    And our vintage business is growing at around 15% to 20% year-on-year.

    — Fredun Medhora

  • Fredun GX Line Growth Revenue · next 5 years · High confidence 25-35%
    We expect 25% to 35% growth in this business year-on-year, even for the next 5 years, we don't anticipate any hiccup because we are at a very small base.

    — Fredun Medhora

  • FY27 Revenue Revenue · this year · Medium confidence around INR800 crores
    This year, our target was somewhere around INR800 crores. I think we are in line to achieve that. We will cross that hopefully.

    — Fredun Medhora

  • Pet Care Business Revenue Revenue · within 3-3.5 years · High confidence INR100 crore
    So that itself, we are planning to be INR100 crore say within 3 years from launching or within 3.5 years from launching our plants that we are building right now for increasing functional food capacity.

    — Fredun Medhora

  • Pet Care Overall Growth Revenue · next 3-4 years · High confidence 40-50%
    So overall, we are looking, again, at 40% to 50% growth in those numbers for the next 3, 4 years.

    — Fredun Medhora

  • Functional Foods Revenue Revenue · this year · High confidence INR18-24 crores
    Our functional foods this year, we are looking at around INR18 crores to INR24 crores to sell only functional foods, but that will also include what we are doing right now as a product basket.

    — Fredun Medhora

Capex

  • Annual CapEx Capex · FY27 · High confidence INR30-40 crores
    We have a plan of about INR30 crores to INR40 crores of CapEx in this financial year from now.

    — Fredun Medhora

  • Annual CapEx Capex · FY28 · High confidence INR30-40 crores
    From onwards, maybe the same plan for the next year as well, about INR30 crores to INR40 crores.

    — Fredun Medhora

  • Annual CapEx Capex · next 2 years · High confidence INR35-45 crores
    But for the next 2 years, we are looking at around INR35 crores to INR45 crores per year for the next 2 years.

    — Fredun Medhora

Inventory

  • Inventory Days Inventory · within next 4 quarters · High confidence 120 days

    From 140-135 days today

    So that just shows that we are rationalizing. We are looking at around 140, 135 days of inventory. Hopefully, within the next 4 quarters, it will come to around 120 days. It will always hover between 110 to 125 days because of the nature of the business and the number of SKUs that we have.

    — Fredun Medhora

Profitability

  • EBIT Margin Profitability · within next 12 quarters · Medium confidence near 12-13%
    But we are on line that within the next, say, 12 quarters, we should be probably near that number.

    — Fredun Medhora

What to watch in Q2 FY27

Blended Revenue Growth

next quarter
Current 30-35% projected for next 3 years
Target Maintain 30-35% growth

Why it matters

Sustained high growth is key to the investment thesis, especially from new age brands and vintage business.

So a blended growth of somewhere around 35% to 30% for the next 3 years is kind of on the charts and it's going to be a combination of all the new brands and our existing ones, plus the increase in the capacities that we are building currently at our own facility.

Q&A highlights

7 direct, 1 evasive
Future Growth Trajectory Direct
So a blended growth of somewhere around 35% to 30% for the next 3 years is kind of on the charts and it's going to be a combination of all the new brands and our existing ones, plus the increase in the capacities that we are building currently at our own facility.

Management provided specific blended and segment-wise growth targets for the medium term, indicating confidence in sustained expansion.

Asked by Vinod Shah

Fredun GX Domestic Opportunity Direct
We expect 25% to 35% growth in this business year-on-year, even for the next 5 years, we don't anticipate any hiccup because we are at a very small base.

Highlights the significant growth potential and long-term visibility for a key product line, Fredun GX, despite its current small base.

Asked by Mayur Parikh

Wagr.in Pet Care Platform Development Direct
We are creating a pet parenting platform. It is not just an e-commerce platform. Many people have started now latching on to it and started changing their websites to calling pet parenting. But we will have we are already having a list of breeders, a list of trainers, a list of groomers, a list of dog walkers and a list of doctors, plus we have our own diagnostics.

Details the comprehensive strategy for the Wagr.in platform, indicating a broader vision beyond just e-commerce, which could drive significant future growth in the pet care segment.

Asked by Keshav Toshniwal

FY27 CapEx Plan Direct
We have a plan of about INR30 crores to INR40 crores of CapEx in this financial year from now. From onwards, maybe the same plan for the next year as well, about INR30 crores to INR40 crores. But for the next 2 years, we are looking at around INR35 crores to INR45 crores per year for the next 2 years.

Provides clear CapEx guidance for the current and next two fiscal years, signaling investment in manufacturing capacity expansion and upgrades.

Asked by Shreya Bajaj

Q1 Performance Drivers Direct
This time, we have got a slightly higher growth, yes, because during last year, the last quarter, because of the price fluctuation increase, we generally carry more stock. We, as a company, used to always have a slightly higher number of stock. We could book orders at old prices with our customers and got a better order book.

Explains the specific factors contributing to the unusually strong Q1 performance, providing context for the reported growth figures.

Asked by Nabendu Mondal

Working Capital and Interest Costs Direct
So we are currently at now a run rate of around INR850 crores. We have a working capital of somewhere around INR170 crores, INR175 crores, which is not a high working capital for a company our size. We also have a lot of debtors. We have a good stock, and we have almost 50% of our working capital as cash on hand. Interest costs are slowly reducing. Our cash flows are getting better. So the interest is I mean we are using less and less of our limits. Yes, because of our credit improval also, we went from a BBB to a BBB+.

Management clarified its comfortable working capital position and explained the reduction in interest costs due to improved cash flows and a credit rating upgrade, indicating financial health.

Asked by Khushi Jain, Ashish Malani

Inventory Management Direct
So that just shows that we are rationalizing. We are looking at around 140, 135 days of inventory. Hopefully, within the next 4 quarters, it will come to around 120 days. It will always hover between 110 to 125 days because of the nature of the business and the number of SKUs that we have.

Provides insight into inventory rationalization efforts and targets, which can impact efficiency and capital utilization.

Asked by Ashish Malani

FY27 Revenue and EBIT Margin Targets Evasive
This year, our target was somewhere around INR800 crores. I think we are in line to achieve that. We will cross that hopefully. INR1,000 crores, I do not want to comment. But we are on line that within the next, say, 12 quarters, we should be probably near that number [12-13% EBIT margin].

Management provided an internal revenue target for FY27 but was cautious about higher figures and gave a long-term, less precise timeline for EBIT margin improvement, suggesting potential conservatism or uncertainty.

Asked by Ketan Pathak

3 min read 6 chapters

Detailed narrative

Strong Q1 FY27 Performance Driven by Growth Across Segments

Fredun Pharma reported a robust Q1 FY27, with stand-alone total income surging 90.44% year-on-year to INR228.25 crores. This strong top-line growth translated into a 92.90% increase in EBITDA to INR32.78 crores, and a 94.63% rise in net profit to INR13.17 crores. The company's profitability also saw an uplift, with EBITDA margin expanding by 18 basis points to 14.36% and net profit margin improving by 12 basis points to 5.77%.

Ambitious Growth Projections for New Age and Vintage Businesses

Management outlined an ambitious growth trajectory, projecting a blended growth rate of 30-35% for the next three years. This growth is expected to be fueled by new age brands, which are currently expanding at 35-45% year-on-year, and the vintage business, growing at 15-20% year-on-year. The Fredun GX line, currently a INR100-110 crore business, is specifically targeted for 25-35% year-on-year growth over the next five years, leveraging its presence in 19 states and deeper penetration into Tier 2 and 4 cities.

Strategic Investment in Pet Care Ecosystem and Wagr.in Platform

Fredun Pharma is making significant strides in the pet care segment, with its Wagr.in platform evolving into a comprehensive pet parenting hub. Beyond e-commerce, the platform integrates services like diagnostics, a network of breeders, trainers, groomers, and doctors, and is also tying up with pet blood collection services. The company aims for its pet care business to achieve INR100 crore revenue within 3-3.5 years from launch or plant building, with overall pet care growth projected at 40-50% for the next 3-4 years, supported by the launch of cat biscuits in the next 6-7 months.

Planned CapEx for Manufacturing Capacity Expansion

To support its aggressive growth plans, Fredun Pharma has earmarked a CapEx of INR30-40 crores for the current financial year (FY27) and a similar amount for FY28. Over the next two years, the annual CapEx is expected to be in the range of INR35-45 crores. This investment is strategically aimed at making the company one of the largest manufacturing units at a single location by the end of December 2028 or early 2029, alongside continuous upgrades to meet cGMP protocols.

Optimized Working Capital and Reduced Interest Costs

The company reported a working capital of INR170-175 crores against a run rate of INR850 crores, with nearly 50% of this held as cash on hand, indicating a comfortable liquidity position. Interest costs are gradually reducing due to improved cash flows and a recent credit rating upgrade from BBB to BBB+. Furthermore, inventory days have been rationalized, decreasing by almost 50% in the last two years, with a target to further reduce them to around 120 days from the current 140-135 days within the next four quarters.

Conservative FY27 Revenue Target and Long-Term Margin Outlook

For FY27, Fredun Pharma has an internal revenue target of around INR800 crores, which management expects to surpass, though they refrained from commenting on a more ambitious INR1,000 crore target. Regarding profitability, while no immediate EBIT margin target was provided, management indicated that the company should be 'near 12-13%' within the next 12 quarters. This improvement is expected to be driven by a favorable product mix, with segments like Dermaceutics boasting 70-75% gross margins and Pet Care at 45-55%.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Healthcare earnings calls