Remus Pharma. — Q2 FY26 earnings call

Call held 11 Nov 2025

Management summary

Remus Pharma reported strong H1 FY26 results with consolidated revenue up 47% YoY to ₹400 crores, driven by growth in both standalone and subsidiary operations. The company is strategically shifting towards higher-margin B2C segments, with its share increasing from 4% to 13%. However, consolidated margins remain lower due to the significant contribution from the high-volume, low-margin US RLD distribution business, which accounts for approximately 80% of total revenue.

Highlights

  • Consolidated revenue grew 47% YoY to ₹400 crores.

  • Standalone revenue grew 24% YoY to ₹47 crores.

  • Consolidated operational EBITDA increased 28% YoY to ₹27 crores, with standalone EBITDA up 31% to ₹15 crores.

  • B2C business revenue share significantly increased from 4% last year to 13% in H1 FY26, with a target of 18-20% by year-end.

  • Secured 37 new approvals in the ASEAN region and initiated product registration in Algeria, expanding international footprint.

Concerns

  • Consolidated EBITDA margin of 6.75% and PAT margin of 5.4% are significantly lower than standalone margins (31.56% EBITDA, 25.59% PAT) due to the high-volume, low-margin US subsidiary business.

  • The company is an 'asset-light' model without in-house manufacturing, which raised analyst questions regarding long-term margin confidence.

Key financials

  1. Consolidated Revenue ₹400 Cr +47%YoY
  2. Consolidated Operational EBITDA ₹27 Cr +28%YoY
  3. Consolidated EBITDA Margin 6.8%
  4. Consolidated Net Profit (PAT) ₹22 Cr +21%YoY
  5. Consolidated PAT Margin 5.4%
  6. Standalone Revenue ₹47 Cr +24%YoY
  7. Standalone Operational EBITDA ₹15 Cr +31%YoY
  8. Standalone EBITDA Margin 31.6%
  9. Standalone Net Profit (PAT) ₹12 Cr +31%YoY
  10. Standalone PAT Margin 25.6%
  11. PAT after minority interest ₹17.5 Cr +34%YoY

What they filed

Q4 FY26: revenue up 30.6%, net profit up 44.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY23Q4 FY23Q2 FY24Q4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue20 25 29 36 38 +90%41 +64%47 +62%47 +31%
EBITDA5 6 9 12 11 +120%15 +150%15 +67%15 +25%
Net profit4 4 8 9 9 +125%11 +175%12 +50%13 +44%
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

  • B2C Business
    13% Revenue Share
  • B2B Business
    87% Revenue Share
  • Emerging Market B2B
    32% EBITDA Margin
  • Emerging Market B2C
    35% EBITDA Margin
  • US Subsidiary (RLD Distribution)
    80% Revenue Share (Consolidated)40% Revenue Growth (H1 YoY)

Capital allocation

high confidence
  • M&A US Subsidiary (Espee) Acquisition · Integrated

    To provide RLDs (Reference Listed Drugs) to pharmaceutical conglomerates for study, research, and development purposes, operating on a high-volume, high-ROE, asset-light model.

    Acquired in 2024, 80-90% of the investment has been recovered through profits, contributing significantly to consolidated revenue but with lower EBITDA margins.

    Yes. So, US subsidiary, as I mentioned, it is into RLD distribution services. So, RLD distribution is basically that they have been serving to all the big pharmaceutical conglomerates all over the world globally. So, they have been providing those products into the distribution of RLD for their study purpose, for their research purpose, for their development purpose. So, generally over there in this particular business model, the EBITDA margins are generally low. There are no losses that we are suffering. But generally, when we look at the mix of the EBITDA, we are getting from all the companies, it is comparatively low, whereas the turnover is comparatively higher. So, it is more of a high ROE focused business because there is no capital involved or there is no other like capital or funding infusion that is required. That is how is the business model for Espee is. Whereas on the emerging market, or I can say on the standalone side, the model is different because if you see the revenues have just had 47 crores for the standalone business, but the margins are around 12 crores on PAT level or I can say EBITDA level it is around 15 crores, which is stagnant or I can say it is growing. So, it is because of the mix that you are looking at and none of the subsidiaries like Espee or Relius, there is no losses that are present over there right now. ... Yes. So, just what Mr. Arpit was adding to that, that we acquired the subsidiary in 2024 and I think after that, since then we have been tracking the financials and I can say that we have almost like recovered 80 to 90% of our investment, what we have done to our profits.

Guidance & targets

Market Share

  • B2C Revenue Share Market Share · FY26 · Medium confidence 18-20%
    As we are talking about H1 right now, our B2C business growth grew from 4% last year to 13% for H1 so we are still waiting for considerable growth from 13% to probably 18 to 20% before the end of this financial year.

    — Arpit Shah

  • B2C Revenue Share Market Share · next 1.5 years · High confidence 20-25%
    So, Hitesh, I think considering at the pace that we are adding B2C in our portfolio, we look at at least this year and a year to come after we are looking at 20 to 25% of our B2C to be around 25% in next 1.5 year. That is what I can assure you on what we are doing right now.

    — Arpit Shah

Profitability

  • Consolidated PAT Margin Profitability · eventually · Medium confidence 8-10%
    So, as we are growing more towards our B2C market, the B2C subsidiaries as well as we are setting up our new subsidiary for the clinical trials research services. So, considering that as we move ahead, we are more positive on our H2 that those subsidiaries which we have incorporated and will be operational and will be adding to our margin. So, we are looking at a better percentage in future with at least moving ahead to what is 5% now. I think we can move ahead to 8-10% is something that we are eyeing.

    — Anjali Shah

Geographical Expansion

  • New Countries Added Geographical Expansion · this financial year · High confidence 3
    So, putting it for this year, this financial year we are looking at three countries to add on our subsidiaries.

    — Arpit Shah

What to watch in Q3 FY26

B2C Revenue Share Growth

End of FY26
Current 13% of H1 FY26 revenue
Target 18-20% by end of FY26

Why it matters

This is a key driver for overall margin improvement and reflects the success of the company's strategic shift.

As we are talking about H1 right now, our B2C business growth grew from 4% last year to 13% for H1 so we are still waiting for considerable growth from 13% to probably 18 to 20% before the end of this financial year.

Risks & concerns

  • Margin Dilution from US Subsidiary

    medium

    The US subsidiary's high-volume, low-margin RLD distribution business, contributing ~80% of consolidated revenue, significantly dilutes the overall consolidated EBITDA and PAT margins, making the company's profitability appear lower than its high-margin emerging market segments.

    So, roughly the proportion of revenue, I can say is around 80% from the US entity. ... So, RLD distribution is basically that they have been serving to all the big pharmaceutical conglomerates all over the world globally. So, they have been providing those products into the distribution of RLD for their study purpose, for their research purpose, for their development purpose. So, generally over there in this particular business model, the EBITDA margins are generally low.

    Analyst acknowledged

Q&A highlights

7 direct
Cost Competitiveness and Local Manufacturing in Africa Direct
Aachal, not all countries have those capabilities of having an in-house manufacturing and be self-reliant on manufacturing of pharma products. But I will consider it one of the countries I recently a month back I visited was Algeria where what we have been doing, yes they encourage a local manufacturing of the product there but at the same point of time a technical know-how is more important than any country who is manufacturing pharma products for which what we have been doing is we are doing a tech transfer and a licensing deal with them where every product that in future if they manufacture it at their end we get the royalties on the product that they sell along with that we get a licensing fee and a know-how transfer as well.

Analyst questioned the company's ability to compete on cost against local manufacturers in Africa, prompting management to explain their strategy of tech transfer, licensing, and focus on niche products for private markets.

Asked by Aachal Jalan

Blended PAT Margin Trajectory Direct
So, as we are growing more towards our B2C market, the B2C subsidiaries as well as we are setting up our new subsidiary for the clinical trials research services. So, considering that as we move ahead, we are more positive on our H2 that those subsidiaries which we have incorporated and will be operational and will be adding to our margin. So, we are looking at a better percentage in future with at least moving ahead to what is 5% now. I think we can move ahead to 8-10% is something that we are eyeing.

Analyst sought clarity on the future blended PAT margin, given the current 5%, and management provided a target range of 8-10% driven by strategic shifts.

Asked by Aachal Jalan

Confidence in Margins without Manufacturing Plants Direct
I think what we stand out differently is we have a light asset model where it's not only about manufacturing it's about what kind of products, what kind of IPs that we have created and what trademarks that we have created in the market matters a lot. So, just to give you a fair example that what products we sell all those proprietaries are ours it is not about any other one's property so those hold a lot of value when it comes to when we go in the market be it our trademarks be it our brands or be it our sales channels.

Analyst challenged the company's ability to sustain high margins as an 'asset-light' trading business, leading management to emphasize the value of their proprietary IPs, trademarks, and brand awareness.

Asked by Aachal Jalan

EBITDA Margin Difference between B2B and B2C Segments Direct
So, just to give you an idea, so on our emerging market portfolio which is Remus standalone and our Bolivian Guatemalan subsidiary, so currently our B2B margin which we have been presenting our numbers for past few years, our EBITDA margin is around 32 to 33% which we continue that we will be in that range on the B2B side and on the B2C side, as of now we have initiated our revenues right now which we are already looking 35% plus EBITDA.

Analyst inquired about the margin differential between B2B and B2C, and management provided specific EBITDA margin ranges for each segment in emerging markets.

Asked by Hitesh Agarwal

Impact of US Subsidiary on Consolidated Margins Direct
So, roughly the proportion of revenue, I can say is around 80% from the US entity. ... So, RLD distribution is basically that they have been serving to all the big pharmaceutical conglomerates all over the world globally. So, they have been providing those products into the distribution of RLD for their study purpose, for their research purpose, for their development purpose. So, generally over there in this particular business model, the EBITDA margins are generally low.

Analyst questioned the low consolidated EBITDA margin (7%) despite high segment margins, leading management to reveal that the US subsidiary, a high-volume, low-margin business, accounts for ~80% of consolidated revenue, thus diluting overall margins.

Asked by Rahil

US Subsidiary Acquisition and Investment Recovery Direct
Yes. So, just what Mr. Arpit was adding to that, that we acquired the subsidiary in 2024 and I think after that, since then we have been tracking the financials and I can say that we have almost like recovered 80 to 90% of our investment, what we have done to our profits.

Management clarified the financial success of the US subsidiary acquisition, stating that 80-90% of the investment has already been recovered through profits, highlighting its high ROE nature.

Asked by Rahil

Future Revenue Mix Shift between US and Emerging Markets Direct
So, yes, we think that emerging will increase. But again, that is what I have said that also on the US side will also increase, right? I am not saying that that will be stable. So, emerging will increase by the same point of time our US subsidiary revenues will also increase. So, yes, if you say from 80, do you think emerging will be 25 or 30? Yes, I agree to it on that question.

Analyst probed whether the US subsidiary's dominant revenue share (80%) would decrease as emerging markets grow, and management confirmed an expected shift, with emerging markets taking a larger proportion over time.

Asked by Rahil

2 min read 6 chapters

Detailed narrative

Strong H1 FY26 Financial Performance

Remus Pharmaceuticals reported robust financial results for H1 FY26. On a standalone basis, revenue from operations stood at ₹47 crores, reflecting a 24% year-on-year growth. Operational EBITDA reached ₹15 crores, marking a 31% increase with EBITDA margins of 31.56%. Net profit was ₹12 crores, representing a 31% year-on-year increase and a PAT margin of 25.59%. On a consolidated basis, revenue from operations was ₹400 crores, a 47% growth year-on-year, with operational EBITDA at ₹27 crores, up 28%.

Strategic Shift Towards High-Margin B2C Segment

The company is actively pursuing a strategic shift towards higher-margin B2C segments. The B2C business demonstrated strong momentum, increasing its revenue share from 4% last year to 13% in H1 FY26. Management aims to further grow the B2C contribution to 18-20% by the end of FY26 and 20-25% within the next 1.5 years, anticipating better gross margins from this segment compared to the traditional B2B business.

Dual Business Model: Emerging Markets vs. US Subsidiary

Remus operates with a dual business model. Its emerging market segments, including standalone operations and subsidiaries in Bolivia and Guatemala, focus on niche, high-margin products, achieving B2B EBITDA margins of 32-33% and B2C EBITDA margins of 35%+. In contrast, the US subsidiary (Espee), which accounts for approximately 80% of consolidated revenue, specializes in high-volume, lower-margin RLD (Reference Listed Drug) distribution, primarily serving big pharmaceutical conglomerates for research purposes. This mix results in a consolidated EBITDA margin of 6.75% and a PAT margin of 5.4%.

US Subsidiary's Role and Investment Recovery

The US subsidiary, acquired in 2024, is a key component of Remus's strategy, despite its lower margin profile. It functions as a high-ROE, asset-light business, requiring no significant capital infusion. Management highlighted that 80-90% of the investment made in acquiring this subsidiary has already been recovered through profits, underscoring its financial efficiency and contribution to overall turnover.

International Expansion and Product Portfolio Diversification

Remus is actively expanding its international footprint and diversifying its product portfolio. The company successfully participated in a national tender in Nicaragua, securing awards for two key products. Product registration activities have been initiated in the Algerian market, and 37 new approvals were secured in the ASEAN region. A significant milestone was the launch of Rivastigmine patches across multiple markets, marking entry into a new therapeutic segment. Over 95% of the company's exports are from advanced and niche formulations.

Future Profitability and Margin Improvement Targets

While the consolidated PAT margin for H1 FY26 stood at 5.4%, management is optimistic about future improvements, eyeing a consolidated PAT margin of 8-10% eventually. This improvement is expected to be driven by the increasing contribution of the higher-margin B2C business and the operationalization of new subsidiaries, with potential realization within the next 1-2 years. The company also anticipates a shift in revenue mix, with emerging markets gradually increasing their share relative to the US subsidiary over time.

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

More Healthcare earnings calls