Sai Life — Q1 FY26 earnings call

Call held 8 Aug 2025

Management summary

Sai Life Sciences delivered an exceptionally strong start to FY26, characterized by triple-digit growth in its CDMO segment and a significant turnaround in bottom-line profitability. Management is aggressively investing in capacity, with a ₹700 crore capex plan for the current year to double Process R&D and expand manufacturing by 80% by 2027. The company is successfully pivoting toward high-growth modalities like ADCs and oligonucleotides while benefiting from 'China Plus One' diversification trends.

Highlights

  • Revenue reached ₹496 crores, a 77% YoY increase driven by strong CDMO performance

  • EBITDA surged 305% YoY to ₹125 crores, with margins expanding 1,400 bps to 25%

  • CDMO business grew 113% YoY to ₹314 crores; CRO business grew 38% to ₹182 crores

  • Turnaround in profitability with PAT of ₹60 crores vs a loss of ₹13 crores in Q1 FY25

  • Aggressive Capex plan of ₹700 crores for FY26 to support capacity expansion

  • Manufacturing capacity targeted to increase by 80% by 2027 (adding ~450-550 KL)

  • Process R&D capacity expected to double by next year

  • Onboarded 250+ scientists and technical professionals during the quarter

Key financials

  1. Revenue ₹496 Cr +77%YoY
  2. EBITDA ₹125 Cr +305%YoY
  3. EBITDA Margin 25%
  4. PAT ₹60 Cr
  5. Capex ₹134 Cr

What they filed

Q1 FY27: revenue up 13.3%, net profit up 22.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue382 429 567 483 527 +38%549 +28%594 +5%547 +13%
EBITDA101 111 154 113 140 +39%179 +61%168 +9%140 +24%
Net profit44 51 90 58 83 +89%98 +92%103 +14%71 +22%
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
₹496 Cr Total
  • CDMO ₹314 Cr 63.3%
  • CRO ₹182 Cr 36.7%

Guidance & targets

Revenue

  • Average Growth Rate Revenue · next 3 to 5 years · High confidence 15%
    What we are committing is a 3 to 5 year, 15% average growth rate.

    — Siva Chittor, CFO

Margin

  • EBITDA Margin Margin · Long Term · Medium confidence 28%-30%
    we believe that this business can be scaled to achieve 28%-30% margins as our revenues grow.

    — Siva Chittor, CFO

Capex

  • Annual Capex Capex · FY26 · High confidence ₹700 crores
    700 Crores CAPEX is for this year.

    — Siva Chittor, CFO

Capacity

  • Manufacturing Capacity Increase Capacity · by 2027 · High confidence 80%
    manufacturing capacity will go up by 80% by 2027.

    — Krishna Kanumuri, CEO

  • Process R&D Capacity Capacity · by next year · High confidence Double
    We are doubling our process R&D capacity by next year.

    — Krishna Kanumuri, CEO

Risks & concerns

  • CDMO Revenue Lumpiness

    medium

    Management reiterated that the CDMO business is inherently lumpy and should be reviewed on a long-term rather than quarterly basis.

    Management acknowledged

  • Clinical Trial Failures

    medium

    The Phase III pipeline saw a reduction from 10 to 6 molecules, with management confirming some were due to clinical trial failures.

    Both acknowledged

  • Geopolitical and Reshoring Pressures

    low

    Management believes US reshoring will focus on final formulations/fill-finish, while R&D and intermediate manufacturing will remain in Asia.

    Analyst downplayed

Areas of evasion (2)

  • Specific molecule details in the Phase III pipeline
  • Total scientist headcount across segments (promised to send separately)

Q&A highlights

3 direct
Seasonality and H2 vs H1 Performance Direct
that's a general trend that we have seen across the years and we believe that trend will continue, but I am not giving any specific guidance for this year.

Confirms that the strong Q1 is not a one-off and the historical trend of a stronger second half remains intact.

Asked by Binay, Morgan Stanley

China Plus One and IP Concerns Direct
the fear in China is the IP aspect of it... the Indian industry is set to benefit. I think Pharma is taking a long view that we will build these partnerships, and it's going to take years for us.

Highlights that IP security, rather than just cost or scale, is becoming a primary driver for shifting business from China to India.

Asked by Nikhil Mathur, HDFC Mutual Fund

Capacity Utilization and Asset Turns Direct
our capacity utilization for the last quarter was around 77%... our belief is that we will be able to do on a net basis between 1.2 to 1.4 [asset turns].

Provides clarity on current operational efficiency and the expected revenue generation potential of new capital investments.

Asked by Anandha Padmanabhan, PGIM AMC

2 min read 5 chapters

Detailed narrative

Explosive Growth and Margin Expansion

Sai Life reported a 77% YoY revenue jump to ₹496 crores, underpinned by a 113% surge in the CDMO segment. This scale led to significant operating leverage, with EBITDA margins expanding from 11% to 25% YoY. Management is confident that as revenues continue to scale, they can reach a steady-state EBITDA margin of 28-30%.

Aggressive Capacity Roadmap

The company is in the midst of a massive expansion phase, targeting an 80% increase in manufacturing capacity by 2027. This includes adding two new production blocks by the second half of next year. Furthermore, Process R&D capacity is set to double by next year, and Discovery space will increase by 30% by the end of FY26 to support complex integrated programs.

Strategic Pivot to New Modalities

Sai Life is moving beyond traditional small molecules into high-value modalities including ADCs, oligonucleotides, peptides, and lipids. Management noted they are already working on late-phase commercial assets for ADCs and are 'fairly far ahead' in oligonucleotides. These modalities are expected to be key drivers of future revenue and margin profile.

China Plus One and IP Security

Geopolitical shifts are providing a tailwind as global pharma innovators seek to diversify supply chains away from China. Management highlighted that IP concerns in China, where local firms are becoming competitors in discovery, are driving customers toward Indian partnerships. They believe this is a long-term structural shift that will take years to fully play out.

Pipeline Dynamics and Clinical Risks

While the overall business is growing, the late-stage pipeline saw some volatility, with the number of Phase III/pre-registration molecules dropping to 6 from a previous 10. This was a net result of two molecules moving to commercial stage and others being dropped due to clinical trial failures. Management emphasized that such failures are an inherent risk in the CDMO model and outside their direct control.

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