Sai Life — Q3 FY26 earnings call

Call held 6 Feb 2026

Management summary

Sai Life Sciences Limited reported a robust Q3 FY26, with revenue growing 27% YoY to INR 556 crores and EBITDA surging 54% YoY to INR 191 crores, achieving a 34% margin. For the nine-month period, revenue increased 43% YoY to INR 1,590 crores, and EBITDA grew 79% YoY to INR 472 crores, reaching a 30% margin. The company is ahead of schedule on its 28-30% EBITDA margin target and is progressing well with significant capacity expansions across its R&D and manufacturing facilities, driven by strong demand and strategic customer partnerships.

Highlights

  • Strong financial performance with Q3 FY26 revenue growth of 27% YoY to INR 556 crores.

  • Significant EBITDA expansion in Q3 FY26 by 54% YoY to INR 191 crores, achieving a 34% margin.

  • Nine-month FY26 revenue grew 43% YoY to INR 1,590 crores, and EBITDA grew 79% YoY to INR 472 crores, with margins at 30%.

  • CDMO business contributed 65% of revenues and grew 31%, while CRO grew 19%, demonstrating broad-based growth.

  • Capital expenditure programs are firmly on track, with significant capacity expansions planned for R&D, manufacturing, peptide, OEB labs, and animal health facilities by FY27.

Key financials

2 periods

Q3 FY26

  • Revenue
    ₹556 Cr
    YoY +27%
  • EBITDA
    ₹191 Cr
    YoY +54%
  • EBITDA Margin
    34%
  • PAT
    ₹100 Cr
    YoY +86%

9M FY26

  • Revenue
    ₹1,590 Cr
    YoY +43%
  • EBITDA
    ₹472 Cr
    YoY +79%
  • EBITDA Margin
    30%
  • PAT
    ₹245 Cr
    YoY +199%

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

SegmentRevenue ContributionRevenue Growth
CDMO65%31%
CRO35%19%

Capital allocation

high confidence
  • Capex ₹405 Cr
    • R&D expansion at Unit 8, Hyderabad (200 fume hoods)
    • Civil infrastructure for process R&D building (doubling capacity)
    • Peptide process development and pilot facility
    • OEB laboratories for process development
    • Bidar manufacturing capacity expansion (450 KL total, 70% increase)
    • Phase I Animal health facility ₹50 Cr
    • Next phase of Animal health facility ₹70 Cr
    • New site in Hyderabad (non-GMP, peptide, GMP capacity)
    From Krishna Kanumuri: "Our capital expenditure programs remain firmly on track. The first phase of R&D expansion at our recently acquired site in Hyderabad, Unit 8, is scheduled to commission in Q4 FY '26 with about 200 fume hoods for discovery chemistry. The civil infrastructure for our R&D building for our process facility is on track and will be commissioned by September '26, doubling our total process R&D capacity. Our peptide process development and pilot facility is also targeted for September '26 to significantly expand both our discovery and development peptide capabilities up to pilot scale. Additionally, our OEB laboratories for process development are on schedule to be completed October '26. This is in addition to what is already operational to significantly enhance our ADC capabilities both for discovery and clinical supply. Our Bidar manufacturing capacity expansion is also on track. We intend to add 225 KL by June and another 225 KL by the fourth quarter of FY '27, almost increasing our capacity by 70% in manufacturing. Our Phase I of Animal health is targeted to be completed by March '27 enabling validation activities to commence our API production for veterinary products at this point." and Siva Chittor: "As of date, we have invested approximately INR405 crores towards our fiscal '26 capital commitments." and Siva Chittor: "The current investment, Ameya, is less than INR50 crores at this time on that site. It will we will have a phase expansion plan. There will be some additional capex. We will probably invest close to around INR70 crores, INR75 crores as the next phase."

Guidance & targets

Profitability

  • EBITDA Margin Profitability · Ongoing · High confidence 28-30%
    With nine-month fiscal '26 EBITDA at 30%, we are on course to achieving our stated goal of 28% to 30% EBITDA ahead of schedule. We expect to sustain this margin range of 28% to 30% to enable us to maximize growth while managing growth-related challenges and optimizing margins.

    — Siva Chittor

Business Mix

  • CDMO to CRO Revenue Mix Business Mix · Ongoing · Medium confidence 65-35% to 60-40%
    We believe broad mix between the CDMO and the CRO business will remain around the 65-35% to 60-40%. In one particular year, the CDMO can grow faster, in another year the CRO could grow faster. So that variability can remain, but broadly at this point in time, we believe they will remain within this range.

    — Siva Chittor

Capacity

  • Bidar Manufacturing Capacity Increase Capacity · by Q4 FY27 · High confidence 70%
    Our Bidar manufacturing capacity expansion is also on track. We intend to add 225 KL by June and another 225 KL by the fourth quarter of FY '27, almost increasing our capacity by 70% in manufacturing.

    — Krishna Kanumuri

  • Animal Health Phase I Completion Capacity · March '27 · High confidence Completed
    Our Phase I of Animal health is targeted to be completed by March '27 enabling validation activities to commence our API production for veterinary products at this point.

    — Krishna Kanumuri

  • Unit 8 R&D Expansion Commissioning Capacity · Q4 FY '26 · High confidence Commissioned
    The first phase of R&D expansion at our recently acquired site in Hyderabad, Unit 8, is scheduled to commission in Q4 FY '26 with about 200 fume hoods for discovery chemistry.

    — Krishna Kanumuri

  • Process Facility R&D Building Commissioning Capacity · September '26 · High confidence Commissioned
    The civil infrastructure for our R&D building for our process facility is on track and will be commissioned by September '26, doubling our total process R&D capacity.

    — Krishna Kanumuri

  • Peptide Process Development and Pilot Facility Expansion Capacity · September '26 · High confidence Expanded to pilot scale
    Our peptide process development and pilot facility is also targeted for September '26 to significantly expand both our discovery and development peptide capabilities up to pilot scale.

    — Krishna Kanumuri

  • OEB Laboratories Completion Capacity · October '26 · High confidence Completed
    Additionally, our OEB laboratories for process development are on schedule to be completed October '26.

    — Krishna Kanumuri

What to watch in Q4 FY26

Bidar Manufacturing Capacity Expansion

by June
Current On track for 70% increase
Target 225 KL added

Why it matters

This is a significant capacity addition that will directly impact future manufacturing capabilities and revenue potential.

Our Bidar manufacturing capacity expansion is also on track. We intend to add 225 KL by June and another 225 KL by the fourth quarter of FY '27, almost increasing our capacity by 70% in manufacturing.

Risks & concerns

  • Weak biotech funding environment

    medium

    Biotech funding is expected to remain weak for the next 18-24 months, though large pharma engagements are currently providing cover.

    Management acknowledged

  • Industry-wide inventory destocking

    medium

    While not currently impacting Sai Life, destocking is an inherent risk in the CDMO business, mitigated by a broad portfolio.

    Management acknowledged

  • Balancing growth investments with margin optimization

    low

    The company prioritizes investing for long-term growth and market share, which may involve upfront costs and balancing with margin targets.

    Management acknowledged

Q&A highlights

6 direct, 1 evasive
Reversal of prior provision Direct
Yes, you're correct Binay. So we will do this as we progress in our production on the commercial molecule.

Confirms the reversal of a prior provision and links it to commercial molecule production, impacting future financials.

Asked by Binay Singh, Morgan Stanley

Sustainability of gross margin expansion and impact of consultancy charge Partial
Yes, but we are also working on additional things. I think if you look at the presentation, we talked about working on another assignment to get Al enablement from a business perspective. So that also will help us, this is an investment we will make as we start this current quarter and head into the next financial year. So you will have some bits of this, but we are still with the 28% to 30% guidance after including all of this.

Addresses the sustainability of margin expansion, acknowledging the one-time benefits but also highlighting new investments in AI enablement that will support future margins.

Asked by Binay Singh, Morgan Stanley

Growth being pulled forward from future years Direct
As we mentioned last quarter Binay, there is nothing that we have pulled forward from the prior quarter. This is a broad-based guidance of 15% to 20%, not specific to a specific year, but we are very confident and bullish about where the business is today.

Clarifies that the strong current year growth is not a pull-forward from future periods, reinforcing confidence in the underlying business momentum.

Asked by Binay Singh, Morgan Stanley

CRO growth despite weak biotech funding Direct
Ameya, one factor that has kind of helped us is the growth we have seen with the large pharma over the last four- five years. Our pharma component within the CRO business was probably negligible, maybe if I you look back five years. But it has steadily increased over a period and that increase is what is kind of helping us grow from over the last two, three years.

Explains the resilience of CRO growth by attributing it to increased engagement with large pharma customers, offsetting weakness in biotech funding.

Asked by Ameya Chalke, JM Financial

Scope for further margin improvement and balancing growth vs. margin Direct
I'm not saying there's no scope for improvement. What I'm saying that there's always a preference to continue to invest and grow and increase your market share as well. So that investment could be different type of technologies, which have a long ramp up time. It could be higher quality people which will take time to settle in. So question is we have to optimize between growth and margin there. So I am just trying to kind of be pragmatic about giving an approach rather than just saying that there is no scope for cost improvement.

Management clarifies its strategic approach to balancing margin optimization with investments for long-term growth and market share, indicating a pragmatic view rather than aggressive short-term margin maximization.

Asked by Ameya Chalke, JM Financial

Impact of Biosecure Act and shift from China to India Direct
So we've seen molecules shifting from China to India. We saw a fairly large tranche around the '23-'24 timeframe. If you actually look at our DRHP we actually mentioned the number of molecules we tech transferred. A significant portion of the molecules that we tech transferred during that phase was primarily a supply source diversification.

Confirms that the company has already benefited from supply chain diversification away from China, indicating a positive trend for Indian CDMOs.

Asked by Yash Doshi, Unifi Capital Private Limited

Ramp-up of new facilities and lessons from past capacity additions Direct
So the statement that I made with respect to sustaining the 28% to 30% without saying I will grow, I had also suffixed it by saying that this will also take care of growth related challenges which could be you know costs inefficiencies, that could get built, on account of upfronting people investments or operating expenditure investments.

Addresses concerns about capacity ramp-up by linking it to the sustained margin guidance, implying that potential inefficiencies from new capacity are factored into the long-term outlook.

Asked by Yash Doshi, Unifi Capital Private Limited

GLP-based product pipeline and commercial status Evasive
So Dhaval we don't comment on specific product pipeline. Other than two products that have already been launched, everything else is still in clinical pipeline. And you know who are the two players who are commercial at this time on the products. Ao anybody who is working today on it is right now working on a on a product that's not commercial yet. I'll leave it at that.

Management declined to provide specific details on the GLP product pipeline, indicating a lack of transparency on this specific area.

Asked by Dhaval Khut, Jefferies

3 min read 5 chapters

Detailed narrative

Strong Q3 and Nine-Month FY26 Financial Performance

Sai Life Sciences delivered a robust Q3 FY26, with total revenue growing 27% YoY to INR 556 crores. EBITDA for the quarter surged 54% YoY to INR 191 crores, resulting in a healthy 34% EBITDA margin. Profit after tax (PAT) also saw significant growth, up 86% YoY to INR 100 crores. For the nine-month period, revenues increased 43% YoY to INR 1,590 crores, and EBITDA grew 79% YoY to INR 472 crores, with margins expanding to 30% from 24% in the prior year, primarily due to operating leverage on employee costs (450 bps) and material margin improvement (100 bps). The company is well on track to achieve its stated 28-30% EBITDA margin goal.

CDMO and CRO Segment Performance

The CDMO business continues to perform strongly, contributing approximately 65% of the Q3 revenues and growing 31% YoY. Over 90% of CDMO revenues are derived from large pharma customers, and the company added 7 molecules to its late-phase and commercial pipeline during the financial year. The CRO segment, accounting for 35% of revenues, grew 19% YoY. This growth is largely driven by expanding engagements with large pharma customers and strategic investments in discovery capabilities, such as AI-based retrosynthesis tools and advanced photochemical platforms, which help deliver higher scientific value and shorten discovery timelines.

Extensive Capacity Expansion Initiatives

Sai Life Sciences has multiple capital expenditure programs firmly on track. The R&D expansion at Unit 8 in Hyderabad, adding 200 fume hoods, is scheduled for commissioning in Q4 FY26. The civil infrastructure for the process R&D building, which will double total process R&D capacity, is set for commissioning by September '26. A peptide process development and pilot facility will also be operational by September '26, and OEB laboratories by October '26. The Bidar manufacturing capacity is set to increase by 70% with the addition of 450 KL by Q4 FY27, and Phase I of the Animal Health facility will be completed by March '27. Additionally, a new mixed-use site in Hyderabad, featuring non-GMP, peptide, and GMP capacity, is expected to be operational within 18-24 months.

Strategic Focus on Long-Term Growth and Customer Partnerships

Management emphasized a strategy focused on sustainable growth, deepening customer partnerships, and creating long-term value. The company's ability to win commercial contracts is attributed to 15 years of trust-building, investments in specialized capabilities, and long-term relationships with large pharma innovators. They are adopting a 'technology first' approach to capacity expansion, ensuring facilities remain best-in-class rather than just adding capacity for short-term wins. An external consulting firm is defining an AI-first roadmap to increase automation and allow scientists to focus on high-value science, further enhancing productivity and efficiency.

Revenue Recognition and Industry Trends

The company's revenue recognition is based on completion, not dispatch, aligning with IFRS and Ind AS regulations. This allows for revenue recognition based on contractual milestones in certain cases. Regarding industry trends, management noted that India is increasingly a preferred destination for pharmaceutical outsourcing, leading to a rise in strategic conversations with global pharma innovators. While acknowledging general industry risks like inventory destocking, Sai Life Sciences mitigates this through a broad and diversified portfolio, focusing on adding multiple molecules to its pipeline rather than relying on a few large products.

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