Shilpa Medicare Limited — Q3 FY26 earnings call

Call held 6 Feb 2026

Management summary

Shilpa Medicare delivered a strong Q3 FY26, reporting its highest ever quarterly revenue and EBITDA, driven by robust growth across API and Formulation segments. The company demonstrated significant margin expansion and improved ROCE, signaling successful monetization of past investments. Strategic progress was highlighted in CDMO, complex pipeline, and biologics, with several key projects nearing commercialization or advancing in clinical stages, despite some confidentiality constraints on specific product details.

Highlights

  • Reported highest ever quarterly revenue of ₹411 crores, recording a growth of 28% year-on-year.

  • Achieved highest ever quarterly EBITDA at ₹115 crores, reflecting a robust growth of 41% year-on-year.

  • EBITDA margins for the quarter were at a healthy 28%, up from 26% last year, driven by increased revenue and positive operating leverage.

  • 9-month PAT stood at ₹146 crores, nearly double the full year PAT of FY '25, indicating accelerated growth.

  • Adjusted ROCE (excluding Biologics and NBE investments) significantly improved from 3.5% in FY '23 to over 17% in the first 9 months period.

Concerns

  • An exceptional item of ₹13 crores pre-tax was incurred due to a change in Labour Code implemented by the Government of India.

  • Management declined to provide specific details on the scale and potential revenue of a US FDA-approved CDMO molecule due to confidentiality, limiting investor visibility.

  • Analyst noted a lack of substantial growth in non-captive API segment and questioned being late on certain oncology API filings, which management acknowledged as a 'very right observation'.

Key financials

2 periods

Headline

  • Revenue
    ₹411 Cr
    YoY +28%
  • EBITDA
    ₹115 Cr
    YoY +41%
  • EBITDA Margin
    28%
    YoY +2%
  • PAT
    ₹55 Cr

9M

  • Revenue
    ₹1,110 Cr
    YoY +14%
  • EBITDA Margin
    29%
    YoY +3%
  • PAT
    ₹146 Cr
  • Adjusted ROCE
    17%

What they filed

Q1 FY27: revenue up 45.2%, net profit up 114.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue344 319 331 321 370 +8%410 +29%437 +32%466 +45%
EBITDA86 81 79 91 108 +26%114 +41%120 +52%136 +49%
Net profit18 32 15 47 44 +144%45 +41%108 +620%101 +115%
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

  • Non-captive API
    ₹186 Cr Revenue
  • Captive API (including internal support)
    ₹243 Cr Revenue
  • Formulation
    ₹177 Cr Revenue
  • EU Formulation
    ₹73 Cr Revenue
  • Formulation (ex-licensing)
    1% QoQ Growth83% 9M Growth

Capital allocation

high confidence
  • Capex ₹87 Cr internal accruals
    • Large-scale peptide manufacturing capacity ₹40 Cr
    • Dedicated commercial block for US NCE program
    • GMP facility for ADC manufacturing
    Our interest outgo has seen reduction year-on-year, and we believe it has now stabilized at the current quarter run rate for the near future, as we expect to fund our capex program mainly by our internal accruals.
  • Debt Net ₹625 Cr
    So, as on 31st December, our net debt was about INR625 crores.

Guidance & targets

Capacity

  • Dedicated commercial block for US NCE program commissioning Capacity · Q4 FY26 · High confidence Q4 FY '26
    And the third U.S. NCE program, which is partnered with Unicycive Therapeutics, for which we are constructing a dedicated commercial block, is likely to get commissioned in Q4 FY '26

    — Keshav Bhutada

  • Large-scale peptide manufacturing capacity completion Capacity · H2 FY27 · High confidence H2 FY '27
    On the capex, the company is planning to build a large-scale peptide manufacturing capacity, for which, the work has already started, and we are planning to complete this capex in second half of FY '27.

    — Keshav Bhutada

  • GMP facility for ADC manufacturing commissioning Capacity · Q4 FY26 · High confidence Q4 FY '26
    GMP facility for our ADC manufacturing, we are planning to commission in Q4 FY '26.

    — Keshav Bhutada

Product Launch

  • Third US NCE program exhibit batches Product Launch · Q1 FY27 · High confidence Q1 FY '27
    and exhibit batches will be taken in Q1 FY '27.

    — Keshav Bhutada

  • Rotigotine (transdermal patch) launch Product Launch · FY27 · High confidence FY '27
    And we will be planning to launch this product with our partner in FY '27.

    — Keshav Bhutada

  • Ondansetron long-acting injection commercialization (India) Product Launch · H1 FY27 · High confidence H1 FY '27
    and the product is already filed in India, and we are planning to commercialize in first half of FY '27.

    — Keshav Bhutada

  • New Formulation launches in Europe Product Launch · Next financial year · High confidence 2
    In the next financial year, there will be 2 new launches, which will be happening in Europe market on Formulation side.

    — Keshav Bhutada

Product Development

  • Oncology API validation batches completion Product Development · Q4 FY26 · High confidence Q4 FY '26
    and the validation batches will be completed in Q4 FY '26.

    — Keshav Bhutada

  • Peptide (Semaglutide) scale-up and validation batches completion Product Development · Q4 FY26 / Q1 FY27 · High confidence Q4 FY '26 / Q1 FY '27
    The planned scale-up and validation batches are initiated, which are likely to be completed by Q4 FY'26/Q1 FY '27.

    — Keshav Bhutada

  • NorUDCA Europe human studies start Product Development · FY27 · Medium confidence Next financial year
    We are also planning to take NorUDCA to global markets of Europe and U.S. for which we are planning to start human studies for Europe in next financial year.

    — Keshav Bhutada

  • Complex injectable registration batches completion Product Development · Q4 FY26 · High confidence Q4 FY '26
    On the development side, we have completed scale-up batches for a new complex injectable product, and we are planning to complete registration batches by Q4 FY '26, and the same product will be filed globally.

    — Keshav Bhutada

  • Ondansetron long-acting injection Europe clinical study Product Development · Q4 FY26 · High confidence Q4 FY '26
    For same product, we will be planning Europe clinical study in Q4 FY '26

    — Keshav Bhutada

  • Ondansetron long-acting injection Europe Phase III completion Product Development · FY27 · High confidence FY '27
    and we will be planning to complete European Phase III studies in FY '27.

    — Keshav Bhutada

  • SMLTOP09 human clinical studies completion Product Development · FY27 · High confidence FY '27
    Second product, SMLTOP09, which is a topical product for androgenic alopecia, and we are planning to complete human clinical studies in FY '27.

    — Keshav Bhutada

  • SMLOSD014 clinical study start Product Development · Q1 FY27 · High confidence Q1 FY '27
    and we will be starting clinical study in Q1 FY '27.

    — Keshav Bhutada

  • New biosimilar products entering human studies Product Development · FY '27 · High confidence 2
    We have 2 new biosimilar products which are already entering human studies in FY '27.

    — Keshav Bhutada

  • SBPL01 (ADC product) human studies Product Development · FY27 · High confidence Next financial year
    and we will be entering human studies of our first ADC product in next financial year.

    — Keshav Bhutada

  • NBE (MABs) Phase I human studies Product Development · FY27 · High confidence FY '27
    where both Alveolus and mAbTree projects will be entering Phase I human studies in FY '27.

    — Keshav Bhutada

  • CDMO in biologics (Phase I studies) Product Development · Next financial year · High confidence 2 programs
    in which 2 programs will be entering Phase I studies in next financial year for our partner.

    — Keshav Bhutada

  • Albumin India study completion Product Development · FY27 / Q1 FY28 · Medium confidence End of FY '27 or Q1 FY '28
    We are planning to complete our India study maybe -by end of FY '27, or maybe first quarter of FY '28.

    — Keshav Bhutada

Product Filing

  • Rotigotine (transdermal patch) US filing Product Filing · Q4 FY26 · High confidence Q4 FY '26
    We are also planning to file Rotigotine transdermal patch product in U.S. in Q4 FY '26.

    — Keshav Bhutada

  • SMLOSD014 US filing Product Filing · H2 FY27 · High confidence H2 FY '27
    And filing is planned in second half of FY '27 in U.S.

    — Keshav Bhutada

  • Aflibercept submission (India) Product Filing · H1 FY27 · High confidence H1 FY '27
    and we are planning for submission in first half of FY '27.

    — Keshav Bhutada

  • Albumin IMPD submission (Europe) Product Filing · Q4 FY26 · High confidence Q4 FY '26
    and IMPD submission for Europe is targeted in Q4 FY '26.

    — Keshav Bhutada

Commercialization

  • Unicycive Therapeutics product commercialization Commercialization · FY27 · High confidence FY '27
    We expect commercialization to happen in FY '27.

    — Keshav Bhutada

Volume

  • API volume ramp-up Volume · Q2 FY27 · Medium confidence Q2 next year
    So you will see volume ramp-up happening maybe from second quarter of next year.

    — Keshav Bhutada

Market Expansion

  • NorUDCA filing in all major RoW markets Market Expansion · Next financial year · High confidence All major RoW markets
    Our target in the next financial year is to file in all the major RoW markets.

    — Keshav Bhutada

Revenue

  • Licensing income run rate Revenue · Every year · Medium confidence INR 150-odd crores
    we will see a steady run rate of close to INR150-odd crores licensing income every year.

    — Keshav Bhutada

Partnerships

  • Biologics partnerships Partnerships · FY '27 · High confidence Some partnerships
    So we expect some partnerships surely in FY '27.

    — Keshav Bhutada

What to watch in Q4 FY26

ADC GMP facility commissioning

Q4 FY26
Current Under construction
Target Commissioned

Why it matters

This is the first ADC manufacturing facility in India and is crucial for the company's biologics CDMO strategy.

GMP facility for our ADC manufacturing, we are planning to commission in Q4 FY '26.

Risks & concerns

  • Confidentiality constraints on CDMO product details

    medium

    Management is bound by confidentiality agreements for partner products, limiting disclosure on potential revenue scale.

    Analyst acknowledged

  • Pace of new oncology API product development

    medium

    Analyst noted the company being late on some oncology API filings, which management acknowledged as a 'very right observation' but indicated future filings.

    Analyst acknowledged

  • Pending US FDA revert for Jadcherla facility

    medium

    The company has submitted CAPA responses following a US FDA inspection and is awaiting a revert.

    Management waiting for revert

Q&A highlights

4 direct, 1 evasive
Scale of US FDA-approved CDMO molecule Evasive
It is our partner's product, and we are bounded by confidentiality.

Management's inability to disclose details on a potentially significant product limits investor's ability to assess its future revenue impact.

Asked by Shubham Sehgal

Oncology API segment growth and new product development Partial
Yes, Sanjay, I think it's a very good question. Oncology has been our main business, and we'll continue to focus on it. And you are right, in last 1 year, we have not taken new oncology new molecules. Only which were required for our captive sales, we have done it. That's a very right observation.

Analyst challenged management on perceived slowness in new oncology API development. Management acknowledged the concern and indicated future filings, which is critical for growth in a key segment.

Asked by Sanjay Kumar

Rationale and magnitude of new peptide capacity capex Direct
So API, we always have good investments made which are giving us good returns in terms of ROCE. And when it comes to peptide the investment is very strategic for us because, I think, there are large GLP-1 products, which are going off patent this year, and if we consider global landscape as well there are multiple markets where the patent expiries are happening in next 2 to 3 years.

Analyst questioned the new capex given past long-gestating investments. Management provided a clear strategic rationale for the peptide facility, linking it to upcoming patent expiries in GLP-1, which is important for future revenue streams.

Asked by Sanjay Kumar

Albumin commercialization timeline in India Direct
To answer your first question, yes, FY '28 commercialization in India, yes, it's very much possible for us as on today.

Provides a specific, albeit long-term, timeline for the commercialization of a key biological product in the Indian market.

Asked by Amish Kanani

NorUDCA product potential and order book Partial
See, especially on NorUDCA, the launch was very successful, and it has exceeded our expectations. So whatever growth we were expecting to start from Q1, we would see that in Q4FY26 itself. So you will see that we have a strong order book.

Management confirmed strong initial traction and a healthy order book for the newly launched NorUDCA, indicating positive early signs for this NCE molecule.

Asked by Krisha Kansara

Sustainability of Q3 Formulation revenue growth Direct
No. There was no one-off.

Management reassured investors that the strong 50% YoY growth in Formulation revenue for Q3 was not a one-off event, suggesting sustainability.

Asked by Sanjay Kumar

API segment growth excluding captive consumption Partial
The API business is also supporting the Formulation business with the supplies. And that's a strategic call that we have taken because you get end-to-end margins there. There is a sizable volume supply that happens, from the same plant for captive consumption. So excluding that and saying that the growth is not happening in API probably is not a correct way of analyzing it.

Clarified that internal API supply to the Formulation business is a strategic decision to capture end-to-end margins, explaining why non-captive API growth might appear slower.

Asked by Krisha Kansara

Formulation base revenue for future quarters Direct
Yes. You're right, Kiran. It can be assumed at least for upcoming quarters.

Management confirmed that the ex-licensing Formulation revenue of approximately ₹146 crores can be considered a base for future quarters, aiding in financial modeling.

Asked by Kiran

2 min read 5 chapters

Detailed narrative

Robust Q3 FY26 Financial Performance

Shilpa Medicare reported its highest ever quarterly revenue of ₹411 crores, marking a 28% year-on-year growth. EBITDA also reached a record ₹115 crores, up 41% YoY, with EBITDA margins expanding to a healthy 28% from 26% in the prior year. For the nine-month period, revenue stood at ₹1,110 crores (up 14% YoY) and PAT reached ₹146 crores, nearly doubling the full year PAT of FY25. The company's adjusted Return on Capital Employed (ROCE) significantly improved from 3.5% in FY23 to over 17% in 9M FY26, reflecting effective asset utilization.

Strategic Advancements in API Business

The API segment saw the addition of three new CDMO programs, with one NCE program for a US customer already commercialized. Another US NCE program, partnered with Unicycive Therapeutics, will see its dedicated commercial block commissioned in Q4 FY26, with exhibit batches in Q1 FY27. The company also added 10 new oncology products to its pipeline, validating three this quarter, and plans to complete validation batches for one non-infringing oncology API in Q4 FY26. A new peptide manufacturing capacity, with an investment of ₹40 crores, is underway and expected to be completed in H2 FY27, focusing on GLP-1 products like Semaglutide and Liraglutide.

Formulation Business Gains Traction

The newly launched NCE molecule, NorUDCA, has exceeded expectations with a strong order book for Q4 FY26, and plans are in place to initiate human studies for Europe next financial year. The existing commercial 505(b)(2) products are showing healthy sequential growth, with EU Nilotinib volumes demonstrating strong traction. The company received marketing authorization for its first transdermal patch product, Rotigotine, which is slated for launch in Q1 FY27, with US filing planned for Q4 FY26. The Formulation business (excluding licensing income) grew 104% QoQ and 83% for the 9-month period.

Progress in Complex Pipeline and Biologics

The complex pipeline is advancing, with Ondansetron long-acting injection having completed Phase III studies and filed in India, targeting commercialization in H1 FY27. European clinical studies for Ondansetron are planned for Q4 FY26. In Biologics, Phase III studies for Aflibercept are progressing in India, targeting submission in H1 FY27. The company's first ADC product, SBPL01, has completed lab development and will enter human studies next financial year. A GMP facility for ADC manufacturing is scheduled for commissioning in Q4 FY26, marking a significant milestone as the first of its kind in India.

Capital Allocation Focused on Growth and Efficiency

The company incurred a capex of ₹87 crores in Q3 FY26, primarily funded through internal accruals. Net debt stood at ₹625 crores as of December 31, 2025, with a debt-to-equity ratio of approximately 0.25-0.26. Management expressed confidence in funding future capex from internal accruals and maintaining debt levels, indicating a focus on improving operating leverage and ROCE. The strategic investments made over recent years are now expected to yield maximum returns through execution and scaling.

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