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.