Shilpa Medicare

Shilpa Medicare delivered robust financial results in Q4 FY26, with revenue reaching an all-time high of ₹439 crores, marking a 30% year-on-year growth. For the full fiscal year, revenue stood at ₹1,549 crores, an 18% increase. EBITDA for Q4 grew 40% YoY to ₹121 crores, with the margin expanding to 28%, while full-year EBITDA was ₹445 crores (up 30% YoY) at a 29% margin, primarily due to increased revenue from key verticals and positive operating leverage. Adjusted PAT for FY26 (before exceptional gain^📎) surged by approximately 135% to ₹232 crores, reflecting strong profitability.

The company is strategically diversifying its platform across complex APIs, specialty formulations, biologics, and ADCs. The API business recorded ₹259 crores in Q4 and ₹985 crores for FY26, growing 16% YoY, supported by expanded capacities and strong captive demand from formulations. Formulations revenue surged 54% YoY in Q4 to ₹205 crores and 30% YoY for FY26 to ₹618 crores, with the European formulation business alone exceeding ₹200 crores (up over 100% YoY). The biologics segment also saw significant growth, with FY26 revenue of ₹150 crores, up approximately 100% YoY, driven by continued deal momentum in the CDMO business.

Shilpa Medicare has a strong pipeline with several key product launches anticipated in FY27 and FY28. Nor Ursodeoxycholic acid (NorUDCA), a new chemical entity launched in Q3 FY26, is showing steep QoQ growth and is expected to gain further traction in FY27, with global expansion planned. Abraxane and Enzalutamide tablets are slated for commercialization in FY28, following successful completion of exhibit and registration batches in Q4 FY26. Additionally, the Rotigotine Transdermal Patch is set for a Europe launch in FY27, with a US FDA submission completed in Q4 FY26, and Ondansetron extended-release injection is expected to launch in India in FY27.

The company is making significant strides in its biologics and CDMO segments, with two new NBE programs set to enter Phase I studies in FY27, alongside ongoing development of a second ADC biosimilar. Shilpa is building its own integrated ADC manufacturing suite, which will encompass mAb, payload, linker, and conjugation, positioning it uniquely in India. The recombinant human albumin program received Global Phase III clinical study approval from CDSCO for its Europe study, with IMPD submission planned for H1 FY27, further solidifying its long-term growth strategy.

Shilpa Medicare's capital expenditure for FY26 amounted to ₹361 crores, primarily funded through internal accruals and deployed in API, CDMO, and albumin facilities. The company expects capex to sustain at similar levels without significant growth compared to the previous year. Net debt increased to ₹613 crores from ₹550 crores in the previous year, aligning with business growth. The adjusted Return on Capital Employed (ROCE), excluding investments in high-growth potential biologics and albumin, significantly improved from 4% in FY23 to 17.4% in FY26, reflecting better operational efficiency and prudent capital management.

The Jadcherla facility is currently awaiting reaudit by the USFDA after submitting compliance for observations received during a prior audit. Management clarified that this does not significantly impact current US revenues, as the majority of US products are now manufactured through third-party CDMO sites. The company has strategically shifted its focus in the US market from certain generic products, like Azacitidine (which was discontinued due to market dynamics), towards super specialty products, aiming for differentiated offerings and higher value realization.

Shilpa Medicare completed validation for Semaglutide GLP-1 in Q4 FY26, with DMF expected by H1 FY27. The company's differentiation in this competitive market lies in its ability to produce both synthetic and semisynthetic API, coupled with forward integration into its own formulations and global accreditations, primarily targeting the export market. Furthermore, a new oncology block is expected to be commissioned in FY27, increasing overall oncology API capacity and supporting the pipeline of over 15 new oncology products, including Methotrexate for which CEP was received in Q4 FY26.