Sudeep Pharma Limited — Q3 FY26 earnings call

Call held 9 Feb 2026

Management summary

Sudeep Pharma reported a strong Q3 FY26, with total income growing 52% YoY to INR 179.2 crores and PAT increasing 66% YoY to INR 47.7 crores. The company's EBITDA margin stood at 37.3%. Growth was driven by robust demand, strategic investments, and strong performance in the specialty ingredients segment. Key projects like the Dahej Battery Materials Facility and Nandesari Greenfield facility are progressing as planned, positioning the company for future growth and market diversification.

Highlights

  • Total Income for Q3 FY26 increased by 52% year-on-year to INR 179.2 crores, driven by strong demand and customer engagement.

  • EBITDA for Q3 FY26 grew 60% year-on-year to INR 66.8 crores, achieving a healthy EBITDA margin of 37.3%.

  • PAT for Q3 FY26 saw a significant 66% year-on-year growth, reaching INR 47.7 crores.

  • The specialty ingredients segment demonstrated robust performance, contributing 41% to Q3 revenue and identified as a key growth driver for the next two years.

  • Key projects, including the Dahej Battery Materials Facility (Phase 1, 25,000 MTPA) and Nandesari Greenfield facility (51,200 MTPA), are progressing as planned for commissioning in early 2027 and Q4 FY26 respectively.

Key financials

2 periods

Q3 FY26

  • Total Income
    ₹179.2 Cr
    YoY +52%
  • EBITDA
    ₹66.8 Cr
    YoY +60%
  • EBITDA Margin
    37.3%
  • PAT
    ₹47.7 Cr
    YoY +66%

9M FY26

  • Total Income
    ₹482.1 Cr
    YoY +38%
  • EBITDA
    ₹181.5 Cr
    YoY +33%
  • EBITDA Margin
    37.6%
  • PAT
    ₹125.7 Cr
    YoY +33%

What they filed

Q1 FY27: revenue up 32.5%, net profit up 36.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue149 83 105 80 88 −41%90 +8%80 −24%106 +33%
EBITDA63 26 45 30 31 −51%30 +15%29 −36%39 +30%
Net profit49 21 33 25 30 −39%27 +29%26 −21%34 +36%
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

  • Q3 FY26 Business Mix
    62% Export Business Contribution38% Domestic Business Contribution41% Specialty Business Contribution59% Pharma, Food & Nutrition Contribution
  • 9M FY26 Business Mix
    62% Export Business Contribution38% Domestic Business Contribution43% Specialty Business Contribution57% Pharma, Food & Nutrition Contribution
  • NSS Contribution
    ₹17 Cr Revenue (Q3 FY26)
  • Revenue Excluding NSS
    ₹156 Cr Revenue (Q3 FY26)₹416 Cr Revenue (9M FY26)

Capital allocation

high confidence
  • Capex Capex disclosed
    • Dahej Battery Materials Facility (SAM) - Phase 1 capacity (25,000 MTPA)
    • Dahej Battery Materials Facility (SAM) - Total capex for 100,000 ton facility (includes land, utility, infrastructure for 50,000 tons, operational capacity for 425,000 tons) ₹550 Cr
    • Dahej Battery Materials Facility (SAM) - Phase 1 capex (includes land for entire 100,000 ton facility) ₹300 Cr
    • Nandesari Greenfield facility (51,200 MTPA) ₹150 Cr
    • Remaining capex for Nandesari Greenfield facility ₹10 Cr
    From an execution standpoint, the Dahej Battery Materials Facility is progressing as planned. We broke ground on January 23rd and Phase 1 capacity of 25,000 metric tons per annum remains on track for commissioning in early 2027. Capacity build-out is being closely aligned with qualification progress and demand visibility. (Shanil Bhayani) ... I think a total capex will be approximately INR550 crores to INR600 crores. (Shanil Bhayani) ... Phase 1 capex of approximately INR300 crores, which includes the land for the entire 100,000 ton facility. (Shanil Bhayani) ... The Nandesari Greenfield facility with a capacity of 51,200 metric tons remains on track for commissioning Q4 FY '26 or more specifically, March 26. (Shanil Bhayani) ... I believe we have a residual capex of maybe INR10 crores-INR15-odd crores, which will be done in this month and maybe next month. Some maybe some spillover in April, but majority has been completed. (Shanil Bhayani)
  • Debt Debt disclosed
    Majorly, it is getting financed through our internal accruals. So, we don't see a significant interest impact coming in for the project as of now. (Ketan Vyas)
  • M&A NSS Acquisition · Integrated

    strengthens our formulation capabilities and presence in regulatory markets

    In addition, the NSS acquisition is integrating smoothly and further strengthens our formulation capabilities and presence in regulatory markets. (Shanil Bhayani)

Guidance & targets

Capacity

  • Dahej Battery Materials Facility Phase 1 Commissioning Capacity · Early 2027 · High confidence Early 2027
    We broke ground on January 23rd and Phase 1 capacity of 25,000 metric tons per annum remains on track for commissioning in early 2027.

    — Shanil Bhayani

  • Nandesari Greenfield Facility Commissioning Capacity · Q4 FY26 · High confidence Q4 FY26 (March 2026)
    The Nandesari Greenfield facility with a capacity of 51,200 metric tons remains on track for commissioning Q4 FY '26 or more specifically, March 26.

    — Shanil Bhayani

Capex

  • Dahej Battery Materials Facility Total Capex (100k ton facility) Capex · High confidence INR 550-600 crores
    I think a total capex will be approximately INR550 crores to INR600 crores.

    — Shanil Bhayani

Profitability

  • Dahej Battery Materials Facility Margin Profile Profitability · Medium confidence Better or higher than broader battery materials industry
    I think, Prateek, I will, as we are not operational yet, I will not maybe entirely comment on the margin profile today. It will be, I can maybe generalize and say that... Maybe I'll not give a number, but all the other battery material companies that kind of operate, based on our guidance today, and the technology that we've developed, we believe that we can achieve better or higher margins than the broader battery materials industry today.

    — Shanil Bhayani

  • Overall EBITDA Margins Profitability · High confidence 35-37%
    We remain at similar EBITDA margins as our business trajectory. We remain in the range of 35% to 37% for both on a year-to-date basis and for the quarter.

    — Ketan Vyas

  • Overall Margin Profile Profitability · High confidence Maintain historically maintained margins
    So, I would say margin profile, we will again maintain what we have historically maintained in the business.

    — Shanil Bhayani

Revenue

  • Dahej Battery Materials Facility Revenue Contribution Revenue · FY28 · High confidence Start contributing in FY28
    only when the revenue starts contributing to FY '28, then the depreciation will come in.

    — Ketan Vyas

  • Nandesari Greenfield Facility Revenue Contribution Revenue · H2 FY27, FY28 · Medium confidence H2 FY27, more significantly in FY28
    H2 is when we kind of expect to start servicing certain customers from that site. And then I would say more significantly in FY '28.

    — Shanil Bhayani

  • Liposomal Chemistry Revenue Contribution Revenue · H2 FY27, FY28 · Medium confidence H2 FY27, more significantly in FY28
    I would say we will start to see a revenue contribution from this maybe in H2 FY '27 and more significantly in FY28, as we have just completed our clinical studies on these two products.

    — Shanil Bhayani

Utilization

  • Nandesari Greenfield Facility Utilization Utilization · FY28 onwards · Medium confidence 30-40%
    And then maybe I would say FY '28 onwards is when we can look at that scale up of going to maybe 30%-40% and then ramping up.

    — Shanil Bhayani

  • Specialty Ingredients Segment Optimal Utilization Utilization · Low confidence 70-80%
    when which year are you internally planning that the capacity utilization would probably reach optimal utilization levels of 70% to 80%?

    — Prateek Chaudhary

Growth

  • Specialty Ingredients Segment Growth Growth · Next two years · High confidence Key growth driver for next two years
    We see this segment being a, I would say, key growth driver for the next two years for Sudeep.

    — Shanil Bhayani

  • Overall Growth Growth · Coming year · Medium confidence Continue to sustain growth done over last couple of years
    Growth also, I think the growth that we've done over the nine months this year, that kind of growth we will continue to sustain in the coming year as well.

    — Shanil Bhayani

What to watch in Q4 FY26

Nandesari Greenfield Facility Commissioning

Next quarter (Q4 FY26)
Current On track for Q4 FY26 (March 2026)
Target Commercial operations commenced

Why it matters

This is a major capacity addition for core business and new molecules, crucial for future growth and margin expansion.

Our confidence in future growth is underpinned by execution readiness. The Nandesari Greenfield facility with a capacity of 51,200 metric tons remains on track for commissioning Q4 FY '26 or more specifically, March 26.

Q&A highlights

8 direct
Revenue excluding NSS for Q3 and 9M FY26 Direct
Our revenue excluding NSS was INR416 crores on a year-to-date basis and for the quarter, they were INR156 crores for the quarter, which if you look at it excluding NSS, our business grew at 35.26% on a year-on-year basis for the quarter and on a year-on-year basis, excluding NSS, we grew at about 21%.

Provides clarity on the company's organic growth performance, excluding the impact of the NSS acquisition.

Asked by Pratiti

Competitive advantage of Sudeep Pharma's battery chemicals versus Chinese suppliers Direct
From a technology perspective, we have developed something what we call green chemistry, which is I would say, significantly more efficient, both from an environment perspective as well as an opex perspective, compared to the chemistry being run in China. So our long term outlook is that the business will, while the focus is not to compete with China on pricing and to have a differentiated pricing model, but operationally the business will be more leaner and more efficient from an opex perspective compared to the Chinese chemistry and also lower on the capex.

Explains the strategic positioning and competitive edge of the company's battery materials segment, focusing on technology and cost efficiency.

Asked by Shreya Chatterjee

Timeline for revenue contribution from liposomal chemistry products Direct
I would say we will start to see a revenue contribution from this maybe in H2 FY '27 and more significantly in FY28, as we have just completed our clinical studies on these two products.

Provides a clear timeline for the financial impact of a new and innovative product category, indicating future growth drivers.

Asked by Shreya Chatterjee

Seasonality in Q4 for pharma and food/nutrition business Direct
Historically, what we've seen is Q4 typically is the strongest for the business because we see export contributing significantly. I think the majority of the customers post the newer kind of start planning for the year and that is where we kind of see Q4 being the strongest, but from a seasonality perspective, nothing major.

Clarifies the typical seasonal patterns of the business, particularly the strength of Q4 driven by export contributions and customer planning cycles.

Asked by Dhruv Muchhal

Ramp-up and customer approval process for the new Nandesari Greenfield facility Direct
I think what happens typically is once we commission the facility, we will have typically a 6 to 12-month period where majority of the customer approvals will happen... So, what we see is that while we will commission the facility in March, H2 is when we kind of expect to start servicing certain customers from that site. And then I would say more significantly in FY '28.

Details the operational timeline and customer onboarding process for a major new capacity, crucial for understanding future revenue generation.

Asked by Prateek Chaudhary

Impact of US tariff reversal on business and margins Direct
Majority, I would say, maybe at least across 90% of the business where tariff was effective, we have passed on the tariff impact to the customer. So, from a margin perspective, we have not seen any dilution from the US. This reversal will kind of help, I would say, fast track the end of the wallet share expansion from a volume perspective.

Explains how the company mitigated tariff impacts on margins and the positive implications of the tariff reversal for future volume growth and market share expansion.

Asked by Disha

Reasons for accelerated growth this year compared to previous low single-digit growth Direct
So, I think what is basically, we've expanded into key markets, Europe and US. We've built out sales teams in both these regions, which are now helping us scale up faster in these territories. In addition, specialty ingredients was a new business. We commissioned the facility in '22. So, '23 was the first operational year. And a lot of approvals have come. So, that has been a dominant growth driver. So, today, specialty ingredients has become almost 40% of our revenue, which may be in FY '23 was less than 10%.

Provides a clear explanation for the recent growth acceleration, attributing it to market expansion and the significant contribution of the specialty ingredients segment.

Asked by Ankur Kumar

Financial impact (depreciation/interest) of battery chemical project before revenue contribution Direct
Ankur, the project is scheduled for completion in about 18 months. So, only when the revenue starts contributing to FY '28, then the depreciation will come in. Until that time, it's more of a capital expenditure. As we said, we will look at the debt in the coming period as we go across. Majorly, it is getting financed through our internal accruals. So, we don't see a significant interest impact coming in for the project as of now.

Clarifies that the battery materials project will not incur significant depreciation or interest costs before revenue generation, as it is primarily funded through internal accruals.

Asked by Ankur Kumar

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Detailed narrative

Strong Financial Performance in Q3 FY26

Sudeep Pharma delivered robust results in Q3 FY26, with total income growing 52% year-on-year to INR 179.2 crores, compared to INR 118 crores in Q3 FY25. EBITDA increased by 60% to INR 66.8 crores, resulting in a healthy EBITDA margin of 37.3%. Net profit after tax (PAT) also saw significant growth of 66% year-on-year, reaching INR 47.7 crores, reflecting strong demand and effective execution. For the nine months ended December 2025, total income grew 38% to INR 482.1 crores, with PAT at INR 125.7 crores.

Strategic Growth Drivers and Market Diversification

The company's growth was underpinned by its diversified portfolio and strategic focus on high-entry barrier markets. The specialty ingredients segment emerged as a key growth driver, contributing 41% to Q3 revenue and 43% to 9M revenue, significantly up from less than 10% in FY23. This segment, along with expansion into key markets like Europe and the US, and the establishment of dedicated sales teams, has significantly accelerated growth. Export business contributed 62% to both Q3 and 9M revenues, highlighting the company's global reach.

Progress on Key Capacity Expansion Projects

Sudeep Pharma is on track with its major capacity expansion initiatives. The Nandesari Greenfield facility, with a capacity of 51,200 metric tons, is set for commissioning in Q4 FY26 (March 2026), with a residual capex of INR 10-15 crores remaining. Revenue contribution from this facility is expected from H2 FY27, with significant impact in FY28, targeting 30-40% utilization. The Dahej Battery Materials Facility (SAM), targeting 25,000 MTPA in Phase 1, is progressing towards commissioning in early 2027, with a total capex of INR 550-600 crores for the full 100,000-ton facility.

Competitive Advantage in Battery Materials and Green Chemistry

In the battery materials segment, Sudeep Pharma positions itself as an alternative to China, leveraging a 'green chemistry' approach that is more efficient environmentally and operationally, with lower opex and capex compared to Chinese methods. The company's iron phosphate product shows comparable or better electrochemical performance than Chinese vendors. Currently, 70% of 34 engaged customers have already approved/validated Sudeep samples, and commercial scale-up orders are being received, indicating strong market acceptance.

Innovation in Liposomal Chemistry

The company is advancing its liposomal chemistry platform, initially focused on minerals, and expanding into nutrients like vitamins and DHA for brain health. Clinical studies for liposomal iron and Vitamin C have shown 80% higher absorption in the human body compared to regular iron. Revenue contribution from these high-value products is anticipated from H2 FY27, with more significant impact in FY28, as the company builds scientific validation and regulatory approvals.

NSS Acquisition Integration and Future Outlook

The NSS acquisition is integrating smoothly, enhancing formulation capabilities and regulatory market presence. Management expects the overall business to sustain its current growth trajectory with EBITDA margins remaining in the 35-37% range. The company is confident in its ability to compound growth through disciplined execution, strong customer relationships, and the optionality provided by new platforms, while maintaining its historically achieved margin profile.

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