SUDEEPPHRM

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.

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.

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.

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.

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.

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.