Supriya Lifescience Limited

Supriya Lifescience reported a strong Q2 FY26, with revenue reaching INR 200 crores, marking a 20% year-on-year growth and a significant 38% sequential increase. EBITDA stood at INR 73 crores, up 12% YoY, with an EBITDA margin of 36%. Net Profit After Tax (PAT) was INR 50 crores, resulting in a PAT margin of 25%. For the first half of FY26, revenue grew 6% YoY to INR 345 crores, while EBITDA saw a slight degrowth of 2.3% to INR 124 crores, maintaining a 36% margin. The company expressed confidence in achieving its annual 20% revenue growth guidance, with major recovery anticipated in Q3 and Q4.

The Ambernath facility has commenced validation campaigns and is progressing as planned, with commercial contributions expected from Q4 FY26. Phase-I, focusing on liquid anesthetics, is slated for capitalization in Q3 FY26. The company has already secured WHO GMP approval, opening doors to semi-regulated markets like Indonesia, Thailand, and Malaysia. EU and FDA audits are anticipated in Q2 FY27 and end of FY27, respectively, which will further expand market access for finished formulations.

The DSM partnership is progressing, with an expected peak revenue contribution of INR 60-70 crores. For FY26, the company projects INR 25-30 crores in revenue from the DSM project, primarily driven by food applications. Japanese PMDA approval has been received for the pharma segment of the DSM project, along with CEP and USDMF approvals. Customer qualification for the pharma product is underway, with significant uptake expected in 4-5 months.

Supriya Lifescience has launched two of the four planned products for FY26: a new anesthetic drug and an advanced intermediate in the cardiovascular space. Filings for USDMF and CEP for the anesthetic, and US DMF for the cardiovascular intermediate, are expected by the end of November. Capacity for the cardiovascular intermediate is currently 1000 tons, with visibility for 300 tons, and significant revenue expected from Q1/Q2 FY27. Two more products, an ADHD treatment and a contrast media product, are slated for launch in Q3 and Q4 FY26, respectively.

The Whey Protein contract has experienced delays due to the customer's formulation changes, but resolution is expected within 1-2 months, leading to commercial supply. The company has set up a capacity of approximately 3,000 tons per year for Whey Protein. While the full potential is expected by FY28, the majority of the contribution is anticipated in FY27, with an initial target of 1,000 tons in the first year. The technology is versatile, capable of handling various protein types, and discussions are ongoing for Pea Protein with Chinese customers and in markets like Singapore and Malaysia.

Exports continue to be a cornerstone, accounting for 81% of Q2 FY26 revenues. The company has achieved 79% backward integration for its Q2 FY26 revenues, which significantly improves cost efficiency and enhances responsiveness to market opportunities. Management reiterated its guidance of maintaining EBITDA margins in the 33%-35% range for FY26, attributing margin stability to product and region mix, increased batch sizes from Module E, and continuous R&D efforts in life cycle management and process improvement.

CAPEX for Q2 FY26 was INR 28 crores, bringing H1 FY26 CAPEX to INR 42 crores, primarily directed towards the Ambernath facility. The company projects an additional CAPEX of approximately INR 80 crores for the remainder of FY26, allocated for maintenance, the Ribo Block in Lote, and formulations plant requirements. Supriya Lifescience reported not utilizing any working capital limits for the past six months, except for letters of credit and bank guarantees, indicating strong financial health.