Granules India LimitedPharmaceuticals & HealthcareGRANULES
Q2 FY27 concall · earnings callGranules India Limited
Management said Granules returned to growth in FY26 and is shifting from building manufacturing and R&D capabilities to scaling four growth engines of controlled substances, complex generics with first-to-file opportunities, oncology and peptide CDMO.
Numbers
| Metric | This quarter | Change | Five-quarter trend |
|---|---|---|---|
| Gross margin | 65 percent | about 15 percentage points | |
| EBITDA margin | 22 percent | three percentage points | |
| R&D investment | 6 percent in Q1 FY27 | from about 3 percent of revenue a few years ago | |
| ROCE | 18 percent | about one percentage point YoY |
Financials
From filed quarterly results. YoY and QoQ compare each metric on the same accounting basis.
| Quarter | Revenue | Net profit (PAT) | Basic EPS |
|---|---|---|---|
| Q3 FY25 | ₹1,137.69 Cr-1.5% YoY+17.7% QoQ | ₹117.60 Cr-6.4% YoY+21% QoQ | ₹4.85-6.4% YoY+20.9% QoQ |
| Q2 FY25 | ₹966.62 Cr-18.7% YoY-18.1% QoQ | ₹97.23 Cr-4.8% YoY-27.8% QoQ | ₹4.01-5% YoY-27.9% QoQ |
| Q1 FY25 | ₹1,179.87 Cr+19.7% YoY+0.3% QoQ | ₹134.65 Cr+181.1% YoY+3.9% QoQ | ₹5.56+180.8% YoY+3.9% QoQ |
| Q4 FY24 | ₹1,175.78 Cr-1.6% YoY+1.7% QoQ | ₹129.65 Cr+8.4% YoY+3.2% QoQ | ₹5.35+8.3% YoY+3.3% QoQ |
| Q3 FY24 | ₹1,155.58 Cr+0.8% YoY-2.9% QoQ | ₹125.65 Cr+1.1% YoY+23% QoQ | ₹5.18+1.4% YoY+22.7% QoQ |
TL;DR
- Returned to growth in FY26 after nearly three years of flat performance; focus now on converting investments into commercial growth.
- Four growth engines identified: controlled substances, complex generics and early market opportunities, oncology, and peptide CDMO, built on vertically integrated API to finished dosage platform.
- Complex generics increased from 1% of overall revenue in fiscal 20 to 33% of overall revenue in fiscal 26; two sole first-to-file ANDAs filed with combined US market north of 350 million US dollars.
- Controlled substances now third largest in US by value per IQVIA, up from eighth in July 2025, with near 100% service levels and expanding pipeline in ADHD and opioids.
- Financial position in consolidated net cash after September 2026 warrant proceeds; plans about 2,000 crore organic capex over next three to four years.
Said on the call
“After nearly three years of relatively flat performance, we returned to growth in FY26.”
From the Q&A
| Topic | What management said |
|---|---|
| Inorganic growth and balance sheet | Management said inorganic opportunities are actively evaluated with discipline but gave no specifics; balance sheet is in consolidated net cash position after preferential warrants proceeds in September 2026. |
| Legacy business pricing | Management said near-term raw material pressures are being addressed with customers through pricing mechanisms with a lag, while medium-term growth will come from portfolio and operating leverage. |
| Controlled substances outlook | Management said DEA quota allocation increases every year on a molecule-wise basis, recent quota was satisfactory, and 3 more controlled-substance products will launch over the next 12 months; first-to-file timelines under litigation were not disclosed. |
| Oncology and ANDA filings | Management said oncology has two products filed, one extended to about 15 countries, with about 6 more to be filed this year and early next year; overall US filings run-rate is 6 to 10 per year rising to 10-15. |
| US FDA re-inspection | Management said Gagillapur remediation with over 100 CAPAs is complete, correspondence with FDA is continuous, and re-inspection is expected anytime. |
| Margins and costs | Management said gross margin expansion did not fully flow to EBITDA due to higher R&D from 3% to 6% and added manufacturing costs, plus one-off remediation and supply-failure costs of close to 100 odd crores last year; peptide CDMO is currently at EBITDA loss. |
Guidance
- Plan to invest about 2,000 crore in organic capital expenditure over the next three to four years on a milestone-based approach
- Aim to file between 10 and 15 products per year in the US going forward, to be extended to Europe and rest of world
- Target approximately 50 million US dollar in annual revenue run rate in three years and cross 100 million revenue size in five years for peptide CDMO
- Oncology portfolio begins commercialization in Fiscal 29 and extends through Fiscal 35; controlled products pipeline extends through Fiscal 35
Source
Summary written from the transcript filed by Granules India Limited for the call held on 6 Oct 2026; published 12 Oct 2026, 18:16 IST.
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