Granules India (532482) investor relations material

Executive summary

• Q1 FY26 revenue grew 3% year-over-year to INR 12,101 million, with gross margin improvement aided by Senn Chemicals AG consolidation and continued investments in R&D and strategic expansion into peptides and CDMO segments.

• Remediation at the Gagilapur facility is nearing completion, with FDA reinspection expected by December, aiming to resolve delivery constraints and support growth; USFDA warning letter and voluntary pause impacted revenue and costs.

• Senn Chemicals AG contributed INR 291 million in Q1 FY26, marking entry into high-growth peptide CDMO space and segment diversification.

• PAT declined 16% year-over-year to INR 1,126 million due to exceptional expenses from litigation settlements and acquisition-related costs.

• Sustainability initiatives recognized with CDP Supplier Engagement A List, EcoVadis Gold Medal, and improved ESG scores.

Financial highlights

• Q1 FY26 revenue: INR 12,101 million, up 3% year-over-year and 1% sequentially.

• Gross margin: 64.9%, up 593 bps year-over-year, aided by Senn Chemicals AG consolidation.

• EBITDA: INR 2,467 million (20.4% of sales), down 5% year-over-year due to higher professional, remediation, and manpower expenses.

• PAT: INR 1,126 million, margin at 9.3%, down 16% year-over-year due to exceptional items.

• Cash flow from operations: INR 2,806 million; CapEx: INR 1,037–1,137 million.

Outlook and guidance

• Significant growth expected from Q4 FY26 and into FY27 as remediation concludes and new product approvals ramp up.

• Peptide CDMO business expected to match group return metrics within 12–18 months.

• Europe revenue contribution projected to rise to 15–20% of total revenue, driven by capacity expansion and new launches.

• New R&D facility for peptide development being added at IIT Hyderabad, with continued focus on innovation and sustainability.

• Ongoing remediation at Gagilapur expected to continue affecting results.