Neuland Laboratories (524558) investor relations material

Executive summary

• Q1 FY26 saw total income of ₹300.6 crores, a 32.4% year-over-year decline, mainly due to uneven order flow and subdued specialty GDS business performance; management remains confident in achieving strong growth for FY26, with expectations of revenue momentum picking up in the latter half as new production capacity comes online.

• Significant growth is anticipated from commercial molecules and new business from both existing and new customers, with continued investment in talent and capabilities to strengthen CDMO positioning.

• The company continues to focus on high-margin specialty APIs, expanding peptide capabilities, and optimizing costs for long-term sustainability.

• Unaudited standalone and consolidated financial results for the quarter ended June 30, 2025, were approved by the Board on July 31, 2025.

• Dr. Ravi Shankar Gopinath appointed as an Additional Independent Director for five years, effective August 1, 2025, pending shareholder approval.

Financial highlights

• Total income for Q1 FY26 was ₹300.6 crore, down 32.4% year-over-year and 10.5% sequentially; EBITDA was ₹42.1 crore at a margin of 14.4%, impacted by deleverage from lower revenues.

• Profit after tax was ₹13.7 crores, down from ₹98.3 crores in Q1 last year; EPS at ₹10.7.

• Free cash flow was negative ₹66 crores; net debt stands at negative ₹165 crores.

• CapEx outflow for the quarter was ₹79 crores; announced ₹254 crore capex to expand peptide synthesizer reactor capacity.

• Q1 FY25 and Q3 FY25 included exceptional profit on investment property, not recurring in Q1 FY26.

Outlook and guidance

• Management expects revenue growth to accelerate in the second half of FY26, driven by commercialization of the new Unit 3 production block and new CMS molecules.

• Strong growth is anticipated for FY26, with a 20% CAGR over three to five years considered reasonable.

• Margins are expected to recover as sales ramp up, though no specific guidance was provided.

• Continued focus on cost optimization and differentiation as a CDMO partner.

• No explicit forward-looking guidance provided, but results reviewed and approved by the Audit Committee and Board.