Granules India (532482) Q1 25/26 earnings summary

Executive summary

• Final stages of FDA remediation at Gagillapur, with re-inspection expected by year-end and normalization of operations anticipated to drive growth from Q4 FY 2026 and into FY 2027.

• Sales grew year-over-year in North America and sequentially in Europe, while rest of world sales declined due to PFI supply backlog from Gagillapur.

• Senn Chemicals AG contributed revenue of ₹291 Mn; Q1 FY26 financials include its consolidation.

• Regulatory audits cleared with minor observations; received Gold rating from EcoVadis and improved CDP Climate score.

• PAT declined due to exceptional expenses related to ongoing litigation settlements and remediation costs.

Financial highlights

• Q1 FY26 consolidated revenue at INR 12,101 million, up 3% year-over-year and 1% sequentially; includes INR 291 million from Senn Chemicals AG.

• Gross margin improved to 64.9%, up 593 bps YoY and 148 bps sequentially, aided by Senn Chemicals consolidation.

• EBITDA at INR 2,467 million (20.4% margin), down 5% YoY due to higher professional and remediation expenses.

• PAT fell 16% YoY to INR 1,126 million, with margin at 9.3%.

• Cash flow from operations at INR 2,806 million; CapEx for the quarter at INR 1,137 million.

Outlook and guidance

• Growth momentum expected to accelerate from Q4 FY 2026, with FY 2027 projected as a strong growth year post-remediation and new product launches.

• Peptide/CDMO segment annualized revenue currently CHF 16–20 million, with significant expansion potential as integration and India-based infrastructure scale up.

• New R&D facility for peptide development being added at IIT Hyderabad; focus on portfolio expansion, innovation, and sustainability initiatives.