Granules India (532482) Q2 25/26 earnings summary

Executive summary

• Achieved 34% year-over-year revenue growth in Q2 FY 2026, led by formulation business in North America and Europe, with EBITDA growth despite a ₹200 million loss from SLS/Ascelis Peptides.

• Advanced U.S. FDA remediation at Gagillapur, with a meeting scheduled for January 2026 and no FDA concerns on corrective actions; facility cleared by German and Danish authorities.

• Expanded formulation capacity by 40% with FDA approval for Genome Valley facility, enabling an additional 10 billion doses.

• SLS Peptides (including Senn Chemicals) integration progressing, with EBITDA profitability targeted for Q4 FY 2026 and full synergy expected by FY 2027.

• Board and auditors approved unaudited Q2 and H1 FY2026 results, with no material misstatements identified.

Financial highlights

• Q2 FY 2026 revenue: ₹12,970 million, up 34% year-over-year and 7% sequentially.

• Gross margin improved to 65.7%, up 368 bps year-over-year and 82 bps sequentially.

• EBITDA: ₹2,782 million (21.5% of sales), up 37% year-over-year, despite a ₹200 million EBITDA loss from SLS Peptides.

• PAT increased 34% year-over-year to ₹1,306 million, with PAT margin stable at 10.1%.

• Standalone H1 FY2026 revenue: ₹29,675.73 million; consolidated H1 FY2026 net profit: ₹2,318.82 million.

Outlook and guidance

• Expecting normalization of operations and new product approvals from Gagillapur post-remediation.

• Anticipate double-digit top-line growth from FY 2027 onwards as constraints ease and new sites come online.

• SLS Peptides expected to turn EBITDA positive in Q4 FY 2026, with further growth as new projects convert.

• Portfolio expansion, new product launches, and R&D investments to drive future growth.

• Revenue and profitability impacted by voluntary pause at Gagillapur following USFDA warning letter, with remediation ongoing.