Strides Pharma Science (STAR) Q2 26/27 earnings summary

Executive summary

• Q2 revenue was INR 1,429.7 crore, up 17.1% YoY; ex-U.S. revenue grew 31% and exceeded U.S. revenue for the first time in a quarter.

• Q2 EBITDA rose 8.4% YoY to INR 250.9 crore; reported PAT was INR 134.1 crore.

• H1 revenue grew 15.1% to INR 2,695.1 crore and EBITDA rose 6.9% to INR 480.7 crore.

• FY 2028 overall growth aspiration remains intact; the ~$375 million U.S. revenue aspiration is now expected beyond FY 2028.

• H2 is expected to be stronger than H1, supported by U.S. launches, continued ex-U.S. momentum and moderating cost pressures.

Financial highlights

• Q2 gross profit increased 13.4% YoY to INR 800.3 crore; gross margin was 56.0%, down 180 bps YoY.

• Q2 EBITDA margin was 17.6%, versus 19.0% in Q2 FY 2026; operational PAT rose 11.5% YoY to INR 135.8 crore.

• H1 gross profit was INR 1,570.5 crore, up 13.7%; gross margin was 58.3%, down 70 bps YoY.

• H1 operational PAT rose 9.8% to INR 258.9 crore; reported PAT increased 26.4% to INR 299.6 crore, including exceptional items.

• Q2 reported EPS was INR 14.19; H1 reported EPS was INR 31.22.

Outlook and guidance

• Overall FY 2028 growth aspiration remains intact; ex-U.S. is expected to outgrow the business average, while the ~$375 million U.S. aspiration has shifted beyond FY 2028.

• H2 is expected to exceed H1; four to six U.S. products are expected to launch in H2, with full-year benefits flowing into FY 2028.

• U.S. differentiated products are targeted to contribute meaningfully in FY 2028/FY 2029; the revenue aspiration is broad-based, not reliant on one product.

• Gross margin is expected to remain in the 58%-60% range; cash-cycle improvement is expected, with recovery anticipated in the next quarter.

• FY 2027 CapEx is expected near INR 300 crore; FY 2028 spending is expected to be slightly lower, mainly maintenance CapEx and intangibles.