Marksans Pharma Q2 FY27 Results (NSE: MARKSANS)
Signal: Margin expansion
The read
The trajectory has inflected from the FY26 margin trough: Q2FY27 revenue grew 30.5% YoY to ₹940.2 crore and EBITDA margin expanded 274bps to 22.8%, the second consecutive quarter of YoY margin expansion after 21.0% in Q3FY26, 23.0% in Q4FY26 and 25.3% in Q1FY27; the key test is whether Europe-led growth and the QliniQ acquisition can sustain margins after the 254bps sequential decline.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹940.2 Cr | 30.5% | 11.8% |
| Net profit | ₹143.5 Cr | 44.8% | |
| EPS | ₹3.11 | 43.8% | |
| EBIT margin | 22.8% |
P&L walk
Operating revenue rose 30.5% YoY to ₹940.2 crore, gross profit grew faster at 33.6% and gross margin expanded 135bps to 58.5%; EBITDA grew 48.3% to ₹214.3 crore with margin up 274bps, while PAT rose 44.8% to ₹143.5 crore despite a 10.0% QoQ decline as margin normalised from 25.3% in Q1FY27.
Segments
UK and Europe was the main growth engine at ₹404.6 crore, up 64.9% YoY, including approximately ₹40 crore from QliniQ; Australia & NZ also grew 64.0% to ₹100.6 crore, while ROW dragged with revenue down 47.0% to ₹14.1 crore because of the West Asia crisis.
Key positives
- Operating revenue reached a record ₹940.2 crore, up 30.5% YoY and 11.8% QoQ, with growth broad-based across Europe, Australia & New Zealand and North America.
- EBITDA grew 48.3% YoY to ₹214.3 crore versus revenue growth of 30.5%, while EBITDA margin expanded 274bps to 22.8%.
- UK and Europe revenue rose 64.9% YoY to ₹404.6 crore; excluding QliniQ, the business still grew 48.6% YoY to ₹365 crore.
- H1FY27 operating cash flow reached ₹322 crore, 4.3x H1FY26, with EBITDA-to-cash conversion improving to 75% from 31%.
- Net cash increased ₹135 crore in H1FY27 to ₹1,095 crore despite ₹95 crore of acquisitions and ₹41 crore of dividend.
Key concerns
- ROW revenue declined 47.0% YoY to ₹14.1 crore and 29.6% QoQ because Middle East shipments were impacted by the West Asia crisis.
- EBITDA margin declined 254bps QoQ from 25.3% to 22.8%, while PAT declined 10.0% QoQ to ₹143.5 crore.
- US and North America, the largest market at 44.8% of Q2 revenue, grew only 8.7% YoY to ₹420.9 crore amid a softer US consumer environment.
- QliniQ contributed approximately ₹40 crore in Q2 and around ₹84 crore in H1, increasing the need to distinguish acquisition-led growth from organic growth.
Research and educational content only. Not investment advice.