SMS Pharma. Q2 FY27 Results (NSE: SMSPHARMA)
Signal: Margin expansion
The read
The trajectory has inflected positively after Q1FY27 revenue growth of 5.6% and flat 20% OPM: Q2 revenue accelerated to +30% YoY, EBITDA margin expanded 145bps to 21%, and PAT after associate profit rose 57% to ₹39.85 crore. The key test is whether backward integration, new molecules and Ibuprofen capacity sustain the margin improvement as volumes ramp over the next six quarters.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹316.08 Cr | +30% | +53% |
| Net profit | ₹39.85 Cr | +57% | |
| EBIT margin | 21% |
P&L walk
Revenue rose 30% YoY and 53% QoQ to ₹316.08 crore, gross margin expanded 268bps YoY to 35%, EBITDA grew 40% to ₹67.65 crore with margin up 145bps to 21%, and PAT after associate profit rose 57% to ₹39.85 crore.
Segments
The filing does not provide a segment-result table, but H1 growth was led by ARV revenue of ₹150.25 crore, up 47% YoY, anti-inflammatory revenue of ₹110.03 crore, up 25%, and anti-diabetic revenue of ₹64.66 crore, down 39%; excluding anti-diabetic, H1 revenue grew 38%.
Key positives
- Revenue increased 30% YoY to ₹316.08 crore, with management citing both volume growth and improved price realization.
- Gross margin expanded 268bps YoY to 35%, supported by backward integration and a higher share of high-value APIs.
- EBITDA margin rose 145bps YoY to 21% as EBITDA grew 40% to ₹67.65 crore.
- H1FY27 revenue excluding anti-diabetic products grew 38% YoY, indicating portfolio diversification despite anti-diabetic revenue falling 39%.
- Six DMF/CEP filings have been completed in FY27 to date versus a full-year target of 10, while the peptides R&D facility is fully operational.
Key concerns
- Anti-diabetic H1 revenue declined 39% YoY to ₹64.66 crore and anti-ulcer revenue declined 39% to ₹14.18 crore, increasing the importance of growth in ARV, anti-inflammatory and newer APIs.
- The ₹280 crore FY27 capex programme has ₹160 crore deployed to date, while Ibuprofen volumes are expected to ramp gradually over the next six quarters; returns therefore remain execution-dependent.
- The filing provides no EPS, depreciation, fixed-asset or operating-cash-flow data, limiting earnings-quality and capital-efficiency assessment.
Research and educational content only. Not investment advice.