ERIS Q2 FY27 Earnings Call: PAT Jumps 39.2%, Guides 36% H2 EBITDA Margin

ERIS Lifesciences Ltd held its Q2 FY27 earnings call on October 26, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Double-digit growth with strong PAT leverage

• Consolidated revenue grew 12.6% YoY in Q2 FY27 and 12.8% YoY in H1 FY27 — domestic branded formulations (DBF) grew 14.1% YoY in Q2 FY27 and 14.2% YoY in H1 FY27.
• Adjusted for the Zorvia business, branded formulation growth was 16.5% (Q2 FY27) — and 14.9% for the quarterly period per management's adjusted disclosure.
• Consolidated EBITDA grew 7.3% YoY in Q2 FY27 (7.2% in H1 FY27) — trailing revenue growth, with EBITDA growth coming in slightly lower on higher other expenses in Q2 FY27.
• PAT grew 39.2% YoY in Q2 FY27 and 27.3% year-to-date (H1 FY27) — H1 FY27 EPS stood at Rs.23.58.
• Other expenses were 27% higher in Q2 FY27 — driven by spend on new product development and regulatory filings ahead of upcoming launches.
• Q2 FY27 exceptional loss of Rs.30-35 crore — relates to the "at-risk" portfolio of ~4 patent-challenged products, where almost 20% of those sales ultimately could not be sold and was reversed.

Gross margin ahead of guidance; Bhopal and Zorvia to layer in H2

• Q2 FY27 gross margin up ~134 bps QoQ — CMD Amit Bakshi said the company is ahead of its guidance, with H2 FY27 EBITDA margin guided at ~35% having moved to 36%.
• Two disclosed gross margin levers of 100 bps each — from Zorvia and from Bhopal, both expected within H2 FY 2026-2027; the Bhopal 100 bps benefit accrues over Q3–Q4 FY 2026-2027.
• Full Bhopal in-housing worth ~150 bps gross margin — once the entire business is shifted (expected by around Q2 FY 2027-2028), the benefit becomes ~1.52% per management's Q2 FY27 disclosure.
• Zorvia outlicensing to reflect from Q3 FY27 — the outsourced business was not EBITDA-positive ("hardly there"), so the 7% royalty should be net incremental to EBITDA (period unspecified); no specific quantum was provided.
• ~Rs.200-300 crore more to be capitalized (period unspecified) — expected to add ~Rs.30 crore to annual depreciation (~15% of the capitalized amount; period unspecified).
• Chronic/sub-chronic mix at ~87% currently — after removing the Zorvia portfolio it might come close to 90% (period unspecified), which management views as very strategic.

Diabetes moat deepens; semaglutide milestone and analog runway

• Diabetes contributes 38% of revenue as of Q2 FY27 — with two brands from the franchise each generating Rs.200 crore+; management views diabetes as its "moat".
• GLP-1 franchise at #1 in units and #1 in prescriptions, #2 in value — as of Q2 FY27, aided by the vial offering; the brand delivered ~Rs.16-18 crore revenue in Q2 FY27 and is ramping up well.
• Management indicated the GLP-1 market could double to Rs.80-90 crore/month in FY 2027-2028 — from Rs.40-45 crore/month at present (Q2 FY27); the Rs.45-50 crore run-rate refers to the market excluding orals, not company brand sales.
• Recombinant semaglutide clinical trial approval secured — management stated Eris is the first company to get a semaglutide recombinant approved for clinical trials; the analog portfolio is progressing into the regulatory phase.
• Analog insulin market sized at ~Rs.2,500 crore (period unspecified) — growing at nearly double digits; management expects three analog launches in FY28, all from its own stable via the regulatory pathway.
• Bhopal mAbs tech transfer begins December 2026 (Q3 FY27) — subject to completion of tech transfer and the regulatory framework, management expects a couple of mAbs (formulations only) by H2 FY 2027-2028.
• Company-run visceral fat / CAD-CKD study publication hoped for within two months (~December 2026, Q3 FY27) — a large study to demonstrate that visceral fat drives CAD/CKD risk.

Contained Q3 impact; turnaround not expected before Q1 FY28

• Q3 FY27 top line expected within ~5% (plus/minus) of Q3 FY 2025-2026 levels — due to the Swiss facility shutdown in November (FY 2026-2027) for remediation; management noted business has run more robust than initially expected.
• Q3 FY27 EBITDA margin indicated at levels similar to Q2 FY27 — management affirmed this in response to an analyst query.
• FY27 guidance for Swiss Parenterals: top line at ±5% of prior year — with FY27 EBITDA margin guided at ~25% and EBITDA growth guided for FY27.
• Management does not expect a major Swiss turnaround until Q1 FY 2027-2028 — post-Q1 improvement is contingent on how GMP matters progress and the new block becoming functional; the EU GMP CAPA plan is on track and auditors are expected to be invited back by end of FY 2026-2027.
• CDMO partner business intact — management stated "nothing has moved out"; only one active CDMO sale in FY 2026-2027, with remaining partner launches slated for FY 2027-2028; on the prior Rs.1,000 crore CDMO scale-up target over 3-4 years, management said it is in touch with all partners.
• New Swiss block: PV batches expected in March-April — built to address a prior supply-capacity shortfall, seen as a good revenue churner in FY 2027-2028.

FY28 framed by Bhopal, tax and pipeline; OAD inflecting

• Management guided 300 bps growth ahead of the market for FY 2026-2027 — reiterating it will stick to that, on a question citing domestic growth ex-Zorvia of 16-16.5% in Q2 FY27.
• OAD grew 12% in Q2 FY27 — ~50% of the earlier OAD struggle was due to discontinuation of a large brand in FY 2026-2027 (~4-5% contribution before tapering off by July-August); management now believes OAD could grow ahead of the market from Q3 FY27 onward, versus its earlier guidance of ~70% of market growth (period unspecified).
• Management predicts IPM growth of 11-12% in FY 2027-2028 — noting Sema generics participated in FY 2026-2027 IPM growth but were not big enough to "turn the whole lever".
• Three FY28 drivers framed by management — the 150 bps Bhopal gross margin benefit flowing into EBITDA, Bhopal's 15 VAD status lowering the effective tax rate from ~37% (on outsourced manufacturing, FY 2026-2027) to 15% in FY 2027-2028, and Levim pipeline products contributing via new launches in FY 2027-2028; management did not quantify an FY28 earnings growth number.
• Insulin government-side ramp-up expected from Q1 FY 2027-2028 — management pushed back on an analyst's late FY 2027-2028/early FY 2028-2029 traction timeline, with Bhopal already manufacturing and controls in-house.
• Capex of ~Rs.100 crore remaining in H2 FY27 — after which capex is expected to move down significantly in FY 2027-2028, consistent with the capex cycle (Eris, Bionex, Swisse, Levim) winding down by end of FY 2026-2027.
• Effective tax rate guided at 20-21% for FY27 — CFO Sachin Shah expects a similar rate to continue in FY 2027-2028.

Deleveraging prioritised after capability build

• Net debt of Rs.2,144 crore as of 30 September 2026 — reported by CFO Sachin Shah (Q2 FY 2026-2027).
• Aiming for Rs.150-200 crore of debt paydown in FY 2026-2027 — per Amit Bakshi, who endorsed ~Rs.400-500 crore of additional paydown in FY 2027-2028 as "a fair number to think about" once the capex cycle cools down.
• Capability building prioritised over debt reduction historically — acquired businesses previously languishing at 8%-10% EBITDA have all been lifted to company level, where Eris is delivering 36% (as of Q2 FY27); beyond capability building, "paring down debt is the only priority", though no specific debt-reduction timeline was committed.
• H1 FY27 debtor days improved by 10 days, from 80 to 70 days — alongside H1 FY27 capital expenditures of Rs.220 crores.
• Investor day scheduled for 19th November 2026 — announced at the close of the call.