Shilpa Medicare Q2 FY27 Earnings Call: H1 Revenue Crosses Rs. 1,000 Cr, Years of Harvesting Are Beginning (SHILPAMED)

Shilpa Medicare Ltd held its Q2 FY27 earnings call on November 05, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Best Quarter Ever; First Rs.1,000 Cr Half-Year

• Record quarterly revenue of Rs.538 crore — up 35% YoY in Q2 FY 2026-2027; H1 FY 2026-2027 revenue of Rs.1,007 crore, up 44% YoY, the first time half-yearly revenue crossed the Rs.1,000 crore mark, driven by strength across all verticals.
• Record EBITDA of Rs.151 crore — up 37% YoY at 28% margin in Q2 FY 2026-2027; H1 FY 2026-2027 EBITDA of Rs.290 crore, up 40% YoY at 29% margin. Q2 PAT of Rs.79 crore; H1 PAT of Rs.180 crore, up nearly 100% vs H1 FY 2025-2026.
• Operating PBT of Rs.104 crore — Q2 FY 2026-2027 (before share of profit from JVs/associates and before exceptional items); Rs.202 crore for H1 FY 2026-2027.
• RoC improved to 13.3% — from 9% in FY25; adjusted RoC at 18.3%. Management expects RoC to improve further from H2 FY 2026-2027 onwards on business-mix improvement and higher operating leverage.
• H1 FY 2026-2027 capex of Rs.252 crore — primarily funded via internal accruals; net debt stable at Rs.612 crore despite the capex program.
• All four engines grew — API, CDMO, formulation and biologics all expanded; management declared the investment-led years are behind it and "the years of harvesting are beginning."

API, Formulations and Biologics All Set Records

• Non-captive API revenue of Rs.255 crore — up 24% YoY in Q2 FY 2026-2027 (Rs.470 crore in H1, up 20% YoY) on improved offtake from newly expanded capacities and steady specialty CDMO performance. Since Q1 FY 2026-2027, management has stopped bifurcating oncology vs non-oncology API reporting; both portfolios are growing fairly well, with oncology growing slightly slower due to fewer molecules.
• Formulations revenue of Rs.210 crore — up over 50% YoY in Q2 FY 2026-2027 (Rs.407 crore in H1, up 70% YoY); excluding licensing income, the base business grew 87% in Q2 FY 2026-2027, driven by the complex finished dosage portfolio in the EU region, supported by US and ROW.
• Biologics revenue of Rs.65 crore — up 150% YoY in Q2 FY 2026-2027 (Rs.117 crore in H1, up 92% YoY), now 12% of revenue, driven by licensing/partnership and CDMO deal momentum. Only adalimumab is currently commercially supplied.
• Europe sales were the highest in Q2 FY 2026-2027 — CFO Alpesh Dalal clarified the rotigotine patch has not been launched yet and no supplies were booked; the quarter reflected continuing business across multiple products, not only nilotinib and axitinib.
• Service and licensing income margin caveat — CFO Alpesh Dalal said it is not fair to assume a 100% gross margin: there is no COGS, but R&D spends (past and possibly current period) and other expenses sit against it. Management declined to disclose the licensing share of Q2 FY 2026-2027 service income.

~700 bps Gross Margin Dip: Mix Shift, Not Cost

• Raw material cost-to-sales rose ~7% — from 28.65% in the year-ago period to 35.72% in Q2 FY 2026-2027, bringing down gross margin; CEO Keshav Bhutada confirmed analyst Basant Kumar Bansal's observation is correct.
• Management attributed the decline to mix, not costs — API delivered a very strong quarter, and since formulation carries much higher gross margins than API, the heavier API weighting pulled blended gross margins down.
• API raw material costs have risen globally — per management, the elevated ratio will continue until raw material prices settle down, with no specific timeline provided. Management does not disclose raw material costs segment-wise and did not confirm whether formulation/CDMO raw material costs were stable; the pass-through question was not addressed.

Dense Complex-Product and Biosimilar Pipeline

• 25+ NC CDMO client programs — with 4 expected to commercialize at partners over the next 18-24 months (~by FY 2028-2029); 4 programs are in late stage (under registration) and 2 in Phase 3 of partners; management expects at least 1 late-stage program commercialized in FY 2027-2028 and 3 in FY 2028-2029. For 3 of the 4 late-stage programs, Shilpa supplies API to the end customer.
• Formulation pipeline — 3 complex 5F5B2 products commercialized, with 5+ more in advanced development targeted for commercialization over the next 2-3 years (~through FY 2029-2030); enzalutamide, Abrexin and rotigotine patch on track for FY 2027-2028 launches; a Europe-partnered complex transdermal patch completed exhibit batches in Q2 FY 2026-2027 with filing planned in FY28.
• Semaglutide GLP-1 injectable — EB batches completed in Q2 FY 2026-2027 with Europe/ROW submissions planned (timeline unspecified).
• Biosimilars — portfolio of 7 biosimilars whose molecules average US$10bn+ in global sales; 2 to enter human studies for Europe/ROW in FY27; Nivolumab is closest to regulatory approval and will be the first export product, with the Europe filing planned in FY 2027-2028; Aflibercept guided to be in the India market in FY 2026-2027; management sees a strong opportunity to out-license all seven globally (timeline unspecified).
• Unisys Therapeutics NDA — Shilpa's exclusive integrated API-and-formulation manufacturing partner filed the NDA with one additional site and received a revised PDUFA date of March 2027 (Q4 FY 2026-2027).
• Ondansetron — following SEC approval, management expects the India launch in H1 FY 2027-2028, subject to central approval plus state-level approvals, licenses and permissions; marketing partner discussions have started.
• Roti Cottin launch slipped — delayed a couple of quarters from FY27 to FY28 because a variation approval with the European agency for one raw material took an additional two quarters; launch set for the first half of FY 2027-2028.

Large Peptide Build-Out; No Firm Orders Yet

• 4 peptide lines operating, 2 being added — with space reserved for further expansion based on business progress; the first phase, described as one of the largest peptide manufacturing capacities of India, will be commissioned by end of FY27. No specific capex figure was disclosed in response to the referenced Economic Times news item; a separate query citing ~Rs.450 crore peptide capex went unanswered after the analyst's line dropped.
• No firm peptide orders in hand yet — management clarified the capacity plan is based on customer indications; the capacity is a mix for CDMO, GLP-1 and HPAPI opportunities, and visibility on conversion into actual orders is expected in FY 2027-2028, with utilization commentary deferred to H2 FY 2027-2028.
• Phased investment — the recently announced 50 million peptide investment will be phased, with further spend contingent on partner programs, program uptake and utilization of already-made investments (period unspecified).
• Recombinant human albumin — a first-in-class NBE whose global Phase 3 protocol has been approved by CDSCO and EMA; targeting IMPD submission in Europe in H2 FY27. Management called the excipient/non-therapeutic use a very long-dated opportunity in a very early stage with customers; clearer revenue-scale visibility may come around FY28. CFO Alpesh Dalal declined to give any first-year revenue guidance for the program.

USFDA Remediation Contained; No Guidance Policy

• USFDA remediation at Jarchela plant — submitted and in progress with USFDA; management said it will have no impact on revenues or the business plan over the next 2-3 years. CFO Alpesh Dalal stated there is zero risk to current revenue, as most critical US filings have been moved to alternate sites/CMO partners.
• EU re-inspection cleared — the Jarchela plant was recently re-inspected by EU authorities and cleared again; management sees no risks to revenues from the plant. The Dharwad biologics plant is ready and approved, and the fermentation unit is audit-ready.
• US supply strategy via CMOs — US-bound products are majorly manufactured at contract manufacturing sites, with 2-3 new US products expected per year for registration batches or commercial launch (period unspecified); the strategy will remain in place going forward.
• No guidance policy — CFO Alpesh Dalal stated the company does not provide specific guidance; on H2 FY 2026-2027, management said the business is on good traction and expects momentum to continue, offering no quantified outlook. Molecule counts and launch timings for the next 12-18 months were deferred to the investor presentation.
• Nilotinib competition contained — CEO Keshav Bhutada said axitinib had other generic players from day one of launch; for nilotinib, some generic players have started entering, but since it is tender-based in Europe with tender spans of 1-3 years, management does not currently see any big change in numbers from generic competition.
• 4 molecules under global registration — therapy areas withheld as these are partner programs; customers are a mix of big pharma and mid-pharma, with the mid-pharma cohort comprising biotechs. Monish Shah (Head – IR) invited participants to email unanswered questions for follow-up.