Blue Jet Healthcare Limited Q3 FY26 Earnings Call Summary

Summary

Blue Jet Healthcare Limited - Q3 FY26 Earnings Call Summary Friday, February 13, 2026 4:00 PM

Event Participants

Executives 4 Ganesh Karuppannan (CFO), Sanjay Sinha (Deputy CFO), Shiven Akshay Arora (Managing Director), V. K. Singh (COO)

Analysts 9 Alankar Garude (Kotak Institutional Equities), Amlan Das (JP Morgan), Andy (Rave Ventures), Ankush Mahajan (Sanctum Wealth), Avneesh Burman (Vaikarya), Nikhil Upadhaya (SIMPL), Sanjesh Jain (ICICI Securities), Shashank Krishnakumar (Emkay Global Financial Services), Shyam Sampat (MSE Capital Partners), Sujit Lodha (ICICI Lombard), Vinay Shah (The Corporate Daily)

Financials & KPIs

Note: PAT absolute value not explicitly stated in transcript, only % changes provided for the quarter.

Geographic & Segment Commentary

• Contrast Media: Revenue recognized this quarter was ₹124 crores, reflecting a steady-state dispatch despite goods-in-transit timing. Growth is driven by an NCE intermediate (growing in high teens) and a new iodinated contrast media product slated for Q1 FY27 commercial launch. Strategic focus remains on backward integration at Unit-III (Mahad) to reduce reliance on European raw material suppliers.
• Pharma Intermediates (PI/API): Performance was subdued due to significant channel de-stocking and supply chain realignment for the flagship cardiovascular molecule (Bempedoic Acid). Management remains bullish on the end-molecule’s growth in Japan and Canada, expecting normalization within 1-2 quarters. The segment maintains healthy gross margins between 50-55%.
• Specialty Ingredients (Sweeteners): Revenue slightly impacted by marginal price erosion in Saccharin. The company plans to initiate exhibit batches for a new high-intensity artificial sweetener in FY27, targeting a 10% share of a $1 billion market.

Company-Specific & Strategic Commentary

• Vizag Greenfield Project: Groundbreaking scheduled for February 2026 with a ₹1,000 crore investment plan over 3-4 years. Phase-1 will focus on dedicated API/intermediate capacities backed by specific customer demand rather than speculative capacity.
• R&D Expansion: Secured lease space in Hyderabad for a new ₹40 crore R&D center expected to commence operations in Q3 FY27. The facility will focus on emerging tech, including intermediates for GLP-1s, peptide chemistry, and bio-catalysis.
• Backward Integration (Unit-III): Cumulative CAPEX of ₹146 crores incurred for a key side-chain intermediate facility at Mahad. Validations are on track for Q1 FY27, which is expected to improve cost-competitiveness and strategic independence.
• CDMO Pipeline: Currently tracking 20 active RFPs, including 6 high-conviction Phase-3 programs (two GLP-1 candidates and one contrast media NCE).

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Pharma Intermediate De-stocking

• Question: When will the de-stocking impact end and growth recover? (Amlan Das)
• Answer: It may take a couple of quarters for alignment, but the end molecule shows mid-double-digit growth and new markets like Japan are opening (V.K. Singh).

Margin Volatility & Inventory

• Question: What caused the gross margin dip and volatility? (Sanjesh Jain)
• Answer: 1% impact from old inventory write-offs and 1% from product mix. Goods-in-transit timing also creates quarterly “swings” in reported margins (Sanjay Sinha/Ganesh Karuppannan).

Supply Chain Realignment

• Question: Are we losing share in Bempedoic Acid to Indian peers? (Sanjesh Jain)
• Answer: No, we remain the primary supplier. Any change in intermediates requires a long regulatory pathway; we are confident in our sticky relationships (V.K. Singh).

New Growth Drivers

• Question: What are the primary FY27 volume drivers? (Sanjesh Jain)
• Answer: Three keys: Cardiovascular molecule line expansion, the NCE contrast media intermediate, and the Unit-III backward integration (Shiven Arora).

Funding for Vizag

• Question: How will the ₹1,000 crore CAPEX be funded? (Andy)
• Answer: Initial phase via ₹410 crore internal accruals. Options include debt, co-investment with customers, or equity dilution to meet the 75% promoter holding mandate (Ganesh Karuppannan).

Key Takeaway

Blue Jet Healthcare reported a challenging Q3 FY26, with revenue declining 40% YoY to ₹192.4 crores, primarily due to channel de-stocking in its Pharma Intermediates segment. Despite short-term headwinds, management maintained a 52% gross margin and emphasized that the underlying demand for its flagship cardiovascular and contrast media molecules remains robust, with the latter growing in the high teens. Strategically, the company is pivoting toward massive capacity expansion via a ₹1,000 crore Vizag Greenfield project and a new Hyderabad R&D center targeting GLP-1 and peptide chemistries. While FY26 performance remains subdued, the commercialization of Unit-III backward integration and the launch of new iodinated contrast media in Q1 FY27 provide a clear path for margin recovery. Investors should monitor the successful validation of the Vizag site and the stabilization of the PI supply chain over the next two quarters.