Gland Pharma Limited Q3 FY26 Earnings Call Summary

Summary

Gland Pharma Limited - Q3 FY26 Earnings Call Summary Wednesday, January 28, 2026 18:30 IST

Event Participants

Executives 5 Alain Kirchmeyer (CEO, Cenexi), Ravi Mitra (CFO, India Office), Shyamakant Giri (CEO), Srinivas Sadu (Executive Chairman), Shriniwas Dange (Investor Relations)

Analysts 6 Abdulkader Puranwala, Ashish, Bino Pathiparampil, Neha Manpuria, Saion, Tarang Agrawal, Tushar Manudhane

Financials & KPIs

Geographic & Segment Commentary

• USA: Revenue grew 16% YoY to ₹829 crores in Q3. Performance was driven by a 19% increase in volumes despite pricing pressures, supported by new GPO contract wins for top products.
• Europe: Revenue surged 54% YoY (Consolidated), significantly aided by Cenexi’s 39% growth. The company successfully launched Dalbavancin in six European countries and secured milestone income from European contracts.
• Cenexi: Achieved quarterly revenue of €50 million (+21% CC) and reached EBITDA breakeven at €1.4 million. Growth was driven by capacity debottlenecking, contract re-pricing for inflation, and ramp-up of new products like an inactivated vaccine and ophthalmic gel.
• India & RoW: India revenue grew 32% YoY to ₹74.4 crores; RoW grew 12% to ₹187.6 crores. RoW performance was bolstered by a 44% increase in tech transfer CMO revenues.

Company-Specific & Strategic Commentary

• Capacity Expansion: Significant expansion of cartridge fill-and-finish capacity from 40 million to 140 million units to target GLP-1 and insulin markets. The new 100-million unit fungible line is expected to be ready for exhibit batches by Q2 FY27.
• Strategic Capex: Announced a ₹2,000 crore investment plan over the next 5 years for the base business. Focus areas include BFS (Blow-Fill-Seal), ophthalmic suspension lines, and dedicated capacities for new CDMO contracts.
• CDMO Pivot: Secured a long-term oncology CDMO contract worth $25-$30 million annually, starting late FY28. Management is focusing on high-value, complex products with “take-or-pay” arrangements to ensure durable revenue visibility.
• Operational Efficiency: Realized 1-2 percentage point savings through yield improvements and alternate API sourcing. These efficiencies allowed the company to remain aggressive on pricing while maintaining 36-37% EBITDA margins in the base business.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

CDMO Contract Specifics

• Question: What are the details of the new oncology CDMO contract? (Tushar Manudhane)
• Answer: It is a $25-$30 million annual contract starting late FY28. It requires ₹80 crores in dedicated capex for a complex compounding area and involves variation filings for a product already commercialized in Europe (Srinivas Sadu).

GLP-1 and Cartridge Strategy

• Question: How is the 140 million unit cartridge capacity being utilized? (Ashish, Saion)
• Answer: The capacity is fungible for vials/cartridges. Initial utilization in FY27 will be 15-20 million units. Gland has launched Liraglutide in the US and Canada and has 7-8 semaglutide generic customers in the pipeline (Shyamakant Giri, Srinivas Sadu).

Cenexi Synergies

• Question: How do Cenexi and Gland synergize beyond the turnaround? (Sajal Kapoor, Saion)
• Answer: The companies are performing joint tendering for large 60-70 million unit ampoule contracts. Gland is also tech-transferring products to Cenexi that require controlled substance handling or herbal capabilities that Gland lacks in India (Srinivas Sadu).

Margin Sustainability

• Question: How are margins improving despite US price erosion? (Abdulkader Puranwala)
• Answer: Internal efficiencies like increasing batch sizes and investing in larger capacity tanks have reduced costs. This allowed Gland to offer aggressive pricing to win GPO contracts while maintaining stable margins (Srinivas Sadu).

Key Takeaway

Gland Pharma delivered a robust Q3 FY26, characterized by 22% revenue growth and a successful EBITDA turnaround at Cenexi, which reached breakeven with a €1.4 million profit. The base business remained resilient, with 16% revenue growth and 37% EBITDA margins, successfully using operational efficiencies to offset a 5-6% price erosion in the US. Strategically, the company is pivoting toward a high-end CDMO model, headlined by a ₹2,000 crore five-year capex plan and the expansion of cartridge capacity to 140 million units to capture GLP-1 and insulin opportunities. While short-term growth is pegged at 12-13%, management remains committed to a 15% long-term organic CAGR. Key watch points include the US approval of Dalbavancin and the ramp-up of the new 8 KL to 23 KL biologics facility. This quarter marks a transition from stabilizing Cenexi to extracting cross-continental synergies.