Summary
Innova Captab Limited - Q3 FY26 Earnings Call Summary Tuesday, January 27, 2026, 2:00 PM IST
Event Participants
Executives 3 Ayush Kumar Garg (Head - Investor Relations), Lokesh Bhasin (Chief Financial Officer), Vinay Lohariwala (Managing Director)
Analysts 6 Abdulkader Puranwala, Ankit Gupta, Avneesh, Gourav, Hitanshi Shah, Nishita, Praveen, Saket, Sudarshan
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹450.3 crores | +42.3% YoY; Driven by strong demand across CDMO and branded generics and Jammu ramp-up. |
| CDMO Revenue | ₹298.7 crores | +29% YoY; Reflects deeper partnerships with existing clients and new client wins. |
| Branded Generics Revenue | ₹151.6 crores | +79% YoY; Fueled by aggressive geographic expansion in domestic and international markets. |
| EBITDA | ₹71.1 crores | +39.6% YoY; Growth supported by volume and operational efficiencies. |
| EBITDA Margin | 15.8% | -40 bps YoY; Remained steady due to disciplined cost management; ex-Jammu margins are ~18-19%. |
| PAT | ₹42.1 crores | +12.3% YoY (approx.); Impacted by depreciation and project costs from the new Jammu facility. |
| Export Revenue % | 35% | Increased from ~25-27% in Q3 FY25; reflects strategic progress in global markets. |
| Jammu Facility Revenue | ₹89 crores | Increased from ₹60 crores in Q2 FY26; nearing EBITDA break-even. |
| Cash Flow (Operations) | ₹182 crores | 9M FY26 figure before working capital changes and tax. |
Geographic & Segment Commentary
- CDMO: Revenue grew 29% YoY to ₹298.7 crores. Growth is driven by 6-10% volume increases and changes in product mix, alongside stabilization in API prices which supports contract manufacturing reliability.
- Branded Generics: This segment saw the highest growth at 79% YoY, reaching ₹151.6 crores. Management attributed this to “bold pushes” into new domestic and international geographies and higher penetration of high-demand products through the Univentis and Sharon brands.
- International Markets: Exports now constitute 35% of the quarterly revenue mix. The company has secured UK-MHRA approval for its Baddi cephalosporin unit and PIC/S certification for Jammu, positioning it for higher-margin regulated markets like Europe and Canada.
Company-Specific & Strategic Commentary
- Jammu Facility Ramp-up: The facility contributed ₹89 crores this quarter. While currently PAT-negative due to depreciation, 14 out of 15 marquee CDMO clients have audited or validated the site, with a positive PAT contribution expected in FY27.
- Regulatory Milestones: Recently received UK-MHRA approval for Baddi and PIC/S (via SMDC Ukraine) for Jammu. These certifications are critical for the company’s pivot toward premium, regulated international opportunities.
- R&D Focus: Management emphasized that existing and planned R&D endeavors are central to meeting changing environmental needs and sustaining long-term growth beyond the next 2-3 years.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Overall Revenue Growth | 20%+ YoY for FY27 | Projected at an entity/group level across all business verticals. |
| Jammu Revenue | ₹270 - ₹280 crores for FY26 | Management is optimistic about potentially “overpassing” this range for the full fiscal year. |
| Jammu Capacity Potential | ₹1,400 crores at peak | Target potential at 65-75% utilization; current utilization is in a “nascent stage.” |
| EBITDA Margins | 15% (+/- 2%) | Long-term sustainable range; improvements from Jammu may be offset by future growth investments. |
Risks & Constraints
| Risk | Context |
|---|---|
| API Price Volatility | While currently stabilizing, management noted that future trends remain uncertain and their guidance assumes constant API pricing. |
| Margin Pressure | New growth strategies and the initial operational costs of large facilities (like Jammu) can put temporary pressure on P&L and PAT margins. |
| Competitive Intensity | The domestic CDMO market is witnessing increased competition, though management believes there is sufficient space for players with high-quality infrastructure. |
Q&A Highlights
Jammu Profitability
- Question: When will the Jammu facility break-even? (Nishita)
- Answer: It is currently nearing break-even at the EBITDA level. We expect a positive contribution to both EBITDA and PAT starting in FY27 (Lokesh Bhasin).
Margin Discrepancy
- Question: If we exclude Jammu, EBITDA margins appear to be 18-19%. What drove this? (Avneesh)
- Answer: You are correct. Ex-Jammu performance is very strong due to better price realization, support from stable API prices, and operational leverage where fixed costs like electricity and labor remained constant despite higher sales (Vinay Lohariwala).
API Price Impact
- Question: Are you seeing a bottoming out of API prices? (Praveen)
- Answer: Prices have been in a stable territory for the last 4-5 months. Year-on-year, we still lost on the price front, but quarter-on-quarter there is stabilization (Vinay Lohariwala).
Growth Strategy
- Question: Can you maintain 40-50% growth in branded generics? (Ankit Gupta)
- Answer: While specific categories might outperform in certain quarters, we target a consistent 20%+ growth at the organizational level. We are already planning for growth engines beyond 2028-29 (Vinay Lohariwala).
Key Takeaway
Innova Captab Limited delivered a strong Q3 FY26, with revenue growing 42.3% YoY to ₹450.3 crores, driven by a 79% surge in branded generics and a steady 29% growth in the CDMO vertical. A significant highlight was the ramp-up of the Jammu facility, which contributed ₹89 crores in revenue and is expected to turn PAT-positive in FY27. While consolidated EBITDA margins stood at 15.8%, the core business (ex-Jammu) operated at a higher margin of ~18-19%, showcasing strong operational leverage and better price realization. Strategically, the company is pivoting toward regulated markets, backed by recent UK-MHRA and PIC/S certifications. Management has provided a steady outlook of 20%+ revenue growth for FY27, supported by the massive ₹1,400 crore peak capacity potential of the Jammu site. Investors should monitor the impact of future growth investments on near-term P&L as the company seeks to sustain this momentum beyond FY28.
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