Summary
Sudeep Pharma Limited - Q3 FY 2026 Earnings Call Summary Monday, February 09, 2026 11:00 AM IST
Event Participants
Executives 3 Ketan Vyas (CFO), Shanil Bhayani (Director), Sujit Bhayani (MD)
Analysts 7 Ankur Kumar (Alpha Capital), Dhruv Muchhal (HDFC AMC), Disha (IIFL Capital Services), Disha (Sapphire Capital), Prateek Chaudhary (Saamarthya Capital), Pratiti (Param Capital), Shreya Chatterjee (Ageless Capital), Viraj Shah (PGIM)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Income | ₹179.2 crores | +52% YoY; Driven by robust demand and deeper customer engagement. |
| EBITDA | ₹66.8 crores | +60% YoY; Growth outpaced revenue due to high-value product mix. |
| EBITDA Margin | 37.3% | +190 bps YoY; Maintained strong profitability across both core and specialty segments. |
| Net Profit (PAT) | ₹47.7 crores | +66% YoY; Significant bottom-line growth following operational scale-up. |
| Revenue (Ex-NSS) | ₹156 crores | +35.3% YoY; Organic business shows strong underlying momentum. |
| Export Revenue % | 62% | Consistent with 9-month average; reflects global expansion strategy. |
| Specialty Business % | 41% | Increasing share of total revenue (up from <10% in FY23). |
| Net Working Capital | ~180 Days | Management noted this supports the current growth trajectory. |
Geographic & Segment Commentary
- Pharma, Food & Nutrition (Core): Contributed 59% of Q3 revenue. Management is expanding the calcium, magnesium, and iron portfolios, specifically targeting infant nutrition. The Nandesari Greenfield facility is set to double down on this segment with a focus on high-value gluconates and glycinates.
- Specialty Ingredients: Now accounts for 41% of revenue, up from negligible levels in FY23. This segment focuses on technology-driven products like encapsulated ingredients and premixes. Key wins include a global leader in tortilla manufacturing and the world’s largest baked goods company.
- North America & Europe: North America is seeing volume call-offs resume following tariff clarity. Europe is emerging as a major growth driver with the dedicated sales team securing regulatory and customer approvals for the calcium carbonate portfolio (where Sudeep is 1 of 9 global CEP certificate holders).
- Asia-Pacific (APAC): Delivered strong growth through repeat business and wider product adoption by leading FMCG and infant nutrition companies.
Company-Specific & Strategic Commentary
- Sudeep Advanced Materials (SAM): Positioned as the first ex-China supplier of battery-grade iron phosphate. The company is currently engaged with 34 global customers (OEMs and cell manufacturers) for qualification, with 70% already validating samples.
- Nandesari Greenfield Expansion: The 51,200 MTPA facility is on track for commissioning in March 2026 (Q4 FY26). It will produce higher-value molecules like gluconates and glycinates, which have limited global competition and high margins.
- Liposomal Technology: Developed in-house “Lipoboost” technology showing 80% higher absorption for iron and Vitamin C. Commercial revenue contribution is expected to begin in H2 FY27 following successful clinical trials.
- Operational Efficiency: Noted the use of “Green Chemistry” for battery materials, which reduces liquid/solid waste and lowers both Capex and Opex compared to traditional Chinese manufacturing methods.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Nandesari Commissioning | March 2026 | Facility to focus on approvals in H1 FY27; revenue impact expected in H2 FY27. |
| Battery Plant (Dahej) | Early 2027 | Phase 1 (25,000 MTPA) on track; full project capacity 100,000 MTPA planned. |
| Revenue Growth | Ongoing 35-40% | Management expects to sustain current growth momentum seen in 9M FY26. |
| EBITDA Margins | 35% - 37% range | Sustainable target range across business verticals. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regulatory & Approvals | New facilities in Pharma/Nutrition require 6-12 month customer audit and stability testing periods before commercial production. |
| Geopolitical/Tariffs | While US tariff reversals are positive, global trade shifts remain a variable for the 62% export-dependent business. |
| Execution Risk | The battery materials project involves significant capex (₹550-600 Cr) and requires complex off-take agreements to reach 3x asset turns. |
Q&A Highlights
NSS Integration
- Question: What is the revenue contribution and margin profile of the NSS acquisition? (Disha)
- Answer: NSS contributed ₹17 crores this quarter. Margins have been optimized to match Sudeep’s 35-37% range by streamlining the raw material supply chain. (Ketan Vyas/Shanil Bhayani)
Battery Materials Strategy
- Question: How does Sudeep compete with China on costs for iron phosphate? (Shreya Chatterjee)
- Answer: Sudeep uses a proprietary “Green Chemistry” that is more Opex-efficient and lower on Capex than Chinese methods. The goal is to provide a reliable, high-quality ex-China supply chain, which is currently seeing a 15-20% price increase in China due to VAT rebate eliminations. (Shanil Bhayani)
Capacity Ramp-up
- Question: What is the expected ramp-up for the new Nandesari facility? (Prateek Chaudhary)
- Answer: Commissioning is in March 2026. H1 FY27 will focus on site approvals and stability data. Commercial scale-up to 30-40% utilization is expected by FY28. (Shanil Bhayani)
Financial Seasonality
- Question: Is there typical seasonality in Q4 for the pharma segment? (Dhruv Muchhal)
- Answer: Q4 is historically the strongest as export customers plan for their new year and call-off volumes from annual contracts post-December. (Shanil Bhayani)
Key Takeaway
Sudeep Pharma delivered a robust Q3 FY26 with 52% total income growth and a strong 37.3% EBITDA margin, underpinned by a successful pivot toward specialty ingredients which now account for 41% of the top line. The company is transitioning from a mineral excipient manufacturer to a high-tech specialty chemicals player, evidenced by its in-house “Lipoboost” technology and its strategic entry into the battery materials market as the first global ex-China supplier of iron phosphate. With the 51,200 MTPA Nandesari facility set for March 2026 commissioning and 34 global customers currently qualifying its battery products, Sudeep is significantly expanding its industrial scale. While H1 FY27 will be a period of regulatory audits for new capacities, management remains confident in sustaining the current 35-40% growth trajectory. The focus remains on leveraging “Green Chemistry” to maintain high margins while scaling the Dahej battery materials project through FY28.
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