Zenith Drugs Q1 FY27 earnings call
In brief
FY26 revenue grew 28.52% to ₹171.22 cr but PAT fell to ₹3.94 cr on ₹3.08 cr depreciation from new tablet line
- Management's tone
- Confident
- What was said
- Even-handed
- Guidance
- None given
- Analyst pushback
- Low
- Stock, next session
- +3.97% (Nifty 50 −1.83%)
- FY26 revenue grew 28.52% to ₹171.22 cr from ₹133.32 cr on higher utilisation, new products, domestic penetration and export expansion.
- PAT fell to ₹3.94 cr from ₹7.16 cr as depreciation rose by ₹3.08 cr after commissioning of the new tablet manufacturing line.
- Collection period cut from ~175 days to 143 days and inventory days from 135 to 122; debt-equity ratio fell from 0.93 to 0.75.
- Company is entering the chronic therapy segment in Cardio-Diabetes and Neuropsychiatry with products like Empagliflozin, Sitagliptin and Vildagliptin.
- New product approvals received in Afghanistan, Cambodia, Liberia and Myanmar; the company now works with over 25 global partners.
An AI read of the company's transcript · the filing
The numbers
What moved the numbers, as management explained it
- Revenue grew 28.52% on higher capacity utilisation, new product addition, domestic market penetration and entry into new geographies.
- Depreciation rose by ₹3.08 cr following the commissioning of the new tablet manufacturing line, pulling FY26 PAT down to ₹3.94 cr from ₹7.16 cr. (accounting)
- EBITDA grew only 7% to ₹17.26 cr against 28.52% revenue growth, signalling margin pressure during the capacity expansion phase.
- Working capital improved with collection period falling from ~175 to 143 days and inventory days from 135 to 122.
The numbers management led with
- Capital work-in-progress: ₹9.82 crore in FY26 vs ₹3.10 crore in FY25
- Collection period (days): Reduced from ~175 days to 143 days in FY26
- Global partners count: More than 25 global partners
The company's filed results for this quarter are not on file with us yet; these are management's own figures from the call.
Guidance
Guidance on this call
| What | For | What management said |
|---|---|---|
| Operating leverage improvement | FY27 | Expect a further improvement in the operating leverage as we scale up the production in the coming year. |
The business
Balance sheet, capex and funding
- Networth rose to ₹73.32 cr with debt-equity ratio reducing from 0.93 to 0.75.
- Capital work-in-progress stood at ₹9.82 cr (up from ₹3.10 cr) with additional investments in intangible assets for chronic therapy entry.
- Collection period cut to 143 days (vs ~175 days earlier) and inventory holding period to 122 days (vs 135 days).
The industry, as management sees it
Management views the Indian pharmaceutical sector as continuing to offer growth opportunities, with the chronic-therapy move plus existing business expected to expand the product portfolio and reach new markets.
Risks management named
- Profit after tax declined YoY due to higher depreciation from new tablet line commissioning
- Employee-related expenses rose as manufacturing activity expanded
Q&A
No shareholder questions were registered for this AGM; the Company Secretary explicitly noted that no speakers had registered. Consequently the entire AGM was effectively a one-way MD address followed by the procedural voting announcement. There is no live analyst or shareholder pushback to evaluate.
What was said
Topic by topic, in the order it was spoken
Welcome and Meeting Opening · Sandeep Bhardwaj (Managing Director)
- Opened the 26th AGM, confirmed quorum and introduced the board and auditors present.
- Annual Report and Notice for FY ended March 31, 2026 taken as read with members' permission.
- Statutory Auditor CA D. S. Dhing and Secretarial Auditor / Scrutinizer CS Geetika Agrawal present.
FY26 Financial Performance · Sandeep Bhardwaj (Managing Director)
- Revenue grew 28.52% to ₹171.22 cr vs ₹133.32 cr in FY25, driven by higher utilisation, new products, domestic penetration and new geographies.
- EBITDA up 7% to ₹17.26 cr from ₹16.18 cr; operating leverage expected to improve as new line ramps.
- Profit after tax fell to ₹3.94 cr from ₹7.16 cr, primarily on ₹3.08 cr higher depreciation from the new tablet manufacturing line.
- Working capital improved: collection period cut from ~175 to 143 days; inventory holding from 135 to 122 days.
- Balance sheet strengthened: networth ₹73.32 cr; debt-equity ratio down to 0.75 from 0.93.
Capacity Expansion and Capital Investment · Sandeep Bhardwaj (Managing Director)
- Capital work-in-progress rose to ₹9.82 cr from ₹3.10 cr, reflecting investments in new manufacturing capacity.
- Intangible assets also stepped up as the company prepared for entry into the chronic therapy segment.
- New tablet manufacturing line is moving towards full-scale production.
Entry into Chronic Therapy · Sandeep Bhardwaj (Managing Director)
- Foray planned into chronic therapy focused on Cardio-Diabetes and Neuropsychiatry.
- Product pipeline named: Empagliflozin, Empagliflozin+Metformin, Sitagliptin, Sitagliptin+Metformin, Vildagliptin, Vildagliptin+Metformin, Ticagrelor.
- Framed as long-term investment to expand product portfolio and create additional capacity.
Global Footprint Expansion · Sandeep Bhardwaj (Managing Director)
- New product approvals secured during the year in Afghanistan, Cambodia, Liberia and Myanmar.
- Company now works with more than 25 global partners; management focused on growing export revenue to lift margins and de-risk geography.
- Strategy to balance domestic reach with international diversification.
Four Strategic Pillars · Sandeep Bhardwaj (Managing Director)
- Pillar 1 — Working Capital Management: optimise cash flows by shortening collection and inventory periods.
- Pillar 2 — Capacity Utilisation: scale new tablet line to drive operating leverage.
- Pillar 3 — Product Expansion: launch new formulations in high-value chronic therapy (Cardio-Diabetes, Neuropsychiatry).
- Pillar 4 — Market Penetration: deepen domestic reach and grow exports across new geographies.
People, Community and Board Acknowledgements · Sandeep Bhardwaj (Managing Director)
- Employee-related expenses rose alongside manufacturing expansion and new product line preparation.
- Initiatives underway on upskilling labour and introducing a grading system for process and quality checks.
- Thanks recorded for employees, fellow directors Bhupesh Soni and Ajay Singh Dassundi, and other stakeholders.
In their words
The reduction in profit was primarily on account of increase in depreciation following the commissioning of our new tablet manufacturing line. Depreciation increased by ₹3.08 crore during the year.
Last year, we completed 25 years of Zenith Drugs. We are now entering the next phase of our journey with a clear focus on growth, capacity expansion and new products.
The management is focussed on growing the export business to boost top-line revenue, improve margins, and de-risk geographic exposure.
To check next time
What management committed to on this call, or the dates they gave.
- Progress in ramping the new tablet manufacturing line to full-scale production
- Launches of Empagliflozin, Sitagliptin, Vildagliptin and combinations in chronic therapy
- Operating leverage benefit as the new tablet line scales up
- Revenue traction from new approvals in Afghanistan, Cambodia, Liberia and Myanmar
- Depreciation trajectory after the new tablet line commissioning (added ₹3.08 cr in FY26)
Transcript
We have not transcribed this call's recording. Read the company's transcript (PDF).
The stock after the call
| After the call | Close | Stock | Nifty 50 |
|---|---|---|---|
| Next session Tue 29 Sept 2026 | ₹44.50 | +3.97% | −1.83% |
| 5 sessions Tue 6 Oct 2026 | ₹42.05 | −1.75% | −1.57% |
From the close of Fri 25 Sept 2026, ₹42.80: the close before the call day (the call's time is not on file). Adjusted daily closes; the move includes everything else that happened in those sessions.