Neuland Laboratories Q2 FY27 results: net profit down 46.7% to ₹51.62 crore, revenue down 12.6%

How did Neuland Laboratories perform in Q2 FY27?

Neuland Laboratories reported consolidated revenue of ₹449.66 crore for Q2 FY27, down ₹64.61 crore or 12.6% from ₹514.27 crore in Q2 FY26. Total income was ₹457.15 crore, down ₹58.92 crore or 11.4% year on year and ₹192.92 crore or 29.7% lower than ₹650.07 crore in Q1 FY27.

EBITDA fell to ₹97.56 crore from ₹155.55 crore a year earlier and ₹222.89 crore in the previous quarter, and the margin narrowed to 21.7% from 30.2% and 34.7%. Profit before tax was ₹68.98 crore and net profit was ₹51.62 crore, against ₹129.44 crore and ₹96.85 crore in Q2 FY26 and ₹197.85 crore and ₹147.67 crore in Q1 FY27. Basic EPS was ₹40.24.

On the standalone basis, revenue was ₹449.66 crore and profit after tax was ₹51.13 crore, with profit before tax of ₹96.46 crore. The company filed both standalone and consolidated unaudited results for the quarter and half year ended 30 September 2026, and the auditor's review report was not modified in respect of two subsidiaries whose information was not audited.

What changed in Neuland Laboratories' costs and profit?

Total expenses were ₹388.17 crore, ₹1.53 crore or 0.4% higher than ₹386.64 crore in Q2 FY26, as lower cost of materials was offset by higher employee, finance, depreciation and other expenses. Cost of materials fell ₹11.85 crore or 5.2% to ₹215.79 crore, while employee cost rose ₹21.39 crore or 26.6% to ₹101.76 crore.

Other expenses were up ₹4.53 crore or 4.8% at ₹99.28 crore, finance costs rose ₹1.94 crore or 36.1% to ₹7.31 crore, and depreciation was up ₹6.23 crore or 27.6% at ₹28.77 crore. Other income was ₹7.50 crore, up ₹5.70 crore or 316.7% from ₹1.80 crore, and there was no exceptional item in either quarter.

Tax expense fell ₹15.23 crore or 46.7% to ₹17.35 crore. The profit after tax margin was 11.5%, down 7.3 percentage points from 18.8% in Q2 FY26, and basic EPS fell ₹35.25 to ₹40.24. Management attributed the lower quarterly EBITDA margin to operating deleverage.

How did the first half of FY27 go?

For the first half of FY27, consolidated revenue was ₹1,091.23 crore against ₹807.03 crore in H1 FY26, a rise of ₹284.20 crore or 35.2%. Total income was ₹1,107.22 crore, up ₹290.54 crore or 35.6% from ₹816.68 crore.

Profit before tax was ₹266.83 crore, up ₹119.82 crore or 81.5% from ₹147.01 crore, and net profit was ₹199.30 crore, up ₹88.55 crore or 80.0% from ₹110.75 crore. Basic EPS for the half year rose ₹69.02 to ₹155.34 from ₹86.32.

What do the balance sheet and cash flow show?

Total assets were ₹3,029.56 crore as at 30 September 2026 against ₹2,930.14 crore as at 31 March 2026, and total equity was ₹2,029.71 crore against ₹1,874.47 crore. Borrowings rose to ₹342.31 crore from ₹196.61 crore, while cash fell to ₹53.66 crore from ₹76.67 crore. Inventories were ₹552.10 crore against ₹510.29 crore, trade receivables ₹294.30 crore against ₹541.35 crore, and trade payables ₹208.62 crore against ₹269.14 crore.

Operating cash flow for H1 FY27 was ₹361.56 crore, compared with negative ₹36.75 crore in H1 FY26. Investing cash flow was negative ₹369.92 crore against negative ₹52.20 crore, financing cash flow was negative ₹14.43 crore against negative ₹1.93 crore, and capital expenditure was ₹260.60 crore against ₹165.42 crore.

How has Neuland Laboratories done over the last 8 quarters?

Revenue over the last eight quarters peaked at ₹776.25 crore in Q4 FY26 and bottomed at ₹292.75 crore in Q1 FY26, then rose to ₹641.58 crore in Q1 FY27 before falling to ₹449.66 crore in Q2 FY27. Net profit followed a similar path, peaking at ₹212.67 crore in Q4 FY26 and bottoming at ₹13.90 crore in Q1 FY26.

The EBITDA margin reached 39.6% in Q4 FY26 and fell to 11.8% in Q1 FY26, before recovering to 34.7% in Q1 FY27 and easing to 21.7% in Q2 FY27. Revenue, profit and margin all moved lower in the latest quarter from the Q4 FY26 peak.

What else did the company announce?

The board approved the unaudited standalone and consolidated financial results for the quarter and half year ended 30 September 2026, along with the limited review reports of the statutory auditors. It also approved capital expenditure of ~₹47.1 crores towards acquisition of a land parcel admeasuring Ac.6-00 Gts in Domadugu Village, Sangareddy District, Telangana, including other related expenditure.

The board stated the land investment would be financed through internal accruals and gave the rationale as future capacity expansion, with proposed capacity addition listed as not applicable. The company had earlier informed the exchanges on 22 October 2026 that the trading window in its equity shares would remain closed from 1 October 2026 until 48 hours after the results were declared. No dividend or appointment was disclosed in the same-day filings.

What did Neuland Laboratories' management say?

Chief executive and managing director Saharsh Davuluri said H1 FY27 was largely in line with plan and that growth expectations remained intact for FY27 and the following year. He said commercial CMS molecules continue to drive near-term growth, while RFP activity and Big Pharma traction support customer diversification and the longer-term pipeline, and that investments in peptides, R&D and land acquisition strengthen capabilities.

Management said CMS revenues were driven by commercial molecules and expected growth in new project orders that will be delivered over the course of this and next financial years. In the Prime segment, Ezetimibe and Mirtazapine were the key molecules, and Ezetimibe is likely to drive growth of the Prime segment. The Specialty business was driven by Deferasirox, Apixaban and Donepezil, and two DMFs were filed for Fezolinetant and Ivacaftor.

Management highlighted Q2 operating deleverage, revenue concentration and capital expenditure as watchpoints. It reported working capital efficiency improving, with working capital days reducing to 104 days in H1 FY27 from 155 days at H1 FY26, driven largely by lower inventory days and receivable days. Capex cash outflow of Rs. 261 Cr was largely driven by the new R&D and peptide block, and 2026 milestones include the new Peptide Facility becoming operational and the planned inauguration and relocation to the new CMC Center for Process Research.

How did Neuland Laboratories shares react?

The results were filed after market hours. From the price when the filing appeared, the stock was up 5.5% after 5 minutes, 6.6% after 15 minutes and 5.6% after 30 minutes. It closed the first session that could trade on the news up 1.0% from the pre-results close of ₹19,430.0, and by the next day's close it was up 1.9% from that same close.

On the reaction day the Pharmaceuticals sector's median move was 0.8% and the Nifty Smallcap 250 was up 2.0%, so the stock's excess move over the sector was 0.2 percentage points. By the next day's close the excess move over the sector was 0.3 percentage points, with the sector median up 1.6%. Earlier reaction-day moves were 7.9% on 5 August 2026, -2.9% on 12 May 2026, -3.2% on 9 February 2026 and 1.5% on 7 November 2025.

How did other Pharmaceuticals companies do?

Among 77 Pharmaceuticals companies that have filed for the quarter as of 6 November 2026, the median revenue growth was 18.9%. Eight peers grew slower than Neuland Laboratories and 69 grew faster than the company.

Of the 73 peers for which profit was compared, 50 reported higher profit. Neuland Laboratories' consolidated revenue growth of 12.6% in Q2 FY27 was below the industry's median revenue growth of 18.9%.