Zim Laboratories Q2 FY27 results: net loss widens to ₹2.05 crore, revenue up 18.9%

How did Zim Laboratories perform in Q2 FY27?

Zim Laboratories reported consolidated revenue of ₹105.45 crore for Q2 FY27, up 18.9% from ₹88.71 crore in Q2 FY26 and 12.0% from ₹94.18 crore in Q1 FY27. EBITDA was ₹5.43 crore, down 5.6% year on year but up 121.6% from ₹2.45 crore in the previous quarter. The EBITDA margin was 5.1%, compared with 6.5% a year earlier and 2.6% in Q1 FY27.

The company reported a net loss of ₹2.05 crore in Q2 FY27, compared with a net loss of ₹0.42 crore in Q2 FY26 and ₹4.02 crore in Q1 FY27. Loss before tax was ₹2.74 crore, against ₹0.34 crore in Q2 FY26 and ₹5.57 crore in Q1 FY27. Basic EPS was negative ₹0.38, compared with negative ₹0.09 and negative ₹0.75, respectively. On a standalone basis, revenue was ₹104.22 crore and the net loss was ₹2.14 crore.

What changed in Zim Laboratories' costs and profit?

Total expenses rose 21.3% to ₹110.49 crore in Q2 FY27 from ₹91.10 crore a year earlier. Cost of materials fell 6.1% to ₹40.84 crore, but employee cost increased 20.0% to ₹19.59 crore, finance costs rose 24.7% to ₹3.94 crore, depreciation increased 31.1% to ₹6.53 crore and other expenses rose 20.6% to ₹32.55 crore. Other income increased 12.7% to ₹2.30 crore from ₹2.04 crore, while there was no exceptional item.

Against Q1 FY27, total expenses were higher by ₹9.75 crore, or 9.7%. Cost of materials fell 6.8% to ₹40.84 crore and other expenses fell 1.6% to ₹32.55 crore, while employee cost rose 2.1% to ₹19.59 crore, finance costs rose 8.2% to ₹3.94 crore and depreciation rose 21.6% to ₹6.53 crore. Other income increased from ₹0.99 crore to ₹2.30 crore, and there was no exceptional item.

Management said EU-GMP remediation, developed-market readiness and duplicated manufacturing weighed on costs. It also said the new Cepha plant was commissioned while production in the old cephalosporin unit stopped, and that the old ancillary nutraceutical Unit 3 was shut down with production shifted to a new facility to optimise utility and operating costs.

How did the first half of FY27 go?

In H1 FY27, consolidated revenue rose 24.4% to ₹199.62 crore from ₹160.47 crore in H1 FY26. Total income increased 23.7% to ₹202.92 crore from ₹163.99 crore, while loss before tax widened to ₹8.31 crore from ₹2.78 crore and the net loss widened to ₹6.07 crore from ₹2.30 crore. Basic EPS was negative ₹1.13, compared with negative ₹0.47.

Management said H1 operating income increased 24% and export revenue rose 24.7% year on year to ₹908 Mn in Q2 FY27, driven by increased supplies to RoW. It also said EBITDA margin was 5.6% for H1 FY27, citing readiness costs, EU-GMP remediation and duplicated manufacturing as contributing factors.

What do the balance sheet and cash flow show?

At 30 September 2026, total assets were ₹547.83 crore, against ₹539.39 crore at 31 March 2026. Total equity fell to ₹292.39 crore from ₹296.15 crore, while borrowings rose to ₹146.15 crore from ₹122.98 crore and cash fell to ₹6.01 crore from ₹25.12 crore. Inventories fell to ₹85.19 crore from ₹93.77 crore, trade receivables declined to ₹101.44 crore from ₹109.04 crore and trade payables fell to ₹65.07 crore from ₹72.93 crore.

H1 FY27 operating cash flow was ₹1.27 crore, compared with ₹19.92 crore in H1 FY26. Investing cash flow was negative ₹34.09 crore, compared with negative ₹15.57 crore, while financing cash flow was ₹14.17 crore, compared with negative ₹3.42 crore. Capital expenditure was ₹26.60 crore, against ₹15.87 crore in the year-ago period.

How has Zim Laboratories done over the last 8 quarters?

Revenue reached its highest level of the listed period at ₹108.73 crore in Q4 FY25 and its lowest at ₹71.76 crore in Q1 FY26. It has risen in each of the last two quarters, reaching ₹94.18 crore in Q1 FY27 and ₹105.45 crore in Q2 FY27.

Profit peaked at ₹4.88 crore in Q4 FY25 and bottomed at a net loss of ₹4.02 crore in Q1 FY27, before improving to a net loss of ₹2.05 crore in Q2 FY27. EBITDA margin peaked at 13.4% in Q4 FY25, fell to 2.6% in Q1 FY27 and recovered to 5.1% in Q2 FY27.

What else did the company announce?

The board approved the unaudited consolidated and standalone financial results for the quarter and half year ended 30 September 2026 on 4 November 2026. The filing included a limited review report from Deloitte Haskins & Sells LLP, which stated that nothing had come to its attention that required modification of the consolidated results. The same-day filings and their excerpts did not announce a dividend, fund raise or appointment.

What did Zim Laboratories' management say?

Management said the final response on the EU-GMP corrective and preventive action plan was being sent that week, with acceptance subject to satisfactory verification. It said EU-GMP consultant and CAPA remediation costs had mostly been incurred and were not expected to fully recur in H2 FY27.

Management said planning had started for supplies to the EU and UK through pre-ordering raw materials and preparing production. It added that three products were at the end of the EU marketing-authorisation process and were awaiting EU GMP certification for completion. Management said a leaner cost base and wider developed-market access could improve operating leverage.

Management identified EU-GMP recertification as a risk because acceptance remained subject to satisfactory verification. It also said developed-market business remained limited to RoW pending certification, resulting in under-utilisation of assets relative to investments made. The presentation said around ₹180 Mn had been spent over the previous 15 months on EU-GMP remediation and that Q2 FY27 R&D allocation was ₹99 Mn, including ₹45 Mn for bioequivalence studies, registrations and dossier work.

How did Zim Laboratories shares react?

After the filing appeared, the stock fell 1.5% within 5 minutes, 4.2% within 15 minutes and 5.2% within 30 minutes. From the previous close of ₹143.10, it closed the first session that could trade on the news 5.0% lower; by the next day’s close, it remained 5.0% below the pre-results close. No five-day move was available.