BROOKS - Brooks Lab.

📊 NSE: BROOKS 🏢 Pharmaceuticals - Indian - Bulk Drugs & Formln 📅 Last Updated: 12/13/2025 19:56

💰 Financial Performance

Revenue Growth by Segment

The company operates in two segments: Manufacturing and Trading. For the half-year ended September 30, 2025, Manufacturing revenue reached INR 4,652.08 Lakhs, representing approximately 95% of total segment revenue, while Trading revenue contributed INR 244.18 Lakhs. Total Operating Income (TOI) grew from INR 79.48 Cr in FY24 to INR 83.04 Cr in FY25, a growth of 4.48% YoY.

Geographic Revenue Split

Not explicitly disclosed in percentage terms; however, operations are concentrated in India with the registered office and manufacturing works located in Baddi, Himachal Pradesh, and corporate offices in Mumbai, Maharashtra.

Profitability Margins

Profitability showed significant improvement with PAT margins rising from 1.90% in FY24 to 3.68% in FY25. For H1 FY26, the company's share of profit from its joint venture, Brooks Steriscience Limited, was INR 1,267.38 Lakhs, which significantly bolsters consolidated net profitability.

EBITDA Margin

The PBILDT margin improved by 117 basis points, increasing from 4.86% in FY24 to 6.03% in FY25. This improvement was driven by better operational efficiencies and stronger supplier negotiations which lowered purchase costs.

Capital Expenditure

The company strengthened its liquidity through a successful rights issue in 2023, increasing share capital from INR 2,624.67 Lakhs to INR 2,945.72 Lakhs. Specific planned CAPEX for FY26 is not disclosed, but the focus remains on scaling the manufacturing segment.

Credit Rating & Borrowing

The long-term bank facilities rating was upgraded to CARE BB; Stable from CARE BB-; Stable in November 2025. Short-term facilities are rated CARE A4. Total rated bank facilities amount to INR 12.00 Cr (INR 7.80 Cr long-term and INR 4.20 Cr short-term).

⚙️ Operational Drivers

Raw Materials

Pharmaceutical ingredients and chemicals required for manufacturing formulations; specific chemical names are not disclosed, but they represent a significant portion of the manufacturing cost base.

Import Sources

Not specifically disclosed in the documents.

Key Suppliers

Not specifically named; however, the company noted that 'stronger supplier negotiations' are expected to drive higher profit margins in FY26 by reducing procurement costs.

Capacity Expansion

Current manufacturing operations are based in Baddi, HP. While specific MTPA capacity is not disclosed, the company is targeting a scale-up to reach a TOI of ~INR 100.00 Cr in FY26, implying increased utilization or capacity debottlenecking.

Raw Material Costs

Raw material costs are a primary driver of the 6.03% PBILDT margin. Management's strategy to improve margins relies on reducing these costs through bulk procurement and better credit terms with vendors.

Manufacturing Efficiency

Efficiency is reflected in the improvement of PBILDT margins from 4.86% to 6.03%. The company is focusing on manufacturing over trading to capture higher value-added margins.

Logistics & Distribution

Not specifically disclosed as a percentage of revenue.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

The company aims to achieve a TOI of INR 100 Cr in FY26 (up from INR 83 Cr) by focusing on its manufacturing segment, optimizing supplier costs to improve margins, and benefiting from the licensing income and operational scale of its Joint Venture, Brooks Steriscience Limited.

Products & Services

Pharmaceutical formulations, medicines, and licensing of pharmaceutical products/intellectual property through its joint venture.

Brand Portfolio

Brooks Laboratories, Brooks Steriscience.

New Products/Services

Licensing income from the JV (INR 3,913.14 Lakhs in H1 FY26) indicates a shift toward high-margin intellectual property and specialized pharmaceutical products.

Market Expansion

The company is leveraging its JV to expand its reach, with the JV recording revenue of INR 6,782.45 Lakhs in just six months.

Market Share & Ranking

Not disclosed; company is characterized as having a 'small scale of operations' in a competitive industry.

Strategic Alliances

Joint Venture with Brooks Steriscience Limited, where Brooks Laboratories holds a significant stake and shares 50% of the profit after tax (INR 1,267.38 Lakhs share in H1 FY26).

🌍 External Factors

Industry Trends

The pharmaceutical industry is evolving toward higher compliance standards and specialized formulations. Brooks is positioning itself by shifting focus to manufacturing and leveraging JV licensing income, which grew to represent a major portion of JV revenue (INR 3,913.14 Lakhs).

Competitive Landscape

Operates in a fragmented and highly competitive market with numerous domestic and international pharmaceutical players.

Competitive Moat

The moat is based on the 'established track record of operations' and 'experienced promoters'. However, the moat is narrow given the small scale and high competition, making the JV's performance critical for sustainability.

Macro Economic Sensitivity

Sensitive to healthcare spending and pharmaceutical regulatory policies in India.

Consumer Behavior

Increased demand for quality pharmaceutical formulations and specialized medicines.

Geopolitical Risks

Potential trade barriers or regulatory changes affecting pharmaceutical exports or raw material imports from global suppliers.

⚖️ Regulatory & Governance

Industry Regulations

Subject to stringent pharmaceutical manufacturing standards and periodic inspections. The company must comply with Ind AS 108 for segment reporting and other statutory requirements under the Companies Act 2013.

Environmental Compliance

Not specifically disclosed in INR values.

Taxation Policy Impact

The company has not recognized deferred tax assets on business losses/depreciation due to a lack of 'reasonable certainty of taxable profit', indicating a conservative but cautious tax position.

Legal Contingencies

The Auditor's Report (CARO 2024-25) noted qualifications/adverse remarks under Clause 3(ii)(b) and 3(vii)(b) for the holding company, and several clauses for the JV, indicating some areas of regulatory or internal control friction.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the 'absence of reasonable certainty of taxable profit', which prevents the recognition of deferred tax assets. Additionally, the reliance on the JV for a significant portion of consolidated profits (INR 12.67 Cr in H1 FY26) creates a dependency risk.

Geographic Concentration Risk

High concentration in Baddi, Himachal Pradesh for manufacturing operations.

Third Party Dependencies

High dependency on the performance of the Jointly Controlled Entity, Brooks Steriscience Limited, for consolidated bottom-line growth.

Technology Obsolescence Risk

The company is maintaining an 'audit trail' feature in its accounting software since April 2023 to comply with new regulations, showing a commitment to digital compliance.