MARKSANS - Marksans Pharma

📊 NSE: MARKSANS 🏢 Pharmaceuticals - Indian - Formulations 📅 Last Updated: 12/14/2025 9:37

💰 Financial Performance

Revenue Growth by Segment

The US and North America segment grew 28.8% YoY in H1 FY26, reaching INR 714.8 Cr. The OTC segment overall has shown significant growth, crossing the INR 2,000 Cr revenue mark in FY25, representing a 4.6x growth since 2017. UK and EU formulation recorded revenue of INR 245 Cr in Q2 FY26, while Australia and New Zealand recorded INR 61.3 Cr.

Geographic Revenue Split

As of H1 FY26, the US and North America market is the largest contributor at 53% (INR 714.8 Cr), followed by the UK and EU market at 34% (INR 449 Cr). Australia and New Zealand and the Rest of the World (RoW) contribute the remaining 13%.

Profitability Margins

Gross margins stood at 57.2% in Q2 FY26, a decline of 258 bps YoY from 59.7% due to product mix and pricing pressure in the UK. Net Profit Margin for Q2 FY26 was 13.4%, down 161 bps YoY. For FY25, the consolidated Net Profit margin was 14.59%.

EBITDA Margin

EBITDA margin for Q2 FY26 was 20.1%, a decrease of 108 bps YoY but an improvement of 391 bps QoQ due to operating leverage. H1 FY26 EBITDA margin was 18.2%, down 318 bps YoY, reflecting higher employee expenses at the newly acquired Unit 2 and elevated freight costs.

Capital Expenditure

The company is doubling its low-cost manufacturing capacity in India from 8 billion to 16 billion units. Total manufacturing capacity has already increased from 6 billion units p.a. in 2017 to 26 billion units p.a. following the acquisition of the Teva facility in Goa.

Credit Rating & Borrowing

Long-term bank facilities (INR 135 Cr) were upgraded to CARE AA-; Stable from CARE A+; Positive in October 2025. Short-term bank facilities (INR 120.75 Cr) were reaffirmed at CARE A1+. The company maintains a comfortable solvency position with an overall gearing of 0.12x as of March 31, 2024.

⚙️ Operational Drivers

Raw Materials

Specific API names are not disclosed, but Cost of Goods Sold (COGS) represented 43.6% of total revenue in FY25, amounting to INR 1,143.74 Cr, an increase of 10.17% YoY.

Capacity Expansion

Current total manufacturing capacity is 26 billion units p.a. Planned expansion involves doubling the India-based low-cost capacity from 8 billion to 16 billion units to support the goal of reaching INR 3,000 Cr revenue.

Raw Material Costs

Raw material costs (COGS) were INR 1,143.74 Cr in FY25. While COGS increased by 10.17%, this was lower than the 20.46% revenue growth, indicating efficient procurement or better product mix during that period.

Manufacturing Efficiency

Operating leverage is a key driver, with EBITDA margins improving sequentially by 391 bps in Q2 FY26 as the Teva facility (Unit 2) ramps up production and revenue grows.

Logistics & Distribution

Freight costs are noted as 'elevated' due to the Red Sea crisis, impacting the PBILDT margins in recent quarters.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

The company aims to reach INR 3,000 Cr revenue by doubling US/North America revenue and becoming a top 5 private label OTC company in that region. Strategy includes doubling India manufacturing capacity, expanding into Germany (organic operations), and launching new products in digestive and pain management segments.

Products & Services

Tablets (plain, enteric-coated, film-coated), hard capsules, soft gelatin capsules, oral liquids, and ointments primarily for the OTC and prescription markets.

Brand Portfolio

Bells, Sons & Co, Relonchem, Time Cap Laboratories, and Nova Pharmaceuticals.

New Products/Services

New product launches in digestive and pain management segments drove a 27% YoY revenue increase in the US market during Q2 FY26. The company maintains a healthy pipeline of ANDAs.

Market Expansion

Plans to start organic operations in Germany, requiring investment in personnel and regulatory filings. It also recently acquired Access Healthcare in Dubai to expand its footprint.

Market Share & Ranking

Aims to become one of the top 5 private label OTC companies in the US and North America region.

Strategic Alliances

Strategic focus on acquisitions such as the Teva Pharma India facility and partnerships in key global markets to widen the portfolio.

🌍 External Factors

Industry Trends

The pharmaceutical industry is seeing a shift toward OTC segments; Marksans' OTC revenue grew 4.6x since 2017 to INR 2,066 Cr. The industry remains highly regulated by bodies like the US FDA and UK MHRA.

Competitive Landscape

Faces competition from established players in new geographic markets; mitigated by R&D and a diversified product portfolio of 1,500+ SKUs.

Competitive Moat

Moat is built on low-cost manufacturing at scale (26 bn units), a diversified geographic presence (US, UK, Australia), and a strong track record of successful acquisitions and regulatory compliance.

Macro Economic Sensitivity

The US region demonstrated resilience amid macro challenges, with revenue growing 27% YoY in Q2 FY26 despite stabilizing tariff conditions.

Consumer Behavior

Robust demand in key markets for digestive and pain management products is driving sequential revenue growth of 16% in Q2 FY26.

Geopolitical Risks

The Red Sea crisis is specifically cited as a factor elevating freight costs and impacting margins.

⚖️ Regulatory & Governance

Industry Regulations

Facilities are approved by UK MHRA, US FDA, and Australian TGA. The Goa facility recently underwent GMP audits by these authorities.

Environmental Compliance

Facilities operate in adherence to environmental norms including effluent treatment. The company is investing in green chemistry and energy-efficient systems.