SHILPAMED - Shilpa Medicare

📊 NSE: SHILPAMED 🏢 Pharmaceuticals - Indian - Formulations 📅 Last Updated: 12/14/2025 13:12

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 7% YoY to INR 372 Cr in Q2 FY26 and 8% YoY to INR 700 Cr in H1 FY26. Segmental growth for H1 FY26: Non-captive API grew 19% YoY (INR 205 Cr in Q2), Formulations grew 16% YoY (INR 109 Cr in Q2), and Biologics recorded INR 61 Cr revenue. Base business formulations (excluding licensing) grew 60% in Q2 and 67% in H1 FY26.

Geographic Revenue Split

In FY25, EU region formulations revenue was INR 110.67 Cr (up 28.8% from INR 85.91 Cr in FY24), while US region revenue was INR 47.55 Cr (down 12% from INR 54.02 Cr in FY24).

Profitability Margins

Gross margin improved to 72% in Q2 FY26 and 74% in H1 FY26. Net Profit (PAT) for H1 FY26 was INR 91 Cr, already surpassing the full-year FY25 PAT of INR 78.29 Cr. Standalone Net Profit Ratio improved from 6.34% in FY24 to 12.09% in FY25.

EBITDA Margin

EBITDA margin reached 30% in Q2 FY26 (up 4% YoY) and 30% in H1 FY26 (up 3% YoY). EBITDA for Q2 FY26 crossed the INR 100 Cr landmark for the first time, reaching INR 110 Cr (up 21% YoY).

Capital Expenditure

Net Capex for H1 FY26 was INR 153 Cr, primarily directed toward the Albumin facility and API capacity expansion. FY25 full-year capex was INR 216 Cr.

Credit Rating & Borrowing

Net debt stood at INR 569 Cr as of September 2025. Net Debt to EBITDA ratio improved to 1.4x in H1 FY26 from 1.6x in FY25. Standalone Debt Equity Ratio was 0.04x in FY25.

⚙️ Operational Drivers

Raw Materials

Not disclosed in available documents; however, the company emphasizes 'smarter sourcing' to maintain margins.

Capacity Expansion

Current Gross Block is INR 2,049 Cr as of H1 FY26, up from INR 1,991 Cr in FY25. Expansion is focused on a new Albumin fermentation facility and API capacity enhancements.

Raw Material Costs

Not disclosed as a specific percentage of revenue, but gross margins of 74% in H1 FY26 indicate a raw material cost of approximately 26% of revenue.

Manufacturing Efficiency

Adjusted ROCE (excluding Biologics/NBE) improved significantly from 4% in FY23 to 17.2% in H1 FY26, reflecting improved operating leverage.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

The company plans to monetize significant investments in Biologics, Transdermal, and Albumin fermentation facilities over the next 3-5 years. Growth is driven by increasing market share in complex FDF products in the US and EU, and the launch of novel products like NorUDCA.

Products & Services

Oncology and CNS therapies, novel drug NorUDCA (for NAFLD), Adalimumab (biosimilar), Albumin, and high-quality generic formulations and APIs.

Brand Portfolio

Shilpa Medicare, Shilpa Pharma Lifesciences, Shilpa Biologicals.

New Products/Services

Novel product NorUDCA for NAFLD (supply price model) and Adalimumab biosimilar. Base business growth of 60% in Q2 FY26 was driven by complex product portfolio scale-up.

Market Expansion

Targeting US and EU markets with complex FDF products and limited competition products. Phase III trials for NorUDCA are planned for Europe and the US.

Market Share & Ranking

The company has achieved 'decent market share' in Adalimumab despite a late launch; specific ranking not disclosed.

Strategic Alliances

Licensing model involves partnering with global pharmaceutical companies for commercialization in the US and EU, earning upfront fees, milestones, and supply revenue.

🌍 External Factors

Industry Trends

The pharmaceutical industry is shifting toward specialty drugs, oncology, and global partnerships. Shilpa is positioning itself in complex generics and biosimilars to capture this 15-20% industry growth trajectory.

Competitive Landscape

Shilpa is the first company to treat NAFLD with NorUDCA in India, providing a first-mover advantage in a high-patient-volume market.

Competitive Moat

Moat is built on IP creation, technical know-how in complex developments, and a strong R&D team. The company leverages a low-capital, high-margin licensing strategy for niche generics.

Consumer Behavior

Increasing demand for complex specialty drugs and biosimilars globally.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to various audit systems to monitor efficacy and adequacy of internal control systems and compliance with operating procedures.

Taxation Policy Impact

Effective tax rate for FY25 was approximately 36% based on Consolidated PBT of INR 122.33 Cr and PAT of INR 78.29 Cr.

⚠️ Risk Analysis

Key Uncertainties

Uncertainties include the successful monetization of large unutilized capacities in Biologics and the timing of Phase III trials for NorUDCA in US/EU markets.