💰 Financial Performance

Revenue Growth by Segment

The company operates in a single segment, Pharmaceuticals, which grew 6.22% in FY25 to INR 405.51 Cr from INR 381.76 Cr in FY24. However, Q2 FY26 revenue of INR 77.99 Cr represents a 33.3% YoY decline from INR 117.01 Cr in Q2 FY25 due to export order delays and market imitations.

Geographic Revenue Split

Exports contribute approximately 25-30% of total revenue, while the remaining 70-75% is derived from the domestic Indian market. Export revenue was specifically impacted in Q4 FY25 due to a temporary halt from a major customer.

Profitability Margins

Net Profit After Tax (PAT) margin declined from 11.35% in FY23 to 7.27% in FY25. The company reported a net loss margin of 4.0% (INR -3.1 Cr) in Q2 FY26 compared to a profit margin of 14.6% (INR 17.1 Cr) in Q2 FY25, driven by higher employee costs and JV losses.

EBITDA Margin

EBITDA margin (excluding other income) stood at 12.10% in FY25, down from 13.93% in FY24. In Q2 FY26, the EBITDA margin turned negative at -4.6% (INR -3.6 Cr loss) compared to 12.2% (INR 14.3 Cr profit) in Q2 FY25, reflecting a 137% drop in operating profitability.

Capital Expenditure

Not disclosed in available documents, though the company is investing in building teams for its new hospital segment, which increased employee costs in FY25.

Credit Rating & Borrowing

The company maintains a credit rating constrained by moderate scale. Positive rating action is tied to achieving a PBILDT margin exceeding 16% and interest coverage above 4x. Finance costs for the half-year ended September 2025 were INR 5.23 Cr.

⚙️ Operational Drivers

Raw Materials

Synthetic Active Pharmaceutical Ingredients (APIs) and formulation excipients represent approximately 30-40% of the total cost structure. Raw material costs in FY25 were INR 131.99 Cr, a slight decrease from INR 136.71 Cr in FY24.

Import Sources

The company imports 5-10% of its total raw material purchases from international markets, providing a partial natural hedge against its 25-30% export revenue.

Key Suppliers

Not disclosed in available documents; however, the company maintains a moderately concentrated supplier base.

Capacity Expansion

The Richter Themis Medicare JV facility, which suffered a fire in November 2024, resumed operations in January 2025 with limited capacity. Full capacity restoration timelines are not specified.

Raw Material Costs

Raw material costs as a percentage of revenue stood at approximately 32.5% in FY25. Procurement is susceptible to price volatility, which directly impacts the PBILDT margin, currently at 13.10%.

Manufacturing Efficiency

Manufacturing efficiency was negatively impacted by a fire incident at the Richter Themis Medicare JV on November 7, 2024, which led to significant losses and reduced capacity utilization through early 2025.

Logistics & Distribution

Other expenses, including incremental travel and marketing costs for the hospital segment, contributed to the decline in operating margins to 12.10% in FY25.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

Growth is targeted through the expansion of the hospital segment, building specialized teams, and leveraging core competence in synthetic APIs and finished formulations. Management is also focusing on clearing export order backlogs and addressing market imitations.

Products & Services

The company sells finished pharmaceutical formulations and synthetic Active Pharmaceutical Ingredients (APIs). It is also expanding into hospital-segment-specific pharmaceutical services.

Brand Portfolio

Richter Themis (Joint Venture).

New Products/Services

The company is launching a dedicated hospital segment, which required an increase in employee costs in FY25 to build out the necessary sales and clinical teams.

Market Expansion

Targeting increased penetration in export markets (currently 25-30% of revenue) and the domestic hospital segment.

Market Share & Ranking

Not disclosed in available documents; industry is described as highly fragmented and intensely competitive.

Strategic Alliances

Richter Themis Medicare (India) Private Limited is a key Joint Venture; its performance significantly impacts consolidated PAT (losses incurred in FY25 due to fire).

🌍 External Factors

Industry Trends

The pharmaceutical industry is currently growing but faces disruption from substandard imitations and intense price competition. Themis is positioning itself by moving into the hospital segment to find higher-margin niches.

Competitive Landscape

Intense competition from both large players and fragmented smaller manufacturers in the API and formulation space.

Competitive Moat

The company's moat is based on accredited manufacturing and R&D facilities and a long track record. However, this moat is currently under pressure from imitations of its high-margin products.

Macro Economic Sensitivity

Highly sensitive to input price volatility, with raw materials making up 30-40% of costs. A 10% increase in raw material costs could potentially swing the current marginal EBITDA into deeper losses.

Consumer Behavior

Shift toward hospital-channel pharmaceutical procurement is the primary trend the company is currently exploiting.

Geopolitical Risks

Export revenue (25-30%) is subject to international trade regulations and customer-specific stability, as evidenced by the Q4 FY25 export halt.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by manufacturing standards for accredited facilities. The company must comply with stringent quality controls to prevent imitations from eroding its market share.

Taxation Policy Impact

The effective tax rate is impacted by deferred tax adjustments; the company recorded a tax credit in Q2 FY26 due to losses.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the duration of the impact from substandard imitations, which caused a net loss of INR 14.22 Cr in Q1 FY26. JV recovery post-fire also remains a key variable.

Geographic Concentration Risk

Approximately 70-75% of revenue is concentrated in India, with the remaining 25-30% in export markets.

Third Party Dependencies

Dependency on the Richter Themis JV for specific product lines is high, as evidenced by the significant PAT decline following the JV's fire incident.

Technology Obsolescence Risk

The company is mitigating technology risks through its accredited R&D facilities and synthetic API manufacturing capabilities.

Credit & Counterparty Risk

Trade receivables stood at INR 168.68 Cr as of Sept 2025. Export customers have a credit period of ~90 days, while domestic buyers have ~60 days, leading to an elongated operating cycle of 186 days.