Concord Biotech reported a steady Q3 FY26 performance with revenues growing 14% YoY to ₹278 crores, while 9-month revenues declined 5% due to H1 headwinds like U.S. tariff uncertainty and CDSCO delays. The company is optimistic about Q4, expects FY27 normalization, and highlighted the receipt of WHO GMP certification for its new injectable facility. Management discussed future growth drivers including injectables, CDMO expansion, and stabilizing margins post-startup costs.
Q3 FY26 Performance Summary
Concord Biotech delivered a steady performance in the third quarter of FY26, reporting revenues of INR 278 crores, marking a 14% year-on-year growth. However, for the 9-month period, revenues declined by 5%, primarily attributed to headwinds faced in H1, including U.S. tariff uncertainty, delays in written confirmation from CDSCO, and deferral of tender-based supplies in the Middle East.
Management characterized these headwinds as timing-related rather than structural. The company anticipates Q4 will be stronger, with a full normalization of performance expected in FY ’27, returning to historical average momentum.
Key Operational Updates and Growth Drivers
Management highlighted several strategic developments:
- U.S. Subsidiary (Stellon Biotech): Engagement has increased following clarifications that U.S. tariffs do not apply to generic products, leading to advanced discussions for second-source supply and CDMO partnerships.
- Injectable Facility: The facility recently received WHO GMP certification, enabling sales in the domestic market via the company’s own brand and contract manufacturing. This facility has a peak revenue potential of approximately INR 600 crores.
- Domestic Expansion: Concord Lifegen Limited, a wholly-owned subsidiary, was incorporated to strengthen marketing and sales capabilities, specifically to tap into government institutions and smaller nursing homes previously inaccessible.
- Pipeline: Plans remain to launch two new anti-infective products during the current year.
Financial Margins and Capex
Profitability for the 9-month period was impacted by start-up costs associated with the injectable facility commercialization.
- Excluding these impacts, EBITDA margins stood at 40% for both Q3 and the 9-month period.
- Q3 EBITDA was INR 99 crores, compared to INR 98 crores in the previous year.
- Capex for the year is estimated to be in the range of INR 30 crores to INR 40 crores (maintenance), although some growth capex for newer projects is also occurring, leading to a possible total spend closer to the INR 100 crores to INR 150 crores range discussed (this figure was clarified to include growth capex alongside maintenance).
Segmental Deep Dive (Q3 FY26)
Segmental revenue breakdown for Q3 FY26 (excluding interunit sales):
- API Revenue: Stood at INR 219 crores, a 24% growth YoY (against INR 177 crores last year). Growth was driven primarily by volume, not pricing, across existing molecules.
- Formulation Revenue: Stood at INR 58 crores, compared to INR 68 crores in Q3 FY25. The decline was partially explained by certain API opportunities being addressed directly rather than via the formulation route in emerging markets.
Capital Position and Future Strategy
The company confirmed it is a zero-debt company. Cash and cash equivalents as of December 31, 2025, were clarified to be close to INR 350 crores (a correction was made from an initial mention of INR 1,263 crores). The management is actively looking at both organic and inorganic opportunities to utilize this strong cash position.
The focus for the non-immunosuppressant portfolio (anti-infectives, antifungal, onco) remains on niche, complex products with limited competition, maintaining a mix similar to historical levels (approx. 70%-75% contribution from immunosuppressants to API business).
Capacity Utilization (Q3)
Unit utilization figures for the quarter were:
- Unit 1: 81%
- Unit 3: 40%
- Unit 2: 27%
Source: BSE
