IPCALABNSEQ1 FY26August 14, 2025

IPCA Laboratories Limited

5,670words
115turns
13analyst exchanges
5executives
Management on call
A. K. K. Jain
MANAGING DIRECTOR, IPCA PCA ABORATORIES LIMITED LABORATORIES
Harish Ompany Secretary
IPCA LABORATORIES COMPANY ABORATORIES IMITED LIMITED
Nitin Itin Agarwal
DAM CAPITAL
A. K. Jain
Managing
Harish Kamath
Corporate Counsel and Company Secretary.
Key numbers — 40 extracted
10%
all. Our domestic business in the 1st Quarter of the current financial year has grown by around 10%. Ipca on mid-June 2025 has maintained its rank as 16th as per IQVIA. Overall, Ipca continued to i
7 bps
its market share. Compared to the 1st Quarter last financial year, mid- June 2024, there is around 7 bps increase in the overall market share from 2.01%-2.08% in mid-June 2025. Six brands of Ipca contin
2.01%
st financial year, mid- June 2024, there is around 7 bps increase in the overall market share from 2.01%-2.08% in mid-June 2025. Six brands of Ipca continue to remain in around top 30 brands in the coun
2.08%
ancial year, mid- June 2024, there is around 7 bps increase in the overall market share from 2.01%-2.08% in mid-June 2025. Six brands of Ipca continue to remain in around top 30 brands in the country.
Rs. 124 crore
business, our branded formulation business has grown by 10% in this particular quarter to around Rs. 124 crores from around Rs. 113 crores in last financial year in the 1st Quarter. Generic business in the qu
Rs. 113 crore
ulation business has grown by 10% in this particular quarter to around Rs. 124 crores from around Rs. 113 crores in last financial year in the 1st Quarter. Generic business in the quarter has delivered around
15%
s in last financial year in the 1st Quarter. Generic business in the quarter has delivered around 15% growth. Generic business has around Rs. 326 crores as against Rs. 283 crores in last financial ye
Rs. 326 crore
ter. Generic business in the quarter has delivered around 15% growth. Generic business has around Rs. 326 crores as against Rs. 283 crores in last financial year. API business has delivered around 12% growth.
Rs. 283 crore
he quarter has delivered around 15% growth. Generic business has around Rs. 326 crores as against Rs. 283 crores in last financial year. API business has delivered around 12% growth. There is some decline in t
12%
s. 326 crores as against Rs. 283 crores in last financial year. API business has delivered around 12% growth. There is some decline in the domestic business, but export business more particularly fro
23.82%
d of growth. On margin fronts: q1 FY '26 standalone Ipca has improved its margin from 23.82% as against 22.22% in Q1 FY '25. However, the consolidated EBITDA margins are at around 18.39% in
22.22%
margin fronts: q1 FY '26 standalone Ipca has improved its margin from 23.82% as against 22.22% in Q1 FY '25. However, the consolidated EBITDA margins are at around 18.39% in Q1 FY '26 as aga
Guidance — 20 items
Saion Mukherjee
qa
“What will be your guidance with respect to consolidated EBITDA margins?”
A. K. Jain
qa
“And overall, if you look at the whole of the financial year, our guidance for the consolidated number was around 9%-10% overall growth and overall margin increased by around 1% EBITDA margin.”
A. K. Jain
qa
“So, that will be slight change in the overall margin guidelines for the current year.”
A. K. Jain
qa
“Let us say, overall, as far as Unichem is also concerned, we are hopeful that there will be recovery.”
A. K. Jain
qa
“But we expect those kinds of recoveries to happen in the coming quarters.”
Rashmi
qa
“Sir, can you just revisit your guidance for each segment?”
Rashmi
qa
“You have already given EBITDA margin guidance for full year, but for all your domestic business as well as each of your export business and Unichem numbers for this full year?”
A. K. Jain
qa
“Rashmi, as far as the topline guidance is concerned, there is no change.”
A. K. Jain
qa
“Only if you have consolidated EBITDA margin, there would be a little bit lower than what the guidance was given.”
A. K. Jain
qa
“Instead of 100 bps increase, it will be about 75 bps.”
Risks & concerns — 12 flagged
This must be viewed in conjunction with risk that pharmaceutical business faces.
— A. K. Jain
There is some decline in the domestic business, but export business more particularly from Europe and Latin America, has done well and that has resulted in around 12% kind of growth.
— A. K. Jain
There is a marginal decline in that and overall, our standalone net profit is up by around 26% to around Rs.
— On margin fronts
So, on Unichem, we have seen decline in gross margin in this quarter.
— Saion Mukherjee
So, these are the two numbers where some decline is there.
— A. K. Jain
So, overall number-wise, the overall business growth is appearing to be 12%, but overall margin- wise, there is a decline because some of the profitable products, the market shares are lost.
— A. K. Jain
Sir, I was also asking about, because you had some competitive pressure in the US, was there any sort of shell stock adjustment or any such additional provisions that came in the quarter?
— Saion Mukherjee
But this year, the situation is difficult.
— A. K. Jain
Now, these have been a big drag on your financials.
— Kunal Randeria
So, probably, this year is going to be a difficult year as far as Onyx is concerned.
— A. K. Jain
And do you foresee margin expansion in domestic business every year going forward or there can be some years, let us say, next year could be a build-up year and then again, there could be some decline.
— Nikhil Mathur
On the Ipca standalone US business, can you call out the margin drag that is there?
— Nikhil Mathur
Q&A — 13 exchanges
Q
Yes. Thank you for taking my question. So, on Unichem, we have seen decline in gross margin in this quarter. Also, the overhead expenses for the consolidated business has gone up, which seem to have impacted the overall EBITDA margin. So, if you can explain the dynamics which is impacting the margin and in the backdrop of this quarter’s results, how are you seeing for the full year? What will be your guidance with respect to consolidated EBITDA margins?
A. K. Jain
As far as Unichem is concerned, Unichem US business has grown by around 12% and overall, the Unichem business has grown, consolidated number is around 9% growth. Some business has declined in their Asia and African markets, more particularly Asia market because of issue ongoing in Myanmar. From Rs. 23 crores, the business has come down to around Rs. 8 crores because certain import licenses are not received and the shipments could not happen during this particular period. The Brazil business is also down from Rs. 21 crores to around Rs. 14 crores. So, these are the two numbers where some declin
Q
Yes, sir. Thanks for the opportunity. So, just again on domestic formulation, if you could also share how the chronic and the acute growth has been for the quarter compared to IPM?
A. K. Jain
If you look at the overall IPM has grown by around 8%. And our growth is tracked by IQVIA as 11.6%. Acute growth was 6.8%. We have recorded a growth of 9.8%. And chronic IQVIA growth is around 9.9%. And IQVIA has recorded our growth as around 15.1%. So, 15.1% for Ipca and 9.9% for industry? Correct? No, I said 9.9% for industry and Ipca is 15.1%. Chronic? Yes, chronic. But our internal growth is low because of the overall, in case of cardiovascular therapy, there is a two more divisions are added in current years. And that has resulted in little bit lesser business. Overall, at the secondary l
Q
Yes, thanks for this opportunity, sir.
Management
Q
Yes. Is it, I am audible?
Management
Q
Yes. Thank you, sir. So, basically about the US business, so we had seen in the previous quarter around Rs. 20-Rs. 22 odd crores kind of incremental business for Ipca. So, how is the trend moving from that level and are we seeing any kind of incremental kind of visibility from our interaction what we would be having with the bulk buyers in the US market? See, in fact, I am seeing there is a relatively stronger generic growth. So, if you can go both the point I was connecting, so if you can give some clarity to those aspects?
A. K. Jain
Let us say, I have already indicated that whatever deal wins, which has happened so far, that indicates that almost around the annual turnover could be almost around $16 million as far as Ipca is concerned. And more number of products are being shipped there and there is almost around 3 quarters more are there. So, we will win definitely more number of deals and hopefully the business will move up further as far as Ipca is concerned.
Q
Yes, sir, thank you for the opportunity. So, just a clarification, what you are broadly indicating is that the 10% India formulations growth that we saw in the 1st Quarter seems like an aberration and that this would accelerate as we go along. Is that understanding correct, sir?
A. K. Jain
Yes, because our other therapies are growing faster and our main therapy, like say even with the pain management in this quarter, we have recorded a growth of around 13%. Understood. And sir, any sense on how the UK business has done for us for both the Ipca business as well as the Unichem business? And is there any change that is happening post the FDA that has been signed? How do you look at this development, positively, negatively? Just how are you thinking about this one? As far as FDA is concerned, that doesn't impact pharmaceuticals because there is hardly any change as far as the busine
Q
Yes, thanks for the opportunity. Sir, can you just revisit your guidance for each segment? You have already given EBITDA margin guidance for full year, but for all your domestic business as well as each of your export business and Unichem numbers for this full year?
A. K. Jain
Rashmi, as far as the topline guidance is concerned, there is no change. So, this quarter also the business has grown and hopefully by the end of the year also, we should be somewhere between 9%-10% topline growth. Only if you have consolidated EBITDA margin, there would be a little bit lower than what the guidance was given. Instead of 100 bps increase, it will be about 75 bps. But topline, we are not changing any guidance. Understood. And that is only because of basically lower margin from the Unichem? That is right. If you see our standalone business, the EBITDA margin is better than what w
Q
Thanks for the follow up. Just one clarification on Unichem. You called out Rs. 12 crores currency fluctuation and Rs. 10 crores additional impact because of the Euro provision. So, this Rs. 20 odd crores that you mentioned, this is as part of other expenses? And also, is there any onetime like shell stock adjustment, etc., because of the competition?
Harish Kamath
It is part of the other expenses. What happened, there was a 14 million EU penalty for which we provided in the last financial year, 14 million Euro. But the penalty demand has not come so far. In the intervening period between last year and current year, the Euro has appreciated. So, that is the reason we have to make additional provision of another Rs. 12 crores. The penalty was already provided in the books. Today also demand has not come. Unless there is a demand, we can't pay and that liability was open. And because Euro appreciated, we were forced to make additional provision. Right, sir
Q
Sir, just on API side, what do we see in terms of pricing trends now? Are they stable or are they further still on the downtrend? And subsequently, what is happening on the dollar side?
Harish Kamath
Positively stable. It is not downtrend. And demand is gradually improving in export market. And then any addition of product that can come up for us or we would be largely existing portfolio is what will drive growth? Every year, 2-3 new products comes into the market. Understood, sir. Thank you, sir. That is it from my side. Yes. Thanks, Tushar.
Q
Yes. Thanks for the opportunity, again, sir. So, sir, if you can just elaborate about the subsidiary performance, how are they really doing? Is there any kind of impact that you are seeing there or things are normal?
A. K. Jain
Only one subsidiary which was always doing better, Onyx Scientific. This year, they have not done that well because all these not necessary expenses are being reduced by all multinational companies. So, their, whatever businesses were coming for projects and all, it has reduced. So, they were making consistent profits during the last one decade. But this year, the situation is difficult. Other than that, Pisgah continues to be incurring losses, but in line with what it was incurring last year. The injectable project is ongoing and should get commercially ready by second half of this financial
Q
Hello, sir. Thanks for the opportunity. Sir, your standalone gross margins are very strong, around 74%. It was something similar last quarter also. So, I am just wondering, what is driving this margin expansion used to be in mid 60s earlier? And is there any more headroom to it or you see some downside in the short term?
A. K. Jain
No, whatever improvement is there mostly because of the product mix. There is no fundamental change otherwise. So, this year, in the 1st Quarter season, products which were not having better margin, the sales were less. So, if you see therapeutic growth also where margins are better, those therapies have grown better than what it was last year. That is the only reason. Nothing beyond that. There is no other fundamental change either in procurement price or selling price. Right, sir. But you did also mention India business should kind of pick up growth. So, you should be able to at least mainta
Q
Hello, sir. Good evening. Sir, I just wanted to revisit the overall guidance that you have given. So, did I hear it right that you are expecting 19% growth in FY '26 and console EBITDA margin to improve by 75 basis points versus 1% basis points that was the earlier guidance?
A. K. Jain
Yes, that is correct. Got it. But sir, you are at 18% in 1Q. So, the incremental improvement that the margins will see, it will be majorly from the domestic business or from Unichem. So, which all parts of the businesses do you expect margin expansion in 9 months of remainder of the year? Nikhil, the Q2 business in the domestic market is always highest. So, you will see some improvement in Q2 itself. Historically, Q2 business gives the maximum quarter business in the domestic market. Plus, as we told you, the operation and financial performance of Unichem also should improve going forward. Und
Q
Yes, thank you. Since all the questions are asked and there is no more further questions, we will close this call. Thank you all for participating in our concall. Thank you.
Management
Speaking time
A. K. Jain
30
Moderator
15
Harish Kamath
15
Tushar Manudhane
12
Nikhil Mathur
10
Surya Narayan Patra
9
Kunal Randeria
8
Saion Mukherjee
7
Rashmi
4
Chirag
3
Opening remarks
Nitin Agarwal
Thank you. Hi, good afternoon, everyone and a very warm welcome to Ipca Labs Q1 FY '26 Earnings Call hosted by DAM Capital Advisors Limited. On the call today, we have representing Ipca Labs management, Mr. A. K. Jain - Managing Director and Mr. Harish Kamath - Corporate Counsel and Company Secretary. I will hand over the call to Mr. Jain for the opening comments and then we will open the floor for questions. Please go ahead, sir.
A. K. Jain
Thanks, Nitin and Dam Capital for organizing this call. Today's hearing calls and discussions and answer given may include some forward-looking statements based on our current business expectations. This must be viewed in conjunction with risk that pharmaceutical business faces. Our actual and future financial performance may differ from what is projected or perceived. You may take your own judgments on information given during the call. Our domestic business in the 1st Quarter of the current financial year has grown by around 10%. Ipca on mid-June 2025 has maintained its rank as 16th as per IQVIA. Overall, Ipca continued to improve its market share. Compared to the 1st Quarter last financial year, mid- June 2024, there is around 7 bps increase in the overall market share from 2.01%-2.08% in mid-June 2025. Six brands of Ipca continue to remain in around top 30 brands in the country. Both in acute chronic segments, we have delivered better growth compared to the market in mid-June 2025
On margin fronts
q1 FY '26 standalone Ipca has improved its margin from 23.82% as against 22.22% in Q1 FY '25. However, the consolidated EBITDA margins are at around 18.39% in Q1 FY '26 as against 18.52% in Q1 FY '25. There is a marginal decline in that and overall, our standalone net profit is up by around 26% to around Rs. 262 crores and consolidated net profit is up by 18% to around Rs. 234 crores. Given the broad numbers, now I will request participants to ask questions.
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