INDGNNSEfinancial year 2026August 06, 2025

Indegene Limited

8,311words
72turns
10analyst exchanges
3executives
Management on call
Manish Gupta
CHAIRMAN AND CHIEF EXECUTIVE
Suhas Prabhu
CHIEF FINANCIAL OFFICER – INDEGENE LIMITED
Abhishek Agarwal
HEAD OF INVESTOR RELATIONS - INDEGENE LIMITED
Key numbers — 40 extracted
INR7,068 million
f their programs now. Now moving on to our business performance for Q1 FY '26. Revenue came in at INR7,068 million, a growth of 1.8% in USD terms and 0.7% in INR terms. The growth in USD would have been 2.2% quar
1.8%
ng on to our business performance for Q1 FY '26. Revenue came in at INR7,068 million, a growth of 1.8% in USD terms and 0.7% in INR terms. The growth in USD would have been 2.2% quarter-on-quarter but
0.7%
performance for Q1 FY '26. Revenue came in at INR7,068 million, a growth of 1.8% in USD terms and 0.7% in INR terms. The growth in USD would have been 2.2% quarter-on-quarter but came lower due to a o
2.2%
million, a growth of 1.8% in USD terms and 0.7% in INR terms. The growth in USD would have been 2.2% quarter-on-quarter but came lower due to a onetime credit given to a customer in settlement of un
INR1,536 million
xpenses. And hence, no material impact on profitability in the current quarter. EBITDA came in at INR1,536 million, a growth of 0.7% quarter-on-quarter. We reported a Q1 PAT of INR1,164 million. At this point, I
INR1,164 million
EBITDA came in at INR1,536 million, a growth of 0.7% quarter-on-quarter. We reported a Q1 PAT of INR1,164 million. At this point, I would like to introduce Tectonic to you. We've been talking to you about this f
1 million
which lead to paid pilots and eventually full-scale engagements. We have generated more than USD 1 million of revenue from Tectonic in this quarter across 2 customers. Both of them are a top 20, and we'll
rs,
ue value propositions, differentiated propositions across the value chain, right, in medical affairs, regulatory, safety, commercial, and we see clients being excited. We have multiple conversations g
86.6%
enterprise segments, ECS and EMS, Enterprise Commercial and Enterprise Medical, which contribute 86.6% of our revenue, grew by 3.5% quarter-on-quarter. We have also renamed Omnichannel Activation now
3.5%
EMS, Enterprise Commercial and Enterprise Medical, which contribute 86.6% of our revenue, grew by 3.5% quarter-on-quarter. We have also renamed Omnichannel Activation now to be called Brand Activation
21.6%
ommercial segment vis-a-vis the Enterprise Commercial segment. Brand activation had a degrowth of 21.6%. This is due to 2 reasons: First, the project went on hold and revenue got deferred due to a cust
16.9%
conclusion of a project with a customer. Both were sizable projects. The other segment has grown 16.9% quarter-on-quarter, but contributes only 3.5% of the overall revenue, and hence, will not have a
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Guidance — 20 items
Abhishek Agarwal
opening
“The transcript of this call will be available in a week's time on the company's website.”
Manish Gupta
opening
“There are, of course, some of them, which will be doing extremely well.”
Manish Gupta
opening
“The growth in USD would have been 2.2% quarter-on-quarter but came lower due to a onetime credit given to a customer in settlement of unresolved project expenses.”
Manish Gupta
opening
“These expenses were in relation to an engagement, which was concluded mid of last fiscal and were already provided for as project expenses.”
Manish Gupta
opening
“Now we can -- at this point of time, if you just go from a segment reporting perspective, Tectonic will not be reported separately, but will be part of ECS, Enterprise Commercial Solutions.”
Manish Gupta
opening
“We believe that over a medium term, AI will play a very significant role in differentiating us and enabling us to take a larger market share.”
Manish Gupta
opening
“This is due to 2 reasons: First, the project went on hold and revenue got deferred due to a customers' regulatory hurdles impacting launch of its products; and second, the conclusion of a project with a customer.”
Suhas Prabhu
opening
“As Manish highlighted, our revenues would have been higher with the USD growth at 2.2% quarter-on-quarter, but for a onetime credit to a customer in settlement of unresolved project expenses.”
Suhas Prabhu
opening
“This was for a project for an Indian affiliate of a global customer.”
Suhas Prabhu
qa
“And going forward from what Manish explained on the nature of the business, more specifically, during the quarter, we had contracted with a customer for a brand launch program, which has got deferred due to certain regulatory hurdles, FDA requirements in the U.S., which has deferred the launch by -- we anticipate about 3 quarters.”
Risks & concerns — 11 flagged
One way or the other, this is yet another step in line with our strong belief and long-term outlook for the business that innovators will have to accelerate digital first transformation, adoption of AI, advanced analytics across R&D, supply chain and commercial operations to improve speed to market and reduce overhead as a response to a secular pressure on drug pricing, something which we have been saying again and again.
— Manish Gupta
Directionally, the pressure remains on drug pricing and hence, pharma operations to be more efficient and recent macro news and trends reinforce this pressure as well.
— Manish Gupta
And they seem to be managing the macro pressure as well.
— Manish Gupta
Before I go deeper, given that we spoke about Tectonic and the impact of -- and the reason why we're able to do this well, bringing all our capabilities together, let me also allude to some of the stuff which we are seeing across the board in our solutions as we have incorporated AI and Cortex, as we had announced earlier.
— Manish Gupta
One is if you can touch upon Omnichannel Activation decline both year-on-year and quarter-on-quarter again.
— Shiwani
Or you think, no, the other thing is actually true that when things are uncertain, we need to reduce cost and hence, we'll become more relevant.
— Abhishek Bhandari
Finally, and we are having multiple conversations even with those customers now, right, from a pipeline perspective, which was pretty much -- which was a challenge till last year, but we're seeing pipeline grow even in those customers, which went through the C level change.
— Manish Gupta
And that is the reason why even some of the AI-based solutions where they can get significant benefits are taking time to even get adopted, right, because of the risk perception.
— Manish Gupta
And therefore, it's very difficult to carve out what would be organic and inorganic.
— Suhas Prabhu
Difficult to call out all -- to give a commitment on all each 1 of the 20.
— Manish Gupta
It's good to see the growth coming back, especially from the last difficult year that we had.
— Vinit Manek
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Q&A — 10 exchanges
Q
Yes. Congratulations on a good set of numbers. Sir, 2 questions. One is if you can touch upon Omnichannel Activation decline both year-on-year and quarter-on-quarter again. I also see the margin is impacted, and it has decreased significantly. So can you please elaborate on this point?
Manish Gupta
Sure. Shiwani, I'll pass it on to Suhas for details, but 2 things. One is you got to think omnichannel activation as a a brand-by-brand business, and that's the reason we're also calling in brand activation, vis-a-vis our other business enterprise solutions, whether it's medical or commercial, which is much more broad-based enterprise-wide engagements. And hence the nature of the business is such that some brand having an FDA issue, right, or engagement getting over, there is a slight more variability on the business. However, what we'll also encourage all of you to think about this Brand Acti
Q
Manish, I had one very basic question. Of late, we've started shifting to Q-o-Q in terms of talking about numbers. Any reason why you started shifting towards Q-o-Q instead of Y-o-Y? Do you think now the business has become kind of a linear, and we should measure it on a sequential basis?
Manish Gupta
Abhishek, I'm going to give you a very honest answer on this. I still look at the business more yearly, right, nature of our business. But have been guided that everybody, all of you want to see quarter-on-quarter. That's why we have shifted to that. So there is no very well thought-out reason for that. Suhas? Yes. But having said that, Abhishek, full year basis, 12.5% on revenue and 27% on PBT, 32% on PAT, I think we would keep referring to that because we believe whatever concerns that we had expressed during our current quarter performance in the last fiscal year versus this, we would want
Q
First question is that some of the IT companies have been talking about pricing pressures from customers and higher competition, which is leading to some sort of margin erosion. So how are we seeing this? And what is your take on this?
Manish Gupta
Okay. Thank you, Naman, for the question. See, there are 2 things. One is that our industry and the kind of work we do, marketing, regulatory, it's not a back-end cost element. It's super critical for our customers. And hence, their propensity to shift or do anything based on a few dollars here or there is really not high. And that is the reason why even some of the AI-based solutions where they can get significant benefits are taking time to even get adopted, right, because of the risk perception. So we don't see that, right, on this part. Of course, customers are actively looking out what el
Q
Sir, my first question is regarding the patent cliff and how we are getting benefited from this? So in your experience for the past 15 years, how have you benefited from this patent cliff, sir?
Manish Gupta
Sure. So I would say that -- and again, there are 2 things. One is patent cliff is there. But on the other hand, new launches are also slated to be very high for the industry. So overall, the industry is going to be okay. Now as far as patent cliff is concerned, we have an offering of providing omnichannel for mature brand categories. And that's where we see a very active pipeline at this point of time, where companies for mature brands, right, are saying is there a better way to promote -- and our omnichannel business, both on the combination of Enterprise and Brand Activation side kicks in t
Q
So sir, can you please provide more details on the Tectonic engagement? And what kind of engagements are these? Maybe what is the outlook here? What scale are we envisaging? And what are the different capabilities needed here? Maybe how much automation or AI driven is...
Manish Gupta
So if you think about it, I mean, a lot of the work which we have been doing in Enterprise Commercial Solutions is around downstream activities in content creation, for example, content adaptation, localization and execution, running campaigns, data analytics. These are the capabilities which we've been doing. So essentially, the agencies do a lot of the work upstream, right. Developing the concepts, right, doing the market study, right, based on that, developing the concept, coming with the creative ideas, right, and then starting to develop de novo content. So we can come in at a later stage
Q
Sir, I have 3 questions. So in the near term, how should we think of head count additions and wage hikes?
Suhas Prabhu
Yes. So in the near term, wage hikes for us are effective July 1 in the current quarter. If you would have also seen our past few years of quarterly performance, the wage hikes are impacted. The larger cycle is July every year. There's a midyear cycle in January, but that has a very small impact. The near-term impact on wage hikes will be seen on the margins in the next quarter. But having said that, you would have also seen that our head count has remained fairly stable and also marginally degrowing over the past few quarters, while the revenue continued to be stable and growing. But having s
Q
So the first question was on the -- our journey, and we've been seeing that we want the clients in the 10 million to 25 million buckets to move up to 25-plus million buckets and then on to 50 million plus. So where are we in that journey? And just a broad idea on that. I know you've been putting efforts in that direction. So that was the first question.
Manish Gupta
Yes. So I think we're progressing well on that, Rohan. I can't call out exactly when you'll start seeing those numbers. But we feel good about if, let's say, call it, a few quarters down the line, our client pyramid is going to start looking stronger. 10 to 25 moving to 25-plus, fingers crossed. We're also hoping to break the 50 mark, right, having a customer move over there. The number of million-dollar customers should increase. And of course, the number of active customers also should go up. So this whole chain, we believe, good right now from what we see is going to be stronger in a few qu
Q
Yes. Actually, I had 2 questions, both on Tectonic. So first, Tectonic, how does this complement our CultHealth services because even that was our effort to move up the marketing value chain? And the second question is that as we are moving up the marketing value chain and competing with these specialized health care marketing agencies, the reason that these marketing agency exists is that they do a lot of customized work. They have local understanding and local nuance. And for our context, which is global operations, centralized operations, which we cater to, how does that fit in when we comp
Manish Gupta
So that's a great question, Omkar. Now if you think about it -- and as you rightly said, the whole omnichannel brand activation, as we call it now, was meant to go upstream, and we did acquire that capability, right, establish our credentials in this space. And I think we have done well on that. However, that business is a brand-by-brand type of a business. We believe, and our view was -- and that's the reason we have taken the thing is that technology enabled, right, and global operations enabled creation of all this material, right, is the way to go. Now what we have been able to do using Cu
Q
It's good to see the growth coming back, especially from the last difficult year that we had. Just 2 questions from my side. One is pertaining to that. We were at about a high single-digit kind of a USD growth this quarter from a top line perspective. So should we assume that the worst is behind us, and we are seeing that acceleration in the launches and spends from the top clients coming back? Could we accelerate this to an early double-digit kind of growth or mid-teens kind of growth by the end of this year? And my second question comes to the margins. So as we have upped the efforts on Tect
Manish Gupta
Sure, I'll pass it on to Suhas to deep dive, but we don't like giving exact numbers and guidance, but we feel comfortable and good of where we are right now, right, in terms of our engagement pipeline. And we believe we are on the right trajectory as a company from a growth perspective. So that's one. Our priority from a reinvestment and investment perspective is also going to be growth. As I said, after the frantic activity during COVID time, right, until 2023, we saw the industry consolidating, customers going slow because of what happened during COVID and also some of the pressures. We see
Q
Thank you, everybody, for your participation and continued interest in Indegene. Value these interactions and conversations with the entire investor community and look forward to continuing this level of engagement. Thanks once again, and have a good day.
Manish Gupta
Thank you.
Speaking time
Manish Gupta
24
Moderator
12
Suhas Prabhu
12
Mohammed Patel
5
Shiwani
4
Naman Bhansali
3
Sankara Narayanan
3
Rohan Vora
3
Abhishek Bhandari
2
Omkar Sawant
2
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Opening remarks
Abhishek Agarwal
Thank you, moderator. A very good morning to all of you, and thank you for joining us today for Indegene's earnings conference call for the first quarter of the financial year 2026. Today, we have with us Mr. Manish Gupta, Indegene's Chairman and CEO; and Mr. Suhas Prabhu, CFO, to share the highlights of the business and financials of the quarter. I hope you have gone through our results release and the quarterly investor presentation, which have been uploaded on our website, as well as on the stock exchange website. The transcript of this call will be available in a week's time on the company's website. Please note that today's discussion may be forward-looking in nature and must be viewed in relation to the risks pertaining to our business. After the end of this call, in case you have any further questions, please feel free to reach out to the Investor Relations team. I now hand over the call to Manish to make his opening remarks.
Manish Gupta
Thank you, Abhishek. Good morning, everyone. Thanks for joining our Q1 earnings call. Today, what I'll do in this call, apart from our Q1 results, we'll also touch upon some of the external trends. We spoke about them last time, and so we'll just double-click on what we are seeing. We'll also lay out our FY '26 outlook and strategic priorities. Now starting on the external perspective, there was some renewed talk about U.S. pharma tariffs in the last few weeks. Now at least what we see from is that this continues to be a nonfactor, not a big thing at all for the innovators. We say this based on all the analyst commentary and more importantly, based on our customer interactions. There have been some other program announcements like the National Priority Voucher program by the FDA that should positively impact drug review time lines and maintain high throughput of drug approvals and launches. Also, there were the changes at CDC's ACIP, the immunization Advisory Committee, which might hav
Suhas Prabhu
Thank you, Manish. Once again, a very good morning to everyone, and we appreciate your participation on this call today. Let me dive into some more details of the financial performance for the quarter. As Manish mentioned, revenues for the quarter came in at INR7,608 million, which is up a strong 12.5% year-on-year and 0.7% sequentially. The growth in U.S. dollar terms is 1.8% quarter-on-quarter and 0.4% quarter-on-quarter in constant currency terms. As Manish highlighted, our revenues would have been higher with the USD growth at 2.2% quarter-on-quarter, but for a onetime credit to a customer in settlement of unresolved project expenses. This was for a project for an Indian affiliate of a global customer. And hence, the contribution of the India geographic segment in our revenues has dropped from 0.9% to 0.3% in the current quarter. Coming to the rest of the geographical segments, 95% of our revenue continues to come from the U.S. and Europe regions. North America revenue share is nor
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