Neuland Laboratories Q2: Profit falls 47%, revenue declines 12.5%; margins contract

Heavy capital investments in research facilities and peptide manufacturing units squeezed profitability during the quarter, even as overall capacity expansion efforts pressed ahead. Discover which commercial molecules are expected to drive near-term recovery.

Pharmaceutical firm Neuland Laboratories reported a 46.7% year-on-year decline in consolidated net profit to ₹51.6 crore for the September quarter, compared with ₹96.9 crore in the corresponding quarter last year.

Revenue declined 12.5% to ₹449.7 crore from ₹514.2 crore a year ago. EBITDA fell 37.2% to ₹97.6 crore from ₹155.5 crore, while EBITDA margin contracted to 21.7% from 30.2%.

The company reported a cash outflow of ₹261 crore towards capital expenditure, largely driven by investments in a new research and development facility and a peptide manufacturing block.

On the business front, Neuland inaugurated its new peptide manufacturing facility and acquired around 134 acres of land in Kakinada, Andhra Pradesh, to support its long-term capacity requirements. The company also filed two Drug Master Files (DMFs) during the quarter for Fezolinetant and Ivacaftor.

CEO and Managing Director Saharsh Davuluri said the company experienced a dip in performance during the quarter, but its first-half FY27 performance was largely in line with plans.

He added that growth expectations for FY27 and the following year remain intact, with commercial CMS molecules expected to drive near-term growth.

The company said strong request-for-proposal (RFP) activity and progress in engagements with large pharmaceutical companies support customer diversification and its longer-term pipeline.

Neuland Laboratories shares closed 0.92% lower at ₹19,394 on the NSE on November 3, ahead of the earnings announcement.