Supriya Lifescience Limited (NSE: SUPRIYA) the active pharmaceutical ingredient manufacturer recorded increased top-line performance supported by higher capacity utilization and growth in regulated markets. While margins saw a slight year-over-year contraction, the company is moving toward the commissioning of its new formulation facility in the fourth quarter.
Company reported a consolidated revenue increase of 11.2% year-over-year for the third quarter of fiscal year 2026, reaching ₹206.44 crore. The results were primarily supported by the anesthetic therapeutic segment and improved operational efficiency at its manufacturing facilities. Export sales remained the core revenue driver, representing approximately 82% of the total business mix during the period.
Key Development
A central development during the nine-month period was the significant rise in capacity utilization, which reached 76%, up from 70% in the previous full fiscal year. This improvement is attributed to the successful ramp-up of the Module E production block at the Lote Parshuram facility, which expanded total reactor capacity to 932 KLPD.
Product Highlights
- The company advanced its portfolio with several launches and development milestones in Q3 FY26:
- Cardiovascular and ADHD: A key cardiovascular product and an ADHD-related treatment were launched, with full commercial impact expected in the coming quarters.
- Liquid Anesthetics: The company commercialized a liquid anesthetic product, with steady monthly supplies now established.
- Contrast Media: Development activities for contrast media products are currently ongoing.
- Ambernath Facility: A new Finished Dosage Form (FDF) facility in Ambernath, focusing on tablets, capsules, and liquids, is scheduled for commissioning in the second half of FY26.
Financial Performance
- Revenue: Revenue from operations stood at ₹2,064.4 million, compared to ₹1,856.5 million in Q3 FY25.
- EBITDA and Margins: EBITDA was ₹720.8 million, a 9.3% increase from ₹659.6 million in the prior-year period. However, EBITDA margin contracted by 61 basis points to 34.9%.
- Net Income and EPS: Profit After Tax (PAT) rose 6.2% to ₹496.8 million. Earnings Per Share: (EPS) was ₹6.2, up from ₹5.8.
Nine-Month Results
For the first nine months of FY26, revenue grew 7.6% to ₹5,513.5 million, but PAT declined by 2.0% to ₹1,348.9 million.
Investment Thesis (Bull vs. Bear)
Bull Thesis:
- Capacity and Efficiency: The successful integration of Module E has significantly boosted production capacity and utilization rates.
- Revenue Diversification: The move into FDF and high-value CMO contracts provides long-term revenue visibility and potentially higher-margin streams.
- Backward Integration: Approximately 74% of revenue is derived from backward-integrated products, reducing dependence on external raw material suppliers.
Bear Thesis
- Margin Compression: Rising employee costs and operational expenses have led to a contraction in EBITDA and PAT margins.
- Stagnant Net Profit: Despite revenue growth, the 2.0% decline in nine-month PAT indicates challenges in translating top-line gains to the bottom line.
- Customer Concentration: While the company aims to reduce it, the top 10 customers still accounted for 58% of revenue in FY25.
R&D Buildout
Company confirmed that its new manufacturing and R&D facility in Ambernath is on track for commercial commissioning in Q4 FY26. The site is a key element of the company’s transition from a pure-play API manufacturer to a more integrated pharmaceutical platform with finished dosage capabilities.
Management expects the expansion into formulations and complex therapeutic applications to broaden the company’s addressable market and enhance value capture across the product lifecycle. The Ambernath facility will support the development and commercialization of new dosage forms while strengthening R&D capabilities, positioning the company for a more diversified revenue mix over the medium term.
Capacity Build
Management outlined a strategy to diversify beyond its core API business into contract manufacturing (CMO) and finished dosage formulations. The company has secured a 10-year exclusive API supply agreement with a leading European partner, with peak annual revenue potential of approximately ₹60 crore from FY27 onward.
Capital allocation remained focused on long-term capacity expansion and backward integration, including the acquisition of three land parcels totaling more than 117,000 square meters. These assets are intended to support future manufacturing scale-up and strengthen supply chain integration as the company broadens its product and customer mix.
Global Footprint
The company operates as a global leader in niche therapeutic areas such as anti-histamines and anesthetics, with a presence in over 120 countries. Europe continues to be its largest regional market, accounting for 36% of Q3 revenue, while the Latin American market grew to 24%. The business maintains a high level of regulatory compliance, holding certifications from the USFDA, EDQM, and Health Canada.