Fermenta Biotech delivered its strongest financial performance in FY26, reporting consolidated revenue of ₹548 crore, up 14% year-on-year from ₹481 crore in FY25. The growth was driven by operating momentum across its core businesses, with revenue rising 26% when excluding real estate transactions. This normalization highlights the company’s shift from asset monetization to broad-based operational expansion, sustaining ten consecutive quarters of positive results.

The company filed its presentation for shareholders ahead of the 74th Annual General Meeting on August 11, 2026. The filing details a strategic focus on innovation and scale, underscored by the approval of ₹110 crore in new capital expenditure at its Dahej facility. This investment targets capacity expansion for plant-source Vitamin D3, Calcifediol, and biocatalysis enzymes, reinforcing Fermenta’s position in green chemistry and human nutrition.

Financial Performance

Profitability metrics reflect strong operating leverage despite a lower absolute net profit compared to the prior year. Profit after tax (PAT) was ₹70 crore in FY26, down from ₹76 crore in FY25. However, this comparison is skewed by FY25’s inclusion of ₹45 crore in one-off real estate income. Excluding real estate, core EBITDA surged 44% to ₹120 crore. Revenue from operations rose 12% to ₹525 crore, while other income increased 90% to ₹22 crore.

*Derived from core EBITDA rise statement; FY25 total EBITDA was ₹122 crore including real estate.

Segment Growth and Geographical Mix

The Nutrition Business remained the primary revenue driver, contributing ₹435 crore or 79% of total income. Within this segment, Vitamin D3 – Human Nutrition grew to ₹293 crore (53% of total revenue), while Animal Nutrition reached ₹109 crore (20%). Non-nutrition segments, including Green Chemistry, API & Intermediates, and Environmental Solutions, collectively accounted for 15% of revenue, doubling their share since FY23. Green Chemistry revenue more than doubled to ₹16 crore, fueled by Penicillin G Acylase scaling for India’s PLI-led penicillin revival.

Geographically, revenue remains balanced, reducing concentration risk. India contributed 39% of revenue, followed by Europe at 30%, North America at 13%, and other regions at 18%. The customer base has widened, with mid-market accounts (₹1–5 crore) increasing from 56 to 68, ensuring no single client dominates sales.

What the Numbers Show

The financial data reveals a deliberate decoupling from volatile real estate gains. In FY25, value unlocking from real estate contributed ₹45 crore (9% of revenue); in FY26, this dropped to just ₹2 crore (0.4%). This shift allows for a clearer assessment of operational health: core margins are expanding even as top-line growth stabilizes. Furthermore, free cash flow tripled to ₹62 crore, demonstrating robust cash generation that fully funds the ₹110 crore capex plan without increasing leverage. With debt held flat at ₹109 crore and equity rising 12% to ₹401 crore, the balance sheet is deleveraged and positioned for organic growth.

Fermenta Biotech reported a consolidated net profit of ₹9.5 crore for the quarter ended June 30, 2026 (Q1FY27), marking a 56% decline year-on-year. The significant drop in profitability was primarily attributed to a 40% fall in Vitamin D3 – Animal Nutrition realisations and the absence of ₹2.7 crore in non-recurring insurance income that had boosted the prior year’s base. Consolidated revenue, including real estate value unlocking, stood at ₹126.2 crore, down 13% YoY but flat quarter-on-quarter. Excluding real estate, core business revenue was ₹124.3 crore, down 12% YoY.

The company’s EBITDA (excluding real estate) was ₹22.3 crore, down 37% YoY and 10% QoQ. On a consolidated basis including real estate, EBITDA was ₹22.4 crore, down 39% YoY. Diluted earnings per share were ₹3.34. Management noted that the year-on-year comparison is set against an exceptionally strong April–June 2025 quarter, which included one-time items such as ₹1.6 crore from real estate value unlocking and higher other income. A write-back of ₹2.0 crore from slow-moving semi-finished inventory in animal feed production was included in the reported EBITDA.

Segment Performance

The human nutrition segment remained the largest contributor, accounting for 61% of consolidated revenue with sales of ₹76.5 crore. While human nutrition volumes rose 18% QoQ, revenue in this segment fell 10% YoY to ₹76.5 crore. In contrast, the animal nutrition segment faced headwinds, with revenue dropping 41% YoY to ₹12.6 crore due to a 40% decline in average realisations. Volumes in animal nutrition were down 52% QoQ and 20% YoY.

Other business lines showed growth. Other APIs and Intermediates revenue grew 18% YoY to ₹11.6 crore, while Green Chemistry Solutions / Enzymes rose 15% YoY to ₹2.3 crore. The 'Others' line within nutrition grew 28% YoY to ₹11.0 crore. Environmental Solutions revenue surged 619% QoQ to ₹6.0 crore, though it declined 8% YoY.

Geographical Shifts

India emerged as a stronger market, contributing 47% of consolidated revenue (excluding real estate) in Q1FY27, up from 35% a year earlier and 38% in the preceding quarter. Europe’s share declined to 23% from 33% YoY, while North America accounted for 10%. This shift reflects growing domestic demand and successful customer acquisitions in smaller business lines.

Cost Structure Dynamics

Raw material costs improved to 35% of revenue in Q1FY27, against 37% in FY26 and 38% in FY25, reflecting an improved sourcing mix. However, employee costs rose to 19% of revenue, compared to 16% in FY26, when capacity expansion added heads ahead of the Dahej scale-up. Manufacturing expenses remained stable at 12%, consistent with FY26 levels but lower than the 15% recorded in FY25. Finance costs held steady at 2% of revenue, indicating continued deleveraging efforts.

What the Numbers Show

The divergence between volume growth in human nutrition and declining revenue highlights pricing pressures or mix shifts within the core segment. While human nutrition volumes grew 18% QoQ, the segment’s revenue contribution fell 10% YoY, suggesting that higher volumes did not fully offset price declines or currency impacts. Meanwhile, the sharp contraction in animal nutrition realisations (-40% YoY) indicates continued softness in feed ingredient prices, forcing management to prioritize volume discipline over chasing weak prices. The rise in India’s revenue share to 47% signals a strategic pivot towards domestic markets, reducing reliance on volatile international segments like Europe, which saw its share drop by 10 percentage points YoY.

Operational Updates

Prashant Nagre, Managing Director, stated that the quarter was about “building rather than harvesting,” emphasizing growth in emerging segments like Green Chemistry and Other APIs. Post-quarter, Fermenta received FSSAI approval on July 6, 2026, for VITADEE Green®, its plant-source Vitamin D3, for use in health supplements and food fortification. This approval opens access to India’s large vegetarian consumer base. Additionally, the company ranked 7th nationwide in the Top 50 category of India’s Great Mid-size Workplaces™ 2026.