Shilpa Medicare Limited has issued detailed communication to shareholders regarding the deduction of tax at source (TDS) on its recommended final dividend of Re. 0.60 per equity share for the financial year ended March 31, 2026. The Board of Directors proposed the payout at a rate of 60% on the face value of Re. 1 per share during its meeting on May 22, 2026. The dividend is pending approval from members at the upcoming annual general meeting.

The company clarified that under the Income-tax Act, 2025, dividends are taxable in the hands of shareholders. Consequently, Shilpa Medicare will deduct TDS at applicable rates based on the residential status and documents registered with the company as on the record date of September 4, 2026. Shareholders holding shares in physical form must update their KYC details with KFin Technologies Limited to avoid withholding issues.

TDS Provisions for Resident Shareholders

For resident individual shareholders, TDS will not apply if the aggregate dividend paid during FY26-27 does not exceed ₹10,000. If the amount exceeds this threshold, tax will be deducted at 10% under Section 393(1) of the Act. Residents can avoid TDS by submitting a duly signed Form 121, provided they meet eligibility conditions.

A valid PAN is mandatory for all resident shareholders. If the PAN is not updated, invalid, or not linked with Aadhaar, the higher TDS rate of 20% under Section 397(2)(b) of the Act will apply. The company will verify PAN-Aadhaar linkage through government-enabled online facilities.

For resident entities other than individuals, specific exemptions apply:

• Insurance Companies: NIL TDS with declaration under Section 2(7A) of the Insurance Act, 1938.
• Mutual Funds: NIL TDS with declaration as per Schedule VII of the Income Tax Act, 2025.
• Alternative Investment Funds (AIF): Category I/II AIFs registered with SEBI qualify for NIL TDS with appropriate declaration.
• Other Entities: Companies, firms, HUFs, AOPs, and trusts must submit lower withholding tax certificates or exemption evidence by September 2, 2026, to avail beneficial rates.

TDS Provisions for Non-Resident Shareholders

Non-resident shareholders, including Foreign Institutional Investors (FIIs) and Foreign Portfolio Investors (FPIs), are subject to TDS at 20% (plus applicable surcharge and cess) unless they opt for more beneficial provisions under a Double Taxation Avoidance Agreement (DTAA).

To avail DTAA benefits, non-residents must compulsorily provide:

1. Copy of PAN (if available).
2. Self-attested Tax Residency Certificate (TRC) from their country of residence.
3. Form 41 filed electronically on the Indian Income Tax web portal.
4. Self-declaration of having no taxable presence or permanent establishment in India.

The application of beneficial DTAA rates depends on the completeness of submitted documents and the company’s sole discretion. Failure to provide these documents will result in TDS at the standard 20% rate plus surcharge and cess. Non-residents holding orders under Section 395(1) of the Act will have tax deducted at the rate provided in such orders.

Key Dates and Compliance

Shareholders must submit all required documents, including lower withholding tax certificates and exemption declarations, via the shareholder portal on or before September 2, 2026. No communication on tax determination will be entertained after this date. If tax is deducted at a higher rate due to missing documents, shareholders may claim a refund by filing their income tax returns; no claims can be made against the company for such deductions.

The company will hold its 39th Annual General Meeting on September 11, 2026, at 11:00 am through video conferencing. Remote e-voting opens on September 7, 2026, at 9:00 am and closes on September 10, 2026, at 5:00 pm.

Shareholders with queries may contact the Registrar and Share Transfer Agent, KFin Technologies Limited, at einward.ris@kfintech.com or call 1800 309 4001.

Shilpa Medicare Limited delivered its strongest quarterly performance in Q1FY27, reporting a record revenue from operations of ₹469 crore, a 43% year-on-year increase. The pharmaceutical group's EBITDA rose 42% to ₹139 crore, while net profit after tax (PAT) more than doubled to ₹101 crore. This robust top-line growth was driven by broad-based momentum across its API, Formulations, and CDMO verticals, alongside improved operating leverage that pushed EBITDA margins to 30%. The strong financial outcome coincided with a credit rating upgrade, shifting the company's category from A+ to AA-, validating its strengthening balance sheet.

The results were disclosed via an investor presentation filed with the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) on August 5, 2026, pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Management highlighted that the performance reflects the maturation of regulatory and manufacturing investments made over recent years. Looking ahead, the company expects consistent growth with faster profitability and better return on capital employed (ROCE).

Financial Performance Breakdown

The following table summarizes Shilpa Medicare's key financial metrics for Q1FY27:

The API segment contributed significantly to revenue growth, expanding by approximately 15% year-on-year, underpinned by steady internal demand from the finished dosage formulation (FDF) vertical and broad-based growth in the non-captive portfolio, particularly within the Specialty CDMO division. The Formulations business witnessed explosive growth, with revenue surging over 100% year-on-year. Excluding licensing income, formulations revenue grew 112%, driven by sharp increases in US markets (₹45 crore), Europe (₹57 crore), and domestic sales (₹24 crore), the latter boosted by the commercial traction of NorUDCA.

Tax Rate and Profitability Outlook

The divergence between revenue growth (43%) and PAT growth (~115%) indicates significant operating leverage. With fixed costs remaining relatively stable while high-margin contributions from Specialty CDMO and novel formulations scaled up, every incremental rupee of revenue translated disproportionately into net profit. Notably, the tax rate in Q1 FY27 was negative due to a deferred tax liability reversal; upcoming quarters are expected to see the tax rate normalizing around 25%. The upgrade in credit rating to AA- further suggests that lenders view the company's cash flow generation and balance sheet prudence as materially improved.

Strategic Developments and Pipeline

Beyond financial metrics, Shilpa Medicare advanced several strategic initiatives. The company entered a partnership with Orion Corporation for the co-development and exclusive supply of a nivolumab biosimilar in Europe. Additionally, it secured Gate2Brain as its fourth partnership for a novel asset, taking a stake in the company to serve as its integrated CMC partner for G2B-002, an orphan drug-designated oncology asset for brain cancer. Notably, the company's first ADC biosimilar is set to begin human trials in FY27, marking a significant milestone in its biologics pipeline.

The pipeline remains active with multiple milestones expected in FY27. Key developments include:

• NorUDCA: Launched in India in 3QFY26, with order book visibility for FY27 and expansion into Europe and Rest of World (RoW).
• Rotigotine Transdermal Patch: Received EMA approval; launch planned for FY27 in Europe.
• Recombinant Human Albumin: Phase 3 trials to initiate in India and EU in 1HFY27, with a strategic tie-up with Orion for European commercialization.
• Semaglutide: DMF filing targeted for 1HFY27, with dedicated peptide capacity expansion underway.
• ADC Biosimilar: First ADC biosimilar set to begin human trials in FY27.

On a related development, Unicycive Therapeutics received a Complete Response Letter from the US FDA and aims to refile in Q3. An earnings conference call was held on Wednesday, August 5, 2026, at 16:00 hrs IST, allowing management to discuss these results and future outlook with investors.