SMS Pharmaceuticals Limited reported a 13% increase in revenue to INR887 crores for the fiscal year ended March 31, 2026, driven by strong growth in its anti-inflammatory and anti-retroviral (ARV) segments. The company’s profit after tax (PAT) rose 47% to INR102 crores, supported by margin expansion and a INR14 crores contribution from associate company VKT Pharma. Management attributed the performance to backward integration, a favorable product mix, and operating leverage, while guiding for 15% revenue growth in FY27.

Financial Performance

For the fourth quarter of FY26, revenue stood at INR238 crores. EBITDA for the quarter was INR40 crores with margins at 17%, while PAT was INR33 crores. The full-year EBITDA increased 23% to INR171 crores, with margins improving to 20%. Gross profit for FY26 grew 14% to INR303 crores, maintaining healthy gross margins of 34%.

Strategic Initiatives and Outlook

The company is progressing with a brownfield expansion project involving a total investment of approximately INR280 crores, of which INR130 crores has been invested. This includes increasing ibuprofen capacity from 500 metric tons per month to 800 metric tons per month, expected to be completed by March 2027. Management anticipates incremental revenues from these expansions starting FY28. Additionally, the company filed 12 DMFs and CEPS during FY26 and targets 10 filings each in FY27 and FY28.

SMS Pharmaceuticals is also developing capabilities in peptides and CDMO initiatives, expecting meaningful contributions from these platforms from FY29 onwards. The company’s installed capacity is projected to reach 800 metric tons per month post-expansion, with high utilization expected by FY28. Management expressed optimism about exceeding the 15% revenue growth guidance if external logistics conditions stabilize.

SMS Pharmaceuticals has reported a 48% year-on-year increase in its standalone net profit to ₹101.98 crore for the fiscal year ended March 31, 2026. Profit After Tax (PAT), including the share of profit from associate company VKT Pharma, stood at ₹102 crore. The company’s revenue from operations grew 13% to ₹886.87 crore, supported by strong performance across key Active Pharmaceutical Ingredients (APIs) and a diversified product portfolio. The board has recommended a final dividend of ₹0.40 per equity share for FY26.

Financial Performance

The margin expansion was driven by backward integration efforts and strategic product mix optimization, particularly in anti-inflammatory and ARV APIs. EBITDA for the year increased 23% to ₹171.28 crore, with EBITDA margins expanding by 155 basis points to 19%. Gross profit rose to ₹302.83 crore, with gross margins at 34%. The associate company, VKT Pharma, contributed ₹13.99 crore to the FY26 PAT, compared to ₹1.74 crore in the prior year. The following table summarises the full-year financial highlights:

Q4 Performance

For the fourth quarter, revenue from operations stood at ₹237.95 crore compared to ₹248.20 crore in the same period last year, a decline of 4% YoY. Despite the revenue dip, Q4 PAT increased 61% YoY to ₹32.71 crore, with PAT margins expanding 556 basis points to 14%. EBITDA for the quarter was ₹39.90 crore, with margins at 17%. The key quarterly metrics are presented below:

Strategic Initiatives and Outlook

Management stated that FY26 was a year of rebuilding the foundation for the next phase of growth, with significant investments made in backward integration, product registrations, and capacity expansion. The company filed 12 DMFs and CEPS during FY26 and targets 10 additional filings in FY27. The brownfield expansion project, with a total planned investment of approximately ₹280 crore, is progressing as planned with ₹130 crore already invested. This expansion includes multiple high-margin molecules expected to generate profitability above the current portfolio average, with meaningful contributions expected from FY28.

The company is also developing capabilities in peptides and CDMO initiatives, which are expected to contribute from FY29 onwards. Regarding the outlook for FY27, management guided for 15% revenue growth while aiming to further improve upon the FY26 EBITDA margin of 20%. The company targets reaching its historical high EBITDA margin of 22% in the coming years. The ₹280 crore capacity expansion programme is on track for completion by FY27. The company is well positioned to deliver over 15% revenue growth with EBITDA margins in the range of 20% in FY27.