SMS Pharmaceuticals Limited has communicated to its shareholders the applicable tax deduction at source (TDS) provisions relating to the proposed final dividend for the financial year 2025-26. The Board of Directors, at their meeting held on Friday, May 22, 2026, recommended a final dividend of Rs.0.40 (Rupees Forty paise) per equity share of face value of Rs.1 (Rupees one) each. The dividend is subject to approval by members at the 38th Annual General Meeting (AGM) of the Company, scheduled for Wednesday, September 23, 2026. The company has fixed Wednesday, September 16, 2026 as the Record Date for determining entitlement of members to the final dividend.

Key Dividend and TDS Details

The following table summarises the key parameters of the proposed final dividend and the associated TDS communication:

TDS Rates for Resident Shareholders

As per the provisions of the Income Tax Act, 2025, dividend paid or distributed by a company is taxable in the hands of shareholders. The company is required to deduct tax at source at the time of making payment. The applicable TDS rates for resident shareholders are outlined below:

Resident individuals are exempt from TDS if the total dividend amount to be received during tax year 2026-27 does not exceed Rs.10,000/-, or upon submission of Form 121 - Part A, or upon production of an exemption certificate issued by the Income Tax department. Shareholders without a valid PAN, or whose PAN is not linked with Aadhaar, will be subject to TDS at the higher rate of 20% as per section 397(2) of the Act.

Resident Non-Individual shareholders such as Insurance Companies, Mutual Funds, Alternative Investment Funds (AIF), and New Pension System (NPS) Trusts may avail a Nil TDS rate upon submission of relevant self-declarations, self-attested PAN copies, and applicable registration certificates.

TDS Rates for Non-Resident Shareholders

For non-resident shareholders, withholding tax is applicable at 20% (plus applicable surcharge and cess) on the dividend amount under domestic tax law, as per section 393(2) read with section 207(1) of the Act. Non-resident shareholders may opt for the benefit of the applicable Double Tax Avoidance Agreement (DTAA) under Section 159 of the Act, if more beneficial, subject to submission of the following documents:

• Self-attested copy of Tax Residence Certificate (TRC) for the tax year April 1, 2026 to March 31, 2027
• Mandatory filing of Form 41 online at the Income Tax e-portal for shareholders with PAN seeking DTAA benefits
• Self-declaration of meeting treaty eligibility and beneficial ownership requirements
• Copy of SEBI registration certificate (for Foreign Institutional Investors and Foreign Portfolio Investors)
• Self-attested copy of PAN card
• For shareholders tax resident in Singapore, a letter from the competent authority regarding non-applicability of Article 24 (Limitation of Relief) under the India-Singapore DTAA

Document Submission and Compliance

Shareholders are required to upload relevant tax-related documents, certificates, declarations, and Form 121 on the RTA portal at https://www.aarthiconsultants.com/investors/login.php on or before Wednesday, September 9, 2026. Physical documents may alternatively be sent to the Registrar and Transfer Agent, Aarthi Consultants Private Limited, at their Hyderabad address. Documents may also be emailed to info@arthiconsultants.com and cs@smspharma.com . The company has clarified that any communication received post-closing hours of September 9, 2026 will not be considered.

Resident Non-Individual members such as Insurance Companies, Mutual Funds, AIF, and domestic financial institutions, as well as Non-Resident Non-Individual members such as Foreign Portfolio Investors, may submit relevant forms and documents through their respective custodians registered with NSDL for tax services, within the aforesaid timelines.

Bank Account Updation and Payment

The final dividend, once approved at the AGM, will be paid exclusively through electronic mode. Shareholders are requested to ensure that their bank account details in their respective demat accounts or physical folios are updated and KYC compliant to facilitate timely credit. Pursuant to the SEBI Master Circular dated February 6, 2026, dividend to shareholders holding shares in physical mode shall be paid only through electronic mode, and only after they have furnished their PAN, nomination choice, contact details, bank account details, and specimen signature to the Company or the RTA. Shareholders holding shares in dematerialised form may update bank details with their depository participant.

SMS Pharmaceuticals reported a standalone net profit after tax (PAT) of ₹20.20 crore for the quarter ended June 30, 2026, marking an 8% year-on-year increase from ₹18.72 crore in Q1FY26. The growth was underpinned by a 6% rise in revenue from operations to ₹207.0 crore, driven by broad-based demand across high-value Active Pharmaceutical Ingredients (APIs). Consolidated PAT attributable to shareholders rose 2% to ₹20.91 crore, reflecting lower contributions from associate entities compared to the prior year. The company maintained a stable EBITDA margin of 20%, despite headwinds from annual employee increments and elevated freight costs due to geopolitical tensions in West Asia.

The Board of Directors approved the unaudited financial results in its meeting held on July 31, 2026, pursuant to Regulation 33 of the SEBI Listing Regulations. Statutory Auditors Suryanarayana & Suresh issued an unmodified limited review report on both standalone and consolidated financial statements. In other developments, the Board scheduled the 38th Annual General Meeting (AGM) for September 23, 2026, to be conducted via Video Conference or Other Audio-Visual Means. The register of members will remain closed from September 17, 2026, to September 23, 2026, for determining eligibility for the dividend, with the record date fixed at September 16, 2026.

Financial Performance Overview

The company’s total income stood at ₹208.71 crore, while operating expenses were managed effectively to sustain profitability. EBITDA increased 4% to ₹40.95 crore from ₹39.37 crore in Q1FY26. The divergence between consolidated and standalone profit growth is primarily due to the share of profit from associate VKT Pharma Private Limited, which dropped significantly to ₹0.71 crore from ₹1.78 crore in the corresponding period of FY26. This reduction impacted the consolidated bottom line more than the standalone figures.

Strategic Developments and Corporate Actions

SMS Pharmaceuticals is advancing its ₹280 crore capital expenditure programme, with ₹120 crore already completed. The remaining ₹160 crore is expected to be finalized by FY27, supporting the commercialization of new niche molecules. In parallel, the Board approved an unsecured loan of up to ₹50 crore to its subsidiary, SMS Peptides Private Limited, building on a previous ₹8 crore investment in FY26 to establish a dedicated peptide R&D facility. This infusion aims to strengthen the company’s position in the complex peptide CDMO space. The loan requires shareholder approval at the ensuing general meeting as per Section 185 of the Companies Act, 2013.

Additionally, the Board approved the re-appointment of Ramesh Babu Potluri as Chairman and Managing Director for a term of five years, effective from October 1, 2026, to September 30, 2031, subject to shareholder approval. On the research front, the company completed four Drug Master File (DMF) and Certificate of Suitability (CEP) filings during the quarter, keeping it on track to meet its FY27 target of ten filings. The R&D team has expanded to 200 members, developing a pipeline of six to eight niche high-value molecules expected to enter commercial production later in FY27.

What the Numbers Show

The significant swing in therapeutic area contributions underscores SMS Pharma’s successful portfolio diversification. The 69% surge in Anti-Retro Viral (ARV) revenues offset the sharp decline in anti-diabetic sales, indicating a deliberate strategic pivot toward higher-margin, regulated market products. While gross margins improved substantially due to backward integration, the flat EBITDA margin suggests that operational efficiencies are currently being absorbed by increased manpower costs and external freight pressures. Investors should monitor whether these temporary headwinds recede in Q2FY27, potentially unlocking margin expansion alongside the anticipated volume growth from new capacity additions.