SMS Pharmaceuticals Limited has informed stock exchanges about receiving an income tax demand notice worth Rs 7.19 crores for Assessment Year 2018-19. The pharmaceutical company disclosed this development under Regulation 30 of the SEBI (LODR) Regulations, 2015.

Income Tax Demand Details

The company received the demand notice on 31st March, 2026, from the Faceless Assessment Unit of the Income Tax Department. The notice was issued under Section 156 of the Income Tax Act, 1961, and dated 30th March 2026.

Assessment Order Specifics

The Assessment Unit passed an assessment order under Section 147 read with Section 144B of the Income Tax Act, 1961. The order involved two key components:

• Addition of income to the company's declared income
• Disallowance of deduction claimed under Section 35 of the Act

Additionally, penalty proceedings under Section 270A have been initiated separately for under reporting of income.

Company's Response and Impact

SMS Pharmaceuticals stated that there will be no material impact at this stage on the financial, operational, and other activities of the company. The management emphasized that the company is currently reviewing the order and evaluating the next steps to be taken before the appropriate forum against the said order.

Regulatory Compliance

The disclosure was made pursuant to Regulation 30 read with Schedule III of SEBI (LODR) Regulations, 2015. The company also complied with SEBI Circular No. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/25 dated February 25, 2025, regarding disclosure of communication from regulatory authorities.

The company confirmed that the information provided is in compliance with Regulation 30(13) of the SEBI (LODR) Regulations and is true, correct, and complete to the best of their knowledge and belief.

SMS Pharmaceuticals Limited has delivered a strong third quarter performance for FY26, demonstrating robust growth across key financial metrics. The diversified pharmaceutical company, specializing in Active Pharmaceutical Ingredients (API) and complex intermediates, reported revenue from operations of ₹210.45 crore for Q3FY26, representing a significant 21% year-on-year increase. The growth was primarily driven by strong demand, volume ramp-up in key products, and market share gains across key APIs in a stable pricing environment.

Financial Performance Highlights

The company's operational efficiency was evident in its margin performance, with EBITDA growing 31% YoY to ₹43.65 crore and maintaining a healthy margin of 21%. Profit After Tax (PAT) showed strong momentum, increasing 29% YoY to ₹23.47 crore, with PAT margin improving to 11%. The earnings per share (EPS) for the quarter stood at ₹2.59, up 20% from ₹2.15 in the corresponding quarter of the previous year.

Nine-Month Performance Shows Sustained Growth

For the nine-month period ended December 31, 2025, SMS Pharmaceuticals demonstrated consistent performance with revenue from operations reaching ₹648.92 crore, reflecting 21% YoY growth. The nine-month PAT showed exceptional growth of 42% YoY to ₹69.27 crore, with EPS improving 32% to ₹7.64. EBITDA for the nine-month period stood at ₹131.38 crore, up 34% YoY, with margins improving to 20%.

Therapeutic Area Performance

The company's diversified portfolio across therapeutic areas showed mixed performance during the nine-month period. Anti Retro Viral (ARV) segment emerged as the strongest performer with 85% YoY growth, contributing ₹182.04 crore or 28% of total revenue. Anti-inflammatory segment maintained steady growth at 18% YoY, contributing ₹128.29 crore. However, some segments faced headwinds, with anti-diabetic revenue declining 6% YoY to ₹122.77 crore, though it remained a significant contributor at 19% of total revenue.

Strategic Initiatives and Capacity Expansion

The company achieved a significant milestone by completing its full-year target of 10 DMF/CEP and dossier filings ahead of schedule, strengthening its future growth pipeline. Management indicated plans for approximately 20 submissions over the next two years to sustain growth momentum. The ₹280 crore capacity expansion programme remains on track for completion by FY27, which will enhance capacity for existing APIs, build capacity for new product pipeline, and expand R&D capabilities.

Management Outlook

Executive Director P. Vamsi Krishna expressed confidence in the company's trajectory, highlighting the successful backward integration initiatives that helped sustain margin resilience and strengthened the company's position in regulated markets, particularly the US. The company remains on track to deliver approximately 20% revenue growth for FY26 with EBITDA margins above 20%, supported by its diversified product portfolio, strong product pipeline, and disciplined execution approach.