Indoco Remedies Limited held its Q3 FY26 earnings conference call on February 03, 2026, presenting a mixed performance with strong international growth offsetting domestic challenges. The pharmaceutical company demonstrated resilience in its export divisions and API business while navigating headwinds in the domestic acute therapy segment.

Financial Performance Overview

The company's financial metrics for Q3 FY26 reflected both growth opportunities and operational challenges across different business segments.

The company showed significant improvement in profitability metrics, with consolidated EBITDA margin expanding from 3.0% to 7.3% year-on-year. Managing Director Aditi Panandikar noted that the quarter delivered better performance, particularly in exports divisions and API business, along with improved contributions from subsidiaries.

Business Segment Analysis

Domestic Formulation Challenges

Domestic formulation revenues declined to INR2,142 million from INR2,241 million in the same quarter last year. The company faced headwinds in acute therapies, though management emphasized that secondary sales and prescription response remained intact. Despite the challenges, Indoco achieved a significant milestone by jumping one rank in IQVIA prescription audit to 21st position with 10.86 crores prescriptions, surpassing Pfizer.

Major therapeutic segments including vitamins, anti-diabetes, anti-infectives, and respiratory showed positive performance during the quarter. The company's new product introductions now contribute 6.5% of India revenues, indicating successful portfolio expansion efforts.

International Business Momentum

The international formulation business emerged as a key growth driver with impressive performance across multiple markets.

The strong international performance was driven by improved product portfolio quality and better market penetration. Management expressed particular satisfaction with emerging markets growth, noting improvements in both primary sales and secondary market performance.

API Business and Manufacturing Updates

The API business demonstrated robust growth with revenues increasing 24% to INR344 million compared to INR278 million in the same quarter last year. The Patalganga API site received EIR (Establishment Inspection Report) for USFDA audit with zero 483 observations, marking a significant regulatory achievement.

Management highlighted that the API business benefits from both external sales and internal consumption, with approximately 40% of API production supplied internally to support formulation manufacturing. The company expects further capacity expansion from the Auric site validation activities to drive future growth.

Subsidiary Performance and Strategic Initiatives

Warren Remedies Growth

Warren Remedies showed exceptional performance with over 43% growth during the quarter, driven by success in OTC and OTX segments. The subsidiary launched two new products in Q3 FY26:

• Sensodent DSP: Daily sensitivity protection toothpaste
• Sensodent DPC: Daily care toothpaste for premium segment entry

These launches represent strategic brand extensions and market segment expansion initiatives in the oral care business.

FPP US Operations

The US subsidiary FPP demonstrated improved profitability after initial challenges since its acquisition in June 2023. The company has successfully expanded the product portfolio beyond initial traded products to include solid oral formulations supplied from Indoco's manufacturing sites. Management expects five new product launches from FPP's portfolio in FY27, including recently approved lacosamide oral suspension.

Operational Challenges and Remediation Costs

The company incurred approximately INR8-9 crores in one-time costs during the quarter, including remediation expenses and penalties related to supply constraints from regulatory issues. These non-recurring costs impacted quarterly performance but are expected to normalize as manufacturing capabilities are restored and alternative supply arrangements are established.

Management confirmed ongoing efforts to control other expenses at the consolidated level, targeting INR150 crores annually while managing validation and remediation activities.

Outlook and Strategic Focus

Looking ahead, Indoco Remedies is positioned for improved performance across multiple business segments. The company's strategy focuses on transitioning from acute to sub-chronic therapies, expanding from general practitioners to mass specialty doctors, and strengthening presence in metropolitan markets. International business growth momentum is expected to continue with new product approvals and improved manufacturing capabilities supporting market expansion.

Indoco Remedies has announced its Q3FY26 quarterly results for the quarter ended 31st December 2025, reporting mixed financial performance with revenue growth offset by widening losses. The pharmaceutical company's board meeting held on 3rd February 2026 approved the unaudited standalone and consolidated financial results under Regulation 33 of SEBI listing requirements.

Revenue Performance Shows Steady Growth

The company demonstrated solid consolidated revenue performance with total income from operations reaching ₹4,454 million, representing a 7% year-on-year increase from ₹4,106 million in Q3FY25. On a standalone basis, revenue from operations stood at ₹3,896 million compared to ₹3,649 million in the corresponding quarter of the previous year.

Operational Performance Shows Strong Recovery

The company's EBITDA performance demonstrated remarkable improvement across both standalone and consolidated operations. Consolidated EBITDA rose to ₹259 million from ₹201 million in Q3FY25, registering a 29% growth. This significant improvement in operational efficiency indicates the company's enhanced cost management and business optimization efforts.

Bottom Line Challenges Persist

Despite strong revenue growth and operational improvements, the company's consolidated net loss widened to ₹295 million from ₹284 million in Q3FY25. On a standalone basis, the net loss increased to ₹200 million from ₹102 million in the corresponding quarter of the previous year. The company's earnings per share on a consolidated basis stood at ₹(3.20) compared to ₹(3.08) in Q3FY25.

Regulatory Compliance and Exceptional Items

The company's financial results include exceptional items totaling ₹615 million on a consolidated basis, primarily comprising consideration received of ₹253 million for trademark licensing rights, loss of ₹213 million on sale and leaseback of non-current assets, and ₹708 million impact from implementation of New Labour Codes effective 21st November 2025. The statutory auditors M/s. Gokhale & Sathe have issued an unmodified opinion on the unaudited financial results.

Business Outlook and Geographic Performance

Managing Director Ms. Aditi Panandikar attributed the revenue growth primarily to the Export Formulations business and API business segments. The company's geographic revenue split shows India contributing ₹2,954 million and international markets ₹1,389 million to consolidated operations. With a global presence spanning multiple manufacturing facilities and regulatory approvals from USFDA and UK-MHRA, the company continues to focus on its integrated pharmaceutical operations across domestic and international markets.

Source: Indoco Remedies Limited regulatory filing