Mercury laboratories announced its unaudited financial results for the quarter and nine months ended December 31, 2025, presenting a mixed performance scenario. The pharmaceutical company's Board of Directors approved these results during their meeting held on February 11, 2026, in Vadodara.

Quarterly Financial Performance

The company's Q3FY26 performance reflected operational challenges with key metrics showing year-on-year decline. Revenue from operations contracted by 6.2% to ₹1,835.03 lakhs compared to ₹1,957.15 lakhs in Q3FY25. Net profit after tax decreased by 16.4% to ₹99.75 lakhs from ₹119.28 lakhs in the corresponding quarter of the previous year.

Nine-Month Performance Shows Recovery

Despite quarterly challenges, the nine-month performance demonstrated significant improvement. Net profit for the nine months ended December 31, 2025, surged by 77.3% to ₹360.84 lakhs compared to ₹203.47 lakhs in the corresponding period of FY25. Revenue from operations also showed growth of 1.9% to ₹5,549.43 lakhs from ₹5,444.21 lakhs.

Operational Expenses and Exceptional Items

The company's total expenses for Q3FY26 decreased to ₹1,683.80 lakhs from ₹1,845.75 lakhs in Q3FY25. Key expense components included cost of materials consumed at ₹629.78 lakhs, employee benefits expense of ₹417.26 lakhs, and other expenses totaling ₹461.97 lakhs. An exceptional item of ₹39.49 lakhs impacted quarterly results, related to gratuity provisions arising from the implementation of new labour codes by the Government of India.

Labour Code Impact and Regulatory Changes

The Government of India notified provisions of four new labour codes on November 21, 2025, consolidating twenty-nine existing labour laws into a unified framework. The revised definition of wages under these codes resulted in an incremental gratuity impact of ₹39.49 lakhs, which the company presented as an exceptional item in accordance with Ind AS 19 Employee Benefits.

Financial Position and Outlook

Mercury Laboratories maintained a stable financial position with paid-up equity share capital of ₹120.00 lakhs, consisting of shares with a face value of ₹10 each. The company operates in a single segment focused on pharmaceutical products. Total comprehensive income for Q3FY26 stood at ₹101.78 lakhs compared to ₹120.05 lakhs in the previous year quarter.

Mercury Laboratories has announced a 13-month delay in the commissioning of its new Small Volume Parenteral (SVPs) manufacturing plant, pushing the timeline from November 2025 to December 2026. The company cited revisions in Schedule M guidelines by the Ministry of Health and Family Welfare as the primary reason for the postponement.

Project Details and Delay Factors

The new facility, located at Jarod, is designed with an annual manufacturing capacity of 75 million units and involves an estimated investment of INR 30.00 crores. According to the company's disclosure, the delay is attributed to additional compliance and infrastructural requirements mandated by the revised Schedule M guidelines for pharmaceutical manufacturing facilities.

Impact on Operations

Mercury Laboratories has stated that the delay is not expected to have any material adverse impact on the overall business operations of the company. The management has assured that necessary steps are being taken to expedite the completion of the project.

Financial Performance

While the company faces a setback in its expansion plans, its recent financial results show a mixed picture:

The company has shown significant year-over-year growth in both quarterly and half-yearly results, with a notable increase in net profit after tax.

Management's Statement

Rajendra Shah, Managing Director of Mercury Laboratories, signed off on the regulatory filing, emphasizing the company's commitment to complying with the new guidelines while minimizing the impact of the delay on their operations.

As Mercury Laboratories navigates this setback in its expansion plans, stakeholders will be closely watching how the company manages to maintain its growth trajectory and adapt to the evolving regulatory landscape in the pharmaceutical industry.