Neuland Laboratories , a leading pharmaceutical company specializing in Active Pharmaceutical Ingredients (APIs), reported a significant decline in revenue for the first quarter. Despite the weak start, the company remains confident about its growth prospects for the full year.

Financial Performance

The company's total income for Q1 stood at Rs. 300.60 crores, marking a 32.4% decrease compared to Rs. 444.00 crores in the same period last year. The decline was primarily attributed to the uneven nature of order flows in their Contract Development and Manufacturing Organization (CDMO) and specialty Generic Drug Substances (GDS) business.

Key Financial Metrics

Business Segments Performance

The commercial CMS projects and the GDS Prime segment were the main contributors to revenue this quarter. The specialty GDS business was subdued, with only Dorzolamide contributing significantly.

Future Outlook

Despite the weak start, Neuland Laboratories remains optimistic about its growth prospects. The company expects:

1. Commercialization of another CMS molecule later this fiscal year
2. Commercial production from their Unit 3 facility
3. Growing customer interest in their peptide capabilities

Investments and Expansion

• CAPEX: Rs. 79.00 crores invested during the quarter
• Expected total CAPEX: Rs. 250.00 crores
• New peptide facility expected to be completed next financial year

Management Commentary

Saharsh Davuluri, Vice-Chairman and Managing Director, stated, "While the previous year was a year of consolidation and Q1 has been a continuation of that, our customer pipeline gives us good visibility. Hence, we are confident with the commercialization of Unit 3 production block. It will give the business greater revenue momentum from the latter half of the fiscal year."

Long-term Growth Target

The company reiterated its 3-5 year CAGR target of 20%, emphasizing its focus on balancing growth and profitability through continuous optimization of costs and processes.

In conclusion, while Neuland Laboratories faced a challenging first quarter, the management remains confident in the company's ability to achieve strong growth, driven by new product commercializations, capacity expansion, and growing interest in their peptide capabilities.

Neuland Laboratories Limited , a leading pharmaceutical manufacturer specializing in active pharmaceutical ingredients (APIs), has released its financial results for the first quarter of fiscal year 2026, ending June 30, 2025. Despite a challenging quarter, the company's management remains optimistic about future growth prospects.

Financial Performance

Neuland Labs reported a total income of ₹300.60 crore for Q1 FY26, marking a significant 32.4% decrease from ₹444.40 crore in the same quarter last year. The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) stood at ₹42.10 crore, down 67.3% year-over-year, with the EBITDA margin contracting to 14% from 28.9% in Q1 FY25.

Profit Before Tax (PBT) for the quarter was ₹17.40 crore, a sharp 86.6% decline from ₹130.30 crore in the corresponding quarter of the previous year. Consequently, the company's Profit After Tax (PAT) decreased by 86.1% to ₹13.70 crore, compared to ₹98.30 crore in Q1 FY25.

Management Commentary

Despite the weak quarterly performance, Neuland Labs' management expressed confidence in the company's growth trajectory. Mr. Sucheth Davuluri, Vice-Chairman and Chief Executive Officer, stated, "While Q1 FY26 has been below par as a result of the flow of customer orders, it doesn't change our outlook on the healthy growth that we anticipate this financial year. The investments we have announced are proceeding according to plan and would be drivers of short as well as long term growth."

Mr. Saharsh Davuluri, Vice Chairman and Managing Director, added, "We see substantial growth this year from our commercial molecules even as there is a significant influx of new business from existing and new customers along with customers' pipeline projects making exciting progress."

Strategic Focus

The company is maintaining its focus on several key areas:

1. Investments: Neuland Labs is continuing with its planned investments, which are expected to drive both short-term and long-term growth.

2. Cost Optimization: Management emphasized ongoing efforts to optimize costs across products and processes, aiming to strengthen the company's position in key products.

3. Commercial Molecules: The company anticipates substantial growth from its commercial molecules in the current fiscal year.

4. New Business Development: Neuland Labs reported a significant influx of new business from both existing and new customers.

5. Pipeline Projects: The company noted exciting progress in customers' pipeline projects.

6. Capability Enhancement: Investments in people and capabilities are ongoing to further differentiate Neuland Labs as a Contract Development and Manufacturing Organization (CDMO) with deep expertise and agility.

Segment Performance

Custom Manufacturing Solutions (CMS)

In the CMS segment, Neuland Labs saw growth driven by commercial molecules. The company also reported an increase in new project orders, which are expected to be delivered over the course of this and the next financial year. Notably, there is increasing interest from biotech companies, leading to a rise in early-stage projects.

Generic Drug Substances (GDS)

The GDS segment saw key contributions from prime products such as Mirtazapine, Ezetimibe, and Escitalopram. The specialty business was primarily driven by Dorzolamide, with various other products also contributing to the segment's performance.

Operational Highlights

Neuland Labs' Unit-2 received an Establishment Inspection Report (EIR) following a successful FDA inspection in Q1, further solidifying the company's regulatory compliance and quality standards.

While the quarter presented challenges, Neuland Labs' management remains focused on executing its growth strategy, emphasizing investments in high-profit areas such as Contract Development and Manufacturing Organization (CDMO) services, specialty APIs, and peptide production. These initiatives aim to capitalize on global outsourcing demand and expand the company's product pipeline, positioning Neuland Labs for potential growth in the coming quarters.