Zim laboratories has disclosed receiving a significant GST demand notice from Maharashtra tax authorities, marking a regulatory development that requires investor attention. The pharmaceutical company made this disclosure under SEBI regulations, providing detailed information about the tax demand and its planned response.

GST Demand Details

The company received a demand notice dated 30th December, 2025 from the Office of the Deputy Commissioner of State Tax, Nagpur, Maharashtra. The notice was issued under Section 73 of the Maharashtra Goods and Services Tax Act, 2017 for the financial year 2021-22.

Nature of Alleged Violation

The tax authorities have alleged that ZIM Laboratories availed excess input tax credit during FY 2021-22. The demand notice encompasses the principal GST amount along with applicable interest and penalty provisions under the Maharashtra GST Act.

Company's Response Strategy

ZIM Laboratories has outlined its approach to address the tax demand:

• Taking appropriate steps to assess the demand thoroughly
• Planning to file an appeal with concerned authorities
• Engaging with tax officials to understand the matter comprehensively
• Initiating appropriate follow-up actions

Disclosure Timeline and Compliance

The company acknowledged an inadvertent delay in making this disclosure, attributing it to the time required to approach concerned officials and understand the matter before initiating follow-up actions. The disclosure was made pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Financial Impact Assessment

ZIM Laboratories has stated that it does not anticipate any material impact on the company's financials, operations, or other activities despite the substantial demand amount. The company's confidence appears to stem from its belief in the merit of its position and the availability of appellate remedies under the tax framework.

ZIM Laboratories Limited has delivered a robust Q3FY26 performance, demonstrating strong operational recovery and strategic progress across key business segments. The pharmaceutical company's quarterly results showcase significant improvement in profitability metrics and revenue growth, positioning it well for future expansion.

Strong Q3FY26 Financial Performance

The company reported impressive quarterly results with total operating income reaching ₹1,087 Mn in Q3FY26, reflecting a substantial 12.8% year-on-year growth compared to ₹963 Mn in Q3FY25. Quarter-on-quarter performance was equally strong, showing 22.5% growth from Q2FY26's ₹887 Mn.

The company's EBITDA performance showed resilience with ₹145 Mn in Q3FY26, up 9.1% from ₹133 Mn in Q3FY25. More notably, EBITDA margins improved significantly on a quarter-on-quarter basis to 13.4% from 8.8% in Q2FY26, indicating enhanced operational efficiency.

Nine-Month Performance and Business Segments

For the nine-month period ending Q3FY26, ZIM Laboratories reported total operating income of ₹2,691 Mn, a marginal decline of 0.4% compared to ₹2,703 Mn in 9MFY25. EBITDA for 9MFY26 stood at ₹280 Mn, down 15.5% from ₹332 Mn in the previous year, with margins at 10.4% versus 12.3% in 9MFY25.

The pharma business contributed 72% of total revenue with ₹786 Mn in Q3FY26, showing 7.4% quarter-on-quarter growth and 6.4% year-on-year improvement. The nutraceutical segment demonstrated exceptional performance with ₹300 Mn revenue, marking a significant 93% quarter-on-quarter growth and 34% year-on-year increase due to resolution of currency issues in legacy markets.

Export Business and Geographic Mix

ZIM Laboratories maintained its strong export focus with international business accounting for 88% of Q3FY26 revenue at ₹961 Mn, representing a robust 23% year-on-year growth. For 9MFY26, export business reached ₹2,290 Mn, constituting 85% of total revenue compared to ₹2,247 Mn (83%) in 9MFY25.

Innovation and R&D Investment

The company continues to prioritize research and development with total R&D spend of ₹230 Mn in 9MFY26, accounting for 8.6% of total operating income. In Q3FY26, R&D allocation reached ₹75 Mn, representing 6.9% of total operating income, focused on product development, dossier upgrades, registrations, and infrastructure enhancement.

The innovative product portfolio (NIP + OTF) generated ₹132 Mn in Q3FY26, showing 63% quarter-on-quarter growth and contributing 12.2% to total operating income, up from 9.2% in Q2FY26.

CAPA Remediation and Future Readiness

ZIM Laboratories has made substantial progress on its CAPA remediation plan, with the company stating it has completed and implemented most initiatives. The timeline indicates readiness for inspection from March 2026 onwards, with comprehensive validation by consultants and potential re-audit by EMA inspectors planned for Q4FY26.

Capital Raising and Expansion Plans

The board has approved, subject to shareholder and regulatory approvals, a preferential issue of up to 47,64,497 equity shares at ₹73.46 per share to Florintree Trinex LLP, aggregating up to ₹35 crore. The funds will be utilized for:

• Star Product 2 dedicated facility for EU/UK/Developed Markets
• Standalone nutraceutical facility for global markets
• CAPA remediation investments in equipment and automation

The company invested ₹229 Mn in gross block during 9MFY26, including ₹84 Mn towards BE studies and regulatory filings, demonstrating continued commitment to growth and compliance infrastructure.