SMS Pharmaceuticals has reported a strong financial performance for the quarter and half year ended September 30, 2026, with net profit (PAT) surging 57% year-on-year (YoY) to Rs 40 crore, driven by robust revenue growth, improved price realisation and expanding operating margins.

 

The pharmaceutical company, which specialises in complex active pharmaceutical ingredients (APIs) and intermediates for global customers, posted a 30% YoY increase in revenue during the quarter, supported by higher volumes and better price realisation across its product portfolio.

 

Profitability also strengthened, with EBITDA margin expanding 145 basis points YoY to 21%. Gross margin, including manufacturing expenses, improved to 35%, reflecting the benefits of the company's backward integration initiatives.

 

Buoyed by its strong first-half performance and a positive business outlook, SMS Pharma has raised its FY27 expectations, with revenue growth and EBITDA margins now projected to exceed its earlier guidance.

 

The company is also accelerating its capacity expansion and product development initiatives. Its Rs 280 crore capital expenditure programme remains on track for completion by FY27, with Rs 160 crore already deployed.

 

Commenting on the performance, P Vamsi Krishna, Executive Director, stated: "We delivered a strong second quarter that exceeded our expectations. Revenue grew 30% YoY, supported by higher volumes and improved price realization across our product portfolio. Our EBITDA margin expanded 145 bps YoY to 21%.

 

"This performance demonstrates the structural advantages gained from the backward integration and capacity expansion initiatives undertaken over the past five years. Moving forward, we will continue investing in backward integration across our core portfolio to sustain this competitive edge.

 

"Our robust R&D framework, strengthened by over 200 skilled professionals, and consistent product filings will continue to drive our next phase of growth. We completed four DMF/CEP filings in H1FY27 and two more in October 2026, taking our FY27 total to six filings spanning anti-ulcer, anti-migraine, anti-depressant, anti-fungal, and anti-fibrotic APIs. Six to eight new molecules from our R&D pipeline are targeted for commercial production commencing in FY28. 

 

"As these molecules scale up over the subsequent six quarters, we expect them to be EBITDA accretive and contribute meaningfully to revenue diversification. Additionally, our Ibuprofen capex is expected to be completed in the coming quarters, taking total capacity to 9,600 MTPA, with volumes expected to ramp up gradually over the next six quarters."

 

He added: "Our Rs 280 crore capex plan remains on track for completion in FY27, with Rs 160 crore deployed to date. This initiative expands capacity for both existing products and our incoming pipeline of new molecules. Backed by our robust H1FY27 performance and a positive forward outlook, we are confident of surpassing our earlier full year guidance.

 

"Regarding our peptides business, the R&D facility at our 99.9% owned subsidiary, SMS Peptides Private Limited, is fully operational. To support its expansion, the Board recently approved a loan of Rs 50 crore to the subsidiary. Pilotscale production is targeted for Q4FY27. Furthermore, we have established SMS coLab Private Limited, a 100% wholly owned subsidiary, to serve as our dedicated CDMO platform for APIs and peptides.”

 

Strengthening its product pipeline remains a key growth priority for SMS Pharma. The company has completed six DMF/CEP filings in FY27 so far, including four in the first half and two additional filings in October 2026.

 

The filings cover APIs across anti-ulcer, anti-migraine, anti-depressant, anti-fungal and anti-fibrotic segments. The company is targeting commercial production of six to eight new molecules from its R&D pipeline beginning FY28.

 

These products are expected to become EBITDA-accretive as they scale up over the following six quarters, while also broadening the company's revenue base.

 

SMS Pharma is targeting 10 DMF/CEP filings for the full financial year and remains on track to achieve the goal.

 

The company's ongoing capacity expansion programme is expected to further strengthen its manufacturing capabilities. The Ibuprofen capex project is likely to be completed in the coming quarters, taking total capacity to 9,600 MTPA.

 

Volumes are expected to ramp up progressively over the next six quarters.

 

The broader Rs 280 crore capex programme, scheduled for completion in FY27, is designed to expand capacity for existing products while supporting the commercialisation of new molecules.

 

SMS Pharma is also stepping up its presence in the peptides and contract development and manufacturing organisation (CDMO) space.

 

The R&D facility at its 99.9%-owned subsidiary, SMS Peptides Private Limited, is now fully operational, with pilot-scale production targeted for Q4FY27. Initial contract research organisation (CRO) revenue from pilot-scale production is anticipated in Q2FY28.

 

To support the subsidiary's expansion, the Board has approved a Rs 50 crore loan.

 

Additionally, the company has incorporated SMS coLab Private Limited as a 100% wholly owned subsidiary. The new entity will function as a dedicated CDMO platform for APIs and peptides, marking another step in SMS Pharma's strategy to diversify its business and tap emerging opportunities.

 

With stronger margins, an expanding product pipeline, fresh manufacturing capacity and investments in peptides, SMS Pharma is positioning itself for its next phase of growth, while expecting to outperform its earlier FY27 revenue growth and EBITDA margin guidance.