Nature of the Disclosure

Regulatory filing of the Q2 FY27 earnings call transcript pursuant to Listing Regulations.

Financial Highlights for Q2 FY27

Consolidated Performance:

  • Operating Revenue: Grew 2% year-on-year (YoY)
  • EBITDA: INR 865 crores
  • Interest Cost: INR 240 crores (declined 12% YoY)
  • Reported Net Profit (before exceptionals): INR 44 crores

First Half (H1) FY27 Performance:

  • Consolidated Operating Revenue: INR 8,725 crores (6% YoY growth)
  • Consolidated EBITDA: INR 1,767 crores
  • Consolidated EBITDA Margin: 20%

Business Segment Performance

Biosimilars Business (Q2 FY27)

  • Revenue: INR 2,809 crores
  • EBITDA: INR 623 crores
  • R&D Investment: 7% of revenues
  • H1 FY27 Performance: Revenue grew 9% YoY with an EBITDA margin of 24%.

Generics Business (Q2 FY27)

  • Revenue: INR 774 crores
  • EBITDA: INR 64 crores (vs. INR 7 crores in Q2 FY26)
  • EBITDA Margin: 8% (vs. 1% in Q2 FY26)
  • H1 FY27 Performance: Revenue grew 15% YoY. EBITDA stood at INR 120 crores vs. an EBITDA loss of INR 28 crores in H1 FY26.

Services Business (Syngene International) (Q2 FY27)

  • Revenue: INR 833 crores (13% quarter-on-quarter improvement)
  • EBITDA: INR 175 crores
  • EBITDA Margin: 20% (improved from 15% in Q1 FY27)
  • H1 FY27 Performance: Revenue stood at INR 1,569 crores and EBITDA at INR 291 crores.

Key Operational and Strategic Updates

One-Off Revenue Deferral:

Approximately 5% of the quarter's revenues were deferred due to logistics issues, including those related to the geopolitical situation. These shipments occurred in Q2 but revenue was recognized in October 2026 (Q3 FY27). The associated EBITDA from these shipments will flow into Q3.

Leadership Transitions (Effective 2027):

  • Rhonda Duffy (Chief Operations Officer) will retire in March 2027. George Kaliviotis will succeed her as COO starting April 2027.
  • Mukesh Rathi will take over as Chief Technology Officer from Mandar Ghatnekar in January 2027.
  • Matthew Erick (Chief Commercial Officer for advanced markets) is leaving. Joshua Salsi will lead both Biologics and Generics businesses in North America.

Product & Market Updates:

North America:

  • Strong demand for Insulin Glargine, Ogivri, and Fulphila, which maintained leadership positions.
  • Encouraging momentum for Yesintek (biosimilar Ustekinumab), with a U.S. market share of 34%.
  • Positive initial response to Yesafili (biosimilar Aflibercept) post U.S. launch.
  • Secured over $100 million in new contracts and payor wins.
  • FDA approval received for Yesintek single-dose prefilled autoinjector.

Europe:

  • Launched Ustekinumab autoinjector, Denosumab, and Aflibercept across several markets.
  • Secured approximately 20 tender awards in key markets like Italy, Spain, France, and Denmark.
  • Positive CHMP opinion received for biosimilar Pertuzumab (Pebrilzo).
  • EMA and U.K. MHRA approval secured for the new Insulin Glargine fill-finish line in Malaysia.

Emerging Markets & Partnerships:

  • Launched 13 new products across APAC, Latin America, and AFMET-CIS.
  • Brazil PDP Program: Secured a landmark 10-year contract with a total value of $400 million for Pertuzumab in partnership with Bahiafarma and Bionovis. The consortium received 100% allocation. Supplies are scheduled to begin in Q4 FY27, with the full annual run rate beginning in FY28.
  • Working with Biomm in Brazil on semaglutide (GLP-1 opportunity).

Global Settlement:

  • Entered a global settlement and license agreement with Genentech for Pebrilzo (biosimilar Pertuzumab).
  • This secures the earliest licensed launch dates: EU and U.K. from early calendar 2027, and the U.S. from Q3 calendar 2028, subject to regulatory approvals.

Manufacturing & Capacity:

  • Commissioned a second fill-finish line for insulin in Malaysia.

Guidance and Outlook

  • Management expects a stronger second half (H2) of FY27 compared to the first half (H1).
  • Underlying business momentum remains strong despite the Q2 revenue deferral.
  • Confidence is supported by scaling growth drivers (Yesafili, Yesintek, insulins) and new opportunities like Pertuzumab.
  • Comfortable with biosimilars delivering EBITDA margins in the mid-20s range, improving as revenues scale.
  • Focus remains on disciplined execution, margins, free cash flows, debt reduction, and improving Return on Capital Employed (ROCE).

Q&A Session Key Insights

Yesafili (Aflibercept) in U.S.:

  • Described as a "meaningful growth platform" with greater than 50% market access established.
  • The company is focused on value maximization and profitability over chasing market share, especially in the Part B (medical benefit) space.

Pertuzumab Timeline:

  • Brazilian supplies begin Q4 FY27.
  • European opportunity opens in Q4 FY27 across 27 markets.
  • U.S. launch is scheduled for Q3 calendar 2028.

Generics Business:

  • Growth is steady across API, formulations, and new launches like liraglutide (GLP-1).
  • The company is a fully integrated player in the GLP-1 space, with capabilities in both synthetic and fermentation routes for semaglutide.
  • H1 FY27 margins were impacted by higher freight costs (~$5 million) and higher solvents cost (~$5 million), which are now easing.

Interest Cost & Depreciation:

  • Interest cost run rate is INR 230-240 crores per quarter. A sequential increase from Q1 was attributed to currency and working capital investments for new launches. Further reduction is expected as debt is retired.
  • Depreciation and Amortization increased due to the capitalization of intangibles for new launches and depreciation for the new Malaysia line. This level is considered representative of future quarters.

Insulin Franchise:

  • The franchise has an annual run rate exceeding $300 million.
  • It is a limited competition space (only innovators and Biocon). Demand is as much as the company can make.
  • The approach to launching Aspart in the U.S. commercial channel is cautious, prioritizing meeting the strong demand for Glargine first.