Quarterly Financial Highlights (Consolidated)

  • Revenue From Operations: ₹48.71 crore, representing a 17% decrease quarter-on-quarter (QoQ) from Q4FY26's ₹58.45 crore, but an 8% increase year-on-year (YoY) from Q1FY26's ₹45.20 crore.
  • Other Income: ₹2.35 crore, a 208% increase QoQ and a 556% increase YoY.
  • Total Income: ₹51.06 crore, down 14% QoQ but up 12% YoY.
  • Total Operating Expenses: ₹47.59 crore, down 17% QoQ and up 6% YoY.
  • EBITDA: ₹1.12 crore, down 16% QoQ but up 251% YoY from ₹0.32 crore.
  • EBITDA Margins (Excl. Other Income): 2.30%, an increase of 2 basis points (BPS) QoQ and 159 BPS YoY.
  • Depreciation and Amortisation: ₹4.33 crore, up 1% QoQ and 3% YoY.
  • Finance Cost: ₹4.97 crore, up 72% QoQ and 97% YoY.
  • Profit Before Tax and Exceptional Item: Loss of ₹5.83 crore, a 15% improvement QoQ (from a loss of ₹5.08 crore) and a 4% deterioration YoY (from a loss of ₹6.06 crore).
  • Profit After Tax: Loss of ₹5.74 crore, a 15% improvement QoQ and a 3% deterioration YoY.
  • EPS: Loss of ₹5.55, a 15% improvement QoQ and a 3% deterioration YoY.

Management Commentary by Sunil Mundra, Managing Director

Capsules Business: Q1FY27 was described as a "strong operational quarter." The reported numbers are not directly comparable to Q4FY26, which benefited from the dispatch of deferred inventory following a Puducherry plant shutdown. The business witnessed sustained demand and improved realizations. Input cost rises were navigated via timely pass-throughs to customers, supporting margin preservation. The gelatine capsules business delivered healthy margins.

An ERP system implementation towards the quarter's end caused a brief disruption to the billing and dispatch cycle, pushing sales from the final five days of Q1 into Q2. Absent this, reported revenue would have been modestly higher. The depreciation of the rupee provided a meaningful tailwind to export realizations. Demand trends are reported as firm into Q2FY27.

HPMC Segment: Demand in the US market remained erratic with continued duty structure uncertainty. With no material US export volumes in the quarter, a pragmatic decision was made to temporarily convert one HPMC line to a gelatine line to optimize capacity utilization. A second HPMC line is expected to be converted similarly in the coming month. The US market will continue to be monitored.

API Business (via subsidiary Natural Biogenex Pvt Ltd): The quarter presented a mixed picture. Geopolitical uncertainty weighed on operations. The appreciation of the Chinese yuan and depreciation of the Indian rupee created headwinds for African export business routed through merchant exporters, moderating volumes.

Operational progress was made:

  • The first batch under a contract manufacturing agreement with Fermbox Bio commenced in August 2026.
  • A new contract manufacturing agreement was executed with a Mumbai-based client.
  • Prednisolone synthesis was successfully completed at gram-scale batches. The first fully backward-integrated prednisolone batch is expected by end-September 2026.
  • A fermentation step was successfully transitioned to an enzymatic route, improving yields and optimizing costs.
  • The WHO GMP application process has been initiated, with an associated audit expected by end-Q2FY27.
  • A Chief Operating Officer for the API business was appointed, a professional with over 30 years of industry experience including a prior stint at Shilpa Medicare.

Company Overview & Business Segments

Natural Capsules Limited (NCL) is a hard capsule shell manufacturer, the second largest Indian manufacturer of gelatin capsules and a pioneer of vegetarian capsules in India. It is foraying into API manufacturing through its subsidiary, Natural Biogenex Private Limited.

  • Installed Capacity (Capsules): 20.25 billion capsules per annum (BCPA) as of FY26, enhanced from 19.50 BCPA with one new HPMC line commissioned in FY26.
  • Exports: Contributed 28.94% of revenue in FY26. The company exports to 28 countries across 5 continents.
  • Customer Base: 311 customers. 30% are customers for over 10 years; 58% for over 5 years. Repeat business constituted 80% of FY26 turnover.
  • API Products: Focus on steroidal APIs - Prednisolone, Betamethasone, Dexamethasone, Hydrocortisone and their derivatives.
  • PLI Scheme: The company has 3 approvals for steroidal APIs under the government's Production Linked Incentive (PLI) scheme, which offers financial incentives on sales for 6 years (20% for FY25-FY28).

Historical Financials (Consolidated)

Profit & Loss (₹ Crore)

| Particulars | FY22 | FY23 | FY24 | FY25 | FY26 |

| Revenue | 135.07 | 172.37 | 155.42 | 169.21 | 187.20 |

| EBITDA | 25.38 | 35.04 | 19.91 | 17.52 | (1.56) |

| EBITDA % | 18.79% | 20.33% | 12.81% | 10.35% | (0.83%) |

| PAT | 13.91 | 18.45 | 5.55 | 0.62 | (24.66) |

Balance Sheet (₹ Crore)

| Particulars | FY22 | FY23 | FY24 | FY25 | FY26 |

| Networth | 82.98 | 148.25 | 228.80 | 257.16 | 234.72 |

| Total Assets | 164.28 | 288.71 | 376.53 | 419.35 | 424.16 |

Cash Flow (₹ Crore)

| Particulars | FY22 | FY23 | FY24 | FY25 | FY26 |

| CFO | 1.16 | 17.22 | (8.35) | 26.75 | 10.92 |

| CFI | (45.88) | (104.63) | (72.59) | (44.48) | (10.77) |

| CFF | 46.02 | 87.49 | 81.72 | 16.17 | (0.62) |

Strategic Priorities

Key growth drivers and strategic actions include:

  • Capacity enhancement with state-of-the-art machinery in the capsules division.
  • Scaling API production as the only backward-integrated manufacturer of steroidal APIs in India.
  • Exploring opportunities to set up capsules manufacturing facilities in foreign/domestic markets.
  • Benefiting from the China Plus One strategy and government PLI incentives.
  • Focusing on regulated markets and marquee pharma clients for the capsules business.
  • A strong focus on R&D for new products and processes.