Natural Capsules Limited announced its unaudited consolidated and standalone financial results for Q2 and H1 FY27 ended September 30, 2026 through a regulatory filing pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Financial Highlights for Q2 FY27
- Revenue: ₹51.15 crore (5% growth)
- EBITDA: ₹3.01 crore (169% growth)
- EBITDA Margins: 5.88% (358 basis points improvement)
- PAT: ₹(4.22) crore net loss (26% improvement)
- EPS: ₹(4.08) (26% improvement)
Financial Highlights for H1 FY27
- Revenue: ₹99.86 crore (10% growth)
- EBITDA: ₹4.13 crore (465% growth)
- EBITDA Margins: 4.14% (538 basis points improvement)
- PAT: ₹(9.97) crore net loss (24% improvement)
- EPS: ₹(9.61) (21% improvement)
Operational and Strategic Updates
Capsules Business Performance:
Q2FY27 was a strong quarter for the capsules business. The company made a strategic decision to convert idle HPMC lines to gelatine capacity to better utilize existing infrastructure. This conversion brought additional gelatine volumes that drove growth for the quarter. The approximately 3% improvement in realizations achieved in the previous quarter was maintained in Q2.
Capacity Expansion:
The second HPMC line is currently being converted and is expected to add volumes in the second half of the year.
Logistics Challenges:
Container availability and freight rates remained areas of concern during the quarter, but the company managed to maintain profitability despite these challenges.
Raw Material Outlook:
Management expects gelatine prices to rise due to increasing international coal and oil prices. The company anticipates being able to pass these cost increases to customers as done in previous quarters.
Customer Development:
Demand remains robust with several new customers added during the quarter. Mankind Pharma became a customer in Q2, and the company successfully completed an audit by Zydus Lifesciences, with business expected to begin in coming quarters.
API Business Restructuring
Leadership Changes:
The company appointed a new Chief Executive Officer for API operations who previously spent nine years at Shilpa Medicare. Under new leadership, significant operational changes have been implemented.
Business Rationalization:
The API business is closing loss-making business lines and customer accounts. Focus has shifted to obtaining regulatory registrations and approvals for products in appropriate markets.
Regulatory Filings Strategy:
- Focus on filing Drug Master Files (DMFs) with US FDA
- Certificates of Suitability (CEPs) for European market
- Regulatory filings across other geographies
- WHO GMP certification expected imminently
- Certificate of Pharmaceutical Product (COPP) filings for seven products (four completed validation, remaining scheduled for December, completion expected by March 2027)
- Pipeline of 16 molecules for US DMF and CEP filings (eight in FY28, eight in FY29)
- US FDA audit expected by Q1FY29
Contract Manufacturing:
- Programme with Fermbox Bio faced challenges, with client taking products back to lab for process rework
- Exploring contract with another organization, with discussions ongoing with other parties
- Exploring CMO opportunity for synthesis block
- Aim is to utilize available capacity and absorb costs until product load builds up
Forward Outlook
Management expects EBITDA to remain in the current range over coming quarters. Once WHO GMP certification and COPP filings are complete, the company expects customer profile to broaden, leading to higher revenues and better profitability. Long-term confidence remains in scaling the API business profitably.
Company Background
Natural Capsules Limited is a hard capsule shell manufacturer that pioneered vegetarian capsules in India and is the second largest Indian manufacturer of gelatin capsules. Incorporated in 1993 in Bangalore, expanded to Pondicherry in 2003. The company is foraying into API manufacturing through subsidiary Natural Biogenex Private Limited using complex high-end patented technology developed in-house.
Disclaimer
The document contains forward-looking statements subject to risks and uncertainties including government actions, economic developments, technological risks, and other factors that could cause actual results to differ materially. The company undertakes no obligation to update these statements.