Financial Performance Overview

For Q2 FY27, Sai Life Sciences reported a year-on-year revenue growth of 23%. This growth was driven by a 20% increase in the CDMO (Contract Development and Manufacturing Organization) business and a 28% increase in the CRO (Contract Research Organization) business.

For the first half of fiscal year 2027 (H1 FY27), overall revenue growth stood at 17% year-on-year. The revenue contribution was split 38% from CRO and 62% from CDMO operations.

The company's EBITDA for Q2 FY27 was 28% of revenue, maintaining the year-on-year margin trajectory. For H1 FY27, EBITDA margins also stood at 28%.

Management indicated that they expect the second half of FY27 to be stronger than the first half.

Strategic and Operational Highlights

Integrated Partnerships & Customer Base: The company announced the conversion of another large pharma relationship into a strategic, integrated engagement, building on the first such partnership announced in the previous quarter. Operations have commenced with the first customer. The company is engaged in discussions with a few more large pharma customers to extend this integrated CRDMO (Contract Research, Development, and Manufacturing Organization) model. The large pharma client count remains at 19 out of a total of 25 large customers.

CRO Discovery Business: Two integrated discovery programs were successfully started with large pharma customers during the quarter. The company also noted an uptick in enquiries from Biotech customers, particularly for integrated engagements in new modalities like peptides, indicating a potential sector revival.

CMC Pipeline: The late-phase and commercial pipeline remains strong. One molecule was added to the late-phase pipeline, while one molecule moved from late-phase to commercial. The total number of active NCE molecules is 34, with 14 in late phase and 34 in commercial.

Headcount: The company's total headcount was approximately 4,400 as of 30th September 2026.

Capacity Expansion and Capex Programme

Capex Expenditure: The company incurred a capital expenditure of approximately INR 621 crores during the first six months of FY27 (H1). Of this, INR 358 crores was spent in Q2 alone.

Capex Guidance: The company remains on track with its overall capex plan for FY27, which is guided between INR 1,100 crores and INR 1,300 crores.

Project Updates:

  • The expanded small molecule manufacturing capacity at Bidar (approx. 220 KL) is now ready. Final quality trials are underway ahead of commencing commercial batches. This capacity is expected to be revenue accretive in FY27.
  • The commissioning timeline for an additional 225 KL capacity has been recalibrated. Due to a prioritization of projects aligned with customer needs, it is now expected to be available by early Q3 of FY28 (a shift from the earlier timeline). Management stated this change does not affect their ability to meet FY28 revenue commitments.
  • Design work has commenced on a new manufacturing site in Telangana. The planning and design process is progressing, with a ground-breaking expected in Q4 FY27. This site is intended for multi-modalities and has a land parcel larger than the current Bidar site.

New Modalities: Progress continues on new modalities. The peptide development lab has been commissioned. Additional peptide development labs are under construction. Design and master planning are underway for a new peptide plant in Telangana. Class 6 containment labs for ADC (Antibody-Drug Conjugate) development are also expected to come online soon.

Cost Environment and Supply Chain

Modest increases in raw material costs, particularly for certain solvents and chemicals, were noted due to the ongoing situation in the Middle East. The company's supply chain teams have ensured material availability and continuity of operations. Sai Life is working with customers to recover these incremental costs and expects the impact to be managed over time through these mechanisms.

Management Commentary and Forward-Looking Statements

Management's priorities remain deepening relationships with global pharmaceutical companies, expanding service offerings, and building capacity for long-term customer support. They highlighted that evolving regulatory developments in the U.S. (COINS Act) and China (export controls) reinforce the trend of supply chain diversification, which benefits established CRDMOs like Sai Life. The company remains focused on a science-led approach, balancing growth investments with execution discipline, and is confident in achieving its stated long-term growth and EBITDA projections. They reiterated that no guidance is provided on specific future revenue numbers from new partnerships or scientist additions.

Q&A Session Key Points

The Q&A session covered topics including:

  • The breakdown of CRO growth, attributed to integrated discovery offerings and increased large pharma penetration.
  • Clarification on the integrated service model versus integrated discovery programs.
  • Updates on the molecule pipeline and customer concentration.
  • The impact of AI on discovery services, viewed as a net positive that may lead to more molecules being made rather than reduced budgets.
  • Capacity utilization metrics, with a plant considered fully utilized at 70-75%.
  • Funding for future capex, which may involve a combination of leverage and potential market raises, with a commitment not to starve the business of necessary investment.
  • The broad-based nature of customer relationships, which are built at a senior level and are not dependent on any single individual.
  • The universe of large pharma companies looking to build strategic partnerships in India is broad, with almost every company evaluating some form of strategic engagement.
  • Growth is expected to be a gradual migration into newer modalities over the next 2-3 years as customer comfort increases.