Concord Biotech Navigates Headwinds with Strategic Vision and Robust Fundamentals

Concord Biotech Limited, a prominent player in the biopharma sector, recently announced its financial results for the second quarter and first half of fiscal year 2026 (Q2 & H1 FY26). While the company experienced a temporary dip in revenues, the management remains optimistic, highlighting underlying strong unit economics and strategic initiatives poised to drive future growth. For Q2 FY26, revenues stood at ₹247 crore, marking a 21% growth quarter-on-quarter but a 20% decline year-on-year. H1 FY26 revenues reached ₹451 crore, a 14% decrease from the previous year.

The subdued performance in the first half was primarily attributed to a few key factors. A significant delay in receiving the Written Confirmation from the Central Drugs Standard Control Organization (CDSCO) impacted sales in the European Union. This approval, a prerequisite for EU market access, was finally secured on November 4, 2025, allowing shipments to resume. Additionally, a government tender in the Middle East was deferred due to regional uncertainties and conflicts. The company also observed a temporary shift in procurement patterns from US customers, influenced by tariff uncertainties, which have since been clarified, leading to a return to normal order flows.

Financial Resilience Amidst Challenges

Despite these revenue challenges, Concord Biotech demonstrated financial resilience. The company's gross margins remained robust, expanding by 480 basis points year-over-year in Q2 FY26. EBITDA for Q2 FY26 was ₹88 crore, and for H1 FY26, it was ₹150 crore. The EBITDA margin stood at 36% for Q2 FY26. Notably, excluding the initial start-up expenses associated with the commercialization of its new injectable facility at Valthera, the comparable EBITDA margin was 41%, aligning with historical levels. This indicates that the core business profitability remained strong.

Profit after tax (PAT) for Q2 FY26 was ₹63 crore, with a PAT margin of 25.5%. For H1 FY26, PAT was ₹107 crore, reflecting a 31% year-on-year decline, primarily due to the revenue deferrals and new facility costs. The management emphasized that these revenue impacts are largely timing differences, not a loss of business opportunity, and anticipates a stronger performance in the second half of the fiscal year.

Financial Summary (H1 FY26)

Strategic Initiatives and Future Growth Drivers

Concord Biotech is actively pursuing several strategic initiatives to ensure sustained long-term growth and market penetration. The company successfully completed multiple regulatory inspections, including USFDA, EU-GMP (for Dholka and Limbasi facilities), Russian GMP, and NAFDAC approvals. These approvals are critical for business continuity and expanding global market access.

New Ventures and Market Expansion:

• Cell & Gene Therapy: Concord Biotech has invested in Cellimmune Biotech Limited, marking its entry into advanced cancer therapies like CAR-T cells. This initiative is currently in the development phase, with a focus on the Indian market initially, and is expected to progress over the next 12 to 15 months.
• Injectable Facility Commercialization: The new injectable facility at Valthera, commissioned in March 2025, is gaining traction. The company is witnessing a strong rise in enquiries and revenue, primarily targeting the Indian market, with plans to expand into emerging markets within 12 to 18 months, supported by an anticipated WHO GMP certification by January or February.
• US Market Presence: To strengthen its direct commercial footprint in the U.S., Concord Biotech incorporated Stellon Biotech Inc. This subsidiary will manage marketing, distribution, and commercialization, aiming to expand market access and unlock greater value.
• Domestic Market Strengthening: Concord Lifegen Limited was established as a wholly owned subsidiary to enhance domestic marketing, sales, and distribution capabilities, sharpening market focus and brand presence in India.

Product Portfolio and CDMO Opportunities:

The company is in advanced stages of discussions with innovator companies for generic API supplies and is seeing positive traction in second-source qualification initiatives. This strategy aims to expand wallet share and potentially establish Concord Biotech as a primary supplier. The CDMO (Contract Development and Manufacturing Organization) business continues to progress well, representing a significant long-term growth driver with a large addressable market opportunity.

Segment Performance (H1 FY26)

Outlook: Confident in Recovery and Long-Term Vision

Concord Biotech's management expressed confidence in a stronger second half of FY26, anticipating growth higher than H2 FY25. The company's diversified product portfolio, robust regulatory approvals, and strong customer relationships position it well to overcome current challenges. By expanding geographically, deepening client relationships, and broadening its product portfolio through both API and formulation products, Concord Biotech aims to capture future growth. The focus remains on strengthening domestic and global presence, investing in innovation, and delivering sustainable, long-term value to its stakeholders, reinforcing its commitment to 'Biotech for Mankind'.