Marksans Pharma Q2 FY26: Strong Recovery and Strategic Growth Ahead

Marksans Pharma Ltd., a prominent player in the generic pharmaceutical formulation sector, has reported a robust performance for the second quarter and first half of fiscal year 2026 (Q2 and H1 FY26). The company, headquartered in Mumbai, India, demonstrated a significant rebound from a softer Q1, with revenues growing 16% sequentially in Q2 FY26. This strong momentum was underpinned by robust demand across key markets, particularly in the US, coupled with timely order book execution and successful new product launches. The company's EBITDA surged by 44% and Profit After Tax (PAT) by 70% quarter-on-quarter, reflecting the benefits of operating leverage and improved cost efficiencies.

For Q2 FY26, Marksans Pharma's operating revenue stood at ₹720.4 crore, marking a 12.2% year-on-year increase. The US and North America market contributed ₹387 crore, growing 27% YoY, driven by new product launches in digestive and pain management segments. The UK and EU formulation business recorded revenues of ₹245 crore, while Australia and New Zealand contributed ₹61.3 crore. The Rest of the World (RoW) segment added ₹26.5 crore. The gross profit for the quarter increased by 7.4% YoY to ₹411.8 crore, although the gross margin slightly decreased to 57.2% from 59.7% last year, primarily due to product mix and pricing pressures in the UK. EBITDA for Q2 FY26 was ₹144.5 crore, with an EBITDA margin of 20.1%, an increase of 391 basis points from the previous quarter. PAT reached ₹99.1 crore, a 1.4% YoY increase, with an EPS of ₹2.2.

Strategic Initiatives and Market Performance

Marksans Pharma's strategic roadmap focuses on sustained high growth in revenues and margins. The company aims to achieve a revenue of ₹3,000 crore within a year and targets ₹5,000 crore by FY30. A key initiative is doubling revenue in the US and North America, with the ambition of becoming one of the top 5 private label OTC companies in the region. Similarly, in the UK, Marksans Pharma aims to be among the top 3 Indian pharmaceutical firms by revenue, with a goal to double UK revenues over the next 5 to 7 years. The company is also actively pursuing M&A opportunities to support growth in the European region, having already initiated organic operations in Germany.

Manufacturing capacity expansion is another cornerstone of their strategy. Marksans Pharma plans to double its low-cost manufacturing capacity in India from 8 billion to 16 billion units. This includes expanding its existing Goa plant for tablets by 2.5x and soft gels by 3x, with a CAPEX outlay of approximately ₹100 crore in 2026. This expansion is crucial for supporting the company's target of exceeding ₹4,000 crore in revenue. The company's Unit 2 facility in Verna, Goa, recently completed a USFDA inspection with zero Form 483 observations, reinforcing its strong compliance and quality standards.

Outlook and Investor Confidence

Management expressed optimism about sustaining the current momentum into the second half of the year, expecting continued improvement in both revenue and margins. The clarity regarding US tariffs has stabilized business sentiment, and new product launches are gaining traction. The company's working capital cycle, which improved to 150 days, is expected to normalize further to 120-130 days within the next two to three quarters. For the full year FY26, EBITDA margins are projected to settle in the 19-20% range, potentially exceeding 20%.

Marksans Pharma's commitment to disciplined capital allocation, strong cash generation (₹75.2 crore in H1 FY26), and a debt-free balance sheet with ₹666.5 crore cash balance as of September 30, 2025, provides a solid foundation for its inorganic growth strategy. The company's long-term credit rating was upgraded to CARE AA- with a stable outlook, reflecting its sound financial health. With a robust product pipeline, strategic expansions, and a focus on sustainable growth, Marksans Pharma is well-positioned to deliver resilient growth and long-term value for its stakeholders.

Sustainability and Governance

Marksans Pharma integrates Environmental, Social, and Governance (ESG) principles into its core strategy. The company aims to reduce annual virgin plastic usage in packaging, optimize packaging to reduce carbon footprint, and achieve sustainable waste disposal methods by 2028. Social initiatives include preventive healthcare, education, and welfare programs for women and children. Governance is upheld through ethical business practices, transparency, and accountability, ensuring compliance with policies and continuous skill enhancement for employees. The company allocates 2% of its net profit towards community development, demonstrating its commitment to social responsibility.