Sanjivani Paranteral Navigates Q2 FY26 with Strategic Diversification Amidst Export Headwinds

Sanjivani Paranteral Limited, a prominent Indian pharmaceutical company, recently released its Q2 FY26 earnings, revealing a quarter marked by external challenges but underpinned by strategic diversification. The company reported a revenue from operations of INR15.5 crore, a 14.5% decline year-on-year. This dip in the top line translated into a contraction in profitability, with EBITDA falling by 25.7% to INR2.4 crore and Profit After Tax (PAT) decreasing by 28.6% to INR1.6 crore. Despite these headwinds, management remains confident, highlighting the foundational strength of its diversified business model and the promising outlook from new ventures.

The company's performance was significantly impacted by external disruptions across key export markets. In Nepal, local unrest led to a hold-up of export orders valued at nearly INR1 crore. Simultaneously, Latin American markets saw heightened FDA scrutiny on all Indian suppliers due to issues with unrelated exporters, slowing down product clearances and dispatches for Sanjivani. Furthermore, delays in obtaining necessary product approvals in some MENA markets pushed shipments to the subsequent quarter. These factors collectively contributed to the revenue decline and an increase in inventory levels, with over INR6 crore worth of stock held back due to export restrictions.

Segmental Performance and Strategic Shifts

Delving into the segmental performance, Injectables, a core product category, showed resilience with a 2.4% year-on-year growth, contributing INR9.3 crore to the revenue. However, the Oral segment experienced a notable decline of 35.4%, bringing in INR4.9 crore. The Nutraceuticals segment, a newer focus area, contributed INR1.2 crore. Exports continue to be a dominant revenue driver, accounting for 81.6% of the total revenue, with key markets including CIS, Middle East, Africa, and Latin America.

Sanjivani Paranteral is actively recalibrating its strategy to mitigate such external vulnerabilities. The company has diversified its business into three key verticals: the base business focusing on formulation sales and export markets, SPL Infusion for IV products (where Sanjivani holds a 60% equity), and Alevia Healthcare, a nutraceutical venture in Europe (with 45% equity). This diversification is aimed at reducing reliance on single geographies or product categories and building a more robust revenue stream.

Below is a financial summary of Sanjivani Paranteral Limited's performance:

Driving Future Growth Through New Ventures

The company's strategic initiatives are poised to drive future growth. The SPL Infusion Private Limited venture, focused on IV products, has secured all regulatory approvals, with commercial batches commencing. Management expects this plant to start booking revenue in Q3 FY26 and projects a full-year revenue potential of INR90 crore to INR110 crore, reaching optimal capacity by Q2 FY27. This venture alone is anticipated to contribute INR70 crore in FY27.

Similarly, the Alevia Healthcare joint venture in Prague, a nutraceutical initiative, is steadily gaining traction. Small orders have already been executed, and the company is actively participating in trade shows to build momentum. This venture is expected to contribute INR1 crore to INR1.5 crore to the bottom line in FY26, with projections rising to INR3 crore to INR3.5 crore in FY27. These new ventures, coupled with the company's continuous investment in R&D and facility upgrades, are critical for its long-term growth trajectory.

Outlook and Risk Mitigation

Management has provided an optimistic outlook, guiding for a minimum 10% sales growth for the base business from last year. For the next fiscal year, the base business is anticipated to grow by 15% to 20%. The company is also actively pursuing new Public-Private Partnership (PPP) models in India, with potential tie-ups expected soon. To mitigate regulatory and market risks, Sanjivani Paranteral is diversifying its geographical presence, dosage forms, therapeutic offerings, and partnerships. This proactive approach, combined with its strong quality track record and agile operations, positions the company to navigate the evolving pharmaceutical landscape effectively.

Sanjivani Paranteral Limited's Q2 FY26 performance reflects the impact of a challenging global environment. However, the company's strategic focus on diversification, new ventures, and robust risk mitigation strategies underscores its commitment to sustained growth. With new plants coming online and a clear roadmap for expansion, Sanjivani Paranteral aims to leverage its strengths to deliver improved performance in the upcoming quarters and years.