Emcure Q2 EBITDA rose 30.9% as margin reached 20.4% year on year

In the second quarter of financial year 2027 (Q2FY27), Emcure reported earnings before interest, tax, depreciation and amortisation (EBITDA) of Rs 574.8 crore, up 30.9% year on year, while EBITDA margin rose 103 basis points to 20.4% despite gross profit margin declining 131 basis points to 59.5%. Revenue grew 24.3% to Rs 2,820.5 crore.

Why did Emcure's EBITDA rise faster than revenue?

Emcure's EBITDA rose faster than revenue because operating costs below the gross-profit line increased more slowly than gross profit in Q2FY27. Revenue rose Rs 550.7 crore from Rs 2,269.8 crore in Q2FY26, while gross profit increased Rs 297.8 crore and EBITDA increased Rs 135.7 crore from Rs 439.1 crore, producing the 103-basis-point expansion in EBITDA margin.

The comparison shows an improvement below the gross-profit line even though gross profit grew 21.6%, slower than the 24.3% revenue increase. Gross profit margin fell to 59.5% from 60.8% a year earlier, but EBITDA margin reached 20.4% from 19.3%; operating costs between gross profit and EBITDA increased Rs 162.1 crore, compared with the Rs 297.8 crore gross-profit increase.

Emcure also improved sequentially from Q1FY27, when EBITDA was Rs 508 crore and the EBITDA margin was 19.7%. Q2FY27 EBITDA was 13.1% higher quarter on quarter, while revenue increased 9.3% from Rs 2,580.4 crore and gross profit margin rose 108 basis points from 58.4%.

What drove Emcure's Q2FY27 revenue growth?

Emcure's international business was the larger driver of Q2FY27 growth, rising 34.5% to Rs 1,665.2 crore and accounting for Rs 426.9 crore of the company's Rs 550.7 crore year-on-year revenue increase. Domestic revenue rose 12.0% to Rs 1,155.3 crore, contributing Rs 123.9 crore to growth.

Within international operations, Rest of World (RoW) delivered the fastest Q2 expansion, up 41.1% to Rs 629.7 crore. Europe rose 36.0% to Rs 604.3 crore and Canada increased 24.0% to Rs 431.2 crore. Emcure attributed RoW's non-antiretroviral growth acceleration to launches across Latin America, the Commonwealth of Independent States, Asia and Africa, with 20 approvals including Liposomal Amphotericin B in Brazil and Mexico.

The domestic business accelerated from 10% growth in Q1FY27 to 12.0% in Q2FY27. Emcure cited year-on-year IQVIA September 2026 growth of 39% for Orofer XT, 39% for Orofer FCM, 64% for Rosuvas EZ, 18% for Vylda and 43% for Tenectase, spanning women's health, cardio-metabolics and central nervous system therapies.

How did Emcure's gross, EBITDA and net margins change?

Emcure's gross margin fell to 59.5% in Q2FY27 from 60.8% in Q2FY26, while EBITDA margin increased to 20.4% from 19.3% and profit-after-tax margin rose to 11.5% from 11.1%. The respective year-on-year changes were negative 131 basis points, positive 103 basis points and positive 45 basis points.

The same pattern was present in the first half of FY27, although the gross-margin decline was larger. H1FY27 revenue grew 23.6% to Rs 5,400.9 crore and gross profit rose 18.9% to Rs 3,185.4 crore, reducing gross margin to 59.0% from 61.3%. EBITDA nevertheless increased 28.6% to Rs 1,082.8 crore and its margin advanced 79 basis points to 20.0%.

Profit after tax increased 29.3% year on year to Rs 325.1 crore in Q2FY27, compared with the 30.9% EBITDA growth rate. Profit before tax grew 30.6% to Rs 445.9 crore, while the effective tax rate was 27.1%, versus 26.4% in Q2FY26. Adjusted profit after tax was also Rs 325.1 crore; the presentation notes exceptional items, labour-code impact and changes in the fair value of contingent consideration.

What do Emcure's first-half cash flows show?

Emcure generated Rs 723.5 crore of net cash from operations in H1FY27, compared with Rs 256.2 crore in H1FY26. Profit before tax rose to Rs 839.4 crore from Rs 632.2 crore, while the net working-capital outflow narrowed to Rs 119.2 crore from Rs 425.3 crore.

Investment cash outflow increased to Rs 839.4 crore in H1FY27 from Rs 410.8 crore a year earlier. Emcure reported Rs 287.7 crore of capital expenditure, versus Rs 170 crore, and Rs 551 crore for mergers, acquisitions and consolidation, versus Rs 296.2 crore. Separately, Q2 capital expenditure was Rs 164.8 crore, more than double Rs 75.2 crore in Q2FY26.

Research and development spending was Rs 111 crore in Q2FY27, up from Rs 95.7 crore in Q2FY26, while its share of revenue decreased to 3.9% from 4.2%. For H1FY27, research and development was Rs 201.4 crore, or 3.7% of revenue, compared with Rs 168.7 crore, or 3.9%, in H1FY26.

How did Emcure's debt and capital position change?

Emcure's net debt was Rs 1,317.1 crore at September 30, 2026, up from Rs 1,053.8 crore at March 31, 2026 and Rs 1,102.6 crore at June 30, 2026. The company said debt rose because of Mantra earnout and Gennova consolidation payments, while net debt to trailing-12-month EBITDA remained 0.6 times at September 30, 2026.

Gross borrowings stood at Rs 1,467.3 crore at September 30, 2026, with cash and liquid investments of Rs 150.2 crore. Shareholders' funds increased to Rs 5,343.9 crore from Rs 4,950 crore at March 31, 2026, and total assets rose to Rs 9,904.5 crore from Rs 9,612.5 crore.

Return on capital employed was 24.9% at September 30, 2026, compared with 23.7% at March 31, 2026 and 23.4% at June 30, 2026. Emcure defines return on capital employed as earnings before interest and tax for a given year divided by capital employed, defined as total equity plus net debt at the end of the period.

Conclusion

Emcure's Q2FY27 result combined 24.3% revenue growth with 30.9% EBITDA growth and a 103-basis-point gain in EBITDA margin, even as gross margin dropped 131 basis points. International revenue, led by 41.1% RoW growth and 36.0% Europe growth, expanded faster than domestic sales, while first-half operating cash flow rose to Rs 723.5 crore.

The next disclosed markers are management's expectation of continued domestic growth over the full year as its strengthened team and portfolio gain traction, and pipeline execution in Europe, Canada and RoW. Investors can also watch the planned merger of Zuventus and Emcutix with the holding company under the One Emcure vision, as well as the Q2FY27 conference call scheduled for November 3, 2026 at 4:00 pm Indian Standard Time.