Gland Pharma CDMO revenue rises 31%, reaches 45% of sales

Gland Pharma Limited reported contract development and manufacturing organisation (CDMO) revenue of Rs 822.7 crore in Q2 FY2027, up 31% year on year and equal to approximately 45% of its Rs 1,833.6 crore consolidated revenue. The segment grew faster than critical injectables, which increased 18% to Rs 1,010.9 crore.

How large was Gland Pharma’s CDMO business in Q2 FY2027?

Gland Pharma’s CDMO business generated Rs 822.7 crore in Q2 FY2027 and represented about 45% of consolidated revenue. The company said commercial supplies under previously signed CDMO contracts, launches within the segment, and development and manufacturing partnerships entered during the quarter drove the 31% year-on-year increase.

Critical injectables remained the larger revenue stream at Rs 1,010.9 crore in Q2 FY2027, but its 18% growth was slower than CDMO’s 31% expansion. CDMO therefore accounted for nearly half of quarterly revenue while Gland Pharma continued to sell its critical injectable portfolio across regulated and other markets.

What changed in Gland Pharma’s first-half revenue mix?

Gland Pharma’s CDMO revenue rose to Rs 1,714.2 crore in H1 FY2027, contributing approximately 47% of Rs 3,633.9 crore consolidated revenue. The first-half proportion was about 2 percentage points above the approximately 45% reported in Q2 FY2027, although the company described both contributions as approximate.

CDMO grew 25% year on year in H1 FY2027, compared with 18% growth in critical injectables, which generated Rs 1,919.7 crore. Consolidated revenue increased 21% from Rs 2,992.5 crore in H1 FY2026, making faster CDMO growth a contributor to the changing mix.

Separately, Cenexi recorded quarterly revenue of EUR 41 million and an earnings before interest, tax, depreciation and amortisation (EBITDA) loss of EUR 6 million. Management attributed the loss primarily to planned annual shutdowns across facilities and said higher capacity utilisation, cost optimisation and operating leverage were expected to restore profitability from Q3.

What is driving Gland Pharma’s CDMO expansion?

Gland Pharma said Q2 FY2027 CDMO growth came from commercial supply under signed contracts, new product launches and development and manufacturing partnerships. It also said technology transfers for projects were advancing according to plan and that it was in active discussions with several global companies.

The company secured manufacturing contracts for microspheres and respiratory products during Q2 FY2027 after expanding respiratory-product capabilities. Management said the opportunity pipeline included complex injectables, specialty formulations and differentiated manufacturing platforms, but it did not disclose a pipeline value, project count or contracted future revenue.

Gland Pharma added execution resources during Q2 FY2027, appointing a head of technology transfer and two senior project-management personnel for CDMO contracts. It also onboarded a China-based business-development head for innovative and specialty products, while management said it would onboard a China-based Chief Investment Officer for investment and merger-and-acquisition opportunities.

How did the wider business support Gland Pharma’s mix shift?

Gland Pharma’s Q2 FY2027 consolidated revenue increased 23% year on year to Rs 1,833.6 crore, while reported EBITDA increased 53% to Rs 480.4 crore and profit after tax increased 58% to Rs 290.8 crore. Reported EBITDA margin was 26%, compared with approximately 21% in the corresponding quarter of the prior year.

Management attributed the profitability improvement to higher revenue, increased CDMO contribution, business mix, operating leverage and manufacturing-network efficiency initiatives. Adjusted for a Rs 22.6 crore non-cash employee stock option plan expense, adjusted EBITDA was Rs 503 crore and the adjusted EBITDA margin was 27%.

The United States was Gland Pharma’s largest market, with Q2 FY2027 revenue up 42% year on year to Rs 1,179.5 crore, supported by recent launches, existing-product volumes and CDMO programmes. Europe and other regulated markets grew 23% to Rs 411 crore, while rest-of-world revenue was Rs 204.4 crore and was affected by delayed NUPCO tender-result announcements in Saudi Arabia.

What capacity plans could support Gland Pharma’s CDMO contracts?

Gland Pharma is pursuing a previously announced Rs 2,000 crore capacity-expansion programme covering ophthalmic capacity, a new blow-fill-seal line, and oncology and sterile-manufacturing enhancements using isolator technology. Management said these investments are intended to expand participation in complex and specialised categories serving commercial and CDMO opportunities.

The company has also initiated a brownfield programme at Pashamylaram with three isolator-based vial manufacturing lines, at an expected outlay of about Rs 1,000 crore. Commercial operations are anticipated from FY2030 onward, and management said the project addresses incremental-volume requirements from newer CDMO contracts and expected product-line constraints.

Additional bag-manufacturing capacity installed during FY2027 awaits a US Food and Drug Administration inspection before products can be commercialised from that line. Gland Pharma also acquired land for a greenfield project at Vizag Special Economic Zone and said it would seek board approval for additional expansion capital expenditure in the coming quarter.

Conclusion

Gland Pharma’s Q2 FY2027 results show CDMO becoming a central revenue contributor, generating Rs 822.7 crore, or approximately 45% of quarterly sales, and growing 31% versus 18% for critical injectables. In H1 FY2027, CDMO reached approximately 47% of revenue as the United States, product launches and manufacturing partnerships supported 21% consolidated revenue growth.

The next developments to watch are management’s expectation of Cenexi profitability from Q3, a US Food and Drug Administration inspection for the bag-manufacturing line, and board consideration of additional Vizag expansion spending in the coming quarter. The Rs 1,000 crore Pashamylaram brownfield programme is anticipated to start commercial operations from FY2030.