Gland Pharma Q2 EBITDA rose 53% as margin reached 26% in FY27

Gland Pharma Limited reported Q2 FY27 revenue from operations of Rs 1,833.6 crore, up 23% year on year, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose 53% to Rs 480.4 crore and its EBITDA margin reached 26%, versus 21% in Q2 FY26. Profit after tax increased 58% to Rs 290.8 crore.

How did Gland Pharma perform in Q2 FY27?

Gland Pharma delivered higher revenue and faster profit growth in Q2 FY27, with revenue from operations rising by Rs 346.7 crore from Rs 1,486.9 crore in Q2 FY26 to Rs 1,833.6 crore. Total income rose 21% to Rs 1,902.6 crore, including other income of Rs 69 crore, which was 18% lower than Rs 84.2 crore a year earlier.

The quarter was also modestly higher sequentially. Revenue from operations was Rs 1,800.3 crore in Q1 FY27 and increased 2% to Rs 1,833.6 crore in Q2 FY27. Total income similarly moved 2% higher from Rs 1,861.5 crore in Q1 FY27, while other income increased 13% quarter on quarter from Rs 61.2 crore.

For the first six months of FY27, Gland Pharma reported revenue from operations of Rs 3,633.9 crore, up 21% from Rs 2,992.5 crore in 6M FY26. Total income increased 20% to Rs 3,764.1 crore, while other income declined 8% year on year to Rs 130.2 crore from Rs 141.7 crore.

Why did Gland Pharma’s EBITDA margin increase to 26%?

Gland Pharma’s reported EBITDA margin increased by 5 percentage points year on year to 26% in Q2 FY27, as EBITDA rose to Rs 480.4 crore from Rs 313.9 crore while revenue grew to Rs 1,833.6 crore. The presentation defines EBITDA as profit before tax plus finance expense and depreciation and amortisation, excluding other income and foreign-exchange losses.

Gross profit increased 25% to Rs 1,163.8 crore in Q2 FY27 from Rs 933.1 crore in Q2 FY26, but gross margin stayed at 63% in both periods. This shows that the reported EBITDA-margin expansion occurred without an increase in the reported gross-profit margin, which had been 65% in Q1 FY27 before returning to 63% in Q2 FY27.

Adjusted EBITDA, which adds employee stock-option compensation expense and a one-off goods and services tax-related provision to EBITDA, rose 50% year on year to Rs 503 crore. Its margin was 27%, compared with 23% in Q2 FY26, but declined from 28% in Q1 FY27, when adjusted EBITDA was Rs 510.2 crore.

For 6M FY27, EBITDA increased 43% to Rs 973.4 crore from Rs 681.7 crore in 6M FY26, and the EBITDA margin rose to 27% from 23%. Adjusted EBITDA also rose 43%, reaching Rs 1,013.2 crore with a 28% margin, compared with Rs 709.2 crore and a 24% margin in the prior-year half.

What happened to Gland Pharma’s net profit and research spending?

Gland Pharma’s profit after tax increased 58% year on year to Rs 290.8 crore in Q2 FY27, and its profit-after-tax margin widened to 16% from 12%. Profit before tax rose 52% to Rs 430.9 crore, with its margin increasing to 24% from 19% in Q2 FY26.

Sequentially, profit after tax declined 8% from Rs 317 crore in Q1 FY27, when the profit-after-tax margin was 18%. Profit before tax was down 1% from Rs 435 crore in Q1 FY27, while the pre-tax margin remained 24%; EBITDA also declined 3% from Rs 493 crore and its margin moved from 27% to 26%.

Research and development expenditure was Rs 107.7 crore in Q2 FY27, up from Rs 81.7 crore in Q2 FY26 and Rs 77.2 crore in Q1 FY27. Research and development represented 6% of consolidated revenue in the quarter, compared with 5% a year earlier and 4% in the preceding quarter.

In 6M FY27, research and development expenditure reached Rs 184.9 crore, compared with Rs 148.1 crore in 6M FY26. Despite the higher absolute expenditure, it remained 5% of consolidated revenue in both half-year periods; six-month profit after tax rose 52% to Rs 607.7 crore and its margin improved to 17% from 13%.

How did Gland Pharma’s balance sheet and cash metrics change?

Gland Pharma reported net worth of Rs 10,685.7 crore at 6M FY27, up from Rs 10,358 crore at FY26 and Rs 9,150.7 crore at FY25. The presentation defines net worth as equity share capital plus other equity, and reports return on capital employed at 13% for 6M FY27, compared with 11% in FY26 and 9% in FY25.

Return on net worth was 11% at 6M FY27, unchanged from FY26 but above 8% in FY25. Total asset turnover increased to 0.6 times from 0.5 times in both FY25 and FY26, while fixed-asset turnover increased to 1.7 times from 1.5 times in FY26 and 1.4 times in FY25.

Total cash was Rs 3,441.2 crore at 6M FY27, compared with Rs 3,359.1 crore at FY26, and net cash was Rs 3,221.6 crore versus Rs 3,115.7 crore. Net cash is cash and cash equivalents less total borrowings, including current maturities; cash flow from operations was Rs 602.7 crore in 6M FY27, compared with Rs 1,031.4 crore for FY26.

Net working capital rose to Rs 2,595.5 crore at 6M FY27 from Rs 2,485.5 crore at FY26. The cash conversion cycle reduced to 158 days from 164 days at FY26 and 172 days at FY25, reflecting inventory days of 123 versus 130, receivable days of 96 versus 97, and payable days of negative 61 versus negative 63.

Conclusion

Gland Pharma’s results combined year-on-year revenue growth with a larger increase in EBITDA and profit after tax. The five-percentage-point EBITDA-margin increase was accompanied by a stable 63% gross margin, while quarterly research and development expenditure increased to 6% of consolidated revenue from 5% a year earlier.

The disclosed sequential figures leave the direction of profitability and research spending as the next items to monitor. EBITDA margin was 27% in Q1 FY27 and 26% in Q2 FY27, gross margin declined from 65% to 63%, and research and development spending rose from Rs 77.2 crore to Rs 107.7 crore over the same period.