Sai Life Sciences FY26: Strong growth, a bigger capex cycle, and deeper large pharma ties

Sai Life Sciences closed FY26 with a sharp step-up in both growth and profitability, while setting up FY27 as an investment-heavy year aimed at expanding its integrated CRDMO platform.

On a consolidated basis, revenue from operations rose to INR 2,192 crore in FY26 from INR 1,695 crore in FY25, a 29% year-on-year increase. EBITDA (before exceptional items) increased to INR 661 crore from INR 425 crore, taking the EBITDA margin to about 30% from 25% in FY25. Profit after tax for FY26 was reported at INR 349 crore, compared with INR 170 crore in FY25. The presentation also cited PAT of INR 355 crore before exceptional items.

A notable feature of the year was the broad-based nature of growth. The CDMO business (CMC services) grew 33% year-on-year to INR 1,417 crore, while the CRO business (discovery services) grew 24% to INR 775 crore. For FY26, CDMO contributed 65% of revenue and CRO contributed 35%.

Segment performance and what drove FY26

The company positioned its integrated model as a key differentiator, with discovery, development, and manufacturing capabilities offered under one platform. Management commentary pointed to increasing engagement from large pharma customers, both in terms of revenue contribution and the depth of collaboration.

On the CRO side, the presentation highlighted that discovery services have grown steadily over FY22 to FY26, reaching INR 775 crore in FY26. The company noted higher traction for integrated discovery programs, increased cross-sell opportunities from existing CDMO customers, and growing use of automation across DMPK and biology workflows.

On the CDMO side, the company reported continuing momentum in development and manufacturing services, supported by a pipeline that it described as spanning 34 active NCE commercial molecules and 155 programs in earlier phases. In the concall, management also stated that commercial supply qualification had been received from two additional large pharma customers.

The FY27 pivot: front-loaded capex with demand visibility

The most important forward-looking element in the FY26 communication was the jump in planned capital expenditure. The company reported FY26 capex of INR 633 crore (against a budget of INR 700 crore). For FY27, capex guidance was raised to INR 1,100 to INR 1,300 crore.

The company described this as a front-loaded investment cycle aligned with customer demand and longer-term strategic opportunities. In the presentation, FY27 capex split by business was indicated as 70% for CDMO and 30% for CRO. Management also said the spend would be split roughly 75% for capacity expansion and 25% for capability, AI and new technology.

On capacity, management discussed the Bidar manufacturing expansion path from 700 KL to around 1,150 KL. On the call, it was stated that 225 KL of the incremental capacity is expected to come during FY27 and the remaining 225 KL in the subsequent year.

The company also described broader investments beyond reactor capacity. These include additions to discovery and development infrastructure, analytical and chemistry equipment, and capability building across areas such as peptides, ADC-related work in discovery, and high-throughput experimentation.

Technology, digitization, and sustainability themes

Sai Life Sciences tied its medium-term differentiation to technology and execution systems, not only physical capacity. The presentation stated that R and D and manufacturing processes have reached about 85% digitization. It also indicated that digitization in manufacturing is expected to be completed by calendar year 2027, and that an AI or ML proof-of-concept outcome is expected in calendar year 2026.

Management described AI as an enabler for productivity, speed, and transparency, while acknowledging constraints around customer confidentiality and data security that limit how customer data can be used.

On sustainability, the presentation stated that the Bidar manufacturing sites (Unit IV and Unit VI) are operating on 100% renewable power, described as a first for an Indian CRDMO.

What management reiterated on outlook and margins

Management reiterated its stated aspirations of 15% to 20% revenue growth over a three-year period and maintaining EBITDA margins in the 28% to 30% range over the next 2 to 3 years. It also cautioned that new capacities and investments could create near-term operational inefficiencies, even as the company expects to remain within the stated margin band.

In the concall, management also noted that FY27 second half is expected to be stronger than the first half as investments and capacities progressively come on stream.

At the same time, the company flagged near-term external pressures. It cited geopolitical tensions in the Middle East as a source of higher input and logistics costs, and said cost recoveries from customers may not always be contemporaneous. It also stated that, from its perspective, no tariff impact had been seen so far.

Takeaways

FY26 reflected strong execution for Sai Life Sciences, with revenue growth of 29% and a significant uplift in profitability. The FY27 setup is defined by a larger capex cycle, which management says is closely tied to customer demand visibility and strategic conversations, particularly with large pharma.

The key monitorables from here are the pace of capacity commissioning, how quickly utilization ramps, and whether margins stay within the 28% to 30% band during a year of heavier investment and cost volatility. The company has provided a clear direction of travel, but the next phase will be judged by how efficiently the expanded platform converts into sustained, less lumpy growth.