SMS Pharmaceuticals lifts FY27 outlook after Q2 growth

SMS Pharmaceuticals Limited expects FY27 revenue growth and EBITDA margins to exceed earlier guidance after Q2FY27 revenue increased 30% year on year to ₹316 crore and profit after tax rose 57% to ₹40 crore. The company attributed the quarter’s growth to volume gains, improved price realisation, backward integration and operating leverage.

What changed in SMS Pharmaceuticals’ Q2FY27 financial performance?

SMS Pharmaceuticals reported higher revenue, earnings before interest, tax, depreciation and amortisation (EBITDA), and profit after tax (PAT) in Q2FY27, with revenue reaching ₹316 crore from ₹242 crore in Q2FY26. EBITDA rose 40% to ₹68 crore from ₹48 crore, while the reported EBITDA margin was 21%, compared with 20% a year earlier. PAT increased to ₹40 crore from ₹25 crore and the PAT margin rose to 13% from 10%.

SMS Pharmaceuticals also increased sequentially from Q1FY27, when revenue was ₹207 crore, EBITDA was ₹41 crore and PAT was ₹20 crore. Earnings per share rose 50% year on year to ₹4.26 from ₹2.84. The presentation specifies that PAT and PAT margin exclude the share of profit or loss from an associate.

Why did SMS Pharmaceuticals raise its FY27 outlook?

SMS Pharmaceuticals said FY27 revenue growth and EBITDA margins are expected to exceed its earlier guidance, although it did not disclose a revised revenue-growth percentage, revenue figure or EBITDA-margin target. Management linked the 30% Q2FY27 revenue increase to strong volume growth and improved price realisation. It also said EBITDA margin expanded by 145 basis points year on year because of operating leverage; one basis point equals one-hundredth of a percentage point.

Gross margin, including manufacturing expenses, reached 35% in Q2FY27, which SMS Pharmaceuticals said reflected the benefits of backward integration. The company had completed six Drug Master File or Certificate of Suitability (DMF/CEP) filings in FY27 to date and said it remained on track for its full-year target of 10 filings. These filings and the margin mechanisms were disclosed alongside the higher FY27 outlook, rather than as numerical replacement guidance.

How did SMS Pharmaceuticals perform in H1FY27?

SMS Pharmaceuticals increased H1FY27 revenue by 19% year on year to ₹523 crore, while EBITDA rose 24% to ₹109 crore and PAT increased 36% to ₹60 crore. The EBITDA margin increased to 21% from 20%, and the PAT margin rose to 11% from 10%. Earnings per share increased 27% to ₹6.49 from ₹5.13 in H1FY26.

The H1FY27 result was weighted towards the second quarter rather than evenly spread across the two quarters. Q2FY27 revenue of ₹316 crore accounted for ₹316 crore of the ₹523 crore first-half total, following Q1FY27 revenue of ₹207 crore. Q2FY27 EBITDA of ₹68 crore was more than half of H1FY27 EBITDA of ₹109 crore, while Q2FY27 PAT of ₹40 crore was two-thirds of the ₹60 crore first-half figure.

What do SMS Pharmaceuticals’ sales mix and execution plans show?

SMS Pharmaceuticals’ Q2FY27 therapeutic mix was led by anti-retroviral products at 27% of revenue, followed by anti-inflammatory products at 20%, anti-diabetic products at 14% and anti-migraine products at 12%. Compared with Q2FY26, anti-retroviral share increased by one percentage point from 26%, anti-inflammatory increased by two points from 18%, and anti-diabetic declined by three points from 17%. The others category rose to 10% from 4%.

The EOU/SEZ/DE category contributed 32% of Q2FY27 revenue, North America contributed 25%, Europe 21%, India 15% and Asia excluding India 7%. Compared with Q2FY26, Europe declined from 25% to 21%, North America increased from 24% to 25%, and EOU/SEZ/DE increased from 27% to 32%. In H1FY27, EOU/SEZ/DE represented 34% of revenue, North America 28%, Europe 16%, India 14% and Asia excluding India 8%.

SMS Pharmaceuticals said its ₹280 crore capital-expenditure programme remains on track for completion by FY27. Its peptides research-and-development facility is fully operational, with pilot-scale production targeted for Q4FY27. Management anticipates initial contract research organisation (CRO) revenue from pilot-scale production in Q2FY28, so the facility was not presented as a contributor to Q2FY27 revenue.

Conclusion

SMS Pharmaceuticals’ higher FY27 outlook follows a Q2FY27 in which revenue reached ₹316 crore, EBITDA reached ₹68 crore and PAT reached ₹40 crore. The H1FY27 result, with revenue of ₹523 crore and an EBITDA margin of 21%, shows growth over the six-month period, while the second quarter supplied a larger portion of first-half sales and profit than Q1FY27.

The next disclosed markers are completion of the ₹280 crore capital-expenditure programme by FY27, delivery of the target for 10 DMF/CEP filings during FY27, pilot-scale peptides production in Q4FY27 and anticipated initial CRO revenue in Q2FY28. SMS Pharmaceuticals has not disclosed the numerical revenue-growth or EBITDA-margin levels underlying its updated FY27 outlook.