Shilpa Medicare margin slips as costs outpace revenue growth
Net profit fell QoQ after a tax-rate reversal, while API revenue reached a company record and management highlighted several pipeline launches.
Filed 05 Nov 2026, 13:07 IST · Shilpa Medicare Ltd (SHILPAMED)
Key takeaways
- Consolidated revenue grew +13.60% QoQ, but expenses grew faster at +17.36%, narrowing operating margin by 2.34 percentage points to 26.91%.
- Net profit fell -21.50% QoQ even as profit before tax rose +5.59%, as the tax rate increased 26.40 percentage points from -2.89% to 23.51%.
- Operating margin remained 5.27 percentage points above the 21.64% median of 71 reported Healthcare peers.
Price around the results
Revenue growth came with faster cost growth
Consolidated revenue rose +13.60% QoQ to Rs 529.12 cr, but expenses increased +17.36% to Rs 386.72 cr. The cost gap held operating-profit growth to +4.51% and reduced operating margin by 2.34 percentage points to 26.91%. Management said the API division delivered its highest-ever quarterly revenue.
Tax reversal, not operating profit, drove the net-profit decline
Profit before tax increased +5.59% QoQ, while net profit declined -21.50%. The tax rate moved up 26.40 percentage points, from -2.89% in Q1FY27 to 23.51% this quarter, making the prior quarter's tax benefit a major comparison effect. Other income contributed 7.82% of pre-tax profit, so reported earnings also included a meaningful non-operating component.
Margin remains above the Healthcare peer median
Shilpa Medicare's 26.91% operating margin was 5.27 percentage points above the 21.64% median for the 71 Healthcare peers that had reported. Sequentially, however, margin moved down from 29.25%, marking a quarter of contraction rather than an improvement in operating leverage. There is no year-on-year comparison in the reported results.
Management points to launches and capacity additions
Management said novel FDF launches should contribute meaningfully to growth and improve business quality over time, and said it was well positioned for a stronger FY27. The company told investors that a Rotigotine Transdermal Patch launch with an EU marketing partner is planned for 2HFY27, while dedicated peptide capacity for Semaglutide is underway. It also said it had partnered with Orion to co-develop and exclusively supply a nivolumab biosimilar for Europe.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹529 cr | ₹466 cr | +13.60% |
| Other income | ₹8 cr | ₹9 cr | -10.89% |
| Expenses | ₹387 cr | ₹330 cr | +17.36% |
| Operating profit | ₹142 cr | ₹136 cr | +4.51% |
| Operating margin (%) | 26.91% | 29.25% | — |
| Interest | ₹13 cr | ₹12 cr | +4.79% |
| Depreciation | ₹34 cr | ₹35 cr | -2.59% |
| Profit before tax | ₹104 cr | ₹98 cr | +5.59% |
| Tax | ₹24 cr | ₹-3 cr | — |
| Net profit | ₹79 cr | ₹101 cr | -21.50% |
| EPS (₹) | ₹4.05 | ₹5.16 | -21.51% |
Operating margin of 26.91% compares with a Healthcare sector median of 21.64% across 71 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The API division delivered its highest-ever quarterly revenue.
Guidance & outlook
- The company expects its novel FDF launches to contribute meaningfully to growth and strengthen business quality over time.
- The company says it is well positioned to deliver a stronger FY27.
- Rotigotine Transdermal Patch launch with an EU marketing partner is planned for the second half of FY27.
Expansion
- Dedicated peptide capacity for Semaglutide is underway.
New products
- NorUDCA FDF was launched in India in the third quarter of FY26 with three large marketing partners and the company’s own label.
New initiatives
- Shilpa entered a partnership with Orion to co-develop and exclusively supply a nivolumab biosimilar for Europe.
Competition
- Aflibercept faces limited competition in India.
What to watch
- Whether operating margin moves back from 26.91% towards the Q1FY27 level of 29.25%.
- Whether expense growth of +17.36% continues to exceed revenue growth of +13.60%.
- Whether the tax rate remains near 23.51% after the prior quarter's -2.89% rate.