Sudeep Pharma expands margin as revenue growth outpaces costs
Consolidated operating margin rose 2.54 percentage points QoQ, while management highlighted customer approvals and capacity additions ahead.
Filed 28 Oct 2026, 19:14 IST · after market close · Sudeep Pharma Ltd (SUDEEPPHRM)
Key takeaways
- Consolidated revenue grew 24.28% QoQ, faster than expenses at 19.45%, lifting operating margin by 2.54 percentage points.
- Net profit rose 27.64% QoQ to Rs 51.81 cr even as the tax rate increased by 1.82 percentage points.
- Sudeep Pharma's 37.23% operating margin was 15.21 percentage points above the 22.02% median for 19 reported Healthcare peers.
Price around the results
Revenue growth outpaced expense growth in Q2FY27
Consolidated revenue increased 24.28% QoQ to Rs 196.7 cr, while expenses grew 19.45%, driving a 33.38% increase in operating profit. Management said AbsorBis sustained its growth momentum through new customer additions and progress in customer approvals. It also said NSS had secured approvals from 5 customers and had a pipeline of approximately 12 projects.
Higher operating leverage outweighed rising finance costs
Operating margin widened by 2.54 percentage points to 37.23% because revenue grew faster than expenses. Interest expense rose 36.41% and depreciation increased 34.5% QoQ, but these increases did not prevent profit before tax from rising 30.83%. Other income contributed 8.42% of pre-tax profit, while the 1.82-percentage-point increase in the tax rate moderated net-profit growth to 27.64%.
Margin stands well above the Healthcare peer median
Sudeep Pharma's 37.23% operating margin was 15.21 percentage points above the 22.02% median for 19 Healthcare companies that had reported the same quarter. The available trend shows margin improving from 34.69% in Q1FY27 to 37.23% in Q2FY27, but does not establish a longer multi-quarter direction. The consolidated results were filed after market close on 28 October 2026.
Management pointed to new capacity and customer validation
Management said commercial supplies from the Nandesari facility are expected to begin in H2 FY27 after customer qualification, while customer validation remains in progress for the 51,200 MT annual-capacity greenfield facility. The company said Dahej Phase 1, a 25,000 MTPA battery-grade iron phosphate facility, is targeted for completion by March 2027. Management also said it is evaluating an additional 100,000 MTPA of battery-grade iron phosphate capacity and remains focused on cost efficiencies and working-capital discipline.
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 | ₹197 cr | ₹158 cr | +24.28% |
| Other income | ₹6 cr | ₹5 cr | +9.72% |
| Expenses | ₹123 cr | ₹103 cr | +19.45% |
| Operating profit | ₹73 cr | ₹55 cr | +33.38% |
| Operating margin (%) | 37.23% | 34.69% | — |
| Interest | ₹3 cr | ₹2 cr | +36.41% |
| Depreciation | ₹5 cr | ₹4 cr | +34.50% |
| Profit before tax | ₹71 cr | ₹54 cr | +30.83% |
| Tax | ₹19 cr | ₹14 cr | +40.19% |
| Net profit | ₹52 cr | ₹41 cr | +27.64% |
| EPS (₹) | ₹4.59 | ₹3.59 | +27.86% |
Operating margin of 37.23% compares with a Healthcare sector median of 22.02% across 19 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
- AbsorBis sustained its growth momentum through new customer additions and progress in customer approvals.
- NSS secured approvals from five customers and had a pipeline of approximately 12 projects.
Guidance & outlook
- Commercial supplies from the Nandesari facility are expected to commence in H2 FY27 after customer qualification.
- Dahej Phase 1 capacity of 25,000 MTPA is targeted for completion by March 2027.
- NSS is focusing on improving its growth trajectory in FY28.
- Multiple binding offtake agreements are targeted to be signed by Q4 FY27.
Expansion
- The new Nandesari greenfield facility has annual capacity of 51,200 MT and total capex of approximately INR 168 crore.
- The Dahej Phase 1 battery-grade iron phosphate facility has capacity of 25,000 MTPA and is targeted for completion by March 2027.
- The company is evaluating an additional 100,000 MTPA of capacity for battery-grade iron phosphate.
- Existing pharma iron phosphate capacity has been upgraded to produce 5,000 MT of battery-grade material.
New initiatives
- The company plans to integrate recently acquired entities and continue evaluating inorganic growth opportunities.
- The company is focusing on operational excellence, cost efficiencies and improved working capital discipline.
- Customer validation is in progress for the new Nandesari greenfield facility after internal validation was completed.
Competition
- The company describes itself as an emerging reliable non-Chinese supplier for battery-grade iron phosphate PCAM.
Problems & risks
- The company reported global uncertainties and elevated logistics costs during the quarter.
What to watch
- Whether operating margin holds above 37.23% in the next quarter.
- Whether commercial supplies from Nandesari begin in H2 FY27 after customer qualification.
- Progress toward the 25,000 MTPA Dahej Phase 1 completion target by March 2027.