1. Opening Hook
Monsoons refused to leave, but Indoco’s dark clouds finally did. After a bruising year of plant shutdowns and FDA heartburn, the company seems to have rediscovered its prescription for recovery. Anti-infectives are selling, USFDA auditors are (finally) replying, and the CFO sounds cautiously optimistic for once. But as always, in pharma, “no news” from the regulator is stillnews.The turnaround story has started—but as with antibiotics, you need a full course before declaring victory. Stick around; it gets juicier with FDA whispers, debt confessions, and an OTC toothpaste revolution.
2. At a Glance
- Revenue up 9.6%:India sneezed, Indoco sold antibiotics.
- EBITDA margin 9.1%:Margins took a placebo; recovery’s still in clinical trial.
- Domestic biz +11%:Prescriptions grew faster than the monsoon.
- API biz +43%:Molecules multiplied faster than excuses for FDA delays.
- Stock flat:Market waiting for FDA clearance like a nervous parent outside an exam hall.
- Debt up:CFO says “no new capex,” which usually means “we just finished a big one.”
3. Management’s Key Commentary
“Q2 FY26 is the first quarter showing an uptick in performance.”(Translation: We finally stopped bleeding. Bring out the bandages.)😏
“U.S. FDA completed inspection at Patalganga with 0 observations.”(For once, zero means hero.)
“Europe business will see double-digit growth; we’ll wait and surprise you on margins.”(Ah yes, corporate equivalent of “trust the process.”)
“Remediation costs will continue for 2 more quarters.”(FDA audits—the gift that keeps on billing.)
“We have letters from FDA acknowledging we’re ready for inspection.”(In pharma diplomacy, that’s a love letter with conditions.)
“Our OTC venture Warren Remedies will take 2 more quarters to stop bleeding.”(Translation: Toothpaste is costly when you have to advertise every brushstroke.)
“Capex plans paused; no more big spends.”(The CFO whispered this while clutching the cash flow statement.)
4. Numbers Decoded
| Metric | Q2 FY26 | Q2 FY25 | YoY Change | Commentary |
|---|---|---|---|---|
| Consolidated Revenue (₹ Mn) | 4,718 | 4,307 | +9.6% | Finally a real uptick, not just pharma inflation. |
| EBITDA (₹ Mn) | 431 | 403 | +7% | Still under treatment, but recovering. |
| EBITDA Margin | 9.1% | 9.3% | –20 bps | Margins on antibiotics need antibiotics. |
| Domestic Formulations (₹ Mn) | 2,261 | 2,346 | –3.6% | Monsoon messed with Cyclopam’s mojo. |
| International Formulations (₹ Mn) | 1,533 | 1,262 | +21% | Emerging markets finally earned the name. |
| API Revenue (₹ Mn) | 431 | 301 | +43% | Chemistry working better than marketing. |
| US Revenue (₹ Mn) | 336 | 247 | +36% | Two sterile lines, zero chill. |
| Europe Revenue (₹ Mn) | 547 | 599 | –9% | Brexit still haunting the spreadsheets. |
Bottom line:Top line healthy, bottom line pale—classic mid-recovery symptoms.
5. Analyst Questions
Q:Europe growth seems muted—what’s next?A:“Approvals just in; expect double-digit growth.”(Translation: Wait another quarter. We’re optimistic, not magicians.)
Q:Why are other expenses up?A:“USFDA remediation and ad spends.”(In Indoco, even compliance has marketing budgets.)
Q:Any sale of assets?A:“Sale and leaseback of Waluj equipment.”(When in doubt, rent your microscope.)
Q:Debt rising fast—plan?A:“No new capex, just repayments.”(Classic line before another expansion.)
6. Guidance & Outlook
Management’s new mantra: “No new plants, only new launches.” Domestic business is expected to grow in high single digits, beating IPM averages. Europe should see double-digit growth post-MMP approval. U.S.
