Medicamen Biotech FY26: Oncology Gamble and the ₹79 Crore Question
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1 — At a Glance
Revenue crossed ₹198 Cr in FY26, a jump of 22% from FY25’s ₹163 Cr. Net profit landed at ₹9.64 Cr, up 36% from ₹7.11 Cr. The company raised ₹79.4 Cr via preferential issue at ₹530/share, a 58% premium to April 2025’s price, earmarked for African expansion and U.S. oncology push.
Working capital is a drag: debtors at 151 days, inventory at 251 days, cash conversion cycle at 259 days. None of this improved post-fundraise.
Medicamen Biotech (established 1993) makes generic and oncology formulations; 40.5% owned by Shivalik Rasayan. It operates plants in Bhiwadi (Rajasthan) and Haridwar (Uttarakhand), exporting 77% of output to 40+ countries—mostly Africa.
FY26 brought two signals: momentum (₹198 Cr revenue, first U.S. FDA approval for Bortezomib injection, EU GMP on Bhiwadi, a 10-year U.S. manufacturing pact) and stress (₹33 Cr cash burn in operations vs. ₹8.16 Cr in FY25, stock down 45% in one year).
The core tension: Does growth in revenue and approvals convert to sustainable cash generation, or does it burn capital faster?
3 — Business Model: WTF Do They Even Do?
Medicamen manufactures injectable and oral generics—antibiotics, endocrines, oncology drugs. Revenue split is 77% exports (Africa ~70%), 23% domestic. The model resembles CDMO: bulk drug manufacturing to customer specification, then institutional wholesale to hospitals, governments, NGOs.
Product mix spans 24 SKUs across antibiotics, cardiovascular, diabetes, and oncology (74 SKUs registered in oncology alone). Oncology is nascent (commercial production started mid-FY25); Africa is mature but slow-paying.
The two manufacturing plants differ: Bhiwadi holds EU GMP certification; Haridwar is U.S. FDA-approved for sterile injectables. Neither runs at full tilt. A 10-year manufacturing pact with a U.S. distributor (Feb 2025) adds fixed-volume, cost-plus revenue—lower margin, less volatile.
4 — Financials Overview
Figures are consolidated, in ₹ crore.
Metric
FY26
FY25
YoY
Revenue
197.77
162.55
+21.7%
EBITDA
20.20
14.91
+35.5%
PAT
9.64
7.11
+35.6%
EPS (annualised)
7.11
5.59
+27.2%
Revenue jumped ₹35 Cr. EBITDA rose ₹5.3 Cr, pushing the margin to 10.2% from 9.2%. Net profit climbed 36% to ₹9.64 Cr.
Q4 FY26 (Jan–Mar) was the kicker: ₹60.65 Cr sales (best quarter ever), ₹5.43 Cr operating profit, ₹3.86 Cr net profit. Full-year benefited from late-cycle catch-up after regulatory delays in Ethiopia pushed ₹11–12 Cr of orders into FY26.
Tax rate swung from 27% (FY25) to 18% (FY26), an 900-basis-point drop. Management flagged this as lumpy across quarters; don’t extrapolate.
5 — Market Expectations & Historical Multiples
This section describes how the market is currently pricing the company and how that compares with its own history and peer group. It is descriptive, not predictive.
Metric
Current
5-Yr Avg
Peer Median
P/E
31.6x
~26x
32.1x
EV/EBITDA
14.1x
~15x
14x
P/B
1.10x
~1.05x
1.2x
ROE
3.95%
4.23%
~15%
ROCE
5.43%
~8%
~15%
The market prices Medicamen at 31.6x earnings—exactly on the 158-company pharma median (32.1x). This is parity, not a discount. The risk gap sits in returns: Medicamen’s ROE (3.95%) and ROCE (5.43%) are in the peer’s lower quartile. Peers command this multiple because they compound equity and capital at 15–30% ROCE; Medicamen compounds at 4–5% ROCE, below the cost of capital (8–10% blended rate).
