Bajaj Healthcare Ltd Q1 FY27 Earnings Call Summary

Event Participants

Executives

3
Anil Jain (Managing Director), Prachi Ambre (Investor Relations), Rohan Parekh (Chief Financial Officer)

Analysts

10
Arnav Sakhuja (Ambit Capital), Madhur Rathi (Counter Cyclical Investments), Nirali Shah (Ashika Investment Managers), Nishant Sahu (Green Portfolio), Parth Sodha (Trinetra Asset Managers), Praneet (SJ Investment), Rudraksh Raheja (iThought Financial), Sajal Kapur (Antifragile Thinking), Shantanu Basu (Smiths Ltd), Yogesh (Hightown Securities)

Financials & KPIs

Geographic & Segment Commentary

• Domestic API: Revenues grew 27% YoY to ₹92.3 crores, the quarter's key growth driver, with stable pricing and volume-led momentum. Ascorbic acid and its salts remain the lead product contributing ~8–10% of revenue. Backward integration on 8–10 molecules representing 20–25% of revenue is expected to yield 1–2% margin improvement.

• Exports: Contributed ₹50.1 crores (18–20% of total mix); Magnesium L-Threonate (Magtein) is the largest export product, sold to the U.S. innovator at ~350 metric tons in FY26 (10% of total revenue). Management expects export mix to rise to 30–35% as six CP approvals in UK/EU convert to revenue from FY28 end.

• Formulations: Contributed ₹23.3 crores; shifting mix toward high-margin branded and specialized products. Key wins: first-in-India SEC recommendation for cenobamate tablets (₹10–12 crores FY27 revenue potential with 8 CDMO partners), Bajaj Oncocare platform with 15+ brands across 23 states and 3 UTs, and institutional supply contracts with Indian Railways, Defence, ESIC, and Jan Aushadhi.

Company-Specific & Strategic Commentary

• Peptide Expansion: Dedicated 250 kgs/yr peptide facility targeted for commissioning by Q4 FY27; semaglutide will be the first product, initially for the Indian market, though the plant is designed for global compliance. Peak utilization expected to generate ₹200–300 crores revenue at 18–20% EBITDA margins; 6–7 peptide molecules under development.

• Oncology API Facility: Dedicated manufacturing facility targeted for commercialization by Q4 FY28; four molecules developed with two scaled to pilot level and six more under development.

• CNS First-Mover Regulatory Wins: Became the first Indian company to secure SEC recommendation for manufacturing cenobamate tablets; Suvorexant BE studies completed with regulatory approvals in process, commercialization planned post patent expiry in Q4 next year.

• Bajaj Oncocare Platform: Launched 2024 as a direct-to-patient oncology division with 15+ brands across 23 states and 3 union territories; first-in-India launch of posaconazole 300 mg tablet for treatment adherence.

• Genrx Acquisition: Nashik manufacturing facility under NCLT approval; commercial production expected H2 2027, enhancing solid dosage form capacity for formulation and oncology businesses.

• Backward Integration: MOU with Institute of Chemical Technology (ICT) for patented fermentation route for vitamin C (8–9% of revenue), targeted completion 2029; reduces China dependency and supports 1–2% margin lift across 8–10 molecules.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

FY27 Growth Guidance

• Question: What is the revenue and profitability guidance for FY27? (Arnav Sakhuja, Ambit Capital)
• Answer: Revenue growth of 10–15% guided for FY27 with similar profit growth trajectory; management also expects similar growth rates for FY28. Long-term target of ₹900–1,000 crores revenue in 2–3 years, driven by peptides, new product development, and mix shift. (Anil Jain)

API Pricing Environment

• Question: Has domestic API growth been price- or volume-led this quarter? (Arnav Sakhuja, Ambit Capital)
• Answer: Prices were stable relative to last quarter; growth is volume-driven. The trajectory depends on crude oil prices and geopolitical developments. (Anil Jain)

Peptide Facility & Semaglutide

• Question: Which peptide molecules are under development, and when will commercialization happen? (Yogesh, Hightown Securities; Nishant Sahu, Green Portfolio)
• Answer: 6–7 molecules in development including semaglutide (first product, for Indian market initially, though plant is designed for global market). Plant commercializes Q4 FY27 with revenues from FY28; peak utilization revenue estimated at ₹200–300 crores at 18–20% EBITDA margin. Semaglutide current market price is $120–150/gram. (Anil Jain)

Capex & Capital Allocation

• Question: What is the capital allocation policy over the next 2–3 years? (Yogesh, Hightown Securities)
• Answer: Annual capex of ₹40–50 crores planned each year; no further acquisitions until Genrx acquisition is fully commercialized. CFO cited three priorities: realigning finance costs, working capital allocation, and cost optimization across plants including discontinued units. (Anil Jain; Rohan Parekh)

Cenobamate Commercial Opportunity

• Question: Beyond the regulatory milestone, what is the commercial opportunity for cenobamate? (Nirali Shah, Ashika Investment Managers)
• Answer: Awaiting DCGI NOC and state license for commercialization; eight Indian marketing partners already tied up (CDMO model). Expected FY27 revenue of ₹10–12 crores. (Anil Jain)

Working Capital & Receivables

• Question: What are current receivable days and scope for further reduction? (Shantanu Basu, Smiths Ltd)
• Answer: Receivable days improved from 145 days to 131 days in Q1 FY27; targeting under 110–120 days going forward. Inventory build-up was a deliberate policy response to the war situation to secure production for coming quarters. (Rohan Parekh)

Export/CDMO Commercialization

• Question: What is the progress on UK/EU CDMO clients and when will revenue start? (Shantanu Basu, Smiths Ltd)
• Answer: Six CP approvals received in the last 6–8 months; customer validation requires 1–1.5 years post-approval (batch, stability, commercialization). First revenue expected from FY28 end; volumes committed but pricing will depend on prevailing market conditions. (Anil Jain)

Backward Integration & Vitamin C

• Question: What percentage of revenue is covered by backward integration, and what margin impact is expected? (Madhur Rathi, Counter Cyclical Investments)
• Answer: 8–10 molecules representing 20–25% of revenue; marginal 1–2% margin improvement expected. MOU with ICT for patented fermentation route for vitamin C (8–9% of revenue) is a long-duration project with completion expected in 2029. (Anil Jain)

Key Takeaway

Bajaj Healthcare delivered a steady Q1 FY27 with revenue of ₹165.6 crores (+11.3% YoY) and EBITDA margin of 17.8%, up 70 bps YoY, led by 27% YoY growth in domestic API to ₹92.3 crores. Management guided to 10–15% revenue growth for FY27, toward an 18–20% EBITDA margin band, and a 2–3 year revenue target of ₹900–1,000 crores driven by the 250 kgs/yr peptide facility (semaglutide first product, Q4 FY27 commissioning), first-in-India cenobamate SEC approval (₹10–12 crores FY27 revenue), and six UK/EU CP approvals converting by FY28 end. Balance sheet deleveraging continued with debt-to-equity at 0.45x and receivable days at 131, targeting under 110–120 days. Watch points include geopolitical impacts on API pricing, regulatory/patent timelines for CNS launches, NCLT approval for the Genrx acquisition, and ramp of peptide and oncology capacity.