ERIS Lifesciences Q4 FY26 Earnings Call: Semaglutide Hit #1 by Volume, Insulin Share Surges to 24%

ERIS Lifesciences Ltd held its Q4 FY26 earnings call on May 20, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Headline Financial Performance

• Rs.3,129 Cr consolidated revenuefor FY 2025-2026, up8% YoY; domestic business (DVF) contributedRs.2,778 Cr(+11% YoY).
• Consolidated EBITDA of Rs.1,120 Cr(+10% YoY); excluding discontinued trade generics and low-margin DPF injectables, core EBITDA stood atRs.1,146 Cr(+13% YoY, margin 37.5%).
• DVF EBITDA margin expanded to 37%in FY26 (from 36.5% in FY25), with absolute DVF EBITDA ofRs.1,026 Cr(+12% YoY).
• PAT from continuing operations at Rs.498 Crfor FY26 (+34% YoY), earnings per share ofRs.36; reported PAT including a one-off Rs.150 Cr deferred tax adjustment wasRs.648 Cr.
• Net debt of Rs.2,255 Cr(2x EBITDA) at FY26 close, down two turns over two years; finance cost declined17% YoY.
• Operating cash flow to EBITDA ratio of ~50% in FY26 (vs 105% in FY25) — working capital build for growth initiatives and inventory stocking.

Sunday Launch, Pricing & Patient Uptake

• #1 by volume, #2 by valuein injectable semaglutide for April 2026 (IQVIA); market share by units reached22%, by value13%, and prescription share22%in May 2026.
• Pricing at Rs.1,290/vial and Rs.3,200/pen(2 mg & 4 mg SKUs) — management noted the product was priced ~30% lower than most peers (vs Rs.4,200 for a 2 mg pen), with further price correction expected during FY 2026-2027 before stabilization.
• Pen in-sourcing phase-one capacity of 5 million units/annumexpected from Q2 FY27, improving gross margins; split of current prescriptions is60% vials, 40% pens.
• April FY27 secondary sales of Rs.4 Crfor semaglutide; management expects ~20% sequential growth in May; industry-wide monthly semaglutide market estimated at ~Rs.30 Cr in April.
• Management expects 1 to 1.5 million patientson semaglutide within the first year (FY 2026-2027), a small fraction of the total diabetes population; early prescriptions show90% of diabetic patients prescribed semaglutide have BMI >30.
• Biosimilar semaglutide first engineering batchtaken at Bhopal ~15 days before the call, followed by a PV batch; two more batches (degludec plain and degludec lira) scheduled for end-May 2026.

Market Share Gains & Manufacturing Build-out

• Insulin market share in RHI cartridges rose from 13% to 24%in FY26; overall insulin (RHI + Glargine) share moved from 12% to 16%, growing32%vs covered market growth of 6.7%.
• Bhopal cartridge line expected online in H2 FY27to support further share ramp; total drug substance capacity investment stands atRs.150–180 Cr, with further capex in peak picks.
• Aspart insulin launch delayed to FY27due to non-quality/regulatory concerns from external supply; management expects the product to launch during FY 2026-2027.
• Biotech platform: four commercialized productsand four products in phase 1 or phase 3 trials; romiplostim is in development, and teriparatide has received approval for phase 3 trial initiation.
• April 2026 IQVIA datashowed combined insulin and GLP growth of35%, confirming strong momentum in the metabolic franchise.

Supply Chain Disruption & Regulatory Remediation

• International revenue of Rs.348 Cr in FY26(+7% YoY), missing Q4 plan of Rs.115 Cr (actual Rs.86 Cr) due to supply chain disruptions; FY26 EBITDA margin held at32%.
• FY27 international revenue guidance: 18–20% growthfrom existing business only; the previously penciled EU CDMO contribution ofRs.120–140 Cris postponed — the product remains in short supply, and the business is not lost.
• EU GMP inspection observations are procedural(e.g., operator behavior, RM dispensing pass boxes) — no QA/QC or data integrity issues; remediation via training and minor hardware,no capex or line shutdowns required, all lines operating.
• Long-term EU CDMO opportunity of Rs.800–Rs.1,000 Crremains unaffected; only timeline impact is for one product scheduled to go commercial in Q1 FY26-27, now delayed pending facility re-approval.
• Geographical mix stable in FY26:30% Africa, 30% Asia, 25% LatAm, rest dispersed; management expects LatAm to grow faster in FY27 on new product approvals.
• Supply chain disruption of Q4 FY26 not expected at similar magnitude in H1 FY27— April FY27 already showed improvement over March FY26.

Capital Efficiency & Financial Guidance

• FY27 DVF EBITDA margin guidance maintained at 37%standalone and 36% consolidated (similar to FY26); management noted H1 margins will be softer due to launch costs and raw material drag, with H2 improvement from Bhopal insourcing and semaglutide volumes.
• Accounting ROCE of 15% for FY26; adjusted ROCE (excluding M&A amortization) at20%; management guided accounting ROCE to improve to23–25% by FY28, driven by recent strategic capital investments.
• Effective tax rate (book) of 22% in FY26(down 140 bps from FY25); guided at ~21% for FY27.
• Capex of ~Rs.300 Cr in FY26, directed at biologics and sterile injectables; the Bhopal fill-finish site has been delayed by ~1–1.5 years; a new parenteral plant will commission in April FY27, doubling existing capacities.
• Management cited 35% EPS growth in FY26on 10% EBITDA growth as evidence of operating and financial leverage from past acquisitions.
• FY27 DVF revenue growth guided at 1.3x covered market(expected to remain double-digit); semaglutide adds separately, with consensus-level top-line growth at mid-teens plus.

Therapy Mix, Working Capital & Competitive Dynamics

• Domestic formulations grew 12% in FY26, but ex-insulin business grew only 8–9% — the OAD (oral anti-diabetic) therapy segment was the primary drag at2–3% growth, impacted by a Rs.30 Cr DPC band in April 2025.
• Derma segment grew 14.2%vs covered market 8.6% in FY26, with EBITDA margin above the DVF average; insulin, cardiology, and dermatology all outperformed the portfolio.
• Management expects OAD to rebound in FY27, with April–May trends already supportive; the absolute semaglutide patient universe (~1.5 million expected by end-FY27) is too small vs the total diabetes population to cause near-term OAD class downturn.
• Trade receivables rose from Rs.458 Cr (FY25) to Rs.680 Cr (FY26)driven by delayed international collections amid FX volatility; debtor days targeted to return to ~60 days within two quarters (by Q2 FY27).
• Inventory build was a conscious decision:~9 months of RM/PM stock in domestic (API price hikes) and finished goods in international (shipment delays); international debtors have already reduced 25% in early FY27 with no bad-debt risk perceived.
• Management expects the semi-generic market to remain a 5–6 player gamefor FY 2026-2027, with top players holding 65–75% market share and the leader at 13–15%, contrary to fears of fragmentation.