Glenmark Pharmaceuticals Ltd Q2 FY27 Earnings Call: Core Revenue Grows 20%, Targets Zero Debt By FY27

Broad-Based Growth With Front-Loaded Investment Costs

• Q2 FY27 consolidated revenue of Rs.42,473 million — like-for-like YoY growth of ~20%; H1 FY27 revenue at Rs.82,658 million with ~18% like-for-like YoY growth.
• Core business (ex-IGI and prior-year one-offs) grew 20% YoY with a 21% EBITDA margin in Q2 FY 2026-2027, despite cost pressure across the value chain from geopolitical volatility.
• Adjusted PAT of Rs.485 Cr (11.4% margin) — excludes an exceptional item recognized and fully provided for in Q2 FY 2026-2027.
• Q2 R&D spend of Rs.344.9 crores (IGI R&D ~Rs.187 crores); Q2 total capex of Rs.262.1 crores (tangible ~Rs.170 crores, intangible ~Rs.92 crores).
• Net working capital of 110-115 days as of September 2026, in line with the company's guidance for FY27.
• Excluding IGI and innovation businesses, H1 FY 2026-2027 operating margin was 21% — the innovation build-out weighed on reported H1 margins.

India Outpaces IPM; Consumer Care Accelerates

• India formulations sales of Rs.13,274 million in Q2 FY27 — ~14% like-for-like YoY growth (~15% in H1 FY27).
• Secondary sales grew 16.7% in Q2 FY27 per IQVIA vs IPM growth of 13.8% (MAT September 2026: 15.7% vs IPM 12.1%); Glenmark ranked #13 with 2.4% market share (IQVIA MAT September 2026).
• 11 brands in IPM top 300; #2 in dermatology, #3 in respiratory, #4 in cardiac; entered top 10 in oncology per Ipsos MAT June 2026.
• Partnered oncology brands Tevimbra and Brukinsa (launched Q1 FY26) continue strong sales; NepSmart GFB / Glenmark Care's FB Smartules launched in Q3 FY26 — world's-first nebulized fixed-dose triple therapy for COPD — with strong traction since launch.
• Glenmark Consumer Care primary sales of Rs.1,252 million, +46.5% YoY in Q2 FY27, driven by Candid, La Shield, Scalp, Bontress and Episoft.

Respiratory-Led Momentum; Monroe Injectables Building

• North America revenue of Rs.12,089 million in Q2 FY27 — net of ISB 2001 deferred outlicensing income recognition, core business grew ~31% YoY in Q2 FY27 and ~25% in H1 FY27.
• 4 products launched in Q2 FY27 (Sugammadex injection, fluticasone nasal spray RX, nintedanib capsules); Flovent generic (fluticasone propionate inhalation aerosol 44mcg) granted CGT designation with 180 days exclusivity upon commercialization.
• Flovent 44 holds ~22% market share per IQVIA in H1 FY 2026-2027 with Glenmark the sole generic on market — a position management expects to hold "for a while"; Axitinib launches in Q3 FY 2026-2027 as a key driver.
• Flovent 110 and Ipratropium slated for launch toward end of FY 2026-2027; one or two additional filings anticipated in FY 2026-2027, with launches from those filings expected in FY 2027-2028.
• Monroe injectable facility received USFDA EIR with VAI classification (Goa plant also received USFDA EIR with VAI in Q2 FY27); management's hope is at least 3-4 products commercial from Monroe in FY 2027-2028, one or two of which could be quite substantial.
• US growth over the next 3-5 years expected from a couple of large respiratory launches every year, Monroe injectables, and Ryaltris over the next 4-5 years; an iron sucrose complex US launch was referenced for FY 2027-2028.
• Glenmark USA agreed to settle consolidated antitrust/consumer protection class actions (Eastern District of Pennsylvania) with Humana for $15.3 million including interest, payable in two installments, with no admission of liability; bulk of large legal settlements is behind the company, with only small residual provisions anticipated.

EM Growth Strong; Ryaltris Scaling Globally

• Emerging markets revenue of Rs.8,769 million, +33.2% YoY in Q2 FY27 (vs Rs.6,585 million); Glenmark ranked #6 among dermatology companies in Russia (IQVIA MAT September 2026); Ryaltris launched in Brazil in Q2 FY27.
• Europe revenue of Rs.7,920 million, +6.2% YoY (vs Rs.7,460 million); strong Western European momentum partly offset by softer demand in parts of CEE; generics anticipated to grow low single digit over the next few years.
• Ryaltris sales expected at ~$130-140 million in FY 2026-2027, growing ~30-40% (closer to 40%); H1 FY 2026-2027 royalty growth was more than 40% YoY per Anurag Mantri; >20% market share in almost 10-15 markets within a ~$3.5 billion global steroidal nasal spray market.
• Ryaltris commercialized in 58 markets with marketing applications submitted in 90+ countries as of September 2026; launches in additional 10 markets expected over the next few quarters; management expects 30-40% global growth over the next 3-4 years (through FY 2030-2031).
• EM growth guidance of a minimum 15-20% consistently over the next few years (FY 2027-2028 onward), driven by oncology launches alongside Ryaltris momentum; management expects emerging markets to be "very substantial" over the next 5 years (through FY 2031-2032).
• Winlevi (partnered with Cosmo) achieved formulary status covering 40% of the UK market; launched in Nordics, Eastern Europe and Spain in Q1 (FY unspecified); under regulatory review in South Africa.

ISB 2001 Advances With AbbVie; Oncology Scaling From FY28

• ISB 2001: 170+ subjects dosed in the Trignite Phase 1 study (42 in dose escalation, 130+ in dose expansion), with safety/efficacy data consistent with ASCO 2025; updated Phase 1 data accepted for oral presentation at ASH 2026 — data under embargo, nothing shareable beforehand.
• AbbVie, which now runs ISB 2001 development with full control, has initiated a Phase 1-2 trial combining ISB 2001 with CELMoDs (mezigdomide and abradomide), visible on clinicaltrials.gov; Glenmark retains all rights to India and emerging markets outside AbbVie's licensed territories, with no new licensing plans signaled for remaining territories.
• Oncology franchise (excluding ISB 2001) estimated at $100-150 million by FY30 and peak sales of ~$400-500 million in the FY35-36 timeframe; ~$30-40 million guided for FY 2027-2028 as specialty products begin scaling up.
• Kinehyo (envafolimab, partnered with Jiangsu Alphamab): MAs filed in 24 countries as of September 2026; first regulatory approval received in the Dominican Republic in September 2026; early access/named-patient programs initiated in 9 markets; multi-center Phase 3 initiated in neoadjuvant and/or adjuvant NSCLC.
• Aumolertinib (partnered with Hansoh): MAs submitted in 13 markets as of September 2026, with first commercial launch anticipated in H2 FY27; trastuzumab rezetecan (partnered with Hengrui) MAs submitted in 2 markets, with a Phase 3 in platinum-resistant ovarian cancer initiated in India in June 2026.
• IGI intends to submit an IND for ISB 2301 (first-in-class multispecific immune cell activator targeting solid tumors) by end of CY2026; ISB 2302 and ISB 2501 in early preclinical development; Almirall reported in its H1 2026 results that the Phase 2 study of ISB 880/LAD191 in HS is expected to read out in 2027; BioCryst will return full licensing rights for ISB 830/STAR 310 to IGI effective November 4, 2026, with IGI evaluating strategic pathways including potential partnerships.
• IGI is well funded with capital sitting till FY28 and beyond from the proceeds; decisions on funding allocation to ICMOS and innovation were made "a year or two ago" and are done.

Deleveraging on Track; H2 Cash Recovery Guided

• Net cash of Rs.424 Cr as of September 2026 (gross debt Rs.866.5 crore, cash ~Rs.1,290 crore per CFO Anurag Mantri) — slightly below the analyst's ~Rs.430 crore estimate; gross debt increase reflects field-force expansion funding and legal settlement payments front-loaded in H1 FY 2026-2027.
• H1 FY 2026-2027 operating cash generation was negative despite ~Rs.1,650 crore of H1 EBITDA (cited by the analyst), driven by front-loaded field-force opex, ~Rs.520 crore of litigation settlement payments, ~Rs.367 crore of capex, plus interest, dividend and working-capital outflows.
• Management expects Rs.700-800 crore of cash generation in H2 FY 2026-2027, expected to repay the entire debt and leave ~Rs.1,200 crore of net cash by end of FY 2026-2027 (vs ~Rs.400 crore of cash at the time of the call); gross debt expected to be zero by end of FY27 as operating leverage kicks in from H2 FY27.
• ~1,100 people added across India, emerging markets and oncology in H1 FY 2026-2027; margin trajectory to improve from H2 FY 2026-2027 as these investments begin yielding, with the company targeting a year-on-year percentage improvement in margins as guided earlier (magnitude not quantified).
• Oncology products launching in FY 2027-2028 will earn EBITDA "well ahead of the company average" at approximately 30-40% at the net level in FY 2027-2028 per Glen Saldanha, who declined to quantify gross/operating margin deltas; oncology franchise expected to contribute ~$30-40 million of sales in FY 2027-2028, helping overall margins from FY28.
• Management flagged "probably" investing some amount in the Ryaltris US build-up in FY 2027-2028, referencing Glen Saldanha's earlier remark; no specific 2-3 year EBITDA-to-operating-cash conversion ratio was given, framed as dependent on capital allocation between growth opex and capex.
• Management is confident of a strong H2 FY 2026-2027 driven by operating leverage, with stated priorities of accelerating core growth, scaling specialty and branded portfolios, and advancing the innovative pipeline.