Q2 FY27 results analysis · November 03, 2026
Neuland Laboratories Q2 FY27 Results Analysis: PAT Plunges 47%, Margin Slips Below 25% (NEULANDLAB)
−46.7%PAT year on year, Rs. 51.62 Cr
Source: Quarterly results filing (BSE)
Quick summary
Neuland Laboratories Ltd's Q2 FY27 numbers came in soft, with revenue of Rs. 449.66 Cr (-12.56% YoY) and PAT growth of -46.70% YoY. Here's a quick read of what worked, what to watch, and what management said.
Quick Details
| Results date | November 03, 2026 |
|---|---|
| Revenue (Q2) | Rs. 449.66 Cr (-12.56% YoY) |
| PAT (Q2) | Rs. 51.62 Cr (-46.70% YoY) |
| EBITDA margin | 21.34% (-880 bps YoY) |
| EPS (Q2) | Rs. 40.24 (-46.69% YoY) |
Quarter Snapshot
Q2 FY27 was a weak quarter — revenue fell 12.56% YoY, PAT fell 46.70%, and EBITDA margin of 21.34% dropped below management's 25%+ benchmark on fixed-cost deleverage and peptide ramp costs. The H1 picture remains intact with 35.22% revenue growth, 1.81x CFO/PAT cash conversion, and a Rs.211.23 Cr net-cash balance sheet, keeping the ~20% FY27 revenue target on track but with a narrower cushion.
Q2 FY27 Expectations vs Results
| Driver | Expected before results | What happened | Verdict |
|---|---|---|---|
| Revenue YoY | "the YoY comparison remain strongly positive while the QoQ direction stays a coin-flip" | Revenue −12.56% YoY; −29.91% QoQ — YoY); the decline branch of the QoQ coin-flip played out | Contradicted |
| Margins | "likely normalizing from an exceptionally high base, not compressing" (25–30% band) | EBITDA margin 21.34% (company denominator) vs 30.14% year-ago — below the band | Contradicted |
| FX | "Modest translation tailwind" (rupee ~1.2% QoQ depreciation, per pre-call note, web-sourced) | Unrealised net forex gain Rs.3.65 Cr in H1 (cash-flow recon); USA revenue −9.36% YoY — FX not isolated in the filing | Partially |
| Input costs | "peers disclosed elevated raw-material and solvent costs" (generic headwind) | Materials −5.21% YoY on −12.56% revenue; materials ratio up ~370 bps YoY | Played out directionally |
| Peptide ramp drag | "Module 1 adding depreciation and ramp costs before meaningful revenue" | D&A +27.64% YoY; Module 1 live Sep 15 | Played out |
| Peptide conversion | "engagement-level rather than revenue-level" | Filing silent on peptide contracts/revenue | Not observable |
| Tariffs | "Net contained, watch item" | No tariff reference in the filing | Not observable |
| Watch: margin bridge; peptide conversion; WC days; new capex; 483 residuals; CMS split | watch-list | Margin 21.34% (addressed by numbers); WC improving (proxies); Rs.47.1 Cr Domadugu land capex approved; peptide contract status and CMS split not addressed in the filing — remain open for the call | Mixed |
Read our full results preview.
Management Guidance vs Delivery
| What management said | Where | What happened | Verdict |
|---|---|---|---|
| EBITDA margin 25%+ ("anything above a bonus") | management commentary on prior earnings calls (long-term benchmark) | Q2: 21.34% on the company's total-income basis (21.70% on revenue); H1: 28.94% | Missed this quarter; On Track on H1 basis |
| Revenue ~20% for FY27 & FY28; 18–20% 5-yr CAGR | Q4 FY26 and Q1 FY27 (Aug 5, 2026) earnings calls | H1 +35.22% YoY (Q2 alone −12.56%) — H1 basis | On Track |
| ≥1 commercial peptide NCE arrangement in FY27 | Q4 FY26 call; reaffirmed on the Aug 5, 2026 call | No contract disclosure in this filing | Too Early |
| Peptide Module 1 operational (July 2026, later "within a month" of Aug 5) | Q4 FY26 call; Aug 5, 2026 call | Declared operational Sep 15, 2026 ($30 Mn, 7,000 L) — with ~2-month slippage vs July | Met |
| Working-capital normalization from 137 days | Q4 FY26 call | Receivables −45.64% vs March; DSO proxy 58.9 days — proxy evidence; KPI value not re-disclosed | On Track |
| Unit 1 +18 KL within 6–7 months of Aug 5, 2026 | company disclosure of Aug 5, 2026 | Not addressable in this filing | Too Early |
Key Investment Insights
Key Positives
- H1 FY27 revenue grew 35.22% YoY to Rs.1,091.23 Cr, above the ~20% FY27 growth aspiration
- H1 PAT grew 79.95% YoY to Rs.199.30 Cr
- H1 EBITDA margin of 28.94% remains above management's 25%+ benchmark
- H1 CFO of Rs.361.56 Cr was 1.81x PAT vs an outflow of Rs.36.75 Cr in H1 FY26
- FCF of +Rs.100.96 Cr in H1 despite Rs.260.60 Cr capex; net cash position of Rs.211.23 Cr
- Trade receivables fell 45.64% vs March; DSO proxy improved to 58.9 days
- Peptide Module 1 ($30 Mn, 7,000 L) declared operational Sep 15, 2026; Unit 3 EIR issued Oct 14, 2026
- Europe revenue grew 23.19% YoY in Q2 and 96.06% YoY in H1
Risk Factors
- Q2 revenue declined 12.56% YoY and 29.91% QoQ to Rs.449.66 Cr
- Q2 PAT fell 46.70% YoY to Rs.51.62 Cr; EPS fell to Rs.40.24 from Rs.75.49
- Q2 EBITDA margin of 21.34% is below management's 25%+ benchmark, down ~880 bps YoY
- India revenue fell 54.54% YoY with no explanation in the filing
- Employee costs (+26.61% YoY), manufacturing expenses (+25.78% YoY) and D&A (+27.64% YoY) outgrew revenue
- Peptide ramp costs and depreciation are landing before associated revenue; ROCE dip during heavy capital deployment
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