Anlon Healthcare Ltd (AHCL) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen,
Moderator: and welcome to the Q2 H1 FY '27 earnings conference call of Anlon Healthcare Limited hosted by XB4 Advisory. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Divya Shethiya from XB4 Advisory. Thank you, and over to you.
Divya Shethiya (XB4 Advisory): Thank you. Good evening, everyone, and welcome to the Q2 H1 FY '27 earnings conference call of Anlon Healthcare Limited. Today on this call, we have with us Mr. Punit Kumar Rasadia, Chairman and Managing Director of the company. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations as of today. Actual results may differ. These statements are not guarantees of future performance and may involve risks and uncertainties that are difficult to predict. A detailed safe harbor statement is given on the second page of earnings presentation of the company, which has been uploaded on the stock exchange and company's website as well. With this, I now hand over the call to Mr. Punit Kumar Rasadia for his opening remarks. Over to you, sir.
Punit Kumar Rasadia (Anlon Healthcare Ltd): Yeah. Good evening, everyone, and warm welcome to Anlon Healthcare Limited's Q2 and H1 FY '27 earnings conference call. Thank you all for joining us today. As we step into another existing phase of our journey, I would like to take a moment to express my heartfelt gratitude to all our stakeholders, investors, and partners for their continued trust and support. I hope you have had an opportunity to go through our investor presentation, which has been uploaded on the stock exchange as well as on our company's website. Let me now turn to the strategic progress during the period, which is important to understanding the transformation underway at Anlon. Anlon today operates through the parent company and five group entities spanning the pharmaceutical value chain. Epico Organic has opened an industrial and fine chemicals vertical as a new revenue stream outside pharmaceuticals, operating its own established product range. We are also planning to allocate part of its reactor capacity to backward integrated intermediates, which we expect to support profitability as this scales. Bysotic Lifescience provides ready-to-operate API capacity at a second manufacturing site, reducing the execution risk and timelines associated with greenfield capacity. Remember India, which is now Anlon Medico, marks our entry into finished dosage formulation with capabilities in tablet and capsule and access to over 30 formulation dossier, and we operate from Q3 FY '27, taking us into domestic retail and hospital markets. During the period, we have further incorporated two new subsidiaries: Anlon Biologics has been established to develop and manufacture peptides, oligonucleotides, biosimilar, and biological composition; and Anlon Medicare to manufacture surgical implants and medical devices across trauma, spine, and joints. Both have been structured separately, given the distinct manufacturing technology and regulatory pathways involved. We expect first revenue from Anlon Medicare in Q2 FY '28 and from Anlon Biologics in Q4 FY '28. In terms of contribution during the half year, Anlon Healthcare on a standalone basis accounted for 44.6% of consolidated revenue, Epico Organics for 43.7%, and Bysotic Lifescience for 11.7%. Within the Anlon standalone portfolio, API contributed 17.1% and intermediate 81.1%, with the balance from nutraceutical and other products. Taken together, our installed manufacturing capacity across the group now stand at approximately 1900 to 2000 metric ton per annum, against 400 metric ton per annum at the Anlon parent facility. Our greenfield expansion at Rajkot will add roughly 1200 metric ton per annum through eight new clean lines commissioning in Q1 FY '28, which will allow us to run eight APIs simultaneously. A further 500 metric tons per annum of expansion is planned across the group. On the regulatory side, we have 21 DMFs filed with the global authorities, and we expect 5 to 7 of these products to commercialize during FY '27. We are targeting 3 to 5 additional DMF filings this year and the launch of seven new APIs across additional therapeutic categories.
Punit Kumar Rasadia (Anlon Healthcare Ltd): three molecules for two global innovator companies. Validation quantities for the first molecule has been supplied and commercial supplies are targeted from Q3 FY27. The remaining two molecules are in validation with commercialization targeted between Q4 FY27 to Q1 FY28. I would reiterate that CDMO molecule typically takes a minimum of three to four years from development to commercial revenue, which is precisely what makes this relationship durable, durable once established. We are also progressing our Loxoprofen topical gel for the Indian market. Regulatory filings are underway with CDSO CDSCO and DCGI with approval anticipated in FY28. The product is positioned against the diclofenac-based topicals that dominate the Indian pain relief market and it takes us downstream into formulation-level value on a molecule where we are ready we already control the chemistry and the key starting material. On the industry, I will be brief. The global API and CDMO markets continue to benefit from rising outsourcing with 73% of novel drug approvals in 2025 involving outsourced API manufacturing. Supply chains are diversifying away from single-country sourcing and India remains the principal beneficiary of the China Plus One strategy supported by domestic policy on API manufacturing. What matters more is where Anlon sits within that opportunity. We are among the very few Indian manufacturers for Loxoprofen Sodium Dihydrate, Ketoprofen, Dexketoprofen Trometamol, etc., molecule with a concentrated global supplier base and high regulatory barriers to entry. We hold DMF approval from PMDA in Japan, NMPA in China and ANVISA in Brazil for Loxoprofen and CEP from EDQM in Europe for Ketoprofen. Loxoprofen is the most prescribed NSAID in Japan and we manufacture its key starting material Loxoprofen acid in-house. In this business, registration rather than price is gating factor. A new entrant must build the chemistry, file with the DMF and clear customer audits in each jurisdiction before it can even quote. That is what makes our registered supplier status durable. Before I take you through the numbers, let me revisit the margin position discussed on our last call. In Q1 FY27, our EBITDA margin had moderated to 17.8% on account of a sharp increase in raw material prices following the global geopolitical situation and consolidation of Anlon Medicos, which was then in an investment and turnaround phase. We had indicated that we were working towards stabilizing margin in the 25% to 30% range during Q2 and Q3 of FY27. I am pleased to report that we have made substantial progress on that commitment. Our EBITDA margin for Q2 FY27 recovered to 23.9%, an improvement of over 600 basis point sequentially. EBITDA for the quarter grew 61.9% quarter-on-quarter, revenue growth of 20.6%, reflecting the operating leverage now coming through as price revision flow into our contracts. We are approaching the guided range and we expect to operate within the 25% to 30% band as the remaining price revision take effect and integration benefits across the group are realized. We Let me know that take you through our performance for quarter on a consolidation basis. Revenue from operation for Q2 FY27 stood at INR 105.61 crore compared to INR 52.2 crore in Q2 FY26, a growth of 102.3%. EBITDA for the quarter stood at INR 25.24 crore against INR 13.71 crore in the corresponding quarter, a growth of 84.1%, while profit after tax stood at 17.18 crore compared to INR 9.32 crore, a growth of 84.4%. For the half year ended September 26, revenue from operations stood at INR 193.17 crore compared to INR 85.5 crore in H1 FY26, a growth of 125.9%. EBITDA for the half year was INR 40.83 crore against INR 19.95 crore, up 104.7% with margins at 21.1%. Profit after tax stood at INR 25.46 crore compared to INR 12.86 crore, a growth of 97.9%. To place this in a context, our revenue for the first half of FY27 has already exceeded our revenue for whole FY26.
Punit Kumar Rasadia (Anlon Healthcare Ltd): As I mentioned on earlier calls, given the seasonality in our business, the half-yearly trajectory is the more representative measure of underlying momentum than any single quarter. I would also draw your attention to the improvement in operating cash flow. Net cash used in operating activities H1 FY27 was INR 7.94 crore against INR 79.44 crore for the full year FY26 with the working capital outflow reducing materially. This is consistent with the commitment we made to deliver positive operating cash flow by end of FY27. To conclude, H1 FY27 has been a period of significant strategic transformation for Anlon. We have broadened the platform well beyond intermediates and APIs. And while this transformation has carried some near-term pressure on margins, we believe this initiative materially strengthen our long-term competitive position. We remain committed to executing our strategy with discipline and to take keeping all our stakeholders updated on our progress. With this, I would now like to open the floor for question and answer. So all the stakeholders can ask your question.
Moderator: Thank you, sir. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and then two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all the participants, you may press star and one to ask a question. We have the first question from the line of Nishita from Sapphire Capital. Please go ahead.
Nishita (Sapphire Capital): Yes. Hello? Am I audible?
Moderator: Yes, ma'am.
Punit Kumar Rasadia (Anlon Healthcare Ltd): Yes, yes.
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