Jagsonpal Pharmaceuticals Ltd (JAGSNPHARM) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to the Jagsonpal Pharmaceuticals Limited Q2 FY '27 Earnings Conference Call hosted by Go India Advisors. 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, 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 Ms. Saumya Chhajed from Go India Advisors. Thank you, and over to you, ma'am.
Saumya Chhajed (Go India Advisors): Good day, everyone, and welcome to Q2 and H1 FY '27 earnings con-call of Jagsonpal Pharmaceuticals Limited. We have on call with us, Mr. Manish Gupta, Managing Director; Mr. Amrut Medhekar, Chief Operating Officer; and Mr. Nirav Vora, Chief Financial Officer. Please be reminded that discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risk pertaining to the business. I now request the management to take us through the same and provide some more insight on the quarter and half-year gone by. Post that, we'll open the floor to Q&A. Thank you, and over to you, sir.
Manish Gupta (Jagsonpal Pharmaceuticals Ltd): Yeah, thank you, Saumya, and good afternoon, everyone, and thank you for joining us. If I have to describe the last six months in one statement, it'll be that this is a period of a bolder Jagsonpal.
Manish Gupta (Jagsonpal Pharmaceuticals Ltd): Not only have we scaled up our ambitions, but we are also backing it up with investments, both on organic and inorganic front, without losing sight of shareholder interests. Over the period, we have been able to accelerate our growth to knock closer to 10% on the back of strong growth in our power brands, even as we invested disproportionately in new launches, in higher growth areas, as well as organization building. We completed two acquisitions which provide us now with additional growth levers. We also take pride in the way we have been able to structure the transactions, which derisks us and retains the strength of our balance sheet for further initiatives. Our vision is to be a Rs. 500-crore organization by FY, by 2020 2028, a multichannel, asset-light, specialty pharma platform that combines strong niche brands driven by disciplined execution and value-accretive acquisitions. Over the last six months, every lever of that strategy came that acceleration is in play, be it organic momentum, inorganic scale, and financial strength. In the first six months, our organic growth has been 9.3%. While this is faster than what we did last year, it still is short of both our potential and expectations. A lot of work is going behind the scenes around the same, and we stay positive that the growth will only accelerate going forward. As mentioned earlier, the period also saw us scale investments in our people and building new capabilities in the organization as also integration of the acquisitions. While the Wellness Portfolio became part of JPL portfolio from 1st October, we fully prepared ourselves for the same in Q2 itself for an effective Day 1 integration. Our EBITDA margins in H1 were at 22.9%, up 40 bps even after this enhanced investments. The trajectory is clear. We expect quarterly revenues to cross Rs. 100 crores in Q3 and of the current year, and we are on track of Mission 500 Crores by 2 2028. With cash balance of Rs. 135 crores and a track record of successful inorganic growth, we are confident of fast tracking this journey through meaningful and accretive transactions. With that, I will now hand over to our Chief Operating Officer, Amrut, to take you through the business performance, as also progress on our acquisitions.
Amrut Medhekar (Jagsonpal Pharmaceuticals Ltd): Thank you so much. Good afternoon, everyone. And as Manish described, quarter two was a quarter that we built the engine for acceleration. I want to assure you that that engine is already responding. There are three things that I would like you to take away today: one, the organic business is performing well; two, our acquisition playbook is proven and repeatable; and third, the investments that we made in this quarter setup for a stronger quarter three. First, let let us look at the organic engine. Coming to the market performance of Indian Pharmaceutical Industry, which is IPM as per PharmaTrac, grew by around 12 percentage during this quarter of July-September '26. During the same period, Jagsonpal delivered a growth of close to around 15 percentage. For the first half of FY '27, IPM, which is Indian Pharma Market, growth stood at around 11%. In comparison to that, Jagsonpal recorded a growth of around 15%. Looking at both these periods, we have continued to outperform the IPM in both quarter, July-September, as well as first half, reflec reflecting the growth momentum across our businesses. We delivered this on an asset-light model, so growth stays agile and cash-generative. It starts with our power brands. The top 10 brands for the company constitute around 58% of our revenue. Nine of these brands rank in top five in their markets. Let's look at some of the power brands performance in quarter two. Mainstay, which is one of our large brands, grew at around 29% in quarter two against the molecule market growth of around 20%. Similarly, Metadec grew at around 14 percentage versus market of 13 percentage. Lycored grew at around 15 percentage versus the market growth of around 13 percentage. Divatrone also outperformed the market. Endoreg grew at around 20 percentage versus market degrowth. And Cruz, which is our dermatology brand, grew much higher than the market, as well as Lycroma in dermatology segment also outbeat the market. Now you can see that this growth is largely led by Gynecology, where we engage
Amrut Medhekar (Jagsonpal Pharmaceuticals Ltd): 35,000 gynecologists, which is most of the universe. Orthopedics and dermatology remain our second and third driver with prescription momentum and doctor engagement both strengthening in these segments. Second point is about inorganic playbook. We acquired Yash Pharma business in May 2024. It took us into dermatology, and it is now fully integrated into, in our platform. That is the proof of concept and that is what we are running the same playbook again. Equitas acquired in July 26 gave us an immediate entry to hospital and institutional channel. It's a very first quarter with us. We have consolidated procurement and distribution along with Jagsonpal, removed some duplicate overheads, appointed a dedicated business head, and begun rationalizing the fo- portfolio towards the profitable growth. The first value added launch is in preparation, and hopefully by end of November we'll see that. The Group Pharma wellness wellness portfolio, which is acquired this month, adds two established brands, one in hematinics and second in respiratory in six states in India, and around 10,000 additional unique doctors have been added. It is already integrated with one of our largest business. Trai- cross training of the brands medico marketing is completed. The brands will be cross sold through our existing field force and deeper penetration planned in Madhya Pradesh, Uttar Pradesh, and Karnataka, these three states. Taken together, we have moved from three strong therapy areas to four plus strong therapy areas and from no hospital presence to a meaningful institutional presence, and a doctor reach combined now reaching to around 137,000 doctors. The third is the investment behind the next leg of growth. A large part of our quarter two investment went into people. With yearly increment cycle and the new labor code aligned salary structure, we have also reduced attrition. We are building the JPL hospital team so that we can cross sell our portfolio into Equitas network, which opens institutional tenders and first prescription opportunities for us. Early results are encouraging with MR productivity already up by around 10 percentage, and our target is to go beyond the the threshold of productivity that we aspire for. Structured training and better field force stability are showing up in our doctor coverage, call quality, as well as terri- territory productivity. We have also sharpened where we put our brand money, directing into the product and therapies with the strongest growth visibility while keeping us few promising launches every quarter. Finally, to close, we now have a stronger field force, a new hospital channel, and the acquired business in integration. That is why we are confident of more resilient, consistent, and market outperforming gro- growth from quarter three onwards. I assure you that we'll see EBITDA accretive growth in quarter three. I now request Nirav, our CFO, to take you through the financials for the quarter. Thank you so much.
Nirav Vora (Jagsonpal Pharmaceuticals Ltd): Thank you, Amrut, and thank you, everyone, for joining us. Allow me to take you through the performance for the quarter and the first half of FY '27, which is translating into tangible progress under our acceleration playbook. The quarter has been an important one for JPL, with continued organic growth, the acquisition of controlling stake in Equitas, and the announcement and subsequent completion of the acquisition of the wellness portfolio. With Equitas being, becoming our subsidiary, we are pleased to announce our first-ever consolidated financial statements, along with the standalone financial results during the quarter. Now, talking about the numbers, our standalone revenue grew by 9.3% year-on-year to 81 crores during the quarter, while consolidated revenues stood at 96 crores, indicating a growth of 29%, reflecting the contribution of the enlarged business. For H1 FY '27, standalone revenue reached rupees 154 crore, while consolidated revenues stood at 179 crores. Standalone gross margin stood at 64.1% for the quarter, whereas it was 64.7% for the half year, indicating an improvement of close to 70 bps over the corresponding previous period. Standalone EBITDA margins for the quarter remained broadly stable at 22.7% despite planned advance investment in people, marketing, and medical inputs as indicated by Manish in his speech, while our consolidated EBITDA margin stood at 19.3%. At the bottom line, standalone PAT stood at 13 crore while consolidated PAT had was 12 crore, with a margin of 15.5% and 12.8% respectively.
Nirav Vora (Jagsonpal Pharmaceuticals Ltd): Crores and we continue to generate net operating cash of 25 crores at a concentrated level during, first half of FY27. Following the completion of wellness portfolio acquisition and the discharge of part consideration during October 26, our focus is now on leveraging combined commercial capabilities and realizing business synergies. We are confident that this initiative initiatives will support business performance in Q3 and continue to contribute sustainable growth over the longer term. With that, I conclude my comments on the financial performance. Thank you, and we shall now open the floor for questions and answers. Thank you.
Moderator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Ankur Kumar with Alpha Capital. Please go ahead.
Ankur Kumar (Alpha Capital): Hello, sir. Thank you for taking my questions. Sir, I wanted to understand on this 500 crore revenue vision for the next year. So, currently we are around 300 crore type on the standalone side and we have been growing at like 10% CAGR for last couple of years. And the acquired businesses I think are around 75 odd crore type annual run rate. So, given these numbers and this 10% type growth rate, the 500 is looking like a tall ask, sir. Can can you can you please explain how are we estimating that?
Manish Gupta (Jagsonpal Pharmaceuticals Ltd): You want to take first? So, this obviously is an aspirational number, but we have a very clear road map on on how to achieve it, and this is without considering any further acquisitions beyond what we have already done. So, while historically or last six months we have been growing at 9.3%, obviously, the past doesn't mean it'll stay at that level. We are certainly confident of going faster. We have very clear and distinct plans for that. A lot of investment has been already made both at the product front, new launches as also on the people front, and as Amrit mentioned and even I alluded to, we will be seeing faster growth going forward. So, it's a pure organic growth that will lead to these numbers over next two years, nothing beyond that. It's all about execution and strategic execution, which generally we have been good at. Yes, we do agree that the [cough] growth was not so good in the year gone by, but things have already started looking up. Amrit, if you want to add?
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