RPG Life Sciences Ltd (RPGLIFE) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator (Dolat Capital): Ladies and gentlemen, good day and welcome to RPG Life Sciences Q2 FY27 Results Conference Call hosted by Dolat Capital. 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 the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note, this conference is being recorded. I now hand the conference over to Ms. Candice. Thank you and over to you, ma'am.
Candice Pereira (Dolat Capital): as need. Good evening everyone. I, Candice Pereira, on behalf of Dolat Capital, welcome you all to the Q2 FY '27 earnings call of RPG Life Sciences Limited. I would like to thank the management for giving us this opportunity to host the call. Today from the management team, we have with us Mr. Ashok Nair - Managing Director and Mr. Amol Lone - CFO. I will now hand over the call to the management for their opening remarks. Over to you, sir.
Ashok Nair (RPG Life Sciences Ltd): Thanks, thanks Candice, and good afternoon everyone and thank you for joining us. It's a pleasure to connect with you again and take you through our performance for the second quarter and first half FY '27. In fact, quarter two has been a quarter of milestone for RPG Life Sciences. For the first time we crossed 200 crore in quarterly revenue and 50 crore in quarterly EBITDA. All three of our business grew and in parallel we completed the most significant strategic step in the history of our API business with the creation of RPG Active Pharma and the acquisition of Actiphers and Raghuvar. I'll take you through each of this today. But before we get into quarter two and H1 highlights, I want to give a brief company introduction for those joining us for the first time. RPG Life Sciences has a legacy for more than five decades from its origin as a joint venture between a global MNC and the RPG Group. The company has evolved into an integrated pharmaceutical company with three businesses: domestic formulation, international formulations, and active pharmaceutical ingredients. In India, we reach over 100,000 doctors, including more than 36,000 specialties across nephrology, rheumatology, onco, urology, cardio, orthopedics, neuropsychiatry, and gastroenterology. Our portfolio includes six text, six textbook brands that have been prescribed and taught in medical colleges for decades. Internationally, we supply to more than 50 countries. Now if you see over over the past few years, we have undertaken a structured transformation journey, sharpening our portfolio, strengthening our execution capabilities, and building a more disciplined and scalable operating model. The transformation is reflected not only in our financial performance, but also in the way we approach markets, engage with healthcare professionals, and improve productivity across the organization. With the two acquisitions this quarter, our manufacturing footprint has expanded from three to five sites: two formulation facilities and three API facilities at Navi Mumbai, Visakhapatnam, and Kamareddy near Hyderabad, supported by integrated R&D. And over the last few years, we have undertaken a structured transformation, sharpening our portfolio, strengthening execution, and building a scalable operating model. The results of the work are now showing consistency quarter-over-quarter. We have a professional team size of over 1,800 employees, providing us with the right set of talent, intent, and capability to further accelerate our growth trajectory. If I talk about the performance highlights, the revenue from operations for quarter two grew 16.5% to 211.6 crores, compared to 181.7 crore in quarter two last year. I want to emphasize one point. The growth is almost entirely organic. The acquired sites contributed only 50 lakhs in quarter two, as the transaction closed near end September. Their full revenue contribution will begin from quarter three. We also delivered our first 50 crore EBITDA quarter, with our adjusted EBITDA, excluding one-time restructuring and API acquisition linked costs of 5.5 crore, we grew 15% to 50.1 crore in quarter two versus 43.6 crore last year. Gross margins also expanded by 260 basis points, despite multiple industry tailwinds and West Asia war impact. The margin expansion in a challenging external environment highlights the strength of our operations, procurement strategies, and execution discipline that has helped us mitigate this impact and grow our bottom line faster than our revenue growth. For the first half, revenue growth grew 16.2% to 407.3, crossing the 400 crore mark for a half year. H1 adjusted EBITDA grew 16.1% to 97.9 crore with a margin at 24.0. Our adjusted PBT before exceptions has also grown by 13.6 this year. Now coming to domestic formulations, which contributes approx 70% of our revenue, we grew 11.6% in quarter two to 145.7 crore and 13% in H1 to 278 crore, continuing our momentum of market beating growth. This is the sixth
Ashok Nair (RPG Life Sciences Ltd): Confidence is the quality of this growth. It has been driven by volumes which reflect real prescription demand. Our volume growth in H1 was 6.8% almost twice the market of 3.4. As for Pharmarack September 2026 data base RPG Life Sciences now the fourth fastest growing company in the Indian pharma market on a MAT basis. We achieved top 50 ranking during quarter two notably having advanced 12 ranks in a short period from rank 62 in March 2025 to rank 50 today. Within our cover market which is about 49,600 crore in size and growing at 9.8% in expert, we are the fastest growing company as per the Pharmarack's latest database. Now growth has been broad-based with every key basket growing in double-digits. In quarter two MAB grew at 24%, Nephrology and Rheumatology grew at 23%. Cardio grew at 18%, and Immunosuppressants grew at 13%. Importantly each of this baskets is growing faster than it did last year. Which indicates acceleration and not merely continuation. Digilization has stabilized. Our medico marketing programs are delivering high returns. And our sales force effectiveness and digital interventions are visibly improving field productivity with our PCPM increasing from 6.5 lakhs to 7.7 lakhs this year. Our leading brand in the pain management category Naprosyn continues to deliver strong performance. The key milestone this quarter is that Naprosyn has crossed 100 crore in secondary sales on a MAT basis. Making it one of the fastest growing large brands in India. H1 primary sale was 47.9 crore of 13.6 and we are on track to cross 100 crore in primary sales internally too. And we are investing to make this growth durable through Ortho Ignite program. We have engaged over 300 orthopedic surgeons in the CMEs this year. We also are carrying out Naprosyn Master program where we have engaged more than 550, 450 young orthopedic surgeons. And we are in the process of building relationship with tomorrow's prescribers today. We have also added over 4,000 orthopedic surgeons to our master doctor list to reinforce our Ortho and Pain range. Our new launches have our philosophy has been simple, launch product with complete focus on making them succeed. The 12 brands we launched in FY26 delivered 12.4 crore in H1. Nearly double the 6.3 crore in H1 last year and quarter two sales from these launches were up 50% year-on-year. Brands such as Preserva and RPZ are building into meaningful franchises. At the same time, we have improved the quality of sales, reduced returns and rationalizing trade discounts. We also revitalized legacy brands like Norpace and Serenace. Norpace particularly grew 40% in H1 and we are scaling up awareness through CMEs, journal publication and targeted campaigns. In FY27 we also made three strategic launches. Naprosyn ES is India's first naproxen esomeprazole combination, Kritipenem which extends our orthopedic franchise into anti-infectives and FlowAccess marks our entry into medical devices building our nephrology credibility. In October we also entered the GLP-1 space with the launch of Semaglutide injection across our Nephrology and Cardiology divisions. Our focus remains on building depth with therapies to sustain our growth trajectory. We are strengthening our operating disciplines through a set of focused initiatives designed to improve the field effectiveness and by integrating digital tools, iPads and automation in the work flows. We are enabling our medical representatives to make better use of their time and we are already seeing enhanced productivity in the field. Our proprietary doctor engagement RPG Serve continues to play a central role in strengthening our digital engagement with doctors. We're currently enhancing the platform further with more intelligent and personalized capabilities including AI-led content delivery and sharper segmentation. This helps us move from one-size-fits-all approach to more contextual engagement with our doctors. Going forward RPG Serve will continue to play a big role in deepening and customizing our reach and engagement. Coming to API from acquisitions to value creation, our API business delivered an exceptional quarter. Growing at 85.5% to 27.5 crore in quarter two. H1 revenue grew 57.1% to 54.1 crore. This is entirely organic and was delivered while the team was simultaneously executing two acquisitions. Which reflects the strength of our core Navi Mumbai business. On the strategic front we moved with speed and discipline. On 29th July we announced the transfer of our API business to RPG Active Pharma. The investment by Invascent and the acquisition of Actis. The subsidiarization became effective on 14th August. We announced the Raghuveer acquisition on 2nd September. And subsequently affected both the acquisitions in late September.
Ashok Nair (RPG Life Sciences Ltd): The scale we have built is significant. Expanded network has five times the manufacturing capacity, four times the reactors, three times the products and pipeline molecules, and twice the customers and employees. With the transaction completed, our focus has anchored firmly on value creation where our key priorities include improving asset utilization, accelerating customer acquisition and exports, strengthening the product pipeline, and delivering procurement, process, and cost synergies. We remain committed to our ambition of delivering 25% plus CAGR in the API business over the next five years through a combination of organic growth and disciplined acquisitions at prudent valuation. In short period, we have transformed a standalone API business into significantly larger, multi-site, backward-integrated organization, with further committed capital available for organic and inorganic growth. Every acquisition we look for API will be with the lens of being a building block in one integrated company focused on deep capabilities, capacity, chemistry, product portfolio, approvals, and customers. We'll also look to incorporate US FDA approvals and therefore, access to the US markets as part of the larger strategy. It's also important to note that the strong API business is a complementary to our Formulation business and will make it even stronger. The API carve-out increases management bandwidth for the Formulation engine as RPG Life has a separate dedicated management team. Therefore, focus deepens on both verticals, and we expect better overall performance of both. Coming to International Formulations, International Formulations is back on a growth path with revenue of 6.4% in quarter two to 36.7 crores and 7% in H1 to 71.7 crores. Our core franchises continue to perform well, while the key brands like Sodium Valproate growing 38% in South Africa and 17% in Australia. We are also deepening channel engagement, including a dedicated channel partners program in Myanmar to mark 25 years of Siloxogene in the market. We stepped up our customer outreach significantly. At CPHI this year, we met 162 customers and held more than 75 discussions with potential partners with strong interest from Balkans, Middle East. We are winning tenders with recent wins in LATAM, Ethiopia, and other markets. We expect to add about 10 crores of revenue from FY '29 from Chile and Ethiopia. We also completed our first CDMO project on time, which is expected to add about 8 crore from FY '29 in UK. And CDMO inquiries will continue to grow for us. To sustain this momentum, we are accelerating R&D and building the portfolio. We have built a data-led R&D roadmap targeting over 25 crore by FY '30. Our expanded API portfolio gives IF a forward-integration advantages on this new molecule. We have also added depth to the team with two senior hires who bring strong international marketing expertise. Together, these steps gives International Formulations a clear and sustainable growth runway. So on building a future-ready organization, our three business are our growth engines. But a large business needs a stronger foundation. So over the last few quarters, we are focused on strengthening of business support functions in line with our growth ambitions as we scale. In digital, 100% of medical representatives are now active on Salesforce with iPad-based detailing, translating to better field outcomes. And our RPG Serve platform continuing to deepen doctor engagement through scientific content, patient education, and personalized services. Market intelligence reports are now produced 75% faster at no additional cost. We have invested ahead of the curve in sales force effectiveness deploying multiple AI-enabled dashboards to strengthen campaign monitoring, commercial analytics, and data-led decision-making. And our internal medical representative app, RX Star, has also been upgraded to RX Star 3.0 with enhanced sales force capabilities for customer tracking and engagement analytics. These interventions are not only helping representatives save time, but also enabling more targeted customer outreach and improving field productivity. IT upgradation projects across both corporate operations and plant modernizations are underway. In finance, we are moving to a paperless workflows. On talent and HR, we have hired critical leaders with deep sector expertise, including a dedicated CEO for RPG Active Pharma, redesigned HR roles across sites, and put in place detailed succession plans with a strong middle-management layer.
Ashok Nair (RPG Life Sciences Ltd): hopefully analysis will be completed in quarter three. Coming to our financial round up to sum up the financials, quarter two delivered 16.5% revenue growth and 15% adjusted EBITDA growth, with gross margin expanding 260 basis point, despite the impact of the West West Asia conflict on input costs. We mitigated this proactively through price increase, product mix, and securing strategic inventory. PBT before exceptional items grew 11.3% to 42.5 crore in quarter two and 13.6% to 83.7 in H1. Reported PBT reflects two one-off items. Last year included a 11.2 crore gain from the fire insurance recovery, while this quarter includes 5.5 crore of one-time restructuring and acquisition related costs such as fees and etcetera. So closing we look as we look ahead, our priorities are clear: in domestic formulation, we aim to grow faster than the market, retain our top 50 position, and scale our new launches, including semaglutide. In API, we'll integrate both plants carefully, focus on value creation pillars, and align our R&D perspective with expanded pipeline. In International Formulations, we'll de deliver our FY '27 plan while protecting margins, close partnership discussions, and onboard further CDMO projects. So our approach remains one of disciplined, cautious optimism, delivering today's commitment while investing in tomorrow's growth. We have now have a market-beating formulations business, a substantially large and well-capitalized API business, and a stronger organization to support both. I'm confident that this position of RPG Life Sciences is well for sustained and profitable growth. Thank you for your continued trust and support. Now we'll be happy to take the questions.
Moderator (Dolat Capital): 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 use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ranjit Varma from Sameeksha Capital. Please go ahead.
Ranjit Varma (Sameeksha Capital): Yeah, am I audible?
Ashok Nair (RPG Life Sciences Ltd): Hello? Yes. Voice is a bit feeble. Yeah.
Ranjit Varma (Sameeksha Capital): Now is it clear?
Ashok Nair (RPG Life Sciences Ltd): Yes, this is better. Please go ahead.
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