Shaily Engineering Plastics Ltd (SHAILY) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day. You all have been connected to Q2 and H1 FY '27 earnings conference call of Shaily Engineering Plastics Limited. The call will begin shortly. Please stay connected.
Moderator: Ladies and gentlemen, good day and welcome to Q2 and H1 FY27 earnings conference call of Shaily Engineering Plastics Limited. 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. Before we begin, a brief disclaimer. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and it may involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Amit Sanghvi, Managing Director of Shaily Engineering Plastics Limited. Thank you and over to you, sir.
Amit Sanghvi (Shaily Engineering Plastics Ltd): Thank you very much. My apologies to everyone on the call for running a few minutes late. Good afternoon, and thank you for joining the Shaily Engineering Plastics Limited earnings call for the second quarter and first half of FY27. With me today are Sanjay Shah, our Chief Strategy Officer, and SGA, our Investor Relations Advisors. Our results and investor presentation for the quarter ended September 30th, 2026, have been filed with the stock exchanges and are available on our website as well. I trust you've had a chance to review them. Let me start with the headline numbers. Consolidated revenue for Q2 FY27 was 320 crores, up 24% year-year-on-year and 14% sequentially. This is our highest ever quarterly revenue. EBITDA rose 25% year-over-year and 22% sequentially to 102 crores at a margin of 31.9%. Importantly, this is the first time we have crossed the 100 crore EBITDA milestone in a single quarter. Three points define this quarter. First, healthcare is now the primary engine of our business, contributing 55% of revenue and growing 78% year-on-year. Second, gross margins recovered to 60%, about 70 basis points higher than a year ago, following the cost pressures we highlighted in quarter one. Third, the consumer business has finally stabilized over two sequential quarters, although it continues to operate below last year's levels. The quarter was shaped by certain geopolitical uncertainties, input cost volatility, and divergent demand trends across markets. Development in West Asia continued to impact freight cost and polymer prices, while demand for home furnishings in Europe and the US remained subdued. We navigated these pressures through pricing discipline, procurement efficiencies, and a favorable product mix, prioritizing margin resilience and quality of returns over volume-led growth in consumer. The global GLP-1 market is also entering a significant phase of transition. With semaglutide patent protection expiring in the first wave of markets, generic competition is gaining momentum. Launches commenced in India in March, followed by Canada's approval of a generic in April and Brazil's approval of its first generic in August. The resulting price reductions are widening patient access to these therapies and increasing volume. For Shaily, this represents a significant opportunity. As affordability improves and patient access expands, demand for drug delivery devices is expected to grow. With established partnerships across multiple customers and geographies, we are strengthening our platforms and scaling capacity, including through our Abu Dhabi facility, to capture this next phase of market growth. Let me turn to segments, starting with healthcare. Revenue stood at 175 crores in Q2, up 78% year-on-year. Healthcare contributed 55% of revenue compared to 38% a year ago. For the first half, healthcare revenue was 318 crores, up 81%. Growth was led from our pen injector platforms, particularly the GLP-1 programs, alongside steady volumes in insulin
Amit Sanghvi (Shaily Engineering Plastics Ltd): reflect the strength of our customer partnerships, our engineering capabilities and ability to scale complex device programs with consistent quality and precision. On the innovation side, you know innovation has been central to the development of Shaily's health care business. From the outset, we have focused on building our own IP led platforms, creating differentiated solutions for our customers and patients. We continue to build on this foundation. During the quarter we signed two new contracts for these platforms and launched our latest innovation, the Toby reusable auto injector, our two step reusable auto injector for next generation GLP-1 therapies. Toby reusable retains the same simple two-step interaction of our Toby disposable auto injector while introducing a multiuse format. The prefilled syringe is housed in a single use syringe pod which attaches to the main mechanism. The patient retains and reuses for over 200 injections. The device delivers medication subcutaneously and incorporates a needle lockout mechanism for added safety. The pod is made entirely from a single material and can be made out of recycled materials as well, making it very easy to recycle as well as sustainable. Compared with the fully disposable auto injector, Toby reusable is designed to reduce material consumption, energy use, shipping weight as well as cold chain requirements. Our initial assessments indicate that conservatively, it is 70% more sustainable than a disposable two step auto injector. It combines the convenience of a disposable device with the material efficiency advantages of a reusable system. For a weekly therapy that patients may use over several years, this is very meaningful. It demonstrates how thoughtful engineering can address not just the delivery of a medicine, but also the patient experience, cost of treatment and environmental footprint. These are increasingly important consideration for patients, payers and our pharmaceutical partners across the world. We are also extending our platforms beyond GLP-1 into new therapeutic areas with a particular focus on emergency use and oncology. While GLP remains our largest growth driver, broadening our presence across therapeutic areas will make make our healthcare business more diversified and resilient over time. In emergency use, a device has one critical responsibility, to deliver the full dose the first time, often in stressful circumstances and in the hands of someone without medical training. There is very little margin for error. This is fundamentally a precision engineering challenge and one that plays directly to Shaily's strengths. In oncology, an increasing number of biologic therapies are moving from intravenous infusion to subcutaneous injection. This transition calls for devices engineered to handle larger volumes and higher viscosities. We are developing our platforms to address these more demanding drug delivery. Getting to consumer and industrial, consumer revenue was 116 crore, down 14% year on year and flat sequentially. During the quarter, we received business confirmation for a new product from an existing customer and for higher volumes of an existing product from another customer. A few product lines, which still represent a relatively smar small part of the segment, continue to grow rapidly. Industrial revenue grew 23% year on year to 29 crores, driven by customers in automotive, appliances and consumer electronics. During the quarter, we received business confirmation for seven new power tool products and new knobs from an appliance customer. Semiconductor tray revenue remains on track to commence in Q4 '27 from our existing facility. Consumer electronics and semiconductor packaging represent another important engine for Shaily. Commercial supplies have commenced for consumer electronics, and we are progressively scaling production of the five components awarded by our new customer. We will start trial production of semiconductor packaging in Q3 FY '27 and expect to start commercial shipments in Q4. In parallel, we are pursuing a significant scale-up opportunity in both these segments, which we expect to unfold over the next 36 months. This business calls for many of the same capabilities that underpin our medical device business: tight tolerances, high cosmetic standards, rigorous process control and consistent quality across millions of components. These capabilities are a result of sustained engineering investment, process discipline and a strong focus on customer requirements. We see considerable potential to leverage these strengths in a new market. Our approach will remain measured and disciplined, with the capacity expansion aligned to customer commitments and the pace of business development. I will update you as we achieve key milestones.
Amit Sanghvi (Shaily Engineering Plastics Ltd): As we enter the second half of FY '27, our priorities are clear. We will focus on five areas. Ramping up our newly commissioned capacity, exceeding our full-year device guidance, advancing our platforms in emergency use and oncology, progressing the consumer electronics and semiconductor packaging scale of opportunity, and, importantly, maintaining margin discipline as we grow. We remain confident in the underlying strength of our business: our engineering capabilities, our growing portfolio of proprietary platforms, our customer partnerships, and our ability to execute with precision and consistency at scale. Our ambition is to build Shaily into a global, innovation-led engineering and manufacturing partner, creating lasting value for our customers, patients, and shareholders. With that, I will now hand over to Sanjay, who will take you through the operating and financial highlights in more detail. Thank you very much. Over to you, Sanjay.
Sanjay Shah (Shaily Engineering Plastics Ltd): Thank you, Amit. Good afternoon, everyone. Let me take you through the operating and financial highlights for the quarter. The changing mix of our business is now reflected in our improving capacity utilization and operational productivity. Machine utilization across our plants rose to 52.5% in Q2, compared to 47.8% a year ago. This reflects the growing contribution of our higher-value healthcare business and our ability to drive greater productivity from our existing manufacturing base. Exports accounted for 62.9% of revenue in H1 FY '27, compared to 71.7% in H1 FY '26. The shift is primarily attributable to growth in the healthcare business, where we supply Indian pharma customers who in turn serve global markets. While the reported export mix has changed, our participation in global markets continues to expand through these customer relationships. Our financial position continues to strengthen, with returns improving. Further in the, in October, CARE Ratings reaffirmed our long-term bank facilities at CARE A+ with a stable outlook, and upgraded our short-term facilities to CARE A1+ from CARE A1. The upgrade reflects our healthy operating margins, improving leverage and debt coverage, and new business secured from both existing and marquee customers. It is a strong endorsement of our financial discipline, execution capabilities, and growing customer confidence. Consolidated financial highlights for Q2 FY '27: revenue was Rs 320 crores, compared with Rs 257 crores in Q2 FY '26, up 24% year-on-year. EBITDA rose to 102 crores from 82 crores in FY '26, up 25%. EBITDA margins were at 31.9%, compared with 31.8% in Q2 FY '26. Profit after tax was 61 crores, compared with 51 crores in Q2 FY '26, up 20%. PAT margin was 19.2%, compared with 20% in Q2 FY '26. Segment revenue for Q2 FY '27: healthcare revenue rose to 175 crores from 99 crores, up 78% year-on-year. Consumer revenue was 116 crores, down 14% year-on-year. Industrial revenue rose to 29 crores from 23 crores, up 23%. On the consolidated financial highlights for H1 FY '27, revenue was 600 crores, as compared to 503 crores in H1 FY '26, up 19% year-on-year. EBITDA rose to 185 crores from Rs 152 crores, up 22%. EBITDA margin improved by 60 bps to 30.8%. Profit after tax was 109 crores, compared with 92 crores in H1 FY '26, up 18%. PAT margin was 18.2%, compared with 18.4% in H1 FY '27. Cash PAT was 138 crores, up 19% from 116 crores. ROCE and ROE were at 41.1% and 29.7%, respectively, as of 30th September 2026. Debt-to-equity was 0.2x, and fixed asset turnover was 2x as of 30th September 2026. Segment revenue for H1 FY '27: healthcare revenue rose to 318 crores from 176 crores, up 81% year-on-year. Consumer revenue was 231 crores, compared with 286 crores in H1 FY '26, down 19%. Industrial revenue rose to 51 crores from 41 crores, up 24%. That concludes my update. We will now open the floor for questions.
Moderator: Thank you very much. We will now begin the question-
Moderator: and answer session. Anyone who wishes to ask a question may press star and one on the touch tone 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 Ritesh Shah from Investec. Please go ahead.
Ritesh Shah (Investec): Yeah, hi sir. Thanks for the opportunity and congratulations for a good set of numbers. Sir, I have multiple questions. First is you indicated on Tobii. Just wanted to understand how it will widen our TAM. What gives us comfort that it won't decimate our existing product basket? If you could add some comments with respect to pricing and profitability over here, that would be great. And lastly indications besides GLP-1 that it can actually treat, that's the first question. Second, you did touch upon emergency autoinjectors, but is it possible to give some timelines with respect to monetization or launch for on-body autoinjector which is Mira, emergency autoinjector and I think on the last call you had indicated about eye applicator as well. So, that's the second question, three parts. And the third question is more of a clarification. I think there is newsflow with respect to one of the Ministry of Health advising a recall with respect to product impurities, incorrect dose display, and packing errors. I think these are the three variables which have been indicated. But if one goes into further detail over here, it does indicate incorrect dose display as well as incorrect dose delivery. So, just wanted to have clarification that this is something which doesn't impact Shaily and if it does then what is the impact it would have? Thank you. These are the three questions.
Amit Sanghvi (Shaily Engineering Plastics Ltd): Thank you. All right. I've got to remember all the questions, Ritesh. So, on on the pipeline, look, I think we're we're close to finalizing a customer for the on-body Mira, post which we will have a 14-month timeline to deliver clinical batches, which means the product will be fully design verified and we will deliver clinical batches. But we've not finalized the customer yet. Now moving on to Tobii emergency use, we we have two active customers on emergency use for whom we are developing these this product. From a timeline perspective, the the clinical batches are due end of '27, which means that earliest commercialization to you know, to production will be probably end of '28. Calendar '28. Now on to Tobii reusable, whether it cannibalizes our existing market or not. To be honest, you know, I I don't think so. There is a place for pens and there is a place for autoinjectors. Now the reason autoinjectors are widely used is because how easy they are to use. Especially when you have fixed-dose therapies, you know, you don't want to go through the process of dialing, putting on a needle, etc, etc. So the idea behind Tobii reusable is to find a way to give the same user use experience with the sustainability with a very significant sustainability angle. So at the moment, if you think, you know, think about it just between two large players, one is Mounjaro or Zepbound and Wegovy, you know, you'd be looking at a global autoinjector consumption of over a billion injectors that end up in the landfill every year. And and to us increasingly every large there's Tobii Reusable is targeted very much for innovator pharma. It's it's not because there isn't a innovator that has a reusable autoinjector. It's unlikely that a generic will take it forward. So A, it doesn't cannibalize any of our existing product portfolio. B, increasingly most have commitments to cut waste, become more sustainable, you know, various EU regulations and and global regulations that account for it. So, we have a very nice solution where I think you maintain either same or higher possibly profitability, but providing a very, very unique solution to the customer. Which also then gets a differentiated product on the market, right? Because everybody has a two-step autoinjector now.
Amit Sanghvi (Shaily Engineering Plastics Ltd): getting to Does that answer your question on the first part?
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