Granules India, a leading pharmaceutical manufacturing company, has announced its Q1 FY26 financial results, showing a 3% rise in revenue but a 16% drop in net profit. The quarter ended 30th June 2025 saw the company’s consolidated revenue from operations reach ₹1,210 crore, compared to ₹1,180 crore in the same quarter last year.
Despite the top-line growth, the profit after tax (PAT) fell to ₹113 crore from ₹135 crore in Q1 FY25, mainly due to margin compression, higher raw material costs, and increased operational expenses.
Consolidated Financial Performance
| Particulars | Q1 FY26 (₹ Cr) | Q1 FY25 (₹ Cr) | YoY Change |
|---|---|---|---|
| Revenue from Operations | 1,210.00 | 1,180.00 | +3.00% |
| Profit Before Tax (PBT) | 185.00 | 214.00 | -13.55% |
| Profit After Tax (PAT) | 113.00 | 135.00 | -16.00% |
| Net Profit Margin (%) | 9.34% | 11.44% | -2.10 pp |
The consolidated numbers reflect steady revenue momentum but also reveal a narrowing profit margin due to higher costs.
Standalone Financial Performance
| Particulars | Q1 FY26 (₹ Cr) | Q1 FY25 (₹ Cr) | YoY Change |
|---|---|---|---|
| Revenue from Operations | 797.21 | 851.95 | -6.42% |
| Profit Before Tax (PBT) | 91.45 | 125.86 | -27.37% |
| Profit After Tax (PAT) | 69.49 | 93.78 | -25.90% |
| Net Profit Margin (%) | 8.71% | 11.01% | -2.30 pp |
The standalone results were weaker than consolidated, with both revenue and profits seeing significant declines, indicating that international operations or subsidiaries contributed positively to overall growth.
Q1 FY26 vs Q1 FY25 – Key Highlights
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Revenue Growth: Consolidated revenue grew 3% YoY to ₹1,210 crore.
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Profit Decline: Consolidated PAT dropped 16% YoY to ₹113 crore due to higher costs.
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Standalone Pressure: Standalone revenue fell 6.42% YoY, and PAT contracted 25.90% YoY.
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Margin Impact: Consolidated net profit margin slipped from 11.44% to 9.34%.
Granules India Share Price Performance
| Date | Opening Price (₹) | Current Price (₹) | Change |
|---|---|---|---|
| 12 Aug 2025 | 441.20 | 456.10 | +3.37% |
Historical Returns:
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1-Year: -33.79%
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5-Year: +48.66%
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Max: +4,152.10%
The stock has struggled in the last 12 months, reflecting investor caution around margin pressures and industry challenges.
Operational Analysis
The Q1 FY26 results show a mixed operational picture:
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The company benefited from steady demand for active pharmaceutical ingredients (APIs) and formulations in export markets.
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Rising costs of raw materials, especially in the pharmaceutical chemicals category, impacted profitability.
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The domestic market underperformed compared to exports, as reflected in the standalone numbers.
Industry Context
The pharmaceutical sector in 2025 is facing:
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Positives: Strong demand from regulated markets (US, Europe), opportunities in generic drugs, and increased healthcare spending.
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Negatives: Pricing pressure from global buyers, fluctuating input costs, and regulatory compliance expenses.
Peer Comparison – Q1 FY26
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | YoY PAT Growth (%) | Net Margin (%) |
|---|---|---|---|---|
| Granules India | 1,210.00 | 113.00 | -16.00% | 9.34% |
| Aurobindo Pharma | 6,820.00 | 900.00 | +5.00% | 13.19% |
| Laurus Labs | 1,500.00 | 180.00 | -8.00% | 12.00% |
Granules India lags behind larger peers in terms of profit margin and growth trajectory, indicating the need for stronger cost control and product mix optimization.
Outlook for FY26
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Growth Drivers: Expansion in API production, higher USFDA approvals for formulations, and capacity enhancement in Hyderabad and Vizag facilities.
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Risks: Commodity price volatility, regulatory hurdles, and pricing pressure in key markets.
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Focus Areas: Improving operational efficiency, reducing raw material dependency, and exploring high-margin product categories.
Conclusion
The Granules India Q1 FY26 results reveal a company that is managing to grow revenue modestly but struggling with profitability. The decline in profit despite higher sales highlights the need for better cost management and product diversification.
With strong fundamentals and a global presence, Granules India still holds long-term growth potential, but near-term performance will hinge on its ability to manage input cost pressures and improve operational margins.
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