Thank you, Danish. On behalf of Granules India Limited, I extend a warm welcome to all the participants on the Q3 and 9 months FY26 financial results discussion call.

Today on the call, we have Dr. Krishna Prasad Chigurupati, Chairman and Managing Director; Ms.

Priyanka Chigurupati, Executive Director; Mr. Mukesh Surana, Chief Financial Officer; Dr.

P. V.

Srinivas, Chief Technology Officer; and Mr. Sanjay Kumar, Chief Strategy Officer.

Before we begin the call, I would like to give a short disclaimer. This call contains some of the forward-looking statements, which are completely based on our expectations, beliefs, and opinions as of today.

These statements are not a guarantee of our future performance and involve unforeseen risks and uncertainties. With this, I would like to hand over the call to Dr.

Krishna Prasad sir for his opening remarks. Over to you, sir.

Thank you.

Thank you, Prachi. Good evening, ladies and gentlemen.

Thank you for joining us today and for your continued interest in Granules India. We trust you have had a chance to review the detailed presentation available on our website.

Let me begin with our consolidated performance. Q3 FY26 has been one of our strongest quarters despite a temporary loss at our peptide CDMO business.

We reported revenues of ₹1,388 crore, a 22% increase year-on-year. EBITDA was ₹308 crore, growing 34% over the same period last year.

Margins improved meaningfully, driven by disciplined execution and better operating leverage. This momentum reflects the strength of our diversified business model and the progress we are making on multiple strategic fronts.

Regulatory and quality upgrade: regulatory excellence continues to be a critical priority for us. We made steady progress across all our facilities for this quarter.

Gagillapur facility: our remediation plan remains on track. We held a post-warning letter meeting with the FDA in early January.

We will be submitting the requested documentation shortly. Importantly, to date, the agency has not raised any concerns regarding the adequacy or pace of our corrective actions.

We expect a formal feedback after our submission and remain confident about the pathway to resolution. As a prudent de-risking measure, we have filed select products from our US and GLS facilities.

The site also received ANVISA Brazil GMP certification, reinforcing the improvements in our quality systems. GLS at Genome Valley: the US FDA conducted an unannounced PAS and GMP inspection from 15th to the 19th of December.

We received 5 observations, none related to data integrity. Our responses were submitted within the stipulated timeline.

Earlier in the quarter, GLS received a PAS approval on 10th November and an EIR on 11th December for the inspection held in August. We have also received a CBE-30 approval following the recent inspection.

GPI in the US: our GPI facility received the EIR on 5th November, closing the PAS inspection from June. GCH, our US packaging site: the US FDA completed a GMP inspection on 4th December with zero Form 483s.

Across the network, we continue to advance digitalization of manual operations. Several initiatives are already live at GPI.

We expect to complete implementation at Gagillapur by mid calendar year, followed by rollout to other sites. While a lot of our consultancy costs have come down, we expect to invest into system enhancements, which will involve some capex and opex over the coming quarters.

These steps will strengthen both the reliability and resilience of our operations. R&D filings: our R&D and regulatory pipeline progressed well this quarter.

We filed 1 EU dossier, which is DCP, 8 new product registrations in rest of the world markets through partners, 4 DMFs in rest of the world countries. Approvals included a tentative US FDA approval for generic Adzenys from GPI, 1 approval in Europe, 2 approvals in ROW markets, 1 DMF approval in China.

Our increasing focus on ROW markets supports our strategy to diversify beyond the US and Europe. ESG progress: sustainability continues to be a core part of who we are.

This quarter, our CDP climate change rating improved to A, up from B. Our S&P CSA score increased to 62, placing us among the top 10% of our global peers.

We reinforce our commitments as a signatory to the UN Women's Empowerment Principles, UN Global Compact, and PSCI. Our Gagillapur facility achieved zero waste to landfill, which is Platinum Plus, with over 99% waste diversion.

We continue to make measurable progress across Scope 1, 2, and 3 emissions, renewable energy, sustainable procurement, and water neutrality initiatives. Preferential issue: during the quarter, we also took a strategic step to strengthen our balance sheet through the preferential issue, which saw strong support from shareholders in yesterday's EGM.

The proceeds from this issue enhance our financial flexibility and will be deployed prudently to support capacity expansion, drive efficiency, and pursue value-accretive opportunities while maintaining our focus on governance and capital discipline. We believe this capital raise positions the company well to accelerate growth and create sustainable long-term value for all shareholders.

Strategic direction: as we noted last quarter, Granules has entered a phase of renewed momentum. Our strategic priorities remain clear: transitioning to higher-complexity generics; normalization at Gagillapur following remediation, and strengthening the quality systems holistically across all the facilities; strengthening our market presence across key geographies; scaling operations at GLS as regulatory milestones translate into commercial execution; building a differentiated peptide CDMO platform through Asellus with rising innovator engagement.

These pillars position us well for sustainable, quality-led growth. For ease of understanding, we have broken down our portfolio strategy into integrated Rx, complex Rx, and CDMO, the definition and directions of which have been presented in our IR presentation.

To conclude, this has been a strong quarter operationally, financially, and strategically. We remain committed to building a high-quality, innovation-driven global pharmaceutical enterprise supported by robust governance and a resilient multi-site supply chain.

With this, I now hand over the call to Sanjay Kumar, who will speak about our peptides and CDMO growth platform. Over to you, Sanjay.

Thank you, Chairman Sir. Good evening, everyone.

Let me briefly update you on the progress of our peptide CDMO platform, Asellus Peptides and Senn Chemicals. As anticipated, performance in the Q3 was modest, but consistent with the transition phase we have discussed earlier.

Having said that, Q3 was an execution- and activity-intensive quarter focused on executing key projects, increasing utilization, and strengthening delivery readiness for the Q4. Also during the quarter Q3, we incurred high operating costs on account of plant maintenance activities and additional shifts towards a key customer project.

The benefit of this increased activity are expected to translate as delivery conversion in the next quarter, that is the Q4. From an execution standpoint, Q4 is anchored on delivering key projects where work carried out over the last quarters is now moving into delivery stage.

Accordingly, Q4 is tracking towards a meaningful improvement in performance supported by ongoing project deliveries. Our focus remains on disciplined execution, predictable delivery, and strengthening customer confidence.

On the R&D front, we are seeing active collaboration between our Switzerland and India teams working together on live customer projects after operationalization of our Peptide Center of Excellence at IIT Hyderabad. The India R&D setup has begun contributing directly to the customer projects, including development and execution responsibility.

The R&D team is also making progress on TASEP peptide chemistries, reinforcing our technology differentiation, particularly in the cosmetics segment. On the commercial front, our focus over the next couple of quarters is on progressing feasibility discussions with our customers, seeding samples with the select customers, particularly in amino acid derivatives and complex peptide fragments, and responding to the RFQs and the RFPs across the active pipelines.

These activities are focused on building a conversion pipeline for the coming financial year and beyond next financial years. With that, I will hand over to Mukesh Surana, Chief Financial Officer, who will take us through the financial performance.

Thank you, CMD and Sanjay. Let me take you all through key financial highlights for Q3 FY26.

Revenue: the third quarter revenue were ₹13,879 million as compared to ₹11,377 million in Q3 FY25, a growth of 22%, and revenue sequentially grew by 7% as compared to Q2 FY26. Revenue growth was broad-based with strong contribution of formulation business in North America and Europe.

The sales breakup as per business division and geographic region are presented in our investor presentation, which is available on the website. Gross margin: we delivered a gross margin of 63.9% in Q3 FY26, representing an improvement of 216 basis points year-on-year and decrease of 183 basis points sequentially.

Year-on-year gross margin improved with a better product mix with the finished dosage segment. EBITDA and EBITDA margin: EBITDA for the quarter was ₹3,081 million, that is 22.2% of sales, as compared to ₹2,303 million, that is 20.2% of sales in Q3 FY25, meaningful improvement of 196 basis points from Q3 FY25 despite EBITDA loss of Asellus Peptides of ₹248 million.

Quarter-on-quarter increase in EBITDA loss of Asellus Peptides is due to regular and preventive maintenance taken up in December '25 at Senn Chemicals facility. EBITDA as a percentage of sales for Q3 FY26 is improved with 75 basis points from Q2 FY26.

The improvement in EBITDA was primarily due to sales growth and margin expansion. R&D: R&D expenses for the quarter were ₹689 million, that is 5% of sales, as compared to ₹568 million, that is 5% to sales in Q3 FY25, and ₹705 million, that was 5.4% to sales in Q2 FY26.

We will continue to spend similar amounts to support long-term strategic growth. Net debt: our net debt stood at ₹10,151 million as compared to ₹10,241 million in Q2 FY26.

Cash-to-cash cycle: our cash-to-cash cycle has slightly improved to 202 days in the current quarter as compared to 204 days in Q2 FY26. Net working capital as a percentage to sales was at 27%, improved from 33% in the year beginning.

Cash flow from operations: cash flow from operations for the quarter was ₹2,187 million as compared to ₹1,937 million in Q2 FY26. Capex spent during the quarter was ₹1,298 million as compared to ₹2,112 million in Q2 FY26.

ROCE: ROCE for Q3 FY26 is 16.8% as compared to 16.2% in Q2 FY26. ROCE has improved with the improvement in operating profit quarter-on-quarter.

With this, I open the floor for questions.

Hi. Am I audible?

Yes, ma'am, you are.

Yeah. Thank you for this opportunity, and I joined the call a bit late, pardon me if the answer to my question has already been answered in your opening remarks.

My question is on our Gagillapur facility. In the last quarter, you informed that we were going to meet the FDA in January month.

Could you please update your investors regarding the same? Have we met them already?

If yes, could you please outline the next steps that we as a company are required to follow before we clear this warning letter? Thank you.

This is my question.

Krishna, we had a virtual meeting with the FDA early January, and they have requested us for some more documentation, which we'll be submitting shortly. The most important part is the agency has not raised any concerns regarding the adequacy or pace of our corrective actions.

Once we submit our response and further information, we will see what the FDA comes back with. That's it, yeah.

Right. Would you be able to put a timeline to it, when are we expecting the final reinspection from their end?

We cannot put a timeline to that, but we will be submitting a response quite early in the very near future. We'll have to see what timeline they're going to come out with.

Again, like I mentioned, we have also been de-risking. Some of the filings have been happening from our US facility and also at our GLS facility, and some products are being site-transferred to our GLS facility here too.

Quite amount of de-risking is happening. Even if it takes a little longer, it should not be a major problem.

Right, right. Sure.

Thank you.

Hi. Good evening.

A couple of questions from my side. One, there is this ₹25 crore of loss from the peptide franchise, which you have given in the investor presentation.

How has this moved across quarters from 1Q to 3Q, and what is the outlook for the next few quarters?

I think it's a good idea Sanjay takes this call. Sanjay?

By the way, Sanjay is responsible for the peptides business, and anything regarding peptides, he'll be answering. Yes.

Bino, the numbers are comparable to the financial performance of the previous quarter. In terms of outlook, this is a typical of a CDMO business where the quarter-to-quarter variation happens.

As I covered as a part of my early commentary, while the financial performance was lower and as anticipated, the quarter itself was activity-intensive, and our projects progressed through the execution, which typically take couple of quarters. Outcome of the last quarters will be reflected in the Q4, and we are expecting a very meaningful improvement in the Q4 performance.

We do have a visibility over the next set of quarters, and the numbers are significantly improved over the past two quarters on the revenue basis.

Understood. Just to follow up on that, when you say improvement in performance, are you referring to a break-even and a positive EBITDA sometime soon?

Yes, I exactly mean that, and that is something that we covered in the last concall as well that we expected Q4 to go above the neutrality on EBITDA that you asked. We remain confident, and we are on track to get to that position.

Q4 as in next quarter, right? This quarter.

Yes, the current ongoing quarter.

Okay. What will drive that?

Is it transfer of manufacturing to India, or additional projects that you have taken up? What is leading to this sharp turnaround?

I won't put it as actively as that, like you would assume the lead time to execute these projects go beyond a quarter. We did have the visibility on the execution timeline for this, and we understood that those deliveries will happen in Q4.

Again, the quarter-to-quarter variation is very unique to the CDMO business. We did have the visibility.

We were executing during the Q2, Q3, and we continue to execute through the Q4, and some of the key customer deliveries are happening in the Q4.

Understood. Can we also assume that it will remain in the positive EBITDA territory through the quarters in FY27 as well?

Our target is always to turn positive from next financial years, but again, I keep on saying the quarter-to-quarter variation will remain a characteristic of this business, but on a year basis, we're turning towards neutrality and profitability for sure.

Got it. Thanks for that.

Second, is there any cost related to Gagillapur facility remediation still sitting in the P&L in Q3?

Mukesh this side, Bino. The remediation cost has substantially come down, it will be in this normal levels for few quarters, and then will be negligible.

It has come down substantially.

Got it. One last question on US.

If I look at your US revenues in dollar terms, last couple of years, you have added $40 to $50 somewhere between $40 and $50 million every year to the US revenue. Is that something which we can kind of look forward to in the coming couple of years as well?

That's what we aspire for, and we are confident of that.

Got it. Thank you.

I'll join back the queue.

Thanks for the opportunity, sir. Just on this Asellus peptide, how much of the revenue would have been in this quarter or let's say 9 months?

This quarter is ₹33 crore, Tushar. Okay.

Quarter-on-quarter, last quarter it was 28, and the previous quarter also around 28, 29. This quarter, ₹3-4 crore higher.

The loss has gone up, which Sanjay also has clarified, I also clarified. Primarily, we have taken higher execution activities both on some of the active projects where the revenue will further come in Q4, and also we have taken up regular and preventive maintenance costs in December.

Effectively that maintenance cost will reduce, and then there will be scale-up in the revenue, which is why the EBITDA break-even for Asellus peptide? You're

right, Tushar, yes.

If I exclude let's say Asellus revenue and the EBITDA loss with respect to the Asellus, the ex of that business is also scaled up both in terms of revenue as well as profitability. How that piece of the business will subsequently maybe fourth quarter onwards or in FY27, given that the regulatory issue-related expenses are actually at least largely behind, we might wait for reinspection for Gagillapur site, but ex of that, how to think about the growth in the business in FY27?

If you can share some light on that.

Tushar, we are looking at sequential improvement both on the sales and margin side.

That would be driven by?

That will be driven by operational leverage for sure, and more than that in fact revenue as well.

This is to do with our, let's say, core products or the new approvals, and which geographies if you can give more color?

Tushar, Priyanka, go ahead, you can answer that.

Tushar, I'll answer that. A few things.

As well the last couple of quarters, as we mentioned in our past concalls also, while we were producing, we weren't producing to the full of our capability. Right now, we are going to be increasing capacities and catering to all the awards that we have in the US and to the other markets.

Just the operational efficiencies will increase, productivity will increase, and that will certainly increase the numbers going forward. In addition, if all goes well with Gagillapur, we'll have our launches in place.

That will also facilitate the growth. We have a few CBE-30 approvals and some PAS approvals from the GLS site, which we plan on launching.

That will also facilitate growth.

Got it, ma'am. That's it.

Thank you so much. Thank you.

Hello. Am I audible?

Yes, ma'am, you are.

Yeah. Good evening, everyone.

I just had one question. I wanted to gain some clarification on Lisdexamfetamine.

What's the product status as we heard previously that GPI received FDA approval for the same chewable tablets in December '24, and then in January '25, the capsules? Is there any revenue recognition also?

I just wanted to gain some insights on Lisdexamfetamine.

Yes, it's been four yeah, sure. It's been 4 quarters since we've launched Lisdex caps and tabs, and it provides a meaningful revenue addition to our US business.

All right. Could you clarify some numbers or the revenue for the same?

No, we don't get into product specifics, unfortunately. I will tell you that we were a late entrance to the market, but because of our quota history and our compliance history with the DEA, we were able to get meaningful share.

We plan on increasing it as we keep going further.

All right. Will it be feasible for you to tell how much incremental demand this will signal since you mentioned that the quota for US the quota for Lisdexa has been increased, and in '24, it was around 26k per kg, whereas in '25, it was increased to 32k per kg, and in September 19 also, it was raised?

Can we see any numbers from R and what benefit we can see?

I'm sorry. Can you please repeat your question?

To say that since Lisdexamfetamine quota was increased around September, it was announced by US DEA that the quota has been increased from 24 to 25, and here approximately 40k per kg. What incremental demand does this signal, and does the industry have sufficient in-market demand to observe this?

I'd like to clarify that without end-market demand, the DEA will not increase the quota overall for any product. Yes, there is market, and based on compliance history of each company and the continuous outflow of products quarter-on-quarter based on legitimate demand, and again, I want to say, based on the compliance aspects of that, the DEA awards quotas to the suppliers.

Understood. That was my question.

Thank you so much.

Yeah.

Hi. Good evening, sir.

Sir, a couple of questions. Firstly, sir, we've got in-principle approval for amphetamine product in December across our two dosage form, and you mentioned the market size is $220 to $230 million per annum, and we are one of the few players to get approval for this.

When can we expect the launch of this product in US, and over a period of time, what kind of market share can we garner?

I'll take that question. If you're referring to the approval of generic Adzenys, it was a tentative approval.

It's not an approval yet because it is an IP-based product. The overall value of the product right now including the brand is about 170 million units, but there's only one other generic player in the market.

The timing of launch, I cannot confirm right now because it is a tentative approval, which is in litigation stage right now.

Okay. When do we get the final approval, if at all we get it?

It will take a year.

It will take a year. Got it.

Second question is on controlled substance. What kind of growth did we clock in Q3 and 9 months FY26 in this segment?

I think we should start referring to this entire basket instead of just looking at controlled substances. I would urge you to just look at our investor presentation where we're segregating our divisions into integrated pharma, complex generics, and others.

Within that, the definitions, etc., have been mentioned in the presentation, but within the complex generics range itself, just YoY growth Q3 to Q3 FY25 to '26, we grew from 27% as a total contribution to 49%, and Q-on-Q, we grew from 40% to 49% within the complex generics range.

Right. Controlled substance would be a significant part of the complex generics.

Yes.

Right. Right.

Got it. This is helpful.

Just one last question on bookkeeping. Sir, what was the remediation expense in Q3 FY26?

Ritwik, it has been substantially lower, almost half of what we incurred in Q2.

Okay. Got it.

Thank you and all the best.

Good evening to the team. I have two forward-looking questions.

My first question is as Granules continues to grow its formulations and CRAMS business, how do you see capacity use and overall production level changing over the next 1 to 2 years? In particularly, how will steps like making more of your own APIs, using automation in manufacturing, and strengthening regulatory compliance be put into practice to improve efficiency, reduce production time, and keep the company competitive in the global market?

That's my first question. I'll ask my second question after this.

Thank you.

Priyanka, go ahead.

In terms of capacity utilization, if I understood your question right, at Gagillapur, we will have some capacities over the next couple of quarters, but GLS, we will have significant capacities, and more importantly, both the sites will have a lot of products in common. If there is a lot of demand that we see going forward, we can cater to it from both the sites.

On the operational efficiencies, could you please repeat your question? No,

I just want to understand what steps will be taken, making more of your own APIs, using automation in manufacturing, and strengthening regulatory compliance to reduce production time and keep the company competitive in the global market.

I think to answer your question, if it's specifically about APIs, almost all the APIs that we make are already very cost-competitive. When we talk about automation and digitalization, it's more to increase quality compliance, to make sure that we are one of the strongest companies in quality going forward, and quality has always been a strong pillar for us.

That's where we'll be spending a lot of our resources with automation and digitalization.

Thank you. My second question

Let me clarify, Sukrit. The existing plant, there is a level of automation already, but any new plants that are coming up, including one API plant with a different type of differentiated technology in Vizag, this is going to be totally DCS-driven and very few people on the site.

Even that will happen, in addition to paperless documentation.

Good to hear. My second question is specifically to Mr.

Mukesh. With strong cash flows and ongoing expansion into CRAMS and specialty formulations, how do you plan to keep EBITDA margins steady while also funding new investments?

From a financial process point of view, how will you handle the working capital more efficiently, manage currency risk on export revenues, and use digital tools to control costs so that ROE and balance sheets remain strong in the near medium term? Thank you.

Thank you, Sukrit. It's a multi-loaded question.

EBITDA improvement, of course, with a good mix of formulation, getting into larger complex generics, gross margin to EBITDA margin will continue to improve, and thereby, of course, cash flow from operation will be positive quarter-on-quarter. At the same time, with the increased sales, there will be investment in working capital.

At the same time, we are seeing that how we steady state at CCC days, even with the new launches and increase in inventory requirement, how we efficiently manage the CCC days so that working capital blockage is lesser with the growth as well. That is a continuous process which we do.

We do on the forex side, which you have asked, we have a good risk management governance, and we hedging also accordingly. If you see, all of this process are effectively managed.

That's how you see ROCE is improving and return on equity is also improving quarter-on-quarter with the business improvement.

Thank you for the guidance, and I wish the entire team best of luck for the next quarter.

We don't give guidance, Sukrit.

It's all going to be positive, that's all we can say, but no guidance.

Thank you. I said

thank you and best of luck for the next quarter.

Thank you.

Thank you.

Thank you, sir. Thank you for giving me the opportunity.

Sir, my question is earlier, management had indicated that paracetamol demand was weak due to elevated inventory. Could you update on the current inventory situation?

Has the excess inventory largely been cleared, sir, and how does the management view the demand outlook for paracetamol over the next few quarters?

Priyanka, you want to take that?

Sure, I can take that. If you talk about the inventory situation, in certain markets, they have eased down, and we are seeing an increase in demand from our key customers in both APIs, PFIs, and finished dosages.

While we are seeing good growth, and that's what facilitated the growth in some of our regions this quarter, we do see some amount of price erosion also in paracetamol. In terms of inventory, the volumes are building back up.

Thank you, ma'am. Thank you.

That was my question, and thank you very much.

Hi. Am I audible?

Yes. Sir, could you outline the expected timeline for meaningful product launches from the Genome Valley facility and share your estimates on the incremental revenue contribution that is anticipated in FY27?

I'll take that question. Yes.

We are going to be launching at least 1 product, if not 2 products, which are existing products from the DDP site to cater to additional demand that we have. These two products will be launched over the next two quarters, 1 to 2 quarters.

We'll start this quarter, and we'll see an incremental revenue coming up. We're also expecting once we have our European approval for that site, then we expect even more numbers to come in.

Okay.

With oncology and high-value segments positioned as key long-term growth levelers, how do you plan to scale capacity, build partnerships, and progress regulatory filings to unlock their potential?

If you look at the 3 baskets that we have mentioned in our investor presentation, sequentially, even if you look at the R&D filings in order of how they have changed over time, you'll see that the percentage of complex generics, which is where oncology, CNS, and other products come into play, they have sequentially grown. We plan on filing a certain number of products more inclined towards complex generics in the future, while integrated generics remain a core area of focus as well.

Okay. Thank you.

Thank you so much.

Hello. Am I audible?

Yes.

Yes, you are.

Hi. Good evening.

Actually, I joined a little late. I had a question regarding the controlled substances that are emerging as a key growth driver in the US market.

Could you provide a greater visibility on the pipeline, the expected launch timeline, and can you share how the management anticipates this product will contribute to your earnings for the next 2-3 years?

I'll take that question also. When somebody, I'm sorry, I forget the name, but somebody spoke to me about it in the past couple of minutes.

I mentioned that we should look at it as integrated generics, complex generics, and others. CNS, ADHD, and controlled substances are a part of the complex generics range.

We have about 8-9 products in the market, 5-6 out of which we are amongst the top 3, if not number 1 in the market today. Going forward, as immediate launches, well immediate launches meaning within the next year, year and a half, we have about 3 launches, 3-4 launches, and they will contribute to a very meaningful percentage of our overall growth story.

Got it. Also regarding this tentative approval for amphetamine, could you elaborate on the strategic importance of this molecule, particularly in the terms of potential revenue contribution?

And I don't want to get, yeah, man, I can't give, sorry, please finish your question.

No, no, no, thank you.

It is a very important, very, very important product for us from a strategic perspective because it reinforces our strategy of filing limited-competition products to be able to give patients with ADHD immediate access to product by launching generics that are early to the market. From a manufacturing and development perspective, these are difficult products.

Some of the products have been in the market, but this particular product, well there has been 1 generic for a long time, but others have not been able to develop, file, and get approval for this product because of the complexity involved. Overall, it is a very good product that fits exactly within the pipeline that we have envisaged for ourselves, and it will contribute to a very meaningful amount going forward.

Got it. Thank you and best of luck.

Thank you.

On behalf of the entire leadership team, I would like to thank all our shareholders, analysts, and participants for taking the time to join us today. We value your insights and your continued trust.

This brings our call to a close. Thank you and have a wonderful evening.

Thank you,