Granules India Q2 FY27 slides: record revenue amid margin pressure

Granules India Limited reported Q2 FY27 earnings on November 2, 2026, achieving record revenue of ₹15,600 million, marking a 20% year-over-year increase. Despite this strong top-line growth, the pharmaceutical manufacturer's stock declined 2.27% to $820.7 after investors considered margin compression due to elevated freight costs and new FDA observations at the Gagillapur facility.

Gross margins contracted 134 basis points year-over-year to 64.4%, driven by geopolitical tensions in West Asia that inflated input and logistics expenses. Chairman and Managing Director Dr. Krishna Prasad Chigurupati acknowledged the challenges, noting revenue surpassing ₹1,500 crore and EBITDA of ₹338 crore, despite operational pressures.

The company successfully concluded a US FDA audit at Gagillapur with 11 addressable observations, none concerning data integrity or cross-contamination. Granules' growth drivers include robust North American sales (72% of total sales) and a diverse product portfolio, with complex generics accounting for 49% of Finished Dosages revenue.

The company's capital structure shows significant improvements, including a net cash position of ₹8,280 million in Q2 FY27 versus net debt of ₹1,012 million in Q1 FY27, and a ROCE that increased by 138 basis points year-over-year to 17.6%.