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SMS Pharmaceuticals Ltd

| Quarterly Financial Results Q3 FY 2025-26

NEUTRAL SENTIMENT

Report Source

⬤7th Feb 26

Summary : SMS Pharmaceuticals reported strong nine-month financial results, approved subsidiary investment, and planned capacity expansion.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Standalone Total Expenses (9M FY26): Rs. 56,547.72 Lakhs.
  2. Consolidated Total Expenses (9M FY26): Rs. 56,513.20 Lakhs.
  3. Cost of Materials Consumed (9M FY26 Standalone): Rs. 39,300.16 Lakhs.
  4. Employee Benefits Expense (9M FY26 Standalone): Rs. 5,848.84 Lakhs.
  5. Standalone Revenue from Operations (9M FY26): Rs. 64,892.36 Lakhs.
  6. Consolidated Revenue from Operations (9M FY26): Rs. 64,892.36 Lakhs.
  7. Standalone Other Income (9M FY26): Rs. 577.94 Lakhs.
  8. Consolidated Other Income (9M FY26): Rs. 577.94 Lakhs.
  9. Investment in subsidiary M/s. SMS Peptides Private Limited.
  10. VKT Pharma Private Limited is an Associate Company (34.83% equity holding).
  11. SMS coLab Private Limited is a wholly owned subsidiary.
  12. Chemo SMS Enterprises SL is a joint venture.
  13. Standalone Net Profit after Tax (9M FY26): Rs. 6,668.85 Lakhs.
  14. Consolidated Net Profit after Tax (9M FY26): Rs. 6,703.37 Lakhs.
  15. Consolidated results include subsidiaries SMS Peptides and SMS Colab, associate VKT Pharma, and JV Chemo SMS Enterprises SL.
  16. SMS Peptides (subsidiary) reported 9M FY26 loss of Rs. 24.08 Lakhs.
  17. VKT Pharma (associate) reported 9M FY26 net profit of Rs. 643.69 Lakhs.
  18. SMS Colab (wholly owned subsidiary) and Chemo SMS Enterprises SL (JV) had no operations.

Corporate Overview

  1. Registered & Corporate Office in Hyderabad, Telangana, India.
  2. Evaluation of financial impact from new consolidated labor codes effective November 2025.
  3. Engaged in manufacturing Active Pharmaceutical Ingredients (APIs) and their intermediates.
  4. Factual and procedural, reporting board decisions and financial outcomes.
  5. Active Pharmaceutical Ingredients (APIs) and intermediates.
  6. Plans for expansion of production capacities in a phased manner.
  7. Installation of additional utility equipment and recovery systems.
  8. Proposed backward integration of Key Starting Materials (KSM).
  9. Approved further investment of up to Rs. 7 Crores in subsidiary SMS Peptides Private Limited.
  10. Expansion of production capacities and installation of utility equipment.
  11. Backward integration of Key Starting Materials (KSM) for existing and new products.
  12. Setting up new production blocks.

Risk Factors

  1. Impact of new labor codes.
  2. Temporary working capital deployment.
  3. New subsidiary has no operations.
  4. Joint venture has no operations.

Key Drivers

  1. Invested 7 Crores in SMS Peptides.
  2. Expanding production capacity in phases.
  3. Backward integration for Key Starting Materials.
  4. Setting up new production blocks.

Auditor’s Report

  1. Unmodified conclusion on standalone un-audited financial results.
  2. Unmodified conclusion on consolidated un-audited financial results.
  3. Auditors do not express an audit opinion on the interim financial information.

Board Commentary

  1. Potential impact of new labor codes on employee benefits measurement.
  2. New labor codes (Code on Wages, Social Security, Industrial Relations, OSHWC) effective November 2025.
  3. Liability recognized in financial results for the quarter ended December 2025.
  4. Approved investment of up to Rs. 7 Crores in SMS Peptides Private Limited.
  5. Capital expenditure for production capacity expansion and KSM backward integration.
  6. Working capital for expanded capacities and operational expenses.

Corporate Governance

  1. Audit Committee reviewed financial results on February 06, 2026.
  2. Audit Committee advised on utilization of preferential issue funds.

Management Discussion & Analysis

Future Strategy

  1. Investing in subsidiary SMS Peptides Private Limited.
  2. Expanding production capacities and backward integration of KSM.
  3. Setting up new production blocks for existing and pipeline products.

Operational Focus Areas

  1. Expanding production capacities and backward integration of KSM.
  2. Managing increased working capital requirements due to expansion.

Performance Drivers

  1. Growth in revenue from operations for nine months ended December 2025.
  2. Strategic investments in subsidiaries and capacity expansion.

Risk Control Measures

  1. Liability recognized for new labor codes; further evaluation pending final rules.
  2. Audit Committee advised re-transferring temporarily deployed funds for project execution.

Critical Risks

  1. Uncertainty regarding full financial impact of new labor codes.
  2. Temporary deployment of preferential issue funds for working capital.