Gurugram-based Morepen Laboratories has posted its second straight quarter of record numbers, with a fast-scaling contract development and manufacturing (CDMO) business reshaping the earnings profile of a company long known for its active pharmaceutical ingredients (APIs) and home diagnostic devices.

For the quarter ended 30 September 2026 (Q2 FY27), sales revenue rose 81 per cent year-on-year to ₹755 crore, according to the company’s results release dated 27 October. EBITDA climbed 273 per cent to ₹132 crore, lifting the EBITDA margin by nearly 900 basis points to 17.45 per cent, while profit after tax more than doubled, up 117 per cent to ₹89 crore.

CDMO moves from validation to commercial scale

The standout line is CDMO. Revenue from the segment jumped to ₹253 crore in Q2 from ₹58 crore in the preceding quarter, as Morepen’s previously announced ₹825 crore global CDMO mandate entered regular commercial supply. CDMO now accounts for 52 per cent of the company’s combined API and CDMO revenue, and contributed ₹311 crore over the first half.

Exports were the other big driver, rising 131 per cent to ₹397 crore for the quarter. For H1 FY27, exports more than doubled to ₹654 crore and now make up roughly half of total sales. First-half revenue grew 57 per cent to ₹1,330 crore, with EBITDA up 243 per cent to ₹220 crore and PAT up 177 per cent to ₹145 crore.

“CDMO has moved into meaningful commercial scale, our API portfolio is becoming more global and higher-value, and Medical Devices continues to grow strongly,” said Sushil Suri, Chairman and Managing Director. He added that crossing ₹200 crore in half-yearly EBITDA gives the company a stronger base to invest in capacity and capability.

Capacity heads to 800 KL; first US ANDA filed

Managing Director Sanjay Suri said the first phase of capacity expansion has been completed ahead of schedule, taking API and CDMO reactor capacity from about 535 KL to 614 KL. Civil work has begun on the next phase towards 800 KL, targeted for completion by Q2 FY28. The company is also building capability in high-potency APIs and new technologies while pursuing further CDMO development and manufacturing opportunities with global pharma customers.

On the regulatory front, Morepen submitted its first US abbreviated new drug application (ANDA) during the quarter, for Sitagliptin Tablets USP, marking a step into finished-dosage filings for regulated markets.

A shifting API mix and a growing devices franchise

Within its traditional API business, exports contribute about 76 per cent of revenue, and newer molecules rose to 25 per cent of API revenue in H1 FY27 from 14 per cent a year earlier. The medical devices business, built around blood glucose and blood pressure monitoring, grew 65 per cent to ₹208 crore in Q2, supported by an installed base of around 20 million glucose meters and annual strip volumes of about 500 million.

Balance-sheet metrics also improved: trailing return on capital employed rose to 18.8 per cent from 9.4 per cent in FY26, receivable days fell to 49 from 66, and debt-to-equity stood at a modest 0.23x.

Why it matters

Morepen’s quarter is another data point in a broader shift across Indian pharma, where mid-sized API makers are using CDMO contracts, regulated-market filings and capacity build-outs to move up the value chain. Execution on the 800 KL expansion and the pace of new CDMO wins will be the metrics to watch over the coming quarters.

Image: Morepen Laboratories CDMO facility (courtesy Morepen Laboratories).

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