Orchid Pharma Q2 Results Review - Inline Revenue, Gross Margins Come Higher: Systematix

Systematix Research Report

Orchid Pharma Ltd. reported revenue (Rs 2,227 million, up 12% YoY but down 8.9% QoQ) was lower than expectations (3% lower), while operating Ebitda stood at Rs 303 million, up 30.1% YoY but down 6.6% QoQ. Ebitda and net earnings were higher 22% and 33% respectively versus our expectation led by a 250 bps QoQ gross margin expansion.

Revenue growth for the quarter was lackluster, but growth rates should pick up as multiple new commercialization initiatives should start reflecting in financial performance –

1. commercialization of the new oral API facility,

2. Commencement of operations in branded formulation business and

3. commercialization of Enmetazobactam in Europe and India. From a medium to long term growth perspective, 7-ACA and cefiderocol projects remain on track.

However, US and China commercialization is still awaited. Company is also looking to tap into generic ceftazidime / avibactam market outside the US, as it is working on a non-infringing route to gain an early entry.

We tweak our estimates on Orchid Pharma and introduce FY27 estimates. We roll over to September 2026E EPS and recommend a buy with a target price of Rs 1,823 based on 45 times PE Multiple (50x earlier). FY27 earnings estimates include contribution from government incentives which will have limited longevity.

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