Neuland Q2: consolidated PAT -47% YoY to ₹51.6 Cr on 13% revenue decline, margins compress

Neuland's consolidated Q2 FY27 print reversed sharply from the Q1 FY27 blowout (+116% YoY revenue, +962% YoY profit) that had set the bar. Revenue came in at ₹449.66 Cr, down 12.6% YoY (₹514.27 Cr) and down 29.9% QoQ (₹641.58 Cr); PAT fell to ₹51.63 Cr, down 46.7% YoY (₹96.85 Cr) and 65.0% QoQ (₹147.67 Cr), with EPS at ₹40.24 versus ₹75.49 a year ago. This missed our pre-result preview range of ₹550-600 Cr revenue and 18-22% NPM outright — actual NPM came in at 11.5%. No exceptional or one-off items are reported in the P&L on either basis, so this is a straight operating miss, not a one-off-driven swing; standalone and consolidated PAT differ by under 1%, telling the same story.

The squeeze sits on the cost lines, not materials: OPM compressed to 23.4% from 30.3% YoY and 34.7% QoQ, and NPM to 11.5% from 18.8% YoY and 22.7% QoQ. Employee costs rose 26.8% YoY to ₹101.76 Cr and manufacturing expenses rose 25.8% YoY to ₹57.80 Cr even as revenue fell — a cost base that didn't flex down with lower volumes, consistent with ramp-up costs from new CDMO/peptide capacity (the peptide manufacturing module went operational September 15) hitting the P&L ahead of revenue, which management itself has said will only see "commercial uplift from FY28 onwards." Read that way, the pullback toward the ~23-25% OPM band management had flagged as the post-normalization level (versus the FX/mix-boosted 35.5% cited last quarter) was broadly signalled; the YoY revenue decline against the company's own 18-20% long-term and ~20% FY27-28 growth aspiration was not, and counts as a miss on guidance.

The stock went into the print at ₹19,394, down 9.8% over the past month of trading.

No external Q2-specific consensus could be found — FY2027 full-year analyst consensus stands at roughly ₹2,450 Cr revenue and EPS ₹373 (unchanged from the figures cited in our pre-result preview), so the only like-for-like benchmark is our own preview, which this quarter missed on both revenue and margin. H1 FY27 cumulative revenue is still up 35.2% YoY (₹1,091.23 Cr) and PAT up ~80% YoY (₹199.30 Cr) purely on Q1's strength, underscoring that Neuland's CDMO/API revenue recognition is lumpy quarter to quarter. On the regulatory side, the USFDA Unit 3 inspection that drew one observation on August 14 was closed October 14, clearing a watch item we'd flagged pre-result. The board simultaneously approved a fresh ₹47.1 Cr land purchase (November 3, funded via internal accruals) on top of the ₹126 Cr land deal approved September 7, continuing the elevated-capex posture the preview warned about. H1 operating cash flow swung to +₹361.56 Cr (from -₹36.75 Cr a year ago) on a trade-receivables unwind, but capex-led investing outflow of ₹369.92 Cr (₹260.60 Cr of it direct PPE purchases) left net cash down ₹22.79 Cr for the half.