NATURAL CAPSULES LTD. Q2 FY26 Results

Q2FY26 has been a stable quarter for our capsules business. Demand remained steady, and overall, our performance was in line with the guidance we had shared earlier. However, the key growth triggers, especially related to the HPMC capacity expansion, were temporarily affected due to tariffs imposed on Indian exports to the US. This has hit demand in the US market quite hard. Despite this, we remain on track with our capital expenditure plan and expect to commission the new production line by the end of this quarter. We believe the growth in the capsules segment will pick up once there is more clarity on these tariffs. Were it not for these unforeseen tariffs and their impact on our US business, we would have reported stronger revenue and healthier margins this quarter. On the API front, the challenges persist. After finally obtaining all necessary approvals from the Pollution Control Board, we aimed to ramp up commercial production from Q3. Yet, we have run into technical difficulties scaling up fermentation batches— a complex process where new issues often surface when moving from lab to commercial scale. That said, we are currently navigating through these challenges and remain confident that we will be able to scale up production rapidly once these issues are resolved. FY26 has undoubtedly been a tough year for us. The capsules business was held back by the US tariffs, which affected the growth we expected from HPMC expansion. At the same time, delays in regulatory approvals and technical challenges have pushed back our API plant scale-up timeline. These are factors beyond our control, but they do not define us. We are on the right path and firmly believe that we will emerge from these challenges stronger and deliver better performances in the year ahead.