CORONA Remedies Limited (CORONA) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY '26 Earnings Conference Call of CORONA Remedies Limited. [Operator Instructions] Please note that this conference is being recorded. Before we begin, I would like to point out that this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectation of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand over the conference call to Mr. Amey Chalke from JM Financial. Thank you, and over to you.

Thank you. Good afternoon, everyone. I, Amey Chalke, on behalf of JM Financial, welcome you all to the 2Q and H1 FY '26 earnings call of CORONA Remedies Limited. At the outset, I thank the management of CORONA Remedies for giving us this opportunity to host the call. We are looking forward to have an insightful interaction on the quarterly earnings and the company outlook. Today, from the company, we have with us Mr. Nirav Mehta, Managing Director and CEO; Mr. Ankur Mehta, Joint Managing Director; Mr. Bhavin Bhagat, Chief Financial Officer. We will begin with the remarks from the management team, followed by the Q&A session. I will now hand over call to Mr. Nirav Mehta. Thank you, and over to you, sir.

Good afternoon, ladies and gentlemen. At the outset, I would like to wish everybody a happy and healthy 2026. Thank you all for joining us on the Q2 and H1 FY '26 earnings call of CORONA Remedies Limited. Along with me on the call, I am joined by our Joint Managing Director, Mr. Ankur Mehta; our CFO, Mr. Bhavin Bhagat; along with senior management team and SGA, our Investor Relationship partner. We have uploaded our results, press release and investor presentation on the stock exchanges and on company's website. I hope everybody has had the opportunity to go through the same. 2025 has been a milestone year for CORONA. Company got listed on stock exchanges on 15th of December 2025. I would like to take this opportunity to thank the entire team at CORONA, all stakeholders and investors who believed in our growth journey and continue to show faith in our business. As this is the maiden earnings call, I would like to begin by giving you all a brief fundamental overview of CORONA Remedies Limited. CORONA, we have a core philosophy of CCC. First C stands for Culture. We truly believe that whatever today we are in this 21 years has been fundamentally based on the first C that is culture. We believe in ruthless execution as a part of culture. We believe internal promotion and adaptability, humbleness, these are the points where we differentiate our company from the other companies as far as culture is concerned. The second C is Courage. We have developed a courage of accepting the mistakes and improvising. At the same time, we will do -- we will believe in robust inorganic and in-licensing opportunity as a part of courage. Culture, Courage and the third C is Commitment. We are committed for global quality products, value creation for the stakeholders and long-term sustainable growth. CORONA Remedies Limited, established in 2004 is an India-focused branded pharmaceutical company engaged in the development, manufacturing and marketing of formulation across key therapeutic areas like women's health care, cardio-metabolic, pain management, urology and as well as such as gastrointestinal and respiratory therapies. Approximately 96-plus percent of company's revenues are delivered from the Indian market. Our women's healthcare, CORONA offers a brand across the life-cycle ranging from menarche to menopause, along with the pregnancy, post-pregnancy, pre- and post-menopausal categories. In cardio-diabeto, the company offers brand across various stages of the treatment from insulin resistance, pre-diabetic to diabetic and diabetic-related complications, along with cardiac disorders such as hypertension, dyslipidemia and ischemic heart disease. In the pain management, CORONA offers a diversified portfolio of formulation across multiple dosage forms, including oral tablet and capsule, topical sprays and ointment and parenteral injectable preparation indicated for the management of pain associated with musculoskeletal spasm and neuropathy. In urology, CORONA has a brand offering from multiple disorders such as BPH, benign prostate (sic) [ prostatic ] hyperplasia, overactive bladder, urinary tract infection and stone management. In the month of July 2025, CORONA has acquired 7 brands trademarks from Bayer Zydus Pharma. We shall leverage brand equity and knowledge transfer of the 7 trademarks -- 7 brand trademarks and launch its line extension as per the market need. Let us talk about the 7 brand trademarks. The first is Noklot and Noklot CV. By this trademark -- brand trademark, CORONA is going to enter in INR 1,500-plus crores anti-platelet market. Out of 7, one is Noklot, 3 products are from the infertility Fostine, Menodac and Ovidac and 2 from the women's health care -- 3 in the women's health care, 5 Vageston and [indiscernible]. With this initiative, CORONA will grow invested and expanded in a disciplined manner. CORONA is also creating a diversified product portfolio, both organically and inorganically. Today, we have a portfolio of 70-plus brands with prominent brands like B-29, Myoril, Tricium, Cortel, Obimet, et cetera. We have 38 brands today having annual sales more than INR 10 crores with many of other brands ranking amongst top 5 in their respective categories. In the past few years, we have consistently outpaced the Indian pharmaceutical market, growing at more than 1.5x the IPM. As per pharma trade data, CORONA is #1 fastest-growing pharmaceutical company amongst top 30 pharma companies as per MAT September '25 data. An important and differentiating factor driving our overall growth is volumes. CORONA's healthy volume growth trajectory is on back of our focus on the chronic and semi-chronic segment, which contributes approximately 70% plus of our total revenues. Along the journey, we have also executed strategic brand acquisition and in-licensing arrangements to address therapy gaps in our portfolio and to establish complementary capabilities such as backward integration, marketing arrangements and diversified product offerings. Our track record with acquired brands has been strong, having acquired brands from giants like Glaxo, Abbott, Sanofi, et cetera. We have been successful in scaling those brands considerably. And the similar line, we are hoping the great outcome with Zydus Bayer acquisition, too. Apart from the brand acquisition, we also have in-licensing some brands in women's health care and urology therapies from Swiss Giant Ferring Pharmaceuticals, which is a Swiss multinational biopharma company. CORONA is one of the only 3 Indian companies to have a in-licensed any brand from Ferring. Speaking of our manufacturing capabilities, we operate 2 manufacturing facilities in India, one in Gujarat and the other in Himachal Pradesh, Solan City. Both facilities are WHO-GMP certified. Additionally, our Gujarat facility is also EU, Europe GMP certified. We have a total installed annual capacity of 1.65 billion tablets or capsules, 20 million sachets and 10 million bottles across both facilities. This includes capacity of around 400 million tablets and capsules, which was recently commissioned at our Gujarat facility in December 2025. We also operate 2 R&D centers, both of which are located within the 2 manufacturing facilities, respectively. Our R&D centers are approved by Department of Science and Industrial Research. With respect to procurement and supply chain management, CORONA maintains a well-diversified base of API and excipient suppliers. In line with its focus on backward integration and support chain security, the company has also invested in La Chandra Pharma Lab, which operates an EU-GMP and WHO-GMP certified hormonal API manufacturing facility in the state of Gujarat. Following this investment, La Chandra supplies hormone API to Gujarat under a right to first refusal arrangement and develop specified APIs, enabling enhanced backward integration across CORONA manufacturing and R&D operations. With respect to our distribution and sales capabilities, CORONA adopts a differentiated strategy focused on the middle of pyramid. The company targets specialist and super specialist doctors through the strategic development of marketing and distribution team across urban and semi-urban market, which together account for the largest share of Indian pharmaceutical industry. By strengthening our field force in this market and maintaining a clear focus on specialist and super specialist, CORONA is well positioned to capture value in the middle of the pyramid and strengthen overall marketing positioning. Our pan-India presence, supported by an expanding network of distributors and medical representatives enables deeper engagement with medical profession and hospitals, driving improved market presentation and reinforcing our positioning within the Indian pharmaceutical market. While we have considerable presence in the Western market, including Gujarat, Maharashtra, Goa, Madhya Pradesh and Chhattisgarh, we are also augmenting our footprint in other regions simultaneously. CORONA is led by an experienced and dynamic leadership team. All members of the senior leadership come with multi-decadal experience in the respective field of experience. Apart from technical capabilities, understanding of the industry and operating environment and business acumen, CORONA has consistently maintained strong financial prudence and commercial discipline. We have given equal attention to revenue and profitability, resulting in speedy growth and stable margins. Cash flows have been cornerstone of our journey and will continue to be so on. We have strong track of EBITDA to OCF conversions, which has enabled us to reinvest for growth over the past 2 decades. Owing to our disciplined cash flow generation, capital allocation and speedy and steady profitability, our return ratios has been healthy. We are a net cash surplus company. Going forward, our intent and strategy is to increase our market share across our key therapies areas by focusing on chronic, sub-chronic segment, offering products across the life-cycle of a patient. The strategy is primarily focused on launching new products that address unmet patient needs within existing therapeutic areas. By identifying gap in patient care and unmet medical needs, we aim to introduce brand line extensions that cater to evolving therapeutic landscapes. Apart from growing organically, brand acquisition and in-licensing arrangements remains a key growth driver for CORONA. We are also intensifying our engagement with specialist, super specialist prescribers in metro, semi-metro urban and semi-urban caters through our medical representative network to enhance our presence in high-value therapeutic segment. In addition to consolidating our presence in existing therapy areas, we are also strategically expanding our presence in additional therapeutic areas, leveraging existing brand equity and market positioning. We are currently catering to roughly 1/3 of the Indian pharmaceutical market, providing considerable opportunity to expand into additional therapeutic areas such as infertility, nephrology, CNS, oncology, dermatology, so on and so forth. Given our diversified and expanding product portfolio, healthy brand strength, wide and growing marketing and distribution network, experienced leadership and financial discipline, we are on track to deliver 15% -- CAGR 15% revenue growth and 20% PAT or EPS growth for next 3 to 4 years. I would -- before handing over to CFO, Bhavin Bhagat, on the financial number, lastly, let me touch upon the very important point on the ESG. ESG is Environment, Social and Governance responsibility. On and above growth in revenue and profitability, we are equally committed for ESG too. As far as environment is concerned, existing solar power plant of 1.3 megawatt at Bhayla plant and investment in 4.25 megawatts in upcoming solar park spreaded over 11.9 acres, which will save significant electricity cost. Protection of environment by tree plantation, Effluent Treatment Plant, ETP at Bhayla plant for achieving 0 liquid discharge. Yes, you heard right, 0 liquid discharge. Social responsibility, financial assistance to young talented for promotion of sports and education, blood donation camps organized by head office and manufacturing facilities, investing in employee training increased by 50% and promoting gender equality, we have 40% of total workforce at Solan Plant are female employees. As far as governance is concerned, the World Bank Group awarded the CORONA with EDGE Advance Certificate recognizing the company for energy and water saving measures. We have A+ credit rating, EU-GMP certified plant, One World One Quality and -- and we are working with the QR code technology for product counterfeiting on the strip. This is the brief on ESG. I would now like to hand over the call to our CFO, Mr. Bhavin Bhagat, to take you through financial and operational performance. Thank you, and over to you, Bhavin Bhai.

Thank you, Nirav bhai. Firstly, a warm welcome to everyone to our Q2 and H1 FY '26 earnings call. Before I take you through the financial performance, let me update you the premise of sharing Q2 and H1 FY '26 results in the month of Jan '26. As per the SEBI regulation, when a company gets listed, they need to publish the results of previous quarter within 21 days from the date of getting listed. As we got listed on 15th December, we need to publish the results of previous quarter, that is Q2 FY '26 within 21 days, we have published our results within the stipulated time. Now I will take you -- let me take this opportunity to take you through the financial performance for the quarter and half year ended 30th September 2025. Coming to the quarterly performance first. The revenue for Q2 FY '26 stood at INR 361 crores with a growth of 15% Y-o-Y with India business contributing to 96.5% of its total revenue. EBITDA stood at INR 78.5 crores, reflecting a growth of 17.4% on a Y-o-Y basis, whereas the EBITDA margins improved by around 40 bps and stood at 21.7%. Profit after tax stood at INR 52 crores compared to INR 43 crores in Q2 FY '25, reflecting a growth of around 22% on a Y-o-Y basis. Speaking of our H1 FY '26 performance, revenue for H1 FY '26 stood at INR 708 crores compared to INR 605 crores in H1 FY '25, reflecting a growth of 17% on a Y-o-Y basis, with India business contributing to 96.4% of its total revenue. EBITDA for H1 FY '26 grew by 27.5% on a Y-o-Y basis and stood at INR 148 crores, whereas the EBITDA margin has seen a healthy improvement of around 170 bps. EBITDA margin stood at 20.9%. Profit after tax for H1 FY '26 stood at INR 98.5 crores compared to INR 73 crores in H1 FY '25, reflecting a strong growth of 35% on a Y-o-Y basis. On the return ratio front, our annualized ROE for H1 FY '26 stood at 31.1%, whereas our annualized ROCE for H1 FY '26 stood at 49.7%. OCF to EBITDA stood healthy at 76.5% whereas last but not the least, the net working capital days stood at the best of the class of 23 days. With that, I would like to open the floor for questions.

[Operator Instructions] We take the first question from the line of Alankar Garude from Kotak Institutional Equities.

Congrats to the team on the listing as well as the good performance in the second quarter. Nirav bhai, you have mentioned about the fertility segment and wanting to grow further in this segment. You also spoke about it in your opening remarks. Can you comment a bit about what exactly is your presence right now within the fertility segment when we talk about infertility specialists as well as the IVF focused hospitals, which is what you have mentioned in the presentation? And how exactly do we plan to grow further in this segment?

Yes. Alankar bhai, as you -- I think so as you know that we are amongst top 5 or 6 companies in the women's health care portfolio. We have been available in menarche to menopause all the product means from starting from menarche, pregnancy care, pre-pregnancy, post pregnancy care, we have been available everywhere. But as far as our infertility segment is concerned, we are meeting the doctors facility but not been available with a core infertility portfolio. We have acquired with Bayer Zydus about a few products in the segment on infertility like Fostine, Menodac, Ovidac and Luprofact. We are under process of validation as of now. And I think so in the few months of time from now, we are going to launch a separate team for infertility and entering in the infertility market with this products, specialized team of about less than 50 people across the nation who are going to meet only an infertility specialist. We are under development. I think so within a couple of months, we are going to launch and then we are strengthening our women's healthcare position by infertility product range also.

Got it, sir. So basically, would it be fair to say that as of now, our presence in this space is quite limited. The Bayer Zydus portfolio acquisition does help. But currently, I mean, it's just a fresh start for us as far as infertility specialist is concerned?

So Alankar bhai, you are right. But as far as infertility doctors are concerned, they're also treating a pregnancy. They are also treating pre- and post-pregnancy and the menarche and menopause issues also. So we have been available with that doctor in that particular portfolio. But as far as core infertility portfolio is concerned, we are now going ahead with the Bayer Zydus acquisition products. We are under development, and we will launch in the core therapy of infertility within next 3, 4 months of time.

Got it. Got it, sir. Secondly, how would you describe your current position in the newer therapeutic areas of nephro, CNS, onco and derm? And where shall we expect these therapies to be in terms of scale for us over, say, in the next 3 to 5 years?

So as far as CORONA is concerned, today, we have been available in women's healthcare, cardio-metabolic, urology and pain management. We are working to develop 6, 7 therapies today like infertility, spine, rheumato, CNS, dermatology, gastrointestinal. And what we have decided we'll unlock this each therapy at the right time, starting with the infertility in this year. Slowly and gradually, we will unlock each therapies in next 3 to 4 to 5 years of time. And whenever we launch and enter into the new therapy, our aim is to take the leadership position in that therapy and then focus on to the other therapy to grow. At the same time, today, as far as our covered market is concerned, wherever therapies we are, we are about 1.9% market share and that market is growing by 10%, which is about 25% more than the IPM. So we are optimistically positive to grow deeper in the segments where we have been available. And at the right time, we will unlock these therapies, which have been told about.

Got it, sir. And would it be fair to say that similar to our existing therapies, be it women's health or cardio-metabolic, our focus will be more on the specialist and the super specialist segment rather than the GP segment?

Yes, absolutely. So as far as the middle of the pyramid is concerned, a specialist and super specialist, which is the biggest chunk of IPM, Indian Pharmaceutical Market, we have been super focused over there. And whatever therapies we are entering from today to tomorrow to day after, our focus will remain strong on the specialist and super specialists.

Got it, sir. And one final question, if I may. See, broadly, if I look at our R&D spends have been relatively lower compared to what we see for other similar companies. And with us now looking at newer therapeutic areas over the next few years, is there anything different which we need to do on the R&D side, whether it be beefing up our team or increasing our investments? Anything which you would like to highlight there, sir?

So as far as R&D is concerned, it's really been a very, very important segment for any pharmaceutical -- growing pharmaceutical industry at the time of launching new product, validations, bioequivalent, so on and so forth. As our revenue grows, I think for the percentage contributes CI to the R&D will remain less than 2%. And today, about 100-plus scientists are working in R&D. We will expand a little, but if we grow on the revenues like 15% plus, I think for that percentage, less than 2% will remain less than 2%.

[Operator Instructions] We take the next question from the line of [ Yug Modi from AP Capital ].

Sir, am I audible?

Yes.

Sir, I just had 2 questions. Sir, I wanted to understand the Indian brands approach in a slightly more detailed manner. And how does it help us in our overall growth? Some color on it would be helpful.

I couldn't get the question, sir.

Sir, I just wanted to understand our Indians brand approach in a slightly more detailed manner. And how does it help in our overall growth?

No. So see, look at the Indian pharmaceutical market, I think so it's about INR 232,000 crore market growing at the speed of about 8.5% on year-on-year. And this -- I'm talking about INR 232,000 crores, this whole market is about prescription-based branded formulation market. Now how do you differentiate brand from a product? To just give you a simple understanding about a toothpaste to Colgate or a toothpaste to Close-Up or a toothpaste to Pepsodent is the market from generic to branded. Brand gives a flavors, a quality adherence and the confidence in the set customers' mind. We have been available in 4 therapies like women's healthcare, cardio-metabolic, urology and pain management. And we try to launch the product with little niche or little differentiated manner. Even a classical example of our #1 brand, B-29, which is about INR 150 crore plus brand, B-29. It seems to me it is in a vitamin mineral, but it is the brand for neuro -- diabetic neuropathy management. So whenever we have launched this brand, we have launched this brand in the science part of it that whatever ingredients this brand has, has been helping a diabetic patients to delay the neuropathy management. So we try to take the road of a little differentiated manner, try to put a science into it, an unmet need of the patients and the medical fraternity. And then on the basis of science and consistency, we try to make that product convert into the brand. So I think so if you look at the India, it's about branded formulation market. And if you just try to understand, it seems only a branded formulation market, but it is with the complex supply chain management. And hence, if you look at this 8.5% growth, hypothetically, it is INR 2,32,000 crore market, 8.5% growth has been bringing whatever crore on the table every year. About 79% of that market has been diversified from the top 50 company and the rest has been diversified between 51 to 1,300, 1,400 rank company. So it's been a market where more or less this become bigger, that story goes on because of the complex supply chain and the brand management phenomena.

Okay, sir, lastly sir, can you just highlight the strategy for our international business, like which are the current geographies where we have a considerable presence? And how do we plan to enter newer geographies? How different is our product portfolio compared to India business?

So as far as international is concerned, today, we have about 3.5% contribution with the international business. But we are going ahead to develop a hormonal complex generic female hormonal product portfolio with help of the La Chandra as a backward integration, a forward integration block on the hormones, we already set in Ahmedabad and its EU-GMP approvable plant, which is going to kick start by the end of the Q2 or the early of Q3 of FY '27. And once we start that plant will develop simultaneously by developing. And at that time, we are -- we will develop dossiers in the women's healthcare. And the theme for international market remain think hormone, think CORONA. It's absolutely a niche in this segment. So we will go worldwide, except U.S. and Japan as of now to start with rest of the world, Europe, U.K., Australia, New Zealand, Brazil, Mexico, Asia and CIS Russia with the product portfolio. And we will add general category products also from our plant into the international kitty. We are quite hopeful that with this in a couple of years, we can have our CI of around 8%, 9% higher single-digit CI with interest of business too.

We take the next question from the line of Aditya Chheda from InCred Asset Management.

My question is pertaining to the Slide 17...

Aditya, are you there? Since there is no response, we will move on to the next question, which is from the line of Rahul Jeewani from IIFL Capital Services Limited.

Sir, can you talk about the productivity of the PCPM for the domestic business, which, let's say, versus some of the other chronic heavy peers is slightly on the lower side. So how do you see this productivity ramping up for us over the next 3- to 4-year period? And can you also talk about how the productivity is between some of your mature divisions in India and some of the new divisions, which you might have added over the past, let's say, 2- to 3-year period?