Kwality Pharma shares hit 20% upper circuit on strong PAT growth; revenue breakdown explained

Synopsis: Pharma stock surged 20 percent to Rs 1,377 after Q3 FY26 results, with 46 percent YoY revenue growth and 87 percent net profit rise, driven by injectables.

The shares of this company, which is a manufacturer of several different types of pharma products, including complex molecules across all dosage forms, including niche Biologics, came into focus after strong Q3 results with Revenue up 96 percent YoY.

With the market capitalization of Rs 1,413 crore, Kwality Pharmaceuticals Ltd’s shares on Thursday made a day high of Rs 1,377 per share, up by 20 percent from its previous day’s closing price of Rs 1,147.50 per share. The share trades at an undervalued P/E of 28.8x, slightly lower than the industry P/E of 29.8x.

Results Highlights

QoQ View: The revenue from operations grew by 10.89 percent to Rs 123.44 crore in Q3 FY26 from Rs 111.31 crore in Q2 FY26. Accompanied by a PBT growth of 21 percent to Rs 22.35 crore in Q3 FY26 from Rs 18.45 crore in Q3 FY 26 and net profit growth of 13.39 percent to Rs 16 crore in Q3 FY26 from Rs 14.11 crore in Q2 FY26.

YoY View: The revenue from operations grew by 46 percent to Rs 123.44 crore in Q3 FY26 from Rs 84.40 crore in Q3 FY25. Accompanied by a PBT grew by 96 percent to Rs 22.35 crore in Q3 FY26 from Rs 11.39 crore in Q3 FY25, and net profit growth of 87 percent to Rs 16 crore in Q3 FY26 from Rs 8.53 crore in Q3 FY25, resulting in an EPS growth of 87.8 percent to Rs 15.42 per share in Q3 FY26

Revenue Segmentation: The company’s revenue mix is heavily concentrated in injectables, which account for 56 percent of total revenue, making them the primary growth and profit driver. Tablets form the second-largest segment at 27 percent, providing strong support to overall sales. Together, injectables and tablets contribute more than 80 percent of total revenue, highlighting a focused product portfolio.

The remaining revenue comes from smaller segments such as liquids and orals (5 percent), capsules (4 percent), creams and ointments (3 percent), and dry syrups (2 percent). Niche categories, including ophthalmic products, sachets, and suppositories, contribute 1 percent each. While individually small, these segments help diversify the product base and reduce dependence on a single format.

Performance driver in Q3: In Q3 and 9MFY26, the company strengthened its presence in regulated markets by initiating supplies to Mexico and South Africa, securing new product registrations, and commercializing prior approvals. Successful EU-GMP, Russian, and Ukrainian audits enabled geographic expansion, while participation at CPHI Milan enhanced global customer engagement and partnerships.

Operational momentum was supported by R&D progress, including successful EPO pre-clinical outcomes and advancement to clinical trials, alongside three new biologics pipeline additions. The company continued 40+ BE programs, completed multiple studies, and advanced capacity expansion in biologics, oncology, and a new hormone manufacturing facility.

Incorporated in 1983, Kwality Pharma manufactures formulations in the form of injectables, tablets, capsules, and syrups. It has one unit each in Amritsar (Punjab) and Kangra (Himachal Pradesh), with a capacity to produce 3.5 million and 8.5 million tablets per day, respectively. The Kangra unit commenced production in October 2008.

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