RPG Life Sciences Shares Crash 11% After Q3 Results; Check What Went Wrong

Synopsis: Shares of RPG Life Sciences Limited fell 11% after Q3 FY26 profits declined sharply by 41% QoQ, despite marginal revenue growth, dragged down by an Rs 8.42 crore net exceptional expense linked to labour code-related costs and fire-related adjustments.

The shares of this company, which manufactures and markets formulations (finished dosage forms) and active pharmaceutical ingredients, had its shares crash 11% today after the company reported a decline in its profitability even with a slight increase in revenue.

With the market cap of Rs 3,216.84 crore, the shares of RPG Life Sciences Ltd crashed about 11% and made a low at Rs 1877.20, compared to its previous day closing price of Rs 2099.15, and are trading at a PE of 30.3, whereas its industry PE is at 29.3. 

Q3 FY26 Result

The revenue from operations for the company stood at Rs 180 crore when compared to Rs 173 crore in Q3 FY25, up by about 4 per cent on a YoY basis and on a QoQ basis down by 1 per cent from Rs 182 crore in Q2 FY26.

When it comes to profitability, the company has gone from an Rs 35 crore profit in Q3 FY25 to an Rs 22 crore profit in Q3 FY26, down 37% YoY, and from Rs 37 crore in Q2 FY26, down about 41% QoQ. 

Quarterly Profitability Impacted by Exceptional Items

There was a net exceptional cost during the quarter of Rs 8.42 crores, which had a significant effect on reported profitability even though normal operations remained steady. 

The net expense was mainly attributable to a one-off charge of Rs 11.08 crores as a result of an increase in the actuarial provision for gratuity and leave encashment, in light of the New Labour Codes; this charge was classified as exceptional because it is non-recurring and regulatory in nature. 

This expense was partially offset by a Rs 2.66 crore insurance-related write-back associated with the previous fire at the API plant, resulting in a net exceptional expense of Rs 8.42 crore for the quarter, thereby explaining the decline in reported profits.

RPG Life Sciences Limited is a fully integrated pharmaceutical company, focusing on domestic formulations (71%), international formulations (18%) and APIs (11%), which provides the company with balanced revenue diversification. As a leader in immunosuppressants, the company enjoys a presence in over 50 countries, has 3 manufacturing sites and has a strong branded product range. These competitive advantages provide the company with the skills to sustainably grow its activities in both developed and developing markets.

RPG Group is an Indian diversified conglomerate with an extensive history of operation in the fields of infrastructure, tyres, IT services, pharmaceuticals and energy solutions through businesses like KEC, CEAT, Zensar, Raychem RPG and Harrisons Malayalam. 

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