Vijay Kedia Stock Crashes 9% After Net Profit Falls 60% in Q3

Synopsis:- Shares fell 9% after weak Q3FY26 results, as profit dropped 60% to ₹41 crore despite 11% YoY revenue growth to ₹440 crore. Margins narrowed to 18%. Working capital improved to 145 days, while ₹254 crore capex and R&D expansion signal continued long-term growth focus.

The shares of the prominent pharmaceutical drug manufacturer plummeted 9 percent in today’s trading session after the company reported weak Q3FY26 earnings, driven by an increase in operating expenses.

With a market capitalization of Rs 17,529.48 crore, the shares of Neuland Laboratories Ltd were trading at Rs 13,699.30 per share, decreasing around 2 percent as compared to the previous closing price of Rs 13,929.95 apiece.

Q3FY26 Highlights

The shares of Neuland Laboratories Limited have seen significant movement after announcing its financial performance in Q3FY26, in which revenue increased by 11 percent on a year-on-year basis from Rs 398 crore in Q3FY25 to Rs 440 crore in Q3FY26. However, on a Quarter-on-Quarter basis, revenue decreased by 15 percent from Rs 516 crore in Q2FY26 to Rs 440 crore in Q3FY26.

Moreover, net profit decreased by 60 percent on a yearly basis from Rs 102 crore in Q3FY25 to Rs 41 crore in Q3FY26, meanwhile, on a quarter-on-quarter basis, net profit decreased by 59 percent from Rs 97 crore in Q2FY26 to Rs 41 crore in Q3FY26.

In Q3FY26, segment revenue shows a clear strategic shift. The Prime segment contribution has declined steadily, while the Specialty and CMS segments have gained share. CMS now contributes the largest portion at around 61%, followed by Specialty near 11%, indicating a stronger focus on higher-margin and innovation-driven businesses over traditional segments.

Over the last one year, Neuland Laboratories’ operating performance has remained volatile. Operating margin (OPM) declined from around 22% in Dec 2024 to 18% in Dec 2025, despite touching 30% in Sep 2025. Operating profit also fluctuated significantly, reflecting inconsistent cost absorption and uneven quarterly performance during the period.

Commenting on the performance, Mr. Sucheth Davuluri, Vice-Chairman and Chief Executive Officer of the Company, said, “The revenues this quarter are in line with the outlook we envisaged for the year; the product mix within businesses, as well as increased operating expenses, is reflected in subdued EBITDA margins. We continue to see good momentum in the business, which is driving our investments with the long-term in view, ensuring Neuland can take advantage of the number of growth opportunities.”

Further, the company’s working capital improved in Q3FY26, with days of sales reducing to 145 from 155 in Q2, mainly due to lower receivables, indicating better cash flow management. The board approved shifting R&D operations to a larger 140,000 sq. ft. leased facility at Genome Valley, supporting future growth. Meanwhile, capex spending stood at ₹254 crore in 9MFY26, reflecting ongoing expansion investments.

The company has a strong global footprint, with Europe contributing 53% of revenue and North America accounting for 41%. Other regions, such as APAC, MENA, LATAM, Japan, and India, together form a smaller share. With headquarters in Hyderabad and offices in Princeton and Tokyo, it serves customers in over 80 countries.

With more than 40 years of experience, the company has built a solid presence in APIs and development services. It has filed over 995 DMFs globally, including 73 active US DMFs, and offers 100+ APIs across diverse therapeutic areas. Export revenue contributes 89%, supported by 1,218 KL manufacturing capacity.

As of December 2025, a major shareholder, Mukul Mahavir Agrawal & Kedia Securities Private Limited (owned by Vijay Kishanlal Kedia ), holds a total of 5,30,000 equity shares, which amounts to 4.13 percent of its total shares.

Neuland Laboratories is a Hyderabad-based pharmaceutical company specializing in the manufacturing of active pharmaceutical ingredients (APIs) and custom manufacturing services. With over four decades of experience, it serves global innovator and generic companies. The company is known for its strong regulatory track record, technical expertise, and focus on complex, niche molecules.

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