Mercury Laboratories Ltd (538964)
Latest quarterly results (Q1 FY27)
In its latest reported quarter, Q1 FY27, Mercury Laboratories' revenue was ₹16.0 Cr (-12.0% year on year, -21.9% on the previous quarter), and net profit ₹0.3 Cr (-69.3% year on year); the operating margin was 7.5%.
| Q1 FY27 (₹ Cr) | Value | YoY vs Q1 FY26 | QoQ |
|---|---|---|---|
| Revenue | ₹16.0 | -12.0% | -21.9% |
| Operating profit | ₹1.2 | -49.5% | -41.6% |
| Net profit | ₹0.3 | -69.3% | -75.8% |
| EPS (₹) | 2.48 | -69.3% | -75.8% |
| Operating margin | 7.5% | — | — |
📢 Recent Corporate Announcements
Mercury Laboratories has announced the appointment of Mr. Sunil Sharma as Head of Department (Injectable Production) effective August 21, 2026. Mr. Sharma brings over 19 years of experience in injection production, having previously worked with firms including Sun Pharma and Intas Pharmaceuticals. He replaces Ms. Seema Salvi, who resigned from the Senior Management Personnel role on August 21, 2026, to pursue other career opportunities.
- Appointment of Mr. Sunil Sharma as HOD (Injectable Production) effective August 21, 2026
- Mr. Sunil Sharma (age ~45) brings over 19 years of injectable production experience
- Resignation of Ms. Seema Salvi as HOD (Injectable Production) effective August 21, 2026
Mercury Laboratories Limited has released a shareholder communication regarding Tax Deduction at Source (TDS) provisions for its final dividend for FY 2025-26. The Board previously recommended a dividend of Rs. 3.50 per equity share (35% of face value Rs. 10), subject to shareholder approval at the upcoming AGM. The company has fixed Monday, September 21, 2026, as the record date for determining shareholder dividend entitlement. Resident and non-resident shareholders must submit requisite tax exemption declarations by the record date to prevent higher tax withholding.
- Dividend recommended at Rs. 3.50 (35%) per equity share of face value Rs. 10 each for FY26.
- Record date for dividend entitlement fixed for Monday, September 21, 2026.
- TDS of 10% applies to resident individuals if dividend payout exceeds Rs. 10,000.
- Standard TDS of 20% applies to non-residents or cases where PAN is invalid or unlinked to Aadhaar.
- Submission deadline for all tax declarations (Form 121, DTAA documents) is September 21, 2026.
Mercury Laboratories reported a marginal 1.2% YoY increase in revenue to ₹18.32 Cr for the quarter ended June 30, 2026. Despite the stagnant top-line, Net Profit grew by 26.8% YoY to ₹1.23 Cr, indicating improved operational efficiency. However, on a sequential basis, revenue declined by 10.4% from ₹20.44 Cr in the preceding March quarter. The company maintained its profitability with an EPS of ₹10.21 for the quarter.
- Revenue from operations stood at ₹18.32 Cr, a slight increase from ₹18.10 Cr in the same quarter last year.
- Net Profit for the quarter reached ₹1.23 Cr, up from ₹0.97 Cr in June 2025.
- Total expenses were contained at ₹16.77 Cr, representing 91.5% of total income.
- Earnings Per Share (EPS) improved to ₹10.21 from ₹8.08 in the year-ago period.
- Quarterly revenue represents approximately 24% of the TTM revenue of ₹76 Cr.
Mercury Laboratories reported a robust Q1 FY27 (ending June 2026) with Net Profit surging 232% YoY to Rs 3.22 Cr, up from Rs 0.97 Cr in June 2025. Revenue from operations grew 10% YoY to Rs 19.94 Cr. Profitability was significantly aided by a spike in Other Income to Rs 1.18 Cr (vs Rs 0.17 Cr YoY) and controlled expenditure. The quarterly EPS of Rs 26.84 is a substantial jump from the previous year's Rs 8.08, representing over 60% of the total TTM EPS in a single quarter.
- Net Profit for the quarter ended June 2026 stood at Rs 3.22 Cr vs Rs 0.97 Cr in the year-ago period
- Revenue from operations increased 10% YoY to Rs 19.94 Cr from Rs 18.14 Cr
- Other Income rose significantly to Rs 1.18 Cr, contributing approximately 27% to the Profit Before Tax
- Quarterly EPS reached Rs 26.84, compared to the full-year FY25 EPS of Rs 26.17
- Total expenses were contained at Rs 16.77 Cr despite the increase in operational scale
Mercury Laboratories Ltd has scheduled a board meeting for July 25, 2026, to consider and approve the unaudited financial results for the quarter ended June 30, 2026. This is a routine regulatory filing as per SEBI (LODR) Regulations. The trading window for insiders has been closed since July 01, 2026, and will remain closed until 48 hours after the results are declared. Investors should look for the actual financial performance data on the scheduled date.
- Board meeting scheduled for July 25, 2026, to approve Q1 results
- Financial results pertain to the quarter ended June 30, 2026
- Trading window closed from July 01, 2026, for insiders
- Trading window to reopen 48 hours after the results declaration
Financial Performance
Revenue Growth by Segment
Operating income remained stagnant at approximately INR 75 Cr over the three fiscals through 2025. Specifically, revenue was INR 75.10 Cr in FY2025, representing a marginal decline of 0.88% compared to INR 75.77 Cr in FY2024. This stagnation was due to certain orders from existing clients not materializing in FY2024 and stable but non-growing demand in domestic and overseas markets.
Geographic Revenue Split
The company has a presence in more than 25 countries directly and 15 countries indirectly. Key export markets include semi-regulated regions such as Guatemala, Sri Lanka, Myanmar, Africa, USA, Afghanistan, and the Philippines. While specific percentage splits per region are not disclosed, exports are a primary driver for product reach expansion.
Profitability Margins
Profitability showed a downward trend; PAT margins declined from 7.46% (INR 5.65 Cr) in FY2024 to 4.19% (INR 3.14 Cr) in FY2025. This 43.8% drop in PAT margin was driven by increased employee costs, higher selling expenses, and only partial pass-through of raw material cost increases to customers.
EBITDA Margin
Operating margin declined to 9.34% in FY2025 from 12.2% in FY2024 (a 23.4% decrease). The margin has fluctuated over the last five fiscals due to volatility in Active Pharmaceutical Ingredient (API) prices and selling expenses, impacting the core profitability of the formulations business.
Capital Expenditure
The company is undertaking debt-funded capital expenditure for setting up a new manufacturing unit for medicines, ampules, and injections during FY2025 and FY2026. While the exact total INR Cr value is not specified, the debt-funded nature of this capex is expected to moderate the financial risk profile slightly, though gearing remains low at 0.08 times.
Credit Rating & Borrowing
The company maintains a 'CRISIL BB+/Stable' rating for its INR 3 Crore Fixed Deposits (reaffirmed in July 2024 and July 2025). Borrowing costs are reflected in an interest coverage ratio which declined from 24.14 times in FY2024 to 12.81 times in FY2025 due to increased debt servicing requirements for capex.
Operational Drivers
Raw Materials
Active Pharmaceutical Ingredients (APIs) are the primary raw materials. Their specific percentage of total cost is not disclosed, but their price volatility is cited as a major factor causing the operating margin to drop from 12.2% to 9.34% in FY2025.
Capacity Expansion
Current operations run through two plants: Unit 1 in Vadodara and Unit 2 in Jarod (22 km from Vadodara). The company is expanding by setting up a new injection manufacturing unit for ampules and injections, with commissioning activities spanning FY2025 and FY2026 to cater to international and domestic demand.
Raw Material Costs
Raw material costs are highly volatile due to the nature of API procurement. In FY2025, partial cost pass-through of these materials contributed to a margin compression of nearly 286 basis points. Procurement strategies involve managing costs in a highly regulated pricing environment (NPPA).
Manufacturing Efficiency
Plants are described as environment-friendly and energy-saving with state-of-the-art technology. Specific capacity utilization percentages are not disclosed.
Logistics & Distribution
The company utilizes a strong team of medical representatives and a wide distribution network across India to support its paediatrics and gynaecology segments.
Strategic Growth
Growth Strategy
Growth is targeted through the commissioning of a new injection manufacturing unit, registering new products in established international markets, and entering new geographic regions. The strategy focuses on high-margin segments like paediatrics and gynaecology to improve cash accruals, which are expected to exceed INR 6 Cr per annum.
Products & Services
Pharmaceutical formulations including oral liquids, tablets, dry powders, ampules, and injections specifically targeting therapeutic compliance in paediatrics and gynaecology.
Brand Portfolio
K-Win, K-Stat, T-Stat, Merizyme, and Promolact.
New Products/Services
New product launches in the injection and ampule categories are expected following the completion of the new manufacturing unit in FY2026.
Market Expansion
Targeting expansion in international markets including the Philippines, Afghanistan, and various regions in Africa and Central America (Guatemala).
External Factors
Industry Trends
The pharmaceutical industry is evolving with stricter WHO-GMP compliance requirements and pricing controls. MLL is positioning itself by upgrading to state-of-the-art, energy-saving plants and diversifying into injectable formulations to move up the value chain.
Competitive Landscape
The company operates in a fragmented and highly competitive market, necessitating long credit periods (125 days receivables) to maintain its market position against other formulation manufacturers.
Competitive Moat
The moat is built on the promoter's 50-year industry experience and established brand presence (e.g., K-Win). Sustainability is supported by WHO-GMP accreditations which act as a barrier to entry for smaller players in the export market.
Macro Economic Sensitivity
Highly sensitive to pharmaceutical industry regulations and government healthcare spending. Operating income is susceptible to changes in state and central government policies regarding drug quality and distribution.
Consumer Behavior
Demand is driven by the essential nature of paediatric and gynaecological therapeutic medicines, which provides a stable revenue base of ~INR 75 Cr despite macro headwinds.
Geopolitical Risks
Exposure to semi-regulated markets like Afghanistan and Myanmar presents geopolitical and regulatory risks that could disrupt the distribution network or delay product registrations.
Regulatory & Governance
Industry Regulations
Operations are strictly governed by the Central Drugs Standard Control Organisation (CDSCO) and the National Pharmaceutical Pricing Authority (NPPA), which control drug approvals, clinical trials, quality, and pricing for critical drugs.
Environmental Compliance
The company operates 'environment-friendly' plants in Vadodara and Jarod. Specific ESG compliance costs are not disclosed.
Risk Analysis
Key Uncertainties
The primary uncertainty is the successful ramp-up of the new injection unit and the volatility of API prices, which could further impact margins (already down to 9.34%). Regulatory changes in export markets also pose a risk to the 40+ country reach.
Geographic Concentration Risk
Significant portion of revenue is derived from exports to semi-regulated markets, though specific % concentration per country is not provided.
Third Party Dependencies
Dependency on API suppliers is high; price fluctuations in these raw materials directly impact the bottom line due to limited pricing power.
Technology Obsolescence Risk
The company is mitigating technology risks by investing in a new 'state-of-the-art' injection manufacturing facility to replace or augment older production lines.
Credit & Counterparty Risk
Receivables quality is a concern as they stretched to 125 days in FY2025 from 106 days in FY2024, indicating a high credit risk exposure to maintain sales volume.
