Goldman Sachs-Held CRDMO Stock Jumps 11%; Management Expects Stronger H2 on New Capacity Ramp-Up

Sai Life Sciences is expanding its contract research, development and manufacturing organisation platform as global pharmaceutical customers increasingly seek integrated discovery, development and manufacturing partners. The company reported consolidated revenue from operations of Rs 659 crore for the second quarter of FY27, up 23 per cent YoY, supported by growth across its contract research organisation and contract development and manufacturing organisation businesses.

Profit after Tax rose 17 per cent YoY to Rs 98 crore, while earnings before interest, tax, depreciation and amortisation increased 20 per cent to Rs 187 crore. The EBITDA margin was 28 per cent, compared with 29 per cent a year earlier, indicating that higher operating costs and investments continued to absorb part of the revenue growth.

Revenue was also higher than Rs 554 crore in the preceding quarter, while EBITDA increased from Rs 148 crore and profit after tax improved from Rs 73 crore. For the first half of FY27, revenue rose 17 per cent YoY to Rs 1,213 crore and EBITDA grew 19 per cent to Rs 335 crore. The first-half EBITDA margin improved to 28 per cent from 27 per cent.

The company said its first end-to-end integrated collaboration, onboarded in the previous quarter, has commenced operations and is expected to be fully functional in the third quarter. It has also converted another large pharmaceutical relationship into a similar strategic engagement. Such arrangements are significant because they can extend Sai’s participation from early research programmes into development and commercial manufacturing.

Capital expenditure was Rs 358 crore during the quarter and Rs 621 crore in the first half. Sai Life Sciences reiterated its FY27 capex projection of Rs 1,100 crore to Rs 1,300 crore. It has opened the first building at Unit 8 for a large-pharma collaboration and started work on a new Process R&D Block in Hyderabad, which is intended to double process research capacity and add early-phase peptide and clinical-formulation capabilities.

As of September 30, 2026, the company had 34 active commercial new chemical entity molecules and 14 Phase III or pre-registration molecules. Capacity utilisation stood at 67 per cent in the quarter. Management expects a stronger second half, aided by new capacity ramp-up and advancement of development and commercial programmes.

As of 10:51 am on November 6, 2026, Sai Life Sciences traded at Rs 1,775.20. That was 11.21 per cent above the previous close of Rs 1,596.20. Over one year, the stock had gained 78.08 per cent, compared with a 2.16 per cent decline in the BSE 500 over the same period. 

What This Means for Investors

Quarterly performance supports Sai’s strategy of moving customers from discrete assignments to integrated discovery, development and manufacturing work. The first end-to-end large-pharma collaboration has begun operations, while a second relationship has moved to a similar model. These engagements could improve lifecycle participation if programmes progress. Revenue growth and 67 per cent utilisation indicate demand, but the Rs 1,100 crore to Rs 1,300 crore FY27 capital-spending plan makes timely commissioning and utilisation central to investment returns.

Sequential improvement from the first quarter and management’s stronger-second-half expectation are supportive, although contract development and manufacturing revenue can be shipment-led and uneven. The one-percentage-point EBITDA margin decline shows investment and operating costs can temper conversion. At 93.75 times trailing earnings and 48.36 times enterprise value to trailing EBITDA, the valuation sets a high bar for sustained growth, margin resilience and disciplined capex delivery. Pipeline progression and new capacity ramp-up are the key tests.

Disclaimer: The article is for informational purposes only and not investment advice.