ZIM Laboratories addresses regulatory hurdles, expects H2 FY26 recovery

ZIM Laboratories reported a total operating income of INR887 million for Q2 FY26, a 23.6% sequential increase, driven by stronger traction in core segments. The pharmaceutical business contributed 83% of total revenue at INR732 million, growing 30.7% quarter-on-quarter, while the nutraceutical segment saw a decline primarily due to deferred domestic institutional orders. EBITDA improved to INR78 million, with margins rising to 8.8% from 7.9% in Q1 FY26, and the net loss narrowed to INR4 million from INR19 million in the prior quarter.

The company is addressing EU-GMP non-compliance, aiming to complete remediation by March 2026, with supplies expected to resume by Q1 or Q2 FY27. Proactive steps include site transfer projects for key products like Tamsulosin + Dutasteride and Dimethyl Fumarate to accredited facilities for uninterrupted supply. ZIM Laboratories expects FY26 revenues to be broadly in line with FY25, driven by a strong Q3 order book, healthy PMI orders, and gradual pickup in domestic demand.

R&D investment for the quarter was INR76 million, focused on new product development, bioequivalence studies, and regulatory filings. The company continues to strengthen its innovative product pipeline and accelerate filing activity across emerging and regulatory markets.