Synopsis: Blue Jet HealthCare reported a steep sequential decline in revenue and profit in Q2FY26 due to de-stocking in the PI segment, though gross margins and other income improved sharply. Despite steady progress on capacity expansion and product launches, investors reacted to near term weakness, with the stock hitting its 10 percent lower circuit.
A pharma CDMO (Contract Development and Manufacturing Organization) stock fell sharply after Q2 results, as investors reacted to a significant quarter-on-quarter drop in sales and operating profit despite higher gross margins and a surge in other income. The muted topline reflected temporary de-stocking in the PI segment.
Blue Jet HealthCare Ltd reported a market capitalisation of Rs. 10,534.56 crore. The stock opened at Rs. 679.95 and hit its lower circuit of 10 percent, touching an intraday low of Rs. 607.30 against the previous close of Rs. 674.75, marking a decline of 10 percent from the previous close to the day’s low.
Financial Snapshot – Q2FY26
Quarter-on-Quarter (QoQ): Revenue declined from Rs. 355 crore in Q1FY26 to Rs. 165 crore in Q2FY26, down 53.52 percent. Operating profit dropped from Rs. 121 crore to Rs. 55 crore, down 54.55 percent, while operating margin moved from 34 percent to 33 percent, reflecting a 2.94 percent relative decline. Profit before tax decreased from Rs. 123 crore to Rs. 69 crore, down 43.90 percent, and net profit fell from Rs. 91 crore to Rs. 52 crore, down 42.86 percent. Earnings per share reduced from Rs. 5.26 to Rs. 3.01.
Year-on-Year (YoY): Revenue fell from Rs. 208 crore in Q2FY25 to Rs. 165 crore in Q2FY26, a decline of 20.67 percent. Operating profit dropped from Rs. 69 crore to Rs. 55 crore, down 20.29 percent, while operating margin remained steady at 33 percent. Profit before tax declined from Rs. 77 crore to Rs. 69 crore, down 10.39 percent, and net profit decreased from Rs. 58 crore to Rs. 52 crore, down 10.34 percent. EPS reduced from Rs. 3.36 to Rs. 3.01, lower by 10.42 percent year-on-year.
Financial Highlights
The company reported that the decline in revenues during Q2FY26 was due to lower sales in the PI segment, driven by de-stocking of channel inventory. Gross margin improved to 65 percent in Q2FY26 from 48 percent in Q1FY26, owing to changes in inventory and higher finished goods levels (including goods in transit) of Rs. 506 million. Overhead allocation on these stocks reduced cost of goods sold by around 9 percent, positively impacting margins.
Other income rose sharply to Rs. 243 million, up 194 percent from Rs. 83 million in Q1FY26, primarily on account of a net foreign exchange gain of Rs. 154 million due to USD appreciation and treasury income of Rs. 74 million. Free cash and cash equivalents along with treasury investments stood at Rs. 3,413 million as of 30 September 2025.
Business Updates
Blue Jet launched an iodinated-based advanced contrast media intermediate in July 2025. The contrast media for the MRI segment continues to witness strong growth in regulated markets, leading to a robust order book. The company received new RFPs, one for a high-conviction Phase 3 program and two for commercialized products, that could lead to additional lateral entries.
A key intermediate in the PI category for a cardiovascular drug is seeing strong traction and rising prescriptions across geographies, which is expected to support product growth over the patent period. Blue Jet made a payment of Rs. 42 crore for acquiring 102 acres near Vizag, with formalities underway. The company also incurred Rs. 82 crore of capex (excluding land) between April and September 2025, with the Mahad backward integration project progressing on schedule.
Growth Strategy
The company continues to focus on enhancing operational efficiency and mitigating supply chain risks. It aims to forward-integrate into more advanced intermediates for contrast media, leverage long-term customer relationships to expand into adjacent pharma intermediate and API segments, build additional capacity to meet future customer demand, and invest further in R&D infrastructure and technical capabilities.
About the Company
Blue Jet HealthCare Ltd is a specialty pharmaceutical and healthcare ingredients manufacturer operating under a Contract Development and Manufacturing Organization (CDMO) model. The company has strong chemistry capabilities in contrast media intermediates and high-intensity sweeteners, serving leading innovator and multinational pharmaceutical clients through long-term contracts. It supplies key intermediates to global majors such as GE Healthcare, Guerbet, and Bracco, and high-intensity sweeteners to companies like Colgate-Palmolive (India) Ltd and Unilever.
-Manan Gangwar
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