Sai Life Sciences accelerates growth with strategic focus on deep client relationships and targeted capacity expansion in FY27

Sai Life Sciences said its first-quarter FY27 performance was shaped by a sharp lift in research services and ongoing investment across its platform, even as the company prepared for a heavier capital spending phase.

According to the company’s earnings-call highlights, revenue rose 12% year on year, led by a 26% increase in contract research organisation activity. Management said the stronger CRO showing was supported by demand from established clients and by a recent convers...

ion of a pilot engagement with a large pharmaceutical group into a longer-term discovery chemistry arrangement.

The update suggests Sai Life Sciences is leaning further into integrated relationships with major drugmakers. The company said more than 90% of revenue still comes from repeat customers, and it has been working to broaden the scope of work it wins from those accounts. Siva Chittor, the chief financial officer, said the goal is not just to add customers but to deepen relationships and capture more of each client’s outsourcing spend, pointing to the company’s roster of 19 of the top 25 pharmaceutical companies.

The contract development and manufacturing side expanded more modestly, with revenue growth of 6% year on year, reflecting the uneven nature of that business. Even so, the company said it had added six late-phase molecules over the past 15 months, including five through large pharma FTE relationships, which should strengthen the pipeline for future commercial manufacturing work.

Krishna Kanumuri, the chief executive, said the company’s objective is to keep programmes through the full commercial life cycle wherever possible, barring capacity constraints. He also indicated that the transition from single-service work to more integrated models should, over time, increase both the value and duration of customer relationships.

The company is also preparing for a significant expansion cycle. It guided for capital expenditure of ₹1,100 crore to ₹1,300 crore in FY27, with spending directed towards new capabilities including peptides and formulation. Chittor said capability-building investment would be difficult to defer unless business conditions changed sharply, although capacity additions would continue to be assessed modularly.

Not all of that spending will translate into near-term revenue. Sai Life Sciences said its formulation capability is still around six months from readiness and will initially focus on small-molecule oral solids for Phase 1 and Phase 2 supply rather than commercial manufacturing. Its peptide commercial facility is not expected to come onstream until 2028, though the company said it already has a dedicated development laboratory under way and broader pilot-scale GMP work in motion.

Management said peptide spending through 2028 is likely to stay below ₹300 crore. The company is also building capability in ADCs and other newer modalities, part of a broader push to position the business for future demand in complex drug development.

The latest quarter follows a strong FY26 run. Sai Life Sciences reported 29% revenue growth in the fourth quarter, while EBITDA and profit rose even faster, according to its prior earnings materials. In the third quarter, revenue rose 27%, with both CDMO and CRO performing well. Across the year, the company said revenue contribution from 19 large pharma clients increased materially, underlining its strategy of deepening ties with global drugmakers rather than relying on a wider but shallower customer base.

That strategy appears to be gaining traction, but the next phase will test whether the company can turn its larger pipeline, new modalities and overseas satellite centres in Boston and Manchester into sustained growth. For now, Sai Life Sciences is signalling confidence that the market opportunity remains sizeable, even if the returns from its current investment cycle will take time to show through.

Source: Noah Wire Services