Natural Capsules, one of India’s leading capsule manufacturers, has announced its financial results for the quarter and half year ended September 30, 2025, reporting steady demand but acknowledging multiple external and operational challenges that have impacted growth.

The company reported H1 FY26 revenue of INR 91.01 crore, marking a 13.18 percent year-on-year increase, while EBITDA stood at –?0.57 crore, reflecting a 106.73 percent YoY decline. For Q1 FY26 (quarter ended June 30, 2025), the company posted revenue of INR 45.80 crore, an 11.11 percent YoY growth, while EBITDA stood at INR 0.88 crore, marking a 119.63 percent YoY decline.

Commenting on the performance, Sunil Mundra, Executive Director, Natural Capsules, said, “Q2FY26 has been a stable quarter for our capsules business. Demand remained steady, and overall, our performance was in line with the guidance we had shared earlier.”

However, he noted that key growth drivers—especially related to the HPMC capacity expansion — were temporarily affected due to tariffs imposed on Indian exports to the US.

“This has hit demand in the US market quite hard,” Mundra said.  

Despite this, he added, the company remains on track with its capital expenditure plan and expects to commission the new production line by the end of this quarter.     

The company expects the growth in the capsules segment to pick up once there is more clarity on these tariffs.

“Were it not for these unforeseen tariffs and their impact on our US business, we would have reported stronger revenue and healthier margins this quarter,” Mundra said.  

On the API front, Mundra acknowledged persistent challenges. “After finally obtaining all necessary approvals from the Pollution Control Board, we aimed to ramp up commercial production from Q3. Yet, we have run into technical difficulties scaling up fermentation batches— a complex process where new issues often surface when moving from lab to commercial scale. That said, we are currently navigating through these challenges and remain confident that we will be able to scale up production rapidly once these issues are resolved,” he stated.

Calling FY26 “a tough year,” Mundra said both the capsules and API businesses faced headwinds beyond the company’s control.

“The capsules business was held back by the US tariffs, which affected the growth we expected from HPMC expansion. At the same time, delays in regulatory approvals and technical challenges have pushed back our API plant scale-up timeline. These are factors beyond our control, but they do not define us.”

“We are on the right path and firmly believe that we will emerge from these challenges stronger and deliver better performances in the year ahead,” he added.

Natural Capsules, incorporated in 1993 in Bangalore, is a pioneer in vegetarian capsule manufacturing in India and is the country’s second-largest producer of gelatin capsules. The company expanded operations to Puducherry in 2003 and is now entering API manufacturing through its subsidiary Natural Biogenex Private Ltd, leveraging complex, high-end patented technology developed in-house.