INDEGENE Q2 CONCALL: TARGETS 19%+ EBITDA MARGIN BY Q4 FY27; EXPECTS STRONGER H2 GROWTH, $10 MILLION OUTCOME-BASED DEAL TO BOOST Q4 REVENUE

• **Q4 FY27 EBITDA Margin Target:** Management reiterated its objective of achieving quarterly EBITDA margins above 19% by Q4 FY27, compared with 16.7% in Q2. • **FY27 Growth Outlook:** Management expects organic revenue growth in FY27 to exceed FY26 levels, supported by deal wins, client expansion and AI-enabled offerings. • **H2 FY27 Outlook:** Management expects H2 to be stronger than H1, with improving revenue growth and operating leverage. • **Margin Expansion Outlook:** Management expects productivity improvements, workforce transformation and higher-margin deal execution to support EBITDA margin expansion during Q3 and Q4. • **Q4 Revenue Recognition:** A $10 million outcome-based contract is expected to contribute more meaningfully to revenue and margins in Q4 FY27, following customer confirmation of performance milestones. • **$10 Million Contract:** Management indicated that only a small portion of revenue from this contract was recognized during Q2, with the majority of the contribution expected in H2. • **Deal Wins:** Company secured 9 deals with annual contract values of approximately $1 million or more, including one deal above $5 million and two deals in the $3–5 million range. • **Large Pharma Contract:** Company won an additional content platform migration mandate from an existing top-five customer, covering geographies outside the US. The new work is expected to ramp up from Q3, with a greater revenue contribution from Q4 onward. • **Global Content Factory:** Company secured a $3–5 million contract from a top-20 pharmaceutical company to establish a global content production platform across commercial and medical functions. • **New Global Pharma Client:** Company won a global digital content management contract from a top-30 pharmaceutical company, replacing a large incumbent service provider. • **Tectonic Platform Growth:** Quarterly Tectonic revenue run rate increased to approximately $1.7 million from $1 million, while contracted work exceeded $2 million per quarter. • **Tectonic Expansion:** Company's largest customer expanded its GenAI-enabled Tectonic offering into Canada after earlier deployments in Germany and Spain. • **Tectonic Ramp-Up:** Management indicated that execution at its largest customer remains slower than contract additions because of organizational change management and adoption requirements. • **Agentic AI Business:** Company converted a pilot engagement with a top-20 pharmaceutical company into a full-scale Agentic Agency-of-Record contract worth more than $1 million. • **AI-Led Commercialization:** Management aims to integrate content strategy, scientific messaging, creative development and production into a unified AI-enabled service model. • **Outcome-Based Revenue:** More than 60% of revenue is aligned with output or outcome-based contracts. Management expects this contribution to increase as new deals move away from traditional employee-based billing. • **Commercial Segment Outlook:** Management expects Enterprise Commercial to grow faster than Enterprise Medical over the next two quarters, supported by stronger deal activity. • **Medical Segment Outlook:** Management remains positive about the medical business pipeline despite relatively slower recent growth compared with commercial services. • **Clinical Business Growth:** Management expects continued growth in the Others segment during Q3 as a previously signed clinical services contract reaches a fuller revenue run rate. • **BioPharm Acquisition:** Management highlighted improving performance following BioPharm's integration, with approximately $1.5 million in annual cost savings already realized and reinvested into business development. • **BioPharm Growth Outlook:** Management expects BioPharm's calendar-year 2026 revenue growth to exceed 15%, based on its current trajectory, potentially triggering an earnout payment close to the contractual maximum. • **Client Expansion:** Active clients increased to 107, up 31 YoY. Clients generating more than $1 million annually increased to 59, while the number of clients above $10 million reached 30. • **Large Client Growth:** Revenue from the top five clients increased 9.2% QoQ, while the top 20 clients recorded 6.7% sequential growth in rupee terms. • **Employee Productivity:** Annualized revenue per employee increased to approximately $79,600 from $69,000 YoY, supported by AI-enabled delivery and outcome-linked pricing. • **Wage Hike Impact:** Annual salary increments affected Q2 EBITDA margins by approximately 150 bps, largely offset by productivity improvements and favorable foreign exchange movements. • **Workforce Efficiency:** Productivity and workforce transformation initiatives contributed approximately 85 bps to margin improvement during Q2, with further benefits anticipated in H2. • **PBT Margin Outlook:** Management expects reduced amortization expenses and improved investment yields to provide up to 90–95 bps of additional support to PBT margins in the coming quarters. • **Q2 Revenue:** Revenue increased 39.5% YoY and 5.6% QoQ to ₹1,122.3 Cr, marking the fifth consecutive quarter of more than 5% sequential revenue growth in rupee terms. • **Q2 EBITDA:** EBITDA increased 32% YoY to ₹187.3 Cr, with an EBITDA margin of 16.7%. • **Q2 Profitability:** PBT stood at ₹147.4 Cr, while PAT reached ₹112.3 Cr, up approximately 10% YoY. • **Business Mix:** Enterprise Commercial contributed 71% of revenue, Enterprise Medical 25% and Others 4%. • **Geographical Mix:** North America contributed 74% of revenue, Europe 23% and other regions 3%. • **Cash Position:** Cash and investments stood at approximately ₹1,389.6 Cr, while net debtor days increased slightly to 69 days from 67 days. • **Key Challenges:** Slower conversion of contracted AI engagements into revenue, dependence on large pharmaceutical customers, outcome-based billing timelines and execution of new deal ramp-ups remain important factors.

INDEGENE LIMITED

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