This article first appeared on GuruFocus .
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Overall Revenue:THB3.4 billion, growth of 14.4% YoY.
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Branded Business Revenue:THB2.3 billion, growth of 16.5% YoY.
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Distribution Business Revenue:Close to THB1 billion, growth of 7.8% YoY.
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Overall Gross Profit Margin:52.3% of operating revenue, up from 51.4% last year.
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Branded Business Gross Margin:66.1%, up from 65% last year.
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Distribution Business Gross Margin:Close to 22% of operating revenue, similar to 23% last year.
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SG&A Expenses:THB1,050 million, increased by 6.2% YoY.
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SG&A as Percentage of Revenue:Decreased from 33% to 31% YoY.
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EBITDA:THB869 million, growth of 42% YoY.
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Reported Net Profits:THB605 million, growth of 34% YoY.
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Adjusted Net Profits:THB565 million, growth of 16% YoY.
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Operating Cash Flows:THB686 million, representing 113% of net profits.
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Investment in Tangible Assets:THB124 million, for manufacturing plants and joint venture acquisition.
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Release Date: May 14, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Mega Lifesciences PCL ( BKK:MEGA ) reported a strong revenue growth of 14.4% year-over-year for the first quarter of 2026, reaching THB3.4 billion.
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The branded business segment saw a significant revenue increase of 16.5% year-over-year, driven by a robust product portfolio and sustained demand across key markets.
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Gross profit margins improved to 52.3% from 51.4% in the previous year, largely due to the favorable segmental mix with the branded business growing faster than the distribution business.
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EBITDA for the first quarter of 2026 increased by 42% year-over-year, reaching THB869 million, supported by strong growth in the Mega We Care and Maxxcare businesses.
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The company maintained a strong balance sheet with healthy operating cash flows of THB686 million, representing 113% of net profits, and continued to be a net cash company.
Negative Points
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The distribution business gross margins slightly decreased from 23% in the first quarter of 2025 to close to 22% in the first quarter of 2026.
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SG&A expenses increased by 6.2% year-over-year, although they decreased as a percentage of operating revenue from 33% to 31%.
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The distribution revenue has been declining quarter-on-quarter for the past two quarters, raising concerns about future growth momentum.
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The company faces potential cost pressures from rising energy and transportation costs, which could impact overall profitability.
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There are ongoing challenges in certain markets like Cambodia, which could affect the distribution business growth targets.
Q & A Highlights
Q: Why did the branded gross margin come in above guidance and the distribution margin slightly below? A: The branded business saw higher growth in high-margin products, which increased the overall margin. For the distribution business, the mix of partners and products in the quarter affected the margin, with some products having lower margins. (Vivek Dhawan, CEO)
Q: When do you expect the distribution revenue to start rising quarter-on-quarter? A: The distribution business should be viewed on a year-over-year basis rather than quarter-on-quarter. The business grew 7.8% year-over-year, and we expect stable levels of revenue moving forward. (Thomas Abraham, CFO)
Q: When will the new production facility in Indonesia start producing, and what is the revenue target for the country? A: The facility will start producing in the first quarter of next year. It will add capacity and allow for local production of new products. We are targeting significant growth, but specific countrywide data is not shared. (Vivek Dhawan, CEO)
Q: Do you still maintain the guidance for the distribution business after adopting the new currency exchange rate? A: Yes, on a stable currency basis, we expect to achieve low to mid-single-digit growth. The change in financial statements helps reflect the correct numbers. (Thomas Abraham, CFO)
Q: What is the impact of the war on the supply chain and costs? A: There are some cost increases in packaging and transportation, but they are not significant enough to impact the bottom line. Energy costs are a small part of total costs, and any increases are manageable. (Vivek Dhawan, CEO)
Q: Is the strong growth in the branded business driven by price adjustments or volume? A: The growth is primarily driven by volume, with no significant price changes. There is minimal impact from stockpiling due to the Middle East conflict. (Vivek Dhawan, CEO)
Q: Can we expect the branded business gross margin to remain at 66%? A: We aim to maintain a gross margin of 63% to 65% over the year. The focus is on growing both pharma and consumer health businesses, which should improve the bottom line. (Vivek Dhawan, CEO)
Q: What is the full-year guidance for the branded business? A: We maintain guidance of 8% to 12% growth. If growth reaches 12%, it will result in better results. We will provide more updates in the next quarter. (Vivek Dhawan, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
