Sai Life Sciences: CRO grows 24%, capex cycle begins

Sai Life Sciences Limited (NSE: SAILIFE) started FY27 with Q1 consolidated revenue of ₹554 crore, up 12% YoY. Net profit rose 22% to ₹73 crore. The stock closed at ₹1,541.20 on 1 October, up 70% in 2026. What happened CRO revenue grew 24% YoY, twice the rate of total revenue, and now represents 40% of the business, about ₹222 crore. CDMO, the larger half, contributed 60% or about ₹332 crore. PAT margin improved from 12% to 13%. Discovery revenue reached ₹775 crore in FY26, up 24% from ₹626 crore. Its CMC pipeline has 33 commercial molecules and 14 late-phase molecules. Why it matters Over 65% of discovery customers used multiple services across FY23 to FY26. One top-tier customer expanded its relationship to cover discovery through commercial supply in Q1 FY27. My view The business is cleaner than Jubilant right now. Revenue and profit are both growing. The capex changes that. Sai spent ₹263 crore in Q1 and budgeted ₹1,100 to ₹1,300 crore for FY27. Around 75% goes to CDMO and 25% to CRO. Utilisation was 65%, so demand must catch up. The balance sheet is the reason this is manageable. Sai used IPO proceeds to repay ₹720 crore of debt. Net debt to EBITDA was just 0.04 times in FY26. So it enters this capex cycle in far better shape than before the IPO. Five year profit: ₹6, ₹10, ₹83, ₹170 and ₹349 crore. That is consistent growth. Jefferies maintains a Buy with a ₹1,610 target. At ₹1,541, the stock is 4.5% away. What I am watching Q2 FY27 results, capacity utilisation above 70%, and new peptide and ADC programme wins. On the chart, ₹1,015 is the 52-week low. My stance: Hold. Outstanding business, but priced for perfection. Revisit near ₹1,300. Disclosure: I do not hold a position in Sai Life Sciences Limited at the time of writing. This is not investment advice.