24% to 52%: CDMO stock in which FIIs and DIIs have increased their stake aggressively in 1 yr

Synopsis: Sai Life Sciences is gaining strong institutional interest, with FII and DII combined ownership rising from about 24 percent in December 2024 to over 52 percent by September 2025. Supported by 25 percent three-year revenue CAGR, a deep pipeline of over 160 molecules, and a Rs. 700 crore expansion plan, institutions see it as a long-term growth story rather than a short-term bet.

Sai Life Sciences is increasingly emerging as an institutional favourite, with both foreign institutional investors (FIIs) and domestic institutional investors (DIIs) turning aggressive on the stock.

Rising institutional ownership reflects growing confidence in the company’s CRDMO business model, long-term growth visibility, and strong positioning in the global pharmaceutical outsourcing space, signalling that smart money is betting on sustained earnings compounding rather than short-term triggers.

Sai Life Sciences Ltd, with a market capitalization of Rs. 18,951.82 crore, closed at Rs. 901 on Wednesday, down by 0.09 percent from its previous day’s close price of Rs. 901.8 per equity share.

Shareholding Pattern

As of September 2025, the company’s shareholding structure reflects strong institutional participation, with promoters holding 34.93 percent, FIIs at 22.49 percent, DIIs at 29.95 percent, and the public owning 12.65 percent of equity. This balanced ownership indicates sustained confidence from both management and long-term institutional investors.

From December 2024 to September 2025 institutional ownership has risen sharply. FII holding increased from 11.72 percent to 22.49 percent, while DII holding jumped from 11.95 percent to 29.95 percent, highlighting growing conviction among foreign and domestic institutions in the company’s long-term growth prospects.

About the Company

Sai Life Sciences Limited is a Hyderabad-based CRDMO, founded in 1999, offering end-to-end services across medicinal chemistry, pharmacokinetics, and contract development and manufacturing for global clients. Formerly known as SAI Advantium Pharma Limited, the company rebranded to its current name in 2006 and operates both in India and international markets.

Possible reason why Institutions Are Increasing Their Stake 

Strong Global Presence and Regulatory Credibility

Sai Life Sciences, a Hyderabad-based pharmaceutical company, has emerged as a globally competitive CRDMO with a deep footprint across the US, Europe, Japan, and the UK. With over 300 active customers across regulated markets, the company enjoys diversified and repeat business from global innovators. Its 100 percent clean track record in regulatory inspections by agencies such as the USFDA and Japan’s PMDA across both R&D and manufacturing facilities significantly reduces regulatory risk, a key factor that institutions closely track while allocating long-term capital.

Integrated CRDMO Business Model

Institutions are attracted to Sai Life Sciences limited’s end-to-end capabilities spanning drug discovery, development, and commercial manufacturing. The company operates as a CRO, CDMO, and CRDMO, covering medicinal chemistry, computational drug discovery, pharmacology, toxicology, pre-clinical research, process development, formulation, analytical validation, clinical trial supplies, and full-scale API manufacturing. This integrated model increases client stickiness, improves margin visibility over time, and positions the company as a long-term strategic partner rather than a pure service vendor.

Robust and Visible Pipeline Supporting Future Growth

The company’s deep pipeline strengthens institutional confidence. It has around 160 molecules in early development, 36 active molecules with near-term monetisation potential, over 40 programs already in the IND stage, and five molecules progressing from discovery to market. Such a wide funnel enhances revenue visibility and increases the probability of long-term annuity-type income as molecules advance into commercial phases.

Financial Outlook

In Q2FY26, the company reported revenue of Rs. 537 crore, up 35.6 percent YoY from Rs. 396 crore in Q2FY25 and 8.3 percent QoQ from Rs. 496 crore in Q1FY26. The steady quarter-on-quarter growth, along with strong year-on-year expansion, reflects consistent business momentum.

EBITDA stood at Rs. 146 crore, rising 43.1 percent YoY from Rs. 102 crore and 20.7 percent QoQ from Rs. 121 crore. Profit increased sharply to Rs. 84 crore, marking a 100 percent YoY jump from Rs. 42 crore and a 40 percent QoQ rise from Rs. 60 crore, indicating strong margin expansion and improved profitability.

Over the past three years, the company has delivered a revenue CAGR of 25 percent, a profit CAGR of 229 percent. A return on equity (ROE) of about 11 percent, a return on capital employed (ROCE) of about 14 percent and debt to equity ratio of 0.18 demonstrate the company’s financial position. At the moment, the company’s P/E ratio is 66.5x higher as compared to its industry P/E 30.7x.

Future Outlook

US Biosecure Act: Structural Tailwind for Indian CRDMOs

The proposed US Biosecure Act aims to restrict US government-funded entities from working with certain Chinese biotech firms due to data security and national interest concerns. This development is expected to accelerate global pharma’s shift away from China toward trusted, compliant alternatives. Sai Life Sciences, with its strong US regulatory approvals, proven compliance record, and India-based operations, stands to be a key beneficiary of this global supply-chain realignment, making it increasingly attractive for institutional investors.

Capacity Expansion

The company has already aligned a Rs. 700 crore capex plan for FY26 to expand both manufacturing and research capabilities, including the development of a new manufacturing facility in Hyderabad. This investment is expected to nearly double manufacturing capacity from around 700 KL to approximately 1,150 KL by the end of FY26, with further expansion planned for FY27. Institutions typically favour companies where capex is backed by a strong pipeline and visible demand, as this improves return ratios over the medium term.

Conclusion

Sai Life Sciences combines global credibility, a fully integrated CRDMO model, a deep and advancing pipeline, and clear capacity expansion plans, all supported by favourable global policy tailwinds like the US Biosecure Act.

These factors together explain why both foreign and domestic institutions are aggressively increasing their stake, viewing the company as a long-term compounder in the global pharmaceutical outsourcing space.

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