Q1 2027 Gland Pharma Ltd Earnings Call
Speaker #1: Ladies and gentlemen, good day and welcome to the Gland Pharma Limited Q1 FY27 earnings conference call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.
Operator 2: Ladies and gentlemen, good day and welcome to the Gland Pharma Limited Q1 FY27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Shriniwas Pradeep Dange, Investor Relations at Gland Pharma Limited. Thank you and over to you, sir.
Speaker #1: Should you need assistance during this conference, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded.
Speaker #1: I now hand the conference over to Mr. Srinivas P. Dange, Investor Relations at Gland Pharma Limited. Thank you, and over to you, sir.
Speaker #2: So, thank you, Darvind. Good evening, everyone. We welcome you to the Gland Pharma earnings conference call for Q1 of FY27. I am Shriniwas Dange from the Investor Relations team at Gland Pharma.
Shriniwas Pradeep Dange: Thank you, Darwin. Good evening, everyone. We welcome you to Gland Pharma earnings conference call for Q1 of FY27. I am Srinivas Dange from the Investor Relations team at Gland Pharma. Today, we have Mr. Srinivas Sadu, Executive Chairman, and Mr. Ravi Mitra, Chief Financial Officer from India office. We will begin the call with the business and operational highlights from Mr. Sadu, followed by the group financial overview by Mr. Ravi. Before we proceed, I would like to remind everyone that some of the statements made today will be forward-looking and are based on management's current estimates. These statements should be considered in light of the risk associated with our business. This call is being recorded. The playback and script will be available on our website shortly. With that, I hand over the call to Mr. Sadu for his opening remarks.
Speaker #2: Today, we have Mr. Srinivas Sadu, Executive Chairman, and Mr. Ravi Mitra, Chief Financial Officer from India office. We will begin the call with the business and operational highlights from Mr. Sadu, followed by the group financial overview by Mr. Ravi.
Speaker #2: Before we proceed, I would like to remind everyone that some of the statements made today will be forward-looking and are based on management's current estimates.
Speaker #2: These statements should be considered in light of the risks associated with our business. This call is being recorded. The playback and script will be available on our website shortly.
Speaker #2: With that, I hand over the call to Mr. Sadu for his opening remarks.
Speaker #3: Thank you, Srinivas. Good evening, everyone, and a warm welcome to all of you to Gland Pharma's earnings call for the first quarter of fiscal year 2027, ended June 30, 2026.
Srinivas Sadu: Thank you, Srinivas. Good evening, everyone, and a warm welcome to all of you to Gland Pharma's earnings call for the first quarter of fiscal year 2027, ended 30 June 2026. I will begin with the business and strategic overview, and Ravi will subsequently walk you through the financial performance for the quarter. We have started FY27 with a strong momentum, delivering healthy year-on-year growth in revenues, EBITDA, and profit after tax. Our performance reflects the resilience of our business model and the successful execution of our strategic priorities. Growth during the quarter was driven by continued strength in our CDMO and B2B businesses, contribution from recent product launches, increasing volumes from existing products, improved capacity utilization, and sustained operational efficiency initiatives across the organization. For the first quarter of FY27, we reported revenues of INR 18,003 million, representing a growth of 20% year-on-year.
Speaker #3: I will begin with the business and strategic overview, and Ravi will subsequently walk you through the financial performance for the quarter. We have started FY27 with a strong momentum.
Speaker #3: Delivering healthy year-on-year growth in revenues, EBITDA, and profit after tax. Our performance reflects the resilience of our business model and the successful execution of our strategic priorities.
Speaker #3: Growth during the quarter was driven by continued strength in our CDMO and B2B businesses, contributions from recent product launches, increasing volumes from existing products, improved capacity utilization, and sustained operational efficiency initiatives across the organization.
Speaker #3: For the first quarter of FY27, we reported revenues of ₹18,003 million, representing a growth of 20% year on year. Adjusted EBITDA for this quarter stood at ₹5,102 million, with margins of 28%, while profit after tax was ₹3,170 million, reflecting a healthy growth of 47% year on year, with PAT margin of 18%.
Srinivas Sadu: Adjusted EBITDA for this quarter stood at INR 5,102 million with margins of 28%, while profit after tax was INR 3,170 million, reflecting a healthy growth of 47% year-on-year with PAT margin of 18%. The quarter demonstrates our ability to consistently execute on multiple drivers while maintaining strong profitability. We continue to benefit from a balanced business mix and differentiated manufacturing capabilities. Continued operating leverage, improved capacity utilization, and disciplined cost management have further supported our profitability during the quarter. Let me now provide an overview of our performance across business segments. Our CDMO business continued to deliver strong growth during the quarter and remains one of the key pillars of our long-term strategy. Revenue from the CDMO segment stood at INR 8,915 million, which grew by 20% year-on-year and contributed 50% of total revenues during the quarter.
Speaker #3: The quarter demonstrates a ability to consistently execute on multiple growth risks while maintaining strong profitability. We continue to benefit from a balanced business mix and differentiated manufacturing capabilities.
Speaker #3: Continued operating leverage improved capacity utilization and disciplined cost management have further supported our profitability during the quarter. Let me now provide an overview of our performance across business segments.
Speaker #3: Our CDMO business continued to deliver strong growth during the quarter, and remains one of the key pillars of our long-term strategy. Revenue from the CDMO segment stood at rupees 8,915 million, which grew by 20% year on year, and contributed 50% of total revenues during the quarter.
Speaker #3: Growth was driven by recent product launches and the progression of existing commercial programs. Our customer engagement remains strong, and we continue to attract robust global pharmaceutical companies seeking reliable sterile manufacturing partners.
Srinivas Sadu: Growth was driven by recent product launches and progression of existing commercial programs. Our customer engagement remains strong, and we continue to attract robust global pharmaceutical companies seeking reliable manufacturing of partners. Our pipeline of development and commercial opportunities remain healthy and provides good visibility for future growth. The continued expansion of our CDMO partner and product portfolio validates our investments in capabilities, infrastructure, and customer relationships over the last several years. Our B2B business revenue stood at INR 9,088 million, contributing 50% of total revenues and recorded healthy growth of 19% year-on-year. The growth was supported by increased demand from existing customers, new contract wins, and higher volumes across several key products. Recent product launches, together with strong execution and supply reliability, have enabled us to deepen customer relationships and expand market share across select products and markets.
Speaker #3: Our pipeline of development and commercial opportunities remains healthy and provides good visibility for future growth. We continued expansion of our CDMO partner and product portfolio validates our investments in capabilities, infrastructure, and customer relationships over the last several years.
Speaker #3: Our B2B business revenues stood at rupees 9,088 million, contributing 50% of total revenues, and recorded healthy growth of 19% year on year. The growth was supported by increased demand from existing customers, new contract wins, and higher volumes across several key products.
Speaker #3: Recent product launches together with strong execution and supply reliability have enabled us to deepen customer relationships and expand market share across select products and markets.
Speaker #3: Having discussed our performance with business segments, let me now provide an overview of our key geographic markets. The United States continues to be our largest market and delivered another strong quarter.
Srinivas Sadu: Having discussed our performance of business segment, let me now provide an overview of our key geographic markets. The United States continues to be our largest market and delivered another strong quarter. Revenues for the quarter stood at INR 9,810 million, reflecting a growth of 32% year-on-year. Growth in the US was driven by recent product launches from the CDMO segment and volume expansion in existing products. M.V.I. and argatroban has witnessed an encouraging launch and continues to ramp up as expected. During the quarter, we launched four products in the US. In Europe and other regulated markets, revenues for the quarter stood at INR 4,488 million, reflecting a growth of 11% year-on-year. Growth was supported by increasing customer engagement, contribution from recent launches, and improving momentum across both our commercial and CDMO activities.
Speaker #3: Revenues for the quarter stood at rupees 9,810 million, reflecting a growth of 32% year on year. Growth in the US was driven by recent product launches from the CDMO segment and volume expansion in existing products.
Speaker #3: MVI and Dharwavanshin has witnessed an encouraging launch and continues to ramp up as expected. During the quarter, we launched four products in the US.
Speaker #3: In Europe and other regulated markets, revenues for the quarter stood at rupees 4,488 million, reflecting a growth of 11% year on year, growth was supported by increasing customer engagement, contribution from recent launches, and improving momentum across both our commercial and CDMO activities.
Speaker #3: We continue to strengthen our presence in these markets through differentiated products, expanded customer relationships, and improved commercial execution. In the recent past, we have licensed four products of various partners across several countries, and several active discussions are underway in Europe.
Srinivas Sadu: We continue to strengthen our presence in these markets through differentiated products, expanded customer relationships, and improved commercial execution. In the recent past, we have licensed four products of various partners across several countries, and several active discussions are underway in Europe. In the rest of the world markets, revenues for the quarter stood at INR 3,039 million, broadly in line with the corresponding period last year. While demand across several key markets remained healthy, revenues in the quarter were impacted by supply disruptions in Saudi Arabia, one of our important markets. The award of NUPCO tenders has been delayed, and we expect the results to be announced shortly. Looking ahead, we continue to see attractive opportunities to expand our presence across key international markets, supported by our broad product portfolio and strong manufacturing capabilities. In India, revenues for the quarter stood at INR 666 million.
Speaker #3: In the rest of the world markets, revenues for the quarter stood at Rs. 3,039 million, broadly in line with the corresponding period last year.
Speaker #3: While demand across several key markets remains healthy, revenues in the quarter were impacted by supply disruptions in Saudi Arabia, one of our important markets.
Speaker #3: The award of NIFCO tenders has been delayed, and we expect the results to be announced shortly. Looking ahead, we continue to see attractive opportunities to expand our presence across key international markets, supported by our broad product portfolio and strong manufacturing capabilities.
Speaker #3: In India, revenues for the quarter stood at rupees 666 million, at an overall growth at an overall level growth across geographies reflects increasing diversification of our revenue base, deeper customer relationships, and the success of our strategy to build a balanced presence across regulated and emerging markets.
Srinivas Sadu: At an overall level, growth across geographies reflect increasing diversification of our revenue base, deeper customer relationships, and the success of our strategy to build a balanced presence across regulated and emerging markets. Our recent new launches are doing well. These new products are expected to remain important growth drivers through FY27 and beyond. In addition to these launches, we are seeing healthy demand across several existing products. Growth has been supported by volume expansion from existing customers and improved competitiveness enabled through our cost optimization initiatives. Increased capacity utilization across manufacturing facilities is further contributing to operating leverage and supporting profitability. Our CDMO business continues to show strong traction. During the quarter, we secured multiple new CDMO contracts, including a new GLP-1 collaboration, and expanded our pipeline across complex injectables, peptides, and drug delivery platforms.
Speaker #3: Our recent new launches are doing well. These new products are expected to remain important growth drivers through FY27 and beyond. In addition to these launches, we are seeing healthy demand across several existing products.
Speaker #3: Growth has been supported by volume expansion from existing customers and improved competitiveness enabled through our cost optimization initiatives. Increased capacity utilization across manufacturing facilities is further contributing to operating leverage and supporting profitability.
Speaker #3: Our CDMO business continues to show strong traction. During the quarter, we secured multiple new CDMO contracts, including a new GLP-1 collaboration, and expanded our pipeline across complex injectables, peptides, and drug delivery platforms.
Speaker #3: We continue to see strong customer interest and a growth of opportunities that provides confidence in the long-term growth prospects of this business. Yesterday, we announced the execution of a strategic manufacturing and supply agreement with one of the leading global pharmaceutical companies for the technology transfer manufacturing supply of a portfolio of sterile injectables to the global markets.
Srinivas Sadu: We continue to see strong customer interest and a good of opportunities that provides confidence in the long-term growth prospects of this business. Yesterday, we announced the execution of a strategic manufacturing and supply agreement with one of the leading global pharmaceutical companies for the technology transfer, manufacturing, and supply of a portfolio of sterile injectables to the global markets. The portfolio comprises a diversified basket of oncology and non-oncology products in vials, lyo, ampoules, and pre-filled syringe presentations, covering both complex and conventional injectable formulations. The agreement is expected to provide strong long-term business visibility, with revenue generation anticipated from calendar 2029. The current agreement covers 55 SKUs to be manufactured across the three sites, with scope of adding more products soon. Once all products are commercialized, realized revenue potential is expected to be approximately USD 90 to 100 million.
Speaker #3: The portfolio comprises a diversified basket of oncology and non-oncology products in vials, lyos, ampules, and prefilled syringe presentations, covering both complex and conventional injectable formulations.
Speaker #3: The agreement is expected to provide strong long-term business visibility with revenue generation anticipated from current 2029. The current agreement covers 55 SKUs to be manufactured across the three sites, with scope of adding more products soon.
Speaker #3: Once all products are commercialized, revenue potential is expected to be approximately USD 90 to 100 million. Technology transfer activities are planned for completion within two years, with revenues expected to come in some calendar year 2029.
Srinivas Sadu: Technology transfer activities are planned for completion within two years, with revenues expected to come in from calendar year 2029. We have also entered a strategic collaboration with Neuland Laboratories for the manufacture of sterile APIs for microparticle depot products. Long-acting depot formulations continue to represent an attractive and growing pharmaceutical segment globally, and this partnership strengthens our capabilities in complex injectable technologies while complementing our broader strategy of building differentiated and high-value product platforms. As demand continues to grow across our businesses, capacity creation remains a key strategic priority. Building on our recently announced CapEx program, we are actively progressing multiple brownfield and greenfield expansion initiatives across our manufacturing network. These investments are intended to support growth from existing products, upcoming launches, and increased CDMO demand and newer specialty technology platforms.
Speaker #3: We have also entered a strategic collaboration with Newland Laboratories for the manufacture of sterile APIs for microparticle depot products. Long-acting depot formulations continue to represent an attractive and growing pharmaceutical segment globally.
Speaker #3: And this partnership strengthens our capabilities in complex injectable technologies, while complementing our broader strategy of building differentiated and high-value product platforms. As demand continues to grow across our businesses, capacity creation remains a key strategic priority.
Speaker #3: Building on our recently announced CAPEX program, we are actively progressing multiple brownfield and greenfield expansion initiatives across our manufacturing network. These investments are intended to support growth from existing products, upcoming launches, and increased CDMO demand and newer specialty technology platforms.
Speaker #3: We continue to evaluate additional capacity requirements to ensure that we remain well-positioned to capture future growth opportunities while maintaining operational flexibility and best-in-class service levels.
Srinivas Sadu: We continue to evaluate additional capacity requirements to ensure that we remain well-positioned to capture future growth opportunities while maintaining operational flexibility and best-in-class service levels. Another important strategic development during the quarter is our in-licensing agreement with a China-based development company for the development, manufacturing, and commercialization of a niche liposomal product for the US and European markets. This partnership strengthens our entry into differentiated drug delivery systems and expands our product portfolio. This collaboration has the potential to extend beyond a single product, given the partner's extensive pipeline for complex injectable products. Given the development timelines involved, we expect commercial opportunities and meaningful revenue contribution to start by FY30, creating another important long-term growth driver for the company. Our R&D efforts remain focused on building a differentiated pipeline. During Q1 FY27, we spent INR 772 million on R&D, representing around 4% of consolidated revenue.
Speaker #3: Another important strategic development during the quarter is our in-licensing agreement with a China-based development company for the development, manufacturing, and commercialization of a niche liposomal product for the US and European markets.
Speaker #3: This partnership strengthens our entry into differentiated drug delivery systems and expands our product portfolio. This collaboration has the potential to extend beyond a single product given the partner's extensive pipeline for complex injectable products.
Speaker #3: Given the development timelines involved, we expect commercial opportunities and meaningful revenue contribution to start from FY30, creating another important long-term growth driver for the company.
Speaker #3: Our R&D efforts remain focused on building a differentiated pipeline. During Q1, FY27, we spent rupees 772 million on R&D, representing around 4% of consolidated revenue.
Speaker #3: In the US, we filed three NDAs, received seven approvals, and launched four products. Our pipeline is increasingly focused on complex injectables and differentiated platforms, which will drive long-term value.
Srinivas Sadu: In the US, we filed 3 ANDAs, received 7 approvals, and launched 4 products. Our pipeline is increasingly focused on complex injectables and differentiated platforms, which will drive long-term value. Let me now touch upon the continued progress being made across our European manufacturing operations. Cenexi's revenues stood at EUR 48 million, with an EBITDA of EUR 2 million. Despite the disruption of activities caused by the summer heatwave in Europe, the Fontenay facility delivered a good performance, benefiting from the production ramp-up of our new ampoule line and higher operational efficiency. During the summer shutdown, as part of our ongoing modernization efforts, we will discontinue one of the older ampoule lines and replace it with a new high-capacity line.
Speaker #3: Let me now touch upon the continued progress being made across our European manufacturing operations. Senexis revenues stood at EUR 48 million, with an EBITDA of EUR 2 million.
Speaker #3: Despite the disruption of activities caused by the summer heat wave in Europe, the Spontaneous Facility delivered a good performance, benefiting from the production ramp-up of our new ampule line and higher operational efficiency.
Speaker #3: During the summer shutdown, as part of our ongoing modernization efforts, we will discontinue one of the older ampule lines and replace it with a new capacity high-capacity line.
Speaker #3: This new line is expected to enter production in early 2027, and we'll add approximately 30 million ampoules of annual capacity, enhancing efficiency, competitiveness, and growth potential for the site.
Srinivas Sadu: This new line is expected to enter production in early 2027 and will add approximately 30 million ampoules of annual capacity for enhancing efficiency, competitiveness, and growth potential for the site. At the Hérouville facility, activity levels continue to increase steadily. Revenue growth is being supported by higher volumes from 2 products successfully launched during 2025, which continue to gain momentum. We are seeing encouraging customer demand trends, improving utilization levels, and steadily strengthening operating profile. Combined with ongoing cost optimization measures, we remain optimistic about the site's performance trajectory. In Grenoble, we secured a pre-filled syringe manufacturing program for an injectable orphan drug for a European customer. This further strengthens the site's order book and reflects the continued momentum in business development and customer acquisition activities. We continue to see encouraging traction in new business generation across our European operations.
Speaker #3: At the Harrowville facility, activity levels continue to increase steadily. Revenue growth is being supported by higher volumes from two products, successfully launched during 2025, which continue to gain momentum.
Speaker #3: We are seeing encouraging customer demand trends, improving utilization levels, and steadily strengthening operating profile. Combined with ongoing cost optimization measures, we remain optimistic about the site's performance trajectory.
Speaker #3: In Dana Load, we secured a prefilled syringe manufacturing program for an injectable orphan drug for European customer. This further strengthens the site's order book and reflects the continued momentum in business development and customer acquisition activities.
Speaker #3: We continue to see encouraging traction in new business generation across our European operations. Across the organization, we remain focused on initiatives aimed at improving productivity, procurement efficiency, manufacturing yields, automation, and energy optimization.
Srinivas Sadu: Across the organization, we remain focused on initiatives aimed at improving productivity, procurement efficiency, manufacturing yields, automation, and energy optimization. These programs continue to deliver tangible benefits and together with high utilization levels, support margin expansion and long-term competitiveness. To summarize, we have delivered a strong start to FY27 with healthy growth across revenues and profitability. We continue to strengthen our commercial portfolio, expand our manufacturing capabilities, deepen customer relationships, and invest in the future growth platforms. We remain highly confident in our CDMO strategy, execution capabilities, and long-term growth trajectory. Thank you for your continued trust and support. I will now hand over the call to Ravi for the financial review. Over to you, Ravi.
Speaker #3: These programs continue to deliver tangible benefits, and together with high utilization levels, support margin expansion and long-term competitiveness. To summarize, we have delivered a strong start to FY27, with healthy growth across revenues and profitability.
Speaker #3: We continue to strengthen our commercial portfolio, expand our manufacturing capabilities, deepen customer relationships, and invest in future growth platforms. We remain highly confident in our CDMO strategy, execution capabilities, and long-term growth trajectory.
Speaker #3: Thank you for your continued trust and support. I will now hand over the call to Ravi for the financial review. Over to you, Ravi.
Speaker #1: Thank you, Mr. Sadu. Good evening, everyone, and thank you for joining us today as we review our financial performance for the first quarter of financial year 2027.
Ravi Shekhar Mitra: Thank you, Mr. Sadu. Good evening, everyone, and thank you for joining us today as we review our financial performance for the first quarter of financial year 2027. I am pleased to share that we have delivered a strong start to the year with healthy revenue growth, robust profitability, and strong cash generation. Our performance during the quarter was driven by continued momentum across our CDMO and B2B businesses, contribution from recent product launches, increasing volumes from existing products, and the benefits of operating leverage and ongoing cost optimization initiatives. As the Executive Chairman highlighted earlier, we continue to see encouraging traction across our business segments, geographies, and product portfolio, positioning us well for sustained growth in the coming quarters.
Speaker #1: I am pleased to share that we have delivered a strong start to the year with healthy revenue growth, robust profitability, and strong cash generation.
Speaker #1: Our performance during the quarter was driven by continued momentum across our CDMO and B2B businesses, contribution from recent product launches, increasing volumes from existing products, and the benefits of operating leverage and ongoing cost optimization initiatives.
Speaker #1: As the executive chairman highlighted earlier, we continue to see encouraging traction across our business segments, geographies, and product portfolio, positioning us well for sustained growth in the coming quarters.
Speaker #1: Before I discuss the quarterly performance in detail, I would like to mention that, as integration benefits between Gland Pharma and Senexis continue to increase, Senexis is now fully integrated into a broader CDMO business.
Ravi Shekhar Mitra: Before I discuss the quarterly performance in detail, I would like to mention that as integration benefits between Gland Pharma and Cenexi continue to increase, Cenexi is now fully integrated into our broader CDMO business. Accordingly, its contribution is increasingly reflected in our consolidated performance. Let me begin with the financial performance for the quarter. For Q1 FY27, our consolidated revenues stood at INR 18,003 million, reflecting a growth of 20% year-on-year. Growth during the quarter was driven by contributions from recently launched products, expansion in CDMO revenue, and continued volume growth in existing products. From a business segment perspective, both our CDMO and B2B businesses delivered healthy growth during the quarter. The contribution from CDMO continues to increase and remains an important driver of our long-term growth and profitability profile.
Speaker #1: Accordingly, its contribution is increasingly reflected in our consolidated performance. Let me begin with the financial performance for the quarter. For Q1 FY27, our consolidated revenues stood at ₹18,003 million, reflecting a growth of 20% year-on-year.
Speaker #1: Growth during the quarter was driven by continuous contributions from recently launched products, expansion in CDMO revenue, and continued volume growth in existing products. From a business segment perspective, both our CDMO and B2B businesses delivered healthy growth during the quarter.
Speaker #1: The contribution from CDMO continues to increase, and remains an important driver of our long-term growth and profitability profile. Moving to margins, overall gross margin for the quarter stood at 65%, reflecting the benefits of a favorable product mix increasing contribution from CDMO projects, improved operational efficiencies, and procurement initiatives.
Ravi Shekhar Mitra: Moving to margins, overall gross margin for the quarter stood at 65%, reflecting the benefits of a favorable product mix, increasing contribution from CDMO projects, improved operation efficiencies, and procurement initiatives. Margin improvement was also supported by yield improvement, alternate sourcing, and manufacturing optimization. Aligned with our strategy of building a differentiated portfolio of complex injectable products and advanced drug delivery platforms, our R&D investments continue to remain healthy. R&D expenditure for the quarter stood at INR 772 million, representing approximately 4% of consolidated revenue, an increase from INR 702 million in the previous quarter and INR 664 million in Q1 FY26, demonstrating a 16% year-on-year increase. Our investments continue to focus on complex injectable peptides, depot products, drug delivery technologies, and lyophilisate products. We remain committed to strengthening our development pipeline and expanding our technology capabilities to support long-term growth.
Speaker #1: Margin improvement was also supported by yield improvement, alternate sourcing, and manufacturing optimization. Aligned with our strategy of building a differentiated portfolio of complex injectable products, an advanced drug delivery platforms, our R&D investments continue to remain healthy.
Speaker #1: R&D expenditure for the quarter stood at ₹772 million, representing approximately 4% of consolidated revenue, and increased from ₹723 million in the previous quarter and ₹664 million in Q1 FY26, demonstrating a 16% year-on-year increase.
Speaker #1: Our investments continue to focus on complex injectable peptides, depot products, drug delivery technologies, and liposomal products. We remain committed to strengthening our development pipeline and expanding our technology capabilities to support long-term growth.
Speaker #1: Coming to profitability, reported EBITDA for the quarter stood at Rs 4,930 million, with an EBITDA margin of 27%, higher compared to 24% in the corresponding quarter of the previous year.
Ravi Shekhar Mitra: Coming to profitability, reported EBITDA for the quarter stood at INR 4,930 million with EBITDA margin at 27%, higher as compared to 24% in corresponding quarter of previous year. This is after excluding Forex losses of INR 36 million in this quarter. Adjusted for non-cash ESOP expense of INR 172 million, adjusted EBITDA stood at INR 5,102 million, reflecting an adjusted EBITDA margin of 28%, up from 25% in the corresponding quarter of the previous year. The year-on-year improvement in profitability was driven by a combination of higher CDMO revenue, favorable contribution margin mix, operating leverage, productivity improvements, and cost optimization initiatives. Continued utilization improvement across our manufacturing operations and the growing contribution from value-added products also supported margin expansion during the quarter. Other income comprising primarily interest income stood at INR 612 million in Q1 FY26.
Speaker #1: This is after excluding forex losses of rupees 36 million in this quarter. Adjusted for non-cash ESOP expense of rupees 172 million, adjusted EBITDA stood at INR 5,102 million, reflecting an adjusted EBITDA margin of 28%, up from 25% in the corresponding quarter of the previous year.
Speaker #1: The year-on-year improvement in profitability was driven by a combination of higher CDMO revenue, favorable contribution margin mix, operating leverage, productivity improvements, and cost optimization initiatives. Continued utilization improvement across our manufacturing operations and the growing contribution from value-added products also supported margin expansion during the quarter.
Speaker #1: Other income, comprising primarily interest income, stood at ₹612 million in Q1 FY26. During the quarter, there was a forex loss of ₹36 million, which is included in other expenses, as compared to a forex gain of ₹508 million in Q4 FY26 and ₹39 million in Q1 FY26, included in other income.
Ravi Shekhar Mitra: During the quarter, there was a Forex loss of INR 36 million, which is included in other expense as compared to Forex gain of INR 508 million in Q4 FY26 and INR 39 million in Q1 FY26 included in other income. Profit after tax for the quarter stood at INR 3,170 million, representing a sharp growth of 47% year-on-year with PAT margins of 18%. However, as compared to Q4 FY26, the decline in PAT is largely attributable to Forex loss in this quarter vis-a-vis Forex gain in the previous quarter. The effective tax rate for the quarter stood at approximately 27%. Our balance sheet continues to remain strong and provides significant flexibility to invest in future growth opportunities. As of 30 June 2026, total cash and cash equivalents at the group level stood at INR 35,466 million.
Speaker #1: Profit after tax for the quarter stood at Rs 3,170 million, representing a sharp growth of 47% year-on-year with PAT margins of 18%. However, as compared to Q4 FY26, the decline in PAT is largely attributable to forex loss in this quarter, vis-à-vis forex gain in the previous quarter.
Speaker #1: The effective tax rate for the quarter stood at approximately 27%. Our balance sheet continues to remain strong and provides significant flexibility to invest in future growth opportunities.
Speaker #1: As of June 30, 2026, total cash and cash equivalents at the group level stood at ₹35,466 million. External debt remained at a minimal level, and our overall financial position continues to be strong and well-capitalized.
Ravi Shekhar Mitra: External debt remained at a minimal level, and our overall financial position continues to be strong and well-capitalized. With healthy cash in hand, we are a net cash surplus company with a net cash position of INR 32,939 million. Cash flow from operations during the quarter remained healthy at INR 3,183 million, reflecting strong operating performance and disciplined working capital management. Our focus on inventory optimization, receivables management, and supply chain efficiency continues to support cash generation while ensuring uninterrupted customer service levels. Capital expenditure during the quarter amounted to INR 1,132 million, primarily towards capacity expansion projects, capability enhancement initiatives, infrastructure additions, and investments supporting future growth opportunities across our CDMO and fill-finish platforms. As discussed earlier, we have commenced execution of a recently announced INR 2,000 crore capital expenditure program.
Speaker #1: With healthy cash in hand, we are a net cash surplus company with a net cash position of ₹32,939 million. Cash flow from operations during the quarter remained healthy at ₹3,183 million, reflecting strong operating performance and disciplined working capital management.
Speaker #1: Our focus on inventory optimization, receivables management, and supply chain efficiency continues to support cash generation, while ensuring uninterrupted customer service levels. Capital expenditure during the quarter amounted to ₹1,132 million, primarily towards capacity expansion projects, capability enhancement initiatives, infrastructure additions, and investments supporting future growth opportunities across our CDMO and fill-finish platforms.
Speaker #1: As discussed earlier, we have commenced execution of a recently announced rupees 2,000 growth capital expenditure program, ongoing projects of vial of palmic DFS lines, and liposome products, among others, at our India sites, remain on track.
Ravi Shekhar Mitra: Ongoing projects of vial, ophthalmic, BFS line, and lyophilized products, among others at our India sites, remain on track. In addition, capacity expansion projects to cater to the anticipated demand arising from increasing CDMO collaboration have been approved and are being prioritized for execution. These investments are intended to support increasing demand across existing portfolio, upcoming product launches, expanding CDMO programs, fill-finish opportunities, and future product and technology platforms. At Cenexi, the growth CapEx for the addition of new block with vial and lyo at Dundigal and a high speed and tool line at Fontenay are also on track to finish by the end of next year. Overall, we are pleased with the strong path to start with FY27. Quarter reflects the benefits of strategic investments we have made over the last several years in manufacturing infrastructure, capabilities, R&D, and customer relationships.
Speaker #1: In addition, capacity expansion projects to cater to the anticipated demand arising from increasing CDMO collaboration have been approved, and are being prioritized for execution.
Speaker #1: These investments are intended to support increasing demand across the existing portfolio, upcoming product launches, expanding CDMO programs, fill-finish opportunities, and future product and technology platforms.
Speaker #1: At Synexi, the growth capex for the addition of a new block with vial and lyos at BLA, and the high-speed and fuel line at Fontenay, are also on track to finish by the end of next year.
Speaker #1: Overall, we are pleased with the strong start to FY27. This quarter reflects the benefits of strategic investments we have made over the last several years in manufacturing infrastructure, capabilities, R&D, and customer relationships.
Speaker #1: With multiple strategic levers in place, an optimal cash deployment priorities we believe we are well positioned to deliver sustainable growth while maintaining a strong profitability profile.
Ravi Shekhar Mitra: With multiple strategic levers in place and optimal cash deployment priorities, we believe we are well-positioned to deliver sustainable growth while maintaining a strong profitability profile. With that, I would now request the moderator to open the line for questions. Thank you.
Speaker #1: With that, I would now request the moderator to open the line for questions. Thank you.
Speaker #2: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone.
Operator 2: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Saion Mukherjee with Nomura. Please go ahead.
Speaker #2: If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question.
Speaker #2: Ladies and gentlemen, we will now wait for a moment. While the question queue assembles, our first question comes from the line of Sayon Mukherji with Nomura.
Speaker #2: Please go ahead.
Speaker #3: Yeah. Hi. Good evening. Thanks for taking my question. Sir, I just wanted if you can throw some light on this strategic manufacturing agreement which was announced.
Saion Mukherjee: Yeah. Hi, good evening, and thanks for taking my question. Sir, I just wondered if you can throw some light on this strategic manufacturing agreement which was announced. Is this with a big pharma innovator kind of company or are these generic products? If you can throw some light and the manufacturing would be largely out of India and whether, you talked about USD 90, 100 million of peak revenue potential. So how should we think about once the commercialization starts in 2029, how will the revenues ramp up to those levels of USD 90, 100 million? Thank you.
Speaker #3: You know, you know, is this with a big pharma innovator kind of company or are these, you know, generic products? If you can throw some light and, you know, the manufacturing would be largely out of India and whether, you know, you talked about 90, 100 million dollars of peak revenue potential.
Speaker #3: So how should we think about once the, you know, commercialization starts in 2029, how much time, how, how would be the revenues ramp up to those levels of 90, 100 million dollars base?
Speaker #3: Thank you.
Speaker #1: So this is a specialty pharma global company. So their, their revenues are a mix of generics as well as complex and specialty pharma. So probably 30, 40 percent of the revenue comes from specialty business.
Ravi Shekhar Mitra: This is a specialty pharma global company. So their revenues are mix of generics as well as complex and specialty pharma. So probably 30%, 40% of the revenue comes from specialty business. So the portfolio worth getting transferred to these are all from Indian sites, the manufacturing happening at Indian sites. And it's a mix of all these products, including oncology and non-oncology, spread across different formats and different products. It will also extend into the development pipeline in terms of specialty products, what they have. So the estimate what you gave is the preliminary view of the products, what is getting transferred in next 2 years. But probably there's a potential to add more products in the future. The transfer activities will start from September of this year, and the first set of products will be transferred in 24 months. Every quarter we'll be filing certain.
Speaker #1: So the portfolio that's getting transferred to these are all from Indian sites, with the manufacturing happening at Indian sites. It's a mix of all these products, including oncology and non-oncology, spread across different formats and different products.
Speaker #1: It will also extend into the development pipeline in terms of specialty products, what they have. So, the estimate we gave is a preliminary view of the products that are getting transferred in the next two years.
Speaker #1: There is probably a potential to add more products in the future. Now, the transfer activities will start from September of this year. And the first year of...
Speaker #1: Will be transferred in 24 months. Every quarter we'll be filing certain, so 60 percent of the products are for the US market, about 50 percent, I would say.
Ravi Shekhar Mitra: The 60% of the products are for the US market. About 50%, I would say. 30%, 35% the European market, and the rest of the world are about 15%, 20%. Cenexi plays a little part in this as well. They wanted an end-to-end solution for the products because it has to be global supply. So some of the products which go to Europe, the Cenexi build warehouse certain products and probably package few and also do a final Q2 release for the European market. So that's the role Cenexi will play. But basically the agreement is with Gland and manufacturing will happen at Gland manufacturing sites.
Speaker #1: 30–35 percent to the European market, and the rest of the world is about 50–20 percent. The Synexi plays a little part in this as well.
Speaker #1: They wanted an end-to-end solution for the products because it has to be a global supply. So, some of the products which go to Europe, Synexi will warehouse certain products, and probably package a few and also do a final Q2 release for the European market.
Speaker #1: So that's a role Synexi will play, but basically the agreement is going to land and manufacturing will happen at Gland manufacturing sites. To be fair, without Synexi, this wouldn't have happened in a way.
Srinivas Sadu: To be fair, without Cenexi, this wouldn't have happened in a way. So that also strengthens our strategic initiative when we acquired Cenexi, because otherwise, we couldn't have provided the full test solution for the partner. The revenues will ramp up from CY29 because the filings will start happening from next year. As soon as the products get approved, especially the US ones, it's an easier one because it's a CBE-30 format. Then it started getting launched in CY29.
Speaker #1: So that's also a central part of our strategic initiative when we acquired Synexi because otherwise, you know, they couldn't have provided the full best solution for the partner.
Speaker #1: And the revenues will ramp up from '29 because the filings will start happening from next year. And as soon as the products get approved, especially the US ones—it's an easier one because it's a CB30 format.
Speaker #1: So then it started getting launched in CY29. The ramp-up will happen from '29 to '30. So hopefully, by CY30, we should see this entire portfolio getting launched.
Srinivas Sadu: The ramp-up will happen from 2029 to 2030. Hopefully, by CY30, we should see this entire portfolio getting launched.
Speaker #3: That's very good. So thank you. And so just wanted to understand, like, you know, could we expect or are you, like, looking for such type of contract which are, like, such strategic?
Saion Mukherjee: That is very clear, sir. Thank you. Sir, just wanted to understand, could we expect, or are you looking for such type of contracts which are strategic? Can we expect more of such contracts, or this is one of a kind opportunity?
Speaker #3: Can we expect more of such contracts, or is this a one-of-a-kind opportunity?
Speaker #1: So this is, to be honest, this is what we're looking at. Because we're trying to give a solution to big pharma, where a lot of the large companies are procuring products from over 80 to 100 different sites. Because, over a period of time, they'll in-license products or get contract manufacturing.
Srinivas Sadu: To be honest, this is what we are looking at, because we are trying to give a solution to Big Pharma, where a lot of the large companies are procuring products from over 80 to 100 different sites. Because over a period of time, their in-licensed products are getting contract manufacturing. Now we are reaching out saying that we will give end-to-end solutions for them, for different markets. It also helps them in a way because currently the sites are in Europe, it is five to six times more expensive than India. It also helps to get market share in order to increase the market margins in the product what they are making.
Speaker #1: So now we are reaching out, saying that we'll give end-to-end solutions for them, for different markets. It also helps them in a way because currently, if the sites are in Europe, it's five to six times more expensive than in India.
Speaker #1: So, it also helps to get market share in ROW markets, increase the market margins in the products that we're making. And also, with the new situation of branded products to be manufactured in the US, if they want to move the branded parts to the US, then their own sites or the CDMO sites where they're doing it, then the operational leverage is lost.
Srinivas Sadu: Also with the new situation of branded products to be manufactured in US, they want to move the branded products to US than their own sites or the CDMO sites where they are doing, then the operation leverage is lost. Companies are looking at these kind of options, and with the track record we have on quality and the breadth of platforms we provide, it is helping us. Yeah.
Speaker #1: So companies are looking at these kinds of options. And with the track record we have on quality and the breadth of platforms we provide, it's helping us, yeah.
Saion Mukherjee: Great. Sir, just one more question before I join back. On CapEx, you had announced INR 2,000 crore CapEx. One is the timeline around that, and you also mentioned in your prepared remarks that new CapEx has also been approved by the board. Can you share a revised CapEx estimate now?
Speaker #3: Great. Sir, just one more question before I join back. On Capex, you had announced ₹2,000 crore Capex—one is the timeline around that, and now with these new initiatives, and you also mentioned in your prepared remarks that new Capex has also been approved by the board.
Speaker #3: So, can you share a revised Capex estimate now?
Speaker #1: So, I would say for one, immediate Capex is going to be about ₹165 crores. We're investing in an isolator line in the oncology plant, where several of these oncology products are being manufactured.
Srinivas Sadu: Parth, I would say for one immediate CapEx is going about INR 165 crores. We are investing in an isolator line in oncology plant, where several of these oncology products are getting manufactured. Luckily, we could get a line quicker, so that will be installed January of this year. This is specific, I would say, a priority for us in terms of for this project, what we just announced. There is another CapEx on the Neuland collaboration, what we said on the API front. Ravi?
Speaker #1: Luckily, we could get a line quicker, so that will be installed in January of this year. So, this is specifically, I would say, a priority for us in terms of this project—what we just announced.
Speaker #1: And there's another Capex on the Newland collaboration, what we said on the API front, right?
Speaker #3: Yeah. So for that, we'll be building a block. That has also been started in the project now. And to answer your question, Shyamakant, this year we are going to spend about ₹550 crores Capex.
Ravi Shekhar Mitra: Yeah. For that, we will be building a block. That also has been starting the project now. To answer your question, Shyam, this year, we are going to spend about INR 550 crores CapEx, and this will scale up as and when we start building the brownfield, which we have already announced earlier. Right now, the Suite 10 in Pashamylaram, we are adding a new vial line, BFS, and ophthalmic line. Along with the recently CDMO contract for which we need to spend CapEx of INR 165 crores mentioned just now. This is going to be our priority. Considering the demand and volume growth we are looking at, we need to look at brownfield or greenfield quickly, and that is what we are currently working on.
Speaker #3: And this will scale up as we start building the ground field, which we have already announced earlier. Right now, the suite 10 in Pashminaram—we are adding a new vial line, VFS, and ophthalmic line.
Speaker #3: So, along with the recent CDMO contract, for which we need to spend capex of ₹165 crore as mentioned just now, this is going to be our priority.
Speaker #3: And considering the demand and volume growth we are looking at, we need to look at brownfield or greenfield options quickly. And that's what we are currently working on.
Speaker #3: Okay, thank you. I'll join back.
Saion Mukherjee: Okay. Thank you. I will join back.
Speaker #1: Yeah.
Srinivas Sadu: Yeah.
Speaker #2: Thank you. Our next question comes from the line of Vivek Gautam with GS Investments. Please go ahead.
Operator 2: Thank you. Our next question comes from the line of Vivek Gautam with GS Investments. Please go ahead.
Vivek Gautam: So congratulations on good numbers, sir. Sir, I just wanted to understand how sustainable is the turnaround of Cenexi and what were the factors behind it. Was it the one subsidiary which was dragging our performance down, and now things have improved a lot? The second question is about what is the opportunity size for us, expected growth rate, and our differentiating factor in USP, which can help us in maintaining the growth ahead, sir. Thank you.
Speaker #4: On good numbers, sir. Good. I just wanted to understand how sustainable the turnaround of Synexi is and what were the factors behind it.
Speaker #4: And was it that one subsidiary which was dragging our performance down, and now things have improved a lot? The second question is about the opportunity size for us.
Speaker #4: Expected growth rate, and our differentiating factor—our USP—which can help us maintain the growth ahead. Thank you.
Speaker #1: So, from the growth front, you know, we did mention last time that we're looking at 15% CAGR in the next four or five years. With the new contract signing, you know, if you look at it from the current top line, I think this will cover almost like 12% of our current revenue.
Srinivas Sadu: From the growth front, we did mention last time that we are looking at 15% CAGR in next four, five years. With the new contract signing, as you look at from current top line, then this will cover almost 12% of our current revenue. If you look from three years down the line, probably it is still about 9% to 10%. So we are reevaluating the CAGR with few of other contracts we are discussing now with other partners. Probably next quarter, we will have more clarity on the growth for next four years. As of now, with this new contract in place, we are looking at around 20% growth next four years. While the current year, with the constant currency, we are not estimating, but probably 15% is clearly achievable. We are also looking at a couple of lines, like the bag line, ophthalmic products, we have a tight capacity constraint.
Speaker #1: So if you look three years down the line, probably it's still about 9 to 10%. So we're reevaluating the CAGR with a few other contracts we're discussing now with other partners.
Speaker #1: Probably next quarter, we'll have more clarity on the growth for the next four years. But as of now, with this new contract in place, we are looking at around 20% growth for the next four years.
Speaker #1: While the current year will still, with a constant currency, still—estimating, we're not estimating, but probably 15% is clearly achievable. But we're also looking at, you know, a couple of lines like the bag lines, ophthalmic products we have—tight capacity constraints.
Speaker #1: Bag line—we're expecting approval in the third quarter. If it happens as planned, then probably we can cross 15%. But it's a new line to be approved by the FDA.
Srinivas Sadu: Bag line, we are expecting approval in Q3. If it happens as planned, then probably we can cross 15%. It is a new line to be approved by FDA. If it is approved by August, September, then probably we will exceed the 15% growth for this year. Otherwise, the constant currency will stick to 15% and then see where it goes for the current year. I think next four years, we are looking at 20-odd percent. We will get a clear clarity next quarter. We will get clear clarity once we also see how the other initiatives which we have taken up in the recent past will pan out. Probably we will get a clear picture by August, September, October.
Speaker #1: So if it's approved by August, September, then probably we'll exceed the 15% growth for this year. But otherwise, we'll the constant currency will stick to 15% and then see where it goes for the current year.
Speaker #1: But I think in the next four years we're looking at around 20 percent. But we'll get clearer clarity next quarter. We'll give clear clarity once we also see how the other initiatives that we have taken up in the recent past will pan out.
Speaker #1: Probably we'll get a clear picture by August, September. September, October.
Speaker #4: Okay, sir. Thank you.
Vivek Gautam: Okay, sir. Thank you.
Srinivas Sadu: Yeah.
Speaker #1: Yeah.
Speaker #2: Thank you. Our next question comes from the line of Neha M. with Bank of America. Please go ahead.
Operator 2: Thank you. Our next question comes from the line of Neha M. with Bank of America. Please go ahead.
Speaker #5: Yeah. Thanks for taking my question. Sir, the 60% CDMO number that you have indicated for this quarter, if I were to look at FY28, probably exit, I understand there's big contractors coming in 29.
Neha Manpuria: Yeah. Thanks for taking my question. Sir, the 50% CDMO number that you have indicated for this quarter, if I were to look at FY28 probably exit, I understand those big contracts are coming in 2029, but in the next two years, how much of a business do you think would come from CDMO and how does it change our margin profile? Is it fair to assume that CDMO has much superior margins versus our existing standalone margins?
Speaker #5: But in the next two years, how much of a business do you think could come from CDMO and how does it change our margin profile?
Speaker #5: Is it fair to assume that CDMO has much superior margins versus our existing standalone margins?
Speaker #1: So the idea is to the idea is to balance between CDMO and B2B business. The the target is to reach as a console basis, you know, in a nearby near term we're looking at 30%.
Srinivas Sadu: The idea is to balance between CDMO and B2B business. The target is to reach as a consolidated basis, in the near term, we are looking at 30%, near term as a consolidated basis. Cenexi's growth, the target for Cenexi is the profitability on the top line. So we are working towards that. So today we are at 28% consolidated EBITDA percent. So near term, working towards 30%, and we will see mid-term to long-term. Ultimately, always, we look like a profitable company. We want to be a profitable company, hitting those 35% EBITDA. Hopefully, next three, four years we might reach there once we get all these CDMO contracts on track. But for near term, we are looking at, because we are also growing other businesses as well in the same range as CDMO, and it is a large base.
Speaker #1: Near term as a console basis. Synexi, growth, you know, the the the target for Synexi is the profitability on the top line. So we need to work we're working towards that.
Speaker #1: So today we are at 28% consol EBITDA percent, so near term in a way working towards 30%. And we'll see, mid-term to long-term, that ultimately we always look like a profitable company.
Speaker #1: We wanted to be a profitable company, hitting those 35% EBITDA. Hopefully, in the next three to four years, we might reach there once we get all these CDMO contracts on track.
Speaker #1: But for the near term, we're looking at it because we're also growing other businesses as well in the same range as CDMO. And it's a large base.
Speaker #1: So we still feel that once we hit CY20, probably there could be a skew, or the CDMO business will be larger than the B2B business.
Srinivas Sadu: We still feel once we hit CY29, probably there could be a skew that the CDMO business will be larger than the B2B business. But for probably next two years, it will be around 50/50 kind of a business. Yeah.
Speaker #1: But for probably the next two years, it will be around 50-50 kind of business. Yeah.
Speaker #5: Understood. And, you know, on the Synexi business, given that we have the impact of the heat wave in France, does that mean the second quarter would end up being better than the usual seasonal decline that we see because of the shutdown?
Neha Manpuria: Understood. On the Cenexi business, given that we have the impact of heat wave in France, does that mean that Q2 would end up being better than the usual seasonal decline that we see? Because of the shutdown, it won't be as sharp because some of the shipments would have moved to Q2. Is that a fair assumption?
Speaker #5: It won't be as sharp because some of the shipments would have moved to the second quarter. Is that a fair assumption?
Speaker #1: I'm sorry. Can you repeat that?
Srinivas Sadu: Sorry, can you repeat, Neha?
Speaker #5: I think so. You mentioned that, you know, Synexi was impacted because of the extreme summer in the first quarter. I understand that the second quarter usually tends to be seasonally weak.
Neha Manpuria: I think, sir, you mentioned that Cenexi was impacted because of the extreme summer in Q1. I understand that Q2 usually tends to be seasonally weak, but would the seasonality be lower because some of the shipments would have moved into Q2? Would that be a fair assumption?
Speaker #5: But would the seasonality be lower because some of the shipments would have moved into the second quarter? Would that be a fair assumption?
Speaker #1: It really I I would say it would be better than last last year, for sure. Some the some releases could happen last quarter because of the heat wave.
Srinivas Sadu: I would say it will be better than last year, for sure.
Neha Manpuria: Okay.
Srinivas Sadu: Some releases couldn't happen last quarter because of the heat wave. The impact was more on the quality release. That will help a bit the next quarter over the last year, yeah.
Speaker #1: The impact was more on the quality release, so that will help a bit in the next quarter—over the last year, yeah.
Speaker #5: And currently, we're still maintaining, you know, Synexi guidance of near $200 million and high single-digit margins for FY27?
Neha Manpuria: Currently, we're still maintaining Cenexi's guidance of near $200 million and high single-digit margins for FY27?
Speaker #1: That's correct. Yes.
Srinivas Sadu: That's correct. Yes.
Speaker #5: All right. Thank you for the question.
Neha Manpuria: All right. Thank you for the time.
Speaker #1: Yeah.
Srinivas Sadu: Yeah.
Speaker #2: Thank you. Our next question comes from the line of Ashish with Leo Capital. Please go ahead.
Operator 2: Thank you. Our next question comes from the line of Ashish with Leo Capital. Please go ahead.
Speaker #4: Hi, sir. Am I audible? Hello?
[Analyst] (Leo Capital): Hi, sir. Am I audible? Hello?
Speaker #1: Yeah, you're audible now, but just a bit.
Srinivas Sadu: Yeah, you are audible a bit.
Speaker #4: Yeah, yeah.
[Analyst] (Leo Capital): Yeah, yeah.
Speaker #1: Yeah. Yeah, go ahead.
Srinivas Sadu: Yeah. Go ahead.
Speaker #4: Yeah. So, on GLP-1, could you give us an update on the scale-up of the business? What is the current status of the commercialization and capacity ramp-up?
[Analyst] (Leo Capital): On GLP-1, could you give us an update on the scale-up of the business? What is the current status of the commercialization and capacity ramp-up?
Speaker #1: So, from a capacity standpoint, the new line is on track. We are taking some exhibit batches from some of the customers whom we have signed up in the last three quarters.
Srinivas Sadu: From capacity, the new line is on track. We are taking some exhibit batches from some of the customers whom we have signed up in last few quarters. We signed a new contract this quarter again, and the transfer activities will happen in next quarter or two. The new contract what we signed is both for semaglutide and tirzepatide, for US and the new markets. We are also evaluating, when we said that this year we are still trying to maintain the 50% constant currency growth. But there are also some positives could be upside. One of our customers has filed in Canada. It could be an opportunity to launch in the last quarter. If that happens, then there could be an upside. But otherwise, as of now, it is more of exhibit batches taking for different customers and then filing and then waiting for them to commercialize.
Speaker #1: We signed a new contract this quarter again. And the transfer activity will happen in the next quarter or two. The new contract that we signed is both for Shyamakant, and that is Zepatite.
Speaker #1: For US and EU markets. Now, we are also evaluating when we said that this year, we are still trying to maintain that 50% constant currency growth.
Speaker #1: But there are also some positives—could be upside. One of our customers who has filed in Canada, there could be an opportunity to launch in the last quarter if that happens.
Speaker #1: Then there could be an upside. But otherwise, as of now, it's more about exhibit batches being taken for different customers, and then filing and waiting for them to commercialize.
Speaker #4: And how should we think about the revenue potential or contribution from GLP-1 over the next three years?
[Analyst] (Leo Capital): How should we think about the revenue potential or contribution from GLP-1 over the next three years?
Speaker #1: Very limited. We have not assumed too much of that because the major volume will come from the US when it goes in FY30, 30, 31.
Srinivas Sadu: Very limited. We have not assumed too much of that because the major volume will come from the US when it goes in FY30, 2030, 2031. So we have not considered much in next few years other than the tech transfer fees, what we get per transfer. If anything happens in Canada or any other markets for the customers, because this is a CDMO business, we do not have a clear visibility on the front-end approval status for these products, so it is very difficult to assume the numbers for them. That is why we are keeping close to adjust how that pans out. That will be an upside if it pans out well.
Speaker #1: So we're not considered much in the next few years other than the the tech transfer fees what we get per transfer. So if anything happens in Canada or any other markets for the customers because these are the CDMO business, we don't have a clear visibility on the front end approval status for these products.
Speaker #1: So, it's very difficult to assume the numbers for them. So that's a way of keeping it close to our chest, you know, how that pans out.
Speaker #1: But that is an upside if it pans out well.
Speaker #4: Thank you, sir. Thank you, and all the best.
[Analyst] (Leo Capital): Thank you, sir. Thank you, and all the best.
Speaker #1: Yeah.
Srinivas Sadu: Yeah.
Speaker #2: Thank you. Our next question comes from the line of Chintan Sheth with Girik Capital. Please go ahead.
Operator 2: Thank you. Our next question comes from the line of Chintan Sheth with Girik Capital. Please go ahead.
Speaker #5: Yeah. You know, audible?
Chintan Sheth: Yeah. Am I audible?
Speaker #1: Yes.
Srinivas Sadu: Yes.
Speaker #5: Yeah, thank you. Thank you for the opportunity, and congrats on the good set of numbers as well as continuing to, you know, get some new gains and projections for our CDMO side.
Chintan Sheth: Yeah. Thank you. Thank you for the opportunity, and congrats for the good set of numbers as well as continue the customer win and project wins at our CDMO site. Just one clarification on the opening remarks with Cenexi revenue, you mentioned EUR 68 million and 2 million EBITDA.
Speaker #5: Just one clarification: on the opening with Synexi revenue, you mentioned €68 million and €2 million EBITDA. Is that correct?
Srinivas Sadu: EUR 48 million. Revenue is EUR 48 million. Yeah, EUR 48 million revenue and EUR 2 million EBITDA.
Speaker #1: Revenue is $48 million. Yeah, $48 million revenue and $2 million EBITDA.
Speaker #5: Okay. It's flat on a YY basis. But EBITDA numbers EBITDA number was okay. So EBITDA you mentioned that because of the extreme heat wave that that also impacted some some bit of profitability this quarter.
Chintan Sheth: Okay. It is flat on a year-on-year basis. EBITDA numbers Okay. EBITDA, you mentioned that because of the exchange details, that also impacted Cenexi profitability this quarter.
Speaker #1: No. I mean, it's the profitability is the same trend like what we said. 4% EBITDA. So at the end by the end of the year we want to get into double double digit EBITDA.
Srinivas Sadu: No.
Chintan Sheth: Okay.
Srinivas Sadu: The profitability is the same trend, like what we said, it is 4% EBITDA. So by the end of the year, we want to get into double-digit EBITDA.
Speaker #5: Okay. Because last year I think we were at 2% EBITDA which has improved to 2% this year. Okay. Got it. And and and in terms of you know, the the 15 products which are in pipeline the AMDs and the core development products what what could be the opportunity price for for this?
Chintan Sheth: Okay. Because last year, I think we were at 2% EBITDA, which has improved to 4%. Okay, got it.
Srinivas Sadu: Yeah.
Chintan Sheth: In terms of the 15 products which are in pipeline, the ANDAs and the co-development products, what could be the opportunity size for this? I think seven are 505(b)(2) and eight are ANDAs. If you can enter any timelines around those launches, if you can provide some insights.
Speaker #5: I think 7 or 5, 5 to 5 TB and 8 are ANDAs. If you can enter any timelines around those launches, if you can provide some insights.
Speaker #1: Yeah. That's okay.
Srinivas Sadu: In a second.
Speaker #5: Hello.
Chintan Sheth: Hello?
Speaker #1: Can we come back to exactly how much the market is?
Srinivas Sadu: Can we come back to exactly how much is the market worth?
Speaker #5: No. No no worries. No worries. And for for the year what kind of launch pipeline we are looking at? If you can any significant ones which which which can you know, we are swing factor for us in terms of growth.
Chintan Sheth: No worries. For the year, what kind of launch pipeline we are looking at? Any significant ones which can be a sweet success for us in terms of growth?
Speaker #2: Ladies and gentlemen, the line for the management team has disconnected. Please stay with us while we reconnect with the management.
Operator 2: Ladies and gentlemen, the line for the management team shall disconnected. Please stay with us while we reconnect with the management. Ladies and gentlemen, we have now reconnected with the management. Over to you, sir.
Speaker #1: Hello.
Speaker #2: Ladies and gentlemen, we have now reconnected with the management. Over to you, sir.
Speaker #5: So I was asking about the new launch pipeline for the current year. We launched four molecules this quarter. If you can provide some insight on which are the key molecules to look out for in the current year.
Chintan Sheth: I think you were talking about the launch pipeline for the current year. We launched four molecules this quarter. If you can provide some insight on which are the key molecules to look out for the current year, which can contribute to our growth, as we mentioned there is upside this year.
Speaker #5: Which can contribute to our growth, as you mentioned, there is upside this year.
Speaker #1: So, the products that we launched: we have launched MDI Multivitamin, we launched Dialba, and we also launched the Suramedics. And for the MDI, we have CGT exclusivity.
Srinivas Sadu: The products what we launched, we have launched M.V.I. multivitamin, we launched Dalbavancin, we also launched the Sugammadex. And the M.V.I., we have CGT exclusivity, so we do not see competition coming in soon. It is a very difficult product to make. Dalbavancin, while there is a competition, but still, we have enough contracts on place to continue for next few years.
Speaker #1: So we don't see competition coming in soon. It's a very difficult product to make. Dialba—while there is competition, we still have enough contracts in place to continue for the next few years.
Chintan Sheth: Expected launches, anything to call out for which one should focus on?
Speaker #5: And expected launches, anything to call out for which went through the focus on?
Speaker #1: We can come back to you later.
Srinivas Sadu: We can come back to you later.
Speaker #5: Sure.
Chintan Sheth: Sure.
Speaker #1: Yeah.
Srinivas Sadu: Yeah.
Speaker #5: I'll jump in. Thank you. Thank you.
Chintan Sheth: I will jump in. Thank you.
Srinivas Sadu: Sure.
Speaker #1: Sure.
Speaker #2: Thank you. Our next question is from the line of Karan Vora with Goldman Sachs. Please go ahead.
Operator 2: Thank you. Our next question is from the line of Karan Vora with Goldman Sachs. Please go ahead.
Karan Vora: Thank you for taking my question. My first question is with respect to the CDMO business. Just wanted to get a sense with respect to, do we have, in the current base, any products which we are supplying which have patent protection? What would that number look like, say 3 or 5 years out?
Speaker #5: Thank you for taking my question. My first question is with respect to the CDM business. So I just wanted to get a sense with respect to do we have in the current base any products which we are supplying to say supplying which are which have patent protection and what what would that number look like say three or five years out?
Speaker #1: We cannot reveal those numbers because some of them belong to customers. There are a few products which are under firefight duty, which are also patents.
Srinivas Sadu: We cannot reveal those numbers because some of these belong to customers. There are a few products which are under 505 which has also patents. If you are talking about innovative products, no, we do not have any innovative products right now.
Speaker #1: But if we're talking about innovative products, no, we don't have any innovative products right now.
Speaker #5: Okay. And anything in the pipeline? Just qualitatively.
Karan Vora: Okay. Anything in the pipeline, just qualitatively?
Speaker #1: It's under discussion, so it's not yet signed.
Srinivas Sadu: It is under discussion, so it is not yet signed.
Speaker #5: Okay, got it. And is it fair to assume that some of them could also be on the bio side, where we were investing in the bio CDMO front, or is this mainly on the small molecule side, in terms of the discussions we are having?
Karan Vora: Okay. Got it. Is it fair to assume that some of them could also be on the bio side where we were investing in the bio CDMO front, or is this mainly on the small molecule side, what discussions we are doing?
Speaker #1: It will be on the peptide side, if that answers the question.
Srinivas Sadu: It will be on the peptide side, if that answers your question.
Speaker #5: Okay, got it. Got it. And my second question is with respect to the base business growth. I think we've changed some disclosures.
Karan Vora: Okay. Got it.
Srinivas Sadu: Yeah.
Karan Vora: My second question is with respect to the base business growth. I think we have changed some disclosures. I just wanted to get a sense on what is the ex Cenexi growth in the US and ROW markets.
Speaker #5: So, just wanted to get a sense on what is the X and XC growth in the US and ROW markets.
Speaker #1: So the base business has grown by 24%.
Srinivas Sadu: The base business has grown by 24%.
Speaker #5: So, similar for US and ROW markets?
Karan Vora: Similar for US and ROW markets?
Speaker #1: Give me a second. The US has grown by 32%.
Srinivas Sadu: Just a second. US has grown by 32%.
Speaker #5: Oh, okay. US 32%, and ROW? And what could—and what would also be the constraint currency number within that?
Karan Vora: Okay. US 32% and ROW. What would also be the constant currency number within that?
Speaker #1: The constraint currency, you can remove forex gain—around 5%. Out of the base business, 24, 5% can be because of the forex gain.
Srinivas Sadu: The constant currency, it is in demo. Forex gain around 5%. Out of the base business 24%, 5% can be because of the Forex gain.
Karan Vora: Got it.
Speaker #1: So, around 20%, around 20%. Nineteen, twenty percent.
Srinivas Sadu: Around 20%, 19%, 20%.
Speaker #5: Thank you.
Karan Vora: Thank you.
Speaker #2: Thank you. Our next question comes from the line of Sayon Mukherjee with Nomura. Please go ahead.
Operator 2: Thank you. Our next question comes from the line of Saion Mukherjee with Nomura. Please go ahead.
Speaker #5: Yes, thank you for the follow-up. So, just like you know, you have also announced the other two contracts. One is with Newland for, I think, API, and then there's a contract in China for a liposomal product.
Saion Mukherjee: Yes, thank you for the follow-up. Sir, just like you have also announced the other two contracts. One is with Neuland for, I think, API, and then there's a contract on China for a liposomal product. In terms of revenue potential, how should we think about these and what are the timelines for the revenue from these two contracts? I think China, you mentioned 2030, right?
Speaker #5: In terms of revenue potential, how should we think about these, and what are the timelines for the revenue from these two contracts? I think China, you mentioned 2030, right?
Speaker #1: Yeah. So that's a more liposomal product, in-licensing product, where they have already developed this product and it is approved for the China market using EU R&D.
Srinivas Sadu: Yeah. So that's a more liposomal product in licensing product where they have already developed this product and it's approved for China market using EU R&D. It's a $3 billion product, estimated $3 billion in next 3 years. Currently, it's $1.6 billion globally and US about $600, $700 million. So we got rights for US and EU. The technology will transfer, so we will be investing in a compounding suite specifically needed for this. That technology will transfer here, and then the BE study will happen, and then we'll file in US. So they're in production for this product, so we'll try to be there by the patent expiry date. On the Neuland API, we actually had this supply agreement with them before as well in the current suite. But this is an extension of this. We are building a new suite for them.
Speaker #1: It's a $3 billion product. Estimated at $3 billion in the next three years. Currently, it's $1.6 billion globally, and in the US, about $600–700 million.
Speaker #1: And so we got rights for US and EU, and the technology will be transferred. So we will be investing in a compounding suite specifically needed for this.
Speaker #1: And the technology will be transferred here, and then the BU study will happen, and then we'll file in the US. So, there's a patent protection for this product.
Speaker #1: So, we'll try to be there by the patent expiry date. On the Newland API, we actually had this supply agreement with them before as well, in the current suite.
Speaker #1: But this is an extension of this. We are building a new suite for them. We cannot really disclose the revenue, but it's more a strategic thing where we're trying to give end-to-end solutions for even other clients who are looking at finished products as well.
Srinivas Sadu: We cannot really disclose the revenue, but it is more a strategic thing where we are trying to give end-to-end solutions for even other clients who are looking at finished product as well. Because we have a microparticle depot technology also with us, and very few companies offer sterilization of APIs as well. Current capacity is fully occupied, and currently we are only manufacturing two APIs. There is another set of five to six products which will fall into this category, which will need this expansion. This will ease out our current capacity constraint because there are also requirements from other customers who want this service from us. Also we also have this pipeline of products which we need to develop, so we need that capacity as well. It is more a strategic thing.
Speaker #1: Because we have a microparticle depot technology also with us, and very few companies offer sterilization of APIs as well. So, current capacity is fully occupied, and currently we're only manufacturing two APIs.
Speaker #1: There are another set of five to six products which will fall into this category for which we need this expansion. So, this will ease out our current capacity constraint because there are also requirements from other customers who want this service from us.
Speaker #1: And also we are since have this pipeline of products which we need to develop. So we need that capacity as well. So it's more a strategic thing it's a combination of what revenue we get from that collaboration as well as what we can get moving forward for our own from our own products and the new contracts what we'll sign from the current capacity.
Srinivas Sadu: It is a combination of what revenue we get from that collaboration as well as what we can get moving forward from our own products and the new contracts what we will sign from the current capacity.
Speaker #5: Okay. So understood. So my other question was you know on your complex ANDA pipeline I think you have like twenty twenty five such products.
Saion Mukherjee: Okay, sir. Understood. My other question was, on your complex India pipeline, I think you have 20, 25 such products. Generally what we see is that, a few of them tend to be pretty large. In that sense, those large or the largish opportunities that you have, is that an FY29 kind of an opportunity or something which will be after FY29, you think?
Speaker #5: And you know generally what we see is that you know a few of them tend to be pretty large. Is in that sense those large or the largest opportunities that you have you know is that an FY29 kind of an opportunity or something which will be after FY29 you think?
Speaker #1: It's post-29. Some of the big products, especially the microsphere products—there are a couple of big ones, which is post-29. So, currently, they are at different stages.
Srinivas Sadu: It is post 2029. Some of the big products, especially on the microsphere products, there are a couple of big ones which is post 2029. Currently they are at different stages. Some at the technical stage and some at the exit stage, I would say. There are different stages, but some under patent post 2029. Most of the big things are post 2029, yes.
Speaker #1: Some at the clinical stage and some at the exhibit stage, I would say. So there are different stages, but some are under patent post-29.
Speaker #1: But most of the big, big things are post-2029. Yes.
Speaker #5: Okay. And so also it I understand that you know you have in your in your US filings or what you are developing or what you have filed there's a bunch of you know products which are like para one para two para three like you know which are probably already generic.
Saion Mukherjee: Okay. And sir, also I understand that you have in your US filings or what you are developing or what you have filed, there is a bunch of products which are like Para I, Para II, Para III, which are probably already generic. Is that a large opportunity and how should we think about Gland trying to develop such, which seem to be old products?
Speaker #5: Is that a large opportunity and you know how should we sort of think about you know Gland sort of trying to develop such which seem to be old kind of old products?
Speaker #1: So, some products are, you know, developed many years ago—that’s one. Second is, we also see a lot of these products where companies are exiting.
Srinivas Sadu: Well, some products are developed many years ago. That is one. Second is, we also see a lot of these products where companies are exiting. There is still value in it as an injectable company. There are several products where there was no revenues many years ago, actually are doing well now. As an injectable company, we need to have that portfolio. The portfolio what we have developed 15 years back, probably those are also there in that list what you are seeing, where there was no NDF fees and the development was far cheaper than what we do today. That is why that portfolio got developed over the many years.
Speaker #1: There is still value in it as an injectable company. And several products where there were no revenues many years ago actually are doing well now.
Speaker #1: So, as an injectable company, we need to have that portfolio. And the portfolio that we developed fifteen years back, probably those are also there in that list that you're seeing.
Speaker #1: There were no NDA fees, and the development was far cheaper than what we do today. So that's why that portfolio got developed over many years.
Speaker #5: Right. Right. And so now your US base revenue would be ninety five hundred million dollars right? Current run rate. And how I mean so how should that sort of play out with all these launches over the next three four years you think?
Saion Mukherjee: Right. And sir, now your US base revenue would be $9,500 million. Right? Current run rate. So how should that play out with all these launches over the next three, four years, you think?
Speaker #1: It's a bit more than a hundred million.
Srinivas Sadu: It is a bit more than $100 million.
Speaker #5: Okay.
Saion Mukherjee: Okay.
Srinivas Sadu: It's about $110 million, $120 million. Yeah. Correct.
Speaker #1: It's about one hundred and ten point one million. Yeah, correct.
Speaker #5: So Richard can you repeat?
Saion Mukherjee: Sorry, sir. Can you repeat?
Speaker #1: Sorry, sorry. Tell me. Go ahead.
Srinivas Sadu: Sorry. Sorry, go ahead.
Speaker #5: No, sir. You said a hundred, more than a hundred million, currently.
Saion Mukherjee: No, sir. You said more than $100 million currently.
Speaker #1: Yes sir. Correct. Correct.
Srinivas Sadu: Yes, sir. Correct.
Speaker #5: And how should that you know play out like over the next say three years as you launch these products? Do you think it should it will materially go up or it would sort of have a more modest growth like most generic companies?
Saion Mukherjee: How should that play out over the next, say, 3 years as you launch these products? Do you think it will materially go up, or it would sort of have a more modest growth like most generic companies?
Speaker #1: So, we are getting to newer modalities also in this space. If you look at it, the entire market is growing probably three to four percent.
Srinivas Sadu: We are getting into newer modalities also in this space. If you look at the entire market, it is growing probably 3%, 4%. But then you have to see which are the products where we do not have, and what is our base, and what products we actually never launched. If we launch those products, what will be the growth, right? I mean, that is how we have to look at this. We still feel there is a growth of that business. It is not that it is completely low. But then the other thing is with the efficiencies what we have in operations, we are able to compete more and grow our own business. So one is how the market is growing, second is how we are growing.
Speaker #1: But then you have to see which are the products where we don't have, and what is our base. And what products we actually never launched.
Speaker #1: If we launch those products, what will be the growth, right? I mean, that's how we have to look at this. So we still feel there's growth in that business.
Speaker #1: It's not that it's completely low. But then, the other thing is, with the efficiencies we have in operations, we are able to compete more and grow our own business.
Speaker #1: So, one is how the market is going. Second is how we are growing. If you look at the market growth versus our growth in the US, our growth is always far higher than the market growth.
Srinivas Sadu: If you look at the market growth versus our growth in the US, it is always far higher than the market growth because of the new launches what we do and also the current products, what is secured by others, we are able to garner that market share to us because of our better cost structure.
Speaker #1: Because of the new launches we do, and also the current products that are secured by others, we're able to garner that market share to us because of our better cost structure.
Saion Mukherjee: Mm-hmm. Okay, sir. Great, sir. Thank you.
Speaker #5: Okay, sir. Great, sir. Thank you.
Speaker #2: Thank you. Our next question comes from the line of Malik Waria with Three Sixty One. Please go ahead.
Operator 2: Thank you. Our next question comes from the line of Maulik Varia with 361. Please go ahead.
Speaker #3: Yeah. Hi, sir. Thank you for the opportunity. I hope I'm audible. I just wanted to understand if there's any progress or update from our Dr. Reddy's partnership on the biologics.
Maulik Varia: Yeah. Hi, sir. Thank you for the opportunity. I hope I am audible. Just wanted to understand if there is any progress, any update from our Dr. Reddy's partnership on the biologics. We were also negotiating with one more partner to set up additional capabilities. Is there any update there?
Speaker #3: And we were also negotiating with one more partner to set up additional capabilities. So, is there any update there?
Speaker #1: Currently, it's normal business, I would say. It's generating around about fifty or sixty gross a year, and probably it will slowly ramp up a bit in the next year or two.
Srinivas Sadu: Currently, it is normal business, I would say. It is generating around INR 50, 60 crores a year, and probably it will slowly ramp up a bit in the next year or two. But as such, there is not a big contract which we have signed up in the recent past.
Speaker #1: But as such, there aren't any big contracts which we have signed in the recent past.
Speaker #3: Okay. Okay. So, going ahead, with regard to our complex portfolio, I understand that the contribution is lower currently. But going forward, would you be able to give us some direction on how much, as a percentage of our portfolio or in terms of revenue, the complex products could become?
Maulik Varia: Okay. And, sir, going ahead, from our complex portfolio, I understand that the contribution is lower currently. Going ahead, would you be able to give us some direction how much, as a percentage of our portfolio or in terms of revenue, would the complex products become?
Speaker #1: Because most of the complex products are post-FY29, and you know, our base business is also very large now compared to that, right?
Srinivas Sadu: Because most of the complex products is post FY29, and our base business is also very large now compared to that, right? While probably it will take a larger chunk of the US business. I cannot give an exact number because the timing of each product is different. It will take quite a share of the total business once it gets there. When you are saying the growth, what we are saying, over 20%, 25%, 20% when you are growing next four years, at the end of those four years, probably these products will get launched, and probably the next growth driver would be these products as well.
Speaker #1: So, while it will probably take a much larger chunk of the US business, I can't give an exact number because the timing of each product is different.
Speaker #1: But it will take quite a share of the total business once it gets there. But when you're saying the growth, what you're saying—over 20-25 percent, 20 percent—when you go next four years, at the end of these four years, probably these products will get launched, and probably the next growth driver would be these products as well.
Speaker #3: Okay, okay. Thank you, sir. Thank you.
Maulik Varia: Okay. Thank you, sir. Thank you.
Speaker #1: Yeah.
Operator 2: Thank you. Ladies and gentlemen, to ask a question, you may please press star and one. Our next question is from the line of Rahul Jeewani with IIFL. Please go ahead.
Speaker #2: Thank you. Ladies and gentlemen, to ask a question you may please press star and one. Our next question is from the line of Rahul Jeevani with IIFL.
Speaker #2: Please go ahead.
Speaker #4: Yeah. Hi, sir. Thanks for taking the question. So, can you call out the constant currency growth for the quarter on a consolidated basis?
Rahul Jeewani: Yeah. Hi, sir. Thanks for taking the question. Can you call out the constant currency growth for the quarter on a consolidated basis? We reported 20% growth in INR terms. What was the constant currency growth at the company consolidated levels?
Speaker #4: So we reported 20% growth in INR terms. So what was the constant currency growth at the company consolidated level?
Speaker #3: It's fifteen percent now.
Srinivas Sadu: It is 15%, Rahul.
Rahul Jeewani: 15%? Ravi, that calculation is not clear to me because if I look at your Cenexi revenue, the Cenexi revenue would have been flat year-over-year. Let us say the USD INR on a year-over-year basis has depreciated by almost close to 10%. This number looks a bit high to me in terms of constant currency growth.
Speaker #4: Fifteen percent. So, your calculation isn’t clear to me, because if I look at your Senix fee revenue, the Senix fee revenue would have been flat year-over-year.
Speaker #4: And let's say the USD/INR on a year-over-year basis has depreciated by almost close to 10%. So this number looks a bit high to me in terms of constant currency growth.
Speaker #3: So, it's a basis of when the products are dispatched. It's not uniform across everything, so average-wise you cannot take. So, we have to look at the rate on the particular date of supply and then see the effects or impact.
Srinivas Sadu: It is a basis of when the products are dispatched. It is not uniformly across every. Average-wise, you cannot take. We have to look at the rate on the particular date of supply and then see the effects impact.
Speaker #4: Okay. And this 15% constant currency growth which we got, then if we are using, let's say, the date of shipment of the contract, then it becomes very difficult for you to project the constant currency growth.
Rahul Jeewani: Okay. This 15% constant currency growth which we guide, if we are using, let's say, the date of shipment of the contract, then it becomes very difficult for you to project the constant currency growth now. Wouldn't that be the case?
Speaker #4: Now, wouldn't that be the case?
Speaker #3: No, for projection, we take constant currency only. For FX movement, we cannot predict. So all of the projection or guidance we are giving is based on constant currency.
Srinivas Sadu: No. For projection, we take constant currency only. For Forex movement, we cannot predict. All our projection or guidance that we are giving is the basis of constant currency.
Speaker #4: Okay. Sure. Sure. And sir in the past when for a base business when we had the two sets of businesses which was IP led and then the tech transfer business our understanding was that the tech transfer business used to be lower margin for us as compared to the the IP owned business.
Rahul Jeewani: Okay. Sure, sir. In the past, for our base business, when we had the two sets of businesses, which was IP-led and then the tech transfer business, our understanding was that the tech transfer business used to be lower margin for us as compared to the IP-owned business. Now, for this new CDMO contract which you have won, while this business is tech transfer, would the margins on this tech transfer CDMO business be higher than, let's say, what we would have done on an IP-owned business?
Speaker #4: Now for this new CDMO contract which you have won, while this business is tech transfer, would the margins be higher than, let's say, what we would have done on an IP-owned business?
Speaker #1: So, the IP-owned business actually, we are sharing the profit also with the front-end partner. And the tech transfer, see there in the CDMO, there are two kinds.
Srinivas Sadu: The IP on business, actually, we are sharing our profit also with the front-end partner. The tech transfer, see, in the CDMO, there are two kinds. One is the B2B tech transfer, when we say it is coming from a development lab or another company, and then we are taking exclusivity. In the current CDMO, there are two types of business. One is this, which is smaller portion. The other is the commercialized products coming out from US and Europe, which are more expensive places to manufacture. There, we have a leverage where we can have a better margin profile and also the type of products what we are going to make for these companies.
Speaker #1: One is the B2B tech transfer, when you say it's coming from a development lab or another company, and then we are taking exhibits in Florida in the current CDMO—the two types of business.
Speaker #1: One is this, which is a smaller portion. The other is it's a commercialized product coming out from the US and Europe, which are more expensive places to manufacture.
Speaker #1: So there, we have a leverage where we can have a better margin profile, and also the type of products that we are going to make for these companies.
Speaker #4: Okay, sure, sir. That's a common thing. Thank you.
Rahul Jeewani: Okay, sure, sir. That's it from my side. Thank you.
Speaker #1: Yeah.
Speaker #2: Thank you. Our next question comes from the line of Alankar Garude with KIE. Please go ahead.
Operator 2: Thank you. Our next question comes from the line of Alankar Garude with Kotak Institutional Equities. Please go ahead.
Speaker #4: Hi. Thank you for the opportunity. Sir, if we go back a few years, CDMO was relatively much smaller for the company. Can you highlight the top three or four factors that have given strong growth in the segment over the past few years and are also driving the healthy outlook going ahead?
Alankar Garude: Hi. Thank you for the opportunity. Sir, if we go back a few years, CDMO was relatively much smaller for the company. Can you highlight the top three, four factors that have driven strong growth in this segment over the past few years and are also driving the healthy outlook going ahead?
Speaker #1: So, so one is of course, you know, the portfolio—what we have, you know, we are kind of running out of the portfolio in a large one.
Srinivas Sadu: One is, of course, the portfolio, what we have. We're kind of running out of the portfolio in the large one. That's one. Second, the opportunity out there. While everybody talks about the pressure on generic pricing, at the same time, there's an opportunity for players like us because there are companies or leading pharma companies whose manufacturing base is in expensive countries. That opens up a door for us where we have better operational leverage and better history of quality, and then at scale we can do. So that opens up an opportunity for them where the margins are going down at the end market, so they need to compete. They need to take those products to a place where they can manufacture cheap. I think that's where it opened up. That's when we thought.
Speaker #1: That's one. Second, the opportunity out there—while everybody talks about the pressure on GND pricing, at the same time there is an opportunity for players like us because there are leading pharma companies whose manufacturing base is in expensive countries.
Speaker #1: That opens up a door for us where we have better operating leverage and a better history of quality, and then at scale we can do more.
Speaker #1: So that opens up an opportunity for them, where the mines are going down at the end market. So they need to compete. So they need to take those products to a place where they can manufacture cheap.
Speaker #1: I think that's where it opened up. That's when we thought, and we also see in interacting with a lot of these customers over the years, they have like three or four hundred people just managing these relationships across sixty or seventy different sites and different companies.
Srinivas Sadu: And we also seen interacting with a lot of these customers over the years. They have like 3,400 people just managing these relationships across 60, 70 different sites and different companies. So now we kind of approach them and saying that we will give a full proof solution. You can get three or four different sites under one company with a raft of platforms under one roof. That is how this got evolved because we looked at opportunity, where probably everybody is saying that there is no money in generics, but we are saying, "Okay, our strength is in manufacturing and quality. Why can not we leverage that to offer these services so that they will be more competitive?
Speaker #1: So now we kind of approach them and say that we'll give a full, true solution. We can get three or four different sites under one company.
Speaker #1: We were at top platforms under one roof. That's how this got evolved, because we looked at the opportunity where probably everybody's saying that there's no money in generic.
Speaker #1: But we're saying, okay, our strength is in manufacturing and quality. Why can't we leverage that to offer these services so that we'll be more competitive?
Speaker #4: Got it, sir. That's helpful. Two smaller questions—one is, can you highlight the profit share in this quarter?
Alankar Garude: Got it, sir. That is helpful. Two smaller questions. One is, can you highlight the profit share in this quarter?
Speaker #1: Profit share is about 9%.
Srinivas Sadu: Profit share is about 9%.
Speaker #4: Okay. And the final one is, can you reconfirm the timelines for the NDDS project?
Alankar Garude: Okay. The final one is, can you reconfirm the timelines for the NDDS project?
Speaker #1: The NDDS project is about $29 million.
Srinivas Sadu: The NDDS project is 2029.
Speaker #4: Twenty eight.
Speaker #1: Twenty-eight, sorry, twenty-eight, and commercialized twenty-nine.
Shriniwas Pradeep Dange: 28.
Shriniwas Pradeep Dange: 2028, sorry. 2028 and commercialize 2029.
Speaker #4: Got it. And with the revenue potential of $25 to $30 million.
Alankar Garude: Got it. With a revenue potential of $25 to $30 million.
Speaker #1: That's correct.
Srinivas Sadu: That is correct.
Speaker #4: Got it, sir. That's it from my side. Thank you.
Alankar Garude: Got it, sir. That is it from my side. Thank you.
Speaker #2: Thank you. Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to the management for closing comments.
Operator 2: Thank you. Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Speaker #2: Over to you sir.
Speaker #1: Thank you, everyone, for joining us today. We appreciate your participation in the question-and-answer session during the call. If you have any follow-up questions, please feel free to reach out to us.
Shriniwas Pradeep Dange: Thank you everyone for joining us today. We appreciate your participation in the question and answer session during the call. If you have any follow-up questions, please feel free to reach out to us. We look forward to connecting with you again next quarter. Thank you.
Speaker #1: We look forward to connecting with you again next quarter. Thank you.
Operator 2: Thank you. On behalf of Gland Pharma Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your line.
