Q1 2027 Gland Pharma Ltd Earnings Call

August 10, 2026

Speaker #1: Ladies and gentlemen, good day and welcome to the Gland Pharma Limited Q1 FY27 earnings conference call. As a reminder, all participants 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Srinivas P Dange, Investor Relations at Gland Pharma Limited. Thank you, and over to you, sir.

Operator: 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 touchtone phone. Please note that this conference is being recorded. 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 #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, Darvi. Good evening, everyone. We welcome you to Gland Pharma earnings conference call for Q1 of FY27. I'm Srinivas Dange from the Investor Relations team at Gland Pharma.

Shriniwas 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 Sadhu, 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. Sadhu, 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. Sadhu for his opening remarks.

Speaker #2: Today, we have Mr. Srinivas Sadhu, Executive Chairman, and Mr. Ravi Mitra, Chief Financial Officer, from the India office. We will begin the call with the business and operational highlights from Mr. Sadhu, 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 transcript will be available on our website shortly.

Speaker #2: With that, I hand over the call to Mr. Sadhu 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 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 growth levers 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 viability to consistently execute on multiple growth goals, 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 by recent product launches and progression of existing commercial programs.

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 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 customer engagement remains strong, and we continue to attract robust global pharmaceutical companies seeking reliable sterile manufacturing partners. Our pipeline of development and commercial opportunities remains healthy, and provides good visibility for future growth.

Speaker #3: We 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 revenues stood at rupees 9,088 million, contributing 50% of total revenues, and recorded healthy growth of 19% year-on-year.

Speaker #3: 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: 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 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. 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. MVI and dalbavancin 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: MDI and Dablavanshin have witnessed an encouraging launch and continue 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 for 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 for 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 rupees 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 ingestibles, 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, with a technology transfer manufacturing supply as a portfolio sterile injectables to the global markets.

Srinivas Sadu: We continue to see strong customer interest and a group 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, lyos, 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 year 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 at 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 carrying 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 at 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 the China-based development company, for the development, manufacturing, commercialization of a niche liposable 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 by 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 three ANDAs, received seven approvals, and launched four 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 we have 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-sous-Bois facility delivered a good performance, benefiting from the production ramp-up of a 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 we've 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 will add approximately 30 million ampules of annual capacity. For 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-Saint-Clair 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. We are seeing encouraging customer demand trends, improving utilization levels, and a steadily strengthening operating profile. Combined with ongoing cost optimization measures, we remain optimistic about the site's performance trajectory. In Benelux, 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 and new business generation across our European operations.

Speaker #3: At the Haraville 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 a steadily strengthening operating profile. Combined with ongoing cost optimization measures, we remain optimistic about the site's performance trajectory.

Speaker #3: In Benalude, 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. Sadhu. 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 as 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 Senexi, continue to increase, Senexi is now fully integrated into our 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 contribution 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 operational 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 723 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 and 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 rupees 4,930 million, with EBITDA margin at 27%, higher as compared to 24% in corresponding quarter of 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.

Speaker #1: 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 ₹612 million in Q1 FY26. During the quarter, there was a forex loss of ₹36 million, which is included in other expense, as compared to a forex gain of ₹508 million in Q4 FY26 and ₹39 million in Q1 FY26, both 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-à-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.

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.

Srinivas Sadu: Capital expenditure during the quarter amounted to INR 1,132 million, primarily towards capacity expansion projects, capability enhancement initiatives, infrastructure additions, and investment 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. Ongoing projects are vial, ophthalmic, BFS lines, and liposome 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.

Ravi Shekhar Mitra: Capital expenditure during the quarter amounted to INR 1,132 million, primarily towards capacity expansion projects, capability enhancement initiatives, infrastructure additions, and investment 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. Ongoing projects are vial, ophthalmic, BFS lines, and liposome 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.

Speaker #1: As discussed earlier, we have commenced execution of a recently announced ₹2,000 crore growth capital expenditure program. Ongoing projects of vial ophthalmic, DFS lines, and liposome products, among others, at our India sites remain on track.

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 Senexi, the growth capex for the addition of new block with vial and lyos at BLA and high-speed ampule line at Fontenay are also on track to finish by the end of next year.

Ravi Shekhar Mitra: At Cenexi, the growth CapEx for the addition of new block with vial and lyos at Dundigal and high speed and tool line at Fontenay-sous-Bois are also on track to finish by the end of next year. Overall, we are pleased with the strong start to 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. 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: Overall, we are pleased with the strong past two start-to-FY27 quarters, which reflect 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 and optimal cash deployment priorities, we believe we are well-positioned to deliver sustainable growth while maintaining a strong profitability profile.

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 the touchstone 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 touch-tone 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.

Operator: 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 touch-tone 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 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 Mukherjee 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, to 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 to 100 million of peak revenue potential. So how should we think about once the commercialization starts in 2029, how would be the revenues ramp up to those levels of USD 90 to 100 million please? 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.

Speaker #3: 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 based?

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.

Srinivas Sadu: This is a specialty pharma global company. Their revenues are mix of generics as well as complex and specialty pharma. Probably 30% to 40% of the revenue comes from specialty business. The portfolio worth getting transferred to, these are all from Indian sites, the manufacturing happening at Indian sites. It is 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. The estimate what we gave is the preliminary view of the products, what is getting transferred in next two years. Probably there is 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 will be filing certain.

Speaker #1: So the portfolio what 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, across several 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 you gave is the preliminary view of the products that are getting transferred in the next two years.

Speaker #1: The product—probably there's a potential to add more products in the future. Now, the direct transfer activities will start from September of this year.

Speaker #1: And the first year of process 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.

Srinivas Sadu: 60% of the products are for the US market. About 50%, I would say. 30% to 35% to European market and the rest of the world are about 15% to 20%. Cenexi plays a little part in this as well. They wanted an end-to-end solution for the products because it has the global supply. Some of the products which go to Europe, Cenexi will warehouse certain products and probably package few and also do a final QP release one for the European market. That is the role Cenexi will play, but basically the agreement is in Gland and manufacturing will happen at Gland manufacturing sites. To be fair, without Cenexi, this wouldn't have happened in a way. That also strengthens our strategic initiative when we acquired Cenexi because otherwise, we couldn't have provided the full test solution for the partners.

Speaker #1: 30 to 35 percent to the European market, and the rest of the world is about 50 to 20 percent. The Senexi plays a little part in this as well.

Speaker #1: They wanted an end-to-end solution for the products because it has the global supply. So, some of the products which go to Europe, Senexi will warehouse certain products, and probably package a few, and also do a final QP release for the European market.

Speaker #1: So that's the role Senexi will play, but basically, the agreement is in Gland, and manufacturing will happen at Gland manufacturing sites. To be fair, without Senexi, this wouldn't have happened in a way.

Speaker #1: So that's also a statement of our strategic initiative when we acquired Senexi, because otherwise, you know, we couldn't have provided the full, full-fledged 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 of the CV30 format.

Srinivas Sadu: The revenues will ramp up from 2029 because the filings will start happening from next year. As soon as the products get approved, especially the US ones, it is an easier one because it is a CBE-0 format. Then it started getting launched in CY29.

Speaker #1: So then it started getting launched in CY29. So 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 interesting. Thank you. And I just wanted to understand, like, you know, could we expect or are you, like, looking for such a type of contract which are, like, such strategic?

Saion Mukherjee: That is very clear, sir. Thank you. I just wanted to understand, could we expect or are you looking for such type of contracts which are such 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, like, 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, their in-licensed products are getting 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-license 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. So it also helps to get market share in order that the markets increase their market margins in the products 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 the sites in Europe are five to six times more expensive than in India.

Speaker #1: So, it also helps to get market share in order that the markets increase the market margins in the products they're making. And also, with the new situation of branded products to be manufactured in the US—they want to move the branded products to the US, then their own sites or the CDMO sites where they're doing—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, then their own sites or the CDMO sites that they are doing, then the operation leverage is lost. So companies are looking at these kind of options. With the track record we have on quality and the breadth of platforms we provide, it is helping us.

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.

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.

Saion Mukherjee: Great. Sir, just one more question before I join back. On CapEx, you had announced INR 2,000 crores CapEx. One, is the timeline around that, and with these new initiatives, 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: And now, with these new initiatives, and you also mentioned in your prepared remarks that new capex has also been approved by the board. So, can you share a revised capex estimate now?

Speaker #1: So perhaps I would say, for one, immediate Capex is going to be about ₹165 crores for investing in an isolated line in the oncology plant, where several of these oncology products are getting 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. And 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 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, sir, this year we are going to spend about ₹550 crore in Capex.

Srinivas Sadu: Yeah. For that, we will be building a block. That also has been started, the project now. To answer your question, 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 had 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 pretty quickly, and that is what we are currently working on.

Ravi Shekhar Mitra: Yeah. For that, we will be building a block. That also has been started, the project now. To answer your question, 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 had 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 pretty quickly, and that is what we are currently working on.

Speaker #3: And this will scale up as—I mean, we start building the ground field, which we already announced earlier. Right now, the Suite 10 in Bashmer Alam, we are adding a new vial line, BFS, and ophthalmic line.

Speaker #3: So, along with the recent CDMO contract for which we need to spend capex of ₹165 crores, 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 quickly. And that's what we are currently working on.

Speaker #3: Okay, thank you. I'll join that.

Saion Mukherjee: Okay. Thank you. And 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.

Operator: Thank you. Our next question comes from the line of Vivek Gautam with GS Investments. Please go ahead.

Speaker #4: No problem. Congratulations on the good numbers, sir. I just wanted to understand how sustainable the turnaround of the Senexi is and what the factors behind it were.

Vivek Gautam: Sir, congratulations on good numbers, sir. I just wanted to understand how sustainable is the turnaround of Cenexi and what were the factors behind it, and was it the one subsidiary which was dragging our performance down and now things have improved a lot? The second question is about the, 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. Thank you.

Speaker #4: And 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, the expected growth rate, and our differentiating factor or USP which can help us in maintaining the growth ahead.

Speaker #4: Thank you.

Speaker #1: So, from the growth plan, you know, we did mention last time that we're looking at 15% CAGR in the next four to five years. With the new contract signing, if you look at the current top line, I think this will cover almost 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 we look at from current top line, then this will cover almost 12% of our current revenue. If you look three years down the line, probably it is still about 9% to 10%. 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 the 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 still estimating. We are not estimating, but probably 15% is clearly achievable.

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're 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 line and ophthalmic products; we have tight capacity constraints.

Srinivas Sadu: We are also looking at a couple of lines, like the Bagman and the ophthalmic products we have tight capacity constraints. Bagman, we are expecting approval in Q3. If it happens as planned, then probably we can cross 15%. But it is a new line to be approved by FDA, so if it is approved by August, September, then probably we will exceed the 15% growth for this year. Otherwise, the constant currency, we 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 what we have taken up in the recent past will pan out. Probably we will get a clear picture by August, September or September, October.

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.

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 next four years, we're looking at 20-odd percent. But we'll get a clear clarity next quarter. We'll give a clear clarity once we we also see how the other initiatives what 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.

Speaker #1: Yeah.

Srinivas Sadu: 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.

Operator: 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 fiscal year '28, probably exit—I understand there are big contracts coming in 2029.

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 the big contract is coming in 2029. 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? 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 the business do you think would 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 and the top line. We are working towards that. Today we are at 28% consolidated EBITDA percent. So near term, we are 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 business as well in the same range as CDMO, and it is a large base.

Speaker #1: Near term, as a consolidated basis, Senexi growth—you know, the target for Senexi is profitability on the top line. So we need to work, we're working towards that.

Speaker #1: So today, we are at 28% console EBITDA percent. So, near-term, we're 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 once we hit CY20 million, probably there should be a skew or the CDMO business will be larger than the B2B business.

Srinivas Sadu: So we still feel once we hit Seva 2 million, 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 a 50/50 kind of business. Yeah.

Speaker #5: Understood. And, you know, on the Senexi business, given that we have the impact of the heat wave in France, does that mean that the second quarter would end up being better than the usual seasonal decline that we see because of the shutdown?

Neha Manpuria: Understood. And, Vimal, 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, Diana?

Speaker #5: I think so. You mentioned that, you know, Senexi 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 with the seasonality, we are lower because some of the shipments would have moved into the second quarter. Would that be a fair assumption?

Speaker #1: I would say it will be better than last year, for sure. Some of the 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: Because some releases couldn't happen last quarter because of the heat wave. The impact was more on the quality release. So 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 are still maintaining, you know, Senexi guidance of near $200 million and high single-digit margins for FY27?

Neha Manpuria: Currently, we're still maintaining Cenexi's guidance of near USD 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 so much, sir.

Neha Manpuria: All right. Thank you for this, sir.

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.

Operator: Thank you. Our next question comes from the line of Ashish with Leo Capital. Please go ahead.

Speaker #4: Hi, sir. I'm out of the room. Yeah, yeah.

[Analyst] (Leo Capital): Hi, sir. Am I audible to you?

Srinivas Sadu: Yeah, you are audible a bit.

[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): Yeah. 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 perspective, 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 EU markets. We are also evaluating when we said that this year we are still trying to maintain the 50% constant currency growth. There are also some positives could be upside. One of our customers has filed in Canada. There could be an opportunity to launch in the last quarter. If that happens, then there could be an upside. 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 activities will happen in the next quarter or two. The new contract that we signed is both for SEMA and for 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 the 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 made for different customers, then filing, and then 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 3 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 FY30/31.

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. We are not concerned much in next few years other than the tech transfer fees, what we get for transferring. If anything happens in Canada or any other markets for the customers, because these are in the CDMO business, we do not have a clear visibility on the front-end approval status for these products. It is very difficult to assume the numbers for them. That is why we are keeping closer just how that pans out. That will be an upside if it pans out well.

Speaker #1: So we're not considering margin for the next three years, other than the tech transfer fees that we get for transferring. 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 where we're keeping it close to our chest, you know, how that pans out.

Speaker #1: But that will be 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: Bye.

Speaker #2: Thank you. Our next question comes from the line of Chintan Sheth with Girik Capital. Please go ahead.

Srinivas Sadu: Yeah.

Operator 2: Thank you. Our next question comes from the line of Chintan Sheth with Girik Capital. Please go ahead.

Operator: Thank you. Our next question comes from the line of Chintan Sheth with Girik Capital. Please go ahead.

Speaker #5: Yeah. Am I audible?

Chintan Sheth: Vimal, audible?

Speaker #1: Yes.

Srinivas Sadu: Yes.

Speaker #5: Okay, yeah. Thank you. Thank you for the opportunity, and congrats on the good set of numbers, as well as continuing the, you know, momentum and projections for our CDMO side.

Chintan Sheth: Thank you. Thank you for the opportunity and congrats for the good set of numbers as well as continue the custom win and project win for our CDMO side. Just one clarification on the opening remarks with Cenexi's revenue, you mentioned EUR 68 million and 2 million EBITDA.

Speaker #5: Just one clarification on the opening, in order to Senexi revenue, you mentioned €68 million and €2 million EBITDA. Is that correct?

Srinivas Sadu: Revenue is EUR 48 million and 2 million EBITDA.

Speaker #1: 48 million. Revenue is 48 million, yeah, 48 million revenue and 2 million EBITDA.

Speaker #5: Okay, it's flat on a year-over-year basis. But EBITDA numbers—EBITDA number was okay. So, EBITDA—you mentioned that because of the extreme heat wave, that also impacted some bit of profitability this quarter.

Chintan Sheth: Okay. It is flat on a year-over-year basis. But EBITDA number is okay. EBITDA, you mentioned that because of the extreme heat wave, that also impacted some bit of profitability this quarter.

Speaker #1: No, the it's it's profitability in the same trend like what we said. It's 4% EBITDA. So at the end by the end of the year we want to get into double double digit EBITDA.

Srinivas Sadu: No, the profitability is in the same trend like what we said, it's 4% EBITDA. 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 3% 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 co-development products, what what could be the opportunity size for for those?

Chintan Sheth: Okay. Because last year, I think we were at 2% EBITDA, which has improved to 4% this year. Okay, got it. 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 Type 5 and eight are ANDAs. If you can enter any timelines around those launches, if you can provide some insight.

Speaker #5: I think 7 or 5, 5 to 5 TBD and 8 are ANDAs, if you can. And any timelines around those launches, if you can provide some insights?

Speaker #1: You may take it.

Srinivas Sadu: Give me a second.

Speaker #5: Hello.

Chintan Sheth: Hello.

Srinivas Sadu: Can we come back to exactly how much is the market worth?

Speaker #1: Can we come back to exactly how much the market is?

Speaker #5: No, no, no worries. No worries. And for the year, what kind of launch pipeline are we looking at? If you can—any significant ones which can, you know, be a 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 management seems to have disconnected. Please stay with us while we reconnect with management.

Operator 2: Ladies and gentlemen, the line for the management seems to have disconnected. Please stay with us while we reconnect with the management.

Operator: Ladies and gentlemen, the line for the management seems to have disconnected. Please stay with us while we reconnect with the management. Hello. 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 management. Over to you, sir.

Operator 2: Hello.

Operator 2: Ladies and gentlemen, we have now reconnected with the management. Over to you, sir.

Speaker #5: Okay, 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 the thing about the launch pipeline for the current year, we launched four molecules this quarter. If you could provide some insight on which are the key molecules to look out for the current year, which can contribute to our growth, as you 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 MVI Multivitamin, we launched Dalba, and we also launched the Sugar Medics. And for the MVI, we have CGK exclusivity.

Srinivas Sadu: The products what we launched, we have launched MVI multivitamin, we launched DALVANCE. We also launched sugammadex. The MVI, we have CGT exclusivity, so we do not see competition coming in soon. It is a very difficult product to make. DALVANCE, 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. For Dalba, while there is competition, we still have enough contracts in place to continue for the next few years.

Speaker #5: And expected mentions—anything to call out for which went through, the focus on?

Chintan Sheth: Expected launches, anything to call out for which one should 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. Yeah. I will jump in. Thank you.

Speaker #1: Yeah.

Speaker #5: And joint operation. 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.

Chintan Sheth: Thank you.

Operator 2: Thank you. Our next question is from the line of Karan Vora with Goldman Sachs. Please go ahead.

Operator: 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, three or five years out?

Speaker #5: Thank you for taking my question. My first question is with respect to the CDMO business. So 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 are patent protection and what what would that number look like say three or five years out?

Srinivas Sadu: We cannot reveal those numbers because some of these belong to customers. There are few products which are under Firefly, which has also patents. If you are talking about innovator products, no, we do not have any innovator products right now.

Speaker #1: We cannot reveal those numbers because some of these belong to customers. There are a few products which are under firefight duty and also patents.

Speaker #1: But if you're talking about innovative products, no, we don't have any innovative products right now.

Speaker #5: Okay. And is there 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, 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—what 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 this is 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. And my second question is with respect to the base business growth. I think we've changed some disclosures.

Karan Vora: Okay, got it. My second question is with respect to the base business growth. I think we've changed some disclosures, so just wanted to get a sense on what is the X and XC growth in the US and ROW markets.

Speaker #5: So, just wanted to get a sense of what is the XNXC growth in the US and ROW.

Speaker #1: View all markets .

Speaker #2: So, the best business has grown by 24%.

Srinivas Sadu: The base business has grown by 24%.

Speaker #1: So, similar for us and our markets.

Karan Vora: Similar for US and ROW markets?

Srinivas Sadu: Give me a second. US has grown by 32%.

Speaker #2: Second, the US has grown by 32%.

Speaker #1: Okay . US 32% and ROE and what ? And what would also be the constant currency number in that within that .

Karan Vora: US 32%. What would also be the constant currency number within that?

Speaker #2: The constant currency—I can remove forex gain, around 5%, out of the base business. Twenty-four, 5% can be because of the forex gain; around 20%.

Srinivas Sadu: The constant currency, it can remove Forex gain around 5%. Out of the base business 24%, 5% can be because of the Forex gain.

Karan Vora: Got it.

Srinivas Sadu: Around 20%, 19.5%.

Speaker #2: 19% .

Speaker #1: Thank you Thank you . Our next question comes from the line of Sayan Mukherjee with Nomura . Please go ahead Yes . Thank you for the follow up It was just like , you know , you , you know , have also announced the other two contracts .

Karan Vora: Thank you.

Operator 2: Thank you. Our next question comes from the line of Saion Mukherjee with Nomura. Please go ahead.

Operator: Thank you. Our next question comes from the line of Saion Mukherjee with Nomura. Please go ahead.

Saion Mukherjee: Yeah, thank you for the follow-up. It looks like you have also announced the other two contracts. One is with Neuland for, I think, API, and then there is 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 #1: One is with New Zealand for, I think, API. And then there's a contract in China for a liposomal product in terms of revenue potential.

Speaker #1: How should we think about these, and what are the timelines for the revenue from these two contracts? I think for China, you mentioned 2030, right?

Speaker #2: Yeah. So that's a more liposomal protein licensing product, where they have already developed this product and it is approved for the China market using EU RLD. It's a $3 billion product, estimated to be $3 billion in the next three years.

Srinivas Sadu: Well, that is a more liposomal product, in-licensing product, where they have already developed this product and it is approved for China market using EU R&D. It is an estimated $3 billion product in next three years. Currently, it is $1.6 billion globally, and US about $600, $700 million. 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 will file in US. There is a patent production for this product. We will try to be there by the patent expiry date. On the Neuland, the APIs, we actually had this supply agreement with them before as well in the current suite. This is an extension of this. We are building a new suite for them.

Speaker #2: Currently, it's $1.6 billion globally and, in the US, about $600 to $700 million. And so, we got rights for US and EU, and the technology will be transferred.

Speaker #2: So, we will be investing in a compounding suite, specifically needed for this. And the technology will be transferred here, and then the study will happen.

Speaker #2: And then we'll file in the US. So these are patent protections for this product. So we will try to be there by the patent expiry date on the new API.

Speaker #2: We actually had this supply agreement with them before as well, you know, in the current suite. But this is an extension of that.

Speaker #2: 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 product as well , because we have a Microparticle depot technology also with us , and very few companies offer sterilization of APIs 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 depo technology also with us, and very few companies offer sterilization of APIs as well. So 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 may 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 ourselves have this pipeline of products which we need to develop, so we need that capacity as well. So it is more a strategic thing.

Speaker #2: So, current capacity is fully occupied, and currently we are only manufacturing two APIs. There are another set of five to six products which will fall into this category, which means this expansion.

Speaker #2: So this will ease out our current capacity constraint because there are also requirements from other customers who want this service from us.

Speaker #2: And also, we ourselves have this pipeline of products which we need to develop, so we need that capacity as well. So, it's more a strategic thing.

Speaker #2: It's 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.

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 will sign from the current capacity.

Speaker #2: What will sign from the current capacity?

Speaker #1: Okay . So understood . So my other question was , you know , on your complex India pipeline , I think you have like 20 , 25 such products and , you know , generally what we see is that , you know , a few of them tend to be pretty large .

Saion Mukherjee: Okay, sir. Understood. My other question was, on your complex ANDA 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 largest opportunities that you have, is that an FY29 kind of an opportunity or something which will be after FY29, you think?

Speaker #1: And in that sense , those large or the largest opportunities that you have , you know , is that an FY 29 kind of an opportunity or something , which will be after FY 29 , you think

Speaker #2: It's post 29 . Some of the big products , especially on the Microsphere products . There are couple of big ones , which is post 29 .

Srinivas Sadu: No, 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 clinical stage and some at the exhibit stage, I would say. So they are at different stages. But some under patent, post 2029. But most of the big things are post 2029, yes.

Speaker #2: So currently there are different stages , some at the P clinical stage and some at the exhibit stage . I would say . So there are different stages , but some under patent post 29 .

Speaker #2: But most of the big, big things are post '29. Yes.

Speaker #1: Okay . And also , I understand that , you know , have in your in your us filings or what you are developing or what your 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 para 1, para 2, para 3, 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 #1: Is that a large opportunity ? And how should we sort of think about , you know , sort of trying to develop such , which seem to be old , kind of old products

Speaker #2: So some products you developed many years ago, the 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. They are 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. And 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. And 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 ANDA fees and the development was far cheaper than what we do today. That is why that portfolio got developed over many years.

Speaker #2: 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 #2: So as injectable company , we need to have that that portfolio and the portfolio . What you have developed 15 years back , probably those are also there in that list .

Speaker #2: What you're seeing is that there were no India fees, and the development was much cheaper than what we do today. So that's why that portfolio got developed over the many years.

Speaker #1: Right ? Right . And so now your US based revenue would be $500 million , 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 ?

Saion Mukherjee: Right. And sir, now your US base revenue would be USD 95 million to USD 100 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: You think

Speaker #2: A bit more than 100 million.

Srinivas Sadu: More than USD 100 million.

Speaker #1: Okay

Saion Mukherjee: Okay.

Speaker #2: It's about ten. Yeah. Yeah, correct.

Srinivas Sadu: It's about $110 million, $120 million. Yeah. Correct.

Speaker #1: Sorry, sir. Can you repeat?

Saion Mukherjee: Sorry sir, can you repeat?

Speaker #2: Sorry, sorry. Go ahead.

Srinivas Sadu: Sorry, Dilip. Go ahead.

Speaker #1: No, sir. You said more than 100 million currently.

Saion Mukherjee: No sir, you said more than $100 million currently.

Speaker #2: Yes, correct. Correct.

Srinivas Sadu: Yes, sir. Correct.

Speaker #1: And how should that, you know, play out over the next three years as you launch these products? Do you think it will materially go up, or would it sort of have a more modest growth, like most generic companies?

Saion Mukherjee: How should that play out over the next, say, three years as you launch these products? Do you think it will materially go up, or it would have a more modest growth like most generic companies?

Speaker #2: Should we get into newer modalities also in this space? If you look at it, the entire market is growing probably three to four percent, but then you have to see which are the products where we don't have.

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%. You have to see which are the products where we don't have, what is our base, and what products we actually never launched. If we launch those products, what will be the growth? I mean, that's how we have to look at this. We still feel there's a growth of that business. It's not that it's completely low. The other thing is with the efficiencies what we have in operations, we are able to compete more and grow our own business. One is how the market is growing, second is how we are growing.

Speaker #2: And what is our base, and what products have we actually never launched? If we launch those products, what will be the growth, right?

Speaker #2: I mean , that's how we have to look at this . So we still feel there is a growth of that business . Is not that it's completely low .

Speaker #2: But then the other thing is, with the efficiencies that we have in operations, we are able to compete more and grow our own business.

Speaker #2: So one is how the market is growing. Second is how we are growing. So 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.

Srinivas Sadu: If you look at the market growth versus our growth in the US, it's 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're able to garner that market share to us because of our better cost structure.

Speaker #2: What we do , and also the the current products , what is secured by others , we are able to garner those that market share to us because of our better cost structure

Saion Mukherjee: Mm-hmm. Okay, sir. Great, sir. Thank you.

Speaker #1: Okay, sir. Sir, thank you.

Speaker #3: Thank you . Our next question comes from the line of Malik Raja with 361 . Please go ahead . Yeah . Hi , sir .

Operator 2: Thank you. Our next question comes from the line of Maulik Varia with 360 ONE. Please go ahead.

Operator: Thank you. Our next question comes from the line of Maulik Varia with 360 ONE. Please go ahead.

Maulik Varia: Yeah. Hi, sir. Thank you for the opportunity. I hope I am audible. Sir, just wanted to understand if there is any progress, any update from our Dr. Reddy's partnership on the biologics, and we were also negotiating with one more partner to set up additional capabilities. So is there any update there?

Speaker #3: Thank you for the opportunity . I hope I'm audible , so just wanted to understand if there's any , any progress , any update from our doctor partnership on the biologics and we were also negotiating with one more partner to set up additional capabilities .

Speaker #3: So, is there any update there?

Speaker #2: Currently, it's normal business. I would say it's generating around $50–60 million 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 are not big contracts which we have signed up in the recent past.

Speaker #2: But as such, it is not a big, big contract which we have signed up in the recent past.

Speaker #3: Okay , okay . And so going ahead from our complex portfolio , I understand that the contribution is lower currently , but going ahead , would you be able to give us some direction ?

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 #3: How much, as a percentage of our portfolio or in terms of revenue, would the complex products become?

Speaker #2: Because most of the complex product is post FY 29 and the . 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. While it probably 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 about 20% when you are growing next four years, at the end of this four years, all these products will get launched and probably the next growth driver will be these products as well.

Speaker #2: So while it takes a . Probably it will take a larger chunk of the US business , but I can't give an exact number because the timing of each product is different .

Speaker #2: 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 is about 20–25%, 20% when you're growing over the next four years—at the end of these four years.

Speaker #2: All these products will get launched, and probably the next growth driver will be these products as well.

Speaker #3: Okay , okay , okay . Thank you sir . Thank you Thank you , ladies and gentlemen , to ask a question , you may please click Press Star and one .

Maulik Varia: Okay. Thank you, sir.

Srinivas Sadu: 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 Jivani with IIFL. Please go ahead.

Operator: 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 Jivani with IIFL. Please go ahead.

Speaker #3: Our next question is from the line of Rahul Jivani with IIFL. Please go ahead.

Rahul Jivani: Yeah. Hi, sir. Thanks for taking my question. Sir, 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?

Rahul Jeewani: Yeah. Hi, sir. Thanks for taking my question. Sir, 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?

Speaker #1: Hi sir . Thanks for taking my question , sir . Can you call out the the constant currency growth for the quarter on a console basis ?

Speaker #1: So, we reported 20% growth in INR terms. So what was the constant currency growth at the company console level? It's 15%.

Srinivas Sadu: It's 15%, Rahul.

Speaker #1: 16%. So that calculation isn't clear to me because, if I look at your revenue, the revenue would have been flat. Why, or why not? And let's say the USD/INR, on a YoY basis, has depreciated by almost close to 10%.

Rahul Jivani: 15%? Sir, that calculation isn't clear to me because if I look at your Cenexi revenue, the Cenexi revenue would have been flat year-over-year. Let's 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.

Rahul Jeewani: 15%? Sir, that calculation isn't clear to me because if I look at your Cenexi revenue, the Cenexi revenue would have been flat year-over-year. Let's 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 #1: So, this number looks a bit higher to me in terms of constant currency growth. So, it's on a basis of when the products are dispatched.

Srinivas Sadu: It's based on when the products are dispatched. It's not uniform 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 #1: It's not a uniform uniformly across everything . So average wise you cannot take . So we have to look at the rate on the particular date of supply .

Speaker #1: And then see the the effects impact Okay . And this 15% constant currency growth , which we guide 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 growth .

Rahul Jivani: 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. Wouldn't that be the case?

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. Wouldn't that be the case?

Speaker #1: Now wouldn't that be the case ? No . For projection , we take constant currency only for effects movement . We cannot predict .

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 #1: So all our projection of guidance that we are giving is basis of constant currency . Okay , sure , sir . And so 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 Jivani: Okay, sure, sir. 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. 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?

Rahul Jeewani: Okay, sure, sir. 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. 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 #1: Now for this new CDMO contract , which you have one . While this business is tech transfer , what is the margins on this tech transfer CDMO business be higher than , let's say what we would done on an IP owned business

Speaker #2: So, for the IP-owned business, actually we are sharing our profit also with the front-end partner and the tech transfer. See, in the CDMO...

Srinivas Sadu: The IP-owned 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 you say it's 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 or Europe, which are the more expensive places to manufacture. So 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 #2: The two two kinds one is B2B tech transfer . When you say it's coming from a development lab or another company . And then we are taking exhibition in in the current CDMO , the two types of business .

Speaker #2: One is this, which is a smaller portion; the other is the commercialized products coming out from the US or Europe, which are more expensive places to manufacture.

Speaker #2: So there we have a , 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: Okay, sure. So that's it. Thank you.

Rahul Jivani: Okay. Sure, sir. That's it from my side. Thank you.

Rahul Jeewani: Okay. Sure, sir. That's it from my side. Thank you.

Srinivas Sadu: Yeah.

Speaker #3: Thank you. Our next question comes from the line of Alankar Gurudev with KE. Please go ahead.

Operator 2: Thank you. Our next question comes from the line of Alankar Garude with KIE. Please go ahead.

Operator: Thank you. Our next question comes from the line of Alankar Garude with KIE. Please go ahead.

Speaker #1: Hi . Thank you for the opportunity , sir . If we go back a few years , CDMO was relatively much smaller for the company .

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: Can you highlight the top three or 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 #2: So so one is , of course , you know , the portfolio . What we have , I know we kind of running out of the portfolio in the last one .

Srinivas Sadu: So one is of course the portfolio what we have. We are 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 is an opportunity for players like us because there are companies who are 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. So 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 #2: That's one second. The opportunity out there, while everybody talks about the pressure on generic pricing, at the same time, there is an opportunity for players like us because there are companies who are leading pharma companies whose manufacturing base is in expensive countries. That opens up a door for us where we have better operating leverage and a better history of quality.

Speaker #2: 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.

Speaker #2: So they need to compete. So they need to take those products to a place where they can manufacture cheaply. I think that's where it opened up.

Speaker #2: That's when we thought. And we have also seen interacting with a lot of these customers over the years, they have like 300 to 400 people just managing these relationships across 60 or 70 different sites and different companies.

Srinivas Sadu: And we also seen interacting with a lot of these customers over the years. They have like 300 to 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 give a full proof solution. You can get three or four different sites under one company, with a set of platforms under one roof. That's how this got evolved because we looked at opportunity, where probably everybody's saying that there's no money in generics, but we're saying, "Okay, our strength is in manufacturing and quality. Why can't we leverage that to offer these services so that they'll be more competitive?

Speaker #2: So now we , we kind of approach them and saying that we'll give a full solution . You can get three , 3 or 4 different sites under one company with breadth of platforms under one roof .

Speaker #2: That's how this got evolved because we looked at opportunity where probably everybody is saying that there's no there's no money in generics , but we're saying , okay , our strength is in manufacturing and quality .

Speaker #2: Why can't we leverage that to offer the services so that there will be more competition?

Speaker #1: 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's helpful. Two smaller questions. One is, can you highlight the profit share, in this quarter?

Srinivas Sadu: Profit share is about 9%.

Speaker #2: Is about 9% .

Speaker #1: Okay. And the final one is, can you reconfirm the timelines for the project?

Alankar Garude: Okay. And the final one is, can you reconfirm the timelines for the NDDS project?

Speaker #2: The project is about is 2928 , sorry , 28 and commercialize 29 .

Srinivas Sadu: The NDDS project is 2029.

Srinivas Sadu: 28.

Ravi Shekhar Mitra: 28.

Srinivas Sadu: 2028, sorry. 2028 and commercialize 2029.

Speaker #1: Got it. And with the revenue potential of $25 to $30 million.

Alankar Garude: Got it. And with a revenue potential of $25 to $30 million.

Speaker #2: That's correct .

Srinivas Sadu: That's correct.

Speaker #1: 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 #3: 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.

Operator: 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 #3: Over to you, sir.

Speaker #2: Thank you , everyone , for joining us today . We appreciate your participation in the question and answer session . During the call .

Shriniwas 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 #2: 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.

Speaker #2: 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 lines.

Operator: Thank you. On behalf of Gland Pharma Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.

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Q1 2027 Gland Pharma Ltd Earnings Call

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