Earnings Call Transcript - XNSE:ALIVUS 2026-10-30

Operator

Ladies and gentlemen, good day and welcome to the Q2 FY27 Earnings Conference Call of Alivus Life Sciences Ltd. 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 call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Swami Rao from Alivus Life Sciences. Thank you and over to you, ma'am.

Swami Rao, Head of Investor Relations

Good morning, everyone. I welcome you all to Earnings Call of Alivus Life Sciences Limited for the quarter-ended September 30th, 2026. From Alivus Life Sciences, we have with us Dr. Yasir Raoji, our MDN CEO, and Mr. Tushar Mistry, our CFO. Our board has approved the results for the quarter-ended September 30th, 2026. We have released it to the stock exchanges and updated the website. Please note that the recording and the transcript of this call will be available on the website of the company. Now I'd like to draw your attention to the fact that some of the information shared as part of this call, especially information with respect to our plans and strategies, may contain certain forward-looking statements that involve risks and uncertainties. Thank you.

Yasir Raoji, CEO

Thank you, Shami. Good morning, everyone, and welcome to our Q2 earnings call. Let me begin by extending our warm wishes for the upcoming activities. Turning to our performance, we are pleased to report another quarter of healthy execution reflecting the strength of our underlying business and a significant improvement in profitability. During quarter two, revenue New firm operations stood at 682 crores, up 16% year on year, driven by new product launches and a healthy demand across our existing portfolio. Our non-GPL business grew 20.8% year on year and now contributes 79% of our overall revenues. Performance remains healthy across Europe, Japan, North America, Latim, and ROW markets. Recently launched products continued to gain traction across geographies, further diversifying our revenue base. GPL revenues recorded marginal growth of 1% year-on-year. For FI27, we expect the business to follow its historical trend with a stronger contribution in H2 and expect full-year revenues to be around 700 to 750 crores. Our generic API business grew 11% year-on-year in Q2, supported by healthy demand across regulated and emerging markets. The broader product portfolio continues to strengthen our presence across these markets. Our CDMO business delivered a robust performance during the quarter, with revenue climbing to Rs. 50 crores, up 32.3% quarter-on-quarter, and nearly 80% year-on-year. This was driven by improved traction across existing projects and was complemented by new projects. We continue to see CDMO as an important growth opportunity as our project portfolio progresses. More importantly, we are seeing a clear improvement in the quality of our portfolio that is impacting our earnings. A better revenue mix and improved operating efficiencies are translating into stronger underlying profitability. Coming to our expansion plans, the Sholapur facility continues to progress as planned, and Phase 1 is expected to become operational in Q3 of FI27. Construction of our R&D center at Taloja is also progressing well, and we hope to be on schedule early next year. Our pipeline remains robust with over 630 DMF and CEP filings globally as on September 30, 2026. Our high-potent API portfolio continues to advance with 30 new products in the active grid representing a total addressable market of $86 billion. Of these, 14 products have been validated, 7 are in advanced stages of development, and the remaining nine products are progressing through lab development. As we move into the second half of FI27, we remain mindful of the evolving external environment. At the same time, the continuing momentum in our co-business, progress across CDMO, and the depth of our development pipeline provide us with confidence in our growth outlook. So, accordingly, we reiterate our FY27 revenue growth guidance of 10-12%. We are confident of delivering EBITDA margins in the 35-36% range in FY27. Overall, our priorities remain clear, existing on our growth strategy, scaling our portfolio, and strengthening our presence across key global markets.

Tushar Mistry, CFO

I would like to take a moment to highlight the key performance updates for the quarter and For Q2 FY27, revenue from operations stood at Rs. 682, a growth of 16% year-on-year. Gross profit for the quarter was Rs. 439, up 29.5% year-on-year. Gross margins for the quarter stood at 64.4%, up 420 basis points, quarter-on-quarter, and 670 basis points year-on-year. This was on account of favorable product mix, and in the one-time income, adjusted EBITDA margin was approximately 39.5% reflecting improved operating efficiencies. Pat for the quarter stood at Rs. 197 crores, with pat margins at 28.9%, up 390 basis points quarter-on-quarter, and 680 basis points year-on-year. For first half, FI27, revenue from operations stood at Rs 1,322 crores, a growth of 11.1% year-on-year. Gross profit for H1 was at Rs 825 crores, up 22.9% year-on-year. Gross margins for H1 stood at 62.3% up 590 basis points year-on-year. EBITDA for first half was at Rs. 519 crores, up 38.4% year-on-year. EBITDA margin for first half was 39.3%, up 780 basis points year-on-year, and PAT for H1 Studio at 357 crores, with PAT margins at 27%, up 590 basis points year-on-year, with both therapies contributing 50% to the top line. We got 67% to the top line in Q2FY27. R&D expenditure for Q2FY27 was Rs. 27 crores, which was 4% of our sales. For H1FY27, it was Rs. 51 crores at 3.9% of our sales. Thank you.

Operator

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

Operator

The first question comes from the line of

Operator

Ahmad Madha with Unify capital. Please go ahead.

Ahmad Madha, Analyst — Unify Capital

Yeah, thanks for the opportunity and congratulations on a very good set of numbers, Dr. Prowse and the team. Firstly, just to understand the nature of one-off we mentioned, can you explain, I believe the calculation says about 24-25 crores. Can you explain the nature of the one-off income?

Yasir Raoji, CEO

So, there are two components here. There's a validation supply of a complex product, okay, and contributed to it.

Tushar Mistry, CFO

Plus, there was some income approval which was done in this quarter, which is one of kind from one of the customers that we would be getting, which is one of in nature.

Ahmad Madha, Analyst — Unify Capital

Sure, understood. So, is it fair to assume that this gross margin still will sustain above 60% which we have also exhibited last two quarters? Obviously, current quarter was 64% plus. Is that a fair way to look at it?

Yasir Raoji, CEO

Yeah, we should expect it around that.

Ahmad Madha, Analyst — Unify Capital

And just can you give some more sense on, you know, we've been mentioning about new product launches contributing to higher margins, and the margins range, if I look at excluding other income, it was close to 30% as moved to almost 34-35%. And you continue to guide that to sustain more or less. More clarity in terms of just more sort of nuances in terms of how should one look at it in terms of new launches which have contributed margins? A little bit of explanation that can help us sort of triangulate what things we have achieved in terms of getting margins which are probably close to industry leading.

Yasir Raoji, CEO

See, certainly, it's the new products, the launches that we've had, that is contributing to higher margins. Okay. And when we say new products, it's not just what we launched this year. Okay. There have been launches of last year that have been sustaining the momentum, Not only in terms of growth, but also in terms of margin profile. So, as we keep moving ahead, I mean, we're kind of building it up with the new pipeline. And that's why, you know, even after we take away this one time, we are seeing much improved margins. I won't be able to give you which products because, frankly, we don't get into a product-wise discussion, but we can say this much that the quality of our portfolio is steadily improving in terms of more complex molecules, and that helps as well as the margins.

Ahmad Madha, Analyst — Unify Capital

I understand we can't disclose product names, but let me put it other way. Sometimes what we see in the industry is when there are new launches, the margins are extremely high. And then as the formulation partner sells the product and then they face a price erosion, probably a year or two later, the margins for API player as well as the formulation partner will erode. So, is this kind of a nature of the new launches we have had, where because of the initial ramp up, the pricing you are getting is much higher? Same will be the case with your customer. And then, as things move forward, margins will normalize, or this is sort of a case where there is certain step jump in the margins because of the quality of your incremental portfolio?

Yasir Raoji, CEO

We see margins on newly launched products, and then it starts from CHR.

Operator

I'm sorry to interrupt, Ahmed. I would request you to rejoin the queue. Thank you. The next question comes from the line of Yog Rajani with Omega Portfolio Advisors. Please go ahead.

Yog Rajani, Analyst — Omega Portfolio Advisors

Hi. Thank you for taking my question, and once again, great numbers, sir. My question is regarding the second half of the year. So, second half, we normally see higher GPL contribution, which, as you've highlighted earlier, is a lower margin business than our non-GPL and CDMO business. So, how do you see the margins being affected for the second half?

Tushar Mistry, CFO

F5, I mean, the second half of the year, GPL, generally, it is not very low margin business. It is a good, stable margin business, and we should see that kind of margin for H2 as well. And that's why I mentioned 6% EBITDA margin for the overall financial year.

Yog Rajani, Analyst — Omega Portfolio Advisors

All right. Thank you. My second question is regarding the CDMO business. We've recently seen a huge growth in our CDMO business, YOY, as well as QOQ. Could you give us some more insights into what is happening in the CDMO business and how can we see the growth going from here?

Yasir Raoji, CEO

So we haven't added new projects. We are still driving the CDMO business with these five projects, but we've seen an uptick in demand across these projects. And certainly the newer projects that we've added last year are contributing quite substantially. So that's what led to that improvement.

Yog Rajani, Analyst — Omega Portfolio Advisors

And would we see further improvements? As we said, we have a lot of potential clients that we are talking to, and we have new facilities that are also coming up in the second half of this year. So, is there any guidance in terms of how we would be scaling up the CDMO business? Even qualitative is all right. I understand we can't get into.

Yasir Raoji, CEO

Yeah, that's what. We have a number of projects that we are in discussions, and hopefully we should close in the first half of next year on a couple, but certainly one more project will get added. Okay, so they are in advanced stages, and so that should keep driving the momentum, the new projects, but we have quite a few that we are in discussions.

Operator

All right, thank you. The next question comes from the line of Ankit Minocha with Daisy Family Office. Please go ahead.

Ankit Minocha, Analyst — Daisy Family Office

Hi, good morning and congratulations on the excellent set of numbers. My first question is with regard to, I mean, now that we have a separate new car motors on board And you have all of these new launches and, hey, a reasonable margin trajectory also going ahead. Should we recalibrate? Here are the growth expectations from the company. I mean, I believe in earlier concourse, we've also always mentioned at profitable growth. So, I mean, profitable growth currently looks probable. So, I mean, can we move to a higher double digit growth range or over the next two,

Yasir Raoji, CEO

See, Ankit, we have grown our non-GPL business almost 21% this quarter. Okay, so in that sense, we are already there at double digit. Now, you know this, if you've been following us, that the GPL contribution has remained relatively flat, and it's quite substantial. So, as a result of that, when we add it all together, we don't want to sort of, you know, we want to be clear that, you know, that's a good business, like Tushar said, we'll keep that going. But when you put it together, then we are in this 10 to 12% range in terms of the growth.

Ankit Minocha, Analyst — Daisy Family Office

Okay, sure. Thanks. And in terms of margins, I mean, this quarter, obviously, there's some one-off and there is, but there are significant higher margins because of new product launches. You're talking about 35% to 37% for this entire year. How should we look at FY28? I mean, do we think of maintenance of that kind of margin profile can be receivable and what will kind of be buying that as well?

Yasir Raoji, CEO

We should be aiming for that, right? But as a floor, right, as a floor, let's say nothing works out. We'll still be between the 30 to 32% range. I mean, we have, we have enough, we have reasonable visibility for next year. And like I said, we will aim to achieve similar margins as what we are guiding to FI 27. But, you know, just to keep it balanced, I think, you know, if nothing works out, we'll still be at 30 to 32%. Okay. But the way things are going, we see that there is enough launch momentum from launch products. And so we should continue. Plus, there's the global situation, right? I mean, we, so far, we've been able to manage it reasonably well, Because we've kept, we've taken good calls on inventory. And that has helped us as well. So it's not only the new launches, but also the way we've managed the whole, you know, cost escalation, right, by having judicious sort of inventory interventions.

Ankit Minocha, Analyst — Daisy Family Office

Yes, sir. And finally, in terms of pricing, the pricing environment, how does it look like for the company, the different molecules and overall for the sector?

Yasir Raoji, CEO

Could you come back again to the pricing environment, you said?

Ankit Minocha, Analyst — Daisy Family Office

Yes, the pricing environment that you currently see. Is there pricing pressure or is pricing going well?

Yasir Raoji, CEO

I mean, see, the genetic business does have that, right? So, we do factor in some level of erosion. I must say that the erosion has been a little less this first half, okay, but it's reasonable because we are in regulated markets and there's a fair understanding of what the customers are also able to do at the front end. So, it's not unreasonable. It's kind of regular on the erosion. So, the pricing environment, I would say, is quite stable.

Ankit Minocha, Analyst — Daisy Family Office

Right. Thank you so much. And just to join the team, all the best. Thank you.

Operator

The next question comes from the line of Nitin Agarwal with Dam Capital. Please go ahead.

Nitin Aggarwal, Analyst — Dam Capital

Thanks for taking the question. Congratulations, team, for a brilliant set of numbers. Dr. Nathana, two things. A, on the input cost inflation that you talked about, which is coming through over the last few quarters, has it been easy for you to pass it on to your customers?

Yasir Raoji, CEO

Yeah, we have had price inflation on raw materials, but largely speaking, we've been able to pass it on to the customers.

Nitin Aggarwal, Analyst — Dam Capital

Okay, that's good. And secondly, you know, with the Sholapur facility coming on stream in the first phase in the second half of the year, as you mentioned, I mean, strategically, what kind of impact does it have on the business, both on the generic and the CDMO side, right? I mean, not from near term, but you can take a two, three-year view with the large capacity, which was not there for us, available at any point in time, from our fresh green-free capacity capability. I mean, what kind of tailwind does it bring to the business, possibly, in your assessment?

Yasir Raoji, CEO

Oh, it's going to be a big contributor in two to three years' time because it's a large facility. We have a good runway for bringing in, you know, newer products that will be coming in. Uncle Ishwar today contributes almost 65% to our revenue. Okay, so it would be nice to have a similar facility of this size. It also helps us on the CDMO side because we can offer, you know, these kind of capacities to potential customers, okay, for larger volume APIs and maybe even high value intermediates. So it's a, I mean, Sholapur, we are looking, you know, at Sholapur as a pretty, I mean, in the, you know, in the two to three year time frame as a pretty big growth driver.

Nitin Aggarwal, Analyst — Dam Capital

And just trying to understand the fact that we were a bit of capacity constrained in the last few quarters. I mean, rather we were opting at optimized capacity. Has it really led to any sort of supply misses also for us, business we had to forego because capacities were not there?

Yasir Raoji, CEO

Fortunately not, because where we did have some crunch was on the intermediate side. Pharma capacity was quite, we managed that quite reasonably. So we haven't lost any kind of business or had to postpone, you know, orders or anything of that sort.

Nitin Aggarwal, Analyst — Dam Capital

And secondly, on the new product launches, I think we've got a large issue. So the two things, one is A, of the DMFs to be filed in the U.S., how many are yet to be commercialized? And two are sort of high-value, complex DMFs around HP, hyper-NC API, and the iron sucrose. Over what frame do you see these getting commercialized?

Yasir Raoji, CEO

So, of the 160-odd DMFs that we have in the U.S., we are working on the commercially, we have about around 90 to 100 is what is contributing commercially. Actually, another 60 still have to come off patent. Okay. So, we have that runway that should fructify in the next sort of three to five year period. Some may go even beyond that, but most of them should start giving us commercial benefit in a three to five year time frame. Coming to the high-potent portfolio, Nitin, most of our portfolio essentially starts coming off from late FI 28 to around FI 33, FI 34. So it's a 5 to 6 year window in which we expect to commercialize most of these high-potent molecules. And then there is another element here. We are seeing that a lot of these Onco products did not get filed. The patents did not get filed in many ROW markets. So that's an early entry opportunity that we are also looking at, you know, with our customers in those markets.

Nitin Aggarwal, Analyst — Dam Capital

So, just pushing another point, there is a lot of companies, typically high-potency oncology has been an area where a lot of companies have been focusing on over the last few years, even from an India ecosystem perspective. What gives us an edge? What is the right to win versus the peer set here?

Yasir Raoji, CEO

See, so far, the tie-ups that we've had across geographies have been pretty reasonable, you know. So, I mean, once we get those tie-ups in place, then at launch, we would have, you know, we know we would have customers and we would be entering those markets.

Nitin Aggarwal, Analyst — Dam Capital

If we're getting the last one, on the formulation in CR that we acquired last quarter, any more, if you can give us some color on how you're looking at this business over our next two-three So we will be building,

Yasir Raoji, CEO

we've already identified a portfolio of around 25, 30, you know, dossiers that would be developed in the next three years. Okay. And, you know, have a reasonably close commercialized commercialization window. So, we expect to, you know, start seeing, you know, that portfolio sort of coming in in about three to four years' time. And the momentum with that will continue at the rate of around 10 to 12 filings every year. And these will be across markets, not just focused on North America and Europe.

Nitin Aggarwal, Analyst — Dam Capital

Thank you so much.

Operator

The next question comes from the line of Alankar Garude with Kotak Institutional Equities. Please go ahead.

Alankar Garude, Analyst — Kotak Institutional Equities

Hi, good morning, everyone. Sir, can you take us through the technology platforms that you have been working on over the past few years? You've spoken about flow chemistry in the past and how some of these initiatives have been helping improve the quality of the portfolio, as you mentioned, and hence that repercussion on EBITDA margins.

Yasir Raoji, CEO

So, Alankar, see, I would sort of break it up into one is that we went quite aggressively on the oncology side, okay, we got started just four years ago, okay, but we built up a pretty solid portfolio. Of course, it hasn't seen the light of day, and as I explained just in my last response, that we expect that from late FI-28 to around FI-33, FI-34, we should see that commercialization. Flow chemistry, we have already commercialized one project, and it's amazing how we've been able to knock down the cogs to less than half of what we had. It was a product that we already had and had a number of customers, but with Flow Capacity, we've been able to knock down the cogs to less than half of what we were doing with the batch processing. So, Flow is definitely going to play a big role going forward because we have five projects right now that we should execute commercially in Flow in about 18 to 24 months. And then, of course, there's the filing and so on. So that has certainly led to, you know, will be a good addition to our overall, you know, on the platform side. Then, of course, we have the IQGENICS platform that, you know, again, I just mentioned what we are planning to do with that. And another area that we've developed internally is pellets. We have currently 15 pellet products that we have already developed, and we are going to validate them within this next year to be able to launch those as well.

Alankar Garude, Analyst — Kotak Institutional Equities

That's very helpful, sir. Yeah, sorry, carry on, sir.

Yasir Raoji, CEO

No, that pretty much sums up, you know, what we've been doing in the last time. And of course, there's the complex products that we've been talking about, you know, and on the iron complexes, and that is coming along pretty well. So, we've already got four products that we are developing in various stages of development.

Alankar Garude, Analyst — Kotak Institutional Equities

Understood, sir. Just to follow up on the formulation part, from a manufacturing standpoint, where do you stand? And broadly, if you could break it up between oncology and non-oncology, what is going to be a strategy on the manufacturing side?

Yasir Raoji, CEO

So, like I said, we'll be building up a portfolio of around 25 inclination within the company to have our own manufacturing facility. We haven't taken a call yet, you know, to do it for sure, because there are third-party manufacturers that we can tap, at least in the short term. But then we feel that, you know, to protect intellectual property and to keep a good handle on quality, we might be better off if, you know, we build our own facility, which could take about 18 to 24 months. So we would be well-timed in terms of, you know, being able to manufacture our own products, you know, that could see approval in about three to four years' time. That said, coming to the Onco, what is interesting about most of the Onco portfolio that we have, and we do intend to go aggressively with the oncology portfolio for the front end. When I say front end, I mean, our business will remain a B2B, and we will stay sort of in the outlicensings with that. But the good part about most of the Onco portfolio that we have is driven by injectables. There is a good to not initially go for an injectables facility because most of the Onco portfolio would also be an Oral's portfolio.

Alankar Garude, Analyst — Kotak Institutional Equities

Understood, sir. The second question is again on margins. If we adjust the margins for the two one-offs, the EBITDA margins are still expanded by almost 650-700 basis points in the first half. Broadly, what would be the contribution of the stable pricing environment that you mentioned, lesser erosion in the first half, to this margin expansion in the first half?

Yasir Raoji, CEO

I would say around 2.5%.

Alankar Garude, Analyst — Kotak Institutional Equities

Understood. And broadly, you expect that to continue over the foreseeable future?

Yasir Raoji, CEO

Let's see. I mean, it's also driven by the mix, right? Okay, so if we maintain this mix and, you know, we should be able to, you know, keep it going. Let's see, I mean, and then there is the GPL element that Tushar just spoke about some time back, right? That with the higher GPL revenue coming in, we should see that going down a bit. We'll see, it's a little difficult to predict at this point.

Alankar Garude, Analyst — Kotak Institutional Equities

Got it. That's helpful, sir. That's it for my side. Thank you. Sure. Thank you.

Operator

The next question comes from the line of Ajas Lakhani with Unify AMC. Please go ahead.

Ajas Lakhani, Analyst — Unify AMC

Yeah, Dr. Raoji, firstly, congratulations to you and the team for really very steadfast and very good set of numbers. Great job, sir. Sir, my query is on the non-GPL business, which is now inched up in the current range. Do you expect this number to kind of sustain, you know, for the next couple of quarters in the same, you know, 500 crore kind of a range?

Yasir Raoji, CEO

Yeah, we expect that to happen.

Ajas Lakhani, Analyst — Unify AMC

Understood. And, Doctor, do you expect, I mean, are there any tailwinds on account of, I don't know, container shortages or, sorry, headwinds on account of any container shortages or, you know, Any costs which you are able to see as headwinds that you are facing in the near term?

Yasir Raoji, CEO

Yeah, so see, this global situation, you know, that is getting impacted by the Middle East conflict, okay, has the potential to, I mean, freight is one issue, but really freight doesn't, even if freight has gone up, but it hasn't significantly impacted us, we are paying But it's a small component, so we can kind of manage that. Where there are headwinds is on the, you know, prices of solvents that are driven by crude. So here, you know, like I was explaining, we've taken inventory positions at the right time and, you know, managed that in the last three quarters. Okay. Going forward, we hope to continue to do that. But you never know. I mean, if crude, let's say, touches $200 a barrel, I mean, solvent prices accordingly would get impacted. And that is probably the only headwind that we see based on our experience of these last eight, nine months, right, that could come and, you know, get us. You know, we managed, you know, on the raw materials, even on operations, our costs have been fairly stable because we moved away from gas. Okay, gas prices are going crazy, and that is impacting operational costs as well, but we, you know, for, we went for biobrickets for running the boilers, you know, and here, again, we have That has benefited us from an operational cost perspective. So, we are okay, but like I said, crude prices could impact solvents, and that will have quite a significant impact on our cost structure.

Ajas Lakhani, Analyst — Unify AMC

Understood. And the solvent cost as a percentage of our basket would be, could you call out a range?

Yasir Raoji, CEO

Yeah, on the overall basket, maybe around 10% to 12% on our raw material costs. So on the COGS, it would be more like 7% to 8%.

Ajas Lakhani, Analyst — Unify AMC

Understood. And, Doctor, just on the R&D, you know, you spoke about flow chemistry and particle engineering and all these capabilities that you're sort of trying to build out. From a team perspective, an R&D perspective, is that team build out sort of completed Or are there additions of, you know, people on that side that can continue to take place?

Yasir Raoji, CEO

We are pretty, for all these platforms that I mentioned earlier to Alankar's question, right, we've got those specialized teams working on all these projects.

Ajas Lakhani, Analyst — Unify AMC

Understood.

Yasir Raoji, CEO

I mean, we have one or two here or there, right, but, I mean, overall the teams are pretty stable in R&D.

Ajas Lakhani, Analyst — Unify AMC

Got it, Doctor. Thank you and all the best.

Operator

The next question comes from the line of Pratik with Unique PMS. Please go ahead.

Pratik, Analyst — Unique PMS

Hi, good morning, sir. Sir, one question on the CDMO. Is capacity constrained in any way is kind of not helping us win most projects?

Yasir Raoji, CEO

See, there are large CDMO projects in terms of volume, and many times they relate to, you You know, intermediates. Now here, we have not entertained any of that because we really didn't have the capacity, but now with Sholapur coming, that we can open that door. And my own personal experience in this space is that many times, you know, large pharma companies would start off with an intermediate and then, you know, migrate us to the API. So certainly, You know, with Shodapur coming up, you know, that window or rather that opportunity also can be tapped, you know, with a high level of confidence.

Pratik, Analyst — Unique PMS

And for the five projects, they still remain to be in the five, seven million per molecule range.

Yasir Raoji, CEO

Yeah, I mean, I think that that's what we are, you know, we are seeing in terms of the ticket size.

Pratik, Analyst — Unique PMS

And then, even for projects that would be in quite an advancement of growth, would be a similar size that we are currently targeting.

Yasir Raoji, CEO

It's a range, Pratik. I mean, I won't say that, you know, it's exactly between five to seven, because see, there's also a relationship element that we have to factor in. If we are bringing in innovators who have a deep pipeline, they do want to test the waters with us, right, with smaller projects in the beginning, and we are okay to entertain those projects. So, we don't want to be too picky, and as long as we can deliver within the capacity and, you know, we don't have to make significant investments, we are entertaining even smaller projects.

Pratik, Analyst — Unique PMS

Okay, thank you and all the rest. Thank you.

Operator

A reminder to all participants, you may press star and want to ask a question. The next question comes from the line of Siddharth Nigandhi with CWC. Please go ahead.

Siddharth Negandhi, Analyst — CWC

Hi, congratulations, Dr. Rajee, Tushar and the team for a great set of numbers. I had three questions. First up, considering your guidance of the upper end of your guidance of 12% growth with 35% margins, right? 35-36% margins. So, both on the upper end leaves us with about 13% growth and 33% margins for the second half. Now, considering how the first half has spanned out and the expected GPL growth in the second half, do you believe that the overall FI27 guidance has an upside potential? That's question one. Question two, you spoke on biobrickets. Now, considering how the year has panned out on crops, right, and then there is, you know, biobrickets from maize, which is likely now to have ethanol usage, do you see supply being a challenge, and is the gas and bricket fungible to that extent as fuel source? That's question two. And question three was on CDMO, right? That business is clearly lumpy, right? And therefore, on a sustained basis, from where we are this quarter, do we continue to bung in these kind of numbers? Should we see some lumpiness for down quarter? And therefore, on an annual basis, you know, what kind of CDMO growth are you targeting?

Yasir Raoji, CEO

You know, I'll take the last two. Tushar will take the first one. Tushar, you want to go ahead on the upside?

Tushar Mistry, CFO

Yes, your calculation on the full year or the second half numbers is right. If you had to do that kind of numbers, then that is the growth and that is the margin that we have assumed, considering two factors. One is, of course, the GPL business will take up or take off in the second half, which we have mentioned is reasonable margin, but not as good a margin as the non-GPL business. So that will have its own impact from a margin perspective. On the growth side, the non-GPL business generally sees the fourth quarter a bit subdued compared to the other quarters. And that would also result in this kind of growth in the second half. I mean, while non-GPL business will pick up, sorry, the GPL business will pick up, the non-GPL business will be kind of flattish or slightly lower than the current quarters that you are seeing.

Siddharth Negandhi, Analyst — CWC

Got it. That's helpful.

Yasir Raoji, CEO

Okay, coming to the biobrickets situation, see, there's a number of inputs, okay, in terms of biobrickets. It's corn, it's sugarcane, groundnuts, but basically it comes from the waste, okay, which essentially, you know, has a reasonably high calorific value and really is at the end of the life cycle in terms of, you know, that product. So when you asked about ethanol, yeah, ethanol is produced, but after all that is done, you will still have a solid waste with a fairly high calorific value. And so this gets then, you know, converted to briquettes. And we are not limited to corn here. Like I said, we have sugarcane, groundnut, and so many other crops. And India is a large agricultural country, so I mean, we don't see any problem there. In these last few months, we've seen very little escalation really in terms of the biobricket cost also. So, we're not seeing much challenge in biobrickets. CDMO, I agree with you, it's not a quarter-on-quarter thing, so one should not assume that, you know, we'll just keep hammering away, okay? Okay, but it's basically driven by the number of projects that we have that they are able to deliver and we look at it, you know, at least on a yearly basis. So, you know, we expect it to perform much better than last year, okay, and we have enough indication that it will, but I won't put a number yet on it, right, in terms of giving you that, okay, we'll close the year with, you know, with X or Y or whatever. I mean, you can make your conclusions.

Siddharth Negandhi, Analyst — CWC

Sure. What I wanted to know was more a longer term, three-year, you know, understanding what growth you would target on the CDMO business rather than just, okay, what's the rest of FI27 going to look like?

Yasir Raoji, CEO

Okay. Then it's a different answer here because, see, basically, the whole idea of adding new I mean, the IQGENX platform, for instance, Is not only going to work, you know, for producing, you know, dossiers, but we are also going to be able to offer that along with the API development platform to customers who are looking, you know, for a formulation as well, right? Right. And then, of course, there are pre-formulated products like pellets and granules and so on that we could also, that we not could, but we will be offering to our CDMO, you know, potential customers. So that then has a very different sort of expansion mindset in two to three years. Okay. We will be bringing in those. And IQGENX is not the only platform that we, you know, are bringing in. There will be a few more of this kind that we would bring in to sort of have a, you know, a more comprehensive offering to the CDMO.

Siddharth Negandhi, Analyst — CWC

Got it. One last one on the intermediates. You called out the constraint on intermediates, you know, which while there was no constraint in terms of overall capacity, there was a constraint on intermediates, which I assume would have meant that you would have purchased those. So, with Solapur coming up, does that mean that over a period of time, there could be more insourcing of intermediates, which improves margins? And then, you know, considering Solapur comes up, obviously, initially at a lower capacity utilization, I'm assuming, what sort of margin impact do we see on that? And on Solapur, can we get to the same three asset terms that we were historically at over, say, two to three years?

Yasir Raoji, CEO

See, we have started off, Solapur, to start off as a BIA site. Because like we had explained earlier that we have certain technologies developed already. So, certainly on certain large products where, you know, we see a benefit in insourcing, those technologies would be put in place in Sholapur and we would start buying from, you know, we would start making it ourselves. That is certainly the plan. It will have an impact on margins. Okay. But longer term, Sholapur will be, you know, both an intermediates and an API site. You know, because we do have a plan that once it starts off, then we will trigger, if not US FDA within a year, then at least the European EU GMP inspection, so that we can start catering, you know, to the API market as well. Having said that, we expect that in two to three years, our asset terms in Sholapur should be pretty good, more in line with What we have today, but in the short term, that is not likely to happen. We can't get to those levels of asset terms, partly because of the BI, and then also we can't cater to reg markets for API supply from Sholup.

Siddharth Negandhi, Analyst — CWC

Got it. Very useful. Thank you so much, and wish the team all the best.

Operator

The next question comes from the line of Nitin Adarwal with TAM Capital. Please go ahead.

Nitin Aggarwal, Analyst — Dam Capital

Thanks for taking my question again. Doctor, you mentioned something about the pellets, the product that you're working. So can you just give us some more color on the opportunity that you see here?

Yasir Raoji, CEO

Yeah, I mean, see, the thing is that there's a pretty significant, you know, interest in our portfolio, in our API portfolio, not as API, but as pellets, because there are quite a few companies, you know, that are, for instance, in the OTC space, okay, That, you know, would like a more ready product for them to, you know, quickly sort of, you know, fill into a capsule and then pack and sell. So, there's quite a good overlap with what we have in our API portfolio. So, here, you know, we got into this development about a year back, and we are seeing a number of opportunities that we can tap. Now, on the regulatory side also, there is a benefit here because we essentially can file a drug DMF rather than, you know, get into any kind of dossier filing for driving this business. So, it's coming together. The only thing is We've got to ensure that we find a good manufacturing partner initially before we make our own facility, which should take about 18 to 24 months. So, you know, the filing element and then the, you know, approval and then be able to sell, that should be about a year from now.

Nitin Aggarwal, Analyst — Dam Capital

So, this is going to be what our replacement value and product to the APA offering will be incremental market that we'll be creating for ourselves.

Yasir Raoji, CEO

It's both. It's a value-add to the API, and we open up to other customers as well who would not typically buy API.

Nitin Aggarwal, Analyst — Dam Capital

Thank you so much.

Operator

The next question comes from the line of Prasanjit Paul with Paul Asset Management. Please go ahead.

Prasanjit Paul, Analyst — Asset Management

Good morning. Thank you for the opportunity. First of all, congratulations for the great set of numbers. But, we have a strong cash in our balance sheet, and every quarter we are generating a strong cash flow, which is great. Now, my question is, with this amount of cash, we can grow organically, inorganically, we have a lot of options. So, do you have any long-term vision, like, let's say, four, five years, or by 2030, we wish to reach at that level? And what would be that growth part, organic growth, inorganic growth, or, like, CDMO-led growth? I just want to focus on the long-term vision with the growth acceleration, cash balance, and all.

Yasir Raoji, CEO

Yeah, so we certainly are looking in a few directions to, you know, grow. And we have looked at a number of inorganic opportunities in the last, you know, 15 months or so. And the clear sort of the clarity that we have with respect to what we want to get is basically something that will enhance the platform, the API platform that we have built. So, it would need to have, you know, a good level of synergy with the API platform, because then, you know, we can sort of continue to add more value to what we already do. And like I answered the last question on the pellets, right, it's a value add. Plus, we open up to a whole new set of customers. So that's the thought process. We are continuing to make the investments on the organic side. Like I said, very likely that we'll take a call soon to build a formulations, a oral solids facility, you know, and we should get that done in about 18 to 24 months. But it's not just that. I mean, we'd be looking at other We are open to both. Organically, it's simpler because we make the plans, build a portfolio and then keep filing and then we go ahead. So, that's a relatively straightforward pathway. On the inorganic side, we have to be careful, okay, in terms of making sure that there is a clear synergy build, you know, when we go for something inorganic. So, that's all I can say at this point, but clearly, we want to be able to, you know, create more value and add more value to what we have already done.

Prasanjit Paul, Analyst — Asset Management

So, any long-term ballpark figure or aspiration in your mind, okay, by 2030, you used to reach there, or CDMO should be that much of our overall revenue, any such thing?

Yasir Raoji, CEO

You mean in terms of a financial target? Yeah, they are there, but I mean, the thing is that, see, what's more important is the underlying sort of philosophy in the company, that whatever we do, we've got to do a good job at it and make sure that it's a quality business that we build. Okay, as long as we stay with that kind of fundamental thinking in terms of, you know, building a quality business and, you know, both in terms of, you know, margins, but also in terms of longer term sustainability, you know, that will lead to its own numbers. I can't tell you, you know, what we...

Tushar Mistry, CFO

Except the fact that on CDMO, we have been guiding that we will double the business from where it is today in next three to four years' time, which would effectively contribute to about between 12 to 15% of the overall revenues, is how we are looking at the CDMO business. Others, we don't want to give a number, but then there are, as Dr. explained, there are a good amount of initiatives that are there, which we are working on, and should lead to that kind of organic, as well as inorganic growth opportunities.

Prasanjit Paul, Analyst — Asset Management

Okay. Thanks a lot for the answer, and wishing you all the very best. Thank you.

Operator

Ladies and gentlemen, as there are no further questions from the participants on behalf of Alivus Life Sciences Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.