Shilpa Medicare Limited (SHILPAMED) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Q4-FY26 results conference call of Shilpa Medicare Ltd. As a reminder, all participant line will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an assistance by pressing star, then zero on your touch-tone phone. I now hand the conference over to Mr. Monish Shah from Shilpa Medicare. Thank you, and over to you, sir.

Thank you, Rhea, and welcome to our fourth quarter and full year FI26 results conference call. Today we have with us Mr. Keshav Butada, Executive Director and CEO of Shilpa Pharma Life Sciences, and Mr. Alpej Dalal, our CFO. The financial results and the presentation are uploaded on the stock exchanges and the transcript along with the audio will be available on our website and the stock exchanges as well. Please note that today's discussion might include certain forward-looking statements based on the current expectations and assumptions. These statements are subject to risk and uncertainties that could cause actual results to differ materially. The company undertakes no obligation to publicly update or revise any forward-looking statements. With that, I would now like to hand the call over to Mr. Keshav for his opening remarks. Thank you.

Hi. Very good evening, everyone. There are certain years in company's journey where performance improves, and there are certain years where foundation for next decade is built. For Shilpa Medicare, FY26 has been one such year where we have built our foundation. Today, Shilpa is no longer defined by single vertical. We are building a highly differentiated pharmaceutical platform. Spanning across complex APIs, specialty formulations, biologics, and ADCs, with integrated CDMO capabilities. Few companies in India operate with a breadth of technology and capabilities across both small molecule and biologics. Importantly, we believe we are still in early stage of monetizing few of our platforms. As utilization improves across our manufacturing infrastructure, and more differentiated products enter into our commercial phases, we see clear path towards sustainable growth, stronger margins, and increased return ratios in coming years. Let me walk you through our Q4 F5 26 performance and for the full financial year. I'll start with our API business. So, in speciality CDMO segment, We have first our USNCE program, which was launched in Q4 by our big pharma company. Our second USNCE program with one of our partners, where we are supplying them API for their phase 3 program. The phase 3 studies are ongoing. The third USNCE program, where we are developing API and formulation for our US customer, unicisive therapeutics. The program submissions are already done and they are expecting approval in this financial year, FY27. The dedicated manufacturing production blocks for OLC was successfully commissioned in Q4, FY26. And we are planning to do the validation batches in this new block to finish in Q1, FY27. Two new NCE programs where the client audits were scheduled in Q4-FI26 were successfully completed in Q4-FI26, and we are expecting to start initial development revenues in F527. Apart from that, on the generic side, we have added more than 15 new oncology very strong pipeline, where there are global top oncology blockbusters, which are expiring, which are having patent expiry up to 20232, are already taken in the grid. One new non-oncology product, which is completely import substitute product, process validation was successfully completed in Q4FI26. Methotrexate, which is again very complex import-substitute oncology API, CEP for the product was received in Q4-FI26. New oncology block capacity, which was a significant capacity which we are adding in our oncology journey, the block is expected to get commissioned in F527. On peptides, we continue to remain optimistic on the growth for peptides. Where we are working on multiple generic peptides and CDMO peptides. New dedicated peptide large-scale manufacturing block. The equipment ordering is already completed and we are expecting to commission the facility in FY27. We are also working on multiple payloads and linkers which are going into ADC program. In Q4 FY26, the payload which we had supplied to one of the big pharma company, the registration batches were completed at their end using our payload. So subsequently it will be taken in the filing at their end. Overall API business is likely to have a steady growth in next financial year FY27. Coming to formulations. Our first new chemical entity which is norurso deoxycholic acid. As explained in the previous quarter, the product is really doing good. And we see very good clinical results in the patient. And we continue to see good traction in FY27. NorUDC as a product we are also planning to take globally. We have done scientific advice and submission in US and Europe. And we are planning to start human studies in FY27. Three commercial 55B2 products are currently approved in USA, and all products are doing really good, and we expect the volumes to grow steadily, quarter on quarter. Abraxin, which is paclitaxel albumin bound product, which is a very complex injectable product. Exhibit batches were successfully completed in Q4-FI26, and we are expecting launch of this product in F528. Enzalutamide tablets which is again a very complex product. We have successfully completed the registration batches for this product which is fully non-infringing. And we are planning to file this product in US and Europe in FY27. So both Abraxen and Enzalutamide tablets are expected to get commercialized in FY28. Rotigotin transdermal patch Europe launch as explained in the previous call will be launched in Europe in FY27. We have also successfully submitted with USFDA roti-gotin transdermal patch in Q4-FI26. Ondensetron Extended Release Injection, which is one of a very complex injectable product developed by us, we are expecting to launch in FI27 in India. We are also planning to take this product globally and we will be starting human studies in FI27. Apart from above, we have very good complex differentiated 55B2 product pipeline, for which details are already provided in our investor presentation. Overall, with existing and new product launches, there is likely to be a good growth possibility in FI27 in the formulation divisions. Now, coming to biologics, Afleburse, which is one of our most complex ophthalmic product, our human clinical study is doing good, and we are on track for launch for FI27. Our second product, which is Nivolumab, our human clinical clinical study approval received for India. And also for IMA, we have submitted our scientific advice. We are expecting response in Q1-FI-27. Four new biosimilars were added in portfolio in Q4-FI-26. Coming to new biological entity pipeline. Our first program with MAP-3 Biologics, the program development is successfully completed, and we are planning to enter human phase 1 studies in FY27. Our second program where we are partnered on this product with Alveolus Bio, the program development work has been initiated, and we are expecting the program to enter into human studies in FY27. Two NB programs will be entering in the phase 1 studies. In FY27. Coming to CDMO business, as mentioned previously, five active CDMO NB programs are ongoing. And in the Q4 FY26, the phase one clinical study batches for one of the innovator program was initiated. And we are planning to finish the supplies in FY27. Our first ADC biosimilar which We have developed completely using payload, linker, and conjugation was successfully completed, the development work was successfully completed and we are planning to enter human studies in FY27. We have also initiated development of second ADC biosimilar product. The main strength what we are building in the ADC space is we are building our own ADC manufacturing suit, which will have manufacturing of MAP, manufacturing of payload, linker, and conjugation. With that integrated manufacturing capability, it will be one of its kind in India. Now coming to our recombinant human albumin program, global phase 3 clinical study approval was received from CDSCO for our Europe study. We are also planning to submit IMPD which is required to be submitted in Europe when you are planning to start a study in Europe. That submission is planned in first half of FY27. Overall, our focus remains on monetization of all our investments, and we remain confident that work we are doing today is shaping Shilpa into a global technology-driven healthcare company in years ahead. Thank you, everyone.

Yeah. Good evening, everyone. This is Alpesh Alal here. You know, a warm welcome to each one of you to our Q4 results call. Let me briefly take you through the financial performance for Q4 as well as the full year ended in March. I'm pleased to report that we have delivered our highest ever quarterly revenues of 439 crores, recording a growth of 30% year-on-year. And for the full year, 26, again, we have had historic revenue number delivering 1,549 crores, growing at 18%. Our gross margin continued to remain healthy at 68% for the quarter and 70% for the full year. And along with our highest revenue that we have reported, we continue to report highest EBITDA also, both on quarterly as well as yearly basis. For the quarter, EBITDA was at 121 crore, growing at 40% year on year, with an EBITDA margin of 28%, improving around 2% year on year. Whereas for the full year, EBITDA was at 445 crores, reflecting a growth of 30% year-on-year, with yearly EBITDA margin of 29%, again, approximately 3% year-on-year improvement. This improvement in EBITDA was largely driven by increased revenue from key verticals, driving positive operating leverage. Moving to our other financial highlights. Our interest outlook for FY26 has seen reduction on year-on-year basis and we believe that it has now stabilized at the current quarter run rate for the near future as we expect to fund our capex programs broadly via internal accruals. During the quarter, we also had an exceptional gain amounting to Rs.30 crores on account of stake sale in one of our JV companies, Shravarti Advance. Where we have sold 31% stake and now hold 34% stake. This company no longer remains a JV company. It is now classified as an associate company. Overall, our adjusted path, before considering any exceptional gain, for the quarter was 87 crores and for the full year it was 232 crores, growing at about 135% year on year. On the debt front, our net debt for the year increased to 613 crore from 550 crore in the previous year, which is in line with the growth in our business operations. And our capex of 361 crore in FY21-26 was primarily funded by internal accruals and deployed in key verticals of API, CDMO, and Albumin facility. I would also like to draw your attention to improving ROCE profile. There are adjusted ROCE excluding investments made in high growth potential businesses like biologics and albumin. We have seen a significant improvement from 4% in FY23 to 17.4% in FY26. All these have been contributed by all the verticals across the board. In the recent past, our formulation business and biologics business are showing steady growth. We remain confident that this improving operating leverage will help us achieve better ROC in future. Now, just getting on to the segmental performance. Our API business clocked a revenue of 259 crores for the quarter and 985 crores for the full year, growing at 16% both on quarterly as well as yearly basis. The growth was on account of improved offtake of key products from newly expanded capacities. Coupled with strong captive demand from our finished formulation vertical, this vertical integration of our formulation products help improve the overall margin profile of the entire group. Formulation revenue for the quarter were 205 crores, growing at 54% year on year, and revenue for the full year were 618 crores, growing at 30% year on year. But importantly, excluding the licensing income, the base business reported robust growth of 64% for the quarter and 75% for the full year. To sustain this momentum in our FTF vertical, we continue advancing a pipeline of complex products, and our strategy of developing and launching niche products globally through strategic partners is gaining very good traction, as evidenced by our European formulation business, which delivered revenues of over 200 crores, growing by more than 100% year-on-year. Our another product, North UDCA, which was launched in India in the previous quarter, continues to gain traction, and the strong reception has translated directly into a healthy order book for the upcoming quarters. Moving to the biologic segment, the revenue for the year were 150 crores, growing roughly 100% year-on-year, and this strong growth was driven by continued deal momentum that we are witnessing in our CDMO business. With that brief introduction, I would now like to open the session for Q&A.

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 touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question.

Ladies and gentlemen, we'll wait for a moment while the question queue assembles.

First question is from the line of Kiran D from Tabletree Capital. Please go ahead.

Thank you so much for the opportunity, sir. A couple of questions. The first question, especially our U.S. partner has significantly grown its market share in 35% in Pemex and 5% in Bortism based on prescription data. However, our U.S. formulation revenue has grown only from 54 crore in FI 25 to 80 crore in FI 26, and it's kind of flatlined over the last two, three quarters, right, around 28 crore, despite all this, I mean, sorry, U.S. partners scaling, right, for these two products. So, my question after this elaborate introduction is, why aren't we seeing a steep growth in our U.S. revenues in line with our U.S. partners' market share gains?

Yeah, thank you, Kiran. So, I think on the U.S. revenue front, as you rightly mentioned, right, we have seen an increase in revenue and that will most likely continue in the FY27 also. Only against last year, this year, you will see we have stopped selling our generic product, which was azacited in U.S. So, that supplies to U.S. we don't want to do it because the margin is no longer sustainable for us. So now we are moving for even US market more on to the super speciality products.

Got it, got it, got it. So, I mean, would assisted in be like 8 crore revenue in the previous year, for example?

Pardon, can you repeat? Sorry, your question was not here.

So, how much was the assisted in revenue in FI-25, yes, sir?

Sorry, I don't remember that off late. Maybe that is something we can send you later. You can coordinate with Mr. Monish, our investor relations man.

Sure, sure, sure. So, then, the second question, sir, is... In terms of our Norduka scaling with three of our partners and our own brand and so on and so forth, are we seeing a steep scale-up or have we kind of flatlined over the last four months in terms of demand and there are multiple other studies going on or the doctors are still trying to test it? So, what I'm trying to understand is, are we going to see a speed scale up in FI 27 of this Noduka along with our partners, or are we kind of seeing, okay, last quarter results is what might get repeated for the following year?

No, Kiran, I think one thing I can tell you, if you see Nor UDCA, we have launched the product in Q3, right, sometime in November, December. And if you see from there, today we are in Q1. So we have seen just on quarter-on-quarter basis itself, we have seen a steep growth. So we have to see how the trajectory will be for the upcoming quarters because the total disease, the curability duration is six months. So, once the six months duration is completed, then we will have more data from doctors, from hospitals.

Got it. Got it. Got it. Understood. Understood, sir. So, we will probably get a better hand by the end of this.

Sorry to interrupt, sir. Could you please wait for a moment? The management line has been disconnected. The management line is connected back. Yes, sir, please go ahead.

Yeah, Kiran, I have an audible? Yeah, now you have an audible.

Yeah, sorry for that. Sorry for inconvenience, everyone. So, yeah, as I mentioned, Noreo DCA we have just launched in November, and it's a six-month disease duration. So, we have to observe how the volumes will further grow. So, we will be able to give you more clear picture in sometimes in second quarter of this year.

Got it, got it, got it. Last question, sir, is our EBITDA margin for the year, again, is 29%. Do we expect over the next one to two years as and when Shilpa scales for our EBITDA margins to go to 35% back? And second question is service income is around 200 crore. Do we expect a similar kind of run rate, I mean, expectation, similar or more in FI 27?

Yeah, see, as far as EBITDA margin is concerned, Kiran, the fact is that, you know, as the business grows, a bit of operational leverage does kick in, right, but, you know, 35% is an ambitious target, which we would be working towards achieving, but, you know, we can't really say that, you know, it would be achieved immediately, because whilst we grow the business, we also have to spend more for growing the business. Yeah, and your second question was on 200 crores business in? Licensing.

Yeah, licensing income.

Yeah, see, again, licensing income is something which is, you know, which at times could be a bit lopsided, but, you know, you can see in our presentation also that we have, you know, a very robust pipeline of molecules coming in. So, there is certain visibility that we have got for our existing deals that we have signed, and then there are a lot of other things which are in the pipeline. So, it will depend on some of those aspects, but generally, we do expect our licensing revenue to remain in similar range, at least.

Okay. Perfect. Thank you so much.

I'll join you. Thank you.

Thank you. Next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead.

Thanks for the opportunity. I'm audible. Hello.

Yes, sir. We can hear you.

Yeah, sure. Congratulations for a good set of numbers and for the full year as well as for the quarter. So, the first question is on the European formulation business. So, if you see the NiloTenit doing well and we have scaled up pretty well during the F526, so, you know, given when do you expect the second Gendic launch? And secondly, you know, we know about the roti-cotein launch in this financial year. Apart from this, we have mentioned seven more, seven products. So which will be the remaining six products that we are planning to launch? What can be the scale of these products, if you can elaborate on that? And how should we see the Europe formulations scaling for us in FI 27?

So, Ankit, there are two questions here. So, first part on Nilo-Tinib, right? As I mentioned in the previous calls also, we are expecting some generic competition to come in current financial year. But as in Europe is a very typical market where usually the tender contracts and all are for more than one year or even two years for many of the markets. So, we don't see that for the current financial year there will be a significant change in the Nilo-Tinib volumes with respect to value. But we have to observe it, the more impact will be there for the F528. So to answer you, that is what is the answer for Nilotini. And on second question on the launches for Europe, apart from Roti Gotin, there are many other generic products also like I mentioned previously. We have Tadalafil Oral Disintegrating Film that will be launched in Europe in this financial year. And apart from that, there are some generic products like Exitini and many other products which we will be launching and further market share will be improving in FI 27.

So, we should be assuming decent 40-50% growth in Europe in FY27 as well, given the base of FY26?

Yeah, so, you know, we may not be in a position to provide any guidance, but we do expect the European business to, you know, have a healthy growth.

Sure, sure, sure. And the second question was on the biologics business. So, if we look at it, like this year, we had 150 growth sales, we would have got some milestone payment from Orion also for the albumin. So, like, how should we look at the growth for FY27 and FY28? Right. FY27, what will be the key triggers because, you know, Adali as a molecule in India is growing at a decent pace, but it's still a small molecule. So how should we look at this number for FY27 and FY28, especially given, you know, AFLE will be launched towards the later half of FY27 and the remaining NIVO, PEMBRO, you know, launches will happen only in late FY28. And like the other CDMO business on the biologic side is something, if you can elaborate more, how should we see the growth. So if you can broadly talk about the biologic business, the key drivers for the business for FY27 and what kind of growth should we expect in FY27 and FY28.

So, Ankit, I think in biologics, as I mentioned in my speech also, the most important part in biologics is if you see till last year, right, we were still a product and partnering everything we have done more for India. We just started in Q4 where we have partnered our first product, Nivolumab, that also for Latam market with a company called Stenke. Right. So for the current year, you will see mainly in Biologics, the main growth drivers will be CDMO. We have existing CDMO, like five programs which are going on and some more programs which are in discussion. We'll surely convert some programs. So there will be good revenue contribution from our CDMO business. And also we will be doing licensing for this Biologics, whatever we have, Biosimilar products and ADC products. Right. Both we will be partnering for current year in Europe and ROW market. So, there will be good amount of licensing income also what we would achieve in FI 27.

So, in this, can we expect the growth rate for last year to continue this year, given our base is small, still small currently, but last year also had the Orion milestone payment. So, despite that, what kind of growth rate should we expect for FI27? And FI28, I can clearly see the triggers, but for FI27, how should we look at it? And even FI28, can this segment X of albumin become a 400-500 crore revenue generator for us?

So Kiran, I think on future numbers, we don't give any accurate data on that. But what I can tell you is there are a lot of growth triggers which are possible in biologics. And we are seriously working towards monetizing of each of these assets. So yes, there is a good growth possibility. What would be that percentage? How much we will grow? I think we have to observe that. More details you will get to know in upcoming quarters.

Sure, sure. And last question on OLC, you know, the Padoopa date is approaching, and in your presentation, you have still mentioned that we are hopeful for launch in FY27. So, like, how should we look at this? Because it becomes a very key growth driver for us for the current financial year, given we will receive milestone as well as, you know, our formulation supplies for the product. So, like, how... Sure are we on, you know, getting clearance for the product and going ahead with the manufacturing here.

So, Ankit, I think even in current financial year, FI 27, right, in our business plan, there is no, like, major contribution from OLC because what we anticipate is this year they will get approval, but major revenues, what we feel will get started in FI next financial year. So, but it's a program which is of our partner. When they will get approval, how is their filing strategy, many of these details they don't share with us. So, we have to observe. It's completely dependent on our partner.

So, okay. Thank you.

Thank you.

Thank you. Ladies and gentlemen, please limit your questions to only two questions per participant. Should I have a follow-up question, we request you to rejoin the queue. Next question is from the line of Krisha Kansara from Molecule Ventures. Please go ahead.

Hi. So, first of all, congratulations on a very good set of numbers. The first question is quickly on the P&L side. The share of profit of 18 crores from associates and JVs which we have reported in this quarter. So from which entity or rather from which joint venture or which associate entity has this profit come? Was there any one-off in those companies because we have never reported this kind of profit from our JVs? That is my first question.

Yeah, so, you know, Krishav, you know, this particular entity is our associate entity. It is not a joint venture. It's an associate entity by the name of Maya, where we hold 35% stake. It has been a research-driven company, which over a period of time has been investing in a lot of programs, and hence we were taking our share of their accumulated losses that were coming up, which made our investments in consolidated results come to zero. Obviously, the business and the company was good, so we have never impaired those assets in our standalone books of accounts. But in our consolidated results, we, as per accounting standards, we had to take impact of our share of loss. This year, when we have received their financials, they have shown a very significant improvement in the performance based on which the entire value has been reinstated. Also, you know, the profit part of our profit share of our portion has also been accounted for. So, this is something that, you know, the company has started generating revenues and all and which is showing up, whether it can continue with the same set of performance or not is very difficult for us to comment because that's not an entity that we control. But, you know, we are in touch with them, we closely monitor their operations and all, but at this stage we will not be in a position to comment whether, you know, this is something that can continue as a regular feature.

Okay, understood. And so my second question is on biologic segment on efflibercept. So we had outlicensed this molecule for India and Russia markets. So have we received some part of the licensing income from these two partners or it is expected after the phase three completion? And will the licensing income in case of efflibercept be higher than that of Adalimuma?

Yeah, Krisha, so for the first question, right, we have received only few milestones in last few financial years, but major part of milestone will be received in the current financial year on launch and on then on one year completion and all. Okay. And I think second question was.

Yeah, so it was, uh, that was a license.

Yeah. That is right.

Okay. Okay. And so the 150 crore of biologics revenue, which we see in FY26, uh, would it be possible for you to break it up in, um, terms of how much was from CDMO, how much was from our own, uh, biosimilar revenue and, uh, what kind of revenue was from licensing income?

Yeah, I think it would be, you can reach out to Monish to get those details later on. Yeah, Krisha?

Sure, I will do that, sure. Thank you.

Thank you. Next question is from the line of Parth Mehta from Valum Capital. Please go ahead. The line of Mr. Pat has been disconnected. Next question is from the line of Raghav. Please go ahead.

Hello, sir. Am I audible?

Yeah, we can hear you.

Sir, my question is on the biologic side. So when do we see our biologics portfolio entering, you know, Europe and U.S. developed markets?

So, Raghav, I think in the current financial year, right, as I mentioned, I'll repeat again, Nivolumab and our ADC product and also the NB product which we are doing. So, two of them. So, totally four products will be entering human global studies in current financial year. So, once we enter that in FI27, so we expect sometime in FI29 the commercial revenues to start in from US and Europe. Not from US, from Europe and ROW.

Okay, but Adali and Afshilisept, we don't expect that to be lost.

So, Adali, we are already getting India revenue, and Europe and ROW market revenues will come again in FY29.

Okay.

And for Affilivership, currently there is no plan of going into Europe market, because it's a very long study and very costly study, and we feel that we are late for Europe market. So we are not planning to go for this product until and unless there is some partner who is ready to invest in the clinical study.

Understood, sir. And, sir, what would be the timeline for same for Norwood? When do we see that reach larger parts in the developed market?

Even Norwood cars would be in FY29. In Europe, but if I tell you about ROW market, we will start seeing revenues in FY28, in ROW markets.

Any color, sir, on what could be the opportunity size for this in ROW market?

See, I think that can only be told maybe in this financial year, on the second half of this year, right, because now we have started discussing with some ROW partners also, and we will have a lot of Indian study data also. I think we are also generating phase 4 data. So I think once with that, when we start working with our ROW partners, we will be able to throw more insight, but there is a decent potential what I can tell you.

Okay, thank you.

Yeah, thank you.

Thank you. Next question is from the line of Sheikh Mohammed, an individual investor. Please go ahead.

Congratulations for the excellent set of numbers. I am not having that much knowledge about company products because it is very in detail products. I just want to know regarding the FY27 guidance and top line and bottom line, if any, if you can provide.

Yeah, so thank you for your question, Sheikh Mohammed. I think as we have been explaining that we do not provide any guidance per se, but I think we have been growing since past two, three years at a very healthy rate, and we expect that trajectory to continue.

Okay. Sir, Tranexamic Acid Spray, some product hasn't launched in India, or it is exclusively for any particular country?

No, it is currently not launched in India, because we are working on some government regulations. So, currently, it's not launched in any of the markets in India.

Okay. Sir, previously we have launched green tea films, right? So is that product continue or we have discontinued that product? We have discontinued. Okay. Thank you very much. Thanks a lot. Thank you.

Thank you. A reminder to participants, you may press star and want to ask questions. Next question is from the line of Sanjay Kumar from I Thought PMS. Please go ahead.

Hi, Keshav. First set of questions on dutasteride. Correct me if I am wrong. It seems to be a blockbuster product based on the Phase 2 trials. Yet, despite completing Phase 2 in late 2022, you didn't file for Phase 3 till April 24. You didn't start Phase 3 till Jan 2026. Now that we're going global for most of our products, we should speed up our clinical trials processes, right? And on that note, do you feel this is not a good product? Can you talk about this product and the potential for topical data storage?

Yeah, so, Sanjay, on the... I don't understand the product name, but what I can tell you that SMLTOP09, right, the product, what we are doing in that product is, that's a product where, why we did not start in last year's human studies, because there were additional preclinical study data, which were requested by the regulatory bodies that we were generating, okay. So all that data generation is completed, and now we are entering into global studies, so that is what we will be starting in the current financial year.

Okay, can you talk about the potential of this product, and it is better to sell it, and do we have any ultra-sensing conversations for India at least for this product?

No, currently, we don't have any out-licensing discussion, Sanjay. Currently, because the product is still in cleaning, and especially androgenic alopecia is a very big market, but there is a lot of data generation on safety, which is a very important requirement. So, the data, what we will be generating in the Phase 3 study, I think after that, we will discuss more on the partnering.

Okay, got it. And you will have three novel products in India, in FI27 or early FI28, which is Nord-UDCA, Montensatron, and the one that we just discussed, Dutasteride. Can these three products do like a cumulative 506 and all three put together 500, 600 crores in two, three years? Because all three are very niche, novel, and huge potential.

Yes, Sanjay, I think that will depend on our partners also, right? Because you will see for many of the products we partner and our partner performance is very important for us. You will see that for all these products like in Nor UDCA case, you have seen we have partnered with very good three companies, right? So even for the other products, we would love to partner with the best companies in India. I think if we get a good partner and the product is performing well, we feel it's a very good possibility.

Okay, just last question before I come back. On the patent and the FTO position for Ondan Citron and Nord-UDCA, because Nord-UDCA, I think FARC has a polymorph patent in EU and I think globally. So do we have a different crystalline form that's on Nord-UDCA and then on Ondan Citron, do we have a freedom to operate versus Heron, the innovator? I know Ondansetron is not polymer-based, it's an insoluble solid, but will our patent be at risk when we go global for both these products?

See, what I can tell you, Sanjay, these are very confidential strategies, but what I can tell you, we are having our own IP strategy on this, okay? And we are starting human studies for global markets, so obviously all this work we would have done.

Okay, cool. Thank you. I'll come back.

Thank you.

Thank you. Next question is from the line of Girish Bakru from Odimed. Please go ahead.

Yeah, just wanted to actually talk on albumin. Why is the IMPD submission delayed? I think last quarter we mentioned it would be Q4, and now we are saying first time.

So, Girish, I think as I mentioned previously also, on IMPD submission, what we are planning to do is we are planning to do it from our new facility, right? So, in the new facility, the execution of exhibit, sorry, the batches for IMPD submission is ongoing. So, once that is complete, then we will be submitting. That is the reason I mentioned it will be in first half of FY27.

And typically, after submission, how much time does the regulator take for giving you trial approval?

It takes usually three to four months.

Okay.

Give clarity, right, so the Europe study is divided into two parts, the Indian patients and Europe patients, okay? So, in Indian patients, the study approval already we have received. So, once the batches are completed, we will be starting our India study, which is for Europe submission. Is it clear?

Can you again explain these two patient studies, what individual differences are there in between two studies?

No, there is no individual difference. Only there is a requirement in Europe when you submit such complex products. They want some patient data also on European patients.

Understood. Okay. Yeah. In phase 3, let's say, does it, I mean, addresses again more data on whether this can be therapeutic grade or immunogenicity? What exactly would the outcome be focused on here?

So in phase 3, right, we will be evaluating both safety and efficacy of the product on more number of patients, and that is the data we will be submitting to the agency.

And because, I mean, I'm just asking because it's a new technology, right? And there are very few products out there, recombinant ones. So would you say this would not require any further investments or additional studies before you see some revenues from FI29?

I think if you have followed our previous conference calls, we have successfully completed with European agency scientific advice. So scientific advice is like a written document which you submit to the agency and take their approval on our clinical study. So that approval is already taken. So we don't expect after this any other additional studies.

Understood, understood. And just lastly, I mean, so how big would you say would be the market size in India particularly? And because it's a largely import dependent product, right? So would there be, let's say, some sort of incentives that we can see even if the product is approved?

So, I think Girish Albumin, everyone knows it's a very good and decent opportunity, and there is always scarcity in the market. So, incentive and all, I don't think there is any other incentive we are expecting on the product. The product itself will have a differentiation, the recombinant, one highly pure product. So, I think that should drive the volumes.

Understood. Thank you.

Thank you.

Thank you. Next question is from the line of Pratik Srivastava from Nivesh Wisdom. Please go ahead.

Thank you for giving me the opportunity to ask the question, sir. First of all, congratulations for a great set of numbers. My first question is on the API oncology side of things, sir. So we have this new oncology block expansion, which is underway, and it's ready to be completed by FI 27 for around 15 plus new oncology APIs, right? Sir, how does that translate into, you know, contribution to the revenues per quarter? Because most of the time, I think our contribution has been like lower than 130 crore per quarter for last several quarters. I know that some of that has been translated to formulation. But can you share some more color on this, on the contribution to the revenue from this side?

Pratik, I think in API oncology side, you will always see that even in future, right, lot of our sales will be to our captive formulation, okay? Because our main strength in oncology API is we are very strong in developing non-infringing APIs. And we usually try to backward and forward integrate with our formulation, then go to the market that will have maximum realization. So, even going forward, it's not that these products are something which will be launched once the batches are done, like next day, the launch will happen. Once the batches are done, the formulation, people have to do the batches and then launch it. So, oncology as a business for us in API will further grow, but it is not a steep growth, it will be a steady growth.

Got it. And it is and you're saying it will continue to contribute more towards the formulation business. This is more of a backward integration story or this will have its own, you know, sales cycle, sales channel, business, different commercial DMF filings, things like that, sir.

So it will be both, but major contribution will be to formulation, our own captive formulation.

Got it, got it. And my second question is on the semaglutide GLP-1 side of things, sir. We completed the validation in Q4. Congratulations for that, sir. And what I read is, DMF is to be ready by first half of 27. Sir, there are, I see in the market now, there are lots of different players, sir. You know, a lot of Indian, several Indian peers are also developing semaglutide story. So, what would be our differentiation?

So, I think I mentioned in the previous call also, Simaglutide as a product, our main strength is we are doing both synthetic and semi-synthetic API, and also we are forward integrating with our own formulation. So, Simaglutide itself is a very big opportunity, and because our facility has the global accreditation, we still feel in such a big opportunity if we get even small pie of that market share, right, that is a decent revenue which is possible with the product.

Got it. And are we targeting India first and then the regulated market, ROW?

No, our main focus will be on the export market. India will be our second priority in this product.

Okay, got it. For that, have we identified any partner for commercialization, sir?

Yeah, as I mentioned, right, we are also doing our own formulation. So our biggest partner is our own formulation business.

Okay. Okay. All right. Thank you, sir.

Thank you.

Thank you.

Participants, please limit a question to only two questions per participant. Should I have a follow-up question? We request you to rejoin the queue. Next question is from the line of Amish Kanani from Knois Investment Managers. Please go ahead.

Yeah. Hi, sir. Sir, one thing which is noted is, you know, API is now 50% of the business and, you know,

formulation and biologics is 50%.

So, congratulations on, you know, kind of going in that direction where, you know, we are valuating. The question, sir, is as we grow at a high rate and given our gross margins are high, you know, our EBITDA margins also are, you know, reaching at a very healthy level. But given the programs that we have and R&D needs that we have, we'll also have, you know, reinvestment that will be done. So how do you think, sir, about, you know, EBITDA margins, given that, you know, otherwise, if we restrict our investment, it can go really very high. And obviously, as a businessman, we would like to reinvest back. So how do you think about investment versus, you know, increasing the EBITDA margin? At some level, you know, we will reinvest back. So any thoughts there, sir? It will be helpful. And on the API side, sir, any challenges on the incipients or, you know, key starting material that, you know, because of the supply chain disruptions globally? If any, are there any issues that you need to worry about?

See, I think on your first question, Amish, as we previously mentioned also, Shilpa as a company principally what we are doing is we are not investing into anything which is long term. So whatever investments we are doing which are near term and mid term, right, only on those we are investing. And all these are like decent sizable opportunities which are possible for the group. So, yes, we don't want to, like, we are not investing anything which is long-term. So, if we continue this investment in our existing near-term and long-term opportunities, then only there will be decent growth which is possible. So, we will continue to do that. That's the answer. And on second question on the raw material and solvent availability, yes, we don't see any major challenges on that, but only the prices have gone up significantly. So, that is the only thing, but availability is there. No problem.

And, sir, quickly, can you recap the capex for this year and next year, if possible?

Like, for the current year, already it's available. So, we don't see any significant capex growth than last year. It will continue to sustain.

Sure, sure. Thanks. Thanks a lot and all the best.

Yeah, thank you.

Thank you. Next question is from the line of Abhishek from Padmajha Investment. Please go ahead.

Yeah, am I audible, sir? Yes, we can hear you. Yes, on the USFTA audit, it should not come by now, right? Is there any issue with this? Assets?

So Abhishek, I think as previously mentioned in our quarterly calls also, for majority of products which are required for US, right, we are now doing it from our third party CMO side. And we don't have a pipeline of like 1020 products launched every year. So we have very complex differentiated products which we want to launch. So our major focus on US will be from third party CMOs. That is what we have as a company. There is no issue with the FDA, it's just that the facility, when the audit happened, the FDA has given some observations, we have done the compliance, and now we are again waiting for the re-audit of that. So, we can come out in some time. It's not that we will never come out, but it will not have any impact on our revenues.

Okay, but the audit already happened, but the decision is still pending, if I understand it. Is that the case as of you?

Yes, correct. So, we are working closely with FDA on the next steps with USFDA audit.

Okay, okay, okay. And the plant utilization, even though it is not actually being used for USA, is being used for other geographies.

Yeah, because our facility has all the global accreditation starting from Europe, Latim, Saudi, all the markets. So the plant occupancy is not at all an issue. And because we have such a strong pipeline of differentiated products, we don't see any capacity crunch issues currently in our formulation facility.

But there are certain tentative approval spending because of this audit issue, right? How many products are in that calendrum as of now?

See, the whatever products which are in tentative approval space, right, they are not, they are, many of them are already, like, very much genericized, and we don't see even if we get the approval for these products, we'll have significant launch opportunities. So, only there are few products which are having tentative approval, but the patent, expiry, and the launch for those products are late. Okay, okay.

So, there is no big loss. Okay. Yes. Congratulations on the numbers. Thanks, honey. Yeah, thank you.

Thank you. Next question is from the line of Vishal Manchandana from Systematics. Please go ahead.

Hi, good evening, and thanks for the opportunity. On roti protein patch Europe launch, can you share like what time can we take to reach full potential and any sense on the peak potential that you expect from the product?

So, yeah, Vishal, roti protein transgermal patch, as you know, is very complex product, and we have approval for this product. So, in the current year, it will be more like initial launch and ramp up, and in subsequent year, in FI28, we will see a, like, full potential for the product.

So, you can reach full potential by next year. Substitution will not take long, once you are approved across markets. Yes, you are right. Okay, and on nilotinib, do we expect approvals in other markets, or we are kind of fully, in terms of geographic reach, we are there?

No, you are right. Actually, nilotinib in our rest of the world market is also expected to do pretty well, and we will be launching in some of the rest of the world markets also in next financial year.

Okay, and in Europe, you are fully entrenched in terms of the potential opportunity?

Yes, you are right. Okay.

And if you could share what on our CDMO business, like what was the total CDMO business across all domains, API formulations and biologics?

So, if you see for the full financial year, right, just on the API side of the business also, we have clocked approximately around 110 crores of CDMO business, right? And we are also doing similarly our CDMO business in biologic side also. So, majorly our CDMO revenues are in API and biologics. So, what is that number and more details, you can work with our person, Monisha, our investor relations person, he'll be able to provide you.

Got it. And on the on the licensing fee number, do we have any contribution of the CDMO business or that licensing fee doesn't have any CDMO contribution?

That doesn't have any CDMO. That's your product licensing.

Okay. And just one final one. The the oncology breakthrough molecule that you are servicing to an innovator. Any any color there? Can that be meaningful this year next year?

Yeah, we expect it should be meaningful in FY 28.

Okay, and so would that be larger than the numbers you would have attained in the past? Can that? Yes. Can that? Okay. Thank you. Thank you. That's all for me.

Yeah, thank you.

Thank you. The last question is from the line of Kiran D from Tabletree Capital. Please go ahead.

Okay, thanks so much for the follow-up. So, a couple of questions. One, the polymer business, I mean, we had a contract, I mean, 4 million contract, I think, was mentioned in the annual report last year. So, this year, what is the kind of revenue? And more importantly, more than the polymer revenue this year, how do you see the potential of our polymer business in the next one to two years? Has it the potential to reach a 20 million kind of round rate? If we just elaborate, I'll be great.

So Kiran, I think I will not be able to give you exact numbers, but Polymer as a business, right, it is a business which will have good growth possibility, but it takes some time. So, like currently, we already have one commercial product in the Polymer space, so that has added decent revenue in FI26. So we will see how the opportunities are scaling up in FY27. But yes, going forward like in very few of years, it has a good potential what I can tell.

Got it, sir. Okay, cool. And one question, sir, Alpesh, you mentioned ROC is 17.4% in FY26, excluding investments made in potential high-growth biologics and NBE business. It's in the presentation as well. So our gross block is 281 crore. So when you say excluding investments made in potential high-growth biologics and NBE, how much is that? Is it like approximate 700-800 crore? Is that the right number?

Yeah, I think some of those numbers, you know, you should reach out to Monish to get those details, right? He should be able to provide you the exact details over there.

Okay.

Thank you. Due to time constraints, that was the last question of the day. I now hand the conference over to Mr. Alpesh Dalal for closing comments. Over to you, sir.

Thank you. Thank you, everyone, for your time and your thoughtful questions. Each year, we remain committed to growing and scaling the company to new heights, and your continued interest and support mean a great deal to us. Should you have any questions that have remained unanswered, please reach out to Monish, and we will be happy to provide those answers to you. Thank you.

Thank you. On behalf of the Shilpa Medicare Limited, that concludes this conference. Thank you for joining us, and you may not disconnect your lines.