Operator
Ladies and gentlemen, good day and welcome to Q2 and FI27 earning conference call of OneSource Specialty Pharma Ltd. As a reminder, all participant line will be in the listen-only mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Avishik Singal. Thank you, and over to you, sir.
Both of which are available on the company's website as well as on the stock exchange website. The transcript for this call will be posted on the company's website within the next week. Please note that today's discussion will contain forward-looking statements which should be viewed in the context of the risk inherent in our business. Should you have any further questions after this call, our investor relations team will be happy to assist you. I now hand over the call to Neeraj for his opening remarks.
Thank you, Abhishek, and a very warm welcome to everyone joining this late evening for our Q2 results. Q2 was a strong quarter for us. In fact, it was our third consecutive quarter of sequential growth, and in line with the trajectory which we had outlined in our previous calls. So if you saw that, you know, revenue increased 37% year on year, 15% sequentially, and in the quarter we actually delivered more than 5 billion Indian rupees revenue. In fact, more hearteningly, EBITDA grew 53% year on year, 32% sequentially, and the margin expanded more than 400 basis points quarter on quarter, reaching 32% for the quarter. And the very fact that the pace of EBITDA actually was higher, EBITDA growth was higher than the revenue growth, it really demonstrates the operating leverage which is inherent in our business model. And in fact, if you look at the first half, put together both the quarters, it's been a 47% year-on-year growth of EBITDA. So the growth both in this quarter as well as for the first half is actually being driven by the additional DDC capacity, which has come online in the last quarter, which is quarter two, and which helped us both commercial as well as MSA revenue coming in thanks to that execution. And really staying with our DDC line expansion, you know, many of you saw our second cartridge line is now running commercial batches, you know, even though the geopolitics actually impacted its start by almost six months. But the fact is that today, the line, you know, already since September, it is operational, and it has immediately doubled our total production, you know, sterile production date. So the additional capacity, as we had said last time, the additional capacity really supports both the new launches which are coming in and provide us a significant ramp up of the commercial volumes which we are expecting during the second half. I am also happy to share with you that even our third line has successfully completed its factory acceptance test in Germany and is now, right as we speak, ready for qualification. I mean, this line also, you know, the arrival was longer than anticipated, obviously due to these extended transit times because of what's happening in the Gulf. But as you also know that these are, you know, very bespoke lines, and I think I explained in my previous calls and interactions with many of you that, you know, these are lines built for much larger batch sizes, and therefore, you know, they require quite rigorous qualification involving multiple European vendors. So, keeping that in mind, you know, while we are making every effort for it to start in Q4, but the commercialization, you know, might get pushed to the start of FY28. However, I just, you know, want to reiterate here that, you know, the wheel have all three lines fully operational and available for FY28. And this is not just, you know, the filling capacity. I think that's what is important to highlight here and what really differentiates one source from every other CDMO is that every one of our lines are backed by full end-to-end capabilities, whether it is not only cartridge filling, but assembly, labeling, packaging, and so on, including cold chain, all under one roof. And this differentiates not only in India, but even globally. The samaglutide footprint continued to grow during the quarter, and our partner Hikma launched the first generic samaglutide in Saudi Arabia, which really expands our presence in a very important market, which is off-patent. And also, more hearteningly, you know, the Dr. Reddy's API has thought has commenced, I think, which they also spoke about in their earnings call. And this would really help relaunch in Canada as well as launch across multiple other markets where they already have an approval. And apart from Dr. Reddy's, also the, you know, the supply ramp up from our other Canadian customers is also on track for the quarter three. Now, moving on to our, you know, second strong leg of our business, which is very emerging very fast, which is biologics. You know, it's increasingly becoming a very key growth pillar for us. And during the quarter, we had multiple new project wins, which is both from new customers who we onboarded, as well as existing customers. You know, we have onboarded two projects for end-to-end development, two commercialization projects from a U.S. biotech. You know, we secured an additional new program for one of our, you know, one of the top global animal health companies and our existing customer. And this, as you know, came, comes back to back, you know, from the previous quarter where we had EU customer wins. Now, these wins, whether the U.S. or Europe, these really reflect the really integrated offering which we have, which we call from gene to device in biologics, which, again, very few CDMOs offer, and the fact that India's growing position as a trusted hub of global biologics, biosimilar development, as well as manufacturing. Now, the same is reflected in our Biologics RFP funnel, which is at highest cover with multiple projects in advanced stages, and all this, you know, is really going to be driving the growth beyond FY28 for us. As far as base business, especially the injectables, you know, we discussed last quarter, we are adding new capabilities, you know, including free-filled syringes and new lyophilization capacity. And the planned shutdown, which is of the site, is in fact currently underway. It started at the back end of quarter two, but the new capacity will be available from next quarter onwards. And both at the same time, you know, both are injectable and soft gel business grew last quarter with multiple launches actually happening in several markets during the quarter. Another thing which we're always proud of, our compliance track record, where, you know, during the quarter, we successfully completed multiple regulatory and customer audits. And also, as a new capacity comes online, you know, this track record is really – maintaining the track record is really what the whole team is doing. Just to conclude, you know, with the line two already commercial, line three progressing, you know, new launches coming through and coming, you know, more coming in the next coming quarters, A very strong biologics funnel and momentum across the business. You know, we are really set for our next phase of growth. We expect the second half to be stronger than the first. And, you know, this is that we are also reaffirming our FY28 outlook, which we have given of $400 million revenue and $160 million EBITDA. And also, you know, really important as we build the capabilities, capacities, and the customer relationships, you know, this, we believe, will really sustain the growth beyond the current year and beyond our guidance. Finally, I really want to thank our teams for their commitment and our customers for the trust they continue to place in us. And I really want to thank everyone here, and would be happy to take questions along with...
Danish, we're good to go. Can you please take the Q&A?
Operator
Sure. Thank you so much, sir. Ladies and gentlemen, we will now begin with a question and answer question. Anyone who wishes to ask a question may press star and 1 on their touchstone 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'll wait for a moment while the question co-assembles. Our first question comes from the line of Rupesh Tathya with Long Equity Partners. Please go ahead.
Yeah, hi, sir. Am I audible?
Yeah, congratulations, Neeraj, on a fantastic set of results. First question is on capacity across all our businesses. So, soft gel, what is the capacity utilization? SteriScience, I think we had a planned shutdown, so if you can, you know, quantify what kind of revenue loss we saw in Q2, and is that capacity going to be available in Q3, or it's going to take a bit of time. Again, on DDC, is the new line 500-liter batch size line, or are we still on the 200-liter batch size? And when do we expect this capacity to reach optimum utilization line to DDC? So first question is on capacities across all of DDCs.
Yeah, Rupesh, thanks for asking. I think, as we've been maintaining, I'll start because I spoke about the DVC capacity. I'll answer that in that order. So the new line which is there, we mentioned it last time also, is actually going to be increasing the output simply because it can work with the much larger batch sizes. And this is the line which will run 500-liter batches for us. And this is what, you know, when we say doubling our trial capacity days, that's what it is really doing. So it's already the 500-liter, all the new lines which are getting added are able to handle significantly larger bath sizes. That's why I mentioned with the increase, because these are fairly bespoke lines, you know, the qualification period takes much longer. And, you know, that's what you saw. So it will all be 500 liters. And even larger, in fact, these lines can handle even larger injectables, you know, as I mentioned, the site where we took the shutdown, in fact, the shutdown started only at the back end of the quarter ending September, and it will, the shutdown will last this current quarter. And then starting January, the lines will be available. These will significantly increase our liabilization capacity and capability, which you know there is a big gap in supply and demand as far as liabilization capacity and globally. In fact, most of the shortages, if you see in Europe or in the U.S., if you see FDA's shortage list, you know, 70%, 75% is contributed by injectables, and lyophilization is a big contributor to that. So, you know, we are looking at really improving, you know, those supplies for these markets. And finally, on soft gel, I think the traction continues. We have had multiple launches which happened. The capacity utilization continues to increase. But you also remember we have said that in our current site, there is no possibility for us to expand further. That's the reason we are going in for a greenfield site as far as soft gels are concerned, which would not only, you know, add significant new capacity, but also provide us opportunity to get into a completely new area of containment and high-potent soft gel, which is, again, a significant demand coming in from customers.
Yeah, yeah. So just one clarification and second question I'll ask. So, what is the capacity utilization in soft gel? I mean, is it 60-70% or is it optimum? I mean, if you can quantify it. And this new line, because it's a capacity 500 liter, which is 2.5X the existing line, so it will take 2-3 quarters to go to optimum utilization or will go to optimum utilization really fast? So, those are the clarifications. And then the second question is, $400 million revenue for FY28, so Q4 exit run rate will be, you know, let's say 90 million, 38% or 36% margin, will be within striking distance of that as a Q4 exit run rate. Generally, we give this exit run rate across our company. So that is the second question.
As, you know, on the cartridge line, it's a fairly quick ramp up. You know, there is, because we have significant demand, as you're aware, both from existing customers, existing markets, and the markets which are opening. So that, you know, the ramp up to optimum capacity is fairly quick as far as the cartridge line is concerned. For soft gel, you know, it's because, you know, there is a key requirement from customers who are moving from other, you know, the CDMO part who are moving from other manufacturing sites to us, so it takes a finite time. So it's ramping up. You know, we started adding capacity last year, and, you know, we increased almost 3x that capacity. Now a significant part of it is already covered, and we already have a visibility of, you know, as I said, visibility of 80% plus from a capacity utilizing point of view. That's why, because we can't increase the capacity at this site, we are going in for a new green field, new green field. As far as the question on the FY28, as I said, right, I said we've reiterated our guidance for the full year, and we will have our lines, all three lines available for FY28. It is just the fact that, you know, because it's a beef pork line, the qualification takes longer. So, you know, whether it will be available for full quarter core or part or not, you know, that's something which I mentioned earlier. So, to answer your question, FY28, you know, line is available, and that's why we are retrading our diet.
Okay. Okay. Thank you. Just one quickly, in bio-similar, will we be part of G2DA across all our partnerships? Because I think Formicon is almost like a first to five, is my understanding. So just if you can answer that question, and then I'll get it.
Of course, Formicon is a key customer, but I will not be able to talk on specific issues. Having said that, I can tell you that, you know, with all our customers, we have some of the largest products in the biosimilar.
Operator
Thank you. Ladies and gentlemen, anyone who wishes to ask a question, may press star and one. Our next question comes from the line of Abdul Qadir Kuranwala with ICSA Securities. Please go ahead.
Yeah. Hi, sir. Thank you for the opportunity. My first question is with regards to the supplies for Dr. B's. Any indication you can provide as to how the ramp-up is happening in terms of the revised APIs, what you would have got, and how are you looking forward for the next six months in terms of the capacity reservation for this client?
Yeah, Abdul, thank you for your question. So, I think, you know, it is very much in line with what commentary they already made on their earnings call. You know, the supply of API has, as I mentioned already, has already commenced. And, you know, by within this current ongoing quarter, we expect the supplies to start, supplies to start first, obviously, to the Canadian market and then also multiple other markets where they already have approvals in, you know, emerging markets, India and, you know, multiple markets. And, in fact, there are markets where the approvals are going to be coming in over the next two quarters. So we see that, you know, the numbers which they have given in their earnings commentary, you know, we see those, we don't see any reasons to, you know, follow exactly those.
Got it. So very helpful. And I am referring to your presentation, slide nine, where you talk about six new auto wins. which includes two biologic products. So, sir, you would help us understand, you know, what are those balance score about, whether it's in the DTC segment or apart from it also you're pursuing something?
So these are, you know, when we talk about multiple wins, these are across. So there are, the wins are in biologic, there are wins in DTC, and there are wins in base business. That's how we actually operate and see. So it's across. As I mentioned earlier, the momentum is across our businesses, and the wins are both from a new launches perspective as well as existing.
My next question is to Anurag, sir. Sir, if I go through your cash flow statement, the trade receivables for the first half of fiscal 27 has gone up a bit. So anything to read about or just about the, you know, the shipments which would have happened towards the later part of the quarter?
So, thank you, Abdul. You know, I want to actually give you the big macro picture. If you really look at the developments over the last couple of quarters in terms of the overall shipping lines and the lead times in terms of supply, getting the access to, you know, the containers and everything, There is multiple impacts that we are seeing as a result of all this geopolitical development. People that I talk to, people that I, you know, meet up, at least as a CFO community, I see everybody is experiencing about two to three percentage points impact on the P&L. When I look back in terms of comparing it to our results, I see that since most of our raw material is actually passed through, we don't have any significant impact, at least as far as the P&L is concerned. We've got implication on fuel, freight costs, shipping lines availability, but at least, you know, we've seen as far as the P&L is concerned. But we do see some implication of these delays in terms of the overall cycle times when it comes to our working capital. The delayed deliveries to the customer does, in fact, at least 45 to 60 days in terms of the overall cycle time. And I do believe that it is not structural, it is temporary, and it is only a timing impact. Hopefully, you know, within a quarter or two, we should start seeing this getting normalized. Of course, there is implication as a result of the significant higher volumes in the last couple of quarters, which also shows up into the call. But clearly, there is no quality issue.
Understood, sir. Very clear.
Operator
Thank you. Our next question comes from the line of Girish Bakru with Orbimed. Please go ahead.
Yeah, thanks for taking the question and congrats on great numbers. Neeraj sir, can you comment on how many sterile ways line 2 was available in Q2? And how much did it run?
So, I think I mentioned that this was, September was the month when we started, you know, the, but the fact remains that, you know, as I said, it doubles up. And thanks to this line, you know, the ramp up of not only the commercial sales which we are going to do for Canada and other markets, but also gives us the ability both for existing customers which have been pending as well as add new customers, you know, which also, as you know, we have not been able to do for the last one year thanks to the capacity constraint which we had. Now, with this, immediately, we have got multiple options and multiple opportunities available to onboard customers and meet the demand of existing customers, especially, you know, when now Dr. Addy's...
Understood. And in past, you have commented, I mean, of course, numbers from line one, something around 60,000 pens per day. If I were to just, I mean, compare the batch size related factor, I mean, one should assume that this 60,000 will basically grow by 2.5x, right, by line two?
It's like to like, so I think if you look at the yields and so on, it's basically, you know, roughly 50 to 55,000 on the first line, And if it goes to 500, it comes to about, you know, anywhere between 120,000 to 130,000. Because, you know, yield varies from product to product, from customer to customer. But, yeah, more or less, that's the math.
Understood. And, I mean, of course, not really wanting the pricing number, but when we, let's say, look into FI28, Can you give some broad comment on blended realization, which we can see? Will it stay largely same or reduce while the volumes will increase with the new line and more markets in the emerging markets, including Brazil, Turkey, all opening up? So how should we look at the realization?
I think our realizations are, you know, there is not a major shift we are seeing in realization. As we've always said, our pricing to the customers has always been volume-based and not market-based, whether it's emerging markets or Canada or anywhere else, and we don't see that changing. We have also said that the very fact that when there is an increase in batch sizes in a sterile business, the cost of manufacturing per unit comes down, and we are happy to share the savings there with our customers. So it's a fairly win-win. The customers who are efficient enough and able to allow us to go to larger batch sizes, that efficiency benefit they get, because we also get, and we share that efficiency.
Got it. And this last one, if I can squeeze, I know FY28 is still firming up, but how much DDC can we forecast in FY28 guidance at $400 million? Ballpark, is it 50% or much higher?
I can only tell you that, you know, the very fact that I mentioned that our, you know, three lines, we are eagerly awaiting the third one to add, and so are our customers. So it will be, you know, DDC will be a strong contributor to our FY28. It will be like it will be a contributor to our second half. It will remain a very strong contributor to our FY28 numbers.
Operator
Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Our next question comes from the line of Chirag Shah with White Pine Investment Management, Private Limited. Please go ahead.
Yeah, thank you for the opportunity and congrats for good sort of results. Lillet, my first question is more on the batch sizes that you indicated. So, if I have to break between line 1 and line 2. Line 1 is, we can assume it's an optimal batch size, right? Six days a week, etc. Line 2, where we would be and how should we think about the flow-through to a bigger level because of that?
Sirak, thank you for your question. Although your question wasn't up to you, the earlier line, the first line, had a max batch size. What we could do in that line was 200 liter, and that was what all our customers had moved to. Remember, we started on the same line at 30 liters and ramped up to 200 liters. On the new line, that's how bases the demand. Currently, the capability of the line is to go up to 750 liters, but the customers right now are ramping up to 500 liters. I think that's what the case is. And the very fact that there is, you know, very strong demand which is there both from existing customers, existing markets, as well as, you know, new markets which are going to be getting approvals, customers are going to be getting approvals, and the new customers which are coming on board. So there is, you know, as I said, robust demand, and that's the reason we have said that we are also very excited with the fact that the third line is already at our site. You know, it's an exciting development for us. And the fact that I already mentioned we have a very strong OPEX leverage in our business because the cost is more – the incremental cost is very limited compared to the incremental revenue. And you will see, that's how you already see the EBITDA margins improving for us quarter-on-quarter, again, thanks to the OPEX leverage. And that's the reason of us giving the guidance what we have given.
Okay. Let me replay it. I think you missed out my question. What I was trying to understand is, in terms of efficiency level, in terms of number of batches that we run per week, And obviously, the size of the batch, line one is at optimal level, right? So, efficiency gains coming from line one is limited operating needed gains. Where are we in line two? You indicated that customers have gone up to 500, but not all customers would have been, right? So, the current results that we have, what element of what you call excessive costs are still lying, which, and how should we think about it as we increase the revenue size?
So, in terms of efficiency, yes, you're right that, you know, the line one is running at optimal efficiency. Line two has given us the opportunity to do MSAs. So, obviously, the utilization in a MSA is different from utilization in commercial, and it's going to be a ramp-up, remember? It's, you know, as we start, you know, the market volumes are ramping up, and accordingly, our line will also be ramping up because there's a mix of MSA and CSA. A typical steady-state picture is that, you know, in any line, it should be 75-25, 75% commercial, 25% MSA, and that's how we expect, you know, steady-state for the second line also to be.
Okay. And second, housekeeping questions for this. So one, what is this consumables that we see as a line item in raw material? Because it varies a lot. So is it linked to any specific business or what exactly is what we classify as consumables? And second, employee costs, there has been steady increase since last five, six quarters now. So are we still in hiring phase? How long we need to hire? When that will stabilize for us?
Yeah. Chirag, hi. Chirag, thank you for those questions. Chirag, consumables is a variable, you know, it will depend upon the activity level. Every time we take a fresh batch, every time we take an engineering batch, every time there is a, you know, there is a significant ramp up in volumes around any of those things, it will vary in those particular quarters. I mean, you know, those are clearly a function of the level of manufacturing activity. And as we had said in the past, I mean, we are in line with our guidance in terms of ramping up our overall capability within the organization and building up the employee base in our Unit 2, which is our flagship site, which is ramping up capacity 2x to 3x within this year, It clearly was a function of what we wanted to be, and we are on track with that. Clearly, there is nothing that surprises us in terms of the employee cost increase. The way you should look at our business is these are elements of fixed cost that we will have to enable the manufacturing lines with because these are specialized capabilities. These are capabilities that require a high level of quality observations, and for building all of that, it's a conscious, focused effort towards building that capability, Thank you.
Operator
Ladies and gentlemen, anyone who wishes to ask a question, may press star and one. Our next question comes from the line of Herschel Patil with ASK Wealth Advisors. Please go ahead.
Thank you, and congratulations for a good set of numbers. Just one question to start with. The ETR, that's the expected tax rate, I believe we've got a lot of deferred tax also into it. So, just wanted to know how should we look at this expected tax rate for 27-28 going ahead, and how long would the effort tax benefit be available to us?
Sorry, I missed the name to ask the question. Very quickly, this is Anurad. At this moment, we anticipate that we should assume through the current level of ETRs will continue through till FY28, at least till the third
quarter of FY28. Right, sir. We should be assuming the current rate of taxation. Is it that you said?
Right. I mean, these are of our brought forward losses, which we continue to utilize as we start, you know, as we continue to generate more profits, and these will continue to remain at least for a significant part of the point.
Got it, sir. Just another second question on basically the capacities, I believe we've discussed it, but just one point to understand with respect to the new lines as well as the existing. So, in general, as I understand it, this looks to be more as a strong demand and a supply constrained space. But when it comes to commissioning of new lines, ideally, what kind of a time, 15% of a utilization to maybe 70-80% of a utilization level?
So I think, you know, as I explained, these lines are not your typical lines. These are bespoke lines which have been made to be able to deliver the kind of batch size output which customers really require, based on the robust demand which we have. I think what you need to understand, that's why, because bespoke lines, having multiple vendors, the whole qualification process takes time, especially the new line which has come in, which has got a German isolator, a German filling line. And so because of that bespoke nature, the whole qualification time from the installation of the line to the start of commercial batches, you know, it takes a significant amount of time. But at the same time, you know, the ramp up. The good thing is once these lines start, you know, the utilization is fairly quick. In fact, the second line which we have started is, again, we are very quickly looking at a very, very significant utilization. But remember, as a sterile process which we have said, the overall utilization I'm talking about is the same in the range of 225, 230 sterile days in a year. So, because of all the work which it takes, you know, media fills and the various quality reviews which happen, that's why we've got 225 days. And we expect that the current line, you know, to be doing those 225 days fairly rapidly, considering the demand which we have, fairly rapidly.
And probably with the line 3 that is slated to be on and probably Q4 or early days of Friday 28, I believe towards the first half of 28, we should be expecting the same ramp-up pattern for that as well, which is 225 to 230 sterile days in a year.
That's correct. That's correct.
Correct, correct. Sir, just last two bookkeeping questions, if I may, kind of season. I just also wanted to know for this thing, for this Q2 results, do we have any impact on the margin or something like that?
Called out separate. So, you will be able to see that in the publicly available financials.
My sir, if there's anything, I'll get into the follow-up. Thank you.
Operator
Thank you. Ladies and gentlemen, anyone who wishes to ask a question, we press star and 1. Next question comes from the line of Mohamed Patel with Adelweiss Public Alternatives. Please go ahead.
Operator
Yes, we can. Yes, please go ahead.
Yeah, I have a question which is twofold. So one is how is Semaglucite doing in the markets in which our customers have got approval? And how are our customers doing currently?
Yeah, so, Mohamed, I think, as you have seen, right, that this was a product which was always constrained all these other markets which are – and I think, you know, the demand stays robust. I mean, the very, very clear visibility which we have, you know, how SEMA, you know, 20,000, 25,000 units, more than 200,000 units a month as of September, and this is when typically India takes, you know, for a chronic therapy like this, it takes three years to stabilize. So there is still a very strong growth path available there. As we see in markets like Canada, which is obviously the largest market outside of U.S., we have seen already the market growing from 8 million units to 12 million units. And currently, post-genericization, today it is more or less, we are talking about 16, 17 million units, and continues to grow. Again, because, you know, the generics have just launched in. Unfortunately, you know, Dr. Reddy's had to come out of the market, and now it will be back for once. Once everyone, all the players are sufficiently, the product is sufficiently available, we will see that market to continue to grow. We have said earlier, and there is enough market analysis available, that markets like Canada, markets like Brazil should be anywhere between what they are today. So there is a very, very strong tailwind behind this, and the fact that we have all the major customers in these markets, Canada, all for approvals with us, Brazil, many, many customers waiting in the wings for approval, India, multiple approvals. So, I think all this, the market movement is supporting, you know, the robust demand which we are seeing.
Is it safe to say that FY28, customer projections are strong at the moment?
Yes, I mean, that's the reason, you know, the fact of our commitment of CapEx is based upon both what we see our customers giving robust demand As well as what we are seeing, you know, overall market demand going up.
I have one last question. How should we think of one source growth beyond FI 28?
Yeah, so I think I mentioned, you know, the fact is that all our businesses, we have long legs. You know, I'll start with drug device combination as the markets, more markets open up. You'll see FY28, FY29, Europe starting to open, FY30, FY31, the big market, U.S., will open Western Europe, U.S. So there is the DDC itself having very, very long legs. In emerging markets, you'll see growth already quite significant. So that's the reason that our capacity expansion had been kept in line with the fact that, you know, a number of markets opening up, large markets, when it comes to our second pillar, which is biologics, the guidance period which we have given, all the revenue in the guidance period is coming from what we call MSA, which is a pre-approval R&D revenue. And post that is the time, by 29 onwards, is when the commercial revenues start. So, in fact, those commercial revenues are of a very different order of magnitude, you know, than comparable small molecules. So, you know, very strong growth coming from biologics. Also the base business. So, all the capacity which we are adding in our injectable business, you know, which will be getting filled as over the next two to three-year period. I mentioned soft gelatine, where a completely new line coming up and a new modality of high-potent soft gels coming up. I think that you will see all those contributing to the growth beyond FY28.
I double-digit is something that we aspire.
We will give you an outlook.
Operator
Thank you. Our next question comes from the line of Abdul Qadir Puranwala with ICAC Securities. Please go ahead.
Yes, thank you for the follow-up. So, first on, you know, Brazil, so I understand few generics have got an approval, but any color what we are getting from our customers as to when they are likely to launch this product there?
Yeah, so it's a very interesting market, Abdul, simply because it's, again, very high incidence of diabetes, obesity, a very, very strong focus on body positive and aesthetics and so on. So it's a very, very interesting market. Right now, while there are a couple of approvals, but there is only one generic, which is the local Brazilian company, which has actually launched the product. Many of our customers are waiting in the wings to get the approval, and I think some of them have already announced publicly that over the next quarter or two, the approvals will come, and we are ready. We are ready to support their demand, and you will see. You will soon see approvals.
Understood. And so lastly, one bookkeeping question. For the current quarter, that is Q2 of 27, if you could share, you know, what was the MSA to CSA ratio for the DDC business?
So, it's, you know, it has started because the availability of the line, as I said, was, you know, from September onward. So, since then, we were able to do MSA. We are still, you know, because the new line had a very limited period, it will be difficult to give. You know, it will not give you the correct picture, but as I said, in a steady state, you know, we should be 75-25 between commercial and MSA revenues.
Operator
Our next question comes from the line of Sanjay with Ampersand. Please go ahead.
Yeah, I said thanks for the opportunity. Can you, in addition to this EBITDA margin guidance, can you give something about your return on capital employed and deleveraging plans?
Sanjay, hi. We clearly have an upside in terms. We are currently in the investment cycle, and as we've said in the past, we've been continuing free cash. In the moment, we will continue to remain one and a half in terms of, you know, our debt levels. We do anticipate that by end of FY28, we should be in, you know, high 20s in terms of our OC returns. That's what we anticipate at this moment. We are clearly moving forward towards.
Operator
Thank you. Our next question comes from the line of Gaurav Bhama with GM Financial. Please go ahead.
Sir, my question has been answered. Thank you for the opportunity. And congratulations on the good set of numbers.
Operator
Thank you. Next question comes from the line of Prabhat Agrawal with FinMisters. Please go ahead.
Thank you, sir. Just wanted to ask one question. You mentioned 12 launches this season. So, how many are GLP-1 DTC versus the sterile inductables?
So, Pravath, I think, as I mentioned, a very significant launch which we did was in Saudi Arabia by our customer, Hikma, of samaglutide, which is very key. And, you know, across the portfolio, the launches have happened in soft gelatine, in injectables, in our markets like in U.S., in Europe, in some of the emerging markets. So it's a very large list, and obviously, you know, we can't talk about individual customers, only the ones which are in public domain or which are okay for us to be announcing. But I can tell you that this is across modalities, across markets, and across customers.
Thank you, sir. Sir, one more thing I wanted to ask. By financial year 28, EBITDA is expected $160 million. So, is this adjusted or reported?
No, it is. We have, you know, all our EBITDA numbers are reported.
Thank you, sir. Congratulations for the good setup number. Thank you very much.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for the closing remarks. Thank you, and over to your team.
Thank you, everyone, for this late evening, and really appreciate all the questions, and thank you for participating.
Operator
Thank you so much, sir. Ladies and gentlemen, on behalf of OneSource Specialty for Money Limited, that concludes today's call. Thank you for joining us and you may now disconnect your lines.
