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

Operator

Ladies and gentlemen, good day and welcome to Q2 and H1 F527 Earnings Conference Call of Shelley Engineering Plastics 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 the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Before we begin, a brief disclaimer. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and it may involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Amit Sangvi, Managing Director of Shelly Engineering Plastics Ltd. Thank you and over to you, sir.

Amit Sangvi, Other

Thank you very much. My apologies to everyone on the call for running a few minutes late. Good afternoon, and thank you for joining the Shelley Engineering Classics Limited Earnings Call for the second quarter and first half of FY27. With me today are Sanjay Shah, our Chief Strategy Officer, and SGA, our Investor Relations Advisors. Our results and investor presentation for the quarter ended September 30, 2026 have been filed with the stock exchanges and are available on our website as well. I trust you've had a chance to review them. Let me start with the headline numbers. Consolidated revenue for Q2 FY27 was 320 crores, up 24% year on year and 14% sequentially. This is our highest ever quarterly revenue. EBITDA rose 25% year-over-year and 22% sequentially to 102 crores at a margin of 31.9%. Importantly, this is the first time we have crossed the 100 crore EBITDA milestone in a single quarter. Three points define this quarter. First, healthcare is now the primary engine of our business, contributing 55% of revenue and growing 78% year-on-year. Second, gross margins recovered to 60%, about 70 basis points higher than a year ago, following the cost pressures we highlighted in quarter one. Third, the consumer business has finally stabilized over two sequential quarters, although it continues to operate below last year's levels. The quarter was shaped by certain geopolitical uncertainties, input cost volatility, and divergent demand trends across markets. Development in West Asia continued to impact freight costs and polymer prices, while demand for home furnishings in Europe and the U.S. remained subdued. We navigated these pressures through pricing discipline, procurement efficiencies, and a favorable product mix, prioritizing margin resilience and quality of returns over volume-led growth in consumers. The global GLP-1 market is also entering a significant phase of transition. With semaglutide patent protection expiring in the first wave of markets, generic competition is gaining momentum. Launches commenced in India in March, followed by Canada's approval of a generic in April and Brazil's approval of its first generic in August. The resulting price reductions are widening patient access to these therapies and increasing volume. For Shelly, this represents a significant opportunity. As affordability improves and patient access expands, demand for drug delivery devices is expected to grow. We've established partnerships across multiple customers and geographies. We are strengthening our platforms and scaling capacity, including through our Abu Dhabi facility to capture this next phase of market growth. Let me turn to segments, starting with healthcare. Revenue stood at 175 crores in Q2, up 78% year-on-year. Healthcare contributed 55% of revenue compared to 38% a year ago. For the first half, healthcare revenue was 318 crores, up 81%. Growth was led from our pen injector platforms, particularly the GLP-1 programs. Alongside steady volumes in insulin and other therapies, we have delivered 10.4 million devices in the quarter and remain on track to exceed our full year guidance of 36 million devices. These results reflect the strength of our customer partnerships, our engineering capabilities, and our ability to scale complex device programs with consistent quality and precision. On the innovation side, you know, innovation has been central to the development of Shaili's health care business. From the outset, we have focused on building our own IP-led platforms, creating differentiated solutions for our customers and patients. We continue to build on this foundation. During the quarter, we signed two new contracts for these platforms and launched. Our latest innovation, the Tobii Reusable Auto-Injector, our two-step reusable auto-injector for next-generation GLP-1 therapies. Tobii Reusable retains the same simple two-step interaction of our Tobii disposable auto-injector while introducing a multi-use format. The prefilled syringe is housed in a single-use syringe pot, which attaches to the main mechanism. The patient retains and reuses for over 200 injections. The device delivers medication subcutaneously and incorporates a needle lockout mechanism for added safety. The pod is made entirely from a single material and can be made out of recycled materials as well, making it very easy to recycle as well as sustainable. Compared with the fully-disposable auto-injector, Tobii Reusable is designed to reduce material consumption, energy use... Shipping as well as cold chain requirements. Our initial assessments indicate that conservatively, it is 70% more sustainable than a disposable two-step auto-injector. It combines the convenience of a disposable device with the material efficiency advantages of a reusable system. For a weekly therapy that patients may use over several years, this is very meaningful. It demonstrates how thoughtful engineering can address not just the delivery of a medicine, but also the patient experience, cost of treatment, and environmental footprint. These are increasingly important considerations for patients, payers, and our pharmaceutical partners across the world. We are also extending our platforms beyond GLP-1 into new therapeutic areas with a particular focus on emergency use and oncology. While GLP remains our largest growth driver, broadening our presence across therapeutic areas will make our healthcare business more diversified and resilient over time. In emergency use, a device has one critical responsibility, to deliver the full dose the first time, often in stressful circumstances and in the hands of someone without medical training. There is very little margin for error. This is fundamentally a precision engineering challenge and one that plays directly to Shelly's strengths. In oncology, an increasing number of biologic therapies are moving from intravenous infusion to subcutaneous injection. This transition calls for devices engineered to handle larger volumes and higher viscosities. We are developing our platforms to address these more demanding drug delivery. Getting to consumer industrial, consumer revenue was 116 crore, down 14% year-on-year and flat sequentially. During the quarter, we received business confirmation for a new product from an existing customer and for higher volumes of an existing product from another customer. A few product lines, which still represent a relatively small part of the segment, continue to grow rapidly. Industrial revenue grew 23% year-on-year to 29 crores, driven by customers in automotive, appliances, and consumer electronics. During the quarter, we received business confirmation for seven new power tool products and new knobs from an appliance customer. Semiconductor tray revenue remains on track to commence in Q427 from our existing facility. Consumer electronics and semiconductor packaging represent another important engine for Shiley. Commercial supplies have commenced for consumer electronics and we are progressively scaling production of the five components awarded by our new customer. We would start trial production of semiconductor packaging in Q3 FY27 and expect to start commercial So shipments in Q4. In parallel, we're pursuing a significant scale-up opportunity in both these segments, which we expect to unfold over the next 36 months. This business calls for many of the same capabilities that underpin our medical device business. Tight tolerances, high cosmetic standards, rigorous process control, and consistent quality across millions of components. These capabilities are a result of sustained engineering investment, process discipline, and a strong focus on customer requirements. We see considerable potential to leverage these strengths in a new market. Our approach will remain measured and disciplined, with the capacity expansion aligned to customer commitments and the pace of business development. I will update you as we achieve key milestones. As we enter the second half of FY27, our priorities are clear. We will focus on five areas, ramping up our newly commissioned capacity, exceeding our full-year device guidance, advancing our platforms and emergency use in oncology, progressing the consumer electronics and semiconductor packaging scale-up opportunity, and importantly, maintaining margin discipline as we grow. We remain confident in the underlying strengths of our business. Our engineering capabilities, our growing portfolio of proprietary platforms, our customer partnerships, and our ability to execute with precision and consistency at scale. Our ambition is to build Shelly into a global innovation-led engineering and manufacturing partner, creating lasting value for our customers, patients, and shareholders. With that, I will now hand over to Sanjay, who will take you through the operating and financial highlights in more detail. Thank you very much. Over to you, Sanjay. Thank you, Amit.

Sanjay Shah, Other

Good afternoon, everyone. Let me take you through the operating and financial highlights for the quarter. The changing mix of our business is now reflected in our improving capacity utilization and operational productivity. Machine utilization across our plants was to 52.5% in the quarter two, compared to 47.8% a year ago. This reflects the growing contribution of our higher-value healthcare business and our ability to drive. Great productivity from our existing manufacturing base. Exports accounted for 62.9% of revenue in H1 FY27 compared to 71.7% in H1 FY26. The shift is primarily attributed to growth in the healthcare business where we supply Indian pharma customers who in turn serve global markets. While the reported export mix has changed, our participation in global markets continues to expand through these customer relationships. Our financial position continues to strengthen, with returns improving further in the first half. In October, Care Ratings reaffirmed our long-term bank facilities at Care A+, with a stable outlook, and upgraded our short-term facilities to Care A1+, from Care A1. The upgrade reflects our healthy operating margins, improving leverage and debt coverage, and new business secured from both existing and marquee customers. It is a strong endorsement of our financial discipline. Execution capabilities and growing customer confidence. Consolidated financial highlights for Q2 FI 27. Revenue was Rs. 320 crores compared with Rs. 257 crores in Q2 FI 26, up 24% year-on-year. EBITDA rose to 102 crores from 82 crores in FI 26, up 25%. EBITDA margins were at 31.9% compared 31.8% in Q2 FI 26. Profit after tax was 61 crores, compared with 51 crores in Q2 FI 26, up 20%. Fact margin was 19.2%, compared with 20% in Q2 FI 26. Segment revenue for Q2 FI 27. Healthcare revenue goes to 175 crores from 99 crores, up 78% year-on-year. Consumer revenue was 116 crores, down 14% year-on-year. Industrial revenue rose to 29 crores from 23 crores, up 23%. On the consolidated financial highlights for H1FI 27, revenue was 600 crores as compared to 503 crores in H1FI 26, up 19% year-on-year. Ebitda rose to 185 crores from Rs. 152 crores. Up 22%, EBITDA margin improved by 60 bps to 30.8%. Profit after tax was 109 crores, compared with 92 crores in H-18526, up 18%. Fat margin was 18.2%, compared with 18.4% in H-18527. Dash pad was 138 crews, up 19% from 116 crews. ROC and ROE were at 41.1% and 29.7% respectively as of 30th September 2026. Bet2 equity was 0.2x and the fixed effect turnover was 2x as of 30th September 2026. Segment revenue for H1FI27, healthcare revenue rose to 318 crores from 176 crores, up 81% year-on-year. Consumer revenue was 231 crores, compared with 286 crores in H1FI 26, down 19%. Industrial revenue rose to 51 crores from 41 crores, up 24%. That concludes my update. We will now open the floor for questions.

Operator

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the 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 will wait for a moment while the question queue assembles. The first question is from the line of Ritesh Shah from Invested. Please go ahead.

Ritesh Shah, Analyst — Invested

Hi, sir. Thanks for the opportunity and congratulations for a good set of numbers. Sir, I have multiple questions. First is, you indicated on Tobii. I just wanted to understand how it will widen our TAM, what gives us comfort that it won't decimate our existing product basket. If you could add some comments with respect to pricing and profitability over here, that would be great. And lastly, indications besides GLP-1 that it can actually treat. That's the first question. Second, you did touch upon emergency auto-injectors, but is it possible to give some timelines with respect to monetization or launch for on-body auto-injector, which is Mira, emergency auto-injector? And I think on the last call, you had indicated about iApplicator as well. So that's the second question, three parts. And the third question is more of a clarification. I think there is a new flow with respect to one of the Ministry of Health advising a recall with respect to product impurities, incorrect doses play. And packing errors. I think these are the three variables which have been indicated. But if one goes into further detail over here, it does indicate incorrect dose display as well as incorrect dose delivery. So just wanted to have clarification that this is something which doesn't impact Shady. And if it does, then what is the impact it would have? Thank you. These are the three questions.

Amit Sangvi, Other

Thank you. All right. I've got to remember all the questions, Ridesh. So on the pipeline, look, I think we're close to finalizing a customer for the on-body Mira, post which we will have a 14-month timeline to deliver clinical batches, which means the product will be fully designed, verified, and we will deliver clinical batches, but we've not finalized the customer yet. Now, moving on to Toby emergency use. We have two active customers on emergency use for whom we are developing this product. From a timeline perspective, the clinical batches are due end of 27, which means that earliest commercialization to production will be probably end of 28. Calendar. 28. Now on to Tobii reusable, whether it cannibalizes our existing market or not. To be honest, you know, I don't think so. There is a place for pens, and there is a place for auto-injectors. Now, the reason auto-injectors are widely used is because how easy they are to use, especially when you have fixed-dose therapies. You know, you don't want to go through the process of dialing, putting on a needle, etc., etc. So the idea behind Tobii Reusable is to find a way to give the same user use experience with the sustainability, with a very significant sustainability angle. So at the moment, if you think, you know, think about it just between. Two large players, one is Monjaro or ZepBound and Vigobi. You know, you'd be looking at a global auto-injector consumption of over a billion injectors that end up in the landfill every year. And to us, increasingly, every large – Tobii Reusable is targeted very much for innovator farmers. It's not – Because there isn't an innovator that has a reusable auto-injector, it's unlikely that a generic will take it forward. So, A, it doesn't cannibalize any of our existing product portfolio. B, increasingly, most have commitments to cut waste, become more sustainable, you know, various EU regulations and global regulations that account for it. So, we have a very nice solution where I think you maintain... Either same or higher, possibly, profitability, but providing a very, very unique solution to the customer, which also then gets a differentiated product on the market, right? Because everybody has a two-step auto-injector now. Getting to – does that answer your question on the first part?

Ritesh Shah, Analyst — Invested

Is there any timeline with respect to the tie-up, with respect to Tobii, or where are we in the process? I think that was one. I think I was also hoping for something on iApplicator.

Amit Sangvi, Other

iApplicator is now just completed qualifications. We should be in supply by the end of this quarter or early next quarter. Toby Reusable was just launched at CPHI. It's a product where we have completed potentially 80% of development. There are still some bits which are yet to be completed, which we're working on at the moment. But the early launch was with the purpose that if there is interest in the product, which we... Which, through the three exhibitions that happened in October, we know there is a lot of interest in the product. We can find a partner who then gets to put their stamp on the product in terms of feature, functionality, size, shape, etc. So, we're looking for a partner. As in when we acquire one, we will give you that update. Now, coming to the product recalls announced by some of our potential customers in various markets. The, you know, I can't comment on the API impurity because I'm, you know, I have no expertise in that domain. As far as the label and dose marking is concerned, it's the same problem. So essentially, there is a variant of the pen which had an incorrect label on it. Therefore, the label indicates one dose, whereas the pen actually is for another dose. This has... No bearing or no, you know, there's nothing attributed to Shaili for this particular recall. It's the end of whoever, you know, are essentially either final assembly or packaging or the distributors that are attributing to this particular issue.

Ritesh Shah, Analyst — Invested

So, just to clarify, when the document says incorrect dose delivery, basically, there's nothing to do with the device, it is more with respect to the labelling, would that be a fair understanding?

Amit Sangvi, Other

Yeah, because your label will state the dose the pen is supposed to deliver, but the pen actually is, you know, it's a different SKU, it's not that SKU, so there's incorrect labelling on the pen. Does that clarify?

Ritesh Shah, Analyst — Invested

Just a follow-up. And this won't have any impact on our volumes, say, Q3, Q4, or going forward, if at all.

Amit Sangvi, Other

No, our demand is strong, even stronger, to be honest. And, you know, that's where we are focused right now on the – we've just installed the NEO line, which we are now getting into qualifications next week.

Ritesh Shah, Analyst — Invested

Sure. I'll join back the queue. Thank you so much for the answers.

Operator

Thank you. The next question is from the line of Harsh Shah from JM Financial PMS. Please go ahead.

Harsh Shah, Analyst — JM Financial

Thanks for the opportunity. A couple questions from my side. So Amit, sir, if you could give some color as to what sort of feedback we would have kind of received from a number of trade fairs that, you know, kind of participated recently. So basically, what I'm trying to understand is, is it something that the potential customers are kind of asking from us, which probably, you know, we wouldn't right now have, say, maybe related to certain specific therapy or anything else, something on that from the potential customers?

Amit Sangvi, Other

There's, you know, there's, I think I've mentioned in one of my previous calls, there's about 60-odd GLP-1s under development for various indications. Eventually, all of them end up in either, or 80% of them are injectables, which means they'll end up in either a pen or an auto-injector. A two-step auto-injector is a two-step auto-injector, whether you buy it from us, one of our competitors, or anyone else. There, you know, there isn't a differentiation. And after a single use, they end up in the landfill. So, you know, as I was telling Ritesh that the reason people like it is because it's very easy to use. You have only two steps to basically pull the cap off and inject, and you're done with it. So we wanted to maintain that same usability but offer a differentiated solution and something that doesn't – you know, there's a very significant cost associated with cold chain with With the amount of material that is being disposed off. So if you look at a size of one pack of autoinjector, we could put four pods in the same size. So essentially, if it's once a week therapy, then once weekly therapy, then you have your cold chain costs are down to 20, 25%.

Speaker 9

Okay.

Sanjay Shah, Other

The logistics cost of distributing it. Yeah. Yeah. Yeah.

Harsh Shah, Analyst — JM Financial

I see. And how was the overall feedback in the trade phase?

Amit Sangvi, Other

Very high. I mean, feedback has been very good. We, in fact, had subsequent meetings with potential customers to showcase the product on a one-to-one basis. Okay, got it.

Harsh Shah, Analyst — JM Financial

Secondly, if I circle back to your previous concourse, even the data standard report, and even in the AGM, there seems to be, you know, a lot of confidence that you'll have regarding, you know, an innovator that you would probably crack in. So what I'm trying to understand is that at what stage of discussion are we with the innovator, is it something safe to assume, say, that by end of calendar year 27, at least we could have one or two innovators onboarded?

Amit Sangvi, Other

Look, that's where all the efforts are. Conversations are also good. We're participating in RFQs. We're doing as much outreach as we can. I'm fairly confident that, yes, by the end of calendar 27, we should be able to crack one or two innovators. Having said that, when you crack an innovator, the revenue isn't going to start flowing from 28. It's going to be a three to four-year journey before you see revenue flowing.

Harsh Shah, Analyst — JM Financial

Yeah, yeah, yeah.

Amit Sangvi, Other

Got it.

Harsh Shah, Analyst — JM Financial

Thirdly, similar to, so I was going through your last three annual reports. There is a proper mention of, you know, aerospace and defense as a tangible opportunity for us. I am aware that you are, you know, kind of, your hands are full, you have lots to do, but just as a clarification, are we kind of either looking into these segments or are we supplying indirectly? Some of the high-precision components.

Amit Sangvi, Other

I think, look, we've been supplying indirectly some of the classification components for quite a long time. But have we made any headway in aerospace and defense? The answer is no, we haven't.

Harsh Shah, Analyst — JM Financial

Got it. Okay. And just last question from my side before I get back in the queue. On the consumer electronic part in the segment, just wanted to check, are we engaging in discussions with other potential customers as well? Or the focus is currently to kind of ramp up with this, the customer gave us five components. Yeah.

Sanjay Shah, Other

So, Harsh, if you look at the last two con-calls, what we have said is we were working with one customer, we are adding five components with another customer, and we will look at other customers also as we go and ramp up that business.

Amit Sangvi, Other

We already have two customers. And we are in distractions. We cannot make any disclosures in terms of customer names and whatnot, but yeah, we are working with multiple potential customers for scaling up the business.

Harsh Shah, Analyst — JM Financial

But just to follow up on this, is there a possibility that our capex for the consumer electronics as a start could be in excess of 100 crores? You did mention that minimum would be 100 crores, but is there a possibility of doing even more as a start?

Sanjay Shah, Other

First, it's a little too early to talk about this.

Amit Sangvi, Other

Yeah, I think it's a little early, and second, looking at, you know, all the discussions we've had, I think 100 core still makes good sense. Yeah, whether 100 goes to 120 or 80, I don't know, but, you know, it's going to be about that.

Harsh Shah, Analyst — JM Financial

Sure. That is it from my side. Thank you.

Operator

The next question is from the line of Vinil Shah from Dalal and Brocha. Please go ahead.

Vinil Shah, Analyst — Dalal and Brochaw

Yeah, thank you for doing my question, and congratulations on a good setup in this. So my first question is in regard to the healthcare group. So last quarter, you had indicated that the FF27 volumes would exceed 36 million pens, and now that we are seeing good growth, and with our internal bottleneck also easing out, do we wish to revise our guidance, and is there a further higher speed, higher rate of route we are expecting?

Amit Sangvi, Other

I think we will exceed the guidance. Now, how much we exceeded by, I have no clue. And short answer, we are not in a position where the pressure on ramp-up has eased off. It's easing off. It has not eased off, so it's a work in progress. Maybe end of this quarter, when we have our next call, we'd be in a better position to answer that question.

Vinil Shah, Analyst — Dalal and Brochaw

Okay, and so just one clarification, the capacity expansion which we are planning for Kavu Dhabi, it shall be ready by end of FY 2020. Isn't that listening, right?

Speaker 9

Correct.

Vinil Shah, Analyst — Dalal and Brochaw

You're right. My other question was related to our other exercises for this quarter. So if we see it has been a rise of 45% QoP. So is this because of our changing revenues or is there some burn-off or an optics which we are putting ahead of the new capacity expansion? Can we just give some comment about this?

Sanjay Shah, Other

Could you probably repeat your question because we lost your voice in between.

Vinil Shah, Analyst — Dalal and Brochaw

Okay. I was saying that our other expenses for the quarter have risen 45% QOQ. So I just want you to understand that is this because of change in the revenue mix or is there some one-off cost or a specific OPEX which we are putting in ahead of the new capacity. So just want you to understand what will be the cost base, the recurring cost base for us to report it.

Sanjay Shah, Other

So, other expenses basically includes a host of expenses as there will be some one-off costs which would have been incurred. But then, yes, if you want to compare it against the last quarter, there is a change in the business mix for which there will be some higher expenses which will be done here. So, it's a combination of one-off expenses and some increases in expenses.

Vinil Shah, Analyst — Dalal and Brochaw

Would you like to quantify the one-off expenses?

Sanjay Shah, Other

I don't think I'll be able to quantify that currently.

Vinil Shah, Analyst — Dalal and Brochaw

Thank you. Thank you.

Operator

The next question is from the line of Akhil Parikh from 361 Capital. Please go ahead.

Akhil Parikh, Analyst — 361 Capital

Thanks for the opportunity. My first question is on the capacity. You come by end of FI 28. While we do 25 million pence capacity, when should we start expecting the commercial sales permit?

Speaker 9

Commercial sales for which capacity?

Akhil Parikh, Analyst — 361 Capital

The 25 million pounds capacity which we added.

Amit Sangvi, Other

So it starts qualification next week. If all goes well, we should be in a position to start selling from that capacity in December.

Akhil Parikh, Analyst — 361 Capital

Okay, sure. Secondly, now is it fair to assume we have come bottomed out in terms of the quarterly revenue perspective and from here on, bare minimum, we should see what we delivered over last two quarters and maybe grow over that number basically in subsequent quarters. Is that a fair relationship?

Sanjay Shah, Other

I think, Akhil, I've already mentioned that we see that business is steadying at a level. So, I think this year we think it will probably steady at this level, and then depending on how geopolitics and the global situation plays out, we should basically look at growth next year. We had also indicated, I think in the Q4 call, what is the Q1 call, on a net level, I think business will, on the consumer part of it, will remain flat for the current year. Got it. Got it.

Akhil Parikh, Analyst — 361 Capital

And two more questions from myself. One of the subsidiaries, right? If I look at console minus standalone, a subsidiary is incurring losses for last three quarters. How should one read that particular number?

Sanjay Shah, Other

So it's been, it's making a loss for the last two quarters. There has been some revenue which... We have not recognized in quarter two, because as we have said last time also, there were some consumer confirmations pending in which have not come in. But I think on an overall basis for the whole year, we would not have a loss. Okay, let's speak to you.

Akhil Parikh, Analyst — 361 Capital

And so lastly, on the semiconductor phase and personal electronics, anything?

Speaker 9

Okay, there's a lot of background noise.

Akhil Parikh, Analyst — 361 Capital

Is it better, Tom? Yes, this last one is semiconductor trays and consumer electronics segment. Any ballpark or direction sense you would like to give how this business will look like, say, here, down the line, and what numbers we can build in from these two systems?

Sanjay Shah, Other

I think Amit already mentioned in his speech in terms of what we're looking at. Giving numbers right now would be a little difficult, but on consumer electronics, what we're looking at is basically starting supplies of the five components which we have taken in quarter four, between quarter three and quarter four. And on semiconductor, start qualification I'm going to do a consultation with customers and then start commercial shipments from quarter four, FY27.

Akhil Parikh, Analyst — 361 Capital

Sure. If I can squeeze in one last question, with regards to innovators, Amit mentioned that it's a process of three to four years after the approval where we came. Contribution. So is it because the innovators want more suppliers and the backup? Is that the reason why we might take 3-4 years for them to kind of meaningfully contribute to the revenue? Or is there a capacity to build up happening at the innovator trend and hence we might see a healthy content?

Amit Sangvi, Other

A chance to participate, you know, is very unusual that you get a chance to participate on an existing molecule. So, what you do is you participate on a new molecule. When you participate on a new molecule, you are entering at about phase two, phase three of the customer. So, from there, the journey to their own approval is three years.

Sanjay Shah, Other

Sure. Okay. This is very good. Thank you so much.

Operator

Thank you. The next question is from the line of Aman Vig from Astitude Investment Management. Please go ahead.

Speaker 5

Good evening, Amit. My question is on the Brazil, Turkey, and Mexico market. Could you give a rough timeline in terms of launch of our products in this market, and what kind of market share we can get here? I believe Canada, we have maybe 50% plus.

Amit Sangvi, Other

But what about these markets? No, Canada, I think at the moment, we have 100%. I'm not aware of any... A generic player in Canada, which is not on our product. Okay, but not to sound arrogant or anything, I think we have approval in Brazil. We have it in Canada. We are supplying to multiple other smaller geographies. As far as Turkey and Mexico are particularly concerned, I don't have a timeline, but I would assume that, you know, first movers advantage will follow in those markets as well.

Speaker 9

Okay. Second question is, so you

Speaker 5

are increasing your guidance to 36 million 10 for this year. What is the reasonable estimate as of now for, say, next year, FY28? Should we assume 50 million kind of number or should we assume higher or lower?

Amit Sangvi, Other

It's difficult to answer. For this year, particularly, our second line is starting qualification. Fingers crossed everything goes well. But in terms of what we could potentially do in the current financial year, I don't think we're in a position to answer that in the next call. I hope we can answer it then, but at the moment, we're not in a position. We'll exceed $36 million. I think there's a fair bit of confidence. As far as next year is concerned, the number you stated, give or take, 15% is what we're targeting. Could be higher, could be lower. We don't know again. It's not a guidance. Markets are still launching. So at the moment, you only have three markets where the product is launched.

Speaker 9

We still don't have enough data to comment what next year is going to look like. Thank you for answering the question.

Operator

Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two per participant. Should you have follow-up questions, please rejoin the queue. The next question is from the line of Vishal Manchandan from Systematics. Please go ahead.

Speaker 5

Hi. Hi, good evening, and thanks for the opportunity. On your pen guidance for the year, what percentage of that would be GLP-1 pens? Or is that entirely GLP-1 pens?

Amit Sangvi, Other

No, it's not entirely GLP-1. I think the split this year at the end of the year was likely to look at potentially 70-30.

Speaker 5

Okay, and is there growth in insulin pens as well, or largely the growth is going to come from the GLP-1s?

Amit Sangvi, Other

No, next year we should be back on track with insulin. I mean, look, it's a priority issue right now. So we've prioritized GLP-1 over insulin, but we are, with the added capacity, we should be in a position to take additional quantities for insulin next year.

Speaker 5

Okay. And would you have a sense as to what percentage of your GLP-1 supplies is meeting the domestic demand and the exports? How would that be split?

Sanjay Shah, Other

So Vishal, when we supply a pen to a customer, it's the same pen which is for all the different markets. So we probably not have a split in terms of what is the customer selling in India, what is he exporting it out.

Speaker 5

Okay, and just one final one on semiconductor packaging. I'm sorry to interrupt you, sir.

Operator

If you have follow-up questions, please rejoin the queue. The next question is from the line of Bhavika from Niveshe. Please go ahead.

Bhavika, Analyst — Niveshe

Yeah, thank you for the opportunity. So the first question I have on the pricing, like if I take the healthcare revenue per device has gone up this quarter, like around 158, then the last quarter, sorry, the 168 from the last quarter, which was around 158. So I wanted to understand that is it led by the GLP PEN prices because I think in the previous call you have mentioned that we have already facing like 10-15% pricing pressure in the PEN. So I just wanted to understand overall like how we see the price decline happening over the next two years and how much we can absorb by holding the margins of what we are currently doing.

Sanjay Shah, Other

And let's probably answer the second part of the question on the fourth part of your question in terms of average price. When you look at average price, it's a combination of all the supplies which we are doing. It's not one standard price across different devices which we do. At the same time, we used to do incident on a contract manufacturing for a customer last year, which we are not doing in the current year. And that capacity has been replaced by GAP, but the realizations would be higher. So that's the reason for the change in the price when you look at an average price. Amit, do you want to answer the second part of the question?

Amit Sangvi, Other

There is pricing pressure, and for all the long-term contracts that we currently have in place, a price erosion has already been built into that contract. Now, I'm very confident we'll be able to maintain our margins. I'd say, you know, we will maintain our margins primarily because there's no operating levers that has kicked in yet. So we're still operating, if you look at capacity utilization, you're at 52%, I believe. So, you know, you have a fairly significant operating levers that's yet to kick in. Thank you. Thank you. You know, we do have an index mechanism with our PEN pricing where at least the inflationary measures will be passed on. So even with erosion at a baseline, you will have, you know, not a situation where you're going to end up losing out on your margins.

Bhavika, Analyst — Niveshe

Got it. And just for the second, I want to understand because now we are also building on body detectors, which I think you have mentioned in the last call that we will be able to do around like 15 to 35% like in one devices compared to like it's a high realization span compared to the GLP-1, but in volume terms, it's less like 1 to 2 million. So, just wanted to understand that what is the market size, like, do we see the market size of this on-body injectors? Because if I look at the on-color as an industry, it's going quite well. So, do we see the penetration, like, of this fans happening, and who are the competitors for us in this particular segment of fans?

Amit Sangvi, Other

So I think right now you have, if I'm not mistaken, I think you have about three molecules on on-body injectors, three or four molecules on on-body injectors. The one that is going to be targeted by generics is Nulasta. And then you have some recent launches for monoclonal antibodies by Sanofi in this N-fuse on-body system. So we see increasingly therapies going towards on-body, but, you know, don't have a clear answer in terms of what that's going to look like in total volume.

Bhavika, Analyst — Niveshe

Okay. And what margins we are expecting for that category of time?

Amit Sangvi, Other

The margins is a direct, it's directly correlated to the volume and the complexity. So on-body, you know, obviously tends to be highly complex, which means that you have a high capex and a higher developmental cost. But yeah, once you get into supply, it should, the margins are higher, far higher than that of GLP-1s, but it also... You know, it's also because that there is an extra, there is a high capex cost up front.

Operator

Got it. And so looking at the current... I'm sorry to interrupt you, ma'am. If you have follow-up questions, please rejoin the queue. The next question is from the line of Rupesh Tatiya from Long Equity Partners. Please go ahead.

Rupesh Tatiya, Analyst — Long Equity Partners

Yeah, thank you. Thank you for the opportunity. Congratulations, Amit, for a very good set of numbers. My first question is, I mean, our auto-injectors, how do they work on, let's say, biologic or biosimilars? Are there any programs where we're involved with such a product? And the corollary to that is, are there, you know, any products in the pipeline which can, you know, eventually give us, let's say, 40-50 million volume, 10 volume eventually in, let's say, two key years? Because I know the field is really small. There might be handful molecules which can go to 40-50 million, but are you working on any of them? So these are the two questions. Yeah.

Amit Sangvi, Other

I believe every molecule we're working on in pens and autoinjectors have far higher potential than 40-50 million. You see, I mean, just look at between semaglutide and terzepatide, you know, you have a billion and a half devices potentially being made every year. So significant, most of that volume comes from autoinjectors, not from pens. Because U.S. is 100% in auto-injectors as far as Wegovy and ZepBound and Monjaro are concerned. I don't think U.S. has a pen for these products yet. So, I mean, even today we're supplying auto-injectors in the Middle East at a volume of, I believe, 6 to 7 million a year.

Rupesh Tatiya, Analyst — Long Equity Partners

Sorry, I am not, maybe it came out a bit wrong. I am not questioning the potential of, you know, semagrutide. I am asking for the new, I mean, is there another molecule which can become as big as semagrutide? That is essentially the question, be it biologics, biosimilar, or any non-JLP therapy.

Amit Sangvi, Other

Look at the generic. I mean, look, novel molecules is, you know, every novel molecule that is especially in the GLP-1 category has the potential to become 50 to 100 million at a, you know, reasonable number. Now, if we look at generics, you must have read recently, there's quite a few generic players now targeting Keytruda. So, you know, that will be another area where we participate with an auto-injector.

Sanjay Shah, Other

That's good to know.

Rupesh Tatiya, Analyst — Long Equity Partners

And second question is, on the UK sub-C3, if I do consolidated minus standalone, the EBITDA loss is roughly 7 crore for H1. So you are saying that we will be EBITDA positive as well as STAT positive for the full year. Is that a fair understanding?

Sanjay Shah, Other

Yes. Okay. Thank you. I'll come back.

Operator

Thank you. The next question is from the line of Raghav Mittal from Dhamma Capital. Please go ahead.

Speaker 5

Hi, thank you. Thank you for the question. So I want to ask you, Amit, about your semiconductor clays. So I want to understand there is the JEDEC clays and then the ball grid arrays and then there's tape and also IT tubes. So I just want to understand what is the strategy? What kind of products are we going to target? And given the Malaysian and Chinese competitors here, how do we position ourselves to our customers that this is compelled to buy from us versus others? The product pricing and any sort of volume that we are targeting would be helpful.

Sanjay Shah, Other

So, Raghav, what we're looking at is basically doing JEDEK trays, tapes, carrier tapes, and wafo boxes. There seems to be some background noise. So that's what we would be looking at targeting. As we had mentioned in our earlier calls also, we have tied up with a Korean partner who... I don't want to be large players in this segment of the market, and work with around 150 plus customers globally, so that's, so from a customer acceptance, product acceptance and everything, which will be much more faster, because we're replicating the manufacturing process, which they have in their plans in Korea and Taiwan and India. So that's what we would be looking at. Second is, I think from a pricing perspective, we will be competitive against the other players because it's similar products which are there. Volume, currently, it will be difficult to mention because it will depend on how the ramp up in India happens, but we'll decide the volume.

Speaker 5

But for our products, what do you think is the packaging material that will be preferred by the Indian customers? Are we going to supply to Indian customers or also export? Because from what we understand, somebody might be using ball grid array, somebody might be using something else. So just want to understand on what percentage of their product portfolio are we going to play in?

Sanjay Shah, Other

So with Indian customers also, Thai players are coming in India currently. And they will be using a combination of as well as

Speaker 5

carrier tapes and everything.

Sanjay Shah, Other

And we discussed with them their product portfolio is also evolving. So getting to an exact market size is a little It's a little difficult right now, but the take is, we're setting up a... Set up a small capacity to start it, and if we start applying, we understand the demand, we will add more capacity.

Speaker 5

Got it. And the Korean partner, are we going to do like a contract manufacturing, or is it a royalty? Like, how does a tech partnership work? And also, just lastly, on this segment, do you expect the margins to be similar to your IKEA business, or meaningfully higher or lower? Thank you.

Sanjay Shah, Other

So we will currently be doing contract manufacturing and also exporting to them in Taiwan. From a margin perspective, our take is that it will be better than the average margin on the consumer or the industrial business. So that's the expectation.

Speaker 5

Got it. Thank you so much. All the very best.

Sanjay Shah, Other

Thanks, Raghu.

Speaker 5

Thank you.

Operator

Thank you. The next question is from the line of Ananya Nichani from Thinkwise Wealth Managers, LLP.

Ananya Nichani, Analyst — Thinkwise Wealth Managers LLP

Please go ahead. Thank you for the opportunity. I have a couple of questions on the consumer business. First is, how has the demand weakness been, in the sense, has it been market-wide, or only from the top contributing clients? Second is, how are the price pass-throughs being taken? Like, what percentage of price hikes in polymer prices are you able to pass on, and with how much of lags? Yeah.

Sanjay Shah, Other

So, on the price... Inflation basically gets passed on with a lag. As we have said earlier on our calls, with different customers, you would have different time lags. With some customers, you would have a lag of two months. With some customers, you would have a lag of three to four months. So that's how it happens. Consumer demand in Europe and the U.S. is weak. Amit also mentioned about this in his opening remarks. How and when it will improve will depend on how the global situation evolves and how inflation is tackled in these markets. So probably for me to guess on that will be very difficult. But what I can add is that if you were to look at the last four quarters or last six quarters, we have been consistently adding newer products with the home in this segment. So that's what we're looking at is basically building up a portfolio and adding more products. So as volumes pick up, you basically have to do a ramp up across different products.

Speaker 9

Okay, so that's it. Thank you.

Operator

As there are no further questions from the participants, I now hand the conference over to the management for closing comments.

Speaker 9

Thank you very much.

Amit Sangvi, Other

So, in closing remarks, healthcare now contributes 55% of Shelly's revenue and grew 78% year-on-year this quarter, underscoring the strength of this business as our primary growth engine. Innovation remains at the core of our strategy. We are extending our proprietary platforms into new therapeutic areas, including emergency use and oncology, while actively pursuing a significant scale-up opportunity in consumer electronics and semiconductors over the next 36 months. While consumer demand remains subdued in the near term, our strategic priorities remain clear. We will continue to combine engineering ingenuity, precision, and responsible execution to solve complex customer challenges at scale. This is the foundation on which we intend to build Shaili's next phase of growth and create sustainable long-term value for our customers and shareholders. Thank you for joining today's call and for your continued interest and support. Should you have any further questions, please reach out to SGA, our Investor Relations Advisors. Thank you once again, and have a great evening. Thank you, everyone. Good day.

Operator

On behalf of Shaley Engineering Plastic Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.