CAPLIN POINT LABORATORIES LTD (NSE: CAPLIPOINT) Q3 2026 Earnings Call dated Feb. 05, 2026
Corporate Participants:
C.C. Paarthipan — Chairman
D Muralidharan — Chief Financial Officer
Sridhar Ganesan — Managing Director
Analysts:
Unidentified Participant
Candice Pereira — Analyst
Garvill Goyal — Analyst
Ahmed Madha — Analyst
Shrinjana Mittal — Analyst
Richa Agarwal — Analyst
Sachin Kasera — Analyst
Presentation:
operator
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Ladies and gentlemen, you are connected for Kaplan Point Laboratories Limited conference call. Please stay connected, the conference will begin shortly. Thank you.
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operator
Ladies and gentlemen, good day and welcome to Kaplan Point Laboratories Limited Q3FY26 earnings conference call hosted by Daulat Capital Markets Private Limited. As a reminder, all participants line will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Candice Ferreira from Dalit Capital Markets Private Limited. Thank you. And over to you.
Candice Pereira — Analyst
Thank you Ikra. Good evening everyone. I, Candice Pereira, on behalf of Daulat Capital welcome you all to the Q3FY26 conference call for Kaplan Point Laboratories today. From the management team we have with us Mr. C.C. partipant, Chairman, Mr. Vivek Partiban, Vice Chairman, Dr. Sridhar Ganeshan a Managing Director, Mr. D. Murali Dharan, CFO and Mr. Satya Narayan M Deputy CFO. I now hand over the call to the management for the opening remarks. Over to you sir.
Sridhar Ganesan — Managing Director
Thank you Candice. Thanks everyone for taking time out to attend our earnings call for Q3 FY26. Actually FY27 so. Well. Please note that a copy of all our disclosures are available on the investors section of our website as well as on the stock exchanges. And note that anything said on this call which reflects our outlook for the future which should be construed as a forward looking statement, must be reviewed in conjunction with the risks that the company faces. The conference call is being recorded and the transcript along with the audio will be made available on the company’s website as well as the exchanges.
Also do note that the audio and conference call is copyright material of Kaplan Point and cannot be copied, rebroadcasted or attributed in press media or social media without specific written consent of the company. I would like to hand over the floor to our chairman for his opening remarks.
Sridhar Ganesan — Managing Director
Please.
C.C. Paarthipan — Chairman
Thank you. Good evening and welcome to our Inuit Press conference. I think that most of you must have gone through our press release. My colleagues will also highlight the salient features of our company. Hence, I would like to convey two major steps that we have taken recently.
C.C. Paarthipan — Chairman
This I sincerely feel will be a.
C.C. Paarthipan — Chairman
Game changer or black box for our company in future. Number one is our video sop. It is also a visual SOP acts as a visual hammer to replace the Web. Our video SOP will convert invisible execution into inspectable evidence for compliance. And also this will enhance productivity in pharma manufacturing. Non compliance is not training. Failure is an execution visibility failure. Pharma Factories run on SOPs, which is a traditional textbook one. Compliance is demonstrated in seconds, which leads to issues. Hence Kaplan converts current SOPs into visual scripts that shows best practice actions in step by step details.
We also include regional languages for our factory workers. We further have plans to use videos to celebrate the best performing operators as role models. The remote control Online monitoring.
operator
Sir, sorry to interrupt you, but your voice is sounding a bit muffled.
C.C. Paarthipan — Chairman
Well.
Sridhar Ganesan — Managing Director
The line is breaking a little.
C.C. Paarthipan — Chairman
Can I go ahead and repeat or.
Sridhar Ganesan — Managing Director
Yeah, now. Now it’s better. Now it’s better.
C.C. Paarthipan — Chairman
Hello?
Sridhar Ganesan — Managing Director
Yes, hello. Now it’s better. Please.
C.C. Paarthipan — Chairman
Ye. Okay, can.
Sridhar Ganesan — Managing Director
Yeah, continue please.
C.C. Paarthipan — Chairman
Hello? Having to repeat the whole thing where exactly? You know, they were not in a position.
Sridhar Ganesan — Managing Director
No, no, Only in the last 20 seconds. Only in the last 20, 25 seconds.
C.C. Paarthipan — Chairman
Yes.
operator
But your voice is a bit muffled. Shall I add you again?
Sridhar Ganesan — Managing Director
Yeah. Is it possible to add a landline from there? Candice, is that possible?
C.C. Paarthipan — Chairman
Please. No, I’ll call, I’ll call these guys and I will.
Sridhar Ganesan — Managing Director
In the meantime I will complete my discussion and then come back for his remarks.
operator
Yes.
Sridhar Ganesan — Managing Director
Okay, thank you, Chairman. So while we wait for the line to get cleared up, I’ll provide a little color on the latest developments, especially when it comes to the regulated markets, specifically Kaplan Steriles and also Kaplan Sterils usa. We’ve had another good quarter of growth in the US entity, US focused entity rather, and with growth in both product revenue and also profit share and milestone revenues. And it is a good mix of 75, 25 at the moment with product revenue bringing in 75% and milestone and profit share bringing in about 25%. This trend has been very consistent in recent quarters and there were a few questions that were raised by investors themselves when we decided to take the front end route and then launch our own label over there.
But this goes to show that this was a decision and hindsight was a good one. We have also been receiving consistently good number of approvals from the US and the latest one was a complex suspension injectable product named Metal Peninsula that we got an approval within first cycle. Quite glad to share that. You know, our approval timelines are between 14 to 15 months on average, compared to industry timelines of above 20 months. We’ve also had first cycle approvals for emulsion injections and emulsion ophthalmic products as well. And this is not only. This not only goes to show the pros that we have in R and D and regulatory domain, but both these products that we have had recent approvals for have been launched in the market and has been consistently garnering higher market share quarter on quarter.
So even from a productivity and execution standpoint, we’ve been delivering. We also have another 10 products pending review with FDA and we expect these products to come through within the next few months. So we will be close to. We’ll be having close to around 65 ands approved under Kaplan’s name within a short period. So with all the new approvals coming through, obviously it looks like it’s going to be hectic next few months, but in a good way. We have also acquired around 14 ands from outside over the last few months and we are actively working on bringing these to market sometime in the next year.
So not only 2026, but 2027 also looks like it’s going to be an exciting year for Captain Steroids because of all the activity that is happening with new products getting approved and launched and also some of the acquired products being activated. We understood that our wire lines which are line 1, 2 and 5 are going to be busy over the next few quarters. So strategically from development pipeline, what we have done is we’ve started focusing more on line three and line six when it comes to scale up and submission batch products. Line three is our ophthalmic line and line six is the latest one that we have activated which is a pre filled syringe and cartridge product line.
In the next 12 months we expect to complete at least 12 to 13 products in this range in the ophthalmic and also pre filled syringe range. That should come up for approval sometime by end of next year, which gives us good hope that 2028 also is going to be quite full of activity when it comes to product launches and revenue. In addition to this, to ensure that we are investing consistently into unique capabilities in the sterile space, we are getting into the blow fill seal range of products. So we’ve just placed an order with one of the best manufacturers in the world from Europe named Romalad for this machine.
It’s a state of the art, completely integrated machine that is capable of manufacturing products at very high levels of compliance and speed. In the blowfill seal range, we have taken on around 14 products for development in this space and we expect the first products from this line to get approved sometime in late 2728 as well. So the last range that we are Getting into is again in the sterile space, which is ophthalmic ointment, which is also sterile in nature. So once this is done, we will be catering to pretty much the complete gamut of all sterile products from Kaplan.
And to cater to this significant pipeline of products that are being developed, we are fast tracking our completion of phase three, which is internally what we call as Kaplan OneLabs unit two, which will be housing eventually eight product lines of which we are going to start by early next year with at least five lines active. Out of the five lines, two are already completed, three more will be completed by September to October of this year. Taking into account all of this growth and development, we knew that compliance is something that we need to consistently innovate on as well.
So of course Chairman will cover that in his remarks. But in the midst of this all, we’ve completed our EU GMP audit and also a Saudi FTA audit with no critical observations. And we’re happy to inform that, you know, our consistent compliance record stretches out even further and it’s going to get better. One word on the US label. As I said in the beginning, we are very pleasantly surprised with the progress that we are making with our US label. We are nearly at $10 million in revenue since inception last year and we have been able to do this without, you know, slashing costs or we’ve just been disciplined with the strategy of keeping the products closest to the customer and the general shortages and supply chain efficiency that we are able to demonstrate is bringing these revenues in.
This is how we have built our Latin American business which is by keeping products closer to the customer. And the same thing is continuing on in the US as well. For Captain Saris and Captain Sarrez usa, we expect double digit, high double digit revenue growth in the next years onwards as well. A couple of more updates from our side is that our Vizag API plant, which is going to be by and large used for backward integration of filing our own DMFs for our AMDAs that are in the market, has already scaled up three critical APIs and we are targeting at least two to three more APIs to be scaled up on a monthly basis from this site and expect our first DMF filing from the site by end of this year.
Finally, our Oncology Injectable plant is also geared up for exhibit batches which will be starting this month. Out of all the acquisitions of ANDAs that we had done, four of them oncology injectable products as well. And we also have an organic pipeline of 12 more products that we are working on. All of that will be scaled up for submission within this year. We expect to have the first few products going for approval, going for filing within the end of this year. So that’s basically what covers the regulated market side of it. I will. We can check if Chairman’s line is better now.
C.C. Paarthipan — Chairman
Yeah.
Sridhar Ganesan — Managing Director
Yes please. Go ahead. Yes, yes please.
C.C. Paarthipan — Chairman
Good evening once again. Now let me focus on only on the two major steps that we have taken recently. Number one is our video sop, also known as the visual SOP acts as a visual hammer to replace the verbal cues. Our video SOP will convert invisible execution into inspectable evidence for compliance in pharma manufacturing. Non compliance is not a learning failure or a training failure. It’s an execution visibility failure. Pharma Factories run on SOPs, which is a traditional text based one. Compliance is demonstrated in seconds which leads to issues. Hence Kaplan converts current SOPs into visual scripts that shows best practice actions in step by step details.
We also included regional languages for our factory workers. We also have plans to use videos to celebrate the best performing operators as role models. Remote control, online monitoring, tracking of who has done what in the night shifts. It will not only be monitored by our own factories but also by our Latin American team. Where it is daytime, we make video viewing mandatory before operating the machine. The other advantages of visual SOPS are as follows. Number one, it will help networking with many companies of our sites for outsourcing a product that we don’t manufacture, especially from China.
Number two, the CMOs will get the advantage to view the entire manufacturing of this production of our facility online through the video SOP. And it helps them to understand our practices and timelines for the delivery. It will also help engineering department to replace the models of fat, sat, iq, oq, PQ which is nothing but factory acceptance, test site acceptance, test installation qualification, Operational qualification, Performance qualification. The video will help actually the new employees to do the requalification, preemptive maintenance and predictive maintenance. The guys who do this fat, sat, iq, OQ and pq, even if they leave the company, the new guys who enter a factory will use the videos and do the requalification and predictive maintenance.
We’ll also add a government’s architecture to our video SOPS in future and we have already filed patent for this in the next two years. We also have 14 to 15 injectable lines as you know well will be up and running and our culture will not be in the words of our website but in our facilities. Our people will also follow four non negotiables which are integrity, quality, safety and productivity. Now the number two we recently recruited two ES12 senior inspectors of Columbia and in VIMA as our executives, mainly for audit readiness in all our factories.
They are doing the mock audit in line with the US FDA guidelines as the guidelines of regulatory bodies are almost similar. Our Encore facility and CP1 are expecting the INVIMA audit in April and these professionals will play a vital role in ensuring integrity and quality there. They have inspected many biosimilar facilities in China, South Korea and Russia and their contact with these companies will also help us actually to find an opportunity for outsourcing. We are known as asset Light models. We are known for asset light models from China. Now we will go for an asset lighting asset light model for the specialties in places like Korea and also Turkey and Russia too.
Biogenetics will definitely help us actually to improve our bottom line over a period of time. Hence, the video SOP will act as a tool for networking with the companies mainly in China and Korea. We also understand that to achieve goals, we must change the current version of ourselves. And it’s not about doing more activities, it’s all about doing right activities. Hence the two right activities are the one that I highlighted now. Thank you. Thank you very much.
Sridhar Ganesan — Managing Director
Thank you, Chairman. Yes. Yes. Fully audible. Request our CFO to throw some light on the numbers before we open up the floor for questions.
D Muralidharan — Chief Financial Officer
Thank you. Thank you. Good evening everyone who’s taken time off to take part in this call of Kaplan Point laboratories for the third quarter ending December 31, 2025. Results for the nine months ended are really gratifying. The group has achieved good growth across all financial parameters and we are happy to say that we have compared ourselves to the peer group ones which have been announced till date and we are in good stead. And we are comparatively higher than many of them have reported in terms of profitability and growth. Now coming to the operating revenue, the revenue grew by 10.6% year on year and total income grew by 11.2% year on year nine months revenue is close to the interior revenue of 2023-24.
Growth in other income of 15.47 crores has primarily come from deployment of incremental cash. As I told in the last meeting. Also we have a mandate of investing at least 300 plus crores year on year. Additionally more and above what we have in the past we kept the mandate is even more stringent to invest about 400 plus crore into the instruments of financial instruments. It’s grown only by 9% in spite of the increase in turnover. If you see the last three years we COGS as a percentage of revenue has come down from 43 to 39% which is significant growth.
Opex grew only by 6% way below the revenue growth and OPEX as a percentage of total revenue excluded 24.46% as against 25.67% for the corresponding period and you will be glad to know the sum down 27% in 2023-24 to 26.24.4%. Both factors whatever I mentioned have resulted in a growth of 17% way above the EBMIC growth in EBITDA margin and which is at 38.5% as against 36.5% in the last year corresponding period capitalization of about 62 crores primarily in CSL has absorbed additional depreciation of high crop and PBD again grew by about 13.8% from 500 plus 500 crores to 589 crores stands at 33.2% and this is happy to say that it is higher than the entire year of 2024 which was 560bas then plant again is 471crore higher than the fat of 461crores achieved in full year of FY24.
All the above positive factors have resulted in dose of 20.5%. In fact PAC stands at 28.8% as against 26.3% in the last year. It may be pertinent to note that we have been promising around 25% as the target PAC. We are well modest and coming to the balance sheet. Network stands at 3338 crores as of December Cash and cash equivalent is 1381 crores as against,180 crores after investment of about 180 crores in CAPEX TWHP stands at 190 crores majorly accounted by 1Lab, the injection which is under final stages of completion and the OAS plant which we are sitting up near our facility in Pondicherry.
As we have been saying the close to customer is the winning point for Kapling and it stands at about 61% including the transit 55% are there in our warehouses and 12% is in sand reaching anytime now. Receivable stands at 121 days as against 118 days even though we’ve been promising 120 as a benchmark it slightly more because the last week of the last 10 days of December we couldn’t get the emittance because the specifications were abroad but that has been more than compensated by the more remittances in the month of January and we hope to get back to the world level by March or if not by June.
The cash flow from operations standard 368 crore as against 284 crores in the previous period corresponding period and free cash flow as I said after rental of 180crores in capex chances115port December 25th I think these are the few points which I thought briefly. Those results have been with you for a while now and would be more than glad to take any questions over to Mr. Vivek.
Sridhar Ganesan — Managing Director
Thank you, thank you Mrs. So we can open up the floor for questions now please.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for the moment while the question queue assembles. The first question is from the line of CA Garvit Goel from Serene Alpha. Please go ahead.
Garvill Goyal
Hello, Am I audible?
C.C. Paarthipan
Yes please.
Garvill Goyal
Good evening sir. First question is on oncology API facility. It is getting further delayed sir, earlier we were speaking about Q1 FY27 and this PPT. We are, we have mentioned Q3 I27 while I understand that we are, we are doing the CAPEX via internal accruals and all but these delays are now going beyond the normal C I’m sure like an efficient and experienced capital allocator like you, this must be in your mind because ultimately we have to grow the business so for that we need the assets at the right time. So what is your view on it? Like why are these delays happening on a consistent basis? So that’s my first question.
C.C. Paarthipan
Okay, can I give you the answer to this one? Okay. Delay, yes, it’s happened but in the current contest what is important actually is not the delay. It’s not totally denied. Actually it’s not a denied opportunity. Today it is fully completed and that too when we get into the next level that too for the regulated markets. This facility is ready for the US FDA actually and you know we are also planning to go for 10 to 12 like injectables at a time in the form of filing and invite the USFD inspector for Audi. Hence what happens? You are aware that sometimes the facility completion it takes its own time.
It May be because of various reasons. The reason one here I would like to say like this. The ecosystem in actually Tamil Nadu has not been extraordinary like what you call Hyderabad or Bangalore or Vice or Ahmedabad or Mumbai. Hence it also gets delayed. That’s one reason. At the same time, as you rightly said, the money is not borrowed. There is nothing in the form of actually interest loss. I won’t say there’s an opportunity loss also. Because sometimes it is for the greater good which is difficult to understand. What is not obvious many a times actually you create some tangible opportunities also.
Yes, please. So one other point also one other.
Sridhar Ganesan
Point which is the API units are going to be only for backward integration. But remember that we are not really relying on our own API as the first source. This is going to be a second source. So even if the API unit get delayed by a further two to three quarters also, which will not happen. But even if they do happen, it’s not going to be materially of any effect to the company. Because our R and D and our filing continues to happen despite it being our own API or from external API. Till this point, 100% of all the filings and approvals we received are from external API.
So please remember that this thought process of getting into our own API is strengthening our supply chain. But by no means it is going to have any material impact immediately. Yeah.
Garvill Goyal
When you say the ecosystem is not extraordinary, like what kind of challenges are we facing? Can you further elaborate that talent, whether.
C.C. Paarthipan
It is in the form of consultancy or in the form of some project heads. Actually people who come, you know, they don’t stick to it. See if you want to give me an example. See, at one point of time, you know our system turnaround story. Today we are the number one company in Tamil Nadu. There are companies which are not 10, 12 years ahead of us. In fact, they started the company much much earlier to us till they are not even reach 50% of our sales. Also and I don’t want to mention the name of the company, since you asked me, I have to answer that.
Garvill Goyal
Understood.
Garvill Goyal
And secondly, on the growth part, first nine months of sales are up by 10 to 11%. Which is well below our last three year average of 15% which. Which we used to use as a benchmark in the recent recent calls. Even if I see your fixed assets, these have doubled in last two and a half to three years. But our top line is up by only 40, 50% against that. So. So why are we slow in growing our top line? But I agree, I agree that base has become high. But I’m not asking for like we should grow 30, 35% on this higher base, which I understand from the earlier phone call, earlier interactions as well, but not even doing 20, 25% despite having the strong CapEx.
And we are speaking about entering into the new markets and new product approvals that we are getting on the continuous basis. So I’m not able to understand why it is taking us like so much time to ramp up on the assets of the capex or the effort that we have made over the last two to three years.
C.C. Paarthipan
Can you answer please question?
Sridhar Ganesan
Yeah. See we’ve been very consistent with our messaging that the next 18 to 24 months is going to be a gestation and a consolidation phase for us.
Garvill Goyal
Right.
Sridhar Ganesan
So there are multiple things that we are working on. Number one, our entry into the larger markets of Mexico, Chile, Colombia. Number two, our oncology business is still at a very nascent stage. And number three, our US label and our US B2B business is getting consolidated right now. Now remember, we are not in the domestic market where the minute you come up with a product you can directly go and then start making sales.
Garvill Goyal
Right.
Sridhar Ganesan
We are all in either emerging markets or regulated markets where things take at least three to four years for some amount of gaining maturity, you know. So we feel that 28 and beyond looks very exciting for the company on all fronts, on all these fronts that I was talking about, which is larger markets of LATAM, USPS and oncology, etc. So we need to be a little patient. But during this time we’ve been able to consistently still grow at low double digits. And our US business, which is gaining much more traction, is showing growth of almost 25, 30% also.
So we are also able to put away significant amount of cash into our reserves where we are building up a watch list where if there is even an outsized inorganic opportunity that comes through, we will not be shy to do that as well. So I don’t think we are slowing down by any means. I would say that we are consolidating and 27, 28 and beyond could be something that is very interesting for us all to look forward to.
Garvill Goyal
Got it, sir. And regarding on the margins front, is there any further scope of improvement in the margin?
Sridhar Ganesan
I think we’re at a path of 37, 28%. I’m not sure if there are too many peers within this range. Garbage. So. But I love this. Yeah. But regardless of that, I think once we start firing on all symbols on these newer initiatives that we take up There is a potential for that to go up as well. I don’t deny it, but I think at 28% for us too stabilizes and maintain itself would be an excellent achievement.
Garvill Goyal
More probably because margins are at peak and for next 18 months we are speaking about lower double digit sales growth. So bottom line should be more or less in line with the sales growth only. Is that understanding correct?
Sridhar Ganesan
The bottom line will remain where it is. I mean look, there might be 1 or 2 percentage points up or down but that 26 to 29% path is something where we are comfortable with and we to continue.
Garvill Goyal
Thank you very much sir and all the best.
Sridhar Ganesan
Thank you.
operator
Thank you. The next question is from the line of Ahmed Mata from Unifi Capital. Please go ahead.
Ahmed Madha
Yeah, thanks for the opportunity. I have three questions.
Ahmed Madha
Firstly the.
Ahmed Madha
The biop made for few AMDs on the oncology side. If you can give us some sense what amount we have paid for the. And we got. Secondly, what will be the timelines do the site transfer and the commercialization take and from the $473 million addressable market size what sort of potential market share Kapleen Sterile can gain?
Sridhar Ganesan
Okay, so see some of this information is of confidential nature so I won’t be able to go into too much details of it. But what I can give out is we are very, very prudent in how we spend our cash and that includes these acquisition targets. Also the one clue I can give you is that we sort of try and make it a point that any acquisition of Ananda that we do is always equal to or lower than the cost of actually filing that. And it’s. So you may draw your inferences from that. And in addition to that the timelines wise what happens is we need to do the site transfer by way of what you call as a post approval supplement, a pas.
Now we need to run at least one batch of that product and then put that in stability for three months and then apply for the PAs which is six months. So all put together we expect some of these products to come to market by early next year, late this year or early next year. And finally when it comes to the market share, out of the 14 products there are two of them that are fairly large in size but they’re also extremely tricky because they need completely dedicated lines, dedicated units etc. We might not be doing that in house.
We are very actively scoping out contract manufacturing companies for that. We have narrowed it down to two, both in Europe and we are in late stage discussions to take transfer into their side. So in general, I think you can always expect the first couple of years to have about single digit market share and then when we consolidate and then when we have larger portfolio of products to offer, then that slowly starts inching up towards the double digits in terms of market share. So that’s, that’s very helpful.
Ahmed Madha
On the Mexico and Chile business, we have made a lot of progress in terms of approvals, building the pipeline, getting the, getting the inspection and the plant, everything ready. It can give some sense how far are we from meaningful top line generation from those markets and what sort of progress we have made in terms of commercialization and getting the top line ready?
Sridhar Ganesan
Yeah, when it comes to again Mexico and Chile, I would still put the same timelines at about 18 to 24 months is when we can start to see it firing on all cylinders. Of course when it comes to both these markets, typically they are a little bit tender heavy as well.
Sridhar Ganesan
Right.
Sridhar Ganesan
Especially Chile. But there again we are trying to get into the private market which is what the base of our business in Latin America is. You know, more than 80% of our revenues from LATAM come from the private market, which is what we are trying to do the same in Mexico and Chile as well. Chile is a little bit further ahead compared to Mexico because we’ve been in Chile for some time now, but mostly on tenders. Now we are getting into the private market and the same for Mexico in 2026 as well. So I would still say that 18 months is a good timeline for us to see something meaningful on the top line to the parent company.
Ahmed Madha
Sure.
Ahmed Madha
Lastly, on the P and L, if you look at the operating cost, it.
Ahmed Madha
Has been very stable for last few quarters. We have made progress in the top line growth gradually.
Ahmed Madha
I’m just trying to, I’m just curious.
Ahmed Madha
To understand that despite the new plants coming in the both the plants got.
Ahmed Madha
Commercialized I think in the last three.
Ahmed Madha
Four months, I’m assuming, and, and growing gradually. The cost has been broadly steady state. Would you like to help us understand what sort of explains that?
Sridhar Ganesan
I’m not fully clear on the question.
Sridhar Ganesan
I’ll put it different way.
Sridhar Ganesan
If I look at last year the operating cost, which was apart from the employee cost was about 89 crores. This quarter it is about 88 crores. And we have grown top line by 10%. So broadly the costs are similar, we have grown top line by 10% while we have also commercialized new plants which I am assuming will have incremental costs coming in with hiring and other initial opex cost So I am just curious to understand what explains that the costs have not gone up despite top line going up and new plants getting commercialized.
Sridhar Ganesan
Yeah, go ahead. Go ahead.
D Muralidharan
Yeah.
D Muralidharan
Correct. So a couple of years back when we were in the same meeting you asked for this lower turnover. Your income. We have built the infrastructure, we built the periphery. As rightly said the employees have all been recruited for the enhanced capacity. So also as mentioned by one of the previous speakers that most of the projects are in the final stages. Nothing has been put to operation yet. So initially you capitalize whatever the feed, operating expenses are getting capitalized and then once the products are put on. Products are put on scheme under start commercial we’ll see the impact on the.
And as we have mentioned in the past also previously our the sales were on fob business to most of the companies. And about a year back, one and a half years back we have converted them into freight. The freight cost in the purchasing turnover has also come down. It has gone into being. In the past. Okay. Me.
operator
Sorry to interrupt.
operator
Sir, your voice is a bit muffled.
Sridhar Ganesan
Am I audible now?
C.C. Paarthipan
Clear?
Sridhar Ganesan
Yeah, it’s better now. Yeah, fine.
D Muralidharan
So I was trying to say that the.
D Muralidharan
The inter.
D Muralidharan
And then when the brands which are put into use students can.
operator
Big strike is a bit muffled and we can’t hear you clearly.
C.C. Paarthipan
Audible now.
Sridhar Ganesan
Yeah, you can try again. Let’s see.
D Muralidharan
Okay.
D Muralidharan
So as was mentioning that the infrastructure has been created, the man code has been created. Facilities are created for the enhanced capacity. Once these projects are put on commercial we will not see any big spike in the expenditure as such. So that is one of the reasons why even though the top line is growing and operational efficiency is also improved. As you said, the productivity has improved. That is also giving a room for a percentage. As a percentage of revenue the OPEX is either lower or around the same level.
Ahmed Madha
Sure, got it.
Ahmed Madha
Thank you so much.
operator
Thank you. The next question is from the line of Srinjana Mittal from Ms. Capital. Please go ahead.
Shrinjana Mittal
Hi. Thank you for the opportunity. Just One quick question, Mr. Satya. You can help me with the scapulin sterile EBITDA number. That would be very helpful. Thank you.
Sridhar Ganesan
Yeah, sure.
Sridhar Ganesan
Thank you for the question.
Sridhar Ganesan
For the quarter ended December 2025. The EBITDA for CXL consolidated is 31.09 crores.
Shrinjana Mittal
Okay, thanks.
Sridhar Ganesan
Thank you.
operator
Thank you. The next we have a follow up question from the line of Ca Garved Goyal from Serene Alpha. Please go ahead.
Garvill Goyal
Hi. Thanks for the follow up. Is there any further material update on the. You know Technical positions that we are evaluating right now.
Sridhar Ganesan
Nothing, nothing to report at this point. Please. So if there is something material, definitely we will, you know, we will update as and when necessary. But nothing is at very late stages or anything like that at this point.
Garvill Goyal
Okay, thank you sir.
Sridhar Ganesan
Thanks.
operator
Thank you. The next question is from the line of Richa from Equity Masters. Please go ahead. Thank you for the opportunity, sir. Am I audible?
Richa Agarwal
Yes.
Richa Agarwal
Yes.
Richa Agarwal
Yeah. So I wanted to understand like I’m new to the company. In the last phone calls I’ve gathered that you know, you had a thousand crore capex plan of which half was nearing completion and your other half was expected to happen over two to three years. Part of it is backward integration. If you could give some clarity, how much has already been incurred? What is the plan for next two years and what kind of asset turn you are expecting over this campaign?
Sridhar Ganesan
I request CFO to take this case.
D Muralidharan
Could you please repeat the question, madam? We were not very audible.
Sridhar Ganesan
Yeah. The question is out of the thousand crores of capex expansion that we have taken up.
Richa Agarwal
Yeah.
Richa Agarwal
How much, how much has been already and what is expected to be spent in the next two years? And the last is asset turn. Is it?
Richa Agarwal
Yes. What kind of asset turn are we expecting? Because there’s some backward integration element as well. So.
D Muralidharan
Yeah.
D Muralidharan
Okay. Can I, can I.
C.C. Paarthipan
Go ahead, go ahead. Yeah.
D Muralidharan
So the what your capitalized aspect, about 153 crore and add on 24 crores is in WAP. This is adding up to about 280. 290 crores. And what, what we have further advanced about the 88. What Mr. Vivek talked about ordering certain four lines. We have advanced already about 88.54 crores. About 100 crores. 385 crores is already spent. The rest is to be spent in the next, over the next 12 to 18 months.
Richa Agarwal
Okay. And asset turns also if you could, you know, give some clarity.
D Muralidharan
No asset turn depends on when these projects get capitalized and start learning revenue.
Richa Agarwal
I understand. Let’s say over three to four years. I was, I think that you know, because, because some of it is going into backward integration as well. So it might look very different from your historical turnover. So at maturity in three to four years, what kind of asset terms do you expect?
D Muralidharan
It will be difficult to predict as of now because our asset turnover doesn’t. Doesn’t directly gauge the denominator of numerator because as Carbon also put it, we are into asset light model also working with various CMOs, CDMOs and whatnot and then that will give me a top line where without any contribution from the plants. So we are mixed and also we are investing heavily into R and D so which would not directly give to the commercial operation our existing product. The company is a mix of both asset light model R and D heavy and then project based.
So it will not be lower than what we are today.
Sridhar Ganesan
And also I think much of it will depend on the kind of product that we do and the market positioning for those products, they come to market, etc. So typically for a multi product facility, typically for a facility that focuses on, I mean for a company that focuses on different kinds of markets with assets is something that is difficult to really pin down place. I think it’s more if I’m not wrong, I think it’s more applicable to an API industry rather than formulation.
Richa Agarwal
Okay. And one more thing like how should we look at the tax rates? Are they going to stay where they are or you know, inch up?
Sridhar Ganesan
Yeah. Again request CFO to take this please.
D Muralidharan
Yeah, tax rates we have been telling that about. We have some avenues and we are at about 20, 21 percentage. We expect that to be around that in the coming years as well.
Richa Agarwal
Okay, thank you so much.
Sridhar Ganesan
Thank you.
operator
Thank you. Anyone who wishes to ask a question may press star and one at this time we have the next question from the line of Ketan and individual investor. Please go ahead.
Unidentified Participant
Thank you for the opportunity. First of all I’d like to place my appreciation for the chairman and his entire team for doing a fantastic job. I’ve been invested in this company for the past few years and I’ve seen that in a quarter or quarter you guys are delivering revenue, growth, margins, cash, everything is fantastic. Sometimes I feel it is too good to be a true story, but I mean it is what it is. So really my appreciation for the entire team coming coming to my query, my question is for the nine months, is it possible to provide the revenues for the Chile market?
C.C. Paarthipan
Chile market, what is happening there? As has been so told actually by Vivek, this is a market where I know it’s all tender heavy like 75 to 80% is tender and 20% is private market. And very recently we told our guys to actually focus on private market. And the first month itself they have done some hundred thousand dollar business. Although it’s not huge, it’s really good actually for a market where no people focus only on the tenders. So hopefully the revenues are there. But the issue is this market being a tender market and then you know, the import duties are very high and the payments also from the government it comes no little late compared to some other company, some other countries.
Starting from this month or next month we are likely to do around 200 to 300 thousand dollar of remittance. We are likely to get it from Chile. That’s what I’ve been told by our people in Chile. Chile takes time but once we complete the OSD we have completed more of injectable. Injectable goes only into the institutions private market of course has a novel. We should sell more of OMD and other products but of course now only we are submitting some products for registration. Hopefully in the next one, two years we will do very well in Chile.
Unidentified Participant
Okay, thank you for that.
C.C. Paarthipan
Thank you. Thank you.
Unidentified Participant
And the other query I have is.
Unidentified Participant
On the US margins. Now when I look at your segment and figures for the nine months the figure is about 323 crores for the US market revenue and the profit before tax is 34%. So I just wanted to know that right now the margins look about a 10 odd percent but going forward is this likely to inch up? I mean in terms of the margins for the USA business is it likely to go up in the next few quarters and few years Coming to US.
C.C. Paarthipan
Business I would like to say something afterwards is it will actually bridge the hole. If you look at actually injectable facilities whether it is In China or US this is always big boy. In two years we will be in a position to complete 14, 15 lines exporting products to US which is of course not that easy and we’ll be one among the four, maybe three or four from India. And I’ve also seen companies which are very advanced in China in the form of producing biosimilars and lot of biological products. Hardly one or two companies concentrate on.
It is also true compared to other markets this is not that actually lucrative. But why you love to get into this market because this is the biggest market in the world. If you can create many lines like 40 lines then. What we will do is we will have to increase the number of lines to be. To tell you honestly that I hustled my way out of the person I used to be. I used to be a person in charge of marketing. I didn’t know anything about actually manufacturing. I had to play a different role for the last three, four years and now I understood actually that we will be in a position to handle even 13, 14 lines also or a period of time once we get into the state.
Maybe you know it’s. I spoke in the form of video SOP and other things. Sure. Now one more. In addition to that, we are also going for women empowerment. Most of the women in the rural areas, they are totally deprived actually. And then the economic independence makes all the difference to them. And the men in rural areas are different from the woman. So the woman on one side, actually very disciplined. They come to work and they do their work also. Only thing we love to teach them, we are trying to teach them through video SOP.
Once that happens, as I’m 100% sure this market, especially the US market, will start fortifying us in such a way. It has happened to some of the big companies of India.
Sridhar Ganesan
Yeah. Thanks, Chairman. And when it comes to margins, how we look at it is see, out of the 320 crore of revenues from the first nine months is all from the existing products itself. And some of these products are what others would call a slightly commoditized kind of products, you know. So despite that, we’ve been able to have a fairly decent EBITDA number and fairly decent PAT number. But remember, all of these acquisitions that we have done for the A and as all of this R and D work that we do, everything gets expensed out, we don’t capitalize anything.
So there is a bit of a drag because, because of the plans that we have for the future over a period of time, especially when some of these newer products, etc. Come through, you will start to see the bottom line go up. In fact, even now I think we are quite comfortable with where they are, but this will definitely start to go up and 27, 28 and beyond. As Chairman said, when we have 13, 14, 15 lines, your expenses start to cap out after a bit and every additional revenue that you have will be a direct impact to the bottom line positively, you know, so we’ll have to wait it out a little bit.
We are happy with where it is today because we know that this is in addition to all the drag that we’ve had in terms of the R and D and the inorganic ones, etc. So it should only go up from here.
Unidentified Participant
Yeah. Thank you. Thank you for the responses and once again, my deep appreciation to the entire team at Kaplan Point. Kudos to you all. Keep up with. Thank you so much.
C.C. Paarthipan
Thank you. Thank you so much.
Unidentified Participant
Thank you.
operator
Thank you. The next question is from the line of Sachin Kasera from Swan Investment Managers. Please go ahead.
Sachin Kasera
Good evening to the entire team at Kaplan Point. As mentioned by the previous participant, Congratulations to the team for the consistent performance that we have delivered Even in difficult times in the last few years. So that’s, that’s a great job by us just coming back in terms of the current opportunity and the growth that we’re talking of. So the presentation mentions that Chile will be among the top five markets in the next two, three years. So can you just quantify, give us some sense, if not absolute numbers. So when we say top five markets, are we talking like 10, $15 million type of revenue? Some.
Some sense on that. When you see in the top five markets for us in the next two to three years.
C.C. Paarthipan
10 to $15 million per year definitely is possible. Maybe, you know, we will even actually go beyond that one, that is for sure. If you look at one or two companies or from India, they have been doing a very good business in the form of 1 to 1.5 million. But again, no, they all have more of OSB in the form of like 80 to 90 products, whereas we have more of injectables. You are aware that we manufacture injectables for the US market. And we are also focusing on OFD now, plus our oncology facilities also in the next two months we start the commercials we are planning.
We are also doing some using BEBS studies for the oncology products, which of course will submit for registration. So we’ll definitely do well actually in Chile, that is for sure. Just a question of time before it happens.
Sachin Kasera
And can you comment a bit about Mexico? We have mentioned about putting up a facility also there. So what type of investments are you looking at? The Mexico facility? And that will be primarily for serving the markets of Mexico or will that facility also serve markets other than Mexico?
C.C. Paarthipan
Mexico, there is an advantage for the local industry. There’s a 10 to 15% advantage to the local factories for the supply of supply to tender bispas. That’s one of the reason we are keeping this facility there. Second, these are the products actually where the transportation cost also is quite high because Iron Mans and others, we may even go for liquid orals also there we’ll be transporting water from one continent to the third continent. It’s ideal to start a factory in this part of the world because the castor production will not go high because of the other factors which I mentioned.
Now second, we also get an advantage of supplying to the tenders with 10, 15% additional margin. And third, we always believe in catering to the private market, especially to the bottom of the pyramid. I’m just waiting for the first inspection to be completed here from the US fda. After that I go there to you, Mexico and see how exactly the market responds? The initial work, I always used to do it afterwards. The White chairman who happens to be my son used to take over. I’m just waiting for that to happen.
Sachin Kasera
But any sense in terms of the type of investment we are looking in Mexico, Broad range in terms of the.
C.C. Paarthipan
Capex planning, the investment may not be very high. For Heinemann’s and liquid orals it will be in the region of 100 to 125 crores. It will not be more than that. And most of these products there is nothing in the form of bioavailability or sorry bio equivalence or bioavailability. So once we complete the project we’ll be in a position to get into the market immediately.
Sachin Kasera
Sure. My next question is regarding GLPs. You have mentioned that we are developing our own GLPs and some of them we are doing are some sort of a type of the Chinese companies. So next three to four is what is the type of opportunity do we see that? Can it be like a very meaningful contribution to overall revenue and profits.
C.C. Paarthipan
In the next. Are you mentioning about the next three, four years? Yes, we will definitely do well in the next three to four years time. The kind of investment which you made, it is not an investment which is very shallow like we are investing in hard assets. Assets actually will definitely rectify over a period of time. Already, you know we are on 50 doses in our CSL and then the next three, four years, you know 100, 100 plus maybe 125 andas in addition to that you will also go for global doses from that facility. And then, you know we are also in the process of completing another facility.
You know, I’m Talking of the APIs both API that is for captive consumption. It will be vertically integrated company like any other big company. The only difference is most of the big companies their APA volumes are quite high whereas ours is for the capital consumption. But these big companies also, they slowly move actually from one area to the next area. But the companies of our size, they will not get into the space that we hardly few companies. If you look at the indebted companies, most of the companies that you see in India, either they are big or people who are into CMO business.
We are not into CMO business. We are like big people, sorry, big companies. We are following the footstep of big companies for manufacturing as well as filing the ANDs, filing the dossiers also for ANDs. So we are sure to actually do very well not only in the US but also in Latin America and rest of the world too. Thank you.
Sachin Kasera
But sir, my question was more to do with GLPs we have mentioned.
Sridhar Ganesan
Yeah, yeah. So when it comes to glp Sachin, we entering into the smaller markets in Latin America to begin with and we are doing something very unique which we will, we will reveal that as and when the right patterns and everything are set up. But at this point I would say that it’s, it’s a little bit of an unknown space, you know, because what happens is the GLPs have been very extensively used in the developed markets. So in the developing markets we are just slowly starting to see some amount of usage and only now I think this year all the patents and everything except us will expire.
So we will start to see a little bit, you know, I think that there’ll be a little bit more clarity on how these products are going to get picked up. Of course in India one of them has picked up significantly more than the other one. And the truth is it is moving in a different direction in our opinion. But again this is a conversation that take a long time. I would say that we would be in the second wave of people that, that start to commercialize it, not in the first wave. To be honest with you, that might actually work out better for companies like us to be in the second wave rather than the first wave.
Sachin Kasera
Sure. Just one question on CapEx and also linked to that in terms of our overall in household production. So once we complete this Capex of thousand crores, from what I understand right now we have a model whereby we partly manufacture in India and partly we get it outside sourced from China. So do you see, how do you see that mix changing is will it.
Sachin Kasera
Remain the way it is right now.
Sachin Kasera
Or in the next three years is.
Sachin Kasera
There going to be a change in terms of the mix between what we produce in India versus what we get it sourced from China?
C.C. Paarthipan
I would like to say a few words on that one. If you look at China, we will now be able to compete with them in cephalosporin and penicillin area and we have been sourcing products of the penicillin and cephalosporin from China and we will continue to source from there. If you look at again biosimilar, they are much, much advanced. Even GLP products, the API at one point that time it was actually $500 semaglutide. Today it has come down to $80. So these are market where they can change the economies of scale and some areas will not be in a position to Actually compete with them.
It’s better to join somebody whom we can’t compete with. That’s one second how the change will come maybe in five years from now. The most important thing one has to worry about it actually not this one. How the AI will impact the industries. If Boba can replace 100 to 200 people for manufacturing actually in US and the manufacturing in India will be one of the same. Probably the because Indian if you do it for India then of course no export merit with that. That’s the reason what we are doing now we are slowly, you know, trying to also create some facilities and countries where they may allow actually robots without any hesitation.
So this is one thing which is the most important one than any other things. Because we are also thinking of fill finish biosimilars. We are also thinking of various areas where no India is positive. India of course India centric products. We are trying to do China centric products. We are following the asset like model.
Sachin Kasera
So fair to assume that 6040 which.
Sachin Kasera
Is in house versus outsourcing probably could become like 65, 70% in house and 30% outsourcing. Because we are doing almost 1000 crores capex. So that should mean that going ahead we are able to produce more in house than outsourcing.
C.C. Paarthipan
You’re right. You are right. It will happen. It will happen. But again what we will do is the outsourcing part from China. We don’t want to reduce it. The reason being we are outsourcing from big companies and then we are outsourcing again actually products which cannot be actually manufactured that cheaper in India coming to the surface of India peninsula. And even if you want to go for a biosimilar facility, it is better to test the waters in the form of full finish rather than going at for a factory from the scratch. So we will have some collaboration with the Chinese partners and continue to do the business in the form of asset like model.
What you said is true, the 6040 may even go actually 70 30.
Sachin Kasera
And just one last question. Once we complete this thousand crores Capex, are we going to look at another round of large capex? Or then for the next two, three years the capex intensity is going to come down.
C.C. Paarthipan
See what will happen probably is we’ll have to think of actually meaningful inorganic growth. After that. It can be in the form of acquiring the products, can be in the form of acquiring a distribution company which will help us in the private market. It can be in the form of some occurring some companies where there will be a value addition for capital point.
Sachin Kasera
But not too much in terms of manufacturing. Manufacturing.
Sridhar Ganesan
Manufacturing.
Sachin Kasera
Capex will go down.
C.C. Paarthipan
I don’t think so. It will come down. It will go down. It will go down.
Sachin Kasera
Great Chairman, thank you so much and all the best.
C.C. Paarthipan
Thank you so.
Sridhar Ganesan
Thank you.
C.C. Paarthipan
Thank you.
operator
Thank you. Ladies and gentlemen. That was the last question. I would now like to hand the conference over to the management for the closing comments.
Sridhar Ganesan
Thank you everyone. Thanks for taking time out to join the call. It was excellent interacting with all of you as usual. We hope to see stay in touch with each and every one of you. Thank you.
Sridhar Ganesan
Thanks to all of you. Thank you so much. Thank you.
Sridhar Ganesan
Thank you to Dalit Capital and your team as well.
operator
Thank you on behalf of Dollar Capital Markets Private Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.