Concord Biotech Limited (NSE: CONCORDBIO) Q3 2025 Earnings Call dated Feb. 14, 2025
Corporate Participants:
Ankur Vaid — Joint Managing Director & CEO
Lalit Sethi — Chief Financial Officer
Analysts:
Amey Chalke — Analyst
Chintan Sheth — Analyst
Huseain Bharuchwala — Analyst
Sumit Gupta — Analyst
Alok Dalal — Analyst
Harsh Bhatia — Analyst
Alankar Garude — Analyst
Parvati Rai — Analyst
Harshal Patil — Analyst
Nikunj Mehta — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 FY ’25 Earnings Conference Call of Concorde Biotech Limited hosted by JM Financial. 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-date of this call. These statements do not guarantee the future performance of the company and it may involve risks and uncertainties that are difficult to predict. 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 the star then zero on your touchtone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Amy Chalke from JM Financial. Thank you and over to you, sir.
Amey Chalke — Analyst
Thank you, Steve. Good evening, everyone. I’m Amya Chalki on behalf of JM Financial. Welcome you all on the Q3 FY ’25 earnings conference call of Concorde Biotech. At the outset, I thank the management of Concorde Biotech for giving us this opportunity to host the call. Today from the company, we have with us Mr Sujeer, Chairman and Managing Director; Mr Ankur, Joint Managing Director and CEO; Mr Lalit Seti, CFO; and Mr Pakas Sajnani, Compliance Officer and Assistant Vice-President Accounts.
I now hand over the call to the management for their opening remarks. Over to you, sir.
Ankur Vaid — Joint Managing Director & CEO
Thank you. Good evening, everyone. This is Ankur. Thank you for joining us on our Q3 FY ’25 earnings conference call. We are pleased to report stable performance for Q3 FY ’25. Our revenue from operations stood at INR244 crores compared to INR240 crores in Q3 FY ’24, a modest growth of 1%. This growth was moderated due to customer procurement patterns and also on account of upcoming annual tenders for the formulation, resulting in lower uptake in Q3 FY ’25. EBITDA for Q3 FY ’25 stood at INR98 crores with EBITDA margins at 40.1%. Our profit-after-tax stood INR76 crores with margins at 31.1% for Q3 FY ’25.
Looking at the nine months FY ’24 performance, revenues increased by 10% year-on-year, driven by a 3% rise in API revenues and a 42% increase in formulation revenues compared to the same-period last year. Our outlook remains positive, in-line with our long-term guidance of achieving a 25% CAGR growth over the next five years. Moving towards the segmental breakup, our API revenues for Q3 FY ’25 stood at INR176 crores against INR172 crores in Q3 last year, a growth of 3% year-on-year. We would like to highlight that the inter-unit sale of API to formulations has not been considered in the API revenues. Hence, we see a muted growth for our API segment.
Including the inter-unit sale of API to formulations, our API revenues grew by 9.6% for Q3 FY ’25 on a year-on-year basis. We observed some of the customers phasing out their procurement from Q3 to Q4, which is also reflected in the strong order book position we have. Our formulation business has experienced notable success, gaining strong acceptance among customers across various regions. In Q3 FY ’25, our formulation segment stood at INR67 crores. Formulation segment revenues were impacted during the current quarter on account of calendar year closure for many of our global clients. And on account of tenders from these customers, which generally open for the next year in January, reflecting high order inflows and revenue booking in the coming calendar year. However, for nine months FY ’25, our revenues from formulation segment stood at INR192 crores, up by 42% year-on-year basis.
We have built a strong on-ground sales and marketing team of over 200 members across India, driving expansion and deeper market penetration. With the continuous addition of new products to our portfolio, we are optimistic about broadening our customer-base in the years ahead. Our strategic focus is to target domestic and emerging markets, leveraging our expertise and market reach with opportunistic approach for the regulated markets. As our formulation business continues to evolve, we anticipate substantial growth in both product offerings and customer acquisition, contributing significantly to our overall success in the medium-to-long term.
Currently, our product portfolio includes 30 plus fermentation-based APIs across immunosuppressants, oncology, anti-insective and antifungal segment. As part of our strategic growth plan, we aim to introduce eight to 10 additional products over the next three years with a strong focus on oncology and anti-infectives. This expansion aligns with our R&D priorities where we are developing niche products with complex process and limited competition. By leveraging our expertise in fermentation-based APIs, we are strategically positioning ourselves to capture a significant share of these niche markets. Our goal is to establish a strong global presence and achieve market leadership targeting a sizable global market-share within the next five years.
In addition to product expansion, we are actively acquiring new customers across different regions, while strengthening relationship with existing partners. By offering a comprehensive and differentiated portfolio, we are enhancing our market-share, driving long-term revenue growth and solidifying our leadership position in the specialized space. In our CDMO business, we continue to engage with potential customers to consider Concorde as the potential CDMO partner and are seeing growing number of inquiries in multiple RFQs being submitted. With our established capabilities, strong track-record and regulatory approvals in-place, we are well-positioned to capitalize on this opportunity and drive our future growth.
Our strategic focus is to partner with large innovators and well-established generic companies with significant market presence. Concorde offers unique advantage as a CDMO partner, utilizing our expertise in fermentation-based APIs, complex formulations and higher-value products, making us a strong and reliable partner. For majority — for major industry players looking for a fermentation-based manufacturing partner. While CDMO was initially part of our long-term strategy, we now see it as a medium-term growth driver giving the increasingly industry interest. This shift reflects our confidence in utilizing our niche capacities and capabilities to support large partners in bringing innovative and complex products to-market.
Moving on to quarterly updates. During the quarter, we made a strategic investment of $1 million in compulsory convertible notes of Palvela Therapeutic Inc. Palvela Therapeutics founded in 2015 is driven by a singular mission to provide treatments for individuals suffering from rare genetic skin diseases. Palvela Therapeutic is a biotechnology company specializing in developing and commercializing medicines for patients with rare dermatological diseases. Headquartered in Wayne, Pennsylvania, leadership and scientific management team have a proven track-record of success and a strong commitment to leading the way in the advancement of target treatments for rare geno dermatosis.
With a team of passionate industry leaders, the company is dedicated to developing breakthrough solutions for patients with high unmet medical needs. This investment aligns with our long-term growth strategy as it paves the way for a strategic partnership focused on the manufacturing and commercialization of QTRON, a therapy designed to treat rare genetic skin diseases. Through this financial commitment, we aim to strengthen our collaboration with Palvela and enhance opportunities for supplying our products to them in future, expanding our footprint in the global markets. Additionally, we have also made a strategic investment by entering into a share purchase agreement with CleanMax Private Limited and Cleanmax and Viro Energy Solutions under which Concord will acquire a 26% equity stake in Clean Macs.
Our investment is specifically in the state of Gujarat, where Clean operates a 6.6 megawatt wind capacity and a 3.3 megawatt DC solar capacity dedicated to powering our Dolka plant. This investment aligns with our commitment to sustainability and our focused efforts to address environmental challenges. By transitioning to renewable energy sources, we aim to significantly reduce our carbon footprint, contributing to global climate action initiatives. Additionally, renewable energy adoption offers long-term financial benefits, including lower energy costs and enhanced operational efficiency. Finally, an update on our injectable plant. The plant is scheduled to begin commercial production in the current quarter with revenue generation expected to build-up over the next financial year. We have several products lined-up for launch from this facility in the upcoming year, which will contribute to both revenue growth and profitability going-forward.
Concorde is one of the few companies that manufacture both oral solid dosage and injectables along with in-house API production and backward integration to produce key starting materials. This unique capability positions our products alongside those of large pharmaceutical companies increasing their acceptance and usage within the medical community. We are also delighted to announce that Concord has been honored with Sustainability Reporting Award from the Institute of Chartered Accountants of India. This prestigious recognition reaffirms our commitment to transparency, ethical governance and sustainable growth, all-in alignment with global standards and the UN Sustainability Development Goals.
At Concorde, sustainability is at the core of our business strategy and this award is a testament to our ongoing efforts to drive responsible and impactful growth while maintaining the highest standards of corporate governance. At last, I would still emphasize to assess our financial results on an annualized basis rather than a quarterly one. This is because customer procurement pattern may lead to lumpiness with some quarters experiencing higher procurement than others. Therefore, a more accurate assessment of our performance is best achieved by analyzing the medium and long-term trends rather than focusing solely on short-term variations.
With this, I hand over the call to Lalit, our CFO for financial and operational performance. Thank you.
Lalit Sethi — Chief Financial Officer
Thank you, sir. Let me take you through the financial and operational performance for the quarter ended December 2024. Our revenue for the nine months financial year ’25 stood at INR770 crores as compared to the INR698 crores in nine months financial year 2024, representing a growth of 10%. Our revenue for this quarter stood at INR244 crores as compared to INR240 crores in the same-period last year. Revenue from API business stood at INR176 crores in this quarter against INR172 crores during the same-period last year and API remained in the nine months of this year stood at INR577 crores against INR562 crores during the same-period last year.
As mentioned, API revenue excludes intercompany sales to the formulation unit and hence shows muted growth. API revenue growth includes transfer to formulation segment stood at 9.6% for the quarter and 10% for the nine months on a year-on-year basis. Revenue from the formulation business for this quarter was INR67.6 crores compared to INR68.5 crores in the same-period last year. The revenue growth was impacted by the year-end closure in several of our international markets, which led to the sales being pushed to the following quarters. Additionally, new tender releases typically occurring in January will be reflected in the financials of the current quarter.
Revenue from the domestic business grew by 13% in the nine months ’25 on a year-on-year basis and revenue from exports business has grown by 8% in the nine months of this financial year., speaking on EBITDA, EBITDA for this nine months stood at INR315 crores, representing a growth of 6% on a year-on-year basis and EBITDA for this quarter stood at INR98 crores as compared to INR105 crores in the same-period last year. This is on account of subdued revenue growth, however, our long-term sustainable margin guidance is in the range of 40% to 43%. EBITDA margin for this quarter stood at 40.1% and for nine months, it stood at 41%. On profit-after-tax, our profit-after-tax for this quarter stood at INR76 crores as compared to INR77.6 crores in the same-period last year.
PAT margins for this quarter stood at 31.1%. PAT for the nine months ’25 stood at INR231 crores as compared to INR213 crores in the same-period last year, a growth of 9% Y-o-Y. PAT margins for nine months financial year ’25 stood at 30% as compared to 30.5% for the same-period last year. We are a zero-debt company with investments, bank balances and cash-and-cash equivalents to the tune of INR250 crores as on 31st of December 2025.
With this, I shall now leave the floor open for question-and-answer. Thank you.
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 your touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset 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 Chindan from Capital. Please go-ahead.
Chintan Sheth
Thank you,, and for the opportunity. On the revenue growth, you mentioned the reason for quarterly revenue. But even if I look at trading 12-month revenues, the growth has been around, 10%, 12% versus what we were initially guiding for this year was around 18% to 20%. So just trying to understand whether we maintain our current year growth guidance at around that level or we would like to revise it a little downward? And secondly, on the Limbassi facility, if you can highlight how has the ramp-up and the product shifting, which was likely to happen during the year, how that progress has been made so-far.
Ankur Vaid
Sure. Thank you. So as you would have seen in our quarter-on-quarter numbers, if our quarter one number was slightly on the lower side and we saw a ramp-up in our growth in-quarter two and again, quarter three has been relatively muted. And as I mentioned that given our order book position that we have and given that much of the phasing out has happened or the shift has happened to quarter-four, we expect our quarter-four again to be on the higher side. And you know, so it is going to be more about the execution of the orders book position that we have. That being said, you know, in our previous calls also, we have mentioned that if you have to break-down the growth for us, it is basically, say, at 10% on baseline growth, we look at around 2%, 2% to 3% shift from the innovatives to the generic, another 2% to 3% growth comes from new customer acquisition and another 2% to 3% comes from, you know, increasing the market-share for our newer products. That’s how the 18% kind of comes out.
And historically, we’ve been doing that and you know, even in this quarter, we are looking at a couple of our customers that we intend to, you know, work with new customers for some of our new products. So one would have to see how that pans out. But as I said that we have a good order book position and I think our — our Jan numbers have been good. We are working very much on getting our February numbers out as well in-line with what we expect. So I won’t be able to guide you on that, but from the looks of it, we are moving in the right direction. We just need to see that some of the customers that we intend to build-on as part of that 2% to 3% how we are going to be doing that, things are moving in the positive direction.
In terms of — in terms of the ramp-ups, you know, our capacity utilization like it stands at —
Lalit Sethi
Yeah, it stands at 35% for this nine port against 32% in the same-period last year.
Ankur Vaid
So you know, while the customer additions have happened, I would say that still some of the customers are taking a little bit more time than I would have actually wanted it to be. But again, the efforts are going on that front. We have a couple of customers who have taken the material from the new site and we expect that in the next couple of months, they would also ship. So depending upon the on the resources that our formulation partners have versus new products and site qualifications, this process is an ongoing process and we anticipate that more-and-more customers in the coming months would be shifting to Limbasi facility, which will further increase our capacity utilization. And as I said earlier also that the new products that we intend to build-on in the anti-effective segment, that is all going to be coming from the new site only instead of the unit one.
Chintan Sheth
Right, right. And just to touch upon on the growth, do have we — are we seeing a end-market demand for the products for our clients are declining or competitive intensity with them has increased, which results in the slower offtake from them or this is just a channel timing issue in terms of, you know procuring from you guys.
Ankur Vaid
So we have not seen any change in the — in the market per se. It’s not like our customers have added alternate suppliers and they are procuring it from other players. You know, I think since we had a heavy quarter two, my sense is that probably because of the heavy quarter, they would have had inventories which would have led them to some of the customers phasing out. It is not that all the customers ended-up phasing out to quarter-four, but some of the customers phasing out gets reflected in the in the overall growth for that specific quarter. But you know, new customer addition for our existing products, I think that is something that didn’t happen in-quarter three, but the discussions were ongoing and I expect that at least couple of them should get you know, on-board in this quarter.
Chintan Sheth
I’ll jump back-in queue for further questions.
Ankur Vaid
Thank you.
Operator
Thank you. The next question is from the line of from Carnalian Capital. Please go-ahead.
Huseain Bharuchwala
Sir, am I audible?
Ankur Vaid
Yes.
Huseain Bharuchwala
Hello, am I audible?
Ankur Vaid
Yes, you are audible.
Huseain Bharuchwala
Just wanted to understand on the CDMO side, since you said that moving from long-term, it is now good to medium-term. So how do you see the CDMO contracts? Can you give some color on that? But are you seeing customers visiting your side? And are they looking at — are you — are the RSQs have actually increased over a period over compared to last quarter or so of maybe a year or so. Can you give some color on that?
Ankur Vaid
So on CDMO, as I mentioned that we had earlier built it into a long-term strategy and we have given how things are panning out globally, we have made it into more of a medium-term strategy. And you know, currently, we have filled out a lot of RFQs, but if you — if you see active engagements, I would say those would be couple of projects that we are actively discussing. Again, you know, decisions like these could take time and the true impact of that would take at least nine to 12 months. And that’s why, you know while our efforts are going on building this CDMO segment, I would still put this in a medium-term bucket, while things can change, but the but the true impact on the financials, I would say, would be in the medium-term only. But our results are ongoing on this.
Huseain Bharuchwala
Any number that you will share in terms of the RFQs that have gone up, if you can say RFQs have gone by 40% or 30% or anything of that, you can change it.
Ankur Vaid
See, RFQs never talk about the quantum of the business. So you know, they are typically talking in terms of the technical evaluations that are going on. So I would not want to talk — give any number on the CDMO because whatever growth that we talk about that is apart from the CDMO. So if that happens and our efforts are going on, I think at appropriate time when things move to that level, I would be happy to share that in terms of what is the quantum impact on the top-line. But for now, I would just say that our efforts are ongoing on that and couple of the projects are where we are actively engaging with that.
Huseain Bharuchwala
Got it. And sir, any — any viewpoint that you would like to share on the raw-material prices. So are the raw-material prices have gone up a little bit and we are not able to pass-through because our gross margins have contracted. Is it because of the change in the mix in formulation going up or is it because the raw-material prices have gone up and we are not able to pass-through all those increase in the cost? Any color on that?
Ankur Vaid
I think our gross margins have been relatively flat.
Lalit Sethi
It’s flattish. Basically some of the — there is some kind of a product mix. But as far as the prices of the raw-material is concerned, there is no impact on the raw-material prices.
Huseain Bharuchwala
Got it, got it. Okay. That’s the only question from my side. Thank you so much.
Ankur Vaid
Thank you. Hello?
Operator
Yes, sir. The next question is from the line of Sumit Gupta. Please go-ahead.
Sumit Gupta
Hi, sir, am I audible?
Ankur Vaid
Yes.
Sumit Gupta
What has been the capacity utilization of all the three facilities?
Lalit Sethi
For Unit 1, it is 78% and for Unit-3, it is 35%. Unit one is the Dolka facility and unit three is the facility. And for Unit two, it is 26%.
Sumit Gupta
Okay. So what kind of unit utilization can we expect over the next, let’s say, one year or two years? How do you see that panning out?
Ankur Vaid
See, I mean, you know, if you look at unit one, while we are at 78%, but at times the capacity may not be a true indicator of the volume — the revenue contributions that it could give because when we talk about the utilizations, it isn’t based on the fermentation capacity being used. Now for oncology products where we have a 5,000 liter ferment compared to the 400 meter cube that we have at Unit 1, the contributions from the 5,000 liter per menter would be significantly higher at times. And so you know, with an increase of maybe 0.5% to 1% level, the contributions to the top-lines could be much higher.
But that being said, as I mentioned earlier, that much of the growth in the API space is going to come from Unit-3 where we’ll be, you know, shifting the customers from unit one to unit three and also newer — newer products are going to be manufactured at the Limbati facility. So ex oncology products, the capacity utilization is bound to increase on Unit-3. And given the growth guidance that we have given, it would move-in line with the — the API growth will move-in line with the capacity utilizations for Unit-3.
Sumit Gupta
Okay, sir. Thank you for the detailed answer. And second question on the — basically the trajectory of the margin. So how do you see that panning out? Do you see like what has been the pricing environment and then leading to the margin trajectory over the medium-term?
Ankur Vaid
The margins trajectory and…
Sumit Gupta
And the pricing scenario, what has been the overall trend and how do you see that panning out?
Ankur Vaid
So you know, the growth for us has been primarily volume-driven growth and there is not much change on the pricing front with our existing partners. That being said, you know, when we go for a much larger customer-base, the newer — newer customer acquisitions could be, you know at times higher or lower to our — our average pricing that we have for the products. Depends upon, you know, depends upon the market and depends upon the — on the customer-to-customer. But the existing prices to our existing customers has been fairly stable and has been primarily a volume-driven growth for us. And when it comes to margins, I think, you know, since you know the price points are not changing and there is not much variation on the raw-material cost, the prices — the gross margins expected to be relatively stable and that’s something that you would see on our Nine-Month gross margins as on-date as well.
Lalit Sethi
And one more in that. Hello?
Sumit Gupta
Yes, sir. Yes, sir. Go on.
Lalit Sethi
So one another variable is the product mix, which do have some kind of an impact on the margin profiling. But since our APM formulation is normally in the range of 20% and 80%, so therefore, the margin profiling is going to be more or less in the same range, unless and until there is a significant shift in the split. But as far as the designing of our capacity is concerned with respect to the API and formulation, the designing of the capacities has been in such a manner that the potential revenue from API and the potential revenue from the formulation stands at 80%, 20% respectively. So therefore, going-forward also, in the long-run, our margin profiling is going to be in the same range of 40% to 43% EBITDA.
Sumit Gupta
Okay. And sir, your overall employee cost has also increased. If I take the nine months data of around nearly, I think around 10% kind of increase. So do you expect more employees to add so like what is the current headcount and like what exactly do you see the trajectory going on here?
Lalit Sethi
Yeah. As — so as far as the unit four, which is also ready for capitalization, the new man headcount is likely to be appointed for the Unit-4. Therefore, this — there could be a one-time increase in expense and going-forward, it’s going to be offset from the revenue which will be generated from the injectable units.
Ankur Vaid
See, in addition to the injectable manpower, as our capacity utilizations would increase also with the injectables coming in, there could be some increase in our field force also, but that is not a significant — a significant change, but definitely, you know we expect some additional manpower coming at both Unit-3 as well as our injectable marketing team as both the things ramp-up.
Sumit Gupta
Understood, sir. Sir, lastly, on the price, I understand that you said it you have not taken price hike. Is it — is it like it is on the consultancy, right? But are there some contracts where on a case-to-case basis, you have taken price hike?
Ankur Vaid
Yes, of course. So it depends upon the customers and as I said earlier, that there could be certain accounts wherein we want to get into those larger accounts where pricing could be different compared to what our average pricing could be. And there could be certain smaller accounts where we may be able to get relatively better pricing. So, it depends upon product-to-product, customer-to-customer and which region that we are targeting.
Sumit Gupta
Okay. So in that case, what is the frequency of price revision?
Ankur Vaid
So we don’t have a standard pricing. It depends upon you know, if we are going with a second source opportunity, what is the price that we need to give in order to get that opportunity. So though it gets on a case-on-case basis and if there is any revision in the price, then it depends upon that opportunity. But I would say that there are no upward revisions. So ours is more of a volume growth, but price provisions could happen depending upon the opportunity that we intend to capture.
Sumit Gupta
Understood, sir. Thank you.
Ankur Vaid
Thank you.
Operator
Thank you. Participants who wish to ask a question may press star and one. The next question is from the line of Alok from Jefferies India. Please go-ahead.
Alok Dalal
Yes, good afternoon. And Lalit, sir, what is the — what is the growth that we are seeing in the top-five APIs.
Ankur Vaid
In the top-five APIs, the growth is at the range of around 5% to 6% in case taken on the third-party sales.
Alok Dalal
Okay. Okay. And rest of the APIs, how is the growth trending there?
Ankur Vaid
So in fact is on oncology, the rate of growth is significantly better as compared to the as there are some new molecules, new markets have been there for those molecules. And when we talk Alok about the 5% that is to third-parties, as I mentioned that you know when you move the unit 2 primarily has a backward integration with our API. So when we are going with a 43% rise in the formulation sales, it is getting also — it is also impacting the growth in the API sales also. So that 5% is just to third-parties, but we are capturing a much larger market through our formulations, which in-turn would also lead to API growth.
Lalit Sethi
So one thing more I just wish to add here. So in case there would be — there is not inter units there and the inter-unit sale is to be made to the third-party. In that case, the growth in API would have been 10%.
Alok Dalal
Okay. And sir, these numbers are on nine-month basis, no.
Lalit Sethi
Yes, these are nine months basis.
Alok Dalal
Okay. Would you be able to share the contribution of top-five APIs to overall revenue for nine months?
Lalit Sethi
No, normally we don’t share the molecule wiser.
Ankur Vaid
So product-by-product breakups typically we don’t.
Alok Dalal
Okay. Okay, fine. And sir, what is the capex guidance for FY ’25 and ’26?
Lalit Sethi
Capex is more or less over. As we mentioned in this quarter itself that amount of INR225 crores, which we have spent on injectable unit will be capitalized. And so there is no-growth capex which is expected for the financial year ’24, ’25. There will be only maintenance capex with respect to all the units, which will be to the extent of around INR15 crores to INR20 crores per annum.
Ankur Vaid
So yeah. But if we do get into apart from formulations or fermentation APIs, if we look at other opportunities within the agencies of fermentation and if that requirement comes, whether to do it in-house or through other procurements, then that’s something that we may look at. But for our API and formulation business, as Lalit said that there will be no CapEx requirement.
Alok Dalal
Got it. And Ankur, last point, what will be the utilization rate for the injectable plant for FY ’26, let’s say, when you end FY ’26, what kind of utilization can one look at?
Ankur Vaid
So, a little too early for us to come down on the numbers, but as I said that for the next financial year, this is primarily going to be targeting the domestic market and we will do the filings into the emerging markets in the coming financial year. And in FY ’27 is when we would see both emerging markets and India markets contributing. But for next year, it is primarily going to be the India market, which I believe is also a very, very significant and a very big market, particularly for the API and particularly for the finished formulations that we intend to sell-in the domestic market because as I said earlier that there is no other company like Concord, which is fully-integrated right from API to finished formulations. So definitely we would be able to use it to our advantage of the backward integration approach and be able to cater to the Indian markets in a much more aggressive manner?
Alok Dalal
Okay. Understood. And sir, while you explained about the margins in the 40% 43% range, wouldn’t the margin — shouldn’t the margin be higher more than 43% because now you have — the capex is over, it will have the utilization ramping-up. So shouldn’t the margin move-in, let’s say, by FY ’27, shouldn’t be — it be more towards the 45% range.
Ankur Vaid
So you know, again, this will go in — it is more cyclical in nature because when we had our Limbassi facility not ready or just got ready, our EBITDA numbers were lower. And as ramping-up started, you know, we saw that going from 38% to, 42%. And you know, now that in the next year, we will have the injectable facility coming up, one would have to see that there would be a positive impact from the ramping-up of the Limbati facility, but there would be some bit of drag coming from the injectable. And — but of course, we will stay-in that 40% to 43% range as Lalit mentioned. But once the injectable facility also starts ramping-up in a manner that we are looking over the next two to three years, then yes, it could also start having a higher contributions to the EBITDA margins.
Alok Dalal
Understood. Okay, sir. Thank you for taking my questions.
Ankur Vaid
Thank you.
Operator
The next question is from the line of Harsh Bhatia from Bandan Mutual Funds. Please go-ahead.
Harsh Bhatia
Yeah, thank you. Am I audible?
Ankur Vaid
Yes.
Harsh Bhatia
Yeah. Ankur, just two, three quick questions. Are you calling out the drag from the injectable facility, the injectable facility?
Ankur Vaid
Yeah, not in this year. This year, we will be — we intend to capitalize or be commercialize the injectable plant by end of this quarter. So I don’t see any significant impact in this in this quarter.
Harsh Bhatia
Okay. And in the second-quarter, you had mentioned that the external KPI sales will grow in low-double-digits for FY ’25. So do we still hold to that guidance for the full-year? Externally PSUs.
Ankur Vaid
Yes. But see, again, as I say that now you know as I mentioned that now you need to look at from an overall company perspective, because there are a lot of markets that we are also able to address through our formulation. So the overall spy is the same, whether I address it through an API sales or I address it through formulation sales. And that’s why since the last two quarters or so, we’ve been also giving that how the API growth has been considering the Inter unit because that is a true representation in terms of how we are addressing the addressable market. Some bit happens through the API and some is happening through the finished formulation.
Harsh Bhatia
Just to get this more accurate, talking only about the 3rd-quarter, you mentioned that external sales would have grown by almost 9% to 10%, ex of the captive sales. So if I would be rough…
Ankur Vaid
Captive sales is 10%.
Harsh Bhatia
Sorry, you were saying?
Ankur Vaid
I was saying it includes the captive sales. So the API growth, including the sales — inter-unit sales constitutes to 10% API sales growth.
Harsh Bhatia
Roughly if I do the calculation up again if I’m not wrong, that would be incrementally under the INR1213 crores for this quarter that would have been captively consumed.
Ankur Vaid
10% will account for around INR20 crores of rupees of sorry, INR240 crores — yes, INR15 crores to INR17 crores of rupees.
Harsh Bhatia
So this INR15 crores to INR17 crores of sales that are basically getting transferred to the formulations in terms of, let’s say, captive sales. I’m just trying to get the numbers sort of more directionally accurate. So that is not getting reflected in the formulations as of now, right, because your INR68 crore formulation sales was in 3rd-quarter of last year and it is same as INR67 crores in this 3rd-quarter. So that incremental INR15 crores is getting accounted in which format. Like I understand that transfer pricing might be something that I don’t understand. But how should we think about this because even second-quarter this was the same case although the formulation sales were higher. But this quarter you’re saying that INR15 crores INR17 crores is getting transferred formulations.
Lalit Sethi
So in fact, you need to see that on the nine months basis. So in nine months period, there is a growth of 42% as far as the formulation sales is concerned. The form — the increase in the formulation sales is on account of the API, which has been provided from unit one to unit three to the formulation. So that kind of a growth number has come only through the entry unit phase. So instead of looking at the quarterly number, we need to see the Nine-Month number.
Harsh Bhatia
Okay. And when we are doing this providing the guidance of 20%, 25% of sales CAGR for the next three to Five-Year period, that is on an external sales basis, right?
Ankur Vaid
So the 20% 25% guidance is at the company-level. So there we are — we are not breaking it down into the API or the injectables or the oral solid, here we’re talking in terms of the overall growth of the company coming at 20% to 25%. And when we will — see, there are certain markets where we will boost with the API, there are certain markets where we will address it through the finished formulation. And I think when you have the backward integrated approach, especially for fermentation APIs, I don’t think any company globally has that they are making the fermentation APIs also and integrating into injectables or rural solid. So we would wherever required, we would use this as an opportunistic approach to cater to the — to the market requirements. So that would result into the overall growth of the company, which is the 25% CAGR that we talk about. So the breakup will depend upon how the market is panning out.
Harsh Bhatia
Okay. So net-net reported basis, which is 20% 25% CAGR on a reported basis.
Ankur Vaid
So on a level,
Lalit Sethi
Correct, correct on the reporting basis, yes.
Harsh Bhatia
Okay. And are we working on and the fermentation side, so anything on the CDMO from a peptide level perspective that we’re working on, anything you would like to share or too early to call-out?
Ankur Vaid
Sir, could you repeat?
Harsh Bhatia
Anything from the fermentation side for the CDMO angle, are we working on the peptides space as of now?
Ankur Vaid
So definitely, you know, it is an area of our interest and meets to our expertise that we have. So currently, you know, definitely a good area to evaluate.
Harsh Bhatia
Thank you so much.
Ankur Vaid
Thank you.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to answer questions from all participants, please limit your questions to two per participant. And if you have a follow-up questions, please come back-in the queue.
The next question is from the line of Alankar Garude from Kotak Institutional Equities. Please go-ahead.
Alankar Garude
Hi, thank you for the opportunity. Ankur, one clarification. Can you reconfirm the 25% growth guidance is a CAGR and not a guidance of 25% year-on-year growth in the fifth year, which would be, say, FY ’29.
Ankur Vaid
That is correct. So this is a CAGR guidance approach — CAGR guidance that we are giving and not a fifth year 25% growth.
Alankar Garude
Understood. And the second clarification would be when you say 80-20 split between API and formulation, do you also include the inter-unit sales within the API percentage of 80%?
Ankur Vaid
No, no.
Lalit Sethi
No. In fact, what happens is when the sale is made from the API plant to formulation plant, that sale is not been reported and it’s been adjusted as the enter unit sale-in the consolidated accounts.
Alankar Garude
Got it. My question is, so see, if I look at nine months overall sales growth of 10% year-on-year, even if you assume that 4th-quarter is very strong, we won’t finish the full-year FY ’25 at more than low-to mid-teens overall sales growth. Now in this context, how should we look at the journey from say that FY ’25 growth rate to the 25% CAGR you mentioned. Will it be a step-by journey as we had guided in the past or will there be a strong growth in FY ’26 on this relatively low-base followed by further growth in FY ’27 as the injectable contribution kicks-in.
Ankur Vaid
So, I’ll give a broad level answer to this. Again, what we spoke about that you know the journey we know that how the journey is going to be. And again, it is based on the capacities and the capabilities that we have and the product mix that we have. So maybe you know, I give a rough number, say, on the injectables. So with an asset turnover, considering the asset that we have for the injectables, the asset turnover should give close to around INR500 crores to INR600 crores, you know, base of the asset turnover. And even if I discount it significantly a number to it and say let’s go with the number just now that we’re talking, say, INR300 crores. And if you take it on a — on a INR1,000 crore base, that turns out on a five to five-year period to almost 6% growth.
So you know, again, again that is not going — that 6% is not going to happen on a year-on-year. This will happen again on a gradual basis because as I mentioned in year-one, it is going to be more domestic, followed by penetration into the emerging markets and then more stabilization and ramping-up happening. So even if we take on an 19% growth, this takes you to the 24% on a CAGR number. But the other area which is the oral solid dosage or the new APIs that are — that we are building up on the fermentation side and the ones that are there in the pipeline, they would also be contributing. So if you take-out that when I spoke earlier about 10%, 2%, 3% and 3%, taking it to 18%, there could be a year wherein maybe one of those may not have contributed, but that doesn’t mean that the baseline becomes lower and you build-on an 18% growth or a 20% growth on that. It could be that opportunity maybe work is going on, but it gets translated into potential business in the next year.
So as long as you have the expertise, you have the scale, you have a competitive cost point, you know that transition from a — that opportunity to get would happen. Now it could happen in year-one or it might translate into business opportunity in year two. So that’s how we kind of look at in terms of how do we break-up the API business and then what’s the contribution coming from the oral solid and the injectable space.
Alankar Garude
Understood. And one last question with your permission. For us to track the progress of the facility, I mean, at least we believe that external API sales should be the right metric to look at. Our external API sales have been relatively weak. The growth has been relatively weak for us for the last few quarters now. You did speak about clients taking more time than anticipated. But at the same time, we have also seen one of your competitors, newer facilities getting ready. So in that context, can external API sales growth be relatively slow for a few more quarters?
Ankur Vaid
So there are two points to it. First is that a formulation unit was the first one to quantify Limbassi, which also kind of triggered. So much of our sales to the formulation actually happens through unit three, which is the imbasi. So our procurement is primarily from Limbati side, while unit one customers have not shifted, we’d like to cater to them through our unit one. So facility is not only catering to third-parties, but is also catering to Unit 2, which is our formulation. In terms of client, as I said that this is a continuous work that is going on. Many of the customers have shifted, but there are quite a few customers who are in the process and some who have to take that step.
Regarding the competition,, I won’t comment on that. I think we would just need to see that how the progress happens there and if there are any challenges that come due to that. And I think at different platforms, we’ve spoken in terms of how our competitors’ capacities are and how they are panning up, but you know, I would not want to talk in terms of how they are going ahead.
Alankar Garude
Sir, one follow-up here, Ankur would be, so within that 35% utilization, which Lalitsir mentioned of in this quarter, when you started this facility, got FDA approval for this facility, you would have envisaged a certain captive versus external split. So I mean at this 35% threshold, I mean, can you give a broad indication as to where we are on this external captive split today versus what our expectation was, say, three years back?
Ankur Vaid
So our expectation was to gain more market-share. You know, we would have never thought that let’s target an ex-market through our formulations. You know, the intent is to capture market-share pressively through API, but if it doesn’t happen then through the formulation. So you know, there are certain opportunities in formulation like the growth that we have of 42%, three years back, we would have not built these kind of ramp-ups in the formulation. So the idea is to cater the demand whether to third-party or to our in-house via formulations through the Limbassi facility.
Alankar Garude
Got it. That’s it from my side. Thank you.
Ankur Vaid
Not done this kind of segregation is what I would say.
Alankar Garude
Understood. Thank you.
Ankur Vaid
Thank you.
Operator
The next question is from the line of Parwathi Rai from Wealth Advisory. Please go-ahead.
Parvati Rai
Hello?
Ankur Vaid
Yes.
Parvati Rai
Yeah. Thanks for taking my question. So quick on the follow-up where we just hope that some of these orders kind of have shifted to Q4. So is there a possibility that it might move beyond Q4? And so what I’m trying to ask is, will that grow, so the shifting which has happened from Q3 to Q4, will that move from Q4 to-Q1? Is there a possibility of that as well? I mean, since we are banking so much on a strong quarter because last quarter also we did say that H2 would be much stronger. So that’s where I’m coming from.
Ankur Vaid
So you know, again, H2, we continue to say would be stronger than H1, but we cannot take-away the possibility of anything moving to quarter one. But you know our Jan and so-far our PEM numbers have been pretty good. But again, you know I can’t rule out that possibility and that would always be there, but the way that things are progressing, you know, confident of where we are.
Parvati Rai
Okay. Okay. A quick one. So the other income was quite high during this quarter. So specifically, anything to call-out there?
Lalit Sethi
Basically on account of the investments which we had made, the interest component and the profit on some of the investment which has been in cash.
Parvati Rai
Okay. Okay. And one quick one. So last quarter we did call-out that with respect to the immuno, some client discussions were on in LatAm and possibly materialize within a couple of months. So any update there?
Ankur Vaid
So I’m not sure on that, but I think if it is for the market that I think probably we have taken that opportunity through the formulations.
Parvati Rai
Okay. Okay. And last one, a quick one where you did mention that eight to 10 new products and possibly one or two every year. So two to three products to be launched every year. So if you could give some more color, since we are almost on the last quarter now sitting here. So from a next year perspective, what are those two to three products that — and are we on-time to launch them as an on-track product?
Ankur Vaid
Yeah. So I think we did speak on one of the calls also on this that you know one-product like, it is again a for immunosuppressant for and this had a opportunity. And you know we are we are also working with a company on. So we have just filed our DMF and you know, so that is there. We have couple more products which are at very advanced stages of filing also, which I would expect that maybe in February or March, we would — we would be filing the DMF for that product also. So you know, I would say this year, we would have two products that we would have launched. We have also supplied certain exhibit batch quantities to that customer, but this has the power of opportunity. So the impact of that would happen probably in the next few years. And till that time, we would see how we can, you know, take that product to different markets where, you know that patent is not applicable, but yeah, those are the two products and again for the other products we are at quite advanced stages as well.
Parvati Rai
Great. Thank you.
Operator
Thank you. The next question is from the line of Harshal Patel from Asset. Please go-ahead.
Harshal Patil
Thank you for the opportunity, sir. I hope I’m audible.
Ankur Vaid
Yes.
Harshal Patil
Sir, though you’ve been alluding to, we should be looking at it more from annual basis or a nine monthly basis. So this is basically just for my understanding, I just wanted to know for this quarter, both the API as well as the formulation sales have actually declined on a sequential basis and we’ve actually had a gross margin expansion. Sir, I just wanted to understand if I’m missing anything out here. This is just for my understanding purpose, sir.
Ankur Vaid
So you’re saying with respect to quarter — previous quarter or
Harshal Patil
With respect to previous quarter, Q3 on-Q2.
Ankur Vaid
On the gross margin level?
Harshal Patil
Yeah.
Lalit Sethi
I think we need to look into this and get back to you,.
Harshal Patil
Sure, sir. Sure, sir. Okay, sir. That was it from my side. Thank you.
Ankur Vaid
Thank you.
Operator
Thank you. The next question is from the line of Nikunsh Mehta from Magma Ventures. Please go-ahead.
Nikunj Mehta
Hi. Yeah, hi. Thanks for the opportunity. And sorry for again on the API point. One of the points which you mentioned in this quarter was because of the delays in order — order bookings from the customer side. And typically that happened towards the end-of-the calendar year. So my question to you was that if I look at the last quarter, in the base business also, there was a 20% decline in the API business. So we are sitting on a lower base. And if I’m not wrong, last-time also during this time, there was a side transfer which our couple of clients was kind of going through and we were expecting that in the second-half — in the second-half, we’ll see the improvement to kind of come through. So just tagging these two points, we were expecting the second-half to be on a third-party sales, a stronger growth on the API side, which has not happened. So is it that the end-market itself is seeing some sluggishness or are we losing some market-share on the third-party side? Any color? Because you mentioned that the pricing has not moved. So just wanted to get the sense on that part.
Ankur Vaid
So if you see the impact of the API not being sold to that specific third-party, I think we spoke about it more in the — in the last quarter and the impact is something that we saw that it happened in March. So this was — my sense is it happened from December to February. But that being said, I think if you see the formulation sales growth that has happened, you know, the kind of year-on-year rise that we’ve had on the formulations. As I mentioned earlier that there are certain markets that we would go through the API and if not them to the formulation. So the overall pie is the same. It is just that we are addressing that pie. Certain markets, we have moved in through the formulation route and certain markets, we continue to do it through the API.
And that’s why if you would look at on an overall API basis, that comes out to be 10%. And our H2 numbers would continue to be higher than the H1 numbers and that’s how we are looking at also. And if the H2 numbers are higher, that means that the quarter-four numbers are bound to be higher. And, even the API growth or formulation growth translating to API, I would see that, that number moves to the numbers that we are looking at.
Nikunj Mehta
Understood. Understood. So you are saying that there has been no market-share loss or the end-market has not seen any — because APIs also are very cyclical. So you don’t see any cyclical downturn or any market-share loss from our side, which has happened on the API side.
Ankur Vaid
No, no, because these are not cyclical APIs. The nephrology products, you have to take a patient take irrespective of what happens. They have to take it for the rest of their lives. So there is no cyclical impact here. And again, when you talk about formulations, maybe injectables could have a cyclical impact, but when the procurement comes for the formulation partners, we don’t see that cyclical impact happening. I think the lumpiness that comes to us is primarily in terms of how our formulation partners are targeting the market, what’s the kind of inventory they have? So that lumpiness comes to that, not on account that the product itself has a cyclical nature.
Nikunj Mehta
Understood. Understood. And just from my understanding now, since we have the full-year in base in terms of the formulation ramp-up and the sales — the third-party sales to that extent. So for — typically for a 20% kind of overall — overall growth which we are kind of looking at, we need our third-party API to grow at 10 odd percent and maybe the formulation run-rate assuming 43% which is there which stays. So then only we’ll be able to reach that 20-odd percent number, which we are kind of aiming at considering even the injectables ramp-up to that account. So that’s the understanding correct. That’s how we should look at that the third-party API sales will have because it’s a mature business, we will be growing in-between 10% to 12-odd percent and the formulation is something where the where since we are ramping-up in terms of capacity should be north of 40-odd percent to make that 20-odd percent growth at a company-level. Is that a fair understanding?
Ankur Vaid
See, I had given in terms of how the breakup of the 18% kind of growth comes in. And you know there are certain opportunities which we already have to our strong order book position. There are certain opportunities that we are working and anticipate to convert in this quarter. So, you know and that number whether gets translated from API or formulations, you know, I won’t be able to comment at this time.
Nikunj Mehta
Okay. Okay, okay. No. And sir, last question in terms of volume terms of our API, in terms of volume, what percentage goes to formulation?
Ankur Vaid
So I don’t think we have a number like that of the total capacity that we make, how much goes to formulation. I would say that depending upon, we have the formulation percentage and you know, based on that, one can translate into the overall sales that we have done, maybe on a value basis, you know, considering that it is around the gross margins that are there on the API, on the formulations, one can figure out from that what is the value-based contribution coming. On a quantity basis, you know, we won’t be able to have that information right now.
Nikunj Mehta
Understood, sir. Thank you and all the best.
Ankur Vaid
Like say like say, if you talk about they are in multi-ton. But if you talk about several or, they are at KG level basis. So you know every product would have a different configuration. So not sure if we’ll be able to do that at this point.
Nikunj Mehta
I understand sir. Thank you.
Operator
Thank you. Thank. Ladies and gentlemen, due to time constraints, this was the last question. I now hand the conference over to the management for their closing comments.
Ankur Vaid
So thank you everyone for joining on our Q3 FY ’25 earnings call. We hope we have been able to address all your queries. For any further information, please get-in touch with us or FDA, our Investor Relations Advisors. Thank you once again. Have a good evening.
Operator
Thank you. On behalf of JM Financial, that concludes this conference. Thank you for joining us and you may now disconnect your lines.