Aarti Drugs Limited (NSE: AARTIDRUGS) Q4 2025 Earnings Call dated May. 07, 2025
Corporate Participants:
Adhish P. Patil — Chief Financial Officer, Chief Operating Officer
Unidentified Speaker
Analysts:
AM Lodha — Analyst
Rashmi Shettil — Analyst
Nitesh Dath — Analyst
Vanil Desai — Analyst
Aman Goyal — Analyst
Ankit Gupta — Analyst
Bhumika Jain — Analyst
Sanika — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Drugs Limited Q4 FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Adish, COO and CFO of Drugs Limited. Thank you, and over to you, sir.
Adhish P. Patil — Chief Financial Officer, Chief Operating Officer
Thank you. Good morning, everyone. It is my pleasure to welcome you all to the earnings conference call of Limited. We thank you for taking the time to join us today to discuss our financial and operational performance for the 4th-quarter and full-year ended 31st March 2025. Joining me on this call are Mr Harshit, Joint Managing Director; Mr, Managing Director of Private Limited and our Investor Relations Advisor, SGA. We hope that you have had the opportunity to review our financial results and investor presentation, both of which have been uploaded on the stock exchanges and on our company website. In Q4 FY ’25, revenues grew by 9% to INR679 crores with EBITDA margins improving to 14%.
During the quarter, we witnessed strong global demand for API, driving a 15.5% growth in volume, which is primarily led by exports, benefiting from improved operating leverage and stable input cost, we achieved around 14.5% EBITDA margins in the standalone business. This is a great improvement over the last few quarters wherein margins have remained between 11% to 12%. We expect our consolidated margin of 14% to further improve in the coming year with our new facilities up and running in FY ’26. PAT stood at INR653 crores, a growth of 33% year-on-year with PAT margins at 9.2%. For the full-year FY ’25, it was a challenging year, beginning with muted global demand, elevated raw-material cost, which impacted overall performance.
Greater-than-expected market volatility, particularly to the falling input prices, led to a 5% year-on-year revenue decline. Despite the challenges, the company improved cost-efficiency and operational discipline over the year, which helped maintain our EBITDA margins at 12.6% on annual basis. Margin performance improved significantly in second-half of FY ’25, driven by stabilization in input cost. For FY ’25, the decline in revenue from the API business of 4% is not indicative of structural weakness, but rather reflected a transient correction in global pricing and inventory cycles. Despite this, the company successfully maintained operational momentum and continued to focus on strategic execution across all segments. For the full-year, one of the most significant positives for the year was marked by the improvement in gross margins, which improved over 200 basis-points to 35.8%.
This improvement is primarily attributed to the normalization of the of input cost during the second-half of fiscal year and following a period of inflationary pressure in raw-material procurement. Looking-forward, as mentioned earlier, we anticipate further improvement in gross margins driven by multiple factors. This include an expected uptick in selling price realization as global API demand normalizes, enhanced capacity utilization and higher-value export opportunities. Also, I would like to highlight two important strategic developments that signify our focus on the regulatory compliance and sustainability. During the quarter, the company entered into a shared subscription and shareholders agreement with Green Power Private Limited and Green Power 9 Private Limited. Through this agreement, the company will acquire 26.25% equity shares and voting rights along with compulsory mix convertible debentures in Green Powered 9 Private Limited and SPV that will develop and operate 24.4 megawatt peak solar power plant. This plant will partially supply the company’s power needs both in the state of Maharashtra and Gujarat, reinforcing the commitment to renewable energy.
The total investment committed amounts to INR8.05 crores to be invested in a phased manner. We are also pleased to share that the company received letter from USFDA on 14th February 2025, which has officially removed our API manufacturing facility located at Karapur from import Alert 66-40. This development allows us to resume exports to the US market from this facility. The key APIs cleared for export include hydrochloride, titrate, hydrochloride, silicoxin and. This marks an important regulatory milestone for the company and is a testament to our unwavering commitment to global compliance and maintaining high-quality standards across our manufacturing operations. Now we’ll give update on the ongoing capital investment. The capex incurred during full-year of FY ’25 amounted to INR177 crores. Recently, to our long-term strategy of deepening backward integration and enhancing cost competitiveness, the company has made substantial progress on its greenfield project at Saika, Gujarat, dedicated to backward integration of our anti-diabetic product along with few more intermediates has commenced trial production, which is expected to stabilize soon during current quarter. This is anticipated to contribute meaningfully to the company’s profitability over a long period of time. This development Is expected to meaningfully reduce our reliance on external raw materials, improve supply-chain reliability and drive incremental margin expansion through internal sourcing of key imports. The Tarapur greenfield project had certain initial operational challenges which have now been largely resolved, the company remains focused on a gradual production scale-up targeting over 700 tonnes per month-by the month of June 2025 and aiming to reach a cumulative capacity of approximately 1,500 tonnes per month-by the end of FY ’26. These initiatives are expected to reduce the cost along with the expansion in the profit margin and the top-line growth. The broader operating environment continues to present some geopolitical challenges and the company remains focused on improving profitability through disciplined cost-control, efficient supply-chain management. These initiatives are expected to collectively strengthen the business’s operational resilience and position it for sustainable long-term growth. With this, we can now begin the Q&A session. Thank you.
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 touchstone 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 a moment while the question queue assembles. The first question is from the line of AM Lodha from Consultant. Please proceed.
Questions and Answers:
AM Lodha
Hello. Good morning, Mr Patil. Am I audible, sir?
Adhish P. Patil
Yes, yes, please.
AM Lodha
Sir, I have two questions. One is relating to export and second is relating to expansion. Now I am coming, sir to the first question export. As per your later dated 14th February ’25, the US-FDA has removed the alert of 6640 and from your presentation, I could guess that 11% export to USA, North-America. So just I wanted to know North-America, 11% export to North-America. Just I wanted to know, after removal of this import alert, can the company improve the export performance from your Tarapur plant another question relating to the export that from presentation, I could guess that in top-10 countries that Pakistan also includes. Recently the government of India has prohibited the export to Pakistan directly and indirectly. So what is the percentage of export to the Pakistan? These are the two questions relating to export side.
Adhish P. Patil
Okay. Okay. Yeah. So your first question was yes, our North American exports are around 11%, but with — that includes three countries, Canada, US and as well as Mexico. Now with the clearance of USFDA, the sales — the API sales to US should ideally increase. However, it will have some gestation period of say 12 to 24 months because all the projects have been reinitiated. There are couple of clients who are already active and they will also launch their product using our API. Another thing is this clears out the stigma amongst the European buyers. We have a very big potential for selling our APIs to European market, which was detailed because of this import alert issue. So definitely clearance of USFDA import alert will give us lot of impetus in improving our regulated sales. Having said that, it will take — it will take some decision period, but it will improve for sure.
And it will be a high-margin business as compared to our current ROW export sales. And regarding the question of Pakistan, it is a very — it’s a relevant question of today — of today. So our exports to Pakistan is a little less than around 2.9% or so. Definitely, we are keeping a close watch on the progress of the trade ties between India and Pakistan. That will impact this 2.9% of the sales, which will try to root to some other countries because as you see that the market is quite big and sometimes we fall short of production capacity. So we will be able to divert that material to some other countries. Sir. Second question is relating
AM Lodha
To. Now interrupt Mr Madam, that are the first question only relating to export. Now I am asking about the second question related to expansion. Thereafter I will go in the queue. No problem. Sir, second question, you invested in a Saika plant. How much money has been invested in Saika plant and on full capacity utilization, how much that plant can generate the? Similarly, we have invested in Tarapur, the greenfield plant, how much money has been invested and how much sales can be generated over a period of two, three years on full capacity utilization that and out of that INR600 capex which we have undertaken in ’22 2022, how much money is still to be spent? That is second picture of that.
Adhish P. Patil
Okay. So both Saika as well as the Tarapur greenfield projects both the projects are ranging between 180 to INR200 crores each. However having said that currently both these projects are only in their Phase-1. So when I say Phase-1, we are utilizing only two-third of the land parcel. So one-third of the land parcel will still remain empty for future expansion, for future production lines. And initial capex, greenfield CapEx always takes more money because we have to do plot development, all the ancillary activities like ETPs, utilities, so all these things, warehouses. So all these common investments have been done already in the greenfield phase.
So the second round of expansion, which will come in this area in these locations, we have much higher asset turn. Having said that the current — the Phase-1, the Phase-1, Taika, we expect somewhere around INR200 crores, but then I would say about around 50% of it would be our captive consumption. So that will improve our gross margin rather than improving the sales, whereas the Tarapur one, that has a full-scale potential of around INR250 crores to INR300 crores depending upon the prices of the API, which changes dynamically. So that range is around INR250 crore to INR300 crores per annum.
AM Lodha
And what about the capex of the INR600 they announced in 2022, how much it seems to be pending?
Adhish P. Patil
Yes, most of it is done. However, however, the one anti-diabetic expansion line, which we are planning at INR600, that capex was deferred and we might pick-up that maybe probably next in couple of years.
AM Lodha
Okay, sir. Thank you. I will rejoin the queue sir.
Adhish P. Patil
Thank you.
Operator
Thank you. The next question is from the line of Rashmi Shetti from Dolat Capital. Please proceed.
Rashmi Shettil
Yeah. So Adish, one-line deferred. So what will be the capex guidance for FY ’26 and then how should we look at it in FY ’27?
Adhish P. Patil
Yeah. So this year we were able to compete around INR177 odd crores of capex. So what we are foresee — so going-forward, on a consolidated basis, we are also looking to invest into registration of oncology products in the formulation division and we are also planning for a probable another block — production line expansion, which will cater to export market in formulation. And apart from that, for standalone companies also, we have visibility of around roughly around INR200 crores of capex. Not everything will be taken-up in this 2026 itself. So I would say roughly around INR150 crores to INR200 crores will be the range of capex which we might do in FY ’26.
And then again similar kind of amount probably in FY ’27 when more newer products are identified? Okay. And how much it would be dedicated for this line out of this 1500 so line that project, if we include in this it — it should be roughly around INR100 odd crores. Exactly, we don’t have the estimate now, but roughly around INR100 crores or something.
Rashmi Shettil
Okay. Okay. And now you know, if you can also say like In FY ’25 as a whole, what was the rate variance versus FY ’24? And what was the volume growth on an annualized basis in FY ’25 versus FY ’24 in the API segment?
Adhish P. Patil
Okay. Under the volume — the entire annual volume, I don’t have it right now, but as far as the quarter is concerned, it’s year-on-year March quarter, what we saw that the volume growth in domestic market was relatively stable. It wasn’t that much. However, we had a very-high — it’s almost in the tune of late 20% growth — volume growth in the export market. That is what led the entire volume growth of around 15% in this quarter.
Rashmi Shettil
Okay. And what about the
Adhish P. Patil
First-half of this financial year FY ’25, we saw that the export demand was very weak. As we had pointed out due to the elections, the tenders were less. So in general, our export API demand was very weak in the first-half of FY ’25. Correct.
Rashmi Shettil
And what about the rate variance?
Adhish P. Patil
Rate variance we have seen around minus 4% to 5% year-on-year for the quarter for the quarter.
Rashmi Shettil
Okay. And quarter-on-quarter it is stable.
Adhish P. Patil
Quarter-on-quarter almost stabilized, almost stabilized, hardly a percent or million.
Rashmi Shettil
Okay. So API segment, basically we have seen some sort of decline in FY ’25. So in FY ’26 with the capacity utilization picking-up and also with the demand revival, what kind of growth can we anticipate you know for the entire year?
Adhish P. Patil
So going-forward, we are definitely aiming for a double-digit growth and we are hoping that almost generally everything should come from the volume growth, not the rate growth.
Rashmi Shettil
Okay.
Adhish P. Patil
And mainly it will be on the account of the new expansion of the new product-line, the new capacities what you have put up that should drive the growth.
Rashmi Shettil
Okay. And the rate variance is more or less likely to be stable or it is likely to be in a declining stage only versus FY ’25.
Adhish P. Patil
So with respect to FY ’25, probably only the first two quarters, first two quarters, that is the first-half, I will say roughly around 3% to 4% negative rate variance.
Rashmi Shettil
Okay,
Adhish P. Patil
In the second-half should not see any negative rate variance.
Rashmi Shettil
Okay, got that
Adhish P. Patil
It all depends if the raw-material prices again start going up, if there is a movement in crude, then that negative rate variance won’t come.
Rashmi Shettil
Okay. And my second question is on the specialty chemicals. There also we have done a brownfield expansion and all. And earlier we anticipated that the sales potential to reach is around more than INR200 crores to INR250 crores in two years. So where are we now? We have done around INR130 crores for this year. So in next two years, will that number be achievable or you feel there are some challenges over there?
Adhish P. Patil
So we should be able to achieve that. What happened in FY ’25 is in the mid of the year, we took a call — we were manufacturing one particular chlorocel furnishing product in match manufacturing mode. We had shifted to a newer process. But even though the quality parameters are matching, but the performance — in the performance test, the what you call the user test, there were some issues in the final application of the product. So that is why we inverted back to the batch manufacturing process. In fact, we were making a lot of losses in the new process which were reverted in the — in the mid of FY ’25 that also led to the increase in the margin in the second-half of FY ’25. So — but now we have gone in the batch manufacturing, we have already scaled-up to 100 and in this — by June quarter, we will be scaling up to 200 tons per month.
So it is on-track. So we will be improving on the segment going-forward. And what we feel is that in the view of ongoing tariff for between US and China, it is a line probably where we might have some — we might get some benefit as far as exports to US is concerned. So we would like to explore that area as well.
Rashmi Shettil
Okay, got it. And lastly on the margins, you know, any guidance we have already reached now 13.8% in this quarter. So for FY ’26, we will be able to sustain this 13.8%, 14% and thereafter expansion in FY ’27 or you feel that this quarter is more like in aberration benefiting with the multiple factors and we would probably in the range of 12% to 13% in FY ’26.
Adhish P. Patil
Okay. So we did not observe any such specific in this particular quarter, it was purely based on good demand, volume growth on the API side. So in API side, from the standalone, API plus and plus intern, we were able to clock 14.5% EBITDA margins. So we are hoping that in the standalone company, we’ll be maintaining that around at least around 14% to between 14% to 15% we’ll try to maintain. And with the scale-up of our acid plant and reducing the losses over there, it should be relatively, you know, I would say, easy to maintain an EBITDA margin of 14% to 15 at standalone level and for — and for the formulation level, I will — Visha will throw some more light on that., can you explain the margins in the formulation front?
Yeah, sure. So on the formulation side, that is the side also, in FY ’25, we had a dip in sales because of lower drop production volumes available since we were doing some brownfield expansions and also ramping-up regulatory audits. But in the current financial year as we are expecting higher volumes and increase a sale of about mid 20% levels. So with that, our EBITDA level should also be in the range of 14% to 15% in chemicals as well. So on consol level, we can assume 14% sort of in FY ’26 for the consolidating both the segments. And we’ll try to achieve that.
Rashmi Shettil
Okay. And like you mentioned in formulation, you’re saying that you are targeting around 20% growth. Is it correct what I heard?
Adhish P. Patil
Yeah, yeah. So we are targeting about between 20% to 25% of revenue growth in formulation.
Rashmi Shettil
Okay. I have more questions. I’ll join back-in the queue. Thank you
Adhish P. Patil
Thanks.
Operator
Thank you. The next question is from the line of Nitesh Dath from Capital. Please proceed.
Nitesh Dath
Hi, sir, thanks for the opportunity. I have a question on the ongoing trade war between US and China. Just wanted to understand what kind of benefits can it bring for us in terms of increasing volume and both better realization for APIs? And have we already starting — started seeing some of these trends in terms of increasing prices or that you can pass to customers.
Unidentified Speaker
Yeah. So it is frankly, it’s been very uncertain because even the US administration is changing the policies by making newer and newer deals. So as of now, it is very uncertain to that where it will be headed towards. But our general sense is that if Chinese products have relatively more tariff than India, we are just say even 10%. So that gives us — gives us clearly 10% advantage for the pricing of our products. So we become more competitive by 10%, which is quite a big margin frankly for Indian manufacturers.
Having said that, what trained what we have observed is that for most of the old-age molecules, the API is being sold to the USFDA formulation facilities which are outside USA. So it is not the API which will face the tariff but the formulations which will face the tariff. And because of that, if for API manufacturers, it won’t make much of a difference, frankly speaking. So however, the chemical line of businesses, chem products, maybe some intermediates, which are going from China to US directly there we can you have some benefit in terms of competency and we can get more market-share. So on the last part, do you — are you referring to intermediates, KSN, etc. and in that case, these
Unidentified Speaker
Might also get supplied to, let’s say, API manufacturers outside US who will in-turn supply to formulations manufacturing units outside US. I’m talking about the customers within the US itself.
Nitesh Dath
Okay. Okay. Got it. Thanks. That was my only question.
Operator
Thank you. And the next question is from the line of Vanil Desai from Turtle Capital. Please proceed.
Vanil Desai
Hello. Yes. Am I audible?
Adhish P. Patil
Yes. Yeah.
Vanil Desai
Hi. So my question, Adish, is that you know, I think in the last call and previous calls, we have guided a 15% plus volume growth in FY ’26 and 4%, 5% of negative rate variance in the first-half because of the higher base in the first-half in FY ’25. So question here is that this quarter we have done 15% volume growth and we are scaling up both in Saika and Tarapur you in — going-forward. So should we assume that we will continue to grow on Q4 base you know from the next quarter onwards throughout the FY ’26, is that right way to look at it?
Adhish P. Patil
Yes, ideally speaking, we should be able to the Q2 would be even easier for us because by that time both the facilities should ideally go in-full swing. So Q2 will be easier. Q1, Q1 also, frankly speaking, should benefit from it because though half of the Q1 is gone, today we are at on 7th of May, but definitely the second-half of Q1 will have the benefit of that expanded production from the greenfield projects?
Vanil Desai
Okay. So my question is, should we consider Q4 as a base in terms of API sales and then continue to grow from here quarter-after-quarter as we ramp-up?
Adhish P. Patil
Yeah. The first target would be to maintain such volumes or as far as our normal API markets are concerned. And the addition of new production lines, the new products itself, that will give further impetus in growth — overall growth of the company.
Vanil Desai
Got it. Got it. Second question is on the gross margin. So our gross margins have actually not expanded or even maybe flattish or slightly lower Q-o-Q. So you know it’s around 35-odd percent. So how do we see gross margin trajectory going into FY ’26, you know, with all the backward integration and better product mix coming in.
Adhish P. Patil
So as far as the standalone is concerned, definitely we saw some deep QoQ on gross margin front, but that was mainly because we get annual discounts from three of the vendors that was accounted in December quarter. So if I remove that, the gross margins are more or less maintained. Definitely there is a difference of around 0.5 crores, but that also depends on product mix and all. So more or less it has stabilized is what we are seeing. And the further way of increasing gross margin would be twofold. One is on the sales side that is by increasing more regulated sales. And on the input side, it would be the backward integration which is happening now. So both these factors will also help us to improve the gross margins further.
Vanil Desai
So one thing, Adish, I’m not able to kind of add-up is that we are thinking that next year our gross margin will improve. Improve and the sales volume will kind of — again, capacity utilization will improve, volume will go up, so operating leverage will flow-through. So ideally, FY ’26, our margin should be better than what we ended FY ’25 Q4 FY ’25 with. Isn’t that the right way to look at it?
Adhish P. Patil
Miss you’re talking the annual number what we have achieved in terms of margin or just the Q4?
Vanil Desai
No, no Q4 also, I’m saying.
Adhish P. Patil
As far as the annual number is concerned, that is about 12% or 12% or something percent, that will definitely improve by of percent is what we anticipate. So we are targeting around 14% to 15% and that will be our internal target to — for EBITDA margins on a consol basis.
Vanil Desai
Got it, got it. Yeah. Thanks. That’s it from my side. Thank you.
Operator
Thank you. The next question is from the line of Aman Goyal from Axis Capital Securities. Please proceed.
Aman Goyal
Good morning, sir. Congratulations for great set of numbers. Sir, my first question is related to the revenue guidance. Can you guide the revenue for FY ’26 and ’27? Yeah. So frankly speaking, we just taking into account that there might be some 3%, 4% negative rate variance in the first-half of FY ’26, we still are optimistic of achieving a double-digit growth as far as revenues are concerned on a CAGR basis for next two years. So at least. I mean, the thing is initially — our initial target would be to cross 3,000 crores on an immediate basis and then from there we will try to reach 3.5 thousands that is, that is purely based on on volumes and we are not considering any rate improvement in that. Okay. So sir, basically this growth will be majorly coming from the API, right? It will come from API as well as it will come from formulations as well.
Okay, sir. And the EBITDA margin guidance, if you could 14% to 15%, right?
Unidentified Speaker
14% to 15% is the stable guidance what we are giving you.
Aman Goyal
Okay, sir. Thank you. Thank you. That’s all from my side.
Operator
Thank you. Thank you. Thank you. The next question is from the line of Ankit Gupta from Bamboo Capital. Please proceed.
Ankit Gupta
Yeah, thanks for the opportunity and congratulations on good set of numbers. So my first question was on, Abesh, you said that the INR622 crore kind of debt that we have on the standalone basis for the next few quarters, we will try to grow on that because normally Q4 is our best quarter, which we see historically it has a relatively high best. Great. So from this, please.
Unidentified Speaker
So yeah. So the thing is Q4 is definitely the one of the best and Q2 is also quite decent. So our first target would be to maintain this base going-forward maybe, maybe for the existing products and existing line, there might be a slight dip here or there, but then the new products will be added which will also give lot of growth on the overall.
Ankit Gupta
Sure, sure, sure. Okay. And I was just reconciling the numbers. If you see next year, we are expecting a good double-digit volume growth in our existing business. Our new plants will start and hopefully specialty Chemicals will also ramp-up. Formulations we are saying 20% 25% growth. So on a consolidated level, do you think we can target at least 20% kind of revenue growth next year?
Unidentified Speaker
No, actually the formulation as of today is around — roughly around 10%, 12%, so it will mainly be on the 10% to 15% kind of growth, 10% to 15% on the overall basis.
Ankit Gupta
So on an overall basis, you’re expecting 10% to 15% kind of growth despite new products also coming in as well as the expansions also coming in.
Unidentified Speaker
Yes.
Ankit Gupta
Okay, okay. And the second question was on the margins front. You are saying hopefully we should start seeing some improvement in gross margins also and with volume growth and revenue growth coming in, do you think there can be some benefit of operating leverage it can flow-through next year and our margins can be higher than 14% 15%?
Unidentified Speaker
Yeah. So gross contribution, we don’t see much of a movement from here on, except there are two factors like regulated sales and backward integration, which both will happen in due quarter of time. So that will — contact us a little longer. Backward integration will happen much quicker in the — in two quarters itself, but the regulated sales that is a little longer proposition. As far as the manufacturing — the other expenses are concerned which are — which player big role in. There in power and fuel, we envisage that we might be able to gain around 0.5%
Unidentified Speaker
Benefit in EBITDA margins because of improvement in power and fuel because we will be going-in for renewable electrical units from a solar power plant that will drastically reduce our power cost. The full — so full and plus we are also going-in — we have already gone for a boilers. So wherein we will be producing some amount of electricity, which will be captively consumed. So all put together on overall — on a full-year basis, the potential is somewhere between INR25 to INR30 crores of sales in power and fuel. However, for FY ’26, we feel around 10 crore to 15 CR might — of benefit might come in this year itself. And from next year onwards, it should be around INR25 crores to INR30 crores.
Ankit Gupta
Okay. Okay, okay. And the last question was on, you said that on immediate basis, we won’t reach INR3,000 crore kind of revenue. So FY ’27 is the year that we can see if we assume that at least know we should be the — just will target to — yeah, we were pointed. FY ’26 seems a bit difficult to achieve is what you were saying INR3,000 crores revenue. FY ’27. Okay, okay. Thank you very so much.
Operator
Thank you. The next question is from the line of Bhumika Jain from Advisory. Please proceed.
Bhumika Jain
Am I audible, sir? Thank you. So my question was that you have mentioned that product under development under the product under pipeline. So can you explain which products are you planning to launch in FY ’26 or in the first-quarter of FY ’26? Yeah. So the major products where you see that our new volumes will come from?
Unidentified Speaker
One is product. Then we foresee volume growth in as well because they increased production, plus we see a volume expansion in because we have increased the production from around 245 to 330 tonnes per month. Then the new products which we are launching salicylic acid, which we have launched last year, but the meaningful contribution is — will come only in this year. And then there are two other products in methalamines, and TMA, which we’ll be selling outside. DNA would be captively consuming. So any formulations, Visha, can you highlight some of the oncology products yeah. So in formulation, we are expecting a few approvals on the diabetic and cardiac products in Q1 and Q2 of FY ’26.
Adhish P. Patil
And so on the DPV4 inhibitors as well as some of the anti-cognant drugs we would be launching. And in the later half of the financial year, we would be getting approvals for at least two oncology drugs, so we would also plan to launch those in by end-of-the financial year in regulated markets.
Bhumika Jain
Okay, okay, sir. T
Operator
Hank you. The next question is from the line of from Dolat Capital. Please proceed.
Rashmi Shettil
Yeah, thanks for the opportunity again. On the working capital, you know, it can be seen that there is an increase in your receivables days and inventory days and creditor days. So if you can explain on that and whether it will remain at the same level in next — for next two years, okay. Inventory days actually have improved that way.
Adhish P. Patil
But debtors definitely looks inflated if you — the main reason is the increase in the sale-in the last quarter, you know, our data cycle is typically around 90 days. So if we sale more in the latest quarter then and if you take the first four quarters of quarter’s revenue then on that number it looks higher. But if we multiply the Q4 into four and take that as an annualized sale, then it will look in-line.
Rashmi Shettil
Okay. And it would remain more or less at these levels only if you want to model in for next year,
Adhish P. Patil
If you are able to maintain this level of sale, it’s like the standalone sale of INR624 and the of 378 per quarter. If you continue that, then it will remain same.
Nitesh Dath
Okay. Okay. And one question on the gliptins. What is the update on that? Earlier we were focusing on build-up lifting exports and lifting more India-centric. So what is happening over there, whether we are able to pick-up the sales or not?
Adhish P. Patil
No, we are not completely able to pick-up the sales of these teams yet. Whatever anti-rabetic growth what we are showing in our numbers is accounted because of 4 million., we are selling into local markets., we are in the process of making DMF. We are further improving the cost, the process of the Vilda meeting because if we have improved process, then we should be able to quickly grab the market of meeting in export market because the pricing has corrected quite a bit in those products. So we have to be very much cost-competitive to capture the market.
Rashmi Shettil
Okay. And on — lastly on the, currently I think we are just selling in the other emerging markets and India. So in that particular molecule, are we going to target regulated markets that is US and what about — what is the update on European markets also?
Adhish P. Patil
Yes. So in, we do have European approval, we have CEP for the product. However, the European sales haven’t picked-up much, but there are few other geographies in the world, which is semi-regulated. There we — we just have got into those markets and the sale is improving on quantity basis for net falling for us in those markets. So the next target is euro because we already have the acquial at the plant-level and the second target would be making our plant USFD approved. Our first — our first target was to clear our import a lot of Karapur facility, which we have this year and that gives us lot of confidence to file for the US payment.
We are already in the process of making US payment. So very soon we’ll be filing the US payments and trying to — and we will try to trigger the USFD audit for the phone facility.
Rashmi Shettil
Okay, okay. Got it. Thank you. That’s it from my side.
Operator
Thank you. The next question is from the line of Sanika from Sapphire Capital. Please proceed
Sanika
Hi, sir, can you hear me?
Adhish P. Patil
Yes.
Sanika
Hello. Yeah. So in one of our interviews, we had said that we are targeting INR4,000 crores of revenue by FY ’27. Are we still on-track for that?
Adhish P. Patil
No, actually we had a target of INR4,000 crores. The only thing is, because of price variation, we have revised on that target. So right now, on a pessimistic level, we are hoping that we will first reach INR3,000 crores plus by FY ’27. And from there on we will try to achieve more and then try to reach INR3,500 crores.
Sanika
Okay, okay. Okay. Okay. Thank you sir thank you.
Operator
As there are no further questions, I would now like to hand the conference over to management for closing comments. T
Adhish P. Patil
Hank you, everyone, everyone for joining us today on this earnings call. We appreciate for your interest in Limited. If you have any further queries, please contact H.J. our Investor Relations Advisor or us directly. Thank you.
Unidentified Speaker
Thank you. Good to you.
Operator
On behalf of RT Drugs Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you