Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Aarti Drugs Limited (NSE: AARTIDRUGS) Q4 2026 Earnings Call dated May. 18, 2026
Corporate Participants:
Ardish Patel — Chief Financial Officer
Harit Shah — Director
Analysts:
Shashank Goyal — Analyst
Sajal Kapoor — Analyst
Unidentified Participant
Resham Jain — Analyst
Presentation:
Operator
Ladies and Gentlemen, good day and welcome to RTE Drugs Limited Q4FY26 earnings conference call. 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 are not the guarantees of future performance and 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 Start and zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Aadish Patil, COO and CFO from Aati Drugs Ltd. Thank you and over to you Mr. Patil.
Ardish Patel — Chief Financial Officer
Thank you. Very good morning and welcome to the Q4 and FY26 earnings conference call of RT Trust Limited. Joining me today are Mr. Harshit Soula, Joint Managing Director, Mr. Harid Shah, Hold Time Director, Mr. Vishwa Sawla, Managing Director of Pinnacle Life Science Private Limited along with our Investor Relations Advisors SGA. We trust that you have had the opportunity to review our financial results Investor presentation for the quarter and Full year ended 31st March 2026 which have been uploaded with the stock exchanges and are also available on our website.
Let me start by outlining the key business and financial highlights for the period. FY26 was an important execution year for RT trucks as we moved from the investment phase into into the operational scale of faith. From a broader industry perspective, FY26 remained challenging due to multiple macroeconomic and geopolitical uncertainties including global trade disruptions, trade tariffs and GST changes and pricing volatility and towards the end of the FY26 by elevated input cost, crude and gas based raw material supply chain constraints due to the West Asia War.
During the quarter, freight, packaging, utility and energy related cost also remained elevated while availability of certain key raw materials remained inconsistent at various points. Despite a challenging operating environment for the industry, the business exited the year on a much stronger footing with a sharp sequential recovery in Q4FY26 operational initiatives such as process optimization, alternate sourcing strategies, energy efficiency measures and tighter planning helped us mitigate part of these pressures and ensure continuity of operations.
Consolidated now we’ll talk about Consolidated Financial Highlights Q4FY26 Revenue stood at Rupees 721.1 crore as compared to Rupees 678.6 crore in Q4FY25 and Rupees 602.9 crore in Q3FY26 reflecting a growth of 6% year on year and 20% quarter on quarter respectively. EBITDA stood at Rupees 96.6 versus 95.2 crore in Q4FY25 and rupees 56.3 crores in Q3FY25 indicating flattish year on year growth and a growth of around 72% on quarter. On quarter basis, EBITDA margin stood at 13.4%. PAT stood at rupees 55.3 crore as compared to rupees 62.8 crore in Q4FY25 and 40.5 crore in Q3FY26, a degrowth of 12% year on year and up to 36% Q on Q increase.
That margin translated to 7.7% for Q4FY26. With respect to the standalone business highlights for Q4FY26 revenue stood at rupees 631.7 crores versus rupees 623 crore in Q4FY25. Standalone business contributed around 88% to the consolidated revenue. 63% of the standalone revenue came from the domestic market and 37 from the export market. Domestic revenue grew by 7% year on year whereas export revenue declined by 7% year on year. Within the API business, the antibiotic therapy therapeutic category contributed around 37.8%, antiprotozoe around 19.6%, anti inflammatory around 11.9%, anti diabetic 15%, antifungal around 10% and the rest contributed around 5.7% to the total API sales.
Now let’s talk about formulation segment Highlight revenue from formulations stood at rupees 91.3 crores compared to 64.8 crores in Q4FY25 up by 41% year on year basis exports contributed 69% to this revenue. For FY26 formulation revenue was rupees 330.5 crore compared to rupees 284.9 crore in FY25 up by 16% with exports accounting for 65% of total formulation sales. Volume growth in the domestic market remained healthy and we witnessed momentum in select non antibiotic and export led products. Export markets, especially formulations emerged as a key growth driver supporting overall business stability as highlighted in Slide 10 of our investor presentation, RTRUST has consistently delivered positive volume growth over last five years despite sharp pricing corrections across the industry.
While this pricing pressure impacted realizations and top line growth across the sector, our ability to sustain volumes and maintain customer relationships reflects our trust with the clients. Encouragingly, pricing trends started stabilizing from September 2025 onwards and this recovery strengthened further during Q4 FY26 supported by increasing crude prices and is expected to improve realizations in the short run. A key pillar of our performance during the quarter was the continued ramp up offered new manufacturing facility, most notably our backward integration plant for methylamines at saica.
The facility ramped up meaningfully and was tested at higher utilization levels where operational performance remained encouraging while the initial ramp up phase witnessed temporary headwinds. The facility achieved a production rate of nearly 1000 tonnes per month during the month of March 2026 and we expect to make further progress on utilization ramp up during FY27. Over time, the project is expected to significantly reduce dependence on externally sourced inputs and improve self sufficiency for the metformin portfolio thereby supporting margin improvement and operating leverage.
Another important structural improvement during FY26 was the increasing contribution from regulatory and export oriented markets. Exports contribution increased from 35% in FY25 to 38% in FY26 from which regulated market contribution also grew to 73% compared to CP. This gradual shift towards regulated markets and higher value products indicated the company’s ability to meet stringent regulatory norms and adhere to international quality standards. Overall, while FY26 remained a transition year operationally, the business ended the year with significantly improved momentum supported by stabilizing pricing trends, stronger exports, improving product mix and a gradual ramp up across newly commissioned facilities.
With that, I would like to now open the floor for questions. Thank you.
Operator
Thank you. 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 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 comes from the line of Nilesh Kuge with SDFC Securities. Please go ahead. Mr. Go get. Please go ahead with your question.
Please unmute yourself and go ahead with the question. Since there is no reply from the line of Mr. Koge, we’ll move to the next participant. That is Mr. Shashank Goyal from Yumara Capital. Please go Ahead.
Questions and Answers:
Shashank Goyal
Hello. Yes, thank you so much for the and very good number. So my question is, the first question is how is the MNS plant, right. Ramping up and what’s about organization? Has it reached. Sorry for interrupting,
Operator
Your voice is not clear. Can you just come in the range and talk? Hello, can you hear me? Yes, go ahead. Yeah, so my question is how is the plan ramping up? What sort of degradation has it reached and what do you expect over the next two years? Endless plant.
Ardish Patel
Are you talking about methylamine plants in Freika?
Operator
Yeah. Yeah.
Ardish Patel
Okay. Yeah. So we just started that plant in the month of September. December quarter was the first quarter where we showed a utilization of around 29% roughly. And then in the March quarter we were able to achieve 40% little upwards of 40%. We fell slightly short of a target of 45, 50% mainly because of ammonia based raw materials in that plant because of the Waste Asia war. But going forward we are expecting that in June quarter we should easily Cross A around 55, 60% of utilization for that plant.
And within a year’s time we believe that we should be operating upwards of 70% utilization of the methylamide plants.
Operator
Okay, and my next question is on the what was your profitability at a better level last quarter and what sort of margin and revenue profile can it reach over the next few quarters? Assuming there is no change in the duty structure.
Ardish Patel
Yeah, so the salicylic acid still remains a laggard. As we were talking in last quarter that we were expecting one equipment in the the delivery was expected in late April. So we took a call because. Because we were making variable losses in salicylic acid. Because we were not able to recover and reduce the raw material cost because of lack of that equipment. We took a call to shut that production. And once the all the equipments are operational, once we test it, once the variable costs are in check and then we will restart the production of salicylic acid.
So that is the latest update of salicylic acid. But we do expect and hope that we will improve and very quickly. We should start with forward integration of salicylic acid as well because that plant is already commissioned. Now we will need to do piloting and scale up of the derivatives plant.
Sajal Kapoor
Okay, thank you so much. That’s all from my end. Thank you.
Operator
Thank you. A reminder to all the participants that you must star and want to ask a question. Next question comes from the line of Dhuvanil Desai with Turtle Capital. Please go ahead.
Shashank Goyal
Hi, good morning. So my
Operator
First Question is, you know, your comment mentioned that before you ended on a strong north and realizations were also kind of stabilizing because of this, you know, this conflict that you know there is some improvement. So given that, you know, we have a large capacity which is already in place and the negative rate variances behind us, should we expect you know, 10, 12% volume growth and maybe some 4, 5% positive rate variance because of the regulated market contribution going up and overall incremental pricing that we are getting because of the higher growth?
Ardish Patel
So the current situation is such that the API prices remain elevated because of West Asia war. If this persists for longer, then definitely there will be a lot more positive rate variances. Nevertheless, we will always strive for achieving a volume growth of 8 to 10%. As you said, we also have already built up capacities from two greenfield expansion. So achieving those kind of volume, that kind of volume growth would be fairly easy. And realizations definitely it will be positive the longer the war stretches, the positive variance would be more
Operator
So one follow up on this. So you know we’re talking about 8 to 10% volume growth but if you look at the last two, three years we have put up so much of CapEx and the new capacity is coming on stream. So with that if we are talking about 8 to 10% volume growth, does it mean the existing base business, you know, there we are not expecting much of a volume growth because that sounds slightly on the lower end. Right. With the new capacity on so many new products. Methylamine specem. So with all that, why at a company level we will only, you know, grow at 8 to 10% volume growth?
Ardish Patel
Yeah, so the internal target will always be in the range of 10 to 15% growth. Right now what is happening that we with a very high pricing in the antibiotic segment. Last time what we observed was the domestic demand had gone down and that is what we fear. If the crude prices remain elevated very high, then the older generation molecules which are already, you know, are being sold at a very cheaper rate in the market, in the Indian market and there is some kind of price regulation for the formulation players.
So in the API become very expensive. Typically the demand of those products goes down. And that is what we have observed during Russia, Ukraine war as well in 2023. So that is the only challenge what we think we can face for antibiotic category in the domestic market. If the prices are too high, if the prices are moderate, then it would affect the demand. But if they’re too high, the crude remains too high, then probably that might be the Reason.
Operator
Okay. And second question on the gross margin side of it. I think there is some improvement standalone wages, you know, on gross margin. But how should we look at gross margin given that realizations are up but input cost also is up at the same time regulated thing is kind of scaling up. You know, rupee has depreciated for import exports or multiple factors kind of playing into this. So are we expecting any delta in gross margin for the coming year? You know, given all this,
Ardish Patel
The thing is we don’t expect much movement in gross margins as such. In Q4 we did fairly good in terms of gross margins. So what we would like is we would like to maintain this kind of gross margins in Q4. What happened? Our manufacturing costs were little higher but they can be reduced by a percent or so. So which can lead to improvement in EBITDA margin. However, so there are two factors like the more regulated sales, what we are targeting that will help in increasing the gross margin. But on the flip side, if the prices of the APS goes too high because of the raw material prices, typically what happens is that to maintain certain level of ops, absolute gross gross profit per kilogram of a product, the margin tends to lower.
In terms of gross margin, you. You got my point? Means for example, if you are making. Right,
Operator
Yeah.
Ardish Patel
36. So you’re saying absolute.
Operator
I got your point that the absolute number can go up, but percentage. It will look on the lower side because you are, you know, you’re. If the price is denominated. Right, right, right, got it. But so my point is that. Okay, so I. In percentage terms it may not go up much, maybe stabilize or slightly lower. But in absolute terms, if the delta is higher, does it mean that the flow through to the EBITDA will be significantly better and hence ebitda? It
Ardish Patel
Can. There is a possibility.
Operator
Okay, got it. And third thing, last question is on the formulation side. So we did very well on the formulation side. So you know, what are the contributing factors? I think our oncology thing is still, you know, the dose years are still in the approval stage. So it will take some time. So what is driving this growth? And you know, going forward this kind of a run rate is, you know, possible to maintain. How should we look at it?
Ardish Patel
Yeah. Vishwa, would you like to answer this question?
Operator
Yes. Yeah, sure. So as you rightly said, our oncology plant is still pre revenue. But the current growth is coming from our direct exports in the non oncology portfolio. Since we have a growing list of products that we are getting approvals across regulated markets that Is the business that is growing quickly and that is why our export business is also increasing which is leading to better margins as well. And going ahead too we are expecting a good number of approvals and market extensions which will help us keep increasing the export business at a similar pace
Shashank Goyal
For this 90 crore hundred that we got. I think something which is possible to maintain in that by 27. Is that a fair way to look at it? Yeah,
Operator
Yeah that’s a fair assumption. Right.
Shashank Goyal
Send tax it and all the rest.
Operator
Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes on the line of JJ with JJ Capital. Please go ahead.
Shashank Goyal
Hi sir. Sir, I have a couple of questions. Firstly sir, regulated market contribution increased materially in FY26 as you have highlighted. So what are the key geographies and leading to this improvement in these products?
Ardish Patel
Yeah, I would like to highlight that this would be mainly Latin American markets. Still this European market and US market would be our target market for regulating for more and more regulated sales going forward. So this hasn’t seen an uptick yet but it looks very promising because we are seeing lot of business development activities. Lot of business development activities are going on with these clients. Lot of approvals are coming in for the facility as well as for the product. So within a year’s time, at least towards the end of the year we should start seeing some kind of flow in the regulated markets from our recently reappeared US FDA plant as well as other other products.
In fact in lot of our other dedicated plants as well we have taken CEPs which are the European approvals for antifungal products. Then we have got for anti inflammatory as well. So. So. Are you asking anything else?
Shashank Goyal
Yeah. So the second is what is the status update on timeline for key US FDA approvals and DM across APIs and formulations
Ardish Patel
For APIs?
Shashank Goyal
Yeah, for
Ardish Patel
A. So see for API we got the approval for US FDA already last year for the plant approval and there are few antibiotic, anti inflammatory and few other therapies where we are actively marketing those products in the US market. And the flows will start within 12 to 18 months is what we expect. Then we have oncology as well for the US markets where we are filing dosias in formulation business.
Shashank Goyal
Yeah. So lastly also can you please highlight the status dumping applied products?
Ardish Patel
Can you repeat the question I was not able to hear?
Shashank Goyal
Lastly can you please highlight the status of anti dumping of light product?
Ardish Patel
Okay. Yeah. Miss what I could make up your question was you asking about anti Dumping. Regarding anti
Shashank Goyal
Dumping. Yes. For the products.
Ardish Patel
Yeah. So we. We are in the process of application for our
Shashank Goyal
Salicylic
Ardish Patel
Acid. So that is ongoing means as we speak now the application is done and we are going ahead with the various stages of that antidote application.
Shashank Goyal
Okay. Okay. Thankful. Thank you.
Operator
Thank you. A reminder to all the participants that you may press star and one to ask a question.
Shashank Goyal
Next question. Next question comes on
Operator
The line of Sajal Kapoor with antifragal. Please go ahead.
Sajal Kapoor
Join the call. A little late so I missed your opening remarks. I’m sorry about that. Maybe my questions are a little different. So firstly, I mean what challenges in the mines ramp up were kind of external and outside management control?
Shashank Goyal
Sorry
Ardish Patel
To interrupt you. There is some disturbance from some of them. One of them. Just checking. Please give me a moment.
Operator
Speaker. The disturbance is coming from the line of Mr. Hait Sava, please go ahead.
Sajal Kapoor
Okay. Okay. Yeah. Thank you. So. So. Hi Adesh. What challenges in the Sayaka ramp up were kind of, you know, outside your control or were external? I mean it could be ammonia shortage or raw material volatility or some other factors. And which challenges were kind of internal execution issues where you know we or the company underestimated timelines, utilization curves or operational complexity? Because greenfield plants are always challenging in terms of scaling up. Right. What often work is on the design doesn’t actually show up in the real production challenges.
So I mean if you can split your response in you know, something which was internal and could have been better managed and the factors that were outside your controls and how we should look at in this particular amines Greenfield going forward FY27 this fiscal. Thank you.
Ardish Patel
Yeah, so yeah, so we speak. We spoke about the Saika plant little earlier. So we said that we started this plant the first quarter was December quarter where the plant was operational at a full scale. Just give me a moment. So earlier we were just able to hit the run rate of around a little less than 30% utilization in the month of in the quarter of December. Whereas in the quarter of March, in spite of the fact that there were slight raw material shortages, we were able to achieve utilization upwards of 40% slightly above 40%.
And what we are seeing as far as first half of Q1 is concerned, we are already means we have already utilized the plant around 60% the CYCA plant. So the methylamine scale up is going pretty well. We did not face much issues in this plant like the Tarapur facility of salicylic acid. Whereas the better utilization of this plant will go slightly depends on our Expansion plans of Metformin itself which are also on its way as we speak right now. So we are expanding metformin production as well. So more the metformin production, more will be the utilization of the CYACA plant.
As far as internal problems are concerned. There are very minor issues at the drying of one of the derivatives of methylamines. But we are not worried about that as of now because still we are able to increase our utilization and probably within three, four months the real profitability of Saika plant will start showing results.
Sajal Kapoor
Sure. No, that’s helpful. Azation. So in terms of the metformin, I mean how much of the value chain do we now control? Because see the state of India as a whole in Metformin especially was the fact that no one, absolutely no one was backward integrated. Right. And everyone was dependent on China. So how, how is the situation on the ground today as far as RP drugs are concerned for Metform? Metformin,
Ardish Patel
Yeah. So Metformin there are two main intermediates. One is source from China and Europe and the other one is indigenous to domestically. So the DCDA which is important, there are a lot of players in that. So not much values to be made in that product as of now. Plus it has an explosive chemistry, hazardous chemistry as well in terms of manufacturing. But whereas the indigenous intermediate was concerned permit there, I believe now we are the only ones as of today with the backward integration facility.
So that puts us in a very good position, you know, to further reduce. We were already very cost competitive in Metformin because we, we were clearly leader with handsome majority when it comes to selling metformin in semi regulated or I would call unregulated because none of the API markets are unregulated as of now. But I would say other than the highly regulated markets, the row market, we were absolute leaders in metformin where cost of production is very important. And with the advent of this backward integration, our cost will further go down.
Another important update on Metformin is that we have already filed a DMF with us for Metformin. Now slowly, once we ramp up the capacity, we would like to invite FDA to inspect our dedicated Metformin facility. So that would be the next stage for Metformin. We already have the European approval, but what we feel is that USA approval is the key even for selling the metformin to European markets.
Sajal Kapoor
Okay, so. Right, so that’s helpful. So given our backward integration projects are now ramping up, is it fair to expect that every year should show Y o Y if not quarter over quarter improvement in terms of the margins. Because see the economics of the business are simple. The fixed costs are fixed. Right. As the utilization improves. And as long as the realizations are not suffering big time. Right. And there is also anti involution talk happening coming from China. So putting all that into perspective, is it fair to expect at least 100 to 200 basis points margin EBITDA improvement in FY27?
Ardish Patel
Yes, that should we can expect that in terms of gross contribution at least 100 basis point we can definitely target.
Sajal Kapoor
And where do we see going or when do we see us going back to the sunny days scenario. So we in 2015, 1617 era, we were having 16% operating margins pretty consistently. We are way off that number. I know 2021, the COVID year was an exception where we hit 20 which was never sustainable. But for our kind of a business with backward integration. And now this formulation also ramping up. And you know, at some point in time the ONCO facility will also come into play. I mean do you. Do you really think that 16% margin at an EBITDA level is a.
Is a challenge even now?
Ardish Patel
No. So with all with more regulated sins from our USFD plan, with Metformin getting ESFD approval, hoping that then with the advent of formulation, the more the exports of formulation is already increased. Has already increased. And the EBITDA margins in the formulation business is now upwards of 16 to 17%. So which is very good for us. And it was consistent for the last two quarters. And with incoming oncology business. Definitely as the utilization goes up, we will start adding margins at the EBITDA level.
Because as of now also we are expensing some part of oncology cost, developmental cost in some part in the P. So as the oncology sales improve, definitely EBITDA margins should improve.
Sajal Kapoor
And just remind me again on the CAPEX plan for this fiscal and the next fiscal because I might have missed that. Yeah.
Ardish Patel
So as of now, greenfield project we are not doing, but you can call it quasi greenfield, not mix between the brownfield and a greenfield. Because the expansion, the new products production lines, new production plants which are putting up are coming up mainly in the adjoining blocks of the existing facilities. So overall the requirement of capital would be slightly low as compared to the greenfield projects. Because in greenfield projects, plot development, your compound wall, your utility setups, your other admin setup QC QC block setup that those occupy, those take up lot of funds.
Whereas in this kind of expansion, what we are doing planning right now and overall plans are there in like three to four places so will require little lesser capex but the asset turn of that capex should be slightly higher because it is a causeway. Greenfield or brownfield you can say so overall budget. What? And this is this. I was talking about the standalone plus in formulations also we are coming up with additional block because we already got EDQM block in formulation for osd. I’m talking other than non onco and we want to double that capacity and we want to make that block as EDQM as well.
So all put together we feel that you know in next 2 to 3 years, at least 2 to 3 years definitely around 3 to 400 crores of capex might go in. But again that will be a safe capex more of increasing the existing capability rather than entering into altogether new products. Whereas in formulation the part of this capex will also go in formulation for developing our basket of oncology products because that requires heavy capex. So part of the capex of will flow into the formulation business and we are expecting to grow our formulation business, you know at least till thousand in next three to five years.
Sajal Kapoor
Right. And how much of this expansion is backed by customer discussions and demand or order visibility versus you know we want to be ready with the capacity hoping that the demand will come. I mean is there a.
Ardish Patel
Understood. So as far as the standalone business is concerned because it is a brownfield or quasi greenfield kind of projects all these products are the products which we are already working in. So we have pretty good visibility of the demand of that product. So it is backed up by customer talks and discussion as far as formulation is concerned. I would. Vishwa, can you just explain how we are taking going forward for formulation demand? Hello Vishwa, are you on the line? Mr. Sabla, please go ahead.
Operator
It is breaking for me a bit. Could you just repeat the last part? I not your clearly.
Ardish Patel
Yeah, I will explain. The question is that whatever capex we are doing in next two years or three years so as far as the formulation capex is concerned how much of that capex is backed by the visibility of demand or customer discussions and how much is like more visual like you know we will be ready with this and then probably the demand will come. That is the question.
Operator
Right, so. So just to break it down, you know we are capexes in two parts so the capacity and enhancement program that we’re doing is pretty much based on our forecast for the signed products or where we have clear visibility on once our products are launched we will need those kind of volumes. So it’s a brownfield expansion to meet our forecasted growth from existing products as well as new products. And as far as our capex on R D development goals, those are typically, you know, we look at developing products first and then when once the products are at late stage development, either Dolbys are ready or near approval, that’s when we start to sign contracts.
So apart from a few contacts which are signed at a very early stage, most of them are signed once products are almost ready to be marketed.
Sajal Kapoor
Okay. Okay, well that’s helpful. Thank you. Thank you for answering all my questions, team. All the very best. Thank you. Thank you. Okay,
Operator
Thanks. Thank you. Next question comes from the line of Meghna Agarwal with Mount Indra. Please go ahead.
Unidentified Participant
Hello. Thank you for the opportunity.
Operator
Can you just speak a little more louder?
Unidentified Participant
Hi, am I audible?
Operator
Yes, please go ahead.
Unidentified Participant
Yeah, thank you for the opportunity. Actually, can you just help me with more things about the salicylic acid? I will not even catch you properly. We are restarting the production. So what happened? Actually, can you please explain?
Ardish Patel
Yeah. So in salicylic acid a lot of improvements are to be made at the process level. One was regarding the phenol recovery which was going west on the mother liquor side. So we have, since we already did trials few months back, we had ordered the equipment as well. But before that equipment is installed, it will be installed anytime now. So before that is installed and we operate and check that it is, you know, working properly though we have taken the pilot batches so it’s ideally it should work properly.
So once that is done, only then we feel that, you know, there is a scope for us to come in variable profit for salicylic acid. So unless we install that equipment, there is no point in going ahead with higher production of salicylic acid because then that will in turn you know, cause more losses for us at the same time in salicylic acid. What we have done, we have already commissioned means it’s almost in the late stage. We are going in for derivatives of salicylic acid. So because the selling process of derivatives of salicylic acid is much higher, you know, the scope for margin expansion is more if we sell derivatives directly.
Secondly, we are also going in for anti dumping for salicylic acid. And thirdly, there is one more scope of improvement in salicylic acid and that is at the part of effluent. So in China what is happening? The effluent stream is just a saline water, miss, high saline water which they are allowed to drain into the sea. Because other impurities are not there in that. So if. So we are checking the possibility with the government. Because if. If we have to evaporate all that thing then you know that puts us little bit behind when it comes to competing with China.
So. So that is that. So there are two, three challenges. We are tackling all of them together. So once so one. One is your liquid liquid extractor. What I was talking about for improvement in fiorent recovery. Second second was reducing cost at the equivalent side. Third is anti dumping duty. And fourth is your derivatives plant which will come up by the May end or max by mid of June. There is a severe fabrication labor shortage. What we observed in the summer season. Partly also because of lack of cooking gas and all.
So the labor in the area not there. So that is why the plant got little delayed. But anyways it will be done soon. So these are the. You know, multi prong approach what we are following up to improve the salicylic acid. And then we restart the facility.
Unidentified Participant
Okay. And also just wanted to any of revenue guidance and ebitda margins for FY27. Like what are we expecting?
Ardish Patel
Yeah, so we see we already did around more than little 13% EBITDA margins. We would see the war is one big challenge. How it will shape up, how far the crude prices will go up. Whether they will stay up that high for a very long period of time. Or they will stay around say let’s say 1900, which is okay. Which is fairly decent. So there is slight uncertainty. But hoping for the best. We would still like to target EBITDA margins anywhere between 13 and a half to 14% for this FY27. Had this war not been there.
Our earlier targets were definitely 14 to 14.5% EBITDA margin for FY27.
Unidentified Participant
And also one more last question I wanted to understand is what is happening in the antibiotic segment. Like are we seeing any recovery or what is the think we want antibiotics at this point, please.
Ardish Patel
So there was some recovery on a sequential basis. Means March versus December quarter. But you know one thing which can hurt this antibiotic demand a bit more is the elevated prices of antibiotics means the of the raw materials and all. So if the crude remains too high of like more than 110, $120. Then probably in short run it might affect the domestic demand of antibiotics. That is what we feel.
Unidentified Participant
Are you seeing any volume growth or price growth in antibiotics? How are we seeing for our company?
Ardish Patel
So there is price growth right now. Means if we talk year on year. We are expecting in FY27 we are expecting a very big price growth in antibiotics. Volumes probably can be bit flattish because. I’m saying flattish because anyways the volumes of FY26 were not that great for antibiotics. So it won’t go further down is what we believe.
Unidentified Participant
Okay, perfect. Thank you. Thank you so much and all the best. Okay,
Ardish Patel
Thank you.
Operator
Thank you. Next question comes from the line of Nilesh Goge with the HDFC securities. Please go ahead. Mr. Goge, please go ahead with the question. Mr. Goget, please unmute yourself and go ahead with the question. Since there is no reply from the line of Mr. Puge, we’ll move to the next participant and that is on the line of Rishabh Jain with Modi Capital. Please go ahead.
Resham Jain
Hello. Am I audible?
Operator
Yes.
Resham Jain
Yeah. Thank you for the opportunity. So my question is management indicated selective API price increase during the quarter. Which products have witnessed price hikes and how sustainable are these increase and do we expect to see further increases?
Ardish Patel
Harid bhai, would you like to answer this question?
Harit Shah
No. Prices are not stable. We don’t. We are not expecting any further increase in the price depends. This will definitely depend on the raw material and crude oil level prices. Basically all solvents and other chemicals are at peak level now and we don’t expect further going up unless crude goes beyond 140, you know, 130. 140.
Resham Jain
Okay. So since you mentioned crude, so are we seeing a crunch in any of the key raw materials right now because of war and is there any impact of the business?
Harit Shah
No, only in March we had some issue sourcing raw material, mainly ammonia. But otherwise raw material is not an issue as of now.
Resham Jain
Okay, okay, thank you. That will be all from my side. Thank you.
Operator
Thank you. Next question comes from the line of Resham Jain with VVD Asset manager. Please go ahead.
Sajal Kapoor
Hi, good morning sir. So I have three questions. First one is
Operator
With respect to the overall CapEx which you mentioned 300 to 400 crores over the next three, four years. Given that the cash generation is quite healthy and we always maintain some level of debt equity, is there any other capex which you’re planning beyond this? Because then it will not match the overall cash generation over the next three quarters.
Ardish Patel
So if at all we feel something is more lucrative, probably we might end up replacing some of the CapEx. And if the current projects, you know, the current 2 greenfield projects, the SAICA and the Salicylic one, if there is stark improvement in the cash flow from these Two projects then probably we can have a bigger budgets as well because then the cash generation would be a lot higher than what it is today. So based on today’s financials this much is quite easily doable. As of today also our long consolidated long term debt is around 328 crores and short term would be around 248 crores.
So that way. And the debt to equity ratio is also historically lowest as of today in this quarter. Yeah,
Operator
That’s right. That’s why. So maybe by the end of the year you may further basically fine tune the overall capex budget. Correct? Correct.
Ardish Patel
Correct. That. That is absolutely correct.
Operator
Okay, the second question is with respect to CWIP of 214 crores which is currently sitting. That is related to which projection.
Ardish Patel
How much so CW IPO. What about you said
Operator
214 crores. I could see. Yeah,
Ardish Patel
So. So. So a part of that was related to the cogent boiler and some brownfield expansions. What we are doing and also a major part of it is related to the formulation rd the doses oncology dossiers, what we are developing. You know that also requires a huge capex and as on when we will get the approval then we will start the amortization of those capex.
Operator
So most of it should be capitalized this year, right? 27 maybe first off,
Ardish Patel
Except
Operator
Oncology
Ardish Patel
A lot would Vishwa, can you give a fair idea about in oncology how much we would. Mr. Projects will go live this year and next year. Mean in terms of percentages
Operator
I think he’s asking except oncology like soil. Basically for the formulation part, the project life cycles are quite long. So most of the CWIP will start getting amortized over the next 24 months. So there might be a some portions that will be amortized this year and next year. But the major chunk would be post 24 months. Okay,
Sajal Kapoor
Understood, understood. And so the last one this year all the projects which have started
Operator
Like the methylamine and the salicylic acid and all what would be total EBITDA loss which is there in this year? Because lot of ramp up related cost will be there
Ardish Patel
For the entire year. You’re asking FY26
Operator
For the entire year. What is the total EBITDA loss because of new projects?
Ardish Patel
A very rough estimate if you ask me. Only the EBITDA loss would be somewhere in the range of 18 to 20 crores for the interior. Okay sir, thank you. All the best. Thank you. Thank you.
Operator
Thank you ladies and gentlemen. That was the last question for today. We have reached the end of question and answer session and now hand the conference over to the management for closing comments.
Ardish Patel
Thank you. So thank you for asking the questions and showing the increase in RT drug as utilization. Hello?
Operator
Hello.
Ardish Patel
Yeah. As utilization improves across our newly commissioned facilities and the benefits of our strategic investment starts reflecting more meaningfully in operations, we expect a gradual improvement in profitability and return ratios for the coming years. We remain committed to disciplined execution, operational excellence and sustainable long term value creation for all our stakeholders. Thank you once again for your continued support and confidence in RC Trust. For any further questions, please reach out to sga, our investor relations advisors.
Thank you and have a nice day.
Operator
Thank you. On behalf of Aarti Drugs Ltd. That concludes this conference. Thank you for joining us. You may now disconnect your lines.