Alembic Pharmaceuticals Limited (NSE: APLLTD) Q1 2026 Earnings Call dated Aug. 05, 2025
Corporate Participants:
Unidentified Speaker
R. K. Baheti — Executive Director
G. Krishnan — Chief Financial Officer
Shaunak Amin — Managing Director
Pranav Amin — Managing Director
Analysts:
Unidentified Participant
Tushar Manudhane — Analyst
Meraki Shah — Analyst
Damayanti Kerai — Analyst
Sanjay Chawla — Analyst
Saion Mukherjee — Analyst
Gagan Thareja — Analyst
Presentation:
operator
Good day and welcome to Q1FY26 earnings conference call of Alembic Pharmaceuticals Limited. We have with us today Mr. Pranav Amin, Managing Director, Mr. Shaunak Amin, Managing Director, Mr. R.K. bahiti, Executive Director, Mr. G. Krishnan, CFO Mr. Ajay Kumar Desai, Senior Vice President, Finance. As a reminder, this conference call is only for analysts, institutional investors. 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. R.K. bahiti. Thank you. And over to you sir.
R. K. Baheti — Executive Director
Thank you. Am I audible?
operator
Yes, sir. Please go ahead.
R. K. Baheti — Executive Director
Yeah. Thank you everyone for joining our first quarter 26 conference call. I’m very happy to introduce my colleague Mr. G. Krishnan, who has joined us as our CFO effective 7th of July 2025. And I’m pleased to hand it over to him for the opening remarks. Krishna,
G. Krishnan — Chief Financial Officer
Thank you. Thank you Mr. Bahayati for the introduction. Good afternoon everyone. This is my first earnings call interaction with all of you. As a CFO of Alembic, I’m truly pleased to be here and it’s a honor to join a company with such a rich legacy of innovation, operational excellence and strong stakeholder trust.
Over the past few weeks I’ve been spending time engaging with various teams, understanding our business levers, appreciating the disciplined approach that the company brings to execution. So I look forward to working very closely with the leadership team to continue driving sustainable growth, operational efficiency and long term value creation. So now let me briefly take you through the numbers for the quarter ended June 30, 2025. We delivered a good start to the financial year. Total revenue for the quarter grew by 10% year on year to 1711 crores. The growth was broad based across businesses despite pricing pressure in US generics and API.
Gross margin that is net of material cost improved from 74.8% in Q1 last year to 76.2% in Q1 this year, primarily driven by product mix. And we also embarked on cost improvement programs in manufacturing operations that drove the margin uplift. EBITDA margins before R and D expenses were at 25% of revenue at 424 crores for the quarter it grew by about 23% over the last year, reflecting revenue growth, better gross margins and improved utilization in some of the facilities that were launched last year. R and D expenses increased by 26% compared to the previous year to 145 crores.
And this is in line with the full year guidance that we gave at the beginning of this year which is supposed to be around 600 to 650 crores in RD expense. So EBITDA after R and D expense was at 288 crores which is 17% of revenue and grew by 20% year on year. Profit before tax grew by 21% to 191 crores. Net profit growth was at 15% to 154 crores. EPS for the quarter stands at 7.85 rupees per share compared to 6.84 rupees for the previous year. Working capital as of June was broadly similar to what we had in March.
We had better collections which was partially offset by increasing inventory. In line with our strategic approach on managing working capital borrowings, the gross debt was at 1185 crores while net debt stands at 967 crores for the quarter as of June 30th. With this I have given a broad overview of the financials and I now request Shaunab to take you through the India branded business. Over to you Shaunabad
Shaunak Amin — Managing Director
yeah good afternoon everyone. I think this quarter on India we. Under delivered with only a 5% year on year growth with reaching 599 crores in revenue for the quarter. There are some specialty areas which have shown some momentum but I think in terms of building a more robust sustainable business to deliver strong double digit growth going forward there have been some challenges which we tried to tackle including adjusting some underlying factors as well as having a far more vigorous and robust mechanism of what we build, how we capture in market inventory. Also along with that more rigorous alignment to UCMP norms that we have to follow as an industry.
As a part of these we also understand that certain execution levels were not up to standard and we are working on those and trying to move people. But getting 7,000 plus people to move overnight does take a challenge but we are definitely working on it. We have a very clear idea on where the gaps and what we need to do to get back into a double digit kind of growth number that we have promised for the year. We’re working on it on a daily basis and I’m sure that very soon we should start seeing some of these start flesh out in terms of our growth numbers highlight obviously Animal Healthcare continues to do well because of our robust execution in that area and we hope to match rest of the product categories to that Level that standard of growth going forward.
Thank you. I’ll pass it on to Farawna. Thank you.
Pranav Amin — Managing Director
Thanks, Shannon. I’m pleased to present the performance of the first quarter of FY26 for the international business and the API. We began the first quarter on a strong note. It was driven by a 21% increase in the rest of the world generics, reflecting a strategic expansion and execution across the geographies. Despite ongoing pricing pressure in the U.S. our U.S. business also grew by 13% supported by volume gains. We launched four products in the market and we also picked up market share in some other products. We expect the US to continue growing in the next couple of quarters on the back of some interesting launches as well.
The API business was flat. I’ve said that it’s been a little muted due to some issues due to data availability in India and we’re slight at 261 crores for the quarter. As we ramp up the utilization of our new manufacturing facilities and continue to drive cost optimization initiatives, we expect to. Benefit with improved operating leverage which will. Help our margins as well. We filed two Anders during the quarter. We received six approvals and launched four products in the U.S. we expect to launch four to five more products in. Q2 of this year as well. With that, I would open the floor. For Q and A.
Questions and Answers:
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 their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mr. Tushar Manudhani from Motilal Oswal. Please go ahead. Sir. Yes sir.
Tushar Manudhane
After many quarters seen some muted performance for this quarter. That was first and secondly in terms of you highlighted rebuilding the team. If you could just elaborate in terms of what exactly are we trying to do.
Pranav Amin
Yeah, so I think what I was trying to is that the way we. Build sales, we try to keep it far more strict compared to what industry norm is as well as where we used to be in the past. So in terms of our primaries versus secondaries, we also implemented a mechanism to capture secondaries from the market automatically so we have a better control on what our inventory levels in market. So some of that also impacted our sales in Q1. But largely like I said, I think we have to focus more on execution and we’re more committed to driving underlying Growth through our prescribers and prescriptions for a sale that is more sustainable in the future.
Tushar Manudhane
Is this impacting a particular therapy or therapies?
Pranav Amin
No, this is across the therapies. This is across the therapies. It’s for the whole organization. So there’s no specific therapy which will have it. But like I said, we’re quite confident we have full visibility on what’s going on and we’re quite confident of where the gaps are and what we need to do to address these.
Tushar Manudhane
And your acute has been better. So any particular attributes?
Shaunak Amin
I think acute we’re coming off. I think if you know the history, I think we came up a very high base and then last year was a very. Market was extremely low base for us. Sorry, it was extremely bad. So I think from a base point of view there is some advantage there. But again, like I said, I think little better execution on the active side also along with some better stability in the market has allowed us to do this.
Tushar Manudhane
That’s it from my side.
operator
Thank you. The next question is from the line of Merali Shah from Ashika Stock Services. Please go ahead, ma’. Am.
Meraki Shah
Yeah, thanks for the opportunity. I have two questions on the peptide front. So now that we have a dedicated block which is commissioned and correct me if I’m wrong, we have allocated almost 35% of R D towards this peptide and complex injectables. Just wanted to know if you could update us on the timeline for the first peptide filings. Also any update on filing for thermal butide and RW markets and like you had indicated about Tir Zakatide. So we are planning for a day one launch in us. So any filings or any progress on that front?
Pranav Amin
So I think we haven’t said that we validated 35% of IMD2 peptides. I think that’s not what we have we’ve said ever. But yeah, peptides is something that we are looking and pursuing. What I have said is that we were late for the first peptide, which is semaglutide for the US market. So we won’t be there in the first wave of launch for semaglutide. Tirzepatide, which is the second one, Mounjaro is something that we’re looking at and the follow on GLP ones that we’re doing. Apart from that, we have other peptides in the system as well that we are working on which are going into some of the complex injectables.
Meraki Shah
Yeah, understood. It’s like you mentioned, we are late for some of you type. But we were aiming for row markets.
Pranav Amin
Yes. So we are looking at some of the row markets for semaglutide. As I said we were a little late for the first wave markets. After the second wave market is something that we will pursue.
Meraki Shah
Any specific if you can name which row segment are you looking at which market?
Pranav Amin
I don’t like to name them right now because I just want to get the filings done and ensure that the regulatory strategy is in place before we give a comment.
Meraki Shah
Okay. And my second question is you had earlier indicated that we do have limited competition injectable launches which will probably start contributing by FY27. So any launch expected in FY26 and if you can elaborate more on the segments are the niche segment or any complex dosage form.
Pranav Amin
Yes, we have a few complex injectable filings that we will get. One approval that we did receive, it’s in the public domain is on the doxorubicin product. So like that we’ll get few more as we go along. Slowly, slowly as we keep getting approvals.
Meraki Shah
Okay, thank you.
Pranav Amin
Thank you.
operator
Thank you. The next question is from the line of Damayanti Kerai from, from hsbc. Please go ahead.
Damayanti Kerai
Yeah, hi. Thank you for the opportunity. My question is again on India business. So Shauna, you mentioned you are clear about the gaps and you’re working towards fulfilling those gaps etc. So according to you how long it will take before you can catch up with the market growth rate first and then may outpace the IPM growth. So approximately this will be how many years of effort according to you?
Shaunak Amin
No, I think what we’re talking about is not years. I think we’re talking months in terms of time frames.
Damayanti Kerai
So when do you see your India growth going back to say a market level growth?
Pranav Amin
I can’t do the exact comment but. Like I’ve said, I think some of these things it’s India is a big country. I think executing in the country is challenging. I think to get to 100% of execution for every district in the country is that we cover. I think that I can’t give you exact time frame but like I said, I think it’s a matter of months till we start seeing double digit growth and meeting or matching market growth.
Damayanti Kerai
Okay, but you’re confident about the steps which you might have outlined and which can help you to really pick up from here on.
Shaunak Amin
Yes. So we benchmarked the couple of the top two, three companies which we feel have set an example of this. A lot of the work we’ve done is based on those benchmarks and in terms of companies which we feel are UCMP compliant and have been able to deliver strong growth over the last few years. So we have benchmarked those kind of companies and we have worked on operations to ensure that we meet those benchmarks and they can get the people 9 to 10 level report.
Damayanti Kerai
Okay. And on the people part you don’t need to add any more.
Shaunak Amin
We don’t, we don’t need to add any more people. We don’t need to add any more people.
Damayanti Kerai
Okay. So it’s basically more execution, more expansion on.
Pranav Amin
Yeah, it’s more about better, better, better. Execution like I said, in every, every district, in every headquarter we cover in the country. So.
Damayanti Kerai
Okay, that’s helpful. My second question is on India, sorry, international business. So first on the U.S. pRANAV Just want to understand you have seen, you know, pick up in the US sales despite price closing which you mentioned due to volume expansion, etc. So a couple of your peers have mentioned that in the US they are seeing channels destocking a bit I think in anticipation of this tariff etc. They were stocking up and now it’s getting unbind. So do you see the similar situation?
Pranav Amin
No, we haven’t seen as yet. These are channels talking or deep talking. We haven’t seen because it’s been so uncertain. Right. Sometimes we talk about tariffs and there’s no tariffs and there’s tariffs. We have not seen that. At least from our buyers. We haven’t seen it. So I think where we saw growth in the US is as I know we, as you said, as I said we launched four products. Apart from that, some of the other older products where there was some uncertainty in the market is where the buyers came to us and we managed to.
Pick up accounts at that work for us.
Damayanti Kerai
Okay. And going ahead also while the uncertainty remains on the tariff part, you will be focusing more on new launches. Right? To see pickup from.
Pranav Amin
Exactly. I think. Right. So on the tariffs there’s nothing you can do about the tariffs. I have a theory that it’s going to be tough for pharma. Right. Because what’s going to happen is that the issue is going to be on the high volume wafer thin margin products where you will have an issue with the tariffs and reporting tariffs because the wafer thin margins are not going to be viable to manufacture in the US as well. So that’s a catch 22 that’s going to come. As for us, we’re continuing with what we do just Trying to get whatever products we can work on, better supply chain, work on being a better chain partner.
And as we get a little more complex and a little more injectable business, that will help a little bit as well.
Damayanti Kerai
Sure. And some of some of your peers are again focusing on increasing a bit of manufacturing footprints in the US as a risk management strategy. Any thought from your side?
Pranav Amin
No. So that’s something that I’m not as. Okay, so let’s put it this way. Increasing manufacturing footprint in the US just because of tariffs is something in my opinion, not something that we’re considering. If there was a strategy based on U.S. or U.S. government business or something that you can get at a better price then we would look at a manufacturing strategy in the US but purely for the dealers perspective. It doesn’t make sense to allocate so much capital for setting a manufacturing in the US and again if there’s going to be more generic pricing and competition.
So we are not approaching it from that angle.
Damayanti Kerai
Okay, that’s helpful. And my last question is on your API business. So you mentioned pricing erosion is something which impacted the performance during the quarter. So it is something specific to your portfolio or it is an industry wide phenomena which you are observing.
Pranav Amin
Yeah, it’s a good question. I think it’s an industry wide phenomena and it’s not the quarter. I think it’s over the last six, seven quarters if you see API business has been quite muted and it’s de grown because the API business, our API business over the last decade or so it’s been a fantastic business, very high margin business, very high EBITDA for us. And so what’s happening is because again we had a good team record with compliance, you could get better pricing in the market. Now with this data that is getting leaked through Chinese traders, everyone knows what you’re selling it at, what bar, to which buyer and that’s really caused a lot of appeal and lot of uncertainty in terms of pricing.
Damayanti Kerai
Sorry, what is this update from Chinese players you mentioned? Can you elaborate?
Pranav Amin
Yeah. So since as I mentioned there’s a lot of data that is leaked by Chinese traders who give about all exports from India. That is what is causing this. I choose not just pharma, it’s every, every sector they have data from and that is what is causing this ishwapia business.
Damayanti Kerai
And how do you see this business in coming quarters? Maybe in near term we can see similar trends to continue but any scope.
Pranav Amin
Of improvement of course, you know, I think what’s happening is we will continue doing well see it’s just the pricing that has come into the issue. Right. The pricing has come in and we may have lost some accounts but the inherent business and our strength of being a good supply chain partner, development partner, that continues. Right. So you’ll see it, I think it’s in a couple of quarters, it’ll be tough and then slowly we’ll start growing again from there.
Damayanti Kerai
Okay, sure. Very helpful comments. Thank you. I’ll get back into queue.
operator
Thank you. Participants, if you wish to ask a question, you may press star and one on your touch tone telephone. The next question is from the line of forum Parekh from Bank of Baroda Capital Market. Please go ahead sir.
Unidentified Participant
Yeah, thank you for the opportunity. My first question is on row market. We have been doing very well in this region. So is it possible for the management. To give us detailed idea why? I mean what’s going right in this region?
Pranav Amin
Thank you. Yes, the row part of our business has been good business for us. If you see over the last decade or so the CAGR has been well over 15%, almost 20 odd percent if I’m not mistaken. So it’s been a very good business. I think it’s nothing, no rocket science per se. I think just the clarity and strategy in terms of what markets we wanted to go number two and execution in terms of supply chain at the heart of everything, what’s worked for us has been the supply chain execution. I think good supply chain execution has led us to good partners who trust us with the products and we’ve been able to supply and grow in these markets with the margin profile.
Unidentified Participant
So this kind of growth rate, is it sustainable going forward also?
Pranav Amin
So Q1, if you see Q1 of last year was a little muted quarter for the row business. That’s why this quarter it looks much higher. But having said that, I expect for the full year we will grow, we will grow close to about 10, 15% at least in the row market.
Unidentified Participant
Okay. And my second question is on the raw material cost contribution which has come quite low in this quarter, which has aided in gross margin. So going forward, how should we look? I mean should we look at this contribution as the base or a benchmark and go about it or how should we look at it?
R. K. Baheti
So see, raw material cost is a combination of product mix and how things happen between API and generics. Right. So I think it will be anywhere between 25 to 30% depending on which quarter we’re looking at and how the product mix is going on. And historically we’ve been in that range. I think we’ll continue to be in that range going forward as well.
Unidentified Participant
Okay. And lastly on the etr, if you can give guide us for full year ETR rate.
R. K. Baheti
So you’re you, you. I think current quarter we are at around 19, 19%. I think we’ll be in the range of 17 to 18% overall for the full year.
Unidentified Participant
Sure, that’s helpful. Thank you.
operator
Thank you. Participants, if you wish to ask a question, you may press star and one on your touch tone telephone. The next question is from the line of Mr. Sanjay from Renaissance Investment Managers. Please go ahead, sir.
Sanjay Chawla
The opportunity, the question. The US genetic business, excluding the oral solids, you’ve got about 70 andas across derma ophthalm injectables for these 70 andas how many products have been launched and broadly. If you can indicate what would be the contribution to your U.S. revenues. So the U.S. revenues as a total from all our businesses, about 29% of business in terms of the products that are launched. Nilesh, can you just ask, I don’t have the data with me. Can you just mention I’m referring to only the, you know, the 70 ands across non oral solids. Non oral solids.
Okay, sorry. So how much? We don’t give a revenue breakup between the non oral solids and solid and ost you get back to your offline.
R. K. Baheti
We don’t have it handy.
Sanjay Chawla
Okay. Could you indicate like how many products have been launched out of these 70 so far?
R. K. Baheti
We can get back to you later on this one.
Sanjay Chawla
Okay? Okay, sure. And my second question is, you know, I probably missed the exact number. Can you just indicate your gross debt and net debt at the end of.
R. K. Baheti
Gross Debt was at 1185 crores as of June and net debt was at 967 crores.
Sanjay Chawla
967. Okay, thank you so much.
operator
Thank you. The next question is from the line of Sion Mukherjee from Nomura Securities. Please go ahead.
Saion Mukherjee
Hi, thanks for taking my question and good afternoon. Pranav, you mentioned about the tariff and its impact. I mean it looks, it’s inevitable. I’m just wondering, let’s say if you have a 10% tariff tomorrow or 20% or even higher, how do you think the industry would be reacting? And I’m wondering for Alembic, given your size of around 250 odd million dollars with a wide basket of products, how in that scenario you think alembic will be impacted? If you can just take me through your thoughts.
Pranav Amin
There’s so many variables and it’s very tough to say. I think we have to be very clear As I said, we have to have clarity of thought what we want to do as a company. As I said earlier to the last comment about the earlier that manufacturing US fully right now it’s not meeting that I don’t look at large capital allocation for setting up a manufacturing in the US for the generic which we’re already seeing pricing pressure. It really depends on what kind of tariffs come and what kind of pass through you can now the pass through will go to the end consumer.
It’s not up to me. I would like to pass on everything. It really depends on what the competition also does. If everybody else says that we will work on wafers and margins or we’ll reduce our margins you on the supplied. Losses, then the business would get dumped. Then the business would of course be unviable. As far as we are concerned, we are cognizant of our bottom line and if we feel that it doesn’t make sense to manufacture for the US and we will walk away with some of the businesses.
Saion Mukherjee
And currently, how would you think about your profitability, let’s say pre or post R and D at the scale that you’re operating.
Pranav Amin
So our profitability right now across the row and the US is pretty good. At the pre R and D level of course is a higher R and D allocation for the US market. So at a pre R and D level with very healthy margins. At a post R and D level also the US has a decent margin. But the only thing that drags down the margins for the US facility is the facilities which are not fully utilized. So as we go along as we have more utilization from the facilities that will the margins as well.
But at a gross margin and at a net level, even after R D, its margins are pretty good for all the businesses.
Saion Mukherjee
Okay, okay. And so there is no discussion on tariff with the trade and channel yet is it or like, I mean is the industry discussing any feedback you get.
Pranav Amin
You’Re getting or nothing? Nothing. I think there’s no. It’ll come down to who can negotiate or what kind of deals you can do. But as I said, if everybody else decides to take the brunt of the tariff hike and the trade is not going to accept one company going. So it’s a lot of conversations but I think everyone’s still very. It’s a lot of variables there right now. Okay.
Saion Mukherjee
Okay, thank you. Thank you.
operator
Thank you. The next question is from the line of Mr. Tushar from Motilal Oswal. Please go ahead sir.
Tushar Manudhane
Thanks. So just on the US side where the launches have Helped us track. But how to think about this given that you know we have a good pace of launches in the coming quarters as well.
Pranav Amin
Yeah, so yeah. So I think for the US business the quarter one was a good quarter moving forward, Q2 also is going to be an interesting quarter. Q2, Q3 and Q4 and expect to grow by at least 10% in the US business across in every quarter at least. We have a few interesting launches that are going to happen in the second quarter as well. One just got launched the big product in Cresto. There is fair bit of generic competition so I think we should do okay in that product and the US this year should have good growth.
Tushar Manudhane
We, we don’t have API in house and many other players have multiple.
Pranav Amin
We have, we have announced API.
Tushar Manudhane
Okay. Okay, thank you. So any price erosion you have seen in this product if you could share some interest?
Pranav Amin
Yeah, so there is price erosion of course because it was an innovative product and generics have gotten the launches happened couple of weeks back. But there is fair bit of price erosion but it’s still a decent market. Let’s see over the next few weeks how it shapes up with more entrants come in and the tri picking up business.
operator
Thank you. The next question is from the line of Gagan Thareja from Ask Investment Managers. Please go ahead.
Gagan Thareja
The first question is pertaining to the tariffs. First of all, you know there’s some, at least in my mind there’s some confusion as to whether the 25% duties are tariffs that were announced. Do they exempt tariff pharmaceuticals in your, in your assessment, do they exempt pharmaceuticals?
Pranav Amin
Yes, I think as further currently it looks seems that pharmaceuticals is exempted.
Gagan Thareja
Okay. And therefore are you saying that, you know it’s only through the section 232 that subsequently you know, tariffs will be announced?
Pranav Amin
Exact. Exact. Exactly.
Gagan Thareja
Okay. Because the second one is, you know, under the HTS classification for tariffs, the determination of the country of origin is dependent upon where the substantial transformation of the product happens. So if the API comes from China or if you have a multi API product where significant share is coming from China and some is coming from India, does it mean that the tariffs on the product will depend upon the source of API and therefore again some degree of complexity there?
Pranav Amin
I don’t think so. I. Because if that is there. So anyway, right now in terms of genetics, there’s just not enough capacity forget in the US all over the world to deal with the formulation generic volumes. Now if you put the API into it, then where you’re going to get the product from ap, is this almost nothing? No. API manufacturing, generic API manufacturing facilities in the US There’s a dime a dozen. I mean, so there’s hardly. You can count them on your, on your fingers, you know, so I don’t believe that API will come. If that comes, it’ll be catastrophic.
Gagan Thareja
My point is, while, you know, that itself is a question by itself, my question is that let’s say you have a product, you know, manufactured by an Indian company which sources its API from China. Okay. Under the, under the tariff HTS tariff code, the tariff is, you know, determined by the country where the substantial transformation of the product has happened. In which case, if you know the API source from China or the final formulation, you know, it would, it would make, it would be a reasonable inference that substantial transformation has happened in China and therefore the formulation tariffs applicable to China are applicable on the product or is it the formulation tariffs applicable to India, which are applicable on the product?
Pranav Amin
I think from India only. Okay.
Gagan Thareja
All right. In terms of your, in terms of your US business, can you perhaps, you know, give some idea as to how do you see the full year panning out this year, especially given in context of the number of approvals you’ve had and as they scale up, going ahead?
Pranav Amin
Yeah, so I expect the US business to grow for the full year anywhere between 10 to 15%. I think we’ve launched about four products in the US in Q1. I think in the rest of the year we launched another 10 to 15 products. We should have a bit of launches in the US market and we’ll pick up some share. We believe so. I believe what, 10 to 15% is what I’d expect for the US business to grow this year.
Gagan Thareja
Okay. And how should we think of the India business? I mean, the first quarter you indicated was a bit subpar and you had some constraints around the upcmp. Is the whole year going to be a bit impacted by these changes? Changes, or you think recovery is in the works in the next quarter or two?
Shaunak Amin
No, it’s like I said, it’s, it’s a part of the process. We, it’s not a year long thing, it’s not a yearly thing. And like I said, it’s a matter of months because we’re working on it, SOS to resolve it. So I think, like I said, our time frames are a matter of months, not in the years. So like I said, that’s what I said.
Gagan Thareja
Finally, sir, can you give the gross debt numbers and also how, you know, you see the debt sort of panning out through the Year and roughly what numbers you could close here.
R. K. Baheti
So you meant on gross debt.
Gagan Thareja
Yes.
R. K. Baheti
So gross debt was at 1185 crores. I mentioned earlier net debt was at 967 crores. So you know, this is still still close to what we had at end of March in terms of the gross debt. So we see that, you know, of course the debt movement will depend on how the working capital ranges during the quarter. So we’ll be mindful of what we need to borrow going forward.
Gagan Thareja
But is it reasonable to presume that going ahead the debt can reduce and reduce substantially in the year?
R. K. Baheti
Maybe we discuss that in the next quarter. We’ll see how the trajectory of business growth is and what is the need for investing in working capital in the next few quarters considering the dynamics in US market specifically. Right, so we need to wait and watch. I’ll hold my comment on how the net debt will move. Whether there is going to be a trusted deduction or not, we will get to see in the next couple of years of quarters.
Gagan Thareja
Okay, thank you. I’ll get back in the queue. Thanks for taking the questions.
operator
Thank you. The next question is from the line of Damianti Kai from hsbc. Please go ahead.
Damayanti Kerai
Hi. Thank you for the opportunity again. Pranav, you mentioned in some of the plant utilization is right now very, you know, low. So at the network level it works. Utilization your US plants are operating at. And how do you see this moving?
Pranav Amin
We don’t give plant wise utilization but just to give you a flavor formulation. Plant F1 is our largest plant that’s at practical peak capacity, you know. Right. So at a practical capacity. So running at full capacity. The API plants are running pretty full as well. It’s the injectable dermot, the injectable derm and the encore and the new OSD facility which is actually the new OSD facility ramping up now and that’s at decent capacity utilization. It’s just the injectable and the Onco and the dome facility which are a little lower in terms of capacity utilization.
Damayanti Kerai
Okay, and then my second question is during the quarter your depreciation expense moved up to notably. So is this a new base to look look for?
R. K. Baheti
So in Q1 of this year we commissioned our indoor plant with a new manufacturing facility for branded business and that has added to the depreciation cost.
Damayanti Kerai
Okay. So current quarter represents the new base to look for the depreciation. Now the okay, thank you.
R. K. Baheti
Also guided for a capex of about 400 crores at the beginning of the year. So you may have to of course it will not happen all in one quarter. So as and when it gets capitalized, you know that also flow through into a deposition.
Damayanti Kerai
Okay, can you remind us where is this new. Sorry, where is this capex getting deployed?
R. K. Baheti
So it is CB like we said in the last quarter call as well, you know the most of the projects have got completed in terms of capacity augmentation. This capex is going to be more towards maintenance.
Damayanti Kerai
Okay, so majorly for maintenance and maybe very little towards the expansion or any upgrade part.
R. K. Baheti
Yes, that’s right.
Damayanti Kerai
That’s helpful.
operator
Thank you. Thank you with this. That was the last question for this session. I would now like to hand over the conference over to Mr. G. Krishnan for closing comments.
G. Krishnan
So thank you for all the questions. Hope you got clarity on our performance relating to quarter one. And in case there are further follow up questions, please do reach out to the team. Thank you.
operator
Thank you sir. Ladies and gentlemen, on behalf of Alembic Pharmaceuticals Limited, we conclude this conference. Thank you for joining us and you may now disconnect your lines.