Alivus Life Sciences Lt (NSE: ALIVUS) Q1 2026 Earnings Call dated Aug. 02, 2025
Corporate Participants:
Unidentified Speaker
Soumi Rao
Yasir Rawjee — Managing Director and Chief Executive Officer
Tushar Mistry — Chief Financial Officer
Analysts:
Unidentified Participant
Ahmed Madha — Analyst
Tarang Agarwal — Analyst
murali krishna — Analyst
bharat sheth — Analyst
nitin agarwal — Analyst
avnish burman — Analyst
tarang agrawal — Analyst
ketan chheda — Analyst
alankar garude — Analyst
abhishek — Analyst
harshal patil — Analyst
alankar garude — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Alaris Life Sciences Limited Q1FY26 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 this conference call, please signal an operator by pressing start and zero on your touchdown phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Sumi Rao, Alivis Life Sciences Limited. Thank you. And over to you, ma’. Am.
Soumi Rao
Good morning everyone. I welcome you all to the earnings call of Alivis Life Sciences Limited for the quarter ended June 30, 2025. From Allivis Life Sciences, we have with us Dr. Yasir Raoji, our MD and CEO and Mr. Tushar Mistry, our CFO. Our board has approved the results for the quarter ended June 30, 2025. We have released the same to the stock exchanges and updated it on our website. Please note that the recording and transcript of this call will be available on the website of the company. Now I’d like to draw your attention to the fact that some of the information shared as part of this call, especially information with respect to our plans and strategies, may contain certain forward looking statements that involve risks and uncertainties.
These statements are based on current expectations, forecasts and assumptions that are subject to risks which could cause actual results to differ materially from these statements. Depending upon the economic conditions, government policies and other incidental factors. Such statements should not be regarded by recipients as a substitute of their own judgment. The Company undertakes no obligation to update or revise any forward looking statement or actual results may differ materially from those expressed in or implied by these forward looking statements. With that, I invite Dr. Yasir Rawaji to say a few words. Thank you. And over to you, Doctor.
Yasir Rawjee — Managing Director and Chief Executive Officer
Thank you, Shami. Good morning to everyone and welcome to our first quarter earnings call. I appreciate you all joining us on early Saturday morning to discuss our results. Before we delve into the company’s performance for the quarter, let me walk you through the broader industry landscape that is shaping our business environment. The global pharma industry is witnessing stable growth supported by increasing global healthcare needs, a surge in chronic diseases and advancements in biologics and personalized medicine. Regulatory bodies are also expediting approvals, particularly for critical therapies. At the same time, the industry is facing headwinds from pricing pressure, patent expiries, evolving compliance norms and geopolitical risks.
Strengthening supply chain resilience is becoming essential for long term sustainability. With this, let me turn your attention to our performance for the quarter. We reported revenues of Rupees 602 crores which is a YoY growth of 2.2%. This was primarily driven by our non GPL business which grew 14.5% YoY and 4.1% QoQ supported by successful new launches. However, this growth was offset by a 22% YoY decline in our GPL business owing to inventory rationalization by gpl. This consequently impacted our generic API business which saw a consolidated moderate growth of 3% YoY and degrowth of 7.1% QoQ.
Geographically, regions like India, Europe, emerging markets, LATAM and Japan contributed to the revenue growth. Moving on to our profits for the quarter, our gross margin for the quarter was 55.1% up 400 basis points y o wide driven by rationalized input cost and leveraged operational efficiency. Our EBITDA margin for the quarter was 30.1% up 210 basis points. Our EBITDA growth was 9.9% YoY. Our CDMO business remained subdued during the quarter. Validation batches for the fifth project have commenced. The commercialization is expected in H2. We anticipate a broader ramp up across all CDMO projects during H2. I am pleased to share that the H facility has received the EIR from the US FDA with an NAI classification following a routine inspection conducted from 26th to 30th of May of this year.
I would also like to reiterate that our Unkleshwar facility received its EIR earlier this year after successfully concluding a routine GMP inspection in late January. Now this has been a subject of discussion in many calls in the past where our facilities have not been audited for almost six years and in this last six months we’ve had both our facilities, our large facilities inspected by US FDA and we’ve had successful outcomes of both those inspections. So with respect to Sholapur, Sholapur facility is expected to begin in Q4 of this year. Our pipeline remains robust with over 569 DMF and CEP filings globally as on June 30, the high potent API portfolio remains on the development path with 26 products in the active grid representing market size of 61 billion TAM total addressable market.
Of these nine products are validated, three products are in advanced stages of development and the remaining 14 products are progressing through lab development stages. Looking ahead, we maintain our earlier guidance of mid teens volume growth for FY26. However, due to pricing pressures, revenue growth is expected to remain in the high single digits. We anticipate stronger performance in the second half of the year supported by a recovery in the GPL business and the ramp up of all CDMO projects. We would like to reiterate that margins will continue to be in the 28% to 30% band in the foreseeable future.
With this, I now turn the floor to our CFO Tushar Mistry who will walk you through a detailed financial performance performance for the quarter. Thank you.
Tushar Mistry — Chief Financial Officer
Thank you Dr. Yasir. Good morning everyone. Welcome to our Q1FY26 earnings call. I would like to briefly touch upon the key performance highlights for the quarter ended 30 June 2025 before opening the floor for questions and answers for Q1 FY26. Revenue from operations stood at 602 crores, a growth of 2.2% year on year. Gross profit for the quarter was at 332 crores up 10.2% year on year. Gross margins for the quarter stood at 55.1% which is well within our given guidance range. EBITDA for the quarter was at rupees 181 crores up 9.9% year on year.
EBITDA margin for the quarter was at 30.1% up 210 basis points year on year driven by better gross margins. This is on the higher side of our given guidance. Profit after tax for the quarter stood at 122 crores with PAT margins coming at 20.2%. Chronic therapies contributed 70% to the top line in Q1FY26. CVS and CNS therapies continue to lead the growth during the quarter. R and D expenditure for Q1FY26 was at rupees 21 crores which was 3.5% of our sales on the balance sheet and cash flow movement. Speaking of capital expenditure, CAPEX for the quarter was rupees 52 crores.
Capex guidance we have a CAPEX approval for the Board of from the board of rupees 600 crores including carryover of rupees 190 crores from FY25. We continue to remain a net debt free company and I’m happy to inform that we have generated strong cash flow from operations of Rupees 100 crores in Q1FY26 with cash and cash equivalents of Rupees 660 crores on the books as of 30 June 2025. In conclusion, we remain optimistic about our growth prospects supported by strong demand trends, the addition of new capacity and a robust order book. With that, let us open the floor for Q&A.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchdown telephone. If you wish to remove yourself from the question queue, you May press star and 2. Participants are requested to use answers when asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question is from the line of Ahmed Madha from Unified Capital. Please go ahead.
Ahmed Madha
Thanks for the opportunity. Good morning Doctor. First I have three questions. First start with on Solar port you mentioned around the Q4 timeline for the CapEx. How do you see the product filing from this facility coming up in the next year or so and when can it sort of start contributing to the top line? Can you give broad guideline on the timing over the next year or two?
Yasir Rawjee
You want to finish all your questions? Oh this is okay.
Ahmed Madha
Yeah, this is what? Second on the business mix between the landmark, non Glenmark. You spoke about it coming back in second half so I’m just trying to understand if you are when you’re guiding for a high single digit number for the full year, are you assuming the grandma business to be flat or slight decline because we haven’t seen such a blip in last 810 quarters. So just to understand how you are thinking the growth between both these businesses, Glenmark, non Landmark and lastly very small question on the numbers. So I see OPEX is up materially while top end with this 2%.
I think opex is up some 14%. Is there anything material to take note of? Yeah, that’s it.
Yasir Rawjee
Okay. Sholapur will come online in Q4. We’ll have to file products probably in the first half of next year to trigger inspections. But we do have a plan for Sholapur to do some row business. So it’s not as if we capitalize and then you know, there won’t be any business, you know done out of Sholapur. We plan to start row business from Srilapur in first half of next year. Coming to the gpl, non gpl. I’m not sure what you meant by the blip here. Okay, but look, I mean the reality is that our business overall is not a quarter on quarter business.
Let’s understand that there is waviness in the demand pattern from gpl. We expect that GPL business will also grow okay. And so we are pretty confident that, you know, this high single digit growth overall that we are forecasting is very likely to happen. Okay. With respect to the OPEX going up, I mean there’s. Tushar will take that.
Tushar Mistry
Yes. So there is no exceptional item on the OPEX front. In fact, it is in line with, if you look at our Q4 numbers also last year, it is in line with that. It’s a normal growth that we have. Seen in our books.
Ahmed Madha
Thank you.
operator
Thank you. The next question is from the line of Taran Agrawal from Old Bridge. Please go ahead.
Tarang Agarwal
Hi. Hi team, Good morning. So just a couple of things on your business. I mean, I understand that we can’t look at this business on a few, on few basis, but overall, on a year, on year basis, if we were to see this business last two, three years, we’ve seen this business not growing materially. So is that the new normal that this part of your portfolio? Probably it’s logical to see it growing at maybe 4,5% on a year, on year basis. How should we look at this? The DM of business.
Yasir Rawjee
It is lumpy. Okay. And there is growth and we’ve got to, we’ve also, you know, highlighted the fact that there is a contractual. You. Know, obligation in place. Okay. For that GPL business. Okay. So we are pretty secure in that sense. Right. You know, due to that. But overall, I mean, they have a pretty good business globally and we do supply, you know, to GPL for their global market. So I’m not particularly concerned about this quarter being, you know, lower than what we normally see. Right. Coming to the entire year, it’s difficult to see. But when we look at last year, I mean, it was okay, right. The GPL business grew reasonably, I mean, mid single digits. So I think, yeah, it could be between mid to high single digits.
But difficult to say. I mean, at this point.
Tarang Agarwal
The second question is on your pipeline. You know, if I look at your HP API pipeline, it’s been moving up reasonably well. I just wanted to see, given the last two years, the kind of investments that you’ve done in basically adding molecules to your grid. How are you seeing, you know, them getting active in the front end? I mean, have commercial supply started for any of these molecules? And from a timeline perspective, is this the timeline that you had always baked in, in terms of these molecules coming to four or there has been a slight delay in terms of commercial activation of these molecules.
Yasir Rawjee
We have of the 26 hypotent products, right. 12 are already have got firm customer Interest and that’s why we are validating. Okay. Otherwise we won’t be validating in the plant. So there is firm customer interest and this customer interest comes from across the geographies. Okay. So with respect to their commercialization that all is timed by the patent expiries. So we should see commercial activity on our Onco pipeline, on our high potent pipeline from late FY27. Okay. As the patents in some early markets start expiring and then the remaining 14 products that are progressing in the lab there is significant customer interest in those as well.
But yeah, we’ve not generated R and D revenue from those as yet.
Tarang Agarwal
Got it. So. Got it. And I noticed that this, you’re in advanced stages of adding one more iron sucrose molecule. If you could comment something on it.
Yasir Rawjee
Yeah. So that’s going pretty well. Right. We have another one about to get filed, an iron complex molecule. Right. And we’ve got very significant customer interest for that as well. We’ve got a total of three but we are actively considering two more to put in the grid. So that’s again a pipeline that will become pretty, pretty significant in the near future.
Tarang Agarwal
Okay. And from a FY26 Vantage, how are you looking at Capex sir?
Yasir Rawjee
So Capex C Karang there is a overflow from last year of 190 crores. Right. And we hope to start our R and D project, you know this year as well. So that plus Sholapur coming to completion as well as two big brownfield projects both in Uncleswar and also have to complete. So when you put it all together we expect to you know spend about 600 crore with the 190 overflow.
Tarang Agarwal
Got it. So that plan remains, I mean this is what you communicated in Q4 results at that status though that remains FY26 correct?
Yasir Rawjee
That’s right.
Tarang Agarwal
Perfect. Okay, thank you sir, all the best.
Yasir Rawjee
Sure. Thank you.
operator
Thank you. Participants who wish to ask questions may press star in one at this time. The next question is from the line of Bala Murali Krishna from Oman Investment Advisors. Please go ahead.
murali krishna
Hi, good morning. So in case of PDMA even if a safety project is commercialized so what kind of lambda we can expect.
Yasir Rawjee
Could you please come closer to the mic and repeat your question? Bala.
murali krishna
Yeah sure. So I’m asking about particular CDMO business. So now for projects running and we are average of 40 crores under it every quarter. So even if the fifth project is commercialized so by that time maybe we can have a numbers like 50 crores per quarter or there is some More room also for improvement. And any other, do you expect any other projects to commercialize in this year? After fifth project.
Yasir Rawjee
Okay, so we have another two projects that are in the pipeline. But these five projects by H2 should all be commercial. Okay. And with regard to whether we will clock 50cr per quarter, that’s a very strong possibility.
murali krishna
Okay. So I’m regarding capacity addition. So this year we are going to add around 40% March. And so it’s the revenue potential is proportional to the capacitance or like reactor capacitation. Or do we see any incremental revenue compared to current capacity?
Yasir Rawjee
See, not immediately. Okay. Because Sholapur is starting off that will be a large capacity. But a good portion of that capacity is for backward integration. But like I said earlier that we are going to start row business or rather move row business to Sholapur. So yes, Sholapur will contribute to revenue but it obviously won’t be at the level that you know, we get on a per kiloliter from let’s say uncles or from the hedge for that matter. So I mean it’ll kick off, it’ll kick in but it will take some time to stay to bring it to the same level.
Okay. You know, so we do expect that our fatr will drop a little bit. Right. But that’s okay. That’s a very normal thing. Right?
murali krishna
Okay. The fact is uncle, sure. And the haz260kl will contribute to the same level or it is also. It is not a backward integration.
Yasir Rawjee
No, uncle, and the hedge is not backward integration. See, the hedge is largely being done to facilitate our fourth project on CDMO because that demand is going up very quickly. Okay. So we hope to be able to complete the hedge in time to be able to facilitate that business. Okay. Ankleshwar has got so many products and like I said, we said in our communication that we do have launches. We did have launches in the last two quarters and we do have upcoming new molecules that we’ll have to service. So UN is largely for that. But yes, in terms of revenue we expect revenue should.
Revenue, you know, should come through.
murali krishna
Lastly sir, I understood that next year was adding for a high. But all this in fiscon if all these capacities are running. So what kind of numbers you may be expecting in F27 28.
Yasir Rawjee
You asked for FY26 27 28, 27, 28 27.
murali krishna
Yes.
Yasir Rawjee
I think we’ll at least maintain that. At least.
murali krishna
Okay.
Unidentified Speaker
There is upside potential. Okay. Because like I said a lot of the pipeline is maturing in FY27, 28. I even said even on encore. Right. Onco will start giving us second half of FY27. We’ll start seeing even our encore pipeline, you know, going commercial.
murali krishna
Okay, that’s one. Thank you.
operator
Thank you. Participants who wish to ask Questions may press star N1 at this time. The next question is from the line of Bharat Sheth from Quest Investment Advisors Private Limited. Please go ahead.
bharat sheth
Hi, good morning sir and thanks for the opportunity. But if we have to think from say fires perspective like DMO is a bigger opportunity in emerging. So how do we plan to. One is that you are doing physical capex that will help us in giving a more sustainable supply to the customer but developing a pipeline and second thing on investment in developing a new capability like ABC for biotech and third on the process efficiency portfolio chemistry investment. So how should we think and when do you think we are and how is. The second thing is our acceptance and as a CRDMO player in by the our customer.
Yasir Rawjee
Okay, let me go step by step. Okay, so let’s talk about CDMO five years, right? We will be a very credible player in the CDMO space in five years simply because we are already seeing that momentum. I just mentioned that apart from these five commercial projects, we have two now an active discussion and very likely that we will get those two projects. Okay. So if we keep that kind of hit rate then we are talking of a pretty significant number of projects in five years time. Okay. Now with respect to ADC biotech, see these are, these are all good things, right? And right.
But we feel that the chemistry platform is something that will give us a faster payback right on our investment if we continue to stay with the chemistry platform. Okay. And leverage that, you know, to build an even bigger portfolio. Right now this again has a benefit for our CDMO business as well. Okay. We don’t anticipate getting into any kind of biologic, you know, platform at this point. Okay. Because the number of opportunities that are available on the chemistry side are also very significant. Coming to flow chemistry, we’ve had some very good. In fact, one of our flow chemistry projects is now commercial and we’ve made a huge impact in terms of cost.
Okay. And so our confidence level in leveraging flow chemistry is very high. We currently have three projects that are in the pipeline in flow chemistry. Now what this does is that it gives us a very strong position in some key molecules. Okay. And it will impact our bottom line, you know, very significantly. And as we gain more market share because of our cost Position we are likely to impact top line as well. So the thrust will be in flow chemistry. Right. And that would just continue.
bharat sheth
What kind of investment that may require again? I mean building a normal, I mean chemistry process, chemistry, flow chemistry. And how do we, for next three years we have a strategy to invest.
Yasir Rawjee
So the good news Bharat is that in flow chemistry, right. The investment typically is about one third of what we do in batch. Okay.
bharat sheth
Okay.
Yasir Rawjee
So again the payback on that investment is also very quick. Okay. This is the experience. Now I’m saying 1/3 but it could be even half depending 50%. But I don’t expect it to be more than 50% of a batch. You know, on the commercial side in R and D we have to make investments but then those are small. And then once you made the investment in R and D and build a broad platform for flow chemistry, you know, equipment then that keeps getting used for newer projects as well. Okay, so it’s investment light also. I mean it’s not investment heavy.
bharat sheth
So when do we see. At the end of the third year. Now since he is so a kind of a benefit that you expect, maybe broader contour if you can give that is one and second. Now with backward integration of Solarpur, what kind of benefit that we expect in 27.
Yasir Rawjee
So like I said, right. It would be initially a bottom line improvement because of backward integration and because of the use of this technology. Okay. But top line benefit would take a little longer to come as we, you know, gain more and more market share. So that’s where we, we believe that you know, we will get benefited in three years. Definitely we’ll see a very significant benefit.
bharat sheth
Last question, if you.
operator
Sorry to interrupt. Mr. Bharat. May we request you return to the question for a follow up question? Thank you. The next question is from the line of Nitin Agarwal from TAM Capital. Please go ahead.
nitin agarwal
Good morning. It’s been about almost year and a half now since the ownership change happened. You had time to think through how you’re looking to grow the business and the opportunities which have been there. I mean is there, while you’ve been communicating the same since for the last few quarters. But is there any, you know, any dramatic course changes, any improved opportunity spaces that you begin to see that can impact our business as we go forward? I mean is there any, what I really mean to ask, is there a, I mean is there a major difference in the way you’re looking at the business as we were probably six months back in terms of opportunities?
Yasir Rawjee
Definitely. Nitin. I mean look we spoke about this. But I mean, the thing is we’ve got to look at different things and many things before we make a jump right into something because then we are committed to that. So we’ve been evaluating quite a few things and you know, our net cash position is pretty strong. So you can expect that, you know, we would be making some very deep plays depending on, you know, our evaluation and you know, how we move forward. It takes a little bit of time because again, I said the one thing, you know, that you’ve got to understand about Alaivus, right, Is that we’ve got a very deep pipeline.
I mean, 165 very good molecules, right. And we’ve seen the sort of, you know, with the launches, the kind of response that we are getting. Right. You know, and we want to be able to not leave that as is. But in fact use those, use the pipeline that we built over these last five, six years to leverage other things. Right. I referred to CDMO as one area, but that’s only one area. Okay. So we are in the process of evaluating what we need to get into apart from what we already do. Right. So you know, it’s work in progress.
Right. I can’t say much more, you know.
nitin agarwal
Okay. And now, you know, just really trying to put some quantification around whatever the way you’re thinking a two things. How big do you think CDMO gets as a business for you in six, five years? Three to five years as a proportion of business.
Yasir Rawjee
So if you recall, right, we had said that Today it’s about 6, 7%, but we’ll take it to around 12 to 15%. Right. In four to five years, time. And again, that confidence level is very high because we are seeing more and more projects getting added. Right. And the potential is pretty strong. Right. Both in life cycle as well as specialty.
nitin agarwal
Okay. And on the non CDMO part of the business, I think that is a business where relatively speaking, we’ve had more. I mean, CDMO is lumpy and once the contracts are signed, we know it’s going to take off. But the non CDMO part of the business, most of the peers also have been struggling with the generic API growth in general, structurally. I mean, is this, what is this a double digit growth business or this is the late single growth business on a more sustained basis, how should we.
Yasir Rawjee
Think about this business with our pipeline? It’s definitely double digit in the future. I mean, of course, you know, there’s the GPL element, right. And they don’t have that many launches as we are seeing in other markets and with our non GPL business. But that’s okay, right? I mean we did the seeding, we did the work, that work continues in terms of seeding. Right. And so, and we’re seeing that already. I mean you’ve seen the last 3/4 of Q3, Q4 last year, plus this year we’ve had a good number of new introductions into the various geographies.
So API business with us is again, due to a fairly deep pipeline and a good geographic spread is likely to continue. Right. Pretty strong.
nitin agarwal
So I mean, just to recap, obviously CDMO will take its own course as the contract gets signed up and I presume with the confidence that you are indicating the scale and size of some of these business, newer contracts should probably begin to inch up as you go forward, right?
Yasir Rawjee
Yes, yes.
nitin agarwal
And you still believe that API, despite the GNP talk, scale down, scale up, that keeps happening. It’s a double digit growth business on a sustained basis for us, at least for the foreseeable future. Yeah, thanks. And margin should be in the same 28, 30% bracket around it that we should be. That’s a model that we continue.
Yasir Rawjee
We lost pli. Right. But we are still delivering those margins. So I mean that should give you some idea, right, in terms of this, basically the strength as well as the sustainability.
nitin agarwal
Thank you so much. Best luck.
Yasir Rawjee
Sure. Thanks. Nitin.
operator
The next question is from the line of Avnish Varman from Vikarya. Please go ahead.
avnish burman
Yeah, hi, good morning team. Just one, one very quick question from my side. I just wanted a little bit color on the CDMO business. Doctor, you mentioned in the last call that it’s more of a life cycle management business. Can you just talk a little bit more about that? I mean, are all your customers innovators? And when you, when you say life cycle management, are they approaching you more for cost reduction or are they approaching you when you know the patents have, I mean, just a little bit more color on that side, please.
Yasir Rawjee
Sure. So yeah, you’re right. I mean in life cycle the cost reduction element plays a big role. Okay. And obviously we’ve got to demonstrate sustainability as well because typically these life cycle management projects come from the innovator who is moving to, from an in house API to their, to a different API. So you know, that element is important, cost is important, sustainability is important. I think we’ve proven that to our customers. Project four, Project five are both life cycle projects and they are significant in terms of their value. But like I said, there are two more active projects that we are Discussing, and those are specialty and life cycle.
So we are seeing reasonable traction even on the specialty side. Okay. And you know, the good thing about specialty is they do get a period of exclusivity. Right. And so margins can be very good. Okay. In that space. But we are open to both. The thing with speciality is that we need to do a fair amount of optimization on the molecule. Okay. You know, whether it’s polymorph, whether it’s a salt, whether it’s certain very narrow particle size range to, you know, help the formulator. So there are all kinds of nuances that have to be built into the API in order to facilitate, you know, a good, you know, formulation that is being targeted.
Okay.
avnish burman
And typically the innovator takes decisions from moving from in source to, let’s say TDM or partner is when the patent expires. Or there could be other reasons also.
Yasir Rawjee
See, that depends on how conservative they are. Right. I mean, like we have this Japanese innovator that’s project number five. You know about this, right. That they took that call only after the patent expired. Right. But then there are other innovators who come in earlier and sort of want to be ready with the variation approvals, site editions and stuff just before generic launch.
avnish burman
Makes sense. Last question. On the API side, if you can just give a little bit color on the product concentration, I mean, top five products would be what percentage of the revenue?
Yasir Rawjee
35. I’m making a guess, an educated guess. Okay. We’re not very dependent. I mean.
avnish burman
No, no, I just wanted a ballpark figure. That’s fine. It works. Thank you so much.
operator
Thank you. The next question is from the line of Taranga Grwal from Old Bridge. Please go ahead.
tarang agrawal
Hi, good morning. Just to follow up, you know, you made a comment in your initial address that the gross margin expansion is a function of lower pricing of raw materials and at the same time some operational efficiencies getting created. So if you could just elaborate a little bit more on that. Second, it does seem like there is pressure in the API market, but simultaneously, the pricing in the intermediates and raw material market is also very favorable for you. So does that mean that you’re deploying more to call it more inventory? How are you looking at it?
Yasir Rawjee
I think, Taran, you answered your own question. Really? So there is a benefit. Okay. On the raw material side, but it’s not all. It doesn’t all come from there, like we said. Right. We’ve had launches, very good margins on the launches. Right. Okay. And operation operationally also, you know, We’ve been working on newer infrastructure. All that is now kicking in in terms of better energy efficiency, you know, better realization on second gen processes and so on. Right. So all this has come together. Right. And that’s why we, you know, we were able to see, you know, 55% gross margins.
Right. As a result of.
tarang agrawal
Got it. And second, I mean when we see the non GPL business growing by 14%, that would have probably been a function of almost 20, 25% volume growth in that business. Correct. Would that be the right way to look at it?
Yasir Rawjee
It’s actually 18% volume growth in the non GPL business. Is it? Yeah. So there’s that much erosion. Okay.
tarang agrawal
Would it be because of the market dynamics or would it be because of you having launched new products?
Yasir Rawjee
Mix. Mix.
tarang agrawal
Okay, got it. Super. Thank you.
Yasir Rawjee
Sure.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press Sharon1 to ask a question. The next question is from the line of Ketan Cheda and retail investor. Please go ahead.
ketan chheda
Hi, good morning. Thank you for the opportunity. Doctor, you talked about how beat you are about the CDMO business and you also mentioned that on a sustained basis we can be a double digit growing business as well. So from a slightly mid to longer term perspective, say like you know, five years out, I just want to get a sense, not really a guidance, but a probabilistic scenario. Is there a possibility that we can probably cross a thousand crore mark on a net profit basis, say five or six years out? Is that a possibility on a consolidated level? Yes.
Yasir Rawjee
Yes. Yeah, I think So. I mean, CDM alone.
ketan chheda
No, no.
Yasir Rawjee
We are already 700 plus. Right. I mean, yeah, comfortably. I think we can do it. Not a problem. Look again, Ketan, we are focused on the pipeline. It’s a pipeline that addresses global market needs and then there is a level of value addition that we are bringing through cdmo. And there are other things that we are also looking at to create further value on the pipeline that we have. So I’m pretty confident that we’ll be able to achieve that. I’m not. Again, I’m not giving guidance. Okay. Like you said, you’re not asking for guidance. I mean this is for you as well as for everyone else on the call.
ketan chheda
Sure, absolutely. And just some clarification. You mentioned some figure about net profit. I didn’t get that. Right. I mean, March 25th net profit. What I see is that we are about 486, 485 kind of net profit. You said 700 or something. Not the profit. No, I was talking about net profit. Sorry, I was. When I, when I asked for the thousand number. Thousand crore number. I was saying from a net profit basis. Double in five years, kind of.
Yasir Rawjee
Yeah, approximately. Yes, we could be close, but let’s see.
ketan chheda
Okay, okay, sure, sure. And the other question I have is in the past call mentioned about something like, you know, you’re probably looking at some new avenues and you alluded to that in some commentary a few minutes ago as well. Is there a possibility that we could also do some kind of an acquisition of a company where we see a lot of potential? Because I think balance sheet could support that. Is that a possibility?
Yasir Rawjee
Yeah, inorganic is definitely on the table.
ketan chheda
Oh, okay. All right. All right. Thank you, Dr. Vishal. The best. Thank you.
operator
Thank you. Participants who wish to ask Questions may press charan 1 at this time. The next question is from the line of Alankar Garude from Kotak Institutional Equities. Please go ahead.
alankar garude
Hi, good morning everyone. So you mentioned about commercial launches for the high potent API segment starting from late FY27. Similarly, can you comment on the broad timeline of the one filed iron complex and the two in advanced stages of development?
Yasir Rawjee
Anankar one is being reviewed. Okay. I mean one is under review, but you know, with these molecules. Right. There’s a lot of back and forth that both the ANDA player and us are sort of right now addressing okay with fda. So I mean, on the optimistic side, I would say six months. Right. But it could even go beyond that. I mean, there’s a lot of characterization work that FDA comes back and asks for. Okay. Similarly, when I said the other two projects are also moving pretty in a good direction, the customer interest here is very high.
Okay. Again, it relates to the API characteristics. So while there are different APIs out there, our API in both these projects is in early formulation. Development work is extremely amenable for the right kind of formulation in terms of basically in terms of bioequivalence. Okay. I mean at the end of the day it’s all about bioequivalence that us FDA cares about. So. And obviously you have to demonstrate that. Right? So here, you know, the traction is good as far as approvals go. You know, it’s basically when the agency comes back and says, okay, you’re approved. Right.
But again, like I said, it’s both the ANDA players and us that are working simultaneously to satisfy the queries raised by us fda.
alankar garude
Got it, sir. The second question, when you say inorganic is definitely on the table. Can you elaborate on this, which areas are you looking at? Is it more on the capability side and less on the capacity side? Any color on that would be helpful, sir.
Yasir Rawjee
Okay. See capacity, you know, we have enough capacity, I would say. Right. Of course it would be nice to have an additional U.S. fDA site of the dahed size. Right. Also. Right. Just to, you know, be very safe. Right. With the way the portfolio is growing. Right. But really at this point we’ve done so much work at both Uncleishwar and the H to build capacity that we have a good two year Runway there. So we would not be looking in the capacity space for sure. Right. Unless something really cheap came along. I mean, you know, but we’d rather spend our money to sort of enhance the platform and you know, create business opportunities that are beyond the current, you know, type of opportunities that we chase.
I mean, that’s all the color I can give you.
alankar garude
Fair enough, sir. That’s it. From my side. Thank you. And all the best.
Yasir Rawjee
Okay, thank you.
operator
Thank you. The next question is from the line of Abhishek from Padmaja Investments. Please go ahead.
abhishek
Am I audible, sir?
Yasir Rawjee
Yes. Yeah.
abhishek
So my question one is on that. I’m looking at your presentation. So I see six part number like in FY22 to 3.4 and now it is in the 2.5 range. Is there a reason like why it is coming in and what is the number that we can mention going forward? That’s my question one. And question two is, can you comment on the new platforms that you’re planning to build? I remember mentioning that was in the past two conference calls.
Yasir Rawjee
Yeah. Hi Abhishek on the fatr. You know we have been saying in the past that while we are part of Denmark pharma, the investments. Were not. Very high and that was the reason why the FATR was that high. Now we have got into the investment phase and building capacities for our future growth and we have been adding to. This. To this kind of FATR going forward until the time will remain in that investment phase. We will see this fat pressure on the FATR going forward as well. But we don’t expect that to go below two at any given point of time. We are trying to manage our capexes in that manner.
abhishek
Okay. So there is currently slack in capacity because that will be used going forward because you have a strong pipeline. That’s the reason why it is down as of now. Understanding, right?
Yasir Rawjee
No, no, no. I mean look at the industry. We are still at the top of the table in terms of our asset utilization. I mean just Just, just compare us with anyone, right? Most companies are hovering around 2 or less than that. Even the top companies in our area in our, in the API business, right. Are between 1.5 and 2. So I mean, you will have to give it to us that, you know, we’ve been pretty efficient in our utilization, you know, of CapEx and you know, because of our, you know, our capacities are utilized pretty efficiently.
abhishek
I’m just trying to understand the reason for the fall. So I do get that it is high and I look at that, I’m trying to understand, look at the same.
Yasir Rawjee
Two companies that you’re talking about in terms of asset utilization, right? They are not at two also. Okay.
operator
Thank you. The next question is from the line of Ketan Cheda, a retail investor. Please go ahead.
ketan chheda
Hi. Thanks for the opportunity again. Doctor, I have a question. On the GPL contract you mentioned there is an obligation from the GPL side. Could you please clarify by when does that obligation end?
Yasir Rawjee
The obligation is for five years. We have completed one year on that. We still have four years as a. Part of the contract.
ketan chheda
Okay. Okay. Thank you so much. Thank you.
operator
Thank you. The next question is from the line of Abhishek from Padmajai Investments. Please go ahead.
abhishek
Actually, I didn’t get the answer from the second question, sir, regarding the new. Platforms that we are planning.
Yasir Rawjee
Oh, sorry. Sorry about that. Yeah. So see, with respect to new platforms, right. One thing that we are very clear about, right, Is that we are not going to move away from the chemistry platform. There are good opportunities on the biologicals and stuff, but we’ll be going too far away and then that’s like running two platforms simultaneously. So that doesn’t make sense. The whole idea is that when you invest money in R and D as well as on the commercial facilities, you want to be able to have synergy as well. So that, you know, it’s not a one plus one two game.
You know, you want to have one plus one to be more than two. Okay. That’s the, you know, that’s the way this business works, right. And again, it addresses the earlier thing about how much do you sweat your assets, right? So I mean, we are clear, right, that we want to be able to, you know, stay with the chemistry platform, leverage the, you know, portfolio that we have built even more. Right. And you know, you know, basically do more with less.
abhishek
Okay, thanks.
operator
Thank you. The next question is from the line of Bharat Seth from Question Advisors Private Limited. Please go ahead.
Unidentified Participant
Hi sir. Thanks for the opportunity. Earlier you said this fourth CDMO Project that we are running that is largely is on life cycle management. Is that correct understanding?
Yasir Rawjee
No. The first two are specialty, the next, you know, and then the third one is life cycle and the next two are also life cycle.
Unidentified Participant
Is that fair understanding? Life cycle management is the most stable revenue than the kind of, I mean specialty. We had lumpiness or how should we think about it? And.
Yasir Rawjee
Okay, see what happens in specialty is that they’re breaking into the market with something new. Right. It does take a little bit of time, right, okay. To stabilize on the. Stabilize the business. Right. With life cycle there is already a market that is innovator has a market. In fact, they are trying to keep as much of it with, you know, lower cost API. Okay. So there it’s a different. They’re trying to basically compete with the generics, right. On the life cycle side. So the sort of outlook on the market is more stable. I would say. Okay. On the life cycle part. But on the speciality side it’s a bit lumpy. I do agree. But then the margin profile is very different.
Unidentified Participant
Okay,
Yasir Rawjee
okay. You have a very. You have a significant difference on the margin side.
Unidentified Participant
Okay. On second side, I mean, so there could be some price pressure. Every year will be there for this life cycle management product. These are the specialty that fair understanding.
Yasir Rawjee
No, I don’t necessarily agree there because what happens is usually with both specialty as well as life cycle, we have longer term contracts.
Unidentified Participant
Okay.
Yasir Rawjee
And we also have built in clauses for prices clean or cost escalation and so on. Rights that, that help us to retain, you know, the margin.
Unidentified Participant
Second question, sir, on this pipeline of 5, 6 project that we are at, so if you can give more color is how much is could be on the life cycle and how is a specialty side?
Yasir Rawjee
So right now with five projects, right. The first two are specialty in the next three year life cycle. Right. What was the question again? I mean, what would be, I mean. The project which are in pipeline for the future. Pipeline, yeah. So right now we are engaged in one life cycle. And I mean the project six and seven, it’s not yet enough in the bag. Okay. By the way, we are in advanced stages. So. But one is life cycle, one is specialty.
Unidentified Participant
And so how we are developing the capability and what would be our strategy in the CDMO business? How to, how to look at, I mean a specialty visa life cycle and what will be our effort?
Yasir Rawjee
See in life cycle, right, there is already dossiers that are filed in all geographies, right. Or various geographies. Now the key here is to you Know basically push through regulatory, the variation filing. Okay. And that has to be done in terms of, you know, the product being similar, the API being similar to the existing API that they use. So basically we have to mimic the API of the innovator in all ways, especially physical properties. Becomes very important.
Unidentified Participant
Okay.
Yasir Rawjee
That, that is one, one thing you have to do. But then there is also, you know, hand in hand with that. Right. What is the faster way to get through our API, you know, into their file and then they get the approval. So those are the challenges. Okay. Of course you have to meet cost. I said that earlier. So the cost is done. You don’t get selected also. Okay, so this is.
Unidentified Participant
Yeah, go ahead. Sorry.
Yasir Rawjee
And on the specialty side, basically it’s all the customization that they need. So what are the major challenges that you see current, I mean in our generic side as well as. I mean this whole overall major challenge. If you can elaborate. 2, 3 to go @ faster pace. Yeah. Can we, can you come back? We will take it correct.
Unidentified Participant
Sure. Thank you. Thank you. And all the best.
Tushar Mistry
We’ll connect separately. There are people on the queue and we have shortage of time.
Unidentified Participant
Thank you. Thank you.
Yasir Rawjee
Thank you. Yeah, thank you.
operator
Thank you. The next question is from the line of Arshal Patil from Mira Asset Capital Markets. Please go ahead.
harshal patil
Yeah, thank you. Sir, good morning and thanks for the opportunity. Sir, just to clarification one, we said the brownfield project is basically aimed at catering to the CDMO project for largely. So sir, once the Brownfield is done. Would it take some time to really. Start the commercial supplies for the project? 4 or it can be immediately done. I mean, just wanted to know if. There would be any validations for the ground or something like that. Or it can immediately start around.
Yasir Rawjee
In this case it’s immediate because already commercial we are sort of tight on capacity.
harshal patil
Right. And the second thing, just your politics. Within the CDMO space we’ve been talking about life cycle and export. So just wanted to know in a. In a year of four quarters, is. There any seasonality or any demand, you. Know, obtain trends from our customers that we’re seeing for these five projects? Or it’s like, you know, it could be depending upon their production schedules. How does that work?
Yasir Rawjee
Any market favor around that? There is. I would say it’s seasonal. What has happened is that two of our specialty projects, you know, the customers have gone for a new indication for both of them and those are taking a little bit longer to materialize in terms of, you know, having new indications. So this is the challenge Right. But it’ll. I mean, look, there is an established market. They have a good footprint. It’s just that the growth that we expected. Right. You know, is not. Is not there.
Unidentified Participant
Right.
Yasir Rawjee
At this point. Okay. That’s what I’m saying. Got that. So that helps. Thank you.
harshal patil
Thanks a lot. I’m organized. Yeah.
operator
Thank you. The next question is from the line of Alankar Garude from Kotak Institutional Equities. Please go ahead.
alankar garude
So one question on R and D. If you look at our R and D in the last two years, especially after the change in ownership, it’s increased a bit, both on an absolute basis as well as a percentage of sales. But if you look at the absolute quantum, maybe 65 crores in FY23 was at 80 crores in FY25 and maybe 21 crores as you reported in QL. So the question is, is this enough to keep on growing our generics business at a fairly strong pace and at the same time increase the CDMO contribution to that 12, 15% in the next four, five years, which you mentioned, or do we really need to increase our R and D even further if we have to keep on growing at that pace?
Yasir Rawjee
It’s a very good question, Anankar. I mean, on CDMO we will have to add a little more muscle. Okay. But for generic, we are good. In fact, there has been a kind of shift internally in resource allocation for generic, where we are doing more backward integration projects and more CIP projects. Right. For next gen processes. Right. Okay. While we, you know, we’re continuing to build a pipeline, so I think there would be a slight uptick in terms of R and D spend just so that we have enough strength in all these platforms. Okay. And the reason why it has gone up is also because of the platforms.
You know, going forward, I mean, I don’t think it will exceed 4 to 4.5x of revenue. Right. After everything we do. Sorry. Percentage of revenue.
alankar garude
Got it, sir. That’s helpful. Thank you. Sure.
operator
Thank you. Ladies and gentlemen, due to time constraints, that was the last question for the day. On behalf of Alivis Life Sciences Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your line.