Alivus Life Sciences Lt (NSE: ALIVUS) Q3 2026 Earnings Call dated Jan. 22, 2026
Corporate Participants:
Soumi Rao — General Manager, Corporate Communications and CSR
Yasir Rawjee — Managing Director and Chief Executive Officer
Tushar Mistry — Chief Financial Officer
Analysts:
Unidentified Participant
Presentation:
operator
It. It. Ladies and gentlemen, good evening and welcome to Alaiwis Life Sciences Limited Q3FY26 conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing then C door on your touchstone phone. I now hand the conference over to Ms. Soumi Rao from Alaiwis Life Sciences. Thank you. And over to you, Ms. Rao.
Soumi Rao — General Manager, Corporate Communications and CSR
Good evening everyone. I welcome you all to the earnings call of Allivis Life Sciences Limited for the quarter ended December 31st, 2025. From Alivis Life Sciences, we have with us Dr. Yasiraoji, our MD and CEO and Mr. Tusha Mistry, our CFO. Our board has approved the results for the quarter into December 31st, 2025. We have released it to the topics pages 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 strategy, 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 economy, conditions, government policies and other incidental factors, such statements should not be regarded by recipients and substitute of their own judgment. The Company undertakes no obligation to update or revise any forward looking statements or actual results may be differed materially from these expressed or implied by the forward looking statement. With that, I invite Dr. Yasir Gauoji to say a few words. Thank you doctor.
Yasir Rawjee — Managing Director and Chief Executive Officer
Thank you, Swami. Good evening everyone and welcome to our Q3 FY26 earnings call. Thank you for joining us and I would like to extend my warm New Year wishes to all of you. Before we discuss the Company’s quarterly performance, allow me to outline the broader industry landscape that is influencing our business environment. The global pharma industry continues to evolve amid a dynamic macroeconomic and regulatory environment. Demand remains resilient supported by an aging population, rising chronic disease prevalence and sustainable healthcare spending. We are seeing a gradual pickup across generics, APIs and CDMO services while tighter regulatory scrutiny and supply chain de risking are reinforcing the need for quality, compliance and reliable partners.
While some parts of the market continue to face near term challenges, the long term outlook for the pharma industry remains encouraging. With this let me draw your attention to our performance for the quarter and nine months. FY26 for Q3 we reported our highest ever revenue of 673 crores registering a growth of 14.4% QoQ and 4.8% YoY. Performance during the quarter was strong across the board with business firing on all cylinders. We saw a strong recovery in the CDMO business as new projects began contributing alongside continued momentum from the API generics business in red markets such as Europe, Japan, Latam Row and India, recording robust performance and contributing meaningfully to overall revenue expansion.
As expected, GPL business also saw recovery during the quarter. Revenues for nine months stood at 1863 crores registering a growth of 7.2%. More importantly, our non GPL business grew at 16.1% driven by growth across markets. This reflects the underlying strength of our diversified business across geographies and we expect this to continue its momentum in the overall growth driven by strong demand across all markets. Moving on to our profits for the quarter, our gross margin for the quarter was 58.9% up 330 bps yoy. Our EBITDA margin for the quarter was 36.4% up 510 bps y o y our highest ever reported quarterly margins.
Margins improved on the back of new product launches, favorable product mix and enhanced operational efficiencies. I am pleased to share that our CDMO segment has made a strong recovery delivering an exceptional performance in Q3 with revenue growth of 100% QoQ and 85.3% YoY in line with our expectations for a second half turnaround. This growth was driven by robust traction in the newer CDMO projects supported by revenue from the regular CDMO projects. Our expansion initiatives at Sholapur, Unkleshwar and the Hedge are progressing as planned. Our pipeline remains robust with 595 DMF and CEP filings globally as on 12-31-2025.
The high potent API portfolio remains on the development path with 27 products in the active grid representing a total addressable market of $70 billion. Of these, nine are validated, seven are in advanced stages of development and the remaining 11 products are progressing through lab development stages. Going forward, we continue to expect high single digit revenue growth for FY26 driven by strong and profitable expansion across our diversified non GPL segment and the continued ramp up of CDMO projects. We remain confident in maintaining healthy margins and expect it to range between 30 to 32% going forward, higher than our earlier guidance of 28% to 30%.
This is catalyzed by operational efficiencies and contributions from new product launches, a reflection of the strength and resilience of our business model. So with this, I now turn the floor to our CFO Tushar Mistry, who will walk you through our financial performance for the quarter in depth. Tushar, over to you.
Tushar Mistry — Chief Financial Officer
Dr. Yasir. Good evening everyone. Welcome to our Q3FY26 earnings call. Before we take questions from you all, I would like to highlight the key performance updates for the quarter and nine months ended 31st December 2025. For Q3 FY26, revenue from operations stood at Rupees 673 crores, a growth of 14.4% QoQ and 4.8% year on year. Gross profit for the quarter was Rupees 397 crores up 16.9% quarter on quarter and 11.2% year on year. Gross margins for the quarter stood at. 58.9% driven by new launches, product mix and operational efficiency. EBITDA for the quarter was at Rs. 245 crores up 26.5% QQ and 22.1% year on year. EBITDA margin for the quarter was 36.4% up 340 basis points. Quarter on quarter and final 10 basis points year on year. These are the highest margins we have delivered to date. PAT for the quarter stood at rupees 150 crores with PAT margins at 22.3% for nine months. FY26 revenue from operations stood at 1,863 crores, a growth of 7.2% year on year. Gross profit for nine months was at rupees 1,067 crores of 32.6% year on year.
Gross margins for nine months stood at 57.3%. EBITDA for nine months was at 620 crores up 22% year on year. EBITDA margin for nine months was 33.3% up 400 basis points year on year. Back for nine months stood at rupees 402 crores with FAT margins at 21.6%. Turning to therapeutic mix, CBS and CNS continue to lead the growth during the quarter with Both therapists contributing 51% to the top line. Ronic Therapeutics contributed 66% of the top line in QC FY26 R&D expenditure for QC FY26 was at least 23 crores which was 3.4% of our sales for nine months FY26 it was 66 crores 3.5% of our sales on the balance sheet and cash flow movement Capex for The quarter was rupees 105 crores and rupees 218 crores for nine months for FY26 we now guide the capex to be at around rupees 450 crores compared to our earlier guidance of 600 crores.
The balance of these 150 crores is expected to be deferred to FY27. We continue to remain an excess fee company with strong free cash flow. Generation of Rupees 221 crores in 9 months FY26 and the cash and cash equivalent of Rupees of Rupees 733 crores on the books as of 31st December 2025. In closing, we are confident that the continued demand and improved performance in H2FY26 will help us achieve steady growth for the year. With that, let us open the floor for Q and 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 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 Pratik Kothari from Unique pms. Please go ahead.
Unidentified Participant
Yes, sir. Good afternoon, sir. Good evening. Thank you. So one question. Despite, I mean, if you look at our numbers over the last two, three, four years, despite PLI going away, despite R and D spend which used to be 2.5% of sales ramping up, ramping it up to 3.54%, we still have been able to maintain margins and now we are kind of highlighting that we’ll be able to even go beyond that. So this margin differential from what it was two, three years back to now is much higher than what is being reported because of these things that are happening below.
So you can just highlight what has changed in terms of our business. What is it that we are doing? What is it that we are intending to do which is helping with all of this?
Yasir Rawjee
Okay, so see, there are three elements here. One is that CDMO has begun to contribute more. There are also launches that are happening across markets and usually newer products tend to get us much higher margins. Okay? I mean, in the first couple of years we can expect to see pretty good margins with newer launches and then it begins to settle down. So we have both of them plus on the operational side as well we’ve had, you know, we performed a lot better in terms of both raw material costs as well as on the operation side.
So all this put together and this is sustainable. Okay. I mean the thing is that that’s why we feel confident in guiding to a higher margin. So this is what has done it. Right. I mean we were also a little bit, you know, when PLI went away a couple of years ago, I mean we were also, you know, wondering whether we’ll be able to bring it back. But we’ve been able to do that and it’s happened steadily. If you see the last few quarters that we have been inching up and so that confidence is very high that we can do this and continue the momentum.
Unidentified Participant
Correct. Lastly on this capacity. So in terms of a breakup, I mean it seems there is some delay in this capacity coming up Also in Sholapur it seems the capacity that we had planned or guided earlier it seems to be much lower be it on the first backward integration or even the phase one. So we can just highlight what has changed how is apply from what we had said earlier to now.
Yasir Rawjee
Is a little delayed. It’s not going to impact business because see more than 80% of our business comes from the reg markets. Okay. And the Uncleswar dahed capacity expansion is well on track and it will deliver and basically give us the Runway for at least the next couple of years for the reg markets. So no challenge there. We have Mohol as well to service the row markets and Kurkum. So all that put together puts us in a reasonable position with respect to capacity. Sholapur is delayed by like three months. So we expect Sholapur to start operations by July of this year.
Tushar Mistry
So it’s a not delay. I mean it’s more like first phase we wanted to do about 600kl, now we are doing about 450, 500kl. So even the capacity that we are putting up initially has changed slightly because. See as we moved along, right. There’s been a fair amount of mapping that has happened. Right. And we’ve always said that our capacity expansions are going to be calibrated because there’s no point in building too much capacity and not utilizing it. You just create more under absorption. Right. So there, you know, we’ve sort of gone, you know, with a reasonable product mapping that will, that has happened already for Sholapur and as soon as the Plant starts in July, we’ll be able to see a fair amount of utilization of the asset.
Unidentified Participant
Correct. And in your opinion sir, how long does it take for a Solapur? You’ll start with row markets and then gradually switch to regulated market. So what would that timeline be?
Yasir Rawjee
See if we are going to validate products in Sholapur this year itself, this calendar year. The idea here is to go for shortage products so that we can trigger an FDA inspection soon. So there will be quite a bit of validation happening as well in Sholapur apart from the row markets, servicing the demand from row markets. So it’s going to be a kind of dual approach and hopefully, you know, if we can trigger an inspection in a year’s time, then, you know, I mean by FY20, late FY28, we should see regulated products happening from Sholapur as well.
Unidentified Participant
Great, thank you and all the rest.
Yasir Rawjee
Sir, thank you.
operator
Thank you. Participants who wishes to ask a question may press star and one. Now the next question is from the line of Ahmed Madha from Unified Capital. Please go ahead.
Unidentified Participant
Yeah, good evening and thanks for the opportunity. Just to understand the margin bit little better. Can you elaborate or explain little granularly in think in presentation you have mentioned three levers. One is the new launches, second is the CDMO business and third the efficiency. If you can break it up and explain a little bit better how the what is explained? Margin improvement in current quarter and your overall guidance as well.
Yasir Rawjee
So let’s go backwards when it comes to operational efficiency that impacts margins pretty much across the board. Okay. Because there’s, you know, there’s, I mean it’s all common there, right? When it comes to launches, obviously it’s those particular products that we’ve launched that are contributing much higher margins. You know, and again I explained in the last call that we’ve had launches, you know, in Europe, in China, in Latam and Russia. Okay. So these, all these launches have contributed very significantly to the margin. Interestingly, the same products really get as patents expire in Europe as well as North America and so on.
So this sort of Runway with the newer products is going to last us for some time. And that’s the second lever with respect to CDMO. We had expected that Project 4 and Project 5 would kick in in second half and that’s exactly what has happened. So Project 4 has started off in H1 but the volume pickup has happened much more significantly in H2 and Project 5 has also started kicking in. So again this also being sustainable going forward is something that gives us the confidence that we can, you know, sort of, you know, get to those margin levels pretty comfortably.
Unidentified Participant
And when you say efficiencies is it in terms of yields and the raw material cost or is it below the raw material cost line?
Yasir Rawjee
It’s both. It’s both. So I mean there’s been a fair amount of work, you know, on key products that has started giving us that benefit on better yields. So you know basically let utilization of raw materials and even on the energy side and you know, basically we are getting lower overheads on the products. So that that has also helped us.
Unidentified Participant
And in terms of capex, we explained to the earlier participant regarding how it doesn’t impact our growth. So I mean with the little bit of delay, little bit of capacity sort of fine tuning in terms of how much you will put, does that sort of risk our growth for next year or we have enough capacity and from existing as well as from Uncleshwar daheds from July to deliver us decent growth for next year. And you can also please comment how you see the next year growth based on the launches and the existing products.
Yasir Rawjee
The capacity is no longer a limitation. Okay. We were in a sort of bind sometime back about a year, year and a half back when we were running neck to neck with the recent brownfield expansions that we had at the Hedge and Amneshwar and they are going to become operational in the second quarter of next year. Both the Edge and Uncle Shore we should be fairly comfortable to service the reg markets. And like I said earlier, both these expansions on the brownfield side should give us a Runway of at least another two years comfortably for the REG markets.
With Sholapur coming in, we have a little more leverage in terms of moving the ROW products into Sholapur and that can further free up capacity if necessary. So capacity is not a challenge anymore with respect to the growth for next year. Again, you know I’m talking in terms of a fair amount of visibility that we have and so we want to continue to guide to a high single digit growth for next year as well. But certainly the margins will remain in the 30 to 32% range.
Unidentified Participant
And in terms of CDMO business, the number of projects that we have, is there any more visibility for new projects getting added? Any conversations are at the second of sort of conclusion or the project addition will be gradual from year on beyond the five we have. I’m assuming five.
Yasir Rawjee
Yeah. So there is good traction on cdmo. Hopefully we’ll conclude one or two projects by the end of middle of the calendar year. So let’s say first quarter we should conclude things are going well. We have even supplied some early quantities to the customers. So let’s see how that goes again because we have focused on the reg markets here for CDMO there’s always that lag time in terms of approval. But to lock in, I’m pretty confident that by first quarter of next year we should have. We would have brought in one or maybe two projects more into the.
Unidentified Participant
And. In terms of pricing environment, has there been any improvement or. It continues to be sort of a significant erosion kind of an environment. And from our portfolio perspective, new launches have done well. But is there sort of a pricing issue industry wise for the follow these business existing molecule or has there been any change or is it steady state?
Yasir Rawjee
I would say it’s fairly stable. I mean on our entire bucket we are guiding to 4 4.5% margin erosion. So it’s okay. I mean we are comfortable but what happens is we make sure that on those products where we are likely to see a price erosion, we do have the next generation process lined up so margins are not going to get impacted as a result of price erosion.
Unidentified Participant
Last bookkeeping question in the presentation and press release we have free cash flow number. Tushar, if you can please share the operating cash flow number for nine months or Q3 either way.
Yasir Rawjee
Yeah, the operating cash flow is. About 439 crores before capex. So that’s operating cash flow.
Unidentified Participant
Thank you so much.
Yasir Rawjee
This is for the nine months that I mentioned.
Unidentified Participant
Sure, got it. Thank you.
operator
Thank you. The next question is from the line of Yoga from Omega Portfolio Advisors. Please go ahead.
Unidentified Participant
Hi, thank you for taking a question. My question mainly had to do with the company’s growth plans. Given that we have high level of capability and a lot of cash on the balance sheet, why is there any reason we aren’t willing to be more aggressive either with our organic expansion or our inorganic expansion?
Yasir Rawjee
The organic is pretty well scripted. Okay. In terms of the portfolio build up, the choice of molecules that we are making, the capacities that we are building up to service the growth in the business through launches, with new launches and so on coming up in the next few years. Right. So that is pretty much on track. I hear you Right. In terms of the inorganic part. But see we want to be sure that and even that is well defined within our plans. Right. In terms of what kind of where we need to go in terms of inorganic.
So we are looking out. It’s not like we have shut our minds to that. We are pretty clear that when the right opportunity comes along, we will take the right steps. But obviously we are not just going to do things willy nilly. I mean, it’s hard on money and we’re going to make sure that it’s deployed well.
Unidentified Participant
My second question had to do with the R and D. As I understand we will be inaugurating a new R and D facility. So how are we trying to improve our RD capabilities over the next few years? If you could share some idea with us, like what would it be like?
Yasir Rawjee
So there’s going to be. Well, I won’t say improve, but I would say basically add to what we already have. Right. We are turning out molecules pretty quickly and also the complexity of molecules that we have is increasing in terms of complexity. So R and D has been pretty productive in Allivis. The question though is what else can we do? So we are looking very, you know, in a very focused way at flow chemistry because it has already yielded good commercial benefit and that effort is going to increase substantially. There’s also opportunities on the green chemistry side which we are working and I keep talking about API plus from time to time.
So in order to do more there, we are adding things like particle engineering and so on to, to benefit what we already have for more enhanced formulations. So that all that put together is going to give make our R and D even much more, you know, productive and give us more in terms of new business opportunities. Okay, fair enough. My final question is about the risk we’re facing.
Unidentified Participant
So if you could comment more on the risk we’re facing either in terms of say, getting more CDMO contracts or.
Yasir Rawjee
In general the market environment, if there’s any comment you could give us about that. Well, I mean, in terms of risks, the geopolitical situation is always something that we worry about because we have an international business and we don’t know what part of the world will eat up when, I mean, you know how things are sort of happening everywhere. Right. So given the fact that we have a global business, something could get impacted somewhere. But then that’s also a positive because no particular area in the world is going to impact us very badly. I mean this we’ve seen during COVID We saw this even before COVID Right.
Where we were basically because we were well diversified across geographies, we were able to manage small hits here and there. So risks are, I mean, not quantifiable at this point. Things seem to be going pretty well. But like I said, the geopolitical environment is extremely fragile right now. So we don’t know.
Unidentified Participant
My question was more with regards to the CDMO business. Do we see any threats to the CDMO business because it’s still a young business which we plan to grow. So are there any risks you’re facing. In getting more contracts towards the business.
Yasir Rawjee
Or is everything all right on that front? No, in fact things have only become better because having left the Glenmark umbrella, we are no longer looked at as a kind of part of a big pharma group that innovators do eye with a bit of suspicion. Although even when we were under the Glenmark umbrella we were operating independently and there was no real interference or any kind of thing from the parent. But still it’s a perception, right? People tend to look at you differently. So I mean now that that is also gone, we are looked at more favorably by many more companies.
So I don’t see a risk. Again, we basically are banking on the strength of a very strong process development platform which we can customize for our customers along with a, you know, well oiled manufacturing platform. Again with all approvals from, you know, major regulatory agencies.
Unidentified Participant
Okay, thank you so much doctor.
Yasir Rawjee
Yeah, sure. Welcome.
operator
Yes, thank you. Ladies and gentlemen, to ask a question you may please press star and one. Now the next question is from the line of Krishna Indusah from Quantum Asset Management. Please go ahead.
Unidentified Participant
Thanks Doctor. Challenge.
operator
We are unable to hear you clearly.
Unidentified Participant
Sir, can you hear me now?
operator
Hello, Your voice is sounding very muffled.
Unidentified Participant
Can you hear me now?
operator
Yes, please go ahead.
Unidentified Participant
Yeah. When you speak about implementing slope chemistry, are we going to implement it all across? What, like what percentage or what portion of our total manufacturing slope chemistry so we could generate more cost savings or efficiency in that manner.
Yasir Rawjee
So we are targeting the bigger volume, you know, APIs that we have. Okay. And let me clear that, you know, not everything is amenable to flow. Okay. So in a batch process, many times we do in situ conversion and we have like three chemical conversions happening in one. One batch that is not amenable to flow but where you have long reaction time, lot of energy consumption, excessive reagents that are being used there, you know, there’s a good possibility to use flow to optimize, you know, both, you know, material usage as well as energy usage. So there it can have a big impact.
We’ve had a very successful product that we brought down the cost to 40% of what it was okay in bank.
Unidentified Participant
So shall we go ahead?
Yasir Rawjee
Sorry, could you please repeat?
Unidentified Participant
Like could you put revenue wise could be implemented, could we implement no source MSC in the future? This is only could it be limited to some very limited portion of the revenue in the future? So let me put it this way. Your high potential API which will come for 28, 29 onwards, will there be flow chemistry or will there be large.
Yasir Rawjee
So no, high potency doesn’t have the volumes to basically enable flow reactors.
Unidentified Participant
You know I get that.
Yasir Rawjee
To make small batches and that’s more efficient in terms of utilization of you know the platform flow would be used for higher volumes basically.
Unidentified Participant
Okay, I get it. So there’s some still scope to implement for the flow chemistry in the, in the, in the future. Just on the turnover side, we are 2.3 right now. We have the best margins in last four or five years and the lowest turnover. So is there any scope of improving the asset fund in the future? Or it could be staying like that in 2.3.
Yasir Rawjee
Krishendu, this 2.3 is on the basis of our existing asset base which has historical activity. Now you would have seen that we are currently in the capex cycle. You are generally into an investment phase. This asset turnover will come down. We expect it to come down below to in the short, in the short term but eventually to stabilize this such around 2 level.
Unidentified Participant
I see. And still maintain the same margin. That’s what even if it comes down here, still making the same margin. And the last question my side, do we get into the future plan to get into innovation drug research or innovation pure, pure innovation, novel molecules, something like that. Do we have anything on the thought process?
Yasir Rawjee
No. No.
Unidentified Participant
Thank you for your time sir.
Yasir Rawjee
Thank you. Thank you.
operator
Thank you. The next question is from the line of Kartik Swaminathan from Kathmaran. Please go ahead.
Unidentified Participant
Good evening sir and thank you for taking my question. So my question is that if we look at the reactor capacity expansion plan we are going from 14, sorry 1400kiloliters to 2100kiloliters over the next year which is like almost a 50% increase in reactor capacity. But when you’re talking about revenue growth you’re only talking about a high single digit growth. So just wanted to understand why is there such a large difference? I mean obviously understand price erosion and other components will be there but it has been sent by such a big difference in terms of capacity and revenue growth.
Yasir Rawjee
So 400kl is just backward integration, right. And this we are doing to protect the larger, you know, molecules that bring in like 40, 50 crores of revenue per molecule. So I mean we’ve got to protect those businesses from a supply security perspective as well as From a margin. So that will be deployed for bi. And then the remaining is basically for the growth. And like you said, there’s price erosion. So the volume growth is much higher than what we are seeing. Okay, so that should cover us up. Plus, you know, we’ve been operating at 90% capacity and that can be pretty risky because if new business comes along then we don’t have, you know, any capacity, any kind of search capacity to be able to, you know, grab that business.
Unidentified Participant
Thank you, sir.
Yasir Rawjee
Sure.
operator
Thank you. The next question is from the line of Nitin Agarwal from Dam Capital. Please go ahead.
Unidentified Participant
Thanks for taking the question on the, on your input cost pressure because we have a bit of sourcing which we have, which happens in China. So there is this whole talk around end solution and general inflation in intermediate pricing coming from China. Are you beginning to see any of that and how do you see the plays out for the business? For us.
Tushar Mistry
So far it’s been okay. The only place where we are likely to see a little bit of challenge is that the MNB is strengthening against the dollar and then the rupee is weakening against the dollar. So I mean, we have a double hit over there. But so far we’ve got contracts that go anywhere from six months to a little more. So I expect that we should hold steady.
Unidentified Participant
You don’t see any challenges on that account as far as this?
Yasir Rawjee
No, no, no, nothing very serious. I mean, and then see, we’ve got, even if it is China, we’ve got a pretty well distributed supply base for most of our molecules. So unlikely that, you know, people can hold it on our head basically. I mean, you know, it’s not like a one vendor or a two vendor situation. We’ve got a pretty well spread out supply base and we have worked actively to bring a fair amount of that back to India.
Unidentified Participant
Okay, so how would sourcing from China change over the last two, three years?
Yasir Rawjee
Nitin, in terms of, you know, in terms of. It has not changed because we are getting benefited by lower prices or better prices, I should say. But then from a supply security perspective, if, you know, for whatever reason we ended up getting lesser supplies from China, we do have alternate suppliers out of India.
Unidentified Participant
Got it. And on the Siriano business, the contract that we have right now, what should be the peak sort of annual potential revenue potential for those contracts at peak, all of these five put together.
Yasir Rawjee
So it’s a bit of a spread here. Right. We had basically said that Project 4 and 5 together would get us around 12 million. It could be a little higher Also based on what we are seeing now, but we expect that to top out around second half of the next financial year. And then we were basically doing a sort of run rate of around 140 ish crores on the earlier three projects. So that might move a little bit, but not much. So we expect to be in a reasonably good place with respect to these first to these five projects on cdmo.
I mean we’ll have to look at it as a bundled kind of number because there is some dailyness. Right. Like I explained in the first three projects.
Unidentified Participant
And for F28, you believe that some more incremental wins that we typically get next year should begin to contribute.
Yasir Rawjee
Yeah, so we, like I said, right. We are in advanced stages for two more projects. Right. And hopefully, you know, we’ll be able to, we’ll know by Q1, you know, of next financial year of FY27. Right. Whether we’ve locked those projects.
Unidentified Participant
And in general with your conversations, I mean, are there the contract that you’re discussing with your various sort of partners is a size in scale of these contracts bigger than what we typically done or it’s kind of the same ballpark?
Yasir Rawjee
No, it’s the same ballpark. I mean we are looking at anywhere from like, you know, 4 million to 6 million kind of opportunities.
Unidentified Participant
And last one, on the generic API business, you’ve talked about a late double digit growth for from a broad guidance perspective. But you know, over the next two, three years, where do you think positive surprises can come from on this part of the business? How many things do play out?
Yasir Rawjee
The genetics.
Unidentified Participant
On the genetics, Yeah.
Yasir Rawjee
I mean there’s a fair amount of molecules that are going off patent now in the next couple of years and we have lined up, you know, across geographies. Right. Reasonable part of our portfolio will start playing out. I can’t give you numbers like hard numbers because frankly I don’t even sort of. We have a good estimate that we’ll be seeing a pretty good string of launches coming up in the next couple of years and going forward as well.
Unidentified Participant
And last one, on the current set of products that we already have commercialized, do you see reasonable volume expansion opportunities there? Or this part of the current commercialized portfolio is largely tapped out from a volume perspective.
Yasir Rawjee
So let’s split that into two parts. There’s a very mature portfolio which is pretty stable in terms of volume. Okay. That’s not growing like a lot. Right. Maybe like 2, 3% growth over there. Right. Okay. But then there are the newer launches where there are patent expiries that are still not exhausted. I mean you have seen patent expiries that are coming up in the next two years or so. So that portfolio will grow pretty well. Plus because it’s all post approval changes now, we are also looking into getting alternate source opportunities for that portfolio. So that’s where on the so called regular portfolio we’ll see much better growth.
Unidentified Participant
And when do you see the high potency portfolio sort of becoming meaningful for the business?
Yasir Rawjee
So that will start from late FY20. Late FY28.
Unidentified Participant
Best luck.
Yasir Rawjee
Sure. Thank you.
operator
Thank you. The next question is from the line of Tarang from Moldbridge. Please go ahead.
Unidentified Participant
Hi sir, good evening. Congratulations for a very strong set of numbers. Couple of questions, sir. One, on the raw material side, what percentage of our procurement are we solely dependent on? China for?
Yasir Rawjee
Less than 10%. But even there, like you said, solely dependent. Right. So it’s less than 10, but even there it’s a distributed base. So again there’s no single vendor dependence here.
Unidentified Participant
Okay. Second, how is the raw material environment? I mean does it, has it gone down further or it continues to be at the level that you witnessed in the earlier quarters?
Yasir Rawjee
No, it’s okay. But again. Right. I mean there are, there are some here and there, you do see a few products moving, but then we also get benefited on other products. So I mean it’s not as if it’s just going in one direction. So when you look at our portfolio in general, we are able to balance it out. The other thing that we are actively looking at is with Sholapur coming online by July, we would be bringing in certain volumes. Right. Where there are significant margins that we are leaving to the vendor. So those we have mapped out those and as soon as Sholapur starts, we’ll be shifting a good percentage of that into Sholapur.
Unidentified Participant
Got it. Second, sir, on the end product side to the earlier question, for your mature molecules, what is the kind of market share that you have now across the geographies that you’re for?
Yasir Rawjee
Which ones it ranges, it goes anywhere from sort of global market share of 10% to 35% depends on the molecule. Okay.
Unidentified Participant
And for your upcoming or so to say, relatively newer molecules, how would that number be? Number one? Number two, there is also an inherent expectation that the market for those molecules will also expand. Correct?
Yasir Rawjee
Yeah. Because patents are going to be expiring over time. Right. I mean in different markets it’s not like all the patents expire on day one. Right. So.
Unidentified Participant
And the idea there is from a filing perspective that’s the number that you want to get to. Basically it continues the flywheel of following your mature molecules. Correct?
Yasir Rawjee
Yeah. See, filings are done. Right. We’ve already filed, our customers have filed with our API but they can’t launch until the patents expire it. So we are already locked in. I mean we are able to confidently predict that. Okay. You know, if we’ve got two customers in a particular market, let’s say Brazil, and they are good front end players, then we can assume a market share of around 20% to 25% basis that we are seeing. Growth will come from those molecules.
Unidentified Participant
All right, and last year for nine months, FY26, what would be the volume growth for the business?
Yasir Rawjee
Nine months, FY26. We just told you in a second. I mean on the overall growth you can take about 5% price erosion. The balance is the volume growth.
Unidentified Participant
Got it. All right. Wonderful, sir. Thank you. All the best.
Yasir Rawjee
Sure. Thank you.
operator
Thank you. The next question is from the line of Ankit Minocha from Adez Ventures family office. Please go ahead.
Unidentified Participant
Hi, good evening. Just on a continuation of the previous participation question regarding volume versus pricing growth. So I mean how does pricing mechanics usually work across your portfolio? Like how much of the percentage pricing is based on spot pricing versus where do you have more stable contract prices there question basically coming from the point that if you are guiding for high single digit revenue growth, then what is the kind of estimations that you’re taking for pricing erosion or indel growth and where could be, kind of could be surprises there.
Yasir Rawjee
So I’ll answer it in two parts. Okay, so there is the regulated market, right, where we are locked in with our customers and there the market itself does not see significant erosion at the front end. So we have a pretty good comfort level in terms of prices staying relatively stable in those markets. But then there is the, there are the row markets where changes to API vendors can be pretty quick. And so there we have to be more agile and essentially be ready to match. You know, with respect to pricing. That’s one way of looking at it.
Another way of looking at it is that we have a mature, very mature set of molecules where it’s five years plus in the market now there things are pretty much set. So even the competitive intensity is defined. So we know we have so many players, we have so much market share and our customers have so much market share market share across whichever geography they are operating in. So there we don’t see major sort of pricing shocks. Okay. But it’s there, I mean there is a Mild erosion there as well because customers are customers and they will ask, right.
But it’s not very, very big. Right. It’s a very low kind of, you know, margin price erosion. Okay. And then of course we have the newer molecules where for a period of maybe 18 to 24 months we have stability. But then, you know, as the market starts becoming more intense and more players start entering, then we see erosion. But then we have the next generation process also sorted out. So that then comes in and sort of. So we see erosion there, you know, to answer the question, right, and that we can manage at least the margin side.
Unidentified Participant
Okay, so when you say, just when you say single digit, high single digit revenue growth for next year, then do you build in any base cases for what is the volume and what is the pricing breakup?
Yasir Rawjee
Yeah. So Tushar just answered the question, right, where we said that we are factoring in 5% pricing price erosion. And so, you know, and with a single digit, high single digit, you know, growth, we obviously should be geared up for about 15%, 15 to 17% of, you know, volume growth.
Unidentified Participant
Understood. That’s my second question with regard to the capacity expansion from 1400. 1400 to 2100. Odd. So I mean assuming currently, I believe you mentioned that your capacity utilization levels were about 90%. What are you envisaging as the utilization levels in FY27 and assuming we kind of reach those utilization levels, what would be the EBITDA margin profile of the business? Once those levels are reached, what could be the margin profile?
Yasir Rawjee
I’m not sure I got it. Okay, but let me try. You want to repeat what you just said, Ankit?
Tushar Mistry
Yeah. Basically after you are completed with your capacity expansion, what would be the, what is the EBITDA margin profile that we are looking at for the business and what are the capacity utilization levels that you’re looking at for FY 2017?
Yasir Rawjee
Okay, so capacity utilization should be between 85 and 90 when the new capacity comes online. Because I said, Look, 400 KL is getting utilized for backward integration and then the remaining is available for the regular CDMO and API business. Okay. We will operate at around 85%, which was like I said, it gives us the search capacity. The EBITDA margins are driven by a mix. Okay. And yeah, maybe we have some under absorption, but compared to, you know, our overall profitability, I don’t think that under absorption is going to significantly hit our ebitda.
Unidentified Participant
Okay, sure, sure. Thanks. And finally on the CDMO side, I mean, could you explain a little bit like how, like how does it integrate with the core API generic API business. What is it that the CDMO operations entail and overall the growth profile and the margin profile of this business versus your current business.
Yasir Rawjee
So it’s a shared capacity both with respect to the R and D platform. As well as the manufacturing platform. And the margin profile is certainly better in cdmo. It’s more stable. Okay. Once we lock in these projects, we don’t see that much erosion to begin with and then there’s always room for improvement on the efficiency side. So then that only helps us more with respect to the margins. It’s better than generic, no doubt about it. That’s clear.
Unidentified Participant
Okay, sure. Thank you. And all the best.
Yasir Rawjee
Thank you.
operator
Thank you. The next question is from the line of Sunil Kothari from Unique pms. Please go ahead.
Unidentified Participant
Thank you sir. For opportunity. This is not related to this quarter. My broad I want to understand is. You have so many years of experience.
Yasir Rawjee
With working with a different mindset or growth oriented promoter or maybe manager from metrics to landmark and now Nirma. And with this solid balance sheet, so many years of changes, very well absorbed from landmark dependency to non landmark business. The way we are investing in R and D. So can we as a investor maybe over three, five years, should we expect a better growth rate from you? I mean lowering your conservatism, investing little bit more maybe aggression, anything. Would you like to share thoughts on with now? Solid foundation on base. Would you like to go little faster or this is the way we’ll be working.
Okay, see there are two, three things here. Okay. I mean the industry has changed so much in 20 years. I would say it has had at least three avatars in the last 20 years. You can’t firstly apply the same logic that would be applied, you know, even, even five years ago. Right? Okay. So I mean those days are gone, right? Where you had paraphores and all that and you had big bonanza products. Where are those? Those are not there. And so what happens is our job is to read the market the way it’s shaping up.
Okay. That’s one thing. Second is that I think we’ve done a reasonably good job of reading the market because if you look at our non GPL business, it is growing well. The non GPS business is growing well. So 70% or 75. 70 to 75% of our business is growing in the mid teens or the low to mid teens. Okay. Because we made the right choices. Firstly in terms of portfolio. Right. Then in terms of, you know, the geographic expansion that we went on about.5, six years ago that we went on, we see that projects all over the world, that has definitely contributed.
Now with respect to getting aggressive, I think I answered that. Yeah, we are sitting on cash and hopefully that pile will grow a little more as we go along. But whatever choices we make beyond the organic growth has to fit in well with our overall plan of how we grow and how the overall pharma market is evolving. Okay, that will definitely be front and center in terms of how we think of. So growth will come. But to us, what is more important as a philosophy is maintain a high quality business. Because if you keep a high quality business, you generate cash.
The moment you go for a low margin business, volume business, you, you suck your working capital sucks out whatever money you make, whatever cash you make, and then you’re stuck. Okay, so we don’t want to go there. We’ve been fairly right in terms of getting reading the market. And so this will, I feel this is a sort of path that will keep us on a good track in terms of generating cash and then at the appropriate time, when we find the right kind of thing, we make the right investment and hopefully, you know, that aggressive growth that you’re talking about may come at that time.
Thanks a lot for clarification.
Unidentified Participant
Thank you.
operator
Thank you. The next question is from the line of Sneet Gala from RSPN Ventures. Please go ahead.
Unidentified Participant
Yeah, thank you for the opportunity. So most of the questions of my questions of mine have been answered. Just want to understand a bit longer. Term picture when the full capacity of Solarpur also goes live after what we are utilizing for the backward integration. So maybe from FY28 29, can we. Start seeing double digit growth?
Yasir Rawjee
Yeah, I’m sure we will. We will.
Unidentified Participant
Sure. Thank you.
Yasir Rawjee
Thank you.
operator
Thank you. The next question is from the line of Sajal Kapoor from ND Fragile Thinking. Please go ahead.
Unidentified Participant
Yes, thank you for taking my question, Dr. Raoji. Our CDMO model has long gestation cycles and much smaller deal sizes. It takes significant time to onboard a new project and even then the revenue opportunity is limited to 6 to 8 million kind of an annual run rate. In contrast some of the other Indian CDMOs who offer, you know, fee for service model, not the CRO type running on FTE models. I’m not talking about those. There are other CDMOs that offer free fee for service and they are scaling much faster targeting individual CDMO molecules of anywhere from 50 million to 100 million annual run rate.
Because these are NCE’s and they partner with the innovators early in the cycle from phase two and phase three onwards. And that offers, you know, a much higher magnitude as well as visibility of adding more molecules to the, to the pie. So their funnel size is also larger. I mean, why can’t we aim for higher magnitude and faster growth in cdmo? Because our scientific talent is also right up there.
Yasir Rawjee
Okay, let’s put this in some perspective here. How many such 50 to 100 billion dollar opportunities are fruit defined at least, you know, in our country? Right. Okay. Not many. Right. Because the reality is that these are all patented products which big pharma usually likes to keep with themselves. Maybe we could get an intermediate here and there that may give us, you know, some business. But the reality is that it is Ireland where they manufacture because Ireland has a 12% tax rate, I believe, and all big pharma companies park their profits there so they don’t take manufacturing out of Ireland.
This is the reality coming to us in terms of how we are positioned. See, we’ve got a pretty big portfolio that we can offer and we are offering in terms of life cycle management and to the specialty companies and we are seeing traction there. So yeah, you’re right. And we also are here that we will target those, but with respect to gestation, I think we are doing a pretty reasonable job. I mean, you know, the projects start kicking in commercially within two years of our first discussion. Literally within two years. And this is, I’m talking full commercial.
Right. I mean, we initiated, you know, Project 5 last November. Okay. So it’s been, it’s been a little over a year now and we are already saying that we’ll start seeing, you know, traction. So literally within 18 to 24 months, we are getting the projects on board. Yeah, it’s four to five million dollars. It could be a little higher, but then the projects are fructifying faster. Now if we play it right with the numbers we had three projects, now five, we are likely to get to seven projects in another half year. And there are more in the pipeline as we speak.
There are at least seven to eight projects that can active discussion. So, and the confidence level also, like I pointed out earlier, has gone up because we are not in a, you know, in a large pharma, you know, ownership. Right. So we could, we could get into, you know, we could get into this game. But I can assure you attrition is very high. Right. And you can count on, you know, one hand, okay, how many such 50 to 100 million dollar opportunities are really there in the entire country? Okay. So I don’t know, I mean, attrition is very high.
Unidentified Participant
Of course, Dr. Raoji, you know, more than anyone in the industry, attrition is high. But even in case of phase 3 clinical trial batches, the volumes are as big as 8 to 10 million even before the drug is commercial. On that Ireland thing, right? I mean, so Ireland takes N minus 1. So they do the end stage in Ireland to make it, you know, tax compliant in that jurisdiction. But coming back to our CDMO strategy, I mean, if you go back to the November 2022 investor roadshow that we did, we were very confident that we’ll double our CDMO by 2025 in that presentation.
And that has not happened for a variety of reasons that you have been explaining over the quarters. And I think it’s a common question from most of the participants or many participants that we want to be seeing alive as a little more aggressive in the growth. And I’m sure we’ll get there. But I think we are slightly behind in the CDMO segment. Otherwise, you know, given the complexity of products that we deal with, from particle engineering to flow chemistry, we are right up there. And you can compare our capability with anyone in the industry.
Yasir Rawjee
I do agree that from a capability perspective, we have it right. It’s defining what we take up and what we let go. Because again, it’s a cost benefit analysis, right? In terms of, you know, I mean, the big part of our business is a generics business. It’s also generating, you know, because of the portfolio, a pretty good growth as well as margins. So let’s see. I mean, we’ll take your suggestion, Sajan, and you know, let’s see how, you know, we will take that internally. Okay. But I can tell you based on it’s.
Unidentified Participant
Yes, yes, no, I appreciate that. Thank you so much for all the responses. Very thoughtful. Thank you so much and all the very best.
Yasir Rawjee
Thank you.
operator
Thank you. The next question is from the line of Taran from Old Bridge. Please go ahead.
Unidentified Participant
I mean, continuing on the earlier question, can you cross utilize your current capacities in case you wish to cater to the innovator for projects which are under development?
Yasir Rawjee
Yeah, we can because again, we have inspected sites, so that’s not a hurdle at all. Typically that’s the first sort of hurdle that you have to clear. And then if you’ve got good business continuity plans, then. And we do. So, you know, with a fair amount of search capacity now with Sholapur coming on board, we’ll be able to offer that as well.
Unidentified Participant
Got it, sir. And just I can’t speak for others. But from my vantage, I think, sir, we’ve seen reasonable execution on the non GPU part of the business on a year, on year basis. And I think on the CDMO business also, it’s an interesting niche that you’ve carved out for yourself. And you know, we would want you to continue doing this. I mean, it’s up to the management as to how they want to take forward the trajectory of the business. But I just wanted to bring that clarification. Thank you.
Tushar Mistry
Thanks.
operator
Thank you. Ladies and gentlemen, the deposit of time. That was the last question for today. On behalf of alaiws, I’m closing this conference. Thank you for joining us. And you may now disconnect your lines.