Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Alivus Life Sciences Lt (NSE: ALIVUS) Q4 2026 Earnings Call dated May. 15, 2026
Corporate Participants:
Soumi Rao — General Manager, Corporate Communications and CSR
Yasir Rawjee — Managing Director and Chief Executive Officer
Tushar Mistry — Chief Financial Officer and Senior Vice President
Analysts:
Unidentified Participant
Ahmed Madha — Analyst
Krishnendu Saha — Analyst
Sunil Kothari — Analyst
Nitin Agarwal — Analyst
Yog Rajani — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4FY26 earnings conference call for Alaibis Life Sciences Limited formerly known as Glenmark Life Sciences Limited. 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 Star then 0 on your Touchstone 4. Please note that this conference is being recorded.
I now hand the conference over to Ms. Chaumi Rao. Thank you. And over to you, ma’. Am.
Soumi Rao — General Manager, Corporate Communications and CSR
Good morning everyone. I welcome you all to the earnings call of Alivis Life Sciences Limited for the quarter and financial year ended March 31, 2026. From Elizus Life Sciences we have with us Dr. Yasir Raoji, our MD and CEO and Mr. Tushar Mitzri, our CFO. Our board has approved the results for the quarter ended March 31, 2026. We have released it to the stock exchanges and updated the 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 and involve risks and uncertainties. These statements are based on current expectations, forecasts and assumptions that are subject to risks and 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 statements. Our actual results may differ materially from, from those expressed in or implied by these forward looking statements. With that, I invite Dr. Yasir Raoji to say a few words. Thank you. And over to you, Dr.
Yasir Rawjee — Managing Director and Chief Executive Officer
Shomi. Thank you. Good morning everyone and welcome to our Q4 and FY26 earnings call. I am pleased to share that this year marks an important milestone in the journey of Alivis Life Sciences as we complete two full years with Nirma as our promoter. During this period we transitioned and strengthened the foundation of our business as we position the company for its next phase of sustainable growth. The partnership with Nirma brought enhanced financial strength, long term stability and greater flexibility to invest in future growth opportunities.
Our focus on building a more diversified and resilient business model remained while we have accelerated strengthening our product port portfolio, expanding capabilities and steadily improving the overall quality of business during this period we have faced some headwinds like uncertainties around tariffs and regulatory shifts. These factors continue to disrupt supply chains, elevated logistics and energy costs and created uncertainty across global markets, making resilience and agility increasingly critical.
Despite these challenges, Alaivis has not only navigated this environment successfully but has also meaningfully improved the quality of its business. This is reflected in the strong and consistent performance of our non GPL segment whose contribution to the overall business has steadily increased over the years from 59% in FY22 to 71% in FY26, thereby reducing our dependence on the GPL business. This growth reflects the increasing diversification of our portfolio and geographies supported by robust demand across regulated markets and sustained momentum from new product launches.
We expect the contribution from the non GPL business to continue to increase going forward. We also witnessed a meaningful recovery in the CDMO business from Q3 of FY26 as existing projects gained traction and newer projects scaled up. Notably, the improvement in the quality of our business is reflected in our profitability profile. We continue to improve our EBITDA margins and remain among the industry leaders in profitability. To add More perspective, between FY24 to FY26 our revenue CAGR stood at 5.7% while EBITA CAGR during the same period was 15.8%.
In absolute terms, we approximately added 270 crores of incremental revenue and 270 crores of incremental revenue over the last two years and 220 crores on the EBITDA side, taking our margins to 33.6%, the highest in our history. What is particularly noteworthy is that this improvement was achieved despite despite the loss of PLI benefit. This was driven by a favorable product mix, disciplined cost management, operational efficiencies and an increasing focus on high value differentiated products.
As a result, we have consistently generated healthy cash flows, strengthened our balance sheet and maintained a net debt free position. Over the last two years we have demonstrated the resilience of our operating model and the strength of our diversified portfolio. This has reinforced our confidence on the strategic direction we have taken as this steadily translates into a stronger, higher quality and more sustainable business. Moving to our full year performance, our revenue for the year stood at 2,552 crore, registering a 6.9% year on year growth and with the non GPL business leading the momentum with 13% growth.
This performance was supported by strong execution across markets including Europe, Japan, Latam Row and India. Growth was further aided by new product launches and the recovery in the CDMO business, we have added 11 new products during the year and the current portfolio stands at 176 unique molecules. We have also added 49 new new customers during FY26, taking our total base of customers to above 900. We deliver EBITDA margins of 33.6%, expanding by 360 basis points, highlighting the inherent strength and operating efficiency of our business.
On the capex front, Sholapur Phase one is progressing as planned and is expected to be operational in Q2 of this year while construction of the RD center, the new R and D Center in Taloja in Navi Mumbai is also underway. Our pipeline remains robust with over 611 DMF and CEP filings globally. As on March 31, 2026, the high potent API portfolio remains on the development path with 28 products in the pipeline. 12 of these products are validated, 7 products are in advanced stages of development and the remaining nine products are progressing well through lab development stages.
Given the ongoing geopolitical conflicts and uncertainties around global demand, we continue to remain watchful of the external environment. However, we remain confident in the strength of our business fundamentals and our ability to sustain EBITDA margins in the range of 30 to 32% going forward. With this, I now turn the floor to Our Team CFO Mr. Tushar Mistry who will walk you through our financial performance for the quarter in depth. Over to you Tushar.
Tushar Mistry — Chief Financial Officer and Senior Vice President
Thank you Dr. Yasir. Good morning everyone. Welcome to our Q4 and FY26 earnings call. Adding to Dr. Yasir’s commentary, I would like to share a few insights on our performance over the last two years, particularly how our growth profile and profitability have meaningfully impacted improved Our growth has become more broad based and importantly our dependence on any single client is gradually reducing. To illustrate these While our GPL revenues have remained relatively stable over the past two years, our non GPL revenues have grown at a CAGRADE of 7.5% during the same period.
This shift in mix is also reflected in our profitability with margins improving from 28% in FY24 to 34% in FY26. This clearly demonstrates the new business we are adding is more profitable and value effective in nature. With ongoing capex and continued investments in new technologies and products, we remain confident in our ability to sustain this margin trajectory going forward. Now I would like to highlight the key performance updates for the quarter and Full year ended 31st March 2026 for Q4FY26 Revenue for operations stood at 689 crores reflecting a growth of 6.11% year on year.
Gross profit for the quarter was Rupees 418 crores, up 14% year on year. Gross margins for the quarter stood at 60.7% up 420 basis points year on year driven by new launches, product mix and operational efficiency. EBITDA for the quarter was at Rs. 237 crores up 13.8% year on year. EBITDA margin for the quarter was 34.4% up 230 basis points year on year. PAT for the quarter stood at 163 crores with PAK margins at 23.6%. For full year FY26 revenue from operations stood at 2,552 crores, a growth of 6.9% year on year.
Gross profit for FY26 was at 14. 85 crores, up 13.7% year on year. Gross margins for FY26 stood at 58.2% up 350 basis points. EBITDA for FY26 was at 858 crores up 19.6% year on year. EBITDA margin was at 33.6% which was up by 366 basis points year on year. PAT for FY26 stood at 565 crores with PAT margins at 22.1%. Turning to the therapeutic mix, CVS and CNS continue to lead the growth during the quarter with both therapists contributing 50% to the top line. In addition, we are gaining traction in newer therapies like respiratory and anti L3 which collectively contribute more than 10% of our revenues.
Now chronic therapies continue to outgrow acute segment and contributed 67% to the top line in FY26. R&D expenditure for Q4 FY26 was Rs 25 crores which was at 3.6% of our sales. And for the full year financial 26 it was Rs 91 crores again 3.3 of our sales. Before I delve into cash flow details, I would like to first highlight a fundamental shift in how the company is utilizing its cash. As many of you are aware, prior to FY24 while our operating engine was strong and consistently generated cash, a large part of that cash was upstream.
FY24 marked a clear inflection point. Over last two years we have generated cash of above 984 crores of which we have invested in capex of 472 crores, paid dividend of 61 crores and resulted in a watch list of 451 crores. Let me now move to the current year’s cash flows. As of 31st March 2026 our cash and cash equivalent stood at 782 crores with capex for the year being 306 crores. Looking ahead to FY27 we plan to incur a capex of about 540 crores which includes carryover commitments from FY26 as well as fresh capital investments.
Importantly, this entire CAPEX will be funded through internal approvals. These investments are focused on building new capabilities at Sholapur, our greenfield project as well as strengthening our R and D platform. The capacity we are adding today will take us to 1198 KL. From 1190 KL FY24 to a planned 2690 KL by FY28 positioning the company to drive sustained growth well beyond FY28. With that let us open the floor for Q and A.
Operator
So shall we open the floor for questions?
Unidentified Participant
Yes, we can start.
Questions and Answers:
Operator
Thank you very much. We will now begin with 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 two Participants. You are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue is done. A reminder to all, you may press star N1 to ask the question. We will take the first question from the line of Ahmed Madha from Unified Capital.
Please go ahead.
Ahmed Madha
Yeah, thanks for the opportunity and congratulations on the great execution you have delivered over last two years. Posting the ownership. My first question is we had a fire incident at the hedge plant. Can you quantify was there any impact of production and sales and is there any spillover? We are expecting in Q1 and also was any cost booked related to the same on P and L?
Yasir Rawjee
So the fire at the hedge were impacted Only the intermediate side of the facility. The API, the finished formula, the finished area was was kept was intact so we didn’t experience any great delays as a result of that. There is no significant spillover. There is some but not very significant and we hope to be able to type that by in Q1
Tushar Mistry
From an expense perspective. Yes, we have booked a loss due to fire and our other expenses to the extent of 20 crores and that’s why you see a jump in the other expenses line item.
Ahmed Madha
Okay, so just to clarify this, out of 126 crores, 20 crores is related to the impact and on the employee cost side is that jump organic or is there something else?
Tushar Mistry
So on the employee cost side we have accrued the performance bonuses since the performance for the company is good. There are certain performance bonuses which are payable to the employees and those have been approved in the last quarter.
Ahmed Madha
Sure, that helps. Other question, considering the lot of volatility we are seeing in global metros, there is obviously some forex impact we will be seeing and I’m assuming it will be positive considering we are net exporters. Can you quantify? Does that sort of helps us in a gross margin? Is that sort of number big data gross margins if possible to quantify and give your thoughts around. And I’m assuming there will be some impact because of yuan appreciation and according imports cost. So that’s first.
And second, was there any major forex gain booked in other income in Q4 or in full FY26?
Tushar Mistry
So yeah, there is a element of forex gain for the year in the P L as you rightly mentioned that since we are net exporters, any rupee depreciation definitely helps us for the entire year on the P and L we have seen a Net gain of about 31cr on the P and L and for the quarter it is about. Your next question is on the other income side There is about 11 crores of gain that we have booked for Q4 and about 20 crores for the full year that we have booked.
Ahmed Madha
Okay, sure. And are we seeing any challenges in terms of RM procurement, RM costs pressure in terms of gross margin because of cost inflation? Any logistic issues on the business in general? I mean obviously we’ll be facing challenge, but something significant if we can call out.
Yasir Rawjee
So freight was impacted first starting from February 28th itself. Okay. And more or less that has been passed on to customers. Okay. As far as material costs go, solvents were the first materials that went up quite significantly. The good thing is that Solvents contribute about 12, 13% to our overall cost. So yeah, there is an increase, but again on the overall cost it’s not going to have that big an impact. Of course we are in touch with our customers to, you know, give them that view and most customers are agreeable to take on that added cost whether it relates to freight or relates to material costs.
So we don’t expect an impact.
Ahmed Madha
And in the industry environment in general, for pricing, how would you Evaluate current environment. Is it sort of a steady. I mean apart from what has happened because of war. But in general, are you seeing any improvement in pricing environment for your API business?
Yasir Rawjee
For our markets and our portfolio, the pricing environment has been reasonably stable to begin with and the war should not have any effect on the pricing environment.
Ahmed Madha
Last question from my side. In terms of inorganic opportunities, if you can give some thinking how you are thinking about that piece, what sort of, what sort of profile of business you are looking for and are we any close to do something?
Yasir Rawjee
So we are actively looking. Okay. And the direction is to basically enhance the platform that we already have. So our goal is to extract more value from our pretty large and diverse pipeline of APIs. So if we can sort of, you know, milk that pipeline much more through a lateral buildup of allied platforms, then that’s the direction we are looking into in terms of inorganic.
Ahmed Madha
Sure. Thank you so much and all the best.
Yasir Rawjee
Thank you.
Operator
Thank you. Before we take the next question, a reminder to all, you may press star and one to ask a question. We will take the next question from the line of Krishna Saha from Quantum amc. Please go ahead.
Krishnendu Saha
Yeah, good morning. Yeah, thank you. So understand something about the improvement in the margin. So the material cost has been flat but the what it was contribution of CDM as a percentage of revenue has been flat also. Is it largely because. Yeah, you know what? Yeah,
Yasir Rawjee
Need to be a little more clear. Probably move closer to the mic, not use the speakerphone. I don’t know. I’m not using.
Krishnendu Saha
Just, just.
Unidentified Participant
Can you hear me? Hello? Yes,
Yasir Rawjee
Yes, yes, please continue.
Unidentified Participant
Hello?
Krishnendu Saha
Hello,
Sunil Kothari
We can hear you.
Krishnendu Saha
Yeah, just a couple of questions. I’m looking at the. On a yoy basis, our material cost is practically flat and our CDMO share of revenue has been also flat. Just understanding has the product looks on the CDO being largely superior in the past. That is why we have an expansion in the EBITDA margin.
Yasir Rawjee
CDMO definitely has better margins, but our CDMO business has grown 18%. Why do we say it’s flat? I don’t know.
Krishnendu Saha
No, I mean, sorry, let me rephrase the question. The percentage of revenue is actually flat. It’s 6%. Five and a half and 6% compared to the last year also. So contribution to the total revenue is still the same. So I’m just wondering, is it largely because of the larger superiorness of the CGMO within the cdmo? That’s what I’m trying to understand.
Yasir Rawjee
Okay. So margin, you know, improvement in margin has got like I would say Three to four factors. Operational efficiency has helped. We have had better cost processes implemented. Okay. CDMO has gone from 6% last year to 7% this year. In terms, I mean, FY25, it was 6% small to 7% in FY26.
Nitin Agarwal
Okay.
Yasir Rawjee
And that certainly matters. But we’ve also had some good launches of a generic API in the, in multiple markets. So all in all, that is how we’ve achieved better margins
Krishnendu Saha
And the backward integration onto and all to the H2 Solarpur, has that played out as of now?
Yasir Rawjee
No, not yet. Backward integration in a big way still has to, you know, contribute. There’s some but not very significant because Sholapur is still not yet online and we don’t have the capacity for backward integration, you know, yet in the regulated plants. So Sholapur should be up and running in Q2 and then we hope to, you know, implement those backward integration projects.
Krishnendu Saha
That helps us in the margin. I suppose. I understand that. Right.
Yasir Rawjee
Yeah, we hope to, we hope to have some benefit from.
Krishnendu Saha
And sir said something about Solar Pool being reinspected or something. Are we going for any regulatory inspection over there? It’s going to be normal.
Yasir Rawjee
I think you’re probably referring to UNCLE or the H because Sholapur is not yet commissioned.
Krishnendu Saha
No, I know. I mean in the future do we look at implementing SOLARPool for regulated market? Because we only have Solar Pool for the RW markets. So I was wondering if. Do we go for the regulated markets for Sholapur also?
Yasir Rawjee
Yeah, yeah, that is the plan very much.
Krishnendu Saha
I see. And last question from my side, when you, when we talk about high potency API has been validated, the validation. When I understand, when I hear that, I mean, just to clarify, I understand less of the subject. Certainly the innovator or the client has validated the object or the API or the molecule. Right?
Yasir Rawjee
Yeah. So the thing is that it’s a progression. So before we validate we’ve already sort of engaged with the potential customer and then when they are ready to take exhibit back patches is when, is when we get. Well, we validate the material in the plant so that larger quantities are also generated as a result.
Krishnendu Saha
Okay. So the validation, they have started taking small amounts, validation amounts from us for the last. For the 78 molecules which we have right now and the high potent API. That’s what I can understand.
Yasir Rawjee
That’s right.
Krishnendu Saha
And hypotens API will be a better margin than the rest of the business. Right,
Yasir Rawjee
Let’s see that that has to play out because Most high potency APIs that we are working in have patent expiry that are going to come in from the year 2028. So it remains to be seen. But yes, typically these molecules do attract better margins.
Krishnendu Saha
I see. Okay. Better margins. Thanks. Thank you. Thank you for your time. I’ll get back in with you.
Yasir Rawjee
Sure, sure.
Operator
Thank you. We will take the next question from the line of Shub Mehta from icic. Please go ahead
Unidentified Participant
Fellow sir, thank you for the opportunity. So building onto the questions of previous participant on hypotent molecule contribution, I wanted to understand this year we had 12 molecules which were there. And last year if I see the size was seven molecules which were there. Submitted and accepted. So can you help me understand what is the contribution of high potent molecules this year in our portfolio? Portfolio visibis last year.
Yasir Rawjee
So see the only contribution that we get is from the sale of exhibit batch quantities. Because like I explained the patent exposure expiries are not going to happen until early 2028. So until then our customers would not be able to launch and would not be able to buy API from us for those launches. So the only sort of revenue that comes from the hypotent segment right now is the sale of exhibit batch quantities.
Unidentified Participant
So it will be said that it will not be the material contribution for us in revenue.
Yasir Rawjee
Not very significant. No.
Unidentified Participant
Second question is said that growth, how much would be the growth contribution from the 12 new introductions which we had for this entire year? And what would be the price erosion in our base business if I exclude GPL and CDMO business?
Yasir Rawjee
See again these 12 molecules are new molecules. Their patent expiry, you know going to happen in the next five to seven years.
Unidentified Participant
I’m not asking about a five.
Yasir Rawjee
No, no, the regular one.
Unidentified Participant
Okay.
Yasir Rawjee
You know, because typically we don’t go for already genericized APIs. No.
Unidentified Participant
Okay,
Yasir Rawjee
That’s the idea. And you wanted to know the base business erosion, what were you asking?
Unidentified Participant
Price erosion in base business excluding GPL and CDMO.
Tushar Mistry
Yeah. So on that the price erosion is about 5 and a half percent is what we have seen on the non GPA launch CDO.
Unidentified Participant
All right. So if I, if I exclude, despite that we have grown pretty well 30% kind of growth in the base business. If I exclude GPL and cdno. That, that seems pretty healthy. Are we expecting to continue that traction over there?
Tushar Mistry
Yes,
Unidentified Participant
That is
Tushar Mistry
What we are saying.
Unidentified Participant
Thank you.
Operator
Thank you. We will take the next question from the line of Sunil Kothari from Unique vms. Please go ahead.
Sunil Kothari
Hi, thanks for opportunity sir. Congratulations for this transformative journey under this Nirma, the way we achieved our cash flow control then the way we are started investing and the way we leverage the benefits of better operating margin. My question is first is yet another scope which are the another area where you feel your scope to improve further the margin or maybe maintaining this very respectable margin.
Yasir Rawjee
See this year is going to be a bit challenging because of the war. Supply chains do have a little bit of constraint but you know there is enough, you know demand visibility is pretty good so we’ll have to see how the whole margin thing shapes out but shapes up. But the thing is we are still confident of maintaining which between 30 and 32, you know. Percent.
Sunil Kothari
Yeah. So let’s see
Yasir Rawjee
How it goes. It’s a bit, you know it’s a bit early to sort of give the whole year margin guidance Sir.
Sunil Kothari
I just wanted to understand which are the area where you see internally where you find the scope to improve the margin without giving any numbers but you see any area where you feel internally you can do something which will help us to improve the margin.
Yasir Rawjee
So see backward integration is certainly one area where you know we see some scope for margin improvement. And once Shodapur comes online in the second half of the year we will be you know, doing backward integration on a few key projects and that momentum will build up as we go along. Yeah, please answer
Sunil Kothari
Second question is during last year our objective and our basic strategies to we don’t want to go for a very commoditized any activity or business and that’s why we are very respectable, very highly profitable and a business only. But looking at the cost structure, the way we invest, the way inflation is working, if we don’t grow in a double digit then it becomes very challenging to give a better bottom line. That is our understanding as a investor. What is your thought process for next two, three years we’ll be able to move from single digit lower single digit, mid single digit to maybe little higher or mid double digit revenue growth.
Yasir Rawjee
See in the non GPM business we are already growing at double digit growth. Yes. So thing is that the GPL business is a bit wavy. So it remains to be seen but we are not seeing it, you know, keeping you know, staying in line with the non GPL business. So that element will be there. But what’s also happening is that as the non GPL business grows faster the contribution of the GPL business is going to be much less as we go forward.
Unidentified Participant
And
Yasir Rawjee
Honestly see, I mean we’ve interacted with you right before as well. The thing is that the Focus for us is on having a good margin profile for the business and generating good profits which translate into good cash generation. So maintaining a high quality business is a much bigger priority for Alivis. Okay. And growth will come. I’m not saying that growth will not come, but growth will not be pursued at the cost of, you know, margins because it creates a lot of other challenges. Then
Sunil Kothari
Great, sir, Lots of good wishes. Thanks a lot.
Yasir Rawjee
Thank you.
Operator
Thank you. Before we take the next question, a reminder to all. You may press star and one to ask a question. The next question is from the line of Yog Rachani from Omega Portfolio Advisors. Please go ahead.
Yog Rajani
Hello. Thank you for taking my question and I just wanted to congratulate the team on great results. I had a question regarding the capacity utilization for the newer facilities that will be coming up in Ankeshwar, Dahej and Solapur. So as I see in Q2 and Q3, we will have a bulk of our capex coming live. So how much time would it take for it to get to an optimal capacity utilization? Because like, if it’s coming in Q2, I don’t believe that it would like be ramped up immediately. So could you share timelines in terms of capacity utilization we see in our new Brownfield and greenfield facilities?
Yasir Rawjee
Yeah, sure. So see, capacity utilization in the brownfield will be pretty rapid in terms of bringing it at the, you know, 80, 90% level in a matter of two to three quarters because that’s Brownfield, that’s an approved site inspected by FDA and other agencies. So that capacity will get taken up pretty quickly. As far as Sholapur goes, we have done a fair amount of product mapping in Sholapur. So we expect that when Sholapur starts off, we should start off with a robust 40 to 50% utilization and then, you know, probably take it up to 60, 70% in the following year.
So see, we have always been calibrated in terms of building out capacity. Okay. We’ve not been too adventurous, right. And here it helps us because we can do it, you know, in phases. And that’s why what we are doing at Sholapur to start off is, you know, phase one where we will have 370kl for the BI block and then 120kl for the API block. Okay? So capacity utilization should be, like I said, around 40 to 50% to start off with Insholapur when Brownfield will kick in pretty quickly, 2 to 3/4.
Yog Rajani
So as I understand, FY28 because of the huge bulk of the Capex coming live would give us a huge revenue jump. But again, in FY28 and on, is that a good understanding?
Yasir Rawjee
It will definitely give us a Runway for new launches and volume growth. Okay. But mind you see the Sholapur capacity, like I said, the 370km is for backward integration. Okay. So that won’t contribute directly to front, you know, front end sales. Okay. That capacity should not be factored into any kind of model you’re building.
Yog Rajani
Okay, Fair. I completely understand and just wanted to understand, given up to the Greenfield and the brownfield expansion that have happened, do we have further available land bank for expansion down the line or would the next phase again be Greenfield
Yasir Rawjee
Land bank? Where
Tushar Mistry
Do we have.
Yasir Rawjee
I’m
Yog Rajani
Sorry, I could not hear you clearly.
Yasir Rawjee
I’m just asking for some clarity in the question. I’m not sure I got the question right. Could you please repeat?
Yog Rajani
So for our further capacity expansions beyond what is already planned, would we need to again go greenfield or do we have land available in our existing plants to continue with? The expansion
Yasir Rawjee
Is on 40 acres and we would comfortably be able to add another 7 to 800 kiloliters of capacity of API capacity in Sholapur. Right now we have only 120. Right. So Sholapur should give us a good Runway. Once we hopefully get inspected soon and you know, are through with that, then we can ramp up the Sholapur expansion and then that should give us a Runway for at least three to four years. You know, in Sholapur, Unkeshwar has capacity. We can ramp up there further. But the thing is, it’s still, it’s quite, you know, it contributes almost 65, 70% of our revenue today.
So we would like to go a little slow with Unkeshwar and the hedge is full.
Yog Rajani
Okay. Thank you for answering my questions.
Yasir Rawjee
Sure, sure.
Operator
Thank you. We will take the next question from the line of Meghna Agarwal from Mount Infra. Please go ahead.
Unidentified Participant
Hi, good morning. Am I audible?
Yasir Rawjee
Yes, yes ma’,
Operator
Am, you’re audible. Please proceed.
Unidentified Participant
Hi, good morning. Thank you for the opportunity. I just wanted to understand the API. Like how is the pricing and volumes going on?
Tushar Mistry
Pricing in you. Please repeat. Prices and volume moving in API. I didn’t. Can you repeat that question?
Unidentified Participant
Hello. I’m asking like I wanted to understand like the pricing and the volumes being all in the API segment.
Tushar Mistry
Your voice is not clear. It is. Can you be a.
Unidentified Participant
Hello. Is it better now?
Tushar Mistry
Yeah, it is a little better. Yeah. Please.
Operator
Sorry to interrupt in between me. I would request you to please use your handset mode and speak.
Unidentified Participant
Yeah, I just wanted to understand the API segment as a whole. Like what are the pricing and the volumes are improving and how do we see that going forward?
Yasir Rawjee
So see, there’s a significant volume growth in all segments of our business with respect to the pricing environment. I answered to an earlier question that we have not faced any major challenges with respect to pricing in most of our geographies because we have a newer portfolio and so it’s not that commoditized. So we don’t get that much pressure on pricing. Although on the overall bucket we do see an erosion of around 4.5%, you know, on the, you know, because of the. Some price reduction that we have to give on some of the products.
So that’s the overall sort of situation with respect to our portfolio and the volume growth is good and we expect it will continue to be that way.
Operator
Thank
Unidentified Participant
You. Thank you so much.
Yasir Rawjee
Thank you.
Operator
Thank you. We will take the next question from the line of VP Rajesh from Banyan Capital Advisors. Please collect.
Nitin Agarwal
Yeah, hi. Thanks for the opportunity. Most of my questions have been answered, but just on the asset turnover. How should one think about that? Because it has. Sorry to interrupt in
Operator
Between. Rajesh, your voice is not audible. Could you please use the handset mode and speak? Hello?
Unidentified Participant
Yeah, so I was just saying that most of my questions have been answered, but just on the asset turnover, do you think it has stabilized at 2.2 or do you foresee it going down further from here as other facilities ramp up?
Yasir Rawjee
So it would go down a little bit more because like we said, Sholapur will be coming online soon and some of the brownfield capacity will also be coming in. But when you compare us to the industry, we are still, I would say, pretty much on top of the table there.
Unidentified Participant
Okay, so let’s say two is probably a reasonable level that one can expect. Or could it go down further from that?
Yasir Rawjee
I mean, it would temporarily go down below 2 as well. Right. But
Unidentified Participant
Yeah,
Yasir Rawjee
Come back up once the utilization picks up like I explained earlier.
Unidentified Participant
Sure, yeah, got it. Thank you.
Yasir Rawjee
Sure.
Operator
Thank you. We will take the next question from the line of Alankar Garude from Kotak Institutional Equities. Please go ahead.
Unidentified Participant
Hi, good morning everyone. Sir, we have seen R and D spends increasing consistently over the past few years as a percentage of sales. We have spoken about low chemistry earlier. You are also talking about high potent API iron complexes as well as an evolving CDMO pipeline. Can you help us understand a bit more in detail as to where exactly Your focus lies as far as R and D is concerned. And where do you see this RND number as a percentage of sales settling over the next two to three years?
Yasir Rawjee
Alanka, the areas that you outlined are where we are focusing on R and D and that’s really going to drive the growth. Okay. As far as settling down, I don’t think we’ll cross 4%. Right. We’ll probably be at 4%, you know, and that next year or two and then it should settle down. I mean, you know, but then we needed to fire off on many cylinders here because the thing is that that’s how the growth will come. Right. You mentioned all the areas I don’t need to repeat. I mean, you know, you talked about flow chemistry, you talked about, you know, the CDMO side and you know, we are looking seriously into pellets and granules.
That’s also an area that we’ve started working on. It’s that whole lateral expansion of the API. I mean we call it API plus. Right. So fair amount of investment is going into that. And then of course the pipeline buildup also is geared more towards the more complex molecules. So all in all, you know, put together. Yes it is. Our R and D spend is going up, but again it is going to pay off. I mean, you know, much, much more than what we are investing today.
Unidentified Participant
Got it, sir. The second one is more of a clarification. When you’re speaking about pricing, would it be fair to understand that given our portfolio is slightly more niche, more chronic oriented, non commoditized, as you said, any benefit of price hikes will be limited compared to say any other company or any other portfolio which is much more commoditized than ours amidst this Middle east situation.
Yasir Rawjee
Yeah, so I don’t know if I said it, but I think I did. But most customers are pretty comfortable taking price rises because they understand the situation. And rather than have a slowdown in supplies or not have supplies, they’ve kind of given us the green flag that, yeah, that’s fine, you know, you go ahead but you know, as long as it’s going to be reasonable, we are okay to, you know, absorb that price increase and there will be some. The good thing for us is that the only area where we see that increase is on the raw material side.
On the operations side, our operations are going to be stable because we moved away from gas. So we moved from gas to operating bricket boilers. So there is no impact on operational cost because of gas shortages or because of hikes in price. And that way the operation cost is going to be stable going forward, forward even in a war situation. But yeah, certain raw materials have gone up and are likely to go up even further. But we’ve got a kind of, you know, green light from our customers that yeah, we can charge them more.
It’s going to be fine.
Unidentified Participant
Understood. So basically more or less on the gross margin side, we should not really expect too much of an increase and on the other hand not too much of a drop as well.
Yasir Rawjee
Yeah, you’re right.
Unidentified Participant
Fair enough, sir. That’s it from my side. Thank you.
Yasir Rawjee
Thank you.
Operator
Thank you. We will take the next question from the line of Pratik Kothari from Unique pms. Please go ahead.
Ahmed Madha
Yes, hi, good morning sir. So just one on cdmo. If you can talk about the base three projects if the run rate kind of continues and the ramp up that you are expecting for 4th and 5th and also the new Vesol pipeline that we had from the CDMO piece, please.
Yasir Rawjee
So cdmo, the fourth and fifth project have kicked in really nicely. There’s some revival even on the, you know, the earlier projects. And so we expect that CDMO will continue this momentum. Okay. As far as new projects go, we hope to close two new deals, you know, in the second half, early second half of this year.
Ahmed Madha
Great, thank you. And all the best.
Yasir Rawjee
Thank you.
Operator
Thank you. We will take the next question from the line of Deepak Dalwani from Unifi Capital. Please go ahead. Deepak, please proceed with the question.
Ahmed Madha
Yeah, a couple of questions. Firstly, if I look at the new launches which probably have given the gross margins, if you can give some sense, what percentage of revenue incrementally has come from the new launches which happened in FY26, some that sort of a benchmark number or something you can give.
Yasir Rawjee
I don’t know whether we’ll be able to do that and we do have a sense, I mean, you know, we’ll have to see. But I can’t. Just to answer
Tushar Mistry
Your question, as Dr. Also explained earlier, new launches are not a very significant contributor to the top line revenue growth. They are new launches and the ramp up will continue to happen on those products. It’s not like they are contributing significantly to the growth.
Ahmed Madha
Okay. And if I look at the HPAPI pipeline building, obviously it has built up very well last couple of years. That sort of contribution when you say will start coming in, will it be from the same UNCLE issue and the headsets and should start coming in from say FY28 or it will take some more time.
Yasir Rawjee
It will start in FY28 because customers order material, you know, at least six to nine months before the launches happen.
Ahmed Madha
Sure. And do we have like any meaningful big launches coming in FY27 or will that take some more time? I’m just trying to guess whether the gross margin expansion which has happened will continue.
Yasir Rawjee
Yeah, we have Manju.
Ahmed Madha
Okay, sure. Thank you so much.
Yasir Rawjee
Thank you.
Operator
Thank you. We will take the next follow up question from the line of Krishna Saha from Quantum enc. Please go ahead. You’re not audible. Krishna, could you please use your handset mode?
Krishnendu Saha
Yes, I’m on the handset only. Can you hear me? Hello. Yes.
Operator
Now please
Yasir Rawjee
Go ahead.
Krishnendu Saha
So just on the financial question, just, just to understand, we are closing. Cash balance is just 20 million rupees. Mutual fund has increased by 3000 or sorry 350 crores over capital. Working progress also increased. So like how do you like, are we comfortable on the cash position? That’s what I’m trying to understand.
Tushar Mistry
Is about 784 crores including the investment in. Yeah,
Krishnendu Saha
That’s what I said. And. And your working capital has already been paid for halfway through, I suppose because of the 540 crores capex we have to do. So we’re just very comfortable in the cash position, right?
Tushar Mistry
Yeah, absolutely. Yeah.
Krishnendu Saha
Internet rules. Yeah, that’s what we’re driving. Thank you. Thank you very much.
Operator
Thank you. We will take the next question from the line of Bhavna Israni from Ambit Asset Management. Please go ahead.
Unidentified Participant
Yeah. Hello. Hi sir, good morning. Am I audible?
Nitin Agarwal
Yeah,
Unidentified Participant
Yeah. So I just wanted to check in. Last call we said that the CDMO2 contracts will come in next six months. Like it was roughly June, July. But now this time we are seeing that it will come in the early second half of FY27. So we are expecting some delays in two CDMO contracts.
Yasir Rawjee
Not really expecting delays. But then I do want to, you know, moderated a little bit. It may come in the first half also little late in the first half. But just to be on the safe side, we are seeing it will happen on first, you know, early part of second half.
Unidentified Participant
Okay. Okay. Okay. Okay, Got it. Thank you sir.
Yasir Rawjee
Thank you.
Operator
Thank you. We will take the next question from the line of Nitin Agarwal from DAM Capital. Please go ahead.
Nitin Agarwal
Doctor. I think we alluded to that in the opening comments around the fact that you know, how are we looking to, you know, how we looking. How are we looking at business differently in terms of capital allocation after the changeover of the management and the Promoter ownership. If you, you know, if you can probably just take a couple of minutes to sort of reflect on the journey since the time the ownership change happened to how the strategic priorities and has the business, I mean what have you been from a strategic perspective, what have you been doing for the last three, four years and now as you look forward from the base that you built out over the last three, four years since ownership change, how are things going to change?
Is there any meaningful change the way you’re looking, approaching the business from here on?
Yasir Rawjee
Yeah, I mean I’ll take a little time but yeah, you’ll explain that. See what was happening is in the earlier the pre Nirma ownership, our focus was purely on portfolio and we had to cherry pick the right kind of molecules so that the growth came as a result of that there wasn’t much scope to go laterally. So essentially the R and D investment continued to be in picking the right molecules and taking them forward, which is helping us now for sure. And then the capex investment was again geared up to just ensure that whatever volume expansion happened as a result of overall volume growth but also as a result of new product introduction as the patents expired and the customers launched.
So that was very limited. Now I just answered Anankar’s question on why the R and D spend is going up and that is basically what has significantly changed in terms of our thinking in terms of the various directions that we can get into. And so it obviously starts with R and D and we are looking at various, various new areas to get into. Of course we’ve done enough market analysis to see whether all this will pan out. Okay, one example that I can give you is the kind of work that we did in flow chemistry.
And very recently, you know, we even commercialized one flow chemistry product which is doing exceedingly well. And the confidence we have now in employing flow chemistry has gone up multifold because we’ve had commercial success on our very first project in flow chemistry using flow chemistry. And so the investment in flowchemistry in more complex molecules in a lateral growth of the current portfolio are the areas where we are investing and we are able to invest relatively freely because we are not just limited by a capacity buildup for a future, for the future portfolio.
So I mean these are areas that we believe that will drive growth in various different directions and only time will tell of course, but that work has begun in earnest
Nitin Agarwal
And if I will sort of take that forward. So when you look around you, obviously when you look at India, the Indian environment as well as producing the global ones. I mean, when you look at your peer set, what is it that we in your mind do differently versus the others, which rather what we do better than the others, which sort of give us, gives us these profitability metrics, the way they play out and confidence in growth that we have.
Yasir Rawjee
I think the others are also doing well, but they’ve chosen their path. I mean, you know, with respect to our own sort of path or DNA that we picked is we want to, you know, have some element of uniqueness or, you know, higher entry barrier in whatever we are doing. Okay, the thought process here is that, you know, at least get a fair amount of differentiation going so that in the longer term we can sustain, you know, our business much more profitably. This is the whole point. See, what happens is that, you know, this is a choice you make way before.
I mean, we made this choice, you know, seven years ago when we became, you know, Glenmark Life Sciences and took that direction, you know, so that directional, you know, sort of, you know, that we defined for ourselves and then consistently stayed along. That is what has helped us. This is what I would say. And look, and the peers also, there are people who are doing really well. I mean, if you look at, you know, there are companies that have done exceedingly well. They branched out, you know, pretty smartly into various areas.
Of course, some because of portfolio choices and because of the overall competitive intensity in the market, there are challenges. Right. But still, I would say overall people are focusing on the direction that they set for themselves.
Sunil Kothari
Thank you so much.
Yasir Rawjee
Thank you.
Operator
Thank you. We will take the next question from the line of Ketan R. Cheddar, a retail investor. Please go ahead.
Sunil Kothari
Hi. Thank you for the opportunity and congratulations on a very good result. Doctor, could you help me with what is the revenue contribution from the geographies or at least the top two geographies, be it US or Europe or any other geography. Could you help with percentage revenues?
Yasir Rawjee
So, see, I mean, we have mature geographies that are contributing quite evenly. So if you look at India, Europe, you know, Latin America, these geographies and, you know, these, and even the U.S. Right, they’re contributing pretty significantly. The newest geography for us, you know, that has come in in the last four to five years is Japan. And so that’s relatively small compared to the others. But that’s also growing quite well. But we are pretty evenly distributed across the geographies, you know, with respect to.
Because the product, the product selection that we made. And again, this goes back to the answer I gave to Nitin Agarwal from DAM is that the selection of portfolio that we made over the years has been for all geographies. We’ve tried our best to make sure that we select those molecules of accordingly. So the, you know, the overall growth in all the geographies has been pretty significant. And like I said, even Japan, which is a relatively smaller geography has, you know, is beginning to shape up very nicely.
Sunil Kothari
Okay. Okay, thank you. And the other question I have is with respect to the contracts that we have with our customers now, you know, if you could just help me understand whether these contracts are like long term in nature or they are kind of, you know, short term. Like you know, you get contracts for deliveries few months out, something like that. If you can just give a, give a flavor, give an understanding of how the contracting, how the ordering from the customers work in our thing. And if there’s a differentiation in terms of the older molecules versus a recently launched molecules, if you can throw some light on these aspects.
Yasir Rawjee
So in our business, right, in cdmo we have contracts and these are longer term contracts. But on the generic API side we have fewer contracts. But even where we have them, they are not that long term. It could be about, it could be, you know, for a year or year, you know, two years at the most. That’s how. And we prefer that really because the environment is very dynamic and we can’t get locked into very cumbersome kind of clauses and get stuck. Now if you see this war situation, we are asking for price increases.
If you are contractually bound, then we would have trouble. So here it’s much better that we work with the customers as and how things progress. And we don’t see any downside to the that either. You know, I mean it’s better really not to be too badly tied up in contracts.
Operator
Thank you very much ladies and gentlemen. That was the last question for today. And with that concludes the question and answer session. Thank you members of the management, on behalf of Alivis Life Sciences Ltd. We conclude this conference. Thank you all for joining us. And you may now disconnect your lines. Thank you.