Alkem Laboratories Ltd (NSE: ALKEM) Q4 2025 Earnings Call dated May. 29, 2025
Corporate Participants:
Unidentified Speaker
Purvi Shah — Head of Investor Relations
Vikas Gupta — Chief Executive Officer
Nitin Agrawal — President and CFO
Analysts:
Unidentified Participant
Tushar Manudhane — Analyst
Damayanti Kerai — Analyst
Neha Manpuria — Analyst
Abdulkader Puranwala — Analyst
Rashmi Shetty — Analyst
Rahul Jeewani — Analyst
Neha Manpuria — Analyst
Alok Dalal — Analyst
Abhigyan Srivastav — Analyst
Bansi Desai — Analyst
Saion Mukherjee — Analyst
Saion Mukherjee — Analyst
Akash Dobhada — Analyst
Gaurav Kedia — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to The ELCAM Laboratories Limited Q4FY25 earnings conference call hosted by Motilal Oswal Financial Services. 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. Should you need assistance during the conference call, please signal an operator by pressing Start then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Tushar Manudhane from Motilal Financial Services. Thank you. And over to you sir.
Tushar Manudhane — Analyst
Thanks Manav. Good evening and Warm welcome for fourth. Quarter FY25 earnings call of Alkene Laboratory. From the management side we have Dr. Vikash Gupta, CEO, Mr. Nitin Agarwal, CFO and Ms. Purvi Shah, Head of Investor Relations. Over to you, Purvi.
Purvi Shah — Head of Investor Relations
Thank you, Prashant. Good evening everyone. We appreciate you joining us for our quarter four and full year 25 results call. Earlier today we’ve released our financial results, press release and investor presentations, all of which are available on our website and the stock exchanges. We hope you have had the chance to review them. Before we continue, we want to remind everyone that this call is being recorded and a transcript will be made available on our website afterwards. Additionally, please be aware that today’s discussion may include certain forward looking statements which should be considered in light of the risk our business faces.
Now I hand over the call to our CEO doctor Visas for his remarks. Over to you sir.
Vikas Gupta — Chief Executive Officer
Thank you. Thank you, Purvi. Good evening everyone and thank you for joining us today for Q4 and FY25 earnings call. We ended the year on a good note. With healthy growth in our intra business during Q4 and improved profitability and margins for the full year. Our domestic business continues to gain momentum reinforcing our confidence in its long term growth trajectory. This performance is driven by strong execution and targeted initiatives across our domestic operations. In the international business, excluding the Americas, we are seeing good traction with several key markets making significant contributions to our growth. As we move forward, we remain focused on strategic growth opportunities and operational excellence to drive sustainable returns.
I will now present the key highlights for Q4 and FY25. Financial performance for Q4 FY25 the total revenue from operations was 31438 million with a YoY growth of 7.1%. India sales were 2.1355 million with a YoY growth of 8.1%. International business sales was 9747 million with YoY growth of 7.2%. Net profit was 3059 million with a growth of 4.2%. R&D expenses for Q4 were 1.585 million, close to 5% of our total revenue compared to 1.757 billion at 6% of our total revenue from operations. For FY25 on an annual basis, the total revenue from operations was 129645 million with a yy growth of 2.3%.
However, EBITDA increased by 11.9% yoyo to 2512 million resulting in an EBITDA margin expansion from 17.7% in FY24 to 19.4%. Net profit was 21655 million with a yy growth of 20.6%. R&D expenses for FY25 were 5620 million, which is 4.3% of our total revenue from operations. The cash imbalance at the end of its 31 March 2025 is 46.2 billion. According to IQV ISSA data for FY25 the company registered a volume growth of 2.1% versus IPM’s volume growth of 1.2%, so outperforming the volume growth of IPM by 90 basis points. Segment growth has outperformed IPM in FY25 by 30 basis points at 6.9%.
In anti infective therapy, our oral, solids and liquids portfolio has outperformed the market, growing almost 1.7 times the IPM. However, we saw certain challenges on the injectable and infected portfolio. Alchem has outperformed the market in six out of 11 IPM’s top focused therapies over the past year. In the IPM’s top five therapy segments, Alchem achieved one rank improvement each in antidiabetic as well as the respiratory therapies. As per the recent prescription data, ELCM is the third largest prescription share and ranked number one in Auto and among top three in Gyne, Pediatric Surgery, dentistry as well as GP specialities.
I want to extend my sincere thanks to our teams for their dedication and commitment to excellence in this performance. With our strong foundation, we are well positioned to capitalize on the opportunities that lie ahead and I’m confident about a bright future as we look Ahead, our focus remains remains on positioning the company for sustained growth and creating long term value for our shareholders. With that let’s open the floor for questions.
Questions and Answers:
operator
Thank you very much sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to withdraw 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. I would like to remind all the participants if you wish to ask any questions you may press Star and one. We have our next first question from the line of Damianti Kherai from hsbc.
Please go ahead.
Damayanti Kerai
Hi, good afternoon and thank you for the opportunity. My question is to Dr. Bikas in India in some of the bigger segments anti infectives, cardiac, anti diabetic etc. In the fourth quarter number according to your presentation Alchem’s growth were lower than IPM growth. So if you can explain or elaborate what has happened or which segments within these therapies are seeing some weakness etc that will be helpful. And with that context how should we look at India business growth for next year?
Vikas Gupta
Okay, thank you Damiandi. Actually to see you know our annual performance as I mentioned, you know all these therapies we have outperformed some of the top therapies. If you see gi, GI has been our, you know, pretty big therapy. We have outperformed the market. If you see anti diabetic also on an I would say on an annualized basis we have outperformed the market. If you see neuro, cns, multivitamins, gynac, all these therapies we have really outperformed the market. On the anti infective side like I mentioned, if you deep dive into the data, oral solids and oral liquids.
Anti infective has three components, solids, liquids and injectables. So oral solids and oral liquids we have outperformed the market injectable business. Sometimes we see certain challenges in the overall data that comes in because this is a mix of B2B as well as retail business. So I think what is more relevant and the bigger component is of the solids and liquid business there our trajectory is going pretty strong. I would say overall if you see our India business performance for Q4 has been very strong. We have registered good growth overall in the India business and that is expected to continue now though initial one or two quarters we had certain challenges but I think overall our domestic we have reported 8.1% growth as far as Q4 is concerned.
So we are pretty bullish on that. And we are actually that’s one of our core business. So we are very aggressive as far as that business is concerned. So there is, I don’t see any reason of concern over there. Cardiac, so to say, has never been a big therapy for us. So that’s a very small business for us. Anti diabetes, respiratory neuroderma, you know, these are the bigger businesses for us as far as chronic is concerned. So which is where our growth trajectory is, you know, going strong.
Damayanti Kerai
Okay, again coming back to anti infective. We are already towards the end of May, so how is nt infective seasonal demand looking up because I think we are already into range, etc. So compared to last two years.
Vikas Gupta
That it has rained. So I guess it’ll be too early for you guys to really look into it, but I think let this quarter get over. As I said, our focus is more on the basics. So we saw a strong Q4 and we expect similar growth trajectories to continue even in the coming quarters. So that’s how I’ll put it because we are in the middle of the quarter so it will be very, it will not be wise or fair on my part to make any prediction for the quarter.
Damayanti Kerai
Okay, sure. And how should we look at my second question is how should we look at ebitda margins for 26?
Vikas Gupta
So like we’ve given the guidance earlier as well, so I think now we are chasing growth. So EBITDA margins we when we had started last year, our initial estimate was that we will be somewhere close to 18.5. 19. We were able to get it to even better at 19.5%. So we expect the EBITDA margins to remain similar. As far as this financial year is concerned though, we will get operating leverage on our basis the growth that we will have record in the coming financial year. But we are making certain investments in R and D for certain markets where we want to expand.
So that is the reason overall our EBITDA guidance in terms of percentage would be stable at 19.5 for this financial year. That is what we are looking at.
Damayanti Kerai
That My last question, if you can update us on the biosimilar plant in terms of investment and how we are looking at, you know, completing the project and you know, supplying stuff.
Vikas Gupta
So the project is running, you know, on track. We expect the project to get completed latest by Q2, you know, so to become operational, you know, by Q2. So I think the required CapEx that we had planned for the year last year we have done almost 500 crores close to that. And I think the project is on track. So we should be able to start seeing some revenue within this year. Okay.
Damayanti Kerai
And 500 crore cumulative will be how much? This is I think last year’s number eight. How much you spent cumulative?
Nitin Agrawal
In total it will be around 550 crores. Out of that, 450 was spent last year on Capex.
Damayanti Kerai
Okay, that’s helpful. Thank you. I’ll get back in the.
operator
Thank you. We have our next question from the line of Neha Manturia from Bank of America. Please go ahead.
Neha Manpuria
Yeah, thanks for taking my question. My first question is on gross margin. It seems after a very long time we’ve seen gross margins sort of come off meaningfully. I understand part of this could be mixed but is there any other one off that is sitting or this is purely driven because of the pickup in the acute business that we have seen.
Nitin Agrawal
So Naya, you are asking for Q4 or full year?
Neha Manpuria
Yes, for the Q4, Q4 our margin.
Nitin Agrawal
Gross margin was bit lower as compared to corresponding quarter of last year. So there were two key reasons. One was our production was lower because we have. We were suffering on inventory till last year. So in first nine months of current year we have built good quantity of inventory for our international business. So we slowed down our production in quarter four and that impacted the gross margin because the accounting standard few of your overheads get loaded over to inventory. And if your production is lower, your inventory change amount reduces which impact your gross margin. Second reason was in last year in the same quarter we had some settlement fees which we have received for a product called Nemo Dipsen.
And third is we saw some higher expiry in few of our markets which also impacted our gross margin.
Neha Manpuria
How should I think about gross margins for the full year going forward? You know, should it be at on a full year basis, should it be similar to what we have done in fiscal 25 which is about the 63% or should we see moderation because acute growth which is weak normalizes.
Nitin Agrawal
We will be on the similar lines. It will be around 63 or a bit maybe 25 basis points better than what we have.
Neha Manpuria
Okay, got it. My second question is on the acute business. I think in the opening remarks you mentioned that we have taken certain targeted intervention. India, could you give us some color on what these interventions are and how they’ve helped improve our growth? And as we think about the growth for next year, will we be able to now maintain this, you know, market level growth and just a breakup between trade generics and branded generics for fiscal 25.
Vikas Gupta
So I think the interventions were largely tactical and strategic both, you know, so we have focused on the right specialities, right indications, right geographies. So those are more specifics that we have taken as far as driving the overall growth for this segment is concerned. When you ask me whether this growth is sustainable or not, I see no reason for this growth to slow down, but I see getting even better in times to come. So we have, like I said, this is our core business. We’re pretty bullish about it and we were always confident that this is one business where growths are going to be there.
So I guess that is what we have seen and before and it should continue even in times to come. As compared to the overall growth, I would say domestic we will be say in line with the market growth or 100 basis points surpassing the market growth. Actually that is what we are looking at and I think we are very close to that in this financial year going forward. We see our growth estimates to be at least 100 basis points higher than how the market grows. So that is what if there is anything else.
Neha Manpuria
And so how should I think about the market growth? When you say market growth, Is it like 6 to 7%, 8 to 9%? What according to you is the right assessment for market growth?
Vikas Gupta
I think my sense is with a better seasonality that we are expecting in the coming year, we should be within the range of 7% to 8%. At least that has been the trend that the market has seen. So that is the minimum that we expect at least the market to be. But let’s see, you know, how the year progresses. If everything goes well, it could be even slightly more than that.
Neha Manpuria
Got it. And on trade generic, how was the group for trade generic for the full year this time around?
Vikas Gupta
Trade generic business, you know, overall, if you see you’re asking for next year.
Neha Manpuria
Or the year for FY25, what was the growth? And then obviously, you know, how do we think about. Because I think there seems to be some moderation even in the trade generic growth that players like yourself and your peers are talking about. So just wanted to get a sense on how we did in 25 and how should we think about that trade generic growth going forward?
Vikas Gupta
Trade generic saw mid single digit kind of growth within the range of around 6 to 7%. So that is how it was. The market has become quite competitive. We saw a lot of new entrants also getting into the market. And as it happens, when, because trade generic also a large part of business is acute. So when acute market sort of slows down. Even on the trade generic side we see a similar trend. So going forward I think it should be in line with how the IPM would grow. So even on the trade generic side we are experiencing expecting similar kinds of growths that we are likely to register.
The only thing is we are working on improving margins over there. So if you see last two years we have had on a two year basis, we have had an improvement in our overall margins as far as trade generic business is concerned. And they are not very far off now from our overall corporate EBITDA margin. So our, our intent would be to get as close to our corporate EBITDA margins with the trade generic business. So that will be a mix of both top line growth as well as the margin improvement as far as trade business is concerned.
Neha Manpuria
Perfect. Thank you so much, sir.
operator
Thank you. We have our next question from the line of Abdul Kadar Puranwala from ICICI Securities. Please go ahead.
Abdulkader Puranwala
Hi. Thanks for the opportunity. So my first question is with your US business. So in the past you’ve talked about a couple of product launches, namely on Intersto. So. You know, I mean any timeline on when that would have happened in fiscal 26.
Vikas Gupta
So you know this matter is under, there is a litigation going on between MSN and the Innovator. So we are just keeping an eye on how the market opens up. So the earliest estimate could be somewhere in July, but it will all depend on how the case takes place. If the market opens up, like few others, we will also be ready for the launch. But let’s see how it plays out in the market.
Abdulkader Puranwala
Okay. And the second question is with regards to the supply situation, I think in past we talked about some improvement. Yet in this quarter we have seen some quarters of a decline. So for FY26, you know, how should we look at the in terms of code?
Vikas Gupta
You’re saying the overall business in US? Yes sir. Yeah. So see if you see the trend, you know, as far as US business is concerned, initial quarters we had seen heavy degrowth. But if you see the business is getting more stable now our senses with our now supply and inventory levels being good in the US and as the year progresses, my guidance has always been a single digit, mid single digit kind of growth from US business and we expect that to happen in this financial year. Of course there may be first one or two quarters where we may just do some catch up as compared to the previous year.
But overall on an annualized basis our expectation is it could be around a mid single digit kind of growth business for us. The price erosion over there continues to happen. So the nature of the market is such. But I think with our supply situation getting better, with certain opportunities also coming our way, we should we are hopeful of a mid single digit kind of growth this year from us. Thank you.
operator
Thank you. A reminder to all participants, if you wish to ask any questions you may press star and 1. Anyone who wishes to ask a question, you may press Star and one. Now we have our next question from the lineup. Rashmi Shetty from Dollar Capital, please go ahead.
Rashmi Shetty
Yeah, thanks for the opportunity. Just again on the US Business senior said that you know we’ll be able to clock at least mid single digit growth. How many launches are you planning for FY26? Earlier you indicated that you will be doing around one or two high value launches this year.
Vikas Gupta
Yeah, so like I mentioned, you know entre stove, I answered already on the, you know, previous question. So that is one. We are hopeful, we look forward to launching at least five to six, you know, new products this year. But of course, you know, not a very no major big launch that we have. But we are hopeful that you know, put together these launches will help in getting us to the growth number that we have talked about.
Rashmi Shetty
Okay. And when you see your working capital days, it has increased, you know, in FY25 versus FY24. Will it remain at this level or it is likely to increase as your US supplies and everything will start more.
Nitin Agrawal
So there is a small decrease in working capital number of days and I think we are at optimum level now and we don’t see any major increase in working capital from here onwards.
Rashmi Shetty
So it will be more or less stable at these levels. Yes, you can say okay, and what is the guidance for the R and D for full year? I mean we have done around 4.3% for FY25. But you earlier commented that you know investments for R D is likely to go up. So what is the guidance that you give?
Vikas Gupta
So we expect it to be within the range of 5%. So that is what we are expecting because there are some filings that we will be doing in certain markets, certain non US markets as well. And for us also file eight to nine products. So I think we should be around 5%.
Rashmi Shetty
Around 5% and the investments in R D will go up. It will also increase your SGA expenses. Along with that when you’re saying that you know the investments will be there in FY26 or it will be more or less, you know, similar to in FY25. Yeah.
Vikas Gupta
So I think it will be pretty much it will be within the range of you know, what percentages we have had, you know in this year. No major shifts in terms of percentages but no, I think largely the percentage increase would be on the R and D side.
Rashmi Shetty
Okay. And on the Capex part how much have you spent in FY25, the total CapEx and how much are you expecting for FY26?
Nitin Agrawal
We have spent around 700 crores in FY25 and it will be in the same range for next year also because there is some amount of capex which.
Vikas Gupta
We still need to do to complete.
Nitin Agrawal
Our Indian product project in US.
Rashmi Shetty
So out of the 700 crores which you spent in FY25 I think 400 to 450 crores was allocated to engine plant. Right. So that much work we have spent this year or you know we have actually spent lower.
Nitin Agrawal
So yeah, 400 crore is what we have spent in engine in the current year. In FY25 the total amount of capex is 788 crores. For FY25 next year estimate is to be around 700 to 750.
Rashmi Shetty
700 to 750. And out of that engine would be how much?
Nitin Agrawal
Around 200 crores.
Rashmi Shetty
200. So. So the rest would be spent on which plan.
Nitin Agrawal
Capex say 150 crores will be routine. Then there will be some amount from R D plus. We are also looking to build a new plan for our domestic business. So we’ll start that activity also very soon. So that will also require some amount of capex.
Vikas Gupta
Understood.
Nitin Agrawal
There is a medtech investment. So as we have shared last year that we are buying a technology aid and brand licensing from Exactech for our hip and knee replacement business in Meditec segment. So that outgo will also happen. We have paid half of less than half of the amount last year and the balance of around 70 crore paid.
Vikas Gupta
In the current year.
Rashmi Shetty
Okay. And my last question is on tax rate. If you can give tax rate guidance for FY26 and 27.
Vikas Gupta
FY26 20.
Nitin Agrawal
You are talking about FY26.
Rashmi Shetty
Yeah.
Nitin Agrawal
FY26 will be in the range of 13 to 15%.
Rashmi Shetty
Okay, thank you sir. That’s it from my side.
operator
Thank you. A reminder to all participants. You may press star and want to ask a question. We have our next question from the line of Rahul Jiwani from IIFL securities, please go ahead.
Rahul Jeewani
Yeah. Hi sir, thanks for taking my question. Hope I am audible.
Vikas Gupta
Yes, yes. How you are? Please go ahead.
Rahul Jeewani
Yeah. Yes. So sir, on the domestic business, the 8% growth which we saw during the quarter was also partly aided by the fact that we had a low base last year when last year domestic business had actually declined 2%. So let’s say while I understand that the business is slightly seasonal in nature, but what confidence do you have going into FY26 in terms of outperforming the market growth by 100 basis points?
Vikas Gupta
I think I’ve already answered that question. So we are pretty confident. And if you see, if you deep dive further on our domestic business from where the growth has come, of course growth is always compared to the last year. And there are certain quarters where you get good growth. There are certain quarters, especially in these businesses that have seasonality where you will see the struggle. So I don’t see any reason why there should be any reason for a slowdown going forward. Unless like I said, if market sees certain kind of upswings, then we will not be immune to the market trend.
But we are seeing the market trends also to be more stable now and we expect this growth to be delivered. So unless you have certain end that you have in mind which you want to clarify, feel free to ask.
Rahul Jeewani
So what I was largely asking from the point of view that if you look at FY25, we actually underperform market growth by 100 basis points. So now going forward we are talking about an outperformance versus market. So does that assumption is premised on a pickup happening in the acute business this year?
Vikas Gupta
So that is one. But if you see even the market outperformance, what happens is if you see the volume growth, volume growth, even this year we have outperformed the market. The problem has been on a large part of our portfolio, like I mentioned is under nle. So when that portfolio didn’t get any price growth and the volume growth was also sluggish in that market, that is where I think we faced the headwinds now with market getting more normalized and our contribution of that portfolio with every passing year coming slightly lesser. So I don’t see any reason why our growths should not be in line.
Or see if you compare, even last year the difference was 6.9 to 6.5%. I’m talking about SSA data of the IQ. So which is a marginal difference in the overall, I would say market growth, but I think internally we have clocked higher than that. Even last year and internally Q4 has been even, even stronger. So I’m looking at both the data and that’s why I’m saying, you know, the structural changes that we made during the year are resulting in good growth, you know, across the company as far as domestic business is concerned.
Rahul Jeewani
Sure sir. And sir, on the margins, the guidance of flat margins for FY26, what kind of an operating loss have we factored in from the newer initiatives like the CDMO business and the metric business?
Vikas Gupta
So you know, margins, it’s a function of certain operating losses and certain gain that we may also see on the API prices, you know, that are getting softened. So you know that is why our guidance on the overall margins are. You think about the overall corporate margins, right?
Rahul Jeewani
Yes sir. About the company level ebitda.
Vikas Gupta
So I think so.
Nitin Agrawal
See I agree that there will be some amount of operating losses because CDMO business will be starting in quarter two of the current year and it will take some time to completely utilize the capacity of the US facility which we are selling for CDMO in Engine and also Medtech business. We have started, we have just completed the acquisition of Bombay Auto and. And there will be some time it will take to start building that business. And also the Exactec Bombay Auto business will start from January 26th. So altogether we see there will be a loss of both the business together there will be around 100 to 125 crores of operating losses which we will incur for these two business combined.
Rahul Jeewani
So both MedTech and the CDMO business combined 125 crore EBITDA loss.
Nitin Agrawal
Yes, engine US only Indian operations is profitable.
Rahul Jeewani
Sure sir. And last question from my end before I join back with you. You talked about tax rate for FY26. Can you also comment on the tax rate for 27 given that the second plant offers would come out of tax exemptions.
Vikas Gupta
Yes, I think that we have clarified on the earlier calls as well. You know the sunset clause is less by 26. So once that goes off then our tax rate, you know, comes back to the normal tax rate. But since we have Mac already, so we will be in the highest tax bracket of around 35% or you know, slightly more depending on you know, how we take that view. So we will, that’s how it will be, you know, post 527. So there is no change in that.
Rahul Jeewani
So FY27, what kind of a tax rate should we model in? Should that be the corporate tax rate number of 25%?
Vikas Gupta
No, no, no. So because we have already mapped you know, in the credit. So it will have to be higher than that.
Nitin Agrawal
So see gradually we’ll move to a lower tax rate of 25%. But since we have a MAT queries of 1450 crore so we can’t now move to the lower tax regime. So we will have to be in the 35% tax bracket. Plus there may be some amount of disallowance under tax which happens for all the company. So the tax rate will be in the range of 35 to say 37.
Rahul Jeewani
And then it would gradually start coming down.
Nitin Agrawal
Once we utilize the maximum then we will move to a lower tax reason of 25.
Rahul Jeewani
Okay, thank you. That’s amazing.
operator
Thank you. We have our next question from the line of Neha Manpuria from Bank of America. Please go ahead.
Neha Manpuria
Yeah, my question has been answered. Thank you so much.
operator
Thank you. A reminder to all participants if you wish to ask any questions you May press star and 1. We have a next question from the line of Arok Dalal from Jefferies India. Please go ahead.
Alok Dalal
Yes, good evening everyone. So Dr. Vikas, when you mention about. Accelerating growth, can one look at high single digit growth in FY26 and then the company moving towards double digit growth. Rate for FY27 missing on the overall level? Yes.
Vikas Gupta
Yes. Overall. Yeah. Yes. Because I like I said, you know, domestic being our core business, we are looking at outperforming the market from us. We are looking at you know, mid single digit kind of growth and you know rest of the world they’re looking at mid teens. So some you know you can put together should be close to what you’re saying. Okay.
Alok Dalal
And when you mentioned about higher investments required for RD projects.
Vikas Gupta
So what kind of projects are these.
Alok Dalal
With which will entail higher spends for FY26?
Vikas Gupta
You know our focus on row markets is increasing and that is what I have mentioned on the previous calls as well. And that would require, you know, so far we have not done those kind of filings in some of these markets. So there will be products, you know, which we will be developing for the rest of the world markets as well. And we’ll be doing a lot of filings, you know, for these markets. So that is one. So I think it’s a mix of. And then even on the US portfolio side we are relooking at our portfolios and being more, you know, I would say products which will get us better returns, you know, a better NPV in the times to come which might require a higher spend.
So it’s going to be a mix of you know, some of these initiatives but these would be largely even for the domestic market. You know we are running certain clinical trials, you know, which we have not done in this financial year. So even from there from India market perspective as well, we are running in clinical trials to get the products to the market. So I think it’s a sum total of all which will result into this kind of. Understood. So focus is more on complex oral solids or injectables, those kind of product ranges going forward. Yes, we’ve just started working on that as well.
Alok Dalal
Okay sir, thank you for taking my questions.
operator
Thank you. We have our next question from the line of Abhigan Srivastav from Mycellus investment managers. Please go ahead.
Abhigyan Srivastav
Hi. Sweet. Thank you for taking my questions. Am I audible?
Vikas Gupta
Yeah, I began your audible. Please go ahead.
Abhigyan Srivastav
Okay sir, for the Enzine business could you please tell me what the current year revenue and margins are?
Nitin Agrawal
Yes. So in FY25 we closed at around 290 crores of revenue. This is including sales from Malken. So few of the products have been manufacture for Alchem and then Alchem team finally sell those products. So including that and the third party sale which engine due to other pharma companies the total sales was around 294.
Abhigyan Srivastav
And do we know the margin seat margins?
Nitin Agrawal
We have not shared segment wise.
Abhigyan Srivastav
Got it. And my next question is we had done two investments in the last quarter Adroit Biomed and Bombay Auto. Could you please tell us what the scale of plan would be here and the revenues that would be associated with these two investments Going forward.
Nitin Agrawal
Bombay or two will gradually build up because this is a manufacturing facility which we have acquired with and they have capabilities to build up manufacture hip and knee replacements. So this year we are targeting around 20 to 25 crores of revenue because we have just taken over that business and we have to build it from scratch in terms of sales over next five years we see this business of hip and knee including the exact tech business to cross around 200 crores.
Abhigyan Srivastav
And could you also mention what the plan is for Android?
Vikas Gupta
Okay. Android is, you know like I mentioned is a Dhamma focused company and you know, so they have a turnaround turnover of close to 50, you know, crores. And you know, now we intend to scale up, you know those brands. It has, it has some good brands, you know where we saw a lot of potential and that’s why Endermal Chronic overall is a key focus area for us. That’s why we went ahead and made investment in that company. So we are pretty bullish about the growth potential of that.
Nitin Agrawal
Plus there are geographical advantages.
Vikas Gupta
So that’s a company which has strong presence in south and west whereas our geographical presence is north and east. So where we think we can cross the leverage we can really grow the business in those markets. So it has growth potential.
Abhigyan Srivastav
Got it. And sir, lastly could you tell us what the Mr. Count and YPM would be for the acute and chronic segments of our domestic business?
Vikas Gupta
I think on an basis mentioned around it’s now not very different from you know what it is. Overall we have around close to 13,000 reps. We have productivity, you know at around 5.4 lakhs. Close to 5 lakhs, you know, I would say. And our chronic is, you know now close to 4 lakhs. So this is how you know our overall productivity.
Abhigyan Srivastav
Got it. Thank you sir.
operator
Thank you. A reminder to all participants if you wish to ask any questions give me a press star and one, we have our next question from the line of Bansi Desai from JP Morgan. Please go ahead. Yeah.
Bansi Desai
Hi. Thanks for the opportunity. My question is on ending US business of ours. So if you can just qualitatively tell us how the discussions are progressing with clients. What is the interest level in general especially in the existing backdrop of reshoring manufacturing in the us. And secondly you mentioned that it will take some time for you to completely utilize this capacity. So if you could give us some indication of what that could be. I mean is it two, three years or could it be more than that?
Nitin Agrawal
So yeah, gradually. See this year our projection is to earn around 100 crores from CDMO business. And as we said that we will be starting from quarter two and the ratio between say capex and revenue for this kind of business is only 1:1. So over next three years we plan to around 450 to 500 crores of sales from CDMO business at full capacity utilization. And we have order book, we can’t disclose the number for the client name. We started building our business development team and also building the orders from last one year. So we have decent amount of orders already.
Bansi Desai
And in your assessment would you believe you would need to, you know further enhance your capex based on the visibility that you have?
Nitin Agrawal
What for the current capacity? Yes. But if, if we utilize our capacity then maybe after two years or three years. But that will all depend upon how the business shape up in the next two years.
Bansi Desai
All right, thank you.
operator
Thank you. A reminder to all participants if you wish to ask any questions you may press Star and one. We have our next question from the lineup. Diane Mukherjee from Nomura securities. Please go ahead.
Saion Mukherjee
Yeah, thank you. You mentioned about the order book at Enzine. You know, I mean, can you disclose like how many, you know, customers you’re dealing with? Is this order book very concentrated with few customers? Are it kind of spread out across multiple customers?
Nitin Agrawal
Sam, we have not disclosed because these are very confidential information. We have signed agreements on conflict cancel. So it’s difficult to share with you about our customer database. But what I can share with you. That it’s not fully concentrated. It’s more than say three to four customers. Okay.
Saion Mukherjee
And just one clarification on your comment on R and D expenditure when you, you know, mentioned complex, oral, solid and injectable. Is this with respect to the US markets?
Vikas Gupta
Yes. So sign I, I meant about US market. We’re just starting working on that portfolio as well, which will need higher RD spend as well. But that’s not the only thing. In addition to that, I did mention about certain other markets and India market where we are running certain clinical trials as well. So put together it’s going to amount to a higher R and D spend.
Saion Mukherjee
Dr. Vikas, one thought is that in the US market the uncertainty levels at this point is very high. So there is talk of tariff, local manufacturing at this point of high uncertainty. Why are we taking this decision of going into injectable and oral solids as a new area at this point in time?
Vikas Gupta
So we’ll be cautious and it’s all subject to the way market shapes up. But we will have to start and continue working on certain opportunities. See if you see uncertainty, I mean that way. A large part of the world has certain. The geopolitical scenarios across the globe has been such that those uncertainties will prevail for some more time. Whatever may be the case, I think us will still need generic portfolio. We have seen the tariff situation has been more even on innovator portfolio side. So I think that will decide on the pricing strategy as to exactly how we would have to price the product.
And if you’re working on these products now, some of these products would see the light of the day three to four years from now after we have really worked and we’ll have a more clearer picture at that time. But we don’t want to put any project on hold for the simple reason. Even more important that if you as business we have to grow, we need to have a differentiated portfolio. So I think portfolio becomes even more important in this uncertain scenario because the certainty, the degree of certainty would be higher for, you know, these products rather than a generic product.
That’s, that’s our view.
Saion Mukherjee
And for injectable you would basically be using and CMO to manufacture at this.
Vikas Gupta
Stage our plan is.
Saion Mukherjee
Okay. And finally on the domestic growth rate you mentioned about market probably growing at 7, 8%. So it seems that there is a decisive slowdown in the broader market. What is in your assessment driving this slowdown which has been going on for quite some time now.
Vikas Gupta
I think it’s about a large part of the portfolio is NLEM portfolio. Even on the market side, around 20 plus percent portfolio is under price control and the inflation scenario is such that the price growth allowed on that portfolio is actually nothing. So even last year we saw. So that takes off. If 20% of the portfolio doesn’t see 10% price increase of 0.4 to 0.5% of the price lever of growth gets away straight away. So it’s a function of that. But from the volume growth side, we saw 1% kind of volume growth in the last year which we expect should be around 1.5% to 2% at least in this financial year.
So as long as that is there, I think the industry growth on a higher base, with an increasing base it could be around 8%. But if we see more inflation going forward, then the growth might even go up. If the inflation scenario remains similar, then I think the industry might even stabilize at 78 percentile. These are just individual viewpoints. Please don’t hold me one one and.
Saion Mukherjee
A half percent volume growth that you mentioned. So chronic would be growing much faster. Right. So basically does it mean that there is actually no volume growth in acute?
Vikas Gupta
No, it’s not that. If you break down, you know that portfolio segment wise, I think most of the segments have seen certain growth see acute as I said on the previous calls as well. I guess for last two, three years we were coming off on a huge Covid base that we had seen two, three years ago. So whenever you see that kind of spike in a particular year over a period of time, it takes a while for it to stabilize which and we saw trends in Q4 of the pre Covid growths sort of coming back.
We expect that to continue because even if you see previous years data then acute would have grown lesser as compared to chronic in terms of the volume growth. So I think that was a pre Covid trend which will continue even in times to come. So chronic we see a higher volume growth as well because certain large markets and important markets we saw drugs going off patent. So when the drugs go off patent, there is a huge ice crash and and the unit growth is massive. So I think that is also contributing to some extent on the volume growth of the chronic side.
So I think those are certain deeper analysis when you do of these markets. I think those are certain observations that we have had. But overall I think this looks pretty stable.
Saion Mukherjee
Okay, thanks. And I just have one question if I can ask. Can I go ahead and one more question?
Vikas Gupta
Sure, please.
Saion Mukherjee
Yeah. Just one question for Nitin. Nitin, your guidance for tax rate for FY27 which is like 35, 37% if you can just explain that a little bit more. And also I wanted to check the cash tax, right. It’s currently probably at around 20 odd percent. Will that remain the same even on 27th? If you can just talk about the cash tax as well.
Nitin Agrawal
So see since we have a max credit of around 1450 crores on our balance sheet so we will not be able to move to a lower tax regime. But once we completely use the max credit we will move to a lower tax reason of 25% including surcharge. But for next few years starting from FY27 we will be in the bracket of 35% tax rate. But as soon as we utilize the entire Mac rate we will opt to go to the lower tax rate.
Saion Mukherjee
And the cash tax, I mean the cash outflow on tax, how much will that be?
Nitin Agrawal
Cash outflow will be lower because we will be using the max credit. But definitely we can’t go 18%. We will have to keep paying 18%. So out of 35 to 37% which I said the cash outflow will be only 17 to 18%.
Saion Mukherjee
Understood. Thank you.
operator
Thank you. We have our next question from the line of Akash Lobada from Invested Capital Services. Please go ahead.
Akash Dobhada
Yeah, thank you for the opportunity. Just one question on semaglucad’s current. What is the clinical trial status in India? Do we expect to be in first wave of launch in India and other markets? And also are we going to outsource API or manufacturing house?
Vikas Gupta
Too many questions. I. Let me, let me address it one by one. Akash, we will be among the first wave of. As far as semi is concerned our clinical trial is you know going on. The details would be there on the ctri, you know website there in public domain. So you can, you can look at that. What was, what was the other part of your question? Are we manufacturing API ourselves? Is that the question?
Akash Dobhada
Yes, yes.
Vikas Gupta
We are sourcing from outside so and I think we expect the market to open up early FY27. So which is when we will be there in the market.
Akash Dobhada
Okay, thank you.
operator
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and 1. We have our next question from the line of Gaurav from Antique. Stop broking, please. Go ahead.
Gaurav Kedia
Yes, thank you. Good evening, sir. On the US Believe, we have approval for Mira background, Any indication on when.
Vikas Gupta
We can see a launch from our. I think I addressed it on the earlier calls as well. We are in settlement with the, you know, Innovator. So unless all the litigations anywhere across the world get over, we will not be able to launch the product because we have already settled it with the Innovator and we are bound by that agreement. Okay, sir.
Gaurav Kedia
Thank you.
operator
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and 1. If you wish to ask any questions, you may press star and 1. As there are no further questions, I’ll now hand the conference over to the management for closing comments.
Vikas Gupta
So thank you so much, everyone for joining and we really look forward to this.
Purvi Shah
Thank you all for the part for participating in today’s call and contributing to this meaningful discussion. If there are any questions that still remain unanswered, please feel free to reach out to us. Thank you. And have a nice evening.
operator
Thank you. On behalf of Motila Loswell Financial Services. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.