Beta Drugs Limited (BETA) Q4 FY23 Earnings Concall Transcript

Beta Drugs Limited (NSE:BETA) Q4 FY23 Earnings Concall dated May. 09, 2023.

Corporate Participants:

Rahul Batra — Chairman and Managing Director

Nipun Arora — Chief Financial Officer

Ashutosh Shukla — Director Sales and Marketing

Analysts:

Sagar Shah — PhillipCapital (India) Private Limited — Analyst

Ashish Rampuria — Private Investor — Analyst

Soham Das — Agent Sky — Analyst

Bashir Zaveri — Crown Capital — Analyst

Tarun Batra — — Analyst

Satwik Jain — Generational Capital — Analyst

Unidentified Participant — — Analyst

Ranvir Singh — Nuvama Wealth — Analyst

Chirag Fialoke — RatnaTraya Capital — Analyst

Sachin Doshi — Private Investor — Analyst

Presentation:

Operator

Thank you. Ladies and gentlemen, good day and welcome to the H2 and FY23 Earnings Conference Call of Beta Drugs Limited, hosted by PhillipCapital PCG Desk. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions post the presentation concludes. [Operator Instructions]. Please note that this conference is being recorded.

I now hand the conference over to Mr. Sagar Shah from PhillipCapital India Private Limited. Thank you and over to you sir.

Sagar Shah — PhillipCapital (India) Private Limited — Analyst

Thank you, Melissa[Phonetics]. Good evening, everyone. On behalf of PhillipCapital Private Client Group. I welcome all of you for the H2 and FY23 earnings conference call of Beta Drugs Limited’s. From management, we have Mr. Rahul Batra, Chairman and MD; Mr. Nipun Arora, CFO, and Mr. Ashutosh Shukla, Director Sales and Marketing.

I now hand over the conference to Mr. Rahul Batra for his opening remarks and then we will open the floor for the question-and-answer for the Q&A. Over to Rahul, sir.

Rahul Batra — Chairman and Managing Director

Thank you so much, Sagar. Good evening, everyone. Thanks a lot for joining on the earnings call of BDI for FY23. I’ll start off with the consolidated revenue numbers. The total revenue from operations for FY23 has jumped by 24% to INR227 crores from INR183.84 crores as compared to the last year. The increase was mainly due to the ex-growth. On the different segments. There was a 21% growth in the export side, 24% growth from our own branches sales and API has given growth of around 65%. If we talk about EBITDA, If you exclude dollar impact, the EBITDA has grown by 28% to INR55.92 crores from INR43.7 crores as compared to the last last year.

While the EBITDA margin has extended to 25.04% from 23.8%, the positive impact as happened only because of the backward integration and the new innovations which we have done over the last year. However, considering the impact on Derma business, the consolidated EBITDA stood at INR53.88 crores. The consolidated net profit too increased by 24% To INR30.72 crores, strong INR24.8 crores. The overall gross have increased from 39% to 43% because of again the major is the backward integration. This is because of the leverage and that would — because of the leverage backward integration and our relentless focus on the cytotoxic segment only. Margins across the board have increased substantially. Over the last year — last five years, and this innovation and new developments have played a key role in becoming one of the fastest-growing oncology company in India.

Now, I’ll take the key insights and the future roadmap. To start with. I’ll start with the production capacity. This year has been a very phenomenon year where we have increased our production internal capacities to a great extent. I’ll start with BDL plant. The overall addition is mainly in the injectable side where we have. Increase our lyophilized injectables capacity, to three times which we we’re having earlier. We have installed one lyophilizer, which has tripled the capacity of the one we had earlier. Apart from this, we have also added more stage to our warehouses and we have upgraded our instruments in the micro and QC labs. These all expansions in BDL has been done to have furthermore regulatory approvals and to make the facility, one of the best facility in cytotoxic cylinder. If we talk about Adley formulations, we have added one more machinery in the oral block to enhance further production capacity. There is one entirely new dedicated line for injectables, have been added with two new lyophilizers, keeping in mind the domestic market.

This capacity has further increased the production, three to four times. This has been done to take the load off BDL and concentrate mainly Adley formulation for the domestic market. The overall idea, is to you have the sustainable growth from all the segments, whether it’s from the domestic or it’s from the international.

Now, we’ll talk about, two other API business. Now moving on to the API, this year we have added around five GLRs[Phonetic], three SSIs[Phonetic] and six large assembly lines. This seems to increase our capacity, not only for the domestic market, not only for the backward integration, but. also for the exports. There is one-line dedicated for the CEP filing. The Combination of this API and the formulation is the key for the growth of this Group. Adding more lines in API and supporting — adding more lines in the API and supporting the quality and the documentation will further enhanced BDL presence in the group.

Now. I will take you towards the key insights how — what has done — what has been done and what is the real future road-map for the company. Any companies growth depends on the research and development. So I’ll take on what research and development we have done and what are the plans for moving ahead. Companies growth and presence fell two the new research and development. In the past three years, company has launched many new molecules. Keeping in mind the focus and important of the new pipelines. This year we will be launching four to five new products which will include all the first to launch and some of the off-written[Phonetic] products and some of the products, which have not been launched in India. Not only this, we are also working aggressively from last 1.5 years towards the new drug delivery system, exclusively in the cytotoxic range, out of which three or four molecules will be launched by this year end.

There has been a continuous development going on towards achieving on delivering the new and innovative delivery system. The core strength of our development team is matching up the process of becoming one of the pioneers in cytotoxic. The journey which started by my father will shape up as a leading and one of the premier oncology company in India in the coming years.

Now I’ll take-up the business, brand — segment-wise. So the most important is our domestic sales and our own brands. On the domestic sales front, we at BDL has the most — we had BDL has the most enthusiastic and committed family of people who are putting the best efforts to make Adley[Phonetic] BDL a brand in the market. With the launch of our new products, this will enhance our presence in the remaining set of hospitals and the doctors, which are uncovered as of now.

Today, we are mostly present in all the corporate hospitals, but still there is a lot of room to be played. This division, this oncology is the fastest-growing segment across the globe. So, now we are focusing this hour and the coming years our main focus is towards the major cancer treatment institutions, that has mainly the regional cancer centers, the Tata hospital and the Railways. Already we have got some through — some go through with these institutions. We will make our presence felt with our dedicated team in the coming years. Our own brand is one business, which — where we have shown our strength in the last five years, this will continue to grow at the same phase.

Now coming on to the international business, exports. This year has been exceptional year where BDL has achieved one of the most regulated approval, that is, ANVISA from Brazil. ANVISA is one of the most important audit as it is a part of PIC/S, which is accepted across all Southeast Asian countries, mainly Thailand, Vietnam, Malaysia, Indonesia, Philippines, Korea. It is also accepted in South Africa, Iran and entire Latin-America and South America market. And thus, we need not required any further audits from these countries to get penetrated. This has opened up our doors to get the product registered in these countries. We have already initiated the business development activities and have signed our agreements with most of the clients in different countries. We have started filing the dossiers and most — and most importantly the good number of dossiers will be filed in the next coming months. We expect to file our dossiers for injectables in the next two months. Our regulatory team has been — there a lot of people who have been added in the regulatory team and we are aligned and focused towards doing the filings assess. We have filed around 77 dossiers in last year. And this year we plan to file close 150 dossiers in all these countries.

Also BDL has finished its three audits for EUA, that is Euro Asia and the final audit is planned in the first half of this year, maybe before it can be completed in the month of June, July or August. The business development activity in these countries have also been done already and we have already signed some agreements in two or three countries. The major focus after year audit will be Russia, Belarus and Kazakhstan.

Last but not the least, this year also we got our three audit done for EU, so we have got the deadline from the EU between October to February next year. So this year we might through with our EU audit in case any dates change will inform you accordingly. So the international business, is one of the key business where we see our growth coming up in the coming few years. Filing these many dossiers, and with the four dossiers, which has been filed, the business will be generated in the coming eight months to 10 months. Maybe some country can take the dossier registration time between 10 months, some can take between 24 months and some can take between 10 months to 12 month also. So depending on the timing of the the dossier registrations, we will be getting the business assets.

Most importantly, which has been done in the international market is that the injectable line is approved. Once we have got the injectable line, it means that the injectable line is one-line where we don’t require any [Indecipherable] for which we require further order. So it’s easier to get injectables registered as oral state no time to get registered. This was overall for the international business, now coming onto the API business.

We have expanded our production capacities three times as discussed earlier and now we aim to focus to get CEP approvals, which we will be starting by this year end. Also, we have started our discussions in 12 countries to export our API products in all those semi-regulated markets. We have developed four new molecules, in the last year and keep on further developing this year as well. Adley lab API has been the most focus area of all developments and as of gives lots of strength the formulation business whether it’s domestic or international.

Moving on to the CDMO business. — our CDMO — we acknowledge our CDMO partners, one of the most — On the CDMO business front, we have committed to give the best quality and all the new products to our partners. We will further enhance our partnership by increasing the portfolio of the product. We have been continuously delivering the product to our partners with the same quality and pace. To further enhance our delivery we have increased the capacity and added some more line. It will continue to be preferred choice for our oncology partners in India in the oncology manufacturing.

Last but not the least, the dermatology. Dermatology, we entered this nine months back. Today we are at a verge — almost at a verge of getting into the breakeven. We have got a good team, good professional team, who has started this dermatology. There are couple products of around 12 products which we are marketing currently. Out of that one niche product, which we had launched that is hair growth syrup on the name of Recapro. We intend to make this Recapro as one of the leading brand in India in coming years down the line.

We at BDL, the team of professionals who understand the concept of marketing and selling, it’s been months we have ventured in this dermatology. Derma and cosmetology is one of the most fastest growing segment across India. With a market size of around INR13,000 crores. Today, in this scenario in this world, every women want to look beautiful. So where the cosmetology becomes an important part of their daily routine. They go doctors, they spend whatever money they want to spend, but they want to look beautiful. So seeing all these things in mind and having the expertise we have in terms of the sales and marketing we ventured in dermatology. We’ve laid down our plans and have started executing those well, whether the plan include the number of prescribers to be added in the list, number of new innovative products or further to enhance everything having our own plant for the dermatology in the coming year. The division will soon be EBITDA-positive and in next three to four years, we’ll be focusing on two brands, which will be — which will be having a noticable size in the coming future.

Last but not the least, sales is not a [Indecipherable] it is just a commitment of growth to make it happen. We at BDL are committed to do it. We have done this in past, we know the super specialty division very well, and this is how we going to shape dermatology as well.

With this, I conclude our brief on the past achievements and future roadmaps to achieve the number. Thank you so much.

Operator

Thank you. Would you like to begin the Q&A session. Excuse me, gentlemen.

Sagar Shah — PhillipCapital (India) Private Limited — Analyst

Yes, we can start.

Questions and Answers:

Operator

Sure, thank you. Ladies and gentlemen we will now begin the question-and-answer session. [Operator Instructions]. We have the first question is from the line of Ashish Rampuria an investor. Please go ahead.

Ashish Rampuria — Private Investor — Analyst

Thank you for the opportunity. A couple of questions from my side, one, I think our receivables sort of has grown significantly and disproportionately vis-a-vis revenue. So any thoughts around that?

Rahul Batra — Chairman and Managing Director

Nipun, can you answer?

Nipun Arora — Chief Financial Officer

HI [Technical Issues]

Ashish Rampuria — Private Investor — Analyst

Hi. Hello,, how are you?

Nipun Arora — Chief Financial Officer

Yeah, I’m good. Ashish,,me — if you see our six month financials. That was six month ended 30th September. The days receivable was 96. So after this 96, now we are at 100, so I don’t think four days is a very big number compared to the revenue.

Ashish Rampuria — Private Investor — Analyst

No, fair point. I was comparing it FY22 vis-a-vis FY23. I think that’s 45 [Speech Overlap]

Nipun Arora — Chief Financial Officer

See, this will have — the revenue will increase these days will be continuously increasing by one or two there are three four days, but this is, I think, this is normal. I don’t think this is very unusual thing.

Ashish Rampuria — Private Investor — Analyst

Okay, fair point. Second question. I think in the investor presentation. I think our CDMO business grew by about 13% y-o-y and. I think, therefore, these segments have done very well. So, any color that you have to share on the CDMO business?

Rahul Batra — Chairman and Managing Director

CDMO business is one business where actually the market is same for everyone. And if you go on increasing the CDMO business, some companies will shift some business to other companies where they’re not getting price margins but CDMO business in spite of all odds have grown up by 13%, the market in — the CDMO business will grow at a size where the CAGR will improve in terms of oncology market. So if the CAGR is around 15%, the CDMO business will increase around 15% only as compared to our own international business and own brands, where the split of the business and the scope of achievement is more.

Ashish Rampuria — Private Investor — Analyst

Got it. So should I assume that own brand, International and APIs are the ones where we see growth going-forward and higher-growth going-forward.

Rahul Batra — Chairman and Managing Director

Yes, all those three segments will grow at a much faster pace as compared to CDMO. CDMO will keep on growing at a 10% to 15% as compared to — it is equivalent to the CAGR on oncology market.

Ashish Rampuria — Private Investor — Analyst

Got it. As of now, going back to my receivables point, so should we then assume as investors that our receivables will be in the range of 95days – 100 days, or is there some plan that we’d want to bring it [Speech Overlap].

Rahul Batra — Chairman and Managing Director

There are certain planned that we will reduce these number of days. Actually, you can well understand that at closing any pharma company, if you pick, the major sales happened in the last two three months. So this is once because if we talk about CDMO business, you talk about government institutions, they don’t — they don’t pay you in the month of March, every company wants to constraint their money in the month of March whatever payment collection comes, it comes under the month of April, even you talk about government business even talk about CDMO also, so those collections will come, those collections have come in the month of April. So every time you see in the month of especially February and March, the most of the sales will happen and the payment will be spot-on those months because of the financial year ending and this payment will be realized in the month of April.

Ashish Rampuria — Private Investor — Analyst

Okay, so if I may ask with INR62 odd crores a closing that we had on 31st March ’23, would that — what would that number be approximately at this point in time? Even an approximate will do.

Rahul Batra — Chairman and Managing Director

Nipun?

Nipun Arora — Chief Financial Officer

Ashish ji, normally it will — will be ranging between say 95 days to 105 days. So you can very well calculate, whatever the sales would be — it will be somewhere around the 95 days to 105 days range. And I’ll tell you what, there was a big customer for us who was — keep on telling us that I cannot pay in March and a huge payment came in first week of April. So this usually happens.

Ashish Rampuria — Private Investor — Analyst

Got it, that I understand. Nipun, my question was, would INR62 crore at today’s point in time sort of yet to create the balance sheet, would be lesser from INR60 odd crores, that was the question?

Nipun Arora — Chief Financial Officer

No-no that’s — I haven’t answered that the debtor days will be ranging between 95 days to 105 days. So if the revenue is increasing in that range, the revenue — like the revenue, this time was it INR247 crore, the revenue has increased say to INR300 crore, then it will be, you can calculate well that 95days to 100

Days odd some, if I calculate 100 days, so you have to think like that — in that range.

Ashish Rampuria — Private Investor — Analyst

Got it, got it, Yeah, sure. Okay, thank you

Nipun Arora — Chief Financial Officer

Obviously it cannot reduce if revenue has increased.

Ashish Rampuria — Private Investor — Analyst

Yeah, I’ve got. Thank you.

Operator

Thank you. [Operator Instructions]. We have the next question from the line of Soham Das from Agent Sky. Please go ahead.

Soham Das — Agent Sky — Analyst

Hi, am I audible?

Operator

Yes, please you ahead.

Soham Das — Agent Sky — Analyst

Thank you. Hello Rahul sir, interesting sort of numbers and congratulations on that. What I was thinking about was that — you have seen an immense increase in the capex, the all across-the-board, you are launching new products about 25 across solid and see more [Indecipherable] but you’re cracking the European markets and yet we’re just guiding for an additional INR200 crores, addition on the topline for the next three years. That does not seem like the management is under shooting the business potential?

Rahul Batra — Chairman and Managing Director

See, it is not about undershooting the business potential. To be very honest, we, in the last five years or seven years we have been fully dedicated to oncologists. We now understand the oncology market very well, and. It’s — creating the brand is something very different and it’s very tough. So each segment has to contribute in that manner. The target, which we have taken taken, doubling the sales in next three years, keeping in plastic all the segments, very, very intensely. So if we talk about of our own brands, we tend to achieve around INR140 crores, INR150 odd crores business in coming three years. If you talk about exports where we see how the major sales slides. Getting these approvals, these regulatory approvals is one of the toughest thing in the market. Today, if we talk plants in India, they’re not more than eight of 10 plants, who are — it’s approved eight. So we have all those leverage available, we will try that we will get the maximum business out of it, but sometimes things to be afraid that — see, no one wants to do less business, no one has a lesser aim. We always want to do more, but there are — there can be constraints tomorrow, that the prices can go down, then some of the dossiers have not been completed, fully, than these are the bioequivalence required to be registered. So keeping all those prospects in mind, we have shaped up the number for exports, keeping that thing — keeping the API business in mind where we added our capacity in a bigger manner that whatever business we are going to produce from — for the formulations, we need to support from the backend. So we supported. We have increased the capacity for API to support our formulation. This is just one thing, the other parts of the API business where we want to explain is the direct marketing, whether it is in the terms of domestic market or it isn’t the term of exports. So we have already started communicating with 12 of the customers. 12 of the countries where we want to export our business, export our APIs also. So this is not about restricting ourselves, this is about having fair target, which a team can achieve where everyone should feel motivated.

Soham Das — Agent Sky — Analyst

Granted [Phonetic] Granted[Phonetic]. I have [Indecipherable]. On that note, can you please tell me what is the current selling and marketing distribution interest that our company is incurring annual?

Rahul Batra — Chairman and Managing Director

Nipun?

Nipun Arora — Chief Financial Officer

Is it ongoing?

Soham Das — Agent Sky — Analyst

And do you see inputs coming on that in the coming years in our path INR50 crores – INR60 crores?

Nipun Arora — Chief Financial Officer

On [Speech Overlap]

Rahul Batra — Chairman and Managing Director

Sorry. Okay, Nipun. Nipun you go ahead please

Nipun Arora — Chief Financial Officer

Yeah, our selling expenses are somewhere around 3.5%.

Soham Das — Agent Sky — Analyst

3.5%, So now that your trying to crack into new markets there is expansion in this percentage?

Rahul Batra — Chairman and Managing Director

Yes, the expenses will grow further, but on the same times, the revenue will be four times a multiplication of the expense, we will be doing. So the first selling expenditure [Technical Issues]

Operator

Excuse me, gentlemen, we will reconnect the management. Excuse me sir, please proceed.

Rahul Batra — Chairman and Managing Director

Yeah.

Operator

This is the operator, Mr. Batra, we lost your line. Please proceed.

Rahul Batra — Chairman and Managing Director

Yes, so. I was telling that the selling expenditure will be on the same line, rather it can increase by 1% or 1.5%, but on the — on the contrary, the sales volume will be on a on a higher side.

Soham Das — Agent Sky — Analyst

Right. Got it, so the percentage, a proportion of your revenue will be more or less similar or in-line with the current one?

Rahul Batra — Chairman and Managing Director

The guidance’s say, the EBITDA margins remain close to 25% to 26% once we achieve these targets. It can go up further also. But this is what the minimum, bare minimum, we are targeting.

Soham Das — Agent Sky — Analyst

Got it. Thank you. I mean, thank you.

Operator

Thank you. [Operator Instructions]. We have the next question from the line of Bashir Zaveri from Crown Capital. Please go ahead.

Bashir Zaveri — Crown Capital — Analyst

Hello sir. Thanks so much for taking the question. I hope I’m audible.

Operator

This is the operator, sir, if you could use the handset. Mr, Zaveri.

Bashir Zaveri — Crown Capital — Analyst

Okay, is this a bit better.

Operator

Yes. please go ahead.

Bashir Zaveri — Crown Capital — Analyst

Yeah, so congratulations on great set of results. And the good but — amazing growth target. So I just wanted to know, how growth would be a bit linear in pace or because we are waiting for some approvals in other countries for our exports. So maybe we could see higher-end of the growth in FY25, rather than FY24. So how would our growth range be in the next year? And at what level would our EBITDA margins be at 25% – 26%.

Rahul Batra — Chairman and Managing Director

Okay, so the growth will be — the growth rate will be same continues — it will be a continuous — it will be continuous growth for three years. It will range between 25% to 30% in the coming three years. It is not like only in for FY25, we’ll get 40% growth and this next year we will get around 15% or 20% odd growth. No, the target is the growth trajectory, which we have been maintaining over the past three years – four years the same trajectory we will be maintaining for the coming three years down the line. And coming onto the EBITDA — coming into the EBITDA margins, the EBITDA margins will remain will cross around 26% and this is the near minimum which, as I told earlier also, we are targeting. It will — we will see an impact of EBITDA growing beyond 26% also provided all these things shaping up nicely.

Bashir Zaveri — Crown Capital — Analyst

Okay, that’s great, sir. And so I just one more question if possible. I just wanted, what kind of risk do we see in achieving? What could speed bump to our faster growth if any that you could see?

Rahul Batra — Chairman and Managing Director

Risk for the speed bumb we can only see if we guys become reluctant and we become lazy. So as of today — I myself only 39 years-old, Varun is 37-years-old,. Mr. Ashutosh who is driving sales and marketing is probably 40-years-old and Nipun, who is the CFO is around 38-years-old,- 39-years-old. So we are actually very young company, and to be very honest, we start working 10 am, work till 8pm to 9 pm in night and we don’t feel [Indecipherable]. So the rest only, the second we see tomorrow we become lazy and we don’t think that we are of that nature and we have been nurtured up to that level, when we become lazy tomorrow, otherwise risk factors in terms of — we have covered entirely. We were experiencing some of these factors to [Indecipherable] is that when the intermediates supplies were stopped from China when the API was not coming on-time, then immediately we put a step forward and we increased our API capacity also. Now we have almost covered our risk points, but tomorrow — tomorrow we don’t think there is any point of such where we see that can be a major hurdle for us.

Bashir Zaveri — Crown Capital — Analyst

Sir. Kindly [Indecipherable] helps you a lot and great to see such a young companies, all the best and all the best for future results.

Rahul Batra — Chairman and Managing Director

Thank you.

Operator

Thank you. We have the next question from the line of [Indecipherable] Chaudhary an investor. Please go ahead. Mr. Josy, please go ahead, your line has been unmuted. If you have muted the line from your end, please unmute and speak. As there’s no response from this line. We move to the next question from the line of Tarun Batra from [Indecipherable]. Please go ahead. Mr. Batra. Please go-ahead, your line has been unmuted.

Tarun Batra — — Analyst

Yeah, so my question is what are our top three brands in the market and how much is the contribution of both to the revenue.

Rahul Batra — Chairman and Managing Director

Ashutosh Ji?

Ashutosh Shukla — Director Sales and Marketing

Yeah. I would say. I would call five brands, in fact, they are contributing around 40% to the overall sales And those brands are [Indecipherable] Enzalutamide Carboplatin and these are the major brands, which is contributing around 40% to the oral sales.

Tarun Batra — — Analyst

Are we also planning to take them to say something like better like INR30crores, INR40crores, INR50 crores brand?

Ashutosh Shukla — Director Sales and Marketing

[Speech Overlap], I think top six, it is very difficult to make a INR30 crore. Yes, we are planning with certain molecules in future, which we think that we can make it a INR10 crore plus brand. But as of now, INR30 crores is like a very distinct thing. Because if you see any, cytotoxic brand, the biggest brand is close to around INR80 crores, right. So I think the thing is as good as like 40% market-share, which is extremely tough because the number of players in the market is very-high.

Tarun Batra — — Analyst

Okay, thank you.

Operator

Thank you. [Operator Instructions]. We have the next question from the line of Satwik Jain from Generational Capital. Please go ahead.

Satwik Jain — Generational Capital — Analyst

Yeah. Hi, am I audible.

Operator

Yes, please go ahead.

Satwik Jain — Generational Capital — Analyst

Yeah. Sir, other expenses, if we compare year-on-year over the last six [Indecipherable] versus the same time last six months, we [Indecipherable] volume by around 40% – 45%, so could you shed some light on that, although it INR10 crore number [Indecipherable] still if you could shed some light on your filling up, it would be helpful?

Nipun Arora — Chief Financial Officer

[Indecipherable] Sir, in this expenses there are traveling expenses also, there business function conferences expensive and there are legal and professional expenses, some repairs. So that’s why the turnover having three — well if I consider the percentage of turnover — just a moment — it increases by 2%. So there are few expense which have increased and moreover pending expense are also coming in this segment only. Okay. [Indecipherable] internationally, the marketing expenses I think they would be coming under this only. So that [Speech Overlap]

Rahul Batra — Chairman and Managing Director

Marketing, I’ll answer, freight outward [Speech Overlap] i’ll highlight on this in the last year in the particularly last year, we had participated in three international conferences. So that expenditure has been put in this. Moreover, the traveling of International people there, it has increased a lot because you can’t sit in the office and just sign an agreement, you have to see the distributor, you have to see our partners who is promoting. So that traveling has also increased. So this is — somehow will be remaining at the same percentage as the sales progresses.

Satwik Jain — Generational Capital — Analyst

I understood. I understood. And the second second part on the first question was regarding this only so currently are receivable days DSOs are around 100 days. So just wondering like in the past and there will be like a new credit [Indecipherable] pending, what is your material guidance on this, like in future also, it will be maintained and this or it is somewhat risker than will you try to reduce it down in the future?

Rahul Batra — Chairman and Managing Director

Sir. I have I think. I have answered this question. Again [Indecipherable] if I compare it to the 30th September 2022 results, it has been over four days only. So, somebody asked me like cannot be reduced from the number of 52, so I told him that if the — say if we are targeting towards the INR270 crores or the INR300 crore whatever the target is, if you take 90 days of that — that will come to around INR74 crores. So in any case, it won’t be reduced, but we’ll make it in the range of 95% to 105% days. That we are sure.

Satwik Jain — Generational Capital — Analyst

Understood. On the credit losses side, so. I think in the [Indecipherable] they are very-very low, that the payments are not received. That kind of thing.

Rahul Batra — Chairman and Managing Director

In the creditor side, you are saying.

Satwik Jain — Generational Capital — Analyst

Yes.

Rahul Batra — Chairman and Managing Director

In the creditors side, see, lot of raw-material comes from China, which we have to make some advanced payments also. And there are some raw-material in which credit period is very less. So that make the difference. On the reverse side, we have to give credit better to our CMO partners, we have to give credit to our institutional partners, so that makes the difference. Otherwise, if you see the working capital days, these are gone up by only four days -five days.

Satwik Jain — Generational Capital — Analyst

Correct. Correct. [Indecipherable] And also backward also, my understanding was that there is one difference is that, as we scale up as we would start moving to the main exchange also [Indecipherable] is that if you could possibly look at quarterly update and a quarterly [Indecipherable]. So that would be helpful for the investor community at large? Yeah, thinking on that line, sir. As soon as we migrate to main Board. So we obviously we have to do that, that’s a requirement.

Rahul Batra — Chairman and Managing Director

Right. Right. Thank you so much and all the best. Thank you.

Operator

Thank you. [Operator Instructions]. We have the next question from the line of [Indecipherable], an investor. Please go ahead.

Unidentified Participant — — Analyst

Am I audible.

Operator

Yes, please go ahead.

Unidentified Participant — — Analyst

Sir, first of all, congratulations on good set of numbers. And the moment will continue. Sir, I want to I understand, what type of investment on every year required for growing 25% or 30%?

Rahul Batra — Chairman and Managing Director

So there total — there are two types of capex. One is coming up with the new plant and going towards that target. One is doing an internal capex. So the internal capex which we did till last year that was mostly around INR20 crores — INR18 odd crores.

Nipun Arora — Chief Financial Officer

It’s been quite — right

Rahul Batra — Chairman and Managing Director

INR18 crores. So that will be equally divided in among the three companies, whether you talk about BDL, whether you talk about Adley Formulations whether you talk about Adley Labs. So we have done equal investment in all the companies. Now, we see a lot of leverage available, the reason we invested lot of money in Adley Formulation was because Beta Drug, we just want that front to be focused only on the regulated markets and mainly on the Indian, who are [Indecipherable] and for domestic market and for the small — where we just want Adley Formulations to be — Adley Formulations to be a state-of-the art facility where we can also — we are also supplying from the Adley Formulations to two – three country. So this facility, we have just dedicated to for the domestic market and the API side, if you see, we have invested around six — around four or five reactors to the three fold glass assembly in that particular line. Putting altogether, we don’t see now major capex is coming in next two to three years to achieve the top-line, which we have indicated for FY25 – FY26.

Unidentified Participant — — Analyst

So no-no fund-raising plan. I think.

Rahul Batra — Chairman and Managing Director

No fundraising. INR18 crores also what we have spent in the last year for the capex that has been done from internal cash accruals only.

Unidentified Participant — — Analyst

Right. so what is the net-debt. If you can tell?

Rahul Batra — Chairman and Managing Director

The company is debt-free rather than net.

Nipun Arora — Chief Financial Officer

I’ll answer that Rahul Ji. The net-debt, rather it is INR3 crores positive. We have the total debt on the short-term borrowings and long-term borrowing side of INR16 crores, whereas we have a cash-and-cash equivalent of more than INR19 crores. So we are

Unidentified Participant — — Analyst

Right.

Nipun Arora — Chief Financial Officer

Positive — so we’re positive cash — [Technical Issues].

Unidentified Participant — — Analyst

Right. And in this year employee cost has increased a lot so, are we building sort of future — any comment on that employee cost.

Rahul Batra — Chairman and Managing Director

Employee cost has increased because more-and-more professionals have been hired this year. In terms of QC, In terms of QA. In terms of marketing, in terms of sales. In terms of finance, lot of, lot of new people have been added. And this it’s a continuous process. Tomorrow, you want to go to the international market, tomorrow, you want to be a leader, tomorrow you want to be one of the pioneers, then you have to have the good human resource. So this is how the employee cost has been increased.

Unidentified Participant — — Analyst

Good. And sir. FY24 growth, we are — you are seeing on particular oncology segment? in the two to three years as I have read very through, the cancer patients are increasing..

Rahul Batra — Chairman and Managing Director

Yes, the oncology in one segment — Actually, the oncology is the fastest-growing segments across the globe. The number of patients who have been detected by cancer is increasing tremendously. So the scope of this oncology is huge, cytotoxic plays a very important role in giving the treatment to our patients. The first-line therapy, the first-line treatment is cytotoxic’s only. So we as a company, we have at the end that position that we are one of the leading manufacturers in India. Now, we want to attain this leadership position across the globe also. So that’s why we are only focusing only on oncology. Apart from that, we have known dermatology, which we have already — which I’ve already discussed in my beginning speech.

Unidentified Participant — — Analyst

Right. So we can expect 25% – 30% growth for the next two years to three years, there will be no major hurdle [Technical Issues]

Rahul Batra — Chairman and Managing Director

We don’t see — we don’t see we don’t see any hurdle coming across two years to three years in achieving this target with CFM for FY25, FY26.

Unidentified Participant — — Analyst

All right. And I want — a request I want to make management. If the result numbers can be given in lakhs or crores, it will be very helpful. It takes lot of time to convert them into crores and like that because now numbers are given in rupees or when those increasing, I think next year we are going to grow INR30 crores of topline. So [Technical Issues].

Rahul Batra — Chairman and Managing Director

Okay, we’ll give — we’ll definitely consider this, though it was a requirement of ROC that now, the numbers have to be given in Lakhs, if you download are results, if you download balance sheet form NCSI it will be in lakhs only, but we’ll definitely consider your request and we’ll try to make it in lakhs.

Unidentified Participant — — Analyst

That’s all from my side. And one more question, sir. What this is —

Operator

This is the operator. Mr. Chaudhary you would have to come back sir.

Unidentified Participant — — Analyst

Okay, Franklin. Okay, thank you. Thank you for the opportunity. Thank you.

Operator

Thank you. We have the next question from the line of Karanveer Singh from Nuvama Wealth, Please go ahead.

Ranvir Singh — Nuvama Wealth — Analyst

Yeah. Thanks for taking my question. I’m Ranvir Singh from the Nuvama. So first of all, thanks for giving this good set of number and I think the kind of group figure, we see that gives you confidence that probably we’ll reach the guidance you have been giving. Just two quick. Thanks, from this result. I wanted to understand, in this year in the second-half for the full year. what was the contribution of Derma segment [Indecipherable] and what was the gross margin there? Okay. Nipun.

Nipun Arora — Chief Financial Officer

[Technical Issues] revenue from derma product INR3.75 crores and the EBITDA negative was two product.

Ranvir Singh — Nuvama Wealth — Analyst

This was EBITDA negative.

Nipun Arora — Chief Financial Officer

For the whole year.

Ranvir Singh — Nuvama Wealth — Analyst

Gross — Yeah, gross margin or gross profit I wanted, because I understand, as you know, we are [Technical Issues].

Rahul Batra — Chairman and Managing Director

Nipun, can I answer that question.

Nipun Arora — Chief Financial Officer

Yeah, yeah sure.

Rahul Batra — Chairman and Managing Director

Yeah, The gross margin was 65%.

Ranvir Singh — Nuvama Wealth — Analyst

Okay, okay, that’s fine. So, going-forward. I think once we scale-up our EBITDA margin should be in-line with the overall company’s EBITDA margin currently here — that is what we can make in next two years – three years that — can we expect that.

Rahul Batra — Chairman and Managing Director

Yes, 100%. Absolutely.

Ranvir Singh — Nuvama Wealth — Analyst

Okay, and in presentation, you also mentioned that in dermatology we’lll be having our own manufacturing setup. Maybe in next two years, so what kind of capex that will require. If you could give some indication here.

Rahul Batra — Chairman and Managing Director

So the dermatology doesn’t require a huge capex. The total estimate which we have exclusive on INR20 odd crores, that includes three lines, one in the pharma grid and two in the cosmetology. And apart from that there will be one separate QC and Micro lab. Overall estimate is close to around INR20 crores for dermatology, but this process — this new plant we will start building, once we have the confidence of being EBITDA-positive for good six to eight months.

Ranvir Singh — Nuvama Wealth — Analyst

Okay. Okay.

Rahul Batra — Chairman and Managing Director

And only for this plant, we don’t need any capex from outside, we’ll be arrangements with some of our internal cash accruals.

Ranvir Singh — Nuvama Wealth — Analyst

Okay, okay. Hello, sir and last month we got approval from Colombian authority, so was there any sales here in this quarter due to this approval, have we’ve been able to sell something there in Colombian region?

Rahul Batra — Chairman and Managing Director

Very sorry, I didn’t [Speech Overlap]

Ranvir Singh — Nuvama Wealth — Analyst

Colombia approval we got.

Rahul Batra — Chairman and Managing Director

Okay,

Ranvir Singh — Nuvama Wealth — Analyst

Last month. So have you been able to sell something there or still we are in-process of filing and it will take sometime.

Rahul Batra — Chairman and Managing Director

So Colombia in Lima. We got — that was in May, and last month we got that was ANVISA. The audit was done in the month of March and we got the certification, last month. So in Lima, we already cleared in the month of May and we started filing out dossiers in the month of August. So today, as we are talking, we have already put around eight dossiers for submission and we are expecting around four dossiers registration within next 10 days to 15 days. So till now we have not done any sales in Colombia, but the sales will happen in the month of — we are expecting in the month of June.

Ranvir Singh — Nuvama Wealth — Analyst

Okay, June, this next month so you’re expecting this?

Rahul Batra — Chairman and Managing Director

Yes, yes. Well, we’ve already got the projections from our partner there in Colombia and he has shared — He has already shared the pro forma with us, we are just expecting the registration certificate to come out as soon as the registration certificate come out will be supplying the goods next month.

Ranvir Singh — Nuvama Wealth — Analyst

Okay, okay thanks. And you said that it takes around 10 months to 12 months to convert dossier to sales that what filing the dossier [Speech Overlap]

Rahul Batra — Chairman and Managing Director

Yeah, so we filed filed in the month of August and we got the registrations — we’ll be getting the registration in the month of May. So it takes — it took around eight to 10 months to get the registrations. So we have already filed eight dossiers. Now we are in the process of preparing some more dossiers and the best part is that, last month when we got ANVISA triggered and ANVISA for ENVIMA we didn’t get injectable triggered, but for ANVISA, we got the whole plant triggered. So now today, we have the injectable line also approved for in ENVIMA for Mexico for Brazil. So now we start filing dossiers injectables in Columbia in Mexico and Brazil also.

Ranvir Singh — Nuvama Wealth — Analyst

Okay, and post post the registration will be able to supply, if we get the client there.

Rahul Batra — Chairman and Managing Director

We already have with clients in Mexico, we already have a client, in Colombia, we already have a partner. Almost in there are 12 – 15, Latin-American countries, we have a partner. We have already done business development activity, we have already finalized our partner there.

Ranvir Singh — Nuvama Wealth — Analyst

Okay, okay, that’s great. Thanks a lot. Just one last if you — if I can in API export — in API business was there any export element direct export of API?

Rahul Batra — Chairman and Managing Director

Yes, we did one export shipment to Algeria. And we — just now we have got one order from Pakistan and now we are making some — we are — we have just entered a contract where we are supplying some items to Bangladesh, and Russia. So API exports will take another one month one month – 1.5 months will be true with three-four countries.

Ranvir Singh — Nuvama Wealth — Analyst

And what would be the quantum there. Amount of export,

Rahul Batra — Chairman and Managing Director

This year the total expectation from API exports, we are expecting close to INR3 crores to INR4 crores only.

Ranvir Singh — Nuvama Wealth — Analyst

Okay, okay, sorry. Thanks. Thanks. All the rest. And that’s it from my side. Thank you, everybody.

Rahul Batra — Chairman and Managing Director

Thank you.

Operator

Thank you. We’ll move to the next question we would request participants to limit their questions to two during the initial round. We have the next question from the line of Siddharth Iyer from O3 Capital. Please go ahead. Mr. Siddharth Iyer, your line has been unmuted. Please proceed. If you have muted the line from your end, please unmute and proceed. We will move to the next question from the line of Chirag Fialoke from RatnaTraya Capital. Please go ahead.

Chirag Fialoke — RatnaTraya Capital — Analyst

Hi, good afternoon. Rahul, Nipun [Indecipherable] the opportunity and congratulations on the continued elevation. Two, my question. One is on the next 24 months, I believe we don’t foresee a large tablets and the feedback from them implement capex and that [Indecipherable] capex, what will be [Indecipherable] that will be the first question.

Rahul Batra — Chairman and Managing Director

I’ll tell you one thing in pharma, there is a continuous scope of putting some capital involved in terms of expansion in terms of maintenance, so that will be a continuous number. Today, as we stand, but we don’t see any major changes required in terms of any facility. We don’t see any [Indecipherable] require, any panels required, any increase or warehouses required. So as on today, we don’t see anything, but tomorrow we get one good consultants, if he comes and he says, okay, this area needs to be expanded. When we do that. So as on today, we cannot tell you that how much money will go in for the expansion or for the maintenance, but in pharma because that’s a continuous process and it will happen for next two years – three years.

Chirag Fialoke — RatnaTraya Capital — Analyst

Sure. But the major expansion behind us is what?

Rahul Batra — Chairman and Managing Director

The major expansion is behind us, but it will keep on — keep on like we will keep on expanding, we’ll keep on doing some maintenance work, we keep on adding some no more instruments, we’ll keep on adding some areas, we may keep on — have to add some more [Indecipherable] somewhere. So this is a continuous process.

Chirag Fialoke — RatnaTraya Capital — Analyst

Got it. Thank you. This one, second question is on the branded side. you have executed beautifully in last one and half years, the total branded sales for the last three reported periods, six month ending 2022, six months ending September ’22 then six month ending this March ’23, that will be involved in the range of INR30 crores to INR35 odd crores. Anything to read into that or is the six month period too small to sort of really gauge anything. For the last six months, it is broadly, we’ve been in the range of INR31 crores to INR35 crores crores for the branded business. I’m just wondering whether there is any commentary around that?

Rahul Batra — Chairman and Managing Director

Ashutosh Ji?

Ashutosh Shukla — Director Sales and Marketing

Yeah. From this H1, we are planning to make it up INR40 crore — INR40 plus crores and H2 will be [Technical Issues]

Chirag Fialoke — RatnaTraya Capital — Analyst

Understood, Sir. Understood and in your earlier comments where you said the 5 brands are 40% are the top fives how much more are [Technical Issues]. It will be — I believe, I understand you can’t share sort of exact numbers, but more slower than the overall branded growth.

Ashutosh Shukla — Director Sales and Marketing

Like despite them — like as I said that they are contributing around 40%, so where growth is close to around 12% to 14% and the remaining growth has come from the new brands and other molecules.

Chirag Fialoke — RatnaTraya Capital — Analyst

Understood, sir. Thank you so much. Congratulations for continuing [Indecipherable].

Rahul Batra — Chairman and Managing Director

Thank you.

Ashutosh Shukla — Director Sales and Marketing

Thank you.

Operator

Thank you. [Operator Instructions]. We have the next question is from the line of Sachin Doshi, an investor. Please go ahead.

Sachin Doshi — Private Investor — Analyst

Yeah. Hello. Thank you for the opportunity. My question was In-line with somebody who asked about the risk factors that we foresee for achieving the growth target for 2026. So if you could give us some more color in terms of where the growth will come from in terms of maybe have any long-term contracts and you know what will be the contribution of your our own brands, in the [Indecipherable] business and derma business. So some more color on this line will be really helpful. That was my first question.

Rahul Batra — Chairman and Managing Director

So should the overall which we have set for FY25-FY26 where we see the major contribution to comes in terms of the growth, not in terms of absolute number in terms of growth we see from the export side. Second, we see from the owned brand side. Thirdly, we see from the API side in the domestic market. Today, as a standalone we are manufacturing around 34 products in oncology, APIs, which in India, hardly any company is doing this. So we see lot of sales coming from — particularly from the API side also, of course, they will be as I discussed earlier, the CDMO business will keep on growing at a rate of 10% to 12%, the growth — major growth driver will be exports, our direct international exports, our own brands and third is the API business.

So and in terms of the own brands are concerned, how we will be achieving is as rightly said Mr. Ashutosh that the drivers will be our top-five products, which will increase onwards every month-on-month basis, plus the new products. This year, we’re launching four new products, those will be the first to launch in India, plus we are in the process of developing four NDDS products. These products will be launched by December end. So these NDDS technology what we have developed in-house, will drive the future growth for the domestic market.

Sachin Doshi — Private Investor — Analyst

And then — and just one follow-up then. So, you are basically planning on growth, by admitting that you will be filing the dossiers and we will be getting approvals. So that is one of your assumption that maybe you’ll get both things on time and we will get the approvals as well to achieve that growth by the recent [Indecipherable].

Rahul Batra — Chairman and Managing Director

See. The thing is, the first — the first step is to get a plant accredited. So today we have got a big certification. That was the first step. After this, your regulatory team should be strong to have a complete dossiers, which can be filed in different countries. Today successfully, we have completed the submission of our — in Colombia market. Colombia is one of the regulated markets. Again, as we talked, we are in the process of finalizing six injectable dossiers. So now these injectables filing will start. So it is not an assumption basically, it is a calculation. Maybe the calculation can go beyond if I’m assuming that 10 months to 12 months, it can go from 12 months to 16 months, but it has to have.

Sachin Doshi — Private Investor — Analyst

All right. [Speech Overlap]

Rahul Batra — Chairman and Managing Director

This time [Speech Overlap] the timeframe can be different, it can vary from four months to six months, but 100% registration will come and that business will start on these on the aspects.

Sachin Doshi — Private Investor — Analyst

Yeah. Thank you. Just one last one question, You mentioned about the Mexico filing the [Indecipherable] one. [Indecipherable].

Rahul Batra — Chairman and Managing Director

Yeah. After ANVISA. Mexico accept ANVISA approval. So, Mexico, Malaysia, Thailand, Vietnam, South Africa, Iran all these countries accept ANVISA approval. So we’ve already got ANVISA, so now we need to have an audit from these countries. We can immediately go for a desktop documentation approval and we can start filing our dossier there.

Sachin Doshi — Private Investor — Analyst

So what about [Indecipherable] you mentioned that it is planned for it was planned for November ’22, so I’m not [Speech Overlap]

Rahul Batra — Chairman and Managing Director

So it, was planned for November ’22, but since we have already got Brazil now, we don’t need to go for this audit now.

Sachin Doshi — Private Investor — Analyst

Okay. All right. That was the two question from me. Thank you, very much.

Operator

Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to Mr. Sagar Shah for closing comments. Please go ahead, sir.

Sagar Shah — PhillipCapital (India) Private Limited — Analyst

Thanks for valuable time and especially the entire team of a Beta Drugs limited. Rahul Ji, before we closed, what you. I’d like to make any closing remarks.

Rahul Batra — Chairman and Managing Director

Yes, Sagar, if is thank you. [Technical Issues]

Sagar Shah — PhillipCapital (India) Private Limited — Analyst

[Technical Issues] Proceed sir.

Rahul Batra — Chairman and Managing Director

This year FY22 – FY23 was an exceptional year for us. We have seen — we have seen lot of audits coming this year, where we have seen three audit for Europe, where we have seen audit for Eurasia, where we have completed and successfully and got audit done for ANVISA. So this year was basically, you can say a breakthrough year for us. Not maybe the numbers of of INR4 crores – INR5 crores has not been attained by us, but in future, we are seeing these numbers to grow very rapidly. Along with this, not only the — we talked about accreditations, but the today as oncology, we signed one of the pioneers in developing all the new molecules, new FTL’s[Phonetic], new NDDs last couple of years we launched Good NDDS, which have got a good acceptance in the market and we are in the process of giving some good LVDS to the oncology market in coming 1.5 years. So those products will have some niche segments. We’ll come up with the brighter boom and we will be well, we will we depreciating ourselfs from the oncology manufacturers who are prevalent in India. So that was my concluding remarks. Thank you all.

Sagar Shah — PhillipCapital (India) Private Limited — Analyst

Thank you so much Rahul Ji, and thank you everyone. Thank you and have a good day.

Rahul Batra — Chairman and Managing Director

Thank you. [Operator Closing Remarks]