Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Biocon Limited (NSE: BIOCON) Q4 2026 Earnings Call dated May. 08, 2026
Corporate Participants:
Prashant Nair — Head, Investor Relations
Kiran Mazumdar Shaw — Executive Chairperson
Shreehas P Tambe — Deputy Chief Executive Officer, Biocon Biologics Limited
Kedar Upadhye — Chief Financial Officer
Analysts:
Neha Manpuria — Analyst
Damayanti Karai — Analyst
Unidentified Participant
Unidentified Participant
Siddharth Negandi — Analyst
Tushar Manudhane — Analyst
Imtiaz — Analyst
Surya Patra — Analyst
Vishal Manchanda — Analyst
Nitin Agarwal — Analyst
Presentation:
Prashant Nair — Head, Investor Relations
Thank you Michelle and good morning everyone. Thank you for joining us today to discuss Biocon’s fourth quarter and full year results for financial year 2026. A press release and the investor presentation relating to today’s results have been filed with the Exchanges and are also available on our website for your reference. As a reminder, in fiscal 25 we had certain one time benefits including contributions from generic lenalidomide in the US and divestment of our India branded formulations business.
To enable a like for like comparison, we have provided adjusted financials excluding these items in our fact sheet and presentation. Let me now introduce the management team. On today’s call we are joined by Biocon Chairperson Dr. Kiran Mazumdar Shaw, Mr. Srihas Tamia, CEO and Managing Director of Biocon Limited Mr. Kedar Upadhyay, CFO of Biocon Limited along with other senior members of our management team. We will begin with opening remarks from Kiran, following which we will open the call for an interactive Q and A session.
Please note that this call is being recorded. The recording will be made available on our website within a day and the transcript will be shared shortly thereafter. Before we begin, I would also want to remind everyone about the safe harbor related to today’s call. Comments made during the call may be forward looking in nature and must be viewed in relation to the risks that our business faces that could cause our future results, performance or achievements to differ significantly from what is expressed or implied by such forward looking statements.
And now I would like to hand over the call to Kiran for opening remarks. Over to you Kiran.
Kiran Mazumdar Shaw — Executive Chairperson
Thank you Prashant and good morning everyone. I would like to start by saying that Q4 marked a strong close to an important year for Biocon. We delivered a resilient performance, operating performance despite a very volatile macro environment, while also completing one of the most significant strategic transitions in our journey. The external environment remained challenging throughout the quarter with geopolitical uncertainty continuing to impact supply chains, logistics and energy costs. What stands out for me is the way our team stayed focused on execution and delivered a good performance, reinforcing the underlying resilience of our business.
I want to particularly acknowledge our team for the way the integration of our biosimilars and generics business was concluded seamlessly in under 100 days with no disruption to business operations, customers or patients. It reflects the strength of our execution engine and the discipline with which we run this organization. This was a very complex organizational and financial undertaking and it has been delivered with speed, discipline and clarity of intent. With this, we are now operating as one unified biopharma entity with a stronger balance sheet, improved leverage metrics and a more integrated global commercial footprint.
As I’ve said before, this is a value accretive step that creates a simpler, stronger and more efficient operating model, unlocking synergies across our supply chain, commercial engine and capital allocation. We are now moving from a phase of integration and investment to one focused on execution, operating leverage and value creation. From a capital and investment perspective, the heavy lifting is largely done and behind us. Over the past few years we have invested materially to build global scale capabilities and capacity, particularly in biosimilars, insulins, peptides and complex genetics.
As we stand today, this major investment phase is substantially complete. The emphasis now is on improving utilization, expanding margins and driving steady improvement in return on capital employed. A key pillar of this transition has been the continued strengthening of our balance sheet. During the year we made further progress on deleveraging and improving financial flexibility. With the buyout of minority shareholders in Biocon Biologics and the repayment and refinancing actions already taken, we now have full economic ownership of our largest growth engine.
Importantly, interest cost savings have begun to accrue and the full annualized benefit will be visible from FY27, further supporting profitability and cash generation. Now let me come to key business developments. Now before moving to the financial performance, let me highlight a few business developments that reinforce the strategic progress we are making. Across our portfolio, we achieved important product approvals in biosimilars and generics, further strengthening our presence in regulated markets.
We received Health Canada approvals Obusaya and Vevzuo, our denisomumab biosimilars to Prolia and Xgeva, expanding our footprint in bone health and oncology and adding momentum to this important franchise. After the close of the quarter, we announced the US Commercial launch of Bosaya and Okelso. Our Denisomo map bear similars. In the US we also received US FDA approvals for liraglutide during the quarter covering both diabetes and weight management indications. Taken together, these developments reflect continued progress in advancing our portfolio across oncology, immunology and metabolic diseases while steadily translating approvals into commercial scale up.
Let me now walk you through the financial highlights. In FY26 the group delivered a biosimilars led 10% year on year growth in operating revenue excluding the one time bolus of generic lenalidomide in Q4 FY24 25, biosimilars grew 12% year on year and generics excluding lenalidomide was 13% growth year on year. CRDMO business grew 2% year on year. EBITDA was at 1073 crores with a margin of 23% adjusted for generic lenalidomide. In the base, this was up 29% year on year. The improvement was primarily driven by favorable revenue mix and operating leverage benefits in biosimilars.
The reported net profit for the quarter before exceptionals was 179 crores. For FY26 adjusted for generic lenalidomide, operating revenues and EBITDA grew at 13% and 25% respectively. EBITDA margin stood at 22% which is up around 200 basis points year on year. On a like to like basis, reported net profit for FY26 before exceptional stood at 436 crores. I would now like to discuss our business performance in a segmental manner. Let me start with Biosimilars. The BioSimilars business enters FY27 on a strong footing with a broader portfolio, expanding global footprint and improving profitability, positioning it well for the next phase of growth in North America.
Yes, Intech continued to gain traction in the US market. This is our Biosimilar ustecinumab with growth supported by expanding formulary coverage and increasing physician confidence. The brand continues to build momentum in line with expectations, reinforcing our confidence in its longer term potential. We also made progress with the launches of Bosaya and Okelso which is our biosimilar Denisomumab in the us now moving to Europe during the quarter we broadened our immunology footprint with the launch of Jesyntech across multiple markets, expanded our ophthalmology presence with Yesa Filly, which is our biosimilar aflibercept in the UK and other key countries and continue to expand our oncology franchise with Abev Me which is our Biosimilar Bevisumar and Ogiveri Biosimilar Trastuzumab.
We also launched Fraxi which is our Biosimilar denisumumab for bone health in Germany. On the regulatory front, Swiss Medic approved our rustekinumab Biosimilar Yesentech and in the UK and the MHRA granted approval for the ECH Autoinjector, enhancing patient convenience and supporting broader uptake coming to emerging markets. Execution during the period was driven by tender wins, new product filings and selective launches across priority markets. We continue to scale the business through a mix of self led operations in key countries and partnerships in others.
Coming to segment financials. Biosimilar’s revenue for Q4FY26 stood at 2756crores representing a 12% year on year increase driven primarily by advanced markets. EBITDA for the quarter stood at 720 crores representing growth of 33% on a year on year basis. This translates into an EBITDA margin of 26%. Margins in this segment continue to reflect the benefits of improved revenue mix as well as operating leverage. R and D investments for the quarter stood at 7% of revenues, reaffirming our ongoing commitment to innovation and pipeline advancement.
For FY26, biosimilar revenues and EBITDA grew at 16% and 40% respectively on a like to like basis. Now coming to genetics, we secured multiple approvals across key markets led by products in diversity, oncology and immunology. This included Liraglutide across the US in the form of which is Generic Victoza and Generic Saxenda, Europe Generic Victoza and Australia Generic Saxenda. In addition, we received approval for Everolimus tablets in the US and for Tacrolimus across Latin American markets. When it comes to segment financials for generics, revenue stood at 847 crores and adjusted for the one time generic lenalidomide supplies in Q4 of FY25 revenues grew 13% year on year driven by generic liraglutide sales.
In Europe EBITDA stood at 75 crores. EBITDA margins were at 8%, improved nearly 300 basis points over Q3 of this fiscal driven by higher volumes and operating leverage for FY26 adjusted for generic lenalidomide, generic revenues and EBITDA grew 17% and 73% year on year respectively. And now coming to our final part of our my presentation which is our CRDMO business in Q4 FY26 revenues from operations were at 1037 crores, up 2% year on year and up 13% quarter on quarter. FY26 revenue from operations were at 3739 crores, up 3% year on year.
Operating EBITDA margin at 25% for the year was in line with Syngene’s revised full year guidance. Overall numbers reflected the specific impact from a single Large Molecule Biologics client, with the underlying business showing steady momentum. Singing completed 14 client and regulatory audits during the quarter, bringing the full year total to 85. It also obtained the GCP NABL accreditation during the quarter, reinforcing adherence to globally recognized standards for clinical research and data quality.
I now would like to Wrap up with my concluding remarks. To conclude, FY26 marked a pivotal year for Biocon. With the integration complete, the major investment phase behind us, and the balance sheet significantly strengthened, we have entered the next phase of our journey. Our focus now is firmly on disciplined execution, driving growth, expanding margins, and delivering a sustained improvement in return on capital. As we look ahead to FY27, we expect to increasingly benefit from the foundations that have been laid, with performance improving progressively as the year unfolds, especially as our new products scale up meaningfully in the second half.
In biosimilars, recent launches across markets are beginning to scale, which should support continued growth and operating leverage. In generics, the emphasis will be on improving profitability as newer assets stabilize and utilization improves. And at Syngene, following the challenges seen in FY26, the focus remains on execution and translating recent investments in CRDMO capabilities and into more stable performance. With a stronger foundation in place, we believe biocon is well positioned to deliver consistent performance and long term value creation.
And with that, I now invite questions.
Operator
Thank you very much, ma’. Am. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask questions may please click on the raise hand icon before asking the questions to the management. Please introduce yourself, providing your name and your organization name. Please limit yourself to maximum of two questions so we can accommodate as many participants as possible. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from Neha Manpuria.
Please introduce yourself and proceed with your question. Ma’. Am.
Questions and Answers:
Neha Manpuria
Yeah, thanks for taking my question. This is Neha from Bank of America. Two questions from me. First, on the biosimilars revenue, given that we spoke about execution in the opening remarks, how should we think about FY27, FY28, given we have had some launches, you know, in the back end of 26. Also, you know, there was an impact of the planned, you know, shutdown that we took in third quarter and a bunch of launches, but we haven’t really seen material improvement in biosimilar revenue, you know, fourth quarter versus second quarter, if that is the comparable number given we have also seen market share increases.
So is it fair to assume that full stabilization of that disruption that we saw in the third quarter is not. Not yet done?
Shreehas P Tambe
Let me answer that. Can I go? Let me respond to that. Ne. I think. Thank you for your question. I think this is important to look at. When we did the Q3 last quarter, we had indicated, like you rightly said, that we are slowing down some of these things to get ready for a greater supply capability in the coming fiscal. And I think if you look at the numbers between Q3 and Q4, you are seeing a sequential change where we moved from a, from a quarter which was 279 to $80 million to about 300 plus million dollars this quarter.
So there’s a sequential growth of 12% that you are seeing on a routing basis in the revenues. So that’s the first indication. You’re also seeing the margins stable for the full year basis which has been consistent. So that’s I think the first indication that the business is ramped up in the right direction. The second question that you asked is that how is it from an outlook perspective for 2728? And while we’ve not guided specifically on any numbers, I think the fact that we’ve got several products launching in the coming fiscal which is 2728, the, the ramp up starts moving from the, the coming financial year in 2728 towards the later part of the year and that’s why you set yourself up building capacity, increasing scale and that is what you will see going through the year.
Last quarter also said that as part we’ll start seeing a ramp up which will come in towards the second half of the current fiscal year and we’ll see that happen. We’ve publicly stated we have a negotiated settlement date with the originator for our afibercept launch in the United States and you will see that play out in the coming fiscal year. We’ve seen tremendous success with our biosimilar ustekinumab which continues to gain market share. In fact, if you’ve seen the IQV numbers as of February and the overall market is close to a fifth already which is a very strong showing for a product which has several competitors there.
Recent news of of payers have also shown that we’ve been able to secure good formulary placement. So we are quite bullish about how our products are shaping up. And you know we’ve, we’ve said that fiscal 2728, as we get towards the, the later part of the year we’ll start seeing the, the ramp up that we prepared ourselves for in new Center.
Neha Manpuria
I understand you don’t want to give specific guidance but if I were to think about 4th quarter FY27 exit run rate, you know, given the launches that we have, you know what in your mind would be a comfortable number, you know, based on the launch pipeline?
Shreehas P Tambe
Yes, I know that you, you asked that question in different ways but I Think the, the important thing. And I’ve again if you go back to what I’ in previous conversations as well, this is not a quarter on quarter conversation. Look at it on a broader window. If you looked at the business that we built over the last eight quarters or even four quarters you will see a substantial shift. If you see just this year’s numbers that we posted on a, on a rookie basis there’s been a 16% growth over last year and you’ve just seen yes intech which is our biosimilar stellar are starting to show numbers in the pll.
You will start seeing that flow through in the second half of fiscal 27 as more products come in. So I can only point you towards how we’ve done in the past which is a strong showing already and then tell you that look at the four quarters going forward which would be a good way to see how the business ramps up.
Neha Manpuria
Understood. And Kedar, how should we think about deleveraging in fiscal 27 now that you know Biocon the merger, Biocon Biologic merger is done and is it fair to assume that all of the free cash flow generation that we have, you know, would be largely used for deleveraging any color there?
Kedar Upadhye
Yeah, that’s true neha. I think every dollar that we generate out of free cash the first claim is going to be to reduce the debt and we are pretty serious about it. If you remember in March 25th including structured instruments we had in fact more than one and a half billion dollar of net debt. That’s down to 1.1 now. So it will hover between 1.1 to 1.2 subject to working capital and free cash that we generate hereafter will go towards production of net debt. That’s right. We also interest cost reduction.
If you remember first quarter of this year we had booked 280 crores. In that quarter it was trending upwards to 300 crore and from those levels now we are down to about210,220. It will have some currency impact because large part of our debt is in dollars.
Neha Manpuria
But
Kedar Upadhye
In that sense about 70, 75 crores per quarter of interest cost reduction is being reflected in the P and l.
Neha Manpuria
Got it. Thank you so much.
Operator
Thank you. The next question is from Surya Patra. Please introduce yourself and proceed with the question. Mr. Surya Patra, I have unmuted your line. Please. Please proceed sir. As there is no response we will move on to the next question which is from Damyanti Keray. Please introduce yourself and proceed with the question. Ma’. Am.
Damayanti Karai
Hello. Good morning all. Thank you for the opportunity. My first question is again on biosimilars. So first if you can give US split for FY26 sales between developed market and rest of the world and then if you can comment on two specific products aptly Versip where you will be coming soon in the market as per your settlement date. So there we have seen one of the earlier entrant going very aggressive in terms of taking market share etc. So how do you see that opportunity? And second question is on as part which you indicated is a key product for FY27.
So what kind of visibility we have in terms of higher demand or like your capability to supply this product to gain meaningful market share from here on. Thank you.
Shreehas P Tambe
I think. Let me respond to the first one. Kedar can come in. In the past also we’ve said our distribution is pretty diversified between advanced markets, emerging markets. If you, if I give you a split, it’s been roughly Noram at 40:35 in Europe and 25 emerging markets. You see sometimes a little bit of a shift between North America and Europe. You see sometimes North America slightly higher but. But roughly 75, 25 if you’re asking advanced markets and. And emerging markets could be between 78, 22 in a particular quarter.
But that’s the broad split. The K can give any specifics if there’s anything. The other question that you asked in terms of our product launches, as I said, we are looking to bring our biosimilar afibrecep, it’s branded DSR Phili to the United States in the second half of this year. I think what you’ve rightly cited is that there is a biosimilar today and it’s been quite successful. It’s a very encouraging sign because this is a niche product, a specialty one which is injected in the eyeball. So one of the questions around it was will ophthalmologists be comfortable using a biosimilar?
I think that myth’s been busted that there is comfort in using that and there is willingness to use biosimilar. So it’s paved that path for us. Given our track record of high quality products, we believe that there’ll be a significant interest as we move forward. So we feel good about our yes affiliate launch and as the product ramps up in fiscal 27, we are positioned to talk to you more about that. Your other question was related to Biosimilar Aspart Insulin Aspart that we talked about our brand name.
There is Kirstein, again it’s a product we’ve discussed several times with you. We see a tremendous opportunity. We’ve been very careful as it’s a chronic product. We’ve said multiple times both for peptides and for insulin that we are very uniquely placed as the only company with a biosimilar insulin and a peptide portfolio. So we’ve never looked at it as a sprint. It’s a marathon for us. We have 100% share in certain closed door networks that are there in the US already and we built our credibility there and we’re looking to expand that to the commercial play in the second half of this fiscal year 27.
So watch this space. We will keep you posted on how ASMA ramps up in the current fiscal year.
Damayanti Karai
Thanks Reas. And the second question I wanted to ask is on your capital allocation going ahead. So as you mentioned you are done with majority of investment in Capex etc and focus ahead will be on cash generation but just wanted to have some more color on your focus in R D. What kind of products you can add on to your portfolio say two to three years down the line. And apart from the Malaysia plant do you have any other like Capex remaining from your end?
Shreehas P Tambe
At the beginning of the conversation Kiran called out very clearly that that we are in a space where capital allocation is largely behind us or capital investments are largely behind us. And given that we’ve now merged the biosimilar businesses and the generics business it strengthened our balance sheet right away immediately straight out the market that’s happened, operating leverage starting to kick in which you’ll see flow through the first quarter that that will come out, you will start seeing it.
You heard Kedar talk about the fact the the use of proceeds has allowed us to to bring in 300 crores of interest savings over the years which would mean 75 watt crores per quarter. So you are seeing a strengthening on the P L now coming to the portfolio side that allows you to do a lot of other things outside of this because you’re no longer making investments in Capex. You’re trying to now see how you can get those assets to deliver maximum profitability for you. And that’s what we’ve done with the biosimilars business.
If you tracked us, which I know you have for the last three years where we’re starting to see that layout as operating leverage and you will see that in our generics business as well because you have a very strong portfolio that we’ve built in the generics business as well, which is very complementary to our biosimilar business. And that will kind of feed off the. The biosimilar capability we built across several countries. So that is what we expect to do. We consolidate the business in the next four quarters and set it up for acceleration in the coming fiscal.
Damayanti Karai
Cheers. I’ll get back in the queue. All the best.
Shreehas P Tambe
Thank you.
Operator
Thank you. The next question is from Sanjay Kohli. Please introduce yourself and proceed. Sir.
Unidentified Participant
Yeah, this is Sanjay from Goldstone Capital. We are based, we are private investment group based out of the NCR region. I have a specific question on the reported numbers in the income statement. Not been able to figure out under the head this items that will be classified to reclassify to PNL later. There’s a large number of 760 for the quarter and then which will not. Which will be reclassified and which will not be reclassified. About 210 crores. So what exactly is this?
Kedar Upadhye
Yeah Sanjay, the items which go to. If you’re referring to what is captured in the other comprehensive income, there are some adjustments that you do there which don’t appear in the normal P and L. I’ll take it offline. Why don’t you take it offline?
Unidentified Participant
How do I do that?
Kedar Upadhye
No, no, let’s get in touch after the call. Let’s speak and we’ll explain. We have full backup.
Unidentified Participant
Okay, thank you.
Operator
Thank you. A reminder to all the participants that you may please click on the raise hand option to ask questions. We’ll take the next question from Avnish Barman. Please introduce yourself and proceed with your question.
Unidentified Participant
Yeah, hi, good morning. This is Avnish Verman from Vakaria. Shia sir, just one question for you. In March I think we saw some draft guidelines coming from the FDA which talked about significantly reducing the RD cost to get like new biosimilars in the market. So I just wanted your opinion on how that impacts one, biocon’s existing products, commercialized products and second the pipeline. Thanks.
Shreehas P Tambe
Well, thanks Avnish for your question. I think you’ve been tracking this. Well we’ve been talking about this for a while where we believe that the FDA which has led the way and it’s saying that you do not need a phase 3 clinical trial to approve these high quality biosimilars. And that has significantly allowed us to do two things. One is it has reduced the development cost by 50%. So it’s after the development cost and it’s accelerated products from a development standpoint by at least three to four years which is again cutting down time for products which can get into market.
The common belief then is that it’s lowered the bar to the market, which is incidentally not accurate because what has happened is while the clinical phase 3 trial requirement has been taken away, there has been a expectation of higher compatibility standards, analytical comparability standards that have been set up so that you know, you prove before you get to the clinical stage that your product is highly similar to the originator drug. So the companies who’ve been developing this are clearly at an advantage.
While it does look attractive to get into this market and which is why you’re seeing also lots of interest in this, which is again another thing we’ve said for a while that biosmullers is the next growth area and you’re seeing investments happen again with a lot of interest. It does give companies like biocon an advantage given our proven track record in CMC comparability and analytical characterization, which will be brought to bear as we go forward.
Unidentified Participant
So I understand it being beneficial for biocon in terms of the products that you are still yet to bring in the market. But what about the products where you know, biocon has a good position in the market? I mean, where you are the incumbent and you might be facing some incremental challenges in those products?
Shreehas P Tambe
We do not see an incremental challenge because the products that we already have brought to market and if you were to look at the products that have been in the market have got a very strong leadership position. If you look at the ones in the US which we utilate or collectively track on this call our oncology portfolio, which is in the medical benefits space, have 4th of the US market today and one is to get an approval, the other is to be able to reliably supply it. Third is to do it consistently and fourth is to be able to be a reliable partner to the physicians, to the healthcare givers and be a reliable supplier to the patient who’s looking forward to these products.
And that takes time. Credibility is built over a period of time. I think we’ve been fortunate because it is something that we worked hard towards being a fully integrated player. Amish has given a lot of levers to Python to operate and be successful in this space. So we do not see a challenge because of these revised guidelines. In fact, it’s advantage the way I see it.
Unidentified Participant
Thanks. Thanks a lot.
Operator
Thank you. The next question is from Siddharth Negandhi. Please introduce yourself and proceed.
Siddharth Negandi
Hi, thanks for the opportunity. This is Siddharth Negandi from cwc. Couple of questions. One could you give us an understanding of the constant currency sales in each of the divisions? The second one was if you could give us some color in terms of market shares and the $200million benchmark that you had shared last year. If you could give us an update on both of those. The market shares as well as the number of products that are above $200 million in biosimilars.
Kedar Upadhye
Yeah, maybe I can take that. So Siddharth, the growth numbers in rupees that we have reported, if you could roughly take about 3, 4% out, you’ll get the dollar number. For example biosimilars, we are saying it’s 12% growth year on year in this quarter the dollar growth will be about 7% or so. So that’s the constant currency number. In terms of the products that were beyond 200 million. We have done good progress. Insulin now has cost 300 million actually this year. So that’s the bracket that it has cost crossed.
And that includes Glad Gene, aspart, human insulin, DSDP. So total insulin franchise is now beyond 300 million. Adalimumab is now beyond 250 million. And paid filgra stream, trastuzumab are hovering around 200 million or slightly lower than that. Bevasizumab has crossed 100 million. Now this is without contribution from us because a launch has just been made and then there are products like Etanercept. Yes, intake is inching up now. So that’s how Siddharth, the progress on these four products that we had spoken last year.
Siddharth Negandi
Great. And Kedar, if you could also help with any update on the market shares that you shared last year and the margin improvement that we are seeing in the generics business adjusted for rev limit. Just wanted to understand, is that a function of the change in the API and formulation mix or is there something else there?
Kedar Upadhye
Yeah, so sorry, your first question, Siddharth was about the biasimulus margin. Sorry, I missed that.
Kiran Mazumdar Shaw
I think he wanted market share.
Siddharth Negandi
Market share.
Kedar Upadhye
So market shares are steady. I think the Oncology market shares are steady around 23 to 25%. Clargene market shares is also what’s reported about 11. So that’s fine. And the next question was in terms of generics margins, we are guided for the fact that from the first quarter till fourth quarter, sequentially as the sales do inch up, there will be a margin improvement. So I think quarter four you are seeing more than 10%, roughly 10% EBITDA margin. And that’s because of both overall sales have gone up.
So we have operating leverage benefit as the facilities get utilized and there is a positive product mix as well.
Siddharth Negandi
Thanks. Thanks Kedar.
Kedar Upadhye
Thank you.
Operator
Thank you. Participants to ask questions please click on the raise hand option available on your screen. The next question is from Tushar Manudane. Please introduce yourself and proceed.
Tushar Manudhane
Thanks for the opportunity. This is Tushar from Motila just on the biosimilars what could be the capacity utilization currently?
Kedar Upadhye
Yeah, I think Tushar it will obviously vary plan by plan. So there is no one number that we could give it to you now. But I think capacities do remain healthy and like what we mentioned last quarter in terms of upgrades and things like that, we are getting ready for the growth now. But there’s no one number that we can basically Malaysia and you know Bangalore to and within each location like for example Malaysia now we have two lines in Bangalore. There are multiple suits as we have been speaking so there’s no one number.
But I think utilizations are healthy.
Tushar Manudhane
The direction which I’m trying to get through is that while we have a very robust portfolio and subsequent new approvals that might come through. But from a capacity standpoint do we really need further capacity expansion or the current capacity would be good enough to drive growth for FY27 28 in particular.
Kedar Upadhye
Yeah. So as the Malaysia doubles both for drug substance and drug product I think we are fine there. Plus we have some external you know cmos as well as you know and in Bangalore I think there could be minor debottleneaking here and there. But as of now we don’t see any need for a large Greenfield capex to shut.
Tushar Manudhane
And this Malaysia doubling the timeline for this
Kedar Upadhye
The DP has happened. The line two has been is getting qualified as we are speaking and will get operational soon. DS the drug substance doubling will happen towards the end of this financial year.
Tushar Manudhane
So effectively so for full year 27 compared to what we are in 26 the this DP Malaysia in particular is what will drive and some amount of debottleneaking at Bangalore from a capacity standpoint is what will drive growth for FY27. Is that the safe assumption?
Kedar Upadhye
Yes. And after that as well? Correct.
Tushar Manudhane
Got it. And just to complete this point like considering the earlier commentary in terms of product launches largely second half FY27. So is it that first half is going to be largely stable? Maybe currency benefit is what will drive growth for biosimilars business?
Kedar Upadhye
Yeah, I mean we don’t guide specifically Tushar but like what Shreya said you should budget for incremental growth from new launches more towards second half. And yes, there’ll be a currency advantage in the first half.
Shreehas P Tambe
Just to add to what Kedar said, Tushar just now you asked about the capacity and then the linkage to as part to that Malaysia drug product line comes on stream this quarter and as you bring products, as I said to the market, this line starts supplying product to the market. Which is why the ramp up you will see happen through the year and as product moves up you will see it, you know, ramp up towards the later up. That’s the, that’s the conversation we’re having. The capacities are already invested in and you will see the ramp up as it goes.
It’s not, it’s not like there is, there is no demand or capacity in the beginning. It just ramps up because the demand is set up and capacity comes on stream starting Q1.
Tushar Manudhane
Great. And just lastly to connect on this particular aspect. So will this require reinspection or we are good to go in terms of commercials?
Shreehas P Tambe
No, no, we are good to go on commercial.
Tushar Manudhane
Great, great. So that’s on bias image on the generic side just to understand we’ll you know, a good amount of investments largely behind both in terms of apex as well as product development. And now we are scaling up in terms of business without any, let’s say a niche product. So to say how to think about the scale up of this business and subsequently the margin improvement. Maybe if you can just help us understand what’s the gross margin currently and how the operating leverage will play out, let’s say in the coming time.
Shreehas P Tambe
I, I lost the question in detail. Can you step in? I can step in after that. Go ahead.
Kedar Upadhye
Yeah, yeah. I think Tushar, the gross margins are in early 40s and that’s the 2/3 API, 1/3 generics. That’s kind of a split today. And as you know, you know the GLP1 revenues which was about less than 10% of the overall, you know, business last year in FY26 that will scale up and multiple launches that we alluded that will scale up. I think Shreya, the question was what’s the direction on generics growth and margins.
Shreehas P Tambe
Yeah. So Tusha, I think if you heard the opening remarks that Kiran started with, if you want to look at the base business itself, I think that is where you’re starting to see growth on a sequential basis which is the first good indicator that you are seeing. Leaving us out the exceptional that we saw on Lena Leader Mine, the focus for us going forward is very clearly going to be on margin improvement because we built state of the art facilities. These facilities have now come on stream and as demand ramps up and capacity utilization is there, you will start seeing the margin improvements.
But the focus is clearly going to be on, on making sure that that operating leverage kicks in in the coming quarters.
Tushar Manudhane
So that would be supported by it’s a scale up of existing product or we will require new approvals to come through.
Shreehas P Tambe
So it is a mix of both. Many of these products, the approvals come in ahead of time. Unlike the biosimilar business where product approval and launch are fairly close, depending on the patent negotiations or the patent dance, the generics portfolio benefits from earlier visibility and hence we are looking forward to launches in the coming years. Which is why the capacity investment was done ahead of time, allowing us to do a lot more things. He just referred to the peptide portfolio. Now, biocon would be set up in a very different way where you have fungibility for drug substance for the peptide portfolio as it gets into the fermentation space, which is again there hardly any competition.
There is. And then you have fungibility for the drug product facilities which have also been set up. So as that demand wraps up in the coming quarters and coming years, you will start seeing better utilization and a better return on that investment that we make.
Tushar Manudhane
Got it, sir. And just lastly, BWS is where I missed the sales for FY26. If you could just repeat,
Kedar Upadhye
It’s 100 million Tusha. It’s entered in that bracket now.
Tushar Manudhane
This is
Kedar Upadhye
Contribution from US Geography.
Tushar Manudhane
Got it, sir. Thanks a lot. That’s it,
Operator
Thank you. The next question is from Imtia Shepherdin. Please introduce yourself and proceed, sir. Mr. Shafuddin, please proceed with the question.
Imtiaz
Can you hear me?
Operator
Yes,
Imtiaz
Yes. Hi, this is Imtiaz Sheffieldin from Barclays. A couple of questions for me with regards to your US dollar bonds. Would you be able to provide some color on your hedging policy? I know you have benefits, I mean currency benefits. But any specific hedging policy you have on the US dollar bonds? That’s my first question.
Kedar Upadhye
Yeah, Imtiaz, on the bonds, we don’t have to hedge because we have a natural hedge. We are largely a dollarized company, so we have significant dollar cash flows. So we don’t hedge our loan book, actually.
Imtiaz
Good, sir. Secondly, also on your US dollar bonds, your bonds become callable from October this year, although at a premium price. But how are you thinking on the bonds given that your US dollar bonds are at 6.67% coupon and you have talked about a focus on reducing your average cost of debt.
Kedar Upadhye
Yeah. In the as we are tracking the situation, we are happy that bonds are trading at a premium. And you must have noted in the last few months both the rating agencies have upgraded the rating. So we are watching the situation. I think we have to evaluate whether it makes sense to pay the call premium in the first year. As you know, there’s 50% call premium in the first year, 25% in the next year. So that’s the 5 NC2 structure that we had. So at this point of time, MTI’s We Are Watching the situation.
We are happy with the way things have progressed and we are happy with the upgrades and the idea will be to continue on this journey.
Imtiaz
Great. Thank you.
Kedar Upadhye
Thanks. Thanks.
Operator
Thank you. The next question is from Surya Patra. Please introduce yourself and proceed.
Surya Patra
This is Surya from Philippe Capital. Thank you for this opportunity. A couple of questions first. With the ramp up that we are likely to see in the biosimilar portfolio, although we have started seeing strong growth in the US business front given the kind of products that has been launched during FY26 and the products like the Ilia that is there along with Dennis moma of contribution in the current finance. So what is the kind of momentum that we would see for the US business and what is the likely share of US business in FY27 versus FY26?
Because basically what we are seeing that okay so far it is the non US would have supported the growth meaningfully but now there is a strong lever for the years to perform and really contribute meaningfully to the margins also. So how the mix likely to see the shift.
Shreehas P Tambe
Thanks. Thanks Surya for, for your question and I think this is, this is very important if you two things that I will say. One is in the past you heard me say that that market share is not necessarily the only proxy for success. And the other thing that I’ve said is that market share and ASP have always been inversely proportional in a medical benefit product. And we’ve been very clear about making sure that we will grow business profitably. Growth is only when it’s profitable. So we’ve been very careful as we picked up market shares.
The medical benefit products that you see today where we’ve, you know, had a fourth of the market, we focused on making sure that that we’ve retained that profitably. We would be fine if that market share is not the proxy for where we are, but we will grow that slowly. The market has examples where you have tried to gain market share very quickly but then you crash out also very fast because that’s how the medical benefit space operates because you have a declining average selling price, which is very contrary to how the pharmacy benefit space operates.
We can have an offline discussion to walk you through the model, but last quarter when we had a conversation on how we are approaching denosumab, which is another important asset that we’ve launched in the US it’s branded. Kilan just talked about it in her opening remarks. It’s branded Posaya and we will be very careful in doing it because one of the brands is in the pharmacy benefits space and the other one is in medical benefit. And last quarter, as I was saying, our Chief Commercial officer Matt Eric walked the the the team on the call about our strategy to commercialize them.
So our focus is always profitable growth and not necessarily market shares. So we’ll be very careful in doing that. So I wouldn’t necessarily look at market shares as the only proxy for success. Numbers will pray play out over the year and you will see them being more enduring over a period of time. So yeah, I would advise you to look at that. My guidance would be look at a broader quarter rather than trying to look at this as a quarter on quarter immediate launch and an impact on market share kind of a business.
Surya Patra
Yes sir. Any clarity on the exclusivity that we could have for Ilya now?
Shreehas P Tambe
So for iv, when we’ve our biosimilar position that we got, as I said at the beginning, there is a biosimilar that is there in the market already and we’ve seen encouraging numbers from there which tells us that we can actually commercialize that market very well, which is good news. The second part is we have our terms for negotiation and settlement are confidential and likewise we wouldn’t want to comment on others, but we believe we will be in a good position when we get out of the gates for the launch in the US as that plays out, Surya, you can see it come through.
But it won’t be fair on my part to comment on the terms of the settlement.
Surya Patra
Okay. This insulin opportunity has been a kind of or the kind of situation market situation in the global market given the GLP play and all that. So this is making us or position us very strongly in the insulin side and the doubling capacity what we are talking of also that is also complementing that story. So hence now this expanded capacity, what we are talking sir, what is the kind of liver that it is adding to the the current insulin revenue of around 350 odd billion dollar what Keda just mentioned.
Shreehas P Tambe
So again we’ve been very clear right from the beginning that we are in, in that sense the, the only insulin company which has a peptides portfolio and, and that’s something that we’ve heavily indexed on. We built a very strong insulins franchise globally. There are several markets, I know we discussed the US and certain European countries in this call but there are several countries in emerging markets where our market shares are in excess of 50% and we are a very responsible supplier. We’ve continued to grow that franchise in dollar terms.
We’ve refrained from giving numbers but we see a very encouraging response in terms of how the products grown both for the long acting and the short acting insulin or even the recombinant human insulin which I’m constantly reminded is a very large you know, requirement in several countries. So we remain committed Surya and we made these investments ahead of time. So you will see us, you know get those products to market. We’ll start playing out in the numbers starting second half of this year is the izar up view.
Surya Patra
Last one question from myself. So having seen the integration well and also having done investment into the generics in advance so what should be the investment priorities for FY27 now for you
Shreehas P Tambe
See most like, and I think, I think you heard Kiran in the beginning, most of our investments are behind us and our focus, focus is always going to be now that you have a strong balance sheet and you’re looking to have operating leverage that’s coming. The focus is going to be capital allocation. At this stage we’ll only focus on seeing how do you profitably, sustainably grow the business. We’re not looking at very big ticket, greenfield kind of expansions but we don’t need it to support the business plan that’s going forward.
So focus is now on execution, consolidating the business and walking it through the quarters. As we bring the business up in a sustainable manner. You will see the, the EBITDA growth that you’ve seen already in the margin profile improvement. The focus will be to sustainably do that on a consistent basis.
Surya Patra
Sure. That means CAPEX is likely to subside.
Shreehas P Tambe
Yes, we’ve already said that.
Surya Patra
Yeah, okay, sure. Thank you sir. Wish you all the best.
Operator
Thank you. We’ll take the next question from Vishal Manchanda. Please introduce yourself and proceed sir.
Vishal Manchanda
Hi, good morning. This is Vishal from Systematics. Can you break up your biosimilar sales between US emerging market, US Europe and the rest of work?
Kedar Upadhye
Yeah. Vishal for the last two quarters the mix of North America is slightly higher. In the past we have said North America is about 40. Europe and little of Japan, ANC 35 and emerging market 25. Our hunch is over the long term. That’s how it will stay last two quarters because of prioritization and higher growth. North America is higher and that helps us obviously in the margins. So let’s watch how this pans out. We, we obviously want all three geographies to grow equally.
Vishal Manchanda
And which would be your largest product as of now within the biosimilar portfolio.
Kedar Upadhye
Yeah, within the biosimilars Noram led by US is about 46% this quarter. Last quarter is. It was slightly higher and
Shreehas P Tambe
I think the question was on products. I think you give us the product inch broader.
Kedar Upadhye
Yeah. So product wise globally Vishal, we have already spoken the insurance franchise Adalimumab. Now we don’t break products into geography that will be too much of a granularity. But happy to talk. I
Vishal Manchanda
Mean globally like globally which is your largest biosimilar product?
Kedar Upadhye
Yeah, we just spoke about Vishal. Total insulin franchise globally is crossed 300 million. Adali Mumbai globally again is beyond 250 million. And then the other two key oncology assets are a little less than 200 million. Bevacuzumab is now 100 million plus. And then there is Yasin Tech, there is Etanercept. That’s the mix.
Vishal Manchanda
And are we seeing annual price decline in the base portfolio or that is more or less flat. And we if you could share some color on the base business erosion or that remains flat.
Kedar Upadhye
Yeah, so subject to. So I think each geography has its own pattern. Europe is usually very steady. And North America because of the strategy that we deployed on the ASP for the last three years we have not seen much erosion. But yes, I think we should budget for some erosion Vishal. But tough to tell you one specific number because it will vary depending upon the product life cycle.
Vishal Manchanda
Understood. And just one final one. What percentage of our biosimilar sales is manufactured in house?
Kedar Upadhye
Yeah, I mean the, the, the whole portfolio is in house except Adalimumab and etanercept. Yeah. And we do take some help from CMOs in the human insulin. But we can come back to you with a specific number. Visha.
Vishal Manchanda
Okay, thank you very much. Thank you.
Operator
Thank you. The next question is from Nitin Agarwal. Please introduce yourself and proceed. Sir. Mr. Agarwal, please proceed with your question.
Nitin Agarwal
Hello.
Operator
Yes sir. Please proceed.
Nitin Agarwal
Yeah so on the insulin business, can you just Give us a sense. You talked about, you have now the short acting, long acting as well as a recombinant insulin. What is the addressable market globally for, you know, across these three, you know, sort of incidents put together, you know, from, from a, from a size perspective,
Shreehas P Tambe
From a, from a dollar number perspective, I think we can get you the numbers, but we’ll be around at $7, $8 billion overall. Insurin RHI is about a billion and a half globally and you see the other two being the region of about 3 billion. But the fact is that these numbers, numbers are not as reported by iqvr. It changes significantly as you get towards emerging markets and tender businesses. But needless to say it is a significant business with just the originators and limited number of players.
In the US you have just US, which has a biosimilar insulin. So that’s a tremendous franchise to be focused on. There are other attractive assets that certain innovators are focused on which interest them. That leaves a very large playing field for Biotcon
Nitin Agarwal
And Shrees on that account. They’ve been offered some recent approvals with Chinese companies which have come through. How should one think about that? In the past Chinese have had a tendency to disrupt markets. So do you foresee some of those challenges for us in the broader insurance space?
Shreehas P Tambe
I mean the first indication of this is that it’s, it signals the fact that what we’ve been saying, again it validates is that it’s a extremely attractive market for people to come in and we’ve seen certain European companies wanting to enter as well, partnering with other companies from China. And this is clearly what we’ve been saying. It’s a tremendous opportunity. The product remains in, in business, in requirement several decades after it’s commercialized. There are limited players and the product is going to be there forever.
So it kind of validates our thesis on insulin and again it also tells you that it takes a long time to develop it unless you’re fully integrated and have the scale that we built over decades. Being successful is not just having a product or an approval. You need to be consistent. You need to be in a position to have fermentation capability, the drug product capability, device capability, navigate the IP space. So it’s a, it’s a long term commitment which biocon has done over the decades and we are committed to this.
Nitin Agarwal
Thank you so much.
Operator
Thank you ladies and gentlemen. That was the last question for today. I would now like to hand the conference back to Mr. Prashant Nair for closing comments. Thank you. And over to you, sir.
Prashant Nair
Yeah. Thanks, Michelle. Thank you, everyone, for joining the call. If you have any additional questions, please get in touch with the IR team and we’ll be happy to address them. Thank you.
Operator
Thank you, members of the management, on behalf of Biocon Limited that concludes this conference. Thank you for joining us and you may exit the meeting now. Thank you.