Blue Jet Healthcare Ltd (NSE: BLUEJET) Q1 2026 Earnings Call dated Jul. 22, 2025
Corporate Participants:
Unidentified Speaker
Shiven Akshay Arora — Managing Director
Ganesh Karuppannan — Chief Financial Officer
VK Singh — Chief Operating Officer
Analysts:
Unidentified Participant
Advait Bhadekar — Analyst
Kunal Dhamesha — Analyst
Meet Katrodiya — Analyst
Piyush kumar — Analyst
Shashank Krishnakumar — Analyst
Arpit Tapadia — Analyst
Ayush Agarwal — Analyst
Bansi desai — Analyst
Ravi Purohit — Analyst
Aman Soni — Analyst
Jaiprakash Kumhar — Analyst
Ajay — Analyst
Abhishek Sharma — Analyst
Vidit Shah — Analyst
Ankit — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q1FY26 earnings conference call of Blue Chat Healthcare. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch tone phone. I now hand the conference over to Mr. Advaid Bhadekar. Thank you. And over to you sir.
Advait Bhadekar — Analyst
Thank you Viren Good evening and a warm welcome everyone to Q1FY26 earnings call of BlueJet Healthcare Limited. Please note the investor presentation and the financial results are available on the company website and the profit screen. Also, anything said on this call which reflects our outlook for the future or which could be construed as a forward looking statement must be reviewed in conjunction with the risks that the company faces. The conference call is being recorded and the transcript along with the audio of the scene will be made available on the website of the company as well as on the exchange.
Please also note that the audio of the conference call is the copyright material of Blue Debt Healthcare Ltd. And cannot be copied, rebroadcasted or attributed in press or media without specific and written consent of the company from the management. We have with us Mr. Shiven Arora, Managing Director, Mr. Lee K. Singh, Chief Operating Officer, Mr. Ganesh Karipanan, Chief Financial Officer and Mr. Sanjay Sinath, Deputy Chief Financial Officer. Now I would request Mr. Shivan Arora, Managing Director of Bluejet Healthcare Ltd. To provide you with the updates for the quarter ended 30 June 2025. Thank you. And over to you sir.
Shiven Akshay Arora — Managing Director
Thank you ever. Good evening everyone. Thank you for joining us today. I’m pleased to share that we started FY26 on a solid note. Our Q1 results reflect sustained momentum from the second half of last year despite the expected expected normalization of some operating parameters. Importantly, this quarter reaffirms the resilience of our business model and the strength of our customer relationships. Financial Performance Overview Revenue from operations of Q1 stood at 3548 million, up 4% sequentially and 118% year on year driven by consistent volume growth across our PIAPI and Contrast media platforms. EBITDA came in at 1,210 million, translating to a margin of 34% lower quarter on quarter due to phasing of production, inventory normalization and product mix.
Pat for the quarter was 912 million rupees with a net margin of 25.7% on a year. On year basis, EBITDA and PAT grew by 178 and 114% respectively. On a strong base volume expansion and enhanced operational scale, we continue to generate healthy operating cash flows with disciplined capital deployment across R and D and capacity expansion. Business segment Commentary, Pharma Intermediates and API this segment maintains robust momentum with the cardiovascular intermediate continuing to scale under long term contracts. We are seeing strong customer demand visibility and expect additional launches in H2. In contrast media commercial volumes from new molecules launched in Q4 FY25 have now stabilized.
We expect sequential growth in H2 as client offtake ramps up. High intensity sweeteners volumes remain steady. ASPs are stabilizing. After a soft FY25, our value added variance strategy remains intact. In terms of operational and strategic highlights, we completed phase two expansion in unit two which is now for the operation. Progress continues at unit three Mahad where the construction is on schedule for H2FY26 commissioning. This plant is being designed for continuous processing. In terms of the RD Center, 400 million rupees committed towards capabilities in amino acid derivatives and wasted intermediates is under motion. Our employee cost and utility overheads remain well controlled with cost of goods sold optimizing.
In terms of outlook, we remain confident in our outlook for FY26. Demand visibility across key customers is healthy. Capacity is now in place and product pipelines are expanding. In particular, we see structural tailwinds from de risking of supply chains by global innovators, increasing adoption of complex APIs and NCE intermediates, growing traction. In contrast media, especially with new molecules under validation, we expect the business to maintain strong growth and margin trajectory through FY26 and we remain focused on disciplined execution, innovation led partnerships and long term value creation. With that, I’ll now invite our CEO Mr. VK Singh to walk you through the operational update.
Thank you.
VK Singh — Chief Operating Officer
Hi, Good evening everyone. I’ll start by a few notes in the capacity. The new CDMO capacity catering to the PI and CMI segment at unit 2Ambarnath is now fully on stream. The advanced intermediate to the contrast media and CE that we had indicated will be launched from this capacity is now commercial revenues from this molecule can be cited in the quarter that’s gone by. This new block now has a consistent production schedule due to high order visibility. The cardiovascular intermediate that we talked with Innovator has seen a huge uptick as compared to quarter one FY25 and has shown consistent growth over the last several quarters as the N molecule is doing well in US, Europe and row markets.
Currently we are at 60% capacity utilization and we believe we have the capability to capture any further uptick in demand should that happen in the near future. At Unit 3 Mahat, we were creating capacity for backward integration for the CMI segment. This is a highly engineered plant based on full synthesis will be the first that we will have for making the KSM for our CMI product. Work is in progress in full swing and as indicated this site should be ready for validations and will go on stream in second half of FY26. With this plant going on stream, we will strengthen our position as a credible and leading supplier of CMI to all the leading innovator companies in this segment.
We further demonstrate a resolve to retain a leadership position in the CMI segment. With this backward integration we not only achieve strategic independence but also insulate the business further from significant volatility of the key raw material pricing. As a country we are experiencing significant tailwinds for the CDMO business. There has been a huge surge in RFPs. While our focus has historically been on the chronic segment, we had been building capacity to supply building blocks and peptide fragments to innovators and Also the global CDMOs engaged in this field. Given the interest that we are seeing in this segment, we are advancing with a plan to build a multipurpose plant at Mahat and a state of the art R and D center at Hyderabad.
The GMP compliant approximately 30 reactor plant will be a versatile plant with capability to supply from a few kilos to multi tons to our CDMO clients in any geography. At Mahat, both in the block meant for vertical integration and the multipurpose block we believe which will go on Stream in H2FY27 a high level of automation is being built to ensure batch to batch consistency, optimal yields and risk proof operations. As a consequence of this high level of versatility and automation that is being built into the unit 3 Mahad, we envisage that the earlier planned capex of 250 crores for unit 3 shall increase to about 300 crores.
Of this about 100 crores has already been incurred and the balance to 100 crores have been incurred up to FY27. The state of the art R and D center being built at a cost of about 40 crores shall focus on the newer chemistry platforms like peptide intermediates for GLP1s by catalysts with a focus on immobilized catalysts and work to augment and strengthen the innovator oriented pipeline of the company. With a focus on chronic diseases. Today at R and D we are tracking about 20 new opportunities with high client interest and visibility. About 30% of these, which is approximately 6 are in late phase three or commercial phase.
As a company we are committed to carbon sequestration. We are conscious about the environment and our carbon footprint is consistently reducing. The contribute about 70% of our overall energy consumption from wind and solar. Now I come to the most interesting part of this readout. Our future expansion plans. In the last four years we have quadrupled our manufacturing capacity in the next two to three years. Maintaining the same growth momentum. We plan to add another 1,000kg capacity to keep in step with our aspirations, to keep in step with our medium term goals and to keep in step with the business commitments which have been backed by client lock ins.
To achieve this we plan to acquire a large land parcel. There we will lay the foundation of a globally competitive and world class cdmo. This land will be developed in three phases. In phase one we plan four blocks. Two dedicated to contrast media, one for high intensity sweetener where we plan to manufacture another sweetener from a successive generation to what we already have for some of our existing clients and the fourth will be a multipurpose block. With this I hand it over to Ganesh to take you through the financials.
Ganesh Karuppannan — Chief Financial Officer
Thank you Vicky. Good evening everyone. I’ll walk you through our key financial and operational highlights for Q1FY26. While Shivan talked about the quarterly performance, I repeat we sustained top line momentum in Q1 with broad based contribution across all three product categories. Revenue from operations stood at 3.54 billion rupees up 4.5% sequentially and 118% year over year. EBITDA for the quarter was at 1.2 billion rupees or 34.1% of the sale which is 7% sequentially declining yet a 173% increase over Q1. Last year profit after tax stood at 912 million with a profit PAT margin of 25.7 down from Q4 but up by 148% year over year.
On a full year basis, Q1 FY26 compared favorably with Q1 FY25 across revenue, EBITDA and PAT reflecting sustained operating leverage and commercial traction. We will explain the variance more of sequential quarter with current quarter which could be more relevant. I just move on to the gross margin. The gross margin for the quarter was 48.5% down by 6.5% from 55% in Q4. I will explain the movement if you notice in the P and L there is a reduction in the finished goods and wipes to the tune of 750 million in Q1 as against an increase of 100 million in Q4.25.
This means a 750 million drawdown in finished goods and WIP inventory versus 110 million built up in Q4 as overheads are absorbed in inventory valuation. This decline in inventory releases more overheads into the P and L compressing the margin. Of the 6.5% reduction in gross margin, roughly more than 4.4% is attributable to this inventory adjustment and 2.1% to the product mix specifically on account of higher contribution by PIAPI segments and lower contribution by other segment. If you were to take a cumulative number of Q4 and Q1 you would end up with a 53% gross margin which explains this 4.5% decline is nearly on account of release of inventory.
In this quarter there were no major changes in key raw material prices and our procurement cost remains well managed. Moving on to certain other PNDL considerations, a 27 million GST demand impacted EBITDA by approximately 0.7% during the quarter which is a one time effect. Similarly, forex gain were lower due to US dollar appreciation in Q1 depreciation in Q1 leading to a muted forex gain in Q1. Moving on to segmented performance, PI and API grew by 8.2% quarter on quarter and we were able to sustain the momentum. Artificial sweetener grew 17.4% quarter over quarter reflecting a recovery from muted historical performance.
Contrast Media saw a 3.9% quarter over quarter dip mainly due to phasing. However, the outlook is positive with commercialization of new alternated intermediate and supplies of gadolinium based products which are planned in this quarter. From a balance sheet perspective, we hold 2.7 billion in cash and treasury instrument and we continue to generate positive operating cash flows aligned with internal expectations. In terms of capex, during Q1 we approximately incurred an expenditure of 280 million. Our guidance for FY25 remained unchanged. We remain confident of achieving our FY26 goals through consistent cost discipline, capacity utilization and pipeline progression.
With this I hand over back to the for the Q and A session. So moderator, you can line up the question.
VK Singh — Chief Operating Officer
Hello.
Ganesh Karuppannan — Chief Financial Officer
Hello.
VK Singh — Chief Operating Officer
Otherwise I will respond right Even at least the moderator will respond.
Ganesh Karuppannan — Chief Financial Officer
Hello.
Advait Bhadekar — Analyst
Please be patient. There are some technical glitches we are solving for. Please be patient for a minute.
Ganesh Karuppannan — Chief Financial Officer
There is some technical glitch with the moderator. Please hold on for few minutes.
operator
Hello?
Advait Bhadekar — Analyst
Hello?
operator
Yeah, Am I audible now?
Advait Bhadekar — Analyst
Yeah.
operator
Yes, sorry for the inconvenience, sir.
Ganesh Karuppannan — Chief Financial Officer
You can line up the questions.
Questions and Answers:
operator
Yes, thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and do. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have a first question from the line of Kunal Dharmesha from my choir. Please go ahead.
Kunal Dhamesha
Can you hear me?
Ganesh Karuppannan
Yeah, we are able to hear you.
Kunal Dhamesha
Yeah, yeah, yeah, yeah. Good evening and thank you for the opportunity and congratulations on great top line momentum. I have question on gross margin. I think the clarification was good. But let’s say from here on how should we think about, you know, the run rate? Maybe on an annual basis, what’s the range that we should look at? Is it 50% kind of run rate that we should look at adjusting for this 4.5% one off. And secondly, let’s say once the iodine ADA HCl kind of grows, how that 53% could move. Any clarity on that could be helpful.
And then yeah, I have more questions.
Ganesh Karuppannan
See if I look at this change in the finished goods, we are actually back to the 53 levels. So like this is just a issue which is relevant only for this on a regular basis. We don’t see any change in the gross margin with this current product. So we have couple of new launches that are slated for Q2, Q3 and could actually come back. Or if there is any changes in when the ziodinated new product comes in, you can actually see the change in the numbers.
Kunal Dhamesha
So should we expect it to improve the levels, current levels or how should we think about it?
Ganesh Karuppannan
We don’t give guidance on the future. So based on the current portfolio mix it’s going to be 53 and we will be in a position to sustain similar levels in the coming quarter.
Kunal Dhamesha
Okay, and this 53 you mentioned is the 53 days of finished good inventory?
Ganesh Karuppannan
No, no, no. This is 53% of gross margin, 53% of gross market.
Kunal Dhamesha
But let’s say finished good inventory. Now where would we. And then is it in line with our expectations?
Ganesh Karuppannan
So in terms of inventory days there is no significant change. It came down by 131 days. That is working capital to total turnover. We should be around similar range way forward.
Kunal Dhamesha
Sure. And then you know, second one on the Iodinated intermediate. So we are saying that the block is ready, capacity is ready and it would get commissioned or will start applying in Q2. It’s the way to understand.
Shiven Akshay Arora
Yes, yes, that is a. That is the right assumption.
Kunal Dhamesha
Sure. And what’s the capacity in terms of let’s say reactor capacity or let’s say tons? If you could share and how do we expect the ramp up to be? Will it be like a gradual ramp up or steady?
Shiven Akshay Arora
In terms of what I can share right now, the net realization per kilogram improves significantly with this launch. I won’t be able to the volume or fuel capacity. But from a criticality standpoint and our growth journey, this is a. This is a fairly good need to move on.
Kunal Dhamesha
Sure. And then one on the pharmaceutical intermediate. I. I believe that we had suggested that 120kl capacity. What we had put for the. For the cardiovascular intermediate. Is that number correct?
VK Singh
I just wanted to ask if the moderator is online.
operator
Yes, sir.
VK Singh
All right. Okay. Yeah, that’s.
Shiven Akshay Arora
That’s the. That’s the right decision. 120k is. Is what we’ve indicated. That’s the right number. Please. Thank you.
Advait Bhadekar
Yeah.
Kunal Dhamesha
I have more question. I joined by the team.
Advait Bhadekar
Yeah.
Kunal Dhamesha
Thank you. Thank you for respons.
operator
Thank you. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants in the conference, please limit your questions to one or two questions per participant. Do you have any follow up question? We request you to rejoin the queue. The next question is from the line of Meet Katrodhya from Nivesha. Please go ahead.
Meet Katrodiya
Yes, sir. Thank you so much for the opportunity. So sir, I want to understand little deeper in terms of gross margin. So like Gross margin fell 6.5% this quarter and.4% impact due to changes in inventory. Means we sold much of the higher cost inventory we have in last quarter. Right. So could you break down how much of the gross margin drop came from under a job fix overhead or pricing change? Or is it like one off inventory adjustment? Basically I want the breakup of 4.4 percentage.
Ganesh Karuppannan
See, whenever you have a change in finished goods, whatever which gets inventorized gets released to the P L. For example, if you draw from your finished goods, whatever overhead that has been inventorized gets released to the P and L. So there is, there is no breakup for 4.4. It is totally the overhead. What got. Inventorized in the last quarter. Because this time our closing finished goods is much lower compared to the previous quarter. So technically means we have actually sold the finished goods of last quarter. And this quarter and any associated overheads relating to those stock get released. The pl, that’s the way you have to look at it.
Meet Katrodiya
Okay, so the figure 4.4% in changing inventory contains all the overalls. Right. There is nothing raw material cost or maybe understanding is right.
Ganesh Karuppannan
You are right. Yeah. I’ll just add here.
Meet Katrodiya
Yes sir.
Ganesh Karuppannan
Whenever inventory gets reduced your COX goes up in so this is exactly how exact. If you see the last four column of the PML each year COX has. Reduced but because of this change in. Inventory the cost has gone up. The simple language. When inventory goes down your COX goes up and it affects your loss contribution I think.
Meet Katrodiya
Okay, understood. Understood. Thank you sir. Yeah. Next, Next. Next one is on pharma intermediate side. What kind of feasibility do we have from innovator like the as the product expand into new geography and settlement with Genvic and a filer is giving good long term. So are you seeing increased demand? We need our PI segment to grow from this quarterly hundred of 200 crore or do we anticipate growth to taper off due to rising competition?
VK Singh
You know once again we would retrade that. We don’t really give a guidance like this. But then you should not assume a quarterly run rate. Right? Perhaps you have to look at a larger, you know time segment in the CDMO business quarter is not a very good indication. That’s number one. Number two, as far as the end molecule is concerned the growth numbers are very encouraging.
Meet Katrodiya
Yes.
VK Singh
And there is a very interesting life cycle management also happening at Experion where they are coming out with newer products in combination with this bempedoic acid. So I guess overall the tidings in the market are excellent for the molecule. We don’t see any issue at all. We are poised for good growth.
Meet Katrodiya
Got it sir. In Conduct Media specifically.
operator
Sorry to interrupt. May I request you to rejoin the queue as there are several participants waiting in the queue.
Meet Katrodiya
Yes sir. Thank you so much.
Shiven Akshay Arora
Thank you.
operator
The next question is from the line of Piyush Kumar from Magnus Investment. Please go ahead.
Piyush kumar
Am I audible?
Ganesh Karuppannan
Yeah.
Piyush kumar
Sir, my question is regarding the entire three segments of your business. So which is the most bullish segment that you are on? Which is the which segment is getting the most calls from clients and the entire industry. So what do you think about that?
VK Singh
So you know for us Contrast Media is our flagship vertical and the mainstay of the business. We are very predominantly Contrast Media focused company. On the other side the PI business you have seen has gained gained great traction there. The addressable market is much Larger, Much, much larger. Right. Much bigger than contrast media. So because of the China plus one tailwinds or whatever you say, there’s a lot of, you know, RFPs that we are getting over there. And then we have been, you know, so well positioned in the sweetener business and we have with almost all clients in the fmcg, the new generation or the next generation sweetener or the new sweetener that we will add will give a filip to whatever turnover we are doing.
The sweetener business overall, I would say that today all three product verticals are poised for a healthy growth.
Piyush kumar
And my last question is how should one look at your business? Should we look at the QOQ or just. Yes, so that’s sufficient.
VK Singh
See, if you look at our performance for the last several quarters, you would see that we have been very consistent quarter on quarter. But then for any B2B business, particularly a CTMO business, a quarter may not be a very good indication. Right. So I mean if you. There are businesses where, if you will slice and dice, you will see a lot of consistency in daily sales. But this is not that type of business. That’s all that I would say at this point of time.
Piyush kumar
Thank you sir. All the best.
operator
Thank you. The next question is from the line of Shashank Krishnakumar from MK Global. Please go ahead.
Shashank Krishnakumar
Hi. Thanks for taking my question. I think we did attribute to phasing of production this quarter. Just wanted to check if Production levels in 1Q are meaningfully lower. There’s also in connection with the gross. Margins given that we have very strong order book visibility. So just wanted to understand that.
Ganesh Karuppannan
It’S actually. Maybe it’s a wrong wording I had used. It’s not phasing out of inventory. It’s basically like reduction in inventory. I think that’s the way you have to look at it.
Shashank Krishnakumar
Production or utilization levels were not lower on a QOQ basis. Right. Just wanted to understand that.
Ganesh Karuppannan
No, the productions are based on customer orders. So we have very sustained production. So this is something. So the inventory produced in the last quarter got sold in this quarter.
Shashank Krishnakumar
Got it. Thank you, that’s helpful. My second question was on the new launches that you pointed to in 2Q and 3Q. So does that include the alternated intermediate. And any other launch from other business segments? Just want to understand which were the. Two new products that you are alluding to.
Shiven Akshay Arora
In contrast, media itself from the edge, from H2 perspective, there’s this alternated AVHCL that we spoke about and there is the backward integration that we are doing so these are the two material launches. However, there are few other intermediates that we supply to newer contrast agents. These are newer applications with some innovators. These are all lab quantities but have a promising future. So this is more about contrast media, about pharma intermediates,
VK Singh
Pharma intermediates. Also, you know, there are new opportunities that we are tracking as I mentioned that some of them are in phase three and I mean late phase and a couple of them are already commercial. So I think there are interesting opportunities there also.
Shashank Krishnakumar
Got it sir. Thank you. Thank you and all the best.
operator
Thank you. The next question is from the line of Arpit Tapadia from IG Family office. Please go ahead.
Arpit Tapadia
Hello, I’m audible. Yes. So my first question is regarding the land that we have returned to the Hayd authorities and got our refund back. Any particular reason in behind?
VK Singh
Actually our application had been for a much, much larger parcel. But today in the red category, Gujarat does not have too much of land. So we got about eight acres. We took that, but then we felt that that was subscale because we had now we have spotted in the process of, you know, finalizing a much, much larger. Therefore it was logical for us to surrender this in view of the much larger parcel of land that we would be acquiring very shortly. And we will make an announcement about that which is in step with the aspiration that a company has.
Arpit Tapadia
Got it. My second question is in line with the previous part the of spent only. Since we have lowered down our inventory into this quarter and our sales at overall level is more than the previous quarter, then we must have ramped down our production level into this quarter.
Ganesh Karuppannan
Yeah. Our closing inventory of finished goods is lower compared to previous quarter. And we have the production plan in place for Q2 and Q3 which will actually get back to the original levels.
Advait Bhadekar
Got it. So what is our sustainable level of inventory that you want to maintain?
Ganesh Karuppannan
It’s more than sustainable level. It’s more to do with customer order and because we make based on customer order. So it is dependent on that.
Advait Bhadekar
Okay, I’ll fall back into the Q4 of the question.
operator
Thank you. The next question is from the line of Aman Soni from Invest Analytics Advisory LLP. Please go ahead. Hello Mr. Aman.
Aman Soni
My question is always the answer.
operator
The next question is from the line of Mr. Ayush Agarwal from MAPL Value Investing Fund. Please go ahead.
Ayush Agarwal
Hi sir, I hope I’m audible. This is a question for you on the inventory. I’m sorry for harking on it again but I Don’t believe that we record finished goods on the selling price, we record finished goods on the, you know, lower of cost. Basically I’m reading your annual report note which has accounting policy and finished goods and it’s clearly mentioned that we value at lower of cost and nrv. So the overhead that we are talking which have been brought from last quarter to this quarter does not really make a lot of sense to me.
So if you can help us understand, and even if I look at our past quarter cost of raw material, they have never actually crossed 46, 47%. And while I understand that Pharma intermediate has scaled up in the last 34 quarters, when it scaled up in December 24, then also our cost of raw material was just 45% which was the same in March 25 number as well. So if you can really help us understand like what happened to our gross margins this quarter, it would be helpful.
Ganesh Karuppannan
List goods is never valued on sale price. Okay. It is basically raw material. Thus associated overheads. Any direct overheads gets allocated. This is the accounting principle every company follows in valuing the finished product goods. Okay. So you can easily understand what is the raw material cost and what is the direct overheads which gets allocated. So in a quarter where you have a larger finished goods you would have actually like inventorized certain overheads, the direct overheads. And if you maintain similar inventory levels quarter on quarter, you don’t see that impact. In the PL in our case between Q4 and Q1, the finished goods inventory came down in Q1 to the tune of 75 crore which is basically the raw material cost plus direct overheads allocated.
Okay, so if you just see what is the overheads which got allocated, the difference in overheads between Q4 and Q4, Q1 of this current quarter, the impact is close to 4.4%.
Ayush Agarwal
That comes to around 1718 crores. Do you mean that we did not recognize that cost last quarter and our numbers were higher by that last quarter?
Ganesh Karuppannan
Yeah, if you actually like, if you want to understand more clearly, if you just take the Q4 and Q1 of this the calendar six months, you would get a gross margin of 53%.
Ayush Agarwal
Understood. Second question sir is on the CapEx which our CEO sir mentioned that you know we want to add 1000 capacity in the next two to three years and we start with phase one of four blocks, two of them for CMI, one for high intensity sweetener and one MMT block. Given the growth happening in the Pharma intermediate molecule and given what our customer is preparing for in the future. Why no capex towards this as well? I understand we are at 60% but you know, why no capex towards Pharma Intermediate in the next phase of expansion?
VK Singh
I think maybe, you know, the voice drained off and maybe you were not able to hear. Pharma Intermediates is becoming an important part of the entire scheme of the company. There is one block that will come up in Mahad which we very clearly mentioned, that’s like a multipurpose block will be catering to this segment. And even for our new big land parcel that we spoke about our expansion plan for the future there also we mentioned that there’s going to be a multipurpose block which will be catering to this third product vertical. So I think we are building up good capacity in anticipation of the RFPs that we have.
Shiven Akshay Arora
I think just to add on to that as a company DNA, when we have a customer lock in and a contract visibility, that’s what when we initiate a thought process of adding a particular block and that’s how you see in Contrast Media also we believe that two additional blocks should be added due to certain discussions with the customers and the innovators.
Ayush Agarwal
Just to follow up on this, given that we are already doing backup integration into APB4 or contrasting via intermediate and we are putting up two more blocks for Contrast India. So what should be the roadmap for Contrast India from here?
Shiven Akshay Arora
The end formulation market is definitely growing. And from $6.7 billion in terms of end formulation, it’s projected to become 10 billion in the next few years. So in anticipation of this growth, we have a strong push from our customers also to add capacities to take care of these growing demands.
Ayush Agarwal
Are we going to API?
operator
Mr. Ayesh, I’m sorry to interrupt. May I request you to rejoin the queue? The next question is from the line of Bansi Desai. Please go ahead.
Bansi desai
Hi. Thanks for taking my question. My question is again on Contrast Media. So if I just look at this business for us for the last two to three years, you know, we’ve been in that range or in fact, you know, looking at this quarter’s number at 97 crores, we are much below our quarterly run rate that we’ve seen in this business even two years back. So from a 500 crore business in fiscal 23, we came down to 480 crores. In fiscal 24, we came down to 400 crores in fiscal 25, probably because of customers, you know, changes in the facility, etc.
But starting this year we are again at 97 crores. So if you can just help us understand, you know, probably two years back you would have thought that end market is growing at mid to high single digit bluejet launching, you know, more molecules. You know, you should have, you know grown probably at mid single zero or higher than that. And from there to here we are still probably at this, you know, run rate of 97 crores. So are we going to see a step up again in this business, you know, from the new launches that you are guiding.
And if one has to look at two to three year view, maybe you know, quarterly is not the right way to look at the numbers. I understand that. But if I have to take two to three year view, how should one think about growth for contrast media?
Ganesh Karuppannan
Bansi, There are three levers. One is the largest customer, the forecast, whatever they have indicated to us, the iodinated product and the intermediate for the gadolinium molecule. Now if you look at all the three together there is a good probability we should actually get back to the 23 levels. I think that is our aspiration. So that’s what we are working on. So this would actually become a new base for us. If we could actually reach the 23 level in then we can actually build on. You will obviously have the growth on the iodinated molecules. You will actually see the full year impact in FY27 and the NCE molecule also would grow in 2728.
And in the meantime we do expect certain new opportunities which we are actually planning from FY28 29. What VK and Shivin alluded to in terms of additional capacities for contrast media.
Bansi desai
And how is the capacity utilization for contrast media particularly you mentioned 60% at an overall level is it any different for contrast media?
VK Singh
What I mentioned was for the PI segment, that particular block that we had created just to give a sense that should there be an increase in demand, we are well poised to capture that. Overall I think at a company level maybe 75%.
Bansi desai
Okay. And second question just on PI.
operator
I’m sorry to interrupt Ms. Bansi. I would request you to please rejoin the queue. The next question is from the line of Ravi Purohit from securities Innovation Management Private Limited. Please go ahead.
Ravi Purohit
Yeah, hi. Thanks for taking my question sir. I’ve been kind of, you know, reading our environment clearance report for the new MAHAD unit. Right. And in that you know, we have provided a list of products where we are adding capacities and one of them is also API for bentadoic acid. Right. So I think so far we’ve been doing only the intermediate so in benchlodoic acid. Are we looking to add API facility API capacity as well? And similarly in contrast media we are putting up two new blocks in the new large capacity that we are planning to set up over the next two to three years.
Now there also historically we’ve been. Are we kind of looking to add larger API capacities in many of these where the value of the end product of course could be significantly larger than what we’ve been getting in the intermediate. So if you could just share some thoughts and some color on where we are headed on either of these, both PI as well as the contrast media on the journey from intermediate to whether we will or will not be doing APIs.
VK Singh
So if you would see our performance over the last couple of years, three, four, five years, you will see that our per KL realizations have gone up significantly and very consecutively and our per kg realizations have also gone up from building blocks to intermediates, advanced intermediates. Now both in our contrast media and PI, what we supply to our clients are very advanced intermediates which are just one or two steps short of the final API. The final API could be a logical extension but as you know and Shivane also mentioned what the DNA of the company is, we always do it with a specific client lock in and client interest.
So it has to come from one of our existing clients. We don’t wish to participate in the generic space as far as your reading of our environmental clearance is concerned. While the advanced intermediate that we make for Bempedoic is just two steps away from the final API. But then many a times we give a laundry list of products because going back to the EC for amendments of the product list is not very convenient nor efficient.
Ravi Purohit
Okay, got it. Thanks a lot sir. Most of my other questions have been answered. I’ll get back to you.
operator
Thank you. The next question is from the line of Jayakta Rajkumar from Korman Capital. Please go ahead.
Jaiprakash Kumhar
My question is answered. Thank you.
operator
Thank you. The next question is from the line of Ajay from Nivesha. Please go ahead.
Ajay
Thank you for the opportunity. My question is on contrast media. So as mentioned by the previous participants that the speed of growth has been slow but we also believe the big scale can be achieved in this business with forward integration. So sequentially how what are your expectations with this segment going ahead? Do we plan to move forward integrate?
VK Singh
So there’s a clear roadmap for that and. But as we mentioned that we always do it for the customers on a CDMO model. We don’t participate in the generic space. So I think give us, I mean over as it pans out, you know, we’ll keep you updated. At this point of time, we cannot make, we cannot comment any more than what we have.
Ajay
And last question again, this is on the inventory you mentioned that there were under absorbed overhead. And this is typically due to the lower production which we also expect going forward to pick up, which will eventually result in sales, sales in coming quarters, which will result in better absorption of fixed cost. So my question is, in case this doesn’t happen, what are the steps being taken to absorb or manage these overheads going forward? And if you can also highlight the gross margins, what we should look at, that would be helpful.
Ganesh Karuppannan
It is not under absorption of overheads. It is the overhead inventorized in the previous quarter getting released to P and L in this quarter. Okay, so it is, it is not that under absorption is completely a different topic. So this is nothing to do with under absorption.
Ajay
But in the press release it has been mentioned the same.
Ganesh Karuppannan
Okay, I’ll just check on that.
Ajay
Okay.
Ganesh Karuppannan
And because this may be like for you to simplify, if you just take the PNDL of Q4 25 and Q1 26 P&L and merge it, you can actually understand the net impact. And you would actually, actually see it is our gross margin is intact at 53%.
Ajay
If I even back calculate the number comes down to 51.6 percentage. So I’m not able to clearly understand, I mean a press release also it has been mentioned clearly that it’s driven by shift in product mix, reduce inventory load and resulting in lower overhead absorption.
Ganesh Karuppannan
Okay, we will take it offline. I will actually explain the complete calculation on this.
Ajay
And also sir, last question. Sir, you we have plans of fundraise. So if you can give details on what are the plans going forward for the same.
Ganesh Karuppannan
Still in the drawing room stage. We are yet to finalize anything. As and when we conclude on this, we will actually communicate. Right now we have just taken a shareholder resolution and we are still evaluating the options.
Ajay
Okay, sir, thank you.
operator
Thank you. The next question is from the line of Bansi Desai from JP Morgan. Please go ahead.
Bansi desai
Hi, thanks again for the opportunity. Just on the PI API for the cardiovascular product, it appears that the realizations have remained pretty stable. Is that true?
Ganesh Karuppannan
Yeah.
Bansi desai
And therefore, if the realizations say for instance were to remain stable and if we were to see increase uptake in quantity, should we assume this kind of run rate to continue.
Ganesh Karuppannan
With the current cost structure, Our margins are intact.
Bansi desai
Sir, I was talking about the revenue for the ciapi.
VK Singh
Yeah, I mean as you know Bansi, the molecule is doing extremely well. And I think what we have done at an annual level that we should be able to maintain with some growth in that.
Bansi desai
Okay, perfect.
Advait Bhadekar
Thank you so much.
operator
Thank you. The next question is from the line of Abhishek Sharma from D and H Sachin Electrodes Private limited. Please go ahead.
Abhishek Sharma
Hello. Good evening, sir. Well, is there any cyclical pattern in the company’s revenue organization Just like that in the first half of the financial year typically contributes a lower portions of annual revenue compared to the second half.
Ganesh Karuppannan
We don’t have any seasonality in our industry. It’s all more to do with customer orders. Something you want to add on. Basically this is all related to we’re into MTM orders mid to order. So as and when order is there, we manufacture. So there is no cyclical, it’s not a corporation company.
Abhishek Sharma
Okay, thank you.
Shiven Akshay Arora
Thank you.
Abhishek Sharma
Thank you.
operator
Thank you. The next question is from the line of Vidit Shah from Spark Capital. Please go ahead.
Vidit Shah
Hi. Thanks for taking my question. So two questions I had, sir. One was while I understand that inventory has hit the PNL, I would assume that Revenue 2 would be booked in the same quarter. So I’m still confused around why margins have taken such a sharp decline unless there were one off overheads which have been recognized in the quarter. But happy to take that offline if you may. But my second question was on why. Why are we seeing reduced levels of inventory? Why are we consciously reducing levels of inventory in Q1?
Ganesh Karuppannan
Basically I mean in simple word it says the movement of Cox that is not going to those. So if you see the whenever the inventory goes down, Cox goes up. And it’s simple accounts. So that is the impact. So inventory has.
Vidit Shah
But the revenue would also go up in the same way. Right. So margins may not be impacted.
Ganesh Karuppannan
Yes, but the revenue has also gone up. But the stock was lying in the last quarter. It got displaced this quarter.
Vidit Shah
Okay.
Ganesh Karuppannan
So the movement, you can see the movement is the impact of cost. And of course overall is there but this movement of cost basically. So just compare just minus raw material cost which is a cost margin and remove the box still the margin is around 52%.
Vidit Shah
Okay, maybe you can take that offline. But if you could just help me understand why levels of inventory decreasing is that a conscious effort or is there is this, you know a planned maintenance sort of.
Ganesh Karuppannan
Customers dispatch schedule. So each customer has their, their dispatch schedule. So it is more to do with their logistics planning.
Vidit Shah
Okay. So would that be fair to assume then that Q2 the dispatches may not be as much as Q1. Is that how to look at it?
Ganesh Karuppannan
Not exactly. So this is because we have our production schedule for Q2 Q3. So whatever happened in Q1 should not have impact on the production of Q2.
Vidit Shah
Okay, those are my two questions. Thanks for all of us. Thank you.
operator
Thank you. The next question is from the line of Kunal Tanisha from McGuire. Please go ahead.
Kunal Dhamesha
I thank you for the follow up question. My question is primarily on the peptide. Segment. If you could help us understand the capabilities that we have, what are our aspirations there and then what is the capacity that we are planning and where it would be capex required. So that would be great.
VK Singh
See on the peptide segment we are working on peptide fragments at the R and D stage. We are working on some peptides. But then what is more advanced and what we are discussing with certain innovator companies are the intermediates to the end peptides. Some of them being the GLP1 products where we are in conversation with certain innovator companies for the intermediate. So basically we are working on the amino acid derivatives and peptide fragments. Till the time we build our multipurpose plant in Mahat. The smaller requirements that will be there in this segment will be catered to from the multiple purpose plant in unit two.
When the Mahat capacity comes in, that will be. That will address this business segment and demand. And as I mentioned that in the larger scale of things, when we have this much, much larger land parcel and capacity that we plan to create in the next couple of years there will be capacity for this segment there also it will all be in step with the client lock in and visibility of business that we have.
Kunal Dhamesha
So when we say this fragments, would it be more like dipeptide, tripeptide or octamer decamer? What are we trying to kind of achieve here and then in terms of the technology that we would be adopting, whether it’s chemical synthesis and on a large scale basis, will it continue or we are also looking at the other type of technology available there.
VK Singh
See as I mentioned that we are doing amino acid derivatives. We will not be making the amino acids which are on fermentation based technology. As we speak. We have developed already about 45 peptide fragments. We are not in the library or catalog type of business where we put 300 or 400. There’s a big opportunity over there. But that’s not what we are focusing. We are working on those where there is high conviction and client visibility. We are since I mentioned peptide fragments and we are not really talking about tripeptides, tetrapeptides or the deca peptide we have.
In the new R and D center that we are creating, we will have one lab which will be doing peptide synthesis. But then the high conviction opportunities that we are tracking are more on the fragment side.
Kunal Dhamesha
Sure, maybe I’ll take it offline. I need to fill the small details around here. Thank you for.
operator
Thank you. The next question is from the line of Ravi Puruhit from securities Innovation Management Private Limited. Please go ahead.
Ravi Purohit
Yeah, my question also was similar to the previous participants questions to, you know, Mino asset chains and the fragments have not been easy to establish. So is it something that we are working on and kind of will eventually showcase to clients or. We have already already established certain processes and certain, you know, products for, for. On existing, you know, showcase to clients or. So where, where are we in that? Is it like something that we aspire to do or something that. Or certain products or certain change we’ve already established. And it’s only a matter of, you know, talking to the client, showing to them what we are capable of and have a capacity to basically manufacture.
Because what we understand is the chain is not very easy to kind of have, produce and replicate.
VK Singh
So you need a specialized skill set for this, which we have. We have been working on this type of chemistry for the last two, two and a half years. We have a couple of scientists who are extremely good in this type of synthesis. As I mentioned that we are not in the catalog business as we speak. We are not venturing now. We already have about 45 products or 45 peptide fragments which are already ready. They, they can be commercialized almost immediately. And this preparation or this readiness that we have is based upon customer interest. So there’s no blue sky gazing in this.
Ravi Purohit
Okay, thank you so much and all the best.
VK Singh
Thank you.
operator
Thank you. The next question is from the line of Ankit Sahai from Fusion Capital. Please go ahead.
Ankit
Yeah, hi. My question is on the gross margin. So rather than taking it offline, it. Would be helpful as most of the participants have this question so you can get more clarify on this here itself.
Ganesh Karuppannan
What is your question on gross margin?
Ankit
Yeah, like you mentioned, the right to look at A consolidated of Q4FY25 and Q1FY26. Why to do that and why the revenue should be recorded in the Q4 itself. Right. And not in Q1.
Ganesh Karuppannan
No, no. Unless you make a sale, then only you can record us. You can recognize the revenue. Right. Otherwise you have to. And in our case, you have both finished goods and goods in France. Okay. Certain finished goods are recognized as sale only when it reaches the customer destination. So the finished goods has two parts. One is what we physically have it at site and the second one is in transit because certain incoterms allows us to recognize revenue only when it reaches the customer. So when you take both of this, you have this. This is, I would actually call it more as an aberration for this quarter. And this is something I would actually say this is more an accounting the way Sanjay put it across.
This is whenever you have, when the inventory gets released, this overhead absorption happens. I think had we maintained a similar finished goods level like last quarter, you would not have seen this impact.
Ankit
You got it? Got it. Yeah. So overhead from the last quarter is coming here because.
Ganesh Karuppannan
Yeah, you are right.
Ankit
Yeah. Okay, thank you.
operator
Thank you. The next question is from the line of circuit from Saggery Capital. Please go ahead.
Unidentified Participant
Hey, thanks for the opportunity. So am I audible?
Advait Bhadekar
Yeah,
Unidentified Participant
yeah. So. So we talked about, you know, a lot of traction as far as, you know, CDMO RFPs are concerned. So could you share details around, say how many projects we have currently across different phases, say in Q1 and how and what was the corresponding number, say last year? Just to get a sense of how has the product pipeline in the CDMO or especially in the pharma API intermediate space. So how has that trended over the last year or so?
VK Singh
So I think we all understand that this CDMO part where we are participating with our customers during the trading phase or regulatory phase or the commercial phase. It’s a slow burn today as we speak. And I mentioned in my narrative that we are sitting on about 20 RSPs. Six of them are in late stage phase three or commercial. Right. Last year I think the number was 11 or 12. I don’t remember exactly, but I think it was 11 or 12. So you do see consistent growth from last year to now and some products gaining traction, particularly in the chronic space.
And now in addition to that chronic space, since we are looking at peptide fragments, that’s a new opportunity that has opened up.
Unidentified Participant
Fantastic. So my next question would be, what is the typical asset turn for our pharma intermediate business? So at a GROSS, is it 1.1, 1.2, what time? What’s the asset turn
VK Singh
overall at a company level? Because, you know, our capacities are fungible. Let’s not go product category wise or business segment wise. But at a company level, I think we have clocked one of the best in the industry north of 4.
Unidentified Participant
So is it that net net block or gross block? That four we are talking about? What would be at netblock? I guess
Ganesh Karuppannan
net block. Yes.
Unidentified Participant
So at gross block if CFO sir can respond. So I’m just trying to understand, you know, when you put in the new CapEx, what kind of number should we expect on a graph level?
Ganesh Karuppannan
We have a pretty long term plan in terms of our CapEx. We will shortly come back with. A. Bigger Oakley which will take care of the future expansions. Our assessment over a period of if you take the next five years, our asset turn should be somewhere close to two and a half to three.
Unidentified Participant
Okay, thanks for the opportunity and best wishes to the team.
operator
Thank you. As there are no further questions from the participants, I now hand the conference over to management for closing comments.
Ganesh Karuppannan
Thank you very much for your participation and we will see you in the next investor call.
operator
Thank you very much on behalf of BlueJet Healthcare. That concludes this conference. Thank you for joining us and you may now disconnect your lines.