Dishman Carbogen Amcis Ltd (NSE: DCAL) Q4 2025 Earnings Call dated May. 22, 2025
Corporate Participants:
Stephan Fritschi — Chief Executive Officer
Harshil Dalal — Global Chief Financial Officer
Unidentified Speaker
Analysts:
Subrata Sarkar — Analyst
Anita Jani — Analyst
Smit Shah — Analyst
Satish Bhatt — Analyst
Vignesh Iyer — Analyst
Akshay Kothari — Analyst
Rishikesh Oza — Analyst
Sajal Kapoor — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Investor Conference Call for Dishman Carbogen Amcis Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Stephen Fritzy, CEO of Dishman Limited. Thank you, and over to you, sir.
Stephan Fritschi — Chief Executive Officer
Thank you so hello, everybody. This is Stefan speaking. I’m delighted to get the opportunity to talk to you and discuss any questions. I will start the meeting with a general business update and then hand over to, our Global Finance director. Generally spoken, I think we can be happy with the results we achieved over the last year. It’s also stellar results.
I don’t go into financial details at this point. I’ll leave it to my colleague. But what we can say also side that we have a strong interest from clients into commercial, in commercial products and we all achieved the target, that’s great. And we expect a similar continuation for the upcoming year, which has started first of April.
And the development pipeline is building up. So we are acquiring more-and-more projects and around the entire portfolio from early phase to late phase clinical phases and eventually to validation to get more commercial products. Last-time when I was here I was presented as being the next CEO and this happens in 1st of April 2025.
And I said that we want to improve the sales numbers and we are on the right track to do snow. We had also different meetings among them. I also mentioned the sales meeting we had in India with our substitute sales managers from to Bishman in India to get to know more about the capabilities, what we can sell, capabilities and services and this was a great success.
Not only that business came closer together, but more important also that our client base showed a lot — already a lot of interest in the additional services we can offer out of our Indian motor company. So we see some new RFPs and new products, which we expect to get also orders over the next weeks. Some more information about certain specific sites.
We already discussed — starting to discuss it during the last call. For example, our French facility,, we got in the meantime, have the certificate from the French authorities. This is a milestone in our history and specifically in our French subsidiary working on drug products because the certificate is the basis and the fundament and to successfully work on GMP products and GMP commercial production. And so there we expect also for the future an increased interest from the market.
This we already experienced. We got already orders in the light of being able to produce opportunity conditions. So we have got some development products, which end-up in commercial production over the next one or two years.
Just to mention that the entire French facility is now operational. We’ve got two lines, two filling lines, one is equipped with a to produce a solid form of high-quality compounds and the other line is a finish where we produce filled with high-high potent API solutions so this is now as I said fully qualified and operational and ready to go.
The other side where we can report back a success in terms of authority inspections, our Chinese site in Shanghai. We had back-in January an inspection from the Chinese FDA and in the meantime, we got the truck manufacturing license, which is again the basis for future GMP production, specifically for the Chinese market.
This is one of our focus is that we want to gain more projects out of China because the market is huge, promising and we are convinced to be successful on the Chinese Market to get more products from there. The auto science were operating quite successfully. We met the there is a voice in the background I just continue if you don’t hear me please notify it the other sides were working according to budget specifically the Netherlands where we are get college.
Operator
This is the operator. I would apologize for the background noise. Please stay online what I get this week. This is the operator yes, sir, please go-ahead.
Harshil Dalal — Global Chief Financial Officer
I hope everything works now. I ended a stop when I was talking about this much subsidiary where we handed cholesterol and derivatives in vitamin B and analox in derivatives. And we had a strong selling year. We overachieved the budget there as well. And with the cost base, we looked into the cost specifically into price, which is the most important start material, raw materials we work with and there we succeeded in negotiating new results in a lower-price, much lower-price where we expect them to a higher profitability the Dutch subsidiary.
Finally and last but not least, I would like to quickly talk about an important customer and out of Japan who is ready to co-invest and in investment of more than EUR25 million in capabilities and increasing capacity in Switzerland. We are working on a complex molecule, a truck linker. It’s a for AAC. The client is producing the ADC then for oncology purposes.
And we got the opportunity to develop the process and take it through the value chain from early-stage to late-stage and now we are ready for the validation actually we have already validated and the commercial production is picking-up now. And the forecast is that high that we agree with the clients to expand in our facilities. And this happens now over the next two years. We expect it to be operational in 2027 with the bigger reactors we have in Switzerland and new capabilities for drying the intermediates.
I think with this, we end the general update on the business and I hand over to. Thank you very much, Stefan. A very good afternoon, good evening to all of our participants. As far as the financial performance for the quarter, it was one of the — sorry for that. It was one of the best quarters for us and this is the third consecutive quarter where I have been saying this. So we just expect the performance to keep on improving from here on in the same manner as the last 3/4 have been. So from a revenue perspective, the income from operations grew by close to about 10%, 9.4% to be precise as compared to the Q4 of FY ’24. For the full-year, this translated into about 3.7% as far as the revenue growth is concerned. So from INR2,616 crores what we did in financial year ’24, we now stand at INR2,711 crores. The cost-of-goods-sold as well as the other expenses, we had to keep — we were successful in keeping it under control in the last quarter as well as for the full-year of financial year ’25. This was because of the strong focus on the cost-control measures that we had put in for the organization as a whole and that translated into a strong EBITDA growth for us in financial year ’25. And the EBITDA per sale stood at about INR472 crores for financial year ’25 as compared to the reported INR296 crores, though the adjusted EBITDA for financial year ’24 because of the exceptional losses in France stood at in excess of about INR400 crores. The EBITDA for the quarter stood at about INR153 crores as compared to the reported INR63.4 crores in Q4 of financial year ’24. This translated into an EBITDA margin of 17.4% for the full financial year ’25. And this is really — I mean as far as the absolute number is concerned that fall exceeded our expectations for financial year ’25, but this was thanks to all of the measures that have been put in and mainly on the cost-control parameters. For the quarter ended March 31, ’25, the EBITDA margin stood at 21.4% and this is very much in-line with what we would want to achieve for the full-year in the next financial year. We are as far as the Group performance is concerned. The depreciation and amortization stood at about INR79 crores. We operationalized, as Stefan mentioned, both the manufacturing lines in France, hence and additional depreciation of the second manufacturing line of which started from January of ’25 that is already captured in this number so we don’t expect depreciation to increase much from here on onwards. The finance cost, which in the last quarter stood at close to about INR48 crores. Now we are at about INR42 crores. And what we expect is that the finance cost for us should keep on-going down as we are as we keep on battering our financial covenants with the bank and what we expect that in the full financial year of ’26, we should be at least at least 10% to 15% lower than what we reported for the full financial year ’25. All of this translated into a profit before-tax of about INR27.7 crores for the quarter and INR19.3 crores for the full financial year ’25, which is a substantial improvement as compared to financial year ’24. The French entity generated a revenue of close to about EUR8.6 million for the full financial year and we expect that the revenue should double in the financial year of ’26 based upon the current business plan that we have. Talking to — talking about the segment-wise performance as far as the revenue is concerned, in the current quarter, the revenue for the carbon trans which in the current quarter was dominated by the development revenue as compared to commercial, which dominated the worst of the 3/4 during the year. But for the quarter ended March 31, ’25, it was more of the development revenue that had a higher share. This revenue stood at INR489 crores as compared to INR449 crores in the comparable quarter of last year, which is a growth of about 9%. And for the full financial year, the revenue stood at about INR2003 crores as compared to INR1,953 Crores in financial year ’24. So the collateral and Vitamin-D analogs business, as I have mentioned in the previous calls that we do expect that the revenue should be much higher than the quarterly run-rate in the first 3/4 and that is something that was achieved in Q4 of ’25 with about INR121 crores of revenue as compared to INR91 crores in comparable quarter of last year. For the full financial year, this translated into INR305 crores of revenue as compared to INR332 crores in financial year ’24. The India business did a revenue of about INR80 crores in the quarter and for the full-year, it did about INR290 crores, which is a growth of about 45% as compared to financial year ’24. So we have already seen a turnaround or I would say start of a turnaround in the India business — in the France business and that should — that trend should continue in financial year ’26 and going-forward. The products and generic business for the full-year was more or less flattish at about INR113 crores as compared to INR115 crores in financial year ’24. As far as the margins are concerned, in the current quarter, we saw carbon transit margin of close to about 25% as compared to 15.6% in Q4 of FY ’24 and for the full-year, the margin was stood at about 19.7% as compared to 17.7% in financial year ’24. The cholesterol and vitamin team business where, as we had mentioned earlier, where the prices of one of the key raw materials had increased substantially. We have managed to lower those prices significantly of in the current financial — I mean starting from the current financial year and we will start seeing the margin improvement in that particular business. However, for financial year ’25, the margin stood at about 10.3% as compared to 17.8% in financial year ’24. The India Trans business margin stood at about 17.3% in Q4 of FY ’25 as compared to comparable quarter where the margin was 5.2%. And for the full-year, this translated into a 15% EBITDA margin, which was low in FY ’24. Across and generic business, the margin stood at about 8.4% in Q4 of FY ’25 as compared to 7.2% in the comparative quarter last year. While for the full-year, it was flattish at about 7% for FY ’25. Overall, as I mentioned earlier, this was a very good year for us and as far exceeded our expectations on the operating profit and we — we aim to continue this in the future as well. As far as the net-debt is concerned, we also saw a reduction in the net-debt as compared to March 31, ’24 and also as compared to the previous quarter, where now the net-debt stands at about 157 million spend as compared to $163 million as of March 31, ’24. The cash-flow generation for the year has also been quite strong and the cash-flow spent on the investment activities on the capex stood at about INR116 crores, which was very much in-line with our expectations. With that, so that basically covers the entire financial performance for the year and the quarter and we will be open to answering any questions that you might have.
Questions and Answers:
Operator
Thank you, sir. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press to. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles, the first question comes from the line of Sarkar from Mount Intra. Please go-ahead.
Subrata Sarkar
Yeah. So a couple of questions. Now, sir, like this quarter, Indian NCE API and intermediate saw a decline. This is in like in contrary to our general trend. So if you can highlight a few things on that and second will be like why this like India again operation quarts and generics margin is not picking-up, still we are operating at a very low-margin. So this is my basic two-question, then I will move to other two businesses also.
Harshil Dalal
So thank you, Mr Sugar, for your question. So I mean this quarter the revenue stood at about INR80 crores. But if you see the full financial year, we closed with about INR290 crores, INR300 crores was what we were expecting for the full-year. So that’s very much in-line with our expectations. As we have been saying earlier, quarter-over-quarter that could be in the revenue.
But as far as the trend is concerned, that’s something which is very much established. So it’s just for this particular quarter. Otherwise for the full-year, we have achieved the target. But across and generic business, that business is basically the traditional business with which Dishman actually started and more or less, we don’t expect a huge margin improvement in that particular business.
I mean, it’s a steady-state business for us, both in terms of revenues and the margin. So at Max, maybe we can get to say close to about 10% to 12% as the margins, but for the last year, it stood in-line with what the previous year did, which was close to about 75.5%.
Subrata Sarkar
Okay. Just one follow-up question on the India side, like with all the regulators behind, like what can be our — like peak revenue with the existing asset that we can achieve and like in FY ’26, what kind of a revenue we are expecting from that?
Harshil Dalal
So as far as the India assets are concerned, you know we have done a major upgradation in both our Babla type as well as the Nara type. And what we expect is that with this capex as well as the operational efficiencies that we are trying to bring in, we would, we could possibly achieve a revenue, total revenue of close to about 800 crores with all the clans or all the units up and running.
So that is the potential opportunity for the India assets for the next financial year. What we expect is that obviously the focus would remain on the cranks business. But we also expect certain pockets of our cost and generic business also to do well. And with that the India cranks business we do expect close to about 15 to 20% kind of growth and the cost and generic business should be anywhere between 5 to 10%.
Subrata Sarkar
And sir, our cram India business should achieve higher margin because ideally that’s a higher margin business more than like 13% which we are this for full year.
Stephan Fritschi
Yeah. So if you see historically, you know we have done upwards of 35, 40% kind of EBITDA margins for that particular business. So as the revenues keep on increasing, obviously the cost base has increased because of the improvements that we have done. But we do expect that the margins should move towards the 20, 25% mark.
Subrata Sarkar
Okay. And sir, specifically coming to this cholesterol and vitamin D business like the raw material cost, one of the key ingredient has come increased but now we have done some like repricing. So based on that sir, what kind of a margin for FY26 we can expect? I know maybe 17.8% FY24 margin are difficult to achieve but still like where it can be like.
Harshil Dalal
Yeah, I won’t say it’s difficult to achieve but yeah, anywhere between 15 to 20% is what we can aim for.
Subrata Sarkar
Okay, okay. Now sir, like my second last question is more on the overall revenue. Sir, if you can give us some, some guidance like with Indian operation now X of regulatory issue we are ramping it up and like contract research for like AMCs AMC is also like back on track. Can we expect a double digit kind of a growth in terms of top line as a whole or at least double digit growth X of let’s say India quantum generic business.
Harshil Dalal
Yeah, I mean based upon the current business plan that we have, we do expect that over the next three to five years we should achieve a CAGR of anywhere between 12 to 15%.
Subrata Sarkar
Okay. But this year definitely can we expect at least like, like last year growth was only 3%. So can we expect far better growth at least at a company level, sir?
Harshil Dalal
Of course, yeah. That is even what Stepan mentioned that the focus is on how do we keep on improving the revenues. But obviously we don’t want to do that at the cost of not achieving the EBITDA or the cash profit. So the focus would remain on generating more profit like what we have done and what we have achieved in financial year 25. So the focus would be on maintaining or improving those margins. But we would not want to do the sales at the cost of the profit. So while we would want to increase the revenue substantially from here on, but obviously not at the cost of profits.
Subrata Sarkar
Okay, so in that case, what kind of margin as a whole company will we are targeting in FY26.
Harshil Dalal
FY26. We should be closer to the 20% mark.
Subrata Sarkar
As a whole, sir, as at a company level.
Harshil Dalal
Yes.
Subrata Sarkar
Okay. And the last question from your point of view, like now most of the like cost behind we have a substantial date. So what is our idea? Idea is to repay back some date or since it is in foreign currency and local date, we want to continue with it. Because what, what is happening sir, despite our numbers now margin, EBITDA margin back on track. Like it’s not getting reflected into pad because of like higher depreciation as well as like as well as interest cost. And if revenue do not go that substantially, it’s very difficult to flow to the pad. Basically the improved performance optically it’s. It’s become depressed. So any idea on that.
Harshil Dalal
The revenues would increase and for sure what I was just trying to say is that we would not want to sell something at a loss or substantially low profit just in order to show growth in the revenue. But to your point on that, the focus is on generating the free cash flow. Because if you see Most of the CapEx is behind us, the larger CapEx, especially like the new French facilities, plus the digital transformation that we are undertaking.
Most of the costs have been incurred. There would be costs that would be incurred but will be substantially lower than what we have. So now whatever capex that we do would be based upon proper business case, a commitment from the customer. You know, like Stefan mentioned, we have the customers. That is a co investment agreement. We are, I mean where more or less we know that there is going to be an assured revenue in the future. So those kind of capex is something that we would do otherwise. There is no reason why we should not generate free cash flow. And what that would mean is that the net debt at a group level should keep on going down in the in the future.
As far as the conversion from the EBITDA to the package concerns. Yes, you know, basically there are two components. The Interest and the depreciation. So on the interest part, as I mentioned, the interest cost or the interest rates for us on the. On the debt that we have would keep on going down. They are going down and that will be reflective in the. In the quarters to come. That is number one.
And number two, we had this amortization of the goodwill which was to the tune of almost 45 crores till financial year 24. That now normatization amount has also reduced. So we do expect that there should be a positive conversion from the EBITDA to the. To the phe. And the tax rate for us remains more or less at the same level as what we saw in FY25. Accept that. You know, there are the French entity which is a loss making entity right now and as it keeps on turning around generates profits, the tax rate for us should also come down.
Subrata Sarkar
Okay, and the last on the overall industry, is there any like how would you see the environment like in if things are improving on the cram side from the client side, whether funding is okay, like we are facing additional demand or it is as it is, or there is some deterioration. If you can highlight something on that.
Stephan Fritschi
So if I understand correctly, you would like to know more our perspective about the development of the crimes market since your question.
Subrata Sarkar
Yes sir. Vis a vis last year, let’s say what is your outlook? Basically.
Stephan Fritschi
So generally spoken, we observe still a strong interest and strong investment in our crams business or in the development of new APIs. So there is no change in that sense. Of course there are some challenges on the way specifically in the US but outside the US the interest is still high and there is also one of our focuses to work more on outside US markets to get more business there. Generally spoken, the majority of the business is still in small molecule. Also what we also observe a strong interest in pronunciation products, specifically antibody drug conjugates but also other conjugation products like polymorph polymer carriers linked with APIs.
So this part is increased interest in the market and also there we are looking to invest more. It’s a bit early to go into more specifics. Last time I mentioned that we are looking to alliances. This discussion continue and we also look into further expansion projects in Europe but also in India. So there we are prepared to go into the future as well.
Does this answer your question?
Subrata Sarkar
Yes sir. Thanks. Okay, thank you.
Operator
Thank you. The next question comes from the line of Anita Jani from Seven Islands. Please go ahead. Anita, please go ahead with your question and unmute yourself in case if you are on mute.
Anita Jani
Hello.
Operator
Yes, please go.
Anita Jani
Yeah, this is Gandhita Jain from Seven Islands pms. I have one quick question sir. I would want to know about your outlook. By when would we will we be able to achieve 750 crores of EBITDA? Sorry Anita, can you please repeat your question? Your voice is not that clear. Yes, my question is I would want a guidance on by when can we expect a reasonable 750 crores of EBITDA? Mark,
Harshil Dalal
So what figure did you mention?
Anita Jani
750 crores of EBITDA. By which year can we expect that?
Harshil Dalal
So I think based upon, you know, the things that stand right now, what we expect that in the next two to three years we, we should be closer to that number
Anita Jani
Next two to three years. And for this year we are expecting approximately 550 to 570 crores of EBITDA. Right?
Harshil Dalal
Yeah, that is something that should be achievable.
Anita Jani
Okay. All right, thank you so much sir.
Harshil Dalal
Thank you.
Operator
A reminder to all participants, please press star and one to ask a question. The next question comes from the line of Smith Shah from JHV Securities. Please go ahead.
Smit Shah
Yeah, hi sir, am I audible?
Harshil Dalal
Yes.
Smit Shah
Yeah. So firstly, congratulations on a good set of numbers. My question here would be that this year we did an EBITDA of 469 crores. Next year probably we do, we’ll do somewhere around 550 to 570 crores and if you see that it converts to an operating cash flow of roughly around 400 to 450 crores at the very least. So I wanted to understand how much of the debt repayment will happen in the next one or two years because I know you’ve already given a guidance on the net debt to EBITDA part, but that is more of a factor of the EBITDA going up and not the debt going down. So if you can share some details on what will be your gross debt trajectory in the next two years that would be more helpful.
Stephan Fritschi
So basically, you know, the way we look at it would be more on a net debt basis, say not on net debt to ebitda, not the net leverage, but say on a net debt basis we would see it coming down in the, in the coming year because right now the capex that we plan to incur year over year income, including the maintenance and the capex that we have to incur for the compliance part would be somewhere between 25 to 30 million as an average. So what we expect is that the net debt should come down by close to about 100 to 200 crores every year.
Smit Shah
Okay, understood. But are we like the only factor.
Stephan Fritschi
Sorry, just to complete, the only factor would be, if you’re looking at it in inr, the only factor would be the FX fluctuation which is obviously not in our control. But because you know, most of our debt is denominated in foreign currency. And that is the reason in our presentation as well, we give out that figure in Swiss franc where most of our debt is sitting. So from a CHF perspective, you know, we are pretty confident to reduce it by anywhere between 10 to 20 million.
Smit Shah
Okay, understood. And so one more question. I so if, if we check out your inventory days, Those are at 550 to 650 odd levels. So why is the inventory day so high for us?
Harshil Dalal
So it is 550 days.
Smit Shah
Yeah. Your inventory days, when I see your inventory days are too high as compared to your peers. So what would be the reason for that?
Harshil Dalal
Well, the inventory is largely on account of the commercial manufacturing projects that we have on hand, you know, where our customers would mandate us to keep a certain level of inventory for them. So it can’t be 550 days. I can check the numbers, but that’s the only reason, you know, why it would be on the higher side because most of the molecules that we deal with are new chemical entities where if the customer wants us to stock certain amount of materials while they are launching the product in the market that we would have to produce such high quantities of, of the finish schools or the working process.
Smit Shah
Okay, understood. And so just one last thing. We’ve been trying to get in touch with the management just to understand the company a little bit better. And we sent a lot of follow up emails as well, but we’ve got no rewards. So if you can look at, look into this, that will be really great. Yeah, thank you so much.
Stephan Fritschi
Okay, sure. It might have been missed out, but we’ll get back to you.
Smit Shah
Yeah, thank you. All the best.
Operator
Thank you. The next question comes from the line of Satish Bhatt from Anvil family office. Please go ahead.
Satish Bhatt
Hello. Good evening sir. Congrats on the good set of numbers. I have two set of questions. One for Archil and for Steven. You reported that this year you had a French revenue of 8.6 million euros. So what was the EBITDA loss and the PBT loss? If you, you can just throw light on that.
Harshil Dalal
Yeah, the E loss was about 6.5 million and on the PVT that was close to about 50, about 9 million.
Satish Bhatt
So do you expect that this year we’ll be able to break even this level?
Harshil Dalal
Yeah, that’s the idea. So the breakeven point for us is close to about 18 million of revenue. But the breakeven in terms of breaking even at an operating level. So that is what we are aiming for. At a worst case we should be closer to the 15 to 16 million in terms of revenue.
Satish Bhatt
Yeah and Harshal, you told that your peak revenue from India can be around 800 crores. So how many years it will take to reach that figure?
Harshil Dalal
You know what we are doing is right now what Stephan mentioned is that we are trying to have a closer collaboration between Carbokanasis and India and our India operations, trying to see what are the projects where because of this collaboration we can have more and more molecules being manufactured in India which will help us to better utilize the capacity in India and that would eventually result into better operating margins at a group level.
So that is exactly what we have been trying for and we are already seeing quite a positive effect as we speak. And I mean in terms of timeline to get to that kind of number. If you are able to get more and more projects into India quickly though it takes time because you know, it’s not an overnight thing but overall we believe that it should be possible in the next two to three years time.
Satish Bhatt
Okay, that’s quite good sir. And sir, regarding Stephen, two questions for you. One is you told that regarding a Japanese customer you another co investment of 25 million euros has come. So are we investing in that project or only innovator is investing and you told that you’re doing more of a value added thing than currently you’re doing. So what type of additional work you’re doing which can be incremental to your business, you know or which can add value to your margin profile of carbon emsys? Yeah. If I understand correctly you asked me if we are investing into this project as well. So well in the investment of the infrastructure. It’s a core investment meaning the client paid for it and we work, we deliver our products. Once everything is finished, we deliver the product to a certain price until we reach their agreed final amount. Finally the co investments about 50%.
Stephan Fritschi
So yes. So this will be part of the normal capex which will come in the current year. No, it’s paid by the customer.
Satish Bhatt
And what type of incremental value addition you’re doing in the EDC plant EDC front where you can have incremental margins, you know, from that same project?
Stephan Fritschi
Well it’s difficult to say Numbers, it’s significant. We’re talking at the end, I don’t know, 10% of the entire revenue coming from this. From the carpeting side. It’s difficult. Of course there’s still some flexibility in the amount because it’s market outlook. It’s the best guest the client has. And we are depending on his efforts and his success of course. But we are all optimistic that we reach and hopefully overachieve this target.
Satish Bhatt
Yeah sir, last year we had around 16 phase three late projects, you know and during the year it has come down to 14. So any projectors product has gone to commercial or is it just a normal dropouts? And how has been the phase one and two development pipeline phasing up over a period of year?
Stephan Fritschi
You know, so it’s a normal development that or flexibility and variability that the late phase are acquired but also dropping off. We had one or two examples where the late phase projects dropped off on last minute because the client made a recalculation. And that’s why we finally also lost this program project which is nothing extraordinary. It’s part of the business where we are in.
On the other side we increased the number of commercial products. That’s the other effect when we get more commercial status. And the late phase is ending of course, late phase project because it turns into commercial. Your question concerning the number of early phase of phase one, it’s also tricky one because it’s a lot of flux here.
We are talking of dozens and dozens of early phase projects. What we see generally spoken has a pickup of new early phase projects on one hand. But also on the other side investors are also looking into late phase projects in the market because they would like to get their invested money as soon as possible back. And this is when they are in the late phase.
So that’s the other direction we are going to focusing on phase 2B and phase 3 projects when we get the opportunity to acquire those projects. But also maybe even if you are not the first supplier then to be the second supplier, which is also good. This would be in accordance with our customer strategy that normally they have two to three suppliers for one API to have a risk mitigation.
And that’s what we also trying to do focusing on those projects. What we have invested in the last two to three months into market intelligence to get more information from the market about the market, about projects our clients are working on that we can step into and offer our services.
Satish Bhatt
A lot of talks now going on. Everybody’s.
Operator
Satish, I’m sorry to interrupt. Satish, could you please rejoin the queue so the management can respond to the other participants.
Satish Bhatt
Okay, thanks. Thanks. Yeah, thank you.
Operator
Ladies and gentlemen, in the interest of time, I would request you to stick to just two questions. If you have any more questions, kindly rejoin the queue. The next question comes from the line of vignesh ion from Sequent Investments. Please go ahead, sir.
Vignesh Iyer
Thank you for the opportunity. So two questions from my side. Side, sorry. So the first question is. So from our B side, I mean, historically we have done like 120 crores run rate for the quarter. And. And if I remember correctly, in the earlier calls, we were targeting that 100 crore number coming in FY26. So just wanted to understand that would we see that number coming out coming in any of the quarters in this year?
Harshil Dalal
Yeah, I mean, that’s the expectation. I mean, obviously there would not be a linearity in that number in each of the quarters, but yeah, I mean, we should get to that number, I would say, in the later part of FY26.
Vignesh Iyer
Okay. And. And that, that would be. Sorry, same line. That would be like usually the quarter, four being the best quarter. Right. Among. Among all the quarters.
Harshil Dalal
Yeah. Historically that’s been the case.
Vignesh Iyer
Right. So second question from my side would be on the Netherland business side of it. So wanted to understand, you know, the contribution mix that has come from the analog and cholesterol in this quarter. If you. Historically, again, it was 45, 55, what was for this quarter and can you give that number for the entire year?
Harshil Dalal
Yeah, sure. So as far as the cholesterol business is concerned, in the current quarter, that was close to about 60% as compared to. And even for the full year it was quite high. It was again close to about 60% and 40% was the vitamin D analog.
Vignesh Iyer
So, sir, I mean, going ahead, would we see some change in that mix coming? I mean, I’m sure that that change decides on the margin part of the business, if I understand it right.
Harshil Dalal
Yeah. So from the margin perspective, you know, as I mentioned, we have this key raw material, which is the gold race, where we were trying to see how we could reduce the prices. And we have been successful in doing that. And that should help us in improving the margins for our Dutch entity, both on the cholesterol as well as the vitamin D. And also.
Vignesh Iyer
Got it. That’s all from my side and all the rest of the.
Harshil Dalal
Thank you.
Operator
The next question comes from the line of Akshay Kothari from Envision Capital. Please go ahead.
Akshay Kothari
Thanks for the opportunity. I just wanted to understand whether CHF price fluctuations which have been quite drastic and since last three, four months, how do they impact us? If CHF gains, do we get forex in?
Harshil Dalal
Yes. So from a revenue perspective, the revenue which is denominated in Swiss franc, that would be a positive impact. But then if you look at the cost basis because you know our final reporting of the consolidated numbers happens in Indian rupees and most of our costs, especially the employee costs are all denominated in Swiss francs or most of it are denominated in Swiss francs.
So when we, when we do the translation from Swiss francs to inr, the employee cost has an embedded component of the foreign exchange fluctuation which upon the appreciation of the Swiss franc against INR would have an impact on the cost parameter from a cash flow parameter. No, because you know, beyond in Swiss francs or in US dollars and that’s how the payments are made. But just from a reporting perspective because everything gets reported in inr, which is the functional currency of reporting, that would have a negative impact on the cost. Okay. And so, so that’s where employee cost as a percentage of sales, even though our sales have gone up, has actually increased. Is it because of that? Yes. So part of it is related to the, to the effects fluctuation. So if you see the Swiss franc through the inr, the closing exchange rate as of the last year was about 92.5 while as of 31st of March 2625 sorry is 96.67. So that’s like a 5% appreciation of the Swiss franc which directly impacts the cost basis. While most of our revenues they are denominated in, in US dollars as compared to Swiss franchise.
Akshay Kothari
Understood, Understood. And sir, will our employee cost at any point of time come down? I understand we have more than 50% of staff as PhD, but will our employee cost in absolute terms come down at any point of time?
Harshil Dalal
That would be quite difficult because most of the employee cost is related to the development work that we do. And we need those kind of scientists or R and D tenants in order to make sure that we are able to deliver what the customer requires. So we don’t expect that to come down. But obviously what we are trying to do is to bring in as much efficiency as possible. So as we, I mean if you are successful or as we succeed in getting most of the or more of the large scale manpower manufacturing in India, that will have a positive impact on the employee cost as a percentage of revenue.
Akshay Kothari
And lastly sir, our capex you guided is around 1500 crores in INR terms, right?
Harshil Dalal
You mean the capex for the last year
Vignesh Iyer
Capex for this year?
Stephan Fritschi
No, no, no, not 1500. That would be close to about 25 million. 25 to 30 million. So about 250 to 300 crores.
Vignesh Iyer
250 to 300 crores. So sir, if we are going to keep on doing kp.
Operator
Sorry to interrupt a. Could you please rejoin the queue for.
Akshay Kothari
So just last, last, last thing. How will our depreciation actually decrease or remain same? This is the last question.
Harshil Dalal
Yeah, the, the. I mean when I talk about the capex. So in the future years obviously you know, as we incur these capex there will be an increase in the, in the depreciation. But what I was trying to say is that the larger amount of the capex which was mainly for the French entity, you know that is now behind us and also there would be certain assets which are kind of reaching the end of the life as far as the depreciation is concerned. So overall, you know, in a year’s time if you ask, yes there would be be an increase in the depreciation because of the capex that we do minus the assets that are reaching end of life.
Akshay Kothari
Okay, thank you. Thanks a lot and all the best.
Harshil Dalal
Yeah, sure. Thank you.
Operator
The next question comes from the line of Rishikesh Oza from Rebecca Capital. Please go ahead.
Rishikesh Oza
Yeah, hi, thank you for the opportunity. So could you please guide us on what tax rate do we see for next? FY26.
Harshil Dalal
So the tax rate would be difficult to mention because you know, if you look at the various entities within the group, we have the French entity which is currently making a loss and then we have the profitable entities which are Swiss entity and you know, then we have the Dutch entity as well. And then you have Manchester which is more or less kind of pretty even or does not have substantial amount of profits and so is the case with Shanghai. And then you have the India business which is just coming around so there is a loss over there.
So overall you know we pay taxes on the entities where we make the profit and then obviously we don’t pay the taxes where there are losses. So the effective tax rate looks quite high as compared to the profit before tax as is also evident in the financial year 25 number.
Rishikesh Oza
So I would say if you have, if you want to pick out a tax rate so to say on the PBT then more or less it would remain similar to what we have in FY25 so that around 83% and I can see the tax rate on FY25.
Operator
So that’d be very high. I’m sorry, not audible. Could you please speak a little louder? Thank you.
Harshil Dalal
So as far as our tax rates are concerned, in Switzerland, you know, it is around 15 to 16. In France it is about 25%, Netherlands is 25, India is close to about 35% and Chandra is also around 25. So on an average, if you see our tax rate is anywhere between so close to about 25%. If you take an average, but because certain entities are profit making and the rest are loss making, the effective tax rate becomes much higher than what actually that we are paying in each of the entities that are generating profit . Okay, okay. So would it be fair for us to take somewhere around 25 to 30% tax rate?
Rishikesh Oza
Yeah, that would be the effective tax rate on an average.
Unidentified Speaker
Okay, thank you. Thank you.
Operator
The next question comes from the line of Sajal Kapoor from Anti Fragile Thinking. Please go ahead.
Sajal Kapoor
Yeah, thanks for taking my question. Hershel, you mentioned the capex for F26 to be in the region of 250 to 300 crores. How much is our usual maintenance capex within this number? And basically looking for the split between the maintenance regular capex and the gross capex in this number of 300 crores.
Harshil Dalal
So the maintenance capex will be close to about 170 to 180 crores. All the entities put together and the rest would be for the growth capex, which also includes digital transformation initiatives.
Sajal Kapoor
Sure, sure. And one for you, Stipal. What regarding this Japanese innovator, co investing. So what might have motivated this customer to co invest and why did they select decal for this upfront cash payment instead of, you know, some of the bigger players such as Racy Farm or maybe Lonza.
Stephan Fritschi
Quality, reliability and how we approach our customers and projects. So these are keywords, what are important to our clients. So when we start to work with a client, we establish a relationship which is based on trust and client gets confident that we succeed. And the chemistry in this specific case is very complex and very challenging.
And we achieved to be successful that the client said, well, we want to remain Carbogen’s customers. And as you know, the Japanese clients are very loyal. It’s a long term investment they are doing. It’s challenging to get Japanese customers on board, but once you got the money board, they stick with you if you deliver, deliver what you promise. And this we do. So that’s the reason why they stay with us. Because also tech transfer to another site which is maybe Lower in cost. There’s quite a risk for the customer that he doesn’t succeed. So that’s the reason why he invests in our capabilities..
Sajal Kapoor
Amazing. That’s very helpful, Stephan And finally we had 15 molecules in phase 3 previously. Now we have on slide 23 is the one I’m looking at now. From 15, we have got 14 left. Please could you clarify whether there has been a dropout due to, you know, poor clinical data or if this molecule has progressed to the NDA stroke commercial stage. So basically 15 was the number previously. Now we have got 14. So why there is one left?
Harshil Dalal
Okay, well as I said before, there are different factors. In one case it is that the flowcheck dropped off on the client side because as you know the clients, the customers, they are monitoring very carefully, closely during the development phase of a project of a molecule if it’s worthwhile to pursue. And this does not only include technical aspects but also marketing aspects.
And in that case it came to customers awareness that it was just too costly to market it and not enough revenue to be accepted to sell this truck. And this has nothing to do with how expensive or how cheap we are in our services. It’s the overall global view of the customer on their portfolio. And if they see that their profit is not big enough then they drop off the project. And this can happen in very last minute. And this is the observed in this one specific case. Yeah, of course.
Sajal Kapoor
No, that’s helpful. Stefan and Harshal, thank you so much. That’s all I had. Thank you.
Operator
Thank you. The next question comes from the line of Ankur Agarwal from RC Business House. Please go ahead.
Unidentified Participant
My question is from the ROCE side. Our ROCE is very low like 2% in this year. What companies do to increase that roce to somewhere 12, 13, 15%, is it possible? Or our business vertical just like we are doing like 1, 2, 3%. Rog.
Harshil Dalal
No. So obviously you know the ROCE is definitely one of the focus areas. And if you see the capital employed right now there is a component of FX as well which needs to be removed as well as you know, the goodwill needs to be removed in order to calculate the right return on capital employed. Having said that if you see over the last two to three years there has been a significant amount of CapEx that has been done whether it’s the French entity, the digital transformation plus the CapEx that we had to do in Padla. So the returns on these investments is something which should start showing up in the numbers in the, in the coming Years. And that should definitely help us in improving the ROCE.
Unidentified Participant
What is the timeline to when we come to 10% or more than ROCE? Is it possible or is it not possible?
Harshil Dalal
No, definitely it is possible. I think in the next two to three years, you know, once we start seeing profits being generated from the French entity, the India business ramping up and margin improvement in Netherlands with all of these factors put together and the Swiss business obviously performing the way it has been, all of these factors putting together, we should definitely see a double digit ROCE by then. That will be in the next three years, three years long.
Unidentified Participant
Okay, that’s all from myself. Thank you.
Harshil Dalal
Thank you.
Operator
A reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Subroji Tripati for an individual investor. Please go ahead.
Unidentified Participant
Thank you for the opportunity. My question is like you have spoken about increasing the synergy between the India operations and the garbage enamsis unit. So what will change? Like what are you trying to change? Because Decal has been a combined entity for many years now and Stephen himself has been with the garbage entity for more than decade. So what change are you trying to bring in now and why was it not done earlier? T
Stephan Fritschi
Hank you, thank you very much for the question. We’ll try to answer as soon as possible. In that sense, I think the big difference is that we have a change in leadership. We realize that both organizations, the Big Car, the Bishop organization, but also the organization is much if you collaborate, meaning that we have synergies.
For example, the carbon size is limited in reactor size and whereas in the Fishman side maybe they’re more suited to make fast process development. And these are things what we try to bring together. Also in the time of globalization and electronically interaction, we see on the procurement side for example, that we can achieve much better results if we bring things together.
This is one of the projects we are initiating here that we do the procurement hopefully together. This is still under investigation, but this is one of the outlooks and what we see, you know, on the carbon side we have a number of commercial products which are getting much matured. Meaning that there is a certain risk that the patent will expire and the client decides maybe to give up the product. And if we can also offer a more cost effective way how to produce, then the customer is also interested to get a better deal out of it.
And we call this life cycle management that we from a carbon type look at the molecules and the processes and where it makes sense, we transfer it to Fishman to babla that they can produce either intermediate or eventually in the entire API. Of course this happens always in collaboration with our clients that he’s aware that what we are doing. Because it’s also important that the clients keeps the trust in our capabilities and in the way how we work.
Unidentified Participant
My question was why was this not done so many years earlier? Why now?
Stephan Fritschi
I can answer the question why now? But maybe less why not earlier? Because I was not in trimester. And now we see that time has changed and in the past the price pressure was not that huge as what it is today.
Unidentified Participant
Okay. And secondly, Harshal. So but in the payable data, sorry, the trade receivables have gone up pretty substantially. So could you help me explain that?
Harshil Dalal
Yeah. That’s largely on account of the higher shipments that were done in the last month. That was in March.
Unidentified Participant
And that is the reason, you know, why at the end of the year the receivables are quite high. It has gone up by almost 40% revenue growth which is not so substantial.
Harshil Dalal
Yeah. So in the last quarter, you know, the month of January was the revenue was not that great. But it was mainly in February and March. And that is the reason you see that substantial increase both on the development as well as the commercial side.
Unidentified Participant
Okay, thank you. That’s it.
Harshil Dalal
Sure. Thank you.
Operator
The next question comes from the line of SOHO from RV Investment. Please go ahead.
Unidentified Participant
Thank you. Sir. This 550 to 570 crore which we are expecting in FY26, this is while considering a 20% margin.
Stephan Fritschi
Yeah, the 20% is what we would aim for. So you know, we would try to see if the EBITDA can be even higher than this number. But a 20% margin is something that we are targeting. So we are targeting a low single digit margin growth in revenue. Top line. We are targeting low double digit. So you know, as I mentioned, the EBITDA could be higher than this.
Unidentified Participant
No, sir, I’m talking about revenue.
Harshil Dalal
Revenue will be low single digit growth. Yeah, I was also mentioning about the revenue that it could be low double digit. And what that would mean is that the EBITDA could be higher than this number. That is what our target is rather minimum. This is the number that we should achieve. The price is the to 570.
Unidentified Participant
Okay, sir. Okay, sir. And we are expecting a 10 15% decrease in finance cost this year, right?
Harshil Dalal
Yes, at a minimum. At the minimum.
Unidentified Participant
Okay. Thank you sir. Thank you sir. That is very helpful.
Operator
Thank you. Thank you. Ladies and gentlemen. That was the last question for today. I would now like to hand the conference over to Mr. Stephen Fritzi for the closing remarks.
Stephan Fritschi
Okay, thank you very much. I thank all of you for your interest in our company and the development what we have done. And also we do, we hope that we could answer all your questions to your satisfaction. And we are looking forward to the future in our company, to further expansion of our capabilities and services. And I’m looking personally also forward for close collaboration across the entire portfolio of our business.
Operator
In that sense, I wish you a nice afternoon, nice evening, and talk to you next time. Thank you very much, everybody. Thank you, sir. Ladies and gentlemen, on behalf of Dishman Cargo and amsys Limited, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.