Divi’s Laboratories Ltd (NSE: DIVISLAB) Q3 2026 Earnings Call dated Feb. 11, 2026
Corporate Participants:
Satish Choudhury — Company Secretary & Compliance Officer and Chief Investor Relations Officer
Kiran S. Divi — Whole-Time Director & Chief Executive Officer
Nilima Prasad Divi — Whole-Time Director, Commercial
Analysts:
Surya Narayan — Analyst
Tushar Manudhane — Analyst
Kunal Dhamesha — Analyst
Neha Manpuria — Analyst
Damayanti Kerai — Analyst
Vivek Agrawal — Analyst
Shyam Srinivasan — Analyst
Girish Bakhru — Analyst
Madhav Marda — Analyst
Harshit Dhoot — Analyst
Alok Dalal — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the earnings conference call of Divis Laboratories Limited for Q3FY 2026. 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 start and zero on the touchstone pH. Please note that this conference is being recorded. I now hand the conference over to Mr. M. Satish Chaudhary. Thank you. And over to you sir.
Satish Choudhury — Company Secretary & Compliance Officer and Chief Investor Relations Officer
Thank you. Good afternoon to all of you. I am M. Satish Choudhary, Company Secretary and Chief Investor Relations Officer of Dvis Laboratories Limited. I welcome you all to the earnings call of the company for the quarter and nine months ended 31st December 2025 from Divi Slabs. We have with us today Dr. Kiran SDV full time Director and Chief Executive Officer, Ms. Neelima Prasad Divi full time Director Commercial and Mr. Venkatesha Pirmalu Pasmati, Chief Financial Officer. During the day our board has approved unaudited financial results for the quarter and nine months ended 31st December 2025 and we have released the same to the stock exchanges as well as updated the same in our website.
Please note that this conference call is being recorded and a transcript of the same will be made available on the website of the company. Please also note that the audio of the conference call is the copyright material of Diwis Laboratories limited And cannot be copied, rebroadcasted or attributed in press or media without the specific and written consent. Let me draw your attention to the fact that on this call our discussion will include certain forward looking statements which are predictions, projections or other estimates about future events. These estimates reflect management’s current expectations of the future performance of the company.
Please note that these estimates involve several risks and uncertainties that could cause our actual results to differ materially from what is expressed or implied. DV SLAB or its officials does not undertake any obligation to publicly update any forward looking statement whether as a result of future events or otherwise. Now I hand over the conference to Dr. Kiran Divi for opening remarks. Over to you sir.
Kiran S. Divi — Whole-Time Director & Chief Executive Officer
Good afternoon everyone and welcome to Divi Laboratories earning call for the third quarter of financial year 2025 26. Thank you for joining us today. We appreciate the continued trust and engagement you have shown in Dibees and I hope you and your families are doing well. Let me walk you through the key developments during the quarter including our operational progress capability Building and Execution Priorities as we reflect on the third quarter, our approach has been to stay consistent by maintaining supply reliability for our customers and implementing efficient new technologies on a large scale while aligning our investments with that our customers and market need.
Firstly, I would like to talk about our generic segment. I’m pleased to say that we have maintained a stable performance supported by strong backward integration, process efficiencies and our ability to develop and deliver across regions. While the pricing environment remains competitive, we have seen a healthy volume traction in certain emerging and focused products. In the custom synthesis segment, we have been actively engaged in several RFPS and customer visits. Multiple projects are progressing well and are at various stages of development validation with a few moving closer to commercial volumes over the next one year. From our discussions with several MNCs, it has been clear that global innovators are effectively working with partners who prioritize on EHS performance, sustainable commitment and compliance readiness along with their capacity and proven record of reliable execution and supply.
These are areas where DEVIS has always been strong and we are building further on these fundamentals as we participate in global CDMO opportunities. Speaking of the peptide segment, Divis has been deeply involved in peptide chemistry for many years. Across the manufacturing and technology platforms, we continue to advance our work in complex building blocks and fragments. With our decades of experience in protected amino acids, we have maintained a strong control over consistency and quality. During the quarter, we have supported multiple customer programs across all clinical phases. On the technology front, we continue to expand our technology platforms in ways that enhances efficiency and performance.
We have increased the use of process automation and multiple new chemistry platforms, scaling them into commercial manufacturing to improve process safety, minimize heat buildup for a more sustainable process and strengthening the overall production. Coming to nutraceuticals, we delivered a healthy performance and expect the momentum to carry forward. This year also marks 20 years of divis Nutraceuticals, a significant milestone as we expand capacity and strengthen our position in this segment. On the manufacturing front, unit 3 at Kakinada is playing an important role in our backward integration strategy. The operational blocks are being effectively used for starting materials and intermediates, strengthening our supply chain expansions and transfer activities are still going on with additional manufacturing blocks being progressed as planned during the quarter.
We have also successfully concluded a U.S. fDA General CGMP inspection at our Unit 1 Chautauqual facility. The positive outcome reaffirms our commitment to the highest standards of quality and regulatory compliance. Before I close, let me touch on our CSR initiatives for the period we advanced our work in rural development, providing safe drinking water, improving sanitization and building essential infrastructure in villages surrounding our manufacturing units. We believe these efforts are foundational in enabling conditions that support education, health, livelihood and overall community development in a sustainable way. Thank you. I will now hand over the call to Ms.
Neelma Devi who will take you through the operational and financial highlights.
Nilima Prasad Divi — Whole-Time Director, Commercial
Good afternoon ladies and gentlemen. Thank you for joining us today. We value your continued engagement with Divis Laboratories and appreciate the opportunity to present an overview of our operational and financial performance for the third quarter of fiscal year 25, 26 and nine months period. The third quarter unfolded against a backdrop that remained complex and uneven, shaped by shifting geopolitical developments and evolving policy frameworks. In this environment, our priorities were clear to remain focused on disciplined execution, operational reliability and long term value creation. Our established operating systems and governance processes once again enabled us to meet customer commitments, consistently manage resources prudently and maintain stability across our operations even as we continue to invest in capabilities aligned with our long term strategic objectives.
On procurement front, raw material prices and availability were broadly stable during the quarter. Our supply chain resilience continues to be supported by a diversified vendor base and strengthened further through backward integration, particularly at Unit three. At the same time, we remain vigilant with respect to external developments that could influence input costs, including recent policy changes such as China’s withdrawal of export tax rebates on certain products which may result in selective pricing pressures over time. Risk management remains a core focus area for the company. We are systematically expanding and qualifying additional suppliers while maintaining prudent inventory buffers to ensure continuity of operations based on current visibility.
We expect the operating environment over the next six months to remain broadly stable in terms of raw material pricing and availability. Logistics conditions during the quarter were manageable with freight rates remaining largely stable. We continue to work closely with long standing logistic partners, plan shipments well in advance and maintain transparent and timely communication with customers regarding delivery schedules. Before moving to financials, I would like to reiterate that our approach remains anchored in operational excellence, prudent capital allocation and a long term perspective. These principles have consistently guided Divis Laboratories and will continue to underpin our strategy as we navigate both near term challenges and future opportunities.
I will now present an overview of the financial performance of third quarter of fiscal year 2025-26 as well as the results for nine months ended December 31, 2025. As you are aware, the Government of India notified the four labor codes on November 21, 2025 which resulted in a revision to the definition of wages in line with this regulatory change, we have assessed a one time incremental impact of Rupees 74 crores relating to employee benefit obligations both during and post employment. This has been appropriately disclosed as an exceptional item in our statement of financial results for the third quarter.
We have reported a consolidated total income of Rupees 2,692 crores as compared to Rupees 2401 crores in the corresponding quarter of the previous financial year. Profit before exceptional tax item tax stood at 854 crores compared to rupees 726 crores in Q3 FY 2025 demonstrating improved operating performance after accounting for the exceptional item. Profit before tax for the quarter was rupees 780 crores. Profit after tax stood at rupees 583 crores broadly in line with rupees 589 crores reported in the same quarter last year. From a cost perspective, material consumption for the quarter was 36.3% of the sales revenue compared to 39.8% in the corresponding period last year.
Exports continue to constitute approximately 89% of the total sales revenue with Europe and United States together contributing to 73% of the export sales. The product mix for the quarter comprised 43% generics and 57% custom synthesis. We recorded a foreign exchange gain of 19 crores during the quarter. The nutraceutical segment contributed 214 crores to the revenue for the nine month period ended December 31, 2025. Consolidated total income was 8,081 crores compared to Rupees 7,041 crores in the corresponding period of the previous financial year. Reflecting the steady growth across segments. Material consumption during the period was 38.5% of sales revenue compared to 40.9% in the previous year.
Exports for the nine month period remained strong at approximately 89% of the total sales revenue with Europe and US contributing around 72% combined. The product mix for the period was 44% generics and 56% custom synthesis. We recorded a foreign exchange gain of rupees 121 crores during the nine months. Constant currency growth for the nine month period has been at 8.6%. Our nutraceutical business amounted to rupees 706 crores during the period as compared to rupees five hundred and seventy six crores during the corresponding period of the previous financial year. Profit before exceptional item and tax for the nine month period stood at Rupees 24.
99 crores compared to 2052 crores in the corresponding period last year. After considering the exceptional item, the profit before tax was rupees 2425 crores. Profit after tax for the nine months was rupees 1817 crores as against 1529 crores in the previous year. From capital allocation perspective, we capitalized assets of rupees 313 crores during the quarter and rupees 776 crores for the nine month period. Capital work in progress to that rupees 2,394 crores as of December 31, 2025. In line with our ongoing capacity expansion and backward integration initiatives, our balance sheet remains strong and well positioned to support future growth.
As of December 31, 2025, we had cash and cash equivalents of Rupees 3,686 crores, receivables of Rupees 2,637 crores and inventories of Rupees 3,667 crores. Thank you.
Satish Choudhury — Company Secretary & Compliance Officer and Chief Investor Relations Officer
Thank you, madam. With this we would request the moderator to open the lines for Q and A.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press start and one on the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Suya Narayanpatra from Philip Capital. Please go ahead.
Surya Narayan
Yeah, thanks for the opportunity and congrats. For the good set of numbers. Sir, so my first question is on the. On the GLP capacity buildup so that we have been saying that we have already commercialized one pilot plant in the earlier this thing that we had mentioned. So what is the capacity buildup that we are doing? Can you give some update on that front further?
Kiran S. Divi
So on GLP1. Okay, we have already. Like I explained last time, we have already completed construction of a pilot plant. We have also completed one of our commercial building which has Several large scale SPPSs which is basically designed based on one of our customers requirements. I am not at the liberty to speak about capacity created but the validations are going on as we speak right now because pilot work is done now is moving towards validations.
Surya Narayan
Okay, sure sir, just one clarification here. The three dedicated customs synthesis facility what we have got the contracts for and which are likely to see the commercialized commercialization starting from the fourth quarter of FY27. So any of those are relating to peptides.
Kiran S. Divi
I cannot comment on that. But what I can tell you is it’s a mixture of everything. It’s also in chemistry there are, there are several, several projects which are involved in it.
Surya Narayan
Okay. And sir, again about the capacity positioning that we would be having, about the contrast media and all that. So what is the capacity that we would be having or at what utilization that we would be operating it? Any progress on the kind of newer opportunities that we have talked about how far we would be from the supply opportunity? Can you give some sense on those front?
Kiran S. Divi
So I mean just to generalize because you, you spoke about several segments. Okay. Capacity utilization. We are about 80%, 70 to 80% of capacity utilization right now depending on the month. And you know, sometimes we’re at 80, 85, sometimes we’re at 70. Depends on when the shipments would be happening. As of now for several of the products validations are taking place. I’m talking about CS right now where once the validations are done, we have to send it to our customer. They have to get their regulatory clearances with different countries. Once that is done, it will go into commercialization.
So we have a proper time frame from them as and when commercialization would take place based on which we will start either creating capacity or emptying some of the capacity in unit one or unit two and sending it to. Sending the pre chemistry products to Kakinara so that we can use the existing GMP facility.
Surya Narayan
Sure. This last point from my side relating to this India, you FTA what we have seen any opportunity that you identify out of that in the if not immediately in the medium term because anyway Europe is our biggest trade partner.
Kiran S. Divi
It’s too early for us to comment on that. It just happened recently. Right?
Surya Narayan
Sure. Okay. Yeah. Thank you sir. Wish you all the best.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit your question to two per participant. If you have a follow up question, you may rejoin the queue. The next question is from the line of Tushar Marandhane from Motila Loswal Financial Services. Please go ahead.
Tushar Manudhane
Yeah, thanks for the opportunity. So with respect to a comment in your opening remarks about few molecules going to commercial volumes over next one year within CS segment. While not, you know, getting into product detail or customer detail, but broadly to understand whether here the is it more like the inventory buildup by the innovator given that there is certainty on launch, given that is what the product approval or about to get the product approval. If you could, you know, throw some light on this. That’s my first question.
Kiran S. Divi
So most what I can, I will, I will talk in the frame that I’m allowed to comment outside the confidentiality agreements I have with them. All I can say is once the validations are completed, and some are already completed, we are waiting for all regulatory approvals after which the volumes would be discussed for commercialization. So that is, that is, that is what we are expecting to happen in the next one year. Once we see it, we will start production going on. It is because in, in my call I did not mention that I’m building up stock.
Tushar Manudhane
No, I meant to clarify that. So effectively as a timeline, given the regulatory approvals to come through, so safe to assume that, you know, three to six months to get this process and then subsequently if the regulatory approval comes in place, then the volume discussion starts happening. So effectively, second half, FY27 has a broad timeline to understand the business prospects from these. Is that correct?
Kiran S. Divi
It depends, yes. So it depends on product to product. Right. Somebody already completed validations in this quarter. Some validations are going on, some we planned it for the next month. So based on whenever it is being completed, we will immediately supply all the data and the product to our customer. Our customer will in turn put it into his product, continue, continue his submissions. And once that is done, he will put it on stability and submit it to the regulatory agencies. So in the same process, while these are being done, we will start negotiating and planning for what how much quantities they would be requiring and friendly from when we should be starting commercial supplies to them.
Tushar Manudhane
Got it. And by now the commercial facilities per se would be more or less ready or about to get ready given the outlook provided by the customers.
Kiran S. Divi
So mostly most of our, like we explained several times in the past, our production blocks are multipurpose blocks. So we can quickly use a commercial volume as and when required in the existing capacity. Maybe they require a specific one equipment which is specifically required for their process. That is what we would be procuring for them. And otherwise most of the chemistry that we have, we can actually run it in our existing production blocks.
Tushar Manudhane
Got it. And just secondly on the hedging policy, if you could throw light like how much of the business exposure we hedge or we don’t hedge any of the. Exports.
Nilima Prasad Divi
We are not hedging, we are evaluating at this point based on the overall scenario in the market.
Tushar Manudhane
That’s interesting. So depreciation is running in more frivolous and this lastly, if I may on the API side, as I see, business has been largely stable. If I correct me if I’m wrong, but we have introduced fewer molecules as well over the recent past. But we have seen very limited growth on the generic side. So while the raw materials are now stable, I presume and as you highlighted, the pricing are also relatively competitive enough. So what is stopping us from the growth in the generic space?
Nilima Prasad Divi
See the generic space, the pricing pressures are still continuing. We haven’t mentioned that the pricing have eased. We did mention that the pricing pressures are still continuing. But if we look at generics, we need to see one is the value and another is the volume. As a volume we have had a good growth, but it’s just that because of the pricing pressures, value wise, it doesn’t reflect in that manner.
Tushar Manudhane
Thanks a lot for this.
operator
Thank you. The next question is from the line of Kunal Tamesha from Macquarie. Please go ahead.
Kunal Dhamesha
Hi, thank you for the opportunity. The first one on the gross margin. So there was a sharp improvement on both year on year as well as qoq basis and Quadra 3. If you could highlight the drivers of this improvement, that would be helpful.
Nilima Prasad Divi
I would say it’s mainly based on the product mix. As you can see the CS which has improved in the nine month period as compared to the previous nine months. So it’s mainly to do with the product mix rather than anything else.
Kunal Dhamesha
Product mix remains like the CS and generic remains almost same. Right? 55, 45. So on a quarter on quarter, what is driving this improvement beyond let’s say forex INR depreciation against some of the currencies, has there been significant benefit coming from the Kafkinada unit, the backward integration that we are doing?
Nilima Prasad Divi
So I would actually say this as we always said that, you know, there is always product lumpiness. There are some products which would have higher margins, some products the lower margin. It’s just that we would prefer you looking at full year growth rather than quarter on quarter because certain shipments would happen in certain quarters and wouldn’t happen in certain quarters. So you need to look more from a nine month period point of view rather than Q3 to Q2 point of view.
Kunal Dhamesha
Sure. And one for Tiran, sir. The molecules that we are believing would get commercialized over the next one year, what proportion of these molecules would be already approved for the innovators and they would be adding us as an additional source? And what proportion of the molecule would get first time approval from the regulatory agency?
Kiran S. Divi
I’m sorry, I cannot Answer this question. Because we are born by cda, I cannot disclose their plans and you know at what stages any of our customers are.
Kunal Dhamesha
But sir, at an aggregate level you can share, right? I’m not asking customer by customer, we don’t even know the total number of molecules on the sample for the proportion, whatever that number of molecules are.
Kiran S. Divi
So I. Okay, at an aggregate level I can tell you that the WWYSS works in three segments. One innovator, when they are developing their molecule in phase three, phase two and then up to launch, we bring the product to launch and support them. Number two, we also work with customers as their secondary source. Once their primary source is in house, we work on the secondary source and then support them throughout the life cycle. The third phase is called late life cycle where the customer during the last five, six years would come to us and then we would work with them in an efficient process where we would support them in managing their late life cycle and post patent expiry where it would go on and they would have a healthy share for a longer period of time.
So these are the three phases where we work most of the molecules, what we manufacture fall in the three phases.
Kunal Dhamesha
So let’s say you know the molecules in the next one year where this major majority of them would fall in of the three, three.
Kiran S. Divi
These three buckets, that is I would say yes.
Kunal Dhamesha
Like which bucket would have the highest share for the, for the molecules going commercial, getting commercialized in the next one year?
Kiran S. Divi
I’m See, I told you that there are three molecules. If I tell you, tell you the ratio, even the innovator would understand, right? I have to be coy. If they were like 10 12, I could easily say a ratio I gave you a problem. I think that’s fair enough.
Kunal Dhamesha
Okay. And lastly, one clarity on the forex gain one is I missed the number for this quarter and second, in which. Line item does it get included?
Nilima Prasad Divi
It gets included in the other income and for the quarter it is about 19 crores.
Kunal Dhamesha
Thank you and all the best.
Nilima Prasad Divi
Thank you.
operator
Thank you. The next question is from the lion of Neha Manpuria from BofA. Please go ahead.
Neha Manpuria
Yeah, thanks for taking my question. My first question is on the dedicated capex that we had announced in 2024 when should we expect, you know, commissioning of that capacity and probably inspections or whatever regulatory approvals are required. When would that timeline be? Would it be in the next six months or could it take slightly longer?
Kiran S. Divi
So right now investments have taken place and they’re still going on on the capex like I have explained to you on the CS projects mostly by the end, by 2027 we should start seeing commercialization post our customers, you know, they start approving the product.
Neha Manpuria
Okay, this is for all three dedicated CapEx or the first one that you’re mentioning?
Kiran S. Divi
All three dedicated CapEx.
Neha Manpuria
All right, that is helpful. Thank you so much. And my second comment, Neeliver, in your opening comments you mentioned about China’s withdrawal of export rebates putting pressure on certain generic APIs. Could you provide us some color in terms of what we are seeing here? What percentage of our portfolio is getting impacted because of these rebates being moved? I mean pricing pressures because of these rebates being, you know, removed.
Nilima Prasad Divi
I didn’t mention that in with respect to the APIs, I said with respect to procurement of materials. So the withdrawal of export tax rebate has taken place and will be from effect from April 1. We are wary of the situation that’s there. But we are also like from the last many years we’ve been trying to diversify as much as possible from China and we have been very consistently trying to diversify our procurement portfolio and improve also the domestic supplier base to make sure one, it is made in India and number two, to make sure that they there is just in time kind of approach for material supply to a point where as a quantity wise we have increased our domestic supplier base to 78% of the procurement.
So we are in a better space. But we are still working on how do we make sure this doesn’t affect us as much as it is looking to the rest of the industry.
Neha Manpuria
And you don’t think this would also benefit us on the generic side of the business where we have China as a competitor? Because I would assume their competitive, competitiveness also goes down. Right. Because of these, we are seeing this.
Nilima Prasad Divi
More from chemicals and the raw material point of view. There are some exceptions that they have given and that happens to be more from API and the end product. We are seeing a few of them being exempted but because most of the basic chemicals that are used in the pharma industry are also used in the agrochemical industry. So that’s where we see most of the effect coming from. But whereas intermediates and final APIs we don’t see that much of an effect.
Neha Manpuria
All right, and just a follow up question on the unit three, you know, the backward integration strategy that we have talked about, you know, in the past and even in this call, you know, how should I be, you know, how should we quantify that? I mean, is There a utilization level that Unit 3 is, that is benefiting in our numbers. Is there a way for us to quantify it? And once unit three gets approved, let’s say for, you know, moving to API, does that backward integration benefit go away over the course of, let’s say the next few years? How should I understand the Transition of Unit 3 from backward integration to more commercial products?
Kiran S. Divi
So if I could explain this better, Unit one and unit two in the past were making their own pre chemistry and backward integrated raw materials. And once unit two, unit three started, phase wise, we have been emptying unit one and two as and when there is demand where the blocks get empty. And we are using them for all the new projects by modifying them. So whether you take the existing CS projects that are coming in, new CS projects coming in, they are going into already existing GMB facilities of unit one and two, whereby we are emptying their capacity, moving them to unit two and we are starting production over there while we are revamping and redeveloping these blocks.
So to quantify things that Unit 3 is just making backward integrated work. It’s actually it is giving us a lot of support both for unit one and unit two. That being said, we already started qualifying certain intermediates which once it gets qualified, it will be approved by FDA over time, maybe in the next 12 years. And then in the meantime, if unit one and unit two are full of capacity, we will then move to unit three.
Neha Manpuria
Understood? That is helpful. Thank you so much.
operator
Thank you. Ladies and gentlemen, we would request you to please limit your questions to two per participant. The next question is from the line of damiantik area from hsbc. Please go ahead.
Damayanti Kerai
My first question is actually clarity on your dedicated facility. So here you are awaiting for your clients to get the approval before you can start the commercial supplies. So just to understand, you just need like you just need go ahead from the clients to start supply or these. Facilities also need to undergo some sort of GMP inspection.
Kiran S. Divi
So once the client, I mean this is something hard to say, right? Because we have just been inspected in the last one year at both the facilities. So will the agencies at different agencies look at it as okay, they have seen us once, they would go ahead or would they call it for a pre inspection saying okay, product specific inspection, they want to come. This is hard for us to say. But what we can say is once our customer file, it would either trigger an inspection or the agencies will look at it as okay, we have just seen the facility.
So let it go through.
Damayanti Kerai
Okay, so it will be more product specific or agency specific outcome?
Kiran S. Divi
I won’t say agency specific because you know the branded customers, they sell everywhere globally. So it is. We cannot say specific to a country. All the agencies would get involved at this point. And it also depends on the regions that decide to supply the product manufacture from our site.
Damayanti Kerai
Okay, sure. My second question is actually on your capex plan for coming years. So as of now your unit 3 is working very well for you in terms of providing the backward integration support to unit one and two. But as, as you discussed like you are seeing a lot of client interest, etc, the RFPs have gone up, the client visits have gone up, etc. So do you have any plan to start the second stage of Kakinara? And if yes, what will be the time frame?
Nilima Prasad Divi
Currently you have seen so far unique three phase one expansion plan. So right now we are considering to look at phase two expansion plan at Kakinada with four production blocks. They are still under evaluation and decision making. So as and when they are finalized and on the paper, we will let you know
Damayanti Kerai
It’s under evaluation as of now.
Nilima Prasad Divi
Yes.
Damayanti Kerai
Okay. Yeah. Okay.
operator
Thank you.
Damayanti Kerai
I’ll get back.
operator
Thank you. The next question is from the line of Viveka Kraval from Citigroup. Please go ahead.
Vivek Agrawal
Yeah, thanks for the opportunity. So Kian sir, you highlighted that you have completed construction of a dedicated building block for peptides that include various SPPS reactors. Just want to understand, will that be good enough to cater the customer demand for next four or five years? Or is there any possibility that you may need to expand the capacities? Actually, I just want to understand how the trajectory may look like. Thank you.
Kiran S. Divi
So. Like. In my opening remarks, we are working with customers on several projects at various phases including. Environment. There is a lot of disturbance. Please.
operator
Hello, May we request you to please mute your line when management is answering the question?
Vivek Agrawal
Yeah, sure.
operator
Thank you. So you may please go ahead.
Kiran S. Divi
So like I explained you, there are we have several projects from several customers where we are working on the different phases of clinical trials and lot of pilot work is also been going on. So as and when we have demand, we will keep increasing capacity or building new blocks whenever the demand and decision arises. For this customer, what we have dedicated, it is based on what is required and his designs are. I’m not at any other liberty to discuss on that.
Vivek Agrawal
Perfect. But just one more clarification. Is this like an injectable product or the oral peptide product that you’re working for?
Kiran S. Divi
I’m sorry I cannot discuss this.
Vivek Agrawal
No problem. Just one more question. As you have talked about that in next one year there are multiple custom synthesis parts that may get commercialized. Just want to understand how these products are going to have impact on the company’s overall margin trajectory as well as the profitability. So do you see with these products coming on the floor there is a substantial improvement in profitability compared to the existing business or it will not have any major difference. Thank you.
Nilima Prasad Divi
I would say that’s all we hope for. As our managing director would say, the sky is the limit for you to dream.
Vivek Agrawal
Thank you. I have more questions. We’ll join back. Thank you.
operator
Thank you. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead.
Shyam Srinivasan
Yeah, hi, good afternoon. Thank you for taking my question. Just on the growth outlook, right. I think you called out at 8.5% constant currency growth. I don’t remember but maybe you Talked about a 10% kind of growth maybe in constant currency terms. So just want to understand given that one of our key products, top products probably which is in late life cycle bucket probably is going more generic this year. How should we look at like next 12 months, maybe even fiscal 27? Are there enough other things in the pipeline for us to mitigate? Maybe if there is the generalization of this product.
Nilima Prasad Divi
BV’s have been in CS since 2000 and it’s not that you know RCS is just one product or two products. It’s a vast basket. And products do we do start in the patent phase and as Dr. Kiranzi has explained at multiple stages of patent and they do go under expiry and we do have other products that keep coming in. So it’s just an ongoing process for us.
Kunal Dhamesha
Helpful. So you don’t foresee any like dramatic change in how growth is.
Kiran S. Divi
To be? Yes, we do not see any for we do not foresee any disruption because and it’s in line with what our, our double digit growth that we keep talking about. What Neelma is trying to explain is as we have several products in phase two and phase three. So you know the same customer would have a basket where one of his product is coming off patent, where we’re doing a late life cycle management. He would also have a product available with us which is almost ready for launch. So we always have a nice decent balance of equilibrium while our growth, growth trajectory is actually happening at the double digit.
Kunal Dhamesha
Yeah, that’s very helpful. The second question on generics, while you talked about volume performance value, performance has been subdued and just going back to the point on this, China tax rebates, export tax rebates being reduced and you know they’re clearly trying to push towards reducing over competition oversupply. Should we down the road this year see generic pricing actually improve on a generic API? Is there some early signs that, you know, even that part of the business which has seen subdued growth, value growth can also improve?
Kiran S. Divi
This is too early for us to say that because right now they’re talking about it. We have to see how China will react towards it. And the global political situation and, and global economic situation are quite different country to country. And so you know, based on this we have to see how the generic market will pan out volume wise and customer wise. You know our customers have been with us. We have not lost any volume actually we have increased volume in generics and we are having a healthy share of market share in several countries. So hope I’m quite wishful that this year correct should take place at some point.
Kunal Dhamesha
And just a data keeping question or just a comment clarification, when you meant three commercial molecules, are they similar to.
Damayanti Kerai
The three dedicated projects we have announced or.
Kunal Dhamesha
This is different.
Kiran S. Divi
They’re the same. The, the three molecules, whatever we have, we have informed Sebi on the investment and the three molecules in CS that are going to be which are validated and going through approvals are the same molecules right now.
Kunal Dhamesha
Thank you. Thank you. All the best.
operator
Thank you. The next question is from the line of Ankush Mahajan from Sanctum. Please go ahead.
Damayanti Kerai
Sir. My question is already answered. Thank you sir.
operator
Thank you. The next question is from the line of Girish Bakru from Orbimed. Please go ahead.
Girish Bakhru
Yeah, thanks. Kiran, just alluding to your opening comments on process automation and using tech to increase efficiency. Can you elaborate on that bit more in peptides? Are you talking about continuous feed or what are you. Exactly.
Kiran S. Divi
So we’re talking about there are new technologies of symmetry, right? You know there is. We are talking about operational efficiencies through this mechanochemistry. There is also electrochemistry that come into play where you use least amount of energy and get the fractional reaction that will happen on a continuous phase. So we are looking at those technologies and we are commercializing them as we go forward. Now that being said, we are also looking at automation whereby our GMP requirements become more stabilized and easy because complex operations are involved. You know, like azide chemistry where human intervention minimum is as good and much better in case of safety and sustainability.
Girish Bakhru
And you know Q1 you had talked about even doing resins on your own. Are you investing in that technology and into reduce cogs for peptides given that is a significant portion, almost 40%. Can you talk on that side?
Kiran S. Divi
I believe I said that we are working on resines at this point. But you know, we are still at the R and D phase at this point on that. It’s too early for us to.
Girish Bakhru
Okay, no, I also my second question actually is related to this because there’s so much discussion among innovators to change GLP1 manufacturing already to reduce the cost. I mean There are some CDMOs even increasing reactor size. We are talking about, you know, mix of LPPs versus SPC SPPs changing. Are you involved in that kind of discussion with any customer that you can change the process and file with a different process, a product which is already commercialized?
Kiran S. Divi
It’s hard for me to comment on what you asked, but what I can say is we’re actively involved in manufacturing fragments for several MNCs. We’re also involved in their new technologies, whatever they’re looking at and we’re actively engaged with them at various phases because we are also the support system going forward both at LPPs and at SPPs, I hope.
Girish Bakhru
Yeah, yeah. Thank you.
operator
Thank you. The next question is from the line of Madhav from Fidelity. Please go ahead.
Madhav Marda
Hi, good afternoon. Thank you so much for your attention. Just wanted to understand once again the three dedicated CS projects. What are the timelines for commercializing them? I heard 2027. Could you give a little bit more clarity? Like is IT calendar year 27 or Q4 FY27 for the three projects.
Kiran S. Divi
We are assuming depending on all regulatory approvals happening on time. Somewhere in Q3, Q4 of 2027 is when the commercial volumes will start moving. So when I.
Madhav Marda
Calendar year.
Kiran S. Divi
Yes. Calendar area.
Madhav Marda
Calendar 27. Okay, got it. And so my second clarification was in the peptides part of the business. I think you’ve spoken about, you know, as doing fair bit of work for the protected amino acids. Like if you think from the perspective over the next three to five years, are we going to be focusing more on the protected amino acids or do we see us supplying fragments as well for commercialized peptide products? Like what is sort of the sort of bigger focus area for us?
Kiran S. Divi
Okay, so just to give you a history about babies, babies from the year 2000, early 2005, early 2006 has been heavily involved in protection protected amino acids. We were manufacturing for one of the multinational on a specific project and then over the period of time the project phased out and then we had shelf most of the protected amino acids that we have developed in multiple tons in the last five years. Several of our customers called us and started asking us to start producing protected amino acids. This is where we again opened our shelves and restarted manufacturing initially a few hundred kilos for their validations.
Then we have gone into tens of tons. Now we are going into multiple tens of tons for individual amino acids. And this will continue on because you know today you are talking about GLP1. S peptide chemistry is also going into pseudosis, into anti inflammatory cardiac drugs, into other therapeutic categories itself. It’s not only that you’re working on GLP1 and then you’re done. So there are other categories we are working in in phase one, Phase two, pseudosis is a big market right now and we can see going on other opportunities. That being said, we have been producing now in larger volumes and we will continue to produce protected amino acids and supplying it to several of the fragment manufacturers.
Along with that, we will be using our own protected amino acids for our own fragments which we are producing and supplying to the innovators. And as and when it commercializes our intake of our own peptide, protected amino acids will also increase.
Madhav Marda
So just a clarification, the way to understand is currently we have approved protective amino acids going to fragment manufacturers which is an ongoing supply or will be ongoing supply for the fragment supplies. We’re still somewhat in the validation phases and if that comes through for some of these newer products, that’s when we see the ramp up. Is that how we should do it?
Kiran S. Divi
That is a fair way to look at it.
Madhav Marda
Okay, thank you.
operator
Thank you. The next question is from the line of Abdulkadir Paranwala from ICIC Securities. Please go ahead.
operator
I’m sorry to interrupt you, Mr. Puranwala. We are unable to hear you clearly, sir. So your voice is breaking. We are unable to hear you, Mr. Puranwara. We are unable to hear you. We would request you to please check your connection and rejoin the queue. We’ll move to the next question is which is from the line of Harshit Dodds from Diamond Asia Capital. Please go ahead.
Harshit Dhoot
Thanks a lot for the opportunity, sir. And congratulations on the good set of numbers. A couple of questions from my side. A gross Asset turnover ration FY25 was 1.19 and we are entering we actually dedicated Capex and with the revenue visibility from these 3 CapEx and the pipeline in the CS segment, can we expect it going back to the 1.5 to 1.6 kind of a range in next 4, 5 years?
Nilima Prasad Divi
Can you slow down the speed of your question and after the end.
Harshit Dhoot
Yeah, yeah, sorry. So my question was that Ma’, am our gross asset to turnover ratio was 1.2 in FY25 and with the visibility of the revenues from the dedicated CapEx and multiple products in the pipeline in the segment can it go back to the historical high level of 1.5 to 1.8 level in next 4, 5 years? How should we understand the going forward the revenue trajectory?
Nilima Prasad Divi
So based on the forward looking statements and a few clarifications that Dr. Kirandevi has provided we can say that’s what we are aiming at and that’s what we are trying to go towards.
Harshit Dhoot
Okay, thanks. And second ma’, am, we have incurred CapEx of around 1500 crores in first half of FY26 while our guidance was to do CapEx of 2000 crores in FY26. So what is the targeted CapEx for the FY26 and if it’s possible can you give also the hint for next couple of years on the CAPEX part?
Nilima Prasad Divi
So we did intimate that we are doing a CAPEX of nine months course over the to SEBI in the last month and we are going through quite a few designs and phases at unit 1 and unit 3. Mainly at unit 3. So as and when we come up with the futuristic outlook of where the capex is going to be heavily invested we will come out with a steady intimation about the same.
Harshit Dhoot
Okay, but what can be the number for FY26? Ma’, am.
Nilima Prasad Divi
I would say it would be on like if you exclude the custom census project which is already being declared to the SEBI which is for that particular specific product. I would say we would prefer looking at the historical numbers and the rate being approximately the same.
Harshit Dhoot
Okay ma’, am, thanks a lot. Thank you.
operator
Thank you. The next question is from the line of Dhaval code from Jeffries. Please go ahead.
Alok Dalal
Hi sir, I wanted to know you know the current capacities that we are putting up. Where are these peptide capacities? Are they inclined more towards SPPS or LPPs? And secondly currently based on whatever visibility talks we have with our partner what is the longest chain of peptide that we are likely to manufacture on a meaningful size and scale? And if the length of chain increases let’s say from 10amino acid they ask us to manufacture 20. Does it require meaningful regulatory approval, validation and is there any lag time or is it going to be much shorter to turn around and supply them?
Kiran S. Divi
So I’ll answer your question point by point. So the first point you asked me was we have Several commercial scale SPPSs and LPPSs available with us where we are doing both pilot scale studies and also commercial studies based on whatever the innovator has given has his requirement with us. In case of commercial scale where we have a dedicated large facility with multiple SPPs is of large volume, this is dedicated based on his process and his requirement. Apart from this, as and when the customers either through LPPs or FPPs require the product to be manufactured either 10 MER, 12 MER, 14 MER, 18 MUR, it doesn’t matter.
It’s not complicated. Okay, we will manufacture it based on the technology he has provided because we’re only manufacturing fragments for innovators. They are not in the generic business. So as and when they give us a technology we will manufacture for them based on their regulatory requirements. So it is not our call on what regulatory requirements or what are the regulatory standards. It is there they would decide because it depends on where the fragment will join in. The peptide is it a 40 chain amino acid, 30 chain mnacid, 39 chain amino acid? I do not know.
They would give it to me and they would say okay, the fourth chain would be joining at this time. So this might be a GMP method. This may not. It is their call so it is not for me to comment on that. I hope I answered your question.
operator
Thank you ladies and gentlemen. That was the last question for today. I now hand the conference over to Mrs. Satish Chaudhary for closing comments.
Satish Choudhury
Thank you all for joining us today for the earnings call of Divis Laboratories limited In case you need any further clarification, please reach out to our investor relations. Thank you.
operator
Thank you on behalf of Divis Laboratories Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines.