Divi’s Laboratories Ltd (NSE: DIVISLAB) Q4 2025 Earnings Call dated May. 17, 2025
Corporate Participants:
Satish Choudhury — Company Secretary & Compliance Officer
Kiran S. Divi — Chief Executive Officer
Nilima Prasad Divi — Whole-Time Director
Analysts:
Surya Narayan Patra — Analyst
Neha Manpuria — Analyst
Kunal Dhamesha — Analyst
Shyam Srinivasan — Analyst
Amay Chalke — Analyst
Abdul Kader Puranwala — Analyst
Bino Pathiparampil — Analyst
Nitin Agarwal — Analyst
Lakshmi Narayan — Analyst
Gaurav Kedia — Analyst
Nikhil Upadhyay — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the earnings conference call of Divi’s Laboratories Limited for Q4 FY 2025. 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. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. M. Satish Choudhury. Thank you. And over to you sir.
Satish Choudhury — Company Secretary & Compliance Officer
Good afternoon to all of you. I am M. Satish Choudhury, Company Secretary and Chief Investor Relations Officer of Divi’s Laboratories Limited. I welcome you all to the earnings call of the company for the quarter and year ended 31st March 2025. From Divi’s labs, we have with us today Dr. Kiran S. Devi, Whole Time Director and Chief Executive Officer; Ms. Nilima Prasad Divi, Whole Time Director Commercial; Mr. L. Kishore Babu, Chief Financial Officer; and Mr. Venkatesa Perumallu, General Manager, Finance and Accounts.
During the day, our board has approved audited financial results for the quarter and year ended March 31st 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 note that the audio of the conference call is the copyright material of Divi’s Laboratories Limited and cannot be copied, rebroadcasted or attributed in press or media without specific and written consent.
Let me draw your attention to the fact that, on this call our discussions will include certain forward-looking statements which are predictions, projections or other estimates about future events. These estimates reflect management’s current expectations of 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. Divi’s Labs 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 — Chief Executive Officer
Good afternoon everyone, and welcome to Divi Laboratories Q4 FY 2025 earning call. Thank you all for joining us today. I hope you and your families are safe and in good health. As we convene to review our fourth quarter and full EFM financial performance, I’d like to take a few moments to reflect on our broader operational progress and strategic initiatives as we wrap up fiscal year 2025. This year has been marked by significant external volatility, geopolitical uncertainties, persistent global supply chain constraints and continued pricing pressures, particularly in our generics segment due to heightened competition.
These challenges tested our resilience and demanded nimbleness in how we operate. I am proud to share that our teams across the globe grows to the occasion by implementing targeted pricing strategies, process optimization measures and enhancing our responsiveness to market dynamics. Hence, we were able to ensure seamless and timely delivery of product to our customers without ever compromising on quality. This operational discipline has enabled us to complete FY25 stronger, more agile and better prepared for the future.
Let me now walk you through the key performance of our key business verticals, starting with our generic business. While pricing headwinds remain a persistent challenge, we have successfully maintained stable volumes in all our core products. The competitive intensity in the market continues to be high. However, Divi sustained its leadership position by constantly investing in process innovation, operational efficiency and long term capability and capacity building. These efforts reinforce our position as a dominant player in the industry.
Turning to our custom synthesis segment, we are witnessing strong and sustained momentum in this business. Customer’s engagement level remain high with a healthy uptake in RFPs and regular site visits reinforcing our stature as a partner of choice in the CDMO space. A significant recent highlight was the signing of a long term manufacturing and supply agreement for an advanced intermediate with a leading global pharmaceutical company. This partnership not only strengthens our presence in custom synthesis space but also opens new avenues for our innovation led growth.
Coming to our Peptide Business. Our peptide business is gaining significant traction as a global demand for novel peptide based therapies including GLP-1s, GIPs and GLP-2 analogs continue to accelerate. To address this rising demand, we have made strategic investment in both solid phase and liquid phase synthesis capabilities. These investments will be instrumental in expanding our offerings and sustaining our competitive edge in this rapidly evolving therapeutic area.
Our progress in contrast media segment remains steady and encouraging. We continue to invest in expanding our capacity and capabilities in this high growth market, as we work towards becoming a leading player in this space. On the manufacturing front, I’m pleased to share that construction and commissioning activity at our Unit 3 facility near Kakinada are progressing as per schedule. Phased production has already commenced supporting our backward integration strategy and enhancing our capability to manage input costs effectively.
In parallel, we continue to invest in next generation technologies such as continuous flow chemistry and biocatalysis, both which are integral to our strategy for sustainable and scalable small molecule manufacturing. Beyond our business operational achievements, we remain deeply committed to create long term value for our communities we serve. Our Corporate Social Responsibility initiative this quarter continued to focus on core areas of education, health care and rural empowerment.
I am proud to share that these efforts have positively impacted over 1.3 million lives this year alone. Truly a statement to our belief that inclusive growth is the foundation of sustainable success. In conclusion, this quarter underscores our continued focus on strengthening our fundamentals through capacity expansion, technological innovation and proactive risk management. Despite the complex global environment, our integrated efforts across generic custom synthesis peptides and emerging growth areas, supported by resilient procurement and logistical strategies, placed us in a strong position to capitalize on future opportunities and enhance our competitiveness in global markets. Thank you once again for your time and continued support. I will now hand over the call to Ms. Nilima Prasad Divi, who will walk you through the financial highlights for Q4 ’25 and provide an outlook for the full year ended March 31st, 2025. Thank you.
Nilima Prasad Divi — Whole-Time Director
Good afternoon, everyone and welcome to the Divi’s Laboratories Q4 FY25 earnings call. It’s a pleasure to connect with you today and I appreciate you taking the time to join us. I hope you and your families are in good health and high spirits. Before we dive into the financial performance for the year, I would like to begin with a detailed update on our supply chain and logistics operations. Areas that have played a critical role in ensuring business continuity and customer satisfaction in a volatile global environment.
Let me start with the procurement and raw material sourcing landscape. This quarter, we witnessed relative stability in raw material pricing, which is an encouraging sign given the fluctuations seen in the previous quarters. Our multi-source procurement strategy, spanning suppliers from across the US, European Union, Middle east and Asia while promoting domestic sources, has continued to serve us well, ensuring consistent availability of key input and insulating us from regional disruptions.
This geographical diversification remains a cornerstone of our supply resilience. However, while pricing remains stable, global transit times were notably impacted by persistent disruptions in maritime routes. Specifically, the security situation in the Red Sea has necessitated widespread rerouting of cargo vessels around the Cape of Good Hope in South Africa. This alternate route has extended lead times for shipments from both the US and Europe by approximately two to three weeks, creating ripple effect across planning, production and cost structures.
In response, we have taken several proactive measures. Our teams have intensified inbound logistics planning, optimized safety stock levels and worked closely with suppliers to implement contingency sourcing models. These efforts are designed to mitigate delays and ensure continuity of raw material inflows, thereby minimizing any operational impact. Looking ahead, we expect this proactive approach combined with continued price and supply stability to keep our procurement environment favorable over the next two quarters.
Shifting Focus to Outbound Logistics. The Red Sea disruptions have not only affected inbound shipments, but have also significantly influenced our global delivery timelines. Vessel diversions and increased congestion at trans-shipment ports have resulted in extended shipping times and elevated freight costs, especially to key markets such as European Union, United States and Latin America. To tackle these challenges, our logistics and supply chain teams have adopted a proactive customer centric approach.
We are working in close coordination with reliable freight forwarders, securing container space well in advance and maintaining regular transparent communication with customers through timely sea trade updates. This enables our partners to plan their inventory and production schedules with greater confidence despite prevailing global uncertainties. We have also enhanced our tracking capabilities, allowing us to monitor each shipment closely and respond swiftly to any unforeseen disruptions.
This end to end visibility has significantly improved our service reliability and allowed us to maintain a high degree of fulfillment assurance across our markets. Looking ahead to the first quarter of FY 2026, we anticipate that sea freight rates will remain broadly stable. However, we do expect air freight charges to gradually normalize in alignment with the revised transit expectations and improved route predictability.
Our logistics team will continue to monitor these trends closely and make tactical adjustments where necessary. In conclusion, despite an increasingly complex global trade environment, Divi’s Laboratories remains well positioned to navigate these challenges. Our continued emphasis on strategic sourcing, agile inventory management and reliable logistics execution ensures that we are able to support our customers efficiently without disruption while preserving operational agility and cost effectiveness.
I will now provide you with an overview of financial performance for the fourth quarter of financial year 2024-25 and the financial ended on 31st March 2025. We have achieved a consolidated total income of INR2,671 crores for the current quarter as against a consolidated total income of INR2,382 crores for the corresponding quarter of previous year. Profit before tax for the current quarter is INR864 crores as against a BBT of INR713 crores for the corresponding quarter of previous year.
Profit after tax for the quarter is INR662 crores as against a part of INR538 crores for the corresponding quarter of previous year. For the current quarter, we have a Forex gain of INR10 crores as against a forex loss of INR2 crores for the corresponding quarter of previous year. For the year 2024-’25, we have earned a consolidated total income of INR9712 crores as against INR8184 crores for the previous financial year.
PBT for the current financial year is INR2916 crores as against INR2163 crores for the previous financial year. PAT for the current financial year is INR2,191 crores as against INR1600 crores for the previous financial year. For the current financial year, we have a forex gain of INR48 crores against a gain of INR30 crores for the previous financial year. Material consumption remains at about 40% of the sales revenue for the current as well as the previous financial years.
Our constant currency growth for the current financial year has been at 18%, whereas it was negative 2% for the previous financial year. Export for the current financial year remains at about 88% of the total sales revenue. Export to Europe and US accounted to 73% of the total sales revenue for the current financial year and 70% of the total sales revenue for the previous financial year. Product mix for generics to custom census for current financial year is 46% and 54% respectively. Product mix for generics to custom census for current quarter is 49% and 51% respectively.
Our nutraceutical business amounted to INR781 crores for the current financial year and INR205 crores for quarter ended 31st March 2025. We have capitalized assets of INR560 crores during the current quarter of which assets capitalized for Kakinada project amounted to INR337 crores. We have capital work in progress of INR1022 crores as at 31st March 2025 of which Kakinada project accounts to INR562 crores. Total amount spent on Kakinada project including assets capitalized and advances given till 31st March 2025 is INR1497 crores. As of 31st March 2025, we have cash on books of INR3696 crores, receivables of INR2855 crores and inventory of INR3033 crores. Thank you.
Satish Choudhury — Company Secretary & Compliance Officer
Thank you, madam. With this, we would request the moderator to open the lines for Q&A.
Questions and Answers:
Operator
Thank you very much sir. We will now begin with the question and answer session. [Operator Instructions] The first question is from the line of Surya Narayan Patra from PhilipCapital India Private Limited. Please go ahead.
Surya Narayan Patra
Yeah. Thanks for the opportunity and congrats for the good set of numbers in the difficult time. My first question is on the growth number that we have witnessed on the generic business side. Interestingly, after kind of a two year period we are seeing a kind of a strong momentum in the generic business both sequentially as well as y-o-y. And similarly if I just comparatively see that even the margins also had seen a similar improvement.
The exit rate for the quarter is strongest in the last two year period. So how should we see this the generic growth, whether it has been driven by the price rise or what, and whether that has contributed to the overall margin scenario here.
Kiran S. Divi
As I have mentioned during my speech, right now the generic performance itself is at high competition level, whereby we have continuous pricing pressure in the generic side as market share continues, we are still a dominant player in the market and we continue to play that role in terms of new molecules that are being coming off patent as and when they come off patent, we will start producing them and slowly start building our share.
Surya Narayan Patra
Okay, and regards the margin scenario sir that we are seeing, the exit rate for the quarter in terms of the either gross margin or even the EBITDA margin, it is I think one of the strongest number over the last two year period. So how should one think going ahead or it is just a quarter specific product mix that is driving this number or how should one thing going ahead think about the margin scenario?
Nilima Prasad Divi
This is mainly to do with the product mix that we have and it would keep changing quarter on quarter. So, I would recommend like you know, looking at it on a yearly basis rather than just focusing on one quarter.
Surya Narayan Patra
Okay. Just last question from my side. Is that — see in the last one year period obviously we have seen a significant pricing trend in the RFQS for the CDMOs generally. Obviously that was supported by a potential implementation of the Biosecure Act China plus one and those kind of things. But now there is — those kind of things are now in the backstage. So any practical change in terms of your RFQs or the customer engagement, although that you have indicated there is a heightened engagement, that is still there.
But since we are completing the financial year, any commentary that you can provide for the next year in terms of your outlook or guidance or anything on that front?
Kiran S. Divi
Firstly, we have always been in the CS business in the custom census business right from the inception. It’s not something that — we started after China Plus One or the Biosecure act has started. Our business was there. We’ve been in this business even before anyone has ever been in it. So for us, RFQs, RFPs coming in on a continuous basis is always there. Okay.
With the Biosecure act or China Plus One, we are seeing a little more than what we have seen before and we have several products in the pipeline.
Some are being, going through R&D phases, some are in pilot scales right now. So it’s hard for us to put a finger on it because of confidentiality. But what I can say is, Divi’s very strong in their custom business as well as the generic side of the business.
Surya Narayan Patra
Sure, sir. Yeah. I have a couple more. I’ll come in the queue sir.
Operator
Thank you. The next question is from the line of Neha Manpuria from Bank of America. Please go ahead.
Neha Manpuria
Yeah. Thanks for taking my question. My first question, just understanding the gross margin expansion that we have seen. While I understand, you mentioned the product mix but has the backward integration, given the Kakinada just submissioned. Has the backward integration firm Kakinada started already helping gross margins or would that take time to reflect? And that’s something that we should build in going forward.
Kiran S. Divi
So Kakinada definitely, we started in January. The production and the backward integrated material has slowly come into the product. So we will see the benefits going in the future as phase one and slowly we will start constructing phase two, where we will add additional blocks. Definitely we will see benefits that’s coming in. But Kakinada more than — more than creating space or controlling our price.
The main reason of having Kakinada is for having continuous supply of our own raw materials and our critical starting materials. So, to avoid any disruption in supply for us to have continuous supply for our customers is why Kakinada also started apart from pricing and controlling our imputed profiles and several other factors.
Neha Manpuria
Understood. And if I was to think about Kakinada’s impact on earnings. Would it be fair to assume that it will take a couple of quarters for Kakinada to become like an EBITDA neutral summer cost versus the benefit from Kakinada? Would that be a right way to look at it?
Kiran S. Divi
I would rather instead of rather looking at Kakinada as a single unit because see the raw material, the starting material is producing, go straight into one of the units where GMP is being produced, methyl is being produced. So we have to look at the molecule as a whole. We cannot look at the molecule into separate units and then break it up. So as a whole, yes, there will be a benefit. I would look at it more as a company and then look at the molecule being manufactured at different areas.
Neha Manpuria
My second question is, just understanding our peptide capabilities, has it just wanting to know if we’ve expanded these capabilities to non-GLP-1 areas as well. And just an extended question on the capabilities. If I look at presents across other modalities, are we targeting ADCs or even nucleotides? Any updates that we can give on the capabilities that we are developing in terms of client interest on custom synthesis.
Kiran S. Divi
Could you just repeat your question again please?
Neha Manpuria
So first on peptides, do we have capabilities that extend outside of GLP? Are they extending even to non-GLP areas? And also, what about are we focusing on ADCs, oligonucleotides, what — when should we start seeing there? Are we — are the investments that we are making there based on client RFPs?
Kiran S. Divi
So we, I mean to answer about peptides, we are right now looking at peptides only for manufacturing for the innovators and looking at their pipelines and working with them. As you know, Divi’s is very strong in manufacturing their individual peptides and protected amino acids. And that is how we have entered, which we have entered about 18 years ago. And that’s why we are now entering into manufacturing fragments either by solid phase or by liquid phase.
And you know, I cannot comment more on these because I am bound by confidentiality. So I can only talk about that. We are working with several customers and at several phases right now. Divi’s has actively invested in both solid phase and liquid phase so that we can as and when required, we can support customer requirements. Coming to your ADCs and oligonucleotides is still in the preliminary phases right now. I cannot comment too much on those molecules.
Neha Manpuria
Got it. Thank you so much.
Operator
Thank you. The next question is from the line of Dr. Kunal Dhamesha from Macquarie. Please go ahead.
Kunal Dhamesha
Hi. Thank you for the opportunity. One more strategic question. Several of the large pharma company in US have announced large capital expenditure to kind of reshore the manufacturing. So how are you viewing this announcement in context of the overall with industry growth rate? And specifically do you think any read across for Divi’s since we kind of work with all these large pharma companies. And recently because of this, have you seen any change in conversations that you are having with this company?
Kiran S. Divi
So, as you know, Diivi’s is in both custom synthesis, custom also include peptides or if you look at variant contrast media generic. Any business related to custom synthesis is based on a long term contract. It is not like, we just jump in, make something and then we forget. So we have long term multi year contracts with structures in it and we are seeing new opportunities in the pipeline. We do not see any issues at this point, but if something arises, of course we will definitely know. As of now we don’t see anything.
Kunal Dhamesha
Sure. And second one on the GLP-1 portfolio that we have with multiple innovators, would you say that our portfolio would extend beyond peptide GLP-1s? We would have some non-peptide or maybe small molecule GLP-1s also in the portfolio?
Kiran S. Divi
Divi’s is very — like I told you in my presentation, Divi’s is working on GLP-1s, GIPs, GLP-2 analogs and on small molecules. And you know we are very active with different customers at different phases. They are at different phases in our development or in our advancement.
Kunal Dhamesha
And lastly, if I can just ask one more. On the Kakinada plant, I think we are more or less done through phase one. So one part is, how much we can scale here, how many phases we should expect. Whether it’s a three phase journey, five phase journey and in terms of whatever phase one that we have commercialized, what proportion of that is as percentage of total phase one capacity?
Kiran S. Divi
So Kakinada is a total of 500 acres. In 500 acres, we have occupied about phase one, we have used 200 acres and we have built production blocks which about seven of them which will help us in taking care of certain raw materials so that it helps us in our backward integration. Apart from this, it will also free some of our existing blocks in our Unit 1 and Unit 2. Thereby we can add certain molecules and manufacture GMP products.
While Kakinada goes through its own regulatory Phase. We still have 300 acres. Based on the requirement in the market and opportunities we see, we will expand. It can be either in two phases. Maybe it will be phase two and three or it will be in one phase. You may use the remaining three phase 300. Everything is based on the opportunities we have and when. For example, in a CS molecule will come to life and we need space immediately. Of course we have to invest and move forward.
Kunal Dhamesha
Sure. Thank you and all the best.
Operator
Thank you. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead.
Shyam Srinivasan
Yeah. Good afternoon. Thank you for taking my question. Just the first one on the announcement in April and also from last April. Right. Similar kind of amounts like INR700 crores odd. That was a long term supply agreement. This is again a long term supply agreement. Can we just compare in contrast, I don’t know whether you put out anything on the last year but this year was advanced intermediates.
So if you could help us. I know you’re not going to call out the names but just want to understand why not API in this one. So just to compare and contrast the type of announcement, these are the largest two announcements we have done. So just want to understand some qualitative color.
Kiran S. Divi
I mean that’s quite a difficult question because it’s — I’m bound by confidentiality so it becomes very — I mean both are related to CS projects. Yes. The recent one is an advanced intermediate. The one before all I can say is it is an active API.
Shyam Srinivasan
Helpful. Helpful. Kiran. So — and in your opening remarks you alluded to Project 2, the latest announcement to see it has opened new avenues of growth. Can you like double click?
Kiran S. Divi
Could you repeat your question again please?
Shyam Srinivasan
So Kiran, in your opening remarks, when you talked about the second announcement. You said that this has opened more revenues of growth on the innovation side. So what do you mean?
Kiran S. Divi
So within the peptide division or if you look at our existing new chemistry development, like continued flow chemistry, this is a new thing that several customers are looking at. And also on biocatalysis where we have been investing heavily and this is where most of the the innovation and new molecules are coming from. So that’s what I meant by new opportunities.
Shyam Srinivasan
Understood, thank you. Just the second question is on the financials. So if I look at full year fiscal ’25 versus ’24 EBITDA margins have gone from 29% to 32%. Gross margins have been flat. But the biggest delta has come from other expenses which is excluding wage I’m talking about which has come down by 250, 300 basis points. So Nilima, if you could explain like what is driving. And that’s been the case for the quarter as well. So just want to understand what are we doing right to keep other expenses actually in fact declining for the year. When we had like 18%, 19% growth.
Nilima Prasad Divi
Can you just repeat your question again? It was not pretty clear the voice.
Operator
Mr. Srinivasan, I would request you to use your handset sir. Your voice is muffled.
Shyam Srinivasan
Yeah, yeah, sure, sure. The question was on other expenses. Other expenses is a percentage of sales. Last year was 17% and this year was 14%. This is despite having 18% constant currency growth. So just want to understand what is driving this operating leverage.
Operator
I’m sorry ma’ am, you’re not audible.
Nilima Prasad Divi
Oh, I’m sorry, I was speaking on mute. So I would say the major drive behind it. It could be like, quite a few things. It’s not just one thing that has led to the like, the other expenses being the wages. It could be mainly from the point of view of your — the raw material expense machine. Yes, it could be from various expenses. It’s not just one expense that I could put my finger on. Did have higher repairs on the older plant and machinery. Considering some of the units are quite old, about three decades old.
And besides that there has been increase in freight and travel expenditures and as well as the environment management expenses.
Shyam Srinivasan
Sorry, costs have come down, not gone up. So, I’m just confused.
Nilima Prasad Divi
These are the ones that have made it. Made all the changes. That’s what I was trying to say.
Shyam Srinivasan
Understood. And lastly, sorry, but this is any guidance for the revenue and EBITDA for fiscal ’26? Thank you.
Nilima Prasad Divi
The revenue guidance, I would say, like — as I have said earlier, we would always look at double digit growth and we would always assume and our work would always be towards making sure the organization grows at a consistent space of double digit growth.
Shyam Srinivasan
Thank you. Thank you and all the best.
Operator
Thank you. [Operator Instructions] The next question is from the line of Amay from JM Financials. Please go ahead.
Amay Chalke
Yeah. Thank you for taking my question. Most of the questions are answered. So one question incremental question on GLP-1. We said that we are only working with innovators. So the next year which we generic opportunity in the semaglutide which is opening up. So are we not going to participate in that opportunity?
Kiran S. Divi
Number one, like I said, right. We are working with innovators on several phases. Whether as of now we are not looking at working with GLP-1s at the generic space.
Amay Chalke
And any rationale behind this need because we are bound by the contract with the innovator or you believe that it’s not lucrative enough to enter.
Kiran S. Divi
See of now, I’m bound by confidentiality. So it is whether I’m producing for innovator. I mean based on our knowledge, know how and everything, we believe we are best suited for now to work on innovative molecules in the GLP space.
Amay Chalke
Sure. And for the innovator space, is it possible for you to — because the products have been there in the market for a while now. So, is there any wallet share being committed to us by the customer or like how are we thinking about that?
Kiran S. Divi
So like I said, because we have long term supply agreements with several customers apart from the ones which are also in the market. You also have to understand there are several molecules in the pipeline at various phases, GLP-1s, GIP, GLP-2s in place, which are in various stages of development where we are active and we will see as and when opportunities grow. We have long term contracts in place and we will see how it forms out.
Amay Chalke
Sure. And the next question I have on the next year, we have given the double digit growth guidance. So within segments, do you expect API also to grow in double digit the generic segment?
Nilima Prasad Divi
I cannot comment on that. I would say the overall revenue of the organization would be approximately double digit growth.
Amay Chalke
Sure. Thank you so much. I will join the queue.
Operator
Thank you. We’ll take the next question from the line of Abdul Kader Puranwala from ICICI Securities. Please go ahead.
Abdul Kader Puranwala
Yeah. Hi. Thank you for the opportunity and congrats on a good set of numbers. So my first question is with regards to your investments on the new project. You talked about GLP-1, GLP and GLP-2 products. So in terms of whatever you have spent, in terms of your capacity addition, any color if you could provide to us, what is the investments done into the space so far?
Nilima Prasad Divi
Can you repeat the last part of your question?
Abdul Kader Puranwala
Yeah. My question was with regards to the capital investment which you would have done for your newer projects, which include GLP-1s and other opportunities.
Kiran S. Divi
We haven’t classified it as a particular investment towards GLP-1s because several of the equipment could be used both for the API or other custom products or GLP-1. So, we haven’t classified it in particular saying that this is only a GLP-1 based situation.
Abdul Kader Puranwala
Okay. And sir next one is on the two new projects which you have announced on the CS side. So any color on you know when the revenue generation would start from these plants. And secondly with the quantum of investment what you have done, any of this project could it be in line with what the opportunity you would have seen during the COVID time?
Kiran S. Divi
Firstly, this opportunity is not based on — this is a long term opportunity is what is how I would put it which are quite promising molecules. Number two, most of it is we completely depend on the regulatory approvals of our customer, once we produce our our batches, our commercial batches. So maybe by 2026 end or 2027 is when we will start — we hope to see commercialization of these projects.
Abdul Kader Puranwala
Understood. Thank you. I’ll get back in the queue.
Operator
Thank you. The next question is from the line of Bino Pathiparampil from Elara Capital. Please go ahead.
Bino Pathiparampil
Hi. Good afternoon. Most questions answered just one. What would be the capex for coming financial year?
Nilima Prasad Divi
It would be mainly the projects that have been announced this particular financial year would be the additional capex that we are.
Bino Pathiparampil
Sorry, so that is around 1400 if I get it correct plus some maintenance capex.
Nilima Prasad Divi
Yes. So it would be 1400 plus some maintenance capex. I mean so that would be the one that we would be looking forward to.
Bino Pathiparampil
Got it. Thank you very much.
Operator
Thank you. The next question is from the line of Nitin Agarwal from DAM Capital. Please go ahead.
Nitin Agarwal
Sir, thanks for taking my question. Sir, on the two long term contracts by when would be commercial impact of these two contracts likely to be visible?
Kiran S. Divi
Early ’27.
Nilima Prasad Divi
I think there would be around late 2026, early 2027. We would be seeing the impact of those but this is also subject to when the regulatory approvals would take place. It’s not just the capex that we need to look into but one is the capex but also when we start manufacturing we need to also get regulatory approvals. So that would take time as well.
Nitin Agarwal
Just to clarify this week calendar year ’26 that you’re talking about, right? 2026 end?
Kiran S. Divi
Yes. We’re talking about sometime in third quarter, end of 2026 or fourth quarter or January of 2027, around that time. Hopefully fall regulatory approvals come in place.
Nitin Agarwal
And secondly on Kakinada, how much incremental capex do we need to have we planned for the first phase?
Nilima Prasad Divi
Currently phase two we haven’t planned anything. We are still in the phase one and we are working on like based on the newer opportunities we are getting and how we are planning, we are still working on how to go about phase two. We haven’t started anything in phase two.
Nitin Agarwal
Since phase one we’ve spent almost 1497 so far. How much more do we — have we intend to spend in phase one?
Nilima Prasad Divi
About INR200 crores is what we are looking at phase one.
Nitin Agarwal
Thank you so much.
Operator
Thank you. The next question is from the line of Lakshmi Narayan from Tunga Investments. Please go ahead.
Lakshmi Narayan
Thank you. So what I understand is the success of our company is dependent on three actors. One is production, one is research and third is the client development or business development sales. Right. Now while on the first angle you had mentioned the capacity. Just want to understand in the last few years, how have you beefed up your research capabilities and also your front end sales capabilities? That’s my first question. My second question is that qualitatively how you think the next three years is going to be far better than the past three years.
And can you just help me understand what are the two or three things as investors we should look for and what gives you confidence that the next few years is going to be better than the last two years?
Nilima Prasad Divi
I’ll answer your second question first. I would not — we have always been a conservative organization. We have not been extremely competitive or extremely proactive in sharing our numbers or revenues or growth. So because we believe in being conservative in the way we project and we would want to deliver what we promised. So my stand on that would be, as I said earlier, we would be thinking about having a double digit growth for the next few years.
Now coming to your first question, we weren’t clear what the question is in the first place. So can you please repeat your question again?
Lakshmi Narayan
My question is that success for a company like us comes from three different parts in my view. One is the production capabilities, second is the research capabilities and third, your sales/clients mining capabilities. Right. While on the first one you outline kind of capital expenditure you have incurred in the last couple of years, just want to understand at least in the last two, three years, how have we enriched our research capabilities. Some kind of a quantitative or qualitative feedback would be helpful, which means that we have, we have increased our workforce and research or we have actually got into two or three new areas. That could be one way to think about it. And the last is from a client mining capability. How have we beefed up our — front end or so called front end workforce?
Kiran S. Divi
So coming to research and development, we have always been very proactive and yet being very, very smart in grabbing opportunities which has been one of our biggest trends. So I mean if you look at, if you ask what Divi’s has done in the last two, three years and for the years going forward, we have been very active in peptide chemistry. We have been very active in fragments. Then we have gone into solid phase peptide synthesis, liquid phase peptide synthesis.
Apart from this, we have gone into flow chemistry, biocatalysis. So we are constantly looking at opportunities and discoveries and innovations across the world, understanding what technologies are available and how it helps us in helping us in our own manufacturing by increasing our either our yields or going towards green chemistry or we’re looking at atom to atom efficiency. Looking at all these factors is one of Divi’s biggest strength.
Now, if you look at customer base, what have we done, our reputation as one of the top CDMO for being on-time delivery for someone who has supplied material with zero recalls and on time delivery and maintaining our commitment itself is, itself gives us a lot of credibility in the market whereby several customers approach us and we have continued business and continued molecules, which keep coming to us.
Lakshmi Narayan
Got it. Okay. And in terms of your sales or the mining team, how have you enriched that particular part?
Kiran S. Divi
I didn’t get your question. What were you trying to ask?
Lakshmi Narayan
What I understand is, we keep going deeper with our end client in terms of the research and trying to understand what are the products, what are the molecules they are coming out with. And so we are actually proactively looking at it. And so in that count, how have we increased our sales force or the client development activities qualitatively in the last two, three years?
Kiran S. Divi
So to answer this right, Divi’s has been in custom synthesis for the last — from the inception. It’s not that it’s something new. We started today where people, where I have to develop my BBA and then give them incentives and ask them how to move forward. Like I explained to you, our reputation is where we have been given opportunities with several of our existing and new customers. We worked with — we have already been working with several multinationals.
It’s not something today that I’m developing this story. I mean if you go back even 10 years or 15 years, our CS business was 50% of our total revenue. So, to answer this question, our teams are already in place. There’s nothing new about it.
Lakshmi Narayan
Got it. Okay. Thank you sir. Thank you for detailed answers.
Operator
Thank you. The next question is from the line of Gaurav T from Antique Stockbroking. Please go ahead.
Gaurav Kedia
Hi. Good Afternoon and congratulations to the team for every accomplishment. We understand the confidentiality nature of the custom synthesis business. We can’t talk about clients or products. But any insight that we can get in terms of the quantum of total order book contracted which is yet to be executed. Any insight on that?
Nilima Prasad Divi
I’m sorry, we cannot comment much about that particular kind of numbers.
Gaurav Kedia
Any insight on, how that contractor backlog has been growing over the last two, three years? I respect that you can’t disclose a number, but any growth trends historically.
Nilima Prasad Divi
See historically and as well as in the future, what we’ve seen so far has been a double digit growth year-on-year, be it generics or our revenue as a whole or custom census. So that’s something that we also expect to see in the future. It’s the double digit growth.
Gaurav Kedia
Okay. Just in terms of understanding the sales cycle from RSP to contracting in the customs business, how long can that take? And from contracting to revenue accretion start, typically what’s the timeline we can see? Some, some kind of insights on your sales cycle, please, if that’s possible.
Kiran S. Divi
So just to give a brief about it. Right. So when you get an RFP, it could be a phase one, phase two, phase three. So you don’t know which phase is the molecule first. So once you get an RFP, the time cycle of what the customer is expecting, then his regulatory approvals, then our regulatory approvals, whether the life cycle of the molecule is going to go through. So typically once you get an RFP, it could be anywhere that we have seen RFPs where we launched it and got it commercialized within one and a half to two years as an aggressive RFP to all the way we have seen an RFP which even took about six, seven years.
So it’s hard to comment because there’s not a fixed timeline. It completely depends on the nature of the molecule, the approvals from the regulatory bodies and how interested the agencies are in getting this product into the market. So there are several factors entangled into it. We are only a part of it, who only manufacture the active ingredient and then supply to innovators, who have to take it much more, much forward.
So, it’s a complete matrix. It’s very hard for me to say it goes in certain times, but what I can say is we have executed projects within two years time and there was also times where even some projects even took six to seven years.
Gaurav Kedia
Thank you. I’ll come back the queue. All the best for it.
Operator
Thank you. The next question is from the line of Nikhil from SIMPL. Please go ahead.
Nikhil Upadhyay
Hello, I have two questions. One is see in the — I hope I’m audible.
Operator
Yes sir, you’re clearly audible.
Nikhil Upadhyay
So, in the initial comment Neelima mentioned that there is still issues at the logistics side and it’s taking time and all. But if I look at our inventory buildup over last four years, since Molnupiravir’s sales, our inventory was held around INR3000 crore, INR2800 crore, INR3000 crore and this year we’ve hit the highest sales, but still our inventory is around INR3000 crore. So how should we see it? One way to look at it is that you see the RM environment or the material environment on the pricing side and availability side easing a lot which is why you are not building a larger inventory? How should we understand here?
Nilima Prasad Divi
See if you see the sales that are going up, but also our portfolio is increasing over a span of many products. And when — we are also maintaining the raw materials based on the entire product portfolio. And, if you are seeing from the time we are looking at Molnupiravir, from that time there has been some or the other crisis be with respect to COVID or be it with respect to China or be it with respect to the logistics, we have been constantly facing pressure with respect to various factors.
So based on the product mix, the kind of raw material that is that requires the attention, we’ve been stocking those kind of raw materials for the product mix we have.
Nikhil Upadhyay
Would it be right to say that now going forward as we clock our double digit revenue growth, this is the — like as a percentage of sale, this is the kind of inventory level we would like to keep. Because in initial year between ’23-’24, we hit almost 40%, 45% of inventory versus our sale, which today on our year ending sales is around 30%. So, is this like a normalization on the working capital side?
Nilima Prasad Divi
It’s difficult to comment on this since it’s difficult — I mean it is — I wouldn’t normalize it. I would say it would depend on the products that we are manufacturing. Whether it is a large molecule or is it a small molecule project or is it a combination of which particular use unit we are manufacturing it from and is the material available domestically? Are we developing new sources that are manufacturing locally within the country or are we forced to procure only from international sources.
It all depends on various aspects. But if you ask me what my wishful thinking is, I would love to maintain a lean inventory. I wouldn’t want to have luxury inventory stocks. I would definitely would want to have a lean inventory wherein I can implement more of just in time and have it just source what I’m manufacturing at that point in time.
Nikhil Upadhyay
Sure. Second question is, see if I look at our last 15 years and we’ve been doing the CSM business for almost 20, 25 years now and we have — we always had a good relationship with the top 20 pharma companies, but prior to COVID we never had dedicated blocks. All our plants used to manufacture all our products but since the time of Molnupiravir, we are now — this is like in a way saying this is like third or two molecules, which are — where we are going for dedicated blocks. So, what I’m trying to understand is what are the underlying guardrails on which we decide whether we will go for a dedicated block or not and is it a quantum of business size which we want to go for — like tomorrow if someone comes and says for a INR300 crores, INR400 crores kind of a top line even there we will go for a dedicated block. Just some idea if you can share what are your guardrails and what are your benchmarks on which you decide whether we go for a dedicated block or not?
Nilima Prasad Divi
I would say say that we did have dedicated blocks way back. If it is a product of large volume and where we are manufacturing throughout the year and we did have multipurpose blocks for products that are smaller volume we would make take advantage of the facility by doing campaign based production.
However, I don’t think we ever mentioned that we are setting up dedicated blocks for the expansion plan. We said we are going to invest a certain capex of certain value and but we have never mentioned that it’s a dedicated block.
Nikhil Upadhyay
Okay. So even for the two new molecules, the INR700 crores, INR800 crores capex we announced, these would all be multi purpose plants right. This is not a dedicated for any customer.
Nilima Prasad Divi
Since these products are mainly custom census projects, I am not at liberty to divulge on information. I would refrain from answering that question.
Nikhil Upadhyay
Sure. Thanks. I will come back in the queue.
Operator
Thank you. Ladies and gentlemen, we’ll take that as the last question for today. I would now like to hand the conference over to Mr. Satish Choudhury for closing comments. Thank you. And over to you sir.
Satish Choudhury
Thank you all for joining us today for the earnings call of Divi’s Laboratories limited. In case you need any further clarification, please reach out to our Investor Relation. Thank you.
Operator
Thank you members of the management. [Operator Closing Remarks]