Emcure Pharmaceuticals Ltd (NSE: EMCURE) Q4 2025 Earnings Call dated May. 22, 2025
Corporate Participants:
Unidentified Speaker
Piyush Nahar — Executive Vice President, Corporate Strategy and Development
Satish Ramanlal Mehta — Chief Executive Officer and Managing Director
Tajuddin Shaikh — Chief Financial Officer
Vikas Thapar — President, Corporate Development, Strategy and Finance
Samit Mehta — Whole-time Director
Analysts:
Unidentified Participant
Amlan Jyoti Das — Analyst
Alankar Garude — Analyst
Gagan Thareja — Analyst
Alok Dalal — Analyst
Keresh Bakru — Analyst
Parag Shah — Analyst
Dhaval — Analyst
Presentation:
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Ladies and gentlemen, good day and welcome to the MTR Pharmaceutical Limited Q4FY25 earnings conference call. As a reminder, all participant line will be in 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 please signal an operator by pressing start and zero on your touchdown phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Piyush Nahar, EVP Corporate Strategy and Development from MQR Pharmaceuticals Limited. Thank you. And over to you, sir.
Piyush Nahar — Executive Vice President, Corporate Strategy and Development
Thank you, Sejal. Good afternoon everyone. Earlier today we released our financials for the fourth quarter of fiscal 2025. Along with our press release, these are also posted on our website. We hope all of you had a chance to review it. I’d like to bring to everyone’s notice that this call is being recorded and the recording and transcript will be available on our website to discuss the company’s performance and outlook. We have on the call our group CEO Mr. Satish Mehta, our CFO Tajuttin Sheikh, our Executive Director Namita Thapar, Executive Director Samit Mehta and President Corporate Development Strategy and Finance, Vikas Thapper.
Before we begin, I want to remind everyone about the safe harbor related to today’s investor call. Today’s discussion may include certain forward looking statements which must be viewed in conjunction with the risks that our business faces that could cause our future results, performance or achievements to differ significantly from what is expressed or implied by such forward looking statements. At the end of the call, if you have any queries remaining unanswered, please feel free to contact us. I will now request Mr. Satish Mehta to provide the opening remarks. Thank you. And over to you, sir.
Satish Ramanlal Mehta — Chief Executive Officer and Managing Director
Thank you, Piyush. This is Satish Chandra, Group CEO. Good afternoon to all of you. It’s a pleasure and honor to speak to you. While I’m speaking on the annual results for the year FY25, we have seen the results 4 to 25 revenues review 19.5% led by 25% growth in domestic business and 16% in the international business. LDAC and FY25 with a top line growth of 18.5% and margins of 18.6%. And this is very much in line with the guidance we have given earlier. I must say that FY25 has been a transformational year with multiple milestones about which I’ll speak as we go along.
We got listed on Stock Exchange with extremely strong response from the investor community and which means a lot to all of us. In domestic market we successfully integrated the Sanofi cardio business into our portfolio. We sharpened our focus on Derma segment with launch of our subsidiary Ncubix. We expanded our women Health portfolio. We entered into OTC segment with product range under Earth and Gallat brands in international markets. We successfully expanded our presence in Canada with integration of Mantra subsidiary. Brief on key highlights of the quarter end year let me focus on domestic market. In Q4 we had a strong performance from our domestic business.
It is led by Women health and cardio and aided by Derma. I am very happy to inform that as far as the organic growth of the quarter is concerned it is 10% and if we exclude FCN which went off patent then the growth is 12%. Happy to inform the restructuring of our Cardio Diablo business is complete and we saw a return to normalization during the quarter. We expect this restructuring to drive growth going forward. Key brands saw double digit growth in the quarter as in Oro4XT, Maxtra, pause, proxyv, oxen, wilda, tenectase and Astromex. All these key brands saw strong double double digit growth in the quarter which has ended as I have been telling all along, MQO’s strength in this differentiated portfolio which again helped our 4Q growth and will drive faster than industry growth in the current year.
Let me now focus on some of the key portfolio expansions that we are doing as well as domestic market is concerned. In Women health we launched portfolio of products in Menopause and PCOS segment first time offering doctors and patients a comprehensive portfolio to address the unmet needs in these segments. I’m referring to menopause and pcos. We have also in the process of deepening our presence in Gynecology segment with further launches. In FY26 our Dharma subsidiary launched its first of differentiated products like PRX plus and Florizone further pipeline of products which will augment our basket of products over the next 12 months including some of the first launches that we’ll be doing through enthusiastic division and I’m also very happy to say that Dharma Division chief who has come with a background at Galderma because of his deep understanding in the Dharma business.
We are also getting a lot of collaboration opportunities at which we are looking and personally I’m really excited about the Dharma business. I’m also very happy to inform that our ready to use Ophthalma grade Bevasi Zuma for Wet AMD with a patented technology is in phase three is in phase three and we expect in the current financial year to launch this particular product which will be a foray in our ophthalmic segment. This is a product of its kind and we are very bullish about this particular product which is coming from our Genova subsidiary which is dealing with biologics.
We have also filed for approval R asparaginase in oncology which will be the first time the product will be available in India. Let me take a few seconds to talk about R aspergenase. The R aspergenase that we have currently is imported from China and it is coming from the natural sources. But as far as this particular product is concerned, which has been made in house, it is recombinant. So to that extent, batch after batch, the quality is guaranteed and it should be extremely useful to patients who are suffering from blood cancer. I’m also happy to inform that we are now well on track to be in the first wave of launches for post expiry for semaglutide.
As for the semaglutide is concerned, we are absolutely on track and we’ll be in the first way of launches post expiration of this particular product. Having spoken about the domestic business now, let me now turn my attention to international market which has shown strong growth in the current year. Rest of the market grew by 27% in FY24 and rest of the market that means the emerging market grew by 27% in FY24. FY26 should also see strong growth by traction in our differentiated portfolio, especially in biosimilars and Amphotoricin B. Amphotericin B going forward, as I also mentioned last time should be going forward.
A game changer for us in the emerging markets. As far as Canada is concerned, it continues to outperform. In FY24 the growth was 35% including full year mantra performance. Base business continues to grow healthy double digits. Base business continues to grow healthy double digits. We have a very healthy pipeline and we expect this business to continue to see strong performance going ahead. Now let me focus on European Union. I mean, as I told some time back, you know, we got approval for Amphotericin, the liposomal for the European market. And I’m very happy to inform my shareholders and your analysts that this is the first generic to get approval in the European Union.
It’s a very big achievement. It’s a very complicated product, complex molecule, complex injectable. And this is the first approval generic approval in the European market. We also acquired Man’s Healthcare portfolio. This will help us to expand our product range basket of products that we offer in UK and will give us a very strong pipeline going forward. We expect growth of European Union to be driven by Amputerasin B and Manx portfolio and I’m also happy to say that as a European concern we also have the way I mentioned about Canada, a fairly robust product pipeline which should also get approved in due course of time with near term product pipeline intact.
We have recently formed a scientific advisory committee which includes globally reputed scientists to help develop our long term portfolio strategy. The long term portfolio strategy and in the current month itself we had a meeting in New Jersey of the scientific advisory committee and there you know we have got absolutely world class scientists who are part of the scientific advisory committee. Our focus area is going to be the four areas which I would enumerate. One is the complex injectables, second is biosimilars and the third is new drug delivery routes for existing molecules targeting better efficacy or new indication.
The key focus area will be CNS and Derma and we will also be working on ADC antibody drug contributes. Now having spoken about various geographies, I spoke about domestic business, I spoke about Canada, I spoke about emerging markets. I also gave you my outlook as far as what we have done in Europe. Now let me focus as far as FY25 26 is concerned the outlook key focus area will be on execution. I am a strong believer on execution because everyone has strategies but the key to success is execution and also the focus will be on improving our profitability.
We expect to see top line growth of 13 to 14% in FY26 with around 150bps margin improvement which will happen over the course of the year. I know that the bottom line is required to be improved and my entire team, entire management team is committed to work in that direction. I would also like to highlight that everyone is speaking about the US curries and pharma pricing. As you know that while listing the company before listing the company we demolished our American business. To that ext we are largely instituted from the vagaries of the US market and post our demerger the exposure to us is less than 3%.
I mean I must say that it has been a year since NPUR got listed on stock exchange. From a small family, strong family, we have grown into a larger family of investors. We have our dreams and our own responsibilities. For me it is npure2 which is a new company. I started this company. I am a founder member. Till we got listed it was npure1. Now it is npure2. It is a new company and we are obviously focusing on higher growth with better margins and much much higher roc target. At NQS we have charted a five year roadmap in which 2526 will be our first year of that vision.
We hope to have a reasonably strong year ahead of us with many challenges that we announced at an appropriate time. I can only tell you that we at NCURE are very excited with the opportunities lying ahead of us and fully focused on building a strong team to execute whatever opportunities are there and India stands out well in global context and NPO looks ready to seize the opportunities as far as the pharma is concerned and with focus on domestic emerging markets Europe and Canada, we are well poised to take the opportunities which will come our way.
We hope to keep reporting stronger and better numbers as we go along year after year and we would also like you to judge NQR performance on annual basis rather than every quarter. All I can say while signing off that best of inquiry is yet to come and we are all committed. My team member of entire inquiry is committed to give great value to the shareholders. With that I will turn to Taj.
Tajuddin Shaikh — Chief Financial Officer
Good afternoon everyone. Thank you for joining us today. I will take you through some of the key financial Highlights for the fourth quarter, FOQ 25 and full year FY 25 the fourth quarter highlights revenue from operations for the quarter grew by 19.5% year over year to 2,116 crores, up from 1,771 crores in Q4FY24. The domestic business grew strongly by 25% year over year to 929 crores driven by early benefits from division restructuring and the addition of Sanofi’s portfolio. Despite a decline in HCM excluding Sanofi, domestic growth was around 10% year over year and excluding FCM, impact was 12%.
International markets maintained solid momentum growing 16% year over year to 1187 crores, led by rest of the world’s market and a strong presence in Canada and Europe. RW markets grew impressively by 39% year over year to 481 crores with strong contributions from both ARV and non ARV portfolios. Canada reported a 6.1% growth to 310 crores. Europe saw a modest growth of 2% year over year reaching 396 crores. Gross margins for the quarter stood at 57.8%, down from 62.1% in quarter four of FY24. Impacted by changes in business and product mix. EBITDA excluding Other income grew 25.2% year over year to 390 crores with EBITDA margins at 18.4% supported by operating leverage and productivity gains.
Even amid low gross margins. Depreciation and amortization was flat quarter over quarter at 97 crores. Finance cost was 39 crores reflecting lower borrowings. QoQ cost is higher due to one time cost of 10 crores related to early payment. The effective tax rate stood at around 25%. Profit after tax came in at 197 crores showing strong growth of 63% year over year. Now I’ll talk about the full year.
Tajuddin Shaikh — Chief Financial Officer
FY25 highlights.
Tajuddin Shaikh — Chief Financial Officer
Revenue from operations grew 19% year over year to 7,896 crores. The domestic business grew 16.4% to 3,660 crores supported by the Sanofi portfolio, ex SCM and ex Sanofi. Domestic growth was around 8 to 9%. International market grew 20% to 4,236 crores with strong performance from Canada and emerging markets. Canada grew to 1,252 crores benefiting from robospace business performance and the Mantra acquisition. RRW markets rose 28% to 1,510 crores with sustained growth in both ARV and non ARV segments. Europe grew at 4% to 1,474 crores, solidifying its pace. Gross margins for the year were at 60.1%, a decline from 62.8% in FY24 primarily due to Sanofi and ARB product mix.
EBITDA excluding other income grew 19.4% year over year to 1,469 crores with EBITDA margins remaining stable aided by operational efficiency gains. Depreciation and amortization rose to 384crores from 312crores in FY24 owing to Manfa acquisition and commissioning of a few plants. Finance cost for the year stood at 176 crores reflecting lower borrowing levels inclusive of AS116 and mantra related costs. The effective tax rate for FY25 was 27% PAT stood at 707 crores, a growth of 34.1% year over year. The board has recommended a dividend of rupees three per share on the balance sheet side. Net debt was reduced to 488 crores, a significant improvement from 1,558 crores in FY24.
Our working capital days remain stable at approximately 98 days. With that, I’ll now open the floor for questions.
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 star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amrin Jyoti from Nomura. Please go ahead.
Amlan Jyoti Das
Yeah, hi sir. First of all, congratulations on the numbers. My first question is regarding the margin expansion that you said in FY26F around 150bps. Could you please clarify how do you plan to achieve this next year?
Satish Ramanlal Mehta
Yeah, you know, I think it’s a combination of factors. Obviously we have operating leverage as the business continues to scale. Higher productivity from some of the recently hired field force and in particular some of the newer divisions. Of course, some of the restructuring we did vis a vis the cardio diabetic division in the Sanofi portfolio along with our own cardio products will also lead to some ongoing synergies and also it’s going to be driven by some of the mix of some of the newer product launches which will bring in better gross margin profile. As we highlighted in the current year we had a healthy mix of ARV business, but obviously that comes with a slightly lower gross margin profile.
So as some of the faster parts of the international business and non ARV components in the emerging markets, Canada and Europe continue to scale, that will also drive margin expansion on the gross margin side as well. So I think a combination of these efforts which the management team is very focused on is what’s going to drive that 150 basis point expansion that we have emphasized for next year.
Amlan Jyoti Das
Thank you sir. Regarding the restructuring that you’re talking about, has this been completed or obviously restructuring risk costs for a couple of more quarters ahead?
Satish Ramanlal Mehta
Yeah, the restructuring is completed. There was no cost as such. It was more a realignment of the fuel force and the division so that we can basically offer a wider basket of portfolio consisting of both NCure’s products and some of the Sanofi brands. And so we think that with that sort of increased focus, what will happen hopefully is that we will see better uptake in terms of the entire basket being offered and that should lead to continued growth and productivity from that field force.
Amlan Jyoti Das
Okay, sir, thank you parents with my questions.
operator
Thank you ladies and gentlemen. You may press star and one to ask a question the next Question is from the line of Alanka Garude from Kotak Institutional Equities. Please go ahead.
Alankar Garude
Hi, good afternoon everyone and thank you for the opportunity. Can you broadly divide the 13, 14% year on year top line guidance across domestic and international.
Samit Mehta
Yeah. So I think for what we’ll be looking at the domestic the target Is to grow 200 basis points higher than the industry. So that will be about your low double digits type of growth. I think international is where we are expecting more around mid teens type of growth.
Alankar Garude
Understood. And there Krish, would it be fair to say that the Orofar FCM loe impact is now completely behind us?
Gagan Thareja
So there is still some impact as I think in the readout also there’s still about a 1% to 2% impact in the quarter but I think that we’ll be able to manage even in this quarter. If you look at it FTM we grew at 12% including FTM growth was 10%. Namita, if you want to add on.
Unidentified Speaker
That, in fact in the FCM the prices have stabilized and we’re also seeing market share increases because there was an influx of small players and quite a few of them have exited at this point. So FCM will now have an upside.
Alankar Garude
Got it. The other question was on Sanofi was the restructuring. Can you talk a bit about what has changed in the business? You touched upon it briefly in your opening remarks but also if you could quantify it in the sense when you had acquired it the sales were broadly around 500 crores. Then there was this restructuring over the past six, seven months. So firstly what were Sanofi sales in FY25 and secondly what is your expectation from the portfolio given all the changes?
Satish Ramanlal Mehta
So I think this year Sanofi sales would have been about 440, 450 crores. There was also impact. What we had is because there were few products which are in shortages. So that impacted us. I think going forward Namita can highlight.
Satish Ramanlal Mehta
What we’re looking at.
Unidentified Speaker
in Sanofi for a large period of time they had not been spending promotional expenses on some of their legacy and key products like Cardis. And so what we have done is we’ve taken a lot of our cardiologists kol and invested heavily in education activities, scientific meetings which was not done for several years on Cardis. The second thing is we’ve done cross pollination as we had committed which is some of our NQR strong cardio portfolio cardio products. We have now shifted to that team so that there is that cross learning and cross coordination of products as well as we have added reps in that team and added headquarters in that team.
So overall we started off by spending more and then shifted some of our brands and then added breadth and territory. So it’s been a very calibrated and structured approach towards the Sanofi project initiatives.
Piyush Nahar
On that front. Namita, if you can talk about how quickly should we get back to normalized growth in the Sanofi business or it’s already done. Given that you spoke about restructuring having been completed, should we expect a pretty strong growth right from the current quarter, the first quarter of FY26?
Satish Ramanlal Mehta
I think Piyush has already explained about how when you compare Q4 to Q3, you already saw that growth in domestic business, which is primarily because of the restructuring efforts. And then he also gave guidance for the following year where we said we’ll be 200 points over the market. So I think it’s fair to say that these two numbers are representative of all the efforts that we put in and let’s hope for the best.
Alankar Garude
Got it. And maybe one final question before I come back in the queue, a clarification on firstly the margin guidance. You spoke about 150 basis points over the course of the year. So this I wanted to clarify, if you can clarify whether this is a full year guidance or the exit average.
Satish Ramanlal Mehta
This will be a full year guidance.
Alankar Garude
Got it. And on gross margins, Piyush quite low, both sequentially as well as iron year in this quarter. Can you help explain the reasons for the same?
Satish Ramanlal Mehta
This is largely driven by a mix, right? So if you look at sequentially, a big part is the Sanofi and some of the higher ARB sales, sorry, sequentially I think it’s more the product especially we have on the international side.
Satish Ramanlal Mehta
So if I can just chime in, so year over year, I think it’s about a 250 basis point reduced GC compared to the prior year over year quarter. And like VIJ said, that’s predominantly driven by the Sanofi and ARV component being relatively higher this year vis a vis last year. The base business gross margins are actually up slightly compared to prior year Q4. And on a sequential basis, he’s right, it’s more of a mix of domestic versus international, some of the timing aspects of that. And so I think in terms of the gross margin profile of the business, other than some of these mix issues, we feel very good about where the business is.
And like I said, the pipeline is going to continue to drive that margin upwards.
Alankar Garude
Sorry to harp on this, you spoke about the sequential decline in margins, linked it to the domestic mix, domestic international mix. But given the sharper domestic growth in this quarter, was this a bit surprised with the sequential decline in gross margins? Was it the case that ARV sales were higher in Q4 as well?
Satish Ramanlal Mehta
So not just ARV. I think what happens in some of the emerging markets there are the business mix right there, some distribution business, some third party business where your GCs will be lower but you don’t have a big SGNA. So that product mix plays out in 4Q.
Alankar Garude
Understood? Yeah, that’s it from my asset. Thank you.
operator
Thank you. Ladies and gentlemen. You may press Star and one to ask a question. A reminder to all the participants that you may press Star and one to ask a question. The next question is from the line of Kagan from Ask Investments Manager. Please go ahead. Sir, I would request you to please use your handset.
Gagan Thareja
Okay.
Gagan Thareja
Yeah. Is this better?
operator
Yes, sir.
operator
Yeah, go ahead.
Gagan Thareja
Yeah. So on your Canada sales for the fourth quarter it’s dipped sequentially from 352 crores to 310 crores. You know, is it just a quarterly phenomenon and not much to read in it?
Satish Ramanlal Mehta
Yes. Of Canada, I think we mentioned last quarter also that you have to last quarter was a bit heavy because there was some sales which got preponed booking. So that impacted in 4Q. I think what you mentioned is if you look at for the full year, the base business continues to grow in mid to high teens for us in the FY25.
Gagan Thareja
Okay. When you say base business, you mean both your entities together.
Piyush Nahar
Yeah.
Gagan Thareja
Okay. All right. And is it possible to give the PCTM for the quarter and you know, compare it with the third quarter of the year and fourth quarter of the previous year?
Piyush Nahar
Sure.
Piyush Nahar
For the quarter we were at 6.3. Last quarter it was 6.1. In 3Q last year, same quarter we were at 5.4, 5.4.
Piyush Nahar
Right. And is it also possible to further sort of enumerate, you know, while you mention higher growth in your exports, is it possible to give some flavor of you know, how it splits up between ROW EU and Canada in terms of growth for FY26.
Piyush Nahar
So I think Europe what we will be targeting is you’re only high single digits. Canada, as I said, we continue to aspire to grow in your teens level Emerging markets is where we see the substantial growth of closer to 20% or.
Gagan Thareja
Okay. But that should be driven more by your non erpps going ahead.
Piyush Nahar
That’s correct.
Gagan Thareja
Okay. Okay. And for the year your Operating cash flows are lower compared to last year despite fairly strong growth. Can you perhaps explain a little more there?
Piyush Nahar
Yeah, you see the Sanofi business and Haier business, our working capital requirements went up and that’s the reason you see the operating cash flows being a little low.
Piyush Nahar
And going ahead. In terms of working capital, you indicated it was fairly stable, so I was just wondering.
Satish Ramanlal Mehta
Yeah, so it was from 96, it’s.
Gagan Thareja
Gone to 98 days. But the business has also grown. So in value terms, the working capital value has gone up.
Satish Ramanlal Mehta
Yeah, I get that. I get the absolute value. Is working capital likely to remain stable or because working capital might be different in the export markets compared to the domestic markets. Are we Therefore looking at FY26 being a year where working capital in days would perhaps rise?
Piyush Nahar
No, it would be the same or similar. About 98 to 100 days is what we’re looking at.
Gagan Thareja
98 to 100 days.
Gagan Thareja
Yeah. Thanks. I’ll get back in the queue. Thank you.
operator
Thank you. The next question is from the line of Dhaval from Jeffrey’s group. Please go ahead.
Dhaval
Hi, team. Thank you for taking my question. I just wanted to know what are you guys doing the ADC area and do we have the tech or will be relying on some partnerships? What will be the key geographies and next two years? Are there key molecules that are nearing patent expiry in any of the key markets? That’s my first question.
Satish Ramanlal Mehta
Sure.
Samit Mehta
Hi, this is Sameer. So specifically talking about adc. I think this is the first opportunity for us in terms of real collaboration between our biologics arm and the small molecules, given that we start off with an antibody that will be made by Genova and then have the linker and payload from the chemistry side. So in that context, we are already evaluating the landscape and doing some preliminary trial work as and when we develop the product. It’ll definitely be something that we will be looking at global in the sense of India plus emerging markets, because that’s the kind of opportunity we see here.
And the IP landscape in this context is quite open. It’s not a biosimilar we are looking at this will be more where we will have some kind of our own IP protection who are novel linkers and the development will require clinical trials, right? Absolutely. It will require, in my understanding, phase one, two and three. And here, you know, we are evaluating some collaboration opportunities as well and also looking at outsourcing some of the elements of the entire clinical pathway. Okay, got it. And possible to quantify our ARV sales in FY25 and within the segment do you see any risk in a three to five year period because of, you know, launch of new molecules coming up in emerging market.
Satish Ramanlal Mehta
So I’ll just answer on the split. So about roughly half of rest of the world sales is Arvind Sameit. You want to talk about the product line?
Samit Mehta
Sure.
Samit Mehta
I think if at all the treatment paradigm changes over the next two to five years, which is likely, I think we are best positioned because of the fact that we are one of the only six licensees for Lemakkapavir. So eventually if the treatment shifts from a TLB to Lena Kapavir, I think we will have the opportunity to encash on both.
Satish Ramanlal Mehta
Yes. And I think obviously we’ll be vertically integrated on Lena Kappa virt and the fact that this may be prescribed prophylactically as well gives us a huge advantage and so we think we’re well positioned even for the medium term on the ARV segment.
Satish Ramanlal Mehta
I believe clearly Lena Kapad should be profitable I believe because there will not be very many players going forward.
Dhaval
Makes sense. Last question. You know for past two years I’ve seen a trend where 1Q is registering best cross margin and over the quarter it’s in a declining trend. So what’s been the reason behind it? And do expect there’s some seasonality or it was because of various different portfolio mix and there’s no particular trend.
Satish Ramanlal Mehta
Yes, I think our international business does tend to be a little bit more back ended towards the year and so to that extent, particularly as Canada has continued to scale aggressively and when we look at even some of the emerging parts of the business, I think international business as a whole vis a vis domestic market and then within that some of these segments. That’s why you see a little bit of this mix issue happening as you go through the four quarters. But beyond that, nothing else.
Satish Ramanlal Mehta
So I think it depends on the product mix. So that’s why I said I think GCS you probably look at for the full year because between quarters, depending on what products mix happens in a quarter, there will be variations.
Samit Mehta
Okay. And just on the dc, you know, oil prices have gone down quite materially. Many of the raw materials are, you know, multiple derivatives of these crude products. So are we seeing some, you know, moderation in raw material prices or there’s no impact? No, I think, you know, except for some of the solvents, we are not seeing crude prices impacting anything. Hopefully it does, you know, help us with some of our logistics costs which have really shot up over the last four or five years. But in RMs per se, barring few solvents, we are not really seeing that impact happening.
Dhaval
Okay, thank you. That answers my question. Thank you.
operator
Thank you. The next question is from the line of Keresh Bakru from Orbimet. Please go ahead.
Keresh Bakru
Yeah, hi, just. First question was again on EDC side.
operator
Sorry to interrupt. Sir, I would request you to please use your handset.
operator
You on the handset,
Keresh Bakru
can you hear me?
operator
Yes, much better now.
Keresh Bakru
Yeah, sorry, just on the ADC side.
Keresh Bakru
If you could elaborate.
Keresh Bakru
What is the. I know you talked about some IP based linker, but is there like a full library or suite of products that you are planning under Genova and Cure?
Satish Ramanlal Mehta
No, it will be a very calibrated approach. I think, at least initially it will be a very low risk strategy in terms of choosing an antibody and a payload which is already tested, which is why I said the IP will come to the linker. And also in terms of payload, most of the people are using derivatives of certain approved molecules. So that’s the pathway we will follow as well. And once we have product in market, that’s when I think we’ll go a little more aggressive in creating like you’re mentioning a library of products there.
Keresh Bakru
And you are doing conjugation yourself as well.
Satish Ramanlal Mehta
Sorry, I don’t understand.
Piyush Nahar
I’m sorry, could you just repeat that question?
Keresh Bakru
Sorry, I was asking, are you doing conjugation as well of antibody to the payload linker?
Samit Mehta
Absolutely.
Samit Mehta
The entire, you know, integration will be in house, starting with the antibody, the linker, the payload as well as the conjugation and achieving the, you know, desired dash.
Keresh Bakru
Okay. Okay. And the, this asparagines product you mentioned last time, also the recombinant one, is it different from Pega Aspergenase? Because that is already launched, right?
Satish Ramanlal Mehta
Yes. So I’ll just give you some insight there. The natural product that comes from China is L Asperginase. Today the product that is in market is the pegylated version of L Aspergenase. However, that is the second line treatment in pediatric. All the first line continues to be elastperidinase and that’s the one which has severe quality issues. That’s the one we have made into recombinant. So recombinant Asperger’s will be the first line and second line will continue to be the peg L. Asperger’s.
Keresh Bakru
Okay. And this will be the first. You, you’ll be the only player. You don’t see any competition here?
Satish Ramanlal Mehta
Not in the recombinant right now, at least from whatever publicly available data on SEC or CDSPO looks like on the recombinant we are the only filers of course globally Spectrila is the brand which is from Medag Germany and our bio studies have been performed against that product.
Keresh Bakru
Given the current, currently the market, I don’t know the market, what is the.
Satish Ramanlal Mehta
Market for asparaginists right now in India? So couple of things, there’s both aspergerines usage happening in India but this Asperger’s API after being imported from China is being formulated and supplied to multiple countries. So totally that market in our estimate between India and these exports could be in the range of 100 crores. 100 to 150 cr is the estimate that we can from export data and Indian.
Satish Ramanlal Mehta
But at the same time time, you know a lot of these formulated aspergenase is being exported to emerging markets and that’s where you know, sending a recombinant molecule which is technically and qualitatively much better than what is going right now should help us going forward.
Keresh Bakru
Understood. And just a bit on the domestic side, I know NQTX is very.
Satish Ramanlal Mehta
It’S.
Keresh Bakru
Not that old a subsidiary right now, but can you talk about how many portfolios will come under it in terms of number of products and how much percentage is actually cosmetic?
Satish Ramanlal Mehta
Dom, this is a fledgling company. We started here in operations only in the month of January. I mean but I must tell you that the chief executive that we have, he comes from great background and to be honest with you, when I started this division I didn’t know that as far as the market is concerned it consists of so many things. My understanding was concerned typically you know, what we promote to the dermatologist and that’s where you know, we talk about atopic dermatitis or for that matter, you know, fungal infection, alopecia and so forth and so on.
But now I understand, you know, there is something much beyond that like cosmetology is doing fabulously well then even for that matter, you know, we also have products for geriatric or even for that material products which are required for anti pollution and all these areas we are entering and with Italian collaboration we have very recently launched about which I spoke, that is PRX plus. PRX plus has been launched and only a couple of days back my presentation from my chief executive. This particular product is for skin tightening and you know, for skin tightening the conventional treatment is not conventional.
People use Botox and their injections and all these things are required to be given and this particular product, you know, is immensely liked, you know, by the dermatologist. And we launched only a month back and we have almost 290 doctors who have started prescribing this particular product. And this is essentially coming in the field of cosmetology. So this is just one example I am giving, giving you. So to that extent about we as a company we are very excited about the foray in the dermatology and lot of things, you know, lots of things will happen going forward.
Samit Mehta
Yeah. In terms of launches, I think the number of SKUs will be much higher. But we’ll have it. We already have about eight brands and there’ll be another six in the pipeline which will come over the next 12 years, 12 months.
Samit Mehta
And these eight that we are talking have just recently been launched. So it’s a fairly robust portfolio for the next fiscal year.
Piyush Nahar
One of the products that we launched that is also with new technology for acne, which the technology is Microsphere. And this is a product which is significantly better than the existing products that is for acne moisturizer, then acne spot remover. All these things that we are doing.
Piyush Nahar
And in terms of cosmetic cosmoderma versus prescription, I think it will be a useful equally split.
Samit Mehta
Okay. And just also on the split across therapies, if I see so three, four years down the line, do you think the contribution from HIV and iron products that should significantly change and derma and other therapy should increase?
Satish Ramanlal Mehta
I think HIV will come down significantly. Irin, yes. As I think some of the CNS derma off talent come in irin will see a decrease but even in iron I think we see a significant growth potential still.
Piyush Nahar
I think iron as a percent will go down because others grow but in absolute numbers we still see huge growth potential in iron.
Keresh Bakru
Would you like to say something Manita or Irene? Because you know, since you are promoting, I would like to hear from you.
Satish Ramanlal Mehta
I mean 57% women are anemic and 30% men are anemic. So there is a huge potential in terms of just people who are not aware that they need it. So I think the market will continue to grow. Like we mentioned earlier, we are also increasing our presence in menopause, pcos and endometriosis which are three areas that are rapidly growing. So it would be a two pronged strategy of whatever is big, make it bigger and then also have some exciting new launches in these progressive markets.
Keresh Bakru
Thank you. Thank you, that’s very helpful.
operator
Thank you. The next follow up question is from the line of Gagan from Ask Investment Manager please. Go ahead.
Gagan Thareja
Yeah, thanks for taking the follow up. The first one is on debt. Do we see, I mean to what scale do we see debt reduction in 26 and you know, barring inorganics do we see you know becoming debt free by close of the financial year 26?
Satish Ramanlal Mehta
Yeah, we probably see being debt free by the end of financial advisor.
Gagan Thareja
And in terms of you know, your capex, is it possible to enumerate the budget for 26 and 27 if that’s all the question?
Samit Mehta
Yeah, I think we’ve historically guided to probably in the range of about 350 cr and I think we’ll be somewhere in that range give or take 2550 course.
Gagan Thareja
And also you in the last quarter talked of quite a few in licensing programs which might come to fruition in in a short term. Any further elaboration on any of these if they are due in FY26 and in which areas?
Samit Mehta
So we have the NQTix, the PRX plus which we launched is one of those in licensed products that we have others. I don’t think there’s anything we can talk about.
Gagan Thareja
Okay, thanks. I can continue the queue. Thank you.
operator
Thank you. The next follow up question is from the line of Alankar Karrute from Kotak Institutional Equities. Please go ahead.
Alankar Garude
You mentioned about being well on track to be in the first wave of launches for Semaglutide in India. Given that you are vertically integrated here, does it mean that this confidence is coming basis the progress on the tires? I’m just asking this because we hear mixed feedback about the difficulty in clearing the tiles even in India.
Satish Ramanlal Mehta
I would like to take that question.
Samit Mehta
I think in terms of the timeline on the trials we are on track. We also are quietly confident about the probability of success on these trials. I think one uncontrollable is the speed of regulatory code clearance and that’s something we really need to make sure goes as per plan to be able to be in this first wave but at least whatever is under our control in terms of the trial timelines as well as probability of success we think, you know we have the molecule well understood.
Alankar Garude
And have we filed in Canada yet?
Satish Ramanlal Mehta
Not yet, but that is actively on the cards.
Alankar Garude
Okay. The second question was if you look at the X ARV row sales growth, assuming ARV was half of the row sales in FY25 the X ARV growth seems to be low single digits. Now you spoke about strong growth in row in FY26 and possibly the margin guidance also alludes to a lower arv mix in FY26. So one is what drove the relatively lower growth Xarv in row and FY25 and what will change your second in FY26.
Satish Ramanlal Mehta
So the XARV growth was in teams, not in single digits for us in FY25. I think going forward in terms where we have a lot more confidence in terms of the visibility for the product launch approvals that we are getting for some of our differentiated products like Amper dressing D or even some of the biosimilars. So it is led by those approvals going through.
Alankar Garude
Okay, what was the ARV sales number in FY24 in row.
Satish Ramanlal Mehta
ARV would have been.
Satish Ramanlal Mehta
Just give me a second.
Satish Ramanlal Mehta
Would have been less than 40%. So around 40% or slightly higher than 40%.
Alankar Garude
Okay.
Alankar Garude
Okay. The other question was on this acquisition, recent acquisition of Manx, any clarification on the size as well as the margin profile of this asset?
Samit Mehta
Yes.
Satish Ramanlal Mehta
So we expecting this year to have sales close to US$15 million to begin with.
Satish Ramanlal Mehta
And we have a portfolio of about.
Satish Ramanlal Mehta
100 molecules which we have acquired.
Samit Mehta
So out of that portfolio that we acquired, there’s obviously at least about 40% or so that are already, were already commercial molecules and approved. So that’s where we’re confident about the sales emanating from these ongoing sort of molecules where we even as part of the transaction took on some component of inventory. And then we’ll go continue in terms of selling those products. And then I think what’s exciting is for our ability to take some of the yet to be approved molecules and be able to commercialize those as well going forward.
Alankar Garude
Understood. And what is the margin profile of Manx at the moment?
Samit Mehta
So again, so I mean we acquired the entire portfolio. We think that that will give us reasonably good EBITDA margins in line with what we would be expecting for the overall European portfolio.
Alankar Garude
Got it. One final question. What has been the organic growth in Canada in FY25?
Piyush Nahar
It would have been about mid to high teens.
Alankar Garude
Understood. Yeah, very helpful. That’s it from my side. Thank you.
operator
Thank you. A reminder to all the participants that you may press Star and one to ask a question. The next question is from the line of Parad Shah from Ask Investments Manager. Please go ahead.
Parag Shah
Yeah, hi. So you talked about growing the turnover in the current year 2526 by about 13 to 14% more at the. Hopefully more at the higher end and the improvement of margins by about 150 basis points, which about 19.5% for the year gone by to about 21% both on the top line as well as on the margin improvement is the year following also we have some such ambition or this is confined only for the current 2526.
Satish Ramanlal Mehta
Yeah, I just want to make one.
Parag Shah
Small Correction on your 10,000 crore turnover in 2627.
Satish Ramanlal Mehta
So I just want to make one small correction to your question and then I’ll take the question. I think our full year EBITDA margins was closer to 18.5, not 19 and a half as you mentioned. And if you include other income then yes, you get closer to 19 and a half. And so you’re right that the 150 basis points that we are guiding to is on top of that number. So in that range of 20 to 21% depending on whether you include the other income or not, when it comes to looking at more of a two to three year outcome outlook, we fully appreciate and understand that when you look at some of the peers in the industry we still feel that we are have further room to improve on the margin aspects of the business and there’s a lot of efforts as I mentioned being put on that and we firmly believe that as the business continues to grow there’s no reason why we should not continue to see enhancements margin profile even two to three years out.
I think in the past we’ve also guided to over a three to four year period probably a 300, 400 basis point sort of improvement in the margin profile of the business. While I don’t want to give any specific number, but suffice it to say that off of our exit, if we aspire to grow 13 or 14% next year and would still have ambitions to grow double digits organically the year year after. And of course we’re going to continue to look for, you know, MA opportunities and in licensing opportunities. So we’re very, very bullish about crossing certain milestones a couple of years out.
Parag Shah
So which you mean that these 13 to 14% growth that you outlined for the current year FY26 similar journey should be expected and whether margins will improve by 150 basis points or not like in the FY26. But some further improvement in margins is what you are envisaging for the year going ahead.
Satish Ramanlal Mehta
So I think directionally I would agree with that. However, I think let’s go through the course of the year and we’ll certainly continue to give updated guidance.
Satish Ramanlal Mehta
As I mentioned in my opening remarks, we are long term players, we are committed to creating great value for the shareholders. The next five years. But now we are essentially focused on the current year. So to that extent, as I mentioned in my earlier remarks, the entire emphasis will be our execution to ensure that whatever guidance we are giving in terms of 13, 14% by the way of growth and the 150 point slow increase in existence, that’s what we are committed to. So it’s going to be a mix of short term and midterm and long term.
But long term, of course the aspirations are there to become, get into a big league.
Satish Ramanlal Mehta
I think we have time for probably one or maximum two more questions only.
Parag Shah
Just one last point there since on all key competitive factors or aspects you would agree that NCR is still behind some of the other firms and therefore we need to try harder.
Satish Ramanlal Mehta
I would say yes. As I mentioned, I think obviously if you look at the various components of our business mix, the endeavor is always to maximize the potential of each of the different segments. And certainly along with growth, the margin expansion is very much on top of the senior management’s minds. I think we can move on.
operator
Thank you. Ladies and gentlemen. You may press Star and one to ask a question. A reminder to all the participants that you may press Star and one to ask a question. The next follow up question is from the line of Dhaval from Jeffrey’s group. Please go ahead.
Dhaval
Yeah, hi sir, just one doubt. We have recently set up this employee generics private limited. What is that? Is it about entering trade generics or is it something else?
Satish Ramanlal Mehta
Yes, so I mean we’ve made a limited beginning but obviously with the trade generics, the profile of that business, we feel that it’s important to have that house in a separate entity with a separate team. Obviously has its own channel and so we’ll have a very, very calibrated approach. But certainly we are also going to be present in a limited way in the trade generics segment as well.
Dhaval
Okay, thank you. That’s it for my.
operator
Thank you. As there are no further questions from the participants, I would now like to hand the conference over to Mr. Piyush Nahar for closing comments.
Satish Ramanlal Mehta
Thank you all for joining today’s investor call. If any of your queries still remain unanswered, please feel free to get in touch with us. Thank you. Now, thank you.
operator
Thank you on behalf of Mture Pharmaceuticals Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.