Eris Lifesciences Ltd (NSE: ERIS) Q3 2025 Earnings Call dated Feb. 04, 2025
Corporate Participants:
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
Amit Bakshi — Chairman and Managing Director
Kruti Raval — Investor Relations
Analysts:
Kunal Randeria — Analyst
Harith Ahamed — Analyst
Kunal Dhamesha — Analyst
Ritika Khandelwal — Analyst
Prashant Nair — Analyst
Gagan Thareja — Analyst
Unidentified Participant
Prolin Nandu — Analyst
Tushar Manudhane — Analyst
Rahul Agrawal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 and Nine Months FY ’25 Conference Call of Eris Life Sciences Limited. We have with us on-call today Mr Amit Bhakshi, Chairman and Managing Director; Mr Vim Kumar, Chief Operating Officer and Executive Director; Mr Sachin Shah, Chief Financial Officer; and Ms Gruti Rawal, Head, Investor Relations. 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. Please note, this call is being recorded.
I now hand the conference over to Mr V. Krishnakumar, Chief Operating Officer and Executive Director of the company. Thank you, and over to you, sir.
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
Good afternoon and welcome to our earnings call for quarter three and nine months of this financial year. So getting right into the details, our flagship domestic branded formulations business has delivered an organic growth of 12% in-quarter three and this has been on the back of new product launches and price increases taking effect. So the base business revenue for quarter three was INR529 crores and for the Nine-Month period, it is INR1,540 crores. So the quarter three growth is 12% and the YTD growth is 9%.
The base business EBITDA margin has expanded substantially, so 39% in Q3 and 40% on a nine-month basis. The nine-month margin of 40% represents an expansion of nearly 270 basis-points. So the same number was close to 37% for the same-period last year. We continue to witness strong momentum in business integration. So we have a decline of around 518 bps in gross margin on a nine-month basis, which has been largely offset by a 460 basis-points decline in the fixed expenses ratio. And we remain to deliver the numbers as per guidance in the domestic branded formulations business.
This is a detailed set of numbers for the domestic branded formulations business in-quarter three and nine months. So total revenue from operations, INR635 crores in this quarter, which represents a 35% growth, EBITDA of INR230 crores, which is a 31% growth. For the nine-month period, domestic branded revenue of INR1,911 crores, which is again a 35% growth with an EBITDA of INR695 crores, which is a growth of 36%. As mentioned on the previous slide, the YTD gross margin is down by 518 bps due to change in the business mix, primarily the Biocon segments. This has been largely offset by the fixed expense ratio coming down by nearly 460 bps Y-o-Y due to synergies from business integrations.
Moving on, we are gearing up well to leverage the market opportunity in GLP-1. So in terms of key updates, we have entered into a strategic partnership for the launch of semarglutide. We expect Eris to be among the first to launch in India. And given the capabilities that Swiss has in the form fill finish of synthetic peptides and cartridges, we are doing the necessary pre-work to initiate dosage form manufacturing in due course. We believe that after the initial launch, there is a strong economic case for the peptide to make way for the recombinant as in the innovator product.
On this front, has completed preclinical studies for recombinant semi and it has obtained the approval to go-ahead with the application for human trials. In parallel, we are preparing our Bhopal facility to be ready for the form-fill finish of the recombinant semi in the medium-term. So in summary, we are taking all the actions required to have a complete control over the supply-chain in terms of bulk and formulation and also a good cost position.
What makes us confident of our ability to win? It’s really our market-leading position in the diabetes market. We are among the top three by prescription rank among diabetologists and endocrinologists. We rank among the top-five companies in the overall diabetes therapy with a 6% market-share and we are the largest Indian company in the insulin segment with a 10% market-share.
Our new product launches from our own R&D pipeline have started driving growth. We have been talking to you about this for a few quarters now. So happy to share that three first-in-market combinations of DAPA gliflozin from our R&D stable were launched in-quarter three, which gives us a differentiated play in the fast-growing SGL2 space. So DAPA dust and DAPA. These were the three combinations that were launched., which is our first GLP, which we launched in September has scaled-up to nearly INR1 crore per month sale.
In terms of Q4 pipeline, we have three more interesting FDCs coming through from our R&D pipeline, combinations of, DAPA met,, CTA met and DAPA. The and combinations family that is a patent expiration opportunity, which again will start realizing in this quarter and novel anti hypertensil this has been cleared for Bs and CT. So the B study is in-progress right now and we will take-up the CT subsequently.
A quick update in terms of what is happening at our Bhopal and Ahmedabad manufacturing units. So at Bhopal, we are on-track for operationalizing the form-fill finish of insulins from the first-quarter. So as we have been discussing with you, the tech transfer from Biocon is underway. The validation of insulin and glargine vials has already recommenced and the margin benefits in insulin vials because of in-sourcing will start accruing from quarter one. What follows will be the insourcing of cartridge will finish operations and the consequent margin benefits, which will start flowing in later in the financial year. We will subsequently target EU GMP and ROW market approvals from this unit.
In terms of the key developments at Ahmedabad unit for the quarter, we were inspected by two ROW regulatory agencies in-quarter three. The Brazilian Anvisa inspection is scheduled for the first week of May. So on the back of these inspections and subsequent approvals, we are expecting OSD exports to kick-start from this unit in the ’26. So what we would like to summarize here is that these two facilities, in addition to giving us margin benefits in our DBF business, these facilities are opening up new revenue streams for us in terms of export markets.
Moving on to Swiss, the base business, which is the ROW injectable business is chugging along at a quick pace. So the Nine-Month revenue stands at INR232 crores with an EBITDA of INR76 crores, and this business is on-track to deliver its FY ’25 guidance of INR330 crores. Concurrently, we have been building the foundation to accelerate the growth trajectory of this business by adding new revenue streams.
So both Swiss sites were inspected by Halmed in-quarter three and Visa inspection again confirmed for quarter one. And we have initiated the necessary groundwork to commercialize products which are at present leraglutide, aspargenase and streptokinase. These are substantially meaningful markets in the ROW space where Swift has a good channel penetration. So we’ve initiated the groundwork in terms of dossier preparation and filing so that these products can get across to the ROW markets.
We are significantly ahead of guidance in debt reduction. So we have two tables here which compare the debt reduction plan that we shared with you at the start of this financial year and what is the outlook like at this point. So we told you that by the end of this financial year, we will have a net-debt of INR2,600 crores. Crores and we are currently looking at being at INR2,100 crores. This represents a INR500 crore ahead of target.
By mid of the next financial year, we will get to our target number of 1.5 times debt-to-EBITDA. So looking at a net-debt of INR17 crore INR50 crores by the end of September ’25. So the TTM debt-to-EBITDA issues are also moving in tandem. So compared to an opening ratio of nearly 4 times at the start of this year. We will be at around 2x by the close of this year and 1.5 times by mid next financial year.
We are also happy to share with you that our acquisitions have started delivering and this will drive a very exciting EPS inflection point starting next financial year. So on the left-side of this slide, we have summarized the investment cycle of the last four years, which you’re familiar with. Our asset-base expanded from INR921 crores to nearly INR5,500 crores over the four-year period, substantially driven by acquisitions.
The EPS trajectory during the same time is what has been reflected and this was a mix of multiple factors playing out. One is the acquisitions were in various stages of value-creation, especially the ones acquired in February and April. There was a significant amortization and finance cost. The Gohati facility fiscal benefits expired in FY ’24. So we have a sharp increase in effective tax-rate to 25% in this financial year. And all of that resulted in the EPS trajectory being what it is.
Now when we look at FY ’26, we are seeing an inflection point in EPS growth with an EPS growth estimated of more than 50% in FY ’26 due to three factors playing out; one is growth and margin improvement in the acquired businesses; secondly, debt reduction in FY ’25, which is higher than expectation by INR500 crores, thereby lowering the interest expenses next year and tighter capital management.
Post ’26, EPS growth will continue to get amplified each year-by quarter-on-quarter debt reduction and year-on-year declining book-tax rate in addition to operating profit growth, which will happen. These factors also substantially change the ROCE trajectory over the next three, four years.
So again, if I look at the two factors, EBIT and invested capital, a lot of initiatives being taken on both fronts. So return on capital employed, which was at 11% in FY ’24 will end-up at 15% this year, looking at 18% next year and to exceed 20% in FY ’27. And adjusted ROCE, which excludes the impact of deal-related amortization stood at 19% last year, looking at 20% this year and 22% in FY ’26.
Consolidated P&L for the quarter and nine-month period, consol operating revenue of INR727 crores, which represents a growth of 50%, nine-month revenue of INR2,188 crores, again a growth of 50%. In terms of the margin movement, gross margin down by 600 bps due to significant changes in-product business mix. This is on account of Biocon as well as Swiss.
Fixed expenses ratio down by 436 bps year-on-year. EBITDA for the quarter was at INR250 crores, which is a growth of 43%, nine months at INR765 crores, which is a growth of 45%. Book-tax rate was 25.2% for the quarter and 24.3% YTD. OCF to EBITDA ratio of 103% YTD and cash EPS is in-line with previous year’s numbers.
So this brings us to the close of this quarter’s presentation and now we can move on to the Q&A.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. To ask a question, please click on the raise hand icon tab available on your toolbar or on the QA tab available on your screen. Kindly turn-on your microphone when the operator announces your name.
Ladies and gentlemen we will wait for a moment while the question queue assembles we’ll take our first question from Kunal from Axis Capital. Please go-ahead.
Kunal Randeria
I hope — hello. I hope I’m audible. Yeah. Firstly, would it be fair to assume that you’re excluding Biocon 1, the growth will be like close to 8%, 9% for the quarter?
Krishnakumar Vaidyanathan
Excluding Biocon 1, the growth is 11%. Including Biocon 1, it is 12%.
Kunal Randeria
Okay, so which means, okay, the Biocon 1 hasn’t grown or has it degrown over the years?
Krishnakumar Vaidyanathan
It’s a smaller base, Kunal, so it has grown much faster than 12%, but because the salience in the overall base is smaller, so the movement is 11% to 12%.
Kunal Randeria
Right. Okay. Surely. Okay, got it. So then in that case, what would be a Biocon 1 plus two sales for the quarter? I mean, I’m just comparing to the disclosure that you made in the previous two quarters.
Krishnakumar Vaidyanathan
It’s in-line with the disclosures in the previous quarter, so around INR135 crores per quarter after taking into account the insulin shortages. So we continue to chug along at that pace.
Kunal Randeria
Okay. Got it. Secondly, again on the insulin business. Can you share what the market growth rate is today and what are your growth — your expectations going-forward?
Krishnakumar Vaidyanathan
Yeah. So hi, Amit here. So now this is a very interesting question because there are two sides of it. One is the market growth. And the second, we see some discontinuation, some shortage rather, my bag, some shortages which have been created by the largest player and these shortages have been there for quite some time. So that — those shortages are giving us and every other player actually a chance to grow better. So our idea is that human insulins, especially in the cartridges, will give us more room to grow going-forward. And the only caveat is the supply should get back to the right levels, which we think should happen from March onwards?
Kunal Randeria
Right. And Amit, thanks for that. Can you share why the biggest player has created the shortages? Does he himself has supply issues or is it some other factor?
Krishnakumar Vaidyanathan
Kunal, I — I think you should find this out on yourself, but what I’m telling you is what I’m seeing in the market, but you should find this because this is a big thing, this is around INR600 crore INR800 crore market, which I’m talking about. So just do a channel check and see for yourself. What I can tell you that we see shortages and we feel that we will see more of them in the coming time.
Kunal Randeria
All right. That’s interesting. Okay. Just one more if I can squeeze in. Swiss margins have actually gone down by around 500 bps in the last couple of quarters. Is it just quarterly variance or anything you would like to call-out over here?
Krishnakumar Vaidyanathan
Yeah. So it is a function of product mix, Kunal. So when you — whenever — whichever quarter you have more of beta lactum sales, the margins will be lower. So it is something that needs to get optimized and looked at on a year-on-year basis.
Amit Bakshi
So we are on-track, Kunal. We can tell you that we are tracked both in the top-line and at the bottom-line level.
Kunal Randeria
Sure, sure. Thanks a lot. That’s very helpful. Thank you.
Operator
Thank you. We’ll take our next question from Harit from Avendus Spark. Please go-ahead.
Harith Ahamed
I hope I’m audible.
Operator
Yes, please go-ahead.
Harith Ahamed
Yeah. So your comment that synthetic semaglutide will make way for recombinant. Can you give a bit more color on that because my understanding is that most generic companies are focused on the synthetic version. So trying to understand the rationale for that okay.
Amit Bakshi
Okay. No, rational is very clear, Boss, because you know the is based on a large bed and you don’t need columns for that unlike synthetics. So that is more like a physical thing which you have to do. And Bio once the yield comes in, you know it goes on. So it’s a very given — it’s a given fact actually, Arith, that the bio piece is less expensive and more scalable. And also don’t forget, at some point of time, the innovator is also at the — at the same level.
Harith Ahamed
Okay. And then you also mentioned that you are targeting to be among the first wave of launches for. So yeah, where exactly are we in terms of development, have we completed clinical trials? Have we done the regulatory filings? And when exactly is the market formation in India that you’re expecting?
Amit Bakshi
So Harit, you know, we are all aiming the first — the first-quarter in the calendar year of next year, ’26 that is calendar year ’26 and you can very well find out there are seven people who have already applied. There are couple of people where the CT has already started. So I think those are all-in public — public domain now. And we have tied-up with one of them.
Harith Ahamed
Okay, okay. And then last one with your permission. Last quarter, I think you talked about foraying into the broader biologics segment in areas other than insulins such as monochlonal antibodies. So where are we on that front? And if you can share some color on the kind of molecules that we’ll be targeting and the timelines.
Amit Bakshi
Yeah. Sorry, that is like, you know we are actually dabbling into a lot of things. Most of them are in a formation phase as of now. So I just can’t comment on the timeline. But for example, Peg is one-product which we are launching in the domestic market next month, this current month, sorry. And our pipeline today is, you know, is we haven’t seen this kind of a pipeline for the company. So FY ’27, that is next year when semi maybe semi is available, in that year, particularly, we are targeting two more anti-diabetic injectables. But they are still little far off, so we are not comfortable telling you the timeline. But as per the planning, we have those things ready by FY ’27.
Harith Ahamed
Okay. Got it. Thank you, Amit. I’ll get back-in the queue.
Amit Bakshi
Sure.
Operator
Thank you. We’ll take our next question from Kunal Damesha from Macquarie. Please go-ahead.
Kunal Dhamesha
Yeah, can you hear me?
Operator
Yes. Sure.
Kunal Dhamesha
Amit, can you share your thoughts as to how this semaglutide market going to evolve in India in your view? And I mean, based on whatever you are seeing in the antidiabetic market and India is definitely a large market probably for anti-obesity use as well. But there is nothing available or there is no targe addressable market as of now, which we, let’s say, had in DAPA gliflozin or citagliptin, right? So how are we going to tackle? It looks like more like a market creation, right? So what are your thoughts here?
Amit Bakshi
No, Kunal thoughts are very clear. Why — I don’t know why are you asking this? Because if you go through the guidelines, if you go through 2025 guidelines, there are three indications where — sorry, GLP is indicated as the number-one drug now. So it is with obesity and diabetes with ASCVD risk. So if you look at the addressable patient population, that is diabetes with obesity. With obesity, 60%, 70% time it is fatty liver and there is hypertension and some amount of ASCVT.
So we — actually we feel as per the guidelines evolving that GLP will become the first-line of treatment. So where not to give GLP is actually if you look at the guidelines, that is the question because and we are talking we are — in diabetes, we don’t talk of obesity, we talk about ediposity. So if you look at the entire population of ours, we are all thin fat Indians. So what happens to GLP and obesity, non-diabetes is something which we are also waiting to see, right? But when it comes to diabetes I think it’s quite clear how the things would shape up.
So in I think 2025 ADA guidelines, if you don’t, any other guidelines maybe AST guidelines also. GLP is now getting indicated. In fact, the big man of diabetes is now saying that future of diabetes is GLP,, IO and. So that order actually.
Kunal Dhamesha
It comes to patients, but what’s the patient’s willingness or what are you hearing from, let’s say, key opinion leaders in terms of you know moving towards more injectable form of diabetes treatment versus type-2 diabetes typically has been oral form. Obviously, US is a very different market, right?
Amit Bakshi
But look, Kunal, I feel the adoption will be great. I’m only worried about. We are very conscious about our GI. Right. We are hypersensitive and hyper reactive in a manner with how the GI behaves. So that’s one thing which will wait-and-see. But injectable should not be a problem. We have been with RIRA now to — I think two, three months, right? We are now clocking INR1 crores, so it’s no great shakes, but it’s — the adoption is happening better and because everybody knows it’s a matter of time you get once a week. So I don’t feel there is a prephobia and people understand. So the phobia with insulin is more of hypoglycemia than of PRIC. If you remove hypoglycemia from insulin, the PRIC is not as painful. From a patient point-of-view.
Now imagine a product which has no-risk of hypoglycemia. If you over-inject no issues other than the GI side-effects or some other side-effects. So in my view, patient will have a good adoption. People love to see their weight going down and once the weight goes down, all the parameters starts behaving well. So if I put Kunal for a moment weightless into the center and then see the periphery. So there is diabetes, there is hypertension, there is ASCVD, there is PCOD, there is IVF from TCOD, there is joint pain, there is joint replacement. I mean quite a big portion of all these things. In all these cases, it is significantly documented that 5% to 10% of the body weight will give huge advantages. So we don’t know-how would a non in a way if I can say a person who doesn’t have any metabolic issue, how would they look at this city alone from the Jab point-of-view? But when it comes to these population, the adoption is going to be quite good.
Kunal Dhamesha
Yeah, no. And do one for KK on the expectation for our Swiss parental export revenue of around INR330 crore for full-year, that kind of puts the last quarter at almost around INR100 crore. So is there a seasonality there which we should be aware of that business is typically stronger in Q4 or yeah, how should we think about it?
Krishnakumar Vaidyanathan
Because it’s a sizable ramp-up. Yes, Kunal, this is a seasonal business. Q4 is always their heaviest quarter because for the last two, three years in succession. And I think even outside Swiss, wherever there is an export business, typically our Q4 is the Q1 of calendar year in those markets. So because of that, the Jan, Feb, March quarter always tends to be heavy for these kind of businesses.
Kunal Dhamesha
And sir, is it because of some purchase orders that comes in or is it the seasonality of portfolio that kind of works out for us?
Krishnakumar Vaidyanathan
PEO driven. So as I explained before of our fiscal year is Q1 of their fiscal year.
Kunal Dhamesha
Sure. And in that case, if there is a meaningful ramp-up on sequential basis, that should take care of profitability due to the operating leverage kicking-in. Is that fair understanding?
Krishnakumar Vaidyanathan
Yes. So profitability is a function of operating leverage and product mix. So product mix varies quarter-on-quarter, which I have mentioned before? And the other point?
Kunal Dhamesha
Sure, sure. And for these two facilities where a lot of work is going on right Bhopal facility and the Ahmedabad live net, are these facilities currently a drag on your EBITDA and if yes, what’s the quantum of that drag? Will we expect that over next couple of years to kind of —
Amit Bakshi
Yeah, yeah, it is. So what happened last year, Ahmedabad facility was a drag because our utilization was 20%. This time it is the Bhopal wherein the whole thing. So this is a map. This is how the game will be played out. Till the time it becomes functional and start producing, there will be a drag. But it seems — it’s like an every year thing. So we didn’t made a point to kind of separate the expenditure out. But what you’re saying is right.
Kunal Dhamesha
Sure. And let’s say,, two, three years down the line when both these facilities are in-full swing in terms of manufacturing and production, what kind of gross margin delta that you expect for company as a whole?
Amit Bakshi
So I can tell you about the Bhopal because Bhopal in the — in the short-term will be producing all our insulins. That’s what the case is. So insulins at this point of time would be more like a 60% gross margin. Take it, give-and-take something?
Krishnakumar Vaidyanathan
Slightly less.
Amit Bakshi
Yeah, 60% around and we expect this to be at around 72%. So we expect 1,200 basis-point increase in the gross margins.
Kunal Dhamesha
Sure. Then is there a portfolio — so let’s say, maybe the other way to look at with your permission, last question from my end. What proportion of portfolio you think or the proportion of revenue right now you think will be in-house over the, let’s say, next two to three year.
Amit Bakshi
80% in-house. We are aiming for 80% in-house.
Kunal Dhamesha
And currently how much it is? Currently, how much it is?
Amit Bakshi
It is in 60s. It’s come down to 60s. Yeah, but we’ll take it to 80s.
Kunal Dhamesha
Okay. Perfect. Thank you and all the best.
Amit Bakshi
Thank you,.
Operator
Thank you. Before we take the next question, we’d like to remind participants to ask a question, please click on the raise and icon tab available on your toolbar.
We’ll take our next question from Rithika Khandelwal from Perpetuity Ventures. Please go-ahead.
Ritika Khandelwal
Hi. So you have mentioned that your OSD exports will kick-start in FY ’26. So we have largely been our domestic focused formulation company. So what will your strategy be behind this OSD export? And what is the size of the business we are targeting — what is the size we are targeting for this business? And three years out, what will be your ballpark export, if you can throw some light on that?
Krishnakumar Vaidyanathan
So today we are 90% domestic formulations, 10% exports in terms of revenue composition. This might move a little bit here and there in three years, but three years out, I don’t see a substantial swing up because all pieces of our business are on a good trajectory. As far as the addressable market for OSD exports is concerned,
Amit Bakshi
I think it’s too early for us to talk about
Krishnakumar Vaidyanathan
It’s a huge market, but suffice to say that I think we at have always gone for good-quality business, good margin business. So I think that ethos will stay with us.
Amit Bakshi
So it’s too early for this. How much we do in OST, when do we do it? It is just — you need to give us some time to really wrap our head around that. Till this point of time, we are just doing the procedure part and still dabbling with the market. This is not something which we have done in the past. So give us some time to really comment on this.
Ritika Khandelwal
Yeah, I understood. Thank you.
Operator
Thank you. Next question is from Prashan Nayer from Ambit Capital. Please go-ahead.
Prashant Nair
Yeah, hi. Am I audible?
Operator
Yes. Please go-ahead.
Amit Bakshi
Yes, Prashant.
Prashant Nair
Yeah. Yeah, just one question on the cash conversion side. So this year, it has been a lot stronger than in the past. And this is a year where you’ve also started international sales where we typically see slightly longer working capital intensity. So can you elaborate on what has driven this? Is it mostly your own internal efforts to tighten up things or is there any other other factor here? And is this sustainable as we go into the next few years?
Amit Bakshi
So the easier answer is the second question, Prashant. No, it is not sustainable. But we are now looking at more like 80% OCF. This year it has been because of tightening of things, internal efforts. But if this is more like one-time, we’ll come back to that 80% from the next year.
Prashant Nair
All right. Thanks. That’s it from me. Thank you.
Operator
Thank you. Thank you. Ladies and gentlemen, to ask a question, please click on the icon tab available on your toolbar.
Next question is from Gagan from ASK Investment Managers. Please go-ahead.
Gagan Thareja
Yes. Good evening. I hope I’m audible.
Operator
Yes,, please go-ahead.
Gagan Thareja
Yeah. Yeah. So the first question is on the debt repayments. While you’ve given some guidance in the presentation up to the mid of next year, by when do you target to become completely debt-free, how should we think of leverage on the balance sheet?
Krishnakumar Vaidyanathan
I mean, I’m not sure completely debt-free is an objective for us or is it even a good thing to have? That is questionable, but I would not like to discuss that now. But I think in terms of leverage ratio, I think we have looked at INR1750 for end of next financial year. Post that, I think we’ll be below INR1,000 crores based on organic cash flows. So I think the theoretical answer, complete debt-free is I think end of FY ’28 but I’m not sure that’s a desirable objective. I’ll reiterate.
Gagan Thareja
And what’s the current gross debt.
Kruti Raval
Then we actually only give out the net-debt numbers but a gross debt is something that you really need to understand we’ll come back to you offline with that okay?
Unidentified Participant
Why poignants in giving growth and cash separately? I mean, what’s so significant about it not to reveal.
Kruti Raval
Sorry sir I did not understand your question can you please repeat?
Unidentified Participant
You say you do not reveal this is Bharat Shah my colleague also is on the call with me. So this Bharat raising the question. You say you do not give gross — you give only net-debt figure. So I said what is so — why being so coy about giving gross debt and cash and then the net-debt. I mean, there is nothing — nothing.
Amit Bakshi
There is nothing but we’ll tell you the gross just give us some time.
Kruti Raval
It’s just that it’s been a practice for us and most of our peers also to give net-debt numbers because they give us more —
Amit Bakshi
We’ll give them first. Yeah. It takes two minutes.
Unidentified Participant
I’ll connect with that. It’s just a question of time required. Okay, that’s fine. I thought this just being a bit coy about it.
Amit Bakshi
That’s all. No, nobody. We’ll get the numbers down.
Gagan Thareja
Okay. Thank you. Okay. Okay. Sir, I have one more question. Is it possible to give us an idea of how sales in all of your acquired businesses starting from Oaktet and thereafter have evolved from ’24 to ’25 and how are they currently for nine months-to nine months if it’s possible to give an idea.
Amit Bakshi
Mugan, we are not doing that for us. Mugan, we have stopped doing that for ourselves also now. It’s been two years everything has now come together as — so you know, it’s all come together and the come together piece is 12% in this quarter. Anyway, the new business which we have acquired last year, we are — we are giving you the numbers. And by Q4, we will give you everything in terms of the new business. So let it be like that. I mean, mean, it’s all integrated now.
Unidentified Participant
Okay. Right, sir. Thank you. I’m done. Yeah. Yeah, Bhajat again. In terms of your own assessment qualitatively of the acquisition made. What are the things which have more than met with your expectations? And are there any things that might have underwhelmed you?
Amit Bakshi
So, within taking the queue from Gagan, look, a oak that has been oaked at with combination of Glenmark and Dr has been very good. Last year if you –, we gave EBITDA 46% at some point of time for the Derma business. So the Derma business has done very well for us. But if you ask me, it’s the Biocon business which has opened a lot of you know, lot of growth passages for us. Now how much we do in that, when do we do is something which we are working. But the way we think about the business has in a way changed significantly after Biocon and with all the biotech and the new — the complex product. So at a personal level, while on the cash register, Glenmark and Ready has done very well. But from a growth perspective and the future of the organization, I think Biocon has given us a lot of way forward.
Unidentified Participant
Yeah. So strategically, it has expanded your capability in the depth.
Amit Bakshi
Correct, absolute, absolutely.
Unidentified Participant
So I presume based on what you have said that you have no reasons to be pleased with the acquisition in entirety speaking in entirety even more parts which may or may not have fully met with expectations.
Amit Bakshi
Yeah, I can’t — I cannot deny that, but this has been quite gratifying. Both of these acquisitions with Glenmark have been quite gratifying.
Gagan Thareja
Thank you. Thank you. Thank you. Thank you very much.
Operator
Thank you. Next question is from Nandu from Public Alter.
Prolin Nandu
In past couple of calls that the Q2 or H2 would be launch heavy, right? So I just wanted to understand and you gave some color on what will happen in FY ’27 when Sema comes in and couple of more products also come in. So from here on till FY ’27, is our pipeline robust enough to, you know, help us with this kind of organic growth numbers or we will see some volatility going ahead? How do you want to give some color on the pipeline here till the launch of semi and couple of more products that you highlighted previously on the call?
Amit Bakshi
Yeah. So look, this 12% Q3 and 9% nine months. This is not — the organic growth is — this is not something which we are very happy about. We — we have not — haven’t delivered the number, but we had always aspired for 14% 15% growth. So we’ve been working — we are still working on the same on the same path. The only thing is, if you look at how the portfolio has changed in the last one year, maybe last couple of years, we are now getting more-and-more confident of achieving that, especially from the newer products which we are talking about. So if we is 10%, 12% something which will bring a lot of ups and downs, I don’t think so. But the new product which we are talking about is more about taking it ahead of 12%.
Prolin Nandu
So this is a good baseline to work rate, right, going ahead. Is that a fair comment to probably…
Amit Bakshi
Yes. Oh, yes. Sure. Definitely.
Prolin Nandu
Sure, sure. Great. That’s good to hear. And one more question will be on your facility and the in-sourcing there, right, in terms of technology transfer. Are there any delays? Because I thought some of the benefits were to accrue Q4 onwards. Now you are saying that Q1, so are we largely on-track or are there some delays in in-sourcing and some of the margin benefits that we are about to see from that in-sourcing.
Amit Bakshi
Yeah, there has been delays. There has been delays and we actually expected delays, but it has gone a little beyond, but still in control. So our original thought was that in Q4, we will be able to do vials, which will now — which is now shifted to-Q1. We still feel that we will be able to do cartridges in the second-half of the next year. At this point of time, it seems to be online. But the caveat with all these things is because there are too many moving parts, there are licenses, there are multiple permissions, especially in the biotech, there are PV batches, you know, stability, testing, all those things. So there is always a chance of some here and there in terms of timeline.
Prolin Nandu
Understood. Thanks a lot, Amit. That’s it from my side. Thank you so much.
Amit Bakshi
Thank you.
Operator
Thank you. Next question is from Tushar Manodhane from Motilal Oswal Financial Services. Please go-ahead.
Tushar Manudhane
Thanks for the opportunity. Am I audible?
Operator
Yes, Sushar. Please go-ahead.
Tushar Manudhane
Yeah. So just on this arm, where we have completed preclinical studies, I’m not sure if you’ve answered this, but just to understand how long will it take for human trials?
Amit Bakshi
Human trials, so the initial trials will start early. So maybe in the first-quarter of the next year, the human trials will start. But those will be Phase-1, 1, then you will have to go through the entire process. So look, Tushar, this is process. So our best-case scenario is calendar year ’26 end or ’27 early. Okay, am I right?
Krishnakumar Vaidyanathan
Commercial.
Amit Bakshi
Commercial. So ’26 end or ’27 early. But please don’t confuse this with our launch. Our launch is separate, domestic launch is separate and this is separate.
Tushar Manudhane
Yeah, this is for the recombinant semaglutide and probably the synthetic semaglutide is the separate, right? That’s what you are trying to indicate.
Amit Bakshi
Yes, absolutely.
Tushar Manudhane
Given that the innovative product is biological, so the acceptability of the peptide, synthetic peptide in different markets, what’s your sense?
Amit Bakshi
No, Tushar. At the end-of-the day, the bioequivalent studies have been conducted across. So it will be completely unfair to say that at the last mile there could be any — there might be people who would like to use this. So that’s a different thing. But technically speaking, the products are on par.
Tushar Manudhane
Okay. As acceptable by the regulatory approval?
Amit Bakshi
Of course that’s where the whole — I mean, the licenses have already come. So the drug licenses have already — already been received?
Tushar Manudhane
Okay. So secondly, on this insulin Bhopal facility, this because of in-sourcing at least as far as-is concerned, for that particular business, what kind of margin improvement is sort of expected?
Amit Bakshi
So I have told you, Tushar luck, I just told you know the last caller that putting a timeline is difficult. But when all of us — all of this is in-house, which I think should happen in August, September, October. When all of this is in-house, it will be 12 percentage points, which we see. And once the vials come into their vials, 40 IU vials, 100 IU, this around nine iterations here to that. So this will take its own suite time, but we expect September, October kind of time that everything will come together. And once that happens, I’ve given you the numbers.
Tushar Manudhane
September, October next year coming September, October.
Amit Bakshi
Coming September. Yes, this calendar year.
Krishnakumar Vaidyanathan
This calendar year.
Tushar Manudhane
Only on account of. Here we are not considering this cartridge will finish or we are also factoring cartridge will also as well.
Amit Bakshi
Also, also, Tushar. Everything.
Tushar Manudhane
Okay. I meant just only on, if you are — if possible you share.
Amit Bakshi
We will gain some look, vials are 40% of our sales as of now, but it is the cartridges which are growing. While sir also — there are too many SKUs in. So that will be a little too much of a detail. But yes, you will see the improvement coming from Q1, but the whole impact will be seen by the end of September, October kind of timeline?
Tushar Manudhane
Got it, sir. Thank you.
Amit Bakshi
Thank you.
Operator
Thank you. Next question is from from Avendus Spark. Please go-ahead.
Harith Ahamed
Hi, thanks for the follow-up opportunity. So your comment that you expect GLP-1s to become first-line treatment in diabetes. So should we expect a decline or cannibalization of your insulin business as GMP — GLP wants gain more traction in the diabetes indication? And so insulins have a significant business for us.
Amit Bakshi
Yeah, Harit, look, technically what you are saying, one of the indication approved by the ADA is before the initiation of insulin, right? But what is happening is simultaneously even insulin is very underpinated in our country. So we haven’t had a — we have been talking about sulfanol urea going down since last 10, 12 years now, since the time DAPA had come in. But you look at what has happened, it is still sustaining — sustaining well. So the larger point, Arith here is that as a population, we are at 8.5 HBA 1c.
Now understand what is — what is going to happen. This — the target of 7% HBA1c was not made because below seven, there was no benefit. The problem was when you go below seven, you had more hypoglycemias, morbidity and mortality. Because the drugs which were used when the guidelines were formed were hypoglycemic drugs. So there is a whole new set of you know people. I mean, I will appeal anybody of our age who is seeing diabetes. Now your goal is not 7%. You — we should look at medical remission, which is say 5.7, 5.8 HB1c. And this is where GLP will take you. So you can start from a 0.25 and take it to 2.4, 8 times the initial dose and no hyperglycemia.
So what I’m saying is that insulin still is underpenetrated. I don’t — technically what you’re saying, Nick, has a merit, but because there is so much in underpenetration, the glar gene today is very underpenetrated. And I see a trend in the future that glargine will you know, will overtake pre-mixed insulin. And that is what has happened globally, and we also are poised in that direction. So I am positive for insulins as well over the medium-term at least.
Harith Ahamed
Okay. Got it. That’s very helpful. Thanks, Amit.
Operator
Thank you. Next question is from the line of Kunal Dhamesha from Macquarie. Please go-ahead.
Kunal Dhamesha
Hi, thanks for the opportunity again. One on the — I mean, basically on FY ’25 guidance, we had put out a detailed guidance last quarter. So where do we stand-on that? Do we — is there any change in terms of console revenue, EBITDA expectations?
Amit Bakshi
Changing Kunal,, we are on it.
Kunal Dhamesha
So we should assume that INR3,000 crore kind of revenue run-rate, right?
Amit Bakshi
Yeah, yeah. More or less 30%.
Kunal Dhamesha
Okay. Okay. Sure, sure. And just one on the GLP one, while we discussed a lot of stuff, what is your estimate of this market would be in, let’s say, next where does it start in CY26 and then maybe by CY30, you know-how big it can get?
Amit Bakshi
Kunal 30, I don’t know who, but my idea is that we will have 1 million patient. I have said this already. So my field first year would be INR2,500 crores to INR3,000 crores. Okay. First full-year.
Kunal Dhamesha
Sure. And that would assume how many patients, 1 million.
Amit Bakshi
Especially, a million patient and then we have done you know you take three months and there is a dropout rate and all those things. So considering that on different dosages, we feel that one milligram will be a dose which will be taken by a very large population. So all those things. But this is internal assumption based on whatever understanding experience and you know channel check with it.
Kunal Dhamesha
Sure you have some other idea no I didn’t have you know in fact I’m just trying to triangulate what this could be because there is not — I mean, to me, it doesn’t look very straightforward in terms of, you know, India is slightly different market, it’s out-of-pocket and I think pricing might also play a, I mean, important role. But let’s say, since we are primarily into anti-diabetes and we have done what in your view would be the average cost of anti-diabetes?
Amit Bakshi
I’m not answering that.
Kunal Dhamesha
I’m seeing the prescription cost for a week or something yeah on an average.
Amit Bakshi
It’s the same is the same question Munal. I’m not answering that. It’s a foot in the mouth kind of a thing. I’m not answering that, but yes we will be very, very, very, very economical. India, all Indian offering would be very nominical in reach of a significant number of patients.
Kunal Dhamesha
Sure, sure. Great. That’s great to hear. Thank you.
Amit Bakshi
Thank you.
Operator
Thank you. Next question is from Gagan Thareja from ASK Investment Managers. Please go-ahead.
Gagan Thareja
No, my questions are answered. Thank you.
Operator
Thank you. Thank you. We’ll take our next question from Rahul Agrawal from Himalaya Investment Advisors. Please go-ahead.
Rahul Agrawal
Thanks for the opportunity and congratulations on strong execution across the acquisitions and organic growth. My question is more around the organic growth guidance that you just shared, Amit, which is that your aspiration is much higher than 12%. Is that factoring in the opportunity from GLP-1 or is that more driven by these new combinations that you are launching in H2 of this year, which you expect to take you over the 12% line?
Amit Bakshi
Yeah. So more driven by — I’m not even counting GLP as of now because it’s a little far away. It’s driven by the injectable insulins. It is — it is driven by the cardio — the cardiodiabetes space, the grid space between and it is driven by Dherma. These are the three topics.
Rahul Agrawal
Got it. So that INR2,500 crores to INR3,000 crore market opportunity for GLP-1 that comes in year-one like you said, that will be on-top. Whatever share you can win on that, that will be on-top as a big driver in FY ’27.
Amit Bakshi
Yeah, that’s the aspiration, man, but I’m using the word very carefully. That’s the aspiration.
Rahul Agrawal
Got it. Got it, got it. And from a margin profile, we obviously have had good expansion in margin across the acquisitions we have done. But over the next year or two, how much more room do we see in terms of EBITDA margin improvement at a broad level, if you look at it two years out, what sort of EBITDA margin do you see the overall business at?
Amit Bakshi
Yeah, EBITDA, we are doing quite okay with EBITDA. So we don’t see — look, the only thing which we now see in the next year is the — the Bhopal side started — starting into production and then the gain which comes in gross margin. Beyond that, we don’t see any great thing. And look, we are happy with the EBITDA margins. It might expand a bit, but that’s not the idea.
Rahul Agrawal
Got it. Yeah, no, it’s a very healthy margin anyway. So from here on, you are expecting a lot of organic growth coming in and GLP-1 should be a filip. That’s the growth we see from the company from here.
Amit Bakshi
Yeah, I think so.
Rahul Agrawal
I think. Got it. Thank you so much.
Amit Bakshi
Thanks. Thanks very much.
Operator
Thank you. Ladies and gentlemen, we’ll take that as the last question for today. I now hand the conference over to Mr V. Krishna Kumar for closing comments. Over to you, sir.
Krishnakumar Vaidyanathan
Thank you for your participation. To summarize, our Branded Formulations business has delivered a 12% organic growth in-quarter three. The base business EBITDA margin for nine months has increased to 40%, up from 35% for the 37%, I’m sorry, for the same-period last year.
Consolidated YTD revenue stands at INR2,188 crores, which is a 50% growth. Consolidated YTD EBITDA stands at INR765 crores with a 35% margin and 45% growth. On the back of strong cash flows and capital efficiency, we are more than six months ahead of schedule on debt repayment. This combined with several operating levers will soon take us to an exciting inflection point in EPS growth.
Starting FY ’26, EPS growth will get amplified each year-by quarter-on-quarter debt reduction and year-on-year declining book-tax rate. We are confident that our market-leading position in diabetes combined with our strategic investments in biologics and injectables will enable us to create significant value in the GLP space. We reaffirm our business guidance for the current financial year. Thank you and a good evening to all.
Operator
Thank you very much, sir. Thank you, members of the management. Ladies and gentlemen, on behalf of Life Sciences Limited, that concludes this conference. Thank you for joining us and you may now exit the meeting.