Eris Lifesciences Ltd (NSE: ERIS) Q4 2025 Earnings Call dated May. 19, 2025
Corporate Participants:
Unidentified Speaker
V. Krishnakumar — Chief Operating Officer and Executive Director
Sachin Shah — Chief Financial Officer
Analysts:
Unidentified Participant
Kunal Dhamesha — Analyst
Abhigyan Srivastava — Analyst
Prashant Nair — Analyst
Amlan Jyoti Da — Analyst
Tushar Manudhane — Analyst
Ashish Kumar — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q4 and FY25 earnings conference call of Eris Life Sciences Limited. We have with us on the call today Mr. Amit Bakshi, Chairman and Managing Director. Mr. V. Krishna Kumar, Chief Operating Officer and Executive Director. Mr. Sachin Shah, Chief Financial Officer and Ms. Kruti 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 that this conference is being recorded. I now hand the conference over to Mr.
V. Krishna Kumar, Chief Operating Officer and Executive Director of the company. Thank you. And over to you, sir.
V. Krishnakumar — Chief Operating Officer and Executive Director
Good afternoon and welcome to our quarter four business results update. ORUS team. I lost the PPT link. Can you please reshare? Yes, thank you. Sorry I don’t have controls to move the ppt. Ma’ am. Give me a moment please.
Sachin Shah — Chief Financial Officer
Good afternoon everybody. So we start off with the summary of consolidated financial results for the fourth quarter. Consolidated operating revenue for the fourth quarter was Rupees 705 crores which represents a 28% growth year on year. Consolidated EBITDA stood at 252 crores which is a 70% growth year on year. And consoled profit after tax stood at 102 crores which is a 28% growth in quarter four. Our margin and fixed cost synergies continued to accrue. So gross margin was down by 269bps in Q4 which was more than offset by a fixed expense reduction of more than 1000bps year on year.
The Q4 EBITDA of rupees 252 crores represents an EBITDA margin of 36%. Operating cash flow to EBITDA ratio in quarter four was 111%. The ROCE for financial year 25 stands at 15% up from 11% in FY24. Adjusted ROCE, which excludes the impact of M and a related amortization stood at 20% up from 19% last year. Now we’ll go into each of the segments starting with domestic branded formulations. So our DBF segment delivered a 10% organic growth in quarter four. Quarter four revenue stood at 529 crores for the organic base and 73 crores for the Biocon 2 segment resulting in a total DBF revenue of 602 crores and total DBF revenue for the year stands at 2513 crores which represents a 32% growth.
This number represents 97% of our revenue guidance and 98% of our EBITDA guidance. The Biocon business has delivered 11% organic growth in its first year with us. This is a mix of multiple factors. We got a 30% growth in power brands of the Biocon 1 portfolio which is the immunology and the nephrology business. We registered a 21% growth in the insulin power brands Insujen and Basalog and we took a 20% planned decline in critical care which is the lowest margin business in that overall portfolio. We’re also happy to share that we clogged a 22% organic growth in the overall revenue with a total of rupees 300 crores.
This includes our homegrown insulin brands Exulin and Exclar. We would like to share that there was significant product shortage in human insulin throughout the year which we’ve been talking to you about and our estimated sale loss on account of this across the two brands Insujen and Exulin amounts to around 50 crores which is about 2% of our revenue guidance. Moving on to branded formulations EBITDA the total EBITDA of the branded formulation Segment stood at rupees 918 crores in financial year 25 which represents a 40% growth year on year. We have witnessed margin expansion across all segments.
So in financial year 25 the base business ex Biocon clocked an EBITDA margin of nearly 40% which is an expansion of more than 500bps year on year. And the Biocon business which we picked up for an EBITDA margin of 19% ended FY25 with a 24% EBITDA margin which is an expansion of again nearly 500bps year on year. The EBITDA margin of the Biocon segment in quarter four was 25 plus percent and we look forward to further margin expansion in this segment in the current financial year on account of insulin insourcing into our mobile facility. Let us take a look at how the Biocon 2 business which was acquired in April 2024, what does it look like at the end of one year post acquisition? In terms of financial performance, the two insulin brands Basalog and Insulgin delivered a revenue of two hundred and forty two crores which represents a growth of 21% after taking a sale loss of rupees 38 crores because of RHI shortages.
The total revenue across insulins oncology and critical care stood at rupees 386 crores and the EBITDA from this business stood at rupees 76 crores. If I were to recap what has worked really well, I think the best, you know the best and the foremost strategy that we had of becoming a dominant player in the insulin space with the backing of the best supply agreement with a marquee global insulin player that has worked out as per our expectations. The business integration was very smooth. The stock is transition has been managed successfully. We got a 22% growth in the insulin franchise despite the shortages and the vial operations have already been commenced at Bhopal and the cartridges will follow in the later part of this financial year.
In terms of what could have gone better on the critical care piece, we got a lot of gross margin improvement because Swiss parent Risk has started manufacturing a good part of the critical care portfolio. Where we got delayed was building out the domestic go to market strategy. We’ll talk about this more and later in the oncology business we had a significant learning in terms of the product mix and now we are in a better position in the current financial year with new launches lined up. Insulin fill finish. We have spoken to you about this before.
It took longer than anticipated but we are glad that finally it is rolling. So in summary, we look at this acquisition as something that has given us the perfect capability platform with the marquee strategic partner for our diabetes journey. Moving on, we are very excited to share with you this launch pipeline consisting of insulins, analogs, GLP1 and combinations. So we have generic Saxenda and a very important insulin analog slated for launch in the first half of this financial year. We have got a premixed version of the same analog and a GLP slated for launch in the first half of financial year 27.
And we have one more analog and GLP combination in the pipeline which we expect will come through in financial year 28. Our diversity strategy is progressing in line with our expectation. You know we have launched liraglutide back in September 2024 for diabetes and in this quarter we are targeting the first generic launch in India in the obesity segment. Specifically we are talking about G Succenda which is the obesity formulation of liraglutide. It is worth noting that you know, unlike the western world, Indian obesity is moderate in nature. So most obese Indians don’t need more than 10 15% weight loss and even this gives huge dividends on metabolic health.
And if you look at safety data, Saxenda has the best safety data among GLPs and it is the only GLP approved for adolescents. Most affordable therapy versus Innovator alternatives and the marketing authorization for this product is owned by ERIS and backed by an exclusive supply agreement with biocon. As far as Semaglutide is concerned, all work streams are on schedule for an FY27 launch. So we’d like to recap that we’ve invested significant time and effort in creating the so called right to win in GLPs because we have seen world over that an insulin company is the logical owner of the GLP segment.
Because physicians and patients have stronger affinity for insulin brands and companies versus orals and selling insulins and GLPs is not akin to selling oral products. There is a significant component of patient and service care, patient service and care and this is where we believe that we have pioneered and we stand out from the rest of the market. There is significant upside to be had in the current and the subsequent financial year from the disruption in the human insulin market. None of us are strangers to these headlines. There is a human insulin cartridges market worth more than 450 crore per annum in revenue which is being vacated by the Innovator and we are positioned with two large insulin brands with monthly revenue run rate of 23 crores.
We have bulk supply commitment at the highest level from our strategic partner biocon. We are tracking to commission our own cartridge facility at Bhopal by the end of this year. So we believe that we can take 200 to 300 crore per annum of this opportunity starting the second half of this financial year. Anti Diabetes remains a huge huge focus for us. We’re targeting a market rank of number three in the next three financial years. We have the full portfolio in oral and now building up in injectables. Presently we are at market rank 5 and we have doubled our market share from 3% to 6% in the last three years.
We have a share of 10% in insulins and our oral solid combination pipeline has been gathering momentum. We have novel products like Ezac Serenone in the pipeline which will come through for a Q2 launch. And we have a formidable commercial engine consisting of a field team of 1200 misses across five divisions. One of the largest diabetes focused field in the country. We made several investments to recharge our base business. We have created three new divisions this year, two of them in the VMN therapy called Rise and Sprites. The objective is to create more focus on VMN power brands through greater penetration, more coverage of doctors and expanding the product portfolio.
We have launched a new division called BioArt which is our play in the rapidly growing IVF therapy market and the organization has been aligned into two spus with several senior hires to strengthen leadership and this is probably the first instance in the last five years of significant people investment in our base business. Happy to share that there has been rapid progress in in sourcing which provides additional tailwinds to margins. So on the leftmost side we are showing you the picture in FY22 where we used to produce 80% of whatever we sell in house and this ratio declined to less than 50% in April 24 following multiple acquisitions.
But through the last financial year we have been diligently taking products in so the in house Production stood at 66% as of March and by the end of quarter four of this year we’ll be back at 80%. Coming to our DBF guidance for this financial year we are guiding to an organic revenue growth of 15 to 21% depending on the gains in human insulin which will start in the second half of this financial year. So to recap our FY25 base was rupees 2513 crores and our FY26 guidance is in the range of 2900 to 3050 crores.
This is after absorbing returns of around rupees 60 crores because of certain FDCs which have been banned and there is an at risk launch product Linearis E where there will be some returns. The DBF EBITDA margin we are guiding to an ebitda margin of 37% and there will be a significant margin expansion in our insulin segment. As we’ve discussed before some of the key drivers of organic growth would be the first in market launch pipeline of more than 10 products which have formulation innovations, key new launches in diabetes including Saxenda, insulin, analog, empa etc. The VMN expansion, the new division in IVF we have our super specialty hospital segments which will start firing this year and we are looking at a critical care reset in the second year post deal where our strategic vision remains to create a large injectable franchise ex Diabetes and we have several interesting products in the pipeline for launch this year.
So against FY25 revenue of 2513 crores with an EBITDA of 918 crores we are guiding to FY26 revenues of 2,900 to 3,050 crores and EBITDA of 1070 to 1130 crores. Moving on to Swiss Parentals business Update at the end of one year financial performance is largely in line. We got 99% of our revenue guidance and 95% of our EBITDA guidance. Swiss has already started manufacturing the IRIS portfolio. Critical Care range began very early on in the year and we are currently having the validation ongoing for GLPs. We have created two new business units to leverage the global distribution reach.
One is the OSD exports from Aris Ahmedabad site to Row Picks and Latam Markets. We are building a CDMO business targeted at EU customers. Both ERIS and Swiss facilities have been inspected by ANVISA in April and May this year and we are targeting to commence shipments from the last quarter. The organization has been strengthened both in terms of the front end customer facing side and the RD side and we have started investing for the future in terms of a unit 3 which is an injectable block we are creating at ERIS Ahmedabad campus. So net net our take at the end of one year is that this is a significantly underappreciated business in which we have made several investments whose full potential will be realized starting FY27.
Some more color on the financials for Swiss so quarter four revenue of 93 crores and quarter four EBITDA of 34 crores taking the annual total to 326 crores of revenue which represents a 12% growth and an EBITDA of 109 crores which represents a 40% growth continues to do well on return ratios and we spoke to you about the expansion that we planned in Eris Ahmedabad site. We are guiding to a 15 to 20% revenue growth this year. So 375 to 390 crores revenue with an EBITDA margin of 35%. We continue to remain ahead of guidance in debt reduction.
So we declared a dividend of 100 crores in quarter three was that net debt at the end of the year stood at around 2,200 crores and from here on we are looking at getting to 1800 crores of net debt which would be one and a half times debt to EBITDA by the end of the current financial year. There will be an exponential EPS growth over the FY26 to FY28 period driven by multiple factors including growth, margin improvement, debt reduction, better working capital management, higher operating cash flow. This will be accompanied by a corresponding increase in our return metrics as well.
So for the financial year 26 we are looking at an ROCE of 17% and an adjusted ROCE of 22%. This brings us to the console PL for the and the financial year so 705 crores consoled revenue for the quarter and 2894 crores for the full financial year Q4 EBITDA of 250 crores, 252 crores and FY EBITDA of 1117 crores representing a growth of 51%, quarter 4 PAT of 102 crores and full year PAT of 375 crores. We incurred a capex of 263 crores in the financial year including 100 crores paid for the Bhopal site acquisition.
We had a book tax rate of 23.4% over the financial year. Operating cash flow stood at 105% of EBITDA for the financial year and the cash EPS for the year stood at rupees 40 up from rupees 38 last year. Summing up our key business priorities for this year, the first priority being anti diabetes we would like to make sure that we are well positioned to leverage the market opportunity in RHI cartridges, secure all building blocks for diversity, make sure we achieve our regulatory milestones on our Insulins analogs GLP pipeline, complete the insulin in sourcing and continue driving our distinctive pipeline of first in market OSD combinations.
On the base business we would look forward to scale up the new divisions and deliver market leading growth with sustained margin expansion. On the international side we target securing an VISA approval for eris, Ahmedabad and Swiss facilities, strengthen our CDMO pipeline and commercialize starting quarter four from both the sites. We look forward to commercialize our injectable expansion and initiate GLP validation from Bhopal starting quarter four. On the balance sheet we look to achieve our target net debt to ebitda ratio of 1.5x by the end of the financial year. Closing up our business guidance for FY26 consolidated revenue in the range of 3325 to 3500 crores which represents an growth of 15 to 21%.
Consolidated EBITDA of 1190 to 1255 crores which represents a 36% margin. We are guiding to a consolidated eps growth of 50% and a return on capital of 22%. Adjusted at this point we are looking at a capex of 200 crores in this financial year. The key items would be in the new injectables block and GLP validation. That brings us to the close of this presentation. Thank you for your time. We can now move to Q and A.
Questions and Answers:
operator
Thank you very much sir. 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 mic when the operator announces your name. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Kunal Dhaamesha from Macquarie. Please go ahead.
Kunal Dhamesha
Can you hear me?
V. Krishnakumar
Yes, we can hear you. Yeah.
Kunal Dhamesha
Hi. Hi. Thanks for taking my question. The first one on the insulin business. Correct me if my understanding is, you know, right or not here because I believe we lost around 50 cr of sales because of supply shortage of which 38 crore was within Biocon 1 business. Is that correct? Understanding Biocon 2.
V. Krishnakumar
Yeah. 38 crores. Okay. And, and we expect now that whatever market is being vacated, we’ll be able to capture maybe one third to one half of that in the same segment. So what is our confidence level? What is going to change here below in terms of supply? I know there is a Bhopal capacity coming up but if you can share the numbers as to, you know, what is our capacity in terms of number of vials and eventually number of cartridges would be great.
Sachin Shah
So Kunal, what we have done is that while all this was going on we had been asking for a large one time supply which happened in March, which was in the ds. So we have reasonable quantity of DS as of now. Now we are only sorting for the DP which is the finished product. So we are trying to, you know, you know, get to certain things in dp. We feel that the markets would be able to sustain till July, August, post then post that we will see the shortfall coming in. So what I can tell you as of now we are, you know, we seem to be in a.
Kunal Dhamesha
I’m sorry sir, we lost your audio. A little bit of here and there in this, in this business. But we are more secured on the deal. Is it okay now? Yes, so much better. Is it okay now? Oh, thank you. So Kudal coming back. So the good thing is that our DS is in place which is a, which is a big part of a problem. The DP is something which we are.
V. Krishnakumar
We are losing you in between.
Kunal Dhamesha
Sir, your audio is gone. I mean like we couldn’t hear you. I’m sorry sir, we lost your audio. Can you please try reconnecting your audio?
V. Krishnakumar
Yeah, I don’t think I am also able to hear Amit.
operator
Ladies and gentlemen, I would request you to please hold the line as the management is trying to reconnect their audio. I Would request all the participants to please hold while the management is reconnecting their audio. IT. Ladies and gentlemen, please hold the line while the management is trying to reconnect the audio. Participants, please stay connected while the management is reconnecting the audio line. IT. Sir, can you please unmute your audio and speak now. IT. Kunal, please stay connected. The management will reconnect shortly.
Kunal Dhamesha
Sure, sure. Thank you.
operator
IT. Ladies and gentlemen, we are sorry for the inconvenience. Please hold the line. The management will be connecting shortly. Participants, please stay connected while the management is reconnecting shortly.
Kunal Dhamesha
IT. Join to the conference by that speaker link. Ma’ am, we are connected. Kindly proceed. Sure you can hear us now? Yes, ma’ am.
operator
Okay. Can we take the next question please? All right, ma’ am. Thank you. Kunal, do you have any further questions?
Kunal Dhamesha
Yeah, yeah, yeah. So I think the first. The answer to the first question was not very clear because of the, you know, intermittent connection issues. Yeah, yeah.
V. Krishnakumar
So Kunal, I’ll quickly answer that. So I. I was talking to you that the DS has been secured. This time last year we had been struggling for the DS also. So we made enough effort to secure the dso. So we are well secured for the. And this DS that we have secured, you said will run us through maybe June, June, July. This is what we are saying. And then we need another DS supply.
Kunal Dhamesha
Punar, Are you not able to hear us in between?
operator
The line is dropping. Okay, okay, okay. So Kunal, we have actually secured the DS this time.
Kunal Dhamesha
Right now I can give you some.
V. Krishnakumar
Confidence on 50 to 60% of the demand we could be able to supply. And some of it is still working progress.
Kunal Dhamesha
Okay, okay. And then, you know, second one, just more clarity on the critical care business. The planned reduction of 20%. And I think, you know, KK also mentioned that, you know, there’ll be more details on this. So I just want to understand, did we plan to get some of the Swiss product into the channel but we were not able to. How should we think about this 20% plan reduction in critical care business? And what is the, you know, plan ahead to kind of, you know, get back the lost sale here?
operator
It was not. I’m sorry to interrupt you. Your voice is muffled and there is a follow up. How about this?
Kunal Dhamesha
Is this clear now?
V. Krishnakumar
Yes, ma’ am. Much better.
Sachin Shah
Okay, so Kunal, critical care piece went wrong for us because of the go to market. Right. We had a little bit of a bandwidth issue and you know, this is something new for us. So we were trying to figure out, even today it I will take another one quarter to kick up kickstart that. But I have been telling you, and I’m telling you again that the injectable piece is a very important thing for us. In the past, the non insulin injectable. So there was a little bit of a learning gap which we are kind of going through, say a quarter from here.
We should be better off.
Kunal Dhamesha
Okay. And lastly, if I may just squeeze in one more, the domestic business margin guidance of 37% versus I mean so which basically means around 50 basis point expansion on FY25.
V. Krishnakumar
Right. But we are expecting almost around 800 to 1000 basis point improvement in insulin business which is roughly, you know, 242 crore out of 2500 crore. So what is the gap? Ideally our margins at a console level just because of insulin should also improve by you know, 80 to 100 basis point and then maybe some operating leverage benefit. So what is some, some, you know, impact or a drag which I’m missing here, Kunal?
Sachin Shah
Couple of things. Look, number one, this 800,000 which you see the large part is the cartridges and the cartridges will kick in in Q4, that’s the commentary. Number two, you see, we have added 300 people this year and you know, initially this is, this is a strain to the EBITDA line. So keeping all these together, we think 37 is a safer number. Can we do little more than 37? The answer is yes. But right now we would commit to 37.
Kunal Dhamesha
Sure. And all the best. Thank you.
V. Krishnakumar
Thank you.
operator
Thank you. Participants to ask a question, please click on the Raise hand icon tab available on the toolbar or on the QA tab available on your screen. A reminder to all the participants to click on the Raise hand icon tab available on your toolbar or the QA tab available on your screen to ask a question. It. A reminder to all the participants to click on the Raise hand icon tab available on your toolbar or on the QA tab available on your screen. The next question is from the line of Abhigan Srivastava from Marcellus Investment Managers. Please go ahead.
Abhigyan Srivastava
Am I audible?
operator
Yes, you’re audible. Now please proceed.
Abhigyan Srivastava
Yes, sir. With, with Novo leaving the market for insulin cartridges, there are several products in Novo’s portfolio which, which are substitutes for the products which they are removing in, in this regard. Why do you as Eris’s management believe that you can fill in that gap when Novo already has substitutes in its portfolio?
V. Krishnakumar
So it’s a very simple answer. Substitute are either going back to the vials or, you know, it’s around 4x of the monthly therapy cost of a premixed insulin or a human RHI insulin. So which we think is a stress. And this was, this had happened, this was happening for quite some time actually. Our belief is whatever shift had to happen would have most likely happened. So that. Those are the numbers.
Abhigyan Srivastava
Got it. Okay, thank you.
operator
Thank you. Please click on the raise hand icon tab available on your toolbar or on the QA tab available on your screen to ask a question at this time. The next question is from the line of Dikshant P from DB Wealth. Please go ahead, Dikshant. Please proceed with your question as the participant was not answering. A reminder to all the participants to ask a question. Please click on the raise hand icon tab available on your toolpath bar or on the QA tab available on your screen. The next question is from the line of Prashant Nair from Ambit Capital.
Please go ahead.
Prashant Nair
Yeah, hi, my question relates to Swiss parent. So you mentioned that Anvisa has inspected the Swiss parents plant as well as your Ahmedabad unit. So when we look at the exports opportunity for you, what are the next steps? Have you already started filing registrations for the ERIS products in emerging markets or is that yet to happen? And how should we see this over the next, say two to three years?
V. Krishnakumar
Yeah. So Prashant it is. I’ll speak for the, for the OSD please first and then we’ll come to Swiss. So for Swiss it is more like a continuation at this point of time and we have said whatever we wanted to say. The OST piece is a very large piece and we are hopeful that in the next couple of months we should be through with, through with N Visa, which will open up very large markets for us, especially through the distribution channel of Swiss. So we are planning some products but we haven’t taken any of them as of now.
So that process will start once we start, once the approval is in place and we start getting people. But there are prospective customers, clients to whom we are talking.
Abhigyan Srivastava
Thanks. And when you mentioned CDMO opportunities in Swiss. So what kind of contracts would these be, Prashant? These are contracts for specialty products. We started off with injectables because that’s where there is a legacy of Swiss. So these are typically three to five year contracts for specialty products with EU clients, large generic companies or generic divisions of innovator companies, and for supply in the EU markets. That is what we are starting with. And now these discussions have progressed where those clients are asking for some oral solid products as well. So that we are starting to develop at our Aries R D site.
And eventually that will be used to trigger the EU inspection for Aries Ahmedabad. So that is the trajectory. Yeah.
V. Krishnakumar
Thanks.
Abhigyan Srivastava
Thanks.
operator
Thank you. The next question is from the line of Amlan Jyoti Das from Nomura. Please go ahead. Yes, please proceed.
Amlan Jyoti Da
Yeah, so my question is regarding generic Liraglutide. So I just wanted to understand what market size you are thinking for this launch. Q1 FY26 launch. And how do you think this particular product will ramp up in the next year? That is my first question.
V. Krishnakumar
Yeah. So look, we find the generic Saxenda being very apt for the Indian market. That is what we have spoken in the slides also. But at the same point of time, we don’t find this opportunity to last for long. We feel once the generic Sema comes in at the price point which people are anticipating, then the generic Saxenda will not be as acceptable as it is today. But for the meantime, you know what. What it does is basically bridges a huge gap of a low cost Indian patient kind of a product. And it actually helps us to kind of warm ourselves for the big GLP storm.
So that’s how we see it in the first year of launch. We are considering it largely till March and then it might start tapering off a bit. So that’s how the market is.
Abhigyan Srivastava
Okay, so you think when Sema comes then desperate to see a cliff as of now?
V. Krishnakumar
Yeah, I believe when generic 6 comes. The way we are. Sorry. Generic Sema comes. This should taper off.
Amlan Jyoti Da
Thank you.
operator
Thank you. The next question is from the line of Tushar Manudane from Motilal. Usual financial services. Please go ahead. So there is a lot of disturbance at your background. I would request you to please talk from the quiet place. No, sir, still there is a disturbance.
Tushar Manudhane
Maybe I’ll continue with the question if. Sure. Sir, I. I would request you to kindly rejoin the queue. Okay, thank you. We’ll take the next question from the line of Ahmed Madha from Unify Capital. Please go ahead. Mr. Ahmed, I have unmuted your line. Please proceed with the question as the current participant is not answering. We will move on to the next question which is from the line of Yash Mehta from Malabar. Please go ahead.
Tushar Manudhane
Hi. Thank you for the opportunity. On the Biocon 2 acquisition, the base of. At the time of acquisition, the base of revenues was around 360 crores. In the presentation we have written it, we accomplished like 11% odd growth in the acquired franchise. But the revenue number is 386. Can you help me understand the reconciliation for the same.
V. Krishnakumar
Oh yes, yeah. Hi ash. The 11% revenue growth that we’ve shown is for the overall biologics. Biocon biologics business which includes Biocon 1 and Biocon 2 because the base for that business was of the order of 450 crores on Biocon 2 in isolation you’re right, the growth is 386 upon 360. That is 7%.
Tushar Manudhane
Understood. And, and sir, in terms of let’s say the drug product and drug substance question that was asked earlier. I understand the drug substance has been supplied by Biocon and which is a 10 year supply arrangement. 3. Sorry, 3 year supply arrangement. I’m just wondering why is it a shortage till July or August? I’m not completely sure of the market dynamics would be helpful if you can help me understand it.
Kunal Dhamesha
Yeah. So it is a 10 years, it’s a 10 year supply agreement. That’s the starting point. And we went through shortage because I mean I think it’s in the public domain now that last year there were some countries where there was a little bit of a chaos for insulin like Malaysia being one of them. So a lot of supplies had to be managed between couple of countries because what we might see in India now was witnessed in some of the other markets globally. So and you know viacon is a global player, it’s one of the largest suppliers of insulin.
So I probably that was the reason we went through you know, a couple of months of poor supply.
Tushar Manudhane
Understood. But they are in a position to continue delivering this to us over the next 10 years, right?
V. Krishnakumar
Yes, that’s, that’s the assumption which we are making. We are quite confident.
Tushar Manudhane
So the shortage of my question sir was that that 38 crore was not because Biocon failed to supply, it was related to the drug product. Is that a fair assumption to make or am I wrong?
V. Krishnakumar
It was a mix of both. The thing, look right now we are getting the drug substance from biocon and we are also using their LL for manufacturing. So it’s like both are connected together. But primarily there was a drug shortage issue and then there was a drug product issue. So it was a mix of both of them.
Tushar Manudhane
Okay, understood. And sir, if you can help us understand this drug product in terms of we’re moving from an LL to kind of having our own facilities. There’s a Bhopal facility and there’s obviously Levim and Khemin both. Just to understand the full integration would be helpful to understand from you as well.
V. Krishnakumar
Yes. So right now living is something somebody who is developing the newer products, the newer analogs and other GLPs for us.
Tushar Manudhane
Let us keep it separate.
V. Krishnakumar
The substance in the products, you know, the chemistry is like this. That because this is biotechnology you have. There is a rigorous regulatory process which is involved. So what happens when you start a new, new plant? You have to take PV batches first, then put it into stability, then they go for testing. Then there is a, you know, audit and after, subsequent to the audit the licenses are released. So that’s the entire process. So in Bhopal what we have achieved so far is we are very near to the licensing stage for the final manufacturing for vials.
So this is the first thing. Once we achieve the vial, then it will start coming from Bhopal licenses. The next round will come when the cartridges will happen. The same thing will repeat for cartridges. You will have to take the PV batches, you know, have stability, then it will go for testing and then the licenses would come. So this is the entire process.
Tushar Manudhane
Fair enough, sir. And if I can ask one more question with your permission, then I would like to kind of understand, sir, of critical care. You said the quest, the problems over the go to market side. So can you just elaborate on what kind of issues there were? And in terms of your focus on this vertical, is it an India focus or is it largely through the Swiss parental export focus? That would be helpful.
V. Krishnakumar
No problem. So all of this is India. There’s nothing like export there. So we were dealing with a couple of issues. Guys, look what happens when this business was almost zero EBITDA and a very low GC margin as per our standards. So at one hand we had to improve the margins. We had to take the products which were not giving us a lot of gross margins out and then develop the newer product with higher margins. So that is, this cycle was not, we were not able to complete this cycle. So going through this year, the idea is to bring build up brands which have a relatively high gross margin so that our EBITDA could, you know, we could get a fair bit of ebitda.
So the juggle between the product, the EBITDA and the gross margin, that is something which we were solving for for the last year and we haven’t been, you know, right up there.
Tushar Manudhane
Fair enough. That clarifies a lot. Thank you very much for answering my questions.
operator
Thank you. The next question is from the line of Ashish Kumar from Ampersand Capital Investment Advisors. Please go ahead.
Ashish Kumar
Hello. Hello.
V. Krishnakumar
Yes. Yes.
Ashish Kumar
Yeah, hi. Thanks for taking my question. My first question Is if we look at the IPM data for April month. Our value growth is below 5% and. Volume actually has declined. So when can we expect this to.
V. Krishnakumar
Pick up going forward given the mix. Of the strategy that you have like highlighted. And the second question is our cash generation for this year as well as next year like is projected to be strong. So can we see a more accelerated reduction in debt compared to what you have currently guided for? Thank you.
V. Krishnakumar
So the answer for question number one is that, you know, this is a caveat. Please don’t look at the market reflection at this point of time. It’s a little all over the place and I feel largely it is happening because when you acquire a company you change the distributor set and once you change the distributor set it takes a certain time for the new algorithm to set up. So we have also raised similar, you know, similar issues but I think it might take some time to settle. So what you are seeing in the data might not be the right reflection of what is actually happening.
So every quarter we anyway give results. So please bear with us for a couple of quarters till we reset the whole thing. Number two, the cash generation this year has been good but we still guide for, you know, that 75, 80% OCF and right now whatever we have, you know, showed you in the slide in terms of debt reduction, we stick to that.
Ashish Kumar
Thank you. That’s all from my side.
operator
Thank you participants. To ask a question you may please click on the Raise hand icon tab available on the toolbar or on the QA tab available on your screen. Please click on the Raise hand icon tab available on your toolbar or on the QA tab available on your screen to ask a question at this time. It. Ladies and gentlemen, as there are no further questions from the participants, I would now like to hand the conference over to Mr. V. Krishna Kumar for closing comments. Thank you. And over to you sir.
V. Krishnakumar
Thank you all for your participation today. In summary, We’ve delivered a Q4 console revenue of 705 crores with a 28% growth. Q4 console EBITDA of rupees 252 crores with a 70% growth and a 36% margin. Q4 profit after tax of rupees 102 crores with a 28% growth. Operating cash flow stood at 105% of EBITDA in quarter four. The business delivered an ROCE of 15% in 25 up from 11% last year. Net debt as on 31st March 25th was 2,200 odd crores, almost 400 crores lower than our guidance. We expect to achieve a net debt to ebitda ratio of 1.5x by the end of FY26.
Our DBF business has delivered an FY25 revenue is 2,500 plus crores, growing 32% year on year with an organic growth of 9%. DBF EBITDA margin is 36.5% up by more than 200bps year on year and the base business EBITDA margin is nearly 40%. Swiss Parent Trails has delivered a revenue of 326 crores with an EBITDA of 109 crores for FY26. We are guiding to a 15 to 21% organic revenue growth with a consolidated EBITDA margin of 36% and a 50% growth in EPS. 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 ERAS Life Sciences Limited, that concludes this conference. Thank you for joining us and you may now exit the meeting. Thank you. It.