Gland Pharma Limited (NSE: GLAND) Q3 2026 Earnings Call dated Jan. 28, 2026
Corporate Participants:
Shriniwas P Dange — Head of Investor Relations
Srinivas Sadu — Executive Chairman
Shyamakant Giri — Chief Executive Officer
Ravi Mitra — Chief Financial Officer – India Office
Alain Kirchmeyer — Chief Executive Officer – Cenexi
Analysts:
Tushar Manudhane — Analyst
Tarang Agrawal — Analyst
Neha Manpuria — Analyst
Bino Pathiparampil — Analyst
Ashish — Analyst
Sajal Kapoor — Analyst
Saion Mukherjee — Analyst
Abdulkader Puranwala — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to The Glan Pharma Limited Q3FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing Star then zero on your touchstone phone. I now hand the conference over to Mr. Srinivas from the Investor Relations team. Thank you. And over to you sir.
Shriniwas P Dange — Head of Investor Relations
Thank you, Raiyo. Good evening everyone. We welcome you to Bland Pharma Earnings conference call for Q3 of FY26. I am Srinivath Range from the Investor Relations team at Glant Pharma. Today we have Mr. Srinivas Sadhu, Executive Chairman, Mr. Shamakan Giri, Chief Executive Officer, Mr. Ravi Mitra, Chief Financial Officer from India Office and Mr. Ella, CEO of Senexc who is connected virtually from France. We will begin the call with the business highlights from Mr. Sadhu followed by operational highlights from Mr. Giri. This will be taken up by updates about Senexc from Mr. Allah and lastly the group financial overview by Mr.
Ravi. Before we proceed, I would like to remind everyone that some of the statements made today will be forward looking and are based on management’s current estimates. These statements should be considered in light of the risk associated with our business. This call is being recorded, the playback and our website. Shortly I hand over the call to Mr. Sadhu for his opening remarks. Over to you, sir.
Srinivas Sadu — Executive Chairman
Thank you, Srinivas. Good evening everyone and wishing you all a very happy and prosperous New Year. Welcome to Glan Pharmace. Earnings call for Q3 and 9 months entered FY26. I will begin with a brief strategic overview following which our CEO Mr.
Shamakant Giri will provide operational updates. Alan will then share an update on Senexi and Ravi will walk you through our financial performance. Now let me give you our performance overview. I’m pleased to report that quarter three FY26 was a strong quarter marked by solid revenue growth and improved profitability reinforcing our confidence in full year FY26 performance. During the quarter, revenues grew by 22% year on year to Rs. 16,954 million with broad based growth across businesses including Senexy. Adjusted EBITDA increased by 25% year on year to Rs. 4,490 million supported by higher base business revenues, continued traction in CDMA programs, cost efficiency initiatives and a visible EBITDA turnaround at Synexy for the nine months ended FY26 revenue grew by 12% while adjusted EBITDA increased by 26%.
This reflects strong execution, better operating leverage and disciplined capital allocation. We remain confident in sustaining this momentum supported by upcoming product launches, ramp up of recently secured CDMO contracts and incremental contributions from new capacities. Looking at the growth drivers and pipeline expansion, we are significantly expanding our cartridge fill and finished capacity from 40 million to 140 million units. Beyond cartridges and GLP1s, our pipeline of complex products including hormones, suspensions, peptides, RTU bags, co development programs, biosimilars and specialty injectable platforms provides long term growth visibility. We also secured multiple new CDMO partnerships across oncology, peptides and pre filled syringes.
What are our strategic focus areas? Our strategy is anchored on growth capability, efficiency and RSE with a clear objective of building landformer into a high end innovation led CDMO and specialty injectables company. This translates into focus on CapEx and brownfield expansions to build differentiated capabilities R and D investments to strengthen the product pipeline, cost efficiency initiatives to protect margins, new contract wins to drive sustained revenue growth and senexy turnaround to enhance profitability on the crownfield expansion front over the next five years we plan to invest approximately rupees 2000 crores in capex primarily towards BSS and opanmic lines as well as Capex towards CDMO contracts.
Brownfield expansions will include new lines, lyophilizers and additional warehouse capacity. India’s pharmaceutical industry is undergoing one of the most exciting transformations in global healthcare. Rising guarantee investments are fueling complex molecules, novel therapies and deeper manufacturing capabilities. This is not just growth in strategic evolution. India Pharma is moving from being the pharmacy of the world to becoming a global innovation hub. Our investments are aimed at not only to support growth of base business but strong pipeline of CDMO contracts but also pipeline of complex differentiated and higher value products and will help us grow not just from volume LED but also from valued at products as well.
Selective and disciplined capital deployment will ensure strong roce, healthy cash generation and effective working capital management. Cost efficiency and margin sustainability is key to success while driving growth, maintaining healthy margins remains a key priority. Our cost savings initiatives include yield improvement, alternate vendor development, alternative energy sourcing, enhanced line efficiencies, operational excellence programs and automation. These measures typically deliver savings of 1 to 2 percentage points helping offset any pricing pressure or product mix impact. Sustained baselines are supported by process optimization and alternate API sourcing portfolio rationalization focusing on higher margin products reallocation of capacity toward complex and niche formulations, increased automation and digitalization to improve productivity and reduce waste.
R and D is also becoming a core differentiator both in speed and delivering differentiated products. For gland. Our R and D investments continue to increase reflecting our commitment to differentiated pipeline. During this quarter we invested 5.4% of revenues in R and D primarily focused on complex injectables, advanced delivery systems and platform based development. We filed nine NDAs, received four approvals and launched 10 new products in the US. Our RTU bag portfolio continues to scale with 20 products filed, 16 approved and 13 under development addressing an estimated market opportunity of $685 million. Our core development pipeline now includes 15 products under active development across high potential categories including seven 500 and five E2 filings and eight ANDAs reinforcing our focus on differentiated injectable platforms.
There are new contract wins during the quarter. Long term growth is being driven through new, superior and technically differentiated CDMO contracts with large pharma companies in licensing opportunities for complex products and expansion beyond traditional B2B models. We have entered into a few long term CDMR contracts for already commercialized products by these required dedicated lines. It can add revenues over the medium term with durable revenue visibility. In the GLP1M carti segment, newer partnerships are getting added further strengthening our medium to long term growth outlook. I am pleased to inform you that our partner has received approval for Liraglutide in the US and we are ready for the US launch this quarter on Senaxi turnaround update.
Senexy delivered revenues of 50 million euros and EBITDA of euro 1 million during the quarter in line with our guidance. Performance improved through focused capacity debottlenecking, contract repricing to account for inflation, workforce optimization, higher utilization and deeper operational integration with land. We continue to see steady progress in stabilizing the business and building a foundation for profitable growth with additional synergies expected over the coming quarters. We expect SYNEXI to remain on a growth trajectory through the mid to long term. The overarching objective of these initiatives is to enhance not just scale, also the quality of earnings and capital productivity ensuring sustainable value creation for shareholders.
Our strategic direction remains clear to build Glantoment, a global innovation led injectable and CDMO company that consistently delivers revenue growth, margin expansion and superior capital efficiency. Thank you for your continued trust and support. I will now invite our CEO Mr. Shamakant Giri to share his perspective on the operational and business performance.
Shyamakant Giri — Chief Executive Officer
Thank you Mr. Sadhu. Good evening everyone and My best wishes for the New year. Thank you for joining us today. This was a strong quarter with 22% revenue growth and solid profitability. Adjusted EBITDA margins were 26% and adjusted PAT margins 16%. Growth was broad based with strong results in both Glance Core Business and sunexc where we met our near term quarterly sales target of Euro 50 million. In quarter three FY26 we posted robust growth in regulated market. Revenue rose 19% in the US and 54% in Europe driven partly by 39% top line growth at Sunxe.
Given this momentum we are confident we can maintain full year FY26 growth. Let me now walk you through our Consolidated performance in Q3FY26 Consolidated revenue was INR 16,954 Million up 22% Year on year consolidated adjusted EBITDA grew 25% to INR 4,490 Million supported by Senexi reaching Bakey1. Consolidated EBITDA margin was 26%. Our year to date numbers show strong Progress. For the first nine months FY26 consolidated revenue reached INRs 46,879 million up 12% over nine month FY25 adjusted EBITDA was INR 11,582 million with margins up to 25% from 22% last year driven by better base business performance and SYNXE turnaround.
I will now highlight the performance of our base business and gland excluding SENEXC before detailing performance by each key market segment. The US market We launched nine molecules in Q3FY26 including argatroban, acetazolamide and doxycycline. US revenue grew 16% year on year, 8290 million in quarter three and reached INR 23,446 million for nine months FY26. In other regulated markets like Europe, Canada, Australia and New Zealand they generated INR 881 million in quarter three FY26 reflecting a 16% year on year increase. For the nine month ended FR26 revenues from this market reached INR 2,454 million marking a 17% year on year rise.
In the row market it grew by 12% contributing to INR18.76 million in Q3FY26. In RoW, own product revenue greased 7% while tech transfer and CMO revenues increased 44% for nine month FY26 RO revenues were INR5044 million up 5%. India generated revenues of INR7.44 million in Q3FY26 up 32% year on year for nine month FY26 India business revenues were INR2002 million which is 6% to the total base revenues. Senexc delivered a strong performance. Quarterly revenues were Euro50 million, up 21% in constant currency for nine months. FY26 Senexi revenue rose to Euro138 million from Euro121 million last year, a 14% constant currency increase.
This performance reflects disciplined execution over the past year including higher capacity utilization, contract renegotiations, workforce rationalization, new product ramp ups and stronger integration with GLAND in business development, tech transfer and share functions. With several strategic initiatives underway including expanding the ampoule line at Fontenay and adding a YL and a combo lines at bla, we are confident in Senex’s medium and long term growth and despite inherent quarter to quarter fluctuations. Overall this quarter we strengthened our market footprint driven by broader reach and more traction from our differentiated high value product portfolio. Our commitment to quality and regulatory compliance is unwavering and so is the strong cost discipline, operational efficiency.
We remain focused on building capabilities through organic and inorganic investments, talent development and leadership. We believe these efforts position us for sustained growth and long term value. In summary, our strong results this quarter reaffirm our strategic direction and ability to deliver sustained value. We are well positioned to seize future opportunities and drive long term success. I will now invite Alain to provide more details on SenxCity’s performance. Over to you Alain.
Alain Kirchmeyer — Chief Executive Officer – Cenexi
Thank you Mr. Giry, good evening and Happy New Year to everyone. This has been a strong quarter at Senexi and we are pleased to have delivered on our guidance. Senexia recorded 50 million euros in revenue this quarter, a 21% increase over the same period last year and the highest quarterly revenue during CY 2025. All sites showed a major revenue improvement compared to the previous year with a pickup in revenues from Herauville and Fontenay. We are happy to inform you that we delivered an EBITDA of 1.4 million euros in Q3 FY26 in line with our guidance.
This underscores that our turnaround strategy is gaining Momentum. During the first nine months of FY26, revenue stands at 138 million euros reflecting a 14% growth year over year and an EBITDA improvement by 10 million euros. I will now provide key site level updates. First, at Fontenay we are investing in a new high capacity ample line, adding 30 million in capacity by 2027. This will strengthen the position of the site on the market as the largest ampoule manufacturing site in Europe. The site will continue to improve realization by passing on price increases to customers in line with inflation and regulatory requirements.
The activity of our Heruville site continues to grow strongly supported by the continuous ramp up in production of two products launched in 2025, an inactivated vaccine and a sterile ophthalmic gel. Both sites in brain, Laloux and Auni maintain strong momentum and profitability. At Brain, we are planning to install a new vial line under an isolator. Also we will install a new combo line for pre filled syringes and cartridges in 2026. This line will significantly increase our manufacturing capacity and and allow us to attract new high value projects. We remain confident in our outlook for calendar year 2026.
The strategic initiatives and investments made so far are expected to begin delivering meaningful results from 2026 onwards, setting the stage for sustained momentum. Thank you for your attention. I now invite Ravi to take you through our financial performance in more detail. Ravi, over to you.
Ravi Mitra — Chief Financial Officer – India Office
Thank you Anna, Good evening and a very happy new year to everyone. Thank you for joining us today as we review our financial performance for the third quarter and ninth FY26. I am pleased to share that Q3 FY26 was a strong quarter for us marked by healthy revenue momentum across key markets and continued improvement in profitability. Our consolidated revenue for the quarter stood at rupees 16,954 million reflecting a year on year growth of 22%. The base business performed well with the revenues of rupees 11,790 reflecting a year on year growth of 16% supported by broad based Tenaxi also delivered a solid performance with revenues increasing 39% year on year to INR 5,164 million.
Overall gross margins for the quarter was 66%, broadly in line with the previous year and higher compared to 63% of previous quarter. Excluding CEMEXE, base business gross margins stood at 61% versus 63% last year primarily due to product mix similar to Q2 of FY26. Our performance for nine months FY26 has been equally robust. Consolidated revenue for the nine month period reached rupees forty six thousand eight hundred seventy nine million a year on year increase of 12%. Base business revenues came in at rupees thirty two thousand nine hundred and sixty five million as NXC revenues rose 26% year on year to Rs.
13,913 million. Overall gross margins improved to 65% up from 62% last year driven by a favorable business and product mix. Excluding SEMEXC, base business gross margins were 60% compared to 57% in the previous year. Expenses during both Q3 FY26 and 9 months FY26 were higher primarily on account of increased R and D investments, employee cost and certain one time items. R and D expenses for the quarter stood at Rupees 650 million representing 5.4% of sales up from Rupees 437 million last year demonstrating increase in R and D efforts and filings. Our R and D programs including complex pipeline continue to progress well.
For the nine month period R&D expenses were Rupees17.25 million or 5.2% compared to Rupees1419 million last year. During Q3FY26, adjusting for ESOP related non cash expense of Rupees 141 million, EBITDA stood at Rupees 4490 million of 26%. The EBITDA margins were in line with Q3FY25 despite increased R and D spend for the base business. Excluding Semexe, adjusted EBITDA was rupees 4342 million with a margin of 37%. We are particularly pleased that SYNXE delivered positive EBITDA of rupees 148 million during the quarter. For nine months FY26 adjusted EBITDA after excluding ESOP related expense and one off items stood at rupees 11,582 million with a margin of 25% for the base business.
Excluding Senexe, adjusted EBITDA was rupees 11,965 million with margin of 36%. Senex’s EBITDA loss narrowed significantly to Rs. 383 million compared to 12. 83 million rupees last year, a meaningful improvement. Other income comprising mainly foreign exchange gains and interest from bank Deposit amounted to Rs.632 million in Q3FY26 and Rupees2049 million for nine months FY26 after adjusting for an exceptional wage code related impact of rupees 243 million and its consequent tax effects. Net profit for the quarter stood at rupees 2007. 97 million translating to adjusted PAT margin of 16% against 15%. In Q3 FY25 adjusted net profit for nine months FY26 came in at rupees 6789 million rupees with margin of 14% compared to 12% last year.
On a standalone basis, our effective tax rate for the quarter was 25% as of December 31, 2025. Total cash and equivalents at the group level were Rupees 30,005, 25 million including non callable deposit of Rupees 3,960 million. External debt at the Synaxe level stood at Rs. 3,363 million. Cash flow from operation was Rupees 337 million for the Q3 FY26 and Rupees 6,269 million for nine months. FY26 our cash conversion cycle averaged one hundred and sixty six days for the first nine months and improvement from 172 days at the end of FY25, largely driven by better inventory and receivable management.
Total capex during the first nine months of FY26amounted to Rupees 3,566 million primarily directed towards new projects at Synxe, capacity and capability upgrades at our India facility and regular maintenance capex for this full year, FY26 capex for the base business is expected to be around Rupees 2,500 million and Euro 25 million at Synxe. With that I would now request to open the line for questions. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and two participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from Tushar Manudane from Motila Loswar Financial Services. Please go ahead.
Tushar Manudhane
Thanks for the opportunity. So firstly on this CMO contract, if you could also share what is the size of this contract and the timeline for completing this contract and starting timeline for this contract. The one with respect to oncology with big.
Srinivas Sadu
Sir, you’re referring to the new CMO new CDMO contract that’s the timeline is 28 probably third or fourth quarter end of 28 and that the expected revenue is around 2530 million per year.
Tushar Manudhane
USD 25 to 30 million per year starting N28, correct?
Srinivas Sadu
Yeah, correct. Yes.
Tushar Manudhane
So this would require certain CAPEX from our side and which is why this contract timing is end of 28.
Srinivas Sadu
Yes. So it’s a dedicated. It’s a complex product. So we have to create some dedicated compounding area for this product. So that’s how we need this time and then the tech transfer and then the variation filing. It’s a commercial product in Europe and many countries. So the variation filing has to happen in Europe, several countries. So that’s why the commercialization happened in 3rd or 4Q28.
Tushar Manudhane
And how much capex would you be requiring for this project?
Srinivas Sadu
About 80 crores.
Tushar Manudhane
Got it sir. So the second yarn if you could also share us Europe constant currency growth for the quarter on a year on year basis.
Srinivas Sadu
About 5%.
Tushar Manudhane
In us and in europe.
Srinivas Sadu
Overall it’s around 5%. You can take overall.
Tushar Manudhane
For the base business.
Srinivas Sadu
Yeah.
Tushar Manudhane
Got it. And just lastly if I may, if you could share milestone and profit share for the quarter.
Srinivas Sadu
Profit share is around 9% and milestone around 7%.
Tushar Manudhane
Thank you sir, I have more question. I’ll join them. Thank you.
Srinivas Sadu
Yeah, yeah.
operator
Thank you. The next question is from Tarang Agarwal from Old Bridge. Please go ahead.
Tarang Agrawal
Hi. I have two questions. One, if you could give us a sense on how the synexic trajectory should play out going forward from year on. And second, in your initial address you did call out about investing 2000 crores which you could give more color in terms of what is the timeline within which you’re looking at investing at you know, the approval timelines and kind of, you know, asset terms that you would look out of these investments given that it’s going to be a mix of both volume as well as value. Thanks.
Ravi Mitra
So I’ll take the capex question first. So we would be building a brownfield expansion of a capacity which would be adding to existing while lio other delivery formats and that is considering the increased demand and other expectations we have. In addition to that we are also putting up the FS line. We are putting up new line which is suspension line and this would be spent over a period of next 5 years. So next year our capex should be around more than 400 crores and asset turn should be more than around 3x considering the high value business we are expecting in this new facility.
Shyamakant Giri
On the question. Yeah, go ahead.
Tarang Agrawal
Yeah, just to follow up on this. I mean. What is driving this, this kind of confidence? I mean from the point of view of customers, you did call out demand, you did call out India being an innovation hub. So if you could just elaborate in terms of the structure of the industry, you know, because it’s a sizable portion now from the point of view of where your cross block is today and the kind of investment that you’re committing.
Srinivas Sadu
So one is on the ophthalmic side, the current Capacity we have almost. We’re not able to to actually the demand and we have several products under approval stage and we need additional capacities. Panic line which also has capability of suspensions. Today we don’t have uptime suspension capability so that’s a need. There are several key products in that space. So that’s one line we’re investing into the bfs. There are some specialty products and blow filtering technology which you want to get into. And we also seen the market in several markets. The three piece is also moving to BFS technology and currently we only have a three piece line and we’re not able to sell cater to the row business because of lack of this BFS technology also.
So as an injectable company we need that technology. And also the way the market is moving we need to be ahead of the curve. So that’s another reason we want to invest into bfs. But there are also several. We have done some code of projects we’re doing which falls under BFS which are under speciality category. So that’s the other one. In terms of additional capacities we are running, I would say next one one and a half years we’ll be running out of live capacities. If you see the growth coming from our. If you look at last few quarters growth the volume growth is larger even last quarter.
If you see volume good is almost 19% in the US while the price has dropped. So we are aggressively looking at. While we have reduced our cost internally we have become more efficient. So we are utilizing that gain to get more contracts in the US and that’s why we did mention in our last couple of quarters that we worked on efficiencies. We got down our cost down and that’s why we’re able to win a lot of contracts and GPO contracts in the US and the supply started from this quarter so the volumes are higher. So we need those capacities as well.
So it has, it is. And also the fourth aspect is the CDMO contracts which are entering some contracts are backed by commercial quantities where the players are entering to different segments and trying to move the commercial products to our sites. So we need to invest into that as well. So there are a lot more focus on the CDMO contracts last year 12 to 18 months. So that business we’re trying to grow substantially but not into me too generic kind of products, more complex specialty kind of products and also focusing on commercialized products where the revenues are.
You have clear visibility on revenues in next two to three years with worst case take off agreements I would say.
Shyamakant Giri
And turning on your next question, you know the performance in this quarter reflects a disciplined execution over past so many, so many quarters including capacity utilization, workforce, you know, rationalization, optimization, ramp ups and all of that. So there will be quarter to quarter fluctuation. But overall on an analyst basis we ebitda to remain positive and we are confident in synxes medium to long term growth.
Tarang Agrawal
Just to Follow up on Synxc. So would it be fair to presume that a 50 million euro is a good baseline to work with now?
Shyamakant Giri
So on an annual basis, yes, you can take it 200, but there could be some quarter to quarter. Yes,
Tarang Agrawal
thank you.
operator
Thank you. The next question is from Neha Manpuria from Bank of America. Please go ahead.
Neha Manpuria
Yeah, thanks for taking my question. My first question is again on the capex number, the 2000 crores that we had mentioned. How much of this would be for Senexi versus the base business?
Srinivas Sadu
This is for base business now.
Neha Manpuria
Okay, so that means we’re nearly doubling the gross block or nearly doubling the gross block in once this capex is completed.
Srinivas Sadu
Yeah, that’s correct. Yeah.
Neha Manpuria
And what would be the average utilization of the existing capacity that we have? And at what point do you think, you know, capacity becomes a constraint for growth? I mean how soon do we need to get this capacity up and running to maintain, you know, the mid teens growth that you’ve guided to?
Srinivas Sadu
It depends on the lines but most of the lines we are running at 80 to 90% capacity. Some lines are almost chalk up line out only preconceived we have enough capacities and we’re not investing into that. And of course the cartridge, these are new technology, we got into those, we have enough capacities. But if you look at lyophilizers or liquid vials and also I think those are almost, we’re running at most of the lines are at 90% capacity, few lines are at 40, 50%. So at least for next two years we need to invest into additional capacity.
So this 2000 crores will be spread across next few years.
Neha Manpuria
Understood. My second question is on the overall guidance. We had mentioned a mid teen guidance. I think we’re tracking it about 12%. And there was hope of a large product launched by a partner in the US which seems to have been delayed based on the 12% growth in the nine months. Do we still have confidence in that? 15%. And what’s the update on the Dalba launch by the partners?
Srinivas Sadu
Good thing is Dalba approval in six countries in Europe. So we launched in December in six of the European countries. So More countries gets launched out of US Us we have gold late in February so hopefully they’re just waiting for an approval. So they need an additional data which was submitted this month in January. So we should be able to get some.
Neha Manpuria
And let’s assume you know Dalba does not come through in Fed, would we still be able to maintain the mid teens vote that we’ve been guiding to?
Srinivas Sadu
So there are additional batches, additional demand which came from Europe. So that will at least offset some of the gain, even some of the losses if you don’t get an approval. But hopefully they’re also trying to get a player so that we can ship out some batches. So if that happens we’ll see some numbers coming for the US as well.
Neha Manpuria
Okay, and how should we think about the growth from here for FY27 for the base businesse like you mentioned it’s to the 200 million which we should grow on. But for the days business what’s the growth? Because even for Europe if we see the CMO contract is ramping up much lower than what we would have expected. So is it possible for us to maintain this mid teens growth going or should we see this growth momentum? Possibly given the investments we’re making.
Srinivas Sadu
I think overall as a company we should be growing at 12, 13% at least. That’s the minimum confidence we have. And if the CMS get faster approval in Europe where the variation filing is happening and if we get that earlier than anticipated, so we thought at least in second half of this year we should get some quantities. If that happens it will be a bit more but I think, I think 13%, 12 to 13% is I think the best bet.
Neha Manpuria
The CMS approval is expected this year in fiscal 26, the remaining two months.
Srinivas Sadu
That’s a meaningful business. The variation filing has happened in is happening in different countries. In Europe the approval is expected in six months. If yeah if that happens then it could be a little higher. Yeah.
Neha Manpuria
All right, thank you so much.
Srinivas Sadu
Yeah, thank you.
operator
Next question is from Ashish from Leo Capital. Please go ahead.
Ashish
Yeah, by when do we expect the 140 million pen cartridge capacity for GLP1 to be operational and what sort of orders from customers or commitments do we have on it?
Shyamakant Giri
So first and foremost let me take this 140 million is a fungible capacity. It has both cartridges and vial number one. Number two, you know we have launched our first GLP in Canada last quarter Mirabettai and we are there’s a US approval coming through
Srinivas Sadu
already approved in the US
Shyamakant Giri
launched in January already in the US we are contracted two to three more GLP players and there is a pipeline of around six to seven players more to be contracted. And we are also looking beyond the GLPs for this cartridge line like insulins and insulin analog. So we are in talks with one of a very important big insulin player to, you know, to.
For the, for the capacity that we have. So overall, looking at things, you know, we can look at in FY27, around 15 to 20 million utilization. It would take some time for us to completely utilize 140. Okay, but this is what the visibility is as of now.
Ashish
Okay,
Srinivas Sadu
so as of now the capacity is 40 million, just to be clear. And then 100 million is getting added this year. Right, Right. But the idea is not, you know, that you’re going to fill up the line with GLP1 in near term. The idea is to have these capacities ready because of the contracts. What we have in the meantime, we also. And that’s the reason why we have a tangible line where we can fill vials and cartridges in one line and syringes and cartridges in the other line so you can utilize for other products also.
But I think the 40 million probably will fill up faster because of the insulin discussions what you’re having with the partners.
Ashish
Got it. Would you say capacities for fill and finish on the pen cartridge size are in shortage right now and there is significant capacity build out ahead of the patent expiry?
Srinivas Sadu
It depends how the market pans out. Right. I mean, if it really like what they’re saying, there’s not enough capacity. But we also need to see how the molecules will pan out. So our next, at least next three, four years forecast, we are not considering too much of GLP1, you know, because. Because one is of course the patent situation and also the other how the pricing will pan out. So the numbers, what we are projecting is very minimum revenue numbers. We’re allocating to JLP1. If it really happens like the market is saying, then it will be additional numbers what we could get to, in addition to the guidance, what we, what we’re giving.
Ashish
Got it, Got it. Thank you.
Srinivas Sadu
Thank you for taking my question.
operator
Thank you. The next question is from Binu Patiparampar from Elara Capital. Please go ahead.
Bino Pathiparampil
Hi, good evening. So partly answered my question, but wanted to know, are you. Have you already tied up some semaglutide. Contracts for FY27 within your capacity or is it all.
Srinivas Sadu
No, we have signed up with several semaglutide generics also. Yeah, Even that we have signed up.
Bino Pathiparampil
So including semaglutide, you are Saying only about 30 million of your 40 million. Capacity will be like in a high 20,000.
Srinivas Sadu
If you add up, you know the what customers are estimating and you project it will be huge numbers. So we don’t to want, want to be too optimistic on that. You know, we have to be a little conservative on how the market is behaving because we also need to look at one of the key areas is we don’t want to sell at a price where it’s, it’s not workable. So from capacity perspective we are built in but as a de risking strategy, we took a fungible line so that we can also use it for other products.
So but what we, what we’re saying is in addition to glp, we are also because we’re already making insulin for Li Lily for several years. So we also have that experience. So we’re talking to insulin manufacturers who have commercialized this product in large numbers. So that could be a big item for this line, at least for the 40 million rank. In the meanwhile we look at how the market behaves and if they have to sign more contracts or other contracts, what they’ve signed is good enough to find those lines. Got it.
Bino Pathiparampil
And why, when do you expect the additional 100 million capacity to be online?
Srinivas Sadu
That will be the next five months. The line is actually getting delivered this week. Next week, Sorry. So by the time validations and everything will happen four months. So by second quarter the line will be ready to take exhibit batches.
Bino Pathiparampil
Okay, understood. And one last question. After Several quarters of US revenue around. High 90s million dollar per quarter this quarter you have shown some improvement in. US or developed markets around $100 million. Do you think there is a chance that this can dip below that further. Or this will be a new base. On which improve on a quarterly basis.
Srinivas Sadu
I did mention in today’s call and also previous calls that some of the contracts of our top 10 products, what we launched GPO contracts few years ago, we got got it three quarters ago. The suppliers would be starting from third or fourth quarter of FY26. And that’s why you’re seeing the uptick. I mean if you see the volumes compared to previous quarters, it’s higher. I mean the volumes are almost 19% higher if you look at year on year and I think 16% on quarter on quarter. So these volumes are some coming from the new contracts, what they’ve signed up.
And you know this will get annualized next year. So it’s basically what we lost. We got it back this year, I would say.
Bino Pathiparampil
Thank you. I will turn back. Yeah,
operator
thank you. Before we take the next question, a reminder to participants that you may press Star and one to join the question queue. The next question is from Sajal Kapoor from Antifragile Thinking. Please go ahead.
Sajal Kapoor
Yeah, thank you for taking my questions. And Mr. Sadhu, beyond the reported turnaround at Finexi and congratulations by the way, you have been sounding very positive over the previous few earnings call that this business will turn around. Now that the turnaround has happened. The question or the optics will now obviously shift to the EBITDA margin and the roce because it’s relative to our base business where we were before the acquisition. We were a lot higher on the EBITDA as well as the roc and all those metrics have been diluted by synxc. So what is the steady state? Maybe a midterm, three year kind of a roadmap to try and bridge the gap both on the ROCE as well as the EBITDA between our base business and synxe.
Srinivas Sadu
One of the initiatives, I mean of course we are still working on efficiencies at Synexi to improve the ebitda. On the PD front, we have integrated Gland and Europe bd. Sometimes it may not reflect directly into Senex’s business, but it also as a consult company you should start looking at it. I mean if you look at this quarter itself, our milestone income in the US actually has come down drastically. But overall it’s only 2% decrease because most of the actually milestones came from our contracts in Europe. So you should also see that how the Senexe and Gland together, it’s also helping the company which we talked about initially, but the focus was mostly on how to turn around.
But also you should see in parallel what are the synergies you can get out of this business which will not directly seem from Synex’s business, but as a console business, what you can get out of this. So you will see the European business growing and we also have to see the 35% business is great, but also we have to see how. How dependent are we on us. We have seen two years back when we had said that we are so dependent on us, we decided okay, we need to de risk ourselves. So we should also look at today we are dependent on us for 50% of business at 25% is in Europe.
Now the quality of the business we do, we have to improve for sure. One is of course getting the EFFICIENCIES back. Second, how to improve the portfolios of Senexe. That’s the reason why you see investments going into higher end products, not just ampoule business which is there. And you know in pharma it takes time. So you know, it’s the transition we are doing. And also it has capabilities which gland can exploit whether it is hormonal products which we can’t make or the controlled substances which you can’t make. Now again you have to look at from a synergy perspective.
So as Gland we cannot do those kind of kind of products with Senexy we can do that product in the future you might see revenues coming out of gland base business but it wouldn’t have happened if you don’t have synxe. So as a company I think we should start looking at how Synxe has contributed to Gland, how Gland has contributed to synxe rather than independently looking at synxe. And cuz that’s how when you make an acquisition we just don’t look at a single business. You see as a whole how the business works. And I think that’s what we tend to tell that okay fine, we are turning it around.
But how our SYNX is also contributing to us. So we’ll see several other development projects. Now we have started R and D and cell products where Gland cannot do it because of the facilities what we don’t have where Synxi has. So we start manufacturing from there. So I think from a long term strategic perspective it’s a movie consciously took. Yeah, it took time for two years to get it turned around. And you know, this is our first acquisition and we are integrating it so you see more positive results independently for Synaxe and also as a console company.
Sajal Kapoor
Sure, that’s very helpful and thank you for detailing the response which kind of helps us better understand the overall synergies and the dynamics because we just absolutely agree that you can’t just look at the individual businesses as individual parts, you have to look at the whole. So I completely appreciate that, thank you. My second and last question is regarding this Biologic cdmo. So we are tripling the capacity, right? If I’m not mistaken, from 8 million or 8 KL to 23 KL. And what is the expected ROCE and this capacity expansion? All backed by sort of contracts that we have signed either with Dr.
Eddy’s or otherwise. I mean how confident are we in terms of utilizing this enhanced capacity and, and what is the hurdle rate in terms of return on capital?
Srinivas Sadu
So this is a greenfield. We’ll be building this capacity in Chamakit. Beside our existing lake. So we are in a stage where we don’t have, you know, because in typical CBM business you have to build the capacity and then sign the contracts. But we are in active discussion with some players for the products there. So at this point of time we will not be able to put a number to that. But our hurdle rate for any investment is of course 20% IRR. So that we keep in mind when we make our internal investment projections.
Sajal Kapoor
That’s helpful. Thank you so much and all the very best. Thank you.
operator
Thank you. The next question is from Sayon from Nomura. Please go ahead.
Saion Mukherjee
Hi, good evening and thanks for taking my question. Ravi, in case of, you know, the ESOP charges that you take, how should we think about this year, next year and will it sort of come down going forward?
Ravi Mitra
So current quarter is 14 crores and. Typically it would be, it would go. Down for this grant as we see next year. And of course this CSOP started From middle of Q1, so full year if you annualize it will be little higher than this year’s cost. But. And then it’s not the full ESOP scheme. So we may have future grants also given. In that case the cost may go up. So we’ll not be able to exactly. Quantify what’s going to the ESOP cost next year. But typically we have where the vesting is over a period of three years. So it gets distributed over a period of three years. Any new tanks?
Saion Mukherjee
Okay. And also this 15 to 20 million that you mentioned about utilization for the new cartridge line for how should we think about in 28 if you have any visibility around that.
Shyamakant Giri
So there’s a. There is. So we spoke this capacity utilization with insulin. As Mr. Sadhu also told, we are talking to a big pharma company on the insulin side. And on the other hand there is a pipeline of 7 to 8 GLP1 customers. Also where the talks are going on. So I think 28 will be far, far better than 27. I don’t have a number now but we are looking, we are looking very positive and very, very optimistic about, you know, taking this line ahead.
Saion Mukherjee
Great. So just, you know, for fiscal 28th, as you see GLP scale up, you see the CDMO contract coming through and also you know we talked about synergy benefits coming out of synxe. So for the base business should we expect stronger growth in fiscal 28 versus 12, 13% that you talked about for fiscal 27.
Srinivas Sadu
So we are looking at 15% CAGR five years as a company other than the inorganic, what we may do in next few years as organic, we look at 15% CAGR for five years.
Saion Mukherjee
Okay. And just one question if I can ask, you know, regarding the synergy from SenExp in our sense of stabilizing, how should we think about that? I mean if you can give some color on the kind of discussion you are having that the base business can get effect, you know, impacted and the trajectory around that like I would assume, you know, these things take time. So is there a point where you see inflection happening on account of synaxi the synergy benefits for the base business?
Shyamakant Giri
So as Mr. Sadhu said, you know, we have integrated the BD which means we have a lot of customers who wanted to make in Europe. You know this integrated BD3 will cross sell each other’s capacity. This is one part of it. The second part of it is also we will have full year of line G which is a high speed line that we installed last year. Okay. We also installing another high speed line there. We have seen ramp up in HSE of the inactivated vaccine and also on the ophthalm with respect to synergy. Yes. Bd, as I told you, there’s a tech transfer synergy of, you know, there’s a knowledge transfer happening between both the tech transfer team.
There is a certainly around efficiency, there is a synergy around quality teams and all of that. Yes, a lot of synergies, lot of synergies are at play. Okay. Difficult to quantify at this point in time. But we have seen, we have taken baby steps and we have seen benefit coming out of this synergy.
Srinivas Sadu
So just to add to on the software aspect from the BD perspective, several customers, we are doing a joint tendering now especially we have, we discussed about capacities earlier in the call. We have a lot of ampere capacities and there are a lot of tenders, global tenders coming from the big pharma to consolidate ampere business. So we have actually participated in two tenders where some volumes we are quoted from synxium and probably 70% from gland. So these kind of stuff will happen. I mean when I’m saying 15% CAGR we have not included these because these are happening.
But we are pretty confident because if you look at how the entire market scenario is, even the companies are trying to integrate 15, 16 CMO services to one company and we have all that under one roof. So. So we did participate in two large tenders, 60, 70 million ampoue tenders jointly and There are also products, the companies who are taking CDMO services from Senexe, they’re actually talking to us to in license products from glan. So that will open up. So we have licensed four products last quarter in Europe. That’s where you see some milestone income from Europe as well. So that has also panned out well. So if you start launching those products in Europe, you’ll see some revenue coming out of the in that market also. That’s again ongoing process there. It’s a new entry for us in terms of filing dossiers in Europe we have just four approvals which we have licensed out.
But that is a growing business. So in that sense a lot of companies are trying to license products. That’s one area we’re looking at. And also we’re also giving companies opportunity to grow their business. Because of the cost structure in Europe, they’re not able to compete well in the row markets. So they’re losing share. So we are offering services to them in India so that they can get a better pricing so they can increase the volumes as well. So yeah, so several areas we are working together.
Saion Mukherjee
Understood. Okay, thank you.
operator
Thank you. Next question is from Abdul Kader Paranwala from ICICI Securities. Please go ahead.
Abdulkader Puranwala
Yeah, hi sir. Thank you for the opportunity and congratulations on a good set of numbers. So my first question is pertaining to your Europe business. So for gland and synoxy, you know, both of these segments, we have seen very good growth this particular quarter. So just wanted to understand here that, you know, what is the kind of opportunity you’re seeing in synaxy? First on this inactivated vaccine and this is sterile gel and for gland as well, you know, would this quarterly run rate be sustainable in the quarters ahead as well?
Shyamakant Giri
Okay, so on the, on these two products, inactivated vaccine, you know, and sterile gel, there is a ramp up that we have seen and these are products from the innovative pharma side. Okay. Inactivated vaccine though is seasonal, but we have seen more ramp up quarter by quarter. This will continue to grow. And similarly the ophthal sterile gel. On the other question that you asked, on the growth. Yes, as I told in the past that all the effort therefore still continues. But all the effort that we started beginning of 2025 is now showing results in some way.
We’ll push the pedal more and we make sure that on an annualized basis Sunexi remains on course and we confident on Sunex’s medium and long term growth.
Abdulkader Puranwala
Understood. And on your gross margins for the base business. So despite share going up significantly as compared to where we were last year. I think the gross margins are still better. So would it be fair to assume that the new businesses are at par at what you are currently doing in US or in Europe itself.
Srinivas Sadu
To be honest Actually if you look at the prices wise it has down but we are, we become more efficient at I would say initiatives which we took. So that’s why we’re able to maintain the margins and be more aggressive in terms of pricing. So if you see there was a price drop of almost 5, 6% if you compare the previous. But still we’re able to maintain margins because our costs have come down and that’s why we are seeing more volumes, same margin but lower pricing. So it kind of nullified that and that’s more only because of the internal efficiency.
We came out increasing batch sizes. We have invested, there was question around capex actually invested into large capacity tanks so that will increase the batch size. So some investments have went into that so to reduce our cost and that’s what you’re seeing now. So basically it’s aggressive pricing, reduced cost internally to be more attractive in terms of market scenario which gave us volumes also.
Abdulkader Puranwala
Okay, and one more on the CO Development Partnership products. So the 15 products, what do you have? Which will begin in 28. So what is the time for these 15 products and from an F28 perspective how many products of that you know we should see getting commercialized?
Srinivas Sadu
Give me a second. We will come back to you on this question.
Abdulkader Puranwala
Can you hear.
Shyamakant Giri
Hello.
operator
Mr. Abdulkader, can you hear us? And due to time constraints we’ll have to take that as the last question. I would now like to hand the conference over to the management team for closing comments.
Shriniwas P Dange
Thank you everyone for joining us today. We appreciate your participation in the question and answer session. During the call, if you have any follow up questions please feel free to. Reach out to us. We look forward to connecting with you again next quarter. Thank you.
operator
Thank you very much. On behalf of Client Pharma Ltd. That concludes this conference. Thank you for joining us ladies and gentlemen. You may now disconnect your lines.