Gland Pharma Limited (NSE: GLAND) Q4 2025 Earnings Call dated May. 20, 2025
Corporate Participants:
Unidentified Speaker
RUNJHUN JAIN — Investor Relations
SRINIVAS SADU — EXECUTIVE CHAIRPERSON
SHYAMAKANT GIRI — CHIEF EXECUTIVE OFFICER
RAVI MITRA — CHIEF FINANCIAL OFFICER
ALAIN KIRCHMEYER — CHIEF EXECUTIVE OFFICER
Analysts:
Unidentified Participant
Neha Manpuria — Analyst
Bino Pathiparampil — Analyst
Ashish Konaje — Analyst
Aditya Pal — Analyst
Tushar Manudhane — Analyst
Shyam Srinivasan — Analyst
Dheeresh Pathak — Analyst
Harsh Bhatia — Analyst
Alankar Garude — Analyst
Vivek Agrawal — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q4FY25 earnings conference call of Glan Pharma Ltd. 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 conference call, please signal an operator by pressing star then zero then on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Ranjan Jain. Thank you. Hand over to you ma’ am.
RUNJHUN JAIN — Investor Relations
Thank you Sabha. Good evening everyone. Welcome you to the Glenn Pharma’s earnings conference call for Q FY25. Today we have Mr. Srinam, Executive Chairperson, Mr. Shamkant Kiri, Chief Executive Officer, Mr. Ravi Mitra, Chief Financial Officer from India’s office and Mr. Alan, CEO of Senexi who is connected virtually from France. We will begin the call with business highlights from Mr. Sadhu followed by operation highlight to Mr. Giri. This will be taken up by Mr. The updates about Synxe from Mr. Allen and lastly the group financial overview with Mr. Ravi. Before we proceed, I would like to remind everyone that some of the statements made today will be forward looking and are focused on are based on management current estimates.
These statements should be considered in light of the risk associated with our business. The call is being recorded and the playback and script will be available on our website shortly. With that I hand over the call to Mr. Sadhu for his opening remarks. Over to you.
SRINIVAS SADU — EXECUTIVE CHAIRPERSON
Thank you Ranjan. Good evening everyone. Thank you for joining us today. On behalf of Glantpharma, I welcome you to our fourth quarter and full fiscal year 2025 earnings call. Let me begin by providing a strategic overview of the business, reflecting on the past year and outlining our vision for the company’s future. Following this, Shemmakanth will discuss our operational performance, Alain will provide updates on Synxy and Ravi will conclude with the financial review. Reflecting on the year gone by. FY25 was a pivotal year. While we face near term growth challenges at both Gland and Synaxe, I want to assure you that we use this time wisely to strengthen our foundation and sharpen our long term focus.
The global landscape has presented renewed complexities this year especially with announcement of reciprocal tariffs by the US Administration. We have created a layer of uncertainty particularly for Indian pharmaceutical companies which have a significant presence in the US markets. Despite these headwinds, we have maintained our flexibility across demand and supply fronts. Gland’s value creation journey remains anchored in the strategic execution of our operational model and we foresee a promising growth trajectory ahead. Let me now take you through the key pillars driving our growth strategy. Starting with the base business expansion, we are expanding geographically with a strong solution to emerging markets across Africa, the Middle East, Latin America, Asia Pacific and the rest of the world region.
There is a substantial market opportunity in our approved US India portfolio and market formation opportunity by an upcoming pipeline of injectables post patent expiry. In addition to recent successful new product launches, we are leveraging our long standing relationships with key partners to deepen our global reach. Next, we have made significant progress in expanding our manufacturing capabilities with new lines including complex injectables and new delivery systems like pens and cartridges. A key milestone was our successful entry into the GLP1 segment with the launch of Deraglutide. Given that we see GLP is a crucial area for Gland’s future.
With two GLP1 contracts secured in a strong market demand anticipated, we are scaling our cartridge capacity from the current 40 million units to an additional 100 million by CY 2026. We have broadened our capabilities to include suspensions, hormonal products, microsphere, bulk microsphere filling while strategically focused focusing on ready to use products like dual and triple chamber bags. Importantly, we’re also experiencing significant momentum in attracting major pharmaceutical companies interested in partnering with us for high value formats like dry powders and have already successfully initiated several new CMU projects moving to our R and D and portfolio expansion efforts.
Our strategy spans three focus areas in house R and D, complex products and a core development model. Our in house R and D covers a wide range of therapeutic areas supported by 371 filled and approved ANDS and 1748 global registrations. Our future pipeline now targets major therapies like ophthalmology, CNS, cardiology with near term generic opportunities covering a 1.25 billion market which is about 40 million NDAs, a one to three year pipeline targeting 2.12 billion and the longer term pipeline in a 2.34 billion market. In total, our in house pipeline includes 71 new NDAs with a 5.7 billion in FY25.
We launched 31 new products in the US and we expect this momentum to continue. Additionally, we filed three RTU infusion bag products with 10 more in development as part of our 14 registered RTU bag products targeting a $530 million US market. We’re also focusing on additional complex injectables and have 19 products in this bucket with six already launched and three more anticipated for approval addressing an IQR market opportunity of approximately 6.5 billion. To accelerate our five year and portfolio expansion, we are pursuing co development wherein we are partnering with a specialty injectable development company with 15 products out of which 6 are 5 are B2 and 9A and DS submissions which are focusing on key therapeutic areas like immunology, chemoadjuvants, mineral supplement, pain management, endocrine technology and radio contrast agents.
GLAND is also building a robust TDMO setup for biologics leveraging our existing biologics manufacturing capabilities. The biofindence market is a significant driver in this effort. A key step in our strategic expansion into biologics is our collaboration with Dr. Reddy’s Laboratories which marks a significant step in this direction with revenue contribution expected in FY26. Furthermore, we have progressed on a non binding agreement for CDMO collaboration with Shanghai Head Biotech positioning us as a secondary manufacturing site for some of their key biosimilar products. To support this and future growth in biologics, we are expanding our bioreactive capacity by 15,000 liters.
These collaborations reaffirm our strategic focus and investment in the growing biologic CDMO area. Turning to Senexe, while we encountered challenges with below expectation performance, however we have made progress in defining this turnaround strategy. We recognize that acquisition thesis has taken longer than expected to rectify, but our strategy to achieve robust growth and profitability remains centered on high value products. This necessitates a deliberate shift from our previous business model of low value high volume business which constituted 70% of our current operations towards higher value products such as prefill changes, lyophilized vials and ophthalmic gels. This evolution is expected to expand our net realizable value per unit and improve overall profitability.
Synaxis Dedicated business development efforts are yielding results with the successful addition of new customers for prevent syringes, vaccines and lifeless vials. Aligning with this high value focus. To facilitate these transformations, we’re strategically investing in capacity enhancements and building business scale through increased automation. Finally, in parallel with our organic initiatives, we’re actively exploring inorganic opportunities via mergers and acquisitions to accelerate to complex product development, gain access to new technologies, expand our product range and enter new markets. In summary, while FY25 brought challenges, it also reaffirmed our strategic clarity. We believe the steps taken by us across our key pillars will drive a positive impact on Glan Pharma success and long term sustainability.
Thank you for your continued confidence in Gland. With this, I’ll now pass the call to our CEO Mr. Shamakan Giri to share his thoughts for Gland’s road ahead.
SHYAMAKANT GIRI — CHIEF EXECUTIVE OFFICER
Thank you, thank you, Mr. Sadhu. Good evening everyone. Following my initial months at Gland, I have focused on understanding the business in depth and aligning our capabilities with the strategic levers that will drive our market position and generate value broadly. My priority has been to identify key areas of profitability enhancement and new areas of growth before I outline the initiatives underway to strengthen our competitive position. Let’s discuss our quarter and full year performance in Q4FY25, our consolidated revenue stool. At INR 14,249 million with a consolidated. EBITDA of rupees 3,475 million reflecting a 24% margin 100 basis point increase year over year. Excluding Senexe, our base business reported revenues of INR 10,332 million in quarter 4 FY25 a 12% year over year decline primarily due to the higher milestone realization in quarter four last year as compared to this year in the US and few major tender misses in row markets. This impact was partially mitigated by new product launches and we anticipate sequential improvement as our pipeline commence lines. Encouragingly, the base business EBITDA margin expanded to 38% from 36% in the prior year, driven by favorable product mix and benefits of cost optimization for the full year.
25 our consolidated revenue reaches INR 66,165 million with an EBITDA of 12,689 million resulting in 23% margin. Excluding Sunexc. Base business revenues were INR 41,248 million with an EBITDA of INR 14,451 million translating to a 35% margin. Our volumes for 2025 grew overall by 4% including new launches aided by 9% volume growth in the US again including NIM. Our new product launches in the US are yielding results thereby shorter 4 full year 25 grew 10% sequentially over quarter 3 full year 25 on a full year basis, our new launches now contribute 6% to the total revenue in the US market.
We launched four new molecules during quarter four including metanoprost, minazolam, RTU bag, Dexamethasone and new strains of Vancomycin. Other regulated markets, primarily Europe, Canada, Australia and New Zealand grew by 4% and now constitute 23% of total revenues. The RW market contributed 17% in quarter 4 25amounting to INR’s 4404 million, a 14% decrease due to tender misses and software auditing intake in key regions. The Indian market generated 525 million rupees representing 4% of our quarter 4 FY25 revenue. Our quarter 4 FY25 R&D expenditure was rupees 503 million or 4.9% of the base business revenue for the full year.
Our R and D investment totaled Rupees19.22 million. That is 4.7% of base business revenue. On the compliance front, we received EIRs from the US FDA for our Dundigal and Pasha Meralam facilities, confirming successful closure of recent instructions and reinforcing our commitment to STEM and change in quality standards. It’s been a challenging year for sunexc. While foundational groundwork for a turnaround is in place, results have fallen short of expectations. Our quarter four FY25 revenue was 43 million euros affected by lower production at the Fonteni facility and causingly our gross margin improved to 79% from 77% in the prior quarter.
Allianz will provide a detailed update but we want to assure you of our intense focus on SYNXC and the implementation of necessary changes to improve its financial performance and achieve a strategic objective. Finally, a brief update on the key priorities outlined last quarter. We have been fortifying our capabilities and global expansion potential. We are currently refining our strategic direction and growth between gland for sustained success. On the demand side our priorities include enhancing our footprint and launching new products in high value high growth row markets, leveraging our strength in specific therapeutic areas and exploring inorganic opportunities to achieve significant growth in the India market.
In the US the primary focus remains on acquiring new customers and increasing our share of business with existing partners supported by an accelerated portfolio strategy focused on co development in licensing and partnerships in high value injectables and newer modalities. On the supply side our priorities are centered towards maintaining quality and cost leadership. We are continuously improving our operational efficiency to preserve our competitiveness and industry leading quality and compliance record, strengthening our leadership team with critical hires and building capabilities across functions with innovation, collaboration and excellence our guiding principle. I am encouraged by our progress and optimistic about glance trajectory.
Your continued engagement and insights are invaluable as we move towards building as we move forward together to build value. With this I would like to hand over to Alain for a more detailed update on Senex’s performance. So over to you Alain.
ALAIN KIRCHMEYER — CHIEF EXECUTIVE OFFICER
Thank you, thank you Mr. Giri and good evening to everyone. As Mr. Sadhu and Mr. Giri outlined, NXP’s performance showed marginal improvement over previous quarter and we will continue to make calibrated progress towards achieving sustainable scale with a dual aim of securing profitability and resolving the execution challenges seen in recent quarters. To provide a more granular perspective, let me walk you through key updates at the site level Production at our Fortnay facility in Q4 was impacted by ongoing remediation activities following the ANSM inspection in Q3 financial year 2025 as well as the breakdown of two equipment that affected our performance in the first two months of the quarter.
These disruptions led to reduced shipments and consequently lower sales figures. On a more positive note, I am pleased to report that our new high capacity ampoule line has started production as planned at the end of January and now enables us to better serve the needs of our customers. While operations at Errorville remain below break even due to suboptimal utilization, we have several ongoing tech transfer projects in development that are expected to contribute to this site’s growth. We are encouraged by the ramp up in the commercial production of a new ophthalmic gel and validation batches for the inactivated vaccine project are progressing as per schedule.
Furthermore, we have initiated the installation of a new prefilled syringe line which is projected to be operational beginning of calendar year 2026. This will substantially increase our capacity in the high demand PFS segment and is expected to drive significant revenue per unit and overall value. I am pleased to share that the Brainlelle facility has met its target for this quarter. Our two new lyophilizers arrived on site and are being installed. Qualification for this new LYO capacity will be finalized at the end of the calendar year 2025. Additional vial and layo capacities are also planned to be added in our Belgian site in the next two years.
The long term prospects for this business remain robust with high value projects in our tech transfer pipeline. Finally, our O NIS site continues to deliver a strong performance thanks to a premium strategic positioning on hormones and antiallergenic products, market segments and strong operational execution. In light of the challenges faced, last year’s overall performance remained below expectations and we believe financial year 2026 will mark the beginning of a meaningful turnaround. We remain firmly focused on achieving our midterm objective of delivering positive EBITDA by Q3 financial year 2026. Thank you for your time. I will now turn the call over to Ravi to discuss our financial performance.
Ravi, over to you.
RAVI MITRA — CHIEF FINANCIAL OFFICER
Thank you Anna and welcome everyone joining us today. We thank you for attending this call as we review our financial performance for the fourth quarter and the full fiscal year 2025. The FY25 revenues remained flat at Rupees 56,165 Million. However, a key positive was the marginal improvement in gross profit margins. Consolidated revenue for Q4FY25 declined as compared to previous year while it improved from the trailing quarter of this year. This is driven by the reasons as mentioned by Giddy in his commentary in Q4 FY25, our consolidated EBITDA margin improved to 24% from 23% in the corresponding period of FY24.
Led by base business and improvement in Senexc’s profitability, our base business excluding synexy exhibited increase in ebitda margin for Q4FY25 reaching 38% compared to 37% in the same period last year. This improvement was primarily driven by enhanced gross margins and more efficient cost management practices at senexc. The losses reduced due to improvement in performance in this quarter. Our EBITDA for the full year ending March 25amounted to Rupees 12,689 million compared to INR 13,331 million in the previous fiscal year. The reported EBITDA margin for FY21.25 stood at 23% on a consolidated basis and 35% for our base business operations.
While the base business margin improved due to better contribution and controlling costs, Senex’s lower performance in some quarters in this full year impacted the consolidated EBITDA margin by 1 percentage point. Gross margin for Q4FY25 also reflected positive momentum increasing to 66% from 61% in Q4FY24 primarily due to higher contribution achieved in new launches and better raw material cost in few of the key products within our base business. The gross margin in Q4 FY25 was at 61% compared to 56% in the previous year. On a full year basis as well, the gross margin have improved by 100 basis points as compared to previous year.
Our net Profit for the fourth quarter decreased by 3% to INR18.65 million compared to Q4FY24 and declined by 10% in the full year as compared to previous year. During the quarter we achieved a pat margin of 13% consistent with the previous year. For the full fiscal year our PAT was Rs. 6,985 million resulting in a margin of 12%. Other income, which is mainly interest earned from bank deposits and foreign exchange gains amounted to Rupees 440 million in Q4FY25 is lower than as compared to Rupees 585 million of Q3FY25 primarily due to reversal of foreign exchange gain during the quarter.
For FY25, other income was Rupees 21. 36 million which has increased as compared to Rs. 1702 million in previous year due to increase in interest income. Higher finance cost incurred during the year is related to interest charges on a GST. Different matter. The total RNG expenses for the fourth quarter were Rupees 503 billion compared to Rupees 437 million for the same period of the previous fiscal year, representing 4.9% of revenue from operations on an ex NFC basis. For the full fiscal year, total R and D expenditure was rupees 1,922 million which constituted 4.7% of our revenue and increased from last year’s 4.3%.
Underscoring our ongoing commitment to R and. D. On a standalone basis, our effective tax rate was 26% in the fourth quarter and same 26% for the full fiscal year as of March 31, 2025. At the group level, our total cash. And cash equivalents to that rupees 25,562 million. After accounting for Senexi’s debt, our net cash position was rupees 22,870 million. Cash flow from operations during FY25 was rupees 9,147 million. Working capital as of March 31, 2025 was rupees 21,683 million. Our average cash conversion cycle improved to 172 days for the 12 months ending March 25 compared to 173 days in the corresponding period of the fiscal previous fiscal year. Total capex during the quarter amounted to rupees 886 million and full year FY25amounted at rupees 3938 million allocated to glands, Indian sites and synaxi in India. Our growth capex is focused on expanding a new bag line and increasing packing capacity.
We are also in the process of adding a new package line at Fleet nine which will complement the existing cartridge line at our Bashmaragan site. As Ala mentioned, at synxe we are investing in additional high speed and new lines and layers to enhance overall capabilities. With that, I would now like to request the moderator to open the lines for questions.
Questions and Answers:
operator
Thank you, thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star then one on their touchstone phone. If you wish to remove Yourself from the question queue you may press star then two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles again. If you wish to register for a question, please press star then one. Our first question comes from the line of Neha Manpuria from Bank of America. Please go ahead.
Neha Manpuria
Yeah, thanks for taking my question. My first question, just a clarification. What would be the profit share milestone number for the quarter?
SRINIVAS SADU
I seem to have missed that. Hello. You want the absolute number?
Neha Manpuria
Yes, the profit share in the milestone number please.
SRINIVAS SADU
So it’s about 145 crore is about 14% profit share.
Neha Manpuria
Okay.
SRINIVAS SADU
Milestone is 6%. Milestone is 6%.
Neha Manpuria
Okay, got it. If I look at the US business adjusted for these two then it seems like, you know, we’ve been in that, you know, 70 to 70, you know, $5 million range per quarter in the US business despite the fact that we’ve launched, you know, 31 new products in the year. How should we think about growth from the US business as we launch more products and gain more volume, you know, in terms of growth, you know, what should this run rate next year and the year after? And just an add on question to the US market, given the noise around status, what are we hearing from our customers in terms of the ability to absorb up our fund? Thank you.
SRINIVAS SADU
Yeah. From the revenue, US revenue perspective, while there’s a for the new launches about 4% growth which came from us. But there also the normally over the years it’s been around 8 to 10% growth which used to come from new launches. What happened also was the products, there are several key products where the material costs have gone down and the end market price also was reduced, the transit price. So the revenue came down but the margin was intact. That’s one of the reason why actually the revenue didn’t move that much compared to previous years. On the tariff side it’s too early to comment.
But what we hear is for generics it will not impact that much. But as also what we see is probably most of it will be passed on if there are any tariffs which levied on Indian imports.
Neha Manpuria
And from the US business I was thinking about from the 70 to 75 million that we’re doing is sort of milestone and profit share. What should this number be over the next few years? Will the new launches now will be able to reset this base higher or what should drive this base higher?
SRINIVAS SADU
Yeah, it should contribute more. Looking at the historical numbers and also the type of products which are going to the approval in next year or two more from the complex side. And also we are looking at as a business, we are looking at mid teens as a growth for the coming year. This is for the US business or. For the consolidated business for the consolidation.
Neha Manpuria
Okay, got it. And on the ROW business side it seems like the Saudi contract tender has been delayed for some time. So what should drive the growth of the ROW business for us given that the Saudi contract is not coming? Are there any more drivers for us or this is the new base that we should be operating that bland should be operating at.
SRINIVAS SADU
Hi Neha. So yes, you’re right. But you know what has also happened is the Saudi nupko, of course we lost. There’s a tech council going on right now where we want to we engage local partner to manufacture Enoxaparin. The volumes will come back. But what we are doing also is in place defining a non anupsa and non heparin strategy. Okay. So we have clearly earmarked some high growth countries where we have a very portfolio approach, a targeted registration approach which will help us going forward. We have approximately upwards of around you know, 500 registrations still pending which will come over years, you know.
And so there are three growth levers here. One is how do we push the current registration? Okay. How do we use our cost efficiency that we have to win tenders in some of the key tender market and how do we again be a very focused country in country kind of strategy. So we define and play in the country with a very strong portfolio this quarter. Also what has happened was because of the US volume, you know, we dedicated some capacities to row but we are back on track, you know. So that’s this quarter. But our long term vision on ROW is the strongest.
We internally I believe that this business can double over next three to five years.
Neha Manpuria
Got it. Thank you so much.
operator
Thank you. A reminder to all the participants if you wish to register for a question please press star 101 on your Touchstone phone. Our next question comes from the line of Binopathy Barampil from Elara Capital. Please go ahead.
Bino Pathiparampil
Hi, good evening. Just a follow up, did I hear right that you said the next question year you are looking at a mid teen growth at the overall level?
RAVI MITRA
That’s correct.
Bino Pathiparampil
Okay.
RAVI MITRA
That is including Synaxe consolidated.
Bino Pathiparampil
Okay, that’s good. Okay, got it. And apart from the improvement in Synaxi margins, are you looking at improvement margins in the in the rest of the business as well?
RAVI MITRA
So rest of the business actually has been pretty good. I mean stabilized around 37%. 38% if you have seen last two quarters. So we continue to maintain around that margin.
Bino Pathiparampil
Got it. And from your presentation I can see that you have 27 Parafore filings in. The US. Out of which how many would be of any. First of all exclusivity.
RAVI MITRA
Give me a second. We can come back to you on that.
Bino Pathiparampil
Sure. Amore, I’m looking at any big exclusivity launch expected in the next couple of years. 26 or 27 as for financial years.
RAVI MITRA
Yeah, we’ll come back to you on that. Yeah.
Bino Pathiparampil
Okay, thank you.
operator
Our next question comes from the line of Ashish from Everflow Partners. Please go ahead.
Ashish Konaje
Good evening to the management. So my first question is what sort. Of growth could the GLP drug be for us in the coming year and. Over the next two, three years would. They meaningfully accelerate our growth trajectory?
RAVI MITRA
So GLP right now our position is around 40 million cartridges. You know, next year we’ll be one of the top tier cartridge capacity company with 140 million. Now GLP as you know, you know in many markets is going off kitchen. So this is really a fill and finish opportunity that we are looking at. And our initial success is giving us all the strength to to go further and block all the capacities in the coming time. How will the market behave on the demand side, on the patient pricing side is something that partners would answer. But there is, there is only encouragement, there’s only good news around glp.
The volumes are, the kind of volumes the partners are discussing are very very high. So we feel that this, this market will explore by volumes at least in coming years.
Ashish Konaje
Could you just, could you please quantify the growth in the next two, three years given the product pipeline and base business.
RAVI MITRA
Ask again. Could you please quantify the growth?
Ashish Konaje
Yes sir. Could you please quantify the growth over the next two, three years for our business given the product pipeline and base business. So we next year we said about mid teens subsequent few years every two years it will be low 20th. Okay, got it?
RAVI MITRA
Yes sir.
Ashish Konaje
Thank you. That’s all from my side.
operator
Thank you. Participants, you may press star then one to ask a question. Our next question comes from the line of Aditya Pal from MSA Capital Partners. Please go ahead.
Aditya Pal
Hello. Am I audible?
RAVI MITRA
Yeah, go ahead.
Aditya Pal
Thank you so much for the opportunity. So just wanted to quickly understand the thought process on. So what I can understand is Senex is largely a generic CDMO business. But I’m not understanding that why is the employee benefit expenses 60, 65% of my revenue and have we over invested in people where now that we scale up come here the margin will float to delete the bottleneck. So that is question one from my side.
RAVI MITRA
Yeah, so yeah the. The average cost of manpower in Europe is around 40. So yeah, so comparatively a bit more higher. I think that’s the issue we need to address but it’s also related to how much revenue we’re getting and how efficiently we can manufacture the so with the investments we are making on the capex so we are installing more efficient lines that will give us a large throughput. At least two sides have demand which is more than what we are able to supply today. With the new lines which are adding up that should cover the revenue loss.
What we are having today from the strategy perspective, if you see these are branded central which is one solid business, look at the customer base and the volume base. What we have, it’s been very consistent over many years. That’s the nature of the business. Second also technologies what gland do not have, they do have, they do make syringes of oncology products. They also have hormone products, they do vaccines and some biologics products as well. So from technology perspective they have additional things. That’s the logic behind I of course de risking ourselves on our business in US which was most of our business was in US and to enter Europe we need to have this kind of a business.
So there are several reasons on why we acquired it. But yeah, from efficiency perspective that’s where we are focusing currently because like you rightly said the manpower cost as a percentage to revenue is quite high compared to the other companies in Europe.
Aditya Pal
And so couple of questions, both are interlinked with each other. In your presentation you said that we are planning to spend close to 60 odd million over the next three years in sync sea. So one is that. When will we. Achieve a double digit EBITDA margin in this business that is 10xE and what will be my. What will be the roce of this business? Because if you’re investing, if you’re investing 60 million euros over the next three years and the base business can do a 25, 26% ROCE comfortably and if you’re not able to achieve that then it doesn’t it not make sense to judiciary. The judicious fee is the cash flows investing for a land based business. So that is the thought process that I want to understand from the management.
RAVI MITRA
Yes, basically this capex is an investment for the long term and we are increasing the capability and capacity. We have sufficient visibility of the pipeline and the business interest there is a strong funnel we have with the customer. So we will be spending this money next two to three years in building like Alan mentioned and we spoke about it is one is of course adding a new line in HSE which will entail a much better realization per unit sales and what currently we do. And then in the Belgium side we are adding one addition wireline and lyos that will significantly improve the capacity of high value business.
And there is a already tied up in the business and contracts for that. So we are looking at breakeven in this December quarter and then next year we should improve the EBITDA margin significantly. There is a high operating leverage there and we should be getting reaching the almost you know the earlier double digit EBITDA in the next year after that.
Aditya Pal
So just one last question from my side. So in the earlier to the early participant you mentioned that we are aiming to grow at mid team growth for the entire business. So how should one look at from the from overhead perspective? So do we see the overheads that is what the senexy and the base business increasing with lockstep with the revenue growth or there is some room for operating leverage.
RAVI MITRA
Now there’S ample room for operating leverage like you’re mentioning that the overhead in typically inductive capacity is about 80% or more fixed and the workforce which they have currently is sufficient to take care of the additional line we are adding. We are not going to hire new people for that. So and it’s inside the same facility. So the electricity and other overhead will remain the same. So as and when the revenue ramps up we would see the margin expanding.
Aditya Pal
Understood? Understood. Thank you so much and wishing the team all the very best.
operator
Thank you. The next question comes from the line of Tushar Manudane from Motila Loswal Financial Services. Please go.
Tushar Manudhane
Yeah. Thanks for the opportunity sir. Out of the three anticipated approval from the in house complex pipeline. Could you just share you know the market size and the competition competition that can come up at the time of launch by blank without naming the product maybe. Hello.
RAVI MITRA
From a pipeline perspective you know our. So we have total 71 ANDAs in the pipeline with a time of around 5.71 million of which our Genesized portfolio has around 40 NDAs covers a time of around 1.24 in next one to three years our pipeline we have 5 NDAs with a time of around $2.12 billion and beyond three years you know our investment that we are doing with co development partners the finer 5B2 the NDA we are targeting a time of around 2.34 billion market. So if you see from an avenue standpoint, we see also 33 launches in the US our new launch more gross margin than the average gross margin.
For example, we have 72% gross margin only from the new launches as compared to the company average around 58%. And therefore we are very focused on what to launch going forward. And yes, we are a manufacturer. So from a demand estimate standpoint we do get forecast and all from the partner company. So we are looking forward for again a similar kind of revenue contribution from new launches in the coming year.
Tushar Manudhane
Sure, sir. How much would be the contribution from enoxime apparent for 4th quarter and FY25 across the geographies?
RAVI MITRA
Give a second. Thank you.
Tushar Manudhane
Thank you.
RAVI MITRA
14%. Yeah. 14% of the total revenue.
Tushar Manudhane
Yeah. For the quarter as well as FY25.
RAVI MITRA
FY25 is about 14% and the quarter is about quarter is about 16%.
Tushar Manudhane
So secondly, this milestone as well as profit share, if you see last couple of quarters, this quantum has increased on absolute basis as well. While it’s difficult to predict per se. But how to think about this maybe for next few months, are there any good products which can still sustain substantive income?
RAVI MITRA
For us, the milestone actually last quarter is lower than before because it’s, you know, it’s not, it’s not a consistent on a quarter on quarter depends on what milestone we hit in that particular quarter. You know, some are signing milestones and some are. And when you get signing or if it’s a tech transfer then if it closed they could be patches. So the timing will be different. But overall annual basis, if you see it’s more consistent. So I would say milestone I look at on a yearly basis the profit share it depends on how many launches we have done and how it has increased.
If you see the launches, what we’ve done in Q3 was more almost every 13 products we launched in Q3. So that will contribute higher profit. And that’s the reason why we got a higher profit share in Q4.
Tushar Manudhane
Got you. GLP is also contributing for this milestone. Income profit?
RAVI MITRA
No, no, no. It’s nothing to do with glp.
Tushar Manudhane
And so just lastly on this biologics trend, While you know one contract is expected to sort of start revenue in FY26, but broadly if you could share like how much overall we can expect in FY26, is it like 25, $30 million to start with in biologics business or it will be still a gradual scale up in this segment.
RAVI MITRA
Yeah, for FY26 it will be about 100 crores I would say then it is gradual increase.
Tushar Manudhane
Understood, sir. Thank you. That’s it from me, sir.
operator
Thank you. Our next question comes from the line of Sham Shrinivasan from Goldman Sachs. Please go ahead.
Shyam Srinivasan
Yeah. Good evening. Thank you for taking my question. Sir. When I look at the overall US revenue annually, around 3,000 crores, 350 million. And I’m just trying to tie it up with the growth guidance. So we need to go at least 15% given the size. So we’re looking at another additional $15 million of revenue. So this one understands how is 1526 different from 25? I thought we had a similar ambition to grow. So the launch track record has been very strong. So is that what is going to be driving this 15, 16,000% growth in the US which we’ve not seen so far, but maybe it comes in 26.
So what gives us that comfort on guidance?
SRINIVAS SADU
So FY26 overall we are seeing 15% growth. It’s a combination of some growth coming from Synexi because the numbers will improve that they’re already seeing very last two quarters. So some growth will come from there. Some growth will come from the new launches and some is the tech transfer projects, what we started, some dry powder contracts, what they have done, that contributes about 60, 70 crores. Yeah, about 60, 70 crores from that. Then the biologics will contribute under 100 crores. So there are different levers which are contributing. This combination of volume growth in US is substantial.
While the prices have come down because of the overall material cost. So the top 10 has kind of from the transfer price wise, it’s stabilized now the volumes have gone up. Even if you look at our top 10 products, that has actually grown around 24% in terms of volumes. So there’s a lot of uptake in terms of top products. Especially even if you consider heifering in oxa. Not just these two, but there are several products where we got newer contracts. So added to that what’s happening is what we have invested into the line time and also some of the R and D investments have gone into life cycle management of products.
That has helped to reduce our costs and that made us more competitive and that’s the reason why our volumes have increased. And also while the prices have come down, still were able to maintain that EBITDA margin. So that kind of consumed some of our line time, which has actually what do you call mitigated some of our business growth. In, in row. So that will also now come back because we have new three lines added this year. So that will be coming on track.
Shyam Srinivasan
Yeah. So despite all this volume growth, I think pricing or whatever transfer pricing related pressure has been high. How would you quantify that for say fiscal 25? And what gives us a confidence that pricing is not even worse than in 26?
SRINIVAS SADU
When I say the financial, the end price has not changed. What we said is the transfer price of Gamba because we have reduced our material cost and changed our suppliers to be more competitive in the market, we get more contracts. That’s why the volumes have increased. At the same time we’re able to maintain margins.
Shyam Srinivasan
Understood, sir. Thank you. And all the best. Thank you.
operator
Thank you. The next question comes from the line of Mirish Pathak from White Oak. Please go ahead.
Dheeresh Pathak
Yeah, thank you. Sir, how much have you spent on that 100 million pen line?
SRINIVAS SADU
So this cartridge line is due to be installed this year. The overall cost would be about 120 crores. Everything together only for this pattern.
Dheeresh Pathak
120 crores. Okay. Does Synaxi also have cartridge lines?
SRINIVAS SADU
No, only syringe lines. No cartridge. But the syringe line can also handle the cartridges. But restricted to cranel cartridges, they can’t do bulk up. Restricted to the turbine can be used. Refilling, turbulent can be used to fill sterile cartridges.
Dheeresh Pathak
Okay. Okay, sir, just on Synaxy, So we paid 30020030 million euros and we are spending another 60 to enhance the capacity. Then another 30, 14 lost funding. We end up spending 350 million euros. Even if we do, you know, 200 million revenue, double digit EBITDA, you know, daily making and then if you add on that tax and maintenance capex, this looks like a very. Even if we get to that milestone of, you know, double digit, how much we have spent and the bandwidth and all that it has taken, seems like a very poor capital allocation. Is this a business even worth pursuing? Based on whatever obviously benefit of hindsight and whatever your understanding is currently, is it a business worth pursuing?
SRINIVAS SADU
So this. Genexi, the investment thesis is taking longer than what we estimated for sure. But now that we are back on track, so with this additional capacity which we are adding to this capex, this will take our revenue to not 200 but 300 million in three years time. And then we are looking at EBITDA of about high teen as a percentage. And there is also strategic lever which we have not yet been able to get the benefit out of it simply because we are currently focusing on getting the Things housed in order. For example, we are looking at cross selling to each other’s customers.
We have not looked at that aggressively yet.
RAVI MITRA
If you look at the customer base of synxe, they have big CDMO players who actually we don’t have access to. Also these players also sell in rest of the world markets and they are looking at increasing that market getting products out of India. So a lot of other benefits we looked at when we invested into the asset. But currently the focus is on making it a bit more efficient to get that on track and then work on the synergies because there are too many things you can’t do at the same time. So from long term perspective that are the things there.
There are several opportunities where we can use this. You know like I said, the control substances you can’t make it from India and sell in US There are very few players who supply those products but Europe can supply. So they also manufacture a few products to other players who supply to US market and we actually are restricted in that. So the idea was we can actually develop some products in India and then transfer this and supply to the US in terms of control substances. So there’s several other areas of synergies what we looked at when we acquired this asset.
Dheeresh Pathak
Now the point says that even at 300 at high teens it will not be like the best of return on capital investment. It just looks like that doing this kind of a CDMO working zero is assuming that when we get to high teens we would be among in terms of operating efficiencies in terms of top quartile in the European assets. With this kind of an asset price at least doing this kind of a business in Europe does not look as attractive. Unless you’re saying that we can scale up even much higher than this. That’s my limited point and leave it at that.
But thank you so much for clarifying.
operator
Thank you. Our next question comes from the line of Harsh Bhatia from Bandhan Mutual Funds. Please go ahead.
Harsh Bhatia
Yeah, thank you. Am I audible?
SRINIVAS SADU
Yes, please go ahead.
Harsh Bhatia
Thank you. Sir, two quick questions. One is in sort of relation to a comment you made earlier. So in terms of the capacity expansion, again related to the part so multiple line items and expansions including AMPLs and lyocalization. Is there a situation right now where we are not able to take incremental business because of high level of capacity utilization or some other reason which is why we are going so aggressively for this capacity expansion plan? I mean understanding sort of issues.
SRINIVAS SADU
Yes, at least two sides I think we are not able to cater to the demand because of I would say slower lines or inefficient lines I would call. So of course one is of course replacing the current lines in one of the sites, the other is adding new capacities because the demand for live products, one is for the current products what they are commercialized and also with pipeline what we have and moving forward, LIO as you know contributes more in terms of margin. So we need to invest into those. That’s the reason why we have made these investments.
Harsh Bhatia
Sure. And what would be the order book looking like for Synxy as such to. Come back to you?
SRINIVAS SADU
Yeah. Sure. So lastly on the cottage capacity, so I mean one could presume that a lot of that capacity since time today at least at a 40 million level and possibly incremental 100 million, a lot of flat would already be booked to that extent. So in terms of the pricing part, if you could do some more color as well as is there some element of take or pay because obviously your sales would depend on regulatory approving, depending on market to market. Obviously you will not be able to, you will not be selling based on where the client is selling.
But irrespective, maybe some points on the pricing part as well as the takeoff and the regulatory aspect.
RAVI MITRA
So this is a, this is more a fill and finish CMO kind of job work. We are speaking to four kinds of customer. Indian players who want to launch their GLP in global market Indian players who want to launch their GLP in India market, Global player who wants to launch their GLP in India market and global in global market. On fill and finish point I’ll give a range, you know, the range is between one to two dollars. You know, that’s the range of fill and finish, you know and as we are preserving some capacities to to give it to the best partner so that the whole business is sustained.
We did the deal with the Indian company for the global market. So this is what the sense is.
Harsh Bhatia
So just one last follow up.
RAVI MITRA
Yes sir. What? Did you not hear us?
Harsh Bhatia
No, sorry, just one follow up. Lastly, by best partner you mean a customer who is able to give you good visibility in terms of the volumes and capacity bulk up.
SRINIVAS SADU
Exactly, exactly. Customer who has a strong presence in that country of launch and customers were really serious about making usable product in that. You could say for the next 12 year period, let’s say very broadly put, maybe at the India level or at a global level there could be certain supply constraints in terms of full finish, the cartridge capacity as well as the pen assembly. Maybe These two components could have some level of supply constraint, India level or. It depends on how this market plays out, you know. But time will tell how SEMA will. For example, you know, one of the proprietary company has launched SEMA in a while the GLP in India. Okay. It really depends on how this market plays out. Yeah, but the volumes are increasing. The volumes are increasing and we are, we are getting prepared. We have prepared at 140 million, as I told you earlier, will be one of the top tier cartridge capacity company in the country. And there was a question around order book of senexi. It’s around 100 million.
Harsh Bhatia
Sure, sir. Thank you.
operator
Thank you. The next question comes from the line of Alankar Garude from Kotak Institutional Equities. Please go ahead.
Alankar Garude
Hi. Thank you for the opportunity. So firstly with the two contracts on. GLP1 how much of the 40 million. Capacity is done now?
SRINIVAS SADU
That will be most of it is will be consumed. So that’s the reason why we have invested in the second line because I think you know, it will be in a phase manner in next few years. So the second line will up and running by end of this year. So this 40 million will not be enough for the new partnerships what we’re going to enter.
Alankar Garude
Got it, sir. So you spoke about this one. $2 for the CMO fill finish. On the pricing front, is there any annual repricing clause?
SRINIVAS SADU
Yeah, it’s always there on the contracts. It will be there depending on the cost, structures and all that. Yeah, it’s always. And also there will be especially the CMOs. There are two types, right? One is of course the tech transfer that helps the product or the Pure CMO. So Pure CMOs always have these clauses based on the volumes they pick up. Certain volumes they’ll be pricing and lower volumes will be higher prices. So these are tier price.
Alankar Garude
Understood. The second question you mentioned about passing. On most of the tariffs to your clients. Have you had any conversations with your. Clients on this front and what has. Been the initial feedback?
SRINIVAS SADU
While there’s no real concern from our partners because really see the tariffs is on the transfer price, not on the enterprise. So the impact will be lesser. And there are a couple of conversations but it was very clear that it will be passed down.
Alankar Garude
Got it. And one final clarification. Did you mention double digit EBITDA margin in Senexa? In FY27 or FY28?
SRINIVAS SADU
27.
Alankar Garude
Understood sir. That’s it from my side. Thank you.
operator
Thank you ladies and gentlemen, with the interesting time, we will be taking one last question from the line of Mr. Vivek Agarwal from Citigroup. Please go ahead.
Vivek Agrawal
Thanks for the opportunity. So my question is on the US business. So this year in FY25 overall growth was almost flat. So is it possible for you to give some color how the existing products. Have done as far as the volume. Growth is concerned as well as the new launches and how the pricing has behaved?
SRINIVAS SADU
Yeah. So Vivek, as I told you, if we in the US FY25 the volume growth has been plus 9%. The price has been minus 5% on the new product front for the full year. The new launches in the US contributed to 6% to the overall revenue. The new product gross margin is 72% for the full year. So yes, these are data that is around the U.S. understood.
Vivek Agrawal
And for the next year, right. You are giving kind of work for the consolidated level. But how to look at growth in the US Because I think you need. To fire in the US in order to achieve that kind of service. What is my understanding? Or for example, it is the other market where you are taking up higher. Thank you.
SRINIVAS SADU
So if you see Vivek, the US market, you know, our top 10 molecule revenue grew by 26%. You know, so we are really preserving our top business in many ways and is a function of new launches, new approvals that will come on an average. We launched 33 products this year and we intend to continue that momentum in the coming year. So it will be a combination of new customer acquisition and it will be a combination of new customer acquisition plus value expansion with new andas and all of that with the existing customers. So U.S. the estimate is next year 18%. 12% from the products and 6% from the TMO projects to the U.S. is about 18%.
Vivek Agrawal
Understood. That is good. And lastly actually going into content in the US So is it still there in the platter or the plan has been dropped?
SRINIVAS SADU
Still evaluating. I mean like I said, everybody is spot. So we are looking at how this piracy works out and how it. But it’s not out yet. We’re still looking at it.
Vivek Agrawal
Thank you sir.
operator
Thank you ladies and gentlemen. We will take that as the last question. I will now hand the conference over to Ms. Ranjan Jain for closing comments.
RUNJHUN JAIN
Thank you everyone for joining us today. We truly appreciate your insightful questions and engagement throughout the session. Should any further questions arise, please don’t hesitate to reach out to us through our investor relation team. We look forward to connecting with you again next quarter. Thank you.
operator
Thank you. On behalf of Hindalco on behalf of Hindalco Industries limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines.