Indoco Remedies Limited (NSE: INDOCO) Q1 2026 Earnings Call dated Jul. 24, 2025
Corporate Participants:
Unidentified Speaker
Pramod Ghorpade — President, Finance and Group Chief Financial Officer
Aditi Kare Panandikar — Managing Director
Sundeep V. Bambolkar — Joint Managing Director
Analysts:
Unidentified Participant
Rashmi Shetty — Analyst
Kenil Mehta — Analyst
Sudarshan Padmanabhan — Analyst
V.P. Rajesh — Analyst
Keshav Karwa — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Induco Remedies Q1FY26 earnings conference call hosted by Dalit Capital Markets Private Limited. 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 Start and zero on your touchstone phone. Please note that this conference has been recorded.
I now hand the conference over to Ms. Rashmi Shetty. Thank you. And over to you, ma’. Am.
Rashmi Shetty — Analyst
Thank you Anushka and good afternoon everyone. I, Rashmi Shetty, on behalf of Tolat Capital welcome you to the Q1 FY26 earnings call of Indoco Remedies. We thank the Indoco Remedies management for. Giving giving us this opportunity to host the call. Today. We have with us the senior management. Of the company represented by Ms. Aditi Panandikar, MD, Sandeep Joint MD and Mr. Pramod Kolpade, CFO.
I will now hand over the call to the management for the opening remarks. Over to you sir.
Pramod Ghorpade — President, Finance and Group Chief Financial Officer
Thank you, Rashmi. Good afternoon everyone. Thank you for joining this call today. Let me draw your attention to the fact that on this call our discussion will include certain forward looking statements which are projections or estimates about our future events. These estimates reflect the management’s current expectation of the future performance of the company. Please note that these estimates involve several risks and uncertainties that could cause our actual results to differ materially from what is expressed or implied. Indoco does not undertake any obligation to publicly update any forward looking statement whether as a result of new confirmation, future events or otherwise. Thank you.
I’ll hand over mic to our Managing Director Ms. Aditi Pananjekar for her opening comments. Thank you.
Aditi Kare Panandikar — Managing Director
Good afternoon and thank you very much for logging into this call for a discussion on the results of Q1.26. As you will all recall, our company Indoco went through several challenges last year and consequently results of the second half and in particular of Q4 25 were severely impacted coming up. Such a period is not easy. But I’m happy to share that while it is a steep road to recovery, there has been marginal improvement on many fronts. This is reflected into the results of first quarter 26 wherein despite a negative impact of mark to market on the numbers, we have yet shown improvement in EBITDA both for standalone as well as consolidated for the company.
I’m happy to share that the OTC business has shown great improvement and we have seen a growth of more than 46% over immediate preceding quarter. In addition to that, our master manufacturing program which was almost near completion has seen a phase one rollout in the first quarter this year and this is seen in the increase of more than 26% in international business solid oral exports which we have seen in this quarter. On point number three which is the warning letter by US FDA on GOA plant two Efforts to complete remediation and get the FDA to inspect GOA plant to continue.
Meanwhile, US FDA has allowed manufacturing to start from two out of four lines in the plant. Also as of last evening we heard the happy news that European authorities have approved the plant for sterile product supply to Europe. This speaks well of all the efforts we have taken at the plant for remediation and to meet with global standards of manufacturing.
I will now hand the call over to Mr. Sandeep to take you through the financials of the first quarter.
Sundeep V. Bambolkar — Joint Managing Director
Thank you Aditi. Good afternoon everyone. Let me first begin with the business highlights. Stand alone. Net revenues of the company for the first quarter 2526 are at 3838 million compared to 3942 million for the same quarter last year and 3411 million for the immediately preceding quarter showing a 12.5% growth on Q4 FY25. Consolidated net revenues of the company for the first quarter FY25 26 are at 4291 million compared to 4243 million for the same quarter last year, and 3839 million for the immediately preceding quarter. Standalone EBITDA to net sales for the quarter is 3.9% compared to 13.1% for the same quarter last year.
For the immediately preceding quarter we were at 1%. Consolidated EBITDA to net sales for the quarter is 2.1% compared to 11.3% last year and for the preceding quarter we were negative. Domestic Formulation Business Revenues from domestic formulation business for a quarter are at 2028 million compared to 2002 million for the same quarter last year. Major therapeutic segments like gastrointestinal anti infectives, tomatology and respiratory performed well during the quarter as compared to last year. On the international business front, revenues from international formulation business are at 1,393 compared to 1571 for the same quarter last year. Revenues from REG markets for the quarter are at 950 million against 1,273 million.
Revenues from US business are at 283 million against 487 million for Europe, for the quarter we are at 635 million against 754 million. And for South Africa, Australia, New Zealand at 32 million compared to the same figure last year. Revenues from emerging markets are at 443 million as against 298 million. And for the API business we are at 366 million against 312 million. Revenues from NSIFRCRO and Indoco Analytical solutions are at 50 million against 57 million. That’s all about the business highlights for the quarter
and I now request the participants to put forth their 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 a question may press STAR and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
We take the first question from the line of Nirman from Unique pms. Please proceed.
Unidentified Participant
Yeah, hi. Thank you for the opportunity and congratulations for the GMP certificate from the European authorities. So my question is for the plant under warning letter, is the remediation complete with, I mean, what the US FDA expects and if so, when can we, you know, invite the FDA to come and audit the plant?
Aditi Kare Panandikar
So I said this in the earlier call also our remediation efforts are on, they’re almost near completion. We expect to finish most of it by August this year, which is coming month. Some of the updates will continue to go to FDA for until December this year, but they keep getting updates from us. And when are we ready to. I think we will be from September, anytime we should be able to reach out to FDA to ask them to come and audit us.
Unidentified Participant
So given this approval from the European authorities, do we have approvals in Europe to sell our products, our sterile products. In Europe
Aditi Kare Panandikar
just for a couple of products, but important products. So which is why it was triggered. But that now opens up other opportunities.
Unidentified Participant
And so we, we will be filing more products for the European markets as well.
Aditi Kare Panandikar
Yeah, wherever the opportunity looks good.
Unidentified Participant
Okay. And on the master manufacturing plan. So you said we’ve rolled out phase one. So is there anything more that is left? And secondly in the rollout that has happened. So how has been the efficiency versus our expectations?
Aditi Kare Panandikar
Yeah, so when I said phase one, that’s why I called it phase one. Not that the plans have not completely started, but out of the four plants we talked about last time, three are now completely on. But as part of phase one, the Manufacturing has begun for us to get complete efficiency, the balancing of products, the availability of right number of orders, you know, because with the kind of disturbance we had last year, it’s going to take us some time to put that in place. Efficiencies will be seen when the plant capacities really are occupied fully. Which is why I said in phase two we should be able to see the outcome. Yeah, sorry,
Unidentified Participant
no. When do we expect this whole rollout to get over?
Aditi Kare Panandikar
So by end of Q2 now, so come Q3 from day one, we should have all plants up and going.
Unidentified Participant
Okay, that’s helpful. And last on the domestic market, so the growth, you know, has not been, I mean formulation side, 200 crores. I think we did that last year, we did that this year. So how do you see this market panning out for this year?
Aditi Kare Panandikar
Yeah. So again if you look at domestic IRL alone, yes, it is flat. But with Warren otc in total the company has shown a growth of on YoY basis about 5% and on QoQ basis around 13%, 14%. But you know, first quarter for most companies is challenging because it comes after the, you know, March, which is typically a big billing month for most people who have to finish their targets. So the way to look at India business performance would be to look at our performance possibly as shown in IQVR which is absolute third party. So if you look at the IQVR analysis of first quarter performance then for the industry Q1 there has been, for the covered market there has been a growth of 8% and for Indoco remedies the growth is 10%.
So when it comes to absolute secondaries as we call them, that is the primary impact sometimes sways between Q4 and Q1. But at secondary level there is a good 10% growth in the performance of products and almost all top four segments, anti infective, respiratory, GI as well as traumatological are in very early double digit growth.
Unidentified Participant
Okay, ma’. Am. And lastly on the interest costs, we saw a substantial increase in the interest costs. So if you could give the net debt number right now and how do you see the debt reducing over the next say 112 years?
Pramod Ghorpade
Yes, Professor. N. Debt level at this point of time that is on the 30th of June is overall at consideration level, short term and long term put together is 951 crore which is reduced by about 21 crore as compared to March 25. So we have repaid certain loan as per the repayment schedule. With regards to finance cost, it includes certain FX loss on account of mark to market that includes close about 5 and up to 6 crore. If I remove that then you can see the comparison of finance cost. But definitely it is increased slightly on account of overall exposure to the long term angle. Short term borrowings what we have at this point of time.
Unidentified Participant
Okay. Yeah. Okay.
Pramod Ghorpade
We expect another loan repayment in coming period in nine months. About 68 crore repayment which is in a plan for remaining nine months.
Unidentified Participant
Okay. Yeah. Okay. Thank you. That’s it from my side.
operator
Thank you. The next question is from the line of Ken Mehta from Boring amc. Please proceed.
Kenil Mehta
I would like to know. I would like to know are we going to further increase capital and Warren remedies because it has a negative network to strengthen the balance sheet.
Aditi Kare Panandikar
What is your question? Can you repeat?
Kenil Mehta
Are we going to increase capital in Warren remedies as it is negative net worth of crores to strengthen its balance sheet in coming?
Aditi Kare Panandikar
Yes, yes, yes.
Kenil Mehta
Waters.
Aditi Kare Panandikar
Yes.
Kenil Mehta
And also in our US subsidies which has a negative network.
Aditi Kare Panandikar
No, in FTP that’s not required.
Kenil Mehta
Okay. So you are expecting it will become profitable.
Aditi Kare Panandikar
Yes, yes, yes, yes. Performance is in a manner linked to our US performance. So when we improve here they will also
Kenil Mehta
understand. And I would like to know what is the OTC revenue for this quarter?
Aditi Kare Panandikar
The. I think close to.
Pramod Ghorpade
So for the quarter.
Aditi Kare Panandikar
Yeah. OTC revenue first quarter was 31.6 crores. Yeah.
Kenil Mehta
Thanks a lot. No questions.
operator
Thank you. Before we proceed with the next question I would like to remind participants that you may press star in one to ask a question. The next question is from the line of Sudarshan Padma Nabhan from askwind ndpms. Please proceed.
Sudarshan Padmanabhan
Yeah, thank you for taking the question and congrats on getting the key. My question is on the European markets now that there is a possible development that’s happened here and if you look at our will this kind of open opportunity for you to scale up in the coming field and do you have any such numbers?
Aditi Kare Panandikar
I can’t hear you very clearly but I think I got the gist of your question. You want to know about the prospects for Europe going forward. Right? So yeah, yeah, yeah. So Europe this quarter we have done 63.5 crore. And this is despite some challenging challenges continuing in this quarter also of supply to Europe which is the factor I said by Q2 we will be able to overcome. So by Q3 you will see Europe bounce back to its regular levels of supply. If your question is regarding the sterile approval of Europe out of flu and Europe is a continent of many countries and although OPHTHALMIC shine injectables have got good prospects in Europe.
They kind of are divided into several countries. We are looking at those products which have substantial potential and volume and we look to start supply to Europe from this unit. And at this point I would reserve giving any numbers.
Sudarshan Padmanabhan
Sure. And I mean with respect to the pending regulated market, we’ve seen a good growth this time. I mean what was driving the kind of growth this quarter and should we expect similar kind of run rate to continue?
Aditi Kare Panandikar
Yeah, so as you know our model in the semi reg markets is very much like the India model where we build brands and there has been good growth in demand for our products on the ground and therefore we are seeing this kind of growth in semireg markets. The growth is uniformly seen in various territories across French West Africa, west of Africa, Latam and other Asia as well. And since there is good concentration now on brand building as well as there has been good amount of revamp with the sales structure and the people who are responsible on the ground in French West Africa, both of this combined with a good strategic impetus from corporate office have resulted in this kind of growth. And going forward we are pretty confident that we should be able to sustain this.
Sudarshan Padmanabhan
And on the you know, west market, I mean any you know, view on, you know, brindellamide and combinant launch, how do we see this business moving up and you know, and also in terms of remediation cost, you know, how much was there in this quarter and how do we see the cost coming back?
Aditi Kare Panandikar
So when it comes to plant two, if you heard my earlier response, we feel, we hope the authorities come down before December and help us lift the warning letter. Some of these products, especially brinzolamide, etc. They are very complex suspension products and as of now it will be some time before we be able to supply those from the unit. Quite honestly it’s better to look at probably Q4 this year as a time for when we can start evaluating the Optal business to us and its performance continues. We continue to spend close to around 4 crores per quarter.
Sudarshan Padmanabhan
And we’ve seen an improvement in the cost and if I’m probably fast forwarding it say for the next four quarters or even further to that, you know, our business is clearly an operating levels business where we have a higher, you know, gross margin but it is basically the higher cost that is impacting us. So you know, from what you’ve done in this quarter, you know, can you give us some fair color on where we see by the end of the Fourth quarter and things kind of, you know, to get back to normal and probably more towards FY27 itself.
I mean, you know, is it something that we should be appreciating low double digits by the end of the year in terms of run rate and probably get back to somewhat closer to what we were in fo5.
Aditi Kare Panandikar
Actually it would be very tough at this stage to give any numbers to be honest. But as you have seen, there is good cost containment or at least the beginning of cost containment. We are a lot of efforts going on across the organization, across all manufacturing sites as well as sales functions to control any unnecessarily other expenses. Good control is beginning to come in on Capex and other spend and while we work on the efficiency at the plants. So our Ebitdas were very severely impacted and as you know, previous year we were running at around 11 to 13% EBITDA.
So I think our first intent would be to get back to those levels. And I would wait for another quarter to give you some kind of a future path. But save that. I can give you one commitment. You will see quarter on quarter improvement from here.
Sudarshan Padmanabhan
Sure. One final question before I turn back to queue is on the domestic side you, I believe Exob. Can you give some color? Because if I look at growth optically it looks lower than the overall ipm. Well, I think the products that you are into might be different. So in terms of more from market share, in terms of more prescription, how are we trending? Are we taking the market share? Are we kind of maintaining it? And how do we see the efforts panning out in terms of bringing back into that portfolio?
Aditi Kare Panandikar
Yeah, so as you know we have a larger share of acute portfolio, acute segment in our portfolio we also have close to 30, 35% coming from seasonal products. And if you actually look at the performance of domestic for this quarter it was ridden by one singular factor. Probably the climate change impact directly seen on a seasonal product portfolio. But our main division, Pharma and I used to say this that it has a hero for each season. And this is the first time we saw both Sital and Cyclopam impacted together in one quarter at a primary level.
But I must hastily tell you that if you look at our performance as per iqbr which is more indication of secondary then Cyclopam has in the quarter has grown by 11.4%. Cital is flat. It’s flat. The category for Cital is also flat. The category for Cyclopam is, you know that market is growing at lower than at 6%. We are growing at 11%. So we have done. Yeah. As you rightly said, some of our products are in categories which show this kind of a seasonal theme. But this year summer was very muted because of the early onset of rain.
In addition to that, a heavier push by some of the divisions in March probably must have impacted primary performance. But at secondary level we are fine. Prescriptions also for eight of the nine top brands of the company are in double digit growth. So I am not really concerned about the hygiene of the branded business. Also new products continue to do well and they are at close to 4.5% of top line this quarter. Also we have launched several new products. I think we have given you some indication in the mda.
Sudarshan Padmanabhan
Thanks a lot.
operator
Thank you. A reminder to the participants, please press star N1 in order to ask a question. The next question is from the line of Rehan Syed from three Netra Asset managers. Please proceed.
Unidentified Participant
Good afternoon team and thank you for giving me the opportunity. First question is towards the market activity in India. So what is the current field.
Aditi Kare Panandikar
Now? It’s better.
Unidentified Participant
Yes. Can I, Can I?
Aditi Kare Panandikar
Yeah,
Unidentified Participant
yeah. Okay. So what is the current tool for standard ML in Indian Reserve? Have you taken any strategic decision to rationalize division or or therapy focus in light of profitability pressures?
Aditi Kare Panandikar
Okay, so our average permanent return is in the range of three, three plus. Our larger acute divisions average out at four, you know, three and a half, four. But we have several small divisions where the therapy is also niche like ophthalm which is sub 2 and some of the newer, some of the ethical dental divisions because of the portfolio which has shifted to OTP and why they build again a new portfolio. So this is an impact of that. But I am confident by end of this year we should be able to add at least 25,000 per man by way of incremental phy.
And regarding resizing and restructuring, we are always looking out for that. Currently the effort is to move the very low phy headquarters to a reasonable level of at least two which should help us take the average much higher.
Unidentified Participant
Okay, and my next question is around the R and D expense. That R and D expense came in at 21.6% this quarter. Can you provide more insights on pipeline progress? Number of filing expected in FAQ indices for any differentiated or complex generic being worked on in the company.
Aditi Kare Panandikar
So we expect to file four to five products this year. And regarding the increased R and D expenditures, this is typically because in the first quarter of the year you see a lot of expense on RLDs purchasing innovative samples etc. A lot of extra expenditure happens and that is why it is reflected like that. But by and large we keep it at 5%. I think we should be able to maintain that.
Unidentified Participant
Okay. Okay. And my last one bookkeeping question. Can you please provide a CapEx income quarter of 20 guidance for the full year? Will this primarily be for maintenance or any expansion of formulation, APM and hyen capacity? Are you going forward?
Aditi Kare Panandikar
So we, as we have said earlier also we are now very very much controlling the capex going forward. Currently there are some projects which are underway at Goa Plant 2 as well as at the API site for Warren remedies. Those are the only ones which will be gradually completed. That too not entirely this year. So I’m not expecting anything more than around 50cr incrementally to be put in capex this year.
Unidentified Participant
Okay. Okay ma’, am, thank you so much. Thank you.
Aditi Kare Panandikar
Yeah.
operator
Thank you. The next question is from the line of VP Rajesh from Banyan Capital Advisors. Please proceed.
V.P. Rajesh
Hi, thanks for the opportunity. My first question was if you can comment on the debt we are now spending at the end of the quarter.
Aditi Kare Panandikar
Yeah. So the total debt outstanding is around 950. Yeah. One second. Let’s just promote
Pramod Ghorpade
as you mentioned earlier overall debt level and consideration level. Short term is 350 and long term is 600. Both put together 950 crore as of 30th June 2025.
V.P. Rajesh
Okay. And how much do you think you will pay down this year?
Pramod Ghorpade
So in remaining nine months. So we already paid about 21 crore in first quarter. In remaining nine months we’ll be repaying about 68 crore as per our current plan.
V.P. Rajesh
Okay. And my other question was in the other income line. So while it has come down quarter over quarter but if you look at compared to last year it is still significantly higher. So obviously there’s one time cost about remediation and perhaps other related expenses. So what is sort of the sustainable, you know, business related other expenses? If you can just give a sense of that that will be helpful.
Pramod Ghorpade
So remediation cost is nothing to do with other income as such.
Aditi Kare Panandikar
Are you talking about their expenses?
Pramod Ghorpade
Expenses are income.
Aditi Kare Panandikar
So the the couple of headers in a other expenses we are watching very carefully which have grown historically for us are you know like your advertising, sales promotion naturally as the business has expanded Lab stores and spares, travel, those are the ones we are checking. Power and fuel of course. Although lot has been done by the company towards getting solar etc. Which is going to help us going forward. So we are watching these very closely and many of these other expenses, quite frankly as the sales increase, you will see that as a percentage of sales it will come under control. And we do not expect with increase in sales other expenses to increase in the same proportion.
V.P. Rajesh
I get that. My simple question was that, see if you look at Q1 fiscal 25, it was 120 crores.
Aditi Kare Panandikar
Yeah, yeah,
V.P. Rajesh
it was 161 crores. And this quarter. So what I understand is out of 157.
Aditi Kare Panandikar
Yeah.
V.P. Rajesh
Sort of one off costs and some costs related to the remediation process. So if you take that out.
Aditi Kare Panandikar
What should be an average level. So we would be comfortable at around 120 I feel at standard. Are you asking on consolidated basis?
V.P. Rajesh
Yes, I’m looking more at consolidated.
Aditi Kare Panandikar
Consolidated around 140 should be fine.
V.P. Rajesh
Okay. Okay. My last question is about the marketing expenses incurred on the OTC business. If you can just give some color around that. And what are the plans for the rest of the year?
Aditi Kare Panandikar
So typically for the first five years in an OTC business, a good amount of funds had to be deployed towards digital marketing, towards other direct reach to consumers. And the numbers are naturally higher. This year also we have budgeted much higher, although in the first quarter this year some of it has not come in which is why we are seeing slightly better results. We are aware of that. But as I said in the last management call also we would want to wait for full couple of years before we we see break even happen at Warren Remedy. If you want to know exact number. I’m not disclosing that right now.
V.P. Rajesh
Okay. But would you say is the business now sort of break even or how far away is it from breaking even?
Aditi Kare Panandikar
Yeah. So at this for the first quarter it has broken even at EBITDA and in fact done quite well. Yeah, yeah, yeah, yeah.
V.P. Rajesh
Okay, wonderful. And lastly on the US stage, given that you have perhaps less visibility of the US FBA inspection, when do you think it’s possible that you will start sort of seeing the light at the end of the funnel and the revenue start ramping up? Is it Q3 or Q4 or Q1 next year?
Aditi Kare Panandikar
In the beginning of the year we had said Q4 but after I think may end. When we last spoke with each other after the last management call that same day we got a go ahead from us FDA to restart two lines. So it’s been just two months since we got this go ahead. Activities have ramped up at the site. Sales are yet to happen from the products manufactured So I would say by Q3, Q3 is a good quarter in which we should be able to see some impact coming in from supply of sterile to us.
V.P. Rajesh
Right. That is what I understood. My question was, what is the meaning for which they have to come and inspect and then approve it for that particular line? When is the earliest you see that line coming back into the production?
Aditi Kare Panandikar
So like I said, we hope it would happen in this calendar year.
V.P. Rajesh
Okay. Okay. That’s all I have.
Aditi Kare Panandikar
Thank you.
operator
Thank you. The next question is from the line of Keshav Karba from White Pine Investment Management Private Limited. Please proceed.
Keshav Karwa
Yeah, hi. So I just had one question. I wanted to know. What is the breakup for API revenue, domestic and export API revenue?
Aditi Kare Panandikar
Yeah. So although we do record it as domestic and export largely because of where the product is sold and absorbed, technically almost all API we sell is used to make formulations which are exported. So there is no real. Yeah, so when I say domestic, it’s to other Indian players who then export the formulations because these are all DMS grades, only at the same price as we would give for DMF grade material. But all the same, I can kind of give you a breakup. We have done around 16 crore selling API in India and around 21 selling API outside.
Keshav Karwa
Thank you.
operator
Thank you. Ladies and gentlemen. In order to ask a question, please press STAR in one. As there are no further questions, I would now like to hand the conference with the management for closing comments.
Aditi Kare Panandikar
Yeah. So, good afternoon, everybody. Thank you for the very interesting questions and I hope we have tried to resolve your queries to the best of our abilities. Thank you for your confidence in us and with the promise to deliver better results in the future, I’d like to sign off and wish you all a great week ahead. Thank you.
operator
On behalf of Daulat Capital Markets Private Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.
Pramod Ghorpade
Thank you.
Sundeep V. Bambolkar
Thank you.