Indoco Remedies Limited (NSE: INDOCO) Q3 2026 Earnings Call dated Feb. 03, 2026
Corporate Participants:
Pramod Ghorpade — President, Finance and Group Chief Financial Officer
Aditi Panandikar — Managing Director
Analysts:
Unidentified Participant
Umesh Laddha — Analyst
Pratik Kothari — Analyst
Kenil Mehta — Analyst
Ankit Gupta — Analyst
Maulik Varia — Analyst
Dhwanil Desai — Analyst
Rohit — Analyst
VP Rajesh. — Analyst
Presentation:
operator
Sa. Sa. Ladies and gentlemen, you had been connected to Indigo Remedies Limited. Conference call call will begin shortly. Please stay connected. Ladies and gentlemen, you had been connected to Indigo Remedies Limited. Conference call call will begin shortly. Please stay connected.
operator
Foreign. Ladies and gentlemen, good day and welcome TO Indigo Remedies Limited Q3 FY26 Earnings Conference Call hosted by Nirmal Bank Equities Institutional. As a reminder, all participants line fulfill 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 on attached to a phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Umesh Lahada from Nirmalbank Equities Institutional. Thank you. And over to you sir.
Umesh Laddha — Analyst
Hello. I’m audible.
Umesh Laddha — Analyst
Yes sir. So. Good afternoon everyone. I am Umesh Laddha from Dhirmal Bank Institutional Equities. It gives me immense pleasure to hold three QFY 26 Indoco Remedies Limited Concol. From the management we have Ms. Aditi Panindikar, Managing Director Mr. Sandeep Bambolkar, Joint MD and Mr. Pramod Khorpade, CFO. Now I pass it over to the management for their opening remarks.
Pramod Ghorpade — President, Finance and Group Chief Financial Officer
Thank you, Umesh. 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.
Now I will request our Managing Director Ms. Aditi Panandikar for her opening comments. Over to you madam.
Aditi Panandikar — Managing Director
Yeah. Thank you, Pramod. Good afternoon everybody and thank you for logging in into our Q3FY26 earnings call. Happy to share that Q3 Indoco has delivered a better performance especially when it comes to our exports divisions as well as our APIs. I’m also happy to see the subsidiaries like FPP in US and Warren Remedies which is involved largely in the OTC business, do better. For this quarter there are certain highlights I would like to talk about. In our OTC business in India we have as a strategy of application extension and and brand extension launched two products Sensodent DSP and Sensodent dpc.
One is a daily sensitivity protection toothpaste and is in addition to our sensitivity product basket and the other is a daily Procare toothpaste which is actually our entry into clean toothpaste segment in the OTC area In the domestic business this month this quarter our domestic business has been a bit flat. This is largely because of our acute therapies which have shown challenges. However this is largely due to the unpredictable nature of acute in the primary sales. However, happy to share that secondary sales as well as prescription response is all intact. In fact we are happy to share that on a Mac basis.
In IQVR we have jumped one rank and are now ranked 21st in the prescription audit with a total of 10.86 crore prescriptions and we have jumped over Pfizer and that is a matter of great pride for us. We have also fairly succeeded with our new introductions in India and the total new introductions to sales is now at 6.5% of India revenues. Happy to share that Patal Ganga site of APIs has also received the EIR for USFD audit where we had 0483s. I’m also happy to note performance in emerging markets where not only have we done well in the sales primary sales from Indoco, but I’m particularly happy to see the growth in secondaries or the ground.
Also glad to share that Indoco has received the Most Preferred Workplace Award for 2526 by Marksman Daily at Mumbai. These are some of the highlights from my side. I now hand over to Pramod to share the financial highlights with you.
Pramod Ghorpade — President, Finance and Group Chief Financial Officer
Thank you madam. So I’ll share some financial highlights for this quarter. Standalone net revenues of the company for the third quarter financial year 202526 are at Rupees 3896 million compared to 3649 rupees million for the same quarter last year and Rupees 4293 million for the immediately preceding quarter, I.e. q2 financial year 2526 at 6.8% and negative 9% growth respectively. Consolidated net revenues of the company for the third quarter financial year 202526 are at Rupees 4343 million compared to 4025 million for the same quarter last year and 4718 million for the immediately preceding quarter, I.e. q2 financial year 26 at 7.9% positive and 7.9% negative respectively.
Standalone EBITDA to net sales for the quarter is at 6.6% at Rupees 259 million compared to 5.5% at 201 million same quarter last year and for the immediately preceding quarter Q2 financial year 2526 EBITDA was 12.4% at Rupees 534 million. Consolidated EBITDA to sales for the quarter is 7.3% at Rupees 315 million compared to 3% at 120 million same quarter last year and for the Immediately preceding quarter Q2 EBITDA was 9.2% at 431 million. Domestic formulation business Revenues from the domestic formulation business for the quarter are Rupees 202,142 million as compared to Rupees 2241 million same quarter last year.
Pramod Ghorpade — President, Finance and Group Chief Financial Officer
Major therapeutic segments like vitamins, antidiabetics, anti infectives and respiratory performed well during the quarter as compared to the same quarter last year. On the international business front, revenues from international formulation business grew by 26.2% at Rupees 1,356 million compared to Rupees 1074 million same quarter last year. Revenues from regulatory markets for the quarter grew by 25.9% at 861 million as against rupees 684 million same quarter last year. Revenues from US business for the quarter grew by 21.6% at 341 million as compared to 280 million same quarter last year. Revenues from Europe for the quarter grew by 36.9% at Rs.
485 million as against Rs. 354 million same quarter last year. Revenues from Sans Market for the quarter are rupees 35 million as against 49 million same quarter last year. Revenues from emerging markets for the quarter grew by 26.8% at Rupees 495 million as against 390 million same quarter last year. Revenues from API business for the quarter grew by 24% at 344 million as compared to rupees 278 million. Same quarter last year. Revenues from NSFR, CRO and Indoco Analytical Solutions for the quarter are rupees 54 million as against 56 million same quarter last year. That’s all about the financial highlights for the third quarter.
I now request participants to put forward 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 question may press Star and one on the touchdown telephone. If you wish to remove yourself from question Q, you may press star in 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. The first question is from the line of Pratik Kothari from Unique pms. Please go ahead.
Pratik Kothari
Yes. Hi ma’. Am. Good afternoon. Hi ma’. Am. First. Hi ma’. Am. First on Europe so last quarter we had some issues and there was some approval challenges which kind of got result and we were expecting some growth to come in but that actually gone down. So any updates if any on Europe specifically?
Aditi Panandikar
Yeah, so the we had said that there are some approvals coming in. Had to say that between customer and us there has been some delays. So some of that has got pushed forward by one quarter. That’s it.
Pratik Kothari
I mean so are they in place now or still there’s some time to go.
Aditi Panandikar
Almost 90% work done. I mean we pro. It has not happened in the first month of this quarter but expecting it to turn now. So we should at least get one, one and a half months of manufacturing.
Pratik Kothari
Correct, Correct. Second on other expense again our expectation was to kind of curtail it at 150, 160 crores at a console level we have been for last three, four quarters we have been doing 170. So anything we can do to control.
Aditi Panandikar
That I think this quarter we have controlled at a consolidated level. Yes. 169. 169 yeah,
Pramod Ghorpade
yeah. So that include certain you know one time cost, non recurring cost which we expect, you know, not to repeat. So there are certain remediation cost which was pending then there was a cost associated to certain penalties because of the.
Aditi Panandikar
Site being under remediation. There are certain products we’ve not been able to supply. There are some penalties against orders which were confirmed. So there are many such things but otherwise we are confident to keep it at 150 on a consolidated.
Pratik Kothari
Can we quantify this? Non recurring one time. Eight and a.
Aditi Panandikar
Half around eight to nine. Yeah.
Pratik Kothari
Correct. And anything on FDA for our go out plan to waiting.
Aditi Panandikar
We are waiting.
Pratik Kothari
Fair enough. Thank you ma’. Am. All the best.
Aditi Panandikar
Yeah.
operator
Thank you. A reminder to all the participants, you may press star and one to ask question. The next question is from the line of Kenil Mehta from Boring amc. Please go ahead.
Kenil Mehta
Any reason in this quarter? FTP became a hugely profitable business for us during the quarter.
Aditi Panandikar
So as you know we acquired FPP in June of 23 and we started with a very small portfolio which they had largely involving traded products over the last couple of years. We have built the portfolio through our products which we supply through fpp. Of course the basket has both solid orals as well as sterile. You know we are having certain challenges with sterile products supplied to fpp but our solids have started doing really very well. So in addition to sterile which are being supplied from site that is plant two which is not very significant but I did mention last time we have started sourcing from other sites also.
So that is better. We are also doing much better on the traded business at FPP and the solids that are being supplied to FTP from Indoco have also increased. So net net and we have also got some good orders in the front end. This has helped FPP do much better and I’m confident going forward it will do better. From you.
Kenil Mehta
Would like to know about our new introduction portfolios across our India business and when should we see our growth going about the market? IPM market.
Aditi Panandikar
Yeah, thank you, thank you for that question. As you know we have got a portfolio which is pretty much acute skewed and although at a doctor level we say it is sub chronic because we do get support from the mass specialty, we are still not with many of the super speciality doctors. And you know for the India business at Indoco our strategy has been very clear to go from acute to sub chronic, to go from GPS to mass specialty and to move from because Indoco is a company which gets more than 60% of its revenues from Tire 3 down, Tire 2 down.
So we have taken several measures strategically to improve performance in the metros. So as all of these build in you will see us doing better than the ipm. However, having said that, if you have been studying the IPM carefully you will see that this year the acute has been under lot of stress and for this quarter, the current quarter there has been some upside on respiratory but otherwise acute has been under a lot of stress and what has really grown is cardio and diabetes. So compared to the covered market we are not lagging too much.
In fact on a Mac basis for December we are at par or better than our covered market and it is only when you compare with IPM because then you have to look at the anti obesity products and all the other things that are going on. But your question about when can we beat market estimates. Like I just told you, for India our strategies revolve around generation of more prescriptions from the doctors and here we are very confident we are on the right track. So I feel sure that going forward we will able to do IPM levels or better.
Kenil Mehta
So so but the market is growing due to cardiac and diabetic but we have very less share if you compare. Yeah, we have C growth over last three years in that trend only. So any particular reason we are not focusing or are we?
Aditi Panandikar
It is a very cardio Diabeto is a very tough segment for and already has lot of competition. At Indoco we focus more on those therapies which allow us to have a higher prescriber base than a lot of prescription per doctor which is what a super speciality does. However, we are increasingly focused on consultant physicians, increasingly focused on pediatricians, gynecologists. In fact, Our Gynac prescriptions Gynaq business has grown by almost 15% this year on a yoy basis. Synergy, which is a division which is having an agenda towards metrocentricity and carries one of our big products, car one plus on a QoQ basis also has grown by 26.8%.
So these are some healthy signs. We do have some very good products in diabetology, but not the latest molecules. We have Glitchek, Glychek M and that is reasonably doing well. But we continue to focus more on the mass specialty.
Kenil Mehta
Understood? Understood. And ma’, am, we have seen the API being ramp up as over last few quarters going forward. As we ramp up the intended block 2 should we expect increasing gross profit margins across boards as we have seen over last three quarters from 68% to 73%.
Aditi Panandikar
So our largest. I’m sorry. Yeah. Did you. Were you saying something more?
Kenil Mehta
No. No.
Aditi Panandikar
Okay. So you know our largest site for APIs is the Patal Ganga site from where the finished APIs largely come out. We also have a small kilo manufacturing site where the top line is not very significant. We do manufacture some of our starting material at a very old site which supports the Pata Ganga site. In addition to that, the site at ORIC which is under the WRBL Warren Remedies has also started making KSM and starting material for our API products which are then which is then consumed at Pata Ganga. So this has helped us free more capacity at Pataganga for finished API and that is what is showing here going forward also we plan to continue to do this.
In addition to freeing capacity at Patar Ganga for finished API. I feel very confident that the finished API block at Auric site in Aurangabad which is part of the Warren Remedies group, which is now ready and is taking validation batches of products as soon as US FDA comes down and qualifies it, or EU comes down and qualifies it, we will be able to sell in those markets. And then we should see further improvement in margin. But as such we manage our API business very well. As you know, the API sales that you see is what we sell outside.
In addition to that about 40% of this additional to this is supplied internally to in house formulations at Indoco.
Kenil Mehta
Understood. So ma’, am, going forward should we expect API business also to touch the 200 crore?
Aditi Panandikar
Of course it is. It is at 200 crore if you consider what is internally transferred.
Kenil Mehta
Okay, understood. No, I was talking from the outside point of view. As we are ramping up from 20. 25 crore to 40. 45 crore.
Aditi Panandikar
Yeah. Next year I’m very confident. As I told you this year the ORIC site will concentrate more on validation and we will be restricted to what we can make at Patal Ganga. But I’m sure that in another eight to 10 months we will start getting higher revenues from ORIC site also. And then we can really ramp up our API.
Kenil Mehta
And ma’, am, should we expect some blockbuster drug launch approval for us as we have got few in the past and they are near expiring such as Apixaban that we are first to file along with two others.
Aditi Panandikar
There are several coming up for patent expiry or where, you know the date has been sort of where we have settled with innovators. And they are all in FPP’s portfolio for the next year. So we keep our fingers crossed and stay very positive for these to help us ramp up FPP sale in the next year.
Kenil Mehta
Understood. Thanks a lot. No questions. All the best.
operator
Thank you. The next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead.
Ankit Gupta
Thanks for the opportunity. Ma’, am, if you can tell us, you know how much were the European sales for the nine months and what is your anticipation for the full year? FY26.
Aditi Panandikar
Yeah. So Europe for nine months on for Q3 Europe has done around 49 crore. And I think 171 we have done as of now.
Pramod Ghorpade
167.
Aditi Panandikar
167 we have done on YTD basis.
Ankit Gupta
How much was it last year?
Aditi Panandikar
170 equivalent. It was. And however last year if you remember well we had major challenges due to the MMP execution because of which the fourth quarter for Europe was extremely poor this year. In fact like I mentioned earlier many of the issues with phase two of MMP which allowed our. We have got approvals from our customers to now manufacture at the higher batches and in the new sites are all coming in. We expect the fourth Quarter to be much better for Europe and net. Net. I would not like to give you a number at this stage but let us surprise you in a pleasant way.
Ankit Gupta
Sure. And ma’, am on, you know we were also very like. We’re also like for the coming few years we were pretty bullish on the European business and expected this to scale to a significant number. So if not for the coming quarter, FY27 if you can, you know let us know how, how much scale do we expect in the European business?
Aditi Panandikar
So there are as see it is these are the businesses which are based on generic and in addition to the base business which is set to grow at double digit, I’m very confident the new products which will also come in and which have much better market opportunity as well as margin and will be made in the. In the plants which have been now optimized. I’m not just looking at top line growth but we should look at Europe over the next few years as growing at 20% plus in revenues. But more importantly we should be watching the margins to improve on that business.
Ankit Gupta
So. So but let’s say do we aspire to reach like 400, 500 crore of revenue in Europe? Let’s say if not next year I think it will be challenging. But FY28 or 29 like should be below.
Aditi Panandikar
Yes, yes, we can expect that. We can.
Ankit Gupta
28 to 29.
Aditi Panandikar
Yeah.
operator
Okay. And on the warden Remedies if you can, you know, guide us how has been the performance for the quarter and nine months and next year how do you see the performance especially on the profitability in breakeven level.
Aditi Panandikar
Yeah. So Warren Remedies has grown by more than 43% this quarter and I think for YTD basis it is in 30s, 38%. This is largely due to the success we are seeing with our brand in the OTC and OTX segments. If you recall we had products like Sensorin, AKF which made a switch from pure RX to OTX first and then to otc. Then after we have products like Ketodent which are doing exceedingly well in the OTX segment. And as I mentioned this quarter we also Q3, that is we launched two new products directly into OTC.
One to add further into our sensitivity basket and the other to actually provide a superior toothpaste which is made in house in our RD and which can now feature in Frank OTC in the general toothpaste market of high end product. Looking at all this and the new launches that we have planned in the coming months, I feel Very confident that the toothpaste business and the oral care business in Warren Remedy will go from strength to strength coming to the API business. As I mentioned earlier, this year will be a year of as in the 26, 27 will be a year of consolidation for API.
Although there will be lot of validations of products done at this site which of course into course formulation team will trigger for international audit. We may not be able to supply to the reg market too much this year. So we are proposing or forecasting a muted top line for API in Warren Remedy. But I feel very confident for the subsidiary to do well overall.
Ankit Gupta
But should we expect break even next year at EBITDA level or given the API performance, it will be difficult.
Aditi Panandikar
So there are two challenges to breaking even. One of course is the investments in API and the OPEX and RMPM costs of the validation batches taken for API. But we should not forget that to extend expect a break even on an OTC business in the second year is very tough because we have now really started ramping up our spend on advertising. So which is why when it comes to. I said when it comes to European business, stay bullish on the margin. I would say when it comes to Warren remedies, let them breathe and grow sales.
Ankit Gupta
Thank you.
operator
Thank you. The next question is from the line of Malik Varia from BNK Securities. Please go ahead.
Maulik Varia
Hi ma’, am. Thank you for the opportunity. Just wanted to understand, we have seen a gross margin improvement of around 300bps sequentially. So what has driven this growth and how much sustainable is this going ahead?
Aditi Panandikar
Yeah. So you must have seen that both our subsidiaries have started doing better. These were both the fledgling businesses earlier and were giving a drain on the business. So that has improved. In addition to which cogs at even IRL level have improved. This shows a much better shift in the portfolio, much better shift in the quality of business that we are getting. Growth in prescription, jumping a rank in the prescription audit. All indicate that if the demand part of the business is better managed, it’s not always about top line. It’s also the quality of business.
And I think all of this is resulting in much better control and giving us a much better margin.
Maulik Varia
Okay, okay. Okay, thank you. And ma’, am, you were just mentioning to participant. So what are we expecting from the S2P portfolio in FY27 and how many product approvals are we expecting? Or maybe filing some indication or understanding about FPP for FY27? 28 would be helpful, ma’. Am.
Aditi Panandikar
Okay, 2728. So that’s a bit far. We have right now visibility for 26, 27 where there is expectation that at least five new products should be launched out of our own portfolio. They will come at various times in the year, so it will be difficult to quantify that, but they are extremely exciting. You must have heard of the lycosamide oral suspension which got double approved recently. We also have a couple of other products where we have an opportunity to be early and have received the player approval to ship product that is likely to also help us.
But I would be little cautious because you know, the moment I say something to you guys, you expect next month to do well. But US business is not like this. There is transfer of product first, then there are orders in the market, then you sell them. And you know very well what happens in us for the collection. So. But we are building a very strong business and I’m very happy to say that.
Maulik Varia
Okay, okay. And any. Any therapies where you would be able to guide these five new products which you. You were expecting FY27. Which therapies are these? Or any addressable market size?
Aditi Panandikar
Yeah, no market size, I will not comment. But therapies, I tell you broadly, we have always stuck to two or three therapies for our international market, especially us, we have participated in cardiology, diabetology and cns. Definitely because of allopurinol, which is such a big product in our basket. We also look at that therapy and anti gout. That is in addition to which, of course the ophthalmic product basket is great for us. Then in the traded products at fpp, we have got some interesting products even in the Onco segment.
Maulik Varia
Okay, okay. Okay. Shaman, thank you so much.
operator
Thank you. The next question is from the line of Pratik Khatari from Unique pms. Please go ahead.
Pratik Kothari
The two lines that we were allowed to restart in GOA for the us. Terrible. Does it contribute anything meaningfully or. I mean everything from there comes in after the whole plan gets approved.
Aditi Panandikar
Well, nothing meaningful yet, I’ll be very honest. In fact, we have started getting small amounts of sales from sterile, but it’s still largely from outsourced. But we have begun.
Pratik Kothari
I mean, until the audit happens. Can this become meaningful? That the two lines that we are allowed to do.
Aditi Panandikar
Yes, we have seen some upside in the. In the present quarter. I’m hoping we’ll be able to keep that run rate. If that happens, Q4, you will see some meaningful contribution.
Pratik Kothari
Correct. And then we. We did some sale and lease back again this quarter. Can you quantify what that amount was?
Aditi Panandikar
No, this was in the last quarter. The loss came this quarter.
Pratik Kothari
Losses from this quarter.
Aditi Panandikar
No, no.
Pratik Kothari
The exception items.
Pramod Ghorpade
No, no. There is a lease payment towards that. But the transaction happened in the last quarter in the month of August.
Pratik Kothari
What is the exceptional item you’re talking about? This loss amounting to 2 crore.
Aditi Panandikar
Might be a small note 7. No note 70. We look at it. Meanwhile let us check what you see.
Pratik Kothari
My second question was just on that. Did we do it again?
Pramod Ghorpade
Yeah. Say there is one exceptional item apart from that is about the provisions for.
Aditi Panandikar
The labor New labor code.
Pratik Kothari
Yeah, no that’s 7, 6. Yeah, that’s about 7 crores. 7B which is 2 crore loss on sale and lease back.
Aditi Panandikar
Yeah. So basically those are old transactions. Not the recent, not the recent one. We had done done these earlier about.
Pramod Ghorpade
15, 16 years back. That is the you know, transaction which is settled in this particular quarter.
Pratik Kothari
Okay, very much. Okay, thank. You.
operator
Thank you. The next question is from the line of Dhonil Desai from Total Country. Please go ahead.
Dhwanil Desai
Hi, good afternoon everyone. My first question is on India formulation business. You know I think last few quarters on the acute side have been in a way slightly challenging and we have been stuck in that range despite new product introduction, etc. So how should we look at this business from a slightly, let’s say two weird perspective because the acute nature of the business and product mix is not going to change, right?
Aditi Panandikar
Well it’s not going to change drastically. But yes, we are building more and more of the subchronic portfolio. We are also focusing on getting acute from mass specialists whose practice is not very seasonal. So typically if you go get anti infectives from a general practitioner it is much dependent on the footfall. But if you get an anti infective from a pediatrician that is not the thing this year somehow on anti infectives across the board also because of the AMR resistance issues and all those things and you know, I mean we have just had an SMSRC presentation a few days back post Covid.
Somehow the acute has not settled. We don’t know what is happening. But off late there is indications that things are back on a very, you know, kind of a path where you know you can ignore the COVID pre Covid post Covid years and now again things are beginning to settle. So I’m hoping that will bring back some predictability. This year for example the summer never really came, the rain was prolonged and winter is expected to be severe. So let us see all these things have different kind of, you know, ways of. We see it when we compare our prescription growth, we get an exact pulse of the secondary demand.
I’ll just give you an example. Our product Cyclopam last year which grew by 30% at primary prescriptions, had grown by 16%. Now this year it is 15% down in primary, but prescriptions continue to grow. So prescriptions for us are a real indication of the real consumption and that is not slowing down. Sometimes market sentiment, buying behavior, boys in the field cause these kind of blips in primary push or hold back and that is what results in quarter to quarter kind of a change. I feel going forward we must discuss India business more on a YTD or a Mac basis.
That is far more healthy.
Dhwanil Desai
Okay, so again, kind of putting it down more succinctly. So is it fair or realistic to assume that given whatever portfolio that we have and the seasonality of the nature of the acute business, is it fair that we can grow this business at 15%, let’s say over a longer horizon, maybe two, three years, is that a fair assumption or is that too much to ask given the maturity of our product?
Aditi Panandikar
So given that new introductions are 6% of our top line, while the mature products will continue to dominate in the shorter run, soon the new introductions will start playing up and making their presence felt. So I do feel confident for a double digit. I’m not so confident about the 15%. But there are, you know, even when it comes to our legacy products, many of them have, there is a lot of leverage we can achieve through reach. There are many geographies where we are skewed. So there is a lot to do. It is just not as easy in India to translate.
But we are working very hard on it. I am hoping some of this will show results and we will be able to surprise you.
Dhwanil Desai
Very helpful, ma’.
Maulik Varia
Am. On the US Side, I think you said that we have a very good product slate for next year given the filings that we have done and approvals that are in the pipeline. So, you know, but so how should we look at, let’s say, you know, from the resolution of the US FDA issue till the commercialization steps, the timeline capital on those opportunities and for that to happen, you know, around what timeline the US FDA has to get resolved for us to capitalize on those opportunities.
Aditi Panandikar
Okay, so thank you for that question because it also allows me to explain. Today we have two sites for formulations which make product for us. One is Goa Plant 1 and the other is Goa Plant 2. The site which is under US FDA Cloud for warning letter is only Goa Plant 2. Goa Plant 1 in fact is our solid oral site and many of the new launches are from the solid oral site as well. In addition, in order to support the challenges, we might have to supply products from Goa 2, we have beefed up supply at second sources.
So I expect that while we may not get full advantage if US FDA coming down gets delayed, unlike historically when business came to a complete halt, this time that will not happen. So in that manner, US FDA coming down and US revenues and that FPP going up may not be directly linked. I hope that answers your question.
Dhwanil Desai
Yeah, yeah, very clear. So I think, last question, I think € us also was, you know, 300 crore plus for us at some point in time and same was for Europe. So how do we see the trajectory of, you know, us going back to those kind of numbers in both this market? You know, what are the things which have to fall in place where you think are more confident or have more visibility? Some qualitative thoughts on that would be very helpful.
Aditi Panandikar
Yeah, I love it when you people ask qualitative questions. So thank you for that. So there is definite visibility on us getting back there. Just to quickly go back on your 300, 300 crore kind of numbers. The last time we did 300 crore in US almost 30 to 40 crore would have been revenues for milestone payments collected from Teva or you know, some kind of upfront coverage of RD costs. This time around when we do these sales, they are almost all coming from commercial sales. So you have to remember that number two, qualitatively, why we feel we should do it.
As I told you, the Goa1 site which supplies both to Europe and US but currently is making allopurinol and glimipiride, just two products for us, but is waiting for all all those product approvals and all those products on player to be transferred. That gives me confidence that going forward plant one will start contributing for solid orals for us. Plant two, while we continue to struggle with US FDA coming down and clearing us and restarting business in time. There is a lot of demand for the products that have been filed from plant 2 and already are in the market.
Having said that, yes, there is going to be challenge because competitors have had a field day when we could not supply. But we will be working very hard and especially with since we will have feet on ground with fpp, I feel confident we will be able to get there soon. Qualitatively the margins on this business is what I would focus more on as we have spent considerable amount of time, energy and money to bring all our plants to a level that when we get these numbers next we should be doing far better in margin than when we were doing it earlier.
I hope this answers your question.
Dhwanil Desai
Yeah, I’m on Europe.
Aditi Panandikar
Yeah, Europe. As I said we had our major buyer who also started with us incidentally in 2003 to whom we supply paracetamol for UK and some other the other products. They continue to keep one of their livery or label with a small site of ours which has lot of pending orders but we can’t deliver and we are trying to transfer it to the site which has undergone MMP and we can take much larger batches and we feel very confident this quarter all of that should end. So next year we’ll be able to start with a clean slate and have no constraints in supply.
So your a number being down is also a function of us not being able to supply that product.
Dhwanil Desai
Okay. Okay. Just one more question if I’m allowed it has time, is that okay? I’m okay. Okay. Okay. So. So I think you know we used to do that you know 18 kind of a margin and from whatever that you are seeing qualitatively the US business will have far higher margins and you know domestic business anyway are good margin businesses which will come, the growth will come back there. So in Europe also you said the margin should improve. So there is a visibility of going back to 18, 19% kind of a margin. You know, leave aside the timeline. Is that a fair assumption?
Aditi Panandikar
Of course it is. Why would we work otherwise? And I’ll just correct you on that. 1920, 1920 we did in a Covid year when we had no expenses on India. Otherwise we were having a fairly good run rate of 16, 17, sometimes 18%. I feel in the next couple of years we would be stabilizing at around 13, 14 and a couple of years after that we should be able to pitch for much better margin.
Dhwanil Desai
Very clear. Thank you and wish you all the best.
operator
Thank you. The next question is from the line of Rohit from Ithought pms. Please go ahead.
Rohit
Hello. Yeah, yeah man. Hi. I think a lot of questions have been answered just in terms of the balance sheet, ma’. Am. So like where are we right now and are we at peak debt and what is the thought process of coming down from here?
Aditi Panandikar
So our total debt right now sits at around 900 crores, 700 in the main business and 220 in WRPL. We have been paying back as and when things get due and we feel pretty confident to be able to do that. But yes, of course we would explore any and every possibility we can to reduce or lower the debt. On one part we are very careful about no further capital expenditure. We are controlling OPEX and I think going forward therefore there is a lot of work being done also on the inventory side and all of this I think should help us.
But anyway Pramod, would you like to add something?
Pramod Ghorpade
Yes. So this 920 odd number which includes short term as well as long term while long term is in a range of 590. And we have another repayment which is scheduled in this quarter for which is to the extent of 28. And we are very confident to generate you know, revenue or cash margins to fund the repayment as well as the interest component. So with that we’ll have you know at the end about close to about 550 or 555. That is the number for long term and then next two years we have seen significant amount of repayment at around about 135 to 140 per annum and we have worked out you know forecast estimates and we are very confident to generate that much, you know, cash internally as madam mentioned that is pure purely based on one is about the overall growth in various markets.
Second is about the, the efficiencies which you know will bring us another reduction in overall cost of operation and thirdly basically the reduced interest cost. These three components we are very confident to fund the repayment and interest. And as madam mentioned we don’t require much capex as such because we have invested in most of the businesses now including our R and D. So overall capex will go down substantially during next two to three years.
Rohit
And what would be the maintenance capex that we have for our business?
Aditi Panandikar
Around 3540 max per annum would be the maintenance capex required which will include certain energy saving projects also which we have planned which will further bring in you know, the cost reduction for the energy cost.
Rohit
Got it. That’s it from my side. Thank you and all the very best. Thanks. Thank you.
operator
Thank you. The next question is from the line of AP Raesh from Banyan Capital Advisors. Please go ahead.
VP Rajesh.
Hi, thanks for the opportunity. My question answered but just on the bed side. Given the retainment schedule that you outlined right now so by fiscal 27 could be assumed that your debt will be around let’s say 750 to 800 crore numbers.
Pramod Ghorpade
Yeah. So Mr. Rajesh, we could not hear you completely but if I understand your question, your Debt level for the next year. So currently we are at you know 7 590. That is the long term while you know, the short term. As you know, based on you know the overall business, short term may remain more or less same, but long term we have repayment plan. The repayment plan which I explained just now. So next year by this your question? I think for next year, 2728. Right.
VP Rajesh.
By the end of March 28th.
Aditi Panandikar
March 27th. Okay.
VP Rajesh.
Okay. So that is 2627, one year. Yeah.
Pramod Ghorpade
Okay. Yeah, sorry, sorry, go ahead.
VP Rajesh.
Yeah, so I was just trying to understand that since you will repay about 160 crores or so of debt between now and March 27, is it fair to assume that your overall debt, total debt, consolidated debt will go down from 920 crores to let’s say 775 or 800 crores.
Aditi Panandikar
Correct, correct.
VP Rajesh.
Okay. And. And in terms of the business this quarter, it sounded from your comments that it has been more of a supply issue because of us FDA and other reasons. So can you quantify what is the revenue that you had to let go because of that reason? Right. And you actually paid about eight years of penalties on that.
Aditi Panandikar
Okay, so I think there are two questions in here. One is about revenue and the other is about penalties. So on penalties etc and remediation, one time cost, we have around 8 to 9 crore on sale that might have not come in because of pushing forward due to customer approvals or validation regulatory. You know, it happens all the time. There was some last minute change in MHRA guidance and some labeling had to be corrected. All that is not very meaningful. But that is a continuous cycle. So if it spills, it comes into the next quarter.
VP Rajesh.
My understanding is you are getting, you are getting the produce, sorry products made.
Aditi Panandikar
Outside and that’s right, Correct, Correct. So there’s some margin that is being lost there. Then secondly, you know, you were talking about because of this us fda, there are certain products that commitments you had so against which you paid the penalty. Right, that’s right.
VP Rajesh.
These two things together to understand.
Aditi Panandikar
So they are for different. Yeah, yeah, they are different cases. The penalties are on historically unsupplied product. As you know, even for us to create second sites, it takes its own time. You have to register, you do tech transfer, you take batches, you do stability, then you file, then you get approved. So it’s a longer process which has now culminated. But historically there have been gaps in time span when we could not supply. I hope that answers your question. I think you were Also asking about margins. So safe to say that we are outsourcing from third parties which also have economies on scale on certain products and we feel confident to spread our product basket like that where we continue to have supply from some people and some products will be made in out.
VP Rajesh.
Right. So what was the margin loss because of that?
Aditi Panandikar
If you can quantify then there is no margin loss. But yes, there are one time costs associated with technology transfer but they are against product supply over a long period of time. So I think we can roughly Quantify that at 2030.
Aditi Panandikar
In that range on an annual basis.
Pramod Ghorpade
We would have spent around 20 cr. Yes, yes. So all the cost we might have incurred on doing this technology transfer would be close to 20cr. So that is an additional cost but it gives us a shorty of second line of supply and where we do not have to worry about penalties in future.
Pramod Ghorpade
Yes.
Aditi Panandikar
Does that answer your question?
VP Rajesh.
Yeah, I’m just going to rephrase to make sure I understood this. That 20 crore is what you have paid in the current financial year for the one time cost to transfer it to somebody else’s size. And on top of that in this quarter itself you have paid 9 crores.
Aditi Panandikar
That’s right. Right, right, correct.
VP Rajesh.
Okay. And do you have a number? What is the total cost of remediation and penalty for the nine months?
Pramod Ghorpade
So on a quarterly basis we used to have remediation in the range of 4 and a half to 5 crore. Now in, in the last quarter it is slightly reduced.
Aditi Panandikar
When we talk of remediation it is over and above all these product related costs. That is separate, that is for consultant charges. Et.
VP Rajesh.
Okay.
VP Rajesh.
Okay, right. So that’s what I was trying to understand.
Aditi Panandikar
Yeah, yeah, yeah I get your point. Yeah, yeah.
Aditi Panandikar
20 crores. Let’s say 4 and 48 and plus this 9, 17 plus 20. Roughly about 3540 crores in this financial year is sort of one time cost which would not have been there had you had your U.S. approval. Is that the right?
VP Rajesh.
Agreed, agreed. Yeah.
Aditi Panandikar
True, true.
VP Rajesh.
Okay, thank you. That’s all.
operator
Thank you. The next question is from the line of Madhav from Starstruck Capital. Please go ahead.
Unidentified Participant
Yeah. Good evening ma’. Am. Thanks for the opportunity.
Aditi Panandikar
Yeah, yeah, go ahead.
Unidentified Participant
On the OTC business, how much we. Made in this quarter? Madam,
Aditi Panandikar
I think this quarter we would have done. I know on YTD basis we have. Done 9434 crore this quarter.
Unidentified Participant
So on the OTC business assuming that the same problem is going to be continued. So I think what will be the.
operator
Next year assumption for the OTC business.
Unidentified Participant
I have not. Can you repeat that? I couldn’t hear you properly. Considering that the OTC now the. Every quarter we are making close to between around 30, 32 crores. We are making. Yeah. And I think 130 crores during the current financial year. And for the next financial year, what is the, you know, expectation for the next financial. For the otc?
Aditi Panandikar
You know, people in your brotherhood have told me I should not be giving forward looking projections. But safe to say that with the amount of energy we are putting in consumer marketing, in advertising, this number should go up safely by at least 30%.
Unidentified Participant
Yeah. Because we are good to see that we are giving some to brand extensions also. I think the business should go better in the next year as well.
Aditi Panandikar
Yes. Yes.
Unidentified Participant
Yeah. Okay.
Aditi Panandikar
Okay.
Unidentified Participant
Thank you, ma’. Am. Thank you. For me.
operator
Thank you. A reminder to all the participants. You may press star N1 to ask questions.
Aditi Panandikar
If there are no further questions.
operator
No, ma’. Am.
operator
Okay. Thank you. Thank you all for logging in today and thank you for the very interesting questions. Wish you a good week ahead. Thank you.
Aditi Panandikar
Thank you so much.
operator
Thank you. On behalf of Nirmalang Institutional Equities. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.