Innova Captab Ltd (NSE: INNOVACAP) Q3 2025 Earnings Call dated Feb. 06, 2025
Corporate Participants:
Ayush Kumar Garg — Head, Investor Relations
Vinay Lohariwala — Managing Director
Lokesh Bhasin — Chief Financial Officer
Analysts:
Sudarshan Padmanabhan — Analyst
Amey Chalke — Analyst
Karan Shah — Analyst
Akul Broachwala — Analyst
Hiten Boricha — Analyst
Abdulkader Puranwala — Analyst
Karthi Keyan — Analyst
Rohan Vora — Analyst
Naman Bhansali — Analyst
Neha Kharodia — Analyst
Aniket Nikumbh — Analyst
Raghav — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 and Nine Months FY ’25 Earnings Conference Call of Innova Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on-date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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 on your Touchstone 4. Please note that this conference is being recorded. I now hand the conference over to Mr Ayush Kumar Garg, Head, IR, Innova Captive Limited. Thank you, and over to you, sir.
Ayush Kumar Garg — Head, Investor Relations
Thank you. Thank you. Good morning, everyone, and thank you for joining us on our earnings call today to discuss the operational and financial performance for Q3 and nine months FY ’25. Joining us today on the call, we have Mr Vinay, Managing Director; Mr Lukesh Basin, Chief Financial Officer; and SGA, our Investor Relations Advisor. I hope everyone has had financial results and investor presentation, which has been uploaded on the stock exchanges and on the company’s website. Now, I would like to hand over the call to Mr for his opening remarks. Thank you and over to you, sir.
Vinay Lohariwala — Managing Director
Thank you, Ayush. Good morning, and thank you all for joining us on today’s earning call. We will be discussing our business performance for the Q3 and nine months of financial year ’24-’25. Before I get into the specifics of our business performance, I am thrilled to share a major milestone in our growth journey, the commencement of commercial production at our Katua Jammu facility effective from Makar 14 January 2025. This is a significant development as it enhanced both our production capacity and our ability to meet the dynamic needs of our customer. With this facility now operational, we expect it to further drive our growth trajectory in the years ahead. The Zamo
Operator
I’m sorry to interrupt you, sir. We are not able to hear you right now. Ladies and gentlemen, kindly stay connected while I try to moving to-high demand. Sorry, sir. This is the operator. Sir, can you repeat your last? We cannot hear. I couldn’t hear you. Thank you.
Vinay Lohariwala — Managing Director
While we already have a block at our existing Baddi facility and the one in Jammu is an expansion owing to-high demand. Pinam, pencylene and block are new products and doses form introduced by Yes. To elaborate with the new general block at Jammu, we are venturing into blawfield seal category of products such as LVP and dress. In general block, we also have the dry powder injectable facility. Client feedback has been very good and positive for us and we are already seeing a strong interest in these — for these new products. With the facility now up and running, we are proud to have a robust manufacturing footprint of five facilities comprising of nine independent production blocks. We are also set to benefit from the central government incentive scheme, which will further strengthen our financial position. Specifically, we are eligible for SGFC-linked incentive of 300% of investment made in the eligible plant and machinery available for up to 10 years from the start of commercial production. Additionally, we are eligible to receive a capital interest convention on loan based on investment in eligible plant reducing our interest cost by approximately 600 basis-points. Turning to our business performance, I am pleased to report healthy growth across key business area. Our overall top-line grew by 4.6% year-on-year to INR316 crores in Q3. Our CDMO, contact Research — contact Development and manufacturing organization business continued its growth trajectory and recorded INR172.2 crores of revenue in Q3 FY ’25. For nine months ended, the business generated cumulative revenue of INR505 crores. We sir, we service our 190 pharmaceutical companies, including some of the larger — largest player in the industry. With the introduction of new products and doses form, this business area is poised to continue its growth trajectory. Our domestic business continued to experience strong growth underpinned by our vast distribution network of 150,000 touch point into distributors, and pharmacies. In Q3 FY, we had revenue of INR58.6 crores, while for the first-nine months FY ’25, the revenue from the segment reached INR169 crores. With a portfolio of 600 products, we remain committed to expanding our presence in Tier-2 and town and cities, while leveraging our existing network to drive deeper market penetration. Our international business has been another key growth driver, registering an impressive 17% year-on-year growth, reaching 41.2 crores in Q3, cumulating to INR113 crores in Nine-Month FY ’25. We export over 25 — we export to our 25 countries and we are recently expanded our footprint into regulated markets like Canada and the UK, which we believe will drive future growth. Teron Biomedicine. Teron has a well-established international formulation and API business, both of which statistically align with Innova business value chain. Teron clocked INR44.5 crores of revenue, which was 6% — 6.5% below last year’s revenue. This was largely because certain orders have been deferred to our 4th-quarter. We are confident in the ongoing strategic initiative and leveraging on the benefits that occur with Innova Captive. Karon is well-positioned to drive strong performance in the year to come. With the successful launch of our facility and our focus on enhancing existing. We are confident in our ability to sustain strong growth. We are excited about our future prospects and remain committed to driving long-term and growth for our shareholders. We look-forward to continuing with you as execute on our strategic. Thank you. And with that, I will now hand over to our CFO, Mr to take you through the financial performance in more detail.
Lokesh Bhasin — Chief Financial Officer
Hi, are we audible?
Operator
Yes, sir, you’re audible now. Please continue.
Lokesh Bhasin — Chief Financial Officer
Thank you. Thank you, sir, and good morning, everyone. I will now take you through the financial highlights for Q3 and nine months FY ’25 Q3 FY ’25. Our consolidated revenue stood at INR316.5 crores, registering a year-on-year growth of almost 5%. Business mix was largely in-line with the trend this year so-far with CDMO business contributing 54% to the overall — overall top-line clocking INR172.2 crores. Domestic generic business was at 19%, that is INR58.6 crores. International generic business stood at 13%, recording INR41.2 crores and Sharon contributing 14% overall revenue from operations with INR44.5 crores revenue in absolute terms. We witnessed decent improvement in our profitability with the overall EBITDA margin improving by 8.5% to INR50.9 crores. EBITDA margins improved by 60 basis-points to 16.1%. Profit-after-tax witnessed year-on-year improvement of 36.3%, reaching to INR34.2 crores. PAT margins also improved to 10.8% versus 8.6 in-quarter three FY ’24, mainly led by better EBITDA margins and reduction in interest cost coming to nine months FY ’25, overall revenue for nine months FY ’25 stood at INR928.9 crores with year-on-year growth of 19.5%. Business disburse 55% from CTMO business, 80% from, 20% from 15% from Sharon. In absolute terms, business area-wise revenue for nine months FY ’25 were as follows: CDMO INR505.1 crores, domestic generic business INR169 crores, international branded generics at INR113 crores and Sharon at INR141.9 crores. With this, we would like to conclude the presentation and open the floor for question-and-answers. Thank you very much.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin with the question-and-answer session. Anyone who wishes to ask questions may press star and one on the touchtone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may please press star and one to ask questions the first question is from the line of Sudarshan Padmanabhan from JM Financial PMS. Please go-ahead.
Sudarshan Padmanabhan
Yeah, thank you for taking my question. Sir, my first question is a little bit more on the operational side. You talked about some spillage happening on Sharon. If you can quantify it? And does it also explain a drop I mean, we’ve seen about, 130 bps, 120 bps drop-in your gross margin. My understanding would be Sharon has higher margins. So that would also explain the Q-on-Q drop-in margin. I have another question if I’ll come back.
Lokesh Bhasin
Yes. So the — there are slightly reduced — reduction of share on revenue in-quarter three, which was mainly due to sustain orders filling over to quarter-four. It was around crores as we estimated. And we are very much of this in-quarter four. And talking about gross margin, the gross margin is slightly higher, mainly, yes, one of the reasons contributing factor was that Sharon, which is having a slightly better gross margin contributing to a lower revenue contribution. And at the same time, other business also, there was a certain product mix change, which contributed a slightly higher gross margin. Sure, sir. And coming to the price reduction in the play in this quarter as CDMO is more of a pass-through pricing model, which has also slightly contributed to the higher gross margin in percentage of play.
Sudarshan Padmanabhan
Sure, sir. Sir, my second question is a little bit more strategic in nature now that your demoted capacity has come in. I mean, just to understand from the demand perspective, ramp-up perspective and also given that the product is slightly more complicated and a little bit more differentiated from what we’ve been doing. So I mean, do we have the — the technology and the manufacturing everything in-place. So how do you see the ramp-up, say, in the near-term as well as the Jammu facility utilization, say, over the next two to three years.
Vinay Lohariwala
Hi,. This might be nice. So we have the four block in the Jammu and three blocks is our new to our basket. We have already developed almost 30 plus products in our R&D and that will be rolled to the production floor. We have started doing the process validation and generation of the data. And from the, we already have the established product and that has been transferred to the Jamu facility. So we are discussing with all our customers and clients and we are getting a very positive feedback from there. And as the — it is backed by the GST incentive, so we are very hopeful that the will be very-high at a very-high. And as we already communicated that we will be able to achieve a revenue of INR400 crores to INR500 crores next year.
Sudarshan Padmanabhan
I’m sure. And we will start seeing some revenues in the 4th-quarter as well, right?
Vinay Lohariwala
Yeah. So 4th-quarter, there will be some revenue as we already commenced the production on 14th January.
Operator
So this is I’m sorry to interrupt, sir. We are unable to hear you right now.
Vinay Lohariwala
Yeah. So is it now clear?
Operator
Yes, sir. Sir, can you repeat? Your last line?
Vinay Lohariwala
Yeah. So we are saying that as we have already commenced the production on 14th January, so we definitely will have some revenue in this quarter as well.
Sudarshan Padmanabhan
Sir, one final question before I join back the queue is if my understanding is right, Sharon has got better margins, so that you have a benefit from move. So from the current margins, if I’m not looking at necessarily the 4th-quarter or the first-quarter of next year, say FY ’70, I mean 2027, FY ’28 where the capacity gets fully utilized. Where do we see the return ratios and margins of the overall company?
Vinay Lohariwala
Yeah. So margin profile is already factoring our balance sheet. From prospective, if you see, so the — like not the first year, but down the line, say FY ’27 or FY ’28, the overall margin should improve.
Sudarshan Padmanabhan
It should be probably in mid-teens or high-teens. I mean, would that be a right understanding, sir?
Vinay Lohariwala
Please not able to listen.
Sudarshan Padmanabhan
Somewhere between mid to-high teens should be something that we should be looking at moving from
Vinay Lohariwala
Say this 100 basis-point or 200 basis-point, it will be difficult for us to comment now. So as we progress, say, down the line one year, then only we can be — the picture will be more clear.
Sudarshan Padmanabhan
Sure. Thanks a lot, sir. I’ll join. Yeah.
Operator
Thank you. Participants who wishes to ask questions may please press star and one now we’ll take the next question from the line of Amit Sarke from JM Financial. Please go-ahead.
Amey Chalke
Yeah, thank you so much for taking my question. I have first question on the CDMO side. Is it possible to give some color how has been the pricing trend now as we seeing any revision in the prices in the contract or is it fully at the level that is what
Vinay Lohariwala
Amit, can you please repeat your question?
Operator
Amit, please use your handset to ask your question?.
Amey Chalke
Yeah, I was asking on the CDMO side, is it possible to give some color on the pricing trend? Are we seeing any uptick or revision in the prices of this quarter or is it still at the similar level what it was in the last quarter?
Vinay Lohariwala
Am I pricing of the API, if we see is more or less in a stable reason — a stable reason. But if we compare, say, year-on-year basis, so slightly we can say it is on a lower side.
Amey Chalke
Okay. So on year-on-year basis, it will be still negative and impacting our CDMO business this year.
Vinay Lohariwala
Yeah, on a year-on-year basis. But if Q-end Q basis we see more or less stable.
Amey Chalke
Okay. And second question I have is on the jumbo side. So we said when INR400 crore, INR500 crore revenues would come in next year. How much would be from the — by some — by shifting our production from existing to and how much would be the new contract basically?
Vinay Lohariwala
Yeah. So this INR400 crore INR500 crores what we are discussing is the incremental revenue. So we are already factoring that the shifting of the product. So that is only one block. And there we have a capacity constraint. So say if we are transferring our domestic business to the Jammu facility, so that will be fulfilled with the ROW business. So we are counting that only the incremental turnover of INR400 crore to INR500 crores.
Amey Chalke
Okay. So you mean to say the actual revenue-generating from the would be higher than INR400 crore during that year.
Vinay Lohariwala
So slightly higher, means it will be like INR50 crore INR60 crore business will be transferred.
Amey Chalke
Okay.
Vinay Lohariwala
You can say like the will be like INR450 to INR550.
Amey Chalke
Okay. And initially, this INR400 crores INR500 crores would come in from which formulation particularly like is it would it be only tablets and capsule or any other line which over
Vinay Lohariwala
Block at all four category of the product where there we have like dry powder injections, capsules, then vegetables, large-volume waterfall injection, general dry powder injections. So in revenue, everyone needs to contribute, then only we can reach to the INR500 crore mark.
Amey Chalke
Okay. But all these lines, do we need a validation and filing of these products, will that take some bit of time or is it already factored in our numbers?
Vinay Lohariwala
Yes. That is already factor-in. We have doing that all the studies and all that from the last, say, August or September.
Amey Chalke
Got it. Got it.
Vinay Lohariwala
Yeah.
Amey Chalke
So you would be having fair bit of idea like who would be the customers and how the revenue will ramp-up basically next?
Vinay Lohariwala
Yes, yes, yes, yes. So our BD team is working hard to onboarding the customer and the number is worked upon all the commitment and internal workings.
Amey Chalke
Sure. And the third question I have on the trade generic side. Is there any seasonality which we should keep in mind while factoring numbers quarterly basis?
Vinay Lohariwala
So in trade generic business, there are two factors. One is the seasonality. So if we see the trend from the seasonality point-of-view, generally Q2 or Q3, sometimes Q2 top or sometimes Q3 top means the September or October are the top months. So sometimes it’s like the consumer demand sector like Diwali is the top, like is due to the worst season is like from the health point-of-view is the September, October. So sometimes number-one, Q3 though.
Amey Chalke
Okay. Okay. But as such, there is no a issue as such in the segment, it’s just the impact of, let’s say, the quarter two was higher this year. So that’s why the quarter two saw some lower-growth basics.
Vinay Lohariwala
Yeah. But the segment is well having the well growing at a very healthy pace rate. Overall sector is growing at a very — at a very healthy rate. So if we see our nine months, we have registered 18% growth and this quarter we have registered a 13% growth. So as I explained, sometimes Q2 top, sometimes Q3 top, about it.
Amey Chalke
Got it.
Vinay Lohariwala
So overall, if we see the nine months performance, then we have grown by 18%.
Amey Chalke
All right. Sure, sir. Thank you so much, sir. I will join the queue. Thank you.
Vinay Lohariwala
Thank you.
Operator
Thank you. If you wish to ask a question, you may please press star and one on your touchstone phone. We’ll take the next question from the line of Karan Shah from GC Holdings. Please go-ahead.
Karan Shah
Thank you for the opportunity. Sir, one question on Sharon. How do we see the growth going-forward from this line-of-business because
Lokesh Bhasin
You are not audible.
Karan Shah
Am I audible now?
Operator
Yes.
Karan Shah
Yeah. Could you highlight how do we see the growth from the Sharon business in the coming years? And will it be at the company-level or shall it be a tad bit lower than the company-level growth for the Sharon business.
Lokesh Bhasin
Yeah. So Sharon business is going at a decent pace and we had been working on multiple fronts at R&D, RA, international beauty team and we expect it to grow in early teens in coming years.
Karan Shah
And how do we see the margin profile from this business?
Lokesh Bhasin
Margin profile would remain stable at where it is as of now.
Karan Shah
Okay. Okay. And one question on Jammu. Sorry if I would have missed it earlier. For a sustainable — at a sustainable level, can we see a 17% to 18% margin level from the Jammu plant?
Lokesh Bhasin
See, as we already shared earlier, so at a long-term perspective, yes, we are looking to accrue certain benefits coming out-of-the GST benefit, which is going to add-up our normal gross margins. So we will still working on it. And the coming years, we are very much for sure that, yes, our stabilized EBITDA margins is going to be slightly higher than our baseline margins.
Karan Shah
Okay. And last question on the qualitative front. How are we seeing the customer traction at the Jammu plant?
Vinay Lohariwala
Yeah. So the customer audit and facility visit is already getting a very good attraction for the facility. It’s a state-of-art facility well-designed and it is having all the say imported — a lot of imported equipment. So that fulfill the current need or it is a — well compliance facility.
Karan Shah
Okay. That’s it from my side. Thank you.
Operator
Thank you. The next question is from the line of Akul Brochawala from Avendus Investment Managers. Please go-ahead.
Akul Broachwala
Yeah. Thanks for the opportunity. So sir, talking about the ramp-up at Jamu. So just wanted a qualitative sense as to the incremental revenues that you’re enthusaging. What’s the profile? I mean, is it that you are expecting a large part of this to come from existing customers or are there new customers as well who are looking into these new blocks.
Vinay Lohariwala
So most of the revenue will come from the existing customer. So we cover a large percentage of the top Indian domestic players, right? So as the 80-20 rules, the 80% business lies with the top players. So we are hopeful that the customer is already on-board. So for Jammu, we are trying to increase our wallet share.
Akul Broachwala
Okay. Understood. And secondly on the kind of delay that has happened because of schedule M implementation for the lower basket of below INR500 crores. So do you expect any sort of tailwind that you were emphasizing this year or you were not kind of building anything from that implementation of policy?
Vinay Lohariwala
Can you repeat the question?
Akul Broachwala
So my question was on-schedule and implementation. So this year the government has kind of postponed a implementation of schedule M for companies with, you know, the pharma companies below INR500 crores. So just wanted your sense on as to how we are looking at this move by the government and were you sort of building any sort of business from that particular policy move this year in the coming calendar year?
Vinay Lohariwala
No, no. We are not build any data-based on the schedule our facilities are well compliant to the domestic regulation as well as the international regulation. And this being a new facility, it is say when we do any new facility, we see the future, say, 20 to 30 years ahead. So the facility should last for the next 40, 50 years. So that is the reason behind doing any new project.
Akul Broachwala
Okay. Understood. And last question is client.
Vinay Lohariwala
Yeah. And we have our own strength rather than speculating on the government implementation of the and all that. We have our own strength. Our customers are generally the large domestic player and we have a healthy relationship with them. And based on that, we attract the.
Akul Broachwala
Understood. And last question is on the CDMO revenues. So is there any element of service income or R&D income in the CDMO revenues that you have? Just wanted a clarity on that.
Vinay Lohariwala
So yes, we have, but that is very less, only few percentage points.
Akul Broachwala
Okay. Got it. Thanks. That’s it from my side.
Operator
Thank you. We’ll take the next question from the line of Hitin Boricha from Sequent Investments. Please go-ahead.
Hiten Boricha
Yeah, good morning, sir. Sir, my question is on the Jammu facility. You mentioned we have recently started facility. So assuming this facility will be operating at lower utilization in Q4, but the operating cost will come in the Q4 itself. So will this led to a margin decline in Q4? Is my understanding correct?
Vinay Lohariwala
So, we have just commercialized our facility January to — this January ’25 and we are working continuously with our BD team and operation team to mitigate any headwind that may accrue. So we are still working to mitigate any EBITDA headwind on that part.
Hiten Boricha
Yeah, okay. Okay, sir. But eventually the cost should come in Q4, right? That’s what I’m trying to understand. So just let me read sorry. Yeah, so it will impact our margin, right, sir?
Vinay Lohariwala
So see, it’s the start of the project, we are in the stage. Yes, there are certain variable — semi-variable and fixed-cost. So we are working to maximize our sales to mitigate that EBITDA hit or EBITDA cost, which may come to our EBITDA. So by increasing our — by try to maximize our top-line and gross margin within this quarter itself, we are working hard to mitigate any cost that may hit our EBITDA.
Hiten Boricha
Understood. Understood. And sir, my next question is on the. You mentioned there was some decline in revenue and order has been delayed to Q4. So what exactly is the reason for this, if you can elaborate more on this?
Vinay Lohariwala
So like few international customer have the December closing and they have deferred the delivery to the Q4. So we are hopeful that the Q3 hit will be covered in the Q4.
Hiten Boricha
Thank you. Understood, sir, understood. Thank you for clarification, sir. Thank you.
Operator
Thank you. The next question is from the line of Abdul Kadhar Pouranwala from ICICI Securities. Please go-ahead.
Abdulkader Puranwala
Hi, sir. Thank you for the opportunity. So first on the CDMO growth. So I understand in your opening remarks, you talked about some bit of a pressure on API pricing, but would also want to know if the growth slowdown in this quarter, was that also because you’ve already started shifting some product from Baddi to Jammu?
Vinay Lohariwala
Apul, just to clarify, we started our Jammu facility in January itself. So these results was of till 31st December. So there was no impact of any shifting and we have not had shifted until 31st December itself and the numbers does not represent any shifting of revenue from our budget to.
Abdulkader Puranwala
Okay. Okay. And secondly on the if from previous participant was asking. So would it be possible for you to quantify what was the quantum of the order, which has moved from Q3 to Q4 or
Lokesh Bhasin
You’re talking about sharehold?
Abdulkader Puranwala
Yeah,.
Lokesh Bhasin
So the tentative number is somewhere around INR4 crore to INR5 crores.
Abdulkader Puranwala
Okay. So roughly one question. And sir, even just for next year, I don’t understand there will be some cost which you are trying to mitigate from the general. So I mean, I know what could be the sustainable margins — EBITDA margins of your business if we have to look from a two to three years perspective, and should this be between 15% to 16% or it can be slightly higher than that?
Lokesh Bhasin
So a build as our current — the margins are — our blended margins at consol levels are within the range of 15.5% to 16%. So in the long-run, we are very much positive that we are going to get a slightly more benefit out of it as Jammu is ramping-up and other business also contributing to this. So yes, it is going to be slightly higher. And within the — within next coming period, as and when this Jamu will get more mature and more stablished, we should be able to get a more quantifiable number around it.
Abdulkader Puranwala
Okay. Got it. Thank you and wish you all the best. Thank you.
Lokesh Bhasin
Thank you,.
Operator
Thank you. We’ll take the next question from the line of Karti from Suyash Advisors. Please go-ahead.
Karthi Keyan
Yeah, good morning. Just one question on the Jammu facility. What would be the peak headcount at the Jammu facility? And can you talk about the challenges you’re facing in terms of hiring there?
Lokesh Bhasin
You’re talking about the headcount at Jammu facility?
Karthi Keyan
Exactly.
Lokesh Bhasin
So as of now, our existing Jammu facility headcount is somewhere in the range of 500 to 600 plus certain apprentices also. And as and when it is going to ramp-up, the headcount is bound to increase. So the recruitment, we had already been working proactively on the recruitment of our manpower right from our starting at helper level till our senior management at plant-level. So the crucial and the sensory position has already been filled up around one year or even two years back. If I talk about plant had — we are having plant had around two years back-in our — we have already hired them when the plant was in-construction stage. The other sensory positions like QA, QC, other regulatory affairs that has already been filled up and we had been doing this recruitment drive-through each and every model that’s word-of-mouth, my walk-ins across the country, my references and other portals also. Right. And what would be we have — we have been to as far as to get a good workforce and an experience force in pharma, we had done some walk-ins there also.
Karthi Keyan
Interesting. And what would be the peak headcount according to you?
Lokesh Bhasin
The peak headcount at the optimum level should be in the range of, say, 1,200 to 1,300 employees.
Karthi Keyan
Right. And if you have it readily, what would be the current split of locals versus non-locals
Lokesh Bhasin
That I have to check from, we can come back on that.
Karthi Keyan
Fair enough, sir. Sir. Thanks for clarifying, sir. Thank you.
Lokesh Bhasin
Thank you.
Operator
Thank you. The next question is from the line of Rohan Mora from Envision Capital. Please go-ahead.
Rohan Vora
You hello, sir. Thank you for the opportunity. So sir, the first question was, as I understand in three blocks for Jammu facility, we are going to — we are going to manufacture new products. So are these products a product which our clients are manufacturing in-house and we will win those orders or are we winning those from our competitors? So I mean, increasing market-share. So which one would it be? That was my first question. Second question was with INR400 crores-odd additional revenue coming in from. So do we see ourselves growing at 25% plus in the next year? That was second question. And third was on the CDMO business, a Y-o-Y growth was in low-single digits. So in addition to the API price erosion, was there any other reason to that? Thank you.
Lokesh Bhasin
So your first question was that whether the new three blocks that we are going to get, whether the revenue is coming from the in-house shifts of our clients or is it going to be addition of new products? Was that the?
Rohan Vora
Yes, sir. So is it in-house shift from our clients or are we winning from our competitors, those products?
Vinay Lohariwala
So as the three new blocks are the new to our product basket, product portfolio. So definitely the business will be the new to us. So that will be, say, the principle that the first-line companies that already doing the market and that will be transferred to us from the other side or maybe from their in-house?
Rohan Vora
Okay, okay. So it is possible that we might be winning market-share or it is possible that it is the in-house products that are getting transferred?
Vinay Lohariwala
Yeah, yeah. Both mix or both.
Rohan Vora
Got it, got it.
Vinay Lohariwala
And your second question was around Jammu remain — revenue over coming year?
Rohan Vora
Yes. So we said that we’ll be doing around INR400 crores. So are we on-track to do 25% plus growth in the next year?
Vinay Lohariwala
Yeah, of course.
Rohan Vora
And just a ballpark number on consolidated revenue growth, if you can for FY ’26..
Lokesh Bhasin
So we will still — we will try to refrain from giving guidance on the overall numbers as of now, but in the coming period, we will surely be able to comment on that.
Rohan Vora
Okay, okay. And the third one was, is there anything in addition to price erosion to the single-digit growth in CDMO business?
Lokesh Bhasin
So if you talk about CDMO business, see the CDMO is just a business segment, whereas our main core strength is our manufacturing capabilities. So our manufacturing capabilities basically drives and pushes our — all our business segments, whether it’s our CDMO domestic generic business and international generic business. So if you see in overall perspective, our each and every segment is growing at a healthy pace. And even from a manufacturing capability point-of-view, our volumes has also increased from year-on-year basis. And if I talk about a very ballpark figure, it should be in the early teens itself. So yes, after considering the pricing impact, it is showing a year-on-year increase of around 7% to 8% at a standalone revenue level, but volumes had been better on that part also.
Rohan Vora
So you said mid-teens.
Lokesh Bhasin
Yeah, early teens. I would say early teens.
Rohan Vora
Early teens. Okay. Okay, got it. Thank you, sir. Thank you for the clarification.
Lokesh Bhasin
Thank you.
Operator
Thank you. We’ll take the next question from the line of Naman Bansali from Nine Rivers Capital. Please go-ahead.
Naman Bhansali
Yes, sir. Thank you for the opportunity. First question is more on the industry side, wherein last quarter the largest player in our segment alluded to some kind of slowdown in the industry led by slower ordering from the pharma company as well as slowdown in the volume growth for the IPM in India. So what are your views on this and how are the trends shaping up in terms of growth for the CDMO side?
Vinay Lohariwala
Good. So if you see, sir, there are the two thought of one is that the overall market increase from the IPM point-of-view and the other one is that from the CDMO perspective, right? From the overall IPM perspective, yes, you are correct that the volume growth is like 4%, 3%, right? And there are the generics also that is not counted in the IPM. So that business is not covered by the IPM. And then we — from our perspective, you see, so we are largely working in the area of CDMO. So there the growth comes not only from the IPM growth, but from the product shift also. The product shift maybe from site-to-site or from in-house to site. So that’s why if you see that from the past also, so we have delivered like the CAGR of 20% plus. So mostly because of the expansion, additional facility, additional product-line. So if you see that in Jammu also, we have expanded ourselves in the three new category of the product. So there currently our business is zero. So most of the business will be come from the — not from the IPM growth, but from the existing sites.
Naman Bhansali
Got it, got it. And second question, as you talked about Genix, so there was a news article wherein it was talked that Genrix is being accepted by certain other countries globally in the more of a non-regulated side. So does that open up a next level growth opportunity for us going-forward?
Vinay Lohariwala
So let’s be clear that other than innovator, everything is big, right? So from that perspective, the business in the ROW and the other market is already — is being covered by the of the —
Naman Bhansali
Sir, I’m talking about the trade generic side wherein a lot of unregulated countries are talking about adopting the Jan model, which is in India. So in those sense, are we catering to those opportunities?
Vinay Lohariwala
No. Currently, it will be difficult for us to comment on this point because as when the opportunity comes, then only we can envis us on this front.
Naman Bhansali
Got it. Thank you.
Operator
Thank you. And the next question is from the line of Neha Karodia from. Please go-ahead.
Neha Kharodia
Yeah, hi. Thanks for the opportunity. My question was regarding the Jammu facility. So we are talking about INR400 to 500 revenue for FY ’26 from the same. So just wanted to ask regarding the margins for the facility, whether with the mitigation efforts it can be in the early double-digit or high-single-digit or will it only be breakeven for us?
Vinay Lohariwala
So Miha, if you see that our margin are in the range of, say, 15% to 16%. So once we will do the full-year at a level of INR400 crores to INR500 crores. So the margin profile should be in-line with our existing base business.
Neha Kharodia
Understood. And for the facility, do we expect peak utilization in FY ’28
Vinay Lohariwala
’28 and still we have the headroom for growth in FY ’29 and FY ’30 also. So say, yeah, most of the growth will be covered up to FY ’28, say, 80%, 70% and then it will grow like the 10%, 12% type of growth further to FY ’29, FY ’30. How we see from the manufacturing facility perspective, whenever we put a new facility, so say initial year, we have a large of 30%, 35% capacity utilization, then in the year two, year three, we reach to say, 50%, 55%. And after that if I say in some 9%, 70%. So that is the peak utilization.
Neha Kharodia
Yeah. I’m sorry, I missed your last line because of some disturbance in the line. Can you please repeat the last-time?
Vinay Lohariwala
Yeah. So the first year is like 35% 30%, 35%, then it increased to 45%, 50%, 55% right and after that three, four years, then the growth rate will be like 10%.
Neha Kharodia
Understood. The peak utilization would be somewhere around 80% to 90%
Vinay Lohariwala
And 70%.
Neha Kharodia
70% yeah.
Vinay Lohariwala
Because throughout the year, there may be some months where we get the utilization as 85% 90% or there may be some few months where the utilization will be like 50% 55%. So that’s why we factor-in that all seasonality to our numbers when the peak utilization we estimated 70%, 75%.
Neha Kharodia
Understood. And at that level, the revenue that we can do would be probably about INR1,200 crore to INR1,300 crore or do we have a potential to have higher revenue maybe with the product mix or
Vinay Lohariwala
So our estimate is that the peak utilization is like INR2,000 crore somewhere. So 70% is like INR1,500 crore, INR600 crores. And in two, three, two or three years’ time that start with the INR400 crore, INR500 crores, we can reach to the INR1,000 crores mark in the facility.
Neha Kharodia
Understood. Great. Thank you. Yeah.
Operator
Thank you. The next question is from the line of Aniket Nikum from ABN Capital. Please go-ahead.
Aniket Nikumbh
Hello.
Operator
Yes, sir. Audible, sir.
Aniket Nikumbh
Yes. Thanks for the opportunity. Sir, I have two questions. The first question was a little bit covered by an earlier participant. Just on the schedule and delayed implementation for MSMEs, can you comment a little bit on what are you seeing on-the-ground? Do you think a lot of the industry can transition to compliance or will they lose share? What’s the — what’s the feeling you get when you are chatting to customers?
Vinay Lohariwala
Yeah. So if you see from the regulatory perspective, so in India also, if you see the — all the segment, everywhere there is a tightening of the regulatory framework. And as we proceed with the timeline, it happens in all the segments. So similarly, in our pharmaceutical also, there is a continuous tightening of the norms and that is at par with the international norm. So our also it is at par with all international regulation and I want to comment that our facility like or Baddi and Dehrabun facilities, we are having the say in Dehradun, we are having the UZMP but we also we have the UZMP. So our facility — facilities are well-designed and complying to the international certification also. So from the market perspective, yes, there are some headwind the schedule. So let’s see that how it proceeds. The government has relaxed one year from MSME point-of-view, that is good that the — that they have relaxed for the one year.
Aniket Nikumbh
Got it, sir. But do you think it’s practical for some of these sort of smaller units to get to the right manufacturing standard or will it be too expensive for them? Just trying to get an industry perspective is it even possible for them to do that transition?
Vinay Lohariwala
Okay. So from our side, it is difficult to comment on these questions there.
Aniket Nikumbh
Okay, sir. That’s fair. My second question was a little bit on the bookkeeping side, sir. Just wanted to get a little bit of guidance or some pointer on how do we expect the depreciation to move now that obviously, we’ve done a fair bit of capex. So what do you think will be the depreciation for next year?
Lokesh Bhasin
So yes, we are still working on the final workings but what we estimate that our annual depreciation from Jammu plant should be in the range of INR20 crore INR25 crores per annum.
Aniket Nikumbh
Okay, sir. Thank you and all the best. Thank you.
Operator
Thank you. The next question is from the line of Raghar from JM Financial. Please go-ahead.
Raghav
Hello. Hi, am I audible?
Operator
Yes. Please.
Raghav
Hi. So just one clarification. Did I hear correctly that for CDMO segment this quarter, the volume growth was in early teens.
Vinay Lohariwala
So the early teen growth has been for nine months year-on-year margin.
Raghav
Okay. So can we assume that even for 4Q in FY ’25, it would sort of be similar sort of volume growth.
Vinay Lohariwala
Sorry, can you please repeat your question?
Raghav
I was asking in 4Q, do we assume that volume growth would be at a similar level? Or can it be higher? Because I think the base quarter in FY ’24, we were impacted by the pricing decline for APIs. So just want to get a sense of how 4Q will pan-out.
Vinay Lohariwala
So as I already covered that if you see Q-on-Q, then the prices are stable from our perspective. And year-on-year, there is a bit decline in the prices. So from here onward, we see a stable price regime. So there may be few price decrease and few price increases. So overall is now there is a stable price.
Raghav
Okay. Yeah. Thank you for the clarification.
Vinay Lohariwala
Basically from the two prospectors that one is the existing volume growth, other is from the angle.
Raghav
Okay, understood. And just one quick question on Jammu. How do we see the 4Q revenue panning out for this year hello.
Lokesh Bhasin
Ragar, we are still working with our — on the order book and the BD team, but at a high-level, we estimate that quarter-four Jammu revenue should be in the range of INR20 crores to INR40 crores.
Raghav
Okay, understood. Thank you so much.
Operator
Thank you. Ladies and gentlemen, due to time constraint, that was the last question for today. I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Vinay Lohariwala
Thank you everyone for joining us on the earning call. We are pleased with our progress this quarter and nine months FY ’25. The successful commencement of our Jammu facility marks a significant milestone in our growth journey, complementing our growth — ongoing business performance with growth drivers already in-place across our existing business area, we remain confident in our ability to deliver continued growth over the years to come. We look-forward to build-on these success as we move into the final quarter of FY ’25 and beyond. Thank you for your continued support.
Lokesh Bhasin
Thank you very much.
Operator
Thank you very much, sir. Thank you, members of the management. Ladies and gentlemen, on behalf of Innova Limited, that concludes this conference. We thank you for joining us and you may now disconnect your lines. Thank you. Thank you.