Laurus Labs Limited (NSE: LAURUSLABS) Q3 2025 Earnings Call dated Jan. 24, 2025
Corporate Participants:
Satyanarayana Chava — Executive Director & Chief Executive Officer
V. V. Ravi Kumar — Executive Director & Chief Financial Officer
Analysts:
Nitin Agarwal — Analyst
Sajal Kapoor — Analyst
Tushar Manudhane — Analyst
Krish Mehta — Analyst
Bharat — Analyst
Chirag Shah — Analyst
Jeevan Patwa — Analyst
Madhav — Analyst
Deepak Malik — Analyst
Venkat — Analyst
Mayur — Analyst
Ankur Bhadekar — Analyst
Dheeraj Kumar — Analyst
Malhar Sanghavi — Analyst
Vivek Agrawal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Lauris Lab Limited Q3 FY ’25 Earnings Conference Call hosted by DAM Capital Advisors 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 assessments during the conference call, please signal an operator by pressing the star then zero on your touchstone phone. I now hand the conference over to Mr Nitin Agarwal from DAM Capital Advisors Limited. Thank you, and over to you, sir.
Nitin Agarwal — Analyst
Thanks, Steve. Hi, good afternoon, everyone, and very warm welcome to Lab’s Q3 F ’25 earnings call hosted by DAM Capital Advisors Limited. On the call today, we have representing Lab management are Dr Satina Ranchawa, Founder and CFCO; Mr V.V. Ravi Kumar, Executive Director and CFO; and Mr Vivek Kumar, EVP, Investor Relations. I will hand over the call to the management team to make the opening remarks and we’ll open the floor for questions. DR., please go-ahead, sir.
Satyanarayana Chava — Executive Director & Chief Executive Officer
Thank you, Nitin, for organizing this call. Good afternoon to all our stakeholders. We continue to demonstrate our unique platform capabilities for some of the difficult to make small molecules and effectively addressing the evolving needs of our customers. We are delivering on our key strategic priorities and successfully executing on the major pipelines what we have. Interestingly, the strong progress we are making on the CDMO CMO business increases the confidence in our ability to achieve long-term success and create sustainable value for our stakeholders. We are applying our important platform technologies into some of the advanced clinical projects, which we believe have significant commercial potential. And we are further augmenting it with value-creating business development efforts like-new small-molecule, high potent R&D center, which elevates our one-stop development and manufacturing service capability with our innovators. And thirdly, enhancing our business teams across the globe. We also recently-announced strategic investment by eight roads into our. This new development further expand our efforts towards building commercial-scale sustainable manufacturing capability, which will focus on creating large-scale microbial precision fermentation capacity as well as enhancing our engineering applications as well. Thank you. I would say through continuing excellent scientific and operational execution, we are achieving significant milestones for our company and also to our customers. Moving on to our financial results, our Q3 operating results have progressfully improved and we delivered strong growth along the continued resilience in our financial year. For the current quarter, we delivered revenue of INR1,415 crores. Strong growth is driven by robust demand in our CDMO business, supported by healthy performance of formulation division. The growth was partially offset by lower uptake in our business. Gross margins were healthy and maintained well-above 50% for last several quarters and EBITDA margins increased to 20.1% following better operating leverage and then product mix. Healthy commercial execution is our top priority and our performance remains well on-track to deliver full-year growth with the revenues accelerating in the near-term. To begin, I would like to share key updates on our CDMO business. These division saw continued robust demand for commercial offerings and coupled with strong operational performance, we recorded highest quarterly sales for CDMO division in the last eight quarters, close to INR400 crores. On nine-month basis, CDMO division recorded 33% growth, reflecting continued uptake with our new assets ramping-up. I would say the division portfolio continues to shift towards high-value complex small molecules. So we also saw encouraging RFPs and continue to see signing an early to mid-stage projects involving complex chemistry. And this movement is partially enabled by increasing collaboration with the new R&D center with new big pharma partners. Additionally, we are actively promoting our BD efforts to successfully deliver clinical projects to broaden project pipeline for long-term accelerated growth. The broader outlook for industry with small molecules is positive and we remain committed to our 2024 growth outlook, supported by scheduled project deliveries for a few late-stage projects in the Q4. So we’re working on over 90 active projects, mostly in-human health and also some in the animal health and as well. In the generic APIs, we reported revenues of INR531 crores with a decline of 7%. This was mainly due to lower-volume offtake in ARV APIs. For nine months, the business was more or less very stable, declined slightly above 3%. So the soft ARV performance was essentially due to prioritized capacity allocations towards high-yielding long-term business opportunities. And having said that, we would like to reassure that our order book in ARV is healthy and Larus will fulfill all confirmatives and contractual obligations. Also, we have indicated in previous calls that our combined ARV performance, APS and formulations have done better than over the last year and stabilizing franchisee revenues. On the non-ARV portfolio, we have seen some sequential recovery as part of ongoing strategic initiatives. We continue to work towards expanding our CDMO — CMO offerings in small-molecule APIs. So overall, we see API growth returning next year with positive order book what we have. During the Nine-Month period, we filed four DMFs, three in non-ARV category. With this, the total number of DMFs filed is 87. So in our formulation division, we delivered strong progression in Q3, improving our year-to-date performance. Revenues for the quarter were INR436 crores. For nine months, we have returned to growth of over 5%. The average business and developed market business, our portfolio increased on higher activity. We have a couple of launches that we expect to provide meaningful growth in the next financial year. Cumulatively, we have a total of 43 filed to date. Of this, we have a total of 21 final approvals and 14 2 approvals. We continue to have diverse footprint and pipeline, including products franchisee comprising of ARV, cardiovascular diabetes and CNS apart from as well. I’m also pleased to report that our collaboration with is progressing well. We have already initiated the validation of few products under the new CMO agreement for integrated generic contract manufacturing. On the R&D front, we are spending about 5% of our sales for the nine months of the current financial year. We continue to invest in portfolio with product-specific approaches based on complexity and scale of challenges. Well, coming to Laras Bio, this division reported Q3 sales of INR48 crores, the growth of 14% year-on-year. If you look at the nine months performance, the underlying growth is very healthy, excluding the impact of advanced shipments last year and also we discounted some low-margin non-core nutrition business. So Q3 continued to see increased customer pipeline with of animal arging free ingredients and the CVMO customer-base increased significantly. We are further expanding our R&D capacity with the installation of high-throughput systems to meet our increasing demand of our R&D services. Regarding our plan to set-up a large-scale fermentation capacity in, we are pleased to join forces with as our partner. We believe our strong collaboration will enable us to expand and accelerate high-quality CDMO services capability to global partners. The proposed investment will be more than double our fermentation capacity and we expect it will be ready by end of calendar year 2026. Let me share briefly on quality side. In nine months, the company underwent close to 120 quality by multiple drug regulatory agencies and also customers. Company has successfully passed this without any critical findings. To conclude, I want to again acknowledge the focus and commitment of our team. Based on our continued progress across diverse portfolio and pipeline projects, we are more confident about our long-term future and value-creation for our stakeholders in the coming years. With that, I’d like to hand it over to Ravi to share some financial highlights.
V. V. Ravi Kumar — Executive Director & Chief Financial Officer
Thank you, Dr and very warm welcome to everyone on our quarter three and nine months FY ’25 earnings call. So our total income from operation for nine months is around INR3,834 crores with a growth of 6%. For the quarter, we have done INR14 crores with a growth of 18% year-on-year. The fundamentals of our business have remained healthy, led by order book position and continued progress in CDMO business. Gross margins maintained healthy level for quarter three, which came at 56.9% and for nine months 55.8%, mainly due to better product mix as well as process improvements done in some of the key large-volume APIs. Our EBITDA for quarter three stands at INR285 crore with EBITDA margin at 20.1%, which has progressively improved. For nine months, EBITDA came at INR638 crores with margin of 16.6%. This is versus 15% in last year. The margins are suppressed due to continued operational deleverage, even though some of the assets may have started to ramp-up. We expect quarter-four will be ramp-up further. Our profit-after-tax for quarter three is at INR22 crores and for nine months at INR125 crores. Our ROCE was 6.8% due to lower operating results and continued capex investments towards growth projects. On the capex front, we invested close to INR186 crores for the quarter and INR448 crores for nine months FY ’25. Our net-debt stood at INR2,766 crores and debt-to-EBITDA is around 3.1 versus 3.1 versus 3.4 in the last quarter. As we have articulated in the past, we are expecting gradual deleveraging following acceleration in operating performance in the near-term. On the capital allocation front, our strategy remains unchanged and we will continue to prioritize investment into high-value business segments like CDMO. You can refer to our IR presentation for more details. With this, I would request the moderator to open the lines for the question-and-answers.
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 and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles in order to ensure that the management is able to answer questions from all participants, please limit your questions to two or one per participant. The first question is from the line of Sajal Kapoor from Addi Fragile Banking. Please go-ahead.
Sajal Kapoor
Yeah, hi, thanks. Good afternoon, everyone. First question is related to Bio. Recently a 59-year-old female patient from Netherlands traveled to India for CAR-T cell therapy and the treatment was successful. And of course, this is wonderful outcome for Indian scientists, doctors and healthcare infrastructure in the country in particular. And I’m of course, so proud to be an investor in Immunoact through lot of labs, of course. My question is about both Immunoact and our gene therapy Phase-1 progress at Kanpur and can these individually become multi-therapy assets at-scale?
Satyanarayana Chava
Thanks, Char asking very interesting question. As we are speaking, our company Immunact obtained the DCG approval to conduct a clinical trial for BCMA. So it is not a company anymore. So they have — they are going to start dosing the first patient in BCMA soon and they are also starting to work on other clinical assets as well. So we are moving from one-product company to multi-asset company at. Coming back to your question on IT Kanpur, our commitment to progress, the three assets what we are licensed from IT Kanpur are progressing well and we’ll have more to share about the families and all-in the coming quarters.
Sajal Kapoor
Thank. That’s helpful, Dr Satya. And my second and last question is, given our reactors are interchangeable or fungible, we can always stop ARV and switch to NCE or higher-margin product in the same block where we are currently doing ARV today should an opportunity arise in future. So I mean, logically thinking instead of doing a 35% gross margin in a fungible reactor, we would rather do a 70% gross margin molecule. I mean, is that how you would think as well?
Satyanarayana Chava
Currently, we are not struggling for capacities. So — and at the same time, ARVs, both APS and formulation put together is a sizable business, it is a cash cost. So we don’t want to disregard that and then defocus. See, we have enough capacities to cater to NCE programs, Sanjay, yeah.
Sajal Kapoor
Yeah, yeah, definitely. So we want — yes, it’s the cash-cow for sure, but if there is a dramatic shift in the external environment, so you know US pulling out of WHO causing a near-term knee-jerk reaction on tender or any such kind of a scenario emerging. We always have the capability and the capacity to make a different product in the same infrastructure. That’s my question precisely.
Satyanarayana Chava
You are absolutely right. It is definitely global. If you look at our journey in the last six, ever years, we used to make more than 1,000 tonnes of FOR range per year. Now we are making 50 tonnes per year. So that capacity converted to something else. So the reactors are fungible as we mentioned. If there is need arises, we are — our ability to repurpose it to other APIs is quite possible.
Sajal Kapoor
Thank you. Yeah, that’s helpful. Thank you so much. I’m done. Thank you.
Satyanarayana Chava
Thank you.
Operator
The next question is from the line of from Motilal Oswal Financial Services. Please go-ahead. Go-ahead.
Tushar Manudhane
So just a bookkeeping question first. How much of the ARV formulation sales for the quarter?
Satyanarayana Chava
So I have a second question, we will answer the first question.
Tushar Manudhane
So with respect to this investment by eight in the fermentation business, we were already implementing the capex for 4 million fermentation facility. So this investment goes into this 2 million facility or this is separately 400 kilometer capacity, which we are going to come up under the deal with road.
Satyanarayana Chava
Actually the deal with airports, we are not creating capacity for airports. We are creating capacity for our own purpose. And the — we took the partner for their technical advisors and their portfolio companies, but otherwise, the 400 capacity will come for Bio. So we will do our own products. And going back to first question in the Q3, our ARB sales were little over INR300 crores, INR304 crores FDL.
V. V. Ravi Kumar
Yeah, INR304 crores is the FDA, PRV sales of Q3, correct.
Tushar Manudhane
Got it. So sorry for this conclusion, but the facility which we are building up that is 2 million fermentation facility that is another project. And then 400 capacity is another project. Is that the right way to understand?
Satyanarayana Chava
Actually, if you look at our large-scale bio capacity, we have two large-scale capacities will come up, one in, one in. So both plants are intact. So we have accelerated construction of because of operational reasons, but eventually we’ll also have another facility committed. Both are active.
Tushar Manudhane
Got it. All right, sir. I have more questions? I will come back-in queue.
Satyanarayana Chava
Thank you.
Operator
The next question is from the line of Krish Mehta from Enam Holdings. Please go-ahead.
Krish Mehta
Thank you for taking my question. I just wanted to follow-up on the previous participants’ question on the ARV versus non-ARV mix. Is it right to assume that your ARV total revenue for this quarter was INR617 crores? Or if you could just break-up the total ARV versus non-ARV?
Satyanarayana Chava
You’re right. That’s about INR619 crores. Yeah.
Krish Mehta
And if I could follow-up, how do you see this trajectory going-forward as our API sales sort of stabilize a bit in the next, say, one, two years.
Satyanarayana Chava
So we can give you a broad range. We are not anticipating any growth coming from this both API and farmers put together. If you sum it up, it is INR600 crores INR650 crores per quarter. We expect it will remain in that range next year, year-after also. So that’s kind of stabilization we expect in the DRV franchise between INR23 crores and INR2,500 crores from where in what. And we believe that’s quite possible even now. Yeah.
Krish Mehta
Okay. Thank you so much.
Satyanarayana Chava
Thank you.
Operator
Thank you. The next question is from the line of from Quest for Value Capital. Please go-ahead.
Bharat
Hello. Hi, good evening. May know when is this Bio plant going-live, sir?
Satyanarayana Chava
By end of 2026,.
Bharat
Okay. And regarding this FDF 3 billion capacity for, may know by when this would be starting delivering revenue for us to community to I’m talking about.
Satyanarayana Chava
So see what we started doing, we started doing validation of the products, which will go into the increased capacity already and then the new capacity will come November, December this year onwards in a phased manner? Yeah.
Bharat
Okay. And my last question is Biosecure Act. Now that this act is delayed, because of this, do you see any slowdown on momentum of the supply-chain diversification efforts from innovators?
Satyanarayana Chava
We haven’t seen any degrowth in visits or RFP flow. Yeah.
Bharat
Okay. Okay. Thank you very much. That’s it from my side.
Satyanarayana Chava
Thank you.
Operator
The next question is from the line of Chirag Shah from White Pine Investment Management. Please go-ahead.
Chirag Shah
Thank you. Sir, first question is on — on Q4 of current financial year. So last quarter you had indicated H2 margins could be around 25%, so that our annualized margins would be 20%. Now we have done around 20% in Q3, right? So do you still hold to your H2 guidance of 25% if not, have there been any delay in Q3 revenue which lead to lower margins? That’s my first question.
Satyanarayana Chava
I think we — as I had mentioned in the initial comments, we are still confident to what we have committed to bring the entire financial year EBITDA closer to 20%. Yeah.
Chirag Shah
Okay. And the second is for next year, F ’26, given the efforts we’ve been putting on CDMO over last two, three years, can we expect ’26 could be the year of the breakthrough phase and we can cross or reach INR2,500 crores of revenue.
Satyanarayana Chava
On a full-year basis, there could be seasonality, there could be seasonality, but on a full-year basis. I don’t want to comment on the quantum of business we do next financial year, but the prospects in the CDMO division looks very bright and we expect to have growth.
Chirag Shah
And when you say growth, will it be substantial over F ’25 because F ’25 has been a subdued year.
Satyanarayana Chava
So I think will reserve comment on this. So I can still say that the FY ’25 will be good year for CDMI. FY ’26 will be even better year for CDMO.
Chirag Shah
Yeah. Okay, great. Thank you. And margin guidance, any margin guidance you have for ’26 given no, there are lot of moving parts in the business where
Satyanarayana Chava
We are not giving any margin guidance.
Chirag Shah
Okay. Thank you very much.
Operator
The next question is from the line of Sivan Bhatwa from Sarashtar Capital. Please go-ahead.
Jeevan Patwa
Yes, sir. So congratulations first to the entire team. So we are seeing very good trajectory on the CDMO side. I think CDMO is going to fire from here and that’s what I feel in Q4 and onwards, I think we will have a different numbers from CDMO. Just wanted to understand and if you are able to give some details on this, so any number of commercial molecules getting commercialized in FY ’26, any idea on that? In terms of — also the Animal Health business, how do you see that animal Health business is going to shape up and also the agrochemical business, how is going to shape up in the CDMO side, I’m so asking.
Satyanarayana Chava
I think next year will be a good year for our animal health. So we expect significant growth will come from there. And we will commercialize our CARP facility and we will also expect sales coming from that unit. When it comes to human CDMO, we have a lot of clinical programs. I don’t want to comment on how many we commercialize how many we in Phase-3. We never gave that number of breakup of programs, but we have a very good pipeline. As I mentioned, we are not offering RSMs are intermediates. So we moved one RB and we are giving APIs and which are also volume and which are also complex APIs. So that’s the game we are playing and we are happy we have invested significantly in those and our customers are also very happy with what we are delivering.
Jeevan Patwa
Perfect. No, sir, I also very happy with the numbers this quarter. I think next quarter is going to be really good in terms of CDMO. One more thing, sir. In terms of gene therapy, so we are saying we are going to commercialize the vector manufacturing facility in FY ’26. So is it going to be utilized for contract manufacturing also?
Satyanarayana Chava
Yes, you’re right. So the facility will also sell GMP grade viral vectors and also rather the ability to do more classmates CMO work and it will be a combination of both.
Jeevan Patwa
And how big it would be, how much we are putting investing — investing there?
Satyanarayana Chava
So our investment into GMP scale facility is about INR100 crores, INR20 crores INR130 crores and we invest if there is a need. So see, you know our initial philosophy continues to change. We invest ahead of the time. And then no, we have licensed patents, we are licensed technology for vectors. I think as we committed FY ’26, we will have the GMP facility up and running.
Jeevan Patwa
Okay. So INR100 crore is a big amount for I think this viral vector. So that’s great, sir. That’s great. And the last question, I think little difficult question again. So when do you think the kind of FY ’21 kind of growth we can expect in the formulation and the APS rate. Do you think FY ’26 will give that kind of growth in the formulation or it will be FY ’27?
Satyanarayana Chava
I think we are broadening our pipeline in our API and also in formulations, that will take some time. It will not be a quantum jump-in FY ’26, but the kind of pipeline we are developing will have a unique offerings and we expect significant growth will come in the medium-term. I don’t expect signal growth coming in the near-term, but medium-term, we are very confident.
Jeevan Patwa
So can we expect FY ’27 to be the year for formulation and APM?
Satyanarayana Chava
We don’t want to. I think, see, we can discuss closer to when we are but filing DMFs in the new portfolio. Yeah.
Jeevan Patwa
Perfect, perfect. Thank you, sir. Thanks a lot. Thank you.
Satyanarayana Chava
Thank you, John.
Operator
The next question is from the line of Madhav from Fidelity. Please go-ahead.
Madhav
Hi, good evening. Thank you so much for your time. Sir, I just wanted to understand that you mentioned that we have shifted from doing RSM and intermediate to doing high-volume complex APIs. Does — I mean could you explain a little bit more like what’s happening is that customers are asking us to do the final API itself or sort of what’s changed there? I mean, just trying to understand the thought process.
Satyanarayana Chava
I think when people come and they want volume, we’re able to provide what volume their partners are asking and also what technology platforms we created also enables us to do complex things. We do significant work-in flow chemistry, biocatalysis, hypotent manufacturing, high-energy chemistry, designation. So we’ve created some technology platforms, which helps us to add value to our partners’ programs. So that’s the reason we moved from RSMs to a very advanced intermediates are APIs.
Madhav
Yeah. So is this a recent shift in the pipeline? Because if I understand that one or two years back, we did do some KSM intermediates. So I mean, this is the first time I’m hearing this shift. So is this something more recent that we’ve kind of realigned the portfolio or something which has been happening for some time?
Satyanarayana Chava
We have realigned our portfolio. We are getting that kind of projects. I’ll put it in that way. It’s a progressive.
Madhav
Yeah. Okay. Okay, got it. Got it. Sir, just had one request. Given lot of your peers, they do give a breakup of, let’s say, we have 70, 80 human health projects. I think you do mention how many are commercialized. But if you could — if it’s possible, just to give a breakup into different phases, like how many in Phase-3, Phase-2, Phase-1, that will just be more clear for the investor community. So just a request from my side. Thank you.
Satyanarayana Chava
So I mean, as I mentioned, Madhav, we don’t want to dwell into finer details. See, this CDMO business is very dynamic in nature and we don’t want people to start guessing projects and done. So we also have confidential agreement, we don’t want to reveal too much. So when it is commercialized, people know very easily on the export data nowadays, so people are dissecting so much. So we don’t want to give more data further.
Madhav
Yeah. Got it. And sir, just the last question from my side was the KRK JV, which we are implementing. I don’t know if you’ve called it out before, but any — how much capex are we putting in for that JV and sort of in two, three years, what kind of revenue can come from the JV separately? If you could give us some sense that will be really helpful. Thank you.
Satyanarayana Chava
I think we are formulating our strategy correctly right now. And the blueprint stays on the facility and also products. Maybe we’ll be able to give more details maybe middle of next financial year.
Madhav
Yeah. Understood. Thank you.
Satyanarayana Chava
Thank you.
Operator
The next question is from the line of Deepak Malek from Cardnalian Capital. Please go-ahead.
Deepak Malik
Yeah. Thank you for giving the chance and congratulations for a good set of numbers. Sir, my first question is on the CDMO business. Can you please highlight what drove this strong growth in this quarter? Is it like human — human CDMO or was it animal in this quarter? So what actually drove the performance? And is it sustainable for quarter-four?
Satyanarayana Chava
I think the growth came from both human health. Majority came from human health, but partly also came from animal health CDMO. And we expect our pipeline is robust and we are also doing very late-stage or APIs. We expect to — we continue to do well in this division Q4 and beyond.
Deepak Malik
In this human health and Animal health, has there any new capacity which gone into commercialization or was it a new product which got launched? So what actually — if you can give a little more color exactly, so what exactly led to this kind of strong growth, launch of new products, the commercialization of new facility or a ramp-up of existing contracts or whatever.
Satyanarayana Chava
I think no new capacities came online. We have a lot of capacity, which we have created for this division and we started utilizing and we are delivering some projects which we delivered small quantities in the previous years. So it is a gradual growth. So this business, one has to have a lot of patients and we patiently waited for the programs moving from earlier clinical phase to late clinical phases. And this growth is effort what we have put in the last two years.
Deepak Malik
Okay, sir. Okay. Got it, sir. And you think this is something which will further scale-up going-forward from Q4 and Q1 and Q2. So this is like just a start and then things will further scale-up from here onwards. Year-on-year scale.
Satyanarayana Chava
Yes, yes. We expect different — this division will grow in FY ’26. I’ll leave at that stage. I’ll not quantify how much growth comes right now.
Deepak Malik
Yeah. Okay. And second, sir, you have given one very good slide in the presentation, the seventh number slide where you have given that there is a INR3,000 crores of total capex from FY ’22 to ’25 you have done. And in that around 72% capex is into the API and CDMO. And then you’ve given the breakup also that, okay, there is 50% which is ongoing capex and operational is only just 21% and ramp-up stage is only 28%. So that means like more than half of the capex is still not commercialized and that is still to come in this INR3,000 crores, only INR1,500 crores is something which is in the various stage of scaling up.
Satyanarayana Chava
I think it’s — I’ll answer that question a little differently. See, the capacity is there, but we are not doing regular production there. So when we do scale-up batches or validation batches, multi-stage, so utilize your block very inefficiently. So the real value comes when we do commercial.
Deepak Malik
Thank you, sir. So, yeah. Okay, got it. And in this, so if I have to say that — so approximately what kind of sale must be coming in from this INR3,000 crores means INR1,000 crores or maybe even less than that. This new capacity.
Satyanarayana Chava
We don’t want to quantify it that way, but the — on the left-hand side, you might have seen at the highest we have done 1.4 asset turnover ratio. The lowest, currently we are 0.8. So when we go commercial, I think revenues will be somewhere in-between.
Deepak Malik
Yeah. So you have given there that it’s 0.8 times. When you say 0.8 times of the overall INR3,000 crores or is it just the one which overall.
Satyanarayana Chava
Overall glass block including INR3,000 crores.
Deepak Malik
Okay. Okay. Got it. And whatever capex which will be coming in-going forward, that will be over and above this
Satyanarayana Chava
Yes. Yes. Okay.
Deepak Malik
Thank you very much, sir.
Operator
Thank you. The next question is from the line of Ankat, an Individual Investor. Please go-ahead.
Venkat
Thank you, sir, for giving me this opportunity. I just wanted to know, I mean, what is the impact on business that US from WHO?
Satyanarayana Chava
See, WHO is a policy framing organization. WHO don’t fund any ARV procurement. They do make policies, they do approve the dosiers guidelines and all. So, yes, I’m moving away from membership of WHO will have some impact on the guidelines, approval timelines of files and all. But in the mid — near to midterm, we don’t expect any impact on the drug purchases because the amount of money spent on drug purchases, 10% of the money spent on the HIV eradication program. So we don’t expect significant impact on that.
Venkat
Okay. Okay, sir, one more question. Sir, earlier when we purchase, we thought to put up 2 million fermentation facility in Bangalore. Why was it more to, sir? I mean, just try to understand.
Satyanarayana Chava
So we have used Bangalore as a — as a word, but otherwise our initial plan was to put up a facility near Tumkur or. So that was the idea. And we moved our — — the phase of construction to Vijag for operational reasons. So our plan of creating large-volume facility of 2 million liters still intact.
Venkat
Yeah. When is it expected to complete?
Satyanarayana Chava
The same — facility will be operational by end of 2026.
Venkat
So it’s going beyond end of 2026 in return, right?
Satyanarayana Chava
Yes. Yes.
Venkat
Thank you, sir. All the best for future growth. Thank you.
Satyanarayana Chava
Thank you. Thank you.
Operator
The next question is from the line of Mayur from Wealth Managers India Private Limited. Please go-ahead.
Mayur
Good evening, sir. Thank you. I hope I’m audible.
Satyanarayana Chava
Yes.
Mayur
Sir, just one broad question and it may appear to be little financial and but I think from a strategic standpoint, you know, the stakes of eight road stake 14% with me look at, broadly the value comes to around INR850 crore INR160 crores for the overall Laurus Bio. When we look at the annualized current revenue run-rate, it is just slightly sub of INR200 crores. Our own entire is valued much higher than that. So — and we believe the bio segment supposed to be much more high — should have been a little more qualitatively more higher valuation if it commands, so to say. So just wanted to understand your thought process when we looked at this and what kind of benefit shall it accrue? And is it the right way to look at and what is — what are your thought process as — and when we looked at that kind of an arrangement?
Satyanarayana Chava
The primary objective for us to bring as a partner is to work closely with their portfolio companies across the globe. That’s the primary intention. Second is, see, you might be aware, we acquired majority of the bio stake from fidelity itself. So they are coming back, itself is a good indication that they see value right now into this. We’re not just money purpose, we can’t fidelity into the picture to broaden our management back with there and also work with their portfolio companies. I’ll put it that way.
V. V. Ravi Kumar
But the valuation is in — we feel it’s a fair valuation. It’s not that. In fact, the same valuation even also investing. So we will invest around another INR40 crores by — before end of June 2025.
Mayur
Right, right. And we further have both either of the partners at INR35 crores additional. That is also at the similar valuation?
V. V. Ravi Kumar
Yeah. You’re right.
Mayur
Okay, sir. That’s it from my side. Thank you and wish you all the best.
V. V. Ravi Kumar
Thank you.
Operator
The next question is from the line of Ankur from ULJK Financial Services. Please go-ahead.
Ankur Bhadekar
Hi, sir. First of all, congratulations for the good set of numbers. So couple of questions from my side. One was, during the quarter, the Onco API contribution has been low around like 8% or so. So wanted to know the reason behind the same? And also do we hold — still hold a higher market-share in the gem API.
V. V. Ravi Kumar
So if you look at the 12-month period answer is just not quarter-on-quarter answer is yes. And for many of the JPS, we hold significant market-share. And see, it is kind of a some kind of a order book shifts from quarter-to-quarter, otherwise our Anco pipeline looks healthy.
Ankur Bhadekar
Okay. And how do you look at the business going-forward in terms of the bio business like with eight roads coming in, what is your future growth strategy? And like how do you see the contribution from the bio business going ahead?
V. V. Ravi Kumar
I think be able to answer that once our new additional capacity comes online. So until such time, we will only debottleneck the existing capacity. We don’t expect FY ’26 will see significant growth in Bio. So the quality of business may vary, but quantum up business may not be very significant in FY ’26. But year-after there, we’ll see a big growth in the biodivision. But we are not quantifying how much we’ll do in FY ’27 and onwards, but we see growth there.
Ankur Bhadekar
Okay. That’s — that’s helpful. Thank you so much.
Operator
The next question is from the line of Diraj Kumar from Tankya Wealth. Please go-ahead hello Kumar, your line has been unmuted. Please go-ahead with your question.
Dheeraj Kumar
Hello, sir, am I audible?
Satyanarayana Chava
Yes.
Dheeraj Kumar
First question is around I hope we supplied registration in Q3 and we are doing in Q4 as well. So my question is around — and I’m not expecting any number, but my question is around, are we supplying more than one or more than for one-product or molecule for this Q3 and Q4 or it’s for one-product or molecule?
Satyanarayana Chava
I can give broad answer. So this is the delivery smart we have done in Q3 and what we’re going to do in Q4 are for multiple products, not for one-product.
Dheeraj Kumar
Okay,. But again, I mean we have good. I mean in 2021, we supplied TO and that’s the only one-product. And when it vanish our — I mean, revenue has been significantly declined. That’s why I ask. Thank you, sir.
Satyanarayana Chava
There are multiple products. I can — yeah.
Dheeraj Kumar
Okay. Thank you. Yeah, that’s, that’s it from my end.
Satyanarayana Chava
Thank you. Thank you. Interesting question. Yeah.
Operator
The next question is from the line of Nitin Agarwal from DAM Capital. Please go-ahead.
Nitin Agarwal
Hi, sir, thanks for taking my question. Sir, on the CDMO bit, in your presentation, you mentioned that you’re working on 70 plus projects, including several breakthrough designated molecules. So from a — from a CDMO partner perspective, is there any implication we should read into this designation of molecules as fast-track as breakthrough molecules? I mean, does it have any implication — what implication does it have as a CDMO service provider?
Satyanarayana Chava
The approvals will be faster for our partner.
Nitin Agarwal
Okay, okay. And you mentioned that there are multiple of such products which are there in our pipeline?
Satyanarayana Chava
Yes. Yeah.
Nitin Agarwal
Okay. And sir, is it typically such molecules typically would be what typically the orphan drug molecules with smaller sort of scales or these are not necessarily orphan drug products, it’s typically in such destinations?
Satyanarayana Chava
I think I will not answer this question.
Nitin Agarwal
Yeah. And sir, the other point that you mentioned on the ecosystem for CDMO, sir, I mean, some of the trends that you mentioned, I mean how are they play — I mean what implications do they have positive or negative for as a business. You know in whatever changes that you’ve seen in the landscape over the last few quarters and the things that you had — things that you’ve seen changing for now?
Satyanarayana Chava
I think it’s — there are changes, but those are all positive for us.
Nitin Agarwal
Yeah. I mean, the point that you mentioned about supply-chain optimization by big and midsized pharma, I mean what kind of changes are you seeing on that account, sir?
Satyanarayana Chava
I think they are trying to add some key vendors to diversify their supply base. That’s what is happening and we’re happy the way things are going right now.
Nitin Agarwal
Okay. Okay. And the last question, what is, sir, what kind of programs do we have for the peptides of various kind of peptide drugs they are right now, the big talk of town in terms of GLP and the other sort of products. What kind of capabilities do we have on peptides and how do we see that part of our business scaling up?
Satyanarayana Chava
I think, see, we are not giving what products we are working, what therapies we are working, we are not giving. So we — that’s giving too much of details. We don’t want to give a very minute details, which is against our policy now.
Nitin Agarwal
Thank you. Okay, sir. Thank you so much.
Satyanarayana Chava
Thank you.
Operator
Thank you. Next, we have a follow-up question from the line of Tushar from Motilal Oswal Financial Services. Please go-ahead.
Tushar Manudhane
Yeah, thanks for the opportunity again. Sir, just on the CDMO or the custom synthesis piece, if you could just clarify, this is like more of the exhibit batches traction which has come in this quarter or this is like subsequent to product approval, the initial buildup commercial activity that has driven the custom synthesis business quarter-over-quarter.
Satyanarayana Chava
We supplied one commercial launch quantity and multiple restation quantities.
Tushar Manudhane
So the commercial size, given that this is more liquid?
Satyanarayana Chava
Is not.
Tushar Manudhane
Sorry, am I audible now?
Satyanarayana Chava
Yeah.
Tushar Manudhane
So this commercial buildup activity will then probably take a breeder and then and then and then drive the business or this is more like a sustainable number two work for?
Satyanarayana Chava
So the commercial API what we supplied in this quarter will continue to be there. We know the forecast. I think that’s a good for us. And there are several, as I mentioned, the growth doesn’t come from one-product. Growth came from multiple products. So we’re happy that our CDMO division also well-diversified. Yeah.
Tushar Manudhane
Understood, sir. Understood. And lastly, when do we see pickup in the formulation business per se where we’ve seen certain products filed up to approved or subsequent launches.
Satyanarayana Chava
So I think overall of formulation digital grew this quarter and we expect it will do well.
Tushar Manudhane
Great, sir. Thank you. Thank you much.
Operator
The next question is from the line of Sajal Kapoor from Anti-Fragile Banking. Please go-ahead.
Sajal Kapoor
Yeah, yeah. Thank you for taking my follow-up. DR. Satya, culture is always the hidden factor-in delivering high science and innovation and I’m sure you know that more than anyone else. And according to some empirical studies, employees who are employees who eat together and show — kind of show — you know engage in social activities out of their labs and workplaces, they tend to perform better at-work. So I mean, this is the — this is in the context of this mushrooming of life sciences global capability centers around Hyderabad. I mean, do you think this poses a threat in terms of attracting or retaining talent? And if yes, what is doing in terms of culture, work-life balance and creating a more fun at-work kind of a climate for disruptive innovation to foster. Thank you.
Satyanarayana Chava
I think see at Laras most of our mid to senior leadership fields this their company because we give liberal start options and also since any employee spends significant time in the office, unless workplace is happier, the armonation will not be happier. We put a lot of effort to make the workplace an happier, safer place. And most of the time senior leadership thinks about how we are helping our colleagues to do their job better happily. And as I mentioned, we also moved from employee well-being to family well-being. We do a lot of programs for not only employees for their kids, for their spouses as well. So we think we are treating our colleagues as a bigger family.
Sajal Kapoor
That’s helpful, Dr. So in terms of our recent R&D is this new R&D center in the Genome Valley. And given the mushrooming of these GCCs, I mean, was there any sort of struggle or we were finding it difficult to attract the kind of talent that we were looking for that new R&D center given what all is happening in Hyderabad. I mean, there are far too many CDMOs and GCCs in the region. Have you — have you faced any sort of difficulty or employee attrition on the R&D side?
Satyanarayana Chava
And this is a very interesting question,. See, when it comes to global capital discenters, they are more on regulatory IT, back-office kind of which we — Laros is not part of any other programs. When it comes to other CROs, CMOs in the region, I think your point is valid. It is a challenge we had to overcome and we do that effectively. See, the kind of recruitment drive we do, the kind of opportunities our colleagues see, I think we are happy to take that challenge and then recruit right talent.
Sajal Kapoor
Perfect. Perfect. That’s helpful, Dr Satya. Wish you all the best. Thank you.
Operator
The next question is from the line of from Quest for Value Capital. Please go-ahead.
Bharat
Hello, hi. Thanks for taking my follow-up question. Regarding this preferred tenders, sir, I think it’s for three years. May know when is it the current tender getting expired?
Satyanarayana Chava
I think global fund tenders are for three years and they started the last year. So it continues for two more years.
Bharat
Okay. So — and the next tender cycle is from 27%.
Satyanarayana Chava
Yeah, yeah
Bharat
And may know the split-up of this INR531 crores for this API in fleet, can please give a split-up between ARV, onco and other API?
Satyanarayana Chava
The ARV sees crores.
Bharat
Okay. And onco and other income
Satyanarayana Chava
216, yeah.
Bharat
Okay. Okay. Thank you. Yeah, that’s it.
Operator
The next question is from the line of Sanghavi from Bodhi Capital. Please go-ahead.
Malhar Sanghavi
Yeah. Yeah. So first of all, congratulations on a good set of numbers. So my first question is, are you trying to reduce the capex and
Operator
Mr, can you please use your handset and speak?
Malhar Sanghavi
Is it better now?
Operator
Yeah. Yeah.
Malhar Sanghavi
My question was, are you planning to reduce capex of the percentage 1% last —
Operator
Your voice is cracking. Can you please rejoin the queue again? The next question is from the line of Chirag Shah from White Pine Investments. Please go-ahead.
Chirag Shah
Yeah, thanks a lot for giving the opportunity again. Sir, I would — you have a question on CDM again. Sir, if you can just highlight the predictability of the revenue of CDMO versus the — it was a bit more volatile at least on a quarterly basis. So what is the change or the nature of the CDMO revenues that we’ll have, which will make it more predictable versus the past. It will be volatile, sir, I understand that, but I’m just trying to understand, is there a major change in the nature of CDMO revenue stream? We did INR400 crores, for example, I’m looking at the synthesis business altogether, INR400 crores in Q3. If we take that as a base, how should one look at the predictability going ahead of the CDMO business
Satyanarayana Chava
I think as I mentioned, the pipeline in our CDMO business is robust and growth came from multiple projects, not from one. And we have a large number of clinical programs running. So I think all of us are aware it is absolutely impossible for all programs to succeed. It is also a difficult to guess all programs and these are coming from multiple big pharma for us. So we feel — we believe the chance of success of our CDMO pipeline is very-high right now because of the therapy areas where we are involved in those programs. We expect to — the chances of success is bright. I’ll leave at that stage. Yeah.
Chirag Shah
So is it right versus the history of if there is much bigger pipeline executing at the same time and probability of those achieving success is also higher versus the past and that will bring in a bit more predictability versus the — versus our past. That is the right way to understand?
Satyanarayana Chava
You’re right, absolutely. So yeah, see, previously the large PO came and then after that there is a gap. Now, so what with this growth, we believe is sustainable growth. Yeah.
Chirag Shah
Okay. Thank you.
Satyanarayana Chava
Thank you, Mana. Yeah.
Operator
The next question is from the line of Vivek Agarwal from Citigroup. Please go-ahead.
Vivek Agrawal
Hi, thank you for the — thank you for the question. So the question is on 4Q NCE product deliveries that you were talking, right? So any deliveries happened in 3Q as well or it is going to be completely the new supplies that are going to reflect in the 4Q on-top of what we have done in 3Q.
Satyanarayana Chava
It’s a combination. Yeah,
Vivek Agrawal
Sir. Yeah. So some part of supplies have also — you also made in 3Q as well, right?
Satyanarayana Chava
Yeah, yeah. We will do more in more products in Q4. We’ll continue to augment our supplies of the launch quantities what we gave in Q3. We continue to do in Q4 as well. So I think I would say the pipeline is robust. So yeah, we’re happy. Our efforts came to this stage.
Vivek Agrawal
Yeah. Thank you,. Sir. Just one more question on the six ongoing growth projects that you’re talking about, including three small molecules, one a drug product and two CCT. So is it possible if you can give some more color on what stage these products are whether it’s a Phase-1, Phase-2 later-stage or either filed with the FDA, et-cetera
Satyanarayana Chava
In the generic portfolio, two products approvals we expect in next — this quarter or next quarter. So we hope to launch those. And in CGT, it’s very early for us to give any guidance what — and because our facility is only coming up in FY ’26, GMP facility. So I think our CGT, we’re only investing, nurturing that and I think we’re happy for the investment what we’re doing. As we mentioned earlier, our commitment to put about INR120 crores in the facility itself is a good commitment and we are happy to do that. And we believe our facility will cater to not only for the viral vectors, but also ability to make plass mix for others.
Vivek Agrawal
Okay. Yeah. Thank you, Satya sir. And just one more I think repeated question earlier participants have also asked, I think this would be super helpful if you can highlight that how many new products that you see that can be commercialized in the next, let’s say, one year or even if you can give a broader index that and in the next three years, we are going to commercialize this number of molecules, especially in the CDMO, that would be super helpful.
Satyanarayana Chava
I think it’s difficult to give that. But as difficult to give that number. Yeah.
Vivek Agrawal
No problem at all. Thank you. Thank you very much. All the best.
Satyanarayana Chava
Thank you.
Operator
Thank you. Ladies and gentlemen, this will be the last question. It’s from the line of Mala Sangawi from Bodi Capital. Please go-ahead.
Malhar Sanghavi
Am I audible now?
Operator
Yeah.
Satyanarayana Chava
Yeah. Malah, I’m very audible now.
Malhar Sanghavi
Great. Yeah. So my question was in the presentation, you mentioned that there are around 2,600 scientists and around 1,250 R&D scientists. So I just wanted to know if you have front-ended the hiring and if we can handle much more amount of molecules than we currently have the same number of teams.
Satyanarayana Chava
So that is the intention. We opened a new R&D in last quarter and that R&D is as big as our current R&D. And currently, we are not doing much early phase programs because of late-stage programs are taking away a lot of resources. So we will offer more early-stage work that will also fill our pipeline. And we will augment — we are augmenting and we will augment further our scientific talent to take more clinical programs.
Malhar Sanghavi
Okay. Right, sir. Thank you. And one more question. Are you planning to reduce the capex going-forward in the next couple of years because that’s been the trend over the last two years. So is it going to continue?
Satyanarayana Chava
Yeah. I think capex-wise, if we see an opportunity to invest, that’s the way our philosophy and we continue to do that. If somebody comes and looking for a project, we’re happy to invest.
Malhar Sanghavi
Right, of course. Perfect. Thank you so much, sir.
Satyanarayana Chava
Thank you. Thank you, Mala.
Operator
Thank you. Ladies and gentlemen, that was the last question for today’s conference call. I now hand the conference over to the management for their closing comments.
Satyanarayana Chava
Thank you thank you, Nitin for this call. And also thanks for all the participant of the call for their outside-in view and some of the questions asked by you are very forward forward-looking and also help us to guide our business forward. Thank you.
V. V. Ravi Kumar
Thank you.
Operator
On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.