Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Laurus Labs Limited (NSE: LAURUSLABS) Q4 2026 Earnings Call dated Apr. 30, 2026
Corporate Participants:
Satyanarayana Chava — Founder and Chief Executive Officer
Krishna Chaitanya Chava — Executive Director
Soumya Chava — ED Generics and Commercial
V. V. Ravi Kumar — Executive Director and Chief Financial Officer
Analysts:
Payal Shah — Analyst
Sajal Kapoor — Analyst
Bharat Sheth — Analyst
Chirag Shah — Analyst
Mehul Panjwani — Analyst
Abhijit K — Analyst
Tushar Manudhane — Analyst
Jeevan Patwa — Analyst
Unidentified Participant
Unidentified Participant
Vivek Agrawal — Analyst
Foram Parekh — Analyst
Rahul Bhardwaj — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to The Laurus Labs Q4 FY26 earnings conference call hosted by Dam Capital Advisors. 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 this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms.
Payal Shah from Dam Capital Advisors. Thank you. And over to you ma’. Am.
Payal Shah — Analyst
Thank you. Good afternoon everyone and a very warm welcome to Laurus Labs Q4 FY26 earnings call hosted by Dam Capital Advisors. On the call today we have representatives Norris Labs Management, Dr. Satya Narayan Chawa, Founder and CEO Mr. V.B. Ravikumar, Executive Director and CFO Mr. Krishna Chaitanya Chawa ED CDMO, Mrs. Soumya Chawa ED Centrics and Commercial and Mr. Vivek Kumar, AVP Investor Relations. Before we proceed, I would like to remind you that some of the statements made during the call today could be forward looking in nature and a safe harbor statement to this effect has been included in the press release that has been shared on the company’s website.
I hand over the call to Dr. Chaba to make the opening comments and then we’d open the floor for questions. Please go ahead sir.
Satyanarayana Chava — Founder and Chief Executive Officer
Good afternoon to all our stakeholders. Our company’s purpose of chemistry for better living guides us everything what we do. In 2026 we significantly accelerated our performance reflecting sustained demand in technology driven commercial offerings. The transformation of our portfolio is well underway. The momentum is building as we continue to execute on our strategy. The clear focus. In 2026 our business benefited from successful clinical and commercial supplies for complex NCE compounds, ramp up of supplies of the few new launches and sustained global leadership in anti retrieval therapy where we continue to service 1/3 of the global HIV population.
We continue to advance our well recognized development and manufacturing platform capabilities with global customers. I’m confident in our ability that this will further expand business opportunities in coming years. The company has exceeded 8200 cubic meters of reactor volume for small molecule API and intermediate manufacturing in FY26. As we progress we are making significant investment behind important technologies, high growth modalities, large scale manufacturing infrastructure to support our clients needs.
Currently we are managing several capex growth projects which will be executed in the next two years. 90% of project spend is towards mid and large scale manufacturing. I will just make a few areas where we are investing we are creating a large manufacturing greenfield project unit 7 and the first production work will be ready for commercial validation by March 27 and 4 additional manufacturing during the next financial year. FA 28th with a combined reactor volume of over 2000 meter cube. Second commercial scale factored manufacturing block will be ready for commercial scale validation during Q2 of this financial year.
FA27 animal development capacities at unit 10 which is addition to LSPL unit 2 fourth a fermentation greenfield site for our Larus bio phase one will start by end of 2026. Lastly, we are also spending on formulation facility under our Karka Giant venture in Adamant and we expect phase one will be completed by mid-2027. Moving on to our financial results, Larus maintained its business momentum and delivered robust operational and financial performance for the financial year 2026. The company’s revenues were 6,813 crore with a growth of 23% over previous year.
This was mainly driven by significant growth in CDMO business supported by Affordable Medicine portfolio which is generics. Gross margins were LV and maintained around 60% range. EBITDA margins expanded by 6.7 percentage points to 26.8%. Our product mix within business division and operating leverage have continued to do well supporting our healthy margins overall. When we look back at our last six years, Larus has delivered on successful transformation across both business and product portfolio.
Today our share of CDMO business has increased from 13% six years back to over 30% right now. ARV revenues the contribution from ARV revenues come down from 67% to 41% the current financial year while sustaining absolute sales and global leadership in HIV therapy. And we’re deepening our CMO partnership based on consistent supply track record of large volume API and fdr. I would request Ms. Kruchyatan to share key updates on our CDMO business.
Krishna Chaitanya Chava — Executive Director
Thank you. The CDMO business delivered robust operational execution for the full year clocking at a little over 2000 crores. At 2080 crores for the small molecule CDMO we have clogged a growth of about 38% with the sales for the full year at 1896 crores. The growth essentially came from late stage pipeline programs, commercial NC API supplies to several global partners and also ramp up of the growth projects for the small molecule side. At Q4 our sales stood at about 524 crore. As I said majority of the business has come from the commercial revenues which are which are programs that are very early in their commercial journey.
The underlying demand momentum for complex APIs remains strong driving increase of outsourcing activities with trusted partners like Loris which operates in advanced technology platforms offering leading solutions in both chemistry and biology. With large manufacturing capacities, Our small molecules pipeline continues to expand with focus on high value programs and projects and fully integrated programs across technologies such as biocatalysis, flow, chemistry, hydrogenations, continuous manufacturing of drug products, high potent APIs amongst others.
There is continued investment into capacity creation at Vizag and also we are advancing quite well as Dr. J mentioned on commercial peptide manufacturing capabilities based on customer demand. Coming to Loras Bio, the Bio Division reported a Q4 sales of about 65 crores on an order basis that’s about 124% partly due to the lower base that was there last year. If you look at our full year numbers, sales has increased by about 15% which is largely along the expectations. The good part is that this growth is supported by customer revenue diversification and also continued pipeline progress on global accounts both in AOR Animal origin Free Portfolio and the cdmo.
Construction work for the commercial scale fermentation facility in Vizag is progressing well and is along the plan and we expect the phase one capacity to be operational by the end of 2026. Now I’d like to request Ms. Soumya Chawa to share key updates on our Affordable Medicines Portfolio.
Soumya Chava — ED Generics and Commercial
Thank you. Revenue from the Affordable Medicines Division formally generated at 1,223 crores in Q4 with the momentum sustained on an absolute basis, though the growth has been slightly moderated. For the full year, the division delivered 4,733 stores in revenue reflecting a strong 18% growth. FY26 growth was driven by higher volumes across ARV and Oncology portfolios along with strong traction from recent launches. In developed markets, we maintained a consistent supply track record despite global supply chain challenges.
However, increasing geopolitical disruptions may impact raw material availability and logistics, potentially creating a near term pressure on OTIF performance across the industry. That said, the business outlook remains steady. We continue to focus on optimized capacity allocation, improved supply efficiency, ramp up of new product launches, integrated CMO opportunities and expanding our footprint across developed and emerging markets, particularly in the non ARV segments. The oral solid facility expansion is progressing well with formulation capacity increased by 20% in FY26 to 12 billion units.
On the regulatory front, we have filed a cumulative 92 DMFs to date. In developed markets, we filed 7 dossiers and received 6 approvals FY26 taking the total to 94 product filings cumulative. Thank you
Satyanarayana Chava — Founder and Chief Executive Officer
Thanks Vishnu Soumya for the overview of generics and CDMO business segments. On RD front, overall R D spending to sales for FY26 was at 4.1% increased by 10% year on year including our expenditure on cell and gene therapy space. The spend is in line and we expect a similar percentage going into the next year as well. We continue to invest in portfolio focusing on product complexity, scale and sustainable technology platforms. Let me share a brief on our quality and ESG side as well. In 2026 the company underwent close to 132 quality audits by multiple drug recruited agencies and several customers.
Company has successfully passed audit inspections without any critical findings. We remain committed to advancing quality systems, meeting IAS compliance standards from clients and global regulators as well. Besides, we continue to advance on our EHS ESD initiatives which is getting sustained recognition from global rating agencies. You may refer to our IR presentation for more details. To conclude, our business model has proven as resilient and we remain well positioned to execute on our growth strategy ahead.
We will continue to focus on deepening strategic partnerships on integrated capabilities, strengthening technology platforms and ecosystems, advancing pipeline as well as focused investment into capacity creation that will sustain our success in the long term. I would like to again recognize the commitment and efforts of our dedicated teams towards strong R and D and operational execution enabling continuous transformation of our company. Now I request Mr. Ravikumar, ED and CFO to share overall financial highlights.
V. V. Ravi Kumar — Executive Director and Chief Financial Officer
Thank you Dr. Sathya. A very warm welcome to everyone on quarter four and full year FY26 earning call. Let me quickly take out through the highlights. Total income from operations is 6813 crores with a growth of 23%. For the quarter four we are at 1812 crores with a 5% growth. Despite the ongoing macroeconomic challenges, we have continued to see the high level of demand in our integrated offerings. Gross margin maintained at healthy level of 60% 60.4% and for quarter four it is at 61.4% mainly due to better product mix and some of the improved process improvement efforts.
EBITDA for the year stands at 1826 crores with the 26.8% margin which is well in line with our broader outlook for the quarter four. EBITDA reported by 23 crores with a margin of 28.9% due to strong operating leverage. Profit after tax for the year 8089 crores with a growth of 148% and quarter four is at to 79 crores. ROC is around 17.7% improved from 9.7% for the previous year. On the CAPEX front which is a key enabler for Loras for future growth and also a key focus for the organization now and going forward, we invested close to 335 crores for the quarter and 1070 crores for the full year.
More than 75% investment, expansion of CDMO and CMO capability rest in common infrastructure like ETP and maintenance. Our net Debt stood at 2.2285 crores due to and EBITDA. Debt by EBITDA is 1.25 versus 2.3 last year on the back of strong internal cash flows. Of course, though there is a debt increase in the quarter four still we are at a 1.25 debt EBITDA level. On the capital allocation front, our strategy remains unchanged and we will continue to prioritize investment into high value business segments to drive near and long term growth and returns for our shareholders.
You can refer our IR presentations for more details. And last, actually because of this crisis today we are able to manage our supply chain and we don’t have any supply disruptions for this quarter and we are expecting not to have any disruptions even till the end of June. With this I would request the moderator to open the lines for Q and A.
Questions and Answers:
Operator
Thank you. 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 two Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Sajal Kapoor from Antifragile Thinking. Please go ahead.
Sajal Kapoor
Yeah hi good evening team and thanks for taking my questions. And Dr. Satya as we commission and scale the upcoming Vizag 400 KL fermentation, what could be the single biggest source of yield variability from things such as contamination, oxygen transfer, restrain stability to even downstream recovery. And how tight do we expect the batch to batch variance when we actually commercialize that 400 kilo capacity?
Satyanarayana Chava
I think the initial batches what we’re going to take up in our expanded fermentation capacity is non pharmaceutical non food also it is mostly industrial chemicals, surfactants and then polymers. So where the titer is very very high and we don’t see the biggest challenge in any fermentation, you know, contamination and we don’t have a very long tedious downstream processing for the products. What we intend to manufacture in that facility wouldn’t Expect any challenges in downstream manufacturing.
Sajan.
Sajal Kapoor
Right. Okay. So just a quick follow up on that one. So clearly we are moving into the world of material sciences and biomaterials. I mean what does it mean for the steady state economic model for Laurus? I mean in terms of utilization yields, pricing structure and customer construction concentration. And which of these kind of variables are most sensitive in achieving the aspirational return threshold?
Satyanarayana Chava
The products what are moving to Vizag are from our Bangalore facility. So the commercials are achieved. And we made those products in our 45,000 liters fermentation fermenters. And then those are moving to 110,000 liters fermenters here. We believe that is the optimum size for these products what we are making. So this unit will see the early commercial stage production for those products. So we have crossed multiple lines of multiple gates, I would say in the commercialization of those products.
The uncertainty of the commercial success of those product is very, very less. So we have very good visibility. Once those products are commercialized we have to move to much bigger facility. And that is not the commercial size of the products what we intend to initially manufacture.
Sajal Kapoor
Sure, that’s helpful, Dr. Satya. And my second question is. So beyond the R2 at Bengaluru and this 400 KL at Vizag. Looking at the horizon beyond 2030, if I may, is biotech getting the attention it truly deserves? Because that’s the sort of coming wave. We may or may not accept it publicly along with the AI of course. So just to understand the capex better, I mean how much of what we are planning over the next few years, say three to five years is already backed by committed or highly visible demand versus any speculative capacity we may be building ahead of demand.
Satyanarayana Chava
Our biotech initiatives spread across many things. Biocatalysis, enzyme manufacturing, animal origin, free cell culture ingredients, precision fermentation, cell therapy, gene therapy, fermentation of pharmaceutical intermediates. So what we are talking right now in our unit 4 bio expansion at Vizag is only for non pharmaceutical one. Where as you are aware, we also investing in our gene therapy and ADC manufacturing facility in Hyderabad and our subsidiary in Bombay. They’re also investing further in our cell therapy CAR T manufacturing.
So there are multiple fronts going on, Sajidji.
Sajal Kapoor
Sure, sure. Just a quick follow up on that one. Dr. Satya. For the capacities we commissioned about let’s say two, three years back. Where is the utilization level at the moment on those capacities versus you know, what you or the team initially expected. Are we broadly in line with the Utilization for the capacities that went live about two years, three years back or are we below that aspirational threshold or above that threshold?
Satyanarayana Chava
In R2, our 4 into 45,000 lit fermenters are fully occupied. That is the reason we quickly expanded capacity in Vizag. And we expect this capacity, current capacity we expect to manufacture two products and once the commercialization happens and the first commercial production is delivered, we expect to expand there itself to 1 million liters. There we have space and one product is downstream without any chemical operations. The one product we have to do some chemical operations that also will be done by us.
So we don’t see any capacity unutilization challenges for the plant which will go online by end of this year.
Sajal Kapoor
Super. Super. Thank you so much. I’ll rejoin the queue. Dr. Sabha, thank you.
Operator
Thank you. The next question comes from the line of Bharat Siri Purapu from Quest for Value Capital. Please go ahead.
Bharat Sheth
Hi sir. So if you see about the Indian CDMO landscape, some of the CDMOs are getting impacted due to inventory destocking. So this is common scenario because CDMOs are dependent on ordering pattern of innovator. So more we are concentrated on few products with more risk of destocking. So can we say that do we have enough number of CDMO commercial products to say that we do not have product concentration risk and we are insulated from this inventory stock market.
Satyanarayana Chava
In the last 18 months we delivered three APIs for commercial and those have patent life of several years. So they’re very early in their commercial phase. And based on indications from our partners they gave a very clear forecast for next several years. And we don’t see any stocking destocking challenges for these molecules at this point of time.
Bharat Sheth
So we don’t have any product concentration like on single product or two, three products contributing more in the tdmo. Basically that’s what you’re saying?
Satyanarayana Chava
Yeah, that’s what it is. Thank you.
Bharat Sheth
And my second question is like if you see our yearly performance of our results. So last year our EBITDA margin was 20% and this year is around 26%. So there is an increase of around 600 basis points. And majority of this increase is coming from gross margin improvement because our gross margins have improved from 55% last year to 60%. So we did not see the operating leverage paying out significantly yet. So is it right to assume that the operating leverage is going to play significantly over the next two years?
Satyanarayana Chava
We expect so. Bharat. So your point is very valid. So operational come in. See we keep on Expanding capacities. So we are on the at the border of leverage or deleverage. So but next year we expect some operational leverage will come and see as you observe that EBITDA margins are going up. Even look at 4/4 of the FY26 EBITDA margin continuously kept improving. So if you look at the Q4 it is almost at the 29% EBITDA margin.
Bharat Sheth
Thank you. Thank you. That’s it from my side. Thank you very much. Bye. Thank you.
Operator
Thank you. The next question comes from the line of Chirag Shah from White Pine Investment Management. Please go ahead.
Chirag Shah
Yeah, thank you for the opportunity and the congratulations for good results. Sir, I have three questions. The question one on continuing the CDMO side. So if you can indicate that when you CDMO transitions to cmo, how does the gross margin and EBITDA margin interplay happen? Because. So that’s question one. Question two on the ARB business, anything on the pricing that you would like to comment which has helped you on margin side or utilization side? And I come to the question based on your response.
Satyanarayana Chava
See, I would like to clarify on the two terminology what we use CDMO and cmo. CDMO is proprietary brands, one customer, one product and some development is also included when we say cmo. CMO is a generic fully integrated projects where we make API and partners to a generic customer. So when we are seeing our CDMO revenues, we are not including any CMO revenues coming from generic products.
Operator
You’re not, you’re not audible. Please use your handset on the hand. Yes, go ahead please.
Chirag Shah
Hello?
Satyanarayana Chava
Yeah,
Chirag Shah
Sir, I was more referring to. I was more referring to the development phase. How does the margin trajectory between gross and EBITDA margin play out? If you can educate us on that.
Satyanarayana Chava
If we are not publishing our EBITDA and gross margins segment wise so that we don’t want to do that and the second maybe on every RV pricing, ARV pricing broadly were constant during the financial year we improved our sales. We used to say 2,500 plus R means 200 but we did 2,800. That was because of a full utilization of our ARV assets.
V. V. Ravi Kumar
Gross margin improvement is on account of raw material price softening and process improvements.
Chirag Shah
Okay. Would it be fair to make an assumption that when you move from development to commercials, while your gross margin would be lower in commercial operating leverage will ensure that your EBITDA margins are similar to the development phase? Is it a right statement?
Satyanarayana Chava
I would say whether it is development or commercial, in our opinion, gross margins will remain similar bigger, but we make More profit in commercial rather than development because development we employ more people during R and D tech transfer and all. So I would say whether development of commercial NC programs will have similar gross margins,
Chirag Shah
Will have similar gross margin and commercials would have a higher EBITDA margin because of more volumes and operating. And just to follow up on this, so you indicated three projects have moved from development to commercials. How should we look at next two years of CDMO space? Given the stupendous growth that we have seen, can we maintain that kind of journey? Given the pipeline that you have and or what are the key monetary that you would like to highlight from your perspective?
Satyanarayana Chava
Krishna would like to answer this question. Yeah,
Krishna Chaitanya Chava
I think while we are not giving any indicative numbers, we expect post positive growth in the CDMO in the coming years as well.
Chirag Shah
Okay. Is it what I was referring to? Is it hinging on one or three large projects or it is more even spread so that concentration risk doesn’t play out that significantly? I was more referring to that.
Krishna Chaitanya Chava
At this point in time, given the visibility that we have, we’re not expecting a concentration risk or heavy reliance on one sing program. So yeah, in. In from current standpoint, I think we are fairly well de risked from a concentration perspective.
Chirag Shah
Okay, thank you very much.
Operator
Thank you. The next question comes from the line of mehul Panjwani from 40 cents. Please go ahead.
Mehul Panjwani
Hello sir. Thank you so much for the opportunity. I’m audible.
Krishna Chaitanya Chava
Yes, you’re audible.
Mehul Panjwani
Okay, sir, I am. My first question is about CDMO pipeline. Out of the expanding CDMO pipeline, how much is expected to convert into conversional revenues in FY27 and what is the revenue visibility from late stage molecules?
Krishna Chaitanya Chava
That’s probably a. We’re unfortunately not in a position to give you like very specifics in terms of what programs are we working on. But with that being said, there’s multiple late stage programs that we are currently involved in. But as you’re aware, given the clinical nature of the compounds, we can’t necessarily accurately put in and say that FY27 will be the commercialization of that molecule or not. But the pipeline is quite robust and we’re confident in continuing to post growing numbers in the CDMO side.
Mehul Panjwani
Right, sir. My second question is about the margins. How sustainable are the current 29% EBITDA margins and how much is driven by mixed versus temporary operating leverage?
Satyanarayana Chava
We are very confident on maintaining or improving this EBITDA margin in FA27. We have. We. We are comfortable in maintaining that. Yeah.
Mehul Panjwani
My last question. You know, this is just a Not a very framed question but kind of it is going to give us some visibility on the growth trajectory of Loras in CDMO business. So when would be lotus identified as a CDMO company and not as a, you know, all categories company? Kind of
Satyanarayana Chava
I think you have to say what is the revenue coming from CDO segment determines how much exposure is to CDMO business. Rather than see we are at one third of revenue comes to CDMO business. But in sizable 2004 there are not many companies with 2004 CDMO revenues which they, which they are well recognized CDMO partner companies. So it is up to see how much reactor capacity, how much R and D capacity, how many programs, what is the size of the program. Earlier people used to ask us how many clinical programs you have.
Say clinical programs may confuse everyone. One program may give $500,000, one program may give $50 million. So giving a number of programs may not give you any perspective. The question is, is Lara say strategic partner or tactical partner to customers? So we are a strategic partner for many big pharma right now. So we have a flow of RFP commercial, early stage, mid stage, late stage commercial. So we have a robust pipeline. That much we can tell you. It is up to the market to gauge how much revenue and who is doing well in cdmo.
Mehul Panjwani
Right. Sir, I obviously am with you in trends that we are bigger than quite of quite a few companies in the CDMO space. But when we compare ourselves with ourselves what would be that year inflection point
Satyanarayana Chava
One good thing we are happy we are doing. Most of our clinical programs are APIs. So we are not doing RSMs or early stage. Either we do advanced intermediates or APIs. So that way the sustainability of our customers and our offerings is much more longer than offering very early stage intermediates or.
Mehul Panjwani
This was very helpful sir, thank you so much and all the best.
Satyanarayana Chava
Thank you. Thank you.
Operator
The next question comes from the line of Abhijit, an individual investor. Please go ahead.
Abhijit K
Am I audible? My first question is what is the asset Turnover Currently,
Satyanarayana Chava
Ravi? 0.89. 0.9.
Abhijit K
Okay, so considering this growth for the year, I think overall CDMO business has grown 20% and it’s reached a good base at the moment. What is the territory going forward? Can we expect this growth to growth momentum to maintain or do you see some sort of lumpiness or not? Because as another analyst mentioned there are other CDMO companies which are talking about destocking and couple of variations in funding for alternative medicines from, you know. So keeping that in mind you’ve seen lumpiness in the earnings.
Satyanarayana Chava
If you compare year to year we expect a good growth in CDMO segment. There could be lumpiness quarter on quarter. But we don’t expect any challenges for us to record growth in FY27.
Abhijit K
Okay. And I think Mr. Ravikumar mentioned that your EBITDA margins have gone up because of operational changes in the input costs and other stuff softening. Right. But I have two questions on this regard now. Because of the geopolitical situation etc, do you see any challenges in the next few months going forward in the operating, you know, cost to go up because of the raw material prices etc.
Satyanarayana Chava
In Quarter 4 of FY26 some impact was there because of the solvent price increase. We will see some. But I can tell you our production hasn’t been impacted so far and we have enough visibility that in the next three months we don’t have any challenges of curtailing operation because of higher prices of solvents or the availability of solvents. There will be some pressure but as our mix is going operational going up, more capacity utilization, we will able to weather that challenge well.
Abhijit K
Okay, so with regards to this gross margins going up, the gross margins right now is 61.4%. So as and when the CDMO contribution of the business goes up, can we expect this to go substantially higher? I think this is the highest gross margin since the one off CDMO contract that happened in 21. Am I correct?
Satyanarayana Chava
We are very comfortable. Say we’ll maintain gross margin for sure. Despite our challenges on the solvent phase and all. We are confident.
Abhijit K
Okay, that’s good to know. And one last question. With regards to the peptides opportunity that is available, are you guys looking at the weight loss sector or are you looking at overall peptide revolution that is going around and is it like. Is it. Is it like the breakthrough is near term or is it like still substantially time away or etc. Just an insight please.
Satyanarayana Chava
Krishna, want to answer? Yeah,
Krishna Chaitanya Chava
We have a diving into too much details. We are currently working in several sectors in peptides including weight loss and a few other sectors. With that being said, there are some medium term opportunities that we are already collaborating on. And of course there’s several other opportunities that we are also in active discussions with. But as soon as we have something meaningful coming out of that investment, we will certainly make our partners aware of here.
Abhijit K
Okay, thank you so much. Congratulations on the great set of numbers. Thank you.
Operator
Thank you. The next question comes from the line of Tushar Manodhane from Motilal Oswal. Financial Services. Please go Ahead.
Tushar Manudhane
Thanks for the opportunity. Am I audible?
Krishna Chaitanya Chava
Yes sir.
Tushar Manudhane
So just on firstly this, if you could give the breakup of ARV business into API and formulations please.
Satyanarayana Chava
It is 2/3. 1/3, 2/3 API. 1/3 is roughly formulations. We are not giving exact. But it is broadly that 2/3. 1/3. Yeah.
Tushar Manudhane
Okay. So effectively just trying to understand the non ARV formulation business. Has that grown or declined for the quarter?
Satyanarayana Chava
Actually non ARV formulations is going up. Yes,
Tushar Manudhane
The growth number. So if. Correct me if I’m wrong. So 683 crores of ARV business for fourth quarter 26 effectively. And you’re saying 2 third is formulation which means 450 crores of formulation business. Is that the way to understand? No,
Satyanarayana Chava
No. Two thirds is API, one third is formulations. My answer was for the overall year I mentioned. So it is around that number. It may change 1 month, 1 quarter. But broadly 2/3 of ARU revenue comes from APSL and 1/3 comes from our own farming system sales.
Tushar Manudhane
Got it. And on the balance sheet side, how much would be the customer advances at the end of FY26?
V. V. Ravi Kumar
We not disposed specifically Kushar,
Tushar Manudhane
Has that increased compared to last year? Directly, if you could. While the annual report will disclose that. But
V. V. Ravi Kumar
Full year basis there is an increase.
Tushar Manudhane
Okay. And yeah, that’s it for my session. Thanks.
V. V. Ravi Kumar
Thank
Tushar Manudhane
You. Thank you.
Operator
Thank you. The next question comes from the line of Jeevan Patwa from Sahasra Capital. Please go ahead.
Jeevan Patwa
Yeah. Thank you sir. So congratulation. First one question on the CDMO side. So was there any revenue from the crop sense business in FY26?
Krishna Chaitanya Chava
Krishna? There has been some but very marginal. I would say there has been some.
Jeevan Patwa
Okay. And animal health is still I would say in a not too meaningful yet in the CDMO side or it is not now it is meaningful. So basically the context is FY27. Can we see meaningful contribution from crop science and animal health both
Krishna Chaitanya Chava
In the animal space within this year as well we’ve had some meaningful API shipments that we had undertaken. And in FY27 also we’ll see a good contribution from that space. But in the crop science segment I think we need a couple more financial years to really ramp that up. But we have a few ongoing projects that are in the registration phase or in the development phase. So yes.
Jeevan Patwa
Okay. And on the electronic side, one customer that we have, I think I understand it’s still in the development stage but they have got the breakthrough some months back. So any visibility on you know the kind of Shipment of the delivery from their side. Any contract have you signed with them?
Krishna Chaitanya Chava
We are in active discussion with them but as you rightly said it’s still under development phase and application phase. So it’s. It’ll take a few more quarters for us to see the actual demand outlook from them.
Jeevan Patwa
Perfect. And on the formulation side, one question on the formula side. So this the facility, new facility that’s coming up and going to commission in June. So that’s for the new CMO contract right? That we have the 3 billion tablet contract. Yeah, that’s
Satyanarayana Chava
You know, for an existing partner. Most of the capacity came online and we are using it commercially, not additional capacity.
Jeevan Patwa
So after we have the tertiary packaging capacity will be coming in June. Right.
V. V. Ravi Kumar
Most of the proposed CAPEX has been implemented and then started generating a revenue out of it in the back end of the year.
Jeevan Patwa
Okay. Okay. So basically the majority revenue will start from Q1.
V. V. Ravi Kumar
Yes.
Jeevan Patwa
Okay. Okay, perfect. Thanks a lot.
Operator
Thank you. The next question comes from the line of Venkat Velipali, an individual investor. Please go ahead.
Unidentified Participant
Okay, thank you. Good evening sir, my question is related to fermentation capacity. Given that we have acquired rich core in 2021, why are we not able to, I mean scale it up to 2 million. And if you are able to scale it up to 2 million what would be the revenue?
Satyanarayana Chava
Hello. See we thought we’ll expand to 2 million but we are doing in a phased manner. We have 250,000 liters right now. By end of this year another 400,000 liters will come and that facility can accommodate under 600,000. Overall we’re inching towards the number. See if you look at when we acquired them in 21 majority stake their revenues were about 50 crores. Okay. Now yeah, now they gone Significantly we are closer. 185, 184 Revenue with 3540 crore EBITDA levels now. So then significant improvement happened.
But creating capacity takes its own time. The R1 to R2 it took one year. R2 to R4 it took two years for us to create that capacity. So we are gauging the market dynamics there and we have interesting projects. I think we’ll update you as and when we have a significant information on that.
Unidentified Participant
Okay, thank you. One more question. It’s related to Amplia Therapeutics. I’m not sure if you are aware that they stopped this Amplicity project. Are we like supplying any API to the project?
Krishna Chaitanya Chava
Any customer related topics? We don’t necessarily want to comment from our end. So sorry I. Unfortunately because of Confidentiality terms. We are not able to comment.
Unidentified Participant
Okay, thank you. Thank you sir. All the best.
Krishna Chaitanya Chava
Thank you.
Operator
The next question comes from the line of Vihan Bagri from Omayo Advisors. Please go ahead.
Unidentified Participant
Yeah, thank you for the opportunity.
Operator
I’m sorry to interrupt. You’re not quite audible.
Unidentified Participant
Am I audible now? Better, yeah. So I actually had a few questions the first one being what will be the capex and gross debt outlook for FY27 and 28? As we had indicated earlier, a thousand crore capex and what can be the effective tax rate considered for the year?
V. V. Ravi Kumar
Effective tax rate will be around 25%. 25 to 26% depends on the standalone is definitely 25% then CAPEX guidance is around 3000 crores in two years time.
Satyanarayana Chava
Although we said thousand crores earlier. Now depending on the prospects, what we need capacity and what projects in front of us. We are increasing our capex spend there and we expect to spend around 3000 crores in the next two years.
Unidentified Participant
Okay. And regarding the gross debt outlook for the next two years, the gross debt outlook
V. V. Ravi Kumar
Debt maybe it may slightly go up in the current year FY27 but the debt by EBITDA should come maybe maintain at the similar levels or maybe softening from the current level.
Unidentified Participant
Okay, thank you so much sir.
V. V. Ravi Kumar
Thank you.
Operator
The next question comes from the line of Vivek Agarwal from Citigroup. Please go ahead.
Vivek Agrawal
Thanks for the opportunity. One question on affordable medicine It’s a generic businesses all put together this year you have done well with around 18% kind of growth. Just want to understand what’s your outlook let’s say for 27 and 28 what kind of the growth that you are looking up. Thank you.
Soumya Chava
So for the next year also we have our order book pretty much in place so we will continue to reflect a strong growth in the next year as well.
Vivek Agrawal
In terms of is it possible to say that it can grow in the double digit as well in the next year or
V. V. Ravi Kumar
Vivek, you know we don’t want to give any quantity guidance. Yeah
Soumya Chava
But we will not be able to comment on the percentage over here.
Vivek Agrawal
Perfect. No problem at all. So in cdmo right. So the pipeline looks, it’s shaping up well. So is it possible for you to just help us understand how the pipeline of products is at an advanced stage and let’s say three etc. So that is looking like at this point of time and secondly in FY27 are you expecting any new product that is getting commercialized by your partners? Thank you.
Krishna Chaitanya Chava
So while we’re not giving concrete numbers on different phase wise split. We have several exciting programs that are late phase programs as I mentioned. Given the clinical nature of these programs it’s difficult to predict when and how it will be commercialized. But within the visibility that we have, we expect some of the programs that we’re working on to get commercialized and some of the projections that we’ve had for volumes from our partners have been along those lines. Yeah,
Vivek Agrawal
Perfect. And just one last question. On the CDMO right out of around the 1900 crore kind of revenue. So are you comfortable sharing the share of revenue that is coming from the projects which are still in the development or the share of revenue that is coming from the product which are commercialized by our customers?
V. V. Ravi Kumar
We are not disclosing. We banked on that.
Vivek Agrawal
No problem. Thank you.
Operator
Thank you. The next question comes from the line of forum Parekh from Bob Capital markets. Please go ahead.
Foram Parekh
Thank you for the opportunity. Could you please disclose or highlight on the peptide capacity, the dedicated peptide capacity and what would be the capex allotted for the peptides?
Satyanarayana Chava
We are building a large capacity for peptides and we have several programs as Krishna mentioned. But we don’t want to comment on how many tons capacity we are creating or how many projects we have right now. We don’t want to comment at this juncture.
Foram Parekh
Okay. And would you be comfortable disclosing the capex dedicated towards the peptide program?
Satyanarayana Chava
I can only say it is large capex. I don’t want to give a specific number.
Foram Parekh
Okay, My second question is on the CDMO side in the previous con calls you had alluded that you envisaged CDMO contribution going towards 50% of the total sales. So as per your internal assessment and now that the CDMO pie is growing well and we have strong order books so how soon do you see as per the internal assessment 50% number being achievable?
Satyanarayana Chava
See we said the two things. One is we’ll go to 50%. We also said by 2030. Yeah.
Foram Parekh
Oh okay.
Soumya Chava
Okay.
Foram Parekh
And last question if I may. Now that we have increased our capex from thousand crores annually to 1500 crores annually so how do you see the return ratios shaping out and do we still expect operational leverage with increase in capex?
Satyanarayana Chava
Most of the capex what we’re doing is growth capex. See we are not at least now we have visibility. We are not putting capex and hoping customer will come and give projects. We are not doing that. So mostly we have visibility which product, which customer, how much we are going to make in these new capacities which will come online.
Foram Parekh
Sure. And just last question. Can you please stop on the arb to non arv split for FY27? Right now it’s 40%. So do you still see non arv or arv 5 shrinking from this 40% or it will remain at 40% around
Satyanarayana Chava
Quantum wise we did 2800 crores arv. That will remain constant. It will be in that number. Around that number. But percentages. It will go down. It will go down. Yeah,
Foram Parekh
Sure. Thank you. Thanks a lot. Yeah,
Satyanarayana Chava
Thank you. Thank you.
Operator
The next question comes from the line of Rahul Bhardwaj, an individual investor. Please go ahead.
Rahul Bhardwaj
Thank you so much for the opportunity. Dr. Sathya, if we go back about five, six years. You know the split of the revenue mix was more inclined towards arv. And then you know over the last couple of years we’ve increased our footprint on the CDMO business. Can you throw some colors on? How do you foresee the mix will be if we look out next five to 10 years? That will be my first question. And my second question will be. At some point you know you may pass on the reins to someone else. Do you have a wish list where you would like to see loras, you know before you decide to hand over the reins to someone else?
So that will be my two questions. Thank you again.
Satyanarayana Chava
I will be able to answer the first question easily. The first question is. See our AI. We are as you mentioned our. Our absolute quantum wise arv revenues were very. I would say around 2500 plus RM store. Now I would say 25 plus ARM is 300. Because we did 2,800 crores. This one after 26 by FY30 we expect arv cdmo revenues in general will be 50% of our overall sales. And the ARV percentage will come down significantly. While the ARV sales remain constant. But percentage contribution will come down significantly.
And the second question is. See right now the LARIS is engaged in lot of modalities in small molecule. Our focus is large volume generic KPIs, integrated CMI opportunities and doing CDMO for clinical programs in human health and animal health. And also working with discovery based companies in crop sciences. Not generic crop science molecules. That’s the focus when it comes to biology. As I mentioned to Mr. Sajal Kapoor’s question also. So we have investments made in cell culture, precision, fermentation, enzymes, biocatalysis, cell therapy, gene therapy, ADCs and all.
So our investments are in multiple lines. And that’s where my focus is currently and the rest of the businesses are handled by Krishna Soumya and other team members. So my focus is going on new modalities.
Rahul Bhardwaj
Thank you so much and wishing you very good luck for the future. Thank you again. Bye.
Operator
Thank you. The next question comes from the line of Bharat Siri Purapu from Quest for Value Capital. Please go ahead.
Bharat Sheth
Thanks for the follow up. Dr. Chawa, regarding this new greenfield CAPEX of 500 acres in Ashtarpuram. May know when can we expect this new greenfield capex coming online?
Satyanarayana Chava
Able to give you more color on that? Maybe in the next quarter. Bharat. Yeah. Okay, thank you.
Operator
Thank you. The next question comes from the line of Sajal Kapoor from Anti Fragile Thinking. Please go ahead.
Sajal Kapoor
Yeah, thanks for the follow up, Dr. Satya. Many, many CDMOs do well at micro or pilot scale but fail to manufacture a multi ton batch with consistency. So the key word here is consistency in that context. For the recent CDMO programs that successfully moved from lab or pilot to commercial scale, what percentage met target yield and quality spec in the first three commercial batches? And how predictable is the scale up process we have today? Going from few kilos to 500 kilos and more depending on the molecule of course.
Satyanarayana Chava
Why laros is investing in large capacities well in advance of commercial launches. Nowadays big pharma wants the validation engineering batches at the commercial scale. They don’t want to have any uncertainties of scale up or moving from one plant to another plant for lack of capacities. So all the commercializations what we have done in the last two years were scaled up. Validation is done at the same scale, validation done in the same line of equipment. So there are no surprises. So when we did validation, we do the same equipment train for commercialization, same batch size, same facility and all.
So we have. Fortunately we haven’t had any challenges so far.
Sajal Kapoor
Perfect, perfect. Thank you so much for that clarification. Thank you.
Operator
Thank you. The next question comes from the line of Yash Lahoti, an individual investor. Please go ahead.
Chirag Shah
Hello. My question is the revenues from lording collaboration, when will they start kicking in?
Krishna Chaitanya Chava
Yeah, this is again related to the OLED opportunity that I talked about in the Q and A session. We’ll be able to concretely comment on this in a couple of quarters, but at this moment in time it’s difficult to put a finger on the actual numbers.
Mehul Panjwani
Okay, all right, thank you.
Operator
Thank you. The next question comes from the line of Venkat, an individual investor. Please go ahead.
Unidentified Participant
Hi sir. Thank you for the opportunity. I have one question I Don’t have complete understanding on the pharma part of it. My question was yeah, with AI it is disrupting multiple industries. I want to understand in the discovery phase or do you see any challenges in how discovery is getting evolved with. How is discovery phase getting impacted because of a. Do you see any challenges in that front?
Krishna Chaitanya Chava
So at a high level within the CDMO space, we are not involved in the discovery side of things for any partners. But in speaking from a general standpoint, there’s certainly a lot of AI being leveraged in the discovery space. So what of that is some of the discovery molecules, the pipeline generation is significantly faster. But also interestingly, given that these molecules are designed by AI, they tend to be also more complex in terms of structures or the synthesis itself. Right. So yes, there’s certainly AI being leveraged globally, but given that we are not in the discovery space, that’s not something that we typically look at.
Unidentified Participant
Thank you. And also, thank you. And also do you see any disruptions in the day to day standard operating of process in general? Do you see any other companies leveraging it differently or something? I want to understand the application in the industry itself, not may not be limited to Lawrence as a general channel process itself.
Krishna Chaitanya Chava
I mean we, there are several, you know, at least what we are aware of. There are several companies that are leveraging it, you know, from especially in the discovery space in designing molecules and predicting some of their profiles. Yeah, there’s certainly quite a lot of interesting publications that also been put out there. Yeah, this certainly being leveraged extensively across the industry.
Unidentified Participant
Okay. Yeah. I think as you are mostly in the manufacturing part of it, we don’t see a risk. Can I put, can I rephrase it this way or. Yes,
Krishna Chaitanya Chava
That’s correct. To say our, you know, Swiss come AI or you know, impact of it is minimal, if any.
Unidentified Participant
Yeah,
Unidentified Participant
Got it. Thank you.
Operator
Thank you. The next question comes from the line of Tushar Manudane from Motilal Oswal Financial Services. Please go ahead.
Tushar Manudhane
Thanks for the opportunity again. So on the non ARV formulation side, there has been decent growth for full year 26 compared to 20. So what kind of outlook can we expect for the coming year? Either of the new launches or the scale up of the existing.
Soumya Chava
So for the non ARB formulations we expect to see growth
Payal Shah
From existing products.
Soumya Chava
We will be utilizing the capacities to ramp up our formulation units.
Tushar Manudhane
But it was a sizable jump say in FY 26 compared to 25. So that momentum will succeed in 27 as well.
Soumya Chava
There is a momentum definitely compared to 26 to 27 as well.
Operator
Thank you, ladies and gentlemen. That was the last question for today. I would now like to hand the conference over to the management for the closing remarks.
Satyanarayana Chava
Thank you, all the stakeholders, and for your insightful questions. And good evening, everyone. Thank you.
Operator
Thank you, sir. Ladies and gentlemen, on behalf of Loris Labs, that concludes this conference call. Thank you for joining us. And you may now disconnect your lines.