NGL FINE-CHEM LTD (NSE: NGLFINE) Q4 2025 Earnings Call dated May. 26, 2025
Corporate Participants:
Unidentified Speaker
Rahul Nachane — Managing Director
Rajesh Lawande — Whole-Time Director and Chief Financial Office
Analysts:
Unidentified Participant
Abhishek Mehra — Analyst
Ankit Minocha — Analyst
Dhwanil Desai — Analyst
Ishan Thakkar — Analyst
Ankit Gupta — Analyst
Rohit — Analyst
Shivaji Mehta — Analyst
Presentation:
operator
Ladies and gentlemen, welcome to the NGL Fine Chem Limited Q4FY25 Erling Conference Call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask question at the end of today’s presentation. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your Touchton phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Abhishek Mehra from TIL Advisors. Thank you. And over to you sir.
Abhishek Mehra — Analyst
Thank you. Dio. Good morning everyone and thank you for joining this Q4 and FY25 earnings conference for NBL Finecamp Limited. The results and investor updates have been uploaded on the stock exchanges to take us through the results of this quarter and answer your questions. We have with us today Mr. Rahul Najnay, Managing Director, Mr. Rajesh Rawande, full time Director and Chief Financial Officer. We’ll be starting the call with a brief overview of the financial performance which will then be followed by the Q and A session. I would like to remind you that everything said in this call reflecting any outlook for the future which can be concluded as a forward looking statement must be viewed in conjunction with the uncertainties and risks that the company faces.
These uncertainties and risks are included but not limited to what we’ve mentioned in our annual report. With that said, I’ll now hand over the call to Mr. Rahul. Over to you sir.
Rahul Nachane — Managing Director
Thank you, Abhishek. Good morning ladies and gentlemen. On behalf of NGL Fine Chem Ltd. I welcome you all to our Q4 and FYI 25 earnings call. Thank you for joining us today. Let me begin by providing an overview of our financial performance for the quarter and full year before moving to operational highlights and our outlook for the coming period. The operating environment in Q4. 25 remained challenging as anticipated in our previous guidance. For the quarter ended March 25, revenue from operations stood at 94.97 crores representing a sequential increase of 6.6% over a Q3 FY25 though it was a 4.8% decline year on year.
For the full year FY25, we achieved revenue from operations of 368.26 crore and 8.7% increase over FY24 reflecting our resilience in a subdued market environment. Our EBITDA for Q4.25 was 6.32 crores of 24% sequentially but lower by 60% compared to the same period last year, the EBITDA margin for the quarter was 6.7%, an improvement of 93 basis points over Q3FY25 but down 921 basis points year on year. For FY25, EBITDA was 33.87 crore with a margin of 9.2%, reflecting a contraction of 6 to 53 basis points from the previous year. This margin compression is attributable to heightened competition, subdued realizations and increased operating expenses.
Profit after tax for Q4FY25 stood at 0.54 crores compared to 1.28 crores in Q3FY25 and 12.33 crores in Q4FY24. For the full year, profit of the tax was 21.12 crores, down 49% from 41.32 crores in FY24, mirroring the challenging market dynamics Turning to our operational performance, demand across our product portfolio remains subdued during the quarter, compounded by the increase of new capacities both within India and internationally over recent years. This has resulted in heightened competition, exerting further reflection on realization and profitability. Geopolitical tension between India and Pakistan as well as ongoing issues surrounding currency availability in African markets have significantly impacted our business in those regions.
These factors have collectively contributed to a difficult business environment. Despite these headwinds, we are pleased to report the successful commercialization of phase one of our CapEx project during the quarter which includes one clean room and associated utilities. Validation batches are underway and we have initiated the data gathering and filing process as part of our regulatory compliance efforts. Looking ahead, uncertainty persists regarding the duration of the recent down cycle. While the operating environment remains testing, we are steadfast in executing our long term strategic initiatives. We remain committed to completing phase two of the KFits project within the previously communicated time frame, though now we anticipate a modest cost overrun with a total outlay estimated at approximately 160 crores.
Completion is targeted for Q3 of the current financial year with meaningful contributions expected from end of FY27 onwards. The Cambridge will be financed towards a 60:40 net equity structure. Diverse education into related markets remains a strategic priority, offering the potential for improved profitability amid limited competition. We continue to pursue our long term strategies and are confident of a return to growth as market conditions stabilize. In closing, I would thank our employees, customers, partners and shareholders for their continued support and commitment during these challenging times. We remain focused on operational excellence, prudent capital allocation and creating sustainable value for all Stakeholders, we are now open for questions.
Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handset while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. First question is from the line of Ankit Minocha from Adezy Ventures family office. Please go ahead.
Ankit Minocha
Hi, good morning. My first question is with regard to the current margins. I believe there’s the mid single digit EBITDA margins that we’re kind of currently having versus usually the mid double digit margins. I understand there’s a pain point in the cycle, but do we see by when we could kind of return to see a more normalized margin trajectory of double digit plus margins?
Rahul Nachane
Yeah. This is your only question or any other questions also you have planned?
Ankit Minocha
I have other questions. Should I ask them right now?
Rahul Nachane
Yeah, yeah, if you ask all the questions and I’ll be able to answer.
Ankit Minocha
Sure, sure, sure. The second part of it was that I was reading about your foray into regulated markets and the associated CapEx. I mean if as investors we wish to be a part of the NGL journey, at least till it becomes a regulated market player, what kind of time frame are we looking at? Where in say a large constituent of your sales could be then coming from regulated markets? And my final question was with regard to the lowest in China tariffs, what is the effect of the current tariffs configuring the capacity in China on the product pricing for you in your markets and what would this mean for the future?
Rahul Nachane
Yeah, thank you for your question. With regard to margins, the main issue right now is that there is a substantial over capacity in the industry and that has resulted in our supply and demand mismatch. And because the supply curvature has shifted, we are seeing lower prices and lower realizations all across the spectrum of our product range. The question as to how long this cycle will last is actually something which we are not able to really predict. But there is a substantial overcapacity created in the industry and until that gets absorbed, we will continue to face price pressures and therefore pressure on our margins.
With regard to our CapEx, which we are doing, we hope to have the plant ready by December this year and trial production will typically be starting along with validations around February next year. And the entire cycle of getting the documents up and running is close to about a year and half. Two years. So we have started the validations actually from April for the bank because we commissioned one clean room. But we anticipate sales, meaningful sales coming from this Capex only in roughly two years down the line. With regard to the US and China trade tariffs right now, currently we are not sending it into the US so there is no impact on our business as such.
But Pharma has not been covered in these trade tariffs yet. But we hope that that will be a positive sign because US companies are now actively thinking about having additional China plus one source. And this was quite evident during COVID But somewhere along the way, once China came back into manufacturing, the urgency had gone down. We are pretty hopeful that this will be a positive thing for us. I hope I have answered your questions.
Ankit Minocha
Yes, it pretty much does cover it. When we talk about the regulated market foray, I mean this, you think two years later, will the validation, the validation will be done and will there be a substantial part of our sales or will that still be a pretty small. Part of our sales? I mean even business development in these markets, etc, will it be a process which will be started afresh or is that something that could be already ongoing?
Rahul Nachane
So. Validation batches have already started. In fact, for the first product we will complete our validation batches by mid of June and then the second product will start. It’s roughly a six week cycle for carrying out the validations. So the whole process is started. So we anticipate this will take two years. So 25, 26 will basically go in this entire process of getting the registration and all done. So we anticipate meaningful sales coming from this only from 27 onwards.
Ankit Minocha
Understood. And do you face any pricing pressure currently in your African markets because of the canopy? Is there any dumping coming from the Chinese API players?
Rahul Nachane
China is very competitive right now. China has increased their capacities by a whole lot after Covid. So yeah, we are facing quite significant pressure.
Ankit Minocha
Thank you and all the best. Thanks.
Rahul Nachane
Yeah, thank you.
operator
Thank you. Next question is from the line of Dhuanil Desai from Turtle Capital. Please go ahead.
Dhwanil Desai
Hi, good morning sir. So my first question is when we started the year FY25, I think the demand was recovering from FY24 and then towards the second half I think we started again seeing pressure on demand and more competitive intensity. So you know what essentially changed, interim, if you can talk other than of course the demand kind of stagnating or going down. But in terms of competitive intensity, in last six to nine months something has changed or it is like more two, three Years back, what was kind of capacity put up that is coming, you know, with more competitive intensity and aggression.
And hence the knock on the realization that is one second, as we are saying that regulatory market scale up will take maybe a couple of years. So if the realization remains in the similar ways, as you know, the entire scenario is very uncertain. What are, what is it that we can do from our side to kind of increase profitability, you know, increase margins? Anything that we is getting on our side that we can do to kind of bring margin to a respectable level. And third question is, I think if I understand correctly, some of the three CEP then four DMS approvals that we had got.
One of the idea was that we can commercialize from our existing plants, you know, even before the new plant can come up and start operating. So on that front, you know, RV on codes, is there a potential to kind of, you know, increase contribution from this regulated market and hence kind of, you know, mitigate some of the challenges that we are facing in the rest of the world. And last question, sir. If I look at some of the peers listed peers, their commentary and numbers are pretty different than ours. So is it more of a, you know, product basket or specific market challenge? And you know, again, I understand they have formulation, API, bunch of things, but even within API, I think the scenario doesn’t look as challenging as we are saying.
So what is it? How should we read this entire thing? So these are the four questions. I have more, but I’ll come back in with you.
Rahul Nachane
Right, yeah. So as far as the competition is concerned, substantial capacity has been created not just in this API business, in the industry, not just in China, but also in India, also by quite a few people with regard to our regulatory sales. As I said earlier, it’s a two year, you know, registration scenario. And that process, it’s a process and we have already got that CEAP is approved last year. So some amount of sales have already started coming in from those approvals. Not significant yet, but we are building on that and we are targeting more customer acquisition.
So we hope that that part of the business will start building up over the next year or so. With regard to peers and the margins which they see, we, it’s, it’s, it’s. I really don’t know with whom you are benchmarking us.
Dhwanil Desai
I’m talking about Sequent. Sequent recently came out with numbers and they gave a commentary, you know, which was reasonably okay, okay.
Rahul Nachane
But then their API business is only 10% of their total turnover. So really not comparable to us we are definitely facing challenges now. Having accepted that that is a reality, we cannot sit down and say that okay, it’s something with the industry today we are working on our cost and trying to re engineer the entire process and see how we can drive margins again. So there is a lot of introspection going on being done, undertaken by us to get return back to margins in a better way. And these are things cycles which will probably take a few months.
But we are hopeful that in the next three to six months we will be able to implement significant process engineering and to drive better margins.
Dhwanil Desai
I have more questions but I’ll come. Back in the case. Thank you.
Rahul Nachane
Thank you.
operator
Next question is from the line of Ishan Thakkar from Ford Capital. Please go ahead.
Ishan Thakkar
Yeah, thank you for the opportunity. So we received a CEP certificate for three APIs last year. So what is the initial response being to these three APIs and what is the market size for this API in the European market? And do we have any long term contract in place of supplier these APIs? And my second question is we have filed five additional APIs so could you please share which five APIs have been filed so far? In addition could you please provide some insight into the scale of scale up of our European business?
Rahul Nachane
Yeah. So right now we have got CEP granted for three of our products and we have got DNF filings for five products. Now there are two parts to it. What happens is that most of the companies who are, who operate, they operate both in the US and Europe markets. So they like to have a single source of supply for both the markets. Now our filings and approvals in EU are in place but the ones for Europe have still not, I’m sorry ones for the US have still not gone through. That is what we are, we hope to pick a VAJAR by end of this year, calendar year.
Now when we are able to offer products for both the markets the customers acceptance level increases quite a bit. Now in terms of value the products which we are doing in Europe, the two scale of the three products which we have got is probably to the tune of about 35 crores. But when we look at the European and US market so that is what we are hoping for in breakthrough in the next year. And with regard to long term contracts we have onboarded five customers in the EU till now for our plots and were mixed some amount of business started.
It’s not very large right now but we hope that people start getting built up as you go along. Right here.
operator
Thank you. Next question is from the line of Madhur Rati from Countercyclical Investments. Please go ahead
Unidentified Participant
sir. Thank you for the opportunity. Sir. I wanted to understand what the margin pressure that we are facing in hq. So what would be from operating because of our new capacities coming in and what would be some realization? I would like sir, if you could give me the volume growth as well as realization for the whole year. So my second question would be considering us moving into EU and US market. So how is the competitive intention for the. Yeah. So I wanted to understand the competitive intensity in the EPI market. EPI products that we are filing in EU and US market and how do we plan to scale that up based on the chemistry and the engineering capability that we have spoken about was the market size for a single product or the combined three products that you got?
Rahul Nachane
So margins, you want to ask whether the decrease in margin is because of reduction in the price or it is because of increase in cost, right?
Unidentified Participant
Yes, sir.
Rahul Nachane
Yeah. So for us right now the margin erosion is completely by the pricing pressure. We don’t think that there’s been any significant cost increases as such in the current year. It’s mainly driven by lower realizations. Now though we have got about a 9% sales growth over the earlier year. Our volume growth is probably in the range of close to about 20%. And that is why though we have got a 20% volume growth we are looking at only a 9% revenue growth. And this is due to competitive intensity. Now the competitive intensity is not so much from India as it is from China.
And China has got in this sector. China has got 80%, 85% market share. Indian companies got barely a 10, 15% market share. And the entire competitive intensity which we are seeing is emerging from there. But having said that, we are working on our on our processes and our manufacturing study to see it to, you know, try to re engineer and bring margins back. Does that answer your question?
Unidentified Participant
Yes, sir. So but if I look at our income statement, sir, other expenses as well as employee benefit expenses have increased quite materially in relation to revenue. But when considering volume growth, they might be similar. So is there some percentage point impact from operating deleverage for this year?
Rahul Nachane
I have not really understood the question. Can you please rephrase it a little bit, please?
Unidentified Participant
Yes sir. If I look at our income statements, employee expenses as well as other expenses have increased by a decent amount. I think more than 20%. From that perspective there should be some operating deleverage impact that we have seen on our margin. So I’m trying to understand what would be the margin delta that has been reduced because of that?
Rahul Nachane
Right. So part of the increase in the salaries has been mainly because of hiring more because of this new project which we have done. So we have been hiring people for the new plant. But other than that there has not been any significant increase as such in operating cost. At least in percentage terms we are looking at more or less the same. Yeah, but yes, that’s right. There’s been a 1% increase in salary cost. But that’s as I said, mainly by the new project.
Unidentified Participant
Sir, on the new apr, you or the regulated market API competitive scenario. How is that?
Rahul Nachane
So again in that market it’s dominated by the Chinese companies. Most of the. For most of the customer, meaning pharma or companies over there, they have multiple Chinese suppliers. And that is where we are looking at our opportunity to put our foot in the door with a China plus one strategy.
Unidentified Participant
For the customers that we have onboarded since the ramp up. When we expect in FY27, the ramp up to Athensa, do we see a gradual ramp up of very fast utilization of our capacity happening throughout FY27 and 28? So it was just a broadband idea.
Rahul Nachane
It will be gradual. It won’t be all in one go because any supplier addition means that they only start diverting part of the requirement and then gradually take it to a higher level. So it will be gradual, it won’t be really abrupt or anything.
Unidentified Participant
Got it. Just a final question from Mancher. Where do we see our margin going over the next three to five years based on the regulated market, chemistry and engineering capabilities? What is the margin that we should expect conservatively and what is the volume growth or revenue growth can we expect for F.I.B. Initials?
Rahul Nachane
Yeah. So as a policy we don’t give guidance numbers on revenue or margins. So I am unable to answer that because the. And the market is also a little bit fluid right now. So I really can’t give you an exact number on that.
Unidentified Participant
If I consider regulated market and our Indian market and the non regulated markets, sir, what would be the margin delta on a steady state, if you can expect from the regulated market.
Rahul Nachane
There should be an additional at least 10 to 15% additional margin coming in.
Unidentified Participant
Thank you so much.
Rahul Nachane
Yeah, thank you.
operator
Thank you. Next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead.
Ankit Gupta
Thanks for the opportunity. You made a statement that most of the supplies to the EU customers happens, you know, for both the markets, US and Europe. Does it mean that our Europe supplies will also ramp up from the new plant? Only when we get U.S. fDA approval.
Rahul Nachane
No. So there are some customers who deal only in Europe. So with those customers we have been able to make a headway and as I said, we have onboarded five customers already in EU in the last year for whom the sales already have started and we hope to have a better year the current year. But at the same time there are some customers who operate in both the markets. So for those customers, unless we have the US facility also to get the entities. So but as I said, there are customers who do exclusive European business.
There are customers who do both. So the ones who are doing exclusively EU business, we are already trying to work with them.
Ankit Gupta
Sure, sure, sure. On the USFD approval side, any timeline that you’re looking for, you know, when we can get the approval from usfd.
Rahul Nachane
So we hope to file by end of this calendar year. So our initial filing is targeted in the October to December quarter and typically it takes about a year, year and a half to get that rule. So.
Ankit Gupta
European sales will substantially start only from US sales will substantially start only from FY28 on, which is what we can expect.
Rahul Nachane
That’s what I said. It will take two years for it to go through.
Ankit Gupta
Is that on the, you know, developing market side, our team markets, have you seen any of the capacities going out from any of the capacities going out from the market, both on the Indian and the Chinese competitors? And you know, have you seen some players, you know, shutting down their capacities given how the competition realizations and margins are in the market, in the market currently.
Rahul Nachane
Not yet. We hope that some sort of change will, will come in a little later. And normally what happens is that the fringe players or the people who have set up new capacities and who don’t have deep pockets normally start going out, but it’s not happened yet. I think the shakeout should come maybe towards the end of this year.
Ankit Gupta
Given, you know, we already have approvals for five DMS and three ceps for European markets. And you as you had indicated that we had around 30 crore sales in the European market last year in FY25. So FY26, can we expect that the regulated market sales can grow substantially even, you know, even if our new plant comes, let’s say by Q3, Q4 only or Q FY23 start ramping up substantially. So this year from our existing plant we can see, you know, substantial growth in our EU sales.
Rahul Nachane
Well, we don’t think it will be substantial. We are looking at generating about 25 to 30 crores in the current year from EU sales and that will gradually increase. It typically takes two years, three years to get clients to accept and change over. So going forward, yeah, it will be much larger. But this year we are not really banking on a large number.
Ankit Gupta
Sure. For the new plant, for the phase one of the new plant that we have commenced operation, what will be the fixed cost on the, you know, operating the plant on a monthly basis or a quarterly basis?
Rahul Nachane
Good question. We have actually commissioned only a small part right now. So I don’t think, meaning I don’t really anticipate a large search. We are probably looking at something like 40 to 50, like 1/3 sort of overhead over there.
Ankit Gupta
Okay. So substantial overheads will only start when you know the entire plan starts, let’s say by Q3 of this financial year.
Rahul Nachane
That’s right. That’s right. Yeah.
Ankit Gupta
Okay, thank you.
operator
Thank you. Next question is from the line of Shashank Agarwal from Shisco. Please go ahead.
Unidentified Participant
Hello. Good morning, sir. So I just have two questions. So one is regarding the margins in the regulatory business as compared to the unregulated business. And sir, like you are getting a plant approved by the FDA for the APIs. So are there plans to move into human APIs also?
Rahul Nachane
Yeah. So actually the margins we have already covered twice in this. So exactly what do you want to know about this margin?
Unidentified Participant
Like your theory that we have sequenced so they are only operating at 8 to 12% margin for the last three, four years. Whereas you have been doing for like 20, 22%. You have done historically. So I just wanted to know like is there a problem with that company or is it a structural problem in the business only?
Rahul Nachane
So they are not just an API company. Their API sales are probably just 10 or 15% of their total turnover. So I really don’t know what kind of cost structure they will have and I am unable to comment on that.
Unidentified Participant
And regarding the FDA approval for the plan.
Rahul Nachane
Yeah. So we are not intending to do any humanity, guys. Our objective is to just get the approvals for Web3 API right now.
Unidentified Participant
Okay, thank you.
operator
Thank you. Next question is from the line of mehul Panjani from 40 cents. Please go ahead.
Unidentified Participant
Thank you so much for the opportunity. Sir, I’m new to the company so I just want to ask this new plant which is coming up, what are we going to manufacture out of that facility?
Rahul Nachane
We are going to be manufacturing.
Unidentified Participant
Okay. So does our company manufacture only veterinary APIs or. We are also into.
Rahul Nachane
Veterinary APIs is 95% of our business.
Unidentified Participant
Okay. Okay. And sir, in One of the questions you answered that you know this market is 80% of the market share is with Chinese companies. So very referring to this veterinary API segment or something else you want to add or broader sector.
Rahul Nachane
I am Talking about Victory API only.
Unidentified Participant
Right answer. NGL has been as I understand NPS is quite a old organization. So from day one we are into Veterinary APIs and we were into other products earlier.
Rahul Nachane
We started as a human API company but we are doing vectory API since 1997 now so close to eight years now.
Unidentified Participant
Okay, okay, thank you so much. Thank you so much sir.
operator
Thank you. Next participant is from the line of Rohit from I thought pms. Please go ahead.
Rohit
Good morning sir. Just few follow ups to the question that I already asked sir. One clarification was this European market share which is at 35 crores this year are expecting 50 crores in this financial year. If I want ballpark expecting like 35 to go up to 50 crores that’s what your expectation is?
Rahul Nachane
No, no no. 25 to 30 crores in the current financial year is what we are expecting.
Rohit
Okay sir, my question is more from the financial point of view. So essentially we are seeing significant margin pressure and of course we are undergoing a capex also. A large part of half of it is almost done now. So do you expect any kind of equity raise also that we may need to sort of. To sort of tide over this time or just wanted to get your views on this.
Rahul Nachane
Yeah so there will be short term bumps because obviously with the new capacity going in so there will be a higher operating cost also. But we have just commissioned a very small portion of the plant right now. Yeah there will be increased operating costs, little bit pressure on the margins till the actual sales start coming. So yeah there we anticipate for at least between six to eight quarters the level of pressure.
Rohit
So sure, no I understand that but I was just checking does that warrant for us to raise any capital, equity or debt for us to tide over this time or do you think that’s not necessary?
Rahul Nachane
Debt to tied over meaning we are taking debt for financing this. Beyond that I have not understood what this is planned as a 60:40 debt equity ratio.
Rohit
Right, right, right. No I was asking beyond this debt for capex given that our business is going through this practical challenge right now so cash flows may be slightly challenged over the next six to eight quarter as you say. So would we need more debt or equity to sort of face the situation into question beyond the debt that we are having for this expansion?
Rahul Nachane
No, we are not planning on raising any more debt or equity beyond what is planned for the project.
Rohit
Okay. And sir, in terms of this excess supply that we have been seeing not just here but also globally, especially from China. So how do you see this? Given the fact that India we are backward integrated and we have, we are the lowest cost producer, are you seeing some sort of capacity rationalization that is happening at least in the Indian markets or that is yet to be seen.
Rahul Nachane
So we do anticipate that there will be some capacity rationalization. Either the capacity will be diverted towards some other kind of products or maybe some might just switch over to. From this industry to something else. But it’s not happened yet. We anticipate that it takes. It’s a cycle which is going on. So it will take at least a couple of years for it to actually go over completely. It will happen, but not in the near future.
Rohit
Okay. Okay, fine sir, and you sort of mentioned that we are also introspecting a lot of and trying to sort of tighten our belts to face the situation. So anything that you can share on that or whatever your thoughts on what we can do to improve our situation from here?
Rahul Nachane
Well, we are looking for improving. We are just basically looking at waste. The idea is that if we are able to minimize the waste and improve the process, then it will result in more benefits. So unfortunately I can’t quantify it in any way right now, but that particular process is already initiated by us from March.
Rohit
Got it. Answer. From the approval that you mentioned for the US market would be probably end of this calendar year. So in terms of, I mean your. So in the past you mentioned that you already sort of, you can sort of start supplying to customers, at least evaluation batches or at least starting the whole process of business development etc. Before you get these approvals. So has that process also started for the US market or that is only after the approval process. From the approval process, only after that.
Rahul Nachane
I don’t know how I mentioned that. I don’t recall anything like that. But TPH not possible to sell it in the US without the registration.
Rohit
Of course not sir. What I meant, what I meant is that. So what actually, so what I meant is from your business development point of view, you can’t sell without the approval, USFD approval. But I mean in terms of starting the process of business development etc, which may take its own while for you to establish. So that is what I was checking.
Rahul Nachane
Business development, the products which we manufacture will generate samples and we’ll start sending it to different companies to get the approval process. So the ceiling will start as soon as each validation is over, we will start that entire process. In fact, we anticipate our first filing to be done in the US by between October and December, as I said earlier.
Rohit
Okay. Okay, fine sir, thank you.
operator
Thank you. Next question is from the line of Dwanil Desai from Turtle Capital. Please go ahead. We cannot hear you clearly.
Dhwanil Desai
Am I audible now?
operator
No sir, we cannot hear you.
Dhwanil Desai
Hello? Am I audible?
operator
Yes.
Dhwanil Desai
Yeah, this negative other income I think is it from the investment losses, right? That is how we should proceed?
Rahul Nachane
Yeah, it is mark to market on the current investments.
Dhwanil Desai
So that is, that is represented in other income being negative and not in expensive side. It is not reflected.
Rahul Nachane
No, it is negative on the income side. That’s right.
Dhwanil Desai
Okay, second question. If I look at our new products. And the product list which is available. I see lot of products on the companion animal side and especially you know, some of the products which are either have just gone off patent or going off patent in FY25, FY26 like you know, hyper selener, fluoro runner, etc. So any specific opportunities that we can capitalize on on some of these products? Saeed, you can talk about that.
Rahul Nachane
Yeah, so we anticipate only from Floral Languor right now coming through has gone off patent in March this year and it’s doing quite well. There are close to about 8 to 10 Indian companies working launched their brands and all of the launches are with our product. We are the only manufacturer here in India for Fludalaga and we have also been able to start doing product approvals in other Latin American markets. But yeah, that’s a good thing which we anticipate. The other products are still not applicant so we don’t anticipate any sales coming from anything right now.
We are just selling it. We are just giving those products for development. It’s not because it’s under patent, no commercial sales.
Dhwanil Desai
Got it sir. So Fluna next card is a pretty large molecule and I understand post patent volume will increase and the price will decline but it will still be a very reasonably decent scale molecule. And you say, you know, we are the only Indian guys manufacturing it. So do we see a significant potential from this product, let’s say 30, 50, 70 crore kind of a number, you know, in next couple of years.
Rahul Nachane
The thing is that with a product which goes off patent it’s very difficult to actually predict how the seal will go through because the brand image of the original inventor is always very strong. Having been in the market for close to about 15, 20 years. It’s a sort of a wait and watch thing. We need to see how it actually goes. So there are, as I said there are a few companies which have launched this product now in India. Let us see how successfully they are able to penetrate the market.
Dhwanil Desai
Okay. And epoxy liner also was to go off patent but I think that has been pushed to now 20. 29. Right? Is that correct?
Rahul Nachane
28. Yeah, that was operating in 28.
Dhwanil Desai
Okay, got it. And last question for. So earlier we were largely most of the product basket was addressing large animals, cattle. Now we see lot of products on the companion animal and so is it to do with. Since we are operating or entering now Europe and US as companion animal is a large portion of the overall market. So we are developing products on that side and going forward the incremental product basket also will expand more on companion animal side. Is that how we should look at over next two, three years on the product development side?
Rahul Nachane
Well, as a full self legged vetapi company we have to be present in both the segments, the farm animal as well as the companion health segment. We did not have a presence in the companion health segment till about probably four years ago and now we have started doing some products in that. But it’s still pretty imagination for us. Bulk of our business comes from farm animals.
Dhwanil Desai
Thank you sir. That’s it for my time and wish. You all the best.
operator
Thank you. Next question is from the line of Shivaji Mehta, an individual investor. Please go ahead.
Shivaji Mehta
Hi. Thank you for the opportunity. So in the light of the excess. Capacity that is in China which is putting pressure on the realization what is. The asset turn that we are targeting. For the company as a whole by say FY28? When the new capex ramps up fully.
Rahul Nachane
We anticipate a total sales potential of close to about 300 crores. From this investment which we are doing between 250 and 300 crores the asset turn is likely to be in the range of about 1.6 1.7.
Shivaji Mehta
Right. And this is for the full company 1.6 1.7x or is just for the new investment.
Rahul Nachane
For the new investment.
Shivaji Mehta
For the new investment. Okay. Also if you can guide for the. CAPEX for FY26 and FY27.
Rahul Nachane
Other than this project which we are setting up, we don’t have any other capex plans. So there is a total 160 crore investment which we are putting up out of which 595 crores is done as of 31st of March.
Shivaji Mehta
Right. And lastly, any margin guidance that you would like to put out for say. FY28 or FY29,
Rahul Nachane
as I said earlier, we don’t give earnings guidance.
Shivaji Mehta
Got it. Thank you and all the very best.
Rahul Nachane
Thank you.
operator
Thank you. Next question is from the line of Ankit Minocha from Adaizi Ventures family office. Please go ahead.
Ankit Minocha
Thanks for the follow up. So in your note in the investor presentation you mentioned some issues with the currency availability in Africa and also because of the India Pakistan conflict. Can you please outline this in some more detail for us to understand if this is more of a short term issue or if this could be something structural ahead.
Rahul Nachane
So our sales was to the tune of 15 crores to Pakistan last year. And because of this India Pakistan issue now that sale will be zero in the current year. And though we don’t sell directly to Africa, most of our customers are selling into Africa. So it’s sort of an indirect business for us because Africa does not have any significant pharma manufacturing capacity. It is manufacturers in Europe, in Latam, in India, in China who are selling to Africa and they are facing slow realizations from there because of currency issues and credit issues. So that’s sort of slowed down the whole thing.
Ankit Minocha
By these currency issues you mean basically the relative depreciation of the customer’s currency versus the African currency.
Rahul Nachane
By currency issues I mean that African countries don’t have enough currency US dollars to pay for their import.
Ankit Minocha
Okay.
Rahul Nachane
Does that answer your question?
operator
Next question is from the line of Sai Ganesh from Square 64 Capital Advisors LLP. Please go ahead.
Unidentified Participant
Hello. Thank you for the opportunity. I just wanted a view on the Europe market. Like our revenue has dropped by 43% in this fiscal. Can you throw some light on that part?
Rahul Nachane
Can you please repeat? I couldn’t hear it correctly.
Unidentified Participant
Yeah, I’m audible now.
Rahul Nachane
Yeah, yeah.
Unidentified Participant
I just wanted to know about the revenue decline from the Europe market of 42%. If we see in past we have another of 80 crores on a yearly basis. But right now our revenue from Europe has been declining to 40 crores in FY25.
Rahul Nachane
So when we sell to Europe we are not selling. That sale is mainly for the rest of the world market because when European companies are buying from us they are manufacturing and re exporting. So you don’t need a European registration to sell that. And the European companies are slowly losing market share in the rest of the world area because of greater domestic competition because most of the countries are now encouraging make locally sort of situation. Which is why Europe sales are going down. But the Lakrum and other sales are are going up for us.
Unidentified Participant
Okay, thank you. And one more question is that you mentioned we are facing from facing some realization pressure. But. But our gross margins are in the decline in the range of 3%. But our absolute EBITDA margins have declined around 7%. You please explain the factor behind this.
Rahul Nachane
As I said, basically because of sales realization is lower now and that is because of increased competition and that is resulting in lower margins.
Unidentified Participant
Okay, thank you. That’s it from my sir.
operator
Thank you. Next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead.
Ankit Gupta
Yeah, thanks for the opportunity. You know, next guard or Eclipse side. As you said, we are one of the. We are the only Indian player currently that is looking to enter the market when you know, the patent expires. So is it a different difficult product to manufacture or why is it the competitive intensity is less here?
Rahul Nachane
Yeah. Technology challenges for that. It took us three years to develop a technology for manufacture.
Ankit Gupta
Okay, okay, okay, okay. And on the European market side, we have always indicated said that the competition there, although from Chinese is still not, you know, as intensive as it is, you know, in developing markets. So like have you seen increasing competition there also in the past few quarters.
Rahul Nachane
Increase in cognition From China?
Ankit Gupta
Yeah. On the European market. Also from China. From other players who are registered their products in European markets.
Rahul Nachane
Yeah. Meaning China has been is the dominant country manufacturing APIs and they are, they are, they are present in the in EU for many years now. So it’s a question of increased competition now. It is that when we are entering, we are the competition for them.
Ankit Gupta
Okay. My question was on the realization front, have you seen, you know, realization declining there also for some of the course that you are looking to enter?
Rahul Nachane
It is across the board. Yeah, across the board everywhere we see lower realizations. But even then said that there is still a higher markup when you sell to Europe. So improvement there is definitely a difference over there. And the competition is a little restricted. So like for example, let’s say for a particular product, if we have got five to six different suppliers who operate in the RW market, in the EU market it will be just probably two or three max.
Ankit Gupta
Okay.
Rahul Nachane
Because not everybody has registration and the documentation.
Ankit Gupta
But the pricing pressure has increased there also market in the past year or so.
Rahul Nachane
That’s right.
Ankit Gupta
Yeah. Thank you.
operator
Thank you. As there are no further questions from the participants, I now hand the conference over to Mr. Rahul Nachmani from management for closing comments.
Rahul Nachane
Thank you all for your participation and continued trust in NGL mindchem. We remain committed to executing our strategic priorities and are confident of returning to growth as market conditions improve. We appreciate your ongoing support and look forward to engaging with you in the future. Have a great day, everyone.
operator
Thank you. On behalf of NGL Finechem Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.