Piramal Pharma Ltd (NSE: PPLPHARMA) Q1 2026 Earnings Call dated Jul. 29, 2025
Corporate Participants:
Unidentified Speaker
Gagan Borana — Head of Investor Relations and Sustainability
Nandini Piramal — Executive Chairperson
Peter DeYoung — CEO of Piramal Global Pharma & Director
Vivek Valsaraj — Chief Financial Officer & Executive Director
Analysts:
Unidentified Participant
Amey Chalke — Analyst
Abdulkader Puranwala — Analyst
Shyam Srinivasan — Analyst
Maitri Seth — Analyst
Madan G — Analyst
Madhav Marda — Analyst
Tushar Manudhane — Analyst
Chidananda Mohanty — Analyst
Vibha Ravi — Analyst
Chintan Shah — Analyst
Harith Mohammed — Analyst
Presentation:
operator
Ladies and Gentlemen, good day and welcome to the Piramal Pharma Ltd. Q1FY26 earnings 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 questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing Star then zero on your touchstone phone. I now hand the conference over to Mr. Gagan Burana. Thank you and over to you Sir.
Gagan Borana — Head of Investor Relations and Sustainability
Thank you. Rayu Good morning everyone. I welcome you all to our post results earning conference call to discuss our Q1 FY26 results. Our results material have been uploaded on our website and you may like to download them and refer during the discussion. The discussion today may include some forward looking statements and these must be viewed. In conjunction with the risks that our business faces. On the call today we have with. US our Chairperson Ms. Pandini Piraman, our. CEO of Global Pharma, Mr. Peter D. Young and our CFO Mr. Vivek Valsaraj. With that, I would like to hand over the call to Ms. Nandini Piramal. To share her thoughts.
Nandini Piramal — Executive Chairperson
Good day everyone and thank you for joining us today for our post Results Earnings Call the quarter was broadly in line with the guidance we shared for FY26 in our last quarterly call in the month of May. While there may be some lumpiness in our sales between the quarters due to the nature of the CDMO contracts and timing of institutional orders in the CHG business, we believe we’re largely on track for meeting our full year FY26 guidance of mid single digit revenue growth with mid teen EBITDA margin and YOY growth in net profits during the quarter where we reported a YOY revenue decline adjusting for the impact of destocking in one of our large unpatent commercial CDMO products, the YOY revenue growth was in early double digit.
Our CVMO business base business adjusting for inventory destocking delivered mid teen revenue growth during the quarter accompanied by improvement in EBITDA margins mainly driven by our overseas sites in our CHG business. While we reported a muted growth in Q1, we expect growth rate to pick up significantly more specifically in H2 given the timing of shipments and phasing of institutional orders. Our consumer business delivered a healthy growth of 15% during the quarter driven by healthy growth in our power brands and E commerce sales. Lower interest costs due to reduction in interest rates and lower effective tax rate helped us deliver 8% YY growth in our net profits for the quarter on quality and compliance we successfully maintained our best in class track record of 0oai since 2011.
This quarter we successfully closed US FDA inspections at our Aurora facility in Canada without any observations. We also got the US FDA approval for our Digual facility at Seagull Flooring API and finished product manufacturing site for both human and veterinary use. On the sustainability front, we continue to make steady progress in multiple areas including water and waste management, afforestation, renewable energy adoption, diversity, inclusion, human rights and occupational health and safety. These initiatives are beginning to show tangible results and reflecting meaningful improvements in IESG scores by external agencies. Moving on to business Specific highlights starting with our CDMO business Our CDMO business reported a revenue around 997 crores which was a yy decline 6%.
However, adjusting for the impact of inventory destocking, one of the large unpatent commercial manufacturing products, the business delivered mid teen growth. The growth was primarily led by our overseas facilities coupled with a yoy improvement in profitability. Our nutritional supplement business and generic API business also delivered encouraging growth during the quarter. On the profitability front, we continue our efforts with cost optimization through better procurement strategies and operational excellence initiatives. This along with the scaling up of our overseas revenues should help generate operating leverage to help improve our EBITDA margin towards 25% by FY30. In terms of order inflows, we’ve had a mixed experience during the quarter with some of the overseas sites experiencing good order inflows, whereas the early stage discovery and development orders continue to see slow pickup due to an inconsistent and incomplete recovery of biotech funding coupled with geopolitical issues and uncertainty over trade policies.
During the quarter we broke ground in our capacity expansion project at the Sterile Fill finish in Lexington US which is expected to be completed by 2027. This expansion should lend impetus to an integrated ADC development and manufacturing program over the medium to long term. Moving to our Complex Hospital Generics Complex Hospital Generics during the start of the quarter, we commercialized new sevoflurane manufacturing lines at our Big Wall facility to complement the existing sewer fluorine manufacturing at our Bethlehem facility in the us. These new sibofluorine manufacturing lines at our Digwa facility should be catering to the emerging markets su us.
We’ve already started seeing a good pickup in our inhalation anesthesia sales in some of the emerging markets and expect this momentum to continue going forward as well. We did see some slower revenue booking in our key markets in Q1. That’s largely due to phasing that’s more skewed to the later part of the year. In injectable and seasoned pain management segment are strategic initiatives aimed at mitigating supply limitations are advancing as scheduled with benefits expected from FY2027 onwards on the specialty and Differentiated Portfolio fund. During the quarter we launched Neo Atricon in select EU markets. We expect to launch in more markets during the rest of the year.
The initial response has been good. Moving on to our consumer healthcare business, our PCH business delivered a healthy growth of 15% during the quarter. This was primarily led by an 18% growth in our power brands and a 41% growth in our E commerce business. We launched seven new products in SKUs during the quarter. We continue to invest in media and trade spends to boost the growth of our power brands along with improvement in profitability metrics. Our power brands grew 18% during the quarter and contributed 49% of the total consumer healthcare sales. Brands such as Little Sierra and Irange were amongst the key drivers of growth.
The Irange muted experienced mutual growth last year following the recovery regulatory price control on ico. With this impact already in the base, it is witnessing a healthy recovery in the current financial year. Our sales and E commerce platforms continue to demonstrate strong traction coupled with an improvement in profitability. It grew 41% during the quarter contributing to 23% of PCH sales versus 19% in quarter one. FY25 summarizing the quarter, CDMO business excluding the impact of destocking delivered good mid teen growth with YY improvements in EBITDA margin primarily led by better performance in our overseas site. Our CHV business is also tracking well with healthy demand in inhalation anesthesia complemented by on plant capacity expansion.
This should start reflecting coming quarters, especially H2 given the timing of shipments and the phasing of institutional orders. Our consumer business continues to grow in line with expectations led by the power brands and E Commerce sales. We remain on Track to deliver FY26 and FY27 guidance that further meets FY30 aspiration to become a 2 billion revenue company with a 25% EBITDA margin. High Team Roce with this I’d like to open the floor for Q and A.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press STAR and one on their Touchstone telephone. If you wish to remove yourself from the question key, you may press star and 2. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles to ask questions. Please Press Star and one first question is from Amer Chalke from JM Financial. Please go ahead.
Amey Chalke
Yeah, thank you so much for giving me the opportunity. First question I have is on the PDMO order book. How is it looking for FY26? Is there any change over last 1/4 in PDMO order book? And if you can quantify.
Peter DeYoung
There’S been no material change in the order booking since we spoke last quarter when we gave the guidance for the year. And so the first quarter we have had order booking that has progressed within the quarter. There’s been no notable uptick versus where we were at or expecting at the beginning of the quarter nor no notable downtick. It’s been consistently performing but at a modest level as described by Nandini in her comments. The situation with respect to our clients ability to raise money and once raised spend money remains where it has been mostly since the middle of January.
Amey Chalke
Sure. The second question I have, are there any project wins during the quarter which you like to highlight or you can give some color on if there are any new launches which would happen during the year or maybe over two years?
Peter DeYoung
We appreciate the detailed question. We would like to reaffirm that the outlook for the year remains the outlook for the year and that the revenue growth outside the destocking event is in the mid teens which we described and the order booking is consistent with that expectation. We don’t typically give specific customer order booking comments because first our customers ask us not to communicate that level of information and second we think that ups and downs of individual customers in the ordinary course don’t particularly give useful information and we suggest you look at the aggregate numbers we’ve given for the full year guidance.
Amey Chalke
Sure. The last question I have on the margin front, despite the flattish growth for last quarter, margins have dropped a bit. Does that mean that our core business margins have come down?
Vivek Valsaraj
So amey, if you refer back to the annual guidance that we gave, we did indicate that there will be some moderation in margin given the fact that we will be growing in mid single digits. So it’s largely the impact of the destocking of the order in the CDMO space which is leading to some moderation in the margin and this is in line with what we had guided for sure.
Amey Chalke
Thank you so much. I will join him.
operator
Thank you. Next question is from Abdul Kader Puranwala from ICICI Securities. Please go ahead.
Abdulkader Puranwala
Hi. Thank you for the opportunity. My first question is with regards to the impact of this large innovative product, could you help us understand that you know, is there Any particular quarter where the sales of this product would be higher during the last year or it was, you know, kind of evenly spread. Because the reason why I ask you is that your quarterly numbers kind of fluctuate, you know, every time. So any, any color on the clampiness along with some indication on the last product would be helpful.
Peter DeYoung
So I’ll comment and Vivek can add in anything further. The first is that last year we had the benefit of that large product reasonably evenly spread throughout the year. This year, as we guided when we laid out our expectations for the year ahead, which we’re currently in, we do not get that benefit. I think the only additional point I would mention is that Q1 for us in the fiscal year is typically a softer quarter. And so when you take away a large profitable base business across all months in a traditionally soft quarter, you can see a more profound impact on operating leverage which would be showing up in the numbers.
Vivek Valsaraj
And also to reiterate Abdul, that H2 continues to be bigger than H1 for us as it has been in the past, probably more prominently this year given the fact that even CSG business, we did see some slowdown in quarter one, but we do expect the growth to recover more specifically in H2.
Abdulkader Puranwala
Understood, sir. So the next question is with regards. To your investment in ADCs. So I understand you’re investing $19 million at your Lexington and Riverview facility. But in terms of, you know, the revenue trajectory or the order outflow to happen, you know, when exactly do you see this opportunity kind of playing out for you?
Peter DeYoung
So the ADC opportunity, the largest contributor to the revenue, and that is our conjugation facility in Grangemouth uk. It is supported through the Lexington fill finish, the Riverview linker payload and the Hyderabad Yoppin map. So from an overall growth projective, this is a rapidly growing business for us and it’s contributing a lot to what we show in our. It’s one of the big contributors of what we call the differentiated offerings bucket. So if you look at our, our full package we shared with our annual report, you can see the multi year trend in differentiated products as a demonstration of growth.
Now, just one clarification. The expansion that we announced at Lexington, Riverview, the linker payload at Riverview is entirely and only dedicated to ADCs. However, the expansion at Lexington has multiple benefits. The first is its onshore containment oriented fill finish for any purpose and we see significant and strong demand for that. The second is its onshore capacity in an environment where people are looking for us based Production for drug product and we are benefiting from that. The third is exactly what you mentioned, which is the linkages with ADCs in an integrated offering which we will also benefit from.
And so we actually see three reasons behind the overall growth in terms of the Lexington. And ADC is only let’s say one of those three in that example. And we’re expecting and should see growth in the Lexington business for that purpose. And I just want to reiterate another point that was covered in Nandini’s comments, which is a lot of our growth so far this year has been in our overseas facilities.
Abdulkader Puranwala
Fair enough, thanks for that detailed explanation. But just Peter, to understand, I mean, you know, when we are calling out our 2030 guidance of achieving close to $2 billion of revenue, is ADC also factored that guidance?
Peter DeYoung
Absolutely. If you want a longer answer, we can give it. But the short answer is yes.
Abdulkader Puranwala
Understood, sir. And just lastly on the margin outlook, so we are maintaining the low team margin guidance what we have given previously.
Nandini Piramal
Yes, we’re sticking by FY26 guidance and we’re on track for that.
Abdulkader Puranwala
Got it. Thank you.
operator
Thank you. Next question is from Shyam Srinivasan from Goldman Sachs. Please go ahead.
Shyam Srinivasan
Good morning. Thank you for taking my question. Just on the commentary around the overseas sites, if you could help us quantify or give some direct qualitative sense on the utilization improvement, which of the sites where we have seen additional demand come through. So just some qualitative color or even quantitative color on those overseas sites, what’s.
Peter DeYoung
Nice is that it’s actually we’ve seen strength in our UK sites, both of them in terms of I guess you could call revenue as a proxy for utilization and also in I guess a significant number of our North American sites. And so what’s nice is that it’s not a single site and it’s not a single country. It’s actually across three countries we’re seeing the growth the Canada, the US and the UK and it’s across up a number of our overseas sites. And so it’s nice to see this year. Obviously we have some of the challenges we described earlier, but it’s nice to see some growth in our overseas offerings as demonstrated through revenue.
Shyam Srinivasan
Okay, and is this Peter, the biggest driver for the CDMO margins improving like X of whatever the destocking? Is that the key driver of improvement in margins?
Nandini Piramal
Yes, yes. And the balance group I think again helps us overall.
Peter DeYoung
So just to give further color, we described the tremendous benefits or detriments of higher or lower Revenue in our overseas sites which are many of them are on the smaller side and so the operating leverage impact is significant. And so when we have these improvements that helps. And I think the second one which you may notice is the EBITDA to PAC conversion ratio. So when we get this benefit we also because of past actions we don’t have a lot of tax outflow. So this is another positive of when we see this go in this direction.
Shyam Srinivasan
Okay, thank you. Second question, just trying to decode the mid teen growth in the CDMO business excluding the one off. Right. So did we have any sales of this number one product for us in the quarter or it was like nothing.
Peter DeYoung
We did not expect, anticipate or communicate an expectation around any sales in the quarter and we did not have any.
Shyam Srinivasan
Okay, so we can say base had that number and nothing this quarter. So when I do a simple math of zooming 15% so that product comes to close to 20% of your CDM or revenues. Is that how we should look at it?
Vivek Valsaraj
We would avoid getting into specific product related revenues here Shyam, but yeah you’re doing your math. We would avoid speaking about specific revenue concentration.
Shyam Srinivasan
Got it. And my last follow up on this one is you know anything. I know these are lumpy and we have guided for fiscal 26 but is there any early indications Peter and team to see that this product should come back 27? There are some competitors as well which are you know we can see through export data. Some of them are shipping it. So if you could help us understand the landscape. I don’t want a quantitative number from you for more from a qualitative or a comfort that this product probably comes back.
Peter DeYoung
We don’t give specific level guidance and our customers request us not to do that. I would just give one qualitative comment which we remain the primary supplier for the US market and we expect that when the destocking has completed that orders will resume. But it remains the choice of our customer not ourselves and we look forward to their future decisions.
Shyam Srinivasan
Thank you. And last question is on the CHC business. So the growth starting from quarter two which you have telegraphed, what is driving is it more emerging market? Has there been any issues in our US market in terms of market shares or something that has also led to slowdown this quarter which could correct. So any directions here on chg? Thank you.
Peter DeYoung
We would anticipate a lot of the growth coming from the existing inhalation, injectable pain and intra SQL business franchises. We do have some additional sales expected in the second half and we would see a meaningful part of that being in our ex US markets for the growth. As we look at the difference between say the last year and this year, that does not change from what we communicated when we discussed the guidance for the full year. It’s just that it’s not all happening in the beginning, it’ll happen more back ended.
Shyam Srinivasan
Thank you. Thank you, Victor.
operator
Thank you. Next question is from Netri Sheth from Choice Institutional Equities. Please go ahead.
Maitri Seth
Hi. Thank you for the opportunity. Just one question on the gross margin side. Our gross margins have largely remained in the 62 to 64% range, 65% range for the last two, three years. So can we expect to see some improvement there? If you could quantify that.
Vivek Valsaraj
So at the current level, gross margins are expected to remain in the range. Of 64 to 65%. But as the quantum of on patent commercial products and our innovation goes up, we do expect some improvement in the years ahead. At this stage, in the midterm, it would remain at this.
Maitri Seth
Okay, that’s it. Thank you.
operator
Thank you. Before we take the next question, a reminder to participants that you may press Star and one to join the question queue. The next question is from Matangi, from Motilal Oswal. Please go ahead.
Madan G
Hi, am I audible?
Peter DeYoung
Yes, yes, go ahead.
Madan G
I. I understand that there are many new SKUs that have been launched. I’d just like to understand what is the breakeven timeline for this and if we expect any execution risks.
Nandini Piramal
And this is for this PCH business, the consumer healthcare business.
Madan G
Oh yes, all of them across.
Nandini Piramal
No. So the SKUs were launched in the consumer healthcare business. The business itself is actually making an EBITDA profit. And that’s what we continue to expect, that we will improve profitability as we get to scale. But I can’t give you on a brand by brand Osku level, break even. But the business as a whole is a bit of profitability.
Madan G
Understood. Okay. My next question is about the customer concentration risk here. So are we taking any steps to reduce customer concentration in the CDMO segment or do we not expect this destocking issue to resurface?
Peter DeYoung
So I’ll give you two parts to this. The first is that in the innovator CDMO business, when new launches happen, and I think we discussed this when we did communicate the guidance last year, is that a typical move after a launch happens from an innovator customer is to evaluate stock position versus the amount of inventory they bought for the best case scenario. And so you do see from time to time in us and our competitors, these events do happen. And so with any given new launch, you can expect at some point in time there could be such an event.
This one was more pronounced because it was our largest customer product relationship and so obviously had a big impact as a group. We decided when the orders came to take them because it was better to have them than to not have them. But we also identified in our risk committee, for obvious reasons, as you described, that there is customer concentration risk. There are significant efforts underway before and also now to add new business to the site and to the business so that we can reduce that reliance. And that’s part of what’s driving with Nandini’s comments, the 15% growth that we’re seeing across all of the business aside from this specific customer product combination.
And so yes, we recognize the risk. Yes, we took the business and yes, we’re taking efforts and seeing some benefits from, but not yet enough of our efforts to diversify.
Madan G
Understood. I just have one last question. I understand that operations are quite dependent on the US FDA inspections. I’d like to know if you expect any new trade and regulatory policies and tariff risks in the US.
Nandini Piramal
I think we’ve maintained a successful 0oai status since 2011. I think we’re pretty confident of quality standards and audit facing inspections. However, I think on trade and tariffs, I think there is uncertainty and I wouldn’t want to comment on that.
Maitri Seth
Understood. Thank you so much.
operator
Thank you. The next question is from Madhav, from Vidality. Please go ahead.
Madhav Marda
Hi, good morning. Thank you so much for your time. Just wanted to understand that for the large on patent supplier which is going through a destocking, how is that product doing in the end market? Does it continue to grow in the double digits for the end market sales for that product? If you could share some color so we can have a sense in terms of the ability of our supplies to recover once a destruction is over.
Peter DeYoung
I would encourage you to look at equity analyst coverage of that company or public filings from that company, both of which could answer your question, or even newspaper articles about that company, all of which would show it’s a growing product.
Madhav Marda
So that actually indicates it’s going at 15, 20%. So I mean, I just wanted to confirm with you that once the destocking is over, this should come back for us in a good way. Right? I mean
Peter DeYoung
That’s what encourage you to. Do another pass at that. You may see a higher number. And so even some of the analysts on this call, their firms cover this so you can pull it down but I think it would be better, better than that number. But I would suggest you look at your own primary sources.
Madhav Marda
How is the conversation with this client? How much time do they expect the supplies to come back? Or is it something which is more wait and watch at this point?
Peter DeYoung
We talk to them nearly every day and we will await for their decision once these stocking levels have come down to their target level.
Madhav Marda
And just a second question on the CHC business. I think we had added a fair bit of capacity and we were quite sort of positive on scale up here. So should we take the Softer growth in Q1 more like you flagged some timing of shipment issues etc. So on a full year basis can this business grow at the double digits for us?
Nandini Piramal
Yes, I think we stand by our guidance overall as the CHT business achieving it’s sort of in linearly eaten track for achieving the FY30 goals. So yes.
Madhav Marda
I understand but I’m saying that can the CSG business, with all the new capacity and the ex US markets we’re targeting, can it grow a double digit this year despite the softest Q1?
Nandini Piramal
Yes.
Madhav Marda
Okay.
Peter DeYoung
If you remember last year we did a stronger Q1 than what some of you all thought we would do and you asked us if we would raise the guidance and we encourage you to look at the full year numbers. This year we have it in the other direction and we again encourage you to look at our full year numbers.
Madhav Marda
No, understand that. Thank you.
operator
Thank you. Next question is from NEHA from Abacus. Please go ahead. NEHA from Abacus. You may go ahead with the question. There seems to be no response on the line of neha.
Unidentified Participant
Hello.
operator
Yes ma’, am, go ahead.
Unidentified Participant
Yeah, yeah, hi. So good morning and thanks for the opportunity. So two questions from my side. One is on the high other income for the standalone business for this quarter and secondly on the overseas subsidiary business. Just wanted to understand that do we expect the growth momentum to pick up further from here in the rest of the year and probably leading to higher leverage only EBITDA margin per se from that particular business.
Vivek Valsaraj
Neha, the higher quantum of other income is largely driven by forex gains in the standalone and secondly we have guided for our overseas facilities to pick up growth momentum for the full year and yes, we’ve seen that in quarter one and we do expect that momentum to continue in the subsequent quarters as well.
Unidentified Participant
Thank you.
operator
Thank you. Next question is from Tushar Manudane from Motilal Oswal Financial Services. Please go ahead.
Tushar Manudhane
Thanks for the opportunity, sir. Firstly on the other expenses, you know, it’s been decent decrease from almost 620 crores in 4, 2 to 500. So how to think about this maybe for a full year 26 and 27 in terms of operational efficiencies, sort of reducing the cost or rationalizing the cost.
Vivek Valsaraj
So firstly let’s look at the outcome, right? The guidance that we gave is there’ll be some moderation in margin that will happen for the year. So that, and we’re standing by that annual guidance. And having said that, we continue to look at optimizing cost efficiencies through a program that we run within the organization which is is looking at all levers, whether it’s sourcing cost efficiencies and general OPEX as well. So yes, we’ll continue to see how we can keep the cost tight to the extent possible and focus on improving efficiencies thereafter.
Tushar Manudhane
Because let’s say the onsetting product could have got a good gross margins. So probably Your guidance for FY26 EBITDA margin is the reduction in the business of the patent molecule that I was more trying to understand on the operational cost.
Vivek Valsaraj
Yes. And that’s why you see that the operational cost is actually growing in single digits. In fact, if you exclude the impact of the forex, the growth is even much more reasonable in terms of growth within the previous year. So yes, we are keeping the cost under control.
Tushar Manudhane
And the shipment timing, is it more to do with the geopolitical tension or more about the customer facing some temporary issue of taking the product?
Vivek Valsaraj
It’s more phasing and we do expect this to pick up in the later part of the year, more specifically next week.
Tushar Manudhane
Any other product or contract where you envisage such event happening over say next three to four months because typically the contracts are such that you know, we have a lead time of at least three to four months to supply the product. So any other contract where you see sort of moderating.
Nandini Piramal
I think nothing at the moment.
Tushar Manudhane
Okay, thanks. Thanks a lot.
operator
Thank you. Next question is from Suvan Mittal from mfc. Please go ahead.
Unidentified Participant
Hello. Thank you for the opportunity. I have two questions lined up. Firstly being for our sewer fluorine business in CHG for anesthesia, we have done a sizable capex for rest of the world markets. So do we expect any double digit growth this financial year and if yes, do we expect a sizable contribution because of the rest of world business row? And secondly last if yeah, sorry please.
Nandini Piramal
I think yes, we do expect a double digit growth for the CHG business Overall and yes, some part of it will come from the rest of the world business as the site begins, continues to scale up, it won’t all be in one quarter.
Peter DeYoung
And just for further clarity, while we have the it’s a do and tell for India and that portion of the supply from India to India can happen. A lot of the row do require a certain amount of stability data and a certain filing timeframe. And so as those individual markets complete their steps, we can start serving them from this site. But that will be an over the year timeframe, not a light switch. But yes, correct, we are able to do that out of India for India and we’ll expect RW to come in line country by country as an additional supply source over the year.
Unidentified Participant
The second question being, in the last affair we had maintained an EBITDA margin upwards of 20% for three quarters at least. So if you could just reconfirm, was it because of the large customer we were having?
Vivek Valsaraj
Sorry, when you say EBITDA margin excess of 20%, which segment are you referring.
Unidentified Participant
To on an overall basis, if I’m not wrong, for two quarters we’ve maintained an EBITDA margin between 18 to 23%. In the last FY for Q3 and Q4.
Peter DeYoung
No.
Vivek Valsaraj
So if you look at even our annual full year margins, we were at 17%, not annual.
Unidentified Participant
On a quarterly basis.
Vivek Valsaraj
On a quarterly basis we never had EBITDA margins, only in quarter four we had EBITDA margins of close to 22%. Otherwise our margins have always been less than 20%.
Unidentified Participant
Yes.
Vivek Valsaraj
Are you referring to the standalone then? Standalone? Yes. The marginal loan margins have been.
Unidentified Participant
Standalone basis. It could confirm. Is it because of the large customer we were having in the CDMO business, the standalone margins?
Vivek Valsaraj
Yes, it is because of the impact of the last customer.
Unidentified Participant
Okay. Oh, okay. Thank you. Thanks a lot, sir. Thanks a lot.
operator
Thank you. The next question is from Chinnananda Mohandi from Green Portfolio. Please go ahead.
Chidananda Mohanty
Hello. I’m audible.
Vivek Valsaraj
Yes, you’re audible.
Chidananda Mohanty
Yeah. Oh. My first question is what is the estimated total addressable market for New Trickle? And the next part is that you have mentioned that the commercial agreement which will give that means are you going to cover from end to end, from manufacturing to distribution or only distribution? I’m talking about only New Trickle.
Peter DeYoung
Yeah, so we haven’t. I don’t believe we disclosed the TAM for this. And part of the reason is that it’s a market we’ll be creating because it’s essentially a generic product with a differentiated product for a pediatric purpose. And so There is no historical market to refer to and so we will create that and then as that sales happen, we will enjoy that benefit. In terms of the arrangement with our partner brepco, they are responsible for the manufacturing of the product and we are responsible for the sales and distribution of the product. And so that’s the product partnership we have.
And in that context they would be providing us with the product to sell and we would be selling it.
Chidananda Mohanty
Perfect. Perfect. The next question is. Today you told that some of your products in consumer healthcare business has increased some price challenges and from the government side, am I following it right?
Nandini Piramal
Yes. So last year the IPO product came under NPPA and there was a price cut. The pricing authority.
Peter DeYoung
Nppa, price control.
Nandini Piramal
Price control.
Chidananda Mohanty
If I am not wrong then are you referring to the national list of essential medicine or anything else?
Vivek Valsaraj
Yes, last year, not in the current year.
Nandini Piramal
Yeah.
Chidananda Mohanty
What percentage of total ICE business comes under this list?
Nandini Piramal
Not very much. I think it’s only the ipil one or two products, not not many.
Chidananda Mohanty
The next question is that the KV with abb, that is you are targeting the ophthalmology market of India only, correct?
Peter DeYoung
Yeah.
Chidananda Mohanty
So can you specify any quantitative number around the approximate market size? And in this jv, are you developing new drugs or will only commercializing the existing drugs from both the companies.
Vivek Valsaraj
So firstly a JV partner and us together are responsible for manufacturing and distributing products for the India market. They are market leaders in several segments which includes the anti infectives and the glaucoma market and the dry eyes as well. And currently we are in the process of discussing what additional products can be added to this portfolio. And you will see this in the next few years.
operator
Thank you. Next question is from Abdul Kadar Puranwala from ICICI Securities. Please go ahead.
Abdulkader Puranwala
Yeah, hi. Thanks for the follow up. Just a couple of bookkeeping questions. So for the quarter to say the interest cost has gone down significantly. If you could like to highlight what is creating this kind of a cost saving there and for the full year, any color on how should we model the tax rate for this year?
Vivek Valsaraj
So firstly on the interest cost there are two factors at play. One of course is the fact that we have fairly maintained our broad debt levels. And the second is that the interest rate has seen a trend of softness. So all our loans are linked to benchmark rates, whether it’s SOFR overseas or the MCLR treasury bills in India. And we are seeing a general trend of interest rate softening. So as long as this continues, you would see a reduction in the Overall interest cost as far as the tax is concerned, we had guided for a lower effective tax rate versus what we had previously.
Three factors driving that. First is the fact that we forecasted turnaround in some of our overseas facilities, which essentially means that you will have higher profits with no tax outflow, given that you’ve got certain taxes created. The second part is that you will have benefits from the big beautiful bill which was signed in the US which gives you an upfront deduction for your R and D investments. And of course, we continue to enjoy the benefit of R and D tax credit at our Canadian facility. So those are some of the reasons we will see a lower effective tax rate.
Having said that, I’m not giving a specific number because this depends upon the mix between India and overseas. So you will definitely have it lower and it depends upon the overall mix that the effective tax rate will pan out.
Abdulkader Puranwala
Thank you.
operator
Thank you. Next question is from Vibha Ravi from CityLine. Please go ahead.
Vibha Ravi
Hi, this is Vibha from Sightline. I just had two broad level questions. One is that you have called out prolonged decision making by emerging biotechs in your presentation. So would you have some idea if this is in part driven by the uncertainty as to where the US Tariffs will land and is there, you know, since you have a year to the ground in your conversations, do you find that China is more and more out of the reckoning due to geopolitical concern?
Nandini Piramal
So I think, Vibha, the first thing I would say is that funding for biotech overall has been consistent over the year and it’s not necessarily only related to tariffs. It would be things like the approval timeline, it would be things like fundraising and it would be things like interest rates and venture capital funding overall. So I think that those would be the biggest reasons rather than tariffs. And two, I don’t think I really want to comment on China.
Vibha Ravi
Okay, just one more question which is that is there any thought of your own recalibration away from the U.S. given the uncertainty and, you know, the geopolitical environment over there, or is it too short term a blip and it’s perhaps too early to take a call there in terms of recalibration towards the domestic side, towards India business?
Nandini Piramal
I think overall I will say that in the CDMO business. A lot of. People are rethinking supply chains and there is some thought towards reshoring or on shoring. So I think we are, our network is actually well placed to capitalize on that. Right. And, but just as a company, I don’t think we will go back to the domestic India business at all moment.
Vibha Ravi
Okay, thank you so much.
operator
Thank you. Next question is from Chintan Shah from JM Financial family office. Please go ahead.
Chintan Shah
Hi, thank you for the opportunity. So two questions. So one is wanted a detailed explanation on the EBITDA margins for this quarter. I know quarter is not very relevant but you know one side there is a decline and this negotiator volumes and other side we are saying that we have seen better utilization, better margins for other part of the CTMO business. But if we see on an overall basis margins, if I exclude the other income that’s gone from 10.5 to five and a half percent. So just wanted to better understand is it purely the impact because of that innovators serious skills or in other segments also say for in CNG we’re seeing pressure.
Vivek Valsaraj
As you know bottom one is the smallest quarter, this one has been lower. When you’re looking at the overall margins, it’s an aggregate mix of both the CDMO and the CAG business. So you will notice that CAG, which is the highest margin business within the 3 verticals that we have also has not grown this quarter. So while what you say in terms of impact of the automated product not being there this quarter is true, the other fact is the CHG business has also not grown which is also contributing to a depressed margin. And as the growth restored in the CHG business in the second quarter, we should see this gap.
Chintan Shah
Okay, got it. Understood. And second question is apart from this capacity announced of around $19 million, any other sort of capacity we are looking at and probably the idea that I’m trying to get us in order to meet our FY 2030 guidance, basically what sort of CAPEX will have to do beyond this or do we have enough capacities to reach there? That’s one. And secondly in terms of capabilities, you know, ADC is one that we have been actually investing. But apart from that, anything like that to call out that they’re kind of investing in or focusing on or we see that could be for us over next four, five years.
Vivek Valsaraj
In terms of the CAPEX guidance that we gave for the year, we said we’d do anywhere between 100 to 125 million. A sizable chunk of that indeed is for the announcement that we did for our North American facility which is lovely in Lexington and Riverview. We also are investing in product development for our Compass Hospital generics business which is part of the basket of CAPEX that we spoke about. So those will be the primary ones and of Course, besides other maintenance capex that we would normally do across our sites at this stage, we do expect the momentum to be in the range of about 80, 90 million on an average to be the kind of capex that we will need to kind of create or debottleneck capacities across our facilities, which is part of what we have highlighted in our five year plan.
Chintan Shah
For another second part on capabilities, on.
Peter DeYoung
The overall capability point, we’ve looked at what we have and what we think the market requires. And at least our guidance from the particularly in the area of the CDMO is that we’re looking to add capacities at our existing facilities as opposed to adding new facilities with new capabilities as our primary area of investment for the cdmo. As we look at the story that we discussed on the bidding, even the beginning of this call, the operating leverage and the benefits come from from getting our current site larger and in many cases it’s getting them larger with existing capabilities at current locations.
And we believe that that’s a more effective deployment of capital strategy, especially in the short and medium term. We’ll obviously look opportunistically in the medium to long term for other capabilities or geographies for existing capabilities, but at the moment it’s primarily brownfield organic.
Chintan Shah
Okay, got it. Understood. That was very helpful. Thank you.
operator
Thank you. The next question is from Harith Ahmed from Avendis Park. Please go ahead.
Harith Mohammed
Hi, thanks for the opportunity. My first question is on the consumer healthcare business where we have an arrangement to distribute bands from there. Is this a material part of the segment and what is the outlook for this particular piece within consumer healthcare? And can you give the $200 million guidance for FY30? Is this particular revenue stream a part of it or we’ll do $200 million excluding this.
Nandini Piramal
I think it’s 35% of the business currently, I think 40% part of the business currently. But overall it’s doing well. It grew in double digits this year. We fully expect this arrangement to continue.
Harith Mohammed
Okay, thanks for that. My second question is around the profitability at some of our overseas facilities. So when I look at the subsidiary financials for FY25, some of these units have seen a decline in margins or absolute ebitda. So while we were expecting some improvement last year, so can you give some color on what led to the decline in some of these in profitability at some of these facilities like Riverview, Sellersville, Lexington, and what is the outlook for this year?
Vivek Valsaraj
So firstly, Harith, as you rightly mentioned, it was a mixed question performance. So you did see improvement in the performance of some of the sites like Lexington as you alluded to. And yes some sites did see a slightly lower margin or a decline in margin. This is mix of both some clinical acquisition or lower orders as a result of the ongoing biotech funding inconsistencies that we have been seeing. Having said that, I think it’s important that we’ve spoken about seeing an improvement of this in FY26 and several of the sites. We are working towards ensuring that their execution and deliveries are improving and thereafter the order book is also moving in the right direction.
So yes, we did have a mixed year last year and we are working towards improving performance of some of the overseas sites, the traction of which we have seen in quarter one and hopefully we should continue that in the quarters ahead.
Harith Mohammed
Okay, thanks. Last one. Given the slightly muted overall margins that we are expecting for the year and the CAPEX visibility that we have, is there any guidance that you can give on the net debt levels what we are expecting towards the end of April 26th?
Vivek Valsaraj
So currently we are at 2.6 net debt to EBITDA levels and given the fact that we’ve announced CAPEX of close to 100 to 125 million, that is the plan for the year, we will see some increase in this levels but eventually we stand by the long term guidance of bringing it down to one net debt to EBITDA of one level by FY30. So you see some temporary spike that may happen in FY20.
Harith Mohammed
All right, that’s all from my side. Thank you for taking my question.
operator
Thank you very much. That was the last question in queue. I would now like to hand the conference over to Mr. Pradet Barana for closing comments.
Vivek Valsaraj
Thank you very much. We hope we were able to answer most of your questions. In case you have any follow up questions or any clarification, please feel free to reach out to me and I’ll be happy to respond.
Peter DeYoung
Thank you and have a good day.
operator
Thank you very much on behalf of Theramal Pharma Ltd. That concludes the conference. Thank you for joining us ladies and gentlemen. Given our disconnected lines.