Remus Pharmaceuticals Ltd (NSE: REMUS) Q2 2025 Earnings Call dated Nov. 15, 2024
Corporate Participants:
Chandni Chande — Senior Research Analyst
Arpit Shah — Managing Director
Anjali Shah — Chief Financial Officer
Analysts:
Tara Kaur — Analyst
Babu George — Individual Investor
Priya Jain — Analyst
Gaurav — Analyst
Aditi Roy — Analyst
Jairaj Jain — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Remus Pharmaceuticals Limited H1 FY ’25 Earnings Conference Call Hosted by Kirin Advisors. [Operator Instructions]
I now hand the conference over to Ms. Chandni Chande from Kirin Advisors. Thank you, and over to you, ma’am.
Chandni Chande — Senior Research Analyst
Thank you, Shifra. On the behalf of Kirin Advisors, I welcome you all to the conference call of Remus Pharmaceuticals Limited. From management team, we have Mr. Arpit Shah, Managing Director; and Mrs. Anjali Shah, Chief Financial Officer. I now hand over the call to the management. Over to you, sir and ma’am.
Arpit Shah — Managing Director
Good afternoon, everyone. Thank you so much for having me here. Welcome to the investors conference call. I’m pleased to share performance of the company for the first half of FY ’25, which marks a significant step forward in our journey as the global health leader. We are excited to update you on the progress we have made at Remus, share our strategic vision, and look ahead to the opportunities we are pursuing. At Remus, we are proud of our strong global presence with 1,800 plus products, exporting to over 35 countries, with particularly strong footprints across Latin America. What truly sets us apart is not just our broad reach, but the high-quality finished formulations we offer with strong branding strategy. A remarkable 95% of our exports are in advanced formulations such as tablets, creams, capsules, injection, inhalers, soft gels, and oral suspensions, providing patients with reliable and effective treatments.
We operate through several key channel partners for B2C, B2B, and institutional markets in the countries that we are present. To ensure this, we have a diversified customer pool, and we work directly with pharmacists through our subsidiaries, which allows us to serve better both to the patients and healthcare professionals. Our commitment to innovation and excellence in research and development is the center of our mission. We focus on developing next-generation molecules that are not only affordable but also have a real world impact on the patients. Our R&D team works tirelessly to bring new products across multiple countries. We track the registration expiries for the already developed molecules, ensuring we are prepared for a long-term serving our patients on those medicines. We also place great importance on building strong relationships with healthcare professionals by sharing them latest medical insights and backing our products with robust clinical studies, ensuring that our solutions are trusted and effective.
Looking ahead, our strategy is to continue aggressively marketing and promoting new molecules while expanding our regulatory approvals and market reach. We regularly review and update our product portfolio to stay ahead of the industry trend and meet the evolving needs of the global healthcare. Regulatory excellence is key to the success for a pharma company who believes in quality. Our dedicated team ensures that all our products meet the highest standard in every market that we serve. We at Remus are driven by our commitment to improve lives for innovation. We make sure every product we develop is safe, effective, and of highest quality. By combining cutting-edge science with a deep understanding of each and every market’s needs, we deliver specialized solutions that goes beyond traditional generics. Looking to the future, our goal is to continue leading the way in developing breakthrough therapies that will have lasting impact on the global healthcare.
I have with me CFO, Ms. Anjali Shah and Group Strategy, Mr. Vibhu [Phonetic] is also on over the call. And I once again thank everyone to be on this call and give us an opportunity to present who we are–to let you guys know who we are and what we do.
Anjali Shah — Chief Financial Officer
Thank you, Mr. Arpit. Good evening to everyone, and thank you for joining the H1 FY ’25 investors conference call. I’d like to begin with sharing our financial highlights for H1 FY ’25. So, in H1 25, the total revenue has increased by 797.60% on consolidated basis to INR27,555.54 lakhs from INR3,069.90 lakhs. Our PAT has increased by 148.09% on consolidated basis to INR1,401.12 lakhs. Moving ahead, also considering our TTM revenue has increased by 112.37% as compared to our FY ’24 numbers, and PAT has increased by 38.83% as compared to FY ’24 numbers.
Moving ahead, our standalone H1 results, our total revenue increased by 30.99% to INR4,021.23 lakhs and our PAT has increased 22.35% to INR955.29 lakhs. Our standalone TTM revenue has increased from 14.16% to INR6,719.05 lakhs. So, here the TTM numbers for the standalone have increased from INR6,719.05 lakhs to INR7,670.37 lakhs. Considering the same, our results which reflect the strength and the resilience of our business model, which is reflecting our continual business relationship along with contribution of our new products which are commercialized over the period, along with that our major contribution from our subsidiary companies from U.S. as well as from the Bolivia, which is operational and consolidated [Indecipherable]. So, these are the results. In conclusion, our financial performance has reflected a strong commitment to the growth. As we move forward, we will continue to focus on cost optimization, market expansion, ensuring that we are well positioned to navigate the challenges and seize the new opportunities.
So, this is it from my side. Over to you, Mr. Arpit.
Arpit Shah — Managing Director
Thank you so much. So, that gives us a brief about our financials as of year to date. And to discuss more on who we are and what we do, I would like to go through what is our core competency and give you a brief introduction of who Remus is and what we do. So, for Remus, we are specialized in complex specialty and niche molecules. We not just sell the products, we make sure that we capture the market, we brand it pretty well and make sure that the distribution is being done in the several countries that we are present.
As we move forward, we have a high approval rate in terms of registering our products in the market that we are present. As I said before, we have close to around 35 countries where we have been registering our products, and we have a strong plan of not just doing the normal products, but we are focusing on developing products which has less competitors in the market, first in the market as well as first generics in the market, to ensure that we try and capture the market more as compared to the other players in the market.
So, putting that into perspective, what we’ve been focusing on the products where we develop in our R&D facility the products that we think are going to be off-patent in near future, we’ll have more visibility in terms of what are the products, where the market can cater it, and make sure that the IP that we create, so those development of products are going to be the IP of Remus where we hold the IP as an asset and wherever we want to register those products would give us better margins than the ones which are old molecules.
To talk more into the perspective, we also have our subsidiaries in the Latin American market by the name of Relius, its core DNA is to make sure that we have direct presence in the market, in the institutional market, in the pharmacy, and we have a lot of doctor engagement [Phonetic] where we do events, make sure that the doctors are aware of the brand, what products that we could offer them, and stand out from the other competitors in the market where they focus on the products which are already in the pharmacy or in the chain.
So, we differentiate ourselves by having the niche and new molecules where, as I said before, to have less competition in the market, good margins to acquire, and that is what our focus is. So, Relius was a plan in terms of differentiating our products from what Remus has. And Relius being our subsidiaries in the Latin American markets, we ensure that our direct presence is with the government, institutional market. We ensure that our relation goes beyond that. And now people know us that our products are already in the market. So, that is a brief on the Relius side. And one of our subsidiary, which is Espee Biopharma which we acquired recently in 2024. And it is based out of the U.S. We have a U.S. FDA approved warehouse in Chicago. So, just to brief you, it’s a U.S.-based WDD service provider that provides support to innovators, multinational generic manufacturers, CMO, biopharmaceutical companies, and government bodies. So, various other entities in more than 25 countries across six continents.
So, our primary focus is to provide finished formulation products to this R&D clinical trials and bioequivalent studies. We have an FDA approved warehouse, as I said, in Chicago. And 40% of what we supply in India, we have a 40%, 45% market share of whatever we export from this subsidiary in the U.S. to India. So, that is one of our verticals that we recently acquired. I’ll put that into perspective. So, how is it that we are different from other pharma companies? I’ll keep it a little short, but just to ensure that we have a robust team who makes research of what molecules will be good for the market. Also, the therapeutic categories that we currently work, it is very important for us to know that which product, which molecules are going to be the next blockbuster in the market. And by the same, what we give different from the other suppliers is that we actually test our products to ensure that the product is very efficient on the patient. We do a lot of thorough research to ensure that the product that goes to the patient is of the top-notch quality.
And a lot of molecules that we have developed in our R&D facility include products, not just the normal tablets or the capsules. We are working a lot on PFS, that is prefilled syringe. We work on tablets where if a patient needs to have that tablet twice or thrice a day, we ensure that he takes one tablet and that stays in his metabolism for entire 24 hours. So, that is called an extended release. And then also we are focusing on developing soft gel. So the next big thing that we think is that people would like to have a medicine in the Form of soft gels rather than tablets and capsules.
So, a lot of that research goes on behind selecting such products and introducing in the market as a new way of providing the dosage form to the patients. So, that is where a lot of research goes in. And our portfolio contributes largely of tablets, injectables, and soft gels. And we also are in the category where we do creams, gels, ointments, and topicals. We have been focusing on inhalers, which is a very niche category in terms of introducing those products in the market. And, of course, oral suspensions is also one of our forte in doing this.
So, the product that we have been registered is, as I said, the heart of pharma industry is the regulatory and registration of products. I’m sure every one of you would know that the pharma industry is a pretty organized one where today to create the IP or the asset of a pharma company, we need to register those products in each and every country. And based on the approvals, the timeline is around 1, 1.5 year on those parts. And once we have that approval, we start selling our products. So, from day one, we’ve been focusing tremendously on putting as much registrations as possible in the countries that we are present. So, if you see our graph of putting our registrations, you will see there is an exponential increase in the number of registrations that we put in.
And so, then — let me just pull it up. So, currently, I wanted to focus on some numbers so that we have an idea about how many registrations we have. So, right from the inception till now, we have been working in total close to around 1,900 products, out of which we have registered products, 580 products. The products which are under the review of the Ministry of Health of each country is close to around 750 SKUs. And there are already 250 products which are in pipeline. So, those products are already being planned to register in various countries as we speak. So, more or less we have 1,900 plus products either commercially sold or either under approval from different Ministry of Health. And our target is by next three years, we want to put another 2,000-plus products in the market to ensure that our journey or our roadmap for the next three years is being taken care of in terms of having new and very niche molecules in the market.
So, basically from my side, this was a brief that I wanted to discuss it out. And on the other side, we look — as I said before that, in conclusion, I wanted to reaffirm my commitment to driving growth and creating long-term value for our stakeholders. And I’m pretty much confident that our ongoing expansion, strategic investment and focus on the operational excellence will continue. That will, of course, strengthen our position as a leader in global healthcare. So, I once again thank you everyone for being here and me and Anjali and my Group Strategy person are ready to take any questions that you might have from your end. Thank you so much.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] We have first question from the line of Tara Kaur [Phonetic] from VY Capital [Phonetic]. Please go ahead.
Tara Kaur
Yeah. Sir, my question is what were the key drivers behind the extraordinary growth in the revenue? Yeah.
Anjali Shah
Yeah, so the key drivers for the growth in the revenue is one of the reasons the consolidated revenue has grown is on account of our consolidation of financials for our U.S.-based distributor that we have, which is a more higher volume business model due to which has been consolidated for the full period over here. And apart from that, on the standalone basis, the growth is on account of the new commercials that we have made, the new registered product which we have started supplying.
Arpit Shah
So, as I said, previously that as and when we have the registration approval, that’s where our revenues are generated. So, the key is to have as many registrations as possible that would eventually in a year or next year will help us grow our revenues to the next level. So, that’s why the journey has been seeing an exponential growth on that part.
Tara Kaur
Okay. So following to that, my question is that how confident are you that this high growth rate will be sustained over next few quarters or few years? Any potential risk that we are seeing?
Arpit Shah
We are very much confident in terms of — it is a very good question from your side, and we are very much confident that the growth path that we have seen in the graph that we have seen, we would want to carry on that journey on the same level. So, what we have been doing is we are selecting the products where there is less competitors in the market, and we ensure that if there are less competitors in the market that your sustainability of those products in the market is for a longer term. So, that is the reason we have been doing a lot of R&D of the products to make sure that there is always a new product or there is always a blockbuster product every year who ensure that this trajectory does not stop anywhere. So, we’re pretty much confident on having the trajectory in the same pattern as we had before.
Tara Kaur
Siro, you just mentioned about R&D, so I just wanted to know how much percentage of operating expenses, like how much percentage of R&D you are spending on each — maybe on this quarter if we could get a number?
Anjali Shah
So, the R&D cost that we spend currently is around 3% of our revenues. Yes. So, that is around 3% of the revenues on year-on-year basis.
Tara Kaur
Okay. And how many products are in portfolio right now? How many products are in the pipeline?
Anjali Shah
Products in pipeline, as mentioned by Mr. Arpit earlier…
Arpit Shah
So from R&D perspective, in our own R&D, we have a projection of around 150 products for the new development of the products we’re talking about, right? So the R&D facility that we have has a projection of around 150 products that we would want to do. And those are going to be put under registration in the countries that we have been present. So, based on every year, this list is going to be changing every time depending on the marketing dynamics. And our plan is that next three years, we at least have around 800 to 1,000 new products coming out from our own R&D on that front.
Tara Kaur
Okay, sir. That’s all from my side and all the best.
Operator
Thank you very much. We have next question from Babu George [Phonetic], an individual investor. Please go ahead. Mr. George, your line is unmuted. Please go ahead.
Babu George
Hello. Am I audible?
Operator
Yes.
Arpit Shah
Yeah.
Babu George
Sir, my question is, how is the Remus leveraging automation and technology to improve operational efficiency?
Arpit Shah
Okay. Thank you so much, Mr. George. So, what we have been doing is, we have been leveraging our operations on having ERP where all the operations related things are being taken care of in more systematic way. From automation perspective, we already have been working on internal software and internal ERPs to ensure that our operation is smooth enough to take it forward with the growth of business that we are looking in next several years.
Babu George
Sir, are we exploring any new technologies in drug development or production?
Arpit Shah
For drug development, yes, for sure. Yeah. So, for drug development, I thought the question was other way around. So yes, coming back to that, we’ve been working on drug development where, as I said, we are working on extended, prolonged release, extended PFS, we have been working on a prefilled syringe, for a lot of products that requires a new technology to ensure that the patients have the comfort of having those products. We’ve been working a lot on liposomal injections, which again is. For critical care, they have the best results. We have been working on those combinations. So, if you see our portfolio, we have also had a lot of combinational products where the patients take two medicines or three medicines separately, but we have combined the medicines in a way where there is a double combination or a triple combination, and the patient just has to take one, and he’s good for the day. So, we’ve been working on bilayer products as well. They have good absorption ratio in the body. So, yes, these are the things we have been working on from drug delivery perspective.
Babu George
Okay. Sir, my next question is, with the impressive growth in revenue, how is the company managing cost to ensure profitability continues to rise with the growth in the revenue?
Anjali Shah
Yes. So, thank you for the question, Mr. George. So, as you can see that with the current cost, as mentioned by Mr. Arpit earlier, that we are in process of registering products in different regions at different places. So, the cost is incurred over the years that we have already done, and we are getting the approvals today as of date where we are ensuring that the commercial supplies are done on a timely manner with maintaining our gross margins and ensuring that our costs are also optimized at the same time to ensure that the margins are not suffered.
Arpit Shah
And also to add to Anjali is that, so if we have one product and all the documents of the product is ready with us, it is not just for one country. So, we do one product, one dossier, and we go adding multiple markets and register those products. So, if my cost on one product is there, but if I put into multiple markets, it is divided among the countries where we want our presence. So, that also is an advantage to us that we already have these channels in other countries where if we have developed one product, and we pretty much know that is going to work in other markets, then we go ahead and register those products as well.
Babu George
Sir, my next question is, with the remarkable growth we have seen in the H1 FY ’25, how does the company see the second half of FY ’25?
Arpit Shah
We have very strong expectations for the next H2. And what we have been doing is for H2 ’25, we have a reasonable order booking that is already being executed. And we look forward that even for the geographical expansion that we are doing at present, we have a lot of potential to increase those numbers when it comes to next H2 or H1 of the 2025. And looking at the B2C market that we have started, we think that will eventually make our margins much better than the B2B business that we used to do. And just to give you a perspective, that our B2C product itself portfolio by next quarter is going to be more than 200 products. So, we expect a strong growth, and we expect that these B2C products are also going to add a lot of — it will back the numbers and the growth that we are eyeing and expecting.
Babu George
Thank you, sir.
Operator
Thank you very much. We have next question from Priya Jain [Phonetic] from Win Capital [Phonetic]. Go ahead please.
Priya Jain
Yes, hello. Sir, you mentioned that you spent 3% of revenue for R&D. So, my question is how do you expect this to change in the near future? Are you’ll planning to spend more on R&D? Do you like to quote any amount for that?
Anjali Shah
So, quoting an amount rather than that, we are maintaining this 3% since last few years that is on record. And we would like to continue to sustain at that and maintain that percentage in near future as well. There is no major change on that part.
Priya Jain
Okay. So, my next question is…
Arpit Shah
The revenue will increase. Just to add on this that we expect our revenues to increase, right? So with that, our spending in the percentage and absolute life will also be nearby those that we do it every year. So, that’s something that we’ll stick to that calculation for now.
Priya Jain
Okay. Sir, my next question is, how does the company work with healthcare professionals in product development and clinical studies and post-market surveillance? What role do they play in your product innovation cycle?
Arpit Shah
So, for health professionals is related to the B2C business that we started. And our doctors are our health professionals where we not just let them prescribe our drugs, but we do a lot of pharmacovigilance where we get the feedback from this health professional in terms of how our product is working in the market, how patients are happy, what is the efficacy of the product. And those reports are being gathered from them to actually know which are the products that we have been — are we being competitive in terms of pricing, are patients happy with the price, is the efficacy there or not. And in fact, we have been doing a lot of conferences and events to make sure that the doctors does not feel that this is any other company from India coming and selling the products. We pretty much make sure that our products are tested. We do it without the cost and make sure that our products get real-time feedback from the patients. And we make sure that those are the products that we market and ensure that the supplies are there with the patient. So, coming back to your healthcare professionals, our doctors are the main where we touch point and not just — we pinpoint and have connections with the doctors who are pretty much in every therapeutic categories because our portfolio is spread out between 15 different therapeutic categories. So, yeah, that’s what I would want to say on that part.
Priya Jain
Okay. So I have one more question. Can you share any details about your next-generation molecules? Are you focusing on any particular therapeutic areas or disease indications?
Arpit Shah
Correct. So, we’ve been working — there are several molecules I could talk on that, but we’ve been working on one of the PFS that we have been developing, which is, if you might have heard is Ozempic that we have been doing on the generic part, which is semaglutide. It’s a blockbuster product in the U.S. and everywhere else, it’s a talk of the town. So, we’ve been developing those products in-house also. We have been doing ER products where the immediate release products that have been there, and we’ve been focusing that those products can also be developed from extended and prolonged releases as well. So, our pipeline of product is pretty much the newer ones where that is going to be our driving force for next few years to get those registrations. But as I said, Ozempic, semaglutide is the one that we are being very keen on having. It’s already in the process of development. So, we anticipate that once it’s ready, it’s going to add a lot of value to our revenues.
Priya Jain
That’s great. Good to hear. All the best and thank you.
Arpit Shah
Thank you so much.
Operator
[Operator Instructions] We have a question from Gaurav [Phonetic] from India Bridge [Phonetic]. Please go ahead.
Gaurav
[Technical Issues] First question is, you have another group company that’s IPO bound. So, between Remus and Senores, what’s business delineation like? Are they focused on separate geographies or separate segments? Could you throw some light on that?
Arpit Shah
Gaurav, I’m sorry, in between your voice was breaking. So, if you could repeat your question again, I would be very glad.
Gaurav
Sure. So, my question was that you have another company from the group that’s IPO bound. So, I just wanted to learn what’s the delineation between the two companies? Are they focused on separate segments, separate geographies? Is there any crossover? Could you throw some light on that?
Arpit Shah
Okay. So see, as you know, that Senores is something that we’ve already filed — we already have an approval on DRHP and RHP is under the process. So, for me, I would rather refrain from answering anything related to that company.
Gaurav
Yeah. But…
Arpit Shah
Remus and Senores are pretty much different, products are different. Basically, we don’t want to have any of the conflicting on both the sides. And our geographical territories are also different where Senores is more into regulated markets like U.S. and Europe. And for us, we’ve been focusing on the rest of the world market.
Gaurav
Okay, so unregulated…
Arpit Shah
Yeah. Also, the forms of the products that we have been doing is pretty much different from different perspectives. So, if you look at the products that are from regulated markets, are pretty different than the rest of the world products. So, there is nothing that we are coinciding between both the companies.
Gaurav
Sure. And as far as Remus is concerned, I see that there’s very little fixed assets on the books. So, we are largely an R&D and then marketing organization. Would that be a correct assessment?
Anjali Shah
Yes. So, Gaurav, I think the fixed assets that are shown on the books are more of the office-related equipment for the registered office, as well as one of the major cost is for the R&D center that is being set up. And these are the only fixed assets that are there on the books.
Gaurav
Okay. And could you throw some light on the geographical bifurcation of your revenues, probably for the last H1?
Anjali Shah
Geographical revenues, I think more of it — the area that we focus on currently is of the LATAM countries. And apart from that, we also supply to few of the countries, Mexico and…
Arpit Shah
So, I’ll answer it in a pretty shorter way. The reason being is I could list out all the countries that we’ve been doing. But from geographical expansion currently what we have is Latin America is our major of the revenues that’s generated because that was our first stepping stone from the inception of the company. But on the expansion side, we are also having products registered in Africa, Southeast Asia, and CIS. So, from next year and moving forward, the revenues will be generated between these four continents as we speak.
Gaurav
Sure. And you mentioned B2C business also taking form. So, is that going to be largely India-centric or in LATAM?
Arpit Shah
No. So, Gaurav, we are total into exports. So, that will be more focused on the Latin American side.
Gaurav
Okay, so Remus does not have any domestic business then?
Arpit Shah
No.
Gaurav
Got it. So, you will have your own field force to do ethical marketing and all of that. Would that be the right assessment?
Arpit Shah
Correct. That’s right.
Gaurav
Okay. So you would start with particular countries or geographies that you’re already strong from. So, where are those geographies where you are going to roll this out?
Arpit Shah
We’ve already been doing Guatemala, Bolivia, and Ecuador. And we have two more countries to be planned in Q4, if you tell me. So, that’s the plan.
Gaurav
Right. And you’ve seen stupendous ramp up of your revenue. So, I must commend you on that. What are the — I know someone asked this question before, but maybe a little more nuanced. What is it that’s helping us drive such a tremendous revenue growth? If you could mention some points about your strengths in these geographies, or what is it that differentiates you from the others?
Anjali Shah
Yeah. So, Gaurav, I would take this up. So, for the revenue growth, as I mentioned earlier, on the standalone basis, we are growing at the rate of 30.99%. So, basically, the growth is on account of new products that are registered, and we are commercializing those products as well as the existing ones as well, we are supplying it to the new geographies. So, considering both of these factors, the standalone revenue growth is justified, and we continue to do so. For the consolidated ones, as I mentioned earlier, that one of the key factors which is showing the revenue growth is the consolidation of our U.S.-based subsidiary, which is into a distribution business. So, that are the key factors which are driving the revenue growth.
Gaurav
Right. And this slight drop in the margins vis-a-vis H2 of last year is on account of higher contribution from distribution, right? From your distribution entity?
Anjali Shah
Yes. So the consolidated margins that you see, that is because of the distribution business, which was consolidated first time in the H2 of FY ’24.
Gaurav
From H2 ’24 you started consolidated?
Anjali Shah
Yes.
Gaurav
Okay. And what’s the nature of that distribution entity? Could you throw some light please, because you mentioned that you are largely focused on semi-regulated markets. So, what’s the U.S. subsidiary’s focus area and what are they distributing and where are they distributing?
Arpit Shah
Correct. So, Gaurav, our U.S. subsidiary is more into distribution and export of RLD, which in a simpler term is innovator products where those products are being used by a lot of generic manufacturers across the globe. If a manufacturer needs to develop a generic version of a product, then he needs to compare his medicine with the innovator. That’s where we come in where we provide innovator products to — name any company in India, and we might be supplying those products — my U.S. subsidiary might be supplying those products to them. So, in a simpler way, it’s the product where it’s an original product. And then if you want to make a generic product out of it, the manufacturer has to compare it with the original product. So, that’s where we come in. And this business is always, it’s a higher volume, lower margin. So, that’s why you pretty much could see on the…
Anjali Shah
So, one more point to add on this. So, as Mr. Arpit just mentioned that the reason that you were seeing the drop in the margins, the reason is that our U.S. distribution entity is more focused on the higher volumes, lower margins because of the nature of the business. So, ideally this should be like, in overall terms, it is more of a contributor to the ROE than to the EBITDA [Phonetic] levels that you are referring to. So, I think that is a better way to present and refer to the returns that are being earned by them.
Gaurav
Got it. And on gross margin front, so on your actual business, B2B business, what are the gross margins like there? What is the gross margin of the distribution business? And what are the gross margins going to be like once you scale up the B2C business? So in the three segments, what do the gross margins look like?
Anjali Shah
Yeah. So, for the B2B business that Remus standalone does, the gross margins are maintained at 53%, which we plan to continue even with the growth in our turnover. We would like to continue and sustain the said GP. On the U.S. distribution front, as I mentioned that it is a higher volume, lower margin business, so the gross margins are around 8% for us. So, in overall terms, the gross margins are coming around 40%, 42%, which is a sustainable gross margin. And even with the growth in the turnover, we plan to maintain it above 40%.
Gaurav
Okay. So standalone, your gross margin should be 53%, and consolidated, you will have 8% business coming into [Technical Issues]?
Anjali Shah
Yes, 8% of gross margin.
Gaurav
Yeah. And B2C business, where can you take this 53% to if you start marketing yourself?
Anjali Shah
So, for B2C, we are anticipating currently around 65% to 70% of gross margins.
Gaurav
Okay, so what percentage — so maybe FY ’27, because it does take some time for you to penetrate B2C. So, maybe by FY ’27, the year after next, what kind of contribution could we see from your B2C business?
Arpit Shah
Gaurav, so for us, what we have anticipated for the coming years, we’re looking at least from whatever revenues we generate at the B2C business would be around 15% to 20% of our revenues. And from the growth, you were talking about the margin, so we’ve just started this B2C business. So, we’ve been looking at, as Anjali said, is around 65%, 70% of the gross margin that we are working on it.
Gaurav
Sure. Got it. I think most of my questions are answered. If there’s anything, I’ll join the queue. Thank you so much.
Arpit Shah
Thank you.
Operator
Thank you. We have a question from Aditi Roy [Phonetic] from Patel Advisors [Phonetic]. Go ahead, please. Aditi ma’am, can you please be a bit more loud?
Aditi Roy
Yes. Now, am I audible?
Operator
Much better.
Aditi Roy
Congratulations, sir. My question is, how is Remus leveraging automation and technology to improve operational efficiency? Are you exploring any new technologies in drug development or production?
Arpit Shah
I think we’ve already answered this before. Hello.
Aditi Roy
My next question is how have currency fluctuations impacted your revenue and profit growth, particularly in Latin America and other emerging markets?
Anjali Shah
Can you come again? We could not hear your question clearly.
Aditi Roy
How have currency fluctuations impacted your revenue and profit growth, particularly in Latin America and other emerging markets?
Arpit Shah
Okay. So, for us, when it comes to healthcare and medicines, I think the political part does not affect in the industry that we are because everyone who is wanting to — this is a basic necessity of every country in Latin America, be it they are politically unstable or not. But from us, we had some challenges. But for the rest of the year, we think that according to our risk management factors that we take into perspective, we are okay. And we see that there shouldn’t be any problem for the next year as well when it comes to the rest of the world and Latin American markets.
Aditi Roy
Thank you, sir. And my last question is what strategy are you employing to maintain or further expand profit margins in the coming quarters?
Anjali Shah
So, we are planning to, as mentioned by Mr. Arpit earlier, the revenue growth that we are looking at a strong revenue growth. Along with that, we are also planning to maintain the profit margins that we currently have.
Aditi Roy
Okay, sir. Thank you, sir. And congratulations once again.
Arpit Shah
Thank you so much.
Operator
Thank you. We have a question from Jairaj Jain [Phonetic] from EY Capital [Phonetic]. Go ahead please.
Jairaj Jain
Yeah. Thank you for the opportunities. Okay. So can you explain how your tax position or tax planning has evolved, and how does it contribute to the company’s bottom line?
Anjali Shah
So, on the tax part, I think it is the margins that we have, the PBT levels that we have, the effective tax rate for us is around 25%, which is generally applicable to the companies where we are taking the 115BAC. So, that is 22% plus surcharge and the cess. So, the effective tax rate is around that number only.
Jairaj Jain
Okay, great. And can you provide more details on your upcoming models or your products which is in your R&D, and how far are these in terms of regulatory approval?
Arpit Shah
Correct. So, whatever products that are in R&D are on different levels of filing or different stage of readiness of the document. So, if you would ask me which products, we would tend to keep it more close on the molecules that we are working on it. But we’re still in the different part of the process to ensure that the registration goes out immediately on that. So, we’ll have more updates as and when we are there to answer this question.
Jairaj Jain
Okay, sir, great. And thank you, and wish you all the best.
Arpit Shah
Thank you so much.
Operator
Thank you very much. Participants, we will take that as our last question for the day. I now hand the conference over to Ms. Chandni for closing comments.
Chandni Chande
Thank you, everyone, for joining the conference call of Remus Pharmaceuticals Limited. If you have any queries, you can write to us at research@kirinadvisors.com. Once again, thank you for joining the conference. Thank you, sir. Thank you, ma’am.
Arpit Shah
Thank you.
Operator
[Operator Closing Remarks]