SHAILY ENGINEERING PLASTICS LTD (NSE: SHAILY) Q1 2026 Earnings Call dated Aug. 11, 2025
Corporate Participants:
Unidentified Speaker
Amit Sanghvi — SHAILY ENGINEERING PLASTICS LTD
Analysts:
Unidentified Participant
Harsh Shah — Analyst
Anant Jain — Analyst
Mohammad Haris — Analyst
Gautam Trivedi — Analyst
Ankit Gupta — Analyst
Dhwanil Desai — Analyst
Rupesh Tatiya — Analyst
Ritesh Shah — Analyst
Sanjay Kumar Elangovan — Analyst
Aman Thadani — Analyst
Pritesh Chheda — Analyst
Aman Vij — Analyst
Kishore Kumar — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Shiley Engineering Plastic Limited 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 conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Sanghvi. Thank you. And over to you sir.
Amit Sanghvi — SHAILY ENGINEERING PLASTICS LTD
Thank you very much. Good evening and a very warm welcome to all the participants to the post quarter one FY26 health investor call of Shailey. I have with me Mr. Sanjay Shah, Chief Strategy Officer and SGA our Investor Relations Advisors. I hope you had a look at our investor presentation that is uploaded on our website as well as the stock exchange. So let me start with giving some highlights on the operational performance and business Overall in quarter one we have delivered strong revenue growth of 38% year on year to 247 crores with an EBITDA margin expanding by 840 basis points to 28.5%.
The growth is attributable to improved traction in our healthcare segment which shows a growth of 181% year on year to 77 crores. The healthcare segment’s contribution to the overall revenue mix has doubled to 31%. Now giving a brief on business updates in the healthcare segment. In response to increased customer demand, we have installed a capacity which consists of 19 injection molding machines, an assembly line and a printing line to add an additional 25 million pen capacity per annum. We intend to have this capacity expansion completed and on stream by the end of Q2FY26. We have also received plant machinery for the manufacture of an I applicator and have also successfully signed a new contract for supply of pence.
We have officially started the commercial manufacturing of GLP1 of pence for Semaglutide. In addition to the above mentioned capacity expansion, we’re also planning an additional line of 25 million pens for one of our other variants of Semadeen type pen. We plan to invest a total capex of 125 crores for the same in FY26. The said expansion is expected to be completed between the end of FY26 and the beginning of FY27. We’re seeing significant growth on our IP LED platforms going forward. We’re in discussions with multiple customers regarding volume commitments and capacity requirements for the next three to five years and would be aligning our manufacturing capacity and global manufacturing footprint.
Accordingly, Focus is in line with expanding our horizons to include contract manufacturing for medical devices products featuring our intellectual property and personalized packaging solutions. We’re on track with our guidance expecting healthcare business to contribute significantly to our revenue and profitability over the next couple of years, thereby enhancing the organizational value. Coming to the consumer segment, we have been awarded business for the supply of mixed material products, steel and plastic. We have successfully received business for the supply of mail accessories from one of our marquee customers in the FMCG space. We’ve also seen an improvement in our carbon steel business for the year.
Revenues from the overall segment grew by 14% year on year 251 crores. We have good visibility across our business segments and confidence to expand our regional performance. That is all from my side. I shall now hand the call over to Sanjay Shah to give you the operating and financial highlights. Thank you very much. Good evening everyone. Thank you Amit. I shall share with you the highlights of our operational and financial performance of Q1FY26 following which we will be happy to respond to your queries. During Q1FY26 we processed 7016 tons of polymers is against 5,902 tonnes in Q1FY 2025.
Machine utilization rate has improved to around 49% in Q1FY26 as against 39% in Q1FY25. We expect utilization levels to improve quarter on quarter. Exports during Q1 FY26 stood at around 76% of total revenue. I shall now brief you on the consolidated results for Q1FY26. Revenue stood at 246.7 crores as compared to 179.4 crores in Q1FY25, a growth of 38% year on year. EBITDA is nearly doubled to 70.4 crores as compared to 36.1 crores in Q1FY25′, a growth of 95% on year. On year basis, EBITDA margins have improved to 28.5%. An increase of 840bps on year on year basis.
PAT has grown to 41.1 crores as compared to 17.4 crores in Q1FY25 showcasing the growth of 136% on a year. On year basis, VAT margins improved to 16.7%. An increase of 700 on year. On year basis. Cash back stood at 52.6 crores as compared to 27.6 crores in Q1FY25 growth of 91% on a year on year basis. Now coming to consolidated segmental revenue breakup for Q1FY26. In the consumer segment, revenue stood at 151.4 crores as compared to 132.8 crores in Q1FY25. A growth of 14% year on year. In the pharma segment, revenue stood at 77.2 crores as compared to 27.4 crores in Q1FY25.
A robust growth of 181% on a year on year basis. Industrial segment revenue growth stood at 18.1 crores as compared to 19.2 crores in Q1.25. We saw minor DE growth on a year on year basis. This is all from our site. Now we can open the floor for Q and A. Thank you.
Questions and Answers:
operator
Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. First question is from the line of Harsh Kesha from Dalalayan brochure. Please go ahead.
Harsh Shah
Thanks for the opportunity. Firstly, congratulations on a strong execution. I have few questions. So firstly, in the healthcare division. So the capacity that you mentioned, right. The 25 million getting executed, you know, coming on stream by Q2 and another 25 million at the end. In between the end of this financial year and the starting. So is it the number that I’m putting out, correct. That our capacity at the beginning of FY27 would be around 90 million pens in totality?
Amit Sanghvi
No, no, it will not be 90 million. The effective capacity will be closer to somewhere between a 70 and 75, 80 million.
Harsh Shah
Okay, so this is post expansion. Then what is the current capacity then?
Amit Sanghvi
With the. With the expansion that. There’s two expansions, right? One that goes on stream by Q2 FY26. With that it’s about 3,045,000,000. And with the additional 25, the effective capacity will become 70 to 25 million.
Harsh Shah
Got it.
Amit Sanghvi
Okay. You have to keep some space here for changeovers. And you know, the effective capacity is what we intend to manufacture and sell. And essentially it’s never going to reach 100% of what we’re installing.
Harsh Shah
Correct. Got it. And also if you could help us quantify saying Q1, what is the number of pens you have sold and if you could split that between say GLP1 and non GLP1?
Amit Sanghvi
Good question. I actually don’t have that on the top of my head, but we can come back to you guys. I’d say the quantum of what we’ve sold in quarter one is our IP LED devices which contains a mix of GLP1 and insulin, again with GLP1 taking the lead, which means, you know, close to 60% will be GL, 60 to 65% will be GLP1.
Harsh Shah
Got it. And also, I mean if you could give some color in terms of, you know, how the momentum is building in terms of new clientele for GLP1 pen. So basically where I’m coming from here is that are you facing any situation wherein you know, your existing customer are demanding more capacities as against, I mean what probably you would have discussed earlier on and I mean, I mean it is safe to assume that by the next financial year, say BFY27, the capacity, the effective manufacturing capacity that you are putting up should be more or less kindly fully utilized.
Amit Sanghvi
It’s hard to, you know, it’s really hard to give an answer when the product has not launched yet. Customers are discussing increased capacity, wanting more product or having adequate buffer to cater to the potential upside. Many such conversations are happening, many such conversations are being negotiated into commitment and contracts. But as far as 27 goes, whether we’ll fully utilize the 70, 75 million capacity that we put up, it’s very hard to answer that right now. But there’s obviously some math and commitment behind setting up the capacity. So we feel that given a 24 to 36 month kind of time frame, capacity is obviously going to be fully utilized.
Harsh Shah
Got it. Last question from my side. So on the consumer part, I believe the US as a geography for us remains to be a very large one. So how has been the response from the end customers in terms of the order ramping up or you know, are you facing any sort of, you know, a delayed ramp up or maybe orders getting cancelled or anything of that sort? Some color on it would be very helpful.
Amit Sanghvi
No, sorry, go ahead. Suharsh. Around 16% of revenue comes from us which is spread across consumer and industrial. Currently we are not seeing any delays or any request from customer to for change in orders or something but a fluid situation. You really do not know how things will pan out. So I think we will probably know the next 60 to 90 days in terms of how things are panning out. If you ask us today, I think we are currently making shipments to us as we were doing earlier.
Harsh Shah
Got it. And lastly on the consumer electronic part. So just wanted to pick your thought any role that Shelley may play saying the PLI scheme for component manufacturing, anything of that sort. I mean, I mean is there a possibility or if you could give some color on it.
Amit Sanghvi
The PLA is very specific for components. Specific for specific components. What we would be looking at is doing multiple components so we will have to look at in that perspective. I think basically you know you have the CapEx incentive and sales turnover. The CapEx incentive the deadline has passed and you know, so that that is no longer applicable to us but we will be applying for a sales turnover incentive.
Harsh Shah
Got it. That’s it. From my side. I’ll get back in with you. Thank you.
operator
Thank you. Next question is from the line of Anand Jain from hni. Please go ahead.
Anant Jain
Congratulations on a great set of numbers and thanks for the opportunity. My first question is on the tereparatide launch by a customer and when do you expect or when can we expect the first sharely owned IP product in the market? It’s almost been a year that we had thought it would come in so that’s the first question. Second question is how are our new lines coming up? Any challenges that you are seeing to run our lines at 80 parts per 80 bpm and even 160 bpm. How. Much of a capacity is current? 40 million and eventual 70 to 80 million are backed by customer commitments and how much are backed by customer commitments and how much are backed by customer advances. If you could just give that what is the market share in terms of number of customers filing for Canada, Brazil, India like separately like if There are like 10 customers filing for Brazil then how many are through a shared UIs? Are we also looking or any of our customers looking to launch a pen in China as well? You mentioned in the call that you know there is one new customer which got added for GLP1 in Q1 FY26.
Which platform is this customer on? And in general is it fair to. Assume that you know or if you could give some idea which platform is the most used platform or most platform that the customers are looking to go with as of now I have many more questions but I think if you can answer these and I will come back with later time permitting.
Amit Sanghvi
Terry Paratide launch really fingers crossed there’s no further CRLs to our customer should be this year, this calendar year at least. I don’t know, I don’t know what the timing are but we have obviously supplied batches. Now it’s about just when they get approval to launch. That’s to the first question. Second was on capacity on the lines.
Anant Jain
80 ppm and 160 ppm.
Amit Sanghvi
Our 40 ppm line. Our 40 ppm line is running actually quite well. We have an overall equipment effectiveness of roughly 81 to 82%. That is what we expect from the new lines as well. So we think somewhere you would max out at 85% uptime. So the OE is never going to go beyond 85%. It will be somewhere between 80 and 85%. Does that answer the question?
Anant Jain
No, I’m more interested in the newer ATPM and 160 ppm line is.
Amit Sanghvi
The 80 ppm line will now be installed. So we have not installed it yet. The ADPP line is going to go on stream over the next 60 days.
Anant Jain
Okay.
Amit Sanghvi
And I think it will be at least six months beyond which we will be able to comment on what is the overall efficiency that we’re getting. Your third question was what is our most capacity and also for backed by. Yeah, out of the total, let’s say 70, 75 million pens that we are setting up capacities for, I’d say somewhere between 50 and 60 would be backed by commitments. And again, you know, they’re not. The commitments don’t run exactly a financial year. They would run a period. So it could be more in some years, potentially less in some others.
You know, it’s hard to comment right now, but let’s say 50 to 60% is backed by some sort of a commitment. Third, sorry, fourth question was regarding customers for Brazil. Canada, India. I think I can comment on Canada. Brazil again, our customers also license to other pharma companies. Now that information is not always updated with us particularly so I’ll let Brazil be. But I think in Canada, if you look at all the filers which are available in the public domain right Now, I’d say 70% are ours. I’d say 60 to 70% are Shelley’s.
Anant Jain
India.
Amit Sanghvi
India again, you know, we would have a very significant share. That number should remain more or less the same across various geographies. What was the. Do you have any customer taking the pen to China? Do we have a customer taking the pen to China? Not that I’m aware of right now.
Anant Jain
Which platform is the new customer that got dangled?
Amit Sanghvi
Nio. And Nio is likely to be our highest selling platform over the next five years.
Anant Jain
So one or two more questions, which. Is for how many customers did we supply? Tilzay Exhibit batches we have supplied in Q1 and we will supply for the rest.
Amit Sanghvi
Sorry, can you repeat the question please?
Anant Jain
Can you give some information about till the exhibit batches that we have supplied for how many customers?
Amit Sanghvi
I mean this has been over the last, over the last, I guess 24 months. Is that the question?
Anant Jain
Last one or two quarters?
Amit Sanghvi
I’d say probably. You know I think even same customer. As new variants of Semaglutide are added by the Innovator we also supply those variants to existing customers. Right. So effectively today I think There are now 11 variants of semaglutide across various strengths and cartridge sizes. So I would say last two, three months you would have supplied to three customers exhibit batches.
Anant Jain
Okay, last question from my side is this I applicator plant and machinery supplied by the customer. How big is this opportunity for us and when can we start or when can we start seeing this in numbers?
Amit Sanghvi
We are, you know, we’re in the process of qualifying the full asset base. Post qualification is an approval time, not a very long approval time but I think by Q3 we should start supplies of the. Sorry, Q4 we should start supplies. Q4 we should start supplies of the applicator.
Anant Jain
What would be the size, annual size of this product?
Amit Sanghvi
I mean I think at maturity it’d be somewhere around 25 crores of. 25 crores of business.
Anant Jain
Okay, that’s it from my side. Thank you and once again all the best.
Amit Sanghvi
Thank you very much. Thank you.
operator
Thank you. Next question is from the line of Mohammad Harees from Monash Network Capital. Please go ahead sir.
Mohammad Haris
My questions pertain to the current pen capacities we have. So can you give the split between GLP and non GLP and also our own IP pen platforms and third party and on the additional capacity we are setting up could you give the same split as well? Thank you.
Amit Sanghvi
I think when you look at the current 42 ports per million capacity, it’s fungible between our own and contract manufacturing. So that capacity is fungible effectively. You know at the end of the year or let’s say by beginning of 27 we’ll have roughly 45 million GLP1 pen capacity and balance in non GLP1 and all the new capacity which we are creating is basically for our own.
Mohammad Haris
Okay, and can you also share the incremental capex that would be done over this financial year and the next one and including the current.
Amit Sanghvi
There was part of my speech that we’re doing 126 crore CapEx.
Mohammad Haris
Okay, and last question is regarding the CapEx we are doing will be inquiring land costs in terms of be doing. The expansion will be greenfield or brownfield.
Amit Sanghvi
We don’t require any land. Additional land for the 25 crore capex is being done in the current plant for which we have a building which is there. And any new expansion which we do also will always be greenfield but not be okay.
Mohammad Haris
And if you could also mention the utilization figure for the pharma segment that would be helpful.
Amit Sanghvi
We don’t report that individually. We report utilization only at the computer.
Mohammad Haris
Okay, thank you for the answer. Yeah, that answers my question.
Amit Sanghvi
Thank you.
operator
Thank you. Next question is from the line of Gautam Trivedi from Nepean Capital llp. Please go ahead.
Gautam Trivedi
Yeah. Hi Amit. Hi Sanjay. Great set of numbers and really amazing progress. Question I had was with respect to the diabetes and you know, GLP1 in particular, you know India clearly is. Unfortunately. 100 million diabetic patients, probably another 30, 40, 50 million who haven’t got themselves tested. So the market clearly is vast. The question really is with respect to injectables versus tablets, what’s your view on that? Because the prices will come off starting January 2026. But how do you view that? And is that potentially, I wouldn’t use the word cad, but is that something that could potentially impact your ability to add more capacity?
Amit Sanghvi
So I will answer that Gautam in two ways. First is citing the latest published study by Lilly on or for Glyvron which showed only a weight loss of 12%.
11%. Sorry, that’s the first thing. So fairly significantly under the actual numbers of injectables right now. Second, I think again I’m not. In. The business of doing pharmaceuticals but what I understand from the experts in the industry is that bioavailability of the oral is 1/10 or 1/8 of the injectable which means the effectiveness is very low. And therefore when you look at the orals you see a very significantly higher API content in the tablet. Even what I believe nowhere is going for in the U.S. if I’m not mistaken, it’s a 25 or a 50mg daily tablet against the highest dose which is currently available in injectable is 2.4 milligrams for the whole week, once a week. So you see the economics.
So 50 times 7, 350 milligrams in a week versus 2.4 milligrams in a week. The math really has to add up. Now will tablets, orals take a market? Yeah, I think orals are predicted to have somewhere around 20 and 25% of market share. That’s always going to happen. I believe injectables for the foreseeable future will continue to dominate especially when orals are only going to be available from innovators. You will definitely see injectable domination on the generic side. Okay, understood. That was it.
Gautam Trivedi
Thank you so much.
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 and congratulations for great set of numbers on the pharma front. You know we have recorded almost 75 crores of revenue for the quarter. Given how the launches are expected, the pre launch quantities that will be supplying going forward in, you know, Q2, Q3 and Q4 can expect that. You know this, this will be the new base for the pharma and we should start doing from this and in the subsequent quarters.
Amit Sanghvi
You’re right that this is the start of it and bulk of our revenues on the pharma business in terms of GLP1s will happen in Q3 and Q4. So you should look at higher revenue from the pharma business as we move forward.
Ankit Gupta
And on the consumer electronics side, have we got any approval from some for our products from our customer and do we expect some of the revenues to start from FY26.
Amit Sanghvi
Without commenting on any specific project or customer? We do expect to accrue. We do expect to start revenue either by the end of this year or early next year.
Ankit Gupta
Two questions on the technical side. As you were saying, NIO is expected to be our very good product. So have you done any comprehensive use human factor studies for this pen? And you know how is, how has been its error rate compared to the RLD device or the Innovator device?
Amit Sanghvi
Have we done it? No, we’ve done, I mean yes, we have customers who’ve done the human factors on our devices. And the best thing about the NEO is that it doesn’t actually require human factors because it’s a like to like. It’s not a device with any differences against the Innovator. Which is why you don’t. The other mechanical devices require comprehensive human factor studies to prove that they have the same rates of error as the Innovator whereas the NEO doesn’t because it’s a string driven device. Having said that, yes, we have data available which tell us exactly how the user behaves with the device.
Ankit Gupta
Sure. On one thing on the you know, pen assembling and fill finish speeds, you know like what we understand is from the fill finish side as technologies Evolve the pen assembling speeds, speeds improve. So are our pens able to sustain higher PPM speeds compared to our competition? And if yes, what is the maximum BPM that pens can support?
Amit Sanghvi
I think the pens can very well support 300, 400 or 500 parts per minute line where we have not tested it. I think our largest line that our customer have procured is 160 parts per minute line. So I don’t see a challenge in terms of Penn not being able to manage high speed assembly line. It’s designed for high speed assembly. And you have to keep in mind the NEO is a, is an in licensed product. Right? So the NEO was developed by one of the largest innovators in the world, experts on pen devices and it’s an in licensed product which means it is very capable of running at upwards of 3, 400 parts a minute.
Ankit Gupta
Okay, okay, this last question. Do we make our cartridges PFS in house and like if not like our pen compatible with PFS cartridge from just one player or two, three tiers or multiple players.
Amit Sanghvi
Our pens are compatible with the ISO standard of cartridges. So there’s a ISO standard for 3ml, 1.5ml, 1.8ml cartridges. Our pens will be compatible do with all of them.
Ankit Gupta
But we don’t make them in house.
Amit Sanghvi
No, I mean we don’t do any glass manufacturing. So.
Ankit Gupta
Yeah. Yeah. Okay. Okay, thank you.
operator
Thank you. Next question is from the line of Daniel Desai from Turtle Capital. Please go ahead.
Dhwanil Desai
Hi, good evening everyone. So my first question is regarding Shelby uk. So if you can give some sense in terms of, you know, number of customers added, number of new projects and you know, whether anything on the innovator side and also our employee cost has increased as significantly because we were hiring, you know, a lot of people there at a, you know, top level. So when do we see the, you know, resultant increase in that business? Shady UK Dubai so how should we look at that from FY26? FY20.
Amit Sanghvi
I mean we’ve got some very nice projects ongoing in Shiley uk. Some are confidential, which I will not be able to comment on, but we have a new product launch coming up at CPHI in October in Frankfurt. We’re very much looking forward to that product launch. It’s what we think is the next generation of GLP1 devices and it’s targeted towards large innovator pharma. So you know, there’s a lot of user research and studies have gone into coming up with a set of functionality for that device and we Intend to showcase it at CPHI in October.
Dhwanil Desai
Oh, that’s very encouraging, sir. So for such products, do we work our design team works on their own or does it, you know, is it based on the feedback from some innovators with whom we have done this tie up and we are jointly developing this product?
Amit Sanghvi
No, we’re not jointly developing it. We work on technology ourselves based on user research feedback. Looking at, if you look at the MOD database, it will essentially have information on issues with the current devices on the market. You look at human factors videos, you get a sense of what is lacking. So you then look at trends of what people are patients are generally doing and which is what you base your device on. Add sustainability to the equation and then you come up with a set of traits that you want in your device and that’s how we’ve developed it.
Dhwanil Desai
Got it, sir. On the industrial side I think we were, you know, we had won that large projects and on the north side also our supply had started. But on Q1 FY26 I think we saw a slight negative growth. So can you help us understand, have we lost some business or it is just a shift of a business from a quarter to quarter?
Amit Sanghvi
We have not lost business. A lot of this also depends on if you look at quarter one, we had a launch happening in quarter one. So we had large volumes in quarter one last year, which has evened out in the current quarter. But otherwise our business continues to remain steady and we can continue to add business there.
Dhwanil Desai
Okay, got it. And sir, you talked about, you know, some improvement on the carbon steel business. So you know, are we expecting break even this year or, you know, and I think eventual goal was to these two company level, you know, or at least consumer side of the business level, margins over period. So how should we look at that business for this year and next year?
Amit Sanghvi
The return level, we were positive last year. We hope that we would be at a net level. We’ll probably end the year on a positive basis. We see if you look at it, we have added businesses in the last two quarters which we should be commercializing between quarter three and quarter four. So you would basically see again revenue going up from quarter four onwards into next year. Simultaneously we are looking at adding more products and adding volumes on existing products. I think revenue should go up next year also.
Dhwanil Desai
Okay, very good to hear, sir, thank you.
operator
Thank you. Next question is from the line of Rupesh Tatia from Srirama Managers pms. Please go ahead.
Rupesh Tatiya
Thank you. Thank you for the opportunity sir. And congratulations on a fantastic Results, I have few clarifications on to the responses you gave to one of the earlier participants. So first, I mean one question, sir, is these 10 assembling devices that the fill finish formulator guys have to buy the three, four vendors is my understanding Proxlon is there, EMA is there, Micron is there. So are these guys now able to provide an assembling machines to the fill finish formulators? Is there like one or now many of them can provide an assembling machine.
Amit Sanghvi
I mean you’ve got a dozen companies who are maybe less than a dozen, but close to 10, 12 companies globally. You have ATS, you have EMA, you have Micron, you have Hero, you have Team technique, you have top lawn out of China. I’m sure there’s three or four more available, but yeah, they can all provide an assembly machine. So. Sorry, is that the question?
Rupesh Tatiya
Yeah. So I mean there will not be any supply issue, right. If the film finished guys want a machine to assemble shell pen have already, you know, ready machines for Shelley Neo, Shelley Harmony. Everything is like sorted from supply chain point of view.
Amit Sanghvi
Ready machine, they’re ready platforms and the platforms then need to be customized for the device. And one machine can handle multiple devices, but again, it has to be designed in that manner. Having said that, I think machine manufacturers are quite busy right now. So is there a capacity constraint? I’m. I don’t think there’s, there’s free capacity available anyway, so you’d have to, customers would need to plan this. Well. Okay.
Rupesh Tatiya
Okay. Yes, sir. So the other, other question is for Shelley Leo. I mean you, you are very confident that it’s similar to RLD device. And I think in one of the older calls you have said that you. Have taken a lawyer opinion that we. Will pass any patent challenge. But. If, in case. In Canada do you expect the patent challenge and in case, let’s say in those cases we don’t pass through the patent challenge, then do you have the cuhf, you know, regulatory support that you can provide your customers after the patents expire? I mean, I know some of these payments will expire in 26. So there are two questions there, so. Can you please answer those? Yeah.
Amit Sanghvi
What is the question again? Could you, could you repeat? Like, I think regulatory support for a patent challenge is not really needed. We provide regulatory support to our customers. Anyways.
Rupesh Tatiya
In Canada, do you expect patent challenge for Shelley Neo?
Amit Sanghvi
No, I don’t. But patent challenge will depend on, you know, there’s nothing that prevents someone from litigating against one of my Customers, there’s a lot of extensive FTO work done on the pen and not today. This was done, you know, over the last three years customers have verified the FTO against their with their own attorneys and you know, so I feel good that we shouldn’t have any. And again, having an FTO doesn’t prevent someone from litigating anyways, so.
Rupesh Tatiya
Okay, okay. And then let’s say in my understanding is some of the spring related patents expire in June or July 26 in Canada. So let’s say if we are some by in unfortunate scenario, we can’t launch till July 26. After July 26, if regulator asks you for a CUHF user. User study, Formative CUHF study. Have we done that study? And you didn’t answer to earlier question, how is our rate compared to what is our user error rate compared to an RLD device?
Amit Sanghvi
Again, my question to you, Rupesh, is that what does a user study have to do with a patent challenge? I mean the regulator is not concerned with patents. The regulator is concerned with the effectiveness of the therapy and then approving it. Okay, am I understanding this incorrectly? Maybe.
Rupesh Tatiya
Your pen would be different, right, sir, in. In case your. If your pen is being different from the Innovator, then you have to do.
Amit Sanghvi
It’s not different. That’s what we’re saying. The Neopen is not different than the Innovator.
Rupesh Tatiya
But then if this is not different, then there might be. So that’s. I was both sides of the equation.
Amit Sanghvi
Just because it functions the same way as the Innovator does not mean that the internals are the same as the Innovator. I mean, you know, there’s seven mechanical pens or 10 mechanical pens on the market today. Each function the same way, but the internals are all different for each of them.
Rupesh Tatiya
Okay, okay, clear. Clear, sir. And then my final, final question, sir. Is in Brazil, Begovi will be launched with Ozempic or it will be launched maybe a year later. There is some technical issue there. Maybe if you have some view on that.
Amit Sanghvi
Good question. I actually don’t know, but there’s a possibility to launch together and there’s also a possibility, depending on when the customer has filed the individual variant, that it comes on stream a little bit later. Okay.
Rupesh Tatiya
Okay. Yeah. Thank you. Thank you for answering one question.
Amit Sanghvi
Thanks.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the question queue, please restrict your questions to two per participant. Should you have a follow up questions, please rejoin the queue. Next question is from the line of Ritesh Shah from Investech India. Please go ahead.
Ritesh Shah
Hi, thanks for the opportunity. Congratulations on a good set of numbers. So first question is have we started to take advances from the customers either for capex or on commitment of capacities? If you could quantify those numbers that would be great.
Amit Sanghvi
No, that is confidential Ritesh.
Ritesh Shah
But okay, but are we progressing on. Taking. Money from clients? Is it for Capex or is it for volumes like. Or is it both?
Amit Sanghvi
Money from any customer for CapEx we basically, you know, it’s a business agreement that, okay, if someone is committing an X volume over a period of time then the commitment towards that volume, you know, towards supply, basically.
Ritesh Shah
Okay, so nothing on the CAPEX side. Great. Okay, my second question is why is it that you’re not looking at capacities beyond 100, say 100 to 200 given the lead times to set up the machinery and stuff that we do, the lead times are quite long. Any particular thought process or we just would prefer to be conservative?
Amit Sanghvi
No, we are looking at large volumes. The only thing is that we don’t think having one line with 300 parts per minute is a good idea. So we’ve done a lot of evaluation on capex versus cost and complexity and we’ve figured out that the most optimal capex cost is actually at 80 parts per minute. So we will have multiple lines of 80 parts per minute but never go into 300 sort of first just to give you an understanding cost difference between an 80 parts per minute line to a 300 parts per minute line is in the region of 5, 4 to 5 times.
Does it make sense?
Ritesh Shah
Okay, okay, but my question was more from going from 100 million pence to 200 million pence, the manufacturing capacity assuming 80 is constant.
Amit Sanghvi
Yeah, I mean we will do the capacity addition, you know, as and when we feel we see the commitments from customers coming in and I think all of our customers know that we have an 18 months lead time to add capacity.
Ritesh Shah
Right, but I would presume like if we have given certain numbers of effective capacity, say 75 to 80 million by FY27 a good part of it would already be booked by the customers. Wouldn’t that be the base case?
Amit Sanghvi
Yes, that’s what we said in the call as well, that yes, there is commitments based on which we are building the capacity and yeah, but you know, like I said on my call, there’s a product hasn’t launched yet anywhere. So any number that anyone gives you is, can change, can be very high or could be low. We really don’t know.
Ritesh Shah
Okay, so what will be a milestone that we will look at on this? 80 million basically. What is the milestone by when we will actually look to go ahead for the next big phase of expansion?
Amit Sanghvi
Us signing on maybe capacity contracts. So as we sign them on, we look at how much expansion we need to do over the years and when those expansions need to come on stream. Sure.
Ritesh Shah
And last question. Is there any update on any large orders or any work we are doing for any consumer electric companies?
Amit Sanghvi
No, no update. I said the previous question. One of the previous questions I answered was that we should see some revenue end of this year, beginning of next year. But apart from that there’s no update.
Ritesh Shah
Sure. This is quite useful. Thank you so much. All the very best. Thank you.
operator
Thank you. Next question is from the line of Sanjay Kumar Ilan Gowan from I thought pms. Please go ahead.
Sanjay Kumar Elangovan
Hi sir, congratulations on very good numbers. First question, just a follow up to a previous question. So you said 50, 60% of capacity is backed by customer funding. So let’s say if our capacity is 70, 75 million, does it mean FY27 we can do like 35 millions. If these customers get approval irrespective of their market sales offtake, whatever that is.
Amit Sanghvi
If we set up the capacity, we have the capacity to manufacture. But it’s very important the customer, customer gets approval and has the volume. Right. Without that, who am I going to ship to?
Sanjay Kumar Elangovan
Yeah, I understand that they have to get approval but once it’s in place, we will start supplying them. I’m just trying to understand what this customer backing is. Do they pay for the volumes or do they pay for the minimum of take agreement, something like that or.
Amit Sanghvi
Yeah, okay. Yeah. So most of them would be take or pay contracts. Some would, we would.
Sanjay Kumar Elangovan
Add volumes, right?
Amit Sanghvi
Yeah. Again they don’t have to take 100% of the volume that we are building. We build an upside for the customer as well. When we get into such contractual, you know, agreements. So we keep an offside buffer for the customer. If the market is expands a lot faster than they’ve anticipated. Kind of a realistic number or pessimistic number, that is what an agreement is based on. Then the capacity is based on what we think is going to sell. If a customer comes back and tells us it’s taking me some time for that approval, we’ll obviously wait for that approval customer, which is what we’re doing on territory.
Sanjay Kumar Elangovan
So what would be the realistic number for FY27, sir?
Amit Sanghvi
So again we will comment after product Launch. I know the numbers for this year which is building up for product launch but then that stock needs to be consumed. Right, so we will comment on that only towards the end of the year.
Sanjay Kumar Elangovan
Okay. Second 77 crores from healthcare in Q1. Will Q2 have a similar run rate. Or were there any one offs in Q1?
Amit Sanghvi
There are no one offs in Q1. No, no one offs and Q2. I mean yeah, we should do well in Q2 as well. Run rates so far so good.
Sanjay Kumar Elangovan
My final question is on Canada so far five filings according to the regulator’s website. Of these five, how many are it? As I understand that there are two Indian companies. Are they both?
Amit Sanghvi
I. I think we have 60% of generic market share on Semaglutide across the markets that are opening up.
Sanjay Kumar Elangovan
Okay, but any and any customers launching Vigov when the patent expires in Jan or March 2026 or is it only Ozempic?
Amit Sanghvi
I think most customers have filed Ozempic first and we go vi later. So it will follow the same process likely to get approval for Ozempic first and we go, we.
Sanjay Kumar Elangovan
Okay, okay, final question. Sorry. So Harmony is, I understand NEO is very similar to the Innovator spend but Harmony is a different spend. Right. So have you done such a metrics similar to the innovative spin in Harmony and do you see any risk in our customers getting approval with Harmony?
Amit Sanghvi
How many? We’ve done the, you know, very detailed human factor study so we have proven to the, to the authorities that the success rate error rates are set out the exact same as the Innovator. So yeah, I think, I mean so far regulators haven’t raised any concerns so I think safe to say that we should be in a fairly good position.
Sanjay Kumar Elangovan
Okay, so the 25 million initial capacity CapEx that we’re doing is for Harmony.
Amit Sanghvi
And guessing we’re doing 125 million for Harmony and 125 million for Neo which is the NEO comes the NEO capacity comes in at the beginning of FY27.
Sanjay Kumar Elangovan
That’s it for this. Thank you. All the best.
operator
Thank you. Next question is from the line of Aman Thadani from Solidary Investments managers. Please go ahead.
Aman Thadani
Hello. Am I audible sir?
Amit Sanghvi
Yes.
Aman Thadani
Thanks for the opportunity. Most of the questions have been answered. I have this one question. So the margins in the services business has been declining the healthcare services. So just wanted to understand the key reasons behind it and when do you. See it turning back to again 70%. EBITDA margins that you have done in the past.
Amit Sanghvi
So there are Two things to it, we’ve been adding people there for development. So we are having a higher employee cost and we are expensing that out as we speak. So that’s one reason for the higher employee cost. I think you will see the margins improve on the service side from this quarter.
Aman Thadani
Got it. So a follow up to that is since we are investing behind people and new products and we are going to demonstrate that in the CPhA as well. So could the future for the segment in terms of growth be meaningfully different versus what it has done in the past?
Amit Sanghvi
Yeah, because our look, our primary objective now is to target big pharma while we scale up, you know, what is the pipeline. In the pharmaceutical business you need to have a kind of a 7, 10 year game plan. Even if it changes frequently, you still need a game plan. So the strategy is very simple. You scale up the businesses and the products that you’ve developed simultaneously need to look at developing breakthrough stuff on which there isn’t a like to like device out there to target big pharma with their next generation of therapies. Now GLP1 is one area but there are many other areas that we are doing innovation in as well.
So core objective is to spend more on innovation and come up with new technologies. I mean look, pens have sort of become me too products now. Right. Because of the GLP1 market and how large it is, everybody wants to do pens. So we need to develop the next generation of drug delivery, connected drug delivery. You know there’s a lot that goes on. There’s a lot that is going to change in the industry. And our target is big pharma.
Aman Thadani
That’s fair. Sir, thank you so much for the opportunity. Thank you.
Amit Sanghvi
Thank you.
operator
Thank you. Next question is from the line of Pritesh from Lucky Investments. Please go ahead.
Pritesh Chheda
I just want to clarify the expansion. So we called out 70 million pen capacity by the end of this year. And did we call out another 125 crore to be invested for another 35 million pence? That’s how it was.
Amit Sanghvi
No, no, no, no, no Prish. We are investing 125 crores over the next 12 to 18 months for the 50 million capacity which is being created in two steps. 25 million. 25 million.
Pritesh Chheda
No, sorry, you need to come back again. 125 crore to be invested over 12 to 18 months. Correct.
Amit Sanghvi
25 million capacity is coming on stream. Let’s say end of this quarter. Right. End of the current quarter. The other 25 million he will come on stream in Q1 of FY27. So with these two it’s. It’s 125 crore investment that we’re looking at.
Pritesh Chheda
So the 20 million to 17 million is basically all inclusive is basically this 70 million. That is correct. 70 million. Okay.
Amit Sanghvi
70, 75 million. You know it’s hard to put an exact number but yeah, somewhere in that range. Please keep a 15% error.
Pritesh Chheda
Okay. So as of now the expanded capacity will be 70 million by the end of quarter four or quarter one. 27. Whatever.
Amit Sanghvi
Be the correct. Correct.
Pritesh Chheda
Okay. Okay. And what kind of. So this 70 million pen or 75 million pen capacity. This will operate at 80% utilization or this is equal equivalent to that 80% utilization. 70 million.
Amit Sanghvi
Yeah, yeah, it is equal to the 80%. Yeah, exactly. So 70 million is the 85. 80. 80. 85 capacity.
Pritesh Chheda
Okay. And this capacity in your best. Yes. You should be utilizing it fully in FY28.
Amit Sanghvi
Yeah, that’s the target. That is our estimate also. But can we start earlier than that? Can be. Earlier can also be. I mean that’s what we’re basing our projections. So pritesh, a lot of it will depend on when launches happen and how is the response to those launches.
Pritesh Chheda
Yeah. So based as of now, based on the best.
Amit Sanghvi
Yes, that’s what I asked. Yes. Yes, you’re right. That’s what our internal target is as well.
Pritesh Chheda
Okay, thank you sir. Thank you.
operator
Thank you. Next question is from the line of Aman VIJ from Astut Investments Management. Please go ahead.
Aman Vij
Good evening sir. I had two questions. One on the pharma business. So terzipatite exhibit batches was supposed to happen in Q1. So did it happen or do we expect it to happen in Q2? Now that is the question on pharma.
Amit Sanghvi
It happened in Q1 and it is also ongoing right now.
Aman Vij
Okay. Okay. But we, we had, we were thinking of applying to two to three customers. So that will happen eventually in the next 1, 2, 3 quarters, right?
Amit Sanghvi
No, I mean I think with the SC minus one date it has to. All supplies need to finish by I think last would be end of October. You cannot go beyond end of October.
Aman Vij
Okay.
Amit Sanghvi
If you are. If a customer is targeting NC -1.
Aman Vij
We have only three customers for it right now, right?
Amit Sanghvi
Correct.
Aman Vij
Okay.
Amit Sanghvi
We don’t know targeting NV minus one.
Aman Vij
Okay. Okay. But now it will be too late for anyone to approach you and we target that.
Amit Sanghvi
Oh yeah.
Aman Vij
Okay. Okay. Second set of questions is on consumer business. So it was interesting to hear that there’s this mixed metal business which you won. I think that was a plan from a long time. Could you talk about is that business scalable like the carbon business? Even bigger opportunities there. What kind of like if you can paint a picture for next two to three years for this particular segment Because I believe this is a very big market.
Amit Sanghvi
Look, if we put aside, you know, what’s going on globally, economically for a second, then the business is very scalable. There’s enough opportunities to do mixed material, many, many products where you do plastic and metal together. So certainly our business is scalable. Now we don’t know what’s going to happen. Essentially a little bit of uncertainty because of tariffs and little bit of uncertainty because of whatever is happening in Europe economically. But in general as a business, it’s very scalable.
Aman Vij
Sure. Sir, final question is we had gotten two more customers for consumer business apart from our anchor customer. How is that scaling up? Well, can these customers contribute meaningfully to our business over next one, two, three years? Or this is like a small opportunity, good customer and any more such customer tie up we are looking for.
Amit Sanghvi
We continue to work with these two customers and look at opportunities.
Aman Vij
But Sanjay sir, can this be a scalable business or this is like a small, small kind of business opportunity? Not meaningful.
Amit Sanghvi
It can be a scalable business. It can be a scalable business. I think it’s important for us as well as the customer to understand each other, which is what we’re trying to do. And I think over the next three years it can become sizable business.
Aman Vij
Okay, that is it from my. Thank you.
operator
Thank you. Next question is from the line of Kishore Kumar from Unifi Capital. Please go ahead.
Kishore Kumar
Thank you for the opportunity. I just wanted to understand how the realization is shaping up for the GLB things since the commercial supplies have started. Now for semaglutide, is it at a broad level or has it increased now?
Amit Sanghvi
Are they what’s happening on realization right now? It’s exhibit budget in most cases. Yeah. I think we’ve started commercial supplies manufacturing for the GLP1 and the realization, you know, will more or less. I mean with the volume, the pricing obviously is different. So you will see that impact. But I think with the mix of the product, we have more focused on GLP1 than insulin right now. Even as the volumes are going to be this year, we are going to be well protected on the margins.
Kishore Kumar
Got it. Sir, if you could give some broad number for the realization for the GLP pens, that would be helpful.
Amit Sanghvi
Sorry, that will not be possible because.
Kishore Kumar
Got it. Okay. And if you can actually give us. How much, how much proportion is going for the exhibit batches result with the commercial supplies.
Amit Sanghvi
What you will see, Kishore, is that quarter three and four will be very heavily, very heavily sided towards commercial supplies. Quarter one and two will have a mix again, commercial supplies will be 50% or more. But quarter three and four will be substantially leading towards the commercial supply.
Kishore Kumar
Understood, sir. Understood. And my final request is if you can give us the volume supplied in Q1. That will be great, sir. Yeah. Thank you so much.
Amit Sanghvi
Someone else asked that question, but I don’t have that number off the top of my head. I apologize but we will have that answer ready.
Kishore Kumar
Thank you so much. Thank you.
operator
Thank you. Ladies and gentlemen, due to time constraint, we will take this as the last question for the day. I would now like to hand the conference over to the management for the closing comments.
Amit Sanghvi
Thank you everyone for joining the call. We hope that we’ve been able to answer your questions adequately. For any further information, I request you to get in touch with sga, our investor relations advisors. Thank you very much and have a nice evening.
operator
Thank you, sir. On behalf of Shelley Engineering Plastic Ltd. That concludes this conference. Thank you all for joining us. And you may now disconnect your lines.