SHAILY ENGINEERING PLASTICS LTD (NSE: SHAILY) Q4 2025 Earnings Call dated May. 14, 2025
Corporate Participants:
Unidentified Speaker
Mr. Amit Sanghvi — Managing Director
Sanjay Shah — Chief Strategy Officer
Analysts:
Unidentified Participant
Aman — Analyst
Harsh Shah — Analyst
Anant Jain — Analyst
Nirali Gopani — Analyst
Ritesh Shah — Analyst
Rupesh — Analyst
Pritesh Chheda — Analyst
Ankit Gupta — Analyst
Dhwanil Desai — Analyst
Dheeresh Pathak — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Shelley Engineering Plastics Limited Q4 and FY25 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 this conference call, please signal an operator by pressing Star then zero on your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Sanghvi, Managing Director Shirley Engineering Plastics Ltd. Thank you. And over to you sir.
Mr. Amit Sanghvi — Managing Director
Thank you very much. Good morning and a very warm welcome to all the participants to the post quarter four FY25 results. Investor call of Shirley and Sharing Plastics. I have with me Mr. Sanjay Shah, our 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. Let me start by giving some highlights on the operational performance as well as the business highlights. In FY25 the company delivered a strong revenue growth of 22% to 787 crores with EBITDA margins expanding by 350 basis points to 22.7%.
This is mainly due to increased sales from our healthcare segment which grew by 53% on a year on year basis. Let me give you a short brief on overall business updates for the quarter as well as for the year gone by. Starting with the Healthcare segment, we assigned two new customers for our IP lead 10 platforms during the quarter. In FY26 we will start commercial supplies of Penns 4 GLP1 drug Hemaglutide. We are seeing growth of our IP LED Penn platforms going forward. We are in discussions with customers regarding volume commitments or capacity commitments and requirements for the next three to five years and we will be aligning these commitments with our manufacturing capacity.
We’re expanding our 10 manufacturing capacity to add another 450 million pens per year across primarily two platforms both for servicing the growing demand of GLP1. The capex for this expansion would be close to 150 crores. During the last year we signed eight contracts with different customers for pen injectors or auto injectors primarily for GLP1s but also for some other therapies. We participated in PharmaPac in Paris to showcase our innovation in the medical space and we also participate in other global exhibitions across the US and Europe to increase our presence in regulated markets. In FY25 our revenues from healthcare segment have grown by 53% on a year on year basis to 165 crores, 21% of our top line.
We anticipate that our medical device business will comprise about 30% of our revenues over the next few years, enhancing value and profitability. Our focus is in line with expanding our horizons to include contact manufacturing for medical devices products featuring our intellectual property and subspecialty applications. Within this industry, we remain committed to continuous growth and innovation. At this point I would like to address concerns and questions that we’ve been receiving from the market regarding the impact of oral GLP1s on the injectables. So you know, it has always been known and also cited in various historic reports that orals would certainly play a role in GLP1, but would likely be limited to a market share of somewhere around 20%.orf4 glibron is not new.
There has been published reports of various stages of development and trials since 2018. I believe also the data that is submitted based on publications of their clinical trials show a weight loss of 7% in diabetic patients and they project a 13 to 15% weight loss in obesity trials. This is still lower than data for WeGovy and significantly lower than data for Mounjaro or Zeppelin. Now I’m no expert, but what I’ve learned from other experts in the domain is that orals have a lower efficacy primarily because of the bioavailability of the molecule.
For example, oralsemaglutide has less than 2% bioavailability versus 80% to 85% for the injectable. Also, one ofthe reasons why you see a much higher API content in the oral products.It is also important to note that there are currently between 55 and 60 GLP-1s under variousstages of development. Even out of these 55 to 60, we see that 75% to 80% are injectable formand 20% to 25% in oral form.Therefore, just to summarize, orals will certainly play a role in this growing market. However,we believe in fact by various reports that their share will be closer to 20% with the rest going toinjectables.Coming to the Consumer segment.
We have added 2 new products in plastics and 3 new productsin carbon Steel with home furnishings customer in Q4 FY ’25. We’ve also received new businessfrom a marquee FMCG customer for 2 new products during the last quarter.over FY ’25, we received new business from 2 global retail chains for which supplies havestarted in this quarter. We did also receive business for 2 new products from a marquee FMCGcustomer and has been awarded business with 2 new products which are under developmentduring last year.We’ve seen an improvement in our Carbon Steel business for the year. Revenues from thissegment grew by 17% on a year-on-year basis to INR561 crores in FY ’25 — I apologize, I thinkthere’s a — that’s pertaining to the Consumer segment.Lastly, coming to the Industrial segment.
We received new business from marquee customersfor automotive components in Q4 FY ’25. Over the year, we have confirmed business for supplyof knobs for exports and been awarded business of automotive components. In FY ’25, revenuesgrew by 12% to INR61 crores, and we expect steady growth in this segment.We have recorded the highest ever revenues and profitability in FY ’25. This has been on theback of improved traction seen across segments and ramp-up in projects. Visibility we haveacross various businesses gives us immense confidence that we’ll be able to scale up further andgrow. Last topic for me before I hand over to Sanjay.
I just wanted to provide us a short update on ourdevelopment pipeline, something that I’ve mentioned in the past. For the emergency use autoinjector, our program is progressing well. We plan to complete development and supply clinicalbatches in Q4 of current FY.For the last 12 months, we’ve been working on the next generation of GLP-1 devices. Thefoundation of this development comes from having conducted user studies and seen overhundreds of hours of videos to understand how patients behave at large.
We have now developed a device that will be non-priming, fixed dose, activated by a simplepull and push mechanism instead of dialing, along with the dose counter to show the remainingpens in the device. All of which results in something which is simple, accurate and intuitive.With this device, we intend to target global large pharmaceuticals.Our last development pipeline on the soft mist inhaler, we have reached the stage of getting oneof our concepts cleared for intellectual property and will now be moving forward with the fulldevelopment program.
That is all from my side. I shall now hand over the call to Mr. Sanjay Shah to give you theoperating and financial highlights. Thank you very much.
Sanjay Shah — Chief Strategy Officer
Thank you, Amit. Good morning, everyone. I shall share with you the highlights of ouroperational and financial performance of Q4 and FY ’25. Following which, we will be happy torespond to your queries. During Q4 FY ’25, we processed 6,536 tons of polymers as against5,380 tons in Q4 FY ’24. For FY ’25, we processed 24,932 tons of polymers as against 22,098tons in FY ’24.
Machine utilization rate was around 44% in Q4 FY ’25 and 40% in FY ’25. We expect this toincrease in the coming years, and we expect to increase utilization levels over the next 2 to 3years. Exports during Q4 FY ’25 and FY ’25 stood at 80% and 78%, respectively, of totalrevenue.I shall now brief you on consolidated for Q4 FY ’25. Revenue stood at INR217.8 crores ascompared to INR170.6 crores, a growth of 28% year-on-year. EBITDA stood at INR54.6 croresas compared to INR36.3 crores, a growth of 51% year-on-year. EBITDA margin stood at 25.1%,an increase of 380 basis points over Q4 last year.
PAT stood at INR28.6 crores as compared to INR19.3 crores, a growth of 48% year-on-year.PAT margin stood at 13.1%, an increase of 180 basis points over Q4 last year. Cash PAT stoodat INR39.7 crores as compared to INR29.3 crores, a growth of 35% year-on-year.Now coming to FY ’25 consolidated highlights. Revenue stood at INR786.8 crores as comparedto INR643.9 crores during FY ’24, a growth of 22%.
EBITDA stood at INR178.4 crores as compared to INR123.4 crores during FY ’24, a growth of 45%. EBITDA margin stood at 22.7%,an increase of 350 bps over FY ’24.PAT stood at INR93.1 crores as compared to INR57.3 crores during FY ’24, a growth of 63%.PAT margin stood at 11.8%, an increase of 290 bps over last year. Cash PAT stood at INR135.3crores as compared to INR93 crores during FY ’24, a growth of 45% year-on-year.
Our ROCEand ROE stood at 24.4% and 18.5%, respectively, as of 31 March 2025. This has been achievedwith disciplined use of capital. Our debt-to-equity stands at 0.4x while our long-term debt-toequity stands at 0.07x as on 31 March 2025.Now coming to consolidated segmental revenue break up for FY ’25. In Consumer segment,revenue stood at INR560.8 crores as compared to INR481.2 crores during FY ’24, a growth of17%.
In Pharma segment, revenue stood at INR164.7 crores as compared to INR107.7 croresduring FY ’24, a growth of 53%. In Industrial segment, revenue stood at INR61.4 crores ascompared to INR55 crores during FY ’24, a growth of 12%.That is all from our side. Now we can open the floor for Q&A. Thank you.
Questions and Answers:
operator
The first question is from the line of Aman from Astute Investment Management.
Aman
Congrats on good set of numbers. A couple of questions from my side. First is, sir, in thepresentation, you have mentioned, 2 new customers for IP-led-platform. So could you talk aboutwhich these platforms are?
Mr. Amit Sanghvi
So we’ve got one for Neo and one for Toby.
Aman
Sure. And sir, we were expecting some commercial launches for teriparatide. So any time linesfor the same? Do we expect someone in Q1 and Q2? And say for the full year, how manyteriparatide launches do we expect in FY ’26?
Mr. Amit Sanghvi
We have received commercial orders for teriparatide. So we are going to produce and ship. Nowwhen it actually gets launched, I’m fingers crossed, any time over the next 3 to 4 months,hopefully, maybe 5 months.
Aman
And for how many customers do we expect for FY ’26.
Mr. Amit Sanghvi
We expect 2 customers.
Aman
Okay. But I think we have a lot more customers than two, right? So only two are expected tolaunch in this year?
Mr. Amit Sanghvi
Correct.
Aman
Sure. On the capex plan for FY ’26, you talked about INR150 crores for pharma. So what willbe the gross block after this capex? And is there any other capex for any other division for FY’26?
Sanjay Shah
The overall capex, which we will end up doing will be about INR180 crores, INR185 crores.Predominantly INR150 crores is going into Pharma for capacity expansion in terms of our pencapacity. So gross block will go up about INR170 crores by the end of year.
Aman
Sorry, Sanjay, sir, what will be the gross block after the capex in Pharma?
Sanjay Shah
Pharma gross block will be probably somewhere in the region of about INR 370 crores to INR375 crores.
Aman
Okay. And this will be enough for next 1, 2 years? Or do we expect similar capex in FY ’27 aswell?
Mr. Amit Sanghvi
See, Aman, it’s a little early to tell because everybody is dealing with what market will look likepost launch here. So let’s just, I think, kind of wait. We are doing our expansions based on –largely based on committed volumes from customers. So we don’t want to make — do anyexpansions except the small percent kind of buffer, but where we don’t have the either committedforecast or volume or take-or-pays.
Aman
Sure. That makes sense. Next question is how many pens did we sell in FY ’25? And could youtalk about our target for next 1, 2 years?
Mr. Amit Sanghvi
I knew this question was going to come up, but I haven’t had the exact answer. Andunfortunately, my business development team is traveling at the moment. But we believe — Ibelieve this year — I can tell you this year, we’re looking at selling close to somewhere between– somewhere around 30 million to 35 million pens this year.
Aman
For FY ’26?
Mr. Amit Sanghvi
Yes.
Aman
And say, rough numbers — sorry, you are saying these are conservative estimates.
Mr. Amit Sanghvi
Take it at 30 million. Unfortunately, like I said, since 2 weeks, my business development teamhas been traveling, we haven’t had a chance to catch up. But yes, about 30 million is I wouldassume that we’re going to sell this year.
Aman
Yes. But roughly, for FY ’25 — for FY ’26 over FY ’25, you are almost talking about, say, 100%kind of number of devices growth roughly, I’m not talking about exactly.
Mr. Amit Sanghvi
Yes. I was going to say that it will be around 70%, yes, that’s kind of what we’re looking at.
Sanjay Shah
But then, Aman, just to add to that, the growth is basically going to come — a large part of thegrowth is going to come from our own IP led pen platform.
Aman
Sure, sir. And could you talk a little bit about — so you have given on the U.K. business, ofcourse, we are commercializing one project at least in Q4 FY ’26. But in terms of growth, so thisyear was [inaudible 0:18:25] and we are adding a lot of people in U.K. So for FY ’26 and FY’27, what kind of growth should we assume in our U.K. business?
Mr. Amit Sanghvi
What I would say is, when you take a look at our international business, take a look at numberscollectively from the U.K. as well as Shaily innovations in UAE because what you will find isthat combined, there is going to be growth. But in the U.K., likely that it will be around a similarnumber as what we’ve done this year.
Aman
Okay. And if we take the combined number, sir, what kind of growth should we assume, say,FY ’26 and ’27?
Sanjay Shah
So Aman, I think getting into individual growth numbers, we would refrain from giving. Youhave talked about in the past, which you’re aware of in.
Mr. Amit Sanghvi
There will be growth. But I think, yes, we want to refrain from giving individual U.K. growth,especially.
Aman
Sure, sir. Another question before I come back in queue. On the industrial side, sir, we have wona couple of projects and all then other things. While growth was only around, I think, 12% FY’25, so given strong order book, can we expect maybe like 40%, 50% kind of growth and thissegment crossing INR100 crore contribution in FY ’26 itself?
Sanjay Shah
Aman, again, individual segment-wise growth, we would not want to talk about it, but yes, wewill see better growth in FY ’26 as compared to FY ’25. FY ’25 is when we commercialize 2large projects for some customers, and you will see growth happening from those projects in thecurrent year.
Aman
Sure, sir. Finally, on working capital side.
operator
Sorry to interrupt, sir, but I may request you to rejoin the question queue. The next question isfrom the line of Harsh Shah from Dalal & Broacha.
Harsh Shah
Yes. Firstly, the congratulations on a very strong set of numbers. I have a couple of questions.So firstly, as you mentioned that, say, in FY ’26, we would kind of selling around 30 million,35-million-odd pens. I’m assuming that this would also include insulin. If you could give a broadsplit between insulin and non-insulin, if that’s possible?
Sanjay Shah
So Harsh, what we have said is a large part of the growth in the current year is going to comefrom our IP-led-pen platform.
Mr. Amit Sanghvi
Which is much higher above 60% growth from non-insulin.
Harsh Shah
Okay. Got it. And if I say suppose has to dissect the non-insulin part, right, so basically, thatwould be GLP. Is there any kind of a broad sense in terms of what would be the ratio broadbetween, say, the exhibit batches versus the commercial batches?
Mr. Amit Sanghvi
You want to dissect exhibit versus commercial?
Harsh Shah
Yes.
Mr. Amit Sanghvi
You will see upwards of 70% being commercial.
Harsh Shah
70% commercial.
Sanjay Shah
So Harsh, first of all, if you see also, we’ve mentioned in the presentation, which we have putout. Also, we’re looking at making commercial supplies of Sema in the current year. So that willbe what will contribute to the growth in the current year.
Harsh Shah
Got it. And on the capex part that you mentioned, right, say, around INR150-odd crores. So thecapacity increase that you mentioned, correct me if I’m wrong, is it 40 million to 50 million pens,the entire capacity will come on stream by end of FY ’26. Is it correct?
Mr. Amit Sanghvi
Not FY, calendar ’26. So Harsh, we’ll be adding 40 million to 50 million pens over the next 18months to 24 months.18 months — 18 months to 20 months.
Harsh Shah
Got it. And also one thing on the consumer segment. So is there a case wherein say it’s becauseof all the tariff issues that are going on, has there been any sort of inventory stocking or frontloading from your clients in the consumer vertical for Q4 because the growth that we are seeingof 27% on a Y-o-Y is significantly higher. So some color on it, if you can give.
Sanjay Shah
So Harsh, we have not been seeing inventory stocking or anything. What you have been seeing,the growth is basically we’ve made revenue or sales to customers where we bagged orders inQ3. We have started shipment to those customers.
On the home furnishing customer, we haveexecuted some projects, which we were under execution or development where we have startedshipping. So we have seen growth happening from that.
On the tariff situation, I honestly feel is still an evolving situation where even buyers are notclear in terms of how things will pan out, you see that is being changed every day. So — andnegotiations happening every day. So probably you guys might have a better idea about it andyou can tell us what do you expect?
Harsh Shah
But have you faced any sort of disruption yet in Q1?
Sanjay Shah
No. We have not seen any disruption. It’s been — orders have been going on at same pace. Therehave not been any changes on anything.
Harsh Shah
Got it. And on the consumer electronics part, say, have we started any sort of, say, sampleshipments or maybe some sort of shipments have been done? And if possible, could you, I mean,highlight how big can this segment for us become, say, in the next 2 to 3 years? If board sense,you could give on this?
Sanjay Shah
So Harsh, on the consumer electronics, we have not made shipments. We have said as and whenwe do something, we will talk about it. I’ll let Amit expand upon that.
Mr. Amit Sanghvi
We are engaged with a couple of customers. Beyond that, there’s actually nothing to report.
Harsh Shah
Got it. And one last question. Yes, sorry.
Mr. Amit Sanghvi
Go ahead.
Harsh Shah
Yes. So one last question before I get in the queue. So the gross margin improvement that wehave seen in this quarter, is it a function of purely the product mix wherein the health care haskind of scaled up? Or has there been some element of crude benefit that we have gotten?
Sanjay Shah
Crude, no, I don’t think there’s has been any, no crude benefit.
Harsh Shah
Then does this — yes.
Mr. Amit Sanghvi
Mostly On account of scale up of health care and higher revenue and better utilization.
Harsh Shah
So does this mean, I mean the EBITDA margins that we have posted for Q4 on a consol basis isaround 25%, then should we consider this as the baseline margin in FY ’26, at least 25% for thefull year?
Mr. Amit Sanghvi
Don’t look at it from a quarter-on-quarter perspective. Do we feel that if we execute the plan thatwe will have better margins? I mean the short answer is, yes. That’s the ambition, and that’s alsowhat we think should happen. But don’t consider as a baseline and look at it from a quarter-onquarter perspective. You’ll see significant changes in this year when we report our numbersquarter-on-quarter.
Sanjay Shah
So the way you look at Shaily would basically be you need to look at more in terms of a yearto-year. And yes, year-to-year you would see improvement in margins is the way we would putit out, yes.
operator
The next question is from the line of Anant Jain, HNI.
Anant Jain
So my first question is on the consumer electronics, although you have said that you reportedwhen you have something to say. But what I personally feel is that there’s a massive opportunitythat is coming up because of these large international brands moving into India. Apple giving avery high guidance? And also, in the process, looking to localize a lot of components. I knowyou can’t speak on a customer-to-customer basis, but can we think of a very large capex fromour side in the next 1 or 2 years?
Mr. Amit Sanghvi
Short answer is, yes. We — if we can come to some sort of a conclusion on a business plan withthe customers that we are speaking with, we will be looking at capex. And we will be looking atpotentially at least medium to large capex in the next 2 years.
Anant Jain
Okay, I was looking for that. The second question is more of an accounting question. We’ve seensignificant working capital increase. Our inventory days have gone up from 1 month to 4 months.Can you just give some understanding there?
That’s the first question.And second question, if I see is like the other current liabilities have gone up significantly from,let’s say, INR8 crores, INR9 crores to INR36 crores, I would guess. Is there an explanation forthat as well?
Sanjay Shah
So Anant, on inventory, what we have done is there was a plant maintenance shutdown by oneof our principal supplier. And that’s a large quantity of material, which we use, so we’ve basicallyrequested that if we can take on the next 3 months requirement. So that’s something which wehave done because we didn’t want to run out of materials because of specifically, which wasapproved by the customer — on the consumer business. So that’s something where we have takenon inventory.
The second part of the inventory is do you build up some inventory on the pharma part of thebusiness expecting scale-up and everything, so you would whether it’s raw material or boughtout, so we have basically built that up. So that’s the second part due to which you have seeninventory buildup.Increase in current liability would basically be in the normal course of business. So there couldbe some customer advances which would have come in.
Anant Jain
Okay. So we have had higher advances from customers for, and that’s being shown as othercurrent liabilities.
Sanjay Shah
Correct.
Anant Jain
It’s not like customers paid up for capex.
operator
Sorry to interrupt sir, but I may request you to rejoin the question queue.
Sanjay Shah
This question is related one. So complete the question.
Anant Jain
Yes. So my question here is that we would have also received advances from customers. Wheredoes that show up in the accounting part in terms of setting capex, no.
Sanjay Shah
That’s essentially what I’m saying, Anant, is if there are advances from customers, it will showin other current liabilities.
Anant Jain
Capex advances from customers, like setting up lines, dedicated lines for customers even thatshows up in other customer — current liabilities?
Sanjay Shah
Either way it is going to be a customer advance.
Mr. Amit Sanghvi
We did not take any capex advances. We take, if there would be — basically contractuallyspeaking, the advance would be taken on a certain committed volume, so that’s essentially thatwould.
operator
The next question is from the line of Nirali Gopani from Unique PMS.
Nirali Gopani
Yes. So, Amit, in your opening comments, you mentioned about the new generation pens thatyou are working on, so if you can talk a bit more on that side. This is largely to cater a new setof customers on the pharma company side or better realization. How do you look at it?
Mr. Amit Sanghvi
So we’ve been working on our strategy for — essentially for the last maybe 18, 20 months onhow to look at attracting innovator pharma, the originators, so when it comes to the originators,we look at how do we engage with them would be the right approach. Of course, being presentin the GLP-1 space, it’s natural that we try to attack that space first.
Having looked at a lot of data — research data, issues with existing devices, patient behavior,what we realized is that almost no one follows the — no one follows the IFU, which means thatpeople aren’t priming.Second is dialing a dose is always kind of — on spring-driven pens, it’s a little bit maybe easier.But if you’re — if you look at just the obesity market and not the diabetes market, basicallyeliminating the folks that are used to using a pen injector, you find lots of errors when it comesto setting the right dose, delivering. So the overall efficacy of the therapy may not be as high asintended.
The third thing we also found is that most people eyeball the cartridge and the plunger positionin the cartridge to determine when they should re-order or put in a request for re-order. So theseare very simple things which have been device intuitive, something which is sustainable. So autoinjector is obviously very easy to use, but it’s not sustainable, given that you have to use a newone every week. So you go through 4 auto injectors, 4 primary containers every month.
So from that perspective, we decided that we should develop a fixed-dose device, which issimple, accurate, intuitive, so essentially came down to nonpriming. We don’t dial a dose. Wejust pull the button to activate and push the button to deliver. And with every push, who have adose counter, which shows you how many doses are left in the system.Now we could customize this device to deliver anything between with 0.1 ml to 0.8 ml. But theintention is to target large pharma, which is why we’ve developed that device.
Nirali Gopani
Perfect. And on the capex, on the health care side of INR150 crores. So does this number includethe land part also because I guess we’ll be needing new land also for this capex?
Mr. Amit Sanghvi
Whether we need a land or not, I don’t think we’ll acquire land.
Nirali Gopani
Okay. So will it be near our existing facility?
Sanjay Shah
Nirali, this is unknown at the moment, Nirali. This INR150 crores which we are talking about is — a large part of it is basically being put insidethe current plan.
operator
The next question is from the line of Ritesh Shah from Investec.
Ritesh Shah
A couple of questions. I just want to go back to the base. Basically, what is our current pencapacity right now, is it 40 million pens? We had indicated 100 million pens. What is the timeline that we are looking at?
And just for clarification, when we say incremental INR150 crores, this is by when and whatwill be the eventual pen capacity that we are looking at? Is it like 100 million to 200 million oris it 100 million to 150 million? If you could just give some bridge over there, that will be quiteuseful.
Mr. Amit Sanghvi
We are adding 40 million to 50 million over the next 18 months. The INR150 crore capex is forthe current year. Now after we add another 40 million to 50 million, our total capacity wouldlikely be in the range of 80 million to 90 million. Beyond that, we would look at basically somecommitment or purchase orders to increase it further.
Ritesh Shah
Okay. So this is something what we had indicated earlier as well, right, going from 40 millionto 100 million and 18 to 24 months. So there’s nothing new over here, right? And I think theearlier capex indicated was INR130 crores. Is it something that has moved up to INR150 crores?Is it the same number, which has moved up?
Mr. Amit Sanghvi
Marginally, yes. I mean I think, when you say nothing new, maybe there’s a little bit, maybe 5%capacity added since our last call. Otherwise, no, nothing significantly new. It was alwaysplanned. The plan is just solidified a little bit more.
Ritesh Shah
Perfect. And out of this INR150 crores, what part of advances have we already received? Orwhat part of capex has already been incurred?
Mr. Amit Sanghvi
Like I said, we’re doing capacity investments based on firm commitments from customers. So,Ritesh, we always keep kind of maybe a 25% to 30% buffer. But otherwise, it’s all whateverwe’re doing in terms of capex would be committed.
Sanjay Shah
And Ritesh, this will happen gradually over the next 18 to 24 months, so it will be somethingover that period.
Ritesh Shah
Sure. Second question would be, if we had to go from 100 million to 150 million or say 200million, what is the sort of comfort on orders that we are looking for because the outlook seemspretty good. Is there any specific milestone that we are waiting for, given we understand thatlead time for all those machinery platforms is actually pretty huge. Won’t we be missing out onthe opportunity, if we don’t go out with the capex right away given the lead times, which arethere in place?
Mr. Amit Sanghvi
I don’t think so. You have to understand, Ritesh, the product hasn’t been launched yet by anyone.So everybody that’s putting in capacities, talking about — I’ve heard everything from 100 millionto 200 million to 500 million. I mean, there’s obviously an opportunity saying that there isn’t.But at some point, when you get into such large volumes of product, we have to be careful ofhow much capacity you set up.
We will set up capacity, and we’ve said this on calls as well asto customers is that there is a baseline capacity that we offer when we do a program. Beyondthat, we need firm commitments from customers to set up capacity Now the advantage with Shaily is that we are able to set up capacities in a much lower period oftime versus our competitors.
What gives us confidence is two things. Almost all of our customershave made fairly significant investments in setting up their own capacity.So customers setting up right from someone setting up 20 million cartridge and assembly line tosomeone setting up 150 million cartridge and assembly line. We see across our customers settingup their own capacities in-house, which is what gives us confidence that we will be participatingin that capacity as well.
Ritesh Shah
Sure. If I may, just for a clarification, when we say 40 million to 90 million pens, what is thenumber of cavity molds that we are assuming over here? Because to my limited understanding,I think we had spoken about 4 to 8 to 16 cavity. And as that happens, basically on the same line,the production throughput can increase significantly. So how should we just connect both thedots?
Mr. Amit Sanghvi
So I think from our perspective, again, product to product, it would differ. But the mosteconomical way we find is somewhere when you create a capacity of 25 million on a particularproduct, which is 16 cavities molds and 80 parts per minute assembly line.
operator
The next question is from the line of Rupesh from Intelsense Capital.
Rupesh
Sir, my first question is you said you expect 70% growth in the pens. And our own IP-led penshave higher realization, so is it fair to say that this INR165 crores revenue we have done inpharma, there will be 100% kind of growth on the revenue side. I mean is anything wrong in thisthinking?
Sanjay Shah
Rupesh, we would not want to put in a number there.
Mr. Amit Sanghvi
But we are seeing commercial pricing is also different than clinical pricing. So what we’re sayingis, we anticipate 77% growth, and that’s what we’re seeing to.
Rupesh
Okay. And any guidance on the broader company level, sir? I mean you are saying you don’twant to talk segment-wise, but maybe broader company, can we reach, let’s say, INR1,100crores, INR1,200 crores revenue on the top line. Is that a fair assumption?
Mr. Amit Sanghvi
No guidance on the company wide. I mean we have growth. We have good growth, I think, andit will be backed by a stronger profitable facility. So that’s where we’d like to keep our guidance.
Sanjay Shah
And just to add to what was said, we expect growth across all the 3 segments, it will be different,but we expect growth across all the three segments.
Rupesh
And then my second question, sir, can you give some color on our presence at market formationin Canada and Brazil? And are we present with, let’s say, more than one customer in both ofthose markets? And any regulatory approval, which is spending on us on the devicemanufacturer?
Mr. Amit Sanghvi
We don’t have any outstanding queries that we have to address, and we are present in bothmarkets with at least 2 players.
Rupesh
And then, sir, just last one clarification. Applicator project, I think we had announced in one ofthe Q2 call, maybe INR35 crore applicator project. So if you can give some color on that, howdid that contribute in ’25? And then what will happen to that project in FY ’26?
Mr. Amit Sanghvi
See, applicator is going to probably get validated, I think in the first half of Q2, potentially endof Q2 and then we should see at least somewhere around 4 to 6 months of sales for the applicatorin the current year.
operator
The next question is from the line of Pritesh Chheda from Lucky Investments.
Pritesh Chheda
Just a clarification. So your gross block in Pharma after the current capacity expansion that youcalled out of about INR150 crores will be INR375 crores, right? That’s the number youmentioned.
Sanjay Shah
Somewhere between INR350 crores and INR375 crores. It is after the investment.
Pritesh Chheda
No, sir, you’re not clear your number, what you said?
Sanjay Shah
I said it will be somewhere between INR350 crores and INR375 crores after the investment thatwe have made.
Pritesh Chheda
After the investment, which is basically 80 million to 90 million pens.
Mr. Amit Sanghvi
No. The investment is in the current year. We’re looking at adding 40 million to 50 millioncapacity over the next 2 years, so there will be some additional investment needed for the restof the capacity.
Pritesh Chheda
So I am asking about the eventual number, so post this expansion, you will have a gross blockof INR375 crores, which means about 90 million pen capacity. Is this 2 numbers, correct? Orthere is any change here?
Mr. Amit Sanghvi
There are some small things. So we’re still looking at our entire lab and other supporting servicesset up for which we don’t know what the investment number is going to be today. But essentially,like I said, consider a 15% to 20% margin just for that — so, nothing — I don’t think there will beanything significant.
Pritesh Chheda
Okay. What should be the asset turn of this INR375 crores block?
Mr. Amit Sanghvi
Anywhere between 1.5 to 2.
Pritesh Chheda
Okay. And the other question is, if you could tell us in the healthcare INR165 crores, what is thecorresponding approximate pen volume?
Mr. Amit Sanghvi
I think somewhere around 16 million, 17 million, Pritesh.
Pritesh Chheda
Okay. No problem. And my last question is, on the non-healthcare side, so basically consumerand industrial, over the next 2 years, based on the contracts that we have in hand, newerbusinesses that we have in hand, what should be the growth in combining these 2 businesses over the next couple of quarters? Should we continue to grow at the CAGR we have or therewill be some acceleration?
Sanjay Shah
Pritesh, again, difficult to put in a number in. But as we mentioned to a query raised by otherparticipant also, we expect growth across all the 3 segments.
Pritesh Chheda
Okay. Just INR375 crores what you said — just a minute, sir. You said 2.5x asset turn, right –no, 1.5x, sorry.
Mr. Amit Sanghvi
Somewhere between number 1.5 to 2, Pritesh.
operator
The next question is from the line of Ankit Gupta from Bamboo Capital.
Ankit Gupta
Congratulations for a good set of numbers. Sir, in this target for 30 million, 35 million pens forFY ’26, can you give a broad breakup of how much will be our own IP-led GLP pens, our ownIP-led insulin, and customer-led IP? So any broad breakup, if you can give for those 3 segments?
Mr. Amit Sanghvi
Ankit, we already gave this on a previous question on this call. So we think about 70% is goingto be IP-led.
Ankit Gupta
And that will be largely on the GLP side?
Sanjay Shah
A combination of GLP and insulin, yes.
Ankit Gupta
Okay. And sir, on our own IP-led GLP pens, can we assume that majority of the launches, whichwill happen in the markets like Canada and Mexico, will be pen injectors and not the autoinjectors?
Mr. Amit Sanghvi
Sorry?
Sanjay Shah
Canada and Brazil will basically be pen injectors and not auto-injectors?
Mr. Amit Sanghvi
Yes, that’s right.
Ankit Gupta
Okay. And across our various platforms in our own IP, will it be possible for you to share theaverage realizations even if you can give a broad range?
Sanjay Shah
Ankit, that’s difficult. It is impossible. We’ll not be able to share that.
Ankit Gupta
Sure, sir.
operator
Sorry to interrupt, sir, but I may request you to rejoin the question queue for any follow-upquestion. The next question is from the line of Dhwanil Desai from Turtle Capital.
Dhwanil Desai
So my first question is, the new product development side, you mentioned two products. So thequestion here is that do we develop these products suo moto from our side based on ourunderstanding or is it based on some feedback from the customer innovators? How does thiswork? And if you’re developing on our own, what is the process to commercialization of thisproduct? Doesn’t it get longer in terms of approval, validation? If you can talk more on that?
Mr. Amit Sanghvi
Dhwanil, that’s a fairly long topic. We do two things. I’ll keep the answer short. When wedevelop devices for the generic market, we already know what we need to develop based onwhat is available from innovators in terms of feature functionality, user steps, et cetera.When we develop something novel, truly novel, that we intend to target the originators, then wedevelop it based on what is the user feedback, what are the clinical or human studies look like?
So we look at usability.\And we look at the complaints on the market regarding those products.So we combine a few of these — 3, 4 of these things and then come up with our own set of designinputs to develop our products. Now, so when you do something for an originator, we’ll developit fully.
And then based on whoever jumps on that platform, there will be another set ofcustomization required. So it is a semi-platform strategy, but doesn’t work the same way as thegeneric business does. So it works quite differently.
Dhwanil Desai
Sure. Got it. And second question is, so this incremental 12 million to 15 millionpens/autoinjector that we are targeting to sell in FY ’26, is there any single customerconcentration there where their success or failure dependent on that, anything like that? Is that arisk that exists?
Mr. Amit Sanghvi
So, I think customer concentration, that entire volume would be totally divided by 3 to 4customers at the equal risk. None of the 3 to 4 have approval right now. So I also don’t know.We will answer this question, let’s say, in ’26.
operator
The next question is from the line of Ankit Gupta from Bamboo Capital.
Ankit Gupta
So I was asking if you can talk about how are you seeing the opportunity in the Indian marketfor the semaglutide?
Mr. Amit Sanghvi
All hard to tell. The product is not sold in India. It’s anybody’s guess. It could be maybe as lowas a couple of million to who knows, who knows where the market actually comes both in termsof size. But given the product is not sold in India, we only anticipate from what we hear fromour customers.
Ankit Gupta
Okay. So because we’re not — sure, sure. Because on the Canada side, a lot of — some of thegeneric players who are in play for the market have indicated to the market opportunity itselfwill expand by 4, 5x post genericization of sema. So can we expect the same kind of trend tofollow in Indian market? Or it is too early to say? Like any view that you would like to sharealso will be most valuable.
Mr. Amit Sanghvi
Even the RLD doesn’t sell the product in India. We don’t know what the baseline market is.
Ankit Gupta
Sure, sure. And sir, on our own IP-led insulin pens, can you talk about we had got a contract lastyear. And a lot of other competitors had vacated the market or were vacating the market. So howare we seeing the market for us on that side? And how do you see the scale up happening there?
Mr. Amit Sanghvi
I would probably say that pricing pressure on insulin-type pen is very, very high. And we,ourselves, are looking at, I wouldn’t say getting out of insulin. We want to focus on insulin, butwe want to keep that focus limited to maybe your large players in each of those markets. Wedon’t want to do insulin kind of for everybody. So we are focused on the large insulin players inIndia.
We remain focused in other regions of the world.We’re still trying to grow the business. We don’t want to grow the business especially in regionswhere there is no regulation when it comes to devices. And the reason is because the Chinesecan undercut you buy a very significant number.
And we are looking at other therapies maybenot as price-sensitive insulin, not as large in volume as semaglutide, but somewhere in betweenwhere we can utilize our capacities for Protean. And there are many that we are activelysupplying into as well.
Mr. Amit Sanghvi
So how do you see the growth on our own IP led insulin pens over the next 2 years?I mean we only have an insulin pen, right? One of our platforms is for insulin. Nothing else wesupplied goes into insulin. So we think our insulin growth over the next 2 years will — I wouldn’tsay that it will be 70%, 80%. But I think considering an average of maybe 20%, 25%, 30%growth on the insulin side.
operator
The next question is from the line of Anant Jain, HNI.
Anant Jain
One question here, Amit, is, when we think of pens, autoinjectors, there are like multipleprocesses in terms of fill/finish, the device itself, the API, packaging, all of these things. So doyou think that we would be willing to — or we are looking to expand in any adjacency area togive a one-stop, one solution to our customers? Do you think that would be a possibility, not inthe next 6 months or a year, but going down the line?
Mr. Amit Sanghvi
I’m glad someone asked this question. I’ve spent the better part of last 12 to 18 months comingup with a strategy on how to vertically integrate. What are the other areas we can go after? Again,this is one of those questions we could have a very long conversation on. But to keep it short,just in 2 years, you’ve seen potentially somewhere close to a 200 million capacity created inIndia, in the CDMO space.
There’s probably another 200 million to 300 million capacity created outside. Frankly, if you askme, plus all the large pharma players, generics and nongenerics, are creating their own capacity.So I put all of my customers together, we would see another 200 million, 300 million capacityincrease over a period of time.I’m not sure how lucrative getting into the other domain space because at the end of the day, ifthere’s no — with devices, we lead this because of IP because of that.
With the other value-addedservices, it would be merely an asset investments. There’s no real technological know-howbehind it.So I don’t have a straight answer to you, but I think my instincts are that I don’t think we should– short term, there is benefit. I don’t deny that. There is certainly short-term benefit. You canmake a limited business case out of it, saying that, okay, we’ll support clinical development.And we might actually do that, right? To support customers with clinical stages of development,we might put in kind of final assembly capabilities at some point.
But long term, large capacities,I think anyone who sells more is going to bring this production process in-house because youlook at the value chain, right, generics — typical, most generics don’t have control over almostany part of their value chain. So they’re very limited. And the only way you can make money isby controlling as many aspects of the value chain as possible.
Anant Jain
Fantastic answer. One question here. One is on, when we look at Shaily, maybe 5 years back,we were limited in terms of our capabilities. But now if you look at Shaily, in your opinion,where do we stand with the global market leader, Ypsomed, BD, et cetera?
And do you thinkthat the new opportunities in pens or auto injectors for innovators, we are pretty much at parwith these players. That’s the first question. I mean, again, it would be a very long answer, butstill if you could summarize it in some way.
And second, a very pointed question. On Tirze exhibit supplies, how many customers do weexpect next year, next Q1, Q2, full year, whatever, if you have any idea there?
Mr. Amit Sanghvi
I think for any NC minus 1, I think this goes back to semaglutide time as well. We limit NCminus 1 because you have to end the supply by a certain deadline. So let’s say, for example,we’re in May right now. We need to make sure that we supply to any customer — the last supplycan potentially be made in September, October of this year.
October is also pushing it, right?Because you have a May ’26 deadline and you need 6 months of data and time to put your dossiertogether, et cetera.So I think we’re going to end up with about 3 that we will be able to supply to.
Three — we’redebating whether to take a fourth on, but 3 is the number that we have right now. And as far as– what was your first question, Anant?
Anant Jain
I was trying to understand how do we stack up, BD, Ypsomed?
Mr. Amit Sanghvi
So look, I’ll be the first one to say, Ypsomed already manufactures maybe 100 million, 150million devices a year. So it would be wise for me to say that we’re as — I guess they were asgood as them, we’ve yet to prove it, right? So on the scale-up side, we have yet to prove it. Wehope that with the expansion we’re doing, with the semaglutide launch, we will be able to provethat we are as good.
I think on the development side, I would say that we have a slightly different approach than thecompetitors. We’re more agile, but we feel that our product pipeline even today represents asignificant benefit over most of our competitors, especially for pen injector.
So as far as peninjectors are concerned, I think we certainly have a very significant advantage. We’ve been ableto do that. And our development teams are very, very strong. We do not have this product inU.S. All of this at this point is just hearsay.
Anant Jain
I totally understand that. We don’t have a product. One last question. One, just additional. Incase of tirze, if you can specify the platforms?
Mr. Amit Sanghvi
Tristan, our platform is called Tristan.
operator
The next question is from the line of Dheeresh Pathak from WhiteOak Capital.
Dheeresh Pathak
So on the DMF filings, I see a lot of type 3 DMF filings for Shaily, whereas I don’t see them for,let’s say, Ypsomed, SHL or BD. So is there a particular reason I’m seeing Shaily in a lot of type3 DMF filings, whereas I don’t see that for the competitors? Is there a particular reason aroundthis?
Mr. Amit Sanghvi
I would assume that we are a little bit more flexible with our customers, which means that wedo the dossier, and we do a different dossier for each of our customers, right? So we don’t havethe same product. Even though it’s the same product, we do a different documentation packagefor each of our customers.I don’t know what the pros and cons are, to be honest, I’ll let my team decide that.
But I wouldassume that some of our competitors might be providing the technical dossier filed as a finalpackage from the pharmaceutical company. Maybe some are providing the CDRH route. Maybesome are doing — so there are multiple ways of filing. I’m not quite sure why someone does itdifferently than the other.
Dheeresh Pathak
And there is 1 type 2 filing that I’m seeing in Jan 2025 for Neo pen for semaglutide, whereas allother filings are type 3. So if you can just help me understand why this one filing, which ismentioned as type 2 and other type 3, is there a nuance to that as well?
Mr. Amit Sanghvi
I’ll be honest with you, I have no clue. I think you have — I will need to check internally.
Dheeresh Pathak
Okay. Okay. Of the capacity that you mentioned, 80 million to 90 million pens, how much isautoinjector and how much is pens, it’s all pens?
Mr. Amit Sanghvi
I would say, consider that pens will be probably — I think I would say that you probably have a70-30 split on the full capacity of pens versus auto injectors. 65-35, who knows, but somewherearound that. Just keep a range in mind.
operator
Ladies and gentlemen, we take that as the last question for today. I would now like to hand theconference over to the management for the closing comments.
Mr. Amit Sanghvi
Thank you, everyone, for joining the call. We hope that we’ve been able to answer your questionsadequately. For any further information, I request you to get in touch with SGA, our InvestorRelations advisers. Thank you, and have a great day.
operator
Thank you. On behalf of Shaily Engineering Plastics Limited, that concludes this conference.Thank you for joining us, and you may now disconnect your lines.