Shilpa Medicare Ltd (NSE: SHILPAMED) Q2 2025 Earnings Call dated Nov. 14, 2024
Corporate Participants:
Keshav Bhutada — Executive Director
Alpesh Dalal — Chief Financial Officer
Unidentified Speaker
Analysts:
Runjhun Jain — EY
Sanjay Elangovan — Analyst
Monish Shah
Krisha Kansara
Unidentified Participant
Murali Nandan
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Shilpa Medicare Q2 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. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Runjhun Jain from EY Investor Relations.
Thank you, and over to you, Ms. Jain.
Runjhun Jain — EY
Thank you, Nirav. Good evening, everyone, and a very warm welcome to you. To take you through the results and answer your questions today, we have the management team from the company represented by Mr. Keshav Bhutada, Executive Director of Shilpa Pharma Life Sciences Limited; and Mr. Alpesh Dalal, Chief Financial Officer.
Please note that the financial results and the presentation have been uploaded to the company’s website and on the exchanges. This conference is being recorded and the transcript along with the audio replay will be available on the website of the company as well as exchanges. I would like to remind you that today’s discussion might include forward-looking statements based on the current expectations and assumptions.
These statements are subject to risks and that could cause actual results to differ materially. Investors are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The company undertakes no obligation to publicly update or revise any such forward-looking statements whether as a result of new information, future events or otherwise.
With this, now I’ll hand over to Mr. Keshav for the opening remarks. Over to you, Keshav.
Keshav Bhutada — Executive Director
Thank you, Runjhun. Good evening, everyone. Thank you for joining us today to discuss our Q2 and H1 FY25 results. It has been a very exciting quarter for us, full of excitement where we had multiple complex product filings and a few approvals, which gives us confidence that we are in the right path for monetizing our assets.
Now I will start briefing about various business segments in which Shilpa Group is invested, okay? So let me start with the API, which is the core business for us. Under API, we have mainly 5 main verticals in which oncology business, where our first client program, which is an NDA program for the U.S. client, where the client has received breakthrough designation from FDA for which the orders were received for the Phase III clinical studies for which the partial quantity supplies were done in current quarter.
The second NDA program for our US client which is currently under Phase III, the program is on track as per our customer and they are planning to complete the clinical study by next year. Multiple filings were done in the oncology segment by us where Nilotinib which was first DMF with our captive formulation with a non-infringing strategy. The European DMF was received — it received approval in the current quarter. Lenvatinib, Europe DMF also we have submitted in the current quarter.
And apart from that, 2 new product validations are already initiated, and we are planning to finish those validations by Q4 FY25. Multiple captive formulation launches are expected in upcoming quarters for which we have our own API, which will in turn help us in growing our oncology business for API. We have also seen a slow increase in the quarter-on-quarter uptake from our biggest customer in the oncology side, and we are seeing slowly a traction and increase quarter-on-quarter.
Now I will start briefing about non-oncology business with Tranexamic acid expansion, which was a very important expansion project, which we had initiated in last year is on track. And from the Q3 onwards, we are planning to start the validation batches, and we will start having commercial supplies from Q4.
For the UDCA, in the last quarter, we had received CEP. After that, we have seen a slow — good traction from various customers from Europe and multiple rest of the world markets and we have started doing sample feeding for all the customers. Apart from that, on UDCA, we are also planning to file in US and the USDMF is planned to submit in Q4 FY25. Phenylephrine which we had completed the product validation for that, CEP is filed in the current quarter. Two new non-oncology molecules, Mycophenolate Sodium and Mycophenolate Mofetil, we are expecting to start plant validation in Q4 FY25.
Now I’ll start briefing about CDMO business, in which we — in the current quarter, we have started the dedicated block creation, which we are planning to do it for our current partner, Unicycive Therapeutics, and the block is expected to commission in next financial year. Among multiple CDMO programs, which currently are going on for one of our partners for US, where we are developing for their NCE program, API and formulation. I’m happy to share that the client has received fast-track designation from FDA, which again helps us in giving more confidence that we are working on multiple complex programs.
Now I’ll start briefing about peptides and polymers. In peptide and polymer, our first product, Desmopressin, we have received CEP. And again, here, we have started giving samples to various customers. Our second product Octreotide, we have already filed CEP in the current quarter. Apart from that, multiple GLP-1 peptides currently company is seriously working on it, in which semaglutide lab development is completed in current quarter. And we are planning to take this product for the plant validation in Q4 FY25. Teriparatide, which is the product peptide, which we had developed for osteoporosis, the product lab validation is completed in current quarters.
And on the polymer side, we had received order for one of the complex polymers for one of the big pharma, where in the current quarter, we have finished the initial development quantity supply for them, which they are planning to use in the ADC program. Now I’ll move to the formulation division, where in formulation, we have had lot of filings as well as few approvals. So first, let me start with Nilotinib where — which is the non-infringing formulation, which we have developed for which we are expecting a launch in Q3 FY25 where already we have partnered with the number one generic company in Europe.
Axitinib, which is a second product in Europe already, we have received approval in the current quarter. And we are planning to launch this product upon patent expiry, which is likely to happen in next financial year. Pemetrexed RTU, where already company had received NDA approval. We are seeing slow — we are seeing good sales traction. And quarter-on-quarter, there is a steady increase in the sales. Second NDA product, which is Bortezomib RTU, which is a subcutaneous injection, which we are the only company currently in the US to offer ready-to-use subcutaneous injection. We received NDA approval in current quarter and the launches are expected to happen in upcoming quarters.
Where already a company has partnered with — partnered in U.S. Our product Rotigotine transdermal patch is also filed in Europe, which is a very complex product where there were multiple studies which were involved, which were very complex. So we have successfully completed that, and we have already filed this product with our partners. And for the said product already company has partnered for launch and likely we are expecting approval in the next financial year. And then subsequently, we will do launch.
SMLNUD007, which we were developing for non-alcoholic fatty liver disease, the product Phase 3 studies were completed, and we have filed this product in India. Company is strongly focusing on developing multiple products on the GLP-1 especially on the diabetics side also. So for all the peptides, which we are developing API, we are also planning to do — develop formulation so that our focus on GLP-1 also is — also is very much there. And our first product, liraglutide formulation, validation batches we are planning to start in Q4 FY25. On USFDA remediation, the company is seriously working as mentioned in the previous quarter, and our remediation activity is expected to complete by end of Q3. And subsequently, we will wait for the further actions from the agency and further way forward.
Now let me start briefing about biologics, where we have invested over multiple years and company is seriously working in this segment where our first product Adalimumab in the current quarter we received approval from multiple additional indications in India market, which will help us in growing market share. For second product, Aflibercept, which is a complex eye injection, the company has started Phase 3 clinical studies in current quarter, and we are expecting completion sometime in next year. And subsequently, we’ll be planning to file this product in India. Two new biologics products, which are complex in — among which the first product already in the lab development is completed and now the scale-up activity is getting started. And for the second product, the lab development is ongoing.
On the CDMO side in biologics, the first project, which we are working with the Korean customers, the project, all the deliverables are completed for the current clinical studies — preclinical studies for our clients and the subsequent orders are expected in upcoming quarters. Our second CDMO project, which we are developing for a US customer, the first phase of the development of all our clients, we have successfully completed and now the project is expected to enter into second phase of development. On the third CDMO project for US client, we are expecting to complete the development phase for the third client in current Q3 FY25. In the current quarter, two new CDMO projects, we have signed where the development activity is getting started in Q3 FY25.
Now let me update you about recombinant human Albumin where I’m happy to share that our Phase 1 human studies were completed. And successfully, we have submitted our application for Phase 3 clinical study to DCGI in India. And we are expecting to start once — start the Phase III clinical study post approval from DCGI. Also, the USDMF for the Albumin is already filed and now for the excipient grade and multiple other applications, we will start doing sample feeding to various customers. And last but not least, on our CDMO partner Unicycive Therapeutics in the Q3 FY25, they have received NDA acceptance with the US FDA, which we have recently announced, which is very important milestone for the company, and we are expecting approval in next financial year.
As we move forward, we are confident in our ability to drive growth and success, our unwavering commitment to innovation, combined with our strong financial position enables us to capitalize on emerging trends and solidify our leadership position in the industry. I will now hand over to Alpesh, who will provide a detailed financial overview for the quarter.
Alpesh Dalal — Chief Financial Officer
Thanks, Keshav, and good evening, everyone. Let me briefly take you through the financial performance for the second quarter and half year ended September ’24. Our revenues for the quarter stood at INR349 crores. That’s a growth of 11% year-on-year and 16% sequentially and this was mainly driven by our formulations business, which witnessed very healthy growth in emerging markets as well as in the licensing segment. And the EBITDA for the quarter was at INR91 crores as compared to INR62 crores in Q2 of last year and a strong — with a strong 46% growth year-on-year. And EBITDA margins were 26% vis-a-vis 20% during the same quarter last year. I’m also happy to inform that Q2 FY25 was the eighth consecutive quarter of sequential EBITDA that we have witnessed. The higher EBITDA led to better PAT which stood at INR18 crores for the quarter versus INR1.6 crores in Q2 of FY24, while PAT margins improved to 5%. Additionally, I’m also pleased to inform you that during Q2 FY24, our balanced business under Shilpa Biologics has turned positive at net profit level for the first time.
Now moving on to our half-yearly performance. Our total revenue for the first half of current financial year stood at INR651 crores, recording a 13% year-on-year growth. And EBITDA for the same period was INR174 crores as compared to INR112 crores in last year. So that’s a strong 55% year-on-year growth that we have witnessed. Margins also improved to 27% as compared to 19% last year. Our PAT for the first half was INR32 crores, and PAT margin again was at 5%. Interestingly, the PAT at INR32 crores during first half is slightly higher than the entire profit for the whole of last year, last fiscal year. So what we have done the whole of last year, we have already achieved PAT level in the first six months of the current financial year.
Now coming on to the segmental performance. Our API business clocked revenue of INR193 crores, which is down by 13% year-on-year and 12% sequentially. And formulation revenues for the quarter were at INR120 crores. That’s a growth of 40% year-on-year and 15% sequentially. Let me also give you a quick overview of our balance sheet and cash flow positions. Our net debt was INR489 crores as on 30 September 2024. During the quarter, we repaid NCDs of INR300 crores out of INR450 crores and our finance cost during the quarter includes a one-time charge of INR8.3 crores for the proportionate issue related costs that were to be amortized over the entire life of NCDs, which have now been fully accounted for on account of prepayment.
The prepayment is also likely to result in interest savings of INR5 crores in a quarter compared to the current quarter cost that we reported. And on the CapEx front, our CapEx in the second quarter was at INR56 crores, which was majorly on account of the Albumin facility that we are setting up.
With that brief financial overview, I would now like to open the session for Q&A.
Questions and Answers:
Operator
Thank you very much. We’ll now begin with the question-and-answer session. [Operator Instructions] The first question is from the line of Sanjay from IThought PMS. Please go ahead.
Sanjay Elangovan
Hello. Hi, Keshav. Congrats on a good set of numbers. First on the second CDMO project for Fill & Finish, I think it has been signed for existing customers of the US market. Is the Fill & Finish just vials or have we — I’m just trying to understand if we have retrofitted our Fill & Finish facility with cartridges so that we can cater to insulin and GLP-1s.
Keshav Bhutada
Yeah. The current project, what we have signed is for a vials, okay? But our current biologic facility, we can even do cartridge filling, which are currently mainly used in GLP-1, okay? So the facility is well equipped to look — do both vial and cartridge filling.
Sanjay Elangovan
What would be the capacity in terms of say pens or cartridges, how many millions — I think 30 million, right, roughly?
Keshav Bhutada
Sorry, I am not aware about the exact capacity. So maybe on that, I can send you over the mail separately, okay?
Sanjay Elangovan
And second, we seem to be marketing insulin too given that innovators are moving towards GLP-1s, both [Speech Overlap]
Operator
Sanjay, your voice is breaking, can you please come in a better reception area, please?
Sanjay Elangovan
Yeah. Is it better now?
Operator
Slightly.
Sanjay Elangovan
Yeah, So given that innovators are moving towards GLP-1s, is there a plan for us to focus on rest of world insulin market. Our Dharwad microbial facility can be used for it, right? And even in the [indecipherable] new greenfield facility till Albumin is stabilized or ramped up, can we use that plant for insulin and GLP-1 drug product?
Keshav Bhutada
Yeah, Sanjay. I think currently, we are not working on insulin because we have a lot of pipeline work on which we are focusing on monetizing, okay? But yes, in the Dharwad facility or in the new fermentation facility, we are planning to do some fermentation products also using — which are used in GLP-1s, okay? But currently, these are at early stage of evaluation. I will be able to give you a more clear picture in the upcoming quarters.
Sanjay Elangovan
Okay. Third final question. The third CDMO project, tech transfer is ongoing for NBE project. If you could use the therapy or the market size for this NBE.
Keshav Bhutada
Yeah. We are not aware about the market size because usually in the CDMO contracts, we don’t get to know that, but it’s a project which is currently into early stage and entering Phase 1 studies, okay? So I think it is too early for us to comment there.
Sanjay Elangovan
Okay. Thank you, Keshav. I’ll come back in the queue.
Keshav Bhutada
Yeah. Thank you.
Operator
Thank you. [Operator Instructions] Next question is from the line of Monish Shah from Antique Stockbroking. Please go ahead.
Monish Shah
Yeah. Hi, good evening, Keshav. So just a few questions on your Formulations division for Pemetrexed that you said that K-code approval has come now. So can you help us understand what is the expanded market size and the opportunity versus earlier?
Keshav Bhutada
Yeah. Monish, currently on Pemetrexed, the most important part is, as you know, we have to get the insurance reimbursement as well as premium pricing. So both the things are currently completed in Q2, in which one of the J-code we were granted in Q1 and then subsequently, we got K-code granted in Q2, okay? So the main market share traction, we will see the main increase starting from Q4 or Q1 from next financial year. So at that time, I’ll be able to give more clear picture, but slowly quarter-on-quarter, we are seeing slowly uptake of — increasing uptake of volumes.
Monish Shah
Got it. And this will remain a limited competition product, right?
Keshav Bhutada
Yes, you’re right.
Monish Shah
Okay. And secondly, on Nilotinib that we are ready for launch now. This product, is it likely to remain an exclusive product for us for a few quarters or do you think competition will come in?
Keshav Bhutada
We expect some competition to come in next financial year for sure. But for this current financial year, I think it will be a limited competition, and we will be one of the most early movers in this.
Monish Shah
Okay. And lastly, on Rotigotine, when — I mean you mentioned that trials are ongoing and we submitted, so when do you expect the launch? And can you just help us understand the opportunity size here also.
Keshav Bhutada
See, in Rotigotine, currently, as I mentioned, there are no generic approvals currently, and it’s a launch on approval product for us, okay. So we are expecting approval sometime in next financial year because currently, the product just recently, we have filed and it’s under validation phase. So after validation phase, we will receive time table from EU. After that, I think we can give you more accurate time lines. And coming to the market size, it’s a decent market size and being a complex product, we expect less generic competition. So I think it will be a decent sizable product for us in the quarters to come.
Monish Shah
Perfect. And just a question on tax rate to Alpesh. So can you give us the outlook for the tax rate to ETR for next year and probably the year after also?
Alpesh Dalal
Yeah. So I think on the tax rate front, there are a few things which we are trying to correct on the interest income generated in the parent entity from especially the foreign subsidiaries. Also one of the subsidiaries where the interest currently — the operations have not yet started. So the interest is getting capitalized. And that’s the main reason why we are having this discrepancy in tax rate. Once we restructure these things, we should be in the region of 35% tax rate overall.
Monish Shah
Okay. So you think 35% tax rate will be effective from second half ’26 or a little later in ’27?
Alpesh Dalal
Yeah. So the second half ’26, we should be able to achieve it, hopefully, a little earlier than that.
Monish Shah
Okay. Thank you. That’s it from my side.
Keshav Bhutada
Thank you.
Alpesh Dalal
Thank you.
Operator
Thank you very much. [Operator Instructions] Next question is from the line of Krisha Kansara from Molecule Ventures. Please go ahead.
Krisha Kansara
Hi, sir. First of all, congratulations on a very good set of numbers and also for the ongoing debt reduction program. Sir, my first question is regarding the formulation segment and US formulation segment in particular. So if we see on a quarter-on-quarter basis, our US formulation sales are up from INR10 crores to INR19 crores. So in the previous con call, you had mentioned that there was no contribution from Pemetrexed. So I just wanted to check what was the contribution in this quarter since we are now — we will now start to get the profit sharing numbers in our book.
Keshav Bhutada
Yes, Krisha, I think — thank you for your queries. So the main reason why we are seeing increase in US sales is with Pemetrexed, we are seeing the profit share revenue started kicking in from the current quarter, and it will start growing in the upcoming quarters.
Krisha Kansara
Okay. So what was the contribution in this quarter, sir?
Alpesh Dalal
Providing some of these specific numbers in relation to profit share is commercially a bit sensitive. So we may not be able to share exact profit share numbers. So you’ll have to excuse us for that.
Krisha Kansara
Sure. No problem. And sir, my next question is regarding the debt. So our long-term debt has come down from INR560 crores to now almost INR260 crores. So congratulations on the prepayment of INR300 crores. Now in our QIP, we raised close to INR430 crores for reducing our debt. So we have the balance of INR130 crores. When do you plan to prepay that remaining debt using our QIP money. Any guidance on the time line?
Keshav Bhutada
So as far as QIP money is concerned, it has been fully utilized, Krisha. And the balance money that you were talking about was utilized immediately on receipt of QIP money because that was used for reducing our working capital debt, right? So this was to be timed in the month of August, the NCD payment. So that was the last piece that was pending. But everything else apart from the INR300 crores was fully utilized into the operations in the first quarter itself. So as we speak, entire QIP proceeds have been utilized for the purpose for which it was raised and our monitoring agency also has given us a report specifying that it’s been closed now. Everything has been utilized.
Krisha Kansara
Okay. Understood. And sir, our CDMO customer, which has recently received the fast-track designation. So did we receive any kind of a development fee or a milestone fee in this quarter from our CDMO customers? Since we supply the initial quantities to them?
Keshav Bhutada
No, this is only a pure supply arrangement. Here, we don’t have any milestones because this is the API supply.
Krisha Kansara
Okay. Yeah. Thank you, sir.
Keshav Bhutada
Thank you, Krishna.
Alpesh Dalal
Thank you.
Operator
[Operator Instructions] As there are no further questions, I will now hand the conference over to Mr. Alpesh Dalal for closing comments.
Alpesh Dalal
Yes, have you done with all the questions now?
Operator
We just have one question in the queue. We just got 1 question. The next question is from the line of Malani Somani from [indecipherable] Research.
Unidentified Participant
Hello, sir. Sir, first of all, congratulations for the great set of numbers. Sir, my question was like right now we have the plays of the promoters. So what are there these.
Alpesh Dalal
See the current share pledge is of a very small quantum of the total promoter holding, which is there, that was for a short duration requirement that they had which they wanted funding for. So again, it is expected that in the next 6 to 9 months time, the same should get cleared as well. This was for some of their personal requirements, a very small requirement for which they had placed a small percentage as pledge.
Unidentified Participant
Okay. And sir, sorry, I have last question, are you planning any further debt reduction in this financial year?
Keshav Bhutada
So see, basically, if you look at our cash flow, we have been generating sufficient cash flow at operating level, but we also have some CapEx for our Albumin facility going on and some capacity enhancement, which is happening in Tranexamic acid plant. So depending on when it comes up and what are those requirements, the additional cash flow that we generate out of operations, we are using that to reduce our working capital borrowing. But NCD borrowing, we will not be reducing from any of our borrowing yet in this financial year.
Unidentified Participant
Okay, thank you, sir.
Operator
Thank you very much. Next question is from the line of [indecipherable], Individual Investor. Please go-ahead.
Unidentified Participant
Hi, good evening. Thanks for the opportunity. And congratulations for delivery of a great set of numbers. I want to understand, what the management thinks in terms of 5-year vision for the company. Where do you want to see it at the end of 5 years? And what’s the plan? How you’re going to do it basically?
Keshav Bhutada
Yeah, I think it’s a very good question. So I think to answer where we are going forward and in 5 years, I think, you have seen the Shilpa history. So our main focus has always been to grow as a company as a one-stop solution, okay? So in 5 years, you are currently seeing we are into small molecules. We are into biologics, we are into Albumin, we are into formulations. So the main focus is to monetize these assets. And in 5 years, if we do this itself properly. We will see that great numbers happening, which we have been seeing from last 8 quarters. So the main focus what management is currently into is focusing on complex products and not only developing it, monetizing them at the right time and then having a clear launch strategy for each product and partnering at the right time. So that as a company, we are well established and everyone recognizes us as a company which is into all the segments.
Unidentified Participant
Thanks a lot and all the best, sir.
Keshav Bhutada
Yeah. Thank you.
Operator
Thank you very much. Next question is from the line of Neha Kharodia from Abacus Asset Managers. Please go ahead.
Unidentified Speaker
Yeah, hi. Thanks for the opportunity. Sir, just wanted to understand about the weakness in the oncology API business. So Keshav, you also spoke about the slower pick up from 1 of the clients, but any other reasons into that?
Keshav Bhutada
Yeah, Neha, the main dip in the oncology business, which we have seen against — if you see quarter-on-quarter, there has not been any increase nor decrease. But if we see against large financial year, there has been a decrease. And the main reason is because of our major customer, Intas, who had received the FDA warning letter in last financial year. And over last quarters — last multiple quarters, they have worked on remediation of that. And now we are seeing slowly quarter-on-quarter a slow uptake from them. And I think in the upcoming quarters, we should see there is the good traction with Intas also. And if we see the total business from Intas for last financial year to this financial year H1, we have seen almost a big decrease, but we have been able to sustain that decrease in business.
Unidentified Speaker
Okay. So as that business recovers, how should one look at the growth in the oncology as well as non-oncology, if you can also talk about that.
Keshav Bhutada
See, on the future numbers, I think I am not in a right position currently to specify that. But I can tell you that currently, it’s not about our external sales. Our main focus is on our captive formulations, where if we go on launching all the products which we have planned, in the upcoming quarters, we will see a good traction and good growth in oncology as well as non-oncology business.
Unidentified Participant
Okay. So we may not speak about the exact numbers, but one should look at the single-digit growth going forward? Or we can expect even further improvement considering contribution increasing from the newer products as well as from the recovery from the loss business.
Keshav Bhutada
Yeah. We can — minimum, I think, surely, you can expect a single-digit growth. And in the upcoming financial year, we are very positive of even double-digit growth.
Unidentified Participant
Okay. Understood. And also in the presentation, you have mentioned about 3 new CDMO client additions in the API business. So any color into those projects?
Keshav Bhutada
Yes, these are three new projects. So this is a cycle in CDMO where every quarter, we will see — we will keep adding some clients. And this is, again, a program which is currently started into development phase.
Unidentified Participant
Okay. And any color into the potential of these projects like how should one look at it?
Keshav Bhutada
No, in CDMO, we can give the right picture when the program is in the advanced stage, maybe in Phase II or Phase III and close to commercial launch. But up to development and Phase 1 supply, it’s more about milestones and their deliveries.
Unidentified Participant
Understood. And also the dollar business, we have — that has remained weak year-on-year as well as sequentially. So just wanted to understand the reason behind it and how should one look at it going forward?
Keshav Bhutada
Yeah. In the Europe business, the main focus, what we are having is on Ursodeoxycholic acid API, which I mentioned in call, where we were waiting for the CEP approval for that. So you will see a good increase in the Europe API business in the upcoming quarters.
Unidentified Participant
Lastly, on the tax rate. So as Alpesh has mentioned that we should expect that to come in the region of about 35% from, let’s say, H2 FY26 or earlier. But even till then we should see sequential decline or any more further color into that?
Alpesh Dalal
Yeah, Neha. As I mentioned, that we are working on various aspects to get — to reduce this particular effective tax rate as I mentioned this broadly because of certain intercompany transactions that we have got. So we are working on that. We should start seeing some improvements there as well, but I will not be able to provide a complete color on this from a timing perspective as to how much will happen at what point in time.
Unidentified Participant
Okay, understood. Thank you.
Keshav Bhutada
Thank you. Thank you.
Operator
Thank you very much. We take the next follow-up question from the line of Krisha Kansara from Molecule Ventures. Please go ahead.
Murali Nandan
Yeah. Sir, I have one question on Albumin. So we are expected to start the Phase 3 trials by early next year. So if you could please guide us on the time line of, let’s say, excipient grade Albumin versus the therapeutic grade Albumin. Since you are expected to start the filing formalities in, let’s say, FY26 or FY27 early. So will this finally pertain to excipient grade first and then we will move to therapeutic grade? So I wanted that time line on both the types of Albumin, if you can guide us on that?
Keshav Bhutada
Yeah. See, on Albumin, as you know, there are two applications. One is excipient grade and second is therapeutic grade, okay? So in excipient grade, now we don’t have to wait for any of the filings. And currently, we have — since we have already drug master file for this product. So anyone who gives us the inquiry for samples or for future quantities, we are in a position to start that business, okay? So which we will try to — we are already starting to work on that. And when we have a good picture on that, we’ll surely update all of you, okay?
And now coming to therapeutic use, yes, you are right, we are planning to start Phase III clinical study sometime early next year. And the study duration is totally 1 year and after that, we will be filing this product. And then subsequently, we will be launching. So sometime in FY27 is something we should be able to file and get approval for the launch. Is it clear?
Krisha Kansara
Hello.
Operator
Yes, Krishna, you’re audible. Go ahead.
Krisha Kansara
Yeah. Yeah, yeah. That was very helpful, sir. Also, just one follow-up question, if I may ask. So can you guide us on the end usage for therapeutic-grade Albumin? What would be the majority end users? Or are there any new areas or new end user industries opening up for Albumin, just a color on that, if you can give.
Keshav Bhutada
Yeah. On the therapeutic use, the main application for which Albumin is used is to maintain blood osmotic pressure, okay? But apart from that, Albumin is widely getting used now into vaccines, in drug deliveries, in cell culture grade. So there are — like I can list down more than 20, 25 applications are there for usage in Albumin, in cell and gene therapy also many companies are using it. So the market is expected to grow year-on-year, and multiple applications are getting discovered in this.
Krisha Kansara
Okay. But can we say that a majority of Albumin will be used as cell culture media, like that will be the major end usage.
Keshav Bhutada
No, no, the major end use in Albumin is in therapeutic use which is mainly used in hospitals to maintain blood osmotic pressure.
Krisha Kansara
Okay. Okay. Okay. That was very helpful, sir. Thank you so much.
Keshav Bhutada
Yeah, thank you.
Operator
Thank you. [Operator Instructions] As there are no further questions, I will now hand the conference over to Mr. Alpesh Dalal for closing comments.
Alpesh Dalal
Yeah. Thanks. Thank you, everyone, for your continued interest in Shilpa, and we’ll continue to keep interacting with all of you. Happy to answer any follow on questions that any one of you may have. You can reach out to the company through our Investor Relations team. Thanks a lot.
Operator
[Operator Closing Remarks]