Shilpa Medicare Ltd (NSE: SHILPAMED) Q3 2026 Earnings Call dated Feb. 06, 2026
Corporate Participants:
Unidentified Speaker
Mohnish Shah — head Investor Relations and Strategy.
Keshav Bhutada — Executive Director
Analysts:
Unidentified Participant
Shubham Sehgal — Analyst
Kiran — Analyst
Krishna Kinsara — Analyst
Amish Kanani — Analyst
Nikhil — Analyst
Sanjay Kumar — Analyst
Mehta — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the 3Q and 9 months FY26 results conference call of Shilpa Medicare Limited. 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 Zido on a Touchstone phone. I now hand the conference over to Mr. Mohnish Shah, head Investor Relations and Strategy. Thank you. And over to you, Mr. Mohnish.
Mohnish Shah — head Investor Relations and Strategy.
Thank you and welcome to our 3Q and 9 months FY26 results conference call. Today we are joined on the call by Mr. Akesha Butada, Executive Director and CEO of Shilpa Pharma Life Sciences and Mr. Alpesh Dalal, our CFO. The financial results and the presentations are uploaded on the stock exchanges and the transcript along with the audio will be available on the website of the company and the stock exchanges as well. Please note, today’s discussion might include certain forward looking statements based on current expectations and assumptions. These statements are subject to risks and uncertainties that could cause actual results to differ materially.
The company undertakes no obligation to publicly update or revise any forward looking statements. With that, I would like to hand the call over to Mr. Keshav for his opening remarks.
Mohnish Shah — head Investor Relations and Strategy.
Thank you. And over to you.
Keshav Bhutada — Executive Director
Hi, Good evening everyone. Thank you for joining our call today. Each quarter our strategy is translating into tangible milestones. And this quarter is no exception. We are pleased to share another quarter of highest revenue and EBITDA numbers for the company. As a company, our focus is on limited competition products first in class therapies, complex delivery platforms, integrated CDM offerings and high value biologics.
And our model is simple. Invest in R and D, build differentiated assets, launch it with strong margins, scale it through partnership and we’ll continue to focus on it. Now let me start briefing about various business divisions. I’ll be briefing my talk on three subjects. API formulation and biologics. Let me start with the API business in which on the CDMO side, let me start with the specialty CDMO in which we have added in the current quarter three new CDMO programs. And among our existing programs, our first NCE program with a US customer IT commercialized by our partners.
And our second NCE program is the phase three studies are ongoing for our US.
operator
Sorry to interrupt. We are unable to hear the management.
Keshav Bhutada — Executive Director
Yeah, sorry, I had small network issue and on the speciality cdmo. So am I audible?
operator
Yes, you are.
operator
Please Go ahead sir.
Keshav Bhutada — Executive Director
Yeah. Yes sir. So and in the existing CDMO program, the second U.S. nCE program for our partner, the phase three studies are ongoing. And the third U.S. nCE program where we have partnered with Unicycle Therapeutics where a dedicated commercial block we were constructing and the block will get commissioned in Q4FY27, FY26 and we will be taking exhibit batches in Q1FY27 and we have also received with one of our US partner we were doing a Phase 2 NC program where we are developing both API and formulation for them. Our partner has received orphan designation and fast track designation and the same program they are doing it for multiple indications.
Now let me start briefing about oncology and non oncology business. We have added in current quarter 10 new oncology products in grid which are globally top blockbusters and three new oncology products were validated in current quarter. And we have also completed scale up of one non infringing oncology API and for which the validation batches will be completed in Q4 FY26 and for the same product we will be doing formulation. Also on the peptide side Semaglutide which is one of the largest blockbusters on glp. One side we are developing both injectable and oral solid product in the formulation side and on the API side we are developing both synthetic and semi synthetic API.
The plan scale up and validation batches are initiated and we are planning to complete in Q4 Q1 FY27. On the CapEx side a company is planning to build a large scale peptide manufacturing capacity for which the conceivable work is already started and we are planning to complete this capex in second half of FY27. Now let me start briefing about formulation business. So on the formulation side the our first NC molecule which we have launched in the current in the Q3 was not the ODCA nor also deoxycholic acid which has exceeded our expectations and we have had great response from the physicians and we have great visibility for the project and we have firm orders already in place for Q4 and molecule has excellent response in patients and we are confident that it will have significant potential in next financial year.
Now for nor udc. The same molecule we are planning to take globally to Europe and US market. Also we are planning to start human studies for Europe in next financial year. We are also doing the same product for multiple other different new indications. Also on the existing commercial products where three commercial 5, 5B2 products which are already in market we are seeing Good traction and every quarter there is a growth quarter on quarter on the Europe market NILOTV which is our current commercial product we are seeing good traction on volumes every quarter on quarter. On the development side one new complex injectable product.
We have completed scale up batches in the current quarter and we are planning to complete registration batches by Q4FY26 and the same product will be filed globally the current quarter. We have successfully received marketing authorization for our first transdermal patch product which is Roti goatee and we will be planning to launch this product with our partner in FY27 and Rotigo team transdermal patch product in US also we have we are planning to file in Q4 FY26. Now let me start I’ll give you a short update on complex pipeline. On complex pipeline our first product which is online sir on long acting injection we have successfully completed phase three clinical studies and the product is already filed in India and we are planning to commercialize in first half of FY27 for same product Hero clinical study we will be planning to start in Q4 FY26 and we will be planning to complete European phase 3 studies in FY27.
Second product SML top 09 which is a topical product for androgenic alopecia and we are planning to complete human clinical studies in FY27 for the same product. We have already submitted European scientific advice and we have got positive outcomes on our clinical study design. Third product which is SML ODS014 it’s a first product first of its kind what we are developing in generic site but a complex i5 e2 product where our registration batches are completed and we will be starting clinical study in Q1FY27 and filing is planned in second half of FY27 in US in the next financial year there will be two new launches which will be happening in Europe market on formulation side.
Now let me brief you about our CDMO agreement where we are doing in the integrated API with formulation project with unicisive therapeutics where we are planning the unicisive therapeutics have resubmitted the filing to FDA and they have received PDUFA date of 06-29-2026. We expect commercialization to happen in FY27. Now I’ll brief about our biologics division, our first biosimilar which is Afliberset which is a complex eye injection. Our India phase three studies is going as planned and we are planning for submission in first half of FY27 it will be one of the very few generic players will be launching this product in India with great potential for which already company is partnered with two of strong ophthalmic partners.
We have two new biosimilar products which is which are already entering Human Studies in FY27 SBPL01 which is the ADC product which is the first ADC lab developed ADC product which company has developed and the product lab development is completed and we will be entering human studies of our first ADC product in next financial year. On the NB new map side we have partnership with Alveolus and Maptree where both Alveolus and MaptREE project will be entering phase one human studies in FY27. I’m happy to inform everyone that Maptree product which where we are a CDMO exclusive partner for them.
The product has received orphan designation for two different indications. GMP facility for our ADC prod ADC manufacturing we are planning to commission in Q4FY26 it will be first of its kind ADC manufacturing facility in India with integrated payload linker and conjugation facility on CDMO side in biologics we have five active programs ongoing with multiple partners in which two programs will be be entering phase one studies in next financial year. For our partner on albumin side which is a new biological entity which company is developing the global CT clinical trial protocol approval is received in current quarter and IMPD submission for Europe is targeted in Q4 FY26.
In summary, whatever heavy lifting was required for the company on the investment side, we have largely completed in last many years and the focus now is on execution, scaling and getting maximum ROC from all our investment. Thank you.
operator
Shall we start with the question and answer session?
Unidentified Speaker
Yeah, there’s actually the financial update is still pending.
operator
Please let me know.
Unidentified Speaker
Yeah. So good evening everyone. I’ll just quickly take you through the financial performance for Q3 and 9 months. As Keshav had mentioned, we have reported the highest ever quarterly revenue of 411 crores recording a growth of 28% year on year. Whereas our nine months revenue were at 1110 crore growing at 14%. Our gross margin for the quarter stood at 68% and 71% for nine months period. We also reported our highest ever quarterly EBITDA at 115 crores as compared to 82 crore in Q3 of FY20 reflecting a robust growth of 41%. And EBITDA margins for the quarters were at healthy 28% as against 26% last year there is EBITDA margins for nine months were 29% as compared to 26% last year.
So this improvement in EBITDA margin was primarily driven by increased revenue driving positive operating leverage. Now moving to other financial highlights, our interest outgo has been has seen reduction year on year and we believe it is now stabilized. It is now stabilized at the current quarter run rate for the near future as we expect to fund our CAPEX program mainly by our internal accruals. And during the quarter we also had an exceptional item amounting to rupees 13 crores pre tax on account of change in labor code implemented by the Government of India. Adjusting that to the path for the quarter stood at 55 crore and 146 crore for nine months period.
The nine month path is nearly double of full year path of FY25 reflecting the acceleration that we are witnessing in our growth and we have also incurred a capex of about 87 crores during the third quarter. And I would also like to draw your attention to the fact that despite increased CapEx, you know we have been able to improve our ROC profile of the company, our adjusted roc excluding investments made in our high growth potential businesses like biologics and NBV, we have a significant improvement from 3.5% in FY23 to over 17% in the first nine months period.
With Biologics business pipeline progressing well, we remain confident of improving our operating leverage resulting into higher ROC in coming years. Now a quick highlight on the segmental performance, our non captive API business clocked a revenue of 186 crores compared to 183 crores in the previous year. However, our API unit has been progressively increasing its support for our in house product portfolio formulation business and including this captive business, the API business witnessed a robust growth of 11% from 218 crores in third quarter of previous year to 243 crores in the current year. As far as the formulation business is concerned, the formulation revenues for the quarter were at 177%.
Sorry 177 crores growing at 50% year on year and ex licensing income. The base business reported a robust growth in the revenue revenue growth of 104% quarter on quarter and 83% for the nine months period. And to sustain this revenue momentum in our FDA vertical we continue advancing a pipeline of complex products. Our strategy of developing and launching niche products globally through strategic partners is gaining traction as evidenced by our EU formulation business which delivered over 100% revenue growth year on year and for our formulation business, we also launched nor UDCA domestically under a dual strategy.
One under our own label and three other through a strategic partnership with three large pharma companies in India. So, and the strong initial reception that this product has received as translated into our very healthy order book for the coming quarters as well. During the quarter we also received approval for our complex trans herbal product Rotigotin from ema. With launch preparations underway with our market partner, we expect to launch in Q1 of FY27. With this I would now like to open the forum for Q and A.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shubham Sehgal from Simpl. Please go ahead.
Shubham Sehgal
Hello. Thanks for the opportunity. Am I audible?
operator
Yes, you are. Please go ahead.
Shubham Sehgal
Yes. Okay, so my first question is that we reported revenues for the Europe region around 73 crores for this quarter. And also like the scale up that has been there the few past quarters, does this revenue include purely product sales or it also includes the licensing income for this product?
Unidentified Speaker
Yeah, so this doesn’t include any licensing income. It is only in relation to the products that we have in product sales that we have got.
Shubham Sehgal
Okay, so we report in the license fees line item. Right? So this 73 crore
Unidentified Speaker
license line item is separate.
Unidentified Speaker
So this, this what we have reported here under EU is only in relation to product sales.
Shubham Sehgal
Okay. And so similarly for even the US revenues it just represents the market. It does not include any licensing revenue, right?
Unidentified Speaker
Correct.
Unidentified Speaker
Correct. That’s right.
Shubham Sehgal
Okay, got it. Next question. Is that so? Actually yeah. So apart from the licensing in the Europe sales only, I want to ask like does it include any profit share in that? Profit?
Unidentified Speaker
Profit. Profit share is part of a product sale only. It’s just that profit share comes in a little later. But it is in relation to product sale only. So profit share is included there. Yeah.
Shubham Sehgal
Okay. So so for example for Naruto products, what’s quite the range, you know like in which time we received the profit share. So like earlier in we received half yearly. But for Nero Tenneb, like how does the profit share range when how much lag do we receive it?
Unidentified Speaker
So basically you know we do get you know updates from Our partners quarterly. There are times that we have to do some reconciliation and also there might be some small adjustment here and there for that. But generally we do receive all the updates from our partners on a quarterly basis.
Shubham Sehgal
Okay, got it. My next question was about our non on co API segment. So the current scale up that we’ve seen in the revenues. So we actually.
operator
Interrupt Mrs.
operator
But we lost two in between. Can you please repeat?
Shubham Sehgal
Hello. Yes, sure, sure, sure. So I was asking about API segment capacity expansions. Right. So that we’re seeing it right now. The scale up is reflecting that capacity expansion realized capacity or is still, you know like room for more scale revenues in that expansion capacity.
Unidentified Speaker
Sorry, I think we are not at all able to hear you. Then there is lot of disturbance.
operator
Mr. Shubham, can you please check your connectivity because there is a lot of voice which is breaking. We are unable to hear.
Shubham Sehgal
Is it better now?
operator
Yes, please go ahead.
Shubham Sehgal
Yes. So I was asking about the non co API segment and basically the revenues that we are seeing right now. The scale up, is it affecting the capacities that we’ve expanded or is there still room for more scale up there in. So expanded capacities?
Unidentified Speaker
Yeah, there is room for capacity. So we are not utilizing fully on non oncologic capacity because there’s. There are some products where the launch and full volumes are expected to grow quarter on quarter. So we will see an increase in non oncology revenues in the upcoming quarters also and even in next financial year.
Shubham Sehgal
Okay.
Shubham Sehgal
And that will. So like we do have room, right? Like the capacity expansion that we had done for our products.
Unidentified Speaker
Yes,
Shubham Sehgal
there is still room left.
Unidentified Speaker
Yes, you are right.
Shubham Sehgal
Okay. Okay, got it. My next question was about like the, about the CDMO molecule which has received the US FDA approval and expected to commercialize in Q4FY26. Could you provide any color on it? Like what could be the scale of the molecule and if that’s possible.
Unidentified Speaker
No, actually it is our partner product and we are bounded by confidentiality under that. So whatever we will be able to.
Whatever product sales we will be doing. Right quarter on quarter. I think that will be visible in the numbers in quarters to come.
Shubham Sehgal
Okay, but are we the excluding support partner here?
Unidentified Speaker
Yeah.
Shubham Sehgal
Okay, got it. I’ll just join back in the queue for a few more questions. Thank you.
Unidentified Speaker
Thank you.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, we request you to please limit your question to two per participant. If you have a follow up question, you may rejoin the queue. The next question is from the Line of Kiran from Table 3 Capital. Please go ahead.
Kiran
Thank you so much for the opportunity. Fantastic results. All the fructifying of a lot of years of effort is coming through. I had a couple of clarifying questions on the formulation standard. I mean it is very heartening to see we had about 176 crore total and ex licensing is about 146. Should we take this as a base revenue because Europe 73 crore. I don’t know if it’s base or because it includes profit share. It can vary. But do you think about 150plus revenue now? It seems base case for formulations.
Keshav Bhutada
Yes, you’re right Kiran. It can be assumed at least for upcoming quarters.
Kiran
Got it. Any reason why ROW has degrow this year? Not year on year but essentially Q4FY25. We did 44 then 36 then 25 then 24. Row, are you facing any particular challenges?
Keshav Bhutada
See ROW is a purely tender driven supplies and sometimes there are few tender supplies which we would have done in one quarter and that is supplied for like two quarters. Right. So I think ROW is majorly a tender driven business market. So you will see that quarter on quarter there may be variation. But overall if you see on a year on year basis. Right.
ROW business has grown.
Kiran
Got it. Okay. My second question Keshav is in terms of oncology scale up we we are struggling to cross that 140, 150 crore mark. Q1 was 116 then 141, then 111. Any particular, you know, direction or challenges in terms of how we can grow this oncology revenue substantially over the next one year.
Keshav Bhutada
And on oncology side what we are trying to do is measure of our supplies. Right. Some percentage of it. We are trying to do it more for captive because on captive. Right. You will have formulation sales also and that is very good for the company.
But apart from that there are many other new products which are under validation. So for last two years we had some issues with the taking new product validations which we have resolved and we have now good capacities available for taking new products. So you will see that in the upcoming financial year Oncology as a overall business also will grow.
Kiran
Got it. Got it. And final question. Alberman, in the presentation we’re seeing phase three trials we have started both for India and Europe in Q4 FY26. Did we start recently? I mean we were supposed to start in Q2.
So any particular, you know delays are we filing from the new facility? If you could just give some Color. That’d be great.
Keshav Bhutada
Yeah, clear. And see on albumin. I think already I briefed on previous calls also. See what is important is we have we getting the clinical study approval. So you will see our global clinical studies is divided into two parts. We have patients from India as well as Europe. Okay. So from India, whatever patients were there. We have even informed everyone that our India clinical study approval we have received in Q3. Okay. To do global clinical studies from India, from Indian regulatory body and same for Europe.
What we are planning to do is in Europe. To start any European clinical study you have to go for IMPD submission. So IMPD submission is something which we are targeting in Q4. Once that IMPD submission approval is there, then the study will start. So tentatively, our study should start in next quarter. Like so. I mean in the first half of FY27 with IMPD approval.
Kiran
That is for Europe. India has already started.
Keshav Bhutada
Yes. Yeah. India. The study will be started from our new facility. Yes, you’re right.
Kiran
New facility. And any timeline Keshav on albumin in terms of when you expect the trials to get completed, especially India ones.
I mean Europe can take time.
Keshav Bhutada
See, as I already informed in previous call also we are planning to complete our India study maybe in FY27. End of FY27 or it can be maybe first quarter of FY28.
Kiran
Okay, perfect. Thanks so much and all the best.
Keshav Bhutada
Yeah, thank you.
operator
Thank you. The next question is from the line of Krishna Kinsara from Molecule Ventures. Please go ahead.
Krishna Kinsara
Hello. Am I audible?
operator
Yes, you are.
Krishna Kinsara
Hi everyone. First of all, many congratulations to the entire team on a very impressive set of numbers. My first question is on Nilotinib. If we look at our European formulation segment this quarter, it has grown from 35 crores to 73 crores if we compare it year on year. So how much of this growth was contributed by Nilotinib? And also in earlier calls we had emphasized on lack of competition from generic players in this case. So has the scenario changed and or is it still the case that competition remains limited? This is my first question.
Keshav Bhutada
Yeah, it’s a very good question. And see first part what I want to clarify. Europe is a very tender driven market. Okay. And even today if you see we have launched Neurotinib in Europe from now many quarters even today innovator controls almost 40% market in Europe. Okay. So what I’m trying to say, Nilotinib as a product by itself in Europe is a tender driven product. And what we are, the situation has not changed as on date currently and we are seeing good traction on volumes as well as on sales which I mentioned in my speech also that quarter on quarter the sales is increasing.
Okay. And coming to second question, how much of the European sales is Nilo tv? We don’t disclose product specific numbers. So I think that part, it will be difficult for me to explain. Sorry.
Krishna Kinsara
Okay, no problem. Thank you for the answer. My next question is on our API segment. So if we look at our history of last seven, eight quarters, there has not been any growth and we had recently increased our capacity of E APIs including tranexamic acid and others. So when can we expect our API segment to start benefiting from this increased capacity base and eventually, you know, start recording a double digit kind of a growth.
Keshav Bhutada
So Krishna, I think first part API segment, if you see the nine months number itself, right. For the, if you compare last year against this year, last year we have done close to 622 odd corrodes and this year we have done 725 crore. So API by itself in nine months has grown by almost 17 odd percent. Right.
Krishna Kinsara
But if we exclude the captive consumption.
Keshav Bhutada
As I had mentioned in my speech also see the API business is, you know, also supporting the formulation business with the suppliers. And that’s a strategic call that we have taken because you know, you get end to end margins there. So it is not appropriate because it’s a sizable supply that happens right from the same plant, same this thing. So excluding that and saying that the growth is not happening in API probably is not a correct way of analyzing it.
Krishna Kinsara
Yeah. Okay. And when can we expect to start seeing the benefits of the increased capacity like the recent CapEx that we did in API like as the volume ramp up started?
Keshav Bhutada
So you will see volume ramp up happening in maybe from starting from second quarter of next year.
Krishna Kinsara
Second quarter of next year. Okay. Okay.
Keshav Bhutada
Yes.
Krishna Kinsara
And just one last question on Nor udca. It’s, it’s been a few months since we launched it and I understand that this could be too early for any sort of guidance, but in our last conversation you mentioned that from Q1 of FY27 we could see a meaningful ramp up in this molecule. So if you can just give an update on, on that. How is the order book shaping up from let’s say the three marketing partners with whom we have tied up? If you can just give some sense around Nor udc.
Keshav Bhutada
See especially on Nor udc as I mentioned, right. It has, the launch was very successful and it has exceeded our expectations. So whatever growth we were expecting to start from Q1, right. We would see that in Q4 itself. So you will see that from. Already we have a strong order book at the end of Q3. We had strong order book of Q4 by end of Q4. So it means for the whole of Q4 already, we have order book covered from all three of our partners and including our captive sales also. So we have seen good traction in the PROM molecule.
And as. And when we have more product being sold and it reaches more patients, I think we’ll have more idea of that, of the product.
Krishna Kinsara
Okay. Okay. Thank you. So thank you for your answers.
Keshav Bhutada
Yeah, thank you.
operator
Thank you. The next question is from the line of Amish Kanani from novice investment managers. Please go ahead.
Amish Kanani
Congress on a very good set of numbers. Sir, you know, it looks like FY27 also will be a very good year. And you mentioned that in presentation. The question is one, which division do you think will really contribute, you know, next year? I know, you know, maybe each one is firing, but think give us some sense for us to model FY27, which division we should look forward to as, you know, something, you know, which will really contribute to the higher growth. And second, you may not quantify it, sir. And second, sir, congrats on this rare cancer drug confirmation.
The question there is one. Since it’s a partner drug, should we look forward to some licensing income as it progresses, or should we be worried that FY27 will be an investment year for some clinical trial and maybe the benefit will come later because it looks like, you know, it could be a sizable drug, but if it, you know, gets an approval. Yeah, Mish, I think I’ll answer your second question. So on the product where we are partnered with the partner right there, for this product, which is for orphan designation, we are not expecting any licensing revenue there.
And our partner will be doing clinical studies, which you rightly mentioned it will be done in next financial year. So we have to. We will have a manufacturing revenue. I think that is the major part of revenue which we will get as and when the molecule is advancing the development phase. Okay.
Keshav Bhutada
And on the second first question which.
Keshav Bhutada
You have asked, Growth across.
Keshav Bhutada
Yeah, growth across the next financial year. Right. The major delta. What we will be seeing, I think it will come more from our biologics and formulation business. And API will be more like a study business, which will continue to grow at a steady pace. Okay. And sir, one last quick question on the albumin side, sir, is this. Is there a now line of visibility that it should be commercialized? If we are successful in FY28 at least in India 1 and 2, if you can just remind us if possible on the overall, you know, market opportunity size for that track, let’s say in India or globally, what kind of size potential size it is which we are interested to answer your first question.
Yes, FY28 commercialization India. Yes, it’s very much possible for us as on today. Okay. And what is the potential? How big it will be? I think that is something we would. We don’t want to commit anything today or even comment on that. It’s a good opportunity. Albumin by itself is a shortage product always. It has lot of complexities on supply chain. Right. So bringing a recombinant version, purer version will always have advantage. So. So I think our today’s focus most important is on starting and completing clinical studies. I think which is most important milestone for this product and same the company is currently focusing.
Amish Kanani
Sure.
Amish Kanani
Thanks.
Keshav Bhutada
Thank you.
operator
Thank you. The next question is from the line of Nikhil from SI mpl. Please go ahead.
Nikhil
Yeah, hi, good afternoon. Thanks for the opportunity. I hope I am audible.
operator
Yes, you are.
Nikhil
Yeah. On Nor udca I just want see we’ve launched the product and as you mentioned in the call that the launch has been pretty good. Better than our expectations. And in the starting you mentioned we would look at trials in Europe and us. But as we understand in Europe there is already a trial which is ongoing and that player has also out licensed it to for some of the geographies. So based on the like the market development which we have seen. How are you thinking about row markets where based on Indian trial you may be able to launch.
So any thoughts on that?
Keshav Bhutada
Yeah. See Nor UDC as a product. Okay, I’ll divide my answer into two parts. One is Europe and rest of the world. So for Europe market. Yes, you are right. Already there is a company which is an innovator who is doing this product for some indication. Okay. What we are doing is completely different. It’s for a different indication. Okay. And more details on that which indication how the market size and all we will go in a. Because to avoid competitiveness we would inform this to our investors in right time. So currently what I can tell you we are going ahead for Europe and it’s a very promising study which we will be planning.
But it will be for a completely different indication. Okay, now coming to the row market question what you have asked. Yes, Our India study was covering row study design also. And already in row markets we have started partnering. We have even Started filing in some of the row markets. And you will see in the next. Our target is the next financial year to file in all the majority of important row markets.
Nikhil
Okay. So based on India market and row market and based on whatever studies you would have done, do you see this product has the potential to like become a significantly large product.
Like 200, 300 crores kind of a product. I’m not asking for timeline but based on the market opportunity and based on the indications what you have received. How do you see it?
Keshav Bhutada
Yeah, see as we already mentioned, right. This product NAFLD as a disease by itself is very prevailing. And in India itself there are 25% patient population who is suffering from Nfld which is as per the statistics. So I think yes, it’s a significant opportunity and a meaningful opportunity for the company. How much it will be, when it will be. I think we as I mentioned already, right.
It will be told more in the upcoming quarters.
Nikhil
Fine, sure. Thanks. I’ll come back.
Keshav Bhutada
Yes, thank you.
operator
Thank you. The next question is from the line of Sanjay Kumar from I thought pms. Please go ahead.
Sanjay Kumar
Hi Keshav. First question. On Oncology API. Small companies are entering and gaining market share. Large companies which are presented other therapies are entering Onco and gaining market share. Filing DMFs. You alluded to capacity constraints. Okay, but that’s fine. But even in terms of product development, I think if I look at the timeline, we were late to file. Our other DMF filings are more of base chemicals like Lithotrexate. We rectify products like Tivozanib, Rhinogolix, Ruxolitinib. So where did we lose the plot in terms of new product development? Especially in Onco where we are supposed to be ahead of peers.
Keshav Bhutada
Yeah, Sanjay, I think it’s a very good question and I think I’ll give you a very clear answer on that. Oncology has been our main business and we’ll continue to focus on. Yeah, and you’re right. In last one year we have not taken more oncology new molecules only which were required for our captive sales. We have done it. That’s a very right observation. But as a company. Yes, we have. Even today we have very strong oncology pipeline Palgocyclib. And all these were validated itself last almost one year back. Right. So you will see in next one year there will be lot of filings which will be coming.
And as I already mentioned in my speech, each of these molecules are blockbusters and one differentiation which Shilpa will always have. I feel Is we’ll have something differentiated either in API or in formulation which will either which will help us in getting better market share. Like you have seen classic example of nilotinib, right? Where we have done nilotinib base which has given us advantage in launching early, right? Like that we have already shortlisted products which are already in various stages of development. Close to four to five products already which are in advanced stages of development.
Sanjay Kumar
Okay, can you name those products and also give an update on the US FDA remediation work and the warning letter for ja.
Keshav Bhutada
The molecule names we will not be able to give currently because you would have seen even in yellow dnip case site we have disclosed that in a very later stage just to ensure that we get maximum market share. Okay. And to avoid competition. And coming to your second question on US FDA thing with after the USFD inspection we have finished all the KAPAA and KAPAA responses are submitted to US fda. Now we are waiting for reward from usfd.
Sanjay Kumar
Okay? Okay. And second on you mentioned about a new peptide capacity. Do you have any visibility there? What kind of products do you want to make? What is the magnitude of the capex? The quantum of the Capex? The reason for asking is we spent big one Albumin, transdermal patches, dispersible films way ahead of time. I understand albumin because the potential is significant but in terms of irr, in terms of Roc Rock, I think our Capex and patches and flumes will take a lot of time. So have you calculated all those when you are. When you want to set up a new peptide capacity?
Keshav Bhutada
Yeah Sanjay, I’ll give you a very quick answer on that. As a company also we have very clearly defined ourselves that now we will not invest anything which is a long listed investment. So peptide investment, if you see API business as a large also if you see our ROC ratios right, they are significant. So API we have always have good investments which has given us quick returns. And the peptide investment is very strategic for us. Because I think you will be aware there are already large GLP1 products which are getting patent expiry this year and even globally, right? In multiple markets there will be patent expiries happening in next two to three years.
And what Shilpa is doing, we are doing already GLP1 lira glutide semaglutide. For lira glutide we have already covered completed API manufacturing. We have recently filed USDMF also and formulation registration batches are ongoing. Our second product semaglutide where our API validation batches are ongoing and our formulation already both injectable and oral solid development is already completed and we are planning to take registration batches in first half of next financial year and same product will be filed globally. So overall we are seeing good opportunities on the GLP1 side and also there are significant CDM opportunities which many are expected to come on the peptide side because there are a lot of new biotech developments which are happening on the peptides also.
So that is the reason we are planning to build this new capacity and it is not a very significant capacity. Significant capex which is required for this. We are planning to invest close to 40 crores. Okay. For this peptide facility.
Sanjay Kumar
Over 40 crores with roughly the 4050 kgs of peptide.
Keshav Bhutada
See, it is more than that.
Sanjay Kumar
Okay.
Keshav Bhutada
It depends on product, like which product I’ll be taking. But it is a decent capacity.
Sanjay Kumar
Now let’s say if you have your full capacity for semaglutide, can we do 50 to 100 kgs of.
Keshav Bhutada
Yeah, we can do more than 100 kgs.
Sanjay Kumar
Okay, final question. So samples we’ve sent for non therapeutic albumin. Any feedback? Because when I saw the exports we have sent it to multiple companies, some in uk, some in US and for different applications also. So have you received any feedback? That’s one. And any competition coming in Nilotinib in Europe? Just these two questions. Thank you.
Keshav Bhutada
Yeah, an albumin therapeutic, right, which I previously mentioned also. Yes, we are feeding our samples in various markets and in some markets our initial samples were approved. Now they are taking further quantities because these all products will be going into their formulations and once their development is fixed they will be taking registration batches with our albumin then filing and approval. It’s a long esteeting business. But these are the. This is a business where already seeding is ongoing and I think same is visible what you have already seen. Okay. And on nilotinib, what was your question?
Sanjay Kumar
Is there any new competition that we are seeing in Europe? Has new players entered? What will be our market share going forward?
Keshav Bhutada
Yeah, see currently we are not seeing any significant competition. There is competition but as you know, right. We are partnered with the number one generic company of Europe. So we are currently having decent market share and at least for couple of quarters we don’t see any competition. Any big change in the numbers.
Sanjay Kumar
Got it, Got it. Okay, I’ll come back with you.
Sanjay Kumar
Thank you.
Keshav Bhutada
Yeah, thank you.
operator
Thank you. The next question is from the line of part Mehta from Valam Capital. Please go ahead.
Mehta
Yeah, hi Team, congratulations on the percent of numbers. Thank you for taking the question. I just had a question on the licensing income. If I see the line.
operator
Sorry to interrupt you Mr. Path, but can you please speak a bit louder? We are unable to hear you, sir.
Mehta
Yeah, yeah, hello.
Mehta
Am I audible now?
operator
Yes, please go ahead.
Mehta
Yeah, so I just wanted to ask on the licensing income, if I see on the nine months basis the licensing income revenue is down by over 40%. So what would be the reason and do we see for the full year licensing income coming back to the FY25 levels?
Unidentified Speaker
Yeah, see as we previously mentioned also, right. Licensing revenue is something which is. Which depends on product market when it is getting licensed, what are the milestones we will be realizing in that quarter and upcoming quarters? So there will be some variation in the licensing fees quarter on quarter or year? On year basis.
But if you see we have already mentioned previously also we will see a study run rate of close to 150 odd crores licensing income every year.
Mehta
Okay. So for the, for this year also it should cover up in the fourth quarter is what you are leading.
Keshav Bhutada
Yes.
Mehta
Okay, understood. And can you help me with what would be the current utilizations of our formulation plant
Keshav Bhutada
formulation plan? Current utilization. We have good capacity available for at least whatever requirement we have for the upcoming launches, right? We have a decent capacity available. Recently one of our oral solid line we have already commissioned and that is again additional oncology oral solid manufacturing capacity which will be available which will help us in again generating additional revenues in the next financial year.
Mehta
Understood. Great. Thank you. Thank you so much.
Keshav Bhutada
Yeah, thank you.
operator
Thank you. The next question is from the line of Kiran from Tabletree Capital. Please go ahead.
Kiran
Yeah, I just had a question on the financial side in terms of debt reduction, where are we on debt? How much are we trying to pay let’s say this year and projected next year given our cash flows are decent. Ma’. Am.
Keshav Bhutada
Yeah.
Keshav Bhutada
So I think on the debt front, you know broadly we are in a comfortable position with our debt equity in the region of about 0.25, 0.26. We obviously have been investing in our growth capex also. So we haven’t seen any reduction in absolute terms. But you know, looking at the size and if you look at our presentation also we mentioned that our debt to EBITDA ratio is constantly reducing. So overall, you know the kind of investments that we are making right now is you know, generating sufficient returns for us.
Kiran
How much is absolute debt, sir? Now, right now in as of 31st December.
Keshav Bhutada
So as of 31st December, our, you know, net debt was about 625 crores.
Kiran
Okay. And essentially the plan is to keep it at this level even through next year or pay a substantial amount because silver generally is known for being net debt free. That’s the reason I’m asking this.
Keshav Bhutada
Yeah, no, no. So I think, you know, what we are looking at is that we are not looking at increasing our borrowing. So you know, whatever we keep repaying of our term loan to that extent, it will keep coming down. But you know, there are times we have to take some more commercial and business related calls where you know, based on opportunities or requirements of the business, we might have to, you know, take some borrowing on our books. But as I mentioned that broadly, you know, we are keeping things under check where we do not exceed certain levels based on our performance.
Kiran
Okay, sure. Thanks so much.
Keshav Bhutada
Thank you.
operator
Thank you. The next question is from the line of Yogesh Raoff, an individual investor. Please go ahead.
Unidentified Participant
Thank you so much for taking my question and congratulations on very good set of numbers. So over the last two, three years I think the company is going through a capex phase where we’re investing a lot. But in terms of top line we are not seeing a lot of traction coming up. And this quarter especially stood out because very solid growth numbers. So do you guys actually forecast that this should actually continue forward or we should see. Or Was this a one off quarter where we saw 30% growth and the growth numbers came down from here? And if.
Yes, I think for 27 and FY27 and FY28, what are the major contributors for that?
Unidentified Participant
Thank you.
Keshav Bhutada
I think, thanks for your query. And I think as I already mentioned in previous calls also right. Previously we were running through more of an investment cycle and now what we are doing more is on burning our assets and getting maximum returns. Okay. So you will see in all the upcoming quarters as on date, whatever we have visibility, you will see ROC ratios getting improved. So it means my, whatever investments are done are converting into revenues.
Unidentified Speaker
Also, you know, as I had mentioned during my initial speech, Yogesh that you know, our base business is growing. So you know, if you, as we have been mentioning, licensing will always be a part of our business model. But minus of licensing. If you see our base business is growing across all the verticals and that is giving a lot of confidence that you know, we should be able to continue with the run rate.
Unidentified Participant
Last question, on a, on a mixed basis, what do you think would be the peak revenue from the capacity that we’re Doing obviously that that might or might not convert into actual revenue. But if you can give us a suggested broader range in terms of this is the peak revenue with the current capacity we can do, I think that would be super helpful.
Unidentified Speaker
No, I think as Keshav has been mentioning. Right. It is not. We may not be in a position to put up a number as to what would be the peak revenue. A lot depends on the product mix. Right. The way even capacity utilization can change based on the product mix and all. But we do plan out our, you know, capacities in a manner where we ensure, you know, highest level of production efficiency and bring in more productivity to continuously keep churning, you know, higher volumes of products which will end up generating revenues for us. So and even in the process, Even in the process.
Even in the process, you know, a lot of process efficiency that we build in in the same capacity, a lot.
Unidentified Speaker
Of times we are able to get.
Unidentified Speaker
More output from the same capacity. So that’s why I’m saying you may not be able to put a actual number saying that this would be the peak revenue that we can generate from the existing capacity.
Unidentified Participant
Got it. So I think a suggested number of in between 2013, 2020, we had an asset turn off average around 2. So would it be right to assume that this is the possible asset. Asset turn that we can have in the future or that that would be the wrong assumption?
Unidentified Speaker
Yeah, no, it changes because, you know, in 2013 a large part was API sales. Now we have got other assets also coming in which generate higher revenues and all. So it may not be, you know, right to say that two times will be the peak asset turnover and all.
Unidentified Participant
Thank you so much and all the best for the next. Thank you.
operator
Thank you. Ladies and gentlemen, this will be the last question for today which is from the line of Sanjay Kumar from I thought pms. Please go ahead.
Sanjay Kumar
Thanks for the follow up. First, on the ADC biosimilars, we’ve stated that it will enter human studies in FY27. I don’t know if you missed it. Is it for India specific or is it for the global? Now that US FDA has relaxed norms for biosimilars, are we looking at global trials?
Unidentified Speaker
Global. And also just to update you, Sanjay here, see majorly all our products right in biologic side from even next financial year you will see majority of the products. We will be taking it to global market.
Sanjay Kumar
So even Nivo and Pendro will go global.
Unidentified Speaker
Yes, you’re right.
Sanjay Kumar
Okay. And I’m already seeing a lot of companies assigning partnerships for these Products for various markets. So will you go direct or through partnerships? When will you. When will be signing partnerships?
Unidentified Speaker
So we expect some partnerships shortly in FY27, Sanjay.
Sanjay Kumar
Okay. Okay, got it. And I was also, I wanted to know the KPIs for you and mother and our ROC market care. Part of your KPIs?
Unidentified Speaker
Yes, it’s part of our KPIs.
Sanjay Kumar
Okay. Okay. And for any project, what will be the internal IRR that you guys usually target?
Unidentified Speaker
Yeah, I. I think some of these are, you know, fairly strategic, you know, for our organization to keep it internal. So we may not be able to provide those guidance.
Unidentified Speaker
Yeah.
Sanjay Kumar
Okay. Okay, final question. So was there any one off in Q3 formulation revenue? You did say that this is a base, but just trying to get your thoughts again. Was there any one off in the Q3 revenues?
Unidentified Speaker
No, we. We have such things that we have. Any one off.
Sanjay Kumar
Okay.
Unidentified Speaker
One of do get reported separately.
Sanjay Kumar
Oh, okay. Okay, perfect. Thank you, sir. That’s it from my side and thank you very much.
operator
Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Mr. Dalpesh Talal for closing comments.
Unidentified Speaker
Thank you everyone. Thanks a lot for your participation and we appreciate your you making time with us. If you have any follow on queries, feel free to reach out to our IR team and we’ll be happy to answer your questions. Thanks. Thank you.
operator
Thank you. Ladies and gentlemen, on behalf of Shilpa Medical Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines.