Strides Pharma Science Limited (NSE: STAR) Q3 2026 Earnings Call dated Jan. 30, 2026
Corporate Participants:
Abhishek Singhal — Investor Relations
Abhishek Singhal — Investor Relations
Badree Komandur — Managaing Director and group Chief Executive Officer
Mr. Vikesh Kumar — Group Chief Financial Officer
Analysts:
Unidentified Participant
Anand Mundra — Analyst
Krishna Mehta — Analyst
Rupesh Tatiya — Analyst
Nitin Agarwal — Analyst
Sarvesh Gupta — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Strike Pharma Science Limited Q3FY26 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. Abhishek. Thank you. And over to you sir.
Abhishek Singhal — Investor Relations
Thank you Palak. Very good evening and thank you for joining us today for Stride’s earnings call for the third quarter and nine months ended financial year 2026. Today we have with us Badri Managing Director and Group CEO Aditya Executive Director and Vikesh Kumar Group CFO to share the highlights of the business and financials for the quarter. I hope you’ve gone through our results release and the quarterly investor presentation that have been uploaded on our website as well as stock exchange website. The transcript for this call will be available in a week’s time on the company’s website.
Please note that today’s discussion may be forward looking in nature and must be viewed in relation to the risks pertaining to our business. After the end of this call, in case you have any further questions, please feel free to reach out to the investor relations team. I now hand over the call to Mr. Badri for his opening comments.
Badree Komandur — Managaing Director and group Chief Executive Officer
Thank you Abhishek. Good morning, good afternoon and good evening everyone and thank you for joining us for Stride’s Q3 FY26 earnings call. Like the previous quarters, I’ll talk about the growth and the growth levers of each of those businesses we run. And I’ll hand it over to Vikesh to cover all the financial highlights including the balance sheet metrics, cash flows and other metrics which are relevant for overall hygiene of the business. So talking in retrospect, there are three strategic priorities which we took in the last six to seven quarters. The three key priorities were profitability, geographical diversification and balance sheet strength are the key themes on which we led this business.
Let me go one by one and talk to you on what we have done so far and then I’ll talk through each and every business from a profitability perspective. The major focus has been to rebuild and structurally enhance profitability. We are very, very happy with the result. Gross margins have touched 60% plus in this quarter. Overall gross margins have reached about 59.8% and overall, if you really see from a profitability standpoint, post the one Source the company has really bounced back on all metrics relating to the gross margins, EBITDA PAT and as well as the EPS.
EPS is very strong for us. It’s currently at about 41.4 and expected to do well in the near term as far as the geographical diversification is concerned. While the US be had given a long term outlook. The EX US markets is an important highlight of this quarter. We have been reiterating in the last call that ex U.S. markets, which consist of two important elements, the other regulated markets and the growth markets. Our endeavor was to mirror those markets in the long term in two years from now. And we find that this is happening much faster than what we thought.
And in the current quarter the ex US markets contributed 47% of the Q3FY26 revenues and 20% year on year growth in Q3 and the gap between the US and the ex US market has reduced significantly. And if you really see on a quarterly basis the gap is about 500 million rupees. So this marks a structural shift in the geographical engine. And we are very happy that we are starting to see the results in terms of the global diversification of the entire business. The third priority was to improve the balance sheet strength. As we speak, our debt EBITDA is about 1.59.
We are on track to get to the targeted ratios. And the overall debt, if you really see it, has reduced by about 170 crores, 1,696 million on a constant currency basis. And return on capital employed improved to 15.8% aided by consistent results, improved profit show as well as the better balance sheet management, cash to cash cycles. So if you see the last, the three priorities in terms of profitability, geographical expansion as well as the balance sheet strength, we are very, very pleased with the results. We will continue to focus on those as we build the company in the long run.
So coming to the US performance, let me cover the important aspects of the US business as well as the overall business. So let me start with the overall business. The quarter this quarter which went by had a 3.6% revenue growth. This mainly because of the institutional business where the growth was muted. But for that the revenue growth has been upwards of 8.6% and almost 9% year on year. So this shows that other ex US markets have contributed significantly to the overall growth of stripes. And what excites us more is the growth of ex US markets because we believe that there are multiple geographies which are in different stages of evolution.
And if you have seen the Last few transcripts we have been reiterating that this has been in a range of about 40 to 43 million dollars in the last six quarters. Now it has broken the trend and has gone upwards of 48 to 50 million dollars. In the current quarter the gross margin crossed about 60% aided by the better profit mix, better business mix because of the institutional business being scaled down. And we believe that it’s a very good result from a Q3 business. And as far as the EBITDA is concerned, the increase is about 12% plus year on year operation PAT grew by 38%.
So I want to sum by saying that 3.6% increase in revenue resulted in 8 plus percentage increase in gross margins plus the 12% increase in EBITDA and almost 38% increase in PAC. The multiplier effect is very very visible in the financials and we believe that if we maintain the same trend, we will be able to surpass the goals what we have kept for ourselves. As far as the US market is concerned, the US revenue of 70 million largely flat compared to the same quarter previous year. The core portfolio continues to remain strong, but there are few developments which we want to keep you informed.
The seasonal sales on account of the flu unlike the last year did not pick up in Q3. Usually the Q3 and Q4 the seasonal sales will be very good. We saw some new players come in a couple of key products which also had a strong market, which has also which we had a strong market share and a good run for the last few years. We believe that the pancreas. We believe that the overall business is very intact. We also discontinued eight products that did not meet our profitability threshold for last nine months for the threshold for nine months and this shows our discipline towards profitability and also other key metrics with respect to the service levels and the overall hygiene.
Also we had a slower than expected quota allocations which also contributed to the overall muted growth of US business. As we continue to build on this controlled substances business, we are creating a steady and strong track record that will help us to gain momentum over the next few quarters. Despite this, our medium term outlook for US business remains unchanged. We continue to focus on our revenue aspirations for FY28 supported by relaunch of several products from our dormant portfolio. Also, as we consolidate and strengthen the core, we are also accelerating investments which we call a Beyond 400 billion target which represents our next stage of growth.
The investment includes IP purchases, partnered R and D programs and targeted investment into complex such as controlled substances, nasal sprays and 505 programs. And all these represent differentiated high value opportunities and are essential for evolving beyond pure generics and also a need a different skill set and expertise. In this connection we are also excited to have Peter Hardwick joining us as the CEO of North American business. Peter brings in about 30 years of global pharmaceutical experience including leading Apotex Corporation, one of the fastest growing generic companies in US he was also serving as the Chief Commercial Officer for the global generics of Apotex.
He has extensive experience in commercial turnarounds, portfolio shaping, pricing discipline and building high performance teams. His skill sets will complement our long term strategy at Strides. Peter will focus on driving sustainable growth, strengthening execution excellence and building a resilient customer focused organization across the North American region which is one of the most strategic important market. When I say North America, it includes US and Canada. And as you know that we are also concentrating on Canadian market and we have identified that as one of the key growth markets beyond FY28. As far as the ex US market is concerned, we are combining the we are calling the CEOs market as the other regulated markets as well as the growth markets.
And in this quarter we delivered a $64 million of revenue representing almost 20% year on year growth. And if you really see the gap between the US market and the other ax US market, it’s about 500 million per quarter. And we believe that this will be the trend going forward. And in the next two years time we should be able to erode those markets completely. And as far as the ORM is concerned, the other regulated markets, which is a subsection of the ex US markets, they grew very handsomely. They broke the trend of 40 to 43 million.
We recorded almost about $48 million year on year, 21% growth. And what makes this ORM a very important market is it has got a very high quality revenue, high entry barrier, predictable pricing and the strong B2B partnerships which will drive this market. And overall if you really see the gross margins are also very stable in this other regulated markets and it creates enough stickiness and sustainability going forward. And our growth markets revenue has been about 16.6 million delivering almost about 19% year on year growth. We are seeing green shoots and early momentum in few markets supported by a rising cadence of regulatory filings.
The regulatory filings and execution will be the focus to grow this market. To reiterate, the ex US markets continues to be important management focus in addition to the US market. And we believe that we have got enough levers in place to take this business going forward. And in addition to Peter, we also have a management change. We have appointed Nandini Maithiani as the Executive VP of hr. She brings over two decades of experience in driving people strategy, leadership development and cultural transformation and workforce capability building across global enterprise. At Stripe, she will lead the global people agenda across operations around the world, reinforcing culture and strengthening capabilities and supporting the company’s mission of making high quality accessible healthcare in reality worldwide.
And as you know the people capabilities very important as we grow the company in the long run and Nandini’s addition will be a great value add. Two strides I’m also pleased to inform the ESG Score we improved the ESG score from 75 to almost 85 point increase over the last year. This reflects our continued focus on responsible growth, compliance and strong governance practice. So overall it’s a great quarter for us and as we speak we continue to focus on execution and we have a lot of work to do and we’ll be as busy as ever.
And with this I’ll hand it over to Vikesh to cover some key highlights on finance.
Mr. Vikesh Kumar — Group Chief Financial Officer
Thank you Badri. Very good morning, good afternoon and good evening to all of you. As Badi mentioned in his opening remarks, we’ve had a very strong strategic focus on profitability and balance sheet strength over the last few quarters and we are very delighted to report that we continue to progress quarter on quarter on these metrics. The growth in our ex US business and our profitability orientation has helped us to continue improving our gross margin and EBITDA numbers year on year. We’ve added 58 crores of gross margins which has translated into a very healthy EBITDA and an equally strong PAT performance for the quarter.
Our EBITDA grew 12% year on year to 236 crores which is also our highest ever quarterly EBITDA. Our EBITDA margins are at 19.8% for the quarter which is an expansion of 160 basis points year on year. For the nine month period our EBITDA is at 686 crores which is a healthy growth of 17% with an EBITDA margin of 19.4%. We’ve improved our EBITDA margins by 180 basis points from FY25. We had ended FY25 at 17.6% which reinforces our focus on driving profitability and sustainability across both our US and ex US markets. Our balance sheet strength is also reflected in our EBITDA to PAT conversion.
It is now at 54%. We are reporting an operational PAT of 128 crores with an operational PAT margin of 10.7%. It’s a 39% growth year on year. With this growth our operational eps is at 13.9 rupees per share for the quarter. For the nine month period our operational pat has grown even more healthily. IT has grown 65% to 382 crores with an operational EPS of 41.5 rupees per share. It’s very pleasing to report that we have already exceeded our full year FY25 operational PAT of 345 crores. So last year we reported an operational PAT of 345 crores and we have exceeded that in the first nine months of this year and we’ve got a quarter to go.
During this quarter we also executed the sale of an investment property which resulted in an 83 crore gain for the quarter. Consequently our reported pat for the quarter is at 208 crores. It’s the first time we are crossing the 200 crore mark and our reported EPS for the quarter is at 21.9. Our reported PAT for the 9 month period is at 445 crores which is a 39% growth. Growth year on year with a reported EPS of 46.6 rupees. Our cash to cash cycle is stable at 124 days and as bade mentioned earlier we’ve improved our ROCE to 15.8%.
This is on a trailing twelve month basis. We’ve seen an increase in the cash to cash cycle on a Q on Q basis. This is largely due to the business mix and reflects the significant growth we’ve had in our ex US business which traditionally has a longer working capital cycle as compared to institutional business which is extremely lean on working capital though it is a low margin business. So that led to a slight increase in our inventory and receivable days. So after funding for this increase in working capital we’ve delivered an operational cash of 484 crores for the nine month period which is approximately 70% EBITDA to operating cash.
Our net debt has got impacted on account of our restatement to the borrowings due to the current exchange rates, the depreciation in the exchange rates on a constant currency basis we have reduced our net debt by 169 crores in this nine months. We’ve also invested 284 crores in capex in both tangible and intangible assets. In addition to the maintenance capex we have also Made investments for growth and we’ve acquired certain targeted global product rights which will drive our growth in the near future in both the US and the ex US markets. Taking into account the negative impact of currency on our net debt which was of about 83 crores.
Our net debt stands at 1436 crores. And despite this impact, we have improved our trailing twelve months EBITDA to net debt ratio to 1.59x. We had ended at 1.9x in FY25. Overall operating expenses for the quarter are at 41.5% of sales. In absolute terms there is a slight increase in cost. But that is largely on account of exchange rates. The cost structure has remained well within range and it continues to support our margin expansion. As you are all aware, there was a new labor code that got implemented during this quarter. And we have evaluated the impact of this code on our financials.
And we are very pleased to report that we’ve not had a financial impact on our financial statements on account of the new labor code. We’ve historically followed a very simplified compensation structure and that philosophy. We are now seeing it aligning to the requisites of the new labor code. Our net finance costs for the quarter are in line at 39.7 crores. And for the nine month period the net finance cost is at 101 crores. Effective tax rate for the quarter is at 15%. And we expect it to be in the range of 15 to 18% for the year overall.
It’s been yet another exceptional quarter with a very comprehensive operational performance, structurally resilient business and with improving profitability. And we continue to focus on balance sheet discipline. Our focus remains on building sustainable growth. Thank you. And we are happy to take any questions that you have.
Mr. Vikesh Kumar — Group Chief Financial Officer
Parag, can we open the Q and A please?
Questions and Answers:
operator
Yes, sir. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may please press Star and one on their touchstone 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 Anand from Saw Wealth. Please go ahead.
Anand Mundra
Hello. Good evening, sir.
Badree Komandur
Yeah, good evening.
Anand Mundra
Yeah. Sir, what is the contribution of the eight products that are discontinued?
Badree Komandur
Yes, it will be. From an overall perspective, it’s not very a material number from a yearly standpoint. But it will be. It’s not a very material number.
Anand Mundra
So given this backdrop, just wanted to check what is the reason for lower de growth in US business on quarter. On quarter basis or year? On year basis,
Badree Komandur
yes.
Badree Komandur
So as far as the US is concerned, we have said very clearly that profitability remains our focus. We don’t want to compromise gross margins. And if you really see the entire pipeline, we have got 60 plus products which we said we will launch over a period of last three years and few products have already been launched and we are on course to get there in 28 and we are working on a number of things and we invested ahead and we believe the growth will start reflecting in the coming quarters. And this quarter was mainly because of the flu season.
From a flu season perspective, it came in the maybe the last few days of December. We’ll have to watch out. Usually it will be a good Q3 and good Q4. It was delayed this time. And that’s the reason you’re seeing the muted growth plus the discontinuation of the six products. We believe that, you know, even after this we’ll be able to, we’ll be able to have a market leading positions in 37 out of 68 products. And overall, if you really see from our standpoint, while the growth can be muted at this point of time, but the overall strategy is intact from a long term perspective.
Anand Mundra
Sir, another question, what is the sustainable gross margin? And increasing gross margin is due to rupee depreciation also. So any thoughts on that?
Badree Komandur
See as far as the gross margin is concerned, while this quarter has been 61% with respect to the because of the business mix and also the institutional business being lower than the overall revenue, we believe that it can be between a 58 to 60% range. Don’t hold us on for each and every quarter. Our endeavor is to reach the higher, higher end of the range always.
Anand Mundra
Okay, understood sir. With respect to debt, what is our debt in dollar terms and the increase in the debt due to rupee depreciation, will it not be rooted to PNL. In the March quarter?
Mr. Vikesh Kumar
So I will take that, yeah, I will, I will take that question. So as far as the debt restatements are concerned, they are already reflected in the, in the P and L. Some of the long term loans, they don’t get routed through the P and L and and they are directly restated on the balance sheet. So as far as the P and L is concerned, it is a fair reflection of the position where we are today and factors in for the currency rates in the, on the debt as we stand as of 31st of December.
Anand Mundra
So what is this amount, sir. And on which line item is it is added?
Mr. Vikesh Kumar
It is. So the loans are restated on every single line item. And the debt number that we are Talking about at 14:36 Cross is restated line by line at the current currency rates. Because we’ve loans across different currencies and those get restated. And that is what is reflected in this net debt number. What we are seeing is because the currency depreciated much faster than the average rate for the year. There is an impact on a. There is an impact that has happened to the debt. And therefore on a constant currency basis there is a debt reduction that you see.
Anand Mundra
Understood, sir. So my question is if there’s a it, if it is charged with the pnl whether net finance cost has gone up because of that or where it is getting impacted in the PNL is my question, sir.
Mr. Vikesh Kumar
So anything that is relating to working capital is already part of the ebitda. Okay. And anything that is pertaining to long term loans does not flow through the P and L because those loans are in overseas entities and you know, it goes directly to CTA.
Anand Mundra
Okay. So out of 83 crore of currency impact, what is the impact which has been reported in the pnl? Sir, so I’m not able to understand it properly. Sir. That’s the reason I retreating asking it again.
Mr. Vikesh Kumar
See, it is. It is going to be difficult to segregate between what is the impact to the P and L versus what is to the. You know, versus what is what is not in the P and L. But you know what I can. What I can tell you is that the entire impact, the way it has to be in the P and L is fully reflected in the P and L at the current, you know, at the current exchange rates. So while like you said there is a. There is a benefit of rupee depreciation, there is also the impact of the, of the loan book.
And on a net basis we are still on a. On a positive hedge. On a positive hedge. But because we’ve been following this philosophy of natural hedging it has played out well for us.
Anand Mundra
And sir, what is the debt number in dollar terms or. It consists of many currencies. So difficult to.
Badree Komandur
Yeah. I mean in. It’s roughly about $160 million.
Anand Mundra
Okay. And how much is long term out of that? Because that will not be getting rooted through pnl. What would be that number? Sir.
Badree Komandur
We have it in the. We have it in the presentation.
Anand Mundra
Okay. Or 605 crores. Understood, sir. Lane, this is 659 crores. Okay, thank you sir. Thanks a lot.
operator
Thank you sir. The next question is from the line of Soumya, an individual investor Please go ahead. Hi.
Unidentified Participant
Thank you for the opportunity. I have two questions so first one is that over the last few quarters our overall revenue has been in the range of 135 million to $140 million. So where do you expect the next leg of growth to come from?
Badree Komandur
See as far as the overall revenue is concerned we are given a very two year long two year horizon view. Our endeavor has been used to reach about 400 million in US and we also said that ex us we want to mirror the US markets in the two years time so if you really work out on a quarter on quarter basis it will be a fairly consistent growth which is what we expect and we are not looking at each and every quarter as it is but you have to look at us from a two year time frame from that perspective and the growth will be led by many labors which are all part of this.
As far as the US is concerned we have got number of dormant products the control substances should pan out quite well for us in the near term we are also investing on long term growth as far as the other regulated markets as well as the growth markets are concerned all the pivots are in place to deliver a consistent growth.
Unidentified Participant
Got it. So next question was that could you please explain the reason for the increase in cash to cash cycle and do we expect it to increase further as we focus on ex US market?
Badree Komandur
As far as the cash to cash cycle is concerned that we have said that while it follows the range we expect it to be in the range of 120 to 125 days depending upon depending upon how the market conditions are and if you really see from an institutional perspective institutional markets have got one of the lowest cash to cash cycles today that market is very lower compared to the overall mix and that’s the reason you see an increase in the cash to cash cycles and plus because of the holidays and a few other factors the cash to cash cycles slightly one or two days high but I think overall it will be within that 120 to 125 range.
Unidentified Participant
Got it. Thank you sir.
operator
Thank you ma’. Am. The next question is from the line of Krisha, an individual investor. Please go ahead.
Krishna Mehta
Hi sir, I have a couple of questions so firstly regarding US business US revenue has been range bound around the low $70 million mark for the last three quarters after achieving $77 million in Q4 FY25 what have been the developments in the US business that could explain this. Secondly.
Badree Komandur
Yeah, let me complete this question for you. As far as the US business is concerned, I clearly articulated that which used to play traditionally did not play through this year. Usually we get a very good Q3 and Q4. We saw this playing out in last two, three days and again it is back to normal. That’s also because of the buying pattern of all the buyers. Most of the people are ready for with the adequate stocks in their warehouse. So from that perspective, the season seasonal thing which used to play out in Q3 and Q4 did not play out the way it used to be in the past.
As far as the second thing is, we also had the. In terms of the controlled substances, in terms of the quota approvals, you need a past track record to, you know, to get more quota. There has been a slight delay there and but overall we believe that, you know, the growth trajectory is intact and you should look at it, look at the entire US business from a long term perspective.
Krishna Mehta
Okay. Secondly, despite the recent 70 million quarterly run rate you have, you have already mentioned that you are reiterating the 400 million guideline by in US by FY28. Could you outline the key growth drivers for the same.
Badree Komandur
Yeah, as I said that it’s there in the presentation itself. But I’ll. For your purpose, I’ll reiterate for you. There are a number of dormant products which will contribute to that growth. Plus the. I also talked about the control substances coming to a normalcy in the next few quarters from now. Plus we also have, you know, we also invested in R and D programs which will start delivering revenue in the next quarter 12 to 18 months.
Krishna Mehta
Okay. And lastly, we discontinued more products than we launched in nine months. Can you share some color on the product pipeline that helps us drive growth in the future?
Badree Komandur
See, as far as our focus has been that, you know, we are focused on the profitability. Anything which is not meeting our threshold, we just discontinue it. And we have got a strong portfolio, we have got number of dormant products and we have identified a number of products which will drive the revenue in the long run. And there is no theory specific therapeutic focus. It is, it is more into generic space.
Krishna Mehta
Okay. All right. Thank you sir.
Badree Komandur
Thank you.
operator
Thank you, ma’. Am. The next question is from the line of Rupesh from Long Equity Partners. Please go ahead.
Rupesh Tatiya
Hi. Hi. Badri. Congratulations on good set of numbers and gross margin improvement. First question, Patri on Orm. There is a comment on the presentation slide number 10 that it is driven by B2B partnership in Australia. So some color around how Europe is doing. You seem very confident about ORM growth. So finally, you know European approvals are. Do you have visibility now? Can we see Europe growing every quarter for next, you know, four or five quarters now desired run rate?
Badree Komandur
Yes. As far as the Rupesh, I just want to confirm to you that our long term objective has been to mirror the U.S. markets. Right. And Europe is a very high entry barrier market and we have been investing in it for our last many years and we are starting, we have onboarded many partners and the lead time to onboard a partner is also quite high in that business. Plus once you onboard the stickiness is going to be there in that market for a long time to come. It’s very difficult for the partner to switch from us to somebody else.
And if you really see the last six quarter, seven quarter trajectory, this has been in the range between 40 to 43 million dollars. And this is the first quarter we have crossed that 48 million, almost 48 million at this point of time. And if you really see the growth is going to be seen across, across the markets in the ORM and we believe that we have got enough pivots in place to grow in the long run.
Rupesh Tatiya
That’s good to know Badri. I mean I think a lot has been asked on us Badri but two questions there. Control substances, when do we see, when do you expect to get our allocations? Whatever you are expecting. And the second question now is to get to 400 million in FY28 we pretty much need 100 million a quarter. We are at 70 million and there are five, five quarters from now till there. So I don’t know. I mean control substances is less than $5 million.
Badree Komandur
I think just to get you this control substances we said that we have been right reiterating in the last 2, 3/4. Also it depends on the quota. I think it will get sorted out because we need first full one full year of operation to demonstrate our ability to manufacture and you know the, and also get more quota. I think that one cycle will get, has to be finished. We have, we are going to finish that cycle in next to three months. One full year of controlled substances. I think the next year should be fairly better as far as the, the 400 million is concerned.
We talked about FY28. There are nine quarters which are left and as I said that we also invested in some R and D programs also have global rights for certain IPs which is going to lead us to get to that revenue beyond 12 to 18 months.
Rupesh Tatiya
Yeah. So FY28 starts five quarters from now, Right. At least. I mean you need to start at 95 and maybe end at 115. I don’t know how the phasing is.
Badree Komandur
All I want to say is that we are working towards it. Just because you had one or two quarters of slightly muted doesn’t mean that the future growth engines are not intact. Right. So we are working towards it. And if you really see the company is working on number of, number of things to get to that and our endeavor is to reach that in the long run.
Rupesh Tatiya
So how many product launches maybe you have visibility in over let’s say next five quarters. $10 million plus. Maybe $10 million plus significant product launches.
Badree Komandur
We don’t want to comment on any specific product to product because we never commented in the past. And the market dynamics are changing every day. Right. Suddenly when product goes into some disruption, it can be suddenly a 3 million product can become a 10 million product and 10 million product can become a 3 million product also. Right. So from our perspective, the way I look at it is that we have a lot of A and A to be launched and we will have a structured launch. We are not going to compromise profitability. We will be able to get there.
And what is more important for you is the diversification. Don’t focus on any specific geography. Exitus is something 20% growth is something nobody saw it till now. So from that perspective, I think overall in a two years time frame we should have much better economics across the board.
Rupesh Tatiya
Okay. And final question. Sorry to interrupt you sir. Maybe request quick clarification. This is so just. Just because this 83 crore currency impact, this is just an accounting entry, right? Because we earn in whatever US dollar euro and the debt is in US dollar Euro. So this is just an accounting entry or a restatement. Any, any difference?
Badree Komandur
Yeah. Yeah. This is a restatement. It’s a restatement.
Rupesh Tatiya
Yeah. Yeah. Okay. Okay. Yeah. Thank you.
operator
Thank you. Thank you. Sir, the next question is from the line of Nirma Mehta from Unique pms. Please go ahead.
Unidentified Participant
Yes, I thank you for the opportunity coming again to the US market. So you mentioned some competition in the newer launches. So do you see some heightened competition or is it usual and are you concerned and is it across the portfolio also or is it only for the new launches?
Badree Komandur
As far as the competition is concerned, you and me cannot, you know, predict anything. Honestly, if you ask me, the competition will always be there. We have to respond to the competition at all points of time, right. There can never be a situation, there will be no competition. It is not specific to launchers, specific to anything like it is across the board. And if you really see the last six quarters, eight quarters, we have grown quite well in the last two years. We have grown extremely well. Just because you have got 1/4 of 70 million and all of these things doesn’t mean that we do not have the focus from a long term perspective.
I think the competition is there and we are seeing competition. It is not across the board. It can be in select molecules and we are working towards how to, you know, how to launch many products as we go along. And us portfolio has to be always be balanced by the launches as well as which will cover up for all the erosions and the competition. And you have to look at this from next two to three years perspective.
Unidentified Participant
Understood sir.
Unidentified Participant
And sir, on the other regulated markets as you mentioned, we’ve seen a good growth, we’ve seen that range, you know, coming out of that range. So you know what have we done right and what is going well for us in those markets?
Badree Komandur
See what we have done right is the, our investment in the last two years. If you really see the market is we have, we have spent a lot of time building those markets. We have made it extremely sticky and our regulatory strategy has played out. Portfolio maximization is playing out there in those markets. We have onboarded very good partners and conversion of the partners to the actual revenue has taken quite a bit of time and now we are in that revenue stage. So hopefully from now on things should pick up.
Unidentified Participant
Sure sir. Thank you. All the best. Thank you.
Badree Komandur
Thank you.
operator
Thank you sir. The next question is from the line of Nitin Agarwal from Dam Capital. Please go ahead.
Nitin Agarwal
Thank you. Congratulations team for a pretty another solid set of numbers. Badri on the ORM market, the non ORM plus growth markets, the targets that we talked about, I mean us we’re talking about a 400 million dollar number by F28. When does this segment start to hit around that number in your assessment.
Badree Komandur
From our perspective. See the mirroring has already started. Nitin, from a 28 perspective my view is that it will be closer to that. I don’t know the exact quarter or anything at this point of time. We have to keep working as we go along for the next 2 to 3 quarters. Maybe much clarity will come by the end of FY27. And please watch us very patiently till about next 3 to 4 quarters. Our intention is to get a very diversified company and if you see the gap between the non us and the ex us and the us it’s come down to almost about 50 crore the difference in the revenue for the quarter.
So next maybe about next to five quarters we will get a solid clarity and in next nine months we should be able to do that is my belief at this point of time. And of course each market is have got a, has reached a reasonable size. Of course the pressure will be there. Also in terms of once it reaches a good size the pressure on growth is always be there. I think it will take about two years I think.
Nitin Agarwal
And secondly in these markets are we entering looking to enter any new markets or largely it’s going to be about growth in the current sort of, I mean expansion of the portfolio in the current geographies where you’re present in.
Badree Komandur
Yes, it is more about the expansion of the portfolio. We are not, we are not entering any new markets. There are definitely a lot of new partners, new customers there. What I can say is broadly the regulatory pathway is very clear. The products are clear, path is clear. So that’s what gives us the confidence to grow in the near future.
Nitin Agarwal
And lastly Vikesh also we’ve had a pretty decent performance on that I overheads over the last few quarters which has given us a lot of operating leverage. I mean does the business still have opportunity left for sweating out more on the, on the costs, on the overheads?
Mr. Vikesh Kumar
Yeah, I think, I mean we’ve been, it has been in this range and we expect it to continue continue in this range. We still have, have under recoveries in our facilities and as we reduce, keep reducing those under recoveries we’ll continue to see, see the operating leverage play out.
Nitin Agarwal
And Vikesh, what kind of tax rate should we look forward to for the next Couple of years?
Mr. Vikesh Kumar
15 to 18%. If you can squeeze.
Nitin Agarwal
One last one maybe a couple of years is 15 to 20%. You know when you take it to a couple of years I think a 15 to 20% range is a, is a fair number.
Nitin Agarwal
Okay. And on the CapEx, how should we think about capex for the business?
Mr. Vikesh Kumar
I mean like we said last quarter as well from a maintenance capex standpoint we are on track in the 100 to 125 crore kind of a range. The rest of the numbers are more kind of opportunistic and we saw opportunities there and these are global rights for both US and ex US markets and that is the reason we made some targeted purchases. But we would not put a number to it. Those we will look at opportunities and then see what works best for us.
Nitin Agarwal
Thank you so much. Best luck.
operator
Thank you sir. The next question is from the line of Sarvesh Gupta from Maximal Capital. Please go ahead.
Sarvesh Gupta
Good evening sir and thanks for giving the opportunity. So just one clarification which I needed was so if I look at your 9M FY25 to FY26, your gross margins in absolute amount has increased by around 200 odd crore. But EBITDA has increased by around 100 crores. So you know, we were under the impression that the OPEX is more or less not going to increase. So what has caused this 200 crore to reduce to 100 crore by the time it reaches EBITDA?
Badree Komandur
Yeah, yeah. See from a. When you look at it, quarter on quarter, the increase in OPEX is not significant. It is a, it is a marginalization increase that you see in OPEX plus the EX US Markets. We have our own front ends and there are certain costs to it. But at the end what we look at is from an EBITDA standpoint it has to be accretive and the gross margin. So if there is a superior gross margin and there are costs attached to it, but from an EBITDA overall EBITDA standpoint and from a PAD standard standpoint it is accretive, then we go for it.
So the idea is that EBITDA margin expansion is the focus and if that means that we need to take certain products with higher gross margin and therefore spend some higher costs across the line items, you see those variability. But at the end, from an EBITDA standpoint, we’ve been targeting our desired outcomes.
Sarvesh Gupta
Okay. And on the ORM side, so you know, we have seen like a good quarter this time. But do you think that the growth with respect to ORM is now going to be consistently being there? Are there drivers in place and execution in place now that we can see consistent growth from here on or is it going to be start, stop kind of a play if you can throw some more?
Badree Komandur
As far as the ORM EX U S markets is concerned, I clearly reiterated that we have got a regulatory pathway in place. We have got products, we have got strategies, we have got markets, we have got customers. Right? So from our perspective, build phase is already over as far as the EX US Market is concerned. And you know that this is a market which has been, which has been trailing for almost about between the range of 40 to 43 million for many quarters. Right? So from that perspective, I think we believe that, you know, we have got enough engines in place to grow this market.
And our long term vision is to mirror those markets. And you should not look at us on a quarter on quarter basis. You look at us over a period of 9/4. I think we should be close to.
Sarvesh Gupta
The US market and any advantages that you see because of this India EU FTA accruing to you in terms of either margins or in terms of higher revenue opportunities from here on.
Badree Komandur
Yeah. As far as the, this current thing, while it is early days, our initial view is that, you know, Gentrix will not get any benefit from this deal.
Sarvesh Gupta
Okay. Okay. Thank you and all the best.
Badree Komandur
Thank you.
operator
Thank you. Sir, the next question is from the line of Chirak Shah from White Pine Investment Management. Please go ahead.
Unidentified Participant
Yeah, thanks for the opportunity. One question. Can you just comment on the pricing trend for our finished product as well as raw material and any specific therapy that you would like to call out.
Badree Komandur
See we don’t want to give any product wise, you know, details but overall if you really see the price erosions are part of the generics business. So what, some prices will go up, some prices will come down but overall it’s a portfolio. I think the price erosions will always be compensated by the better box improvement and that’s what is getting reflected in the gross margins going forward.
Unidentified Participant
Also sir, I was referring also from industry perspective. So can we make a case that pricing pressure is behind and probably there could be some case of beneficial pricing scenario for some time.
Badree Komandur
We can’t, we can’t say all of this because it, it is, it is very difficult to comment on all of these things because it goes by the, the current trend that is prevailing. There’s nothing called that something is over because it, it all is a function of market and players. Right. So we can’t say this at this point of time but this is a part and parcel of the risk of the business. Right. So you run and on the raw.
Unidentified Participant
Material side, are there any different trends where we are seeing more pressure versus the finished product? So RM prices are going up and finished products are largely stable kind of scenario?
Badree Komandur
No, see the, every company plans its supply chain, you know, has to plan its supply chain. It has to create multiple sources. Right. To manage the cogs better. And this has been going on in this industry for years. So it’s a very time tested process.
operator
Thank you sir. The next question is from the line of Omkar, an individual investor. Please go ahead.
Unidentified Participant
Thanks for giving me opportunity to ask me questions. Congratulation to entire site team for delivering great set of number consistently and best Part is ORM Market has also started delivering fabulous numbers as management has put in more efforts in last two three years for ORM Market. I’m having two questions for Slide management. One. First question is Mississippi Pharmaceutical has recently received US FD approval for Ranitidine tablets. This approval marks re entry for acid reducing drug into US market after five years of absence. Whether Striped Swarna will be relaunching Granitide products in near future as Ranitide was the important and the highest revenue generating product of Stripes Pharma five years back which got discontinued from March 2020 due to potential endemic impurities.
Badree Komandur
Aditya here, as you know we did. Manufacture this product and there was a class action suit issued to several players who were selling the product at that time which caused the discontinuation. At this point the SMS Pharmaceuticals company is the only one with an approved Rantidine formulation.
Unidentified Participant
Are we getting any probability whether Striped will run through your future or. As of now there’s no probability. You know our history.
Badree Komandur
We don’t disclose any product specific details of any of our products current or pipeline and we maintain that stance.
Unidentified Participant
Point noted. And last question. Whether excess market revenue will improve in next one to two quarters. And what is the current order book for on donor funding for excess market?
Badree Komandur
Yeah, so a good question. This has been subdued for a period of time now. Several organizations have reduced their funding to. Several countries have reduced their funding to large donor institutions like the Global Fund which has caused a significant reduction in the amount of orders from these institutions to not only us but all the other manufacturers. The period for the allocation is rolling over because they haven’t fulfilled their obligations as well. However, certain countries are adding more to their contribution do a fill up for the gaps caused by countries like the U.S. but that gap is very very big to fill.
So while the current outlook looks muted, perhaps in the near future that should ameliorate a little bit.
Unidentified Participant
Great sir, thanks for taking my question and all the best to Slide management.
Badree Komandur
Thank you. Thank you.
operator
Thank you sir. The next question is from the line of Mehul from 40 cents. Please go ahead.
Unidentified Participant
Hello sir. Thank you so much for the opportunity. Sir, as you mentioned during one of the answers in reply to one of the questions that there was a season. Delay because of the flu season in US. So can we expect a better Q4 this time? That’s my first question.
Badree Komandur
Yes, as far as we are concerned, don’t go by the quarter on quarter. Our endeavor is to grow and nobody can predict any season at this point of time. If life Definitely like last year. If it plays out, we will grow. That’s the way it is.
Unidentified Participant
Right. Sir, another question is you mentioned again one of the responses that it is difficult to penetrate into the European Union market. Europe market. So what is the difference?
Unidentified Participant
I mean I am very ignorant. So I would like to know from you. It will help me. Thank you.
Badree Komandur
Again. So the easy misconception is to think of Europe as just one market. However, as you know, it’s filled with 28 countries. A lot of our times partners require approvals across various countries to make sure that they can launch with a meaningful launch order, MOQs and all of those things. So while you get one centralized approval, decentralized approval, you get country specific approvals as well. So timing and those countries have their own timelines. So it’s usually a function of getting the optimized timeline and then having the right critical mass to launch.
Unidentified Participant
And what can be the negative, most negative development which can happen with the Trump administration because you know it’s a very volatile environment right now with the US administration.
Badree Komandur
So what can be the worst which. We can expect in terms of pharma. Generic pharma in US no specific. These are all very difficult to comment. Okay. So all I can say is this volatility is can be taken as both negative as well as positive.
Unidentified Participant
Sir, can you please highlight how it can be taken as positive.
Badree Komandur
As far as the we are concerned, the third of the revenue comes from our own in US and for US strategy. And I think we should closely watch the developments at this point of time. The entire impact is not on generics. I only hope that things stay as it is and we go from here.
Unidentified Participant
Thank you so much sir and wish you very best.
Badree Komandur
Thank you.
operator
Thank you sir. The next question is from the line of Sameer from Sacman Capital. Please go ahead.
Unidentified Participant
Hi. Thank you. Good evening everyone. If you can talk a bit about your nasal spray portfolio, the one that has been filed and those which are under development.
Badree Komandur
Yeah. As far as the nasal is concerned, one is already filed. So it’s going undergoing a review with us fda. There are two more products which you are looking at in the next wave of filing. It is expected to get filed in next two quarters, maybe by May, June. That’s the time frame. We have completed all the intermittent milestones on time. In addition, we are also partnering on few other programs. We have also identified few other programs which you are working with partners. And I think by the in the next two quarters we should have filed for three.
Unidentified Participant
And when is the first approval going to come?
Badree Komandur
It depends on the US Review. I think it should, should start. The revenue should start kicking in from 27, 28, I think.
Unidentified Participant
Okay, so another year or two to go.
Badree Komandur
Yeah. Yeah. Yes.
Unidentified Participant
And how substantive can these NISA space be?
Badree Komandur
It’s a very attractive space, but the market dynamics keeps changing all the time. So we have to figure out the go to market and it varies between product to product and the channels closer to the approval timeline. Once we cross all the technical milestones, I think we’ll have to figure out how it pans out. At this point of time, we don’t have any specific number in hand.
Unidentified Participant
Okay, great. Thank you so much.
operator
Thank you, sir. Ladies and gentlemen, in the interest of time. That was the last question for today. I would now like to hand the conference over to management for closing comments.
Badree Komandur
Thank you, everyone and I wish you a very happy weekend. Thank you.
operator
Thank you, sir. On behalf of Strides Pharma Science Limited, that concludes this conference call. Thank you for joining us. And you may now disconnect your lines.