Strides Pharma Science Limited (NSE: STAR) Q4 2025 Earnings Call dated May. 22, 2025
Corporate Participants:
Abhishek Singhal — Investor Relations
Arun Kumar — Non-Executive Chairperson
Badree Komandur — Managing Director & Group Chief Executive Officer
Vikesh Kumar — Group Chief Financial Officer Group & Chief Investor Relations
Analysts:
Aniket Nikumb — Analyst
Anand Mundra — Analyst
Nitin Agarwal — Analyst
Jagdish Sharma — Analyst
Rupesh Tatiya — Analyst
Sarvesh Gupta — Analyst
Unidentified Participant
Aryan Jain — Analyst
Deepak Poddar — Analyst
Chirag Shah — Analyst
Karthik — Analyst
Anupam Jain — Analyst
Presentation:
Operator
Good day and ladies and gentlemen, good day, and welcome to the Q4 and FY ’25 Earnings Conference Call of Strites Pharma Science 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 store then zero on your touchstone phone. Please note that this conference is being recorded.I now hand the conference over to Mr Abhishek Singhal. Thank you, and over to you, sir.
Abhishek Singhal — Investor Relations
Thank you, Puja. A very good afternoon, and thank you for joining us today for Stride’s earnings call for the 4th-quarter and full-year ended financial year 2025. Today, we have with us Arun, Founder and Non-Executive Chairperson;, Managing Director and Group CEO; and Viquesh 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 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 Arun to make his opening comments.
Arun Kumar — Non-Executive Chairperson
Thank you, Abhishek. Good evening to everybody who has joined this call. We really appreciate your time. We are fully conscious that today is a busy day for many companies in our sector announcing. So we appreciate that you could find some time to participate in our earnings call.
FY ’25 has been a great year. We started the reset approximately three years or three years before and I think we have delivered on all what we promised internally and externally. We had a phenomenal year in terms of performance, a true classic story of opex leverage, a significant growth in our EBITDA and highest-ever PAT that this company has reported on an operating basis. A very solid Q4. All outlook metrics have been met, and many of you know that doesn’t never used to guide, but I think we had to guide given the turbulence that we had a couple of years ago. But now having demonstrated a very solid base.
The company will continue to focus on opex leverage, higher EBITDA growth and absolute gross margin growth. While revenue — we have all the pivots for revenue, all of you are familiar with our measured growth. We have been consistently delivering in a particular range every two, 3/4 and then we build-up from there. But having said that, little over 12 quarters, we’ve had Q-on-Q growth on our EBITDAs, which is our internal metric for OpEx leverage and we continue to build-on that model going-forward. I’m more than happy to take questions after the introductions, both Batri and Vikesh will take-over from me now and we can then address your questions.
Over to you, Badri.
Badree Komandur — Managing Director & Group Chief Executive Officer
Thank you. Good evening, everyone. And I would like in the next few minutes, I’ll try to take the — I’ll give you a complete flavor of the results. It has been a fantastic year for us FY ’25. The profitability, efficiency and growth has been the pillars on which the entire company has grown. And there are four metrics which we kept for us, which we — which we chased during the year. And one was in terms of revenue to grow between 12% to 15%, we grew 17.2%. And we said that EBITDA should be between a range of INR7.5 billion to INR8 billion in terms of growth, it’s around INR50 crores to INR800 crores. We closed the year at INR802.8 crores or beating the higher-end of the guidance.
And net-debt to EBITDA at 1.9, our target was to get to 2 less than 2 million and US revenue to be between $275 million to $290 million. We closed the year at 291 million, also surpassing the upper-end of the guidance what we have given for US business. And what we want to say here is that the US business grew much faster than the overall company average, but 22%. And from a revenue perspective, we grew 17.2% overall revenue and gross margins at 20.5% and EBITDA 36 points at 37% and PAT is a multiplier growth almost 12 times from previous years. And the most aspect of the last two quarters has been that we have been able to maintain the gross margins at a 58% to 59% range and this has been the second consecutive quarter post the demerger of the software business. Coming to the US business, we received five product approvals and seven — we launched seven products and we also sustained market-share across the products and we have market-leading positions in 36 out of 73 products which we commercialize and we continue to enjoy a great service levels compared to most of other people in the industry.
And we are also happy — we are also pleased to announce that the first spray product was filed — which was beyond 400 million strategy was filed with US-FDA recently. From another regulated markets perspective, we grew at 13.5% and in the strong in-licensing portfolio to drive near growth in UK and Nordic markets and we need to work hard on expansion of the product portfolio new customer acquisitions, which will be the focus going-forward. And continued momentum in filings will also drive the growth in the medium-term. As far as the growth markets are concerned, we grew very well in the growth markets, 24.2%, Access markets was a slight degrowth. And we all know that access markets is very lumpy and we believe that we have got enough pilots in-place to bring in new dollars for the growth markets in the near-future.
The company will be focusing heavily on the regulatory and the R&D work with respect to the new markets and so that the long-term growth is intact from a company perspective. And focus on portfolio maximization strategies are also in-place and the channel partner expansion will also drive the future growth. And overall, if you really see, we are very happy with the growth and across all parameters of profitability, efficiency and growth
And I’ll let Vikesh to cover the efficiency and the growth parameters.
Vikesh Kumar — Group Chief Financial Officer Group & Chief Investor Relations
Thank you, Badri. Good evening to all of you. It’s — as Badri mentioned, it’s very delighting to share that we have had a very strong closing to FY ’25 with a very consistent operating performance across all our metrics, demonstrating a very solid and comprehensive operational execution. We had an exceptional year-on-year growth across all P&L metrics. We reported an EBITDA of INR803 crores for the year, which grew by 37% with an EBITDA margin of 17.6% or 252 basis-points expansion in our margins.
We also reported our highest-ever operational and reported EPS for the year, our operational EPS at INR37.46 per share, grew 12 times and our reported EPS is at INR44.05 per share. Our operating leverage and focus on all our cost line items is clearly demonstrated in the significant improvement in our EBITDA to PAT conversion. For the quarter, we have reported an EBITDA of INR218 crores, which grew 22% year-on-year with an EBITDA margin of 18.3% and operational PAT of INR113 crores for the quarter is again our highest-ever quarterly PAT that we’ve reported and our EBITDA to PAT conversion is at 52%, which is — which is a significant improvement over the last few quarters. Our operational EPS for the quarter, we’ve ended at INR12.27 rupees per share.
So we are very happy to also state that our Board has approved a dividend of INR4 per share in our results today. Our focus on efficiency metrics is also seen in our cash-to-cash cycle, which is at 117 days and this has helped us deliver our best-ever operational and free-cash generation. Our operational cash-flow of INR684 crore for the year is 85% of our reported EBITDA and this has helped us deliver a free-cash of INR230 crores. This is after spending INR242 crores in capex. This cash generation and with the debt we transferred to One OneSource as part of the demerger has helped us significantly deleverage our balance sheet with our net-debt reducing to INR1,522 crores. It is a reduction of INR530 crore during the year.
So we also had very focused efforts on reducing our high-cost loans, which has helped reduce our gross debt by INR619 crores during the year and this has significantly improved our finance cost. Our finance cost has improved by almost 27% from Q1 to Q4. So just in the financial year, we have significantly improved our financial — our finance costs. Our net-debt for the quarter reduced by INR49 crores and this helped improve our net-debt to EBITDA to 1.9 times, which is ahead of our outlook of 2x.
As of today, we have no outstanding corporate guarantees to Stellas. The — all the INR705 crores of guarantees that were issued have been closed during this year. Coming to ROCE, our ROCE grew to 14.9% from a comparable 9.7%, a very strong growth. Last year, we had reported an ROCE of 12.8%, which included the demerged business. So even after the demerger, we’ve been able to grow our ROC very strongly and this is also reflected in our fixed asset turnover, which is now at 4.95 times. Our overall operating expenses for the quarter have remained steady for the year and for the — and these expenses have improved to 39% of sales from 40% last year our effective tax-rate is at 18.7% for the year and this is in-line with our estimates of 18% to 20%.
Overall, it has been a fantastic performance that we’ve had during the year and we’ve demonstrated a very consistent quarter-on-quarter EBITDA growth for the last eight quarters and that continues to remain our focus going-forward.
Thank you, and we are happy to take any questions that you may have.
Abhishek Singhal — Investor Relations
We are open to take questions.
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 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 Aniket Nikum from ABN Capital. Please go-ahead.
Aniket Nikumb
Hi, sir, am I audible?
Arun Kumar
Yes.
Aniket Nikumb
Congratulations on a great set of numbers, sir, and the progress you’ve done over the last couple of years. I have two questions. First question, sir, was on the US business. We’ve now achieved, Call-IT, $291 million of revenue and we’ve given a two-year outlook of $400 million. So maybe would you like to give a little bit color on how you’re seeing FY ’26 and maybe a little bit on what are the key launches you are seeing or a little bit more color on the new controlled substance nasal spray opportunity that you are targeting.
Arun Kumar
We don’t get to such granularity as a principle. The US business continues to be an important part of our overall growth strategy. Our EUR400 million objective has been up in our slides now for a good three years. We have grown this business quite significantly in the last two to three years and we still have over 200 — almost 150 ANDs that are not commercialized. So we’ll continue to focus on the US business. We have, we think the contrarian approach of staying invested in the US has played well for us because of our product selection and our service levels. We still believe that there is with all the ambiguity that is still in the air as regards tariffs and stuff like that, we are in a very strong position to grow our US business.
The US plant that we acquired from Indo has a very significant controlled substance opportunity across all domains. Our first — we have three filings in our nasal spray programs, which will all be completed within the year. The market opportunity of this is very significant. The nasal sprays market opportunity is close — the nasal spray global opportunity for the US market is fairly significant. We expect to be one of the fewer players in controlled substance name space. And apart from we don’t normally give product names as a policy, I hope I have addressed your question.
Aniket Nikumb
Yes, I know that’s — that’s helpful. And maybe would you like to give any color on the 505 B2, you know what segment or any color on that?
Arun Kumar
I mean, there are so many domains in the market. It’s our first 502, 505, V2 in a very specific area. It’s too early for us to give you more product specifics.
Aniket Nikumb
Got it, sir. No, very, very helpful. Sir, my second question was a little bit maybe just on the finance side, obviously, we have delevered significantly. So would you — would you sort of expect a sort of credit rating uptake and a significant reduction in the cost of funds. What’s our current borrowing rate and do you think that sort of comes down meaningfully in the next year?
Vikesh Kumar
Yeah. So on the finance costs, as you would appreciate, in H2, we have already done a significant level of renegotiations and improved our overall finance cost-efficiency and that is reflected in Q3 and Q4. And clearly, after these results, we are working on the credit rating and we will update you as we go-forward. Sir, what’s the current cost of funds? The current cost of funds is about 9%.
Aniket Nikumb
Got it. All right, sir. Very helpful. Thank you and all the best.
Operator
Thank you. We’ll take our next question from the line of Anand Mundra from Sor Wealth. Please go-ahead.
Anand Mundra
Hello, sir, good evening. Am I audible, sir?
Arun Kumar
Yeah.
Anand Mundra
Yes. Yeah. Sir, I have question with respect to other regulator markets. So revenue has been largely flat for the last four quarters in this segment. So wanted to understand your growth prospect for FY ’26?
Arun Kumar
Well, the other end-markets has steadied and you’re right that the last four quarters has been fairly straight-line and that has also to do with the fact that we have a significant B2B business in Europe. And when we have licensed out our products to larger plays in that market, it takes a little while for them to have their launch programs up and running. So I think the achieving consistency was a key theme that we have achieved. And I think going-forward, although it’s consistent for quarters, you notice there’s a 13.5% growth. So it’s not necessarily small growth. But we think that all the engines are now firing in Europe and we should be reporting even a more improved outlook on these markets as the quarters go.
Anand Mundra
Noted, sir. Sir, other thing, in earlier calls, you had mentioned that other regulated market shall mirror US market in next four to five years. So that means that we are looking for substantial growth in other regulated market also so how do you — what is the key driver for the same, sir, how do you think that would be achievable?
Arun Kumar
So is there on a landing slide, it talks about portfolio maximization, incremental focus on newer partners and we’ll continue to drive growth in the medium-term through these actions.
Anand Mundra
So do you see that US market and other regulator market will be similar in next four to five years, sir, in terms of absolute size?
Arun Kumar
But that’s a fair guess.
Anand Mundra
Okay, sir. Sir, my third question is with respect to cash conversion cycle, there is a significant improvement from FY ’23 to FY ’25. Can we expect further improvement in the working capital cycle, sir.
Arun Kumar
I think we already have industry-leading cash-to-cash cycle gains and Vikesh, you can allude to add more to that.
Vikesh Kumar
Yeah. So we’ve got to a position where I think it is important to sustain this performance over a longer-term and our focus is going to remain on maintaining these cash-to-cash cycle days.
Anand Mundra
Okay. Noted, sir. Thanks a lot. Wish you all the best, sir.
Operator
Participants, in order to ask a question, please press char and one now. The next question is from the line of Nitin Agarwal from DAM Capital. Please go-ahead.
Nitin Agarwal
Thanks for taking my question, Aaron, and congratulations to the management team for a brilliant turnaround this year. Aaron, on the US business, how many products are we looking to launch of the 60 odd that we’ve identified for from the dormant ANDAs over the next couple of years?
Arun Kumar
Thank you for your kind words. Just to it has been two consecutive years of solid performance. I didn’t want to take-away anything from the team that delivered that. Having said that and specific to your question, we — out-of-the 60, I think we have already now launched more than five or seven products and now — and that is why we are very bullish about the market opportunity. But as you know, as a measured launch, the file — the improvements in the files from what we acquired have been completed for a lot more, but we will only place the product at the right time and at the right price.
So we are not — we are not opportunistic in accelerating our growth because we already have a fairly significant above peer group of growth in terms of percentage Q-on-Q for US market. We’ll continue with that with the portfolio that we have. But we do have 60 products identified. A lot of them are — we have got all the regulatory interventions done, some of them are launched and we’ll keep launching one, two products every quarter. We also remember, Nitin, that when we face challenges on our products, we also withdraw one or two products. So it’s not necessarily a net-net game
Nitin Agarwal
Right. And in terms of the incremental R&D that we are doing, this is now largely going towards, as you Call-IT, the beyond $400 million as a strategy portfolio or there is some R&D which is really — or is this how we are calibrating the R&D incrementally?
Arun Kumar
And for new A&D filings except for very few products where we have very strong fits our scarcity theme. So it’s a very small number of products. Almost 75% of our R&D investments and this year it will be a fairly significant jump will be for the Beyond 400 portfolio because most of the filings with 505B, as you know, cost almost $2.5 million just on the fees. So there will be incremental cost that you will see soon. But we are very confident about those products and the opportunities they bring to us.
Nitin Agarwal
And then these products that we typically start making impact for F ’28 or further — I mean, 28 onwards or will take more like ’29 onwards? These are complex products
Arun Kumar
All the three nasal stress we expect to be commercial between 12 and 18 months from now and they are fairly significant programs and the C2 products C1, C2 products that we can only make in the US we have revived most of the files for us to relaunch and that will also support the growth of products manufactured in the US.
Nitin Agarwal
Okay. And on the on the housekeeping numbers, the exit interest cost and the depreciation that we’ve had, these are the numbers that we can assume on a going-forward basis now?
Vikesh Kumar
Yes.
Nitin Agarwal
And is what kind of debt reduction are you targeting over the next couple of years?
Arun Kumar
I think we are in a very comfortable position now. We probably can reduce another INR1,000 crores in the next two, 2.5 years. That’s the goal. Yeah. So we think that we can generate the INR500 crore INR600 crores of free-cash every year. We had a fairly significant capex play in the last two years of building some of these new domain capabilities. But now that will shift to the R&D expense. And yeah, I think we should be in a good position.
Nitin Agarwal
So I don’t know, what kind of R&D spends are we looking at from here on with these newer investments we’re looking at?
Arun Kumar
Yeah. So yeah, it’s — we are almost doubling our R&D spend from where it was last year and almost 15 million of the 20 million that we are spending will be for the Beyond 400 million
Nitin Agarwal
Okay. Thank you so much. Best of luck.
Operator
Thank you. We’ll take our next question from the line of Sharma who is an investor. Please go-ahead.
Jagdish Sharma
Hi, sir, congratulations for the quarter. Am I audible?
Arun Kumar
Yes.
Jagdish Sharma
Sir, what is our capex outlook for FY ’23-’27, sir?
Vikesh Kumar
The capex outlook we expect to maintain similar or lower levels.
Jagdish Sharma
Okay. So my second question is, so we have reached INR218 crore of EBITDA on a quarterly basis and INR430 crore in the second-half of this financial year. Are there any one-offs in this in this sir or is this sustainable exit-rate that we can extrapolate for FY ’26?
Arun Kumar
You can. There are no one-offs.
Jagdish Sharma
There are no one-offs. And do we anticipate any growth, sir growth. Any growth we have EBITDA.
Arun Kumar
So we are not going to take a growth holiday. We’ve been growing every year. So it is the flow-through margins through EBITDA and PAT to be significantly higher than the revenue growth that we will achieve.
Jagdish Sharma
So can we expect high-teens margin, sir? Because our software — business has been carved-out, which was the most profitable segment. So can we expect
Arun Kumar
You have reported 18% EBITDA in Q4. So what are you talking about high-teens? We are very close to 20%.
Jagdish Sharma
20%.
Arun Kumar
We should be there.
Jagdish Sharma
We should in the next three years.
Arun Kumar
Yes.
Jagdish Sharma
Okay. Congratulations. Thank you.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two per participant. I’ll take our next question from the line of Rupesh from IntelSense Capital. Please go-ahead.
Rupesh Tatiya
Thank you. Thank you for the opportunity, sir, and congratulations on fantastic year. My first question, sir, is on our ability to respond to US tariffs. I mean, things — a lot of things are fluid, but we have a facility there endorse. So if you can give some color on what kind of capacity we have, what is the capacity utilization, if things comes to it, how fast can we move some production there? So if you can give some color on that, that would be really helpful.
Arun Kumar
Okay. So basically on generics, it’s impossible to compare costs. The US costs are about 3.5 to-4 times depending upon the product to manufacture compared to Asia. So I personally think that we have almost 70% of our revenues and 70% of our margins coming from products that there are very few players or none and all they are produced in the US already. So we as far as tariffs are concerned, we will not be able to eat the tariffs ourselves, we’ll pass-on the tariffs and that’s our — our stated policy.
So it may take — it may take a little time in terms of lag of introducing the new prices. But I think considering that we do not do commodity products where there are many players with the same ANDA, I think we are in a much better position to take head-on the generics tariffs if it arrives. Our personal belief is that it does not make sense from a rational situation for generics to be tariff, but that’s our view, the view. But if tariffs are there and it has to be beyond 100% for anything to be made in the US viable or comparable, which is not going to happen. So I think there will be some amount of tariffs, but we’ll wait-and-see. So early to speculate.
Rupesh Tatiya
Thank you. Thank you for that very clear response, sir. Second, second question, Arun is, I think Europe, I mean in the past calls you have always been saying that the Europe growth will pick-up in FY ’26, other regulated markets also will pick-up where we’ve been trying few things in those markets. So is it fair to assume that we will hit $50 million run-rate in other regulated markets and $30 million run-rate in growth markets this year. Is that a fair assumption to it?
Arun Kumar
That’s not a fair assumption. Neither can I confirm or we are working. We are working — we are working on growth, right, and it takes time in Europe because it’s not one market. There are 25 or 28 markets that we have to cover when we sell products in that market, it’s time-consuming. But we are feeding a lot of products and programs. And I think you will see — and this is very typical of strides. If you look at the last three years, we stabilized the business over two to four quarters and then we take it up a step. And that’s what we have done very successfully and that’s the model we are following here. So to be sure that we have visibility of $40 million every quarter was the key goal and above.
And now our goal will be more growing from there and I’m not in a position to say if our exit-rate will be 60. It will be an important market to see growth. And to your specific question on emerging markets, it is growing higher than the company average as you can see, but it is a low-base. We — it takes time to build that business. We have started a lot of activities, but we think it will also be a nice segue to our overall strategy to create value. So I think one of the earlier colleagues of yours who asked question was, will we be able to mirror the other markets to US in a couple of years, that is the 400 number — 400 million number in the US? The answer is yes. Do you see — will we see a slightly better outcome in this year in and ORM answers also, yes.
Rupesh Tatiya
Yeah, thank you. Thank you for that answer. And just quickly, if I can ask about pricing pressure across all our key markets, any color you can give on pricing pressure? That would be my last question.
Arun Kumar
We have no pricing pressure. We’ve been saying this for the last three years we have no pricing pressure because okay next question.
Operator
Thank you. We’ll take our next question from the line of Sarvesh Gupta from Maximal Capital. Please go-ahead.
Sarvesh Gupta
Good evening, sir, and congratulations on a very good set of numbers. Sir, just one question on the balance sheet. So right now we have a net-debt of around INR1,500 odd crores and what we are guiding is around INR500 crore odd reduction in this every year for the next couple of two, three years, right. Is that the right understanding?
Arun Kumar
We are not guiding anything. All we are saying is that this year has been a significant free-cash generating year. Vikesh clearly articulated that he expects that to continue. This year, the INR500 crore of INR600 crore gross debt reduction also included a push down of INR280 odd crores to One Source. So it will be fair to say that we don’t want to be a debt-free company. We wanted a good strong balance sheet and we already have achieved that at 1.9 times. Clearly, we think that we can reduce debt even more because we are — we do have the ability to fund all our programs without any new investments. And yeah, maybe the INR300 crores to INR500 crores is a range that we can look. Some years will be 300, some years will be INR500. It depends upon the R&D spend that we are investing for the Beyond INR400 strategy in the US.
Sarvesh Gupta
And this INR1,500 crore number does not include the INR300 crore odd of retail interest in, right? Hello. Okay. Okay. And final question is on the capex, sir. So right, this year we spent INR240 odd crores. So what is the capex plan for FY ’26 and where are you planning to spend that? That’s all. Thank you.
Arun Kumar
Be much lower than the EUR245 because we did a fair amount of spend debottleneck — debottlenecking the facilities for the next several years. But like I told earlier, our spend in R&D will increase. So I think net-net between capex and R&D, the numbers will stay. Last year, we would have spent about INR350 crores between the two, R&D and CapEx. But this time it will be skewed towards R&D and portfolio management. So I still think that we’ll have between INR300 crore to INR400 crores of cash left after doing this.
Sarvesh Gupta
These R&D spends also will be capitalized, right?
Arun Kumar
No, we don’t
Sarvesh Gupta
Okay. Thank you, sir. Thank you, sir.
Operator
Thank you. We’ll take our next question from the line of Kiran from TableTree Capital. Please go-ahead.
Unidentified Participant
Hi, thanks for the opportunity. My first question is around debt, sir. So we have about INR1,800 crores of debt, net-debt of INR1,500 crores. So the question essentially is what are the risks that we see for INR1,000 crore EBITDA in FY ’26 and basically the follow-up is then we can go for a more aggressive debt reduction program back to INR500 crores, just like Arun just mentioned, right, from INR500 crore to INR500 crore over the next two years. So just trying to understand what is risk for INR1,000 crores EBITDA in FY ’26 and why aren’t we going for a more aggressive debt reduction program
Arun Kumar
INR1,000 crores from. I was asking where did you get this INR500 crore number from?
Unidentified Participant
So are you saying INR1,000 crore EBITDA, what is the risk for INR1,000 crore EBITDA? And we have INR1,500 crore debt, you have said you want to maintain a INR300 crore to INR500 crore debt. We don’t want to be debt-free. So I’m just saying INR500 crore minus about INR500 crore higher part of your range is a INR1,000 crore debt reduction.
Arun Kumar
Okay. Everything that is set is fine, correct, except the first-line we haven’t guided for INR1,000 crores. You are — you are taking it, you are making up, making that up.
Unidentified Participant
Perfect. Yeah, that’s understood, sir. I mean, I’m just saying what is the risk for growth? Just if I want to rephrase that
Arun Kumar
Compliance, which so-far we’ve had seller records for the last many years. I think we need to solve for the ambiguity of the tariffs. That would be a kind of a tipping point, not that it will impact us from our — we are not changing our trajectory of the INR400 million growth. Those are the standard risks.
Unidentified Participant
Got it. Got it. And the aggressive debt reduction program, sir,
Arun Kumar
I do not know what is this overhang of debt. We just reduced it from INR3,000 crores to INR1,500 crores. I’m not sure what are you trying to achieve from me by asking this question on debt. We are very comfortable because all of this debt is effectively working capital debt. It’s backed-up by receivables or inventory and it’s very normal for us to have.
Unidentified Participant
Thank you, sir. We request you to rejoin the queue for follow-up questions. The next question is from the line of Arian Jain from Lotus Wealth. Please go-ahead.
Aryan Jain
Congratulations on the great set of numbers. We just filed our first Beyond generic product, nasal for US-FDA approval. So how many more products do you — do we have in our pipeline in the Beyond generics portfolio?
Arun Kumar
We expect to file about three to four products every year from starting from this year and most of them are 50, 5
Aryan Jain
Understood. And I had another question. So Stribes has been investing heavily in the Pfizer IB product as a part of its Beyond Centric strategy. So can you elaborate more on the therapeutic focus areas, number of assets under development and expected approvals maybe in the next two, three years
Arun Kumar
Or we can’t, unfortunately. So I mean, I gave an indication that we will have four filings, which effectively means I hope we’ll get four approvals per year
Aryan Jain
Thanks a lot.
Operator
Thank you. The next question is from the line of Deepak Poddar from Sapphire Capital. Please go-ahead.
Deepak Poddar
Am I audible, sir?
Arun Kumar
Yes.
Deepak Poddar
First of all, many congratulations for a great set of numbers. So just wanted to understand, first thing, I mean, in the last call, we were talking about, I mean this year FY ’26, we might look at INR1,000 crores kind of EBITDA. So that number remain intact. I mean in terms of our great performance that we have seen.
Arun Kumar
So we’ll hope to continue the great performance that you are calling out and whatever that adds up to you will — I mean, think about it, our exit run-rate is INR870 crores so is it possible to get to 1,000? It depends upon what Mr Trump finally decides on tariff. Does US take a — will we be able to grow US at the same levels? It’s a function, that’s the only thing in. Otherwise, we believe that this Q-on-Q growth of EBITDA is definitely doable under whatever circumstances.
Deepak Poddar
Okay. So we do — we are targeting Q-on-Q growth in EBITDA. I mean, that’s quite doable as per our understanding.
Operator
Thank you. We’ll take our next question from the line of Chirag Shah from White Pine Investment Managers. Please go-ahead.
Chirag Shah
Yeah. Thanks for the opportunity. Sir, few follow-up questions and one additional question. First is the 60 product libraries that you indicated to drive. So of that, how much would you think would be really active for the US, the 400 million target, if you can just give some indication on that, how to think about it?
Arun Kumar
The day products that we plan to relaunch from the end of portfolio is part of our 400 million story and not beyond INR400 million.
Chirag Shah
Okay. So all the would be launching.
Arun Kumar
All the — not necessarily depending upon our goal is to hit 400 million in a measured way and we are happy with our growth trajectory. And to specifically answer your point, the Beyond 400 has got no products that are being acquired. It is all R&D that we are doing ourselves.
Chirag Shah
Okay. And so for — so just to clarify on this, so when you think of this new products launch, if you can indicate what is the minimum and maximum revenue potential range that you look at given where we are operating today? And how would you incrementally think the minimum operating range of the molecules that you target? Revenue potential on annualized basis or on a three-year basis, however you may look at it?
Arun Kumar
I understand about three years ago, our average revenue per molecule was about $3 million with one or two products exceeding $10 million. Today, our average volume of product launch is $5 million and we have several products which are more than $20 million.
Operator
Thank you. Sir, we request you to rejoin the queue for follow-up questions. We’ll take our next question from the line of from Biopharm. Please go-ahead.
Unidentified Participant
Hello. Congratulations on a good set of numbers and thank you for the opportunity. So I just have one question. So just wanted to know if we’ll be able to maintain the EBITDA margins of — which are being currently managed by you
Arun Kumar
Heard us right?
Unidentified Participant
Yes, yes.
Arun Kumar
Okay. Thanks.
Operator
Thank you, Swarup. We’ll take our next question from the line of Kartik, who is an individual Investor. Please go-ahead.
Karthik
Yeah, good afternoon and thanks for the opportunity. I just wanted to add-on to what had asked earlier. Just trying to understand how the portfolio concentration will evolve in the US for you when you hit the $400 million revenue mark? That’s one. And if you will indulge me, can you also split the profitability for the company between the US operations and India operations separately? Or the rest of the world?
Arun Kumar
We don’t have any Indian operations in the first case.
Karthik
Sure. Okay. So how about the first part of it? Can you clarify the concentration part of the portfolio on the US business? How many products contribute to say, 80% of revenues out of 290 say, for example and how would it look when you get to 400 room, right? It would not get the same. Let me clarify, I’m trying to understand the supply-chain challenges you face as you keep adding more-and-more products and that’s really why I wanted to understand it better, better.
Arun Kumar
Today, our launches are very measured. We don’t run to the market as soon as a product is approved. It’s very measured, it’s very well stopped and that is why we have an industry-leading service-level. Our failure to supply, not even 1%, okay. So that is an indicator. And that is the reason why we are able to keep market-share for several years, even when companies — even when other companies come with products — product. So we have a very strong service-level arrangement with our supply-chain and that is what is driving us. We are not building — and when we just completed between the last two years, we completed INR350 crores of capex between the two years. That has increased significantly capacities of our existing operations.
So we are not building — so it’s not going — and we have automated very heavily. So we have not have a headcount increase in our operations while we have debottlenecked and we are using technology to get there. So we don’t see supply-chain — we see supply-chain to be a problem if we want to launch all our 200 products. That is not our plan anyways. So we are very comfortable with our supply-chain are planning and our process?
Karthik
Sure. Thanks for clarifying. And best wish you.
Operator
Thank you. We’ll take our last question in the line of Anupam Jain from Indira Securities. Please go-ahead.
Anupam Jain
Thanks for the opportunity, sir. I just wanted to understand your OneSource investment. What will you do with that?
Operator
Ladies and gentlemen, the line for the chairperson seems to have disconnected. Please hold while we reconnect Ladies and gentlemen we have the management line connected
Abhishek Singhal
You have the last question, if you can take that?
Operator
Yes, sir, can you repeat your question?
Anupam Jain
Yes. So we have one source investments of INR305 crores. What is the rationale and when are we looking to exit this? What is the rationale means rationale to keep the investment or what are you see?
Arun Kumar
Sorry,
Anupam Jain
Already demerged that part, what is the rationale to feed that investment? When are we looking to get that? Because that we can
Arun Kumar
Well, I think you need to be on a not. Are you on a speaker phone because we can’t hear you well
Anupam Jain
Is it better now?
Arun Kumar
Please ask the question
Anupam Jain
Hello so why are we retaining this one source investment currently? And when are we planning to sell it? Because this can help us in reducing our debt. That’s what my question is.
Arun Kumar
We don’t need to reduce debt and we think our investment in one source is a great strategic outcome and the shareholders of already benefited. And we had a small percentage in one of our associate companies, Arcolab and it would have complicated the NCLT process. So that is why we inform shareholders, typically we distribute 100% of all the economics that’s been the company’s policy. In this particular case, it would have complicated the NCLT process. So we retain this in Arco Lab, which is a wholly-owned subsidiary of and it will stay there and we also need to be sure that I mean, we should be using that when there is a need. At this time, we have no challenges on our balance sheet or on our growth or on our capex growth and we keep that for a rainy day.
Anupam Jain
Okay. One last question. Your net finance cost around INR200 crores. Can we expect this around INR160 crores because your INR1,800 crore is your gross debt and INR9 crores was cost around INR152 crores. So can we accept next year that it will be below INR160 crore around INR150?
Vikesh Kumar
Yeah. I mean our net finance cost for the year is INR195 crores, but we are exiting out at INR44 crores a quarter. And if you just extrapolate that, we will be — we will be will be within that range.
Anupam Jain
INR34 crores for this quarter.
Vikesh Kumar
Correct.
Anupam Jain
Thank you.
Vikesh Kumar
Thank you.
Operator
Thank you. Ladies and gentlemen, in the interest of time, we’ll take this as our last question. I now hand the conference over to the management for closing comments.
Arun Kumar
Thank you. Thank you all for joining today. And like Abhishek mentioned, if you have any questions, please do write to us. Thank you. Have a great evening.
Operator
Thank you. On behalf of Strides Pharma Science Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines