Suven Life Sciences Limited (NSE: SUVEN) Q1 2026 Earnings Call dated Aug. 13, 2025
Corporate Participants:
Cyndrella Carvalho — Suven Life Sciences Limited
Vivek Sharma — Executive Chairman
Prasada Raju V — Managing Director
Himanshu Agarwal — Chief Financial Officer
Analysts:
Avnish Burman — Analyst
Dhawal Khut — Analyst
Harith Mohammed — Analyst
Shyam Srinivasan — Analyst
Abdulkader Puranwala — Analyst
Chirag Shah — Analyst
Vivek Agrawal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Cohen’s Life Sciences Limited Q1 FY26 earnings conference call.
As a reminder, all participant lines will be in the lesson 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 0 on a Touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Ms. Cinderella Carvalho from Cohen’s Life Sciences Ltd. Thank you. And over to you ma’am.
Cyndrella Carvalho — Suven Life Sciences Limited
Thank you, Yousuf. Good evening everyone. Thank you for joining us today for a Cohance Life Sciences Quarter 1 FY26 earnings call. This marks our first full quarter operating as a unified platform under the Cohance identity.
Following the formal integration of our acquired entities and rebranding earlier this year. We appreciate your continued interest and support as we begin this next chapter of growth and execution.
Joining me on the call today are Mr. Vivek Sharma, Executive Chairman, Dr. Prasada Raju, Managing Director, Mr. Himanshu Agarwal, Chief Financial Officer.
Let me now invite Vivek to share strategic overview for the quarter.
Vivek Sharma — Executive Chairman
Thank you, Cyndrella and good Evening to all. Q1FY26 has been an important start to the year not only from an execution standpoint, but also in strengthening the foundation we have put in place over the past 12 months. This was our first full quarter as Cohen’s Life Sciences and I’m pleased to share that the transition has been on track both internally and externally with increasing alignment across teams, customers and platforms.
We remain focused on our core identity as a technology led global CDMO anchored in scientific partnership, speed and reliability. Our three pillar structure Pharmacy, Specialty Chemicals and API continues to provide a resilient foundation for growth in line with evolving global sourcing strategies. We have seen continued inflows of RFQ reflecting both China 1 and EU +1 diversification trends during the quarter. We responded to a healthy set of RFPs under this, particularly in HPAPI small molecules.
These requests are coming from established customers, expanding the scope of further and reinforces our positioning as a dependable CDMO partner for innovators looking to build supply security. Among our many ongoing customer engagements, our recent visit to Japan stands out as a key highlight. We strengthened our long standing partnership with a leading innovator in ADC payloads with discussions progressing towards broader strategic collaboration.
We are also growing traction with other Japanese innovators across niche modalities including oligonucleotides, small molecules in our agrochemical and specialty chemical segments. During the quarter we saw encouraging momentum across our CDMO business, particularly in lateral engagements and differentiated modalities such as ADCs and oligonucleotides.
Our capabilities in payload linker synthesis and bioconjugation continue to resonate strongly with global innovators. At NJ Bio, our US based subsidiary, we received a significant new order from an existing customer for full ADC supply in early phase payload linker synthesis to bioconjugation work. To support this and to meet future demand, we have commenced expansion of a dedicated CGMP suite in bioconjugation at the Princeton facility by committing an investment of $10 million.
This will significantly enhance our capacity enabling supply of full ADCs to clinical studies. We are pleased to share that our first adjacent payload program is under discussion, further strengthening our position in the ADC payload market where our two leading payload categories together account for nearly 80% of current R and D pipeline programs. Our CGMP oligonucleotide building block facility at NHA ram backed by 230 million INR investment is progressing on schedule and is expected to be fully operation by the end of CY25.
Early stage engagements with innovator partners are advancing well with plant audits anticipated over the coming quarters. To summarize, excluding the temporary impact of inventory destocking, our pharma CDMO segment delivered over 30% year over year growth supported by robust demand across key customer programs in high value modalities.
Our niche technology revenue share is has risen from the high teens in FY25 to above 20% in Q1 FY26 and is on track to approach the mid-20s by the end of FY26. This segment delivered growth well ahead of the broader pharma CDMO business excluding inventory destocking. Underscoring our differentiated capabilities and strong execution in complex modalities. We secured another US FDA approval from our partner program leveraging priority Review and Breakthrough Therapy designation to fast track its market entry.
Two additional products from our small molecule portfolio are expected to transition to commercial stage over the next 12 to 18 months. We are also awaiting responses from existing customers on pending lateral RFPs which could translate into additional opportunities in commercial products. During the quarter we secured a lifestyle management supply mandate from a leading global innovator for a branded product API underscoring our position as an integrated CDMO partner of choice.
I would like to also take a moment to reflect on the broader organizational evolution underway at Cohenz as part of our strategic journey to build a best in class innovation led global CDMO we are pleased to announce the formation of the Cohen’s External Advisory Board. We have inducted five highly respected industry stalwarts into the External Advisory Board, each bringing decades of leadership experience across R&D, CNC, Commercial and Supply chain roles at leading global innovator companies.
Their diverse perspectives and deep domain expertise will meaningfully shape our strategic direction and customer partnerships. As we scale the External Advisory Board EAB as we call it, will function as an independent panel of experts providing strategic counsel to Cohen’s leadership on innovation, customer centric growth and operational excellence. This initiative reinforces our commitment to long term value creation and deep collaboration with global innovators aligned with our vision to reach billion dollar USD revenue by 2030.
Dr. Sudhir Singh, who was running the CDMO business, has decided to step back from active executive responsibilities and on behalf of the Board and entire Cohen team, I would like to extend our Sincere appreciation to Dr. Sudhir Singh for his foundational contributions to building a CDMO platform and positioning it for sustained growth and global relevance. We wish him continued success in his future endeavors.
Sudhir will closely work with a seamless transition with our ambition to build a global technology led CDMO from India, we have appointed Mr. Yan Di Herm as CEO of our CDMO business, a strategic leadership move aligned with our global growth agenda. Jan brings over three decades of experience including nearly 15 years in senior CDMO roles and has built trusted relationships with leading innovators across us, EU and Asia.
His presence in the US together with our expanding global leadership team enhances our ability to operate as a unified platform. In parallel we continue to strengthen our CDMO leadership, deepen our techno commercial expertise and expand modality specific capabilities to stay ahead of evolving customer needs while scaling with agility, quality and speed.
With that I would now like to invite Dr. Prasada to take you through the segment performance and key operational updates. Dr. Prasada?
Prasada Raju V — Managing Director
Thank you Vivek Good evening to everyone. Q1FY26 has progressed across our businesses in line with our expectations. We continue to strengthen our key customer engagements and advance our platform readiness in high growth modalities, positioning ourselves well for the future across these technology platforms.
We are now working with more than 19 global innovators including our NJ Bio and Sapala customer network regarding pharmacy DMBO late phase activity and differentiated programs continue to drive scale up traction is there. We signed several new CDS and Master service agreements by adding top four large innovative customers across the platform apart from a few mid and small biotech companies which indicates growing confidence from global innovators in our integrated model.
I am happy to share with you some of the prominent wins and key developments across the business lines as shared by our Chairman Vivek. We have secured a lifesaving management opportunity from a leading innovator for a branded product API. Despite its long term sustainable and margin accretive nature, this collaboration has immense potential to scale up in the years to come.
We have been chosen as a high potent project which needs OEB4 infrastructure by a global innovator validating our infrastructure and regulatory maturity. Commercial contracts for intermediates are under discussion with a large innovator customer under EU1 sourcing strategy the continued ramp up of payload linker program across both in house and partnered platforms Our ADC platform continues to gain momentum across both payload and bioconjugation modalities.
At our Nacheram facility we also have finalized designs for addition of a new containment which is capable of demonstrating industry hygiene studies up to OEB six levels to support a customized payload program for a large innovation. This expands alliance with our increasing flexibility for growing demands of development commercial supply quantities.
Under this engagement it reinforces our high potency competencies. From a global regulatory approved site in India, we are also deepening our engagements with three additional large innovator companies beyond two ongoing commercial programs reflecting a unique value proposition.
Sustained trust in our payload linker capabilities as an integrated global player. Cohans first program in the adjacent payload family is under discussion, expanding our payload portfolio and strengthening our position across payload linker and bioconjugation workflows.
In parallel, we continue to engage with both existing and new customers, seeing growing interest in RFQs received for payload linker synthesis. These partners are also actively evaluating our Indian based linker manufacturing capability along with our Princeton based bioconjugation suit. Predominantly as a part of their long term supply chain strategy.
We are expanding our offerings into next generation modalities such as pegylated antibody conjugates, SRNA conjugates and antibody oligonucleotide conjugates which are evolving space in the antibody drug quantities. Our ongoing development of versatile payload linker program for ADC supports these capabilities. We continue to invest in scientific talent; compliance systems and capacities enabling us to deliver strong repeat business and deepen strategic collaboration with leading ADC innovators.
We have announced INR230 million for GMP oligonucleotide block at Nacharam facility. As we explained in our last on call, it is expected to be fully commercial by end of CY FY2526. It leverages our expertise in modified nucleosides log nucleic acid to scale up these chemistries from R and D to commercial manufacturing with up to multiple hundred kilo slots in a fit to purpose GMP facility.
Overall, project implementation is progressing as planned and the qualification is near completion. It’s important to notify the early customer interest remains robust and the platform will be vital to our future modality mix.
Coming back to Specialty Chemical segment as we have alluded during our last call, customer engagement remained very positive. The aecium business continues to have improving sequential recovery and the visibility is in line with our communicated expectations. Performance chemicals shipments are expected to ramp up in the latter part of the year.
Overall we remain confident of delivering full year growth targets. We are also now focused on adding two more customers in this segment while we deepen our existing relationship with a large innovator company regarding API and FDI business, it has delivered strong performance backed up by a deeper business fundamentals, scaling up of existing product portfolio and a healthy pipeline that by securing orders in hand we have validated two new products in API and are also on track for 7 to 8 new product validations and subsequent regulatory filings. Commercialization efforts of formulation projects are delivering expected results.
With this, let me now hand over to our CFO Himanshu for the financial overview. Thank you, and over to you, Himanshu.
Himanshu Agarwal — Chief Financial Officer
Thank you Dr. Prasada and good evening to all. Our quarter one FY26 performance is in line with our expectations and the trajectory we had outlined earlier. As always, we encourage you to evaluate our performance on a full year basis as quarterly trends may not fully reflect the underlying momentum of the business.
Let me walk you through our quarter one financial year performance. We reported a revenue of 13% growth year on year one FY26 led by performance in specialty business API excluding the inventory destocking and pharmacy MO. The revenue growth for the quarter exceed 25% while revenue recognition was back ended this quarter due to shipment timing and inventory destocking, operating indicators remained healthy and aligned with our expectations.
The Pharma CDMO segment posted a year on year 1% revenue growth in quarter 1 FY26. However, adjusting for the inventory restocking in the commercial products which we had outlined earlier, the segment delivered ahead of a 30% plus growth driven by robust demand across key programs and high values.
We also want to highlight that our niche technology revenue share has advanced from a mid-teens revenue share in FY25 to above 20% in quarter one FY26 and is well on track to approach mid-twenties shares by FY26 growth in this segment was well ahead of the pharmaceutical business, reflecting scale up in ADC and oligonucleotides.
We expect this segment to be a meaningful driver of our growth trajectory as the bioconjugation capacity expansion in Princeton, the CGMP oligonucleotide building block facility at NHA RAM and the customized payload linker synthesis ramp up in the US and India together in the coming fiscal years will deliver significantly higher margins. The adjusted EBITDA margins reflect ongoing investment ahead of scale and the integration of recently acquired high tech growth assets.
During the quarter we invested rupees 559 million in capex primarily towards capacity expansion and JBIO final stage validation at Nassau and Oligo Suites. As well as debottling across core manufacturing platforms. We also generated 2.3 billion in free cash flow. We ended the quarter with a healthy cash balance of 4.4 billion books, underscoring our disciplined approach to capital allocation and operational execution.
We continue to maintain a healthy balance sheet and our capital allocation remains sharply focused on scaling differentiated platforms, enhancing modality readiness and capturing operating leverage over the medium term. We reiterate our FY26 guidance and we continue to maintain a long term guidance of reaching 1 billion 85 billion in 2030. As we scale up further, our medium term plans to achieve mid-30s EBITDA margins remain intact.
In closing quarter one has indeed laid the groundwork for the rest of FY26 and beyond. We remain focused on delivery, execution, excellence, scaling differentiated platforms like ADC on egos and strengthening our position as a trusted global CDMO partner.
With that I hand it over to Cyndrella.
Cyndrella Carvalho — Suven Life Sciences Limited
Thank you Himanshu. With that growth focused mindset we are happy to open the floor for questions.
Questions and Answers:
Operator
Thank you very much. Yes, we will now begin the question and answer session. Anyone who wishes to ask a question may press star L1 on the touch tone telephone. If you wish to withdraw yourself from the question queue you may press Star and two Participants are requested to use handset while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles.
First question is from the line of Avnish Burman from Vaikarya. Please go ahead.
Avnish Burman
Hi, good evening. Thanks for taking my question. My question is specifically on the pharma CDMO side, the APIs that you would be making for innovator big pharma companies. I wanted to know whether you are exporting these APIs into facilities in the US or are they majorly being exported into some European countries like Ireland and the Formulation is happening there. So which is the major export country for your APIs under the Pharma CMDO?
Vivek Sharma
Avnish, Thanks for your question. Major portion of this is going to Europe.
Avnish Burman
Okay. My understanding is this is regarding the tariff. My understanding is that APIs do not come under the definition of pharmaceutical as defined by section 232 investigations. Is this understanding correct that APIs that are being imported into the US are getting tariffs as of now?
Vivek Sharma
So listen, we don’t make APIs. We do intermediate and they are, you know, they are right now not part of the tariffs that are being talked about. As far as we are aware, pharma is exempt and right now we are exempt from any tariff discussion.
Avnish Burman
Okay? So right now whatever intermediates you are producing, you are exempt. But the exemption is are you exporting any of these intermediates into US or is everything going into Europe?
Vivek Sharma
Predominantly Europe.
Avnish Burman
Okay, just one more question. This is a hypothetical one. Let’s see. Tomorrow something comes out of the section 232 investigation and you know there is a tariff number that is being suggested. Is there an agreement or an understanding on how will it get passed on in the supply chain? Whether your customer will bear it or whether you will have to bear a part of it. Is there some color on that?
Himanshu Agarwal
Avnish, this is Himanshu. So most of our current agreements with the customers are on fob basis. We do not have the liability to pay the tariff when the goods reach the shore of us. So hopefully that addresses the query that you have on the hypothetical question. If tariff. It does man.
Avnish Burman
So thank you so much. I will get back in the queue. Thank you.
Operator
Thank you. Participants, if you wish to join the question queue you may press star n1. Ladies and gentlemen, anyone who wishes to ask a question may press star N1 on the Touchstone telephone. Next question is from the line of Dhawal Khut from Jefferies. Please go ahead.
Dhawal Khut
Hi. Thank you for taking my question. I wanted to know. We have been investing…
Operator
Sorry to interrupt. Mr. Dhawal, your voice is very low. Request you to please speak little louder.
Dhawal Khut
Yeah, hi. We have been investing into building teams and building talent. So wanted to know what is our current DD team strength, especially overseas and where are these teams located and what is the future plan? Do we still see lot of aggressive hiring within these teams? That’s the first question. Proceeding to my second question.
Vivek Sharma
Can I answer that?
Dhawal Khut
Yeah, sure, go ahead.
Vivek Sharma
So thanks for your question. So yes, you’re right. We’ve been investing in front end capabilities. You know, in all three major markets, U.S. Europe and Japan, Southeast Asia. So today we have in the North America we have four BDs. These are all experienced GDMO.
Several of them are PhDs that we have hired in the last nine months or so. They are based in east coast and west coast. We also have added resource, a very experienced ex pharma executive in Europe as well as one very seasoned executive tool the Japanese market. Now in addition to that NJ Bio also comes with its VDK technical fees.
So we have ADC specialists and they have two PD resources actually that are focused on ADCs. We also have Sabala has resources. So they have a few resources in Japan as well as one resource base in India that travel. So combination of all of them, about 10 resources, 11 resources that are really helping us build brand and then growing customer relationship and then integrating with customers. You think we are three DMO business, right?
Yeah. In addition to that API plus has its own separate specialty. CAM has its own separate team.
Dhawal Khut
You think we have the right team sizes or you think there is some room to augment it from further on the CDMO side?
Vivek Sharma
Yes, listen, I mean we are also. It’s not about a quantity. I think it’s the quality of people that we focus on. So and I think us what we will, you know we are, we will announce some more people I think as time progresses to really add to people with some unique experiences as well as unique, you know, capabilities.
But I’m actually very excited about this customer advisory board that we have really engaged with. These are very experienced people. So with the combination of customer advisory board, our PT team and Jan coming in and several of us really putting a lot of time on front end. I’m very excited. I think with the team that we have and you know this is a process of evolution, may add one or two resources here and there but we are not looking for major expansion in the quantity of teams.
You may add one or two people required but there’s no major expansion plans there. There’s a lot to be done with the team that we have and we are excited. I think with the potential CPHI is coming, we’re already blocking our calendars. A lot of meetings are lined up. Other events are coming with chemstack in US in a few weeks. So the team is really excited. There’s a lot of effort going on with the existing teams. We feel the need. We’d be happy to bring some specialist people to help us accelerate the growth.
Dhawal Khut
Understood. Very helpful.
Cyndrella Carvalho
Does that answer your question?
Dhawal Khut
Yeah, yeah it does, it does. It was helpful secondly, you know, there are many payloads where you know, our payloads are going to other global CDMOs. So in those cases, does the end Innovator know where is the payload coming from or is it completely at the discretion of the global CDM where the payload and incur is coming? Or you know, the Innovator is just informed about it. But again, the final decision is with the CDMO. Is it the other way where the Innovator mandates the CDMO to use payloads from certain, you know, manufacturer. How does that supply chain and decision making work?
Vivek Sharma
Very good question. Final decision is fully with the Innovator and Innovator is fully aware and is part of the decision making process on selection of the products that we supply. And our product is a key part of the end to end supply chain that is required for the end to end molecules that the customer is presenting. As recent as a few months ago, I personally met the end customer, the final customer.
So yes, they are fully aware and they’re fully integrated and they’re fully aware. They’re fully involved with us in the decision making process and the future plans for that product and the other product they might want to launch that requires that material or a similar material.
Dhawal Khut
Got it. One last bit. As a firm, do you think map manufacturing or antibody manufacturing looks area that we would like to explore if any, you know, inorganic opportunity comes up or whatever, you know, even trying to build it organically or you want to focus on within the peptide small molecule space and other key chemistry which are highlighted within the PPT?
Vivek Sharma
Yeah, Dhawal. I mean we are a customer centric organization. Our focus is to grow with customer and invest with customers in investments. We have announced a very customer focused in terms of where the customer needs it and where customer is growing. Our discussions with customers have reflected that they want to control the net supplies, they have enough resources, they want to do it themselves.
We haven’t seen from our perspective the lens that we go with. We haven’t seen much need and desire actually for customers to really partner with us on that space. The customers that we work with and in the capabilities that we have invested in, whether it’s the small molecule CDMO, whether it’s Oligo or the ADC.
We see a lot of potential to really grow, a lot of pipeline discussions, a lot of early stage discussions that can move to advanced stages. So we want to remain focused immediately in those spaces and then penetrate deep and expand and extend our relationship with customers. Right now we’re not looking any mad capabilities to acquire.
Dhawal Khut
Okay, thank you. Few more questions. I’ll probably join the queue.
Operator
Thank you. Participants to join the question queue you may press star and one next question is from the line of Harith Ahamed from Avendus Spark. Please go ahead.
Harith Mohammed
Good evening. Thanks for the opportunity. My first question is on the talking which you alluded to. Is this specific to particular product or one or two products or are you referring to a destocking situation which is more general across the portfolio.
Himanshu Agarwal
So Harith, this is Himanshu. So the destocking that you referred to is specific to few products. It’s actually I think we had mentioned it earlier as well just mentioned to its related to two large commercial molecules that we are experiencing the destocking right now.
Harith Mohammed
Got it. And the second one is on this new expansion that you announced at Nacharam facility for oligonucleotides. So just trying to understand how exactly this expansion enhances our offering. On the oligo side, you know what exactly are we capable of supplying now versus what will be enhanced capability going forward post the expansion?
Prasada Raju V
Harith, Prasada here. Our starting point of oligo is predominantly a research driven and the important requirement for us is abilities to have CGMP capabilities. That’s where we have started looking at it. We also have mapped what would be the potential sub segment of these modalities where needs immediate scale up based on the customer interest.
And we have figured out nucleosides is one modality sub segment. They are looking for log nucleic acid. Not many companies in the world can actually make it to the extent of purity what we make. These are all the few decision drivers which have actually triggered for creating a GMP capability. And we are pretty sure with the customer interest what we have received, we should definitely be able to expand our R&D capability to a CGMP level of manufacturing.
After then there is also a logical extension and we have clearly laid down our internal thinking process as well. These are first step of our business progression and once we lock in some of the customers we also have a further capacity expansion to make the final oligon nucleotide at scale.
So this is a broad plan that we have which cannot happen unless you have a multi-kilo level CGMP manufacturing capabilities. Last but not least, it is also important to understand these capabilities have to exist in a regulatory approved plant. This particular block is coming in in a US FDA approved site. So which gives the comfort for the innovative companies to come and qualify us. I hope this answers your question, Harith.
Harith Mohammed
Yes sir, that’s helpful. And the last one is on the expansion at NJ Bio. So your release talks about, you know, process expansion, supplying phase one to 22 quantities. But when I look at our payload capabilities, we already supply commercial at commercial scale. So how should we think about our, you know, further enhancing our bioconjugation capabilities to commercial scale?
Vivek Sharma
So Harith, you know, at NJ Bio, as we move, we are adding capacity on conjugation suites as part of acquisition of NJ Bio, we also have facility available very close to Princeton and NJ Bio which can be converted at a very fast pace to build commercial capability. We have and as customer progresses, as I said, we are investing behind customer.
As customer makes progress on the molybdenum that therefore we can convert this facility, especially as semi built facility that is already ready in a pharma park with lot of basic infrastructure, the time to make this existing site to a commercial is very fast. However, we are investing where the customer needed and with this customer that we are working and others that we are talking to as the molecule progresses from the stage that we are working, if we see the need, we have plans ready that we can very quickly expand into commercial capability and then work accordingly.
Right now our focus is to really finish this site quickly and then take the molecules forward and deliver on what we had and see the results and then accordingly invest capital behind customer growth.
Harith Mohammed
Understood. Sir, thanks for taking my questions.
Operator
Thank you. Next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead.
Shyam Srinivasan
Yeah, good evening. Thank you for taking my question. I’m on the road so just there with some background noise, but this one question was on the 1Q performance and related to what the fiscal 26 outlook is. Sir, margins have come in lower. I mean even if you adjust for the one off expenses 23, 24% we have guided for a low 30% kind of margin.
So what this is the confidence. You also mentioned about these destocking. I presume it’s in TDM or. Sorry I missed some of your opening comments but just want to understand how should the rest of the quarters pan out and what gives us the confidence that the guidance for fiscal 26 remains intact?
Himanshu Agarwal
So this is Himanshu, as mentioned during the call, we have reiterated our guidance both for FY26 and more importantly for the FY30 or $2,301 billion. So we remain committed to delivering the $1 billion or $85 billion INR in 2030. If you notice, we’ve kind of carved out the impact of the destocking molecules.
And as we know that CDMO business has these peaks and troughs and we had called out that there are two commercial molecules where we are experiencing destructing. If you isolate that and if you peel the light, that pharmacvmo has grown at around 30% and all three engines are actually firing. Because you look at specchem it’s going at 28%, API is going at 90%.
So while we have always maintained that this is a business which we should not look at quarter to quarter and that’s what I will stay firm with you as well. We should not interpret anything from a quarter to quarter business. I think the most important thing that we also called out during the quarter is the contribution coming from the niche technologies.
We have mentioned that the niche technology share of the total revenue has steadily grown from mid-teens in last year to early twenties and we’re expecting it to be mid-twenties as we enter FY26. I think that should also give us confidence of how the niche technologies which is where we are building a platform and we’re calling that out very categorically for 2030. So I believe that we remain firm on our 2030 guidance of a billion dollar as well as mid EBITDA which we have called out.
Shyam Srinivasan
Himanshu. Thank you for that, but I was more looking at 26 only. So if you could just rehash and tell us what the current year guidance only is because maybe there are some confusion here on the previous call. So what are we calling for organic growth for fiscal 26 full year and what is the margin level that we’re expecting to full year fiscal 2016?
Himanshu Agarwal
So Shyam, I think it’s important and I think thank you for this question because it helps me clarify our position very clearly. So see for us the organic and inorganic are two sides of the same coin. It’s about capital allocation and I think what we as an organization, we do believe we have created this platform in the last five, five and a half years based on a mix of organic and inorganic.
So that’s the way we have been and we do believe that we have the secret sauce of integrating first finding out, leveraging those assets, buying them and then integrating to create a niche technology platform. That’s what we’ve been doing. So for us inorganic growth is a core part of our thesis and you will see that we continue to add value additive high quality businesses.
I think we should consider this as an appropriate use of our capital to acquire capabilities, geographical presences as well as customer versus other organic model of doing capex and building the same over a Longer period of time. For us, inorganic is a way to scale up business and ultimately the investment in capex will yield the right results for us.
So I would urge you guys to kind of think about it in the way we look at and not separating it as an organic or inorganic. It’s just a capital allocation philosophy and maybe our philosophy may be slightly different in the way we run our business.
Shyam Srinivasan
Thank you. I’ve not got the answer, but I’ll take it off now.
Operator
Thank you. Before we move to the next question, a reminder to the participants to ask a question. You may press star and one next question is from the line of Abdulkader Puranwala from ICICI Securities. Please go ahead.
Abdulkader Puranwala
Yeah, hi sir. Thank you for the opportunity. So my first question is with regards to the opening remarks on, you know, your interaction with the Japanese customer. So where are we in this discussion now? And you know, do we have any visibility of certain onboarding of certain brands or certain new projects coming in in the near term? Hello. Was I audible?
Vivek Sharma
Yes, thank you. You were audible. Thank you so much for your question. Listen, our relationship is very strong. We are heavily committed to that part of the world. We have a full time, very experienced, dedicated resource just for the CDMO business in addition to the Oligo resources and actually all different parts of the businesses that we have all three engines actually that’s a very unique thing. CDMO, API, Specialty, Chem, ADC and Oligo.
All five of them are seeing traction from Japan area. This recent trip that I did, we met with a lot of existing customers and a lot of new customers along with actually Dr. Naresh. Also we met with some very large innovators. Very exciting meetings, happy to share. Dr. Naresh is actually going back again because customers want to see him and discuss the most important thing.
So in addition to existing relationship, we have actually onboarded a new customer which I talked about in my opening remarks. It is also from Japan on a CDMO that’s a commercial molecule. That transfer is going on, that is scaling and we expect it to reach its full potential, at least based on our prediction, the next year, year and a half time frame. So that’s happening on its back. Actually we have onboarded Japanese customer last quarter and we are doing very early phase work with them and that’s looking very, very promising.
So we have multiple relationship with Japan. We continue to invest time and I am personally committed to see a lot of growth coming from that area. The relationship with customers is very strong and we are excited, I think with the Potential with existing products with same customers, with new products, with the same customers and the new customer pipeline that we are developing in that area.
Abdulkader Puranwala
Got it sir, just one more on your API business. So how does this fit into the entire scheme of things? When we are approaching innovators and at the same time we have this generic business, what is the perception that the innovators would have? You know, when we are into a generic kind of a business for our business model.
Vivek Sharma
I’ll let Dr. Prasad answer that. I have my own views but let Dr. Prasad answer.
Prasada Raju V
I’ll be happy. Thank you for this question. To clarify ourselves, the very fact that we have defined our thesis for API is not to compete with the innovative companies on paragraph 4 filings. It is more of a matured product with a deeper cost leadership position whereby securing global capacity where we can gain a market leadership position.
Those are all the products that we always play. On the contrary, you must have followed our commentary in the early part of our con call where we mentioned one of the branded products was qualified by the innovator company which API belongs to them. So what it implies is we become lifecycle management solution providers for the innovative companies for their mature molecules.
In fact, it actually complements our strategy of CDMO by complementing our overall skill set about API. As you understand, the skill set and the regulatory environment that is required for making intermediate to API is completely different. So we have that unique competency and that complements and propels the growth of both the engines of CDMO as well as API Plus.
Vivek, you want to add?
Vivek Sharma
No, I think you complement. So we are seeing good traction, in addition to the one that Dr. Prasada talked about. I actually had a discussion with a different customer recently and they were looking at different businesses and when they took us our products they were very excited and they immediately started inquiring about two APIs that we do because they are securing it from a very high cost area.
And the immediate inquiry was can we work with you guys? So I personally see it’s very complementary. It’s helping our customers and the innovators actually optimize their costs and accelerate the hp. Then you will have alternate sources in certain places.
Abdulkader Puranwala
Got it. And so one final one if I may. So your capacity expansion at NJ and Sapala, so when does that come on board? And you know when you talk about the niche specialties scaling up to say 25%, is that going to be driven by the new capacities for your building up?
Vivek Sharma
So the extension of oligo sites at our natural site is Actually in late stages of construction we expect validation and other things to happen next quarter. And I think by the end of this calendar year we should have it live. We are actually already having some active discussions with customers to really bring some products there.
ADC site the work has already started and the timeline for that could be early calendar, next year somewhere. That time frame a lot depends on I think some of the other factors there. But we are aggressively pursuing and trying to push the contractors to finish it before the end of this career.
So we should see some traction this year. Our hope is that on both of them we are having active discussions. We should see sign up some contracts but next year we’ll see full-fledged impact of those sites.
Abdulkader Puranwala
Thank you for answering my questions.
Operator
Thank you. Next question is from the line of Chirag Shah from White Pine Investment Management. Please go ahead.
Chirag Shah
Yeah, thanks for the opportunity. The first question I have is this one-time expenses that we have, when can we expect them to not appear in P&L? Because yeah, the way I look at it, the more we do M&A and more this one time we keep on coming with. So if you can throw some light on this one-time expenses that you classify. Is this the last year assuming there are no further M&A or is there a large fault? That’s one because that’s a significant part of our EBITDA bridge. That’s why I’m asking.
Himanshu Agarwal
So Chirag Himanshu this side. So for us what we do is we classify the non-operating related expenditure into the one-time expenses. Okay. So I mean the nature of business is such that we have an employee ESOPs and that we categorize as one-time expenses or these appear as whatever you wish to call them. These are the adjustments that appear there for us in the current quarter we also incurred certain professional and legal services which is associated with talent acquisition and contractual compliances.
Now these are actually part of our ongoing commitment to secure top talent and protecting companies intellectual property as well as company positions. In auditor’s view this was considered as a one-time expenses and it was classified as such. So that’s what they are pertaining to this quarter. I think it’s very difficult for me to answer question about when they can disappear. I mean I would be as interested as you that they disappear. But that’s the current nature of the business.
Chirag Shah
No, because in ’24 we had reasonable amount, in ’25 we had a reasonable amount of one time. And your EBITDA bridge really changes simply because of this number. I understand forex is a different thing altogether and I appreciate that so that’s one second is second question again just again coming back to S26 outlook.
The way to look at this is there has to be a significant ramp up in H2 CBMO for us to have a 30 kind of margin given way that Q1 had split out. Is the is this the right understanding or assumption for us to be closer to 30 margin? H2 has to be a significant ramp up in pharmacy GMO and the related question is this 30% adjusted growth in pharmacy when you called out any indication from customer by when this inventory destocking will get over or like what age they are because that…
Himanshu Agarwal
So Chirag I think two points. One we have reiterated our guidance for FY26. Number two we’ve commented that we are a long term business. We are investing in the business to deliver a $1 billion by 20, 30 and mid-30s EBITDA. I think that’s the guidance we would want you to look into and consider.
No problem. As far as these talking is concerned. Allow me to finish my second part of your question. As far as destocking of the commercial molecule is concerned, we had mentioned that it is a year phenomenon at quarter one it is very difficult for the customer to share any appreciation more than what they have shared at this stage.
Chirag Shah
Okay, thank you very much.
Operator
Thank you. Next question is from the line of Vivek Agrawal from Citigroup. Please go ahead.
Vivek Agrawal
Thanks for the question. In the opening comments you talked about the KPI branded product. It would be helpful if you can show some more light on what kind of the product it is. So what’s the overall market size at innovator level and when you can commercialize this product?
Cyndrella Carvalho
Vivek, can you please repeat the question?
Vivek Agrawal
Yeah, so the question is related to API supply contract that you got for a branded product you have mentioned in the opening demand. So just want to understand what kind of the product it is and what the overall market size of that product at an innovative level and from your end when you can commercialize that product. Thank you.
Prasada Raju V
Thank you for the question. It’s a commercial product for us and which we are not making for customer. Based on our experience of making this product with long term stability and our proven track record customers actually qualified us which enables us to increase our market share from what it is now to a substantial level at this stage we can share up to this extent we will definitely be the dominant market player for this particular product. With this new addition of the innovator as a life management solution, one of the largest in the group for this molecule.
Vivek Agrawal
Okay, so this product is already commercialized by the innovators in the market actually?
Prasada Raju V
It’s already commercial for the innovative innovators and they have been sourcing from one of the European counterpart because of their strategic change. They are looking for a long term sustainable partner outside of Europe. That’s how it’s a long process. It took almost six quarters time to reach the stage what we are talking about. Otherwise it’s the fully, fully commercial product for the innovator under their own hand.
Vivek Agrawal
Understood. And what would be the overall market size of the product at an innovator level?
Prasada Raju V
It’s difficult to put that number attached to it right now.
Vivek Agrawal
No problem at all. Just one more question around this topping. It’s quite common in the stadium of business side. So is it possible for you to highlight what is the reason for the deep stocking by the innovator and is it possible you can see some kind of ramp up in the coming quarters from this, from these couple of molecules?
Himanshu Agarwal
I think it’s a customer specific point which is there. I’m assuming that it would be a function of many subjects including inventory management and the commercial demand from their side.
Vivek Agrawal
And if you support these two products, whatever supplies that you made in this particular quarter, so these are likely to remain similar for the rest of the rest of the year. Is it the right way to look at.
Himanshu Agarwal
Sorry Vivek, your voice is not clear for us. Could you please repeat the question?
Vivek Agrawal
No problem, I will take it from Cyndrella. Thank you.
Vivek Sharma
Thanks.
Operator
Thank you. Next question is from the line of Dhawal Khut from Jefferies. Please go ahead.
Dhawal Khut
Hi, thanks for taking my question. So under 2030 guidance which is billion dollar, how much you think you know the current platform can get you up to very, very, very bypass. Because let’s say you know, in fiscal 25 we were at almost 335 million and we need to reach a billion. So that’s almost cap of 660 million. So how much of this delta can the current platform bridge?
Very, very. I won’t hold on to those numbers because I know it’s early days but you think like you know, 80, 90% of it is achievable by the current capabilities. You just need to invest into the capacities and maybe you know, inch up under capability curve or you think there are big missing gaps and the current platform can get maybe 50, 60% of it and there are other, you know, capability that you need to really get into the market and post that you’ll probably be able to get into the rest of the Delta of this 2030 guidance.
Himanshu Agarwal
Honestly, you know, we could go for an hour on this particular subject. I mean obviously for us as an organization there is very deep work that has been done before. We have articulated this. I’m genuinely struggling as to where to start and where to end.
The answer to this question, let me give you a pointer. One of the reason we called out the niche tech and the share of revenue is for the very reason for the investors to appreciate and understand how we’ve been investing behind niche tech and how that share of revenue is growing. If I mention what we have articulated, we were at mid-teens in FY25, we increased the share of revenue to early 20s and we’re guiding to mid-20s in niche tech.
And if you look at some of the earlier material we have shared, NICHD is slated to grow upwards of 22 to 25% in the market and we believe that we can get a dominant share there. So I would like to end it here because I think this is a subject where we could spend a lot of time working together on this and helping you relate to the entire strategic direction of the company.
Dhawal Khut
Got it. And secondly, from a tariff standpoint, how does the math work on the Spectrum Act Chem? Is it exposed to us or you think the exposure to us is extremely low and that’s not really an area to be looked into.
Himanshu Agarwal
So our supplies in ag chem are 2 lakh rand so we are not exposed to us in the spec chem on the oiled piece our customer is specifically willing to pick up the tariff if and when the tariff were to get implemented. So we are not having an exposure on either of the two segments on the tariff side.
Dhawal Khut
This is helpful just a few bit on the bookkeeping side. So what was the reason for other income and how do you see that going forward? And secondly on ESOP charges till what year do you expect them to hit our P&L? And what could be the ballpark quantum? Will it be sort of a starting number next two, three years?
Himanshu Agarwal
So ESOP charges is not a static number. I think it has been variable in FY 25 versus 25. We’ve been, in all fairness we’ve been waiting for completion of the merger. There will be further ESOPs which have to be granted and hence the charge will increase on the ESOP.
Dhawal Khut
Okay, so what kind of charge are we expecting for 26? Any expectation for 27 as well?
Himanshu Agarwal
No, it’s too early. I have to work with our HR colleagues. I don’t have visibility to share with you at this stage. Please allow me sometime.
Dhawal Khut
Yeah, sure. No issue. And on other income, how do we see that shaping up into next few quarters and for the year? Because from a QAQ standpoint, there is a significant fall. Was a payment for some of the acquisition done in 4Q or is there something else? Is it the income? Something else?
Himanshu Agarwal
No, no. I think we need to. Okay. A majority part of the other income was the treasury related income which was invested when we acquired the assets of NJ Bio and Sapala. So that’s what has led to the decline in the other income, apart from other minor elements of it.
Dhawal Khut
Got it. So this is the sort of number that we can look forward to in next few quarters, is that right understanding?
Himanshu Agarwal
You will have to really excuse me for these kind of questions. The cash balance will determine the other income. Right. Reporting healthy cashes. Cash in the balance sheet.
Dhawal Khut
No problem. No problem. Okay. And lastly, wanted to understand the math behind.
Operator
Sorry to interrupt, Mr. Dhawal. We will take that as a last question due to time constraints. Thank you. Thank you, ladies and gentlemen. We will take that as the last question for the day. I would now like to hand the conference over to the management for the closing comments.
Cyndrella Carvalho
Thank you everyone. We look forward to our next call. Thanks for your time and joining us.
Vivek Sharma
Thank you.
Prasada Raju V
Thank you, all of you.
Operator
Thank you, sir. On behalf of Cohen’s Life Sciences Limited. That concludes this conference. Thank you all for joining us. And you may now disconnect your lines.