Tarsons Products Limited (NSE: TARSONS) Q3 2025 Earnings Call dated Feb. 17, 2025
Corporate Participants:
Aryan Sehgal — Promoter and Whole-Time Director
Santosh Kumar Agarwal — Chief Financial Officer
Analysts:
Samarth Agrawal — Analyst
Jatin Chawla — Analyst
Jasdeep Walia — Analyst
Koteeswaran R — Analyst
Raman KV — Analyst
Shubham Thorat — Analyst
Ridhima Goyal — Analyst
Aditya — Analyst
Madhur Rathi — Analyst
Presentation:
Operator
Hello, ladies and gentlemen, good day, and welcome to Products Limited Q3 FY ’25 Earnings Call hosted by Ambit Capital Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference call is being recorded. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements do not guarantee the future performance of the company and it may involve risks and uncertainties that are difficult to predict. Thank you.
I now hand the conference over to Mr Samarth Agrawal from Ambit Capital. Thank you, and over to you.
Samarth Agrawal — Analyst
Thank you. Good afternoon, everyone. On behalf of Ambit Capital, I welcome you all to Products 3Q FY ’25 Earnings conference call. From the management today, we have Mr Aryan Sehgal, Promoter and Whole-Time Director; and Mr Santosh Agarwal, the CFO. Now without further ado, I would now request to start with his opening remarks, post which we can open the floor for Q&A. Thanks, and over to you, Ariel.
Aryan Sehgal — Promoter and Whole-Time Director
Thank you. Good morning. Thanks. Good afternoon, everyone. I’m delighted to welcome you to Tarson’s Products Limited earnings conference call for the 3rd-quarter and nine months ended December 31st 2000 yes, sir. Can you go-ahead, please? Yeah. And joining me on today’s call are Mr Agarwal, CFO for Tarsons, along with SGA, our Investor Relation Advisors. We have uploaded our quarterly investor presentation to the stock exchanges and the company’s website, and I hope everyone had the chance to review it. We have achieved robust financial performance surpassing industry growth. This success is driven by our strong brand equity, extensive distribution network and unwavering commitment to quality.
For the 3rd-quarter, our standalone revenues reached INR76.2 crores compared to INR61.8 crores in the 3rd-quarter last year, resulting in a growth of 23.3% year-over-year, fueled by strong demand in both the domestic and international markets and across key product categories. Additionally, for the nine months ended 31st December 2024, our total revenue amounted to INR221 crores, reflecting a 16% year-over-year increase, showcasing our ongoing efforts to strengthen our market position and leadership our performance over the quarters demonstrates a steady recovery in-demand, enhancing our confidence in sustained growth for the years ahead. The lab industry continues to present significant opportunities with demand remaining robust due to increasing research activities in the life science, biotechnology and healthcare. Furthermore, the ongoing expansion in testing and research applications is driving the need for high-quality lab consumer goods.
Additionally, the focused emphasis on molecular biology and genetic research is fueling long-term demand for Labware products. Tarsens is well-positioned to capitalize on this opportunity with its diverse product range and trusted brand across markets. The global plastic lab bear industry is valued at approximately INR50,000 crores and we currently represent only a small portion of this market. This presents a significant opportunity for us to expand our reach and tap into unexplored markets, ultimately increasing our revenue and profitability. We are actively seeking ways to enhance our international presence, aiming to boost our overall overseas revenue. To support this, we have been actively participating in various international trade fairs to better understand the need of potential customers and target new regions. These events provide us with a valuable platform to showcase the range, durability, variety and exceptional quality of our products to prospective clients.
Additionally, we are strengthening our distribution network in international markets to solidify our foothold in these regions. With the addition of the new cell culture and bioprocess product portfolio, we are well-positioned to serve a broader audience while maintaining our cost competitiveness. We remain optimistic about the positive engagement and new inquiries generated through these exhibitions. Although the order conversion may take time, these interactions have produced valuable leads that we believe will contribute to our long-term business growth. During the 3rd-quarter, our exports have also shown impressive growth of 50.4% year-on-year at a standalone level. This reflects positive momentum, indicative of industry revival and reinforces our confidence in our potential for future growth on account of extensive product profile and strong brand. Our facility is progressing as planned and we have commenced commercial production for certain products with full ramp-up of the facility anticipated in the first-half of the next fiscal year. This expansion enables us to meet rising demand while enhancing cost efficiencies.
We remain focused on automation and process optimization to improve product scalability and uphold our high-quality standards. As we ramp-up the Parshla plant, we also expect a quicker absorption of the fixed costs resulting in improved operating margins moving forward. The new facility will strengthen our capacity to engage in large RFQs, broadening our customer-base in both the domestic and overseas markets. Looking ahead, we remain committed to our strategy of expanding our footprint in domestic market by acquiring new clients, launching new products and increasing revenue-share among existing customers. Exploring opportunities to strengthen our presence in the overseas market through branded and ODM sales, enhancing profitability by increasing automation and improving operational efficiencies.
With this, I now request Santorsh for his comments on the financial highlights.
Santosh Kumar Agarwal — Chief Financial Officer
Thanks. Good afternoon, everyone, and a very warm welcome to our Q3 and Nine-Month FY ’25 earnings calls. On a quarterly basis, the standalone revenue from operation for Q3 FY ’25 reached INR76.2 crore, reflecting a 23.3% increase year-on-year compared to INR61.8 crore in Q3 FY ’24. We are pleased to announce that this marks the highest-ever revenue recorded in-quarter three in the history of Tarsons. Our consolidated revenue from operation for Q3 FY ’25 was INR95.7 crores with revenue from Narvey for Q3 FY ’25 amounting to INR19.5 crores. On a consolidated basis, revenue from operation was INR42.6 crores, while domestic revenue was INR53 crores.
Our standalone EBITDA for Q3 FY ’25 was INR27.9 crore compared to INR22.9 crore in Q3 FY ’24. This is reflecting a growth of 21.9% year-on-year. The standalone EBITDA margin for Q3 FY ’25, we are 36.7%, down from 37% in Q3 FY ’24, a decrease of 30 basis-points. Our consolidated EBITDA for Q3 FY ’25 was INR29.6 crores with EBITDA margin of 31%. The margin at a consol level are lower due to NBF being a trading entity with a lower-margin profile. The standalone profit-after-tax for Q3 FY ’25 was INR7.6 crores with a PAT margin of 10%, while consolidated profit-after-tax for Q3 FY ’25 was INR5.3 crores with a PAT margin of 5.5%. Year, the decline in PAT margin for Q3 FY ’25 was primarily due to a higher depreciation charge resulting from capitalization of asset at a Pachala plant. In Q3 FY ’25, total depreciation for was INR5.5 crore against which revenue will begin to materialize in the following quarter. The standalone cash PAT for Q3 FY ’25 was INR23.2 crores compared to INR210.1 crore in Q3 FY ’24. This is marking a growth of 15.4% year-on-year. When we talk about a nine-month basis result, the standalone revenue from operation for Nine-Month FY ’25 reached to INR221.1 crore, reflecting 15% year-on-year compared to INR90.7 crore in Nine-Month FY ’24. This marks the highest Nine-Month revenue ever achieved by. Our consolidated revenue from operation for nine months FY ’25 amounted to INR79.7 crores. Revenue from Naray for nine months FY ’25 was INR58.5 crores consolidated from 1st January 2024. For nine months FY ’25, on a consol basis, revenue from overseas was INR131.5 crore, while domestic revenue stood at INR148.2 crores.
Our standalone adjusted EBITDA for Nine-Month FY ’25 was INR77.7 crores compared to 72.4 crore in Nine-Month FY ’24. The standalone adjusted EBITDA margin for nine months FY ’25 was 35.2%. The standalone PAT for Nine-Month FY ’25 was INR27 crores with a PAT margin of 12.2%, while consoled PAT for Nine-Month FY ’25 was INR19.6 crores with a PAT margin of 7%. The standalone PAT margin for Q3 FY ’25 declined primarily due to higher depreciation charge resulting from capitalization of asset at Panchila plant. Total standalone depreciation for nine months FY ’25 was INR36.5 crores, out of which depreciation for — partial accounted for INR8.32 crore, against which revenue are expected to in subsequent quarter. As Arian already mentioned, the partial plant begin to ramp-up. We anticipate a quicker absorption of this cost leading to improved operating margin moving forward. Standalone cash PAT for Nine-Month FY ’25 was INR53.5 crore compared to INR60.5 crores as we reported in Nine-Month FY ’24, marking a growth of 4.9% year-on-year. The consol net-debt as on 31st December stands at INR277.9 crores.
With this, I would like to open the floor for Q&A.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press R&1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press R&2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles we’ll take our first question from the line of Jatin Chawla from RTL Investments. Please go-ahead.
Jatin Chawla
Yeah, hi, good afternoon. Thanks for the opportunity. My first question is, you said Panchla depreciation for this quarter was about INR5.5 crores. And now as you scale-up production, where do you see this depreciation number stabilizing on a quarterly basis once your entire capex at that plant is done.
Santosh Kumar Agarwal
So I think our depreciation number will stabilize by — by FY ’26 because some more machinery are going to be capitalized and some more machineries are already in a CV. So we think that our depreciation will be at its peak by FY ’24 — by FY ’26.
Jatin Chawla
And what would be the peak number roughly we?
Santosh Kumar Agarwal
We don’t — we don’t have the exact number on the back of our mind, but we don’t think that our depreciation number will go beyond INR60 crores.
Jatin Chawla
So total, you’re saying across all plants, the max depreciation you expect is about INR60 crores. Right. But you are already at a quarterly run-rate of INR15 crores and you are saying it will go up, then how come INR60 crores will be the max?
Santosh Kumar Agarwal
Because we are following the written-down value method. And as we move forward, the existing mechanaries will generate lower depreciation. So we think that on a yearly basis, our depreciation will be in the range of INR60 crores INR65 crore, not more than that.
Jatin Chawla
Understood. Understood. When I look at your PAT margin, ignoring the COVID phase, if you look at the pre-COVID phase, you were at about 20%, right now you are at about 10%. So in the next two, three years as the facility ramps-up, do you see a path back to that 20% PAT margin in the standalone entity?
Santosh Kumar Agarwal
Yes, we think so. The reason is that currently our PAT margin is affected by two components. One is the interest component and second one is the depreciation component. So we think that by — from FY ’27, the interest component and the depreciation component will go — go down further. And we can see our PAT margin in the range of 18% to 20% again from FY ’27 to FY ’28.
Aryan Sehgal
So if you look at our numbers, if you look at our historical numbers, COVID, the 2017, ’18, ’19 numbers was when the depreciation levels were lower, so was the interest levels. But ’13, 14 ’15 was the reverse that was — the PAT margins were lower because the interest and the depreciation levels were also high. So I think fundamentally, we should expect EBITDA to be at around 40% levels. And as we can tone down the interest levels and ensure depreciation levels, we don’t have a lot of new expansion. It should — we can look at about 40% EBITDA levels on a 40% and above EBITDA levels on a — you know on an annual basis once is stabilized.
Jatin Chawla
Got it. And you spoke about the fact that with the Panchla plant, there will be some enhanced cost efficiencies. So what sort of incremental cost efficiencies do you expect from this plant versus your existing plants?
Aryan Sehgal
What we expect is basically the plants here are more automated. So I think by the end of it, when we run these plants to pull efficiency, I think the number of people to revenue should be lower as compared to our current plants. And we are also building our radiation plants. So this facility would completely have 100% radiated products as compared to other facilities, which have some radiated and some non-radiated products. So with radiation coming in-house, I think we — at that scale, we should be able to have some cost benefits.
Jatin Chawla
Got it. Understood. I’ll go back to the queue. Thanks.
Operator
Okay. Thank you. We’ll take our next question from the line of Jasdeep Walia from Clockvine Capital. Please go-ahead.
Jasdeep Walia
Hi, sir. Thanks for taking my question. Sir, now it’s been around one year since you acquired, but in the last four quarters, we have seen flattish kind of revenue. It’s at around INR19 crores per quarter. So what is the reason why Nervay is not growing? That’s my first question.
Aryan Sehgal
So the reason is Nobay has been relatively flat, which is pretty strong performance as compared to the Labware market at this point in Europe because revenues are not really anywhere outside Europe. It’s mainly in Germany and some key countries of the European Union. So five or six major countries of EU. And if you — if you look at comparative sales data of smaller, middle-sized larger companies in Europe, things have still been declining — an improving declining trend, but a declining trend. So FY ’22 was a big decline. ’23 was a decline, but better than ’22 and ’24 was a decline as well considering the two financial years, January to December. And Nobay has been — has done pretty well on a relative basis at this point of time. And I believe that with our new facility when we inject newer products into Nobay, Nobay’s revenue should start showing good growth in the second-half of this year and moving forward beyond that.
Jasdeep Walia
Got it, sir. So have you — has your standalone exports business got some benefits out of this acquisition or as of now, there are no benefits that you can attribute to?
Aryan Sehgal
At this point, no, because we are looking to first stabilize what we are trying to build internally in the company, both these facilities, the other one is primarily just a radiation plant and storage. But both these facilities are quite large facilities in terms of capex, infrastructure spend and size for a company of our size. So at this point, we’d like to spend the next few months completely trying to stabilize and streamline what we’ve built here and then use this infrastructure to be able to build?
Jasdeep Walia
Got it, sir. Got it. And sir, can you give us some color on what has driven exports numbers for you in the last two quarters? Are these export sales on account of the business you’re getting from large brands like Avatar and some other brand you mentioned in your presentation or these are more directed towards, let’s say, small distributors who are, let’s say, white labeling your product and selling it in US and Europe.
Aryan Sehgal
It’s a mix. It’s a mix of everything actually. It’s a mix of, you know, larger distributors, smaller distributors, it’s better realizations because of the falling rupee. It’s also better shipping conditions. You know, I’ve mentioned this in our calls earlier that looking at international overseas revenue — looking at overseas revenue annually is a better indicator than quarterly, because a lot of things are out of our control. We could have a bad quarter, we could have a good quarter and that could not correlate to the kind of business what we are doing with our partners or customers at that point of time got it, sir.
Jasdeep Walia
Got it. And sir, you mentioned that your operating margins are set to increase going-forward. But I would imagine since such a large facility has been commissioned, won’t your operating expense grow for two, three more quarters and then maybe margin expansion can start reflecting in your numbers. It’s quite possible because we’ve —
Aryan Sehgal
Yeah, absolutely. I think we’ve spent nine months spending a lot of money in our current facility, in our current new facilities, which have generated no revenue, but in the last two, three months, we’ve started generating some small — very, very small minimal revenues, which are more trial runs and some commercial production and orders. But I think about we would need to because facility and the other facility already have certain fixed costs without being able to give back too much in return in terms of revenue. So it’s got fixed costs, it’s got depreciation. So it’s got cost the depreciation and has come before the revenue and that’s pretty much how it always has been with most of our newer projects. So it could be — I cannot pinpoint on a particular timeline, but definitely, I think two or 3/4 still there’s a complete ramp-up and then slowly the margins should just keep looking upwards quarter-by-quarter.
Jasdeep Walia
So I was talking more about EBITDA margins, not the PAT margin. So at EBITDA, you won’t have any —
Aryan Sehgal
Operating margins as well because today we are paying a lot of cost on a monthly basis in our new facilities without generating revenues. So that’s impacting — impacting the EBITDA or the operating margin.
Jasdeep Walia
Got it, sir. Got it. So you’ve commissioned some of the cell culture lines, I believe as —
Aryan Sehgal
No we have not commissioned any of the cell culture lines, but we’ve commissioned some of the bottles and some of the bioprocess bottle lines. Cell culture is getting commissioned as we speak, but not commercially available for now.
Jasdeep Walia
Got it. So broadly, no trials have been done for these cell culture products as of now. So first the facility will commission, you will give it — give the product for trials and then maybe commercial — absolutely. But it will take a while you know for this facility to start ramping-up.
Aryan Sehgal
See, there are different kinds of customers. Some customers are, you know, the ones who would start buying immediately and some customers would need some level of persuation, some level of documentation and some level of product validation and they need to prove that the product is good to use. So it will be a mix of, you know, short-term, medium-term and long-term customers.
Jasdeep Walia
Got it, sir. Got it. That’s all from my side, sir. Thank you.
Aryan Sehgal
Thanks.
Operator
Thank you. We’ll take our next question from the line of Koteeswaran R [Phonetic] from TrustLine Holdings. Please go-ahead.
Koteeswaran R
Hello.
Operator
Yes. Hi, go-ahead.
Koteeswaran R
Thanks for the opportunity. My first question is, when will they start shipment to some Indian manufacturing plants?
Aryan Sehgal
So once we can stabilize this facility because this facility would have a lot to offer to our overseas entity.
Koteeswaran R
Okay. So when they start exporting, how much proportion of revenue will be sourced from Indian plants?
Aryan Sehgal
Yeah. We’ll go get into a detailed analysis at that point of time. Broadly, when we bought the company, we thought that about two-thirds of the revenue could be sourced from us. But based on shipping conditions, market conditions, economy conditions, tariffs and a lot of other things, we will take a call closer to time. But at this point of time, I don’t see anything changing from the time when we have purchased it.
Koteeswaran R
Okay. Okay, sir. My last question, by when can we expect full revenue potential from the expanded capacities?
Aryan Sehgal
About three to four years from complete commissioning, which I mentioned earlier as well. 100% revenue potential of our capex.
Koteeswaran R
Okay. Thank you, sir.
Operator
Thank you. Ladies and gentlemen, to ask a question, please press R&1 on your phone now. Now we’ll take our next question from the line of Raman KB from Sequent Investments. Please go-ahead.
Raman KV
Hello, sir. Congratulations on the good result. Sir, I just wanted to know-how much revenue are we expecting from Panchla plant in FY ’26.
Aryan Sehgal
I cannot at this point of time put a number because it’s premature. We haven’t commercial — commercialized the entire plant and just of a few product lines in there. But as I said, you know, three to four years. So we expect a slow start at about 15% or the potential, then maybe 15% and then year three could be a large jump. And by four years, I think we should be exactly where you know we should achieve complete revenue potential for the capex be put in?
Raman KV
Okay, sir. And my next question is, I wanted to understand what you — why was the EBITDA margin lower in this quarter?
Aryan Sehgal
So the EBITDA margin was lower in this quarter primarily because of increased cost which the revenue could not justify whatever growth what we have achieved in standalone revenue has primarily 99% come from our existing plants, but whatever cost the company is bearing today is also bearing for this large plant, which has not really come into commercial production and commercial sale, which is a plant which is almost as big as our entire company put together. So it incurs a large amount of fixed monthly cost and that has led to a slight decline in the standalone EBITDA margin level.
Raman KV
Okay, sir. Sir, I also wanted to know what is the — at what capacity utilization does the breakeven of a new plant happen like with respect Panchla plant?
Aryan Sehgal
So since we don’t make a single-product in the plant, it’s going — would probably be making few 100 SKUs, maybe 300 to 400 SKUs. I think we would be in a better position to answer when we are completely commercialized with all the planned capex. Since it’s not one particular product-line with one particular output every month, the math is a little complicated with so many different 100 SKUs, what would be selling more than the others, so that would give us a better idea.
Raman KV
Can you give a rough range-bound estimate?
Aryan Sehgal
I think, when we start full commercialization, the fixed costs would be very, very limited. It would be more variable costs. So I don’t see beyond one and a half six quarters to seven quarters, we should achieve you know there — the cost should be completely aligned to the revenue because most of the people working in the plant would be directly aligned to the revenue achieved. There will be very little fixed-cost. At this point of time, all the costs are fixed-cost because there’s no revenue, but once it starts even at nascent stages, I don’t see, you know the cost structure should be completely aligned to the revenue in about a year, year and now.
Raman KV
Thank you.
Operator
Thank you. Thank you. We’ll take our next question from the line of Shubham Thorat from Perpetual Capital Advisors. Please go-ahead.
Shubham Thorat
Hello. Thanks for the opportunity. Am I audible?
Operator
Yes, sir. Please go-ahead.
Shubham Thorat
Sir, I just wanted to keep your thoughts on what products that is adding on the cell portfolio that’s why they might what kind of can you please note? Please? Yeah, just one. Hello, is it better now? Yes, this is better. Yeah. So I was asking what products is looking to add under tech culture and PCR portfolio and what is the TAM that you are looking at in these products and how much revenue-share can company take from that to the right?
Aryan Sehgal
So we believe that we are looking to start with the basic requirements of cell culture which are you know the lower-hanging fruit. I think it’s about cell culture vessels which are used for different you know kinds of applications. We believe that the Indian TAM is approximately 400 odd crores. Global TAM should be closer to INR6,000 crores to INR7,000 crores and our idea would be to take about 25% 30% of this TAM over the next three to four years in India and probably do the same internationally in terms of value, you know, similar to India, not 25% to 30% of INR7,000 crores.
Shubham Thorat
We are targeting 25% to 30% of Indian TAM?
Aryan Sehgal
England TAM and try to replicate the same volume or the same business size overseas. In respect to the Indian TAM, not 20 — I’m just reclarifying, not 25,000 to 30% of INR7,000 crores.
Shubham Thorat
Yeah. Got it. And sir, what kind of capex that we have done in Panchla. I mean the total capex that we have planned for Panchla, Brownfield capex. If you can give those figure separately.
Santosh Kumar Agarwal
So we already said that our total capex running capex was about INR650 crores. Out of that the CapEx was about to be including land, building and everything after capex was about to be, you know INR500 crores.
Shubham Thorat
Got it. And what kind of revenue potential is there from the CapEx.
Santosh Kumar Agarwal
I think Aria already replied to that question. It depends on the — we are currently focusing on the commercial portion of the plant and then we will see what combination will arise and then only we can say that this is a maxim revenue can change it.
Aryan Sehgal
Please consider a top of about 0.75 to 0.8 on fixed asset of fixed assets. Yeah.
Shubham Thorat
And sir, I just wanted to know just a basic question, what is different in company’s standalone and consolidated business from business point-of-view? Can you repeat again, sir? Which is different in company’s standalone and consol business currently.
Santosh Kumar Agarwal
Difference between the standalone and console business, right? Right to be — so in-between standalone and console — consol entity, we have one Singapore entity that Singapore entity owns the German entity and that’s how we can do. Sir, your voice is not audible.
Shubham Thorat
That you are talking about Singapore entity?
Santosh Kumar Agarwal
Yes, Singapore, yes.
Shubham Thorat
And sir, I mean, I just wanted to know what kind of demand drivers were there that drive the standalone numbers during this quarter because you mentioned that the European demand was not there with respect to.
Santosh Kumar Agarwal
So in terms of domestic demand, we got, we got, you know good demand across the across all the end-customers we got good demand from pharma diagnostic research and then you know other IVF and other category also. So we identified that there is a good demand across.
Shubham Thorat
Do you expect this demand to sustain?
Santosh Kumar Agarwal
We hope so much.
Shubham Thorat
Okay. Yeah. Thank you so much, sir. I’ll fall-back in the queue.
Operator
Thank you. We’ll take our next question from the line of Ridhima Goyal from Acquaint Bee Ventures. Please go-ahead.
Ridhima Goyal
Hi. Hi, thank you so much for giving me the opportunity. I — as you guys have well explained about the reason for the fall in your EBITDA margins, I just wanted to know your fall in the gross margins on the standalone level. So is it because of some price decline you have taken or the change in the product mix? And if there is a change in-product mix, what kind of products have been sold more in this quarter, which led to the decline in the margins?
Aryan Sehgal
So there is a change — there is a change in-product mix, but I think it’s a combination of factors, change in-product mix, launching of new products. When you launch new products, you will try and make it more lucrative for the customer to make the change to try on new products. And I think it’s a recovery market. So it’s a recovery market where there is competitive cost pressures all across the industry as the supply was very, very-high over the last two, three years and the demand wasn’t you know, wasn’t there, the supply was way more than the demand. So it’s a mix of all three factors. I don’t think it’s a very big change in the product mix, but for us to know you know, I don’t have it at the back of my head, we sell 2,500 SKUs, but the margin mix between the consumables and reusables will also vary quite a significant bit. So if we have 75% gross margin on reusables, that doesn’t mean that all the 1,000 SKUs are at 75%, that could be a big, big, big variance in that 75% range as an example.
Santosh Kumar Agarwal
And just to add one more comment, historically also, our gross margin was in the range of 68% to 70% pre-COVID I’m talking about. During the COVID time, we sold lot of value-added products because of that the gross margin increased significantly. But if you see our gross margin of September 2024, it was 71.8%. Now also it is at 73.04%. So we believe that the gross margin will be in the range of 70% to 72%, something like that going-forward.
Ridhima Goyal
Okay. Secondly, like the — do we — have we taken any price fall just to push our products in the market or is it was the pull like the demand pull was happening like the sale was majorly because of the more demand.
Aryan Sehgal
See, the thing is, we’ve not taken as such any price falls. The market is definitely competitive and for newer products, newer geographies, we are always aggressive to get a foot in the door. So we will keep getting more-and-more aggressive with newer products as we need to fill-up larger capacities in our new facility as well?
Ridhima Goyal
I understood. And what geographies have contributed to your increase in your overseas revenue? So as you did mentioned that Germany there was no-growth or maybe you are not seeing much of the demand in the European region, right? So what all other geographies has contributed to the growth?
Aryan Sehgal
See, what I say — you know what I’m — what I meant by that was that Nurbay, which sells into a very, very small — we — for us the overseas market is about 50 60 odd countries. For, the business is spread across three to four countries. And did not have any new product launches. We have a lot of new product launches from our older facilities as well for where the capex went. So the business from Europe for us was much better on a standalone level as compared to Norway, but most of our growth came from North-America, Latin-America, Middle-East, Southeast Asia. Europe was also a contribution, but it was not the sole contribution. It was more or less a more an evened out growth from all over the world with more focus on the Americas and Southeast Asia.
Santosh Kumar Agarwal
And one major difference between and business is that is selling all the in its own brand-name, but we are also selling the brand-name of other suppliers, other customers, right? So we are — so we are getting a very good momentum in Europe and US kind of countries from a wide level product, which is not the case with us. So this is not.
Ridhima Goyal
Will it be possible for you guys to share the mix between your ODM and the branded sales indicate?
Santosh Kumar Agarwal
Currently, it is 60% over white level and 40% ODM. Branded.
Ridhima Goyal
Okay. And just one last question.
Aryan Sehgal
Overseas revenue only. That’s not domestic revenue.
Ridhima Goyal
Yeah. Yeah, yeah. Overseas. Just one last question. What would be the EBITDA margin for Norway itself in this quarter?
Santosh Kumar Agarwal
The EBITDA margin for is about to be in a 9% to 10%.
Ridhima Goyal
Will it be possible for us to increase it from here on?
Santosh Kumar Agarwal
Absolutely. If the sales will increase further, they have a gross margin in the range of 45% to 55%. So there is always a possibility to increase the EBITDA margin?
Ridhima Goyal
Okay. Till what level, like 14%, 15% or more than that?
Santosh Kumar Agarwal
Yes, something like that.
Ridhima Goyal
Okay. Yeah, thank you so much. That’s it from my side.
Operator
Thank you. And we’ll take our next question from the line of Aditya [Phonetic] from AK Investments. Please go-ahead. MR. Aditya.
Aditya
Yes. Am I audible?
Operator
Yes, please go-ahead.
Aditya
Yeah, yeah. I want to understand how much capex we have spent for Panchila and and plant is only for backward integration or will it contribute to revenue also?
Santosh Kumar Agarwal
For Panchila plant, Panchila plant and plant, we already said that we already incurred about to be between INR500 crore to INR550 crores of capex. So if you want to know the breakup in-between Patila and, so I will say that INR400 crore for and INR154 for Amta.
Aditya
And will Amta plant will contribute to revenue?
Aryan Sehgal
It has infrastructure to contribute to revenue, but in our current capex plan, it will not be contributing to revenue because we’d only be running a radiation plant and our warehouse.
Aditya
So it will help in only gross margin increment, right then.
Aryan Sehgal
Yes, yes.
Aditya
And how much more capex is pending for this Panchla or Ampta? Is totally done. This INR150 crore is.
Santosh Kumar Agarwal
So in term of payment about you know INR150 crore payment is pending.
Aditya
Payment is spending, but all the infrastructure, all the CapEx has been totally done now Panchala and Ampa.
Santosh Kumar Agarwal
So the capex in term of issuing the PO, almost everything is done. But in term of delivery, some delivery is still spending.
Aditya
So how much that is spending?
Santosh Kumar Agarwal
You mean to say delivery, delivery is about to be approx INR100 crore which.
Aditya
Delivery is static and we are expecting total commercialization in H1 of next year, right, totally, and Amtha.
Santosh Kumar Agarwal
Absolutely. We think that by FY ’26, everything should be up and running.
Aryan Sehgal
So in our — in Amta, the warehouse would be operational to use in 1/4 in about three months from now, maybe around April and the preceding months in May and June, the radiation plant would be ready.
Aditya
Okay. And you are saying that so because what I’m trying to understand is for last three to three years, we have been spending on this capacity. And from FY ’27 to 30, we are expecting that this capacity should be utilized fully, right? So by FY ’30, the company’s revenues potential or the balance sheet potential should be somewhere we can expect INR800 crore to INR1,000 crores of revenue. So that is what we are aiming for this company.
Aryan Sehgal
Correct. That’s the same.
Aditya
So INR1,000 crores by FY ’30, that is the internal?
Aryan Sehgal
No, not that. The current revenue levels, 10% more than that is the capability of the current setup and whatever capex we’ve put about INR400 odd crores, INR400 crores to INR450 crores plus the current revenue plus 10% more potential from the current revenue from the existing facilities.
Santosh Kumar Agarwal
Can we do that, this is a potential? This is not a guidance.
Aditya
Yeah, yeah. Okay. And how confident are you that Panchilla capacity utilization, you’ll be able to do it up because if we are.
Aryan Sehgal
We’ve put in this kind of money into the company and we’ve built two of the largest facilities for our company size with a lot of conviction. So I think time will say how good you know-how good we can execute this and take this through. But as a company, we had a lot of conviction to make this bold capex move.
Aditya
And next year margin — a consolidated margin I’m talking about, so there will be improvement from here year-on-year or there will be some kind of stabilization, then we’ll see an incremental margin level.
Aryan Sehgal
Definitely — definitely the operating margin should remain in similar levels, but the PAT margins definitely cannot improve because the depreciation levels will go up, the interest levels will be there. So for PAT margin, I think there would be some time before we can stabilize it. But the operating margins, I think on a standalone level, we are currently in the region of around 36-odd percent. We have the capability of increasing 5% to 5% over the next two, 2.5 years. That’s the idea.
Santosh Kumar Agarwal
I think EBITDA margin is the right parameter going-forward for next two years to understand how business is going.
Aditya
Next two to three years, can we expect the PAT margin should be around 15% or 12%.
Santosh Kumar Agarwal
See, the point is that currently in the — currently the PAT margin is down because depreciates underwriting. So going-forward, as the revenue increase and the interest cost and depreciation will go down, we are hopeful that the definitely — the PAT margin should come to the same range in-between 15% to 18%.
Aditya
Okay. Okay. Okay, sir. Thank you for answering my question. Thank you. All the best.
Operator
Thank you. Thank you. We’ll take our next question from the line of Jatin Chawla from RTL Investments. Please go-ahead.
Jatin Chawla
Yeah, hi. Thanks for allowing the follow-up. So as I understood from the plant, you are broadly targeting INR400 crores of revenues, out of which you said cell culture, INR400 crore TAM and 25% India market-share, so INR100 crore domestic and INR100 crore exports. So out of that INR400 crores broadly on-cell culture, you’re talking about INR200 crores will be cell culture. But you said this is only basic cell culture vessels. So on-cell culture, just the basic products can give you this kind of revenue or you will need to launch more advanced products going-forward?
Aryan Sehgal
No, we will have to launch more advanced products for further revenues beyond this because it’s a part of the company cycle if beyond 20 — we’ll have to have projects in-hand beyond 2000 and 2000, maybe ’28 or ’29 calendar year, we’d have to start planning for 2030 and beyond if we want the company to continuously grow because beyond the point, if we don’t launch new products, it becomes very difficult to maintain 16% 17%, 18% year-on-year growth without having new launches.
Jatin Chawla
Got it. No, no, my question was this INR200 crores is possible only with the basic products as well, right? That was what I was cycle last year.
Aryan Sehgal
Whatever, whatever. It’s possible whether I think let’s not use the term basic or advanced, it’s possible whatever capex we are undertaking.
Jatin Chawla
Understood. And you said you’ve launched some new products from your existing facility, the most. So what sort of new products have been launched?
Aryan Sehgal
We’ve done a lot of PCR products during COVID, which is a part of the INR650 crore product-line. We did a lot of deeper plates, we did screw cap tubes. We spent a lot of money expanding product lines, which we already had for which we were falling short in capacities where the demand was there. So overall, the scenario didn’t that’s the complication of having so many few 1,000 SKUs, you sometimes have to spend money when the other SKUs are not running, but certain SKUs are running very well and need more machines or more molds or more output?
Jatin Chawla
Got it. Just one last question. On Panchla, what sort of fixed monthly costs are we incurring today? Broadly, my calculation suggests that as of now, the P&L is bearing a cost of about INR5 crore on a quarterly basis. Is that rough calculation right or are the numbers very different?
Santosh Kumar Agarwal
Cost in is not like that, it’s much lower than that cost is not more than INR50 crore to INR60 lakh per month per month. Right now.
Jatin Chawla
Okay. So, okay. So that’s the fixed-cost and then INR5 crores extra depreciation. So broadly on a quarterly basis, about INR6.5 odd crores of cost is what right now the P&L is bearing because of Panchilla without much revenues.
Aryan Sehgal
It’s INR6 to INR7 crores a year. This is divided into people and overheads, energy, whatever — whatever facility requires.
Jatin Chawla
So, sorry, INR6 to INR7 crores a year or per quarter?
Aryan Sehgal
Quarter per year, INR50 lakh to INR60 lakhs a month.
Jatin Chawla
Got it. No, no, I was saying including depreciation.
Aryan Sehgal
So including depreciation, yes. Yeah.
Jatin Chawla
Got it. Got it. Thanks. Thanks a lot.
Operator
Thank you. We’ll take our next question from the line of Jasip Valia from Clockwine Capital. Please go-ahead.
Jasdeep Walia
Hello. Sir, thanks for taking my question, sir. Can you hear me?
Aryan Sehgal
Yes, yes. Absolutely.
Jasdeep Walia
So we have had two, three bad years for the globally. So how have you seen competition changing in these two years? Has the domestic competition reduced in the last two years?
Aryan Sehgal
So see, there were — the known players which were present pre-COVID are still there and I don’t think they will ever go anywhere because they’re all strong companies with solid foundations and good product portfolio, good-quality and so on. But I think the companies mushroomed are trying to you know, join — join the thing and provide opportunistic products because people needed those products and were buying anything and everything at any price, I think that we see fizzling out. But the major and minor companies which existed pre-COVID will continue to exist, which were part of the industry for years and had not come in because — you know, to cash-in on some kind of an opportunity.
Jasdeep Walia
Okay. Got it, sir. So out of your domestic competition, which all companies have significantly increased investments in the last two, three years, like what you have done, like you have more than doubled your gross lock, which other companies have been as aggressive as you.
Aryan Sehgal
I would know because we are the only listed company and all of you will get information because of these earnings calls. The rest of the companies don’t have to say all this. They keep doing things behind.
Jasdeep Walia
You will know through your industry contacts, which all companies have.
Aryan Sehgal
It’s very difficult. We focus on our business and we focus on trying to build, you know our product-line. We — our capex or our strategy is not influenced by what most of our competition is doing, but we try and react to, you know, competition in terms of price pressures, other things which come into market, but it’s very difficult to be able to start finding out what’s happening in other people’s offices or factories.
Jasdeep Walia
Got it, sir. And sir, what are the US tariffs for your product-line?
Aryan Sehgal
The US tariffs currently for exporting our product is 5.3%.
Jasdeep Walia
Okay. Got it. And what are the —
Aryan Sehgal
This was historical. So nothing has changed for now.
Jasdeep Walia
Okay. Got it. And what are the custom duties on these products if somebody wants to import in India?
Aryan Sehgal
Approximately 12% to 14%.
Jasdeep Walia
12% to 14%. Yeah. Got sir. So Chinese imports as a percentage of India market are at what percentage?
Aryan Sehgal
It’s insignificant. I don’t even think out of INR1,200 crores, it would not be more than INR20 crore INR30 crores.
Jasdeep Walia
So you’re including — so there will be some companies would be importing from India, but selling it selling in India under their own brands. So you’re including those revenues as well.
Aryan Sehgal
It’s mainly that very few companies in the plastic space because it’s so commoditized apart from the big two, three players, most of the companies try and import and sell on OEM or their own brand-name because it’s some Chinese do not have the kind of reputation where a distributor can promote the brand.
Jasdeep Walia
Got it.
Aryan Sehgal
So I request you to join back the queue, please as we have other participants waiting. Thank you. We’ll take our next question from the line of Kotish Varanal from Trustline Holdings. Please go-ahead.
Jasdeep Walia
Thanks once again for the opportunity. So how much margin are we expecting from the backward integration we are doing in Ankta?
Aryan Sehgal
At this point of time, you know, the reason we did the backward integration was because a significant portion of our revenue through our new capex was going to be sterilized. And in this part of the world where we are in and the Eastern side, there’s only one sterilization plant and it’s quite an outdated sterilization plant. So we did the capex out of risk mitigation more than cost-savings. However, doing the capex, we understand that there would be certain cost-savings associated with it, but we would be in a better position once we start running the plant.
Jasdeep Walia
Got it. Understood, sir. Thank you.
Operator
Thank you. We’ll take our next question from the line of Raman Kevi from Sequent Investments. Please go-ahead.
Raman KV
Hello, sir. So I just had a doubt. In the, you mentioned that the Panchla plant is expected to fully ramp-up by first-half of next financial year. So can — can we expect that in the second-half of FY ’25 to do half of the peak revenue peak revenue expected, which is like around INR200 crores from plants, not possible. It’s not possible.
Aryan Sehgal
We said that the — on commercialization, it would take three to four years to achieve peak revenue, not six months.
Raman KV
Okay. Okay. It will take — so can — basically, we can do INR100 crores, INR100 crore to INR150 crores 2026 from Panchla plant. Okay, because the full ramp-up will be done. I wouldn’t ramp-up.
Aryan Sehgal
Comment on that not comment on that, but I can tell you that the start will always be slow because these are new products. So you’re introducing something to a customer and the start especially be slow in overseas markets as compared to India. But as you know, year two gets better than year-one, year three will get very, very strong because that would be the inflection point is what I believe. And then beyond that would all be consolidation.
Raman KV
Okay. Okay, okay. And sir, in the previous call — in the previous quarter’s call, you mentioned that you will be setting up seven to eight cell culture production line by FY ’25 and are we in the — can I know the progress of it? Like are we — will we set-up seven to eight lines and will it contribute in revenue in coming FY ’26?
Aryan Sehgal
And obviously the capex what we have mentioned at this point of time in Pachla in the next — by the first-half of the coming fiscal year, we should completely be over with the capex, which is the plann capex, which we’ve been talking about in the range of INR600 crores to INR650 crores, which includes both the facilities. Then moving forward, whenever we see traction in whichever product lines, we might need capacity expansion and we will do it as necessary.
Raman KV
Okay.
Operator
Does that answer your question, Ramad?
Raman KV
Yes, yes.
Operator
Thank you. We’ll take our next question from the line of Madhur Rathi from Counter Cyclical Investments. Please go-ahead.
Madhur Rathi
So thank you for the opportunity. Sir, I wanted to understand regarding the Norway margins. So we mentioned that it’s around 10% currently and it can go to 14% 15%. So I’m trying to understand when we start manufacturing this at our Panchla facility. So will this 38% 40% normalized margin add-up to this 10%, 15% or it would be lower on a consolidated basis when you do in-house manufacturing for these products?
Aryan Sehgal
See, as a consolidated entity, if we are the suppliers and is you know, making the margins, we — it would not be correct to expect us to make 40% 41% here in Nobay to make 14% 15% there. The industry cannot bear 55% margins, but it would be lower. If we are manufacturing for Nurbay, the product lines, so consolidatedly should be in the region of mid to late 40s. But they would buy a lot of products from other suppliers as well and that would be standalone, 13% 14% margins. If we can double the revenue of, I think they’d be able to achieve the 40%, 50% increase in the EBITDA levels from current levels.
Madhur Rathi
And this is when we are considering two-third revenues to come from our facility and the remaining 400 65% to 70% and the —
Aryan Sehgal
There are certain products who do not manufacture certain products, which they cannot buy from India, they have to buy locally, so we would be out of out of those products.
Madhur Rathi
Okay. Okay, got it. Sir, so if I can know what is the margin difference between the export products that we sell and what would be the margin in the India branded business?
Aryan Sehgal
We couldn’t disclose that or we don’t put that out, but it’s very similar to each other.
Madhur Rathi
Got it. Sir, just a few questions from my side. Sir, on the working capital, sir, I think with a higher number of SKUs coming with the Panchla facility, sir, will our working capital cycle even deteriorate further or can we expect to improve it or at least maintain it going-forward?
Santosh Kumar Agarwal
It will be at a similar level. Currently, our working capital cycle is in the range of 195 days. It includes data stage of about 80 days, that will remain the same. Inventory days is about to be 135 days on-sales. I think going-forward, we are launching new products. So working capital cycle — cycle in terms of inventory will remain the same. We have vendor days of about 20 to 25 days because you need to pay upfront cash to import the raw-material. So that will also remains the same. So we expect the similar kind of working capital cycles going-forward?
Madhur Rathi
Okay, got it. And sir, just a bookkeep kind of question. Sir, in H1, our margins on the standalone business were very muted in like less than 30%. So why was that?
Santosh Kumar Agarwal
Which margin?
Madhur Rathi
H1 — the EBITDA margin, if I consider the operating margins in H1 of FY ’25, they were less than 30% for both the quarter. So why was that?
Santosh Kumar Agarwal
Because of one-off item which we have already disclosed in our investor presentation.
Madhur Rathi
Okay, sir, can I know what was the one-off item?
Santosh Kumar Agarwal
See, one machine got damaged and we have submitted the insurance claim for that and we have created a provision for that.
Madhur Rathi
Okay, got it. Sir, just a final question from my side. Sir, when we consider that existing players continue to exist in the market as well as the smaller players which increase the competitive intensity have reduced. So how difficult is it for us to get into a new product-line, let’s say, culture or how easier it is for the competition to enter into the line where we are excellent. So I just wanted to understand the cycle of getting into a new product and let’s say protecting our turf on that products and so on that front.
Aryan Sehgal
So it’s like most of the other industries with a little bit of know-how involved as well because building up a high-quality product which is consistent and building trust among customers is time-consuming. So I think it’s a function of perseverance and time and that’s why the — there are few good companies in India and not-so-good companies globally. So I think most of these companies have quality, consistency and they’ve been around for a long period of time trying to deliver the same thing very, very consistently and that’s how you can build some sort of customer loyalty and trust.
Madhur Rathi
So like is it easier for us to get into the — the — like although the timeline would be higher, but due to — like either due to inconsistent quality by the foreign as you mentioned that there are not two good companies out there. So will it be here for over a five-year period for us to gain a lot of market-share or a decent market-share in the global exports market?
Aryan Sehgal
Yeah. I think it’s favorable. Being in India manufacturing in India, I think it’s a good time to be at this point of time producing such products in India. And the natural advantage of our country, along with you know having a strong foundation as a company for 40 years building high-quality products and having a good set of loyal customers puts us in a good position to gain market-share from the large international market over the next few years?
Madhur Rathi
Okay, got you. And sir, for FY ’26, what kind of revenue growth as well as EBITDA margin on a consolidated basis can we expect?
Santosh Kumar Agarwal
No we don’t really give any kind of we don’t give any kind of guidance. So to the market and we don’t — we have our own target, but we don’t that.
Madhur Rathi
Okay, sir, no problem. Sir. Thank you so much and all the best.
Aryan Sehgal
Thank you.
Operator
Thank you. Ladies and gentlemen, we’ll take that as last question for today. I would now like to hand the conference over to management for closing comments. Over to you, sir.
Aryan Sehgal
Thank you all for being with us today. I trust we have answered all your questions. We are dedicated to keeping the investment community updated with regular information on our developments. For any additional information or inquiries regarding, please do not hesitate to contact us or our Investor Relation Advisors SGA. Once again, thank you for your time and support.
Operator
[Operator Closing Remarks]