Tarsons Products Limited (NSE: TARSONS) Q4 2025 Earnings Call dated May. 29, 2025
Corporate Participants:
Rohan Sehgal — Promoter and Whole Time Director
Santosh Agarwal — Chief Financial Officer
Analysts:
Devin Ryan — Analyst
Unidentified Participant
Rufa Mehta — Analyst
Sandeep Abhange — Analyst
Jasdeep Walia — Analyst
Ravi Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Q4 and FY ’25 Earnings Conference Call of Darsens Products Limited. As a reminder, all participant lines will be in a listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need a session during the conference call, please signal an operator by pressing star than zero on it phone. Please note that this conference is being recorded.
Finally, not that 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-date of this call. This statements not the guarantees of future performance of the company and it may involve risks and uncertainties that are difficult to predict. I will now hand the conference over to Mr Arian Siegel, Promoter and Whole-Time Director of Products Limited. Thank you, and over to you, sir.
Rohan Sehgal — Promoter and Whole Time Director
Thank you. Good afternoon, everybody, and a very warm welcome to the Q4 and FY ’25 earnings conference call of Tarsons Products Limited. Along with me, I’m joined by Tosh, our CFO and Compliance Officer; and SGA, our Investor Relation partners. We have uploaded our earnings presentation on the stock exchange and company’s website, and I hope everybody had an opportunity to go through the same.
Let me begin with the current industry scenario followed by our strategies and performance for Q4 and FY ’25, post which we will open the floor for questions. Over the past six to eight quarters, the plastic lab industry has experienced muted demand across key user industry segments.
While overall volumes have yet to normalize, we are encouraged by the early signs of recovery reflected in a rise in customer inquiries and RFQs. These indicators strengthen our optimism for a broader industry revival in the second-half of FY ’26. Despite the challenge during the period, we have shown strong resilience and maintained our leadership position in the domestic market.
With demand beginning to show early signs of improvement, we are strategically positioned to capture additional market-share and drive growth in both revenue and profitability. While we continue to navigate near-term headwinds, our confidence in the long-term growth potential of the plastic lab bear industry remains firm.
Throughout the industry slowdown, we have remained focused on making strategic investments to expand our capacities and capabilities. Our capital expenditure program is now in its final stages and is set to significantly boost our production capabilities. This expansion will also support the introduction of new product lines, particularly in-cell culture and bioprocess products, allowing us to nearly double our addressable market by entering segments comparable in size to our existing portfolio.
Over the years, has effectively competed against global multinational corporations, establishing and maintaining a leadership position within our core product segments. As we expand into new product categories, we are confident in our ability to replicate this success. Backed by Tarson’s strong brand equity, diverse product portfolio, strong distribution network and high focus on quality, we are well-positioned to output pace industry growth in the years to come., on the capex front, the Phase-1 of our commercial production at the new facility is already underway.
Underway and Phase-2 is on-schedule to commence operations in the second-half of the year. We anticipate that initial revenue contributions from the cell culture to begin in Q4 of this year and a full-scale revenue ramp-up in FY ’27 and ’28. This expansion enhances our ability to meet growing industry demand while improving cost-efficiency.
We remain committed to advancing automation and optimizing our processes to scale production efficiently, all while upholding the exceptional quality standards that defines the brand. Turning to our financial performance, we achieved a 7% year-on-year growth in the consolidated revenues for Q4 FY ’25.
This growth was achieved despite flat to negative trends prevailing across the broader industry. Our ability to deliver strong performance in such an environment reflects our success in gaining market-share across key product categories, both domestically as well as in the overseas markets.
Our standalone international revenue grew by 20% year-on-year in FY ’25, fueled by a focused dual strategy to expand both the Tarson’s branded portfolio as well as our OEM and ODM partnerships. We have actively participated in numerous domestic and international exhibitions, showcasing the broad product portfolio and reinforcing our commitment to consistent quality and reliable supply. The market response has been encouraging and we remain optimistic about translating the increasing number of inquiries into confirmed orders.
On the domestic front, revenues grew by 10% in FY ’25. With rising industry demand and the introduction of new product categories, thereby increasing our total addressable market, we are optimistic of maintaining a consistent and sustainable growth in our domestic business going-forward.
On our global expansion strategy, we acquired, a European company to strengthen our international presence. Leveraging established distribution network and strong market presence, we will be introducing Tarson’s manufactured products through its channels, unlocking cross-selling opportunities and optimizing capacity utilization. While The transition from third-party to in-house products will take time. We are progressing steadily, laying a strong foundation for long-term value-creation in the overseas markets. Looking ahead, we remain firmly committed to our strategic priorities, strengthening our presence in the domestic market by acquiring new customers, launching new products and SKUs and increasing wallet share among our existing customers. Expanding our international footprint by accelerating growth in the overseas market through both branded and ODM channels. Leveraging our European company as a strategic hub to deepen our reach in Europe, while replacing existing products with Tarson’s manufactured offerings to optimize capacity utilization. Driving profitability through increased automation and continuous improvements in operational efficiency. With this, I request Santosh for his comments on the financial highlights.
Santosh Agarwal — Chief Financial Officer
Good afternoon, everyone, and a very warm welcome to our Q4 and FY ’25 earnings conference call. Regarding Q4 of FY ’25, standalone revenue from operation for Q4 FY ’25 stood at INR93 crore, reflecting a year-on-year growth of 7%. Consolidated revenue from operations for Q4 FY ’25 was INR113 crores, marking an increase of 7% compared to Q4 FY ’24.
Revenue contribution from during the quarter was ’22. On a consolidated basis, export revenue stood at INR46 crores, while domestic revenue was INR66 crores, marking an increase of 12% Y-o-Y. The standalone EBITDA for Q4 FY ’25 came in INR37 crores compared to INR34 crore in Q4 FY ’25 representing a year-on-year growth of 9%. The standalone EBITDA margin for the quarter stood at 39.7%, up by 60 basis-points from 39.1% in Q4 FY ’24.
Consolidated EBITDA for Q4 ’25 — Q4 FY ’25 was INR37 crores with EBITDA margin of 32.9%. This reflects a year-on-year EBITDA growth of 22.4% with margin expansion of 420 basis-points. Lower consolidated margin are primarily due to trading focused business model, which inherently carriage a lower-margin profile.
Standalone PAT for Q4 FY ’25 stood at INR16 crores with PAT margin of 16.9%. The decline in PAT margin was primarily driven by higher depreciation expenses due to parcel capitalization at our Panchla facility, along with increased interest cost from newly-acquired debt used to fund the near complex — near complete capex. While these factors have impacted profitability in the short-term, we expect the revenue contribution from the new facility to commence in as to FY ’26.
As capacity utilization ramps-up in FY ’27. In FY ’28, we anticipate stronger cost absorption and a significant improvement in margin profile. Consolidated cash PAT for Q4 FY ’25 stood at INR30 crores compared to INR23 crore in Q4 FY ’24, registering a year-on-year growth of 34%. When we talk about the full-year basis, the standalone revenues from operation for FY ’25 stood at INR314 crore, marking a 13.3% year-on-year increase compared to INR277 crore in FY ’24.
Consol revenue from operation for FY ’25 reached at INR392 crores, revenue from for the year stood at INR78 crores. On a consolidated basis, FY ’25 revenue from overseas market was INR178 crores, while domestic revenue totaled at INR214 crore, an increase of 10% on Y-o-Y basis. The standalone adjusted EBITDA for FY ’25 was INR115 crore, up from INR106 crore in FY ’24 with EBITDA margin at a healthy level of 36.5%.
The standalone PAT for FY ’25 came in at INR43 crores with a PAT margin of 13.6%. Total standalone depreciation for FY ’25 was INR54 crore, of which INR16 crore was attributable to the facility. The revenue contribution from facility is expected to commence in the upcoming quarter. The standalone cash PAT for FY ’25 stood at INR97 crores compared to INR90 crore in FY ’24.
This reflects a year-on-year growth of 8%. The consolidated net-debt as on 31st March 2025 stands at INR303 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 questions may press R and one on the touchdown telephone. If you wish to remove yourself from question queue, you may press star and two. Participants are requested to use censors for asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles the first question is from the line of Depin Narayan from Trustline Holdings PVT. Please go-ahead.
Devin Ryan
Good afternoon, everyone, and thanks a lot for the opportunity. So firstly, if you see Indian CDMO companies as reporting strong RFP growth over past year and also the industry, lot of reports saying talking about 14% to 18% CAGR over the next few years. So are we really seeing that kind of momentum from our clients as well? And when do we foresee standalone revenues reaching higher double-digit growth trajectory? Thank you.
Rohan Sehgal
So I believe that for the second part of your question, our standalone revenues this year grew at about 13%. Historically, Tarsons has grown at a CAGR of about 17% 16% to 17%, 18% in the 16% to 18% category range. So I think we are still short by about 15-odd percent for further growth. So I believe that in the near-future, we should see similar levels of CAGR growth for Tarsens, that is our expectation. And
Operator
Ladies and gentlemen, management line has been dropped. Please stay connected till we connect to the Ladies and gentlemen, we have connected to the management line. Yes, sir, go with the ahead.
Rohan Sehgal
Yeah. So just to continue where I left, I think the CDMO business is quite encouraging and the demand and the revenue coming in from the CDMO segment in the domestic business is quite encouraging. The research and the government — semi-government business, I feel is still not at the levels where it should be and we expect stronger growth coming in the future.
So hopefully, we can be on the international segment, I think we are pretty much where we want to be on a year-on-year basis and we want to grow at these levels. But on the domestic front, I think we can you as a company, get better as the industry improves?
Devin Ryan
Okay, okay. So in the previous con-calls, management has highlighted that the depreciation expenses is peaking around INR65 crores to INR70 crores annual run-rate. Similarly, what is the kind of fixed-cost that is total expenses minus RM cost we foresee after commissioning Panchla facility fully.
Rohan Sehgal
So you mean the material margins?
Devin Ryan
No. The fix-up costs like employee costs and other expenses.
Rohan Sehgal
You are talking about the employee cost and other cost right?
Devin Ryan
Yes, yes, yes.
Rohan Sehgal
So just I wanted to give the answer for that. As we are know, expanding our capacity and we are coming up with the Pachala facility, we are coming with Amta facility, so we need to hire some key people for those facility and although in last two years, company has not grown but we have given the inflationary rise to all the employees on a yearly basis that we have to do.
So considering that, that resulted into higher employee cost. And regarding the other overhead costs, other overhead costs are also, you know go with the inflation also. In some way, we are able to control costs. In some cases we have to increase — we have to accept the increase, right? So hence, there is an increase in employee cost and there is an increase in the overhead costs.
Devin Ryan
No, sir, specific to Parkla facility getting fully commissioned over next two quarters. So do we foresee these fixed costs go going up to what level? That’s the understanding is we will appreciate.
Santosh Agarwal
See, the point is that in facility, currently, we are keeping the minimum level of employees which is required to do the commissioning and which is required to do some kind of five page one-off production. But going-forward, the additional employees, whatever comes into the facility, that will only on the basis of the productions.
So whatever minimum cost is required that we’ve already done, but going-forward, the employee cost, wages cost will be proportional and as per the production plan and as per the sales order for the facility.
Devin Ryan
Okay, got it. Got it. And finally, like we have a substantial cost advantages as compared to global players. So what are the challenges we are facing in scaling up of our exports revenue us.
Rohan Sehgal
So at this point of time, I think the international business is doing well. There are various companies available to export from the Asian belt, which includes India, South Korea, China and it is a crowded market where most of our business is focused on OEMs and in certain countries, it’s focused on branded business.
So we aren’t as established and as strong a player as we are in the domestic market and hence scaling up does take time as we get more-and-more acceptance and more-and-more trust based on our reliable quality and supply.
Devin Ryan
Okay. Okay. Thanks a lot and all the best.
Rohan Sehgal
Thank you.
Operator
Thank you. A reminder to all participants, you may press and when to ask question. The next question is from the line of Ashok Shah from Invesco Family Office. Please go-ahead.
Unidentified Participant
Hello. Hello. Thanks for allowing me questions. Sir, as our demand is slow, so still we are doing any further capex no, we are — at this point of time, we do not do any further capex.
Rohan Sehgal
We are just doing — trying to finish up the current capex what we have. The only capex what we do in addition to our capex is any project or sales-based capex or contract-based capex. So if we — from some of our key customers internationally or domestically in case we have any particular projects, which we need to develop certain product lines for which we have backed-up contracts. That’s the only capex we do, but otherwise it’s just the standard capex which is nearing completion.
Unidentified Participant
So what’s the size of the capex? Normal plant maintenance capex and special order capex.
Santosh Agarwal
So the plant maintenance and the special order corporate capex, it depends on — it depends what kind of maintenance is required in each facility, but we don’t foresee more than INR10 crores to INR15 crore of capex on maintenance and regarding the commercial capex, it depends on what kind of orders will come from customer, what kind of commitment is there from the customer. So maintenance capex would not go beyond INR10 crores 15 crore, but commercial capex depends on the orders and commitments from the customer.
Unidentified Participant
So any special order capex currently going on?
Rohan Sehgal
At this point of time, these things are a little — you know, we do not inform them to the public markets because they are sensitive in nature. We have non-disclosure agreements and so on. But from time-to-time, we are always discussing various projects with our international customers, various RFPs in which we need capacity expansions or certain new products.
So as you understand, we build 2,500 SKUs. We may have enough spare capacity in multiple SKUs, but we may lose out certain capacities where we have already near-full capacity in certain SKUs. So that may entail certain capex as well. Since the product portfolio is very diversified, it could be that product A, we have reached near capacity and there is a huge demand and we need to further install more capacity for product A. But in other products, we have enough capacity.
Unidentified Participant
So last year, what was our capacity utilization?
Rohan Sehgal
Was around 70%, 70% to 75% based on our understanding of capacity utilization because we don’t run dedicated equipment for all SKUs. So there are a lot of shared equipment, 100, 200 SKUs running over five or six equipments, not 100, 200 SKUs running over 100, 200 equipment.
Unidentified Participant
So when do we need to do expand if it reaches 80%, 85% or 90%, how it’s a question?
Rohan Sehgal
No, it’s not ever like that. It depends on the potential of the product. Sometimes a product may reach 80%, 85% and remains stable there. And sometimes there is a huge growth prospect and you can foresee at even 65% capacity that we would need a expansion soon because the product is growing at a faster rate. It all depends on which product-line and what the — how the market is perceived that product and what the growth avenues are for that product.
Unidentified Participant
Thank you. That’s all from my side.
Rohan Sehgal
Thank you.
Operator
Thank you. Thank you. A reminder to all participants, you may please start in one to ask question. The next question is from the line of Shriram, an Individual Investor. Please go-ahead.
Unidentified Participant
Thank you for the opportunity. Sir, can you please share the revenue breakup sector-wise like research institutions, diagnostics and also pharma? And my second question is, what is the potential turnover from India, the existing as well as the new ones from different facilities, I mean the existing.
Rohan Sehgal
And new facility. So in our new facility, we are yet to commercialize production on a full-scale. So we are on the final stages of that to commercialize in by the — either by the end of this quarter or the beginning of next quarter, the first stage with cell culture coming towards the end-of-the year.
And in the past, we’ve given a broad breakup where our government, semi-government account for 18% to 20% pharmaceutical account for about 30% and so on. And that’s the way we divided the industry, but we don’t disclose any breakup of our domestic revenues by customer segments. Internationally, we do not have access to that data because we sell only through distribution and not to the final customer.
Unidentified Participant
Okay, okay. Can we assume that it is the research and the government contribution will be more than 40% for the standalone?
Rohan Sehgal
No, it would be much, much lower than that less than even half of that.
Unidentified Participant
Okay. Okay. Okay. And my question on the potential turnover, what is — what is the possible turnover? I’m sure you have not commercialized, but sure you’ll be having an idea, right, with full utilization of the new facilities, what will be the maximum.
Rohan Sehgal
Turnover possible? INR350 crores to INR400 crores. Is the capacity — installed.
Unidentified Participant
Capacity, the ability to create turnover from the installed capacity?
Rohan Sehgal
This is INR350 to INR400 crores for the new ones. Yeah, incremental from the — the can be created from the incremental capacity and the incremental new products coming at our new facilities.
Unidentified Participant
Okay. So basically, we can go up to INR650 crores, right, without already at.
Rohan Sehgal
We are already at 315, right? So about — so 400 plus 315 and this facility has the ability to — our current capacity probably can go up to INR400 crores. So INR400 plus 400 crore 800 is the peak what the infrastructure at Tarsens can probably produce without further capex? Yeah.
Unidentified Participant
Great, great, sir. Thank you so much. All the best.
Rohan Sehgal
Thank you.
Operator
Thank you. The next question is from the line of Didhima Goer from Ventures. Please go-ahead.
Unidentified Participant
Hi, thank you so much for giving me the opportunity. I have two questions. First is with the new facility, what — when we can reach the optimum levels of utilization like 80%, 90% or maybe or when can we reach the 50% 60% utilization levels looking at the current optim — current scenario like the demand scenario and everything?
Rohan Sehgal
And the. Yeah. Please go-ahead.
Unidentified Participant
No, no, no, you can go in. I’ll ask the second question post that.
Rohan Sehgal
So at this point of time, the demand scenario looks a little upwards on the upward trend where we have reached the bottom and we keep getting better. So in a current scenario, I believe that 50% to 60% can be achieved in about two years and 80% to 90% in about 3.5 years to four years.
Unidentified Participant
Okay. And the margin levels, which we are at currently, can we assume that these are the normalized levels going-forward also because as Nerbi can also you know, contribute much to your consol levels going-forward. So can we assume these levels to be the normalized one?
Rohan Sehgal
So I’d take it two-ways. I take it standalone and consolidated. In consolidated, I think we’d be doing a lot of work-in Europe trying to expand in that region. So I won’t look too much into the margins there because there’d be a lot of structuring and work-in progress to be able to To build a very solid foundation for us in Europe. But for the standalone bit, I think we are around 37%, 36.5%, 37% is where we stand. There could be improvements by about 2% or 3% at peak as we are able to bring in the volumes and stabilize operation costs.
Unidentified Participant
Okay. And what about consol?
Rohan Sehgal
As I said, consolidated, there would be a lot of business which would move-in from the manufactured facilities of Tarsons into Europe as well, into our European entity as well. So it would be very difficult to be able to generate EBITDA here and generate the same level of EBITDA out there.
So we look at our European entity at this point of time to be able to consolidate and give us an avenue to really expand our revenues in a big way over the next few years in Europe.
Unidentified Participant
Okay. So what is nowadays EBITDA margins right now?
Santosh Agarwal
EBITDA margin is about to be 7% to 8%.
Unidentified Participant
About 7% to 8% and we are going to maintain these levels, right?
Santosh Agarwal
So this EBITDA level margin will increase further because they have a certain fift cost. If the sales will increase further, this EBITDA — EBITDA margin will increase versus.
Unidentified Participant
Okay, 1% or 2% could be the possibility.
Santosh Agarwal
Can you repeat your question again?
Unidentified Participant
1% or 2% increase could be possible, right?
Santosh Agarwal
It depends on the sales. It can go to even higher than 1% or 2% also because they have a matter margin of about 40% to 50%. So if the sales will increase further and fixed-cost will not increase in that proportion, then the EBITDA margin can increase further.
Unidentified Participant
Okay, understood. Thank you so much. That’s it from my side.
Rohan Sehgal
Thank you.
Operator
Thank you. A reminder to all participants, you may press star and run to ask questions. The next question is from the line of Rupa Mehta from KM Capital. Please go-ahead.
Rufa Mehta
Yeah. Hi, sir. Am I audible?
Rohan Sehgal
Yes, you are audible.
Rufa Mehta
Yeah. So my question was on the Nerbay. So I see that the current quarter — so from the past five quarters, Nerbay is generating a flattish revenue of INR20 crores. And in the current quarter, it has also not contributed anything to EBITDA and like the historical data suggests that it’s bringing down the superior margins of the standalone entity as well. So what are your plans for?
Rohan Sehgal
So our plan for is to ensure that we can, as Tarsens be able to expand into the European market and grow revenues at a pace which we’ve not been able to do without having a European entity. So when majority of our — of the European entities business comes from our manufacturing facilities, we start looking at the margin as a one whole consolidated margin rather than two entity margins.
So if the company out here makes around 36% to 38% margin, there is very little possibility that the other company, the European entity could make similar anywhere close to similar margins. So cumulatively, if we can make 36% to 38% margin here and about early double-digit margins out there, that’s what the endeavor would be and that’s the maximum what both the entities together could do once everything is integrated and everything is transferred from Tarsons to the European entity.
Rufa Mehta
Okay, so has the European entity started procuring some because I think last year it was still procuring from its original suppliers.
Rohan Sehgal
Yeah. From this — this year we will start things, so we will find initial transfer and integration starting from Q1 and it will ramp-up gradually till Q4. And then over the next year, I think we would reach a full ramp-up of what pie is today and with all the new products, which the European entity does not market, those would be new product introductions as well for the European entity.
So it would be two-ways. One would be supplying products, which they’ve never ever sold and marketed before and replacing products what they already sell and which they have a market for.
Unidentified Participant
Okay, understood. One last question is, sir, are we spending enough on advertisements and making our brand more visible and aware even for to increase our exports year.
Rohan Sehgal
So we spend on exhibitions, advertisements, not yet. We don’t really spend, although there are certain international scientific publications, but since it’s a B2B kind of a business where you’re selling to a select group of customers and not really to the entire wider audience, which is a population of a particular country. Advertisements are not really the most effective tool at this point of time. So we continue sending in emails, brochures, you know, marketing literature as well as exhibitions. That’s our marketing, you know bandwidth at this point of time.
Rufa Mehta
Okay, understood. Thank you. That’s it from my side.
Rohan Sehgal
Thank you.
Operator
Thank you. The next question is from the line of from Clockwine Capital. Please go-ahead.
Unidentified Participant
Hi, sir. Thanks for taking my question. Sir, you mentioned earlier that you are making investments at Nabe to create a solid base, which will drive your growth in Europe going-forward. So could you, you know, tell us about what kind of investments are you making at.
Rohan Sehgal
Now this investment in people, investment in structures and systems to be able to grow beyond just Germany into other European territories?
Unidentified Participant
Got it, sir. Got it. And when do we see those investments leading to much superior growth at because the turnover at has remained flat for the last four or five quarters.
Rohan Sehgal
Correct, but that’s more reflective of the situation in Europe. Europe is not — doesn’t have the best economic situation and the best economic growth. So is not Tarsens. It’s a part of Tarsens, but it’s not Tarsens because it’s not present in India and doesn’t sell from India. I think Germany, the challenge of, you know, getting people the challenge of, you know, not having enough resources, the challenge of high inflation, high-cost and the economy is pretty sluggish, especially the pharmaceutical biotechnology economy out there.
So is pretty much at par with reflective competitive companies in Europe in its scale and even beyond its scale. So it’s on a similar trend.
Unidentified Participant
So, but when do we — when does — when do we see growth at?
Rohan Sehgal
I think with — definitely with newer products going-in from, which has not marketed, we should see initial levels of growth coming. And then with geographic expansion, we should see further growth. And when the economy becomes a little more favorable in Europe, we should see more accelerated growth as well.
So there are multiple things, there are multiple avenues which will implement growth at and we are looking at all of them and trying to see how best we can integrate Tarson’s production into distribution.
Unidentified Participant
Got it, sir. And sir, what will be the peak net-debt this year?
Santosh Agarwal
So the peak net-debt I’m talking about if you talk about the standalone entity, the peak net-debt of the company will be about to be INR400 crores.
Unidentified Participant
So for FY ’26, INR400 crore will be the peak debt. And what about the consol entity? No, I’m talking about the consol entity.
Santosh Agarwal
So if you talk about the — so if you talk about the standalone entity, it will be in the range of INR300 crore to INR310 crores. But if you talk about the consol entity, I don’t think it will cross even more than INR400 crores.
Unidentified Participant
Got it. And what would be the peak — depreciation on a quarterly basis?
Santosh Agarwal
So I cannot give you any kind of guidance on the depreciation on a quarterly basis, but considering — considering the mathematics of what capex we are undergoing, what kind of capex work-in progress is here and what kind of capitalization we have — we have planned in — and we have put to huge kind of condition, we expect my FY ’26 depreciation will be in the range of, you know, 80 to INR85 crore consol because there is a dep there is a high depreciation only in the standalon standalone depreciation the depreciation is, you know, flattish.
Unidentified Participant
Got it. And sir, have you got any approvals — commercial approvals for any of the cell culture products so-far?
Rohan Sehgal
No, no cell culture approvals as of yet. No, because no cell culture samples or commercial production as of yet?
Unidentified Participant
Got it, sir. Thank you. That’s all from my side.
Operator
Thank you. The next question is from the line of Sambit from LKP Securities. Please go-ahead.
Sandeep Abhange
Yeah. So I wanted to understand what kind of product categories are currently your — in terms of best-selling products like we have consumables, we have reusables, the breakup which you have given in the presentation. So just wanted to understand which type of category products are currently doing well and what What do we expect in the future after the capex, what kind of category products will particularly do well, considering the industry in which they are present like CDMO, CRO, maybe academic institutions, etc. So if you can just throw some light on this.
Rohan Sehgal
Yeah. It will be consumable well today and I hopefully it will continue to do well. So consumables is a and the highest demanded product.
Sandeep Abhange
Okay. In consumables, if you can mention a few of the top-selling products or just to understand from the perspective and get a — I get an idea from your distributors just to understand that if you can just pension few of the products.
Rohan Sehgal
It would be liquid handling consumables, liquid handling.
Sandeep Abhange
These are the best-selling products. Yeah. Okay. And in-cell culture, sir, what kind of product categories and products, the major products you’re looking for in terms of your further growth prospects in the cell culture products? Products and like are they — like how is the competition wise, how is — where do they stand? If you can mention a few of the product name as well, that would be great.
Rohan Sehgal
So we just mentioned that we are producing healthy consumables so that’s the entire line which is used on in laboratories as well as production laboratories for various cell culture applications.
Sandeep Abhange
Okay fine. That’s it from my side. Thank you.
Rohan Sehgal
Thank you.
Operator
Thank you. A reminder to all participants, you may press turn-in one to ask questions. The next question is from the line of Naman Bansale from Nine Divas Capital. Please go-ahead.
Unidentified Participant
Hi, sir. Thank you for the opportunity. So when you spoke before about the potential in our assets to generate around INR750 crores of top-line, maybe that is on a gross block of around INR800 crores, INR900 crores going-forward. So that out to be a asset turn of less than one-time. Now in the past, we have seized 1.5, 1.6 times asset turns in the years of ’19, ’20 maybe. So where-is the disconnect here in terms of asset turn guidance remaining much lower than the earlier.
Santosh Agarwal
Just wanted to clarify that when we got listed at that point of time, we have converted from Indgap to India. At that point of time, my net — our net asset has been transferred to India as a gross asset. So whatever finances you are seeing, you are always calculating on the basis of my brought forward figure. But actually always — we always maintain — always had the asset turn this year or the in the range of 0.7 to 0.8. We never been — where the industry landscape is also seeing the same.
Unidentified Participant
Got it, got it. That is helpful. And secondly, last quarter, we had said about the provisioning to be around INR9 crores for the machine and the insurance claim that we have made. So any update on that in the insurance claim as well as what is the full-year provision that we have made?
Santosh Agarwal
So you already did the provision and the claim is under process and we are working for — working with insurance company to get the plan.
Unidentified Participant
Got it. And the new machines, when are we expecting them to be arrived?
Santosh Agarwal
Already arrived.
Unidentified Participant
All right, all right. Got it. Thank you.
Operator
Thank you. The next question is from the line from Capital. Please go-ahead.
Jasdeep Walia
Sir, in fiscal year ’26, where do you expect faster growth? Domestic business or exports?
Rohan Sehgal
International business.
Jasdeep Walia
Got it. And sir, what’s the status on tariffs to US for your company?
Rohan Sehgal
At this point of time there’s no status. It’s the same as what is it is for the rest of India. I think what the news says is that there might be some sort of a trade deal between India and US. So if that happens, we are yet to see what happens. But there is a change every day-in the tariffs. So there’s no point really tracking what really goes on.
Jasdeep Walia
So as per current news flows, the taliff is 10% on your product figure for that.
Rohan Sehgal
For the 90 days or 100 days or some period what relief what India got. So yeah, that’s what it is.
Jasdeep Walia
Got it. So on account of this news flow around tariffs where tariffs are on the — on other countries are maybe a little bit higher. I think China is your major competition and tariffs on China are proposed to be higher. Are you seeing queries of are you seeing increased RFQs from US?
Rohan Sehgal
I think at this point of time, the entire world is very unsure about the way this has been handled. It’s not been very consistent, right? News is changing on a day basis. So people are also preferring a wait-and-watch approach because they don’t know what’s going to happen tomorrow.
So while we are at an advantage in terms of tariff, as you rightly said, they don’t know what is going to happen with India 20 days later. So people are more cautious in their approach at this time rather than they don’t want a faster hasty approach or they want to make quick decisions and then have to change that 20 days later.
Jasdeep Walia
Got it, sir. Thanks, sir. That’s all from my side.
Operator
Thank you. The next question is from the line of Asmeet from Amit Capital. Please go-ahead. Yes, Mr, one the question please?
Unidentified Participant
Yeah, hi. Would you like to give some kind of guidance on the margin though — margin and revenue growth for FY ’26 and ’27?
Rohan Sehgal
No, we don’t give any guidance as such.
Unidentified Participant
Okay. And you are expecting exports to grow in FY ’26?
Rohan Sehgal
Correct? We are expecting domestic to grow as well. But as the gentleman had asked in the previous question, at this time, it looks like the exports would have a better growth than the domestic.
Unidentified Participant
Okay. Thanks a lot.
Operator
Thank you. The next question is from the line of from PNR Investments. Please go-ahead.
Unidentified Participant
Sir, given that we expect the utilization of INR750 crores to INR800 crores, will it be in FY ’29 or that is?
Rohan Sehgal
Yeah. You could consider that approximately FY ’28 over to ’29, yeah.
Unidentified Participant
Okay. At the peak utilization, will the margins be somewhere around 15% or 18% where-is it around which?
Rohan Sehgal
What 15% — what are you saying.
Unidentified Participant
15% margin when we utilize our capacity to the list, will it be the margin level will be at 15% to 18% or where-is the level-set?
Rohan Sehgal
Which kind of margin are you talking about EBITDA?
Unidentified Participant
And profit margins in the end?
Rohan Sehgal
Yeah, profit margin should be, you know, it should be around 36% 37% EBITDA less whatever depreciation, amortization and interest cost we have in the tax we pay. So it’s very difficult to have an exact calculation, but you could back-calculate based on 36% to 37% EBITDA.
Unidentified Participant
Okay, okay. I mean, if you can — I mean we — our peak profit — net profit as of now was INR100 crore INR100 crores around. Do we expect us — we expect to cross that level by ’29. or if you can.
Rohan Sehgal
Absolutely. If we are — we did about INR100 crores of net profit at INR310 crores of revenue. So at 2.5 times the revenue, it should definitely be more, if not way more than that. But at this point of time as well, our PAT is much stronger than it looks like. Like. We have a lot of depreciation and a lot of interest cost because of the growth in the company, which we didn’t have 3.5 years down the line where the company was pretty much net debt-free and didn’t have too much of depreciation at that point of time.
Unidentified Participant
Yeah, that’s understandable, sir. That is why I’m asking rather than asking for the next one, two years, I’m asking at the level when we come to the full utilization, where will be the net profit levels that you can get the depreciation levels correct.
Rohan Sehgal
You’re asking me a question in FY ’25 about FY ’29. Maybe when we are reaching INR800 crores, we are already in the midst of another INR400 crore capex to reach INR1,200 crores. So I cannot give you a pre — I cannot give you an answer for three years later where my capex situation would be right?
Unidentified Participant
Okay. Understand. And I’m asking just with the visualization — with the imagination that we come to the full potential of utilization and full.
Rohan Sehgal
So I’ll give you at the EBITDA level at 36% to 38%, which is a reasonable way of calculating irrespective of where the capital comes.
Unidentified Participant
Okay. Yeah. Understand that’s it from my side. Thank you.
Operator
Thank you. A reminder to all participants, you may press star in one to ask questions. The next question is from the line of Ravish Shah from BRS Capital. Please go-ahead.
Ravi Shah
Hi, sir. Am I audible?
Rohan Sehgal
Yes.
Ravi Shah
Hi. Sir, actually I have three questions. Sir, last quarter we had given an indication about recovery in-demand across the domestic and international markets, which sort of gave us a confidence that there will be a sustained growth momentum. However, in-quarter four, our growth has been slightly subdued. So could you share what is happening on industry front? And when can we return to our mid double-digit growth rate, which we should do?
Rohan Sehgal
No, I think it’s — would be fair to look at it on a quarter-by-quarter basis. On a year-over-year basis, I think we’ve grown at about 13-odd percent with 10% coming out-of-the Indian business. The Indian business has traditionally grown at 14-odd percent, so we are still 4% away from our the way we’ve grown over many, many years, probably 15 to 20 years. And the international business at this point of time is exactly where the growth levels would be.
But having said that, I still feel that there are opportunities for us to even get better in the international business as we have an acquired entity now in Europe and definitely make improvements on the domestic business as we add newer products and as you know, demand levels keep getting better.
Looking at it from a year-on-year basis is better because sometimes you have weaker quarter ones after a very big quarter-four. And in-quarter four, the base levels are generally higher than the other quarters. So looking at it from a quarter-by-quarter basis may not be the best way?
Ravi Shah
Understood, sir. Thank you for the detailed answer. So you already somewhat answered my second question on the geographic function, but which are the geographies we are seeing pain? And FY ’26, FY ’27, what is the outlook for the export business as a whole?
Rohan Sehgal
So see we continue to focus on-brand building in certain countries of Asia and certain countries of Latin-America and Middle-East Africa. And we try and consolidate and increase our presence, increase our penetration, add more-and-more new customers as well as grow the wallet share with existing customers on the OEM ODM business in the US and in Europe, we look to focus on our acquired entity and strategize — put our strategies in-place to be able to expand and grow at a faster pace in Europe and be able to generate revenues, which we haven’t been able to do as a standalone entity in Europe.
Ravi Shah
Understood, sir. Thank you so much. And my last question will be, sir, despite the drop-in our gross margins, we have seen an improvement in EBITDA margins Y-o-Y. So I was trying to understand will this employee expense and other expense run-rate stay similar going-forward and should we expect some increase or like how should we look at it?
Santosh Agarwal
You see the number of people in the company get added as we try to expand operations and we need to give an inflationary pay hike, you know, to most of the employees and in the company, which continues to happen. But I believe that the employee benefit expenses remain proportionate as long as the growth is there in the company and would never be beyond that.
And in the other expenses, I think as we stabilize operations in both the facilities, the other expenses as a proportion of the turnover could get slightly better.
Ravi Shah
Understood, sir. I’m not able to understand why there’s a divergence between the EBITDA margins and gross margins. That’s all.
Santosh Agarwal
So you wanted to understand the divergence in-between the gross margin and EBITDA margin?
Ravi Shah
Yes, yes.
Santosh Agarwal
See, the point is that if you see this quarter — this quarter sales, this is the highest-ever sales we reported in the — in the standalone entity and that resulted into higher gross profit. And as our fixed-cost, all the employee cost and other cost are fixed, that is — that resulted into higher EBITDA margin. So if your cost is fixed and your sales is increasing that gives you more gross profit and that result into higher EBITDA margins.
Ravi Shah
Understood, sir. Thank you, sir and all the best.
Rohan Sehgal
Thank you.
Operator
Thank you. I remind all participants a press turn one to ask questions. The next question is from the line of Meerav Atul, an Individual Investor. Please go-ahead.
Unidentified Participant
Hello. Hello, sir, am I audible?
Rohan Sehgal
Yeah. Yeah.
Unidentified Participant
So sir, in the earlier statements, you mentioned that the CDMO, domestic CDMO businesses are showing good signs, increasing signs. So just wanted to know like what — can you explain a bit about that? And are we able to like will we be able to capitalize on that opportunity or we do — we do have to take some contractual capex for the CDMO businesses?
Rohan Sehgal
So generally, we don’t have to because most of the products used in the CDMO business is, you know, present with us and present in sufficient capacities. But there are certain products which they use which we don’t have, which we don’t make, which we don’t have a plan to make, that we would not incur any kind of a contractual capex.
So generally, contractual capex is limited to businesses and products which we already do, which we already are strong in and where we are falling short of capacity, but there is enough business in the pipeline and contractually being awarded to us to be able to expand capacities.
Unidentified Participant
Okay, right. So like the domestic CDMO players are showing good growth and probably like according to what we see, like they will be able to show some good growth as well for the several years from now. So are we like winning orders from them or like have we started winning orders and are like going into advanced conversations with several of those players.
Rohan Sehgal
Yeah. So the business is not structured that way. You generally have contracts, you know, with them, which are not pre-written contracts, but there are agreements between these companies and Tarsons and various other suppliers of Labware products. And the orders are placed on weekly, monthly or basis by these companies based on whichever — whatever their ordering pattern is. So there would be spikes in the ordering. You know whenever they win new projects and the number of projects increase, but that’s how it works.
Unidentified Participant
Okay. And like have you started the culture products in like or not there?
Rohan Sehgal
No.
Unidentified Participant
Okay. Okay. That’s it from my side. Thank you.
Rohan Sehgal
Thank you.
Operator
Thank you. Ladies and gentlemen, in interest of time, we’ll take the last question from the line of Amar from Lucky Investments. Please. Please go-ahead.
Unidentified Participant
Yeah. Hi, sir. Am I audible?
Rohan Sehgal
Yes. Yeah.
Unidentified Participant
Sir, in terms of our utilization for and about the approvals from various customers, where we are in the phase-in this particular year.
Rohan Sehgal
So we don’t have any approvals from any customer as of now because we don’t have any product to give the customer testing. Once we have available commercial product, we will start giving it to customers who would be interested to test the Tarson’s line and then start taking approvals.
Unidentified Participant
So sir, according to you like by when the commercial will start and by when we can expect some commercial orders coming followed by this approval process and all those things.
Rohan Sehgal
So commercially, we would start supplying cell culture products by Q4 to customers and we expect that by then the quality level should be at par and within that quarter, we should start receiving approvals.
Unidentified Participant
Okay. And before this commercial production, I mean, what kind of expenditure we would be incurring in the cell culture facility currently?
Rohan Sehgal
Currently, in the facility, we incur about INR7 crore to INR8 crores of annual expenditure.
Unidentified Participant
Okay. And in terms of the Amta, where we were looking to do a sterilization facility, right. Is it coming or I mean, when it is going to come?
Rohan Sehgal
So the commission, the radiation plant will be commercialized and commissioned in July, end of July and we will start commercial radiation by August. The warehouse will be — the warehouse is ready, we are just getting the racking and other things done. So June first week of July, the warehouse starts and by July end the regulation plant gets commissioned.
Unidentified Participant
Okay. So it is going to start. So this will save some bit of expenditure which we are outsourcing today, right?
Rohan Sehgal
Yes, we will gain some by in-sourcing that, but that gain would come as the volumes increase because there will be a lot of start-up expenditure, which will be one-time expenditure. A pretty large startup expenditure over the first one or two months, but that would be amortized and it’s not capitalized, but moving forward, as we grow the volumes and shift all the business in-house, that would be stabilized and things would be cheaper to in-house than outsource.
Unidentified Participant
So sir, going into like now many products are going to come next year. So is the next year is going to be a better growth year than this year? I mean, how we should read.
Rohan Sehgal
So we Aspire for that. We will see because the year is just two months old with 10 months-to go, times are good and hopefully, we will be able to, you know, be able to match this year’s performance or go better?
Unidentified Participant
Okay. And as the performance improves, profitability is likely to improve or these new plants will bring new fixed-cost set. Is it something?
Rohan Sehgal
I think the new plants starting and giving revenue should start stabilizing costs because then those costs would remain with certain revenues. At this point of time, cost are there without revenues.
Unidentified Participant
Okay. And the sterilization facility, when you say large startup expenditure, what would be the quantum of that cost?
Rohan Sehgal
It’s — I don’t have a complete figure on the back of my head, but it’s about laboratory setup and other things, which are needed to be able to measure the level of radiation.
Unidentified Participant
Okay. But then it is not very significant number, right, 1% kind of revenue, 2%, I mean how it is?
Rohan Sehgal
No, it’s — it’s not 1% of revenue is INR3.5 crores. I don’t think it is that high.
Unidentified Participant
Okay, got it. Perfect, sir. Perfect. Thanks a lot.
Rohan Sehgal
Yeah. Thanks.
Operator
Thank. As was the last question for today, I now hand the conference over to the management for closing comments. Over to you, sir.
Rohan Sehgal
Sure. Thank you everybody, for joining us today. I hope we have addressed all your questions. We remain committed to keeping the investment community informed with regular updates on our development. For any further information or queries regarding, please feel free-to reach-out to us or our Investor Relation Advisor, SGA. Once again, thank you for your time and support.
Operator
Thank you. On behalf of Products Limited, that concludes this conference. Thank you for joining us and you may now disconnect our lines. Thank you