Windlas Biotech Limited (WINDLAS) Q3 FY23 Earnings Concall Transcript

Windlas Biotech Limited (NSE:WINDLAS) Q3 FY23 Earnings Concall dated Feb. 09, 2023.

Corporate Participants:

Hitesh Windlas — Managing Director

Komal Gupta — Chief Executive Officer and Chief Financial Officer

Analysts:

Ahmed Shah — AMT investment — Analyst

Nitin Agarwal — DAM capital — Analyst

Neelam Punjabi — Perpetuity Ventures LLP — Analyst

Unidentified Participant — — Analyst

Viraj Shah — Shah Investments — Analyst

Akash Mehta — CalPERS Investments — Analyst

Mr. Tiwari from Aryan — Capital Markets — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Windlas Biotech Limited, Q3 Fiscal Year 2023 earnings conference call. This conference call may contain forward-looking statements about the company, which are based on the beliefs or opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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 the Operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded.

And I’ll hand the conference over to Mr. Hitesh Windlas, Managing Director at Windlas Biotech limited, Thank you, and over to you, sir.

Hitesh Windlas — Managing Director

Thank you. Good morning, everyone. And thank you for joining us today for our financial results for quarter and nine months ended December 31 2022. We have uploaded the press release and investor presentation on our website, as well as on the exchanges. And I hope everyone has gotten an opportunity to go through it. I would like to discuss key company highlights for nine months and q3 Fiscal Year 2023, followed by financial highlight of the company which shall be shared by our now CEO and CFO, Miss Komal Gupta.

The nine month revenue for Fiscal Year 2023 was 372.4 crores up 8% from the same period in Fiscal Year 2022. Revenue in q3 of Fiscal Year 2023 expanded by 2% year on year. Growth in EBITDA margins was seen over the past nine months and quarter and stood at 11.8% and 11.7%, respectively, indicating efficient cost management and resilience against input price volatility. For the quarter as a whole, growth was strong across the verticals, with exports and trade, generic recording growth of 124% and 42% y-o-y. The growth in cdmo sector however, meant that overall growth was relatively tattered. In the second half of the calendar year of 2022 saw a third in Indian farmer market growth after a steady sluggish beginning. However, anti-impacted, especially antibiotics, where our company doesn’t have a present drove this portion of the expansion in the overall market.

Consistent efforts in cdmo sector for us, such as new beta expiry launches, wallet gain wallet share gains from existing customer acquisition of new clients and introduction of distinctive products supported by superior r&d are all initiatives and focus areas that we are working on to reenergize growth in this vertical. The government’s emphasis on quality also bodes well for future of the larger and organized players like windlas biotech in cdmo. Our injectable facility is scheduled to be finished by the end of September 2023. windlas domestic trade generic business is showing strong and consistent growth aided by the company’s rapidly growing network of distributors.

There is still a very large room for expansion and development in the trade generics market. The domestic trade generics sector in India is poised to enter a period of expansion driven primarily by external tailwinds, such as increasing consumer demand for high quality, generic and government initiatives to increase generic adoption and rely. Internal growth factors also include branding, challenge channel expansion, product introduction and regional expansion for us. Strong expansion for exports vertical this quarter can be attributed to the company’s initiatives such as filing of numerous dose years and entry into newer more regulated markets. board of directors has authorized a share buyback program to the amount or to the amount of up to 25 crores as a way to reward the company’s shareholders.

In total, three lakh 87,238 shares were repurchased by the company for rupees 9.88 crores as on 25th to January 2023. I am happy to announce Miss Komal Gupta’s appointment as The Chief Executive Officer of windlas biotech, her expertise and years of experience in the field will be invaluable to the company as it enters its next phase of expansion. In the near future, the company will announce the appointment of a new chief financial officer and Miss Komal Gupta will continue to serve as the interim CFO until the suitable candidate is appointed. windlas biotech is committed to a disciplined and prudent capital allocation policy. And we will only invest where we expect to generate the greatest return for our shareholders, while also expanding our business and building a strategic reserve for future inorganic growth opportunities. I will now request Miss Komal Gupta, our CFO, and now also our CEO, to discuss the financial performance highlights over to you, Komal.

Komal Gupta — Chief Executive Officer and Chief Financial Officer

Thank you, Hitesh. Good morning, everyone. At the outset, I would like to say that I’m grateful to Windlas biotech for giving me this opportunity. My focus would remain on creating value for our shareholders. I, along with Mr. Hitesh Windlas and Mr. Manoj Windlas will share joint responsibility and will work together in close coordination for the achievements of greater heights of success. Coming to the financial highlight for nine months Fiscal Year 2023 consolidated revenue, EBITDA and PAT grew by 8% 13% and 34% to INR332.4 crores, 43.8 crores and 31.2 crores respectively, for q3 Fiscal Year 2023. The same grew by 2% 7% and 11% 219.7, crores, 13.9 crores and 9.2 crores, respectively.

Gross margin for the quarter was 219BPS higher y-o-y and comparable EBITDA margin versus this is this higher at the quarter. The EBITDA margin increased to 11.7% from 11.1% y-o-y in q3 Fiscal Year 2023. I now take you to vertical right highlight cdmo Nine months and q3 Fiscal Year 2023 revenue for cdmo vertical stood at INR287.9 crores and INR85.9 crores 2% and down 10% y-o-y respectively psidium article contributed approximately 77% and 72% for nine months and q3 Fiscal Year 2023 respectively to the consolidated revenue. They generate nine months and q3 Fiscal Year 2023 revenue for trade generic vertical should add up INR68.4 crores and INR24 crores up 49% and 42% y-o-y respectively.

Vertical contributed approximately 18% and 20% for nine months and q3 Fiscal Year 2023 to consolidated revenue. It’s both vertical nine months and q3 Fiscal Year 2023 revenue for exports to that INR12.8 crores and INR8.4 crores up 12% and 124% y-o-y respectively, in both vertical contributed approximately 3% and 7% for nine months and q3 Fiscal Year 2023 to the [Indecipherable]. The total of 253.1 pa raised in the IPO has been allocated to various projects as described in the prospect prospectus, totaling rupees 126.2 crores. The company has already begun ordering necessary equipment for the forthcoming injectables project, which is expected to be completed by end of September 2023.

Our net cash position is robust and it has sizable cash reserves for inorganic growth opportunities, the company plans to play a significant role in market consolidation as has been repeatedly stated. That’s all from our side.

We can now begin with our Q&A session. Thank you.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Ahmed Shah from AMT investment please go ahead.

Ahmed Shah — AMT investment — Analyst

Hi, sir. Good morning, sir. I have a couple of questions. Firstly, in terms of exports market what percentage of the share comes from regulated and semi regulated market and if you can give an outlook on what will be this mix looking going forward?

Hitesh Windlas — Managing Director

Thank you, Mr. Ahmed. In Export Currently, we are mostly in you know, the low regulated markets, which is the RW markets like Vietnam, Southeast Asia and such, we have got recent approvals for South Africa, which comes in the regulated space. And there are some small inroads that we are making in CIS countries also in the semi regulated space, but I would say that largely the focus or the is weighed by the the RW markets

Ahmed Shah — AMT investment — Analyst

Okay, and just wanted to understand on the input price

Hitesh Windlas — Managing Director

Yes. So, q3 as such, we have seen, you know, some decreasing price input price volatility, so, you know, and that essentially has also helped us improve margins slightly, because, when we have lesser volatility, we have better visibility, and then we can, you know, take better calls in stocking and in purchase. So, this trend has been ongoing, and, you know, if to the extent that what we can see, we are not seeing any more you know, volatile situations as as was there in the past.

Ahmed Shah — AMT investment — Analyst

So, sir, have we taken any inventory losses on our books?

Komal Gupta — Chief Executive Officer and Chief Financial Officer

Inventory losses asset, we haven’t taken any the regular provisioning that we do after the regular accounting practice that continue as is. So, no specific losses however, then you’ll notice that there is an increase in inventory, because, you know, to manage some fluctuations in the input price, the obvious choices, where we know that this is the material that we are going to need, we have been over stocking a bit.

Ahmed Shah — AMT investment — Analyst

Understood and do we have any new products approvals and what kind of products do we have in the pipeline?

Hitesh Windlas — Managing Director

Yes, for this quarter we are getting we have got and are getting several new dcgi approvals in cardiovascular space and even in diabetes, and we continue to use these products because for every dcgi approval, you have four years of shared exclusivity. So, any other competitor who wants to also launch this product will have to also do a dcgi you know, approval process, which means that they have to do a bioequivalence or clinical trial just like we have. So, this is a shared exclusivity space and this is a space that we are investing more and more into and we are going to drive our product pipeline the cdmos space more and more through this.

Ahmed Shah — AMT investment — Analyst

And sir, lastly, what is our capex utilization for this quarter?

Hitesh Windlas — Managing Director

Sure.

Komal Gupta — Chief Executive Officer and Chief Financial Officer

Our capacity utilization for the quarter is in the range of 42.3%.

Ahmed Shah — AMT investment — Analyst

Okay, thank you. That’s it from my side.

Komal Gupta — Chief Executive Officer and Chief Financial Officer

Thank you.

Operator

Thank you. Reminder to the participants anyone who wishes to ask a question may press star and one. The next question is from the line of Nitin Agarwal from DAM capital, please go ahead.

Nitin Agarwal — DAM capital — Analyst

Thanks for taking the question. Have you gotten to launch your sacubitril valsartan during this quarter?

Hitesh Windlas — Managing Director

So, in the current quarter, that means q4 Yes, we are launching, maybe it will get shipped either today or tomorrow. But then there is there was a lot of back and forth in terms of, you know, the lawsuit between the innovator and they got a couple of stays and then those got vacated. Finally, the you know, innovator was again able to block the actual Penta hemihydrate complex. Now, the generics are going ahead with the pictures combination approach and that’s what windlas is also planning to support its customers

Nitin Agarwal — DAM capital — Analyst

And what kind of opportunity do you see this molecule having customer?

Operator

Sorry to interrupt you Mr. Agarwal, can you speak a bit louder? Because you’re not clearly audible in the call, sir.

Nitin Agarwal — DAM capital — Analyst

Give me a second Yeah, the thing how many customers would you be supplying to what kind of what kind of opportunity do you see around here?

Hitesh Windlas — Managing Director

So, Nitin. So, earlier before all the patent back and forth happened, the interest in this was extremely huge. And then some of the large when when when the innovator got the patent back reinstated, and the stay on it, so, the large customers decided to postpone and take a weighted Water Watch approach. So, my sense is that given the you know, significant price difference between innovator and what generics are going to launch at, there will be a renewed interest in more and more people will jump on the bandwagon once the product generic products come to the market. So, I, we believe that it should be a good product, but because of the patent back and forth between the High Court and the innovator, there has been some hesitancy which over time, we hope should work itself out.

Nitin Agarwal — DAM capital — Analyst

But do you see this being a relevant product for us over the next year or so?

Hitesh Windlas — Managing Director

I do.

Nitin Agarwal — DAM capital — Analyst

Okay, and biting, biting sacubitril was talking brought another how many other major key similar for larger launches, can you sort of foresee over the next year or so.

Hitesh Windlas — Managing Director

So, you know, we are typically, our pipeline is, you know, sort of built to have something like about 15 to 16 launches in the whole year. But obviously, it is all dependent on the regulator’s approval, you know, in terms of timing in terms of whether it happens during the year or not. But, you know, the, the number is, for the whole years, typically between 15-16 is what we are aiming for.

Nitin Agarwal — DAM capital — Analyst

Okay, and so just to close that, I mean, given where the see the pipeline, I mean, prima facie, is a pipeline for you attractive enough or meaningful enough for you for us to save maybe good double-digit growth in the CFO business next year.

Hitesh Windlas — Managing Director

So, growth, you know, is going to be a function of you know, new launches, like, you know, from, from this dcgi approvals present expiry molecules, it is also going to be a function of, you know, wallet share increase from existing customers and additional new customers for existing products. So, definitely, you know, the, our goal is to have significant, you know, improvement in the growth for cdmo. This is our however, there is a base effect, which comes from the volume growth in the overall IBM, if you see, you know, overall IBM growth in q2, a lot of it was from price increases and new launches where we didn’t participate. I mean, q3, and in, in volume growth, also, the– a lot of it was in the spike in November was from antibiotics. So, you know, what a quarterly basis things are harder to predict. But, as I’ve said in the past, also from an annual, you know, basis perspective, the, we want to aim for double digit growth in these verticals also.

Nitin Agarwal — DAM capital — Analyst

Okay, thanks, and lastly on the trade generics, we can probably just highlight, you know, some of the initiatives and portfolio geographical expansion and how do you see the segment over the next couple of years?

Hitesh Windlas — Managing Director

So, this is a, you know, really a very, very big opportunity, and I believe it is the opportunity for entrepreneurs, but also for the overall pharma industry as a whole. As I’ve said in the past also, if you see, you know, the, there are only about 400 to 450 Odd towns and cities in India, which have a population of more than one lakh and these are the places where, you know, doctors are there and branded generic model works very well, to have medical reps and feet on the ground.

But a huge number of people, almost 70% of India is living in villages and kasbah which are more than five and a half lakh in number, And you cannot target this market of five and a half lakh villages and kasbahs by putting feet on the ground like a medical rep module.

So, this is where the whole trade genetics you know, space is. And even in this trade genetic space people are there you know, several companies which are, you know, more than 10 times bigger than us. So, we believe that there is a very strong rationale for a quality player like Windlas to offer authentic, affordable and accessible drugs in this space. And that’s what we are doing and we are even branding ourselves at the umbrella level. You know, as an affordable, authentic and accessible generics company. So, this is where I believe we have a lot of enthusiasm in the company and we want to take this forward to for sure with more gusto.

Nitin Agarwal — DAM capital — Analyst

So, that we can–what can we see? What kind of you know growth rate you see this business over the next three years? You know, if you would just allot a guess here?

Hitesh Windlas — Managing Director

So, Nitin, you know that we are not providing guidances like that. But you know, look if you see you know, we have been growing at about you know 40-42% 47% In the past as we increase in size obviously, the growth will taper off but I believe it is possible in the long run also to grow 20-25% plus in this vertical.

Nitin Agarwal — DAM capital — Analyst

Okay, Thank you.

Operator

Thank you. [Operator Instruction] The next question is from the line of Neelam Punjabi from Perpetuity Ventures LLP. Please go ahead.

Neelam Punjabi — Perpetuity Ventures LLP — Analyst

Thanks a lot for taking my question. So my first question is on the injectables capex. We have done about INR23 crores to now. By when are we planning to do the baddest INR27 crores?

Hitesh Windlas — Managing Director

To Neelam, we, these are, the POS have already been placed and the amount is already committed. We will most likely finish off everything by March 31st. So, I mean, we will– not most likely because we are already committed in milestone payments for various purchases.

Neelam Punjabi — Perpetuity Ventures LLP — Analyst

Got it. So — [Indecipherable]

Hitesh Windlas — Managing Director

Please, go ahead.

Neelam Punjabi — Perpetuity Ventures LLP — Analyst

Yeah, so how long will it take you all to get to the year 1.3 times acetone that you had admitted in the past in this business, injected the facility?

Hitesh Windlas — Managing Director

So,the facility that we are building, Neelam, is geared towards export markets. And we believe that, you know, of course, so, there is a period of qualification and then, you know, getting the regulatory approvals for those various markets. I believe that, you know, anywhere, you know, one and a half to two years is a minimum time that new injectable facility should take to get to the athletic ratio number. Especially, because, again, we want to use this capacity more for exports, because it is a high end facility. And it is, you know, and the margin profile in exports in injectables is is far better than margin profile in domestic. So, we will have a balance over there. But my sense is that, you know, about two years is something that one should factor in for any new facility.

Neelam Punjabi — Perpetuity Ventures LLP — Analyst

Got it. That is helpful. My second question is on the export business. So, since you said that we have already received the South African regulatory approval, have we started supplying data from this quarter?

Hitesh Windlas — Managing Director

No. So we are in the final stages of finalizing the artwork and everything with our customer. In fact, just today, we have received one more approval in South Africa but so, we are in the final stages for that and we hope to, we are hoping that we should be able to commercialize in Q4 but as if not then it will go into Q1.

Neelam Punjabi — Perpetuity Ventures LLP — Analyst

Got it. What’s the growth trajectory that you’re looking at for these exports verticals? Given an FY 20 has been a bit muted, so what’s the outlook here?

Hitesh Windlas — Managing Director

So, exports vertical, since the incubation time period for export registrations is much longer. You know, on our five year, you know, aspiration over here was Forex, when we started from we were, you know, we’re still at INR20 crores roughly. So that’s where we are looking to go in about four to five-year timeframe and to about, you know, INR80 crores kind of number.

Neelam Punjabi — Perpetuity Ventures LLP — Analyst

Got it. And so on a CDMO business. Our aspiration initially was to double our business in five years. And given, you know, our growth has been pretty much muted this year, are we confident to get towards that target that we had set for ourselves during the IQ?

Hitesh Windlas — Managing Director

So, you know, I think the– we believe that, you know, there are a lot of areas of opportunity that we are exploring to bring back the growth, you know, first of all, that is very important. And if we look at in the past, also, you know, even a 10 year CAGR has been close to about 13 14% growth in that vertical. So, you know, my sense is that it should be an achievable number in the CDMO segment. You know, over three to four-year period timeframe, the CAGR. How we get there, and how we, you know, deliver to this mandate is definitely something that, we have working on, and I believe the target should still remain the same.

Neelam Punjabi — Perpetuity Ventures LLP — Analyst

Yeah, that’s very helpful. Thank you. That’s all for mine.

Hitesh Windlas — Managing Director

Thanks.

Operator

Thank you. [Operator Instruction] The next question is from the line of [Indecipherable] from KK Advisors. Please go ahead.

Unidentified Participant — — Analyst

Oh, hello. Yeah. Good morning and thank you for the opportunity. I had a couple of questions. So first, I will– [Indecipherable]

Operator

Mr. [Indecipherable]. May we request you to please speak a bit louder. We cannot hear you, sir.

Unidentified Participant — — Analyst

Hello. Am I audible now?

Operator

Yes, sir. Please go ahead.

Unidentified Participant — — Analyst

So my first question was I wanted to know, our current capacity utilization level.

Komal Gupta — Chief Executive Officer and Chief Financial Officer

Our current capacity utilization? For Quarter Three, it was about 42%.

Unidentified Participant — — Analyst

Sorry, about?

Komal Gupta — Chief Executive Officer and Chief Financial Officer

For Quarter Three, it was 42%.

Unidentified Participant — — Analyst

Okay, Okay, got it. Got it. And my second question was, are we undertaking any new capex in the near future?

Hitesh Windlas — Managing Director

So, we are currently, you know, obviously, as you know, we are focused on the injectable capex that we are working on. And we have capacity sufficient for, you know, one and a half year for our oil solid as of now. Because we know, these facilities, we can go up to a maximum of about, let’s say 65%. So, currently in the very near term, we are not but I believe is to achieve our four-year aspiration, five-year aspiration, we will need one more expanded unit one more unit to get to those numbers.

Unidentified Participant — — Analyst

Oh, Okay. Okay. Understood. So yeah, Okay, that was it. Thank you.

Operator

Thank you. [Operator Instruction] The next question is from the line of Viraj Shah from Shah Investments. Please go ahead.

Viraj Shah — Shah Investments — Analyst

Hi, sir. As you mentioned, in the previous answer, the main focus is on injectables facility. Once commercialized, how much it will be contributing significantly to our domestic CDMO business or exports?

Hitesh Windlas — Managing Director

So, we feel that you know, the asset turn on this facility of roughly around 1.2 is, you know, is in the range for most injectable facilities. We have built plant keeping, you know, even [Indecipherable] and European standards in mind. As we begin to commercialize in various markets, it will take time for those regulatory approvals and suppliers to start. My sense is that probably the mix will be initially more towards the trade generics and CDMO. And then take off for and towards the end of four years, it’ll be more towards exports and left towards CDMO.

Viraj Shah — Shah Investments — Analyst

Okay. And on the inorganic expansion fund, just wanted to understand what kind of companies are we targeting? And what kind of synergies are we expecting from them?

Hitesh Windlas — Managing Director

Sure, you know, what other companies that we looked at in in this year, actually, in the last quarter was CDMO player for Europe and Canada market. And you know, we fortunately found out some adverse information in our quality audits, and we decided not to go ahead with that. But that was the very large opportunity.

There are other opportunities that we are evaluating, which are index sports, vertical for acquisition of marketization. There are also areas that we are trying to look at in terms of dosage form assessment where those dosage forms that are not with us, like ointments, protein powders, or, you know, products like steroid hormones. So, these are some things that we are looking at. But, of course, you know, it depends on the availability of the opportunity and the attractiveness.

One thing that we don’t want to do is to rush into anything, which jeopardizes our very strong balance sheet today. And we’re very mindful that, you know, opportunities will definitely come and having a strong cash position and having a strong [Indecipherable] is their biggest priority. So that’s what we are executing on.

Viraj Shah — Shah Investments — Analyst

Okay. And sir, on the team side, when can–when we will see new CFO joining our team? Is our recruitment under process or what is?

Hitesh Windlas — Managing Director

Yeah, so recruitment is under process. And, you know, we are evaluating real candidates going through various rounds of interviews. And my sense is that, you know, we want to bring that candidate in soon as possible, but probably, you know, maybe three-four months’ time is probably expected.

Viraj Shah — Shah Investments — Analyst

And appointing Komal ma’am, as a new CEO, are we looking at any strategy change or something that?

Hitesh Windlas — Managing Director

So, what it does is, first of all, you know, Komal, has been the CFO of the companies last six, seven years, and has a very, very strong understanding of, you know, the business in various areas, aside from, you know, her core area of finance. And so it’s a very good perspective to drive the business with someone who has, you know, the understanding, as well as the knack for the numbers.

The idea is also so that it whence the operation rolls is taken up by Komal, it will free up time for both myself and Manoj to have more client engagement, to focus on mergers and acquisitions. And also to also drive, you know, some of our presence in various investor conferences and showcase our work there. So these are all areas that we are looking to improve our presence in. And that’s where the, you know, some of this change will allow us to do that while the operations are in very strong and good hands.

Viraj Shah — Shah Investments — Analyst

Yeah. Understood, understood. Thank you, sir. Okay.

Operator

Thank you. [Operator Instruction] The next question is from the line of Akash Mehta from CalPERS Investments. Please go ahead.

Akash Mehta — CalPERS Investments — Analyst

Hi, good morning. Thanks for the opportunity. I had a couple of questions. The first one being a little broad. Beyond the FY 25 target that you’re given, what is the long term or the longer term mix that you’re targeting in the three vertical?

Hitesh Windlas — Managing Director

I’m sorry, what’s the [Indecipherable]? Could you please repeat your question?

Akash Mehta — CalPERS Investments — Analyst

Beyond the FY 25 target that we’ve given, what is the longer term mix there’ll be a targeting the three vertical?

Hitesh Windlas — Managing Director

One is very generic vertical, as we have shared earlier, so it’s a higher margin vertical for us because we also partake in the distribution margin, aside from the manufacturing margin. And exports are further better so definitely for us, the more and more proportion of exports and range and in our sales, the more or better bottom line impact for overall, for all shareholders. So that’s where we are definitely trying. But this is not to say that we are not emphasizing on the CDMO vertical, we are.

And however it is in that vertical, we don’t play in the growth segment due to price increases, because our model is a cost plus model. So while we don’t have input price shocks, we also don’t participate in the price growth of the Indian farmer market. So that’s why these two verticals export and you know, trade generics are offering us a very strong opportunity and we want to continue to push on these.

So, is it difficult to predict what eventually will be the proportion but the higher the contribution from these two verticals, the better the bottom line will be.

Akash Mehta — CalPERS Investments — Analyst

Okay. And in terms of specific questions, you know, what is the status quo EPA pilot facilities you could disclose?

Hitesh Windlas — Managing Director

So it is working. We have been developing a lot of our DPTI and patent expiry products in that API pilot facility is where we have also been taking commercial batches, it is for the small volume products, up to 10 kg batches that are possible in that manufacturing sector. And they have been helping us in, you know, removing dependency in some key strategic material. So it is definitely an area that we continue to do. However, we don’t have any aspiration to expand or buy or get into the API business itself as such. So that that’s an area if we have facilities being only used for.

Akash Mehta — CalPERS Investments — Analyst

Alright, and just a quick last one, do we have any patent expires that we’re targeting?

Hitesh Windlas — Managing Director

Yes, definitely, there are several patent expiry products in diabetes that are coming up more in 23-24. So there are obviously with his work that is happening along those lines. Linagliptin, [Indecipherable], Alogliptin– these are some of the subsequent notable ones which are covered.

Akash Mehta — CalPERS Investments — Analyst

Okay, that’s it. Thank you very much.

Operator

Thank you. [Operator Instruction] Next question is from the line of [Indecipherable] from Sony Investments. Please go ahead.

Unidentified Participant — — Analyst

Yeah, thank you for the opportunity. I had to dig deep in questions. Can you just provide the revenue [Indecipherable] of Complex Generics versus the conventional products first nine months, as well as the current quarter?

Komal Gupta — Chief Executive Officer and Chief Financial Officer

In nine months, public generics percentage has been about 76%.

Unidentified Participant — — Analyst

Okay. And for this quarter?

Komal Gupta — Chief Executive Officer and Chief Financial Officer

This quarter 24% of [Indecipherable] —

Hitesh Windlas — Managing Director

Current quarter [Indecipherable]

Komal Gupta — Chief Executive Officer and Chief Financial Officer

For the current quarter it is in the range of 74. Almost more similar.

Unidentified Participant — — Analyst

Okay. And secondly, what is the top 10 client concentration as on nine-month FY 23? Also, whether this number stands for a top customer.

Komal Gupta — Chief Executive Officer and Chief Financial Officer

Other thoughts? Customer is below 10% of the overall percentage. And top 10 for nine months is about 42%. And for the quarter, it’s less than 40% actually.

Unidentified Participant — — Analyst

Thank you. That’s all from my side.

Komal Gupta — Chief Executive Officer and Chief Financial Officer

Thank you.

Operator

Thank you. [Operator Instruction] The next question is from the line of Neelam Punjabi from Perpetuity Ventures LLP. Please go ahead.

Neelam Punjabi — Perpetuity Ventures LLP — Analyst

Thanks a lot for the follow up. So my question is on the Trade Generics. Our growth that we have delivered over the last two years has been much– has been very strong and much ahead of what we had guided earlier. So, just wanted to know on a broader level, five years out, what’s the kind of potential scale that you see in this business? And is this a key growth driver for us going forward?

Hitesh Windlas — Managing Director

Thank you, Neelam. This is actually, you know, so, just to give you some numbers, there are you know, similar to Generics business is I think bigger than about INR1500 crores elaborate which is a purely regenerate company also bigger than INR1500 crores leap forward, which is also true generic company, you know, nearing something like INR1800 crores. And so, I believe the opportunity to grow in this segment is really huge. You know, we are you know– hardly going to touch INR100 crores this year, maybe a little less.

So, the way– but, what we are very mindful of is that when you’re working with large number of targets across the country, with a very small sales force, there has to be a very disciplined approach in receivables and the sales that we do. So, we sometimes– we are actually you know, making sure that the health of that business in terms of receivables and working capital is a five prime focus. We do not want to sort of just achieve a sales target and and you know, jeopardize its health. But, I believe that a very, very large headroom for growth in this process in this business is possible.

Neelam Punjabi — Perpetuity Ventures LLP — Analyst

Sure, that’s helpful. Also secondly, will — buyback be completed, given you know, the cash position is–given a cash position and valuations are pretty cheap right now, for our stock. Does it not make sense to do more of buyback?

Hitesh Windlas — Managing Director

You know, we have six months from the time like from November, when we announced the buyback to finish the buyback as per the regulator. And so, now, we have whatever two, three months remaining. And as– as you mentioned, we have out of INR25 crores, we’ve only spent so far INR9.88 crores and we will continue to spend.

I do want to mention that you know, for us, buybacks and dividends are both very, very important and we see them as a way in which we can reward all shareholders. So, the company is generating you know, strong operating cash and we see both buyback and dividend as the ways in which we can continue to hopefully do this. As of now, you know, while we don’t have any immediate inorganic opportunities, large in immediate or inorganic opportunities in consideration, this is something that we you know, look we are looking at for going forward also. But that will be the trade-off. If we find something very, very exciting that generates better shareholder return, then, we will deploy the cash, allocate capital to that. Otherwise, of course, dividends as per dividend policy but, shareholder, share buyback is also something that we want to continue rewarding all existing shareholders.

Neelam Punjabi — Perpetuity Ventures LLP — Analyst

Makes sense. Next time I wanted to touch upon the exports market, so, are we looking of, are we keen to get into any new market or any specific market maybe want to grow going forward?

Hitesh Windlas — Managing Director

Yes, Neelam. Actually, we as you know, our client for has been approved by Europe and we have the European GMP certificate. So, we are looking at ways to begin supplies to that continent. We are mindful that there has been a lot of price erosion over there also. But there are some good opportunities and that’s an area that we are evaluating of in terms of how to get.

Neelam Punjabi — Perpetuity Ventures LLP — Analyst

Will you be looking to quote your own front end for the exports business or, you know, just work with the distributors in those markets?

Hitesh Windlas — Managing Director

Okay. So, in these markets like Europe, the front end is actually very small. Typically, most companies have six to seven people only, who are contracting and managing the quality and finances and things like that. So, it is not something that we know we will do now. We want to it will give us a very strong footing to be able to understand the local, you know, opportunities and you know, build up portfolio as well as future strategy accordingly. So, we will definitely be evaluating some of these.

Neelam Punjabi — Perpetuity Ventures LLP — Analyst

Got it that’s all from my end. Thank you.

Operator

Thank you. [Operator Instruction] The next question is from the line of Mr. Tiwari from Aryan [Phonetic] Capital Markets Limited. Please go ahead.

Mr. Tiwari from Aryan — Capital Markets — Analyst

Thank you. So, my question is regarding working capital. So, if you can share some thoughts, what is the current situation of the working capital? And how will the working capital situations change once the CDMO businesses reduces in terms of contribution compared to exports and Trade Generics? So, what would be the change in the working capital scenario–

Operator

I’m sorry to interrupt you, Mr. Tiwari, but your voice is not sounding clear, sir. It is sounding really muffled.

Mr. Tiwari from Aryan — Capital Markets — Analyst

Is it okay now? Hello.

Operator

Yes. Please go ahead.

Mr. Tiwari from Aryan — Capital Markets — Analyst

So, my question was regarding working capital. What is the current scenario for working capital and what will be the changes in working capital once our export and trade generates contribution increase, and CDMO contribution reduces?

Komal Gupta — Chief Executive Officer and Chief Financial Officer

Our working capital is in the range of around 80 to 82 days. And we don’t see much of a change. So for trade generic, there will be a bit of higher inventory levels. However, for export, we have lesser number of receivables for trade generic number of days for receivables are in the similar range. So we don’t see much of a change. Working capital should remain within the range of 70 to 85 days.

Mr. Tiwari from Aryan — Capital Markets — Analyst

Sure. And in terms of exports, what would be the regional mix as of now for exports?

Hitesh Windlas — Managing Director

So currently, as I mentioned, Mr. Tiwari, we are more focused in Southeast Asia, that would be the highest concentration. And slowly, as these new markets get added, but they will get added over a longer time span. Since the dossier and approval timespan is longer in exports. So we’re, you know, three, four-year period. My sense is that we will have, you know, supplies to Europe, we will have supplies to Africa. And of course, some areas of Middle East and even Southeast Asia. So these are all areas where there is a demand, and we have the skill and the ability to tap that also. So that’s an area that we are trying to build this vertical towards.

Mr. Tiwari from Aryan — Capital Markets — Analyst

And sir, lastly, one question on CDMO. Maybe I have missed the answer. So there has been a decline in CDMO revenues on a Y-o-Y basis. So what would be the driver for the decline?

Hitesh Windlas — Managing Director

So on a Y-o-Y basis, actually it is it’s a flat, you know, it’s a 2% growth. So, I would not say to decline, but still you know, it’s a plant and as I mentioned that there are you know, the overall IPM growth Indian farmer market volume growth was in the range of 2-3% if you take out the antibiotic growth that happened in November.

So, there is a bass effect where our customers are selling less, right, to some extent that plays into our order books and therefore, you know, that aspect. However, you know, there is if you look at if you remember about Q2 where the overall IBM was still 3-4 or 5% volume growth, but we delivered a 15% growth in quarter.

So really, my sense is that there’s a divide and we have to see it more on a YTD basis– on an annual basis. Because from a quarterly perspective, while we are at, whatever point it grows, it is still too small you know. And the fluctuations can be there due to some new launches happened, something new or postponed. Some might not be picking up inventory towards December and various small things. So, my sense is that we should look at this more on a YTD basis and there also I believe that you know, double-digit growth is possible and we are working on ways to bring that back.

Mr. Tiwari from Aryan — Capital Markets — Analyst

Sure. And sir, any new customer added in the CDMO business for the entire quarter?

Hitesh Windlas — Managing Director

Yes. We definitely we have added new customers but if any large noteworthy one– so, that sort of large new customer added in Q3.

Sure sir. That is helpful. Thank you, that’s all from my side.

Operator

Thank you. [Operator Instruction] As there are no further questions from the participants, and I’ll hand the conference over to Ms. Komal Gupta, CEO and CFO at Windlas Biotech Limited for closing comments.

Komal Gupta — Chief Executive Officer and Chief Financial Officer

We wish to thank you everyone who attended the call from management site. Thank you very much.

Hitesh Windlas — Managing Director

Thank you, everyone. I really appreciate the questions.

Operator

Thank you. On behalf of enlarge Windlas Biotech Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.