{"id":183585,"date":"2026-05-20T06:57:23","date_gmt":"2026-05-20T10:57:23","guid":{"rendered":"https:\/\/alphastreet.com\/india\/dishman-carbogen-amcis-ltd-dcal-q4-2026-earnings-call-transcript\/"},"modified":"2026-05-20T07:00:41","modified_gmt":"2026-05-20T11:00:41","slug":"dishman-carbogen-amcis-ltd-dcal-q4-2026-earnings-call-transcript","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/dishman-carbogen-amcis-ltd-dcal-q4-2026-earnings-call-transcript\/","title":{"rendered":"Dishman Carbogen Amcis Ltd (DCAL) Q4 2026 Earnings Call Transcript"},"content":{"rendered":"

Note:<\/strong> This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.<\/em><\/p>\n

Dishman Carbogen Amcis Ltd (NSE: DCAL) Q4 2026 Earnings Call dated May. 20, 2026<\/span><\/strong><\/p>\n

Corporate Participants:<\/h2>\n

Madhuri<\/strong> \u2014 Operator<\/em><\/p>\n

Stephan Fritschi<\/strong> \u2014 Executive Vice-President Business Units; Deputy CEO<\/em><\/p>\n

Harshil Dalal<\/strong> \u2014 Global Chief Financial Officer<\/em><\/p>\n

Analysts:<\/h2>\n

Unidentified Participant<\/strong><\/p>\n

Yash Tanna<\/strong> \u2014 Analyst<\/em><\/p>\n

Ankit Gupta<\/strong> \u2014 Analyst<\/em><\/p>\n

Ramanuj Chandak<\/strong> \u2014 Analyst<\/em><\/p>\n

Presentation:<\/h2>\n

Madhuri<\/strong> \u2014 Operator<\/em><\/p>\n

Good evening, ladies and gentlemen. I’m Madhuri, moderator for the conference call. Welcome to Dishman, Carboh and AMSYS Ltd. Q4FY26 conference call. We have with us today Mr. Stefan Fristy, Chief Executive Officer. Karboja Namsis. Mr. Harshil Dalal, Global Chief Financial Officer. Mr. Palo Armanino, Chief Operating Officer. As a reminder, all participants will be in the listen only mode. And there’ll be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your table.<\/p>\n

Touchstone Telephone. Please note that this conference is recorded. I would now like to hand over the floor to Mr. Stefan Frische. Over to you, sir.<\/p>\n

Stephan Fritschi<\/strong> \u2014 Executive Vice-President Business Units; Deputy CEO<\/em><\/p>\n

Welcome to everybody. This is Stefan Fritsche speaking. It’s an honor to talk to you. I also welcome Hajil Dalal, our Global Chief Financial Officer and Paolo Armanino, our COO at Dishman India site. Before we go into the financial numbers, let me give you a brief overview about Carbon Amsis. How we did at the moment in the past quarter and now. So starting with the drug product side in Saint Rose here, the market shows some challenges. But still we could increase our quotation rate. We see an incline of requests.<\/p>\n

Some new projects could be acquired during the last quarter. And so we are quite optimistic to become successful in this site as well. There are specifically interest in late phase projects that we can produce commercial products in the foreseeable future. At the same time we control our costs. Of course we have initiated some cost control measures and so on. Drug substance, that’s the biggest business unit in our company. It’s lively in this area. We got more than 10 late phase projects including CPP campaigns which is very good for the future.<\/p>\n

We have as usual the normal API projects and products in our pipeline but also related to adc. There’s a huge demand on ADC and related compounds like the linker payload which is good and high margin product. At the moment we got more than 30 commercial products which is our base load in revenue generation. The co investment what we talked last time the past two times is on track. We are optimistic and confident that we can finish the engineering activities in Switzerland according to plan. Same time the lean management is rigorously pushed forward.<\/p>\n

We increase efficiency, productivity and reduce our cost base. The third business unit specialties there we see a strong vda, vitamin D and analog sales. These are the products with high margins. The demand has increased which is also responsible and had got a big impact on the strong numbers there. We have optimized our supplier base specifically on wool grease. We have negotiated new contracts. We have more suppliers on board. We got better prices. So the cost base has been improved as well. Specifically on the sales activities we have increased our sales force.<\/p>\n

We have increased on both sides on the carbon side but also on the Dishman carbon side in India. We have increased the number of salespeople which is the condition to attract more products and more customers to feed our pipeline. So we are well positioned for the future and I’m absolutely optimistic and confident that we are on the right track and we get more product and business in. Last time I mentioned our Sprint activity. This is an initiative to attract early phase projects. This is very positive and successful.<\/p>\n

We got different new clients in our portfolio. Big pharma but also mid sized and small pharma companies who are very strong. We showed very strong interest in our new initiatives. This is important to get the early phase projects in for mid and long term future of the company. So this is a very good initiative and we are very happy with the development of this. Another area where we make progress is the combination drug substance Drug product. We have started now to offer this entire package to the market so that the customer can come in the drug substance site and take the materials through to drug production.<\/p>\n

So he has only one supplier to deal with, which is Carboge Nemsis. So the collaboration with Tishman in India and Carbogenamsis in Europe is developing very nicely. We have multiple products and projects together. We have also now the first API where we transfer it from Europe from our carbon emissions sites to Tishman to be in a better position in terms of cost base and that we can get more and more attractive prices also on the market. So this project has been initiated and I’m confident that this will be a great success also in the future.<\/p>\n

So all in all, together with Tishman, Kovac and amsys, our entire group is well positioned for the future. We are very optimistic that we are on the right track and I think the financial numbers will confirm this. With this I would like to hand over to Rajeel Dalal to take us through the financial numbers.<\/p>\n

Harshil Dalal<\/strong> \u2014 Global Chief Financial Officer<\/em><\/p>\n

Thank you very much Stefan and a very good, very good afternoon to all the investors and the stakeholders. It’s a pleasure to talk to you about the financial numbers that we have achieved for the quarter ending 31st of March 2026. Starting with the revenue, it was one of the best quarters ever for us where we reported a revenue of 851 crores for the quarter which represents close to 19% growth as compared to the comparable quarter of the last financial year where we did a revenue of about 716 crores.<\/p>\n

As far as the segment wise breakup of this revenue is concerned, we saw a significant amount of growth on both the segments as we classify CDMO as well as marketable molecules where on the CDMO side of the business we saw a revenue growth of about 21% as compared to Q4 of financial year 25 going up from 569 crores to 690.8 crores in the quarter ending 31st of March 26th. As far as the marketable molecule segment is concerned and more specifically within this particular segment, the vitamin D analogs part of the business, as Stefan alluded earlier, had performed significantly well in the quarter ending 31st of March 26th where overall for this segment we saw a growth of 9.3% as compared to Q4 of financial year 25.<\/p>\n

146.9 crores of revenue in that quarter going up to 160.5 crores in the quarter ending 31st of March 26th. As far as the further breakup of the P and L is concerned, from a cost perspective we were at about 15% in the quarter. This percentage is a bit higher than what the yearly average was. But this was mainly on account of higher amount of commercial supplies going out in this particular quarter as compared to more of of the phase three development work that was done in the first nine months of the financial year.<\/p>\n

As far as the employee expenses are concerned, we see a significant increase in the employee expenses for the quarter ending 31st of March 26th. There is a one off in this particular line item mainly because of the switch of the pension plan for our employees at the Swiss entities where we move from the earlier pension provider to a completely new pension provider, which basically allows for greater benefits for the employees when they retire, as well as for the death and disablement of the employees, because of which there was an additional provision based upon the actual valuation that was done that was booked as part of the employee expenses to the extent of about 2.5 million Swiss francs.<\/p>\n

The other expenses stood at about 147 crores as compared to 92 crores in the comparable quarter of the last financial year. This deviation of about 50 odd crores is largely represented because of certain additional provision that we had to make in the in the quarter ending 31st of March 26th on account of the onerous contract. So as you know, what is fundamental to our business is continuously assessing what are the actual hours that are estimated for a particular project versus the budgeted hours.<\/p>\n

And wherever we see there could be a possibility of an overrun, we would immediately book a provision. Contrary to this, in Q4 of financial year 25, we did see a reversal of certain onerous provisions because of which we see a differentiation between the last year Q4 versus Q4 of 2630 crores, which is solely attributable to this provision. Overall, from an EBITDA perspective, all of this translated into a healthy EBITDA for Q4 of FY26 of close to about 163 crores, representing 19.1% as the EBITDA margin for the quarter, the depreciation and amortization stood at about 88.79 crores for the quarter, the finance cost at about 43 crores.<\/p>\n

And all of this translated into a profit before tax of about 46 crores. The tax expense was about 24 crores. It would not be prudent to see the tax expense as a percentage of the profit before tax because 50% is not the tax rate that we pay. But because of the losses in certain entities, the percentage looks higher than what are the effective tax rates in each of the jurisdictions are the profit after tax for the quarter stood at about 21.7 crores looking at the full financial year, while Q4 was extremely strong, we also saw a strong delivery of performance for the full financial year in line with what we had set out as expectations.<\/p>\n

At the beginning of the year and subsequently in the Q2 and Q3 of the financial year, the income from operations stood at about 2,932 crores as compared to 2,000 crores in financial year 25 representing close to about 8% growth. In the revenue, the cost stood at about 408 crores, roughly about 13% of the revenue. Employee expenses stood at about 140 sorry 1,447 crores, the other expenses at 510 crores, all of this resulting into an EBITDA of 565 crore equating to 19.3% for the full financial year 26 as compared to 17.3% in the previous financial year.<\/p>\n

So we have been able to increase our EBITDA margins by 200bps in the current financial year. That concluded the finance cost for the full financial year stood at about 174 crores as compared to 159 crores. That is also a forex impact which is included as part of the this finance cost. All of this translated into a profit before tax of 104.9 crores for the full financial year as compared to 19.3 crores in the previous financial year and the profit after tax stood at 97.4 crores as compared to 3.2 crores in the previous financial year.<\/p>\n

As far as the breakup of the of the revenues are concerned, roughly about 81% of the revenue was contributed by the CDMO segment for the quarter and it was 83% for the full financial year. The segment wise breakup for the full financial year comprised of the CDMO is part of the business growing by about 6.5% accumulating to a revenue of 2,441 crores while the marketable molecule segment the revenue increased by about 17% going up to 490.65 crores as compared to 418.5 crores in the previous financial year.<\/p>\n

As far as the margins are concerned for the quarter, the CDMO segment reported a margin of 18.7% at an EBITDA level as compared to 23.9% in the comparable quarter of last financial year and the major reason for this deviation is because Q4 of FY25 we saw a lot of late Phase 3 molecules being delivered where we make our highest margins. The marketable molecule segment, as we had mentioned earlier, keeps on showing a remarkable performance as far as the margins are concerned. And because of the increase in the share of the VDA that is the vitamin D analogs as well as the cost measures that we undertook in terms of supplier diversification, we were able to increase the margins to 21.1% for the quarter and 18.8% for the full financial year of 26 representing a 940 pips increase in this margin.<\/p>\n

Regarding the CapEx that was done for the full financial year that stood at roughly about 22.4 million Swiss francs. Our net debt excluding the lease liabilities for the year ending 31st of March 26th stood at about 146.8 million as compared to 157.6 million at the end of the last financial year representing a decrease of close to about 11 million Swiss francs. Apart from this, I would like to highlight one of the of the points that was also approved as part of the board meeting yesterday. Obviously subject to the necessary regulatory and the shareholders approval which was in regards to the one of the promoter entities providing a long term external commercial borrowing to the parent entity with the objectives that we are able to pay off the high cost debt in India which will have a significant positive impact on the on the interest cost for the group as a whole and it would also provide flexibility in terms of the repayments because the terms are extremely favorable where we have a tenure proposed tenure of 10 years and the loan is completely on will be completely unsecured which also allows us to free up the securities which are currently provided to the banks in India.<\/p>\n

Additionally, the funds can be utilized for the working capital requirements as well as the CAPEX requirements in India and also at the subsidiary level as and when required, which takes away, you know, our dependence on external funding and also it also allows us to borrow at a cheaper cost. So this is something that has been approved by the board. Yes, to get and you know, we would look forward to receiving the shareholders approval so that the transaction can then be executed and it should benefit the company at a standalone India level as well as at the group level quite significantly.<\/p>\n

With this I would like to hand over the call for opening the floor for questions that we could provide the necessary answers to.<\/p>\n

Questions and Answers:<\/h2>\n

Madhuri<\/strong><\/p>\n

Thank you sir. Ladies and gentlemen, we will now begin the question and answer session. If you have a question please press star and one on a telephone keypad and wait for your turn to ask the question. If you would like to Withdraw your request. You may do so by pressing Star and one again. The first question comes from Harshit Katka from Robocapital. Please go ahead.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Hello, Am I audible?<\/p>\n

Madhuri<\/strong><\/p>\n

Yes sir. Yes,<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Yes. Thank you for the opportunity. So sir, if we look at the depreciation cost, right, so it was around 79 crores a year back, which you know, increased 84 crores in Q3, FY26 and is now at 89 crores. Almost at 89 crores the depreciation, you know, is increasing sequence. So just wanted to understand how should we model depreciation going forward? What could be the depreciation cost in FY27 and 28?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

So thank you for your question. So so basically the depreciation more or less, you know, in the functional currency over the last one year has remained more or less constant quarter over quarter. There has not been a significant amount of Capex that has been done though the last manufacturing line which went live was in France, which was in Q4 of financial year 25. So there is an increase in the depreciation because of that. But apart from that, one of the other factors that influences the cost part and also the depreciation as part of it is the foreign currency fluctuation impact when all of the expenses are being converted or translated into inr, which also has an impact on this.<\/p>\n

But as far as the functional currency is concerned, you know, we have not seen a significant increase in the depreciation.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Okay. And sir, you explained in your opening commentary that 50% tax rate is not the normalized tax state and is elevated mainly due to losses in subsidiary. So like how should we model the consolidated tax rate going forward for FY27 and 28?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

I think it could keep on. Well there are two parts. So you know, certain subsidies, like for example our friend subsidiary as well as the Shanghai subsidiary, you know, where there are losses right now and India also not performing currently. So because of that the tax rate is looking higher. But as the performance keeps on increasing, you know, as we keep on generating more and more profits at this particular entity, you know, the effective tax rate as a percentage of the profit before tax should keep on coming down.<\/p>\n

So I would say, you know, it would gradually keep on coming down. So for FY27, you know, it could be close to about 40% for the full financial year. If the year after, it could be close to about 30%. Because if you see right now the most profit generating units that we have majorly, the Swiss entity as well as the Dutch entity, the taxes that we pay at the Swiss entity are close to about 15%. At the Dutch entity it is close to about 25%. And then we have accumulated losses at, you know, at the India level because of the depreciation of the goodwill and in France as well because of the last two years where there were losses.<\/p>\n

So we would be able to utilize these losses against the future profits as well. So I would say in about three years time we should be closer to about 20%. Anywhere between 15 to 20% as the effective tax rate on the profit before tax.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Right, understood. And sometime back we had said that there would be 10 crores of reduction in our interest cost on a quarterly basis. And you know, the interest expense would eventually stabilize around 30 crores per quarter. But the interest cost has not reduced as expected. So if you could give some color on that and help us understand the outlook for debt levels also interest cost for the next two years.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

So basically the interest cost right now that you see, you know, on an absolute basis at the Swiss entity level, the cost has come down. But again, you know, there is an impact on account of the, of the foreign exchange fluctuation in the, built into this finance cost from an actual cash outflow. You know, if you look in the, in the functional currencies of the subsidies, the cost has actually gone lower. Having said that, with the fundraising plan which has been approved by the board, you know, and if that goes through, we should be able to reduce the cost significantly because the high cost debt that we have in India is something that we would want to pay off from the, from the loan that we are able to raise at much lower cost.<\/p>\n

So that would be an interest exponential of close to about 7% on the, on the rupee borrowing that we are talking about.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

So sir, is it safe to say that the interest cost will eventually come down to around 30 to 35 crores per quarter?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Yeah, it could go even lower than that. But yeah, on a, on a conservative basis, 30 to 35 crores should, should definitely be doable.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

But that would be from which quarter exactly? In FY27 only. Right.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

This would be in the current financial year.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Yeah, but any quarter, if you could specify.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Well, conservatively we can say from Q2 of the financial year. Q2 or Q3.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Q2. Q3. Okay, sir, understood. Thank you. That’s. I’ll join the.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Thank you.<\/p>\n

Madhuri<\/strong><\/p>\n

Thank you, sir. The next question comes from Yash Dhanna From I thought VMs. Please go ahead.<\/p>\n

Yash Tanna<\/strong><\/p>\n

Yeah, thank you for the opportunity and congratulations on a decent set of numbers. So my first question was on the India business and the scale up there. Last quarter we mentioned that we have close to 1100 or 1200 crores worth of RFP and we expect, you know, to at least convert 30 to 35% of these orders. And you mentioned that maybe in the next six months you get some phone commitments. So just wanted an update on that, on the RFPs and how also the new pipeline or new RFPs are looking like for the coming year since we had a plan to scale India up to find a crore in the next 12 to 18 months.<\/p>\n

And also an updated guidance on that timeline and targets. That’s the question. So<\/p>\n

Harshil Dalal<\/strong><\/p>\n

You know, there have been significant developments like you know, just to start with one of the largest molecules that we were producing or we are producing out of the Swiss entity which is for a big pharma, the customer has agreed for the tech transfer to happen to India. So that is something, you know, which was a great achievement. And because of this transfer, even after giving discounts to the, to the customer, we should be able to increase the overall margins on the, on this particular product.<\/p>\n

So that is, that is one of the significant developments. The other RFPs as well, those are progressing quite well. We have, we have physical inspection from one of the, one of the large innovators that should be happening in the, in the current month or in the next month. So that could translate into additional orders coming in for the active pharmaceutical ingredient for the product where we are currently manufacturing the key starting material. So in terms of the timing, yes, you know, we are getting more and more RFPs as well.<\/p>\n

So those are getting added and the ones which were already in pipeline, you know, we are already seeing positive effects of the same as far as those translating into the revenue numbers and profitability that would be happening I would say in the later part of this year or in the next financial year. So that is how you know, we are looking at it.<\/p>\n

Yash Tanna<\/strong><\/p>\n

Got it. So that’s clear that it will be more back ended. But can you quantify like you mentioned the Swiss tech transfer, Swiss and VTEC transfer and the Innovator molecule that you mentioned where you are in talks with the Innovator, can you quantify what sort of values or contract values this would be and in that sense what would be the revenue realization, let’s say in FY28 from these already sort of not confirmed but close to confirmed contracts.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

So basically for this molecule that I mentioned about, you know, for the debt transfer, the annual revenue that, that we currently do is close to about 20 to 25 million per annum for the other project. You know, you know, if everything goes well, you know, it could be at least another 20 to 25 million of opportunity for the India business. So these two are the ones which, which look to be, you know, going quite well, but obviously it’s a matter of time like when the tech transfer everything happens and when we start seeing it in the numbers.<\/p>\n

Yash Tanna<\/strong><\/p>\n

Got it. So this is 20, $25 million. Right. Just to clarify,<\/p>\n

Harshil Dalal<\/strong><\/p>\n

This would be Swiss francs.<\/p>\n

Yash Tanna<\/strong><\/p>\n

Okay, sure. Sir, my second question. So we had mentioned on this is on the ADC supplies of the linker that we are doing. So last quarter we had mentioned that last year we did 22 million CHF and for 27 and 28 we had given an indicated number of 30 million 40 million sys francs respectively. So just wanted to know if these are, you know, contracted volumes and the innovator will pick up this much value of products from us. And also just wanted to understand the EBITDA margin profile on such kind of supplies.<\/p>\n

Right. Because they are quite complex, is it fair to assume that this would. The margins would be close to more than double the margins that we are doing on the console lab?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Yeah. So starting with the first part. Yeah. So the molecule has been performing quite well and it has been getting more and more approvals as well. So and we supply the linker as well as the payload. So yeah, I mean we have the purchase orders in hand for the next years and that is the reason we are quite confident about this particular project. Plus the customer has been co investing along with us. The first co investment has already been completed, the second one is in progress. So we are quite hopeful on that particular molecule as far as the margins are concerned.<\/p>\n

You know, the assumption that you mentioned is quite true and it could be even higher than that. So it’s quite a profitable product for us. And you know, the partnership has been going quite well. Maybe Stephanie, if you want to add something to that.<\/p>\n

Stephan Fritschi<\/strong><\/p>\n

Yeah, thank you. Mahasir, you summarized the situation quite nicely. The partnership is very tight. We host them on our site regularly. We go there to see them and to discuss the progress of the project and what we see on the customer side. They have secured some successes by their clinical trials by having more indications. So we are all in all very confident, optimistic that what the customer tells us and told us in the past that this will be the future and reality that we can produce according to the plan.<\/p>\n

Yash Tanna<\/strong><\/p>\n

Got it. So that’s very helpful. And just to follow up on that. So the supply, since we had the Purchase order, will this be in any particular quarter or will it be throughout the year? And if it is a particular quarter, if you can mention which quarter these supplies will come in,<\/p>\n

Harshil Dalal<\/strong><\/p>\n

I think that would be very difficult to say like exactly what quarter. You know, we have the planning for it. You know, the customers, the customer might want something pre order quantities as well. So it all depends. And that is also one of the reasons why we say that it is very difficult to look at us on a quarter over quarter basis. Like in the last quarter where the EBITDA was not that high, we had explained that there was deferment of certain orders which went to Q4. So it all depends upon when exactly the customer needs those quantities.<\/p>\n

I mean, whether it falls in those three months or maybe in the fourth month. You know, that’s, that’s very difficult to gauge right now.<\/p>\n

Yash Tanna<\/strong><\/p>\n

Got it, sir. And one last question, if I may. So on the ADC front right now, this is one molecule and one contract where as you said, it’s extremely profitable. Can we highlight if you’re working on, you know, such similar innovator molecules or any such similar contracts from the Swiss entity which could be in the pipeline and maybe could, you know, get commercial maybe in the next one or two years and any, any colors around that?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

I mean, we would not be able to name anything specific. But yeah, I mean, as a general statement we can say that we are working on many, many wonderful candidates and you know, some of them could be, if not equal to this size, at least a great portion of the business as and when they move into phase three or move from phase three into commercial. But what we are confident of is because of the technical capabilities that we have developed in house and you know, being partners to some of the large innovators as well as the biotech companies, companies, as well as entering into this partnership with Celonic on the map, you know, that’s helping us to gain traction in terms of more and more of these projects.<\/p>\n

Plus we also, as Stefan had mentioned earlier and also in the last quarter call, we also started this initiative called the Sprint initiative, which is to capture more and more projects for the early phase. Because you know, the success to our business is that the more number of projects that we start with at the early phase, those could be potential candidates for late phase and then, you know, turn them into commercial projects. So that is something that we are quite focused on. And yeah, I mean some of the molecules look really promising.<\/p>\n

But Stefan, if you want to add something to this.<\/p>\n

Stephan Fritschi<\/strong><\/p>\n

Yes, as you said, harshil we have good customer, a good customer base, big pharma, mid size and small. We have multiple lay phase projects where we also ready for FDA inspection. We’re just waiting for FTA popping up so which is always a good sign. And the collaboration with Zelonic is a milestone because there we have your possibility to have a combined offering starting from the link of payload synthesis to the conjugation with the Selonic antibody and then also to the drug product formulation in San Brazier.<\/p>\n

So this is very promising and there’s a lot of attraction in the market.<\/p>\n

Yash Tanna<\/strong><\/p>\n

Got it. So thank you, that’s very helpful. Best of luck. I joined back in the queue. Thank you.<\/p>\n

Madhuri<\/strong><\/p>\n

Thank you. Thank you. Sir, the next question comes from Disha Bodhia from Safair Capital. Please go ahead.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Hello. Am I audible, sir? Yes, you are audible. Yes. Thank you so much for this opportunity. So sir, my first question was on our overall revenue growth. How do you see the growth for FY27? Sir, giving the ramp up of our subsidiary, how do you see the overall growth?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

The overall growth looks quite promising. And you know, yes, I mean right now because of the geopolitical situation, there are certain uncertainties as well. But you know, we do see that overall from a business perspective from, you know, things should look up, but we are continuously assessing the market, market situation as well. And hence, you know, we would remain cautious as far as the guidance for the year is concerned. But if you take a three year view, you know, we are pretty confident of the, of the growth that we have set out, the path that we have set out in terms of the revenues, the profitability and you know, the growth plans remain very much intact.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

And so in terms of margin, so this, this quarter we saw a dip in the CDMO margins because of the late phase three development. How do you see these margins for FY27? And also the increase in the marketable molecule segment? The margin increase was very good. So how, how do you see this sustaining and is there scope for further improvement?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Yeah. So as far as the margins are concerned, you know, we do expect that both the segments will keep on improving. As far as the margins are concerned, our target remains the same, which is to get to the 25% mark in the year after next or now FY28. So that target still remains and the contributories would be both our contract development and manufacturing business as well as more specific, specifically our vitamin D analogs business, where apart from the increase in the revenue, we are also concentrated on how we can optimize the Cost structure, both from a raw material perspective as well as the other indirect expenses and all of this put together, we should be pretty confident of achieving this kind of number.<\/p>\n

The two pockets where we are highly concentrated on is to see how we can get more and more business into the, into the French facility. We are trying to provide drug substance and drug product as a single offering to our customers and that should help us in gaining more traction as far as that particular business is concerned for India, you know, the capacity is already there, the regulatory hurdles are behind us. So we, we don’t see any reason why the India business should not keep on growing in the future.<\/p>\n

So combined, all of this, you’re pretty confident of achieving our midterm and long term growth plans.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

You mentioned the 25% sort of EBITDA for FY28, right?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Yeah,<\/p>\n

Unidentified Participant<\/strong><\/p>\n

That’s<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Correct.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Yeah. So FY27, could we be somewhere around 22 to 23%? Will that be a fair assumption?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Yeah, that’s the target. So but as I said, you know, let’s wait for a quarter or so and then we can be confident of, I mean, of giving a guidance on the numbers.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Sure. And just on the overall mixer for CDMO and marketable molecules where we see this. What, what will be the target mix that we are targeting from both of these segments say in the next two, three years?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Sorry, the target part,<\/p>\n

Unidentified Participant<\/strong><\/p>\n

The revenue mix from the CDMO and molecule.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Yeah, so, so, so the CDMO business will keep on growing and as far as the mix is concerned, I would say it would be somewhere like 85, 15. So 85 being the CDMO part of the business and 15% being the, the marketable molecules. Most, I mean most of it is dominated by the vitamin D analogs and cholesterol.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Okay, that is it. Sir, from my side, wishing you all the best. Thank you.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Thank you so much.<\/p>\n

Madhuri<\/strong><\/p>\n

Thank you, ma’. Am. The next question comes from Preet Nagar Seth from Wealth Advisor. Please go ahead.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Hi, thank you for this. My question is regarding the. You mentioned that the debt on the India side which could get replaced with the ecb. Could you please quantify how much is the India debt and at what percentage it is right now?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Yeah, so the India debt is roughly about 800 odd crores. And I would say the average interest cost would be close to about 10 and a half to 11%.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Okay, so you’re saying this gets replaced with a 4% loan. So the spread is 7%. But if you were to say plan for the currency depreciation, say assuming India and rupee depreciate 4 to 5% every year. Wouldn’t that effectively take it to a about 9% levels?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

No, because you know if you see from India 90% of our revenue also comes in foreign currency. So you know we have equivalent amount of foreign currency that would be coming in which kind of negates any adverse foreign exchange fluctuation risk whether that in foreign currency would act as a natural hedge against the revenues in the same currency. And again the tenure of the loan is also kept quite long so that if you see the revenue over the next 10 years, I mean the revenue in foreign currency is going to be much higher than the, than the foreign currency debt that we will be availing.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Okay, so what you’re saying in other words is that the first priority whenever this gets sanctioned is to repay the 800 cross and you see this concluding by end of quarter one somewhere quarter two and hence you’re saying that from quarter two or quarter three onwards the interest cost for the quarter would go to around the 35:40 crore mark instead of the current one.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

That’s correct, yeah. So the idea is to basically at least from a net debt perspective because you know certain loans might have certain lock ins or certain prepayment penalties etc but at least from a net debt perspective you know we would want to have it meet zero as far as the India entity is concerned so that we can keep on paying that off as quickly as possible which should have a significant positive impact on the finance cost at a consolidated level.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Regarding the overall debt do we see it increasing this year over and above what we close to this year<\/p>\n

Harshil Dalal<\/strong><\/p>\n

We don’t expect any increase because as we have been saying there are no major CAPEX plans apart from the co investment that we are doing with the Japanese innovator where 100% of the capex financing is being done by the partner. So apart from that the maintenance CAPEX is something that we will have to keep on incurring across the group. There would be investments that we are making into digital transformation which includes the SAP implementation across the group putting the group on the same platform as far as possible regarding all the systems processes including the lab management software and also trying to make advancements using artificial intelligence wherever possible in order to make the processes more efficient.<\/p>\n

So these are going to be the areas that we would keep on concentrating on. But otherwise in terms of the hard core assets I think we already have that capacity. It is all about utilization, utilizing that capacity in the best manner possible.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

So can I, can I safely assume that given that there is a 20, 25 million tech transfer to India plus an additional the ADC business worth 10 more million dollars for this year. That’s 30 million itself. And whatever additional business comes our way, we should at least see a 400 to 500 crore top line jump from the current financial US closure. Is that a fair assumption? On my what<\/p>\n

Harshil Dalal<\/strong><\/p>\n

I would, I would say that, you know, because you know these things are in fluid so we don’t know how much of it would come in the current year, how much goes into the next year. But from an overall perspective we would want to wait for a quarter or so and then give the guidance so that we are extremely sure about what we could aim to achieve by the end of the financial year year.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Understood? Understood. Okay, great. Thank you. And all the best. Sure. Thank you so much.<\/p>\n

Madhuri<\/strong><\/p>\n

Thank you sir. The next question comes from Ankit Gupta from Bamboo Capital. Please go ahead.<\/p>\n

Ankit Gupta<\/strong><\/p>\n

Yeah, thanks for the opportunity and congratulations for a good bounce back in the quarter. The first question is on the standalone business. So with this two new contracts being discussed and hopefully, you know, we should get them, how should we look at the trajectory for our standalone business for this financial year and next financial year? I think most of this contracts will, you know, get commercialized in FY28 only. So how does FY27 look for in the standalone business and how is FY28 looking like, like currently with the current set of business in hand and RFQs in the pipeline?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Yeah. So for the current financial year we definitely expect an increase in the revenue which would also translate into increase in the profitability for the India business. That is for sure as compared to financial year 26. And as far as the trajectory is concerned, because of the singular organization that we have now formed as far as the business development and the sales activities are concerned between carbogenomsis and India, the Swiss entity and India, you know, that is helping us to now pitch to the customers and that is something that what we are aggressively doing as a single offering between the high tech development services out of Switzerland and the large manufacturing setup out of India.<\/p>\n

So this should, I mean we are already seeing positive effects of the same and it should start translating into orders and hence numbers in the, in the coming years. How much of it happens in the current financial year versus the next year is something that we would need to see. But overall from India perspective we do expect an increase as compared to the last year both in terms of revenue and profitability. And if you take on a three to five year view, you Know, India is definitely one of the, I would say the growth in India is going to be one of the key strategies for us in order to increase the revenue at a group level as well as improve the profitability significantly.<\/p>\n

Because historically India had been doing close to about 35, 40% operating margin for us. And that is kind of level that we would want, want to step back as quickly as possible.<\/p>\n

Ankit Gupta<\/strong><\/p>\n

So does with the current order set in hand, could we at least get back to FY25 levels of 400 crore or. That looks difficult. And FY28, with the, with, with this new orders and RFQs in hand, we should be looking at 500 crore plus kind of top line. Will that be a right assumption to make<\/p>\n

Harshil Dalal<\/strong><\/p>\n

For FY28? Yeah, that’s the target that we have in mind for the current year. You know, it could be a bit lower than what the number that you mentioned, but we are still, you know, we’re still two months into the year, so it will be too early to say that.<\/p>\n

Ankit Gupta<\/strong><\/p>\n

And on the EDC business, so apart from the one large molecule that we are doing with the Japanese Innovator, we were also in discussion with the same client for the other molecules which were in Phase three and other customers also for which, you know, some of the molecules were in phase two and Phase three. So any update on the same and how are we seeing the progress on that front?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

So I think the progress in general for all the phase three molecules has been quite good. You know, just talking about the, the Japanese Innovator, they also received approval for their molecules as a first line treatment, you know, which is quite significant and you know, the kind of projections and the estimates, the orders that we have received, you know, it looks, I would say, if not beyond expectations, at least in line with what we were expecting. So that’s moving quite well. Even though the molecules, they are progressing quite well.<\/p>\n

You know, we are getting more and more traction because of the other initiatives that we have taken at the Swiss entity, as I mentioned earlier, in terms of getting new molecules. So overall, you know, from the technical capabilities that we have, we are not seeing any significant dropout of the molecules. But again, you know, it depends upon, I mean in the past we have seen molecules even in lakes, Phase three dropping out. But as of now, you know, things do look promising.<\/p>\n

Ankit Gupta<\/strong><\/p>\n

ADC, how much would be the contribution in FY26 and how do you see that growing in FY27, FY28, especially with the new CapEx coming online in FY20?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

So FY26 that would be close to about, you know, about all molecules put together on the ABC side would be close to about 25%.<\/p>\n

Ankit Gupta<\/strong><\/p>\n

Okay, 25% of the Swiss entity or consolidated<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Of the CDMO part of the business.<\/p>\n

Ankit Gupta<\/strong><\/p>\n

Sure, sure, sir. Okay. Okay.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

And yeah, I mean this share could keep on increasing in the future. Now with the joint offerings that we are giving along with Celonet as, as the partner for supplying the, the maps<\/p>\n

Ankit Gupta<\/strong><\/p>\n

And on the the fringe subsidiary. If you can share the numbers, what were the revenues and losses for FY26 and what is the outlook for FY27 and FY28?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Yeah, so the French facility did a revenue of close to about 8 million euros and we had a lot of close to about the 9 million euros for that particular entity. What we expect is that in the current year it should get up to close to about 11 to 12 million euros of revenue and the losses should come down to close to about 6 million.<\/p>\n

Ankit Gupta<\/strong><\/p>\n

And these are at EBITDA level, right?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

These are the EBITDA level.<\/p>\n

Ankit Gupta<\/strong><\/p>\n

Okay, so the breakeven is expected in FY20 or if it will go to FY29 at a beta level.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Yeah, I think in FY28 is when we aim that, you know, it should turn profitable. Especially now that we have about a year back we already received the ANSM approval. You know, that is where we are trying to get more and more projects for phase three which could potentially turn into. And we are also aiming for projects for commercial supplies as well. So you know, we just, and we have aggressively built for these projects. So we just need one or two of these projects to, to kind of fructify basis which you know, we expect that the profitability as well as the revenue should increase significantly.<\/p>\n

Ankit Gupta<\/strong><\/p>\n

Sure, sure. And just this last question on the interest cost, you know, like do we plan to hedge the the Swiss currency load that we plan to take in the<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Indian<\/p>\n

Ankit Gupta<\/strong><\/p>\n

Parent or it will continue to remain in in Swiss franc only. And how do you see the interest cost for FY28? Let’s say the refinance happens in Q2, Q3. So FY28, how should we look at the interest cost?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Well, the net interest cost FY20, we don’t plan to hedge it because as I mentioned we have Swiss franc revenues as well coming from India, which kind of acts as a natural hedge against the debt that we will be taking in Swiss francs in order to pay off the rupee debt as well as part of the debt could be utilized for future working capital and CAPEX requirements it could come up. So overall what we expect is that because of the refinancing activity, activity, the net cost for us should go down significantly.<\/p>\n

I would say we would see an interest cost of not more than a net interest cost of not more than 70 odd crores for the full financial year. So that is what we are expecting<\/p>\n

Ankit Gupta<\/strong><\/p>\n

For FY20. Interest cost at a console level would be around. That is what you’re saying<\/p>\n

Harshil Dalal<\/strong><\/p>\n

This would be. At a console level it would be close to about not more than 100 crores.<\/p>\n

Ankit Gupta<\/strong><\/p>\n

Okay, okay. Okay. Thank you. Thank you.<\/p>\n

Madhuri<\/strong><\/p>\n

Thank you. Sir. The next question comes from Viraj Mehta from Enigma. Please go ahead.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Yeah, hi. Congratulations. Only question is on India utilization. Obviously our utilization is very low today and pretty hopeful of ramp up in there. In terms of when you say 25 million tech transfer for a large product from a Swiss entity to Indian ARM will happen, but will there be price reduction? So like for Indian entity, what will the that mean in terms of revenue?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Well, it would not be well the revenue we would have to see at that particular point in time, but just taking the current run rate, even after providing the discount to the customer and close to about 30 odd percent still the overall margin at a group level is increasing, increasing by close to about 20 to 25%. So in terms of revenue it could be close to about 15 to 20 million. But in terms of profitability it will be much higher than what we’re making currently because of the clear cost differentiation that we see between the Swiss cost base and the India cost base.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Right. And that this project you mentioned which start by Q3 of this year.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

No, right now the tech transfer has started. So it will take, you know, a few years before the entire project can move over here maybe as an interim. What could happen is that at least part of the project could be moved which could be manufacturing additional intermediates than what we are already doing. So it could be a phase wise approach rather than everything in one go.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Right. So but if that is the case, then how are we seeing 500 crores for 28? Right. Because we are at 220. And if this does not come, then what gives you or what inspires that confidence in you? Especially given our history of at least last 18 months to go to 500 crores in India?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Yes, because this is not the only project that we are banking on. There are several projects in the pipeline plus certain orders already received, new orders which have already been received. So in the current year itself we will see at least 25 odd percent of growth in the revenue in the next year is where we would see many of the contracts that would be signed in the current year or the orders that would be received would you know where it would get translated into revenue numbers. So getting to 500 crores is not unrealistic whether this tech transfer happens or does not happen because you know, we have multiple projects in the pipeline and as I mentioned, for certain projects the contracts are already signed, certain projects the orders are already received.<\/p>\n

So where we. So for the new contract that we have already received, we are already, we are already providing now the validation batches and the higher quantities would come in the current financial year, by the end of the current financial year or beginning of the next financial year.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Sure, sure. So I understand like there is a lot of visibility when you talk about FY28 and my last question, Harshal is on the CHF now because CHF has depreciated against Indian rupee by almost, almost 6, 7% over last six months. And I’m only talking about the Swiss entity right now. I understand we have losses at some other but our largest profitable entity, Swiss entity. Is it fair to assume that whatever EBITDA that we make in the Swiss entity, and by that same logic PBT and PAT, even if we assume very little growth or 5, 7% growth that happens there, we will see a substantial increase in the numbers in inr, at least at the PNL level, an entire gains or translation of the currency would at least flow into our PNL in the INR level over next one year.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Well, I mean at an EBITDA level, even if say for example there is a 5% movement in the foreign currency, currency in the foreign currency like Swiss franc, you know, the cost base is also quite high. So from an EBITDA perspective, if you’re making say for example a 20% EBITDA margin, the impact could be for that 5% on that 20% which you know, which is the only impact that we would see because you know, most of the cost base is in Swiss francs while in the revenue, you know, we have have dollars, space francs, euros as well as gbp.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Right, I understand. But I’m saying if you were making just 100 Swiss franc as EBITDA a year back and your projection is 105 francs this year, the same translated into INR would be 110 rupees rather than just like just that gain should directly. That’s correct. That’s<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Correct. Yes, yes,<\/p>\n

Unidentified Participant<\/strong><\/p>\n

That’s all I’m asking. Super. Thank you. Thank you so much luck.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Sure. Thank you. Thank you very much.<\/p>\n

Madhuri<\/strong><\/p>\n

Thank you, sir. Dear participants, if you have any questions please press star and one on your telephone keypad. Next question comes from Mount Infra Finance Private limited. Please go ahead.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Hello. Hello. Yeah, first one question on the balance sheet sites. So my point is like we don’t have any capex as such in near term apart from the Japanese contributor. And like we have, we have actually experiencing almost 40% depreciation INR vis a vis Swiss franc. So in this scenario sir, why would we like rather than we are generating almost 500 crore of cash flow from operation. So in this context rather than sir, converting the existing loan to like foreign currency denominator basically is how could you justify this?<\/p>\n

And that too sir, we are taking this loan from a promoter entity. So what is the red, what is the significance of that? I know. So if you go by our blended cost, it is now around 6.7. So it will get reduced to 4% which means on a yearly basis is saved 50, 60 crore. But on the contrary like we have a growth rate of around 2500 crore. And if we are, we are opening up incremental risk of currency depreciation to a great extent. And given that we are already leveraged and our growth rate is actually higher than our gross revenue.<\/p>\n

So how would you reconcile that,<\/p>\n

Harshil Dalal<\/strong><\/p>\n

You know, as far as the currency fluctuation is concerned or you know, we have the revenues which are also denominated in foreign currency. So this liability would act as a hedge against the foreign currency revenue that we are going to get. So overall if you see over a period of, if you take 10 years, you know, which is the tenure of the loan basically over a period of 10 years, the total revenue that could be generated out of, out of the India entity itself, even at the current run rate on 500 odd crores, it is almost about 5000 crores in foreign currency.<\/p>\n

Against that the debt that we are seeing is close to about 800 odd crores. So effectively there is a natural hedge which is available as far as the debt as compared to the revenue is concerned. So from that perspective this would be actually an effective interest cost for us where there is a significant reduction that we are seeing as far as the cash outflow is concerned also as far as the interest cost is concerned. So which will also have a positive impact on the, on the overall P and L and the profit before tax and after tax.<\/p>\n

So that is, that is going to help us immensely as far as the cash flow of the group is Continuing and it will also act as a mechanism where you know, for any. Because India is coming out and there would be requirement of additional working capital as well as we move into the future as well as there could be capex requirements in the future. Not that something has been planned right now. So in case that is also required. This is the cheapest source of finance by which we can, can, you know we can basically have all of those expenses met.<\/p>\n

So that is, that is the rational behind getting this financing plus all of our securities, you know which have been given right now plus the repayments etc that are happening on a yearly basis. So that also gives us the flexibility. Plus there is also a clause where the interest can also be capitalized. So at least for the foreign first two years it is going to be paid only in time. So it will be capitalized as part of the overall facility which will be amortized, not even amortized, there will be a bullet payment at the end of 10 years.<\/p>\n

So there is a lot of flexibility that is, that is provided in this proposal and that makes it extremely beneficial not just for the India entity but for the group as a whole.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Yeah but sir, to be very frank, if you see that I have raised this question previously also like, like in last 6, 7 years our date has gone up by 3x from thousand crore to now almost 2005, almost 3000 crore near about. So I know we have in between we have gone through a lot of difficulty and that’s the one of the reason. I understand that. But if you see like our like our cumulative revenue growth is in, in single digit or let’s say high double digit. Whereas like if you, if you counted the only last year Swiss franc has gone up point to point almost 20%.<\/p>\n

So in this circumstances and to be very honest we are saying everything is notional but whenever we have to repay it back so we in that point of time like we have to actually in terms of rupee we have to pay back much higher in this context I would just, I would, I would rather. So what<\/p>\n

Harshil Dalal<\/strong><\/p>\n

I would say is that if my revenue was in rupees and if my subsidiaries were also not generating any revenues in Swiss francs and also at the India standalone level then I am with you. But here I have a lot of Swiss franc receivables, lot of Swiss franc inflows that are coming in which will be utilized to service the interest and the principal payment. So from that perspective I’m not running a foreign exchange risk on account of the forex fluctuation that is what I was trying to say.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

No, I understand your point but let us take the last year example, sir. Swiss franc has gone down by like it has depreciated by 20%. Even that if you put the same logic our revenue growth should be more than 20% because only currency fluctuation has given us should give us a 20% growth in terms of revenue which has not. Which is not. Which is not the case. So in this case like opening and as of now we are. We are adding. If you. If you take a base level Indian Pharma company Company vis a vis like our debt level is much, much higher.<\/p>\n

My only point into context is that now we are now from an investor and I want. I want to at least draw your attention. If. If you take. So we are now positioning ourselves the way like now we have come out with a PPT where we are trying to present ourselves which we. We were there. But now we are projecting ourselves vessel as a CDMO player. So if you compare Indian CDMO Visa we ask. We are trading at one fifth of a valuation in terms of revenue to EV or revenue to market. I agree to<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Your point that we are that as long as we remain of the company. But I don’t know to which companies you are comparing because you know our journey starts with the development of actual molecules at the Swiss entity, one of the most prominent. So yeah, I mean we agree. I mean that the valuation does not reflect the true value.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Yes sir. My only my point to draw your attention is despite we have expertise of ABC kind of a thing which is. Which is quite advanced in terms of technology. One of the most complicated. One of the reason and probably the most important reason for us not getting. Not getting that kind of evaluation is our date level, sir, because visa vis. If you compare other CDMO in terms of leverage, they are much less leverage. So my point, my only request. Kindly think of this sir. If any way we can read rather than keep on increasing our debt server and getting more leverage.<\/p>\n

Sir, if we improve our capital, we are not getting more leveraged.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

That is what I would like to correct here. We are not getting more leveraged. That is what I was trying to say. The leverage would actually go down. As you have already seen in financial year 26 that the leverage went down by about 11 million Swiss francs. Similarly, we will see the leverage going down as we move into the future. What, what will happen is that it will result into additional cash flow for the company. Because you know that will be a significant saving as far as the interest Cost is concerned and that will help us to take other initiatives as well, you know, which would be for the growth of the business and for accruing the value to the, to the investors.<\/p>\n

Madhuri<\/strong><\/p>\n

Thank you sir. The next question comes from Amit Mehendali from Rovo Capital. Please go ahead.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Thank you. Thanks for the opportunity. I think most of my questions have been answered. I have just one quick question on the resume. So is it fair to say that our revenue growth for next couple of years would be more or less in line with what we have done like 10, 12% going forward at console basis.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

So basically the idea is that over, if you take a next two to three year view, the CAGR of the revenue should be much higher than what we have achieved in the, in the last financial year. So overall from a revenue perspective we do expect close to about 15% as the CAGR over the next three years.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Right sir. And my last question is on the French entity. I think it seems that the break even is delayed by a boss, maybe 2, 3\/4 or 4\/4. Any color on what happened. And you know, how do we see going forward?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

So here for the French entity we, you know, as I mentioned, we have given the proposals for certain lead phase as well as commercial projects. And what we are also doing is to offer drug substance, which is our API business along with the drug product as a single offering where we are already now seeing positive effects. And you know, basically it does take time, you know, is what we realized from the time we obtained the ENSM certification to actually getting the customer in and converting into revenue.<\/p>\n

So that is where the time was consumed. But we are pretty confident as far as the business model is concerned and the fundamentals of that particular business is concerned. And because of the single offering of drug substance and drug product, you know, we do expect that a lot of projects should flow to the drug product part of the business.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

That’s it from end. Thank you very much.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Thank you. Thank<\/p>\n

Madhuri<\/strong><\/p>\n

You sir. The next question comes from Ramanu Chandak, an individual investor. Please go ahead. Yes sir. Yes<\/p>\n

Harshil Dalal<\/strong><\/p>\n

You are.<\/p>\n

Ramanuj Chandak<\/strong><\/p>\n

Yes. My doubt is primary goodwill. On 31st March 2025 our goodwill was 4053.56 crores. But we see on 31st March 26th it has increased it to 4798 crores. How did this increase?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

So this increase is largely on account of the foreign exchange exchange fluctuation that we have seen in the last one year. So you know, these assets get restated at the closing exchange rate. But otherwise there is no additions so to say. As far as the goodwill is concerned, it’s purely on account of the effects fluctuation.<\/p>\n

Ramanuj Chandak<\/strong><\/p>\n

Okay sir. Means majority of the goodwill we are holding is in Swiss entity. Means it is a quoted in, it’s not quoted in Indian rupee.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

So basically this is the. So this goodwill has two parts. One is the goodwill on the standalone India balance sheet. Which is, which is on account of the internal restructuring, the merger that we had done in 2017. So that is I think roughly about 550 odd crores. And the rest of the goodwill is on account of goodwill on consolidation. So because the India entity has investments in its wholly owned subsidiaries in Switzerland, Netherlands, etc. All of this investments would revalue to the fair value in 2017.<\/p>\n

So the difference between the fair value and the book value is what is sitting as part of this goodwill on consolidation.<\/p>\n

Ramanuj Chandak<\/strong><\/p>\n

Okay, that’s it. Thank you sir.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

Thank you.<\/p>\n

Madhuri<\/strong><\/p>\n

Thank you sir. Participants are kindly requested to ask two questions in the initial round. And we join the queue for more questions. Questions. The next question comes from Mr. Vikram Mehta, an individual investor. Please go ahead.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

So good afternoon again. Among the question of borrowings and the balance sheet, you see we have increased borrowing long term borrowings from 1150 crores to 1540 crores. The TA has gone up from 340 to 790 crores. The point being that you know, we don’t have any major capex planned. Why have we increased debt and simply added cash on the balance sheet rather than vice versa?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

So these are the new facilities that were provided as part of the syndicated credit facilities at the Swiss entity, you know, where we had to draw down the facilities and you know, since we have US dollars in hand those are basically kept as deposits on which we receive positive interest. Because the cost for the Swiss franc borrowing for us is less than 4%. So that is where you know we are able to get a positive interest on the, on the borrowings.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Oh, so you’re actually saying we are interest in one currency and paying lesser in another currency. Yeah, because<\/p>\n

Harshil Dalal<\/strong><\/p>\n

You know, and the investment is also in foreign currency only. But because you know, otherwise if we don’t draw down then there is a commitment fee that would be charged by the banks. So instead of paying the commitment fee it is in our interest to get a positive interest on the, on the cash that is drawn down.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

When do we reverse this in the sense, you know, this gives a very skewed outlook on the balance sheet. Right. To an observer, which was also the point which another investor was making earlier. Now maybe you know you could give some explanatory note with the notes to accounts to this so that you know, plain vanilla, it looks like a very heavy debt equity ratio which clearly is not the case. So again when do we see this reversing in the sense that when do we see you using the cash and bank balance to pay down and reduce the overall debt number at a control level?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

So from an. So I think the right way to look at it would be from a net debt perspective having the cash on the balance sheet and actually provides us the interest income as well. So the right way to even look at look at our P and L would be the finance cost net of the interest income because on the cash which is sitting we are also earning an interest income so effectively our cost gets reduced on account of the investments. Visa vis the borrowings. Would be the right way to look at the balance sheet rather than the.<\/p>\n

Fair<\/p>\n

Unidentified Participant<\/strong><\/p>\n

Enough. So could you just give us some guidance on what is the target net debt reduction year on year for the next 2323 years.<\/p>\n

Harshil Dalal<\/strong><\/p>\n

That would be at least to the tune of about 10 to 15 million Swiss francs. So roughly about 150 odd crores every year is what the target is.<\/p>\n

Unidentified Participant<\/strong><\/p>\n

You’re generating a cash flow of 500 crores plus a year and minimal plan capex. Why are we only targeting reducing the debt by 150 crores and may not, I mean why not something closer to 250, 300 crores?<\/p>\n

Harshil Dalal<\/strong><\/p>\n

So this is the minimum target. I mean it could be even higher than that. But yeah, as you correctly mentioned from the cash flow that we are generating X of the capex that we need to do every year, whatever is the additional cash and you know maybe a small amount for the working capital as well. The rest all cash is something that will go towards the net debt reduction.<\/p>\n

Madhuri<\/strong><\/p>\n

Thank you sir. That would be the last question for the day. Now I hand over the floor to Mr. Stefan Christie for closing comments.<\/p>\n

Stephan Fritschi<\/strong><\/p>\n

Yeah, thank you very much. Thank you for the interesting and informative questions. We are convinced we could answer them to your satisfaction. Also thank you for your general interest in Dysmuth Carbon Emsys. We are looking forward to a bright and good future of our portfolio company because we are very well positioned in the market and we are optimistic that we can reach our goals with this. I would like to say thank you and say goodbye till the next time. Thank you.<\/p>\n

Madhuri<\/strong><\/p>\n

Thank you.<\/p>\n

Stephan Fritschi<\/strong><\/p>\n

Thank you<\/p>\n

Madhuri<\/strong><\/p>\n

Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Doorsabha’s conference call service. You may disconnect your lines now. Now, thank you and have a pleasant evening.<\/p>\n","protected":false},"excerpt":{"rendered":"

Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon. Dishman Carbogen Amcis Ltd (NSE: DCAL) Q4 2026 Earnings Call dated May. 20, 2026 Corporate Participants: Madhuri \u2014 Operator Stephan Fritschi \u2014 Executive Vice-President Business Units; Deputy CEO Harshil Dalal \u2014 Global Chief Financial Officer […]<\/p>\n","protected":false},"author":2377,"featured_media":147581,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[6349],"tags":[10169,9175,9104,9092,14492,10089],"class_list":["post-183585","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-transcripts","tag-earnings","tag-earnings-call","tag-earnings-conference","tag-earnings-transcripts","tag-financial-results","tag-quarterly-earnings"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/05\/Transcript-thumbnail.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":171116,"url":"https:\/\/alphastreet.com\/india\/dishman-carbogen-q1-fy26-earnings-results\/","url_meta":{"origin":183585,"position":0},"title":"Dishman Carbogen Q1 FY26 Earnings Results","author":"Divyansh_Kasana","date":"September 10, 2025","format":false,"excerpt":"Dishman Carbogen Amcis Ltd is engaged in Contract Research and Manufacturing Services (CRAMS) and manufactures and supplies marketable molecules including specialty chemicals, vitamins & chemicals, and disinfectants. 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