Zim Laboratories Ltd (NSE: ZIMLAB) Q3 2026 Earnings Call dated Feb. 13, 2026
Corporate Participants:
Anwar Daud
Shyam Mohan Patro — CFO,
Analysts:
Deepika Sharma — Analyst
adhur Rathi — Analyst
Gautam Gupta — Analyst
D.P. sancheti — Analyst
Poojit Agarwal — Analyst
Sarohit Balakrishna — Analyst
Presentation:
operator
Good morning ladies and gentlemen. I’m Aakash, moderator for the conference call. Welcome to XIM Laboratories Limited Q3 and 9 month FY26 earnings conference call. As a reminder, all participants will be in lesson only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch tone telephone. Please note this conference is recorded. I would now like to hand over the floor to Ms. Deepika Sharma from Go India Advisors.
Deepika Sharma — Analyst
Thank you Akash. Good morning everyone and welcome to the Q3 and 9 month FY26 earnings call of City Mortals Limited. We have on the call Dr. Anod D, Chairman and Managing Director, Mr. Vinceta Kamal, Director of Finance Mr. Shyam Mohan Petra, Chief Financial Officer and Mr. Vandal, Investment Innovation. We must remind you that the discussion on today’s call may include certain forward looking statements and must be therefore viewed in conjunction with the risks of that the company faces. May I now request the management to take us through the financials and business outlook subsequent to which we will open the floor to Q and A.
Thank you. And over to you sir.
Anwar Daud
Thank you Divinya. Good afternoon everyone. A warm welcome to all participants joining us for Wind Laboratory Ltd. Earnings conference calls for the third quarter and ninth month ended December 31st. I hope you have had the opportunity to review our results and the accompanying presentation available on the exchanges. Let me begin with an update on our EU GMP Remediation and CAAA Implementation plan which continues to remain our highest strategic priority. We have submitted the majority of CAAA responses and addressed most regulatory queries based on our ongoing engagement with the authorities. We understand and the audit is expected to be conducted during the first half of the upcoming financial year temporarily in the next quarter.
In preparation, we are proactively undertaking all necessary steps to ensure full compliance with regulatory requirements and remain committed to maintaining the highest quality and compliance standards. We recognize that EEGMP certification is critical to unlocking value regulated markets. In parallel, we continue to undertake proactive measures to maintain business continuity through alternate certification and site transfer initiatives of select key products, ensuring minimum disruption to customer commitments and strengthening our regulatory footprint. Highlight the Pharma segment continued to demonstrate steady traction during the quarter supported by improvement in our grave business. Ultraceutical segment also witnessed better contribution during the quarter supported by recovery in the Megapri Nutra PFI business while 9th month performance remains largely stable on the revenue front, quarterly performance ended performance reflected improvement across key operating metrics including operating income, EBITDA and overall profitability driven by better business mix and improved operational efficiencies.
During the period we also completed a preferential issue raising approximately 35 crore. The proceed will be utilized towards expansion of our dedicated concrete and block conversion of the nutraceutical capability into formulation, focus, facility and strengthening regulatory and CAA related compliance initiatives. These investments are expected to enhance our long term growth capabilities and expand our tenants and value added segments, further strengthening our organizational capabilities. We also made three senior leadership additions during the quarter. Mr. Vikrant Demere joined as President International Business, bringing over 26 years of experience across global pharmaceutical markets. Additionally, Mr. Sridhar Reddy, Vice President Quality Assurance and Mr.
Vimbra Pandey, Vice President Human Resources were designated as Senior Management Personnel, further strengthening leadership across people, compliance and quality functions. Looking ahead, the upcoming quarter will remain important for us subject to stability in the geopolitical and macroeconomic environment. We remain optimistic about closing the financial year on a strong goal. To summarize, we remain focused on completing eugnpoint remediation, strengthening business continuity, middle and investing in long term growth platforms. With this, I now hand over the call to Mr. Shyam Patro who will walk you through the financial highlights for Q3 and 9th month financial year 26.
Over to you Shyam.
Shyam Mohan Patro — CFO,
Thank you Dr. Dhao. Good afternoon everyone. Let me provide a summary of our financial performance for the quarter ended December. The Company reported a total operating income of approximately 1,087 million rupees reflecting improvement in both a sequential and year to year basis, supported by strong traction across our core pharmaceutical business and recovering the selected nutritional orders. EBITA for the quarter stood at approximately 145 million rupees translating into a margin of around 13.4% compared to 13.8% in the previous quarter supported by improved product mix and operating leverages. Profitable tax stood at 44 million rupees reflecting improvement compared to the previous quarter.
For the nine month period, the total operating income stood at approximately 2,691 million, broadly in line with corresponding period last year. With profitability remaining impacted due to higher operating expenses and continued investment towards regulatory and compliance initiatives. On the sequential basis it continued to grow with a steady momentum. Margins in Q3FY quantities improved compared to previous two quarters. Export business increased significantly in quarter three FY 26 to 961 million rupees, an increase of 23.2% year over year, contributing 88% to the total operating income. Revenue contributed from NIP and ATF stated rupees 152 million representing 2% of operating income on R&D front rupees 74 million allocated for Bing studies and reduced demonstrations advancing the innovative product NIT and OT pipeline.
To summarize, the company delivered steady sequential improvement in operational performance in the quarter and remains focused on strengthening the core business, improving margins and supporting long term strategic initiatives. With this we now like to open the floor for the Monday. Thank you.
Questions and Answers:
operator
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 your 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. In the interest of time, we would request the participants not to repeat the same questions. Ladies and gentlemen, if you have any questions please press star and one on your telephone keypad. First question comes from Mr. Madhurati from Countercyclic Investments. Please go ahead sir.
adhur Rathi
Thank you for the opportunity. Sir, I. I was looking at our previous annual reports and so I’m trying to understand sir, what is the issue with this NIP and OTF product? Because Even in during 2013-2015 period we were very optimistic on these products but they haven’t been able to scale up. And I think we were at a conference in 2017 or 2018 we were speaking about this for the European market but even that hasn’t been able to scale up. Is the problem in product selection strategy or the product uptake strategy for these differentiated products? That’s why it’s taking so long and how do we plan to scale it up going forward?
Anwar Daud
Well, as I already opening remarks, NIP products are Europe centric and we know in the last July we were inspected and we have received a non compliance in bmp. So that’s why the products, the traction which we were supposed to receive with a few of our products which had completed the final run on the way to receiving will not be put inside the market. In spite of our having signed very solid contracts with points towards an inflection point in the company’s NIT business, we are waiting for this non compliance to be completed. We have strong support from the partners with whom we have signed agreements and out licensed these NIT products.
And as I said earlier we are just waiting for the remediation related inspection and everything going well, we will be well on the way to actually be able to demonstrate the promise that the has shown to us through the agreement. But this issue is very near term, right? So this issue was only positioned for the last six months but prior to that in 2018 we had done a conference at CPHI or something like that in Europe and we were speaking about NIP and the OTF products. So if I were to consider any generic molecules in which we are providing this differentiated delivery products sir, on a conservative basis, how much of the market can actually shift to these kind of products which are either the NIP or. The OTF kind of products. 2018 was the period when. These are already picking up in the RW and pharmacy markets. The only question is about the EU markets where this has to be commercialized and as Dr. Daub explained this will happen once we complete our remediation. So I think on the timelines 2018 is when we started development is not when we were planning to commercialize. Our commercialization timeline was set for 2026 which has been moved up by a year or so just because of the UGMP remediation process that we are in.
adhur Rathi
Right? Sadhu, where should I look at our business from FY27 perspective in terms of top line and bottom line? Where do we see our business growing. To start with? What we have in our hand is our regulated and emerging market business.
Anwar Daud
We continue to see the traction there because one by one most of these MIT products are also getting registered in our market where we already have a problem. As you must have noticed during my remarks, we have in place now a fantastic team of business development, region wise and very dynamic leader for the team has joined the company recently. We hope even in the emerging market we don’t know. I can’t give you the numbers yet, but I can. I’m sure that there will be strong traction in the NIP products.
We are all excited about Getting registered one by one in the markets that we have. And this year you would see demonstration of that in the row and emerging markets in terms of the business that we can get for these energy products. And of course a critical milestone is looking the remediation for our EU accreditation group which is expected by June or July. And after that we already have the agreements in place. We are politics. We have, we have made various announcements like you know, some of our products getting approved by TBA in Australia, a few products getting approved in UK mhra.
Our filing has been consistently progressive and few announcements have been made about the approval of some of our products. It will be nine months. So the EU certification or inspection and certification, these kind of inspections will be the trigger for the business starting moving forward. And that’s when we can give you better numbers. Right.
adhur Rathi
So would it be fair to assume that post this EU inspection clearance we can scale our nib OTF product revenue to 20cr on a quarterly basis. We’ll keep you updated as the quarter progress. Right. So that was from my. Sir, thank you so much and all the best.
operator
Thank you so much. So next question comes from the line of as Chatterjee from Ageless Capital Finance. Please go ahead ma’. Am.
adhur Rathi
Hello sir. Thank you for taking my question. I wanted to know a bit about when is the audit for this UGMP.
Anwar Daud
And several action taken reports have been submitted to the authorities and by this time accepting for one or two points related in the kappa. Most of the points have been considered as resolved by the authorities in the responses to the action taken reports. They have also indicated to our partners who are related to this audit that they would intend they were intending to come in the first or second financial year, not the financial year, the first or second quarter of the year. The first quarter is almost through. I think they take about one to one and a half months.
You know they set a date and that’s about a month to a month and a half before they actually come in. So we believe April, May or June would be next quarter would be. We would be, we would have a specific date where we would be told when the authorities will visit to actually inspect the ka. And and we are very positive about the way the QA team of the operations team has handled this issue respecting the and taking corrective action to show an improvement in the entire quality concern of the company that where we are with the capa.
And of course we have also been preparing different inspections because we cannot wait for one milestone. We have been filing, you know, for the Fix inspection in a couple of. Countries. Related to the alternate facilities. We have transferred one product and in the process, in the process of transferring two more products to alternate sites de risking the entire MIT business timeline regardless of this inspection. So that has been going on now. Regarding your quarter number, I think I’ll hand it over to Mr. Pa and based on what what we have at this moment, maybe. Quarter four in a similar line. Since it is in the middle of. The quarter, I will not disclose much. Of the numbers at that rate, but it will be a single line.
adhur Rathi
Got it. And regarding the alternate sites that you mentioned that you’re transferring the product, where are the sites located?
Anwar Daud
And. This will have an impact on our margins, right? Given that we are taking the other side, if you could quantify the impact. Something there. Because we would also be having similar expenses when we manufacture. Right? Okay. So if I understand correctly. The that impact will be actually the cost it takes us to manufacture for our film versus the cost it pays them to contact manufacture for us. It is a very small fractional addition to the entire cost. The margin will be there potentially. So then with all your like four or five products that are supposed to be launched, when do we see the impact of launch? Given that you clear the EU GMP audit, will it be the second half of the year when we see a sharp uptake. If you could just give a timeline to that. Got it. And so how much of spending are required for this CAPA dependation and everything like the recent foundries that you did? How much of that is utilized for all this regulatory process?
adhur Rathi
How much of that? How much like how much funding do you need like for doing this Kaapa and everything like how much of the fundraise that you did, what amount have you utilized for this all this regulatory process?
Anwar Daud
I think this to you better because this is a plan. I. I just said that we are planning to have a commercial issue and then at this moment I would say that we are comfortable with the subject that we have planned earlier in the last year for the Kaapa and we are comfortable with that. You know, the budget that we have, we are well within the budget but we are planning to have you know, a surplus because of buffer. So that after if some comments could come up during a radiation inspection, we should be ready to be able to bring any other compliance that is required and put it in place very fast.
But this is just a budget and a plan to keep some tight for remediation. Just taking care something what we have and what we have done and the time that we have taken. We are very near the end game and we are waiting for the authorities to just announce the dates.
adhur Rathi
Any amount that you would want to quantify for this Kaapa remediation whole thing that is going to happen.
Anwar Daud
Yeah. So out of the funding what we are taking around 35 crore. Around 10% we have allocated for the kappa.
adhur Rathi
Got it. And so could you please disclose the inventory days and receivable days for this 3Q third quarter or nine months.
Anwar Daud
They are on the same line. Inventory which should be around. Inventory is around 94 days. And this year will be around 105 days.
adhur Rathi
Got it sir. Thank you. That’s all from my side.
Anwar Daud
Thank you ma’. Am.
operator
Participants, we kindly request you to restrict with one or two questions in the initial round and get back to the queue for the more questions. The next question comes from the line of Mr. Gautam Gupta, an Indian investor. Please go ahead sir.
Gautam Gupta
Thank you for letting me speak. Mr. Daud. I want to ask about this preferential issue that why do we have to do or do this preferential issue at this price? That would florent reason.
Anwar Daud
Hello. We have a small capacity remaining and we think that in the interest of the company and its investors it’s not prudent to borrow this kind of money at this moment when we are well funded. For the business that we are doing. We need to complete and tie up certain end which would result in better cost control, better margin for the company and better regulatory compliance as well. So all those initiatives which were on the line at some point which were to be funded and we have not had this non compliant inspection and based on that available we would have used internal approvals for these briefings are necessary and need to be done.
So now we are moving upon. And in the interest of all investors. But as well that the company completes its CAPEX program, initial CAPEX program so that it is well prepared for the next wave where the nip business takes strong traction and for the future. In the future we do not come across very easily. We can change the culture and infrastructure is in place. The kind of business that we are looking forward to. Just as we are at the bottom of the cycle that we are having a deleverage right now and we can see that the end to this tunnel is just three to four quarters away.
Then why do we have to do this at this price that to to the director or the person who was already an investing in the company prior to this. That was such a big chunk around 9 to 10% of the company. That is my main concern regarding this. Instead of company getting over. Debt, this. Is a better way to go to investors who are known to the company and know the company and believe in the company and support the management in achieving its target in spite of the small hiccup that has happened here for a year. And I think if the existing investors benefit at this moment from whatever. Yeah, it’s not. It’s not. I think it does not manage any other shareholders prospects. All minority shareholders have been negative. The rights issue can also be done if that’s the case. Rights issue can also be done if that’s the case.
Gautam Gupta
Have you considered doing the rights issue instead of preferential issue? The promoters has to be then contribute and as of now we are not part of that on that angle. Thank you. Okay, thank you so much.
operator
Thank you. Sir. Next question comes from the line of Mr. Dar Pandya from Interest Capital. Please go ahead.
Gautam Gupta
Yeah, hello. Hi. Am I audible, sir? Yeah. Yes. Just to take over from the previous participant. And then I have some questions for the main business. So the. The participant. The issue that you know, we see as a. As analyst is that, you know, such a big investor coming again in. In the. In the company and then, you know, there might be some selling in the company again in near future. We do not know. And such such issues are being highlighted in the past also. So that was the concern of, you know, giving one big chunk to the.
To an investor rather than us distributing to some other people as well. So that, you know, there is not a pressure on the company in near future whenever there is some good or some bad news. So that was something that, you know, we wanted to highlight as well. But I hope that, you know, since management has a relationship with. I think we have gone to an investor who is very comfortable with the way the company is managing its affair. And as of today, if you see as of today the investor hold 19% earlier. Correct. So the questions are coming from the people that why Matthew was telling and why they were reducing their equity.
So as a matter of confidence they said okay. Then whenever you need fund they added. So as a strategic investor, what Dr. Daud mentioned that to just show the confidence that we are going on the right track. He added, he offered for the, you know, it goes through it will become 22 different. A few, I think become 18. He has actually started with 22 in the. There was a period when it was diluted about 11%. Now he always the way the management is running this company. When the company leave, we came back. So that’s his confidence in that want to borrow and throw that on the balance sheet.
And it needs to complete this regardless of whether it has the business. You know, regulatory cannot wait for the business to start right. And in the interest of all my shareholders. Correct? Absolutely, sir. We understand that investors trust is kept on with the management. Just that it was suggestion, nothing else. And I hope that you know this turns out to be in a good way for investors. Thank you for the detailed answer.
Anwar Daud
Second question is on the pharma segment which has. And upon in that only in the neutral. Understood? Yeah. What we are doing is we are withholding our remarks on the numbers of the forum and those numbers specifically because the figure would be any regulatory market accreditation that the company has now going forward where you know us informing our shareholders on where we would end up with the Mambon would be a much more logical and realistic way of describing the future course of the company. As of this moment we are in reality so we are saying that our emerging markets will continue to grow and revolver because we are taking all the measures on a conservative basis where we have strengthened our emerging market stream.
I spoke about the kind of people who have joined and in a position to you know, even without the regulatory market entry with our NIT products. I believe the company is in fact doing well with the NIT products in the emerging market and the kind of other products and the kind of other offerings that we have for the existing markets, existing clients. So it will continue to grow because overall NIP business has a faculty that the entire business we have shown quarter to quarter, you know, action in those offerings regardless of what they in Europe that will continue.
That momentum will continue because more registration, more bridges have been filed and registrations are coming in one by one in these markets as well. And now with a very well strengthened business development team expecting better results in a quarter or two. The investors would be able to see that. We’ll wait for your update on this. Join the queue for more Qari sir.
Gautam Gupta
All right, thank you.
operator
Thank you. The next question comes from the line of Mr. D.P. sanchetti from Mania Finance. Please go and check. Please go ahead with the question, sir. There’s no response from the sir as I’m taking the next question from Amit Bajpai and please watch out.
D.P. sancheti
Okay. So Amit, please go ahead to the question. Sir. I don’t find any response from Abit sir too. So taking the next question from Mr. Arohit Balakrishnan from I Thought PMS. Please go ahead, sir. I just wanted to first understand your base businesses. This was a good quarter. So how do you See this quarter Q4 in terms of the base business?
Anwar Daud
We are going ahead with the base business as and we have already there was conventional growth, 10% of things on that. The energy business inside those businesses showing increasing traction and in the fourth quarter.
D.P. sancheti
Okay, so there are no geopolitical headwinds. I mean basically last year quarters we were going through some challenges.
Anwar Daud
Yeah, those challenges are easing out but not gone altogether as of this moment we can give a. All we can say is that it’ll be similar to the last quarter. Because historically Q4 is at heavy quarter, usually a very good quarter. So. So you don’t see any change in that is what I should. Answer on the. On this in the fund, the procedure funding you mentioned, you are making one block for us for a product. So from. From what I can mean is that we’ve not yet received the MA for that. So what is it that I mean so when can we expect that and because we’re going to put more money so what gives you that comfort and how are you thinking about the timelines towards getting the MA etc?
Deepika Sharma
We believe we already have this one product, one block in a separate block because the product requires a separate block to be there. We believe once we start we will be able to have an accreditation by I think the next March and this should become a second time for manufacturing this product because there’s one product we feel has the potential to actually. Make traction to the company’s it’s already in shortage on Europe all the regulated markets. So once we start manufacturing used production this is also a very key measure because the existing facility as well as the block when it is converted into a separate site will give us actually two places where we believe all and continue to manufacture this product because the volumes are very high according to the agreement that we have signed.
So it’s a very strategic product for us and the by March 27th we would have this block converted into a site. It’s not that we will not be able to manufacture now in the existing facility, but converting it into a separate facility, a separate site with its own accreditation makes sense for the company and depend upon one type of. Got it.
Anwar Daud
So you’re saying March 26th or so March 27th, March 20th start converting the. Existing block into a site. There is already a block. In our compromises it will become another site. So we will continue to use this block but we will convert it into a site by mark. It doesn’t actually affect the manufacturing capacity that we have. It ultimately derives the company’s operations in terms of a very key product that the company has where it believes that it can achieve some kind of a dominant position in several markets. So we will have two sides for this going forward and that helps the company to make the company a bit customer comfortable.
D.P. sancheti
And in terms of the approval for this. Can I just finish this question?
operator
We have to give a fair chance to all the other participants. In the interest of time, I would request you to join back to the queue. Thank you, sir. The next question comes from Mr. Dipeshancheti from many of finance. Please go ahead, sir. Please go ahead with the question. Sir. Your line is unmuted.
Gautam Gupta
Yeah. Am I audible now? Yeah. The question regarding the fundraise only, do you think that was the. The price at which we did the fundraise was the fair value of the company and what benefit does the strategic invest?
Anwar Daud
Hello. Hello. I didn’t get your question. I’m saying that the price at which we bought. We got the strategic investor. Do you think that is a fair price? It is in full compliance of the city guidelines because these are the guidelines for bringing in a preferential issue. You know my thinking, whether it’s a fair price or not a fair price doesn’t matter here. Something you will agree with me is that for the internal approval which the company was looking forward to, to be able to complete its different capex initiatives to prepare the company for the future growth and traction that we believe once we enter the regulated market we will have. We shouldn’t wait for the business to restart to be able to do those things because that will actually put us behind and in the future that would lead to more technical and logistics issues they wanted to avoid.
That’s in the interest of the company’s overall strategy to enter the European market is a key product customers. Also the agreement that has been signed are of substantial nature. They are very important for the company’s growth and sustainable growth in the European market. And they are the best way for the investors as one of the customers. The best way for this community going forward is to actually manufacture these products in a compliant, in a GMP compliant atmosphere. So that confidence of the customer is always there that whatever item was an item and move on from there.
Also capacity is being increased through these CAPEX initiatives because as I said that we have an excellent row and evolving market team now led by a very capable leader who has experience. So execution planning, you know, planning for recovering and actually demonstrating that the high R and D costs that the company incurs actually result in.
operator
Thank you so much Sudipesh has left the queue the participants in the interest of time we request you to stick with two questions in the initial round and get back to the queue for more questions Next question comes from the line of Mr. Ashok Shah from Akilibya in Moscow Please go ahead sir thank.
Gautam Gupta
You for allowing me sir Michael, again a question is regarding the preference allotment sir does say investor had not any any trust in the capability of the management and also promoters and was holding a large number of quantity of shares and he sold out and again we are giving shares to the same investor why management has got trust in this investor where the same investor doesn’t have a trust in the capability of the management and the promoters and also sir this allotment is done at the last three years lowest price not at the highest highest price so my suggestion I am unable to understand many replies given during the call so it is not justifying the allotment so I suggest that it should be cancelled immediately if not allotted till that.
Anwar Daud
You could ask a question. Because you have already asked if why did you set it as the right? I’m saying that you know I don’t have any control over it. You must choose this investor that every investor has a right to buy company share in fact the idea should be that we must appreciate that this investor came in the moment the company needed money and it will be address from other shareholders that there is no debt on the balance sheet we have what we have already borrowed so that’s how it has been done Certainly in sight of selling or whatever when the company needed fund we have come forward and show repose this confidence with the direction the company is taking so any investor including the investors present in this call cannot be blamed for selling or buying the share when they.
I mean at least the investor is showing his confidence in how the company is moving forward and putting his money on the line so if the all other investors felt that this is a bad price we wouldn’t be having this price.
Deepika Sharma
As I understand from your reply that company was unable to raise the fund via that way because equity always a costly affair and since our accounts are not proper there or something like that so we are unable to raise the funds by thereby so we raised our equity at such a lowest price. The important part is that we needed the swiftness, the speed was important, we needed this fast because we need to complete this project and the customers are looking for supply quickly so that is why we went to an investor who is trusted who has confidence in the management so that this process could be done very swiftly.
So speed was of utmost importance here and price wise like I already said and Dr. Daug has mentioned it is a semi mandated price on the base of last 90 days volume. So that is not much we can do there. Which is the reason we have gone to this investor and done this raise because we did not want debt and we wanted this money to go.
Gautam Gupta
So what I was wanting to add was that it’s not that the company was unable to raise debt. The fact is the company did not want to raise any more debt. So does that mean the as per your answer this company was unable or any of the bankers in India was unable to give fastest money to company?
Anwar Daud
I’m saying that the company did not want to in the interest of the balance sheet and the other shareholders and what they look at and the kind of thing all investors including the promoters have in mind, the balance sheet should be stable and able to service on its way. Financial management.
Gautam Gupta
Have you already alerted the case or are you going to cancel interview? Sorry to interrupt. I request you to come back and join the queue for more questions. Oh cheers.
operator
Next question comes from the line of maitricia from SAK Capital. Please go as.
adhur Rathi
Hello, Am I audible? Hello? Yeah, just one question. You mentioned that our NIT products are doing well in the regulator in the emerging markets and so could you give me like a quantification of what the sales are from emerging markets and what the sales are from regulated markets for the current already been provided? I can.
Anwar Daud
Yeah, I think regulated markets is not there right now. The entire business is coming from around and farmerging markets. So the entire sale that you see of the innovative products is from row and emerging markets. There is no regulatory market sale in there.
Anwar Daud
Right. Okay. And once this remediation is done we can expect sales coming from the regulated market. So any sort of targets you have of what percentage of NIP dot products would they contribute to the total overall revenue?
Deepika Sharma
Like you said, we don’t want to. Quantify it right now. Once EUGENP comes back that will be a better time to quantify this. We will have better visibility. So in coming quarters we will be. Able to give you that number.
Gautam Gupta
Okay, that’s it for my side. Thank you.
Deepika Sharma
Thank you ma’. Am.
operator
The next question comes from Poojit Agarwal an indigenous. Please go ahead sir.
Poojit Agarwal
So I just had two questions. The first question was. Am I audible? Hello.
Anwar Daud
Yeah, yeah, yeah.
Poojit Agarwal
So the first question was in terms of key hires like I. I Think. That is a very solid move and I congratulate you on that. I just wanted to understand like I. Mean. How much value can be extrapolate from row and farmerging market which are the key row and emerging market that we’re currently targeting. Since we genuinely have a very draw. And width of products. In Middle east and CIF at this moment we believe the kind of product that we have very good opportunities there and we are looking at about 20%. Got it, got it. So these are ex Bangladesh, right? Because Bangladesh we are very heavy as a company. So these are ex Bangladesh we are focusing on.
Anwar Daud
Yeah, yeah, yeah, yeah. The 20% growth would substantially come from Denmark. Yes, yes, yes definitely.
Poojit Agarwal
And the second question was regarding like how is the buyer confidence or the people who we partnered with in Europe? Like I mean like I just wanted a sentimental check. Like I mean how exactly is the buyer contract?
Anwar Daud
They have been very supportive and we have been in constant touch with them and you know we are quite a transparent company in terms of what goes on inside the company and we believe in sharing with you guys also every quarter. So we have been keeping them abreast on it on the action happening here including action taken reports that have been filed with the authorities. Every time the authorities come back with some formal note about what has been accepted and especially the dates at which they are looking at, you know visiting for a remediation infection or a leave infection, all those things are being shared with them.
We keep meeting them at this moment. I would say fundamentally we enjoy their support and we are looking forward to launching these products in their own markets also. They are also engaging with the authorities at some level to expedite inspections in their own territories. That is very good to you doctor. Thank you so much.
operator
Thank you sir. The next we have a follow up question from Sarohit Balakrishna from I thought pms. Please go ahead sir.
Sarohit Balakrishna
Yeah, thanks for the chance again sir. But just two questions. One was this so on. Just on the previous question that I was asking why you said but you’ll be able to make it as a separate facility by March of 27 but you can still manufacture from your existing plant. So I just wanted to understand by when do you sort of see this contributing Because I, I feel that you not yet got the MA from for this. So that was my question actually by Wendy. You see this we are about.
Anwar Daud
Yeah so we are about to retrieve. We have completed the required number of days the moment, you know hand I think within a couple of months we would have also you know in Some products and some territories like UK we have already got the MA and audited so that once we are inspected and once the we can start supply. We bought the MA from UK you said. Sorry I missed that. Yeah, yeah we. We have one MA from UK already there with us, one MA from Australia for one of the lit products already there we have a few ready to approve products. I think about five products are already under approval. That means the moment we have our inspection completed we would get there because the finding has continued, the submissions have continued, right?
Shyam Mohan Patro
No, actually I was asking about this specific product was my question that I know that we’ve got the. My question was specific to this product which we have which for which we are trying to create a separate.
Sarohit Balakrishna
Yeah, yeah.
Anwar Daud
We are on the at the last fag end of filling our NA in UK and even in Europe. The last answer I can give we have the small meeting. From our side.
Sarohit Balakrishna
So essentially you are expecting some things to happen In Financial Year 27Post receive a lot, right? Yes. For this product. Yes. Okay, second question on this was. So you mentioned that you have given all your almost everything from kappa point of view something just in life but more or less it’s done and you’re expecting an audit sometime in the next three, four months. So. And also you mentioned that you have initiated one product transfer and also initiating product transfer for a few more products. In terms of site transfer, If let’s say there will be any. Let’s say there is some delay because of unexpected reasons etc in the audit, what is the. How do we see like the site transfer? Can you just explain that process?
Anwar Daud
Yeah. Once the site transfer happens then with the six months of stability for these products we can file variation and introduce this ultimate site as a site. The types we have in mind are already registered or registerable in the various regulated markets that we are looking at. And within I think after six months of stability and all those things can filing the application can be done. And after the filing application it requires within three to four months for the variation to be accepted and then we can start manufacturing in these sites and supply according to the agreement that.
Sarohit Balakrishna
Okay, so worst case you are saying that this year, this the coming financial year, you will have some sales from the exact transport side.
Anwar Daud
That’s what I think. And if the UN in case we.
operator
Get request you to come back to me please. Thank you sir. The next question comes from PRNA Paris from Altis Financial Partners. Please go ahead.
Poojit Agarwal
Hi, thank you for the opportunity. My first question is EBITDA margins improved sequentially but remain under pressure on a ninth month basis. When this management expect expect margin normalization.
Shyam Mohan Patro
I think entry into Europe and the regulated market is one inflection point where you will see the margins improving. What we have been doing very fast quarterly, quarterly, proportionately the proportionate sales of these products in regulated market territories is another margins and the business which are going on will be an additional. So there are few effects addition to the existing business and also addition of high margin products. So both these effects will be visible in our first.
Poojit Agarwal
Okay, all right, next question is depreciation expense has increased. Is this primarily due to recent capex capitalization of regulatory and facility upgrade investment?
Shyam Mohan Patro
See, during the process we are completing. The projects as well that has been. Given incremental to depreciation. Because we have several projects one by. One the process has been completed and put to you that will transfer in the long run for the revision part.
Poojit Agarwal
Thank you ma’. Am.
operator
In the interest of time, that will be the last question for the day. Now hand over the floor to the management for closing comments.
Anwar Daud
Thank you very much for joining us on this call. We appreciate the patience and the interest investors have shown and we want to assure the investors couldn’t hear that we’ll continue to work towards resolving this hiccup. And of course thank you for your patience and thank you for your understanding that this is a just a hiccup in the long and all the good effort that this company has put in. We certainly are very positive about coming out of an involvement with recap and we well on the way to delivering on the promises that the company has in the form of the product that it has and the that it has had.
I think the strategy remains the same and we look forward to present interaction during the coming quarters in the form of being able to give you better results and good performance better performance of the company on all fronts. Thank you very much. Have a good time.
operator
Thank you sir. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation. You may disconnect the lines now. Thank you and have a pleasant day.