Ladies and gentlemen, good day and welcome to Ami Organics Ltd Q3 FY 2025 earnings conference call, hosted by JM Financial Institutional Securities Limited. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Krishan Parwani from JM Financial. Thank you, and over to you, sir.
Yeah, good morning, everyone, and thank you for joining us on Ami Organics Q3 FY 2025 earnings conference call. Today we have with us Ami Organics Management, represented by Mr. Naresh Patel, Chairman and Managing Director, Mr. Abhishek Patel, Vice President Strategy, and Mr. Bhavin Shah, Chief Financial Officer. I would now like to invite Mr. Bhavin Shah to initiate the proceedings. Over to you, sir. Thank you.
Thank you, Krishan. Good morning, everyone. We are pleased to welcome you all to our earnings conference call to discuss Q3 and nine-month FY 2025 financials. Please note that a copy of our disclosure is available on the investor section of our website, as well as on the stock exchanges. Please do note that anything said on this call, which reflects our outlook towards the future or which could be construed as forward-looking statement, must be reviewed in connection with the risk that the company faces. The conference call is being recorded, and the transcript, along with the audio of the tape, will be made available on the website of the company and exchanges. Please also note that the audio of the conference call is the copyright material of Ami Organics and cannot be copied, rebroadcast, or attributed in print or media without specific and written consent of the company.
Now, I would like to hand over the floor to our CMD, Mr. Naresh Patel, for his opening statement. Over to you, sir.
Thank you, Bhavin. Good morning, everyone. I hope you all are doing well. On behalf of everyone at Ami Organics, I would like to extend warm New Year wishes to you and your families. As always, I will begin by discussing our perspective on the industry landscape before moving on to our performance for the quarter. Starting with the global economy, we continue to face significant uncertainty, primarily driven by geopolitical tensions and the change in the leadership in the U.S. We will closely monitor how these factors evolve as we move further into 2025. Focusing on the chemical industry, raw material prices have bottomed out, but demand has yet to form as anticipated. As a result, I believe the current scenario of low raw material prices and modest demand is likely to persist through the first half of calendar year 2025. Now, let's look at the industries we saw.
Starting with the pharmaceutical intermediates, demand remains modest, with raw material pricing remaining steady throughout the quarter. On the CDMO-CMO front, we are witnessing a significant influx of opportunities in India. As one of the major players in the industry, we had already anticipated this trend. Accordingly, while building the new site at Ankleshwar, we developed all three blocks with the latest technology and machinery, keeping these opportunities in mind. To sum up, we are fully prepared to capitalize on these opportunities, and I believe this will be one of the key growth drivers for us in the coming years. On the battery chemical side, while the long-term outlook remains strong, we are observing delays in the commissioning of new battery capacities in the near- term. We are adopting a cautious approach in the segment and focusing on capital expenditure for additives where we already have long-term contracts in place.
The Semiconductor Industry, although we are a new entrant, our discussions with both existing and potential clients have been very encouraging. We are doing some very interesting stuff with clients in Japan and Korea, and I hope that we will see the fruits of the same in coming years. Commodity chemicals situation remains unchanged from the previous quarter, with pricing under pressure due to oversupply . Overall, we remain cautiously optimistic about an improvement in the industry landscape in the coming quarters. Moving on to the business performance, I'm pleased to share that we have already reached nearly the same revenue as the entire previous financial year within the first nine months of FY 2025, totaling INR 698 crore. Looking at the quarterly number, we are continuing to deliver robust growth, with revenue from operations increasing by 65.2% year-on- year and 11.5% sequentially to INR 275 crore.
This growth was driven by a ramp-up in our CDMO business, along with steady growth in the advanced pharmaceutical intermediate segment. I would also like to highlight that we have around several additional projects in the CDMO pipeline, which has progressed to final stages. Discussions with innovators and partners are progressing well, and most of these projects are expected to begin commercialization by FY 2026.
Consequently, we anticipate our overall CDMO business to reach approximately INR 1,000 crore by FY 2028, compared to INR 80-INR 90 crore in the last financial year. Looking ahead with a better visibility of Q4, I'm confident that we will beat our previous growth estimate of 30% growth for FY 2025, and therefore I would like to revise growth guidance upward from 30% to 35% for FY 2025. Now, I will hand over the floor to our Vice President of Strategy, Abhishek Patel, for further business updates. Over to you, Abhishek.
Thank you, Naresh Bhai. Good morning, everyone. Let me provide further insight into our business performance. Starting with pharmaceutical intermediates, this segment delivered strong growth with revenue increased by 85.7% year-on-year and 61.1% sequentially to INR 239 crore in Q3 FY 2025. Growth was driven by continued ramp-up in our CDMO business and steady performance in advanced pharmaceutical intermediate segment. Our focus remains on chronic therapeutic area, including anti-cancer, antidepressant, seizure disorder, anti-psychotic, Parkinson's disease, anticoagulant, and cardiovascular treatments. Moving to the key growth driver for pharma intermediate business, which is CDMO business. As Naresh Bhai mentioned, we have a long-term growth plan for this segment, and we are confident in achieving our targets. However, please note that we are unable to disclose specific CDMO revenue numbers for the current and upcoming financial year due to confidentiality constraints as per agreement with the customers.
Now, specialty chemical business, the segment reported revenue of INR 36 crore, a slight decline compared to the same quarter last year. Sequentially, revenue dropped by around 11%, primarily due to lower volume in our commodity chemical business. Within specialty chemicals, the BFC business remained flat year-on-year, but there showed steady sequential growth. We believe Q2 was the bottom for BFC revenue, and we expect consistent growth from here onward. Capital expenditure side, CapEx for the first nine months FY 2025 stood at INR 118 crore, primarily allocated to Ankleshwar site, as well as solar and electrolyte additive projects. Let me give some further updates on the CapEx. At Ankleshwar Site 1, I'm happy to share that Block 2 has been commissioned, commercialized successfully, and Block 1 should be commercialized by end of this quarter.
Coming to electrolyte additive CapEx, the CapEx is well on track and is expected to be completed by H1 FY 2026. With that, I will now hand over the floor to CFO Bhavin Shah for the financial update. Over to you, Bhavin Bhai.
Thank you, Abhishek. I would like to briefly highlight the key performance metrics for the quarter before we open the floor for questions. I will start with quarterly performance. Revenue from operations for the quarter reached INR 275 crore, representing 65.2% growth Y-o-Y and 11.5% on Q-o-Q basis. Gross profit for the quarter was INR 127.2 crore, reflecting 78% increase compared to the same period last year. The gross margin expanded by 333 basis points Y-o-Y and 281 basis points sequentially to 46.2%. Gross margin was driven by better product mix. EBITDA for the quarter was INR 68.7 crore, which was more than 2.5x when compared to the same period last year. EBITDA margin was at 25%, up 904 basis points Y-o-Y and 198 basis points Q-o-Q basis. EBITDA margin was driven by expansion in gross margin as well as operating leverage.
PAT for the quarter was 45.4 crore, which grew more than 2.5x compared to the PAT of 17.8 crore in Q3 FY 2024. PAT margin for the quarter was 16.5%, which showed expansion of 582 basis points Y-o-Y and 133 basis points on QoQ basis. Moving on to the performance for the nine months revenue from operations for the nine months FY 2025 reached 698 crore, representing a growth of 41.8% year-over-year. As Naresh Bhai mentioned, this is almost close to our full year revenue FY 2024. EBITDA for the nine months FY 2025 was 146.6 crore, up 41.8% Y-o-Y. PAT for nine months FY 2025 was at 97.7 crore, up 78.3% Y-o-Y when compared to the adjusted PAT for the same period last year. Moving on to the balance sheet items, net cash and cash equivalents were at INR 306 crore.
I'm happy to share that even with strong growth, we were able to control our working capital, which was 95 days during nine-month FY 2025, as against 108 days as on H1 FY 2025. This was driven by improved debtor days and stable inventory. Better working capital management led to strong generation of cash flow from operations of INR 119 crore, which was 81% of the EBITDA for the nine-month FY 2025. Overall, as Naresh Sir has mentioned, we are well on the track to deliver more than 35% of growth for the year with improved EBITDA margins. With that, I request the moderator to open the floor for questions. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Bharat Shah from ASK Investment Manager. Please go ahead.
Yeah. Hi, Naresh Bhai. Good morning. After all the efforts, finally, things seem to be settling in the right direction. I just wanted to understand, we have good visibility as far as our pharma intermediate and CDMO business is concerned for the next two years. But what are the steps we are taking to build a growth engine intake after 2027? Next two years, as I understand the business, I think business is reasonably secure and clear. But after 2027, what are the initiatives which we are building today in order to drive the growth engine ahead thereafter?
Good morning, Bharat. Thank you very much for asking this question. As you know, our business model is divided into the original business, generic, our own generic business, as well as first-to-file business. W e have business security till 2040. We had already done developing molecules for generic application up to 2040, which will cater our steady growth for up to 2040 with the customer also secure. I n that sense, we are worried about the business. Regarding to the growth, which is exponential growth, which is expected by everyone, which is coming from our new chemical and additive business, as well as CDMO and CMO business in pharma, which is going very well. We have a lot of CDMO in pipelines. One is very major. That's why it is highlighted very well.
But there are some others which are also good in quantity and quality and a revenue point of view. And we already said that in FY 2026, some of our coming out similarly. There are several which are coming in FY 2027, 2028, 2029. So we have a good visibility in terms of CDMO and CDMO because there are some molecules which are in phase three, some are in a later stage of clinical approval also. T hat will bring our future growth into the business as well. And that is the reason why we had built up this new facility considering these modern requirements and latest policy requirements by the FDA as well.
A part from the generics where we have long-term visibility, are there further engines being built today for maintaining or accelerating growth beyond 2027?
Yes, sir. Baba Fine Chemicals is one of the master investments, I can say, because that has a huge potential to grow in the semiconductor sector. We are already producing photoresist chemicals, but we have several on the back-end and packaging side, also some chemicals which are already developed. N ow these monomers and chemicals we are pushing in Japan and Korea, which will be matured in the next couple of years. T hat also is adding a new additional growth driver for our future, as well as electrolyte additives. We have only two in the past, but now we have more than 12 electrolyte additives now. T hese all are also will be used by all the battery cell manufacturers. That also will be used. W e have already started qualification staging with the existing customers, as well as the new customers.
The beauty is that we have tried from the beginning, we are in line with the Chinese price. Whether IRA will be there or not there, it is not impacting us because Chinese price is in line with us. It will be, in fact, beneficial for us. If the IRA is not there, then we can have a leverage of raw material sourcing from other cheaper nations. That will also help us to have an addition in the margin as well. This is a good move for us in terms of positioning ourselves in electrolyte as well.
On Specialty Chemicals, any insights you want to share?
Specialty Chemical segment is a highly commoditized segment, which we acquire from Gujarat Organics. We've done a lot of development in that side. We sustain ourselves with this highly priced resource, raw material drop down top line eroded by 30%, even though we are sustaining the market shares of ours. T hat is the reason why we are till now, in the last three years, we have not declined our revenue in Specialty Chemicals with maintaining the EBITDA at a very double-digit level. T hat is a good achievement for us. Now, we had also done some good qualification in regulated market for specialty chemical as well, which is under validation right now. O nce it will go, then it will also too, it will also give a very good fruit in terms of specialty chemicals as well.
Yeah. Thank you, Naresh Bhai, and all the very best.
Thank you very much.
The next question is from the line of Krishan Parwani from JM Financial. Please go ahead.
Yeah. Hi, Naresh Bhai. Abhishek Bhai. Congratulations on a very strong set of numbers. Three questions from my side. Firstly, on the margin front, I believe on account of higher CDMO contribution, EBITDA margins have jumped to almost like 25%. Do you think that with further ramp-up of CDMO business and solar power benefit, your margins could reach 26%-27%, or do you think 25% is a peak for us?
O n the margin side, as you know, we have improved GM by 281 basis points in this financial and EBITDA of 5%. W e expect quarter-on-quarter improvement going forward in next financial year also. It will be always a sequential improvement in next financial year on the revenue as well as on the margin side. But on a blended side, we can expect that we will cross the EBITDA margin for the full year of the highest peak EBITDA margin of more than 23.5%, which we recorded as our highest margin. But obviously, this margin is sustainable, and the way the business is doing, it is definitely a sustainable margin.
Got it. Got it. O n the second CDMO contract, are we on track to start the supply from Q4 FY 2025, as Naresh Bhai indicated during the last call?
Yeah. The validation is under review, and it will definitely start from FY 2026, the commercial supply from Q4 CDMO from Block 2 of Unit 2 .
Okay. Okay. L ast bit, so how is the demand visibility from apixaban and rivaroxaban intermediates?
As everybody knows, it is publicly available. The apixaban is expiring in 2026. T he demand already started for APIs and then API manufacturing. W e already have a ramp-up in this Q3 as a small quantity. Q4, it will be a little bit higher. B y FY 2026, we are expecting to go to a very moderate level against the very minimizing last couple of financial years. Rivaroxaban is an expiry FY 2026, 2027, so it will be ramped up by the end of this year. Still, we are selling some quantities to our partners in Europe as well as in India.
Understood. Understood, sir. Thank you so much for patiently answering my question. Wish you all the best, sir.
Thank you, sir.
Thank you. The next question is from the line of Sudarshan Padmanabhan from JM Financial, PMS. Please go ahead.
Yeah. Thank you for taking my question. Sir, quite happy to see the ramp-up in the pharma intermediates being much, much faster than expected. Thank you, CDMO. My question is, today, what is the capacity utilization? W hatever the CapEx that we have done in the past, given that the existing product itself is doing well for us, and there are multiple products that are there, do we have capacity in place to cater the kind of growth that you talked about, that we are up to the thousand growth? Or do you think that we will have to acquire more land any day sometime?
On the capacity front, let me update that at Unit 1, Sachin capacity is more than 70% utilized. At Unit 2 , 50% capacity utilization we have achieved in Block 3, is already capitalized, at Unit 3 , the capacity utilization is 50%, we have room available for pharma intermediate business at Unit 2 , and the next block is already inaugurated, block number two, and block number one is also expected to get commercialized by end of March quarter, it will cover largely our capacity requirement for the next two to three years requirement, and for spec chem business, the capacity is already at 50% utilization at 50% level, t hat will also cater our capacity requirement for the next three year time.
For the new business of electrolyte additive, you already know that CapEx is going on, which is expected to get completed by H1 FY 2026.
That will again secure our revenue requirement for the next three years. This way, we are quite very well placed to support our growth for the next three years. Of course, it's an industry cycle. As and when it's required, maybe one and a half, two years in advance, citing the new next level of revenue growth, we will have additional land acquired as and when required. Even today, also, we have one 8,000 sq m, land available at Sachin in the GIDC, which can be used for some additional requirement. For high CapEx, we can have additional land in the future.
Sure, sir. Sir, if I split the two businesses, I mean, you literally gave the margins across the two businesses. I would assume that if I look at the final overall margins of 25%, the pharma intermediates in this quarter should be north of 30%. I mean, is that right? If you can give some color on that.
Come again?
The margins between the specialty and the pharma.
Advanced pharma intermediate margin for the quarter is 26.4%, and specialty is 15.16% blended.
B oth I have increased. Sir, just to take forward the previous participants, the margin today is at 25% with around 50%-60% utilization across both the plants. I mean, intuitively, as the CDMO proportion increases, I mean, from the current products and the new products, I mean, I'm not talking about next year, say three years down the line, should we be looking at, say, a margin closer to, say, 30%? I mean, which is also something a lot of CDMO players are doing, and it's not very different. J ust wanted to understand a bit about how much an operating leverage and scale of this business can contribute.
A s you know, that CDMO business has just ramped up in this Q3 FY 2025. W ith the commercialization of the two blocks also, our operational efficiency will again kick in. I t will definitely go beyond the 25% mark, no doubt on this. It can reach to, let's say, 27%-30% also. But you have to understand that this CDMO business, not the API, it's an intermediate business. T hat industry, other player, we contain ourselves a little conservative as against others for guiding our EBITDA margins.
Sure, sir. O ne final question before I join back the queue is on the specialty side, and if I look at this interesting intersection we together.
Sorry to interrupt. I would request you to rejoin the queue for your follow-up question. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your question to two per participant. If you have a follow-up question, I would request you to rejoin the queue. The next question is from the line of Nikhil Mathur from HDFC Mutual Fund. Please go ahead.
Yeah. Hi, good morning all. Many congratulations, Naresh Bhai and team for such great execution. My first question, Naresh Bhai, is on your management commentary that the pipeline of CDMO projects is progressing well. J ust wanted to understand, are you talking here about the current couple of patented products which are kind of scaling up, or you're also talking about projects which are beyond, let's say, FY 2027, 2028, which will kind of progress to phase II, phase III in the next 12 months, and you will get visibility over the next 12, 15 months or so? J ust wanted to understand if you can split between the next 12, 15 months and beyond that as well, what is the visibility you are getting on some of the patented projects that you will be working on?
Thank you. Thank you, Nikhil Bhai. It's a valid question. Due to the confidential nature of the agreements and because it's a clinical trial, I can't disclose more on that, but you are rightly saying that. I'm talking about the existing as well as the new CDMO, CMO, which will be matured in 2027, 2028, 2029. W e all are moving very good, and it's a strong pipeline we have with multiple applications in terms of pharmaceutical final dosage form. T hese all are ramping from several are moving from phase II to now phase III. Some are phase III to the approval stage. T hat will be coming in 2027, 2028 like that.
Can we extrapolate, sir, that the current success that you are seeing on the patented side that is leading to better and more inquiries ever since this success has been visible to other customers as well? Can it be assumed?
You can think like that, but for me, I can say that I started my career and this company on clinical trial only. T hen I move on to the generic. W e have a lot of molecules which we supply sometimes in very early stage development or on some are in a later stage development. But whoever, the customers who are with big names in Europe or U.S. or in Japan originators, they now also realize that we are fully capable enough to execute at a very large scale production for any kind of requirement in terms of regulatory as well as in terms of supply chain without any deviation or without any hurdle. T hat is one of the things which gives them the confidence.
Definitely, you say it is one of the right things that, yes, with the success of these current projects, gives a lot of confidence to our buyers, and that also encourages them to give us more projects to us as well.
Got it. A nother question I had was a slightly longer-term horizon. The peptide-based development is kind of gaining. I mean, it always has been in prominence, but it is only going up and will go up in the coming 10, 15 years as well. We talk about GLP-1, but at a very broad level, peptides are finding or they are getting tested and tried for multiple other indications as well. H ence, an assumption that next 10, 15 years, a company which is on the chemistry side will have to be in the larger molecules and essentially on the peptide side as well. A ny broad thoughts you can share on how Ami Organics is placed to latch onto this tailwind, maybe not next two, three years, but beyond that? Is that something which we can look forward to from Ami Organics standpoint as well?
Ami Organics is a chemistry-driven company, and we are very strong in chemistry. This is our core strength. Based on that, we had nurtured our business in a horizontal manner. Peptide is the future, definitely, but it is not solution for all the diseases. That is definitely peptide is used for some diseases, but it is not future for all the diseases. Synthetic chemistry or synthetic drug will never phase out in the system, right? That is a huge potential available for us. In fact, in peptide also, there is a synthetic chemistry that is required, and there are also opportunities available for us. We are already catering this kind of small opportunity. What we have, we are getting it. But being in our it's not our core area of bio. I mean, people are rushing towards the good.
I don't want to put myself into the same rush because by this way, I'm risking my existing infrastructure as well as my future of my company. W e are a highly focused company, which is we know our strengths and weaknesses, and we are focusing on that area only. P eptide may be good for someone, but it is not that great for me for the today or for the future.
Understood, sir. J ust one final question, if I may please chime in. On the base intermediate portfolio, which is on the generic side, can you give some sense, sir, how EBITDA per turn or if you can talk about margins, how margins have played out in the last 12 months or so? I f there is a recovery at some point in time, maybe not this year, but let's say in FY 2027 or sometime, can there be a big reversal in EBITDA per- turn or margins, whichever you want to talk about?
To be very honest, nature and sensitivity of these agreements as well as commitment, we are stopped doing this bifurcation and all because it is impacting on our future contracts as well, so that's why we are more yeah, we are committing to improve ourselves, and that you can see in the last 10 quarters, 12 quarters.
Sir, I'm talking about the portfolio where there is pricing pressure the last couple of years due to demand or Chinese dumping.
As I told you every time, that Chinese pressure is not directly impacting us. It is impacting to my manufacturer. You can see my all last four quarters where I given the commentary. You can get your answer from that as well that it is not and then we find out the way out to how to maintain our margin there as well.
Understood, sir. Thank you so much, sir, and all the best.
Thank you, sir.
Thank you. The next question is from the line of Rohit Nagaraj from B&K Securities. Please go ahead.
Thanks for the opportunity and congrats on a very good set of numbers. F irst question is on the pharma intermediates front, excluding the CDMO part. T his is just the beginning of 2025. So how are we expecting the pricing environment from our customers given that last couple of years has been relatively benign, although it is stable? But given that, hopefully, the inventory situation, etc., has been managed, whether there is an improvement as far as the 2025 contracts are concerned? So your views from the customer interactions. Thank you.
Apart from the CDMO patented product agreements, raw material prices are stabilized. Our top line is also now stabilized. In the past, when the problem arose for our end user, we changed our contracts to the spot basis, and now we returned back to the contract, and this contract is now very well executed, and that contract also and rolling forecast also giving us a good visibility for us for the next one year, one and a half year, so by that, we are very much confident about our margin claim, whatever we are announcing. That is all based on even our incremental forecast, the revenue forecast for this quarter also based on these contracts as well as the visibility which is provided by the generic manufacturers from us only.
That's helpful. Second question on the battery chemicals and semiconductor. H ere still, we are at initial stage in terms of commercialization of the plant as well as qualifications. Maybe in FY 2027, 2028, when we will start the supplies, what is the kind of revenue potential that we are looking at and whether the margins also will be in a similar wave of CDMO or there will be a change in terms of the margin profile for these two particular instruments? Thank you.
In terms of the capacity point of view, we already announced that we are putting a plan for 4,000 battery panels, including all additives, which will give you the guidance about the revenue as well as the margin. Right from beginning, when we develop, we always said that the margin will be better than specialty, but lower than pharma. T his is the same thing which is right now applicable for us in terms of electrolyte additives as well.
The same goes for semiconductor?
No, semiconductor is a very different ballgame where we are the only company in India who are right now have a good situation and position ourselves in this semiconductor supply, specialty chemical supply, where the margins are much higher than the pharma as well as CDMO, which will be it may vary from 40%-65%. It depends on which product at what scale, and it all depends on customer to customer as well. I t is not a low-margin product at all because it's very high-purity molecules which we are making, which is a very unique strength of Baba Fine Chem, which is they know how to produce this kind of molecule.
Ladies and gentlemen, we have lost the connection for the current participant. We will move on to the next participant. The next question is from the line of Prashant Nair from Ambit Capital. Please go ahead.
Yeah. Good morning, everyone. Naresh Bhai, just one clarification. When you say CDMO, are you referring to all sales that you make to innovative pharma companies, or is there any other way you're splitting the business?
Mostly CDMO is Ami Organics is doing the CDMO only for the innovative pharma companies or the innovative pharma companies, toll manufacturer based in Europe or in India. W e don't do the generic CDMO or CMO because we are way beyond of these kind of things. I t's a small company, very initial company. They can do this kind of big CMO, but we are doing only CDMO, CMO for originators, either directly or supplying to the toll manufacturer of the originators based in Europe, China, or in India.
Right. T hat is the business which you expect to get to 1,000 crore growth by fiscal 2028, right?
Yeah.
Yeah. Just to follow up on this, would you be able to give a split of the supplies you make to innovators or their toll manufacturers, currently, what proportion would be for products that are off-patent versus, say, those that are under-patent or those that are still in development? Can you give that split?
Prashant Bhai, if I will be two years back, I would love to do this, but this has brought a lot of problems to my marketing team. W e have now stopped this kind of sharing because we are generating our own competitors. W e don't want to discuss these kind of things on a call or on a one-on-one anywhere.
No worries. But would the split of say, would the share of products that are under development or under-patent go up over the next few years? I mean, I know there's one big contract which obviously will lead in that direction. But beyond that, in your pipeline, would you have enough molecules which are either under development or still on patent that are yet to scale up?
I can narrate it like this. You maybe figure out from there. We have more than 570 molecules last year till last year invoice. Maybe this year, it will be added another 40-50. Out of that, in a clinical trial, somewhere around 60-80 molecules are right now either in phase two or phase one kind of things which we are supplying to them. T his is one of the from there, you can narrate about whatever you want to get an answer from that.
Great. That's useful. Thank you. That's excellent. All the best.
Thank you.
Thank you. The next question is from the line of Yash from Stallion Assets. Please go ahead.
Hi, sir. Thank you for the opportunity. Just with respect to your CDMO business, could you tell me what are the expected asset turns on the CapEx that you are estimating by FY 2028?
Normally, we target any asset turns which we invest would be 3x. S imilar kind of use, we should make your assets or calculation like that.
Okay. Okay. J ust from a long-term perspective, because we're seeing some headwinds in the specialty chemical business, so what was the reason for having that segment? Why don't we just concentrate on the pharma intermediate side of the business? I mean, I'm sorry, I'm just new to the company, so I just want to understand the.
No worries. See, let me tell you one thing. If I will be only pharma last two years, I will be in trouble. If I will be on a fiscal year also, I will be in trouble. Ami Organics is always focusing on sustainability and long-term growth, and that can be so what happened that our policy right from beginning is that not depend on one customer, not depend on one product, not depend on one area. T his is how we develop pharma, agro, specialty, polymer, optochemicals. I f one segment will not perform well, another segment will help support to us. T hat is one of the reasons that every year, every quarter- on- quarter, we have an improvement in our revenue. A lso, it has been also giving us an improvement in our operating leverage as well.
T hese are multiple things which help us to remain in the position. N ot only that, specialty chemicals is also very lucrative. It requires a lot of efforts to make viable for that, and that's what we are doing right now. We also knew in specialty last four years only we enter in this. W e are also learning, and we learn a lot of things in that, and that will give us a foot in the upcoming years as well.
Okay. Okay. Got it. Thank you.
Thank you. The next question is from the line of Rikin Shah from The Boring AMC. Please go ahead.
Congratulations, Naresh Bhai. A very stellar quarter. I remember not too long back, there were questions on margins being ever recovering. My question is, I know you have expanded on the battery chemical segment, but perhaps with the geopolitical changes that have happened, has our stance as a company changed or altered for this?
No. Because we have an agreement in place, and our position is great in terms of the competition against the competitor based in China as well. The thing is that our buyers would be so they have some limitations to start, so once that limitation is over by then and they got the green light from the final OEM, EV manufacturer, it will be ramped up very quickly for us. If that not happen, then the waiver is completely vanished, then market is open for everyone, and in that case, we are very happy in that to cater that worldwide as well.
All right, so in terms of a very molecule-specific question, there is a lot of activity by Johnson & Johnson and CAPLYTA, and they have done an MDD filing. T hey estimate this asset to be more than $5 billion, and we sort of have a process pattern for the intermediates of Lumateperone. Is there any sort of possibility of having an early entry into this molecule? Because earlier, we were expecting.
We already done that with our partners. There are three partners who had already filed first-to-file, and now we are waiting for their upcoming. W e are already there.
All right. Okay. That's all from my side. Thanks, sir.
Thank you. The next question is from the line of Manav Kapasi from Antique Stock Broking. Please go ahead.
Congratulations, Mr. Patel. Just one.
Sorry to interrupt, Mr. Manav. I would request you to please use your handset.
Am I audible?
Yes, sir. Please go ahead.
Yeah, sir. Firstly, congratulations, Mr. Prashant. My only question was on the spectrum business. The degrowth that we've seen, small degrowth, is it largely on account of BFC, or has the base business also seen some problems? A lso, if you can give the growth for this quarter's export of BFC, which you had given last quarter.
Specialty business is deferred. We have an order in place, but it is a deferred supply. T hat's why it is a little bit degrowth in a commodity segment of cosmetics as well as parabens. BFC, as we already said right from beginning of this year, that this year will be muted for us, and that will be happening in BFC. BFC has a stable every quarter, two- to three-quarter demand right now because of several compliances and all, which is now finished. From next year, it will be uptick in BFC. But whereas here in specialty chemical segments, where we have some orders which is deferred to this quarter, as well as we also leave some orders based on the pricing as well. These are the combination of both.
Okay. Next of BFC, if you could give us the growth for this quarter.
We already announced that this quarter growth, the overall year will be 35%.
No, no. I'm asking for the semiconductor business. CapEx of BFC, what would be the growth?
X of BFC, the growth anticipated for full year is more than 15%.
Okay. Understood, and you just said that there are some orders that are deferred to this quarter, that is 4Q and maybe 1Q, so this quarter, maybe we should see some recovery in the spectrum business, right?
No, no, no. It's definitely going to be recovery, but you see it like this. For Q1 and Q2, the semicon business of BFC has done very good, and this is only a cyclical nature temporary for Q3, and again, Q4 will be a normal thing, so overall, for the full year, the expected growth is more than 15%. That's for sure.
Great. Great. Thank you so much. All the best, Naresh Bhai and team. Thank you.
Thank you, sir.
Thank you. The next question is from the line of Jason from IDBI Capital. Please go ahead.
Yeah. Hello. Thanks, sir, for taking my question. I'm audible?
Yes, sir.
Yeah. Yeah. J ust some quarters back, you used to give a breakup of your pharma intermediates business in terms of being 50-55% being for the generic API, then 40-45% for innovative pharma, 5% for CDMO, and 1-3% for import substitutes for domestic pharma. C urrently standing, how does that mix stand as of now?
W e have learned this mistake, and now that's why we are saying we are not breaking it up. W e are also learning how to handle disclosures because the disclosure is only not for the investors, but also for our partners who are buying from us. T hat's why we are now restricted ourselves to breaking out everything and giving disclosure to the people.
Sure, sir. I mean, one thing is for sure that your CDMO business will definitely in that mix, it must be the revenue contribution must have increased quite a bit for that. J ust in terms.
Yeah. J ust in terms of that, I mean, we have seen you did mention that your tailwinds are strong for CDMO, and you target to reach 1,000 growth. That's your target aim by FY 2028. C urrently, sir, what is the revenue size for CDMO?
The CDMO business last year was 90% growth. This year, we have already crossed more than double of that last year's business. But as you mentioned, we are not giving the segment-wise revenue splits from here onwards, from this year onwards.
Okay. Okay. Sir, just also, I mean, I understand that you're not giving specific numbers. Just wanted to understand also that, I mean, of course, one is that the Darolutamide or the NUBEQA sales will definitely must have helped you and your intermediate sales. Sir, just I'm not asking about specific details, but just from a directional standpoint, how are you seeing such other long-term contracts filling up the Gujarat capacity? How is the pipeline looking going ahead for more and more contracts vis-à-vis competition globally as well? How are you seeing India traction playing out? Just wanted from a directional standpoint, how is that looking as you, again, look to basically increase capacity utilization for Gujarat facility as well?
We look very promising in that area.
We are already moving into APIs with some CDMO already started, and there are others under negotiation and discussion and development, so it's going very well. We don't see any issues in terms of demand. It is only in terms of when it will be they are ready to transfer. That is because right now, you see CDMO, CMO innovators, either they make themselves or buying from someone. I t's a procedure in pharma where we have to follow it, and it will become soon several new projects which are in the pipeline, and development will be starting Block 1 as well.
Okay. Sure. Jus t one final thing. For BFC, you said the year is muted, but by FY 2026, are you looking at a significant ramp-up in BFC contributing well to top line and bottom line by FY 2026?
Do you see whatever initiatives and whatever strength building up we are doing in BFC with the Japanese and the Korean customers, do we see significant revenue build-up in FY 2026?
No, not in FY 2026, but FY, it can go on from FY 2027. It has already started. As we mentioned, the Q2 was we see Q2 and the bottom-out quarter for BFC, it has already started moving up, but slowly, slowly, it will ramp up, not in very FY 2026, but FY 2027 onwards because we have done a lot of seeding in market like Korea and Japan. We have already shipped samples and validation batches have started going on. I think that will take some time, and it will from FY 2027 onwards, it will definitely ramp up.
Okay. B y FY 2027, it should ramp up. Okay. S ir, just one final thing.
Thank you, sir. I would request you to rejoin the queue for your follow-up question. Thank you. The next question is from the line of Ajay Surya. From Niveshaay please go ahead.
Hi. Congratulations, Naresh Bhai, on a good set of numbers. Hello. Am I audible?
Yes.
Yeah, yeah.
Yeah. M y question was like, I was checking the investor presentation of the Fermion, right? F ermion has not grown Y-O-Y. M y question was like,[Foreign language] Like, is it from the replacing the supplier or the molecule itself is growing?
M olecule [Foreign language]
Got it. E arlier, someone other was supplying or how was the contract earlier?
Earlier, someone other [Foreign language]
I am not aware of, sir. I am asking the other person.
I was not aware of that, sir.
Okay. Okay. Got it.
Thank you.
Thank you. The next question is from the line of Muhammad Abbas from InCred Financial Services. Please go ahead.
Hi sir, thank you for taking the call. I just wanted to know the revenue split between the exports and domestic business. I believe it's around 20% growth per quarter.
Yes. We lost your voice.
It's around 76%.
76%. Great. W e have seen a significant growth in exports compared to last two quarters. S ir, I also wanted to know how is demand visibility in the open market as well as are we always to track for 30% growth items earlier this year?
We lost your voice. Can you repeat your question, please?
It's too low to hear us.
Hello.
Mr. Abbas, I would request you to please use your handset.
Okay. Is it better now?
Yes.
Yeah. H ow is the demand visibility in the European market as well as are we still on track for 30% growth items?
Yes. We have already guided. Naresh Bhai has already guided during his opening remarks.
Then the guidance are based on their contracts and commitment from our European as well as the other countries' point.
Okay, sir. Thank you. Thanks.
Thank you. The next question is from the line of Maitri from Sapphire Capital. Please go ahead.
Yeah. Hello. Good morning. Am I audible?
Yes, ma'am.
Yeah. I just wanted to know, firstly, congratulations for the great result. I just wanted to know the next two-year kind of guidance and the growth that we are expecting in the top line and the margin.
We always say that we want to double ourselves in three years' time. That's a more than 25% growth guidance we are committing.
In the top line, do we expect to achieve like 27%-30% in the next three years in the margins?
Margins are definitely going to improve from here onwards in next two years and next financial year also.
Okay. Thank you.
Thank you. The next follow-up question is from the line of Jason from IDBI Capital. Please go ahead.
Yeah. Hello, sir. Thanks for taking my question again. T his was just in response to a previous participant where you mentioned that your CDMO, what you do is basically with innovator companies or you did mention this with us or CDMO or with CMOs of these innovator companies. J ust one clarification. T he innovator could be Bayer, and if Fermion makes it, let's say Bayer has given Fermion to make the API, so probably you just deal with either Bayer directly or through Fermion. That's what you meant, right? Is my understanding correct?
Here, both are originators. H ere, say, for example, we say an innovator based in hypothetical innovator based in Europe, and then they have an API manufacturer like BFC being the top CMO for big pharma's API manufacturing for them. Similarly, so they give to these API manufacturers.
T hese innovators are asked to supply to these API manufacturers in India. T his innovator has another manufacturer in China. T hey also ask us to supply to China as well. W e have to supply to India as well as China. S imilar. B oth the Fermion has their selling right to the Bayer. B ayer is not an innovator there. Bayer and Fermion joint innovator of that molecule of Darolutamide, whereas our CMO, we tell us there is a toll manufacturer of other innovators. To them, we supply them, but it's controlled by the innovator.
Okay. But it's controlled by the innovator directly or indirectly? That's what you're saying?
Yes.
Okay. Okay. Sure, sir. Sure. Sure. Thanks. Thanks a lot, sir.
Thank you. The next follow-up question is from the line of Prashant Nair from Ambit Capital. Please go ahead.
Yeah. Thank you. Abhishek, you gave some outlook on margins for next year in your initial comments. Can you please repeat that? I don't think I was able to get that clearly at that time.
As on date for nine months, our blended margin is 21% in nine months FY24. For FY, it is obviously we are expecting it to improve in Q4 also. F or FY 2026, for full year, we are expecting this margin on a blended basis to reach at a peak or highest margin ever reported by Ami Organics. It will be on a blended basis. Sequentially, it will improve from Q1 to Q4 financially.
Yeah. W hen you say highest ever, you are talking at an annual level, right? Not the highest ever.
Annual level, of course.
Okay. Thank you. That's all I need.
Thank you. The next question is from the line of Krishna Kumar , who is an individual investor. Please go ahead.
Hi sir. Thank you for the opportunity. Sir, my question is I have two questions. One is the recent regime change in the U.S. A large South Korean company is actually the EV company is taking a little pause in the development. A re we seeing any traction in the electrolyte CDMO with the Korean companies?
Can you repeat your question? I couldn't get it.
Regime change in the U.S.?
Yeah.
Is it clear so far?
Hello?
Sir. Yeah, yeah. Yes, sir. Yes, sir.
Sir, am I clear now?
Yes, sir. Yes, sir.
Yeah. Sir, due to regime change in the U.S., there are large South Korean EV manufacturers taking a little pause in the development. A re we also seeing any sluggishness in our domestic electrolyte, the one which we recently announced, the CapEx of INR 170 crore?
For CapEx of INR 170 crore, that is for the purpose of electrolyte additive business, which is going on. We have already signed some supply contracts, and we have long-term visibility available for electrolyte additive business and going ahead with this business. But for solution business, which is the Korean EV, which we announced earlier, that status quo we are maintaining because we don't want to rush into the market, which is yet to get fully developed, and we don't want to allocate capital or stuck our capital. We are very cautious in this business, and we'll take a call at a relevant level.
Okay. Thank you, sir. Sir, one small question. In percentage terms, what is the revenue share of ARV intermediate?
There isn't any ARV. Only darolutamide is there, but that is almost contributing 1% of the total revenue.
Okay. Okay. That's fine. Perfect. Thank you.
Thank you. The next question is from the line of Prathamesh from Tiger AMC. Please go ahead.
Yeah. J ust one question. Sir, do we have potential and capacity to clock around $100 million in CRAMS segment in coming time?
CRAMS segment, INR 100 million, we are not completely dedicated only for CRAMS. We do CMO, CDMO for API early stage up to N-1 intermediates. CRAMS is contract research and manufacturing services. W e don't do some basic R&D and these kind of things. I t's not relevant to us.
Okay. Okay. Thank you so much, sir, for the clarification. That's it from my side.
Thank you. The next question is from the line of Pratik from Systematix Group. Please go ahead.
Yeah. Hi, sir. Thank you for the opportunity. Just one question on industry per se. Is there a role of artificial intelligence that can be used in chemicals also? I mean, you are a CDMO company, so can we use artificial intelligence in research? I f you can shed some light on it?
It's confidential, but yes, we do some AI in our products, and the new plant has some AI implemented in operation.
Okay. T he use of AI is there in CDMO and chemical industry and pharma industry?
AI we use in operations from equipment controls and operations. We use some AI, but this is really insider. But we don't want to disclose these kind of things or new things.
Okay. Thanks.
Thank you. Ladies and gentlemen, that was the last question for today's conference. I now hand the conference over to the management for closing comments.
Thank you to the JM Financial team for hosting our conference call. We appreciate everyone's question and hope we have addressed most of your queries. If we miss any of the questions, please reach out to our investor relations team, and we will get back to you promptly. Thank you very much, and have a good day to you.
On behalf of JM Financial Institutional Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.