Ladies and gentlemen, good day and welcome to Aurobindo Pharma's earning conference call for the fourth quarter of FY 2025. Please note all participants' lines will be in listen-only mode, and there will be an opportunity for you to ask questions after management's opening remarks. Should you need any assistance during the conference call, please raise your hand from the participant tab on the screen. Please note this conference is being recorded. I now hand over the conference to management for opening remarks. Thank you, and over to you, sir.
Thank you, Mandeep. Good morning and a warm welcome to our fourth quarter FY 2025 earnings call. I'm Shriniwas Dande from the investor relations team. We hope you have received the Q4 FY 2025 financials and the press release that was sent out yesterday. These are also available on our website. I would now like to introduce my senior management team on the call with us today, represented by Dr. Satakarni Makkapati, CEO of Aurobindo Biosimilars, Vaccines and Preparedness Businesses, and Director Aurobindo Pharma Limited; Mr. Yugandhar Puvvala, CEO of Eugia Pharma Specialties Limited; Mr. Swami Iyer, CEO Aurobindo Pharma USA; Mr. V. Muralidharan, CEO Europe Formulations Business; and Mr. S. Subramanian, CFO. We will begin the call with the summary highlights from the management, followed by an interactive Q&A session.
Please note that some of the matters we will discuss today are forward-looking, including and without limitations statements relating to the implementation of strategic actions and other affirmations on our future business, business development, and commercial performance. While these forward-looking statements exemplify our judgment and future expectations concerning the development of our business, a number of risks, uncertainties, and other important factors may cause actual developments and results to vary materially from our expectations. Aurobindo Pharma undertakes no obligation to publicly revise any forward-looking statements to reflect future events or circumstances. With that, I will hand over the call to Mr. S. Subramanian for the highlights. Over to you, sir.
Thank you, Shrini. Good morning all, and a warm welcome to our Q4 and full year FY 2025 earnings call. I'm delighted to start the call by sharing with you that it has been an excellent quarter and a financial year for the company, marked by continued growth reflected in highest revenues and EBITDA. For FY 2025, our revenues stood at INR 31,724 crore and EBITDA at INR 6,605 crore, marking a comfortable margin of 20.8%. For Q4 FY 2025, our revenues stood at INR 8,382 crore and EBITDA of INR 1,792 crore, with a good margin of 21.4%. During the year and quarter, we saw good performance across all businesses, mainly driven by volume growing, new product launches, and our performance in the regulated markets aided by stable pricing.
The profitability of the company, as well as, improved significantly backed by softening of raw material prices, favorable product and business mix, and improved operating efficiencies. This is reflected in the EBITDA margin of 20.8% from 20.1% of last year. Our quarterly margins also have gone up higher compared to the last quarter. These numbers have been achieved despite one-time recurring expenses on account of A, fuel and power purchase coal adjustments relating to the Andhra Pradesh Electricity Board, inventory-related provisions, and corporate development costs. In addition to this, PLI facility contributed a negative of INR 30 crore plus at the EBITDA level. The accumulated impact of the above factors was a negative of INR 105 crore plus. The contribution of other income with service Q3 FY 2025 and Q4 FY 2024 were lower at INR 123 crore compared to INR 143 crore and INR 153 crore respectively.
Notwithstanding these factors, the company still produced record numbers as mentioned. Now, let me take you through the other details of the results for the fourth quarter of FY 2025 and full year FY 2025 declared by the company. For Q4, revenues grown by 11% year-on-year and 5% quarter-on-quarter. The gross contribution stood at highest absolute levels of INR 4,954 crore. Gross margins remained at 59.1%, increased by about 65 basis points quarter-on-quarter, supported by favorable product mix and benign raw material prices, albeit constrained by other one-offs of over INR 105 crore plus. Consequently, the EBITDA before forecast and other income grew by 6% year-on-year and by 10% quarter-on-quarter to INR 1,792 crore. Net profit increased by 7% quarter-on-quarter to INR 903 crore. For the full year FY 2025, revenue grew by 9% year-on-year, supported by growth across businesses.
Gross contribution also reached the ISCR absolute levels of INR 18,697 crore, reflecting a margin of 58.9% and that's an improvement of 214 basis points. Gross margins are supported by product mix and benign raw material prices. Our cash flows have improved significantly on the backdrop of improved working capital position, leading to a net cash surplus of $42 million, versus a net debt of $84 million as on December 31, 2024. Now, let me take you through the business highlights: formulation business. Formulation business witnessed a growth of 12% year-on-year to INR 7,313 crore and contributed around 87% of the total revenue. The revenues are mainly supported by growth across the US and Europe businesses. For the full year FY 2025, formulation business witnessed a growth of 12% year-on-year to INR 27,388 crore and contributed around 86% of the total revenue. The yearly performance is driven by growth across the businesses. API businesses.
For the quarterly, API businesses contributed around 13% and revenue improved by 5% year-on-year to INR 1,069 crore. For the full year, API business contributed around 14% and clocked a revenue of INR 4,323 crore, which is the external business, registering a growth of 2%. The growth in the API business is mainly driven by IR volumes on account of improved asset capitalization with IR capacities. USA, for the quarter, the revenue from U.S. formulation increased by 13% year-on-year to INR 4,072 crore. On a constant currency basis, U.S. revenue increased by 9% year-on-year to $470 million. The growth was mainly driven by volume gains. Our large product portfolio basket helped us optimally maintain the price stability. The quarter-on-quarter growth was 8%, mainly supported by account of higher volumes. Revenue from U.S. formulation increased by 7% to INR 14,816 crore or $1,752 million. Europe.
For the quarter, the European formulation clocked revenue of INR 2,147 crore and increased 17% year-on-year. In constant currency terms, the Europe revenue was EUR 236 million against EUR 203 million of last year. The growth was driven from performance across all key geographies. For the full year, the European formulation revenues grew by 17% and clocked a revenue of INR 8,356 crore or EUR 921 million or $988 million. The European business is close to clocking a billion-dollar revenue. Growth market. For the quarter, growth market revenue stood at INR 786 crore, with a year-on-year decline of 8% and quarter-on-quarter decline of 10%. In US dollar terms, the revenue was $91 million in Q4 FY 2025. The decline was mainly on account of the moderated performance in a few key markets. Right? ERV business. For the quarter, ERV business increased by 29% year-on-year to INR 300 crore or $36 million.
For the year, ERV business clocked increased by 19% to INR 1,037 crore or $123 million, mainly due to continued momentum of additional opportunities. Specialty and injectable update. For the quarter, specialty and injectable business revenue increased by 25% year-on-year to $178 million. For the year, specialty and injectable global business increased by 4% to $561 million, mainly due to volume gain partly offset by some pricing pressures. Now, going on to the other highlight, during the quarter, raw materials cost eased further, supporting our gross contribution to INR 4,954 crore. Gross margin for the quarter was at 59.1%. For the year, our gross contribution stood at INR 18,697 crore. R&D expenditure stood at INR 423 crore for the quarter, which is 5% of the revenue. For the year, R&D expenditure stood at INR 1,622 crore, which is 5.1% of the revenue, mainly towards the clinical trial expenses for multiple projects.
Net capital for the quarter is $90 million, and that for the year is around $322 million, which includes capacity enhancement projects, new plant expansions, and others. Improved profitability coupled with improved working capital position, the business generated a net cash flow of $130 million during the quarter. As a result, net cash position after investment stood at $42 million from net position of $84 million. The average finance cost of 5.5%. Other update: penicillin related issues. A preliminary assessment of the fire incident at Pen-G facility at Kakinada indicates an impact of around INR 4 crore. In the interim, due to the incident, we have temporarily halted the plant operation. Before temporarily halting the operation, we have achieved encouraging yields consistently in the month of March. Further, as part of the commitment to regulatory compliance, we have submitted the renewal application for consent to operate.
The production will resume promptly upon receiving the necessary approvals to avoid any undue risk. We also understand from the industry sources that the minimum import prices are being considered on certain critical raw materials, and accordingly, we have made representation to the industry associations. Strategic initiative: expanding manufacturing capacity. We have expanded our formulation manufacturing capacity further and are present and having a capacity of 60 billion units plus. These high capacities, along with the proposed new capacity enhancement in the existing, are expected to drive the growth. We have commercialized our China OSD plant with 2 billion manufacturing capacity during the year. The capacities will be expanded further over medium term. This plant is expected to contribute revenues in FY 2026. We expect our U.S.-based OSD plant at Dayton to be commercialized during the FY 2026.
Our other plant in U.S. at Raleigh, which currently manufactures topical, is expected to fully operationalize in the near future to include transdermal and respiratory products. Long-term growth by building and expanding our strong product portfolio. We are working on multiple respiratory products. In FY 2025, we are partnered with Global Pharma Major for development of respiratory products. This is a testament of our aspiration of developing and launching more and more complex respiratory products. Expanding growth market percentage . We continue to focus on growth market percentage, reflected by impressive growth of 24%. Our focus in new and existing markets are Indonesia, China, Canada, South Africa, etc. Our backward, and we continue to focus on our backward integration in terms of API, intermediates, and KSMs by biosimilar. We have been already informing the stock exchanges about the new approvals. Our CEO, Mr.
Satakarni Makkapati will inform about it more in detail during the call. Outlook for FY 2026: we have achieved excellent overall performance across business during FY 2025. With focused approach and right strategies in place, as highlighted a while ago, we are confident to continue our growth trajectory. The growth momentum in Europe and other key markets are expected to sustain, further accelerating our revenue. During Q4 FY 2025, we achieved a net cash position with our proven and productive efforts to optimize working capital. We strengthened the balance sheet and cash flow to demonstrate financial stability for a long-term growth potential. It's our endeavor to achieve a high single-digit growth, excluding transient product, through FY 2026. For FY 2026, we internally aim to maintain our present EBITDA margins. The tariff announcements are expected in July 2025.
We will be able to give you better clarity in the next earnings call. This concludes my remarks. Now, our business leaders will give more clarity on any specific aspects in our Q&A session. We are happy to take your questions. Thank you. Hello?
Thank you. Thank you, sir. We will now open the call for Q&A session. We will wait for a few minutes until the queue assembles. We request participants to restrict to two questions and then return to the queue for more questions. While asking questions, we request you to please identify yourself and your company. Please raise your hand from the participant tab on the screen to ask the question. The first question is from Damayanti Kerai .
Hi, good morning. I hope I'm audible.
Yea.h, yeah.
Okay, thank you. My first question is on Revlimid.
I understand moving from 3Q to 4Q, you have booked sizably large sales from Revlimid. My question is whether this fourth quarter number replaced what you originally planned, or you have held back some supplies due to some price renegotiation, which we are seeing in the market due to entry of additional competition in the market for Revlimid?
You go ahead. I mean, normally we do not comment on Revlimid sales units or value. Yeah, in fact, we have done whatever we planned to do, and we are only left with the balance for the next year. Beyond that, I think I will not be in a position to comment in terms of the numbers.
Sure, but nothing has spilled over from 4Q to next fiscal, if you can just indicate that.
We have not. In fact, nothing has spilled from Q4 to the next year. It is just as planned. We have done it. So whatever limited quantity will be there for FY 2026, that is what we will do. There are no spillovers from FY 2025 to 2026.
Sure. In your margin expectation for FY 2026, which you mentioned to be at similar level, are you including significant pickup happening from, say, China plant or some of the plants in the U.S.?
See, U.S. plant Swami will talk about it, and which we have already mentioned in the original remarks. In the China plant, already it has incurred some losses, and that will become breakeven or slightly positive in the coming year.
China is supplying to all the markets, right? Local market as well as Europe and U.S. , or?
No, not U.S . They will be supplying to China during the year as well as Europe. Europe, they can start immediately, right?
China, they will be able to do it after some time, maybe Q2.
I can contribute here for Europe, China plant supplies are already started.
Okay.
Okay. That's helpful. In the U.S. plant, Dayton is supplying normally, but Raleigh facility is something where you believe pickup will happen in some time. Right now, I think there are pending issues, right?
Subramanian, you want me to handle it?
Yeah, yeah, yeah.
Yeah. I'm not sure I heard Damayanti fully, but Dayton plant is going to commence the manufacturing on a commercial basis. They have manufactured, of course, and then we expect commercialization in the Q2 of the current fiscal. The other facility that you talked about, Damayanti, I'm not sure what exactly you're saying.
Raleigh plant, the one for transdermal?
Raleigh plant.
Yeah.
Raleigh plant.
What is the status?
The Raleigh facility, we had an FDA inspection, as you know, and some issues were raised. We are addressing it proactively. The Raleigh plant does not have much contribution in terms of revenue currently, and we do not have any major product launches that are planned in the short term. We believe that this is not going to impact our numbers in a meaningful way.
Okay. That is helpful. Thank you. I will get back in the queue.
Thank you. The next question is from Tushar Manudhane.
Hello.
Yes.
Yeah. Thanks for the opportunity. Firstly, on the two-year business, there has been a consistent fighting growth for our facility. Could you just sort of elaborate?
Tushar, can you talk a little bit louder?
Yeah, the voice was a bit.
It is not that clear. Is it better? Yeah, slightly better.
Just on Europe market, I wanted to understand, it has been a good second consecutive year for the fighting growth in the Europe business per se. If you could sort of further elaborate in terms of the strategy to sustain this growth moment, that's my first question.
Thank you. Thank you, Tushar. Yes, Europe has been showing momentum, and we are able to sustain this. Of course, there is a combination of factors. Shortage management, I would say one, meaning market intel to understand what's going short and addressing it by replacement products. At the same time, ensuring our own out-of-stock situation does not lead to shortages, meaning enhanced supply chain efficiency, turnaround time at Malta. All these are very carefully being engineered. In the process, we are able to sustain this momentum. Coming back to your question, how are we able to sustain?
In my opinion, very strongly yes, because the number of launches we made in FY 2025 were significant, but in FY 2026, more number of products were planned, and some of them are going to be loss of exclusivity products. All these are in the positive note for us to believe that we will be posting a much stronger growth in the coming year. Thank you.
Thank you, sir. Thank you. Just on the margin front, while the start of Pen-G plant, probably resumption of normalization in Eugia-3. On the positive side, probably offsetting the Revlimid impact. Is there any other factor to be considered for margin uptick or downtick for FY 2026?
See, some of the new units, like China, which I explained, they were incurring some losses, which is expected to be breakeven or a very nominal positive in the coming year.
Like that, every unit, whatever has happened, we are able to improve upon the performance across all the businesses. We have been looking at it.
Can you compare how much losses are China plant for FY 2025?
The China plant last year was the first year. We have incurred a loss of around INR 35 crore plus. Probably we may be able to start like that. There are multiple opportunities which we are working on to improve the performance, coupled with the growth plans, which Murali has rightly explained by launching new products or the full year impact of the last year launches, etc., which will help to maintain the profitability. That is what we believe.
Having said that, I want to make it clear that we need to wait for the impact on a total tariff announcement, which is likely to happen in the month of July 2025, even though we do not feel there will be a major impact, etc. Nevertheless, we should wait for the announcements.
Thank you. Just one more if I may ask specifically.
Requesting you to skip to two questions and join back the queue. We'll move to the next question. Next question is from Neha Manpuria.
Yes, thanks for taking my question. First question on the U.S. business. I know you are not giving the breakup of the U.S. anymore, but just wanted to understand improvement in both the base business in the injectable as well as the oral solid.
Is it fair to assume that the injectable business has gone back to pre-disruption levels, unit for disruption levels in this quarter?
Yes. Neha, it is, I think last year, we have taken whatever supply-related disruption issues, and it got offset by some other opportunities. I think from Q1 of next financial year, that is FY 2026 Q1 onwards, we should be back to normal. Last year has been a tough year because of Eugia-3 remediation issues and supply disruptions. I think from Q1 onwards, we should be back to where we were in the past.
How should I think about growth for the injectable? I mean, given that UNESCO hasn't been cleared as yet, how do we see growth in the Eugia business if Revlimid also goes away? Just some color there.
Like FY 2026 is going to be muted in terms of growth per se because obviously you said it right. Eugia-3 is yet to be cleared, and there's no superstar product which is going to come in FY 2026. We expect FY 2026 to be in the similar levels as FY 2025, whether it is including or excluding Revlimid. FY 2027 should be a good year. That is what we believe, that FY 2026, we will be in a position to clear all the issues with FDA. FY 2027, we have significant launches and settlement-based launches planned. FY 2027 should be a great year. FY 2026 will be muted in terms of growth.
Got it. My second question is on the PLI capacity. Post the fire, by when do we expect production to normalize here?
Would it be fair to assume that the PLI capacity we were expecting to be profitable and ramp up, is that still on track, or could there be some delays on it based on when we get back to operation on the PLI capacity?
In order to put it clearly, and if we are to make a profit as contemplated, we need to run the plant full capacity. We do not want to run the plant off of the capacity pending the approval because it is a big plant. If some minor accident happens or etc., it will have a great impact, which we do not want to take the risk. Second is, I am sure now that, I mean, today TV, I have seen that the COVID is once again coming back with all these things. Probably government may start looking into that, giving the approval fast. That is there.
Third, the government is also, as I understand from the industry, government is also working on the minimum import prices. If that happens, then it will be a good ensure that we are not incurring losses, and we will be able to achieve the profit as contemplated or planned earlier.
Timelines for operation, when should we expect?
I think when it comes to the government, we cannot give the timelines.
Okay. Fair enough.
Thank you. Neha? The next question is from Surya Patra.
Yeah. Thanks for the opportunity, sir, and good set of numbers. Congrats for the good set of numbers, basically. My first point is the opening remark, you mentioned that the growth is likely to be sustained in FY 2026.
But you highlighted about the growth, obviously would be led by the Europe and emerging market, but kind of remained silent about the other bigger market like US and all. So knowing the fact that U.S. almost like 45% of the total, so is there a kind of risk that we have with the overall growth guidance, or if it can be clarity more on the U.S. business?
Suriya, I told in the opening remarks, we will be able to achieve the high single-digit revenue growth, excluding the transient product, right? And we will be able to give better clarity after the post-announcement, post-tariff announcements, etc. But as of date, the existing business, we are trying to grow it with a high single-digit margin, I mean, growth. We have been working on that.
Okay. Okay. Fine. Regards to U.S. business, European business, sorry.
It looked like that it has surpassed your earlier guidance of EUR 900-odd billion. Now, optically, there are things which would contribute incrementally to the growth, and you have also mentioned about the possibility or what are the factors of growth for here. I just wanted to have a sense that regards to kind of facilities that would be contributing towards the growth. Obviously, we have been saying that the China plant we just commissioned, that will facilitate the growth in Europe. The Vizag facility is also likely to see the injectable growth in Europe. On that specific front, sir, the supply chain for Europe, if you can be a bit more elaborative about what progress that you have already achieved so far as your injectable launches for Europe and how meaningful the China supply could be for Europe.
Because last year, I believe it was still the outsourcing of European operation was still to the tune of around 50-odd %. Going ahead for 2026, given these two plants' progress, what one should think and expect?
Murali?
Yeah. I can take it. Thank you. Thank you for this question. Actually, let me start. On our current revenue achievement, as you have noted, quarter on quarter, consistently, we are crossing the $200 million mark. That is no longer a challenge because we are already up towards $225 million in terms of revenue. How we are able to accomplish this is, again, how the supply chain efficiency is going to further contribute to this. This is not only by the injectable plant, but also our unit 15 advisory for the oral solids. The capacities have been substantially upped thanks to the management on strong investments.
There is a very considerable volume output happening from our Unit 15. China supplies have just started, two products so far, but we expect 10 products to kick in during the financial year. The injectable facility also will be up and running, meaning it is already approved, and supplies will start from Vizag. Additionally, I'd like to touch upon the turnaround time of the batches at Malta because we have substantial volume, and there the waiting time was significant. Through innovative measures, we are able to turn it around much faster. That allows the time-to-market opportunities being availed and working capital not being locked and flicker off further benefits there. A combination of all these means enhanced capacity, turnaround time at Malta, and also more and more tech transfers are happening that will offer better gross margin upside for us.
I'm just addressing your queries through this. Anything else to be touched upon, do let me know. Thank you.
Thank you. The next question is from Tarang Agarwal.
Hi. A couple of questions for me. One, sir, if I look at your fixed cost ways excluding R&D for FY 2025 versus FY 2024, there's been a quantum leap, and we are aware that it's because of plateau of regions, Eugia remediation, Pen-G, Vizag, China, so on and so forth. I mean, just to get a sense, how much would that quantum be for FY 2025, these one-offs because of regulatory reasons, because of state considerations, or because of just amplifying capacity, which is not contributing to revenue?
Tarang, the total other expenses during the year, I mean, during the year was INR 1,995 crore against INR 1,805 crore. You have to look into the aspect. The other expenses have not grown significantly.
It is one of the reasons the translation impact is taking place. Otherwise, the fixed expenses are in India will remain the same, in USA, other things may be on translation impact. Because euro earlier, we used to translate at a lower price, and I mean, lower rate. Now, we translate it at a higher rate. You cannot exactly say there is a significant impact. You look at the quarter three, quarter four alone, where there is no remediation charge, not much of remediation charges. It is mainly on account of the translation impact.
Okay. I mean, the one-offs like the INR 100 crore that you spoke of in Q4, and in Q1 and Q2, we are aware that Pen-G and remediation was resulting in a significant expansion in cost base. I was just trying to get a sense on what that number is.
Would that be to the tune of INR 400 crore-INR 500 crore for FY 2025, or would it be materially lower?
See, we said there is a one-off impact of INR 105 crore plus during the quarter. You take 50/50 between the cost of goods and the other expenses, approximately.
Okay. Second question is on the U.S. Basically, just wanted to get a sense on what was the finish for OTC for FY 2025, and just a broad sense on how are we looking at the oral solids and OTC business for FY 2026. Thank you.
I'm not sure I got your question on what is it on OTC finished OTC? What did you say? I mean, OTC used to be about $100 million for you. So how much was OTC for you in FY 2026? And what's your perspective on the oral solids business for FY 2026?
Yeah. Typically, we do not talk about the numbers for OTC, that I leave it to Subbu, but in terms of growth, OTC has done well the last two quarters. This quarter has been good. It continues to be good, and we continue to grow. We are looking forward to better growth in OTC. With regard to OSD, we believe that we are confident in our outlook for improved growth in the current fiscal, which is FY 2026. We have planned a number of new launches, and our team continues to assess opportunities with a view to drive medium to long-term growth and value creation with a more diversified portfolio of growth drivers primarily. This is what we are looking at, and we are optimistic in short.
Okay. Just a couple of more. What are the cumulative investments in the biosimilar business till March 2025?
Yeah. It's around $400 million plus.
Okay. Yeah. Okay.
What? Tarang, I would request you to please fall back in a line where it's between two questions at a time. The next question is from Amay Chalke.
Yeah. Am I audible?
Yes.
Yeah. Just take the marginal question from Karan ahead. Is it possible to give some color? Because we have said in the presentation that we will be launching biosimilars in Europe next year. When should we expect meaningful contribution to come in, considering three to four products have already filed in Europe?
Amay, this is Satakarni. In the biosimilar space, as you know, we received two approvals from the European Medicines Agency in the last quarter. We had one approval of Bevqolva in Q3 of the last fiscal. We also received a positive opinion for Dazublys, which is our version of Trastuzumab biosimilar.
I think last month, and we are expecting the approval from the European Commission in July. We plan to start our supplies from the second quarter, as I mentioned in the last training call, in the second quarter of this fiscal. Once we iron out our supply chain and stabilize our manufacturing and supplies, I expect the meaningful contributions from the biosimilar business to flow in from the next fiscal year. We expect it to be a double-digit revenue starting the next fiscal.
Sure. The second?
Yes, sir. The second question I have on the U.S., is it possible to give some color on the pipeline for the U.S. market? You have said that the plant is under preparation for plant thermals and respiratory products, etc. Where are we in terms of the filing in these type of products? Thank you.
This is not in the near term. I think we are progressing better than what we anticipated in terms of filing. We believe that these products would come into the medium term, not necessarily the short term.
In the short term, the drivers would be largely the injectable products and the hormone products, or anything else we should look out there as well?
The injectable product, I'll leave it to Yugandhar to talk about. As far as the short-term drivers are concerned, we expect newer launches from the oral solids and volume increases in certain products that we launched recently, and also some of the new launches that we did in the last one to two quarters.
Sure, sir. Thank you so much.
The next question is from Bino. Hi. Good morning. Good evening.
First question to Murali, just probably a little bit more on Europe. You said FY 2026 will see improved growth because of some LOE products, etc. One, would you be able to name some of these LOE products? Two, assume we have a very good growth in FY 2026. How should we look at growth in this market being a mature market ahead, FY 2027 to beat, etc.? Will it come back to the normal market growth rate of single digits, or do you see a pretty long runway?
Thank you, Bino, for this question. Let me take up the growth first and then the LOE products. In terms of growth, you know the generic growth in Europe is either flat or low single digits or maximum 4%-5%. We have been consistently clocking a high single digit growth.
I'm confident in this fiscal as well. We will be doing close to 8% growth, 8%-9%, contributed by several factors, which I have already listed a couple of times. Internally, we have kept a billion-dollar mark for this year as our mission, and we almost reached it. As Subbu mentioned, it was $987 million for the current year. Obviously, next year, we'll be scaling past the billion mark in size. Coming to the LOE products, there are about six products. I'm not sure whether I can name these at this moment, but these will be launched during the year, market by market. In some cases, we are going on a risk-based approach based on the legal opinion we have got, but we are confident we'll be able to successfully launch and clock the annualized revenues in the next fiscal. Thank you.
Understood.
Second question for you, Yugandhar. You mentioned about a few interesting launches, including settlements in the U.S. in FY 2027. Would you be able to name them?
Yeah. In fact, anyway, it's public information. So we have most of the oncology oral solids, which are going to come, which is related to Pomalidomide, Nintedanib, Sugammadex . So there are multiple. In fact, we have tentative approvals. We expect final approval to happen just before the launch. There are multiple settlements which will kick in end of FY 2026 and into FY 2027. I think beyond that, I cannot read the entire list, but yes, we have interesting launches lined up for FY 2027.
Got it. Is Macitentan part of it?
No. No.
Okay. And one last, Subbu, sir, the tax rate for the year was high compared to earlier years.
What should we look at for 2026 at a consolidated level?
I think the tax rate, the general tax rate for us is around 25%. But being very conservative, we do not take the deferred tax credit for all the loss-making units. Once they start becoming break-even, etc., I will get the tax rates done. So you can take approximately 28%-30% as the tax rate. Probably you will get a better idea going forward in the coming quarters.
Thank you. Thank you very much.
Thank you. The next question is from Andre.
Can you hear me? Hello?
If you can be a little louder, that would be better.
Yeah. So my question is rather broad. In the opening remarks, Mr. Santhanam said that he was quite satisfied with the good results that you have in the last year.
Now, if I were to look at it from an outside perspective, with the exception of the European business, the general growth trajectory last year has been somewhere around in the neighborhood of 10%, whether you look at revenues or profits, etc. I'm making a slightly broad statement. What is it that makes you say that these results are good? I want to understand your own evaluation and your own expectations of the business. Were there conditions in the business that were rather difficult last year, which makes a 10% kind of revenue profit growth satisfactory or more than satisfactory for you? If I were to extrapolate for next year against a comment saying that you expect next year to be muted in terms of results for the reasons that you outlined, what would in that context be an expectation of a good result for next year?
We are medicated this year. If you really see the Q4, year-on-year growth, we have achieved around 10%. Right? We are saying, excluding the transient product, we'll be achieving around high single-digit growth. That means the base business is growing consistently. Right? Plus anything the transient product will contribute, which has been mentioned earlier, that will get added to that. Second, please do not expect all businesses have to continuously perform every quarter. That is the reason what we have done is, see, there will be some pressure for some business in some quarter, etc. We are making the results, everything in a market basis. Right? That is the reason you have to look at it. If we get into every business, this business growing, not growing, etc., it's very difficult.
Second, with such a base of around INR 32,000 crore, some quarters there may be a drop, some quarters there may be high. Overall, you have to look at it year as a whole, whether we are doing it or not doing it like that. It is not a small business where it can grow by 50%, 40%, 30% like that. It is a very big business. When we say INR 32,000 crore grow by 8% or 9%, we are talking about a growth of around INR 2,500-INR 3,000 crore.
Okay. If I was to understand you correctly, what you are saying is that for a business with a large base, different components will still at any point of time move in different directions. Some will grow in
different directions. Our job is to ensure that overall, everything put together on a consolidated basis, we have to grow.
Therefore, a growth of 10% overall is good by your internal measures. Is that correct?
Yeah. High single digit, I said that.
Okay. Therefore, for the next year, what is it that you would consider a good performance?
I said no. High single digit is what we are targeting.
Okay. Okay. Thank you. Thank you very much.
Thank you. The next question is from Jigar Walia.
Hello. Yes. One is, if you can explain the importance of Unit 5 versus Unit 3. I mean, Unit 3 has been discussed a lot, but if you can give some more clarity with regards to how Unit 5 versus Unit 3.
Yeah. Unit 5, Jigar, we have already four lines which are installed, and we are actually almost adding four more lines related to BFS, PFS, cartridge, and one more aseptic line.
It will be almost eight significant lines with capabilities of aseptic, terminally sterilized cartridge products and PFS products and bank products. We expect Vizag to be a future plant not only as a de-risking for Eugia-3, but also contributing significantly starting FY 2027. We have plans of filing roughly around 10 products for the US and around 15 products for Europe. Obviously, all these products will be extended to other geographies. FY 2026 will be the significant filing year with FY 2027 contributing decent enough revenues for this plant. If you need to know anything else, most welcome. You can ask.
This is helpful. Unit 3 would be also having eight lines, or would it be?
No. Unit 3 has actually 17 lines. We do not want to create such a massive plant again.
We wanted to limit any future plans to be in the range of maximum 10 lines. We have expansion possibilities within the Vizag line, but only thing is at this point of time, we want to restrict ourselves to around eight lines.
Makes sense. Thank you. The question is, you partially mentioned in terms of the cumulative investments on biosimilar, etc. Overall, as a company, we made investments in Pen-G, Biosimilar, and CDMO. These are probably not contributing positively to the earnings as of now. If you can just give a cumulative number in terms of investments and maybe how much is a cumulative type of impact on the P&L now, and as it normalizes, so one can understand the data going ahead.
I can give you a very broad, rough estimate. We have invested around INR 2,700 crore in Pen-G. Right?
It has the potential to take the EBITDA more than INR 1,000 crore. Right? It has the potential. If good prices, if we get it, it can be higher also. What I'm saying is the potential in terms of the biosimilar, Satakarni has already mentioned to you. Right? What is he planning to do? This is very clear. CDMO also, I don't know whether CDMO, Satakarni is—Satakarni, can you talk about CDMO?
Yeah. I mean, Jigar, the CDMO business that we have in TheraNym, we are investing close to about INR 1,000 crore to build the 15 tails into multiple bioreactor capacities. The plants will be commissioned in Q2 of the next fiscal. We expect the validation batches to complete by Q4, which means we will see the revenues coming in from the following fiscal.
It takes time to build these plants, two and a half to three years. We are very much on track with commissioning the facilities and ensuring that it becomes into the commercial supply chain soon in the next four to six quarters' time.
Got it. Over, I mean, roughly over what, three, four years, should we see that these would earn company-level EBITDA margins or could it be sooner?
For the CMO, it will be about three to five years' time frame because it depends on the sponsor or the client and what capacities will they actually utilize, which we think is a fair bit of capacity right now. It also depends on once you complete your validation batches, how long would it take for the regulatory approvals to come in.
Anywhere between three to five years' time frame, three is the best case, and five is the worst case. We see normalcy sitting in.
Great. Great. Last, if I can squeeze in, the free cash flow is improving post-CapEx commitments. Is it any possibility for buybacks?
That's a good question. The last buyback was closed on August 31, 2024. You cannot do a buyback before, I mean, before August of this year. We have enough time to think about it, and our cash flows are pretty strong. Maybe boards can consider either buyback or dividend or whatever they want to do, they can consider it. The probability is good, actually, with the cash flow substantively.
Thank you. The next question is from Shyam Srinivasan.
Good morning. Thank you for taking my question. Just the first one on the Pen-G plant.
I just want to understand a little bit about the fire accident and the subsequent 20-day, 25-day. I think you also put a press release yesterday saying you are waiting some approval from the Andhra Pradesh board. Just can you give some clarity around what went wrong and what are the mitigation efforts and when does this restart? That's question one. Also, want to know in terms of production, how are we thinking in Pen-G? What is the monthly or the annual trajectory we would likely go back to? Subbu, you also mentioned about prices for Pen-G. If they are favorable, we'll do a certain level of EBITDA. I just want to understand how is it trending right now. We've heard some Chinese players actually cut 6-APA prices, for example.
I just want to understand the dynamics around Pen-G and what's our outlook for the next 12 months.
The first question is fire accident. This fire accident happened in the coal yard near the conveyor belt. This has happened because of the self-ignition of the coal heap because the temperature was very high, and after that, there was a rain or something like that. What I understand from the technical people, the temperature on the surface, we saw with the temperature inside the coal heap was very high. That led to self-ignition of the coal. Right? This is very common if you really see in the cement industry, etc. Unfortunately, it was near the conveyor belt which has impacted the conveyor belt, and that has been being rectified. It is expected to do that.
In the meantime, we also applied for the renewal, and anyway, one year was over in April, etc. We subjected ourselves to the inspection. In the meantime, this accident has happened, and hence it could not be proceeded. Now we will take it up with the Pollution Control Board, etc. I mean, Pollution Control Board. We cannot give a time frame, but certainly everybody will look into this project positively. Apart from that, this new COVID, I mean, this new COVID news is also we need to push the government very far, which we are likely to do that going forward. Third, in terms of the pricing, etc., 6-APA pricing, etc., I mean, if it is low, it is good. We can also take advantage of that so that we can make more money than what we can anticipate by doing it ourselves.
Under the minimum import price comes, etc., it's always better to take advantage of any opportunities coming in terms of reduced price. That's the way any company will do that.
Thank you, Subbu, for helpful. This minimum import price, you mentioned this few times. Sorry, I have not understood what the proposal is. Is it to help domestic industry? Sorry, can you explain what could be the contours of it?
I think what I understood from the industry sources is government is contemplating of putting the minimum import prices of few products, etc. We are also represented our product. Once we come to know from the government anything officially, we will certainly let you know why. This is being.
Sorry, Subbu, sorry to interrupt you. This is which product? Sorry, I didn't understand. Where are we looking for minimum input supports?
For PLI products only.
All PLI products. Understood. Okay. Y eah.
We came to know from the industry sources. I want to make it abundantly clearer.
Understood, sir. Okay. Lastly, you also mentioned in your opening remarks about July being a tariff. Maybe there is some, again, like you said, industry, there's a lot of discussion. Generics were exempted last year in 2019, even under Trump 1. Has there been some change which seems to suggest that?
Nothing. We are not suggesting anything. Whatever, we are not making any, we are not guessing anything. We are just saying there is an announcement likely in the month of July, so let's wait for that. That's it. We do not want to make any guesses about it.
Thank you, Shyam. We will now take the last two questions. The next question is from Nitin Agarwal . We are not able to hear you clearly.
Sorry.
Is it okay now?
Yes.
Yeah. Yeah. I was saying about the biosimilar business. You mentioned that we invested almost $400 million in the business so far. At what time frame should we start to expect making decent expected ROCs on this business? Is this going to be 2027, 2028, or subsequently?
We expect 2028 would be the inflection year for the biosimilar business. The business will stabilize with about seven products in the regulated markets, both in Europe and possibly a couple of products in the U.S. by 2028. You should look at 2028 to 2030 as the years where you can see biosimilar business trajectory building up.
As it comes to, while not looking at specific guidance, but given the way you're seeing the business, the way you see the dynamics in the biosimilar business, the pipeline that we have, I mean, over the time frame, 2028, 2029, 2030, excluding the CDMO part, only the biosimilar part, I mean, how big is the business? What is the potential of the business to get to in terms of size? Is it a $500 million business, a billion-dollar business? And where does it get to in terms of the investment that you made and the capabilities that we have in this business?
One of my earlier answers to one of the earlier questions, I explained that I would hate to put numbers to it because we are looking at extremely complex and dynamic environment, both in Europe as well as the U.S., when it comes to biosimilar business and its disruption. Having said that, with the portfolio that we are having, especially with the four products that are now approved, followed by the Denosumab, Omalizumab, and the Bevacizumab , which are likely to get approved in the next four to six quarters, I expect by 2030, 2031, the business could be anywhere between $250 million-$400 million in revenues. It depends on various factors.
It's very subjective, and you cannot pinpoint to a certain number, but expect to be a significant size provided such as regulatory decisions go our way in the U.S. and other regulatory markets.
Thank you, Nitin. The next question is from Anubhav Agarwal.
Hi guys. Just Subbu's getting some clarity on the guidance here. One, what contribution are you including from Pen-G plant coming back in the guidance here? Or how many months of production are you including?
I think we are including around six to eight months.
That would be roughly about 3%-4% revenues, 5%-6% revenue. I'm just trying to understand because that number can be 3%-4% in a guidance of high single-digit growth.
We cannot specifically tell the numbers of individual business, but what we can tell is, suppose if you are able to make a production of anywhere between 8,000 tons-10,000 tons in a year, certainly easily some 50% will go into the external market. It all depends upon the price at that particular point of time, etc. As I told you earlier, Anupal, if we are unable to make it in one business, we will try to make it up in another business. That's the way we keep on moving, and we have multiple levers, multiple businesses in every market. We have to try to work on that.
Sure. That's helpful. Second clarity on the guidance is on linear demand, right, or generic Revlimid. Very roughly, year on year would be significantly, FY 2026 would be significantly lower than 2025, flattish.
Just a very rough qualitative sense would help us because I know your guidance is excluding the transient product, but at the same time, margin is the absolute number, right, which is same year on year.
It will be FY 2026 will be less than FY 2025.
That's helpful. Last clarity on other operating income. So this year was about INR 350 crore. Roughly, next year, will it be a flattish number, growth of about high single-digit, just some idea about other operating income?
Mostly, our other operating income should be around INR 200 crore plus.
Thank you, everyone. Okay. Ladies and gentlemen, yes, I'm closing the box.
Yes. Thank you all for joining us on the call today. If you have any of your questions unanswered, please feel free to keep in touch with the investor relations team.
The transcript of this call will be uploaded on our website, www.aurobindo.com, in due course. Thank you and have a great day.
Ladies and gentlemen, on behalf of Aurobindo Pharma, that concludes today's conference. Thank you for joining us, and you may now disconnect your lines and exit the webinar. Thank you.