Welcome to the quarter four and the full year results presentation. We will structure the discussion in three parts as usual: Domestic Formulations, International business, and the Consolidated statements. First with the Domestic business results. In quarter four, our Domestic business grew by 12% and EBITDA grew by 10% with a margin of 37%. For the full year, our revenue growth was 11% and EBITDA growth of 12% with a 37% margin. EBITDA margin expanded from 36.5% in FY 2025 to 37% in FY 2026. In terms of absolute numbers, quarter four revenue was at INR 671 crores, and the full year DBF revenue was at INR 2,778 crores.
The quarter four EBITDA was at INR 246 crores, 10% margin, slightly depressed because of the semaglutide pre-launch expenses. Full year EBITDA for DBF was INR 1,026 crores, which is a 12% growth year-on-year. EBITDA margin expanded from 36.5% in FY 2025 to 37% in FY 2026. Looking back at the key hits and misses during the year. The key misses were largely two. Number one, there was a revenue loss of around INR 55 crores-INR 60 crores because of significant new launches that were earlier planned, but then they had to be abandoned or delayed. Saxenda was a weight loss SKU of liraglutide. We had to abandon that due to a delayed regulatory approval.
Aspart and esaxerenone , which were two very important launches planned for FY 2026, got deferred to FY 2027 on account of regulatory delays. On the insulin side, we again incurred a sale loss of around INR 50 crores in FY 2026 on the back of a similar number in FY 2025. Because the insourcing of the products and the commercial manufacture from Bhopal has been delayed by nearly a year, again, on account of regulatory delays. While we continue to be dependent on third-party supplies in FY 2026. We had to take this revenue loss because the supplies were not commensurate with the demand. Thirdly, our critical care business did not take off as expected. Looking at the things that worked very well, the insulin segment performance, the numbers speak for themselves.
Our market share in RHI cartridges increased from 13%- 24% during the course of the year. Our market share in the overall insulin segment, which is RHI + glargine, increased from 12%- 16% during the year. The growth in insulins for us outpaced the covered market growth by nearly five-fold. The CVM growth was 6.7%, and the Eris growth was 32%. The Derma segment consistently outperformed its covered market in all four quarters. For the financial year, Eris growth was 14.2% versus the covered market growth of 8.6%, with EBITDA margin well above the DBF average of 37%. Our semaglutide brand, SUNDAE, has taken off to a robust start. We launched the product in two presentations, vial and pen.
For the very first full month, that is April 26, as per the reflection in IQVIA, Eris is ranked number one in injectable semaglutide by sale volume, and Eris is ranked number two in the injectable semaglutide by sale value. We take this as a strong reflection of the present strength of the Eris injectable diversity platform. Moving over to the key numbers. As per IQVIA, the Eris market share in injectable semaglutide by units started at 13% in March and stood at 22% in April. Eris market share by sale value started at 5% in March and stands at 13% in April. By way of prescription share, Eris market share in injectable semaglutide stands at 22% in May, having started at 8% in March and 18% in April.
The other noteworthy point here is that we launched the vial in March, and we launched our pen in mid-April with just one SKU, which is 2 mg. Despite that, we clocked a market share in the pen segment of 11% by volume and 6% by value. Recapping the salient features of our semaglutide launch. The market size and structure is evolving in line with our expectation. The market size estimate in the first month was 1.5 lakh- 2 lakh active users of generic semaglutide. Over 75% of the prescriptions are being driven by diabetes rather than obesity. Vials, as a percentage of the overall injectable market, stood at 21% in April. This is by volume. We expect this number to settle down at 25%-30% on a steady-state basis.
Our semaglutide launch was in a phased manner post the loss of exclusivity. We launched SUNDAE vial in March. SUNDAE pen 2 mg came in mid-April. We launched the 4 mg SUNDAE pen in early May. We expect obesity SKU to be launched in July. Our products are priced lower than competition. We believe that these are more sustainable price points in the long term. Our vials are priced at INR 1,290 per unit, and our pens are priced at INR 3,200 per unit for both the 2 mg and the 4 mg SKUs. Happy to note that our first month performance validates our ongoing thesis of being able to take a leading position in semaglutide based on the strength of our insulin franchise. Three aspects of this which we would like to recap.
One is our patient care platform, which is focused on developing and nurturing long-term relationships with patients. Secondly, our credibility and market share with the key opinion leaders in the diabeto-endo space. The long-standing experience and supply chain of handling cold chain products. We expect tailwinds for SUNDAE pen starting Q2 of this year because, A, we would have insourced the manufacturing of SUNDAE pen with a phase I insert capacity of five million units per annum. This will ease out any teething, you know, supply issues alongside considerable margin improvement. Moving on to our DBF business guidance for the current financial year 2026/ 2027. The FY 2026 base revenue was INR 2,778 crores. We guide to a growth of 30% over covered market growth for the current financial year.
We expect DBF EBITDA for the current year to come in at 37%, which is a similar level as the FY 2026. We expect the H2 margin to be higher than H1. Moving on to the International business. As against a Q4 revenue plan of INR 115 crores, we ended the quarter at INR 86 crores. We were able to not ship out almost INR 30 crores of finished goods due to supply chain disruptions which resulted from a situation that we are well aware of v ersus a INR 375 crore targeted revenue for the year, we closed the year at INR 348 crores with a growth of 7%. Q4 EBITDA came in at INR 28 crores with a margin of 32.4%. FY 2026 EBITDA came in at INR 110 crores with a margin of 32%.
We got the outcome of the EU GMP inspection last month. We have a list of non-compliance observations which we need to remediate. These are largely procedural in nature, with minimal impact on the existing business. Remediation of these observations remains a priority for us. On the existing business, we are guiding to a revenue growth of 18%-20% this year, with EBITDA margin at similar levels as FY 2026. The EU CDMO products will get commercialized post the re-inspection and re-approval of the facilities. Moving on to the consolidated picture. Consol Q4 revenue growth came in at 7% and EBITDA growth at 8%. For the full year, the revenue growth came in at 8% and EBITDA growth at 10%. Let's look at these numbers in detail.
Consol revenue for Q4 was INR 757 crores, and for the full year was INR 3,129 crores. Consol EBITDA for the full year was INR 1,120 crores. I'd like to call out a couple of things in particular. If we look at the core business, which excludes trade generics, which we discontinued in FY 2026, and the low-margin DBF injectables, which we have spoken about before, FY 2026 revenue growth came in at 10% and FY 2026 EBITDA came in at INR 1,146 crores. This is higher by INR 26 crores over a reported EBITDA of INR 1,120 crores. This represents a year-on-year EBITDA growth of 13%, which is reflective of what is happening in the core business.
The consolidated EBITDA margin also comes out to be 37.5%. Looking at the consolidated P&L for the year, I'll call out the highlights. The Profit After Tax from continuing operations came in at INR 132 crores in Q4, which is a 29% growth. For the full year, came in at INR 498 crores, which is a 34% year-on-year growth. This is the EPS acceleration which we spoke about earlier, where a 10% expansion in EBITDA gave us a 34% expansion in Profit After Tax. The reported PAT came in at INR 279 crores for the quarter and INR 648 crores for the full year. This is because of a one-off upside of INR 150 crores from a deferred tax adjustment. EPS from continuing operations came in at INR 36 in FY 2026.
The effective book tax rate for the year was 22%, excluding the DTL impact. It's down by 140 bps from last year. Finance cost for FY 2026 was down 17% from last year. CapEx for the financial year came close to INR 300 crores, largely on biologics and sterile injectors. The closing net debt for the year was INR 2,255 crores, which is at 2x of EBITDA and down two turns over the last two years. OCF to EBITDA ratio came in at close to 50% for the financial year versus 105% for the last financial year. This brings us to the end of this presentation, and we can now open up for Q&A.
Thank you, Sir. Ladies and gentlemen, we will now begin the question and answer session. Participants who wish to ask questions may do so by clicking the Raise Hand icon at the bottom of your screen and wait for your turn to speak. When prompted, you can accept the prompt on your screen, unmute your audio, introduce the firm you represent, and ask your questions or give comments. We will wait for a moment while the question queue assembles. The first question comes from the line of [Kunal Randeria].
Yeah, hi. Good afternoon, and thanks for taking my question. Sir, the DBF growth of 12% looks pretty solid, and in insulin also you have done pretty well. It also indicates that the ex-insulin business growth would have been maybe around 8%-9% only. Is my understanding correct? This is how will the growth shape up in the next couple of years also?
Kunal, can you say it again, please? I just missed you.
Yeah, Amit, Sir. Amit Sir, I meant, you see your Domestic Branded Formulations did pretty well, 12% growth. In insulin you seem to have been doing exceptionally well again. It kind of indicates that your ex-insulin business, other than insulin, that business would have grown only around 8%-9%. Is my understanding correct here? Is this how the growth will look in the next few years?
No, Kunal, I don't think. I think, you know, when you see this data, the biggest drag on this data is OAD. The OAD growth has been a minimal, I think, 2%, 3%, 4%. OAD, we had a Glimisave MV ban last year, which was INR 30 crore for us, which internally is like 4%, 4.5%. What will you see is that that ban happened in the month of April last year, KK, somewhere there? April. By May, what will you see that the base correction would happen. That is only one thing. You know, the way April, May is shaping up, we can tell you that, you know, your logic might not be, might not be correct. We are seeing a little bit of, you know, rebound in OAD, and then we are launching a couple of more products, the esaxerenone , which I spoke about later.
I think insulin double digit growth is something which could be easily achieved.
Wow. That's good to hear. That's good to hear, Sir. Second comment maybe related to the first one is on semaglutide. Interesting comment you have made, diabetes seems to be the driver in the market. Can you tell us which current therapies or the line of treatment is it replacing? Do you think it can maybe pose a threat to the entire OAD space also? Maybe let's say instead of , you know, a DPP-4, doctors are now giving a GLP-1. Will it hit your DPP-4 possibly in future?
Kunal, what you're saying is technically right. It's basic science that, you know, what GLP gives you is like 100 x of what DPP-4 gives you. In the presence of GLP, DPP-4 doesn't really, you know, moves the needle. Look, DPP-4 is like a everyday, it's a first-line treatment for everyday diabetes. GLP, we expect, I expect, say, 1.5 million patient by the end of the year, stable patient. While what you're saying is correct, but out of the overall universe of diabetes patient, this 1.5 million patient is too less to really, you know, move the needle. Yes, there could be a slowdown in the growth rate.
Please do not consider at this point of time that we will see any kind of a downturn in any OADs, not because of any technical reason, just because the denominator is very high and the number of patient we expect on GLP is not going to be that high in the first year comparatively.
Right, Sir. Got it. Just one more financial question, if I can. Sir, receivables, and inventory have gone up substantially, especially receivables, you know, from INR 450 crores to somewhere around INR 680 crores. Maybe care to shed some light on this?
Yeah. I think inventory, large inventory has gone up because of our International business. That is where because of, you know, early on, when we saw this disturbance, we piled up a lot of inventory in the international business. Because last quarter we could not ship it out, so it's showing up. We did a similar exercise for our domestic business also. We are ready to do some key APIs of ours were moving as much as 70%, 80%, you know, higher. We created a large inventory there. That is inventory. The second is the revenue days. Revenue days is something which we need to correct, right? I think the debtor days, I'm sorry. I think a good number for debtor days, you know, more like 60 days. That is what we are aiming. I think within two quarter we should be up there.
I got that, Sir. Why would it go up so much in one year from INR 458 crores- INR 680 crores? I mean, there has to be some reason behind this, right?
Yeah, reason is, Kunal. Yeah, KK, you want to say something?
Yeah. Kunal, just to, you know, build on what Amit was saying, the strategic stock of A and then we had finished goods which we could not ship off. This is a significant magnitude. I mean, there is no point in calling out these numbers, but we have taken like, you know, almost nine months of inventory build up as far as RM and PM are concerned. This is a considerable amount, and this was a conscious call.
Debtor days also International business has really contributed.
Yes. Because we didn't collect much in quarter four. Yeah because of all these disciplines.
Kunal, what we hear is because, you know, the dollar is moving here and there and, you know, it was delivered at a time when it was here. You know, there's a little bit of things which are going along, which are going, but my team tells me that, you know, the international piece will be fixed. Yeah.
As of today, we are on 20th May, the international debtors are lower by 25% already. What you're seeing is a 31st March number, right? I'm just talking about ongoing operations. We've already started collecting this quarter, which is why Amit made that comment that in a couple of quarters we are confident that debtor days will come back to normal.
Sure, Sir. As long as I mean, there is no risk of a bad debt, right? I mean, that's the takeaway.
No, no. Because that doesn't look like.
Oh, perfect, sir. Thank you. Thank you very much, and all the best.
Thank you. The next question comes from the line of Kunal Dhamesha.
Hey. Hi, good evening. This is Kunal from Macquarie Capital. Just one for Amit on, you know, the uptake of semaglutide and diabetes. You know, Amit, what kind of trend are you witnessing? Is it used for the existing patients more or let's say the new patients which are being started on semaglutide? If it is existing patient, then I believe that the risk to the existing therapies would be much lower, right? Because existing therapies would continue for the same patient. Some color would be helpful. The second aspect of this question is, in terms of dose titration, how it works, how much time does it take for a patient to stabilize on a particular dose of semaglutide? That's my first question.
Yeah, Kunal. Look, I think the first month reflected, generics reflected at around INR 40 crore-INR 45 crore. There had been some number crunching which is being done that, you know, 50,000 to one lakh patients have been added. I see a lot of, you know, enthusiasm, but it is a cautious enthusiasm, right? I feel that many people, many doctors are taking their own time. You know, they would come on board in a while. Yes, we are seeing, if you look at the usage, 70% of the patient on diabetes should require GLP as from a guideline perspective. We have just started. The first level of patients which we are seeing are the patients who have diabetes uncontrolled and have a visible fat. Right now, if I tell you my own numbers, we have been looking into because our people services the patient.
We get an access. We can tell you BMI less than 30, the prescription is only 10%.
Okay.
90% of the even in diabetes is BMI more than 30. That is where the starting point is. The second thing we see that BMI more than 30 and liver, fatty liver, right? Again, [as feeds]. That is where it has started. You know, it's been one and a half month, right. Patients start with 0.25 mg, and 0.25 mg is generally a warm-up kind of a thing. In the next month onwards we will have patients coming back also. Kunal, this is going to be, it's going to be a good therapy. It's going to be a breakout therapy. People who are using it are very happy. Patient resistance is still there because, you know, there's too much voice outside our ecosystem. Which over a period of time will get little toned down. This is one.
What will it replace? Kunal, look, again, I'm sorry I'm repeating, but we expect 1 million patient- 1.5 million patient in the first year. Our diabetes denominator, this is a very small number. I once again reiterate that we might not find any slowdown particular in any OADs. Right? At least this year. If this therapy goes to 20%- 30% of diabetes, which it should go over a period of time, then we will see some slowdown in other OADs.
Sure. I am in the same camp that it would not slow down OADs, but yeah, let's see. Yeah.
Yeah. It looks like that.
Sure.
It's a good start, Kunal. It's a good start. Our brand has taken off well. We are number one in prescription also. The good thing is we started with vials, and typically vials were a little, in today's time, general thinking is that it's a little difficult sell. Once again, it is people who have been selling insulin has come. You know, they have been the real, you know, change for us. We see doctors and patient needs a lot of support here. Hand-holding they need. I think that is what is sticking out. It seems that our brand name is also liked, which is a nice thing to know.
Sure. Second question on our FY 2027 Domestic Formulation business guidance, growth guidance of around 1.3x in covered market rate, right? What are your, you know, assumption regarding the growth for our covered market for FY 2027?
It has always been double digit, Kunal. I don't think anything changing there. Whatever semaglutide adds. Semaglutide is a different story. I think the covered market has always been double digit.
Sure. Basically then, at a console level, we should expect around mid-teens plus kind of top-line growth because export we are expecting a high teens growth, right?
Yeah. Technically, yes.
Okay. Then, you know, for the EBITDA margin, you know, I know we have been launching semaglutide and there'll be launch expenses, et cetera. Do you see any upside to the profitability in FY 2027, from what we have guided? Any drivers that you see which you are currently reluctant given all the, you know, geopolitical headwinds, et cetera. Any driver you can highlight?
Kunal, look, we feel the H1 would be a little bit of a drag, you know, on the gross margins because of, you know, all that we know. Especially semaglutide initially, you know, we have been talking about that would not be a very profitable thing. In the H2 Look, we have a lot of what we have missed is also because our Bhopal plant didn't start at time. Now that seems to be, you know, up close there. The SKUs are all already started, the benefit should start sooner. For us, what will save us in terms of gross margins, even if the price relatively remain high, is the second half of Bhopal manufacturing. The incoming of SUNDAE, which is semaglutide. I would not say that we can, you know, increase the margins. I would like that to be the way it is put up.
You will see an H1 being softer than an H2. That is what we assume.
Sure. I have more question. I'll join back with you. Thank you and all the best.
Thank you. Participants who wish to ask questions may do so by clicking the Raise Hand icon at the bottom of your screen and wait for your turn to speak. When prompted, you can accept the prompt on your screen, unmute your audio, introduce the firm you represent, and ask your questions. Next question comes from the line of Harith Ahamed. Please go ahead.
Hi, this is Harith from Avendus. Amit, Sir, you touched on the Bhopal facility and the expectation around completion of the cartridge line there. If I heard correctly, we are expecting that to come online by the second half of 2027. Post that, can we expect a further ramp-up in our market share for RH Insulin cartridges from the current 10.4%?
Harith, we are in a good space as far as the insulins are concerned, whether it is the cartridges, vials, or glargine. You would see us ramping up all along, right? Even when we look at the April data, insulin GLP put together had a 35% growth, if I'm not wrong, in the IQVIA numbers. You know, the base was set last year, and now it will ramp up. Insulins, we have been quite confident, and that is how it will show up. That's about the insulin. Also remember, last week, around 15 days back, we took the first engineering batch of bio semaglutide in the Bhopal plant.
We received the PCT and we took the first batch, engineering batch. Then we took a PV batch also. This month end, we will be taking two more batches. One is degludec plain and the other is degludec lira. What happens, you will see a ramp-up happening in insulins from the tailwind of the last year, and then by the time we enter the next year, we will have two more, you know, big markets open for us. Strategically, our insulins and analogs and GLP piece is quite well settled, both from, you know, how they are today and how they and what kind of addition will happen into that basket. All put together, insulin has been, you know, we are very happy with insulin, and we feel that we could be , you know, we could really ramp it up well.
Got it, sir. Specifically on insulin aspart, you touched on some regulatory delays there. I'm just wondering what exactly is the cause of this delay, because this is a U.S. FDA approved product for our partner Biocon. Is this part of our expectation for FY 2027?
Yeah.
On the analog insulin part, you know, you touched on degludec. Degludec and lispro, I know these are for a bit later, but you know, do we have a partner for these products? Because as far as I understand, Biocon doesn't have these in their portfolio.
Harith, man, my friend, please understand. We have been doing the DS ourselves now.
Okay.
It's been two years we have been telling to you that, you know, we have our own DS setup level, which made the liraglutide, right? Which is now also is doing romiplostim, which is in phase III already. We have 50% of phase III patient also have already been done. All these products, the entire degludec family and the recombinant semaglutide is coming from our own DS.
Okay.
We are further investing and expanding the DS capacity. We have already, you know, put INR 150 crore- INR 180 crores this, by this time. Sachin?
Yeah.
Right? We have already put some INR 150 crores-INR 180 crores. Premix which you see also goes up there. Now we have a DS and a DP both line internally. So romiplostim, I told you, other than insulin, teriparatide is going into phase III.
Okay.
We've already got approval now for the phase III trial. We will start putting patients together. The biotech, once again, I'm reiterating, and I'm sorry we were not able to communicate this well. Our Biocon platform, right from when we entered insulins has been in works. Today, if you look at our platform, we have four commercialized products and four products which are clear PCT are either in phase I or in phase III.
Got it, sir. Just to confirm, aspart, both the, you know, plain aspart as well as the premixed, we can expect in FY 2027.
No, aspart is Harith, aspart is not there with us. Aspart has to be taken from out, right? You know there were some concerns regarding aspart, not from the quality and regulatory, but there were some other concerns regarding aspart. That's why it gets delayed. We are launching it in FY 2027.
Got it, sir. Thanks for taking my question.
Thank you.
Thank you. The next question comes from the line of [ Shashank Goel]. Please go ahead. Mr. Shashank Goel, your line is unmuted. Please go ahead with your question. Sir, there seems to be no response. We have the next question from Nilay Parekh.
Nilay Parekh from Perpetuity Ventures . My question is regarding the EU GMP, this inspection. Can you please deep dive in more details about the strategy and the remediation timeline? Also, what will be the approx quantifiable impact in FY 2027 in the EU CDMO product segment?
Yeah. Answering the first question, we've already shared that most of the observations are procedural in nature, so they require remediation in terms of training and ensuring adherence to SOPs. Those initiatives are already underway in full swing. In fact, we've already had an audit from an important customer last week, and they are pretty satisfied with what is going on. I would say that the remediation initiatives are well on way, and we should get there soon enough to a point where we can invite the agency for a second inspection. In terms of impact of the CDMO products, we had outlined to you know, last quarter that between the CDMO and the base business, we can look at a revenue of INR 550 crores-INR 600 crores. That's what we told you.
Now we are guiding you to a 18%-20% growth rate, which is coming only from the existing business. The data which is, you know, to the tune of INR 120 crores-INR 140 crores, that is the CDMO component, which is pretty much intact, but it will go commercial once the facility gets reapproved.
Okay, sir. Okay. Thanks a lot.
Thank you. The next question comes from [Rahul Agarwal]. Mr. Rahul Agarwal, your line is unmuted. Please go ahead.
Thanks for the opportunity. In terms of the semaglutide pens. How has the market share trended in May in terms of prescriptions? You indicated a 22% prescription market share. Is that for pens and vials combined or would you have a broad brush split there?
What's that?
22% market share in prescription.
Yeah.
This pen and vials combined. Yes
Yes. It's a pen and vial combined. Until this point of time when we speak, that has actually gone up. In May, our market share has gone up in prescriptions.
Got it. How is the split, Amit, between pens versus vials broadly?
Pen, look, vials we launched early on by, you know, by the time the LOE was instituted. Pen, it took some time for us to launch the pen. Pen was launched mid-April. We have one SKU, so there was a little bit of a drag there. Right now, in my prescription, I am reporting. Let me just do a math. 104, 70%, and 40%. Almost 60% coming from vials and 40% coming from pens. That's how the split is in prescription. The units are a little more units, we expect units to be more like 50/50 or 60/40, in that zone.
Got it. That's helpful. On the EU CDMO bit, KK, just following up on the last participant's question. You mentioned that there was a customer audit last week and that went well. Overall, in the long term, you guys had indicated a INR 800 crore-INR 1,000 crore EU CDMO opportunity. How do you see that being affected significantly because of these regulatory issues? How have the discussions with the customers been? Is that just a postponement or do you expect meaningful impact there?
Yeah. Valid concern, and happy to report that there is no impact on that book. All the key items that were part of the book still continue to be part of the book. The timeline impact is only in respect of this one product which had to go commercial in quarter one, which we are ready for, and which is what is making this revenue dent in the current financial year. Barring that, we don't see any long-term impact.
Got it. This facility that we had this impact for, I'm assuming is the old Swiss facility?
Yes.
Would we also be triggering a separate approval for the Eris facility that we had put up CapEx for? Or will this now all be part of the combined facility and has the same approval process?
The EU inspection was conducted for the two injectable units, which are under Swiss Parenterals, right? The Eris unit is oral solids and dermatology unit. That unit did not get inspected in March. The only two units that got inspected were the two units of Swiss, which have been carrying a EU approval since the year 2020.
Got it. By when do you expect to trigger the re-inspection and remediation KK on this?
The trigger will be soon enough because we have to do the CAPA, which is the Corrective Action and Preventive Action plan, and submit it to the agency, which I see happening soon enough. What we are unable to tell you, though, is, you know, when we can expect the agency to come back again, because, you know, that is, you know, subject matter of a calendaring scheduling thing.
Got it. Thank you so much and good luck.
Thank you. The next question comes from the line of [Tushar Manudhane]. Mr. Tushar Manudhane, you can go ahead with your question.
Yeah. Am I audible?
Yes, sir, you are.
Thanks for the opportunity. Sir, just on this EU re-inspection and the growth guidance, just a clarification again here, like 18%- 20% revenue growth guidance is considering CDMO EU facility clearance and an incremental business from that or without that?
Without.
How much was that impact of this EU CDMO business, which has sort of postponed because of the re-inspection?
As explained earlier, we had penciled in about INR 120 crores- INR 140 crores of revenue coming in from EU CDMO, which is the piece that has been postponed.
Just a bit clarification, has the customer utilized, maybe like as a two supplier, in terms of this so that which is why probably that business is lost or that business is postponed?
That business is postponed, Tushar. It is not lost because fortunately for us this product is in short supply in the target markets. The customer is working alongside us to see how the remediation and how the re-approval can happen ASAP.
Okay. Is this the product which triggered this inspection or some other product triggered the inspection?
This was not triggered, Tushar. This two facilities have been approved since 2020, as we've been telling you in the past. EU comes for inspection every two years. The OSD facilities get a three-year approval, and injectable facilities get a two-year approval. This was part of the normal two-year inspection cycle.
Understood. Sir, if you could also sort of break down the DBF growth therapy-wise, maybe for FY 2026 or for FY 2026?
What is that, sir?
DBF growth therapy-wise.
Tushar, you can find that in the data now. Largely, I tell you the whole drag is coming from the OAD, which I explained. OADs was, you know, a very small 2%, 3% growth, that is where the whole drag is coming. Other than that, insulin was right upfront there. Cardiology, we have caught up. You know, it's like almost at the market now. Traveled quite a distance in the last year. Dermatology, we had been ahead. The drag which you see is largely coming from OADs.
Got it. Sir, if you could share semaglutide, like we have already shared, let's say the market share. If you could at least in the month of April, how much sales we made, that just to get an idea in terms of what the industry size is?
Oh, of course.
April?
Yeah. Tushar, April, our inflection was INR 4 crores, which is like more or less which we are there. We started at INR 4 crores and this is going to be a month-on-month build-up for the entire year. That's how this new market will unravel.
The way this market has built up is that in line with in terms of the industry size? For example, INR 30 crore a month approximately in April, effectively taking the market size. Of course, it's scaling up, so can't annualize it. Do you think the industry is scaling up in line with your expectation?
Tushar, very early. Very early. Just two, three more months. We look, patient onboarding is not bad, right? You know, these are all numbers which we divide and, you know, these are assumptions which we made. A lot of stuff sits in the, you know, in the shelf also. I don't really believe that, number of 1.5 lakh- 2 lakh. What we can tell you, in the HealthPlix data, which covers, you know, a small part of the decent part of the doctors, that reports around 25,000 patients- 27,000 patients, right? Real data, monthly. 25,000 monthly from HealthPlix cohort is not a, is a good start. The large physician community is still not kind of, you know, it's not, still not there.
That happens every time there's a new drug, there's a new molecule which is launched. This will be a good market, Tushar. We are quite confident, and it's a very good drug also.
Sir, just this INR 4 crore in April has, by your judgment, what that number is in month of May?
S orry, sir. What's that?
May.
Huh?
Four was in April, how much was in May?
Yeah. We expect around 20% movement between April and May.
Four to five.
Four to five , yeah. On a secondary basis, right?
Got it. Thanks a lot.
Thank you.
Thank you. Participants who wish to ask questions may do so by clicking the Raise Hand icon at the bottom of your screen and wait for your turn to speak. Next, we have a follow-up question from Kunal Dhamesha. Please go ahead.
Hi. Thanks for the opportunity again. Just on the semaglutide-generic market, has the competitive intensity which you are witnessing, is in line with, you know, what you had expected or is it better? What is the, you know, impact on potential pricing in that market, let's say, you know, one year forward? Do we expect prices to start increasing from here? Do we still see that there will be continuous pressure on keeping our prices, you know, very affordable in this segment?
Kunal, look, contrary to what everybody thought, the competition is not very fragmented here. We don't see, you know, as, you know, we read in a lot of reports, media, 100 people, 50 people. You know, because this is a little bit of a complex selling, I, you know, I don't find this going to that level. I think this is the brand where very initially you will see the top five, top six gaining 65%, 70%, 75% market share. I don't think that would change, you know, in the near future also because of the supply chain, because of the complexity and all those things. Contrary to what, you know, what was written, all over, I believe that this is going to be a five, six player game, and you will see a 13%-15% market share person, being there as number one. This is what it looks like today.
Now, price. Look, prices going up in India is something which I haven't kind of, you know, seen. We only talk about prices going down, and then do we make a profitable, you know, will it be a profitable sale? We actually priced our product 30% lower than, you know, most of the companies. Generally, if you look at largely everybody is INR 4,200 crores for a 2 mg pen. We are at INR 3,200 crores. We've already taken a little bit of a price cut because we feel that this might be a little more sustainable. Instead of price rise, I will see some price correction happening over the next year, and then it gets stable.
Sure. Then, let's say once our capacity kicks in for pens, et cetera, right, do you see that, you know, once scaled up, this could be as good as a profit generator as our current business?
Look, at a EBITDA level, there is a good possibility. At a gross margin level, no. Will we ever see it getting to 80% gross margin? I don't think ever.
Amit.
Can that be, you know, because it will be not as competitive, blah, blah. Can it give us the same EBITDA? I am hopeful for that.
Okay. Sure. Then on the, you know, the European, you know, this, the entire plant issue. You know, generally, you know, I have not seen any company struggling with the EU GMP, right? What is it that they found out, even if those were procedural? My view is that EU GMP is generally very, you know, they are very open to dialogue and, understanding your perspective, right? What actually transpired in a way that, you know, we are basically left with the, you know, issue. While we continue to say it's procedural, but it would be great if you could highlight, you know, couple of key observation that they have highlighted and, you know, what's the corrective plan.
Have we kind of employed any consultancy agency to kind of, you know, carry out that plan. Will it require some form of infrastructure changes in the plant or, you know, maybe a shutdown of particular lines to carry out remediation plan? Those details would be helpful.
Kunal, look, when we told you it's all procedural, right? You know, KK will kind of, you know, enhance that. What I remember seeing that there is no QA, no QC, no data integrity issue. What I remember reading is the flow of, you know, people movement, right? The SOPs follow SOPs, for the movement, especially around the microbial, you know, product, the anti, antimicrobials. Largely in that zone. We have discussed this, so I can tell you that we do not expect any CapEx for remediation. It is more about procedural. Agency hiring, training is already done. That is what I know. KK, if I'm missing on something, please.
Yeah, I mean, that sums up the situation very well. Since you wanted a little more color, Kunal, I beg to differ when you said that You started off saying EU usually doesn't disqualify facilities because there is enough press out there in terms of larger companies who are also facing similar issues. Be that as it may, in our situation, we are not looking at any CapEx. I'll be very clear about that. We are not looking at shutting down any line. We don't have the liberty of shutting down any line. All lines are operating in full swing, right? The only situation that we are dealing with right now is the ability to ship product to the EU.
Okay.
Our customers in the existing markets are still being serviced from those very lines, there is no question of any shutdowns being taken. The plant is in operation as usual. Alongside, we are investing time and effort in some cases where, for example, you know, this is not a classified area, but they want it to be a classified area. That is one example of an observation.
Correct.
80% of the observations are on, you know, operator behavior. You know, simple things like they're standing too close to each other. They're not behaving in a sterile area in the way they are supposed to behave, so that has to be addressed through training. In the couple of cases where we do have to install some hardware, you know, we are talking of stuff like pass boxes, to be honest, for RM dispensing.
Okay.
That is the level at which things are. It is not something that is any cause for concern, neither for us nor for you.
Sure. Lastly, the way I understand, for our EBITDA margin guidance for FY 2027 is more or less would be in the similar lines to FY 2026. Is it the correct way to understand? H1 being lower than H2, right?
Yes, Kunal, 37% DBF and 36% consolidated.
Okay.
We are aiming for the same margins in 2027.
Yeah, even if, even if there is no equity attached to that, still we maintain 36%-37% margin.
Okay, perfect. Thank you, and all the best.
Thank you. The next question comes from the line of Bharat Shah.
Yeah.
Bharat?
Yeah, hi. This is Bharat Shah from BCS Capital Ideas Limited. My first question is about overall capital efficiency and the capital intensity of the business. This is not for this quarter or this year, but when I see it over the period of time, let us say if I think about last four years, our turnover, which was four years back little less than INR 1,700 crore, about INR 1,685 crore, has now touched about little over INR 3,100 crore. The capital employed in terms of the net worth and only debt I'm including. I'm not including any other form of liability. Net worth and the debt, which was INR 3,100 crore then.
In the current year, I don't have the final figures of the net worth and all that, but on ballpark basis, the total of net worth and debt would be INR 5,600 crores. Throughout this period, almost the capital behind capital deployed of net worth and debt is little less than 2 x the turnover. My question is about capital efficiency. While your margins are healthy at 36%-37%, but those kind of margins cannot forever be assumed at least, even if it is maintained. If I net of depreciation if I see depreciation and amortization about 28% odd margins. That means if the capital takes 2 x the turn, I mean, 2 x the capital of the turnover, then I'm forever stuck in 14%-15% return on capital employed bracket. Is that a realistic way to describe the business or, this is current situation, but, hopefully it will improve?
It is current situation. Our return on capital employed for the year was at 15%. Adjusted return on capital, which is excluding the impact of M&A-related amortization, is 20%. That is where the FY 2026 numbers stand. As we have called out number of times, this is a transient phenomenon because in financial year 2025, we took the impact of the highest ever amortization. Our asset base increased by 6 x, as you currently pointed out, in a very short span of time. The gains from this expansion have started coming in from FY 2026 onwards. The EPS acceleration is the first thing that you see come through, where for a 10% growth in EBITDA, you saw a 35% growth in EPS, which will be sustained.
In the next three years, so over an FY 2026- FY 2028 period, we expect the return on capital employed to go from 15% to somewhere in the 23%-25% range, which is what, you know, we have called out and which is what we expect to happen.
Are you also talking about capital expenditure?
The capital base.
Bharat , also there is something which, you know, which we have been doing since the last three, four years. We decided to move up into a little bit of a complex manufacturing, little bit tech-based manufacturing. These things generally have a, you know, have a time, gestation time of between three to four years. If you look at our investment thesis, and I'm not talking about acquisition and amortization, I'm talking about the capital which we are employing in hard assets. If you look at how we have been thinking through it, that we have been putting money in a very, you know, in a very strategic manner from our side. That is to develop a large biotech play. For that biotech play itself, we would have invested around INR 160 crore-INR 180 crore on our DS. Another Bhopal.
Around INR 250. INR 250 crores.
INR 250 crores in Bhopal, which is a fill and finish site, which has a very large capacity once it is approved and done. Now, nothing has started coming out from both of these. Bharat , we feel that once our Bhopal is ready, it will be one of its kind from a scale perspective, and that will give us a very good kick-up in margins and will open up a lot of new markets for us, including new products. We also have made a mAb facility there, which we think is the future. We have been delayed by almost a year or a year and a half by putting this together. Our expenditure has been very strategic in nature. The second, big expenditure which we have put is in another plant for Swiss Parenterals, which should be completed by this.
Looking at commissioning in April.
Commissioning in April, which will be 2x of what current capacities are. What happens, the parenteral capacities increases 2x, and the biotech capacities is like 80 million cart and, you know, similar vials and then lyophilize and the other thing. Once this is commissioned Bharat , we also see a lot of traction when it comes to insulin, not only for India, but also, you know, shipping them outside once the regulatory things are in place. That has been the direction of our, you know, capital allocation.
Right. No, I appreciate that. I definitely believe that the direction which we take and what we choose to buy into is quite strategic. That reflects in the kind of strong margins that you always earn. Ultimately, margin is only one part of the capital efficiency. Ultimately, how much capital is turned over also has a very deep impact on the capital efficiency. In your case, while hard assets behind biotech and all that may be INR 170 crore-INR 180 crore, acquisition of the brand or the intangibles is the real large asset play that you have got into, because- that's where the amortization comes by. While Krishnakumar mentioned that, without amortization, return on capital employed is higher.
But I would respectfully submit that we can't do that because the amortization stems from intangible assets that we have acquired, and the benefit of that is reflected in the turnover then profits. Therefore, amortization is very much like any other hard asset that is there. KK, just to be clear, that 15% ROC after charging amortization is what you expect to climb to 23%-25% in three years, right?
Yes. That is what I meant. I take your point that, you know, adjusted ROC is one thing. The accounting ROC is 15%, as is the return on equity. This is a number that we expect to get from 23%-25% once everything starts firing the way we expect it to.
The point about accelerated EPS is well taken. Accelerated EPS is a function of operating leverage and financial leverage. I'm not really going into that. The core capital efficiency is critical to drive long-term sustainable capability to invest and grow the business. It was from that perspective I was saying, KK.
You have the point. Very well taken.
Sure. Thank you. Last question.
I'm sorry. Very sorry, yes.
Just one last question, a quick one. What will be the ETR, KK, in the current year, in 2026, 2027?
Sir, it is 21% for this year.
Effective tax rate.
Yes.
Okay. 21%. For the 2026, 2027 year, right?
FY 2026, it is 21% .
For FY 2026, the effective book tax rate was 22%. It's also part of the presentation.
Yeah.
We expect this to be 21% zone for FY 2027.
Okay, perfect. Perfect. Thank you so much, and all the very best.
Thank you.
Thank you. Bye-bye.
Thanks.
Thank you. The last question comes from Mr. Mohammed Patel.
Yeah. Hi, I hope I'm audible.
Yes, sir, you are.
Yeah. This is Mohammed Patel from Edelweiss Financial Services . I have a few questions on International business.
Mr. Mohammed, you're not audible.
International business.
Mohammed, we can't hear you very clearly. I will request you to take this offline with me.
Am I audible now?
Yeah, yeah, you're audible. Yes.
I'm asking what is the geographical mix for the International business for FY 2026?
Sorry, what?
Geographical mix.
Geographical mix.
Our geographic mix has been quite stable in the last two years. We typically get about 30% from Africa, about 30% from Asia, about 25% from LATAM, and the rest of it is all dispersed. This year we expect the LATAM component to grow faster because there are a lot more new product approvals. Broadly, these three will continue to be our key geographies.
Okay. You talked about supply chain disruption in Q4 for the international business. Is it going to impact H1 also?
We don't, you know, expect it to be of a similar magnitude. I think we are all following the same press. You know, unless we have any difference of information, Q4 was way worse than what it is looking like today. We are hoping that we'll be able to recoup at least some of that in Q1.
April was okay?
It's better than, you know, it's way better than what was in March.
Okay. On the EU CDMO, should we expect some revenues in FY 2027 or, we should expect, major revenues in FY 2028 in base case?
Mohammed, in base case, I mean, your guess is as good as mine. I am not counting any revenue there, which is why we've given a guidance of 18%-20% growth. Anything that comes from EU CDMO, let's take it as an upside.
Okay. One last question on the DBF business. If I go therapy- by- therapy, do we expect to outperform majority of our therapy- by- therapy in FY 2027?
Today, I mean, Amit already spoke in detail about the, you know, four major therapies, which is insulins, cardiovascular, derma, and OAD. Insulins and derma are already outperforming, and that's expected to continue. CVD, we have caught up on a quarter-on-quarter basis, so by quarter four we are almost on par with the covered market. And with, you know, some good product launches like esaxerenone. We expect that should fire well. That leaves the OAD piece where we'll need a little more, you know, bit of time to catch up.
Thank you.
Thank you. Due to time constraints, that will be the last question for the day. I would now like to hand over the conference to Mr. V. Krishnakumar for the closing comments. Over to you, Sir.
Nothing from our side. Thank you for, you know, being here. If there's anything left out because, you know, they were, you know, running out of time, Kruti and KK will take it offline. Thank you so much.
Thank you very much, Sir. Thank you members of the management. Ladies and gentlemen, on behalf of Eris Lifesciences Limited, that concludes this conference. Thank you for joining us. You may now exit the meeting.