Ladies and gentlemen, good day and welcome to NATCO Pharma Limited's Q1 FY26 Post-Result Call hosted by BNK Securities India Private Ltd. As a reminder, all participants will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, zero on your touch-tone phone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Hrishi Kesh from BNK Securities. Hand it over to you, sir.
Thank you. Good morning, everyone. On behalf of B&K Securities, I welcome you all to the Q1 FY 2026 call of NATCO Pharma. Hope everyone is in good health and doing well. On behalf of NATCO, today we have with us Mr. Rajeev Nannapaneni, Vice Chairman and CEO, and Mr. Rajesh Chebiyam, Executive Vice President, Crop Health Sciences. I now hand over the call to Rajesh for the management opening remarks, post which we will open the session for Q&A. Over to you, sir.
Thank you, Hrishikesh. Good morning and welcome, everyone, to NATCO Pharma's conference call discussing the earnings results for the first quarter of FY 2026, which ended June 30, 2025. During this call, we may be making some forward-looking statements. Our statements about future demand and anything said on this call which reflects our outlook for the future must be reviewed in conjunction with the risks that the company faces. The material of the call, except for participant questions, is the property of NATCO and cannot be recorded or broadcast without NATCO 's express written permission. We'll begin with the call results highlights followed by an interactive Q&A session. Again, hope all of you have received the financials and the press release that were sent out earlier. These are also available on our website.
NATCO recorded a consolidated total revenue of INR 1,390.6 crores for the quarter that ended June 30, 2025. That is against INR 1,410.7 crores recorded in the same period last year. The EBITDA for the quarter was INR 632.7 crores, with margins at 45.5%. Net profit for the period on a consolidated basis was INR 480.3 crores. During the quarter, the business faced pricing pressure in the U.S. product portfolio and incurred increased R&D expenses on account of high-value products. This is also reflected in other expenses being higher for the quarter. The Board of Directors have declared an interim dividend of INR 2 per equity share during the quarter.
On a segmental pitch for the quarter, as it's reached outline, which is also shared, the API business was INR 52.6 crores, domestic formulation INR 107 crores, formulation exports, including profit share and subsidiaries, was INR 1,126.5 crores, crop health sciences INR 34.7 crores, other operating and non-operating was INR 69.8 crores, totaling INR 1,390.6 crores for the quarter. Thank you all. We'll take questions now. You can take the question when you're ready.
Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. If you wish to remove yourself from the question room, you may press star and two. Participants are requested to use handsets while asking a question. In order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The first question is from the line of Nirali Shah from Ashika Stock Services. Please proceed.
Hi. Thank you for the opportunity. I have a question on revenue. I just wanted to know if the revenue continuation this quarter is broadly in line with the last quarter, or is it higher? Should we expect a higher continuation in 2Q?
It's going to flick, but I think it's been consistent. We expect it to continue into the September quarter. I think post-S eptember quarter, I don't think we see much. It'll be a decline is what our expectation is.
Would it be fair to assume that almost the entire large part of our quota would be exhausted in the first half only?
Yeah, I think most of the unincluded caps are in the first half. Yes, that's correct. The first half, meaning end of September quarter. Yes.
Understood. My next question is on NRC -2694. How many patients have been enrolled so far, and by when do we expect last patient enrollment?
I think Phase 2 is ongoing. I can't recollect how many patients are. I think more like 13, 14 patients have enrolled so far. A lot of the patients mostly have been done in the U.S. We're also starting in India now. When do we expect? I think we need to do about 60 - 70 to reach some sort of definite conclusion on where we stand on that particular indicator. This is in the stage at the neck cancer after failure of all the existing therapies. It's ongoing. I don't want to give a timeline now, but at least, yeah, it'll take some time. Maybe we'll have more clarity as the year goes by.
Maybe mid of FY 2027, we can expect some new data readout?
I think so. I think that sounds about reasonable. I think because it's a late stage drug, if they're able to demonstrate some efficacy, it would be interesting. We'll see how things go. We'll keep you informed as next call. Thank you so much.
Thank you. The next question is from the line of Rashmi from Dolat Capital . Please proceed.
Thanks for the opportunity. Sir, Rajeev says that revenue made the contribution was consistent this quarter. Have you seen a bigger erosion compared to quarter four or the previous quarter? Is that impacting our overall EBITDA margins? Also, related to that, I want to know that in the press release when you said that the business is seeing a pricing pressure in the U.S., apart from revenue made also, are you seeing any other pricing pressure in other products?
I think we're seeing pricing pressure on Revlimid, of course. I think that's the reason why there's been a bit. Are we seeing pressure in other products? They've been stable. We also had, fortunately, other launches that have happened that have also contributed to our profit. Overall, you know, the other business has been stable. I don't think it's, I mean, going, you know, extraordinary, you know, there's an increase in the sale, but that business has been stable. Yes, Revlimid has been a decline.
Okay. On my second question, it is related to the crop health sciences. This time we have seen a good pickup. You know, how is the demand picking up? Are we on track to achieve that INR 140 Crore, INR 150 crores of sales for this year?
I think so. I think we had a good start. I think we've got good receivables. I think things are settling down. We think that this sale will continue. We're losing still money. I think we're still losing this quarter. I think we lost about INR 3 crores, INR 4 crores INR 3.2 crore . I think we're coming very close to breakeven. I think we're almost there. I think we're doing well.
Okay. Thank you, sir. That's it from my side.
Thank you. The next question is from the line of Vivek from Inga Ventures. Please proceed.
Hi, sir. Thanks for the opportunity. My question is regarding, does he have any breakups of generic and non-generic revenue?
Hello. We don't do the subsidy breakup. We don't do breakup like the way you all asked. We do the way we have presented in the earnings. We do it like that.
Do you have any idea like most of the revenue?
Yeah.
There's an earnings.
I have a high level I can tell you. All these businesses which are sold outside India are all generic businesses. The India business is mostly the brand business. Otherwise, outside, it's mostly a generic business.
Okay. Sir, my question. Yeah, sir. My second question is, there is an investment in Eyestem and Series B funding. Why did we not invest in this round?
You said Eyestem , you're saying?
Yeah, yeah, Eyestem .
Which company you're saying was which is Eyestem you're saying?
Yeah, yeah, yeah, Eyestem .
What's the question again? It's not clear. What about Eyestem ?
There is a series B funding in the Eyestem.
I got the question.
Yeah.
We are investing, my friend. We are investing as per our proportion of our shareholding. I think the proportion of shareholding, I can't remember the number, but it's like 2% of the company. I think we are keeping our in this round. Also, we are, I think, investing equal to keep our shareholding. We're not gone up on it. We are just, we are keeping the shareholding that we have.
Okay. Okay. Understood. Thank you, sir.
I don't remember the number, so don't hold me to it, but I think it's like a INR 2 crore, INR 3 crore round. I think it's not a large number. I think we are investing.
Thank you. The next question is from the line of Mehul Panjani from Purnartha . Please proceed.
Hello, sir. Thank you so much for the opportunity. Sir, what would be the impact on NATCO Pharma if there was a pharma tariff being implemented in the U.S., worst-case scenario?
There will be some impact, of course. The full extent will not be in any impact. I'll give you a general answer. I don't want to get into the U.S. obviously represents a significant part of our portfolio. I speak for the industry. There will be, and depending on the level of tariff, I think there will be a disruption initially. Hopefully, we'll be able to pass on some of this to our customers. We'll see how things go. Yes, we are dealing with it when we have to. So far, we are okay, but we don't know what the future holds. We just have to brace for it.
Right. Sir, my second question is, what is the reason for the decline in head profit vis-à-vis the 2024 June quarter?
I think I already answered that question. I think we've seen an erosion in our portfolio and the primary argument business. I think primarily driven by Revlimid. I think Revlimid has seen some price decrease and has impacted our profitability.
Okay. Sir, when would you see a recovery in this one?
Revlimid , you know, over a period of time, will decline. I think the market knows this. I think Revlimid will see further decline as the year progresses.
Thank you. The next question is on the line of Rahul Choudhary an Inventor. Please proceed.
Good morning, sir. Can you hear me clearly?
Yes, Rahul. Go ahead, Rahul. Yes.
These other operating expenses, other expenses have increased disproportionately this year. We had a policy of doing something like 8% of the top line. You have said high-value R&D expenditures happening for the last, I think, 24 months. Sir, can we not get any color on where we are researching, what we are doing, where would we see the impact? Investors, shareholders need to know what is there next year, next to next year, sir, beyond the semaglutide time, because revenue is history now. We have made a lot of money. Yeah. That is my first question, sir. Where are we?
Basically, what we're doing is, okay, yeah, good question, Rahul. I think I'll try to answer this the best I can. What we're doing is, see, let us understand our generic business. There are two kinds of products you should do. You should do a product which will not have so much R&D expense, but again, you know, the upside is limited. Or you do these R&D projects which are $8 million, $10 million per core expenditure, but if they're free of the returns are also very high. What we have done, Rahul, is very deliberately spend. We had a reasonable amount of surplus, as you pointed out. We use the cash flow to spend on some of these products. I think what we have done is we have budgeted some projects that we wanted to spend. The primary reason, the primary products that we're spending on are cancer products.
There's a clinical trial on patients, which are very expensive to do. We're doing a lot of peptides and oligonucleotide type of products. This is where we see the future of this business. We're using the opportunity of our, you know, cash flow to, you know, invest in these ideas. If you want me to name the products, strategically, we don't name them because until you achieve an outcome where you have a successful pilot, you typically name them. I think they're going well. I think we will name them based on our success. Yeah?
Sir, the format for this is.
On this, maybe five.
Yeah, tell me.
Yeah, sure. Go ahead.
You are not getting deterred by all these tariffs. You are still targeting Para IV filings only. I mean, that is a strategy we are sticking to. Apart from the cancer trial that we all know of, NRC -2694, right?
We're talking about NRC -2694 and also generic, what do you call, cancer products where you need to do trials on patients. These products are cancer products. Without naming them, you had to spend like $7 million, $8 million. The U.S., I don't want to get deterred. I mean, you know, it is what it is. You just have to go with the flow. We have to just see what the policy is going to be, and based on that, you readjust your strategy. U.S. is still the most important pharmaceutical market in the world. Especially for these types of products, it's 60%, 70% of the business. You can't ignore 60%, 70% of the business and run your business. I think it is what it is. Regarding ignoring building a business outside the U.S., I think we have made a very bold step. We have bought the second largest company.
We've taken a substantial stake in the second largest company in South Africa. We spent INR 2,000 crores to diversify earnings. We believe over a period of time this will represent a significant part of our base earnings in the coming years. I would believe in South Africa will easily be about 15% - 25% of the base earnings. We are diversifying away from the U.S. as well. I'm not that it's not. You can't ignore U.S. at the same time. You have to split both the targets.
My second question is, what is the intent behind increasing authorized capital? What is the plan? Are you looking for investment or are you giving bonus shares?
No, Rahul. I think I'll tell you what my thinking is. As of now, it's just an enabling resolution. We just want to have the option. I'm targeting another transaction, something like similar to what we did with Adcock. If the number becomes larger, we just want the flexibility to have equity. At this time, I don't need any money because we have enough money in the books. If we're doing another large transaction which can strengthen our base business and we need some flexibility in equity, I just want that option. We're just taking an enabling resolution from the shareholders so that we have the sort of flexibility, you know, if need be, to consummate a larger transaction.
Okay. So the cash from hooks stock INR 3,500 crore is including that Adcock INR 3,000 crore investment, right, sir?
That was in the presentation of how many money in that was? INR 3,500 crores? No, no, no, no, no, no. INR 3,500 crores is the cash that we have right now. INR 2,000 crores will leave the moment we do this transaction. The cash will drop to INR 1,500 crores for those transactions. There will be some accrual of this year's profit, whatever that number is going to be, minus dividend, minus CapEx. If you were to say that today, if you were to, let's say, Adcock didn't happen today, that will dip to INR 1,500 crores + the accrual that we're going to have this year.
Okay. That's the portfolio plan, sir. When are we going to get it back? I said since?
It's fine. I'll answer your question. This is your last question. I'll go to the next.
Yes.
We had two inspections. We had the Mekaguda API facility and the Kotour facility. The Mechaguda facility got clear and we got the EIR. The Kothur facility also had an inspection. We had multiple observations there. I believe it's, you know, we have answered all the queries. I'm hopeful that we will get a positive resolution. We have answered them. They give us 90 days to reply. We've answered in July, I think, perfectly. I think 90 days usually you get a reply. We've given and addressed our concerns. I'm hopeful that, you know, we get something positive. Again, subject to, you know, how things go. We are cautiously optimistic that I think we should, I think we'll be able to resolve it.
Thank you, sir.
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Hrishit Jhaveri from Pi Square . Please proceed.
Hi, sir. Congratulations for the famous quarter. First question, the acquisition of the Tallapaka company. What is the outlook for that company going on? How well do we plan? Do we plan to increase our stake or this will be the only investment there?
I didn't hear you well, but if I understand your question, what is our strategy with Adcock and how do we increase our sales? Is that the question I heard?
Correct.
Okay, fine. Yeah. Let me address that question. I think we've been looking to diversify our portfolio. I think South Africa is a very interesting market, and it's one of the most exciting markets in the African continent, the most stable country of the lot. We got an opportunity to buy a large stake in a very established setup. Even though it's a substantial minority, it's not a controlled thing. I felt that it was worth it. We need to consolidate the earnings on a closed-stake basis. Second, we don't have much business in South Africa. We can put all our pipeline that we have in India in South Africa and get a marketing setup and a distribution setup, which would have taken years for us to build. We also got it at a very reasonable valuation, as you are seeing.
If you take some time on this, the payoff of the investment will take some time. In the near term, I think shareholders will benefit from the day-to-day business that we're getting. In the long run, I think we will get our pipeline in, and we'll also work with them to improve efficiencies and bring our pipeline not only from NATCO, but from our other Indian companies that we have relationships with so that we can strengthen our portfolio there. Yeah.
Okay. Understood, sir. Thank you, Mohammed.
Sure. Thanks. Next caller, please.
Thank you. The next question is from the line of Bino from Elara Capital . Please proceed.
Hi. Good morning. Just to follow up on the other expenses, this quarter, all put together, was around INR 525 crore. Is this roughly the run rate, a quarterly run rate that we should see going forward?
No, it'll be largely the quarterly run rate. It'll reduce because a lot of the expenses are a lot of one-time batch expenses. Let's say you're doing a clinical trial or you're doing an incubated batch for an expensive product. There's been a lot of expense. You'll see a lot of expensing in this quarter and next quarter, but things will reduce, I think, starting from the December quarter.
Understood. Thank you very much.
Thanks.
Thank you. The next question is on the line of Gagan from ASK Investment Managers. Please proceed.
Yes, good morning. The first question pertains to your coming from the increase in authorized capital. You said you're looking for another significant transaction. Can you give us some idea of, to whatever degree you're comfortable sharing, whether it's a manufacturing related transaction, or a fractal, or a further increase in Adcock stake?
Good question. We are trying for something that is stable and which strengthens our base business and gives us more sense in the market that we're operating in. Obviously, all these are bound by confidentiality, and these are not done right. We have not reached a stage where I can talk about it. We will do something that strengthens the base business and gives us strength in a market, either that we're operating in or in a market that we're not present in. That gives us immediate accuracy of earnings. I think that's what we're looking at. I think that's the nature of the transaction, right? That's the best I can answer it.
Okay. All right. I have one more.
Please go ahead.
Yes. On the Adcock, you also indicated that, you know, it could be 15%- 25% of the base earnings. When you say base earnings, you're referring to the cumulative part of Adcock closing at $5.25. If you could give us some idea of, you know, because Adcock had.
I'm talking about, no, my friend, it is a PAT for 2027. I'm not because it's a three-year take to close. I'm assuming a scenario where Revlimid is gone. I'm assuming only, you know, we have all our earnings are without Revlimid. I'm assuming that, you know, for the next financial, not this financial.
Right. Adcock is right towards the rather stable part of the year. If you look at the, I mean, it's not all by the stats. It's just to put out what I'm presenting right now. Do you foresee a change in their growth trajectory post you coming in and to what degree?
I think we are hoping we'll bring some value. I think certainly, I hope that we can improve those earnings. We are hoping that we could bring some of our pipeline from India and use our relationships that we have with other companies and strengthen the pipeline. I think that's the journey that we want to go through. I think we strongly believe that we can add a lot of value to the asset. It's a great asset. If it wasn't for the transaction, we wouldn't have had access to this sort of asset. We're hoping, yes. I think that's the expectation. Yes, we are serious.
Okay, thanks. I'll get that to pass.
Okay. Thank you. Next caller.
Thank you. The next question is from the line of Abdulkader from ICICI Securities . Please proceed.
Yeah. Hi, sir. Thank you for the opportunity. In terms of India business, I know also where are we in terms of launching semaglutide in India? From the next two years' perspective, how should we look at this portfolio?
The semaglutide growth side, I think we're on track. We hope to be there when the mass formulation happens next year. I think that's our expectation, subject to, you know, regulatory challenges. This is one of our, you know, but you know, we have our own products. I think all our dosing is completed. First phase dosing is complete. I think by November, December, we're expecting and hopefully to be on track in phase one. In the phase one launch with all other earnings next year, I am hopeful that the product will do well.
Got it. Sir, I heard your opening remarks on your Iberic Inventor. From a product standpoint, I think in the past you've talked about a couple of more launches to strengthen this business. Sir, is FY 2026 the year where we see those launches, or 2027, 2028 where you expect some meaningful traction getting built up here?
We have launched a couple of unique products. I think there's one product called GLANZ , which is, I think, the only fungicide product other than the innovator that is there. What's the finance name for?
Yeah, up to four. Actually, just recently launched with five products, you know, and a couple of herbicides. There's a fungicide and insecticides as well. These are all limited competition. The idea here is you have your products, but also introduce, like Rajesh was just mentioning, a product fungicide called GLANZ , which was launched earlier, in late last year. That's going really well because I think part of the reason why I have lost the drop is because the gross margin has been higher on the newer launches. I think we're on track to reach the breakeven level by expectation, and there's signs of that in the numbers as in this.
Got it. Thank you.
Next question.
Thank you.
Thank you. The next question is from the line of Saumil Shah from Paras Investments . Please proceed.
Yeah. Hi, Rajesh Shah. Good morning. I wanted to know more on your acquisition of Adcock. I mean, by when this transaction will be completed and how much it will add to our bottom line? I think we are doing a yearly run rate of around INR 5,000 crore, and we hold about 35% in that.
Yes. We expect the transaction to be done in the next 2 to 3 months, depending on the types of registry clearances and all the other requirements. Regarding the consolidation, I think they're doing somewhere about $530 million a year. That reflects the number incentive based on the expenses. They have a pack of around $57 million or $48 million, I think. We'll be able to consolidate 35% of that number, so $15 million, $15 million, I think, depending on what they say.
Okay. The total value is around $48 million. We consolidate 35% of the PAT, Michael.
Sorry, say that again.
Yeah, I just wanted the yearly value is around $48 million usually.
Just one second. I'll let them pull up the numbers. Maybe more precise. Turnover last year was $536 million. That PAT, I can't remember exactly, but I think it's around $46 million or $47 million, depending on the exchange rate that we're taking. To your question, how much of the PAT we can consolidate, we can consolidate 55% of the PAT.
Okay.
I think by $0.003, around 5%. Let's say for your mathematical simplicity, next year profit, let's say, is $50 million for mathematical simplicity. 35.75% of that is what we can consolidate.
Understood.
It would be like, you know, $7 million. Yeah?
Okay. I had a concern, sir, on your page seven of your presentation.
Page seven?
Yeah. Yeah. On page seven of your presentation, I think you mentioned financial year June 2024, Adcock has done a PAT of ZAR 814 million. That is INR 45 million across. Again, after that, you mentioned on December 2024, they have done a PAT of ZAR 6,777 million. This December 2024 year-end, they have done ZAR 6,777 million. Is this $38 million ?
Yes. EBITDA,
net profit is $22 million .
That is yearly profit $22 million.
What I can read from my presentation.
Yeah, yeah, yeah.
[Foreign Language] Half year. H1.
Okay. That is only half year. Okay. So half a year, it's June too.
They have not announced their June numbers yet. No, they have not announced their numbers yet.
Okay. Okay. This will be in the year-end.
Every six months. Their financial ends in June. The June numbers are not announced yet.
They're not announced.
Understood. Understood. Okay, sir. Thank you. That's it from my side.
Thank you. The next question is from the line of Rashmi from Dolat Capita l. Please proceed.
Thank you for the follow-up. Just one question. This quarter, the depreciation was pretty high. Does it have any impairment charges or anything?
It does. I think we had an INR 20 crore impairment charge of an equipment that we had. Yeah, but it's a block and efficiently that we're not using. I think, yes, normally it's around INR 43 crore, INR 44 crore. It was INR 50-something this time. I think the staff has come from around INR 12 crore, INR 13 crore and become.
I see. That's helpful. Thank you, sir. Thank you. Participants who wish to ask a question, may you please press star and one at this time. The next question is on the line of Satya. Please proceed.
Hello. As you know, in the U.S., I think the revenue development is not there. What kind of revenue can we expect on a yearly basis?
In the U.S. financial 2026/2027?
Yeah, next year.
We're not giving guidance for next year. I do not give guidance right now. I think I need a little more time. Maybe I think end of the year, I think I'll give you some guidance. As of now, no, I don't want to give a guidance. It's too early for me to give a guidance. I think there are a lot of moving parts that we have in our business. I have clarity, maybe early next year, I think I'll give you more clear guidance because a lot of things are happening in our company, transactions, order. We'll have more clarity next year. I'll talk about it next year, not right this time. I don't want to talk.
Sure.
Okay?
Okay, thank you.
Okay, yeah, good.
Thank you.
Okay, thanks. Next.
The next question is from the line of Abdulkader from ICICI Securities . Please proceed.
Hi. Thank you for the follow-up. Just one question on your other expenses, which was slightly inflated because of R&D. The callout for the number, you know, which was in excess in this quarter. For your annual guidance, if you could provide how should we look at R&D for the rest of the year?
I think lots of major R&D expenses are in this quarter and next quarter. I think we have planned it and budgeted in a way that I think June and September quarters will have a bulk of the R&D expenditure based on the high-value products that we have. It will decline. I think you'll see a decline in December quarter and the March quarter. I think that's my expectation.
Understood. One final one is, what would be your cash balance at the end of this quarter?
As of today, right now, it's about INR 3,500 crore with the cash. This assumes that the Adcock transaction has not happened.
Got it. Thank you.
Thank you. The next question is from the line of Gagan Thareja from ASK Investment Managers. Please proceed.
Yeah. Thanks for taking the follow-up. I just wanted to understand, does your deal on Adcock give you provision to raise your stake further and use a current promoter? I do not know anything about the current promoter. Can you give some idea as a PE or as a promoter?
Okay. We have an option to increase our stake if they have a first set of refusal. If they want to sell, they should ask us before; we can have the right to increase. The deal right now is only 35.75%. I don't think at this time they're interested in selling. However, if they change their mind, we have the right to ask for that stake. It's such an attractive company. We said, "No, we'll do this deal even though it's a substantial minority." Your second question was what? Who's the promoter? It's a very well-known South African conglomerate. They have multiple businesses. It's called Bidvest. I think they have lots of local, it's a very large South African conglomerate. I think they have multiple businesses. You can look them up online. They're well-known. You can take a look.
Just one final question. When you say that Adcock can be 15%- 25% of, let's say, FY 2027 profits, if you extrapolate the break on $20 million, which could be the profit for you, that's around INR 150 crore -INR 170 crore. Are you saying that that cost of FY 2027 profits could be 5x - 6x of that number? By increments, that would seem to be the conclusion.
I would believe so. That's why I do not want to answer that question directly. Give me some time on this because I need some more time on it. I just need more clarity on my business. I would like to give a guidance generally, I give a guidance when the year before the year starts. I would request you to hold on till then. I'll give you more definite guidance. I think it's closer to the end of the financial year.
Yeah, right. Thanks for that. I'll get back in with you. Thank you.
Thank you. The next question is from the line of Nirali Shah from Ashika Stock Services . Please proceed.
Thank you for the follow-up. I just wanted to know that since you are saying that revenue will see a driving factor as the year progresses, do we see any scope that in volume terms we'll be able to capture a much bigger share of the market?
I don't have an answer to that question, Ash. I don't want to answer that question because I don't know what our future holds. That's why I said I'm holding off on giving guidance because everybody's pressing me to answer the 27 March numbers. That's why I'm avoiding it because I don't know. There are so many moving parts and a lot is happening in our portfolio. You know we have the semaglutide launch, we have other launches in the ROW business, and we need clarity on how things are. I would request, I will not at this time, I would just debate. You know we'll see how things are. I think maybe by the end of the year, I think we'll have clarity.
Understood. Yes, thank you. The next question is from the line of Mehul Panjuani from Purnartha . Please proceed.
Sir, thank you so much for the clarification on this revenue. One question, sir. How much of your portfolio is contributed by agrochemical right now?
Which portfolio? That's the portfolio you're saying?
Yeah, herbicides and pesticides for the insurance.
Right now, this quarter, as of now, I think it's there in the segment numbers. I think it's INR 34.7 crore out of the revenue is Agrochemical.
Okay. What about, sir, this regulatory approvals which are required for the South African, we'll be knowing in 2 months-3 months. Are they dependent on Indian as well as South African regulations or just the South African regulations?
I think India, I think we've caught it. I think we've got much. I think we have enough cash for onboarding much. I think we have the bank limits given all the guarantees that are required to get the transaction done. In South Africa also, we don't, I mean, we are a dealist company, so that's why there's a process for it. We're running the process, and we believe that we won't have so many, obviously, we need to go through the hoops, but we don't face too many challenges because we believe it's a majority South African owned. There's no majority foreign control, right? The existing controlling shareholder, his shareholding is not changing anything, so we're counting in a majority South African company. We don't foresee too many challenges for that particular reason. Anyway, I think until it's not done, it's not done, right? It's a very hard.
My last question is about, someone, a fellow participant, asked about Eyestem. I don't know what is Eyestem. Can you elaborate or throw some light on it?
Okay. Our presentation has it, but I'll just tell you what's going on in our NC and CellGene investments. We have multiple investments. I think our presentation reflects about five ideas that we have. Eyestem is one investment we have done. They are working on a particular disease called dry age-related macular degeneration. The gentleman asked us how much we have invested. We invested about $1 million. He asked me whether we are investing, we're raising a push. Are we investing in that? I said we are investing and we're keeping our shareholders. Our shareholding is like, I think I don't remember the number, but it's like a below 2%, 3% type of shareholding. That is Eyestem. In addition to that, I think some of the other investors asked us about NRC -2694, which is one of our other NC ideas.
I told them where we were on the technical side. Of the five investments, the biggest, I mean, one I think is eGenesis, which is $8 million that we invested from an Asian entity, which does transplant of genetically modified pigs into humans. They have some very interesting data, and there's one particular patient who has done extremely well and is still doing well. That is probably the most exciting among our NC Cell and Gene investments.
Thank you so much. I really appreciate your elaborate answers. Thank you so much.
Thank you.
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Rahul Chaudhary, an investor. Please proceed.
Regarding semaglutide, you had said earlier that Stelis is doing the API, and you were using a pill for this also. That is the same thing, and that is for domestics. Are we going to have a domestic launch release? There are some articles that are saying that.
Wait, wait, wait. Rahul, wait. You've made a wrong assessment. Just a second. Stellis is called OneCourse now. Second.
OneCourse.
They don't make the API. They make the, they did, and they make the, what do you call it, the fill and finish. The API is from outside, not from OneCourse. Okay?
Sure.
What I was going to ask you is that post, you know, when we get our approval, people from media outlets are saying that it's going to drag to INR 3,000 a month kind of a thing. Will we not lose competitive edge if we keep, if we outsource everything, or do we have the margins to play in that kind of a pricing also?
Rahul, honestly, there's so many moving parts in semaglutide. We could have a one-hour call discussing that. There are a lot of things that are there. Let's get some regulatory clarity and get our approval, and then I can, there are a lot of moving parts in it. This call won't be enough to explain to you all the moving parts.
My answer to you right now is there are a lot of moving parts, and I think I have enough clarity on how to deal with the products and how to, you know, add some ideas and strategies, and hopefully, they'll work out. The second issue on the pricing and all, I think it's too premature to talk about it. It'll be too premature to talk much about that.
Are we getting a, there's this drug called pomalidomide, something pomalidomide. Do we have a, like a filing there also?
You went to U.S. legal. You went to legal. Yes.
We haven't sold that product yet, right? We are still waiting.
We have a full approval. I think once the launch will happen, we will talk about it. At this time, we don't have clarity on the launch date. Once it happens, we'll talk about it.
In the sense, we have confidentiality on the launch date.
Okay. We don't have an agreement with the innovator, like how we did in.
We have.
We already have a settlement. We have it.
Rahul, this is there in our investor presentation.
We already have settled. To answer your question, Rahul, we have a settlement. We have an approval.
Yes, sir.
The launch date is confidential, but we'll disclose closer to the time. Yeah?
Yes, sir. Thanks.
Okay, thanks, thanks.
Thank you.
Next call.
We take the next question from the line of Chetan Doshi from TM Financials. Please proceed.
Thank you for giving me the opportunity. I have two questions. One is, the total expense is almost 50% of our turnover. Apparently, expense, you said in the earlier conversation that it's going to reduce. Instead of asking the target for this year, can you just give us a brief idea as to what will be the total expense for the current year? The second question is regarding the South Africa acquisition. Can we supply in our brand? The question is related to if the U.S. puts tariff on India and the South Africa channel is effective, then can we pass on the drugs to the South Africa unit and they can export to the U.S.?
It doesn't work like that, my friend. I can't, I don't know how to answer your question. Every country has its own regulatory approval, and that's how it works. Regarding the question that you asked, generally, the way its product is produced, from there only you need to export. There are rules on country of origin and all. I don't know whether the.
That doesn't work. Okay. What about the expenses?
From what I can see, it doesn't work. I don't think so. It doesn't.
Okay. Okay. Regarding the current year expenses, how much you plan to spend in the current financial year? Can you just give us a brief idea?
I don't have it on top of my head, my friend. What I can only tell you is that it is on the higher side these two quarters because we have a lot of high-value products, and it will decline in this quarter. Precise numbers and all, I'm sorry. I don't have the numbers on, I don't have the.
One last question. Adcock is a higher price, underpriced, or it is fairly priced? How do you look at it from so many years of operation?
Good question. I would believe, I think, we have a very good return on capital. I think we have always got the big jackpot side. I just do what is beneficial to our company. Valuation is left to you guys. You value it the way you value it. I don't have a comment on that.
I think if you look at the.
The portfolio that we have and our path and our portfolio and our strategy, I think it is as, you know, efficient and as interesting and as exciting as any other domain industry today. I think that's all I can tell you.
Yeah, are you higher priced, yes or no?
I can't answer that question. I can't wait for you to judge, my friend. I can only tell you about the business strategy I know. We'll take it from there. Yeah.
Thank you.
Next call, please. Yeah.
Thank you. The next question is from the line of Vivek from Inga Ventures . Please proceed.
Hi. Thanks for the follow-up. Sir, my question regarding guidance for R&D. As you mentioned during the previous call, it will be INR 400 crore for FY2026. How can we see for the coming quarter or FY2026 overall?
It should be a little bit on the higher side. I think it will decline in the next quarter. That number is very hard for me to tell. I'm not prepared for it. I think there's too many moving parts. I can just give you more clarity, I think, next quarter. As of the time, I can't answer that question.
Sir, we are going to utilize INR 400 crore on R&D during the year?
I would believe so. Yes, I would believe so. Yes.
Sir, my second question is regarding this tariff. How much effect does this tariff have on our export formulation as a % of total portfolio? If there will be a drop, then approximately how much will it drop? Thank you.
I mean, it all depends if you're asking a very hypothetical question. If there was to be a tariff, I think we will have, in the near term, we'll have some impact, of course, because you'll have contracts and pricing and how much you're able to pass on immediately. I mean, there's always, you know, there will be some concern. I think in the long run, we would like to pass it on to our customers because the margins that we work on most of our products are very low. There'll be some, a little bit of disruption in recently, but I think everything will settle down, I think after a while.
Thanks.
Thank you. The next question is from the line of Saumil Shah from Paras Investments . Please proceed.
Hi. Thanks for allowing me a follow-up. In the previous call, I think you mentioned that we are estimating a 20% drop in revenue and a 20% drop in profits for this year. Do we still hold on to that or with the equation of the South African company, would we like to revise it?
I think for now, I feel like holding on to it. If there's any change, I'll let you know. As of now, I think, see, again, these are all estimates, my friend. I can only tell you what we think you asked me. I will ask this question and again this guidance. As of now, it seems all right. I think so. I give a few potential coins this period. I think that there'll be some impact. Around, I think, whereabouts, yes, I think that's pretty much.
Okay. Okay. Sir, since the revenue prices are dropping, how is the current quarter shaping up? Is it similar to the previous? I mean, how will we look at the second quarter? Will it be similar to the first quarter, or will it be further downward?
I don't. I mean, I'm hoping it would be similar. Again, I will only have clarity when the quarter ends. I think it's a lot of moving parts in this business. I think that's my expectation. Again, I subject myself to correction based on how things go out. You know, yeah, we'll see how it goes.
Okay. Is there a price easel then further compared to the first quarter?
I don't know, my friend. Can you give me some time on this? I think we'll have more clarity when we announce this Q2 number.
Okay, no problem, sir. Okay, thank you.
Thank you.
Thank you. The next question is from the line of Satyas from ICH. Please proceed.
How do you plan to ask any revenue on the case with Roche?
Can you repeat the question? I didn't understand. Please repeat the question.
Do you plan to ask any additional update on the case that is going on with the Roche ?
Okay. As you're aware, my friend, I think the single bench we won, then they have filed it in double bench in Delhi High Court. Everything works. We're ready to launch. We already have the product ready. We have everything ready. We have already stated our pricing, what do you call it, strategies. We're all waiting to get clarity and launch from the double bench of Delhi High Court. Once we have clarity, I think we'll let you know.
Can we do the plan then? Like, the third quarter, we can see some sales from them?
No, I think from what I was told, we're expecting verdict any moment. I think it'll happen next time. For the verdict, we've been ordered it. Orders, I think, already three months ago. I think any moment we will be in the next, could be next week or next month, depending on whenever the judge gets the order. Yeah.
Just one last question, right? If anything goes through, then as per you, are you expecting this? What kind of revenue are we targeting from this particular medicine?
It's all different. I think we have the first mover advantage, which would be nice. Yeah. We have to see who else also comes because there's a lot of moving parts. I think once the judgment comes, it's going to happen. I think we can give more clarity. I think then I'll have a better idea of it. As of now, I would like to say it's an interesting opportunity, but I would like to wait for clarity from the court before we actually start talking about it.
Okay. Can I compensate the...
Thank you.
Thank you.
Thank you.
The next question is from the line of...
Okay, go on to the next call, please.
The next question is from the line of Rahul an individual investors. Please proceed.
Hello. My question is on R&D. Hello.
Yes, it's good.
On the R&D, yeah, how many R&D products are you planning to file in the U.S. in the current financial year? Within this, how many would be in the test sites of the oligonucleotide series?
Typically, it depends on how things go, but typically, we file about seven to eight products. That's how I've done the execution. Usually, we target about one or two products in the oligonucleotide space.
Thank you for that. Do we have a plan to extend the pesticide genomic to Canada and to see this?
It depends on some licensing agreements. Some of them we have signed up with other partners. Sometimes we do extend it depending on the situation.
profit share from lenalidomide (Revlimid) and other key products?
This is my last question, please. Last caller, please. Thank you.
You can go ahead and continue. This will be the last question from the line of Prishal Burana investor. Please proceed.
Hello, sir. I want to know about the reflective diversification of BPS, about the BPS strategy for the market in India, and the products planned to be launched in India this financial year.
If I understood your question correctly, you're asking me what the business strategy for India is. Is that correct, my friend? Is that what you said? I don't know. I couldn't hear you. Yes. Okay. Fine. India and all, I think we have expectations. As the two products have been mentioned in the call, I think there's the plan subject to the court outcome, semaglutide subject to regulatory clearance and other issues that are there with this product. I think these are probably one of the more high-value launches. The portfolio is doing well. I think as you have seen the numbers, it's growing around 7% to 8% a year on the base portfolio. If the new launches come in, then obviously the growth will be much higher. I'm actually very optimistic that domestic should do very well. We'll see how things go. Yeah. Thank you. Thank you, sir.
Thank you so much.
Thank you, sir.
I appreciate the time that you guys spent talking to us. Thank you.
Thank you.
Thank you all.
On behalf of BNK Securities India Private Ltd., that concludes this conference. Thank you for joining us, and you may now disconnect your line.
Thank you.