Ladies and gentlemen, good day, and welcome to Strides Pharma Science Limited Q1 FY 2025 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an option 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 now hand the conference over to Mr. Abhishek. Thank you, and over to you, sir.
Very good afternoon, and thank you for joining us today for Strides earnings call for the first quarter ended financial year 25. Today, we have with us Arun, founder and Executive Chairman, Badree Managing Director, and Group CFO Vikesh Kumar to share the highlights of the business and financials of the quarter. I hope you have gone through our results release and the quarterly investor presentation that have been uploaded on our website as well as stock exchange website. The transcript for this call will be available in a week's time on the company's website. Please note that today's discussion will be forward-looking in nature and must be viewed in relation to the risk pertaining to our business. After the end of this call, in case you have any further questions, please feel free to reach out to the investor relation team.
I now hand over the call to Arun to make his opening comments.
Thank you, Abhishek, and good afternoon, everybody. Thank you for joining our earnings call of our Q1 FY 2025 results. Before I start, I would thank you for your support over these many quarters while we were resetting the business, and I'm delighted that the company has reported a very strong performance across its businesses. My colleagues, Badree and Vikesh, will have in their opening statements more granularity and commentary around these businesses. I'm sure that you will be happy to hear that we've done a lot of work where OpEx leverage has been our primary focus, and you will now see the company focusing on growth.
And consequently, we strongly believe our reset that we announced in FY 2023 is behind us with a much stronger balance sheet, generating significant amounts of free cash and progressively reducing our debt as guided. We are also pleased to have reported today a reaffirmation of our outlook. We have exceeded on each line item our expectation, our outlook, guidance. Consequently, we are now especially with our U.S. operations very pleased with the performance. Many of you will relate to Strides' U.S. story to be seasonal. We have worked very hard to change that by changing our mix between acute and chronic. And our Q1 FY 2025 in the U.S. has been a very significant quarter and a historical quarter for us.
Before I let my colleagues dwell more deeply, I want to take this opportunity to thank two of our retiring directors, Sridhar and Bharat, who have completed 10 years of service on our board. They've been phenomenal mentors for us and have played very significant roles, especially in our course correction in the last two to three years. I also take the opportunity for the shareholders who have overwhelmingly voted for our new two independent directors, both eminent personalities, and we're pleased to have Amit and Subir. Amit, we introduced in a call last.
Subir, until now, was the CEO of Exide, and we are delighted with his large operational experience to be on our board, and we are sure we'll benefit from the guidance and the insights these two gentlemen bring to the Strides board. I'm also pleased that a well-thought-out succession plan has been voted for, again, overwhelmingly. I'm very happy that my colleague for several years, almost 13, 15 years, Badree, who has played multiple roles in the company, takes over the CEO of the company, while I continue my executive role as the chairman.
I'm also pleased to welcome Aditya as an executive director on the board, but most importantly, also very pleased that our homegrown talent, Vikesh, who joined us in our finance department from straight from school, from college, is now our CFO, and I'm delighted to welcome this new team, this new team in new leadership positions. The team's been with us for many, many years, so I'm glad that there is a seamless succession planning in play, and I look forward to working closely with all of them to continuously deliver even more strong results in the coming years.
It's taken us seven years to rebound to the magic four-digit number on our stock price, so we thank you again for your patience as we work very hard to get the connecting the dots in the company and getting the house in order. I think we have resolved for almost all issues. Our network optimization is more or less complete. We still have some small tweaks to be done, which we will over the course of the next many quarters. But at 61% gross margin, you will now appreciate, we now have industry-leading gross margin numbers... in spite of not having a domestic business. So our product selection, our product portfolio, scarcity, nature of our portfolio is playing through, and I'm sure that we will even do better as time goes.
Our recent product selections, launches, and a new terminology beyond generics in the U.S,, is predominantly, to now start guiding, investors and our stakeholders on, on what we are building to build a, a U.S. business beyond the generics play. You will all recall that we believe that, anything over $400 million-$500 million in the U.S., although we have a very large portfolio of approved products, is counterproductive to our strategy of pricing and discipline, given the high cost of maintaining an operation that's focused in the U.S.. Having said that, we still believe in the market strongly, and we have started investing heavily in new domains, especially leveraging our controlled substance capabilities in the U.S., and now have developed a nice portfolio of chronic drugs.
And we hope that from, while we still have a significantly higher H2, as we guided in our last call, we are trying to get our linearity in the quarters, and that would be our primary focus. Small tweaks will lead to big wins, and I'm sure that we will not only meet our guidance, but will also build the foundation for very successful and strong future growth. And with that, let me have the pleasure of requesting Badree for his opening statements, and then Vikesh, our CFO, will add his commentary. Apologies for the longish opening statements today, and then we'll go straight to Q&A. Thank you.
Good morning, good afternoon, and good evening to all the people who are participating in this call. It gives me immense pleasure to announce the Q1 results as the CEO for the first time, and it's a great honor to lead Strides. I've been with Strides for the last 15 years, and I've played multiple roles. The last two, three years has been the most exciting in my life in terms of I led many functions, and one of the best things that happened to me was that I was able to handle the people side of the business, which helped me to understand the business much more, as well as also build capabilities in the company. The good part is that we are able to make Strides a very metrics-driven organization.
Every function has a metric, and every business has a metric, and that, that's going to be the governance in future for us, and that is reflecting in the results. So coming to the quarter one results, I just want to cover some few points. And before that, I just want to thank all the shareholders and Arun specifically for guiding me all through the last 15 years. Plus, the Strides board, who has been the guiding light for me for the last many years in this role. And as we said, the profitability, efficiency, and growth has been the focus for the company for many years. And we are very happy to say that the profitability and efficiency has grown, you know, much faster than the revenue. That's a very good sign of a healthy company.
Coming to the specifics in terms of the business, I want to cover each and every business in terms of the performance for Q1. The first one is the U.S. market. The U.S. market, we have recorded $17 million, the first time ever in the first quarter. The second one is in terms of the first quarter that we launched, we had the full quarter of generic Suprep sales. And we also launched the first significant dormant product from the acquired Endo portfolio. And we also doubled the size of the average size of the value of the new products launched in the last many years is what we have seen.
That's a perspective we have at this point of time as we transition from acute to a chronic portfolio. The U.S. business looks strong, and we are on track to get to that $285 million-$300 million, which we have guided. The growth is also quite good in terms of 34.5% year-on-year. So coming to the other regulated markets, this has also grown for the first time from $35 million to $41 million, and there is a 17.8% healthy growth. We have got a strong customer advocacy as well as a dependable supply, which enabled us to be able increase our customer base, and the continuity of the portfolio is playing through.
As far as the growth markets is, growth markets and access markets are concerned, the growth markets have recorded a significant growth, almost about 40+% year-on-year. We believe that growth markets will be, will be lumpy as the business stabilizes in the next two years. The access market is, as you are all aware, that it depends on, various external factors, but overall it is intact. So with this, the main principles on which the entire company will be governed is in terms of, the profitability, efficiency, and growth. What we want to do is in terms of sustainability and consistency, we want to focus on execution, at this point of time.
... and we believe that we have got enough engines in place, we have got management team in place, and we believe that we can, we can, we can do quite well this year, and we are happy with the outlook what we have given. And we are reasonably confident at this point of time to meet all the outputs. With this, I will leave it to Vikesh, and welcome him as a first, first time as Group CFO to address you all. And over to you, Vikesh.
Thank you, Badree. A very good morning, good afternoon, and good evening to all of you. I personally feel very privileged to have begun my career at Strides, and after a remarkable journey, I'm honored to address all of you as the CFO of this esteemed, esteemed company. I want to use this opportunity to express my utmost gratitude to both Arun and Badree for their constant support and guidance in my 15 years at Strides. Badree, who has been our long-standing CFO, personally for me, has been an exceptional mentor and guide. His mentorship has been the cornerstone of my success, and I am thrilled to see him take on the role of a CEO.
I wish him all the very best in his role, and I hope to follow his footsteps and continue his legacy as I take on this role as the CFO. I want to also thank all our shareholders for the phenomenal support and continued trust that you have had on Strides, especially as we navigated through turbulent post-COVID years. I also want to take the opportunity to thank all my colleagues at Strides for enabling us with a fantastic start to this journey of ours with a strong show in our Q1 performance. Today, I want to focus on the profitability and efficiency metrics of our Q1 results. We reported an EBITDA of INR 217 crore, with hitting the 20% EBITDA mark after almost 12 quarters. Our focus on operating leverage is clearly visible in the P&L.
It has translated to a 2.8 times growth in our adjusted PAT, which came in at INR 83.9 crore. And our reported PAT of INR 68.3 crore reflects our best ever quarterly PAT performance, with a reported EPS of INR 7.6 per share. This has been enabled as Stelis reported a second consecutive quarter of positive operating profits, and consequently, you can see the gap between adjusted PAT and reported PAT significantly reduced. Moving on to the efficiency metrics. Our cash-to-cash cycle remains steady at 129 days. This has significantly improved over the last year. In Q1 specifically, we've had an increase in both our receivables and inventory, both for the product launches we had in Q1 and for our expected growth in H2. And this is despite we've been able...
Despite that, we've been able to generate cash flow from operations for the quarter, which came in at INR 155 crore, and it helped us to reduce our debt by INR 36.7 crore. We invested INR 51.5 crore in growth CapEx, and this was completely from the cash that we generated during the quarter. With the operating cash generation, we have also reduced the net debt to less than INR 2,000 crore. So at INR 1,998 crore with a net debt- to- EBITDA ratio of 2.3x. And with the growth that we expect, we expect to be on track to meet our outlook of less than two by the end of this year. Our rigor on operational excellence is visible in a consistent improvement of our ROCE.
ROCE has improved to 16.3% in Q1, compared to 12.8% where we ended in FY 2024. I'm also happy to report that our credit rating outlook also improved from A negative to A stable. For comprehensiveness, I will also cover specific cost items. Our expenses for the quarter have been high. We saw freight rate escalations, and we also incurred ad rates for our product launches and administered pay hikes for FY 2025. We expect our operating cost-to-revenue ratio to improve in tandem with the growth in H2. Our net interest costs are steady at INR 67.7 crore, and we expect this will also improve in H2 with both growth and debt reduction playing out. Our effective tax rate is at 17.4%.
It is in line with our estimates, and we expect it to be in the range of 17%-20% for FY 2025. We continue to remain focused on delivering on our metrics of profitability, efficiency, and growth to achieve our outlook for the year and drive sustained value for all our shareholders. Thank you for all your support, and we're happy to take any questions that you may have.
Thanks. Just one other point before we take questions, please. On OneSource, we just want to give an update. OneSource is, the matter on OneSource has been admitted by the NCLT court. We expect to have a creditors' meeting called out very soon. And we're on track to hope to have a positive outcome within this financial year. We also had a very strong outlook on OneSource, especially our biologics division has been winning several new contracts. And our CDMO injectables and our platform soft gelatin business are all on track, and we have guided for $60-odd million of EBITDA with an exit run rate of almost $20 million per quarter for this financial year.
That's going on track, too, and I just thought I will give a quick update before we take questions. Let's start.
Yeah. We're going to take the Q&A, please.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Aman Vij from Astute Investment Management. Please go ahead, sir.
Yeah, hi. Good afternoon to you. Hello?
Yeah. Hi, go ahead.
Yeah. So just a request before I begin with my question. So since our company has a lot of different divisions, and we don't do an analyst meet kind of thing, and this con call is the only way to ask the questions. So I hope we get to ask enough questions, because last two, three calls, what has been happening is the call is getting ended in 45 minutes, although a lot of people have been trying to ask more questions. So just a request for the whole management team, if you can give enough time for the analysts to ask the questions. With that, my first question is on this-
We are actually very delighted you are first on queue, so we got your message too. So we'll, we'll work on that.
Sure, sir. First question is on the OneSource only. What was the run rate for Q1 in terms of top line and EBITDA?
We don't give specifics. We have given you a guidance, and we are saying we are on track.
Okay. No, so Q1 numbers, you won't be able to disclose for OneSource?
There is no OneSource form, right? It is a legal process that's ongoing.
Mm-hmm.
We have guided that we will meet our outlook numbers.
Sorry, you also mentioned the exit run rate for this business will be $20 million for EBITDA. Is my hearing correct?
Yes. FY 2024.
Sure. Sure, sir. So on, continuing with, on OneSource, so we had signed, around $70 million of, MSA, and then, CSA is much bigger, number. And given one of the product is getting commercialized, in this year, so out of this, MSA, how much can we execute this year? Is it like 50% or is it like 30%? And similarly for MSA, if you are, not... If you can't give the, exact numbers, but what kind of range, should we assume for the first commercial, CSA that is, going to happen this year?
We can't, but I can give you an indication that Stelis, which delivered about $20 million of revenues last year and is still loss-making, will end up closer to $50 million, and will have an EBIT of almost 35%.
Ah! That is very helpful, sir. Next coming on our biosimilars, the teriparatide business, sir. So I believe we had a strong lead in terms of the product, but for some or the other reason, our partners haven't launched the product, and I believe, this will happen in this year. So any reason which you can give, what is the reason of the delay, of launching this product, as well as when can we ex-
Sir?
Aman?
Yes. Yes, yes.
I got a question, but we didn't have a strong lead, and I don't know, I don't know where you got that data from. We are very late with this product. We are at least the 5th or 6th generic. It's typical that when you launch a biosim, the time from approval to launch, because especially when you have a partner, takes a good six-eight months, because it requires label changes, filings, brand names. These are branded products. So it does take time, and we were not first in the first wave approved in for the European markets.
So, do we expect the launch in, say, the first half or the second half this year?
Second half.
Second half, okay. On the capsule business... Sorry, go ahead.
Can you please join the queue?
Okay. Sure.
Thank you.
Thank you very much. The next question is from the line of Viral Shah from Motilal Oswal. Please go ahead.
Hi. Am I audible?
Yes, completely. Viral, if you are on a mobile phone, we're not hearing you well.
Hello, hello.
Yeah, better.
Yeah. Is it better?
Yeah.
Okay. So first of all, congrats on the set of numbers. My first question is on U.S. generics market. So you, in first quarter, you had a run rate of $70 million, and you have targeted $280 million-$300 million for the year. So based new launches and market share gains, would it not be possible to achieve more business in U.S. generics in the during the year? Or is it the final target in this line?
You should stick for the range that we have guided. That allows, like, like we said earlier and keep consistently saying, to have a calibrated and disciplined launch means that when we get challenged for pricing, we are happy to let go of that and then still grow the business at the margins that we are focused on.
... Mm-hmm. Okay, okay. Fine. My second question is on, based on source change and cost leadership, so how many products would be relaunched in FY 25?
We think we'll have another four-five products to be launched during the year.
Okay, okay. Got it, four, five products. And if possible, to share the market size of products in 505(b)(2), nasal spray and controlled substance, which would be filed in 1Q FY 2026.
505(b)(2) discovers a new market opportunity, right?
Yeah.
So we're not competing, we're creating a new opportunity, so time will tell how that plays out. The nasal spray opportunity is about $600 million, it's about $600 million-$700 million in terms of the market opportunity.
Got it.
In that market.
Okay, cool. And if any scope to share the business from Global Fund for FY 2024 and now in FY 2025?
No, it was. See, our access market is predominantly Global Fund. We did about $25 million in FY 2024. We've been advised that our allocation is about 30% more than last year.
Okay.
We expect this business to be about $32 million-$33 million. But like I said, this is not necessarily a business that... I mean, we service it, we service it well, but it's not something that is, you know, our primary focus as we've been consistently saying.
Understood. That's it from my side. Thank you so much.
Thank you very much. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Nitin Agarwal from DAM Capital, please.
Thanks, and congratulations to the Strides team for, you know, for the remarkable turnaround in the business. Arun, I had a question on the OneSource slide. You know, we mentioned, in a couple of places around the, PTH DDC product. Can you just give us a little more color on, you know, what is the, what is the opportunity here that we're talking about?
You know, we, while we received, and again, thank you, first of all, for your, for your good words. But the... And to add to your question on the DDC product, this is PTH, which we had European approval earlier. We now have the U.K. approval, so it's just, being a different regulatory agency. It's just an update.
Okay. And so this is the same product that you put a DDC product into, in a DDC section, as well as in a steriles section. It's the same product that you're talking about?
We had also, I mean, we had one product of our own, and then when we pivoted to a pure play CDMO, we are just giving an update of that one product. It is now being licensed to about 30 odd customers worldwide, and the U.K. MHRA approval was the last pending approval. And now that has arrived, and that's, that also addresses one of the previous questions around launch delays, that typically partners would launch products in all markets around the same time. So it was just an update that it's now more closer to launch than ever.
Thanks. Secondly, you know, the RFPs that you mentioned, or the uptick in RFP that you mentioned for the Steriles business, can you qualitatively give us some idea of the change, the scale, if there is a change in scale and scope of the kind of RFPs you're participating in now?
Yes, significantly bigger size, big pharma, and also, I think it's also to do with the frenzy around the Biosecurity Act, but we are not so sure if I'm sure that we are only one of the many options partners look at when they do the China Plus One strategy, especially after the Biosecurity Act is in the public domain. Yeah, so it's been an unusual phase of RFP issues.
Lastly, on the other reg market business, you know, the business traction, I mean, is it as per what you sort of expected or there is, how do you see this peak piece really playing out, as we go forward now?
I think, even if you follow what we told all of you in the end of the year call, was that Europe will. The products have been approved, they're partnered, but they'll be launched only in H2. So it's just a function of time, because Europe for us is predominantly a partnered market.
Got it. Thank you so much.
Thank you, Nitin.
Thank you very much. The next question is from the line of Vishal Manchanda from Systematix Shares. Please go ahead.
Thanks for the opportunity. In the U.S., can you share some color on the concentration, the contribution of, say, the top five products to the total revenues?
So, now we have about, we have mentioned that 35 products constitute almost $250 million of business, so it's a fairly, fairly linear situation. But nonetheless, the recent launches have got significantly higher dollar numbers, upwards of $10 million. Not on all products, but most of them. So yeah, so I don't think we have a concentration risk, as part of our overall strategy or calibration.
Would there be kind of products wherein you are the sole player, any product where you are sole player in the U.S., or maybe one of the two players in a product category?
35 products we are actually number one or number two.
Okay, got it. All right. And just one more. Any, any comments on price erosion in the U.S.? Has that amplified in the recent months?
We've been telling you this, that with the luxury of over 250 ANDAs, and if we have launched only 67, the logic being is that we would only launch a product if it meets our price tags. So I'm not saying that price pressures are not there, sporadic, it's very product specific, but that irrational exuberance of the buyer, buying community to push suppliers down, resulting in big shortages, is a thing of the past. I think we are working more as partners. We have a phenomenal track record for service and an almost zero failure to supply situation in the U.S. And that, all of that comes with a price, and I think the buyer universe is appreciating that better and understanding the circumstances in which the industry operates.
You know, you can't be selling an expensive drug which requires so much complex manufacturing at a price less than a gummy. So there is, if I may say, a little bit more sensible thinking, and things are playing to a reasonable situation. I am not suggesting price erosion is not there, but when we get challenged, we do not hesitate to get off the product because we have a nice pipeline of products that continuously get relaunched, and we should be able to maintain. Our focus is obviously gross margin and the guidance that we've given the street.
Right. And so do you have enough capacities to kind of execute our growth guidance that we've given?
Thank you so much. That's why I said earlier in my opening statement, we still have to tweak our network optimization plans, especially with a lot of the products now being manufactured in the U.S. For the U.S., it just gives us significantly different opportunities and channel sales opportunities in the U.S. We still have some capacities that need utilization, which we hope... So we don't think other than automation and compliance CapEx, we will not require any new CapEx.
Got it. Thank you very much.
Thank you. The next question is from the line of Yash Dedhia from Maximal Capital. Please go ahead.
Good afternoon, sir. Yash here. Most questions have been answered. Just one thing on the ORMs. So, in the U.S., we have guided for, like, 50% growth in the next three years. Given that, the ORMs, we have not yet penetrated so well, so what kind of, you know, ambitions do we have in the medium term for us to reach? So that is number one. And secondly, on the working capital, I think now we are probably at the lower end at four months. So do we expect any further improvements because of optimization in the working capital, or do we expect this four months odd working capital to continue in the future as well?
Well, I'll take the thunder away from Vikesh to answer the working capital question. I think at the current number of days that we operate, we are already amongst best in class. We probably have a few more days to squeeze. We are actually building out for a stronger H2, which is typical that we are invested for H2 now. We see very little opportunity to do better there. With regards to ORM, we have guided not as firmly as we have for the U.S. market because it's a business we just about consolidated in since the last two years. And, I know your statement comes from the fact that the last four quarters, including this, has been fairly steady state.
But if you look at the reset that we have done in the last two years, we keep our revenue target at a certain level, but our margin expansions are happening, as you would appreciate, from as low as 5% to 20% in the last 12 quarters. And then we invest heavily on growth, so there will be a step change in the ORM business in H2, and then it will stay, it'll, it'll again go through a two-three-year stability, stable process. We did guide once that we want the ORM business to be a mirror of the U.S. market at $400 million, but we are at least about four-five years away.
Hello?
Yeah.
Yeah. So, but we do expect the working capital to be maintained at least at this level?
Yeah. It won't go up from here.
Okay.
... Next question, please.
Thank you very much. The next question is from the line of Sanjay Kumar from ithoughtpms. Please go ahead.
Hi, sir. First question on drug substances. We've announced that we've onboarded a top three global animal health company for novel biologics. If you could share the market size of this molecule or the per year supply for this particular drug.
It's novel, so the markets will discover it once it's approved.
Sorry?
I said it's novel, so-
Okay.
Markets will discover once it's approved.
Okay. Okay. And, and, in the previous presentations, we had also mentioned that we are working on or close to signing two other drug substance molecules. Are these innovator molecules as well, or are these biosimilars?
You, you're getting something wrong. 200 what?
Two other drugs, DS molecules in pipeline.
Yeah, yeah, of course. It takes time to convert, but yeah, we are-
Are these innovator molecules or biosimilars?
It could be a mix of both.
Okay. Okay. And second, on our fill- finish capacity, we had indicated that we'll be taking it to 200 million devices. What kind of CapEx will be needed, and what's the timeline for this, sir?
Around $50 million, and it will take us about three years.
Okay. And at 200 million, what will be our capacity market share globally?
Well, the market is growing extremely rapid, and I can't hazard a guess on what percentage that will be. It will be important, but not in any kind of top ten leadership, considering there is very significant players who make very significant numbers. But yeah, from an India perspective or an Asia perspective, I would like us to believe that we would be the number one.
Okay. Final question: is it a reasonable assumption? Let's say, can we make $1 per fill-finish for something like semaglutide?
We're not getting into specifics, Sanjay. You won't get a specific answer from this company ever. That's the policy of us. You can ask anything that we give you a guidance, we'll give you, but we don't talk products, we don't talk numbers. We are a CDMO. We respect our partner engagements, and you'll have to infer all of that through your own research and not getting into specifics with us.
Okay, cool. Thank you. I'll come back again.
Thank you very much. The next question is from the line of Anand Shenoy from ES Capital. Please go ahead.
Good afternoon. Am I audible?
Yes.
Sir, first on the business, we are significantly expanding the capacity. So in terms of visibility, can you talk about, like, what visibility we have in terms of utilizing this capacity and when do we expect that we'll peak in this one?
Anand, you're speaking very fast, and I'm assuming your question is related to soft gels.
Right. So we have expanded the capacity. Is the expansion complete, first of all?
Yes, it is.
Okay. When can we, like, expect that we reach the peak in this one, peak revenue?
What do you mean by peak revenue?
I mean, we have expanded from INR 1 billion- INR 2.4 billion. So my assumption is that we are almost hitting INR 1 billion. So when can we, like, how many years will it take based on the capacity visibility we have?
Well, the expanded capacity is fully sold out.
Fully sold, great. Okay. And from H2 of this year, we will be fully utilizing that?
Not fully. We'll start utilizing.
Okay, cool. And on the drug device combination-
Can I... please come back to the queue and just give a chance to the others to ask questions?
Sure. Thank you.
Thank you very much. The next question is from the line of Omkar Jagirdar, who's an individual investor. Please go ahead.
Sir, good evening. Am I audible?
Yes.
Thanks for taking my question, and heartiest congratulations to you, Badree sir, and Strides team for outstanding quarter on numbers. Gross margin has delivered above 61%, operating profit margin is 20%. And important thing, U.S. revenue has recorded the highest ever revenue of $70 million in the history of Strides Pharma. So in my opinion, new era of Strides Pharma just started. Even I requested Badree s ir nine months back to do some changes in the presentation where we can see all your quarterly results properly, and I can see all the changes in last quarter four as well as quarter one results on the BSE site. All five quarters, U.S. and ORM revenue is reflecting, which helps to compare the results properly. And congratulations to Badree s ir for becoming MD CEO of Strides Pharma.
Welcome and all the best to Vikesh Sir in new role as the CFO of Strides Pharma. I'm confident Strides will deliver $290-$300 U.S. revenue in this financial year. My two questions I'm asking you, one is, as far as promoter pledge is concerned, it is at 65%. When it will go down to, substantially down? And second question, can we expect ORM revenue of $48 million-$50 million in second half of this financial year? Current exit trend run rate of ORM market is around $40 million-$42 million. Thanks for taking my question, sir.
...Thank you. The first question on the pledges, we were obviously very focused on the operations of the company. The pledges are directly linked to the investments that we had to make at Stelis. Now that we are very close to an NCLT process and listing, we believe that our pledge positions will come down quite significantly. I hope we can have a much more pleasant conversation or positive conversation, for want of a better word, around that in the next earnings call. So you could - we - you would see some positive, very positive movements around that. The family is working very closely now that we've got all the businesses operating well, to stay focused on solving for that issue. On the question on ORM, will it come to market to get exit fund rates?
I'm going to request Badree to address it and also thank you for all your good wishes to the team.
Thank you, Kumar. From ORM perspective, we just said that the products have been approved and it's partnered, and we'll have a better H2 going forward. It should start reflecting in the numbers from H2, and you will see the results by the end of FY 2025.
Okay, next question.
Thank you very much. The next question is from the line of Yachna Bhatia, who is an individual investor. Please go ahead.
Hi. My first question is on GLP-1 drug. You mentioned that we're expanding capacity from 30 million units to 200 million units. I just wanted to first understand on the existing capacity itself, what is the kind of peak revenues and margins that is possible from this facility at full utilization?
But we are not talking about the unit has got several other sterile suites outside of the cartridge facility. If you look at our first OneSource introduction to the market, we've guided that revenues will more than double to about $400 million in the next four-five years. And we are sticking to that guidance. So the capacity, the facilities, the group facilities amongst almost four or five of the units that operate under that OneSource will deliver those kind of numbers.
Yeah, but that was, like, across all the businesses or OneSource?
Another investor question. We can't give a specific line revenue, obviously.
Okay. Okay, sure. Okay, I actually had a similar question on the capsule business as well. If you could, you know, give a color on, again, the capacity size. You're saying you can't mention that as well?
No, we can't. It's too specific a question.
Never mind. Thank you.
Appreciate it.
Thank you very much. Ladies and gentlemen, due to time constraint, that was the last question for today's call. I would now like to hand the conference over to the management for closing comments.
Thank you. Thank you, everybody, for being on the call today, and appreciate your questions. As always, please reach out to Abhishek, the investor group, or any one of us if you need more questions answered. Thank you, and have a great day.
On behalf of Strides Pharma Science Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.