Beta Drugs Limited ($BETA)

Ladies and gentlemen, good day, and welcome to the Beta Drugs Limited's Q4 FY '26 Earnings Conference Call hosted by Phillip Capital PCG. [Operator Instructions] Please note that this conference call is being recorded. I now hand the conference over to Mr. Sri Surya from Phillip Capital PCG desk. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone. On behalf of Phillip Capital Private Client Group desk, I welcome all of you to the Q4 and FY '26 Earnings Conference Call of Beta Drugs Limited. From the management, sir Ashutosh Shukla, Director of Sales and Marketing; Mr. Nipun Arora, CFO; and Ms. Rajni Brar, the Company Secretary. I now hand over the conference to Mr. Rahul Batra for his opening remarks, and then we'll open the floor for the question-and-answer session. Over to you, sir.

Thank you. Good afternoon, everyone. Let me take you through the key highlights of FY '26. First, coming on to the financial analysis. Beta's net revenue grew from INR 368 crores to INR 396 crores. The gross margin grew from 52.71% to 55.52%. The EBITDA grew from INR 76.97 crores to INR 86.85 crores and the margins from 21.1% to 22.57%. The operating margin has also increased from 17.65% to 18.11%. The net profit although has been declined from 11.71% to 10.78% but if we don't account the extraordinary expenses, which has impacted the overall margin, the net profit margin would have been above 12.5%. Coming on to the sales segment-wise, different vertical-wise. The branded sales grew from INR 103 crores to INR 123 crores, that is by 20%. The CDMO sales grew from INR 148 crores to INR 149 crores, that is by 1%. The only reason of sales impact on CDMO is the platins, which we didn't supply in the last half year, which would otherwise have increased the CMO sales by 7%. The export sales have declined by 11%, that is from INR 79 crores to INR 71 crores. The only -- this is only because the tenders which were supposed to be awarded in FY '26 got awarded in March '26. The tenders got delayed by almost 4 months. We are happy to announce the tenders have been awarded and the supply will be starting from the first quarter of FY '27. We are on track to have a growth of more than 50% in exports in FY '27. The derma sales have grown from INR 12.3 crores to INR 16.58 crores, that is almost 35%. The overall derma business has become EBITDA positive, and from here on, we will escalate the branded cosmetology business. The API business has grown from INR 20 crores to INR 25 crores with an increase of 23%. The most important highlight is the Nivian, the fertility business acquisition. Beta has acquired 66.1% stake with a total consideration of INR 69.4 crores at a valuation of INR 105 crores. We believe there are significant synergies between 2 companies, and the valuation will reflect the true potential of strategic partnership. The transaction is closed in April '26 and will be able to consolidate full year revenue of Nivian Lifesciences for FY '27. The promoter of Nivian has not diluted even a single share and will continue to run the business with full enthusiasm along with Beta's operational efficiencies and bandwidth. Now discussing the segment-wise business. Coming on to our own brands. The branded oncology business has shown a growth of 20% as compared to last year in spite of all challenges faced of non-supply of platins. There has been significant contribution from top 3, 4 brands, and we are happy to announce that our 1 brand has touched almost 10 crores of sales last year. We launched 2 new NDDS in the last year and 5 new products. We will be launching around 20 to 25 new products in the coming 3, 4 years that includes the NDDS products as well. Today, we have 135-plus products in oncology, and we have a remarkable presence across all the corporate hospitals, even the government institutions as well. Beta will continue to grow its own branded business by 20% to 25% in the coming 3 to 4 years. The credit goes to the sales team where each and every individual working has shown a tremendous temperament to take this business forward. The growth will be derived by new launches and deep penetration in different cities across India. Coming on to exports, although the last year sales have shown decline, but we have laid a solid foundation, and we have put a lot of effort and focus on the export market. The tenders, which were supposed to be finalized in December or January and the sales work will happen in FY '26 has postponed and now got awarded in March '27. The sales will start reflecting from FY '27 first quarter onwards. Beta in the last 1.5 years has submitted more than 200 dossiers and expect new registrations close to 100 this year. These registrations will be across from different geographies. We are investing widely on the dosage submission of new molecules in the regulated markets. The human resource, HR department have been significantly added to keep up the pace of dosage submission. Beta has already submitted 3 doses in EU for EU audit, which is scheduled in September 1 week of this year. Our target is to file maximum number of doses in the coming 2 years. The export, as per our forecast for next 3, 4 years will contribute 30% of the total revenue by FY '30. This results -- the results of the growth will start reflecting from Q1 FY '27. Coming on to CDMO business, although the CDMO business has increased by only 1%, but has marginally impacted -- majorly impacted by the platin sales. Our key focus area, adding more players. We have recently added more CDMO partners and are focusing to build this sales growth for future growth. We have also shifted our high-margin products to the CMO partners where we are adding more and more molecules with our existing partners. This move of company will make more towards the growth of this vertical and will continue that -- to make it 5%, 6% annual growth for the next 3, 4 years. Coming on to the API business. The API business has shown a growth of 25%. The API plant has recently cleared audit of PIC. This opens a lot of door for export market. With the new intermediate facility of the API business will get a big boost and dependency on the import of key KSNs will reduce significantly as all the KSNs will be manufactured in-house. The development has already started, and we will make it commercialized by this year. Coming on to cosmetology and dermatology. The cosmetology and dermatology market is growing at a CAGR of 14% annually. Our current covered market is between 3,500 crores to 4,000 crores. We have achieved a PCPM of 1.85 lakhs with 69 TMs on board and will grow up to 2.3 to 2.4 PCPM this year. The next 3 to 4 years, cosmetology division will continue to grow at 30% to 40% annually. There have been recently launched pillars with exclusive tie-up with a European company. In April, we got approvals to market mesotherapy in India exclusively from Europe. We have also tied up exclusively to market innovative cosmetology products in India, where Beta is in process to register more than 8 products from Europe. Coming on to the Nivian fertility business. The current acquisition of Beta in IVF therapy will enhance company's presence in one more super specialty. Nivian is among the fastest-growing companies in IVF space and has a strong brand recall among doctors and IVF chains. We see tremendous synergies between 2 companies. We can improve the gross margin with having better connects in the market as we are present since last 4 decades. We can enable Nivian to sell its product in the corporate hospitals where we have worked in a number of years. We can also leverage the manufacturing infrastructure in the near future. Nivian will continue to grow at 30% for the next 3 to 4 years and can be a brilliant branded business in all the verticals. To conclude, we accept that the growth expected last year was not at all encouraging for the entire company. For the last 6 months, we have made different strategies to overcome the challenges like these we have found in the latter half of FY '26. With this, we have made a Vision 2030 and also inculcated this vision among the members of Beta family. We are working on many fronts that includes in-licensing, marketing the novel products, make the new products, market the new -- first make generics, not only in India, but globally also. The oncology business has got a huge potential globally, and we are working aggressively to attain the market share. This will enhance not only the revenue, but a great EBITDA and net profit. There will be a continuous effort from each and every individual to make Vision 2030 possible, which we see is achievable. Thank you. We move on to questions now.

[Operator Instructions] The first question is from the line of Darshil Jhaveri from Crown Capital.

Firstly, good performance in a challenging year, sir. Sir, just wanted to understand in terms of FY '27, sir, I think we had given a guidance previously of INR 550 crores revenue and 24% EBITDA. Do we hold by it? Or can we better because you're saying exports and [indiscernible] both will have really great growth, sir. So FY '27, what is our outlook, sir?

So outlook will be same. We will continue to grow at 20%, 25% annually. We have set a vision of Vision 2030, where we want to double our sales, rather more than double our sales in the next 3 to 4 years.

Okay. Double our sales. And sir, margins, sir, we are saying around 24%. So is that achievable, sir?

See, if you have seen the gross margin has increased from 52% to 55%. And EBITDA margins also have increased from 21.1% to 22.5%. So once the export and the branded sales will improve, the EBITDA margins will generally -- will definitely come up above 23%, 24%.

Okay. EBITDA margin will be 20%, sir. And this includes other income, right? Sir, what is the portion of other income? Is it ForEx gains or because this year, we had, I think, around INR 11 crores of other income. Usually, we don't have that much, sir. So how do you see that, sir?

Nipun, can you explain?

Yes. Sir, the other income includes interest from SCR. So this is somewhere around INR 8.5 crores to INR 9 crores in this year, and so the total is INR 11 crores, but only the other INR 2 crores, INR 2.5 crores are duty drawbacks, MES licenses sales. So those are related to business only. Only INR 8.5 crores to INR 9 crores is the FDR interest.

Okay. So if we have INR 8 crores as FD interest...

If you want me to exclude that other income -- completely, if I exclude that other income, even though those duty drawbacks and everything, then it would be 19.67% compared to 19.33%. 19.33% last year, and this year, it will be 19.67%. I have excluded all the other income.

Correct. So that's what I'm asking, sir, the EBITDA margins that we are saying around 23%, 24%, that we are accounting for with the other interest or without -- sorry, with the other income or without the other income, sir?

Sir, that 23%, 24%, let us be consistent to be included -- to include the other income also. So if we are saying this year, we are 22.5%. Next year, if we say we are 23%, so we are comparing from the same base, like including other income.

Okay. Okay. No, no, no. Fair enough. That's why I just wanted to clarify that, sir. And sir, just wanted to know like this year, we decided to forgo the plant, that's around INR 40 crores, INR 50 crores. So right now, I'm just trying to understand, I think our IVF segment, I think that has around INR 45 crores, INR 50 crores of revenue, right, in FY '26. So the major growth next -- so our guidance includes that? Or is just on a stand-alone basis, we used to say we'll grow 20%, 25%. So the acquisition is over and above it? Or how do we look at it, sir?

So the guidance includes Nivian also. But overall oncology business, our main core business will continue to grow at 20%, 25%...

So that way, we should have a higher than 20%, 25% growth, right?

Yes, yes, yes. See, what I have -- what we have said is that we have set a vision for 2030. We have set a vision to achieve INR 900-odd crores sales in next 4 years, so this includes every vertical, even the acquisition. So it's not about single vertical will include in that case because, of course, the CDMO will have a very low sales growth, so we have to take up the growth from other segments, maybe basically from exports, then from own brands, then from derma, then from Nivian. So all this put together, we have created this vision of 2030.

Okay. Okay. Fair enough, sir. I understand that part now, sir. And sir, just wanted to know like we have, I think, around INR 100 crores of cash with us, right? So any more acquisitions planned?

Right now, we will be looking for something in case something exciting comes. But till now, we don't have any option in hand.

The next question is from the line of Anupama from Ratna Traya Capital.

Yes. I just wanted to understand the value of the tenders that you've got from the export orders and from which geography that is? And is it...

See, we cannot disclose this on the call because we don't want everyone to hear in the market. So we have got that tenders, and that is from a very -- like very good market, and we got this in 2024, '25. But in '25, '26, we couldn't give it because of some other reasons in that country. But we have already got and we are supplying in the first quarter.

Right. And is it a new geography or new...

It's an old geography, but we have got some new products added in that.

Right. And sir, can you just highlight the IVF business project, what are the revenues for FY '26 and also the EBITDA?

Yes, sir. Sir, the IVF business, it has closed -- last year, it has closed INR 45 crores, INR 46 crores, and the EBITDA margins are close to 18%, 19%.

And what would be the PAT number?

PAT number is close to 9% or 10%.

The next question is from the line of Ruth Raheja from IThought Financial Consulting.

Sir, could you provide segment-wise EBITDA margins for FY '26 across?

Yes, sir. Sir, the branded margin -- sorry, the branded sales has an EBITDA margin of 35%, 36%. CMO sales have EBITDA margin of 17%, 18%. Exports have EBITDA margin of 20%, 21% AP has an EBITDA margin, again, 21% -- and derma has -- derma, we calculate the gross margin, which is 57%, 58%.

Got it, sir. And I think last year, derma margins were on 65% plus. So any reason why margin has declined?

Last year, derma margins were 65%. Some variance is there. The decline is there because of some schemes we have to give, that's why the margin has reduced.

Understood, sir. Understood. And sir, in exports, I think we were aiming for INR 200 crores, INR 250 crores type of number by FY '28. Are we on track to get there based on our current registrations and pipeline?

Yes, sir. So we are absolutely on track as far as the numbers which we have previously given, INR 200 crores by FY '28 because as of now, we are supplying to around 30 countries wherein the supplies are consistent. And we are also opening up around 14 new countries, which will give us that kind of revenue growth. So the question which you have asked, yes, absolutely, we are as per the plan, which we said earlier.

Understood, sir. And sir, which would be like substantial countries for us once we get to these levels, like top 3 for us?

Yes, yes. So I won't be able to disclose the company names, but I can only say that the top 5 countries will contribute almost about 30% of the sales. There are a few countries wherein as of now, today, the business is less than INR 1 crore, but we have won the tender, right? And the new dossiers have been submitted, so these countries like one country will contribute from INR 1 crore to around INR 20 crores plus. The second country will -- like last year, we did around INR 13 crores. That will also contribute more than INR 25 crores plus. Then there are a couple of countries wherein we have filed dossiers around 25 new dossiers and registration is expected to come soon now. Within a month, we are expecting the registration. So those countries will contribute significantly. And to be very precise, I would say that we will continue to operate in around 45 countries. And there are -- like if you say Southeast Asia, right, that is -- that will be the major growth driver for us apart from CIS and a few countries in LatAm.

Understood, sir. Understood. And sir, what are the plans with respect to this new Nivian division where we acquired? PPT mentioned a TAM of INR 1,000 crores which roughly translates into like 4% market share that we have based on the revenue figures you gave. So could you help us understand your vision with respect to this segment? Like what kind of TAM and market share are we planning for next 3 years?

So this market will grow. The total market size is around INR 2,000 crores, right? Out of this INR 2,000 crores, INR 1,000 crores is a recombinant market wherein we are not present. So we are planning to tie up with a few companies from where we can in-license our recombinants so that we can increase our covered market, point number one. Point number two is this market is growing at a rate of around 17% CAGR. So we expect that in next 3 years' time, the market size will be close to around INR 3,600 crores. So even if we continue the same kind of market share of 4.5%, then we will be doubling up our sales as far as infertility business is concerned.

And I'll also add up in this that the promoter who has been running this business since long, they have a strong team, which has already demonstrated the ability to scale this business at previous. So this will be a very big growth driver for us.

Absolutely, absolutely. So this financial year, we are planning to launch around 4 new products, and then we are also trying to in-license recombinants, and there are a few more products which are there in the pipeline. So this strong team, coupled with new product launches, plus if you see the overall IVF business, out of 12 lakh to 15 lakh cases, which are like the ideal case for this IVF, only 3 lakh population is being served, so there is a big gap in the IVF business. So we are trying to tap those things plus the new clinics. Apart from that, there are gynecologists who are also practicing IVF. So we are trying to cover that as well. So all put together, we have increased our coverage, which includes the IVF centers, IUI centers plus gynecologist. I hope I have answered your question.

Yes, sir. Just one more thing on this part. Do we expect some EBITDA margin dilution in this because we'll scale it, we may need to give schemes and more sales promotion, et cetera? Is there any possibility that we'll have to compromise on margins a bit?

So there will be no compromise on the margin side. The business is already scaled up and the presence is already there felt across all the hospitals. So we don't see any further reduce in the EBITDA margins. Rather, Beta synergy will help Nivian to procure goods at a lower price, what they are taking from the market.

Understood, sir. Understood. Sorry, sir, one thing I missed on derma side. Have we breakeven in that segment for financial year '26 on EBITDA basis?

Nipun?

Sir, on EBITDA basis, we have already been positive since last 6 months. So derma has started giving the EBITDA positive revenue.

Got it, sir. Got it. And sir, could you help with the capacity utilization that we are currently in across different plants that we operate?

So capacity utilization stands at the [indiscernible] still we have a leverage of 55%. It's around 40%, 45% we are consuming till now. Injectable liquid, we have -- again, we have an idle capacity for around 30%, 40%. In lyos, yes, we do have capacity like we are using around 85%. But we have a lot of space in agri formulation plant, so we are planning to install 2 more lyos there. So the capacity will not be any constraint for any future growth.

Understood. Just hypothetically, with our existing asset base, sir, what kind of peak revenues can we do?

See, with this particular setup with this asset value, we see the revenue can scale up to INR 700 crores, INR 800 crores easily without doing any major investments.

Understood, sir. Understood. And sir, CapEx plans for FY '27 and FY '28, if you could help with that?

See, last year, we invested close to around INR 45 crores in all the 3 plants together, in which there was a land which we bought, and we were planning to open an R&D office and a corporate office together. But somehow we have just dropped that plan. We have just taken a building on -- like adjacent to our office only, so it has become a big office now. So we are just planning to dispose that land since already the R&D setup will be there. So CapEx plan, if we see totally for next 2 years, we don't see any major CapEx happening apart from what we have done for the intermediate plant, where we have already bought an existing plant for INR 9 crores, and we have invested close to around INR 15 crores, INR 17 crores for the intermediate plant. Otherwise, total CapEx, we see that is not more than INR 25 crores in the next 2 years.

Understood, sir. Understood. So I'm guessing there would be no need to increase any debt from here. And with the conversion of -- yes, with the conversion into equities for our debentures, so what kind of interest cost should we expect for FY '27?

Nipun?

So FY '27 -- see, we have to convert these debentures in May itself, in May 2026 itself. So those -- whatever financial expenses you are seeing, that will only be coming for 2 months this year. After that, there will be normal bank interest, which is normally 7.5% on CC and close to 8% on term loans. So this financial expense won't come this year. Only for 2 months, it will come.

Got it, sir. And what would be our level of borrowings or expected level of borrowings in FY '27?

In FY '27, if I talk about working capital facilities, putting all the companies together, that should be close to INR 7 crores, INR 8 crores utilized. I'm talking about utilized or maximum INR 10 crores and the term loan will be close to INR 20 crores.

That helps. And sir, you mentioned that we are working on this intermediate plant. And sir, if that becomes functional, I think you mentioned we'll try to commercialize it by end of this year. So what kind of jump in the margins that we could see on a consolidated basis?

See, what we see from generally what our workings have shown from the R&D, what we have done for the last 12 -- first 12 products. So we see there will be a slight increase in the margins by 1, 1.5 basis. But till the time API is not commercialized, we cannot say because it depends -- totally depends on the yield when you are getting it. So the main idea about it is that you have to have a proper control of the DMF. When you're filing the dossiers, the DMF plays an important role. So right now, our main cases come from China. So the documentation support becomes sometimes very difficult to get it from there. We have to sell people and we have to get the QB audits done. So in that case, we are just making everything in-house, and we don't want to be dependent on anyone. So that's the main strategic decision which we have taken to come up with an intermediate plan. Yes, of course, the price advantage will be there. And what we see is 1.5 basis. But again, till the time the commercial production comes, we cannot say that.

Got it, sir. Got it. And that would be entirely for our internal consumption, right?

See, if there is -- because we have come up with a good like capacity, so there are companies who have approached us those products, which they are also taking out from China. They also want those intermediate from India only. So we might be exploring that potential in that market as well.

Got it, sir. And how much have we actually in total, like spent on this KSN plant?

The total plant cost, including land, machinery and plant cost, everything put together, that will be close to INR 27 crores.

Understood, sir. And the issue that we had with respect to platin, that won't be our own KSM supply. Would that be fair to assume?

Exactly, yes.

Understood. Sir, you also mentioned 2 new NDDS to be launched in FY '27. Are we on track for that?

Yes, 100%, we are on track. One new NDDS will be launched in next 2 months. And NDDS, we have just got a BE NOC. So we'll be starting the bioqualence very soon with CDSO and we'll be submitting that report by November. And maybe after this year, maybe by January, February, we should get the approval of that product.

The next question is from the line of Santosh from Pan Veda.

One question regarding geopolitical tension that is going on. Are you seeing any impact on the exports or impact on raw materials due to the ongoing inflationary trends in India?

Yes. So there are certain products which are used in API manufacturing and the formulation manufacturing, so those are byproducts of petrol only. What we have done as a strategic thing is that we have already kept the stock for 4, 5 months. So we have bought and kept an idle stock for 5 months for these products. So we don't see any shortage. Then impact on the prices, there is some impact on the prices as we are into super specialty, so it is not making that much impact as compared to the other generic or other drugs in the Indian market. But still, if there is like substantial financial impact, then the prices will be increased accordingly for the market as well. And people know -- people are aware of the situation. Even our partners everywhere, whether it's CDMO, whether it's trade, whether it's export, they are aware of this situation.

Got it. And another question is for the past 2 years, we have been diversifying the different businesses, including cosmetics and now IVF. Are we seeing any slowdown in the oncology business and that is the reason we are moving to other [indiscernible]

Okay. So did -- you've seen that we grew by 25% in FY '25, then we grew by 20% in FY '26, right, our own branded business. And we poised to grow at the same pace in the coming years as well, 3 to 4 years. So we don't see any slowdown in this business. It's just an additional opportunity since we are a super specialty company, we always aim at like having some more super specialty in the basket. A pharma company is a company where it has to have multiple segments. So entering into cosmetology, it took us 2 years to decide to which division we have to enter. Then this IVF, again, it's a super specialty. We have been discussing with Nivian since last 1.5 years. It took us 1.5 years to take a final call on this acquisition, so it's always better to have multiple specialties. Plus oncology business will never be slowed down. There are -- you have seen how many cases are being diagnosed every year. And it's globally, it's not only in India. It's globally patients are being increased for the -- like they have been suffering from cancer. So this business is never going to be slowed down.

Okay. Got it. And one last question. We said some tenders are missed in FY '26, but they got booked in probably Q1 of FY '27. What is the revenue impact of this miss tender revenue in FY '26?

Sorry, I didn't get your question. You were not audible.

So you said we missed some tenders in FY '26, right, that got pushed to FY '27. What is the revenue impact of this miss tender?

So the revenue was close to around INR 20 crores, INR 25.

The next question is from the line of Shara, an individual investor.

You had mentioned in the note with the result that because the interest component from CCD, our net profit would have been higher by about INR 6.5 crores. But ideally, our monthly expenses -- interest expenditure is around INR 4 crores. So could you just clarify the annualized impact of the interest component on CCD, number one. Number two, on the exports, you had said that they were delaying tenders. So is our export business concentrated in a couple of markets, though we are exporting to 30 countries? And how we pled on Q1 this year versus Q1 last year on the export business?

Venture question, Nipun, you take. And Ashutosh, can you give the answer for export, please?

Yes, Nipun, you can continue.

So in this P&L, the total expenditure of interest, which was booked for compulsory convertible debentures was INR 9.36 crores. So the total interest on CCD. So if we exclude that, then we have calculated that our PAT will be 12.5%, considering the fact that our tax will also increase because the tax which was saved on interest, we have reversed that also. So considering that, we have calculated that it will be 12.5% PAT as compared to 11.7% PAT last year.

So you're saying this year, just the interest component, PAT would be roughly about INR 6.5 crores in addition to whatever business we do this year?

Yes, sir.

Sorry, I didn't understand the export-related question, yes. Can you please repeat the question?

On the export in our calls, we say that we are exporting to 30-plus countries. But there is also the fact that was mentioned that there was a delay in tender because of which our export business could not grow this year, rather we had slight degrowth or something. So is there a concentration risk in our export business that we're exporting to 1 or 2 countries because of which our growth is impacted, number one. And how we play on Q1 last year versus Q1 this year on the exports?

Yes. So this year, we expect to consolidate our business as far as export business is concerned. And Yes. The tenders which we are expecting in Q4 of last financial year, those tenders got delayed, and that has opened in the month of April. So we expect to supply to cater to all those orders from May, June onwards. So that is one thing. And that as Mr. Rahul has said clearly said that, that component is close to around INR 20 crores, INR 25 crores. This year, we don't expect any such delays. So as far as quarter revenues are concerned, Nipun, can you please share quarter-wise revenue quarter 1 versus quarter 1 of this year? So this quarter...

On the export side...

Yes. So on the export side, this quarter, we'll be closing more than INR 20 crores.

INR 20 crores to INR 22 crores.

And what was it last year same quarter?

Last year, Q1 was INR 32.26 crores.

Okay. So if we're doing INR 20 crores, we're degrowing there, right?

No. But in the next quarter, it was INR 11 crores only. So we should compare the half year. Half year was INR 43 crores only. So sometimes the orders are there, it is executed in the next month. So we have to consider that factor.

I'll tell you in that case, what has happened, like when you are awarded with a tender, so there are -- you have to supply in 2 installments. So the first installment is always less. Second installment is always higher. So the major portion of installment will come in the second quarter. Like one tender, we have supposedly we have been awarded a tender for 3 million. So the first quarter, we might be doing around 1.2 million. But in second quarter, we'll be doing around 1.4 million.

Okay. So you're saying that, let's say, for H1 of this year vis-a-vis H1 of last year, what kind of growth are we going to see on exports in terms of percentage?

We are expecting around 30% growth in H1.

Okay, which means that the Q2 has to be substantially higher than Q1 this year and Q2 last year, right?

Yes, absolutely.

Okay. Do we have orders for that? Or are we expecting new orders or tenders to come, which will help us cater to those numbers?

We have some orders in hand, and we are also expecting some more new orders.

As of now, we have around 50% of the orders in hand.

Okay. Here, I would just have a small request that when we mentioned the number of countries and number of profiles that we file, and if our business is a little concentrated in certain geographies or something, it's important that you give clarity on that particular geography going forward as well for investors, because...

Clarity -- I think in the initial talk only, we discussed that the majority of the business will come from 5 countries, like 30% of the business will be derived from 5 countries. It's only like confidential. We don't want to name the countries because there are -- so we have already clarified that our main focus is on only 5 countries where 30% of the business will be coming.

Okay. And is there any reason for delaying EU GMP was expected to be done earlier last year than end of last year?

So for EU GMP, what happened was we were supposed to get an audit in April, but exactly what happened, the new rule have come where earlier there was a line inspection that the auditors come and used to inspect the line. The dossier was not to be filed. You need not to file a dossier at that time. But as for the new rules, you have to file a dossier first. So we have already filed 3 dossiers, and now based on the dossier base, they will be coming for an inspection. So that's a new rule, which has come in place in February, March. So that's why our audit got delayed.

Okay. Fine. And one last question. We were primarily doing oncology and doing 20%, 25% revenue growth. Then we started doing skin care -- went into the skin care line as well. Today, we know it takes about 3% to 4% of the overall revenue of the company generates, right? And now we are -- also have an interest in Nivian as well. Isn't it too much of a diversification or dilution, though you're saying those are specialized line of businesses. Do you see them growing significantly over the next few years?

See, I'll tell you, it's about the bandwidth, right? Once you are doing certain business, the business become an auto mode, right, where you -- as a person sitting there, if you are thinking of on a strategic point of view, so the only -- you cannot -- like you don't have work to do. You have selected the product which has to be developed by R&D. You have selected the product which need to be registered in those countries, you have selected the product where RA has to work and give the dossiers on time, then there is nothing new left, right? So it's about the bandwidth. When you have opportunities, why not utilize those bandwidth and become a better and more diversified company.

Got it. And how does Nivian benefit from this venture with Beta?

So Nivian has a lot of benefits. One is the procurement. Till now, all the procure products are being procured from outside. They don't manufacture the product. That is number one. Beta, we are into this business since last 4 decades. In pharma, we are known to everyone. We can get a product at a much discounted price as Nivian is getting. That is number one. Then the second synergy we find is that the Nivian right now is totally focused on the IVF and the stand-alone clinics. They are not focusing on the corporate hospitals. Like we talk about Max, we talk about Medanta. We have a proper access to these hospitals where we can get these products entered and they can scale up the sales there. Also on the like efficiency side, the logistics and like the margins which they are diluting, we can play a major role in adding up on those side as well.

One last point. Going forward, I hope we'll have investor calls at the end of each quarter. Like last quarter, we didn't have. I understand there would be a transition between the 6 monthly and the 3 monthly results. I hope going forward, that won't be an issue.

Yes, because that was also a new thing for us. And since we were only concentrating on the half year results, but now we are used for this. So we will be trying to deliver every quarter now.

The next question is from the line of Suruchi Parmar from NX Wealth Management.

Just in last con call, because of this reduction of platin sales, you have already revised your guidance for FY '26 to INR 420 crores -- INR 400 crores to INR 420 crores. But now you have closed the whole year at INR 385 crores, and EBITDA margins also declined. So can you please provide explanation to this?

So we completely understand that there was a correction in the sales, but the problem was that we -- in FY '25, what we did was we got our export sales jump where we supplied around 1.5 million, 1.8 million of export goods to those countries where we were awarded the tenders. But this year, unfortunately, the tenders got -- didn't get awarded in the month of December and January. We got those tenders awarded in March. The supply which is now happening this quarter. So that was the major setback which we faced in the last quarter.

Okay. So because of the exports getting delayed, the more revision is there in the sales, correct?

Yes.

And now the exports, that has been streamlined?

Yes, yes, that is on track, and we are expecting 50% growth, at least 50% growth this year from exports. So we did 71. We are expecting to close between 107 this year, 105 and 110 this year.

Okay. And regarding the guidance for FY '27, which you gave in last con call, do you support that or there's a revision in that, too?

So the guidance remains very broad, and that is between we'll continue to grow at 20%, 25% for next 4 years. We want to double plus our sales in next 4 years. This is the vision we have set for 2030. We want to touch around INR 850 crores, INR 900 crores revenue in next 4 years.

And sir, what will be our revenue mix in FY '30, the double of revenue which you are targeting? So can you please guide me through the revenue mix, your branded sales, CDMO exports, API, cosmetology and IVF, how much they will account for in this?

We have uploaded a presentation. It's already there. We have uploaded in NSE so we have given the guidance there, revenue...

Just like to share that this financial year, the branded formulation will contribute around 36%, which will go up to 51% by FY '30. As far as export is concerned, currently, it is 18%, which will go up to 13%. CDMO contribution will be reduced from 39% to 13%.

Okay. Although CDMO accounts for lower margin also in all your other sales, correct?

Yes.

And just one more part. In last con call, you have told about the export growth coming from the product commercializations in Algeria, Mexico and [indiscernible] So that has started, means whatever exports you have got orders is from these regions or...

It has started from these 2 regions.

Okay. So we can expect more coming from these regions?

Yes, yes. So that's why we informed that the major growth revenue will come from 5 countries. So these countries might be a part of those.

Okay. Okay. And sir, the NDDS, which has already been commercialized like magestrol and methotrexate, imatinib. So all these have started giving you revenue or this FY '27 will be the full year revenue for these products?

So for [indiscernible] we did -- it has given a brilliant revenue last year. It has become the #1 brand. Then methotrexate, we have just launched because we -- since we got an approval, we were supposed to get the NPPA pricing from the government. So we just got in first week of April, we have just launched that product. So this year, entire -- this year will be revenue generation with that product. And then with imatinib solution, yes, it will be launched in the next 1 or 2 months.

Okay. So these will come your branded ones or these are your branded products?

Yes.

The next question is from the line of Kumar Saurabh from Scientific Investing.

I would like to understand the marketing strategy like here, we have only oncology now [indiscernible] has also become EBITDA positive. And then the IVF business will get added. And as you said, we'll be taking the IVF products to the corporate hospitals. So do you maintain like the same MR will be selling all these products? How do we manage the MR in these verticals?

Yes. So I was about to answer the same question. Someone has previously asked a similar kind of question about the diversification of the business. So if you see our major thrust is into oncology, wherein we have our own manufacturing and marketing and sales team. right? That is point number one. And the team is very, very experienced. So now what we have done in oncology is we are giving major brand, like we are giving thrust to major brands, top 10 brands. So brand building is happening now. We have segregated the division -- oncology division into 3 divisions. One is hematology, one is supportive care plus uro-oncology, and one is for the solid tumor. So the major thrust will be into oncology only. Now point number two, derma division. Derma division, we have a very experienced GM and the team of managers, which we have, they are also very experienced. So the GM is having experience of more than 20 years in derma segment, plus all the managers who are there, their average experience is more than 12 years. So the major strategy will be retention of these managers so that we can continue to grow at the rapid pace. Dermatology this year, we are expecting to grow by around 50%. Then point number three is IVF business. So IVF business, as somebody has rightly mentioned that the team is very experienced, very dedicated team. They are -- in a few years' time, they are having a market share of around 4.5%, which I said in next 3 years, the market share will continue. 4.5% market share will continue as it is. And the market -- overall market from INR 2,000 crores, it will grow up to INR 3,800 crores. So if we continue to have -- enjoy the same market share of 4.5%, then the business will be more than double for IVF business. So we have a very, very dedicated team for each of the divisions, whether it is for oncology, dermatology or IVF. So even though the diversification is happening in the company, but for every business, we have a very experienced and dedicated team and different marketing strategies. So for oncology, they will promote only oncology products. Derma, they will promote only derma and IVF team is separate. So for all the 3 divisions, we have a separate team, separate managers, separate GMs who will be focusing on these particular segments.

Sir, the next question is currently, I think derma is around INR 16 crores, INR 17 crores of revenue and the EBITDA breakeven. And derma is a very, very good segment from a margin perspective. So in the long run, let's say, 3 years, 4 years, 5 years down the line, as derma grows to let's say, INR 30 crores, INR 40 crores INR 50 crores, do you expect this business also to have similar kind of margin profile like oncology? Like when we will be hitting that 5%, 10%, 15% kind of EBITDA margin band? What will be the milestone revenue points?

Yes. So next 3 years, we have a vision to cross INR 50 crores in derma, which includes majorly -- like the major thrust will be into cosmetology only, not into medical dermatology. And for cosmetology, what we have done is we have tied up with a couple of companies. One is promote area and the second company is [indiscernible] right? And it's a very, very niche segment, and we will be promoting fillers, mesotherapy and premium cosmetology products, mainly anti-wrinkles and patients who are eligible for fillers or mesotherapy, for those type of patients, we will be promoting the premium cosmetology products as well. All put together, the vision is to cross INR 50 crores in next 3 years' time. As far as margins are concerned, definitely, the margins will improve because we are not increasing the field force. We will be increasing the sales. We will be increasing the PCP, but not the field force. So margins will definitely improve.

So what we are anticipating is that the EBITDA margins will be close to 10% to 14% if we are close to sales of INR 50 crores to INR 60 crores.

And very interesting acquisition because IVF is a very interesting space. And sir, recently, one company got listed, which is M2 IVF. And I mean, I'm very new to this field. But when I look at the margin, even when this company was having a INR 40 crore kind of revenue profile, the margins were in 40%. I think it's [indiscernible] IVF. So are there very -- the company which we have acquired versus the company which is there, are these very different business models because our company is 18%, 20% margin profile. So do we have a margin expansion opportunity or there are 2 different businesses in IVF margin profile?

There is totally different. It is totally different. They are into services. They are not into products. We are into branded business.

Got it, sir. And sir, coming to the export business, this last year, FY '26, we got impacted because of the tender delay. My question is the clients which comes out with these tenders, are these public sector clients, private sector clients? What is the source of funding? And what has been the reason for delay?

So these are public sector tenders. Actually, globally, if you see, except India and some 2 or 3 countries, except where there is a share of 50% private market, 50% government market. Otherwise, entire globally, even in Europe also, 90% is a government tender business in oncology, not in oncology, any super specialty. So it depends on the country to country when they call for a tender. So maybe sometimes in India also, it happens. Like in Kerala, if the tender is due in April, they might call tender in like August. It delays some time. So it depends on the country to country and government to government.

Got it, sir. And what is the margin profile of export business? Is it similar to our domestic branded or lesser?

So the older margin until now, what we have been supplying is basically the unregulated markets and the little semi-reg markets. So we were doing around 20%, 21% EBITDA margin in current exports. But we expect the EBITDA margins to grow up to 23%, 24%, 25% when we enter the regulated markets. Right now, our transition is towards the regulated market size. We have -- we are developing 8 niche molecules, not niche -- these are first or second generics in many countries. These will be the first to second generics. So we are targeting those molecules to be registered globally.

Got it, sir. Got it. And sir, last question, last 3, 4 years, our execution has been very, very strong. Just the last year where a lot of things went wrong, like in H1, there were rains and inspections, then the H2 when we are expecting tenders, it didn't come. So I hope that was a transitionary 1-year pause. And again, from your commentary on the export looks like to be very good.

See, I'll tell you, sometimes the situations are beyond control, right? We used to do around INR 30 crores, INR 35 crores business from platins only. not only we, the entire industry, the entire oncology treatment depends on platin. Today, doctors, hospitals, they are starving for carboplatin. The chemotherapy starts from carboplatin. But unfortunately, in India, the carboplatin NPA price is INR 2,850. And the costings which company are getting with carboplatin is around INR 2,300, INR 2,400 as of today. So there are no margins for hospitals. You have to give 20% to the retailer, 10% to the wholesaler. So these are things which are beyond control, right? But now in last quarter, we laid down certain strategies where we could manage to get 10% growth as compared to quarter of December. That was less of platins, and we were supposed to get some orders from exports, we didn't get, but now we are getting that. So the total thing has been laid down. We are focusing on the other molecules where this sort of issue will not come, whether it's branded business or whether on the export side.

The next question is from the line of Komal Iyer from NBG Invest.

Yes, sir, I wanted to know about this platin business in continuation of the last question. So you said I wanted to know if you all have spot platins completely.

So last quarter, we just managed to do a very little business of Pins because there are some export orders where we could get margins where there was not an NPPA blockage, where there is no price blockage. So export, there is no MRP. We supplied certain products there, but in domestic, we didn't do any supplies, either for CDMO or for own brands also.

Okay. So if I remember last year, you discontinued platin from probably the third quarter onwards. So this year, will it have impact in the fourth quarter sales since we have stopped platin. So last year, first quarter will have platin sales and this year fourth quarter, again, those sales would have stopped.

So the platin sales will not make any impact. And we have laid down strategies so that the platin sales can be fixed up with the other products. So we are more focusing on the other product side, and the platin will not be making any huge impact on our growth.

Okay. So you are covering up with other products in this year, first quarter or this year, we will not have any platin sales?

So we cannot say that we will not be having any platin sales. Yes, the export sales will happen because there is no MRP. But as of today, our strategy is very simple and very clear that even in export also, we are not focusing on the platin. We'll be focusing on the other high-margin products.

Okay. I wanted to know about the CCB conversion at what price it is expected to happen in May?

Nipun?

Ma'am, the CCD conversion, I mean, the price has already been fixed. It was INR 1,643 when we allotted this CCD conversion. The face value will remain the same, INR 10, INR 1,633 will be converted into security premium. So this will happen.

Ladies and gentlemen, that was the last question. I now hand the floor over to Mr. Rahul Batra for closing comments.

Dear all, thank you so much for joining this call. I know that there has been some delayed progression in the sales. But yes, we are committed. Our team is committed, and we are here to poise up growth for -- to achieve our Vision 2030. Thank you. We'll see you in the next half.

Thank you very much, sir. On behalf of Beta Drugs and Phillip Capital PCG, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you.