Gufic Biosciences Limited (509079) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q4 and FY '25 Earnings Conference Call of Gufic Biosciences Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Ami Shah, Company Secretary, Gufic Biosciences Limited. Thank you, and over to you, ma'am.

Thank you, Steve. Good evening, everyone. I, Ami Shah, Company Secretary, welcome you all to Gufic Biosciences Limited Earnings Conference Call for the fourth quarter of FY '24-'25. We have with us today Mr. Pranav Choksi, CEO and Director; Mr. Devkinandan Roonghta, CFO; and Mr. Avik Das from Investor Relations team to give the highlights of the business and financial performance of the company. Before we begin, I would like to say that some of the statements that will be made in today's discussion may include certain forward-looking statements, which are projections or estimates about future events. This estimates reflects management's current expectation about future performance of the company. These estimates involve a number of risks and uncertainties that could cause our actual results to differ materially from what is expressed or implied. Gufic does not undertake any obligation to publicly update any forward-looking statement, whether because of new confirmation, future events or otherwise. We will now begin the call with the opening remarks from Mr. Avik, followed by a financial overview from Mr. Roonghta. Thereafter, we will have our forum open for the interactive Q&A session. Over to you, Avik.

Good evening, and thank you for joining. I'll provide a concise update on the quarter, focusing on why we took certain actions and how they position us. I'll start with critical care cluster. We shifted our sales teams to concentrate on hospitals with greatest prescribing potential. This rightsizing ensures that each call delivers maximum impact, strengthening relationships in ICU and emergency settings where timely antibiotic access is critical. We conducted over 125 engagements that reached to almost 1,500 consultants on antimicrobial stewardship and sepsis control. By anchoring our message in real-world evidence and hosting a national KOL Board advisory, we refined our product support programs, so clinicians see our offerings as both reliable and cutting edge. Our World Sepsis Day initiative engaged almost 3,000 HCPs to spotlight Thymosin Alpha's role and we launched Eclin and IVIG in phases using market service to guide broader rollouts. These steps reinforce our science-first image and open doors for formulary placements. Cavim now leads the Ceftazidime Avibactam segment in 195 centers, and we hold top positions in antifungals such as Caspofungin and Micafungin range. These share gains validate our focus and create a springboard for new critical care introductions in the coming year. I'll touch upon our Sparsh cluster, which is the direct-to-hospital segment. We tested our contrast media offerings with key hospitals to gather early feedback. This entry strategy allowed us to confirm product reliability before scaling. And this will be an essential product line given the shortages in this product segment from time to time. By initiating internal trials and independent comparative studies for contrast media, we are gathering data that will convince procurement teams to switch from incumbents. This evidence-led approach addresses clinician concerns head on and accelerates future adoption. Looking ahead, the full launch of our in-house contrast media range will further boost Sparsh's profile and drive incremental volume. I'll come to our fertility cluster now. Dr. Rajeev Agarwal joined us to leverage his decade-long IVF experience. His mandate is to sharpen our scientific positioning, particularly for gonadotrophins. Having a recognized leader elevates our credibility in a highly relationship-driven specialty that the IVF segment is. We deepened collaboration with reproductive medicine communities to highlight Guficin Alpha's novel approach for recurrent implantation failure. Simultaneously, multicentric trials for Guficin Alpha and Supergraf, which is India's purest HMG are underway. This data will solidify our claim against established peers and drive formulary access. As we complete these trials, our plan is to broaden IVF practitioner engagement using robust clinical evidence to convert the initial interest into prescriptions. This puts us in a strong position to capture share in rapidly expanding fertility market. Now coming to Aesthaderm, Mr. Vijay Kumar with extensive Galderma pedigree now leads Aesthaderm. Our flagship Stunnox, which is India's first domestically produced Botulinum Toxin Type A has treated 50,000 patients since launch, demonstrating strong practitioner and patient trust. In the quarter that went by, we held almost 112 training sessions and upskilled 608 doctors, ensuring consistent application and optimal outcomes. We also launched local clinical studies to generate Indian patient data crucial for building conviction in a market where real-world evidence drives adoptions. This dual focus on training and evidence means practitioners feel confident prescribing Stunnox, which should accelerate adoption. As we scale, we expect to expand share in a fragmented aesthetic market that values quality, affordability, and outcomes. Coming to NeuroCare, we are 100% dedicated to expanding Botulinum Toxin use in neurology, covering chronic migraine, spasticity, dystonia and new areas like neurosurgery and pain. This singular focus of this division simplifies massaging and maximizes specialist engagements. Our dedicated team now covers new major regions such as Lucknow, Chennai, Cochin, Pune and has expanded their outreach in states of Gujarat, Punjab, Jharkhand and Uttarakhand. This broader presence underpins our 17% market share, which is up by 10 percentage points on a year-on-year basis. Through hands-on training, PG programs and speaker sessions at key scientific meetups, we ensure the neurologists, neurosurgeons and pain specialists understand both the clinical protocols and patient selection criteria. And we intend to drive growth for NeuroCare through upgradation of knowledge as well as skills of the existing practitioners. Coming to Zenova division, we merged Spark and Stellar to eliminate overlap, rationalize territories and concentrate resources on our highest margin brands. This ensures that each sales call is more productive and each territory is fully optimized. Rationalizing low-yield headquarters and reallocating manpower led to lower overheads without sacrificing coverage. We now have a very specialized field force focused on Stretchnil, Dydrofic, Vonobase and QF3, which is our top contributors in this combined division. On the -- in Healthcare division, we concentrate on high incidence, underserved categories like cervical, spondylsis, osteoarthritis and gut, while extending into wound healing through our brand WH5 Gel and GI Health through molecule launch of Vonoprazan. This alignment directs resources towards segments with clear demand and differentiated needs. We ran almost 475 targeted screening camps, identifying 3,200 at-risk patients. By converting these referrals into Gufispon and Baryl-DX prescriptions, we accelerate patient uptake and reinforce our therapy protocols at the ground level. We also patented WH5 Gel, making us first movers in Ayurvedic wound healing and our next-gen anti-arthritic oil is all set for a pilot launch in the coming quarter. Now I'll move to our International Marketing division. Appointing Dr. Rajasekar as President, International Business brings his 2 decades of MNC expertise to accelerate our push into regulated and emerging markets. We signed a landmark distribution agreement that now covers almost 17 LatAm countries. This will enable us to rapidly launch our products in those markets. We secured 7 product approvals in Myanmar, Sri Lanka and Cambodia. The THAI FDA GMP Extension for Unit-2 underscores our manufacturing quality, and we hope it will unlock new registration opportunities in the future. Winning the Sri Lankan tender for 2 complex injectable products demonstrates our competitive pricing and reliability. We're also setting up rep offices in Vietnam and evaluating a presence in Philippines that will lay the groundwork for deeper local engagement in the future. So to conclude, across every division, our guiding principle has been targeted execution backed by evidence. We've realigned sales forces, strengthened our KOL partnerships, built scientific credibility through trials and expanded in key geographies, both domestic and international. These moves are designed to convert our near-term investments into durable market leadership and better realizations in the coming quarters. I'd like to update you all on the Indore facility and its near-term impact on our profitability. As we have communicated in our earlier calls, in order to ensure full compliance with evolving export market requirements, we extended certain media fill and aseptic process validations. This broadened our validation scope to include additional worst case simulations, more extensive documentation and deeper site qualification steps, while it pushed our commercial start by a few months, but it definitely derisked future audits and customer approvals. The plant was capitalized in Q3 FY '25. So in this quarter, we are absorbing higher fixed costs of salaries, utilities, depreciation and interest. As a result, Indore adds roughly INR 8 crores of incremental depreciation and interest in Q4. We expect EBITDA breakeven from Indore in FY '26 when incremental interest and depreciation will total around INR 36 crores for the full year. To accelerate ramp-up, we've made some initiatives. We booked 16 major customer audits for our CMO business. We've notified 5 global regulatory inspections with mock inspections already underway. We've initiated technology transfers for 33 SKUs from Navsari and 18 site transfers from other CMO partners. We are also in advanced stages of completing our development of 15 new products at our Indore R&D center. So our immediate focus is on completing all domestic customer audits and initiating stability batches for each product, while simultaneously finalizing dossier filings for international markets to trigger global audits. We have headroom to accept additional domestic orders today, but excessive production could increase wear and tear during this critical regulatory audit phase. Thus, we'll ramp up to approximately 30% capacity, achieving EBITDA breakeven this year while prioritizing asset integrity ahead of global inspection. This measured approach ensures Indore transitions into a bottom line accretive facility by FY '27, backed by both domestic and international approvals. With that, I'll hand over the call to Mr. Roonghta, our CFO, for update on the financials.

Thank you, Avik. I will go into highlight the financial results of Q4 of '25 versus Q4 of '24 and full financial result of '24 versus the financial year of '23- '24. Total revenue for Q4 of '25 is INR 205 crores compared to Q4 of '24 was INR 195 crores. EBITDA for the current Q4 is INR 27 crores compared to INR 35.1 crores. There is a downfall because of the basically Indore absorbing of fixed cost of interest, depreciation and salary wages. The EBITDA margin for current Q4 is 13.17% compared to Q4 of 18%. The profit before tax for Q4 is INR 10.8 crores compared to INR 27.1 crores of Q4 of last year. The PAT margin has been 5.27% for Q4 of '24-'25 versus Q4 of '23-'24 was 13.9%. The profit after tax for Q4 is INR 8 crores compared to Q4 of last year 20%. PAT margin for Q4 is 3.90% compared to Q4 of '24 of 10.26%. Now I will highlight the financial result of whole year '24-'25 versus '23-'24. Total revenue from the operation is INR 819.8 crores compared to INR 806.7 crores. EBITDA for the whole year is INR 138.6 crores compared to last year INR 148 crores. EBITDA margin for current financial year '24-'25 is 16.91% compared to 18.35% last year. The profit before tax for current financial year '24-'25 is INR 94.4 crores compared to last year 115.7%. The PAT margin for current financial year is 11.52% compared to 14.34% last year. The profit after tax for current year is INR 69.9 crores compared to last year INR 86.2 crores. Profit after tax percentage for current financial year is 8.53% compared to last year 10.69%. This major drop in the Q4 results as well as the financial year '24-'25 versus '23-'24 is mainly because of the Indore capacity capitalization where we absorbed additional cost towards fixed cost towards [ salary wages ] manufacturing expenses as well as interest and depreciation. Thank you.

[Operator Instructions] The first question is from the line of Vishal Mehta from Oaklane Capital.

Just had 2 questions. One is could you talk about the scale of the Botulinum Toxin as on date as in what are the revenues and what are the profit numbers for FY '24 and '25? We've spent a lot of time trying to set up the market itself. And how do you see this scale up over the next 2 to 3 years?

Yes. Pranav here. So just to understand your question, Vishal bhai, that what is the total market size and how much have we penetrated? And what do you see the market size expanding in the next 2 to 3 years? Is that the question?

Actually, I was asking more of [ Gufic ] scale. I mean if you could help us with the market size also, it will be beneficial. But what...

Gufic scale in terms of manufacturing or market penetration.

Revenue and profit -- Revenue and profit today and where do you see that in the next couple of years?

So I'll just start with the market also. So the market that will help you to understand our scale and what is our penetration and all that available. So the market is divided into 2 parts. One is the aesthetic and the next is the neurological. So even though globally, it is much higher market, India for a population of our size, the market is still around close to 72,000 to 75,000 vials per year for aesthetics and around 55,000 to 60,000 vials for neurology. We have already reached 9% market share in terms of aesthetics. And in neurology or therapeutic indication, we have reached approximately 15% to 16% market share. So that normally contributes to approximately, I would say, a little bit less than around 3% of our revenue today, 3% to 4% of our revenue of Gufic is here. The gross margins on this products, of course, are much higher in terms of 80%, 85%. But the amount which we spend on clinical trials, on marketing spends and others, which are still close to around 40% to 45% of our annual revenue, apart from salary and expense and distribution and other overheads. So that's how the thing is. We grow by almost 50% to 55% -- I mean, maybe if you see year-on-year, this year, we must have grown on around 50%, 55%. The year before was around 70% to 72% because the scale is quite small. So that is our overall -- our presence in the market. Now with the -- I mean, with Vijay Bai coming in from Galderma and along with Dr. Jyoti Jha and other team members, we want to first reach a 20% to 22% market share this year in aesthetics and in neurology, we hope to come to at least 25% to 26% market penetration. We feel the market itself is growing by only 22%, and that is where we need to put a little more effort in terms of expansion. Two things are there. In neurology or therapeutic conditions, the insurance still doesn't cover this Botulinum Toxin use in therapy. And that is where we have been trying to talk to some insurance companies and others to take it for. So aesthetic market will definitely evolve much faster because there the headwinds of the doctors pushing the patients also and now awareness and other things we are also investing on in terms of creating more awareness via social media also and via whatever mediums where we are permitted as per law to create more awareness via doctors. However, for therapy, it might still take more time because there, it might be more inclusive when the insurance starts taking care of it. So affordability can be, also an access. But I still feel this is -- we hope that we can reach INR 100 crore figure in terms of revenue in the next 3 years max for toxin as a whole.

Great sir. That's very encouraging. Also, we've got some good inroads in the international business. Where do you see that stabilizing in the next 2, 3 years? I mean what is the targets we've set for that?

For toxin you are saying or overall, you are saying?

No, no, overall for Gufic.

That makes sense. Yes, because right now for toxin, we are not focusing on the international market, it requires a separate manufacturing infrastructure, which we have not considered in the near term in the next 3 years at least. So coming to the other products, yes, definitely. So as you -- just -- if you see the numbers also, even though you see a flat top line this year, because we had limited capacity in terms of lyophilized injectables and injection manufacturing, Indore starting a little bit late. International business is something which we feel should gradually move from that 16%, 18% revenue share to close to 25% revenue share in the next 2 to 3 years. Also, I'm assuming as a company, when I mean 16%, 18% of INR 800 crores, we hope that in the next 2 years when we go for the growth of at least 15% to 20% year-over-year of total revenue, 25% of the revenue should be international business itself, aided by Navsari and Indore. So I foresee that at least the international -- I mean, the export business would be at least close to 1.5x to 2x in the next 3 to 5 years.

The next question is from the line of [ Shrikant Parikh ] from Prudent Investment.

Yes. Sir, I just want to understand what was the -- I joined late. So what was the reason for a shrinkage in the margin in this particular quarter? Or this is a one-time effect or this will be dependent on another factors?

I'll request Roonghta, sir, to please reply to this, sir. You can talk to him about the quarter and overall going forward also, sir. So please go ahead.

Basically, if you see the contribution GC margin has been jumped by 2%, but because of the fixed cost of Indore and also increasing in the fixed cost of the Navsari plant. The salary wages has been -- for existing Navsari plant, we have given annual increment, the salary wages has been rise. Then in case of Indore plant, there was a -- capacity utilization was not there. And Indore plant, we have incurred the salary wages cost, interest costs as well as depreciation. So if you see gross margin has been increased, but because of the fixed cost, the profit has come down. And this pressure will be continued for next 2, 3 quarters, looking to the capacity utilization of the Indore plant because fixed cost of interest and depreciation, that is accounting to be around INR 36 crores as a whole year. So every quarter, we have to incur around INR 9 crores. That will be going to have pressure on the margin. And so it will be continued the pressure on the margin for at least next 2 quarters.

Okay. So are we seeing particularly if we talk about the Indore facility, are we seeing a kind of a breakeven in FY '25, '26?

Yes, '25-'26 already Avik has mentioned to you that we are expected to have an EBITDA positive. So EBITDA will be positive. But because of the interest and depreciation, there will be losses at the level of net profit level from the Indore plant.

The next question is from the line of Vidit Shah from Spark Capital.

Firstly, just wanted some clarification on the revenue breakup that you've provided on Slide 6 of your presentation. If you could give us numbers for the domestic international CMO bulk drug business for FY '25 along with critical care and [ infertility ] would be great.

Yes. So if you broadly see the 52% to 53% of our revenue comes from a domestic space this year. That is the domestic revenue. I'll further take you down division-wise in terms of percentage. But -- and around close to 18% -- sorry, close to -- yes, 16% to 18% comes from international markets and remaining around 25% comes from our CMO business and the remaining would be APIs. This is a broad breakup of percentage-wise revenues of overall Gufic as a strategic business unit is what we call. Further, in the domestic space, which contributes to 52%, almost more than 50% revenue comes from critical care. Critical Care, I'm also including Sparsh right now for discussion purposes because it's all having the life-saving injectable space. The next 30-odd percent would be in our infertility or gynec range, followed by a mass marketing range of health care, where the Nutraceutical and the ayurvedic products would be there, those would be another close to I think around 20%. The remaining, like I said, would be the neurological as well as the aesthetic that is the Botulinum Toxin business as such.

Okay. Understood. So from the domestic business, about 50% is critical care, 30% is infertility.

It would be around 25%, to be precise, and another 16%, 17% would be mass marketing and remaining would be toxin.

Okay. Understood. So this quarter, we obviously saw an increase in fixed costs from the Indore facility. But in your presentation, you said a 30% utilization, we should break even. Assuming this facility does about INR 750 crores, INR 800 crores of peak revenue given your INR 300 crores spend, is that to assume that we can do INR 250 crores of revenue run rate in FY '26?

So not exactly. There, you have to understand now the peak turnover has been achieved from Navsari. So whatever major increase in revenue, what you will see this year will be from Indore. But the way we have done the product selection, we feel at least EBITDA breakeven should happen this year. And what you rightly said in terms of even managing the interest and the depreciation, we should be breaking even next year. That's how we would say it. So when we say 30% is when we are committing on even the interest and what you call the depreciation also to be taken care of on a monthly basis. That would happen next year only. This year, only the EBITDA, we would be breakeven and a little bit positive.

Okay. Understood. And in terms of revenue, we've seen fairly flat revenues over all the quarters this year despite Indore coming up in the third quarter. I understand there was some pricing pressures from 3Q onwards. But if you could help explain what's causing -- is it that volumes are also not growing because Navsari is [ chocker blocked? ] Or are we likely to see any revenue growth in FY '26 besides the Indore commissioning?

Yes. So very frankly, if you see Navsari is chocker blocked, only ways of growth has been [ Penem ] and toxin where we have capacity, and that is where the actual growth have happened. And also, there has been a quantity increase also from Navsari in spite of Indore being, contributing in their own way for the last 2 quarters. Now if you see the 800 number of last year and 800 number of this year, there has been almost 25% of our revenue contributed by around 10 to 12 molecules where the erosion of the pricing of those molecules almost happening from 0 to 30 or 0 to 40 or 0 to 50, so I would name them also a Meropenem, then Human Chorionic Gonadotropin, then even Enoxaparin and like that, there are around 10, 12 molecules, which contribute to that 25%. All of them have eroded in terms of the API pricing itself, where the benefits has to be passed on to the market also. Even our ceftazidime-avibactam Cavim brand, even though being a market leader, has gone from a selling rate of almost INR 1,200 to an average rate of around INR 680 to INR 700. So this is also somewhere where the -- even though the margin percentage is intact, but the rupee value margins have got suffered in all these products because of the price erosion, which has happened, which we feel should be the bottoming out. This actually bottoming out happened last September to December 2024. And we -- after that, we have not seen any further drop of prices happening in since the last 3 to 4 -- I mean 4 to 5 months. So we hope that's the most bottom out. So whatever numbers we predict now in this year with the volumes also going up and no further erosion of prices, we have seen the, I would say, the bottom pit last year, and we should see just revenue increase. So you will see the benefit of Indore coming in. Plus, of course, you will see the benefit of Penem block volumes, even toxin volumes and the natural progressive growth of a little bit of CMO moving to an upgraded export business of U.K. and Europe. So with all that, we will see some help in revenue numbers this year. And that's why we are confident that even though Indore not being at 30% this year or even at 40% this year, we should still see an EBITDA breakeven at Indore.

Okay. Understood. And just the last one on the phased rollout of the Eclin and IVIg launches. How big is the market opportunity for Gufic?

So Eclin is basically an add-on to an existing brand, which was having a patent protection where Cipla was the only one who got the patent from Venus. So we feel that there, there will be more entrants also. But since we have taken the early advantage, we feel as a size for us, we are hoping that we can create at least INR 20 crores, INR 22 crore brand from this going forward for Eclim. For IVIg, very frankly, it is not only complementing us in terms of our high-endness, but especially in the neuro space, where we have Botulinum Toxin only. So right now, when my neurocare team goes and experts about tox -- experts about toxin, we are a single product division. And there, IVIg is also one product which we can actually space to get that PCPM high and get some costs taken care of. It's a product basket expansion, keeping in mind to take care of overheads. And that also we feel with the numbers should at least help us for that INR 10 crore mark going forward in that NeuroCare division.

Okay. And what's the PCPM that we're doing at Sparsh right now?

Sparsh, we are doing anything around, I think, state-wise, but it's around INR 9 lakh to INR 10 lakhs per month.

The next question is from the line of Nayan Kapadia, Individual Investor.

Yes. My question is actually, it is answered. So I will not take any questions. I don't have any further questions.

The next question is from the line of Shrey Gandhi from Kothari Stock Broking.

My question is regarding the revenue potential from Indore facility, which we're expecting in FY '26 at 30% utilization.

Yes. So we hope to touch close to 20% to 25% for sure, 30% is, of course, where the efforts are ongoing because we are running out of -- we don't have capacity since last year in Navsari. So again, using the same logic, assuming that the total potential of Indore is at least same as Navsari. So that is where we look at anything around INR 700 crores to -- so let's say, on an average, INR 800 crores mark is the capacity of revenue which can be extracted from Indore. So we hope that anything around INR 100 crores to INR 150 crores bare minimum we need to extract from Indore this year.

Okay. And this peak revenue which you saying close to INR 800 crores, INR 900 crores...

Yes, that would be again that product mix and all that. But yes, let's see the average price of a vial what we achieve in Navsari. I'm just using that as a projection and keeping that INR 800 crores around plus or minus INR 50 crores as the revenue projected.

So this will be achieved in FY '28 or FY '27, the peak revenue?

I think '28 is a better bet because we have a lot of, I would say, registrations and processes. International market, what we are mostly trying to cater from Indore would be the regulated market. And that is why we hope that '28 should be a good time where we can see at least majority reaching to at least close to 70%, 75%...

This is mainly because after getting U.S. FDA approval or...

Even U.S., EU, the product line also plus we always have seen in certain markets, there are always like what we saw last year in terms of the pricing -- API pricing and intermediate pricing going up and down. So always, I would not link everything. But as a safety forward-looking statement, I would say that 28%, we can achieve 70%, 75% of that revenue, even keeping in mind all these parameters, factors which might not be in our control. That is how we normally work. Of course, internal numbers are much more aggressive. But just to talk to investors, we normally say that, yes, 28 would be at say 70%, 75%, yes.

Okay. Got it. And my second question is regarding debt repayment. Are we looking for debt repayment post EBITDA breakeven for Indore plant.

I think already -- I will request Roonghta sir to talk about it. Already repayment of debt has started from last year. But to be more precise, I think Roonghta sir is the best person to answer. Go ahead, sir.

Basically, we have taken a loan of INR 160 crores for Indore plant. That is INR 100 crores we have taken from Saraswat Bank and INR 60 crores we have taken from HDFC Bank. There is a 2-year monitoring period. The loan has been started, repaying from 1st April 2024 and already 12 months -- 12 and -- 16 months repayment has already been done.

The next question is from the line of Shrikant Parikh from Prudent Investment.

Sir, just one question on the Indore plant itself. Fully -- being fully utilized at FY '27 -- '26 and '27, what would be the top line which we are expecting from it in a general sense in a normal situation?

We just answered -- the last gentleman asked the same question. So just to again tell you but no problem, I don't mind answering once again for you, so there's no ambiguity. So we hope that by 2028, we can reach to 70%, 75% of capacity utilization. Always, there will be challenges of environment and other regulation and all that. But like I said, we foresee the max revenue from -- I will not say max, the most optimum max revenue should be around INR 800 crores, which we don't -- we hope that in the next 4 to 5 years, we can achieve that because this requires a regulatory maturity also of the plant, the registrations of the products. Every country like U.S., Europe, others take at least 18 months to 24 months to take it, like a country like South Africa takes almost 30 months sometimes. So keeping all these factors in mind, all that work has started from October 2024. We already have got [indiscernible]. We already got 2, 3 countries like from Middle East who have approved us now. We are hoping for Saudi audits this year. We are hoping for EU audit by the end of this year, U.S. audits next year and then the filing of those years. So the maturation and the entire maturation and time is almost 2 to 3 years, and then we can start getting commercial revenue. So I still feel '28, '29 is where you should see the actual peak from there.

The next question is from the line of Rahul Girish Shah from Glostar LLP.

My question is again pertaining to Indore facility only. I would like to know, Navsari is already fully utilized. And Indore in your presentation, you said that you are doing some validations for future. So I would like to know, isn't it possible to give certain part line production to help out the growth and take out the expenses also? Or is it that the whole plant has to go validation without revenue? Can you explain in a bit more...

Yes. So I think I'll just tell you where the confusion is. The revenue generation has already started from Indore. It's not that it's working on a 0 revenue model as of now. From October to December 2024 quarter, the production had started December for the first month of some revenue. I mean -- and then we saw in March some more revenue. So right now, as you rightly said, the first process was that we are doing tech transfers, which started from October onwards and even before that, for that matter, where validation and qualifications were happening. So we took -- we have 4 lines in Indore, lyophilization -- 2 lines of lyophilization, one line of ampoule and one line of vial, where we started validation of multiple products, like Avik also mentioned in his start and it's mentioned in the presentation also, 33 product tech transfer had been initiated. Out of that 18 have been successfully done or 15, I believe, 15 or 18 have been successfully done. So the revenue -- it's not that we are running without revenue. Even this year, we will definitely see at least a minimum INR 100 crores to a maximum INR 150 crores revenue coming out of Indore, which might be either some capacity, which is not being done in Navsari will be pushed there plus some new, I would say, organic business completely, completely starting from Indore for some of our clients. So mix of both. And -- but yes, one thing for sure, most of the revenue this year will be domestic market-centric. International market revenue would start coming by the end of this financial year and majority of next financial year. So that is how we would look at that.

The next question is from the line of Yogansh Jeswani from Mittal Analytics.

Ji, I have one question on your fertility segment. So last con call, you had mentioned about 2 of our products, Guficin Alpha and Supergraf. And we had mentioned about the clinical trials that we are doing in one of these products, and we had enlisted several patients. So could you just help us give us more updates on the progress of these 2 products? Should I repeat my question?

I just got disconnected by mistake. So I got your question. So your question, if I'm not mistaken, was Supergraf and was it Urofollitropin alpha?

Yes, yes, sir.

Yes. So the Urofollitropin alpha is basically our recombinant FSH, which will be -- we'll be initiating the clinical trials for DCGI or the CDSCO first. And then we hope to get approvals next year. It normally takes 2 years to get the approval. So that process is already on. So those clinical trials will be done purely for registration and against the innovator for getting in India. So there will be no commercial revenue seen for that product until end of next year. However, for Supergraf, of course, the trials have been initiated plus not only at 1 center, we have done 2 different set of trials. We are very happy that one of the big centers of India also has agreed to take the product on trial against their standard of care, which is again an imported innovative product. So we hope that these trials will happen side by side, and we should have some results by the end of this year for Supergraf. In spite of the trials happening, a lot of doctors are using the product already because it's already being currently sold in the market, and we are seeing good response, and we see that division also of [indiscernible]. It's a part of the infertility segment, but it's a division which has 33 people. They have -- they are almost growing by around 10% to 15% month-over-month. So this is also doing quite well, at least in the last 3, 4 months, we saw that delta. So we hope that at least there will be a good enough jump of Supergraf this year itself in the revenue.

Okay. So sir, in terms of any commercial numbers that you can share with us on the potential of Guficin Alpha, which might come in, say, 1 or 2 years down the line? And similarly, what would be the contribution for Supergraf?

So now this third question, Guficin Alpha is a third product, which is our immunomodulator for recurrent implantation failure for which -- and also for endometriosis where we have ongoing trial with DCGI. So that third product, we hope that the market itself has to be created because right now, there are other standard of care of recurrent implantation failure. So we also are going to the government and asking them for approved indication. So we can -- because that we need to do some trials before that. And that's the third trial which we are doing for that third different product. So we still feel that it's a concept which is being established. However, at least we can reach to close to INR 8 crores to INR 9 crores mark in this year would be great for Guficin Alpha as such. So that is also with the same 33 people team. So this 33 people team of [indiscernible] sells Guficin Alpha and Supergraf. And there, we see Guficin should contribute to come to INR 8 crores to INR 9 crores, bare minimum this year.

Okay. And then sorry, I was a little confused. When I asked the question, I was asking for Guficin Alpha and Supergraf only...

That's what I thought. I think Urofollitropin is our future product. That's why even I was confused. But no problem, anybody, you got your answer for all 3 of them. So anything else you'd like to know?

Yes, sir. Sir, one question on the contrast media side. We've mentioned that we have made a soft launch. So if you could just talk a bit about this soft launch, how is the progress? And what is our expectation from this? And this product have we launched from the Indore facility or from Navsari.

Yes, exactly. So right now, the first few batches, of course, are small batch sizes, so we took it from Navsari last year. And when I mean last year means in November, December 2024. And we had got these samples made to be given to certain high-end, I would say, imaging centers around India for getting the feedback, whether -- because most of them use GE's product, which is an imported product. And they always had issues with some other products available in the India market. So that's why a lot of people have been asking us for a product which has a quality compared to GE. So we are quite happy with the results what we got. We did the final batch of trials in April 2025. And last report was, I think, was received by 16th May 2025. So now we officially will be launching this product in the month of June 2025. And they will be made in Navsari till this last batch. And from July onwards, they will be shifted to Indore because Indore already our other batches are being tech plants and every technology transfer takes time. So Indore will normally start when the batch sizes goes to minimum 15,000, 20,000 per batch. Right now for 5,000 batches we are sticking in Navsari only because in Navsari, at least for liquid filling, we don't have capacity constraints. Lyophilization is where our major capacity constraints are there.

Okay. And sir, in terms of revenue potential and margin of this, if you could talk a bit.

Margins would be like a critical care thing, not -- gross margins would be around anything around 50%, 55%, not more because they are iodine-based products where the iodine pricing are very, I would say, erratic depending on the supply which comes from South America. However, in terms of volume, it has a good market space, even though it's not captured in IQVIA. Based on the import data and what we could see, we hope that as a contrast media basket should at least remain -- become a 5% to 6% contributor in the entire critical care segment things down the line in the next 2 to 3 years. So that is what it is. So anything around INR 15 crores, INR 20 crores is something we minimum feel for the iodine products. Also in the future, we'll be launching some GADO-based products also and the basket will expand. So there will be more revenue uptrends seen after we launch those products also.

The next question is from the line of Shivnil Giri from Centrum PMS.

Indore facility -- so I mean your Indore facility is, I think, 2x the size of your existing Navsari facility. And I think you mentioned the peak revenues would be similar to what you're doing right now where Navsari is at peak. So I mean, if you can explain that because I thought that revenue potential would be much higher from there, I mean, for the Indore facility.

So actually, it is 1.3 to 1.5x Navsari. So that's why totally with Navsari and this being added. Of course, I'm not counting the Penems and the toxins and hormones. So if you see Navsari also has Penems, toxins and hormones also contributing, which is not part of that. So if I minus the Penems, toxins and hormones out of Navsari there's an x revenue. And out of that x revenue, we are looking at 1.5x that revenue of Navsari, which we say around is INR 800 crores to INR 900 crores. So if you see the total revenue, what you see right now of Gufic also includes the Belgaum factory where there is nutraceuticals, the Penem line, the hormone line of HCG, HMG, and FSH and also the -- we call the toxin, whatever, even though it's a very small amount, maybe 5% to 7% of the revenue. But all this is part of Navsari. So when we just remove all that and we do, then it will be 1.5x, which comes roughly around INR 800 crores to INR 900 Okay.

Understood. And the Belgaum facility, is it fully utilized? Is that also fully utilized? Or is it...

Yes, that's fully for self-consumption for our [indiscernible] range of products. So still, it is working on 1 shift as of now. If required, we can go to 2 to 3 shifts. So that is mostly for in-house consumption only for tablet capsule nutraceuticals and ayurvedic products.

Okay. And across your divisions, I mean, domestic, international and CMO, can you give us a rank of the margins, like which one is more higher margin and lower margin?

Yes, it will be international first. Second would be domestic and third would be CMO.

[Operator Instructions] As there are no further questions from the participants, I now hand the conference over to Ms. Ami Shah for closing comments.

Well, thank you very much. I appreciate all of you joining us today. If any of your questions remains unanswered, you can get back to our Investor Relations team, and we'll be happy to assist you. With that, we conclude today's call. Take care. Thank you.

Thank you. On behalf of Gufic Biosciences Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.