Thank you. Good afternoon, everyone, and a very warm welcome to Laurus Labs Q4 FY26 earnings call hosted by DAM Capital Advisors.

On the call today, we have representing Laurus Labs management Dr. Satyanarayana Chava, Founder and CEO; Mr.

V. V.

Ravi Kumar, Executive Director and CFO; Mr. Krishna Chaitanya Chava, ED, Head CDMO; Mrs.

Soumya Chava, ED, Generics and Commercial; and Mr. Vivek Kumar, AVP, Investor Relations.

Before we proceed, I would like to remind you that some of the statements made during the call today could be forward-looking in nature, and a safe harbor statement to this effect has been included in the press release that has been shared on the company's website. I hand over the call to Dr.

Chava to make the opening comments, and then we'd open the floor for questions. Please go ahead, sir.

Good afternoon to all our stakeholders. Our company's purpose of chemistry for better living guides us everything what we do.

In 2026, we significantly accelerated our performance, reflecting sustained demand in technology-driven commercial offerings. The transformation of our portfolio is well underway.

The momentum is building as we continue to execute on our strategy with clear focus. In 2026, our business benefited from successful clinical and commercial supplies for complex NCE compounds, ramp-up of supplies of the new launches, and sustained global leadership in antiretroviral therapy, where we continue to service 1/3 of the global HIV population.

We continue to advance our well-recognized development and manufacturing platform capabilities with global customers. I'm confident in our ability that this will further expand business opportunities in coming years.

The company has exceeded 8,200 cubic meters of reactor volume for small molecule API and intermediate manufacturing in FY26. As we progress, we are making significant investment behind important technologies, high-growth modalities, large-scale manufacturing infrastructure to support our client's needs.

Currently, we are managing several capex growth projects, which will be executed in the next two years. 90% of project spend is towards mid- and large-scale manufacturing assets.

I will just make a few areas where we are investing. We are creating a large manufacturing greenfield project, Unit 7, and the first production block will be ready for commercial validation by March '27, and four additional manufacturing during the next financial year, FY28, with a combined reactor volume of over 2,000 meter cube.

Second, commercial-scale peptide manufacturing block will be ready for commercial-scale validation during Q2 of this financial year, FY27. Animal health additional capacities at Unit 10, which is adjacent to LSPL Unit 2.

Fourth, a fermentation greenfield site for our Laurus Bio, Phase 1 will start by end of 2026. Lastly, we are also spending on formulation facility under our Krka joint venture in Hyderabad, and we expect Phase 1 will be completed by mid-2027.

Moving on to our financial results, Laurus maintained its business momentum and delivered robust operational and financial performance for the financial year 2026. The company's revenues were ₹6,813 crore, with a growth of 23% over previous year.

This was mainly driven by significant growth in CDMO business, supported by affordable medicines portfolio, which is generics. Gross margins were healthy and maintained around 50 60% range, and EBITDA margins expanded by 6.7 percentage points to 26.8%.

Our product mix within business division and operating leverage have continued to do well, supporting our healthy margins overall. When we look back at our last six years, Laurus has delivered on successful transformation across both business and product portfolio.

Today, our share of CDMO business has increased from 13% six year back to over 30% right now. The contribution from ARV revenues come down from 67% to 41% in the current financial year, while sustaining absolute sales and global leadership in HIV therapy.

We are deepening our CMO partnership based on consistent supply track record of large-volume API and FDO. I would request Mr.

Krishna Chaitanya to share key updates on our CDMO business.

Thank you. The CDMO business delivered robust operational execution for the full year, clocking at a little over 2,000 crores at ₹2,080 crores.

For the small molecule CDMO, we have clocked a growth of about 38%, with the sales for the full year at ₹1,896 crores. The growth essentially came from late-stage pipeline programs, commercial NCE API supplies to several global partners, and also ramp-up of the growth projects.

For the small molecule side at Q4, our sales stood at about ₹524 crores. As I said, majority of the business has come from the commercial revenues, which are programs that are very early in their commercial journey.

The underlying demand momentum for complex APIs remains strong, driving increase of outsourcing activities with trusted partners like Laurus, which operates in advanced technology platforms, offering leading solutions in both chemistry and biology with large manufacturing capacities. Our small molecules pipeline continues to expand with focus on high-value programs and projects, and fully integrated programs across technologies such as biocatalysis, flow chemistry, hydrogenations, continuous manufacturing of drug products, high-potent APIs amongst others.

There is continued investment into capacity creation at Vizag, and also we are advancing quite well, as Doctor mentioned, on commercial peptide manufacturing capabilities based on customer demand. Coming to Laurus Bio, the bio division reported a Q4 sales of about ₹65 crores.

On an year-on-year basis, that's about 124%, partly due to the lower base that was there last year. If you look at our full-year numbers, sales has increased by about 15%, which is largely along the expectations of the year.

The good part is that this growth is supported by customer revenue diversification and also continued pipeline progress on global accounts, both in our animal origin-free portfolio and the CDMO. Construction work for the commercial-scale fermentation facility in Vizag is progressing well and is along the plan, and we expect the Phase 1 capacity to be operational by the end of 2026.

Now I'd like to request Miss Soumya Chava to share key updates on our affordable medicines portfolio.

Thank you. Revenue from the affordable medicines division, formerly Generics, stood at ₹1,223 crores in Q4, with the momentum sustained on an absolute basis, though the growth has been slightly moderated.

For the full year, the division delivered ₹4,733 crores in revenue, reflecting a strong 18% growth. FY26 growth was driven by higher volumes across ARV and oncology portfolios, along with strong traction from recent launches in developed markets.

We maintained a consistent supply track record despite global supply chain challenges. However, increasing geopolitical disruptions may impact raw material availability and logistics, potentially creating a near-term pressure on OTIF performance across the industry.

That said, the business outlook remains steady. We continue to focus on optimized capacity allocation, improved supply efficiency, ramp-up of new product launches, integrated CMO opportunities, and expanding our footprint across developed and emerging markets, particularly in the non-ARV segments.

The oral solid facility expansion is progressing well, with formulation capacity increased by 20% in FY26 to 12 billion units. On the regulatory front, we have filed a cumulative 92 DMFs to date.

In developed markets, we filed seven dossiers and received six approvals in FY26, taking the total to 94 product filings cumulative. Thank you.

Thanks, Krishna and Soumya, for the overview of Generics and CDMO business segments. On R&D front, overall R&D spending to sales for FY26 was at 4.1%, increased by 10% year-on-year, including our expenditure on cell and gene therapy space.

The spend is in line, and we expect a similar percentage going into the next year as well. We continue to invest in portfolio, focusing on product complexity, scale, and sustainable technology platforms.

Let me share a brief on our quality and ESG side as well. In 2026, the company underwent close to 142 quality audits by multiple drug regret agencies and several customers.

Company has successfully passed audit inspections without any critical findings. We remain committed to advancing quality systems, meeting highest compliance standards from clients and global regulators as well.

Besides, we continue to advance on our EHS ESG initiatives, which is getting sustained recognition from global rating agencies. You may refer to our IR presentation for more details.

To conclude, our business model has proven as resilient, and we remain well positioned to execute on our growth strategy ahead. We will continue to focus on deepening strategic partnerships on integrated capabilities, strengthening technology platforms and ecosystems, advancing pipeline, as well as focused investment into capacity creation that will sustain our success in the long term.

I'd like to again recognize the commitment and efforts of our dedicated teams towards strong R&D and operational execution, enabling continuous transformation of our company. Now I request Mr.

Ravi Kumar, ED and CFO, to share overall financial highlights.

Thank you, Dr. Satya.

A very warm welcome to everyone on quarter four and full-year FY26 earning call. Let me quickly take all through the highlights.

Total income from operations is ₹6,813 crores, with a growth of 23%. For the quarter four, we are at ₹1,812 crores, with a 5% growth.

Despite the ongoing macroeconomic challenges, we have continued to see the high level of demand in our integrated offerings. Gross margin maintained at healthy level of 60%, 60.4%, and for a quarter four, it is at 61.4%, mainly due to better product mix and some of the process improvement efforts.

EBITDA for the year stands at ₹1,826 crores, with a 26.8% margin, which is well in line with our broader outlook. For the quarter four, EBITDA reported ₹523 crores, with a margin of 28.9% due to strong operating leverage.

Profit after tax for the year ₹889 crores, with a growth of 148%, and quarter four is at ₹279 crores. ROCE is around 17.7%, improved from 9.7% for the previous year.

On the capex front, which is a key enabler for Laurus for future growth and also a key focus for the organization now and going forward, we invested close to ₹335 crores for the quarter and ₹1,070 crores for the full year. More than 75% investment expansion of CDMO and CMO capability, rest in common infrastructure like ETP and maintenance.

Our net debt stood at 2. ₹2,285 crores and debt by EBITDA is 1.25 versus 2.3 last year on the back of strong internal cash flows.

Of course, though there is a debt increase in the quarter four, still we are at a 1.25 debt-EBITDA level. On the capital allocation front, our strategy remains unchanged, and we will continue to prioritize investment into high-value business segments to drive near- and long-term growth and returns for our shareholders.

You can refer our IR presentations for more details. Last, actually, because of this crisis today, we are able to manage our supply chain, and we don't have any supply disruptions for this quarter, and we are expecting not to have any disruptions even till the end of June.

With this, I would request the moderator to open the lines for Q&A.

Hi, and good evening, team, and thanks for taking my questions. Dr.

Satya, as we commission and scale the upcoming Vizag 400 KL fermentation, what could be the single biggest source of yield variability from things such as contamination, oxygen transfer, strain stability to even downstream recovery, and how tight do we expect the batch-to-batch variance when we actually commercialize that 400 KL capacity?

I think the initial batches what we're going to take up in our expanded fermentation capacity is non-pharmaceutical, non- food also. It is mostly industrial chemical surfactants and then polymers.

Where the titer is very, very high. See, the biggest challenge in any fermentation, contamination, and we don't have a very long, tedious downstream processing for the products what we intend to manufacture in that facility.

We wouldn't expect any challenges in downstream manufacturing, Sajal.

Right. Okay.

Just a quick follow-up on that one. Clearly we are moving into the world of material sciences and biomaterials.

What does it mean for the steady-state economic model for Laurus? In terms of utilization, yields, pricing structure, and customer concentration?

Which of these kind of variables are most sensitive in achieving the aspirational return thresholds?

The products what are moving to Vizag are from our Bengaluru facility. The commercials are achieved, and we made those products in our 45,000 liters fermenters, and then those are moving to 110,000 liters fermenters here.

We believe that is the optimum size for these products what we are making. This unit will see the early commercial stage production for those products.

We have crossed multiple gates, I would say, in the commercialization of those products. The uncertainty of the commercial success for those products is very, very less.

We have a very good visibility. Once those products are commercialized, we have to move to much bigger facility, and that is not the commercial size for the products what we intend to initially manufacture.

Sure, sure. That's helpful, Dr.

Satya. My second question is so beyond the R2 at Bengaluru and this 400 KL at Vizag, looking at the horizon beyond 2030, if I may, is biotech getting the attention it truly deserves because that's the sort of coming wave.

We may or may not accept it publicly along with the AI, of course. Just to understand the capex better, how much of what we are planning over the next few years, say, three to five years is already backed by committed or highly visible demand versus any speculative capacity we may be building ahead of demand?

Our biotech initiatives spread across many things: biocatalysis, enzyme manufacturing, animal origin-free cell culture ingredients, precision fermentation, cell therapy, gene therapy, fermentation of pharmaceutical intermediates. What we're talking right now in our Unit 4 bio expansion at Vizag is only for the non-pharmaceutical one.

As you are aware, we are also investing in our gene therapy and ADC manufacturing facility in Hyderabad. Our subsidiary in Bombay, they are also investing further in our cell therapy, CAR-T manufacturing.

There are multiple fronts going on, Sajal ji.

Sure, sure. Just a quick follow-up on that one, Dr.

Satya. For the capacities we commissioned about, let's say, two, three years back, where is the utilization level at the moment on those capacities versus what you or the team initially expected?

Are we broadly in line with the utilization for the capacities that went live about two years, three years back or are we below that aspirational threshold or above that threshold?

In R2, our four into 45,000 L fermenters are fully occupied. That is the reason we quickly expanded capacity in Vizag.

We expect current capacity, we expect to manufacture two products. Once the commercialization happens and the first commercial production is delivered, we expect to expand there itself to 1 million liters.

There we have space. One product is downstream without any chemical operations.

One product, we have to do some chemical operations. That also will be done by us.

We don't see any capacity unutilization challenges for the plant which will go online by end of this year.

Super, super. Thank you so much.

I'll rejoin the queue, Dr. Satya.

Thank you.

Thanks.

Hi, sir. If you see our Indian CDMO landscape, some of the CDMOs are getting impacted due to inventory destocking, yeah?

This is common scenario because CDMOs are dependent on ordering pattern of innovator, yeah? More we are concentrated on few products, with more risk of destocking.

Can you say that do we have enough number of CDMO commercial products to say that we do not have product concentration risk and we are insulated from this inventory destocking risk?

In the last 18 months, we delivered three APIs for commercial, and those have patent life of several years, they're very early in their commercial phase. Based on indications from our partners, they gave a very clear forecast for next several years, and we don't see any stocking, destocking challenges for these molecules at this point of time.

Good. We don't have any product concentration, just only single product or two two, three products contributing more in a CDMO, basically.

That's what you're saying?

Not big, yeah. That's what I said, Bharat.

Thank you. Good.

My second question is if you see our yearly performance of our results, last year, our EBITDA margin was 20%, and this year is around 26%. There is an increase of around 600 basis points, yeah?

Majority of this increase is coming from gross margin improvement because our gross margins have improved from 55% last year to 60%. We did not see the operating leverage paying out significantly yet, yeah?

Is it right to assume that the operating leverage is going to play significantly over the next two years?

We expect so, Bharat. Your point is very valid.

Yeah. Operational leverage will come in.

See, we keep on expanding capacities. We are at the border of leverage or deleverage.

Next year, we expect some operational leverage will come, and see, as you observed, our EBITDA margins are going up. Even look at four quarters of the FY26, EBITDA margin continuously kept improving.

If you look at the Q4, it is almost at the 29% EBITDA margin.

Good. Thank you.

I think that's it from my side. Thank you very much, fine.

Thank you.

Thank you for the opportunity, and congratulations for good results. Sir, I have three questions.

Question one, on continuing the CDMO side, if you can indicate that when CDMO transitions to CMO, how does the gross margin and EBITDA margin interplay happens? That's question one.

Question two, on the ARV business, anything on the pricing that you'd like to comment? Which has helped you on the margin side or realization side?

I'll come to the third question based on your response.

Sir, moving Excuse me,

Hello?

Hello?

Hello. Now it is audible.

Sir, I was more referring to the development phase. How does the margin trajectory between gross and EBITDA margin play out if you can educate us on that?

See,

we are not publishing our EBITDA and gross margins segment-wise. That we don't want to do that.

The second, maybe on your ARV pricing, ARV pricing broadly were constant during the financial year. We improved our sales.

We used to say 2,500 plus or minus 200, but we did 2,800. That was because of full utilization of our ARV assets.

Yeah.

Now gross margin improvement is on account of raw material price softening and process improvements.

Yeah.

Okay. Sir, would it be fair to make an assumption that when you move from development to commercial, while your gross margins would be lower in commercial, operating leverage will ensure that your EBITDA margins are similar to the development phase?

Is that a right statement?

I would say whether it is development or commercial, in our opinion, gross margins will remain similar. We make more profit in commercial rather than development, because development, we employ more people during R&D, tech transfer, and all.

I would say whether development or commercial, NCE programs will have similar gross margins.

Will have similar gross margins, and commercials would have a higher EBITDA margin because of more volumes and operating leverage. Fair point.

Just to follow up on this, you indicated three projects have moved from development to commercials. How should we look at next two years of CDMO space given the stupendous growth that we have seen?

Can we maintain that kind of journey given the pipeline that you have and what are the key monitorables you would like to highlight from your perspective?

Krishna would like to answer this question?

I think while we are not giving any indicative numbers, we expect positive growth in the CDMO in the coming years as well.

Okay. What I was referring to is is it hinging on one or three large projects, or it is more even spread so that concentration risk doesn't play out that significantly?

I was more referring to that.

At this point in time, given the visibility that we have, we're not expecting a concentration risk or heavy reliance on one single program. From current standpoint, I think we are fairly well derisked from a concentration perspective.

Okay. Thank you very much, and all the best.

Hello, sir. Thank you so much for the opportunity.

Am I audible?

Yes, you're audible. Yeah.

Okay. Sir, my first question is about CDMO pipeline.

Out of the expanding CDMO pipeline, how much is expected to convert into commercial revenues in FY27? What is the revenue visibility from late-stage molecules?

We're unfortunately not in a position to give you very specifics in terms of what programs are we working on. With that being said, there's multiple late-stage programs that we are currently involved in.

As you're aware, given the clinical nature of the compounds, we can't necessarily accurately put in and say that FY27 will be the commercialization of that molecule or not. The pipeline is quite robust, and we're confident in continuing to post growing numbers in the CDMO side.

Right, sir. Sir, my second question is about the margins.

How sustainable are the current 29% EBITDA margins, and how much is driven by mix versus temporary operating leverage?

We are very confident on maintaining or improving this EBITDA margin in FY27. We are comfortable in maintaining that, yeah.

Sir, my last question, this is just not a very framed question, but kind of it is going to give us some visibility on the growth trajectory of Laurus in CDMO business. When would be Laurus identified as a CDMO company and not as a all categories company kind of?

I think you have to say what is the revenue comes from CDMO segment determines how much exposure is to CDMO business rather than see, we are at more 1/3 of our revenue comes from CDMO business. It's sizable, ₹2,000 crore.

There are not many companies with ₹2,000 crore CDMO revenues which they are well-recognized CDMO partner companies. It is up to see how much reactor capacity, how much R&D capacity, how many programs, what is the size of the program.

Earlier, people used to ask us how many clinical programs you have. Clinical programs may confuse everyone.

One program may give $500,000, one program may give $50 million. Giving a number of programs may not give you any perspective.

The question is is Laurus a strategic partner or tactical partner to customers? We are a strategic partner for many Big Pharma right now.

We have a flow of RFPs, commercial, early-stage, mid-stage, late-stage, commercial. We have a robust pipeline.

That much we can tell you. It is up to the market to gauge how much revenue and who is doing well in CDMO.

Sir, right, sir. I obviously, I am with you in sense that we are bigger than quite a few companies in the CDMO space.

When we compare ourselves with ourselves, what would be that year inflection point?

One good thing we are happy, most of our clinical programs are APIs.

We

are not doing RSMs or early-stage. Either we do advanced intermediates or APIs.

That way, the sustainability of our customers and our offerings is much more longer than offering very early-stage intermediates or RSMs.

This was very helpful, sir. Thank you so much, and all the best.

Thank you. Thank you.

Hi. Am I audible?

Abhijit, yeah.

Yeah. My first question is, what is the asset turnover currently?

Ravi,

asset turnover ratio? 0.89.

0.9. 0.9, yeah.

0.9. Okay.

Considering this growth for the year, I think overall CDMO business has grown 20%, and it's reached a good base at the moment. What is the trajectory going forward?

Can we expect this growth momentum to maintain, or do you see some sort of lumpiness or not? Because as another analyst mentioned, there are other CDMO companies which are talking about destocking and a couple of variations in funding for alternative medicines, keeping that in mind, will you see lumpiness in the earnings?

If you compare year-to-year, we expect a good growth in CDMO segment. There could be lumpiness quarter-on-quarter, but we don't expect any challenges for us to record growth in FY27.

Okay. I think Mr.

Ravi Kumar mentioned that your EBITDA margins have gone up because of operational changes in the input costs and other stuff softening, right? I have two questions on this regard.

Now, because of the geopolitical situation, etc., do you see any challenges in the next few months going forward in the operating costs to go up because of the raw material prices, etc.?

In quarter four of FY26, some impact was there because of the solvent price increased. I can tell you, our production hasn't been impacted so far, and we have enough visibility that in the next three months, we don't have any challenges of curtailing our production because of higher prices of solvents or the availability of solvents.

There will be some pressure, but as our mix is going, operational leverage is going up, more capacity utilization, we will able to weather that challenge well. Abhijit.

Okay. With regards to this gross margins going up, your gross margins right now is 61.4%.

As and when the CDMO contribution of the business goes up, can we expect this to go substantially higher? I think this is the highest gross margin since the one-off CDMO contract that happened in '21.

Am I correct?

See, we are very comfortable to say we'll maintain gross margin for sure,

yeah,

despite of challenges on the solvent pricing and all. We are confident.

That's good to know. One last question with regards to the peptides opportunity that is available.

Are you guys looking at the weight loss sector or are you looking at overall peptide revolution that is going around? Is it the breakthrough is near-term or is it still substantially time away or etc.?

Just insight, please.

Krishna, want to answer?

Without diving into too much details, we are currently working in several sectors in peptides, including weight loss and a few other sectors. With that being said, there are some medium-term opportunities that we're already collaborating on.

Of course, there's several other opportunities that we're also in active discussions with. As soon as we have something meaningful coming out of that investment, we will certainly make our partners aware of, yeah.

Okay. Thank you so much.

Congratulations on the great set of numbers. Thank you.

Thanks for the opportunity. Am I audible?

Yes, sir. Sir,

just firstly this, if you could give the breakup of ARV business into API and formulations, please?

It is 2/3, 1/3: 2/3 API, 1/3 is roughly formulations. We're not giving exact split, but it is broadly that, 2/3, 1/3.

Yeah.

Okay. Effectively, just trying to understand, the non-ARV formulation business, has that grown or declined for the quarter?

Actually, non-ARV formulations is going up. Yes.

Correct me if I'm wrong, ₹683 crores of ARV business for fourth quarter '26 effectively, and you're saying 2/3 is formulation, which means ₹450 crores of formulation business, is that the way to understand?

No. 2/3 is API, 1/3 is formulations.

Answer was for the overall year, I mentioned. It is around that number.

It may change one month, one quarter, but broadly, 2/3 of ARV revenue come from API sales, 1/3 comes from our own formulation sales.

Got it, sir. On the balance sheet side, how much would be the customer advances at the end of FY26?

We not disclose specifically, Tushar.

Has that increased compared to last year directionally While the annual report will disclose that, but

On full-year basis, there is an increase.

Okay. Good.

That's it from my side. Thanks.

Thank you. Thanks.

Thank you, sir. Congratulations first.

One question on the CDMO side. Was there any revenue from the crop science business in FY26?

Krishna?

There has been some, but very marginal, I would say. There has been some.

Okay. Animal health is still, I would say, not too meaningful yet in the CDMO side, or now it is meaningful?

Basically the context is FY27, can we see meaningful contribution from crop science and animal health, both?

In the animal health space, within this year as well, we've had some meaningful API shipments that we had undertaken. In FY27 also, we'll see a good contribution from that space.

In the crop science segment, I think we need a couple more financial years to really ramp that up. We have a few ongoing projects that are in the registration phase or in the development phase.

Yes, yeah.

Okay. On the electronic side, one customer that we have, I think as I understand, it's still in the development stage, but they have got the breakthrough some months back.

Any visibility on the kind of shipment or the delivery from their side? Any contract have you signed with them?

We are in active discussions with them, but as you've rightly said, it's still under development phase and application phase. It will take a few more quarters for us to see the actual demand outlook from them.

Perfect. One question on the formulation side.

New facility that's coming up and going to commission in June, so that's for the new CMO contract, right, that we have? The 3 billion tablet contract?

That's for an existing partner. Most of the capacity came online, and we are using it commercially, that additional capacity.

Tertiary packaging capacity will be coming in June, right?

Most of the proposed capex has been implemented, and then we started generating a revenue out of it in the fag end of the year.

Okay. Okay.

Basically, the majority revenue will start from Q1?

Yes. Okay.

Okay. Perfect.

Thanks a lot.

Okay. Thank you.

Good evening, sir. My question is related to fermentation capacity.

Given that we have acquired Richcore in 2021, why are we not able to scale it up to 2 million? If you are able to scale it up to 2 million, what could be the revenue?

Hello?

See, we thought we'll expand to 2 million, but we are doing in a phased manner. We have 250,000 L right now.

By end of this year, another 400,000 L will come. That facility can accommodate another 600,000.

Overall, we're inching towards that number. See, if you look at when we acquired them in '21, majority stake, their revenues were about ₹50 crore.

Now they are gone significantly. We're closer to 1 ₹185, ₹190 crore revenue with ₹35, ₹40 crore EBITDA levels now.

Significant improvement happened. Creating capacity takes its own time.

See, R1 to R2, it took one year. R2 to R4, it took two years for us to create that capacity.

We are gauging the market dynamics there, and we have interesting projects. I think we'll update you as and when we have significant information on that.

Sir. Thank you.

One more question. It's related to Amplia Therapeutics.

I'm not sure if you are aware that they stopped this Amplisity project. Are we supplying any API to that project?

Any customer-related topics, we don't necessarily want to comment from our end. Unfortunately because of confidentiality terms, we are not able to comment.

Okay. Thank you.

Thank you, sir. All the best.

Thank you.

Thank you for the opportunity.

Okay. Am I audible now?

Better.

Yeah. I actually had a few questions.

The first one being what will be the capex and gross debt outlook for FY27 and '28? As we had indicated earlier a ₹1,000 crore capex, and what can be the effective tax rate considered for the year?

Effective tax rate will be around 25%, 25 to 26%, depends on the standalone is definitely 25%. Then capex guidance is around ₹3,000 crores in two years' time.

Although we said ₹1,000 crore earlier, now depending on the prospects, what we need capacity and what projects in front of us, we have increasing our capex spend there, and we expect to spend around ₹3,000 crore in the next two years.

Okay. Regarding the gross debt outlook for the next two years?

Gross?

The gross debt outlook.

Gross debt, maybe it may slightly go up in the current year, FY27, but the debt by EBITDA should come maybe maintain at the similar levels or maybe softening from the current level.

Okay. Thank you so much, sir.

Thank you.

Thanks for the opportunity. One question on affordable medicine, which is generics businesses all put together.

This year, you have done well with around 18% kind of growth. Just want to understand what's your outlook, let's say, for '27 and '28, what can be the growth that you are looking at in this particular segment?

Thank you.

For the next year also, we have our order book pretty much in place, we will continue to reflect a strong growth in the next year as well.

Growth in terms of, is it possible to say that it can grow in the double-digit as well in the next year or close a single-digit growth?

Vivek, we don't want to give any quant guidance.

There's a definitely growth, but we will not be able to comment on the percentage over here.

Perfect. No problem at all.

In CDMO, right, the pipeline, it's shaping up well. Is it possible for you to just help us understand how the pipeline of products, kind of advance stage, let's say, the Phase 3, etc., that is looking like at this point of time?

Secondly, in FY27, are you expecting any new product that is getting commercialized by your partners? Thank you.

While we're not giving concrete numbers on different phase-wise split, we have several exciting programs that are late-phase programs. As I mentioned, given the clinical nature of these programs, it's difficult to predict when and how it will be commercialized.

Within the visibility that we have, we expect some of the programs that we're working on to get commercialized and some of the projections that we've had for volumes from our partners have been along those lines, yeah.

Perfect. Just one last question on the CDMO side.

Out of around ₹1,900 crore kind of revenues, are you comfortable sharing the share of revenue that is coming from the projects which are still in the development or the share of revenue that is coming from the product which are commercialized by your customers?

We are not disclosing, Vivek, on that.

No problem. Thank you.

Thanks so much.

Thank you for the opportunity. Could you please disclose or highlight on the peptide capacity, the dedicated peptide capacity, and what would be the capex allotted for the peptides?

See, we are building a large capacity for peptides, and we have several programs, as Krishna mentioned. We don't want to comment on how many tons capacity we're creating or how many projects we have right now.

We don't want to comment at this juncture.

Okay. Would you be comfortable disclosing the capex dedicated towards the peptide program?

I can only say it is large capex. I don't want to give a specific number.

Okay. My second question is on the CDMO side.

In the previous concalls, you had alluded that you envisaged CDMO contribution going towards 50% of the total sales as per your internal assessment. Now that the CDMO pie is growing well and we have strong order book, how soon do you see, as per the internal assessment, 50% number being achievable?

See, we said two things. One is we'll go to 50%.

We also said by 2030. Yeah.

Oh, okay. Okay.

Last question, if I may. Now that we have increased our capex from ₹1,000 crores annually to ₹1,500 crores annually, how do you see the return ratios shaping out?

Do we still expect operational leverage with increase in capex?

Most of the capex what we are doing is growth capex. See, at least now, we have visibility.

We are not putting capex and hoping customer will come and give projects. We are not doing that.

Mostly we have visibility which product, which customer, how much we are going to make in these new capacity which will come online.

Sure. Just last question.

Could you please touch on this ARV to non-ARV split for FY27? Right now, it's 40%.

Do you still see non-ARV or ARV pie shrinking from this 40%? Or it would remain at 40% around?

Quantum-wise, we did ₹2,800 crores ARV. That will remain constant.

It will be in that number, around that number. Percentage-wise, it will go down.

It will go down. Yeah.

Sure. Thank you.

Thanks a lot. Yeah.

Thank you.

Thank you so much for the opportunity. Dr.

Satya, if we go back about 5, 6 years, the split of the revenue mix was more inclined towards ARV, and then over the last couple of years, we've increased our footprint on the CDMO business. Can you throw some colors on how do you foresee the mix will be if you look out next 5 to 10 years?

That will be my first question. My second question will be at some point, you may pass on the reins to someone else.

Do you have a wish list where you would like to see Laurus before you decide to hand over the reins to someone else? That will be my two questions.

Thank you again.

I will be able to answer your first question easily. As the first question is, see, our ARV, as you mentioned, our absolute quantum-wise, ARV revenues were I would say around 2,500 plus or minus 200, now I would say 2,500 plus or minus 300, because we did ₹2,800 crores this FY26.

By FY30, we expect ARV CDMO revenues in general will be around 50% of our overall sales, and the ARV percentage will come down significantly. Yeah.

While the ARV sales remain constant, but percentage contribution will come down significantly. Yeah.

The second question is, see, right now, Laurus is engaged in a lot of modalities. In small molecule, our focus is large-volume generic APIs, integrated CMO opportunities, and doing CDMO for clinical programs in human health and animal health, and also working with discovery-based companies in crop sciences, not generic crop science molecules.

That's the focus. When it comes to biology, as I mentioned to Mr.

Sajal Kapoor's question also, we have investments made in cell culture, precision fermentation, enzymes, biocatalysis, cell therapy, gene therapy, ADCs, and all. Our investments are in multiple lines, and that's where my focus is currently.

Rest of the businesses are handled by Krishna, Soumya, and other team members. My focus is going on new modalities right now.

Thank you so much, and wishing you very good luck for the future. Thank you again.

Bye.

Thanks.

Thanks for the follow-up. Dr.

Chava, regarding this new greenfield capex of 500 acres in Atchutapuram, may I know when can we expect this new greenfield capex coming online, the first phase?

We will be able to give you more color on that maybe in the next quarter, Bharat. Yeah.

Yeah. Thank you.

Hi. Thanks for the follow-up.

Dr. Satya, many many CDMOs do well at micro or pilot scale, but fail to manufacture a multi-ton batch with consistency.

The key word here is consistency. In that context, for the recent CDMO programs that successfully moved from lab or pilot to commercial scale, what percentage met target yield and quality spec in the first three commercial batches?

How predictable is the scale-up process we have today, going from few kilos to 500 kilos and more, depending on the molecule, of course? See

why Laurus is investing in large capacities well in advance of commercial launches, nowadays Big Pharma wants the validation engineering batches at the commercial scale. They don't want to have any uncertainties of scale-up or moving from one plant to another plant for lack of capacities.

All the commercializations what we have done in the last two years were scaled up, validations done at the same scale, validation done in the same line of equipments. There are no surprises.

When we did validation, we do the same equipment train for commercialization, same batch size, same facility, and all. Fortunately, we haven't had any challenges so far.

Perfect, perfect. Thank you so much for that clarification.

Thank you.

Hello. Good evening, everyone.

My question is the revenues from Lording collaboration, when will they start kicking in, sir?

This is again related to the OLED opportunity that I talked about in the Q&A session. We'll be able to concretely comment on this in a couple of quarters.

At this moment in time, it's difficult to put a finger on the actual numbers.

Okay. All right, thank you.

Hi, sir. Thank you for the opportunity.

I have one question. I don't have complete understanding on the pharma part of it.

My question was with AI, it is disrupting multiple industries. I want to understand in the discovery phase or do you see any challenges in how is discovery phase is getting impacted because of AI?

Do you see any challenges in that front?

At a high level, Laurus within the CDMO space, we're not involved in the discovery side of things for any partners. In speaking from a general standpoint, there's certainly a lot of AI being leveraged in the discovery space.

The so what of that is some of the discovery molecules, the pipeline generation is significantly faster. Also interestingly, given that these molecules are designed by AI, they tend to be also more complex in terms of structures or the synthesis itself, right?

Yes, there's certainly AI being leveraged globally. Given that we are not in the discovery space, that's not something that we typically look at.

Thank you. Also, do you see any disruptions in the day-to-day standard operating of process in general?

Do you see any other companies leveraging it differently or something? I want to understand the application in the industry itself, may not be limited to Laurus, as a general standard process itself.

There are several, at least what we are aware of, there's several companies that are leveraging it, especially in the discovery space, in designing molecules and predicting some of their profiles. There's certainly quite a lot of interesting publications that also been put out there.

There's certainly been leveraged extensively across the industry.

Okay.

Does that answer your question?

I think as you are mostly in the manufacturing part of it, we don't see a risk. Can I rephrase it this way or

Yes. Yes, that's correct to say our risk from AI or impact of it is minimal, if any.

Got it, sir. Thank you.

Thanks for the opportunity again. Sir, on the non-ARV formulation side, has been decent growth for full year '26 compared to '25.

What kind of outlook can we expect for the coming year, either on the new launches or on the scale-up of existing molecules for non-ARV formulation side?

For the non-ARV formulations, we expect to see growth from existing products. We will be utilizing the capacities to ramp up our formulation units.

Because of sizable jump seen in FY26 compared to '25, so that momentum will sustain in '27 as well?

There is a momentum definitely compared to '26 to '27 as well.

Thank you all the stakeholders, and for your insightful questions, and good evening, everyone. Yeah.

Thank you.