Q1-FY24 · Dr. Satyanarayana Chava
We believe this is very transient and underlying demand for our key growth portfolio remains strong. We believe both our API business and FDF business will return to normal levels from Q2 itself.
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Laurus Labs · tone and specificity signals across the available quarters.
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Q1-FY24 · Ravi Kumar
Whatever we have indicated as a consolidation year, there is no change in the state. In fact, we are on par with our internal targets, or maybe we are better than our internal targets for the quarter.
Q1-FY24 · Ravi Kumar
Going back to healthy margins of 28%-29% will need, not just this year, maybe we will achieve during the next financial year.
Q1-FY25 · Dr. Satyanarayana Chava
We have invested significantly towards expanding our development and manufacturing capabilities over the last few years, and this has been painful because of significant deleverage. But we believe this will be very rewarding and will significantly support another transition at Laurus of converting from highly generic focus into a well-respected and diversified CMO-focused company.
Q1-FY25 · V.V. Ravi Kumar
We are not utilizing a full capacity. Suppose we are doing 20 chemical steps in a project. We cannot do all 20 steps at a time because the project is not commercial. The facility which we do this complex chemistry, maybe if you see the reactor operation, it could be between 10%-20%, no more. But the facility looks like fully occupied, but the actual utilization will be very, very marginal.
Q1-FY25 · Dr. Satyanarayana Chava
Given that we said our H2 will be better, actually, we have indicated H1 will not be that great, and H2 will be definitely better. That's what we indicated. And frankly speaking, this quarter one is in line with our internal guidance. So we are in line with the thing. And FY25 definitely will be a good year. But we indicated FY26 will be the much better year because some of the assets which were invested, like animal health, etc., will start yielding results.
Q1-FY26 · Satyanarayana Chava
As we grow our CDMO business, as we see today we haven't achieved operational efficiency, still a lot of unutilized capacities. As we grow our revenues, we are not going to grow our R&D and quality staff proportionately.
Q1-FY26 · V.V. Ravi Kumar
We are going to invest INR 5,000 crores in the next four to five years. Cash flows, internal cash flows will be sufficient to take care of it. We don't make our net debt more than 50% of our revenue at any point of time.
Q1-FY26 · Satyanarayana Chava
The CDMO contributes over 30% of our revenue. We expect this will continue to grow. In the near to medium term, we expect it has a potential to touch 50%.
Q1-FY26 · Satyanarayana Chava
There is no challenge. It's only delay. The project now the bottleneck was resolved, things are back to normal. And we don't see when we look at the entire year, we don't see any big challenge achieving what numbers we thought at the beginning of the year.
Q2-FY24 · Satyanarayana Chava
We certainly believe so [sustaining oncology run rate] because we have order books well beyond Q4 this year.
Q2-FY24 · Satyanarayana Chava
We will get to [30% EBITDA margin]. I'm sure we have an opportunity to take our EBITDA back to around 30% level.
Q2-FY24 · Satyanarayana Chava
When we are saying this year will be year of consolidation, that means we are adding a lot of capacity. Once we do commercial manufacturing from those sites, so you will see very healthy EBITDA margins and then return ratios.
Q2-FY25 · Satyanarayana Chava
This operational deleverage is not surprising, not unexpected, and going back to your question, how long this will continue, maybe we are at the end of the deleverage.
Q2-FY25 · Satyanarayana Chava
Currently, our API sale is about INR 1,500-INR 1,600 crore, and INR 900-INR 1,000 crore is the formulations. It is two-thirds, one-third, roughly, in ARV.
Q2-FY25 · Satyanarayana Chava
You are absolutely right. [About operating deleverage haunting for 8-10-12 quarters.] If you ask me when we will leverage, maybe we have to wait few quarters, but we are end of the deleverage right now.
Q2-FY26 · Dr. Satyanarayana Chava
Our growth is increasingly benefiting from our leadership position in antiretroviral ARVs as well as CDMO expansion. At the same time, we're investing in enabling capabilities and capacities to meet growing customer demand.
Q2-FY26 · Dr. Satyanarayana Chava
We have delivered more commercial molecules in CDMO during the current quarter, so margin profile was better. Gross margins improved because of that.
Q2-FY26 · Dr. Satyanarayana Chava
The building qualification validation is also taking a very long time. It is not that we can right now, if we start the construction of a manufacturing block, by the time we build, qualify, and do validation, it is anywhere taking between 18-24 months.
Q3-FY24 · Satyanarayana Chava
We expect EBITDA margins from current little over 15% to definitely beyond 20%. We can't give you a number, but it will improve significantly.
Q3-FY24 · Satyanarayana Chava
We are between INR 6 billion and INR 7 billion right now, and we expect to use maybe INR 1 billion more during this quarter because of the anticipated launches in U.S. And also increased demand coming from our CMO partner from Europe.
Q3-FY24 · Satyanarayana Chava
The capacity required for ARV formulations is very less. So less than 20% of our capacity, 2 billion. I would not expect we'll use even 2 billion tablets.
Q3-FY24 · Satyanarayana Chava
This is a very interesting question. It all depends on the stage and complexity of the projects being handled. If it is RSM, which may involve one or two steps, if it is intermediate, maybe six, seven steps. If it is API, it could involve additional steps.
Q3-FY25 · Satyanarayana Chava
The growth came from multiple products, not from one product. Growth came from multiple products, so we're happy that our CDMO division also well-diversified.
Q3-FY25 · Satyanarayana Chava
When we go commercial, I think revenues will be somewhere in between [0.8x and 1.4x asset turnover]. The real value comes when we do commercialize.
Q3-FY25 · Satyanarayana Chava
We are broadening our pipeline in our API and also in formulations. That will take some time. It will not be a quantum jump in FY2026. But the kind of pipeline we are developing will have unique offerings, and we expect significant growth will come in the medium term.
Q3-FY26 · Satyanarayana Chava
We decided not to enter into large-scale mAb manufacturing. We don't want to do that. The other area we decided not to enter right now is also sterile manufacturing.
Q3-FY26 · V.V. Ravi Kumar
CDMO margins are on the top, formulation on the higher side, and API on the lower side. The order remains same.
Q3-FY26 · Satyanarayana Chava
We expect to sustain those [non-ARV formulations] because of additional capacities coming up for our CMO partner in Europe and also volume gain in the U.S. and also some new launches in North America.
Q4-FY24 · Dr. Satyanarayana Chava
FY 2020 to FY 2024 revenues were same. It is true. But the typical development timeline is seven to eight years. If it is very short range, five to six years. We have projects in different phases of their life cycle.
Q4-FY24 · Dr. Satyanarayana Chava
These initiatives are putting very, very interesting for long term, but short term, these are very painful investments because we are investing in CapEx, OpEx and all these are going through the balance sheet. But one has to realize that your company is putting money in the right places for long-term and sustainable growth.
Q4-FY24 · Dr. Satyanarayana Chava
The shift in big pharma to diversify their vendor base has started. It is also very clear we got more RFPs in the last 12 months for late-phase projects when compared to previous years. That is an indication that there is a diversification effort from big pharma, and it is clearly visible.
Q4-FY25 · Dr. Satyanarayana Chava
The growth was mainly driven by several mid to late-stage molecule deliveries and a steady increase in sales from new manufacturing assets, which was brought online during the second half of this year. CDMO pipeline momentum has remained healthy across clinical and commercial phase.
Q4-FY25 · Dr. Satyanarayana Chava
As the CDMO revenues contribution goes up, we expect margins should also improve.
Q4-FY25 · V V Ravi Kumar
I think your point and observation is very, very valid. If you look at the ROSI numbers, we were there earlier. It's not that we never had that number. It will take a few years for us to get there again.
Q4-FY26 · Dr. Satya Narayan Chava
We are a strategic partner for many big pharma right now. So we have a flow of RFP commercial early stage mid-stage late stage commercial.
Q4-FY26 · VB Ravi Kumar
Most of the capex what we're doing is growth capex. We are not putting capex and hoping customer will come and give projects.
Q4-FY26 · VB Ravi Kumar
We are very confident on maintaining or improving stable margin in FY27.