Beta Drugs Limited — Call Transcript 2025

May 23, 2025

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“Beta Drugs Limited H2 FY-25 Earnings Conference Call”

May 16, 2025

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– MANAGEMENT: MR. RAHUL BATRA CHAIRMAN AND MANAGING DIRECTOR, BETA DRUGS LIMITED – MR. NIPUN ARORA CHIEF FINANCIAL OFFICER, BETA DRUGS LIMITED

– MR. ASHUTOSH SHUKLA DIRECTOR OF SALES AND MARKETING, BETA DRUGS LIMITED – MRS. RAJNI BRAR COMPANY SECRETARY AND COMPLIANCE OFFICER, BETA DRUGS LIMITED – MODERATOR: MR. SRISURYA KALAGARLA PHILLIPCAPITAL (INDIA) PRIVATE LIMITED

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Beta Drugs Limited May 16, 2025

Moderator:

Ladies and gentlemen good day, and welcome to H2 FY '25 Earnings Conference Call of Beta Drugs Limited, hosted by PhillipCapital, PCG Desk. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing ‘*’ then ‘0’ on your touchtone phone. Please note that this conference is being recorded.

I now hand the conference over to Mr. Surya from PhillipCapital India Private Limited. Thank you, and over to you.

Srisurya Kalagarla:

Thank you. Good afternoon, everyone. On behalf of PhillipCapital Private Client Group, I welcome all of you to the H2 FY '25 Earnings Conference Call of Beta Drugs Limited.

Today from the Management, we have Mr. Rahul Batra – Chairman and Managing Director; Mr. Ashutosh Shukla – Director of Sales and Marketing, Mr. Nipun Arora – CFO; and Mrs. Rajni Brar – CS and Compliance Officer.

I now hand over the conference to Mr. Rahul Batra for his opening remarks, and then we will open the floor for the Q&A session. Over to you, sir.

Rahul Batra:

Thank you, Surya. Thank you. Dear all, very good afternoon. I welcome you all to the BDL earnings call for FY '25. First of all, I would like to express my gratitude for being with the Company for since last so many years, most of you. And we have started the process of migrating onto the Mainboard. We'll be migrating between June and August this year.

To start, I would like to give a brief view of our financial highlights:

Beta's consolidated revenue stood at Rs. 362.35 crores, which is 22.5% increase from Rs. 295.71 crores of the previous year. We would have achieved a top line of more than Rs. 375 crores, but in March, we had an audit from Mexico, which took almost 10 days of our production, with a very low production in both API and formulation plant.

EBITDA margins stood at Rs. 81.04 crores, which is 22.37%. And excluding Cosmetology division, the EBITDA margin rose to Rs. 84.12 crores, which is 24.03%. The EBITDA rose by 32.25% as compared to last year. The net profit rose from Rs. 36.43 to Rs. 45.83 without onetime expense, which we had done at the time of preferential allotment.

Now, coming on to the main highlights and achievements for FY '25:

This year, we successfully launched 5 to 6 molecules. We have successfully concluded audit of Mexico for both API and formulation. This is a major milestone, as our API plant will also be PIC/S approved.

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Beta Drugs Limited May 16, 2025

The new export person who has recently joined has a vast experience in API Oncology internationally. This will boost our presence globally in the API as well. There has been 25.28% growth in the branded sales, and we finally touched Rs. 100 crores for the first time.

The export sales grew by 72.69%. As discussed earlier, we have been focusing on the export side, and future looks very bright on the export sales. We have also received a ZaZiBoNa approval, which is a significant milestone for the export market last year. The Onco EBITDA has grown to 24.03%, which is highest ever since it launched.

On the Cosmetology side, yes, this is a concern, but now we have received some registrations as an in-licensing from a European Company for fillers, which will be commercialized in the next 2 months. Also, this month and the last month, we have been almost at break-even. So, this division in the next half year, in September, we might be having some profit from our Cosmetology division as well.

Coming on to the individual verticals:

First is our own brand:

We did Rs. 103 crores of sales and also achieved a milestone of crossing Rs. 100 crores, with a growth of 25.27% as compared to last year.

In own brand, we first time created a brand more than Rs. 8 crores, which is NDDS, that is New Drug Delivery System, and was launched first time in India. This has given a big boost to launch further NDDS, in which we are working in the coming months and years.

We have successfully launched 6 products apart from these 2 NDDS, and are in the process to launch another 6 in this financial year. There are 2 more NDDS, which we will be launching in this financial year. The Oral Therapy and the NIBs, TKIs, and the Supportive Therapy have contributed. The contribution of this particular oral therapy has gone up to 48% in our total branded sales.

Coming on to our CDMO business:

Beta is proud to say that Beta is the preferred choice of any Company for their Oncology manufacturing in cytotoxics. We have not only displayed this thing with our quality, but also with the delivery to our best CDMO partners.

We have added many products from different Indian MNCs, mainly Glenmark, Intas, Alkem, Cadila, and Torrent. Growth of CDMO business will continue between 5%-10% every year.

Now coming on to the export side:

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The sales of exports have gone up from Rs. 46 crores to Rs. almost 80 crores in the last financial year, which is 73% growth as compared to last year. As discussed in the beginning, the 2 new approvals, that is COFEPRIS and ZaZiBoNa, has added another feather in the cap of the Company for further global presence.

We have recently got around 48 new registrations and have filed close to 130 new dossiers in different geographies. Also, there are more than 200 new dossiers which are getting ready to be filed in the next 4-12 months.

The Company has been focusing more on LATAM and APAC regions, where there is less competition and where there is entry constraint. Since we have the approvals, since our dossiers are on the line, so we can hope to have some more registrations in these regions very soon. There has been extensive traveling and branding on the export side to increase the volume 3x in the next 2-3 years.

Now coming on to our API business:

After achieving the major milestone of PIC/S approval for API plant, we are more focused on developing the international market for Oncology APIs. We have further upgraded the facility to go for Europe approval in coming time. The capacity has also been increased by adding one more line to meet the future requirements.

We have developed and commercialized 4 new molecules last year. We are in the process to launch 6 new molecules. This will be followed by 20 new molecules in the next 3-5 years.

The Company is also looking to further go backward integrating by establishing the new plant for its intermediates. This will help not only to reduce the dependency on China, but will have more reliable and sustainable supply chain for all the KSMs.

Last but not the least, so coming on to the Cosmetology:

The EBITDA loss has reduced from Rs. 4 crores to Rs. 3 crores this year. The Company has increased its prescriber base from 1200 to 2600 as compared to last year.

From last month, the Company has almost had been in a break-even and we see the Company posting profits for this division by September. The PCPM of this division has also been increased from Rs. 75,000 to Rs. 1.25 lakh, which is a very positive sign. Also, with the launch of those in-licensing products will boost the sales for this financial year. Now coming on to the core of our business that is R&D.

The current team in our R&D is around 10 people in both API and formulation. Our current R&D spend is almost 2%, which is giving the main boost for the Company, that went on to the direction of a scientific psychotoxic organization. We have already developed 2 more NDDS

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which will be launched this year, followed by 2 NDDS which will be launched in FY '27. All these will be the first time in India, which will attract our major market, both domestic and globally.

To conclude:

I would like to say that at Beta, we are committed to give high quality products with new innovations. Today we are well positioned for a sustained growth, driven by multiple strategies.

The Company's branded sales in both Onco and Cosmetology will outpace the growth of the overall market, which is supported by huge pipeline. The International market will too deliver our exponential growth including API in the growth path.

Over the past few years, Management has taken deliberate steps to lay a strong foundation for value creation, establishing critical building blocks to support future stability.

With a healing cash position and the Company is well capitalized to invest in all the growth opportunities.

Thank you. Now we would like to have questions from everyone.

Moderator:

Thank you, very much, sir. We will now begin the question-and-answer session. We have our first question from the line of Nigel Mascarenhas from EverFlow Partners. Please go ahead

Nigel Mascarenhas:

Good afternoon, sir. Thank you for the opportunity. A couple of questions from my end. Firstly, how are you seeing the growth in exports? What sort of margin profiles do you expect in your export business? And what sort of scale up do you expect in the next say 2 to 3 years?

Rahul Batra:

So exports already you have seen in the last financial year, we have grown from 46 to 80 this year. So there has been 73% growth as compared to the last year. So we are intent to 3 times our sales in next 2 to 3 years down the line from the export side.

And the margins, of course, once today most of the sales are coming from the unregulated or semi-regulated markets. Once our dossiers are registered in the regulated markets, especially Brazil, Mexico, Philippines, Thailand, Vietnam, so these countries will eventually increase our margins further. So our EBITDA margins for the Company overall is projected between 23% to 25%.

Nigel Mascarenhas:

Understood. Understood. Thank you, sir. Sir, my next question is, are you seeing an increase in the competitive intensity in the manufacturing for domestic CDMO or in the export markets, the emerging market business?

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Rahul Batra: See, in the domestic CDMO, there are players, but eventually the player who is into the business since last many years, it speaks about the quality. So as I said in my CDMO vertical that we are still the preferred choice for any Indian MNC, who is going to get their products manufactured from outside. Then, of course, the competition will be there, but we as an R&D based Company, we intend to launch so many products that people are too focused that this is a Company which can give us the better products at a better price and better quality.

Nigel Mascarenhas: Got it. Got it. Thank you, sir. All the best. Thank you. Rahul Batra: Thank you. Moderator: We have our next question from the line of Aastha from Pkeday Advisors. Please go ahead. Aastha: Hello. Thank you for the opportunity, sir. Sir, my first question is, could you give us what was the growth for CDMO, API, and Dermatology segment this year? Rahul Batra: For the growth, Nipun, can you please tell the numbers?

Nipun Arora: Yes. Yes Rahul. So for branded, last year it was Rs. 82 crores, now this is Rs. 103 crores. So this is a growth of 25%. For CMO, it was Rs. 140 crores last year, Rs. 148 crores this year. So it is a 5% growth. For Exports, it was Rs. 46 crores last year, now this is almost Rs. 80 crores. So this is 73% growth. And for Derma, it is Rs. 6.83 crores last year and Rs. 12.30 crores this year. So it is 80% growth. And API is almost similar like last year, because the major consumption was internal. So it was Rs. 20 crores last year and Rs. 20 crores this year. Aastha: Got it, sir. Sir, can I get the OPM margins for each of the segments? Nipun Arora: Yes. Yes. So for Branded, it is somewhere around 34%-35% EBITDA margin; for CMO it is somewhere around 15%-16%; Exports it is 27%-30%; API it is 19-20%; and Derma as we have already discussed, that is of course, last year, we witnessed EBITDA loss of Rs. 3 crores. But the gross margins of Derma is somewhere around 67%.

Aastha: And sir, we intend to go positive in FY '26 for Derma, right?

Rahul Batra: Yes.

Nipun Arora: Yes. Yes.

Aastha: And sir what would be the guidance for FY '26 and for the next 3 years? Rahul Batra: So, we will multiply, we will 3x our sales, we will double our sales in next 3 years.

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Aastha: Okay. Sir, can you give us the names of the clients that we have added in CDMO? Or not the name of the clients, but how many clients did we add in the CDMO segment? Rahul Batra: This year, we added 3 more. So total in all, we have around 30 players, we are doing CDMO. Aastha: Okay. And sir, the fund that we have raised of approximately Rs. 117 crores, has all the funds been utilized? Rahul Batra: No, the entire fund is being placed in the FDs. We are still seeking an opportunity to utilize that fund, but we have utilized around Rs. 11 crores in the facility upgradations, mainly in Adley Formulations and Adley Lab. Aastha: Okay. Got it. Okay, sir. That's all from my end. Thank you. Moderator: Thank you. We have our next question from the line of Sachin, an individual investor. Sachin: My question is, over the last year, our exports you have said have probably grown by 70%, which means that our Domestic business is currently growing at around 10% margins. But if you were to look at the '18-'19, '19-'20, '21-'22 period, I believe our Domestic business was also growing faster. So any specific reason because of which we are seeing Domestic business growing at 10% odd? Rahul Batra: So I'll just give you a brief. As we told that our Domestic own branded business grew by 25.17%, the own brand business. And the Derma also grew by 80%, leave Derma. But only the CDMO. CDMO, we always said that the growth will be expected between 5% to 10% only. This has always been the line which we have been telling everyone from since the past that CDMO will keep on growing at 5%, 10%. And our own branded business will keep on going at 23% to 30%, which is again, every year it has grown by 25%. So this year also it has grown by 25%. So and Export, of course, you have seen that. Sachin: One more question here, sir. On the licenses that you have received in the regulated market, when do you actually start seeing revenue pick from those geographies? Rahul Batra: We will be seeing that market picked up in FY '27, starting of FY '27, maybe by May, June 27. Okay. Sachin: So basically you are saying that wherever we got licenses till 2023, we are currently, into the export business there. But wherever we got licenses in '24 and '25, we would see business coming in 26, 27. Rahul Batra: Yes. Yes. Because the reason is once the approval is there, then the dossier have to be done. Then there is a registration timeline. So every country has a different timeline. Maybe some

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Beta Drugs Limited May 16, 2025

country has 12 months, most of the countries the timeline of registering a dossier is between 18 to 36 months. So that's why it takes time.

Sachin:

Yes. 2 small questions, sir. One, when you talk launching of 2 NDDS this year, does the new drug delivery system normally substitute a drug of Beta Drugs, which is already there in the market? Or it's a new addition in your portfolio, number 1.

Number 2, are you sure that over the next 2-3 months, we would find a place on the NSE Mainboard? So have we done all the back-end work for the same? Thank you. These are my questions.

Rahul Batra:

Thank you. So for the NDDS, I would ask Ashutosh ji to give an answer. But for Mainboard, yes, we are prepared. We have already filed the documentation. Maybe we get an approval from NSE in June or it can be July or it can be August. So in the next 2, 3 months, we'll be migrating to the Mainboard for sure.

Sachin:

Got it. Thank you.

Rahul Batra:

Ashutosh, for NDDS, can you answer?

Ashutosh Shukla: Yes, sir. The NDDS which we have launched last year, we have expanded the overall market size. For an example, Megestrol acetate, the total market size was close to Rs. 6 crores. After the launch of our brand, the total market size is now more than INR 16 crores, out of which we have the lion share. And we did close to around INR 9 crores, plus the tablet market. So overall, we have expanded the market.

For the future NDDS formulations, we expect to get the share from the existing market. It will not expand the market, but we will be getting a share from that. So there will be 1 product which has a market size of around 70 crores. So we expect good share from that particular market for the NDDS formulation.

Sachin:

Got it. Thank you.

Moderator: Thank you. We have our next question from the line of Devendra Agarwal, an individual investor. Please go ahead.

Devendra Agarwal: Thank you. Congratulations, sir, for a great set of numbers. I have 1 question. Sir, can you explain why the financial cost went up by Rs. 4 crores in this 6 months? Rahul Batra: Yes, I will tell you. This is because we have made a provision for convertible debentures which we have issued during the preferential issue. So the convertible debenture carries the coupon. Hello?

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Devendra Agarwal:	Yes.
Rahul Batra:	Yes, it carries the coupon. So the provision has been done for that coupon. That's why you are
	seeing the increase in financial expenses.
Devendra Agarwal:	It's a one-time cost, right, like financial cost as well as this preferential issue cost.
Rahul Batra:	Yes. Like the tenure of these convertible debentures is 18 months. So 3 months already gone, 4
	months already gone. So it will be there in full year this year. And then it will not be there.
Devendra Agarwal:	Okay. Thanks. Thanks. That helps. Another one more question if I may ask is do you have any
	guidance on the Derma sector like what is your expected growth for next year and say for next
	3 years?
Rahul Batra:	So, so Derma, we expect to do between Rs. 18 crores and Rs. 20 crores this year. By next
	financial, we are expecting to touch Rs. 30 crores. And after that, we are expecting to touch
	between Rs. 45 crores and Rs. 50 crores.
Devendra Agarwal:	Okay, that's all. Thank you, sir
Moderator:	We have our next question from the line of Santosh Kondapuram, an individual investor. Please
	go ahead.
Santosh Kondapuram:	Hi. Thank you for the opportunity. I wanted to know what is the record date for the bonus shares
	you have issued recently? I haven't seen a record date for that.
Rahul Batra:	If you can answer that, what was the record date for the bonus shares.
Rajni Brar:	Sir, record date was 26th of March. It's the 1 day prior to the date of allotment.
Santosh Kondapuram:	Okay. And regarding the CDMO business, I know we are focused on domestic CDMO currently,
	but do you have any plans for international clients on the CDMO side?
Rahul Batra:	Yes, we do have plans for that since we are now planning to go for the EU inspection. After EU
	GMP approval, we are looking for clients whom we can do some CDMO for European market
	or for some regulated markets. Yes, we do have plans for the same.
Santosh Kondapuram:	Okay. Thank you. That's all from my end. All the best.
Rahul Batra:	Thank you.
Moderator:	Thank you. We have our next question from line of Avnish Barban from Viakariya Investments.
	Please go ahead.

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Avnish Barban:

Yes. Hi. Hi, Rahul. Thanks for taking my question. I just have a couple. One, can you explain the reason for a slight bit of a decline sequentially in the gross margin?

Rahul Batra: Hi. You have not checked it correctly. There is no decline in gross margin, rather, the gross margin has been increased. If I reduce manufacturing expenses also, then last year it was 38.73%, now it is 41.5%. And if I ignore manufacturing expenses, then last year it was 49.47%, whereas now it is 52.7%. This is the reason why there is an increase in EBITDA margin also. Like last year, it was 20.75%, now it is 22.04%.

Avnish Barban: I was actually asking sequentially from first half of FY '25 to second half.

Rahul Batra: This is very marginal. Otherwise, if you see, this is 52% in first half; and second half it is more than 52.5%. Avnish Barban: Okay. Okay. Understood. And can you also please explain the reason for one, the depreciation increase as compared to FY '24. So, FY '24 was around Rs. 10 crores, which has gone up to Rs. 13 crores. And also, the employee cost increase. It's been a 31% growth year. Nipun Arora: So, let me tell you the first one, why depreciation has increased. Depreciation has increased because the CapEx was added in the last 2, 3 months of last year. So, full depreciation was not there, which is now we have got the full depreciation in this year.

And the other question was on salary cost. So, in salary cost, Derma employees, which were added last year, that was also in the last 3, 4 months. So, salary portion was less that time. In FY '25, it is full portion. And then, obviously, some more high officials are hired on the production side also. QA side, production side.

Avnish Barban: Understood. Also, can you repeat the impact of the 10-day Mexico audit? You mentioned some number that if the audit was not there, your growth would have been something. So, what is the loss revenue because of this?

Nipun Arora: So, we had orders in hand, but we could not execute the production side, both in API and formulations. Since the inspection was going on, and in between, there was Holi. So, 7-8 days gone in the audit side. That's why some of the products we couldn't manufacture and we couldn't provide the API. So, we could do the formulations. So, that's why it was halted. Otherwise, we could have done more Rs. 7 crores to Rs. 8 crores of sales in the last financial year.

Avnish Barban:

Rs. 7 crores to Rs. 8 crores?

Nipun Arora:

Yes.

Avnish Barban:

And all this impact is obviously in the 4th quarter?

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Nipun Arora:

Yes.

Avnish Barban:

Okay. And, Rahul, can you give me some color on the in-licensing deal in Cosmo that you were talking about? Typically, in-licensing deals are good for ROC, but they are very thin in margin. So, when it ramps up, does it impact our overall consolidated margins negatively?

Rahul Batra:

No, no, no. Not at all. Since these products have been identified by us, since last 1.5-2 years, we have been working with this Company very aggressively. So, this Company is from Italy. They have developed some fillers in the Cosmetology market.

And Indian Cosmetology spend, as on today, is increasing day by day. Every person who is going to a cosmetologist, they are working on their skin part. So, these fillers are from Europe market, and we have just got them registered. So, the overall process, it took us around 8-10 months to get these products registered in India. So, we have just got our registrations out last month. Now, we are working for the procurement.

On the margin side, we are maintaining around 65%-70% GC, so that we are able to create some volume and on the bottom line also. See, we as a Company are not focusing on the top line to be very honest. Our main focus is always along with the top line, the bottom line has to be there. That's why we always keep our EBITDA margins at the same level. But in case tomorrow, with the launch of these products, also the EBITDA margins will be further added.

Avnish Barban:

Understood. And what is the potential for this filler drug product?

Rahul Batra: The potential is huge. Every day, it's increasing. Today, every lady or every person is going to a cosmetologist for their skin treatments and these fillers are the most important thing nowadays. So, in fact, Botox is not only the option, but these fillers create some value. So, the market is huge. The total overall market size is close to around INR 2,500-INR 3,000 crores. But it is primarily dominated by the Korean market, but we have got these products from Europe, so this will have an impact on the sales.

Avnish Barban: Understood. Last one from my side. Now, after the CCD issuance, the balance sheet is obviously sitting on some cash. How are you, Rahul, thinking about some potential M&As that might come your way?

Rahul Batra: See, if any good branded business will come on our way, so we will think of that as an option. Plus, our major expense right now will go towards, we are making one new corporate building, where we are shifting the entire regulatory office and all the R&D there at one place. Where the office, R&D and regulatory will be sitting in one place, because for the future filings and future developments. Then, our major expansion will go towards the intermediate side. We are desperately looking for a land or a plant, which is on sale to manufacture intermediates.

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Today, major of the products are manufactured from N-2, N-3 stages, but we want to start from the basic KRM, the basic plant base. So, we are looking for that, and in next couple of months you will see that some other thing will be shaped up, and we will be having some plant with us.

Avnish Barban: I was talking about, let's say, if you acquire a brand let's say, and you also have the CDMO capability. So, if the seller is getting the product made from some other CDMO player, then you get kind of double benefit. You get sales from the brand also and some business in the CDMO also.

Rahul Batra: See, we have always believed in creating a brand, and we believe in branded sales. So, that's why we launched Cosmetology, it's been 2 years. So, the way we have taken Oncology in last 10-12 years, the same way we will take Cosmetology also. So, tomorrow if we find a good M&A in terms of any good branded sales, so we will definitely look out and we will evaluate that proposition.

Avnish Barban: Okay. So nothing on the table as of now?

Rahul Batra: Nothing on the table as of now.

Avnish Barban: Thank you so much, Rahul. This was very helpful. Thank you.

Moderator: Thank you. We have our next question from the line of Sanjeev Arora, an individual investor. Please go ahead.

Sanjeev Arora: Yes, good evening team, and I really appreciate the consistent growth that you have been giving on a year-to-year basis and entering into this new field of Derma. Just a simple question because most of the questions have been answered. As you have pointed out in the presentation regarding the revenue of Rs. 450 plus crores in the current financial year, I just want to have a vision for the next 5 years of the Company, at what scale and revenue and profitability would the Company be?

Rahul Batra:

See, we have a budget, we have our plans laid down for next 3 years. So, it is for 2025-26, 202627 and 2027-28. So, till 2028, we have our revenue projections till Rs. 750 odd crores. But after that, we are doing some other talks also. We might get into immunotherapies. We are working on many things. Actually, there are lot of things which are on card. So, you might see some or other development in the year 2028, where we will be one of the generics to launch, one of the mAb which is not prevalent in the generic market.

So, all these things are happening and it is under discussion. So, 3 years, we have already given you, and next 2, 3 years, we are just framing it up, once all those conversions or once all those agreements are in place.

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Sanjeev Arora: Good enough. Thank you. Thank you very much, and I appreciate. And all the best for the future growth. Rahul Batra: Thank you. Moderator: Thank you . We have our next question from the line of Vaibhav from SMARC. Please go ahead. Vaibhav: So, thank you for taking my call. I just want to know, are we going to increase our headcount in the R&D space? And how many of them are PhDs and Masters, about the 10 people which we mentioned? Rahul Batra: Sorry your voice is not audible. I could not hear your question properly. Moderator: Vaibhav, your voice is quite muffled. Can you please rejoin the queue? We cannot understand the question, sir. Vaibhav: Sure. Moderator: We have our next question from the line of Sachin, an individual investor. Please go ahead. Sachin: Yes, hi. Around the one question that I had is NSE Mainboard insists that quarterly results need to be published once you are in the Mainboard, but can we start it as a good practice in this year, even if the Mainboard gets a little delayed? Rahul Batra: We might be getting approval to migrate on the Mainboard by June itself only. So, in case we migrate on June, then July, 100% the results will be out. But in case the migration happens in July, so let us just wait for 6 months, the half-yearly results of course will be there, but after that, every 3 months the results will be out. Sachin: I agree. My only point is that if it is getting delayed beyond that, can you also move to a quarterly result publishing, which is a good practice in itself is what I think. We will see that, and we will try to implement that as well from this quarter itself. Moderator: Thank you. We have our next question from the line of Suruchi Parmar from NX Wealth Management. Please go ahead. Suruchi Parmar: Thank you for taking my question. I just wanted to know, like after this COFEPRIS approval, what is the TAM you are looking at? Rahul Batra: See, the overall Mexico market is very big, very huge. So, it depends on the number of dossiers we file. As on today, we have filed around 23 dossiers, out of which 12 have already gone to the FDA for registration process. 12 are under evaluation that will be submitted in the next 2 or 3 months. So, another 12-15 are in pipeline, which we will be sending them in the next 2, 3 months.

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Beta Drugs Limited May 16, 2025

So, the total Oncology market size of Mexico is concerned to around 140 million. So, we expect that we should have a good number out of it.

Suruchi Parmar: Okay. So, don't you think that the guidance you are giving of 25% growth is at the lower end after we are getting these approvals?

Rahul Batra:

The approval doesn't mean that the business will start coming today. As I told initially also, the registrations of each and every product takes time. The dossier preparation of each and every country is different. So, the dossier which is prepared for Mexico is not accepted in Brazil. The dossier which is made for Brazil is not accepted in Thailand. So, all these things take time.

Although, we have got around 17-18 people working in our regulatory team, but still we find constraints to send the dossier timely. We are doing our level best. And we have already filed as I told you 130 dossiers for registration, which the registrations are yet to come out. So, it totally depends on when the registrations are coming out.

So, the guidance is dependent on where we are sure shot that these registrations are out and where we are not sure that the registrations will be out in that stipulated time. So, we cannot give you guidance for that.

Suruchi Parmar: Okay. So basically, whatever approval you have got, in those countries you will be selling your own brand products?

Rahul Batra:

Yes, own brands, own products.

Suruchi Parmar: So we can expect the margins, whatever we are making right now on the own brands, will be more than these margins only, correct?

Rahul Batra: Yes, the margins which we are doing right now in exports, so the margins will eventually increase from the export side.

Suruchi Parmar: Okay. And when can we expect this UCMP approval, in this year or next year?

Rahul Batra:

We have already started the process. Earlier, we were going only for a plant approval, but going for a plant approval was not making sense. So what we did a change inside was that for every line, we are starting preparing a new dossier for Europe. So in another 3 months, the dossiers will be ready and we will be filing it.

We are expecting the audit to come between October and December this year only. So maybe after audit, it takes 6 months to get a certificate out or to get the registration out of that particular product. So we just have to wait for another one year for this EU certificate.

Suruchi Parmar:

And after that, like the products, when you will start the revenue part with that?

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Rahul Batra: Revenue part from Europe will start after 2.5 years. Suruchi Parmar: 2.5 years. Okay. Okay. Rahul Batra: Thank you so much, sir. Moderator: Thank you. We have our next question from line of Kevin Gala from Gala Brothers. Please go ahead. Kevin Gala: Sir, I had only one small question. As I can see, the interest cost has risen significantly in this quarter. Can you please explain on that? Rahul Batra: We have just explained to another caller that interest cost has increased, because we have issued convertible debentures during this actual issue, which has carried some coupon. So we have made provision for that coupon. Kevin Gala: Okay. Understood. Thank you. That was it. Thank you so much and all the best for the future. Rahul Batra: Thank you. Moderator: Thank you. We have a follow-up question from line of Aastha from Pkeday Advisors. Please go ahead. Aastha: Sir, I wanted to ask you that you have given the full year guidance, the total revenue guidance, and for CDMO and Dermatology segment also we have the same. Could you please give us the guidance for Domestic-owned brands, International and API as well? What would be the growth rate in all these 3 segments? Rahul Batra: See, what would be the growth rate, we cannot give you the guidance exactly. But we are telling you that we will keep on growing at a rate between 23% and 30% annually. And since this year also the growth was around 24.3%, so next year we tend to increase at the same pace and that is 25% only. Aastha: Okay. And sir, the OPM margins that you had shared earlier for each of the segments, would that be increasing in any of these segments or would it remain same? Like for domestic brands, the margins were at 34% OPM margins. So going forward also we will see that the OPM margins would remain in the line of 34%? Rahul Batra: Yes, going forward also for the same divisions, the margins will be in the same line and we will try to keep our margins. What we have basically placed in our budget also that shows us that margins will be between 23% to 25% consolidated.

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Aastha: Consolidated, okay. And sir, the last thing, our total revenue was at Rs. 362 crores. The earlier numbers shared with me, I just want to reconfirm them, the revenue numbers. CDMO was Rs. 148 crores; Domestic owned business is Rs. 111 crores; International is 80, API is 21. Rahul Batra: Domestic-owned branded Oncology is Rs. 103 crores. Aastha: 103, okay. Thank you. That's it, sir. Moderator: Thank you. We have a next question from the line of D. N. Joshi, an individual investor. Please go ahead. D. N. Joshi: Thank you for the opportunity. I just wanted to know, actually, if I remember correctly, in the last year's H2 conference call, it was informed that the Company will be migrating to the Mainboard by July 24. But so far, it has not migrated. What are the reasons for this? Rahul Batra: There are no reasons. We just started the process like 3, 4 months back. And SEBI, there are a lot of formalities to be done. So, we have already done the bonus part. We had to increase some authorized capital, which we have already done the first step. Second step is to file all the papers. We are doing this with SEBI. We are in regular touch with them. Since my beginning talk, in the next 2, 3 months, you will see the migration is happening. And we will be migrated to both, NSE also and BSE also. D. N. Joshi: So, in the next 2, 3 months, we can expect it? Rahul Batra: Yes, in the next 2, 3 months. Yes. D. N. Joshi: Yes. Okay. Thank you. Moderator: Thank you. As there are no further questions, I would now like to hand the conference over to the Management for closing comments. Rahul Batra: Thank you so much for attending this earnings call. We would just like to say that, yes, we have a very robust pipeline for coming 3, 4 years down the line. We are going to maintain the same pace which we have been doing since last 4, 5 years. And keep trusting us and we will be delivering our best to best of our potential. Thank you. Moderator: Thank you, sir. On behalf of Philips Capital (India) Private Limited, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.

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