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Dishman Carbogen Amcis Ltd
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Ladies and gentlemen, good day, and welcome to Dishman Carbogen Amcis Limited Q4 FY '24 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Arpit Vyas, Managing Director, Dishman Carbogen Amcis. Thank you, and all you, sir.
Thank you, moderator. Good morning, everyone. It is a pleasure to have you all for our yearly conference call. It has been an exciting 5-year journey. But in that journey, the tremendous effort from the people and tremendous hard work was to put in through all the challenging times of COVID and also the war and the global uncertainty that still exist today.
Through all this difficult period, we were -- we were unfortunate enough to, as you all know, that to the observations from the [ geopolitics ], which made it challenging for us in the new business in Europe. For that, we got the [ Chairman ] of resolving the entire issues highlighted by the -- from -- develop. And one after the other, everything was all took time, but it got resolved. And finally, we were able to pass the EDQM with flying colors.
We've got no more than five minor recommendations. There were more motivation, which we had justified already and we have already received the certificate as on December -- as in January this year.
Subsequently, unexpectedly, what happened was USFDA also decided to audit the plan and they decided to come in March itself. And whilst we were gearing up for production in manufacturing. And that slowed down, again, the -- our ability to manufacture in full force because we have to start again preparing for the USFDA audit and -- no more than 2 weeks for doing so. [ More or less ], the deal were tremendous, great efforts we put in. Again -- was also passed with flying colors.
So now the -- world where many companies, one after the other, are -- important lots on import bonds. We have come out with -- and like a -- the approvals done. If the approvals -- have any approvals in that during such a period.
The customers who know what we need are not just happy, but they're extremely calm because they were also very anxious for all the companies in India getting such in -- alerts, especially at the time when the business was shifting from China to India. And this, with the import alert, the customers who are very worried that what may happen for the prices is a lot of -- may not get this fund, which is happening right now and the drop prices are increasing unfortunately. But in that, they were very, very happy. And for that reason, we are also getting tremendous amount of inquiries for new projects. The future is looking bright is all I can say.
And I would like to thank all of you for your support through all the tough times that we have faced in the past 5 years. We know it would not have been easy keeping fit, and it would have been an extreme relentless belief in the company or want to be remain invested throughout the 5-year period. More or less, we are -- out of it, and we are going to put all our energy and effort now to make sure that the sky is going to be the limit.
Again, I would like to thank you -- thank all of you for your trust and support. And with that, I would like to pass the call on to my dear colleague, Pascal Villemagne.
Thank you very much, Arpit, for your work, and good afternoon, dear shareholders. Very happy to be here today to give you a bit of comments on the performance of the Carbogen Amcis [ branch ].
So we ended the last quarter of the year with -- performance -- because for the first time, the Carbogen Amcis Group was able to generate more than [ 0.25 billion ]. So first one in our -- such level. So we are quite happy with that. Of course, it represents a lot of work as -- all the teams very much motivated to satisfy a large number of customers and a large number of -- in the world.
However, we had a bit more ambition last year, and we wanted to -- even more and need to challenge in operations that are now resolved. We are facing some shifting of the revenue in the late months of the last quarter. So as a consequence, we are not able to reach the very ambitious budget that we have had and as a consequence, we achieved a slightly lower EBITDA than we used to have.
But as I mentioned, all the problems are fixed and we can now operate normally, especially for our drug product -- product facility in France. So that's the good news.
I'd like to -- that it's absolutely not a market -- market we're in -- okay. Probably, a bit more difficult than the last few years where there was a lot of investments through the pharma industry. We have -- especially on the biotech -- small companies for biotech part, especially in Europe, it's a little bit more difficult to raise money because of what Arpit talked about the new geopolitical situation. So some of our small biotech customers are [ challenged ] to that, to move that project forward or to start new projects.
But as we -- for this year, '24, '25, we are very, very happy because we already have large numbers of the -- that's covering the best majority of our -- already enhanced, and also very good perspective from the major customer -- for what a very, very opportunistic and actually excited by the members of customer visits we have, and also new to that we are getting for the end of this year and for the full year.
On top of that, I mentioned our time over the last call that we also [ digital transformation ] that is coming to the remainder of the top line. So we are starting to -- the number of -- that are going to enable us to be more productive. And as the major -- into this project, we are going to implement and go live with [ ASP ] this year. So I'm very happy that where we -- the [ first face ] and really looking forward for all the efficiencies that all those -- was in the future.
Thank you very much for you all for listening, and I end the call -- I'll leave the call to Harshil Dalal, our -- CFO.
Thank you, Pascal, for the business update. I think for the benefit of all, if we better is -- how you can also give the business update for India, and then we can catch into the financial discussion.
So Paolo, I hand over the call to you, if you can give the latest update for India for us.
Yes. Thank you, Harshil, and good afternoon, everyone. As mentioned by [ other Managing Directors ], we are -- form that we had a -- in the last few months, which was plan for 5 days, but we ended up with only 4 days. Just a few weeks ago, we received the established expansion report. And so we can say that just a bit more than 6 months, Dishman Carbogen Amcis Limited successfully complied to [ PMD Japan ], Italy and the USFDA. Regarding -- certification received and [indiscernible].
Of course, we want to say that we are in all of the teams, which were in this -- and we see for sure now a new trade opening as far as the deal is -- We have seen a great -- on the customer. We are really keen to -- business with us after achieving all the overcompliance one.
We are also seeing the reintegrate interest -- for many new customers. These customers are -- geographical area.
As far as CRAMS business, which is considered by us -- we strengthened substantially in recovery -- and we are now adding a -- strategy to receive in the second couple of quarters. This year, after so long time working in compliance to start moving towards -- level in the -- and for sure is we -- utilization.
As far as the -- and the new projects, we are also strengthening our sales team and deploying major resources to cover all the -- geographically. Also leads you to day [indiscernible].
At CapEx level, we have completed some of the margin CapEx, both [indiscernible]. But of course, we are also not stopping the general upgrade -- maintain a greater or currently -- especially -- as the November set.
So to conclude, I would just highlight that after the long term dedicated, especially with compliance, monetization is -- next level from -- standpoint.
And as you said that, I will move back to [indiscernible] Harshil.
Thank you very much, Paolo, for that update. Hello, everybody, a very good afternoon to you all. I would like to brief on the financial performance for the quarter ended March 31, 2024, and also for the full financial year.
So as you would have already seen the presentation that we have uploaded, there were a lot of one-offs in the last quarter as well as for the full financial year this year, we can go to details earlier on.
As far as the revenue for the quarter is concerned, there was a growth of 6%. So from INR 618 crores for Q4 of FY '23, we moved to INR 654 crores for Q4 FY '24. And EBITDA, as adjusted for all of the one-offs last year, Q4 FY '23, we get [ INR 283 crores ] as compared to that, we were closer to [ INR 100 crores ] for the Q4 of financial year '24.
As far as cash generated from the operations is concerned, we generated close to about INR 400 crores for the full financial year. And for the quarter, after the one-offs, it was around [ INR 75 crores ].
As far as the revenue for the full year is concerned, we closed the year with INR 2,616 crores of revenue, which is a growth of 8.5% over the previous financial year, where we closed with a revenue of [ INR 2,413 crores ]. The EBITDA stood at about INR 409 crores for the full financial year '24 after adjusting for the one-off, which still at about INR 414 crores in financial year '23. The cash profit stood at INR 303 crores as compared to INR 326 crores in the previous financial year.
Taking a look at the segment-wise performance of the revenue. Carbogen Amcis ran did a revenue of INR 449 crores for the fourth quarter of financial year '24, this was -- and this also includes the revenues related from our facility in France. So though we did not achieve the expected revenue of our France because of various factors that we build -- still, there was a growth in some -- revenue bans as compared to Q4 of financial year '23 by about 3%. And for the full financial year, there was a growth of 15%, where we ended the year with INR 1,953 crores as compared to INR 1,700 crores in financial year '23.
The cholesterol and vitamin D analogues business for the quarter did a revenue of INR 91 crores, which is a growth of -- for more than 2% as compared to Q4 of financial year '23, where we did a revenue of about INR 60 crores. And most of this growth is contributed by the vitamin D analogues subsegment within the widening of Carbogen Amcis business where we saw quite a significant amount of growth in Q4 of FY '24.
On a yearly basis, the revenue increased by about 23% for the cholesterol and vitamin D analogues business where we grew -- INR 332 crores as compared to INR 270 crores in financial year '23.
As far as the India business is concerned, we already started seeing the growth in the CRAMS revenue from Q4 of FY '24, where the goal for that 16% as compared to comparable quarter in financial year '23. So we did -- INR 85 crores of revenue as compared to INR 73 crores in Q4 of FY '23. For the full financial year, we did a revenue of INR 215 crores as compared to INR 245 crores in FY '23, which is a decrease of about 12%. As now we have all the necessary regulatory approvals, especially from the EDQM and other market for the India business, we do expect the India trend revenue to increase substantially from hereon.
India -- and generics business, which is launched out of our -- facility, did a revenue of about INR 29 crores in the quarter as compared to INR 49 crores in the comparative quarter of last year. This growth is largely attributable, and it's the same reason for the full year that there was again a degrowth. This is largely on account of a slowdown, therefore being experienced in the -- especially the -- chemical industry. And also, FY '23 was more -- exceptional year where we saw a lot of orders being served in that year, which was like a deferment of the orders from FY '22.
So overall, on a consolidated basis, as I mentioned earlier, there was a growth of about 8.5% for the full financial year as far as the revenues are concerned. And for the quarter, that stood at roughly around 6%.
As far as the segment-wise margins are concerned, on a quarterly basis, the Carbogen Amcis -- business segment did a EBITDA margin of about 15.5% after existing for the one-off, which was at 16% in Q4 of FY '23. For the full financial year, this translated into 17.7% as compared to 20% in FY '23.
Cholesterol and vitamin D analogues business did a margin of about 25% in Q4 '24 compared to 13% in Q4 FY '23, largely because of the increase in revenue of the vitamin D analogues. For the full financial year, we stood at 17.8% as compared to 17% during FY '23.
India CRAMS -- API and intermediate business is concerned, is an EBITDA of about 5.2% as compared to roughly 2% in Q4 of FY '23. And the cost in generics business did an EBITDA of about 7.2% as compared to 7.2% in Q4 of FY '23.
So overall, the [ third quarter ], from a quarterly perspective and the year perspective, it was a good year for us in terms of revenue as well as operating profit as all the entities, but the performance as reported, looked quite subdued, largely on account of the delay in the operations in our French entity. And as Pascal also mentioned, most of those issues, which were largely related to the machine failure have already been resolved now. Those are all technical issues.
There is no issue on the market side, on the demand side of the product, and we do look forward to -- French being a significant contributor to the overall consolidated performance from here on, both in terms of revenue as well as profitability.
As on 31st of March, we already have confirmed orders of about EUR 9.5 million for the French entity. And another EUR 7 million of orders are expected from the -- of proposals, which have been planned for about EUR 90 million.
Just to give a little bit more highlight on the CRAMS performance for the quarter. We reported a negative EBITDA of about INR 47 crores. And for the full financial year, this was reported at about INR 97 crores of negative EBITDA. So if you adjust the -- for the quarter as well as for the full financial year, in addition to some of the other one-offs which have been highlighted in the presentation, the EBITDA for the year stands at about INR 408 crores.
The -- adjustments, one is the -- IT project cost, which is expensed out in the P&L because of an increase in duplication, so that amounted to about INR 9 crores. There was a onetime adjustment because of inflation in the remuneration, in the input cost, which amounted to about INR 31 crores. There was a onetime maintenance on refurbishment expenditure which had to be recalled at all of our locations, which was one-off -- which was also one-off nature and -- that amounted to about [ INR 22 crores ].
We also provided for a -- reclamation in our Carbogen Amcis -- BB facility, and that provision stood at about INR 4 crores. And there was a notional ForEx impact of around INR 10 crores for the full financial year.
Talking about the ForEx impact, even just on account of -- especially on the -- item on our P&L, which is the employee cost, that was a negative impact of almost INR 100 crores, which is not reflected as of foreign exchange fluctuation [ different ], but it never into the employee cost, which is reported for the full financial number.
So net debt, on 31st of March '24, stood at about [ CHF INR 153 million ], which at the beginning of the year to at about [ CHF 159 million ]. So that was an increase by about [ CHF 4 million ] as far as the net debt is concerned. The capital expenditure for the full financial year stood at about [ CHF 31 million ], so which is more -- more or less in line with the guidance that we have mentioned.
So this was a brief update on the financial performance for the year and for the quarter. And with this, moderator, we can move on the floor for Q&A.
[Operator Instructions]
We take the first question from the line of [ Ankit Manoj ] from MRR Capital.
Am I audible?
Yes, sir.
Yes. Having a look at your investor presentation, I mean, FY '22, FY '23 or FY '24, the one-off item is on the exceptional items of EBITDA have -- kind of contributed a high number, which ends up changing the EBITDA margin significantly. So my first question would be to understand what is your understanding with regard to these one-off items moving forward for the next financial year?
And secondly, in that case, could you help us with what could be your final EBITDA margin for FY '25 considering that we might also have some one-offs in FY '25? So do you want to understand the final EBITDA number, including one of these one-offs [indiscernible]?
Thank you for this question. So you are sort of right, one of the -- factors which impact the numbers on a consolidated basis as reported, one of the -- impact is on account of the foreign exchange fluctuation just on account of the translation of the numbers from various currencies into INR.
So just to give you an example regarding the employee cost, if you see the first P&L, the P&L for Swiss franc -- to employee costs. which is all reported paid in Swiss franc. However, when it's consolidated into the numbers for reporting purposes in India, all of that has to be reported at the average exchange rate of the Swiss franc to the INR. And that is just one of the examples where we have seen an impact of almost INR 100 crores for the full financial year.
So, yes. I mean to a certain extent, we do hedge our receivables, our cash flow that will be coming from our customers. But on the cost side -- and the net position is what we hedge. But on the cost side, just on account of translation, that will always have an impact when the reported numbers are taken out. And it could be on either side if the exchange rate is in our favor in the cost could even be lower.
Now the argument of that could be said on the revenue side as well, there could be a benefit. But if you see most of our revenue, they are in U.S. dollars. So if you have observed the U.S. dollar to INR conversion, the exchange rates have more or less remained stable over the last 12 months. So there is not a -- of an impact just on account of the translation of the revenue in different currencies due to INR. But on the cost side, we have seen a major impact.
The other one-off, if you see, like if you just consider the current year, the French operations, we were expecting that in Q4, that would at least be a breakeven at the French operations considering the revenues and the cost for that particular quarter. However, because of the unexpected issues, because of which we were not able to generate that much amount of revenue because of the period of the trial batches, that was an exceptional cost that we had to incur and all of that is booked through the P&L.
One of the nice things in France is already ready for operations from November of '23. So it is no longer possible to capitalize any of these expenses to that particular line to the manufacturing line. And all the expenses are diluted to the P&L, which is not an exceptional thing because we have yet not able to generate the revenues from that particular line, which now with the resolution having been achieved, we should be able to generate that.
In the last 3, 4 years, we had these issues in India because of the EDQM observations that we had received, and there was a substantial amount of cost, which was also incurred for [ EDQM ] France. Part of it was passed through the P&L, which now going forward, we do not expense to incur.
So as far as financial year '25 is concerned, barring any kind of impact because of the cancellation, because that is something which obviously we would not be able to know, we believe that a 20% kind of EBITDA margin is what we are looking forward to at a consolidated level.
So there is something, which is our target because when we make our targets on a consolidated basis, we will have a positive number for the revenue for the EBITDA, and that takes into account the same exchange rate as we have right now. So that is something that we expect.
On the positive side, as far as our Dutch entity is concerned, in the last call, we did mention about the increase in the raw material cost in Netherlands because of the increase in the -- prices, which is the major raw material for the particular business. So over there, in the current financial year, we are -- that the prices should come down and that should have a major impact -- positive impact on the margin in Netherlands for the full financial year.
So yes, I mean -- and those costs work out normal cost in the past, though we would like to want those costs to be reduced even further.
So I think coming back to your question on a normalized basis, a 19% to 20% kind of EBITDA margin is what is seen for financial year '25.
And there was also -- so this has not adjusted EBITDA versus actual EBITDA margin that we're talking, right?
Yes, this is actually -- because right now, we are not considering any kind of one-offs, will happen in the next financial year.
Right. And in terms of PAT, would you have some mention as well?
Sorry, in terms of -- taxation?
Net profit, net profit basis.
Net profit basis, I don't have the estimated figure right now in front of me. But yes, I mean as far as the interest cost is concerned, barring any kind of quiet calculations, we believe that the interest cost should, in the words -- remain at the [ previous level ], but we are already working on different initiatives in order to reduce the interest cost, which would be taking the borrowing in Swiss francs, which will be -- swapping some of our loans into Swiss franc from U.S., which will help us to reduce the interest cost at a consolidated level.
Plus, as far as the depreciation and amortization is concerned, the depreciation right now already take into account the additional depreciation because of the operationalization of the line in France. So we do see an additional impact because of increased depreciation coming out of France unless, and we also start line 2 later in the later part of the year, where the depreciation charge for a part of the year margin [ might increase ].
The tax rate for us would more or less remain at the same level. So roughly around 20% to 25% has been our historical tax rate and more or less it would remain at that level.
So those are the items below the EBITDA. One of the things which we write off as part of the depreciation and amortization is the goodwill, which is sitting on the balance sheet at an -- stand-alone level, and that is something that will continue. So that is to the tune of about INR 45 crores per annum.
Right. I have a lot more clarity. My second question is with regard to -- there were some notes with regard to the reach of the venture covenants. So could you please just -- you add some more color to what exactly happened and what is the situation?
Yes, no problem. So basically, for one of the loans that we have taken at Carbogen Amcis -- there are certain covenants which the banks specified for the loan agreement. And there was a bridge in the covenants as on 31st of March. So we have already received the proposal and the -- focus on the bank as far as giving us a covenant holiday for the next 12 months. There are certain other -- conditions which we are deepen with the bank. So we should get the final -- letter from the bank in the next days I would say.
The next question is from the line of [ Karan Agarwal ] from Old Ridge Asset Management.
Just a couple of questions. One, on these covenants, actually, if you could explain what are these covenants that have been breached? How critical are they? Why were they reached?
Number two, if I go through the investor presentation on Page 12, right, you've listed down -- and this is further to the question that the earlier participant post, you've listed down some onetime expenses, right? Now the thing is that how one time are they in the truest sense? Because we keep seeing them recurring for an exceedingly long period of time.
And just to bring your attention, the ForEx loss there seems to be about INR 9.69 crores. But in Q3, you all did incur a INR 76 crore ForEx loss, which is shown as a separate notes to account. So just wanted to get your thoughts?
Sure. So answering your first question. So as far as the covenants with the banks are concerned, so we have -- so there are two covenants we have specified. One is the -- leverage ratio; and secondly, the economic equity ratio. So what the banks have specified is the [ 4x ] of net leverage ratio, while as of 31st of March, and the -- and this is just at the Carbogen Amcis -- level. The net average ratio stood at about 4.8x. And as far as the economic equity ratio is concerned, the specification is 40%, and we were at about 33%.
So we had already -- the bank has already given us the proposal for the waiver of this covenant. And we are trying -- so they have specifically mentioned about the 12-month policy to [ June '25 ] for testing -- equivalent. And we have given them a counter proposal. There's a holiday is okay, but there are also certain other terms and conditions in the existing agreement which we will want to be better than what they are stipulated right now. So that is the negotiation, which is ongoing with the bank, and we do expect a -- letter in the next 2 days. So that's on the covenant part.
Do you have any further questions on that one?
Yes. I mean what percentage of your overall debt is sitting out of that entity?
So I would say, entity, that would be on a net debt [ this year -- increase ] that will be close to about CHF 100 million.
Okay. CHF 100 million?
That's correct.
Okay. Okay. And when you say net leverage, you -- my sense is net debt to EBITDA, correct?
Yes, that's correct.
And the second ratio, which you referred to, how do you define that ratio?
That's reasonably largely picking the debt to equity.
Debt to equity, okay, sure. Yes.
So -- is that needs to do like as part of -- 60% of the total assets and equity of 40% -- [ 67, 33 ]. And the reason for the breaches because they would just in the reported numbers and to add back the negative EBITDA of France, then we are actually not breaching any of this covenant. So that is already understood by the bank. And there's a couple of points where we are in the bank and we should...
So France, it's consolidated into that entity, is it?
Yes, that's correct.
Okay.
So, okay. So coming to your second question, as far as the one-offs are concerned, so one of the major part, as I discussed earlier, is the EBITDA loss due to the France facility, which the EBITDA impact, while for the full year, the negative is about INR 96 crores, and about INR 46 crores of that is kind of a one-off, which we do not have in the business -- incur in the future. So these all costs related to resolving the -- of the machine as well as the incremental cost that we had to incur because of the trial batch failures, et cetera. .
So this is actually a one-off, which we -- is now the resolution to the issues have already been done. We don't expect this to be recurring in the future.
The second one is related to the IT costs. So in France, we implemented the 365, the Microsoft 365. And logically, all of the license costs as well as the implementation costs should be allowed to capitalize and that's what most of the company do. But as far as the IFRS is concerned, the reporting of the overseas entities happened, there was an -- paper which came out, which said that all of the reports have to be expensed out in the P&L.
So while it's not as such related to the operations of the company, all of those parts are being -- to the P&L and that amount is roughly about [ INR 9.1 crores ] for the full financial year of '24.
Now the implementation of this 365 has already been done from. There would be certain recurring costs which would have to be for every year, but it would not be to the tune of this [ INR 9.9 crores ], which will have to be for every year.
As far as the employee benefit expense is concerned, last year, as you know, because of Russia-Ukraine war as well as the global interest rate increasing everywhere, there was a huge amount of impact on the inflation in all of the countries, especially in -- in the U.S. So for all things, most of our entities are being involved, there was -- I mean, we had to provide for a onetime employee and -- correction due to the high inflation, and that amounted to INR 31 crores.
Now that the inflation rates are actually coming down. The entities are actually looking to put the interest rates, there would not be any incremental inflation cost or the incremental salary correction that would have to be done in the current financial year and going forward.
There was also a onetime refurbishment expenditure, which had to be incurred at the -- location, which was more in terms of refurbishment of the -- as well as IPs, et cetera, which was like a sort of a mutual overhaul that we had to do in order to make sure that there are no issues as far as the production for the future is concerned. And that amounted to INR 22 crores. This is in addition to the normal maintenance [indiscernible].
The provision for the soil recognition, this is specific to Netherlands to the tune of INR 4 crores. And this is on account of changing the soil, which is -- or bringing the -- which is required for manufacturing the product in Netherlands. So over a period of time, there are -- of other companies we had mix with the soil. And since that was identified in the soil, we have already provided for that regulation. The cost might be incurred over a period of time, but all of the provision was done in financial year '24.
The ForEx loss of [ INR 9.5 crores ], that is all notional in nature. To your point, the loss that we have booked in Q3 of financial year '24 or roughly around [ INR 76 crores ]. So that move a log, we have already realized the profit on that particular -- So that is something which is not reported as a one-off, which was reported in Q3. So move of that INR 76 crores, so roughly about INR 65 crores of that investment loss has now been realized as a gain in financial -- in the Q4 of financial year '24. So that is on that impact is not taken into the full year financial result. And -- the balance of the INR 9.69 crores is the actual ForEx impact, which is taken for the full financial year.
Got it. Just two things, right? One, Harshil, and to the management, conscious feedback. I mean the number INR 46 crores for the French business and the INR 22 crore number as onetime maintenance expenditure, on top of the INR 300 crores of CapEx that we've done in FY '24, I understand that onetime start-ups could result in some overruns. But the number that you're calling out are quite sizable. So I would request you to be a little bit more conscious about it, please going forward? That's just a sincere request.
The second now that when I look at the business now -- is clearly out of the woods thankfully. And overall, my sense is all your capital outlay maintenance, everything around your sites seem to be in order. And on top of that, what I read in the presentation is looking at about EUR 90 million of RFP in the French business.
So when we put all of this together, is there a reason to believe that whatever we've seen over the last 4, 4.5 years, and I mean, from FY '21 onwards, things should look materially different for the business, both on P&L as well as cash flows?
Yes. So we so and obviously, to -- but yes, I mean from FY '25 onwards, we do expect that, as you correctly mentioned, most of the CapEx cycle loans is -- The last thing that we are currently undertaking is the digital transformation across all of the locations. But apart from that, most of the larger CapEx events are already completed.
So apart from the routine maintenance CapEx and one -- efficient plant that we are setting up in -- we don't see any -- CapEx [ outlook ] that should happen from FY '25 onwards.
As far as the revenues are concerned, as I had added earlier, all of the entities have been performing quite well in terms of the revenue. And the France operation also now starting to contribute because revenues right from financial year '25, we don't see a reason why we cannot grow in double digits as far as the revenue are concerned.
As far as the EBITDA and the cash flow is concerned, that should be growing at a much faster pace largely because, one, we don't expect the kind of EBITDA loss that we have seen in France to be incurred in the future. But with the efforts that we are putting in, in terms of the cost controls, in terms of trying to see various alternatives in order to reduce the raw material costs, not just for Netherlands, that the cost can increase substantially, but across the group, that should help us in reducing the operating expenses for the group as a whole.
And as I also mentioned earlier, we are also working on the interest cost for the group. And as we start generating the free cash flow, one, it will help us in reducing the net debt on one side. And second, we are diligently working on -- the interest rate for the group as a whole. So we don't see any reasons why the cash flow generation should not be healthier than what we have committed over the last years.
Okay. And if it's not been given already, what's the CapEx guidance for FY '25?
So FY '25, we expect that the capital to be somewhere between [ $25 million to $30 million ].
And I mean, historically, about $15 million to $18 million is what you guide as maintenance CapEx. So my sense is that number continues, right?
Yes. So roughly about $18 million would be more of the maintenance expenditure and -- was fully to complete the digital transformation project as well as, as I mentioned, a certain amount of CapEx that we need to do between -- and -- in India. So about $25 million is what we expect, should be incurred in FY '25.
[Operator Instructions] The next question is from the line of [ Ganal ] from Garg Advisors.
So two questions. First is on the balance sheet side. If I look on the consolidated assets, I see there is a INR 500 crore work in -- even as most of the CapEx is done. And why did we have INR 500 crores of [indiscernible]?
Sorry, you're talking about the capital working progress?
Yes.
So the capital -- you see in the previous year, the capital working progress was about INR 996 crores. As compared to that, it has come down to about INR 500 crores. So this INR 500 crores largely includes some of the CapEx in France, which is -- So as I mentioned earlier, the Line 1 in France, we stopped -- so we basically catalyzed the line in November of '23. And then there is the second manufacturing line, which is yet not operational, and we expect that it could become operational during the course of the current financial year. So that would be capitalized when it is ready for use. .
So major part of it is related to the second line in plant. And apart from that, some of the CapEx that we have done in India as well as in the other entities in the point at which it would go from the CWIP to the property, plant and equipment will be when that CapEx is ready for you.
So one of the expenditure, as I mentioned earlier, is also the digital transformation that we are undertaking at previous recession. So most of that cost is catalyzed right now as and when we go live with the fourth sales -- in Switzerland in the current finance year that will also be -- that in progress.
So is it fair to assume that this number will be around, let's say, by the end of September quarter and will -- balance sheet. This number should be close to INR 150 crores, which should be continuous [indiscernible]?
Yes, it should keep on reducing as we keep on operationalizing this asset. So yes, I mean, whether it would be September or December, it's just a matter of time. But yes, over a period of time, we should see this number going down.
Okay. Sir, next year, like if you look at -- and the development, it has gone substantially up by INR 100 crores. So like what happened? What made the cost there?
So there is a word just a second just took out the breakup. So that is largely on account of certain products, which we have in the portfolio that we are developing on our own related to the vitamin D product. So one part of that is because of tax vitamin D development that we are doing.
Apart from that, there are also certain intangibles on account of -- well, one of the reason is also the ForEx impact on the intangible, and that is also true for all of the -- where all of these assets are stated at the cruising [indiscernible].
So these two are the immediate impact, but I can also be on to discuss this all times once I have the [indiscernible].
Sure. So just when I look at the provisions on the equity liability side, I think we have again gone up substantially right, from [ INR 233 crores to INR 303 crores ], so substantial jump in provisions. So like what happened there?
I'm sorry, but this line item are you looking at?
So we can -- if you look at on INR 233 crores to INR 303 crores, [indiscernible] INR 29 crores?
So the provision, one would be on account of the employee benefit expenses. So where on account of the additional recruitment has been done, there will be an increase in the provision for the employees. So that is number one. So the pension provision, which was INR 189 crores in -- as on 31st of March '23, that has increased to about [ INR 323 crores ] in. So this is on account of the change in [indiscernible].
As you remember, last year -- from last year to now, there has been a substantial movement in the interest rates. So because of that, the impact of provision that needs to be made for the pension. So that is the major impact. But there is no impact on account of -- there is no cash impact of that. It is also a provision which needs to be restated at the end of this year.
Similarly, if you look at noncurrent liabilities that again went from -- to [ INR 448 crores ] right to be a substantial jump. So what happened here?
You're looking at the noncurrent liability?
Yes.
So that is largely on account of the prepayments that we have received from our customers. So the prepayment, which was at about INR 148 crores in -- as on 31st of March '23, they had increased to about INR 418 crores as on 31st of March '24. So that -- there is basically directly connected to our business where for the development orders that we received, we will be working with -- 30% upfront advance that we would be getting from our customers.
So since the development orders have been increasing, and we have also mentioned in the presentation, we're currently doing on development orders in excess of [ $140 million ]. So that is on account of there is that represent the prepayments that we receive on these orders.
Okay. Okay. The [indiscernible] on the business side, the one thing was on the CRAMS business, right? So in that model, the growth in YoY if you look at from Q4 '23, Q4 '24 -- [ 9% ], right? In the last one, remember, you mentioned that from the new switch facility were -- getting applied. I just trying to understand like why that growth is not visible here -- business, what downward happened here keeping pace of I understand [indiscernible].
[indiscernible] Of an entity, which are comprised as part of the Carbogen Amcis CRAMS, that includes the Swiss entity, the U.K. entity -- entity and the French entity for now. So France, as it starts contributing substantially to the overall performance. So that is from the current financial, we will be classifying France as a separate entity.
So one, there was a decline in the revenue coming from France because of the delivering operations of this particular plant of the new facility that we have set up. So that is number one.
As far as the Swiss entity is concerned, there is already a growth in those Swiss entities. And that is a storage as well [indiscernible].
As far as the U.K. entity is concerned, again, there was a degrowth in the U.K. entity. And that was largely because one of the major customers for U.K. has decided to -- on a -- product was not being manufactured then by the U.K. entity in the full financial year as we had estimated. However, that customer has now come back, and they did as we do expect that cash should come back to the level of revenues that -- earlier.
So this is a broad -- I mean, composition of the entity, Shanghai has been performing well, but all of the sales that Shanghai the Swiss entity. So if you take out France, if you take out U.K., the percentage of growth would be close to about 7% to 8%.
Okay. But I think in the previous call, you mentioned right, that the CRAMS business can continue growing at mix to mid-teens. So I think that is the number that we should work with for FY '25 and '26, right?
Yes. So that would include all of the France businesses across all of the entities that we have. So that will also include India CRAMS. So as we mentioned earlier, we do expect that the India CRAMS business should ramp up quite significantly from the numbers it has posted in FY '24 and the earlier year now that the regulatory clearances have been refiled.
So with that, I mean, that will be a major contributor in the growth in trend plus as the Swiss entity with the kind of order book that we are sitting on, we do expect that the Swiss entities will keep on posting and will be 8% to 10% kind of growth as far as the revenues are concerned. And also now U.K. also coming back on track, we do expect that the entity just in financial year '25, we do expect a 40% to 50% kind of growth because the base was lower in the last financial year.
So overall, if you take a combination of all of this, and right now, this has also improved the French entity. So France, from what it is doing right now with close to about [ $14 million ] of revenue expected in FY '25, and they should also grow substantially in the future. That will also be one of the contributing factors for the increase in the France revenue at a consolidated level. So we are up 15% -- 14% to 15% kind of growth in the CRAMS revenue should very much be [indiscernible].
So [indiscernible] is in the India entity, I think in the last call, you mentioned that you were expecting revenue between India, as it was the intermediate side that is excluding Naroda, we were expecting revenues to be INR 400 crores to INR 500 crores because of the plant, there was the shortage that customer reaches the product, right? Is it fair to assume that from INR 215 crores, we can make FY '25, you have the visibility to INR 40 crores, INR 50 crores site of revenue?
I think as far as the India, France is concerned, we should be closer to about INR 350 crores for the full financial year of '25. And so, yes, I mean, I mean, we can move to INR 500 crores, but that would take about 2 years' time. FY '26 is when we will be close to INR 400 crores as far as the debt prime is concerned, and then it could go to INR 450 crores, INR 500 crores in the year after. .
The next question is from the line of [ Satish ] from Annual Shares and Stock Brokings Privates Limited.
So I just want to -- I have 2, 3 questions. One is what triggered USFDA auditing for your development? And this was for the entire -- also some specific unit? Question number one.
And question number two is regarding the one-offs, which comes as a regular with it. Sometimes, it looks like a large expenditure. So it's very difficult for people to understand versus it becomes a normal part of our business. We had a new plant opening up in France, but I think in the last call, you had already told that things are working well.
And secondly, you have a breakdown of new plant and machinery with sales. So there is some really bad thing as we get the manufacturing and other as the management and so a new plant can we expect there can be a batch -- machine failure. So there is something which has seriously gone wrong. So I just wanted to know what has really gone wrong in terms of the plant -- French level. Suddenly, we have started incurring -- apply a different thing, but our fixed costs are so high. I think we will not even take on a [indiscernible] talking for next year, the cost structure, which is there. I think where cost at something like INR 40 crores per quarter fixed cost. So that's the INR 160 crores, that is not the revenue you're targeting next year.
So I just wanted to know it. And I think the problem is difficult to understand is we reported number maybe INR 50 crores but the adjusted number is INR 200 crores. So the difference of a 100%. It is very difficult for the market to digest the numbers. I hope you can throw some light on that.
Regarding the -- if I may, so from an external point of view, it could be seen as a big issue. And -- but from an internal point of view, you have to see that as a start-up of a new facility in a quite complex environment because -- arising about as in line with a very complex mechanism fully automated. So yes, from time to time, you have to fine tune and what you were expecting from the line that's performing as we wanted -- and that's all those time on work that takes a lot of time to raise of.
It was not entirely expected. Although we were using -- provider for those lines, well known with a high ratification. But still, this is the startup of -- facility. So it's not consent coming out of the new just like this, and we just talked a bit on and everything works, which is not far complex than this. And we are the first and so far the situation because, yes, we are ordering and that we cannot execute it.
So yes, from a market -- difficult understand, but I can tell you that from an ovation perspective, it is a more richer [indiscernible]. The good news is that now the problem our results, and we are looking forward to elicit our orders, and we are going to match the targets that we're having now.
Paolo, can you answer [indiscernible].
Yes, yes, yes. For what concern, the USFDA, USFDA was a general audit. The last part -- in 2018, this was audit. So the auditor, as you mentioned before, came it was not an unmanned audit was already bias and the editor the products run in condition, and we clearly mentioned that in general. So all the site in our [indiscernible].
You want to unite hyper-fast is approved?
And it is a -- part of the site the only unit which is excluded the deceleration plant because the normal commission plants are going [indiscernible] approval. The rest is agreement [indiscernible].
I'll ask you Yes, Yes, maybe I did not mention anything in my opening speech. But regarding our formulation plant. So you all know that we are on [indiscernible] plant brand, which is a brand new plant. But we started operation, and we are developing many different products. We are developing many different formulations, and we are looking to -- business.
And we started already supplying the same commercial venture also to [indiscernible]. So these are I mentioned that this is another part of our deal that we are going to strengthen as much as possible in the coming years. So I did not mention that I think is the value set this formulation plant.
And -- just to answer your question on the one-off. Yes, I mean, over the last year, we -- especially last year and this year, we did have certain of largely because of these issues, especially this year in France. And that actually is a one-off because we don't expect this call to be incurred in the future.
As far as the breakeven point is concerned, yes, to your point [ EUR 40 million ], we will not be breaking even. The prefund will be close to about [ EUR 18 million to EUR 19 million ]. And that is what we are targeting to achieve over the next year. So especially in the year after, the revenue should be much higher than what we are expecting in the current financial year.
The next question is from the line of [ Satya ] an Individual Investor. .
Am I audible?
Yes, sir, you are.
Yes. I just have 1 -- 2 questions. One is recent clearance of our -- and all. So this effect substantially -- which quarter onwards, we can -- I mean we know it's already seen some Q4 onwards. Substantially each quarter onwards we can see? And can you throw us some guidance on the revenue, EBITDA and PAT levels going forward for the coming quarters, FY '25? .
Sorry, just to understand, you're asking about the audit -- that we recently received?
Yes, yes, yes. So with that having been we have got the clearance ologies that we know. Like are we already in talks with any potential partners? Or are we seeing any revenue is that's what I'm asking.
Sure. Yes. So with this clearance having been received, so the dilution in benefit the group from various subside. One for the existing customers, especially for the -- side, the only a to sell the product in certain geographies with or certain areas of -- which now they are able to do so. And because of that, we are expecting an increase in the orders and we already see that we're seeing an increase in the orders from the existing customers where the commercial supply are being supplied out or will be supplied of -- So that is number one. .
Number two, we have already seen new customers coming to the -- side. And all of them have been extremely impressed with the kind of changes, the kind of practices that have been put into -- And we do expect that there should be new orders coming in from those customers.
And thirdly, at a good level, we are also trying to collaborate internally quite closely. So what it means is that we will see certain projects -- from the Swiss entity, to the Indian entities which will help us, one at a good level from a revenue perspective, but more so from a margin perspective. Because in India, because of the cost base -- of the lower cost base, we are able to manufacture at a more cheaper cost than manufacturing in Switzerland.
So from all of these three perspectives, the regulatory clearances do help us in getting up the business from India and the conflating to the improvement as well.
Yes. I just wanted to -- I mean, as a forward guidance, can you quantify this probably how much EBITDA and PAT level we can expect for the coming quarters in FY '25?
So FY '25 on a consolidated basis, at -- we should be seeing a 10% kind of growth in the revenue side to 12%. And at an EBITDA level, as I mentioned earlier, close to about 18% to 20% is our target. .
Okay. PAT level, sir?
On a cash front basis, we should -- with most of the CapEx program being done, we do expect that we should generate free cash flow from financial year '25, and the cash profit should be close to about INR 500 crores as far as go cash flow from operations is concerned, INR 400 crores, INR 500 crores.
Yes, yes. And where are we -- I mean, what is our company see the debt levels going through going forward for FY '25, '26?
Yes. So as far as the net debt is concerned, we don't expect a significant increase from here on. On the contrary, as the free cash flow keeps on getting generated, the matter over the next 2, 3 years will keep on reducing. So that is what we expect.
And as I also mentioned earlier, we are working on data from in order to see how we can also reduce the interest cost for the group as a whole.
We don't see much increase, that's what you mean to say going forward?
Yes, because right now, we don't have any major CapEx program. Most of the CapEx you see over the last 3 years, the debt has increased largely because of the CapEx that we have done in France, plus the co-investment projects in Switzerland, plus addition of certain -- and the CapEx that we have to do in Babla and Marora. [indiscernible] to address the regulatory observations, but also taking into account that this Pala and Marda are going to be one of the major factors for the road of the group as a whole.
So now that all of those teams have been completed and most of the assets have been operationalized, we don't expect any major CapEx to be incurred. I mean most of it is already incurred and the either you see a substantial drop in the capital work in progress as well in financial year '24.
Okay. Sir, one question on the print side, whatever -- functions were there reported. So usually, they won't come under any kind of insurance coverage kind of thing?
So that is exactly what we have pursued. So we are already filing a claim against the supplier as well as we are filing a claim to the insurance company. But right now, we don't have anything concrete. So that is the reason we aren't able to book anything into the P&L.
But yes, I mean, if the claim comes based from the supplier or from the insurance companies, that would be there will be an incremental income, which would be booked.
How much -- can you quantify that, sir, is that if it comes [indiscernible]?
Pascal, would you know that -- exactly?
Approximately.
No, it's difficult to say right now in putting a number -- we drive through to certainly on. So I won't go into that direction, but we are looking to get a compensation for what we have suffered from this unexpected delay in the stocks. But it's very difficult to put a number because there is many, many parameters that come into account on top of that.
The next question is from the line of Ankur Agarwal from [indiscernible] Wealth Solution Private Limited.
So why is the employee benefit expenses pretty much higher [indiscernible] sales, just like 46% or 47% of the total sales with the other pharma companies which you have in this?
So 'if you do our business, we are a -- company. And the most of the development work for the new molecules we done out of parts with an [indiscernible]. So as far as the development work is concerned for the new chemical entity, the -- costs that you have to incur the manpower cost.
So today, we have about 500 -- working for us. And all of that cost is the -- cost that we see in the consolidated P&L. If you give the Switch P&L, the entire cost as a percentage of the revenue would be even higher at close to 52%. And -- but obviously, that work is important in order to make sure that we are able to develop the molecules for our customers with some of them going into the commercial phase as -- if those are successfully developed through all of the -- of development.
So that is a direct in case of the employee cost to the revenue that we derive from the development of new molecules. I don't know which complete we are comparing with. But if you are comparing with any of the pharma company, this would be a wrong comparison as most of the union pharma companies there into development of [indiscernible] as well as -- and we will have -- very small portion of the business -- of the entire business model is linked to the development of new molecules The early sales was as well as Phase 3 is to offset entity.
Sure, the margin should be more than 40% we have the very low margin if we are doing such work?
The margin, if you see, you have to basically break it up into three parts. One is the margins on the early stage development. Second is the margin on Phase III and third is the margin on the commercial manufacturing. So we basically earn our highest margin generally taking in Phase III.
As far as the early sales development work is concerned, the margins are quite low because we see the probability of success of the molecule is quite low -- phase of the development. it increased substantially as the molecule [indiscernible] Phase III. The quantities required are much higher as well as a lot of valuation work happens.
As far as the promotional manufacturing is concerned, there would be there be a slight depreciation in the timing price that we will be offering to our customers because kind quantity increase quite a bit. The customers also expect to discount on the price. So that is how the market should be looked at.
As far as the larger scale commercial manufacturing is concerned, that's where our India play comes into the picture where we are able to generate a much higher margin than we will be committing from our other locations -- will then be manufactured at a much higher sale. The cost of manufacturing is quite low, and that helps from a group EBITDA perspective too. So that is how the overall margin needs to be looked at.
But sir, if the cost of material is so low to then we have to think about how to increase our margin because it will not work in the future if the employee cost is so much high.
Well, the work that we do out of the up entity is extremely important for the survival of the valorization because that was basically is to develop the new molecules. And if those nonpolar not developed out of the -- in one of the concerns for the customer is also protection of the intellectual property lines of the molecule. And that is the reason we didn't want to keep the molecule in the countries of the infrastructure and bit protection malls are extremely strong.
And that was the basic purpose of acquiring this entity in -- So having the -- down really helps us from a group perspective, where today, we work on, at any point in time, on about 500-odd molecules across different phases of development. This would not have been possible if we did not have this presence in Switzerland.
So the right way to look at -- looking at the gross margins and right way to look at the gross margin is to take into account, not just the raw material costs, but are also the -- cost because the revenue includes the development revenue as well as the commercial revenue.
Just to that apart from the survival of the organization, it is also important to artist not just that. It is also survival of the people SP1 Because no store molecule, all of the molecules are of life-saving categories. So the work is important in that aspect as well.
The next question from the line of [ Ankit Manocha ] from RLR Capital.
So on the France business, you've -- what is the EBITDA loss and we can kind of expect for FY '25 versus the INR 46 crore number for FY '24?
So FY '25, it would be close to about [ $4 million to $5 million ]. So that would be close to about [ INR 45 crores ] to INR 40-odd crores, which in the last financial -- or financial year '24 stood at about INR 100 crores.
Sorry, this is the -- so the number that you declared in absolute incremental EBITDA loss is INR 46 crores, and the total EBITDA -- INR 100 in this should go down to INR 40 crores, is that correct?
Yes. So the INR 100 crores, it is the INR 46 crores of incremental EBITDA loss. This would not have been there if we had basically done the revenue that I said -- was expected. There was no such issues as far as the delay in operations in funds are concerned.
So if you look at absolute numbers, we do the INR 100 crores of loss in France in FY '24, which in FY '25, we expect that it should be somewhere around INR 35 crores, INR 40 crores.
Understood. And just a question on the results. So the reserve number seems to be really large. Is there something that it can be -- for considering the current situation?
So you're talking about the equity results?
The results on the balance sheet? Yes.
So that is largely the securities premium, which is part of the equity. So that is -- I mean the revenue we are free to use. But as far as the cash is concerned, the cash generation for the year was close to about INR 400 crores from operations.
Okay.
Reserve that is basically the securities premium.
The next question is from the line of [ Rupen Shah ], an individual investor.
What is our ADC project starting?
Yes. The project has started. We are in the way of analyzing the validation batch at that point, which is the end of the Phase III for that particular product. The good news is that our customer is in big ambitions on the market and is finding for even more application for that. So that lead us even more -- for the future. So the progress is on time and the project is already ongoing.
So when can we expect around 2 weeks to start off this -- is it FY '25? Or is it FY '26? And what kind of revenue can you generate from that project or on basis?
It's even that because the different applications are probably between '26 to '31.
So when can we start the revenue is because revenue from that project, we have invested a lot in the deposit, right?
We are already doing revenues out of that project because we are running, as I mentioned, the validation campaign related to the Phase III of the current application. And based on that, there will be further applications using the -- with ramp-up of the volumes from '26 to '31 and beyond with a maturity around '30, '31 with certainly a peak demand by the need of the sales.
Okay. So your revenues will start from '26, that's what we can understand, right?
Yes, yes, yes. But this project is on time. It's just the pace of this -- it's a new can -- coming on the market with an existing application and there is several applications that the customer to apply in different markets. And all those new applications would come one after the other, and we've increased the end over all the year. So it's early -- growth of the volumes we are providing to that particular customer and partners from '26 -- and -- volume from '30, '31.
Okay. And how further west on the momentum from the next quarter onwards? This has been a -- of last 5 years -- I hope sincerely that management does well and from next quarter onwards, we are on something to share about.
The next question is from the line of [ Karan Agarwal ] from Old Bridge Asset Management.
Just a couple of queries. One, what are the total advances from customers as on 31st March '24?
just the [indiscernible]. So the total is for -- so the total comes to about INR 634 crores.
INR 634 crores, is it?
Yes.
Okay. And second, on the French business, right, I mean, about INR 46 crores was a one-off for FY '24. So realistically, about INR 55 crores of loss in FY '24. And you are looking at that INR 54 crore number coming down to about INR 40 crores -- INR 35 crores to INR 40 crores in FY '25. Have I got that correct?
That's correct.
Okay. So -- and you are looking at this breaking even somewhere in FY '26 or maybe even beyond?
No, it should be in FY '26.
The next question is from the line of [ Kanel ] from Garg Advisors.
A couple of questions. The first relation would be and given that we have all the systems made installed in a company. So why do we always put results which are at the end of the statutory requirement or regulatory requirements? Just trying to understand because, yes, I understand the company's focus is on the business. But you also have how the market uses the company, right? And as of now, if you see the questions also which are getting at. It just means that the market is not -- in the company. I think one of the key steps we start publishing the results a bit early, that would help.
I agree this first question, but this was a historically last year or even the year before, we try to declare the result somewhere between the 10 to the 20th of May. This time it just went a bit -- by another 15 days. So one of the things was we were -- we were hopeful that we just get for this opening -- that is disposed -- we were hopeful that we don't get the bar so that we don't have to be for or actually we keep at the point in the financial statement. But -- because of the negotiations because we want better -- if that is okay. So that was one of the reasons we tried to deliver it. That was number one.
And number two was just that you were just -- some of the directors were preoccupied with certain things. And that is the reason I've also got contributed in setting delay. But otherwise, we are coming to the -- systems that we have in India, and now what we are looking at implementing SAP globally, there is no reason why we have to deliver results beyond the 10 or 15 [indiscernible].
And the second -- in the conference, you say everyone is talking about the translation losses, right, that we incurred. Just trying to understand if we maybe we -- our revenues in dollars, right? That's what the deal that we do the customer -- and major is for the research facility even this -- right? I mean if we had the numbers, I think management has told that we are having the numbers. I don't understand why there should be a translation loss on these numbers. I understand that FX could happen -- in the last call that for employee costs, we are seeing is because of the translation there are losses that doesn't expense because the revenues are also in dollars, which we had. Then again, our cost base is also in CHF, if we hedge it, then there shouldn't be realistically any loss.
Yes. Yes. So as a policy, we would not be hedging like 100% of the U.S. dollar. There would be only a portion of the U.S. dollars to the Swiss franc that we had. And this what we are talking about is actually not impacting us from a cash perspective. So in the scenario where the revenues are in U.S. dollars and the costs are in Swiss francs, and we are just translating all of this into INR.
So basically, the U.S. dollar gets converted at the rate of [ 850 ] and it has remained -- 82% to 83% over the last 12 months. The medium movement that we have seen in the Swiss franc to the INR where the depreciation is to the tune almost 12% to 13%.
Yes. From a sales perspective, we would have a portion of the U.S. product to Swiss franc, but not the entire portion because from a cash perspective, it really doesn't impact this conclusion.
Okay. Okay. And then lastly, given that the May month is also over today, it's just 1 month left. Just want to understand a bit of what is happening on the Q1, how do you see Q1 happen? Because I think Q4 was -- it seemed like a horror in the number quarter lease. Last conference call, we were saying that in the printability might break even in FY '25, as there might be minor losses in EBITDA were not saying that we'll incur some INR 40 crores, 45 crores EBITDA loss in FY '25. Just want to make sense how should we look for, let's say, Q1, Q2, how should be the ramp-up? And I just want to have a trust in the businesses have been -- such a long time. I want to connect trust because I thought in the last call that everything is over because we got all the approvals, everything for -- getting operationalized and again something happened.
Yes. So I think apart from the French -- where now all the technical issues are over. And it was real unfortunate this was something that we were really not expecting would come up in the first quarter. We are as surprised as you are because we saw something which we could not predict and it was completely unexpected -- specialty.
But again, we are starting a new one. There are certain issues to be expected, and that is exactly what stock out in Q4. But the good thing is that those issues have been resolved, and there is a huge potential for that particular business, the drug products business. There's a huge demand for that kind of services that are being offered from the French facility and that facility becomes extremely critical for us as a forward integration of our entire business because now right from the development of API to be supplying the finished formulation, we have the entire offering for the customer [indiscernible].
So that should really put us in a different lead from any of our peers who we do not have the -- and solutions. So we are extremely -- about the entire business as well as for the French facility specifically. And we are putting in whatever efforts are required in order to make sure that we are able to generate profit, EBITDA -- we become EBITDA positive as quickly as possible from the French facility.
And as I have mentioned earlier, there are already orders in hand that are new that are expected, [ 90 ] of RFP, which have gone out. So we don't see any kind of issues in filling up that plant. It's just a matter of time. And that is what -- looking forward to filling lab as quickly as possible.
As far as our other businesses are concerned, if you see the major bottlenecks in India is now gone. So there is no reason why we cannot reach the same level as we used to do prior to the EDQM operation. and that ramp-up should happen quite fast as well as we get new orders from the existing customers as well as from the new customers.
As far as Netherlands is concerned, I mean we can easily increase the revenue, but then it is about the profitability. So we have identified the products which we want to sell. We have been working on the raw material costs, how to bring it down, and we have already seen the positive impact, or we could see the positive impact of it in the coming quarters.
So overall, nothing changes from what we had said in the last call, except all this issue that came up in France. So as now that normalizes, we do expect that financial year '25 should be a much, much better year than what we had in financial year '24. If we have to break it up quarter-wise, it is not ideal for our kind of business, but Q1, Q2 should be good quarters than what we have seen in FY '25, but we will see the second half of the year posting on much, much higher growth than what we've seen in the first half. So that is a broad guidance of how we see the full year.
And including the India business, I mean the -- that means the -- also get ramped up, we are seeing in H2.
That's correct.
We take the next question from the line of Ankur Agarwal from RC Wealth Solution Private Limited. .
So who we see the company in profit in tackle? So at a PAT level?
So PAT level of the things we can see on the balance sheet, we have been writing off this goodwill. So that is creating an impact of almost about INR 45 crores per annum. But apart from that, I think as far as the profit after tax is concerned, there some positive from FY '26.
FY '26.
Yes.
We take the next question from the line of [ Ankit Minsa ] from MR NR Capital.
So the 18% EBITDA margin guidance that you've given for next year, does that account for the losses that you imagine in the French facility for the year? Or will that again be a one-off?
No, that would include that as well.
As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Thank you, everyone, for your questions. It was a pleasure to answer them. And as we said before, thank you for your trust and support throughout this difficult journey that we have faced on analogy, which is at in our case is that of -- going through chemotherapy to get to the cancer after we get the cancer -- have some weakness initially that the value we will be able to not removing. So we will be patient once again. And thank you for all the trust. And we wish you a good [indiscernible]. .
Thank you. On behalf of Dishman Carbogen Amcis Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you, [ all ].