Strides Pharma Science Ltd

NSE:STAR

Earnings Call Analysis

A Promising Quarter of Growth

Strides Pharma Science Limited reported a strong performance in the second quarter and first half of FY '25, highlighting a significant resurgence in revenue growth after a period of stagnation. The company noted a top line increase of 17%, marking a strategic pivot from previous quarters where growth was intentionally limited to streamline operations. With a current projection of achieving revenue between INR 950 crores to INR 1,000 crores, Strides is aiming confidently towards the higher end of that guidance.

Impressive EBITDA Margins and Cash Flow

The company's EBITDA reached impressive figures with INR 452 crores representing nearly 45% of their target range. The EBITDA margin is rated to maintain a strong performance with expected values in the range of 34% for upcoming reports. Cash flow from operations was robust at INR 418 crores, reflecting effectiveness in operational efficiency.

Strong U.S. Market Performance and Product Relaunch

A standout factor in Strides' quarterly results was its performance in the U.S. market, where revenues hit $75 million. This growth can be attributed to the ongoing relaunch of acquired products, significantly improving market share. The strategic focus on specific products from the government portfolio has proven beneficial, contributing to overall revenue enhancement.

Key Guidance for Future Growth

Looking ahead, Strides provided optimistic guidance regarding product launches and revenue expectations. The management anticipates increasing product launches in the U.S., particularly for GLP-1 products, estimating between 5 and 7 new commercial offerings by FY '26. The company is projecting future revenue targets of $350 million to $400 million over the next three to four years, anchoring expectations on their rapid growth plans. .

Challenges in the Regulated Markets

Despite success in the U.S., Strides faces challenges in other regulated markets. Performance in regions such as Continental Europe has been relatively slow, prompting the company to recalibrate expectations for growth in these areas. However, growth in Australia and the U.K. markets has maintained a positive outlook amidst the slower segments.

Operational Efficiency Improvements

The focus on cutting operational inefficiencies has begun to pay dividends, as illustrated by improvements across various financial ratios. The net debt has decreased from INR 3,000 crores to INR 1,902 crores, with a net debt-to-EBITDA ratio now standing at 2.1x, showcasing competent financial governance and a robust operational approach.

Sustained Capital Investment for Growth

A continued emphasis on capital investment has been underscored by the CEO, with INR 92 crores allocated towards growth CapEx during the first half of FY '25. This strategy is poised to fortify growth avenues, particularly within the burgeoning segments like softgel products and the Onesource business framework, further suggesting a strategic alignment with anticipated market needs.

Market Reactions and Investor Sentiment

The markets reacted positively to Strides' strong earnings announcement, reflecting broader investor confidence in the company’s strategic vision and operational efficacy. The commitment to maintaining a high EBITDA margin amid growing revenue suggests a disciplined and balanced approach to growth, making Strides a promising prospect for investment in the pharmaceutical sector.

Earnings Call Transcript 2025-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to Strides Pharma Science Limited Q2 and H1 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Abhishek Singhal.

[Abhishek Singhal, executive]

Thank you. Very good afternoon, and thank you for joining us today for Strides earnings call for the second quarter and half year ended financial year 2025. Today, we have with us Arun, Founder and Executive Chairman; Badree, Managing Director and Group CEO; and Vikesh Kumar, Group CFO, to share the highlights of the business and financials for the quarter.

I hope you've gone through our [indiscernible] and the quarterly investor presentations that have been uploaded on our website as well as the stock exchange site. The transcript of this call will be available in a week's time on the company's website. Please note that any discussion will be forward-looking in nature and must review the relation to the risks pertaining to our business. After the end of this call, in case you have any further questions, please feel free to reach out the Investor relation team.

I now hand over the call to Arun to make his opening comments.

[Arun Kumar, executive]

Thank you, Abhishek. Good evening, everybody. Thank you for joining our call. I know today is a busy earnings day. So we appreciate your attendance to our call. It's been a good quarter again. We have reported a very strong quarterly performance. We are out-reaching each quarter, which is great news, and we are delighted with our performance. What is critical here to note is that we have moved our revenue growth quite significantly after 4 steady quarters of growth.

We have top line stagnation by design. But we had significant gross margin and EBITDA growth as we were cutting out all the inefficiencies in the operation. And having settled on that, we have now activated our growth, and you will now get to see these levels of growth in the next 2 to 3 quarters. Consequently, we are now very comfortable in guiding and confirming that all of our previously guided numbers would now be achieved more trending towards the higher end of our guidance outlook.

Overall, it's been a great quarter like I mentioned, all our financial metrics and ratios and debt-to-EBITDA ratios have significantly improved and will continue to improve. Pleasing, of course, was our outstanding U.S. performance. We are trending ahead of our our run rate. We had $75 million of revenues this year. A lot of this growth is coming from the fact that we've been able to slowly but steadily relaunch products from the government portfolio that we acquired [indiscernible] and taking significant market share and consequently improving revenues in the U.S., especially from our manufacturing operations in the U.S.

EBITDA at INR 235 crores to INR 36 crores is again highest as reported EBITDA and while reported INR 993 crores adjusted for the loss pickup of depreciation and interest from [indiscernible] at INR 100 crores is again the highest ever reported part. I think we are on a very steady footing to grow our business from here on. and we are very confident about the quality of the business and the teams that are leading this business to its stated objectives.

Quickly, taking through the numbers, you will see a TAT reduction in our gross margin, which is because of the growth of our access market, which, as everybody knows, is a low gross margin number, but that's not material. Having said that, we are trending very close to the EBITDA range that we have guided. Historically, for the last 2 decades, those of you been following Strides know that typical H2 is in the [ 55:45 ] ratio as in H1 being [ 45:52 ] and 55% being H2. That's because we continue to have a steady focus on the acute therapies, which actually have greater sales during winter in most parts of the countries that we operate.

We go by specifics, the EBITDA to cash conversion has been very high and my colleague, Vikesh will speak more in detail about that. Revenues, I'm breezing through the H1 numbers. Revenues are trending strongly at 17% growth. EBITDA at INR 452 crores is almost 45%, 47% of our range, and we're very confident of hitting stated objective of INR 950 crores to INR 1,000 crores, including OneSource and taking off on source business, we are very confident of hitting the INR 750 crores to INR 800 crores EBITDA range.

And you will see that the retail business of Strides will continue to grow from that size. We now have one additional product where we are market leader during the quarter in the U.S., and we now have -- we have increased our commercialized products to 71, 2 new products approved and 2 from -- sorry, 1 new product approved and 3 from our dominant product list that we have identified 60 products that meets our criteria and obviously, the success of those launches are flowing through are beyond generics beyond $400 million strategy for FY '27, '28 is reaffirmed. We are very confident we can get there with the kind of margin profile and price discipline that we are known for.

We continue to be the best performing provider of generics in the industry with almost 0 finite supply. This is the hallmark of the company, and we're building on that relationship for better pricing, that are share of the wallet, which was successfully achieving on-time monthly.

On the other regulated markets to be candid, we are not extremely delighted with the growth of the markets are delivered. Save for our strong performance in Australia and the U.K. The market -- the rest of the markets have been a little tepid for us, and that is mainly in Continental Europe. We have had several products approved, but our partners are very significant, the Top 5 rig players in Europe. And typically, the -- we're signing to a partnership to actual launch is taking a lot longer than what we hope for and anticipated. So we're just saying that growth is there. Our partnerships are very solid. We probably will see more accelerated growth only next year.

But having said that, the other regulated markets continues to be a key focus area for us, and we probably are 3% or 4% short of our target growth rate in the other regulated markets. Having said that, the overall guidance would be easily met with our performance in U.K., Australia and also in the U.S. The new markets that we have been focusing on is growing steadily. And this is a new -- these are new markets that we have seeded and it includes the [indiscernible] region that we have branded strategy, the access markets new regions of APAC and MENA. They continue to grow. They are always lumpy because it's a subscale, suboptimal size scale now. But for the efforts and the teams that we have in place, we believe that this will be the -- this market to be the top-performing markets for us in the years to come.

Much better margin profile in these markets, but we are currently seeding them with investments of portfolio and footers. So obviously, you will see benefits coming through in the next several years. And I'm going to leave matters related to debt and balance sheet to my colleagues, both Badree and Vikesh. I just want -- I'm sure that many of you would be interested in the updates on OneSource. So you will notice that we have updated our -- Sorry. So we've updated our debt and -- just 1 second -- now i'm ready, I had a wrong set of documents in front of me.

On 26th September, we updated an investor deck prior to our capital rates, we have guided -- we're now guiding for [ 160 to 180 ] with a 34% EBITDA margin. Please understand that this H1 from Stelis has been EBITDA positive, but it's still a back loss. That would change significantly in Q3 and Q4 as we start commercializing our we are now very comfortable guiding, trending more towards the higher end of our guidance.

In our investor needs, we have guided for $59 million to $60 million of EBITDA with an exit quarter EBITDA $20 million. We are very comfortable staying -- reaffirming those numbers in today's call. We are very excited about the opportunities that we have signed up in OneSource. We continue to receive very significant RFPs and contract funding. We currently are fully sold out with our capacities. We are commercializing the liraglutide GLP starting from Q4. And we are back ordered as some of our customers have forecasted significantly lower volumes.

But having said that, we're trying to do opportunity to debottleneck and take in as much business as we can. So we are reaffirming higher end of the guidance closer to the $59 million, $60 million guidance, exit run rate of $20 million per quarter and a very strong order book where you will see growth at the annualized exit run rate of $80 million in the business.

We've had a great response for our capital base that we've got -- we're very delighted to have market investors on our cap table at OneSource. This has also led in releasing close to about $700 million to Strides shareholders, and we are breakthrough for our patients while we build Stelis through those difficulties. And I think they invest spend the $100 million investment and the soft gelatin business has resulted in a significant outcome to Strides shareholders, and we're delighted with that.

Use of funds of this $195-odd million would be to reduce our debt, including [indiscernible] bridge loans that we have taken in anestation of this process. We expect to be net cash by '27. This assumes a CapEx of approximately $100 million that will be required for -- required that a combination of customer advances, the $50 million that we will invest and also the free cash flow this business will generate once the the merger is completed.

We are sitting on an extremely strong order book, and therefore, we are very comfortable to also guide the $350 million, $400 million revenues over the next 3 to 4 years. Adjusted for the H1, we already are running a 30%, 30-odd percent EBITDA business for the rest of the business. And we expect with the exit quarter run rate of [ $20 million ] to already reflect an EBITDA very close to 40%. So the 40% is it's more likely our exact quarter run rate as early as this financial year.

Overall, we are superbly excited with the number of RFPs that we have been issuing especially post the biosecurity [indiscernible], and we have very pleasing response to our drug substance capabilities. And we are actively closing out opportunities and businesses that we are very, very confident of winning. Our win ratio now is about 40%, which is quite, quite a good number for a new CDMO player. And that is a pleasing number for us to share with you today. And

I'm also excited by the fact that we have completed our softgel capsule capacity expansion. And all of the -- all of this additional capacity is now sold out and we should be sharply increasing our capacity by another 1 billion units for the next year to meet continuously increasing demand for softgels.

Overall, good product approvals in our lettable space, Health Canada approvals between the 2 facilities and overall, it's been a strong comeback for the group, especially a great outcome for OneSource and what the future looks like. On the NCLT process, we are on track. We hope to have the NCLT a positive outcome, obviously, subject to regulatory approvals and the compliances that are required for us to get an [indiscernible] order in place. We expect new positive news before the end of this calendar year. .

And typically, the 60 days from that is when the -- is the outer limit when we expect the stock to be listed. So yes, that's -- I'm now going to request Vikesh to speak about the financials, the ratios and our debt. And just one last point on the debt. Obviously, we have a close to [ INR 300 crores ] push down once one happens. And consequently, we would be having -- we would have brought down debt in the last 3 years from a high of INR 3,000 crores to [ INR 11,500 crores ] just through internal operations -- I mean, operational efficiencies, which is also a testament to our teamwork here, great focus on efficiencies and compliance.

Thank you, and over to you, Vikash, and then we'll open the house for questions.

[Vikesh Kumar, executive]

Thank you, Arun. Good morning, good afternoon, and good evening to all of you. I'm pleased we are reporting another quarter of solid performance. Our focus on delivering this momentum is visible across our metrics of profitability, efficiency and growth. Arun covered on the EBITDA and pad performance, a very strong performance that we've had booked for the first half.

On the efficiency metrics, we have seen further improvement in our cash to cash total, which is now at 126 days. they will significantly help us generate operating cash despite our very significant growth that we had during this quarter. On an H1 EBITDA of INR 453 crores, we have generated cash flow from operations of INR 418 crores. And this will also help continue our investment in growth CapEx, our CapEx spend of INR 92 crores in H1.

With this stock [indiscernible] cash generation, our debt is also reduced. Our net debt was INR 1,902 crores with a reduction of INR 133 crores in H1. With this reduction, our net debt-to-EBITDA ratio is at [ 2.1x ]. And I'm very happy that we are tracking ahead of our net debt to EBITDA guidance of less than [indiscernible].

Our all-round performance is also reflected in the ROCE metric, has now improved to 17.2% from 12.8% that we ended in FY '24. Covering some of the specific cost line items, our expense for the quarter have remained steady on an increased revenue base, that has led to an improvement in our cost to revenue ratio. Our net interest costs for the quarter are lower at [ INR 54 crores ], and this has been made by an interest income on tax refunds that we have recorded during this quarter.

With the reduction of debt, we also expect our gross interest cost to rate in H2 and going forward. Our effective tax rate at 17% in line with our estimates, and we expect it to remain in this range of 17% to 20% for '25. It has been a very [indiscernible] and comprehensive performance in the first half, and we remain focused on achieving our outlook for the results.

Thank you. I'm happy to take any questions that you may have.

[Operator]

[Operator Instructions] The first question is from the line of Mr. Rupesh Tatiya from Intelsence Capital.

[Rupesh Tatiya, analyst]

My first question, sorry, [indiscernible] Launch. Can give you some update on this now? Do we have all the approvals are in place? And when can we expect commercial launch of this product?

[Arun Kumar, executive]

All approvals for Europe are in place, and we expect the launch to happen within this financial year.

[Rupesh Tatiya, analyst]

But Q3, Q4, sir, like?

[Arun Kumar, executive]

Q4.

[Rupesh Tatiya, analyst]

And then another question, sir, is this contract project, we have won for in animal health for a biologic [indiscernible]. This project, when can we see some commercial revenue from this project? Is it like 2, 3 years away? Or it's not that far? And then do we need to do some CapEx for this project?

[Arun Kumar, executive]

Yes. So we are -- we do not discuss specific phases in which we are with the product. We believe you're right, this is more like a 3- to 5-year product commercialization, but we will have a very meaty R&D income in that time frame. We do -- we will probably need some more CapEx to do that, but we believe strongly that within the $100 million range that we have indicated as CapEx to get to the $400 million revenues, all of this will fit in.

[Rupesh Tatiya, analyst]

Okay. Okay, sir. And then, sir, this in the presentation we gave for Onesource, not just from the one last one, you said you're also working on 10 non-GLP drug device combination project. So maybe qualitatively, can you give some idea about these are biosimilars, biologics or these are some other products? Some some qualitative understanding of this, and then when...

[Arun Kumar, executive]

It's a combination of both Biologics and non-peptide drug device combinations, long-acting injections and stuff like that. But we can't -- I mean please try and understand we are a CDMO. We are bound by confidentialities. We are -- our primary responsibilty is to protect our clients, IP and protect the relationship. So we can't get into specifics. But yes, it is a combination of biologics and number of others.

[Rupesh Tatiya, analyst]

And sir, I mean these are also long-term commercialization for we can see maybe 2, 3 commercialization next year...

[Arun Kumar, executive]

One approved product this quarter, and we expect commercialization to happen in Q1.

[Rupesh Tatiya, analyst]

Okay. Okay. And these also -- I mean, relatively, sir, this would be as large as ...

[Arun Kumar, executive]

You'll have to come back on queue, there a lot of people who would like to ask these questions, please.

[Operator]

[Operator Instructions] The next question is from the line of Naman from Nine Rivers Capital.

[Unknown Analyst]

I have 2 questions. First is on the gross margin side. So any one-offs during the quarter leading to the sequential decline? And what would be the steady-state gross margins we are aiming at? And second is on the large participants follow up and then on the mobile biologics projects, what could be the potential scale for us in the project?

[Arun Kumar, executive]

So what do you mean by scale?

[Unknown Analyst]

In terms of our revenue quoting [indiscernible]

[Arun Kumar, executive]

We will not be able to give you specifics. What is important is that we have won our first NV for a large company. And it's a full program which is in late stage development and commercialization. Okay? [indiscernible] Your question on gross margin. We are in that 59%, 60%. That is our target range.

Like we said, we had a slightly elevated access market business and a lower European sales. That's why we had a TAT 75 bps reduction this quarter. But for your modeling purposes, you should look at more like 59% to 60%.

[Operator]

And the next question is from the line of Nitin Agarwal from Tan Capital.

[Nitin Agarwal, analyst]

Congratulations on a pretty solid share of numbers. On the Onesource business, I just want to quickly check on the softget of the business. I mean you talked about significant improvement in momentum in the business. Any particular reasons that are driving this improvement to pick up in momentum?

[Arun Kumar, executive]

So Nitin, we have been in soft gelatin for 20-odd years as you cover us well for so many years. But we've never offered soft gelatin as a CDMO opportunity at all. And given the disruption globally with capacities and there has been a very significant intake of capacity requests and RFPs that we are currently servicing.

We have already onboarded one of the world's largest consumers of soft gelatins as our first customer and with commercial shipments starting from this year. And you'll see a full glass volume increase with this one single customer getting to closer to 1 billion units in the next 2.5 to 3 years. So we are willing and as we move away from the current suppliers, it takes time because onboarding private labelers in soft gels is a long-run process. But I'm delighted to say that we have secured our largest business there in a multiyear contract, and that will get to full blast volumes in about 2 years. But we are starting commercial supplies in about a few months -- few weeks rather.

And it took us -- ever since we announced that we have become a CDMO to onboard them. So that's the time it takes on at a customer of that size and scale. But now that we are in the shipment phase, we're quite excited about the opportunity.

[Nitin Agarwal, analyst]

And secondly, on the GLP-1 business, I mean, what is the feedback that you're getting from the clients in terms of their demand outlook for both Lira and the Sema in the emerging markets over the next 3, 4 years, there are concerns around the fact that there could be significant pricing erosion, which may come through in these products. I mean does it have any [indiscernible] For our business for [indiscernible]

[Arun Kumar, executive]

So see, obviously, we have to be practical that is currently estimating demand for GLP is hard. On Lira, we are seeing a surprisingly increased volume demand for 2 reasons. One is that the dose requirement of fence is double. So from a CD perspective, the agnostic if we are making semaglutide or [indiscernible], right? From that perspective, it's a good uptake.

We are also seeing that -- considering that [indiscernible] Vigo and the all each main GLPs a backorder. We are seeing a kind of revenge pick up on volume for lira. So I think some of our customers have forecasted volumes wrongly and they're seeing more demand than that original plan. So we are seeing interesting volumes, but we are very such limited capacity at this pace, allotted for Lira. And the discipline is our approach for capacity because our customers have also started booking capacity to [indiscernible] risks starting as early as August of next year. So we are balancing our capacity between these 2 acts. But yes, we are in a good place now to say that it looks like we'll be able to sell most of our 40 million units, probably 6 to 8 months ahead of schedule.

[Nitin Agarwal, analyst]

And again, that's probably prompted you to go for the capacity expansion from [ 40 to 140]. And what kind of visibility do you have on probably in terms of utilization of this incremental capacity also? .

[Arun Kumar, executive]

Nitin, our incremental capacity is now being funded through take-or-pays, okay? So everybody is doing big volumes at us and we're telling customers that you have to participate in the CapEx to have capacity result. And we are able to get that today, in today's circumstances, GLPs we are because we have -- we are as ambiguous as you are hoping this business could be, right? Now how [indiscernible] it could be positively or negatively. So we are cautiously optimistic and we're telling partners to take equal risk, and we are today in a position to seek and receive capacity resolutions and that -- so the 150 million units, I think we have fairly good visibility.

[Nitin Agarwal, analyst]

And if you can squeeze in on last on the continuing business for Strides, how should we think about this business? Obviously, we are on track to deliver this year's number. But qualitatively, we've got the [ 400 million ] in bed milestones for the U.S. over the next 3 years. I mean, what else -- I mean, what are the other sort of broad milestones that you sort leave us with in terms of to visualize this business on its own over the next 2, 3 years?

[Arun Kumar, executive]

I think you'll see the [indiscernible] Business of Europe, the other reg markets to have, I won't say a hockey stick growth, but significantly different level of growth in the next year onwards.

The -- so we already told you that we're finding -- we have a nice range of control substance [indiscernible] Space. We have commenced -- we should file our first key product in the first -- in March of this year, and we have 3 programs and very, very solid opportunities because the controlled substances can be produced only in the U.S., requires a very specific device, which we have manufacturing capabilities. So we're quite excited about that entire niche. We believe the nasal spray niche will completely replace the loss of the soft gelatin volume and EBITDA.

[Operator]

The next question is from the line of Abdulkader Puranwala from ICIC Securities.

[Abdulkader Puranwala, analyst]

Just a couple of questions on the GLP-1 and the non-GLP-1 opportunity under Onesource. I mean, sir, we have talked a lot about the GLP-1 opportunity, but how should we look in the capacity at Onesource, which is not GMP focus? How is the kind of ramp-up you expect there? Where in the past, you've talked about certain biologics, and we're now talking about doing some novel biologic work as well. So any color you could provide on that front would be helpful.

[Arun Kumar, executive]

Yes. So we do have -- I mean Onesource is a combination of complex and specialty injections, GLPs, but it also has lot of other parts of the business, right, like [indiscernible], where we are One of the largest [indiscernible] manufacturers and other standard injectables, where we are partnered with. We see interest in all of our businesses growing.

I think the suite is talking only about the GLPs, but we are excited about several subparts of our business, which is growing nicely. Of course, the GLPs take, the limelight in terms of capital allocation capacities and the fact that we are first to file, it's now in the public domain that we and our partners have licensed the product to [indiscernible], and they have settled with the innovator. The first to file. We do have a profit share, which we split with our partner ATCO in this. So it's all in the public domain.

Obviously, there's a lot of excitement around it. But we are equally excited about the other parts of the business. you should look at us being completely full up on our approximately taking 7,000 to 8,000 liter mammalian and microbial capacity or increasing the microbial capacity to 4,000 liters to be fully sold out within the next 12 months. And then we have to probably look at this conversation later. But so we are adding a lot of customers specialty products that are already approved with the Chinese angle, we've already secured our first major European contract, which we should be in a position to give more granularity soon.

But yes, we're winning businesses, and we will have capacities. And like I told earlier colleague of ours that there would be participation of our partners in the investment program. And we are now positioning ourselves as a global CDMO. For pricing, we are offering it -- if the pricing has a price. We are not leading contract meaning by price, but by service and or pricing is not necessarily low. But we -- there is kind of interest that we didn't expect earlier until the biocycle that came into play or is in a of the nature of customers and RFPs that we are currently selling and a number of [indiscernible]. So I think overall, you saw me believe that all engine are on fire, And yes, this is a good space to be. And I think we are all very excited about every small bit of our business in Onesource.

[Operator]

The next question is from the line of Aman Vij from Astute Investment Management.

[Aman Vij, analyst]

Three questions. First on Onesource GLP-1. So you have talked about on commercialization in Q4, [indiscernible]. So how many PSA do we expect in, say, FY '26 to get commercialized?

[Arun Kumar, executive]

In the GLPs?

[Aman Vij, analyst]

Yes, yes.

[Arun Kumar, executive]

Between [ 5 and 7 ].

[Aman Vij, analyst]

And is it safe to assume given there will be the sematidisexpiry is happening for the Indian market for non-U.S., non-Europe market. So can some of these -- these are also getting launched in next year, FY '26?

[Arun Kumar, executive]

It is possible. It can't be specific -- Canada is the first market going off pattern.

[Aman Vij, analyst]

Sir, you mentioned January what January?

[Arun Kumar, executive]

January of '26, is the pattern goes off in Canada in March of '26 in other countries.

[Aman Vij, analyst]

Sure. And normally, what is the lag between, say, a CDMO player supplying versus the actual launch date? So patent expiry is happening in, say, Jan 2026. Can we expect the 6 months before these...

[Arun Kumar, executive]

Yes. We can't give you specifics because there are confidential information around this product and the patent regime. But it always has to be much before the launch need, right? So it depends upon customers and their risk appetite and production at risk and their launch capabilities. But yes, you can see 5 to 7 unique customers, GLPs, commercial supplies from Onesource in the next financial year.

[Aman Vij, analyst]

Sure, sir. That's helpful. On the softgel side, sir, we have expanded the capacity a lot and we are again talking about more expansion. So can you give roughly what is the revenue we are getting from the side itself versus what the revenue is roughly from outside customers, nonsite for softgel?

[Arun Kumar, executive]

We have guided earlier. It's about half and half and we stay with that. But there's no incremental growth coming from strikes, all new contracts are only with third parties.

[Aman Vij, analyst]

Okay. So even the incremental 1 million you're talking about and you've talked about 1 customer who is scaling quite fast. That is also all outside?

[Arun Kumar, executive]

But we also announced when we did this deal that outside of the businesses that are already contracted, the Strides will be only the logistics partner, the economic [indiscernible]. So we will not add any new products to avoid any related party issues going forward.

[Aman Vij, analyst]

Great sense. My final question is given Teri launch, Lira launch and you've talked about 5 to 7 launches, CFL launches in FY '262, soft get expansion, [indiscernible]. Can we expect maybe like $300 million kind of number for Onesource in FY '26?

[Arun Kumar, executive]

No.

[Aman Vij, analyst]

Lower or higher?

[Arun Kumar, executive]

We have guided numbers for this year. We've given an exit run rate of growth over the excess $[ 80 million ] on the EBITDA, focus on EBITDA. This is a business that is very focused on margin expansion. -- we are not -- and we are giving you a view that in 3 to 4 years will be $350 million to $400 million. We are on track for all that.

[Aman Vij, analyst]

Okay. So in spite of all these positive 5, 7 projects and all these new things, revenue might be lower, but we'll cover up in, say, EBITDA growth and all ...

[Arun Kumar, executive]

You'll have a significantly different EBITDA profile for FY '26, if I may say.

[Operator]

Our next question is from the line of Ritesh Goswal from NRO Invest.

[Unknown Analyst]

Congratulations for good numbers. On Slide 19, you mentioned about [indiscernible] When supply will be start for [indiscernible]?

[Arun Kumar, executive]

We mentioned this earlier, Q4 of this year.

[Unknown Analyst]

And it's for innovator?

[Arun Kumar, executive]

No, no, sorry, my mistake. So I got confused between PTH and [indiscernible]. What we are saying here is that we have signed our first CDMO contract to develop this drug. Product pattern goes up only in 2036.

[Unknown Analyst]

So supply will start up to 2036?

[Arun Kumar, executive]

It depends upon, again, like in semaglutide the pattern that game is different from various countries. All we are announcing is that out of the 8 GLPs, commercially, we now have 7 contracted GLPs.

[Operator]

The next question is from the line of Dash Jawiri from Crown Capital.

[Unknown Analyst]

All my questions have already been answered. So just wanted to get a sense, like, I think on our investor deck, we've said revenues might grow at 12% to 15%, and you're seeing that there will be on the higher side. But we already, I think, grown at 17%, right? So are you being more conservative or just -- just wanted to pick your brain a bit like in terms of FY '25 and FY '26, what outlook could we assume so?

[Arun Kumar, executive]

So the outlook is there. We said we will grow 15%. We are currently at 17%. It's a marginal increase of what we said on the higher end. Yes. And I think sometimes it's good to hear at the side of caution. Obviously, when you launch a new product, especially in the U.S., you do not anticipate the level of success you achieve. And we can -- we have always been trending like today, I already alluded that we will be trending to the higher end of all the parameters on the outlook. So that already means that we are upping our guidance towards the higher end of market, right?

[Unknown Analyst]

Okay. Fair enough, sir. And sir, any guidance would like to get for FY '26?

[Arun Kumar, executive]

Not yet.

[Operator]

The next question is from the line of Raj from [indiscernible] partners.

[Unknown Analyst]

Sir, am I audible?

[Arun Kumar, executive]

Yes.

[Unknown Analyst]

Hello, am I audible?

[Arun Kumar, executive]

Yes, yes.

[Unknown Analyst]

When are we going to commercialize Ozempic?

[Arun Kumar, executive]

Yes. So technically, you can commercialize Ozempic in some countries in -- from -- starting from January to March '26.

[Unknown Analyst]

I didn't get your answer, can you repeat it again?

[Arun Kumar, executive]

I think you're on a speaker phone, and that is why you can't hear me.

[Operator]

Thank you. As there are no further questions, I would now like to hand over the conference over to the management for closing comments.

[Arun Kumar, executive]

Thank you all. Appreciate your time today. And as always, if you have more questions, please write to us at the Investor Day or please setup to is of any one of us. Thank you, and much appreciate your time today.

[Operator]

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