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Supriya Lifescience Ltd
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Ladies and gentlemen, good day, and welcome to the Q4 and FY '24 Earnings Conference Call of Supriya Lifescience Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Irfan Raeen from Orient Capital. Thank you. Thank you, and over to you, sir.
Thank you, Neha. Good morning, everyone. On behalf of Supriya Lifescience Limited, I extend a very warm welcome to all participants. Before we begin the call, I would like to give a short disclaimer. This call may contain some of the forward-looking statements, which are completely based upon our belief, expectation as of today. This statement are not guarantees of our future performance and involve unforeseen risks and uncertainties. With this, I would like to hand over the call to Satish, sir, for his opening remarks. Over to you, sir. Thank you. .
Good morning, and warm welcome to all the participants. Thank you for joining us today to discuss the Q4 financial year '24 results of Supriya Lifescience Limited. To take us through the results and answers to your question, along me, are Dr. Saloni Wagh, Whole Time Director; Mr. Krishna Raghunathan, Chief Financial Officer; and our Investor Relations department, Oriental Capital. I hope everyone got the opportunity to go through the financial results and investor presentation, which have been uploaded on the stock exchanges as well as the company website. It gives me an immense pleasure to announce that the company has achieved a revenue of INR 570 crores, which is a 24% growth as compared to the previous year while maintaining a healthy EBITDA margin of 30%. This achievement is testament to the successful execution of our long-term and sustainable strategy, which includes penetration and focus of the company on more regulated markets, widening our product basket in regulated markets, widening our portfolio by introducing new molecules and therapies.
B, integrating products and manpower and the latest technology; c, enhancing operational efficiency and superior cost management; b, implementing backward integration to extend our value chain and secure more regulatory registrations, focusing on R&D investments and ensuring supply chain stability.
The company continued to deepen investments in systems, risk understanding, alternative markets and responsiveness. During the year, the company announced its presence in regulated markets, resulting in a large share of revenue contribution from the European region, increasing from 31% in financial year '23 to 41% in financial year '24. This shift is significant as margins in the regulated markets are higher as compared to semi-regulated markets.
The company has created a pipeline of new product extending beyond its long-standing competence in anti-stimulants to include anti-diabetics, anesthetics, et cetera and other
Therapeutic areas. These products will be launched by Q3 FY '25. We intend to build our Contract
Development and Manufacturing organization, CDMO, business portfolio.
Our site in Ambernath will be ready by Q2 FY '25, where we will be further expanding our CMO and CDMO activities. This year, we are very pleased to announce that we have proposed 40% dividend as against of 30% last year for all our esteemed shareholders.
With this, I hand over the call to our CFO, Mr. Krishna Raghunathan, to share Q4 final year '24 financial highlights
With you all. Over to you, Mr. Krishna.
Thank you, sir. Hello, everyone, and good morning. I will now share the operational performance
of the quarter, and following which, we will open the floor for questions and answers.
The company reported revenue from operations of INR 158 crores in Q4 FY '24 as against
INR 140 crores in Q3 FY '24, plus registering a growth of 13% quarter-on-quarter.
EBITDA in Q4 FY '24 stood at INR 56 crores as against INR 41 crores in Q3 FY '24, and
EBITDA margin stood at 35% for Q4 FY '24 as against 29.% in Q3 FY '24.
Profit before tax was INR 53 crores for Q4 FY '24 as against INR 40 crores in Q3 FY '24 and the growth is around 33%. PAT stood at INR 36 crores in Q4 FY '24 as against INR 30 crores in Q3 FY '24. PAT margins
Stood at 23% compared with 21% in Q3 FY '24.
Moving to full-year performance
Revenue from operations of INR 570 crores in FY '24 as against INR 461 crores in FY '23. We
Reported a growth of around 24% compared with FY '23. EBITDA in FY '24 stood at INR 173 crores as against INR 129 crores in FY '23, and EBITDA
Margin stood at 30% for FY '24 as against 28% in FY '23.
Profit before tax was INR 166 crores for FY '24 as against INR 123 crores in FY '23, and the Growth is around 34%.
PAT stood at INR 119 crores in FY '24 as against INR 90 crores in FY '23. PATs margins stood at 21%
We have improved our working capital days from 235 days to 124 days. This is mainly due to
Reduction in overall inventory days from 233 to 165. There has been a slight increase in get-out
days due to higher sales during this quarter end, which would even out. On borrowings, we
would like to report that for the last six months, we have not utilized any working capital limits
except for letter of credits and bank guarantees.
Now, we can open the floor for questions and answers. Thanks to all of you.
[Operator Instructions] The first question is from the line of _ Raghav Agarwal from Vriddhi Capital.
congratulations for the great set of numbers. I just had a question regarding the Brazil orders and Brazil approvals that you were talking about last year, you had mentioned that you had got some approvals from there. Can you throw some light on that? Okay.
Yes, we have -- so we had our ANVISA audit from the Brazilian authority in the month of January, and we have cleared that audit with zero observations. So it is a big step for us because recently, the authority had opened up the portal because most of their current sources are from China. So they are looking at replacement sources and they are opened up this portal wherein if you can get the product registered and you can get the site audited and approved, then you will become the first source for those products and all the local companies would have to buy those products from you. So we have actually taken great advantage of this situation. We got the audit done, like I said, we cleared the audit with zero observations.
And as of now, we have already registered about 10 products with CADIFA. Around 8 additional products are currently under registration. So by end of this year, we will have about 17 to 18 products registered with the authority. This actually opens up a very big market for us because for our existing products also the market in Brazil is growing, plus the new products that we are introducing in the basket for those also the Brazilian market is quite large. Our anticipation is that in the next 3 years because of this registration in Brazil, at least INR 200-odd crores, we will be able to add to our top line. So this is just some light on the registrations and why we have aggressively pursued this.
I also wanted to understand the the DMS project, how is that going on? And you had also mentioned that there is a possibility of getting similar orders like the European DMS order that we received. Can you also talk about that?
If I'm not from wrong, you're asking about DSM, right?
Yes. Yes, exactly.
Okay. So yes, it is one of our -- as you are aware that in the last couple of quarters, we are really focused on expanding our CMO, CDMO kind of opportunities. And the DSM is one such long contract that we have got. We are the exclusive suppliers for vitamin B2 for them. Initially, they were manufacturing this product. But in the last few quarters, they have completely suspended their production. And now we will be their sole supplier going forward globally for this product. The project is moving really well. We have already started commercial supply for food grade materials.
And the CEP, USDMF and Japan DMF are currently under filing. So once that is done, even the pharma business, we will start getting. For FY '25, we are anticipating at least 25 to 30 tonnes of material from the DSM contract. And we definitely have a lot of other similar contracts in the pipeline where we have some assured business of advanced intermediates as well as APIs, which will -- you will see that some of them will start commercializing in FY '25, maybe the second half of FY '25. But there are a lot of other opportunities on the same line.
The next question is from the line of Aditya from MSA Capital Partners.
So just wanted to quickly understand a few things. So what would be the overall thought process of the management when we are coming out with new molecules, what is the size of molecule that we'll look at? What the margin that we'll look at while when doing R&D.? If you can just give me a quick color on this.
See, we focus on the molecules, normally, if you see many products are depending upon China. So our intention is that the therapeutic care products, which we select, we have our in-house complete backward integration and then we launch. And we normally see a sizable amount of tonnage and business. We, therefore, have already increased our capacity of one of the plant, which is going into operation. Validation is going on now. That is 370 KLD. So you can understand, we already have next 3 years future considering the capacity is 1,020 Kld.
And many countries, today I have seen, are very keen to buy from India than China. So we've mostly focused on that because we are in exports for almost more than 38 years. And you have seen our ratio is 80% and above. So our meetings, which we meet to the customer, customer has intention to expand the business with Supriya Lifescience because of the regulatory support and many other options which we give to our customers.
Understood. Understood. Sir, also, when -- from introduction that is when we developed the product and we've launched it in the market, how fast -- in your experience, how fast does the molecule scale up? And for example, what would be the new percentage of the molecules that you had introduced 2 years back a part of our revenues today.
So usually, it takes around 2 to 3 years for any molecule to scale up significantly because it takes anywhere between 12 to 18 months for getting different kind of regulatory approval, about 6 to 9 months for us to actually launch the product and get the validation completed and start the commercial production. But in the regulated markets, 12 to 18 months to register the product. So for you to see a sizable sort of contribution from a particular new product to our top line, minimum 2 years are required. In semi-regulated market, this time is slightly shorter. You can see that in semi-regulated markets between 12 to 18 months as soon as the commercial launch of the product happens we can start applying some quantity. But the better margins and the higher revenues come when the product goes into the more regulated markets.
And if you were just to quantify the product that we had launched 2 years back or 3 years back, if you have the number ready with you, what would be the contribution from those products today?
So not exactly we are not able to quantify that exact number. But what has also happened is in the last couple of years, we have actually worked on our existing products because if you look at our revenues in the last 2, 3 years also, we were not present for a lot of our existing products in the regulated market space. So last 2, 3 years, our main focus was capacity enhancement and then catering for existing products, the regulated market, which we were entering, and that is also reflected in the numbers.
Most of the major new product launches will start happening from this financial year because this year, we are planning to launch almost 4 to 5 new products. So now you will see more and significant contribution from the new product launches.
So the strategy of the company, as you were asking, normally, any development, API takes 2 to 2.5 years. But we have decided after meeting the customers, because you know our customer base is 1,700 customers currently present in 128 countries. You can see and analyze that. This is the big bucket. We have decided to catch hold of big companies where we will not be selling the API, but validated drug master files for the N-minus-1 intermediate we'll give them. And today, the demand is from them that they don't want to go to China, but they need N-1 intermediate where volumes are there. So such type of products, we are already talking with 3, 4 customers who are using in a very big way. There, if you get your interest, you get your margins, we are very happy. So we will not be fighting for API, but we will see that. We consume our entire capacity for N-1 intermediates and move ahead, first and the second [indiscernible] that we are a debt free company that is our strong presence, we have cash in our hands.
We don't borrow anything. As of today, you see the balance sheet. We don't have any limits utilized by us. That's a strong hold of the company, principles and integrity.
So there's no doubt that you've [indiscernible] phenomenal business. Just trying to get a better sense for myself and handle on the company. So that's why these qualitative questions that I'm trying to get a sense of. So when we look at our sales cycle, if you can and how long would it be? What would be the process? And in terms of wallet share, do we monitor our wallet share in terms of our clients' API spend? And what would be the quantum of competition within that wallet share?
So as far as competition is concerned, in most of the products that we manufacture, I wouldn't say that we have a comparable competitor only because we are present mainly in the very regulated market, where we are supporting our customers not only with the complete regulatory compliance. But for most of these products, we have a completely backward integrated product. So in terms of best cost, in terms of even the quality of the product itself, I feel in most of our products because you know that for a majority of the products, which almost contribute to about 75% of our revenue, we are fully backward integrated.
So for those products, at least we don't see that there is a comparable competitor. And with the customer also, we are their first approved source. So more than 80%, 90% of their demand we are catering currently.
And sir, 1 thing I would like to highlight. This is a regulated pharmaceutical industry. It's not a grocery market of competition. Just understand that. Competition, you can create and you can lose, you can become NPA and get out of the business. That's the story in India. You must understand that this is not possible. In a regulated industry, regulated things are discussed. The buyer should be confident to work with you. That confidence has to be created because today, somebody comes, gives X price, Y price and just takes the business, we have seen what is the fate of the business today.
So business is always there on your integrity, quality and your sustainability. You go anywhere and say INR 10 down, INR 20 down, nobody can buy from you because in the world today, people talk about quality. The manager who says, he wants to buy at least 4, 5 products and reduce the number of vendors that is the attitude of the multinationals and big companies today. People are fed up on China people always want to [indiscernible] a good product. [indiscernible] .
[Operator Instructions]
The next question is from the line of Afzal Shaikh from M3 Investments.
Congratulations for the good set of numbers. So I have a 3questions. First 1 is how much revenue we have generated from regulated market from this financial year? And second one is about like how much revenue we have generated from top 3 APIs, top 5 API and top 10 APIs.
So thank you for the question. In terms of the revenue share, just to give you a little background, 80% of our revenue is generated through exports and only 20% is from domestic markets. And in this 80%, also about 60% is coming in from a regulated market. If you see for regulated markets, our share has gone up in Europe also from 33% to almost 41%. The other markets like North America, Latin America, they are stable. And in fact, in the next couple of quarters, you will see that the share of these markets will also go up. So that's far as far as you know the revenue contribution from the regulated market.
Then for the top product, it will not be possible for us to say what would be the revenue of the top 3 or top 5. But we are consistently working on adding new products into the basket so that the revenue is more diversified. Of course, we will continue to have a leadership position for some molecules. But overall, we are working on derisking the portfolio so that the revenue generation is more diversified.
Okay. Okay. But as you mentioned in previous years and previous quarters, you said your top 3 products like revenue contribution is around 44% to 45%. So is it the same thing? Or what...?
Yes. So currently, it is almost similar. But going forward, you will definitely see as the new products and new opportunities grow -- this -- I mean, of course, the top 3 products are also growing. They are not degrowing products. But the revenue generation and their contribution to the total revenue will go on decreasing as the new products and the new opportunities kick in.
Okay. And how much is revenues generated from top 3 customers, you have like numbers? Can you please share with us?
See we don't discuss anything on what you call customer specific or product specific in an open forum. I hope you understand.
Okay. Okay. Okay, got it. And I want to know about there is only 11% growth in your quarter-on-quarter basis. So could you please why this growth is like only 11%.
I think it has already been discussed. We have told very clearly that our guidance, I hope you are looking at our guidance also. We said that the overall revenue growth would be around 20%. I think we had grown at 23%. And we said that EBITDA will grow by around 30%. I think overall EBITDA is at around 30-plus percentages. I don't understand did we say anything wrong earlier, which we had [ factored ] tracked. No, I don't think we have done anything like that. Is there anything else you would like to understand, sir?
The next question is from the line of Adit Sen from RoboCapital.
Sir, in the previous call also, you shared the guidance of 20% revenue growth for the following year, FY '25. So will this be from the existing products and like from the existing business only, including the new products? Or this includes the revenue from the Ambernath capacity, which will get commissioned in Q2.
So, no, basically, the guidance is on the overall blended portfolio. Of course, I mean, this can be higher once Ambernath goes into complete production. But for Ambernath to generate peak revenues, it will not be possible in this financial year because only in quarter 2 of this financial year, the production will start. So the validation and then for the commercial production to start and for it to reach peak capacity, we are looking at at least 2 to 3 years. So this 20% plus guidance on the revenue growth is on the blended portfolio. This includes our current basket of APIs. Some of the new products that we are launching, the CMO activities that we are doing and of course Ambernath.
So as and when some of these projects kick in, they definitely have a higher potential in terms of growth as well as margin also. But whenever we are giving a guidance, it's more on the conservative side on the entire blended portfolio. So that is why we are maintaining that 20% plus revenue growth.
All right. And how much is this Ambernath supposed to contribute at peak potential in the coming 2 to 3 years?
So that would be very early to say that you know much Ambernath would contribute. But overall, the CMO, CDMO portfolio that we have, in the next 3 years, we anticipate that it should contribute at least 20% to 25% of our total revenue.
Because Ambernath facility is also mean for CMO, CDMO activity. So that is just an extension and expansion of our CMO capability. That's why I'm saying that the overall CMO will give us about 20% to 25% of total revenue.
All right. And this Module E were commissioned last quarter?
So Module E will get submission probably end of this month. There was a slight 1 month delay due to some of the other factors like the construction was getting delayed slightly because of the climatic conditions there. But it will get commissioned end of this month. So we are anticipating that by quarter 2 of FY '25, we should start commercial production.
Okay, same as Ambernath, right.
Same as Ambernath.
This will also take 2, 3 years to reach the peak potential.
Yes.
The next question is from the line of _ Nirali Shah from Ashika stock Broking.
I have a quick question regarding our current strategy. We have been focusing on expanding our portfolio for [indiscernible]. Could you provide an update on our progress in this area. Specifically, I'd like to understand the key milestones we have achieved so far. Any challenges that we are facing and the next steps in our expansion.
So like we said, expansion for new products, we are now evaluating newer therapies like antidiabetic, anti-anxiety, we already have a very strong presence in anesthetic portfolio. So that is another basket of products that we would like to expand on. There is a lot of potential in anesthetic basket, like our Chairman said that there are a lot of products in this basket, which are purely being imported currently from China, and there is a lot of dependence globally there. So we would be one of the first manufacturers globally to develop an indigenous product in India from the basic chemicals.
So we are currently focusing on the backward integration for the new products what we are launching. We expect most of these new products to be launched somewhere around quarter 3 of FY '25. That's when at least we will be able to start supplying commercially to some of the non-reg markets. And of course, I mean, the regulatory approvals will take about 12 to 18 months. So this is where we are in terms of the new product launches and the thought process behind the new basket.
So our next question is from the line of Monica Joshi from Hornbill Capital.
I just wanted to understand, earlier we had this bit of volatility or let's say, seasonality in the revenues, and there was this September and March, which used to be kind of a little lumpy in terms of revenue. But that does not seem to be the case anymore. So is that now completely ironed out? So if we see the March quarter now versus the December quarter '23, it's kind of flattening out. So do you think this is now a new normal you have achieved that kind of stability in your revenue?
So Monica, to answer to your question, yes, as there also lot of seasonality aspect with some of the major products that we were -- where we had the leadership was the anti-histamine, anti- allergics where there is a definite seasonal impact. But if you have tracked the company in the last couple of quarters, we have consciously put a lot of effort growing our other basket of products in some of the regulated geographies. So that is why you will definitely see that moving forward. there would be much more stable quarters. It is not completely gone. There will still be a seasonal impact because anti-histamine still is a key product in our portfolio.
But with some of the other products growing, you will definitely see that the quarters are more stable.
Got it. Got it. Because though it is kind of reflecting in the revenues, it is not as much reflected in your gross margins, right? So your margins tend to still show that variance. So you had this bump up in gross margins in March. And that volatility continues. So how does one read into understanding when we are projecting your number?
How does one read into understanding where this really goes? Because is that volatility is likely to stay, if not in revenues then in margin?
So the volatility in the margins also, you will see will be quite stable moving forward. The volatility is mainly happening because of certain products having a bigger reach in the regulated market. And we've said this in the past also that regulated markets are giving better selling prices as compared to the semi regulated market. So wherever the sales in those markets is higher for that particular quarter, you will see that the margins are also slightly higher. But moving forward, even that, I would say, would be more stable. And we have always maintained this, and we continue to maintain this moving forward also that we would like our investors to have a more long-term approach and look at the margins on an annualized basis rather than quarterly basis.
And on an annualized basis, 30% -- 28% to 30% margin is something that we are very confident of maintaining and that is also getting reflected in the last couple of quarters' numbers. So moving forward, also the same guidance that please look at the margins on an annualized basis where we are very confident that 28% to 30%, we'll be able to maintain.
The company definitely has potential to achieve higher than 20% because a lot of the new projects, the same opportunities come at a more premium margin. That is what we benchmark ourselves against. But 28% to 30% is a confident number that we are ready assured that we'll be able to maintain along with the 20-plus percent revenue growth year-on-year.
Correct. So you're maintaining the 20% guidance, so that's about INR 1,000 crores of revenue by FY '27 and the 28% to 30% margin guidance. So we are clear about that. That's still stays, right?
Yes, absolutely.
And just you missed that one small part. When you said the 25% contribution from CMO, CDMO, you were referring to the INR 1,000 crores. In that you expect about 25% to come from CMO, CDMO. Is that correct?
In the INR 1,000 crores, we anticipate about 18% to 20% coming in from CMO, CDMO.
And in your estimate, that is definitely not margin dilutive. It is, in fact, a better margin proposition than what you are guiding at 28% to 30%.
Yes.
The next question is from the line of Dikshit Doshi from Whitestone Financial Advisors Private Limited.
Some of the questions are answered. Just a couple of questions. You mentioned one is our Ambernath CapEx and one more CapEx is going on, if you can elaborate on that? And how much would be CapEx amount for both the CapEx?
So we are anticipating about INR 100 crores of CapEx in FY '25. This will be mainly for Ambernath as well as some part of the new Module E, which is coming up. We are also doing some debottlenecking activities for enhancing our current product basket capacity so like some of the older blocks in the manufacturing facility like the B block and all we are just refurbishing to increase the capacity. So all this will be mainly for these reasons, INR 100 crores. And at the end of this, our capacity would be somewhere around INR 1,020 kL for the lotte site. And for Ambernath, it will be about 200-odd KL.
Okay. And for Ambernath, how much would be the total CapEx, including whatever we have already spent?
It would be about INR 75 crores.
Okay. And currently, what would be our broad capacity utilization?
See, for the current year, we were at around 86%. So with the E Block coming up, we believe that since like what Dr. Saloni has already told that we will be able to meet our revenue guidance for next 2 to 3 years or less from the existing Lote facility. So I think that should be the answer on the capacity utilization.
And also, when we say 86% capacity utilization, we manufacture a lot of different products. So at peak, what kind of utilization we can do? Can we go to 100 or 90, 95 would be...
100 is not at all possible. We have a regular maintenance schedules, which needs to be taken compulsory. see I don't think -- see this itself is the highest optimal limit what we have attached. In fact, our manufacturing teams, along with our CEO, they had a lot of sessions around this, and that is why, in fact, we had debottlenecked most of the areas. Okay. Otherwise, in a multiproduct facility, anything around 75% to 80% itself is what you call a nice percentage to maintain.
Okay. And 1 last question. In the current year, how much would be contribution from CMO, CDMO.
We don't Discuss what do you call business-wise or anything in any of our -- what do you call calls. So I think this is something which we generally don't give it out.
That's it for. The next question is from the line of Shubham from Purnartha Investment Advisers
Pvt. Ltd.
Can you discuss in detail on FY '25 growth drivers?
So for FY '25, we categorize the growth drivers into 3 major baskets. One is the existing product portfolio what we have other than the top 3 products, we have a good basket of about 10, 11 products where we are currently present only in the semi regulated market. And we have already registered these products in the regulated market. We are just waiting for the approvals to come through. So the first would be the scale-up of these products into the more regulated market space that will not only add to the revenue, but it will also help to further improvise the margins. The second one is the CMO or CDMO opportunities that we have. Similar to DSM, there are at least 2 to 3 other opportunities. where we are at a very advanced discussion where there is a fixed volume of advance intermediates in certain cases, APIs also which we have to manufacture for certain multinationals. So those contracts will also start coming in. I mean the commercial volumes will also start kicking in. So that I would say is the second area for growth.
And the third definitely would be the new product launches. So as we have mentioned before, we are trying to expand our existing product basket. So we are adding new products in the anesthetic category. In fact, 4 new products we are adding there. We are also adding newer therapies like antidiabetic anti-anxiety, -- so these new product launches also will start adding to the revenue. So these, I think, would be the 3 major growth drivers. On the CMO, CDMO, to talk a little bit more in detail with the Ambernath site coming up there is a possibility of us moving into forward integration also for CMO kind of contract.
So that would be another new area for us where you know we can get more traction, and that can also really add to the revenue in the coming few years.
But like you're saying, existing product and new regulated market, but did we get registrations and all that that, that has been completed? Or still we are waiting for that.
So it is an ongoing process because we are talking about 10, 11 products. There are some products where we have already received the registration. Some are currently under registration. So different products are at a different stage, I would say.
And in CMO opportunities, which 2, 3 opportunities you are talking about that are in advanced stage. So that might get be benefited from, I think, second half of the year?
Yes. So that some part commercially might get added in FY '25. But majority of the CMO revenues will start coming in other than DSM and 1 or 2 which are at advanced discussions. Most of them you will see that the revenue generation will start from FY '26.
The next question is from the line of Nikhil from Securities Investment Management Private Limited.
Congrats on a good set of numbers. Just 2 questions. One is on this INR 1,000 crore revenue target where we are mentioning 18% to 20% can come from CDMO. And in our previous calls, we've talked about 2 or 3 projects. But from today where we are in the revenue which you gave for DSM, what gives you the confidence that this INR 200 crores kind of a top line can be achieved? Like if you can just talk probably not quantitatively, but qualitatively, what is the kind of interest you are getting from customers or some sense to build the confidence on what is building this INR 200 crores...
So basically, for the existing basket as well as the new products, we are very confident because like our Chairman said, we have taken a very different approach for adding new products in the basket. It is very strategic where global dependence on China is there for certain products. So there, customers are desperately looking for an alternative source. And we have tried to capitalize on that aspect. We have a lot of strength when it comes to R&D and developing the product. And backward integration, as you know, has been a key strength of the company for a very, very long time. So all these products, which we have been able to newly infuse into the basket, we have been able to completely backward integrate those and get the manufacturing process done completely in India. So indigenous products we have been able to develop where we are very confident that the kind of costing that we are able to get for the product now, we are able to compete on a global scale with the Chinese manufacturers.
So there is a lot of confidence there when it comes to our existing basket, of course, and the new products that we have infused. On the CMO front also, we are giving 20 we will able to get by the end of FY '27, there is a fair level of confidence because 2, 3 opportunities in this, like I said, are a very advanced stage where we have already supplied the validation batches to them. and commercial production will start any time. So there is a volume commitment which we have already received from these customers and contracts have been signed that in the next 2 to 3 years, these are the kind of volumes that they will buy from us. And these are binding contracts. So there is a fair level of confidence that, yes, in the next 2 to 3 years, most of these CMO opportunities, we will be able to scale up to that extent.
Okay. So okay. I got it. So in conclusion, would it be right to say that these are projects we've been working for last 1 year. And now everything is done. Largely, it's validation and once customer approvals come, they will get commercialized. So largely, the R&D and everything is already done on those...
Yes, absolutely. These are the products and projects which we have been working, which have been in the pipeline for over a year now. And now most of these projects on the CMO front as well as even the new product launches, which we are planning to do in this year, we are at a very advanced stage of discussion with all the customers wherein they are just waiting for our validations to be completed and for us to start the commercial supplies. So that is why there is a very good level of confidence, I would say that the INR 1,000 crores with the kind of margins we are committing, we will be able to achieve that. In fact, if anything, like I've said in the past also, we have achieved higher margins as well as higher revenue in the past. So there is a lot of opportunity for us that once all the CMO kicks in, the Ambernath project also kicks in, we can definitely do even better than what these numbers are.
Okay. And just an extension here, Saloni. See, what we are hearing from a lot of companies is there a lot of interest for CDMO, CMO projects towards India because of this China +1. Not specifically, but if you have to understand the kind of projects we are working at the R&D versus what we were doing, say, 1 or 2 years back, how is that kind of pipeline buildup for us today? Because the pipeline which we are working today will probably fructify in the next 2, 3 years. So if you can talk about how is that pipeline scaling up and how is the kind of inquiry levels we are working with...
So definitely, that China Plus One strategy has benefited a lot of companies, and we are also one of those companies who is focusing on that. Like our Chairman said, our pipeline is also focusing on that area only. The 4, 5 products which we plan to launch, we would be one of the first manufacturers in India or globally to have a completely backward integrated product other than China. So that is one key area where we are focusing. We are also trying to complement that with our existing therapies. For example, anesthetic basket is one area where we are aggressively working in our R&D, we have 4 products currently in this anesthetic basket. We already have a very strong presence globally in our anesthetic products. We are global leaders in some of the products. So we also wanted to build on that capability and also have a backward integrated product, which would compete with China.
So you will see in the next couple of months, we will be launching 4 products where there is only dependence on China globally for the API. And a lot of the larger companies are very interested. And in fact, some of the discussions are already at an advanced stage where they have told us this is the volume that we are currently buying from China, which we would completely like to move to you. So most of them are at a very advanced discussion and the R&D pipeline is also in that way. So main focus is on anesthetics, antidiabetics because that's a new therapy for us where we have been able to develop a product, which is fully backward integrated where again, there is a lot of dependence on China today and then anti-anxiety, where we already have some strength because we already are catering to customers globally for these therapies. So they wanted us to add certain more products. So this is how the R&D basket is developing.
[Operator Instructions] The next question is from the line of Ashwin Agarwal from [indiscernible] Advisors LLP.
A quick question on the new products that Oral Blue and the [indiscernible] products that you've been kind of studying new chemical entities, if I may call them. Is there any updates that you can share on those?
For the new products, like I said, we are now through R&D. We are actually now at the validation phase because we anticipate that this newer basket of anesthetic products can.
[indiscernible]
[indiscernible]
Yes, yes. I was talking about the cancer detection of new products and the other -- that you have the artificial skin burns that you guys have been working on in clinical trial, et cetera.
Okay. Okay. Sorry, I didn't understand the question earlier. Both the projects are moving really well. First, our focus is on the cancer detection kit. We have already -- I mean the clinical trials will begin very soon. We have already identified a partner who is going to support us with the clinical trials. Already in India, the patent has been filed. We are also looking at neighboring geographies like certain Southeast Asian countries like Indonesia, Malaysia from where we are also getting a lot of interest from the big formulation companies there where they want to put the patent and they also want to partner with us on this technology. So the oral cancer kit is moving really well.
We anticipate that in another 2 years, we will be ready with the final product and the product can be launched in the market because that is how much time it will take for the clinical trials and everything to be completed. The gel also, yes, it is moving fairly well. But for us, the first launch will be the oral cancer detection kit, then followed by the gel...
Okay. And you mentioned -- and maybe I heard it incorrectly, and I'm not very sure. You mentioned that the DSM is 25 to 30 tonnes of supply is anticipated in '25 fiscal. Is that correct?
Yes. Yes, we are anticipating about 20 to 25 metric tons of material supply to DSM in FY '25.
And what would that revenue number be?
Ashwini, DSM contract at its peak would be somewhere around INR 60 crores to INR 70 crores on the top line, Ashwini.
The next question is from the line of [indiscernible] a retail investor.
I'd like to know with respect to the U.S. this year, how much would be the revenue? Because if you see the last year versus this FY '24, our revenues have slightly decreased. So any outlook that you can give where we would be in terms of U.S. revenue directionally, not any guidance, but directionally
We also said that in the current portfolio, what we have in [indiscernible] the products has been the [indiscernible]. But there are a lot of new products which we are registering in the U.S. where they have good potential, products like dextromethorphan, allopurinol, tramadol, these products have very good potential in the U.S. market, and we have already started registering. If you see, we have about 15 U.S. DMS filed as of now. So in the next few quarters, in fact, for this financial year also, we are anticipating that the contribution from U.S. would be slightly higher than what it is today. Europe will still remain, at least for the next 2 years, Europe will still remain our major market, but definitely, U.S. will improve.
Okay. And the second question is in respect to the concentration. Now when I say concentration, it is with respect to the customers as well as your key therapeutic areas. In both of these, we have not seen a significant reduction in terms of concentration, like 49% revenues are coming from top 10 clients and analgesic anesthetic therapies contributing about 46% to the overall revenues. So again, what would be our plan to kind of reduce the concentration both on the customer side as well as on the therapeutic side?
So on the customer side, definitely, as some of the other products in the basket, therapies like antihypertensive, vitamins, then these -- as some of these products grow, automatically, you will see that the customer and the geographic concentration will reduce because it will be a more distributed portfolio.
In terms of therapies, see, in the anesthetic basket also, we have a lot of products. It's not only one product where we are driving the revenue. There are a few products in that basket. So therapy-wise also, we are adding new therapies like antidiabetic, we are adding now, anti-anxiety, we are adding now. Anesthetic basket also we are adding, but new products. So the customer base would be new, the geographies would be new. So this is how we are trying to derisk the portfolio as well as the therapy customer concentration by adding new products, which would scale up in different geographies.
Okay. And last question, on Slide 17, you mentioned that there are some anesthetic therapy, 3 ANDA projects and another [ ANDA ] projects for anti-hypertensive and vitamins. So when we -- when I see these [ ANDA ] projects mentioned here, is it that we are working on only APIs or intermediates or these would be formulations part of the CMO, CDMO projects.
It should be for APIs first. And for certain of our existing therapy products, we might do some forward integration once Ambernath is up and running.
So that would be our own formulations. Is that correct?
No, that would be only for CMO opportunities.
Ladies and gentlemen, due to time constraint, that was the last question. On behalf of Supriya Lifescience Limited that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you, ma'am.
Thank you, everyone for joining.