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Suven Pharmaceuticals Ltd
Earnings Call Analysis
Q1-2025 Analysis
Suven Pharmaceuticals Ltd
In the first quarter of FY '25, Suven Pharmaceuticals reported a significant revenue decline of 34% year-over-year, amounting to INR 483 crores when considering the pro forma effect of the Cohance acquisition. This declining trend, however, is expected to reverse in the latter half of FY '25 as shipment schedules ramp up, especially for the pharma CDMO segment. Free cash flow stood at INR 33 crores, with a robust cash balance of INR 864 crores at the end of FY '24. The company’s gross margins improved by 157 basis points compared to the previous year, influenced by a favorable business mix.
The management reaffirmed its expectation to double the combined business organically over the next five years, translating to a compound annual growth rate (CAGR) of approximately 15-16%. The pharma CDMO segment is anticipated to become the primary growth driver, and while a muted growth is expected in Q2, full-year growth is forecasted. Adjusted EBITDA margins for Q1 were reported at 38%, with an adjusted profit after tax (PAT) of 28%, reflecting strategic investments being made.
Progress on the merger with Cohance remains steady, with approvals received from stock exchanges and SEBI. Regulatory formalities are underway, and completion is anticipated in the next 7-10 months. Cohance itself reported a revenue of INR 252 crores, growing at 10% year-on-year with adjusted EBITDA margins of 20%. The merger is envisaged to enhance business capabilities significantly.
Suven has committed INR 22 crores to the first phase of its R&D center at Genome Valley, operational since June '24. The company has also focused on its current Phase III pipeline, which includes seven molecules, with expectations of two readouts in FY '25. This positions Suven favorably to capitalize on emerging opportunities in both pharma and specialty chemicals.
Positive market dynamics, particularly for the Indian CDMO industry, fueled by global supply chain realignments, have led to a substantial increase in request-for-quotes (RFQs). The company’s emphasis on enhancing customer relationships and engaging with new clients across the U.S., Europe, and Japan supports this growth. They expect meaningful conversion from these RFQs in the near term.
In response to market demand, Suven has restructured its specialty chemicals service line into a dedicated strategic business unit. Although demand recovery in the Ag Chem sector has been gradual, the company's focus on building differentiated capabilities is expected to yield growth in the latter part of FY '25.
Management has expressed strong confidence in the course of recovery for both CDMO and specialty chemicals segments. They believe that with continued focus on operational excellence and customer-oriented strategies, the company can secure its growth trajectory and meet future aspirations.
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Ladies and gentlemen, good day, and welcome to the Suven Pharmaceuticals Limited Q1 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Cyndrella Carvalho from Suven Pharmaceuticals Limited. Thank you, and over to you, ma'am.
Thanks, Darwin. Good evening, everyone. We welcome you all on our quarter 1 FY '25 earnings conference call. Let me introduce you to our management team here. Mr. Annaswamy Vaidheesh, Executive Chairman; Dr. Prasada Raju, Managing Director; and Dr. Sudhir Singh, CEO; and Mr. Himanshu Agarwal, our CFO.
After our opening remarks, we will open the floor for Q&A.
Now I hand over the call to our Managing Director, Dr. Prasada for his opening remarks. Over to you, sir.
Thank you, Cyndrella. Very good evening to everyone. We extend a warm welcome to all on our Q1 FY '25 earnings conference call. In terms of the macro industry dynamics, we continue to witness tailwinds in favor to CDMO industry. Customer sentiment remains positive towards India, driven by supply chain derisking and inventory macro. This continues to drive our confidence in medium to long-term growth.
To give you a few perspectives about pharma CDMO, our strategic orientation towards deepening and widening our pipeline is yielding results, a healthy inflow of RFQs. We continue to see higher momentum of inflows of RFQs, which is attributed to consistent efforts by the management, commercial team and R&D, supported by a positive industry macro. We remain focused and work with our customers to convert these RFQs meaningfully.
RFQs received with a healthy mix of mid-phase to lateral-phase projects, including commercial [ sales ]. Our [ BD ] team has also secured RFQs from a few new customers across U.S., Europe and Japan, covering both pharma CDMO as well as Ag Chem, highlighting our strategic emphasis on broadening our customer [ base ]. We are also deepening our R&D engagement with our customers, receiving RFQs for expanded product categories effective of efforts in the right direction for Suven.
Our current Phase III pipeline includes 7 molecules translating into [ toxin ] intermediates. We are geared up to meet customers' increasing demand for backward integration by utilizing our existing capacities.
In summary, we expect growth from second half of FY '25.
Moving on to Speciality Chemicals and [ Axiom ]. As mentioned in our previous update, we are leveraging the [ Axiom ] down cycle to our advantage, converting our Speciality Chemical service line into a new dedicated strategic business unit. In line with this, we have started investing on onboarding the [ main ] exports and operating partners in this space who can bring expertise and expertise.
Our Vizag plant is now dedicated specialty and Ag Chem facility, investing in differentiated capabilities for Speciality and Ag Chem business, focused on initiatives to drive continuous improvements, including instrumentation, automation, while implementing best practices of EHS.
Within the Ag Chem segment, demand recovery has been slower than expected, but we continue to expect growth based on the demand recovery during second part of the current financial year and beyond. We will have to wait for another quarter to get complete clarity from our customers on the Ag Chem side of it.
Moving on to our strategic intent and the commitment, what we have communicated to all of you in the past earnings calls on our acquisitions. Sapala acquisition, we have also completed the first phase by acquiring 51% of the stake on a fully diluted basis, which implies [ 67.5% ] on a current equity basis. We also started working very closely, and number consolidation is expected from Q2 of this financial year.
As we integrate, we have also started engaging with all the critical customers of Sapala and are also exploring cross-pollination opportunities. What we realized, one of the important growth drivers for technology platform of oligonucleotides in Sapala used to have a GMP facility, which is contemporariness to unlock the future opportunities. Hence, we are also crafting a plan towards the GMP facility in the coming quarters. We'll come back with more details around this.
Now I wish to give a brief business perspective on Cohance. As stated in their investor presentation, Cohance is back on the growth. ADC segment, Cohance is receiving more inquiries on new [ edition ] platform payloads, and new orders are also on track. The CDMO segment is expected to grow year-on-year in FY '25, with shipment schedules largely towards second half of the year, with inside purchase orders in hand.
Coming to API Plus, Cohance is experiencing demand recovery. It is evident by the fact that it delivered 22% of year-on-year growth in Q1 and the order book remains healthy to deliver growth on a full-year basis.
In summary, overall outlook, there is no change in the outlook, as we have communicated in the past. Q1 has been in line with our expectation, while Q2 will see a muted growth. As we mentioned earlier, we will deliver growth on a full-year basis versus last year. The key strategic initiatives are pretty much on track with the right inputs that what we have defined. And we wish to reiterate our aim to double the combined business organically over the next 5 years and M&A to act as a growth accelerator.
With this, now I would like to request Himanshu Agarwal, our CFO, to walk you through our financial performance and provide further updates to you. Thank you.
Thank you, Dr. Prasada. Good evening, everyone. In quarter 1 FY '25, Suven generated a free cash flow of INR [ 33 ] crores with a cash and bank balance of now at INR [ 864 ] crores at the end of [ '24 ]. Overall, company's revenue declined by [ 34% ] year-on-year. The pharma CDMO segment is expected to deliver growth in FY '25. The shipments scheduled is largely towards the second half of FY '25.
The gross margins improved by 157 days year-on-year, driven by the improved business mix. Adjusted EBITDA margins were at 38%, while adjusted PAT was at [ 28% ], reflecting our current investments aimed at steering Suven as the next growth chapter. EBITDA also has onetime cost of INR [ 35.7 ] million, which is largely the [Technical Difficulty], factoring for which the reported EBITDA margins for quarter 1 stood at 35.5%.
We have, till-date, incurred INR 22 crores on Phase 1 for R&D center at Genome Valley, which has been operational since June '24. The [ role ] CapEx for the current quarter stands at INR [ 27.4 ] crores. As informed earlier, our formulation plant, which is a cash per unit to the wholly owned subsidiary of Suven, was audited by the U.S. FDA, and we received 2 procedural observations.
We have also appointed new [ staff ] auditors, Grant Thornton, as well as internal auditors, Ernst & Young, reflecting our commitment to strengthening governings and internally [ contributions ].
Regarding the proposed merger with Cohance, you would be pleased to note that we have received approvals from stock exchange and SEBI. We have submitted a petition to Honorable NCLT Mumbai Bench and we're awaiting the hearing date. Subject to regulatory approvals, we expect the completion of this activity in the next 7 to 10 months.
According to Cohance's investor presentation, we have achieved a revenue of INR 252 crores, growing at 10% year-on-year, with adjusted EBITDA margins of [ 20% ]. The API Plus business reported a growth of 22% year-on-year.
On a pro forma basis, our combined Suven and Cohance, quarter 1 FY '25 revenue was at INR 483 crores and gross margins being at 67.3%. The adjusted EBITDA stood at INR 136 crores, with EBITDA margins at 28% and adjusted PAT being at INR 84 crores.
Cohance has also invested INR 41 crores in a new facility in Vizag, bought from Avra Synthesis. This capacity will add to our basic and intermediate supplies, increasing our flexibility towards backward integration.
Overall, as mentioned by Dr. Prasada, Cohance is back on a growth path, and we expect the trend to continue for the remainder of the year at a combined platform level, the anticipated growth in the second half of FY '25 with year-on-year growth in both revenue and [ EBITDA ] and further growth acceleration from FY '26 onwards. Thank you.
[Operator Instructions] The first question is from the line of Mira from Sky luck Investments.
What steps are we taking to convert to increase RFQs and to confirm orders? Are there any challenges you foresee in the process? What is the long-term vision for the new agrochemical [ SBU ]? And how does it fit into your Suven's overall growth strategy?
Thank you, Mira, for asking this question. RFQ, as you understand, there are 3 important elements. One is our abilities to respond on time and right cost and schedule in line with the customer expectation. As we discussed in our previous earning calls, we have also strengthened our back-end team on project proposal making and also created dedicated teams for us to be able to respond on time.
We also have mutual conversations with our customers to get the feedback before the decision is made. So that is the extent of relationship is also being nurtured further. With all these things, we expect definitely a meaningful and healthy RFQ conversion.
However, as all of us understand, based on the design of the business, some of the RFQs, which are at mid-stage, might take 2.5 to 3 months' time and something can take a little early. However, majority of the RFQs have already been responded to, and we only expect customer decisions to come in.
Second question, what you were mentioning about Speciality Chemicals, how it will fit into our larger thinking of the growth and how it will strategically fit into, enough deliberations that we have -- a few things that we wanted to accomplish. It's not no more a separate service line of the business.
We also had a candid conversation, thanks to our customer and a partner, who has given a feedback saying that the entire mindset is different and the skill set needs for Speciality and Ag Chem is different than pharma, while science remains the same.
We knew this, but we were only waiting for the right time to come in. We felt when the business is in the process of recovery, we have an option to clearly invest our time and effort to separate it out. With this, we can stay completely relevant to our customer, and we also can invest time and effort to have a continuous improvement mindset and also highest level of efficiencies that is needed for us to be extremely relevant in the speciality chemical industry.
With this, our opportunities of going further deeper with existing customers will be much more better. Hence, it also secures our future growth as we have also decided that while the pharma CDMO becomes one of the important growth driver, Speciality Chemical business remains as one of the biggest priority going forward. By earmarking this as an independent BU, which gives enough focus, that's the reason we have agreed to decide this step.
I hope it responds to your points, Mira.
The next question is from the line of Madhav from Fidelity International.
I had two questions. First one was on Cohance's margins in quarter 1. Maybe I lack some basic understanding, is it that there's some seasonality in the business that quarter 1 is generally softer? And then because of [ operating ] leverage to -- which is stronger, is that a [ precedent ] for margin pressure in Q1?
If we understand correctly, Madhav, your question is primarily, is the quarter 1 lower and the margin pressure is there on Cohance, if that is what your question is. As you understand -- is that your question, Madhav?
Yes, exactly. Yes sir.
Yes. So it's a design of the business, and we don't expect any full-year basis impact, which can adversely create a trouble to us. It is definitely -- as per the plan, it is slightly better than our plan, and we don't expect any challenges, both in terms of phasing as well as material margin. However, quarter-on-quarter business mix changes. That's the reason you see it. And it is not a right reference point to judge this business on a quarterly basis.
Because if I look at FY '21 to '24, full-year margins have been 29% to 32% and quarter 1 was 19.5%. So I was just trying to understand that maybe quarter is of the reflection we should look at full-year [ view ], right, I guess.
One more additional point, Madhav. In this quarter, the mix of API Plus is higher than the CDMO. CDMO mix is going to be improved towards the latter part of the year. That's the way to look at it.
So Cohance's full-year margins will remain in that same 50% is what we have delivered last 4, 5 years. So there's no change happening...
It will be same or it will be slightly better.
Okay. Perfect. Understood. And also the second question was on the ADC projects that we are working on. Could you remind -- just help me understand, is it the right understanding that we have 2 commercialized products in ADCs, which we are supplying right now? Is that correct understanding? The pipeline, we have 1 Phase [ III ] product in ADC, is that right or something different?
Your first understanding is correct. We are supplying the [ warheads ] through 2 commercially approved products. And the 2 projects are in pipeline now.
And these are -- in what phase are they in? Like is it Phase III, Phase II or where are they exactly?
One is at advanced stage.
The next question is from the line of Akanksha from RBC Capital.
My question is, what synergies do you foresee from the Sapala organic acquisition and how will it be integrated? You mentioned you have a higher momentum of RFQs with the 2x increase compared to the same period last year. What adequate factors are driving this surge in the RFQs?
Thank you, Akanksha, for this question. Synergies on Sapala, as we have alluded during our merger time, predominantly, the cross-pollination of the customer is one important factor that we have considered. And we also seem to have a similar kind of a reception. We have started meeting all the customers. And whatever assumption that we made pre-acquisition is still valid.
Second, we also have -- second, on the RFQ point, there are three things which are changing, as you understand. Globally, the clinical trial trend is substantially increasing and public domain information [ phase ] coming closer to -- 22,900 is the closure number, where clinical trials are happening, out of which 52% remains in the small molecules. That is definitely one important good news.
And when we compare with '23 to '24 number, the number of small molecules in the pipeline has also increased by upwards of 15-plus percentage. This is one important factor, which is definitely helping us to generate more RFQs.
Second point, there is also a sentiment towards geopolitical issues and towards India. That is also favoring, not just to us, to the entire Indian CDMO industry, which has also helped.
Third, our internal actions of increasing our commercial effort and business development effort, including the back end, which we're trying to be much closer to the customer; is also helping us to have more number of RFQs coming to us.
The next question is from the line of Varun Bang from Bandhan Life.
So we have talked about continued momentum in RFQs. So can you share more perspective on kind of projects that we are receiving, a qualitative perspective on RFQs that we are receiving versus kind of projects that we are having in existing pharma CDMO business?
Thank you for the question, Varun. I would request our CEO, Dr. Sudhir, to respond to your questions.
Thanks, Prasada. So I think in the previous [ question ], what you heard from Dr. Prasada that these are the combination and mix of both early-phase development and late phase and commercial as well. What you're talking about momentum, see, if you do not have an early phase, you don't develop the pipeline. So basically, what we are trying to do is develop a pipeline of more projects from early phase.
However, as he said that we have also started since we started our commercial engine a couple of months back, and that has started seeing results in terms of RFQs. So we have started seeing RFQs from the new customers as well.
So I wanted more qualitative perspective on the RFQs that are coming versus existing CDMO projects that we are working on.
So it's more or less similar in line, but there are also new avenues are also we are able to experience it. But, Varun, you should allow us to come back to you once something becomes real.
Got it. And actually I also wanted -- sorry.
You'll see some change in the RFQs, especially in line with the new therapy indications, which are growing substantially. We see some change in the mix. However, it's too early for us to comment.
Got it. And from a commercial standpoint, how do you see them versus existing pipeline that we have? Are they same as existing projects? Or will it be more lucrative from a margin standpoint if they eventually [ scale in ] volumes?
Indeed, yes. But again, we go back to same thing, Varun. I think you should allow us for some more time.
Got it. And can you share more perspective or let's say, more color on the kind of projects that we are looking at, which is going to drive growth in H2?
So it's a combination of both commercial as well as some of the reloads and the new RFQs. And for existing product, we have almost -- we have purchase orders in hand. It's a question of our abilities to deliver. That gives us the confidence that the H2 will be much more assured for getting the growth coming back to us. However, there are some projects where we have to win some of the RFQs. It's a combination of both [ products ].
Got it. Got it. And any thoughts on dividend policy? Isn't it more prudent to have a dividend payout policy? How is management and Board looking at it?
Himanshu, if you can answer this.
So Varun, we articulated the dividend policy, and it's kind of there on the Investors section. So the -- I mean, obviously, as we all understand, the dividend is a function of free cash, and cash is a function of how you deploy, whether you deploy in new technologies and increase the business versus you give it out as a dividend.
I mean as you would have noticed, we have acquired a strategic -- we've done a strategic investment of Sapala, which you -- right now, there has been discussion about what are the synergies and what is the benefit that the business will get.
So we feel that there is a very clear direction from a long-term technology deployment. And we feel that, that is the right opportunity for us to use the cash that is there. However, having said that, there is a very clearly articulated dividend policy that's available on the website.
[Operator Instructions] The next question is from the line of Jatin Chawla from RTL Investments.
So my first question is, you've spoken about RFQs last quarter and this quarter as well. I just wanted to understand broadly at an industry level, sort of timeline is there from this RFQ to getting from orders?
Certainly, we can actually give you a little broader perspective about from an industry standpoint because RFQs can be from, let's say, early phase and to mid-phase to late phase. Early phase can be 4 to 6 weeks, and mid-phase can be 6 to 8 weeks, and 8 to 12 weeks is the late phase. That's a normal industry trend. We also expect the same thing to happen to us as well.
So broadly, then over a 3-month period -- like the outer limit for the commercial is 8 to 12 weeks. So over a 3-month period, there should be some decisions that you should see. So when you talk to us next quarter, we would have some decisions on these RFQs that you have seen and some news on orders as well?
Your understanding is absolutely right. It is an ongoing process. Definitely, wherever we see some improvements, whatever it becomes real to us, certainly, we will bring this information back to all of you.
Great. My second question is on the ADC side, you said there are 2 projects in pipeline and one at an advanced stage. This is for Cohance. Are both these projects in pipeline for the existing [ borrowers ] -- or the existing ADC? Or is there something for the new one?
So it's a combination of customized payloads and also existent payloads. At this point in time, both the things are showing a lot of interest. And as we are speaking on one of the existent payloads, we are in advanced stage of discussion with one innovator company. And certainly, once it becomes real, this information can be shared appropriately. But definitely, we see a lot of traction than what it was a quarter before.
That's good to hear. The next question is on the agri side. What gives you the confidence that things will really recover in the second half? I can see for your pharma side that you have firm orders in hand and you're seeing a very strong RFQ pipeline. On the agri side, what is it that's driving this confidence that second half onwards, we should start seeing growth come back?
Jatin, I think it's a very valid question. So before we sought out and -- that will solve for our growth, we have to solve for the macro changes, whether it is destocking, whether it is [ element ] impact or whether it is brought in other parts of the countries, coupled with our customer growth, then our growth can come into.
What we learned from our customers is one of the important projects, they're able to see some level of openness, where they wanted to look for volumes coming for half of this year to next year, where definitely the demand is coming back to us. That is one important factor that we are doing.
And definitely, with the easiness of destocking, which is coming almost to the closure stage, the demand will definitely improve. So it's a function of market and customer, which both we see a positive sign.
Got it. And just one quick clarification. You have said that in your, I think, guideline -- initial remarks, you said you expect growth for the full year in the pharma CDMO piece. In the -- combined in pharma plus agri also, do you expect growth in the full year? This is excluding Cohance.
So overall, CDMO Cohance -- Suven is going to grow by end of this full year.
Got it.
We have the next question from the line of Sangeeta Agarwal from Jain & Company.
So my question is also on RFQs. So in RFQs, what are the categories wherein we are seeing expansion, expansion to commercialization sales [Technical Difficulty] payback?
Ma'am, can you just elaborate what exactly do you mean by categories?
Sorry.
Can you just elaborate what exactly you intend to say category? Meaning, what exactly the...
Different illnesses. Basically, that's what I'm looking at.
Different?
Different illnesses.
Okay. So predominantly, again, it is oncology that is the key driving force. And there are some products which are also coming as orphan drug products. Because of these two, there are some products which are already having a fast-track approval. Predominantly, these are all the few things as of today we have.
Apart from that, recently, we have also started getting RFQs other than this category as well, but it is too early to comment right now. But maybe a quarter and 2 quarters later, once we -- it becomes real, we can come back to you.
So any breakup you can give?
Not exactly at this stage, ma'am. It's too early to comment.
The next question comes from the line of Ankit Shah from Canara Robeco Asset Management Company.
So firstly, a clarification. So can you elaborate whether this one position -- product you are in talks with an innovative company, is it an existing client? And if you could share whether it's like a Phase II, Phase III, what commercial product, any granularity you can give on that?
In which segment, Ankit?
Under ADC, the one pipeline product you said you are in talk with an innovator company.
So it's a newly onboarded innovator company.
Right. Is it like a Phase III product or it's a commercialized product?
Yes, we will come back, but it is definitely at an advanced stage.
Fine. My second...
Yes, as you understand, Ankit, just to let you know to the point what Sangeeta madam also has asked the same question, when we say some of the products which are in oncology segment, history says, majority of the oncology segment products are either a fast-track approval or a breakthrough therapy. So obviously, the time to market is much faster than the usual traditional product.
Hence, once we have a view, definitely, we will come back to you saying that this is what the current status is. But definitely, it is going in the right direction.
Right. My second question relates to Suven's CDMO business. So in the presentation, you have mentioned there are 7 molecules, which are in Phase III. Is there any visibility on commercialization on any of these? I mean, in next 1 year, do you see anyone being to commercial phase?
So Ankit, we have to follow the customers very closely. Again, we have to qualify our statement. What we heard from our customers, at least 2 molecules readouts are expected in FY '24. That's what we learned. If anything better is known to us, we'll certainly inform you.
So you mean FY '25 to get out of it?
Yes.
Got it. Fine. And so next, a couple of clarifications. Personally, the working capital days for Suven Pharma have increased to 127 days. So any particular reason for that? Sequentially, it has risen.
So Ankit, as we speak, we had certain delays, from a receipt of supplies with the customers, given the situation in the Red Sea and the Gulf area. So the shipments got delayed. And as a result, the customers who pay us on site, the recoveries happened in the month of July. So almost INR 100 crores of debt has been received as of 31 July. So that's been a bit of an aberration because of the way the quarter ended. Nothing else as a reason.
Essentially, it has normalized as of July 31?
Yes, it has.
Got it. And one data point I wanted. So last presentation for Cohance, you had given the share of gross profit from the CDMO segment. Is that something that you can share this quarter as well?
So on that, we'll come back to you.
Sure. And one last thing from my end. So we had acquired Sapala, but any other acquisitions that you are looking for, any other white spaces that feel you need more capabilities? And anything in the pipeline that you have still, right now, on acquisitions?
So Ankit, if it may come in, definitely, that's one of more important strategic endeavor to us to see to it that how Suven growth can be accelerated. Definitely, we have landed up in oligonucleotide space right now. And we are also looking for other adjacencies, and we have also strengthened our M&A team further.
And when we come back with a specific [ increment ] of investment, definitely, we will come back to. Our endeavor is to look at unique technology platforms, which can accelerate the combined organization growth and also helps us to stay completely relevant to our customers.
Got it.
The next question is from the line of Rajiv from Dimension Securities.
I want to inquire about the dividend policy.
Thank you, Rajiv. And I am requesting Himanshu to take over.
Rajiv, I had, in fact, responded to Varun on the similar question that there is a dividend policy, which is publicly available on the website of the company.
Okay. Because our investors are looking forward like Suven has a tradition of getting very high dividend every year. And I consider that now Suven -- any mergers you are taking [ are ] complete. And sir, in the last 3 months, share prices have gone tremendously very high. So is there not any operator like [ bridging ] or something? Because our investors are also a little upgraded. I hope you don't mind.
So Rajiv, I think it's a question that you would understand that's not a domain of ours. And we are happy to take all queries on business performance of 30th June quarter. But apologies that this is something which is completely outside our domain.
Because we are heavily -- our clients and myself all are heavily invested in the company.
We request you to please rejoin the question queue sir, for follow-up questions.
The next question comes from the line of Darshit Shah from Nirvana Capital.
Yes, so I heard that now in the Suven CDMO, out of 7 molecules, 2 molecules data is to be read out in FY '25. Sir, also on the -- so these are for the intermediates. So earlier also, we were in [ Fox ] to kind of value migrate to API with our existing as well as new innovator companies. So anything that is on an advantage for that?
We have actually provided all the insights. But as of today, Darshit, the majority of the opportunities are coming on the registered starting material to GMP intermediates, and we don't seem to have so many API inquiries coming in. However, we have actually given our proposal, and our customer is evaluating potentially to consider appropriately.
We do have the capability that has been explicitly understood by our customers, but decision is awaited. However, all the RFQs what we are getting are not in API space.
Got it. And sir, if you look at our aspiration which we are highlighting to grow at around -- I mean, to grow the combined business to double in the next 5 years, so that works out to be around 15%, 16% CAGR. We seem to be pretty low. Like for both the companies, if you look at historical 4, 5 years, both the companies have kind of grown at 20%, 25% CAGR.
So are we not seeing enough green shoots? Or are we being too conservative because we are the minority shareholders, are probably in a little far higher growth with advent kind of coming in, combining this business and all? So where am I missing, if you can kind of throw some light on that?
So Darshit, thanks for asking this question. Internally, what we intend to communicate is our strategic direction. However, whenever we see improvements coming in, definitely, we'll come back and communicate how can we further accelerate. And definitely, our aspirations are higher and better, but we prefer to commit and deliver our promise to all of us.
Got it. Actually, the earlier management anyway, didn't guide anything, but they kind of delivered without any commitment or guidance. But happy to kind of have let me some guidance from the new management, but I hope you kind of deliver far better than what you are aspiring.
You can be rest assured. The company has a very strong fundamentals, Darshit. And also, we have rebooted whatever is important for our organization, both on R&D side and commercial side. We're able to see how we are deepening our pipeline and bringing a very, very healthy pipeline, not just for a few years to come in and decades to come in. As a management team, we feel extremely strong about delivering what we are committing in midterm to long term.
The next question is from the line of [ Dhiresh from Witek.]
Just to confirm my understanding, did I -- do you say that for full year, you will grow in the pro forma entity, will have a growth on top line in [ a given time ]?
That's right. Absolutely.
Okay. And this -- in Cohance, there is a growth in revenue, but you're saying CDMO has grown 22%. That means Cohance -- sorry, API has grown 22%, API Plus. That means Cohance CDMO has degrown in this quarter year. Your view?
If I have to say, that was set to have a record the same kind of growth, and it was not a surprise. It's more of a cyclical nature of the business. They have secured the purchase orders, but deliveries are predominantly scheduled in H2. Hence, the overall combined platform level of Cohance on a full-year basis, it will be same or better than the last year from a CDMO mix standpoint.
Understood. Okay.
The next question is from the line of Karthik from Suyash Advisors.
Sorry to be belaboring the guidance question, but just to understand the Suven guidance better, so if you match or do better versus last year, on a full-year basis, that would largely be driven by CDMO business. Is my understanding correct? Or do you believe that the Speciality also can come back substantially to match at least last year's levels?
Currently, your understanding is correct, Karthik. Currently within the CDMO, pharma CDMO is going to be the primary driver to deliver our promise current year.
Thank you. Ladies and gentlemen, we have no further questions. I would now like to hand the conference over to the management for closing comments. Over to you.
Thank you, Darwin. Thank you, everyone, for joining, and we wish to talk to you in next quarter. Thank you, everyone.
Thank you, everyone.
Thank you. On behalf of Suven Pharmaceuticals Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.