This time your margins were close to like 21%. But going ahead, what is the guidance on your margins and what will drive your margins in the times ahead? Can we expect to see a 20% plus number for FY25?
Nandini Piramal: We have seen that with EBITDA growth, margin expansion has come as a result of stronger revenue growth. We are a fixed cost business. Stronger revenues lead to operational scale. We have also spent a lot of time and effort on cost optimisation and operational excellence. So, along with these, I think we have seen that margin increase. For FY25, we are actually guiding an early teens absolute improvement in revenue and early teens margin growth as well. So, that is what I can say for FY26. In three to five years, we can see 22- 25% EBITDA growth margins.
The CDMO saw a growth of 29% on a year-on-year basis at around Rs 1,649 crore odd. Can you share the growth outlook going forward for the CDMO business?
Nandini Piramal: We are expecting for PPL, overall early teens revenue growth. The CDMO business should grow a bit faster than that, as well as the Indian consumer products.The complex hospitals generic segment has seen a decline of 5% on a YoY basis. Because of the pricing, we have seen a pressure in the quarter gone buy, but going ahead, do you believe that there could be some reversal in this particular segment in terms of the positive side and what is the overall outlook?
Nandini Piramal: This is a generics business and we will see some price declines in that and that is what we are going to continue to see. However, we are quite optimistic about the medium-term growth of the business. We are expanding capacities at our plant in Digwal, Telangana, as well as Dahej, Gujarat and that will give us the opportunities to play in the rest of world markets where we do not have as much of a presence. Additionally, we are also looking at launching new products under development. Those will be over the next two- to three-year time frame. So, medium-term, I am actually quite optimistic about the business.What is the guidance on the net debt reduction? We have seen your net debt to EBITDA improve from 5.6x at the start of the financial year to 2.9x at the end of FY24, where can we see this number headed?
Nandini Piramal: So, as you have rightly noted we reduced our net debt from 5.6 times EBITDA to 2.9. Next year, as we see an absolute increase in EBITDA, we will look to bring down that net debt further. But I cannot give you an exact number at the moment. But the direction is lower.
We understand that this is a difficult biotech funding environment and what all these companies are also highlighting and pointing out is that maybe in the second half of FY25, we can see this whole environment and the business dynamics improving for the industry. What is your sense on the industry growth outlook and especially with respect to the US biotech funding?
Nandini Piramal: Our expectation is, a mid-teens revenue growth. If the biotech industry improves, that would be an upside to our growth. We have not factored that in yet because as of right now it is too early to say.
You also spoke about the new product launch in your previous answer. Tell us about the product launch pipeline then for FY25.
Nandini Piramal: In our CDMO business actually this year, in the FY24, we saw our on-patent business that comprises of about 50% of our overall business, for that, that has been a big shift for us because last year it was 45% and for the first time our trajectory, it becomes almost a majority of our business, so that is something that we are very excited about.
As we go forward next year, we think in the CDMO business, the on-patent commercial business should increase as well as our differentiated offerings and the commercial products. This excites us. In India consumer products, we have launched about 150 new products over the last three years. We are going to continue to launch new products. We are particularly excited about our new men’s range, Bohem and we see that as a very exciting market to play in.
