Shree Ganesh Rem — Q4 FY25 earnings call

Call held 21 May 2025

Management summary

Shree Ganesh Remedies faced significant headwinds in Q4 and FY25, with revenue and profit declines attributed to European slowdown and domestic pricing pressures. However, the company achieved healthy volumetric growth and improved full-year EBITDA margins through CRAMS contribution and operational efficiencies. Strategic initiatives, including a new Japanese CRAMS MOU, agrochemical product commercialization, and capacity expansion, are underway, positioning FY26 as a year of consolidation for future growth.

Highlights

  • Q4 FY25 Revenue from operations declined 35% YoY to ₹24.43 crores, primarily due to European slowdown and 25-30% lower realizations in domestic portfolio.

  • Q4 FY25 EBITDA was ₹9.88 crores, down 42% YoY, with EBITDA margin contracting by 492 bps to 40.4%.

  • Q4 FY25 Profit After Tax (PAT) decreased 48% YoY to ₹6.60 crores, impacted by higher depreciation and finance costs from new capacity.

  • Full Year FY25 Revenue was ₹108.60 crores, a 14% decline YoY, while EBITDA stood at ₹39.21 crores, down 6% YoY.

  • Full Year FY25 EBITDA margin improved by 290 bps to 36%, driven by operational efficiencies and increased CRAMS contribution.

  • Signed an MOU with a leading Japanese client for a Specialty Chemical project, with commercial supplies expected to commence later this year.

  • New pilot plant is expected to be operational in FY26, and FY26 is projected as a year of consolidation with anticipated margin pressures of 24-26%.

Concerns

  • Pricing Pressure on Domestic Products

Key financials

2 periods

Q4 FY25

  • Revenue
    ₹24.43 Cr
    YoY -35%
  • EBITDA
    ₹9.88 Cr
    YoY -42%
  • EBITDA Margin
    40.4%
  • PAT
    ₹6.6 Cr
    YoY -48%

FY25

  • Revenue
    ₹108.6 Cr
    YoY -14%
  • EBITDA
    ₹39.21 Cr
    YoY -6%
  • EBITDA Margin
    36%
  • PAT
    ₹23.1 Cr
    YoY -18%

What they filed

Q1 FY27: revenue down 41.8%, net profit down 67.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue32 27 24 25 30 −6%21 −22%33 +36%14 −42%
EBITDA11 10 10 7 10 −15%7 −32%11 +15%3 −54%
Net profit6 5 7 3 5 −23%3 −43%6 −5%1 −68%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • CRAMS
    15% Revenue Share (FY25)

Capital allocation

high confidence
  • Capex ₹15 Cr internal accruals for Dahej site infrastructure
    • Commissioning of manufacturing block 8 and other utilities
    • Construction of new pilot plant
    • Development of common infrastructures and utility at Dahej site
    • Commissioning of 2.5 MW solar power park
    • Expansion at Ankleshwar site
    The profit after tax for the quarter was 6.60 crores down 48% year on year. The decline in profit after tax is experienced due to commissioning of manufacturing block 8 and other utilities leading to higher depreciation and finance cost. While this new capacity has not yet contributed proportionately to the revenue, it is critical asset that will drive the future growth as utilization improves. In addition, we have commenced the development of common infrastructures and utility at our Dahej site. This strategic investment funded through the internal accruals will help us enable the scale production capacities as we secure firm orders for the large-scale crams projects. This infrastructure enhancement is a critical support to our long-term growth ambitions and maintain our position as preferred custom synthesis partner of choice from India. We have recently commissioned a 2.5 MW solar power park which is expected to contribute up to 70% of our electricity from the renewable sources. At the moment we are going to use up the Ankleshwar facility and also as you know we have recently joined one of the acquired one of the neighboring lands. So, we would be expanding in that space. So, it is still going on, I would say. How much should be the CapEx for FY26 broad number of planning that you have? Approximate around 15 cr.
  • Debt Debt disclosed
    The profit after tax for the quarter was 6.60 crores down 48% year on year. The decline in profit after tax is experienced due to commissioning of manufacturing block 8 and other utilities leading to higher depreciation and finance cost.
  • Liquidity Liquidity disclosed Dahej site infrastructure funded through internal accruals.
    In addition, we have commenced the development of common infrastructures and utility at our Dahej site. This strategic investment funded through the internal accruals will help us enable the scale production capacities as we secure firm orders for the large-scale crams projects.

Guidance & targets

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence 24-26%
    For FY26, we will see more normalizing of the margins in the range of 24 to 26% of operating margins. And we anticipate that it will continue for the future years as well.

    — Parth Kothia

Revenue

  • Top Line Growth Revenue · FY26 · Medium confidence Moderate growth
    So, I think FY26, we will see a growth from here from the current financial year FY25, but not the drastic increase in terms of absolute number and percentage.

    — Parth Kothia

  • Revenue Growth Revenue · next 3-4 years · High confidence Doubling revenue, 20-25% CAGR
    So once the approved products which goes commercialized in 3-4 years, we will see like the growth like revenue doubling from here and that will meet our internal benchmarks of 20 to 25% growth, CAGR growth for 3-4 years.

    — Parth Kothia

Project Commercialization

  • Japanese Project Approvals/Validation Project Commercialization · mid-calendar year 2026 · High confidence Concluded by mid-calendar year 2026
    But from the speed of the project that is ongoing at the moment, we are confident that the approvals and the validation will be concluded by the mid of calendar year 2026.

    — Gunjan Kothia

  • Japanese Project Commercial Supply Project Commercialization · calendar year 2026 / 2027 · High confidence Small quantities in calendar year 2026, good commercial quantities in 2027
    So, by the next year, this time we will have the samples and the small quantities approved, so in next year you may you may see some of the commercial pilot scale, small quantities, but the year after we will start selling good commercial quantities so.

    — Gunjan Kothia

  • Agro Product Commercial Order Project Commercialization · calendar year 2026 · High confidence Small commercial order in calendar year 2026
    And they are expecting to place a small commercial order in next year calendar year 2026.

    — Gunjan Kothia

Project Revenue Potential

  • Japanese Project Peak Revenue Project Revenue Potential · peak for a year · High confidence 30+ crores per year (can go up to double)
    At the moment, on a safer side, the peak revenue is 30 plus crores, but it can reach up to, can go up to double. But what Japanese team has conveyed us it can reach at its peak for 30 plus for a year.

    — Gunjan Kothia

  • Agro Product Peak Revenue Project Revenue Potential · peak in 3-4 calendar years · High confidence 30-35+ crores
    And their prediction is that the product would reach at its peak in next 3 to 4 calendar years. It would be in a similar scale at with the Japanese. It's 30-35 plus CR.

    — Gunjan Kothia

Capacity

  • New Pilot Plant Operationalization Capacity · current financial year (FY26) · High confidence Operational
    The construction of the new pilot plant is progressing well and is experienced to be operational from the current financial year.

    — Parth Kothia

Capex

  • FY26 Capex Capex · FY26 · High confidence ~15 crores
    How much should be the CapEx for FY26 broad number of planning that you have? Approximate around 15 cr.

    — Parth Kothia

Asset Utilization

  • Net Asset Turnover (Plant & Machinery) Asset Utilization · going forward · High confidence 2x
    Going forward we will see two times the asset turnover for the net as property, plant and plant and machinery going forward.

    — Parth Kothia

Revenue Growth

  • Pharma/Spec Chem Existing Products Growth Revenue Growth · Medium confidence 12-15%
    Spec Chem is for the export market somewhat for the domestic market. The existing projects there is a growth potential for the, I would say 12 to 15% growth potential.

    — Parth Kothia

What to watch in Q1 FY26

New Pilot Plant Operationalization

FY26
Current Progressing well
Target Operational

Why it matters

Accelerates the development and scale-up of new CRAMS projects, crucial for future growth.

The construction of the new pilot plant is progressing well and is experienced to be operational from the current financial year.

Risks & concerns

  • Pricing Pressure on Domestic Products

    high

    Realizations fell approximately 25-30% across products due to intensified competition and changing market dynamics in India, impacting Q4 revenue and margins.

    Management acknowledged

  • Slowdown in European Region

    medium

    Contributed to a 35% decline in Q4 revenue, as it is a significant market for the company.

    Management acknowledged

  • Underutilization of New Capacity

    medium

    Commissioning of manufacturing block 8 and other utilities led to higher depreciation and finance costs, but this new capacity has not yet contributed proportionately to revenue, impacting Q4 PAT.

    Management acknowledged

  • Short-term Margin Pressures in FY26

    medium

    Expected to persist due to contract repricing and ramp-up costs associated with new capacities, making FY26 a year of consolidation.

    Management acknowledged

Q&A highlights

6 direct
FY26 Margins & Topline Outlook Direct
For FY26, we will see more normalizing of the margins in the range of 24 to 26% of operating margins. And we anticipate that it will continue for the future years as well. So for FY26, I think as mentioned in the commentary this year, it's a year of consolidation.

Clarifies management's expectation for profitability stabilization and growth strategy for the upcoming fiscal year amidst current challenges.

Asked by Ankit Gupta

Japanese Project Revenue Potential and Timelines Direct
At the moment, on a safer side, the peak revenue is 30 plus crores, but it can reach up to, can go up to double. But what Japanese team has conveyed us it can reach at its peak for 30 plus for a year. ...the approvals and the validation will be concluded by the mid of calendar year 2026.

Provides specific revenue targets and a clear timeline for the commercialization of a significant new CRAMS project.

Asked by Ankit Gupta

CRAMS vs Generic Product Mix and Margin Impact Direct
So, year on year, the revenue from the Crams will keep on increasing. I cannot comment on the figures exactly, but what it is now and what it is currently around 15%, definitely it will grow to some extent or it will grow to maybe double or triple the current extent in the future. ...our existing products which are like a generic products you know that there is always a competition and there is always the sacrificing of the margins and the volumes...

Explains the strategic rationale behind CRAMS focus, differentiating its stable, higher-margin nature from competitive pressures in generic products.

Asked by Dhwanil Desai

Asset Utilization and Future Capex Direct
So, I think so as of last year, FY24, the net margin like asset turn was three times. Currently it's around 1 and 1/2 to 2 times. Going forward we will see two times the asset turnover for the net as property, plant and plant and machinery going forward. ...Approximate around 15 cr. [for FY26 CapEx].

Addresses concerns about asset efficiency post-capacity expansion and provides a concrete CapEx plan for the next fiscal year.

Asked by Ayush Mittal

Reasons for European Slowdown Direct
So, the intermediates or the products that we are supplying already to our European customers, those were of quite generic API and as the new APIs are taking shape, the customer has focused on new API launch and also, they are gaining the volumes, hence the whole generic volumes of the have slowed down and that has led to the decrease in the purchase power.

Provides a clear explanation for the revenue decline in the European market, linking it to a shift in customer focus towards new APIs.

Asked by Mayank Agarwal

Complexity and Selection of New CRAMS Projects Direct
Now all the new molecules that we are taking are at least four steps or six step projects, which requires multiple chemistries, master or expertise, so all our projects or all our crams projects are at least four or five steps at top, they are going up to 8 steps as well. ...we are not developing the chemistry and then looking for projects. At this stage, we are developing chemistries based on the customer suggestion and requirements that is quite niche to the Asian or Indian market.

Highlights the company's advanced capabilities in complex chemistry and its customer-centric approach to CRAMS project selection, indicating a strong competitive advantage.

Asked by Mayank Agarwal

3 min read 5 chapters

Detailed narrative

Q4 & FY25 Financial Performance Overview

Shree Ganesh Remedies reported a challenging Q4 FY25, with revenue from operations declining 35% YoY to ₹24.43 crores, primarily due to a slowdown in the European region and a 25-30% reduction in domestic product realizations. EBITDA for the quarter fell 42% YoY to ₹9.88 crores, leading to a 492 bps contraction in EBITDA margin to 40.4%. Profit After Tax (PAT) also saw a significant 48% YoY drop to ₹6.60 crores, impacted by higher depreciation and finance costs from newly commissioned manufacturing block 8. For the full FY25, revenue was ₹108.60 crores (down 14% YoY), while EBITDA decreased 6% to ₹39.21 crores, though the EBITDA margin improved by 290 bps to 36% due to operational efficiencies and increased CRAMS contribution. Full-year PAT was ₹23.10 crores, an 18% decline YoY.

Strategic Focus on CRAMS and New Project Development

The CRAMS division remains a cornerstone of the company's growth strategy, contributing approximately 15-20% of FY25 revenue. A significant development is the signing of an MOU with a leading Japanese client for a Specialty Chemical project, with commercial supplies anticipated to commence later this year, targeting a peak annual revenue of 30+ crores. In the agrochemical sector, the company secured source status for a key product destined for the European market, with commercialization expected in H2 calendar year 2026, aiming for 30-35+ crores peak revenue. These new CRAMS projects are characterized by higher complexity, involving 4-8 steps compared to previous 2-3 step projects, and are chemistry-driven and customer-specific.

Capacity Expansion and R&D Intensification

Shree Ganesh Remedies is actively expanding its capabilities and R&D efforts. A new pilot plant is under construction and is expected to be operational in the current financial year (FY26), which will accelerate the development and scale-up of new CRAMS projects. The company has also commenced the development of common infrastructures and utilities at its Dahej site, funded through internal accruals, to support future large-scale CRAMS projects. Manufacturing Block 8 was commissioned in Q1 FY25, and construction for the next manufacturing block is ongoing. The projected CapEx for FY26 is approximately ₹15 crores, demonstrating continued investment in growth.

FY26 Outlook: Consolidation and Margin Normalization

Management anticipates FY26 to be a year of consolidation and capacity building. Short-term margin pressures are expected to persist due to contract repricing and ramp-up costs associated with new capacities. EBITDA margins are projected to normalize to a range of 24-26% for FY26. Despite these pressures, the company expects moderate top-line growth in FY26 and aims for a long-term vision of doubling revenue with a 20-25% CAGR over the next 3-4 years, driven by the commercialization of new CRAMS and agro projects.

Asset Utilization and Sustainability Initiatives

The company's net asset turnover for property, plant, and machinery was 3x in FY24, but currently stands at 1.5-2x, reflecting the impact of recent capacity additions not yet fully utilized. The target is to achieve a 2x asset turnover going forward. In line with its commitment to sustainable manufacturing, Shree Ganesh Remedies commissioned a 2.5 MW solar power park, which is expected to contribute up to 70% of its electricity from renewable sources, reducing its environmental footprint.

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