Beta Drugs Ltd — Q4 FY25 earnings call

Call held 16 May 2025

Management summary

Beta Drugs Limited reported strong financial performance for FY25, with consolidated revenue growing 22.5% to ₹362.35 crores and net profit increasing 25.8% to ₹45.83 crores. The exports segment was a key growth driver, surging 73%. The company is actively expanding its product pipeline, pursuing regulated market approvals, and expects its Cosmetology division to turn profitable soon, despite some production disruptions due to an audit and delays in Mainboard migration.

Highlights

  • Consolidated revenue for FY25 grew 22.5% to ₹362.35 crores from ₹295.71 crores in FY24.

  • EBITDA for FY25 increased 32.25% YoY to ₹81.04 crores, achieving a margin of 22.37%.

  • Net profit for FY25 rose 25.8% to ₹45.83 crores from ₹36.43 crores in FY24.

  • Exports sales grew significantly by 73% to ₹80 crores, with a target to triple sales in 2-3 years.

  • Cosmetology division's EBITDA loss reduced from ₹4 crores to ₹3 crores, with profitability expected by September 2025.

Concerns

  • A 10-day audit from Mexico in March impacted production, preventing the company from achieving over ₹375 crores in revenue.

  • Financial costs increased by ₹4 crores in 6 months due to the coupon on convertible debentures.

  • Mainboard migration, initially targeted for July 2024, is still in process and expected between June and August 2025.

Key financials

  1. Consolidated Revenue ₹362.35 Cr +22.5%YoY
  2. Consolidated EBITDA ₹81.04 Cr +32.3%YoY
  3. EBITDA Margin 22.4%
  4. Net Profit ₹45.83 Cr +25.8%YoY
  5. R&D Spend 2%

What they filed

Q1 FY27: revenue up 26.0%, net profit up 33.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue180 88 94 100 103 −43%87 −1%94 +0%126 +26%
EBITDA39 18 17 20 21 −46%17 −6%18 +6%27 +35%
Net profit24 9 9 12 12 −50%9 +0%9 +0%16 +33%
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

Share of Revenue
₹363.3 Cr Total
  • CDMO ₹148 Cr 40.7%
  • Branded ₹103 Cr 28.4%
  • Exports ₹80 Cr 22.0%
  • API ₹20 Cr 5.5%
  • Derma (Cosmetology) ₹12.3 Cr 3.4%

Capital allocation

high confidence
  • Capex Capex disclosed
    • Facility upgradations in Adley Formulations and Adley Lab ₹11 Cr
    No, the entire fund is being placed in the FDs. We are still seeking an opportunity to utilize that fund, but we have utilized around Rs. 11 crores in the facility upgradations, mainly in Adley Formulations and Adley Lab.
  • Debt Debt disclosed
    • New borrowing Issued convertible debentures during preferential issue, carrying a coupon, which led to an increase in financial costs. Tenure is 18 months.
    Yes, I will tell you. This is because we have made a provision for convertible debentures which we have issued during the preferential issue. So the convertible debenture carries the coupon. Hello?
  • Liquidity Cash ₹117 Cr Rs. 117 crores raised from preferential allotment is currently placed in Fixed Deposits.
    No, the entire fund is being placed in the FDs. We are still seeking an opportunity to utilize that fund, but we have utilized around Rs. 11 crores in the facility upgradations, mainly in Adley Formulations and Adley Lab.

Guidance & targets

Revenue

  • Overall Sales Growth Revenue · next 3 years · High confidence double sales
    So, we will multiply, we will 3x our sales, we will double our sales in next 3 years.

    — Rahul Batra

  • Exports Sales Growth Revenue · next 2-3 years · High confidence 3 times sales
    So we are intent to 3 times our sales in next 2 to 3 years down the line from the export side.

    — Rahul Batra

  • CDMO Business Growth Revenue · every year · High confidence 5-10%
    Growth of CDMO business will continue between 5%-10% every year.

    — Rahul Batra

  • Derma Revenue Revenue · next financial year (FY26) · High confidence ₹30 crores
    By next financial, we are expecting to touch Rs. 30 crores.

    — Rahul Batra

  • Derma Revenue (Long-term) Revenue · after FY26 · Medium confidence ₹45-50 crores
    And after that, we are expecting to touch between Rs. 45 crores and Rs. 50 crores.

    — Rahul Batra

  • Regulated Market Revenue (Exports) Revenue · FY27 (May/June 2027) · Medium confidence picked up
    We will be seeing that market picked up in FY '27, starting of FY '27, maybe by May, June 27.

    — Rahul Batra

  • EU Market Revenue Revenue · after 2.5 years · Medium confidence start
    Revenue part from Europe will start after 2.5 years.

    — Rahul Batra

  • Overall Revenue Revenue · till 2028 · High confidence ₹750 crores
    So, till 2028, we have our revenue projections till Rs. 750 odd crores.

    — Rahul Batra

Profitability

  • Overall EBITDA Margin Profitability · High confidence 23-25%
    So our EBITDA margins for the Company overall is projected between 23% to 25%.

    — Rahul Batra

  • Cosmetology Division Profitability Profitability · September 2025 · Medium confidence profit
    So, this division in the next half year, in September, we might be having some profit from our Cosmetology division as well.

    — Rahul Batra

  • Segment Margins Profitability · going forward · High confidence maintain
    Yes, going forward also for the same divisions, the margins will be in the same line and we will try to keep our margins.

    — Rahul Batra

Other

  • Mainboard Migration Other · June-August 2025 · High confidence completed
    We'll be migrating between June and August this year.

    — Rahul Batra

Product Pipeline

  • New Molecule Launches Product Pipeline · this financial year · High confidence 6 new molecules
    We are in the process to launch 6 new molecules.

    — Rahul Batra

  • New Molecule Launches (Long-term) Product Pipeline · next 3-5 years · Medium confidence 20 new molecules
    This will be followed by 20 new molecules in the next 3-5 years.

    — Rahul Batra

  • NDDS Launches Product Pipeline · this financial year · High confidence 2 more NDDS
    There are 2 more NDDS, which we will be launching in this financial year.

    — Rahul Batra

  • NDDS Launches (Long-term) Product Pipeline · FY27 · High confidence 2 NDDS
    followed by 2 NDDS which will be launched in FY '27.

    — Rahul Batra

What to watch in Q1 FY26

Mainboard Migration Status

next quarter
Current In process, expected June-August 2025
Target Completion of migration to NSE/BSE Mainboard

Why it matters

A key corporate milestone that could enhance visibility and liquidity for investors.

We'll be migrating between June and August this year.

Risks & concerns

  • Production disruption due to audits

    medium

    A 10-day audit from Mexico in March led to a production loss of ₹7-8 crores in sales.

    Management acknowledged

  • Lengthy regulatory approval process for exports

    medium

    Registration timelines in regulated markets can range from 18 to 36 months, delaying revenue realization from new approvals.

    Management acknowledged

  • Lengthy EU GMP approval process

    medium

    EU GMP audit expected Oct-Dec 2025, with certificate taking 6 months post-audit, and revenue generation from Europe expected only after 2.5 years.

    Management acknowledged

  • Delay in Mainboard migration

    low

    Migration to Mainboard, initially targeted for July 2024, is still pending due to SEBI formalities, now expected by August 2025.

    Analyst acknowledged

Q&A highlights

8 direct
Export growth and margin profiles Direct
So exports already you have seen in the last financial year, we have grown from 46 to 80 this year. So there has been 73% growth as compared to the last year. So we are intent to 3 times our sales in next 2 to 3 years down the line from the export side. And the margins, of course, once today most of the sales are coming from the unregulated or semi-regulated markets. Once our dossiers are registered in the regulated markets, especially Brazil, Mexico, Philippines, Thailand, Vietnam, so these countries will eventually increase our margins further. So our EBITDA margins for the Company overall is projected between 23% to 25%.

Management provided specific growth targets for exports and clarified that margins would improve as sales shift towards regulated markets.

Asked by Nigel Mascarenhas

Segment-wise growth and OPM margins Direct
So for Branded, last year it was Rs. 82 crores, now this is Rs. 103 crores. So this is a growth of 25%. For CMO, it was Rs. 140 crores last year, Rs. 148 crores this year. So it is a 5% growth. For Exports, it was Rs. 46 crores last year, now this is almost Rs. 80 crores. So this is 73% growth. And for Derma, it is Rs. 6.83 crores last year and Rs. 12.30 crores this year. So it is 80% growth. And API is almost similar like last year, because the major consumption was internal. So it was Rs. 20 crores last year and Rs. 20 crores this year. ... So for Branded, it is somewhere around 34%-35% EBITDA margin; for CMO it is somewhere around 15%-16%; Exports it is 27%-30%; API it is 19-20%; and Derma as we have already discussed, that is of course, last year, we witnessed EBITDA loss of Rs. 3 crores. But the gross margins of Derma is somewhere around 67%.

Detailed breakdown of revenue growth and EBITDA/gross margins for each business segment was provided, offering clarity on performance drivers.

Asked by Aastha

Utilization of funds raised from preferential allotment Direct
No, the entire fund is being placed in the FDs. We are still seeking an opportunity to utilize that fund, but we have utilized around Rs. 11 crores in the facility upgradations, mainly in Adley Formulations and Adley Lab.

Clarified that the majority of the ₹117 crores raised is currently in FDs, with only a small portion used for facility upgrades, indicating significant cash reserves for future deployment.

Asked by Aastha

Timeline for revenue from regulated market licenses Direct
We will be seeing that market picked up in FY '27, starting of FY '27, maybe by May, June 27. ... Because the reason is once the approval is there, then the dossier have to be done. Then there is a registration timeline. So every country has a different timeline. Maybe some country has 12 months, most of the countries the timeline of registering a dossier is between 18 to 36 months. So that's why it takes time.

Management provided a specific timeline for when revenue from newly acquired regulated market licenses is expected to materialize, highlighting the lengthy registration process.

Asked by Sachin

Impact of Mexico audit on revenue Direct
So, we had orders in hand, but we could not execute the production side, both in API and formulations. Since the inspection was going on, and in between, there was Holi. So, 7-8 days gone in the audit side. That's why some of the products we couldn't manufacture and we couldn't provide the API. So, we could do the formulations. So, that's why it was halted. Otherwise, we could have done more Rs. 7 crores to Rs. 8 crores of sales in the last financial year.

Quantified the revenue loss (₹7-8 crores) due to the Mexico audit, providing a clearer picture of the operational impact.

Asked by Avnish Barban

Margin impact of Cosmetology in-licensing deal Direct
On the margin side, we are maintaining around 65%-70% GC, so that we are able to create some volume and on the bottom line also. See, we as a Company are not focusing on the top line to be very honest. Our main focus is always along with the top line, the bottom line has to be there. That's why we always keep our EBITDA margins at the same level. But in case tomorrow, with the launch of these products, also the EBITDA margins will be further added.

Management clarified that the new in-licensing deals in Cosmetology are expected to maintain high gross margins and potentially add to overall EBITDA margins, addressing concerns about margin dilution.

Asked by Avnish Barban

M&A plans given current cash position Direct
See, if any good branded business will come on our way, so we will think of that as an option. Plus, our major expense right now will go towards, we are making one new corporate building, where we are shifting the entire regulatory office and all the R&D there at one place. ... Then, our major expansion will go towards the intermediate side. We are desperately looking for a land or a plant, which is on sale to manufacture intermediates.

Management outlined its capital deployment priorities, including potential M&A for branded businesses, new corporate/R&D building, and expansion into intermediate manufacturing, indicating strategic growth areas.

Asked by Avnish Barban

Delay in Mainboard migration Direct
There are no reasons. We just started the process like 3, 4 months back. And SEBI, there are a lot of formalities to be done. So, we have already done the bonus part. We had to increase some authorized capital, which we have already done the first step. Second step is to file all the papers. We are doing this with SEBI. We are in regular touch with them. ... in the next 2, 3 months, you will see the migration is happening.

Addressed the delay in Mainboard migration, explaining the procedural complexities and reiterating the expectation for completion within the next 2-3 months.

Asked by D. N. Joshi

3 min read 6 chapters

Detailed narrative

FY25 Financial Performance Overview

Beta Drugs Limited reported a strong financial performance for FY25, with consolidated revenue growing 22.5% year-on-year to ₹362.35 crores, up from ₹295.71 crores in the previous year. EBITDA increased by 32.25% to ₹81.04 crores, resulting in an EBITDA margin of 22.37%. Excluding the Cosmetology division, the EBITDA margin stood higher at 24.03%. Net profit also saw a significant rise of 25.8%, reaching ₹45.83 crores compared to ₹36.43 crores in FY24.

Segmental Performance and Growth Drivers

The Branded segment achieved ₹103 crores in sales, marking a 25% growth with an EBITDA margin of 34-35%. The CDMO business grew 5% to ₹148 crores, maintaining an EBITDA margin of 15-16%. Exports were a standout performer, growing 73% to ₹80 crores, with management targeting a 3x increase in sales over the next 2-3 years. The API segment remained stable at ₹20 crores with a 19-20% EBITDA margin. The Derma (Cosmetology) division, while still incurring an EBITDA loss of ₹3 crores, showed an 80% revenue growth to ₹12.30 crores and is expected to turn profitable by September 2025.

Strategic Initiatives in Exports and Regulated Markets

Beta Drugs is actively focusing on expanding its presence in international markets, particularly LATAM and APAC regions, where competition is lower. The company received COFEPRIS and ZaZiBoNa approvals, filed 130 new dossiers, and plans to file over 200 more in the next 4-12 months. Revenue from regulated markets is anticipated to pick up in FY27, specifically by May-June 2027, due to the extensive 18-36 month registration timelines. The company is also pursuing EU GMP approval, with an audit expected in October-December 2025, aiming for European market entry within 2.5 years post-approval.

R&D and Product Pipeline Expansion

The company's R&D spend is approximately 2% of its revenue, supporting a team of 10 people in API and formulation development. Beta Drugs successfully launched 5-6 new molecules this year and plans to launch another 6 in the current financial year. Additionally, 2 more New Drug Delivery Systems (NDDS) are slated for launch this fiscal year, with two more in FY27. The long-term pipeline includes 20 new molecules over the next 3-5 years, with a focus on innovative therapies like oral oncology and NIBs.

Cosmetology Division Turnaround

The Cosmetology division, which was a concern, has shown significant improvement, with its EBITDA loss reducing from ₹4 crores to ₹3 crores in FY25. The division's revenue grew 80% to ₹12.30 crores, and its prescriber base expanded from 1,200 to 2,600. The company has secured in-licensing deals for fillers from a European company, which are expected to be commercialized in the next two months. Management anticipates the Cosmetology division to achieve profitability by September 2025, maintaining a gross margin of 65-70%.

Capital Allocation and Mainboard Migration

Of the ₹117 crores raised through preferential allotment, approximately ₹11 crores have been utilized for facility upgradations in Adley Formulations and Adley Lab, while the remaining funds are currently held in Fixed Deposits. The company issued bonus shares with a record date of March 26, 2025. The Mainboard migration process, initially targeted for July 2024, is ongoing and expected to be completed between June and August 2025, following various SEBI formalities. The company is also exploring M&A opportunities for branded businesses and plans to invest in a new corporate/R&D building and expand into intermediate manufacturing.

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