Aarti Pharmalabs Limited — Q1 FY26

Aarti Pharmalabs Ltd Q1 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=4OV7tgUfluk Published: 9 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to RT Pharma Labs Q1 FYI26 earnings conference call hosted by Noama 0:09 9 seconds Wealth Management Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity to ask questions after the presentation concludes. 0:20 20 seconds Should you need assistance during the conference call, please signal an operator by pressing the star then zero on your touchtone phone. Please note that this conference is being recorded. 0:31 31 seconds I now hand the conference over to Mr. 0:33 33 seconds Shriant Akulkar from Nama Wealth Management Limited. Thank you and over to you sir. 0:40 40 seconds Uh thank you and good day everyone. On behalf of Nama Wealth Management, we welcome you all to Q1 FI26 earning conference call of Arti Palab Limited. 0:51 51 seconds From the management side, we have with us Mr. Rashesh Kri, chairman, Mrs. Hitil Gogri Gala vice chairperson and managing 1:00 1 minute director and Mr. Push Lakhani chief financial officer. I'll now hand over the conference call to Mr. Rashesh Gogri 1:07 1 minute, 7 seconds for his opening remarks. Thank you and over to you sir. 1:11 1 minute, 11 seconds Yeah, good evening everyone and welcome to Atiharmal Labs earning call for the first quarter of the financial year 2026. I appreciate you taking the time 1:19 1 minute, 19 seconds to join us today as I walk you through the performance of Q1 FYI26 and share key business developments. 1:28 1 minute, 28 seconds Let me start with an overview of our standalone financial for Q1 FY26. 1:33 1 minute, 33 seconds The top line in Q1 FY26 was 375 cr which was uh uh rupees 394 crores a year back. The 1:43 1 minute, 43 seconds AITA was uh 95 crores as compared to 84 crores in the corresponding period of the previous year. This is an increase 1:51 1 minute, 51 seconds of 14% YI. The profit after tax in the Q1 FI26 was 51 crores as compared to 1:58 1 minute, 58 seconds rupees 47 crores a year back which was a increase of 9% yi basis. 2:05 2 minutes, 5 seconds Even though the revenue has uh been slightly dip in this quarter year year on year the AITA and the PAT have grown 2:12 2 minutes, 12 seconds reasonably well. I remain confident that the underlying fundamentals and the long-term drivers of the business are intact. Now I will talk about the 2:20 2 minutes, 20 seconds consolidated financials for Q1 FY26. The top line was 386 crores against rupes 555 crores in Q1 FY25. 2:30 2 minutes, 30 seconds The reported consolidated topline of Q1 FI26 is not actually comparable to that of Q1 FYI25 because this does not 2:38 2 minutes, 38 seconds include the proportionate share of the Ganesh Polyen uh turnover. Following the amendment in the subscriptions and shareholders 2:46 2 minutes, 46 seconds agreement GPL Ganesh Polyan is a joint venture from Q1 FI26 onwards. 2:52 2 minutes, 52 seconds Accordingly in the consolidated financials a single line of share of profit is added following the equity method of consolidation. So basically 3:01 3 minutes, 1 second the consolidated turnover for Q1 FI26 onwards will not include GPL G polyam's 3:08 3 minutes, 8 seconds contribution and hence uh will look optically lower year on year. However, the AITA and the PAT will uh PAT will 3:18 3 minutes, 18 seconds continue to include GPL's share and will be comparable year on year. The AITA was 3:25 3 minutes, 25 seconds uh uh rupees 95 cr as compared to rups 97 crores in Q1 FY25. 3:31 3 minutes, 31 seconds The profit after tax for the quarter was rupes 50 cr as compared to rups 56 crores the year back. 3:38 3 minutes, 38 seconds uh additionally for the uh revenue of AI USA incorporation the Q1 FI26 has significantly come down and resource 3:46 3 minutes, 46 seconds communicated in past uh calls. Uh this is due to limited business activities in the subsidiary which were earlier 3:54 3 minutes, 54 seconds carried out for the RT industries limited distribution business which has shifted to the art industry subsidiary in the US. 4:02 4 minutes, 2 seconds Now let me present the business highlights. Atifa Labs continues to operate in three key verticals. Zenthin derivatives API and intermediate and 4:10 4 minutes, 10 seconds CDMO CMO services. The Zenin derivative uh segment contributed to 50% of our 4:17 4 minutes, 17 seconds turnover in Q1. The volume split was 65% uh beverages customers and 35% for 4:24 4 minutes, 24 seconds others. In terms of geographical split, the export sales was 57% and rest of 43% was local sales. The API in intermediate 4:33 4 minutes, 33 seconds business to 41% of the turnover and the subsegment wise the breakup is 49% regulated market 43% in RO market 8 4:42 4 minutes, 42 seconds percentage in non-regulated market which aligns with our long-term focus towards regulated market. We are continuously 4:49 4 minutes, 49 seconds working towards development of new molecules with patent expiry in next 3 to 5 years and the number of USDMs have 4:57 4 minutes, 57 seconds gone up from 53 uh grown gone up to 53 from 50 in last quarter and the CPS have gone up to 35 from 31 in last quarter. 5:07 5 minutes, 7 seconds Also the number of commercial APIs now stand at 60. The third segment CDMO CMO has contributed to 10% of the revenue in 5:15 5 minutes, 15 seconds this quarter. We are presently working with 21 customers and the number of active projects are now 60 of which 33 5:22 5 minutes, 22 seconds are in commercial stages and 27 are in different stages of development both at the customer end. Based on the current 5:30 5 minutes, 30 seconds order book, we are on track to achieve our target of FI26 CDMO sales. It is important to mention that one of our 5:39 5 minutes, 39 seconds sites which supports zenthin derivative business was under extended plant annual shutdown and upgradation in this quarter. This is partially the reason for decline in our standalone top line. 5:50 5 minutes, 50 seconds For the last couple of months, there have been lot of geopolitical turmoil and globally there is has been a business uncertainty due to US tariffs. 6:00 6 minutes However, the current tariff rule do not impact our pharma products and even zanthin derivatives like caffeine are under the exempt list and I see minimum 6:09 6 minutes, 9 seconds impact on our sales. Lastly, I will share the progress updates on the ongoing capex. 6:17 6 minutes, 17 seconds Our brownfield expansion for increasing lenthin derivative from 5,000 metric ton perm to 9,000 metric perm is progressing 6:25 6 minutes, 25 seconds as per our plan. The commissioning will be done in a phase manner across H2 FY26. 6:32 6 minutes, 32 seconds The green field project at Itali Gujarat is in final stages of completion. and the mechanical completion of the phase 6:40 6 minutes, 40 seconds one has been done. The commercial production will commence towards the end of Q2 FI26. 6:47 6 minutes, 47 seconds However, it will take us until the end of FI26 to ramp up and operate the plant at an optimal utilization. In 6:54 6 minutes, 54 seconds conclusion, I remain confident in our strong fundamental strategic initiative and dedicated team driving forward. Our 7:03 7 minutes, 3 seconds strategy remains firmly intact and we are focused on navigating any near-term challenges with agility and discipline. 7:11 7 minutes, 11 seconds We are well positioned to achieve our targets for the year and continue delivering the sustain sustainable 7:19 7 minutes, 19 seconds growth and our values to all our stakeholders. The moderator may now open the forum for Q&A session. Thank you. 7:27 7 minutes, 27 seconds Thank you very much sir. We will now begin the question and answer session. 7:31 7 minutes, 31 seconds Anyone who wishes to ask a question may press star and one on their touchstone telephone. 7:38 7 minutes, 38 seconds If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. 7:49 7 minutes, 49 seconds Ladies and gentlemen, we will wait for a moment while the question queue assembles. 8:04 8 minutes, 4 seconds The first question comes from Rahul Jan with Gradians wealth. Please go ahead. 8:12 8 minutes, 12 seconds Thanks for the opportunity. Am I audible? Yeah. Yeah. 8:16 8 minutes, 16 seconds Yeah. So uh so just given the topline deg growth sir and uh also the scenario we have delivered some good set of 8:24 8 minutes, 24 seconds numbers. So just to understand sir you mentioned about two things on the impact of sales and also one is the Ganesh 8:31 8 minutes, 31 seconds polyam numbers which are not including the sales. So uh what amount of uh because in standalone sales uh I think 8:40 8 minutes, 40 seconds the plan shutdown has impacted the sales. So what is the impact in terms of sales with regards to this plan shutdown? 8:48 8 minutes, 48 seconds The plan shutdown sales impact would be around 15 to 20 cr rupes. 8:53 8 minutes, 53 seconds Okay. Okay. And sir, when I look at this intermediate sales that has come down on a yearon-year 9:00 9 minutes basis from about 170 to 150 currently and in fact in the previous quarters we 9:07 9 minutes, 7 seconds were averaging around uh uh 200 crores uh for last two quarters prior to this 9:14 9 minutes, 14 seconds June quarter or in fact even the earlier quarter we were around 190 crores. So this quarter is down to around 155 9:21 9 minutes, 21 seconds crores. So do we read anything into this? 9:25 9 minutes, 25 seconds No. If you see uh in this quarter we have had uh higher inventory because you know the shipments uh were little 9:32 9 minutes, 32 seconds impacted towards the end of the quarter due to unavailability of uh shipping space and I think uh that would have 9:40 9 minutes, 40 seconds some impact of uh some amount of sales but uh overall API business we have been 9:47 9 minutes, 47 seconds able to uh have good uh uh you know uh pace whereas in intermediate business uh 9:54 9 minutes, 54 seconds it shares the asset said with the CDMO CMO. So there we are progressing more with the CDMO projects in the current uh 10:02 10 minutes, 2 seconds quarter. So the intermediate sales is little bit uh on the lower side purposefully. 10:09 10 minutes, 9 seconds Sure. With regards to margins margins are gross margins are at the highest level for this quarter is around 57%. 10:19 10 minutes, 19 seconds which were around 51% the previous quarter and even the year on year on year based it is up from 48%. So typically now how do we look at the 10:28 10 minutes, 28 seconds gross margins going ahead and if you could understand that there is some impact on Galesh political side what would be the and this I'm talking about 10:36 10 minutes, 36 seconds standalone sir I'm not talking on the console base yeah I think uh in terms of margin of 10:43 10 minutes, 43 seconds course you know this year was a higher margin uh because you know this inventory had an impact uh and overall 10:52 10 minutes, 52 seconds the products that uh we have sold were more into regulated market and uh beverages and export market. So that has 11:01 11 minutes, 1 second yielded us uh better pricing than the lower price market. So uh on the randin segment. So overall I 11:08 11 minutes, 8 seconds think it is the product mix that we have played and which has yielded in better margins. Yeah. 11:14 11 minutes, 14 seconds And uh last question. Hi, there is one addition to this also. Uh you know earlier there has been some disclosure 11:22 11 minutes, 22 seconds change in the financial that we have uh published. Uh earlier some of the consumables that we were uh we normally 11:30 11 minutes, 30 seconds consume in the plant were getting clubbed in the cost of materials. So now because these are consumables like uh filter cloths and walls and you know those engineering items as we say. 11:42 11 minutes, 42 seconds So these uh from this quarter onwards and including the previous earlier quarter also we have now uh shown it as under uh other expenses. 11:51 11 minutes, 51 seconds Okay. 11:52 11 minutes, 52 seconds So there has been so now the cost of material consumed uh consists of only a raw material packing material and fuel. 11:59 11 minutes, 59 seconds So these consumables engineering consumables that we are saying are now clubbed under other expenses. 12:06 12 minutes, 6 seconds Okay. Last question. So with regards to the guidance we have maintained guidance both on CDMO growth and also on the AIDA 12:13 12 minutes, 13 seconds growth given the current quarter has been almost flattish on Eida on console basis. Uh and if we need to maintain 12:21 12 minutes, 21 seconds this 12 to 15% guidance then the next three quarters the kind of growth in Ebida will be around 15 to 20%. If we 12:30 12 minutes, 30 seconds want to meet our guidance of 12 to 15 so and given the expenses of new plant coming in Atali and also Zenthine and 12:38 12 minutes, 38 seconds probably they're not contributing much to the revenue uh what gives us this confidence that we will achieve this AIA growth. 12:46 12 minutes, 46 seconds Yeah see basically the AIA guidance that we had given was on the standalone basis. this time anyway we have a standalone basis AITA increase of almost 12:54 12 minutes, 54 seconds 14% YI and uh looking at overall uh you know the quarters are going to be uh you know 13:02 13 minutes, 2 seconds not linear in the performance of AITA or topline because uh of the nature of business the CDMO CMO uh turnover may 13:11 13 minutes, 11 seconds get uh top line and bottom line may get consolidated in particular quarter which may result into a bump. So I think 13:18 13 minutes, 18 seconds overall we have to look at uh you know few quarters and then see how overall growth trajectory is to really consider 13:26 13 minutes, 26 seconds because there will be certain quarters where uh due to multiple stages of processing that we are doing you know we may end up doing more earlier stages 13:35 13 minutes, 35 seconds processing and the invoicing may happen in the later uh quarters. So which may impact the top line and the bottom line both. 13:44 13 minutes, 44 seconds Thank you sir. Uh wish you all the best. Thanks a lot. 13:49 13 minutes, 49 seconds The next question comes from Ajas Lakhani from Unifi AMC. Please go ahead. 13:56 13 minutes, 56 seconds Yeah. Uh sir, uh just a clarification on the RAM theme. Uh sir, you mentioned that 15 to 20 crores was on the account 14:04 14 minutes, 4 seconds of plant shutdown. So just wanted to understand that X of that uh has there been any impact of pricing, volume, seasonality if you can expand? 14:15 14 minutes, 15 seconds No, there have been no impact on uh any of these things. Basically, uh as we have disclosed the product uh sales mix 14:23 14 minutes, 23 seconds that we have done, we have done more sales to export as well as the beverages market in the current quarter and uh 14:32 14 minutes, 32 seconds that has resulted in uh better performance in this current quarter. 14:38 14 minutes, 38 seconds Understood. answers uh just uh could you also uh call out in the uh API business uh you know uh you know we understand 14:47 14 minutes, 47 seconds the quarterly volatility and you mentioned that uh there was a shipping space impact and you know you had higher inventory uh how do you expect the fullear ramp up to be for this segment? 15:00 15 minutes Yeah, in the API business also we are looking at uh reasonable growth I think uh going forward. So it will be 15:09 15 minutes, 9 seconds aa growth will be at least uh um more than 10%. 15:19 15 minutes, 19 seconds Okay. Okay. And uh you know uh sir uh uh I mean uh we understand that there's a shift on the gross margin front but like 15:26 15 minutes, 26 seconds to like if if one were to compare it to the previous quarter in the old format uh where were gross margins today 15:35 15 minutes, 35 seconds for the standalone. So uh the impact of uh this change in the cost of material consumed has been given for the pre 15:43 15 minutes, 43 seconds earlier quarters also. So now it is like to like if you compare what we have published on the presentation that was there. 15:50 15 minutes, 50 seconds Yeah. 15:52 15 minutes, 52 seconds Okay. And uh sir in Ganesh when do we expect to break even? When will it start contributing to the bottom line and what 16:00 16 minutes are the key challenges today we are facing? 16:03 16 minutes, 3 seconds No, in Ganesh Polym last year we we had a good AITA uh of around uh uh 60 crores 16:13 16 minutes, 13 seconds and and uh this year uh you know we took a shutdown 16:19 16 minutes, 19 seconds uh plant shutdown to modify and uh do some modification at our plant. So post 16:26 16 minutes, 26 seconds that I think we have restarted our plant in July and I think the current quarter we will uh reach to normaly 16:35 16 minutes, 35 seconds of volume and uh demand okay and uh finally sir uh CDMMO has 16:44 16 minutes, 44 seconds started off to a good start and we thought that this is more of a you know second half story. So could you comment a little bit on what's driving CDMO? 16:53 16 minutes, 53 seconds Now as uh mentioned in my opening uh remarks uh you know we have already uh I have already told that you know we have 17:02 17 minutes, 2 seconds uh order book of uh you know the guidance that we have issued 35 to 40% growth. So we are quite confident about 17:11 17 minutes, 11 seconds uh uh you know achieving the same. Understood. Thanks all. 17:22 17 minutes, 22 seconds The next question comes from Ankit Gupta with Bamboo Capital. Please go ahead. 17:28 17 minutes, 28 seconds Yeah, thanks for the opportunity sir. Uh you know uh you highlighted about the reason for uh you know decline in revenue on the zen part but on the API 17:38 17 minutes, 38 seconds fund sir you know last year we had seen a very good growth because of the expansions we had done prior to last year. So we had seen almost a growth of 17:46 17 minutes, 46 seconds around 42% and I think there was some uh like this we we had still we still had some room on the capacity available for 17:54 17 minutes, 54 seconds growth in the API segment. So you know given how the first quarter has panned out uh you know do you do you think we 18:02 18 minutes, 2 seconds can still grow at least 10 15% on the base of almost 770 cr of API in FI25 for this year financial year 26. 18:13 18 minutes, 13 seconds Yeah. Yeah. See uh what has happened is that last uh year last quarter we push lot of sales. So we we we could achieve 18:20 18 minutes, 20 seconds very higher sales on the in the last year last quarter. Whereas in this quarter we were constrained by shipping space availability and also you know 18:29 18 minutes, 29 seconds that resulted in the inventory stock increase in particularly uh API and of course you know based on 18:39 18 minutes, 39 seconds every year first quarter normally the API sales are uh higher because as the start of the year you know customers may 18:47 18 minutes, 47 seconds like to cover some volume. So I think there's some seasonality also to it. 18:51 18 minutes, 51 seconds Yeah. Okay. So at least compare like effort when yeah as I have mentioned we will be able to grow this business. 18:59 18 minutes, 59 seconds Sure. Sure. Okay. Okay. And on the uh zen part you know we have the new capacities coming in uh you know 19:07 19 minutes, 7 seconds additional capacity of 4,000 ton coming in uh let's say in the second half. So for this segment we have had a very good 19:15 19 minutes, 15 seconds volume growth for the past uh 2 three years but you know the because of the fall in realizations the overall revenue 19:23 19 minutes, 23 seconds has uh actually you know remain in the range of around 780 800 crores. So how do you see this uh you know zen segment 19:32 19 minutes, 32 seconds panning out for us over the next uh two years 26 and 27 27 we'll have the full year benefit of the expansion coming in. 19:40 19 minutes, 40 seconds So do you think you know the additional capacity we can utilize at least 70 80% next year and for this year how do you see growth for this segment? 19:49 19 minutes, 49 seconds Yeah. Yeah. Overall I think 2 years down the line we are looking at 1,000 cr plus stop line for this segment and I think we are quite confident with the 19:57 19 minutes, 57 seconds increased capacity we will be able to achieve the uh 2 3 years in 3 years time 20:05 20 minutes, 5 seconds good optimized uh capacity utilization 20:12 20 minutes, 12 seconds so so at least fi 27 yeah ma'am you were saying something no no that's it yeah so at least fi 27 we should be able to 20:20 20 minutes, 20 seconds reach thousand cr of revenue from zen thing. 20:22 20 minutes, 22 seconds No in 27 or 28 in in one of the years of course it depends on the raw materal prices final price and all that. So we 20:30 20 minutes, 30 seconds have given 3 years uh uh you know uh we will have the capacity utilization of 80 to 90%. With 50% of sales going to 20:40 20 minutes, 40 seconds beverages and regulated customers. So that's what is the target. So ultimately out of 9,000 we may optimally utilize 7 20:49 20 minutes, 49 seconds and a half to 8,000 out of which 50% will go to the beverages and export customers. 20:54 20 minutes, 54 seconds Okay. And that will be a better margin plus more you know uh regular sales kind of business for us. Yeah. Yeah. The products are different. 21:02 21 minutes, 2 seconds So the product for beverages is a different product and the product for uh uh API farmer requirement is different. 21:13 21 minutes, 13 seconds Is there any any comments on the pricing? How the Zenthin prices are currently? Have we seen the prices 21:20 21 minutes, 20 seconds bottoming out and has there been any increase in the pricing for the for the Zen products? 21:27 21 minutes, 27 seconds No, I think prices are stable uh on spot market also. Yeah, we are seeing stable 21:34 21 minutes, 34 seconds pricing. we have not seen any further drop of uh rising and it overall I think 21:42 21 minutes, 42 seconds raw metal costs have also come down. So overall uh uh that is what has uh 21:49 21 minutes, 49 seconds resulted in the pricing pressure in past but now I think everything is stable. 21:55 21 minutes, 55 seconds Sure. Sure. And last question was on the CDMO segment. You know we are expecting to you know get around 35 40% kind of 22:03 22 minutes, 3 seconds growth for this year. Uh given how the pipeline is shaping up. So can you talk about how do you see given how the 22:10 22 minutes, 10 seconds pipeline is currently and you know we have seen significant increase in our uh molecules both on uh under development as well as commercial stage as well as 22:19 22 minutes, 19 seconds we have added new new customers also over the past two years. There's been a significant jump in that. So 27 28 uh do 22:26 22 minutes, 26 seconds we do we see you know this segment continuing to grow at at least you know 30 40 or even higher growth rates with new capacities at Ali coming in in you 22:35 22 minutes, 35 seconds know later half of this year as I have mentioned in past in three four years we want all segments to grow up to 100 million or thousand cr you 22:44 22 minutes, 44 seconds know whichever reaches faster you know so that's what the target is so it depends on a year and how the 22:51 22 minutes, 51 seconds approvals come and uh you know how our customers are doing. We have seeded the project. So we 22:59 22 minutes, 59 seconds have 60 projects which are ongoing and how the approvals are coming and how commercially the products are fairing in the marketplace 23:08 23 minutes, 8 seconds and how fast we are able to get approvals as additional source in the current commercial product for the regular requirement. So all these 23:15 23 minutes, 15 seconds factors are in hand of our customers. We are doing hard work in terms of supplies and uh development work but ultimately 23:24 23 minutes, 24 seconds uh you know we will get there because uh all these products are currently in the uh patent phase. So you know customer 23:32 23 minutes, 32 seconds has fair bit of idea of how the growth is and how it is going. 23:37 23 minutes, 37 seconds So let's say in FI 29 we can expect at least 800,000 cr of revenues from CDMO segment. That's the target you know. 23:46 23 minutes, 46 seconds Sure. Okay. Thank you. Thank you. Thank you. 23:54 23 minutes, 54 seconds The next question is from the line of Danil Desai from Turtle Capital. Please go ahead. 24:01 24 minutes, 1 second Uh hi. Uh good afternoon everyone. Uh so my first question is uh you know you have mentioned that uh by by Q2 Lali 24:09 24 minutes, 9 seconds project mechanical completion will be over and by Q4 the commercial revenue will start. So uh will two quarter time 24:18 24 minutes, 18 seconds be sufficient to do validation and everything and uh you know even if I assume effects of 1.3 1.4 times uh 24:27 24 minutes, 27 seconds essentially we are looking at 500 or cr kind of a revenue uh from the phase one. 24:33 24 minutes, 33 seconds So uh from start to reaching that kind of a number what is the timeline that we are amplifying? 24:42 24 minutes, 42 seconds Yeah, basically uh you know whatever we are going to do there is going to be earlier stages uh production as well as 24:49 24 minutes, 49 seconds the products which will shift from our current uh manufacturing side to this side. So with uh uh where we are having 24:57 24 minutes, 57 seconds additional orders. So all these uh together uh will be able to fill up the 25:03 25 minutes, 3 seconds plant slowly and uh overall I think uh we expect plant to get utilized. So we 25:11 25 minutes, 11 seconds have earlier mentioned that every second year uh after two years you know we'll put up additional blocks. So with this optimally getting occupied we will put 25:20 25 minutes, 20 seconds up newer facility and of course the top line uh in aa you know topline we we are 25:28 25 minutes, 28 seconds basically not tracking topline to that extent we will ensure aa growth basically due to this addition of this manufacturing facility. 25:38 25 minutes, 38 seconds Okay. So, so when we say that we will move some of the uh existing uh products or production uh from existing site to 25:47 25 minutes, 47 seconds new site uh so does it mean that the revenue generated from new site will not be incremental uh in nature? Uh that is 25:56 25 minutes, 56 seconds how we should look at it. Now overall uh you know we have uh multiple sites which 26:03 26 minutes, 3 seconds ultimately feed into the CDMO business as well as the intermediate business and I think you will see a increase in both 26:11 26 minutes, 11 seconds top line. So anyway as we have projected uh growth in CDMO CMO this year and next year also going forward we expect growth 26:19 26 minutes, 19 seconds to happen. So that will be driven by the additional capacities that we have put up in Atali that will help us achieve those uh growth targets. 26:29 26 minutes, 29 seconds Okay. Okay. And uh so uh the uh you know our aspiration to reach uh you know let's say thousand cr number in a given 26:37 26 minutes, 37 seconds timeline. So to reach that number uh you know do we see the visibility based on current commercial and in pipeline 26:47 26 minutes, 47 seconds products to reach that number or you think that we need to get many more projects to actually get to that number. 26:55 26 minutes, 55 seconds I it depends on how our customers are doing uh and when they are getting the approvals. I think anything can happen. 27:03 27 minutes, 3 seconds So so we are doing currently hard work of getting more customers more more projects and every year we will add 27:10 27 minutes, 10 seconds those and I think combination of both will work towards achieving uh growth in future. 27:20 27 minutes, 20 seconds Okay. Okay. And uh lastly if you can talk more in terms of you know what are the wide spaces in terms of our 27:27 27 minutes, 27 seconds capability on the 3DMO side which either we on our own or from from the slight uh 27:34 27 minutes, 34 seconds feedback from the customers that we are trying to develop or work upon uh which can you know help us in the longer term. 27:42 27 minutes, 42 seconds If you elaborate on two three such areas where we are spending uh money and effort uh you know on the PDM side 27:51 27 minutes, 51 seconds as mentioned in the uh presentation you know we have uh given the broad uh capabilities that we have. So we have 27:59 27 minutes, 59 seconds now signation also as a part of our CDMO program we are also doing uh continuous 28:06 28 minutes, 6 seconds manufacturing which we have added which we can offer for CDMO also. So all these are newer offerings uh that we have 28:13 28 minutes, 13 seconds added. We can also do cryogenic reactions and uh hydrogenation. We can do high uh 28:22 28 minutes, 22 seconds high pep. So basically uh anti-cancer kind of uh finished uh products also. So all these capabilities 28:30 28 minutes, 30 seconds uh have enhanced our profile and offering for the innovators. 28:38 28 minutes, 38 seconds Okay. anything new that you think is going to be more relevant that you more futuristic but you are spending time and 28:45 28 minutes, 45 seconds effort on uh I think as in past I think world is moving towards uh peptide biologics and 28:54 28 minutes, 54 seconds I think we will like to attempt that in future going forward 29:00 29 minutes okay thank you that's it from my side thank you before we take the next question we would like to remind partic 29:08 29 minutes, 8 seconds participants that you may press star and one to ask a question. 29:14 29 minutes, 14 seconds The next question is from the line of Mada from Fidelity. Please go ahead. Uh hi, good evening. Thank you so much for your time. Uh so first question on the 29:22 29 minutes, 22 seconds Zantine business. Uh just wanted to clarify you said that you know our capacity will be going from 5,000 tons to 9,000 tons. So we're adding roughly 29:31 29 minutes, 31 seconds 80% uh capacity and uh even on the 5,000 ton um run which we're at you know we are tracking about 700 720 cr topline. 29:41 29 minutes, 41 seconds Uh so if the capacity here is going up by let's say 80%. 29:45 29 minutes, 45 seconds uh why will the peak revenues be only thousand crores like it can be higher right like especially since we're targeting some uh better priced 29:54 29 minutes, 54 seconds contracts as well in like regulated markets or you know uh maybe if it's farmer or beverages like you mentioned uh so just wanted to understand like if 30:03 30 minutes, 3 seconds on a fully utilized 9,000 uh block uh what could be the peak revenue potential like ballpark on current pricing maybe 30:11 30 minutes, 11 seconds yeah yeah yeah mad so we have guided currently Our revenue from export and beverages is 65 and 57% and in uh going 30:20 30 minutes, 20 seconds forward we have guided that uh revenue from these beverages can go up to 50 plus. So of course currently you know we 30:28 30 minutes, 28 seconds are on a higher side of that but that will normalize with the additional capacity still it will grow from current base. So that has one impact and 30:36 30 minutes, 36 seconds depending on how fast we are able to secure more pharma customers it depends on that and uh that will define the top 30:45 30 minutes, 45 seconds line because the spot price and the pharma prices of course there is a differential also. So if we are able to capture reasonable market of say 10 to 30:53 30 minutes, 53 seconds 15% of our total demand in the pharma then you know of course we can expect higher top line but if we have to 31:00 31 minutes offload the product in spot then you know it can be little bit on the lower side. So it all depends on how the 31:08 31 minutes, 8 seconds approvals are coming through. Luckily uh you know zanthin and caffeine is in the 31:14 31 minutes, 14 seconds nure two of the list. So uh we are not impacted by the tariff. So which is a good thing that we have. 31:23 31 minutes, 23 seconds Okay. So so could you just clarify what is the pecking order of prices like is it uh beverages is the best price then pharma and then spot like that or is it farmer beverages and then spot? 31:34 31 minutes, 34 seconds I think pharma has best price and then I think beverages and then spot is the always sport used to be higher but now sport is lower. So spot is spot. 31:46 31 minutes, 46 seconds Yeah. Right. Right. Okay. 31:49 31 minutes, 49 seconds But you know it's a market uh where of course the approvals also matter and the distribution network that we have now 31:58 31 minutes, 58 seconds established over a period of time that also helps us push the product and there are certain geographies where we can enjoy some better pricing also. 32:07 32 minutes, 7 seconds Okay. So, so just to clarify, you're saying that in the current uh mix that we plan to sell into uh farmer beverages 32:14 32 minutes, 14 seconds spot the total 9,000 t capacity we expect, thousand crores of topline. Uh that's the way to think or it could be a 32:21 32 minutes, 21 seconds bit higher or lower like is my understanding thousand plus,000 plus. So it can be anything. Yeah. 32:29 32 minutes, 29 seconds Okay. Okay. Got it. Okay. Then the uh uh second question just wanted to check was on the CDMO business. Um did I hear 32:36 32 minutes, 36 seconds right you were saying that by fi 28 or 29 this current 200 crores um there is uh you know potential to be 800 2,000 32:45 32 minutes, 45 seconds crores is that right? Uh did I get that understanding right? Yeah. 3 four years. 32:50 32 minutes, 50 seconds Okay. And uh okay. Okay. And so like uh in this um uh is it from the uh existing 32:57 32 minutes, 57 seconds commercial the 33 molecules we expect like very good scale up or is it the pipeline which makes us more sort of uh 33:04 33 minutes, 4 seconds you know bullish on the segment like if you could whatever color you can share on the growth drivers uh that will be helpful. Thank you. 33:11 33 minutes, 11 seconds I think it's going to be effect of both and I think uh we have more promising uh under development uh pipeline also. 33:21 33 minutes, 21 seconds Okay. Okay. So yeah and that's why you know it depends on how the growth happens in the approvals once the customers get the approval. 33:31 33 minutes, 31 seconds So and there are variety of factors you know depending on the competing therapy and how they are effectively able to uh capture the market share. 33:43 33 minutes, 43 seconds Understood. And so this uh the of the 27 projects in development how many would be in phase three or you know late stages of development? Could you give some sense there? 33:52 33 minutes, 52 seconds So we do more phase 2 phase three work. 33:54 33 minutes, 54 seconds So I think phase one will be very limited. So uh yeah more phase 2 phase three only. So otherwise you would have 34:02 34 minutes, 2 seconds seen much higher number of projects that we would have done. But you know we we are marketing ourselves as a 34:09 34 minutes, 9 seconds manufacturing specialist which does uh good manufacturing optimization and cost optimization root of synthesis selection 34:16 34 minutes, 16 seconds and having large capacity to match uh the requirement of uh uh you know the 34:24 34 minutes, 24 seconds match the requirement of customers needs in case the product hits uh uh jackpot you know. So all those things uh are giving us a good uh uh customer base. 34:37 34 minutes, 37 seconds So just last question like uh you know in case if you're able to uh you know get to this mix of let's say 1,000 cr plus topline and zantine uh you know 34:46 34 minutes, 46 seconds CDMO reaching let's say 800 to,000 crores and API growing at a reasonable pace. Uh like how does the margin profile of the company move like from 34:54 34 minutes, 54 seconds current 25%. Uh my sense would be that the margins should improve. Is that the right way to think or uh you think margins could be stable if this business mix plays out the way we are thinking? 35:06 35 minutes, 6 seconds Yeah, percentage margin I think should grow reasonably. I think top line is all dependent on the foreign exchange 35:15 35 minutes, 15 seconds and uh raw metal prices and all that. So top line and uh see ultimately we try to 35:21 35 minutes, 21 seconds tag per kg margin we try to maintain in most of the product and that's how it 35:28 35 minutes, 28 seconds works. So lot of factors are there. So I think but uh margin should be uh from the current 35:36 35 minutes, 36 seconds level it can go plus or minus 2 3% I think. 35:40 35 minutes, 40 seconds Okay but CDMO is probably the highest margin segment then Zanthin is that okay yes yes okay 35:49 35 minutes, 49 seconds okay thank you the next question comes from Vive Gotham with GS investment please go ahead. 35:59 35 minutes, 59 seconds Yeah, sorry sir. I joined the function rate. So if you can just uh if it is repetitive then please excuse me. Uh how 36:08 36 minutes, 8 seconds much is the exposure we have to the US and what would be the tariff impact for our company and pharma sector in particular? 36:19 36 minutes, 19 seconds Yeah, currently our US uh sales uh would be around uh 8 10% but I think we don't 36:26 36 minutes, 26 seconds have any uh tariff impact currently only 8 to 10%. And how come no tariff 36:33 36 minutes, 33 seconds impact s basically the pharma is exempted by the US government? Yeah. Yeah. Pharma and NX. 36:41 36 minutes, 41 seconds So any risk of it being a temporary sort of a thing and and CDMO is also sort of uh covered under that only sir 36:51 36 minutes, 51 seconds I think CDMMO work more uh of course we have US-based customers also but largely 36:57 36 minutes, 57 seconds US Europe it's multi-graphical so there also I think our US concentration 37:04 37 minutes, 4 seconds is not very high okay sir and uh what about our capex 37:10 37 minutes, 10 seconds plans sir So H2 will be much better with respect to high margin CDM of business. 37:18 37 minutes, 18 seconds Yes. 37:19 37 minutes, 19 seconds Yeah. Yeah. Yes. So I think the capex plan as we have mentioned that uh in the second half of this year you know we will have the Atali new site 37:27 37 minutes, 27 seconds operationalized and also in the second half of this year you know we will have the caffeine capacity addition also will happen. So I think next year of course 37:36 37 minutes, 36 seconds you know we'll have much higher capacities to produce more products. Of course this year also in the second half also we may have partial impact of this. 37:44 37 minutes, 44 seconds Okay sir and few words about your Zenium and uh uh API business please sir. 37:50 37 minutes, 50 seconds Basically uh Zensium we are facing uh competition from China and much more and API comparatively less or because China is strong in both the segments. 38:02 38 minutes, 2 seconds No the APIs that we are doing are more complex APIs and they are only targeted towards the regulated market. So with 38:11 38 minutes, 11 seconds that I think the China overall uh presence in those products is little limited whereas in Zenthin of course uh 38:20 38 minutes, 20 seconds uh China has uh large capacities and you know they compete but our value proposition to our customer is that we 38:26 38 minutes, 26 seconds are the only backward integrated independent of China source from India who can offer them 38:34 38 minutes, 34 seconds uh Zanthin products uh at a reasonable price. So with that uh we are able to get uh market share in Zen. 38:43 38 minutes, 43 seconds Any yeah any plans for us to reduce the exposure to US market due to the risk 38:51 38 minutes, 51 seconds overhanging risk for by Trump trend. So we are are we looking at other geographies to diversify our risk? So we 38:59 38 minutes, 59 seconds don't have any major exposure in US 8 to 10% is very reasonable and that to you 39:06 39 minutes, 6 seconds know pharma being exempt uh on the list I don't think we are largely present in 39:13 39 minutes, 13 seconds Europe and all the other uh geographical locations. So okay thank you madam. 39:22 39 minutes, 22 seconds Thank you. 39:24 39 minutes, 24 seconds Thank you. The next question comes from Shuba Magarval with Burman Capital. Please go ahead. Yeah. 39:31 39 minutes, 31 seconds Hi sir. Um thanks for the opportunity. 39:34 39 minutes, 34 seconds So can you give us some quantitative uh context over the segment level margin across the three segment and sir where 39:41 39 minutes, 41 seconds do you see the uh company level margin shaping up in the medium and long-term as the CDM or revenues expand? Um yeah thank you. 39:50 39 minutes, 50 seconds I think we are not giving the segmental uh margins but as I mentioned in past the margin profile in CDMO CMO is the 39:59 39 minutes, 59 seconds highest uh followed by Zenthin and then API uh they are closely 40:05 40 minutes, 5 seconds neck and neck whereas uh uh overall uh I think we have guided for the AITA 40:13 40 minutes, 13 seconds growth and I think we are maintaining the current guidance. Okay. Thank you. 40:23 40 minutes, 23 seconds The next question comes from Ankit Gupta from Bamboo Capital. Please go ahead. 40:29 40 minutes, 29 seconds Yeah. Uh thanks for the opportunity. So uh in the past you know we have spoken about some of our molecules uh reaching 40:37 40 minutes, 37 seconds to a scale of you know 20 to30 million for us in the CDMO segment. So you know given we have 33 commercial molecules uh as of uh as of June as of first quarter. 40:49 40 minutes, 49 seconds So you think you know some of these molecules over the next 2 three years themselves have a potential of reaching this scale of you know let's say 20 to 40:57 40 minutes, 57 seconds $30 million or some of the underdevelopment projects or molecule projects have those potential. So if you 41:05 41 minutes, 5 seconds can talk about that it will be a mix of uh both. So and I think we shouldn't pin only to because 41:13 41 minutes, 13 seconds it's ultimately the final molecule that uh requires multiple products. So we may supply all the chemistry also to the 41:20 41 minutes, 20 seconds innovator. So combineing all the chemistry a single product final you know we may be able to reach in some 41:28 41 minutes, 28 seconds product that kind of number and it will mix of both. Some of the commercial molecules also that we have currently have those potential over the next two three years. 41:40 41 minutes, 40 seconds Yes. 41:41 41 minutes, 41 seconds Okay. Is that you know in in this uh 33 commercialized molecules you know u will 41:49 41 minutes, 49 seconds there be some some molecules where where we'll be the largest uh supplier and will our market shares in those molecules will be let's say 40 50% and 41:58 41 minutes, 58 seconds uh there will be some other uh uh CDMO companies who will be the second supplier. we are mostly the second or 42:06 42 minutes, 6 seconds the third source suppliers on the CDMO sector. 42:10 42 minutes, 10 seconds Yeah, I think uh um more later is true because I think a lot of products have shifted from China to us and that's 42:17 42 minutes, 17 seconds where still the validations are happening and once we become full-fledged supplier each innovator has also multiple partners to manufacture 42:25 42 minutes, 25 seconds these products and they have multiple partners from China. So the market share uh starts from 20 25% and then it can go up to 50% also you know. 42:36 42 minutes, 36 seconds Sure. Sure. So like a lot of these molecules are still under validation and the scale up will happen for every year. 42:44 42 minutes, 44 seconds So campaign may not come it depends on the size of product. So suppose certain products may be a uh regular product, certain products may be a campaign 42:52 42 minutes, 52 seconds product for the uh API manufacturer uh of innovators. 42:59 42 minutes, 59 seconds Sure. Sure. And you know we this segment has largely been you know second half heavy you know every year we have seen 43:07 43 minutes, 7 seconds significant scale up in our CDMO revenues. So is that expected to continue? Is that 43:14 43 minutes, 14 seconds lumpiness expected to continue or with you know more molecules? 43:18 43 minutes, 18 seconds Yeah. Yeah, it will continue the the it will have I think more sales will come in later quarters. 43:26 43 minutes, 26 seconds Okay. Okay. It will continue afterali starts operations and contribute significantly let's say from 27 28 onwards as well. 43:35 43 minutes, 35 seconds I think Atitali uh overall we can guide for the business you know Atitali is a capacity. So basically we are increasing from 1100 K to 1500 K. 43:46 43 minutes, 46 seconds So which where we are going to manufacture what will be dependent on overall uh supply chain planning that is being done and how the approvals are uh achieved. 43:57 43 minutes, 57 seconds So if any product has five seven stages we may shift three four stages atali and do final stages where if customer is not 44:04 44 minutes, 4 seconds giving us the approval to shift whereas the new projects will directly go to but of course you know we will have multi-sight flexibility. So that is a 44:12 44 minutes, 12 seconds good thing which so it will also have risk mitigation overall. Yeah. Okay. Okay. Okay. Thank you. Thank you. 44:21 44 minutes, 21 seconds Yeah. 44:24 44 minutes, 24 seconds The next question comes from Dr. Nha Karoda with Abakis. Please go ahead. 44:30 44 minutes, 30 seconds Yeah. Hi. Uh good evening everyone. Uh thanks for the opportunity and uh my question was u uh on the API and 44:37 44 minutes, 37 seconds intermediate piece. Uh so just wanted to understand sir you mentioned in the initial remarks that in this business uh segment uh it was more of a conscious 44:46 44 minutes, 46 seconds decision uh about the intermediate business that we had more focus on the CDMO side. So probably the decline uh 44:53 44 minutes, 53 seconds which is seen is because of the intermediate business coming down. Uh but just wanted to understand why was that as in we facing any capacity constraints. 45:03 45 minutes, 3 seconds Uh yeah. So we we are that is the reason why you know we are going to start the 45:11 45 minutes, 11 seconds Atali site so that uh you know we can have uh our uh intermediates also validated and the intermediates which 45:20 45 minutes, 20 seconds require for captive consumption can be validated faster so that we can free up our older capacity to uh start uh you know catering to the customer. 45:34 45 minutes, 34 seconds along with the CDMO earlier stages which Russ has mentioned earlier. 45:41 45 minutes, 41 seconds Okay. So on on that just to uh understand it more qualitatively. So if we talk about the uh capacity uh being 45:49 45 minutes, 49 seconds free on that so in in our uh Q4 combined revenue of uh uh let's say API intermediate and CDMO business was about 45:58 45 minutes, 58 seconds 350 K and uh this quarter it is it is significantly low. So I did not understand the uh that part like uh uh 46:06 46 minutes, 6 seconds how exactly is it uh or was it Yeah. Yeah. 46:12 46 minutes, 12 seconds Yeah. So as uh we I think Russell has mentioned earlier that uh for our CDMO 46:19 46 minutes, 19 seconds businesses we have lot of uh stages to be manufactured. So we start little early. So that you know 67 stages the 46:26 46 minutes, 26 seconds early stages are were under uh production and that is still continuing in current quarter also and most likely 46:36 46 minutes, 36 seconds in H2 you will see the bump of uh uh you know uh sales going in uh bump in the CDMO sign. 46:46 46 minutes, 46 seconds Yeah. overall. Yeah. So that's okay. And and and so is it fair to assume that uh going forward let's say 46:53 46 minutes, 53 seconds Q2 onwards in API in intermediate business the growth will again catch up or will it again be let's say more of tilted towards H2 in terms of the API segments. 47:04 47 minutes, 4 seconds So I think year on year there will be growth in uh the both the segments API intermediate as well as the CDMO CMO. 47:10 47 minutes, 10 seconds CDMO CMO specifically we have anyway guided uh the growth and I think we are quite positive with the new capacity 47:18 47 minutes, 18 seconds coming in I think there will be growth in the API segment as well API intermediate segment as well understood sir so if one assumes let's 47:27 47 minutes, 27 seconds say mine kind of growth will that be a fair assumption still in in let's say fi 26 or maybe on a fi 26 27 kale basis in 47:36 47 minutes, 36 seconds the API intermediate segment so basically top line see What happens is that uh as I have earlier also mentioned on earlier conference calls is 47:45 47 minutes, 45 seconds that uh you know we have regulated market customers we have uh rest of the world customers and non-regulated 47:52 47 minutes, 52 seconds customers. So if we don't get the capacities available then we cut the non-regulated market but we still cater to high margin 48:01 48 minutes, 1 second uh regulated market as well as the RO customers. So basically practically you have to see the abita growth uh overall 48:09 48 minutes, 9 seconds which really makes uh the difference in the API segment as well as the zenzin 48:15 48 minutes, 15 seconds segment also I can cut the spot sales so ultimately uh 48:21 48 minutes, 21 seconds so if the capacity goes down by 10% still the profit may not go down by the same amount the profit may go down by 48:29 48 minutes, 29 seconds only few percentage points And vice versa is also true because you know we are anyway capturing all the 48:37 48 minutes, 37 seconds high margin market. So even if I have much higher capability the growth may not come significantly higher 48:43 48 minutes, 43 seconds uh because we are anyway capturing the all the important profitable market and then we go after the nonreg market. 48:55 48 minutes, 55 seconds Got it. Uh and so in terms of capacity utilization uh like for that quarter can we uh give some color on that like how 49:04 49 minutes, 4 seconds was the capacity utilization for intermediate and 3DMO capacity? 49:07 49 minutes, 7 seconds Yeah. Yeah. We were 80% plus utilization 8085. So which is optimally utilized because we are doing so many products at 49:14 49 minutes, 14 seconds a time. So we were fully occupied. Yeah. Yeah. 49:24 49 minutes, 24 seconds The next question comes from Yeshoti with SOIC research. Please go ahead. 49:32 49 minutes, 32 seconds Hello everyone. Yeah. Yeah. 49:37 49 minutes, 37 seconds Uh yeah good evening. So my question was uh related to the CDMO part where we guiding like 30 to 40% kind of growth. 49:46 49 minutes, 46 seconds So uh first of all will the margin this year uh expand on the console level and 49:54 49 minutes, 54 seconds also like uh what is our vision uh for the CDMO segment for like next 3 4 years. Can it be 30 to 40% of the 50:03 50 minutes, 3 seconds overall business uh for for the company? 50:08 50 minutes, 8 seconds Yeah, I think we have guided uh 30 to 40% growth this year on the CDM PM. Uh 50:15 50 minutes, 15 seconds and I think overall we aspire to do the numbers that I mentioned earlier in the call um where we want to reach in three 50:23 50 minutes, 23 seconds four years. So I think overall it depends on how the overall market plays out and how we are able to ramp up the 50:32 50 minutes, 32 seconds other products. So it can go anywhere between 25% to 33% of our field. 50:40 50 minutes, 40 seconds Okay. Then uh uh like other question was related to the solar plant that is coming. So what kind of cost savings can be there from that? 50:51 50 minutes, 51 seconds Yeah, I did mention earlier that annually it will have uh 25 to 30 cr cost saving for the current plant that we have operationalized. 51:01 51 minutes, 1 second Uh and then of course you know we have one more plant which is coming up uh which is going to be the uh plant with 51:08 51 minutes, 8 seconds the power purchase agreement that we will have with the uh joint venture. So that will also have more savings. 51:20 51 minutes, 20 seconds Okay. And like last question is related to like uh uh the base business uh how how we are seeing the growth we see here 51:28 51 minutes, 28 seconds in the base business as uh we are almost like near to the full utilization level 51:36 51 minutes, 36 seconds and uh also like uh the new newer capacities that are coming up into even 51:43 51 minutes, 43 seconds side and side are later uh into the year. to um so I think second half is not far uh yes 51:52 51 minutes, 52 seconds so I think second half we will have the capacities and that will allow us to grow further and we are also adding one 51:59 51 minutes, 59 seconds additional uh debottlenecking of API line also and then we have so there are lot of uh I think debottlenecking 52:07 52 minutes, 7 seconds exercise which keep on happening in the existing sites also so I think overall we will have additional capacities which will get freed up in the second half of 52:15 52 minutes, 15 seconds this year or maybe towards last quarter which will allow us to grow this year and of course next year as well. 52:23 52 minutes, 23 seconds Okay. Okay. Yeah, that's it from my side. Thank you. Thank you for the opportunity. 52:32 52 minutes, 32 seconds Thank you. The next question is from the line of Kumar Sorab with Scientific Investing. Please go ahead. 52:40 52 minutes, 40 seconds uh Alex my question is uh regarding the new capex which will be coming live in next 6 to 12 months. So usually whenever 52:47 52 minutes, 47 seconds a new capex comes live you know some of the expenses are frontloaded and then once we reach uh maybe 40 50 60% 52:55 52 minutes, 55 seconds capacity then the operating leverage play happens. So coming to these two businesses where we are coming with capex how does it look like? Do you feel 53:04 53 minutes, 4 seconds it'll impact some margin for one year and then we'll have a operating leverage or do you feel there should not be enough margin impact given the uh you 53:12 53 minutes, 12 seconds know existing business should picture of that? 53:16 53 minutes, 16 seconds Yeah, I think the two capexes are of different types. So one of the capex is green field capex where I think whatever you said is true whereas the second 53:23 53 minutes, 23 seconds capex is brownfield and in brownfield I think the cost uh will not go up as much. So we will uh have advantage with 53:33 53 minutes, 33 seconds the higher capacity costs also remaining low whereas in the green field uh you know we have we will have more uh opex 53:43 53 minutes, 43 seconds which will have to be covered over a period of time with the utilization. So I think we are going to have mix of both. So the zanth will be more brown 53:51 53 minutes, 51 seconds field and the atali project is going to be more green field of nature and there also we have done almost 200 150 to 200 cr of infras. 54:03 54 minutes, 3 seconds So which is for future. So currently we have just started with block one uh which mechanical closure we have 54:10 54 minutes, 10 seconds done. So with that still you know with the other blocks uh coming in you know we have capacity to do 10 blocks. 54:18 54 minutes, 18 seconds So that also once we have more and more block it will more go in the brownfield capacity uh brownfield expansion. So I 54:26 54 minutes, 26 seconds think we have to bite the bullet once you know so that's what we'll do in our Got it. Got it. And uh second question 54:34 54 minutes, 34 seconds is on if you can give some visibility in terms of the granularity of revenue in terms 54:42 54 minutes, 42 seconds of the business how granular it is. uh I know there could be restrictions in terms for competitive reasons but if you can give some color to that how granular these businesses are. 54:52 54 minutes, 52 seconds So in API business you know we have in next two three years we have good uh patent expireies which are coming in and with the products that uh you can see 55:00 55 minutes our website and the expireies uh you know we will have good potential if our partners are able to gain the market 55:08 55 minutes, 8 seconds share. So it's all depending on their partners' ability to gain the market share and how competitively we are able to support partner in manufacturing the 55:17 55 minutes, 17 seconds products that they desire. So but we have good pipeline I think uh in that anti-cancer and some of the general 55:24 55 minutes, 24 seconds products have promising sales. I think I see lot of billiond dollar plus products in our pipeline which are going to expire multi-billion dollar products 55:32 55 minutes, 32 seconds which are going to expire. So we expect uh uh if we are able to get 10 to 20% market share in these few of these 55:39 55 minutes, 39 seconds products you know we will be able to get a good growth in API segments. I think intermediate segment also same true basically where we are sitted with 55:48 55 minutes, 48 seconds multiple uh uh vertically integrated players. You know we end up supplying intermediates to multiple 55:55 55 minutes, 55 seconds five to seven customers in each product and even if one or two of them are successfully able to get their products 56:02 56 minutes, 2 seconds uh launched in US and Europe you know we can get good volumes and I think uh even the validation quantities and all that 56:09 56 minutes, 9 seconds also can be meaningful. So there again the game is how competitive you are remaining uh in total and uh that's where the 56:17 56 minutes, 17 seconds constant efforts to remain uh cost effective create capacities uh for meeting the customers demand and 56:26 56 minutes, 26 seconds all that is important so that's why we have proactively invested in Atali to have that uh possibility of growth uh in 56:36 56 minutes, 36 seconds got either now or in future do you see any of these API intermediate products having more than 20% I mean high double 56:44 56 minutes, 44 seconds digit revenue share of their segment yeah that's what our overall aspiration is that any product that we do should be 56:52 56 minutes, 52 seconds at least uh 10% plus of market share of the global no sir I'm not asking sir I'm not asking for market share uh in the API 57:00 57 minutes intermediate our revenue looks are there products which are contributing in high double digit like 20% of overall API and intermediate 57:10 57 minutes, 10 seconds revenue or 30% of API intermediate revenue. Do we have such products? Just to gauge how granular our you know uh 57:18 57 minutes, 18 seconds no we have more than 140 products that we offer as API intermediates. Of course some of them are very big. So uh few 57:27 57 minutes, 27 seconds products have uh $56 million sales also and of course you know we have captive sales internally consumption also. So 57:35 57 minutes, 35 seconds with that uh I think overall uh these products are larger products but not very heavily depend on any few 57:45 57 minutes, 45 seconds products. So it's a mixed basket uh uh of uh many products that we do. 57:53 57 minutes, 53 seconds That's all I had. Wish you all the best and looking for Lexi quarters. 58:00 58 minutes Thank you. The next question comes from Abhishek with Fatma Investments. Please go ahead. 58:08 58 minutes, 8 seconds Yeah. Am I audible sir? Yes. Hello. Am I audible sir? Yeah. Yeah. 58:14 58 minutes, 14 seconds Uh my question is on the Ganesh poly my question is on the Ganesh poly like since the capacity is now running from 58:23 58 minutes, 23 seconds July like is there possibility for larger profit potential from the joint? 58:32 58 minutes, 32 seconds uh um that's a good question. 58:34 58 minutes, 34 seconds I think longer term the capacity we have grown and I think overall the plan is to uh the the modification that we carried 58:43 58 minutes, 43 seconds out was to enable ourself to meet more demand of the customer. 58:49 58 minutes, 49 seconds So that's what is the endeavor. It may not happen in this year but I think longer term we will have higher capacities which will be able to meet uh more customers and more uh uh markets. 59:02 59 minutes, 2 seconds So there are multiple products that we have and few of them have application in aerospace also and which is growing 59:08 59 minutes, 8 seconds quite nicely. So with that we will have good growth possibility. 59:15 59 minutes, 15 seconds Okay. Uh as of now the profit contribution from the joint sensor is close to 40 crores or 60 cr. 59:26 59 minutes, 26 seconds Can you answer this? 59:27 59 minutes, 27 seconds Sorry what is the question? Can you repeat? 59:32 59 minutes, 32 seconds uh the joint a contribution to the profit because now we won't be adding it to the revenue straight to the profit. 59:39 59 minutes, 39 seconds Uh how much is it going to be following this year or next year? 59:44 59 minutes, 44 seconds So there will not be any impact on the profit per se. Uh it will be still counted as uh part of the profit after 59:52 59 minutes, 52 seconds tax. There will be an impact only on the revenue and the expenditure. 59:58 59 minutes, 58 seconds So last year there was Yeah, that part is clear. I'm asking you I got that part. I'm asking that what 1:00:07 1 hour, 7 seconds what is the what was that number last year? Was it 40 cr it was 60 crores IATA was 60 crores. So our share was 50% of that. 1:00:21 1 hour, 21 seconds Okay. Okay. Okay. So Okay. Thanks. That's all. 1:00:28 1 hour, 28 seconds The next question comes from Prakash Kapadia from Kapadia Financial Services. Please go ahead. 1:00:35 1 hour, 35 seconds Yeah. Uh most of the questions are answered. I just had one question. You know on the CDMO side uh obviously we've 1:00:43 1 hour, 43 seconds seen good growth and you commented uh you know the trajectory will continue. 1:00:48 1 hour, 48 seconds So given that you know growth in CDMO shouldn't evita trend higher than the 12 15% which uh we've I think mentioned in this. 1:00:59 1 hour, 59 seconds Yeah I think as uh we mention uh you know with the new plants coming in we will have higher opex also and uh all 1:01:09 1 hour, 1 minute, 9 seconds that. So with that I think we we have to see how our overall utilization happens and next year uh we can definitely have 1:01:18 1 hour, 1 minute, 18 seconds higher growth but this year with the half year you know we'll have to see how it goes. Yeah and also along with CDMO 1:01:25 1 hour, 1 minute, 25 seconds we have other businesses also uh growing. So overall there will be uh you 1:01:33 1 hour, 1 minute, 33 seconds know combined if we see it will be uh as guided earlier. 1:01:39 1 hour, 1 minute, 39 seconds Okay fine thanks. Thank you. 1:01:46 1 hour, 1 minute, 46 seconds The next question comes from Aanish with Vakaria. Please go ahead. 1:01:53 1 hour, 1 minute, 53 seconds Yeah. Hi. Uh good evening. Thanks for taking my question. I just have a quick one. Um this is regarding the uh CDMO 1:02:00 1 hour, 2 minutes business where you make products uh for the big pharma the on patent products. 1:02:06 1 hour, 2 minutes, 6 seconds Uh I just wanted to know uh that the APIs of the intermediate that you make are they getting exported to the 1:02:12 1 hour, 2 minutes, 12 seconds formulation plants in the US or are they getting to Ireland? I mean which is your major export country right now for that business? 1:02:21 1 hour, 2 minutes, 21 seconds Yeah. I think they are getting exported all around the world. So largely I think Europe is quite concentrated for 1:02:29 1 hour, 2 minutes, 29 seconds manufacturing of API and formulation and of course some goes to US as well. So so sir the goods that are getting 1:02:38 1 hour, 2 minutes, 38 seconds shipped to us as I understand API doesn't form in the definition of pharmaceutical as it applies for the 1:02:45 1 hour, 2 minutes, 45 seconds tariffs. So are your ABS uh so are your APIs that are getting shipped to US are they getting tariff right now? 1:02:53 1 hour, 2 minutes, 53 seconds No no no they are not getting tariff uh from so basically API are also exempt from tariffs as of now. 1:03:02 1 hour, 3 minutes, 2 seconds Yeah yeah yeah okay and let's assume for a second that section 232 investigation does lead to 1:03:10 1 hour, 3 minutes, 10 seconds some tariffs. Is there an understanding on how that might impact our business? 1:03:15 1 hour, 3 minutes, 15 seconds Who's going to take on these tariffs? I mean, what are the contracts like? Are they FOB or are they DDP? Can you give some color on that? 1:03:22 1 hour, 3 minutes, 22 seconds Some of the contracts are FOB. Uh, I think largely FOB. 1:03:28 1 hour, 3 minutes, 28 seconds Oh, is that a understanding that whatever number that comes from the investigation whatever that number that 1:03:35 1 hour, 3 minutes, 35 seconds uh would be uh is it like partly absorbed by us and the customer or fully absorbed by the customer? Is there any 1:03:42 1 hour, 3 minutes, 42 seconds clarity on that? I think uh 50% tariff if it becomes applicable I don't know what will happen but uh currently anyway 1:03:50 1 hour, 3 minutes, 50 seconds we are saved from this so we are not speculating what will happen because currently they are under the exempt list 1:03:57 1 hour, 3 minutes, 57 seconds uh so we hope that uh the things resolve and we uh have a much better uh tariff 1:04:05 1 hour, 4 minutes, 5 seconds situation in future and even if something were to come I think uh if it comes to 50% I think 1:04:14 1 hour, 4 minutes, 14 seconds there will be some impact because you know even if we directly may not sell I think our customers will eventually sell to US market because US is the biggest 1:04:22 1 hour, 4 minutes, 22 seconds market of formulation of generic products uh and what is the stance of uh uh President Trump on the generic 1:04:30 1 hour, 4 minutes, 30 seconds whether they want to apply tariffs or not and how he wants to take it you know it's more speculative I think today uh 1:04:39 1 hour, 4 minutes, 39 seconds the tariffs are not applicable that's what we can Okay. 1:04:43 1 hour, 4 minutes, 43 seconds Okay. So basically when that number comes that is when you start having discussions with your customer on basically how this gets split or whether the customer absorbs it or not. 1:04:53 1 hour, 4 minutes, 53 seconds Yeah. Yeah. Yeah. Yes. Because lot of customers are India based also which ultimately end up exporting the regulated market API customers. Uh these 1:05:02 1 hour, 5 minutes, 2 seconds could be basis India and they ultimately export. There are few customers which are US based but largely the manufacturing has shifted to other 1:05:11 1 hour, 5 minutes, 11 seconds countries right from US. So yeah just one clarification here uh some of the other players have said that the 1:05:18 1 hour, 5 minutes, 18 seconds APIs are actually not exempt from this section 232 and it applies to only the final formulation. Um so you are 1:05:26 1 hour, 5 minutes, 26 seconds indicating that you are paying the tariff on uh the API exports to the US. 1:05:34 1 hour, 5 minutes, 34 seconds I think the products that we are exporting uh our our uh sale condition is CIF. So we are not paying any direct 1:05:43 1 hour, 5 minutes, 43 seconds and of course the guarantine is under an extra 2 list. So it is under uh exempt the caffeine and it source are under exempt list. 1:05:52 1 hour, 5 minutes, 52 seconds Uhhuh. Understood. Okay. Thank you. Thank you. Thank you. 1:05:59 1 hour, 5 minutes, 59 seconds Yeah. I would like to thank uh all of you for attending the call. Thanks. 1:06:08 1 hour, 6 minutes, 8 seconds Thank you. This concludes the conference call. On behalf of Nama Wealth Management Limited, that concludes this conference. Thank you for joining us.