Aarti Pharmalabs Limited — Q3 FY26

Aarti Pharmalabs Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=Act1j92p7QQ Published: 3 months ago

0:00 Ladies and gentlemen, good day and welcome to Riy Pharma Labs Q3 and 9 months FI26 earnings conference call 0:08 8 seconds hosted by Dalat Capital Markets Private Limited. As a reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to 0:16 16 seconds ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then 0:25 25 seconds zero on a touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. 0:33 33 seconds Zen from Dalat Capital Markets Private Limited. Thank you and over to you sir. 0:40 40 seconds Hi, good evening everyone. I am Zan Gulam Hussein from Dalat Capital Market Private Limited. It gives me immense pleasure to hold 3QFI26 0:49 49 seconds RT Palmer Labs Limited on call. From the management team we have Mr. Rash Gori, chairman, Mrs. is Hal Gogri Gala, vice 0:58 58 seconds chairperson and managing director and Mr. Push Lakhani, chief financial officer. Now I pass it over to the management for their opening remarks. 1:06 1 minute, 6 seconds Over to you, sir. 1:09 1 minute, 9 seconds Good evening all and welcome to Atiharma Lab's earning call for the third quarter of the financial year 26. Thank you for 1:16 1 minute, 16 seconds taking the time to join us today. I will walk you through our Q3 performance and share key developments and provide insights into the steps we are taking to strengthen our growth going forward. 1:26 1 minute, 26 seconds Let me start uh with the summary of our standalone financial year. Uh financials for Q3 FY26. The revenue was uh rupees 5 1:36 1 minute, 36 seconds 425 crores which was uh earlier rups 471 cr a year back. The AITA was rupes 103 1:44 1 minute, 44 seconds crores as compared to rups 115 crores for the corresponding period of the previous year. The profit after tax for 1:51 1 minute, 51 seconds the Q3 financial Q3 FY26 was rupees 44 cr as compared to 74 crores a year back. 1:58 1 minute, 58 seconds I'm pleased to inform you that the board has declared an interim dividend of rupes 1.5 per share. 2:05 2 minutes, 5 seconds Now let me present you or present a few business highlights. Artifarmal labs operates across three key verticals. 2:13 2 minutes, 13 seconds Zenthin derivatives API and intermediates and CDMO CMO services. The zenthin derivative segment contributed to 49% of our turnover in Q3. The volume 2:22 2 minutes, 22 seconds split was 63% beverages customers and 37% other. In terms of geographical split, the export sales was 51% and rest 2:31 2 minutes, 31 seconds was 49% was local sales. The API and intermediate business stood at 39% of the turnover. This sub segment 2:39 2 minutes, 39 seconds uh vice breakup is uh 52% regulated market, 34% RO market and 14% non-reg 2:46 2 minutes, 46 seconds market. API business continues to see some margin pressure while early indication of recovery are emerging. We 2:54 2 minutes, 54 seconds remain vigilant and are directing all our efforts towards patent expiry over coming years. The third segment CDM CMO 3:02 3 minutes, 2 seconds has contributed to 12% of the revenue in this quarter. We are working with 21 customers and the number of active projects are 59 out of which 40 projects 3:10 3 minutes, 10 seconds are in the commercial stage and 19 are under various stages of development both at customer end. Apart from Q3 reported 3:18 3 minutes, 18 seconds sales another 49 cr worth of groups were in transit as of 31st December 25. These groups can could not be booked as sales 3:26 3 minutes, 26 seconds due to accounting norms. We are confident of meeting our CDMO revenue guidance for FI26. However, exceeding 3:34 3 minutes, 34 seconds that target which was earlier possibility now looks difficult due to certain project deliveries getting pushed by a few months. Let me now 3:42 3 minutes, 42 seconds discuss the update of the expansion projects. Atali plant started production of qualifying benches in Q3 FY26. While 3:51 3 minutes, 51 seconds ramping up phase uh one, we have encountered some starting hiccups which impacted the production plan and we have 3:58 3 minutes, 58 seconds corrective actions in place and we expect the resolution by end of the current quarter. 4:04 4 minutes, 4 seconds The zantin expansion is progressing as planned and we are targeting the mechanical completion by end of March 26. The incremental capacity will become available for the production in Q1 FI27. 4:15 4 minutes, 15 seconds However, utilization uh will increase progressively over subsequent quarters in line with the operation scale up and the order inflows few forward outlook. 4:25 4 minutes, 25 seconds Looking ahead for the fullear FI26, we expect AITA to be largely in line with last year with only marginal growth. 4:32 4 minutes, 32 seconds This revision is mainly due to the delay in Atali plant stabilization and relatively softness in API and intermediate business. While this 4:39 4 minutes, 39 seconds reflects the near-term pressure, but our fundamentals remain strong and I am confident that of mid to long-term growth trajectory of AI Pharma Labs. Our 4:47 4 minutes, 47 seconds efforts are dedicated to drive operational efficiencies and scale each business segment uh prudently to create long-term shareholder value. The 4:55 4 minutes, 55 seconds moderator may now open the forum for Q&A session. Thank you. 5:02 5 minutes, 2 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone 5:10 5 minutes, 10 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a 5:20 5 minutes, 20 seconds question. Ladies and gentlemen, we will wait for a moment while the question Q assembles. 5:30 5 minutes, 30 seconds Our first question comes from the line of Ahmed Madha from Unifi Capital. Please go ahead. 5:36 5 minutes, 36 seconds Yeah, thanks for the opportunity. Uh my first question is if I look at the CDMO uh business the number of projects the 5:44 5 minutes, 44 seconds commercial has gone from 33 to 40 in last 9 months. Uh does that give you any visibility for FI27 growth? I mean 5:53 5 minutes, 53 seconds exponential year what sort of how considering the way the projects have shaped up you'd like to give some comments how is the uh the uh the outlook for the growth uh shaping up. 6:06 6 minutes, 6 seconds Yeah, I think uh as you have seen the number of projects have increased on the commercial side and we are working with our customers in the starting of this 6:14 6 minutes, 14 seconds year to work on this number. I think we will be able to give that uh uh guidance of CDMO CMO growth uh post our budgeting exercise which we will do in next month. 6:26 6 minutes, 26 seconds So I think next final year but we are looking at good growth. I think uh we have strong uh uh pipeline of uh 6:33 6 minutes, 33 seconds projects with these 21 customers and we are confident that uh we will be a uh moving forward with a very good growth 6:43 6 minutes, 43 seconds and in the incremental projects that have come are those products already commercialized and scalable and we are 6:50 6 minutes, 50 seconds being added as a secondary supplier or some of these products are getting launched probably a year down the line or next 6:59 6 minutes, 59 seconds It is mixture of everything. So basically we are getting added we are in certain uh projects we are primary source certain projects we are getting 7:06 7 minutes, 6 seconds added as a secondary source and but largely I think it is more the products are getting launched or we are getting 7:14 7 minutes, 14 seconds qualified in these projects uh as a approved source. So with this uh uh 7:20 7 minutes, 20 seconds happening I think uh we will have the number of projects which are uh adding meaningful value to our uh sales are increasing you know every year. 7:33 7 minutes, 33 seconds Sure. And on the API side, I understand we had a few good launches last year and uh the the pricing pressure is the 7:41 7 minutes, 41 seconds nature of the business. But going forward, uh for the new launches on the diabetics side, the glyphosins and the 7:49 7 minutes, 49 seconds enco side uh are do we have any new launches in the pipeline or for the next year we have to rely on the existing portfolio? 7:58 7 minutes, 58 seconds No, no, we have uh new launches. Yeah, definitely we are validating couple of 8:04 8 minutes, 4 seconds or quite few APIs on Hong Kongo side and also improving our manufacturing processes on diabetic sites. Uh however 8:13 8 minutes, 13 seconds some of these APIs will have the patent expiry somewhere around 27 28 and uh we will see you know more and more 8:22 8 minutes, 22 seconds customers uh getting into our kitty with the validation completion uh uh in the 8:29 8 minutes, 29 seconds current quarter and in the next quarter as well. So 2026 also uh 8:39 8 minutes, 39 seconds uh 2026 also we will have couple of new launches uh for the enco 8:49 8 minutes, 49 seconds who has joined. So we will be we are working very aggressive on uh uh you know revisiting our strategy and uh 8:57 8 minutes, 57 seconds working on you know capturing the uh uh you know enco pipeline early on. Yeah 9:05 9 minutes, 5 seconds sure got it. My follow-up question on that is does that mean fi 2627 this year obviously we'll have deg growth but fi 9:13 9 minutes, 13 seconds 2627 do we consolidate or uh we can grow from that base. See what we are doing is that we are trying to debottleneck the 9:22 9 minutes, 22 seconds steroid line so that we can add more sales. Of course we have space in our uh general block where we are trying to get 9:31 9 minutes, 31 seconds more projects validated and that uh validation has been done in this uh year. So those will get commercialized. 9:37 9 minutes, 37 seconds These are some of the old products that we have taken up uh because we had space. So all that uh efforts and of 9:45 9 minutes, 45 seconds course in 2026 we have few launches like a pixab banan and few other anti-cancer products that are getting launched in 9:51 9 minutes, 51 seconds 2026. So with those launches uh we will see uh you know 2026 to be a better year 9:59 9 minutes, 59 seconds uh 2026 27 to be a better year uh overall in terms of API and also API business uh numbers also consolidate the 10:07 10 minutes, 7 seconds numbers of intermediates. So there are few intermediates uh that we supply from our uh range of intermediates for these 10:14 10 minutes, 14 seconds uh uh newer launch drugs also. So those are also going to increase significantly going forward. 10:21 10 minutes, 21 seconds Sure. Sure. That helps. Uh thirdly on Atali uh you spoke about the operational challenges. Can you just elaborate a bit 10:29 10 minutes, 29 seconds uh what what sort of uh issues we are facing and uh when we say the resolved by Q4 and does that mean that uh we can 10:38 10 minutes, 38 seconds shift some of our current intermediate from WP to Atali from Q1 and ramp up the utilization? 10:46 10 minutes, 46 seconds Yeah, basically see we were we were trying to validate uh several products uh there and in the validation uh there 10:54 10 minutes, 54 seconds were certain uh challenges that the uh company faced at a taliside because of 11:01 11 minutes, 1 second the newer staff and newer uh nature of the uh plant. So those issues are getting settled uh I think with the 11:10 11 minutes, 10 seconds operational team getting strengthened and the process team also being stationed there uh because uh all the entire new set of reactions and there 11:18 11 minutes, 18 seconds the the equipments that uh we have commercially started in phase one are all large equipment. So that's where uh 11:26 11 minutes, 26 seconds uh you know we are taking much larger batch sizes. So those challenges we anticipate to get over uh in the current 11:34 11 minutes, 34 seconds uh quarter and uh the batches have progressed well now. So overall that has 11:40 11 minutes, 40 seconds led to you know some delays in the uh certain validation quantities that were supposed to go for the CTMO projects in 11:48 11 minutes, 48 seconds the current fiscal but they will get pushed uh little bit to next uh quarter from Ashali. 11:56 11 minutes, 56 seconds Yeah. And uh in uh FY27 we will have more products uh range getting validated 12:04 12 minutes, 4 seconds from Atali and this will definitely help our uh intermediate uh capacity increase. 12:11 12 minutes, 11 seconds Sure. A couple of questions on the number side. So gross margin you sir but if you have a follow-up question please rejoin the queue. 12:19 12 minutes, 19 seconds Sure. Thank you. 12:20 12 minutes, 20 seconds Thank you. The next question comes from the line of Rahul Jane from Credence Wealth. Please go ahead. 12:27 12 minutes, 27 seconds Hello. Am I audible? Yeah. Yes sir, you are. 12:31 12 minutes, 31 seconds Yeah. Thanks for the opportunity. Uh sir, uh first question is with regards to the impact of this uh consignment 12:39 12 minutes, 39 seconds which is in transit where roughly we have cost to the extent of 30 crores and 49 crores could could have been the revenue value. So just to understand 12:48 12 minutes, 48 seconds what exactly is the impact on the numbers which have been declared for December how is that been accounted and what is the impact in the December 12:56 12 minutes, 56 seconds quarter with regards to same and what can be the impact in the next quarter coming in. 13:03 13 minutes, 3 seconds Yeah. So so the impact in the uh this is Pakani uh this the impact is essentially what we have given in our note. So if we 13:13 13 minutes, 13 seconds had been able to book the revenue in quarter three then our top line would have been higher by that amount 49 crores and the PBT would have been 13:21 13 minutes, 21 seconds higher by uh you know by the same amount. So, so 19 crores 19 19 crores. Yes. Yeah. 13:29 13 minutes, 29 seconds Wait. So currently how is it accounted? 13:31 13 minutes, 31 seconds Is there some impact in the current numbers? 13:34 13 minutes, 34 seconds Yeah. So currently it is being shown as a stock stock in transit. So that's why you know it is carried at 30 crores 30 13:41 13 minutes, 41 seconds something crores which otherwise would have been 49 crores if we had been able to book the revenue. 13:46 13 minutes, 46 seconds Okay. So do I understand in the coming quarter what would happen is this 30 crores stock that will be sold at 49 crores. So that 19 crores will be booked in quarter four. Correct? 13:56 13 minutes, 56 seconds Correct. Correct. Yeah. 13:58 13 minutes, 58 seconds Okay. And uh secondly sir with regards to the atali apex uh what kind of cost 14:06 14 minutes, 6 seconds uh incremental cost we have incurred uh with regards to this atalicex underway till now and what is the further cost 14:13 14 minutes, 13 seconds expected and how do we see the ramp up in the coming quarters? 14:19 14 minutes, 19 seconds No, so we have done the capitalization of around 300 crores and the total project outlay is around 450 14:27 14 minutes, 27 seconds crores. So that balance uh certain uh second phase is getting uh you know 14:34 14 minutes, 34 seconds completed and uh we will have that completion happening in next couple of months. 14:42 14 minutes, 42 seconds Mhm. Then I was asking also about the OPEX which has been because I can see some increase in other expenses and depreciation. So what kind of OPEX has 14:51 14 minutes, 51 seconds already been accounted in say quarter 3 which has been flown through the P&L. 14:55 14 minutes, 55 seconds Yeah. Yeah. So we had taken the complete depreciation as well as the OPEX numbers of Atali have also been accounted for uh 15:04 15 minutes, 4 seconds for this validation program whatever that uh we had undertaken. So the so the depreciation on the entire 300 15:12 15 minutes, 12 seconds crores of capitalization has come in and on top of it about one and one half crores of monthly opex uh that we are running at. 15:22 15 minutes, 22 seconds Okay. Okay. 15:24 15 minutes, 24 seconds Quarterly will be around say 5.25 depreciation on 300 crores. So it will be 15 16 cr depreciation in a year for that. 15:33 15 minutes, 33 seconds But then we'll be capitalizing. No addition. 15:36 15 minutes, 36 seconds Yeah. Yeah. additional once the additional gets capitalized then the depreciation will increase. 15:42 15 minutes, 42 seconds Yeah. And last question sir so with regards to zanthin ramp up so how do we see the zanthin ramp up uh over say next 15:51 15 minutes, 51 seconds year with this mechanical cap completion. 15:54 15 minutes, 54 seconds Yeah see currently as I have informed all of you in the last call that we are currently running at around 500 tons per month capacity and uh slowly ramping it 16:04 16 minutes, 4 seconds up. So I think uh uh with the new capacities coming up we are adding close to 300 tons per month additional 16:11 16 minutes, 11 seconds capacity. So that uh you know we will have that available but I think uh uh 16:18 16 minutes, 18 seconds quarter by quarter you know we will have in first quarter maybe 3 400 tons manufactured second quarter we'll manufacture more and then in a year we 16:26 16 minutes, 26 seconds should be at least able to utilize uh close to 50 to 60% of that capacity overall. 16:31 16 minutes, 31 seconds So the exit rate will be 50 60%. Or overall average could reach to 50%. Will be 50 60. 16:39 16 minutes, 39 seconds Okay. Average for the year could be in the range of 50 to 60%. Yes. Yes. Sure. That's quite helpful. Sure. Sure. 16:46 16 minutes, 46 seconds And sir just last thing with regards to the API. So you mentioned in your initial commentary also and in the press release also presentation also just to 16:55 16 minutes, 55 seconds understand you know where are we in this uh cycle of so on one side you have mentioned there are some green shoots which are visible at the same time the 17:04 17 minutes, 4 seconds margin pressures continue. So is it that the demand has started picking up the but the price versions have not yet 17:11 17 minutes, 11 seconds moved up. So is that what we should argue and plus how do we look it forward? Now see API business generic business the 17:19 17 minutes, 19 seconds prices never increase they always go down only. So ultimately the game has to be played where you increase the 17:26 17 minutes, 26 seconds capacity. So what we have done in our generic block uh also we have put the block five expansion couple of years back. So that is available with us and 17:35 17 minutes, 35 seconds then we have also mentioned that in this year we are also going to do the debottling of the uh steroid block and 17:42 17 minutes, 42 seconds our enco block eventually we will in future also we we will do the debottling. Once we have the more capacity and the more products get off 17:49 17 minutes, 49 seconds patent and to supplement our uh usage if the you know we have also undertaken few 17:56 17 minutes, 56 seconds older projects where we have our own raw materials uh produce intermediate produce inhouse which are large volume 18:03 18 minutes, 3 seconds uh trucks. So those also have been sold uh for the validation quantities. So all these efforts uh we see that uh uh 18:11 18 minutes, 11 seconds gaining more customers uh for newer products or the older products uh we will be able to uh do the growth in next year. 18:21 18 minutes, 21 seconds Sure sir. Uh thank you so much sir. Best wishes. 18:26 18 minutes, 26 seconds Thank you. My next question comes from the line of Ankit Gupta from Bamboo Capital. Please go ahead. 18:32 18 minutes, 32 seconds Yeah. Uh thanks for the opportunity. uh the first question uh is on the CDMO segment. So uh and two parts to it and 18:40 18 minutes, 40 seconds two parts to it. So if you look at our you know uh the number of molecules that uh uh that we have been working on uh 18:48 18 minutes, 48 seconds although you know we have seen a significant jump in the number of commercial molecules from around let's say 28 to almost 40 and most of them 18:56 18 minutes, 56 seconds have transitions transition from under development to commercial but overall our you know uh the the molecules that we have been working on has remained in 19:04 19 minutes, 4 seconds the remain in the range of around 55 to 60 over the past you know six to seven quarters. So if you can elaborate you 19:12 19 minutes, 12 seconds know how do you see this you know pipeline increasing and uh uh that was the first part on CDMO and second part was on you know if you look at our CDMO 19:21 19 minutes, 21 seconds revenues currently they are largely concentrated on two to three molecules. 19:25 19 minutes, 25 seconds So uh when when do we see you know other commercial molecules which which have increased from 28 to 40 contributing to 19:33 19 minutes, 33 seconds our you know revenues and scaling up to uh you know 5 10 million kind of thing over uh so when do you see that thing 19:42 19 minutes, 42 seconds happening and especially with Atali coming in uh uh you know next year in a full-fledged manner how do you see this happening? 19:50 19 minutes, 50 seconds Yeah, as uh you know you rightly mentioned that uh the uh overall uh the list that we are maintaining is a 19:58 19 minutes, 58 seconds dynamic list of 60 projects. So we are reducing the number of projects which are not getting through as an approval. 20:05 20 minutes, 5 seconds So it's a dynamic list. So what is important is how many are commercial and whether they are increasing or not because those who are 20:14 20 minutes, 14 seconds not getting approval are getting off the list also. 20:18 20 minutes, 18 seconds Okay. And uh uh uh you know we are getting newer projects in the commercial range where uh we are quite hopeful that 20:26 20 minutes, 26 seconds in future we will have revenue ranging uh significant revenue uh will come from meaningful revenue revenue will come 20:35 20 minutes, 35 seconds from these projects in future. So whatever you are able to track is only export data right largely and that also 20:43 20 minutes, 43 seconds quarter on quarter I don't know how much uh uh that tracking is being done this year largely in first three quarters we 20:51 20 minutes, 51 seconds have not done too much shipment so we have had total of only 120 30 crores 20:58 20 minutes, 58 seconds which plus of course this 50 cr so in the last quarter we'll have bulk of exports also happening which will have these uh newer commercialized uh 21:07 21 minutes, 7 seconds products getting exported. So you will see that in the data. Yeah. So so that should happen. Yeah. 21:14 21 minutes, 14 seconds Yeah. Going forward uh you know as we are putting people on ground we have someone in Europe and someone getting 21:21 21 minutes, 21 seconds shifted to US. So more people getting on the ground. I think uh with the newer uh customers that we have been able to uh 21:30 21 minutes, 30 seconds approach I think uh and with our uh new enhanced uh strengthening of our R&D 21:38 21 minutes, 38 seconds team I think in future we will have much more uh opportunities and you will see this list to grow. 21:44 21 minutes, 44 seconds Sure. Sure. Sure. And then for some of the products uh which uh you know one of our products which got uh you know 21:51 21 minutes, 51 seconds regulatory approvals in this financial year and one which is expected hopefully should get approval in Europe in uh 21:58 21 minutes, 58 seconds second half of uh this uh in current year and USFD approval next year. So how do you see this molecule scaling up for 22:07 22 minutes, 7 seconds us? you know now you know at least one of them has been commercialized the other two the other one is also expected to be a blockbuster drug you know so if 22:16 22 minutes, 16 seconds you can tell us whether you know what kind of projections or what kind of indications is are the you know some of our innovators or our CDMO partners are 22:25 22 minutes, 25 seconds giving for these two products see I think uh we are not speculating on 22:33 22 minutes, 33 seconds these names of we are bound by the confidentiality agreement with our customers. So, but the project's uh uh 22:42 22 minutes, 42 seconds success depends on how well they are marketed and how well they are getting penetrated because for the same segment there are many drugs which may be there. 22:49 22 minutes, 49 seconds But luckily for us the drugs uh which are there have a very segment which is differentiated segment 22:57 22 minutes, 57 seconds where there are not too many competitors operating in this space. So we are keeping our finger crossed and hoping that uh our uh innovator partners are 23:07 23 minutes, 7 seconds able to grow these products and of course we are there to support them. So in future we could see healthy growth in 23:16 23 minutes, 16 seconds all these projects so which we are doing with our partners. 23:21 23 minutes, 21 seconds Sure. Sure. Thank you. Second question was on the API part. You know uh last year in second half we had touched almost a quarterly run rate of 200 K. We 23:30 23 minutes, 30 seconds had in fact you know exceeded that and this year we have been in the range of 150 to 160. Of course you have alluded 23:37 23 minutes, 37 seconds the reasons given the launches which are happening uh in the coming financial year. uh how do you see you know uh we 23:46 23 minutes, 46 seconds might end up this year around 650 660 660 670 cr kind of run rate for the full financial year given how the trend has 23:53 23 minutes, 53 seconds been for the past three quarters and last year we were almost around 770 crores. So next year should we be 24:01 24 minutes, 1 second looking at going back to that 770 780 cr kind of run rate or you know we should also see some growth on that number or 24:10 24 minutes, 10 seconds at least at this juncture we are just looking to go back to the FI25 API numbers. 24:17 24 minutes, 17 seconds Yeah I think the first milestone is uh as you rightly mentioned quarterly 200 and then the next milestone will be 24:24 24 minutes, 24 seconds higher than that uh quarterly. So these are the milestones uh I think. Yeah. So 24:31 24 minutes, 31 seconds that is what we will try to scale it up to. But when do you see this happening? 24:35 24 minutes, 35 seconds Let's say you know going back to 200 quarterly run rate on API as we get more and more uh uh you know 24:43 24 minutes, 43 seconds commercialization of our products uh and the new launches happen. 24:48 24 minutes, 48 seconds So uh that will happen across next uh few quarters. So I think it's not going to happen in next quarter but I think it 24:55 24 minutes, 55 seconds will take a couple of more quarters to come to that. 24:59 24 minutes, 59 seconds Sure. Sure. And this last question on the gross margin. 25:02 25 minutes, 2 seconds Sorry to interrupt you sir but uh if you have a follow-up question please reach out. Thank you. Thank you. Thank you. 25:06 25 minutes, 6 seconds Thank you. Our next question comes from the line of Madhara from FIL. Please go ahead. 25:13 25 minutes, 13 seconds Yeah. on the Zanthine derivatives business. Uh if my understanding earlier was correct, uh we had 5,000 tons capacity and uh I think you if I heard 25:22 25 minutes, 22 seconds it right, you said you're running at 500 metric tons per month uh run right now. 25:27 25 minutes, 27 seconds So just trying to clarify like uh that would be 6,000 tons volume. So what is the basically what is the current installed capacity and sort of volume run rate that we have at Zantine today? 25:38 25 minutes, 38 seconds Yeah. So basically in Zanthin segment we are running two manufacturing sites. So what what we have done is the current 25:47 25 minutes, 47 seconds mother site that we have there also we did some deep bottlenecking exercise. So that capacity increase has happened 25:53 25 minutes, 53 seconds uh as phase one and the new site that is 300 tons per month that is getting installed uh mechanical completion by 26:02 26 minutes, 2 seconds end of this uh financial year by March and next quarter will start the trial production and everything. So that's how 26:10 26 minutes, 10 seconds the production uh will reach to 800 metric ton per month. So that's why we are saying that 26:17 26 minutes, 17 seconds currently we are at 500 because that's what we are operating at. 26:23 26 minutes, 23 seconds Okay. So effectively so you're saying we are at 500 metric tons per month including the debottlenecking and at peak including the expansion we can get to 800 metric tons of volume from that. 26:35 26 minutes, 35 seconds Yeah. So that is 9,600 over install 9,600 9 around 9,000 considering 25 whatever. Yeah. 26:46 26 minutes, 46 seconds Okay. Okay. Got it. Understood. And uh um how is the pricing trend right now in Zanthine across uh you know in the 26:54 26 minutes, 54 seconds various end markets which we sell and uh the incremental volume will we be selling it more in uh you know pharma grade or will it be more beverages or 27:02 27 minutes, 2 seconds you know any market mix you can give us pricing can vary. So just wanted to check. 27:07 27 minutes, 7 seconds Yeah. So I think there is an interesting development is that the China has announced that they will withdraw the 27:15 27 minutes, 15 seconds benefit rebate benefit on caffeine and its salts. So with that the rebate withdrawal I think overall 13% benefit 27:23 27 minutes, 23 seconds that is getting accured to the Chinese manufacturers when they export the API that will go away and we are hope hoping 27:31 27 minutes, 31 seconds that this will push the prices of the product up by at least uh 8 to 10% in future. we are seeing some increase in 27:38 27 minutes, 38 seconds the pricing overall. I think uh in the spot market we have seen uh around 5% increase in the price from low lower 27:46 27 minutes, 46 seconds level. So we are seeing that the overall pricing has bottomed out. Secondly for the U US market now with the uh overall 27:56 27 minutes, 56 seconds trend I think there is a duty of uh 20% which is applicable on Chinese product whereas India has a duty-free status 28:04 28 minutes, 4 seconds currently because caffeine doesn't attract the uh caffe caffeine is in the annexure 28:11 28 minutes, 11 seconds list which is free from these uh Trump tax. So with this I think uh we are in a favorable position to do the exports to 28:19 28 minutes, 19 seconds US. Imports will uh and that uh other markets also we will have a higher uh uh 28:26 28 minutes, 26 seconds overall pricing should improve I think going forward. 28:31 28 minutes, 31 seconds Is it a fair assumption that um in FI28 we could uh you know run at full capacity on the like the 9,000 metric tons can be full capacity for us? 28:43 28 minutes, 43 seconds I think the the efforts are uh you know going to basically achieve to 85 to 90% 28:51 28 minutes, 51 seconds of that capacity by that period. We always want to have some free capacity. 28:57 28 minutes, 57 seconds Yeah. And we wanted to uh reach a top three in the world uh with this kind of capacity. So to have a good position 29:07 29 minutes, 7 seconds across understood. Understood. And uh uh in the uh API business uh you know our although the reported revenue obviously seems 29:14 29 minutes, 14 seconds like there's a decline but just wanted to check uh like until last year we had a subsidiary you know where um it the revenue used to be booked in the top 29:22 29 minutes, 22 seconds line now it's moved to the associate line item uh the GV which we had so is the decline in API business because of that change in the reporting uh because 29:31 29 minutes, 31 seconds of that or there's actually been a decline of see you have to look at the standalone business and standalone to standalone what is the gap that is what is 29:39 29 minutes, 39 seconds important. Uh overall see in this current uh quarter we have added uh 5 cr 29:47 29 minutes, 47 seconds uh pat uh uh below the line for that uh entity. So which had uh uh negative 29:56 29 minutes, 56 seconds numbers in last two quarters have become positive and this quarter it has uh added five crores in this uh 30:04 30 minutes, 4 seconds uh you know results consolidated results and we are hopeful that in the future also we will see similar uh positive 30:12 30 minutes, 12 seconds numbers from that uh joint venture that we have. 30:16 30 minutes, 16 seconds Sure. I just want to clarify this 167 shows um approx API intermediate business which you booked in quarter 3. 30:24 30 minutes, 24 seconds What was the like for like number last year like if I compare apple to apple uh for this business 30:33 30 minutes, 33 seconds that number I think even the percentage you will have to see last year Q3 was uh 40%. 30:42 30 minutes, 42 seconds of uh you know I think no the breakup was around 44%. 30:50 30 minutes, 50 seconds On what top line is it on what top? 30:52 30 minutes, 52 seconds I think it was around 180 180. Yeah. So the decline is more like 56% right rather than the 31:01 31 minutes, 1 second much larger number which comes because of that 180 has become 160 158 160. Yeah. 31:08 31 minutes, 8 seconds Okay. Okay. That's the last question on the CD business. 31:11 31 minutes, 11 seconds But if you have a follow-up question, please rejoin the queue. There are a couple of participants waiting in the queue. 31:18 31 minutes, 18 seconds Thank you. Our next question comes from the line of Shika Ma from Time and Tide Advisers. Please go ahead. 31:26 31 minutes, 26 seconds Good evening, sir. Am I audible? Yeah. Yeah. 31:30 31 minutes, 30 seconds Congratulations on a decent set of numbers. Uh I wanted to understand the gross margins a little better. Uh so of 31:37 31 minutes, 37 seconds course this quarter we've seen you know superior gross margin. So is this something we can maintain going forward? 31:43 31 minutes, 43 seconds Is this sustainable or is there some kind of one off? And along with that on our other expense side uh there is a 31:52 31 minutes, 52 seconds significant rise. So is that just the uh you know operational expenses that we were mentioning earlier or is there anything else part of it? 32:02 32 minutes, 2 seconds Yeah, the first one I think know quarter to quarter the gross margins will vary a little but if you see 9 months it's basically uh trending at the same almost 32:11 32 minutes, 11 seconds the same level. If you look at gross margin as well as IITA, they are around the same level. 32:17 32 minutes, 17 seconds And uh second question about the expenses. Yes, mainly the increase is contributed by the Atali site and there 32:24 32 minutes, 24 seconds is one more site that we have taken on rent on lease uh where we are paying conducting fees. So there also there is 32:33 32 minutes, 33 seconds some contribution also coming in and there is corresponding some expenses also that is getting booked. So that that particular uh disclosure we had 32:42 32 minutes, 42 seconds given in the Cuban that we have entered into a conducting agreement with one of the uh one of the players who had some extra capacity and empty plant. 32:55 32 minutes, 55 seconds Understood. So the other expense should broadly normalize once we start seeing um revenues coming in from you know 33:02 33 minutes, 2 seconds Adali etc. Right. It should move back to that 21 22% of sales that it used to be. 33:09 33 minutes, 9 seconds Yeah. Yeah. It will move more in tandem with the growth in the top line and as you rightly said it will move uh basically it will increase uh once the 33:17 33 minutes, 17 seconds operations are stabilized and ramped up at Atali. 33:22 33 minutes, 22 seconds Another thing sir in our presentation and in our opening remarks we've mentioned that we're looking to end FI26 33:30 33 minutes, 30 seconds on a flat to moderate growth on EIA basis for FI26. 33:37 33 minutes, 37 seconds So that would suggest a very large quarteronquarter jump in the Q4 numbers 33:44 33 minutes, 44 seconds for EIA. It would lead to almost 50 to 55% of an EITA jump quarter on quarter. 33:51 33 minutes, 51 seconds Is that understanding correct? And are we you know geared towards doing that? 33:58 33 minutes, 58 seconds Yeah, as you as we have mentioned in the today's presentation also that one revenue we had to defer the 49 cr sales 34:05 34 minutes, 5 seconds with uh uh that we had to take at 30 cr uh cogs. So with that and the normal increase I think whatever that we are 34:14 34 minutes, 14 seconds projecting because uh lot of CDMO sales are still going to happen in the last quarter. So with that we are 34:20 34 minutes, 20 seconds anticipating uh good growth in the last quarter. 34:25 34 minutes, 25 seconds And so lastly on the API side I understand a lot of participants have asked this earlier as well but I'm just 34:33 34 minutes, 33 seconds looking to understand so uh you know last year Q3 and Q4 obviously were tremendous quarters for us um in the near future maybe Q1 or Q2 and FI27. 34:46 34 minutes, 46 seconds Can we expect that kind of revenue and you know margin or is that something to look at as a one-off and might not happen going forward? 34:58 34 minutes, 58 seconds No, we are increasing the capacities now which quarter we will be able to grow will be you know whatever we are pushing 35:05 35 minutes, 5 seconds no so I'm just trying to understand that was was Q3 you know we had margins of EITA margins of almost 27% last year Q3 35:14 35 minutes, 14 seconds sorry last year Q4 so is that margin a one-off or is that something that you know in the imminent future we can expect at some point in FI27 35:23 35 minutes, 23 seconds I think Q4 margin was driven by the CDMO CMO as well so in the Q4 we had CDMO CMO 35:30 35 minutes, 30 seconds almost going up to 27% of the sales right so overall I think uh the last year Q3 35:40 35 minutes, 40 seconds Q4 uh both uh you know we had good uh API 35:45 35 minutes, 45 seconds sales uh you know overall as well so but the bump was largely due to CDM 35:54 35 minutes, 54 seconds understood so again as that continues to grow at this 30 40% rate that we've kind of for it should possibly come back. 36:04 36 minutes, 4 seconds Yes. Yes. 36:06 36 minutes, 6 seconds All right. So, thank you. I'll come back in the queue. 36:10 36 minutes, 10 seconds Thank you. Our next question comes from the line of Ahmed Madha from Unifi Capital. Please go ahead. 36:16 36 minutes, 16 seconds Yeah. Few questions on the numbers. So, uh did we have any forex loss in quarter 3? Last quarter we had some. 36:25 36 minutes, 25 seconds Yeah. Yeah. So, so basically you know that gets sparked in the uh other income. So, so basically you know we 36:32 36 minutes, 32 seconds have gain on the exports and we have loss because the rupee is depreciating obviously uh so loss on the uh imports 36:42 36 minutes, 42 seconds and on top of it you know the uh the part of the interest on the foreign 36:49 36 minutes, 49 seconds currency loan which is above over and above the normal rate of borrowing in India or INR also gets net off against 36:58 36 minutes, 58 seconds the export gains. So, so basically the net impact which you are which you are seeing in other income is because of that. 37:05 37 minutes, 5 seconds So total will be 5 cr. 5 crores. 37:07 37 minutes, 7 seconds 5 crore is the total impact that so so whatever gain we had almost you know similar kind of loss we had. 37:15 37 minutes, 15 seconds Okay. Sure. And in terms of the uh capital structure how much gross debt we have 9 month ending? 37:23 37 minutes, 23 seconds 650 650 cr. 37:26 37 minutes, 26 seconds 650 crores. Okay. And post all the capex are done. I mean the balance of Atagali and Zeni and everything. Uh what number should we end by uh Q4? 37:40 37 minutes, 40 seconds I think we should look at net debt to equity of around.3 uh between.3 and 35 you know depending upon how Q4 goes. 37:48 37 minutes, 48 seconds Yeah.3.4 got it. Okay. And on the Atali you spoke about 450 K capex of which 300 is 37:56 37 minutes, 56 seconds commercialized and 150 is the balance remaining for Zentine. How much will be your block uh which will be capitalized? 38:05 38 minutes, 5 seconds Zen in total uh uh the project that we have approved is around 150 cr uh with both the sides together. 38:15 38 minutes, 15 seconds Okay. Sure. Sure. Sure. 38:18 38 minutes, 18 seconds Uh lastly on the sir followup please join the queue. Sure. Thank you. 38:27 38 minutes, 27 seconds Our next question comes from the line of Ankit Gupta from Bamboo Capital. Please go ahead. 38:33 38 minutes, 33 seconds Thanks for the opportunity again. On the venthium side, you know, we we will have the entire capacity of 9,000 ton peranom 38:41 38 minutes, 41 seconds by end of Q4 and we as you have been indicating that you know we're looking at uh we should end FI27 with a decent 38:51 38 minutes, 51 seconds capacity utilization of the incremental of the new plant as well. So uh you know uh new capacity addition as well. So are 38:58 38 minutes, 58 seconds we looking at a scenario next year uh and uh that you know our volume growth in the zenithin should be can be around 39:05 39 minutes, 5 seconds 25 to 30% plus given how things are there on the China because of this anti-involution thing we should also 39:13 39 minutes, 13 seconds have some 5 to 10% kind of jump in realization in benzene yeah so I think uh every overall as I 39:22 39 minutes, 22 seconds have indicated that the new plant will start up and we'll see how that goals overall uh target we have set of what we 39:31 39 minutes, 31 seconds want to commercialize from there but what we did is that from the current site itself by deep bottlenecking we are anyway operating at 6,000 level today 39:39 39 minutes, 39 seconds for this quarter so uh that really gradual thing also helps us in pushing the number because 39:46 39 minutes, 46 seconds you are not taking a certain shock of increase from 5,000 to 9,000 you already are at 6,000 so it's easier to reach 39:55 39 minutes, 55 seconds 7 or 7 and a half thousand uh going forward. Yeah. So another thing that I think uh everywhere we don't 40:03 40 minutes, 3 seconds compete with China. So wherever we are competing with China, you know, definitely we will have this advantage of margin. But I don't think that we'll 40:11 40 minutes, 11 seconds have a substantial because we have certain contracts which have locked in on the pricing. So 40:18 40 minutes, 18 seconds yeah, sure. Okay. And uh but depreciation definitely helps us overall. Sure. 40:26 40 minutes, 26 seconds Sure. And then on the capex part on you know for uh FI27 and FIA 28 you know uh 40:35 40 minutes, 35 seconds we were also uh looking at incremental blocks coming in Atali. So given some visibility on the CDMO part are we 40:44 40 minutes, 44 seconds looking at some expansion coming in for the new block at Atali in FI27? 40:50 40 minutes, 50 seconds Yeah. Yeah we will have at least one block coming up in Atali in next year. 40:55 40 minutes, 55 seconds So we will get that capex approval going forward. 40:59 40 minutes, 59 seconds Okay. And uh and then it should not be a large capex given all the be a large large capex. It won't be a large. 41:08 41 minutes, 8 seconds Okay. So does that also imply that you know such huge capacity is coming up and we are also looking at uh you know new 41:15 41 minutes, 15 seconds block coming in uh for the CBDMO. We have very good visibility on how CDMO should ramp up post the first phase comes in. the first block comes in. 41:25 41 minutes, 25 seconds Yeah. Yeah. Yeah. Yeah. We have good visibility. So, of course, you know, we have to keep our finger crossed. We, our partners have to make sure that their 41:33 41 minutes, 33 seconds launch drugs are uh being successful and uh they don't have any hiccups. So, everything is contingent to how they are 41:40 41 minutes, 40 seconds performing post launch. So that's what uh we are waiting to see and I think uh 41:48 41 minutes, 48 seconds because everyone prepares for the launch and the first year there is always a dip post launch and the second third year again it picks up because you know they 41:56 41 minutes, 56 seconds are certain about the market uh targets and they are actually trying to expand the market. So that's where I think we 42:05 42 minutes, 5 seconds will be in different phases with different drugs. Yeah. Okay. Okay. Thank you. 42:13 42 minutes, 13 seconds Thank you. Our next question comes from the line of Vikas Sharda from NT asset management. Please go ahead. 42:20 42 minutes, 20 seconds Yes. Hi, good evening. Uh one question that you have pointed out what is the goods in transit. What would be the normalized goods in transit like every 42:29 42 minutes, 29 seconds quarter so that we can know that how much higher it is this quarter. 42:34 42 minutes, 34 seconds 8 to 10 cr I think 10 to 12 cr will be normal. Good. No, you know this was a specific case of an incoterm being a DAP 42:43 42 minutes, 43 seconds uh delivered at place. So, so basically you know we uh deliberated you know the possibility of booking it 42:51 42 minutes, 51 seconds in the last quarter itself but then uh uh you know we had deliberated with the auditor also and internally also and it was basically as per the accounting 42:59 42 minutes, 59 seconds terms it gets booked at the uh at the time of delivery itself. So but normally 43:05 43 minutes, 5 seconds we do not have too much sales uh with this encoder. So so normally it is not that high as far as FG is concerned. 43:14 43 minutes, 14 seconds Yeah. So it will be around 10 12 K is typically which is at the dock at the dock. 43:22 43 minutes, 22 seconds Okay that's helpful. And secondly so you have revised down the AITA growth guidance from last quarter to this quarter. So besides some push out in say 43:30 43 minutes, 30 seconds CDM sales any further negatives that you headwinds do you see for this year? 43:37 43 minutes, 37 seconds I think uh uh as I have mentioned API overall growth uh that we were seeing 43:45 43 minutes, 45 seconds that there would be some growth but there has been degrowth okay in the API sales uh segment that we have seen. 43:53 43 minutes, 53 seconds Uh so that is also one of the reason why uh you know overall we have not been but the engine segment has done as what we 44:01 44 minutes, 1 second were targeting uh CDMO CMO little bit of push back and API is little slow. So I think these are the three factors and then we had 44:09 44 minutes, 9 seconds capitalized the atali and then all the expenses have started coming in. So we have depreciation and all that also uh 44:16 44 minutes, 16 seconds the running expense opex have also come in. So whereas the uh initial hiccups that of course will get solved going forward. 44:27 44 minutes, 27 seconds Yeah. And in the API segment is the pricing pressure across the board or how is it like few specific molecules and 44:35 44 minutes, 35 seconds how is the volume growth overall say for API and intermediates? 44:40 44 minutes, 40 seconds I think uh uh we are seeing pricing growth happens that is the nature of API business. I think uh overall there is 44:47 44 minutes, 47 seconds always a surprising growth. Uh we had few launches last year which have uh uh 44:54 44 minutes, 54 seconds you know they uh the partners with whom launched they took significant quantities and this year they are a little bit slow in taking up more 45:02 45 minutes, 2 seconds quantities from us. So so that's one of the reason. Second thing you know the in terms of intermediate capacities you know we did not have too much 45:10 45 minutes, 10 seconds intermediate API capacity because we were running the CDMO operations in our uh intermediate and CDMO combined 45:19 45 minutes, 19 seconds facility. So now with the Atali coming in I think we will again focus on these intermediates of course the as the 45:26 45 minutes, 26 seconds launches happen of the APIs which are getting expired we'll start supplying these inter so those sales also will get added into the API segment. So both 45:35 45 minutes, 35 seconds these will happen. So that will drive the number towards uh growth. Perfect sir. Thank you. 45:43 45 minutes, 43 seconds Thank you. 45:45 45 minutes, 45 seconds Thank you. Our next question comes from the line of Shuba from Burman Capital. Please go ahead. 45:52 45 minutes, 52 seconds Uh hi sir. Thank you for the opportunity. So I just want you to understand that uh Bayer got an approval uh USFD approval in October of 2025 for 46:01 46 minutes, 1 second one of their uh you know key products uh in the menopause and hot flashes category and they you know repeatedly categorize that as a blockbuster 46:09 46 minutes, 9 seconds opportunities that you know 1 billion euros of sales. Um what we understand is that you know uh there are some key intermediates that you are supplying. So 46:17 46 minutes, 17 seconds just wanted to understand how are you you know looking at this opportunity. 46:21 46 minutes, 21 seconds Can it you know become a 15 to 20 million uh dollar kind of opportunity for you and uh yeah 46:30 46 minutes, 30 seconds yeah we are not commenting on specific molecule because of the CDA that we have with various customers. So unfortunately 46:37 46 minutes, 37 seconds I won't be able to answer this question. 46:42 46 minutes, 42 seconds Um understood no problem sir. Um so you know uh just wanted to understand also general CDMO part like uh you know uh 46:50 46 minutes, 50 seconds from the time you ship a product uh from India to the you know receipt of goods at the customer what is you know the 46:56 46 minutes, 56 seconds general time lag and you know uh uh between that shipment as well as revenue recognition. 47:03 47 minutes, 3 seconds See generally we most of the products which are more than a lakh rupees a kage we do mostly air shipment. 47:12 47 minutes, 12 seconds Uh so this is being delivered in 5 7 days whereas the sea shipment takes 30 to 40 days if it is going to Europe or 47:19 47 minutes, 19 seconds if it goes to US then it will be 60 days. So by sea shipment but by air it is 7 8 days. So but the I think the sale 47:29 47 minutes, 29 seconds shipment was C so that's where the issue came up and in most of the cases we are able to 47:37 47 minutes, 37 seconds book the revenue as at the time of shipment itself. So yeah. 47:41 47 minutes, 41 seconds So this is the one of one of one of that's why we had to disclose and it moves the number significantly you know for this quarter 47:51 47 minutes, 51 seconds because it's a very large shipment that we did uh for one of our customers. 47:58 47 minutes, 58 seconds Uh yes sir but you um said earlier right that there were a lot of shipments uh that you know might be seen in FOD or 48:06 48 minutes, 6 seconds there but you know that usually happens later on. So just you know understanding from that perspective that uh you know 48:14 48 minutes, 14 seconds is there like a 1 million average uh sorry one month average kind of you know math between shipment to revenue recognition. 48:22 48 minutes, 22 seconds Not really because uh most of the shipments are air shipments. So I think there is only few days of uh delay but 48:30 48 minutes, 30 seconds not all are DAP terms. So some of them are only DAP most of them are CIF FOB 48:38 48 minutes, 38 seconds and stuff like that. So it depends on the inco in code terms. 48:43 48 minutes, 43 seconds Understood. Understood. So just one last question if I can squeeze in. Um uh usually sir when you uh when an innovator is you know kind of receiving 48:51 48 minutes, 51 seconds an USFD or Google is there like a buildup of an inventory that they would see on their end and you know then um obviously that will follow a 49:00 49 minutes normalization period you know and possibly restocking of that in the you know that one year kind of range or 49:06 49 minutes, 6 seconds usually it's more uh you know uh stable just wanted to understand that perspective so I think every innovator has a different plan and if they are getting 49:15 49 minutes, 15 seconds approval of different market at a different date then anyway the launches are deferred but once they have key 49:22 49 minutes, 22 seconds approvals in key markets of Europe, UK and US and other uh important market 49:29 49 minutes, 29 seconds like Japan or whatever. So then I think they are at a full potential of uh sales 49:37 49 minutes, 37 seconds and that's where it depends on how they have prepared for each launches. Understood. 49:43 49 minutes, 43 seconds So they don't get a day one approval for all the markets. So it all the regulatory agencies have a different uh clock for approval. 49:53 49 minutes, 53 seconds Understood. Uh thank you sir and all the best for the future. Thank you. 49:58 49 minutes, 58 seconds Thank you. Our next question comes from the line of Muhammad Patil from Edel Wise public alternatives. Please go ahead. 50:05 50 minutes, 5 seconds Am I audible? Yes. Yes sir you are. 50:08 50 minutes, 8 seconds One question is related to the CDMO business. So the number of customers were 21 at the start at the end of FI25 50:15 50 minutes, 15 seconds and the number is same currently in the 9 months. So are we expecting addition of customers in the near term? 50:25 50 minutes, 25 seconds Yeah. Yeah. We expect this customer number to go up uh in uh calendar years like this. 50:33 50 minutes, 33 seconds Okay. And a followup question on that. 50:35 50 minutes, 35 seconds So can you give some color on the current CDMMO inquiries pipeline? 50:42 50 minutes, 42 seconds No, I think starting this year we are uh having good number of uh new inquiries that have been generated by our BT team 50:51 50 minutes, 51 seconds and uh uh you know our team is really responding to these uh inquiries and we hope to win uh few of these RFPs going forward. 51:02 51 minutes, 2 seconds Okay, we are expecting 1,000 K of CDMO sales. So then we should expect FI27 51:10 51 minutes, 10 seconds growth also to be similar to FI26 number. That is the target that we have. Yeah. 51:20 51 minutes, 20 seconds One bookkeeping question. So what was the net debt? You mentioned the gross debt. What was the net debt? Q3. 51:27 51 minutes, 27 seconds Net debt around 650 crores. We don't keep too much cash anymore. Yeah. 51:32 51 minutes, 32 seconds Okay. Last question. Uh on the Zen thing, one of the previous participants where you were discussing the lock in thing. So I just wanted to understand 51:41 51 minutes, 41 seconds what percentage of a business will be locked in. 51:45 51 minutes, 45 seconds No. So basically we have uh uh you know certain you know commitments which are 51:53 51 minutes, 53 seconds quarterly and annual nature. So our percentage of logged in uh uh may 52:01 52 minutes, 1 second differ for customer to customer for different quarters you know on an average what what would that 52:08 52 minutes, 8 seconds number be on an average approximate number is fine see the capacities are increasing the sales is also increasing so that number 52:15 52 minutes, 15 seconds is a dynamic number I wouldn't like to comment on that number okay not even directionally around 50%. 52:26 52 minutes, 26 seconds Thank you. 52:29 52 minutes, 29 seconds Thank you. Our next question comes from the line of Mad Homea from FIL. Please go ahead. 52:35 52 minutes, 35 seconds Yeah, thanks for the followup. So I just wanted to check on the CDMO business. Uh I think this year we've guided by 30 40%. I missed a comment. So you said 52:43 52 minutes, 43 seconds FI27 also could be similar growth. Is that what you indicated in one of the earlier questions? No, I think we will formulate the we will have the budget 52:51 52 minutes, 51 seconds prepared by March and I think uh once we have the results of this fire we'll be 52:59 52 minutes, 59 seconds able to do the proper guidance. So okay but there will be growth. 53:06 53 minutes, 6 seconds Okay but it's a CDMO business uh you know it's the base is small. So if you get like one or two good commercial opportunities the growth can be pretty 53:14 53 minutes, 14 seconds substantial. Uh which is why I was just trying to understand if we had you know good projects in the pipeline. 53:20 53 minutes, 20 seconds Yeah. Yeah. But see it is dependent on so now January, February, March is a good time to understand what customers will buy in the current calendar year 53:29 53 minutes, 29 seconds and that's what will get projected in the numbers and uh you know that's how every year it 53:37 53 minutes, 37 seconds works. So that's why we could give a guidance last year also that this is what looks got sir. Just last question in quarter 53:46 53 minutes, 46 seconds three uh you know versus the reported margins um you did allude to some initial OPEX that we booked for Atali uh 53:55 53 minutes, 55 seconds maybe for the Zanthine plant also maybe some cost would have come in so um any cost you know which is upfronted in quarter 3 for some of these new 54:02 54 minutes, 2 seconds expansions if you could clarify how much that is so we have some sense on the base of margins excluding new expansions 54:10 54 minutes, 10 seconds I think we may not have that break up so probably we can get you that breakup Okay. Okay. Thank you. 54:19 54 minutes, 19 seconds Thank you. Our next question comes from the line of Deep Gandhi from I thought PMS. Please go ahead. Yeah. Hi sir. Am I audible? 54:28 54 minutes, 28 seconds Yes. 54:29 54 minutes, 29 seconds Yeah. So first question is on the CDMO side. So as you have indicated in the past that you've been trying to increase wallet share and even in this call you 54:37 54 minutes, 37 seconds made a comment that some of the new commercial products are going to be significantly larger in the pipeline. So can you I mean broadly help us explain 54:44 54 minutes, 44 seconds that in in last two three years how the wallet share has improved with the innovator partners if you can try to quantify that. 54:53 54 minutes, 53 seconds Yeah, I think uh uh see we we have good uh 57 projects uh where there are 55:00 55 minutes multiple number of intermediates uh which are meaningfully adding the uh gross turnover of uh this business 55:08 55 minutes, 8 seconds and others are shaping up basically in future. 55:12 55 minutes, 12 seconds So that's how the current nature of the businesses 80% sales is uh anchored by these uh few projects seven eight 55:21 55 minutes, 21 seconds projects and the balance uh is by the other projects that we have. 55:29 55 minutes, 29 seconds Sure. But so can you I mean say quantify say for example can a single product do we have such products in the pipeline where a single product can be more than 55:37 55 minutes, 37 seconds 100 150 crores turn over. I mean that has happened and even much larger for other CDMO companies a single product scale. So do we have such products in 55:45 55 minutes, 45 seconds the pipeline which gives you the confidence also to reach the thousand crores turnover from CDMO? Uh is that a fair understanding and if you can help us quantify? 55:58 55 minutes, 58 seconds Uh yeah see we have uh uh got single poss which are in millions of dollars. 56:06 56 minutes, 6 seconds So uh in single digit millions of dollars so we are in that range of products you know. 56:18 56 minutes, 18 seconds Yeah. Yeah. And so uh the second question I have is so I mean in the past you've tried to explain that you are also trying to uh bypass you know work I 56:26 56 minutes, 26 seconds mean you are trying to directly work with the innovator companies in the CDM and bypassing the partners. So how has been that journey in last one one and a half years if you can give us some uh 56:35 56 minutes, 35 seconds explanation I mean are we are we seeing any new products where we are directly working with the innovators now instead of say working with the innovator partners. 56:45 56 minutes, 45 seconds See I think uh uh we are working with whoever wants to work with us. So we are agnostic you know we have a lot of 56:54 56 minutes, 54 seconds chemistry uh strength where we can do the regulatory starting material key starting material GMP intermediates and 57:00 57 minutes API. So with different partners we are working with different things and we have innovators also we have CDMO partners also and we have some uh 57:09 57 minutes, 9 seconds traders also uh not largely but I think smaller biotech companies also with whom we work on APIs as well. So, so it's a 57:18 57 minutes, 18 seconds mixed basket but uh there are attempt to Yeah. Yeah. there is no deliberate attempt to bypass uh any of the 57:27 57 minutes, 27 seconds uh CDMO partners uh because in the early phase of uh patent I think uh all the 57:34 57 minutes, 34 seconds innovators which uh work on these blockbusters have to have the supply chain secured in US and Europe only and 57:42 57 minutes, 42 seconds they have to work with those who don't have their own manufacturing capacity have to work with CDMO partners and uh 57:49 57 minutes, 49 seconds you know we don't have capabilities of doing this production in this geography. 57:53 57 minutes, 53 seconds So we have to work with the large CDM partners. 58:02 58 minutes, 2 seconds Sure. Answer this last question. This again coming back to the wallet share question. I mean if you can't quantify in terms of uh value but can you help us 58:10 58 minutes, 10 seconds understand are there any new products where you are doing almost say 60 70% of the intermediates for the innovator partner uh I mean are you taking wallet 58:18 58 minutes, 18 seconds share more in that sense is that a fair understanding in last one and a half years compared to what it was in the past if you can quantify that even that 58:26 58 minutes, 26 seconds will be helpful yeah yeah we have few projects where we have that kind of knowledge 58:33 58 minutes, 33 seconds 70 80% So you stick to one number 670 we may have. 58:39 58 minutes, 39 seconds Okay sure to thank you. 58:44 58 minutes, 44 seconds Thank you ladies and gentlemen. As there are no further questions from the participants I would now like to hand the conference over to the management for closing comments. 58:54 58 minutes, 54 seconds Hey I would like to thank all the participants for taking their time and joining the calls. Good evening. Thanks. 59:01 59 minutes, 1 second Thank you on behalf of Dutat Capital Markets Private Limited. That concludes this conference. Thank you for joining us.