Aarti Pharmalabs Limited — Q4 FY26

Aarti Pharmalabs Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=YHWKOtwgARk Published: 3 weeks ago

0:00 Ladies and gentlemen, good day and welcome to Arti Farmer Labs Limited Q4 FY26 earnings call hosted by Yes 0:09 9 seconds Securities Limited. Please note all participants are currently in listenonly mode. There will be an opportunity for you to ask questions following the 0:18 18 seconds conclusion of the management's opening remarks. Please note that this conference is being recorded. I now hand 0:25 25 seconds the conference over to Mr. Siddhad Jen from Yes Securities. Thank you and over to you sir. 0:33 33 seconds Hi, good evening everyone. I am Sedat Jen from Yes Security Securities Limited. It gives me immense pleasure to hold the Q4 and the FI26 RTI Pharma Labs 0:42 42 seconds Limited conference call. From the management team we have Mr. Rash Gogri, chairman, Mrs. Hal Gorri Gala, vice 0:50 50 seconds chairperson and managing director and Mr. Push Lakhani chief financial officer. Before we proceed with the call, I would like to mention that some 0:59 59 seconds of the statements made in today's call may be forward-looking in nature and may involve risks and uncertainties. For more details, kindly refer to the 1:07 1 minute, 7 seconds investor presentation and other filings that can be found on the company's website. Without further ado, I would like to hand over the call to Rashes sir 1:15 1 minute, 15 seconds for his opening remarks and then we can open the floor for Q&A. Thank you and over to you sir. 1:22 1 minute, 22 seconds Good evening everyone. I would like to welcome you to the AI Pharma Labs earning call covering the fourth quarter and the full financial year concluded in 1:31 1 minute, 31 seconds March 2026. I appreciate your participation today. I'll start with a highle review of our financial health followed by an update on our key 1:40 1 minute, 40 seconds business development and brief look at our growth outlook for the coming quarters. Let me start with the summary 1:47 1 minute, 47 seconds of our standalone financial for Q4 FY26 and full financial year FY 2526. 1:54 1 minute, 54 seconds The revenue was 580 cr for Q4 which was 530 crores a year back an increase of 9% 2:02 2 minutes, 2 seconds YI on the on a fullear basis FI26 revenue came in at rupees 1798 cr versus rupes 1771 cr in FI25. 2:14 2 minutes, 14 seconds The AITA was rupes 134 cr as compared to rupees 141 cr in the corresponding period of the previous year for the Q4. 2:25 2 minutes, 25 seconds For the full year FI26, we achieved the annual AITA of rupees 406 cr versus rupes 428 crores a year 2:32 2 minutes, 32 seconds back. The profit after tax for Q4 FI26 was rupees 62 crores as compared to rups 2:39 2 minutes, 39 seconds 89 crores a year back. And for the full year FI26 the profit after tax stood at rupees 176 cr versus rups 257 crores in fi25. 2:50 2 minutes, 50 seconds It is noteworthy to mention that profit and loss account for the financial year FI26 there was a net for an exchange loss of rupes 33 crores. I am pleased to 2:59 2 minutes, 59 seconds inform you that the board has declared a final dividend of rupees 2 per share and this brings the total dividend of FI26 to rupees 3 rupees 50 pesa per share. 3:08 3 minutes, 8 seconds Now let me present a few business highlights for each business segment. 3:12 3 minutes, 12 seconds The zenthine derivative segment recorded the highest ever quarterly revenue and contributed to 43% of our turnover in Q4 3:19 3 minutes, 19 seconds FI26. The volume split was 74% beverages customers and 26% other. In terms of geographical split, the export sales was 3:28 3 minutes, 28 seconds 63% and rest 37% was local sales. The API and intermediate business sued at 28% of the turnover. The sub segment 3:37 3 minutes, 37 seconds wise breakup is uh 53% regulated market, 30% RO and 17% non-reg market. Looking 3:44 3 minutes, 44 seconds for ahead to FY27, we anticipate Yi growth for this business. However, it is important to 3:51 3 minutes, 51 seconds recognize that persistent competitive pressure and the market headwinds affecting our product portfolio. The third segment CDMO CMO has contributed 3:59 3 minutes, 59 seconds to 29% revenue in this quarter. This segment also locked the highest ever quarterly 4:06 4 minutes, 6 seconds revenue of rupes 155 cr as of FY26 and we are working with 21 customers and the 4:13 4 minutes, 13 seconds number of active projects is 54 out of which 35 projects are in the commercial stage and 19 are under different stages 4:19 4 minutes, 19 seconds of development both at customer ends for the full year FY26 the CDMO CMO 4:27 4 minutes, 27 seconds segment has shown a robust revenue growth of 32% y nearly all of our revenue came from phase three molecule 4:35 4 minutes, 35 seconds phase three and commercial molecule reiterating a clear focus on late phase projects. 4:41 4 minutes, 41 seconds The impact of ongoing war geopolitical tension in West Asia has caused significant raw metal shocks including logistics hurdle and rising energy 4:50 4 minutes, 50 seconds costs. This inflationary pressures have strained profitability and supply chain operations particularly in the 4:57 4 minutes, 57 seconds intermediate segment where competitive pricing makes cost passing difficult. 5:04 5 minutes, 4 seconds However, our two other business units have reasonably been able to pass cost hike in our customer pricing. Let me now 5:13 5 minutes, 13 seconds discuss the updates on the expansion projects. We have invested approximately 400 cr capital in uh during the 5:20 5 minutes, 20 seconds financial year 26 and we plan to maintain a similar level of spending for the FY27. 5:26 5 minutes, 26 seconds The budget includes ongoing zenthine expansion debottlenecking at Tarabu unit 4 and a possible new production block at Hertali. 5:37 5 minutes, 37 seconds Atali is now largely past uh startup issues and which were encountered during the ramp up phase or ramp up of phase 5:44 5 minutes, 44 seconds one with the corrective actions majorly in place. We are go progressing well with the production scale up and phase 5:51 5 minutes, 51 seconds one is likely to become completely operational by the end of this current quarter. Having cleared the customer audits, the site is well positioned to 5:58 5 minutes, 58 seconds support CDMO and intermediate production in coming months. 6:02 6 minutes, 2 seconds The phase one of atal which comprised of 440 kl of reactor capacity. It is a multi-purpose block. Given the current 6:09 6 minutes, 9 seconds visibility within the CDMO segment, we are assessing to put up a dedicated manufacturing block tailored to a specific projects 6:19 6 minutes, 19 seconds tailored to specific projects. These dedicated asset offer superior operational efficiency and require lower capex. Currently we are in primary stage design and planning stage of this block. 6:32 6 minutes, 32 seconds and the completion timeline could be expected 12 months from the construction commencement. 6:39 6 minutes, 39 seconds Being a brownfield project, the zanthin derivatives expansion is progressing as planned with current capacity being 6:46 6 minutes, 46 seconds 6,000 metric ton perom and the incremental capacity will be available for production at the end of the current quarter and the ramp up to 9,000 metric 6:55 6 minutes, 55 seconds t perm in next few quarters gradually will happen. Recently the steroid block at taro unit 4 has undergone the 7:03 7 minutes, 3 seconds debottling linking resulting in capacity increase by about one/ird capacity of existing capacity. Similarly there are 7:10 7 minutes, 10 seconds few more brownfield expansion initiative plan at our taboo unit for USFD approved API facility in the financial year 27 to 7:19 7 minutes, 19 seconds increase the capacity of anti-cancer and other blocks. We have decided to uh invest in R&D of tides that is peptides 7:27 7 minutes, 27 seconds and olonucleotides and this investment uh done in new R&D technologies will yield immed will not yield immediate 7:35 7 minutes, 35 seconds results but has a good potential in the future and we would like to explore this uh newer technologies looking forward. 7:44 7 minutes, 44 seconds We are confident that our recent investments and expanded capa capacities will drive significant momentum across 7:52 7 minutes, 52 seconds our businesses. Based on current project visibility and the operational ramp up, we are targeting 15 to 18% growth in 7:59 7 minutes, 59 seconds both revenue and AITA for next three four years. For immediate FY 8:06 8 minutes, 6 seconds 27, we expect the CDMO CMO business to lead the growth with a projected sales growth of 40 to 50% 8:12 8 minutes, 12 seconds perom. Moving forward, we remain focused on driving operational rigor, expanding the market reach, and investing in the 8:20 8 minutes, 20 seconds talent and technology essential for to our long-term success. The moderator may now open the forum for Q&A session. 8:28 8 minutes, 28 seconds Thank you. Thank you so much. 8:33 8 minutes, 33 seconds Ladies and gentlemen, we will now begin with the question and answer session. 8:37 8 minutes, 37 seconds Anyone who wishes to ask a question may click on the raise and icon from the participants tab on your screen. 8:44 8 minutes, 44 seconds We request participants to restrict to two questions only and then return to the queue for more questions. To rejoin 8:52 8 minutes, 52 seconds the queue, you may click on the raise and icon again. 8:56 8 minutes, 56 seconds We'll wait for a few minutes until the question queue assembles. 9:02 9 minutes, 2 seconds We have our first question coming in from the line of Ankit Gupta of Bamboo Capital. 9:09 9 minutes, 9 seconds Ankit please go ahead with your question now. Yeah. Uh am I audible? Yes please. 9:17 9 minutes, 17 seconds Yeah. Uh thanks for the opportunity sir. 9:19 9 minutes, 19 seconds Sir on uh the few questions on the CDMO side itself. So if you can elaborate on this dedicated blog that you are uh planning for the CDMO project at Atali. 9:30 9 minutes, 30 seconds So is it for uh the molecule which has recently got approval for hot hot flashes or is it for uh the molecule 9:39 9 minutes, 39 seconds which is under phase 3 and uh for lowering LDL or some other new molecule. 9:45 9 minutes, 45 seconds If you can elaborate a bit more on uh this project and upon completion what can be the revenue potential from this 9:54 9 minutes, 54 seconds uh uh from this new block and when do you expect to reach that? 9:58 9 minutes, 58 seconds See, we are exploring uh putting up these uh dedicated uh block uh which can manufacture several of these potential 10:08 10 minutes, 8 seconds uh long-term projects for us and uh we are working on overall capa capacity and 10:15 10 minutes, 15 seconds working with the customers on what kind of uh visibility they are able to give us in the coming quarters and once we have some strong 10:23 10 minutes, 23 seconds understanding of that I think in the future quarter we'll let you know but I think as As you know we have very strong pipeline of these products and these 10:31 10 minutes, 31 seconds products can have a very good revenue in future and that's how you know we have projected line of sight of uh close to 10:38 10 minutes, 38 seconds $100 million in u you know CDMMO segment going forward. 10:44 10 minutes, 44 seconds Sure. And what can be the potential from this block and this uh uh molecule when 10:52 10 minutes, 52 seconds we start operations from them from this new block? I think we are assessing all the uh uh you know possible options and 11:02 11 minutes, 2 seconds working with the customer over uh their demand basis which uh I think of course the currently is capable of 11:09 11 minutes, 9 seconds manufacturing it in multi-purpose block but in future I think dedicated block would be prudent so that we keep on 11:16 11 minutes, 16 seconds freeing our uh multi-purpose capacity for the newer projects. So that is how we are going to work and all the projects which enter into this 11:23 11 minutes, 23 seconds commercial phase post uh phase three or launch and the customers have higher visibility those products will move to 11:31 11 minutes, 31 seconds dedicated block where we have five to 10 year visibility of these projects. So we will start with uh this kind of approach 11:39 11 minutes, 39 seconds uh and that is what all the uh larger CDMO also do and that can give us uh uh 11:48 11 minutes, 48 seconds you know higher visibility. I think depending on how we configure this uh you know it can have potential of uh uh 11:55 11 minutes, 55 seconds close to 250 to 300 cr uh top line also single block uh yeah 12:02 12 minutes, 2 seconds sure sure and sir on our overall guidance for the CDMO if you look at our FI26 performance we also had some 12:10 12 minutes, 10 seconds spillover of CDMO revenue from Q4 FI25 and you know like with Atali commencing 12:17 12 minutes, 17 seconds operations in a full-fledged by by June 26 audits been completed. So shouldn't we expect you know higher growth in FI27 12:25 12 minutes, 25 seconds given our lower base in FI26 and overall in this segment in the CDMO segment with 12:32 12 minutes, 32 seconds this with starting dedicated blogs are we on track to reach 1,000 cr revenue 12:39 12 minutes, 39 seconds from the CDMO segment in FI28 or max FI 29 as you have been highlighting in the earlier calls. 12:46 12 minutes, 46 seconds Yeah, basically the traction is to reach this goal as soon as possible. Of course, it depends on the customer 12:53 12 minutes, 53 seconds uh you know projections and the how the products uh get launched. uh we have some visibility on approved products but 13:00 13 minutes I think there are few products which are still uh you know going to get this approval and that's why we don't have a firm number how we will reach uh and 13:09 13 minutes, 9 seconds when we will reach uh this number of 100 million but that number is there and we are pretty sure that we will reach that 13:17 13 minutes, 17 seconds number uh going forward and uh I think uh that's what I can share with you to 13:25 13 minutes, 25 seconds now thank Just one last question on the API segment before I come back in the chat. 13:30 13 minutes, 30 seconds So the API segment last quarter last year we saw significant uh uh degrowth. 13:36 13 minutes, 36 seconds you know you had highlighted about fries erosion and inventory restocking which was happening for some of our you know newly launched products in FI25 and we 13:45 13 minutes, 45 seconds have some decent launches in planned in the oncology side in FI27 and uh you did 13:52 13 minutes, 52 seconds highlight about growth in the segment uh uh in FI27. So what kind of growth are we looking in the API segment and if you 14:00 14 minutes can also elaborate a bit more on the launches planned for FI27 and FI 28. 14:06 14 minutes, 6 seconds Yeah. So for FYI27 I think uh uh as as you rightly mentioned that FI26 was a soft year and of course it was marred by 14:15 14 minutes, 15 seconds uh inventory issues and the issues at our customers end and I think we are looking at uh uh you know growth in FY27 14:24 14 minutes, 24 seconds going forward because uh you know we actually degrone in last quarter uh last year over earlier years. So I think we 14:32 14 minutes, 32 seconds will be definitely able to surpass that number and further grow our uh API business beyond uh FI25 number. So 14:40 14 minutes, 40 seconds that's what uh we are looking at. So it should be around in that. Yeah. 14:46 14 minutes, 46 seconds So so we'll be surpassing the FI25 numbers that we did or uh like looking at just No, no, we will be able to surpass the FI25 numbers of API intermediates. Yeah. 14:58 14 minutes, 58 seconds So we were around 770 K. We should be able to surpass that in FI27. 15:04 15 minutes, 4 seconds I think it was 700. Uh that is what the split I have. So Okay. 15:10 15 minutes, 10 seconds Here we did 600. So Sure. Sure. Okay. Okay. Thank you. We sure. So I'll come back in the queue. 15:17 15 minutes, 17 seconds Thank you. We'll take a next question from Meit Katraia of Nveshai. 15:24 15 minutes, 24 seconds Me uh you can unmute your microphone. 15:29 15 minutes, 29 seconds Uh yeah. Hi, good evening sir. Uh so my question is on uh let's say our guidance 15:35 15 minutes, 35 seconds is of is of 15 to 18% right sir. Um but say yeah if I reconcile the iita the 15:42 15 minutes, 42 seconds math right so you are guiding your cd vertical will grow 40 50% next year then thing is also ramping up so so can we 15:50 15 minutes, 50 seconds expect a much higher growth in f27. I'm not asking for a specific guidance uh just directionally if you can share anything on this. 16:00 16 minutes So I think uh uh you know we don't want to give a pointed guidance for uh any one uh this year. So we are giving a 16:09 16 minutes, 9 seconds general guidance of 15 to 18% because uh the projects keep on shifting by quarter and that can really hamper our numbers. 16:17 16 minutes, 17 seconds Mhm. at all and uh you know as you rightly mentioned that there are a lot of uh different plants which are going to do the ramp up and those costs we 16:26 16 minutes, 26 seconds will have to absorb whereas the production ramp up will have take some more time so I think uh they have to be 16:33 16 minutes, 33 seconds little patient about uh overall uh you know how the profits will ramp up uh in 16:39 16 minutes, 39 seconds future so that's what I have comment got it sir uh sir another question from 16:47 16 minutes, 47 seconds the zanthin part right crude prices have gone up right so uh just want to understand are we able to pass on the prices how we is there any lag uh second 16:56 16 minutes, 56 seconds is China is also removing the rebates right so pricing of the zen is zenthine is increasing so just want to understand 17:03 17 minutes, 3 seconds how much peak revenue we can do from zanthin as from new total capacity that is going to be live 17:13 17 minutes, 13 seconds uh yeah as uh you rightly mentioned uh you know The costs have gone up because of the Middle East conflict and we have 17:22 17 minutes, 22 seconds been pushing our customer for the price increase and we have had some success on on that and it is quite logical that uh 17:31 17 minutes, 31 seconds we cannot absorb the full cost of uh you know the Middle East conflict which for certain products was quite heavy and in 17:40 17 minutes, 40 seconds in terms of overall revenue uh you know we we feel that you know with these uh current uh new capacity 17:49 17 minutes, 49 seconds expansion it can be well beyond uh 1,000 crores uh from the Zenthin uh newly added 17:57 17 minutes, 57 seconds capacity and already whatever that we are doing and in this current quarter only you know we have been able to do close to 200 and uh you know uh you know 18:06 18 minutes, 6 seconds significant uh percentage of uh you know sales was have uh has happened in the 18:13 18 minutes, 13 seconds current quarter also. So 227 cr was what we did in the current. 18:18 18 minutes, 18 seconds Got it. Uh sir on the CDM position as compared to our peers the most of Indian CDM was works on maybe early phase 18:27 18 minutes, 27 seconds molecules also right. So our mo our uh model is little different we work on a more commercial stage molecules right. 18:34 18 minutes, 34 seconds So maybe I will just some understand want to have some understanding let's say how does the margin profile differ 18:42 18 minutes, 42 seconds as compared to our CDMO peers and uh and their revenue is lumpy right quite lumpy because they have only two three 18:50 18 minutes, 50 seconds commercial CDMOs and our structurally good and less less rumpy. So just want to have your view on uh lumpiness plus margin profile as compared to our peers. 19:02 19 minutes, 2 seconds Yeah, basically uh you know RT Pharma and entire RT group is uh having a focus on chemical manufacturing and pharma 19:10 19 minutes, 10 seconds manufacturing. So our genuses is manufacturing and uh that's what we specialize on and 19:17 19 minutes, 17 seconds that's where we get the core value. Of course you know now we have R&D centers which can do much complex uh R&D also 19:25 19 minutes, 25 seconds and as uh you know I mentioned in the opening remarks uh uh during my speech also that we are going to enter into 19:33 19 minutes, 33 seconds this newly uh you know the peptides and oligoucleotides linkers this kind of chemistry uh going forward. So that's 19:41 19 minutes, 41 seconds where we will also try to do early phase work uh uh with our customers. Currently 19:48 19 minutes, 48 seconds you know there was a lot of traction towards moving away from China because of the US customers wanting u the 19:56 19 minutes, 56 seconds products to be coming from a differentiated geography and that's where we found a lot of opportunities and that's how we could get lot of uh 20:06 20 minutes, 6 seconds projects uh from our customers. So that's where you know we have been 20:14 20 minutes, 14 seconds concentrating till now but we are open to doing uh work uh uh you know even at early phases and we have certain 20:22 20 minutes, 22 seconds projects which are also bit of early phase or uh you know phase one two 20:30 20 minutes, 30 seconds moving to three kind of projects as well you know. 20:34 20 minutes, 34 seconds Got it. Uh sir can I have a follow up on this? Uh mit I'm really sorry. Would you like to rejoin the queue? We have other participants as well. 20:41 20 minutes, 41 seconds Sure. Sure. All right. Done sir. Thank you. 20:42 20 minutes, 42 seconds Thank you. Thank you. M. Uh we have a next question coming in from Yeshi of Unifi. 20:51 20 minutes, 51 seconds Yes. Please go ahead with your question now. 21:00 21 minutes Yes. Yes. Please go ahead. 21:04 21 minutes, 4 seconds So regarding the Zant we have done a turn off around 2:30 to this quarter. 21:11 21 minutes, 11 seconds Rash sir hi can you hear the question? 21:13 21 minutes, 13 seconds No no no can you speak closer to the microphone please? Am I audible now? 21:20 21 minutes, 20 seconds Yes yes yes please. 21:23 21 minutes, 23 seconds So in 19 business we have done around 227 crores turn over in this quarter. So whether it was more of volume led or 21:32 21 minutes, 32 seconds price led since the prices have gone up for renting in last uh 2 3 months and uh uh just along with that what has 21:41 21 minutes, 41 seconds been the capacity utilization for renting this quarter? 21:48 21 minutes, 48 seconds See currently we are operating 6,000 meg per nm capacity before the current new block comes into the uh operations and 21:55 21 minutes, 55 seconds we are fully utilizing this capacity and current I think uh overall sales were led by both I think uh quantity as well 22:04 22 minutes, 4 seconds as the uh overall uh rate changes that we affected in this product. 22:14 22 minutes, 14 seconds Another thing was uh uh regarding we send it we we will surpass the FI25 numbers for API intermediate. So which 22:23 22 minutes, 23 seconds product gives us the confidence that we'll be able to surpass it any uh product pipeline specifically. 22:32 22 minutes, 32 seconds See uh we we operate uh in steroid space where we have recently debottlenecked our uh capacity by almost uh 30%. So 22:41 22 minutes, 41 seconds that will also show some growth. We also have certain products which are uh getting expired in this financial year 22:49 22 minutes, 49 seconds uh in the general capital category as well as the uh anti-cancer capital you know and these kind of products and 22:57 22 minutes, 57 seconds certain products have been launched by our customers in US and Europe market. 23:02 23 minutes, 2 seconds So all these uh will give you know uh give us uh uh you know higher sales than the last year. 23:14 23 minutes, 14 seconds Last thing uh on the Atali project uh which have just been commercialized can you just quantify the optics hit which we have got? 23:24 23 minutes, 24 seconds I think we are not sharing this uh granular details now. 23:29 23 minutes, 29 seconds Okay. uh and there there are not any one-offs right uh in the opex it's all basically uh project cost of the atali 23:38 23 minutes, 38 seconds project being commercialized yeah yeah yeah there's no one off in in from the atali plant 23:45 23 minutes, 45 seconds and have you got approval for USDA and EUGMP forali plant no atali plant is going to supply the 23:53 23 minutes, 53 seconds intermediates so it is not going getting any uh inspection for the FDA but I think we 24:01 24 minutes, 1 second have started uh doing the work for innovators there for which you know we have got several innovators come and 24:09 24 minutes, 9 seconds approve our sign I'll join back 24:16 24 minutes, 16 seconds thank you so much requesting all participants to restrict to two questions only and then return to 24:23 24 minutes, 23 seconds the queue for more questions we're taking a next question from T Manish of Chrysler Limited. 24:32 24 minutes, 32 seconds Manish, please unmute your microphone so that you can ask a question now. 24:40 24 minutes, 40 seconds Yes, please go ahead. Manish, we are unable to hear you. 24:47 24 minutes, 47 seconds Please go ahead with your question. 24:50 24 minutes, 50 seconds Yeah. Uh am I audible now? Uh there is a bit of disturbance that we can hear. Can you try it one more time? 25:00 25 minutes Uh is it now clear? No, no. 25:03 25 minutes, 3 seconds Sorry, Manish. We are not clearly able to hear you. Mr. 25:10 25 minutes, 10 seconds Do you want to try it one more time? 25:12 25 minutes, 12 seconds Yeah. Uh yes, we can. Yes, we can hear you. Please go. 25:18 25 minutes, 18 seconds The opportunity just I want to know since the margins margins have been already uh contracted 25:25 25 minutes, 25 seconds in this quarter. So uh is it largely because of the rise in raw material prices and the logistical issues due to 25:33 25 minutes, 33 seconds the west Asia crisis or uh anything else and if it is due to that uh how are you 25:41 25 minutes, 41 seconds seeing the things for the Q1 of fiscal 27 because only three months have 25:51 25 minutes, 51 seconds yeah uh I think uh on the overall uh uh you know expenses uh have been I think 25:59 25 minutes, 59 seconds uh nearly similar to what we have got in previous year you want to answer. 26:05 26 minutes, 5 seconds Yeah. No see the quarter and quarter the margins ITA margins have remained uh you know almost flattish. So are you asking compared to the last year? 26:15 26 minutes, 15 seconds Yes. 26:16 26 minutes, 16 seconds Yeah. So last year obviously you know the uh you know we have added a few facilities so those will take time to 26:23 26 minutes, 23 seconds ramp up but then the cost is we are basically you know incurring at full capacity. Uh so that's where you know 26:31 26 minutes, 31 seconds the cost has gone up a little compared to last year and that's what is uh impacting the margin. Yeah. And on this 26:38 26 minutes, 38 seconds uh West Asia I think uh this uh you mentioned about the cost increase 26:46 26 minutes, 46 seconds also or no margins. Margins margins. Yeah. Yeah. Yeah. Okay. 26:54 26 minutes, 54 seconds Anything else you would like to have clarification? 27:02 27 minutes, 2 seconds Sorry Manisha we are still not able to hear you clearly. Uh is it clear now? Okay. Yes, please go ahead. 27:09 27 minutes, 9 seconds Yeah. So the rising cost are you planning for any pass through of these costs to the your uh procure buyers for 27:18 27 minutes, 18 seconds the API and intermediates or for the CDMO players because the cost increase is uh significant. 27:27 27 minutes, 27 seconds Yeah. 27:28 27 minutes, 28 seconds Yeah. As I mentioned in the uh uh my speech already we are able to do some 27:36 27 minutes, 36 seconds pass on in CTMO as well as the zanthin segment in API segment uh you know on the already uh orders which we have on 27:45 27 minutes, 45 seconds hand. It is difficult to change those orders because these are all high value drugs but I think in the future we will try to get some increase uh going 27:54 27 minutes, 54 seconds forward. Of course, it depends on the competitive scenario for each and every product. But there are few strong products which we have where we can get uh price increase as soon. 28:06 28 minutes, 6 seconds Oh yeah, thank you. 28:11 28 minutes, 11 seconds Thank you. We'll take our next question from Rahul Jen of Credence Wealth. 28:19 28 minutes, 19 seconds Rahul, please go ahead. Am I audible? 28:21 28 minutes, 21 seconds Yes. Yes, please go ahead. First of all, since the CFO is also here, uh there is some confusion on the numbers which have 28:28 28 minutes, 28 seconds been spoken in the current call by you and also based on the numbers which are there in the PPD. So if I take the PPT 28:37 28 minutes, 37 seconds itself, the standalone numbers which are mentioned in the PPT and the percentages and we have always said that this percentages are to be applied on the 28:46 28 minutes, 46 seconds standalone revenues. So based on that sir the FI25 API number is 772 crores 28:53 28 minutes, 53 seconds which has come down to 650 crores roughly 647 to be precise. So when to a previous participant you said we will 29:00 29 minutes come back to our FI25 revenue FI27 in API intermediates are we talking about going back from 647 to somewhere around 29:09 29 minutes, 9 seconds 770 or you mentioned 700. So a bit confused on that number one. Another confusion also is on the uh CDMO and 29:19 29 minutes, 19 seconds Zanthin side. Again based on the PPT proportions and the numbers given the Zenthin quarter 4 revenue is roughly 29:28 29 minutes, 28 seconds around 244 crores and the CDMO revenue is about 169 crores. For the full year it is 296 29:36 29 minutes, 36 seconds crores. The PPT mentions 276 crores and 155 crores for CDMO. And just now I think you mentioned about zenthin being 29:45 29 minutes, 45 seconds 227. So if you can first clarify this or you know there is some confusion on this numbers sir. 29:52 29 minutes, 52 seconds Yeah I think there are some uh undistributable uh certain sales which is some trading 30:01 30 minutes, 1 second activity sales or some some number which gets knocked off. So I think uh overall 30:07 30 minutes, 7 seconds uh uh I think you are correct. So uh the CDMO sales for this quart is 155 30:15 30 minutes, 15 seconds and uh for the entire year it is 276 crores for your clarification and in uh 30:23 30 minutes, 23 seconds zanthin sales for this uh uh financial year is 792 crores and uh for this 30:30 30 minutes, 30 seconds quarter is 227 crores. So please uh note these numbers. Yeah. 30:37 30 minutes, 37 seconds So then can we get that what is the kind of uh trading turnover or if we said around 50 cr which which you know 30:45 30 minutes, 45 seconds changes this percentage but that's not very significant uh but uh that uh has an impact of few crores here and there. 30:53 30 minutes, 53 seconds Mhm. 30:56 30 minutes, 56 seconds Okay. So just to understand sir uh you know we mentioned that 1,000 crores of zenthin revenues we can do in the 31:04 31 minutes, 4 seconds current year FI27 and we have already spoken about 40 45% growth on the revenues in CDMMO 31:12 31 minutes, 12 seconds and also with regards to API you mentioned so if I try to sum these numbers up then and also based on the 31:19 31 minutes, 19 seconds capeex which we have done in last 2 three years do we feel that the guidance which we have given both for revenue and the abid 31:27 31 minutes, 27 seconds is a more conservative number as far as FI27 is concerned. 31:32 31 minutes, 32 seconds See first of all my guidance is for 3 to four years. So FI27 numbers basically what happens is annual 31:40 31 minutes, 40 seconds number pinpointing becomes difficult because of the CDMO CMO nature and the kind of approvals which our customers 31:49 31 minutes, 49 seconds will get. So I think depending on that the revenue can move from one quarter to other or half year to second half year 31:57 31 minutes, 57 seconds you know. So that's why we are uh we have decided to give longerterm guidance. I think uh looking at the 32:05 32 minutes, 5 seconds current scenario it is possible on the topline growth definitely you know we will be able to grow the top line. Of 32:13 32 minutes, 13 seconds course on the AITA I think we have to look at overall West Asia crisis and how the uh you know 32:21 32 minutes, 21 seconds war situation uh you know moves ahead and how the things normalize in future and what will 32:29 32 minutes, 29 seconds be the rupee going forward. So all these factors uh have a lot of bearing on 32:36 32 minutes, 36 seconds overall epitita. So we we will have to wait and see what happens. 32:42 32 minutes, 42 seconds Thanks sir. So sorry uh Rahul would you please rejoin the queue? We have other participants waiting please. 32:50 32 minutes, 50 seconds Okay. Yeah sure. Thank you. 32:55 32 minutes, 55 seconds We have our next question coming in from Dwanil Desai of Turtle Capital. 33:02 33 minutes, 2 seconds Danil please go ahead. Yes. Please go ahead. Yeah. You're able to hear me? Yes please. 33:10 33 minutes, 10 seconds Yeah. Uh so uh uh per uh two questions uh so uh you know if we look at historically uh you know in last three 33:19 33 minutes, 19 seconds years we have spent 1300,400 odd crores of capex u and uh you know as you 33:25 33 minutes, 25 seconds mentioned fi27 including fi27 and you know we are kind of catching up in terms of ramp up it will take its own uh sweet 33:34 33 minutes, 34 seconds time. So are we should we look at our company going forward from next year onwards capital intensity coming down 33:42 33 minutes, 42 seconds and uh more uh you know uh kind of ramp up revenue uh catching up and hence uh you know a bit to pat conversion getting 33:50 33 minutes, 50 seconds better is this how we should think or we'll continue to invest this kind of capital uh you know going forward 33:57 33 minutes, 57 seconds see uh uh I think uh last uh year we spent 400 cr and year before that we spent 200 100 crores approximately. Huh? 34:06 34 minutes, 6 seconds No, no. Last last year we spent 200 cr. So total 600 crores spend. 34:11 34 minutes, 11 seconds This year we plan to spend another uh tentatively 400 crores uh going forward. 34:17 34 minutes, 17 seconds And of course these are for the projects whereas you know this entire Atali capex 34:23 34 minutes, 23 seconds itself was close to 450 crores and also the capex for the zanthine expansion was also. So these two were very large 34:31 34 minutes, 31 seconds capexes uh you know which we had to uh of course Atitali being green field you know we had to do lot of first time 34:39 34 minutes, 39 seconds capex now looking at newer blocks which we which can double the capacity will be 34:45 34 minutes, 45 seconds at much lower cost going forward. So we have to uh bite in the first round of higher capex in Atali. 34:55 34 minutes, 55 seconds uh as far as uh other capexes are concerned you know we are trying to do more brownfield uh where we did uh you 35:02 35 minutes, 2 seconds know expansion of our API facility in steroid block expansion and anticenser block coming uh in future I think this 35:11 35 minutes, 11 seconds is current year capacity expansion that is planned uh uh you know we have earlier mentioned on our call that you 35:19 35 minutes, 19 seconds know we want to do every year one block at a talally uh going forward forward and we will stick to that you know as 35:26 35 minutes, 26 seconds our projects uh move to commercialization phase you know we will have more and more uh uh manufacturing 35:34 35 minutes, 34 seconds will move to Atali in future and I think overall uh to meet our uh uh you know 35:41 35 minutes, 41 seconds long-term revenue growth of this 15 18% uh you know we have to grow a manufacturing footprint and that's for which you know we have to do the uh 35:51 35 minutes, 51 seconds availability of volumes uh beforehand and and we are doing appropriately expansion to manage the overall capacity. 36:01 36 minutes, 1 second Got it. So sir, my question is that I understand the need to expand. Uh but I'm saying because most of this expansion going forward will be 36:10 36 minutes, 10 seconds brownfield generally the ramp up is faster and the you know the capeex outlay is low lower so uh you know the depreciation amotization is much lower. 36:19 36 minutes, 19 seconds So is that how the uh equation will pan out from FI28 onwards? Uh is that how we should look at it? 36:27 36 minutes, 27 seconds Yeah. Yeah. From FI28 onwards that will that is what will happen. But we had to do more capex green field in this year 36:34 36 minutes, 34 seconds and of capacity of Zentin also required some green field and some brown field. 36:39 36 minutes, 39 seconds So which we had to Got it. Got it. Got it. So the cap syntheticity will come down from FI28. 36:46 36 minutes, 46 seconds Yeah. Yeah. And for second question uh uh so we have guided for next 3 four years 15 to 18% revenue 15 to 18% margin 36:56 36 minutes, 56 seconds uh but in the previous commentary we have talked about CDMO being the highest margin followed by Zenthin followed by 37:03 37 minutes, 3 seconds API and if I look at the capexes that we have done the large ones that we have done are mainly on the CDMO and Zenthin 37:11 37 minutes, 11 seconds side. So of course the proportion of revenue from Zenthin and CDMO will go up in the overall pie. So ideally that should lead to margin improvement and 37:20 37 minutes, 20 seconds hence uh you know much better AITA growth than revenue growth. Uh I mean that's on a conceptual level. So what am 37:27 37 minutes, 27 seconds I missing here? So in Zanthin currently we are trying to capture all the uh uh 37:35 37 minutes, 35 seconds you know marquee customers as our uh you know higher capacities will come you know we will have to go after more spot 37:43 37 minutes, 43 seconds market where of course you know we have to fight with our competitor and get that volume. So that is where uh you know 37:52 37 minutes, 52 seconds definitely the topline growth will come but overall I think AITA growth uh will not catch up to that level. I think in 38:00 38 minutes CDMO, CMO also as we commercially ramp up the products, I think the volume can grow faster, value can grow faster but 38:08 38 minutes, 8 seconds of course you know we have to get lower margin expectation as we increase our sales for the commercialized products 38:17 38 minutes, 17 seconds and of course you know slowly I think once we catch up on this manufacturing and commercializing the benefits of that's why we are doing uh uh you know 38:26 38 minutes, 26 seconds looking at uh doing uh you know for purpose purpose uh expansion for these kind of projects so that the plants are 38:34 38 minutes, 34 seconds designed for what they are uh uh manufacturing. 38:38 38 minutes, 38 seconds So which can get more yields more recycling of solvents and stuff like that in future and then the cost 38:45 38 minutes, 45 seconds efficiencies can come in in future. So that is to be seen but overall that's 38:52 38 minutes, 52 seconds where we are in in terms of uh AITA and the top uh uh and the revenue. 38:58 38 minutes, 58 seconds Got it. But it's very clear. Uh thank you. I'll come back in the queue. Thank you so much. 39:05 39 minutes, 5 seconds We'll take our next question from Pri Jen of Nvesha Investments. 39:13 39 minutes, 13 seconds Please unmute your microphone. Prior am I? 39:22 39 minutes, 22 seconds Yes. Yes. Please go ahead. 39:24 39 minutes, 24 seconds My question is on the Atali plant. So sir Atali block I want to know the block level economics of Atali plant and now 39:33 39 minutes, 33 seconds the common now that the common utilities are in place what is the incremental aex and timeline for additional block atali 39:42 39 minutes, 42 seconds we expect the asset terms to step up in sub phase earlier your guidance was 1 1.2x for attach I want to know that any 39:51 39 minutes, 51 seconds revision to that or are you intact on that high from I think for the dedicated blocks we 39:59 39 minutes, 59 seconds anticipate uh you know capex turn of uh 1.5 to 2x uh of course it depends on the number of stages that we are doing you 40:08 40 minutes, 8 seconds know if we are doing quite a bit of stages then this uh capex turn can reduce but the margins can grow so I 40:16 40 minutes, 16 seconds think for the near future Whatever the current visibility that we have, we are looking at 1.5 to 2x on the capex in uh 40:24 40 minutes, 24 seconds you know turnar around answer my another question on impact on 40:33 40 minutes, 33 seconds impact of RN cost on margin first for sulfur as RN and second RM cost part two 40:41 40 minutes, 41 seconds logistics cost what margin impact uh can you quantify this in value term value terms 40:50 40 minutes, 50 seconds No. So overall I think uh as you rightly mentioned in zenthine we have several raw materials which are ura and methanol 40:59 40 minutes, 59 seconds and methanol based derivatives. So all these prices have gone up by 2x of whatever they were earlier and uh you 41:07 41 minutes, 7 seconds know in certain other raw motors of course the prices have also gone up by 30 40%. We are requesting our customers to take uh proportionate uh price 41:16 41 minutes, 16 seconds increase for this. Uh in case of API, I think uh largely the impact has been because as you know we are into high 41:25 41 minutes, 25 seconds value low volume API. I think largely the impact is on the uh solvents and uh 41:32 41 minutes, 32 seconds Arti Pharma has lot of solvent recycling capabilities. So you know that is being fully utilized. Even our Atali plant 41:40 41 minutes, 40 seconds also has you know solvent recycling facility. So wherever permissible as per GMP you know we try to recycle this 41:48 41 minutes, 48 seconds solvents so that this impact can be minimized but still I think this impact uh remains also of course the logistics 41:56 41 minutes, 56 seconds impact also remains. I think anywhere between I think 5% uh uh in the raw material we are seeing this overall 42:04 42 minutes, 4 seconds impact of solvents and other cost escalation five to seven and my last question is 42:12 42 minutes, 12 seconds and my last question is on your active CDMO customer for 21 for last five consecutive 42:20 42 minutes, 20 seconds quarter. I want to know that uh with other players they are shifting from China plus one value chain. So uh can 42:29 42 minutes, 29 seconds could you please help us understand are you in active engagement RFP stage with any new customers that simply haven't 42:36 42 minutes, 36 seconds translated to any commercial project yet and on the new business funnel what does your inquiry pipeline look like like today versus 12 months ago? 42:46 42 minutes, 46 seconds No, I think uh uh in uh year 2025, you know, we had overall slowdown 42:55 42 minutes, 55 seconds because of the global uncertainties and the tariffs, you know, how and where the manufacturing should happen. 43:05 43 minutes, 5 seconds I think that situation has stabilized a little bit and we are seeing some inquiries uh uh you know get more 43:12 43 minutes, 12 seconds inquiries getting generated now in case uh uh the number of customers which are 21 currently but of course we are 43:20 43 minutes, 20 seconds engaging with the same customers on the newer projects as well uh we are also engaging with more uh newer customer as 43:28 43 minutes, 28 seconds well I think in future we'll see this number grow in this current uh financial speaker. Thank you. 43:39 43 minutes, 39 seconds Thank you, Pri. 43:41 43 minutes, 41 seconds We'll take Yash SA of MIPL with his question. Now, am I audible? 43:51 43 minutes, 51 seconds Yes, please go ahead. 43:52 43 minutes, 52 seconds Uh sir, I just wanted to understand uh this quarter we saw slightly neutral performance in the intermediaries business because of uh the feed stock 44:00 44 minutes inflation that you mentioned. Just wanted to understand how has that evolved uh so far in Q1 or fiscal 27 given that those key raw materials are 44:08 44 minutes, 8 seconds still inflated. What kind of communication have you had with your clients about potentially at least passing on some of this expense this quarter or do we expect that for the 44:17 44 minutes, 17 seconds rest of this financial year performance in the intermediaries business to be kind of muted? 44:23 44 minutes, 23 seconds Yeah, I think as you rightly mentioned you know there was a lot of price increase due to uh you know middle east 44:30 44 minutes, 30 seconds crisis and uh for the orders which we had already uh on hand I think the customers have resisted giving the price 44:39 44 minutes, 39 seconds increase because these are all high value low volume projects that we have. 44:44 44 minutes, 44 seconds I think uh however they remain committed that for future you know they will be able to give us some increase uh in 44:53 44 minutes, 53 seconds future. Normally these projects uh uh on which you know we have these orders are campaigndriven. So we have once in uh uh 45:03 45 minutes, 3 seconds year or once in every two quarter order from this customer. So this is not a regular item. So you know we have to see 45:11 45 minutes, 11 seconds what will happen in the future and how the raw materal pricing will remain in future uh going forward and how much uh 45:19 45 minutes, 19 seconds price escalation that we can get from these existing customers. But however any new inquiry we are able to quote at 45:25 45 minutes, 25 seconds a revised uh cost basis where uh uh you know the new orders that we will acrewue 45:32 45 minutes, 32 seconds will be of little bit of uh improved pricing over last price. 45:39 45 minutes, 39 seconds Got it. Got it. Um lastly, just a book question, uh bookkeeping question from my side. Uh this quarter we saw that 33 45:46 45 minutes, 46 seconds CR one time Forex led uh a loss. Do we have any other forward contracts uh currently on our books that can potentially lead to a one-time hit like this in the in financial year 27? 45:58 45 minutes, 58 seconds I think everything has been accounted for uh uh going forward. I think we don't have anything on accounted which is beyond 6 8 months forward. 46:10 46 minutes, 10 seconds Yeah. 46:11 46 minutes, 11 seconds Yeah. Yeah. Of course loans. So basically you know Yes. this 33 crores 46:18 46 minutes, 18 seconds comprises of what the gain on the operations that is export minus imports. 46:23 46 minutes, 23 seconds Okay. So that is a gain of about 22 crores and 23 crores of this 30 33 46:30 46 minutes, 30 seconds crores is the you know foreign currency loss or national loss that I incur on my foreign currency loans. 46:40 46 minutes, 40 seconds Got it. This is not a cash loss right just to not cash. 46:43 46 minutes, 43 seconds No no all right. Okay that's it from Thank you so much. Thank you. 46:51 46 minutes, 51 seconds We'll take our next question from Shoubam Agarwal of Burman Capital. 46:57 46 minutes, 57 seconds Shoubam, please go ahead. We'll wait for the connection. 47:07 47 minutes, 7 seconds Yeah. Hi sir, thank you so much for the opportunity. Sir, I just wanted to understand that your opage costs have obviously gone up from uh by you know 47:15 47 minutes, 15 seconds 43% yearon year and about 13% quarter on quarter. uh I just you know wanted to understand what is the like largest 47:21 47 minutes, 21 seconds driver of this increase and uh should we like expect to uh the opposite cost to remain at this level going forward and 47:29 47 minutes, 29 seconds therefore your margins can come under pressure in FI27. 47:34 47 minutes, 34 seconds So basically uh you know we have uh opalized additional almost 440 capacity 47:43 47 minutes, 43 seconds at atali plus another 250 kl at our lease site. So combined coming on our 47:48 47 minutes, 48 seconds books almost 700 kl from the FI27 Q1. So which is a very large uh multi-purpose 47:56 47 minutes, 56 seconds capacity as against our earlier capacity of around 1,000K. So it's almost a 70% 48:04 48 minutes, 4 seconds increase uh which has happened from the previous year's numbers to FI26 number and going 48:12 48 minutes, 12 seconds forward also. So this increase and overall our manh hour uh you know which have been logged in uh over previous 48:20 48 minutes, 20 seconds year have also increased significantly almost uh 50 to 60% over and above the earlier year manh hour. So as we expand 48:29 48 minutes, 29 seconds our manufacturing footprint for this multi-purpose projects I think uh the costs are increasing and uh of course as 48:36 48 minutes, 36 seconds the ramp up happens you know that the revenue increase will also come in. 48:41 48 minutes, 41 seconds So you mentioned that uh your capacity increases have largely gone in Q1 as well. So like should we expect another 48:48 48 minutes, 48 seconds step jump in your operational cost from Q4 to Q1 F27? 48:55 48 minutes, 55 seconds Yeah. Yeah. I think not Q1 but I think from Q2 Q1 Q2 you will Q2 we will have a step 49:02 49 minutes, 2 seconds jump because uh as we mentioned we are just finishing our Zenthine expansion also in Q1 for final product capacity 49:12 49 minutes, 12 seconds and also we are incre uh you know the completing the Atali all phase one completion 49:20 49 minutes, 20 seconds uh whatever the small block that remained uh that will also get completed and fully capitalized. So with this both coming in I think uh next quarter 49:28 49 minutes, 28 seconds onwards we will have full uh operations on all the expanded assets. 49:36 49 minutes, 36 seconds Great. So sir um due to this you know other increases you know in uh happening from Q2 onwards like can we expect the 49:44 49 minutes, 44 seconds margins for the company to like go you know below 20% uh you know where we can see large pressure coming in. No, no. 49:55 49 minutes, 55 seconds Okay. Okay. Understood. So, lastly on the Zanthine prices, can you just help us out with how much price increases have we seen so far, you know, uh due to 50:03 50 minutes, 3 seconds the Chinese rebates uh you know going away and uh you know because of the war conflict if you can just quantify that part. 50:11 50 minutes, 11 seconds I think Chinese rebate was close to 131 or 13% I think 13%. 13% and that's what uh I think 50:20 50 minutes, 20 seconds overall the prices increased due to that. Apart from that I think in US 50:26 50 minutes, 26 seconds there is a 20% uh uh uh tariff uh also 25% tariff on China. So considering 50:34 50 minutes, 34 seconds those uh uh uh benefits that we have uh uh you know we have been able to get those price increase particularly for 50:42 50 minutes, 42 seconds the US market uh uh from our end. 50:47 50 minutes, 47 seconds Sir can you just help us uh with the numbers like uh sorry about that uh sham we have other participants waiting can you rejoin the 50:54 50 minutes, 54 seconds kit please? Okay, thank you so much. 51:00 51 minutes We have Tushar of Omega Portfolio Advis. 51:07 51 minutes, 7 seconds Please go ahead with your question now. Yeah. Uh thank you for the opportunity. 51:11 51 minutes, 11 seconds uh so I just wanted to understand like uh in terms of uh if you convert our revenues in the dollar adjusted term for the 55% of your export revenue we see 51:21 51 minutes, 21 seconds that there is a 5% of degrowth uh in the revenue uh and I just wanted to know uh 51:27 51 minutes, 27 seconds in terms of uh uh your view on the API front uh and also the the the pass on of 51:34 51 minutes, 34 seconds the prices uh so how do you see the growth uh in coming in adjusting for the dollar terms for the next 1 two years 51:43 51 minutes, 43 seconds that would be a first question and so secondly in terms of you said that uh the the capex cost are frontloaded. Uh 51:50 51 minutes, 50 seconds so when can we expect that balancing figure in terms of the aida contribution from the capexes uh from from which quarter or at least from which half 51:59 51 minutes, 59 seconds start materialize in terms of you know the margin uh expansion or at least maintaining that? 52:06 52 minutes, 6 seconds I think overall uh uh you know the foreign exchange uh rupee dollar has 52:13 52 minutes, 13 seconds moved significantly uh over lastuh couple of quarters. So I think earlier part of the year was not that uh big 52:22 52 minutes, 22 seconds change. So overall I think cap the rupee adjusted uh uh you know anyway we have 52:28 52 minutes, 28 seconds mentioned that uh API intermediate uh there was a degrowth definitely on that segment and that has resulted in overall 52:37 52 minutes, 37 seconds muted growth in rupee terms uh in our top line. Um uh so 52:45 52 minutes, 45 seconds and in in terms of the overall uh capacity and uh the AITA catch up I 52:52 52 minutes, 52 seconds think uh it will take uh at least one year uh from now for the current capexes 52:59 52 minutes, 59 seconds which are coming on stream in Q1 to meaningfully contribute to the AITA and normalization to happen. 53:08 53 minutes, 8 seconds Yeah. And so this post the CDMO scale up do you see the working capital to increase and if yes then by what number? 53:17 53 minutes, 17 seconds Now we have to work out the working capital increase because uh most of these projects have uh you know one time 53:25 53 minutes, 25 seconds or two time deliveries in a year and as we grow the sales of single projects that we have and if they are large 53:33 53 minutes, 33 seconds projects you know we end up carrying a lot of inventory and manufacturing across uh our uh facilities for many 53:41 53 minutes, 41 seconds quarters till we deliver this. So we have to see uh how it goes uh in future. 53:48 53 minutes, 48 seconds Unfortunately, these large customers don't pay us advance. So we have to finance uh this uh inventory ourselves. 53:59 53 minutes, 59 seconds Very nice. I will get back in the cube. Thank you. Thank you Tar. 54:05 54 minutes, 5 seconds We are taking a next question from Bhavika Singhi of CJ Sha. 54:11 54 minutes, 11 seconds Babika please unmute your microphone. 54:15 54 minutes, 15 seconds Uh thank you for the opportunity. Am I audible? Yes please. 54:19 54 minutes, 19 seconds Yeah. So uh my first question is I want to understand that in Q4 CDM mix was very high. Still our gross margin was 54:28 54 minutes, 28 seconds less Q on Q. So is it one kind of event or did we experienced any major raw material pricing pressure in any division? 54:38 54 minutes, 38 seconds No. So I think overall this quarter we had 155 cr consignment of last quarter 54:47 54 minutes, 47 seconds moving to this quarter. Uh in terms of uh revenue getting increased uh in this 54:55 54 minutes, 55 seconds quarter otherwise last two quarters would have been 100 cr each of uh CDMO sales. 55:03 55 minutes, 3 seconds As we mentioned over previous quarter uh you know previous year you know we have more operational assets uh to digest in 55:12 55 minutes, 12 seconds and which has resulted in higher manufacturing cost uh and I think in moving uh going forward as we do more uh 55:22 55 minutes, 22 seconds meaningful production from these assets uh you know revenues will increase and they will compensate for the cost increase in future. 55:34 55 minutes, 34 seconds Okay. And other I want to understand from the evaluation point of view when global innovator thoughtless TDM 55:41 55 minutes, 41 seconds partners does are the farmers uh like are these financial strengths specifically uh because we have a very 55:48 55 minutes, 48 seconds unique balance sheet as we uh self-undex from the zentin cash flow. Uh so just want to understand that how the uh 55:57 55 minutes, 57 seconds evaluation work does it uh pay in our favor and also for the uh Italy unit specifically do you have full customer 56:06 56 minutes, 6 seconds commitment in place uh for the capacity being built right now. Um this is just to understand our broader capex 56:13 56 minutes, 13 seconds philosophy. Uh that uh do we only commit to build capacity after a customer is signed or do you sometime build this 56:22 56 minutes, 22 seconds speculatively and then pitch it? Um if you can help me understand this. 56:28 56 minutes, 28 seconds Yeah, overall for the CDMO you know we are definitely doing the 56:33 56 minutes, 33 seconds capex is uh uh keeping long-term plan in mind. I think there is a mix of 56:41 56 minutes, 41 seconds multi-purpose capex and uh you know customuilt uh manufacturing facilities that we plan to do in future. Uh for 56:50 56 minutes, 50 seconds several projects that we have, we have long-term uh near long-term understanding from the customers what kind of volumes uh these kind of drugs once approved can reach. 57:02 57 minutes, 2 seconds And once we have this uh greater visibility, we are putting up these kind of assets uh to meet uh our uh innovator customers demand uh going forward. 57:15 57 minutes, 15 seconds Largely I think customuilt uh facilities are on the basis of uh uh sensible forecast that we have from these 57:24 57 minutes, 24 seconds customers. Of course, these customers uh cannot be held at gunpoint that if they don't buy from us but you know we have 57:31 57 minutes, 31 seconds to have a use our judgmental call uh you know for our capexis uh these 57:40 57 minutes, 40 seconds customu facilities of course have the certain reactors which can also be made purpose fully you know multi-purpose 57:47 57 minutes, 47 seconds also in future if there are any issues with these customers but largely I think we are following with their guidance and uh as long as we continue to work uh and 57:57 57 minutes, 57 seconds meet the customers expectations uh on quality and the deliverables. Uh I think 58:03 58 minutes, 3 seconds we'll continue to get uh more uh uh you know revenue from these customers. 58:11 58 minutes, 11 seconds Uh I think we missed the first question first part of the question that does our unique balance sheet help us uh shortlist by our uh CDMO partners. 58:20 58 minutes, 20 seconds Yeah. Yeah. I think uh uh yes I think why we get shortlisted I think few things our manufacturing capabilities 58:29 58 minutes, 29 seconds overall unique ability to scale up the production from kilo lab and put up the 58:35 58 minutes, 35 seconds assets unique ability to uh you know do a very uh backward integrated play where 58:45 58 minutes, 45 seconds the China dependence is reduced. I think uh a apart from the balance sheet these are the other factors which play of 58:52 58 minutes, 52 seconds course the chemistry also plays a big part now with the R&D and the addition of our uh cso also along with the other 59:00 59 minutes team members have also one of the factor why we can get more projects 59:08 59 minutes, 8 seconds thanks thank you we're taking next question 59:14 59 minutes, 14 seconds from deep Gandhi of I VMS deep please go ahead with your question 59:22 59 minutes, 22 seconds now yeah hi sir am I audible yes please so first question is on the cape side as you have guided that this 59:30 59 minutes, 30 seconds year you will do 400 crores but I don't think shared a breakup so can you give us a broad break up uh in what areas is this 400 crores going to be spent and 59:38 59 minutes, 38 seconds does this also include dedicated yeah I think uh it's a mix of capex uh uh where we will be completing the 59:47 59 minutes, 47 seconds zanthin in this current quarter. So there are certain projects which are ongoing on the zanthin front. Uh also 59:54 59 minutes, 54 seconds we'll be finishing our uh capitalization of uh the atali 1:00:03 1 hour, 3 seconds earlier phase one we'll starting phase two there also. So all these projects and of course the bottlenecking project I think these largely three buckets 1:00:11 1 hour, 11 seconds where and fourth bucket will be I think normal capex that we have the replacement capex so I think more more 1:00:18 1 hour, 18 seconds or less equally spread out among all four largely plus or minus 20 1:00:26 1 hour, 26 seconds and of course we will also spend on R&D and does this include the capex for dedicated block or will that be a 1:00:34 1 hour, 34 seconds separate number which you will share later on once it is decided that has been factored. 1:00:39 1 hour, 39 seconds So how much will be the capex for dedicated block? 1:00:42 1 hour, 42 seconds Uh we are still working that out. So once we have some number we'll guide you. 1:00:48 1 hour, 48 seconds Okay. And sir on the uh zenthine side can you broadly call out what was the volume growth and value growth for this quarter on a Y basis the growth which you have seen. 1:01:00 1 hour, 1 minute I think uh there we'll have to look at the Y numbers but uh as we have mentioned we are operating fully so we 1:01:08 1 hour, 1 minute, 8 seconds are uh utilizing our plant at 500 tons per month and uh we have given you the revenue now 1:01:18 1 hour, 1 minute, 18 seconds okay so lastly on the CDMO side sorry the uh please we have other participants waiting in the queue please 1:01:26 1 hour, 1 minute, 26 seconds okay would you mind rejoining Yeah, sure. Thank you. Uh we have Vikas Shara of ND Asset Management. 1:01:36 1 hour, 1 minute, 36 seconds Vikas, please go ahead with your question now. 1:01:39 1 hour, 1 minute, 39 seconds Yes. Hi, one clarification on the foreign currency loss. So in the P&L there is an line item of 17 cr and in 1:01:47 1 hour, 1 minute, 47 seconds the table below in the notes it says 13 cr. So are these overlapping numbers and how does the overall the foreign exchange impacted the results this quarter or let's say going forward? 1:01:58 1 hour, 1 minute, 58 seconds Yeah. So 17 crores is the total forex loss uh for the for the water and the 13 crores is on one of the contracts. 1:02:09 1 hour, 2 minutes, 9 seconds uh so that's where the difference is the 70 crores as I mentioned earlier also it comprises of my gain on the operations 1:02:18 1 hour, 2 minutes, 18 seconds that is my exports receivable on exports less uh payable on the imports and then 1:02:24 1 hour, 2 minutes, 24 seconds there is a loss on the contracts the foreign currency contracts that we enter into and then the there is a third 1:02:32 1 hour, 2 minutes, 32 seconds portion which is the increase on my foreign currency loans which A part of it I uh we park under foreign currency 1:02:42 1 hour, 2 minutes, 42 seconds loans. So that is basically you know net effect of that is 17 crores. 1:02:46 1 hour, 2 minutes, 46 seconds Got it. And when you look at say EIA when you guide for EIA you exclude this line item or you include that. Yeah. Yeah. This excludes. 1:02:55 1 hour, 2 minutes, 55 seconds Perfect. Yeah. Thank you very much. Thank you. Thank you. Thank you. 1:03:05 1 hour, 3 minutes, 5 seconds requesting all participants to remain in the queue. 1:03:14 1 hour, 3 minutes, 14 seconds So, uh ladies and gentlemen, due to quity of time, we will take that as the last question for today. I will now hand it over to the management for their 1:03:23 1 hour, 3 minutes, 23 seconds closing remarks. Over to you, management. 1:03:26 1 hour, 3 minutes, 26 seconds Yeah, I would like to thank everyone who could take their time out to attend this call. Thank you. Thank you. 1:03:34 1 hour, 3 minutes, 34 seconds Thank you so much. As there are no further questions on behalf of Arti Pharma Labs Limited, this concludes 1:03:41 1 hour, 3 minutes, 41 seconds today's conference call. Thank you all for joining us and you can now click on the leave icon to exit the meeting. 1:03:47 1 hour, 3 minutes, 47 seconds Thank you all for your participation.