Akums Drugs & Pharmaceuticals Ltd — Q4 FY26

Akums Drugs & Pharmaceuticals Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=qGBDjRQyftQ Published: 1 hour ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Akums Drugs and Pharmaceuticals Q4 FYI26 reserves conference call. As a reminder, all 0:09 9 seconds participant lines will be in the listen only mode and there'll be an opportunity for you to ask questions after the presentation concludes. 0:16 16 seconds Should you need assistance, please in conference call, please signal and operate by pressing star and then zero on your touchstone phone. I now have the conference over to Mr. 0:25 25 seconds Abdul Puranala. Thank you and over to you. Yeah, thank you operative. Uh, good afternoon everyone and on behalf of 0:33 33 seconds ICICI securities, I welcome you all to the Q4 F526 earnings conference call of Akums Drugs and Pharmaceuticals Limited. 0:43 43 seconds Uh, today on this call uh we have with us the following members from the management team. Uh, Mr. Sep Jane M, uh, 0:52 52 seconds managing director, Mr. Sumit Son, CFO, Mr. Tashu Maheshwari general manager 0:59 59 seconds strategy and Mr. Ankit Jane in head of investor relations. I now hand over the call to the management for their opening 1:07 1 minute, 7 seconds remarks followed by which we will open the line for Q&A. Thank you and over to you Ankit. Thank you Abdul for the introduction. 1:16 1 minute, 16 seconds Good afternoon everyone and welcome to AAM's Q4 and FI26 earnings call. I am Ankit Jan and I head investor relations at Ecom Drug and Pharmaceuticals 1:24 1 minute, 24 seconds Limited. I will commence with a standard disclaimer that any discussion on today's call might include certain power between statements which are predictions or projections of future events. Our 1:33 1 minute, 33 seconds business faces several risks and uncertainties that could cause actual results to differ materially from what is expressed or implied in such 1:40 1 minute, 40 seconds statements. At EMS, we do not undertake any obligations to publicly update any forward-looking statements whether as a result of new confirmation or future 1:48 1 minute, 48 seconds events or otherwise. I hope you would have had an opportunity to review our investor presentation and financials that we posted on Thursday evening. I 1:56 1 minute, 56 seconds would now like to hand it over to our managing director Mr. Sep to discuss our performance. Thank you. 2:02 2 minutes, 2 seconds Uh thank you G. Uh namaskar everyone and thank you for joining us today for our Q4 and full year FY26 earning call. 2:11 2 minutes, 11 seconds During Q4 FY26, we maintained the business momentum on last quarter and ended FY26 on a strong note despite a 2:20 2 minutes, 20 seconds very challenging H1 FY26. The operating environment through the first half was adverse characterized by sharp erosion 2:28 2 minutes, 28 seconds in API prices and prolonged phase of low volume growth in the domestic market. We as a comes managed to navigate the 2:36 2 minutes, 36 seconds challenging phase due to the depth of our client relationship and quality of our manufacturing setup and at the same time continue to invest for the future to ensure long-term sustainable growth. 2:49 2 minutes, 49 seconds Coming to operating performance for the quarter, CDM once again delivered a healthy topline growth led by double 2:56 2 minutes, 56 seconds double digit volume expansion. We believe this reflects the structural strength supported by growing customer preference for compliant manufacturers. 3:06 3 minutes, 6 seconds Our international CDMO journey continued together phase following the EUGP accreditition of our plan to received in 3:13 3 minutes, 13 seconds January. We have commenced do those filing and country specific registrations across multiple European 3:20 3 minutes, 20 seconds markets in line with our stated plan to commence commercial supplies from plant 2 in FY28. 3:27 3 minutes, 27 seconds Supplies to Europe which began in the early part of this physical have continued to scale and along with the 3:35 3 minutes, 35 seconds strong pipeline of 10 plus products for the European markets. On the Zambia partnership, the project remains on track with commercial supplies of 3:43 3 minutes, 43 seconds approximately USD 25 million from our Indian facilities to Zambia expected to 3:50 3 minutes, 50 seconds commence by the end of Q2 FY27 along with the project planning and erection of the local manufacturing facilities. 3:58 3 minutes, 58 seconds While ecumenics, the domestic brand and formulation business reported modest revenue growth during the year. Margins 4:05 4 minutes, 5 seconds in the business expanded meaningfully validating the efficiency focus strategy as we head into FY27. 4:14 4 minutes, 14 seconds We expect this segment to grow at above IPM rates driven by new launches, focus on brand building and continued emphasis 4:22 4 minutes, 22 seconds on field force productivity. Our international brand and formulation business had a tough uh uh year with 4:30 4 minutes, 30 seconds muted growth due to market specific disruption in our focus geographies. We expect this segment to return to growth 4:37 4 minutes, 37 seconds as we are confident of the structural attractiveness of our chosen geographies in the API business. Cricing pressure in 4:46 4 minutes, 46 seconds the settlers for persisted uh through most of the year resulting in continued losses. Our continued focus on cost 4:53 4 minutes, 53 seconds optimization, portfolio rationalization, yield improvements and the gradual shift towards higher margin nonos products and 5:01 5 minutes, 1 second regulated markets are expected to contain losses for the coming year. The the European audit of our API facility 5:08 5 minutes, 8 seconds is expected in the upcoming quarter which would unlock regimented market opportunities and improved realization. 5:16 5 minutes, 16 seconds The trade generic business turned a corner in this quarter. Going forward, we expect a stabilized much smaller 5:23 5 minutes, 23 seconds profit oriented footprint. Going forward on the operational and digital infrastructure front, our SAP S4 HANA 5:32 5 minutes, 32 seconds transformation initiated early this fits in progressing uh as per plan and will over time drive material improvements in 5:40 5 minutes, 40 seconds efficiency, automation and realtime analytics across functions. The Darvin box implementation across our HR 5:48 5 minutes, 48 seconds function is delivering tangible employee experience benefits. We continue to invest steadily in capacity expansion, 5:55 5 minutes, 55 seconds R&D and modernization through the year with capex broadly in line with our trend run rate. Our new newer facilities 6:03 6 minutes, 3 seconds including the dedicated injectable plant, the phenom facility and the new plant in Gundi are all progressing through their respective ramp up curves 6:12 6 minutes, 12 seconds with client audits and product approvals in advanced stages as volumes build in over FY27F 6:19 6 minutes, 19 seconds and FY28. These facilities will drive next leg of growth for the CDMO business. The board has also recommended 6:28 6 minutes, 28 seconds annual dividend for the year FY26 for rupees one per equity share and a special dividend of rupees two per 6:35 6 minutes, 35 seconds equity share. We thank all the stakeholders for their continued trust and patience through what was the 6:43 6 minutes, 43 seconds transitional year and we reiterate our commitment to creating sustainable long-term value for our shareholders. I shall now request our CFO Mr. Summit Suk 6:53 6 minutes, 53 seconds to take you through the detailed financial for the quarter and the full year. Over to you Mr. Suni. 7:00 7 minutes Thank you sir. Uh thank you Sundep. Good afternoon everyone. I will take you through the financial highlights. 7:07 7 minutes, 7 seconds Revenue for the fiscal year 2026 stood at 4359 crores as compared to 4,170 cr in FI25 an increase of 5.8%. 7:21 7 minutes, 21 seconds adjusted a bit stood at 522 crores. This is the highest uh that we've seen over the recent past as compared to 461 7:29 7 minutes, 29 seconds crores in the previous year increasing by 13.3%. 7:34 7 minutes, 34 seconds Adjusted aida margin stood at 12% against 11.2% in FY25. 7:42 7 minutes, 42 seconds PAT stood at 256 crores as compared to 344 crores in FY25. Last year there was 7:49 7 minutes, 49 seconds a significant benefit of defer tax asset that was created due to the restructuring of the group. This was 106 7:58 7 minutes, 58 seconds crores. I think important would be to look at the PBT uh which probably would 8:04 8 minutes, 4 seconds insulate the tax uh the the deferred tax asset. If we look at the PBT, we were at 382 crores in FI26 compared to 341 8:14 8 minutes, 14 seconds crores in FI25 and increase of 11.9%. 8:20 8 minutes, 20 seconds If we look at the quarterly performance, revenue stood at 1158 crores. This was 9.7% 8:26 8 minutes, 26 seconds higher year on year and.1% lower quarteron quarter. Adjusted a bit 8:33 8 minutes, 33 seconds stood at 152 cr. This is 61.6 6 crores higher yearon-year Q425 was 94 crores 8:42 8 minutes, 42 seconds and 3.3% higher quarteron quartarter Q326 was 147 crores improved by driven 8:52 8 minutes, 52 seconds by improved profitability in the deep CDMO segment and trade generics uh segment turning a bit positive adjusted 9:00 9 minutes margins were 13.1% versus 8.9% in FY25 and 12.7% % in Q3 of 9:08 9 minutes, 8 seconds FY26. The reported pack for the quarter was 81 crores compared to 150 crores for 9:16 9 minutes, 16 seconds quarter 4 FY25 and 68 crores for Q3 FY26. 9:22 9 minutes, 22 seconds As stated earlier, there was a significant deferred tax asset creation in Q4 last year. If we if we look at the 9:30 9 minutes, 30 seconds PBT for the quarter then the PBT is 121 crores in Q426 compared to 75 crores in Q425. 9:40 9 minutes, 40 seconds If we go business the five segments that we've given if we look at the CDMO the CDMO performance has been good. The 9:47 9 minutes, 47 seconds revenue stood for the year at 3485 crores compared to 3208 crores in FY25. 9:54 9 minutes, 54 seconds An increase of 8.6% 6% a bit for the full year stood at 467 crores compared to 450 crores last year an increase of 10:04 10 minutes, 4 seconds 2.9%. Q4 revenue was at 952 crores a great a growth of 10:11 10 minutes, 11 seconds 13.4% yearonear and 4% quarteron quarter. 10:17 10 minutes, 17 seconds stood at 137 crores improving 54.9% yearonear and 9.1% quarteron quarter. 10:27 10 minutes, 27 seconds The segment sustains its strong growth momentum while always also benefiting from operating leverage driven by 10:35 10 minutes, 35 seconds improved capacity utilization and ramp up of newer facilities. 10:40 10 minutes, 40 seconds Domestic branded formulations FY26 revenue stood at 456 crores compared to 434 crores in FY25 an increase of 2.9%. 10:50 10 minutes, 50 seconds AITA for the full year was 90 crores compared to 77 crores last year an increase of 17%. Q4 revenue stood at 102 11:00 11 minutes crores decline of 1.5% yearonear and 11.1% quarteron quarter. Aida stood at 11:09 11 minutes, 9 seconds 20 22 crores similar to Q4 last year and declining 13.2% quarteron quarter. 11:17 11 minutes, 17 seconds International branded formulation for FY26 revenue stood at 143 crores 11:24 11 minutes, 24 seconds similar to last year which was also 143 crores. AITA for the full year stood at 36 crores compared to 28 cr last year an increase of 32.3%. 11:35 11 minutes, 35 seconds For Q4 revenue was 36 cr a decline of 9.7% yearonear and 2.8 28.5% quarteron 11:44 11 minutes, 44 seconds quarter. EITA stood at 10 crores improving 14.7% yearonear and declining 11:52 11 minutes, 52 seconds 22.3% quarteron quarter. For the trade generate business, the revenue stood for for FY26 at 100 crores compared to 150 12:01 12 minutes, 1 second cr 115 crores FY25 a decline of 13.2% AIDA for the full year stood negative of 10 crores 12:10 12 minutes, 10 seconds compared to a negative 28 crores last year. For Q4 the revenue was 27 cr a 12:16 12 minutes, 16 seconds growth of 20 22.6% yearonear and 10.2% quarteron quarter. AIDA turned 12:25 12 minutes, 25 seconds positive 1.4 crores from a negative 10 crores Q425 and a negative 3 crores Q3 FY26. 12:34 12 minutes, 34 seconds For the API business in the current year the revenue stood at 184 crores compared to 219 crores in FY25 12:42 12 minutes, 42 seconds a decline of 15.9%. AITA for the full year stood -40 crores compared to -44 12:50 12 minutes, 50 seconds crores last year. For Q4 revenue stood at 41 crores, a decline of 18.8% yearonear and 24.9% quarteron quarter. 13:02 13 minutes, 2 seconds Eida stood at -12 crores compared to a negative 6 crores quarter 425 and a negative 7 crores in Q3 FY26. 13:12 13 minutes, 12 seconds The company's operating cash flow stood healthy at uh 1181 crores compared to 465 crores 13:22 13 minutes, 22 seconds last year. Uh this is ma majorly attributable to the uh European contract that was assigned to the company. The 13:30 13 minutes, 30 seconds free cash flow for FY26 stood at 958 cr versus 201 cr for FI25. 13:39 13 minutes, 39 seconds We had a slight increase in the working capital days from a 91 cr to 105 days. This was largely due to the 13:47 13 minutes, 47 seconds buildup of inventory which was secured by advanced payment to traders and we wanted to ensure this supplies during 13:55 13 minutes, 55 seconds the war time. The company continues to maintain a strong liquidity liquidity position and cash and cash equivalent 14:02 14 minutes, 2 seconds stood at 6082 crores and a healthy balance sheet uh of the company. We are well 14:10 14 minutes, 10 seconds positioned to enter new fiscal year with positivity and confidence. I now request the moderator to open the forum for question and answers. Thank you. 14:22 14 minutes, 22 seconds Thank you. We will now begin the question and answer session. 14:26 14 minutes, 26 seconds Participants who wish to ask a question may press star and one on your touchdown telephone. 14:31 14 minutes, 31 seconds If you wish to remove yourself from the question key, you may press star and two. Participants are requested to use handsets while asking a question. 14:40 14 minutes, 40 seconds Ladies and gentlemen, we'll wait for a moment while the question queue assembles. 14:49 14 minutes, 49 seconds We have the first question from the line of Sil Kapoor from Antifragile Thinking. Please go ahead. 14:56 14 minutes, 56 seconds Yeah. Hi, thank you for the opportunity. Um, hi team. Um, couple of questions. 15:02 15 minutes, 2 seconds Um, as your European and regulated market business ramps, um, ramps up, 15:10 15 minutes, 10 seconds which is specific internal capabilities currently least scalable? Is it 15:17 15 minutes, 17 seconds regulatory filing throughput or quality systems or tech transfer? Is it leadership bandwidth or manufacturing 15:26 15 minutes, 26 seconds facility because the capability that is required to compete successfully in 15:32 15 minutes, 32 seconds highly regulated markets are somewhat different compared to um Indian market 15:40 15 minutes, 40 seconds right so uh that's that's one part of the question and if you can also help um 15:47 15 minutes, 47 seconds uh in terms of you know what concrete investments are being being made today to get to a level uh where we can uh you 15:56 15 minutes, 56 seconds know pitch uh ACUMS as a high quality you know regulated market ready kind of a facility. Thank you. 16:06 16 minutes, 6 seconds So Sajill so this is S from U on the first question obviously uh reggg market 16:12 16 minutes, 12 seconds play requires uh stringent capabilities compared to to the domestic capabilities. uh few points why we are 16:20 16 minutes, 20 seconds we think we are uh capable to serve those markets is one is we already serve large Indian customers and MNC's Indian 16:27 16 minutes, 27 seconds markets who themselves have a strict uh K sheet of how they operate right so we have been serving MNC's for over 15 16:34 16 minutes, 34 seconds years now in India um from the likes of all the large Mnts in India across their multiple product product be their 16:41 16 minutes, 41 seconds regular established ones or the new DCGIS right also we received the first European GMP approval uh way back in 22 16:50 16 minutes, 50 seconds right so the capabilities we have been strengthening our capabilities and as you rightly mentioned these are across R&D quality production regulatory 16:59 16 minutes, 59 seconds everyone so these capabilities since we already serve uh the larger ones in India and were also European GP so these 17:09 17 minutes, 9 seconds um are the capabilities which we think we have and as we go along we'll further strengthen up those capabilities 17:19 17 minutes, 19 seconds uh the plan three also received our plan 3 also apart from European also received an visa approval this year right so this 17:25 17 minutes, 25 seconds again is a testament of uh our uh our commitment towards regulated market and 17:32 17 minutes, 32 seconds the we were also awarded the European CDMO contract which was after a thorough uh review by the partner so it's a 17:42 17 minutes, 42 seconds learning journey we are on the way and rightly so we'll have to strengthen them capab abilities as we go along. 17:47 17 minutes, 47 seconds Secondly, on the investments required, so this will be tied down to what projects in the future we get, which capabilities with doses forms we have to 17:55 17 minutes, 55 seconds expand. But as we look today, we already have a European GMP approved facility for injectables. We already have a European GMP facility for oral liquids 18:05 18 minutes, 5 seconds and an injectable facility which is also in visa approved. Right? So for most of the important doses forms which 18:12 18 minutes, 12 seconds contribute to value and volume are already European GMP approved and as we go along we have plans for some additional uh plans to get European GMP approved over the next 18 months. 18:24 18 minutes, 24 seconds Sure. No, that's helpful. Very thoughtful. Thank you. And on the gross margin side and if if you see ever since 18:33 18 minutes, 33 seconds the the IPO listing today uh we are sitting at one of the highest uh or best ever gross margins this business has reported which is very positive indeed. 18:45 18 minutes, 45 seconds Now there are two kind of loops that are playing uh out uh in parallel for us as a business. One is the negative loop of 18:53 18 minutes, 53 seconds what's happening in the Middle East uh which is something external. Everyone is facing you know um crude linked 19:00 19 minutes inflation insolvents etc. And we can only be backward integrated to a certain extent. We cannot start manufacturing 19:07 19 minutes, 7 seconds KSMs uh and all the rest of it. So there will be some negative uh pressure coming from that side of the negative loop. In 19:16 19 minutes, 16 seconds uh parallel there is also a positive loop uh that will play out which will be as we move from India into uh more 19:24 19 minutes, 24 seconds complexity more specialtity regulated markets. We obviously expect to get a a fair share of the pricing power uh with 19:33 19 minutes, 33 seconds that should help our gross margins move up. But these two groups are kind of contradicting each other. So what I'm 19:41 19 minutes, 41 seconds trying to understand here is um what will be what in your view is the net effect of one negative loop which is a 19:49 19 minutes, 49 seconds cyclical loop. Hopefully fingers crossed uh this situation will hopefully change at some point. Uh and the other one is 19:56 19 minutes, 56 seconds much more structural loop which is a positive loop higher complexity better specialtity products and and um higher 20:04 20 minutes, 4 seconds demanding markets giving us pricing power. So what is the net effect on the gross margin in a nutshell? 20:11 20 minutes, 11 seconds So so I'll quickly address. So as you rightly said one is external which is not really in our hands but as a business model it's a pass through 20:19 20 minutes, 19 seconds business model. So whatever is the cost of input material gets passed on as part of a CDMO contracts. Uh and uh on top of 20:28 20 minutes, 28 seconds it is our conversion and margins. So while uh the uncertaintity in the global 20:35 20 minutes, 35 seconds environment creates a a cyclical period of shortages uh price hikes but all of that gets passed through. Secondly uh 20:44 20 minutes, 44 seconds what is internal to us is how we can ramp up our uh unique differentiated dosage forms our product offerings our 20:51 20 minutes, 51 seconds uh capabilities. Uh this is which we are constantly focusing on. If you look at really last 3 years, we have been investing over 100 crores in our R&D. Uh 20:59 20 minutes, 59 seconds which is a result of which we can at a larger base as well, we can uh gradually move up our gross margins. 21:08 21 minutes, 8 seconds No, that's helpful. And very finally, very quickly, uh sorry to interrupt, sel kindly come back in queue for followup questions. 21:16 21 minutes, 16 seconds Yeah, yeah, sure. No problem. Thank you. Thank you. 21:20 21 minutes, 20 seconds Participants are requested to kindly restrict to two questions per participant. We have the next question to the line of Adja Sher from Incred Asset Management. Please go ahead. 21:32 21 minutes, 32 seconds Uh hi sir. So uh last two quarters the volume variance has been north of 25%. 21:39 21 minutes, 39 seconds Uh so what is driving this and what is your outlook on the same and the price variance has been a negative 3.5% on an 21:46 21 minutes, 46 seconds average in the last few quarters that API price is rising 10 to 20% on an average. Will this reverse going forward 21:54 21 minutes, 54 seconds and if prices sustain can we deliver a double digit growth in the CNO business by virtue of the same? 22:01 22 minutes, 1 second Sure. So as you rightly pointed out over the last uh two quarters in the H2 the volume growth has been significant. 22:09 22 minutes, 9 seconds What we have seen as we also discussed this in Q3 uh this is primarily led from existing customers only right. So this is not new geographies or new customers. 22:17 22 minutes, 17 seconds So what we are seeing is increased demand uh uh for existing brands from the existing customers only. So honestly 22:25 22 minutes, 25 seconds what it's driving it's still to be uh thought through uh and looked out but because the overall IBM is still growing at a percent half but we think that um 22:35 22 minutes, 35 seconds this is a sustained growth because similar uh doubledigit growth is also uh visible as we sit in May for the Q1. 22:45 22 minutes, 45 seconds Um right so so that's that's on the volume growth pricing uh wise API prices over the last full financial year were 22:54 22 minutes, 54 seconds uh bit soft right uh uh the whole of the year the API prices crashed by over 20 25% as a basket right uh due to the 23:03 23 minutes, 3 seconds current ongoing global geopolitical situations the API prices have slightly gone up single high digits they have gone up as a basket uh how will they 23:12 23 minutes, 12 seconds come down sharply assume that has killed to be seen but still the prices remain lower than what they used to be in April of last year. Right? So while the price 23:21 23 minutes, 21 seconds has still been gone up they are still uh lower than the April prices. Right? So the API softening still continues if you 23:28 23 minutes, 28 seconds have to compare it uh 12 months uh prior to it. Right? Uh so volume growth looks 23:35 23 minutes, 35 seconds positive. I believe the APIs won't uh go down sooner from this these levels. So 23:42 23 minutes, 42 seconds uh that's that's how we see the CDMO outlook from there. 23:48 23 minutes, 48 seconds Got it sir. Uh next question was on the trade generate turning a beta positive. 23:53 23 minutes, 53 seconds If you can share your outlook on how do you see the trade generate in API business uh for FI27 and beyond and a 24:01 24 minutes, 1 second question on the tax rate accepted for FI27. That's it. 24:05 24 minutes, 5 seconds Sure. I'll maybe address the business side first and so much we can chime in for the tax. 24:11 24 minutes, 11 seconds U on the trade genic as you rightly said we turned a bita positive uh we over the last uh couple of years have really cut 24:20 24 minutes, 20 seconds the business short and now it's a bita positive we are only doing the business in pockets where it makes sense for the 24:28 24 minutes, 28 seconds business. Um this is expected to remain as we mentioned our opening statement is expected to remain uh at similar levels of revenue with similar levels of aida. 24:40 24 minutes, 40 seconds So this will not meaningfully contribute to the group's topline or uh profitability as we move along on uh the API. This was a year of miss honestly. 24:49 24 minutes, 49 seconds Uh the uh the API prices uh continue to remain low and hence our uh costs the 24:56 24 minutes, 56 seconds cogs uh remain elevated which resulted that our fixed overheads and our variable expenses of manufacturing could 25:03 25 minutes, 3 seconds not be fully utilized and we could not be a beta positive. uh the prices have started to go go up. We have also 25:10 25 minutes, 10 seconds started uh uh to venture into exports are u in March uh of this year. We also 25:19 25 minutes, 19 seconds uh started our European inspections, right? So all of those CPS have been filed in uh in visa Brazil as well. 25:27 25 minutes, 27 seconds Right? So uh this year we are hopeful we should uh do much better than what we delivered last year in API and similar 25:34 25 minutes, 34 seconds to an uh trade generics turnaround in 26 we are hopeful we can do some significant turnaround in APIs this 25:41 25 minutes, 41 seconds fiscal year on the tax on the on the tax rate if we were to look at some of the entities which are 25:49 25 minutes, 49 seconds making losses it does give an effective tax rate of 32 odd% but you know going 25:56 25 minutes, 56 seconds forward What we think 29 on phone and overall is is something we can build 26:03 26 minutes, 3 seconds into uh our business models right but right now coming at around 32%. 26:13 26 minutes, 13 seconds Thanks thank you we have the next line of Pravin Jaman from Aventus Park. Please go ahead. 26:25 26 minutes, 25 seconds Thank you for the opportunity. Hope I'm audible. Yes. 26:31 26 minutes, 31 seconds Sir, my question is on the uh model side. So in CDMO for Q4 SI26, our margins have expanded to 14.4%. 26:41 26 minutes, 41 seconds Even though we had a product mix uh base which was a diverse product mix of around 100 crores. Can you explain the 26:49 26 minutes, 49 seconds model forward here? like I understood it is a cost plus uh margins but whether it's a percentage margins or a margin 26:56 26 minutes, 56 seconds fixed on an absolute basis uh my question stems out on the case where uh even though the base portfolio carries lower absolute conversion margin 27:05 27 minutes, 5 seconds compared to the niche uh how could this adverse mix uh improve our margins this quarter uh what what what am I missing 27:14 27 minutes, 14 seconds here sir compar like on a sequential basis Sure. So uh so if you really compare it 27:22 27 minutes, 22 seconds with last Q4 you will see an abrasion but look it as a standalone any other quarter uh whether it is quarter 3 in general every quarter you will see these 27:31 27 minutes, 31 seconds are the regular margins. Q4 of 25 was an year where we had uh significant dip in 27:38 27 minutes, 38 seconds aa driven again by the product portfolio uh and uh some year end provisions as well. Right. So uh this this uh 27:46 27 minutes, 46 seconds essentially in Q4 we had less of uh those low margin uh product and hence this looks to be an uh regular quarter. 28:01 28 minutes, 1 second So uh so uh is it a percentage margins or absolute one or like the model which we model is a percent margins on the 28:09 28 minutes, 9 seconds input cost. So the input cost then depending on the product type the dosage form the quant and so on the percent margins is applied on top of it. 28:19 28 minutes, 19 seconds Okay. Okay. Thank you. So my second question is on scheduleuling. So now uh the deadline has passed and uh we heard 28:26 28 minutes, 26 seconds like inspections should have started by now. So uh like have we seen any visibility improvement 28:34 28 minutes, 34 seconds uh like uh we getting some volume growth or uh customers approaching us on this angle due to MSME's uh schedule M getting impact implemented. 28:46 28 minutes, 46 seconds So while this remains uh within the perview of the government schedule M and 28:54 28 minutes, 54 seconds is being followed through right uh we'll have to look for how this gets rolled out and implemented but obviously uh 29:01 29 minutes, 1 second even prior to schedule the customers we serve are largely cost quality uh conscious customers. 29:09 29 minutes, 9 seconds So uh we like my question stems from the point like we said uh that there there were some pricing disruptions caused by 29:16 29 minutes, 16 seconds MSME people on uh like due to the schedule uh and like as now it is being 29:23 29 minutes, 23 seconds implemented uh like still are they uh doing this cost cutting to uh retain customers or 29:32 29 minutes, 32 seconds uh with this getting implemented we could expect those customers to come back to 29:39 29 minutes, 39 seconds Uh I will like to skip this uh question because honestly uh we have no visibility on ground of how the government plans to roll this out. 29:48 29 minutes, 48 seconds Okay sir. Uh so can I add one more question on the injectable side? 29:56 29 minutes, 56 seconds Yeah it's okay. So the new injectables facility uh what would be the utilization and uh uh what would be the 30:04 30 minutes, 4 seconds contribution from this facility going 30:16 30 minutes, 16 seconds ladies and gentlemen the management line has dropped request to kindly stay connected while we rejoin the management 31:44 31 minutes, 44 seconds Ladies and gentlemen, we have the management line reconnected. So, you may go ahead. Oh, sir. 31:53 31 minutes, 53 seconds Yes P we are back. Yeah. 31:56 31 minutes, 56 seconds Okay. So my last question was on the injectable facility. So the new one what was the utilization uh exit which we had 32:04 32 minutes, 4 seconds and uh what would be the contribution from this facility going at sir for the newer facility or overall injectables? New facility. 32:14 32 minutes, 14 seconds Newer facility we are still ramping up. 32:16 32 minutes, 16 seconds The utilization is in early teens. Uh and we expect that uh this year we will have a significant ramp up in the injectable facility. 32:29 32 minutes, 29 seconds Okay sir. Thank you for answering all my questions. That's a profession. 32:35 32 minutes, 35 seconds Thank you. We have the next question from the line of Ankurkumar from Alpha Capital. Please go ahead. 32:42 32 minutes, 42 seconds Hello sir, thank you for taking my question. Sir, I wanted to understand in terms of CDMO, what kind of overall 32:51 32 minutes, 51 seconds revenue growth are we expecting this year? Because you said APA prices have improved which will be a pass through but they are still lower than last year 32:59 32 minutes, 59 seconds and volume growth you said we will expecting double decrease. So overall what kind of revenue numbers and margins are we expecting? 33:09 33 minutes, 9 seconds So as I said we have visibility for 45 to 60 days of our uh of our revenue 33:17 33 minutes, 17 seconds book right. So what we said is in Q1 Q2 as we can see we can we expect a double 33:24 33 minutes, 24 seconds uh digit volume growth right so while H2 still has to be seen through the pricing as I also mentioned in my last are 33:32 33 minutes, 32 seconds transiently high whether they stay at the current levels go down go further up uh we still have to see as we go along 33:39 33 minutes, 39 seconds but uh this is what we can say for H1 and as we talk through in the next quarter we can give more flavor on uh the SK3 and Q4 33:50 33 minutes, 50 seconds And any color on the margin set? Sir, we have seen improvement in Q4. So what kind of numbers can we expect? 33:57 33 minutes, 57 seconds Similar margin profile uh what we currently have? 34:04 34 minutes, 4 seconds Uh got it sir. And sir on API side you said you expect this year to be much better in terms of reduction in losses. 34:12 34 minutes, 12 seconds uh can can we expect it to to get the losses to reduce to trade generic levels or how should we think? 34:21 34 minutes, 21 seconds So uh we uh while the losses will be sizably reduced is what we expect. 34:30 34 minutes, 30 seconds We'll have to wait for at least couple of quarters to think through whether we can turn monthly aa positive or not. 34:37 34 minutes, 37 seconds That's the goal and aspiration. on a full year basis we might still see some losses. 34:44 34 minutes, 44 seconds Got it sir. And sir on tax rate you said 29%. So when do we expect to go to 25% type is the normal range? 34:53 34 minutes, 53 seconds See, I think the way the way we look at it is when some of our entities continue to make losses, right? Uh if the API 35:02 35 minutes, 2 seconds business was to turn around, right? And the trade generic business was to turn around, we would be coming at the tax 35:11 35 minutes, 11 seconds rate that you're saying, right? If let's say we have a uh uh a 100 rupees profit and we were to pay a 25% tax over there 35:20 35 minutes, 20 seconds but that 25 if is taken as a delta 2 and 80 because of the losses you'll see a higher 35:27 35 minutes, 27 seconds percentage right so so I think the way the taxes should come down is once most of our businesses come down at the 35:35 35 minutes, 35 seconds normal rate and while this number is looking also differential because of the deferred tax asset I think to answer 35:43 35 minutes, 43 seconds your question broadly is the way I said that once all most of the businesses are uh you know bad positive we'll come at the normal rate. 35:52 35 minutes, 52 seconds Got it sir. So last question would be uh we have good cash increase we have good cash flow from operations also. Uh so 36:01 36 minutes, 1 second what is our plan? Uh we gave only 18% dividend payout this year. So what is our plan on the cash usage? 36:10 36 minutes, 10 seconds So uh primarily given it we are extensively a growth focused organization the primary usage of uh the 36:17 36 minutes, 17 seconds cash still remains in assessing organic or inorganic opportunities for growth. 36:23 36 minutes, 23 seconds Dividend also was a way to reward the shareholders. 36:28 36 minutes, 28 seconds So we expect that we'll soon utilize some parts of the cash for growth. We 36:34 36 minutes, 34 seconds are already in process of expanding our oral solid facilities since you have seen we have have almost 20% plus volume 36:44 36 minutes, 44 seconds growth over two quarters. The quarter also looks good and hence we see that we now would need to ramp up our oral solid 36:52 36 minutes, 52 seconds facility as well. So we are in process of ramping up. So that's where some parts of the capex of this year will go. 36:59 36 minutes, 59 seconds uh and also we are actively evaluating our uh uh objectives around uh niche 37:06 37 minutes, 6 seconds businesses if we can acquire inorganically. Uh right. So this is uh this is where we expect the cash utilization to happen. 37:17 37 minutes, 17 seconds Sure sir. Thank you and all those. Thank you. 37:23 37 minutes, 23 seconds We have our next question line of Rohit Banani from Naredi Investments. Please go ahead. Sorry from Vij Global. Please go ahead. 37:31 37 minutes, 31 seconds Yes, thank you for giving me the opportunity. My question is related to the execution of lease deed which we have done for land in Haiti. I wanted to 37:41 37 minutes, 41 seconds know the purpose of you know this execution and expansion plans from this land in future. 37:49 37 minutes, 49 seconds So simply if you really look at the history of Kenur at Haridar we have gradually expanded our operations there by acquiring nearby land sites and so 37:56 37 minutes, 56 seconds on. Right? This is how we have grown historically across Harido. Right? So this is simply uh one of those 38:04 38 minutes, 4 seconds activities we will need for expansion of our capacities as well as building utility supports and so on. 38:12 38 minutes, 12 seconds Okay. Understood. And my second question is related to the European contract of 200 million euros. How much of this is 38:20 38 minutes, 20 seconds expected from the first year? Will it be a 40 million euro commitment every year or there is some clause of you know 38:28 38 minutes, 28 seconds initially the the amount being lower and gradually the execution going up year on year? So this is an established brand uh 38:37 38 minutes, 37 seconds already marketed with predictable volumes being sold in the European market, right? So this is not a new launch to your question. Uh so how we 38:45 38 minutes, 45 seconds look at it once we start uh the launch whichever month or quarter it is once we start we will have almost a 35 uh 38:54 38 minutes, 54 seconds million euro uh on a matt basis. 39:03 39 minutes, 3 seconds Okay. Okay. So initially it will be 35 million and thereafter uh 35 broadly 39:11 39 minutes, 11 seconds broadly this is how it is 35 for the next uh uh 6 years till 2032. 39:19 39 minutes, 19 seconds Okay. Okay. Understood. Thank you so much. 39:26 39 minutes, 26 seconds Thank you. We have the next question from the line of Achel Mahishwari from the Razer Investments. Please go ahead. 39:34 39 minutes, 34 seconds Yeah. Hi. Uh I had just one question on international branded business side. Uh the revenues have seen a sharp decline 39:42 39 minutes, 42 seconds but the margins have improved to 28%. Is there a reason for that? 39:48 39 minutes, 48 seconds So u certainly so what we are focusing on uh is a more we we are investing into 39:55 39 minutes, 55 seconds marketing while uh the business is small which honestly was not one of the best years for the expose business and we are 40:04 40 minutes, 4 seconds hopeful this business will uh be shaped well this year margin expansion has come from two reasons. One is we are focusing on marketing 40:12 40 minutes, 12 seconds uh of brands rather than just pure B2B play it is more B2B T2C wherein we are doing a marketing so 78 countries we have our own field force extensive field 40:21 40 minutes, 21 seconds force we have over uh 10 countries where we have our country managers right so that's there also we got uh some 40:28 40 minutes, 28 seconds benefits of the US so since it's USD we some got some benefits 40:35 40 minutes, 35 seconds from the uh forex gain Uh right and 40:44 40 minutes, 44 seconds which resulted which resulted in the gross margins to be up by over 3 and a half 4%. 40:50 40 minutes, 50 seconds Right. Right. Thank you. And uh just one more thing sir. Uh the domestic business is not seem to be doing well. Uh how do 40:58 40 minutes, 58 seconds we ensure that the domestic business uh you know delivers at par with IPM over the next few years? 41:06 41 minutes, 6 seconds So uh this year uh if you really have seen through we hardly took a price uh 41:12 41 minutes, 12 seconds hike right. So what we thought through uh was more uh cautious approach on price uh growths while uh the focus was 41:21 41 minutes, 21 seconds on volume growth. Uh right. Uh so in the future what we think through is uh this 41:29 41 minutes, 29 seconds year we expect we should grow in line with the IPM uh where uh the volume growth the price growth and uh the NI 41:38 41 minutes, 38 seconds growth will all play a part uh and we expect uh to be uh doubledigit uh topline growth in the domestic formulation business. 41:48 41 minutes, 48 seconds Right. Thank you. Those are my questions. All the best. 41:54 41 minutes, 54 seconds Thank you. We have our next question of Aish Dari from Varyia. Please go ahead. 42:02 42 minutes, 2 seconds Hi. Uh can you just repeat that uh your uh in Ethereum or business you get a 42:09 42 minutes, 9 seconds markup on bill of material. So when the APA prices are going down, what does it do to your absolute amount of uh profits 42:18 42 minutes, 18 seconds you make or percentage margins you report? relatively when FP are going up then we experience a reverse of that phenomena. 42:28 42 minutes, 28 seconds Yes, you answered it correctly. These are person margins and hence if the input materials go down uh the absolute margins also go down. 42:38 42 minutes, 38 seconds Absolute profits go down. Okay. Correct. 42:42 42 minutes, 42 seconds And the second question I have is the trade genic side. You are a manufacturer of these drugs. Then why are you not making money? what's the wrong with this 42:50 42 minutes, 50 seconds uh industry structure that uh you should be the lowest cost uh producer of these drugs and directly selling to pharmacists uh through the distributors. 43:00 43 minutes So what is it that uh this segment is having an issue in the industry structure which is problematic phenomena. 43:08 43 minutes, 8 seconds So this is honestly a question of how uh and where we deploy our capital. Uh trade genics uh historically has been an 43:16 43 minutes, 16 seconds area where you have elongated working capital cycles across inventory and receivables. uh right and hence we thought through at one point in time 43:25 43 minutes, 25 seconds four five years back 22 we did almost 400 plus ks in our uh trade genics business right we scaled down simply 43:33 43 minutes, 33 seconds because uh it had elongated working capital cycles and the margin profile was not what we expected uh these to 43:41 43 minutes, 41 seconds return and hence uh it's a conscious call of capital reallocation okay thank 43:52 43 minutes, 52 seconds Thank you. We have our next question line of Dia from Safar Capital. Please go ahead. 44:00 44 minutes Audible. Yes. Yes, we can hear you. 44:06 44 minutes, 6 seconds What was the KX for FI26 and um how much are we going to spend in this year? 44:15 44 minutes, 15 seconds So FYI26 we did a capex of 222 crores and 44:22 44 minutes, 22 seconds this year we are targeting to keep our capex to a 300 crores. That's the target for a capex. 44:34 44 minutes, 34 seconds All right sir and any uh topline target for the whole year at 27? 44:41 44 minutes, 41 seconds No ma'am we we do not want to answer this question. We don't want to state future numbers. Thank you. 44:49 44 minutes, 49 seconds Thank you. 44:53 44 minutes, 53 seconds Thank you. We have the next question line of Anish Burman from Varia. Please go ahead. 45:00 45 minutes Yeah. Hi, good afternoon. Thanks for taking my question. Uh so I have a couple of questions. U when we had a phase of API declines in the last year 45:09 45 minutes, 9 seconds uh it was kind of led by FIFA prices and now when you please correct that understanding if it's wrong and now when 45:17 45 minutes, 17 seconds you say that sequentially there has been a little bit of bounce back is it fair to assume that the bounce back is also led by CIFA API prices? 45:26 45 minutes, 26 seconds Um so that so in the API business or the CDMO business the CDMO business you're talking about 45:33 45 minutes, 33 seconds yes uh but I want uh a view on the CIFA API prices. 45:38 45 minutes, 38 seconds Sure. So uh the his uh if you see uh an analyze the data not just capab most of the APIs over the last year have gone 45:47 45 minutes, 47 seconds down uh as simple as par paracetamol went down metformin went down and infectives went down. So all of those 45:54 45 minutes, 54 seconds went down uh rightly the ones which suffered uh a significant uh decline in 46:02 46 minutes, 2 seconds prices are the ones which picked up in this April post war. So the those numbers still have to come out because these are the numbers we're talking 46:09 46 minutes, 9 seconds about till March and likely we'll have received the order in February. Right? 46:13 46 minutes, 13 seconds So till that time the impact on API prices was not seen. Uh talking about Q1 across most of the APIs whether it is 46:22 46 minutes, 22 seconds Closen nonflowspins chronic APIs and so on whether imported domestically sourced we have seen that uh the API prices as a basket have started to go up. 46:35 46 minutes, 35 seconds Okay. And just to clarify, I think the question was asked earlier. When the API prices are going up, then your absolute 46:44 46 minutes, 44 seconds gross profit growth is higher than the volume growth. Is that a fair understanding? 46:49 46 minutes, 49 seconds Since the margins are linked to a percent, rightly so, right? So, factory operates as a at a uh nonformal link 46:58 46 minutes, 58 seconds fixed expenses, right? The labor, the unit manpower and so on. So uh one since the percent is on the gross uh input uh 47:08 47 minutes, 8 seconds cost uh as and when it fluctuates it fluctuates my um absolute margins. 47:16 47 minutes, 16 seconds Uh okay. Uh the last question was on uh the volume growth. Of course I mean last couple of quarters has seen such a 47:24 47 minutes, 24 seconds strong volume growth for like a very large flare uh like yourself. uh and you mentioned that it's coming from existing 47:32 47 minutes, 32 seconds customers which means that you're gaining wallet share from your existing customers. So I just wanted a little more color on how is that happening? I 47:41 47 minutes, 41 seconds mean are you gaining from let's say a little bit of the unorganized or less organized sector or are you gaining from 47:49 47 minutes, 49 seconds other competitor which are already compliant with schedule M and if yes then why is that happening? 47:56 47 minutes, 56 seconds So uh this is broad-based I think there's some volume share gain from their in-house production there is some volume gain share from what they uh used 48:05 48 minutes, 5 seconds to manufacture it from other uh CDM modes right so while we have not done that analysis of what percent comes where uh but this will also meaningfully 48:15 48 minutes, 15 seconds change every month on month on quarter quarter but what we are seeing is uh either new brands 48:21 48 minutes, 21 seconds from uh in-house or uh other CDMOS or existing brands which are sold build more uh which we already had are sold 48:29 48 minutes, 29 seconds more into the uh channel uh and hence we get a better order book for it. So the 48:36 48 minutes, 36 seconds all of it is contributing. So since as you rightly said on a large base such large volume growth so most of the 48:43 48 minutes, 43 seconds parameters will have to play out for this to sustain this. Okay. Thanks so thanks. 48:53 48 minutes, 53 seconds Thank you. 48:55 48 minutes, 55 seconds We have the next question from line of sake Kapoor from Kapour and company. Please go ahead. 49:06 49 minutes, 6 seconds Yeah. 49:08 49 minutes, 8 seconds Uh Namask hope not sir. I'm new to this company and the sector. So pardon me for my question. Sir, if we take our mix of 49:18 49 minutes, 18 seconds revenues and as alluded by you that we have pressure on the API segment and that getting negated with the current 49:26 49 minutes, 26 seconds year. So if you could just give us some more understanding with the type of commissioning of orders especially for the I think Zambia nation which you 49:36 49 minutes, 36 seconds mentioned how the current year uh probably shifts me up in terms of the different uh vertical I guess summary of the same. 49:45 49 minutes, 45 seconds Sure. So so CDMO we have talked about extensively right at least for the H1 we see uh strong volume growth and the API 49:53 49 minutes, 53 seconds prices I think should remain at current levels. Um so that's how we look at the CDMO segment. Uh the domestic marketing 50:01 50 minutes, 1 second we talked about we should uh be targeting an IPM level uh uh uh a low single digit a high single digit low 50:10 50 minutes, 10 seconds double digit kind of growth in the uh in the domestic uh acumentis for exports as well. While the last year was flat, this 50:18 50 minutes, 18 seconds year we expect to do a double-digit growth in that segment as well. And the margins should uh sustain the margin 50:25 50 minutes, 25 seconds profile should sustain. On the trade genics, we have already turned positive as we said this will not meaningfully contribute to our top line and bottom 50:32 50 minutes, 32 seconds line going forward and should not drain our P&L going ahead. on the API segment. 50:37 50 minutes, 37 seconds While we had a minus 40 kores of consistently for the last three years uh every year on our P&L this year we 50:44 50 minutes, 44 seconds expect uh the losses to come down sharply. Uh we expect uh that while the full year would still remain uh negative 50:53 50 minutes, 53 seconds this will be sizably lower and would have a significantly lower drag on our P&L. So this is how the five business 51:01 51 minutes, 1 second verticals will shape up. uh apart from this as you rightly said one more element is on Zambia uh Zambia will flow 51:08 51 minutes, 8 seconds in into our CDMO revenues uh so this will be as we said $25 million which at today's rate will be 230 odd kores uh 51:17 51 minutes, 17 seconds addition to our top line which we expect to deliver in Q2 Q3 subsequentially as we roll out uh the orders and get 51:25 51 minutes, 25 seconds confirmed purchase orders uh and uh this will be slightly at a margin similar to 51:33 51 minutes, 33 seconds CDMO business right so this is how the overall year is somewhat we are thinking through the European CDMO contract will 51:42 51 minutes, 42 seconds kick in from the next fiscal okay the then with the Jambia order is it a multi-year contract that we will be 51:50 51 minutes, 50 seconds executing or a one-time exercise so this is for two years $25 million each FI27 FI28 in parallel we have to 52:00 52 minutes commission the facility whether it takes 2 years 2 and a half years. This is our internal target, right? So FYI 29 is something somewhere we believe calendar 52:07 52 minutes, 7 seconds year 29 we will start the revenues from the Zambian facility which will gradually scale up in which we have a 51% equity share. 52:18 52 minutes, 18 seconds Okay. So this is different than the order which we are executing of 20 $25 million for the current year. I I could not get 52:26 52 minutes, 26 seconds initial. So the initial two years will seize these these supplies from the Indian facilities will seize after FI28 52:34 52 minutes, 34 seconds and once in FI29 or FI30 we have the plant cleared for commercial production we will start ramping up that facility 52:43 52 minutes, 43 seconds uh from uh and supply to Zambian government local Zambian private market or neighboring nations from that facility. Zambia today is largely a $200 52:51 52 minutes, 51 seconds million farmer market and we expect to gain a sizable share within that market where the government itself procures over 80% of the products which are largely imported. 53:02 53 minutes, 2 seconds Okay. And what is the total investment that we have enriched in the facility in the Zambian nation 53:09 53 minutes, 9 seconds across uh building across uh products tech transfers facilities machine land everything uh tangible intangible this 53:17 53 minutes, 17 seconds is uh a $45 million which will be born 51% by us 53:24 53 minutes, 24 seconds right sir uh thank thank you sir I joined the queue and all the best to the team thank Thank you. 53:32 53 minutes, 32 seconds Thank you. We have the next line of richer from Equity Master. Please go ahead. 53:38 53 minutes, 38 seconds Thank you for the opportunity. Am I audible? Yes, we can hear you. 53:42 53 minutes, 42 seconds Yeah. So my question is on the European contract for which you have already received an advanc. Uh from what I understand it's not based on you know 53:51 53 minutes, 51 seconds cost plus basis but it's a lumpsum contract. So could you just give some insight on you know how the margins could play out in case the uh in case 53:59 53 minutes, 59 seconds there's an inflationary environment in the raw material uh site. 54:04 54 minutes, 4 seconds So uh right richer so this is while we were finalizing the contract. So this is an established product established molecule over last uh few decades now. 54:13 54 minutes, 13 seconds So uh we have already taken into our costing the inflationary patterns of that API and the input materials right. 54:22 54 minutes, 22 seconds So as at the current uh API prices we are fairly confident this remains our comfort zone of the margins we're 54:31 54 minutes, 31 seconds thinking through and uh you're right this is a fixed price contract till 2032. 54:37 54 minutes, 37 seconds So at current API prices the margins that you expect are more or less in line with the current CDMO or is it expected to be higher? 54:45 54 minutes, 45 seconds It should be uh similar or higher teams. 54:48 54 minutes, 48 seconds Uh so this is what we expect. Okay. And apart from this European contract, what kind of uh international mix do you 54:56 54 minutes, 56 seconds expect within the CDMO itself? Let's say two to three years now. 55:02 55 minutes, 2 seconds Right. So, similar efforts are going being driven across oral solids, injectables, across niche products like uh hormones and anti-infectives. Right. 55:11 55 minutes, 11 seconds So we expect that over the next 2 three years we will have uh 8 to 10 uh global customers for 55:20 55 minutes, 20 seconds whom we will serve whether large or small that has still to be play out but we expect within CDMO we should have 8 to 10 customers which could be Indian 55:29 55 minutes, 29 seconds players or group European global players as well for whom we'll do CDMO services. 55:37 55 minutes, 37 seconds Uh okay. Okay. Thank you so much and all that. Thank you. 55:45 55 minutes, 45 seconds We have the next question on the line of Abdul. Please go ahead. 55:52 55 minutes, 52 seconds Yeah. Hi. I hope I'm audible. So thank you for the opportunity. Uh so first question with you know just a follow up 55:59 55 minutes, 59 seconds on the previous participants. So about uh you know uh having a CDMO relation with 8 to 10 uh uh overseas customers. 56:09 56 minutes, 9 seconds So I mean if you can talk about you know what stage we are into in terms of discussion or and you know what kind of 56:16 56 minutes, 16 seconds an investment we will have to uh do to bring or you know take that relationship ahead with those customers. 56:25 56 minutes, 25 seconds So but as this these are long-term contracts right and require sizable 56:33 56 minutes, 33 seconds time investment as well. Uh so as as I heard you right up so you're talking future CTMO export customers right yes yes 56:41 56 minutes, 41 seconds so so these are these require sizable investment in time doia clearances and so on right so require two three years 56:50 56 minutes, 50 seconds till we ramp them up so cap in terms of manufacturing capabilities we are largely through so we are only taking our those facilities which we have 56:58 56 minutes, 58 seconds already constructed so we are not uh thinking to a new facility a new doses form and then take it up to the global levels We already have a new injectable 57:06 57 minutes, 6 seconds facility. We already have a hormone facility in continuation with the existing approvals. Right? So uh that is 57:12 57 minutes, 12 seconds there. So our pitch remains similar an Indian manufacturer with capabilities across R&D regulatory 57:20 57 minutes, 20 seconds quality um a track record of serving MNC's for over a decade now with costconcious quality conscious 57:28 57 minutes, 28 seconds manufacturing. Right? So, so the pitch remains similar and uh this is how we proceed. It could be across tech 57:35 57 minutes, 35 seconds transfer um from their existing manufacturing site or a completely new development which in most of the cases we are helping our partners in our R&D centers only. 57:47 57 minutes, 47 seconds Got it. Got it. And one more if I may. 57:50 57 minutes, 50 seconds So on the GLP front you know we have seen a good amount of traction getting developed with the genetic pharma 57:57 57 minutes, 57 seconds companies. So are we also supplying uh uh you know GLP drugs either in a injectable or an oral solid dosage form to our customers. 58:08 58 minutes, 8 seconds Uh so obviously we all recognize and acknowledge GLP is a large and a massive opportunity. As of now we are still 58:15 58 minutes, 15 seconds evaluating when to enter at which states to enter given if you also have read some news last week when we have been witnessing in the industry itself the pricing still remains very volatile. 58:28 58 minutes, 28 seconds uh uh and going down south right so uh we since uh we first have to think through who will our EPA partners be who 58:36 58 minutes, 36 seconds what is the right stage of investment into any dosage form if required so we'll enter the GLP market we'll inform 58:44 58 minutes, 44 seconds in our subsequent calls uh what is our strategy going forward all right got it thank you 58:56 58 minutes, 56 seconds thank Okay, we have the next question line of sigil kapoor from anti fragile thinking. Please go ahead. 59:03 59 minutes, 3 seconds Thank you call. Hello Kapoor. Yes, please go ahead with the question. 59:11 59 minutes, 11 seconds Yeah. Hi. 59:12 59 minutes, 12 seconds Yeah. Hi. Thank you. Thank you for the followup. Um so just a quick one really. 59:16 59 minutes, 16 seconds Um given the net cash um on the balance sheet we have and the the sustainable operating cash flow there must have been 59:25 59 minutes, 25 seconds many options on the table in terms of um you know should we do X or Y in terms of both domestic and international expansion. Can you just help me out with 59:34 59 minutes, 34 seconds one or two areas which the team evaluated and decided not to pursue despite a strong cash position? Thank you. 59:42 59 minutes, 42 seconds Sure. Sure. So if I talk about inorganic growth for so we there are some dosage forms we still don't have for example 59:49 59 minutes, 49 seconds meter dose inhalers we don't have for example we still don't have oncology injectables right and few other doses forms uh in small molecules within the 59:58 59 minutes, 58 seconds large spaces we are still not present into the large uh molecules right so these are few opportunities we evaluated 1:00:06 1 hour, 6 seconds u and obviously we have to be uh cognizant of also uh uh the uh the 1:00:14 1 hour, 14 seconds investment and the return expectation, right? So at times it does not match up to our expected valuations or it does 1:00:23 1 hour, 23 seconds not match up to the plant standards or the product standards we wish for. 1:00:27 1 hour, 27 seconds Right? And hence these are the areas where some of the conversations drop. Uh also on organic front we were also 1:00:34 1 hour, 34 seconds contemplating long back on the expansion of our rural solids which I recently mentioned we are kicking off now. Right? So these are the 1:00:42 1 hour, 42 seconds decisions that you take as the business and the volumes progresses that which are the areas where uh we can invest. 1:00:49 1 hour, 49 seconds Similarly for example in the acument space as well we can have options of brand or a portfolio uh acquisitions as 1:00:57 1 hour, 57 seconds well but the current valuations in the market for branded play are significantly higher than what we currently trade at. Right? So all of 1:01:06 1 hour, 1 minute, 6 seconds those decisions come into play and we and a team have been consciously evaluating a lot of opportunities and hopefully we should deploy some capital in the near future. 1:01:18 1 hour, 1 minute, 18 seconds Very helpful. Thank you. That's all I had. Thank you so much. 1:01:24 1 hour, 1 minute, 24 seconds Thank you. We have the next question from the line of Nitesh from Christ Capital. Please go ahead. Hi, thank you for taking the question. 1:01:32 1 hour, 1 minute, 32 seconds uh just with respect to our international CDMO contract. So when I'm looking at FI28 so we will have around 70 million of U 1:01:40 1 hour, 1 minute, 40 seconds revenue right from Zambia and the EU contract which is around 680 crores of topline. So um you know is this a right way to say that you know export CDMO 1:01:49 1 hour, 1 minute, 49 seconds will be around 15 plus% of uh you know 15 plus% share in our CDMO revenues in FI28. 1:01:58 1 hour, 1 minute, 58 seconds uh simply on the Excel looks a good number. Uh uh yes. So this is how we think through uh that next year we 1:02:06 1 hour, 2 minutes, 6 seconds should once we start right as I said on a matt basis the European contract will give us $35 million euros and uh the 1:02:15 1 hour, 2 minutes, 15 seconds Zambia ones are FI driven right so we'll have FI2 $25 million this time in 28 and FI27 and 28 each. 1:02:25 1 hour, 2 minutes, 25 seconds So just to follow up you know these you know these contracts will effectively have uh assuming we'll have better margin just because of you know 1:02:32 1 hour, 2 minutes, 32 seconds favorable FX movement. So do we see a CDMO margin which has been in the 13 to 14% level improve to a 15 16% level. 1:02:41 1 hour, 2 minutes, 41 seconds Uh we can think through that the base margins uh for the business once both of these contracts are in full swing will improve. 1:02:49 1 hour, 2 minutes, 49 seconds Okay. Thank you. 1:02:54 1 hour, 2 minutes, 54 seconds Thank you ladies and gentlemen. That was the last question. 1:03:00 1 hour, 3 minutes I would now like to hand the conference over to Anki Jane for any closing comments. 1:03:08 1 hour, 3 minutes, 8 seconds Uh thank you everyone for attending the Q4 and FI26 funing call for ACOM. If you have any remaining questions, you can reach out to the investor relations teams. Thank you and have a good day. 1:03:19 1 hour, 3 minutes, 19 seconds Thank you. Namastra. 1:03:22 1 hour, 3 minutes, 22 seconds Thank you on behalf of Welcomes Drugs and Pharmaceuticals. That concludes this conference.