Alivus Life Sciences Limited — Q3 FY26

Alivus Life Sciences Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=NC_qCcyM7_0 Published: 3 months ago

0:01 1 second Ladies and gentlemen, good evening and welcome to Alias Life Sciences Limited Q3 FYI26 conference call. As a reminder, 0:10 10 seconds all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should 0:18 18 seconds you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. I now hand the 0:26 26 seconds conference over to Miss Swami Rao from Alive Life Sciences. Thank you and over to you Miss Raal. 0:33 33 seconds Good evening everyone. I welcome you all to the earnings call of Allitis Life Sciences Limited for the quarter ending December 31st 2025. From Alive Life 0:41 41 seconds Sciences, we have with us Dr. Yaji, our MDN CEO and Mr. Tishan Mistri, our CFO. 0:46 46 seconds Our board has approved the results for the quarter ending December 31st, 2025. 0:51 51 seconds We have released it to this topic pages and updated it on our website. Please note that the recording and transcript of this call will be available on the website of the company. Now I'd like to 1:00 1 minute draw your attention to the fact that some of the information shared as part of this call especially information with respect to our plans and strategy may contain certain forwardlooking 1:08 1 minute, 8 seconds statements that involve risks and uncertainties. These statements are based on current expectations, forecasts and adoptions that are subject to risk 1:16 1 minute, 16 seconds which could cause actual results to differ materially from these statements depending upon the economy's conditions, government policies and other implementing factors. Such statement 1:24 1 minute, 24 seconds should not be regarded by recipients as due to their own judgment. The company undertakes no obligation to update or revise any probability statement or act 1:32 1 minute, 32 seconds regards materially from the express or implied by ID. With that I invite Dr. to say a few words. Thank you doctor. 1:42 1 minute, 42 seconds Thank you Shami. Uh good evening everyone and welcome to our Q3 FI26 earnings call. Thank you for joining us 1:49 1 minute, 49 seconds and I would like to extend my warm wish new wishes to all of you. Before we discuss the company's quarterly 1:56 1 minute, 56 seconds performance, allow me to outline the broader industry landscape that is influencing our business environment. 2:01 2 minutes, 1 second The global farmer industry continues to evolve amid a dynamic macroeconomic and regulatory environment. Demand remains 2:10 2 minutes, 10 seconds resilient, supported by an aging population, rising chronic disease prevalence, and sustained healthcare spending. We are seeing a gradual pickup 2:18 2 minutes, 18 seconds across generics, APIs and CDMO services while tighter regulatory scrutiny and supply chain de-risking are reinforcing 2:26 2 minutes, 26 seconds the need for quality compliance and reliable partners. While some parts of the market continue to face near-term 2:34 2 minutes, 34 seconds challenges, the long-term outlook for the farmer industry remains encouraging. 2:38 2 minutes, 38 seconds Uh with this let me draw your attention to our performance for the quarter and 9 months FI26. For Q3 we reported our 2:48 2 minutes, 48 seconds highest ever revenue of 673 crores registering a growth of 14.4% Qoq and 2:55 2 minutes, 55 seconds 4.8% YI. Performance during the quarter was strong across the board with business firing on all cylinders. We saw 3:04 3 minutes, 4 seconds a strong recovery in the CDMO business as new projects began contributing alongside continued momentum from the 3:11 3 minutes, 11 seconds API generics business in red markets uh such as Europe, Japan, Latim, RO and 3:19 3 minutes, 19 seconds India, recording robust performance and contributing meaningfully to overall revenue expansion. As expected, GPL 3:27 3 minutes, 27 seconds business also saw recovery during the quarter. Revenues for 9 months stood at uh 1863 crores registering a growth of 7.2%. 3:38 3 minutes, 38 seconds More importantly, our nonGPL business grew at 16.1% driven by growth across markets. This 3:47 3 minutes, 47 seconds reflects the underlying strength of our diversified business across geographies and we expect this to continue its 3:55 3 minutes, 55 seconds momentum in the overall uh growth driven by strong demand across all markets. Moving on to our profits 4:03 4 minutes, 3 seconds for the quarter. Our gross margin for the quarter was 58.9% up 330 bips y. Our 4:11 4 minutes, 11 seconds margin for the quarter was 36.4% 4% up 510 pips y our highest ever reported quarterly margins. Margins improved on 4:20 4 minutes, 20 seconds the back of new product launches, favorable product mix and enhanced operational efficiencies. I am pleased to share that our CDMO segment has made 4:29 4 minutes, 29 seconds a strong recovery delivering an exceptional performance in Q3 with revenue growth of 100% QoQ and 85.3% YI 4:39 4 minutes, 39 seconds in line with our expectations for a second half turnaround. 4:44 4 minutes, 44 seconds This growth was driven by robust traction in the newer CDMO projects supported by revenue from the regular 4:52 4 minutes, 52 seconds CDMO projects. Our expansion initiatives at Sholapur, Ankleshwar and Bah are progressing as planned. Our pipeline 5:01 5 minutes, 1 second remains robust with 595 DMF and C filings globally as on December 31st, 2025. The high potent API 5:10 5 minutes, 10 seconds portfolio remains on the development path with 27 products in the active grid representing a total addressable market of $70 billion. 5:20 5 minutes, 20 seconds Of these nine are validated, seven are in advanced stages of development and the remaining 11 products are 5:28 5 minutes, 28 seconds progressing through lab development stages. Going forward, we continue to expect high singledigit revenue growth 5:35 5 minutes, 35 seconds for FI26 driven by strong and profitable expansion across our diversified nonGPL 5:43 5 minutes, 43 seconds segment and the continued ramp up of CDMO projects. We remain confident in maintaining healthy margins and expected 5:50 5 minutes, 50 seconds to range between 30 to 32% going forward higher than our earlier guidance of 28 to 30%. 5:58 5 minutes, 58 seconds This is catalyzed by operational efficiencies and contributions from new product launches a reflection of the strength and resilience of our business 6:06 6 minutes, 6 seconds model. Uh so with this I now turn the floor to our CFO Tashar Mistri who will walk you through our financial performance for the quarter in depth. 6:16 6 minutes, 16 seconds over Dr. 6:21 6 minutes, 21 seconds Good evening everyone welcome to our Q3 FI26 servings call before we take [clears throat] questions from you all I 6:29 6 minutes, 29 seconds would like to highlight the key performance updates for the quarter and 9 months ended 31st December 2025 6:36 6 minutes, 36 seconds for Q3 FI26 revenue from operations stood at rupees 673 crores a growth of 6:41 6 minutes, 41 seconds 14.4% Q and 4.8% 8% year on year. Gross profit for the quarter was rupees 97 6:49 6 minutes, 49 seconds crores up 16.9% quarteron quarter and 11.2% year one year. Gross margins for 6:56 6 minutes, 56 seconds the quarter stood at 58.9% driven by new launches product mix and official efficiency. The for the quarter was at 7:04 7 minutes, 4 seconds rupes 245 crores up 26.5% ofq and 22.1% yearonear. 7:10 7 minutes, 10 seconds The beta margin for the quarter was 36.4% 4% up 340 basis points quarter on quarter and 510 basis points year on 7:17 7 minutes, 17 seconds year. These are the highest margins we have delivered to date. 7:22 7 minutes, 22 seconds Back for the quarter stood at rupees 150 crores with back margins at 22.3%. 7:27 7 minutes, 27 seconds For 9 months FI26 revenue from operation stood at 1,863 crores a growth of 7.2% yearon year. Gross profit for 9 months 7:36 7 minutes, 36 seconds was at rupes 1607 crores up 13.6% yearon year. Gross margins for 9 months stood at 57.3%. 7:42 7 minutes, 42 seconds Evita for 9 months was at 620 20 kores up 22% year on year. Evita margin for 9 months was 33.3% up 400 basis points year on year. 7:54 7 minutes, 54 seconds Pack for 9 months stood at rupees 42 crores with fat margins at 21.6%. 8:00 8 minutes Turning to therapeutic mix CBS and CNS continue to lead the growth during the quarter with both therapies contributing 51% to the top line. Ronic service contributed 66% of the top in QC FI26. 8:12 8 minutes, 12 seconds R&D expendure for QC FI26 was rupes 23 crores which was 3.4% of our sales. For 9 months FI26 it was 66 crores 3.5% of 8:22 8 minutes, 22 seconds our sales on the balance sheet and cash moment cap for the quarter was rupes 105 crores and rups 218 crores for 9 months. 8:30 8 minutes, 30 seconds For 26 we now guide the capex to be at around rupes 450 crores compared to our earlier items of 600 crores. The balance 8:39 8 minutes, 39 seconds of rupes 150 crores is expected to be deferred to FI27. 8:44 8 minutes, 44 seconds We continue to remain an interest company with strong pre-cash flow generation of rupes 221 crores in 9 months FI26 and the cash and cash 8:52 8 minutes, 52 seconds equivalent of rupees 6 of rupees 733 crores on the books as of 31st December 2025. 8:59 8 minutes, 59 seconds In closing, we are confident that the continued demand and improved performance in H2 FI26 will help us achieve steady growth for the year. With that, let us open the floor for Q&A. 9:11 9 minutes, 11 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone 9:19 9 minutes, 19 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a 9:27 9 minutes, 27 seconds question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 9:43 9 minutes, 43 seconds The first question is from the line of Pratik Kotari from Munich PMS. Please go ahead. 9:49 9 minutes, 49 seconds Yes, sir. Good afternoon sir. Uh good evening. Thank you. Uh so one question I mean despite I mean if you look at our numbers over last 2 three four years 9:57 9 minutes, 57 seconds despite KI going away uh despite R&D spend which used to be 2 and a half% of sales ramping up ramping it up to three 10:06 10 minutes, 6 seconds and a half 4%. We still have been able to maintain margins and now we are kind of highlighting that we'll be able to even go beyond that. So uh this margin 10:15 10 minutes, 15 seconds differential from what it was 2 3 years back to now is much higher than what is being reported because of this things that are happening below. So you can 10:23 10 minutes, 23 seconds just highlight what has changed in terms of our business. I mean what is it that we're doing? What is it that we're intending to do? Uh which is helping with all of this. 10:33 10 minutes, 33 seconds Okay. So see there are three elements here. Uh one is that CDMO has begun to contribute more. 10:42 10 minutes, 42 seconds uh there's also launches that are happening uh you know across markets and usually newer products tend to get us 10:50 10 minutes, 50 seconds much higher margins okay u I mean in the first couple of years we can expect to see uh pretty good margins you know with 11:00 11 minutes newer uh launches and then it begins to settle down so we've had both of them plus on the operational side as well uh 11:08 11 minutes, 8 seconds we've had uh you know uh we performed performed a lot better in terms of uh both uh raw material costs as well as uh the uh you know on the operation side. 11:20 11 minutes, 20 seconds So all this put together and this is sustainable. Okay. I mean that that the thing is that that's why we feel confident in guiding to a higher margin. 11:29 11 minutes, 29 seconds So um this is what has done it right. I mean we were also a little bit you know when PLI went away a couple of years ago I mean we were also you know wondering 11:38 11 minutes, 38 seconds whether we'll be able to bring it back but we've been able to do that and it's happened steadily if you see the last few quarters right we have been inching up and so that confidence is very high 11:47 11 minutes, 47 seconds that we can we can do this and continue continue the momentum correct correct and and lastly on this 11:55 11 minutes, 55 seconds capacity so I mean in terms of our breakup I mean it seems there is some delay in this capacity coming up also 12:02 12 minutes, 2 seconds Shapur it seems the capacity that we had planned or guided earlier it seems to be much lower be it on the first backward 12:10 12 minutes, 10 seconds integration or even the phase one can just highlight what has changed how is apply from what we had said earlier to now 12:18 12 minutes, 18 seconds shapur is a little delayed it's not going to impact business because see more than 80% of our business comes from the reg markets okay and the ankles the 12:28 12 minutes, 28 seconds h capacity expansion is well on track uh it you know and it'll deliver and basically give us the runway for you 12:35 12 minutes, 35 seconds know at least the next couple of years for the reg markets so no challenge there uh we have mahal as well right uh 12:43 12 minutes, 43 seconds to service the ro markets and kurum so all that put together puts us in a reasonable position with respect to 12:51 12 minutes, 51 seconds capacity shapur is de you know delayed by like 3 months so we expect shapur to start uh you know operations by July of 13:01 13 minutes, 1 second this So so not delay I mean more like first phase we wanted to do about 600k now we 13:07 13 minutes, 7 seconds doing about 450 500 kl so even the capacity that we're putting up initially has changed 13:15 13 minutes, 15 seconds slightly because see we we as we moved along right there's been a fair amount of mapping that has happened right and 13:23 13 minutes, 23 seconds we've always said that our capacity expansions are going to be calibrated right because there's no point in building too much capacity and not not 13:31 13 minutes, 31 seconds utilizing it you just create more under abdoption right so there you know we we've sort of gone you know with a reasonable product mapping that will 13:39 13 minutes, 39 seconds that will happen already for sharapur and uh you know as soon as the plant starts in July we'll be able to see a 13:46 13 minutes, 46 seconds fair amount of utilization of the asset and in your opinion s how how long does it take for a like solur will start with 13:54 13 minutes, 54 seconds ro markets and then gradually shifts to regulated market so what would that timeline 14:01 14 minutes, 1 second Uh see if we we we are going to validate products in shorapur uh this year itself 14:09 14 minutes, 9 seconds uh you know this this calendar year uh the idea here is to go for you know shortage products so that we can trigger 14:17 14 minutes, 17 seconds an empty inspection soon. So there will be uh quite a bit of validation happening as well in shapur apart from 14:24 14 minutes, 24 seconds the ro markets uh you know servicing the demand from ro markets. So it's going to be a kind of dual approach and uh 14:32 14 minutes, 32 seconds hopefully you know if we can trigger an inspection in a year's time then uh you know I mean by fi 20 late FI28 we should 14:42 14 minutes, 42 seconds see reg regulated products happening from shorapur as well. Great. Thank you and all the rest. 14:50 14 minutes, 50 seconds Thank you. 14:52 14 minutes, 52 seconds Thank you. Participant who wishes to ask a question may press star and one now. 14:59 14 minutes, 59 seconds The next question is from the line of Ahmed Madha from Unified Capital. Please go ahead. 15:04 15 minutes, 4 seconds Yeah, good evening and thanks for the opportunity. Uh just to uh understand the margin bit little better. Can you 15:11 15 minutes, 11 seconds elaborate or explain [clears throat] little granularly in I think in presentation you have me mentioned three 15:19 15 minutes, 19 seconds levers. One is the new launches. Second is the CDMO business and third the efficiency. If you can break it up and 15:26 15 minutes, 26 seconds explain a little bit better how the what is explained the uh margin improvement in current quarter and your overall guidance as well. 15:35 15 minutes, 35 seconds So let's go backwards when it comes to operational efficiency that impacts margins pretty much across the board. Uh 15:43 15 minutes, 43 seconds okay because there's uh you know there I mean it's all common there right? uh when it comes to launches obviously it's 15:51 15 minutes, 51 seconds those particular products that we've launched that uh are contributing much higher margin 15:58 15 minutes, 58 seconds uh you know and uh again uh I explained in the last call that we've had launches 16:05 16 minutes, 5 seconds uh uh you know in in Europe in China um in Latam okay and Russia okay so these 16:15 16 minutes, 15 seconds all these launches have contributed very significantly to the margin. Uh, interestingly the same products will get you know as 16:24 16 minutes, 24 seconds patents expire uh in in Europe as well as North America and so on. So this sort of runway with the newer products is 16:33 16 minutes, 33 seconds going to last us for some time and uh that's the second lever. With respect to 16:38 16 minutes, 38 seconds CDMO um we had uh you know uh expected that project 4 and project 5 would kick 16:48 16 minutes, 48 seconds in uh in second half and that's exactly what had happened. So project four had started off in H1 uh but the volume 16:56 16 minutes, 56 seconds pickup has happened much more significantly in H2 and project 5 has also started kicking in. So again this 17:04 17 minutes, 4 seconds also being sustainable uh going forward uh is something that gives us the confidence that we can uh you know u 17:13 17 minutes, 13 seconds sort of uh you know get to those margin levels pretty comfortably. 17:19 17 minutes, 19 seconds And when you say efficiencies, is it in terms of yields and the raw material cost or is it below the raw material cost line? 17:27 17 minutes, 27 seconds It's both. It's both. So I mean there's been a fair amount of work you know on key products that has started uh giving 17:36 17 minutes, 36 seconds us that benefit on better yields. Uh so you know basically less uh utilization 17:42 17 minutes, 42 seconds of raw materials and uh even on the energy side uh and um you know basically 17:51 17 minutes, 51 seconds we we are getting lower overheads on the products. So that that has also helped us. Okay. And in terms of capex we 18:00 18 minutes explained to the earlier participant regarding how it doesn't impact our growth. So um I mean with the little bit 18:08 18 minutes, 8 seconds of delay little bit of capacity sort of uh fine-tuning in terms of how much you will put uh does that sort of uh uh risk 18:17 18 minutes, 17 seconds our growth for next year or we'll have enough capacity and from existing as well as from English with the hedge from 18:24 18 minutes, 24 seconds July to deliver us a decent growth for next year and you can also please comment how you see the next year growth 18:32 18 minutes, 32 seconds based on the launches uh and the the existing products the capacity is no longer a limitation. 18:42 18 minutes, 42 seconds Okay, we were in a sort of uh bind some time back about a year year and a half back when we were running neck and neck 18:49 18 minutes, 49 seconds with the recent brownfield expansions that we've had at the h andwar and uh 18:57 18 minutes, 57 seconds they are going to become operational in the second quarter of next year both the h andwar we should be fairly comfortable 19:04 19 minutes, 4 seconds to uh service the reg markets and like I said earlier uh both these expansions on the brownfield side should give us a 19:13 19 minutes, 13 seconds runway of at least another two years comfortably for the egg markets. Uh when Sholaku coming in, we have uh a little 19:20 19 minutes, 20 seconds more leverage in terms of moving the RO products into Solapur and that uh that can further free up uh 19:30 19 minutes, 30 seconds capacity if necessary. So capacity is not a challenge uh anymore. 19:38 19 minutes, 38 seconds uh with respect to uh the growth for next year um again uh you know I'm 19:47 19 minutes, 47 seconds talking in terms of a fair amount of visibility that we have and so we want to continue to guide to a high 19:55 19 minutes, 55 seconds singledigit uh growth uh you know for next year as well but certainly the margins will remain in the 30 to 32% uh 20:05 20 minutes, 5 seconds range Got it. And in terms of uh so CDMO business 20:12 20 minutes, 12 seconds the number of projects that we have uh is there any more visibility for new projects getting added uh any 20:19 20 minutes, 19 seconds conversations are at the second of sort of conclusion or uh the project addition will be gradual from here on beyond the five we have I'm assuming five. 20:31 20 minutes, 31 seconds Yeah. So there is good traction on CDMO. 20:34 20 minutes, 34 seconds Hopefully we'll conclude one or two projects by the end of uh middle of the calendar year. So let's say first 20:41 20 minutes, 41 seconds quarter uh we should conclude uh things are going well. We have even supplied some you know early quantities to the customers. So let's see how that goes. 20:52 20 minutes, 52 seconds uh again because we have focused on the red markets here uh for CDM there's 20:59 20 minutes, 59 seconds always that lag time in terms of approval but to lock in uh I'm pretty confident that you know by first quarter 21:06 21 minutes, 6 seconds of next year we should have we would have brought in one or maybe 21:13 21 minutes, 13 seconds two projects more into the sure and in terms of pricing environment 21:21 21 minutes, 21 seconds uh uh has there been any improvement or it continues to be a sort of a significant erosion kind of an 21:28 21 minutes, 28 seconds environment and from our portfolio perspective uh new launches have done well but uh is there sort of a a pricing 21:35 21 minutes, 35 seconds issue industry for the sort of base business uh existing molecule or uh has there been any change or is it steady state 21:44 21 minutes, 44 seconds I would say it's fairly stable I mean on our entire market we are guiding to four four and a half% margin uh you of 21:51 21 minutes, 51 seconds erosion. So it's okay. I mean we are we are comfortable. Plus what happens is we make sure that you know on those 21:59 21 minutes, 59 seconds products where we are likely to see a price erosion we do have the next generation process lined up. So margins are not going to get impacted as a result of price erosion. 22:10 22 minutes, 10 seconds Sure. And last bookkeeping question. uh in the presentation and presently we have three cash flow number if you can 22:18 22 minutes, 18 seconds please share the operating cash flow number for 9 months or Q3. 22:24 22 minutes, 24 seconds Yeah, the operating cash flow is uh 22:33 22 minutes, 33 seconds about 439 crores uh before. So that's operating cash flow. 22:40 22 minutes, 40 seconds Okay. Yeah. Thank you so much. 22:44 22 minutes, 44 seconds This is for the 9 months that I sure got it. Thank you. 22:50 22 minutes, 50 seconds Thank you. The next question is from the line of yogi from Omega Portfolio Advisor. Please go ahead. Hi, 22:58 22 minutes, 58 seconds thank you for taking my question. My question mainly had to do with the company's growth plans given that we have a high level of capability and a 23:06 23 minutes, 6 seconds lot of cash on the balance sheet. Why is there any reason we aren't willing to be more aggressive either with our organic expansion or our inorganic expansion? 23:17 23 minutes, 17 seconds See organic is pretty well scripted. 23:21 23 minutes, 21 seconds Okay. In terms of the portfolio buildup, the choice of molecules that we are making, the capacity that we are 23:29 23 minutes, 29 seconds building up to service uh the growth in the business uh through launches through you know with new launches and so on coming up in the next few years. Right? 23:38 23 minutes, 38 seconds So that uh is pretty much on track. Um I hear you right. in terms of the 23:45 23 minutes, 45 seconds inorganic part. But uh see we we want to be sure that and even that is well 23:52 23 minutes, 52 seconds defined uh within our plans right in terms of what kind of uh you know where we need to go in terms of inorganic. So 24:01 24 minutes, 1 second we are we are looking out. It's not like you know we we have shut our minds to that. We are pretty clear that you know 24:08 24 minutes, 8 seconds when the right opportunity comes along u we will take the right steps. So, but uh obviously we are not just going to do 24:16 24 minutes, 16 seconds things willy-nilly. I mean, you know, it's hard on money and we're going to make sure that it's uh deployed well. 24:23 24 minutes, 23 seconds Okay, great. My second question had to do with the R&D as I understand we are will be inaugurating a new R&D facility. 24:30 24 minutes, 30 seconds So, um how are we trying to improve our R&D capabilities over the next few years? If you could share some um idea with us like what would it be like? 24:41 24 minutes, 41 seconds So there's going to be u well I won't say improve but I would say basically add to what we already have right uh we 24:50 24 minutes, 50 seconds are turning out molecules uh pretty quickly uh and also the complexity of molecules that we have is 24:58 24 minutes, 58 seconds uh increasing in terms of complexity. So R&D has been pretty productive you know um in all uh the question though is what 25:08 25 minutes, 8 seconds else can we do? So we are looking very uh you know in a very focused way at um 25:16 25 minutes, 16 seconds flow chemistry because it has already yielded uh good uh commercial benefit uh and 25:24 25 minutes, 24 seconds that uh effort is going to you know increase substantially. There's also opportunities on the green chemistry 25:32 25 minutes, 32 seconds side which we are working and uh you know I keep talking about API plus from 25:38 25 minutes, 38 seconds time to time. So in order to you know uh do more there we are adding things like 25:46 25 minutes, 46 seconds particle engineering and so on to to benefit what we already have for uh more enhanced formulations. 25:55 25 minutes, 55 seconds So that all that put together is going to give uh uh make our R&D even uh much 26:02 26 minutes, 2 seconds more uh you know productive and you know give us more in terms of uh new business opportunities. 26:11 26 minutes, 11 seconds Okay, fair enough. My final question is about the risk we're facing. So if you could comment more on the risk for facing either in terms of say getting 26:18 26 minutes, 18 seconds more CDMO contracts or in general the market environment is if there's any comment you could give us about that. 26:28 26 minutes, 28 seconds Uh well I mean in terms of risks uh the geopolitical situation is always 26:35 26 minutes, 35 seconds something that we worry about because we have an international business and we don't know what part of the world will heat up when I mean you know uh you know 26:43 26 minutes, 43 seconds how things are sort of happening everywhere right so given the fact that we have a global business right something could get 26:51 26 minutes, 51 seconds impacted somewhere but then that's also a positive because you know no particular area in the world is going to impact us very badly right I mean this 27:00 27 minutes we've seen during covid we saw this uh even before covid right um where we were 27:07 27 minutes, 7 seconds basically because we were well diversified across geographies right we were able to manage you know small uh 27:14 27 minutes, 14 seconds you know hits here and there so risks are I mean not quantifiable at this point right things seem to be going 27:23 27 minutes, 23 seconds pretty well but like I said the geopolitical environment is is extremely uh fragile right now. So move on. 27:31 27 minutes, 31 seconds Now my question was more with regards to the CDMO business. Do we see any threats to the CDMO business because it's still a young business which we plan to grow. 27:40 27 minutes, 40 seconds So are there any risk you're facing in getting uh more contracts towards the business or is everything all right on that front? 27:49 27 minutes, 49 seconds No, in fact things have only become better because I mean having left uh you know the Greg Glenmark umbrella I mean we are no longer looked at as a kind of 27:58 27 minutes, 58 seconds you know part of a big farmer group right that you know innovators do I with a bit of suspicion right uh although 28:07 28 minutes, 7 seconds even when we were under the Glenmark umbrella we were operating independently right and there was no real uh you know interference or any kind of thing from 28:15 28 minutes, 15 seconds the parent but Still it's a perception right people tend to look at you differently so I mean now that that has 28:22 28 minutes, 22 seconds also gone we we are uh looked at more favorably uh by many more companies so I 28:29 28 minutes, 29 seconds don't see a risk again we basically are banking on the strength of a very strong 28:35 28 minutes, 35 seconds process development platform which we can customize for our customers 28:41 28 minutes, 41 seconds uh along with a you know welloiled uh manufacturing platform again with all approvals from you know major regulatory agencies. 28:52 28 minutes, 52 seconds Okay. Thank you so much Dr. Yeah sure. Welcome. Yes. 29:00 29 minutes Thank you. 29:01 29 minutes, 1 second Ladies and gentlemen to ask a question you may please press star and one. Now the next question is from the line of 29:09 29 minutes, 9 seconds Krishna Indu Saha from Quantum Asset Management. Please go ahead. 29:14 29 minutes, 14 seconds Yeah. Hi. Thanks. uh especially in the session Dr. which uh no spoke about. 29:22 29 minutes, 22 seconds Mr. Saha, we are unable to hear you clearly sir. Can you hear me now? Hello. Your voice is sounding very muffled. 29:32 29 minutes, 32 seconds Can you hear me now? Yes, please go ahead. 29:35 29 minutes, 35 seconds Yeah. Uh when you speak about implementing slope chemistry uh are we going to implement it all across what 29:43 29 minutes, 43 seconds like what percentage or what portion of our total manufacturing in slope chemistry so we could uh generate more 29:51 29 minutes, 51 seconds cost savings or efficiency in that manner. 29:56 29 minutes, 56 seconds So we are targeting the bigger volume uh you know APIs that we have. Okay. Okay. 30:05 30 minutes, 5 seconds And let me let me be clear that you know not everything is aminable to flow. Okay. Right. Right. 30:12 30 minutes, 12 seconds So in a batch process many times we do incit conversion and we have like three chemical conversions happening in one batch 30:20 30 minutes, 20 seconds that is not available to flow. But where you have long reaction time, lot of energy 30:28 30 minutes, 28 seconds consumption, excessive reagents that are being used there uh you know there's a good possibility to use flow to optimize uh 30:37 30 minutes, 37 seconds you know both you know material usage as well as uh energy usage. So there it can have a big impact. We had a very 30:45 30 minutes, 45 seconds successful uh uh product that we brought down the cost uh to 40% of what it was. Okay. Uh in Bure. 30:56 30 minutes, 56 seconds So that shall we go ahead? 31:00 31 minutes Sorry. Could you please the future for uh like could you ask uh revenue wise could we implemented could 31:08 31 minutes, 8 seconds we implement no folks MSP in the future or this is uh only could it be limited to some some very limited portion of the 31:15 31 minutes, 15 seconds revenue in the future so let's put it this way your high potency API which will come for 28 29 onwards will there 31:22 31 minutes, 22 seconds be flow chemistry or will there be dodge no high potency doesn't have the volumes to en to basically enable flow No point. 31:31 31 minutes, 31 seconds Okay. 31:31 31 minutes, 31 seconds I is done in very small reactors. You know, I get that. I get that. 31:36 31 minutes, 36 seconds You make small batches and that's more efficient in terms of utilization of uh you know the platform flow would be used for higher volumes basically. 31:46 31 minutes, 46 seconds Okay, I get it. So there's some still scope to implement for the flow chemistry in the in the in the future monitoring, right? Uh just on the the 31:54 31 minutes, 54 seconds turnover side, we are 2.3 right now. Is it is it like and we have the best margin in the last four five years and 32:01 32 minutes, 1 second the lowest turnover up front. So is there any scope of including the off in the in the future or it could be staying 32:09 32 minutes, 9 seconds like that in 2.3 uh Christian 32:16 32 minutes, 16 seconds this 2.3 is uh on the basis of our existing uh asset base which has a historical asset base. Now you would 32:24 32 minutes, 24 seconds have seen that we are currently in the capex cycle. Uh you are generally into an investment phase. This uh uh asset turnover will come down. 32:37 32 minutes, 37 seconds We expect it to come down below two uh in the short in the short term. Uh but eventually stabilize this such around two level. 32:47 32 minutes, 47 seconds Two level. I see. And still maintain the same margin. That's what even if it comes down we still maintain the same margin. Yes. Uh and the last question my 32:56 32 minutes, 56 seconds uh do we get into the future uh plan to get into innovation uh drug uh drug 33:03 33 minutes, 3 seconds research or innovation pure pure innovation novel molecules something like that. Do you have anything on your thoughts profess? 33:10 33 minutes, 10 seconds No no thank you for your time sir. Thank you. Thank you. 33:18 33 minutes, 18 seconds Thank you. 33:19 33 minutes, 19 seconds The next question is from the line of Karthik Swami Natan from Kataran. Please go ahead. 33:25 33 minutes, 25 seconds Uh good evening sir and thank you for taking my question. Uh so my question is that if you look at the reactor capacity expansion plan you're going we are going 33:34 33 minutes, 34 seconds from 14 sorry 1,400 kil to 2,100 kil uh over the next year which is like almost 33:41 33 minutes, 41 seconds a 50% increase in reactor capacity. But uh when you're talking about revenue growth, you're only talking about a high singledigit growth. I just wanted to 33:50 33 minutes, 50 seconds understand why is there such a large difference? I mean obviously understand price erosion other components will be there but hence why such a big difference in terms of capacity and revenue growth. 34:00 34 minutes So 400 kl is just backward integration. Right. 34:05 34 minutes, 5 seconds Right. And this we are doing to protect uh the the larger uh you know molecules that bring in like 40 50 crores of 34:14 34 minutes, 14 seconds revenue for molecules. So I mean we've got to protect those uh businesses uh from a supply security perspective as 34:22 34 minutes, 22 seconds well as from a margin protection. So that will be deployed uh for uh you know 34:28 34 minutes, 28 seconds DI and then the remaining is basically for the growth and like you said there's price erosion so the volume growth is 34:37 34 minutes, 37 seconds much higher than what we are seeing okay so that should cover us up plus you know we've been operating at 90% capacity and 34:45 34 minutes, 45 seconds uh that can be pretty risky because if new business comes along then we don't have you know any capacity any kind of 34:53 34 minutes, 53 seconds surge capac capacity to be able to you know grab that business. All right. Thank you sir. 35:02 35 minutes, 2 seconds Sure. 35:04 35 minutes, 4 seconds Thank you. The next question is from the line of Nitina Garval from Dan Capital. Please go ahead. 35:11 35 minutes, 11 seconds Hi. Thank you my question. Uh uh on the uh on the on your input cost pressures uh because we have a bit of sourcing 35:19 35 minutes, 19 seconds which we have which of the which happens from China. So there is this whole talk around ending valuation and you know general inflation in intermediate 35:27 35 minutes, 27 seconds pricing coming from China. Are you do you see any of that and how do you see that played out for the business for us? 35:34 35 minutes, 34 seconds So far it's been okay. Uh the only the only place where we are likely to see a little bit of uh you know challenge is 35:44 35 minutes, 44 seconds that the ND is strengthening against the dollar and then the rupee is weakening against the dollar. So I mean we have a kind of a double hit over there. But so 35:52 35 minutes, 52 seconds far we've we've got contracts you know that go anywhere from 6 months to a little more. So I expect that we should hold steady. 36:05 36 minutes, 5 seconds So per say you don't not see any challenges on their account as as no no nothing very serious. I mean and 36:12 36 minutes, 12 seconds then see we've got a even if it is China we've got a pretty well distributed supply rates for most of our molecules 36:19 36 minutes, 19 seconds so unlikely that uh you know people can hold it on our head basically I mean you know we don't it's not like a one vendor 36:27 36 minutes, 27 seconds or a two vendor situation we've got a pretty well spread out supply base and we have worked actively to bring a fair 36:33 36 minutes, 33 seconds amount of that back to India okay so how would our sourcing from China change over the last two three years. 36:44 36 minutes, 44 seconds Uh listen in terms of you know in terms of it has not changed because we are getting benefited by lower prices or 36:51 36 minutes, 51 seconds better prices I should say right but then from a supply security perspective if you know for whatever reason we would 37:00 37 minutes get you know we ended up getting lesser supplies from China we do have you know alternate suppliers out of India. 37:07 37 minutes, 7 seconds Got I got and on the CDN business uh you know the contract that we have right now what should be the peak sort of annual potential or revenue potential peak for 37:15 37 minutes, 15 seconds those contracts at peak all of all these five together so it's a bit of a spread here right uh 37:22 37 minutes, 22 seconds I had we had basically you know said that project four and five together would get us around 12 million right it 37:30 37 minutes, 30 seconds could be a little higher also based on what we are seeing now but we expect that to pop out around second half of uh the next financial year. 37:40 37 minutes, 40 seconds Okay. Okay. 37:41 37 minutes, 41 seconds And then we were basically doing a sort of run rate of around you know 140ish crores u you know on the earlier three 37:50 37 minutes, 50 seconds projects. So that might move a little bit but not much. So we we expect to be in a reasonably good place with respect 37:57 37 minutes, 57 seconds to these first for to these five projects on senior mode. you know I mean we'll have to look at it as a bundle kind of number because there is some 38:06 38 minutes, 6 seconds readiness right like I explained in the first three projects and and and for F28 you uh you believe 38:14 38 minutes, 14 seconds that some more incremental wins that we typically get next year should begin to contribute yeah so we like I said right we are in 38:21 38 minutes, 21 seconds advanced stages for two more projects right and u hopefully you know we'll be able to we'll know by uh Q1 38:31 38 minutes, 31 seconds uh you know of next financial year of FI27 right uh whether we've locked those 38:38 38 minutes, 38 seconds projects and in general with your conversations uh I mean are there the contracts that you're discussing with your various sort 38:45 38 minutes, 45 seconds of partners is the size and scale of these contracts bigger than what we typically done or it's kind of the same ballpark no it's the same ballpark I mean you're 38:54 38 minutes, 54 seconds looking at anywhere from like you know 4 million to 6 million you know kind of opportunity 39:02 39 minutes, 2 seconds Okay. And last one on the on the generic API business and you've talked about a late double digit late growth for a broad guiding perspective but you know 39:11 39 minutes, 11 seconds over the next two three years where do you think positive surprises can come from on this part of the business? I mean things play out do play out 39:18 39 minutes, 18 seconds on the generics on the generics. Yeah. 39:23 39 minutes, 23 seconds I mean there's a fair amount of molecules that are going off patent now in the next couple of years 39:29 39 minutes, 29 seconds and we have lined up you know across geographies right uh reasonable part of 39:36 39 minutes, 36 seconds our portfolio will start playing out I can't give you numbers like hard numbers because frankly I don't even 39:43 39 minutes, 43 seconds sort of you know uh we have a good estimate that you know we'll have we we'll be seeing a pretty 39:51 39 minutes, 51 seconds good uh string of launches coming up in the next couple of years and and going forward as well. 39:58 39 minutes, 58 seconds And last one on the on the current set of products that we already have commercialized uh I mean do you see reasonable [clears throat] volume expansion opportunities there or this 40:07 40 minutes, 7 seconds part the current sort of commercialized portfolio is largely tapped out from a volume perspective. So let's split that into two parts. 40:14 40 minutes, 14 seconds There's a very mature portfolio which is pretty stable in terms of volume. Okay, that's not growing like a lot, right? 40:22 40 minutes, 22 seconds Maybe like two three% growth over there, right? Okay, but then there are there are the newer launches where there are 40:30 40 minutes, 30 seconds patent expireies that are still not exhausted. I mean, you have we seeing patent expireies that are coming up in the next uh you know two years or so. So that portfolio will grow pretty well. 40:41 40 minutes, 41 seconds Plus uh because it's all post approval changes. Now we uh are also looking into getting you know alternate source opportunities for that portfolio. 40:54 40 minutes, 54 seconds So that's where that's where on the uh you know reg so-called regular portfolio we'll see uh much better growth. 41:03 41 minutes, 3 seconds Okay. And and and when do you see the high potency portfolio sort of becoming new for for the business? 41:10 41 minutes, 10 seconds So that will start from uh late FI20 uh late FI28. 41:17 41 minutes, 17 seconds Okay. Okay. Okay. Thank you sir. Best of luck. Sure. Thank you. 41:23 41 minutes, 23 seconds Thank you. The next question is from the line of Pang from Oldbridge. Please go ahead. 41:29 41 minutes, 29 seconds Hi sir. Good evening. Congratulations for a very strong set of numbers. Couple of questions sir. Um one uh on the raw 41:38 41 minutes, 38 seconds material side uh what percentage of our procurement are we solely dependent on China for less than 10%. 41:49 41 minutes, 49 seconds But even there like you said solely dependent right it's less than 10% but even there uh it's a distributed base so 41:58 41 minutes, 58 seconds again there's no single vendor dependence here. 42:02 42 minutes, 2 seconds Okay. Second, how is the raw material environment? I mean, does it is has it gone down further or it continues to be 42:10 42 minutes, 10 seconds at the levels that you witnessed in the quarters? 42:14 42 minutes, 14 seconds No, it's okay. But again, right, I mean there there are there are some, you 42:21 42 minutes, 21 seconds know, here and there you do see a few products moving, but then we also get benefited on other products. So, I mean, it's not as if, right, it's just going 42:29 42 minutes, 29 seconds in one direction. So when you look at our portfolio uh in general we are able to balance it out. The other thing that 42:37 42 minutes, 37 seconds we are actively looking at is with shapur coming online by July we we would 42:44 42 minutes, 44 seconds be bringing in certain uh volumes right where there are significant margins that we are leaving to the vendor. So those 42:54 42 minutes, 54 seconds uh we have mapped out those and as soon as Sholapur starts we'll be shifting a good percentage of that into shoolapur. 43:04 43 minutes, 4 seconds Got it. Second sir on the end product side to the earlier question for your mature molecules what is the kind of 43:12 43 minutes, 12 seconds market share that you have now across the geographies that you're servicing for which ones correct? 43:19 43 minutes, 19 seconds So it ranges molecules it ranges it goes anywhere from uh uh sort of global market share of 10% to 35%. Depends on the molecule. 43:31 43 minutes, 31 seconds Okay. And for your upcoming or so to say relatively newer molecules uh how would that number be number one. 43:40 43 minutes, 40 seconds Number two there is also an inherent expectation that the market for those molecules will also expand. Correct. 43:47 43 minutes, 47 seconds Yeah, because patents are going to be expiring over time, right? I mean, in different markets, it's not like all the patents expire on day one, right? 43:55 43 minutes, 55 seconds Right. So, yeah. Yeah. 44:00 44 minutes Right. And the idea there is from a filing perspective, that's the number that you want to get to. Basically, it 44:08 44 minutes, 8 seconds continues the flywheel of following your mature molecules. Correct. 44:12 44 minutes, 12 seconds Yeah. See, filings are done, right? He's already filed or rather our customers have filed with our API but they can't 44:19 44 minutes, 19 seconds launch until the patents expire right so we are already locked in I mean we are able to confidently predict that 44:27 44 minutes, 27 seconds okay you know if we've got two customers in a particular market let's say Brazil and they are you know good front-end 44:34 44 minutes, 34 seconds players then we can assume a market share of around 20% or 25%. 44:39 44 minutes, 39 seconds So basis that we are saying that you know growth will come from those molecules. 44:45 44 minutes, 45 seconds All right. And last s for 9 month FI26 what would be the volume growth for the business? 44:52 44 minutes, 52 seconds 9 months FI26 we just told you in a second volume growth I mean on the overall growth you can 44:59 44 minutes, 59 seconds take about uh 5% price erosion. The balance is the volume growth. 45:06 45 minutes, 6 seconds Got it. Got it. Wonderful sir. Thank you. All the best. Sure. Thank you. 45:12 45 minutes, 12 seconds Thank you. The next question is from the lion of Ankit Manocha from Arezi Ventures Family Office. Please go ahead. 45:21 45 minutes, 21 seconds Yeah. Hi, good evening. Uh just on a continuation of the previous participants question regarding volume versus pricing growth. So I mean how 45:29 45 minutes, 29 seconds does pricing mechanics usually work across your portfolio? like how much of the percentage the pricing is based on 45:36 45 minutes, 36 seconds spot pricing versus where do you have more stable contract uh prices there? Uh question basically coming from the point 45:44 45 minutes, 44 seconds that if you are guiding for say high singledigit u revenue growth then um what is the kind of um estimations that 45:52 45 minutes, 52 seconds you're taking for pricing erosion or um in this growth and where could be kind 45:59 45 minutes, 59 seconds of could be surprises that so I'll answer it in two parts okay so 46:07 46 minutes, 7 seconds there is the regulated markets right where we are locked in uh with our customers and uh there the market itself does not 46:16 46 minutes, 16 seconds see significant erosion at the front end. So we have a pretty good comfort level in terms of prices staying 46:24 46 minutes, 24 seconds relatively stable in those markets. But then there is the uh there are the RO 46:31 46 minutes, 31 seconds markets where you know changes to API vendor can be pretty quick and so there 46:38 46 minutes, 38 seconds we have to be more agile and uh essentially be ready to match uh you know with respect to u pricing. 46:51 46 minutes, 51 seconds So that's one way of looking at it. 46:53 46 minutes, 53 seconds Another way of looking at it is that we have a mature very mature set of molecules where it's 5 years plus in the 47:00 47 minutes market. Now there things are pretty much set. So even the competitive uh intensity is defined right. So you have 47:10 47 minutes, 10 seconds we know we have so many players we have so much market share and our customers have so much market share across uh you know whichever geography they are 47:17 47 minutes, 17 seconds operating in. So there we don't see you know major sort of pricing uh shocks okay 47:26 47 minutes, 26 seconds but it's there I mean there is a mild erosion there as well because uh customers are customers and they will ask right uh but it's not very very big 47:34 47 minutes, 34 seconds right it's a very low kind of uh you know margin price erosion okay and then 47:40 47 minutes, 40 seconds of course uh we have the newer molecules where for a period of maybe 18 to 24 months we have stab ability. But then 47:50 47 minutes, 50 seconds you know as the market starts becoming more intense right and more players start entering then we see erosion but 47:58 47 minutes, 58 seconds then we have the next generation process also sorted out. So that then comes in and sort of so we see erosion there you 48:06 48 minutes, 6 seconds know uh to answer the question right and but we can manage uh at least the margin side. 48:14 48 minutes, 14 seconds Okay. So uh when you say just when you say single digit high single digit uh revenue growth for for next year then do 48:22 48 minutes, 22 seconds you build in any base cases for what is the volume and what is the pricing break up of our 48:29 48 minutes, 29 seconds yeah so just answered the question right where we we said that we are factoring in 5% pricing price erosion and so you 48:38 48 minutes, 38 seconds know and with a single digit uh high singledigit uh you know growth we obviously should be geared up for about 48:45 48 minutes, 45 seconds 15% 15 to 17% of uh you know volume growth. Um understood that's that's clear. 48:54 48 minutes, 54 seconds Thanks. Uh my second question is with regard to the capacity expansion from 1400 I mean 1400 to 2100 odd kl. So I 49:03 49 minutes, 3 seconds mean assuming uh currently I believe you mentioned that your capacity utilization levels were above 90%. Uh what what are you 49:11 49 minutes, 11 seconds advising as the utilization levels in SI27 and assuming we kind of reach those utilization levels? What would be the uh 49:19 49 minutes, 19 seconds EIDA margin profile of the business? Uh once those levels are reached uh what could be the margin profile? 49:31 49 minutes, 31 seconds I'm not sure I got it. Okay. But let me try. You want to repeat what you just said? 49:38 49 minutes, 38 seconds Uh yeah, basically uh after you are completed completed with your capacity expansion u what would be the uh what is 49:47 49 minutes, 47 seconds the margin profile that you're looking at for the business and what are the capacity utilization levels that you're looking at for FI27? 49:57 49 minutes, 57 seconds Okay. So capacity utilization should be between 85 and 90 when the new capacity comes online because I said 50:05 50 minutes, 5 seconds that look 400k is getting utilized for backward integration and then the remaining is available for uh the 50:12 50 minutes, 12 seconds regular CDMO and API business. Okay we we will operate uh at around 85% which 50:20 50 minutes, 20 seconds was like I said it gives us the search capacity. the beta margins are driven by a mix. 50:27 50 minutes, 27 seconds Okay. And uh yeah, maybe we have some under absorption but compared to you 50:33 50 minutes, 33 seconds know uh our overall profitability I don't think that under absorption is going to significantly hit our EIT. 50:46 50 minutes, 46 seconds Okay. Sure. Sure. Thanks. Um and uh finally on the CDMO side uh I mean u could you uh explain a little bit like 50:54 50 minutes, 54 seconds how like how does it integrate with the core API generate API business or what is it that the CDMO operations uh entail 51:03 51 minutes, 3 seconds and overall the growth profile and the margin profile of this business versus your uh uh current business. 51:13 51 minutes, 13 seconds So uh it's a shared capacity both uh with respect to the R&D platform as well 51:22 51 minutes, 22 seconds as the manufacturing platform and the margin profile is certainly better on CDMO. It's more stable. Okay. 51:30 51 minutes, 30 seconds Uh once we lock in these projects we don't see that much erosion to begin with and then there's always room for improvement you know on the efficiency 51:39 51 minutes, 39 seconds side. So then that only helps us more with respect to you know the margins. 51:46 51 minutes, 46 seconds Uh it's better than generate no doubt about it. That's clear. 51:53 51 minutes, 53 seconds Okay. Sure. Uh thank you and all the best. Thank you. Thank you. Thank you. 52:01 52 minutes, 1 second The next question is from the line of Sil Kotari from Unic PMS. Please go ahead. Uh thank you sir for opportunity. 52:09 52 minutes, 9 seconds This is not related to this cot members. 52:11 52 minutes, 11 seconds very broad uh I want to understand is uh you have so many years of experience with working with a different mindset or 52:20 52 minutes, 20 seconds a growth oriented uh promoter or maybe manager from metrics to Lenmark and now 52:27 52 minutes, 27 seconds Nirma and with this solid balance is so many years of uh changes very well absorbed from uh Glenmark dependency to 52:37 52 minutes, 37 seconds non Glenmark business uh the way we are investing in R&D M so 52:43 52 minutes, 43 seconds can we as a uh investor maybe over 3 five years should we expect a better growth rate from you I mean lowering 52:53 52 minutes, 53 seconds your conservatism investing little little with more maybe aggression anything would you like to share 53:02 53 minutes, 2 seconds thoughts on with now solid foundation on base would you like to go a little faster or this is the way we'll be working. 53:13 53 minutes, 13 seconds Okay. See, there are two three things here. Okay. I mean, the industry has changed so much in 20 years. I would 53:21 53 minutes, 21 seconds say it has had at least three avatars in the last 20 years. 53:26 53 minutes, 26 seconds You can't firstly apply the same logic that would be applied, you know, even even 5 years ago, right? Okay. 53:34 53 minutes, 34 seconds Right. So, I mean, those days are gone, right? 53:37 53 minutes, 37 seconds where you had paraphos and all that and you had big bonanza products. Where is where are those? Those those are not there, right? And so what happens is our 53:47 53 minutes, 47 seconds job is to read the market the way it's shaping up. Okay, that's one thing. 53:53 53 minutes, 53 seconds Second is that I think we've done a reasonably good job of reading the market because if you look at our nonGPS 53:59 53 minutes, 59 seconds business, it is growing well. The nonGP business is growing well. So 70% or 75 54:06 54 minutes, 6 seconds 70 to 75% of our business is growing in the mid- teens or the low low to mid teens. Okay. Because we made the right choices firstly in terms of portfolio. 54:16 54 minutes, 16 seconds Right. True. 54:17 54 minutes, 17 seconds Then in terms of you know the geographic expansion that we went on about five six years ago that we went on we seeded uh 54:25 54 minutes, 25 seconds projects all over the world that have definitely contributed. 54:30 54 minutes, 30 seconds Now with respect to getting aggressive I I think I answered that that yeah we are sitting on cash right and hopefully that 54:38 54 minutes, 38 seconds pile will grow a little more right as we go along but whatever choices we make beyond the organic growth right has to 54:47 54 minutes, 47 seconds fit in well with our overall plan of how we grow and how the overall farmer market is evolving. 54:55 54 minutes, 55 seconds Okay, that that will definitely be you know front and center in terms of how we think of uh you know so those will come 55:04 55 minutes, 4 seconds but to us what is more important right as a as a philosophy is maintain a high quality business because if you keep a 55:12 55 minutes, 12 seconds high quality business right you generate cash the moment you go for a low margin business volume business your you suck 55:21 55 minutes, 21 seconds your working your working capital sucks up whatever money you make whatever cash you and then you're stuck. Okay. So, we don't want to go there, right? We've 55:29 55 minutes, 29 seconds been we've been fairly right in terms of getting reading the market and so this 55:36 55 minutes, 36 seconds will I feel this is a sort of path that will keep us on a good track in terms of generating cash and then at the 55:44 55 minutes, 44 seconds appropriate time when we find the right kind of thing we'll we'll make the right investments and move forward and hopefully you know that aggressive growth that you're talking about may come at that time. 55:54 55 minutes, 54 seconds Great. Great. Thanks so much for talking. Thank you. Sure. Thank you. 56:00 56 minutes Thank you. The next question is from the line of Sneep Gala from RSP and Ventures. Please go ahead. 56:08 56 minutes, 8 seconds Yeah, thank you for the opportunity. Uh so most of the questions of my questions of mine have been answered. Uh uh just 56:16 56 minutes, 16 seconds want to understand uh uh a bit longer term picture when uh the full capacity of Solapur also goes live. 56:24 56 minutes, 24 seconds uh after what we are utilizing for the backward integration. So maybe from FI 28 29 can we start seeing double digit growth? 56:34 56 minutes, 34 seconds Yeah. Yeah. I'm sure we will we will sure thank you. 56:41 56 minutes, 41 seconds Thank you. 56:43 56 minutes, 43 seconds Thank you. The next question is from the line of Sajal Kapoor from antifragile thinking. Please go ahead. 56:51 56 minutes, 51 seconds Yeah. Thank you for taking my question. 56:54 56 minutes, 54 seconds Dr. Raji, our CDMO model has long gestation cycles and much smaller deal sizes. It takes significant time to 57:03 57 minutes, 3 seconds onboard a new um project and even then the revenue opportunity is limited to 6 to 8 million kind of an annual run rate. 57:13 57 minutes, 13 seconds In contrast, some of the other Indian CDMOs who offer you know fee for service model, not the CRO type running on FTE models. I'm not talking about those. 57:24 57 minutes, 24 seconds There are other CDMOs that offer free fee for service and they are scaling much faster targeting individual CDMO 57:32 57 minutes, 32 seconds molecules of anywhere from 50 million to 100 million annual run rate because these are NC's and they partner with the 57:39 57 minutes, 39 seconds innovators early in the cycle from phase 2 and phase three onwards and that offers you know a much higher magnitude 57:47 57 minutes, 47 seconds um as well as visibility of adding more molecules um to the to the pile. So their funnel size is also larger. I mean 57:56 57 minutes, 56 seconds why can't we aim for higher magnitude and faster growth in CDMO? Because our scientific talent is also right up there. 58:07 58 minutes, 7 seconds Okay, let me let's put this in some perspective here. 58:13 58 minutes, 13 seconds How many such 50 to 100 million opportunities are fruit to find at least you know in in our country, right? Okay. 58:23 58 minutes, 23 seconds uh not many right because the reality is that these are all patented products 58:30 58 minutes, 30 seconds which big farmer usually likes to keep with themselves. Maybe we could get an intermediate here and there that may give us you know some business but the 58:39 58 minutes, 39 seconds reality is that it is Ireland where they manufacture because Ireland has a 12% tax rate I believe right and all big 58:47 58 minutes, 47 seconds farmer companies park their profits there so they don't take manufacturing out of Ireland this is the reality 58:54 58 minutes, 54 seconds coming to us in terms of you know how we are positioned see we've got a pretty big portfolio that we can offer and we 59:02 59 minutes, 2 seconds are offering in terms of life cycle management. Okay. 59:06 59 minutes, 6 seconds And in and to and to the specialtity companies and we have seen traction there. So yeah, you're you're right and 59:14 59 minutes, 14 seconds we also are clear that you know we we will target those. But with respect to gestation, I think we are doing a pretty 59:21 59 minutes, 21 seconds reasonable job. I mean you know the projects start kicking in commercially within two years of our first discussion. literally within two years 59:30 59 minutes, 30 seconds and this is I'm talking full commercial right I mean we initiated you know project 59:37 59 minutes, 37 seconds five last November okay so it's been it's been a little over a year now and we are already seeing that we'll start 59:45 59 minutes, 45 seconds seeing you know traction so literally within 18 to 24 months we're getting the projects on board yeah it's $4 to5 59:51 59 minutes, 51 seconds million it could be a little higher but then you know the projects are ftifying faster Now if we do if we play it right 1:00:01 1 hour, 1 second with the numbers right we had three projects we now five we are likely to get to seven projects in another half 1:00:08 1 hour, 8 seconds year right and there are more in the pipeline and as we speak there are at least seven to eight projects that can act in discussion 1:00:17 1 hour, 17 seconds so and the confidence level also like I pointed out earlier has gone up because we are not in a you know in a large pharma you know uh ownership Right. 1:00:30 1 hour, 30 seconds So we could we could get into you know we could get into this game but I'm I I can assure you attrition is very high 1:00:38 1 hour, 38 seconds right and you can count on you know one hand okay how many such 50 to$100 million opportunities are really there 1:00:46 1 hour, 46 seconds in the entire country okay so I don't know I mean attrition is very high 1:00:53 1 hour, 53 seconds no of course Dr. Rousi you know you know more than anyone in the industry attrition is high but in even in case of 1:01:00 1 hour, 1 minute phase three um clinical trial batches the the volumes are as big as 8 to 10 million even before the drug is 1:01:09 1 hour, 1 minute, 9 seconds commercial on that Ireland thing right I mean so Ireland takes n minus one so they they do the the end stage in 1:01:16 1 hour, 1 minute, 16 seconds Ireland to make it you know um tax compliant in that jurisdiction uh but coming back to our CDMO um strategy I If 1:01:25 1 hour, 1 minute, 25 seconds you go back to the November 2022 investor um road show that we did, we were very confident that we'll double 1:01:33 1 hour, 1 minute, 33 seconds our CDMO by 2025 and in that presentation and that has not happened for for a 1:01:42 1 hour, 1 minute, 42 seconds variety of reason that you have been explaining over the over the the quarters and I think it's a it's a common question from most of the 1:01:49 1 hour, 1 minute, 49 seconds participants or many participants that we want to be seeing ally was a little more um aggressive in the growth um and 1:01:58 1 hour, 1 minute, 58 seconds and I and I'm sure we'll get there uh but I think we we are slightly behind in [clears throat] the CDMO segment 1:02:05 1 hour, 2 minutes, 5 seconds otherwise you know given the complexity of product that we deal with from particle engineering to flow chemistry 1:02:12 1 hour, 2 minutes, 12 seconds we are right up there and we you know you can compare our capability with anyone in the industry 1:02:20 1 hour, 2 minutes, 20 seconds I do agree that from a capability perspective we have Right? It's defining what we take up and 1:02:27 1 hour, 2 minutes, 27 seconds what we let go because again it's it's a costbenefit analysis right in terms of you know I mean the big part of our 1:02:34 1 hour, 2 minutes, 34 seconds business is a generics business it's also generating you know because of the portfolio a pretty good growth as well 1:02:41 1 hour, 2 minutes, 41 seconds as margins so let's see I mean we'll take your we'll take your suggestion uh Saj and you know let's see how you know 1:02:50 1 hour, 2 minutes, 50 seconds we we'll take that internally okay but I interview based on your right. It's uh it's a high risk game. 1:03:02 1 hour, 3 minutes, 2 seconds Yes. Yeah. No, I appreciate that. Thank you so much for all the responses. Very thoughtful. Thank you so much and all the very best. Thank you. 1:03:11 1 hour, 3 minutes, 11 seconds Thank you. The next question is from the line of Taran from Oldbridge. Please go ahead. 1:03:17 1 hour, 3 minutes, 17 seconds So just uh I mean continuing on the earlier question, can you cross utilize your current capacities in case you wish 1:03:26 1 hour, 3 minutes, 26 seconds to cater to the innovator for uh projects which are under development? 1:03:34 1 hour, 3 minutes, 34 seconds Yeah, we can because again we have inspected sites so that's not a hurdle at all. Right. 1:03:42 1 hour, 3 minutes, 42 seconds um you know typically typically it's you know that's the first sort of hurdle that you have to clear and then if 1:03:50 1 hour, 3 minutes, 50 seconds you've got good business continuity plans right then and we do so you know with the fair amount of search capacity 1:03:57 1 hour, 3 minutes, 57 seconds now with chapu coming on board we'll be able to offer that as well you know correct sir and just I would I can't 1:04:05 1 hour, 4 minutes, 5 seconds speak for others but from my vantage I think sir uh you've seen reasonable execution on the non-GL part of the 1:04:12 1 hour, 4 minutes, 12 seconds business on a year-on-year basis and I think on the CDMO business also uh it's an interesting niche that you've carved 1:04:19 1 hour, 4 minutes, 19 seconds out for yourself. Um and uh uh you know we would want you to continue doing this. I mean it's up to the management 1:04:28 1 hour, 4 minutes, 28 seconds as to how they want to take forward the trajectory of the business. Uh but I just wanted to bring that clarification. Thank you. 1:04:35 1 hour, 4 minutes, 35 seconds Okay. Thanks. 1:04:38 1 hour, 4 minutes, 38 seconds Thank you ladies and gentlemen at deposity of time that was the last question for today. On behalf of Alias 1:04:46 1 hour, 4 minutes, 46 seconds I'm closing this conference. Thank you for joining us.