Concord Biotech Limited — Q3 FY26

Concord Biotech Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=7LpUubitcDM Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Q3 and 9month Fred6 earning conference call of Conquered 0:08 8 seconds Biotech Limited hosted by Antic Stock Broking. This conference call may contain forward-looking statements about the company which are based on the 0:16 16 seconds beliefs, opinions and expectation of the company as on date of this call. These statements do not guarantee the future 0:23 23 seconds performance of the company and it may involve risk and uncertainties that are difficult to predict. As a reminder, all 0:31 31 seconds participant line will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation conclude. Should you need 0:38 38 seconds assistant during the conference call, please signal an operator by pressing star then zero on your touchstone phone. 0:44 44 seconds Please note that this conference is being recorded. I now hand the conference over to Mr. Summit Gupta from Antic Stock Broking. Thank you and over to you sir. 0:54 54 seconds Thank you and good good afternoon everyone. I welcome you all to the 3Q and 9 month FI 26 earnings conference call of Concord Piotech Limited. We 1:02 1 minute, 2 seconds thank the management of Conport biotech for providing us with the opportunity to host the earnings call from the company. 1:08 1 minute, 8 seconds Today we have Mr. Ankur joint managing director and CEO Mr. David Karya CFO and 1:14 1 minute, 14 seconds Mr. Praash Sadani Apa Council finance. I would now like to invite Mr. Ankur to give his opening remarks. Over to you sir. 1:23 1 minute, 23 seconds Thank you. Good afternoon ladies and gentlemen. 1:27 1 minute, 27 seconds So we delivered a steady performance during the quarter reporting revenues of rupees 278 crores representing 14% 1:37 1 minute, 37 seconds year-on-year growth. For the 9-month period, revenues declined by 5% primarily due to challenges in H1 1:46 1 minute, 46 seconds arising from uncertaintity on global trade due to US RF dynamics, delay in written confirmation from Sedesco and 1:55 1 minute, 55 seconds the deferral on tenderbased supplies in Middle East market. 2:00 2 minutes Importantly, these headwinds were largely timing related rather than structural. 2:07 2 minutes, 7 seconds Let me give an update on how these situations are evolving now. 2:17 2 minutes, 17 seconds So we have started the so firstly I would like to express 2:26 2 minutes, 26 seconds my gratitude to the uh sorry one thing sorry on that. So we have also started 2:35 2 minutes, 35 seconds with Stellon Biotech our subsidiary to the um our US subsidiary to drive marketing. 2:46 2 minutes, 46 seconds So uncertaintities around tariffs and global trade dynamics temporarily disrupted customer procurement patterns 2:53 2 minutes, 53 seconds and delayed second source opportunities as customers waited for greater geopolitical stability before making firm decisions. 3:03 3 minutes, 3 seconds However, following clarifications that tariffs do not apply to generic products, order momentum began to 3:10 3 minutes, 10 seconds recover. Now, with the US trade deal taking shape, we are seeing increased engagement and more advanced discussions 3:19 3 minutes, 19 seconds around larger second source supply opportunities and CDMO partnership. 3:25 3 minutes, 25 seconds Retail confirmation approval delay from Sediscoco which did not allow us to sell in the European market for a couple of 3:33 3 minutes, 33 seconds months was received in early November which has resumed the supplies back to normal. However, the ramp up will happen in gradual manner. 3:45 3 minutes, 45 seconds Last being deferment of tenderbased supplies to Middle East market was kept on hold on account of geopolitical tensions. 3:54 3 minutes, 54 seconds This is currently status quo and we are monitoring it closely. Having said that, we will be the preferred supplier to 4:02 4 minutes, 2 seconds them and once this is resumed, we will be able to recoup the revenues from this tender. 4:09 4 minutes, 9 seconds We have also seen India EU free trade agreement announced earlier this year and we view this as a positive long-term development. 4:19 4 minutes, 19 seconds This agreement enhances access to one of the world's largest and most regulated healthcare markets and strengthens 4:27 4 minutes, 27 seconds India's position as a global manufacturing hub. 4:32 4 minutes, 32 seconds Given our established presence in the EU market, we see this as a strategic opportunity over the medium to long term. 4:41 4 minutes, 41 seconds Also we would like to mention the union budget which is broadly supportive of the sector. 4:49 4 minutes, 49 seconds Of particular relevance is the biioarma shaky initiative a rupees 100 billion 5-year program aimed at strengthening 4:58 4 minutes, 58 seconds India's biioharmaceutical ecosystem. 5:02 5 minutes, 2 seconds Its emphasis on R&D, talent development, manufacturing capabilities, and faster 5:10 5 minutes, 10 seconds regulatory approval aligned with our fermentation API expertise and supports long-term visibility. 5:19 5 minutes, 19 seconds While spillovers from earlier disruptions are expected to materialize gradually with all positive developments 5:26 5 minutes, 26 seconds across the industry, we believe the Q4 will be stronger. 5:32 5 minutes, 32 seconds This is also reflected in our Q3 performance where revenues grew by 14% on a year-on-year basis. 5:40 5 minutes, 40 seconds Speaking about key highlights for the quarter, our injectable facility has received WH 5:47 5 minutes, 47 seconds GMP certification which will enable us to sell in the domestic market via our own brand and contract manufacturing opportunities. 5:57 5 minutes, 57 seconds Our initial focus remains on the domestic market with plans to expand into emerging markets following the necessary regulatory approvals. 6:08 6 minutes, 8 seconds We have taken meaningful steps towards building this as a long-term growth platform for the company. The facility 6:16 6 minutes, 16 seconds has a peak revenue potential of approximately 600 crores. 6:21 6 minutes, 21 seconds We have incorporated Concord Lifechin Limited, a wholly owned subsidiary to further strengthen our marketing, sales and distribution capabilities in India. 6:32 6 minutes, 32 seconds We have also started with Stellon Biotech, our US subsidiary to drive marketing, distribution and 6:40 6 minutes, 40 seconds commercialization of our products in the US, creating a direct commercial footprint and supporting global market expansion. 6:50 6 minutes, 50 seconds From Ieline perspective, we have completed DMS for Nistatin and Wulosporin last year. And during the 6:58 6 minutes, 58 seconds current year, as previously communicated, we plan to launch two new products primarily in the anti-infective 7:04 7 minutes, 4 seconds segment, which offers large volumes, niche positioning, and limited competition. Moving on to margins, 7:13 7 minutes, 13 seconds profitability during the 9-month period was impacted on account of startup costs associated with the commercialization of our injectable facility. 7:25 7 minutes, 25 seconds That said, our core API and formulations business continues to operate with stable unit economics. 7:34 7 minutes, 34 seconds Excluding injectables related startup cost and cost associated with our US subsidiary, EITA margins remain in the 7:43 7 minutes, 43 seconds range of 40% for Q3 and 9 month FI26. 7:49 7 minutes, 49 seconds As injectable business scales up over the coming quarters, we expect this temporary margin impact to gradually normalize. 7:58 7 minutes, 58 seconds Moving to segmental performance, in Q3 FI26, API revenues were at rupees 219 8:06 8 minutes, 6 seconds crores representing growth of 24% on a year-on-year basis. These figures 8:13 8 minutes, 13 seconds exclude interunit sales to our formulation business. 8:19 8 minutes, 19 seconds On the formulations front, revenue stood at rupees 58 crores compared to rupees 68 crores in Q3 FI25. 8:29 8 minutes, 29 seconds On the leadership front, we are pleased to welcome Mr. Ravi Kar as our chief financial officer. He brings over two 8:38 8 minutes, 38 seconds decades of experience in the pharmaceutical and healthcare sector and his experience will further strengthen our leadership team. In summary, during 8:47 8 minutes, 47 seconds Q3, we witnessed a gradual improvement in volumes despite it being a seasonably 8:54 8 minutes, 54 seconds softer quarter due to holiday period and year and closure in our key regulated markets. We are entering Q4 with greater optimism and a stronger growth momentum. 9:08 9 minutes, 8 seconds While FY26 is expected to remain below our historical averages, primarily due to the challenges encountered in the 9:16 9 minutes, 16 seconds first half, we anticipate that FY27 and beyond will reflect a normalization in performance and regaining back the 9:25 9 minutes, 25 seconds momentum at least to our historical averages. 9:29 9 minutes, 29 seconds Over the medium to long term, Concord remains well positioned to develop uh deliver sustained growth through injectables, 9:38 9 minutes, 38 seconds CDMO, new product launches, and continued market share gains. With strong regulatory credentials, 9:47 9 minutes, 47 seconds differentiated manufacturing capabilities, disciplined capital allocation, and expanding growth engines, we remain confident in our long-term strategy. 9:58 9 minutes, 58 seconds With this I hand over the call to Ravi Kara our CFO for financial and operational performance. Thank you. 10:08 10 minutes, 8 seconds Thank you Ankur and uh good afternoon ladies and gentlemen. 10:13 10 minutes, 13 seconds Uh first I would like to express my gratitude to the Concord board and the management team for welcoming me into 10:22 10 minutes, 22 seconds the Concord biotech family. I'm truly excited to join the organization at such a pivotal time with a strong foundation 10:31 10 minutes, 31 seconds and clear vision for growth. I look forward to closely working with the leadership team to strengthen the 10:39 10 minutes, 39 seconds financial discipline, enhance the transparency, support the strategic initiatives that will drive the growth uh long-term value for the stakeholders. 10:52 10 minutes, 52 seconds Let me take you to the uh financials and operational performance for the quarter. 10:58 10 minutes, 58 seconds On a revenue front, our revenues for the quarter 3 financial year 26 stood at 278 11:06 11 minutes, 6 seconds crores as compared to rupees 244 crores in the same period last year witnessing a growth of 14%. 11:17 11 minutes, 17 seconds Our revenues for 9 months financial year 26 to that 729 crores as compared to 11:26 11 minutes, 26 seconds rupees 770 crores in the same period last year with a degrowth of 5%. 11:35 11 minutes, 35 seconds The revenue from API business stood at 219 crores in this quarter against rupees 177 crores during the same period 11:44 11 minutes, 44 seconds last year with a growth of 24%. 11:50 11 minutes, 50 seconds revenue in 9 9 months financial year 26 uh for the formulation business 11:58 11 minutes, 58 seconds I'm sorry uh formulation business in this quarter stood at 58 crores as compared to 68 crores in the same period 12:06 12 minutes, 6 seconds last year formulation revenues for 9 months of financial year 26 stood at rupees 164 crores revenue from our 12:16 12 minutes, 16 seconds domestic and export business grew collectively by 14% in quarter three uh versus uh last year quarter. 12:28 12 minutes, 28 seconds Now speaking on the IBITA, IBITA for this quarter stood at 99 crores as compared to 98 crores in the same period 12:36 12 minutes, 36 seconds last year. ITA for 9 month 26 stood at 249 crores. ITA margin for this quarter stood at 35.6%. 12:48 12 minutes, 48 seconds uh ITA margins were largely impacted on account of expenses related to the commercialization of new injectable facilities and also on account of 12:57 12 minutes, 57 seconds expenses related to the setting up of subsidiaries in the US market. Excluding these impacts, EITA margin for quarter 3 13:05 13 minutes, 5 seconds and 9 months financial year 26 stood at 40%. 13:11 13 minutes, 11 seconds Uh on profit after tax, our profit after tax for this quarter stood at 64 crores 13:18 13 minutes, 18 seconds as compared to 76 crores in the same period last year. profit after tax was impacted on account of impact of new 13:27 13 minutes, 27 seconds labor costs. Uh the extent of rupees 3 crores and also there was a higher other 13:34 13 minutes, 34 seconds income of rupees 15 crores in quarter 35 compared to rupees 10 crores in the 13:42 13 minutes, 42 seconds quarter 3 this year. If we exclude these impacts, these would there have there would be have been a higher growth in 13:51 13 minutes, 51 seconds profit after tax numbers compared to what was seen. 13:56 13 minutes, 56 seconds Uh we are a zero date company with an uh with investments bank balance and cash and cash equivalence to the tune of uh 14:05 14 minutes, 5 seconds 1263 crores uh as on December 31st 2025. 14:12 14 minutes, 12 seconds With this I shall now leave the floor open for the question and answer. 14:18 14 minutes, 18 seconds Thank you so much sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. 14:28 14 minutes, 28 seconds If you wish to remove yourself from the question queue, you may press star N2. 14:32 14 minutes, 32 seconds Participants are requested to use handsets while asking a question. 14:37 14 minutes, 37 seconds Ladies and gentlemen, we'll wait for a moment while the question Q assembles. 14:41 14 minutes, 41 seconds Our first question come from the line of Chintan City from Greek Capital. Please go ahead. 14:50 14 minutes, 50 seconds Hi, thank you for the opportunity. Uh and uh congratulations uh Ravi G uh for joining Concord Board. Uh my first 14:59 14 minutes, 59 seconds question uncle is on you know the growth which you mentioned that uh FI26 will not be uh you know uh grow as per the 15:08 15 minutes, 8 seconds historical trends which we have been growing u uh so on on on uh beyond uh FI 15:16 15 minutes, 16 seconds 26 uh how how do you see you know business momentum going on how confident you are uh you know the external factors 15:24 15 minutes, 24 seconds which we have faced this this year in in particular uh would would not be uh uh 15:33 15 minutes, 33 seconds uh you know what what gives you the confidence that we will be back to our normal growth that's one and second on the labor code which uh which we have 15:41 15 minutes, 41 seconds kind of uh provided a provision of three or uh that is that is uh on a retrospective basis we have taken the 15:50 15 minutes, 50 seconds provision but if you can uh provide going forward how how should one look at on the recurring basis the impact of uh uh new labor code to our finances. 16:00 16 minutes That's that's there's the visa to do and I'll jump back into Sure. Sure. So um let me first talk 16:06 16 minutes, 6 seconds about in terms of the growth. So uh you know historically if you see we have grown at around uh 18% or so and uh 16:16 16 minutes, 16 seconds during our previous many interactions what we have said is that um the way that we look at growth over the next few 16:23 16 minutes, 23 seconds years is that we we you know while the injectables can do a much larger business but we have considered you know 16:31 16 minutes, 31 seconds half of the business over the next 3 to 5 years which contribute to around 6% growth and then we had also considered the growth coming in from the CDMO 16:40 16 minutes, 40 seconds because of uh enough capacities available and considering that how globally uh India is becoming more 16:48 16 minutes, 48 seconds favorable for fermentation compared to say Europe or China. So there was a 6% growth that we had kind of taken it over a medium-term period. 16:59 16 minutes, 59 seconds So if you put together your baseline growth of 18 and the 6% from injectables in that of CDMMO you reach to 30%. And 17:09 17 minutes, 9 seconds um you know in our previous discussions we've also said that there could be years where you would see these kind of challenging environment because of which 17:17 17 minutes, 17 seconds we kind of you know toned it down to say a kagger of 25% once these uh two growth 17:25 17 minutes, 25 seconds drivers start kicking in at uh at full capacity. um till that time you would see gradual movement going from the 18% 17:33 17 minutes, 33 seconds to the 25% gather. Now with the with the introduction of new products uh across 17:40 17 minutes, 40 seconds the fermentation and us uh taking different initiatives uh across formulations and gaining more 17:48 17 minutes, 48 seconds market share because in the last 3 to four months we have also gained significant accounts business uh across 17:56 17 minutes, 56 seconds multiple products. So all these when factored in together gives us a lot of optimism that the return uh that the 18:04 18 minutes, 4 seconds growth can return to the historical kaggle and there could be potential upside which could be there on account 18:10 18 minutes, 10 seconds of injectable facility where we have you know as I mentioned recently now got the WHO GMP approval and soon soon we will 18:19 18 minutes, 19 seconds be engaging with the customers to kind of uh qualify this facility for their uh contract manufacturing as well while we 18:28 18 minutes, 28 seconds launch the products into the domestic markets under our own brand name as well. So I think all these factors put 18:34 18 minutes, 34 seconds together gives us confidence that the next year we will be at least doing our historical kaggers and uh with favorable 18:44 18 minutes, 44 seconds positionings on the other matters we could be slowly and steadily inching towards um you know the the kagger that we have set to be there over the next 3 18:53 18 minutes, 53 seconds to 5 years. So Ankur just a follow up on uh injectables uh given we will be 19:00 19 minutes focusing on domestic uh do we have to incur a little bit more to develop the 19:06 19 minutes, 6 seconds uh you know on ground team uh because I I believe this do uh injectable products 19:13 19 minutes, 13 seconds uh uh will be directly uh supplied to hospital chains right that that was our initial understanding uh and for that do 19:21 19 minutes, 21 seconds we have to incur a little bit more on marketing a little bit more on uh uh you know um uh developing that business uh 19:30 19 minutes, 30 seconds on the domestic part and that that will also have some impact on our margins overall. 19:37 19 minutes, 37 seconds No. Uh not really because uh you know uh we already have uh field force for the 19:44 19 minutes, 44 seconds for the critical care uh division and um you know close to around 100 120 uh 19:53 19 minutes, 53 seconds people are there for the uh for the critical care segment and they are they are supplying to the large corporate 20:01 20 minutes, 1 second hospitals uh mid-corporate hospitals government institutions nursing homes pan India So um you know when we when we and you 20:10 20 minutes, 10 seconds know we are selling our own branded generics. So once we have kind of moved the manufacturing inhouse I think that 20:19 20 minutes, 19 seconds has given and that continues to give a lot of confidence to the doctors that now the entire value chain is being controlled inhouse rather than we 20:28 20 minutes, 28 seconds relying on third party manufacturers because for some of the key products earlier it was our API but we were using 20:35 20 minutes, 35 seconds a third party manufacturer. while doing the marketing on our own but now with our own manufacturing many of the core 20:42 20 minutes, 42 seconds products would now be shifted inhouse and I think um that would give a lot of confidence to the doctors and also help 20:51 20 minutes, 51 seconds us grow the business um in the domestic markets for the trade now also for the government institution if you see uh you 20:59 20 minutes, 59 seconds know that is also a very very large segment um which was currently being untapped suppliers because only 21:07 21 minutes, 7 seconds manufacturers can participate to supply the government markets. 21:11 21 minutes, 11 seconds So with us being a manufacturer now in a span of one year or so we will also start getting access to the government 21:19 21 minutes, 19 seconds supplies. So um you know which is currently absolutely untapped by us. 21:25 21 minutes, 25 seconds While it is there in our nephrology segment where we make the tablets and capsules uh because we are own manufacturers but in the injectables 21:33 21 minutes, 33 seconds that was not the case but now with our own manufacturing that market would also significantly open up which would give us significant opportunities to grow in 21:42 21 minutes, 42 seconds this segment. And of course you know as I said the third third opportunity is to us become a contract manufacturer but we 21:50 21 minutes, 50 seconds also see a lot of potential in uh our own marketing and that is the reason you know we have also started Concord live 21:58 21 minutes, 58 seconds gen which is only to cater to a certain specific segmentation of the of the hospitals which we were currently unable 22:06 22 minutes, 6 seconds to tap which I said was you know the the the government institutions and uh certain smaller uh nursing homes while 22:15 22 minutes, 15 seconds the larger corporate hospitals and mid-corporate hospitals were already being tapped into. 22:22 22 minutes, 22 seconds Got it. Got it. And on the implate the question, what is your exact question? 22:31 22 minutes, 31 seconds So, um the uh this uh new labor code related uh you know the provision you have made uh the three odd kures, right? 22:40 22 minutes, 40 seconds Um that is I I think I believe uh for the retrospective period the provision has been made for uh for the employees 22:47 22 minutes, 47 seconds where the graduity and the pro uh uh whatever is required has been provided for but going forward on the recurring 22:56 22 minutes, 56 seconds basis do we expect employer cost to increase a little bit because of that and uh if if that is the case if you can 23:03 23 minutes, 3 seconds quantify the so yes your understanding is correct uh this is an one time correct ction that 23:10 23 minutes, 10 seconds is basically labor code across the industry and the companies but way forward it is going to be an incremental 23:18 23 minutes, 18 seconds uh normalized cost that we will have but it won't be material enough for 10 23:25 23 minutes, 25 seconds basis point or 20 basis point increase no that will not be material enough okay got it got thank you I'll tell back 23:34 23 minutes, 34 seconds thank you thank you ladies and gentlemen Anyone who wishes to ask a question may press star and one on their touchstone telephone. 23:52 23 minutes, 52 seconds Reminder to all the participant if you wish to ask a question you may press star and one. 24:04 24 minutes, 4 seconds The first question our next question come from the line of Rita from Quest. Please go ahead. 24:11 24 minutes, 11 seconds Hi sir, thank you for taking my question. Uh so could you give more understanding on um how is the CDMO 24:19 24 minutes, 19 seconds project uh doing and we were also um in interaction with other um projects uh for CDMO? How is that shaping up? 24:31 24 minutes, 31 seconds Yeah. So one of our projects is already commercialized in the US and uh you know we are already in talks to kind of 24:39 24 minutes, 39 seconds evaluate it to take it to uh a global level. So different markets are also being evaluated by our partner. Um but 24:47 24 minutes, 47 seconds for now I think it is primarily the US market and uh this is basically an NDA product where uh you know our client has 24:56 24 minutes, 56 seconds launched the product in the US. So the first year or so has been primarily about setting up the um the marketing 25:04 25 minutes, 4 seconds setups and kind of reaching out to the wholesalers and establishing that uh that channel. So uh sales have already 25:13 25 minutes, 13 seconds started and uh you know um what we what we're looking at is that for the next year uh you know we are looking for 25:21 25 minutes, 21 seconds further forecasting from them. So discussions are ongoing. Um so there is uh a good potential of the product in 25:30 25 minutes, 30 seconds the US market with the with the with the possibility of expanding it to the global markets. Um so there are of 25:37 25 minutes, 37 seconds course other discussions happening on other projects as well. But as I mentioned that you know the first half of the year was a challenging year 25:44 25 minutes, 44 seconds because uh many of the projects were temporarily put on hold uh because of the uncertainty around the tariffs. But 25:52 25 minutes, 52 seconds uh post September we have again started engaging with them and I think discussions have now uh are progressing 26:00 26 minutes quite well. We are also meeting these customers in March during DAD. So uh you 26:07 26 minutes, 7 seconds know we are confident that um there should be some positive movement around um some of the products uh some of the projects which were at relatively 26:16 26 minutes, 16 seconds advanced stages of discussion um you know um last year. So um and you know we 26:24 26 minutes, 24 seconds continue to file a lot of RSQs um primarily in the enzymes um as well as 26:31 26 minutes, 31 seconds in uh CMO opportunities for the innovator companies. So a lot of effort is being put around that um and uh you 26:40 26 minutes, 40 seconds know we are seeing positive momentum uh around this. 26:46 26 minutes, 46 seconds No also sir clarity in terms of whether that 100% tariffs which was imposed on brandit drugs from India to US does that 26:55 26 minutes, 55 seconds stay currently so it uh you know to our understanding um um it did not cover the the brands 27:04 27 minutes, 4 seconds which were already launched into the into the markets uh it you know we've not read the the the new fine prints but 27:12 27 minutes, 12 seconds even in the earlier stages what we got the clarity around October October, November that um the newer it it is not 27:19 27 minutes, 19 seconds going to be impacting the products that have already been launched into the US markets. So the um the customers that or the clients that we've been talking to 27:28 27 minutes, 28 seconds already have the products launched into the US markets. They are they are the innovator companies. So them shifting the the manufacturing to say from any 27:37 27 minutes, 37 seconds other part of the world to India would not be impacting them in any manner. But yeah, for any newer launches at least um 27:46 27 minutes, 46 seconds you know the last that we knew of it was impacting um those c those clients if they move their manufacturing out of the 27:54 27 minutes, 54 seconds US but again um it's a very dynamic uh world that we're living in. So in there could be potential changes happening 28:01 28 minutes, 1 second which you know we are not right now familiar with um but but yeah uh it doesn't impact already uh launched 28:10 28 minutes, 10 seconds branded products in the US. Sure. So, so lastly uh could you help us with uh what are what is the capeex number that we 28:19 28 minutes, 19 seconds are looking for this year uh and ahead? 28:24 28 minutes, 24 seconds So, capeex is primarily um you know maintenance capex that is uh 28:31 28 minutes, 31 seconds that is going on and um you know in terms of number maybe Ravi can share more. So um for the year you know 28:40 28 minutes, 40 seconds generally we have a capex number of around 100 150 crores as a maintenance capex 28:48 28 minutes, 48 seconds uh that's the number generally we have okay so that's the capeex that we are looking to spend for f2 28:57 28 minutes, 57 seconds uh and ahead of the year yes okay sure thank you so much thank Thank you. 29:10 29 minutes, 10 seconds Our next question come from the line of Naman Bhaga from Capital. Please go ahead. 29:19 29 minutes, 19 seconds Uh thanks for the opportunity. Uh firstly, can you explain in terms of uh 29:26 29 minutes, 26 seconds why was there a decline? Your voice is not. Hello. Can you hear me? 29:35 29 minutes, 35 seconds Yeah. Hello. Slightly better. 29:37 29 minutes, 37 seconds Yes sir. Just wanted to understand the contraction in gross margins despite 29:43 29 minutes, 43 seconds let's say around uh uh 79 80% kind of uh API revenue contribution. Uh anything specific that you want to call out? 29:55 29 minutes, 55 seconds No, not really. Um you know I think this is primarily on account of the product mix. um because if you if you're looking 30:02 30 minutes, 2 seconds at from a quarteronquarter basis, but if you would look at from a 9-month basis, actually the gross margin has moved from 77% to 78%. 30:13 30 minutes, 13 seconds So um you know on a quarter on quarter it'll be difficult to kind of um you 30:20 30 minutes, 20 seconds know take a take a call and uh as I mentioned it is primarily on account of the product mix which if you as you 30:27 30 minutes, 27 seconds extend the time period that kind of uh you know gets stabilized and on a 9 month period we've actually seen an 30:35 30 minutes, 35 seconds improvement in the gross margins by 100 bits. 30:40 30 minutes, 40 seconds Fair enough. uh one on the formulation business uh I believe that one 25 had 30:47 30 minutes, 47 seconds that middle east uh tender or let's say high base uh but Q3 this time also we 30:55 30 minutes, 55 seconds saw uh mine kind of decline uh so uh uh uh anything that you could call out in 31:03 31 minutes, 3 seconds terms of uh why there has uh there is still let's say decline in the formation 31:10 31 minutes, 10 seconds business And how should one uh you know uh 31:15 31 minutes, 15 seconds look uh let's say in terms of uh u so you know I'm not sure if I understood 31:24 31 minutes, 24 seconds correctly but um what I understand is that um you know the formulation business you're seeing that there is 31:32 31 minutes, 32 seconds slightly a reduction compared to the last year is that what you're asking yes why this is there is 14% decline in 31:42 31 minutes, 42 seconds the formulation business. Uh uh my belief was that uh the Middle East tender was uh stopped or halted in first half of FI25. 31:53 31 minutes, 53 seconds So there won't be any base impact or any let's say these uh these issues in the third quarter of FI26 but despite that 32:01 32 minutes, 1 second we see a decline uh in the formulation business. So what really is let's say what are the challenges? 32:10 32 minutes, 10 seconds No no no I think what the way that as I said that the way that one needs to look at on a quarter on quarter is that there could be uh areas that we have kind of 32:19 32 minutes, 19 seconds uh you know uh addressed through the API. So uh and you know that gets 32:26 32 minutes, 26 seconds reflected in our API numbers which grew at 24%. because they could have there are certain opportunities that would 32:35 32 minutes, 35 seconds have been captured through the through the API rather than through the formulation and this is primarily coming in the emerging markets because in the 32:43 32 minutes, 43 seconds India market uh as well as in the US markets the sales volumes have increased but in the emerging markets where we are 32:51 32 minutes, 51 seconds not able to say gain opportunities through the uh API only that that is where we kind of look through the 32:58 32 minutes, 58 seconds formulation route but if If that is uh getting addressed through API which in this quarter you are seeing with the 33:06 33 minutes, 6 seconds growth on the API then it had some bit of an impact on the on the formulations. 33:14 33 minutes, 14 seconds Mhm. Mhm. Uh so uh business so so you highlighted around uh 33:24 33 minutes, 24 seconds 20 25 K of sales deferred uh in 2Q. So has this been captured fully in 3Q? 33:35 33 minutes, 35 seconds So that was um that had been fully captured which was on account of the written confirmation. 33:41 33 minutes, 41 seconds Um so that was to the tune of around 20 to 25 crores which um you know um actually during our last call only that 33:50 33 minutes, 50 seconds that that sales had already been executed because it happened somewhere in um early early November or so. So 34:00 34 minutes that sales to that customers already started to to build on because it was only uh because they were 34:08 34 minutes, 8 seconds only awaiting the the certification. Uh once that certification was there then the sales started to pick up with them. 34:16 34 minutes, 16 seconds But if I ex out I adjust that and largec quarter on quarter that is the growth for the API business. So the base 34:26 34 minutes, 26 seconds business still has not let's say really uh grown if I adjust for that. Uh 34:33 34 minutes, 33 seconds no you will not be able to take that out because uh it is uh what you know it is not that the um that suppose in that 34:42 34 minutes, 42 seconds particular in this particular quarter that those customers have picked up double the quantity that they would 34:48 34 minutes, 48 seconds want. So it's not that um you know uh it what it does is it kind of gradually 34:56 34 minutes, 56 seconds spills over a little bit into the slowly and steadily into the uh subsequent quarters because uh if they picked up 35:03 35 minutes, 3 seconds something that uh instead of say July August they they now picked up in October November so it will take time for them to consume those quantities. It 35:12 35 minutes, 12 seconds is not that uh they picked up in November and they will again pick it up in December the 20s. So uh that does 35:20 35 minutes, 20 seconds have a little bit of spillovers happening. Um so it may not be the right way to kind of look at it that if we consider the growth minus that number 35:28 35 minutes, 28 seconds then the growth is a different uh number. Um that would not be the right way to look at the numbers. 35:36 35 minutes, 36 seconds Mhm. Okay. Uh and on the margin front uh this time we call out Stalon setup cost 35:44 35 minutes, 44 seconds as well. Could only provide what were the injectable plant uh losses for it 35:51 35 minutes, 51 seconds and what what were the setup cost related to Stellen? 35:56 35 minutes, 56 seconds The injectables would be close to around 10 to 12 crores and uh the Stalon cost would range anywhere between 5 to 10 crores per quarter. 36:09 36 minutes, 9 seconds Okay. Uh 5 to sorry 5 to 10 crores. 5 to 10 crores per quarter. 36:15 36 minutes, 15 seconds So uh do we expect uh this 5 to 10 cr uh cost to increase uh from here on uh or 36:24 36 minutes, 24 seconds this is uh I mean this is the base and here from here on we'll start seeing the 36:32 36 minutes, 32 seconds so so uh the process the procedure of already getting the licenses uh for the US business is already completed. I 36:40 36 minutes, 40 seconds think now we are gearing up for the launch activities. So in subsequent few months or so we should start seeing the 36:48 36 minutes, 48 seconds launch happening. So there would be sales realizations coming from Stalon uh because they are not doing not only for Concord products but they would also be 36:56 36 minutes, 56 seconds looking at in licensing opportunities. U so um and you know there would be certain costs which probably we were 37:05 37 minutes, 5 seconds incurring right now with third parties which would now be done through Stalon. 37:09 37 minutes, 9 seconds So um you know there could be some um cost which kind of gets uh compensated 37:18 37 minutes, 18 seconds because of the reduction that we may end up seeing with our third party uh distributor current marketing partner. 37:26 37 minutes, 26 seconds Um but uh but yeah as I think business with Stalon would grow these costs would then be accordingly taken care of. 37:35 37 minutes, 35 seconds Uh so anything in market uh any target in mind in terms of uh we'll be moving away from the distributor and completely 37:43 37 minutes, 43 seconds sell everything from this vicinity itself or there will be a mix of both third party and channel. No so in 37:53 37 minutes, 53 seconds licensing opportunities are going to be you know in the near future because as I said that since right now we are we just 38:00 38 minutes established and the approvals for the licenses have come in. So the in licensing opportunities are going to be somewhat of a medium-term 38:08 38 minutes, 8 seconds uh road map but um uh you know till that time all the uh doers that Concord has 38:17 38 minutes, 17 seconds uh the supplies are going to be from from from Concord to Stalon uh there are few Andas which currently our current 38:25 38 minutes, 25 seconds marketing partner is not marketing those products. So they are immediately going to go to Stellon for marketing. Um and 38:32 38 minutes, 32 seconds then you know um that is going to lead to um uh the the the sales uh increase for those for those products in the US. 38:42 38 minutes, 42 seconds Mhm. 38:45 38 minutes, 45 seconds Manufactured till that time in Concord till the time in licensing opportunities which are a medium-term do not get uh executed. 38:56 38 minutes, 56 seconds Mhm. 38:57 38 minutes, 57 seconds in this particular US CDM opportunity. Is this that uh animal health product or this is something else? 39:05 39 minutes, 5 seconds No, no, these are human products. So we have five do five A andds which uh No, not I'm not about I'm talking about the CDMO opportunity. 39:15 39 minutes, 15 seconds Oh okay. 39:18 39 minutes, 18 seconds Yeah, that is an animal product. Yeah, animal health product, right? Yeah. Yeah. 39:25 39 minutes, 25 seconds So I have more questions. I'll get back into the queue. Uh, sure. Thank you. 39:34 39 minutes, 34 seconds Thank you. 39:36 39 minutes, 36 seconds Ladies and gentlemen, in order to ensure that the management will be able to address all the question from the participant, we request you to kindly 39:43 39 minutes, 43 seconds limit your question to two question per participant. If you have a follow-up question, please rejoin the queue. 39:50 39 minutes, 50 seconds Our next question come from the line of Sumit Gupta from Antic Stock Broking Limited. Please go ahead. 39:57 39 minutes, 57 seconds Hi, good afternoon sir. Uh so first question is on that you mentioned increased engagement on second source supply post clarity on US ter. So are 40:05 40 minutes, 5 seconds these discussions largely with existing customers or new innovator or generic players and what is the kind of conversion trend uh that one should expect. 40:15 40 minutes, 15 seconds So I think engagement is going on on both fronts. Um you know most of the discussions that we're doing is where 40:23 40 minutes, 23 seconds we've already had uh some level of engagements on other products with those customers and uh you know that also 40:32 40 minutes, 32 seconds gives us an opportunity to engage a lot more on the newer products as a second source opportunities. Um secondly also 40:40 40 minutes, 40 seconds certain markets uh you know the customers have started looking at us uh as uh whom we were not engaging with 40:49 40 minutes, 49 seconds them in the past. So for example mistatin which is an anti-infective product uh it has a slightly different customer base as well. So under in those 40:57 40 minutes, 57 seconds in those cases those are relatively newer customers for con as well. Um you know most of those are newer customers. 41:05 41 minutes, 5 seconds Of course we have few Indian customers wherein we already have established relationships and you know that is helping us to kind of engage with them 41:13 41 minutes, 13 seconds on these newer products as well. So I would say it is a it is a mix of both. 41:18 41 minutes, 18 seconds Uh we do have couple of products at the API level which is our own API where we are engaging with uh the innovators and 41:28 41 minutes, 28 seconds I expect that maybe uh one of those projects hopefully will commercialize in this quarter. Um 41:36 41 minutes, 36 seconds and hopefully with another one we would take some validation batches at least if not in this quarter in the next quarter. 41:46 41 minutes, 46 seconds So I know of at least two two are there where you know the engagement level with the innovators are uh they are 41:54 41 minutes, 54 seconds relatively newer products and engagement levels are quite at an advanced stage. 41:58 41 minutes, 58 seconds Uh we have also actually to add on uh you know commercialized one anti-infective product with one of the 42:06 42 minutes, 6 seconds innovator companies as well. Um the supplies may not look much in this quarter because they've just started 42:13 42 minutes, 13 seconds picking up but I think we have um a good level of engagement visibility over the next year's time with them. 42:22 42 minutes, 22 seconds Understood. So how should we see the Q4 the exit uh run rate or as we enter FI27 42:29 42 minutes, 29 seconds especially in the APIs and uh second on the how should we see the formulation segment over the next two to three years. 42:37 42 minutes, 37 seconds See, I mean giving exact numbers for quarter 4 will be uh you know would be difficult but as I said that uh you know 42:47 42 minutes, 47 seconds there has been an uptick in revenues and uh you know we are optimistic of the improved performances in Q4 but u 42:54 42 minutes, 54 seconds difficult to put a number um uh you know to to how things are going to be in Q4. 43:01 43 minutes, 1 second Um but but yeah I think given the optimism which is there and given that we are getting uh a lot of second source 43:08 43 minutes, 8 seconds opportunities uh uh we are optimistic of the growth rate uh for for Q4. 43:16 43 minutes, 16 seconds Understood sir. And uh there was a question on formations also. So how should we see that like over the medium 43:23 43 minutes, 23 seconds term? Yeah. So I think formulation also will have a big drive growth driver because u you know um when when to 43:31 43 minutes, 31 seconds answer chinton's question uh which was there that you know uh in the past that injectables when I answer to his 43:39 43 minutes, 39 seconds question that injectables we looking at a 6% growth contribution to the to the revenues over the baseline of 18%. And 43:46 43 minutes, 46 seconds that is a facility which has recently got commercialized got its own got its WHO GMP also. So we are now engaging 43:53 43 minutes, 53 seconds with a lot of customers to kind of get that facility qualified for them. So in the next one to two years we should see 44:01 44 minutes, 1 second good level of growth coming in from not only our own branding generics but also as a contract manufacturing partner because no company in India has its own 44:10 44 minutes, 10 seconds fermentation API as well as uh injectable formulation. um even the 44:17 44 minutes, 17 seconds the the API companies who are importing the product or exporting the products to India they are also pure API companies 44:26 44 minutes, 26 seconds only they don't have their own formulations so there is no company like Concord which would have this mix of fermentation APIs and finished 44:34 44 minutes, 34 seconds formulations which would give us a good competitive edge to for our products as well as for contract manufacturing. So 44:41 44 minutes, 41 seconds uh you know over a medium-term I think injectables would would play out quite well or should play out quite well. Um and then from a medium to long-term 44:50 44 minutes, 50 seconds perspective is where we would start seeing growth coming in uh from the emerging markets with the registration processes going through um and that 44:59 44 minutes, 59 seconds should kind of also help growth in the uh medium to a longer term perspective. 45:05 45 minutes, 5 seconds So uh you know we are seeing good traction coming in from the injectable side and what we're doing with Stellon and with newer doseers being filed in 45:14 45 minutes, 14 seconds global markets that would help us drive growth uh in the oral solid um um you 45:21 45 minutes, 21 seconds know opportunity as well. So that's how at least we look at the the formulation business over the next two to three years. 45:29 45 minutes, 29 seconds Understood sir. Thank you. Thank you. 45:35 45 minutes, 35 seconds Thank you. Our next question come from the line of Alankar Garud from Kota Mahindra Bank. Please go ahead. 45:43 45 minutes, 43 seconds Hi, good afternoon everyone. Uh Ankor, do you still expect to grow overall sales in FI26? 45:52 45 minutes, 52 seconds So as I said Aanka u you know in my previous response that um difficult to give you a number in terms of what the 46:00 46 minutes the growth is going to be looking looking like but uh but yes I think the way that we are progressing the second half looks to be much better we have 46:08 46 minutes, 8 seconds already seen how quarter 3 is doing we're optimistic of quarter 4 um you know we have a good order book position 46:16 46 minutes, 16 seconds we continue to build on that uh over the next one one and a half month that we have and deliver those those uh u you 46:24 46 minutes, 24 seconds know those those quantities and sales to our customers but putting a number there would be challenging for me. 46:32 46 minutes, 32 seconds Okay. Uh I asked this because you had said that there would be growth at overall level in FI26. Uh but okay I 46:40 46 minutes, 40 seconds take your point. Uh second question is uh can you broadly break down the API growth across uh pricing volumes and new launches for 9 month FI26. 46:53 46 minutes, 53 seconds So if you see you know the launches that happened in last year were only for two products which was Nistatin and Blossen. 47:02 47 minutes, 2 seconds Um and uh these two products one is a parapho product the other is a generic product where you know there are only 47:10 47 minutes, 10 seconds three players and mainly three players in the global markets uh and both of those two players are based out of Europe. So that gives us a lot of 47:18 47 minutes, 18 seconds advantage to kind of become a leader uh on on that particular anti-infective product. Um and we have already started 47:27 47 minutes, 27 seconds seeing good traction coming on those products. uh we have started supplying validation quantities and exhibit batch quantities to our customers and they 47:35 47 minutes, 35 seconds have filed also. So hopefully in the next year we should start seeing commercial sales happening to these customers across global markets. But for 47:44 47 minutes, 44 seconds this year it has been primarily supplies of exhibit and validation batch quantities which on a on a number basis 47:52 47 minutes, 52 seconds it may not be that significant a number but much of the growth as I said is coming from our already commercialized 47:59 47 minutes, 59 seconds 28 29 products which are there. These two products that have got launched uh have seen more of validation and exhibit 48:07 48 minutes, 7 seconds batch quantities being supplied in this in this year within those 28 29 existing molecules. 48:15 48 minutes, 15 seconds How would you break the growth between volumes and pricing uh just a qualitative response should suffice? No. 48:23 48 minutes, 23 seconds So, so here it has been all volume growth only. I I I mean you know being in the kind of uh you know while I would 48:32 48 minutes, 32 seconds say that um in fermentation products where the kind of competition that we have there are only maybe two or three players on the market but in spite of 48:40 48 minutes, 40 seconds that I don't think that it is you can go with the pricing increase so it has been mostly or majorly uh a volume game 48:49 48 minutes, 49 seconds rather than a price increase uh way of growing as a pricing decline anor uh if I look 48:59 48 minutes, 59 seconds at 9 month FI26 for the API business uh uh I mean can it be as high as a double-digit pricing decline or more likely in the in the single digit range? 49:12 49 minutes, 12 seconds If if it if it would have been a doubledigit price decline then the gross margins would not have increased by 100 dips. 49:22 49 minutes, 22 seconds Okay. So more in the singledigit range would that be a a safe number to look at? 49:29 49 minutes, 29 seconds See again it depends along on a product to product and customer to customers. 49:33 49 minutes, 33 seconds Sometimes as I said earlier also in our previous discussions you give certain discounts to certain customers for larger growth in other products and all. 49:42 49 minutes, 42 seconds So uh on a on you know we have more than 300 customers. So if if we end up giving some customers some discounting in 49:51 49 minutes, 51 seconds anticipation of newer businesses, you know, I would say that to be in in in single digits, not because of pricing pressure, but because of larger 50:00 50 minutes opportunities to address to um is is how I would I would I would put it. 50:06 50 minutes, 6 seconds Got it. Got it. And a couple of uh smaller questions. Firstly, did you recognize any revenues from the injectable facility at all in the third quarter? 50:16 50 minutes, 16 seconds No, insignificant because it's been primarily the it's been primarily the exhibit batches that 50:23 50 minutes, 23 seconds we took which were supplied to the to the India market. Uh because you know you have to go with the six months stability and other things. So if we if 50:33 50 minutes, 33 seconds we did that you know we commercialized the facility in March so with six months of data also you end up being in September. So October, November, 50:41 50 minutes, 41 seconds December did see supplies of those validation batches. uh but it is insignificant in the overall uh revenue mix. 50:50 50 minutes, 50 seconds Fair enough. Uh and what was the share of imunosuppressent APIs to the overall API sales mix in 9 months? 50:58 50 minutes, 58 seconds So you know we what we would look at is that for the 77 78% of the API business it would be closer to around 70 75%. 51:08 51 minutes, 8 seconds Which has been historically been uh uh been the case. So there has not been many any major uh change in the mix uh 51:18 51 minutes, 18 seconds between imunosuppressants and anti-infective and other segments. So I'm happy to see that the other segments 51:25 51 minutes, 25 seconds are also growing um um u you know in terms of volumes because uh you know I 51:33 51 minutes, 33 seconds did mention that uh we are trying to work with the innovators in the anti-infective segment uh as well. So there is a lot of growth momentum which 51:41 51 minutes, 41 seconds is coming in the uh non-immuno segment as well while immuno segment continues to build and kind of you know stay 51:49 51 minutes, 49 seconds strong there. So the mix has been relatively more or less the same as it had been last year or last 9 months. 51:56 51 minutes, 56 seconds Understood. And the final question uh capacity utilizations please for unit one, unit two and unit three. 52:05 52 minutes, 5 seconds Yeah. Yeah. Hi. Um, so for the quarter u uh the unit one uh was at 81%. 52:13 52 minutes, 13 seconds Uh unit 3 was at 40% and uh unit uh two was at 27%. 52:22 52 minutes, 22 seconds Got it. Uh that's it from my side. Thank you and all the best. Thank you. 52:28 52 minutes, 28 seconds Thank you. 52:31 52 minutes, 31 seconds Next question come from the line of Chintan Sha from JM Financial Family Office. Please go ahead. 52:36 52 minutes, 36 seconds Hi uh thank you so much for the opportunity. So I had three questions. 52:40 52 minutes, 40 seconds So one is you know continuing from the previous participant if you can just comment uh more on your non-immunosuppressent portfolio 52:48 52 minutes, 48 seconds basically what is the strategy there the competitive intensity that is happening and over a longer term how do you see 52:55 52 minutes, 55 seconds the mix uh evolve that is the first question second is you know wanted to bit more understanding on R&D side 53:03 53 minutes, 3 seconds basically now since we are looking to go aggressive on CDMO side so how are we you know looking to ramp up our R&D oper operations. That's the second question. 53:12 53 minutes, 12 seconds And third, I think we see a good amount of cash that's building up on our balance sheet and now we majority of 53:19 53 minutes, 19 seconds CPEX we done through. So are we actively looking at any inorganic opportunities to probably add to our portfolio and 53:26 53 minutes, 26 seconds grow more? So these are my three questions. Thank you. 53:30 53 minutes, 30 seconds Oh, thanks. So um you know um as answered earlier that for the 9 months 53:38 53 minutes, 38 seconds we've not you know we we have seen that the mix has been more or less the similar um uh while volume growths are 53:45 53 minutes, 45 seconds also happening in the anti-infectives antifungal and enco segment. Now even the the the newer products that we have 53:54 53 minutes, 54 seconds uh the ones that that are there in the pipeline all of them are in the anti-infective antifungal and enco 54:01 54 minutes, 1 second segment and the underlying principle of the you know they are again products where you would see limited competition 54:09 54 minutes, 9 seconds um and they are complex and niche products so like the ones that we launched last year like Nistatin as I mentioned earlier there were only three 54:17 54 minutes, 17 seconds players concord being one of them. Um you know we have few products which are there in the pipeline right now where 54:23 54 minutes, 23 seconds there are again um you know um maximum two or four players. So and most of them as one would see are either from 54:32 54 minutes, 32 seconds Southeast Asia or or um Europe. We have one product which is in pipeline which 54:40 54 minutes, 40 seconds is uh where you have good competition from China but the way that we are developing that product we the cost 54:47 54 minutes, 47 seconds competitiveness is also significantly lower than that of China's cost. So uh you know we have a lot of products where 54:54 54 minutes, 54 seconds we are actually selling our API into the China market. It's not that this is one such product. We have many products where we are much much more competitive than even the Chinese manufacturers. 55:05 55 minutes, 5 seconds Um so uh you know to answer your question the newer set of products which are there um there is the the the base 55:14 55 minutes, 14 seconds principle remains the same as it has been for the imunosuppressants and it is just that it has been a much smaller 55:21 55 minutes, 21 seconds time to kind of uh you know gain market share but many of these products are gaining market share as we speak. it's 55:29 55 minutes, 29 seconds just a matter of time till the time you know till it reaches to the numbers that you would have seen in our other segments. So, so that's how you know we 55:38 55 minutes, 38 seconds would look at the nonimmuno segments. Um when we talk about the R&D and CDMO, we have more than 100 scientists which are 55:47 55 minutes, 47 seconds working in the R&D. So you know the team is continuously working on new products development as well as the CDMO 55:54 55 minutes, 54 seconds opportunities and you know once any newer project comes in each customer is assigned a project leader who works very 56:02 56 minutes, 2 seconds closely with with that customer. So here it is more about the expertise which is 56:08 56 minutes, 8 seconds there rather than the cost that gets loaded onto that's why you would see that our R&D cost typically stays 2 to 56:16 56 minutes, 16 seconds 3% which is significantly lower than the cost which many of the formulation companies would see because it is more of a expertise in a skill-driven rather 56:24 56 minutes, 24 seconds than a scaledriven uh developmental cost. So but you know if we do feel the need at any point of 56:32 56 minutes, 32 seconds time to ramp up our people you know that that is not a challenge at our end but at least for now uh you know we are not 56:40 56 minutes, 40 seconds seeing we are not seeing any any um reasons to kind of go towards that path. 56:45 56 minutes, 45 seconds I think um we have a good mix of um PhDs and R&D scientists who are working on 56:52 56 minutes, 52 seconds these products. Um to answer your third question that you know while we have a good healthy cash position we are 57:00 57 minutes looking at different opportunities and I would say those opportunities are being looked not only organically but also inorganically 57:08 57 minutes, 8 seconds um so um you know there are fewer opportunities that we we are continuing to look at or uh inorganically and there 57:17 57 minutes, 17 seconds are few opportunities that we are evaluating if kind of look it from um to grow in agencies of fermentation to take 57:24 57 minutes, 24 seconds it organically as well. So, uh you know both the two options are there on the table um to kind of see that how we can optimally utilize this cash flow. 57:35 57 minutes, 35 seconds Okay, great. Uh thank you uncle that was very detailed and helpful. Thank you. 57:44 57 minutes, 44 seconds Thank you ladies and gentlemen. due to the time constraint we will now take the last question for today's uh conference 57:51 57 minutes, 51 seconds and that comes from Mr. internate uh from Greek captain please go ahead thank you for the followup opportunity 57:59 57 minutes, 59 seconds just a clarification on the capex maintenance capex number which you mentioned you know that 100 150 cr 58:06 58 minutes, 6 seconds annually on the asset base or gross block of 1100 or uh last year it looks uh seems to be pretty high we used to 58:15 58 minutes, 15 seconds give guidance around 2025 cr earlier so I'm just trying to understand uh whether why by the increase in maintenance part 58:24 58 minutes, 24 seconds and second is on the cash balance which you mentioned it uh is it 129 1 1298 crores uh as of December uh that that's 58:33 58 minutes, 33 seconds the number you mentioned that these are the two sorry yeah so uh you know of course uh you're 58:42 58 minutes, 42 seconds right you know there is a level of maintenance capex across uh you know which is close around 30 40 crores um we 58:51 58 minutes, 51 seconds also have some capit which is going for uh certain newer projects that we are we are trying to build on with uh with uh 59:00 59 minutes some of our uh customers and uh also certain uh opportunities to kind of uh 59:08 59 minutes, 8 seconds um grow over the next year. So there is some some bit of traffic happening around there in addition to the to the maintenance capital. 59:15 59 minutes, 15 seconds So it's a blend of uh growth and maintenance. Uh is it 100 150? Okay. 59:20 59 minutes, 20 seconds Okay. Okay. And the cash balance is 1290 or uh 1290. 59:28 59 minutes, 28 seconds Uh investment is 340 cr total cash in the investment is 340 crores. 59:37 59 minutes, 37 seconds Okay. Sorry I lost lost your voice. Hello. 59:45 59 minutes, 45 seconds It would be uh there is a correction there. So it is close to 3 350 crores. 59:51 59 minutes, 51 seconds Total cash and cash equivalent will be 350 or K, right? Yeah. Yeah. 59:57 59 minutes, 57 seconds Okay. Okay. Got it. Thank you. Thank you so much ladies and gentlemen. 1:00:04 1 hour, 4 seconds That is the last question for today. I would like to hand the conference over to the management for the closing comments. Thank you and over to you team. 1:00:12 1 hour, 12 seconds So, thank you everyone for joining on our Q3 and 9month FY26 earnings call. We hope we have been able to address all 1:00:20 1 hour, 20 seconds your queries. For any further information, please get in touch with us or SGA, our investor relation advisor. 1:00:28 1 hour, 28 seconds Thank you once again and have a good evening. 1:00:30 1 hour, 30 seconds Thank you. Thank Thank you sir. Ladies and gentlemen, on behalf of Antique Stock Broking, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.