Laurus Labs Limited — Q4 FY26

Laurus Labs Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=1dgpkHt8mOI Published: 13 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Loris Labs Q4 FY26 earnings conference call hosted by DAM Capital Advisers. 0:12 12 seconds As a reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to ask 0:19 19 seconds questions after the presentation concludes. Should you need assistance during this conference call, please 0:26 26 seconds signal an operator by pressing star then zero on your Touchstone phone. Please note that this conference is being 0:33 33 seconds recorded. I now hand the conference over to Miss Py Sha from DAM Capital Advisors. Thank you and over to you ma'am. 0:43 43 seconds Thank you. Good afternoon everyone and a very warm welcome to Loris Labs Q4 FI26 earnings call hosted by DAM capital 0:51 51 seconds adviserss on the call today we have representing Loris Labs management Dr. Satya Narayan Chava founder and CEO Mr. 0:59 59 seconds VB Rabi Kumar executive director and CFO Mr. Krishna Chaititanya Chava ed head CDMMO Mr. Somia Chava Ed Gentri and 1:08 1 minute, 8 seconds commercial and Mr. Vive Kumar, ABP investor relations. Before we proceed, I would like to remind you that some of the statements made during the call 1:16 1 minute, 16 seconds today could be forward-looking in nature and a safe hopper statement to this effect has been included in the press release that has been shared on the company's website. I hand over the call 1:25 1 minute, 25 seconds to Dr. Chava to make the opening comments and then we'd open the floor for questions. Please go ahead sir. 1:34 1 minute, 34 seconds Good afternoon to all our stakeholders. 1:36 1 minute, 36 seconds Our company's purpose of chemistry for better living guides us everything what we do. In 2026 we significantly 1:46 1 minute, 46 seconds accelerated our performance reflecting sustained demand in technologydriven commercial offerings. The transformation 1:53 1 minute, 53 seconds of our portfolio is well underway. The momentum is building as we continue to execute on our strategy with clear 2:01 2 minutes, 1 second focus. In 2026, our business benefited from successful clinical and commercial supplies for complex NC compounds, ramp 2:10 2 minutes, 10 seconds up our supplies of the few new launches and sustained global leadership in antiatal therapy where we continue to 2:17 2 minutes, 17 seconds service one/ird of the global HIV population. We continue to advance our well recognized development and manufacturing platform capabilities with 2:25 2 minutes, 25 seconds global customers. I'm confident in our ability that this will further expand business opportunities in coming years. 2:33 2 minutes, 33 seconds The company has exceeded 8,200 cubic meters of reactor volume for small molecule API and intermedate 2:41 2 minutes, 41 seconds manufacturing in FIA 26. As we progress, we are making significant investment behind important technologies, high 2:49 2 minutes, 49 seconds growth modalities, large scale manufacturing infrastructure to to support our clients needs. Currently we 2:56 2 minutes, 56 seconds are managing several capex growth projects which will be executed in the next two years. 90% of project spend is 3:04 3 minutes, 4 seconds towards mid and large scale manufacturing. I will just make a few uh areas where we are investing. 3:13 3 minutes, 13 seconds We are creating a large manufacturing green field project unit 7 and the first production block will ready for 3:20 3 minutes, 20 seconds commercial validation by March 27 and four additional manufacturing during the next financial year 28 with a combined reactor volume of over 2,000 m cube. 3:33 3 minutes, 33 seconds Second commercial scale captured manufacturing block will be ready for commercial scale validation during Q2 of this financial year of A27 animal 3:42 3 minutes, 42 seconds capacities at unit 10 which is addition to LSPL unit 2. Uh fourth a fermentation green field site uh for our Lis bio phase one will start by end of 2026. 3:54 3 minutes, 54 seconds Lastly, we are also spending on formulation facility under our Karka giant venture in Adaban and we expect phase one will be completed by mid 2027. 4:06 4 minutes, 6 seconds Moving on to our financial business, Lis maintained its business momentum and delivered robust operational and 4:14 4 minutes, 14 seconds financial performance for the financial year 2026. The company's revenues were 6,813 cr with a growth of 23% over 4:22 4 minutes, 22 seconds previous year. This was mainly driven by significant growth in CDMO business supported by affordable medicine 4:29 4 minutes, 29 seconds portfolio uh which is generics. Grass margins were healthy and maintained around 50 60% range. Neita margins 4:37 4 minutes, 37 seconds expanded by 6.7 percentage points to 26.8%. 4:42 4 minutes, 42 seconds Our product mix within business division and operating leverage have continued to do well supporting our healthy margins overall. 4:51 4 minutes, 51 seconds When we look back at our last six years, Lis has delivered on successful transformation across both business and 4:58 4 minutes, 58 seconds product portfolio. Today, our share of CDMO business has increased from 13% six 5:04 5 minutes, 4 seconds years back to over 30% right now. ARV revenues the contribution from AR revenues come 5:11 5 minutes, 11 seconds down from 67% to 41% at the current financial year while sustaining absolute sales and global leadership in HIV 5:19 5 minutes, 19 seconds therapy. and we're deepening our CMO partnership based on consistent supply track record of large volume API and FD. 5:27 5 minutes, 27 seconds I would request Mr. Kruchetta to share key updates on our CDMO business. Thank you. Um the CDMO business delivered 5:36 5 minutes, 36 seconds robust operational execution for the full year clocking at a little over 2,000 crores at 2080 crores. For the 5:44 5 minutes, 44 seconds small molecule CDMO, we have clocked a growth of about 38%. Uh with the sales of uh for the full year at 1896 crores. 5:54 5 minutes, 54 seconds The growth essentially came from late stage pipeline programs, commercial NCPI supplies to several global partners and 6:04 6 minutes, 4 seconds also ramp up of the grow growth projects. For the small molecule side at Q4, our sales stood at about 524 crores. 6:13 6 minutes, 13 seconds Major as I said majority of the business has come from the commercial revenues which are uh which are programs that are very early in their commercial journey. 6:23 6 minutes, 23 seconds The underlying demand momentum for complex APIs remains strong driving increase of outsourcing activities with 6:30 6 minutes, 30 seconds trusted partners like Loris which operates in advanced technology platforms um offering leading solutions in both 6:40 6 minutes, 40 seconds chemistry and biology with large manufacturing capacities. Our uh small molecules pipeline continues to expand 6:47 6 minutes, 47 seconds with focus on high value programs and projects and fully integrated programs across technologies such as 6:55 6 minutes, 55 seconds biocatalysis, flowchemistry, hydrogenations, continuous manufacturing of drug products, high potent APIs 7:02 7 minutes, 2 seconds amongst others. There is continued investment into capacity creation at Wise and also we are advancing quite 7:10 7 minutes, 10 seconds well as Dr. mentioned on commercial peptide manufacturing capabilities based on customer demand. Coming to Lawrence 7:17 7 minutes, 17 seconds Bio the bio division reported a Q4 sales of about uh 65 crores um on an ear basis 7:26 7 minutes, 26 seconds that's about 124% partly due to the lower base uh that was there last year. 7:32 7 minutes, 32 seconds If you look at our fullear year numbers, sales has increased by about 15% which is largely along the expected. 7:40 7 minutes, 40 seconds The good part is that this growth is supported by customer revenue diversification and also continued pipeline progress on global accounts 7:49 7 minutes, 49 seconds both in a animal origin free portfolio and the CDM construction work for the commercial scale fermentation facility in Wisac is 7:58 7 minutes, 58 seconds progressing well and is along the plan and we expect the phase one capacity to be operational by the end of 2026. Now 8:07 8 minutes, 7 seconds I'd like to request Miss Somia Jawa to share key updates on our affordable medicines portfolio. 8:14 8 minutes, 14 seconds Thank you. Uh revenue from the affordable medicines division formally genered at 1,223 8:21 8 minutes, 21 seconds course in Q4 with the momentum sustained on an absolute basis though the growth has been slightly moderated for the full 8:29 8 minutes, 29 seconds year. The division delivered 4733 source in revenue reflecting a strong 18% growth. FI26 growth was driven by 8:38 8 minutes, 38 seconds higher volumes across ARV and oncology portfolios along with strong traction from recent launches in developed 8:45 8 minutes, 45 seconds markets. We maintained a consistent supply track record despite global supply chain challenges. However, 8:53 8 minutes, 53 seconds increasing geopolitical disruptions may impact raw material availability and logistics potentially creating a near-term pressure on OTF performance 9:02 9 minutes, 2 seconds across the industry. That said, the business outlook remains steady. uh we continue to focus on optimized capacity 9:10 9 minutes, 10 seconds allocation, improved supply efficiency, ramp up of new product launches, integrated CMO opportunities and uh 9:18 9 minutes, 18 seconds expanding our footprint across developed and emerging markets particularly in the non ARB segments. The overall solid 9:25 9 minutes, 25 seconds facility expansion is progressing well with formulation capacity increased by 20% in FI26 to 12 billion units. On the 9:35 9 minutes, 35 seconds regulatory front, we have filed a cumulative 92 DMFS to date. In developed markets, we filed seven dosiers and 9:43 9 minutes, 43 seconds received six approval FI26 taking the total to 94 product filings cumulative. Thank you. 9:50 9 minutes, 50 seconds Thanks Krishna Somia for the overview of genetics and CDMO business segments. On R&D front, overall R&D spending to sales 9:58 9 minutes, 58 seconds for FA26 was at 4.1% increased by 10% year on year including our expenditure on cell and gene therapy space. The 10:07 10 minutes, 7 seconds spend is in line and we expect a similar percentage going into the next year as well. We continue to invest in portfolio 10:14 10 minutes, 14 seconds focusing on product complexity, scale and sustainable technology platforms. 10:19 10 minutes, 19 seconds Let me share a brief on our quality and ESG side as well. In 2026, the company underwent close to 132 quality audits by 10:28 10 minutes, 28 seconds multiple broadway grid agencies and several customers. Company has successfully passed audit inspections without any critical findings. We remain 10:36 10 minutes, 36 seconds committed to advancing quality systems meeting highest compliance standards from clients and global regulators as well. Besides, we continue to advance on 10:45 10 minutes, 45 seconds our ESS ESG initiatives which is getting sustained recognition from global rating agencies. You may refer uh to our IR 10:52 10 minutes, 52 seconds presentation for more details. To conclude, our business model has proven as resilient and we remain well positioned to execute on our growth strategy ahead. 11:03 11 minutes, 3 seconds We will continue to focus on deepening strategic partnerships on integrated capabilities, strengthening technology 11:11 11 minutes, 11 seconds platforms and ecosystems, advancing pipeline as well as focused investment into capacity creation that will sustain 11:18 11 minutes, 18 seconds our success in the long term. I'd like to again recognize the commitment and efforts of our dedicated teams towards 11:25 11 minutes, 25 seconds strong R&D and operational execution enabling continuous transformation of our company. Now I request Mr. Mr. 11:32 11 minutes, 32 seconds Ravikumar ED and CFO to share overall financial highlights. 11:36 11 minutes, 36 seconds Uh thank you Dr. Satya. A very warm welcome to everyone on quarter 4 and full year FI26 earning call. Let me quickly take out through the highlights. 11:47 11 minutes, 47 seconds Total income from operations is 6,813 crores with a growth of 23%. For the 11:54 11 minutes, 54 seconds quarter 4 we are at 1812 crores with a 5% growth. uh despite the ongoing macroeconomic challenges we have 12:03 12 minutes, 3 seconds continued to see the high level of demand in our integrated offerings. 12:07 12 minutes, 7 seconds Gross margin maintained at healthy level of 60% 60.4% and for a quarter 4 it is at a 61.4% 12:16 12 minutes, 16 seconds mainly due to better product mix and the some of the improved process improvement efforts. Iota for the year stands at 12:24 12 minutes, 24 seconds 1826 crores with the 26.8% 8% margin which is well in line with our broader outlook. For the quarter 4, Ieta 12:32 12 minutes, 32 seconds reported 523 crores with a margin of 28.9% due to stop strong operating leverage. 12:41 12 minutes, 41 seconds Profit after tax for the year 889 crores with a growth of 148% and quarter 4 is 12:46 12 minutes, 46 seconds at uh 279 crores. So is around 17.7% improved from 9.7% for the previous 12:54 12 minutes, 54 seconds year. On the capex front we which is a key enabler for Loris for future growth and also a key focus for the 13:01 13 minutes, 1 second organization now and going forward we invested close to 335 crores for the quarter and,070 crores for the full year 13:11 13 minutes, 11 seconds more than 75% investment expansion of CDMO and CMO capability rest in common infrastructure like ETP 13:19 13 minutes, 19 seconds and maintenance. Our net debt stood at 2.2,285 2285 crores uh due to and IA 13:27 13 minutes, 27 seconds debt by IBITA is 1.25 uh versus 2.3 last year on the back of strong internal cash flows. Of course, 13:35 13 minutes, 35 seconds though there is a debt increase in the quarter 4, still we are at a 1.25 uh debt level. On the capital allocation 13:43 13 minutes, 43 seconds front, our strategy remains unchanged and we will continue to prioritize investment into high value business segments to drive near and long-term growth and returns for our shareholders. 13:55 13 minutes, 55 seconds You can refer our IR presentations for more details. Um and last actually the because of this crisis today we are able 14:03 14 minutes, 3 seconds to manage our supply chain um and we don't have any uh supply disruptions for this water and we are expecting not to 14:12 14 minutes, 12 seconds have any disruptions even till the end of June. Uh with this I would request the moderator to open the lines for pure day. 14:22 14 minutes, 22 seconds Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. 14:33 14 minutes, 33 seconds If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use 14:40 14 minutes, 40 seconds handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 14:51 14 minutes, 51 seconds The first question comes from the line of Sajal Kapoor from Antifragile Thinking. Please go ahead. 15:00 15 minutes Yeah. Hi and good evening uh team and thanks for taking my questions. And Dr. 15:03 15 minutes, 3 seconds Satya, as we commission and scale the upcoming Weise 400KL fermentation, what 15:11 15 minutes, 11 seconds could be the single biggest source of yield uh variability um from um things such as contamination, 15:19 15 minutes, 19 seconds oxygen transfer, strain stability to uh even downstream recovery. And how tight 15:27 15 minutes, 27 seconds do we expect the batchto batch um variance um when when we when we actually commercialize that 400k 15:35 15 minutes, 35 seconds capacity I think the initial batches what we are going to take up in our expanded 15:43 15 minutes, 43 seconds fermentation capacity is non-farmaceutical non 15:49 15 minutes, 49 seconds food also it is it is mostly industrial chemicals areactants and then polymers 15:55 15 minutes, 55 seconds So uh where the uh tighter is very very high um and we don't see the biggest 16:02 16 minutes, 2 seconds challenge in any fermentation you know contamination and uh we don't have a very long tedious downstream processing 16:10 16 minutes, 10 seconds for the products what we intend to manufacture in that facility wouldn't expect any challenges in downstream manufacturing s 16:19 16 minutes, 19 seconds right okay so just a just a quick follow up on that one so clearly we are moving into the world of material sciences and bio biioaterials. I mean what what does 16:29 16 minutes, 29 seconds it mean for the steady state economic model for for Loris? I mean in terms of utilization, yields, pricing structure and customer concentration and which of 16:38 16 minutes, 38 seconds these kind of variables are most sensitive in achieving the aspirational return thresholds? 16:47 16 minutes, 47 seconds The products what are moving to YAC are from our Bangalore facility. So the 16:57 16 minutes, 57 seconds commercials are achieved and uh we made those products in our 45,000 L 17:05 17 minutes, 5 seconds fermentation fermenttors and then those are moving to 110,000 L per year. Um we 17:14 17 minutes, 14 seconds believe that is the optimum size for these products what we are making. Uh so 17:20 17 minutes, 20 seconds this unit will see the early commercial stage production for those products. So 17:28 17 minutes, 28 seconds we have crossed multiple lines of multiple gates I would say in the commercialation of those products. The uncertaintity of the commercial success 17:36 17 minutes, 36 seconds for those product is very very less. So we have very good visibility. Um once those products are commercialized, we 17:44 17 minutes, 44 seconds have to move to much bigger facility and that is not the commercial size or the products what we intend to initially manufacture. 17:53 17 minutes, 53 seconds Sure. Sure. That's helpful. Dr. Satan my second question is um so beyond the R2 um at Bangaluru and this 400 KL at 18:01 18 minutes, 1 second Viscac um looking at the horizon beyond 2030 if I may is biotech getting the attention it truly deserves because 18:10 18 minutes, 10 seconds that's the sort of coming wave um we we may or may not accept it publicly along with the AI of course so just to 18:16 18 minutes, 16 seconds understand the capex better I mean how much of what um we are planning over the next um few years say 3 to 5 years is 18:25 18 minutes, 25 seconds already backed by um committed or highly visible demand versus any speculative capacity we may be building ahead of demand. 18:37 18 minutes, 37 seconds Our biotech initiatives spread across many things biocatalysis, enzyme manufacturing, animal free cell 18:46 18 minutes, 46 seconds culture ingredients, precision fermentation, cell therapy, gene therapy, uh fermentation of pharmaceutical intermedals. So what we 18:54 18 minutes, 54 seconds are talking right now in our unit 4 bio expansion at VISAC is only for 19:01 19 minutes, 1 second non-farmaceutical one where as you are aware we also investing in our gene therapy and ADC manufacturing facility 19:09 19 minutes, 9 seconds in Hyderabad and our subsidiary in Bombay they're also investing further in our cell therapy cy manufacturing um so 19:18 19 minutes, 18 seconds there are multiple fronts going on s Sure. Sure. Just a quick follow um up on 19:25 19 minutes, 25 seconds that one. Dr. Satya for the capacities uh we commissioned about let's say two three years back uh where uh is the 19:33 19 minutes, 33 seconds utilization level at the moment on those capacities um uh versus you know what you um or the team initially expected. 19:42 19 minutes, 42 seconds Are we are we broadly in line with the utilization for the capacities that went live about two years three years back or or are we um below that aspirational 19:51 19 minutes, 51 seconds threshold or above that threshold in R2 our 4 into 45,000 liter fmentals 19:59 19 minutes, 59 seconds are fully occupied and that is the reason we quickly expanded capacity in YZ and we expect this capacity um 20:07 20 minutes, 7 seconds current capacity we expect to manufacture two products and uh once the commercialization happens and the fast commercial production is delivered. We 20:15 20 minutes, 15 seconds expect to expand there itself to 1 million L. There we have space and one product is 20:23 20 minutes, 23 seconds downstream without any chemical operations. The one product we have to do some chemical operations that also will be done by us. 20:32 20 minutes, 32 seconds So we don't see any capacity unutilization challenges for the plant what which will go online by end of this year. 20:43 20 minutes, 43 seconds Super, super. Thank you so much. I'll rejoin the queue Dr. Septa. Thank you. 20:48 20 minutes, 48 seconds Thank you. The next question comes from the line of Bhat Siri Purapu from Quest for Value Capital. Please go ahead. 20:58 20 minutes, 58 seconds Yeah. Uh hi sir. Uh so if you see our Indian CDMO landscape, uh some of the CDMOs are getting impacted due to 21:06 21 minutes, 6 seconds inventory restocking. Yeah. So this is common scenario because CDMOS are dependent on ordering pattern of 21:14 21 minutes, 14 seconds innovators. Yeah. So more we are concentrated on few products with more risk of uh you know restocking risk. So 21:22 21 minutes, 22 seconds can we say that do we have enough number of CDMO commercial products to say that we do not have product concentration 21:29 21 minutes, 29 seconds risk uh and uh you know we are insulated from this inventory stock risk. 21:36 21 minutes, 36 seconds Um in the last 18 months we delivered three APIs for commercial 21:44 21 minutes, 44 seconds um and those have patent life of several years. So they're very early in their commercial phase. Um and uh based on 21:54 21 minutes, 54 seconds indications from our partners they are uh they gave a very clear forecast for 22:02 22 minutes, 2 seconds next several years and we don't see any stocking destocking challenges for these molecules at this point of time. 22:10 22 minutes, 10 seconds Good. So we don't have any product concentration like on single product or two weekly products contributing more in the TDMO. Basically that's what you're saying. 22:19 22 minutes, 19 seconds Yeah, that's what it is. Thank you. 22:23 22 minutes, 23 seconds Good. And my second question is like if you see our yearly performance of our results, so last year our IBITA margin was 20% and and this year is around 26%. 22:34 22 minutes, 34 seconds So there is a increase of around 600 basis points. Yeah. And majority of this increase is coming from gross margin uh 22:41 22 minutes, 41 seconds improvement because our gross margins have improved from 55% last year to 60%. 22:47 22 minutes, 47 seconds So we did we did not see the operating leverage paying out significantly yet. 22:53 22 minutes, 53 seconds Yeah. So is it right to assume that the operating leverage is going to play uh significantly over the next two years? 23:02 23 minutes, 2 seconds Uh we expect so barat. So your point is very valid. Yeah. So operational leverage is coming. See we keep on 23:09 23 minutes, 9 seconds expanding capacities. So we are in the at the border of leverage or de leverage. So but next year we expect 23:18 23 minutes, 18 seconds some operational leverage will come and uh see as you observed that aid margins are going up. Even look at four quarters 23:27 23 minutes, 27 seconds of the fi26 margin continuously kept improving. So if you look at the Q4 it is almost at the 29% margin. 23:38 23 minutes, 38 seconds Yeah, good. Thank you. Thank you. That's it from my Thank you very much. Bye. Thank you. Thank you. 23:44 23 minutes, 44 seconds The next question comes from the line of Cherak Sha from White Pine Investment Management. Please go ahead. 23:52 23 minutes, 52 seconds Yeah, thank you for the opportunity and congratations for good results. Sir, I have three questions. The question is 23:58 23 minutes, 58 seconds one on the CDMO side. So if you can just indicate uh uh that when your CDMO 24:07 24 minutes, 7 seconds transitions to CMO uh how does the gross margin and AIDA margin interplay happens because uh so 24:16 24 minutes, 16 seconds that's question one question two on the ARB business uh anything on the pricing that you would 24:23 24 minutes, 23 seconds like to comment that uh which has helped you on margin side or realization side and I'll come Third question based on your response. 24:33 24 minutes, 33 seconds Um see I would like to clarify on the two terminology what we use CDM and CMO. 24:39 24 minutes, 39 seconds CDMO is proprietary brands um one one customer one product um and some 24:47 24 minutes, 47 seconds development is also included. When we say CMO CMO is a generic fully integrated projects where we make API and formulations to a generic customer. 24:57 24 minutes, 57 seconds So uh when we are saying our CDM revenues we are not including any CMO revenues coming from generic products 25:08 25 minutes, 8 seconds [clears throat] 25:12 25 minutes, 12 seconds to interrupt you're not you're not audible uh please use your uh handset on the handset mode. Yes go ahead please. 25:20 25 minutes, 20 seconds Hello. 25:21 25 minutes, 21 seconds Yeah hello visible audible. Yeah sir, I was more referring to I was more referring to the development phase. 25:30 25 minutes, 30 seconds Uh how does the margin trajectory between gross and eida margin play out if you can educate us on that? 25:38 25 minutes, 38 seconds See we are not publishing our aida and gross margins segment wise. So that we 25:46 25 minutes, 46 seconds don't want to do that. Uh and the second maybe on a RV pricing pricing broadly were constant during the financial year. 25:56 25 minutes, 56 seconds Uh we in improved our sales. Uh we used to say 2500 plus R means 200 but we did 26:02 26 minutes, 2 seconds 2,800 that was because of a full utilization of our ARV assets. Um yeah 26:10 26 minutes, 10 seconds gross margin improvement is on account of raw material price softening and process improvements. Yeah. 26:17 26 minutes, 17 seconds Okay. Sir, would it be could it be fair to make an assumption that when you move from development to commercials while your growth margin would be lower in 26:25 26 minutes, 25 seconds commercial operating leverage will ensure that your EIDA margins are similar to the development phase. Is it a right statement? 26:34 26 minutes, 34 seconds I would say whether it is development or commercial in our opinion gross margins will remain similar but we make more 26:41 26 minutes, 41 seconds profit in commercial rather than uh development because development we employ more people during R&D um tech 26:48 26 minutes, 48 seconds transfer and all. So I would say rather development commercial NC programs will have similar gross margins will have similar gross margin and the 26:56 26 minutes, 56 seconds and commercial would have a higher abida margin because of more volumes and operating right that point and just to follow up on this 27:04 27 minutes, 4 seconds so you indicated three projects have moved from development to commercials uh how should we look at next two years of 27:11 27 minutes, 11 seconds CDMO uh space given the stupendous growth that we have seen uh can we maintain that kind 27:19 27 minutes, 19 seconds journey uh given the pipeline that you have and or what are the the key monitors that you would like to highlight from your perspective would like to answer this question. 27:29 27 minutes, 29 seconds Yeah, I think while we are not giving any indicative numbers we expect post positive growth in the CDMO in the coming years as well. 27:41 27 minutes, 41 seconds Okay. Is it hing it is what I referring to is is it hinging on one or three large projects or it is more even spread 27:50 27 minutes, 50 seconds so that concentration risk doesn't play out that significantly. I was more referring to that at this point in time given the 27:59 27 minutes, 59 seconds visibility that we have we're not expecting a concentration risk or heavy reliance on one single uh program. Um so 28:08 28 minutes, 8 seconds yeah in in from current standpoint I think we are fairly well derisked from a concentration perspective. 28:15 28 minutes, 15 seconds Okay thank you very much. 28:19 28 minutes, 19 seconds Thank you. The next question comes from the line of Mul Panchani from 40 cents. Please go ahead. 28:27 28 minutes, 27 seconds Hello sir. Thank you so much for the opportunity. Am I audible? Yes you're audible. Yeah. 28:32 28 minutes, 32 seconds Okay sir. Uh I am of my first question is about uh CDMO pipeline. Out of the expanding CDMO pipeline, how much is 28:40 28 minutes, 40 seconds expected to convert into commercial revenues uh in FI27 and what is the revenue visibility from late stage molecules? 28:50 28 minutes, 50 seconds Um that's probably a we're unfortunately not in a position to give you like very specifics in terms of 28:57 28 minutes, 57 seconds what programs are we working on. But with that being said, uh there's multiple late stage programs that we are 29:05 29 minutes, 5 seconds currently involved in and but as you're aware given the clinical nature of the compounds, we can't necessarily 29:13 29 minutes, 13 seconds accurately put in and say that FI27 will be the commercialization of that molecule or not. uh but yeah the the 29:21 29 minutes, 21 seconds pipeline is quite uh you know robust and we're confident in continuing to post uh 29:28 29 minutes, 28 seconds growing numbers in the CDM side right sir my second question is about the margins uh how sustainable are the 29:36 29 minutes, 36 seconds current uh 29% margins and how much is driven by mixed versus temporary operating leverage 29:44 29 minutes, 44 seconds we are very confident on uh maintaining or improving stable margin 29:51 29 minutes, 51 seconds in FA27. We have we we are comfortable in maintaining that. Yeah. 29:58 29 minutes, 58 seconds So my last question uh you know this is just a uh not a very framed question but kind of uh uh it is going to give us 30:06 30 minutes, 6 seconds some uh visibility on the growth trajectory of uh Loris in CDMO business. 30:12 30 minutes, 12 seconds So when would the Loris identified as a CDMO company and not as a uh you know all categories company kind of 30:22 30 minutes, 22 seconds I I think you have to say what is the revenue coming from studio segment 30:28 30 minutes, 28 seconds determines how much exposure is to CDM rather than uh see we are at more 30:37 30 minutes, 37 seconds onethird of revenue comes to CD moiness butizable 2 There are not many companies with 2,000 30:43 30 minutes, 43 seconds cr revenues which they which they are well recognized CDMO partner companies. 30:49 30 minutes, 49 seconds So it is up to see the how much reactor capacity, how much R&D capacity, how many programs, what is the size of the 30:57 30 minutes, 57 seconds program. Earlier people used to ask us how many clinical programs you have. Say clinical programs may confuse everyone. 31:06 31 minutes, 6 seconds One program may give $500,000, one program may give $50 million. So giving a number of programs may not give you 31:12 31 minutes, 12 seconds any perspective. The question is what is L strategic partner or tactical partner to customers. So we are a strategic partner for many big farmer right now. 31:23 31 minutes, 23 seconds So we have a flow of RFP commercial early stage mid-stage late stage commercial. So we have a robust pipeline 31:32 31 minutes, 32 seconds that much we can tell you. It is up to uh the market to gauge how much revenue and who is doing well in CDM. 31:41 31 minutes, 41 seconds No right sir I I obviously I'm with you in sense that we are big bigger than quite of quite a few few companies in 31:48 31 minutes, 48 seconds the CDM space but when we compare ourselves with ourselves what would be that year inflection point 31:57 31 minutes, 57 seconds um one good thing we are happy we are doing 32:05 32 minutes, 5 seconds most of our clinical programs are APIs so we are not We're not doing RSM or early stage inter 32:14 32 minutes, 14 seconds either we do advanced intermedates or APIs. So that way the the sustainability of our customers and our offerings is 32:23 32 minutes, 23 seconds much more longer than uh offering very early stage intermediates or KS. 32:31 32 minutes, 31 seconds This was very helpful sir. Thank you so much and all the best. Thank you. Thank you. 32:36 32 minutes, 36 seconds The next question comes from the line of Abijit, an individual investor. Please go ahead. 32:45 32 minutes, 45 seconds Hey, am I audible? Yeah. Yeah. 32:49 32 minutes, 49 seconds Yeah. Uh my first question is what is the asset turnover currently? 32:55 32 minutes, 55 seconds Rabi asset turnover 89.9. 33:01 33 minutes, 1 second Okay. Um so considering this uh growth for the year I think overall uh CDMO 33:08 33 minutes, 8 seconds business has grown 20%. And it's reached a good base at the moment. What is the territory going forward? Can we expect 33:15 33 minutes, 15 seconds this growth to growth momentum to maintain or do you see some sort of lumpiness or not? Because as another 33:23 33 minutes, 23 seconds analyst mentioned, there are other CMO companies which are talking about these stocking and couple of variations in u 33:30 33 minutes, 30 seconds funding for uh um alternative medicines from you know uh so keeping that in mind 33:38 33 minutes, 38 seconds you'll see lumpiness in the earnings um in if you compare year to year we expect a good growth in CDMO segment 33:47 33 minutes, 47 seconds there could be lumpiness quarter and quarter but we don't expect uh any challenges is for us to record growth in FA27. 33:56 33 minutes, 56 seconds Okay. And I think uh Mr. Ravi Kumar mentioned that your EITA margins have gone up because of uh operational 34:03 34 minutes, 3 seconds changes in the input costs and other stuff uh softening right but uh I have two questions on this regard. Now 34:10 34 minutes, 10 seconds because of the geopolitical situation etc. Do you see any challenges in the next uh few months going forward and uh 34:19 34 minutes, 19 seconds operating uh you know cost to go up because of the wrong prices etc. 34:26 34 minutes, 26 seconds in quarter 4 of FA 26 um some impact was there because of the solvent price 34:34 34 minutes, 34 seconds increase we will see some but I can tell you our production hasn't been impacted 34:42 34 minutes, 42 seconds so far and we have enough visibility that in the next 3 months we don't have any challenges of cartailing of production because of higher prices of 34:50 34 minutes, 50 seconds solvents or the availability of solvents uh there will be some pressure but as our mix is going operational is going up 34:59 34 minutes, 59 seconds more capacity utilization uh we will able to weather that challenge well yeah 35:06 35 minutes, 6 seconds okay so with regards to this gross margins going up the gross margins right now is 61.4%. 35:13 35 minutes, 13 seconds So if the as and when the CDMO contribution of the business goes up, can we expect this to go substantially higher? I think this is the highest 35:20 35 minutes, 20 seconds gross margin since the oneoff CDMO contract that happened in 21. Am I correct? 35:27 35 minutes, 27 seconds T we are very comfortable say we'll maintain gross margin for sure. Yeah. 35:33 35 minutes, 33 seconds In spite of uh challenges on this album P and all we are confident. 35:40 35 minutes, 40 seconds Okay, that's good to know. And one last question with regards to the peptides opportunity that is available. Are you guys looking at the weight loss sector 35:47 35 minutes, 47 seconds or are you looking at overall peptide revolution that is going around and is it like um is it is it like the 35:56 35 minutes, 56 seconds breakthrough is near-term or is it like still uh substantially time away or etc. Just an insight please. 36:03 36 minutes, 3 seconds Krishna you want to answer? Yeah, we have a uh to diving into too much details, we are in currently working in several 36:12 36 minutes, 12 seconds sectors in uh peptides including weight loss and a few other sectors. Um with that being said, there are some 36:21 36 minutes, 21 seconds medium-term opportunities that we are already collaborating on and of course there's several other opportunities that we are also in uh um active discussions 36:30 36 minutes, 30 seconds with. uh but uh as soon as we have something meaningful coming out of that investment uh we will certainly make our uh partners aware of. Yeah. 36:40 36 minutes, 40 seconds Okay. Thank you so much. Uh congratulations on the great set of numbers. Thank you. 36:46 36 minutes, 46 seconds Thank you. The next question comes from the line of Tushar Manuhani from Motil Financial Services. Please go ahead. 36:55 36 minutes, 55 seconds Thanks for the opportunity. Am I audible? Yes sir. 37:00 37 minutes So just on firstly is uh if you could give the break up of ARV business into uh API and formulations please. 37:10 37 minutes, 10 seconds uh um it is uh 23 1/3 2/3 the API 1/3 is roughly formulations we are not giving 37:18 37 minutes, 18 seconds exact but it is broadly that 23 1/3 yeah okay 37:26 37 minutes, 26 seconds uh so effectively um just trying to understand the nonv formulation business has that grown or declined for the 37:34 37 minutes, 34 seconds quarter um actually non RV formulations is going up is going up. 37:42 37 minutes, 42 seconds Yes. Yes. 37:48 37 minutes, 48 seconds Um the growth number if you so if correct me if I'm wrong um so 683 kores of ARV 37:55 37 minutes, 55 seconds business for fourth quarter 26 effectively and you're saying 2/3 is uh formulation which means 450 kores of 38:03 38 minutes, 3 seconds formulation business is that the way to understand? No two3 is API one third is formulations 38:10 38 minutes, 10 seconds my my answer was for the overall year I mentioned so it is around that number it 38:17 38 minutes, 17 seconds may change one month one quarter but broadly 2/3 of a revenue comes from APL one third comes from our our own farm 38:25 38 minutes, 25 seconds sales got and uh uh on the balance sheet side how much would be the customer advances 38:32 38 minutes, 32 seconds at the end of F26 uh we not disclose specifically. 38:40 38 minutes, 40 seconds Well uh has that increased compared to last year directly if you could while the annual report will disclose that much but on full year basis there is an increase. 38:53 38 minutes, 53 seconds Okay and yeah that's it for my thanks. 39:00 39 minutes Thank you. Thank you. 39:02 39 minutes, 2 seconds Thank you. The next question comes from the line of J1 Pawa from Sahasra Capital. Please go ahead. 39:10 39 minutes, 10 seconds Yeah, thank you sir. So uh congratulation first. Uh one question on the CDMO side. So was there any revenue from the crop sense uh business uh in FI26? 39:21 39 minutes, 21 seconds Krishna. 39:22 39 minutes, 22 seconds Um there has been um some but very marginal I would say there has been some. 39:29 39 minutes, 29 seconds Okay. and animal health is still uh I would say in a not too meaningful yet in 39:35 39 minutes, 35 seconds the CDMO or it is not now it is meaningful. So basically the the the 39:42 39 minutes, 42 seconds context is FY27 can we see meaningful contributions from uh crop science and animal health both 39:50 39 minutes, 50 seconds in um in the ambulance space uh within this year as well we've had some meaningful API shipments that we had 39:58 39 minutes, 58 seconds undertaken and uh in FA27 also we'll see a good contribution from that uh space 40:06 40 minutes, 6 seconds but in the crop science segment I think we need a couple more financial years to really uh ramp that up. Uh but we have a 40:14 40 minutes, 14 seconds few ongoing projects that are in the registration phase or in the development phase. So yes. Yeah. 40:21 40 minutes, 21 seconds Okay. And on the uh electronic side uh one customer that we have so I think uh as I understand is still in the 40:29 40 minutes, 29 seconds development stage uh but they have got the breakthrough some months back. So any visibility on uh you know the kind 40:37 40 minutes, 37 seconds of shipment or the delivery from their side any contract uh have you signed with them? 40:43 40 minutes, 43 seconds Um we are in active discussions with them but u as you rightly said it's still under development phase um and 40:51 40 minutes, 51 seconds application phase. So it's uh it'll take uh a few more quarters for us to see the actual demand outlook from them. 41:00 41 minutes Perfect. And on the formulation side uh one question on the formulation side. So this uh the facility new facility that's 41:08 41 minutes, 8 seconds coming up uh and going commission in June. So uh that's for the new CMO contract right that we have the 3 billion tablet uh contract. 41:19 41 minutes, 19 seconds Yeah that's for an existing partner. U most of the capacity came online and we are using it commercially that additional capacity. 41:28 41 minutes, 28 seconds Uh so uh after we have the tertiary packaging capacity will be coming in June right 41:38 41 minutes, 38 seconds most of the proposed capex has been implemented and then uh we started generating a revenue out of it in the back end of the year. 41:48 41 minutes, 48 seconds Okay. Okay. So basically the uh majority revenue will start from Q1. Yes. 41:55 41 minutes, 55 seconds Okay. Okay. Perfect. Thanks a lot. 42:00 42 minutes Thank you. The next question comes from the line of Wenut Valley, an individual investor. Please go ahead. 42:08 42 minutes, 8 seconds Okay. Thank you. Uh good evening sir. My question is related to uh fermentation capacity given that we have acquired 42:16 42 minutes, 16 seconds richcore in 2021. Why are why are we not able to I mean uh scale it up to 2 million. And if you are able to scale it 42:24 42 minutes, 24 seconds up to 2 million, what would be the revenue? 42:30 42 minutes, 30 seconds Uh see we thought we'll uh expand to 2 million but we are doing in a phase 42:38 42 minutes, 38 seconds manner. We have 250,000 liters right now. By end of this year another 400,000 42:45 42 minutes, 45 seconds lit will come and that facility can accommodate another 600,000. Overall we're inching towards the number. Um see 42:54 42 minutes, 54 seconds if you look at when we acquired them in 21 majority stake their revenues were about 50 crores. Okay. 43:01 43 minutes, 1 second Now yeah now they have gone significantly we are closer 185 180 cr revenue with 35 40 critera 43:11 43 minutes, 11 seconds levels now. So then significant improvement happened but creating capacity takes it own time. See R1 to R2 it took one year. R2 to R4 it took two 43:20 43 minutes, 20 seconds years for us to create that capacity. So we we are um gauging the market dynamics there and we have interesting projects. 43:30 43 minutes, 30 seconds I think we'll update you as and when we have a significant information on that. Okay. Thank you. One one more question. 43:36 43 minutes, 36 seconds It's related to Amplia therapeutics. I'm not sure if you're aware that they stop this amplicity uh project. Are we like supplying any API to the project? 43:50 43 minutes, 50 seconds Um any customer related topics we don't necessarily want to comment from our end. So sorry I unfortunately because of 43:58 43 minutes, 58 seconds confidentiality terms we are not able to comment. Okay. Thank you. Thank you sir. All the best. Thank you. 44:06 44 minutes, 6 seconds The next question comes from the line of Vhan Bri from Omayio Advisers. Please go ahead. 44:13 44 minutes, 13 seconds Yeah. Uh thank you for the opportunity. 44:16 44 minutes, 16 seconds Vihan, I'm sorry to interrupt. You're not quite audible. Okay. Am I audible now? 44:24 44 minutes, 24 seconds Better. Yeah. So I actually had a few questions. The first one being what will be the capex and gross debt outlook for 44:32 44 minutes, 32 seconds FI 27 and 28? As uh we had indicated earlier a,000 cr capital and what can be 44:40 44 minutes, 40 seconds the effective tax rate considered for the uh effective tax rate will be around 25% 44:49 44 minutes, 49 seconds 25 to 26% depends on the uh standalone is definitely 25%. Uh then uh capex 44:58 44 minutes, 58 seconds guidance is around 3,000 crores uh in 2 years time. So we although we said 1 45:06 45 minutes, 6 seconds th00and cr earlier now depending on the prospects what we need capacity and what projects in in front 45:14 45 minutes, 14 seconds of us we have increasing our capex uh spend there and we expect to spend uh around 3,000 crores in the next two years. 45:23 45 minutes, 23 seconds Okay. And uh regarding the gross debt outlook for the next two years, gross 45:31 45 minutes, 31 seconds uh the gross debt outlook now debt uh uh maybe it may slightly go up in the 45:39 45 minutes, 39 seconds current year FI27 uh but the debt by a bit should come maybe maintain at the similar levels or maybe softening from the current level. 45:51 45 minutes, 51 seconds Okay, thank you so much sir. Thank you. 45:56 45 minutes, 56 seconds The next question comes from the line of Vive Agarwal from City Group. Please go ahead. 46:03 46 minutes, 3 seconds Uh thanks for the opportunity. One question on affordable medicine. It's a generic businesses all put together. 46:10 46 minutes, 10 seconds This year you have done well with around 18% kind of growth. Just want to understand uh what's your outlook let's say for 27 and 28. uh what kind of the 46:18 46 minutes, 18 seconds growth that you are looking up uh in this particular segment. Thank you. 46:24 46 minutes, 24 seconds Uh so for the next year also we have our order book pretty much in place. So uh 46:31 46 minutes, 31 seconds we will continue to uh um reflect a strong growth in the next year as well. 46:39 46 minutes, 39 seconds So grow in terms of is it possible to uh say that it can grow in the double digit as well in the next year or it's like a 46:46 46 minutes, 46 seconds single digit v you know we don't want to give any quantity definitely grow but we will not be able to comment on the percentage over here. 46:59 46 minutes, 59 seconds Perfect no problem at all. So in CDMO uh say the pipeline looks uh it's just shaping up well. So is it possible for 47:06 47 minutes, 6 seconds you to just uh uh help us understand uh uh how the pipeline of products which are in the advanced stage and the stage 47:14 47 minutes, 14 seconds three etc. So that is looking like at this point of time or else uh and uh secondly in FI27 are you expecting any 47:23 47 minutes, 23 seconds new product that is getting commercialized by your partners? Thank you. 47:28 47 minutes, 28 seconds So while we're not giving concrete numbers on different phase wise split, we have several exciting programs that are late phase uh programs. 47:40 47 minutes, 40 seconds Um as I mentioned given the clinical nature of these programs, it's uh 47:47 47 minutes, 47 seconds difficult to predict uh when and how it it will be um you know commercialized. 47:54 47 minutes, 54 seconds uh but uh within the visibility that we have uh we expect some of the programs that we're working on um to get 48:02 48 minutes, 2 seconds commercialized and um and and some of the projections that we've had for volumes from our partners have been along those lines. Yeah. 48:13 48 minutes, 13 seconds Uh perfect. And just one last question on the CDMO right out of around the 1900 cr of revenue. So are you comfortable 48:20 48 minutes, 20 seconds sharing uh the share of revenue that is coming from the projects which are still in the development or the share of revenue that is coming for the products 48:27 48 minutes, 27 seconds uh which are commercialized by your customers. We we are not disclosing. 48:33 48 minutes, 33 seconds No problem. Thank you. Thanks so much. 48:38 48 minutes, 38 seconds Thank you. The next question comes from the line of forum Parik from Bob Capital Markets. Please go ahead. 48:47 48 minutes, 47 seconds Thank you for the opportunity. Um uh could you please disclose or uh highlight on the peptide capacity the 48:55 48 minutes, 55 seconds dedicated peptide capacity and what would be the capeex allotted for the peptides? 49:04 49 minutes, 4 seconds I think um see we are building a large capacity for 49:10 49 minutes, 10 seconds peptides uh uh and we have several programs as Krishna mentioned but we uh we don't want to comment on how many 49:19 49 minutes, 19 seconds tons capacity we're creating or how many projects we have right now we we don't want to comment at this juncture 49:26 49 minutes, 26 seconds okay and uh would you be comfortable disclosing the kex dedicated towards the peptide uh program. 49:35 49 minutes, 35 seconds I I can only say it is not capex. I don't want to give a specific number. 49:42 49 minutes, 42 seconds Okay. Uh my second question is on the CDMO side. Um in the previous corn calls 49:48 49 minutes, 48 seconds you had um alluded that you and we saw CDMO contribution going towards 50% of 49:55 49 minutes, 55 seconds the total sales. So as per your internal assessment um and now that the CBMO PI is growing well and we have strong order 50:04 50 minutes, 4 seconds book so how soon do you see as for the internal assessment 50% number being achievable 50:11 50 minutes, 11 seconds see uh we said two things one is we'll go to 50% we also said by 2030 yeah 50:19 50 minutes, 19 seconds oh okay uh okay and last question if I may uh now that we have increased a 50:27 50 minutes, 27 seconds capeex from uh 1,000 crores annually to500 crores annually. So how do you see 50:33 50 minutes, 33 seconds the return ratios shaping out? Uh and um do we still expect operational leverage uh with increase in capeex? 50:44 50 minutes, 44 seconds Um most of the capex what we're doing is growth capex. See we are not at least now we have visibility. We are not 50:52 50 minutes, 52 seconds putting capex and hoping customer will come and give projects. We are not doing that. So mostly we have visibility which product, which customer, how much we're 51:00 51 minutes going to make in this new capacity which will come online. 51:04 51 minutes, 4 seconds Sure. And uh just last question uh could you please talk on this uh ARB to non ARV split for FY27? Right now it's 40%. 51:14 51 minutes, 14 seconds So do you still see non ARV or ARV PI shrinking from this 40%. 51:20 51 minutes, 20 seconds or it will remain at 40% around quantum wise we did 2800 crV that will 51:27 51 minutes, 27 seconds remain constant uh it will be inner number around that number but percentages it will go down it will go down yeah 51:35 51 minutes, 35 seconds sure thank you thank you lord yeah thank thank you the next question comes from the line of Rahul Bardaj and individual investor 51:44 51 minutes, 44 seconds please go ahead thank you so much for the opportunity community. Uh Dr. Satya, if we go back 51:53 51 minutes, 53 seconds about five six years, you know, the split of the revenue mix was more 52:00 52 minutes inclined towards ARV and then, you know, over the last couple of years, we've increased our footprint on the CDMO business. Can you throw some colors on 52:09 52 minutes, 9 seconds how do you foresee the mix will be if we look out next 5 to 10 years? That will 52:17 52 minutes, 17 seconds be my first question and my second question will be at some point uh you know you you may 52:25 52 minutes, 25 seconds pass on the reigns to someone else. Do you have a a wish list where you would like to see Loris you know before you 52:34 52 minutes, 34 seconds decide to uh hand over the range to someone else? So that will be my two questions. Thank you again. 52:41 52 minutes, 41 seconds I will be able to answer your first question easily. Uh the first question is see our me as you mentioned our 52:49 52 minutes, 49 seconds absolute quantum wise air revenues are very um I would say around 2500 plus now 52:56 52 minutes, 56 seconds I would say 25 plus 300 because we did 2800 goes this time after 26 um by after 53:04 53 minutes, 4 seconds 30 we expect CDM revenues in general will be um 50% 53:12 53 minutes, 12 seconds of our overall sales Um and uh the ARV percentage will come down significantly. Yeah. While the ARV 53:20 53 minutes, 20 seconds sales remain constant but percentage contribution will come down significantly. Yeah. 53:26 53 minutes, 26 seconds And the second question is see right now see the LS is engaged in um lot of 53:35 53 minutes, 35 seconds modalities in small molecule our focus is large volume generic APIs integrated 53:41 53 minutes, 41 seconds CMO opportunities and doing um CDMO for clinical programs in u human health and 53:48 53 minutes, 48 seconds admin health and also working with discovery based companies in car crop science. 53:55 53 minutes, 55 seconds not not generic crop change molecules that's the focus when it comes to biology as I mentioned to Mr. Sajil 54:03 54 minutes, 3 seconds Kapoor Kusen also. So we have investments made in cell culture, precision fermentation, enzymes, 54:11 54 minutes, 11 seconds biocatalysis, cell therapy, gene therapy, ADCs and all. So our investments are in multiple lines and that's where my focus is 54:21 54 minutes, 21 seconds currently and the rest of the businesses are handled by Krishna, Sonia and other team members. So my focus is going on new modalities right now. 54:34 54 minutes, 34 seconds Thank you so much and wishing you very good luck for the future. Thank you again. Bye. 54:41 54 minutes, 41 seconds Thank you. The next question comes from the line of Bhat Siri Porapu from Quest for Value Capital. Please go ahead. 54:50 54 minutes, 50 seconds Yeah, thanks for the followup. Uh Dr. 54:52 54 minutes, 52 seconds Chava, regarding this new green field capex of 500 acres in Akapuram, may know when can we expect this new green field capex coming online? 55:01 55 minutes, 1 second the first phase. We able to give you more color on that maybe in the next quarter bar. Yeah. 55:10 55 minutes, 10 seconds Okay. Yeah. Thank you. 55:14 55 minutes, 14 seconds Thank you. The next question comes from the line of Sajal Kapoor from Antifragile Thinking. Please go ahead. 55:22 55 minutes, 22 seconds Yeah. Hi, thanks for the followup. Um Dr. Satya, many many CDMOs do well at micro or pilot scale. uh but failed to 55:31 55 minutes, 31 seconds manufacture a multi-tonon batch with consistency. So the key word here is consistency. In that context, for the 55:39 55 minutes, 39 seconds recent CDMO programs that successfully moved from lab or pilot to commercial scale, uh what percentage uh met target 55:48 55 minutes, 48 seconds yield and quality spec in the first three commercial batches and how 55:55 55 minutes, 55 seconds predictable is the scaleup process um we have today you know going from few kilos 56:02 56 minutes, 2 seconds to 500 kilos and more depending on the molecule of course. 56:07 56 minutes, 7 seconds Why Lis is investing in large capacities well in advance of commercial launches. 56:14 56 minutes, 14 seconds Nowadays big pharma wants the uh validation uh engineering batches at the 56:21 56 minutes, 21 seconds commercial scale. They don't want to have any uncertainties of scale up or moving from one plant to another plant 56:28 56 minutes, 28 seconds for lack of capacities. So all the commercializations what we have done in the last 2 years 56:35 56 minutes, 35 seconds were uh scaled up. Validation is done at the same scale. Validation done in the same line of equipments. Uh so there are 56:43 56 minutes, 43 seconds no surprises. So when we did validation we do the same train equipment train for commercialization same batch size same 56:51 56 minutes, 51 seconds facility and all. So we we have fortunately we haven't had any challenges so far. 56:58 56 minutes, 58 seconds Perfect. Perfect. Thank you so much for that clarification. Thank you. 57:03 57 minutes, 3 seconds Thank you. The next question comes from the line of Yash Loti, an individual investor. Please go ahead. 57:12 57 minutes, 12 seconds Hello. Uh good evening everyone. My question is the revenues from Lorden Collaboration when will they start kicking? 57:22 57 minutes, 22 seconds Yeah, this is um um again related to the OLED um opportunity that I talked about 57:30 57 minutes, 30 seconds in the Q&A session. Um we'll be able to um concretely comment on this in a 57:37 57 minutes, 37 seconds couple of quarters, but at this moment in time, uh uh it's difficult to you know put a finger on the actual numbers. 57:46 57 minutes, 46 seconds Okay. All right. Thank you. 57:50 57 minutes, 50 seconds Thank you. The next question comes from the line of Venet and individual investor. Please go ahead. 57:59 57 minutes, 59 seconds Uh hi sir, thank you for the opportunity. I have one question. Um I 58:05 58 minutes, 5 seconds don't have complete understanding on the uh pharma part of it. My question was 58:13 58 minutes, 13 seconds AI with AI it is disrupting multiple industries. I want to understand 58:19 58 minutes, 19 seconds in the discovery phase or do you see any challenges in how discovery is getting 58:27 58 minutes, 27 seconds evolved with uh how is discovery fair is getting impacted because of a do you see any challenges in that front? 58:36 58 minutes, 36 seconds Um so u at a at a at a high level um loris within the CDMO space we are not 58:44 58 minutes, 44 seconds involved in the discovery side of things for any partners. Um but in in speaking from a general standpoint uh there's 58:53 58 minutes, 53 seconds certainly a lot of AI being leveraged in the discovery space. Uh the so what of that is uh some of the discovery um 59:01 59 minutes, 1 second molecules the pipeline generation is significantly faster. uh but also uh interestingly given that these molecules 59:10 59 minutes, 10 seconds are designed by AI they tend to be also more complex in terms of structures or 59:17 59 minutes, 17 seconds the synthesis itself right um so yes there's certainly AI being leveraged globally but uh given that we are not in 59:24 59 minutes, 24 seconds the discovery space that's not something that uh we typically look at thank you and also uh thank you and also 59:34 59 minutes, 34 seconds do you see any disrup ceptions in the day-to-day standard operating uh process in general. Do you see any other 59:43 59 minutes, 43 seconds companies leveraging it differently or something? I want to understand the application in the industry itself not 59:49 59 minutes, 49 seconds may not be limited to law as a general standard process itself. 59:55 59 minutes, 55 seconds I mean we there are several you know at least what we are aware of there are several companies that are leveraging it 1:00:03 1 hour, 3 seconds um you know from especially in the discovery space um in designing molecules and predicting some of their 1:00:09 1 hour, 9 seconds profiles. Um yeah there's certainly quite a lot of interesting publication that also been put out there. Yeah this 1:00:17 1 hour, 17 seconds certainly being leveraged extensively across the industry. 1:00:27 1 hour, 27 seconds trying to answer your question. 1:00:30 1 hour, 30 seconds Yeah, I think as you are mostly in the manufacturing part of it, we don't see a risk. Can I put can I rephrase it this 1:00:39 1 hour, 39 seconds way or uh yes that that's correct to say our you know risk from AI or you know impact of it is minimal if any. 1:00:50 1 hour, 50 seconds Yeah. Got it. Thank you. 1:00:54 1 hour, 54 seconds Thank you. The next question comes from the line of Tushar Manu Dhane from Motilal Oswal Financial Services. Please go ahead. 1:01:03 1 hour, 1 minute, 3 seconds Yeah, thanks for the opportunity again. 1:01:05 1 hour, 1 minute, 5 seconds So on the non ARV formulation side, uh there has been decent growth for full year 26 compared to 25. So uh what kind 1:01:15 1 hour, 1 minute, 15 seconds of outlook can we expect for the coming year? uh the either of the new launches or the existing applications formulations. 1:01:27 1 hour, 1 minute, 27 seconds Uh so for the non ARV formulations uh we expect to see growth from existing products. Uh we will be utilizing the 1:01:36 1 hour, 1 minute, 36 seconds capacities to ramp up our formulation units. 1:01:43 1 hour, 1 minute, 43 seconds uh but did there was a sizable jump uh say in FI 26 compared to 25 so that momentum will sustain in 27 as well 1:01:53 1 hour, 1 minute, 53 seconds uh there is a momentum definitely compared to 26 to 27 as well 1:02:03 1 hour, 2 minutes, 3 seconds thank you ladies and gentlemen that was the last question for today I would now like to hand the conference over to the management for the closing remarks 1:02:12 1 hour, 2 minutes, 12 seconds thank you all stakeholders and for your insightful questions and the good evening everyone. 1:02:20 1 hour, 2 minutes, 20 seconds Thank you. 1:02:22 1 hour, 2 minutes, 22 seconds Thank you sir. Ladies and gentlemen, on behalf of Loris Labs that concludes this conference call. Thank you for joining us and you may now disconnect your lines.