Neuland Laboratories Limited — Q4 FY26

Neuland Laboratories Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=CV3IEOqAvyo Published: 1 day ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Newand Laboratories Limited Q4 FI26 earnings conference 0:08 8 seconds call. As a reminder, all participant lines will be in the listenon only mode and there will be an option for you to ask questions after the presentation 0:16 16 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing start and zero on the touchstone phone. Please 0:24 24 seconds note that this conference is being recorded. I now hand the conference over to Mr. Raviad Deshi from Ernst & Young. 0:31 31 seconds Thank you and over to you sir. Thank you Rotuja. Good evening friends. 0:37 37 seconds We welcome you to the Q4 and FY26 earnings conference call of Newand Laboratories Limited to take us through 0:45 45 seconds the results and to answer your questions. We have with us the top management from Newand Laboratories represented by Mr. Sahash Dawuri CEO and 0:54 54 seconds managing director, Mr. Mr. Abhijit Majunar, CFO and Mr. Sajji Emanuel Mediconda, head of corporate planning 1:02 1 minute, 2 seconds and strategy. We will start the call with a brief overview of the financials by Mr. Abhijit Majuna and then Sahush 1:09 1 minute, 9 seconds will give you the broad highlights of the business trends and what he is seeing in the markets and post that we will open the call for the question and 1:17 1 minute, 17 seconds answer session. As usual the standard safe harbor clause applies as we start the call. With that said, I now hand 1:25 1 minute, 25 seconds over the floor to Abijit. Over to you, Abijit sir. 1:29 1 minute, 29 seconds Uh thank you Rabi. Um a very good evening and a warm welcome to everybody uh joining our call. I will take you 1:37 1 minute, 37 seconds through our financial performance for the quarter and the year and that and then share comments on cash flows, working capital, uh capex and the 1:46 1 minute, 46 seconds actions we are taking to strengthen financial discipline through cost and process improvements. 1:53 1 minute, 53 seconds As we have highlighted in our previous calls, given the nature of our business, uh quarterly performance can be uneven and it is best to well the business over 2:02 2 minutes, 2 seconds longer periods. Um with that uh context, let me start with the numbers for 2:08 2 minutes, 8 seconds quarter 4. Total income was 788.7 crores up uh 134.9% 2:15 2 minutes, 15 seconds versus 335.8 crores in the same period last year. 2:20 2 minutes, 20 seconds commercial uh CMS budget drove the growth with CMS contributing uh over twothirds of revenue this quarter. Gross 2:29 2 minutes, 29 seconds margin was 62.1% versus 56.3% in quarter 4 525 driven largely by the business mix. 2:39 2 minutes, 39 seconds We also managed a higher freight cost towards the end of the quarter due to the conflict while ensuring continuity of supply to our customers. 2:50 2 minutes, 50 seconds As always, gross margin includes manufacturing expenses and other costs directly attributed to the product. 2:58 2 minutes, 58 seconds Uh EITA stood at 319.4 crores and a margin of 40 plus%. 3:04 3 minutes, 4 seconds This exceptional operating margins reflects uh the record high revenue this quarter. Uh and it is also partly 3:13 3 minutes, 13 seconds because of a function of the uneven nature of our revenue flows and and should not be seen as an indicator of our future performance. 3:23 3 minutes, 23 seconds profit profit after tax was 212.5 crores versus 27.7 crores in quarter 4 FI25 3:31 3 minutes, 31 seconds and our EPS uh stands at 165.6 per share for the full year of FI26 revenue was 3:40 3 minutes, 40 seconds 2053.1 cr versus 1497.3 crores with growth of 37 plus% 3:49 3 minutes, 49 seconds was 603.4 crores versus 342.8 and 88 grows in FI25 3:56 3 minutes, 56 seconds with full year margin at 29.4% compared to 22.9% last year. Profit 4:03 4 minutes, 3 seconds after tax for the full year was 363.1 cr 4:10 4 minutes, 10 seconds EPS stats at 283.01 rupees per share. Let me now move to cash flows and working capital which are key focus areas for us. 4:22 4 minutes, 22 seconds For the financial FI26, the pre-cash flow was negative at 49.4 crores driven 4:30 4 minutes, 30 seconds primarily by higher working capital during the year along with increased uh capital uh cash flow outflows capital uh cash outflows. 4:41 4 minutes, 41 seconds Uh capex cash outflow for FI26 was 397.1 cr. Financing activity was 21 cr 4:48 4 minutes, 48 seconds including a net increase in lockdown borrowings of 60.9 cr. 4:53 4 minutes, 53 seconds Closing cash balance of the 526 was 75.4 crores as compared to 130.4 crores at 5:00 5 minutes the end of the year. Working capital days stood at 137 uh days in quarter 4 5:07 5 minutes, 7 seconds versus 107 uh days in quarter 425. 5:13 5 minutes, 13 seconds mainly driven by higher in inventories and receivables and we believe that this should normalize in a 527 5:21 5 minutes, 21 seconds net debt remains negative at 157 crores supported by cash balances of 353 crores 5:30 5 minutes, 30 seconds and our long-term borrowings at the end of quarter 4 was 197 crores. Our approach to capex remains disciplined 5:39 5 minutes, 39 seconds based aligned with our strategic priorities and executed with a clear focus and returns and long-term capability building. 5:49 5 minutes, 49 seconds In terms of our priority in our priority is to ensure that approved capital translates into clear execution milestones and business outcomes. 5:58 5 minutes, 58 seconds Overall, we continue to maintain a strong financial position. 6:02 6 minutes, 2 seconds The balance sheet remains resilient with comfortable liquidity and we remain focused on preserving flexibility to 6:10 6 minutes, 10 seconds support both uh growth uh investments and and and have operational resilience. 6:17 6 minutes, 17 seconds At the same time, we sharply focused on improving our cash conversion. 6:22 6 minutes, 22 seconds Working capital discipline remains a management priority and we continue to take actions uh to kind of work on our 6:32 6 minutes, 32 seconds collection inventory normalization and tighter controls so that our profitably translate into into cash flows more 6:39 6 minutes, 39 seconds consistently. Another related focus area is cost is cost and process improvements which we see as a structural enabler for 6:48 6 minutes, 48 seconds sustainability sustainable profitability and strong stronger cash generation across the organization. We are progressing on initiatives to improve 6:57 6 minutes, 57 seconds productivity, reduce variability, strengthen our operating control and drive process standardization. 7:05 7 minutes, 5 seconds This obviously includes tighter cost governance, procurement, efficiency, actions and operating discipline across functions aimed at protecting margin, 7:14 7 minutes, 14 seconds improving our predictability and building a scal scalable operating model as the business grows. 7:21 7 minutes, 21 seconds Now given the recent developments in the Middle East, we are closely tracking raw material coverage and price volatility volatility and are taking actions to 7:30 7 minutes, 30 seconds protect our continuity of supplies and manage the cost pressures. 7:34 7 minutes, 34 seconds As in the past, the presentation shared along with the press release contains additional details. With that, I would 7:42 7 minutes, 42 seconds like to hand over the court sah for his remarks. Thank you. 7:48 7 minutes, 48 seconds Thank you uh Abijit and good evening to everyone on the call. The numbers are out there and Aijit has taken uh you through them in detail. 7:59 7 minutes, 59 seconds uh what I would like to do is uh spend a few minutes on talking about what's not explicitly in these numbers but is very 8:07 8 minutes, 7 seconds important for uh all of our investors to understand. 8:12 8 minutes, 12 seconds While we have uh not given formal guidance in the past and we do not intend to do so uh going forward, we did 8:20 8 minutes, 20 seconds indicate uh earlier that FI26 would be a year of strong growth when viewed 8:27 8 minutes, 27 seconds against FI24 especially since FI25 uh represented a period of slight degrowth. 8:36 8 minutes, 36 seconds With the strong performance delivered in Q4, I'm glad to note that this outlook was accurate, 8:43 8 minutes, 43 seconds we have uh achieved the kind of performance that we anticipated at the beginning of the year. In fact, slightly 8:50 8 minutes, 50 seconds better than expected, aided by the favorable exchange rates. 8:55 8 minutes, 55 seconds As we look at Q4 and FI26 through this more favorable lens, it's also important to recognize the inherent lumpiness of our business. 9:06 9 minutes, 6 seconds The same lumpiness that resulted in a record-breaking Q4, uh, if you recall, also made the previous quarter, which is Q3, a relatively muted quarter. 9:18 9 minutes, 18 seconds And it's worth stating the obvious. The lumpiness does not recognize financial year boundaries, right? It doesn't 9:26 9 minutes, 26 seconds recognize or it doesn't care about March 31st. So even sometimes a full year may not turn out to be exactly as expected. 9:34 9 minutes, 34 seconds Although in this case we did have a a strong year as expected and this does not distract and whatever happens uh 9:43 9 minutes, 43 seconds even at a year level what uh I would like to point out is that it should not detract from the long-term growth 9:51 9 minutes, 51 seconds prosperity and resilience of the business. In the short to medium term our business visibility continues to be 9:59 9 minutes, 59 seconds anchored by commercial and near commercial molecules. This gives us a strong degree of confidence over the 10:06 10 minutes, 6 seconds next few years. Alongside this, while our GDS business was softer in FI26, we 10:13 10 minutes, 13 seconds see good growth potential ahead and have deployed substantial resources across development, customer engagement, and 10:20 10 minutes, 20 seconds capability building to support the growth in the short, medium, and long term. Our focus on execution, 10:26 10 minutes, 26 seconds discipline, customer satisfaction and protection of business fundamentals is central to ensuring that this phase of 10:34 10 minutes, 34 seconds growth is delivered with minimal disruption despite the inherent variability in quarterly performance. 10:42 10 minutes, 42 seconds Beyond this, long-term growth requires an enterprising vision, a decisive strategy, and careful capital 10:49 10 minutes, 49 seconds allocation. Much of the work we are doing today is foundational in nature strengthening capabilities, scale and 10:56 10 minutes, 56 seconds technical depth so that we are well positioned to attract the right opportunities over time. The outlook for 11:03 11 minutes, 3 seconds the coming years remains promising. Over the next two to three years, we have visible growth driven by our existing 11:11 11 minutes, 11 seconds pipeline. At the same time, we are laying the groundwork for growth beyond this horizon. A key element of this is 11:19 11 minutes, 19 seconds our investment in large scale peptide commercial facilities. This will help us move into a more differentiated space 11:26 11 minutes, 26 seconds focused not only on peptide fragments but also on peptide APIs thereby 11:33 11 minutes, 33 seconds expanding both the scope and quality of the opportunities we can pursue. 11:39 11 minutes, 39 seconds Alongside manufacturing R&D remains a critical pillar of our long-term strategy. The new R&D center will be an 11:48 11 minutes, 48 seconds important step up in our ability to support complex programs across development stages. It will strengthen 11:56 11 minutes, 56 seconds our scientific depth, enhance cross functional collaboration and improve our ability to scale customer programs from 12:04 12 minutes, 4 seconds early development through commercialization. 12:08 12 minutes, 8 seconds The investment is not just about capacity addition. It is about building the kind of technical and problem solving capability that will allow us to 12:17 12 minutes, 17 seconds engage earlier and more meaningfully with our customers and support larger, more complex programs. On the business 12:25 12 minutes, 25 seconds development front, our efforts over the last year have been focused on improving both the quality and maturity of opportunities 12:33 12 minutes, 33 seconds entering our pipeline. We continue to see encouraging traction across customer segments including increasing customer 12:41 12 minutes, 41 seconds engagement on larger uh and more complex programs. While conversion timelines in our industry 12:49 12 minutes, 49 seconds remain long and nonlinear, the nature of discussions we are having today align well with the capabilities we are consciously building across R&D, 12:57 12 minutes, 57 seconds manufacturing and project execution. The objective is clear to prioritize opportunities that offer sustainable 13:05 13 minutes, 5 seconds highquality growth even if that means being selective and patient in the near term. As we experienced in FI26, growth 13:14 13 minutes, 14 seconds over the next two to three years is also expected to remain lumpy. Not every quarter will necessarily show progression. However, if performance is 13:23 13 minutes, 23 seconds assessed over a longer horizon, say 10 to 12 quarters, a clear trend line should emerge consistent with the growth outlook that we have always outlined. 13:34 13 minutes, 34 seconds On the margins and returns, FI26 benefited from favorable exchange rate movements. While our ROC remains 13:42 13 minutes, 42 seconds healthy, it is expected to moderate as we enter longer capital deployment cycles. We are comfortable with this as 13:50 13 minutes, 50 seconds long as these investments strengthen our long-term growth engine and competitive positioning. Today, the focus and in 13:58 13 minutes, 58 seconds some respects the key constraint of the business is twofold. First, building an execution engine that can continue to 14:07 14 minutes, 7 seconds perform reliably at scale. And second, ensuring that we bring the right kind of projects that support highquality 14:14 14 minutes, 14 seconds sustainable growth. Over the last year, in addition to strengthening our key account management structure, we have 14:21 14 minutes, 21 seconds also put in place dedicated resources to support larger projects across key operating functions. This enhances our 14:28 14 minutes, 28 seconds ability to serve existing large customers effectively while also building capability in anticipation of 14:35 14 minutes, 35 seconds similar projects in the future, including deeper engagement with big farmer. Before I close, it is important 14:42 14 minutes, 42 seconds to briefly acknowledge the risks and uncertainties inherent in our business. 14:47 14 minutes, 47 seconds Our industry continues to be exposed to factors such as demand variability, customer ordering patterns, regulatory 14:54 14 minutes, 54 seconds timelines, geopolitical development, and supply chain volatility. Given the nature of our business, revenue 15:01 15 minutes, 1 second realization can be uneven and the timing of project progress progression particularly for complex and longsight 15:08 15 minutes, 8 seconds programs can vary. Additionally, as we embark on larger and longer duration capital deployment cycles, execution discipline becomes even more critical. 15:19 15 minutes, 19 seconds Delays in customer programs, changes in development priorities or shifts in market dynamics can influence both short-term performance and capital 15:27 15 minutes, 27 seconds productivity. That said, our focus remains on building resilience through diversification of the pipeline, 15:35 15 minutes, 35 seconds strengthening operational execution, prudent capital allocation, and maintaining a strong balance sheet. 15:41 15 minutes, 41 seconds While these factors may create variability in the near term, we believe that they do not alter the fundamental long-term opportunity of the business. 15:50 15 minutes, 50 seconds To conclude, while individual quarters will continue to reflect variability, we remain confident the direction of the 15:57 15 minutes, 57 seconds business, the quality of our pipeline, and the foundations we are putting in place for long-term value creation. 16:05 16 minutes, 5 seconds Thank you for your continued trust and support. We'll now be happy to take your questions. 16:14 16 minutes, 14 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone 16:22 16 minutes, 22 seconds telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to limit their questions to 16:31 16 minutes, 31 seconds two per participant and also to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 16:50 16 minutes, 50 seconds The first question is from the line of Amed Chalk from JM Financial. Please go ahead. 16:55 16 minutes, 55 seconds Yeah, thank you uh for giving my opportunity and congrats to the management and the team uh for the great set of numbers. So first question uh 17:04 17 minutes, 4 seconds obvious question I have on the uh the performance of our CDMO business for the quarter. Um I agree with you that there 17:12 17 minutes, 12 seconds would have been uh a benefit of currency depreciation but it would be to the extent of 10 12% right uh still our 17:21 17 minutes, 21 seconds growth looks uh phenomenal over yearon-year basis. So what is driving this uh is it the existing commercial projects or have we added any new 17:30 17 minutes, 30 seconds product uh uh in the commercial side and was there any bunch of orders from the last quarter which would have also helped uh during the quarter. 17:41 17 minutes, 41 seconds Yeah. Um, thanks for the question. I think it's um, yes, I think currency definitely helps especially because we 17:48 17 minutes, 48 seconds had a strong Q4 and a lot of shipments happened um, you know, as the you know the rupee depreciated. So I think we we 17:57 17 minutes, 57 seconds did see uh a chunk coming in but yes uh I think uh, it doesn't really take away from the inherent growth we've seen in 18:04 18 minutes, 4 seconds the business. I think the contribution has come from the the the products we've been looking at in our pipeline. M I 18:12 18 minutes, 12 seconds think we had one new commercialization this year, but we've also had ramp up of volumes of previously commercialized 18:20 18 minutes, 20 seconds products. So those have largely driven uh the growth. Um we continue to have uh newer uh molecules enter our pipeline. 18:30 18 minutes, 30 seconds uh we're probably looking at one commercialization in FY27 uh and maybe you know one or two more later but these don't really come in at 18:40 18 minutes, 40 seconds a quantum that really changes the trajectory of the growth so so I think you know it's really the existing pipeline and the recently commercial 18:49 18 minutes, 49 seconds molecules and the volume growth in those which have driven uh this growth there's some volatility that volatility is you 18:57 18 minutes, 57 seconds know just based on shipment you know it could get evened out a little bit but you know it's nothing out of the ordinary. 19:05 19 minutes, 5 seconds Sure. So to summarize basically it is driven by the existing products with the help of one commercial launch which you had also indicated in Q3. 19:14 19 minutes, 14 seconds That's right. 19:16 19 minutes, 16 seconds Sure. The second question I have is on the peptide side the contract which we had signed and uh we had also given the notification. So products look to be in 19:25 19 minutes, 25 seconds the early commercial st uh stages. So what value add are we doing here as a CDMO first and if uh the product move to 19:34 19 minutes, 34 seconds the late commercials going ahead they will continue to work along with us how this contract is structured. Yeah. 19:42 19 minutes, 42 seconds Yeah. A I think uh you know um the I think the the contract you're referring to I think was a was an announcement 19:51 19 minutes, 51 seconds made in partnership with our client. Um but to be fully transparent with you, it's a very early stage program and I would not really associate any uh near 20:00 20 minutes or midterm revenue coming out of those projects because um we do have you know close to uh 8 to 10 peptide programs in 20:09 20 minutes, 9 seconds our uh development pipeline. Some are advanced, some are early stage. I would categorize the one you're referring to 20:16 20 minutes, 16 seconds in the early stage. Um and you know these are being developed for various uh therapeutic uh um indications. Uh it 20:25 20 minutes, 25 seconds will take at least a few years for a program like the one you're mentioning to uh give us commercial benefit. Um the 20:32 20 minutes, 32 seconds programs that Newland would expect to be commercialized in a peptide facility are programs that are not uh perhaps 20:40 20 minutes, 40 seconds information on them are not available in the public domain. I I just wanted to clarify that. 20:46 20 minutes, 46 seconds Sure. And additionally when we are looking to grow our peptide business what is our key selling point to clients 20:52 20 minutes, 52 seconds and uh uh since we have added uh uh like the client L uh life sciences. So uh 21:00 21 minutes will uh that help us to add more clients going ahead to work on the similar platform. Is it the platform which we 21:07 21 minutes, 7 seconds choose uh which can broader our uh client in the similar category? How does that uh the thought process uh behind the peptide business growth going ahead? 21:19 21 minutes, 19 seconds Yeah. So I think the pitch we make to peptide clients is that you know we've built we've invested close to 16 18 21:27 21 minutes, 27 seconds years in the peptide space you know and we kind of worked our way uh organically 21:34 21 minutes, 34 seconds by making fragments uh uh building blocks amino uh you know unnatural amino acid based fragments and then slowly 21:42 21 minutes, 42 seconds moved up the uh value chain making even peptide APIs. Our biggest strength is the fact that we have uh done a lot of 21:51 21 minutes, 51 seconds process development for peptides inhouse in Muland. We've always had peptide R&D in Nuland for several years focused on 21:58 21 minutes, 58 seconds process chemistry notal chemistry. Uh this is a skill set that is uh very important when it comes to engaging with clinical stage peptides especially APIs. 22:10 22 minutes, 10 seconds Um so we were able to successfully showcase those capabilities and once we showcase those capabilities and now we 22:17 22 minutes, 17 seconds have also started investing and creating manufacturing infrastructure it's becoming easy for our clients to uh 22:25 22 minutes, 25 seconds partner with MUN. Um so that's kind of what's uh you know uh giving us traction in in the peptide space. 22:37 22 minutes, 37 seconds Sorry to interrupt. May we request Mr. 22:39 22 minutes, 39 seconds child to please rejoin the queue. Thank you. Ladies and gentlemen, we will request you to please limit your question to two per participant. The 22:47 22 minutes, 47 seconds next question is from the line of Sigal Kapoor from Antifragile Thinking. Please go ahead. 22:52 22 minutes, 52 seconds Yeah. Hi, thanks for the opportunity. Uh hi team, it's always good to see the um convex side of volatility and lumpiness. 23:00 23 minutes Uh excellent show. I've got two questions. Um first is uh Newland has built strong capabilities in complex 23:08 23 minutes, 8 seconds chemistry and peptides but the industry's value creation is in my view increasingly shifting towards um hybrid 23:16 23 minutes, 16 seconds modalities like ADCs and uh fermentation enabled manufacturing. 23:21 23 minutes, 21 seconds So what do you see um as Muland's biggest uh capability gap in sort of uh participating meaningfully in that um 23:30 23 minutes, 30 seconds kind of an ecosystem and how are you addressing uh all of it today? That's my first question. Thank you. 23:38 23 minutes, 38 seconds Yeah. Hi. Hi Selind. Uh uh always nice to hear from you. Um I I don't know if I would completely subscribe to the 23:46 23 minutes, 46 seconds hypothesis. uh you know I would uh I would I think that I would agree with the basic concept that you know uh more 23:54 23 minutes, 54 seconds value is in complex chemistry complex modalities but I would uh you know 24:01 24 minutes, 1 second probably put peptides into that category as well. I think today if you see the 24:07 24 minutes, 7 seconds explosion happening in the GLP1 and the peptide arena uh they uh you know I think some of these peptides uh 24:16 24 minutes, 16 seconds especially the innovative volumes are going into multimetric tons and the commercial value for a CDMO business is 24:23 24 minutes, 23 seconds running into billions of dollars per molecule. Um, so I would argue that the 24:29 24 minutes, 29 seconds peptide CDMMO opportunity is as or more attractive than maybe some of these 24:37 24 minutes, 37 seconds oligo ABC kind of opportunities because uh even if you take you know just based on my limited understanding of the oligo 24:44 24 minutes, 44 seconds business um you know the oligo CDMO business is not uh as big as the peptide CDMO business that's because you know 24:52 24 minutes, 52 seconds oligos have not reached the kind of scale um ABCs is again slightly different because there's a map component there's a biologics component 25:00 25 minutes over there and I think you know yes it is definitely a future modality from a CDM perspective I think the way Newland 25:09 25 minutes, 9 seconds is approaching it is that we are a small company you know I think we're barely scratching the surface when it comes to this business I think we have a long 25:16 25 minutes, 16 seconds runway of growth in front of us I think if we continue to sharpen our um skills in the small molecule complex small 25:25 25 minutes, 25 seconds molecu place we you know uh you know strategically get into the peptides and 25:31 25 minutes, 31 seconds start making uh complex peptides uh in a meaningful way uh and then we slowly start looking for other adencies for 25:40 25 minutes, 40 seconds example a peptide capability can help you make linkers for ADCs so then you're slowly getting into the ADC space through the peptide capability and then 25:48 25 minutes, 48 seconds maybe you know future through some you know strategic acquisitions etc you could you know climb yourself into these 25:55 25 minutes, 55 seconds new modalities but I would see you know uh a decade of growth you know by being 26:02 26 minutes, 2 seconds invested in these current skill sets including peptides but I would not say we should be limited to this area that's where I would agree with you that you 26:11 26 minutes, 11 seconds know you should keep you know um going into these adjacencies but uh I I definitely see peptides as more 26:19 26 minutes, 19 seconds compelling today compared to let's say you know an oligos or even some these RNAi based uh therapies ADCs yes I agree 26:29 26 minutes, 29 seconds but ADCs is a different ballgame uh and and I think that's something maybe uh a 26:35 26 minutes, 35 seconds future agent that we would pursue no that's very thoughtful as always uh s 26:42 26 minutes, 42 seconds thank you for that and second a lot of u newer enzyatic and bio enabled 26:48 26 minutes, 48 seconds manufacturing roots they kind of look attractive at lab scale but Commercial manufacturing is ultimately constrained 26:57 26 minutes, 57 seconds by yield consistency, you know, purification economics, contamination controls and of course the regulatory 27:05 27 minutes, 5 seconds aspects are always there. So which of these do you believe is the biggest real bottleneck today and where does advanced 27:14 27 minutes, 14 seconds um synthetic chemistry is still kind of retains a more durable economic 27:21 27 minutes, 21 seconds advantage over you know these emerging biotech uh lead manufacturing roots. 27:28 27 minutes, 28 seconds Yeah. Um no I think it's very uh again uh thoughtful question sel I'll just give you the businessman's perspective 27:35 27 minutes, 35 seconds you know I'm I'm not a scientist or a chemical engineer but you know um I think your your your uh encapsulation of 27:43 27 minutes, 43 seconds the the challenge is very accurate uh I think synthetic chemistry uh based techniques give far higher 27:52 27 minutes, 52 seconds scale and are more reliable over long term uh you know the biological processes are you know always challenging. Um you know just if you 28:01 28 minutes, 1 second look at peptides for example um the you know uh 10 15 years ago you know the largest volume peptide would be say 28:09 28 minutes, 9 seconds lucralide you know maybe 100 kilos per year. Today some of the GLP ones are made at a metric ton scale. The reason 28:17 28 minutes, 17 seconds why the industry is able to make metric tons of peptide is because of the advancements in synthetic chemistry. our 28:24 28 minutes, 24 seconds ability to maybe you know avoid bypass these cumbersome downstream techniques and come up with modern techniques which 28:32 28 minutes, 32 seconds avoid stuff like live vibration etc. The reason that has happened is because academia and industry has invested a lot 28:41 28 minutes, 41 seconds in chemical engineering techniques that avoid the use of these biological processes and have brought in synthetic 28:48 28 minutes, 48 seconds processes. Um I think we as a CDMO cannot obviously make those kind of investments in fundamental research but 28:57 28 minutes, 57 seconds our R&D groups would follow those developments very closely and therefore as new techniques become available our 29:04 29 minutes, 4 seconds goal would be to partner with you know these kind of you know knowledge driven organizations and try to make them scalable. Uh but short answer is yes. I 29:12 29 minutes, 12 seconds think synthetic chemistry based techniques in peptides maybe even in oligos uh would be the area we would like to focus on and I think you know 29:20 29 minutes, 20 seconds there's a lot of growth opportunity over there. 29:26 29 minutes, 26 seconds Thank you. The next question is from the line of Sham Shivasan from Goldman Sachs. Please go ahead. 29:32 29 minutes, 32 seconds Yeah, good evening. Thank you for taking my question. Uh just two quick ones. 29:37 29 minutes, 37 seconds First one is on the recent development 1 of May when one of your big customers of Denver acid estion on uh has been taken 29:45 29 minutes, 45 seconds over or at least has been a bid from archimemet. So just not getting into that transaction but more from a longetivity of this business. Um does it 29:54 29 minutes, 54 seconds give you uh is there any change in course you think or you know the dedicated capex we put uh some time back 30:03 30 minutes, 3 seconds uh and what are some of the messaging you are actually picking up from this transaction because one of the key concerns from an investor perspective is 30:10 30 minutes, 10 seconds what happens to bumpadoric acid uh post patent expiry sometime later this decade right so just just want your uh thoughts 30:17 30 minutes, 17 seconds on how this product is evolving Uh yeah Sham thanks for the question. Um 30:27 30 minutes, 27 seconds Sham I think just given that you know these CDMO molecules are you know uh under confidentiality clauses we will not be able to comment or acknowledge 30:36 30 minutes, 36 seconds what molecules we make for whom and what the uh uh underlying transaction that you're referring to. I think general 30:43 30 minutes, 43 seconds comment I can give you which might be helpful is that see generally for all our CDMO businesses um you know uh M&A 30:51 30 minutes, 51 seconds of sponsor companies is a very uh uh natural part of the business. I think a lot of biotechs get acquired some of the 31:00 31 minutes biotechs we've contracted which have gotten acquired by fararma. Um one supply agreements usually have inherited clauses. So change of ownership does not 31:08 31 minutes, 8 seconds necessarily uh you know uh anull or create any kind of um uh disruption to 31:15 31 minutes, 15 seconds the supply agreement. Uh second of all, usually for these kind of CDMO relationships, um customers are looking 31:24 31 minutes, 24 seconds for securities of supply and making sure that the patients are getting the medicines. Um and what we have seen from 31:32 31 minutes, 32 seconds all our conversations with our CDMO customers is that typically no one wants to disrupt supply chains. People are looking for continuity. I think any kind 31:41 31 minutes, 41 seconds of uh disruption might happen if there is a clear performance problem or some kind of a uh strategic change. So 31:49 31 minutes, 49 seconds usually when these kind of M&A uh transactions happen, we don't see any um uh immediate risks and uh even if you 31:58 31 minutes, 58 seconds were to see anything then you know we would obviously not be able to comment on specific CDMO molecules but we will 32:05 32 minutes, 5 seconds obviously uh as a responsible company uh temper our outlook and and and modify 32:12 32 minutes, 12 seconds our outlook and and indicate uh if we see some short-term challenges. So for that I would ask you to just revert back 32:19 32 minutes, 19 seconds to the opening comments I made where I made comments about short-term medium-term growth and our visibility of business from these commercial molecules. 32:29 32 minutes, 29 seconds Helpful. Uh thank you. Uh thank you sir. 32:31 32 minutes, 31 seconds Just second question just from outlook only. Um so should we rely on some of your past um guidance on quantitative 32:39 32 minutes, 39 seconds elements of the growth and margins? Um you know we have talked about 18 to 20% CAGGR over time I'm not pinning it down 32:47 32 minutes, 47 seconds to a year also margins um uh is it better to look at H2 margins rather than 32:54 32 minutes, 54 seconds Q4 margins as a place to start um and you know uh if you were to look at fiscal 27 or 28 whichever you want to 33:02 33 minutes, 2 seconds talk about how should we look at say growth and margins please. 33:08 33 minutes, 8 seconds Okay, my my CFO started laughing at your second question, but I won't let him answer. Um, I I think the the 18 to 20% 33:16 33 minutes, 16 seconds is a fair assumption. Uh, you know, not necessarily linearly. I think margins, you know, I think it's definitely, you 33:24 33 minutes, 24 seconds know, we've always been a little bit conservative in terms of how we've looked at our margins. That's because how we fundamentally budget our numbers, 33:32 33 minutes, 32 seconds you know, whether it's exchange rates, uh, raw material pricing, volumes, we tend to be slightly on the conservative side and therefore, you know, the the 33:39 33 minutes, 39 seconds the margins play out better than expected. Um, I I don't know off top of my head what the H2 versus H1 is. So I I 33:47 33 minutes, 47 seconds don't want to comment on it. I think, you know, you can see a trend line, Sham. I would, you know, I I can't give you a better 33:55 33 minutes, 55 seconds prediction than that. So, so I would say you know nothing's changed fundamentally. I think that things are looking slightly better than what we typically paint the picture to be. 34:08 34 minutes, 8 seconds Thank you. The next question is from the line of Shriant Akulkar from Noama. Please go ahead. 34:15 34 minutes, 15 seconds Uh hi uh thank you for the opportunity and congratulations on a very good FY26 performance. uh uh would it be possible 34:24 34 minutes, 24 seconds for the management to provide the capital cap sorry capacity utilization across the three units at the moment? 34:33 34 minutes, 33 seconds Yeah. So the current capacity utilization of two of the three units are close to uh 34:42 34 minutes, 42 seconds between 85 to 90% and the last unit is around 65%. 34:50 34 minutes, 50 seconds Okay. And uh in the initial comments you talked about the longer capital deployment cycle. Now uh can you 34:58 34 minutes, 58 seconds elaborate a little more on this? So what are we thinking in terms of capex and uh utilization of the cash that we have generated in F26? 35:08 35 minutes, 8 seconds Yeah, I think maybe I I I'll just give a answer and then maybe I'll request AJ to add if there's anything after that. I I 35:15 35 minutes, 15 seconds think what we uh were uh alluding to is that as you know the facilities are getting utilized and we are seeing the 35:24 35 minutes, 24 seconds business grow in scale we are also uh you know looking at uh uh long-term 35:31 35 minutes, 31 seconds growth slightly differently. I think our planning and I think the way we are thinking about capital allocation uh has 35:38 35 minutes, 38 seconds become a little bit more uh long-term uh from being tactical. Um, you know, I think just to illustrate this point, I 35:44 35 minutes, 44 seconds think two three years ago, we built uh a production block for a CDMO molecule and we built that block because we had a 35:53 35 minutes, 53 seconds long-term contract that was secure and uh therefore for us it was a very comfortable investment. Now the the I 36:00 36 minutes think for us our thinking also has fundamentally started to change because now when you are at a 2,000 cr revenue and you're going to grow you know 36:09 36 minutes, 9 seconds eventually you'll be adding you know hundreds of crores every year maybe 500 crores maybe even in the future thousand crores a year which requires uh a 36:17 36 minutes, 17 seconds different level of preparedness in terms of creating a base creating production blocks and being ready to engage 36:24 36 minutes, 24 seconds especially with newer clients clients like big farmer clients So I think that's the game that needs to be played and that requires a different 36:34 36 minutes, 34 seconds mindset of capital allocation which is what was being referred to in the opening remarks. 36:44 36 minutes, 44 seconds Thank you. The next question is from the line of Rakolia from Fincom family office. Please go ahead. 36:57 36 minutes, 57 seconds Yes, you are. Please go ahead. 36:59 36 minutes, 59 seconds Uh, thanks a lot for the opportunity and and congratulations on a great set of numbers. I just uh I wanted to have an 37:07 37 minutes, 7 seconds understanding of um any potential or any of the reasons for the leadership transition if uh S taking over as CEO 37:16 37 minutes, 16 seconds and MD from state uh will become a vice chair. 37:23 37 minutes, 23 seconds Yeah. Uh thanks uh thanks for the question. Um yes I think the the the role change between uh such and me uh 37:30 37 minutes, 30 seconds effective April 1st was was part of a pre-planned transition. Um basically the background is that uh as the business is 37:39 37 minutes, 39 seconds growing uh both such and I as full-time directors promoters were uh focusing on 37:46 37 minutes, 46 seconds um essentially similar parts of the business. uh both of us were looking at the day-to-day business and uh what uh the board felt as the business is 37:55 37 minutes, 55 seconds ramping up uh it would be uh more effective for the organization if one of us was to focus more on the day-to-day 38:03 38 minutes, 3 seconds business um and uh you know how the business is operating um you know on a 38:10 38 minutes, 10 seconds ongoing basis and uh the uh the other promoter focus more in terms of the long-term uh and areas that are 38:17 38 minutes, 17 seconds important to the business especially as we grow in size. Um so that's how the roles have uh evolved. I think for me 38:24 38 minutes, 24 seconds personally uh uh just given the my role in the uh you know uh the building of the CDMO business uh I mean just to give 38:32 38 minutes, 32 seconds you the background I've been uh you know with Mulan for close to 19 years now and um um my 38:41 38 minutes, 41 seconds role in the company was essentially to build the CDMO business. So as the CDMO business has been ramping up um we also 38:48 38 minutes, 48 seconds felt at the board that you know it would be logical for me to drive the day-to-day business since I understand the business from an end to end perspective and it would be more 38:56 38 minutes, 56 seconds meaningful for such to take on a slightly long-term role. Um you know uh he's been responsible for you know operating the new foundation which is a 39:05 39 minutes, 5 seconds new initiative that the organization is uh taking. uh I think as a organization that's manufacturing oriented we're also looking at enterprise risk um 39:14 39 minutes, 14 seconds sustainability and these are all areas that were uh in the past uh not really covered between both of us so so it's 39:22 39 minutes, 22 seconds more of a role clarity and a role separation uh but such also continues to be equally involved in the business 39:32 39 minutes, 32 seconds thanks all for the for the answer my next question was and you have answered this Uh I'm sorry to interrupt Mr. Vive. We are 39:41 39 minutes, 41 seconds unable to hear you clearly. So can you please speak louder? Uh is it better? Yes, much better. Please go ahead. 39:49 39 minutes, 49 seconds Uh thank you. Uh thanks a lot for that answer sir. Uh the next question uh is that as for the S&T global data from 39:56 39 minutes, 56 seconds March, the global PEVC biotech funding has declined sharply since 2021. Um I understand that you answered partially 40:04 40 minutes, 4 seconds but uh how is this trend impacting uh your business the RFUS and client client employees and how do you plan to 40:12 40 minutes, 12 seconds navigate those trend so Vick if I were to understand your question correctly you're talking about 40:19 40 minutes, 19 seconds how the funding environment is affecting our business right and uh I think as we 40:26 40 minutes, 26 seconds have said in the past I think a lot of our business and our growth is driven more more by molecules which are in the 40:35 40 minutes, 35 seconds close to commercial and in the clinical phases and a lot of the funding has affected more the discovery and the 40:42 40 minutes, 42 seconds early phases. So we haven't seen that affect our business as much but I it is at the same time it affects the python 40:50 40 minutes, 50 seconds and funnel over a period of time but uh the focus for us continues to be molecules where the IND is being piled 40:57 40 minutes, 57 seconds that is where they're entering phase one onwards. So I think there we continue to have good visibility and irrespective of 41:06 41 minutes, 6 seconds the funding environment molecules with good data continue to do well and I think our focus the BD team's focus is 41:14 41 minutes, 14 seconds uh such molecules and I think we have been fortunate that even our customers some of the molecules have done well in terms of their data. So we don't see 41:23 41 minutes, 23 seconds this impacting us in the short to medium term. Thanks. 41:29 41 minutes, 29 seconds Thank you ladies and gentlemen. In order to ensure that the management is able to address questions from all participants, we would request you to please limit your question to one per participant. 41:41 41 minutes, 41 seconds The next question is from the line of Retika from Value Quest. Please go ahead. So thank you for taking my question. 41:48 41 minutes, 48 seconds First question is on peptide facility. 41:51 41 minutes, 51 seconds Uh we had earlier talked about uh this getting operational in July. uh are we on track for this and by when do we 41:59 41 minutes, 59 seconds expect commercial quantities to start or do we already have firm contracts for this facility? 42:08 42 minutes, 8 seconds Yes. Uh thanks. The the yeah the SC the the facility will be ready uh by July as per schedule. Uh there has been no 42:16 42 minutes, 16 seconds change in the dates for that. Uh we have uh projects that will ramp up in this facility. uh and uh we have visibility 42:24 42 minutes, 24 seconds for these projects. Um I would probably not go as far as to say that we have firm contracts because you know um these 42:32 42 minutes, 32 seconds are early stage projects and yes they are near commercial but you know uh I think we will probably focus first on 42:42 42 minutes, 42 seconds you know completing validations qualifications uh and go through that process which is pre-commercialization 42:49 42 minutes, 49 seconds and then maybe we will uh in the same time get into contracts and stuff. So yeah, I think we're very excited. I 42:56 42 minutes, 56 seconds think we have project visibility and uh these are you know uh so there is enough pipeline to feed into this facility. 43:06 43 minutes, 6 seconds Thank you. The next question is from the line of Chiak Sha from Whitpine Investment Management. Please go ahead. 43:13 43 minutes, 13 seconds Yeah, thanks for the opportunity and I have joined a bit late so apologies if I'm repeating the question. See first question is with respect to the 43:20 43 minutes, 20 seconds quarterly results or H1 results however you wish us to look at and bringing in the context of past there is volatility 43:29 43 minutes, 29 seconds in the business any comments is that the nature of volatility changing and it would be much less volatile and how much 43:38 43 minutes, 38 seconds of the Q4 results is kind of one off lumpy etc etc that's first question that I 43:48 43 minutes, 48 seconds Yeah, thanks for the question. Um, I um I think you know volatility and how long 43:55 43 minutes, 55 seconds it will last will it uh is is is difficult for us to say because you know we seeing a very dynamic uh you know 44:04 44 minutes, 4 seconds growth in the business and you know some of the new molecules are also fairly high value. uh typically volatility is 44:13 44 minutes, 13 seconds brought about by newer molecules. The older molecules tend to be less volatile but when the newer molecules are also 44:21 44 minutes, 21 seconds you know significant in terms of value contribution then this volatility will continue. Um so so I don't even necessarily see it as a negative thing. 44:31 44 minutes, 31 seconds Uh I think as long as we have investor alignment that this volatility is part of our business, I think it's something 44:40 44 minutes, 40 seconds that we should be okay with. Um I would not see us going to a you know 25% time 44:47 44 minutes, 47 seconds 4 kind of a situation anytime in the near future. uh because the moment these 44:54 44 minutes, 54 seconds older these newer molecules stabilize then there's a possibility that some new molecules will come and they will bring 45:01 45 minutes, 1 second in the volatility and sometimes these newer projects are also very high value projects. So, so it's not like you know the base has become big so the 45:09 45 minutes, 9 seconds volatility is reducing. So we are also finding it very challenging to uh to kind of you know uh demystify the 45:18 45 minutes, 18 seconds volatility but um but that's the reality of our business and I would go back to the comment I made saying that look at a 45:26 45 minutes, 26 seconds you know a multi-quarter trend and and and then you know make your deduction in terms of the growth rate and the margin. 45:34 45 minutes, 34 seconds uh I think that will give you a better comfort for your modeling and and and visualization. 45:41 45 minutes, 41 seconds Thank you. The next question is from the line of CA Shilba Sabu and individual investor. Please go ahead. 45:48 45 minutes, 48 seconds Hello. Uh congratulations sir on the good set of numbers. My question is for the CFO Mr. Abi. Sir in 23 con call an 45:58 45 minutes, 58 seconds individual investor has asked a question about inventory manipulation but in the transcript some words are changed which has changed the essence of the question 46:07 46 minutes, 7 seconds whereas the audio on your website is crystal clear and said the guidelines also don't allow these changes so this looks like actual manipulation somewhere 46:16 46 minutes, 16 seconds can you please justify this I'll have to uh check back on on what you have mentioned uh and and then 46:25 46 minutes, 25 seconds revert back to Shilba Uh um I I don't have the facts and figures right in front of me to react to your question. 46:35 46 minutes, 35 seconds Which quarter is she refering? Q3. 46:38 46 minutes, 38 seconds Uh sir Q3 FI 206 uh at 24 minutes 26 seconds. 46:45 46 minutes, 45 seconds Yeah, we'll check and get back to you. 46:49 46 minutes, 49 seconds Thank you. The next question is from the line of Mayul Panchwani from 40 Cent. Please go ahead. 46:56 46 minutes, 56 seconds Hello sir, congratulations on uh a great set of numbers. Um so you are explaining to one of the participants Mr. Sajil 47:05 47 minutes, 5 seconds Kapoor about uh that you know uh we don't see that ADCs are a uh I mean peptides are less complicated than ADCs. 47:14 47 minutes, 14 seconds uh so you know how do how does a uh you know I I understand that peptides are mainly used in GLP1 but what is the what 47:23 47 minutes, 23 seconds is what what leads to the complexity actually if you can you know help me for a person a lay man like me 47:32 47 minutes, 32 seconds um yeah sure um I mean just full disclosure I'm an electrical engineer so I might find it a little difficult to explain it technically 47:40 47 minutes, 40 seconds but I I just want to clarify that I To sil's question, I did not say that peptides are more complicated than ADCs. 47:48 47 minutes, 48 seconds See, ADCs are a biologic molecule which is tethered to a small molecule using a 47:55 47 minutes, 55 seconds peptide linker. So even a rudimentary textbook definition will tell us that ADCs are more complicated. What I was 48:03 48 minutes, 3 seconds telling Sajel is that peptides are very lucrative as a business and when compared to the oligoucleotide business 48:10 48 minutes, 10 seconds I believe the CDMO business value of peptides is higher than pep than the oligo business. Uh but when it comes to 48:19 48 minutes, 19 seconds ABCs uh the the molecules are far more complicated and therefore I would be very clear to uh uh to reiterate that ABCs are more complicated than peptides. 48:30 48 minutes, 30 seconds However, I'll still respond that peptides are longchain molecules and they're made of a series of amino acids. 48:38 48 minutes, 38 seconds They tend to be very delicate and if they are not synthesized in uh the appropriate way, they tend to fold and they tend to form a lot of impurities. 48:50 48 minutes, 50 seconds So, the synthesis of peptides is considered to be far more complex and challenging than synthesis of traditional small molecules. So when you 48:58 48 minutes, 58 seconds look at the business from the prism of small molecules, peptides are far more complex and therefore they're far more value creating if you're able to make 49:07 49 minutes, 7 seconds them. And uh because of the explosion of these uh GLP1s for metabolic diseases 49:15 49 minutes, 15 seconds and other indications, there is a lot of uh there are a lot of molecules out there that are peptides and there is a 49:24 49 minutes, 24 seconds need for CDMO services for these peptides especially on the NCE side. 49:29 49 minutes, 29 seconds That's the area we want to target because we believe that as a small company we have a lot of opportunity in that area which is the point that was being uh made earlier too. 49:41 49 minutes, 41 seconds Thank you. The next question is from the line of Bharat Sha from BCS Capital Ideas Limited. Please go ahead. 49:48 49 minutes, 48 seconds Yeah. Uh hi uh over many quarters and years actually you've been very fair and consistent 49:57 49 minutes, 57 seconds in guiding about the character of the business and inherent uh up and down character of the 50:05 50 minutes, 5 seconds business. So that quarterly kind of recession that uh unfortunately 50:12 50 minutes, 12 seconds investors are looking for all the time is something which is not inherent in the business and you've been very very 50:19 50 minutes, 19 seconds fair and consistent in guiding the kind of rough gravy train that new business is. 50:28 50 minutes, 28 seconds you made a comment uh that compared to FY24, FY26 has finally registered a meaningful 50:36 50 minutes, 36 seconds growth. If you regard is uh FY25 is a blip. But when after all the ups and 50:46 50 minutes, 46 seconds downs over these 2-year period, the growth is about uh roughly 10% 50:53 50 minutes, 53 seconds compounded over this 2year period. when we measure it from 24 to 26. So for all 51:01 51 minutes, 1 second the so much volatility relative underlying velocity of output finally is somewhat 51:10 51 minutes, 10 seconds underwhelming or am I being unfair in saying this? 51:23 51 minutes, 23 seconds Yeah, thanks for the question uh Barat. 51:25 51 minutes, 25 seconds I I think you know the whether it's underwhelming or overwhelming I think those are you know individual deductions and you know I think it's certainly not 51:34 51 minutes, 34 seconds uh our uh place to to comment on it. Um I I believe that the kind of growth we've demonstrated and the growth we 51:42 51 minutes, 42 seconds aspire to is you know I think that's what we are talking about. Um I think 51:48 51 minutes, 48 seconds you know the 18 to 20% keer that we uh talked about is a potential that we see 51:56 51 minutes, 56 seconds and um I think uh the the kind of growth we have seen in um FY uh 26 you know 52:03 52 minutes, 3 seconds where we ended at 2,000 crores I think you know we you know we we talked about it on the base of FY24 which was I think 52:12 52 minutes, 12 seconds at about 1,500 plus cr so yes I think when you pick a period bit of time or a frame of reference, I think the numbers 52:20 52 minutes, 20 seconds uh will you know kind of not be as uh promising or as uh you know uh uh you 52:28 52 minutes, 28 seconds know attractive as the management may portray. Um but nonetheless I think you know we look at a longer horizon and in 52:35 52 minutes, 35 seconds fact when I even talk to investors about 18 20% keer I always talk about it over a fiveyear period and I always talk 52:43 52 minutes, 43 seconds about it as aspirational. Um so I would you know just you know ask you to look at those comments in that context. Uh 52:52 52 minutes, 52 seconds but you know I would not probably get into a you know uh you know um uh a debate in terms of whether this is uh u 53:01 53 minutes, 1 second you know uh attractive or not. I think that's for for you to decide. I think the business that we have built I think 53:08 53 minutes, 8 seconds is very attractive and I think the base we have today in terms of the pipeline and the potential we have is is fairly strong. So so I think it it is an 53:17 53 minutes, 17 seconds attractive business. Um but I I really don't want to you know um you know either agree or challenge the the hypothesis that you made. 53:29 53 minutes, 29 seconds Thank you. The next question is from the line of Ashid dots from Diamond Asia Capital. Please go ahead. 53:36 53 minutes, 36 seconds Oh no. Hi uh hi Shahers. Congratulations on a strong set of numbers. Two questions from my side. uh the new band is the oldest player in the peptide 53:44 53 minutes, 44 seconds chemistry working on this uh thing from last 18 years and when you see from the longer term perspective let's say five years down the line and the kind of 53:52 53 minutes, 52 seconds pipeline that you are having the kind of capex that you are conducting from an investor perspective from five years or more than that is it fair to assume that 54:01 54 minutes, 1 second the capability that we are creating the capacity that we are creating has enough visibility to create one more new land in terms of numbers 54:12 54 minutes, 12 seconds Uh did you understand? Sorry. Uh I uh could you just quickly repeat the question? Uh I I couldn't pull. 54:21 54 minutes, 21 seconds Sure. Sure. I will. So we are in the Am I audible properly? 54:26 54 minutes, 26 seconds Yeah. But I was if you could just speak a little loudly and a little slowly and you can keep the question short but sure. 54:33 54 minutes, 33 seconds Sure. Sure. So uh SE we are in the peptide capacity peptide capability from from last 16 18 years we are working on 54:42 54 minutes, 42 seconds that we have developed several molecules from basic to complex range now we are putting the capacity also so from an 54:48 54 minutes, 48 seconds investor's point of view seeing the company from five years and more than five years down the line this this 54:55 54 minutes, 55 seconds category in itself has has the potential to create one more new in terms of numbers I don't want to know the name of 55:03 55 minutes, 3 seconds this specific molec molecule specific capability just what the company is building and how should the investor look at it from next 5 years perspective 55:11 55 minutes, 11 seconds is it fair to assume that this this category in itself has a potential to create one more new land in terms of numbers 55:19 55 minutes, 19 seconds yeah see I think if you look at the market potential you know I think we've also had outside uh consulting firms evaluate the space before we committed 55:28 55 minutes, 28 seconds to our website investment we were told that it's a 56 billion just the CDMO space you know five six billion dollar 55:35 55 minutes, 35 seconds market opportunity and it has a very healthy uh keer as a uh industry because there's lot of GLP ones coming in it's 55:44 55 minutes, 44 seconds not just about the weight loss drugs that have been commercialized but it's also about the next gen not just from the large companies but other companies 55:52 55 minutes, 52 seconds as well so there is a plethora of uh development candidates which are peptides and that creates a very 55:59 55 minutes, 59 seconds attractive uh value proposition uh so I think the Short answer is that it has the potential to create another newand 56:06 56 minutes, 6 seconds for sure. It may take uh a few years, it may take more than a few years. Uh I think that really depends on the nature 56:13 56 minutes, 13 seconds of the opportunity. Uh I think from Newand point of view, I think we are looking at this business as a current 56:21 56 minutes, 21 seconds capability plus peptides. So we're not really looking at leaving our, you know, small molecule 56:28 56 minutes, 28 seconds uh uh capabilities. We're looking at adding that on. And we think there's a lot of magic that can happen uh between 56:36 56 minutes, 36 seconds small molecules and peptides because a lot of also uh work you can do on the small molecule side which feed into the peptide business. So I think aggregately 56:45 56 minutes, 45 seconds it will be a very exciting business model. Um how big this business can be I think really depends on how the opportunities play out. Our goal is 56:54 56 minutes, 54 seconds simple to just be you know kind of uh one of the on the forefront uh at least from you know our part of the world and 57:02 57 minutes, 2 seconds uh make investments be ready and and create the opportunities but we really have to see how it plays out. You know 57:09 57 minutes, 9 seconds this is kind of like the CDMO story we were talking about five seven years back when the CMS business was like you know 10 15% of our total revenues. We knew 57:18 57 minutes, 18 seconds that it has potential but we were not quite sure how it would scale up. I think we're in a similar kind of a situation with peptides where we believe 57:26 57 minutes, 26 seconds it will grow but obviously we also don't want to get ahead of ourselves by you know making it sound concrete. 57:39 57 minutes, 39 seconds Thank you. The next question is from the line of Ragunat and individual investor. Please go ahead. 57:47 57 minutes, 47 seconds Yeah sir. Good evening sir. uh sir how we are using the AI for our u operation 57:55 57 minutes, 55 seconds for manufacturing uh processes are we gaining some advantage because of using the AI. 58:03 58 minutes, 3 seconds So uh Arna thanks for your question. I think at this stage we are in terms of manufacturing we are still to uh we are 58:10 58 minutes, 10 seconds still exploring. I think there are certain areas in u uh say R&D and certain other operations where we have 58:18 58 minutes, 18 seconds done a few pilots. I think that is where we are at this point of time. 58:21 58 minutes, 21 seconds I think you know there there three basic layers of AI and I think the base layer which is you know trying to you know get 58:29 58 minutes, 29 seconds repeat tasks uh or tasks which are you know kind of you know uh redundant uh if we can get AI to use them. So I think 58:37 58 minutes, 37 seconds R&D is definitely one area as a GT talk in manufacturing. I think the only area that we are exploring is if we can get 58:44 58 minutes, 44 seconds AI to scan a lot of manufacturing data uh and uh be able to point to where you 58:52 58 minutes, 52 seconds know the root cause of um you know investigations are. I think that's an area that's being explored. Um but you 59:00 59 minutes know I think it's still very early days for us but we're very committed towards you know bringing in AI applications meaningfully into the business. 59:11 59 minutes, 11 seconds Thank you ladies and gentlemen. That was the last question for today. I would now like to 59:18 59 minutes, 18 seconds hand the conference over to management for closing comments. 59:24 59 minutes, 24 seconds Good evening everyone. Thank you once again for your interest in and for your questions which helped us to also answer 59:31 59 minutes, 31 seconds as well as things a little bit more about the business. We even as we probably haven't been able to uh answer 59:38 59 minutes, 38 seconds all the questions in the queue because of the positive of time please do reach out to Ravi of in case you have further questions. With that said good evening everyone. 59:51 59 minutes, 51 seconds Thank you ladies and gentlemen. On behalf of New Laboratories Limited, that concludes this conference.