Piramal Pharma Ltd — Q4 FY26

Piramal Pharma Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=BZWJIYibv2s Published: 2 weeks ago

0:01 1 second Ladies and gentlemen, good morning and welcome to the Pyramal Pharma Limited Q4 FI26 earnings conference call. As a 0:09 9 seconds reminder, all participal lines will remain in the listenon mode and there will be an opportunity for you to ask questions after the presentation 0:17 17 seconds concludes. Should you need assistance during the conference call, please signal the operator by pressing star then zero on your touchtone telephone. 0:26 26 seconds Please note that this conference is being recorded. 0:30 30 seconds I will now hand the conference over to Mr. Gagan, head of investor relations and enterprise risk management for opening remarks. Thank you and over to you. 0:39 39 seconds Thank you Ryan. Good morning everyone. I welcome you all to our post results earnings conference call to discuss our 0:46 46 seconds Q4 FI26 results. Our results material have been uploaded on our website and you may like to download and refer them 0:53 53 seconds during our discussion. Today's discussion may include some forward-looking statements and these must be viewed in conjunction with the risk that our business faces. On the 1:02 1 minute, 2 seconds call today we have with us our chairperson Miss Nandini Pamul, CEO Global Farmer Mr. Peter D. Young and our 1:09 1 minute, 9 seconds CFO Mr. Vive Walarj. With that I would like to hand it over to Miss Nandi Pamal to share her thoughts. 1:15 1 minute, 15 seconds Good day everyone and thank you for joining us for our post results earning score. 1:22 1 minute, 22 seconds FY26 was a transitional year for the company marked by a combination of external headwinds and deliberate 1:29 1 minute, 29 seconds strategic actions that we believe will position us well for the next phase of growth. During the year we were impacted 1:37 1 minute, 37 seconds by macroeconomic uncertainties, subdued biioarma funding in the first half, inventory detocking in the key on patent 1:45 1 minute, 45 seconds commercial products and intensified competition in inhalation anesthesia in the non US markets. As a result, we 1:54 1 minute, 54 seconds reported a year decline in revenues and ITA. However, when adjusted for the impact of detocking, our underlying 2:02 2 minutes, 2 seconds performance was more resilient with the business delivering modest growth in both revenues and IITA for the year. But 2:10 2 minutes, 10 seconds despite these near-term SAP challenges, we made significant progress that has put us on a stronger footing for FY27 and beyond. 2:20 2 minutes, 20 seconds These include a strong pick up in RFPs and order inflows for our CDMO business in the second half of FY26, especially 2:28 2 minutes, 28 seconds for our overseas sites, which have a superior gross margin profile. Expansion of our CMO commercial team to engage 2:36 2 minutes, 36 seconds with more clients in key regulated markets of the US and EU. 2:42 2 minutes, 42 seconds Strengthening our ex execution across our network sites to ensure customer delight. the completion of the catalog acquisition at the start of the year. 2:52 2 minutes, 52 seconds Steady ramping up of our single floor inside supplies to XUS markets from Bigwan and continued momentum in our 3:00 3 minutes consumer business led by the power brands and the e-commerce channel. These factors put together give us the 3:08 3 minutes, 8 seconds confidence that we're well positioned to return to healthy early to mid- teen revenue growth with IIT and PATH growing faster in FY27. 3:18 3 minutes, 18 seconds On quality and regulatory compliance, we continue to demonstrate strong performance during FY26. 3:26 3 minutes, 26 seconds We successfully completed 38 regulatory inspections, including three USFDA inspections 3:33 3 minutes, 33 seconds without any official action indicated observations, sustaining a best-in-class track record of zero O AI. 3:43 3 minutes, 43 seconds In addition, we underwent 209 customer audits during the year compared to 165 3:49 3 minutes, 49 seconds in the previous year. This marks the highest number of customer audits completed in a single year in our history, reflecting heightened c 3:58 3 minutes, 58 seconds customer engagement, deeper technical interactions, and the growing complexity of programs that we support. 4:05 4 minutes, 5 seconds Sustainability continues to remain key focus for us. During the year, we made strong progress against our identified 4:14 4 minutes, 14 seconds priorities. decarbonization, reducing freshwater intake, responsible waste management, diversity and 4:21 4 minutes, 21 seconds inclusion um and belonging, strengthening our supply chain practices, employee safety and CSR 4:29 4 minutes, 29 seconds initiatives. This commitment was also reflected in our improved ESG ratings with a score of 68.5 from SCES ESG 4:38 4 minutes, 38 seconds research and 64 from NSE sustainability ratings. Moving on to business specific 4:45 4 minutes, 45 seconds highlights, starting with our CDMO business. Our CDMO business reported revenues of 1,78 4:53 4 minutes, 53 seconds crores in the fourth quarter of FY26 and 4,915 crores for the full year. Adjusting to 5:01 5 minutes, 1 second the impact of temporary detocking, the business delivered modest revenue growth during the first during the year. Growth was impacted by macroeconomic 5:10 5 minutes, 10 seconds uncertainties and slower RFS and order inflows in the first half on the account of subdued biioarma funding. However, 5:19 5 minutes, 19 seconds with bioarm fararma funding rebounding significantly in the second half, we witnessed a clear acceleration in RFP 5:26 5 minutes, 26 seconds activity in order flows. This gives us confidence that we're poised for healthy revenue and a bitter growth in FY27. 5:35 5 minutes, 35 seconds Importantly, we're seeing a strong pipeline of RFPs at our overseas sites, which if converted to orders should help 5:42 5 minutes, 42 seconds scale revenues and unlock operating leverage. 5:47 5 minutes, 47 seconds During the year, we further strengthened our commercial teams and undertook restructuring to align with evolving 5:54 5 minutes, 54 seconds demand patterns and changing market dynamics. These actions should help us deepen and sharpen our customer focus in 6:01 6 minutes, 1 second key regulated markets of the US and EU, improve order prioritization, and enhance speed of response. 6:09 6 minutes, 9 seconds During the year, we also saw better RFP to order conversion rates, especially with new customers. 6:16 6 minutes, 16 seconds If we maintain this momentum with the open RFPs, we should have a healthy order book for FY27 and beyond, which is 6:24 6 minutes, 24 seconds an important determinant of our medium-term growth trajectory. 6:29 6 minutes, 29 seconds On the development pipeline, we're working with more than 155 molecules with 25 currently in phase three. These 6:36 6 minutes, 36 seconds phase three programs represent a strong source of future on patatterents commercial opportunities. 6:43 6 minutes, 43 seconds In terms of innovation, 47% of our FY26 CDMO revenues came from innovation related work with 96 million uh 6:52 6 minutes, 52 seconds contributed by on patent commercial manufacturing. 6:56 6 minutes, 56 seconds While this represented a year-on-year decline on the reported basis due to the temporary detocking in one product, we 7:04 7 minutes, 4 seconds saw strong growth across on other on patent commercial programs. 7:09 7 minutes, 9 seconds Demand for a differentiated capabilities remains high especially for ADCs HBAPIN on style onshore sterile fill finish and 7:17 7 minutes, 17 seconds onore drug truck stem cells to capitalize on this demand we've been investing steadily a 90 million 7:24 7 minutes, 24 seconds investment to expand sterile injects and payload linker capabilities of the Lexington and Riverview sites remains 7:32 7 minutes, 32 seconds firmly on track. The Riverview expansion has already been completed and is supporting customer requirements while 7:39 7 minutes, 39 seconds the larger Lexington phase is progressing as planned and is targeting for completion by the end of calendar year 2027. 7:48 7 minutes, 48 seconds During the year, our execution improved meaningfully with stronger performance across key operational KPIs including 7:55 7 minutes, 55 seconds OTIF, RFT, campaign readiness and schedule adherence driven by our operational excellence initiative. 8:03 8 minutes, 3 seconds As a result, we achieved a net promoter score of 60, surpassing the industry average and reflecting high levels of customer satisfaction. 8:12 8 minutes, 12 seconds We remain confident in the long-term growth prospects of the global CDMO network and continue to support this conviction through timely investments in 8:20 8 minutes, 20 seconds capacity and capability expansion. In an evolving geopolitical environment, our onshore manufacturing facilities have 8:29 8 minutes, 29 seconds gained increasing relevance and are well positioned to benefit from customer preference for resilient and geographically diversified supply chains. 8:40 8 minutes, 40 seconds Moving on to our complex hospital business. Complex hospital generics in the inhilation anesthesia. We continued 8:48 8 minutes, 48 seconds to strengthen our leadership profile in the mature US market with market share increasing to 47% compared to 45% in March 2024. 9:00 9 minutes Performance in rest of world markets however remained impacted by intensified competition. While SIO florine supplies 9:08 9 minutes, 8 seconds for these markets have commenced from our lowerc cost bigwell facility. 9:13 9 minutes, 13 seconds Traction is expected to build progressively and regulatory approvals are secured in the intratheal segment. 9:20 9 minutes, 20 seconds We maintained our number one position in battle and in the US reaffirming our leadership in this hyper entry barrier 9:27 9 minutes, 27 seconds category within injectable pain management. We're working with our supplier to supply um to resolve supply 9:35 9 minutes, 35 seconds constraints. New product launches will be an important driver of growth in the CH business. In line with this, we 9:43 9 minutes, 43 seconds recently completed the acquisition of catalog from BMS with revenue contribution expected to commence from Q2 of the financial year. Successful 9:52 9 minutes, 52 seconds integration of the product in our port portfolio will be critical given its manufacturing complexity. Camealog has limited competition and carries healthy 10:01 10 minutes, 1 second and bitter margins in line with the CHG business. 10:05 10 minutes, 5 seconds In terms of differentiated and specialty products, we continue to invest in 505B2 programs, complex um generics, 10:13 10 minutes, 13 seconds differentiated generics and select branded products. These are pursued through in licensing arrangements and co-development partnerships to support 10:21 10 minutes, 21 seconds long-term growth. We have already entered into partnerships for few products which are begin expected to begin contributing over the medium term. 10:31 10 minutes, 31 seconds These products are well aligned with our existing portfolio and distribution footprint leveraging our strong hospital network 10:39 10 minutes, 39 seconds and offering meaningful barriers to entry to product complexity, differentiation or supply capabilities. 10:46 10 minutes, 46 seconds Moving to our consumer healthcare, we continue to deliver strong and consistent growth in our consumer healthcare business recording recording 10:55 10 minutes, 55 seconds 17% growth in Q4 and 426 as well as for the full year driven by both growth based performance across the portfolio 11:04 11 minutes, 4 seconds in our key representative markets. This has translated into growth at approximately twice the market rate reflecting continued gains in 11:13 11 minutes, 13 seconds penetration and brand presence. Our power brands sustained their momentum delivering approximately 26% growth in Q4 and 24% growth for the fourth year. 11:24 11 minutes, 24 seconds Key brands includ including Little's Racine Cir and I range outperformed the market 11:31 11 minutes, 31 seconds and continue to gain traction across channels and geographies. 11:37 11 minutes, 37 seconds Several of our brands also crossed important milestones during the year highlighting a strong consumer acceptance in a fast growing segment. 11:46 11 minutes, 46 seconds During the year, we sharpened our focus on improving profitability and calibrated our strategy accordingly, anchored around two key pillars. First, 11:55 11 minutes, 55 seconds we're driving product premiumization by launching increasingly high value offerings aligned with evolving consumer 12:02 12 minutes, 2 seconds preferences, enabling superior margins while addressing the upper segments of the consumption pyramid. Second, we're 12:10 12 minutes, 10 seconds shifting towards fewer but higher impact launches with a focus on quality and scale over volume and targeting 12:18 12 minutes, 18 seconds categories with larger address and addressable market opportunities to ensure sustainable and profitable growth. Our e-commerce business has 12:26 12 minutes, 26 seconds remained a key growth driver recording 48% growth during the year and now accounting for nearly 30% of total BCA 12:34 12 minutes, 34 seconds sales. We maintained a calibrated and disciplined approach to media and trade promotion investments during the year, 12:41 12 minutes, 41 seconds ensuring consistent and impactful brand engagement across the channel. Our marketing initiatives and television, 12:49 12 minutes, 49 seconds social media, influential campaigns and regional activations, strengthening consumer connect across demographics and geographies. 12:58 12 minutes, 58 seconds In um terms of our distribution network, while e-commerce is gaining a lot of traction, we're also simultaneously 13:06 13 minutes, 6 seconds increasing our presence in the general trades such as chemist and cosmetic stores, general trades, small towns and 13:13 13 minutes, 13 seconds cities and hypermarkets and supermarkets. 13:16 13 minutes, 16 seconds Summarizing the performance to summarize, FY26 was a year of recalibration shaped by external disruptions and certain business specific factors. 13:28 13 minutes, 28 seconds Despite these challenges, we exited the year on a stronger note. We're seeing positive leading indicators and expect 13:34 13 minutes, 34 seconds FY27 to mark a return to growth. We're currently anticipating revenue growth in the early to mid teens with a bit 13:41 13 minutes, 41 seconds expected to grow faster than revenue supported by operating leverage. This outlook excludes any revenue contributions from the previously restocked on patent commercial product. 13:54 13 minutes, 54 seconds While we remain mindful of the continued macroeconomic volatility, our underlying business is improving consistent with 14:02 14 minutes, 2 seconds historical patterns. Revenues expected to be H2 weighted reflecting CDO order delivery 14:11 14 minutes, 11 seconds uh schedules and the ongoing catalog integration. Growth momentum is progressive expected to build 14:18 14 minutes, 18 seconds progressively from Q2 onwards resulting in a meaningful improvement and fully a PAT inhibitor. As visibility improves 14:26 14 minutes, 26 seconds over the course of the year depending how the macro environment involves we will reassess and update our guidance at 14:33 14 minutes, 33 seconds as appropriate. At this stage, the trajectory is positive with increasing optionality to deliver incre improved 14:42 14 minutes, 42 seconds outcomes as conditions become more supportive. With this, I'd like to open the floor for Q&A. Thank you. 14:52 14 minutes, 52 seconds Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a 14:59 14 minutes, 59 seconds question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, 15:06 15 minutes, 6 seconds you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and 15:14 15 minutes, 14 seconds gentlemen, we will wait for a moment while the question give assembles. 15:20 15 minutes, 20 seconds We take the first question from the line of Rajes Nilala from 3P Investment Managers. Please go ahead. 15:27 15 minutes, 27 seconds Yeah, good morning. uh do we see any visibility in resumption of supply for our most important on patent commercial 15:34 15 minutes, 34 seconds product and uh second question is what specific steps we are taking to address the decline in CDM or revenue and when 15:42 15 minutes, 42 seconds we expect normalization so as mentioned in comments at the in 15:50 15 minutes, 50 seconds earlier is that at the moment we do not anticipate any orders in the near term from that customer and if and when that changes you'll see that in our 15:58 15 minutes, 58 seconds forward-looking performance. Uh the second one is that also as mentioned excluding that uh product with that 16:06 16 minutes, 6 seconds customer even last year we were in a growth mode for the CDMO and we expect healthy growth as we look ahead due to 16:14 16 minutes, 14 seconds the factors that Nin mentioned which would be related to the improvement in biotech funding that happened in H2 16:21 16 minutes, 21 seconds which then led to a increase in RFPs which then led to an increase in order booking which was supported with a 16:28 16 minutes, 28 seconds higher win rate than prior periods and as we expect and hope that that will sustain into the year as we go ahead we 16:36 16 minutes, 36 seconds should see that support of return to growth absent corrections or one-offs uh in the year FY27. 16:46 16 minutes, 46 seconds Okay, thanks for taking my questions. 16:50 16 minutes, 50 seconds Thank you. We take the next question from the line of of Burman from Vicaria Investment Management. Please go ahead. 16:58 16 minutes, 58 seconds Hi, good morning. Thanks for taking my question. Um, if you can just articulate uh the impact of the Middle East prices 17:06 17 minutes, 6 seconds on business and um it could be like multifaced based on the raw material shortages or even the raw material price increases, the freight increases or the 17:15 17 minutes, 15 seconds insurance increases. Just wanted to understand across various businesses how the contracts are structured, who's taking uh this pain or is it being shared? Just some color on that please. 17:26 17 minutes, 26 seconds So uh hi Anishh uh across the broader operating environment the initial assumption was the impact of this middle 17:35 17 minutes, 35 seconds east situation would uh possibly be contained but as we see it has prolonged longer than what was initially 17:42 17 minutes, 42 seconds anticipated and it's becoming evident that uh some of this effects would remain prolonged and there would be implications on sourcing utilities 17:51 17 minutes, 51 seconds logistics working capital a host of other areas as you alluded do. So, uh yes, in the immediate term for us as 17:59 17 minutes, 59 seconds pyramal, we uh expect the operations to remain manageable, but there would be some cost escalations uh and and we have 18:07 18 minutes, 7 seconds to wait and see because the situation is still very fluid. uh what we are parally doing is to ensure that uh all the mitigation measures have been 18:16 18 minutes, 16 seconds proactively activated and this uh includes but not limited to also re looking at some uh passing on some of 18:24 18 minutes, 24 seconds these cost pressures uh wherever our contractual structures permit to do that. So it's going to be a mix of multiple initiatives of niches to try 18:32 18 minutes, 32 seconds and mitigate and we taking a close look at the developments and uh our actions will be aligned with uh the how the situation emerges. 18:41 18 minutes, 41 seconds Yeah, thanks. Just to follow up on that, um, just if you have to rank your businesses in terms of ease of passing 18:47 18 minutes, 47 seconds on these costs to your customers, what would be like the business where it's hard, what would be the business where it's easy? Some qualitative color on that. 18:58 18 minutes, 58 seconds uh obviously the PCH business is uh to some extent going to be impacted to the extent the way the currency uh will impact the PCH business and there we'll 19:07 19 minutes, 7 seconds have to see what we do and how the market reacts as well. But coming to the other two larger businesses uh it's it's completely going to be customer based 19:15 19 minutes, 15 seconds and our long-term relationships with each customer and what the contractual arrangements are of so I wouldn't say that one business probably is more uh 19:24 19 minutes, 24 seconds different than the other. It's going to be more case by case basis depending upon the the product the arrangements etc. 19:31 19 minutes, 31 seconds Okay. Thanks. I'll get back in the queue. 19:35 19 minutes, 35 seconds Thank you. We take the next question from the line of Sham Shri Nimasan from Goldman Sach. Please go ahead. 19:43 19 minutes, 43 seconds Yeah, good morning. Thank you for taking my question. Just on your ADC slide, uh uh I think you quantified ADC revenues are about 64 million. Uh so just want to understand the outlook for this piece. 19:55 19 minutes, 55 seconds say what was this number in 25 has it grown you know there's a lot of um you know um interest in the space especially 20:02 20 minutes, 2 seconds from both big farmer as well so just want to understand or if you could illustrate some of the uh projects that 20:10 20 minutes, 10 seconds we've been talking about obviously without taking names but just want to understand how should we look at the outlook for this uh and is it a meaningful growth driver when we look forward 20:18 20 minutes, 18 seconds so well this we we thought you may notice this in the investor deck thank you for pointing it out We're very excited with what we have going on in 20:26 20 minutes, 26 seconds ADCs and we've added a number of new customers to our set of customers this fiscal year. And so with those 20:34 20 minutes, 34 seconds additions, we would anticipate this number to be a meaningful driver of our growth in the short and medium term. And we would anticipate this number going up 20:42 20 minutes, 42 seconds in FY278 and beyond. And we some of our recent phase three additions would be including products for this this 20:50 20 minutes, 50 seconds offering. And so we are excited with what we uh have going on here and uh we look forward to sharing more in the future. 20:59 20 minutes, 59 seconds And Peter just just one quick double click on this. So you know the slide talks about multiple services. Uh in 21:06 21 minutes, 6 seconds your opinion what do uh innovators value the most? Is it conjugation services or is it payload? Uh and where is the large 21:14 21 minutes, 14 seconds part of the s TAM from a CDMO perspective trying to offer service for AD. So where does it lie and you know how is how is uh somebody like PML positioned for it. 21:24 21 minutes, 24 seconds So I'd say at least in our experience the most intense discussions happen around who is the best partner for the conjugation which is where we get the 21:32 21 minutes, 32 seconds largest share of our revenue and it's the area where you need to have as a CDMO a track record and capability to support the types of conjugations you 21:41 21 minutes, 41 seconds want to do. And so this is been our historical area of strength and this is an area that we think um is a key area of differentiated differentiation when a 21:50 21 minutes, 50 seconds potential client were to choose between let's say us and an alternative. 21:55 21 minutes, 55 seconds While the MAB contribution may be larger in value, there seem to be many providers for MAB and in that construct 22:03 22 minutes, 3 seconds um the differentiation between MAP providers may be uh lesser. And so our experience has been the conjugation is 22:10 22 minutes, 10 seconds the anchor and then you can attach the uh other three services based on the preferences of the customer for single provider versus line by line 22:18 22 minutes, 18 seconds procurement. And we see we see both modes of interaction. But we do think that again to repeat the anchor for CDML 22:26 22 minutes, 26 seconds selection is and remains the conjugation as the primary focal point. Thank you. Uh and my last question is to uh Vive. 22:34 22 minutes, 34 seconds Uh just Vive when we go to slide 18 just subsequently the you have listed out all your plants right and I think one of the 22:41 22 minutes, 41 seconds thesis for uh Pyraml was also around overseas facilities and how their profitability 22:48 22 minutes, 48 seconds is flat improving declining whatever. So when we look at 26 over 25 and maybe some outlook on 27 as well uh how are 22:56 22 minutes, 56 seconds these facilities doing either in terms of utilization levels maybe as an aggregate if you don't want to give sight specific numbers uh what has been 23:04 23 minutes, 4 seconds the improvement what has been the narrowing or reduction in losses if any right and uh onshuring has been a theme I've noticed multiple times being 23:12 23 minutes, 12 seconds mentioned even in the opening speech as well as investor presentation so uh is there a durable trend towards getting this utilization at these sites higher. 23:21 23 minutes, 21 seconds So let me those are my questions. Thank you. 23:24 23 minutes, 24 seconds Yeah. So in let me first talk about FI26. Uh FI26 has been a mixed year for 23:32 23 minutes, 32 seconds our overseas facilities. In fact several of our facilities both in the UK and in North America did demonstrate growth and 23:40 23 minutes, 40 seconds this came from an emanating interest uh in the specific uh niche capabilities that those sites had to offer. So uh when you eventually get to see the 23:48 23 minutes, 48 seconds financials when they are uploaded for the year ended March 26 you will see that uh several sites did uh show a decent turnaround versus what it was and 23:57 23 minutes, 57 seconds uh as you rightly alluded to we are seeing interest whether it's in our ADC space or whether it's in our high potent 24:04 24 minutes, 4 seconds API space or in our injectable space in Lexington we are seeing a lot of interest and we do expect the growth 24:11 24 minutes, 11 seconds momentum to continue in FI27 as well. I just want to add one bit to this which is connecting some of the dots you would 24:18 24 minutes, 18 seconds have heard in both VivX and Nan's comments is that our overseas sites typically have a higher gross margin and 24:27 24 minutes, 27 seconds we are seeing significant RFP inflow and also some recent order wins in the the back end of last fiscal year and this is 24:35 24 minutes, 35 seconds driven by one thing that Vivic mentioned which is the capabilities we have we think are intrinsically attractive that's why we have the facilities and 24:42 24 minutes, 42 seconds the Second one is the general onshoring push is significant as a tailwind and put together we're seeing even with what 24:50 24 minutes, 50 seconds we ended in FY26 we would anticipate all of our overseas sites uh but especially those in the US and UK to to benefit 24:59 24 minutes, 59 seconds from this uh combination of factors and so with that again higher gross margin and more differentiated offerings we 25:06 25 minutes, 6 seconds should see an FY27 subsequent improvement in in these sites. 25:12 25 minutes, 12 seconds Yeah. And lastly just on data keeping just the intangible write down that we have taken uh 176 cr can you 25:19 25 minutes, 19 seconds qualitatively give some more uh details please thank you also. So you know Sean uh aligned with our long range plan we have been prioritizing where exactly we 25:28 25 minutes, 28 seconds spend our capital on and in respect of certain intangibles which were under development where the market and the macro conditions changed meaningfully 25:36 25 minutes, 36 seconds versus what was originally envisaged and where the potential financial outcomes did not meet our return ratios. We 25:43 25 minutes, 43 seconds decided not to uh put in more capital in those spaces and take an impairment at one go. 25:53 25 minutes, 53 seconds Great. Thank you. 25:56 25 minutes, 56 seconds Thank you. We take the next question from the line of Abdul Kadar Puranwala from ICIa Securities. Please go ahead. 26:06 26 minutes, 6 seconds I hope I'm ordering. Uh yes. 26:10 26 minutes, 10 seconds Yeah. You see the first questions with regards to uh you know your standard financial know you have done 26:18 26 minutes, 18 seconds Abdul I do apologize to interrupt you but your audio is not coming in clear could you please use your handset 26:25 26 minutes, 25 seconds sure uh is this is this better now yes this is better please go ahead yeah so my first question was with 26:33 26 minutes, 33 seconds regards to your standalone financials and commentary on overseas plant so just trying to build up a bridge here. So when I look at your standalone financial 26:42 26 minutes, 42 seconds sheets, I think this quarter you guys have done 20 odd percent. While on a console basis the margins are little lower. So just you know wanted to get 26:51 26 minutes, 51 seconds some sense on you know you know how things look at a console level and you know where exactly there is still some room to improvise margins. 27:02 27 minutes, 2 seconds Yeah. So uh you know u Abdul first as you know that and we've been talking about this narrative that at scale our 27:09 27 minutes, 9 seconds operating margins shoot up and that's precisely seen every year in quarter 4. 27:15 27 minutes, 15 seconds Uh in India as you have rightly identified that uh because of a higher quantum of revenue uh the standalone financials show better margin. As far as 27:24 27 minutes, 24 seconds overseas is concerned as I responded to Sham earlier it's been mixed. So some sites have seen a a higher quantum of 27:31 27 minutes, 31 seconds sales in quarterfall and some sites have not which is why it's a mixed performance and that's why the margins 27:39 27 minutes, 39 seconds have remained slightly lower. As far as our overseas facilities are concerned uh it's it's just a question of scale as as we start building more from some of 27:48 27 minutes, 48 seconds these overseas facilities you will see improvement in the margins going forward. 27:54 27 minutes, 54 seconds Uh understood and my second question is with regards to your onpatent commercial uh you know manufacturing. Uh so firstly 28:02 28 minutes, 2 seconds if you can you know provide some color on how many products uh you know you're supplying currently and second is with 28:09 28 minutes, 9 seconds regard to you know after uh you know assisting for that one time inventorying 28:16 28 minutes, 16 seconds related assessment uh you know I think uh there has been some growth. So if you can highlight you know what's driving 28:23 28 minutes, 23 seconds that and for next year you know how are we looking at in terms of revenues from the segment any uh you know launches uh 28:32 28 minutes, 32 seconds into the pipeline if you could provide any color on that front. 28:37 28 minutes, 37 seconds So uh if you adjust for the one-time situation described, we would have nearly 50% growth in revenue from 28:44 28 minutes, 44 seconds unpatent commercial products from last year to this year that just completed. 28:49 28 minutes, 49 seconds And the number of products is I think between 15 and 16 in the two years. So we think that that demonstrates that it's a more broad-based uh set of 28:58 28 minutes, 58 seconds commercial products this year and we would anticipate that to continue to become broader and continue to grow as we look ahead. And so we would expect as 29:07 29 minutes, 7 seconds you look into FY27 and and beyond that you would see less of a single uh product concentration and we would see multiple drivers here. 29:17 29 minutes, 17 seconds Fair enough. And this last one if I may. 29:19 29 minutes, 19 seconds So if I look at your 26 financials balance sheet uh and cash flows there has been a sizable improvement in 29:27 29 minutes, 27 seconds working capital. So you know going ahead uh uh you know how should we look at the working capital days is there still some 29:36 29 minutes, 36 seconds scope for uh you know you guys to uh realign your overall working capital and you know in terms of cash flows uh and 29:45 29 minutes, 45 seconds debt repayment how should we look at from a two-year perspective so uh Abdul first you're right that 29:52 29 minutes, 52 seconds there has been a very conscious effort to manage the overall balance sheet so whether it's collection of rece receivables or negotiating better 30:00 30 minutes payment terms with vendors or optimizing our inventory on all of those fronts as well as other allied factors like the GST credit refunds because we are next 30:09 30 minutes, 9 seconds net net exporters uh we've tried to ensure that all of them flow in and that's kind of helped improve the situation and the uh intent is obviously 30:18 30 minutes, 18 seconds to continue this momentum but I'm saying this with a lot of caution because we are in a volatile environment and uh 30:26 30 minutes, 26 seconds currently depending upon how the overall West Asia situation evolves, there may be a need to carry some extra inventory 30:33 30 minutes, 33 seconds or you know there may be some kind of working capital block that might happen. 30:37 30 minutes, 37 seconds So we'll have to try and see how we uh monitor the situation. Uh our net debt to AIA as we close this particular 30:46 30 minutes, 46 seconds financial year we were at 3.6 uh and uh we do expect to be remaining in this range uh basis a full year 30:55 30 minutes, 55 seconds number for next year as well. Though of course the long-term intent is to bring this down to close to one uh but because we have this ongoing capex uh which we 31:04 31 minutes, 4 seconds have announced uh we will see a slightly elevated levels uh currently in the immediate term. 31:11 31 minutes, 11 seconds Understood sir. Thank you and wish all the best. 31:16 31 minutes, 16 seconds Thank you. We take the next question from the line of Naven B from Nuama. Please go ahead. 31:24 31 minutes, 24 seconds Apologies uh for missing your opening remarks. Uh just wanted to confirm uh did we guide for uh sort of you know mid teams kind of revenue growth for FY27. 31:35 31 minutes, 35 seconds Did I hear that correct? 31:37 31 minutes, 37 seconds Yeah. So we've guided for an early to mid teams kind of growth with AITA growing faster and Pat growing minimally for FI27. 31:46 31 minutes, 46 seconds Got it. Got it. Thank you so much. 31:51 31 minutes, 51 seconds Thank you. We take the next question from the line of Voadi Palampel from Alara Capital. Please go ahead. 32:01 32 minutes, 1 second Hi, good morning. Um a follow-up question on the guidance um this early group uh is that in INR terms or constant currency? 32:11 32 minutes, 11 seconds That's in INR terms we know. 32:14 32 minutes, 14 seconds Okay. So INR if it stays at current levels uh 6 7% growth should come from just that. So the constant currency 32:22 32 minutes, 22 seconds would be that much less from the guidance. Can I assume so? 32:25 32 minutes, 25 seconds Correct. The only thing to note is that obviously when we did our uh uh estimates and budgets for next year the 32:32 32 minutes, 32 seconds overall currency uh INR was at a certain level lower than what it is today. So we already have some kind of uh uh natural 32:41 32 minutes, 41 seconds buffer that's got built in because the rupee depreciated further to the dollar. 32:46 32 minutes, 46 seconds Understood. Um what would be the capex uh number for 201? 32:52 32 minutes, 52 seconds So you know for FI26 the year that closed by we had guided for uh between 100 to 125 million and we closed at 32:59 32 minutes, 59 seconds about 94. So there's some spillover that will happen from the current year to the next. uh at this stage we are expecting 33:06 33 minutes, 6 seconds a capex of about uh 120 to 135 million for FI27. 33:11 33 minutes, 11 seconds Uh largely a part of it will be towards the Lexington expansion which is currently ongoing and this does not include what we have spent uh on the 33:20 33 minutes, 20 seconds catalog acquisition or in case we manage to do similar kind of deals uh that's not included in this. 33:27 33 minutes, 27 seconds Understood. And uh one last question on tax rate uh at the console level for the quarter it has kind of normalized to 33:33 33 minutes, 33 seconds about 25%. So uh has it normalized at the consolidated level or will it be fluctuating uh like last few quarters? 33:42 33 minutes, 42 seconds Yeah. So you know uh you know that just builds the narrative that we've always been saying that at scale we will have peak and compar competitive operating 33:51 33 minutes, 51 seconds margins uh which are you know in the high teens plus and similarly tax rates would be in the 24 to 25% range. Now 33:59 33 minutes, 59 seconds this uh as you can see historically we've had uh uh uh revenues and embitters more skewed towards H2 and 34:06 34 minutes, 6 seconds more specifically quarter 4 which is why you see this it's not fully normalized in the interim period you will see 34:12 34 minutes, 12 seconds elevated ETRs on a full year basis but as we gain scale across especially our overseas facilities it will move in the range of being 24 to 25%. 34:22 34 minutes, 22 seconds Okay. So if for for a 527 if I have to take a rough estimate uh would you be able to provide that for the full 34:31 34 minutes, 31 seconds I would just say that it will remain at an elevated level because for us the tax actually depends upon the geographical mix. We are present in multiple 34:39 34 minutes, 39 seconds jurisdictions where uh our effective tax rates are different uh and in some cases we are profitable some cases we are not. 34:45 34 minutes, 45 seconds So it depends upon that mix. So I'll just say that it will remain at elevated levels. Got it. Thank you very much. 34:55 34 minutes, 55 seconds Thank you. 34:56 34 minutes, 56 seconds We take the next question from the line of Yasir Lakraala from M3 Investment. Please go ahead. 35:04 35 minutes, 4 seconds Hello. Uh am I audible? Yes. Yes. Go ahead. 35:08 35 minutes, 8 seconds Uh hi. Uh you know uh thanks to the team for allowing me to ask questions. uh you know uh uh basically uh what percentage 35:17 35 minutes, 17 seconds of our say phase three projects I think we've got 25 odd projects uh do we expect to commercialize over the next uh 35:25 35 minutes, 25 seconds couple of years and uh if you could throw some uh light on would this be uh you know commercialization based out of 35:33 35 minutes, 33 seconds India or uh you know overseas facilities. 35:38 35 minutes, 38 seconds So I would as a rule of thumb assume that if it's in the phase three window in any given year that that would become there would be decision on the the 35:46 35 minutes, 46 seconds launch within a three-year window some shorter some longer and from a geographic mix perspective we are 35:54 35 minutes, 54 seconds reasonably nicely distributed between our different sites and different geographies and so there's no single large concentration. Um the only other 36:02 36 minutes, 2 seconds point I'd make is that the uh overseas sites particularly the ones in the US well I guess overseas sites in general are are much more a percentage of on 36:10 36 minutes, 10 seconds patent work but we do have a we do have contribution from India as well for this. So sorry I can't say it's only one place. It's actually reasonably broad-based. 36:21 36 minutes, 21 seconds And uh could you also probably uh uh you know uh give us some color on uh you know on our uh our peptide and the 36:29 36 minutes, 29 seconds peptide opportunities that we have after we acquired Hemo and uh you know and uh our strategic acquisition of uh 36:37 36 minutes, 37 seconds strategic deal in Yapan like how do you evaluate the uh success of these capabilities and what would be say our 36:44 36 minutes, 44 seconds long-term targets at Bramal to you know see uh get these acquisitions to some sort of our internal metrics of success 36:53 36 minutes, 53 seconds like could you probably uh give us some color on that? 36:59 36 minutes, 59 seconds So we don't break out individual offerings separately especially after they're fully integrated into our standalone financials such as our 37:07 37 minutes, 7 seconds peptides. However, if we look at it since acquisition, that offering has grown substantially and the profitability is meaningful and we've 37:16 37 minutes, 16 seconds had great addition in overall revenue and incremental IBIDA and EBIT margin expansion. Historically, when it was 37:24 37 minutes, 24 seconds acquired, it was largely a generics offering and that continues to be the single largest contributor to revenue and a big driver of growth. However, we 37:33 37 minutes, 33 seconds have been working hard to bring the site up to uh the expectations for uh CDMO customers and we're now actively also 37:41 37 minutes, 41 seconds selling that offering for them. Given the size of the facility and the capabilities, we would anticipate it would be more suited towards the biotech 37:49 37 minutes, 49 seconds customer than the large pharma. However, um we do expect it to continue to grow in the the medium term. with within 37:57 37 minutes, 57 seconds respect to Yapan we find that having this offering is an important element to offer in the bouquet for someone wanting 38:04 38 minutes, 4 seconds bio conjugation or ADCs and so we continue to remain interested and excited about being able to offer that from a capability perspective it is uh 38:13 38 minutes, 13 seconds somewhat scale limited and so it's more for kind of that early first phase one post IND offering and that's the sweet 38:22 38 minutes, 22 seconds spot for what we can do at that site with that investment and we continue to expect to offer that and uh grow with them together. 38:30 38 minutes, 30 seconds And just building on that, Peter, uh you know, the fact that we've had such a you know, you know, legacy of being in the 38:37 38 minutes, 37 seconds ADC space uh uh since this you know uh sector is seeing the space in biotech is 38:44 38 minutes, 44 seconds seeing uh you know lot of interest from innovators and investors. Any thoughts of probably uh you know maybe scaling 38:53 38 minutes, 53 seconds the up and up so that we could probably do you know instead of just being a phase one uh uh provider maybe eventually if you do have any uh 39:01 39 minutes, 1 second commercial outcomes would that uh uh possibility exist with us or would would 39:08 39 minutes, 8 seconds that molecule eventually go to someone who has those uh uh you know large scale facilities in uh uh especially in the 39:16 39 minutes, 16 seconds map space. We will continue to evaluate the customer demand for the offering in this geography and also this is being 39:24 39 minutes, 24 seconds done in partnership with the current entrepreneurs that we are investment partners with and we would evaluate that choice as it we believe it presents. So 39:33 39 minutes, 33 seconds as I mentioned earlier in the remarks there are substantial map providers that are providing very large scale capabilities and so we would need to 39:40 39 minutes, 40 seconds find the right niche for for this offering and we would continue to look at that to see if and where it's appropriate. Sure. And just uh lastly on 39:49 39 minutes, 49 seconds our uh uh CH business uh you know what has been say the pricing versus say 39:57 39 minutes, 57 seconds volume growth across anesthesia and the non-anesthesia bit of a portfolio and uh as a uh team also what are your thoughts 40:05 40 minutes, 5 seconds on growing the non-inhalation portfolio right and uh you know because uh predominantly almost about twothirds of 40:12 40 minutes, 12 seconds our business are from uh uh the anesthesia business so How do we sort of increase the non-anesthesia piece of business and 40:20 40 minutes, 20 seconds what are we doing to sort of do that? If you could uh you know give us some insights on that. 40:26 40 minutes, 26 seconds So in the short term uh meaningful if you break our business into sorry into segments and I think we have some inner investor presentation some broad 40:35 40 minutes, 35 seconds segmentation. So you're you're not asking about inhalation you're talking about other. So for other yeah the other for other there is injectable pain. This 40:43 40 minutes, 43 seconds is a a meaningful franchise for us where we've had primarily been supply limited due to our CDMO partners that make these products for us. And so we're working 40:52 40 minutes, 52 seconds very hard with those partners to try and address their issues with making the product for us and our customers. And we anticipate as our CDMOs address those 41:01 41 minutes, 1 second issues that we should be able to not be supply constrained and there should be some growth potential in that product offering uh either this year or next year. And but it is a mature product. 41:12 41 minutes, 12 seconds It's been around for a long time and so we would see that to be modest growth. 41:16 41 minutes, 16 seconds The second one would be our ITT franchise which is primarily the specialy offering we have in the US for intratheal blephin and and morphine and 41:24 41 minutes, 24 seconds in that case we're reasonably high market share and so we'd anticipate that to be more about maintaining revenue um which then leads to the third area for 41:32 41 minutes, 32 seconds growth which would be our our pipeline of new offerings and I think as we discussed in our investor day and subsequent communications we've embarked 41:39 41 minutes, 39 seconds on a on a plan to add new and also mentioned in her comments to add new products to the portfolio and those would be more specialty differentiated 41:48 41 minutes, 48 seconds or 505b2 type category products and the the investment and return horizon on that would be more in the the later 41:55 41 minutes, 55 seconds years in our in our FY30 plan. And so in the near term from a new product offering perspective, that's why we're particularly excited with the catalog 42:03 42 minutes, 3 seconds acquisition because it brings uh current year FY27 revenues uh from an already onmarket product. And so it's going to 42:11 42 minutes, 11 seconds be a combination of um selective opportunistic uh additions to the onmarket portfolio like what we did with 42:19 42 minutes, 19 seconds Kellogg if other ones present at a reasonable value uh along with the um portfolio additions through 42:26 42 minutes, 26 seconds co-development and licensing of products that would be more differentiated in the back end of the window and then maximizing our potential from the 42:33 42 minutes, 33 seconds injectable pain through the partnership with CMOs that are helping us there. So, it's a bit of a multi-part answer and it depends on the year, but we anticipate 42:41 42 minutes, 41 seconds to have significant growth in our nonIA business over the 5-year uh FY30 horizon that we described and it's going to be 42:49 42 minutes, 49 seconds not single offering there, but it's going to be the combination that will drive the the growth in the nonIA portfolio. 42:57 42 minutes, 57 seconds Yeah. And uh you know lastly Peter if you could just uh shed some light on our you know one uh you know I think of the migraine drug where we had some detos 43:06 43 minutes, 6 seconds issues. Uh uh do you expect maybe over the next couple of years to be at the levels before the uh you know detocking 43:15 43 minutes, 15 seconds situation occurred and have we lost any share in supplies as a manufacturing partner to the other supplier? Uh if you could you know uh share some commentary on that. 43:26 43 minutes, 26 seconds I think we continue to be told by that customer that they prefer what we do for them when they have a need. But 43:34 43 minutes, 34 seconds obviously uh any customer in that segment would have multiple suppliers. 43:37 43 minutes, 37 seconds You can read the XM data. Our our anticipation is that if you do an outside in look at the XM data and the underlying demand that there's probably 43:45 43 minutes, 45 seconds still excess stock in the system and so we anticipate when the stock gets to normalized levels that we would get orders again but we would have to wait 43:54 43 minutes, 54 seconds for those orders to appear and then we can and prosecute them. Sure. Sure. Thanks. Thanks a lot Peter. 44:01 44 minutes, 1 second Thanks a lot. 44:03 44 minutes, 3 seconds Thank you ladies and gentlemen. In the interest of time and fairness to others, we request you to restrict to two questions per participant. 44:12 44 minutes, 12 seconds We take the next question from the line of Harit Ahmed from Aendas Park. Please go ahead. 44:19 44 minutes, 19 seconds Good morning. Uh thanks for the opportunity on the new Amsterdam partnership uh the supply of obese rapid and demand uh the combination product. 44:30 44 minutes, 30 seconds So uh for this opportunity what are the timelines that we're looking at uh and then the capex that we are incurring uh 44:36 44 minutes, 36 seconds specifically for this uh and also if you could comment a bit on the the commercial side of things for this 44:44 44 minutes, 44 seconds combination product specifically uh in terms of the sales potential in this particular case you have the 44:51 44 minutes, 51 seconds benefit of the customer being announced as being our customer uh and also them being a public company and then further 44:59 44 minutes, 59 seconds them being covered by very well-reputed analysts. So my strong suggestion would be is that you look at analyst reports for that end customer, looking up the 45:06 45 minutes, 6 seconds combination you mentioned and seeing where they predicted. They'll be much more uh informed and uh uh educated in what they can communicate than us 45:15 45 minutes, 15 seconds because we're we're obviously bound by our confidentiality agreements on details like what you mentioned in terms of capex. It was largely customerf 45:22 45 minutes, 22 seconds funded and that's complete. the suite that was needed to be made for them is is up and running and that's the announcement that you're let you know that we have this uh arrangement and so 45:31 45 minutes, 31 seconds there's no new significant capex spending plan to support this and we're looking forward to them continuing to 45:38 45 minutes, 38 seconds generate good data to allow them to get the regulatory actions that we are excited about along with them so we can start serving patients uh with them 45:49 45 minutes, 49 seconds thanks for that and on the 90 million expansion at Lexington and Riverview you uh any updates uh on on those projects? 45:57 45 minutes, 57 seconds Uh what's the timelines that we're looking at in terms of uh commissioning and beyond these two projects? Uh how 46:04 46 minutes, 4 seconds does our capex pipeline look? Uh should we expect a period of uh consolidation beyond these two capex projects? 46:14 46 minutes, 14 seconds I think the riverview one is largely complete and is uh sort of serving clients as we speak. 46:20 46 minutes, 20 seconds uh the Lexington uh will be CY27 uh the latter half of CY27 before 46:27 46 minutes, 27 seconds completion of that. I think there will um there will continue to be both uh 46:35 46 minutes, 35 seconds obviously depreciation and maintenance capex but also growth capex uh as we go forward. 46:44 46 minutes, 44 seconds The last one of the uh you know beyond the on patent commercial manufacturing segment within the CDMO uh business uh 46:52 46 minutes, 52 seconds can you comment a bit on the other verticles like the discovery services development services and and and the generic API segment where we've seen 47:01 47 minutes, 1 second some pricing pressure in recent quarters. How is that looking currently? 47:07 47 minutes, 7 seconds So the the biggest driver of growth of the ones you listed will remain our development services which will be the on patent work for clients that are not yet commercially approved and that's 47:16 47 minutes, 16 seconds also linked to our differentiated offerings and so that remains a an area of focus and and and meaningful growth. 47:24 47 minutes, 24 seconds We do anticipate uh growth in our um API generics business also although it'll be more modest and but we do we do have 47:31 47 minutes, 31 seconds reasons to believe that our current prior seeding efforts where we put you know smaller quantities with companies that are looking to add sources or add 47:39 47 minutes, 39 seconds geographies or add products should show us get us benefit of growth in the current fiscal year and we have new API generics that we're developing that have 47:48 47 minutes, 48 seconds market demand for and so we anticipate growth continuing in the API generics business albeit at a modest level. Um, 47:55 47 minutes, 55 seconds and then finally for discovery, it's not a material contributor to our revenue. 47:59 47 minutes, 59 seconds And while we do see benefit and follow the molecule, and it's a profitable offering for us, we it's more just compared to some maybe some other 48:06 48 minutes, 6 seconds players, it's more modest. We're we're more historically uh uh later phase in the in the clinic in terms of what we offer. 48:16 48 minutes, 16 seconds Thank you. That's all. 48:20 48 minutes, 20 seconds Thank you. We take the next question from the line of Dar Manuhan from Motilos while Financial Services Limited. Please go ahead. 48:28 48 minutes, 28 seconds Yeah, thanks for the opportunity. Uh, so just on the CDMO side while the RFPs have improved considerably. Uh, there 48:36 48 minutes, 36 seconds has been significant capability as well as capacity increases by the competition. 48:41 48 minutes, 41 seconds So how do you see that factor playing out in our case? Maybe in terms of pricing or in terms of the size of contract. 48:49 48 minutes, 49 seconds That's my first question. 48:52 48 minutes, 52 seconds Sorry, I the line was a bit fuzzy and so what was the comment you made about the competitors before I answer? I was make sure I heard what you were trying to reference there. 49:04 49 minutes, 4 seconds Hello. Hello. Hello. Am I audible? Am I audible now? 49:09 49 minutes, 9 seconds Yeah. Can you try again and just uh repeat the pro? 49:13 49 minutes, 13 seconds So what I was trying to ask is that while the RFPs have increased uh considerably over the last 6 months uh what we see is that uh there has been 49:22 49 minutes, 22 seconds reasonable increase in the capacity capability by the competition as well. 49:26 49 minutes, 26 seconds So is that having an impact in terms of let's say the pricing of the contract as well as uh maybe the volume uh per say 49:34 49 minutes, 34 seconds let's say per vendor supplier if you can throw some light on that. So I would say that uh in a post after the biotech 49:42 49 minutes, 42 seconds funding crashed post the COVID boom there was a general increase in in competitive intensity that we 49:49 49 minutes, 49 seconds experienced across the set of offerings we have. And we really did a lot of looking as to how we need to up our game 49:56 49 minutes, 56 seconds so that we can get our win rates to go up. And I think what you may not have captured from Nandini's comments is that we actually saw our win rate increase 50:04 50 minutes, 4 seconds last year uh versus the prior year. And we think that's because of a couple of factors. Uh the first is we think we 50:12 50 minutes, 12 seconds have the right combination of assets in the right locations. The second is that we've done a lot of work on strengthening our business development 50:19 50 minutes, 19 seconds organization to be we think more align with our FY30 growth goals. And so we did substantial enhancements to the number of people but also how it's 50:27 50 minutes, 27 seconds organized and how we go to market. And the third one is that uh while price is obviously an important factor, it's rarely number one, two or three in a 50:35 50 minutes, 35 seconds buying decision. And clients that really are good at buying would look at the full set of factors. And that's where 50:43 50 minutes, 43 seconds again Nin's comment about our promoter score of 60. That's kind of a lagging indicator of a lot of work that goes into how you interact with clients and 50:52 50 minutes, 52 seconds how you deliver for clients such that at the end they really are promoters for your services and that they would be willing to recommend you to others. And 51:00 51 minutes so it's very uh frankly easy to buy a bunch of kit and put it in a factory. 51:05 51 minutes, 5 seconds It's very hard to organize how you operate that kit with a high performing team such that customers are delighted and you don't have any regulatory 51:13 51 minutes, 13 seconds actions or OAIS. And so we think that's the combination of reasons that we've seen our win rate actually go up despite competitive intensity increasing and we 51:21 51 minutes, 21 seconds are not going to rest on our laurels. We will not take anything for granted and we're going to be very aggressive about uh the expectation for increased 51:28 51 minutes, 28 seconds competition but we think that we know what we have to do to win and we're going to execute on that. 51:36 51 minutes, 36 seconds call it sir and just on this the innovation related onetent uh business for us is largely do which geographies 51:45 51 minutes, 45 seconds now in 26 the the innovation related businesses broad-based across our network we we 51:52 51 minutes, 52 seconds have very mo most of our sites and especially the sites that we're investing in are innovationoriented and that's part of our multi-year pivot from 52:00 52 minutes life cycle management to innovation support. So most of our sites are innovation oriented and they all generally are contributing to the pivot. 52:11 52 minutes, 11 seconds Good. And just lastly with uh with which increase in this working capital requirement to address maybe the global turmoil as well as the amount that would 52:20 52 minutes, 20 seconds be required to pay for canop. So what kind of net that we would see for FI27? 52:26 52 minutes, 26 seconds Uh so currently we are at 3.6 six we expect to uh based on the guidance that Nandini shared we expect to remain 52:34 52 minutes, 34 seconds rangebound in that level at about 3.6 six through FI27. There may be ups and 52:40 52 minutes, 40 seconds downs intermittently depending upon you know how our overall profitability pans out and how we spend our capex but 52:48 52 minutes, 48 seconds on a fullear basis that's the range that we are targeting. 52:52 52 minutes, 52 seconds So on absolute basis if you could just um considering this uh ratio so let me put it that way that you know 53:00 53 minutes that's the range that we're looking for 3.6 six times dead to a bit. Okay. All right. That's all. Thank you. 53:10 53 minutes, 10 seconds Thank you. We take the next question from the line of Alankar Garud from Kotak Institutional Equities. Please go ahead. 53:18 53 minutes, 18 seconds Hi, good morning everyone. Uh first question, which are the RO markets towards which supplies have started from Big One and how's the pricing environment in these markets? 53:33 53 minutes, 33 seconds I think uh it's really kind of that well India would be our largest RO market. We've 53:40 53 minutes, 40 seconds already supported from like um I'm just looking at our list here. It's India, UAE, Cambodia, Kenya, Sri Lanka, Uganda. 53:48 53 minutes, 48 seconds These will all be price competitive markets and but we believe that dig achieve its target market margins with what we supply from there to those 53:56 53 minutes, 56 seconds locations and we anticipate countries such as examples like Bangladesh, Brazil, Malaysia, Russia, South Africa 54:03 54 minutes, 3 seconds being uh next in line. So these are typically um markets where pricing is more intense and we've set up our cost 54:12 54 minutes, 12 seconds structure to compete with China in those markets. 54:16 54 minutes, 16 seconds Has there been any improvement Peter in the pricing environment at all especially given uh the last two months 54:23 54 minutes, 23 seconds the disruption in supply solvents etc or the situation remains stable as far as pricing is concerned? 54:31 54 minutes, 31 seconds As you may know, this um particular product that we're describing has a very uh product specific supply chain and 54:40 54 minutes, 40 seconds it's you know it's not really solventdriven per se and regardless we have not at the moment seen pricing 54:48 54 minutes, 48 seconds increase. Typically prices stay where they're at or go down. Um, but we've uh maybe seen perhaps a an ability for us 54:58 54 minutes, 58 seconds to start winning contracts in these markets, which we'll just have to see how it plays out. It's too early, honestly, to ascertain pricing movements 55:05 55 minutes, 5 seconds only a month or two after a conflict like this in a in a product with a very product specific value chain. 55:12 55 minutes, 12 seconds As you know, our hedgeh facility makes the the key input for this and then we we're reasonably backward integrated. 55:20 55 minutes, 20 seconds Got it. 55:21 55 minutes, 21 seconds Second question is how are you assessing the impact of tariffs on the on CDMO segment? 55:28 55 minutes, 28 seconds I think tariffs should be a net positive. Um obviously the US facilities will be exempt from tariffs and you will 55:36 55 minutes, 36 seconds see uh there's a general onshoring trend. Um the UK facilities also see a 55:43 55 minutes, 43 seconds zero um nil rate tariff under the UK US trade agreement. So therefore and uh we should 55:51 55 minutes, 51 seconds see over I think again increased demand there. Uh for India generic products are excluded but innovation related work is 56:00 56 minutes at reasonable levels and it'll depend on the outcome of negotiations between the customers and the US government. Uh and 56:08 56 minutes, 8 seconds there's a 121 180day window for the customers to reach uh agreements and for CHD and PCH there's no impact. 56:17 56 minutes, 17 seconds The only other two points the only other two points to add is that there's also an opportunity if India were to be interested to discuss the FTA with the 56:24 56 minutes, 24 seconds US which is what other countries did and that could be a second way out and then a third way out is that many of our customers would be buying what we make 56:33 56 minutes, 33 seconds in in one of the uh countries that has already got an FTA uh and they may do f further valuation steps before it goes 56:41 56 minutes, 41 seconds to the US end market. So there, you know, the MFN way out, the FTA way out, and then the uh intermediate country way out, some combination of those we 56:50 56 minutes, 50 seconds believe should conclude, we hope, uh before the end of the uh the period. 56:57 56 minutes, 57 seconds Got it. Just one final followup here. uh assuming the FDA is not signed and uh those agreements with the US by the 57:05 57 minutes, 5 seconds remaining companies are not signed. Uh how should we look at uh the ability to pass on for the India manufacturer uh 57:14 57 minutes, 14 seconds for the India sites? How do you assess the ability to pass on the the incremental hikes to the clients? Are clients more receptive in your initial 57:22 57 minutes, 22 seconds discussions or this is too early to comment on at this point of time? 57:26 57 minutes, 26 seconds I think it's too early. there's too many unknowns at this stage. So, um I would just we we would need to kind of see how the different factors that are I would 57:35 57 minutes, 35 seconds say above our company level situation play out and I think it'll become more clear as we get closer to the September date. I I wish I could tell you more, 57:43 57 minutes, 43 seconds but this is one of those things where we just have to let the cards play. Fair enough. That's it from my side. 57:50 57 minutes, 50 seconds Thank you. 57:53 57 minutes, 53 seconds Thank you. We take the next question from the line of Dwang Sha from DD Enterprise. Please go ahead. Yeah. Am I audible? 58:01 58 minutes, 1 second Yes. 58:03 58 minutes, 3 seconds Yeah. Uh the question is are we going to see any stable quarters coming up upwards because uh in one quarter we are 58:12 58 minutes, 12 seconds posting profits in one quarter we are posting uh like loss. We are not coping up with that after the de merger. I'm 58:21 58 minutes, 21 seconds not getting like I'm not understanding like are we into the business of all these types or we are like in a business of a CDMO where the consistency should be there. 58:32 58 minutes, 32 seconds Dwank uh while that's the intent that we should be having more stable quarters unfortunately the nature of the business 58:39 58 minutes, 39 seconds is such that we have been seeing volatility. Now if you go to the other two smaller businesses which is our critical care and our uh consumer 58:47 58 minutes, 47 seconds products business they are relatively stable with a more equal phasing across the quarters. It's a CDMO business which 58:55 58 minutes, 55 seconds is 60% of what we do where you see a significant skew. This has not just been after the de merger. It has also been before the de merger. It's just that now 59:04 59 minutes, 4 seconds when we are separate you have better visibility to how it plays out. U and yes uh you do see lumpy quarters 59:11 59 minutes, 11 seconds unfortunately even in FI27 this trend will be there where CDMO will be more H2 weighted with a larger chunk in quarter 59:18 59 minutes, 18 seconds 4 so that situation doesn't change all our efforts are in the direction to have a more even quarter but it largely depends upon when the customers buy from 59:27 59 minutes, 27 seconds us and that's what uh determines how the phasing pans out and that's what determines how the profitability comes up. 59:34 59 minutes, 34 seconds Okay. So is there any plan to reduce the debt? 59:39 59 minutes, 39 seconds Uh the thing comes that promoter holding is not increasing. 59:45 59 minutes, 45 seconds So if you could please repeat the last statement. Uh promoter holding is not increasing. The promoter skill in the 59:52 59 minutes, 52 seconds game is just 30 or 35%. It's not beyond that. Right? And uh the thing comes at like the uh depth is very much high. If 1:00:01 1 hour, 1 second I'm not wrong, it's 3.5% or something like that. 3.5. 1:00:06 1 hour, 6 seconds Yeah. Yeah. Yeah. And and you're right, Damon, that 3.5 is the level at which we're operating, but it's largely driven by some of the investments which have 1:00:14 1 hour, 14 seconds been ongoing. Uh and these are the plan targeted investments to expand capacity, scale, and capability at sites which we 1:00:21 1 hour, 21 seconds believe will be part of the uh longrange plan growth drivers. So the investments are in that direction and we've said 1:00:28 1 hour, 28 seconds that on a long-term basis uh we will have net debt to EIA come down to one and we're also and mentioned that in the interim period it will remain elevated 1:00:36 1 hour, 36 seconds and that's what you're seeing play out at uh at this stage. 1:00:40 1 hour, 40 seconds That's fine that's all from my side and uh all the best for the future. Thank you. 1:00:49 1 hour, 49 seconds Thank you. 1:00:50 1 hour, 50 seconds We take the next question from the line of Venote Suhan Lal Jan from WF Advisor. Please go ahead. 1:00:57 1 hour, 57 seconds Yeah, good morning madam. I refer to the Q4 numbers which are muted. So are the 1:01:05 1 hour, 1 minute, 5 seconds annual financial year 2526 numbers. The turnover remains skewed in favor of the last quarter of the years. a harmful 1:01:14 1 hour, 1 minute, 14 seconds phenomena highlighted by over the several quarters and years by me. But in this context, I asked two questions. 1:01:24 1 hour, 1 minute, 24 seconds Would 2627 be any different? You have recent you have just said that CDMO may remain similar but I want to clarify 1:01:33 1 hour, 1 minute, 33 seconds whether the overall business in terms of the turnover would it be spread over the quarters in any different manner and 1:01:43 1 hour, 1 minute, 43 seconds secondly the exceptional charge of 175 crores in Q4 was neither hinted earlier 1:01:50 1 hour, 1 minute, 50 seconds nor has been explained in detail. Please convey what caused this exceptional intangible R&D asset write off and how you would avoid this in the future. 1:02:03 1 hour, 2 minutes, 3 seconds Okay. I think one is overall we I think we have said that for next year we expect early to mid teams growth uh 1:02:11 1 hour, 2 minutes, 11 seconds across each of the businesses. Um and this is folier the CDMO is unfortunately 1:02:17 1 hour, 2 minutes, 17 seconds still will be back weighted to H2 as the ve said that that is driven by the timing of when the clients uh and 1:02:26 1 hour, 2 minutes, 26 seconds customers want delivery um and that's when we can recognize the revenue um that's part of the nature of the 1:02:34 1 hour, 2 minutes, 34 seconds business the other two businesses will see I think consistent growth across um and I think on the 1:02:43 1 hour, 2 minutes, 43 seconds I think your second question was on the intangibles. Yes. Yeah. And I'll leave that to Vic. 1:02:50 1 hour, 2 minutes, 50 seconds Yeah. So on the intangibles, I've just clarified on the call that there were certain uh intangible assets which were under development. uh where the overall 1:03:00 1 hour, 3 minutes macro and market situation did change versus what was originally envisaged and since we are prioritizing capex as a part of our longrange plans we are 1:03:08 1 hour, 3 minutes, 8 seconds ensuring that they are going in the areas which give the returns as anticipated and therefore to prevent any further impact [clears throat] we 1:03:17 1 hour, 3 minutes, 17 seconds decided to cut further investments on these products and therefore impair it uh uh as a result of these realities 1:03:24 1 hour, 3 minutes, 24 seconds and you would avoid such such such ventures in the future That's the endeavor always. But there are certain factors if the market conditions do 1:03:32 1 hour, 3 minutes, 32 seconds change then there will be some uh things but uh uh in general that's the larger principle. 1:03:39 1 hour, 3 minutes, 39 seconds Very well. Thank you. 1:03:43 1 hour, 3 minutes, 43 seconds Thank you ladies and gentlemen. We take that as the last question and conclude the question and answer session. I now have the conference over to GageN for his closing comments. 1:03:54 1 hour, 3 minutes, 54 seconds Uh thank you. Thank you very much. We hope that we were able to answer most of your questions. In case you have any follow-up questions or any clarification that you need, please feel free to reach 1:04:03 1 hour, 4 minutes, 3 seconds out to us. Thank you and have a good day. 1:04:06 1 hour, 4 minutes, 6 seconds Thank you. On behalf of Pyramal Pharma Limited, that concludes this conference call. Thank you for joining us.