Syngene International Ltd — Q4 FY26

Syngene International Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=3ehrQB9L4ns Published: 13 days ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to Singin International's fourth quarter and FY 2026 financial results 0:09 9 seconds conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:19 19 seconds Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that 0:27 27 seconds this conference is being recorded. I now hand the conference over to Miss Nandini Agarwal. Thank you and over to you. 0:36 36 seconds Good afternoon to everyone. Thank you for joining us on this call to discuss Singene's fourth quarter and full year results for financial year 2026. 0:47 47 seconds to discuss the financial and business performance for the period. We have on this call today Miss Kiran Majunar Shaw 0:55 55 seconds Sing's executive chairperson, Mr. Peter Brains, managing director and chief executive officer and Mr. P and Mr. 1:04 1 minute, 4 seconds Deepak Jen, chief financial officer. 1:06 1 minute, 6 seconds After the opening remarks, they will be happy to answer any questions you may have. Before we begin, I would like to 1:13 1 minute, 13 seconds caution that comments made during this conference call today will contain certain forward-looking statements and 1:21 1 minute, 21 seconds must be viewed in relation to the risk pertaining to the business. The same power clause indicated in the investor 1:28 1 minute, 28 seconds presentation also applies to this conference call. The replay of this call will be available for the next few days and the transcript will be made 1:36 1 minute, 36 seconds available. With this, I would now turn the call over to our managing director and CEO, Mr. Bait. 1:44 1 minute, 44 seconds Thank you, Nandini. Good afternoon, everyone, and thank you all for joining us on the call today. Before I begin my 1:51 1 minute, 51 seconds remarks, I would like to introduce and welcome Kieran to this call in her new role as the executive chairperson of 1:59 1 minute, 59 seconds Singi. We are very pleased to have Kieran's leadership and guidance at the executive level as the company 2:06 2 minutes, 6 seconds transitions into its next phase of growth. Kieran, may I invite you uh to share your opening remarks. 2:15 2 minutes, 15 seconds Thank you, Peter. 2:17 2 minutes, 17 seconds I'm pleased to be back as executive chairperson of Singene International uh at such a pivotal point in its 2:26 2 minutes, 26 seconds journey, one that presents both near-term challenges and significant long-term growth opportunities. 2:37 2 minutes, 37 seconds FY26 closed with a muted topline growth of 3% yearonear. However, it is 2:44 2 minutes, 44 seconds important to note that Q4 delivered a strong 13% sequential growth which reinforces our confidence that the 2:53 2 minutes, 53 seconds underlying momentum of the business remains intact. 2:58 2 minutes, 58 seconds The impact of Librella on our FY26 performance has been significant and it is likely to continue to influence 3:07 3 minutes, 7 seconds growth in FY27 as well. At the same time, FY27 will be a transition year for 3:15 3 minutes, 15 seconds Singene with important leadership changes already underway to position, as Peter said, this company for its next 3:24 3 minutes, 24 seconds phase of growth, particularly in CDMO, biologics, and emerging AI enabled service lines. 3:34 3 minutes, 34 seconds We at Singene are consciously building new capabilities that move us beyond a traditional services model toward uh 3:44 3 minutes, 44 seconds towards a more value added uh technology-led partnership model. Our investments in AI and digital 3:52 3 minutes, 52 seconds technologies are aimed at improving speed, productivity, predictability, and 3:59 3 minutes, 59 seconds scale across discovery, development, and manufacturing. 4:05 4 minutes, 5 seconds And these capabilities will not only drive operational efficiencies but will also help us create 4:13 4 minutes, 13 seconds differentiated offerings for our global customers. 4:18 4 minutes, 18 seconds Given the current geopolitical uncertaintities and the near-term impact of Librella, we expect a broadly flat performance for 4:28 4 minutes, 28 seconds FY27 while maintaining EBIDA margins in the mid20s through disciplined cost 4:35 4 minutes, 35 seconds management and sharper operational executions. 4:40 4 minutes, 40 seconds We also expect to start FY27 on a muted note with H2 of HY 20 of FY27 to be 4:48 4 minutes, 48 seconds meaningfully stronger than H1 with growth weighted towards the second half as new contracts ramp up and business momentum improves. 4:59 4 minutes, 59 seconds We believe that FY27 will be a year of strategic reset and execution with a 5:06 5 minutes, 6 seconds healthy pipeline of deal flows that will translate into stronger growth from FY28 onwards. 5:15 5 minutes, 15 seconds Now with those initial comments, let me hand it back to Peter for a more detailed commentary on the business 5:22 5 minutes, 22 seconds performance for the year gone by. Over to you Peter. 5:27 5 minutes, 27 seconds Thank you Karen and good afternoon again and thank you all for joining us on the call today. Let me start with the fourth 5:34 5 minutes, 34 seconds quarter where revenue from operations was 1,37 core reflecting year-on-year growth of 2% and sequential growth of 13%. 5:48 5 minutes, 48 seconds Operating EBITD DAR for the quarter stood at 303 core with a margin of 29% 5:56 5 minutes, 56 seconds while reported profit after tax before exceptional items was 153 cr. 6:04 6 minutes, 4 seconds Singene's fullear revenue from operations grew 3% and overall performance was in line with our revised guidance. 6:15 6 minutes, 15 seconds While the overall numbers reflect the continuing impact from a single large molecule biologics client, our 6:22 6 minutes, 22 seconds underlying business continued to show steady momentum. 6:27 6 minutes, 27 seconds Deepac will provide more details on the financials, but I would like to highlight that Singene generated a 6:34 6 minutes, 34 seconds healthy 521 Core in free cash during the year with a closing net cash balance of 6:43 6 minutes, 43 seconds 1,800 Core, reflecting the ongoing robustness of our operating model and disciplined 6:51 6 minutes, 51 seconds execution globally. Pharmaceutical and biotechnology pipelines are increasingly 6:59 6 minutes, 59 seconds shifting towards novel modalities such as peptides, antibbody drug conjugates and oligoucleucleotides. 7:08 7 minutes, 8 seconds Industry estimates indicate that these advanced modalities now account for OT for over 40% of clinical pipelines 7:18 7 minutes, 18 seconds and are growing at a materially faster pace than traditional small molecules reflecting their ability to address complex disease targets. 7:28 7 minutes, 28 seconds This is driving demand for partners who can offer integrated end-to-end capabilities across these platforms. 7:37 7 minutes, 37 seconds Anticipating this shift and building on our existing capabilities in biology and biootherrapeutics discovery, we have 7:46 7 minutes, 46 seconds invested ahead of the curve in strengthening our capabilities in these modalities. 7:52 7 minutes, 52 seconds During the quarter, we commenced operations at our state-of-the-art antibbody drug conjugate discovery 7:59 7 minutes, 59 seconds laboratory, which is designed to support early stage research. 8:04 8 minutes, 4 seconds This facility complements and integrates with our existing antibbody drug conjugate development and manufacturing 8:12 8 minutes, 12 seconds capabilities enabling a seamless pathway from discovery through to scaleup and production. 8:20 8 minutes, 20 seconds Turning now to our CDMMO business, we are encouraged by the acceleration we are seeing in our pipeline buildup. 8:29 8 minutes, 29 seconds In our unit 3 biologics facility in Bengaluru, we have seen increased client interactions from large farmer and 8:38 8 minutes, 38 seconds emerging biotechnology companies. During the quarter, commercial manufacturing in biologics is inherently a long cycle 8:47 8 minutes, 47 seconds business where client engagement typically begins with process research and development followed by development 8:55 8 minutes, 55 seconds works, clinical batch production and ultimately commercial supplies. Within this framework, we are seeing 9:03 9 minutes, 3 seconds encouraging interest in our integrated capabilities supporting a healthy pipeline across different stages of the value chain. 9:13 9 minutes, 13 seconds At our Bay View Biologics facility in the United States, preparations are progressing well and we are actively 9:21 9 minutes, 21 seconds engaging with prospective customers as we move toward operationalization of the site this year. 9:29 9 minutes, 29 seconds Stepping back to reflect on the full year, I will emphasize again the key structural balance we are addressing 9:36 9 minutes, 36 seconds between the headwind related to Labrella and the steady growth of the underlying business. 9:43 9 minutes, 43 seconds Over the course of the year, we have taken several important steps to strengthen our mid and long-term positioning. 9:51 9 minutes, 51 seconds A key highlight was the extension of our long-standing partnership with Bristol Meers FIB, now extending through to 2035. 10:00 10 minutes This expanded agreement broadens the scope of our collaboration across the drug development life cycle spanning 10:07 10 minutes, 7 seconds discovery, translational sciences, pharmaceutical development, manufacturing and clinical research and 10:15 10 minutes, 15 seconds reflects the depth and confidence built up over many years in this collaboration. 10:23 10 minutes, 23 seconds We have also continued to invest in enhancing our manufacturing capabilities in our small molecule platform. We 10:31 10 minutes, 31 seconds commissioned a new commercial scale facility for liquid fil hard gelatin capsules strengthening our oral solid 10:39 10 minutes, 39 seconds dosage capability enabling us to support increasingly complex formulations 10:47 10 minutes, 47 seconds with much greater precision and reliability in our large molecule biologics platform and as I have touched on earlier we've 10:56 10 minutes, 56 seconds expanded our Bengaluru facility with the addition of a GM MP bio conjugation suite enabling fully integrated 11:04 11 minutes, 4 seconds end-to-end manufacturing of antibbody drug conjugates. 11:09 11 minutes, 9 seconds This capability brings monoconal antibbody production and GMP biojugation into a single site helping accelerate 11:19 11 minutes, 19 seconds development timelines while complementing our existing strengths in payload and linker manufacturing. 11:28 11 minutes, 28 seconds Turning to our commitments towards Singene's ESG and sustain sustainability framework. This continues to be an 11:36 11 minutes, 36 seconds important area of focus for Singene and I'm very pleased to advise that we are included in the SNP global 11:44 11 minutes, 44 seconds sustainability yearbook 2026 placing us amongst a select group of leading companies globally and amongst the top 10 in the life sciences sector. 11:56 11 minutes, 56 seconds We were also recognized by Time magazine and Statista as one of the world's most sustainable companies ranking number one 12:04 12 minutes, 4 seconds in India's farmer and biotechnology sector and amongst the top 20 globally. 12:12 12 minutes, 12 seconds In summary, our diversified and integrated business model across research services and contract 12:20 12 minutes, 20 seconds manufacturing continues to provide resilience, balance, and opportunity. 12:27 12 minutes, 27 seconds Supported by strong client relationships, investments in emerging modalities, and expanding global capabilities, 12:35 12 minutes, 35 seconds we believe we are well positioned to meet evolving customer requirements and capture opportunities across the value chain going forward. 12:46 12 minutes, 46 seconds Looking ahead to the next year and as Kieran has outlined, while we are guiding towards a broadly flat 12:54 12 minutes, 54 seconds performance for the full year, we do expect Q1 to have a more pronounced adverse impact of the Labrella Dtocking. 13:03 13 minutes, 3 seconds Thank you. And I will now hand over to Deepak to go through the financials in a little bit more detail. 13:10 13 minutes, 10 seconds Thank you, Peter. A very good afternoon to everyone. Let me begin by discussing the fourth quarter's performance and then I will cover the fullear results. 13:20 13 minutes, 20 seconds First looking at revenue revenue from operations for the fourth quarter was 1037 crores a 2% increase yearon year in 13:29 13 minutes, 29 seconds reported terms. The revenue growth however was impacted by the ongoing detos issue related to lirella as spoken earlier as well. 13:40 13 minutes, 40 seconds Turning to costs, raw material costs were at 22% of revenue in this quarter compared to 23% in the same quarter of 13:48 13 minutes, 48 seconds the previous year. Driven by mixed business mix changes. 13:53 13 minutes, 53 seconds Staff costs increased by about 19% yearonear. Other direct costs primary comprising of power utility expenses 14:01 14 minutes, 1 second increased 17% yearonear due to new facilities at Bayiew in the US and the biologics facility in Bangalore. 14:10 14 minutes, 10 seconds Other expenses decreased by 9% yearon-year due to our cost optimization initiatives. 14:18 14 minutes, 18 seconds The company saw a hedge loss of about 21 crores against a hedge loss of 4.6 6 crores in the same quarter of the 14:26 14 minutes, 26 seconds previous year due to the difference between average and spot h rate. 14:32 14 minutes, 32 seconds The movement in revenue and cost resulted in operating IITA of 303 crores 14:38 14 minutes, 38 seconds with a margin of 29% for the quarter versus 34% in the same quarter last year. 14:47 14 minutes, 47 seconds Depreciation increased by 5% year on year in line with our plans and due to the addition of capacities at the 14:55 14 minutes, 55 seconds biologics manufacturing sites in Bangalore which came operational this year. 15:01 15 minutes, 1 second Interest expense declined by 24% as borrowing reduced in Q426 compared to the same quarter last year. Other income 15:11 15 minutes, 11 seconds increased by 18% compared to Q4 last year, primary due to higher cash and equivalent balances. 15:21 15 minutes, 21 seconds Overall profit after tax but before exceptional items stood at 153 crores down 16% yearonear. 15:30 15 minutes, 30 seconds As you know, the government of India has recently notified the four labor code consolidation, consolidating the 29 15:38 15 minutes, 38 seconds existing labor laws. During the quarter, we reassessed the impact of the new labor codes, which resulted in a 15:45 15 minutes, 45 seconds gradually rememeasurement credit of 20 crores net of tax. Moreover, expenses of 15:54 15 minutes, 54 seconds about 25 crores net of tax were recognized under exceptional items related to terminal termination benefits 16:01 16 minutes, 1 second extended to employees in accordance with an approved policy. 16:06 16 minutes, 6 seconds Adjusted for these exception items, reported profit after tax was 148 crores, down 19% yearonear. 16:16 16 minutes, 16 seconds The normalized effective tax rate for the quarter was 24.2 2 as compared to 23.7 in the same quarter last year due 16:23 16 minutes, 23 seconds to change in profit mix across the units. 16:28 16 minutes, 28 seconds Now moving to capix we continue to invest in building capabilities and technologies that enable us to become an 16:35 16 minutes, 35 seconds integrated solution provider for our clients. During the fourth quarter, we invested $10 million around 50% in 16:44 16 minutes, 44 seconds research services primarly across capability builds and contractual obligations and dedicated centers along with regular maintenance capex. Nearly 40% of the capex was in CDMO business. 16:56 16 minutes, 56 seconds The remaining capex was towards digitization, automation and common infrastructure. 17:02 17 minutes, 2 seconds We continue to maintain a strong balance sheet after meeting our cap expense for the quarter. We have a net cash balance 17:09 17 minutes, 9 seconds of 1,800 crores as of 31st of March 2026. 17:16 17 minutes, 16 seconds Turning to the full year performance, reported revenue from operations increased by 3% yearonear. Raw material 17:23 17 minutes, 23 seconds cost was at 25% of revenue in FY26 compared to 26% last year driven by business exchanges. 17:33 17 minutes, 33 seconds Staff cost increased by 14%. A direct cost primaryly comprising of power and utilities increased by 6% and other operating cost increased by 6%. 17:46 17 minutes, 46 seconds Operating IITA margin stood at 25% for FI26 and profit after tax before 17:52 17 minutes, 52 seconds exceptional items were 380 crores down 20% yearonear. 17:59 17 minutes, 59 seconds As we look ahead, we will continue to invest in technology platforms and enhancements, digitization and automation and strengthen our presence 18:07 18 minutes, 7 seconds in new modalities like peptides, ADCs to build on our strengths. 18:12 18 minutes, 12 seconds With that, I suggest we open up for questions. 18:16 18 minutes, 16 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 18:25 18 minutes, 25 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use a handset while asking 18:33 18 minutes, 33 seconds a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 18:42 18 minutes, 42 seconds We'll take our first question from the line of Kunal Damisha from McQuary. Please go ahead. 18:48 18 minutes, 48 seconds Hi. Uh thank you for the opportunity and uh congratulations on a good set of numbers. Uh the first question is on the 18:55 18 minutes, 55 seconds uh impact uh from the brea uh if you could uh you know quantify let's say if we remove the brea from fi25 and fi26 19:05 19 minutes, 5 seconds then how would have fi26 growth and profitability looked like 19:14 19 minutes, 14 seconds let me take that u if we remove librella from both the years we have growth as we've always called out underlying 19:21 19 minutes, 21 seconds growth is in single intelligence go and uh and the impact of libera is is a culmination of what you see in the numbers. 19:32 19 minutes, 32 seconds So with libriela also we have grown 3% right that is libera impact right and then and 19:41 19 minutes, 41 seconds the single digit will be mid single digit or high single digit it'll be a little high higher single digits please 19:48 19 minutes, 48 seconds yes we don't break that down right now okay in terms of uh profitability would 19:55 19 minutes, 55 seconds they would it have improved between f25 and 26 without liberal I mean overall profitability has 20:03 20 minutes, 3 seconds declined and the impact of Lella is a factor into that as well plus the business mix changes that's one secondly 20:11 20 minutes, 11 seconds our facilities have come online as well right uh the Bangalore facilities come online that has impacted the impacted 20:19 20 minutes, 19 seconds the profitability as well this year and and let's say from the FI27 guidance perspective of flight revenue 20:28 20 minutes, 28 seconds uh what is being built uh for libera supply. Are we expecting it to move to 20:35 20 minutes, 35 seconds zero in that guidance or uh we expecting a gradual decline? 20:43 20 minutes, 43 seconds We expect as Peter alluded a little bit that the coming quarters quarter 1 and quarter two will have almost no 20:50 20 minutes, 50 seconds librella. Uh there is some minor librella volumes towards the end of the year but uh but that's about it. Most of 20:58 20 minutes, 58 seconds the Libraa impact will uh will be done in this first two quarters. Um and 21:05 21 minutes, 5 seconds Libraa as of now we have no incremental revenue plans for Debella beyond one small amount in the last quarter. 21:15 21 minutes, 15 seconds Sure. And and uh in terms of the current quarter uh is the cost related to Bayiew 21:22 21 minutes, 22 seconds facility fully baked in in terms of because we last time we had suggested that the hiring is ongoing. So is it fully baked in Q4 or uh there is more 21:32 21 minutes, 32 seconds cost which can come and if you could also highlight the total drag from both these facility unit 3 and Bay view on 21:39 21 minutes, 39 seconds the current P&L uh you know on a quarterly basis that will be helpful. 21:48 21 minutes, 48 seconds So from uh we are on the on the unit three we've we've capitalized it as as we said at in the beginning of the first 21:55 21 minutes, 55 seconds quarter of FY26 um and the impact of therefore is of the people etc and all the costs are 22:04 22 minutes, 4 seconds definitely coming into the P&L uh the the impact of Bayiew is only partially coming into the P&L to the extent that's 22:13 22 minutes, 13 seconds not capitalized We have not yet fully capitalized the facility. So we will come and update you about pay's capitalization and the plans forward. 22:24 22 minutes, 24 seconds But it would be baked into that mid20s ITA margin guidance right uh for F27. 22:32 22 minutes, 32 seconds Yes. Yes. Yes. 22:34 22 minutes, 34 seconds Sure. Sure. I have more question. I'll join back with you. All the best. Thank you. Thank you. 22:43 22 minutes, 43 seconds Next question is from the line of Surya Patra from Philip Capital, India. Please go ahead. 22:49 22 minutes, 49 seconds [clears throat] 22:51 22 minutes, 51 seconds Thanks for the opportunity sir. Uh and congrats for the uh positive surprise number what you delivered in the fourth 22:59 22 minutes, 59 seconds quarter. Uh sir just wanted to understand um compared to the guidance what we had given in the third quarter 23:06 23 minutes, 6 seconds where we have been saying that there would be kind of under [clears throat] funds both in terms of revenue as well as on the margin front but this quarter 23:15 23 minutes, 15 seconds turns to be a kind of a strongly positive quarter to that guidance. What really caused this uh uh positive 23:24 23 minutes, 24 seconds surprise in terms of operating performance? 23:30 23 minutes, 30 seconds So yeah, we did guide towards a full year number uh obviously that had an implication of what the quarter looks like. We were we were able to churn out 23:39 23 minutes, 39 seconds improved revenue uh for the quarter but by only a marginal amount right sign not uh not a major change uh in terms of 23:48 23 minutes, 48 seconds profit because our earlier numbers have come more or less in line with what we had said in terms of our con currency uh 23:56 23 minutes, 56 seconds forecast or guidance that we' given. If you look at uh margins for sure, you know, we continue to to be more 24:03 24 minutes, 3 seconds efficient and uh and and be more frugal on our costs. Uh that's what's led to an improved margin versus what we wanted it 24:11 24 minutes, 11 seconds to be uh what we guided it to be. Uh and therefore margins have shown an improvement and we'll continue to hold the margins as we've guided. 24:19 24 minutes, 19 seconds Okay. Okay. [clears throat] That is helpful. 24:22 24 minutes, 22 seconds I just wanted to also understand whether any revenue booking from the clinical trial activities 24:30 24 minutes, 30 seconds or services whether that is visible in this quarter. If not uh any outlook that we are uh uh separately giving for the 24:38 24 minutes, 38 seconds clinical trial activities that we have added as a new article for FI27 24:47 24 minutes, 47 seconds and clinical trials Sura if you remember we said we were always been present in clinical trials right what we sided in 24:54 24 minutes, 54 seconds quarter two was a a win that we had on a global trial right now the global trial was going to pan out a few years as what 25:02 25 minutes, 2 seconds we had said as well and therefore what you do see in this year's this quarter and coming years as well that there will 25:10 25 minutes, 10 seconds be clinical trial revenue that will bake into the numbers uh it's an ongoing business we definitely focusing more on 25:18 25 minutes, 18 seconds that business uh but the revenue continues to float this quarter and in the coming year 25:26 25 minutes, 26 seconds okay so as regards uh since it is the fourth quarter and closure of the year uh So can you share what is the split 25:35 25 minutes, 35 seconds between uh revenue split between the CDMO and CRO and uh if you can also give some color that the way that you are 25:43 25 minutes, 43 seconds looking this these two businesses for next year while the strategy you have guided but since the since you have 25:52 25 minutes, 52 seconds mentioned also the environment in the CDMO space is improving so what outlook that you should be begging in for uh CRO as well as CM CDMO security. 26:07 26 minutes, 7 seconds Yeah. So u in terms of this year we had about as I said typically 2/3 1/3 23 towards the CRO business 1/3 towards the 26:16 26 minutes, 16 seconds CDMO business that mix as what we had uh seen until quarter 3 continues to be the mix that we seeing in quarter 4 as well. 26:24 26 minutes, 24 seconds So broadly 23 1/3 we are anticipating that to be directly in line for even the next year. Um so you would continue the 26:32 26 minutes, 32 seconds split to be almost similar. There will be minor changes as we as we continue to uh evolve through the year but broadly 26:40 26 minutes, 40 seconds 2/3 1/3 is what you can take for your modeling purposes. for the moment. We will keep updating as we evolve through this. 26:46 26 minutes, 46 seconds I'd like to I would like to add to what Deepak just said in the Q4. 26:51 26 minutes, 51 seconds There was a slide that said that 41% came from CDMO and 59% came from 26:58 26 minutes, 58 seconds um the research services business. So that's an indication. 27:04 27 minutes, 4 seconds Okay. Oh, that is really helpful. Uh just one more thing. see the capabilities that we have been building 27:11 27 minutes, 11 seconds either in terms of the peptide ADC or hard gelatin capsules along with the capacities also that we are uh we have 27:19 27 minutes, 19 seconds acquired or built up. So is there any gestation period that we should consider 27:26 27 minutes, 26 seconds ma'am uh about or so like is there any gestation period then only we will see start seeing kind of a revenue or 27:34 27 minutes, 34 seconds earning implication out of those So, so yeah, I'll start and probably 27:44 27 minutes, 44 seconds I'll I'll draw Peter's views as well on this. Typically, when we have these capacities that we build up on u on the 27:52 27 minutes, 52 seconds CDMO space specifically, right? And you saw that a bit in unit 3 as well, you know, before we take the site, we got to 27:59 27 minutes, 59 seconds get it into qualification stages. We got to do some some trial batches runs and then we get into regulatory approval 28:06 28 minutes, 6 seconds structures right typically they do take uh you know 12 18 24 months depending upon the nature of the nature of the 28:14 28 minutes, 14 seconds site the state of readiness at the of the site itself when we bought it as well. So you would expect you know you 28:22 28 minutes, 22 seconds did see what happened in unit 3. It took us almost 18 odd months uh to get it operational and and capitalize the site. 28:30 28 minutes, 30 seconds We would expect the initial trial runs etc on Bayiew to also go through and then you know in the coming year we 28:37 28 minutes, 37 seconds should start seeing some engineering batches etc come through and capitalizations once we get the regulatory approvals which we can't 28:45 28 minutes, 45 seconds really comment on the timeline right now. Seria let me add to Deepak's comments um [clears throat] and speak a 28:53 28 minutes, 53 seconds little bit about you know the capability enhancements in the areas like Sajel um capsules and antibbody drug conjugates 29:02 29 minutes, 2 seconds and and peptides you know where we are building uh new capabilities and we're building capabilities that strengthen 29:11 29 minutes, 11 seconds existing capabilities and we would expect here um to look to for this to 29:18 29 minutes, 18 seconds contribute towards the pipeline build that Kieran referred to in her opening remarks and and contribute toward, you 29:26 29 minutes, 26 seconds know, the exit in 27 on a on a growth trajectory and then looking to 28 to see 29:32 29 minutes, 32 seconds more sustained growth as we clear um an umbrella impact at the end of 27. 29:40 29 minutes, 40 seconds Sure. Sure. Yeah. Thank you. Thank you for this comment. 29:44 29 minutes, 44 seconds Wish you all the best for future quarters. 29:49 29 minutes, 49 seconds Thank you. Next question is from the line of Kunal Dandera from Access Capital. Please go ahead. 29:57 29 minutes, 57 seconds Good afternoon, sir. Uh, so the question is on section 232 tariffs where around 100% levy will be on patented pharma 30:05 30 minutes, 5 seconds products and the ingredients. So don't you think this can slow down future order contracts of CDMO players? 30:15 30 minutes, 15 seconds Um canal our assessment of the tariff impact on singing is it will be negligible 30:23 30 minutes, 23 seconds um you know as a as both a service industry and in the product supplies that that we make and supply to our 30:32 30 minutes, 32 seconds customers. So we are not anticipating any material effect of tariffs on Singene's business. 30:39 30 minutes, 39 seconds Great sir. So you see even after this uh announcement you are still getting RFPs uh from your prospective customers. 30:49 30 minutes, 49 seconds Yes we are. 30:50 30 minutes, 50 seconds Great. Great. Okay. The second question uh is on your contract with Crystal Meyers that was extended till 2035. 30:59 30 minutes, 59 seconds It seems to bit more expansive a bit more extensive than last time. So is the wallet size bigger? 31:09 31 minutes, 9 seconds So um [clears throat] I mean I again this is a very important component of our of our business. It's our largest 31:17 31 minutes, 17 seconds collaborator and a unique um construct you know 28 years now um in in terms of 31:28 31 minutes, 28 seconds legacy and looking forward now 10 year future horizon. I think it's really the 31:34 31 minutes, 34 seconds time horizon enables strategic thinking and of course if we look at the the 31:41 31 minutes, 41 seconds market outside and developments in these new modalities um that we've discussed and of course 31:49 31 minutes, 49 seconds the implications and evolution of AI into discovery and development it really allows 31:57 31 minutes, 57 seconds the parties bristle squ and singene to think strategically and that includes to some of the expansions that we discussed 32:06 32 minutes, 6 seconds in opening remarks in uh areas that we will look to collaborate. But it really provides that strategic framework so 32:13 32 minutes, 13 seconds that we can plan in the mid and the longer term um to support Bristol Myers 32:19 32 minutes, 19 seconds Squib you know as they evolve their um pipelines and portfolios. 32:27 32 minutes, 27 seconds So that that is really the real strength of the extension of the collaboration is providing that now decade horizon going 32:36 32 minutes, 36 seconds forward so that you know can really look to support Bristol's strategic outlook as it builds its pipeline and its portfolio going forward. 32:48 32 minutes, 48 seconds Right? So that obviously should translate into higher revenues than what you have received from Bristol in the 32:55 32 minutes, 55 seconds past. If you I mean putting so many adjacent canal I mean we're not I yeah I mean I don't think we can comment in any 33:04 33 minutes, 4 seconds shortterm horizon there. Obviously if we look at the history of this relationship over the over the course of years it it has grown but this is already a 33:12 33 minutes, 12 seconds substantial business in scale and you know growth um 33:19 33 minutes, 19 seconds will not be linear in that sense. I I think it will um grow around US 33:26 33 minutes, 26 seconds inflation at at some level. Um you know but if it its expansion going forward 33:34 33 minutes, 34 seconds will be determined by the nature of you know these the strategic outlook and the the new areas of of expansion and opportunity. 33:45 33 minutes, 45 seconds Right. Right. Thank you and all the best. Thank you. 33:51 33 minutes, 51 seconds Next question is from the line of Anish Burman from Vikaria Change LLB. Please go ahead. 33:58 33 minutes, 58 seconds Hi. Uh good afternoon. Thanks for taking my question. Um I had a question uh around the cost and cases that you might be witnessing because of the Middle East 34:07 34 minutes, 7 seconds conflict. Uh could be raw material, could be a utility pricing. Uh I just wanted some qualitative color on how your contracts are structured both on 34:16 34 minutes, 16 seconds the CRO side and on the PDNO side. How easy is it to pass on these cost increases to the customers or how difficult it is as the case may be. 34:25 34 minutes, 25 seconds Thank you. 34:30 34 minutes, 30 seconds So um of typically these are different contracts with different clients. the nature of the contracts uh depends on 34:38 34 minutes, 38 seconds the need of what they're trying to service and also depends on the nature of the uh nature of the the molecule and 34:46 34 minutes, 46 seconds conversation or the support that is required. Right? So it's not one sizefits-all. It's it also depends upon 34:55 34 minutes, 55 seconds uh the conversation of the long-term horizon of the of the contract that we get into. So it's not a it's not a 35:04 35 minutes, 4 seconds straightforward answer of saying are all contracts which have elements of cost that we pass through or not. I think it 35:11 35 minutes, 11 seconds depends upon the nature of the conversation and and and uh and the services that we are providing. Um I 35:19 35 minutes, 19 seconds don't think there's a straight answer to your question. 35:24 35 minutes, 24 seconds Um okay. Um again uh I mean if you just bifocate your business into CRO and CDMO 35:31 35 minutes, 31 seconds uh is your answer true for both these businesses or is there one business where it's relatively easy to have those kind of conversations with the clients. 35:43 35 minutes, 43 seconds Let me let me um maybe also add in here. 35:46 35 minutes, 46 seconds I mean the implications of of of what's happened um you know are evident as as everyone can see. I'll start by saying 35:55 35 minutes, 55 seconds that there have been no disruptions to the continuity of service and supplies on Singene's ongoing business that has been you know navigated by the team very 36:04 36 minutes, 4 seconds very successfully and obviously in in conjunction with our partners. Of course there have been some cost increases that 36:13 36 minutes, 13 seconds we've seen in some areas and some of them you as you will know that there's been a little bits of spikes in some of the prices. There are two things here. 36:22 36 minutes, 22 seconds We don't know how long this will go on and to what extent it will it may continue. We are obviously re-engineering distribution and 36:29 36 minutes, 29 seconds logistics and we're obviously looking at costs and we're we're of course talking to our customers and collaborators. Um 36:36 36 minutes, 36 seconds but as Deepak said you know I think it there is not a onesizefits-all answer to this and it will be customer 36:43 36 minutes, 43 seconds by customer and contract by contract and they are also looking at you know how we re-engineer the logistics and the supply 36:50 36 minutes, 50 seconds chains and they are of course also aware of of some of the cost implications there but I don't think there's any material impact that we're considering 36:59 36 minutes, 59 seconds at at this point in time but you know and we'll have to wait and see how this uh resolves going forward. 37:08 37 minutes, 8 seconds Okay, thanks. I'll get back in the Thank you. 37:16 37 minutes, 16 seconds Next question is from the line of Sham Shiniasan from Goldman Sachs. Please go ahead. 37:21 37 minutes, 21 seconds Yeah, good afternoon. Thank you for taking my question. Uh just between January and now we are reporting in April. Um you know, we had cut our EIDS 37:31 37 minutes, 31 seconds and guidance for the full year to 22 23%. 37:34 37 minutes, 34 seconds uh and we delivered 25 right and now when we look at our guidance for next year it seems to suggest flat margins so I I'm just a 37:43 37 minutes, 43 seconds little confused with respect to the AIDA margin guidance I think on revenue we have probably met 37:50 37 minutes, 50 seconds uh fully guidance for fiscal 25 26 uh but just the push and pulls because we just cut guidance and then now we 37:58 37 minutes, 58 seconds actually beat our guidance so is there something that was supposed to happen that was got postponed grown into say fiscal 27 that has led to this cost 38:07 38 minutes, 7 seconds change uh or was there a mix issue if you could explain just what happened in two months? 38:14 38 minutes, 14 seconds There two parts to it. Um Sham one for sure you know the product mix is a big factor what made the big sway um you 38:23 38 minutes, 23 seconds know into into our margin structures right there was an assumption of what our product mix would be and the cost structures related to that product mix 38:31 38 minutes, 31 seconds in terms of raw materials the people that we get engaged and so on and so forth that went through a bit of a shift and that was a positive shift in that 38:38 38 minutes, 38 seconds direction. Obviously there's some bit of also cost that's gone into the exceptional items as well that's also led to that change. So two major 38:47 38 minutes, 47 seconds contributors right now. One is the product mix change or the services that we had anticipated or the revenue mix that we had anticipated went through a 38:55 38 minutes, 55 seconds change and then some bit of the cost went into exception items as well. 39:01 39 minutes, 1 second Got it. So Deepak just from a forward-looking perspective right is it getting difficult for you to estimate uh 39:07 39 minutes, 7 seconds corporate margins has something changed um you know we do we still have the aspiration to go towards the high 20s 39:16 39 minutes, 16 seconds maybe 30% margins do you think that overall you know I'm not asking for a specific year but is there a path to going back or you think we are now moved 39:25 39 minutes, 25 seconds to a slightly lower trajectory of what margins can be So um Sham two things uh one for sure 39:34 39 minutes, 34 seconds we've guided you towards the mid20s even for the next year as Ken mentioned uh that's that's definitely taking into 39:42 39 minutes, 42 seconds consideration you know how we expect the utilization curve on our sites that we have re have bought in the recent past that that's going to come up but more 39:50 39 minutes, 50 seconds importantly we've always mentioned and we've said this in the past as well as the utilization curves on the sites improve we do expect the margin profile 39:58 39 minutes, 58 seconds to improve as well Aspirationally for sure we definitely want to improve the margins but as of now we're guiding only for the year and we guiding it towards 40:07 40 minutes, 7 seconds the mid20s as as called out earlier. 40:12 40 minutes, 12 seconds Got it. And my last question just going back now on revenue. So when we look at fiscal 24 revenue was 418 million fiscal 40:21 40 minutes, 21 seconds 25 was 413 now we are 419 in 26 and we are guiding for a flat so 419 right I'm 40:28 40 minutes, 28 seconds just making that number up last one but I'm just saying when does it get higher right is there u you know what needs to 40:36 40 minutes, 36 seconds kind of get us back on a growth path on revenue uh I know we have done a lot of investments ahead of time but you know 40:44 40 minutes, 44 seconds uh what could be the major your triggers for a revenue growth through also restart. Thank you Sean. Let me um um [clears throat] 40:53 40 minutes, 53 seconds respond first and then Deepak can can come in. Uh you know get getting back to more sustainable growth and to higher 41:01 41 minutes, 1 second growth levels is clearly the direction that we're looking to to build Singi. 41:09 41 minutes, 9 seconds The Labrella headwinds have clearly had material impacts last year 26 and and as we've outlined will continue to have 41:16 41 minutes, 16 seconds effects through 27 and those are now absorbed in in the guidance framework that Kieran outlined 41:24 41 minutes, 24 seconds and we would expect to end 27 you know on a on a growth trajectory and the 41:31 41 minutes, 31 seconds Labrella effect will then have washed out and in a way 27 represents a sort of resetting of the baseline and then with 41:39 41 minutes, 39 seconds the investments that we've made in the modalities and the and the capabilities that we're building um you know and with 41:47 41 minutes, 47 seconds the maturation of the pipelines that we're developing you know on the commercial side we would expect to see 41:54 41 minutes, 54 seconds those begin to play play through and you know look beyond 27 for a more sustainable and higher growth trajectory. 42:05 42 minutes, 5 seconds Great. Thank you. All the best Sham. 42:08 42 minutes, 8 seconds Um maybe I should uh add to what Peter and Deepak have just said. Um we are really focusing also on our CDMO 42:17 42 minutes, 17 seconds business which we think will give us more uh you know aggressive and sustainable growth. 42:28 42 minutes, 28 seconds Thank you. We'll take the next question from the line of Harit Ahmed from Aendis Park. Please go ahead. 42:36 42 minutes, 36 seconds Hi uh good afternoon thanks for the opportunity. So my first question is on the partnership with Zoetus. Uh Zoetus has a follow on molecule to therella 42:45 42 minutes, 45 seconds it's called the media and uh uh I was just wondering if sing has any role in the supply chain for that product. Uh 42:53 42 minutes, 53 seconds given Zoe is already has a European approval and they're expecting a US approval shortly. 43:03 43 minutes, 3 seconds So let me take that. Um and at this point we do not have any participation in the follow-on molecule going forward. 43:13 43 minutes, 13 seconds And just to add on to that is we did do some bit of clinical work for them uh on the other the other molecule. In terms 43:21 43 minutes, 21 seconds of ongoing commercial production, we're in conversation but but nothing beyond that right now. 43:30 43 minutes, 30 seconds Understood. Uh so my second question is on the research uh terms of side of the business. Uh so firstly if you could 43:38 43 minutes, 38 seconds give some color on the mix within research services today. So you talked about in one of your slides uh about discovery services, translation services 43:47 43 minutes, 47 seconds and clinical trials and and uh just trying to understand uh the mix as well as you know some of the macro headwinds 43:54 43 minutes, 54 seconds that you've called out in terms of uh biotech funding uh how we should think about the impact of these uh these challenges on each of these verticles. 44:08 44 minutes, 8 seconds Harris um we don't call out you know quantitatively the split uh but of 44:15 44 minutes, 15 seconds course chemistry which is the legacy foundation of Singene is the the biggest 44:23 44 minutes, 23 seconds part of the business biology and now biootherrapeutics where you know we believe Singene is very well placed in 44:30 44 minutes, 30 seconds in in India as a lead player uh you know supports that and as as we've said you know our our translation and clinical 44:38 44 minutes, 38 seconds services are at a lower starting point but you know we are seeing some encouraging opportunities here for 44:46 44 minutes, 46 seconds growth. So it is I think the balance uh the large balance is chemistry and 44:53 44 minutes, 53 seconds supported biology and biootherrapeutics with translation and clinical research uh you know a smaller part. But uh you 45:02 45 minutes, 2 seconds know going forward we would expect all three uh legs of that stool in discovery services you know to to look to growth 45:12 45 minutes, 12 seconds um uh you know and where I I think we can see growth in all three cylinders or all three legs of of that stool uh you 45:20 45 minutes, 20 seconds know I think in biootherrapeutics there's you know very clear opportunity of differentiated capability 45:27 45 minutes, 27 seconds differentiated services playing into a high growth part of the contract research market. And of course, as we've 45:36 45 minutes, 36 seconds discussed in previous calls, the translation and clinical research businesses is, you know, looking at 45:43 45 minutes, 43 seconds significant expansion, you know, going forward over the coming years as um clinical trials pick up in in India and 45:51 45 minutes, 51 seconds as the translational capability plays into discovery capabilities more broadly. 46:01 46 minutes, 1 second Thanks Peter. Uh I know one last question. Yeah. Yeah. Target back. Thanks. 46:10 46 minutes, 10 seconds Thank you. Next question is from the line of Alankar Garud from Kotak Institutional Equities. Please go ahead. 46:18 46 minutes, 18 seconds Hi, good afternoon everyone. Uh Peter, in your discussions with clients, how are they assessing the impact of AI on 46:25 46 minutes, 25 seconds drug discovery and how are you gearing up for any shifts in the business model as well as activity levels? 46:33 46 minutes, 33 seconds Sure. Um Alanka, obviously a very important question. I mean I I think it is very clear to everybody that the 46:43 46 minutes, 43 seconds implications of AI in discovery um in development and in manufacturing you know will be profound. 46:51 46 minutes, 51 seconds uh you know I I'm not sure what the timeline is and and how it will land but already you know we are seeing rapid 47:00 47 minutes changes in the evolution and I think Kieran touched on this in her opening remarks the application of AI to improve 47:07 47 minutes, 7 seconds timelines which are obviously critical of critical importance to all our clients and collaborators 47:15 47 minutes, 15 seconds uh you know to improving predictability through modeling um you know to reduce 47:22 47 minutes, 22 seconds risk through enhanced predictability and fundamentally to enhance innovation uh you know with AI applications that 47:31 47 minutes, 31 seconds can look to find new targets um you know and to look to 47:38 47 minutes, 38 seconds enhance validation of these targets um you know in development and in clinical development we're already 47:46 47 minutes, 46 seconds seeing applications of of AI that will help you all the aspects of the clinical 47:52 47 minutes, 52 seconds side in patient recruitment in data management and so forth in translational 47:59 47 minutes, 59 seconds sciences you know as as these elements enhance the predictability um of drug 48:07 48 minutes, 7 seconds discovery we'll see applications of AI in there and of course in manufacturing we're already working with digital twins 48:14 48 minutes, 14 seconds to enable us to enhance our ability to manage and and optimize manufacturing So Alanka I I think it is clear that 48:23 48 minutes, 23 seconds that there will be profound implications of AI and from Singene's side again we've been investing in you know new 48:32 48 minutes, 32 seconds capabilities there we have a team um you know of AI scientists who are looking at 48:38 48 minutes, 38 seconds the application of um algorithms [clears throat] and so forth to enhance our service offerings and to create 48:47 48 minutes, 47 seconds value to our customers And of course with our customer base, we're working in this in this arena with many companies. 48:55 48 minutes, 55 seconds So I think the the shorter answer is it is going to change um and and profoundly discovery development and manufacturing 49:04 49 minutes, 4 seconds and that Singene is moving and accelerating its capabilities to enhance 49:11 49 minutes, 11 seconds differentiated service value creation to our customers in that field. 49:16 49 minutes, 16 seconds Kieran, you may want to add something in on this. 49:22 49 minutes, 22 seconds No, I think I think uh what you said is adequate because I think these are, you know, important times and points of 49:30 49 minutes, 30 seconds inflection, but I think what you have said is uh fairly well covered. 49:36 49 minutes, 36 seconds Got it. That's uh very helpful Peter. Uh Kan, the second question for you. uh you have now come into an executive role at 49:44 49 minutes, 44 seconds Singen after a long time. Uh there is also a new team led by Siddhhat Abijit coming in from Bioon Genrix. Can you 49:52 49 minutes, 52 seconds take us through what prompted these decisions and did you at any point in time evaluate an external candidate? 50:02 50 minutes, 2 seconds So first and foremost I think um this plan has been in place for some time. In fact, Peter has also been part of taking 50:11 50 minutes, 11 seconds this decision because I think it was very clear that after Jonathan departed uh you know Peter played a very 50:19 50 minutes, 19 seconds important role to play the role of an interim CEO till Sidat could join and as 50:27 50 minutes, 27 seconds you know it we did this we did believe that we needed a very there was a strong rationale that we needed a full-time um 50:36 50 minutes, 36 seconds you know the full-time presence of a CEO in India because I think it's very important to getting into CDMO 50:44 50 minutes, 44 seconds operational excellence was very important where the CEO has to have a very close you know oversight on these 50:51 50 minutes, 51 seconds kind of uh businesses and because Sidhart is uh someone who has played a very important role at 51:00 51 minutes Bioon who understands uh the CDMO business because Bioon is very much involved involved in that kind of manufacturing operations. 51:11 51 minutes, 11 seconds Uh it you know it it was something that we felt was the right thing to do. Um, Abiji of course also comes with a very 51:19 51 minutes, 19 seconds strong experience of commercial and business development capabilities where he has actually built a number of 51:28 51 minutes, 28 seconds partnerships, a number of collaborations and as you know both Abijit and uh, Siddhhat have played a very important 51:37 51 minutes, 37 seconds role in building various partnerships whether it is the uh, the Viatrist partnership 51:44 51 minutes, 44 seconds uh, whether it was the you the FISA partnership, whether it was the Cuban partnership and uh and and many others, 51:52 51 minutes, 52 seconds you know. So I think we're very very comfort they are both very very experienced and and and 52:00 52 minutes comfortable with building partnerships and collaborations and we believe that this is really a services business is about uh building these partnerships and 52:09 52 minutes, 9 seconds relationships and u we didn't have a very formal commercial structure which we felt would 52:16 52 minutes, 16 seconds actually help the business going forward. So I'm you know someone who has worked with them very closely for over 52:24 52 minutes, 24 seconds many many years. Uh obviously I'm happy to be back to uh you know take Singene 52:32 52 minutes, 32 seconds through this very exciting time. Uh and uh this is a team I'm very familiar with and I'm very confident that we will 52:39 52 minutes, 39 seconds rebuild uh and re reset and rebuild uh the Singene model uh in all the particular areas that we spoke about. 52:49 52 minutes, 49 seconds And you know Peter has done an excellent job of being that interim CEO and uh I 52:56 52 minutes, 56 seconds think uh we now believe that Singene is in very good hands. 53:02 53 minutes, 2 seconds Sure that's a very helpful Kan ma'am and with your permission one final question uh Deepak you spoke about the cost 53:09 53 minutes, 9 seconds efficiency measures helping margins uh there is also a termination charge can you just take us through some of these 53:16 53 minutes, 16 seconds cost rationalization initiatives and where are we in this journey 53:23 53 minutes, 23 seconds so as called out in the notes as well um this is termination benefits of uh of 53:31 53 minutes, 31 seconds rebalancing the organization, right? If you see the people cost, you will see the cost going up. Uh but that was the investments that we made in the people 53:40 53 minutes, 40 seconds at the beginning of the year and then there was some rebalancing in some parts of the organizations that we needed to do. So it is uh is it is a impact that 53:49 53 minutes, 49 seconds we've taken into the financials as termination benefits and that's what you see as the cost implication right. Uh I really won't comment beyond that right 53:58 53 minutes, 58 seconds now in terms of how it's going to play out in the future. But the margin structure is what we've commented upon and we're going to probably hold on to the margin guidance that we've given. 54:08 54 minutes, 8 seconds Fair enough. Uh that's it from my side. Thank you. 54:13 54 minutes, 13 seconds Thank you ladies and gentlemen. That was the last question for today. You can get in touch with Singen team for any further questions. On behalf of Singen 54:23 54 minutes, 23 seconds International, that concludes this conference. Thank you for joining us and you may now disconnect your lines.