Zim Laboratories Ltd — Q3 FY26

Zim Laboratories Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=GWGWD5unSrQ Published: 3 months ago

0:02 2 seconds Morning ladies and gentlemen. I'm Akash, moderator for the conference call. 0:07 7 seconds Welcome to Zim Laboratories Limited Q3 and 9 month FI26 earnings conference call. As a reminder, all participants 0:14 14 seconds will be in listen only mode and there'll be an opportunity for you to ask question after the presentation concludes. Should you need assistance 0:22 22 seconds during the conference call, please signal an operator by pressing star then zero on your touchstone telephone. 0:28 28 seconds Please note this con conference is recorded. I would now like to hand over the floor to miss the picasharma from go India addresses. 0:37 37 seconds Thank you Akash. Good morning everyone and welcome to the Q3 and 9 month FI26 earnings call of city mort. We have on 0:46 46 seconds the call Dr. Amud Daw chairman and managing director Mr. Lika Kamal director command Mr. Shah Muham chief 0:54 54 seconds financial officer and Mr. Nandal investor relation. We must remind you that the discussion on today's call may include certain formative statements and 1:02 1 minute, 2 seconds must be there for mute in conjunction with the risk that the company faces. 1:06 1 minute, 6 seconds May I request the management to take us through the financials and business outlook subsequent to which we will open the floor to Q&A. Thank you and over to you sir. 1:15 1 minute, 15 seconds Thank you. 1:17 1 minute, 17 seconds Good afternoon everyone. This is speaking. A warm welcome to all participants joining us for winry 1:24 1 minute, 24 seconds limited earnings conference call for the third quarter and 9 month and then December 31 2025. 1:31 1 minute, 31 seconds I hope you have had the opportunity to review our results and the accompanying presentation available on the exchanges. 1:38 1 minute, 38 seconds Let me begin with an update on our EGMP remediation and kapa implementation plan which continues to remain our highest strategic priority. 1:47 1 minute, 47 seconds We have submitted the majority of ka responses and addressed most regulatory queries based on our ongoing engagement with the authorities. We understand and 1:55 1 minute, 55 seconds the audit is expected to be conducted during the first half of the upcoming financial yearly in the next quarter. 2:06 2 minutes, 6 seconds uh in preparation we are proactively undertaking all necessary steps to ensure full compliance with regulator 2:14 2 minutes, 14 seconds regulatory requirements and remain committed to maintaining the highest quality and compliance standards. We recognize that EGMP certification is 2:21 2 minutes, 21 seconds critical to unlocking value for regulated markets. In parliament, we continue to undertake proactive measures to maintain business continuity through 2:30 2 minutes, 30 seconds alternate certification and site transfer initiative select key products ensuring minimum disruption to customer commitment and strengthening our regulatory food. 2:41 2 minutes, 41 seconds This performance highlight the pharma segment continued to demonstrate steady traction during the quarter supported by improvement in our wave business 2:50 2 minutes, 50 seconds also witnessed better contribution during the quarter supported by recovery in the military mut while 9 month performance remains 2:59 2 minutes, 59 seconds largely stable on the revenue front quarterly performance ended performance reflected improvement across key operating metrics including operating 3:08 3 minutes, 8 seconds income and overall profitability driven by better business and improved operational efficiencies. 3:15 3 minutes, 15 seconds In the opinion, we also completed a preferential issue remaining approximately 35 C. The proced will be 3:22 3 minutes, 22 seconds utilized toward expansion of of our dedicated concrete and blockion of the city and facility into formulation focused facility and strengthening 3:31 3 minutes, 31 seconds regulatory and copper related compliance initiatives. These investments are expected to enhance our long-term growth capabilities and expand our presence and 3:39 3 minutes, 39 seconds value add strengthening our organizational capabilities. We also 3:47 3 minutes, 47 seconds made three senior leadership additions during the quarter. Mr. Vamp joined as president international business gaining 3:54 3 minutes, 54 seconds over 26 years of experience across across pharmaceutical markets. Additionally, Mr. When the vice president quality 4:02 4 minutes, 2 seconds assurance and mission depended upon vice president human resources were designated as senior management personnel further strengthening 4:11 4 minutes, 11 seconds leadership across people's compliance and quality functions looking ahead the upcoming quarter will remain important 4:19 4 minutes, 19 seconds for subjective stability in the geopolitical and macroeconomic environment. 4:24 4 minutes, 24 seconds We remain optimistic about closing the financial year on a strong note. To summarize, we remain focused on 4:32 4 minutes, 32 seconds completing EGMP and remediation, strengthening business continuity, million and investing in long-term grow platforms. 4:41 4 minutes, 41 seconds With this, I now hand over the call to Mr. Sh who will walk you through the financial highlights for future and 9 month financial year 26. Over to you. 4:54 4 minutes, 54 seconds Thank you Dr. D. Good afternoon everyone. Let me provide a summary of our financial performance for the quarter ended uh December. The company 5:03 5 minutes, 3 seconds reported a total operating income of approximately,87 million rupees reflecting improvement in 5:12 5 minutes, 12 seconds both uh both a sequential and year-to-year basis reported a strong traction across our core pharmaceutical 5:19 5 minutes, 19 seconds business and recovering the selected medicinal orders. IDA for the quarter stood at approximately 145 million 5:26 5 minutes, 26 seconds rupees translating into a margin of around 13.4% compared to 13.8% 8 portion the previous 5:33 5 minutes, 33 seconds quarter supported by improved product means and operating leverages profitable tax stood at 44 million rupees 5:41 5 minutes, 41 seconds reflecting improvement compared to the previous quarter for the 9 months 9 month period the total operating income 5:49 5 minutes, 49 seconds stood at approximately 2,691 million broadly in line with corresponding 5:56 5 minutes, 56 seconds period last year with profitability remaining infected due to the higher operating expenses and continued 6:04 6 minutes, 4 seconds investment towards regulatory and compliance initiatives on the sequential basis which continue to grow with a 6:12 6 minutes, 12 seconds steady momentum margins in Q3 FY26 improved compared to previous two quarters export business increase of 6:21 6 minutes, 21 seconds sign uh significantly in quarter 3 FY26 to 961 million rupees an increase of 232% 6:30 6 minutes, 30 seconds year contributing 88% to the total operating income. Revenue contributed 6:37 6 minutes, 37 seconds from NIP APF student rupees 132 million reflect representing 12.2% 2% of 6:45 6 minutes, 45 seconds operating income on R&D front rupees 74 million allocated for bean studies and resistations 6:54 6 minutes, 54 seconds advancing the innovative product NIP and OS pipeline to summarize the company delivered steady sequential improvement 7:03 7 minutes, 3 seconds in operational performance in the quarter and remains focused on strengthening the core business 7:11 7 minutes, 11 seconds improving margins and supporting long-term strategic initiatives. With this, we would like uh we like we now like to open the floor for the Q&A. 7:21 7 minutes, 21 seconds Thank you. 7:23 7 minutes, 23 seconds Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star and one on your telephone 7:31 7 minutes, 31 seconds keypad and wait for your turn to ask the question. If you'd like to withdraw your request, you may do so by pressing star and one again. In the interest of time, 7:40 7 minutes, 40 seconds we would request the participants not to repeat the same questions. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. 7:52 7 minutes, 52 seconds First question comes from Mr. Madurati from Counter Cyclic Investments. Please go ahead. 7:58 7 minutes, 58 seconds Thank you for the opportunity sir. I I was looking at their previous annual reports and uh so so I'm trying to understand sir what is the issue with 8:06 8 minutes, 6 seconds this NIP and OBS products because even in during 2013 to 2015 period we were very optimistic on these products but 8:15 8 minutes, 15 seconds they haven't been able to scale up and um I think we were at a conference in 2017 or 2018 we were speaking about this for the European markets but even that 8:23 8 minutes, 23 seconds hasn't been able to scale up. There is a problem in product selection strategy or uh the product uptake strategy for these 8:31 8 minutes, 31 seconds differentiated products that's why it's taking so long and how do we plan to scale it up going forward 8:40 8 minutes, 40 seconds uh as I've already in uh my opening remarks uh 8:50 8 minutes, 50 seconds uh products are Europeentric And uh we uh we know uh in the last 8:58 8 minutes, 58 seconds villa we were inspected and we have received a non-compliance NB. So that's why the products uh the the traction which we were supposed to receive with 9:06 9 minutes, 6 seconds few of our products which had completed the final uh run uh on the way to receiving uh 9:15 9 minutes, 15 seconds could not be put inside the market in spite of our having very solid contracts which points 9:22 9 minutes, 22 seconds towards an inflection point in the company's uh MIT business. We are waiting for this non-compliance to be 9:30 9 minutes, 30 seconds completed. We have uh strong support from the partners with whom we have signed agreement and outlined these NAP 9:38 9 minutes, 38 seconds products and as I said earlier uh we are just waiting for the uh remediation 9:46 9 minutes, 46 seconds related inspection uh and uh if everything is going well we will be well well on the way to 9:54 9 minutes, 54 seconds actually be able to demonstrate the promise that has shown to us agreement. 10:02 10 minutes, 2 seconds But see this issue is very near-term right? So this issue was only persistent for the last 6 months but prior to that 10:10 10 minutes, 10 seconds in 2018 we had done a conference at CPHI something like that in Europe and we 10:17 10 minutes, 17 seconds were speaking about NIP and the products. Sir, so uh if I were to consider any generic molecules in which 10:25 10 minutes, 25 seconds we are providing this differentiated uh delivery uh products sir 10:31 10 minutes, 31 seconds on a conservative basis that how much of the market can actually shift to these kind of products uh which are either the NIP or the kind of products. 10:43 10 minutes, 43 seconds Yeah. So uh see this is there here uh 2018 was the period 11:26 11 minutes, 26 seconds These are already picking up in the R and emerging markets. The only question is about the EU markets where this has 11:33 11 minutes, 33 seconds to be commercialized and as Dr. D explained this will happen once we complete our remediation. So I think on the timelines 2018 is when we started 11:43 11 minutes, 43 seconds development is not when we were planning to commercialize. Our commercialization timeline was set for 2026 which has been 11:50 11 minutes, 50 seconds moved up by a year or so just because of the UGMP remediation process that we are in. 11:57 11 minutes, 57 seconds Right. So where should I look at our business from uh FR27 perspective in terms of topline and bottom line? Where do we see uh uh our business growing? 12:10 12 minutes, 10 seconds Well um we start with what we have in our hands is our uh abilities in emerging market. you'll continue to see 12:17 12 minutes, 17 seconds the uh uh action there because uh one by one most of these MIT programs are also getting 12:25 12 minutes, 25 seconds registered in our market where we already have a business uh as you must 12:31 12 minutes, 31 seconds have uh noticed by now. uh we have uh in place now a fantastic team of business 12:38 12 minutes, 38 seconds development uh region wide and uh very dynamic uh leader of the team has joined 12:45 12 minutes, 45 seconds the company recently we hope even in the energy market is three we don't know I 12:52 12 minutes, 52 seconds can't give you the numbers yet but I can uh I uh I'm sure that uh there will be 13:00 13 minutes strong traction in the NIP products we are all excited about you know getting registered one by one in the markets that we have and uh this 13:09 13 minutes, 9 seconds year you will see demonstration of that in the ROW and energy markets in terms of the business uh that we can get for 13:18 13 minutes, 18 seconds these energy products and of course a critical milestone is the remediation uh for our EU uh uh you know accreditation 13:28 13 minutes, 28 seconds uh uh which is expected will be by June or July. 13:33 13 minutes, 33 seconds before that and uh after that we already have the agreements in place. 13:39 13 minutes, 39 seconds So we are politics uh we have uh and as you know said we have made 13:47 13 minutes, 47 seconds various announcements like uh you know some of our products getting approved by TDA in Australia. A few books getting 13:55 13 minutes, 55 seconds approved in UK NH our filing has been consistently 14:04 14 minutes, 4 seconds progressing and few announcements have been made about the um approvability of some of our products during these 9 14:13 14 minutes, 13 seconds months. So the EU certification or UK inspection and qualification these kind 14:22 14 minutes, 22 seconds of inspections will be the trigger for the business moving forward and that's when we can give you better numbers 14:29 14 minutes, 29 seconds right so so would it be fair to assume that post this uh EU uh uh inspection clearance uh we can scale our NIV plus 14:38 14 minutes, 38 seconds product revenue to 20 K plus on a quarterly basis giving a number right now will be 14:48 14 minutes, 48 seconds preatured as the bot progress right uh so that was from thank you so 14:55 14 minutes, 55 seconds much and all the best thank you so much sir so next question comes from the line of ash chat gi from 15:03 15 minutes, 3 seconds a capital finance please go ahead ma'am hello thank you for taking my question I wanted to know a bit uh about when is the audit for this uh UGMP. Thanks. 16:04 16 minutes, 4 seconds produced and uh several action taken reports have been submitted to the authorities and u 16:11 16 minutes, 11 seconds by this time uh excepting for one or two points related in the kapa um 16:19 16 minutes, 19 seconds most of the points have been considered as resolved by the authorities in responses to the action taken reports. 16:27 16 minutes, 27 seconds They have also indicated uh to our partners uh who are uh uh related to this audit 16:35 16 minutes, 35 seconds um that uh they would intend they were intending to come in the first or second uh financial year and not the financial 16:44 16 minutes, 44 seconds year the first or second quarter of the year. 16:47 16 minutes, 47 seconds uh the first quarter is almost through I think they take about 1 to one and a half month uh uh you know the set date 16:55 16 minutes, 55 seconds and that's about month two or month and a half before they actually come in. So we believe April, May or June would be 17:04 17 minutes, 4 seconds the next quarter would be we would be we would have a specific date where we would be told when the authorities will 17:11 17 minutes, 11 seconds use it to actually inspect the kapa kapa has gone on and we are very positive 17:17 17 minutes, 17 seconds about the way the the team or the operations team has handled this issue 17:25 17 minutes, 25 seconds uh respecting the patient and taking proactive action to show an improvement in the entire quality concern of the company. 17:36 17 minutes, 36 seconds That's where we are with the cover and uh of course we have uh also been preparing different inspection because 17:44 17 minutes, 44 seconds uh we uh cannot uh wait for some uh milestone we have 17:51 17 minutes, 51 seconds been filing uh the you know for the six inspection in a couple of countries 18:00 18 minutes related to the alternate facilities we have transferred them product and in the process are in the process of 18:08 18 minutes, 8 seconds transferring two more products to alternate sites uh whereby uh uh 18:13 18 minutes, 13 seconds the entire uh MIT business uh timeline uh regardless of this uh inspection so 18:22 18 minutes, 22 seconds that has been going on uh now regarding your quarter number I think I I'll Mr. 18:32 18 minutes, 32 seconds And uh based on what what we have at this moment maybe 18:38 18 minutes, 38 seconds uh uh addition to the number uh if they are available quarter four would be in a 18:47 18 minutes, 47 seconds single line. So uh since it is individ numbers but it can be a single line. 19:01 19 minutes, 1 second Got it. Uh and uh regarding the alternate uh sites that you mentioned that you're transferring the product, where are the sites located and uh 19:11 19 minutes, 11 seconds more than that because we need information 19:19 19 minutes, 19 seconds and uh this will have an impact on our margins right uh given that we are taking the other side. Uh if you could 19:27 19 minutes, 27 seconds quantify the impact, it has a nominal impact. It will have a nominal impact. 19:33 19 minutes, 33 seconds Not uh uh something where something 19:41 19 minutes, 41 seconds we would also be having familiar manufactur right. 19:47 19 minutes, 47 seconds Okay. So uh if I understand correctly for the contract manufacturing business 19:54 19 minutes, 54 seconds uh the net impact will be actually the cost it takes us to manufacture for our cost it 20:02 20 minutes, 2 seconds contract manufacturing for us it is a very small addition to the entire cost the margin 20:10 20 minutes, 10 seconds remains potentially okay so uh then with all your uh like 20:18 20 minutes, 18 seconds poor four or five products that are supposed to be launched. When do we see the impact of launch given that you clear the uh EUGMP audit? Will it be the 20:26 20 minutes, 26 seconds second half of the year when we see an uh sharp update? If you could uh just give a timeline to that 20:36 20 minutes, 36 seconds year or more in the last quarter we are we doing last quart. 20:48 20 minutes, 48 seconds Got it. And so how much of spending are required for this capa repudiation and everything like uh the recent fund raise that you did uh how much of that is 20:57 20 minutes, 57 seconds utilized for all this regulatory process? How much of that? 21:02 21 minutes, 2 seconds How much uh like uh how much funding do you need like for uh doing this KPA and everything like how much of the fund raise that you did? What amount have you 21:11 21 minutes, 11 seconds utilized for this all this regulatory process? 21:14 21 minutes, 14 seconds Uh I think uh my uh explain this to you better because uh this is a plan. I I 21:23 21 minutes, 23 seconds just said that we are planning uh to uh to have a commercial issue. uh and then 21:30 21 minutes, 30 seconds the uh at this moment I would say that uh we are comfortable with the funding that we have planned earlier in the last 21:38 21 minutes, 38 seconds year from the kapa and we are comfortable with uh that uh 21:45 21 minutes, 45 seconds you know the budget that we have we are well within the budget but we are uh uh planning to have a uh you know a surplus 21:55 21 minutes, 55 seconds of research so that uh after uh it's some comment would come up during the remediation inspection, we should be 22:02 22 minutes, 2 seconds ready to be able to uh uh bring any other compliance that is required and put it in place very fast. But this is 22:09 22 minutes, 9 seconds just a a budget so that uh and and a plan to keep something aside for uh remediation 22:18 22 minutes, 18 seconds just in case something we have and what we have done and the time that we have taken and we are very 22:25 22 minutes, 25 seconds near the uh end uh end game and we are waiting for the authorities to just announce the dates. 22:34 22 minutes, 34 seconds any amount that you would want to quantify for this capa regeneration uh whole thing that is uh going to happen. 22:41 22 minutes, 41 seconds Yeah. So out of the funding what we are taking around 35 cr around 10% we have allocated further. 22:50 22 minutes, 50 seconds Got it. Got it. And so uh could you please reduce the inventory days and receivable days for this uh uh GQ third quarter or 9 months? 23:07 23 minutes, 7 seconds They are on the same line inventory which should be around inventory is around 94 days and DC will be around 105 days. 23:19 23 minutes, 19 seconds Got it sir. Thank you. That's all from my side. 23:22 23 minutes, 22 seconds Thank you ma'am. Participants we kindly request you to restrict with one or two questions in the initial round and get back to the queue for the more questions. 23:31 23 minutes, 31 seconds The next question comes from the line of Mr. Dautam Gupta and Indonesian investor. Please go ahead sir. Thank you for letting me speak. Uh Mr. 23:39 23 minutes, 39 seconds Daw, I want to ask about this preferential issue that why do we have to do do this preferential issue at this price that would uh to Florent region? 23:53 23 minutes, 53 seconds Hello. Well then uh we've just given you the uh that's already there in the 23:59 23 minutes, 59 seconds public defend for that we have a small uh capital remaining and we think that 24:09 24 minutes, 9 seconds in the interest of the company and its investor it's not prudent to borrow uh this kind of uh money at this moment 24:18 24 minutes, 18 seconds uh when uh we are well funded for the the the business that we are But we need to complete and tie up 24:25 24 minutes, 25 seconds certain end which would result in uh better cost control, better margin for the company uh better regulatory 24:33 24 minutes, 33 seconds compliance as well. So all those initiatives which were on uh on on the line at some point which were to be 24:41 24 minutes, 41 seconds funded and we had uh not had this uh non-compliant uh after the inspection 24:50 24 minutes, 50 seconds and uh based on that we would have internal for these things are necessary 24:57 24 minutes, 57 seconds and need to be done. So and now we are leaving the fund uh for uh 25:05 25 minutes, 5 seconds all investor the investor and uh the interest of all investors that as well that the company completes its capex 25:14 25 minutes, 14 seconds program initial capex program so that it is well prepared for the next wave where 25:20 25 minutes, 20 seconds the MIT business take strong action and uh for the future in the future we do 25:27 25 minutes, 27 seconds not come across um uh very evenly we can change the culture and the infrastructuring and create the kind of business that we are looking for. 25:39 25 minutes, 39 seconds Just as we are at the bottom of the cycle that we are uh having a delever 25:46 25 minutes, 46 seconds right now and we can see that the end to this tunnel is just three to four quarters away. Then why do we have to do 25:53 25 minutes, 53 seconds this at this price that to to the director or the person who was already an investy in the company prior to this? 26:01 26 minutes, 1 second That was such a big chunk around 9 to 10% of the company. That is my main concern regarding this. 26:10 26 minutes, 10 seconds Well, it helps the investors doesn't it? 26:13 26 minutes, 13 seconds Instead of company getting uh overage and taking on more debt, 26:21 26 minutes, 21 seconds this is a better way to go to investors who are new to the company and know the company and believe in the company trajectory. Um 26:29 26 minutes, 29 seconds and uh suppose the management uh in achieving its target in spite of the 26:38 26 minutes, 38 seconds small event that has happened here for a very long time. 26:43 26 minutes, 43 seconds for a year and it's I think if the existing investors benefit uh at this moment 26:51 26 minutes, 51 seconds uh from u whatever uh uh advice 27:15 27 minutes, 15 seconds Yeah, it's not it's not uh I think it's a but not by any of Shadows 27:24 27 minutes, 24 seconds and all all minority shadows have been negative and the right issue can also be done. If 27:31 27 minutes, 31 seconds that's the case, right issue can also be done if that's the case. 27:39 27 minutes, 39 seconds Right. Have you considered doing the right issue instead of preferential issue? Yeah. 27:47 27 minutes, 47 seconds that uh the promoters has to be then contribute and as of now we are uh not not of that on that anchor. Thank you. 27:56 27 minutes, 56 seconds Okay. Thank you so much. 27:58 27 minutes, 58 seconds Thank you sir. Next question comes from the line of Mr. Dashil Pandya from Trust Capital. Please go ahead. 28:05 28 minutes, 5 seconds Yeah. Hello. Uh hi. Am I audible sir? Yeah. 28:09 28 minutes, 9 seconds Yes sir. Just to take over from the previous participant uh and then I have some questions for the main business sir. the the participant the issue that 28:16 28 minutes, 16 seconds you know we see as a uh as an ambassy is that you know uh such a big investor coming again in in the in the company and then you know uh there there might 28:25 28 minutes, 25 seconds be some selling in the company again in in near future we do not know and such such issues are being highlighted in in the past also. So that was the concern 28:33 28 minutes, 33 seconds of you know giving one big chunk to the to an investor rather than know us distributing to some other people as well. So that you know there is not a 28:41 28 minutes, 41 seconds pressure on the company in near future whenever there is some good or some bad news. So that was something that you know we wanted to highlight as well. uh 28:50 28 minutes, 50 seconds but I hope that you know since management has a relationship with I think we have 28:58 28 minutes, 58 seconds to an investor who comfortable with the way the company is managing it affairs 29:05 29 minutes, 5 seconds and as of today uh if you see um as of today the the industry hold up in 29:13 29 minutes, 13 seconds totality about 90% Can I hear that? Earlier we started with 29:22 29 minutes, 22 seconds 23% right. 29:27 29 minutes, 27 seconds So earlier the questions are coming from the people that why Matthew was telling and why they were reducing their equity. 29:36 29 minutes, 36 seconds So as a matter of confidence they said okay then whenever you need fun they added. So as a strategic investor what 29:43 29 minutes, 43 seconds Dr. doubt mentioned that uh to just show the confidence that uh we are going on the right track he added uh he was he 29:51 29 minutes, 51 seconds offered so become you know it goes through it will become 22% 29:58 29 minutes, 58 seconds a few it will become 18% he actually started with 22 and then there was a 30:05 30 minutes, 5 seconds period when it was diluted about 11% now he confidence in the the way the management is running this company. 30:16 30 minutes, 16 seconds Correct. 30:17 30 minutes, 17 seconds We came back. So that is what confidence in that. So when the money want to borrow and show that on the balance 30:25 30 minutes, 25 seconds sheet and it need to complete this regardless of 30:31 30 minutes, 31 seconds whether it has the business because regulatory cannot wait for the business to start right. 30:41 30 minutes, 41 seconds company has looked at it in a very uh legal way and in the interest of all the shareholders. 30:48 30 minutes, 48 seconds Correct. No, absolutely sir. We understand that you know investors uh trust is kept on with the management just that you know nothing else and I 30:57 30 minutes, 57 seconds hope that you know this is this is this turns out to be in a good way for investors. Uh thank you for the answer. 31:03 31 minutes, 3 seconds Uh sir second question is on the farmer segment which has you know which continues 31:14 31 minutes, 14 seconds and a and in that only in the neutral understood. Yeah. What what we are doing 31:21 31 minutes, 21 seconds is we are disolding our remarks and the numbers of this growth number specifically because uh the bigger would 31:28 31 minutes, 28 seconds be any regulatory market acquisition that the company has now going forward where you know us informing our 31:36 31 minutes, 36 seconds shareholders on where we would end up with the would be a much more logical and realistic uh way of describing the 31:45 31 minutes, 45 seconds future course of the company. As of this moment uh we are a real humanity. So we are saying that our country and emerging markets will continue to grow and 31:52 31 minutes, 52 seconds deliver because we are taking all the measure on a conservative basis where we have strengthened our emerging markets team. 32:01 32 minutes, 1 second uh I already spoke about the kind of people who have joined and uh you know in a position to uh you know uh 32:12 32 minutes, 12 seconds even without the regulatory market entry with our products. Um 32:19 32 minutes, 19 seconds uh I believe the company will start doing uh well with the products in the emerging market and the kind of uh other 32:27 32 minutes, 27 seconds products and uh the kind of other offerings that we have for the the existing market using clients. So it 32:36 32 minutes, 36 seconds will continue to grow the film and NIP business as a percentage of the entire business. So we 32:44 32 minutes, 44 seconds have shown quarter to quarter you know uh action in those uh operating 32:52 32 minutes, 52 seconds regardless of being in Europe that will continue but will continue because more registration more have been filed and 33:00 33 minutes registrations are coming in the market and so and now with a very wellkindled business development team they're 33:08 33 minutes, 8 seconds expecting better result in a quarter or two the would be able to see that understood. 33:16 33 minutes, 16 seconds We'll wait for your update on this. 33:21 33 minutes, 21 seconds Sorry for interrupting you. Request you to join the queue for more clear sir. All right. Thank you. 33:26 33 minutes, 26 seconds Thank you. The next question comes from the line of Mr. Deep Shanchetti from Mia Finance. Please go ahead sir. 33:37 33 minutes, 37 seconds Deep Sher. Please go ahead with the question sir. 33:44 33 minutes, 44 seconds There's no response from DP sir as I'm taking the next question from Amit Bashai and Minister please 33:51 33 minutes, 51 seconds okay the question sir 34:00 34 minutes Amit Baj please go right to the question I don't find any response from Amit su so taking the next question from Mr. 34:10 34 minutes, 10 seconds Rohit Balakrishna from IT PMS. Please go ahead. 34:15 34 minutes, 15 seconds Good morning everybody. Yeah, sir. Uh I just wanted to uh first understand uh your base business 34:25 34 minutes, 25 seconds uh uh this was a good quarter. Uh so how do you see uh this quarter Q4 in terms of the base business? 34:38 34 minutes, 38 seconds people on the line of the already involved 34:47 34 minutes, 47 seconds we are and we are going ahead with the base business as and we have already there was 34:55 34 minutes, 55 seconds conventional growth 10% of things like that uh the NI business inside the base business is showing increasing traction 35:03 35 minutes, 3 seconds NI and business and with you in the port. 35:11 35 minutes, 11 seconds Okay. So there are no uh geopolitical headwinds. I mean basically last uh 35:19 35 minutes, 19 seconds quarters we were going through some challenges. Uh yeah are evening out but not all 35:26 35 minutes, 26 seconds together and this moment we can give a uh all we can say is that it'll be 35:33 35 minutes, 33 seconds similar to the last quarter because historically Q4 is our uh heavy 35:44 35 minutes, 44 seconds quarter usually a very uh good quarter so so you don't see any change in that uh is uh what I Yeah. 35:53 35 minutes, 53 seconds As of this moment. Yeah. 35:57 35 minutes, 57 seconds And on the uh uh on on on this uh in the procedure of funding you mentioned we 36:04 36 minutes, 4 seconds have making one block for a for a product. So from from what I can mean is that we've not yet received the uh 36:14 36 minutes, 14 seconds uh MA for that. So uh what is it that uh I mean so when can we expect that and uh 36:22 36 minutes, 22 seconds because you're going to put more money so uh what gives you that comfort and how are you thinking about uh uh the timelines towards getting the MA etc. 36:34 36 minutes, 34 seconds We believe uh uh we already have this uh one product uh one block with a separate 36:43 36 minutes, 43 seconds block because the product requires a separate block to be there. We believe what we 36:50 36 minutes, 50 seconds saw we will be able to have an accredited by uh I think the next March 37:00 37 minutes and this should become the second type of because there's one product we feel has a potential to 37:09 37 minutes, 9 seconds actually make traction to the companies 37:17 37 minutes, 17 seconds jumping because it's already in shortage in Europe and all on the regulated market. So once we start manufacturing 37:24 37 minutes, 24 seconds this product, this is also a really measure because the existing facility as well as what it is to a separate 37:33 37 minutes, 33 seconds site. Uh we've given actually two places where we cover them and continue to manufacture this product because the volume are very high. 37:44 37 minutes, 44 seconds according to the agreements that we have signed. So it's a very strategic product for us and that by March 2020 we will have this block converted into a site. 37:56 37 minutes, 56 seconds It's not that we will not be able to manufacture now in the existing facility but uh converting it into a separate 38:03 38 minutes, 3 seconds facility a separate uh site with its own u um acronym uh makes sense for the 38:12 38 minutes, 12 seconds company and it just depend on one type of product 38:21 38 minutes, 21 seconds you're saying March 26 or March 27 March 28 we will start converting is the existing block into a site. There is 38:29 38 minutes, 29 seconds already a block in our promises. It can become another site. So we will continue to use this block. Um but we will 38:38 38 minutes, 38 seconds convert it into a site by market. It doesn't actually affect um the manufacturing capacity that we 38:46 38 minutes, 46 seconds have. uh it ultimately benefits the company's uh operation in terms of a very key product that the company has 38:54 38 minutes, 54 seconds where it believes that it can uh achieve some kind of a dominant position in several markets. So you have two sides 39:02 39 minutes, 2 seconds for this going forward and that's uh the company makes the company customerable 39:11 39 minutes, 11 seconds and in terms of the approval for this sorry for no can I just finish this question uh I need back is just a follow up to 39:20 39 minutes, 20 seconds the we have to give a fair chance to all the other participants in the interest of time request you to join back to the queue 39:29 39 minutes, 29 seconds thank you sir the Next question comes from Deep Shetty from Mana Finals. Please go ahead sir. 39:38 39 minutes, 38 seconds Please go ahead with the question sir. El is unmuted. Yeah. Am I audible now? Yeah. 39:46 39 minutes, 46 seconds Uh the question was regarding the fund raise only. Uh do you think that was the the price at which we did the fund raise 39:53 39 minutes, 53 seconds uh was the fair value of the company and what benefit does the strategic investor get? Hello. 40:02 40 minutes, 2 seconds Hello. I didn't get your question. 40:06 40 minutes, 6 seconds I'm saying that the price at which we bought uh we got the strategic investor. Do you think that was a fair price? 40:16 40 minutes, 16 seconds Is it it is in full compliance of the guidelines. 40:26 40 minutes, 26 seconds It's a fair price because of the guideline for bringing in a prop issue. 40:33 40 minutes, 33 seconds I you know my thinking whether it's a fair price or not a fair price doesn't matter here. 40:41 40 minutes, 41 seconds Thank you. 40:45 40 minutes, 45 seconds Something you will agree with me is that some internal approval that the company was looking forward to to be able to 40:55 40 minutes, 55 seconds different capex initiatives to prepare the company for the future growth and traction that we believe once we enter 41:02 41 minutes, 2 seconds the regulated market we will have. uh we we shouldn't wait all the business to 41:10 41 minutes, 10 seconds restart to be able to do those things because that will actually put us behind and in the future that could lead to 41:16 41 minutes, 16 seconds more technical uh and uh logistics issues we wanted to avoid and that's in 41:24 41 minutes, 24 seconds the interest of the company's overall strategy to enter the European market 41:31 41 minutes, 31 seconds customers also agreement that has been uh are of substantial uh nature. they 41:38 41 minutes, 38 seconds are very important for their company's growth uh and uh sustain sustainable 41:45 41 minutes, 45 seconds growth in the European market and uh the best way you know and for the investors as well as the customer the best way for 41:53 41 minutes, 53 seconds this community to go forward is to actually manufacture these products in a compliant uh in a GP compliant 42:03 42 minutes, 3 seconds atmosphere so that uh that confidence in the customer is that whatever happened was an accident 42:12 42 minutes, 12 seconds and uh move on from this 42:21 42 minutes, 21 seconds also capacity is being increased uh through these capex initiatives because uh as I said that we have a an excellent 42:27 42 minutes, 27 seconds ROW and emerging market team now led by a very capable leader uh who has been experience so 42:37 42 minutes, 37 seconds it's a capacity learning exhibit learning uh you know I think the incoming the and actually 42:45 42 minutes, 45 seconds demonstrating that the high R&D cost that the company incur uh actually result in 42:56 42 minutes, 56 seconds the investor expect the queue the participants in the 43:06 43 minutes, 6 seconds interest of time we request you to stick with two questions in the initial round and get back to the queue for more questions. Next question comes from the line of Mr. 43:14 43 minutes, 14 seconds Ashwoka from Akalia in Musco. Please go ahead sir. 43:18 43 minutes, 18 seconds Uh thank you for allowing me sir. Mike again a question is regarding the preference alertment. Sir uh just say 43:25 43 minutes, 25 seconds said investor had not any any trust in the capability of the management and also promoters and was holding a large 43:33 43 minutes, 33 seconds number of quantity of shares and he sold out and again we are gaining sales to the same investor. Why management has 43:40 43 minutes, 40 seconds got trust in uh this investor where uh that same investor doesn't have a trust in the capability of the uh management 43:49 43 minutes, 49 seconds and the promoters and also s this allotment is done at the last three years lowest price not at the highest 43:56 43 minutes, 56 seconds highest price suggest I am unable to understand many replies given during the call so it is not justifying the 44:04 44 minutes, 4 seconds allotment so I suggest that it should be cancelled immediately if not allowed say that 44:14 44 minutes, 14 seconds uh what you could ask a question uh with the other intors because you already 44:22 44 minutes, 22 seconds asked it why didn't you I'm saying that you know I don't have any control over it 44:30 44 minutes, 30 seconds you must choose this investor that every investor has a right you know buy share in fact uh The idea should be that we 44:39 44 minutes, 39 seconds must appreciate that this investor came in the moment the company needed money and and it will be addressed from other 44:47 44 minutes, 47 seconds shareholders that there is a debt on the um you know balance sheet beyond what we have already. 44:54 44 minutes, 54 seconds So uh that's how it has been done in selling or whatever when the company we 45:01 45 minutes, 1 second have come forward and so is competent with the direction the company is taking. 45:06 45 minutes, 6 seconds So any investor including the investors present in this call cannot be blamed for selling or buying the share when uh 45:14 45 minutes, 14 seconds they I mean uh at least the investor is showing his confidence in how the company is moving forward 45:23 45 minutes, 23 seconds uh and he's putting his money on the line. So uh if if the all other investors felt 45:31 45 minutes, 31 seconds that this is a bad fight we wouldn't be having this fight as I understand 45:41 45 minutes, 41 seconds as I understand from your reply that company was unable to raise the fund via dep because equity is always a costly 45:49 45 minutes, 49 seconds affair and since our accounts are not proper there or something like that so we are unable to raise the fund there by 45:57 45 minutes, 57 seconds so we raised our equity at a such a lowest price. 46:02 46 minutes, 2 seconds No, I think this is the important part is that we needed the swiftness. The speed was important. We needed this fast 46:11 46 minutes, 11 seconds because we need to complete this project and the customers are looking for supply quickly. So that is why we went to an 46:19 46 minutes, 19 seconds investor who is trusted, who has confidence in the management so that this process could be done very speed. 46:25 46 minutes, 25 seconds So speed was of utmost importance here and price wise like I have already said and Dr. As mentioned it is a semandated 46:34 46 minutes, 34 seconds price on the base of last 90 days traded volume. So that is not much we can do there which is the reason we have gone 46:42 46 minutes, 42 seconds to this investor and done this uh raise because we did not want debt and we wanted this money to so what I was 46:51 46 minutes, 51 seconds wanting to ask that it's not that the company was unable to raise that the fact is the company did not want to deb 47:02 47 minutes, 2 seconds this company was unable or any of the bankers in India was unable to give fast money to company. I'm saying that the 47:10 47 minutes, 10 seconds company did not want the new in the interest of the balance sheet and the other shareholders and what they look at 47:16 47 minutes, 16 seconds and the kind of person all investors including the promoters have in mind uh the balance should be stable and able to 47:25 47 minutes, 25 seconds service on it and management. 47:37 47 minutes, 37 seconds Have you already alerted the guest or are you going to answer? 47:40 47 minutes, 40 seconds Sorry to interrupt you. Sorry to interrupt you. So sir request you to come back and join the queue for more questions. Oh sure sure. 47:48 47 minutes, 48 seconds Next question comes from the line of Maitricia from Saka Capital. Please go a Hello. 47:58 47 minutes, 58 seconds Sure. Hello. 48:00 48 minutes Just one question. uh you mentioned that our NIP products are doing well in the regulated in the emerging markets and uh 48:08 48 minutes, 8 seconds um so could you give me like a quantification of what the sales are from emerging markets and what the sales are from regulated markets for the current 48:15 48 minutes, 15 seconds I already been provided I can that again yeah I think see regulated markets is not there right now the entire business 48:24 48 minutes, 24 seconds is coming from R and markets so the entire sales that you see of the innovative product from emerging 48:32 48 minutes, 32 seconds markets. There is no regulator sale in there right now. 48:36 48 minutes, 36 seconds Okay. And uh once this uh remediation is done, we can expect sales coming from the regulated market. So any sort of 48:43 48 minutes, 43 seconds targets you have of what percentage of uh NIP not products would they contribute to the total overall revenue? 48:51 48 minutes, 51 seconds I think like you said we don't we don't want to quantify it right now. Once UGMP comes back, that will be a better time to quantify this. you will have better 48:59 48 minutes, 59 seconds visibility. So in coming quarters we will be able to give you that number. Okay. Thank you. 49:07 49 minutes, 7 seconds Thank you ma'am. The next question comes from Awander. Please go ahead sir. 49:14 49 minutes, 14 seconds Good morning. Uh so I just had two questions. The first question was um uh am I audible? Hello. 49:21 49 minutes, 21 seconds Yeah you're a Yeah. Yeah. Yeah. So the first question was in terms of key hires like I I think 49:28 49 minutes, 28 seconds that is a very solid move and I congratulate you on that. I just wanted to understand like I mean um 49:37 49 minutes, 37 seconds uh how much value can we extrapolate from RO and farmer emerging markets which are key ro and emerging markets 49:46 49 minutes, 46 seconds that you're currently targeting since we genuinely have a very broad and width of products 49:55 49 minutes, 55 seconds understand markets in Middle East and CIS at this moment we believe the the kind of 50:04 50 minutes, 4 seconds product that we have very good opportunities there and uh 50:11 50 minutes, 11 seconds we are looking at about 20% growth markets. 50:19 50 minutes, 19 seconds Got it. Got it. So these are ex Bangladesh right? Because Bangladesh we are very heavy as a company. So these are ex Bangladesh we focusing on Yeah. 50:26 50 minutes, 26 seconds Yeah. Yeah. Yeah. 50:30 50 minutes, 30 seconds in totality but is uh the 20% growth of come from uh Denmark. 50:40 50 minutes, 40 seconds Got it. Got it. Got it. 50:41 50 minutes, 41 seconds And we talking about the formulation business here not the pi business. 50:49 50 minutes, 49 seconds Bangladesh. 50:52 50 minutes, 52 seconds Yes. Yes. Yes. Definitely. And uh the second question was regarding uh like how is the buyer confidence or the 51:00 51 minutes people who we partnered with in Europe like I mean like I just wanted a sentimental check like I mean how 51:08 51 minutes, 8 seconds exactly is the buyer confidence? They have been very supportive and we have been in constant touch with 51:14 51 minutes, 14 seconds them and uh you know we are quite a transparent company in terms of what's going on inside the company and we believe in sharing with these guys also 51:23 51 minutes, 23 seconds in the quarter. So we have been keeping them a breast on it all the action happening here including action taken 51:31 51 minutes, 31 seconds and the report that have been filed with the authorities. Every time the policies come back with some uh formal note about 51:38 51 minutes, 38 seconds uh what what have been expected and uh the especially the dates uh on uh at 51:46 51 minutes, 46 seconds which they are looking at you know visiting for infection or infection all those things are being shared with them 51:54 51 minutes, 54 seconds uh we keep meeting them uh at this moment I would say the friends really enjoy their support and we looking forward to uh launching these in their 52:03 52 minutes, 3 seconds own markets. Um also they are you know also engaging with the authorities at some level to expedite inspections in their own 32 weeks. 52:17 52 minutes, 17 seconds Got it. 52:19 52 minutes, 19 seconds The products as well that is very good. Thank you so much for your time. Thank you. 52:26 52 minutes, 26 seconds Thank you sir. The next we have a followup question from Sid Balakrishna from PMS. Please go ahead sir. Yeah, thanks for the chance again sir. 52:35 52 minutes, 35 seconds So just two questions. One was uh uh just so on just on the previous question that I was asking uh so from uh so while 52:44 52 minutes, 44 seconds you said that you'll be able to make it as a separate uh facility by March of 27 52:52 52 minutes, 52 seconds but you can still uh uh uh manufacture from your existing plant. uh so I just 52:59 52 minutes, 59 seconds wanted to understand by when do you sort of see this contributing because I I feel that you've not yet got the MA from 53:08 53 minutes, 8 seconds uh for this uh so that was my question actually but when do you see this we are about yeah so we are about to receive the MA 53:18 53 minutes, 18 seconds we have completed the required number of days the moment uh uh youly 53:28 53 minutes, 28 seconds uh very in our hand. Uh I think within a couple of months we're going to have the MA also in our hand and in some uh 53:35 53 minutes, 35 seconds products in some uh territories like UK we have already done the MA 53:43 53 minutes, 43 seconds and uh uh you know being prepared so that once we are inspected or once they can start 53:52 53 minutes, 52 seconds supply we got the made from UK you said. Sorry I start. 53:59 53 minutes, 59 seconds Yeah. Yeah. We we have one MA from UK already there with us. One MA from Australia for one of the product already 54:07 54 minutes, 7 seconds there. Um we uh we have few u 54:16 54 minutes, 16 seconds ready to approve uh product. uh the uh I think about five 54:23 54 minutes, 23 seconds projects are already under approval that means the moment we have completed we would get there 54:32 54 minutes, 32 seconds because the finding the sub right no actually I was asking about the 54:39 54 minutes, 39 seconds specific product was my question I know that we've got the from my question was spec specific to this product that we 54:47 54 minutes, 47 seconds have which for which we are trying to create a yeah we areing Yeah, we are on the at the last fragment of our NA in UK. 54:58 54 minutes, 58 seconds Uh and uh even in Europe the last we waiting 55:05 55 minutes, 5 seconds uh to be over again. 55:16 55 minutes, 16 seconds So uh so uh uh so essentially you are expecting some things to happen in financial year 27 post receal of MA in the audit right? 55:26 55 minutes, 26 seconds Yes for this product. 55:29 55 minutes, 29 seconds Yes. Okay. Uh second question on this was sir. So uh you mentioned that you 55:36 55 minutes, 36 seconds have uh given all your uh almost everything uh from the kappa point of 55:43 55 minutes, 43 seconds something just left but more or less it's done and you're expecting an audit sometime in uh the next 3 4 months. Uh 55:51 55 minutes, 51 seconds so and also you mentioned that you have uh initiated one product transfer and also initiating product transfer for a 55:58 55 minutes, 58 seconds few more products uh in terms of site transfer. Yeah. 56:01 56 minutes, 1 second Yeah. Two more will be transferred to different sites. 56:06 56 minutes, 6 seconds So sir if let's say there will be an uh 56:13 56 minutes, 13 seconds let's say there is some delay because of unexpected reasons etc in the audit. uh 56:19 56 minutes, 19 seconds what is the how do we see like the site transfer like can you just explain that 56:26 56 minutes, 26 seconds process? Yeah. Yeah. Once the time transfer happens then with the 6 months of stability for these products we can 56:35 56 minutes, 35 seconds file variation and introduce this alternate site as a site. um uh the sites we have in mind are already 56:44 56 minutes, 44 seconds registered or registerable in uh the various uh regulated market that we are looking at 56:52 56 minutes, 52 seconds and uh within uh it's I think after 6 months of stability and all those things can filing 56:59 56 minutes, 59 seconds application can be done and after the filing application it requires within 3 to four months for the variation to be 57:07 57 minutes, 7 seconds accepted and uh then we can start manufacture ing sites and supply according to the agreements that have come. 57:18 57 minutes, 18 seconds Okay. So worst case you're saying that this year uh this the coming financial year you will have some sales from the 57:27 57 minutes, 27 seconds uh exact side the last quarter that's what 57:34 57 minutes, 34 seconds and if and in case request you to come back to me. 57:42 57 minutes, 42 seconds Thank you sir. The next question comes from Pra from Alis Financial Partners. Please go ahead. 57:49 57 minutes, 49 seconds Uh hi thank you for the opportunity. Uh my first question is a bit margin improved sequentially that remain under 57:58 57 minutes, 58 seconds pressure on a 9th month basis will management expect margin normalization 58:09 58 minutes, 9 seconds depending on the product. I think the entry into uh uh Europe and the regulated market is one inflection point 58:18 58 minutes, 18 seconds where you will see u the market improving uh what we have been doing 58:24 58 minutes, 24 seconds very fast on quarter to quarter bas the proportionate sales of these 58:31 58 minutes, 31 seconds products in regulated market territory uh is another ball game and the margins 58:38 58 minutes, 38 seconds and uh the business which are going on uh will be additional. So there are effects addition to the existing 58:46 58 minutes, 46 seconds business and also uh addition of high volumes. So both these effects will be 58:53 58 minutes, 53 seconds in our Okay. All right. Next question is 59:04 59 minutes, 4 seconds depreciation expenses increased. Is it primarily due to recent capitalization 59:10 59 minutes, 10 seconds of regulatory and facility upgrade investment? 59:17 59 minutes, 17 seconds See the process where completing the projects has done okay that is been giving uh uh incremental uh to 59:26 59 minutes, 26 seconds depreciation because we have several phases. One by one the process has been completed and used 59:34 59 minutes, 34 seconds that will transfer in the long runation part. 59:41 59 minutes, 41 seconds Okay. 59:48 59 minutes, 48 seconds Thank you ma'am. In the interest of time that will be the last question for the day. Now hand over the floor to the management for closing comments. 1:00:02 1 hour, 2 seconds So, thank you very much for joining us on this call 1:00:09 1 hour, 9 seconds and u we appreciate the patience and the interest that the investors have shown and uh we 1:00:19 1 hour, 19 seconds want to assure all the investors couldn't hear and that we'll continue to 1:00:25 1 hour, 25 seconds work towards uh is always pick up and of course uh thank you for your patience 1:00:33 1 hour, 33 seconds and thank you for your understanding that this is a just a hiccup in the long uh 1:00:40 1 hour, 40 seconds history and all the uh good effort that this company has put in are very positive about coming uh out of 1:00:49 1 hour, 49 seconds uh and evolving this and we well on the way to delivering uh on the promises 1:00:55 1 hour, 55 seconds that uh uh the company has in the form of the focus that it has 1:01:02 1 hour, 1 minute, 2 seconds and the it has I think the strategy remains the same and 1:01:09 1 hour, 1 minute, 9 seconds we look forward to present interaction during the coming quarter in form of 1:01:16 1 hour, 1 minute, 16 seconds being able to give you u better results and uh in good performance better 1:01:23 1 hour, 1 minute, 23 seconds performance of the all. Thank you very much. Have a good day. Thank you. 1:01:30 1 hour, 1 minute, 30 seconds Ladies and gentlemen, this concludes your conference for today. Thank you for your participation. You may disconnect lines now. Thank you and have a pleasant day.