Ladies and gentlemen, good day, and welcome to the Q1 FY24 earnings conference call of Gufic Biosciences Limited. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and anyone who wishes to ask a question may enter star and 1 on their touchtone telephone. To remove yourselves from the queue, please enter star and 2. Should you need assistance during the conference, please signal an operator by pressing star then 0 on your touchtone telephone. Please note that this conference is being recorded. I now hand the conference over to Ms. Ami Shah, Company Secretary and Compliance Officer of the company. Thank you, and over to you, Ms. Shah. Thank you, Melissa. Good afternoon, and a very warm welcome to everyone present on the call. Along with me, I have Mr. Pranav Chokshi, CEO and Executive Director, Mr. Devkinandan Roonghta, CFO, and SGA, our Investor Relations Advisor. We have uploaded our results and investor presentation for Q1 2024 on the stock exchange website and on the company's website. Hope everyone had a chance to go through the same. Now let me begin with an overview of the business for the third quarter. Starting with the Indore facility, we are pleased to inform that the validation of the facility is on track for completion by September 2023, and commercial production is all set to begin in October 2023. Coming to the critical division, we were able to retain our leadership position in the lyophilized injectables within the antifungal and antibacterial segments. Our broad-based portfolio is making a strong comeback, witnessing growth across key molecules. This resurgence follows several quarters of subdued performance, largely attributed to post-COVID inventory buildup. Our first division molecules have undergone a comprehensive market mapping, encompassing around 8,000 hospitals across India. We have established presence in 6,000+ hospitals with the 92 molecules that were launched. We are also happy to announce that Gufic has secured DCGI approval for the manufacturing and marketing of Dalbavancin, and we are the first company to receive such approval in India. Trials for substance involving Immunocin Alpha have concluded successfully, and we anticipate DCGI approval by Q3 of this year. On the Ferticare business front, the introduction of an enhanced human menopausal gonadotropin marks a significant step in boosting the success rates of IVF cycles. This advanced formula aims to reduce the chances of cycle failure. Gufic's strategic investment in developing recombinant alternatives to critical hormones used in infertility treatment positions us to be self-reliant. The development work for these alternatives is well underway, and we anticipate product readiness within 15 to 16 months. Thymosin alpha 1 trial targeting endometriosis treatment has been successfully concluded, marking a significant achievement in our commitment to tackling complex reproductive health challenges. Coming to the healthcare Stellar and Spark division, the successful launch of our new zinc-based multivitamin has been warmly received in the market. This strategic addition has expanded our portfolio and bolstered our presence in the mass market division. Also, our brands, Gufic and Gufibiz, are making steady strides, gaining traction in their respective niche categories. As these categories evolve, we anticipate these brands to experience substantial growth. Coming to the Aestderm and Neurocare division, our successful completion of a split-phase trial comparing Stunnox against a product from the market leader has yielded remarkable results. This achievement has not only created awareness but also instilled confidence in our offerings with the applicator fraternity. We intend to leverage the insightful findings from this study to drive further awareness and accelerate market development efforts. The inauguration of our training center, Ariesia, in Mumbai, has marked a significant milestone. This center facilitates training on innovative therapies that combine cutting-edge machines with the utilization of fillers and botulinum toxin for face and body contouring. This strategic initiative not only cultivates awareness about Stunnox but also curates our specialized applicator, applicator base, carving a niche, a niche segment for our products. To effectively tap in the neurology segment, we have assembled a specialized team boasting extensive domain knowledge. This team is equipped with the necessary skills and connections to strategically target this critical segment, ensuring a focused approach and meaningful impact. Lastly, on the international business front, we have received one new product approval from Colombia and two new product approval in Philippines. Our strategy from Europe and Latin America centers on leveraging our existing formulations in countries where we have established our presence. Simultaneously, we are also targeting new countries based on market gaps and opportunities, ensuring a comprehensive approach to expansion. With this, I'll now hand over the call to our CFO, Mr. Devkinandan Roonghta, for the update on Q1 FY24 results and financials. Thank you. Thank you. I'm going to highlight the financial results of Q1 of 2023, 2024 versus Q1 of 2022, 2023. Total revenue from the operation for current Q1 is INR 195 crore, whereas previous year it was INR 165 crore. EBITDA is INR 36.4 crore for current Q1 of the current year versus INR 33.6 crore Q1 of the last year. EBITDA margin for the current Q1 is 18.6%. Last year it was 20.3%. profit after tax for current year is 20.6%, last year it was INR 21.1 crore. Tax margin is 10.6% compared to 12.6%, there has been increasing mainly because that's been reduced because of increasing in the finance cost. Own contribution has been gone for Indore CapEx plant. Thank you. Y es. We can start, we can start with the phone call. Sure. Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may enter star and one on their touchtone telephone. If your questions have been answered and you wish to withdraw yourself from the queue, you may enter star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question from the line of Pujen Shah from Congruence Advisors. Please go ahead. Hi, team. My first question would be on the launch of Dalbavancin. Could you just spell out the market sizing and how we are figuring out, because we are the first company to get the approval. How we are looking into it, and what are the, like, assumptions built onto the revenue and profitability for this specific? Fine. Pranav, Dalbavancin actually is basically a gram-positive antibiotic, which is in line. When we consider the current market size in terms of the market represented, we have to consider the current available option. The current available options would be a combination of linezolid, vancomycin, and teicoplanin, which totally comprise to a market of more than around INR 600 crore, approximately INR 500 crore-INR 600 crore as per the ORG-IMS. If you see till now in India, most of the infections were gram-negative, and then we saw a survey of mixed infections coming in. We foresee that gram-positive, along with because of the onset of mixed infection, which is a combination of gram-positive and gram-negative, the year to stay. That's why this will be a very unique tool in people in addressing this thing. If you understand Dalbavancin, the main advantage what it has is, it is to be used on the first day and then directly on the eighth day. Unlike other injections, where everything has to be used on a, you know, on a daily thing. I don't foresee that Dalbavancin, of course, immediately will. First, I'll tell you the good points, and I, then, then tell you the negatives also of Dalbavancin, which will help you maybe understand a little bit more about the market insight, and then that's why I'll come to the projection. Dalbavancin advantages are it has to be used on the first day and the eighth day, so the ease of compliance is there for the patient. This is a very good for patients which are normally going for any single day operation or any single day therapy, and they have to be discharged in 3-4 days. Something like a knee replacement or some any soft tissue infections where the the process is hardly to be hospitalized for 3-4 days, this is a very effective tool, where the doctor can be rest assured that the patient is protected against any infection due to the surgery for a longer time, even though he's not, or he or she is not going to be in the hospital. The advantage is the ease of use. It's a much more stronger antibiotic. It is also the advantage of resistance to be formed against this molecule. As of now, what data is available is much lesser than others. The negative part. The negative part is that the pricing, of course, because this is a new molecule, it is, it comes with a premium, so the cost is much higher. The cost of therapy of this product is almost, as of now, around, two, two and a half times what we have done. This is also comparing teicoplanin. The reason we have done two and a half times, because still, if you compare this with the international market, this is still one-fifth the price of an international product. However, in India, when you see, since always, always medicines are available in a much more economical manner, still it would be two, two and a half. We foresee that initially, for the first, one year, two years, this will be the drug of reserve for intensivists. However, for, you know, ortho surgeries or cardiac surgeries, especially, you know, in endocarditis, this can be the first drug of choice, when other molecules are going to give a resistance. Keeping all these factors in mind, the price balance along with the advantage what it has of the molecule, we foresee that it should start with around maybe anything between around 3%-5% market share in year 1. Gradually, we foresee that, in the next 3-5 years, as the pricing becomes better, as we also introduce much more efficiency in terms of our production and efficiency in terms of our scale of operation, we foresee eventually this will be the drug of choice, maybe a 30% market share in the next 3-5 years. And I hope down the line it should... Because of the ease of using it, maybe once in a week, that is, and also, I mean, used to be used only twice, on the first day, on the eighth day, it is, it is going to be a very good tool. I hope that in the next five, seven years, once other resistance comes up and the safety is established more, this should be a big chunk of the total gram-positive market. One more reason Rupshik has actually worked on this molecule is because, internationally, this is going to be, gram-positive infections are much bigger in Western countries. Since this molecule has already been approved by us for India, we will launch India, of course, first. Eventually, our target is to take care of the, you know, from Indore to the countries like Europe, I mean, countries in Europe and US and Canada, you know, and South Africa, where gram-positive infections are much more. I see a much bigger traction happening initially for these markets first, and eventually India should catch up in the next three to five years. Okay, sir, that was a quite detailed answer, but just wanted to follow up on that, that if we wanted to get on the export side, so do we need any registrations or approvals specific from U.S. FDA? It will take us two years at least, yeah. We will have to take the step, you know, batches, stability, and then, in some countries, we might require to do some small trial also where it's not introduced. Okay. My second question would be on the dual chamber bag. If, sorry, if I missed, I haven't read the detailed presentation what you have presented, but just wanted to know what is the update about the dual chamber bag, how it's going on and, how we are planning to go further with it? Yeah. Yeah. Dual chamber bag, as I mentioned in the last call also, was launched keeping in mind meropenem and pip-tazo. Unfortunately, we got only a 15% approval from the NPPA in terms of price increase. For piperacillin-tazobactam we could not launch it. Eventually, we decided to launch only for meropenem and sulbactam and meropenem. That will be launched in the month of... I mean, it's already, I think, as we speak, it should be entering the market space right now. It could be launched along with the teicoplanin molecule also in the month of September. This quarter, that is, Q2, will see the launch of dual chamber bags in India by Gufic. Okay, got it. Sir, for the congratulations on this first deal. We are doing a very well for product profile for this first. We are growing excellent for that. Congratulations on that, sir. Thank you. That was the two questions from me. Thank you. Thank you. We have the next question from the line of Ayush Mittal from Mittal Analytics. Please go ahead. Good afternoon, sir. Am I audible? Yes, please go ahead. Yeah. First of all, I'd like to share my appreciation to the team for the nice work you have been doing. It's heartening to see so many new product launches and things taking place for our company and we being able to build upon our past track record. I have a couple of questions from Prerav. First, given that a large expansion is coming up and it's almost near completion, how do you plan to utilize it going forward? What are we doing to, given that we are already one of the largest lyophilized player, how will such a large CapEx that we have done get utilized? Some thoughts on the utilization, part one. Second, how do you see this as, as we start doing more of our work in, in our own brand name, how do you see the conflict as a contract manufacturer to the larger companies? Yeah, Mr. Mittal. I'll answer your first question that, yes, currently our immediate plans from Indore would be to take care of the domestic market. We are both purely from our front end as well as contract manufacturing for some of our current clients, as well as, of course, new clients, which we are coming up, and we already have started targeting them. What we have done, we have identified around 323 molecules, which can be made in this particular facility. Out of that, we have... All this is based on the YG IMS and the business analytics. Then we have seen who are the top 10-15 players of that and what is their current source of, I would say, the products. Some of them which currently are, and if via scale and via automation, and also with the new ruling of QR code and track and trace and traceability part of it, these are the USPs which we as a company would start offering to our existing clients here. Let me be very clear that at least for the first year, the capacity utilization would be from India primarily, because, you know, first we would have to apply for a WHO, then followed by an EU and a US and so on, and which normally takes post commercialization at least one and a half year at least to get that done. Side by side, of course, the almost 10-15, I would say actually more than that. Initially, maybe on an average, it would be 20% capacity on the end 12 months usage. Otherwise, initially, 30%-40% of the capacity would be used initially to come up with validation batches, and this would be required for creating dossiers and documents and to be filed for international markets. That would be another capacity utilization, which of course would come at a cost to the company. Eventually, they would be sowing the seeds for, you know, much better expansion and also price realization. As you know, India would be year 1, but as and when those same products are taken to the international markets, the price, the margin would be much better, and also the pricing and the advantage also would come, and we would be realizing that. Front end would be a thing, so the, as I mentioned before, Sparsh is one way where the front end would be increased. Even for that matter, Gufic Critical Care has come back with a bang now. I foresee that with other exports coming in, Navsari facility would be mostly choker block with capacity by 2024 end. I'm saying on a pessimistic way. Optimistic way, it might be choker block by around June 2024, because we already are now seeing orders which are till October and November. We foresee that this will help us. Indore will help in a very big way to not only de-risk, de-risk our operations, but also to take care of the excess capacity from Navsari to Indore, which will of course, be primarily in year one for India and then the other markets from year two, depending on the accreditation. Answering your second question, would it be an issue? I don't think so, because in India, that's the beauty. You know, the pharmaceutical market right now is around INR 210,000 crore. We foresee that even, I mean, again, I don't want to quote anything, if you see all the different pharma-... business at analytics for even the reviews of what we get for the India market and the projections what we get. In the next 9-10 years, we see the Indian pharma market going to be anything between INR 7 lakh crore-INR 9 lakh crore. In 76 years, it has been INR 210,000 crore, and now coming to INR 7 lakh crore-INR 9 lakh crore market in the next decade, let's assume. We are looking at almost a 3-4 times increase in market size itself. Anyway, that is where I'm looking at that as a worst come worst condition that, you know, we international markets goes for a toss, the Indian market is there to back us up, and that's why the investment also done in the facility has been very unique. Even though having such a huge capacity of 2 crore ampoules, I mean, 2 crore ampoules, 1 crore vials, and 50 lakh lyophilized vials per month, we still have been able to balance the investment, where others normally take the same investment would be around anything between INR 800 crore-INR 900 crore or INR 1,000 crore as such, for such a capacity. We have managed and balanced using expertise to make it quite a compact offering, and we hope we can take it forward. Sorry, specifically answering contract manufacturing and the thing about front end, because the market is going to expand so much, everyone have their own unique channels, and they have their own unique set of clients. And also, if you see the market itself, also is more than happy to accommodate multiple players. You know, there's some markets also, I normally work in the field, I hear hospitals saying that, "Gufic, we will only like..." All the hospitals and the nursing homes also de-risk themselves. They don't completely buy everything from Gufic. Even if they have a 50%-60% Gufic share in terms of their pie, they always keep any two, three other clients always there to de-risk that business. That's why I always feel that the business of contract manufacturing and, I would say our own branded business will go hand in hand, because we have some unique propositions as a company, which always the client would re-desire. Dalbavancin being such an example, and some products coming in the future. We also are very, very, we always have been very fair with our clients, that, you know, whatever the pricing, the MRP and the entire plan is very transparent, where it's a win-win for both of us. I don't foresee any conflict as such, but, yes, it can get challenging, but there's always a solution for that. Okay. We have been talking about ramping up our exports in a significant manner, but we don't see it in the numbers still. Any thoughts on that? That's what I'm saying. If you see the most of our capacity is still mostly utilized in Southeast Asian markets and Germany and followed by India. Whatever benefits we are getting in numbers should start. You know, the Brazil or Canada market always starts with a particular gestation. Even Russia, for that, I have started with a gestation. Even if you see this time's numbers of the major growth, apart from Sparsh, has been critical care and exports. Whereas the, you know, business like contract manufacturing has little bit, again, suffered a further dip. Again, not because of lack of orders, but it would be lack of capacity, which we are trying to divert to our own products and our own front end. With Indore coming in, we feel that little bit of that solution should come up. More and more we get, I mean, moment Indore comes, a little bit of our domestic business should be shifted there eventually, and that would free up a little bit more of our export capacity, which should take care of it. We foresee, like I said, 15%-20% growth year-over-year would be taken care of by these two things. That is where export would play a big role. Okay. Okay. my last question is, more around this statement you just now said that the CapEx that we have done, somebody else would have, for similar size, the cost would have been maybe INR 800-900 crore, while we have done it at a very, very reasonable value. any references for this number? Like, No, no, no. -how can we- Please don't draw me to references. Yes, there you can always have, you know, market information, and there are always. There was a deal which happened last year, where the capacity was 1/3 of ours, but it was sold at almost 2 times our investment. Just an example of that. Also, it depends on the selection of the machine, it depends on the selection of the civil plant, the compactness, the packing line, and end-to-end. I didn't mean that, I mean, we have done a greater. I mean, what I, the point what I was trying to make is, we have not. Tomorrow, the survival in this plant of export and this, what you call in domestic market, is a pure buy, say, of the running cost and the capital investment which you put in. The capital investment has to be amortized on the next 3-5 years, and the running cost also has to be managed. What I meant to say that since we have been in the field for, of lyophilization injectables since the last, I think, 30-40 years, that is even before I was born, so we have certain expertise to handle that on a much more efficient manner because of our core company, nothing else, in pure humility. That is what I feel, that tomorrow, it's no use, you know, buying the best of machines. I'm talking about everything from Europe or something, and putting a big investment when you know that eventually the per vial cost is something which is going to help you penetrate the market. In that, in context, I have mentioned that the investment has been little bit, I would say, balanced in terms of achieving our objectives, entering the right regulated markets, at the same time, taking care of the, you know, running costs by minimum, I mean, by having maximized automation and minimum other overheads. Okay. which might be redundant. That's what I meant. Yeah. Got you. Got you. Thank you, and wish you all the best. Thank you, sir. Thank you. We have the next question from the line of Akshada Deo from Vivo Commercial Limited. Please go ahead. Hello? Ms. Deo, your line is not clear. Please, could you, you know, adjust the audio? Hello, is this better? Yes, please go ahead. Yeah. Hi. I wanted to know what was the capacity utilization for Navsari plant for this quarter? Ma'am, we would be pushing right now anything between around 80%. That reason also being 80%, because there are other preventive maintenance and, you know, media fill and other activity which happen for validation in those years also. Commercial utilization will be around 80%, which we are almost on the brink to pushing, and that is right on the brink. That is the current capacity utilization. One more reason why I mentioned a lot of products which we have registered, this is regarding to the lyophilized form. Of course, we also have a penem block there in Navsari, where the utilization is approximately 35% as of now. Okay. Okay. I think I wanted to know what was the mix of exports this quarter? Export normally is around 20... I don't know the exact rupee value, but on an average, as you see, get the, get these reviews on a moving at MAT level, it's always around some 15%-20% of our revenue. Okay. I just wanted to know the reason for the dip in margins this quarter. I did see that critical care section had more volumes. Was that the only reason? Again, I think Roongta sir will be in a better position to answer that, but I don't foresee any change in gross margin. I think, Roongta sir, can you please take this point, sir? Basically, if you see the GC, no, GC has been maintained at 51% this time. The margin has been reduced because of the increasing other overheads. Other overheads last quarter it was INR 33 crore. This quarter, it has increased from INR 33 crore to INR 39 crore. There has been increasing around INR 6 crore, mainly because of the R&D expenses, validation batches, as well as filing of dosage. All these, because of the Indore capacity also, R&D cost has been increased, and that was the reason for the dip in the EBITDA margin. Okay, sir. Can you just give me the exact numbers on spend on R&D this quarter, and what is the plan for the rest of the year? Yeah. Just to elaborate, I'll just clarify what sir meant, because R&D, it's more of a combination of R&D and testing. Every R&D is basically done for the product once. Once the product is developed, then when we have to take the product on the international market... Like, I'll give you an example of liposomal amphotericin B. Liposomal amphotericin B was already launched in India. Now, in order to take a product to Brazil, in order to take the Brazil to a product to Germany or any other market, we have to take the R&D stamp, which is the innovator's product, and then we have to compare that product with our product in the form of a laboratory. We have to do at least six to seven different tests, which cost us only INR 1 crore per product. Normally, if it was just Europe, then that same test can suffice to all the countries in Europe, plus South Africa, Canada, Russia, and so on and so forth. Normally, for a country in Brazil, the product itself has to be brought, it have to be purchased from Brazil. It has to be so locally in Brazil, and then it has to be compared. This is just one example I'm saying. Like that, in this quarter, we have done certain tests for liposomal amphotericin B, plus, as I think Ayush mentioned in previous things, the launch of 2 products. 1 product that is for infertility, where we are doing a head-on trial versus Menopur of Ferring. The second product would be there for endometriosis, so that was, that is where the clinical trial comes. That again, would be an additional addition. Like that, I'm just giving two, three examples, but such things which we have taken little bit more on our, I would say, focus, has increased the, I would say, cost, from the other expenses. Otherwise, if you see the running cost or the employee cost, our gross margins are similar. We have an opportunity which we feel that right now, I believe there's an issue of some supply of Menopur in India. There's a big opportunity for us, which is a total INR 220 crore market, where out of that, Menopur is almost, you know, 15%-20% market share. It's a good time for us to hit the market, provided that we. do a proper 200 patient study and prove that our product is as effective and as, you know, give the deliverables what a product made in Europe would do. That's why some expenses have done. Answering your question about how this would look, we always have a plan of increasing the R&D, because, as I mentioned before, we are doing a lot of trials on our biological platform of vaccines also, and also for our topical and in terms of our other botulinum toxin drug delivery systems. I foresee that this increase in, what do you call, expense on the trials, and when I mean trials, clinical trials, both human and animal trials, as well as certain dosage related to lab tests, would continue for the next year also. Okay, that was quite a detailed answer. I would just like to know if you have planned any numbers specific, and what was the number for this quarter? Again, the number, again, I think I can get back to you on the number, but Roongta sir, do you have any specific number? It would be around INR 8-9 crore per quarter, normally we spend. Yeah, I will get back the numbers. All right. Thanks. We will get back to you, ma'am. I think if you can get your details with us, we'll send a communication to you. Oh, that would be great. Thank you so much for your detailed answer. I'll get back in with you. Yeah. Thank you. We have the next question from the line of Nitya Shah from KamayaKya Wealth Management. Please go ahead. Yeah. Hi, sir. Congrats on a good set of numbers. I just want to understand now, recently, the NMC has announced that, you know, you aren't supposed to give the brand names anymore, it's just the molecule that will matter. I just want to understand, what would, according to you, be the impact of this? Will it be positive or negative for us? I think a very, very good question, and I, I don't know how to answer this question properly, but I'll try my level best. I'll just give you an example. When you have a multivitamin, where you have more than, you know, eight, nine vitamins, plus iron, plus, you know, some protein or something to be prescribed, I, I, I can't understand how a generic product can be prescribed that way. If, I mean, you expect the doctor to write those 20, 30 things, even in terms of some, you know, fixed dose combinations or in terms of even, three products in one or four products in... I don't know, I don't know if the practicality is there to do that. At the same time, I'll just give my opinion. If today we are going to remove the power away from the doctors, which is a medical fraternity, which is responsible for people's health, and give it in the hand of a chemist, because in the end, if the doctors don't decide which product to give, the chemist will decide which product to give. If the chemist decides which product to be given, then he will decide that what is the best margin available to him. Right. I don't know. Again, I know that I'm not answering your question, but I'm just saying that I don't think it's a very practical thing. Of course, a lot of representation has been done by the industry, and more than are the IMS, IMS, I mean, sorry, IMC is much more concerned about it, because then for us to be a proper generic country, we are more than happy. There should be a uniformity of manufacturing standards all over India. Unfortunately, the manufacturing standards in India are still not uniform state by state. You will see a lot of companies who manufacture, who have WHO-GMP, but still do not adhere to the GMP standard, which is a very sorry state. Again, I'm trying to be as politically correct in this reply, but I feel it'll be a big challenge to, I would say, drive this move. And if it happens, it'll be chaos, according to me. That's it. We have all these brand power and these big, big... I mean, more than me, I think I'm a very small fish in this. More than me, the big pharma companies of India would be in a better position to answer that, because it'll be a bigger, bigger headache for them also going forward. Again, I'm sorry I did not answer your question, but I hope you understand my standpoint. I think we will take it as it comes. We'll take it as it comes. Yeah, yeah. Great. Okay, all the best, sir. Thank you. Yeah. Thank you. We have the next question from the line of Bhavya Sonavane from Samasta Capital Private Limited. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity. I just have one question. You have been mentioning that, you know, CritiCare is back, you know, as showing a comeback. I just want to understand, what kind of growth can we see going ahead? Overall, are we increasing the addressable market for CritiCare going ahead, if there's any plan about that? Yeah, that's it. Yeah, absolutely. I think, let me divide that into two parts, because Critical Care has been launched, keeping in mind, I mean, is currently taking care of most of the new age, anti-infective and other markets. Plus, we have come up with these divisions under CritiCare, which are MyoCare, PrimaCare, where the PrimaCare market actually goes to the rural market and to the primary healthcare center. We have a MyoCare, which is mostly for a center for, you know, going to, going for products which are mostly servicing the oncology industry, as you know, the secondary line of therapy, not the primary, the secondary line of therapy. Always there are plans to increase the base of CritiCare by adding new, new products. The market representative also increased. I think Ceftazidime/avibactam, which was launched, in January, sorry, January or February, has seen. I think that is one brand of ours, which in the last, which has featured in the top 20 brands in the last 12 months of India. Like that, we have planned to also launch some antifungal on, I would say, oral products. As I mentioned before, I think a gentleman asked me, dual-chamber bags also would help us to increase the addressable market in terms of patient compliance. Plus, there are some new molecules which we have launched, plus Sparsh has come for those other products which will be catering. There are almost, I think, 130 odd SKUs there, which are there to take care of these other primary and secondary markets. That is how the interest goes. The only issue sometimes what we face with Critical Care and Sparsh would be that these are all, you know, RM-sensitive products. You know, when the RM goes down, the pricing goes down. Even though the growth might be much higher, sometimes the value is not captured because even at a 30% unit growth, the value might just fall down by, you know, another, maybe, maybe 10-15%. Eventually you just see a 10-15% growth, but the actual unit growth is almost 30%. That's the challenge which we have. Nevertheless, I think the market is ever expanding, and with Critical Care and Sparsh and of course a lot of new... Every quarter, at least I know there is a product which is planned to be launched, will ensure the growth continues. Understood, sir. Is it fair to assume the growth in CritiCare will probably be ahead of other, I mean, will it cross 15%-20% expectations? Oh, yeah. Like I said, 15%, 20%, as we say, I would say anything between 10%-15%, keeping in mind the erosion in prices what we have, because that's one product which, like Dalbavancin, I gave an example, it always starts off with a high MRP, and then you see an erosion happening in terms of MRP, in terms of the price to the market. Keeping in mind, anything between 10%-12% in terms of value is our target, which internally would come to anything between 25%-30% value grow, unit growth. That's how we target CritiCare. Okay, understood, sir. All the best. Thank you. Thank you. Ladies and gentlemen, to ask a question, you may enter star and one. We have the next question from the line of Yash Tanna from Itaú Portfolio Management Services. Please go ahead. Hi, good evening team, congratulations on a decent set of numbers. My question is on the Indore facility. Right now we have interest costs that is hitting our PNL. How many quarters do we feel before we can break even on the Indore facility, since you mentioned that there'll be filings and that will also come be as a cost to the company. What's the timeline before we can break even on the Indore facility? Roongta sir, can you discuss, I mean, can you add on this, keeping in mind the quarters? Yeah, Our commercial production, we like to start from the Q3 of this year. Q3 of this year, plus Q4 of this year, maximum to maximum, Q1 of next year, we will expect from Q2 of next year, we will be able to break even the Indore project cost. Indore, Faikana first and every, all the parts of Indore. Sorry,Roongta sir, you mentioned Q2 of next year, right? Yeah, Q2 of next year. Right. Oh, okay, thank you. My second question, I think, Pranav sir, you partly answered that, but since critical care is also coming off a low base, and I think exports, we have registrations, and with this Indore facility also coming in, do we think that we can overshoot the 15%-20% guidance that we have given? Similarly, on the bottom line as well, with the Indore costs, do we believe that we can grow 15%-20% on the bottom line as well? I think, bottom line, let's use the word bottom line in terms of EBITDA, yes, because post EBITDA, with the interest in depreciation hitting of Indore, maybe it'll be a different thing. Roongta sir will comment on that. Definitely, EBITDA, 15%-20% should not be issue, and I think Roongta sir will elaborate on that. Coming to your point about the other growth, and then I'll hand over to Roongta sir to talk about the bottom line. The top line, why we give a minimum expectation of 15%-20% is, like I said, you know, critical care and other things, like suddenly they are very price sensitive, which has an impact on contract manufacturing also in terms of certain cases also, maybe sometimes in export also. Last year, we have seen a big yo-yo in terms of price going up last year and then just falling suddenly. The problem with the market, when it, when the price falls suddenly also in the market, they expect you to give a better revision for it. Keeping the unit growth much higher of 25%, 30%, yes, 15% is the bare minimum what we think. Anything higher would definitely add up and should start kicking. Fifteen percent I see is a very, I would say, fair thing to comment right now. If it happens more, I am sure we would love to share that with you. Roongta sir, can you comment on the bottom line part of it? Basically, if you see now, we, our EBITDA margin is going to be maintained around 19, between 19%-20%. Out of EBITDA margin, if the other expenses will also going to increase around 15%-20% compared to last year, and the finance cost will going to start from the Q3 of this year, and it will going to increase by around INR 2 crore per month. There were other increases in the depreciation cost, that is also going to increase around INR 1.5 crore per month. Looking to the top line, we will able to maintain whatever the profit was there in the last year during the current financial year also. Got it. Thank you so much and best of luck. Okay. Thank you. Thank you. We have the next question from the line of Shresth Toshniwal from Erst advisors. Please go ahead. Hi, am I audible? Yes, please go ahead. Thank you. This is on the update on commercialization of carbapenems. I want to ask, what is the range of carbapenems that we are currently supplying? Could you give us an estimate of the market you're targeting here? Is it coming in from Indian companies who are supplying this, or is it coming in from the import substitution that is playing out? You mean the API point of view or the formulation point of view? Can you please... Sorry, I, I missed your question. Sure. Can you repeat that again, please? We're supplying carbapenems, and since there are a range of carbapenems- Yeah. some, some market experts say that if you supply a range of carbapenems, it increases the stickiness of your customers. Am I correct? Right. Right. In, along those lines, what is the range of carbapenems that we are currently supplying? The market that we're, you know, gaining here would be coming in from Indian companies who are supplying carbapenems, or is it, the import, that we are targeting? Oh, okay. Again, I, what I understand, we basically make injectables of carbapenems in India, and we make the entire gamut from mero, imipenem, doripenem... Whatever injectable carbapenem have been approved India, we make all of them. That is the answer to question number one, and the total market size, according to me, would be around, if I'm not mistaken, INR 1,400 crore-INR 1,500 crore. However, I would still get back to you in terms of the ORG IMS data. Currently, we supply in India by buying API. Of course, we have started making some APIs in-house of the carbapenem, which is primarily, 2 of them, which is of course, of the major market size. Otherwise, wherever we don't have the economic of scale, we buy from Indian companies and of course import the API wherever required for our own use. I don't think, I mean, so the sources of the APIs have been well established, plus we have interest in two of them, which are quite, I would say, of scalable in nature. We hope that this, like I said, this was started in August 2022, the facility, so we are hoping to take care, take this facility in international markets also by next year. It has not been designed for US and Europe, but yes, apart from US and Europe, the other countries, we already have started the process of registration. We hope that the penem further should be increased by 2024, 2025 also. I hope I answered your question, because I, that import substitution, I was not very clear, so I tried to answer it in my way. Okay. If I could just ask a follow-up. Yeah. During, recently, when the laptops were banned and other gadgets were banned, there was also talk of ban on, potential ban on antibiotics. Yeah. You mean import, right? You're saying import of- Yes, yes, import of- Yeah. antibiotics. Yeah. I understand that we have significant imports coming in from China, and I think- Yeah. especially in carbapenems. Right. Which poses, to some extent, a national security risk. Yes. How would that ban affect us, and-. Oh, okay. That, I understood that. Very frankly, if you still ask me, the key starting raw material of all the people who are making it in India also still come from China, very frankly, for the carbapenems. Of course, at the same time, I'm very happy that Aurobindo has taken this lead, and they have been... I think their factory, which is going to start making the KSM also, the key starting raw material in India also for penem, should be up and running very soon, or it's on the verge of being started, or it should be. I don't have the exact information about it. Mm. With Aurobindo coming in, I believe there's another company also who's on getting it done. Getting the material is not an issue. Even if the ban happens, we have, of course, two or other Indian manufacturers who are already working on it and should be self-sufficient. Also, like I said, we also are interested in two of the carbapenems to be made in-house, and for that also, we'll be sourcing the KSM from India. There are two companies as of now, which we have started talking to, and we will be validating them going forward. However, I'm sure, if the ban happens, there'll be other mushrooming effect, which will come for others also. I don't foresee any challenge happening right now. Thank you. On the supply side, we are safe, and on the demand side, would that affect the demand for our products? The demand, I don't think if the ban happens, if the supply is enough from Aurobindo, there would not be impact on demand as of now, and also on the KSM. Right now, on the contrary, if you see, penams from last year to this year has just crashed by 40%. Not even 40, sometimes in some cases, in some cases even 80%, of the value of what it was being sold to. That impact has come in that, but I don't foresee that any demand changes. If it's a global shortage and, you know, the products which are manufactured in India, the capacity not sufficient to take care of the Indian market, which would be a problem. Right now, what I hear from, from sources, close to the market, that Aurobindo is creating a capacity which is quite decent, taking care of the international and, you know, domestic market. Plus, there are around another player who's also taking it up. So I don't foresee anything as of now in the next two years, at least, subject to any demand increasing suddenly then. Thank you so much. Thank you. Ladies and gentlemen, to ask a question, you may enter star and one. We have the next question from the line of Vishal Manchanda from Systematix Group. Please go ahead. Thanks for the opportunity. Hope I'm audible. Yes. Sir, please, could you adjust the audio? Yeah. Is this better? Yes, thank you. Please go ahead. I have a question again on the penem plant at Indore, and your total penem capacity is basically. Wanted to understand, what% of the total India volumes, would you be catering to, through your penem capacities? I think, sir, there's some confusion. The Indore facility is not penem. The penem block has been made in Navsari, which was commissioned last year, which takes care of injectable penems only, not orals. The facility in now in Indore, which is coming up, is purely lyophilized injectables, ampules, and liquid vials, along with certain, you know, specialty injections like liposomal depots and also sustained-release formulations in the form of injections. Okay. Can I, now, based on that, would you like to ask me a question which is more specific? I'll answer that specifically, yeah. Okay. Just whatever cumulative penem capacities we have got and what percentage of the market are we addressing that, addressing to that? Oh, okay. The capacity in Navsari, what we have, we, the total penem... The capacity of the Navsari factory can take care of, I think, 40% of the Indian penem market. However, we have ambition because there are a lot of players who do it in India, per se, but a lot of players don't have a dedicated facility who have a dual chamber machine, plus powder filling, plus also lyophilize. That way we were quite unique. Our offering in a penem is not only just the simple powder filling penem, where a lot of players are there in India, which is anyway not our target size. Our main objective in penem would be, of course, international markets, where we'll have the lyophilized and the powder filling products. We have an ultrapenem combined with the meropenem, which, I mean, ultrapenem and meropenem as a part of our product basket, which will make us very unique. Otherwise, you know, different clients need to get some other company registered for powder filling products, which there are many, but not many people are there in lyophilized. Also, it's a dedicated penem block. Not many people have a dedicated penem block subjected with this, just the single machine. The second thing will of course be the dual-chamber bag, which we will, which we are also trying to take to the international market. That is the unique proposition we are trying to cater into. As the scales happen properly, we are looking at backward integration of the bags also, which will make us more. We foresee that we would try the next, I would say three to five years, that because of the economy of scale and our own efficiency in sourcing, we want to get the bags cost as same price at the vials cost. If that happens, which I foresee it should happen to by in 2025, then we see a bigger chunk of the market coming to us. Okay. Okay. Any kind of, would you have orders for your dual-chamber bags from the top players in Indian markets, from a contract manufacturing perspective? Oh, we, we are not in the, this dual-chamber bags will be sold by us only. We are not offering it to anyone at this moment. It will be only sold against the Gufic brand name. Okay. Any feedback that you would have got from the, kind of customers on their, willingness to take these, absorb these dual-chamber bags? Yeah. Since 6 months, since we could not, we did not, we did not get an approval for the price which we desired, we're just doing sampling, and we're getting feedback from the markets in the last 6-8 months. The patient compliance and the, what do you call, the, the overall application by the nursing staff is quite good, and even the doctors appreciate it. I would, I would be in a much better position in the next quarter to give you a little bit more in-depth feedback, because the products are just reaching the market this month. In the Q3 call, I'll be in a much better position to tell you how has been the response now since the company, I mean, since the channel has to now pay money for it, they will be much more upfront with their feedback. Keeping in mind what we have planned in terms of economics, it should be a good product. We are also taking it slow to ensure that there is no other surprises which will come against us. Okay. you're partnered with Technoflex on the dual-chamber bags. Would this partnership be exclusive, or they can, look to partner. Yes. Yes. As of now, it's exclusive. It would be for the next, we have almost more than, I think, 10-year agreement, if I'm not mistaken. I'll get back to you. I think it's a 5 year with automatic renewal of 5 year or something, but again, I'll get back to you on that point. Yeah, it is exclusive, and like I said, you know, it's, it's, the pricing and whatever investment which we have done, the entry barrier would be at least 2, 3 years more for others to come, even though filing a patent and all that. Okay. If you could just share some color on your R&D thought process, because you have been identifying multiple opportunities. Just wanted to understand, how do you kind of what's the... Like, do you have a very do you have a dedicated team that keeps identifying opportunities? We haven't seen other companies being, being able to get products to the market and unique products to the market so often as Gufic. Some color on how do you do that, and... Yeah. We normally have 4 to 5 core competencies in terms of the therapeutic pipeline. Based on that, we have a business development team, which comprises of data analytics as well as medical, you know, I would say, experts. Keeping in mind, we always do a projection or a sort of a forecasting of what will be the next disruptive, I would say, change, which would come in that therapeutic, you know, in that particular therapy in the next 5, 10 years. Most of the source of information is international markets, or it would be our own R&D team, which... We told them that right now we have this particular product, and this is the Zenith. Can you work on some unique proposition in terms of drug delivery system or in terms of, some, you know, I would say, some unique, USPs, which would make it little bit more beneficial? We talk about a differentiation factor, which can be minor to major, depending on the molecule and the pricing point which we have. Then we always back it up, like if, let's say, if we get into the space of anti-infective, which is, of course, a major product, a major product line for us, we try to see what all products are going off patent, what all products are going off patent in terms of a delivery system, or what new development is being happened in terms of is there going to be a big disruption in terms of Like I said, you have a vancomycin, linezolid, and tigecycline, which was once a day for 14 days, 7 days, 10 days, depending on the current therapy. If you have a unique injection, which is just on the 1st day and on the 8th day, and then you don't need to take it for any time longer, it's going to be a disruptive thing. Currently, the price can be the challenge for making it disruptive. Someone has to start somewhere. If we can launch the product now, maybe in 3-4 years, you know, we will be in a much better position to make it affordable, like the things. Like the same thing with dual-chamber bags, as I mentioned, you have to make it at the cost of... First user, we look at, I would say, some unique defects which are there in the current supply. If we can fulfill them with something and then it's, it's not commercially viable, does scale bring the commercial viability? Then we take the decision that we should get into that. Of course, the most important point, whatever decision or whatever selection which we do, has to be having its roots in our core competency, which is in terms of our sales, our, I would say, our marketing and sales. Apart from that, our infrastructure also should be able to make that product. Because after Indore, I don't think that we would be, we would be spending much more of our money in those years in terms of front-end marketing and marketing authorization, and also in terms of market development. Indore would be one of the last major capital investment for us in the next at least 2 to 3 or 4 years at least, till, you know, we get back to a normal thing. That is where how the entire mindset and the thought process works. Okay. Just one final one on StenoX. Yeah. If you could share, what patients, how many patients have we? I think I- have been able to get on StenoX? I believe this is the last question. I think that's why you're not being interrupted by the, I think the operator that, you know, two questions. Can I answer that question, ma'am? Because I'm getting a feedback here that for the next question. Can I go ahead and answer his question? We actually have a participant waiting. Ah. So let me just take this one, and then we'll move on to the next one, because I'm getting these reminders. Please, sir, can you ask your question? Yeah. How many patients would we have on StenoX currently? How is it versus the innovator brand, Botox? How many patients do we have today? I don't know, sir, but I know that for a fact, in the last, I think 18 months or 20 months, whatever, 24 months of launch, totally around 1,428 doctors have used our product as of June 2023. Sir, July 2023, sorry. Every month we get a number where we get the number of doctors who have used our product. How many patients they have used upon, I don't know. Yeah, depending on the sale, we can just make an estimate out of it. This is only for StenoX. This is most for the cosmetic, and we have a separate doctors of around 323 or something, which neurological experts or neurosurgeons or other physicians who have used, Zarbot, which is the botulinum toxin, which we have trademarked for the therapy, I would say, you know, the medicine use karke. So that is the number I have in terms of doctors. I don't have the number in terms of patients. Okay. Thank you very much. Thank you. Thank you. We have the next question from the line of Hitesh Popat, an investor. Please go ahead. Sir, good evening, and thank you for taking my question. As I see, we must be clocking around INR 700 crore of turnover. May I get the divide between CMO and our own branded sales? Yeah, I think 50%-52% would be our own revenue. Around 25% would be CMO. Remaining would be exports and then API. Okay. what must be the operating margin in CMO and our own brand? I would, I think, request, Rumta sir to answer that question. It's very difficult to give operating margin, but I can give a GC margin, gross margin. In case of our own manufacturing, the GC will be around 55%. In case of export, it will be around 60%. In case of third-party CMO business, it will be between 30%. It will be GC, gross margin, to compare with operating margin is very difficult because fixed cost cannot be allocated on the basis of the business, business line. Okay, thanks for sharing the information. Another question would be, how we foresee next three, four years, next leap of growth may come, like, from the existing verticals or existing way of business, or we, we would be intending to enter the higher regulated market like Mexico or U.S. or anywhere? Any idea? Yeah, I think it will be a combination of everything, right? The domestic market itself would grow. The doses which we have filed internationally would, of course, come back and give us. When and how, that international market little bit depends on the regulatory agencies there. Of course, Indore coming in would be a next growth driver. Apart from that, the new product launches, both in the domestic and international market, plus, I mean, for example, Dalba or, you know, dual-chamber bag and so on. Then, of course, botulinum toxin would be another which we would like to ride on. There are many growth factors, and I'm sure one of... I mean, each of them would contribute in their own sweet way. Okay. Uh. Sir, one more question, lastly. Can you share some update on Dydrogesterone? Like, what must be the revenue, existing revenue, and how we are targeting... It is in very nascent stage in India, I believe. Oh, no, now I think it's much more, it's quite, now entrenched and almost reaching to the level of saturation, I feel, my personal belief. A lot of brands have been launched. Yes, I think API would be still the key. If the person who can control the API would be a thing. At the same time, it's a wonderful product because it's gonna grow more and more. In the last 2 years only, you have seen it almost doubling up, so that's a beautiful thing. Our portfolio would be around, you know, I think around 5... Anything less than around 3, sorry, 3% would be of our revenue, would be Dydro last year. This year we hope to make it same% because the growth would also would happen. We all are now waiting for the new drug, I mean, sustained release formulations and others which would help it karke. I feel, yeah, that's it. Dydro, a lot of players are there, but however, differentiated would be the API and followed by marketing strategies. I believe we have our own API, or we are dependent on API also? We have a small capacity of our own API, but we are looking to expand that depending on the market. The pricing is just eroding day by day. We are evaluating whether we'd go head-on and invest so much or we stick to what we have. We are, we are evaluating the current scenarios, but the price has just become half in the last four months only. Okay. Mr. Popat. Thank, yeah. Yeah, thanks a lot for all. Thank you. Ladies and gentlemen, that was the last question. I would like to hand the conference back to Ms. Ami Shah for closing comments. Please go ahead. Thank you everyone for joining us. I hope all your queries are satisfactorily answered by us, and in case if there are any further queries that has been remained unanswered, you can reach out to us or Mr. Devang Bhuta from SDA, our investor relations partners. Thank you once again. We look forward to such interactions in the future. Thank you, members of the management. Ladies and gentlemen, on behalf of Gufic Biosciences Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.