Ladies and gentlemen, good day and welcome to SeQuent Scientific Limited Q1 FY 2025 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing the star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abhishek. Thank you, and over to you, sir. A very good morning and thank you for joining us today for SeQuent Scientific's earnings conference call for the first quarter ended FY 2025. Today we have with us Raja, SeQuent's Managing Director, and Saurav, CFO, to share the health of the business and financials for the quarter. I hope you've gone through our results release and the quarterly investor presentation, which have been uploaded on our website as well as stock exchange website. The transcript for this call will be available in a week's time on the company's website. Please note that today's discussion will be forward-looking in nature and must be viewed in relation to the risks pertaining to our business. After the end of this call, in case you have any further questions, please feel free to reach out to the investor relation team. I now hand over the call to Raja to make his opening comments. Thank you, Abhishek. Good morning, everyone. I am Rajaram Narayanan, Managing Director of the company. A very warm welcome to everybody on the call for the quarter one FY 2024/2025 results. Joining me on this call is Mr. Saurav Bhala, our Chief Financial Officer. This is the first quarter of a new financial year, and I am delighted to share that it has started well for the company. We continue to strengthen our performance and are on course to delivering our plans as per the guidance that we have shared with you over the last few calls. Our transformation program, which was rolled out late last year, has continued to deliver, and all our businesses are becoming more competitive as a result of initiatives we have taken to deliver a better product mix, introduce new products, embed operational efficiencies, and increase our investment on R&D and talent. Coming to the performance of the quarter. In Q1 FY 2025, our consolidated revenues came in at INR 3,902 million during the quarter, which translates to a strong revenue growth of 17.1% when compared to the same quarter last year, that is Q1 FY 2024. Sequentially as well, this represents a revenue growth of 8% compared to the previous quarter. This growth continues to be quality growth, which is seen in the margin and the EBITDA numbers. During the last quarter, the company recorded an EBITDA pre-ESOP of INR 483 million, which is the highest recorded quarterly EBITDA pre-ESOP in the last three years. This translates to an EBITDA pre-ESOP margin of 12.4%, which continues to show an increasing trend in line with our target and guidance. While Saurav will go into more details, I'll share some key highlights. The formulation business, which accounts for 3/4 of our revenues and is spread over multiple geographies, show a strong growth of 21.1% versus quarter one last year. Let me give you an overview of some of the regions. There was strong growth in Europe, particularly in Benelux countries, as there was increased demand due to outbreak of viral diseases. Our teams are very agile and with the help of our partners, we have managed to support the local government in making vaccines available. The continuing work on adoption of new treatments such as [cytol solutions] has helped volume growth in home and export markets for our European companies. Our strong presence at the front end in many of these markets helps us to build strong relationships with innovators for distributing select products. This is a stream of business development which we intend to pursue further. On the whole, the margin improvement initiatives in Europe around portfolio rationalization, pricing, and new products have provided strong momentum to the results. Coming to emerging markets. In Turkey, the government actions on inflation and currency have resulted in an improving climate for investment. This in turn has helped the environment in Turkey to move towards more predictability. Our business has taken judicious price increases while accelerating introduction of new products and extensions. As we have indicated earlier, Turkey is emerging as a good base for exports. We have recently received the EU GMP certification for our manufacturing facility in Turkey. We continue to accelerate exports to other emerging markets from Turkey, which in turn helps in hedging our foreign exchange requirements, in addition to, of course, driving operational efficiencies. Turkey is one of the large markets for animal health, and we have a very strong presence in the market in Turkey, and the priority in the coming quarters is to drive volume growth while maintaining a strong discipline in operations. Our business in other emerging markets has been stable on the whole. We have some positives and in some places, some challenges. Our formulations business in India is poised for growth. We have expanded our team, as we have indicated earlier, and now the team is on ground, and this should begin to deliver results towards the second half of the year. India is a key market for development, and we are pursuing this plan aggressively in terms of products, on-ground presence, as well as R&D. Coming to the other large business, which is API, which accounts for 1/4 of our total revenues. The API revenues for the quarter grew at 14.4% in comparison to the same quarter last year. This is a strong performance coming on the back of a strong prior quarter. Our margin improvement plan has been rolled out well under the name Project Pragati, to which I have alluded a few times. This is a comprehensive program across all work areas in API to deliver operational excellence. Sales from regulated markets remain strong. We are also seeing some positive signs in the demand for anthelmintic drugs, which is an area where we have substantial experience and expertise. Importantly, we are preparing ourselves for the future. The Vizag API facility has received a positive U.S. FDA EIR, which is the Establishment Inspection Report. We've also received preliminary certification from new markets like Japan, and we are in the process of finalizing pre-qualification registrations for supply for WHO products. All of these further strengthen our preparedness for new opportunities. Overall, it has been a good start to the financial year. The animal health market remains attractive, driven by the increasing demand for protein, higher awareness of diseases, and increasing pet ownership. Of course, there are many challenges in the environment, geopolitical events, transformations in technology, and of course, socioeconomic undercurrents. Our company has learnt to be agile and responsive to the things that we can control, and I believe that this capability will serve us better and go for long. I wish to first of all thank all our employees for their resilience and commitment to grow and deliver. Our employees, our business partners, and investors have had a big role to play in this improving performance. We are now poised for accelerated growth while improving margins. The increasing interest in animal health across the world reaffirms our belief that the company is operating in a growing market and is positioned for a larger play in the sector. We will also continue to evaluate opportunities for strategic partnerships or inorganic actions, both in formulations and in APIs. We remain focused and confident that our actions and plans will deliver consistent, profitable, and sustainable growth in the coming years. I'll now hand over to Saurav, our CFO, who with his team, has been at the forefront of the efforts that I've spoken about. Over to you, Saurav. Thank you, Raja. Good morning, everyone. It's my pleasure to be here today and share key insights into the financial performance of our company for Q1 2025. Our total revenue and EBITDA, pre ESOP, for the quarter is INR 3,902 million and INR 483 million respectively. Our formulation business contributed INR 3,002 million and API business contributed INR 924 million. Our European operations have shown robust growth, largely fueled by new business opportunities and results of our portfolio restructuring over past few quarters. Europe achieved revenue of INR 1,571 million, reflecting a 34% year-on-year increase or growth. Emerging markets reported revenue of INR 1,187 million, marking a 36% year-on-year growth in constant currency terms. This increase was driven by decisive price actions implemented in Turkey. India formulation business clocked a revenue of INR 244 million. Moving on to margins. I'm pleased to share that our gross margins have improved by 3.60%, rising from 41.5% in Q1 financial year 2024 to 45.1% in Q1 financial year 2025. This increase is attributed to several operational efficiency optimization measures actioned over last few quarters, such as optimizing the sales product mix, effectively applying price increases across geographies, and improved operational efficiencies in our key business segments. Happy to inform you that our target initiatives to optimize our cost structure and drive operating leverage have successfully led to a notable reduction in our operating expenses. Despite absorbing inflationary pressures across regions globally, we have managed to achieve a 1.1% reduction in our OpEx on a Y-o-Y basis. That is INR 1,291 million in Q1 financial year 2024 to INR 1,276 million in Q1 financial year 2025, reflecting our commitment to driving profitable growth with clear focus on operational excellence. The above measures have resulted in significant improvement in our EBITDA margins pre ESOP. On a Y-o-Y basis, the increase is 9.60%, from 2.8% in Q1 FY 2024 to 12.4% in Q1 FY 2025. On a quarter-on-quarter basis, the increase is about 1%, from 11.4% in Q4 FY 2024 to 12.4% in Q1 2025. We also successfully completed our term loan restructuring process, moving away from multi-geography, multi-bank structure. This restructuring has resulted in simplifying our borrowing structure and governance. It has also helped us in creating additional lines available to support our business growth needs across geographies in the time to come. I thank you all for your continued support and now I request for the forum to be open for Q&A. Steve, can we take the Q&A, please? Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Jagdish Sharma, an individual investor. Please go ahead. Hey. Hi. Good morning and congratulations for the excellent result numbers. I just have a few questions. First question is, could you just throw some light on the reasons behind the increase in EBITDA margin in this quarter? Can we expect this to increase for the rest of the year? This is my first question. Do you have any more questions, Jagdish? We'll take them all together. Anything else that you have? Great, sir. My second question is, what is the reason behind the high growth in Europe, and in which markets you are growing in Europe? This is my second question. You were talking about Turkey and businesses in Turkey. You have said the environment is more stable, right? The performance is going to be sustainable, or what is our long-term market strategy in Turkey? This is my third question. Okay, thank you very much. I think this will help answer a lot of, probably, clarification on things we have spoken. First of all, on increasing EBITDA margin in the quarter, I think, if you remember, we have already indicated last year that towards the end of FY 2024, we would be moving to a double-digit margin. We had achieved 11%+ even in quarter four. To that extent, our 12.4% margin is an increasing trend. It's the benefit which is coming through from both some of the actions and, of course, some of the growth that we are seeing in the market. The EBITDA margin improvement is across all the sectors. In the API business, we have seen, of course, the leverage play in, because when you have sales which are higher, you do have that advantage coming in on account of your operational initiatives that you have taken. The margin improvement initiatives in the API business, coupled with the top line which has come in and the product mix, that's one reason why we are seeing this. As Saurav told you, the gross margins have been steadily moving up, and we have kept costs under control. On the formulation side, the EBITDA margin is largely driven by two markets. One is Turkey, where we have, of course, seen the currency a bit more stable, and therefore our price increases and our volume increases are beginning to play out well. The second place where we have seen this growth is, of course, in Europe, where we had already begun to see for the last couple of quarters an improving margin trend. Of course, in this quarter, there has been accelerated demand on some animal health products because animal health business is typically also driven by periodic outbreaks which happen in diseases. These tend to vary year to year in terms of the intensity. This quarter, there have been a couple of viral diseases which have been more intense, and therefore we've had the opportunity to supply vaccines to some of the European markets, particularly in Belgium and Netherlands, which, of course, has allowed us to take some market share in those markets and gain some top line as well. That's the other reason why we have seen improved performance in Europe. There are a combination of these things which have resulted in increased EBITDA margin. I think the way you've got to look at it is to look at it over a period of a year. I think what we should stick by is that what we have indicated earlier, which is we will move towards ending the year more in mid-teens, and therefore there will be some ups and downs, of course, of opportunity. Directionally, we will move towards a mid-teen margin by the end of the year. I hope that also takes care. In terms of sustainability of performance in Turkey, at this point of time, the government interventions over the last couple of more than two quarters actually, have been consistent. Inflation is gradually coming down, interest rates are going up, there has been increase in the interest in foreign investment in Turkey. The policies also are more stable, and therefore it allows a large company or a company with a big market share presence like us to take more predictable, stable actions in that market. While things are substantially better than what they were a year ago, we have to still be very agile. We are taking the right kind of actions on pricing and volume in that market. Great. Sir, thank you. I will join back in with you for the follow-up question. Yeah. Thank you. The next question is from the line of Vilina Jain, an individual investor. Please go ahead. Hi, sir. Firstly, congratulations on a good set of numbers. I have a couple of questions. Just wanted to understand a bit better what is happening on the India formulation business, which is meant to be one of the growth focus areas. You had mentioned earlier about some discontinued products. Has the supply started for the same? Secondly, there is a mention of vaccine business. Are we manufacturing vaccines? Thirdly, have we seen the full impact of all the cost and Pragati initiatives? Will we see more during this year? Thank you, Vilina. The first question on India formulations, as we have said before, India is an important market which we are doubling down on and for our formulations business. We have a reasonable strength, but I think there's an opportunity which we find to scale up here quickly. The first thing we have done is to scale up our on-ground presence. Towards the end of last quarter, we had begun an expansion on this field, and we have expanded our team by almost 40%. We will follow this up with more expansions towards the end of this year. The India formulation business today, which runs on an annualized sales of around INR 120 crore-INR 140 crore, we expect that this should definitely accelerate in another 12 months-18 months. The people are on ground. We have a very good portfolio, and now it's really about making it available to a larger number of veterinarians and farmers. The third is, of course, to launch new products, which we have begun. We have the strength of being able to quickly import products which are manufactured by some of our overseas companies as well, which are appropriate for the market. Those select products we have begun registering in India. I think this will be a business that is long-term sustainable, and has enough opportunities because in India, we are still really talking at this point of time about the production animals, and that too largely cattle for dairy. The companion animal segment is still to grow. It is nowhere near the size which is there in comparable markets. That's another area which we look for, that we now need to sort of build the foundation. That's what we have started at this point of time. On the question on the discontinued product, yes, we are also distributors for one of the largest companies for a select range of products. One of the large SKUs was not available for most of last year. We have confirmation that this will begin to come back into supply, because their production facilities had an issue. We think that will come back before the end of the year. What you're seeing right now is a bit of the base effect of having had it for a quarter and not having had all of it this quarter. Irrespective of that, we are focused on growing the rest of the portfolio. When that comes in, that will only add to it towards the end of the year. The question on vaccines, we're not in the manufacturing of vaccines. Because we have a very strong presence in market, in the front end in many countries, we are looking at vaccines as being an interesting area to distribute. There are many companies which have innovative vaccines, but they don't necessarily have the front end to be able to distribute these products. The reference to vaccines, which you see in this quarter is the distribution that we have started for one of our partners, who's a strong player in Europe. We have therefore taken back to market in this quarter. That's what we are seeing on vaccines right now. Sorry, what was the third question? Whether all the costs have come into play at this point of time. I think this will be the year where we will annualize a lot of it, because most of the activities, in terms of cost initiatives, were towards second half of last year. We should get annualization benefits. Having said that, we've already commenced version 2.0 of the program because this is a continuous journey. We have a next set of initiatives which we'll again roll out, and we need to keep doing that every year to get the benefit. Yeah. Thank you. I hope that answers your questions. Yes, it does. Thank you. The next question is from the line of Chintan Chheda from Quest Investment Advisors. Please go ahead. Yeah. Good morning to the team, and thanks for the opportunity. Sir, my first question is related to the formulations business. Can you give a split between the volume and price growth during the quarter? Secondly, we were expecting some kind of a 10%-12% growth in FY 2025 on our overall business. With a strong start to the year, should we expect a better growth for the full year? Next is, we have seen a very high interest cost during this quarter. Is there any one-off, and what is the net debt as of 30th June? Thank you. Thank you. I'll take the first two questions and ask Saurav to answer the next two, the third and fourth on interest and net debt. Firstly, on the volume and price, there is a combination of different markets where it is on the formulation side. I would say that on the Turkey business, most of the growth would be entirely price. On the other hand, in the European business, we have probably about 3%-4%, which would be on price, and the rest of it would be largely volume. Yeah. On an aggregate basis, I don't have the number offhand, but we look at it as market by market because the nature of our markets are such that we have strong sort of pricing fevers on account of inflation and other markets we don't. The general direction for us going ahead would be that we would expect in a stable scenario, if you look at a top line, which should grow by 10%-12%, it should be 1/3, 1/3, 1/3. About 1/3 on volume, about 1/3 on pricing, and about 1/3 coming from new products and launches. That's a good sort of mix, which we would expect for this kind of a business going ahead in the future. Given the inflation in Turkey, at this point of time, it's not exactly playing out in that way, but that would be what it is. The second question you had is on, we had given a volume top-line growth of 10%-12% for full year. Yes, we have started well at 21.1%. I think that I would not want to say that this immediately will translate into higher than 10%-12% growth. At this point, a bit early. Let's watch for another quarter or so, because some of it is also because of the base that we had of quarter one last year. I think directionally, all that I can say is that we are on course to deliver what we had guided, which is a top line of low double digits and maintaining EBITDA exits for this year. Yeah. I think, Saurav, on interest and net debt, if you have a specific number. Yeah, hi. Debt level more or less remains same as March. Slight increase, about INR 10 crores or INR 11 crores. The cost has gone up because I explained on the last call and during this call also. We have undertaken a large term loan restructuring process by simplifying the structure. Wherein earlier we had multiple banks in multiple geographies lending at various covenants, and managing that was a challenge. Now, the current structure is one bank serving all our requirements across the globe. Also, we have set that next couple of years of requirement, and we have also created the additional line, in case we need for future business support. Interest has slightly gone up because of that, and this is a short-term phenomenon. I think the interest rate increase which you are seeing will remain so, or the amount will remain so in this next few quarters, and then it will start going down. I think that explains. Net debt. Net debt- Net debt, yeah. Net debt has gone down by about INR 12 crore because our cash flow from operations has been pretty strong in this quarter. Q4 was strong, this quarter is strong, so our cash flow remains to be pretty strong. Yes. Directionally, I think also. Yeah, net debt should be lower. Yeah. Okay, great, sir. Thanks a lot, and all the best. Thank you. Thank you. Thank you. The next question is from the line of V.P. Rajesh from Banyan Capital. Please go ahead. Hi, thanks for the opportunity. Congratulations on delivering on the trajectory that you had described a few quarters ago. Really heartening to see that play through. Five questions. Just a quick follow-up on the interest rates. If you're consolidating, you would expect an interest rate will come down. The second related question is that, is it a floating debt or is it a fixed interest cost debt? That was first one. Second, on the CapEx side, if you can give an update as to what we are going to be spending this year. Third, on the M&A side, we have been thinking about doing some acquisitions and talked about it in the previous calls. Any update on that? Last two questions are first on the business side. Right now, we are 75% formulations. Once you, let's say, get to a steady state, what kind of contribution you are looking between formulations and API? Lastly, on the margins for both of those. Thank you. Sure. Thanks for the question, Rajesh. I'll take first two, and then I'll ask Raja to address the next two. On the interest rate, it is not a fixed rate, it is a floating rate. As soon as the interest rates start going down, you will see a decrease in the rate of interest applicable to our loans. On the amount also, interest amount, we don't see any substantial increase on our borrowings. That's why, in my earlier statement, I said the interest rate should be more or less similar to what you are seeing this quarter for short period, for this year, and then it will start going down. Second, on the CapEx, we have done most part of our investments in last few years, where we have created the base which will support our business operations growth as required for next few years. Having said that, there are various opportunities which we are seeing in our global formulation. The CapEx for the current year is going to be subdued, but it's supposed to be around INR 50 crores-INR 60 crores for the current financial year as a whole. Raja will take on M&A. Yeah. I'll take those other three questions, Rajesh. Thank you for the first on M&A. I think we have always been on the lookout. In fact, just about 18 months ago, we were pretty close to completing a transaction which was there, and then we could not take it further, which we spoke about in our earlier calls. We are very serious about looking at opportunities to grow inorganically, provided of course, there is a strategic fit, and more importantly, it's a disciplined acquisition in terms of what we can do. On the formulation side, we would be focusing on opportunities which may be there on companion animals, largely. The kind of transactions which are right now possible on the formulation side need not be full-fledged companies. It could be assets which are around brands, which could be around licensing things, et cetera. That's what we are right now. As you can see, we are investing heavily into BD partnerships because of the kind of market access that we have in many places with our existing portfolio. It could be bolt-on brands and partnerships. That's one kind of M&A we are looking at. On the API side, our primary interest would be if there's anything which helps us strengthen or shorten the time to market in terms of R&D or give us advantages in terms of scale and intermediates or any other kind of in-housing of operations. It makes us more profitable and competitive. Yeah. We are constantly on the lookout. We feel that after the last 12 months of fixing some of the things which are in-house, we are at a stage where we should be ready to take those on. On the shape of the business, 75/25 on formulation API. It's more an outcome of how different times different businesses grow. We've also been 65/35 at some point of time. We have become 75/25 now. My sense is you should expect that the formulation business will be anywhere between 70%-75%, and the rest of it would be API, depending on which quarter it is and how, because there's also seasonality in these businesses which is there. What is good is that both the businesses have started to stabilize and grow. From the margins on these, we really don't look at individual segment margins. We don't disclose them, but I think both of them are consistently growing, and there isn't too much of a difference between the two versus the average margin of the company right now. Yeah. They're both a little bit above and a little bit below the average gross margin of the company. Okay. Thanks, Rajesh. Thank you. The next question is from the line of Bhavesh Gandhi from YES SECURITIES. Please go ahead. Hi, Bhavesh. Yeah. Good morning. Thank you for the opportunity. One question on my side. When we are calling out a mid-teens margin journey by end of the current year, what sort of revenue expansion is this implicit when we are calling out this sort of a margin number? That's one question. Another one which I had. On the quarter one revenue growth, in formulations especially, since we had culled out and rationalized lot of portfolio on the formulation side through last year, and we got a strong growth number this year. Does that mean that all the excess growth is attributed only to the disease outbreak, and the underlying growth is still whatever you're expecting around 8%-10% on the formulation side? Yeah, those are two from my side. Thank you. Thanks, Bhavesh. First, we've been indicating a little bit more of a two to three-year journey. I think on a two to three-year basis, what we've indicated is that in FY 2024, we would close at double-digit margin. In FY 2025, we should be around mid-teens. Thereafter, our target is to be very quickly a high teens margin. That's really what we have indicated in terms of EBITDA margin. We have said that over the three-year period, we expect the top line to be in the early double-digit growth. I think, on a two to three-year basis, that's basically what we should be. This year could play out on that average right now. I know we've started well in the quarter. I'm hoping that we'll be able to take advantage of the momentum and go ahead. There is some seasonality in these businesses. It's also some of it has got to do with the base of the same quarter last year, et cetera. We would be confident to say that early double digits top line and a mid-teen margin by the end of the year is what should be expected for this year, if not better. The rest for going ahead, we've already given an indication. At this point in time, the plans are going in that direction. On the other part of it, on formulations, on base growth versus the thing. Look, the base growth is very clearly an important driver, and in every formulations business, there are two kinds of base growth-related things. One is after discarding the portfolio. I think on a continuing portfolio of last year versus this year, the volume growth would continue to be, I would imagine, between 5%-7% on most of these markets. There is some pricing growth. Of course, we have got some spike for this particular quarter, which has come because of some additional sales which we have done on account of being available in vaccines. It's very important to understand this area of disease outbreaks, because it is not that the diseases outbreak does not happen every year. It happens every year. The intensity of it varies. Sometimes it works for a particular product we have, sometimes it works for a particular product we don't have. Second, there are other companies which serve this opportunity, and what has happened for us is that we have entered this segment now, the segment of vaccines. The opportunity, if we had not got in, would have been by somebody else, and this has therefore also given us a chance to start pretty much a new line of activity, which is to be distributing vaccines. Right now it is one vaccine, and we expect to hopefully add some more for other innovators as we go along in the next 12 months- 24 months. Yes, there is some spike over this thing, but that's how the animal health portfolio, in fact, any of the disease-related therapies play out. There will be spikes and there will be downs at different times. On a full year basis, I think it will continue to hold to the guidance that we have given. Okay. That was helpful. With your permission, I had one more. On the India business, I don't know if you have called out when can we expect the Zoetis product distribution to be back? I think in the previous call, we had outlined it to be online by July, August. Anything, any update on that front? First of all, we are distributing for Zoetis a range, and it is just that one of the products, which was, of course, reasonably large in that portfolio was the one which is not available. We expect it in the second half of the year to come back. I had indicated August. It could spill into the second half of the year. Got it. Okay. Thank you. That's it from my side. Thank you very much. Any other questions? The next question is from the line of Bharat Sheth from Quest Investment. Please go ahead. Hi. Congratulations, Mr. Raja and Saurav on substantial turnaround in challenging time. Hello? Thank you, sir. Yes, I can hear. We can hear you. Yeah. Thank you. Sir, again, let us go back over the three years successful journey. Pragati 2.0, which you say, clocking phase, lower-teen to mid-teen kind of a top-line growth and high-teens kind of a EBITDA margin. Just to understand this little bit and what will be the debt profile also end of the third year. Would it be, if you can give little more color to how this is going to play out, any manufacturing days, distribution days, as well as any vaccine and pet care, animal contribution to the top line, then product portfolio and geography expansion, any kind of strategy if you can give little more color. Last, so far, Turkey has been stable, what are our internal initiatives to make it remain on the stable pace? Thank you, sir, for this. I'll probably, of course, there is clearly a long-term strategy and maybe I'd be happy to have a one-on-one discussion with you sometime when you can call in and we can explain a bit more on the call on how it will play out over three years. Also, in different pockets, we have done that. Now, as far as the business is concerned, I think the first phase, which was making sure that we have got a margin structure which is competitive, I think we have started that journey. This is a treadmill. We can't sort of ever say that we have completed it. We have started that journey. We will be on it. On the second part of it, which is on beginning to drive top line, we have started that now in Europe and in Turkey and in India. How does this play out? As we have said that there are a couple of growth areas for us. One is in terms of more products in the companion animal side, whether it's APIs or whether it is in the area of formulation. That is not yet fully developed. It is less than 5% of our business at this point of time. We would like that to grow substantially to at least, as I have indicated in the past, coming closer to 15%-25% over a three to five-year period. Right? That's what we really want to take it to. The second part of it is in terms of which businesses will grow. Well, I think both the businesses have an opportunity to grow in early double digits. Among the two, it will really depend on where we make some inorganic moves. Yeah. Whichever kind of licensing or acquisition comes faster, I mean, that particular business will probably accelerate a bit more than the others. The third part of it, as far as Turkey is concerned, I think it would be premature to say that everything is behind us. What I must say is that we have taken actions which are appropriate for that kind of an environment, which is high inflation, unpredictable in terms of currency. Those actions, which we took almost one year ago, have begun to help us when the economy has started stabilizing. Unlike some other companies which opted to completely scale back and either exit, because we are there, we have improved our market share and as the market is stabilizing, I think we will continue to gain market share. Having said that, it is not a steady market yet. It's a high opportunity market. It is amongst the largest in the world, and we are also very strong over there. We have to learn to play in an agile manner in that market. I think it's going to be us being more responsive to that. So far, it has been good for us. We hope that we will continue to maintain this going ahead. This is something that we'll have to monitor quarter-to-quarter going ahead. Yeah. On the last part of it, which is really on the long-term debt situation, well, I'll give Saurav the chance to give specific numbers if he has. Directionally, we don't think this should be an issue for us in the next two to three years. Yeah. Mr. Bharat, giving specific numbers is difficult, but as Raja said, and as per our estimation, we are at the highest level. Going forward, we see as the business grows beautifully well and the operating cash flow increases, our debt should keep on going down steadily. Next three years, depending on how the business performs, our understanding is that debt would be substantially lower and the interest cost would be very negligible as compared to where we are. That's what we can share at this point. Yeah. Thank you. As I said, more on the strategic part, I think on three to five years, we can always have a discussion on that one on one and anyone who wants to do that. Yeah. Last question, if we can just go on before we close. Yes, sir. The last question is from the line of Sachin Kasera from Svan Investment Managers. Please go ahead. Hi, good morning and congrats to a good set of numbers. I had first two questions on the business side. On Turkey, you mentioned about certain export opportunities. If you could dwell upon that as to what type of export opportunities are there from Turkey and can they be meaningful over short to medium term? Secondly, if you could talk a bit about your U.S. business strategy. Sorry, what's the second question? On the U.S. business strategy. Let me answer the second question quickly. After we have closed our German operations, which was around 18 months ago, which was meant to be developed eventually as a U.S. FDA plant, we have, at this point of time, put that project on hold, as I said in the last quarter as well. We do have an opportunity in terms of having existing completion of dossiers, et cetera, as well as having identified CMOs for that. It is, for us, a lower priority at this point of time as we are growing in some of the other markets that we are. From a short-term point of view, which I would say is the next 12 months-24 months, it's unlikely that we will do any kind of acceleration on the U.S. project. On the first part of it, on Turkey, as far as exports are concerned, Turkey is an important location and base for exports to Middle East, North Africa. We are seeing the exports of that business grow every year. It serves us two purpose. Of course, commercially, it is an attractive business, but also it helps us hedge any foreign exchange requirements that the Turkish business has for its own imports. We are seeing that business grow right now quite substantially. In fact, in first quarter, I think we've almost doubled the business versus the same time last quarter. I've indicated in the past broadly that we today export about 50% of what we import, equivalent value. That is something we intend to neutralize and make our exports equal to imports in the next 12 months-18 months. That would, of course, hedge us naturally from any kind of foreign exchange exposure, but also it's a useful market opportunity for us. The other positive news for us, because the efforts in the Turkish business, is that our plant is now certified for EU GMP, which means it can supply from our Turkish facility to the European Union as well. That's an opportunity which has opened up, because in the past, we had a plant in Germany which closed down, which used to supply some of its products to other countries in Europe. Because Turkey has now got certified for European supply, we would be in a position to reactivate some of the discontinued business from Germany and launch it or reintroduce it from Turkey. It will take us six to 12 months to do that, but that's very clearly a big positive upside for us after 12 months. Sure. Thank you very much. Sir, I had a couple of questions to follow up on finance and one on M&A strategy. You have mentioned about the fact that we are looking at opportunities in terms of acquisitions and M&As, considering our balance sheet is a little bit leveraged right now, is that something we'll do maybe sometime later, or in that scenario, we may look at some sort of a equity fundraise to be able to manage that? A couple of questions on the finance side is that we used to operate at 80, 90 days of working capital. We are now at 110 days-120 days range. Can we go back to those old days that we used to have three, four years back, or is now 115, 120 a new norm for us? I'll answer the first one on the ability to make the M&A effective. Clearly, we are not going to be indisciplined. Our current balance sheet does not allow us to do anything which is of a large scale. Having said that, we have a very committed investor with us, and there is nothing that prevents us from taking any advantage of any opportunity which comes through different models. Yeah. Our principal promoter continues to be very supportive, and if there is any opportunity which comes, I don't think finance will be a challenge for us. It may not be something that on the first instance we may do ourselves. Yeah. For small bolt-ons which are required in terms of partnerships, et cetera, which are not too expensive, I think we'll be able to do that. Even large transactions, there are different structures which are available to do without it necessarily being funded from our balance sheet right now. On the second part on working capital, I think Saurav. I take that. On working capital, lately it seems very increased, but that increase has to be taken in context of our geographical spread across the globe. Because of the geographical situations in last few years, Red Sea, various delays due to non-availability of containers, delays in dispatches, delays in transit time, all has an impact on the working capital. Our focus on the working capital remains very strong, and we are trying to optimize all the ways possible geography-wise. The situation may not improve very soon, and we must assume the working capital to be range-bound and going down gradually as the situation improves or eases. That's how we are looking at the situation as of now. Thank you. Okay, thank you very much. I think we've come to the end of the call. Yeah. I just want to thank everybody who's on the call for joining us. Thank you for supporting us through this entire period. I look forward to seeing you in the call, the next quarter earnings call. Yeah. I wish you a good day. Thank you very much. Thank you. Thanks for your support. On behalf of SeQuent Scientific Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.