Ladies and gentlemen, good day and welcome to the Sequent Scientific Limited Q1 FY 2026 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 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. Thank you, Manav. A very good morning to all of you, and thank you for joining us today for Sequent Scientific's earnings conference call for the first quarter of financial year 2026. Today we have with us Mr. Rajaram, MD and CEO, Sequent Scientific, Dr. Haribabu, Whole-time Director and CEO, Viyash Life Sciences, Mr. Saurav Bhala, CFO, Sequent Scientific, and Mr. Ramakant Singani CFO, Viyash Life Sciences, to share the highlights 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 the 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 may 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 Rajaram to make his opening remarks. Thank you, Abhishek, and good morning, everyone, and a very warm welcome to all the participants today. Joining me on the call is Dr. Haribabu, Whole-time Director and CEO of Viyash Life Sciences. I also have with me Saurav Bhala, CFO for Sequent, and Mr. Ramakanth, CFO of Viyash. We released the results of the first quarter last Friday, and the details are available on our website. I hope you've had an opportunity to go through the presentations. The consistent improvement in results over the last few quarters signals that there is more behind the numbers. It signals a transformation in the way we have operated and deliver value. We have moved beyond consolidation and course correction into a phase of accelerated growth as we shape a future-ready company. Coming to the performance for this quarter, I am pleased to announce that we've continued our strong performance in the first quarter of FY 2026 with revenue at INR 4,414 million, reflecting double-digit year-on-year growth of 13.1%. This performance has come in with strong margins. There was nearly a 25% growth in pre-ESOP EBITDA, which touched a new high of INR 602 million and at a margin of 13.6%, which is in line with the recent performance of mid-teens EBITDA. This improvement in financial performance, along with the forthcoming merger, provides us ample headroom to support investments in existing segments as well as support new opportunities for growth. We are also seeing a substantial improvement in our profit after tax, underscoring strong control on all line items. While Saurav will delve deeper into the financials, let me briefly cover the business aspects. Our formulation business, which accounts for 75% of our business, continues to deliver broad-based growth. It sustained a sales growth of 13% versus last year and 11% on a sequential basis quarter-on-quarter. This was driven by a strong performance across all key geographies. In Europe, the business year-on-year grew at 4% despite having a very high base. Sequentially, it was a 20% growth. This upswing in performance was led by a higher companion animal sales and increased exports ex-Europe. We successfully concluded the GMP approval of our Spanish manufacturing facility, which now prepares us for introducing new products in the next few quarters. In emerging markets, the 25% year-on-year growth was supported by higher exports, along with some judicious price increases, changes in the product mix for delivering better margin sales. We've also expanded our Mexico business. We now have established front-end presence in Mexico, which is a large market for animal health. Our Turkey business continues to grow, helped by a stabler macro environment situation and acceleration of exports from Turkey. Our India formulations business has progressed well in a quarter that is relatively subdued due to seasonality. The business delivered a sales growth of 8% over quarter one FY 2025 on the back of field expansion, which was done last year. India remains a key priority for driving our growth ahead. In order to strengthen our presence, in this quarter, we concluded the second phase of field expansion to support our brand-building efforts. This will result in stepped-up revenues in India as the full impact of the expansion sets in. On the API front, we are seeing results of all the initiatives taken in the last six quarters. The business gained momentum, touching the INR 100 crore mark for the quarter and delivered growth of 14% year-on-year and 21% for the sequential quarter. This has been achieved with competitive margins and an improved product mix. The sales of our top 10 customers came in at over 60%, and we continue to have most of our sales realization in hard currency. We have received a new EU CEP approval during the quarter, in line with our plans to continuously add new markets and new products. The demand for our high-quality WHO grade albendazole has been very strong. The proposed merger with Viyash Life Sciences is proceeding on track, and we will answer any queries during the Q&A session. I would like to take this opportunity to thank the entire team of Sequent and Alivira and all the stakeholders involved for bringing to reality a strong start to this financial year. I will now hand over to Saurav to share the financial details of Sequent, and then invite Dr. Hari to share the highlights of the Viyash performance. Over to you, Saurav. Thank you, Raja. Good morning, everyone, and thanks for joining us today on the call. It is my pleasure to present Sequent Scientific Limited financial result highlights for the first quarter of financial year 2025-2026. A quarter marked by strong execution, strategic progress and sustained momentum. Q1 financial year 2025-2026 key highlights as follows. Total revenue is INR 4,414 million, delivering a healthy growth of 13% year-on-year and 10% quarter-on-quarter basis. Formulation revenue is INR 3,379 million, growing 13% year-on-year and 11% quarter-on-quarter. API revenue is INR 1,054 million, growing 14% year-on-year and 21% quarter-on-quarter basis. Our gross margin improved by 180 basis points year-on-year, rising from 45.1% - 46.9%. The adjusted EBITDA is INR 602 million for the quarter, marking a robust growth of 24.7% year-on-year basis and a 5.7% on quarter-on-quarter basis. On a year-on-year basis, the Q1 adjusted EBITDA margin expanded by 126 basis points from 12.4%- 13.6%. The profit after tax for the first quarter is INR 176 million, delivering a strong growth of 93.7% year-on-year basis and 69.7% quarter-on-quarter basis. Coming to merger updates. On the strategic merger with the Viyash Group, I'm pleased to share we have cleared key regulatory milestones. The Competition Commission of India has provided their approvals, and the required NCLT filings are complete. The NCLT has called for a shareholders and creditors meeting, which is scheduled on August 30th, 2025. Keeping us well on track to complete the merger process as per the estimated timelines of 12 to 15 months from the merger announcement date done in September 2024. In conclusion, our strong operational execution and strategic momentum in Q1 financial year 2025-2026 affirms our commitment to profitable growth and value creation for all the stakeholders. With the good progress of our merger process with Viyash Group, going ahead we are well-positioned to harvest synergies and deliver long-term sustainable performance. We remain vigilant to the market dynamics and continue to prioritize innovation, focus on cost efficiency, and drive profitable growth. Thank you for your attention. I will now hand over to Dr. Hari for sharing insights into the Viyash Group's performance. Thank you. Thank you, Saurav and Raja, first of all, congratulations for your great performance. Good morning, everyone. Let me take you through Viyash and also compare performance now. Viyash recorded strong performance in Q1 with revenue growth and margin expansion year-on-year. For Q1 FY 2026, revenue grew by 44% to INR 353 crores and adjusted EBITDA grew by 19% year-on-year to INR 68 crores. Viyash had EBITDA margins of 19.5%, which is improvement of almost 2.4% year-on-year. The current margins are in line with our medium-term aspiration of 20-plus margins. In line with the previous quarters, Viyash generated strong free cash flow in this quarter also. Now our current net EBITDA ratio is less than 0.3 with adequate room for growth. Now coming to the key operation updates. We had five regulatory inspections last quarter. In fact, one day we had two U.S. FDA audits in two sites and one Europe audit on the same month and a few other regulatory inspections. All went through very well. I think this shows the strong quality culture of Viyash. The two sites, both U.S. FDA audits we received EIR now, both are actually VAI. That means actually our outcome was very good. In addition to that, regulatory audits, we had large number of customer audits, which are very important for regulatory markets. We faced almost 30+ audits in the quarter. Coming to the R&D, which is most important for our growth. As you guys know, Viyash build based on R&D capability. We validated three products last quarter, and we filed almost 12 products for various countries, which includes Europe, U.S., Korea, the most of the countries. Also we have five finished product in U.S. Coming to the regulatory approvals, we received five approvals for API. From that, one U.S. product and three for CEP, Certificate of Suitability, and one more for Europe. Also we received one finished product approval in last quarter. Coming to the launches, we launched two FDFs in U.S. last quarter, and also two APIs in various markets. R&D pipeline, as you see continuously, we have a strong pipeline. Currently we have around 30+ products on the pipeline, and we are actually expected 10 to 15 products development as well as filing this year as anticipated. Coming to the combined performance. Combined, both companies have grown very strongly last quarter. For Q1 FY 2026, combined revenue of two entities grew by 8.7% year-on-year, and most important, EBITDA grew by 41% year-on-year. The combined business had an adjusted EBITDA of INR 129 crore with 16.2% margins, with improvement of 1.7%. The combined net debt EBITDA is around 0.6x, lower than actually 1x last previous year corresponding quarter. As updated last quarter, we have started to plan for integration of the two companies and realizing synergies. Of course, as Saurav Bhala explained, we received the CCI approval, SEBI approval. Its process is going through the NCLT, we anticipated approval as expected. Coming to the synergies, whatever we explained in previous call also. The four areas what we focused, first main was R&D, always. As we explained last quarter, R&D already integrated. Both teams are working together. Also we started portfolio discussion combined. In R&D, there are two, three important things. One is, of course, product portfolio is very key for the growth. Second one is the cost improvement. Third one is the manufacturing, of course. R&D already we started collaborating, working together. We initiated portfolio and it's a lot of improvements we can see next few quarters. Cost improvement also we initiated last couple of years. Of course, it's a continuous process. You already started seeing the margin improvements for both companies. That's the part of cost improvement. Coming to the manufacturing, this is the large synergies we are expecting. Already we started cross-qualifying the products wherever the free capacity. Couple of products already we initiated, but you know the regulatory process, it takes some time, 12 to 24 months. The process is continuing, and we are doing very actively on that perspective. Procurement synergies, already we started negotiating combined wherever there are common materials, and it's working very well on that perspective. Sales, as I explained last quarter also, there are synergies for both sides since Sequent is operating most of the API business with Innovators. That's where we see opportunity for Viyash to improve the business with Innovators. Started working. I think it's going to materialize in the next few quarters on that. Mostly synergy is, I can say it's happening, it's better than what we anticipated. You know the regulatory framework, whatever it allows us, we are working on that, but it's working very smoothly. Both teams are working very closely. Also we started working on strategic direction, both organization structure as well as next three to five years combined company, what we want to do. That, I think, will come up in next two, three quarters. With that, thank you. I'll hand over back to Abhishek. Thank you guys so much. We are going for Q&A now. Sure. Please Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. We have our first question from the line of Shiwani Kumari from Monarch Networth Capital. Please go ahead. Hi, sir. Am I audible? Yes, thank you. Yeah. Congratulations on good result. I have two questions, one for Sequent and one for Viyash. I'll begin with Sequent's question. My question is that, if we see the geographical mix, year-on-year, Europe and India has been a single-digit growth, whereas we see emerging market growth has been around 25%, which is good. Wanted to understand what's happening across the geography. In emerging market, I understand that we have added few more markets. If you can give a sense on how we are seeing the market panning out, especially with geopolitical issues also, and what is way forward for these markets? The second question? On India? I'll take the second question after this one, if that's okay. Okay, fine. Clear. Right. Thank you. Thank you, Shiwani, for the question. Yes, overall, I think we've started hitting a good double-digit growth. Some of the differences are that emerging markets, of course, the growth is coming because there is an opportunity to expand to new markets. There's also exports. One of the things we are doing is that we've created export bases both in Turkey as well as some in Spain, which is therefore serving other markets which are nearby. Exports is doing it. Emerging markets, we also added Mexico, we are adding new markets. That's in general the momentum which is there in emerging markets, and I think we should expect that business to keep growing in double digits. I think on Europe, what you might have seen now is more a function of a large base which was there at the same quarter last year, and that is why you might see a single-digit growth. We have, in the recent quarters, also delivered double-digit growth on Europe as we've added more products, particularly when we started the distribution of vaccines. We do expect that Europe is more a function of which quarter we end up having a larger disease outbreak or a vaccination season. On a full year basis, we still think that that's a market which should come close to double-digit growth in any case. The last bit about India, I think India was prioritized around a year ago, and we have begun to see double-digit growth even in India. In fact, there are quarters when we have done over 20%. We have now added a field force in India. We had a substantially smaller footprint in India in terms of number of people on the field. We had less than 100 people just a year ago. We now have about nearly 200 people on ground, therefore, as the quarters sort of begin to realize the full impact of the people we have added, we expect this market also to begin to go into double digits. Also, I think you remember that there is a seasonality factor which varies quarter to quarter in different countries. There are some quarters where some country may be on a lower market growth, while the other markets may be higher. On an average, I think we expect this business to consistently move into double-digit growth. Yeah. Sure. Thank you so much. Just a follow-up. When we say seasonality, you also mentioned that India business was impacted because of the seasonality factor. What is the seasonality factor in Q1, if you can clarify that? Typically, what happens is that a lot of animal health medicines, in India, it's largely a dairy cattle business, and it tends to get affected to some extent by the rural economy, which is over there. Also the outbreak of diseases depends to some extent on the kind of climatic conditions that might happen in that particular quarter. You could have a situation where the same quarter last year may have had an outbreak of a disease because of which there was a substantially higher spike in the sale of medicine, while the same quarter this year may not have seen the same outbreak in disease, and that might happen a couple of months later. I think there's a bit of a variation which tends to take place quarter- on- quarter, but on a full year basis, I think the secular trend should be in double digits always. Sure. I also have one more question for Sequent, which is for API business. You did mention that albendazole sales have improved, and it's seeing strong demand as well. What about other APIs? How is the API business performing, and what to expect? API business have been slower initially. We're getting the growth in both. I think we have signaled albendazole because albendazole, there is a demand coming in from WHO recently because we were pre-qualified for supply to formulators who were supplying for WHO tenders and their requirement. Otherwise, even on some of the other APIs which we make, which are non-albendazole APIs, in this quarter, there has been a growth even in those APIs. I think the most important thing for us is that we need to accelerate our new product introduction and R&D as far as the other APIs are concerned outside of just albendazole and the anthelmintics range. That's the effort which is going on. It has been a good performance for us, driven both by albendazole as well as the non-albendazole range. I think going ahead for us, the larger drive will be on the non-albendazole range. Sure. Thank you. Sorry to interrupt you, ma'am. Can we please request you to rejoin the queue? Sure. Thank you. Okay. We have our next question from line now. Vishal Manchanda from Systematix Group. Please go ahead. Hi. Good morning, everyone, and thanks for the opportunity. Sir, congratulations on a good set of numbers. Just wanted to understand on the API business, after a long time, we have exceeded the INR 100 crores number on a quarterly basis. Can we sustain this trend? Yeah, I think this is a rate which we've been aspiring for. We've also done this in the past. We did have some surprises and setbacks in the past, which we have spoken about. I think INR 100 crore is a rate which we would be targeting. With the merge around the corner and more inputs coming in in terms of the R&D pipeline, there's no reason why in the next few quarters we should not be sticking to this kind of a run rate or more. Right. Even on gross margin front, there has been an improvement on a year-over-year basis, while there is a drop on a quarter-over-quarter basis. Could you explain this, like the quarter-over-quarter drop and year-over-year growth? Is there some seasonality element here? In general, I think we are having a margin improvement, which is happening on account of initiatives both on the cost line as well as on the product mix. Right? On both, these have given us margin improvement, both in formulations and on APIs. That's why you see a year-on-year growth. Sequentially, some of it is also because of product mix. We did have a substantially higher profitability mix, which was specific to last quarter, and that got a bit reduced. It will not be there this quarter. You will find that the line is still in the area of 48%-49%. You could have some sort of swing between the last quarter and this quarter. Directionally, if you take it over three, four quarters, we would continue to be moving towards the 50% line on gross margin. Yeah. Right. Any focus areas in terms of the animal health formulation business, in terms of whether pet is a more focus area for you and any geographies that you're specifically focusing on in terms of building the formulation business? Yeah, I think we have looked at pet as companion animal is a priority. We are looking at it in two ways. One is wherever we have a front-end presence already, like in Europe, we have begun to distribute for some other companies and also launch some products of our own. I think if you want to make it bigger, we'll have to look at a slightly more aggressive move, which is always under consideration for us in the next year or so. Having said that, we are also doubling down heavily on India because this is a market for domestic growth, which is very crucial for us. For us, the big advantage is wherever we have a front-end business, which is India, lots of markets in Europe, Brazil and Turkey. In these markets, we would focus on introducing new product range, largely in the area of companion animals. Okay. We are still looking for the injectable growth in the injectable business as an area to build margins and maybe accelerate top line? Injectables, we have a factory which is there in Turkey. That plant has now got a EU GMP, and therefore we will expand supplies from Turkey into European markets also for injectables. These injectables are largely for food production animals and not so much for companion animals. The injectables, obviously, there are fewer companies which are in injectables, and the margins are obviously better in that. Yes, we will be growing injectables fast. We are, of course, looking at other opportunities and other markets in this area right now. Okay. Just one final one. If I can just ask one more on albendazole. We always had a U.S. VMF on albendazole. Was that not good enough, or this WHO prequalification is kind of incrementally helping you? I think they're separate markets. The U.S. VMF is for supplies to the United States. The WHO purchase is largely for supplies which are made to the developing markets for various donation programs as well as local countries which sort of use it. These are two completely different market requirements. Understood. Okay. Thank you very much. Thank you. Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. Anyone willing to ask a question, you may press star and one now. We have our next question from the line of Rachit Kabra from Anand Rathi. Please go ahead. Hi, sir. Thank you for the opportunity. Am I audible? Yes, please. I would like to know, is there any risk of the input costs rising or going up due to the dollar strengthening? I think I'll pass this question to Dr. Hari. Maybe you can give us some color on that. No, sir, we don't see any risk because our exports are more than imports, you must note them. I don't see any impact on that. Of course, wherever there is a risk, we have covered. I don't see any negative impact on that perspective. Yeah. Okay. Thank you. My next question is, you had earlier said that Turkey would become a base for more exports. Can you update on the plan? What the plan has been and how it has been going forward? Yeah. When we started doing that, the original requirement was that we wanted to make sure that we were foreign exchange neutral, and that's why we started exports. Now Turkey, because of the injectable manufacturing plant which we have over there, and the fact that we’ve got an EU GMP license, which has been given to that plant, the opportunities to export beyond just neighboring markets has increased. We are looking at a couple of launches coming in the next few quarters, which will be for supplies into Europe. Yes, that plan continues and it is in fact accelerating now. Also, the economic condition there is a bit more stable than what it was, say, six quarters ago, and that makes it a bit easier for us to be able to look at more B2B contracts for that. Okay. If I could continue with one more question. Go ahead. One more. Yeah. We have seen a PAT improvement substantially compared to the last year. What are you targeting for this year, or any ballpark number? I don't think we'll give any guidance on PAT right now. We have given you guidance on margins on the adjusted EBITDA margin. I think we will hold to that. Of course, the attempt is to make sure that it gets converted into much higher PAT, so we expect the PAT growth to be well ahead of the EBITDA growth for both the companies as we begin to move on. I think what you should expect is that the PAT growth will be ahead of EBITDA growth. The EBITDA guidance we have given you already saying that, on the Sequent side, it would be closer to the mid-teens for this year, and we were looking at the high teens of the Viyash side. Hopefully by the end of the year, we would be able to come back and say that we are on the higher side on both. Yeah. Thank you. Thank you. I have no more questions. I'll get back to you. Thank you. Yeah. Thank you. Thank you. We have our next question from the line of Amresh Kumar from Geosphere Capital. Please go ahead. Yeah. Thank you, sir, for the opportunity. On the gross margin side, sir, you said it can reach or trend towards 30%. Are we building in some merger benefits from this or how do we read it? On the gross margin line, I think on the Sequent side, we have indicated that it will come closer to the 50% as we begin to move on. Viyash is obviously well ahead of that already. Yes, we should see some benefits. I will hand over maybe to Dr. Hari to expand a bit more on what are possibilities on the gross margin side. I think disconnected. Dr. Hari? Is Dr. Hari there? Sir, his line got disconnected. We'll just connect him. Yeah, disconnected. Yes, just to recap, we have been operating at the 45, 46 kind of a level. We have moved up now to about 48, 49, Our target is to move to the 50s soon. Viyash, of course, is always ahead of, much higher than that. The benefit, while I wait for Dr. Hari to join- Meanwhile, can you ask your next question? Can you ask your next question, then I can. Yes. On R&D front, you said that you are in the process of introducing or working on some more products. It would be great if you can expand on this a little bit. Yeah. I will just wait for Dr. Hari, who got disconnected, to explain. He's back on the line. Yeah. Two questions, Dr. Hari. Two questions, one on how the improvement in gross margins may come in the next few quarters after the merger and the synergies. The second, I think, is on what can we look forward to in terms of R&D, new products, and pipeline. As I explained, R&D, we are adding a lot of products, both companies, because Viyash is having very strong portfolio. Every quarter, you can see approvals as well as new product filing. We started adding Sequent portfolio also since both R&Ds are working together. Now the outcome is much better than what was earlier. Definitely next few quarters, it's going to add a lot of products even for animal health basket. Of course, you know the current regulatory scenario. Once you start developing the product, development and approval, it takes its own time. We are trying to work as quickly as possible. Coming to the gross margin improvements, of course, the entire strategic direction we are working on, and as explained last quarter also. We will present maybe next quarter with a detailed investor presentation. It will come up in next two quarters. Definitely we can see lot of gross margin improvements because of various things. One is definitely network optimization. Always, as we explained, wherever there is a capacity. Viyash, we have running capacity utilization around 60%-65%. Whereas Sequent, actually the one site is fully occupied, other site is still there is a capacity to add more products. With utilization of free capacity, definitely there is gross margin improvement, and most important, our R&D capability of cost improvements, that's going to play a major role. It's going to improve a lot. Whatever we explained earlier, by 2027, both companies together definitely will be around 20%. That we are on track. Okay, got it, sir. Thank you so much. Thank you. We have our next question on the line of Kaustubh Pawaskar from Boundless Management Solutions. Please go ahead. Yeah. Hi, can you hear me? Yes, please. Thank you. Yeah. Hi. My question is for Dr. Hari. Because of the exposure of Viyash to the U.S. markets, I wanted to understand. A lot has changed in terms of expectations of opportunities coming from the U.S. because of, let's say, regulatory factors. About a year ago, we had this potential opportunity from the U.S. BIOSECURE Act. We move forward a year and Trump has come in and he's talking about these pharma tariffs. There's a little bit of lack of clarity in how the distribution will change, the impact of pharmaceutical benefit managers. How do you look to this? How do you assess the situation and the impact on the combined entity, Viyash plus Sequent together? I think our perspective, I see more opportunities than issue. Why? Current, our exposure, of course, Sequent exposure is very little for U.S. Here, Viyash API exposure, direct exports are very little, okay? In fact, I think 2%, 3%. Overall, it may impact indirect exports also, whatever we supply to Indian companies, where they formulate and export, there may be impact. All put together, it's around 17%, 18% our exposure on U.S. market today. Other than exports from India, we have formulation business in the U.S., and manufacturing site also is in the U.S. We see both sides. It's opportunity as well as actually the issue. I strongly believe we have a great opportunity. Why? Our exposure is a little less. Most important, if you see our regulatory strength. Last 12, 15 months, we were able to manage five U.S. FDA audits without any issue. That's a great asset for us. Also handling a same-day two audits, it's not easy for any company, but our team demonstrated that. Sequent also, whatever we had audits, it went through very well. We see U.S., definitely there is a more opportunity for us with our R&D strength, the capability to differentiate products, whatever you can see from Viyash perspective. Also Sequent, definitely there is opportunity to grow a lot in generic animal health play. You can see generics started penetrating in the U.S., so that's where we can see the opportunities. I strongly believe, more than threats, we have a great opportunity. Of course, we're trying to relook at, re-strategize even our formulation business, okay? Since we have U.S. sites, if we put tariffs, that's a big advantage for us. That could be the short term, I always say. Long-term strategy, okay, wherever is a low-cost-based manufacturing is always good. We are working on various aspects, especially in the formulation. We're trying to take out low-margin, low-volume products, which improve margin. That you can see this quarter. Whereas our margins, EBITDA improved a lot, but top line growth is very less. That's one of the reason was we are trying to take out actually low volume, low-margin products, which actually substitute with the new products. We are coming up with a lot of new products where the margin profile is much better than mature products. That's how we can see opportunity for us. BIOSECURE Act, of course, all our facilities, we are moving towards actually meeting any standards. That also we see a lot of opportunity. But- Sequent. Go ahead If I could just interrupt on the BIOSECURE. Since the government changed, what's the view on BIOSECURE Act? It's been shelved, right? Is the government change of U.S. or you meant to say what? Yes, yes. For the U.S. The BIOSECURE. Is the current government, whatever is the Trump policies you are talking, right? Or the new government coming? The current Trump government. Yeah. Actually, anything Trump, he can actually say another three years, right? Till the end of years. All these products, whatever we are talking, BIOSECURE Act, it takes its own time, three to five years, any product moving here or there. It's not easy just like that actually moving out all Indian products to somewhere or all Chinese product to somewhere. It's impossible to do that. There is a regulatory guidelines. There are actually the customer expectations. It's a process. How long it took to move out from China to India, some extent. Still going on. Last five, six years it's working very actively, government. Still, the shift is not substantial. It takes its own time. I don't think it's going to change next three, four years drastically on that perspective. The fact is there's no alternative for India. There's only either China or India, right? For all these things where there is a large manufacturing, large resource capability to do these things, only these countries. They won't go back to China, right? Still, I say there's a good opportunity for India and also us, sir. Thank you, sir. Does it answer the question? Yes. Thank you. Thank you. We have our next question from the line of Bharat Sheth from Quest Investment Advisors. Please go ahead. Hi. Congratulations, Harib abu and Rajaram ji and team for a super performance. Thank you, Bharat. Yeah. I have two questions for Sequent. One is that we like what Haribabu said, even in Sequent also, you are moving away from low-margin product and hence our top line was getting affected. At current stage, where we are in this portfolio, and when we really start seeing a larger benefit in terms of top-line growth? Your second question, Bharat? Sir, second question is now, in Spain which is making a good margin and profit, where we have only 60% holding, any plan for consolidating 100%? Third question for our CFO. This one-off and ESOP cost, how do we see? Because it is going at accelerated pace, so how could we think about the ESOP cost in 2026 and 2027? Okay. I'll just take the questions, Bharat. Thank you for asking. One is on the top line. I think we have completed most of the pruning which was done of low margin. Of course, this has to be continuously done. Now you're seeing that for the last few quarters, the growth rate has moved from 5%, 6% now to almost we are talking between 12%-14% in most. If you look at local currency. We expect this to keep accelerating. Now the growth has to come from two. One, volume growth of your existing products and by introducing new products. The third, of course, will come from pricing, right? These are the three levers which will give you the growth coming. I don't think there is much to do now in pruning of products on the formulation side. Most has been done. Of course, on API, there is always a pressure on margins because there is always pressure in terms of B2B supplies. We don't see that this exercise will be continuing for too long. In all companies, after a couple of years, you once more look at your portfolio, and then you have to refresh it depending on what has changed in the market. Second, I think on Spain, yes, we have a 60%. We have, at this point of time, no immediate plan. It's a very well-run operation. The 40% is owned by the family, which currently also runs the company. They are trained veterinarians, local experts, and therefore we are very happy with what they're doing. There's no urgency for us to get into that. The last question, coming onto the ESOP piece, I'll ask Saurav to reply after this. Maybe first I'll ask if Dr. Hari wants to add anything on the pruning of products and improving. Of course, I have question for Haribabu also. Okay. Separately? Okay. Maybe I'll ask Saurav to answer one on the ESOPs first. Let me complete our Sequent perspective pruning. It's always margin improvements or top-line growth is based on two things. One is how efficiently we can run our operations. Second thing is how fast we can bring new products on, especially API. Of course, as Rajaram mentioned, formulation actually is already done, whatever we have. It's a mostly geography expansion. There's a lot of opportunities with exporting from Turkey to other. Hello? Sorry, sir. Hari, sir, got disconnected. I'll reconnect him. Meanwhile, if Saurav can answer. Can I just complete that? Yeah, Mr. Bharat. On two points. First, I'll take on the exceptional item. If you see exceptional, there is no exceptional coming in the first quarter other than the merger-related expense, which would continue for next two quarter, because as the merger progresses, there are milestone-based payments which will happen in this year. Apart from that, we are not seeing any one-time or exceptional kind of expense, which is all taken care of. On the second part, ESOP. ESOP, as I explained in the last call also, ESOP, we have mostly done the vesting of Sequent ESOPs and the base of the last year retains. Next two years, it would be in the similar lines. It will not increase because of Sequent ESOPs. Sorry, guys, I lost again. Yeah. Please continue, Dr. Hari. What I was telling, Sequent margin improvements and also top-line improvements, as Rajaram mentioned. All formulation that's pretty well streamlined last couple of years. Most important for that is the geographic expansion. That's what I started doing, like exporting from Turkey to other countries and Spain to other countries. It's working pretty well on that perspective. When it comes to API, especially Sequent. Any API business, you grow on two fronts. One is efficient utilization of the facilities and efficient process capability. The third thing is most important, continuous adding of those new products. That we missed out last couple of years, but now we are accelerating that both sides. We can see a lot of improvement in 12 months from that perspective. That's what I was trying to say. Same thing on earlier also, we were looking for Viyash also a lot of pruning the portfolio, and hence our top line is not really reflecting, but it is reflected in the margin. Where we are in this journey, pruning of the portfolio and moving to same other newer therapeutic like oncology as well as CRDM opportunity, if you can give some more color? Viyash perspective, we are very strong. We initiated oncology maybe 18 months back. Within 18 months, we've come up very strong world now. We have almost 15, 16 products in our portfolio. Already couple of products we filed on that perspective. Similar lines, Sequent also we are looking at, couple of even animal pet care, especially. There's lot of oncology products either similar or coming in different ways. Since we have the- Okay capability, we can come up in strong way in that perspective. and low margin. Yeah. It's a low margin. Yeah, sorry. Go ahead. Sorry. You go low margin and then top line growth. How do we think about it? Low margin, large volume, always there is a scope to improve by doing process efficiency or optimizing capabilities. I think that's where we have very strong team to do that, like large volume, low margin, I can say. Paper, all kinds. There's the various markets actually. Where we operate as a quality market, margins are still reasonably good. Still, there's a continuous process to improve high volume, low margin products. That we are very much capable to do that. Of course, where there are low volume, low margin products, that's where we are trying to prune in. We have very strong process efficiency team to take care of those things. We don't want to drop every product. We drop only products where there is no opportunities to see the growth. If the overall volume itself is very low in the world market, we can't see much growth. Those are the products we are trying to pruning. High volume products will continue, will improve as much as possible, and definitely we are going to complete those products. CDMO opportunity, sir? Sorry to interrupt you, sir. Yeah. We please request you. Sorry, this is line with the same question of CDMO, which I already asked. CDMO- Haribabu can complete that. He can complete the answer for that. Yeah. The CDMO also, as I explained last quarter, we initiated CDMO. We started doing couple of our companies, but we are coming up with a complete strategic direction next one, two quarters. We started building the team on CDMO. We see our capability. We have fantastic infrastructure, both analytical, EHS, and operating. These three are actually core things for any CDMO business. We are already handling maybe I think eight out of top 10 innovator companies. The next phase of CDMO business, we're trying to do phase I, phase II. That we started building the team. We started actually re-looking at our R&D expansion. This year you can see definitely our R&D expansion, both space as well as people. Next year we'll come up with strong CDMO. I don't want to just come up CDMO, just few things. We are going to come up very strong on our CDMO next 12 to 18 months, I can say that. We are working on that. Thank you. Thank you. All the best, sir. Thanks. Yep. Thank you. Thank you. We have our next question from line of Mohd Hari s from Monarch Networth Capital. Please go ahead. Yeah. Thank you for the opportunity. Can you provide an update on the companion animal health business, and where do we see it in the next two years? If you can give us the financials in terms of contribution in this quarter. Is that your only question or? Yeah, that is the only question. Yeah. Okay. Thank you. I think companion animals for us, as we have said before, it reflects at this point of time about 5-odd percent of our total business. We are largely a production animal company. It's growing fast for us in some markets. In Europe, for example, we are beginning to now distribute more and more of companion animal products, and we are also launching the companion animal anesthetic range, which will increase the share of this business. Our intent plan is that we should double this in the next three years organically on our own products. On the API side as well, there are companion animal APIs, which is now we started getting inquiries for those. We've started, in fact, supplying some of those. I expect some interest to increase over there. Other than that, I think from a financial point of view, because it is not big enough, we don't sort of report the financials of companion animals separately. Generally, they tend to be quite profitable, in line with the current margin or slightly higher. Yeah. Thank you, sir. That answers my question. Okay. Yeah. Yeah. Thank you. We have our next question from the line of Rachit Kabra from Anand Rathi. Please go ahead. Hi, sir. I have a follow-up on, like you had earlier said that the company would reduce the debt. Is it still holding true? Yeah. Yeah. Yeah, Doctor Hari. Yeah, still we are evaluating, but we are going to restructure, okay, whatever Sequent debt you see today. The interest cost is little high. We are going to restructure, but we are looking at two things. One is clearing complete debt or looking for some promoter. We are at post-merger, we are going to do this. We are looking for growth opportunities. We may evaluate and work on that after post-merger. Okay. Thank you. Yeah. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Thank you very much for being on the call. Thank you, Dr. Hari. Thank you, Saurav Bhala. Thank you, Ramakanth Singani, and everybody who's attended. I think you would've seen that we are quite consistent right now in what we indicated a couple of quarters ago when we started doing this call together with Viyash and Sequent. Our growth continues to be on plan. Our margins are improving like we have guided. We do expect that the synergies of the merger will kick in fast right after we get the clearances. The work on it, however, has already started. Both on the P&L as well as on the balance sheet, we should see a substantial improvement within the first few quarters of the merger sort of getting effective. We look forward to sharing the performance of the next quarter when we meet with you on the call. Thank you very much and have a good week. Thank you. Thank you. Thank you. On behalf of Sequent Scientific Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.