Welcome to the Q4 FY22 earnings conference call of Aarti Drugs Limited. Good evening, everyone, and thank you for joining us today to discuss our financial results for the quarter and financial year ended March 31, 2022. Before I take you through the performance highlights, let me remind you that as communicated in the earlier earnings call, the financial performance on a year-on-year basis is not exactly stable, especially in terms of realization and margins, because of elevated API margins driven by sudden supply disruptions due to COVID-19 related lockdown during the financial year 2021. The company reported a resilient set of performance with improved product mix, even though the entire globe continued to face unparalleled challenges across the business environment. I will now take you through segment-wise performance. First, we will discuss standalone business performance. Total revenues for quarter 4 FY22 stood at INR 642.1 crore as against INR 452.9 crore, a healthy growth of 42% year-on-year. Standalone business contributed approximately 90% to the consolidated revenue. Approximately 61% of the revenue came from the domestic market, while the remaining 39% came from the export market for Q4 FY22 in our standalone business. Domestic revenue grew approximately by 37%, while exports grew by around 50% year-on-year for Q4 FY22. API volume grew considerably by around 23%, led by healthy growth in chronic therapies, especially in anti-diabetic segment. Within the API segment, the antibiotic therapeutic category contributed around 43%, anti-diabetic around 17%, anti-protozoal around 14%, anti-inflammatory around 12%, anti-fungal around 9%, and the rest contributed around 4% to the total API sales of Q4 FY22. Going forward, the growth in chronic therapies is expected to outpace the growth in acute therapies, mainly driven by recently commissioned anti-diabetic capacity. Formulation segment performance. For the quarter, the revenue for formulation stood at INR 69 crore, growth of approximately 2% year-on-year. Formulation segment contributed around 10% to the consolidated revenue for the quarter. About 39% of the formulation revenue came from exports during the quarter. Exports continues to be a key focus area for the formulation. Now we'll discuss specialty chemicals and intermediate segment performance. For the quarter, revenue from operations for specialty chemicals and intermediates stood at INR 56 crore, which grew 17% on a year-on-year basis. For the FY22, the revenue from operations stood at INR 210.8 crore, a growth of 28% year-on-year basis. Company's strong chemistry skills, along with a niche presence in chlorosulfonation products, led to this healthy growth. The growth trajectory for this business is expected to continue further, driven by the recently commissioned brownfield expansion at the Tarapur facility. On a consolidated basis, company's FY22 revenue stood at INR 2,500 crore, a growth of 16% year-on-year basis. Also, the company posted robust revenue growth of 39% in Q4 FY22, which was primarily a 46% year-on-year growth in API business along with 17% in specialty chemicals, intermediate and others. EBITDA and PAT grew by 9% and 7%, respectively. EBITDA margins were affected due to continuous uptrend in raw material prices and power and fuel cost, especially the coal cost. The company's overall product mix, especially in API products, improved considerably along with improved operating leverage, which helped the company to partially offset the impact of higher raw material. However, multiple headwinds such as ongoing Russia-Ukraine conflict, continuous inflation in the input costs, especially solvents which are related to the crude price, supply chain disruption, recent China lockdown due to spike in COVID-19 cases, et cetera, had an impact on margins and profitability in Q4 as well as for the entire FY22. The company is closely monitoring the evolving geopolitical events. The company has undertaken multiple price hikes during the quarter, partially offset the impact. However, these price hikes were not sufficient as the velocity and volatility of increase in input costs due to the reasons just mentioned remained very high. The company expects an improvement in margins once input prices stabilize, which we expect by the end of Q2 FY23. The company is also focusing on increasing the revenue contribution from therapies, especially from anti-diabetic products, antifungal products, which would help the company to regain the sustainable long-term EBITDA margin levels. Coming to the important update in the USFDA inspection for Tarapur import facility. The company has successfully completed the third-party mock audit recently. The audit was carried out by the USFDA consultants who are the ex-USFDA inspector themselves. The final response will be submitted to the USFDA towards the end of H1 FY23, most probably by the beginning of August. The USFDA inspection is expected to be done by the end of this financial year. The company remains confident of the positive outcome. Apart from this, the same facility has cleared Australian TGA inspection audit recently, which will enable the company to expand the business further in Australia as well. The company incurred a CapEx of INR 145 crore during the year. The company's plan to further invest INR 250-350 crore in FY23. After witnessing sluggish construction activity in H1 FY22 owing to prolonged monsoon, the pace has picked up in H2 FY22. For the Gujarat project, the civil construction activity has picked up the momentum, which is expected to be operational towards the end of current financial year. The expansion of the Tarapur brownfield specialty chemicals facility has been completed successfully. Scale-up batches have been undertaken since the start of the current month. For Tarapur greenfield API facility, the boiler and zero liquid discharge treatment plants will be operational by this month end, and the company is planning to scale up the production by the end of FY23. Net debt to equity as of March 31, 2022 stood comfortably at 0.52 times. The working capital cycle, however, got elongated as the company strategically increased the raw material inventory owing to high inflationary nature in the raw material and probable disruptions in the supply chain. There is some increase in the finished goods inventory as well due to anticipated pickup from the customer in Q1 FY23. As a company policy of rewarding shareholders, the company has paid INR 81 crore in FY22 in the form of dividend and share buyback. The company remains committed to creating value for shareholders by enhancing the strategic value proposition through capacity augmentation, cost rationalization, backward integration, strong focus on R&D and optimal capital allocation. With this, we can now begin the question and answer session. Thank you. Hello. Sir, I just want to understand the CapEx. Last year our CapEx is INR 145 crore. Can I get the breakup of this CapEx for in terms of the therapies? what is the other CapEx that we are looking at for next year? The main projects which are going on, one has been started, the brownfield expansion of a chlorosulfonation facility at Tarapur. We just commenced with that project in the month of May. There are two main greenfield projects which are going on. One is going on in Gujarat. That is for the backward integration and intermediate space. The Tarapur greenfield project is focusing on dermatology related API. So both these projects be completed by the end, but mostly by the end of current financial year, and that is where the majority of the CapEx will be going. A very small portion, say INR 40-50 crores of the CapEx will be utilized for general brownfield expansion, the GMP enhancement and some bit for the maintenance CapEx. We can say this year INR 250 crore-INR 350 crore CapEx. Mm-hmm. It will go for this brownfield expansion and other [cross talk] Apart from that, say INR 40-50 crores of brownfield and maintenance CapEx. Apart from that, the major CapEx is for the same projects which we have highlighted before that, INR 500-600 crore CapEx plan which we had. It is going for the same project, mainly for the greenfield project, one at Tarapur and one at Vijayawada. Thank you. If you see that we already invested INR 145 crore and we were looking some 5x turnover on CapEx. This year our incremental sales are on the lower part. How do you see the scenario next? My second question is related to gross margins about the raw material prices. How do you see the increase in raw material prices going on, going onwards? I mean to say, when we can expect that things could get stable. Okay. To answer the first question related to CapEx, the brownfield expansions which we are doing, they are definitely giving that five times asset turnover. For the greenfield one, it is somewhere in the region of 2-2.5. Other question regarding the raw material prices, I would like Harit bhai to answer your question. It's very difficult to give any guidance on raw materials because, due to current, Yeah, just try to understand how the things are taking shape and what's your view on it? It is very difficult to provide any guidance, but looks like inflation is at top and everybody, all the governments are trying to control inflation. Demand may come down overall on commodity cycle, commodities. We expect price to come down by another 3-4 months, you know. Not at the original level, but it will come down. Yeah, we expect price to come down. Thank you. Thank you, sir. Thank you. Yeah, thank you for the opportunity, and good evening to everyone. Adhish, one question again on gross margin front. With this kind of pressure, I mean, can we assume that, our operating margin can be sustained at around 12%, or you believe that there is a scope of improvement with the brownfield capacity coming in place, I mean, with the better product mix? Okay. Are you asking for the first quarter of coming financial year or- Yeah, the quarter four, I think we reported around 12% operating margin. I'm asking regarding that, you know, is this kind of margin, you know, we'll be able to sustain? Because I think you all mentioned that, you know, till another two quarters, there is a likelihood of seeing, you know, high raw material price pressure. Are we going to sustain this or there is a scope of improvement in the overall operating margin? Understood. For the next 2 quarters you're asking. Yeah. For APIs, standalone EBITDA margins were around 13.2% for March quarter. We believe that at current level also we can easily improve around 0.5%-1%. Apart from that, at the gross margin level, definitely the current commissioning of chlorosulfonation plant, brownfield expansion, that segment is more profitable for us. The product mix would be favorable in terms of the betterment of the gross contribution for the first quarter. It will help more in the second quarter because the production has just started. As far as the price hikes are concerned, we were doing the analysis. I mean, in the March quarter, you know, if we see, we definitely have taken price hikes. About 85% of our products have maximum prices in the March quarter if you compare all the four quarters of last year. Even in the March quarter itself, if we compare all three months, January, February, and March, then approximately 50% of the finished goods were having higher prices in the month of March. Definitely price hikes will also help us regain some of the gross contribution. Because the situation is so dynamic, it's though it will become better, but then it is not you know that easy to forecast as of now. Okay. I understand there is still uncertainty regarding that. But whatever growth that we have seen in API segment during this quarter, around 45%-46%, that is all because of the price hike or there are new products, that is gliptin products and all have been commercialized or have started supplying? Okay. The gliptin means we launched those products, but they are not yet significantly impacting our turnover as of now, but we expect- Okay. -them to do that, in coming future. However, what was your other question? Basically wanted to understand that all the growth which is coming in the API is mainly because of the price hike only. In the domestic market, we recorded a growth of around 36%-37% in value terms, out of which 50% of the growth was due to volumes. Okay. Whereas in export, where we recorded the growth of around 50%, in the last quarter, around 30 or 32% of the growth is because of the volumes, and the rest 18-19% is because of the price rise. Okay. Thanks. That's it from my side. Okay. Hello? In last year's presentation, you had said that you have around 1,500+ employees. In this year's presentation, you are saying you have around 1,000 employees, so around 500 employees less. Mm-hmm. Your employee expenses are higher for the year. What is the disconnect there? I think there might be some mistake. We'll get it corrected. Okay. We haven't reduced the workforce actually. This year's presentation has around 1,000 employees, so 500 employees less. Yeah. -I think there are- Yeah. There is some typo error in that. We'll get it corrected. Thank you for pointing it out. Okay. Second on the capacity. You have done some around INR 150 crores of CapEx, but your installed capacity has increased by just about 0.5, even less than 1%. Most of this capacity was in terms of capacity as in the cash outflow. Mm-hmm. Was in Capital Work-in-Progress. That is the reason why the capacity enhancement was not seen to that extent. Okay. Now in the month of May, we have come up with chlorosulfonation capacity. In the last quarter of this financial year, we will come up with two more capacities. That is the point when you will see the- Okay. Capacity build. Okay. Okay, thank you. Yeah, thanks for taking my question. Our question relates to that USFDA inspection we are awaiting on Tarapur facility. If successful, what kind of a scope we can expect from this facility? There are a couple of indirect benefits as well. Other than the fact that a couple of products, our ANDAs, means the ANDAs are still active. Go for those products, some commercial can be started. Definitely, in the beginning it will be slow, but then it can pick up. Apart from that, there are a lot of indirect benefits in the terms that facility also has EU GMP approval and CEP approvals for a few of the big products which we manufacture and we are pretty strong in. There is a lot of demand for those products in European markets. Because of this import alert, the penetrating that market has been challenging. If import alert is cleared, even for the European market from that facility, we can achieve lot of growth. Can you highlight the number of products currently we can readily start supplying for U.S. or Europe if? For Europe. Okay. For Europe, we have products like, we have three good products like ciprofloxacin, celecoxib and clopidogrel from that facility. There are other products as well, like zolpidem tartrate, which are doing quite well for us. This is for Europe or U.S. or. Same products we'll be doing for the U.S. as well. Earlier when import alert came, that time there were the two facilities and one of the facility was already delisted with USFDA, as per your press release, and one facility had got import alert. That's another facility. Mm-hmm. What is the status of that facility? Is it whether we got it again listed? Okay. That facility was never intended to be a USFDA-approved facility, which got inspected at that point of time. That was the reason why we delisted that facility. However, that is a very big and important facility for us for the rest of the market, which includes Latin America as well. Going forward, we are planning to get a new GMP certification for that facility. That facility is never intended for the US market, so there are no plans to convert that facility into USFDA. For Europe we do have that. Okay, thanks. For this year we had a CapEx of INR 145 crores. You mentioned some projects, but I think some of these projects are not complete. For up to FY 2022, that INR 145 crores, on what projects actually we have spent it? We had done a lot of debottlenecking. We spent on that and couple of greenfield projects. That money is still lying under Capital Work-in-Progress. There was one big brownfield expansion for chlorosulfonation, which was also going on as of March 31. That project has now been completed, so it will be put to use in the month of May. Okay. Just help me understand. The major was in the greenfield. Okay. One was the intermediate project. It was under, you know, PLI scheme. That project is complete? That particular project, we opted to not go for PLI, but we still have expanded the capacity for that particular product. The reason we did that was because at the time when we applied for PLI, you know, there was a commitment of some around INR 70-80 crores for implementing that project. Due to advancement in the technology, we were able to complete that project at a very, very nominal cost, you know. That is the reason we had requested government that we will implement the same project, same capacity at a lower cost. They said that, "No, you will have to meet that CapEx requirement," which we thought that unnecessary spending money upfront, there is no point, and then apply for the PLI scheme. That is the reason why we opted to go for that CapEx without PLI. We have already first stage of expansion for that particular product has already been done. Okay. What is the CapEx on that, INR 70-INR 80 crore you mentioned? Yeah, it will be less than that. Correct. Other products like, you know, glycine related products you have been expanding treatment related API. Chlorosulfonation you mentioned- That capacity we have implemented, and it is already online. Fine. That's it from my side. Yeah. Okay. Could you just repeat the amount you spent for the CapEx on the PLI? I couldn't catch that number you mentioned. What was the CapEx? No, it was less. I said it was INR 20 crore. Sorry, sir, INR 20 crore. Is that what you said? No, no. Much, much less than that. Means we are not giving out the exact numbers. Okay. It was much less than that. Okay. Got it. So my questions are the following. The first is could you give the broad gross margin guidance or, you know, a range for the APIs, for the spec chem and intermediate, and for the formulation for Aarti Drugs as a company? The thing is, you know, guidance is for the long term, definitely for APIs we would like to achieve. Right now we have a composite gross margin for API and specialty chemicals. Yeah, sir. I'm just asking that. It was around. No, sir. I'm sorry to interrupt, but I'm just asking that broadly, the API basket, what is the broad gross margins that you have? What is the broad gross margins on formulation and spec chem and intermediate? The reason I ask this is so that we get a sense of how your gross margins may move in the future. The spec chem is the maximum. Since you're asking only for the gross margin, spec chem will be much higher. It's almost, you know, in some cases it will be as high as 50%. These are higher in those particular products. As far as APIs are concerned, on an aggregate level, I would say it should be somewhere in mid-30s to late 30s, the targeted gross contribution. Whereas in formulation it is slightly lower. Vishwa, would you like to answer that? Yeah, sure. Currently formulation gross margins would be about 25%, between 25%-28%, depending on the quarter. We do see the coming quarters becoming as an improvement in that because our gross margins are quite lower on the domestic front and substantially higher on export. Right now we have about 38%-40% export revenues, which we foresee to grow to a larger number and that will improve the overall gross margin. I take it coming a bit closer to early 30% range. Got it, sir. That's helpful. My next question is that you've done INR 145 crore CapEx. You mentioned 5 times asset turns. How much of that should we expect from a capacity utilization in 2023? I would like to clarify one thing that 4-5x CapEx spend is for the brownfield expansion, not- Right. for the entire CapEx. Yes. You did the INR 145 crore as a brownfield, right? No. See, in INR 145, a lot of money has gone for the greenfield project as well, which are still in Capital Work-in-Progress. Okay. How much of this could you quantify went for the brownfield and for the greenfield? See, very roughly around half of it must have gone for the greenfield and half would be for maintenance as well as brownfield. Some bit I think went for the land parcel which we procured, I believe. Fair enough. Sir, also the other thing is you mentioned that there is more capacities which is coming on stream at the end of FY 2023. Are you referring to the greenfield CapEx, which is for the intermediates, of which you've already spent INR 70 crore, give or take, and the INR 250 crore which you're going to spend in this year, all of that will come on stream in FY 2023 end? The Tarapur facility will, you know, seems like it will come on stream, say, a couple of months or three months before the Gujarat facility. The Tarapur facility, we are hoping that, it will be able to come in the trial production by last quarter of this financial year. However, the Gujarat facility, in that, by the end of this financial year we should be able to complete the project. Maybe, you know, immediate start of the next financial year, we should be able to start the trial production. Got it. Out of the INR 70 crore that has already been incurred and INR 250 crore-INR 300 crore that you're incurring this year, how much of that block is towards Tarapur and how much is towards Gujarat in terms of CapEx? Coincidentally, the allocation is almost equal. Okay. For both the greenfield projects. Yeah, they're both equal. Got it. Sir, you generated about INR 70 crore of operating cash flows this year, give or take your run rate, you know, for the coming year. Basis that, given the high amount of CapEx that you're incurring along with the dividend payouts you're doing, how much will be incremental debt and how will you fund this CapEx really? If you give some more color on that. Yes. The major reason that our operating cash flow is looking less in this financial year is one of the major reasons, the fact that we have done historically highest sales in the last quarter, about INR 697 crore. Typically our DSO being somewhere in 90. All of that has went and sat in the receivable portion. That is the reason why, you know, suddenly the increase in receivables is more, and that is why the cash flow from operations is looking less. However, what we foresee is that this means our debt to equity ratio will go as high as 0.7 for the upcoming greenfield projects when we implement that partially through internal accruals and partially through. The targeted debt to equity number is around 0.1. Once the projects start giving revenues, then it will again come down. Got it, sir. That's helpful. Sir, you had mentioned that you have a contract with an MNC for the specialty or intermediate products. Is my understanding correct that the recently concluded brownfield expansion that you have done, for which you spent about INR 75 crores, as you indicated, is also the capacities that are gonna be used for this contract? A very small portion of that went for debottlenecking or incremental expansion of that product. Whereas some other portion also went for a big brownfield expansion for another chlorosulfonation product. There are two products involved where brownfield expansion happened. Got it. Sir, you've mentioned the you know, guidance. You mentioned, I think last call the aspirational guidance of EBITDA being around 18%. Do you see that run rate being hit in probably 3Q, 4Q of this year? Yeah. The first problem is that we were hoping that 17%-18% EBITDA margins should be sustainable. However, the increase in the input cost is so high, you know, almost we were doing an analysis of FY22 versus FY21, you know. The rate variance in the raw materials is as high as 25%, in terms of the increase in the prices year-on-year basis for the entire year. Because of that, now we are taking hikes at the prices at the selling end. But then the thing is, for many of the products, you know, formulation people, they have a cap at which they can sell their product in the market. Those caps will increase by 10% or so every year. Nevertheless, the increase, the hike in the chemicals and the APIs has been more than that. Definitely, it's, you know, we will face some hit as far as demand is concerned. However, once the price ease off from this level then everything should be back at normal. In short, if by Q2 or Q3 18% would be little too optimistic. First we will try to, you know, achieve that 16% EBITDA mark by Q3. Then from there onward with the introduction of this newer product, a more intermediate, then probably we can look forward to increase it further. Correct. The newer chronic APIs that you're having, are their gross margins say 300-400 basis points higher than the acute therapy APIs? So, you know, it's a good question, but then the thing is the margins, the situation has been so dynamic, you know. The margins changes. I mean, usually chronic products had a better margin, but if there is change in market dynamics as in some of the intermediate of a particular product goes high suddenly, then suddenly in one particular quarter, you know, some other products look more profitable than this product. It keeps on changing. The situation is very dynamic. I would say before all these macroeconomic factors hit us, before that, the margins in the chronic segment was. With the current scenario, it is all up and down, and sometimes one product looks better, sometimes other product looks better. Got it. Competitive intensity in chronic APIs is lower or higher? Or and who are your key competitors here? There are a lot of Indian players in the metformin market. There are almost six to eight players or so. You know, six to eight players who are operating in metformin. The bigger would be, I would say, three or four, and the rest would be smaller. We expect that there will be some kind of consolidation in the coming couple of years. The smaller players ideally will exit. It will also depend on the fact how you know, how fast we scale up the capacities further and how fast the market grows. Because typically what happens that if the market is growing at X% and the introduction of fresh capacities are more than that, then typically the weaker players start exiting the business. That is how it will shape up in what we see. Got it, sir. Thanks a ton, Adhish Patil. Okay. Yeah, thanks for taking my question. What sort of volume growth are we targeting or expecting to achieve in FY23 as well as FY24 in API segment? Ideally, we should be getting, you know, about 10%. Last year also we, you know, entire year basis, on a year basis, around 10% volume growth, we were able to achieve in FY 2022. Similar kind of volume growth we hope to achieve in the coming year as well. Is INR 90 crore per quarter like a base EBITDA and we would be able to grow on that? I'm talking not as a margin term, I'm talking as an absolute EBITDA. Is INR 90 crore per quarter a sustainable number? Yes. INR 90 crore should be fairly easy in the rate. Yes, Saravanan. I was saying that INR 90 crore is very much doable, but we hope that it will be more than that. Okay. That's good to know. Formulations, what is the prognosis there? I mean, would it grow faster than the API segment or in the formulation segment in the coming years? Vishwa, would you like to comment? Yeah. No, compared to the API segment, we- I was saying, in the formulation segment as well, we are undergoing a CapEx expansion for a new oncology plant, as well as, I mean, which will be commissioned in the coming three months. As well as we are also increasing our full product portfolio with a good pipeline of products and expanding our market reach in terms of more international markets. We do foresee to grow at a fast pace in the next three years. The projection is to try and double our revenues in the coming three years. In terms of our resources, we are on track for that. Got it. The USFDA plant, currently it is being utilized, right? Although we are under alert, it is getting utilized for other geographies. I mean, you're still waiting for the clearance and then you will use it only for the US business. As of now it is being utilized for other geographies, but then, the utilization is fairly low. Moreover, the thing that will happen if we sell more to regulated markets, that will be a key factor, I mean, for driving growth, profit growth from that particular unit. Okay. That's an important lever to look forward to, right? Once the US FDA clearance happens by end of this year, your regulated markets would get fast-tracked, which will improve the margin trajectory overall. Correct. Okay, thanks. Thanks a lot and all the very best. Yeah, thank you for the opportunity. Just two questions. One, you have said that you have taken the price hike and most of the prices were probably taken in during the March. You believe that the gross margins what we have witnessed during this quarter four is kind of bottomed out and we can see quarter-on-quarter improvement on that? One thing I noticed, that you know in the month of March also when we were negotiating orders, that time also the margin was low. For the month of April and May, whatever we are negotiating, the margins have slightly improved for few of the major products of ours. For the impact to come, it takes around two months. Means towards the end, probably, as we exit the first quarter, maybe June month might be better. That is what I have a feeling. The quarter itself, the Q1, will definitely be impacted. Impacted means more or less similar kind of margins we will observe. Even what you're saying, sir, have you seen impact in the raw material prices that month on month? Also, is there any, you know, increase in that, or is that kind of stabilized right now? Raw material prices? Yes, sir. Raw material prices, we haven't seen a decline yet. Is there an increase or have we stabilized? The question is coming from, sir, because if the prices have, raw material prices have stabilized and whatever improvement or hike you take on the finished goods, that improvement, however small, should be visible. That is what my understanding is that we should see some improvement in margins at least for Q1. Yeah. I will answer a little differently. What taking orders means is negotiating both the output side and the negotiations which are happening in the month of April and better than March. However, these are the orders being taken, but the orders mean, for exports, our pending order is around three months. For domestic it is somewhere 20-30 days, something like. Similarly, raw materials for imported, it will be a couple of months. For domestic it would be 15-30 days. You know, for that to come- Yeah. into the final Okay. Sir, just last question. Is it possible for you to give the QOQ volume increase, either for API or for the whole company? With respect to December? Yes, sir. From March to December. Is there any improvement in the volumes in API? We will do that. I don't have it here. Overall, on the entire year basis, it's the volume growth is 10%. 10%. Yeah. Okay. Quarter-over-quarter, maybe I'll take it from you offline, sir. That I will. This I will note. Sure. Thank you so much, sir. Sir, I just try to understand this CapEx of INR 250-350 crores. Can you give me more break-up for this CapEx that this is for which therapies actually we are going to use this CapEx? Yeah. What is the timeline for this? The timeline is one year. Okay. The thing is, if you remove, say around INR 40 crore-INR 50 crore. Mm-hmm. Rest of the CapEx will be equally divided into two portions. One will go in Gujarat greenfield and other will go in Maharashtra greenfield facility equally. Okay. We'll be coming up with the backward integration and few other intermediates. There will be specialty chemicals intermediates kind of a thing. Some bit of it will be using captive as well. Whereas the Tarapur greenfield would be more of the API and you know allied amines and few derivatives from APIs. Can you give us name of the therapies? The therapy would be. It it will cater to the dermatology segment, in the skin treatment, skin care. For API. For the specialty products, API, specialty products, can you? That would be intermediate to some of our pharma products. Mm-hmm. Mainly, they will be pharma intermediates. Will go in pharma intermediate. Some of it might go for other derivatives of those products might also go for animal feed category. Sir, how much is brownfield and how much is the greenfield? The major would be the greenfield for our coming year. That INR 40 crore-INR 50 crore which we are earmarking, only that would be the part of that would be used for brownfield. Can you give me some names of the raw materials, like, the raw materials that we are using, like, I'm just taking example of the benzene is a one part. What are the raw material that are using? Can you give me the name of some raw materials? Yeah, I mean, we use a lot of raw material. Acetic acid, nitric acid, so many. Means, there are almost 300, more than 300 raw materials which we are using. I mean major names, sir. Major names. Harit, would you like to answer that? Yeah. Actually, we are into antibiotics, so we use lot of fluorobenzene chemistry, intermediates. Also, piperazine is one of them. Okay. lot of basic chemicals we use and it depends on the product specific. Basically, many other intermediates we are using. It's very difficult to give names, but there are at least 200 chemicals we are using at least a month, yeah. Thank you, sir. Not so much. Thank you very much. Yes, [guess] Yes. Yes, my question is whether Aarti Drugs is able to get the revenue target of INR 4,500 in FY26 or FY27? Hello? 3, 4, 5, 6. Yeah. Yeah, we should be that is fairly doable. Okay. Actually, sir, in the call that is of Q3 FY21, you told that 4,500 revenue target will occur in 5 years. Now you are saying that this target can be achieved in nearly next 5-6 years. Whether this target is allocated means it will be delayed? FY 26 means that will be now 23, 24, 25. Means 3, 4, 5, 6. That is four years from now, considering this year. Okay. 4-5 years from now? Okay, sir. Sir. Four years from, yeah. Around four years from now, it should be fairly easy. Okay. Okay, sir. Sir, one more question. Your revenue nearly 43% consists of antibiotics. So whether these antibiotics are partially import substitutes from China? Partly, yes. Yeah. Many of them. Yeah. Okay. Yeah, partly it's because. Yeah. Sir, whether we can believe that the margin which we are getting this year, that is nearly 13%, do we believe that in future it will be, it can cross more than 20% or it will remain 20%-25%? EBITDA margin. EBITDA margins, once all our greenfield projects come into picture. Definitely we can target, you know, something near to 20% and also the regulated markets, you know. We can target crossing 20%. Okay. Sir, whatever we are doing the CapEx that is of INR 600 crore. It will be, I mean, more margin product or less margin product? The CapEx, they are generally higher margin products. Because the thing is right now, even our existing products are performing, you know, below what they usually perform. Even from the existing market also we are hoping for a recovery of around 300 basis points from 3%. Okay. Even from the existing. Mm-hmm. Okay. Thank you. Thank you. All the best for, from my side, sir. Thank you. Thank you. Thank you. Yeah. I was looking at it again on the R&D slide. Last year we had some 57 M.Sc. graduates and 11 graduates. This year again it has come down, how much? One second. 27 M.Sc. graduates and 28 graduates. Is there attrition happening, senior people are leaving on the R&D side? No. Because we are not seeing anything gross margins also. Like you have been saying that you have been backward integration is happening. Mm-hmm. Gross margin to EBITDA margin flow should not be weaker, no? It is getting weaker. Your gross margins should expand or the volume should go up. Nothing is happening in that. Look, see, about the R&D part I will definitely check. Mm-hmm. There is no attrition as such in the R&D. No, because. In fact, Last year it was 57 M.Sc. graduates. This year 28 M.Sc. graduates. It is half. Freshers and new graduates. I mean, we'll check the numbers, but then the thing is, on the shop floor level, the real ground reality is that we haven't reduced any R&D. In fact, we have put up one more floor in our centralized R&D center at Tarapur. We have expanded the R&D last year in fact by one more floor. The thing is, ground reality is there is no cut down in R&D or anything like that. We are doing R&D. In fact, we have put up pilot plants also last year to do R&D of the bigger projects which are Mm. Your other question was regarding the gross margins, right? Yes. Like you have been saying regularly that there has been backward integration and like debottlenecking and all those. Yes. Based on that. Backward integration. Yeah. Let me complete. Backward integration projects are going on. Mm. Okay. Either there should be a gross margin expansion, right? The EBITDA margin expansion. Neither of it is visible. Okay. The backward integration projects which we are putting up. Mm. Mainly that is happening in the greenfield location at Gujarat. That facility hasn't commenced yet. Secondly, we have, in fact, other backward integration. We had put up the capacity. The thing is, there is some problem in the pricing parity of few of the very basic chemicals which are available in India and China. That has also happened because of the geopolitical situation right now. Because of which there is, you know, disparity of the basic chemical prices in India and China is where we are facing the hit as of now. Once we come to level playing ground, then from a technological standpoint, we are the products in top 15 products in which we are operating. Most of them we are either at par or even better than China. It is a temporary phase because of which these gross margins and EBITDA margins have been impacted. That has happened across the board for all the API companies. Right. Thank you. Yeah. Thank you. Thank you everyone for joining us on this call. Please reach out to us or our IR consultant, SGA, should you have any further queries. We can now close the call. Thank you once again for participating in this call. Okay.