Ladies and gentlemen, good day, and welcome to Aarti Drugs Limited Q3 FY 2024 earnings conference call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Adish Patil, CFO and COO. Thank you, and over to you. Thank you. Good afternoon, everyone. Hope everyone is doing well. On behalf of Aarti Drugs Limited, I extend a warm welcome to everyone joining us today to discuss our financial results for quarter and nine months ended thirty-first December 2023. On this call, we are joined by Mr. Harshil Savla, Joint Managing Director, Mr. Harit Shah, Whole-Time Director of Aarti Drugs Limited, and Mr. Vishwa Savla, Managing Director of Pinnacle Life Science Pvt. Ltd., and SGA, our investor relations advisor. I hope everyone had an opportunity to go through the financial results, press release, and investor presentation, which we have uploaded on the stock exchange and on our company website. Let me begin by sharing an update on the ongoing capital investments. The capital expenditure incurred during first 9 months of FY 2024 amounted to approximately INR 152 crores, and the targeted total CapEx for the entire fiscal year shall remain between around INR 250 crores to INR 300 crores. Greenfield projects at Saykha for specialty chemicals got slightly delayed and is expected to be completed by March or April of this calendar year. Tarapur project on dermatology products is on track and in the final stages of completion, and most probably will be starting by the end of this month itself. Operational commencement of dermatology products, I said, is anticipated by the end of January of current calendar year, which shall lead to operating leverage from next fiscal year once these projects are commissioned and capacity utilization is ramped up. Now, coming to the financial performance. In Q3 FY 2024, our revenues stood at INR 608 crore, as against 665 crores, decline of 8.6%, mainly on the account of negative rate variance. EBITDA stood at INR 72 crore, with EBITDA margins at 11.8%, improved by 100 basis points year-on-year. PAT stood at INR 37 crores, and PAT margins at 6.1%, improved by 60 basis points. For nine months, FY 2024, our revenues stood around at INR 1,912 crores, as against INR 1,975 crores, decline of 3.2%. EBITDA stood at INR 234 crores as against 213 crores. EBITDA margins stood at 12.2%, improved by 140 basis points. PAT stood at INR 124 crore, and PAT margin at 6.5%, improved by 90 basis points. Now, coming to segmental performance. In the quarter gone by, in spite of the visible geopolitical uncertainties and macroeconomic volatility, the company has demonstrated resilience by achieving around 8.4% year-on-year volume growth in API amid lower realization due to negative rate variance, which has impacted revenues in Q3 FY 2024. Nevertheless, it is noteworthy that there has been improvement in gross margin, attributed to stabilization of input costs for the majority of our products and operational efficiencies. We anticipate gross margins to improve further at current selling prices, and also on the account of increased proportion in the revenue contribution from export sales for the standalone business, which was down in Q3 FY 2024. Recently, the challenges encountered in certain export regions during FY 2024, attributed to heightened interest rates, dollar shortages, destocking, and conservative ordering, has not gone unnoticed. However, we are cautiously optimistic about a forthcoming turnaround in our export business in near future, on the back of the anticipated interest rate reduction and the end of destocking cycle. Within the API business, the antibiotic therapeutic category contributed around 48%; antidiabetic, around 14%; antiprotozoal, around 16%; anti-inflammatory, around 10%; antifungal, around 9%; and the rest contributed around 4% to the total API sales for Q3 FY 2024. Formulation segment revenue stood at INR 79.3 crores for the quarter, a growth of 58.7% year-on-year, with export contribution of around 58%. In nine months, FY 2024, the revenue stood at INR 257 crore, with growth of 18.2% year-on-year. Specialty chemical industry, while India's domestic chemical demand is expected to stay strong in 2024, price expectations are not very robust, as the market struggles to find the right balance amid the new production capacities coming on stream in the country and in China, changing trade flows, weak global demand and volatile upstream prices. Coming to Standalone performance for the quarter, the revenue for Q3 FY 2024 stood at INR 540 crore as against INR 627 crore, a decline of 13.8% year-on-year. Standalone business contributed around 87% to the consolidated revenue for the quarter. Around 67% of this revenue came from the domestic market, and 33% from the export market for Q3 FY 2024. Domestic revenue declined by around 4.5%, while exports decreased by around 29% year-on-year for Q3 FY 2024. Although, on blended basis, volume grew by approximately 9%, mainly because of fantastic volume growth in the domestic market. As we navigate through short-term challenges, our commitment to overcome these obstacles and achieve long-term success remains unwavering. Our journey may be characterized by uncertainty since past couple of years, but it has equally defined our collective ability to adapt, innovate, and emerge stronger. Today, united and determined, the company shall continue to script the success story. I reiterate on our positive outlook for both our API and non-API business. Our ongoing projects, coupled with optimized capabilities, will serve as the cornerstone of steady growth in the ensuing years. Importantly, we anticipate continued growth in exports within the formulation business, which shall be an important growth driver for the bottom line in coming years. Also, Board of Directors, in the board meeting held on 24th January 2024, recommended an interim dividend payout of INR 1 per share. With this, we can now begin question and answer session. Thank you. Thank you very much. We will now begin the question and answer session. Participants present on the audio bridge, who wish to ask a question, may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants who wish to ask a question are requested to press star and one on their phone now. We have our first question from the line of Pramod Dangi from Unifi Investment Management. Please go ahead. Hello. Yeah, I would like to know the trade component of the exports as well as domestic. How much of it is supplied to trade and how much of it to the ultimate formulators? Okay, Harit, would you like to answer this question? Most of our sales are directly to the consumer, for exports. Yeah. Okay. So given that, Sir, we can't hear you clearly. Can you use your handset more? Yeah. Yeah. So in the opening remarks, you had mentioned that there is destocking and interest rates causing some pressure. Yeah. So as to the ultimate formulators- Yeah. Is interest rates, you know, a big variant? The major, major problem was destocking also. Because of, in the COVID time, people have bought a lot of API and intermediates, and the finished formulation stocks were at peak levels. And what also is happening is that, most of the countries have local tender for their social health. Due to dollar issue and interest, high interest rates, they are not coming up with new tenders, although the stock levels are now coming down for them also. Okay. And the new CapEx that we have planned, there are some new products also. So, the customer validation would happen after the commercial production starts, or has that already been happened? So I wanted to understand how long it will take for the new capacities of new products to come into where the commercial sales can start. Yeah. So the customer validation for dermatology products have already been started. We spoke with the all the important customers in the domestic market, so that has already been done. As far as the specialty second project and intermediate project of concerned of Saykha, majority of the production will be consumed for our own in terms of more than 50%, will be self-consumption for one of our API. The rest of the you can say, by, not exactly byproducts, but the side products of that chain will be sold outside. And there also, we have we have a few customers where we have already spoken to them regarding the upcoming capacities. Okay. So you expect the commercials, I mean, sales to start in the first quarter of the operation, I mean, the facilities being operational? Yeah. To come in, definitely, yes. Okay. Thank you. I'll join back the queue. All the best. Thank you. Thank you. We have our next question from the line of Romil from Chelsea Investments. Please go ahead. Hey, hi. Just wanted to know, like, can you throw some light on the details of our new project finishing up at Tarapur and Saykha? What will be its capacity, and how will the utilization level be phase-wise, once operational and expected revenue? Yes. So the Saykha one, as I said, is mainly for capital consumption. But if you talk about the dermatology product, our, the final aim of the capacity is around 2,000 tons per month. However, we'll be ramping up that capacity, one by one, and, we will start. But, but that ramp-up should happen within, 6-7 months. And at the same time, even the customer ramp, and as, as for the previous question, even the customers will start, purchasing step by step. It won't happen, right in the beginning. So probably for the dermatology product, we can expect some, approximately, you know, 30%-40% utilization in the first year. Okay. Okay, and what price levels for API products are favorable going forward? So the current price levels are very favorable in terms of overall demand of the API, because they are almost back to the pre-COVID levels, historical levels of pre-COVID. So we don't see the prices of raw materials and APIs going down further. But as you correctly pointed out, since September 2023, that is the previous quarter, the selling prices have further fallen down by around 7% on aggregate basis. But going forward, we feel that further fall will definitely curtail. Okay. I'm done with it. Thank you so much. Thank you. Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone now. We'll take our next question from the line of Parth Vasani from KK Advisory. Please go ahead. Yeah, hello. Thank you for the opportunity. We can't hear you clearly, Parth. Am I audible? Can you speak a bit louder, please? Am I audible now? Yes, please go ahead. Yeah. So sir, I had two questions. So first one was on the margin front. So, due to the price cut and weak demand, so how our margins are impacted, and what is the scope for further improvement, if you can just throw some light on that? Yes. So, as you can see, our gross margins have actually improved year-on-year basis. Quarter-on-quarter basis, it has very slightly improved by around 15-20 basis points. But what we expect was that the margin should have grown, gross margin should have grown even more. What happened in the API business, API and second business, is that for every product, it is product specific. For every product, there is certain markup in terms of absolute numbers per kg. So what we have seen in the last quarter, even if you compare to the historical numbers of that market, that market has not been achieved, and that is, that was mainly because of the volatile scenario, the falling trend, which continued in December quarter. So even if we reach that, fixed markup, our margins should definitely improve by around couple of% going forward, in terms of gross margin, and that will reflect in EBITDA margin as well. Okay. Okay, okay. That was helpful. Sir, second question was on the side of formulation segment, which has done well this quarter. So just wanted to know, are there any plans for increasing its contribution in our revenue or something like that? Vishwas, can you answer the question? Yeah, sure. So yes, formulation business, yeah, under the name of Pinnacle, is growing due to primarily as we are transitioning from a contract manufacturing based model to more of own exports on branded and branded generic exports. So here, the contribution both in terms of the revenues as well as margins, we see a good chances of increase as we are opening up additional markets. We have a number of new product launches and new market launches planned over the next 24 months, as well as there is a capacity enhancement brownfield project ongoing. So post-April, we expect to have additional capacities of about 30%, as well as we've set up a new. So, a new manufacturing plant dedicated for oral oncology, anti-cancer molecules, which has just begun, and we are expecting USFDA and EU audits to happen in 2024 calendar year. So with those approvals coming and product launches and capacity enhancement, we see high growth over the next few years for the formulation segment. Great, great. That sounds good. Yeah, that is it from my side for now. Thank you very much for the opportunity. Thank you. Before we take the next question, we'd like to remind participants to press Star and One to ask a question. We have a question from the line of Pooja Mehta from JC Securities. Please go ahead. Hi. So I have a couple of questions. So first question is: So since our largest export market is Latin America, and our standalone exports revenue has declined substantially, so what are the challenges we are facing, and how do we see it going ahead? Harit, would you like to answer this? Yeah, so, basically, we are in Latin America has suffered a lot. We are due to major problems were dollars interest rates and dollar shortage, and third was inventory destocking. So more we expect maybe another one quarter after second quarter of this account this year, 2024, we expect demand to come up again, you know, basically. There's a lot of destocking has start almost getting over. We feel that. Okay. Okay, so we see positive growth ahead? Yeah. Okay, okay. Also one more question: Currently, we are facing freight cost rise due to supply chain issues in Red Sea or any other challenges? No, as of now, we don't have any other challenges, except we buy some raw materials from European sources. There, we are facing some delays, but for as far as we because of Red Sea issue. But, as of now, we are okay with the inventories, so we don't have an issue on the production. Okay. So freight, freight cost is fine, right? Yeah, yeah. Freight costs have gone up, but that we added most of our export shipments are 50% of export shipments are FOB, so that doesn't affect us. And otherwise, we increase, we get a revised rates from the customers. Okay. Okay. Got it, sir. Thank you. Thank you. We have our next question from the line of Pramod Dangi from Unifi Investment Management. Please go ahead. Yeah, hi, thanks again. So there are two things. You know, you just commented to the previous question that last quarter we were down 7%, this quarter again, we are down on top line, and the volume is good. But in the March 2020, we were, you know, we are sitting on a huge high base. So what kind of pricing impact we see going forward for the, you know, quarter-on-quarter or the year-on-year from March to March because the pricing is already there. And you are saying that there will be no more negative growth, so what kind of a volume we are expecting? See, as far as the pricing is concerned, we feel that the negative rate variance should stop. At least it should reduce significantly, because it might be there little bit, because what we observed last time was by February 2023, so last year that is, the raw material prices stopped correcting. But it was still, I think, February, the raw material prices kept on going down. So a slight impact might be seen in March, but it won't be that sharp as the December quarter, on year-on-year basis. Okay. Okay. I believe that, whatever we saw, in the September quarter, the inventory impact is already there, behind us, right? In terms of raw material costs. So the thing is, typically we- Yeah. Typically, if you consider raw material, WIP, and FG all put together, almost around 90-100 days of stock is there in the chain, the entire, value chain. So, and what we have seen is that our December selling prices were almost on an aggregate basis, 7% lower than the September selling prices, on the account of, falling RM. So probably, now, now they have stabilized in last quarter, but then, it's, the little bit of it might flow, you know, might be consumed and sold in the first half of March quarter. Okay, great. And lastly, if I may, you know, any update on the American, the FDA regulations? We were waiting for the inspection to happen. Yeah, actually, the thing is, we had received the communication that our file was already passed to the RA department, that is the inspection department, from the all the responses were reviewed, and they were found adequate. And they passed on the file to the inspection department. Now, the thing is, most of the time, the inspections are proper inspections. So probably we might take one follow-up from the local inspection department that our inspection audit has been pending, so if you can hurry that up. So it might be a follow-up in January. Okay, yeah, thanks. Thank you. That's all from my side. Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone now. We have our next question from the line of Kant Chaturvedi from INR Capital. Please go ahead. Very good afternoon, sir, and thank you for the opportunity. So I just wanted to know about the plans for achieving the debt-free status and roadmap. Can you please highlight the roadmap and timeline for reducing and eliminating the debt from the- I'm sorry, sir, you're not very clear. Can you use your handset mode, please? Yeah. Can you hear me? Can you speak, please? Yeah. I just wanted to inquire about the plans for achieving the debt-free status of the company. Could you please highlight the roadmap towards reducing and eliminating the debt? Okay. So, our current debt-to-equity ratio on a consolidated basis is 0.47. So historically, historically means almost 10-25 years. I'm talking about 5-7 years before today, before 2024. We had run the company around 1.4-1.5x debt. So we have reduced that sharply to 0.47, in spite of the fact that we have been doing a lot of CapEx for the future growth. So in spite of that, we are able to reduce our debt to equity to 0.47. So the thing is, once now the projects gets operationalized, to reduce debt won't be an issue for us. But the problem is, if we reduce debt too much, our ROE will also go down. Frankly speaking, we are very much comfortable to run a debt of around, you know, 0.5-0.7 in terms of debt-to-equity ratio. We are very much comfortable doing that. So probably, means, we are not looking for a debt-free company, but yeah, definitely we'll keep debt to the minimum level so that it won't hamper, means, it won't create any cash crunch on the company anytime in near future. And I would also like to highlight the fact that we have also done buyback in the beginning of this year. Along with the CapEx, we have also done the buyback. And in spite of all this, cash outflows and shareholder payouts, our debt to equity is still, zero point four seven as of now. Thank you, sir. Thank you. A reminder to participants to press star and one to ask a question. The next question is from the line of Vaishali Shah from Unifi Investment Management. Please go ahead. Hello, ma'am. Congratulations on the set of numbers. A year back, there was a mention of increasing the contribution of specialty chemicals and intermediates to 20%-25%. My question is on that front, what kind of chemistries or what kind of products are we targeting? And what is the roadmap going ahead? So that is what I wanted to ask. Harit, would you like to answer the product line? Yeah. So for the specialty chemical, we are coming out with methylamine project, which we are expecting to be commissioned somewhere in February, March or April. So there we are going to make dimethylamine, methylamine, monomethylamine and trimethylamine. Then 50% of their consumption is within the group, and 50% we need to sell outside, the outside market. The second project is of salicylic acid. We are planning to make 2,000 tons per month eventually, and we are starting the production somewhere in first week of next month, or first week of next month, yeah, February. And we'll start gradually and at this moment, we'll run at 20. And as Adish Patil mentioned, first year of a capacity utilization will be a 30%-40% for that. So if both project goes online, then our specialty chemical business value will go up to, like, that's what... Okay, that's from my side. Thank you so much. Thank you. Before we take the next question, I would like to remind participants to press star and one to ask a question. The next question is from the line of Ruchi Gupta from Value Consultancy. Please go ahead. Yeah. Good afternoon, sir. Can you please throw some light on the specialty chemical segment? How do we see in FY 2025 growing? Also, we are coming up new plant in Gujarat. What are your plans regarding that? Yeah. So as Harit was mentioning, that Saykha plant will be operational by April, mostly by April end of this current calendar year. And we have chlorosulfonation product line as well. Those capacities are there in Tarapur, that will also be ramped up. Then we are coming up with salicylic acid as well, which will be a dermatology product. So overall, our second business, we can see a very good growth. Means we can easily double it once all these production line, production capacities come up. For the next financial year, overall, it's slightly difficult to say as of now, but we'll definitely target a handsome growth of around 30%-40%. But it all depends on the rate variation. I hopefully, the further negative rate variation won't take place. If that is there, we should be able to achieve very high double-digit growth in the second segment. Yeah, okay. Also on raw material prices front, how were the prices for top raw materials in quarter three versus previous quarters, and your views on future likely prices to be? Harit, would you like to answer? Also on. Hello? Yeah. Yeah. Also, on raw material prices front, how were the prices for our top raw materials in Q3 versus previous quarters, and your views on future likely prices to be? Yeah. See, most of our raw, major raw materials, are less than pre-COVID levels, and we don't expect further price going down. The price from quarter two to quarter three, of course, definitely prices have come down, of raw materials. Now prices are more or less stabilized, and we don't expect further, price reduction in these chemicals, intermediates, yeah. Yeah. Thank you. That's helpful. Thank you, sir. Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone now. We have our next question from the line of Madhur Rathi from Counter Cyclical Investments. Please go ahead. Thank you for the opportunity, sir. Sir, I wanted to understand for next two to three years, with all this CapEx coming in and new sources of revenue coming in, sir, what kind of top-line and bottom-line growth do we expect going forward? Yeah. So we definitely will target a volume growth of around 10%-15% for coming years. We are taking into account that the new projects will typically have some troubleshooting problems, which will overcome soon. And then there will be some gestation period as well in terms of demand to pick up, means getting the product approval from various customers. So we are thinking of 10%-15%, but that will continue in the further years as well. Because overall, we are planning to achieve around 4,000-4,500 for the standalone company from all these new capacities which are coming up. Sir, what kind of margins will we see from this incremental revenue coming in from the specialty chemical, as well as the API business? Yeah. So typically, from the market, what we have seen for these products, the EBITDA level margins are quite high that way, in the plus of 18%-20%. But the thing is, when we come with a newer capacity, definitely we expect some bit of price drop. So initially, we probably around 15%-16% EBITDA margin should be fairly achievable from these products is what we believe. Okay. Sir, do we have some off-takers for the salicylic acid as well as the methylamine project? So, sorry? Sir, do we have some off-takers for the salicylic acid as well as the methylamine project that will be starting? You're asking off-takes? Yes, sir. No, so the thing is, salicylic acid plant will start in next week. So we have already spoken with customers, and they're ready to buy from us because we will be the only manufacturer after China for this product for Indian market. So that sales should pick up pretty fast. And, Saykha one, as Harit would tell you that around more than 50% is the captive consumption. So that, we will immediately start consuming. Okay. Thank you, sir, and all the best. Thank you. Thank you. Before we take the next question, I would like to remind participants to press star and one to ask a question. The next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead. Yeah, thanks for the opportunity, sir. I, I joined call bit late, so maybe to b ut just wanted to understand, these prices continue to, you know, fall in the API segment. Is it just partly to do with the lower raw material costs, and so subsequently it is passing on to the benefit to the customers, or there is something more to this? And how long will this last? Tushar, can you please mute your line? There's some background disturbance on your line. Sure. Thank you. Yeah. So, the main factor for the raw selling prices of APIs to go down in December quarter was related to the falling raw material prices. But having said that, I would also like to point out that last quarter our exports did not do well. And the export market typically will get higher gross contribution and higher margins because of the requirement of higher regulatory approvals. So because of that, since the proportion of those sales, the higher selling prices, that went down, we had double impact. Not only because of raw material, the selling prices went down, but also on an average level, because the export component was lesser in December quarter, hence it went down little further. So on that account, we feel that we should be able to regain some bit of margin in terms of growth contribution. But on the pricing front, are you witnessing further reduction in the raw material prices? So yeah, so that question, Harit, answer that, as compared to September quarter, we saw some reduction in December quarter, but now the prices have stabilized. So now we are not foreseeing further reduction because even the selling prices of APIs and even the raw material prices, they are almost to the level of pre-COVID levels, pre-COVID historic levels. So we don't foresee that they can go down further, considering the fact that over the last 4 years, even the inflationary, other inflationary factors are also there. So we don't foresee the raw material prices to go down further. Having said that, we do carry raw material, WIP, and which will all put together. We do carry around 90-100 days of inventory in pipeline. So a little bit of that inventory will be sold in the first half of March quarter as well. So that might impact the performance of March quarter to some extent. Understood. And just, on the inventory in the system, not at the company level, but at the industry level, you think that the inventory for our core products are largely now stabilized and, at lower levels, and so that will not further drag the prices as far as our products are concerned? Yeah. That, that is what we feel, especially in export market, because as far as domestic market was concerned, we had done a fantastic volume growth of around 20% year-on-year for December quarter. So domestic demand point of view, there is no issue. The only issue lies with the export market. So like we talking and we believe that now it should be done, so we hope that the demand should pick up for the export markets as well in the coming quarters. Understood, sir. Thanks. Thanks a lot for this. Thank you. Thank you. To ask a question, please press star and one. We have our next question from the line of Vaishali Shah from Unifi Investment Management. Please go ahead. Thank you for taking me again. My question is that there is some seasonality that we can see in case of formulation segment in both domestic as well as export front. So, is it expected to stabilize further as we grow or looking at year-on-year numbers is a better metric for it? So, as far as seasonality is concerned in our product, on antibiotic, antidiarrheal, these two segments, historically what we have seen, the December quarter is the lowest quarter, and March, June, and September quarters are usually better in terms of these therapeutic categories. But rest of the categories like, antidiabetic and cardiac protectant, even anti-inflammatory to some extent, we don't see much of seasonality. But having said that, our antibiotic does contribute around 44% to the total API sales. And API sales will be roughly somewhere around 70%-80% of the total sales. I guess I was not clear. My question was on the formulation front, that we see certain seasonality there, that H1 is quite good, whereas at H2 is mean. Yeah. Yeah, sure. So, going forward, at least on the more on the international markets, we don't think the formulation business will be subject to much of seasonality change. However, what is happening currently, since the business is very new in many of the international markets, we are having some new product launches, some new markets opening up, which is what is causing majority of the changes. But going ahead, we don't foresee too much of seasonality impact on the formulation business. Of course, on the domestic CMO part, there will be a little, a slight impact during the winter. The season is a little lower. But, in general, in totality, we don't think the business would suffer a lot, would change a lot due to seasonality impact. Can you please throw some more light on domestic CMO front, which you just mentioned right now? Yeah. So domestic CMO has been our core business in technical in the formulation segment since we started. However, the objective has been that over the last couple of years, we have been increasing our sales and production contribution more towards international markets, more towards our own branded generics. So as of now, about depending quarter to quarter, about 40%-50% of our business is still coming from the domestic CMO. And with our volume expansions going on, we plan to maintain that at around 40%. And in the domestic CMO segment, we cater to most of the leading Indian MNCs, and primarily on products where we have backward integration on the APIs. We supply those products to them. Thank you so much. This was all from my side. Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone now. We have a question from the line of Gagan Thareja from ASK Investment Managers. Please go ahead. Yeah. Am I audible? Sir, not very loud. Is this better? Can you hear me now? Not really. Can you speak now, please? Yeah. Uh- Yes, go ahead. Okay. So the first question is on the working capital. If you could give some idea of. Y ou know, how inventory and receivable days compare at the close of this quarter versus a year ago? Yes. So if you see, at the big picture, if you compare with the March 2023 number, the December 2023 numbers looks much better in terms of, data cycling. In fact, we were able to reduce the December- Would it be possible to give it? I'm sorry, December 2023 as compared to March 2023? No, I'm asking December 2023 compared to December 2022, if it's possible. December 2022, exact numbers I don't have right now. March 2023 I have. Okay. March, March numbers were somewhere around 100 days, but that has come down to 90 days for December 2023. Okay. I don't have. Maybe, maybe offline I can give you those numbers. All right. And would year to date, the company have taken some sort of inventory losses? Because you would have been holding, you know, input inventories at high cost, and they have continuously dropped through the year. And if so, can you enumerate the value of the inventory losses that you would have taken? So the thing is, this time we haven't taken any inventory losses because the domestic sale was high. So everything has been sold. Nothing is in stock, which is at a level, you know, which we have valued over the market price. So that is not there. So that is why we haven't taken any inventory losses as of December end. But because most of the product was sold, so automatically it came in the raw material pricing. No, I, I understand, but would there not have been any mark-to-market sort of impact on- No, that did not happen for December end. Okay. But for the first half of the year, if there was any- No, the thing is, typically what happens, generally, if we are holding to a lot of stock, then such things happen, in terms of, marking down. December quarter, frankly speaking, our volumes were up by 8.5%-9%. So, so, so that way, we were able to sell the product, and that is the reason why it did not come in inventory losses, but actually it came in the growth contribution itself of December number, December quarter. Okay, fine. So, I mean, as you head into FY 2025, you know, you've said that even from September to December, your prices have gone down, right? So if you know, prices stabilize here on year on year, at least for the first two, three quarters of the next financial year also, your pricing would be lower. And if you have volume growth of 10%-15%, would that therefore mean that value growth would be lower than that? Because the pricing, if it maintains at current levels, would be lower than what you have seen in the first half or first nine months of this year. Yeah, I understand what you're saying. So as you correctly pointed out, the first two quarters, the June quarter and September quarter prices, they're much higher than what the prices are today, and what we are seeing December quarter. Yes. So definitely for the next year, first two quarters can see some bit of negative price variation. Okay. But then we feel that, so it won't be that high as we are seeing right now, year-on-year basis. But our volume should grow further because the new capacities will be added for the next financial year. So that should also take care of some bit of volume growth. So, just to get, you know, some idea, because, you know, you talk of a substantial amount of new capacity coming on board. First thing is, you know, when you monetize it fully, what's the revenue potential of these assets that are getting commissioned today or in the near future? And, you know, over the next year, where do you see utilizations broadly on these assets? And thirdly, you know, there will be fixed costs associated with these assets, which as and when you commission them, you know, will come into the OpEx. And obviously, till the time you hit a reasonable utilization, those costs will impact margins, if I understand it correctly. So while, you know, at optimum utilization, they might benefit margins to start with, actually impact margins. So if you could, you know, give your assessment of these three factors, one, full potential; two, what, what could be utilization; three, what could be the margin trajectory starting and at optimal levels? Okay. So the new CapEx, what we were planning, what will come online in next couple of months, we feel that, that, at current price levels, the revenue potential... the incremental revenue potential from these new projects would be anywhere between INR 1,000 to 1,200 crores. Okay. As you correctly. But the thing is, what happens is that, as we are scaling up the production, the workforce and everything which is added... It's typically on incremental basis. It won't create that big of a drag. Means first year, even at, I would say 30% utilization, we would be able to make profit out of it. Not that we will make profit. INR 1,200 crore optimal? Right. At the optimal level, when we go, you see current market, as per the current market trend, those products are fetching EBITDA margins upwards of 18%-20%. But, the thing is, once the capacity is launched, there might be some bit of, price war. So, but still we feel that, 15%-16% should be easily achievable from the new plant. 15%-16% is achievable at what utilization level, is what I'm trying to understand? I think, beyond 50% we should be able to achieve that. Okay. And for FY 2025, you are aspiring for what sort of utilizations of this? FY, we, we were thinking of around 30%-40%. 30%-40%. So basically what you're saying is that incrementally, the new capacity should give you a turnover of INR 400-odd crore in the coming year. And while optimal margins could be 15%-16% when you hit that utilization. First of all, am I correct in saying INR 400 crore, or are you saying that you'll exit the year at 30% or 40% utilization starting at zero, and therefore, blended utilization will be more like 15%-20%? Correct, correct. So we will be exiting at that level. Okay. Because initial for first and second quarter, there might be some commercial level coming from. So basically, 15% utilization is what you will have for this, and that would mean, you know, roughly INR 170 crore-INR 180 crore of turnover. We'll try more. No doubt we will try. Yeah. Because the captive consumption that will immediately go up right from the beginning. I get your point. But, but if, you know, if the incremental turnover from, from this asset in the first year is going to be around INR 170-INR 180, what could be the incremental EBITDA, you know, you could generate from that? I presume it would be less than 15% or probably more like 10%, 12% to start with, and then it moves up. As you, as you sort of, you know, exit the year, perhaps you'll be, you know, absorbing your costs better, and, and there, the quarterly run rates might be higher in margins. But for the full of next year, the new facility margins would probably be more closer to what you're doing right now. Would that be a reasonable assessment? So EBITDA, the, the main drag factor would be depreciation and the interest. So at the EBITDA level, probably we will still be able to make better margin, 9%, 10%, 12%. But as you said, but at the PBT level, there might be little bit of drag because of depreciation and interest. All right. All right. I, I get that. Right, sir. And, and on the current, you know, capacity that you have, incrementally, how much more can that add? I mean, when you say, you know, you talk of 10%-15% volume growth, you're talking of that coming entirely from your existing capacity, or you're taking into consideration the new capacity as well? That is, including the new capacity as well. The existing capacity would give you how much in terms of additional volume growth? We can target somewhere between 5%-10%. Okay. All right. And, and would you be in a position to do better gross margins on, on the existing capacities, going into the next year? Yes, that is what we believe, firmly believe. Of what order could the gross margin be higher by? We feel that, frankly speaking, if we restore back to that markup, basic markup beyond the, over, over the RM cost, it can push our existing margin profile by couple of% for sure. Okay. And while domestic this year has been, or this quarter has been good in volume growth, the pricing is still down. But exports, the volume itself is down. Domestic pricing are almost down by around 24%, whereas the volumes were up by more than, little more than 20%. All right. All right. And in exports, how was it, volume and value? Exports, it was exports, it was both were down. In fact, the rate variation was around, say 15, -15, and even the volumes were around 14.5 in negative. This is for your API business or your drugs? This is for the API business only. API, this is for the standalone business, rather. But the formulation business did really well. We had around 58% of our revenues in formulation came from exports. Okay. All right. Thank you, sir. Thanks. I'll get back. Thank you. Thank you. Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone now. As there are no further questions from the participants, I now hand the conference over to management for closing comments. Over to you, sir. Mr. Patil? Yeah. So thank you everyone for joining us today on this earnings call. We appreciate your interest in Aarti Drugs Limited. If you have any further queries, please contact our investor relations advisor, SGA, or us directly. Thank you, and a Happy Republic Day to all in advance. Thank you, sir. On behalf of Aarti Drugs Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.