Ladies and gentlemen, good day, and welcome to Aarti Drugs Limited Q2 FY25 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 a guarantee for future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participants' 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. Adhish Patil, CFO and COO. Thank you, and over to you, sir. Thank you. Good morning, and a warm welcome to everyone present on the earnings conference call of Aarti Drugs Limited. On this call, we are joined by Mr. Harshit Savla, Joint Managing Director, Mr. Harit Shah, Whole-Time Director of Aarti Drugs Limited, and Mr. Vishal Savla, he won't be in the call, and SGA, our Investor Relations Manager. I hope everyone had an opportunity to go through the financial details, press release, and investor presentation, which we have uploaded on the stock exchange and on our company's website. Let me begin with the highlights of Q2 and H1 FY twenty-five financial performance. During the last quarter, on a year-on-year basis, there is a drop of revenues and profitability, mainly due to lower realization, driven by negative rate variance and weaker market demand in the API business. The volumes have remained flat on year-on-year basis, whereas on quarter-on-quarter basis, we have seen a volume growth of 8% in API segment. Looking ahead, we are optimistic about a further improvement in pricing, which should support continued growth in FY 2025. EBITDA stood at INR 68.5 crores, with EBITDA margin at 11.5%. Tax stood at INR 35 crores. Going ahead, by the end of FY 2025, we anticipate an improvement in margins, mostly driven by upcoming selling price levels and an anticipated demand growth in export sales. On a standalone basis, revenue stood at INR 543.1 crores, as against INR 577.5 crores, down by 6% on YOY basis, with 66% of the revenues coming from domestic market and 34% from the export market. For the quarter gone by, within the API business, the antibiotic therapeutic category contributed approximately 40%, antidiabetic around 18%, antiprotozoal around 17%, anti-inflammatory around 10%, antifungal around 10%, and drugs contributed around 4% to the total API sales. Formulation segment revenue stood at INR 65.6 crores for the quarter, with exports contribution of around 53%. In H1 FY 2025, revenue from formulation segment stood at INR 136.6 crores. The greenfield project at Saykha, Gujarat, for specialty chemicals, is on track, which is planned to commence in this quarter. With this, the operating leverage is expected to kick in from the second half of the year, which include capacity utilization and more backward integration. The production of salicylic acid had commenced at the beginning of this financial year. We are still to ramp up the capacity of salicylic acid to the full potential. Currently, we are producing roughly around 100 tons per month. There have been certain teething issues, and we expect to ramp up the production to 300+ tons per month by end of the current quarter. In total, we have a capacity of 1,800 metric tons per month, which we will ramp up in a phased manner throughout FY 2025 and FY 2026. During H1 FY 2025, the company has incurred CapEx of approximately INR 90 crores, mainly towards capacity expansion and utility outlets, backward integration and new product launches. We anticipate a total CapEx of roughly around INR 200 crores for the full year. This CapEx would be mainly through internal accruals and partly through term loans. In September 2024, the company has completed the buyback of six lakh sixty-five thousand equity shares at a price of INR 190 per share. Face value of INR 10, which will be paid out in September 2024. The company continues to strive to maintain payout to the shareholders while continuing to invest in the next leg of growth. The pharma API manufacturing industry is constantly evolving, and we are committed to staying ahead of the curve. We continue to expand our capabilities and enhance our offerings to meet the ever-changing needs of our customers. We also plan to invest in new technology and equipment that will help us streamline our processes and improve the efficiency. As we navigate through short-term challenges, our commitment to overcoming obstacles and achieving long-term success remains steadfast. Our journeys may be marked by uncertainty, but it is also defined by collective ability and as innovate and emerge stronger. I reiterate on the positive outlook for both our API and non-API business. Our ongoing projects, coupled with optimized capability, will serve as a cornerstone of steady growth in coming years. Importantly, we anticipate continued growth in exports within the formulation business as well. I would also like to point out that this was the first year where we have published our sustainability report. It is published both on our website, available on Stock Exchange. Please have a look at it, because we strive to reduce our carbon footprint in spite of having the leading capacity in manufacturing sector of API industry, we would still like to reduce our carbon footprint and contribute to the environment. With this, we can now begin question and answer session. Thank you. Thank you. 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. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all the participants, you may press star and one to ask a question. The first question is from the line of Rashmi Sancheti from Dolat Capital. Please go ahead. Yeah, thanks for the opportunity. You know, just want to know, what was the negative rate variance in quarter two on YOY basis, and how much was it in H1 FY 2025 in the API segment? Hi, Rashmi. So, on a YOY basis, we have seen around 7%-8% negative rate variance for the quarter two. For the quarter one, it was little higher, but now, as quarter- on- quarter, the rate variance is hardly 0.5% on a composite level. So we have seen some products going up, some products going down, so it has more or less stabilized. However, I would like to point out that in certain antibiotic products, we have still seen a slight decline in selling prices for as we start currently in the quarter. But can you quantify, you know, how much is the rate variance, negative rate variance in this quarter two, quarter one as well as in first half? And how much are you expecting that, you know, it should come, come off in the second half of FY 2025? Yeah. So the quarter- on- quarter is approximately at. There is no rate variance, thank you, on quarter- on- quarter. It's hardly a minus point five or something, in June quarter versus September quarter. Whereas September versus September 2023, there is around 7-8% rate decrease. And in first half? Composite level, I don't have it right now. Okay. How much are we expecting in H2, that this 7-8% should come up to what number on a YOY basis? It should go down, because last year, from September month onwards, the pricing had started correcting, as far as raw materials are concerned. And that is, and December also, a lot of December quarter, a lot of things were corrected, and which continued till, I think, month of January at max, and then it got stabilized. Last quarter, last year, that is. So it will be, I think, low single digits, probably. Low single digits. Okay. And, you know, the Salicylic Acid, you know, the sales which have commenced, it will be part of your API segment, right? Yes, but the applications of salicylic acid is quite varied in the sense it goes in manufacturing of various salicylates, which have application in flavor and fragrance industry, perfumery industry, as well as cosmetic industry. So it's tough to classify as API because it also goes as an intermediate for manufacturing of aspirin as well. So it will be a mixed category. Understood. So how should we look at the API segment growth for FY 2025? Because, you know, in first half we are showing a decline of around 10%, but your rate variance would come off, the negative rate variance would come off in second half. At the same time, volume growth is also improving. You know, so for the full year, you know, we will still see a decline, or, you know, there could be some flattish growth. You know, I'm just talking from an API segment perspective, excluding your specialty chemicals. Okay. The API, the current utilization of the API segment is roughly around 78%, roughly, in the quarter of September. It's 543, if you subtract the Specialty Chemicals. Then that is roughly around 78% of the utilization. It still has a scope to increase. Whereas we are adding certain capacities for antidiarrheal products of Metronidazole. We are planning to increase the capacity of Amoxicillin product, presumably as well, going forward, and we have added Fluconazole, which is an antifungal product, so that is also we are increasing API sales. The rest will come from the higher utilization of the current capacities. Okay, so any sort of guidance which you can give, like on FY 2025 and FY 2026 basis, you know, how this API segment growth should look like? Actually, we'll have to rework on these numbers based on current pricing levels. But, I can give you one indication that with current pricing level and our current capacity, it will roughly give us now potential revenue of around INR 2,750 crores for the standalone business, which will include both API and the Special Chemicals. API and Special Chemicals. Yeah. This is excluding the greenfield projects, which are pending. Okay. And this is, you know, we are targeting for this year? No, we are not targeting for this year. Out of this, only at, as of now, around 78% is being done as far as quarter, September quarter is concerned. Okay. Thank you. That's it for now. Thank you. Thank you. A reminder to all the participants, you may press star and one to ask a question. The next question is from the line of Raj from RJ Partners. Please go ahead. Hello, am I audible? Yes. Hello. Yes. So how much is the price drop in quarter two? With respect to last year, it is up to 7-8%, same percent. With respect to September June quarter, it is hardly minus 0.5%. That is just Q1. Prices dropped by 0.5%, and y ear- on- year, it has dropped by 7%-8%, right? Correct, correct, correct. In an earlier call, we had guided for INR 4,200-INR 4,500 crores of sales in next three years' time. I wanted to know the outlook for the full year, FY 2025. Yeah, yeah. FY 2024. So the thing is, with the total guidance, okay, that was the potential guidance for the coming two to three years' time. So we would like to revise it down because of the fall in current API prices. So what we feel that now I think that the current potential will be anywhere between INR 3,500 to 4,000 crores as far as current pricing are concerned. But if there is any increase in the pricing, that will definitely help us within that original number. All right. And sir, about the EBITDA outlook for next three years? EBITDA, our efforts will always be to reach a target of around 14.5%-15.5%, because that is what we historically used to manage. Definitely, there were a lot of challenges in last couple of years in terms of the volatility of pricing of raw materials, plus, the coal was very high, but now that has also corrected. Plus, the power rates have gone up, but there also we are taking a hit now to reduce our power rates by going into renewable energies. So with all those efficiencies that in place, we feel that we should be targeting around 15%-15.5% EBITDA in the long term. All right, sir. And sir, about the price drop in the API, so what exactly is the issue? Is it an oversupply situation? Like, is it a demand issue, or there's excess inventory stocking? Yes, yes. So, the primary reason would be the fall in the raw material prices. That is the primary reason. However, that is coupled with lot of secondary reasons. Like in first quarter, there was a bit of overstocking issues, and there was lack of demand, both in domestic as well as export market, especially in the export market, which was also because of the fact that there were a lot of elections going around in most of the export geographies. So now the export demand should come back. We have already seen a little bit of uptick in the number of inquiries as far as the export market are concerned. There are a lot of secondary reasons as well, like overstocking or the elections, other macro conditions, but the primary reason continues to be the raw material prices. Understood. So then, do we see any sales growth for FY 2025, or will it be a year where sales will go down slightly? Yeah, the sales, it should be flattish, because the thing is, earlier, we had thought that, even if, at the end for the year, at the composite level, even if there is 7%-8% negative rate variance, by having around 15% volume growth, we should still be able to post a high single digit growth number as far as value growth is concerned. That was our outlook at the beginning of the year, when we started the year. But right now, because the first two quarters, there was lackluster demand, you know, so we were not able to recover that loss in value because of the negative rate variance. So we feel that this FY 2025 might look flattish by the end of the entire year, FY 2025 versus FY 2024. All right, and sir, about FY 2026? So FY 2026 should be a turnaround story because our salicylic acid plant also streamlined. We, because of the streamlining issue, because that is a big project for us, so it does impact the bottom line quite heavily. So in fact, even this quarter, we point out that around 5.85, 5.5, between 5 and 5.5, somewhere around 5.5 crores impact was there at the bottom line. Just because the, you can say, we are not able to absorb those increase overhead because of the lower production and the potential. So when that is ramped up, the capacity increases, the operating leverage will kick in, and that will help us reduce these losses. All right. And sir, when do we expect to ramp up the production of salicylic acid? It's going on step by step. In October month itself, we will be slightly ramping up. In November month, we are internally targeting at least, you know, to go beyond two hundred to three hundred tons per month, and then we will sequentially keep on ramping it up. Once the problems are solved, then the ramping up will be quite faster. Understood. So So sir, how much is the sales per ton and EBITDA per ton in this product segment? The sales potential with the reduced prices would be anywhere between 275 to 300 crores market potential is there for salicylic acid. However, there are a lot of derivatives of salicylic acid like methyl salicylate, octyl salicylate, benzyl salicylate. They are also in a lot of. In fact, those derivatives go for export market, where the salicylic acid, if you want to sell, you'll be selling in the domestic market. With the fall in prices in the salicylic acid, that has mainly come because of the dumping from China. Earlier, the prices were in the level of INR 150 to 160 per kg, which is now from INR 125 to INR 130. But because of this fall, now the salicylates are looking more attractive, you know? We are thinking of going ahead to have a, you know, spare capacity for salicylates. In case we are not able to make money in salicylic acid, then definitely, salicylates will definitely make more money. All right, and sir, you have an outstanding CWIP of around INR 300 crores, so when exactly all this CapEx is expected to come on stream? Yeah. So, it is slightly lower than that now, but so this mostly should come by this December quarter, because Vapi plant, the big greenfield, it will be online. So once it is complete, then it will get transferred to future things. All right. So we are expecting around, like, INR 300 crores of CapEx to come on stream by Q3 FY 2025 end? Exactly. Mostly, mostly Q3 itself, if not, then at max Q4. But you see it itself. All right. And sir, do we have any further CapEx plans for FY 2026? So, we have been doing small brownfield expansion, like key internal plants that are currently sitting, putting more production blocks. We do have land parcels for small, for few cardioprotectant and for antidiarrheal. We have already taken the steps. Antidiarrheal will come online in a month's time, in fact. I will get the EC as well to continue to operate for that facility. And plus, we have some plans for brownfield expansion. Then, the plan for future growth means I would say beyond 3.5-4,000 crores of turnover. The plan is still on paper, and once we decide, finalize the products which we want to go ahead with, and then we'll start launching those in the land parcels which we already have in the industrial sector. All right. Okay, sir. Thanks. All the best. Thank you. Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Chirag Dagli from DSP Mutual Fund. Please go ahead. Yes, sir, thank you for the opportunity. How is the Metformin production scaling up? The Metformin demand has picked up well, frankly speaking. So we are selling, you know, around more than thousand tons per month, thousand tons per month, for the last quarter. Understood. And here, if I remember correctly, we can be at the eighteen hundred. Yeah, so right now, we do have a capacity of around thirteen fifty to fourteen hundred tons per month, in between. So the plan was to scale it up to seventeen to eighteen hundred in a very short time. But for that, we also have to go through the amendment of EC and everything, so. But that seems to be, I mean, there is no hurdle on that one? Not right away, but then there is one challenge that we were supposed to get the land parcel adjoining that facility. So that was little bit delayed because for some other reason, the government reason, that is a little bit delayed. Once you get that, then it will be much easier for us to scale up quickly. Adhish, is there visibility beyond eighteen hundred for this product, or do you think? No, definitely. So once you get that land parcel, frankly speaking, we have a visibility of around 3,000 tons per month. It is possible we have to go probably forward integration is needed probably for this product, because most of the competitors in this line are going that way. So probably because fortunately we do have a 100% subsidiary, Pinnacle. So that support is there. So ultimate potential, the long-term game is about, you know, 2,000-3,000 tons per month kind of ultimate. Understood. And this product is fundamentally more profitable than the rest of the business? So in a bad business cycle, the other products have done better than this. But on a steady state, we still feel that this, because this is anti-diabetic segment, so it should be like growing product. Even now, it is growing at a good pace. So we are committed to this particular product. So we think the future is better than rest of the products for this particular product. Understood. The CWIP, the second one is on the capital work in progress of slightly less than INR 300 crores. Does that include the derma facility? The derma thing is already online, right? Yes. The thing is, you know, in derma, probably one or two plants, one or two sections, that has to go online. Understood. But most of the derma is complete. On that, we are already taking the depreciation? Yeah, we are taking the depreciation. Understood. Yeah. In fact, we are taking almost around between INR 3.5 to INR 4 crores per quarter. We are taking a hit in interest plus depreciation. You said INR 5.5 crore impact on. That was on PBT level, is it? That was on PBT level, correct. PBT. So of that PBT, INR 45 million is depreciation, interest, and about one- No, no. Three, three and a half, three and a half, basically. 3.5-4 is interest depreciation, and the balance maybe 1.5-2 crores is. Around two, yeah. Understood. Understood. And, the INR 600 crore CapEx that we embarked on, starting FY 2022, looks like most of that is already including the- Correct. Correct. Most of it will be done by this year. We should broadly be done with that CapEx. Yes, we should be done. Correct. Understood. And, so, you know, so 300 crores resides in the, CWIP. The other 300 crores, which has already been capitalized, you know, is that, when you think of profitability on that piece, is that optimal, suboptimal? How should we think about, what is already, in the ground and, you know, commercialized? In terms of profitability, it is already running at optimal level. That is what you ask me? Yes, yes. Because, I mean, INR 300 crores is- No, so no. The derma is not right now optimally working. Once we commence the production, which by November, then definitely the negative thing will go. First of all, there is break even, and once you break even, means 700-800 tons per month kind of thing, then it will turn profitable as well. This INR 6 crore will go away and plus some additional profit should come. How much of the INR 300 crore CapEx that we've already commercialized is on the derma piece, which is suboptimal? It could be roughly around two hundred, roughly. 200 odd crores. Correct. The balance 100 crores is optimal in some sense? Yes. The thing is, not the entire INR 600. The INR 600 plan was like, one of the products got delayed. Mainly because then the INR 400 crore plan, you know, the two greenfield products, roughly INR 200 crore each. The INR 200 one will come online. Okay. Yeah. Or the greenfield one, and the brownfield one has come online, but it has to perform optimally. Sorry, I didn't catch this comment right. Yeah, uh, The pharma and the specialty, these were INR 200 crores each, and pharma is obviously still not optimal, but the specialty piece is also not yet optimal. No, but that we have to still put to use. This specialty. It's part of the CWIP? Mm-hmm. Understood. Understood. Okay, fair point. And, you know, this revised guidance of 3,500-4,000 odd crores, this is by when? It's by 2027, mostly. FY 2027. Understood. Understood. And, you know, just conceptually, we've been in this, you know, INR 65-INR 70 crores kind of EBITDA run rate for almost, you know, 9-10 quarters now. When do we move out of this range? I understand the long-term guidance, but- Mm-hmm. when you think of the near-term business Yeah, yeah. How should we think about the near term, next two, three quarters, kind of a thing? I know it's a tough question to answer. Yeah, yeah. Yeah, yeah. So this quarter will tell a lot of story. Probably may not, I would say, probably may not, look very good. I'm not saying that, but it will, it has been bringing lot of clarity to the table that how, things will shape up in future. We, I'm talking about this current December quarter. Because a lot of things are happening. In Salicylate is almost like, we are hoping now that, November should be very good for Salicylate. In fact, October itself, we have recovered little by doing few things. Now, November hopefully will be doing, one step better. And then Saykha one also starts in November, so then we will get a lot of clarity. Plus, another positive aspect on the existing business is that at least the export markets have started showing some demand uptake. Understood. Understood. So, so this, so, so from the fourth quarter onwards, we probably move out of this zone, is how you're thinking? Probably, yes. Yes. Understood. Understood. Understood. Just the last question on the USFDA status, if you can just update what is happening on? Yes. So we had a audit expected in the month of September. In fact, we were expecting that, you know, the financial year for USFDA, from 1st October to 2nd September. So we had been telling, we were expecting an audit before then, and it happened just like that, means in the last month. In fact, they came very late for us. They came in September. It was in September. So it's quite long, that way, seven, eight days. We got seven observations, but we feel we are quite confident about the observation. In fact, in the closing meeting, they asked me that we see the how, what they feel about the API facility. So he was saying that it is like any other API facility. Mm. Like, any other usual API facility. So that way, he was not negative about it. So, but nevertheless, they did tell us that, "You give a very strong CAPA for this within 15 days, and it might be true." That is what they said. Now, we have already submitted the response, within taking what we changed. That response has gone in the last week or so. Two weeks back, we have sent that response. So now we are waiting, which they will come back to us, after that response. And we have taken the help of USFDA consultants as well, for making the response. So we hope that the response is quite realistic, and it will give positive results. Understood. And this, were there any repeat observations? Repeat observations, so not that. They say that we have to improve the documentation part of the investigation. So that was there. And I think that it will be there on the USFDA site that. Correct. Correct. But none of the observations were what they already called for at the time of the import? No, no, no. In fact, in fact, the way the audit started was first facility round. They check all the scrap and everything, which is there. And just a day before the audit, they said that: "Okay, the audit is done." And then suddenly, last day, in the morning, you know, maybe in the morning, they again say: "Okay, we again want to see that E-twenty one facility and building." And they went there, there also, and they checked that unit also. Again, the adjoining unit. It was like another surprise, but then, there was absolutely no point really there in the forms everything. Understood. So, assuming, you know, this improves for the better, at least, what happens in the first six months as that market opens up for us. How should we think about the financial impact of. Financial impact for the first six months might be little difficult. However, it will help us at the company level as well to improve our image in the export market, especially in the European market. Because of the USFDA problem, even though we have medical approval for that particular plant, we were not able to sell certain products in the Europe market because of this USFDA hurdle, so before even the U.S. business kicks in, our European business also will show some signs of improvement from that particular plant, so first three months, I don't expect anything drastically speaking. Next three months, that is from four to six months, probably some you know approvals, more approvals will be on the way. Because in regulatory market, to get approval and start supplying at commercial level, it does take around five to six months, frankly speaking. Once the project is initiated by the quality people of the customer for getting the vendor approved, it takes time. But at least the old projects which we have should, you know, can be starting six months time. But it, but for six months, very unlikely to show any significant impact on financial. Understood. Understood. And, conceptually, like you've said in the past, U.S., Europe are higher realization, markets. Much higher, much higher, yes. Yes. So the lowest hanging fruit is essentially to, you know, divert some of your current volume from the less realization markets to more. Absolutely. We can't... That way also is underutilized, so the utilization will also be higher. Understood. Okay, sir. Thank you so much. Thank you. Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Ravi Shah from Opal Securities. Please go ahead. Hello, am I audible? Yes. Yeah. Hi, sir. So actually just two questions. The first, the first one is, can you provide some insights on the current state of the entire API industry in India as of now? That's number one. Okay. Okay. Harit Shah? Harit Shah, are you there on the line? Yeah. Yeah. So can you just explain the current demand scenario of API industry in India? Yeah. India market looks very stable. There are a lot of new producers in Gujarat and Hyderabad that came in recent last two years. But overall demand looks okay. There is good demand. Yeah. Okay. Understandable, sir. So my understanding is, why are you seeing a revenue growth, even though demand is stable, prices are stable, revenue growth coming? So my understanding here. Revenue decline is coming because of the lower realization per unit, means the lower selling prices as compared to last year. Okay. So sir, basically, this pricing, when you expect it to stabilize? Any idea on that? Yeah. So what happened was, the prices have been falling every quarter since last twelve, fifteen months. So if we compare Sep, this current September quarter versus June, previous June quarter, the prices are almost stable. Means hardly around 0.5% of price decline is there on an average level. So prices look stable, but however, if we look at October month's data, we can see that certain antibiotic products and one of the antifungal product price has still further gone down, but then the raw material pricing of the product has also gone down. So little bit here and there will be there, but more or less, it seems that prices are have stabilized at a composite level, on an average level. Understood, sir. Thank you, sir, and all the best. Thank you. Thank you. A reminder to all the participants, you may press star and one to ask a question. The next question is from the line of Raj Malhotra from JL Financial Advisory. Please go ahead. Hello, am I audible? Yes. Yeah, thank you for giving me the opportunity, sir. So sir, I have only two questions. So, for the first, is for the project of specialty chemicals, when is that, when are we planning to actually start that? And what kind of benefits are we expecting from the plant in the coming, like, say, two years? So, the specialty chemical plant at Saykha is coming. We have already started trial in one of the derivative plant. The main plant will be starting trials in the month of November, after Diwali, by the mid or end of November, mostly. So once that trial is successful and it comes with production, most of the production will go for captive consumption. Some of it will go for external sales as well. Nevertheless, roughly, you know, if you talk about potential, around, it is, it might have a potential of adding around INR 40 crores to EBITDA. Okay. In the long term, in the long term, maybe. Long term, I talk about long term. Yeah, yeah. Yes, I got that, yeah. So that is one. And, nevertheless, now that you asked about specialty, I mean. I forgot to mention one point, that, in this particular quarter, our specialty segment did not do that well, because of, some late order products from a few of the MNCs, because they, their demand was little low. So, because of that also, we feel that we have lost around 0.25%-0.3% in the gross margin at the company level for this current September quarter. Got it, sir. Got it, sir. Sir, one more question: Like, how do we see the formulation business or growth in the, like, coming few years? Like, you can elaborate a little on that? Yes. So at formulations, we are doing a very good job in terms of registering more and more products across different geographies. Okay. Even our Chilean subsidiary is doing quite good. So, for the first half of this financial year, there were two major audits at our formulation plant in Mumbai. One, first one was the USFDA audit for the new oncology block, which we have put in. So, that audit is through and we got USFDA approval for that oncology block. That was in first, towards the end of first quarter. And then we had, in the beginning of the second quarter, we had another U.K. MHRA audit for the ASD facility. The ASD is the first facility which we had for formulations. So that also got approved. And because of that, those two big regulatory audits in Q3 done, and we had lesser output, production from the plants. Also, from demand perspective also, it, it was slight impact was there, but mainly because of these two audits. Those being though, we made, you know, very nominal sale of around $2 million-$2.5 million in the quarter of September, but we have a very strong order book of around more than $10 million for the formulation business. So the export potential is very much there. We have lot of orders in hand, so it will, it will pick up the formulation business in coming quarters, in coming two, three quarters. Okay, got it, sir. Got it, sir. Thank you so much. That's it from my side, and all the best, sir. Thank you. Thank you. Ladies and gentlemen, we'll take this as the last question. I now hand the conference over to the management for closing comments. Thank you everyone for joining us today on this earnings call. We appreciate for your interest in Aarti Drugs Limited. If you have any further queries, please contact SGA, our investor relations advisor. In advance, we would like to wish you all a very happy Diwali and a prosperous new year ahead. Thank you. Bye. Thank you. On behalf of Aarti Drugs Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.