Ladies and gentlemen, good day and welcome to Aarti Drugs Limited Q4 FY 2026 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 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. Adhish Patil, COO and CFO from Aarti Drugs Limited. Thank you, and over to you, Mr. Patil. Thank you. Very good morning, and welcome to the Q4 and FY 2026 earnings conference call of Aarti Drugs Limited. Joining me today are Mr. Harshit Savla, Joint Managing Director. Mr. Harit Shah, Whole-time Director. Mr. Vishwa Savla, Managing Director of Pinnacle Life Science Private Limited, along with our investor relations advisors, SGA. We trust that you have had the opportunity to review our financial results and investor presentation for the quarter and full year ending 31st March 2026, which have been uploaded with the stock exchanges and are also available on our website. Let me start by outlining the key business and financial highlights for the period. FY 2026 was an important execution year for Aarti Drugs as we moved from the investment phase into the operational scale-up phase. From a broad, broader industry perspective, FY 2026 remained challenging due to multiple macroeconomic and geopolitical uncertainties, including global trade disruptions, trade tariffs and GST changes, and pricing volatility. Towards the end of the FY 2026, by elevated input cost, crude and gas-based raw material supply chain constraints due to the West Asia War. During the quarter, freight, packaging, utility, and energy-related costs also remained elevated. While availability of certain key raw materials remained inconsistent at various points. Despite a challenging operating environment for the industry, the business exited the year on a much stronger footing with a sharp sequential recovery in Q4 FY 2026. Operational initiatives such as process optimization, alternate sourcing strategies, energy efficiency measure, and tighter planning helped us mitigate part of these pressures and ensure continuity of operations. Now we'll talk about consolidated financial highlights. Q4 FY 2026 revenue stood at INR 721.1 crores as compared to INR 678.6 crores in Q4 FY 2025 and INR 602.9 crores in Q3 FY 2026, reflecting a growth of 6% year-on-year and 20% quarter-on-quarter respectively. EBITDA stood at INR 96.6 crores versus INR 95.2 crores in Q4 FY 2025 and INR 56.3 crores in Q3 FY 2025, indicating flattish year-on-year growth and a growth of around 72% on quarter-on-quarter basis. EBITDA margin stood at 13.4%. Tax stood at INR 55.3 crores as compared to INR 62.8 crores in Q4 FY 2025 and INR 40.5 crores in Q3 FY 2026, a de-growth of 12% year-on-year and up to 36% Q on Q increase. Tax margin translated to 7.7% for Q4 FY 2026. With respect to the standalone business highlights for Q4 FY 2026, revenue stood at INR 631.7 crores versus INR 623 crores in Q4 FY 2025. Standalone business contributed around 88% to the consolidated revenue. 63% of the standalone revenue came from the domestic market and 37% from the export market. Domestic revenue grew by 7% year-on-year, whereas export revenue declined by 7% year-on-year. Within the API business, the antibiotic therapeutic category contributed around 37.8%, anti-protozoal around 19.6%, anti-inflammatory around 11.9%, anti-diabetic 15%, antifungal around 10%, and the rest contributed around 5.7% to the total API sales. Let's talk about formulation segment highlight. Revenue from formulation stood at INR 91.3 crores compared to INR 64.8 crores in Q4 FY 2025, up by 41% year-on-year basis. Exports contributed 69% to this revenue. For FY 2026, formulation revenue was INR 330.5 crores compared to INR 284.9 crores in FY 2025, up by 16%, with exports accounting for 65% of total formulation sales. Volume growth in the domestic market remained healthy, and we witnessed momentum in select non-antibiotic and export-led products. Export markets, especially formulations, emerged as a key growth driver supporting overall business stability. As highlighted in slide 10 of our investor presentation, Aarti Drugs has consistently delivered positive volume growth over the last five years despite sharp pricing corrections across the industry. While this pricing pressure impacted realizations and top line growth across the sector, our ability to sustain volumes and maintain customer relationships reflects our trust with the clients. Encouragingly, pricing trends started stabilizing from September 2025 onwards, and this recovery strengthened further during Q4 FY 2026, supported by increasing crude prices and is expected to improve realizations in the short run. A key pillar of our performance during the quarter was the continued ramp-up of our new manufacturing facility, most notably our backward integration plant for methylamines at Saykha. The facility ramped up meaningfully and was tested at higher utilization levels where operational performance remained encouraging. While the initial ramp-up phase witnessed temporary headwinds, the facility achieved a production rate of nearly 1,000 tons per month during the month of March 2026. We expect to make further progress on utilization ramp-up during FY 2027. Over time, the project is expected to significantly reduce dependence on externally sourced inputs and improve self-sufficiency for the metformin portfolio, thereby supporting margin improvement and operating leverage. Another important structural improvement during FY 2026 was the increasing contribution from regulatory and export-oriented markets. Exports contribution increased from 35% in FY 2025 to 38% in FY 2026, from which regulated market contribution also grew to 73% compared to 66%. This gradual shift towards regulated markets and higher value products indicate the company's ability to meet stringent regulatory norms and adhere to international quality standards. Overall, while FY 2026 remained a transition year operationally, the business ended the year with significantly improved momentum supported by stabilizing pricing trends, stronger exports, improving product mix, and a gradual ramp-up across newly commissioned facilities. With that, I would like to now open the floor for questions. Thank you. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star 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. The first question comes from the line of Nilesh Ghuge with HDFC Securities. Please go ahead. Mr. Ghuge, please go ahead with the question. Mr. Ghuge, please unmute yourself and go ahead with the question. Since there is no reply from the line of Mr. Ghuge, we will move to the next participant. That is Mr. Shashank Koil from Pyumara Capital. Please go ahead. Hello. Yes, thank you so much for the for leading and for the very good numbers. My question is, the first question is, how is the methylamines plant ramping up and what sort of realization has it reached? Mr. Koil, sorry for interrupting. Mr. Koil, your voice is not clear. Can you just come in the range and talk? Yeah. Hello. Can you hear me? Yes, go ahead. Yeah. my question is, How is the plant ramping up? What sort of integration has it reached, and what do you expect over the next two years? Aarti's plant. Are you talking about methylamine plants in Saykha? Yeah, yeah. Okay. Yeah. We just started that plant in the month of September. December quarter was the first quarter where we showed a utilization of around 29%, roughly. In the March quarter, we were able to achieve 40% upward, little upwards of 40%. We fell slight short of our target of 45-50%, mainly because of ammonia-based raw materials in that plant because of the West Asia war. Going forward, we are expecting that in June quarter, we should easily cross around 55-60% of utilization for that plant. Within a year's time, we believe that we should be operating upwards of 70% utilization of the methylamine plants. Okay. Okay. My next question is on the salicylic acid. Like, what was your profitability at a capital level last quarter, and what sort of margin and revenue profile can it reach over the next few quarters, assuming there is no change in the duty structure? Yeah. The salicylic acid still remains a laggard. As we were talking, in last quarter that we were expecting one equipment in the delivery was expected in late April. We took a call because we were making variable losses in salicylic acid because we were not able to recover and reduce the raw material cost because of lack of that equipment. We took a call to shut net production, and once the all the equipments are operational, once we test it, once the variable costs are in check, and then we will restart the production of salicylic acid. That is the latest update of salicylic acid. We do expect and hope that we will improve and very quickly, we should start with forward integration of salicylic acid as well, because that plant is already commissioned. Now we will need to do piloting and scale up of the derivatives plant. Okay. Thank you so much. That's all from my end. Thank you. Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Dhwanil Desai with Turtle Capital. Please go ahead. Hi. Good morning, Adhish. My first question is, you know, your in comment mentioned that Q4 you ended on a strong note and the realizations were also kind of stabilizing, you know, because of this, you know, this Russia conflict that is, you know, there is some improvement. Given that, you know, we have large capacity which is already in place, and the negative rate variance is behind us, should we expect, you know, 10%, 12% volume growth and maybe some 4%, 5% positive rate variance because of the regulated market contribution going up and overall, yeah, incremental pricing that we are getting because of the hand? Yeah. The current situation is such that the API prices remain elevated because of West Asia war. If this persists for longer, definitely there will be a lot more positive rate variances. Nevertheless, we will always strive for achieving a volume growth of, you know, 8% to 10%. As you said, we also have, you know, already built up capacities from two greenfield expansion. Achieving those kind of volume, that kind of volume growth would be fairly easy. Realizations, it will definitely be positive. The longer the war stretches, the positive variance would be more. Got it. One follow-up on this, Adhish. You know, we're talking about 8%-10% volume growth. If you look at the last two, years, we have put up so much of CapEx and the new capacity is coming on stream. With that, if we are talking about 8%-10% volume growth, does it mean the existing base business, you know, there we are not expecting much of a volume growth because that sounds slightly on the lower end that with the new capacity on so many new products, salicylic acid, methylamine, Specialty Chemicals. With all that, why at a company level we will only, you know, grow at 8%-10% volume growth? Yeah. The internal target will always be in the range of 10%-15% growth. Right now what is happening that we, with a very high pricing in the antibiotic segment, last time what we observed was the domestic demand had gone down. That is what we fear. If the crude prices remain elevated very high, the older generation molecules, which are already, you know, are being sold at a very cheaper rate in the market, in the Indian market, and there is some kind of price regulation for the formulation players. When the API become very expensive, typically the demand of those products goes down. That is what we have observed during Russia-Ukraine war as well in 2023. That is the only challenge what we think, we can face for antibiotic category in the domestic market if the prices are too high. If the prices are moderate, then it won't affect the demand. If they're too high, the crude remains too high, then probably that might be the reason. Okay. Got it. The second question on the gross margin side of it, I think there is some improvement standalone basis, you know, on the gross margin. How should we look at gross margin given that realizations are up but input cost also is up? At the same time regulated thing is kind of scaling up. You know, rupee has depreciated, import, export. Multiple factors are kind of playing into this. Are we expecting any delta in gross margin for the coming year, you know, given all this? The thing is, we don't expect much movement in gross margins as such. Anyways, in Q4 we did, fairly good in terms of gross margins. What we would like is we would like to maintain this kind of gross margins. In Q4 what happened, our manufacturing costs were little higher, but they can be reduced by a percent or so, which can lead to improvement in EBITDA margin. However, there are two factors, like the more regulated sales, what we are targeting, that will help in increasing the gross margin. On the flip side, if the prices of the APIs goes too high because of the raw material prices, typically what happens is that, to maintain certain level of ops, absolute gross profit per kg of a product, the margin tends to lower in terms of gross margin. You got my point? Right If we are making- Right -yeah, 36%. You're saying absolute, I got your point, that the absolute number can go up, but percentage it will look on the lower side because we are, you know If the price is going up. -denominated. Right, right. Got it. So my point is that, okay, so in percentage terms, it may not go up much, maybe stabilize or slightly lower, but in absolute terms, if the delta is higher, does it mean that the flow-through to the EBITDA will be significantly better and hence EBITDA margin? It can. There is a possibility. Okay. Got it. Got it. Third thing, last question, is on the formulation side. We did very well on the formulation side. You know, what are the contributing factors? I think our oncology thing is still, you know, the dossiers are still in the approval stage, so it will take some time. What is driving this growth? You know, going forward, this kind of a run rate is, you know, possible to maintain. How should we look at it? Yeah. Vishwa, would you like to answer this question? Yes. Yeah, sure. As you rightly said, our oncology plant is still pre-revenue, the current growth is coming from our direct exports in the non-oncology portfolio. Since we have a growing list of products that we are getting approvals across regulated markets, that is the business that is growing quickly and that is why our export business is also increasing, which is leading to better margins as well. Going ahead, too, we are expecting a good number of approvals and market extensions, which will help us keep increasing the export business at a similar pace. This 90 crores run rate that we got, I think, that number is something which is possible to maintain in FY 2027. Is that sort of a fair way to look at it? Yeah. Yeah, yeah, that's a fair assumption. Yeah. Got it. Thank you. That's it. All the best. Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes on the line of Jai Jain with [inaudible]. Please go ahead. Hi, sir. Sir, I have a couple of questions. Firstly, sir, regulated market contribution increased materially in FY 2026 as you have highlighted. What are the key geographies leading to this improvement and which products? Yeah. I would like to highlight that this would be mainly Latin American markets. Still, this European market and U.S. market would be our target market for means for more and more regulated sales going forward. This hasn't seen a uptick yet, but it looks very promising because we are seeing lot of business development means lot of business development activities are going on with these clients. Lot of approvals are coming in for the facility as well as for the product. Means within a year's time, at least by towards the end of the year, we should start seeing some kind of flow in the regulated markets from our recently reapproved U.S. FDA plant as well as other products. In fact, in lot of our other dedicated plants as well, we have taken CEPs, which are the European approvals for antifungal products. We have got, for anti-inflammatory as well. Yeah. Are you asking anything else? Yeah. sir, secondly, what is the status update on timeline for key U.S. FDA approvals and DMF filing across APIs and formulations? For APIs? Yeah. For API, we got the approval for U.S. FDA already last year, the plant approval. There are few antibiotic, anti-inflammatory and few other therapies where we are actively marketing those products in the U.S. market and the flows will start within 12 to 18 months is what we expect. We have oncology as well for the U.S. markets, where we are filing dossiers in formulation business. Yeah. Lastly, also can you please highlight the status of anti-dumping duty for the acyclovir products? Can you repeat the question? I was not able to hear. Can you please highlight the status of anti-dumping duty for the acolyte products? Sorry. Okay. If you, means what I could make of your question was, you are asking about anti-dumping. Regarding the anti-dumping duty, yes. Yeah, yeah. For the acolyte products. Yeah. means, we are in the process of application for our Salicylic acid. -salicylic acid. That is ongoing. As we speak now, the application is done and we are going ahead with the various stages of that anti-dumping duty application. Okay. Okay. Thanks for that. Thank you. Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes on the line of Sajal Kapoor with Antifragile Thinking. Please go ahead. Yes, thank you for the opportunity. Adhish, I joined the call a little late, so I missed your opening remarks. Sorry about that. Maybe my questions are a little different. Firstly, I mean, what challenges in the methylamines ramp up were kind of external and outside the management control, such as ammonia shortage and raw material volatility. Sorry to interrupt you. There's a disturbance in the line. Sorry. There is some disturbance, from some of the one of the lines. Just checking. Please give me a moment. Speaker, the disturbance is coming from the line of Mr. Harshit Savla. Please go ahead. Okay. Okay. Thank you. Hi, Adhish. What challenges in the Saykha ramp up were kind of, you know, outside your control or were external? I mean, it could be ammonia shortage or raw material volatility or some other factors. Which challenges were kind of internal execution issues where, you know, we or the company underestimated timelines, utilization curves or operational complexity. Because greenfield plants are always challenging in terms of scaling up, right? What often works is on the design doesn't actually show up in the- Right I mean, if you can split your response in, you know, something which was internal and could have been better managed and the factors that were outside your controls and, how we should look at in, this particular amines, Greenfield, going, forward FY 2027, this fiscal. Thank you. We spoke about the Saykha plant little earlier. We said that we started this plant, the first quarter was December quarter, where the plant was operational at a full scale. Just give me a minute. Earlier we were just able to hit the run rate of around a little less than 30% utilization in the month of in the quarter of December. In the quarter of March, in spite of the fact that there were slight raw material shortages, we were able to achieve utilization upwards of 40%, slightly above 40%. What we are seeing as far as first half of Q1 is concerned, we have already utilized the plant around 60%, the Saykha plant. The methylamines scale up is going pretty well. We did not face much issues in this plant like the Tarapur facility of salicylic acid. Whereas the better utilization of this plant will go slightly depends on our expansion plans of metformin itself, which are also on its way as we speak right now. We are expanding metformin production as well. More the metformin production, more will be the utilization of the Saykha plant. As far as internal problems are concerned, there are very minor issues at the drying of one of the derivatives of methylamines. We are not worried about that as of now because still we are able to increase our utilization and probably within, you know, three, four months the real profitability of Saykha plant will start showing, you know, results. Sure. No, that's helpful. Adhish Patil, in terms of the metformin, I mean, how much of the value chain do we now control? See, the state of India as a whole in metformin especially was the fact that no one, absolutely no one was backward integrated, right? Right. Everyone was dependent on China. How- Exactly How is the situation on the ground today as far as Aarti Drugs are concerned for metformin? Metformin there are two main intermediates. One is sourced from China and Europe, and the other one is indigenous, means procure domestically. The DCDA which is imported, there are a lot of players in that, not much margins to be made in that product as of now. Plus it has an exclusive chemistry, hazardous chemistry as well in terms of manufacturing. Whereas the indigenous intermediate was concerned for metformin, there I believe now we are the only ones as of today with the backward integration facility. That puts us in a very good position, you know. We were already very cost competitive in metformin because we were clearly a leader means with handsome majority when it comes to selling metformin in semi-regulated or I won't call unregulated because none of the API markets are unregulated as of now. I would say, other than the highly regulated markets, the ROW market we were absolute leaders in metformin where cost of production is very important. With the advent of this backward integration our cost will further go down. Another important update on metformin is that we have already filed a DMF with U.S. for metformin. Now slowly once we ramp up the capacity we would like to invite FDA to inspect our dedicated metformin facility. That would be the next stage for metformin. We already have the European approval, but what we feel is that U.S. approval is the key even for selling the metformin to European markets. Okay. Right. That's helpful. Given our backward integration projects are now ramping up, is it fair to expect that every year should show YoY, if not quarter-over-quarter improvement in terms of the margins? The economics of the business are simple. The fixed costs are fixed, right? As the utilization improves, and as long as the realizations are not suffering big time, right? There is also anti-dumping talk happening, coming from China. Putting all that into perspective, is it fair to expect at least 100-200 basis points margin, EBITDA improvement in FY 2027? Yes, that should, we can expect that in terms of cost contribution. At least 100 basis points we can definitely target. Where do we see going or when do we see us going back to the sunny days scenario? We, in 2015, 2016, 2017 era, we were having 16% operating margins pretty consistently. Right. We are way off that number. I know 2021, the COVID year was an exception where we hit 20%, which was never sustainable. Right. For our kind of a business with backward integration and now this formulation also ramping up. You know, at some point in time, the onco facility will also come into play. I mean, do you really think that 16% margin at an EBITDA level is a challenge even now? With all this, with more regulated sales from our USFDA plant, with metformin getting USFDA approval, hoping that. With the advent of formulation, the exports of formulation has already increased, and the EBITDA margins in the formulation business is now upwards of 16%-17%, which is very good for us and it was consistent for the last two quarters. With the incoming oncology business, definitely as the utilization goes up, we will start adding margins at the EBITDA level. Because as of now also we are expensing some part of oncology cost, developmental cost in some part in the P&L. As the oncology sales improve, definitely the EBITDA margins should improve. Just remind me again on the CapEx plan for this fiscal and the next fiscal, because I might have missed that? Yeah. As of now, means Greenfield project, we are not doing, but you can call it a quasi Greenfield, not means a mix between a Brownfield and a Greenfield. Because the expansion, the new product, production lines, new production plants which are putting up are coming up mainly in the adjoining blocks of the existing facilities. Overall, the requirement of capital would be slightly low as compared to the Greenfield projects, because in Greenfield projects, plot development, the, your compound wall, your utility setups, your other admin setup, QC block setup, those take up lot of funds. Whereas in this kind of expansion, what we are doing, planning right now and overall plans are there in like three to four places. Will require little lesser CapEx, but the asset turn of that CapEx shall be slightly higher because it is a quasi Greenfield or Brownfield you can say. Overall project, what this is, this I was talking about the standalone. Plus, in formulations also we are coming up with additional block because we already got a EDQM block in formulation for OSD. I'm talking other than non-onco. We want to double that capacity, and we want to make that block as EDQM as well. All put together, we feel that, you know, in next two to three years, at least two to three years, definitely around INR 300-400 crores of CapEx might go in. Again, that will be a safe CapEx, more of increasing the existing capability rather than entering into altogether new products. Whereas in formulation, the part of this CapEx will also go in formulation for developing our basket of oncology products, because that requires heavy CapEx. Part of the CapEx will flow into the formulation business. We are expecting to grow our formulation business, you know, at least till INR 1,000 in next three to five years. Right. How much of this expansion is backed by customer discussions and demand or order visibility versus, you know, we want to be ready with the capacity hoping that the demand will come- Under- -in CapEx? Understood. Understood. As far as the standalone business is concerned, because it is a Brownfield or quasi Greenfield kind of projects, all these products are the products which we are already working in. We have pretty good visibility of the demand of that product. It is backed up by customer talks and discussion. As far as formulation is concerned, I would, Vishwa, can you just explain how we are taking going forward for formulation demand? Hello? Vishwa, are you on the line? Mr. Savla, please go ahead. Sorry, the voice is breaking for me a bit. Could you just repeat the last part? I could not hear that very clearly. Yeah. I will explain. Vishwa - Yeah. The question is that, uh- Yeah -whatever CapEx we are doing in next two years- Right -or three years Right, right As far as the formulation CapEx is concerned, how much of that CapEx is backed by the visibility of demand or customer discussions and how much is, like, more wishful, like, you know, we will be ready with this and then probably the demand will come? That is the question. Right. Just to break it down, you know, we are, CapEx is in two parts. The capacity enhancement program that we are doing is pretty much based on our forecast for the signed products or where we have clear visibility on once our products are launched, we will need those kind of volumes. It's a brownfield expansion to meet our forecasted growth from existing products as well as new products. As far as our CapEx on R&D development goes, those are typically, you know, we look at developing products first and then when the products are at late stage development, either dossiers are ready or near approval, that's when we start to sign contracts. Apart from a few contracts which are signed at a very early stage, most of them are signed once products are almost ready to be marketed. Okay. Okay. No, that's helpful. Thank you. Thank you for answering all my questions, team, and all the very best. Thank you. Thank you. Okay. Thanks. Thank you. Next question comes from the line of Meghna Agarwal with Mount Intra. Please go ahead. Hello. Thank you for the opportunity. Am I audible? Ms. Agarwal, can you just speak a little more louder? Yeah. Yeah. Hello. Hi, am I audible? Yes. Please go ahead. Yeah. Thank you for the opportunity. Actually, can you just help me with, you know, thing about the salicylic acid? I was not able to catch it properly. Like, we are restarting the production, so what happened actually? Can you please explain me? Yeah. In salicylic acid, lot of improvements are to be made at the process level. One was regarding the phenol recovery, which was going waste on the mother liquor side. We have, means we already did trials few months back. We had ordered the equipment as well. Before that equipment is installed, means it will be installed anytime now. Before that is installed and we operate and check that it is, you know, working properly. Though we have taken the pilot batches, so it ideally it should work properly. Once that is done, only then we feel that, you know, there is a scope for us to come in variable profit for salicylic acid. Unless we install that equipment, there is no point in going ahead with higher production of salicylic acid, because then that will in turn, you know, cause more losses for us. At the same time, in salicylic acid, what we have done, we have already commissioned, means it's almost in the late stage. We are going in for derivatives of salicylic acid. Because the selling prices of derivatives of salicylic acid is much higher, you know, the scope for margin expansion is more if you go, if you sell derivatives directly. Secondly, we are also going in for anti-dumping for salicylic acid. Thirdly, there is one more scope of improvement in salicylic acid, and that is at the part of effluent. In China, what is happening, the effluent stream is just a saline water, high saline water, which they are allowed to drain into the sea because other impurities are not there in that. We are checking the possibility with the government, because if we have to evaporate all that thing, then, you know, that puts us little bit behind when it comes to competing with China. That is that. There are two, three challenges. We are tackling all of them together. One is your liquid-liquid extractor, what I was talking about for improvement in phenol recovery. Second was reducing cost at the effluent side. Third is anti-dumping duty. Fourth is your derivatives plant, which is will come up by the May end or max by mid of June. There is a severe fabrication labor shortage, what we observed in the summer season, partly also because of lack of cooking gas and all. The labor in the area are not there. That is why the plant got little delayed. Anyway, it will be done soon. These are the, you know, multi-pronged approach, what we are following up to improve the salicylic acid, and then we restart the facility. Okay. Also just wanted to know any revenue guidance and EBITDA guidance for FY 2027, like what are we expecting? Yeah, we see already did around more than 13% EBITDA margins. We would definitely see, the war is one big challenge, how it will shape up, how far the crude prices will go up, whether they will stay up that high for a very long period of time, or they will stay around, say let's say 90, 100, which is okay, which is fairly decent. There is slight uncertainty, but, hoping for the best, we would still like to target EBITDA margins anywhere between 13.5%-14% for this FY 2027. Had this war not been there, our earlier targets were definitely 14%-14.5% EBITDA margin for FY 2027. Okay. Also one more last question. I wanted to understand like what is happening in the antibiotic segment. Like are we seeing any recovery or what is the thing going on in the antibiotic segment, please? There was some recovery on a sequential basis, means March versus December quarter. You know, one thing which can hurt this antibiotic demand a bit more is the elevated prices of antibiotics, means the raw materials and all. If the crude remains too high, means like more than $110, $120, then probably, in short run it might affect the domestic demand of antibiotics. That is what we feel. Thank you. Are we seeing any volume growth or price growth in antibiotic sector? How are we seeing for our company? There is price growth right now. If we talk year- on- year, means in FY 2027 we are expecting a very big price growth in antibiotics. Volumes probably can be bit flattish because I'm saying flattish because anyways the volumes of FY 2026 were not that great for antibiotics, so it won't go further down, is what we believe. Okay, perfect. Thank you. Thank you so much, and all the best. Okay, thank you. Thank you. Next question comes from the line of Nilesh Ghuge with HDFC Securities. Please go ahead. Mr. Ghuge, please go ahead with the question. Mr. Ghuge, please unmute yourself and go ahead with the question. Since there's no reply from the line of Mr. Ghuge, we'll move to the next participant, and that is on the line of Rishabh Jain with Modi Capital. Please go ahead. Hello, am I audible? Yes. Thank you for the opportunity. My question is, management indicated selective API price increase during the quarter. Which products have witnessed price hikes, and how sustainable are these increase? Do we expect to see further increases? Harit, would you like to answer this question? No, no. Prices are now stable. We are not expecting any further increase in the price. It depends, this will definitely depend on the raw material and crude oil level prices, basically. All solvents and other chemicals are at peak level now, and we don't expect further going up unless crude goes beyond $140, you know, $130, $140, but. Okay. Since you mentioned crude, are we seeing a crunch in any of the key raw materials right now because of war, and is there any impact of the business? No. Only in March we had some issue, sourcing raw material, mainly ammonia. Otherwise raw material availability is not an issue as of now. Okay, okay. Thank you. That will be all from my side. Thank you. Thank you. Next question comes from the line of Resham Jain with VVD Asset Managers. Please go ahead. Hi. Good morning, sir. I have two, three questions. First one is with respect to the overall CapEx which you mentioned, INR 300 crore-INR 400 crore over the next three, four years. Given that the cash generation is quite healthy and we always maintain some level of debt equity, is there any other CapEx which you're planning beyond this? It will not match the overall cash generation over the next three, four years. If at all we feel something is more lucrative, probably we might end up replacing some of the CapEx. If the current projects, you know, the current two Greenfield projects, the Saykha and the salicylic one, if there is stark improvement in the cash flow from these two projects, then probably we can have a bigger budget as well, because then the cash generation would be a lot higher than what it is today. Based on today's financials, this much is quite easily doable. As of today also, our long, consolidated long-term debt is around INR 328 crores, and short-term would be around INR 248 crores. The debt to equity ratio is also historically lowest as of today in this quarter. Yeah, that's right. That's why I asked. Maybe by the end of the year you may further basically fine-tune the overall CapEx budget. Correct. Correct. That is absolutely correct. Okay. The second question is with respect to CWIP of INR 214 crores, which is currently sitting. That is related to which projects, sir? How much? CWIP, the, what amount you said? INR 214 crore I could see. Yeah, yeah. A part of that was related to the cogen boiler, and some brownfield expansions what we are doing. Also a major part of it is related to the formulation R&D, the dossiers, oncology dossiers what we are developing. You know, that also requires a huge CapEx. As on when we will get the approval, then we will start the amortization of those CapEx. Most of it should be capitalized this year, right? FY 2027, maybe first half. Uh- Except, oncology. Vishwa, can you give us your idea about in oncology, how much we would if the projects will go live this year and next year, I mean, in terms of percentages? Yeah. I think he's asking except oncology. Basically for the formulation part, the project life cycles are quite long, most of the CWIP will start getting amortized over the next 24 months. There might be some portions that will be amortized this year and next year, but the major chunk would be post 24 months. Okay. Understood. Understood. Sir, the last one. This year, all the projects which have started, like, the methylamine and the salicylic acid and all, what is the total EBITDA loss which is there in this year? Because a lot of ramp-up related, cost will be there. Mm-hmm. For the entire year you're asking, for FY 2026? For the entire year, what is the total EBITDA loss because of new projects? A very rough estimate, if you ask me, only the EBITDA loss would be somewhere in the range of INR 18 crore-INR 20 crore for the entire year. Understood. Okay, sir. Thank you. All the best. Thank you. Thank you. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of question and answer session. I now hand the conference over to the management for closing comments. Thank you. Thank you for asking the questions and showing the interest in Aarti Drugs. As utilization improves across our newly commissioned facilities and the benefits of our strategic investment starts reflecting more meaningfully in operations, we expect a gradual improvement in profitability and return ratios for the coming years. We remain committed to disciplined execution, operational excellence and sustainable long-term value creation for all our stakeholders. Thank you once again for your continued support and confidence in Aarti Drugs. For any further questions, please reach out to SGA, our investor relations advisors. Thank you. Have a nice day. Thank you. On behalf of Aarti Drugs Limited, that concludes this conference. Thank you for joining us. You may now disconnect your line.