Ladies and gentlemen, good day. Welcome to Vimta Labs Limited Q2 FY22 earnings conference call hosted by Nirmal Bang Institutional Equities. 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. Vishal Manchanda from Nirmal Bang Institutional Equities. Thank you. Over to you, Mr. Manchanda. I welcome you all to the Q2 FY22 earnings conference call of Vimta Labs Limited. We thank the Vimta Labs management for giving us an opportunity to host the call. Today, we have with us the senior management of Vimta, represented by Ms. Harita Vasireddi, Managing Director, Mr. Satya Sreenivas Neerukonda, Executive Director, Mr. Narahari Naidu, Chief Financial Officer, and Ms. Sujani Vasireddi, Company Secretary. I now hand over the call to the company management for opening comments. Over to you, ma'am. Thank you. Thank you, Vishal. Good evening, everyone. Thank you for joining us today in our Q2 FY22 earnings call. We have yet another good quarter. This financial year started well for us in Q1, with a better performance in Q2. Despite the COVID second wave that we saw in Q1, it has been a good half year, with a robust performance from the company. We expect to maintain or better this performance going forward into the second half. I will share a few key highlights of the quarter, and our CFO, Narahari, will get into a little more detail on the numbers. The performance for the quarter and half year played out in line with our expectations. The second quarter's consolidated revenue from operations grew by 9.6% over the corresponding quarter of last year at INR 650 million. EBITDA for the quarter was up 25.3% at INR 200.7 million compared to corresponding quarter of last year. EPS is good. It stands at 4.3. On the operations side, all our service sectors continue to grow steadily, so we continue to invest in manpower, technology, and keep building new services to strengthen our portfolio to our customers. Some of you may be aware that we have entered into a public-private partnership with FSSAI, Food Safety and Standards Authority of India, to set up and operate the National Food Laboratory at JNPT Navi Mumbai. It's a 25 years contract. The purpose of the laboratory is to test all the food imports into the country through that region. Test for basically the quality and safety of the imported items. We have finished the infrastructure works and have formally inaugurated NFL on 29th September of this year, in the esteemed presence of FSSAI's chairperson and their CEO. The lab will start commercial operations early Q4. After we obtain the NABL accreditation, we are in the process of validating all the test procedures. During Q2, we also inaugurated our diagnostics regional lab in Delhi. Q1, we had inaugurated a regional reference lab in Kolkata. This is the other one in Delhi that we inaugurated this quarter. The regional labs will take about two to three quarters to get significant customer traction in those regions. Coming to electronics and electrical product testing division. We have finally received all the equipment and essential accessories. We are performing trial testing and also preparing for NABL accreditation, which we expect to receive in Q4. ESOPs have been implemented for our staff, and I'm very confident that the scheme will add great value to not only the employees, but also a lot to the organization. With these few comments and updates, I will now hand over to our CFO. Narahari, please take over. Thank you. Good afternoon, and welcome everyone to Vimta's conference discussing our earnings results for the second quarter FY 2022, which ended September 30, 2021. I'm happy to take you through the financial performance of the company for second quarter, followed by the half year ended September 2021. During this call, we may be making certain forward-looking statements, which are predictions or statements about future events. Anything said on this call which reflects our outlook for future or which could be construed as a forward-looking statement must be reviewed in conjunction with the risks that the company faces. We will proceed discussing Q2 of FY 2022 performance. Revenue from operations is driven by continued business performance. The company delivered a robust result for the quarter ended September 2021. Before I get into earnings detail, I would like to brief on certain one-off items during the quarter and half year ended September 2021. During the half year ended September 2021, the company entered into a 25-year PPP agreement with Food Safety and Standards Authority of India to set up, operate, and transfer a national food lab. As a result, the company has received a right to charge the customer for the services to be rendered during the contractual period of 25 years on commencement of operations at NFL. Accordingly, an amount of INR 104 million has been recognized as revenue from operations relating to lab setup services, and a corresponding cost of INR 104 million incurred to set up the lab has been recognized as cost of lab setup for the quarter and half year ended September 2021. The aforesaid treatment is very much in line with Indian accounting standards. Secondly, there was another one-off item. There was a notification by the government reducing the eligible rate of export incentive by 2%. We have been accruing export incentive, which is service export incentive scheme, for each and every quarter as and when they accrue. The company had accrued export incentive on its net foreign earnings for the previous financial years, and therefore, there was a need for us to reverse the revenue of INR 12.2 million for the quarter ended September 2021. To the extent, we accrued at higher rate than the current notification, which was belonging to previous financial years. Moving on to the financial performance during the quarter. For financial performance discussion, I'll be excluding revenue and cost of INR 104 million recognized on lab setup. Excluding that, the company delivered its highest-ever quarterly consolidated total income of INR 651 million. Our consolidated revenue from operations stands at INR 651 million, which grew by 6.1% on a sequential basis and 9.6% compared to corresponding quarter. Our consolidated EBITDA of INR 200.7 million grew by about 19% compared to previous quarter of around INR 168.7 million and grew by about 25.2% compared to corresponding quarter, which was about INR 160 million. Driven by strong underlying performance across almost all the business verticals of the company. Profit before tax stands at INR 143 million, which grew by 31.21%. This is before exceptional item of SEIS income. Compared to previous quarter level of INR 109 million. The growth stands at 44.5% on a comparative corresponding quarter basis. This was owing to very careful cost management. Moving on to half year performance, our consolidated revenue from operations increased during the half year by 37% to INR 1,264 million. Our consolidated EBITDA for the half year reported a significant growth of 86% at INR 369 million compared to previous half year. Profit before tax for the half year stands at INR 239.8 million, which is a growth of 3.2x compared to previous half year, which was about INR 75 million. With this brief summary, I will hand it over back to the operator and would be happy to take any questions. Thank you very much. We will now begin the question and answer session. Anyone wishes to ask a question, you may press star and one on your 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. Participants, you may press star and one to ask a question. The first question is from the line of Milan Shah from URMIL Research Consultancy. Please go ahead. Hello. Go ahead, sir. You're audible. Okay. Hello. Milan Shah, your voice is breaking. May I request you to come in a better reception area? Hello. Now it is audible? That's slightly better. Okay. I want to understand the expenses for set up lab, which is INR 10.4 crore in this quarter. It is going to be next quarter, or we are going to set up other lab in other ports? It is any future possibility? We have spent about close to INR 10 crores in the setup of this lab. What we have done is to speed up the project We have internally mobilized some excess capacities that we had at all our different locations. Actually, asset cost, if you put in new stuff, would have gone up to maybe INR 20 crores. Because this was an internal mobilization, the investment stands at INR 10 crores. We don't intend to, at the moment, start any other port laboratories. Okay. Any other ports also have this kind of laboratory, madam? There are four NFLs actually in the country. The one in Delhi is also in a PPP model that FSSAI has entered into with another private partner. The Kolkata lab NFL, they are managing on their own. There is another one which is in the Chennai port area, which again, they have another private partner. Okay. What is the probability of revenue after fourth quarter when we are going to start commercialize from this lab setup? We expect a very strong addition to the top line and bottom line. We actually don't give out numbers, but as such, the committee is yet to sit down and fix the prices. In the port, especially food imports, this tends to be a seasonal business. Quarter-on-quarter, there could be fluctuations in the number of samples that we get for testing. As we test the samples, maybe go through a few quarters, we will understand more. Okay. My second question is it a case any this kind of laboratory is available on airport, madam? We can see the future maybe. I'm not sure that any of the airports have attached laboratories. Okay. Thank you, madam. Very good performance for this quarter, and hope for better in next quarter. Thank you, sir. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Surabhi Saraogi from SMIFS Capital Private Limited. Please go ahead. Hello. Am I audible? Yes, ma'am. Okay. Sir, my first question is, can you give some update on your electronics business? As I was already mentioning in my opening comments. The E&E project is actually close to completion, at least the project stage. We finally received all the equipment parts and accessories. We are doing some trial testing now. Simultaneously, we are also preparing for the establishment of quality management system and its accreditation by NABL. We expect accreditation to happen in Q4, and from there on, we'll be able to accept customer samples. Okay. Ma'am, can you give some color on the future outlook and your major future plans? We have multiple business verticals. We are into food testing. We are into pharmaceutical testing, right from preclinical research to clinical research. We support analytical testing services for small molecules and large molecules. We are into biopharmaceutical analytical services as well. Now we are on the verge of starting electrical and electronic product testing. We do environmental impact assessments. We do clinical diagnostics. For us, the future outlook is very bright. All the four, five, six sectors that I named are the high potential sectors. We expect good growth in all our divisions. Okay, ma'am. That's all from my side. Thank you. Welcome. Thank you. The next question is from the line of Behzad Deboo from Nirmal Bang. Please go ahead. Yeah, could you share some color on what drove the strong growth of 25% on a quarter-on-quarter basis for Vimta? Sorry, could you repeat, please? Could you share some color on what drove the strong growth of 25% on a quarter-on-quarter basis? All the divisions did well because we have started pushing all the vectors for us. Growth came from across all our business units. Okay. When should we expect the food lab set up with the private partnership with FSSAI to start contributing to revenue? Q4. Like I was mentioning, we are in the process of submitting our application to NABL. Once we submit the application, they take a month or so to review it and then come for an audit. The entire process might take two to three months. Okay. Thank you. Welcome. Thank you. The next question is from the line of Neha Mehta from Pragya Equities. Please go ahead. Hello? Hello? Go ahead, ma'am. You're audible. Yeah. My question is in connection or continuation with the previous participant. I just wanted a sense on which would be the fastest growing business segment for the next three to five years. Until now, I believe pharma was dominating. Which segment will do well in the future? That's a very nice question. For us, yes, pharma has been growing very well, very strongly year on year. Food and diagnostics, both these services also, we expect to grow quite rapidly. Electronics and electrical testing products division, it's going to be a maiden year this year. We hope things will be good, but we'll have to travel and see how that goes for us. Okay. This last con call, and even in the updates, you mentioned that we've expanded our diagnostics business. Just wanted to understand that the growth is coming from COVID cases only, or there is any non-COVID factor also that is playing? In Q2, there is no COVID cases impact. The numbers are really low across the country, there is no impact of COVID in Q2. Positive impact. Going ahead, where do you see the growth coming from? It'll happen across food, it'll happen across pharma. It will also happen from diagnostics. We have also expanded our environmental division. We have two satellite operations set up in Kolkata and also Noida. Environment will also grow for us. Oh, okay. Our CapEx plans for all these things for the next three to five years? We plan CapEx on an annual basis. This year we have spent about INR 12 crores, and we might spend an equal amount in the second half. Can we assume a similar run rate in the future? We want to maintain it, yes. Okay. That's it from my side. I'll join back in the queue. Thank you. The next question is from the line of Charulata from Dalal & Broacha Stock Broking. Please go ahead. Yeah, hello. Congrats for the good set of numbers. I wanted to know if you could give a breakup of the different divisions, revenue contribution from different divisions, and also if you could throw some light on the growth in EBITDA. We don't bifurcate our revenues like that. For us, it all falls under the testing and research services, so we won't be able to share any bifurcation as such. Okay. What has given the growth in EBITDA? Growth in EBITDA is partially because of the growth in the top line. Also we had some establishment of some new long-term partnerships. Large projects also add to the EBITDA. Okay. How many scientists do you have? For us, the total strength is about 1,300, and our scientific population is 70% of that number. Okay. Right. Fine. Thank you. All the best. Thank you. Thank you. The next question is from the line of Dixit Doshi from Whites tone Financial Advisors. Please go ahead. Thanks for the opportunity. My first question is regarding the growth. If I exclude the INR 10 crore, that one-off from the revenue, our revenue grew by 10%. If I see our pre-COVID level, we used to grow at 15% to 20% prior to 2019, for at least four or five years. Let's say, this year, if our Q2 performance continues for second half as well, we might end up at INR 240 to 250 crore revenue this year. Given that electronic business will start from Q4 onwards, and even this FSSAI will start from Q4. The recently started diagnostic centers labs in Kolkata and Delhi will also get mature by year-end. What kind of revenue growth percentage we can envisage for FY 2023 and 2024? We don't make any forward-looking statements. Call for one year. I keep mentioning in these calls that we have a target for 2025 to be at least a INR 550 to 600 crore company. We just have to break up that growth into these three, four years and take it from there. Okay. At least we can expect that in near future we will start growing again at those pre-COVID level of 15% to 20%. The numbers I think that you're referring to in those earlier were annual group numbers. If you see quarter-on-quarter, I think we are doing pretty good. We can even better those numbers. Okay. Is there any further plan of expansion in diagnostic in H2? This is the first time actually we are significantly expanding footprint in a B2C market because in addition to putting up the two regional labs, we have also set up a few customer collection centers, company operated collection centers. For us, again, this is a water testing year. Depending on how that pans out for us, we might take up the expansion plans much more aggressively in the coming years. Okay. One last question from my side. In terms of pharma business, obviously even in Q1 when there was second wave of COVID, there were difficulties in terms of importing the animals and also difficulty in terms of signing up the patient. How are we seeing the trend now? The animal imports problem has been resolved. We have been able to actually double our kennel capacity. We have one of the largest large animal capacities in the country now. That is resolved. The second one was? Yeah. second one was related to clinical trial, the patient recruitment for the clinical trial. We are actually at present not doing any clinical trials. What we do is bioavailability and bioequivalent studies. Right now we don't have any trials going on for us. Diagnostics, yes, in Q1, we still had lower footfalls in terms of patient sample testing, it was more than well compensated by the COVID testing numbers. Q2, that's normalized. We don't have COVID, it's the other business that is happening now. Okay. Thanks. That's it from my side. Thank you. The next question is from the line of Ranveer Singh from Sunidhi Securities. Please go ahead. Thanks for taking my question. Just wanted to understand that food lab you have set up. What kind of investment we have made in this food lab? We have invested about close to INR 10 crores. That investment part is complete now? Yes. The equipment and everything are set up. They're qualified. Any residual investment might happen in Q3. Okay. In this food lab, you mentioned there would be some strong revenue coming up from this lab. Whether that, though you will not be able to give a number, I understand, but whether this division is likely to be a prominent division in our overall revenue breakup? Ladies and gentlemen, please stay connected. The line for the management got dropped. Ladies and gentlemen, thank you for your patience. We have the management line reconnected. Singh, go ahead. Go ahead, please. Yeah. I was asking investment in food lab, what we have made. You mentioned that there will be some strong flow of revenue. Whether this revenue would be a prominent part of our revenue going forward, this is going to be significantly contributing to our overall revenue, or if I take two, three years down the line, so what kind of contribution we can expect from this facility? The revenue is entirely dependent on the number of samples that we test in the National Food Laboratory. Like I was saying earlier, this is to mainly cater to the imports. The imports, although they are not growing at any double-digit numbers, but still they are quite stable. Going into the future, it's very difficult to predict which way the imports will go. India is saying that there'll be a lot of self-reliance that we will develop. My guess is the food imports, even though we might become a strong exporter, the imports might still continue at those levels. We should expect the revenues to continue or even grow with the economy in the next 25 years. Okay. Apart from this facility is dedicated to this port facility or we can use this facility for other clients also? We can use this facility for other clients. Okay. Secondly, on diagnostic side, our diagnostic business setup is similar to other peers like Thyrocare or some. This is related to preventive healthcare checkup or do we have some other origin to this diagnostic business? It's very similar to the peer group. You mentioned Thyrocare, it's quite similar to that. Okay, it's like a hub-and-spoke model, and we'll be setting up a reference lab in different cities and then collection centers. That is the way we will be going forward. Correct. Yes. Okay, fine. What is the investment in this diagnostic business so far? It's not a very CapEx-intensive business. It's more m anpower, sales reach out. Not very intensive. Okay. That INR 12 crore CapEx in first half was related to what? Just for maintenance or some growth CapEx? That is distributed across all our business units. It could have included even diagnostics. It could have gone to pharma, food, all the business units put together. Okay. Similarly the case for next year also. That INR 24 to 25 crore annual CapEx should be across segments. That's what you're saying. Yeah. Typically, we tend to use up all the depreciation amount. Okay. Fine. That's it from my side. All the best. Thank you. Thank you. Thank you. The next question is from the line of Sunil Jain from Nirmal Bang. Please go ahead. Sunil Jain, your line is on talk mode. Yeah. Sorry. My question related to the INR 10.4 crore which you had recognized as a revenue. Against that, how much expenditure has been recognized, and how much is the profit in that? Yeah. As you rightly said, we have recognized about INR 104 million at the revenue from operations level, which is nothing but the cost what we had incurred to set up this lab. The cost what we incurred is INR 104 million. On a net basis, there is no impact on bottom line. There is a similar amount of recognition at revenue as well as cost, which is INR 104 million. If I exclude that from the revenue and cost both side, then your margin seems to have moved up very sharply in this quarter. Any specific reason for that or how we can read it? You're absolutely right. Margins did improve. That is because whenever there is an incremental revenue, there is economies of scale. Yeah, from INR 61 crore, if I exclude this revenue, then it's INR 65 crores from last quarter to this quarter, but the profit recognition is much higher than the INR 4 crore. The EBITDA improved by around 400 basis points for the quarter, I mean, on a sequential basis, which is from the operational efficiencies during the quarter. Okay. There is no exceptional, it's all because of operational? No, there is no exception in the EBITDA level or PBT level. Exception has been shown separately. There is one line item in the result sheet, which is about INR 12 million. Yeah. Apart from that, second question relate to this food lab. What will be the revenue sharing with government or it will be more of a profit sharing? How it will be working then? It's a top-line share. Okay. We went through a bid process, so it's a top-line share. Okay. These are all having the similar margin to company level or it will be a lower margin business? It should be better. Better. Okay. Because of this lab, our existing business will get transferred to this or no? No. Okay. Fine. Okay. The size of business you are not sharing. Okay, fine. Great. Thank you very much. Welcome. Thank you. The next question is from the line of Vinay Nair from Emkay Global Financial Services. Please go ahead. Yeah. Thanks for taking my question. My first question is related to you mentioned that you're targeting a revenue of INR 600 crore in next two to three years. With the CapEx, which you had mentioned of around INR 10 to 15 crore, is it achievable or you would be requiring additional CapEx for that? Secondly, pardon if my question is very basic, but if you can give me some understanding about the competition and the industry per se. I mean, what is our market share and who are our closest competitors? If you can throw some light on that. Okay, that's a very big question, the second one. I'll answer the first one first. Yes, we have an ambitious target of reaching close to INR 550 or INR 600 crores by 2025. This would require additional infusion of CapEx. Depends on which business units we'll be pushing hard to reach there. The second one is about market and our share. We operate in multiple verticals. On the pharma side, analytical especially, we are the leader in the market. All the U.S.-oriented business. We work with practically everybody who is in that market. Market share-wise, we have honestly not done any specific marketing. If I were to take a good guess, then I would say that U.S.-oriented services, we probably have the lion's share. We have good number of competition in Hyderabad, in Bombay, Ahmedabad. I think we take the lion's share there. Coming to clinical research and pre-clinical, again, pre-clinical, we are one of the premier research centers, one of the preferred ones in the country because of our strong regulatory track record. We have strong competition from one multinational. Then there's a few, six local players. Pharma side, we could be enjoying a share of maybe 10% to 15%. That would be my guess. For any clinical research, bioavailability, bioequivalence market is a big one. There are many players. I think there must be at least around 100 or 150 service providers. Market share there might not be very big for us, but we are one of the premium laboratories. We work with highly quality conscious organizations. Most of our business comes from overseas for these services. Coming to food, highly fragmented. There are hundreds of NABL accredited labs, small mom-and-pop type of setups as well. Given the number of players, I think if you just divide among the top maybe eight to 10 players, then I think we have a good share there, maybe 10%. Environment, we are a leader. There also you have good number of laboratories, but the revenues are pretty small for all of them. We might be in the top five labs who do environmental studies. Coming to diagnostics, we are not big at all there. There are very big companies there. Our market share might not even be worth mentioning at this point of time. In the rest of the business segments, the competitors you're talking about, even the largest one, the revenue size would be somewhere similar to what you're reporting, right? No one would be like a INR 1,000 crore plus revenue generator. If I'm understanding you correctly. In which service? In all the rest of the segment, apart from the diagnostics. The rest of the segments which you were talking about. You said that either it is fragmented or you are the market leader. Either it's fragmented or the ones which are specialized, there you are already one of the market leaders. Which means that even amongst your competitors, no one would be more than a INR 500 crore, INR 600 crore revenue enterprise. Am I right in my assessment? Not entirely, because the unique mix of services that we have are not exactly matched by the competition. It's very difficult to compare like that. Okay. Just to give you an example, if I compare you to the recently, there's this company based in Ahmedabad who had filed for an IPO. Would you call them your competitor, Veeda Clinical Research? Just for my understanding, so that I am also able to analyze it better. Go ahead, please. Please finish. Yeah. I just wanted to understand, is Veeda competitor in one of your segment, or it's a competitor as a whole? Just one of our segments. They do only BA/BE studies. Okay. In the rest of the segments, you're saying that each segment has prominent players, and you are one of them. That is what you meant to say, right? You are amongst the leaders in all the rest of the segment. That is what you said, right? Yes. Like in clinical research, you would be like, I'm sure Veeda is also somewhere around INR 200 to 250 crore revenue company. I don't know about the other players in the other segments. Going by what you have told me, it's very clear that you are amongst the industry leaders in most of the segments. Am I right? Yes. Okay. That answers my question. Thanks a lot. Welcome. Thank you. The next question is from the line of Aman Vij from Astute Investments. Please go ahead. Yes. Good afternoon, ma'am. My first question is on our clinical research/pharma business. In terms of number of beds, could you talk about where do we rank and any plans to do additions in terms of number of beds? Number of beds, we might be in the top 10, definitely. Yes, we do have thoughts about expanding it, but not necessarily in the state of Telangana, but maybe we'll look towards north when we do that. The current bed number is around 180-200? Correct. The utilization level, ma'am? It's 100%. Okay. This expansion can be soon then, if we are already utilizing. Yes. We think there is a possibility of a requirement of expansion maybe sometime in next year. If you can give roughly, if you have to expand by, say, similar capacity, 200 bed, what is the nominee CapEx for such expansion? The CapEx, in these studies, there are two halves of the service. One is the clinical part and the other is bioanalytical. Clinical part doesn't need a lot of investment. The bioanalytical, it depends on how many mass specs you wish to deploy. It all depends on that. I'm just saying, for a rough approximation, say, if we have to set up similar facility like we already have, what will be the CapEx required in a new region? Just on the bioanalytical side, if we have to build an equal number of instruments. It might cost about INR 10 to 13 crores. Sure. Yeah. Ma'am you said Sorry, we are in top 10, not in top five or top three. I had the assumption we should be in at least top five. Clinical research, no. We may be in the top five. The top one and the two players, their capacities are really high. Even three, four, five are probably at our shoulder level only. Yeah. They have like maybe 400, 500 beds. They have some beds outside India also. Correct. Right. Yeah. While we will be focusing only on domestic expansion. For now, yes. As of now. Yeah. Yeah, sure. Ma'am, second question is, if you look at our four, five business segments, CRO part, if you remove that, ma'am, diagnostically, I think we're second biggest. Which we, in that four, five, four-year vision of INR 500 to 600 crore top line. You had earlier talked about INR 100 crore each from the newer segments. Yes. Which segment do you think will cross that threshold of INR 100 crore first, according to you? Food, I think. Food should go first. Okay. Followed by, ma'am? Diagnostics. Sure. Finally, the final question is, what is our total CapEx plan for this year, FY22, as well as in next year? Next year we would be planning only towards the end of this quarter, but this year we have already spent INR 12 crores. We might spend equal amount in the second half. Sure, ma'am. Thank you so much. Welcome. Thank you. The next question is from the line of Milan Shah from Urmil Research Consultancy. Please go ahead. Hello. Thank you for considering my question, and this is for Mr. Naidu. I requested- Sorry, your voice is cracking. Third con call. Better now, sir? Hello? Yeah. It's better now. Correct. Hello. This is for Mr. Naidu because in third con call, I asked madam to update our website because I am doing a PMS service for client, and our website is not going to update any news, which is happening last two, three quarters. My request to update this one or maybe make a very prominent website for our company. Second, every company are going to make a presentation after declaring result. It is very useful to understanding for client also. It is maybe possible, then do it. Noted, sir. We are in the process of launching our new website. Probably in a fortnight or a couple of fortnights, we'll be launching our new website. Okay, done. Congratulations in advance, sir. Yeah. Thank you. Regarding, maybe if possible, then do presentation for quarterly result. Many company are going to make a presentation. All customers are not going to understand our business model. The line for the participant dropped. We move on to the next participant. The next question is from the line of Dilip Sahu, Individual Investor. Please go ahead. Thank you. It's regarding the investment we have made in the new food laboratory. You talked about an INR 10.4 crores investment, that's using your existing resources. If it hadn't been that, it could have been INR 20 odd crores, if I heard it correctly. We typically do 1.5 to 1.8 times asset turn in our regular business. Can we say that on an INR 20 crore kind of investment, the asset turn will be around 1.82 times for the new food laboratory? For us, it typically tends to be around one to one and a half only, depending on the service line. That we can expect. Around INR 30 odd crores of business for assuming that we have a similar kind of turns. That's what in near future may not be quarter or two, maybe a year or two, it will happen. Like I said, we are yet to start the operations. The committee, FSSAI and Vimta committee is yet to freeze on the prices. We are yet to explore the volumes. You do get some numbers when you're bidding, but you will have to experience them. Once we go through a few quarters, I think we'll be in a better shape to respond to that question. Sure. No problem. Coming back to the diagnostic business, we had a RRL in Hyderabad and then Kolkata, now Delhi. We have three RRLs now. We have around 40 odd customer collection centers. I'm just trying to understand the business model. This is different than the ratio of RRL versus collection center. Is it predominantly a B2B business for us, or how is it? Is it a B2C business? It is predominantly a B2B business. What we have in Hyderabad is the main reference laboratory. The ones that we set up in Delhi and Kolkata are mini versions of this, but they are having a good size of menu at these two locations. They have biochemistry, microbiology, molecular biology, everything. Our collection centers are 40, but we have lot of franchisee network. We get samples from clinicians which work with our franchisees. The number of franchisees that work with us is in higher numbers, close to 500, 600 plus. If I remember correctly, you had said in Q2 last year or Q3 that you had reached a INR 10 crore kind of revenue for diagnostic business. Obviously, that would have dropped because of COVID and all, getting relaxed now. Reaching INR 100 crore for diagnostic means you'll be growing around 25% or more in next three years. Am I missing something here? A 25%-30% growth in the diagnostic business you will see in next three years? Sir, the number that you have, INR 10 crores, is wrong. At the same time, I won't be able to correct you with a specific number. Growing from where we are into that, it will be a very challenging task. I think we are geared up with our strategy. We are geared up with the team to reach our targets. Okay, ma'am. Thank you very much for answering my questions. Thank you. Thank you. The next question is from the line of Sunil Kothari from Unique Portfolio Management. Please go ahead. Hi. Thanks for the opportunity. Congratulations, madam and team, for such good and qualitative better numbers. Ma'am, my question is on cash flow. We have two items which talk about impairment loss on receivables and bad debts written off, which is almost INR three and a half crore for half year. Would like to understand from you the strategy we want to follow and to tighten our receivable systems to not lose this type of money, maybe annually INR 5, 6 crore, which is a big amount for us. Your thought process on that. Second is, we have paid some INR 5.2 crore for purchase of intangible assets. If you can talk a little bit more on which is this intangible assets and related to that. Yeah. I'll be answering those two questions. On the first thing, there's a provisioning of INR 1.7 crores for the first half of the financial year. This is in line with the industry requirements, which is as per expected credit loss method. On the second line item, there's a write-off. We had been very prudent in terms of assessing the receivables and providing for it as and when it is needed. It's a continuous exercise. Accordingly we have written off certain receivables. On the action plan, the entire management team is very closely working on to improve the situation. I'm sure that going forward we'll be able to improve the situation on the receivables. There are a lot of internal efforts or internal resources which are being deployed to improve the situation. Having said that, this is very regular in nature, so there's nothing alarming when it comes to the provisioning as well as write-off. That's on point number one. Point number two, investment deployed for purchase of intangible asset. This is what we had incurred, the cash what we incurred in setting up the lab, what we had already discussed, of National Food Laboratory. The total investment comes to around INR 10.4 crores. There is something which we had incurred out of cash. There is something which we had pulled out of our existing resources and transferred it to set up this lab. Thus, both the questions are answered. Okay. total investment we made is INR 10.4 crore. Out of that, this INR 5.2 is intangible related. Total INR 10.4 is classified as intangible, but cash impact is INR 5.2. There is some transfer from our existing assets which is about INR 5.2. Understood. Thanks for this clarification. My question is to ma'am. This almost INR t3.5 Crore roughly we are losing on this impairment and this bad debts. On the size of company to lose INR 6 crore-INR 7 crore per year, I don't think it is acceptable to you or your management. I wanted to understand your thought process. What steps we are taking and how you feel this is acceptable? Typically, in our industry, 1.5% is not at all alarming. Like our CFO was mentioning earlier, we just follow the formulas in order to provide for the provisioning. As such, there is no lack of control over this item. Things got a little sticky, especially on the retail business, during COVID, because we were not traveling. Our teams couldn't travel. Our teams couldn't meet the customers directly. Some accounts became a little sticky but we keep working on those things. It's all part of business for us. I wouldn't say there's anything alarming about it. Okay, great. Last question is, would you like to throw some light on your ambition to have some type of EBITDA margin maybe over the next two, three, four, five years? Or this range is maintainable or there is scope to improve it there? We want to maintain it and in fact, try and better it. Okay. Thanks. Wish you good luck, ma'am. Thank you, ma'am. Thank you very much. Thank you. Thank you. Participants, you may press star one to ask a question. The next question is from the line of Viral Bhansali, individual investor. Please go ahead. Thanks for the opportunity. Hi, Harita. Hi, Narahari Naidu. Congratulations for a brilliant set of numbers. It is really refreshing to see Vimta so aggressive again after having seen it so aggressive between 2000 and 2010. That's a very refreshing change from Vimta, even without the INR 10 crore ex one-time revenue that Vimta has had. My question is regarding the JNPT lab which Vimta won on the PPP basis. The Ghaziabad lab went on a 15% minimum revenue share that was mentioned in the RFP. What could be the revenue share for JNPT lab? You are asking us to share with you our secrets, Viral. I won't be able to share that because it won't help me in the next bid, right? I understand. Yeah, I was coming to that only. I think that the RFPs for Chennai and Mumbai were floated together. Yes, we bid for both, but the size of the JNPT lab is much, much more bigger than the Chennai lab. 66% of the imports happen through JNPT. The model that we have entered into with FSSAI here at JNPT is not similar to the one that they have at Ghaziabad. They are slightly different. Oh, okay. Yeah, because Ghaziabad is an ICD, I guess. Yes. It's not a port. That means the volumes will be 1/10, maybe 1/15 over there. Yeah. Much less. Yeah. Now, based on the figures mentioned in the RFP, JNPT does close to pre-COVID levels, close to around 1 lakh samples for import consignments of food every year. The charges at that time, like before COVID, were around INR 5,000 for everything apart from milk and the beverages part, and INR 2,000 for the visit, in case you have to visit the client's end. Are these charges now there, or maybe we may see an upside potential to these charges? The charges have recently been revised. They have been doubled, in fact, very recently. Okay. I don't want to get you into any uncomfortable situation about the numbers, but I can get a sense of numbers based on 1 lakh samples a year. Any idea if the Kolkata lab is going to be put on the block in a similar way? They have no plans of going in for a PPP there. Nothing that we are aware of, at least. Okay. Now coming back to the JNPT lab, since you have provided INR 10.4 crores for the infrastructure set up over there, and the RFP mentions that the lab is on a setup operate and transfer. What I presume is, whatever you have set up, you have billed it to the FSSAI. Whatever infrastructure that you've built belongs to FSSAI. Vimta will just be the operator of it. You'll have the license to operate it for the next 25 years, and then transfer it back. Is that correct? Correct. The site was provided by them. Of course, it was an old hostel building that we got, so we had to do a lot of modification. We put our equipment, our people. At the end of 25 years, if we are not able to renew the contract, then we transfer it on an as is basis, minus the people, of course. Just to add to that. This revenue what we had recognized is more of an accounting treatment. We haven't invoiced anything on FSSAI for that. This is more of an asset recognition in the form of intangible, which is routed through P&L. Okay. We are not going to receive any payment on this. No, because this is the asset what we had recognized, but there's a corresponding right to receive the revenue for the next 25 years. This is in line with the accounting principles, where we had recognized intangibles and the corresponding revenue and cost. Basically that comes as an intangible asset. We bear the cost for it, and we create that as an intangible asset. Absolutely. Correct. Based on what you said, that the prices have almost been doubled and based on the RFP, the samples are close to 95,000 a year, and obviously I expect some growth year on year, 1 lakh samples or so. That can be a significant amount of Vimta's revenue coming next year, FY23. Am I correct? Yes. My last question is regarding the capital work in progress that I see is INR 25 crore right now as on 30th September. Can you give a breakup on this capital work in progress? This largely represents our E&E vertical, what we call it as, which is our electronics division, which is yet to get commercialized. We are expecting this to be commercialized in the second of the quarter or early quarter four. We're in the last leg of getting accreditations, qualifying the assets. There's technical clearance which is awaited for this. The entire amount of INR 25 crores belongs to E&E vertical. It's the electronics testing. Correct. Yeah. My last question is regarding, recently there was a government notification which mandates compulsory testing of egg and egg powder exports from India by a national laboratory. Can Vimta get a share of this in the export market? Is there a possibility? If they have specified that RRL, reference lab, NRL, sorry, National Reference Lab, take it, then there are identified labs for each product, then that would go to that particular lab. If it is a tendered project, then we could have a chance at it as well. I'm not really aware. Okay. It was just recent one in September. Okay. Now regarding the export front, for example, the RFP, I'm just quoting what I read in the RFP, I may be wrong, correct me if I'm wrong, okay? The RFP suggests that Vimta can also use the laboratory, the National Reference Laboratory set up at JNPT for other services, for providing other services to its clients. Yes. Is there a possibility of getting a significant chunk of this business? Since we already have a brand name of FSSAI, and we are at the port. Is there an opportunity to put business from this? There are plenty of opportunities, but for us, the capacity is limited because it's just a 12,000 sq ft lab that is set up right now. If we have to expand the capacities, then we have to work with FSSAI and do that. Right now, I think we'll be using the entire capacity, running the lab in multiple shifts to handle those volumes. Yeah, considering that there is also a food park coming up in the JNPT area itself. Yeah, like I said, we have a lab close by in Pune, so maybe we will have to send it there depending on the capacity utilization and the time of the opportunity, timing. It all depends. Do these guys, SGS, Intertek, Eurofins, subcontract the testing part for the export consignments? I wouldn't imagine because I think all of them are full scope labs like us. One-off rare tests, maybe they do, I don't know. Okay. There is no possibility of getting a significant chunk of an export market, since we are already at the JNPT. No. No, right? No. Fine. Thank you so much. Please keep up the excitement and the enthusiasm that Vimta has once again gotten. Good luck. Thank you. Thank you very much. Ladies and gentlemen, that was our last question for today. I will now hand the conference over to the management for closing comments. I just want to thank again everyone who have participated in the call. I appreciate all the questions that have come in. Thank you very much. Good day. Thank you very much. On behalf of Nirmal Bang Institutional Equities, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.