Ladies and gentlemen, good day and welcome to the Vimta Labs Limited Q4 FY 2023 earnings conference call hosted by Systematix Institutional Equities. As a reminder, all participant lines will be in the listen-only mode. 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 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Manchanda from Systematix Institutional Equities. Thank you. Over to you. Thanks, Frank. Good morning, everyone. We welcome you to the Q4 FY 2023 earnings call of Vimta Labs, hosted by Systematix Institutional Equities. On the call today, we have with us senior management team of Vimta Labs, led by Ms. Harita Vasireddy, Managing Director, Mr. Satya Sreenivas Neerukonda, Executive Director, Mr. Narahari Naidu, Chief Financial Officer, and Ms. Sujani Vasireddy, Company Secretary. I'll now hand over the call to the company management, following which we'll open the call for Q&A session. Over to you. Thank you, Vishal and Systematic, team for hosting our earnings conference call. Good morning, everyone. I'm pleased to welcome you all to Vimta Labs earnings call to discuss Q4 and FY 2023 results. Please note a copy of all our disclosures are available on the investor section of our website and realized on the stock exchanges. Anything said on this call, which reflects our outlook for the future or which could be construed as a forward-looking statement, must be reviewed in connection with the risks that the company takes. Please note that this conference call is being recorded and the audio and transcript of the same will be made available on the website of Vimta Labs and exchanges. Please also note that the audio of the conference call is the copyright material of Vimta Labs and cannot be copied, rebroadcasted or attributed in press or media without specific and written consent of the company. I hand over the call to our Managing Director, Ms. Harita Vasireddy, for her opening remarks. Over to you. Thanks, Narahari. Good morning, everyone. We thank you all for joining us in this Q4 FY 2023 earnings call. We are pleased to share with you the updates for the quarter and for the financial year ended 2023. Before I discuss the performance of the company, as we begin a new financial year, I would like to spend a couple of minutes on the global economic overview and how the TIC/CRO industries is shaping up. The global economy continues to be in turmoil as the inflation remains elevated across the globe, along with no respite from the war in Ukraine, at least not in the near future. This, coupled with the U.S. banking crisis, continues to spring surprises and has added to the uncertainties in the economy. With these headwinds, what has kept our hopes buoyant is the Indian economy, which seems to be in control and certainly in a better position to withstand the impact from these macro headwinds compared to most other developing nations. On the industry front, the TIC and CRO industries and the TIC stands for Testing, Inspection and Certification. We operate in both these spaces. We continue to face the tailwinds with widespread use of testing practices across industries such as automotive, energy and utilities, oil and gas, pharmaceuticals, technology and manufacturing. This is a good sign for us. With large investments by international manufacturing, electronics and automotive companies in developing nations like India, the demand and range of opportunities for TIC services and CRO services will proliferate. The Indian government's Make in India, among other policies to promote domestic manufacturing, is further encouraging companies like us to move their testing activities or manufacturing activities here, thereby complying with the Indian TIC and CRO requirements or global CRO requirements. This is aiding an increase in operational expenditure on equipment and driving the market growth. On that note, I am pleased to share with you all that Vimta Labs has crossed yet again an important milestone of INR 300 crores during the financial year 2023. During the year, the company continued its strong growth momentum in foods, pharma and Electronics & Electrical services, with other segments remaining stable, which led to operating revenue growth of 19.6% year-on-year. This amounts to INR 3,162 million. Please note, the revenue from operations excludes revenue from service concession arrangement. In line with our communication, the EBITDA margins during the year continued its upward momentum to grow by 98 basis points during the year to 29.8%. I will let our CFO discuss these and more financials in his detailed commentary. Moving on to business performance and operational updates. Allow me to throw light on each business division briefly. The business segments that we are seeing as having great potential or potential unfolding in the coming years are Electronics & Electrical testing, food testing, and the preclinical and clinical research. Electronics & Electricals market is witnessing strong traction driven by Internet of Things, which necessitates increased adoption in wireless technology, booming EV market, more and more companies are shifting production to India. Most importantly, increasing focus on the government on EMC testing. While this is a relatively new segment for us, during the year, traction with the division growing strongly. We expect this momentum to continue in the coming years as well. Food testing market growth is catalyzed by increased safety and awareness, especially in the recent years, primarily with the penetration of social media and need for increased hygiene and food safety post-pandemic. Indian government is also focusing its attention on market surveys for food safety and quality. For Vimta, its food business has been growing steadily with the industry for many years now, and in FY 2023, this was one of the most important segments that was driving the growth of our business. We have also completed our first year of operations at the National Food Laboratory set up at Navi Mumbai. This is set up and operational in a PPP model partnership with FSSAI. While the volume was lower in its base due to various reasons, we have stated earlier, the numbers have progressed steadily. A proud moment for Vimta was recognition by Bangladesh Food Safety Authority for helping them in their goal to achieve harmonization of their regulation test methods with Codex. This is a unique cross-border partnership and a demonstration of our business philosophy regarding sharing knowledge with stakeholders for development of the industry and its ecosystem. Moving on. Clinical research is already a huge industry in India due to its low cost operation, and I believe all the players have enough space to grow in this market. I am a little excited about this space as we are giving it more focus, especially in the areas of patient trials. On the life sciences segment of the business, along with analytical testing and preclinical research, where we are already leaders in India, clinical studies on patients have become the right step for us in widening our services to our customers. We are seeing nice opportunities with our customers in this space, and I believe the addition of such services will boost growth for this division in the years to come. On the clinical diagnostics front, the industry also has huge potential, but the space is quite cramped with cutthroat competition. While we were of opinion to expand our clinical diagnostic services in the B2C space, we soon realized that this is a tough market which requires tremendous management bandwidth to scale this business. Therefore, at this point in time, we have strategically decided to pursue only B2B business in the diagnostics space. Lastly, the environment testing market is a relatively smaller unit for us, but growing well with the renewed focus by the country on ESG initiatives. We rolled out green audit services for various industries during the year, and the initial traction is quite positive from the customers. I believe this division will continue growing steadily in the coming years. In order to sustain our growth momentum, we will require more capacities, and therefore, we have embarked on doubling capacities in our Genome Valley facility in Hyderabad. These new capacities should help us achieve desirable growth over the next five years. The work for this has already started, and we expect the project completion by end of the year as planned. Before I conclude, I would like to specially thank our team at Vimta for their relentless efforts on various fronts, which has helped us grow strength to strength in the last couple of years. I would also like to congratulate the team for their strong performance in the audit by USFDA and other regulatory audits and customers' audits. To conclude, we remain focused on delivering quality, and we'll continue to do so in the coming years. We are seeing strong traction across the market, which makes us confident of achieving our midterm revenue target of INR 500 crores. With that, I now hand over the call to our CFO, Mr. Narhari, to discuss the financial performance. Thank you, Miss Harita. I would like to walk you through the consolidated financial performance of Vimta Labs for the quarter and the year ended 31st March 2023, after which we can open the floor for Q&A. I'll start with the consolidated financial highlights for the quarter. Revenue from operations for Q4 FY23 stood at INR 818 million, as compared to INR 721 million in Q4 FY22. Up 17.4% on YOY basis. The revenue from operations excludes revenue from service concession arrangement, when we talk about growth of 17.4%. EBITDA stood at INR 2.2 million in Q4 FY23, as compared to INR 230 million in Q4 FY22. This translates a growth of 5% on a YOY basis. EBITDA margin for the quarter improved sequentially by 182 basis points to 29.5%. On YOY basis, margins were down by 150 basis points. Basis points. Profit after tax in Q4 FY23 stood at INR 127 million as compared to INR 180 million in Q4 of FY22, a growth of 7.2% on a YOY basis. Tax margins for the quarter improved sequentially by 233 basis points to 15.4%. On a YOY basis, tax margins remained stable. Moving on to full year performance. Revenue from operations for FY23 stood at INR 3,162 million as compared to INR 2,644 million in FY22, up 19.6% YOY basis. Again, here the revenue from operations excludes revenue from service concession arrangement. EBITDA stood at 949 million in FY 2023 as compared to INR 803 million in FY 2022, a growth of 13.2% YOY. Translating into improvement in EBITDA margins of 29.8%. This is roughly a growth of 98 basis points compared to the previous financial year. The growth in EBITDA margins during the year was driven by better product mix. Profit after tax in FY 2023 stood at INR 482 million as compared to INR 413 million in FY 2022, a growth of 16.6% on a YOY basis, translating into a steady tax margin of 4-15%. Tax margins for the year remained stable due to better EBITDA margins, which is offset by higher depreciation and during the year. On the balance sheet side, we continue to have net free balance sheet, net debt-free balance sheet with cash and cash equivalents, including other bank deposits of INR 398 million. Coming to the working capital movement. If you see the trend over last couple of years, you will see a clear downward trend. Our working capital days were around 120 days in FY 2021, which was brought down to 102 days in FY 2022, which further came down to 98 days in FY 2023. This was driven by improvement in inventory days as well as better days. We have continued to focus improving our working capital management, which also helps in generating stronger cash flows from operations. In summary, robust growth, improving margins and working capital management has led to strong cash flow generations of close to INR 879 million during the current financial year. I believe we will continue to generate strong cash flows in coming years as well, which will take care of regular cash requirements as well as to certain extent of CapEx requirements as well. CapEx for the year stood at INR 498 million. This is the CapEx also which I'm talking about, leading to a net free cash flow generation of INR 381 million during the financial year. CapEx for the coming year, Ms. Harita mentioned in her remarks that we will be doubling our capacities and the CapEx. CapEx for the same has already begun. Total estimate, estimated CapEx for this project is around INR 60 crore and around 20% of this has already been earmarked in the current year's CapEx. We expect the remaining CapEx to be completed in FY 2024. Before I conclude, I would like to highlight that we have paid back INR 44 million of debt during the year. The outstanding borrowing stands at INR 150 million, resulting in a debt to equity ratio close to 0.05. With that, we can now open the floor for Q&A. Thank you. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes 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. Our first question comes from the line of Sunil M. Kothari from Unique PMS. Please go ahead. Thanks for opportunity and really good performance in this challenging environment. Very good cash flow management and profitability. My question is, basically we during last two, three year, we invested almost INR 725-30 crore from 2021 to now. Last year this 2022, 2023, INR 49 crore, previous year INR 45 crore. Out of that what I understood is INR 12 crore is for new, this doubling new capacity at Genome Valley. Remaining CapEx was for what? If you can a little bit explain in detail and how those capacities are utilized. Outcome is already achieved or you feel this during current year and next year those CapEx will contribute to the revenue? That's a good question. Typically our CapEx spend every year is to the amount of the depreciation. That is used for either buying new technologies or replacing existing ones, or expanding the capacities. That goes on year after year. We had an additional investment for building expansion, which started last year for us, and that will continue into the new financial year, FY 2024. Okay. That includes this INR 60 crore total CapEx of this doubling capacity or building is different? Building alone we have a budget of INR 60 crores. Okay. Out of that we consume 20% in FY 2023. The remainder will get consumed in the new financial year. Okay. This total INR 60 crore project includes everything. Equipment, buildings, and all the required machines or maybe whatever laboratory equipment. No, no. This is only for the infrastructure. The equipment we will buy on a need basis. As and when we need to add more capacity, we will buy them. Right. Fine. My last question then is, during last two, three years, the challenge we faced was COVID and then a slowdown of some business segment, little longer time taken by Electronics and Electrical segment, this diagnostic division challenge. That's why I understood that you are a little bit delayed your objective of reaching INR 500 crore-INR 600 crore revenue to 2025, 2026. Now we are specifying that it will be a INR 500 crore revenue by 2026. Would you like to comment what has gone or changed and how confident you are for achieving those objective of this INR 500 crore? Some things have gone well for us and some things haven't. The things that have gone well for us are the good growth or potential that we could capitalize on in the food and pharma services. The electrical division, electronic testing division, we could have started 1 year earlier, but for the COVID situation. That has, you know, that has led to a loss of one year. Number wise, that didn't impact hugely because the first few years numbers will not be that high anyways. The diagnostics we were anticipating would help us significantly in reaching our, you know, INR 500 crore target. We are now seeing that that is not a huge possibility as compared to other business units. How confident you are to achieve this now revised target by 2026? We have good confidence. I think the growth that we have been seeing, further boosts our confidence. We are targeting for better growth in the coming years. Thank you, ma'am. Wish you good luck. Thank you. Thank you. Our next question comes from the line of Dhwanil Desai from Turtle Capital. Please go ahead. Good afternoon, ma'am. My first question is, you know, you mentioned in the previous answer that, you know, diagnostic was a very significant part of the overall scheme of INR 500 crore medium-term target, and that somehow we are kind of putting a break on the B2C side. Does it mean that we are seeing much better traction on the pharma side and that is going to make up for the whatever numbers that we had assumed on the diagnostic side? Yes, your statement is true. I think food and pharma segment will compensate well for the diagnostic business that we don't think we can grow at the anticipated rate. At least the plans we had for diagnostics, we could not fully push them number-wise. Effort-wise there is still no lacks on our side. Efforts continue. The results we were anticipating to be better. That is definitely offset by good growth in the other two segments, food and pharma. Slightly delving more on that. What is kind of working out better than expectation on the pharma side? Is it that the preclinical side that we were kind of trying to ramp up that is, you know, doing more better or, you know, any color on that? Yeah. Like I mentioned in my commentary, the food side, even government is pushing for a lot of testing in the market. When a regulator starts doing that, then the industry also sort of puts more effort in its, you know, product quality safety testing. There is a good push happening from the government. Coming to the preclinical, the China situation has helped us. Many companies that had strong relationships with China are now looking towards other countries, and India is a major destination as an option for them. Okay. Another question was on the E&E side. Can you give more color on the ramp up? You said that it is ramping up. I think we were kind of anticipating a higher ramp up. I think we also got the page two accreditation also. I mean, how do you see this ramping up in FY 2024? I cannot comment much on how the volumes will ramp up in the future because that is not, that's not an information that is even shared with us by FSSAI. Currently the volumes are significantly better than what they were maybe 5, 6 months ago. Okay. This entire thing, that we had talked about that, can be selling already existing ecosystem and the samples that went there. you know, it takes time to kind of, you know, to sample coming to E&E. Do you see any improvement qualitatively, as more samples coming in to E&E rather than going to the existing ecosystem? Sorry, but your voice was very hazy. I could not get your question. Yeah. I said that, you know, we were saying that the there is an existing ecosystem around that E&E lab and the samples were currently going there and only a part of anticipated volume was coming. Are we seeing any change in that, in terms of now more volumes coming to E&E than the going to the existing guys serving, you know, that segment? I cannot comment on what are the number of samples, you know, that are going outside E&E, but I can only comment on the fact that the volumes have increased for us. They're definitely better than the first six months of operation. Okay. Last question from my side. I think in your opening remarks, you know, you sounded quite optimistic on the, you know, electrical side, electronic and electrical side. If I assume that, you know, we put in 30 crore of CapEx and, assuming one time effect on, you know, 30 crore revenue can be achieved by then. Are we thinking that, you know, we would be able to fully utilize our capacity in couple of years? Is that? you know, part of your business plan? Yes. Now the capacity is of two kinds. There is EMI/EMC chamber capacity and then instrument capacity. We might need to add a chamber in a year or so as we see the utilization coming to 100%. Okay. That means that that segment will be, you know, INR 30-40 crores in couple of years. Is that a right way to look at it? There will be an investment on the chamber. That investment might come up in a year or two, depending on how fast we are able to fill up the capacities. Got it. Thanks, ma'am. All the best. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star one. Our next question comes from the line of Ankit Gupta from BAM Capital. Please go ahead. Yeah. Thanks for the opportunity. Just wanted to check with you know, ma'am, the new capacity at our existing unit will come, let's say by end of this year. You know, within our target of INR 500 crore or the aspiration that we have of reaching INR 500 crore, will that be backended post coming of the new capacity? Do you think, you know, next year also we have good levers for growth and we can grow at a decent rate of pace? Definitely the capacity expansion that we, you know, are getting into by end of the year will enable our travel towards the INR 500 crore. Right now, the capacities are quite strained, especially in some business units. There we are doing our best to continuously stretch. It's a difficult task. We have been managing to do it. Sure. How do you see growth panning out for us in FY 2024? Will it be a low or like a high single digit kind or low teen kind of growth? Or you are confident that, you know, despite some capacity constraints we'll see healthy growth during FY 2024 as well? FY 2024 we are pushing for better growth. We want to improve the growth rate that we had over the last year. Very early to comment on the subsequent year. Now let's wait, you know, go through a couple of more quarters. We'll understand more and we can answer that question better. Sure. Sure, sure. On the food side, the ex-E&E side, you seem to be pretty confident that, you know, there has been a lot of push from the government side. You know, in our earlier calls you had indicated that our margins on the food side were relatively lower than the company average. How are the margins shaping up on the food side, if you can comment on that? Food is a volume business. The more volumes we are able to bring on, the margins will, I think, get better. Sure. Have you seen, improvement in margins in food segment in FY 23 also? Yes. Okay. do with the kind of visibility you have or the kind of traction you'll see that, the food will continue to improve on margins as we scale up the volumes? There would be an improvement. I won't be able to exactly predict what is the percentage improvement, but we anticipate that, you know, with the new numbers that we are targeting this year, the margins should also get better. Sure. Sure. On the pharma side, you know, we have been talking quite a bit on the biologic segment. You know, it has been a new segment and we are pretty confident of that. If you can talk about how is the pipeline shaping up on the biologic side of Pharmasense. Many companies in India and mostly Indian companies that we are working with right now with respect to large molecules. They have exciting pipelines for their large molecules. That, that is quite promising for us. We have recently procured the technologies required for wider large molecule services. They are currently under installation. Once these get installed in this quarter, we'll be pushing those services in a more aggressive and focused manner in the coming quarters. Sure. Sure. Last diagnostic side. Can we assume that, you know, B2B segment, the growth will remain, let's say 5-10% on diagnostic side or, you know, even B2B has some potential to push for higher growth numbers? I will not be able to comment on the exact percentages of growth. What we have realized is that we are better off sticking to our strength, which is the B2B market. We will continue to pursue that. Sure. Sure. On the E&E you commented that, you know, the last six months our volume has increased significantly compared to the initial six months. In terms of percentage, we were at X times in the initial six months. In the last few months, how have we scaled up? Like, let's say, have we grown by, you know, 1.5 x, 2 x? If you can just give an indication on that front. I think it would be around 1.3x-1.5x push. Again, seasonality impact will be there because these are food commodities. Ladies and gentlemen, the participant line has been dropped or has left the queue. Our next question comes from the line of Jigar Shah from Financial Research & Technologies. Please go ahead. Thank you for taking my question, ma'am, and congratulations on very good results. I just wanted to reiterate, I mean, What is the CapEx for doubling the capacity in Genome Valley? Is it INR 60 crores total? Yes. INR 60 crores. Six zero. It'll be completed by March 2024, right? Right. Okay. Secondly, in this operational update I saw, and, ma'am, we mentioned 2 new initiatives we've rolled out. Rolled out green audit services for various industries. If you could talk a bit about the Bangladesh PPP that we have undertaken in terms of both the size of opportunity? Yeah. Both these things are on the non-number side. We have been invited by the Bangladesh Food Safety Authority to contribute to their effort in harmonizing their food safety standards to Codex standards. Codex is an international standard. There were several technical groups that were formed, and we were invited to be a part of the technical group for methods harmonization. We got special, you know, recognition and special thank you from the Bangladesh Food Safety Authority for o ur contribution, because I think we stood apart. We shined in what we did amongst the other technical groups. ud of it because we not only work with our government, but we are happy to work with other governments, especially, you know, with neighboring countries, where this kind of harmonization will improve the trade within the region. We feel satisfied when our work helps the region and not just the country. Coming to the other one about green audit, I mention this again only because it's an initiative, a new service that we have started in our environmental services. There's a lot of push in the corporate world towards ESG compliances. There's a lot of interest that is coming up from such companies, and we are recognized as one of the quality service providers. They have... Many have reached out to us to chart these services, and we have begun it for them. Any indication what could be the size of this opportunity, ma'am, the green audit? Opportunity wise, it's very rookie. Just, qualitatively, it's a very good work that Vimta has started doing and contributing in terms of environmental sustainability. Okay. Both these initiatives you don't see, I mean, contributing, Bangladesh, I mean, no plans to expand our geographic spread or nothing of that sort, right? As of now, nothing. You never know what opens up. You know, what, Our brand is growing. Our brand is becoming strong. Okay. In the Indian market, I mean, how is the competitive intensity, ma'am? In the food business, you mean? Overall, in all the services that we are rendering. Competition is very high in all the segments. There is no, you know, industry where there is no competition, at least where we are providing our services. It's quite intense. I would say a lot more in clinical diagnostics compared to the others, but it's there everywhere. Who would be your main competitors, ma'am? We compete with several companies for each of our service segments. On the food side and pharma side, we compete with the multinationals who are playing in India. The food side, of course, we also compete with the local domestic laboratories. Electronics and electrical, we again compete with multinationals who have set up their testing facilities in India. Coming to environment, there are again hundreds of that provide these services, but we have very strong brand there. The other one is diagnostics, and I'm sure you know who are the big players. We compete mostly with the local players. In our, you know, geographic regions where we are strong, we also compete with the national players. Okay. Just to reiterate, ma'am, the midterm revenue target which you mentioned around INR 500 crores, the margins would be better than the existing 30%, right? Sorry, better than? The existing 30% EBITDA margins. We hope that they would be better. Okay. Thank you so much. Best of luck. Thank you. Thank you. Our next question comes from the line of Aman Vij from Astute Investment Management. Please go ahead. Yeah. Good morning, ma'am. My first set of questions is on Electronic and Electrical side. If you can talk about what is our team size and the number of customers as of today. I think last quarter you mentioned you started the second shift. What is the pipe it's been like? You know, are we fully through the second shift or is there any plan of third shift as well? The team has been strengthened in the last couple of months. I think we are about a dozen plus people now. We continue to operate one shift and an extra half shift. As of now, there is no need for a third shift. In terms of customers, if you can talk a little about. Customers, we have added good number of customers from Hyderabad. What is the total number of customers as of today in this division, electric, electronic and electrical? I don't have the count with me, but, we have added a good number of customers during last year. Everybody that we have reached out to has responded well. As and when I think, they had, requirement of such services, they have all reached out to us. You have talked about scaling happening only after the 3rd year, not in the 2nd year as well. Any reason? Because now we would have given them and provided them services. Shouldn't the scaling be expected in FY 2024 itself? Sorry, Aman. Your voice was not clear. Please repeat. Yeah. I was saying you had mentioned that it will take us 2 years to scale. 1 year has already passed and another 1 year maybe this year talking about. I was asking because we have already done lot of testing for our customers, any reason you don't see the scaling happening this year itself in this division? Hello? Sorry. I was trying to understand your question from my colleague. Your question is, what is the scale in the first year and would be in the second year, correct? Yeah, yeah. Ma'am, you had mentioned that we were late by one year, right? We were supposed to start in FY 2022. We started in FY 2023. Then you had mentioned in the first two years numbers won't be high. Yes. The numbers won't be high in relation to the total revenues of the organization. That's what I meant. This division has its own plan, and we are sticking to the plan. The delay was on installation of equipment, that's how we couldn't start when we planned to start. After we started, the things are moving per the plan. Okay. The question was, do you expect the full utilization this year or next year in this? We think we might have to add a chamber maybe by 2025 or 2026. Okay, okay. The INR 30 crore cost split between the chamber cost and the equipment cost, roughly what was it? See, that's too nitty-gritty, and we negotiate with these vendors. No, I don't want to open up what our negotiation prices have been to the public. No, no issues. No issues, ma'am. In terms of the GNPD SSFI scaling up, Last quarter you had mentioned that there was a new CEO that had come. If you can update us in terms of stocks and, in terms of full utilization of this facility, do you think it can happen in next 2 years or it will take longer time? As I said in my earlier responses, I am unable to predict that because that is entirely in the hands of the government. We have no visibility on that. As new peers come and then, you know, we interact, we request, and then things are steadily progressing. That's all I can comment on. Okay. If you can talk about what is the current utilization in this facility. Utilization-wise it's good. We are running the double shift there. We can also add a third shift when sample volumes further grow. Utilization will be like 50%, 60%, right, minimum as of today? Utilization in terms of, you know, space, people and equipment. You know, for us it's three-dimensional. We can always add more people to, you know, add numbers to the three shifts if needed as and when. Equipment right now, I think they are, well used. I don't really have the utilization with us as of now. As and when we need more equipment, we are in a position to deploy them in a very short period. Infrastructure wise it is fully occupied. The space has been provided by the government, so that is fully occupied by us. There is no further, room for expansion. Okay. Sorry. What is the total number of employees who are on this project as of now? They are around 60 people. 60 people. Do you think we'll ramp up, this year, maybe? As I said, no, I don't know. If needed, we will. Sure. Sure, ma'am. My next question is on the food division. Do you think you can cross that 100 crore barrier in food this year or maybe in FY 25, do you think that will happen? It will happen soon. When it happens, I will announce it. Normally, we don't give out segment-wise sales. It's an internal target that we have taken in food that I wanted to share with you. I can just confirm to you that as on today, we are the number one in the country. Yeah, yeah. That was very interesting to know. The number two player, ma'am, will be like, 20% lower or they are much, much lower compared to us in this industry? I don't know. I honestly, I don't have that information with me right now. Su-sure, ma'am. On the pharma analytical and preclinical side, there also it was very good to know that we are the number one in India. At the same time, I believe there are two more players, maybe they are not very strong in this segment, Veeda and one more. Is my understanding correct that here we are the dominant player in India and maybe they are, they are more into the clinical side rather than pharma analytical and preclinical side? Yeah. Veeda is very dominant on the clinical research side, not so much on the other service lines. You had mentioned one more player who was quite big in India. Sorry, repeat please. Ma'am, you had mentioned two players who were quite big apart from us. One was Ginta, one was Veeda. There was one more player you had mentioned, right? In clinical research, the other strong player was Lambda. Yeah. They are also not very strong in pharma analytical and preclinical? They are mostly serving the captive business for their parent company, Lambda. Okay. Okay, makes sense. Ma'am, on the clinical research side, we were trying to break in and then this COVID thing happened. Any progress on that? Because that is a much bigger opportunity. If you can talk about, what is happening. This is regarding clinical research, right? Yes. Yes. Yes. Yeah. Clinical research, as I mentioned in one of my previous calls, we have started building capabilities for patient studies. That is a new service that we are going to flag off this year. Okay. Do you think some projects will fructify this year, which have been pending for last two, three years? I'm not able to hear. Can you repeat please? Yeah, yeah. Ma'am, I was saying, do you think, some projects in clinical research will fructify this year, which have been pending for last two, three years? Yes. Yes. We are very hopeful that something will fructify into 1 or 2 trips. That is also very good to hear, ma'am. Next question is on the people addition. We currently have 1,400 people. If you can talk about what will be the employee addition after this new facility comes in, and what kind of employee strength do you think we'll add in FY 2024, this year? Manpower-wise it has been very, very challenging after COVID. Luckily for us, we have been able to maintain the manpower cost, and we are going to put our best efforts to maintain manpower cost. The numbers might be here and there depending on, you know, how efficiently we are able to manage that goal of ours. Thank you. Our next question comes from the line of Dikshit Joshi from Whitestone Financial Advisors Private Limited. Please go ahead. Yeah, thanks for the opportunity. My first question is, recently the Eurofins has announced INR 1,000 crore CapEx in Genome Valley. Will that be on the similar lines of what Vimta does? Can that materially impact our growth plans? Eurofins is, not only a testing, laboratory and a CRO like us. They are also a CDMO. Contract, you know, development and manufacturing organization. Their re-revenue models and ours are, slightly different. Okay. You don't expect too much competition, because of them coming in. We are already competing with them on the pharma and food testing services and contract research services. Nothing new. Okay. Now, in terms of electronic business. As you also mentioned that, you know, government is focusing on manufacturing in India, a lot of PLI benefits are given for electronic manufacturing. I mean, let's say if after two, three years or five years, can this business become, say, 20-25% of our overall top line? Do you feel that even after considering that, this business will be small part of our overall revenue? At 2-3 years, we would be very happy to see it fall around 10%. Okay. Okay. In terms of diagnostic, you mentioned that now we'll be focusing more on the B2B side. Are we looking to, you know, let's say partner with any of the online service provider as their back end? No, no. Actually, the online service providers do not have a model of partnership with, you know, companies like us. They. It's very transaction based, you know, depending on the test location, very dynamic. There is no model for partnership as such. At least not something that we have come across. Okay. Okay. That's it from my side. Thanks. Thank you. Our next question comes from the line of Pratik Kothari from Unique Portfolio Managers. Please go ahead. Hi, good morning, thank you. Ma'am, my first question is on the Genome Valley. Once it is set up and we have ramped up to the maximum potential available, say, and I think you have mentioned that it might take up 5 years. What can be the revenue potential then? I mean, just to understand, what can this lab setup do for us, even, say, five years down the line? Many technologies are getting developed from the instrument manufacturer side also. They are talking about green labs. They are talking about revolution in labs. The technologies are revolutionized in terms of, you know, their size, the space that they occupy, things like that. The capacities that we have, we are currently building now could actually be, you know, stretched. I don't have a prediction as of now, very specifically for when this new building will be fully utilized. The one that we are sitting in right now was constructed in 2006. It has run for us so many years, and now we are full. Of course, we are growing faster now. The numbers are also bigger now. I wouldn't anticipate that it'll take the same amount of time to fully utilize the new capacity. I'm hoping we'll be able to use them up much, much faster. I don't have any specific forecast on that. Fair enough. Actually, I wasn't asking on the timeline. I was just asking what the potential... Currently, I believe we operate about 400,000 sq ft. I mean, including all facilities that we have on the pharma side. Yes. Not pharma, full company. Full company. Okay. Fair enough. Great. Ma'am, my second question was, in Q3 call, on the December call, we had mentioned that there was some spillover of revenue from Q3 to Q4. Ex of that also we were expecting some substantial jump in revenue. I mean, accounting for that we don't see as such. Any comments, anything that you would like to highlight? Usually when, you know, usually there is a setup. Some things don't happen and some unforeseen things happen. In last quarter, the setup didn't happen. That's the reason it was a slight aberration. Q4 the normal trends continue. The spillover that we were anticipating on some, they continue to spill over. Some have of course, happened in the last quarter. I wouldn't pay too much attention to them. Fair enough. My last question is on the margin. In FY 2022, if we take out the lab setup cost, which was recorded in revenue and expense again, INR 14 odd crores. If we look at margins, ex of that, it was 30 odd%. If you look at margins now, it's again 30%. We have grown at 20% year-on-year. Our expectation was, given the business that we have as we ramp up and ramp up quickly, we should see some operating leverage play out. The margins remained flat last year versus this. I mean, ex of your JNPT lab setup costs. Just your comments, why didn't that play out? Margins could have probably been slightly better had we been able to, you know, translate our plans in diagnostics effectively. That has countered it a little bit. Going forward, I think, the margins can definitely be expected to be better. Harita ma'am how is this... I mean, what is this better driven by? Pardon. Can you repeat? I mean, you said given going forward the margins we expect it to be better. That is, I mean, what is this driven by? I mean. It will be driven by volume. Last year also there is a good increase in volume that was probably offset by some deals that did not grow as anticipated. The betterment I am seeing, from the volumes only in all the business units. Thank you. Our next question comes from the line of Rohit from iThought PMS. Please go ahead. Hello. Am I audible, ma'am? Very difficult to understand. The sound is there, but clarity is not there. Any better, ma'am? Yes, better. Okay. Thank you, ma'am. Just a couple of questions, ma'am. One was on the I missed your commentary on the large molecule side. Can you just repeat that? You said that, you have signed up with a customer and you are also putting in some more equipment. If you could just repeat that. I was unable to properly hear. Okay. I didn't mention any sign off with customers. Okay. I was just sharing that we have secured some new technologies to add higher level services for large molecules. The technologies are currently under installation, and we will be able to commercialize those services from Q2 onwards. Understood. Okay. In the answer to an earlier participant's question. How are you looking at FY 2024, given you mentioned that capacities are constrained. This year I think you grew by around 15%. Something similar you think you can achieve despite capacity constraints or this year will be more like a consolidation year as new capacity comes online? Capacities are severely constrained on the pharma side. The other business units do not have that kind of constraint. Pharma still we continue to compress ourselves more. Hopefully we will be able to manage until the new facility is opened up for occupation by Q4 of this year. Right. On the NSL, you mentioned that the volumes have grown in the last three months. I mean, would you also know that, I mean, what kind... Is there a seasonality in this in the sense that the last quarter is always good, or is there no seasonality and you are adjusting for that and still the volumes are good? Any comments on that? There are seasonalities in our, you know, various services. They tend to not all come in the same quarter. More or less there is an evenness inherently built into the quarters. No, actually, what I was wanting to ask was that in the NSL specifically, you've seen a jump in your volumes in the last three months. You said the last three months were better than the first six. I was just wanting to ask, is there any seasonality there which is driving the volume or your share is going up irrespective of that seasonality? Is what my question was. Q4 there will be a seasonality impact, because last year's Q4 also we saw that. Got it. Fine. That's all from my side, ma'am. Thank you very much and all the best for the coming year. Thank you. Thank you. Ladies and gentlemen, due to paucity of time, we have reached to the end of the question and answer session. I now hand the conference over to Vimta Labs management for closing remarks. Thank you, everyone. Thank you. On behalf of Systematix Institutional Equities, that concludes this conference. Thank you for joining us and you may now disconnect your lines.