Ladies and gentlemen, good day, and welcome to Vimta Labs Limited Q1 FY2024 earnings conference call, hosted by Systematix 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 Systematix Institutional Equities. Thank you, and over to you, sir. Thanks, Herman. Good morning, everyone. On behalf of Systematix Institutional Equities, we welcome you to the Q1 FY2024 earnings call of Vimta Labs Limited. We thank the Vimta Labs management for giving us an opportunity to host the call. Today, from the Vimta management team, we have with us Ms. Harita Vasireddi, Managing Director, Mr. Satya Sreenivas Neerukonda, Executive Director, Mr. Narahari Naidu, Chief Financial Officer, and Ms. Sujani Vasireddi, Company Secretary. I'll now hand over the call to the company management for their opening remarks. Thank you, Vishal. Good morning, appreciate all those who have joined us now on the FY2024 1st quarter earnings call. We are pleased to share the quarter's update with you. Before we delve into the updates, let me take you through the general economy and the industry landscape. The global economy appears to be stabilizing and turning the corner, yet inflation remains still a pressing concern. While the U.S. economy seems to be moving towards a soft landing, the situation in Europe remains critical, which is impacting the clinical research industry to some extent. Closer to home, the slower growth of the Chinese economy poses potential implications for the global economy. However, there are some reliefs on the cost side, with supply chain hurdles easing. Within the testing, inspection, and certification industry, the trends have been working in our favor, contributing to positive results for the quarter. Stringent government regulations in testing worldwide have driven strong demand in the testing, inspection, and certification markets. In the Indian market, the demand across this segment remains robust. However, during the quarter, the food segment was impacted to some extent due to the cyclone we had in Gujarat, which hit the coastline and disrupted shipping traffic in the Indian Ocean. Operations at ports were also suspended for a little while for some time, till the situation improved. That kind of impacted our revenues in the food testing. Coming to the quarter updates, our total income for the quarter stood at INR 841 million, which is 5.1% growth on year-on-year basis. We witnessed growth in all our pharma services. The food business, however, was impacted, like I said, by the cyclone. Our electrical and electronics services also, these are nice upward slope. Likewise, in the environment testing also. Diagnostics remained stable. It is worth noting that Q1 is typically a slightly weaker quarter for us and especially for food as well. The impact got compounded because of the cyclone, which contributed to further slower growth in food testing than we initially anticipated. I will let our CFO discuss the financials in detail in his commentary. On a positive note, our CapEx plan for the life sciences facility is progressing swiftly, and we are confident of completing the same by end of this year. Once operational, this facility will enhance our capacities in the pharma division, which is currently constrained. This in turn will drive growth in the upcoming years. Our estimated CapEx for the year is around INR 90 crore, part of which will be allocated towards the building construction, while the rest we will utilize for equipment replacement, upgradation, and any new technology investment. To summarize, the demand environment remains strong, and I'm confident that we will see good sequential as well as year-on-year growth in the coming quarters. With this, I would like to conclude here my opening comments and invite our CFO, Narahari, to discuss the financial highlights for the quarter. Over to you. Thank you, Ms. Harita. Very good morning to all. Thank you all for joining us for our Q1 FY2024 earnings conference call. I would like to walk you through the consolidated financial performance of Vimta Labs for the quarter ended April, June 2023, after which we can open the floor for question and answers. I'll start with the consolidated financial highlights for the quarter. Total income from Q1 FY2024 stood at INR 841 million, as compared to INR 800 million in Q1 FY23, up 5.1% YOY basis. EBITDA remains strong and with an EBITDA of INR 252 million in Q1 FY2024, as compared to INR 248 million in Q1 FY23. Growth of 42% on a YOY basis. Lower EBITDA growth was on account of higher employee costs, INR 30 million, which was a result of yearly increment cycle. EBITDA margins for the quarter stood at 30%. Profit for tax in Q1 FY2024 stood at INR 122 million, as compared to INR 120 million in Q1 FY23, a growth of 1.2% on YOY basis. Lower tax growth was owing to higher depreciation expense in the quarter, which was from capitalization, which we made during Q4 and Q1. Tax margin for the quarter stood at 14.5%. On balance sheet side, we continue to have net debt free balance sheet, with cash and cash equivalents, including other bank deposits, of INR 387 million. Our total debt stands at INR 137 million as of 30 June 2023. Working capital during the quarter remained stable. We incurred CapEx cost of INR 280 million during the quarter. While our CapEx projections for the full year would be around INR 900 million, which includes our project CapEx of close to INR 600 million. Before I conclude, I would like to highlight that we continue to repay debt, and our total debt as of June 30th 2023 is at INR 1.7 million, resulting in a very healthy debt, debt-to-equity ratio of 0.05. With that, we can now open the floor for Q&A. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star one on the 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. Anyone who wish to ask a question may please press star one at this time. The 1st question is from the line of Kunal Desai from Turtle Capital. Please go ahead. Hi, good morning, ma'am. My 1st question is that, you talked about disruption... Pardon me, your audio is not very clear. Please use the handset mode. Hello. Yes, go ahead, please. Yeah. Ma'am, my 1st question is, you talked about disruption on the food side because of the cyclone. Any way you can quantify that number, you know, either in terms of revenue or number of days of this, you know, disruption or number of tests, whichever thing? Unfortunately, I won't be able to do that, although we have that information because of the confidentiality in this kind of information. That's an understanding we have with our partners. Okay. Okay. Is it safe to say that had it not been there, we would have grown by 5-15% YOY basis? The slight step that you see would have actually been much, much better, for sure. Okay. Okay, got it. 2nd question, ma'am, is, you know, I think in the AGM, we talked about that, you know, we reaffirmed our guidance of doing INR 500 crore+ in FY25-FY26, and also with some improved margins. If we want to achieve those numbers, you know, we need to grow at a 15%-18%. By, for the rest of the year, you know, we need to grow at a substantially higher rate, maybe INR 90 crore, kind of a quarter. Are we positioned for that? Our efforts are definitely on for that. Coming to the INR 500 crore target that we have, we are very confident that we are on the mark. Typically, like I said, Q1 is slightly challenging, but then Q2 onwards, it, it gets better. Q3, much better, and then Q4 is, you know, even better. That's how it is. Yeah. Okay. ma'am, any update from the NFL scale-up, you know, you know, how it is progressing, quarter-on-quarter? you know, do you see any uptick, with respect to your, you know, own projections, where you are? Some, some color on that? We are pursuing continuously with the governing body. Efforts are on, but we are yet to see a very good outcome out of those efforts. We will continue. Okay. Even without the, that scale of, of the required level, we are confident of doing INR 500 crore? Yes. Yes. Yes. Okay. Okay. Okay, essentially then the push is coming from the pharma side, right? That is what will be the driving the growth for us to take to INR 500 crore. Food also, and because we are not entirely dependent only on the NFL revenues, we have our other, core food testing business, which is, growing healthy year on year. Got it. I'm, I have more question to come back. Thank you. The next question is from the line of Aman Investments. Please go ahead. Yeah, sure. Thank you much for having my question. Am I audible, sir? Yes, please go ahead. Okay. Now I have three questions. 1st, regarding our testing business, as you have mentioned in our investor call, we are getting a good traction from TIC sector. Are we associated with any standard boards in India for the testing of alternatives, energy segment, liquids, oil and gas, pharmaceuticals? We are not associated with any boards. Okay, not associated. Okay, ma'am. Just a follow-up, are we seeing... How is the traction being seen in this quarter, ma'am, compared to the previous quarter? We are seeing better traction. Pharma also we anticipate better traction. Food may continue to have that counter effect because there is still lot of rains in the country, and that does impact some food testing business. Yeah. Okay, ma'am, just a follow-up. I think it might not affect our business, but just wanted to know your view on it. As government is also removing the subsidies on the fertilizer segment, and the prices are also normalizing as compared to the last year, and also the government is planning to lift the embargo of the fertilizer. Do you see any downfall in the testing samples have been affected and have reduced volumes and profitability going forward? I, I don't anticipate that impacting us directly. The inflation aspect could, have some impact, impact in general, but, not on us directly. Okay, ma'am. Are our costs also normalizing as the bank rates are... I think bank rates have come to a level where they are going to gradually reduce. Are our costs also, like employee costs, we have seen an improvement in that. Can you, will it normalize going forward to achieve this INR 500 crore turnover and our 30% EBITDA margins? Employee costs have gone up significantly after COVID, but I'm hoping that they would stabilize around this level. Coming to bank rates, we actually in fact enjoy pretty good rates from the bankers. What is your average, average interest rate, ma'am? Are we allowed to share that, Narain? Yeah, so that's another problem. Our average interest rate is around 9%, currently, but we are still working to optimize- Also just to confirm, what is the increment in employee cost you are seeing? Because you said it's a yearly cycle, but the cycle is going on. What was the% of increment of those costs? Percentage of increment, we are on par with the industry. The industry has seen around 7%-8%. Ours is also around that same level. Okay. Ma'am, just talking about the business part, last investor call you had mentioned, we are seeing our HLM model in diagnostic business. We are planning to reach out to other cities as well. Still it's in the maturing stage, as mentioned previously. What do you see the traction going forward? Are we seeing the diagnostics to be in every part of the India cities like branching out except Hyderabad and Telangana? We are pushing forward on our strategy to have more HLMs and LOMs. That continues for us. Our direct presence as Azenta, that's something that we are not pursuing. Okay, ma'am. Any, any range, because it might not be exact figure which you would say with me, but any range of revenues are we targeting going forward in the diagnostic business? Because it's a 30, 25%-30% of our total profitability. No, I won't be able to share that because we don't give out segmentalized revenue. Okay, ma'am. Just wanted to understand your thoughts on this business. Like you had said, large molecules, which are turning out to be a good one. Are you seeing a separate business, or are you seeing some businesses revolving around these large molecules, which you are particularly interested in? Yes, all the top- Can you just comment on it little elaboration, so we can understand what type of business model will be built around it? The business model will be similar to what we have around the small molecules, wherein we cater right from preclinical services to clinical research services. Of course, the entire analytical component, end-to-end, that is what we support on. For large molecules also, it will be the same services, same services, pre-clinical to clinical research. Ma'am, okay. Is it directly related to pharma, or will it be in the research and development kind of thing? It's pharma only. It's pharma only. Okay, ma'am. Are we tied up with someone with the research team? If you cannot name them, but can you just tell me the overall revenue pool and the profitability going forward in these sectors? Our profitability is much better for the large molecule. Okay. I won't be able to give specific numbers there. Okay, ma'am. Any range which we are targeting, because INR 500 crore requires us to do INR 120 crore-INR 125 crore, quarterly. Any numbers which you can quantify, sir, with our seeing EBITDA margins, will be able to reach those numbers. EBITDA margins, as I had explained before, with the fill-up in economy, we want to try and better them by at least, you know, 200 basis points, while as we reach towards our 500 mark. ... Thank you. Aman, may I request you to join the queue for any follow-up, as we have several participants waiting for their turn? Thank you. The next question is from the line of Omkar Kamtekar from Bonanza Portfolio. Please go ahead. Uh, uh, There's a disturbance in your line. Your line is not very clear. Okay. Hello, am I, am I audible now? Yeah. Okay. Wanted to know, what is the cash flow from operations, the, the number for the cash flow from operations, if it, if it can be shared? Yeah. During the quarter, our cash generation is close to INR 17 crores and is part of operations. Okay. The INR 90 crore CapEx that we are going to incur during the year, the CapEx incurred during Q1 of INR 21.8 crore. The INR 90 crore was... This is part of the INR 90 crore, or the INR 90 crore is going to be over and above from the new plant that we are incurring? This INR 90 crore will be including of our project CapEx, which we had earlier mentioned, with a budget of INR 60 crore. The INR 90 crore includes INR 50 crore, what we are estimating we have to incur for the project building, and INR 40, 45 crore would be for general CapEx funding. Okay, okay. With respect to the debt reduction, so we reduced the debt by approximately INR 1.3 crore. We have a substantial amount of cash, so wanted to understand, though the debt equity and everything is very much, very much under, you know, control, why have we not accelerated the reduce the debt when we do have the cash and, you know, the results in, in place? Just want to understand the reason behind that. Yes. Our plan is to fund the CapEx out of our internal accruals. The existing cash balance would be largely used to fund our, you know, project CapEx. Also we are estimating good amount of cash accrual through the period of next nine months. Whatever the cash surplus which we have, the majority would go into project funding. Okay, okay. Finally, would, will it possible for you to give, what portion of the total revenue come from domestic, from India and from exports? I just want to understand if that, the revenue breakup geographically can be given. How much export revenue are we generating or, domestic revenues? Our mix typically is in the range of 25%-30%, so that that is continued during quarter one as well. 25% is exports, you are saying? Yeah. Exports are 25%-30%. That has been the trend over the past few financial years, and we have seen it continued in Q1 as well. Okay. are we planning to increase that share or, or are we satisfied, at the moment with the current situation there? We want to definitely grow exports. That's our endeavor. Okay. The margin profile of the export business, how are they, and are they better than the domestic businesses? Better. Better. Okay, okay. Thank you. I'll get back into this. Thank you. The next question is from the line of V.P. Rajesh from Mania Capital. Also, participants, please enter star one to ask a question. Hi. Thanks for the opportunity. Just a few questions, some of them have been already answered. In terms of the vertical split for the revenue this quarter, if you can give some color as to how much came from pharma/life sciences versus foods versus diagnostics and any other? We don't provide the split of the revenue. It's treated as one segment. Okay. Any commentary on the electronics business, how is that coming along? As I mentioned in my opening remarks, we see a nice upward slope in electronics testing, especially the EMI, EMC testing. Okay. ma'am, this, semiconductors, talks that are going on about, India building a fab, et cetera, how do you think about that opportunity? Is it going to increase our business on the electronic side or, it's too early to talk about that? Definitely, they, they would be one of our customers. Okay. As the EMS businesses are becoming more public here in India, and that particular business is growing, so that should also be positive side. Is that correct? Sorry, I didn't understand. What was that? EMS, is it? Yeah, electronic manufacturing segment, which is, those kind of businesses are coming up now quite a bit. At least, a few of them got public in the last 12 months. I was just curious, you know, are, are those type of companies also our customer or potential customers? Yes, all the electronic goods, whether it be a home appliance or an industrial appliance or a telecom product or a Wi-Fi product or a different component, all these products would need EMI, EMC testing. Okay. Finally, for this year, what kind of growth expectations you have over the last year? For the whole company, you mean? Yes, for the whole company. I'm just trying to get a sense that given you talked about how, the Q1 was affected by one-offs, you know, I'm just curious if that metric has changed for us, or are you still thinking of the growth, as you were before this Q1? We are firm on our intent to maintain the growth rate. Given the smaller capacity constraints that we have, I won't say actually small, they're significant. This year we may not be able to push much more, but next year, you know, onwards, where we have more capacity, we are thinking the growth will be at a much higher pace. Okay. Is it fair to conclude from your comments that the food business that you said could be perhaps a little weak in Q2 as well, will pick up in Q3 and Q4, or how should one think about the uptake on that business? Yeah. Q2, so far, we have crossed the month of July. July has not seen any upturn in food. That was the reason I made that comment. Right. Is it seasonally weak as well, or this is also an aberration? That's what I'm trying to understand. Yeah. Seasonally also, it is a little weak, but we see it more weaker this time. We think it's largely because of the disruptions that have been caused by rains in many parts of India. Got it. Got it. Okay, thank you so much, and, I'll get back in the queue if I have more questions. Thanks a lot. You're welcome. Thank you. A reminder to our participants, please press, and 1 to ask a question. The next question is on the line of Pratik Kothari from Unique Asset Management. Please go ahead. Hi, good afternoon. ma'am, on this question on food again, so, is it that because of this disruption, the samples which are picked out to test have reduced or let go of, in the timing? We don't know exactly what the reasons could be, but the inflow of samples, you know, into NFL and even from our other routine customers is typically low in Q1 because we are still new in their budget. Samples come out only maybe around Q2. In Q2 also, we are yet to see all that firing up, you know, from different customers. Hopefully things will change in the next couple of months. So you're seeing a slowdown in I mean, samples or shipments at the port level itself or just to us? Both, both. We see this in both places. All right. If you can just talk about broadly the demand environment that you are seeing currently in, pharma and diagnostic business? Demand is very strong in pharma. Diagnostics also, it's growing quite nicely. It's quite disrupted at the moment, a lot of players. So in both segments, there are ample opportunities. Pharma, we are more upbeat about the opportunities that we have because they are a very good match for our capabilities. Our expansions are also pharma-focused. We see good opportunities coming for clinical research as well as preclinical, and a lot of analytical work also coming our way. Of course, there is a good number of competition also. There, there is a counter effect from competition as well. Overall, I think we have enjoyed a very good position in the market. We are well-known, reputed, respected in the pharma industry. We are a very preferred choice CRO for many companies. We enjoy strong partnerships in this industry. The demand is good, and we are also upbeat about our own ability to take advantage of such a demand in pharma. Right. The short-term capacity would be a constraint on this demand upbeat that you're seeing. At least from next year onwards, that should be okay. Yeah. The constraints are not 360 degrees. There are some avenues where we are still able to have ample capacities, you know, but there are some important segments where the capacities are quite constrained. Both situations exist for us. Correct. Just a reclarification of the comment earlier, except food, our growth still was double digits? From Q on Q? Yeah, from quarter one of last year to this quarter, year-on-year. Yes, yes, yes. The growth definitely has been in double digits. Right. Thank you, and all the best, ma'am. Thank you. Thank you. The next question is on the line of Dhanesh Desai from Circle Capital. Please go ahead. Hi, ma'am. Thanks for the opportunity again. Ma'am, just one clarification. You talked about some capacity constraints, but a very strong demand environment. Is it one of the likely scenarios that, you know, we may not be able to get the business when the demand is strong, the next year when capacity comes back because, you know, the demand environment might have changed? Or is it that the project that we are kind of bidding for or talking about with customers are of the nature where actual certification of that into revenue will happen next year, and we'll be able to utilize the capacity? Can you give some color on that? ... Demand, I don't think will go up and down. I think it is continuously growing. We have a temporary constraint, which we will be addressing. By Q4 of this year, we will have those additional capacities. I want to reiterate that there is not a constraint everywhere. There are constraints in some services, but then there are also services which we have ample capacities to push. We will be just fine-tuning the way we work on our pipelines. Okay. Okay. Also, can you give some idea about the, the status of the CapEx? I think it was to be operationalized in Q4, at the end of Q3, and Q4. After you operationalize, do you need any certification, or any kind of, regulatory clearances, and how long it will take for us to actually start utilizing that facility? It's in the same campus where we have our current pharma infrastructure. We won't be needing any additional approvals from anyone. There will be a lot of validation activities that will go on, you know, of the infrastructure as well as the equipment that we will be, you know, shifting from one building to another. There'll be a lot of time that goes into validations. That could take two to three months. Okay. actual utilization will come in, fiscal 5? Yeah. We want to see a little bit of it, coming in Q1 itself, hopefully, but definitely by next year. Okay. Got it. Thanks. That's it for me. Thank you. The next question is from Alisha Mahajan from Envision Capital. Please go ahead. Hi, ma'am. Good morning. Thank you for the opportunity. I just wanted to understand this capacity increase of coming for the, for the pharma segment. Are we expecting it to come and see in Q3 or Q4, and then the validation of 2, 3 months? When is the capacity coming and then the validation? The capacity for at least, three dimensional. One is the space itself, and the 2nd one is the equipment for these people. What we are doing now is adding more space, because today we are completely maxed out on space. The space that we are building is almost double of what we have right now. It's not that we are going to use the whole space right away. We will be increasing the space as and when there is a demand for adding, you know, more work. That's when we'll add more people and more equipment. It's, it's not something that's like a switch that we will switch on once the building is available. It will be gradual, like before, but so far the constraint has been space, and this constraint will be removed once we have that new facility. Which space will be available from Q4? The space will be available from Q4. When we'll get in the equipment and the validation, that should take another two to 3 months after that? Yeah. Not everything will take two to 3 months, because we will be doing it in a phased manner. Got it. Then growth for the current year, on the Pharma side, like you mentioned earlier in the call, also, there is a slight capacity constraint. Even Q1 was impacted, Q2 also, because of excessive gains, currently is looking kind of slow. From your basis, how confident are we of achieving a double-digit growth, which will be, critically for achieving the revenue target of INR 500 crore? We are very confident. Could it be possible for you to give some color on what segment will it come from? Because you even have a slide in your presentation where you've given industry growth rates, and none of the segments seem to have a higher than 10, 11% growth rate, but we are talking of significantly higher growth rates. Any color on where are we expecting the growth to come from? The industry is very large, the numbers are massive, and even a small percentage there, there means a lot more opportunities for companies of our size. Pharma is going to drive the growth in addition to food. Food, we see, this as a temporary aberration. Late Q2 onwards, it should start being better. Pharma and food will continue to drive the growth. We also have environment and our electronics business, although they are not a big portion of our revenue pie, they'll also, you know, add to the growth. We are, at the moment, not concerned with the growth rate for this year. I'm very confident we can maintain what we saw in the previous years. Just one last question: Can we get a revenue breakup of how much comes from... environment? Unfortunately, I won't be able to share that because we present all our numbers under one segment only. Even something directionally or ballpark, just to get some sense. Ballpark is around 60% from pharma and 40% from non-pharma. That's helpful. Thank you. Welcome. Thank you. The next question is from the line of N.K. Reddy, as an individual investor. Please go ahead. Yeah. Hello, ma'am. Thanks for the opportunity. My question is regarding the some of the investment which has been done in the previous year, which has been not been successful. For example, investment in the MPD of- ... Audio is very low, and it's not clear to us. Hello, can you hear me now, okay? Yes. ... Yeah, ma'am, regarding the investments of JNPT of INR 10 crore and investment in EMI/EMC of INR 40 crore, we also set up this with co-coaches, both for the clinical diagnostics. Just want to understand what is the ramp-up in this, because we had an aspiration target of INR 500 crore by separate conditions. Coming 1st to the NFL, which is in JNPT, the return on investment is quite healthy despite the lower volumes that we are seeing currently. Even at this level, the lab is making a decent profit. Now, EMI/EMC is a new baby. It will take some time to mature, we expect to see a good ramp-up this year itself. Next year onwards, we might even have to add a little bit from the capacity side with respect to the chambers. The industry is also very upbeat, especially in Telangana. We see a lot of investments in this area. Also, that's actually a very good kind of environment for our services. Coming to the 3rd one on diagnostics, it's not at all capital-related investment. It's more on using some space and putting some people and dental equipment there. The investments are not significant. Yeah. With respect to, in, our wholly owned subsidiary, Impact Laboratories, which, which annual report says we reported a turnover of INR 56 crore, and we have been talking about this subsidiary for the past three years. Just want to, your view on this, and would you remember this? Yeah. Impact is doing well. We wanted to 1st bring the company to a stable state in terms of its customer base, and which it enjoys as of now. We haven't really pressed the company much in terms of revenues by including a lot of capital there. That we will do now. Gradually, I think we will start significantly in this year and then ramp up. So far, when we took over the company, we took over with some minimum assets, and we have been trying to ramp up the sales with the same assets. Now we have a little more grip on the operations and the market and stronger relationships within the market. We will be investing there and also pushing that organization for higher revenues. Yeah. Can I assume that this INR 50 crore, INR 10 crore from JNPT and this based on CapEx, CapEx investment for EMI/EMC and the acquisition costs for Impact are subpar utilization, or maybe not the ramp up as per our expectation? Impact and EMI/EMC are both, you know, new businesses for us. We think that they will take a few years to mature. The market is just building around us, and it will take a few years. Whenever Vimta has invested, it has invested with the foresight. It has been ahead of the curve. We going ahead of others, we try to, you know, establish our leadership position before a lot of competition enters the market, and that's our strategy even for EMI/EMC. We've got to have some patience with, you know, the return here, but we think this is, this can easily be scaled up to another INR 100 crore service of our just like, you know, our food and pharma. Yeah. In annual report, I also seen the some amount of advance we are receiving from customers. Just want to know what is the nature of the pharma advances, was it for pharma products or in a non-pharmaco, non-pharma? Ma'am, how do you want to take that, Narahari? Sorry, your question is not clear. Can you please repeat for me? In our annual report, there are some amount of advances we are receiving from customers to the tune of INR 54 crore. Just want to understand what you can ensure these advances and was it related to pharma products or non-pharma? Very few of the pharma products we work on advance basis. The advances we receive are largely pertaining to pharma. This is part of our cash generation during the quarter, which is part of the operating cash flow, and which will be investing whatever the cash accrual, as I mentioned earlier. We'll be using it to fund our, you know, project CapEx. If there is any surplus left over, then we'll be investing in other CapEx. Another question is regarding pricing for pharma products. In which specific projects are fee for services, number of person employment, time taken on those projects? The pricing is not fixed for us. I mean, it is very subjective. The pricing differs, the model differs, for each project for us. Yeah. Regarding this program, which has been some hyper growth phase in past few years, we have done this major projects by, prior to 2018. Just want to know if there are any intention of setting up any food labs for the scaling of this business? We don't intend to set up any more food labs, at least not in this year. Thank you, Mr. Reddy. I request you to join the queue for any follow-up. The next question is from the line of Omkar Kamtekar from Bonanza Portfolio. Please go ahead. Hello? Am I audible? Yes. Okay. A small upgrade with respect to the capacity utilization, can you give us, you know, a ballpark figure of the total overall capacity utilization blended level? I won't be able to give a specific answer on that, honestly. Okay. Yeah. Can you just give us a small elaboration on the China issue that you had mentioned in the opening remarks with respect to specifically the food and agricultural services? Because even a few of those, you know, populated companies who have good results or better results in the quarter, have had some impact of the dumping from the China, from the China products in the agricultural space. With respect to that, can you please give some, you know, understanding of how China can create an issue in that specific area? Our exports have remained quite stable. Exports have remained quite stable, and they are stable, I'm assuming, because of a stable demand from outside our country. What our fee is the testing fee. Depends on, you know, what is going out of the country in terms of the quantity of exports. Our fees won't get impacted if the demand for the exports remains stable. Okay. Okay. Finally, with respect to the CapEx flow, generally what I have seen, that approximately I think, if I'm, correct me if I'm wrong, it would take approximately three to four years for the entire CapEx of the new new plant to mature. We are looking at approximately at asset, a fixed asset turnover in the range of 1.7-2 times. When the entire when the project becomes completely online and it is working at full capacity, the new CapEx plan would somewhere return, would generate on its own INR 180 crore. The overall total revenue, say, three years period timeline, might exceed INR 600 crore-INR 700 crore. Would that, would be, would that be a fair assumption including the cost of the project? Mathematically, your numbers seem to be good, but we have to actually implement our strategies and see how that goes. Once we touch our INR 500 crores, our next step will be INR 1,000 crores, so we will be stepping up our efforts. Okay. Okay. Finally, on the margins, the margin that you had said that you, you require a 200 basis point increase in the margin over the next few years. That would be a best case scenario or a base case scenario? I think, given what we see now, that could be a possible case scenario. It's high basis. High possibility. Okay. Okay. Okay. I would like to clarify one thing here. Our CapEx to sales ratio is typically in the range of 1-1.1. Because you mentioned 1.7-1.8, which is on the higher side, just want to correct on that. Oh, sorry. I, I was looking at from the, you know, net blocks. I'm looking from a net block perspective. The net block tends to be INR 168 crore. From that, on a broad block- You might be computing, the INR 300 CapEx. Yes. yeah. 1 minus to 1.1 on a gross level, that makes more sense. I got the point. Thank you. Thank you. The next question is from Line of, from Aman Investments. Please go ahead. No, I hear you, sir. I think I'm audible now. Ma'am, just quick question and last, finally, I make a request. Ma'am, just wanted to understand, we recently added this patient segment also, like, where we'll be analyzing, we'll be having certain changes to your timeline solutions and those data, any data is running. Is it sector are you feeling that you have to run? Is it in the medicine sector, or is it in testing, or are you planning to take it out to other sectors, or are you going to be a, what do you say, a research organization for other companies to do their tests? The 1st part of your question was not audible to me. Ma'am, I, I, it's nothing, just quick question, and finally a request, which I'll make. I just wanted to understand the patient segment. As you rightly, as you pointed out in last conference call, you have developed a new patient or, what do you call this? changer, where you'll be analyzing patients, taking surveys, taking other details, and just using their data on certain things. Just wanted to understand, what is the vision of that development? I don't really understand. Maybe I'm not able to correlate what you're asking. Okay. I've made my point then. Next, I just wanted to understand, are, like, last in the conference call you mentioned, like, as one of our competitors that is purely on your business idea. Do you have any plans, any projections or possibility of it to be our vertical alignment? As of now, no. As of now, no. Okay, Ma'am. Ma'am, I also mentioned that you are doubling your capacity. Do you see any, or have you got any letter of interest or long-term contracts to just make these figures sustainable in future? We don't need anything like that. No, we have never depended on those things so far. Okay. Yeah. Okay, ma'am. In pharma, are you dependent on certain few countries, or is it diversified into government private sector? It's mostly private sector in foreign. It's mostly, it's mostly private sector. There's no government sector. There's no government. Are we planning to bring government on board, central state? No, no. No. Okay. I just wanted to understand the CapEx which we have planned for this year, because there is a huge, debate going around what will be the CapEx be done on the building land. Has the land already been purchased for the doubling the capacity or it's going to be purchased? It should be existing land that we have- Existing land. Yeah, absolutely. The building will be constructed for INR 30 odd crores on that. INR 60 crore. Okay, INR 60 crore will be constructed and will be doubling our capacity. Now, also just one request to make, can we have, if possible, with the, with the moderator, once you have the time, and certainly with the management for the exclusive judgment, because can we have an open forum for investors, which we are at least some two days or three days, where investors can actually come physically and see the complexities and also missionaries at least understand the business model, understand the opportunity which Vimta has. As you rightly pointed out last investor call, but during congregation and invest, Vimta is building its brand, which is more important nowadays, where brands have the same value. That we can get to know the legacy which HP has also built. Can we consider that as a request from all the investors? At least we are available. At least we can have an open forum where one or two days investors can physically come, and the management will also be willingly participating in the investor discussions. I'll actually make it better than that for you. Okay. Anytime. Yeah. Okay. We can come anytime. Okay. Sure, ma'am. Sure. Thank you. Thank you. Thank you. Ladies and gentlemen, that will be our last question for today. I now hand the conference back to the management for their closing remarks. Thank you, and over to you. Thank you all for participating in the call today. I appreciate all the good questions that you had. I also wish to place on record my thanks to Systematix and Vishal to you, and also our partner, VNY. Thank you. Thank you. Thank you, everyone. Thank you very much. Ladies and gentlemen, on behalf of Systematix Institutional Equities, that concludes today's call. Thank you all for joining us, and you may now disconnect your lines.