Ladies and gentlemen, good day and welcome to the Granules India Q3 FY 2021 earnings conference call hosted by Emkay Global Financial Services. As a reminder, all participant lines will be in listen only mode, and there will be an opportunity for you to ask questions at the end of today's presentation. 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 would now like to hand the conference over to Kunal Damecha of Emkay Global. Thank you, and over to you. Good evening, everyone. I would like to welcome the management and thank them for giving us this opportunity. We have with us today Mr. Krishna Prasad Chigurupati, Chairman and MD, Ms. Priyanka Chigurupati, Executive Director, GPI, and Mr. Sandip Neogi, Chief Financial Officer. I shall now hand over the call to Ms. Richa Singh from the investor relations team. Over to you, Richa. Thank you, Kunal. Before we proceed with this call today, I'll read out the safe harbor related to this conference call. Today's discussion may be forward-looking in nature based on management's current beliefs and expectations. It would be viewed in conjunction with the risks that the business faces, and it would lead to future results. With this, I would like to hand over call to Mr. Krishna Prasad, Chairman and Managing Director. Over to you, sir. Thank you, Richa. Good evening, ladies and gentlemen. I'm sure all of you agree that we now can see a little light at the end of the tunnel as the COVID vaccine rollout had started. We cannot relax as we are still only at the beginning of the end of the current crisis and have a long way to go. I wish that you and your families continue to stay safe. All of you would have seen the financials and the presentation on our website by now, and I do not think I should go into these details. Priyanka will present them briefly, and I will only dwell on the broad outlook and then we can spend more time on Q&A. I'm happy to inform all of you that we had a good Q3 and are on track as per our growth plans. During Q3, we had tremendous challenges with respect to supply chain disruptions and RM price increases. I compliment our team for having overcome these by their tremendous dedication and efforts. The aftereffects of the COVID crisis are getting more visible now, and as we go by, we foresee more logistic and supply chain disruptions. We are bracing ourselves to counter these and expect to overcome them as much as possible. There had been a negative impact on profitability on account of the disruption situation and also due to the withdrawal of the MEIS scheme. I would like to list out a few positive events since our last call. We had received the following important approvals. potassium chloride tablets equivalent to Klor-Con M. This is our first MUPS-based product approval for Hyderabad. Even though we had launched a few MUPS products from our U.S. facility in the past. The new block for MUPS will be ready only by Q4 of FY 2022, we had started manufacturing this product in one of the existing modules. Since the capacity of this module is small, we are building up enough inventory for launch, which we expect to happen in April of FY 2022. The addressable generic market for this product is $148 million. We are also expecting approval of another MUPS-based product during the current quarter, which will be launched by late FY 2022. Another product approval is dexmethylphenidate, equivalent to Focalin XR. This is also a MUPS-based controlled substance product for our U.S. facility. This is a C2 category and can only be manufactured in the U.S. At GPI, we already have commercialized a few MUPS-based C2 products, and this is a nice addition to our stable of such products. This was launched in the last week of March. Sorry. This was launched in December, last week of December and will ramp up in the current quarter. The addressable generic market for this is $180 million. Metformin ER, equivalent to Glumetza. This is a nice addition to our basket of metformin controlled release products. We already have the product in the U.S. in anticipation of approval and will launch it in February of 2021. The addressable generic market for this is $89 million. penicillamine capsules equivalent to Cuprimine. We are integrated in the product and make the API ourselves. This will be launched in the current quarter and the addressable generic market is $37 million. We now have 10 approved products which will be launched in a phased way. I would like to mention that Granules always focus on excellence at all stages of development and scale-ups and commercial operations. This had led us to leadership position in both cost and market share. As we enter Europe and other geographies with our own dossiers, which will be by the end of current Q4, we expect to get a good market share in these markets too. I'm happy to state that while the MUPS block construction and the API expansion at Vizag is progressing at a rapid pace and expected to be complete by Q4 of next fiscal, we anticipate the need for extra capacity to fuel our growth by FY 2023 or early 2024. To meet this anticipated demand, we have just acquired a new site at Genome Valley, Hyderabad, and plan to construct facilities for solid oral dosages and also a few other forms of formulations. We are also finalizing plans to build new blocks for a few dedicated APIs at Unit Five, our Vizag API facility. In the U.S., we have started building a new facility for additional capacity of solid oral tablets and another form of formulation, which will also become operational by Q1 of FY 2022. Most of the new approvals will be commercialized from there. Overall, it's an exciting time for all of us at Granules as we continue to resolve various challenges we face and at the same time expand our facilities and markets. Ladies and gentlemen, I now pass on the floor to Priyanka and look forward to the Q&A after that. Thank you. Good evening, ladies and gentlemen. I'm very happy to say that despite extremely challenging situations, we are happy to report that our yearly performance will show a significant growth over fiscal 2020. The third quarter revenues stood at INR 845 crore compared to INR 704 crore in Q3 FY 2020, an increase in 20% year-on-year. Sequentially, we saw a slight decrease in revenue from INR 858 crore in Q2 FY 2021 to INR 845 crore in Q3 FY 2021. A decrease of 1.6% mainly attributed to the delayed launches due to COVID, the non-availability of MEIS scheme in Q3 FY 2021, and also due to the inventory buildup for one of our key products in the U.S. that we are transitioning from a partner. We have been building up inventory to launch this product under the GPI label and will be launching this product starting April of FY 2022. I would like to point out that we managed to retain all the business that we had on this product. Continuity of supply is of key importance to us. We will have sufficient inventory levels built by March to enable a smooth launch at the end of March or early April. The year-on-year growth is in spite of not having the sales from this product this quarter. We launched about four products in the U.S. this past quarter and intentionally delayed the launch of four other products to ensure we build enough inventory ahead of the launch. We will be launching some of these products in Q4 FY 2021. The sales pickup as per business verticals and regions are presented in our investor presentation, which is available on the website. For the quarter, the growth margins moved from 50.7%-53.7% year-on-year due to increased volumes across all our business segments and also due to the new launches, but fell by 4.2% from 57.9%-53.7% sequentially, mainly due to higher raw material costs due to COVID, a change in product mix, and because of the removal of MEIS scheme. That said, with respect to the RM costs, we have begun to pass on the price increases to customers. This exercise will be ongoing. We're actively engaging with our key customers on the price increases, and we expect things to stabilize around Q1 of FY 2022. EBITDA for this quarter stood at INR 211.6 crores when compared to INR 163.2 crores in Q3 FY 2020, a growth of 29.7%. Quarter-on-quarter, our EBITDA declined 480 basis points, mainly due to the reduction of cost margins as attributed above. We had a healthy growth over the previous year, mainly due to an increase in capacities through operational efficiencies. In addition to this, our focus on our product rationalization based on profitability enabled us to achieve this growth. PAT for the quarter stood at INR 146.8 crores compared to INR 64 crores, a growth of 129.3%, while sequentially it dipped by about INR 17 crores over the Q2 FY 2021. The degrowth of PAT was primarily because of all the reasons mentioned above. We're committed to drive shareholder value, and profitability continues to remain our key focus along with cash conservation. We spent about INR 22 crores this quarter on R&D, which brings the total R&D spend to INR 64 crores this fiscal. We expect to make about four to five filings this year. Currently, we have a total of 45 filings, 35 approvals, and 25 launches. We are yet to launch about 10 products, out of which we launched about two to three products in this fiscal. We're expecting approval for one or two additional products this fiscal. In addition to the ANDAs for the U.S. market, we have filed two dossiers in Canada, including one this quarter, and have received approval for one product in Europe this quarter as well. We will be launching both the products at the end of this fiscal or in early Q1 FY 2022. In addition to developing ANDAs, we're constantly on the lookout to acquire ANDAs and dossiers that fit into our strategy. From the 35 we have received, two were from ANDAs that we have acquired. Our gross debt reduced from INR 861 crores in the previous quarter to INR 837 crores in the current quarter. We were able to maintain the net debt at INR 612 crores, while this was INR 613 crores in the previous quarter. Long-term borrowings went up due to euro fluctuations. Short-term borrowings went down by INR 42 crores due to efficient management of working capital in spite of build-up in inventory. The operational cash stood at INR 93 crores this quarter. Out of this, we spent INR 71 crores on CapEx, leaving us with a free cash flow of INR 22 crores. Our cash-to-cash cycle has increased from INR 104 crores in September 2020 to INR 115 crores in December 2020 due to increased inventory levels and a significant reduction in payables. At GPI, we have received approval for eight products until December. We have launched about seven products this year and three products this past quarter. We have a good market position on all the products and are looking to grow very responsibly. Despite significant COVID-related struggles, we continue to maintain service levels of over 99% with all our customers, and that reiterates our stance on continuity of supply. We stocked up heavily on finished dosages and raw materials, both at GPI and GIL, and this will enable us to maintain our service level going forward. At the facility in Chantilly, Virginia, which is a GPI facility, we had zero days off due to COVID and have had minimum number of cases. We continue to run at full capacity with minor adjustments made to working hours to ensure social distancing. Our commercial block will be ready at the end of this fiscal, and this will enable us to increase our capacity significantly. With only a few months to go this fiscal, we're gearing up for FY 2022. We're very excited for all the momentum we're preparing for and ensure to continue to do our best for all our stakeholders. With this, I would like to open the floor for questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the 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. The first question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead. Thanks for the opportunity. A couple of questions I have. In your opening comments, you referred to another MUPS-based product approved and to be launched in FY 2022. Could you help me with the number of players in the market size? Is it the same INR 180 million addressable market size product which you are referring to? Tushar, can you repeat your question? I think it's a little garbled. Can you go a little slow? Yeah. You were referring to one more MUPS-based product approved and launched in FY 2022. Yeah. Just would like to know the market size for this product and the number of players or rather competition for this one. The next approval. The market size for this is about INR 60 million generic, Tushar. Tushar, it's a generic. If you add normally the brand, it adds up to a bigger number. Right. This is only what the generic market is today. How many players already there in the market? Currently, there's about four players, Tushar. Got you. Secondly, just on this raw material price hike, been engaging with the customers. How much can this increase in the raw material cost be passed on to customers? Effectively, what should be the gross margin to consider going forward, considering that MEIS benefit is also not coming back anytime soon? Tushar, our past experience over the last few years shows that we were able to pass on almost a major part of our cost increases to the customers. However, this has always happened with a lag of a quarter in the past, we expect the same thing to happen now. Maybe three to four months, we should be able to pass on the increases. As of today, with the increase in raw material cost and all, we expect the gross margins to come down a bit. We cannot name any number because gross margin again is a mixture of so many factors, like product mix and also inventories and other things. Yeah, there will be a little impact. Going forward into next year, we foresee that things will be better off. Got you, sir. On a steady-state basis, maybe for FY 2022, would you like to call out for the gross margin number? Gross margin, let's not talk about it. In every call I was saying gross margin, let's not talk. Let's talk about EBITDA. The last time also, I was mentioning that EBITDA will be around 27 as we go forward. Last quarter was 30, which is a good number, we expect 27 as a normal number. Right now, going by the current situation, I would safely say it will be anywhere between 25 and 27. Gross margins, again, to answer your question, will be maybe around a little above 50. What is 50? 50, two, three, somewhere there as we go by. Thanks a lot, sir. Thank you. The next question is from the line of Ranveer Singh from Suniti Securities. Please go ahead. Yeah. Thanks for taking my question. Sir, on CapEx side, just wanted a clarity, the land you have purchased, how much you have invested in land and 400 CapEx is after this investment or including all this land plus construction, everything? The cost of the land is about INR 28 crores. Altogether, in the next three years, almost till 2025, the investment there we expect will be about INR 400 crores. Like I said, this will be for different blocks of solid orals and also other dosage forms. This is in addition to the CapEx you have guided earlier. Maybe this is for three years, but part of it would come in FY 2022 and FY 2023. What would be the total CapEx now for FY 2022 and 2023? Our CapEx guidance for 2021, 2022 put together was INR 350-INR 400 crores. Out of which, I think about INR 220 crores will be spent in this year and another INR 180 crores will go into next year. Maybe part of this INR 400 crores, about INR 30 crores or INR 40 crores will come into next year itself. Anywhere from INR 200-INR 250 crores will be for next year. The rest will be spill over into 2023 and 2024 and 2024 and 2025. Okay. Secondly, what you said that launch of potassium chloride has already happened, or it is going to happen? We are building up inventory since we have low capacity today. Till we have the new MUPS block operational, we will have to struggle with a little capacity problem. We will be launching this in April. We are building up inventory here and in the U.S., and typically any product, at least four months inventory is safe to launch a product. Okay, fine. Just so broadly, last quarter, that we engaged for a deal and somehow that couldn't take in. Are we still scouting for any such deal if this is attractive to you or we have left it altogether? Sir, I just feel like laughing. I've been denying this on media many times. Even today, I stopped saying no comments. Now I started vehemently denying this. There is no deal now or in the near long future also. Okay. That's all from my side, sir. Thank you. Thank you. Thank you. The next question is from the line of Ashwini Agarwal from Ashmore Investment. Please go ahead. Hi, good evening, team. Pretty good numbers in a difficult scenario. Couple of questions. You spoke about container availability and shipping bottlenecks. Do you think there's a loss of revenue embedded in the Q3 revenue of INR 844 crores? Did you manage to get everything out through airlifts or through other arrangements? Look, there was some loss, Ashwini, those we made up something like you said, by air freight. Yes, there was a certain loss, but more than the loss of sales, there was also disruptions in raw material, which led to stoppage of productions. Again, which would have resulted in loss of sales also. If the disruptions were not there, definitely we could have done better. Not only in terms of top line, in margin percentage also, because this air freight and extra freight costs have eaten into our profitability. Right. How do you see these factors operating now, both on availability of containers, freight, as well as raw material availability? Have you managed to kind of get into a rhythm that will keep you at normal operations through this quarter, the current quarter? We are able to manage outgoing consignments better nowadays. We did get a good grip on that. Of course, we cannot control the freight cost, but definitely schedules are in a better shape. However, incoming materials are having a big issue. Some of the acids, like acetic acid and other things, worldwide, there's a little disruption, not only in China and also in the Western world. We see some disruptions there and freight costs also going up from China, especially. No containers are available. Normally, it used to take about 18 days for sailing from China to here, Shanghai to here, to Chennai. Now it's taking up to 45 days. It's also leading to us stocking up more inventory. Today we don't have a choice of stocking because the material itself is not coming in. We see some disruptions going forward, but we can definitely manage this. Definitely, we should be able to maintain these levels of revenues and profitability. And the- However, our GPI is very secure. GPI is not suffering from any issues with logistics and supply chain. Okay. The increase in shipping rates from India, that would have caused some compression of margins, or is that something that you are able to recover from customers? We try to recover as much as possible, Ashwini, but definitely there's a compression of margins, which we have seen in this quarter already. The same thing, I think, will continue into next quarter also. It can't get worse than this, that much I can tell you. Okay. Last question from my side. In one of your slides, you speak about a one-time product loss, roughly INR 10 crores. Could you help us understand what this is all about? Yeah. Actually, we were in advanced discussions with an innovator company for supply of a particular API. In anticipation of signing the contract, we had completed validations of this product. In the process, we produced a sizable quantity of the product. Unfortunately, in the last minute, the contract could not materialize, and we had to write off the material. This was a calculated business risk, which is truly one-off. We don't expect any such thing to happen in future again. Okay. No, that's great. Sir, thank you so much. Wish you the best. Thank you, Ashwini. Thank you. The next question is from the line of Harith Ahamed from Spark Capital. Please go ahead. Hi. Thanks for taking my question. This stimulus money of INR 13 crores, which is part of other income, is it strictly a one-time thing, or can it recur for one or two more quarters, or is it all included in this quarter's other income? No, this is a one-time thing, Harith. Yeah. Sir, looking at your R&D spends for the year, around INR 65 crores, then we'll end the year at maybe INR 85-90 crores. This is a bit lower or maybe significantly lower versus what we used to spend in FY 2017 and 2018. Should we look at R&D spends going up to earlier levels? If you could help us understand why these spends have come down in recent years, especially this year. This year, a lot of our R&D spend has come down because of, lack of a better reason, the unavailability of people because of COVID. Going forward, we will spend at least INR 150 crores, if not more. Whatever filings that we haven't been able to do this year will be moved on to next year. Next year you can expect about 10 to 15 filings coming from GIL and GPI put together. On the R&D expected spend, will it significantly increase from this year's number? Sorry, can you repeat that question? The R&D spend for next year, is there a number that you can guide us towards? We're looking at INR 150, again, if things progress the way we expect them to, we're setting up the teams to make sure that it does happen that way. I think it will go a little higher than 150, a minimum of INR 150 will be spent next year. All right. Thanks. That's all from my side. Thank you, Harith. Thank you. The next question is from the line of Darshit Shah from Nirvana Capital. Please go ahead. Mr. Darshit Shah, your line is in talk mode. Kindly go ahead with your question. Yeah. Thanks for taking my question. Mr. Shah, if you can be closer to the handset, please. Your voice is not audible. Yeah, sure. Sir, on the CapEx side, can you give some more clarity? If I understand, on the MUPS unit, we are spending INR 240 crores. On this greenfield project for eight finished doses, we are spending INR 400 crores. On the multi-API project, how much are we spending or importing? What has been spent out of this three CapEx that we are planning? If you can give some more clarity. Yeah, it's like this, Darshit. It's 240 plus 90, which is about 330. Regular CapEx of about INR 50 crores-INR 70 crores. Which is INR 400 crores. Another INR 400 crores. INR 800 crores, which will take us till end of FY 2025. Okay. This INR 800 crores, and out of this, multi-API and MUPS will be ready by the end of next year. By Q4 of 2022. Yeah. The MUPS will be ready by the end of Hello? Hello? Members of the management- Hey, Darshit. Yeah, sir. Sorry, I was unable to hear Priyanka. I was just saying that the Unit Five API facility will be ready by June, July of this year, and the MUPS- Calendar year. This calendar year. By December this calendar year, the MUPS block will be ready. It's not next year. Oh, great. Sir, on the earlier guidance which we had put out, like 70% PAT growth this year and probably 30% over the base of FY 2021 next year, do we still stand by that? Darshit, I think I would be a little cautious here and revise it a little bit. Instead of 70, I would say between 60%-70% for this year. Next year onwards, it's 25%-30%. Sure. Thank you, sir. Yes. Thank you. A reminder to the participants, anyone who wishes to ask a question may press star and one at this time. The next question is from the line of C. Srihari from PCS Securities. Please go ahead. Yeah, thanks for the opportunity. Primarily, I was interested in knowing the pricing scenario, mainly for paracetamol and metformin. Can you please repeat what you're saying? You're really muffled. We can't hear what you're saying. Yeah. Is it clear now? No, not clear. Sir, if you can come closer to the handset, please. I'm pretty clear. Yeah. Basically, I wanted to know the pricing scenario for paracetamol and metformin. For the latter, in particular, if you can give some long-term outlook, because Thank you. The next question is from the line of Chintan Shah from Centrum Broking. Please go ahead. Thanks for taking my question. Just want to understand, sir, how is the scenario presently from an API perspective. You also mentioned about a product on a development side, which was a one-time loss that you have booked. If you could give us a little more strategy-wise color in terms of how the inquiries are coming and how is our position on the CRAMS side and all, if you are thinking of developing something. The second question was, you have mentioned about strategic partnership to boost your own products in terms of your strategy slide. If you could elaborate more on that. I am again so sorry. I think there's some problem. Can you increase the volume here then, please? Can you come back in short questions, please, so it'll be easier for us to understand. Okay. Sir, you talked of a product, which you said as a one-time loss. I was just trying to understand if we could understand how is the query or strategy around these kind of products from a market or from a perspective, overall strategy. Are we exploring these sides? What is our positioning here? If you can please. Let me answer this first. This actually, contract manufacturing or CRAMS is not in our strategy today. However, we took this as an opportunistic product, and we tried to get in, and we were quite successful in the development of the product. However, whatever reasons I don't want to go into, the contract could not go through. This is not part of our strategy going forward. Our strategy is to continue filing of products, high volume products and/or complex products and continue to market them ourselves and concentrate mostly on finished dosages. Be integrated all the way backwards as much as possible in as many products as possible. Also to expand into other geographies like we are doing right now into Europe, Canada and Australia and South Africa. Does that answer your question? Yes, sir. Yes, that answers. The second part of the question is you have referred to strategic partnerships in your R&D strategy slide. If you could elaborate more on that. See, I'll take that question. With strategic relationships, while we always, especially now, while every company is trying to be as self-dependent as it can, honestly, no company can be extremely self-dependent, especially if you look at the financial consequences. The goal of our company is to be as strong as we can be in the select number of molecules that we choose. For that, there is a certain amount of integration that you have to work on. By integration, you have to do as much backward integration as possible, even up to, say, a chemical, for example. We're not in the chemical manufacturing area. That's when we look at multiple players, and we look at their sourcing and what their strategic advantage is, and then we tie up with them to work with us and grow with us. That's how we see our future. Of course, wherever we can, we will have our own intermediates, KSMs and APIs. If a company is already well established in that specific KSM or intermediate, we like to work with them and tie up with them on some levels. That's what the slide meant by on strategic relationships. Thanks, Priyanka, for that. If you could help us understand the slight caution on the money management earlier provided guidance that you referred to. Could you help us understand why that slight caution is coming? Is it largely to do with the environment, or if you could elaborate? I think the answer in that is that everybody is unsure about what tomorrow holds. The geopolitical situations are changing so much that we are unaware of what tomorrow could hold. Because of that, we are a little bit conservative now. That's one thing, and like I mentioned in my earlier remarks, we intentionally delayed the launch of a few products. Again, these are all because we wanted to build up enough quantities of inventory, and that in itself has resulted in some lower numbers. That's primarily the reason. At the end of the day, it's all related to COVID. While we're working around it, we do want to be a little conservative at this point. Okay. Priyanka, if I could squeeze in a last one, if you'd allow. Please go ahead. Yeah. I just wanted your thoughts on the metformin market presently in the U.S., and how is our positioning there? Again, sorry, I'm not going to get into any numbers because of competitive reasons, but I will tell you that we have a very strong position on metformin. We have had it, we will have it, and we will continue to have it going forward. Okay. Thank you so much. Thank you. The next question is from the line of Abdulkader Puranwala from Anand Rathi. Please go ahead. Yeah. Hi. Thank you for the opportunity. My first question is in relation to the gross margin. I refer to the slide number nine of your presentation, wherein it's mentioned that on an adjusted basis, the gross margin has just a slight decline of close to 40 basis points. Could you please highlight that how exactly has the raw material pricing been in this quarter, and what was the entire impact? Because, just on the basis of adjusted numbers, the dip because of this raw material pricing doesn't look that very significant. Sorry, are you asking us how raw material pricing impacted the gross margin? Yes, that's correct. We have to quantify the raw material pricing. Sure. If I understood your question, you are saying that since we are seeing a normalized kind of a percentage in explaining one-off items, why we are conservatively saying that the impact of these issues are getting seen by us, right? That's the question. No. I was just asking about the quantification of what would have been raw material pricing, say, in Q2 vis-à-vis Q3. Or was it Q2 where exactly, the higher raw material pricing had started impacting the margin? That was what my question was. Yeah. It will be very marginal. It will not be very significant. The point is the impact will be felt in the gross margin. See, here also point times percent is almost 1%. 1% is having some impact. That's what we're trying to say. Understood, sir. My next question is with regards to the CapEx plan. For the MUPS facility as well as for the new plant at the Genome Valley, what is the kind of asset turn which we would be looking out for these facilities and what could be the ideal timeframe by which we could get the peak utilization? Sir, can you repeat the first half of your question? Yeah. My question was pertaining to the CapEx plan that is at both at the MUPS unit as well as the new plant at the Genome Valley. I wanted to know what could be the asset turn of these new CapEx what is coming up and what could be the timeframe, again, to achieve the same? It is a little difficult to explain the asset turns for the new facility at Genome Valley because it is still under planning. We are also looking at different dosage forms, like I told you. It is very preliminary. However, on the MUPS block, the asset turns will be much higher than what we are doing today, but that will happen after year two or three. Definitely that is going to have a better asset turn and also that MUPS block will have a better return on investment also. Sure, sir. Thank you for answering my question. Is from the line of Ranjan Jain from Nirmal Bang. Please go ahead. Thank you for the opportunity. Jain, if you can speak closer to the handset, please. Your voice is not audible. Is it better? Yes, ma'am. Thank you. Thank you for the opportunity and congratulations to the management team. Sir, rest of the questions have been answered. I just wanted one-two clarifications. One is that you have said that because of the freight disruptions led to the loss of sales. Is it possible for you to quantify how much that is? Is it the permanent loss or it is just delayed to the next quarter? It's not permanent loss at all, and we cannot quantify the loss of sales, but it was a still loss of production and resulted in loss of sales that the chairman has mentioned. Some of the, we were able to overcome by air freighting. Yeah, I would say somewhere, it's a little difficult to quantify. Maybe we could do the calculations and get back to you later on. No problem. Thank you. Sir, just one clarification. In one of the answers to one of the participants, you have said that, sorry, I missed that point. You said that 60%-70% in FY 2021 and 25%-30% in FY 2022. What was this regarding, sir? This was the bottom line growth. Okay. Thank you. Thank you. The next question is from the line of Charulata Gadani from Dalal & Broacha. Please go ahead. Yeah. My question pertains to in the U.S., what is the proportion of RX and OTC? About 80% of our entire business comes from RX and 20% comes from OTC. Okay. Secondly, during the quarter, there is a high growth in the PFI. Where is this coming from? It came primarily from the Latin American market. Also some from Asian markets also. Asian markets also are growing. Okay. GPI currently has eight approvals. How many launches have we done and how many are pending? GPI doesn't have only eight approvals. GPI has about 16 approvals, eight of which we received this year. Like I mentioned, we launched about seven products this past year, and we have about 10 more products that have already been approved that we have to launch. We're expecting- Okay. -more approvals this fiscal. Currently in the market, you have seven products from GPI. No. In the U.S. How many from Granules India? We have about four products from Granules India in the U.S. right now. Okay. Total number of products, sorry. Total number of products are 15. We have about 15 products approved from Granules India. Yeah. Launched are four. No, all the products have been launched. I need to just take a step back here. The total number of launches and approvals are between the OTC and the RX markets. GIL, overall, we have 15 approved, out of which 14 have been launched. 13, sorry. One we launched in January, so that doesn't come in this quarter. GPI, we have about 16 approved, out of which we have about eight to nine launched. The remaining will be launched shortly. We have two acquired ANDAs, out of which one has been launched, one has not been launched yet, and both of them are from GIL. Okay. Yeah. How much has been the investment in MAF? In the MAF block? Yes. The MAF block, as we said, is going to be INR 240 crores when it's completed, and we still have about 11 months to go. So far we must have spent maybe about, out of the INR 240, about INR 100 crores or INR 110 crores. Okay. Right. That will get commissioned in Q4 of FY 2022? That's right. Okay. Right. Fine. In case of Metformin ER, is the NDMA issue behind us? Yes and no. For the 500 mg, which is the 92%, 95% of the market, that's completely behind us. 750 mg, like I said over the last call as well, we know the root cause. We already took batches, put them on stability. Now we are just waiting for the stability to get done with, then we're waiting to correspond with the FDA. With all that, we should be able to relaunch the product into the market shortly. Okay. Will that need another inspection? Ma'am, sorry to interrupt, but for any follow-up, we request you to rejoin the queue, please. Thank you. The next question is from the line of Deepansh Shankar from Trustline PMS. Please go ahead. Yeah. Thanks a lot for the opportunity. Just wanted to understand what proportion of metformin capacity for us is sold into U.S. market, with higher supplies, are we expecting higher margins from that product? The entire tablets we make for metformin goes to the U.S. as of today. However, like I said, from the last end of this quarter, some of it will start going to Europe. It will be negligible this year. Even next year, I expect that the majority will be to the U.S. only. Like I said, we sell a little bit of PFIs of metformin, otherwise, mostly it's tablets. The PFIs go to Latin America and also to the U.S. customers, one U.S. customer. Okay. In the U.S., all our customers, we have got approvals in place and we can scale up the supplies? No, approval is for us with U.S., we sell tablets. PFI only they need approval. They're one customer who's been buying it for many, many years. We make tablets and sell them in the U.S., and we've got a decent share of the market. Okay. Thank you. All the best. Thank you. Thank you. The next question is from the line of Shrikant Hakolkar from Ashika Stock Broking. Please go ahead. Hi, good evening, and thanks for the opportunity. Can we get a core molecules contribution during the quarter? Contribution of? Core molecules. Core molecules, 84. It's about 84%. Last quarter it was 70%. It has gone up. Progressively, how do we see core molecules contributing going forward? No, I think, Shrikant, I apologize for last call's comments. That was 83%-84%. I think I gave you the wrong number by mistake. It's been at that 80%-85% over the last couple of quarters. Going forward, once we have more of our larger products from India commercialized, then this 84% will get to about 60%-65% by FY 2025. All right. One thing I'd like to add to here is that core molecules doesn't mean that we're only commercializing those core molecules in the U.S. There will be growth in terms of absolute numbers because we are doing a lot of global expansion of these molecules. There will be a significant contribution coming from all the new products as well. Okay. The next question on the capacity utilization, now that we're talking a lot on the new CapEx. Just wanted to understand the capacity utilization at the key facility. All our facilities today are working to full capacity. Okay, formulations, I would say 85% capacity. The only plant that is not working to full capacity is our Vizag unit five, where we have multi API and onco. That is working at around 20% capacity as of today. Okay. The next question is on the reliance on the China raw material. Now we are seeing some increase in the raw material prices. We are also seeing that the PLI scheme has been announced, and few companies are also investing. In that background, how do we see the raw material consumption that we have from China, and how do we see probably next year, how much it will be? You're talking of only raw material, right? Yes. I mean, the key starting material and APIs which we're sourcing from China directly. It depends on product to product. The prices have been varying. Some products have gone up by 40%, some products by 5%. Overall, I would say anywhere from 10%-15% have been the price increases. However, if I understood your question, maybe you're talking about new investments in India for KSMs. Yeah, we have already tied up with a few people here for supplying of KSMs to us. Going forward, within a year or maybe in 14, 15 months, we should be able to start getting materials from them, and our dependency on China will be reduced. Okay. Can I ask one more question? Go ahead quickly, please. Wanted to understand about our market share in metformin at the moment and with the new RLD approval, where do we end up? As in, what are the ambitions in metformin for the next year? We cannot really talk about market share because like we were saying before, it's sensitive information for competition. However, our market share is likely to go up a bit, and we hope to retain it. We want to be healthy. We don't want to take on more and more of the market. It has to be a healthy competition. It will be capped at a certain level. It's a sizable market. That's all I can say. The new product that we have approved is Glumetza. That's a very low volume but high-value product. We are going to be launching that shortly. Once we launch, we'll see where we stand. I'm very confident that we'll be able to get a solid market. All right. All the best. Thank you so much. Thank you. The next question is a follow-up from the line of Harith Ahamed from Spark Capital. Please go ahead. Hi. Thanks for the opportunity again. Sir, in your opening remarks, you mentioned a few products apart from Glumetza that you'll be launching over the next few quarters, like potassium chloride and generic Focalin XR, penicillamine. Can you help me with the timelines again? I missed what you mentioned in your opening remarks. I'm also thinking in terms of our strategy for gaining market shares in these. As I understand, some of these are already fairly competitive. How should we think of market share gains when we launch these products? Is it going to be gradual? In terms of the strategy, each product has an individual strategy because it falls within a different product category. I can't give you a blanket strategy. That said, each product has its own value proposition. Even though the competitive landscape is heavy, the landscape hasn't changed much since we got into the market. For dexmethylphenidate, for example, there's five, six players already, but we know what will take us to our target market. In terms of the timelines, we should be able to launch clofazimine by early Q1. dexamethasone, we've already launched it, and the other products will be launched shortly. All right. Thank you. Thank you. Ladies and gentlemen, I now hand the conference over to the management for closing comments. Ladies and gentlemen, thank you very much for attending our call. Due to a little disturbance in the audio, we were not able to really hear and communicate well. Like I said, this quarter we had some challenges. We expect challenges to continue into next quarter. However, as an overall year-on-year, our growth is going to be very healthy, and we also expect to have a healthy growth going on from there. Like I said, 25%-30% year-on-year growth in bottom line is what we expect. Again, I would like to clarify and totally deny that there is absolutely no divestment of the company going to happen. With this, ladies and gentlemen, once again, thank you very much. Thank you. Ladies and gentlemen, on behalf of Emkay Global Financial Services, that concludes this conference. We thank you all for joining us. You may now disconnect your lines.