Ladies and gentlemen, good day and welcome to Granules India Limited Q3 and Nine Months FY 2022 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Dr. Krishna Prasad, Chairman and Managing Director, Granules India Limited. Thank you, and over to you, sir. Thank you. Good evening, ladies and gentlemen, and a very warm welcome to you. And also thank you very much for attending our Q3, FY 2022 earnings call. I hope all of you and your families are doing well and continue to be safe. Despite the continuing disruptions, we are happy that we are slowly getting back to normalcy, as is evident from the increase in revenues compared to the last quarter and the same quarter of previous year. The revenue growth came in with a lot of underlying dynamics, such as raw material price increases, unstable supply from China and also pack supply constraints. Although our segment-wide gross margins have remained flat compared to Q2, the overall gross margin recorded is lower in percentage terms due to change in segment mix in the total revenue. Share of finished dosages had come down from 57% in Q2 to 46% in Q3, which is due to the rationalization of inventory by our customers, mainly in the U.S. During the quarter, we had filed two U.S. ANDAs, two Canadian dossiers, one U.S. DMF and one CEP, and also had received three U.S. ANDA approvals. FY 2022 had been a year of consolidation for us. The COVID pandemic has impacted the economy, government and business in lasting ways. These changes, whether induced by the pandemic, supply disruption and climate change, or induced by advances in science and technology, presents a unique opportunity in this disorder, and we at Granules strive to benefit from the emerging mega trends. The global companies across the world are looking out for reliability, robustness and sustainability in their supply chain and are seeking alternate options to Chinese dependency, especially for pharmaceuticals and chemical products. Peter Drucker had said, "The greatest danger in times of turbulence is not the turbulence. It is to act with yesterday's logic." Our growth so far has been built on scale, manufacturing excellence, focused execution and cost leadership backed by solid track record on quality, compliance, EH&S. We have achieved leadership position in the key molecules and have achieved critical scale. We now have one of the world's largest facilities for PFIs and finished dosages. We are now ready to turn a new leaf in our journey. We are taking a leap to transform our business to the next level. Granules 2.0 will be built on the focus on R&D, technology and sustainability. We will be investing in R&D infrastructure, scientific talent and partnerships in science and technology, which will lead to sustainability, leadership and backward integration. Our R&D initiatives will help us broaden our capabilities, leading to increased focus on quality of our portfolio and higher regulatory filings. Sustainability. The world is set to move towards sustainable, environmentally responsible and green chemistry. We believe what is good for society is good for business as well. We will be building sustainability by design in our processes, products and our green facilities. We desire to achieve this through our long-term ESG strategy. The ESG journey at Granules had commenced last year with continued engagement with all key stakeholders, including our employees, regulators, customers, suppliers and communities around us. With innovation and the use of emerging technologies in the area of renewable energy, heat recovery, waste and water, we will strive to reduce the carbon footprint comprehensively across all activities. We are confident that green and sustainable chemistry can be and will become cost-effective as well, which requires scale, with which we will bring down the cost as well as the carbon footprint. We are working towards becoming a carbon-neutral company. Backward integration. We will be leveraging our technology platforms to achieve full backward integration and control the supply chain for our key products. This implies going deep into the value chain and starting with chemicals that are commercially available in India and using new technologies, processes with sustainability built in the value chain. Organizational transformation. The key to business transformation is building capability and organization aligned to the transformation agenda, including leadership and culture. We have started this from the very top and strengthened our board and executive leadership. Dr. Saumen Chakraborty has joined our board as Non-Executive Independent Director. He brings a deep domain knowledge of the global pharmaceutical industry with his leadership experience across multiple functions. Mrs. Sucharita Rao Palepu had joined our board as Non-Executive Independent Director. Her experience in organization and HR transformation initiatives and commercial orientation will be an added asset for us. Dr. K.V.S. Ram Rao had joined as a Joint Managing Director and CEO. Dr. Ramarao has varied experience in the area of chemical and API businesses, including R&D and manufacturing through the adoption of innovative technology and best practices in sustainability. Dr. Ramarao will be spearheading the transformation agenda to take Granules' to the next level of the growth trajectory. We will continue to build management capabilities both organically and inorganically through our people and transform ourselves into a learning organization. Our people are central to what we have achieved so far and source of our optimism for a better and bright future. We are in the process of building a roadmap for commercial excellence, portfolio management, supply chain excellence, and business analytics. We will be leveraging the advances in the area of IT and digital tools to bring transformative value by reimagining the business processes through a digital transformation roadmap and identifying key priority areas and early wins. Outlook for our future is brighter than it has been ever before, and we'll be sharing more details around the transformation roadmap in the coming quarters. With this, I would request Sandeep to take you through a few key financial highlights. Thank you. Thank you, sir. Let me now move on to the financials for Q3 FY 2022. Despite the continuing challenges, we had a better performance compared to Q2 of the current year. We believe that our performance will further improve in the coming quarters. Revenue. The third quarter revenue was INR 997 crores as compared to INR 845 crores in Q3 of last year. Our volumes were down compared to Q3 of the previous year, but we have been able to pass on a significant portion of price increases into our customers as specified in our Q2 calls, which has resulted in a better top line. Revenue share from other molecules is maintained at 19% for the second quarter in a row, thereby moving towards our ultimate strategy of reduction of our dependency on the core molecules. The sales breakup as per business verticals and regions are presented in our investors presentation, which is available on the website. Gross margin. For the quarter, the gross margins contracted from 53.7% in Q3 of FY 2021 to 46.6% in the current quarter, mainly due to reduction in the margin of some of the products, especially paracetamol due to increase in raw material prices and freight costs. The overall share of finished dosages in the global sales mix has reduced from 50% in Q3 of last year to 46% in Q3 of current year, and this has also contributed to the reduced margin. EBITDA and EBITDA percentage. EBITDA for the quarter was INR 174 crore when compared to INR 212 crore in Q3 of last year. Apart from the gross margin drop, we have also seen increase in freight costs by INR 29 crore and increase in R&D costs by INR 13 crore as compared to Q3 of last year. R&D. Our R&D spend for the quarter stood at INR 35 crore compared to INR 22 crore in the previous year. The year-to-date R&D spend has been INR 109 crore compared with INR 64 crore in the previous year, same period. Last year, we had some part of our R&D disrupted due to COVID, but in this current year we are on track with our R&D goals, which we plan to achieve. Net debt. Our net debt increased by INR 148 crore on account of increase in the short-term borrowing to finance added working capital needs. Cash to cash cycle. Our cash to cash cycle increased by 19 days from 117 days in March 2021 to 136 days, mainly on account of planned increase in the inventory. Operational cash flow. Operational cash flow for the quarter stood at INR 23 crore compared to INR 93 crore in Q3 of FY 2021. This was mainly on account of higher working capital needs. The CapEx spend stood at INR 95 crore in the current quarter, and in nine months for this year the amount was INR 327 crore. With this, I would like to open the floor for questions. Thank you very much. We will now begin the question-and-answer session. Uh- Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Harish Agarwal, Individual Investor. Please go ahead. Harish, you may request to unmute your line from your side and go ahead with the question, please. Due to no response, we move on to the next participant. Participants, you may press star and one to ask a question. The next question is from the line of Rahul Vira from Abacus. Please go ahead. Hi, sir. Good evening. It is good to see the sequential improvement in the top line as well as the bottom line. Just want to understand now in terms of the gross margin, we've mentioned that the formulation revenue is being impacted and hence the gross margins have sharply come off. Are we seeing any sequential improvement from here on, or you still think that destocking at the front end is still going to take some time? I can't hear you properly, Rahul, but I think I can understand what you're saying. There are two factors to drop in gross margin. One is the FD percentage that has gone down. FD's are normally more profitable than PFIs and APIs, and the other one is also paracetamol. Paracetamol, there have been tremendous increases in costs and we started passing on the cost increases, some of the cost increases to our customers. However, the prices of raw materials have still been going up and there's a big time lag and the margins on paracetamol have shrunk. The value of sale is very high, but the margin is very low. Paracetamol has eaten into our overall margins and also the next thing is FD. Coming back to FD, right now we see a lot of rationalization of inventories at our customers and mainly in the U.S. Going forward, we see that this should definitely get corrected. We also see some signs of improvements in the last, I would say, few weeks. Sure, sure. Fair point. Sir, in terms of the paracetamol, we mentioned this quarter saw a sharp QoQ increase in the sales of paracetamol. Do you think, specifically for the European region, do you believe this wave three was a kind of a reason that we saw one-off kind of a sale and this may not repeat going ahead? I cannot say what is one-off, Rahul. There have been so many uncertainties going on. Actually in the past we never thought that this uncertainty is going to last so long. Even today, while we see rays of hope everywhere, still I would not dare make any assessment today. We have to see as we go on. Definitely one thing we see here is there's going to be quarter-on-quarter improvement as we go by. How much improvement I cannot say, but there definitely will be an improvement. Sure. Sure. Fair point, sir. This is helpful. Thank you so much. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead. Yeah, thanks for the opportunity. Just taking forward Rahul's question. Inventory acceleration, how long maybe in like next couple of months we should be normalizing in terms of the supply or it will take longer than that? Tushar, since this is mainly, as I said, is from the U.S. market, Priyanka is also on the call. Maybe it's good that she takes this, the question. Priyanka, are you there? Yes, I'm here. Hi, Tushar. Inventory rationalization is very company specific. We, like you know, we do have a B2B arm and a B2C arm. On the B2C division, which we handle ourselves, we have a decent level of inventory that we are comfortable with. On the B2B side, some of the partners that we still work with, we're not aware of how much inventory they hold at the moment. I do believe that in the U.S. market though, there is a situation where there's too much inventory that's being held and most companies that weren't able to get market share were giving up. I believe that as we go forward, the existing companies with large levels of inventory will cut it down to a more normal level, which we have started right now. That said, there also is an increase in lead time to the U.S., which could potentially mean that some customers with market share, which includes us, could increase their inventory levels going forward depending on how the situation is. To answer your question, at this point, we're not sure how our customers, how our partners would act. We have to just wait and see over the next couple of quarters. They could increase the inventory, which means we would have to produce more batches, or they could rationalize it a little bit more. Got you. Considering for the Ibuprofen, you've seen a good amount of decrease, both year-over-year as well as quarter-on-quarter. Any specific reason to highlight there? Ibuprofen during the COVID times, Tushar, there's been more emphasis on Paracetamol as the drug for COVID. Ibuprofen has taken a beating. That is one of the reasons. The other side is Ibuprofen prices, as you, I don't know if you remember some time ago, Ibuprofen API used to be sold at $20. Today, it's down to $10 or $11. Right. Subsequently, their selling prices also have come down. Margins, while they're protected as a percentage, the absolute sale value has come down. Understood, sir. Just lastly, so considering these scenarios and maybe more requirement of inventory, so does it mean that the working capital requirement will remain elevated going forward? If the sailing times, the inventory one way is to keep a lot of safety stock. I think we are fairly in good position on that. With today's sailing times, which have increased by almost 70%-80% of the normal sailing time, the inventory on the water also has increased. Unless the sailing times still worsen, I don't think we may need more inventory. It depends on how the logistics are going to work out. Got you. Just lastly on this. What kind of net debt levels can estimate at the end of FY 2022? Sorry, Tushar, can you come again? Net debt level. Tushar, net debt level will be probably at this range only, at a net debt level, certainly, because there will be some loan requirement which will happen in this quarter. Probably we'll have a scope of having some additional debt to fund our working capital needs. Net level, it will be same. Okay. Thanks. Thanks a lot. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Ranvir Singh from Sunidhi Securities & Finance. Please go ahead. Thank you for taking my question. Congratulations, sir, for good set of numbers in this quarter. My question was related to Paracetamol. Paracetamol from last quarter we had been saying that there is a problem in availability of raw material, basically in PAP. This quarter we see a sharp jump of QoQ. The availability has normalized now, on raw material side? Not really, Ranvir. Actually, we were hoping that one Indian manufacturer had started production already and others would start, one more would start. The manufacturer who has already started is also having a lot of quality issues. That way, I mean, even though we had some material from him, we had to stop purchasing from him. That way, the Chinese none of them have increased their capacity. As of today, there has actually been no improvement in spite of our hoping there will be. A possible good news is the biggest plant in China that had shut down. We hear from them that they will be starting within a week. Then there will be trial runs and validations and other things. It may take about three months for us start getting material and achieve some sort of normalcy. Another three months we may have to go through this. I wanted to understand in this quarter because pricing has also been pressured, so volume has gone up significantly QoQ. Where did we get the raw material if that was- No, volume has not gone up, Ranveer. What has gone up is the price, selling price, raw material price and the selling price. The part of the Paracetamol revenue had been driven up only by pricing. Like you said last time, we were talking about passing on some more increases. Some we were able to pass on. Okay, fine. Because then we also see that gross margin was also impacted due to that price increase in paracetamol, that's what you said. You're right. Yeah. Okay. Secondly, what was the CapEx during this nine months? CapEx so far is about INR 325 crores, and we think we'll be completing this year with about INR 400 crores. Okay. We see free cash flow is in negative. This is working capital has increased basically. The working capital has increased by about INR 70 crore approximately. Going forward, what would be the working capital cycle for a full year basis? We should be in the range of this only, maybe a little bit, 120 would be desired number. CCC. Okay. Yeah. Okay. Full year CapEx for FY 2022. The CapEx for next, we are talking about FY 2022? Yeah, for FY 2022. Nine months is for full year it'll be. About INR 400 crore run rate. On business side, we see that growth in non-core molecule has gone up significantly. Just on longer perspective, I wanted to understand that growth in core molecule is getting matured now, and so our focus would be for non-core business. And or can we expect that even the core business can recover going forward, in a significant way? Core business, there's more potential left runway because today it may have matured in the U.S. where we have a decent a fairly decent market share. We are opening up venues in Europe and Canada and South Africa. These are new areas where we see the core business growing. In fact, in this quarter, we should be launching one or two products with our own dossiers in Europe and also possibly the U.K. There is potential for core business, but also the real growth going forward has to come from new molecules. We have been working on so many molecules, strengthening our backend, going all the way to the basics and doing a lot of filings. Going forward, contribution of non-core molecule, can we expect some 40%-50% kind of thing in next two to three years? Maybe not next year. Maybe like two, three years later it could be around that because like I said, there's still growth left in the core molecules. There's still many countries where we can. Now we are just in a good position in the U.S. We want to be in the same position in different parts of the world. Going forward, the existing molecules and the newer molecules, whatever we do, we are going to strive for global leadership in these molecules. There's still a lot left. Did you say 50%? Yeah, yeah. Currently it's around 20%, I believe. The non-core to core molecule is around 80%. With the kind of growth we see, 40% growth we have in this quarter in non-molecule. I wanted to understand with this kind of growth rate. No, I don't think we'll get to that 40%-50% level coming from non-core molecules within the next two years. This is not gonna happen. We certainly see a significant increase. Most of the R&D activities that we are focusing on, like CMD said in his opening speech, will also be focused on non-core molecules. You will see a significant increase in the contribution from non-core going forward. Okay, fine. Just last one. On R&D you see in this quarter, the R&D intensity has significantly come down, Q on Q. Any particular reason or what would be the outlook for a full year or next year, if you could give for R&D as a percentage of sales? Actually, I will take this. The other reduction is there in terms of R&D, which is last quarter there were certain filings and the pivotal and pilot studies were paid for. More or less, the amount of spend that we have made in three months, that will be an average run rate. Our average run rate for next quarter will be around INR 40 crores. Last second quarter was high because of certain specific spends. Third quarter normalizes, and fourth quarter will be around INR 40 crores based on the run rate of these nine months. We will be around INR 140 crores-INR 150 crores at the end of the year. Okay. Fine. That's all from my side. All the best. Thank you. Thank you. Ladies and gentlemen, you may press star and one to ask a question. Participants, you may press star and one to ask a question. The next question is from the line of Ashwini Agarwal from Ashmore Investment Management. Please go ahead. Hi. Good afternoon, Dr. Prasad, and team. A fairly good set of numbers in a very, very difficult scenario. I mean, it's more of a comment than a question. The way I think about it is that two of your key molecules, right, paracetamol and ibuprofen, are seeing different stories around them. On one hand, you have very high prices and thinning of margins because raw material prices of PAP and availability of PAP is a question mark. On the other, the prices have completely collapsed and there is unwinding of inventory at the customer's end. Second thing is that, you know, overall, your working capital in rupees million or rupees crores is looking bad, even though your actual number of days or cash conversion cycle hasn't materially worsened for the simple reason that prices have gone up and you've got additional inventory on the sea, as you say. It's kind of a perfect storm. I'm more looking for, you know, you've been in this industry for, you know, over nearly 40 years now. When you look back and think about it, I mean, how do you see things normalizing? I mean, what's your best guess? How long will it take for things to come back to normal, one or two quarters? Or could it be longer? How do you think about it? I mean, these are very exceptional times we are living in. Actually, based on the current scenario, I mean, if no unexpected things happen, no fourth wave or fifth wave, I think things should get back to normalcy in about two quarters. But now everything is so uncertain, we are hoping that it will be within this timeframe. Which would basically bring back your paracetamol volumes back, prices down, margins up, and on Ibu, it would bring back prices to a more sensible range than these current depressed levels, or at least your margins back to what or spreads back to what they would be in a normal circumstance. That should be a reasonable expectation on a two-quarter basis, right? It is actually we think that I cannot say that we will go to 57%, 54% gross margins, but around 50% gross margins we should be able to achieve within two quarters. No, I think that's great. I think it's a wonderful performance in what has been nearly a perfect storm. You know, congratulations and all the best. Thank you. Thank you. Thank you very much. Participants, you may press star and one to ask a question. The next question is from the line of Harith Ahamed from Spark Capital Advisors. Please go ahead. Good evening. Thanks for the opportunity. Just a question on the MUPS block at our Gagillapur facility. Sir, can you provide an update on the timelines here and some color on the kind of products that you're targeting and how many you filed? The MUPS block is almost done, Harith, and we are trying to do the qualifications of equipment and also validations of products will start there. As I've been mentioning in the past few quarters, we have two products already approved in the MUPS area, which is the KCL tablets and KCL capsules. These we have been doing in other blocks. They'll be scaled up in this MUPS block now, and we'll have enough capacity. The capacity was constrained in the past, but now we'll have enough capacity. We filed a few, two more products already, three products actually in the MUPS area. Before March another two products will be filed. Next year we expect to do about eight to nine, approximately eight to nine filings in the MUPS area. Can we expect commercial supplies from this facility to start maybe in the second half of FY 2023? Sometime towards the end of the first quarter itself we should be able to start. Okay. In a limited way. It won't be all out. Okay. In your release there's a footnote on duty drawback claims of around INR 17 crore that you've recognized. Trying to understand in which line item this is being included. Yeah. Go ahead. Duty drawback has been recognized as other operating income. Okay. It's part of the revenues. Yeah. Okay. That's all from my side. Thanks for- Thank you. Thank you for taking my questions. Thank you. The next question is from the line of Mohit Mandhana from Fidelity International. Please go ahead. Sorry, my question has been answered, so you can move on to next participant. Thanks a lot. Thank you, Mohit. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Harshal Patel from Sharekhan. Please go ahead. Okay. Thank you sir, for the opportunity. Sir, my question is for the CapEx for FY 2023. Sir, did you call out any number for FY 2023 CapEx? Yes. We were mentioning this in the last few calls, and we stand by that. Okay. It's going to be next two years put together is going to be about INR 600 crore. Okay. The composition also stays the same as was, you know, discussed earlier? Yeah. It's about, as of today, it's going to be about INR 450 crores for the APIs and backward integration of APIs and all the green chemistry sustainability initiatives we have taken up, and INR 150 crores will be for the new formulations block. Okay. Thank you, sir. That was it. Sir, just one thing I wanted to ask you on the transformation. If you could just speak a bit more on the transformation thing which you mentioned in the opening remarks maybe. What kind of a benefits or growth that you're targeting after this transformation exercises is over? Harshal, basically, this is something very close to everybody's heart in Granules today. We have embarked on a journey, where we want to become a sustainable company. Every bit of sustainability is built into our design or whatever we do, we think of sustainability first. Okay, while ESG is the most important thing, environment is the most difficult thing. It's not easy to get to near carbon neutrality or be sustainable on the environmental front. There's so many initiatives we have taken up, mostly driven by technology, and also like flow chemistry and biocatalytic reactions and a different way the pharma industry works. We are going all the way backwards into chemicals, basic chemicals, and starting all our products from chemicals that are available in India. Almost, I mean, I would say, drastically reduce dependency on China and any other part of the world. This needs a different mindset, a different skill set and different capabilities. Most important is the mindset. People have to believe we can do this. We as a team believe we can do it, and we are building on capabilities and talents of people. Lot of talent acquisition happening. Also not only bringing in talent, we are also working on partnerships with different companies to attain this talent and know-how. Much is happening. That's the reason I said we will update you as we go by, in, quarter on quarter. A real transformation is on the cards in Granules. Like I said, Dr. K.V.S. Ram Rao, who's with me today here, has already taken on in the company and, he's going to be leading this, transformation. Oh, okay. It would be safe to kind of get it more so from one year, two year down the line perspective. Would that be a good- It's a multi-year journey, but we will start seeing some results after the second year. On that note. Okay. Thank you, sir. No more questions. All the best. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Tushar Bohra from MK Ventures. Please go ahead. Yeah, thanks for the opportunity and congratulations to the management for, you know, a recovery after two to three quarters of challenging results. Couple of points. Just first quick clarification. We have included the duty drawback in the other operating income. It's part of the P&L? Yes. Sir, if you could help understand how the non-core molecules as a block has been performing. You know, let's say some kind of qualitative comments on, you know, volume, market share, you know, any kind of insights you want to highlight around those products and also the pricing environment, whether our strategy on the non-core molecules, whether the strategy is something as we had envisaged, say, you know, four to six quarters back. Yeah. Who would like to take that? Sure. Tushar, hi. You're asking us about the market share for non-core molecules and also a little bit on pricing, right? Our approach towards it? Yes. I mean, without getting into product specifics, because every product has a different market share, I will say that for the larger products where, especially the ones coming from India, we still have to tap at least half of the market share that we have in mind. We only went to half our target share. That's primarily because we're in a phase of the generic industry where most of the suppliers, our competitors are defending business because they probably are not receiving further approvals or for whatever reason. We don't want to engage in that right now. I do see that to be a little bit non-sustainable because we understand the sourcing landscape of each of those products, and we don't think it's very sustainable to maintain those prices. We are being patient right now. We did capture a good share of each of the markets that we wanted to already. As we speak, we are continuously bidding. We do see a lot of shortages because of the reason that I mentioned already. We are bidding slowly at the prices that we want, and we're accepting prices. We are only accepting business if we get the margins and the prices that we think are sustainable going forward. Again, for each of these products, we have a long-term vision of where it would be because of everything that we are doing, right from backward integration to CIP activities that we're implementing in place. We do adjust pricing accordingly. As the strategy, would it be fair to say that, you know, you're looking at say maybe anywhere from 15%-30% market share, maybe higher in a few and at least, you know, corporate average margin profile, possibly slightly higher for the new molecules? If you look at the gross margin, they are a little bit higher. In terms of market shares for our core molecule, not core molecules, for the key molecules amongst the non-core, the big high volume ones, our market shares will be a little bit higher than the 30% that you mentioned. Sticking on the subject. You know, we had a number of launches done, say, over the last four to six quarters. What is the optimum timeline over which these molecules start to stabilize, you know, into a market share or, you know, say what is the vintage when we start to get the real results? Is it two years? Is it three years? You know, for the strategy as a whole. See, we already started seeing an increase in the contribution of core molecules as you even saw in the presentation. In terms of a percentage, that growth might look a little bit minimalistic to you, but if you look at the absolute terms, numbers, the growth is quite a bit. Now if you expect, say, growth like a metformin, it will be, it'll certainly take us a few years to get there because of the sheer size of the molecule. Look at absolute terms, we certainly are growing, and that's coming even from a deflationary market at the moment. No, no. All that growth is coming from non-core molecules. Yeah. Agreed. Thanks. Just to clarify, what I meant was, let's say molecules that you've launched in H2 FY 2020 or H1 FY 2021. Yeah. You know, four to six quarters back. Would it be fair to say that sometime in FY 2024 you should start to see a, you know, significantly higher contribution from those molecules, as they start to stabilize at much higher market share from today? I would say even before that we could capture the market. Yeah, it really depends on the nature of our suppliers and how receptive they are to stabilizing prices, et cetera. From our side, we are doing everything we can. That number seems reasonable, if not earlier, a quarter or two earlier. Okay. Question on the backward integration thought process. I'm assuming you know we would be starting and prioritizing PAP given the challenges we've had in paracetamol last four quarters. Just to you know to help us with the priority for backward integration for us overall amongst the portfolio and how are we approaching this for the new molecules also. Tushar, now the journey for all the new molecules is actually starting right from basic materials. There's no such thing as KSM's buying from outside. That's where the new molecules going forward. All the existing molecules which we have, we have also started working on integrating all the way backwards. PAP is one, but all other products also we are working on. This is what, where I said will be a sustainable journey. These products again when we make, it will be done in a green way. They are not going to be done in the normal way where you cause a lot of pollution and other stuff. A lot of work is happening. This could take about two years to see the first results, but we are on the job. Sir, the annualized plant for PAP, when do we expect that to come on stream again? Do you have any clarity from them? Which one, Tushar? You mentioned one Chinese supplier, but I think one of the largest was. Oh, yeah. Okay. He's supposed to be starting his trial runs this month, and we think in three months from today we should be seeing the first supplies from him. Great. We would already be in conversations to sort of secure the earliest supplies, I suppose, being large and Yeah. That was a huge plant, Tushar, and when we was in full production, there was a surplus of PAP around the world. We do foresee that things will normalize once he ceases his production. Okay, great. Just one last question on, say, Vizag Oncology high potency block, any visibility on, you know, revenue from there? Also on the new MUPS block, when does it start contributing to revenue for us? Well, next fiscal it will start contributing, maybe beginning of Q2 or end of Q3. Q2, beginning it may start contributing with the MUPS block. On the Vizag plant, while Oncology is going on, it's a small part of our business. We have invested some about INR 80 crore-INR 90 crore last year or this year in building a new API capacity there for high volume molecules. This is going to be our future area of growth for new APIs. That's where some of our initiatives in green chemistry will also be implemented. Maybe we'll start seeing decent revenues next year. 2024, we can start seeing some of our green initiatives come into shape from that side. Great. Thank you very much, sir. I'll join there. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Gagan Thareja from ASK Investment Managers. Please go ahead. Good evening. Am I audible? A little louder, Gagan. A little louder. Okay. Is this better? A little more or closer to the mic. Yeah. Okay. I'll try and speak a little louder. Yeah. You're better now. Yeah. My first question is on your year-to-date reported sales, if you could bifurcate the growth into volume and realization? The volume and realization of different products you are meaning or, what exactly do you mean, Gagan? If you are comfortable giving it, you know, for your key products, it would be helpful. Or if you want to on an overall basis, I'm okay with that. One minute. I think, Sandeep is- You're asking about the total growth in volume versus total growth in prices or Yeah. I'm simply asking the split of the reported growth in volume and prices. I believe volumes would have dropped year to date, whereas prices would have gone up. I'm simply trying to understand the impact on your growth from volume of products sold and the realizations on those products. Okay. We may not have the split right now, Gagan, but Yes. You can actually broadly say, we are operating our paracetamol capacity at around 60% and getting these revenues today. These revenues from paracetamol are more or less equivalent to running the plant at 100% in the past. Okay. That would be for paracetamol. Could you also elaborate a little bit on ibuprofen and metformin? It may become a little sensitive, Gagan. There is some data in the investors' presentation. Sandeep, you can explain that. Yes, which slide? On an aggregate basis, would it be possible to share this breakup or that's not possible? Sir, it's becoming a little sensitive due to, Gagan. Sorry about that. I think, let's skip this. Okay. Second question on ibuprofen. Your peer company on their call today indicated that BASF's new capacity is fully automated and actually has a lower OpEx than they themselves. That being the case, even when demand comes back, don't you see this you know impacting the pricing of ibuprofen and possibly also market share for incumbents in ibuprofen? Ibuprofen. Let me first of all explain, Gagan, that we used to have an API facility, a JV in China. We have exited that JV, so we no longer do the API. When we had ibuprofen API shortages, the JV really did help us a lot. Today there's a lot of surplus capacity in the world. Of course, BASF is the greenest and lowest cost technology in the U.S. They make product in the U.S. much cheaper than anybody else has. Yeah, it's going to be a tough time for the API manufacturers. As formulation manufacturers, we are well protected. We should be able to maintain our margins on ibuprofen. All right. You've been emphasizing on backward integration. If you could give us some idea on the degree of backward integration as it stands today and as you envisage it five years down the line. Today we are not backward integrated into the I would say all our products today. We have this blueprint getting ready and we are working on it. From five years from today, we will be integrated almost on most of our raw materials, basic materials. Okay. You know, we keep hearing about the China plus one narrative from a lot of companies. You know, there's this bid by large global pharma companies to try and attempt and reduce their dependence on Chinese APIs and formulations. I mean, the sticking point that I see is that the key starting materials in any case are always sourced from China. Unless there's a substitute there, do you see a viable proposition for a shift of formulations and APIs away from China? Formulations are already in. India dominates much better than China. Even in APIs, most of the APIs are made here, but the key intermediates for all the APIs, we depend on China. The shift is already happening. Like I said, that's one of our biggest initiatives. We don't want to be dependent on anybody. We want to go all the way backwards and start from the basic chemicals into the final product ourselves all the way. The shift is already happening, and I'm sure like we are doing, some other companies are also working on this basis. I personally feel that, I mean, in the next six, seven years, the dependency on China will become minimal. Okay. Finally, you know, just your thoughts on the company's roadmap over a five-year timeframe. You know, your aspirations and your roadmap for both the formulations and the API business, with a five-year timeframe in mind. Let me put it in another way, Gagan. In five years our aspiration is to become a fully integrated, sustainable company, highest level of compliance on everything. Compliance is what will. I would say our aspiration is to become a near zero carbon neutral company and integrated all the way. By doing that in all our products, the advantage we get is not only helping the environment, we do believe all these things will give us better sustainable margins. When you say better sustainable margins, could you give some idea of, you know, what? Whatever the current technologies can offer by going green, the margins could improve further. Okay. Thanks. I'll get back with you. Thank you for your answers. Thank you. Thank you very much. Participants, you may press star and one to ask a question. Anyone who wishes to ask a question may press star and one. I now hand the conference over to Dr. Krishna Prasad Chigurupati, Chairman and Managing Director, for closing comments. Once again, ladies and gentlemen, thank you very much for being with us and hearing us out. I would like to sum up by mentioning that we have embarked on a very exciting journey, and we are going to transform ourselves. We wish to share our progress and achievements on a quarter-on-quarter basis with you. Thank you very much. Thank you very much. On behalf of Granules India Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.