Please note that this conference is being recorded. I now hand the conference over to Mr. Irfan Raeen from Orient Capital. Thank you, and over to you, sir. Thank you. Good evening, everyone. Myself Irfan Raeen from Orient Capital. We are an investor relation advisor to the company. On behalf of Granules India Limited, I extend a very warm welcome to all participants on Q4 and FY 23 financial discussion call. Today on our call we have Dr. Krishna Prasad, Chairman and Managing Director, Dr. K.V.S. Rama Rao, Joint Managing Director and Chief Executive Officer, Ms. Priyanka, Executive Director, GPING USA, Mr. Mukesh Surana, Chief Financial Officer, Mr. Puneet, Head Investor Relations and GM Business Finance. I hope everyone had an opportunity to go through our investor deck and press list that we have uploaded on exchanges and on company's website. I would like to give a short disclaimer before we start the call. This call may contain some of the forward-looking statement which are completely based upon our beliefs, opinions and expectation as of today. These statements are not a guarantee of our future performance and involve unforeseen risks and uncertainties. With this, I hand over the call to CMD, sir. Over to you, sir. Thank you. Thank you, Irfan. Ladies and gentlemen, a very good evening to all of you. Thank you very much for attending our Q4 earnings call today. A detailed presentation of our Q4 and FY 2023 performance had been uploaded to our website. I'm sure all of you would have gone through it by now. Our full year performance has significantly improved year-on-year. Revenue for FY 2023 grew by 20%. PAT grew by 25% compared to FY 2022, which had declined slightly compared to the sequential quarter. This was despite the continued price erosion in the U.S. markets and the problems in our distribution due to our 3PL provider. The problems with the 3PL had caused missed shipments, resulting in lost revenue and failure to supply penalty. We have now switched over to a new 3PL provider and the transition would be complete by the end of this month, that is May 2023. I'm very happy to state that FY 2023 was a great year in terms of operational cash flow. Due to various measures that we had initiated, we generated an operational cash flow of INR 739 crores, which is a very healthy sign. Despite the buyback which we had this year, where the cost to the company was INR 311 crores and an unbudgeted capital of INR 92 crores for our new initiatives in green technology, our net debt had increased only by INR 71 crores as compared to FY 2022. During this year, we commercialized our new packaging facility in Virginia, US, and also received FDA approval. This facility will help us immensely on the OTC side, which is having a healthy growth and also the RX side for our US manufactured products. This will also help us improve our working capital cycle. We have successfully introduced paracetamol and metformin formulations in selected European countries with plans to expand our presence to additional countries and geographies. Currently, our paracetamol formulations are sold in Hungary, Ireland, Germany and the UK, paracetamol and metformin formulations. Our aim is to expand to the entire continent with these formulations in the coming years. With a strong market share for these products, we are targeting a substantial portion of the global market. As we continue to launch new products both within our core portfolio and in new areas, we anticipate the EU region to contribute significantly to our overall performance. I would now like to share details about the most important project that Granules has taken up, which aims to tackle climate change while simultaneously enhancing our supply chain. As you know, we have partnered with Greenko to establish the integrated green pharmaceutical zone in Kakinada, Andhra Pradesh. To support this endeavor, we have established a wholly owned subsidiary of Granules India Limited called Greenko ZeroC, which is carbon zero. The primary focus of this company is to manufacture products with near zero carbon footprint. We have made significant progress in developing various technologies for this purpose, and we are also partnering with renowned European academic institutions and European companies. The initial objective of Greenko ZeroC will be to strengthen our key molecules, paracetamol and metformin. We will be producing not only the KSMs for these products here, but most of the chemicals to make the KSMs at this site only. Which will also make the API close to zero carbon footprint. After achieving this, we'll be working on various other initiatives towards manufacturing KSMs for most of our APIs and some products based on fermentation. At this point, ladies and gentlemen, I would like to emphasize, and we all feel proud of this, is that Granules India will be the only company in the world to make any API, starting from the base raw materials, making our base chemicals ourselves, starting from ammonia and hydrogen. This will be a, like a dream project, and we are all working effortlessly towards this. We expect the CapEx towards this initiative to be INR 2,000 crore over the next five years. In FY 2023, we had invested INR 100 crores in C-Zero towards land. In FY 2024, we plan to invest INR 250 crores. Of the INR 250 crores, INR 100 crores will be used for land and civil works. INR 150 crores will be used to set up a pilot plant for validations of 2 KSMs and a commercial plant for one of the KSMs. Granules will ramp up the facility in a phased and stage gate manner, starting with pilot scale validation. After successful completion of the pilot, invest in full at scale commercial manufacturing. We expect that we should be able to commercially manufacture all the raw materials required for paracetamol and metformin by the end of FY 2025 or early FY 2026. For funding of C-Zero over the next five years, Granules is in a very comfortable position with its anticipated free cash flow. We have been receiving keen interest from various global institutions to participate in C-zero towards equity and debt at concessional pricing. We will evaluate and consider this at the appropriate time in future. While we are excited and progressing at a fast pace in C-zero, business is progressing decently. This year we'll be filing DMFs and ANDAs for exciting and potential products. We also expect approvals of already filed products and expect the new investment in MUPS in the new MUPS block to reach an asset turn of 2, which should improve going forward. Construction of the new formulation facility at Genome Valley is progressing at a good pace, and we expect phase 1 to be completed by October 2023 and phase 2 by May 2024. The planned capital outlay in FY 2024 for 2 phases will be in the range of INR 250 crores. This plant, when completed, will add a capacity of 8 billion unit finished dosages to the current 24 billion units. With this, ladies and gentlemen, I pass on the mic to Dr. K.V.S. Rama Rao, our Joint Managing Director. Thank you, Chairman. Good evening, ladies and gentlemen. Over the past one year, we have been focused on building our R&D and product development capabilities based on innovation and technology platforms. These initiatives aim to position Granules as an R&D-driven organization, thus broadening our capabilities, enhancing portfolio quality and increasing regulatory filings. In line with this strategy, R&D expenditure has been ramped up significantly starting with quarter four of FY 2023. During FY 2023, we filed 7 DMFs, 6 ANDAs, 5 CFDs and other Dossiers across Europe and rest of the world. We have made significant progress in the development of APIs and formulations, and we expect to file a very high number of DMFs and ANDAs in FY 2024. We'll also be expanding our filings of both API and formulation Dossiers to Europe and rest of the world. We have made very good progress on our enzyme and biotransformation-driven product development. We are expecting to complete the validation of a couple of enzyme-driven APIs over the next few quarters. In line with this strategy, our R&D expenditure is going to increase every quarter of the current financial year. We are all aware of the pricing pressures in the generic business, primarily in the US and in some other geographies as well. We have embarked upon a very important initiative across the organization on improving the profitability. The areas being focused on the gross margin improvements in API and formulation manufacturing, operations excellence leading to higher productivity, excellence in sourcing, procurement and logistics. These efforts have shown initial results and hold the promise of potentially expanding our margin profile from Q2 FY 2024 onwards in a sustainable manner. We are institutionalizing this approach as a way of continuously improving our profitability through multiple value engineering projects. The improved margins from our core business allow us to invest in our future growth drivers and fuel innovation-driven R&D projects. We have seen a lot of inefficiencies in 3PL operations in the US. This has resulted in supply disruptions and FDA penalties. We have proactively addressed these issues by changing the 3PL in the short term. We have commissioned our new greenfield packaging facility at Virginia. The addition of this FDA-approved facility will enable us to streamline our supply chain in the US, reduce costs, and improve our working capital cycle. While this facility is partially operational in quarter one, the full commercialization is expected in September of this year. We have entered a new year with a good traction of our paracetamol business in the US and other geographies. We are ramping up our paracetamol capacity to meet the increased demand. Our U.S. business will also be bolstered by exciting new product launches planned for this year. We continue to expand our Europe presence through business development teams and dossier sales on our finished formulations. Our growth for the rest of the world will be driven by improved market share and improved share of pallet. The chairman spoke about sustainability and our subsidiary, Greenko ZeroC. On the Granules India Limited side, we have made good progress in institutionalizing ESG as a way of doing business for us. We are currently developing a comprehensive long-term sustainability and ESG roadmap for Granules. We have already completed stakeholder engagement, benchmarking, and materiality assessment. We will soon be announcing our long-term and medium-term decarbonization commitments to our stakeholders. I pass on the mic to Mukesh for the finance. Thank you, Chairman, and thank you, JMD. Let me take you all through the top financial parameters now. Revenue. Fourth quarter revenue were INR 11,955 million as compared to INR 10,300 million in Q4 FY22, at a growth of 16%. This growth is mainly attributed to our increased commercialization efforts in all major geographies, including US and Europe. Revenues grew by 4% as compared to Q3 FY23, primarily on account of increased FD sales in key geographies, including US. The full year FY23 revenue were INR 45,119 million as compared to INR 37,649 million in FY22, at a growth of 20%. This growth is mainly attributed to increased API and FD sales in key geographies, including US and Europe. The sales breakup as per business divisions, geographic regions and major products is presented in our investor presentation, which is available on the website. Value added. Our value added as a percentage of sales for Q4 FY23 was 47.8% as compared to 48.9% in Q4 FY22. Value added as compared to Q4 FY22 is down by 1.1%, primarily on account of higher sales mix of API and price erosion in key geographies. Value added as a percentage of sales for Q4 FY23 is down by 0.5 percentage points from Q3 FY23, primarily on account of price erosion in major geographies, including US. Our value added as a percentage of sales for FY23 was 48.9% as compared to 50% in FY22. Value added as compared to FY 2022 is down by 1.1 percentage points, primarily on account of higher sales mix of API and price erosion in major geographies, including U.S. EBITDA and EBITDA margin. EBITDA for the quarter was INR 2,281 million, that is 19.1% of sales, as compared to INR 1,927 million, that is 18.7% of sales in Q4 FY 2022. A growth of 18% over the previous year, mainly on account of increased business across all major geographies. EBITDA for the year was INR 9,138 million as compared to INR 7,222 million. From 20.3% of sales, it has moved from 19.2% of sales to 20.3% of sales. EBITDA growth of 27% over the previous year, mainly on account of increased business across all major geographies. R&D. Our R&D spend was, for the quarter, INR 369 million as compared to INR 229 million in Q3 FY 2024 and INR 339 million in Q4 FY 2022. R&D spend for the year was INR 1,164 million. We are going to continue to spend on R&D in the coming quarters as well, as explained by our JMD. Net debt. Our net debt was INR 7,671 million as compared to INR 6,966 million at the beginning of the year. The net debt has increased only by INR 705 million, despite two major spends, which is explained by our Chairman also. Buyback of shares, including taxes and transaction cost of INR 3,106 million, and deployment of funds of about INR 925 billion in our new green initiatives expansion plans. Cash to cash cycle. Our cash to cash cycle was 132 days in the current quarter as compared to 138 days at the beginning of the year. Operational cash flow. Operational cash flow for the quarter was INR 1,794 million and for the year was INR 7,387 million as compared to INR 3,321 million in FY 2022. Higher operating profits and a focus on working capital management contributed to the higher operating cash flow as compared to the previous year. CapEx spend during the quarter was INR 407 million and during the year was INR 4,105 million. ROC. We have refined our ROC calculation by incorporating short-term borrowings in addition to long-term borrowings in the denominator to make it in line with general reporting standards. As per the revised calculation, ROC for FY 2023 increased to 21.1% as compared to 19.3% in FY 2022. With this, I open the floor for questions. Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone wishing to ask a question may please press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Harith Ahmed from Avendus Spark. Please go ahead. Hi, good evening. Thanks for the opportunity. My first question is on our Gagillapur facility, where we had a USFDA inspection in January this year. I think you had disclosed a couple of observations in post that inspection. I'd like to know if there is a final classification from the USFDA for that inspection and whether we've received any approvals from the facility post the inspection. The USFDA inspection which has happened is for, is a pre-approval inspection for two products. They have given six observations, and we have already replied to those observations, and we are waiting for the reply from USFDA, for the approval of those products. Understood. You, in your opening remarks, you touched on achieving asset turnover of 2 times for the MUPS block next year. Can you indicate the kind of revenues or asset turns currently for the facility for FY 23? Also if you could, you know, remind us again about the total investment that's gone into this particular MUPS block. Harith, I think, Mukesh will answer that. Yeah. Thanks. Thanks, Harith, for that question. In the current year, we are closing close to one asset turn, and that we are expecting it to closer to two in the next coming year. The gross block, would be around, what amount? INR 245 crore is the gross block for MUPS block. Okay. Last one with your permission. You mentioned, CapEx of INR 2-3 crores for the Granules ZeroC initiative for FY 2024. Can you also give us a guidance on the total CapEx, including this for the year FY 2024 and, if possible, for FY 2025? Yeah, sure. Total CapEx. FY 2024, you know, as we were explaining, INR 250 crores we are expecting for Greenko ZeroC. Another INR 250 crores we are expecting for Granules Life Sciences, which is additional FD business facility. Regular CapEx for rest of the blocks will be about INR 200 crores. Closer to INR 700 crores, including INR 500 crores of big initiatives. All right. That's all from my side. Thanks for taking my questions. Thank you. The next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead. Yeah, thanks for the opportunity. For this quarter in particular, how much was cost borne because of failure to supply? The cost in the current quarter, we have incurred INR 8 crores for failure to supply. Okay. And this is in raw material consumed or in other expenses? No, it's other expenses. Understood. Approximately how much revenue you would have lost because of this? It is, you know, difficult to quantify and also, you know. Of course, you know, there is a good amount of sales loss. Last quarter also we have indicated some number. It is in similar range, you know, about $4 million-$5 million of sales loss has happened. We are expecting this some, you know, some smoothening to happen June onwards. April, May also there are some challenges we have. We have already, you know, taken up changeover of our 3PL. I would request Priyanka to explain this further. Hi. Thank you for the question. like CMD said in his opening remarks, we have changed the 3PL. We've been working over the last 60 days to do that, and we expect to go live on May 23rd. Understood. secondly, on ibuprofen per se, the sales have been moderate for the year. how to think about ibuprofen outlook? Priyanka can take that. Ibuprofen, we've actually, in the U.S. we've been stable over the last 2 years on the RX side. On the OTC side, we expect to pick up more this year with some recent awards that we've received from, on the OTC side. Most importantly, we also have a 5-year lock-in government business for ibuprofen. Sales have been pretty stable with a little bit of an increase this year, potential increase this FY 24. Understood. Lastly on paracetamol, if you could also share how has been the pricing trends, how has been the volume pickup for us? I think the pricing change has been significant in terms of PAP prices going down. Volume increase has been very positive to us in terms of presence of increased market share in the U.S. and also in other parts of the world. This is a positive impact on the volume. The pricing, I think, has been in line with the reduction in the prices of PAP. Has that now stabilized or you think that there could be still further lowering of our pricing? I think we feel that the pricing is now coming to a kind of an equilibrium. Understood. That's it. Thanks. Thank you. The next question is from the line of Sajal Kapoor, an individual investor. Please go ahead. Yeah, hi. Thanks for taking my questions. I hope we can sustain the cash flow momentum going forward. That's just our hope, because I think we do need a sustainable cash flow engine to fund all our future initiatives. I do like the frugal approach to investment slide in the end, clearly we are embracing Industry 5.0, that's good news. Question is, after we have the green chemistry back-end for our prime molecule sorted, can this enzymatic and green hydrogen engine in the name of Greenko ZeroC be explored further for green chemistry CDMO services? That KVS, I think you should take that. Yeah. This itself is a, Sajal, this is a very big initiative from our side. We would like to make sure that in the coming one to two years window, we would like to establish ourselves as the green company with a top commercial product that we have in line, paracetamol, metformin, and couple of other products. Until and unless we complete these big initiatives, we will be not focusing on the right areas, although it is very important point that you have raised. We feel that the next two years the organization will focus on three major areas. One is R&D effort in the organization to build API and formulations of a different order. Second, we would like to focus on the green chemistry and get the backward integration going. Third, integrating these two pieces to ensure that we are known as a green player in the pharmaceutical segment. Once we achieve that and we prove this concept to the world, then we will come back and actually lace it up to see what kind of benefits that accrue further by business diversification. Chairman would like to add something. Yes. Sajal, I think, let me just expand a little bit on this. First of all, we have a few products, which we traditionally call core products, which have been performing very well and which has been giving us a lot of cash for funding our future growth. There's a lot more potential for these products. We have hardly touched. We have about 30% of the world market today for paracetamol, metformin a little less. As we expect that we should go to about 50% of the world market and become clearly the leaders. For this, first of all, we need to strengthen our entire supply chain. To become true leaders, we have to be fully integrated. I would even go to the extent of saying we want to be invincible. With green chemistry, we are going to do that. I explained in my opening remarks, we will start from basic hydrogen and water. That's where we are starting from. Once we achieve this, our cash flows will be still much, much more healthier, and then we will definitely be attempting the other areas. We are working on the other areas today, but that definitely is not our focus. That's helpful. Second question would be related to our green initiatives. We mentioned the two KSMs for paracetamol, which is PAP of course, and then for Metformin, which is the DCDA. I mean, the current technology that the Chinese manufacturers are using for DCDA is highly polluting and no one in India as on today is making that intermediate. How confident are we in terms of given our enzymatic route that we have successfully tested at the pilot or the lab scale, then how confident are we that this DCDA new technology will be available at commercial scale starting back end of FY 2025 or beginning of FY 2026? Are we also thinking in terms of having it at the right scale so that we can make it commercially viable and available for other players in India? Yes, Sajal. First of all, we are very confident of the technology. We had demonstrated this to ourselves at a level of 100 kilos per day, piloting. The next step is we want to go for 1 ton per day. The equipment had been ordered, and we should be able to set this up before September. Once we tweak this, I won't even say establish it, we are sure of establishing once we tweak final parameters. The main equipment also is under order, and the next step will be to start with 10,000 tons per annum, full-scale capacity, and later on expand that to 30,000. When we reach this 30,000, we'll definitely be able to service, I would say 80%-90% of the world metformin market. With just DCDA, which will be green, not polluting, made locally. Most of the DCDA for the world is made in India. We'll have indigenous supply for these people. By the way, we will also be expanding our metformin capacity, which will also be green. All the raw materials for metformin, not only DCDA, all other raw materials will be made in the same site, and they will be green. Sajal? Thank you. A reminder to the participants, anyone wishing to ask a question, may please press star 1. The next question is from the line of Varun Basrur from Julius Baer Wealth Advisors. Please go ahead. Yeah, good afternoon, also thanks for this opportunity. My first question is, you know One second, sir. Mr. Basrur, there's a lot of background disturbance from your line. Oh, yeah, one second. Thank you. Is this better? Sir, please go ahead. e comments you made earlier on ramping up the MUPS block and some other CapEx coming online on formulations the next year or two, what kind of revenue growth are you building in over the next couple of years from whatever growth CapEx is done? Assuming, of course, that whatever price depreciation is there is in line with the long-term depreciation First of all, let me answer the capacity and what growth rate we are building for. The capacity always has to be a little ahead of what growth rate we are anticipating. We will be having a healthy growth rate. If you see the last 5 years, we have grown at a healthy more than 20% on revenue and 25% on PAT. We expect that this sort of growth should continue. On the depreciation, Mukesh, you want to say anything on the depreciation? Your voice was not fully clear, but I think Mukesh got the question. You were referring to depreciation of the block profit, is it? No, no. Sorry. What I meant was, I think Mr. Chairman answered the question. I was more, you know, from the perspective that the price depreciation or deterioration in formulation has been a lot more than, you know, the long-term trend. If we had sort of normalized that number for what it was over the last 5 years, what sort of revenue growth would be there? I think that question was answered. The next question is, you know, you're looking at doing INR 250 crores of CapEx on Granule C zero next year. This is largely for backward integration. What kind of, you know, payback or IRR are you building in? Of course, this would come as something towards gross margin expansion or VA expansion. When you look at these projects, what kind of IRR or payback are you building in? It's a little difficult to answer at this point of time, because there are so many initiatives happening, and also we are not taking into account any possible premium we may get for green products. It looks very healthy, Varun, and definitely, the IRR will not be less than what we have been making before. It could possibly be more. Could I say a payback of about, you know, four years or so? Would that be accurate? We will see. We will see, Varun. These are huge projects. You may not be able to consume all the raw materials in-house. We may also have to establish a market. All I can say is, overall there'll be healthy cash flows in the company and we should be in good shape. Just to add to that, we are doing in a phased manner. You know, each phases we are seeing a success and we are adding it. The payback and IRR will be, you know, done phase by phase. Currently we are seeing that it is going to be better for the first phase, but we would not be able to give a number to you. All right. My last question is, on the interest cost. You know, it's a little difficult to sort of factor in how the interest cost would look going ahead, because I assume that a lot of the operating cash flow would be consumed by the CapEx, or would be utilized for CapEx going ahead. You know, the last couple of quarters, the interest cost has been INR 17-18 crores. Would this continue at the current clip or the current run rate? The interest rates is a key issue. Our working capital cycle is definitely, you know, healthier. It's just the interest rate. The interest rates are currently, you know, after some time, we are looking at a pause and then, of course, reduction also. Looking at the current trend, the interest rates will be slightly higher than the quarter four, which is INR 18 crores, slightly higher with the increase in volume. At the same time, our debt to EBITDA, we are net debt to EBITDA, which is less than 1 and 0.84 now, and we are going to maintain less than 1. I'm not talking about debt equity, I'm talking about debt to EBITDA. That kind of a healthy. Ratio we will maintain even with the higher CapEx. Why I ask this question is because there's also some element of factoring that's coming into the interest cost. Yes, that's true. Which is not split in either the cash flow statement and there's no breakup. That's why I ask, you know, how would it look going ahead? I understand that, you know, there's some element of interest rates going up and down. Yeah, that's right. Factoring, we have been, you know, increasing non-recourse factoring, and we are also adding new customers in our non-recourse factoring program. That is also, you know, increasing the finance cost a bit. This is going to help the company also in terms of overall cash flow and balance sheet ratios and also, you know, the timeliness and discipline with the customers. This we are seeing, going forward also we'll continue to have. As such, the, you know, delta increase because of factoring as compared to my borrowing for the overall year, we would have spent about INR 2.5 crores only. Okay. Finally, the cost difference because of factoring, is INR two and half crores, and I don't think it will go up, a lot. All right, sir. Thank you. Thank you. The next question is on the line of Puneet Pujara from Helios Capital. Please go ahead. Yeah. I hope I'm audible. Yes, sir. Yes. Last quarter, we gave an indication year-to-date price erosion in the U.S. market is 12%-15%. Can we call out that number for the full FY23? Priyanka, you want to take that? Sure. The pricing, erosion as a percentage hasn't really changed as much. It's still within the same range of about 10%-12% per year, if you look at the overall basket together. I'm talking primarily on the front of, B2C U.S. Rx generics. Sure. A follow-up to that would be what's your outlook going forward? We understand that there have been certain discontinuations in the U.S. market by some of the players that is leading to some sort of sanity coming back to the pricing environment. Are you also seeing similar trends? If yes, then what's the range it can stabilize going forward? Maybe for the company or at the industry level also would be helpful. You're absolutely right in the fact that there have been a lot of discontinuations in the recent past. There's two ways to look at it. One, on the controlled substances, it's not more about discontinuation, it's more about quota. There have been a lot of disruptions because of that. We have picked up share wherever we could, but we are also, like I've always said, we don't like to be very aggressive with controlled substances because of this quota issue. Whereas till date, we haven't had it, so we want to be a little conservative as we keep going. Like I said, we have picked up market share for the products that we have in our portfolio. For some other products that, we have seen discontinuation, we don't have anything on our portfolio from the list that have been discontinued. Yeah, the market has stabilized to a certain level. How much what the outlook would be going forward, that really depends on the mix between our portfolio and essentially the number of players in each of the molecules that are being discontinued. I can't put a number to it as of now. There is a lot of positivity in terms of how much the price erosion can go down going forward. Sure. That's helpful. That's it from my side. I'll join back later. Thank you. Thank you. The next question is on the line of Rashmi Shetty from Dolat Capital. Please go ahead. Yeah, thanks for the opportunity. One clarification on CapEx I want for FY 2024. You called out a number of INR 700 crores. Is it for FY 2024 alone, or it is spread over FY 2024 and 2025? It is for FY 2024. These are because of, you know, two big initiatives also which we have taken up. This is for the year. With this CapEx also, you know, we will maintain the healthy debt to EBITDA ratio. Okay. From the current levels of the long-term debt, how much additional debt are you planning to raise because of this high CapEx? Currently we are evaluating whether it should be funded through internal accrual or should we go for long-term debt. That is, you know, under discussion. Overall total net debt level, there won't be significant increase in terms of, you know, the ratio which I just mentioned. Rashmi, I think we should be able to fund this mostly through our internal accruals. It's that we have the capability to do that. At the same time, we have very little long-term debt. We are looking and as you know, these are in two subsidiary companies, C-Zero for the green initiative and Granule Life Sciences for the additional capacity. One of the reasons is focus for setting up these companies. Another thing is also the income tax benefit of 15%. These two are there. We had some idea, we are evaluating. Like I said, C-Zero, there's lot of interest for participation in equity and also low cost debt, long-term debt. We are evaluating. We'll take the decision at the right time in future. Still any, target like, you know, how much debt to EBITDA you will be maintaining it even though if you take some additional debt or something? It will always be less than one, Rashmi. Debt to EBIT- The net EBITDA. Debt to EBIT. Net, net EBITDA will be less than 1. Okay. What would be for FY 25, your CapEx? We are still evaluating it, Rashmi, and when we do some of the pilot runs and as we expand to 30, we'll have a better idea. We will be able to place this and come up with a number sometime in second half of this fiscal. Out of the INR 700 crores, INR 250 crores, or sorry, INR 150 crores you will be doing for your green chemicals in KSM. Out of that, how much would be for DCDA? It's very difficult to split up, but it's not INR 150, it's INR 250 for the green initiative. Okay. It's very difficult to split up because so many of these raw materials that we've been making they can be used for many products. Your DCDA project is basically the part of this green chemical initiative. There won't be a separate CapEx spend for this, right? No, this is out of that. Out of the INR 250 crores we are speaking about. Okay. Part of it will be for DCDA. Okay. If I just see your Q4 numbers, you know, our gross margin on quarter-on-quarter has come down. I very well understood from your presentation that this is mainly due to the higher API sales and specifically paracetamols. When I see quarter-on-quarter, you know, your paracetamol as well as your sales mix more or less looks same, you know, in the similar range when it comes to absolute number. I'm just trying to understand that, you know, still, you know, quarter-on-quarter, we have seen dip in the gross margin. What is the specific reason for it? If you can call out that. Also, if you can just let us know that, you know, in FY 2024, 2025, how would you see the gross margins, whether we are going to see any sort of expansion from the current FY 2023 levels? As you mentioned that, you know, your R&D and everything would increase, you know, if you can give some ballpark number on your R&D as well as your EBITDA margin guidance number. I will take, you know, question by question. One, you know, Q3 to Q4, the margin primarily has also because of price erosion, some price erosion. Okay. At EBITDA level, the major, you know, dip in the margin from Q3 to Q4 is higher R&D spend in Q4. Okay. Third question which you have asked on the R&D spend, you know, it is going to increase compared to Q4 spends, at the same time, we are also looking at a better sales CAGR and EBITDA CAGR. Overall full year, we should be able to sustain the kind of EBITDA margin we are looking at. Quarter on quarter, we should not be looking at. Overall FY24, we are going to see a sustainable or some improvement in the margins. Rashmi, on 24, 25 for your question, we have some very interesting launches coming up this year and some of the initiatives we are taking. We are working, we expect that there will be expansion of margins. Okay. FY 2024 if we-. Sorry, this is Ms. Rashmi Shetty. May we request that you return to the question queue? Can I just complete that question and then return back to the queue? It is halfly answered, so. Okay, ma'am. Please proceed. Yeah. On your R&D part, we can still assume that it would, normally, even though if it increases, it would be in the range of, you know, 3% around of the sales? It will be more than 3%. Understood. Thanks. That's it from my side. Thank you. The next question is on the line of Tushar Bohra from Emkay Global. Please go ahead. Thanks for the opportunity. Sir, first, just quickly want to check. We mentioned that our margins should improve and sustainably from quarter two onwards. We also mentioned that, you know, the logistics related issue, whatever third party will get done by end of May. We should assume that, you know, we'll continue to have maybe a softer margin profile in Q1 in general, and Q2 is the margin level that we should start to benchmark the organization for the future? You're right, Tushar. Q2 onwards, not only margins, we also expect revenue to increase. Some new businesses are taking off, and with stability of 3PL, sales in the U.S. also should increase. Sir, if you can highlight, you know, two things mentioned. One is, you mentioned a couple of times number of interesting launches this year, whether that is front-ended in H1 or H2, and the nature of these launches, what kind of products or therapeutic areas or specific substances. Similarly, on the research R&D front, you mentioned that the number of ANDAs and DMFs both will move up significantly this year. Again, if there is anything interesting further that you can highlight, you know, maybe some more subjective qualitative comments around that. Yeah. On launches side, we have both control substance launches and also the products that we have filed in the last couple of years, we have been getting the approvals. I think from quarter two onwards, we will see the new product launches, which will come up in the U.S., and also we will be launching some products in Europe. This will be the launch plan for us as we travel from Q2 to Q3. Second, on the R&D side, I think there is a significant ramp-up on the DMFs and the ANDA filings as compared to this year. Yeah, that you mentioned, sir, but any, like, you know, which kind of therapeutic areas or any specific products you may want to highlight or, you know, potential around some of them? I think we will not highlight right now, but as we start filing you will get to know. Suffice it to say that, you know, I in my opening remarks, I told that, these products that we are going to develop are backed up by the technology platforms that we have created and under the process of creating. That we expect it to add a lot of value to the core strength of Granules. Tushar, I think there I'll give you a part answer for that. Mostly they'll be in the MUPS type of products. Great, sir. One quick question on the green, you know, capacities that we are setting up for paracetamol and metformin to start with. If I'm assuming you already have a pipeline of products beyond these two in place when we say that, you know, these will not be the only two products that will come out of that facility over the next three, five years period? What we are doing, Tushar, while these are maybe the first products that will be commercialized going green, we are building the chemical blocks, the building blocks for different chemicals. Basic chemicals we are building. From there we can go into many other products. Yes, we do have ideas, but it's too early to talk about those products. Once we have the building blocks in place, so many things can be done. It need not be only pharmaceutical, it can be many areas. It can be chemicals. Got it, sir. It can be agrochemicals, so many other things can be made. The basic thing is to make the building blocks. Interesting, sir. Just one quick, one more point on paracetamol and metformin. Given that, you know, these are obviously, first line of defense molecules, but essentially commoditized products, and in U.S. we've seen a history of, you know, price erosion, being a constant issue for a lot of our peers as well as for us. We are taking such a large initiative on essentially, you know, commoditized products. Have we got into any kind of discussion with some of the, you know, potential clients? Or have we sensed an interest from market for a long-term contracts around Para and metformin through this route that gives us better security or comfort in taking such a large CapEx, even though it may be in phases? Okay, Tushar, to answer this question, first of all, we have been in this product for 35 years, and we have great experience, we have great relationship with all the top consumers in the world. There's a lot of interest from them for more and more product. That's why we have expanded and we're still expanding. We are very confident that at 50% of the capacity we'll be able to sell everything. We have long-term contracts. I don't say, long-term what you mean by long-term, but multi-year contracts, up to 5 years, we do have with, some of these people. Once we go green, I'm sure there'll be many more for much longer term contracts coming in. Got it, sir. That answers my question. Thank you so much. I'll join back in queue. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in this conference, we request you to limit your questions to two per participant only. The next question is from the line of Harith Ahamed from Avendus Spark. Please go ahead. Hi, thanks for the follow-up opportunity. Can you share the GPI sales for the year FY 23? Yeah. It is INR 1,341 million API sales. It is also covered in our investor presentation. From this is the U.S. subsidiary, Granules Pharmaceuticals. The U.S. yeah. Sound was feeble, Harith. Can you come up again? No, I was looking at the revenues at our U.S. subsidiary, Granules Pharmaceuticals, Inc.. You're talking about the revenues? From GPI. Yeah. Yeah. One minute, please, sir. Yeah, it is INR 1,119 million. Okay. When you shared the details around our CapEx for next year, you mentioned Granules Life Sciences. I missed the amount you mentioned. Could you also give more color on the activities and the nature of products under this entity? Where exactly is this facility? This is in Genome Valley, close to Hyderabad, and it's going to be INR 250 crores for 2024. We have already spent some money in 2023. In 2024 we will complete the project. You said what type of product? There are different range of products. All the products that which are under filing, will be made, will be filed from this area only. The Stage 1, phase 1 will be ready shortly, September, and we'll be doing the filings from there. All the new products will be filed from there. This is a formulations facility? Formulation facility. Okay. Okay. Understood. Thank you, sir. Just one correction, Mr. Ahmed. I just said crores. It is crores, not million. INR 1,119 crores. It will be crores. Okay. Noted. Noted. Thank you, sir. Thank you. The next question is on the line of Yogesh Tiwari from Arihant Capital Markets Limited. Please go ahead. Yeah. Thank you, sir, for the opportunity. I just want to confirm on one previous question asked on paracetamol. When I look at FY 2023, paracetamol, which is approximately 50% of revenues, it has grown between 25%-30% on a year-over-year basis, and that was the major driver, one of the major drivers. Just to confirm, like, what is happening in the industry, like, will we be able to, you know, keep a similar growth rates in paracetamol so that the U.S. and the Europe business continue to grow in like more than 25% in FY 2024 also? Yes, Yogesh. paracetamol we see a very clear growth and also there's a move away from our India's biggest competitor. People are wanting to buy more from other areas. Unfortunately or fortunately, only 2 countries in the world make paracetamol. The U.S. production is very little. There is a move to move towards more reliable suppliers. We being in this business for more than 30 years, people trust us and we see more and more business coming our way. Not only the paracetamol API, we have competition for paracetamol API from many other people. When it comes to PFI and tablets, we are in a very sweet spot, and most of our customers are moving away from API into PFIs and FDs. Today, our paracetamol FDs by themselves are about 50% of our total API capacity. This is going to go up. Once people are locked up with FDs with you, some of the biggest innovators, biggest brand leaders in the world are locked up with us. Also we have our own OTC front in the U.S. We are supplying to store brands like Walmart, Target and other people. We are also licensing many people in Europe with our own doses for paracetamol and metformin and other products. We are also working on South Africa. We are working in Southeast Asia, Australia. Many of these places there's a lot of interest and we are licensing products and we have no doubt paracetamol market will keep growing for us. Overall, the market grows in single digits, low single digits, but for us it's going to grow at a much rapid pace because there are not too many reliable suppliers in the world today. Thank you, sir, for the comprehensive answer. Just one, balance sheet related question. There's a jump in lease liabilities, although the number is small, from like INR 7 crores to about INR 70 crores. What would be the driver for it? Sorry, which head you said? lease liabilities under balance sheet. Yeah, sure. We have taken a warehouse under lease for our USA facilities. GPAC, we have done and also we have taken a warehouse under lease. Okay. Sure. Thank you, sir. There is a asset also of right of use asset and there is a lease liability also. Sure, sure, sir. Thanks. Thank you. Ladies and gentlemen, we'll be taking the last question that is on the line of Rashmi Shetty from Dolat Capital. Please go ahead. Yeah, thanks for the follow-up. Sir, out of your INR 700 crore CapEx, you mentioned that for Genome Valley INR 250 crore project would be completed by FY 2024. What about this, green chemical initiative? You know, when are we going to complete our project, and when do we expect the commercialization and everything to happen? One product, like I said, the piloting will be done in September of this year. Another product, there will be a little more CapEx, but the commercial production will start in end of 25 or early 26. That will be the first product. 26 we expect another product also to come online, possibly end of 26. These products are basically FG products or, I mean, or the API products? These are KSMs for KSMs and the chemicals that go into making the KSMs for paracetamol and metformin to start with. We'll follow up with other products. Understood. One last question on PFI segment. You know, I mean, we were getting lot of orders from the South American market like LATAM and all. But in second half of FY 2023, we have seen a very subdued growth. That is why we completed with a single digit sort of growth in FY 2023. In FY 2024 and 2025, how do we see the demand? Are we expecting that it should clock back double digit sort of growth? Yeah, I will just clarify this. You know, PFI third party sales has come down. Why? Because, you know, we have used that for FD business. Understood. Where the margins are also better. PFI has become a unit transfer to FD for third party sales. Okay. Okay. We should normally build up the similar sort of growth in FY 24, 25 also. Yeah. You know, better to see FD growth. You, if you are modeling, you can model for FD business growth. Got it, sir. Thank you. That's it from my side. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for their closing comments. Thank you very much, ladies and gentlemen. We had some very interesting Q&A session today, and I was quite excited to share my thoughts on the green initiative we are going through. I would like to thank you once again and end this meeting on a very positive note about our green chemistry. Thank you very much. Thank you, members of the management team. Ladies and gentlemen, on behalf of Granules India Limited, that concludes this conference call. We thank you for joining us and you may now disconnect your lines. Thank you.