Please note that this conference is being recorded. I now hand the conference over to Mr. Irfan Rahim from Orient Capital. Thank you, over to you, sir. Thank you, Seema. Good evening, everyone. Myself, Irfan Rahim from Orient Capital. We are an investor relation advisor to the company. On behalf of Granules India, I extend a warm welcome to all participants on Q1 FY 2024 financial results discussion call. Today, on the call, I'm joined by Dr. Krishna Prasad, sir, Chairman and Managing Director, Dr. K.V.S Ram Rao, sir, Joint Managing Director and Chief Executive Officer, Ms. Priyanka, Executive Director, GPI and GUSA, Mr. Mukesh Meena, Chief Financial Officer, and Mr. Puneet, Head Investor Relation and GM Business Finance. I hope everyone had an opportunity to go through our investor deck and press release that we have uploaded on exchanges and on company's website. Before starting this call, I would like to give a short disclaimer. This call may contain some of the forward-looking statements, which are completely based upon our beliefs, opinions, and expectations as of today. These statements are not guarantee of our future performance and involve risk and uncertainties. With this, I hand over the call to Dr. Krishna Prasad, sir. Over to you, sir. Thank you. Thank you, Irfan. A very good evening to all of you, ladies and gentlemen, and thank you very much for attending our Q1 earnings call today. A detailed presentation of our Q1 FY 2024 performance has been uploaded to our website, and I am sure all of you would have gone through it by now. IT update. Firstly, I would like to update you regarding the recent cyberattack incident. Our systems were breached by a ransomware group on the 22 May. The effect of this included a breach of our systems and theft of our data. While swift measures were taken to contain and mitigate the situation and production activities were restored to a large, large extent by the first half of July, there were a lot of restoration activities on the quality front which are non-negotiable. Due to this, releases of products were delayed, and there were several scheduling conflicts that will percolate their way into Q2 as well. By early Q3, we would have made up for all the backlogs, and production activities will be back to normal. The impact of these production timelines have delayed some of our launches, which will now move to Q3 and Q4 versus the original Q2. Barring Q1 and Q2, our growth trajectory is on track. While we are confident of getting back on track post-Q2, there will be a revenue loss for the year, which will be irrecoverable, the value of which cannot be entirely estimated at this time. We will continue to strive to strengthen our IT systems and processes, so we do not have an incident like this in future. FDA inspection and product approval. During the quarter, we had two FDA inspections at GD Mettler plant in Hyderabad and at Unit four API plant in Vizag. Both inspections were completed with 0 483 observations. We recently concluded a pharmacovigilance audit at GPI for all our products, which we went through with 0 483 observations as well. With GPAC audit in Q4 of last year, we had 4 consecutive US FDA inspections with 0 483 observations. During the quarter, we also received the EIR for Gagillapur facility. During Q1, we received 4 ANDA approvals. These were for Venlafaxine extended-release capsules, Metoprolol Succinate extended-release tablets, Nebivolol tablets, and Ibu plus paracetamol combination. The construction of our new formulation facility at Genome Valley is progressing at a good pace, and we anticipate the completion of phase I by October 2023 and phase II by May 2024. Upon completion, this plant will increase our current capacity of 24 billion units of tablets by an additional 8 billion units. Along with the recently launched greenfield packaging facility in Virginia, we now have our capacity in place for us to cater to emerging new opportunities and demand in the near future. R&D. Over the past one year, we have strengthened our R&D and product development capabilities, and we now have close to 300 strong R&D team members across our various laboratories at Genome Valley, Pragati Nagar in Hyderabad, Pune, and Virginia. Shortly, Dr. KVS Rama Rao will take you through more and explain about our R&D. These are geared towards fast-tracking integrated product development, building expertise in the area of controlled substances, complex products, and biocatalysis and enzymes. As of today, we have 57 approved US ANDAs, 5 European dossiers, 3 in the UK, 6 in Canada, and 1 in other regions. We have a total of 42 DMFs filed across several regions. Climate change and sustainability opportunity. The global climate crisis, rising temperatures, extreme weather events, and environmental degradation have heightened the call for transformative change. Businesses that can meet the need for innovative and sustainable products will be well-positioned to capitalize on the emerging opportunities and succeed in the years to come. Granules is taking a pioneering approach at embedding sustainability within its business operations and decision-making processes. Our ambition is to become an industry leader and global forerunner in sustainability, driving positive change in healthcare. Driven by a strong sense of environmental responsibility, we are announcing our commitment to a sustainable future by setting a goal to reach net zero by 2050. Granules CZRO. Earlier this year, we announced our partnership with Greenko to establish the integrated green pharmaceutical zone in Kakinada, Andhra Pradesh. Granules CZRO marks a significant milestone in our journey towards decarbonization across the supply chain, including mitigation of scope 3 emissions and aiming for a near net zero carbon footprint on cradle-to-gate basis. At CZRO, we are adopting a frugal approach to investment, prioritizing a phased and stage-gated strategy. We have identified and finalized two sites, Vizag with 12 acres, and at Kakinada, 100 acres. The first phase will focus on strengthening our core business for backward integration of paracetamol and metformin. During phase I at Vizag, we are putting up a pilot plant for DCDA and a commercial plant for PAP. The pilot DCDA plant will be completed by end of FY 2024, and commercial PAP plant is expected to be completed by end of FY 2025. The project work for phase II at Kakinada will start in FY 2025, after completion of the detailed feasibility report, and once we have all the statutory approvals in place. Organization transformation. Over the past 1 year, we have shared our roadmap for organization transformation. The 3 central themes of this transformation journey are strengthening the core, R&D and innovation and sustainability, the themes on which I have elaborated earlier in my remarks. In summary, our transformation journey rests on a steadfast dedication to creating a future-ready organization, capable of thriving in the face of evolving challenges and seizing emerging opportunities. Our new purpose, vision, and values. As we embark on this transformation journey, we have revitalized our purpose, vision, and values, ensuring they embody our commitment to transformation. Our newly adopted purpose is healing lives responsibly through pioneering green science. It is just not a statement, it is the very essence of our passion, guiding us towards transforming healthcare through innovation and sustainability. Our vision is to establish ourselves as a world leader in green chemical and pharmaceutical industry by harnessing cutting-edge technologies to enhance quality of life. Our vision is ambitious, inspiring us to push boundaries, redefine possibilities, and create change that extends far beyond our horizons. With this, I hand over the call to Dr. K.V.S. Rama Rao. Thank you, Chairman. Good evening, everyone. I will cover in little more detail the quality audits of our facilities, our response to IT incidents, and progress on our R&D-led transformation. On quality, Granules India stands as a responsible leader in the manufacturing industry, dedicated to providing medicinal products that adhere to the highest standards of quality and compliance. Compliance is considered essential and given utmost priority within the organization. It plays a vital role in nurturing a culture of quality among all individuals, resulting in a transformation that permeates throughout the organization. The recent USFDA inspections of 2 of our API manufacturing facilities at Hyderabad and Vizag resulted in 0 483. The regulatory success in the manufacturing plants was in spite of a critical cyberattack at the manufacturing sites. The methodology of handling the cyberattack, the investigational reports, the actions taken post the cyberattack were well appreciated. A recent pharmacovigilance inspection of our Chantilly facility also resulted in zero observations. These outcomes demonstrate the management's commitment towards quality. On the cyberattack and our bounce back, the issue of cyberattack and our actions have already been notified. A little bit has been told by the chairman right now. I wish to present a brief summary. On 24 May 2023, systems got attacked by LockBit 3.0 ransomware, which encrypted the critical servers, mailboxes, networks, and endpoints. Immediate actions were taken post the incident at all our facilities, including containment and isolation. All the systems, including servers and endpoints, were disconnected from the network at switch level. Affected servers and desktops were switched off and isolated them from the network to contain any further spread. We disabled the Internet access and email flows so that the systems could be disconnected with the external environment to contain any data exfiltration. The restoration methodology created a completely new green network, with new network and micro segmentation. We added all the systems into the new network. We built new servers in place of affected servers, such as Empower, AD servers, ADC servers, separate VLANs, R&D servers, file servers, and QFUC systems, and enterprise applications like DMS, QAMS, et cetera, and restored all the plants, all manufacturing facilities, and the support services within the shortest possible time, including qualifications as required by the regulatory environment. Serialization of 4 lines in the manufacturing were restored within 2 weeks, timeline to include qualifications and to restart our manufacturing activities. All the backups were restored in all the Empower servers, which are created new. Standalone systems backups were created with only 1-day data loss, which has been recovered. All the Office 365 mails were cleaned and protected with the security tools and laptops. Trellix and SentinelOne XDR used for monitoring and protection. The mobile device management Intune tool was used to protect mobiles, where all the data protection is installed on all the official mobiles of the organization. We have constituted a team of internal and external experts and designed the system architecture and controls, which enables us to focus on prevention as well as preparation from future attacks. This total solution is expected to be in place in a couple of weeks. A review and governance mechanism is established with the management to bring a sharp organizational focus on this very critical and identified high-risk area. With all these efforts, which have been relentlessly carried out and operations have been restored at all locations, including the US, it has resulted in supply interruptions, which led to shortage of sales in this quarter. Mukesh will brief the details. Regarding the transformation journey, over the years, the Granules R&D strived towards establishing the company's dominance in select generic products and has been very successful in the endeavor, and the effort continues to be the dominant leader in these products. However, in the last one year, there has been a paradigm shift in focus of R&D. The company has shifted its focus on portfolio to ensure that we leverage our core strength and build the future pipeline. This shift in focus called for bolstering the R&D strength, both in terms of manpower, infrastructure, and the analytical equipment. This has resulted in setting up state-of-the-art integrated product development centers in Genome Valley in Hyderabad. This center, where both formulation R&D and API R&D are housed under one roof, seamless execution of projects has happened. The entire development at the center is based on green and eco principle, as enunciated by the chairman just now as the purpose that we want to leave on. In our earlier call, I mentioned. Sorry to interrupt you, sir. Sir, we are unable to hear you clearly, sir. We are losing your audio in between. All right. I'll come here. Now, now, now we are able to hear me clearly? Yes, it's better. Please go ahead. Thank you. In our earlier calls, I mentioned that the renewal focus of the operation are R&D. It's time also to talk a little about its nature and a bit of quantification of the effort. At present, there are more than 30 products which are under various stages of development in our center, which includes oncology, controlled substances, and other therapeutic categories. A majority of these projects are scheduled to be filed in the next couple of quarters. The mix of the portfolio included launch and approval products, Day 181 launches, and first to launch products and NCE-1 filing. The portfolio aims at launching these products globally, globally in all the geographies of our business interest. Yet another significant aspect of the R&D is its focus towards sustainable new technologies. The company is laying special focus on products where the biocatalysis can be successfully employed. To create a differentiation, R&D has joined hands with companies specializing in enzyme design and gene synthesis, and is successful in developing proprietary enzyme solutions for desired chemical transformations. We have had initial success in getting cost-effective, non-intrusive enzymes and have been successful in scaling up at our enzyme facility, which we acquired a couple of quarters ago. We expect the commercialization of these products using the in-house enzymes to happen in the next couple of quarters. This is an outcome of the transformation the company is presently undergoing in the area of science, technology, and innovation. Thank you, all, and I'll hand over to CFO, Mukesh. Thank you, CMD and JMD. Now, let me take you all through the top financial parameters now. The Q1 revenue were INR 9,855 million, as compared to INR 10,196 million in Q1 FY23, a decline of 3%. This decline is primarily on account of business interruption due to the IT incident happened during this quarter. Despite the IT incident, which has impacted expected revenue growth in all geographies and price erosions across markets on year-on-year basis, North America registered a 10% value growth, and Europe registered a 5% value growth. Latin America and ROW revenue decline was steep year-on-year, which is also on account of inventory correction by customers in these regions. Our API business grew year-on-year by-... volumes, despite the impact from the IT incident. Share of PA business has reduced as more customers are converting into FP from PFI, coupled with corrections in inventories in the LATAM and ROW markets. Q1 FY 2024 revenues declined by 18% sequentially as compared to Q4 FY 2023. We are carefully assessing the loss of sales in Q1 FY 2024 due to this IT incident, and our current estimate is more than INR 1,500 million. Sales breakup details as per business division and geographic region is presented in our investor presentation, which is available on the website. Value added. Our value added as percentage of sales for Q1 FY 2024 was 51.4% as compared to 49.6% in Q1 FY 2023. Value Added percentage as compared to Q1 FY 2023 has increased by 1.8 percentage points, primarily on account of better product mix and reduction in rates of key raw materials. Value Added as a percentage of sales for Q1 FY 2024 is up by 3.6 percentage points from Q4 FY 2023, primarily on account of better product mix and reduction in rates of key raw materials. EBITDA and EBITDA margin. EBITDA for the quarter was INR 1,378 million, that is 14% of sales, as compared to INR 2,115 million, that is 20.7% of sales in Q1 FY 2023. A decrease of 35% over the previous year's EBITDA value, mainly on account of reduction in revenue due to the IT incident and increase in operating expenditure in line with the expected revenue increase, coupled with increase in R&D spend by INR 94 million. We were impacted by failure to supply penalties of INR 211 million in GPA this quarter. We have incurred so far about INR 50 million related to the IT incident and its incidental expenses, such as detention and demurrage, due to the business interruption. We have been incurring operating expenses and depreciation in our new packing facility in USA, whose savings will start from Q2 FY 2024 in the form of improvement in VA percentage. Our R&D spend for the quarter was INR 413 million, that is 4.2% to sales, as compared to INR 319 million in Q1 FY 2023, that is 3.1% to sales, and INR 369 million, that is 3.1% to sales in Q4 FY 2023. We are going to continue to spend on R&D in the coming quarter as well for the planned R&D pipelines for our future growth. Net debt. Our net debt was at INR 8,569 million, as compared to INR 7,671 million at the beginning of the year. The net debt has increased by INR 899 million, primarily on account of the reduction in operating cash due to reduction in revenues and operating profit, and also resultant higher cash to cash cycle. Cash to cash cycle was at 170 days in the current quarter, as compared to 132 days at the beginning of the year. The increase is primarily account of the increase in inventories, as we could not sell as per our expected plan due to the IT incident. Operating cash flow. Despite business interruption, we ended operating cash flow with a positive INR 35 million, as compared to INR 1,807 million in Q1 FY 2023. The reduction is primarily on account of lower revenues and operating profit and resultant higher cash to cash cycle. CapEx. CapEx spend during the quarter was INR 741 million. It is in line with our plan for FY 2024, as guided in our last call. ROCE. ROCE for Q1 FY 2024 is 9.4%, as compared to 21.1% in Q4 FY 2023, primarily on account of reduction in EBITDA due to the reasons mentioned earlier. With this, I open the floor for question and answer. Thank you very much, sir. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Thank you. We take the first question from the line of Rahul Veera from Abakkus. Please go ahead, sir. Hi, sir. Sir, just wanted to understand one thing, that since you mentioned there'll be some delay in launches of products from Q2 to Q3, are there any commitments or in terms of supplies for Q2 that you are expecting from these products? I mean, is there a possibility of one more FTS coming through, failure to supply, in Q2 as well? Rahul, we have not committed to anybody. There were interest, there were preliminary discussions with customers, obviously, till the product reaches the US, we have not been making any commitments. Definitely, there's no possibility of FTS on account of late launches. Sure, sure. Fair point. Sir, all the FTS that was required to be accounted this quarter has been done, or any pending FTS is expected in the coming quarters? Yeah, I'll just clarify. The all failure to supply penalties have been fully taken into account in Q1. You know, Priyanka can add it, but I just want to clarify also, you know, Q2, we see that there is a major improvement in the new 3PL, and we don't foresee a major expenditure of failure to supply in Q2. Sure. What was the amount in Q1, sir, for FTS? Q1, INR 211 million. Okay, okay, perfect. This is helpful. Thank you so much. Thank you, sir. Before we take the next question, a reminder to all the participants, if you wish to ask a question, you may please press star and one on your touchtone telephone. We take the next question from the line of Rashmi Shetty from Dolat Capital. Please go ahead. Yeah, thanks for the opportunity. Just a follow-up from the earlier participant. You mentioned INR 21 crore of FTS is sitting in other expenses. This was related to only US geography or with the other markets also? Was this API, specifically API segment, or, you know, it is spread across the segments? This is largely in USA, and it has happened in GPA entity, so this is not related to API. These are, you know, controlled substances and some of those products. Okay. You mentioned that in Q2, I mean, this is all, all done in Q1, right? Now, nothing is expected in Q2. Yeah. you know, the migration of the new TTL happened around Q3, May 2023, and third week of May 2023, and it has, you know, significantly improved with the new TTL now in Q2. No, we don't expect, so too much. It could be very minor FTS, Rashmi. We, we still don't know, but they could be very minor. If I exclude this INR 21 crore from your other expenses, excluding the R&D cost of INR 43 crore, then your other expenses are actually come down quarter on quarter. You know, any specific reason for that, that you have, you know, you are taking some, anything, any cost initiatives or anything like that? See, other expenses also include freight cost and also selling commission, so those are related to sales. In addition to that, the freight rates are also have, you know, slightly reduced sequentially also. There are some failure to supply expenses in the Q4, I said. Okay, got it. You know, can you also quantify what is the loss to sales, you know, due to this IT incident during the quarter? Yeah, just covered in my speech, we are currently, you know, carefully assessing. Our current estimate is more than INR 1,500 million. More than $1,500 million you said. $1,500 million. Okay. So when you said that, you know, all the systems have been restored in July month, is it fair to assume that in the Q2 also we will have some 15, 20 days impact coming in the quarter? There, there, there is some spillover due to quality systems, Rashmi. There would be some, some effect in Q2 also. Q2 not only in loss of some dispatches, the main hit will come from the anticipated launches. What we planned in Q2 will now move to Q3 and Q4. There will be some impact of IT that's coming into Q2, mainly the launches. Okay. For any guidance, would you like to give for FY 2024 on revenue numbers or specifically on EBITDA margin, because of this IT incident that, you know, you are downgrading your earlier EBITDA margin guidance, that it would not be in the range of 18%-20%. Anything you would like to say, or you feel that Q3 and Q4 are sufficient, you know, to adjust, you know, the guidance? Rashmi, in my speech, I mentioned we are assessing how much of the loss sale we can recover, some of it is definitely not recoverable. It's a little difficult to estimate right now, we would definitely not like to give any guidance. Okay, sir. The last question, you know, to Priyanka. You know, if you can revise the number of, you know, what are the total commercial, commercialized launches in the US market, and how many launches are we expecting in Q3 and Q4, I mean, for the entire FY 2024? What is the price erosion currently looks like, whether it is still in high double digits or due to supply disruption it has come down? I think, Priyanka, why don't you take this? Sure. Good evening. I think if I got your question right, your first question was how many launches, how many overall products we have in the US, am I correct? Yeah. What are the total commercialized launches till date, and how many are you planning in FY 2024? What is the price erosion currently looks like, you know, whether it got stabilized from the high double-digit price erosion or if we are still in high double digits. Okay. To answer your first question, in total in the US, we have about 37 to 39 products launched already. Over the next 2 quarters, we have close to... We are definitely going to launch 3 products, but if everything works out, we launch close to 6 products, the effect of which you'll see primarily in FY 2024, FY 2025, my apologies. In terms of price erosion, there has been a sign of things easing up. I said this even in the last investor call. This over, since the beginning of this FY calendar, this, sorry, this fiscal year, I would say it's been pretty much stable, at least for the last 4 months. Okay. Thank you so much. That's it from me. Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star 1 on your touchtone telephone. We take the next question from the line of Tushar from Motilal Oswal Financial Services. Please go ahead, sir. Thanks for the opportunity. Sir, just on this, given that if I adjust for this INR 21 crore failure to supply, then broadly we should be INR 200 crore sort of a run rate for other expenses, right, on an absolute basis in the coming quarters? Yeah, 200, you, you are asking about, the failure to supply, right, INR 21 crore? Excluding failure to supply. Yeah, excluding to failure to supply, the other expenses we cannot take simply as run rate, because some are related to sales expenses also, I just clarified. Freight and, you know, sales commission are also there. There are certain variable expenditure also in other expenses. As a margin trajectory, we'll have a gradual uptick in EBITDA margin, or we'll see a good improvement from Q2 or Q3 onwards? Of course, there will be a gradual improvement in EBITDA. secondly, just on the CapEx with INR 74 crore in Q1, is there any revision in the full year 2024 CapEx guidance? No. Given that we have these issues. We are saying, you know, we are in line with whatever we have guided in our last call, so we are in that, plan. Okay, sir. Thank you. Thank you. Before we take the next question, a reminder to all the participants, anyone who wishes to ask a question may press star one on the touchtone telephone. Ladies and gentlemen, if you wish to ask a question, you may press star one on your touchtone telephone. We take the next question from the line of Deepak Poddar from Sapphire Capital. Please go ahead, sir. Hello? Hello. Yes, yes, we've got. Yeah, thank you very much, sir, for taking my question. Sir, I just have one question on R&D expense. So I think this current quarter, it was around INR 43 crore, right? Yes. So how do we see the trend in coming quarters on R&D expenses? I think, the R&D expenditure is only going to go up in the next three quarters, because as I told in my speech, we are going to really look at filing the products in this year, which will be of a much higher level compared to what we used to do in the last couple of quarters. Therefore, R&D expenses definitely will go up. Go up to INR 43 crores can, I mean, to around INR 50 crores, maybe next 2, 3 quarters, right? Yeah. Q2, can be more than, a little more than 50, but, Q3, Q4, we might spend more. We will spend, we might spend more? Yeah, more than 50 in Q3, Q4. Q3, Q4 will be more than 50, I understood. On EBITDA margin, you, you mentioned, like, we expect a gradual improvement in EBITDA margin, right? Any numerical sense would you be able to provide, I mean, so that we get some understanding? We don't give the guidance, but you could see our gross margin has improved in Q1, and we are looking, Q2 also, you know, gross margin would improve. At the EBITDA level. I was just wondering at the EBITDA. Accordingly, our EBITDA margin will also improve, but we don't give a detailed guidance. Okay. Sure. I think, yeah, that's it from my side. All the very best. Thank you so much. Thank you, sir. We take the next question from the line of Mr. Aditya, an individual investor. Please go ahead, sir. Yeah, thanks for giving the opportunity. Sir, my question is related to this pricing erosion, right? When you talk about the pricing erosion, but I don't see that in the numbers. How one should understand about the pricing erosion in our scenario? I will just clarify. When we have said price erosion, it is Quarter 1 of the last year to the Quarter 1 of the current year. Okay. Last year, Q1, the raw material prices were at, you know, a peak level. Accordingly, sales prices were also at higher level. You know, both have fallen. Our margins, despite, you know, price erosions, we are, you know, trying to maximize. Last year, our gross margin was at... We were at 49% last year. Yeah, currently, we are 50 plus, right? 50 around. Yeah, currently it is 51.4%. Okay. If there is a price erosion or something that sort of, it should reflect in our gross margin, right? If my understanding is correct. No. What I, I am trying to explain is, you know, price is reducing. The key raw material prices are also reducing. My margin% is, you know, currently better, as we are also maximizing the cost improvement areas also. My gross margin is better. Okay. Okay, okay. Since I see there is a lot of employee expenses is going on, as we are ramping up our R&D, could you talk about which areas, like, how much? Because I see there is an increase in R&D in Q3 and Q4. Basically, this year will be investment phase. What kind of talent are we hiring, and what are the areas we are looking forward, and how is our green chemistry is going on? Can you throw some light here? ... Yeah. As mentioned in my speech, there are 3 areas where we have really ramped up our capacities. Number one, in terms of our API and chemical development of the new products, I think, last year we filed 7 drug master files, and this year we are targeting a much higher number. Not only that, we shifted our portfolio to looking at complex products. We are looking at some kind of newer opportunities and the global development of the products. This is one shift which is there in the R&D, which calls for talent in terms of chemistry, analytical chemistry, and also engineering excellence to take the products into smoothly tech transferring into manufacturing. We established this entire talent pool, processes, and systems to enable us to ramp up to this capacity, which is not so easy in less than 1 year, so the whole organization is looking at transformation. The second area of transformation is actually focusing on new technologies. I have been consistent in my last 3 quarters that we have been working on fermentation and biotechnology in the area of enzymes. Every quarter we improve, and this quarter, I told you that we have successfully scaled up the enzymes in our newly acquired facility, which we have taken over about 6 to 8 months before. Then we started building up the enzymes, and we have already started optimizing the products. We hope to commercialize at least 2 products in the next couple of quarters. The third area is in the ANDA filings. This is not only to US, but we have a global filings in Europe and rest of the world. With that type of orientation, the product development has been, you know, it's a paradigm shift in the way we look at product development, including the bio studies. The talent and the expertise has been built to that level to enable us to do global product development and look at various geographies of filing. I think these three areas put together is not only enhancing our capability to file, not only in US, but in the rest of the geographies of business interest, but also the talent and the additional resources which are required to deliver these goods and services. We have continued and continuously committed to making sure that this happen, and therefore, the R&D expenditure will go up in the next three quarters. Aditya, to add to that, the manpower expenses have also gone up at GPAC, the new packaging facility which we started in the US That is to start yielding results only from Q3, end of Q2 to Q3. That's one of the reasons for manpower expenses going up, in addition to R&D manpower. Also, we have increased some capabilities, capacities in our Gagillapur plant, where also the manpower costs have gone up a little bit. Right. Right. Right. Sir, if may ask in, like, for the green chemistry, I think, the growth from these will meaningfully start from FY 2027, right? FY 2026 or 2027, correct? Yes, you, you are in the ballpark number, Aditya. We are like, I covered in my speech, we are setting up a pilot plant for DCDA in Vizag, which will not be green, but we are establishing the technology which we developed in-house. As most of you know, DCDA is not manufactured by anybody outside China. It's a complex chemistry that we were able to break through, but the pilot plant will demonstrate. We've been very cautious in our investments, major investments. Before we go to Kakinada to do the green plant, we are just demonstrating this here for ourselves. Also, PAP also, we are putting up a small demo plant, commercial plant, and later on, we'll scale up in Vizag. 2026, 2027 will, there we will see the real effects. Right. Right. If I see right, for the next 2 years, we have to generate enough cash flow, in order to, like, more give power to the more chemistry and further also. Coming to the shorter term, in these 2 years, since we are having a problem on the pricing, and we are delaying launches for 1 of the quarters, where do you see in this couple of years, you see the growth will coming in? Based on the commercialization of products or which area should we see that there is uptick possible here? Like you heard, Dr. Amar and Priyanka mention, we are filing for a lot of products. Already filed products, we have received some approvals. We will be receiving some more approvals as we go by. Every quarter, there'll be some approvals coming in. All the new launches are going to drive the growth. We do not see cash as a major problem. There could be short, short-term blips, like this quarter, because our cash generation has slowed down. There could be a small blip, but going forward, we don't see a major problem in generating cash to meet our CapEx commitments. There could be blips in a year or 2, but overall, we are confident we can generate and fund these projects internally. Okay. Okay. Talking about the products, these are, since paracetamol and metformin, as we are expanding, any other specialty product we are working on, which gives you the confidence that, we'll, we'll have a good cash flow here? If you could talk about some of the products here. Yeah, Aditya, I cannot name the products, but there are a lot of products that we have been working on in the past, and we have launched. They have actually taken a good shape. In fact, we used to talk of core products, which are paracetamol, metformin, ibuprofen, guaifenesin. Now you see, there are more products that have come into this basket, and more and more products will be adding up. All our current launches, past launches, have been very successful, and controlled substances in the US also are gaining strength. There are a lot of products that are gaining strength, and we expect new launches also to gain strength as we go by. By next year, you would say that we would be adding, one of the meaningful product so that we'll be able to see up in the slides. That will be meaningful contribution to our revenue, or it will be all-. Already there are some products, a few products, which are giving me meaningful revenue. As we go by, definitely, the new launches also will add up. There are some very good products in the new basket. Okay. Okay, thank you, sir. All the best. Wish you all the best. Thank you. Thank you. A reminder to all the participants, if you wish to ask a question, you may press star and one on your touchtone telephone. We take the next question from the line of Ashish Kaur from Standard Chartered Bank. Please go ahead. Yeah, thank you for the opportunity. I just want to know the positive takeaways post this cybersecurity incident, and is there any increase in expense related to cybersecurity going forward? How much time did it take to return to normalcy? This short-term working capital, which was caused because of this cash crunch, do you think it's going to subside post three, four quarters once that things absolutely returns to normal? On the cybersecurity, we have, we have taken three different actions, which are towards prevention as well as preparation of ourselves, to make sure that the organization is very resilient. This includes lot of system architecture improvements, as well as certain new software solutions. We continue to look forward to the new solutions, and also continue to build the system architecture with external experts in such a way that this will, this incident will never repeat. Therefore, this is going to have some kind of an expenditure in terms of the IT as a major area to focus upon, and we continue to invest in this area. Yeah. Do you expect the working capital, that tagline proves almost on the main roads to, gradually come down post when the operations are normal, completely? Yeah, the working capital cycle, CCC days, will dramatically come down for sure. You know, actually, we ended at 132 days. We are at 170 days. We will go to normalcy. The expected plan is to improve over last year. Okay, thank you. Thank you, sir. The next question is from the line of Vikas Sharda from NT Asset Management. Please go ahead, sir. Yeah, hi, good evening. Could you also touch base upon the molecule-wise performance for this quarter? I think it's not included in this quarter's presentation. Because, very consciously, we have not given this in the presentation, because the entire basket has gone through a shift, and, the top three products, four products, are no longer top three or four products. Other products have replaced some of them. This information is becoming very sensitive in regards to competitors because it goes into the public domain, so, we will not be able to give you the breakup. Okay. Could you give some qualitative color on, like, the what's the share of the top three molecules as a trend? Where do you think this ratio is expected to settle, say, in one or two years down the line with new products coming in? Like I said, because some other products have actually replaced the order of the top products. When I, when I give you the breakup, it really gives out a lot of information about what's happening. Like I said, it's sensitive. We would prefer not to discuss that. No problem. Thank you. Thank you. Thank you. The next question is from the line of Minali Shah from Ashika Group. Please go ahead, ma'am. Yeah, can you shed some qualitative light on the new product launches that are expected in the second half of the year? The launches that we are looking at, as Priyanka has just now informed, that we are looking at 3 launches to at least 6-7 launches in Q3 to Q4. Originally, we were planning to do a few launches in Q2. Because of the IT and cybersecurity issues, we have to look at the launches in Q3. Suffice it to say that we have a significant number of launches where approvals have already been, been there, and we expect it to be around 6 and more. Just to add to that, most of these products, if you ask for a qualitative light, they are from our must-stock, and they are relatively more complex products. There is a very large opportunity that's available, at least in the US market, because the primary launches are in the US market. Even those in the European market, which will be launching in Q3-... ongoing for the rest of the year are pretty large in terms of volume and value. Got it. Thanks. My second question is, can you update us on the development of KSMs for the backward integration of paracetamol and metformin? Nirali, like I just mentioned a little while ago, DCDA is one of the key materials for raw materials for metformin, and we are setting up a pilot plant. The commercial plant will we will start in 25. In 24, we would have demonstrated the working of the pilot plant. Para-aminophenol, the other raw material for paracetamol, we are setting up a small commercial plant in Vizag. Once this is demonstrated and parameters are fixed, we will build a bigger plant in Vizag, using all green raw materials in Vizag. In Kakinada, sorry. In Kakinada. Understood. Thank you. Thank you. The next question is from the line of Ms. Richa from Equitymaster. Please go ahead, ma'am. sir, thank you for the opportunity. My question is, you know, with these new launches and the products that you are coming up, where do you see the share of value-added products, which is currently, I think, around 50%? You know, if you could also give a sense of what kind of margin difference is there when you categorize something as value-added versus what is not value-added. That is the first question. The second question is, you know, keeping in, considering that we are keeping our CapEx intact, what kind of incremental debt are you looking at? If you could also, also share the peak debt that we could expect in the coming quarters again. On the new launches, I think, as mentioned by Chairman and in our, in our speech, I think when we start adding new products to our overall portfolio, we see that the value add is going to be better, and that is where we don't want to disclose a lot on the combination and also the% where it will be shifting. Suffice it to say that the number of new product launches, both in controlled substances as well as the launches that we are going to do from India, where we are utilizing our capacities, I think we will be able to really see a good combination of the products changing the mix over a period of next 2 years. Coming to the CapEx investment, I think Mukesh can talk about it. CapEx investment we have guided. This year, we will be doing close to INR 700 crore, including the future growth expansion. That is intact. We are having the same guidance for the rest of the year. My question was on, you know, the incremental debt that you could, that you could go for, for this, considering that there has been some kind of, you know, slowdown in delayed launches, and what is the peak debt that you could expect? There will be some increase in the debt and, you know, to fund increase in working capital also and CapEx also. Operating cash flow, you know, is going to be more or less sufficient if I take 2 to 2.5 years, you know, cumulatively. For the current year, there will be increase in debt. We are not quantifying it yet, otherwise, you know, it would become a guidance. Okay. Sir, I just wanted to understand some kind of, you know, if you could add some color on the margin difference when you categorize something as value-added versus, on an average basis. I'll just say that, I think for a bit, again, like CMD said earlier, that, that is competitive knowledge to a very large extent because we have a limited number of products. I think if it's a value-added, we've already mentioned the names of the products. I think that will end up being a little bit of competitive information, at this point. All right, I understand. Thank you so much. All the best. Thank you. We take the next question from the line of VKS Chaudhary, an investor. Please go ahead, sir. Hello. This is Chaudhary from Hyderabad. My question is about GPI. It has been operational for about more than 3 years, but the, the contribution to the bottom line has been positive only in about 2 quarters, despite having had quite a few, you know, approvals from that side. Is there any reason as to why it's continuing in losses? Hello? Sorry, the question was not very clear. Can you just repeat? It is about GPI. Please. Hello? Your line is not very clear. Can you please repeat your question? Yeah, my question is about GPI. Okay, it has been in operation for more than three years, and had several approvals, including three or four controlled substances. Yet their contribution to the bottom line has been barely positive in 2 quarters. Rest of the quarters, it has been negative. Are there any persistent reasons as to why GPI has been a drag on the company? ... you were not very audible, Mr. Chaudhary, but whatever I understood your question, I'll attempt to answer that. Yeah. First of all, GPI has been in existence for more than three years, for the one. Yeah. It was contributing handsomely to the bottom line a few quarters ago. Now of late, last few quarters, we had, you know, we've been discussing this all along, that we had issues with our 3PM, and which resulted in lot of failure to supply and also loss of sales. This has really impacted us, and overall, even though as a standalone, performance has been fairly okay, but the failure to supply from GPI hit us. That's the main reason why GPI has not contributed much to the bottom line. What about controlled substances, sir? I think you have had about 3 to 4 approvals, but are all of them launched that in consistent? Yeah, all the products have been launched, but, Priyanka, I think it's for you to give this answer. We launched all the products, but because of the ongoing quota issue, I'm sure you've seen, in the news, we are going conservatively on the quantum of market share that we capture. Needless to say, we have launched all the products, at a small scale. Okay. You expect to ramp up in the current and next quarters? Yes. Absolutely. Okay. My second question is about the biotech for A. Are you planning to- Biotech for A? Yeah, your fermentation plant. Hello? Yeah. Are you planning to stick to pharmaceutical related products only, or are you thinking in terms of catering to other industries like textiles, et cetera, from the fermentation and enzyme division? See, currently our focus is to stick to the pharmaceutical industry and to the portfolio that we have. Okay. We are trying to look at this from the perspective of, A, making sure that our products are green, which is a part of our vision and our mission. The second one is to really look at how do you make sure that you bring these new technologies as a long-term sustainability. We are going to stick right now to our own area and our own portfolio. Okay, thank you. Thank you, sir. We take the next question from the line of Mr. Tushar from Motilal Oswal Financial Services. Please go ahead, sir. Yes, thanks for the opportunity again. Just on gross margins, where I see that the proportion of API segment has increased, both year-over-year as well as quarter-over-quarters, still we have seen improvement in the gross margin. Anything which I'm missing out here? Yeah, sure. There is an overall product mix, you know, in API and also in FD. There is overall product mix, which has impacted positively on the gross margin. In addition to that, the key raw material prices also has helped in improving the gross margin. So gross margins will subsequently improve, right, with higher, with recovery in the formulation business in the coming quarters? Yeah. That's right. Okay, thank you. Thank you. The next question is from the line of Madhav Marda from FIL. Please go ahead, sir. Yes, just one quick question. The IT incident that we had, was there any one-off cost related to any consultants that we had to hire or anything else like that, which, which you need to call out for this quarter? IT incident expenses I covered in my speech, is we have incurred about INR 50 million for IT expenses and also related incidental expenses, such as detention and damages, which has impacted the business, the business interest. This, this probably after Q2, or maybe Q2 onwards, should not recur, right? This is related to getting things in order again. Some expenses would be there, but it won't be substantial. We still need to keep strengthening our systems, Madhav. There will be some expenses. Also we may have to sort of hire this security experts or an agency to help us with this. That will also cut the expenses a little bit, but I don't think it will be major. Understood. Got it. Thank you. Thank you. Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to the management for closing comments. ladies and gentlemen, once again, thank you very much for joining us. I, I wish you all a very good night today, and look forward to meeting you with happier results next quarter end. Thank you. Thank you. On behalf of Granules India Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.