Ladies and gentlemen, good day, and welcome to Q3 and nine-month FY 2026 results conference call of Fredun Pharmaceuticals Limited, hosted by Kirin Advisors Private Limited. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand over the call to Ms. Sakshi Panjwani from Kirin Advisors Private Limited. Thank you, and over to you, ma'am. Good day, everyone. On behalf of Kirin Advisors, I welcome you all to the Q3 and nine-month FY 2026 earnings conference call of Fredun Pharmaceuticals Limited. We have today with us Mr. Fredun Mistry, Managing Director of the company, along with members of the management team, Mr. Rakesh, Mr. Gajanan, Mr. Khan. Before handing over the call to Fredun, sir, to address your questions, let me briefly walk you through the company's performance for the quarter and nine months ended FY 2026. In the Q3 FY 2026, total income stood at INR 160.92 crore, registering a strong growth of 57% year-on-year. EBITDA came in at INR 26.34 crore, reflecting a robust growth of 99% year-on-year. EBITDA margins improved to 16%, expanded by 384 basis points. Net profit for the quarter stood at INR 10.48 crore, nearly doubling with a growth of 96% year-on-year. Net profit margin improved to 7%, while EPS stood at INR 22.19 crore. For the nine-month period, total income reached INR 426 crore, marking a 48% year-on-year growth. EBITDA stood at INR 65.66, up by 74% year-on-year, while EBITDA margin improving to 15%, an expansion of 237 basis points. Net profit increased to INR 26.98 crore, delivering a strong 96% growth year-on-year. Net profit margin improved to 6% and EPS stood at INR 57.13 crore. Overall, the company has demonstrated strong revenue growth along with meaningful margin expansion and improved profitability during both the quarter and nine-month period. With that brief overview, I would now like to hand over to Fredun, sir, for taking your questions. We can now open the floor for Q&A. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on 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, in order to ensure that the management is able to address questions from all participants in this conference, please restrict your question to one per participant. Should you have a follow-up question, please rejoin the queue. And also, please note, do not ask repetitive questions. Ladies and gentlemen, we will wait for a moment while the questions assemble. The first question is from the line of Abhijit from AG Capital. Please proceed. Hi, good afternoon. Am I audible? Yes Yes, sir, you're audible. Right. Okay. Good afternoon to the team. Good afternoon, Mr. Fredun. I had a two-part question. The first part of that question was that, given the growth that you're seeing, obviously it is higher than what you had anticipated. Do you see any immediate requirements for funds? Obviously, you have done a few IP and based on funds. But, and I-- and you said that, you know, the working capital cycle improvements will take some time. So I am sure that cash generation might be chock-a-blocked, for the short term. But in the next 12 months-18 months, do you think that the funds at hand are sufficient for the kind of growth that, Fredun Pharma is seeing, or do you think that there will be another round of funding that would be required? Okay. That's both, both parts of your question? Yeah. Sorry. And the second part is that, given, you know, the growth that you're seeing and obviously, the newer parts of the business, the Nutri and the pet care must be, you know, contributing handsomely to the growth. I think that, the next two to three years, obviously, the kind of guidance that you have given seems to be a bit conservative. So can you just throw some light on that also? That's it. Thank you. Sure. Sure. So addressing your first question, we are expanding quite rapidly. We are right now also increasing our production capacities at our current plants, and we have also added new partner facilities where we also manufacture across the various locations. So we have around 37 of those. Currently, the way we are anticipating that, the new brands which we have launched in the last 2 years-3 years are suddenly taking a lot of traction. The growth that we have seen is because many of our products across various brands that we've launched in various segments that we've launched have picked up quite well and are doing very well in the pockets that we have launched them. So-... Yes, we do not envision any sudden need of funds in the next 12 months-18 months. Business is dynamic. We are growing. If there is a need of funds, maybe after 18 months or 24 months or 30 months, we might look into it. If we have to raise funds for a different division or something, we might. There is nothing on the table right now, and there is no immediate need for any funds for that. The second part of your question was, if you can. Yeah. I just wanted to understand that given the growth that we are seeing in the company and also- Ah, the conservative numbers. Yeah. If you have seen my BSE guidances from 2016 onwards, every single guidance has been conservative. Yes. Because I do not, you know, believe in, you know, just giving a number and then if I overachieve that number, I'm comfortable. I don't want to be ever in a position where I'm underachieving a number. We have to take into factor market situations. We have to take into factor so many of the situations that arise on a day-to-day basis. It's better to be conservative. Our conservative numbers are also robust growth. Our investors, our partners, the people who believe in us need to be in sync with the journey. That is what I want. If we overachieve, yes, we might have a better guidance maybe next year or the year later. We are on track to achieving our guidances. We have taken buffers for any unforeseen circumstances that may arise, but currently, the trajectory on which multiple of our divisions are going, I think we are quite comfortable in overachieving those. Okay. Thank you, sir. Thank you for your time. Thanks. Thank you. The next question is from the line of Pritesh from Lucky. Please proceed. Yeah. Hello, sir. So just one question: In the nine months, what is the growth in the Legacy Business and the size of the Legacy Business almost? And what is the size of the New Age Business? If you could just give that split for the nine months. Yes. So, I have explained this in previous things. I'll again say, the legacy business is set to grow at somewhere around 12%-18% year-on-year. Oh. Hello? I'm asking your performance in the nine months, what it has done? Yes, yes. I will address that. Uh, okay. We expect to grow at around 12%-18% year-on-year for the next 5 years-6 years, based on our registration. Mm-hmm. So last year, our exports, our direct exports, were about 118-120 crore. Our institutional sales was around 40 crore. Our third party business and our tolling business constituted for about 100 crore. So on that basis, this year we will, on the 9-month basis, proactively, we have grown at around 15%-20% on that. Okay. Can you then tell us what is the size of the... Can I come in, sir? Yeah, ma'am. Can you please rejoin the queue? What? Hello? Hello. I'll answer that question. Hello? Hello. Hello. Yeah. Yeah, yeah. I just told you. So the institutional sales, the export business and the third party business on last year, on that, about INR 110 crore, INR 45 crore and INR 90 will grow at around 15%-18%, which it has grown. So that number will be somewhere around close to that same number as well, plus or minus a crore or two. No problem. How much is the size of the new business in the nine months? How much per portion of your revenue is now new business? The remaining, remaining portion of that business is the New Age business. This year, we are pegged—this year at year-end closing, we are pegged to do somewhere around INR 60 crore of our GH business, around INR 42 crore of our pet care business, around INR 26 crore of our nutritional business. That gives us a head runway to reach around INR 600 crore, and we are comfortable, and around INR 550-INR 580 crore, and we will easily achieve those numbers. The remaining part is the New Age business, which includes mobility, which includes Dermaceutics, which includes cosmetics. Can you update us on the biscuits line, the pet biscuits line? Has it started and what revenue run rate it is? The pet biscuits line is doing phenomenally well. The revenues and numbers, right now we are adding more and more divisions right now and products. We started production in the second quarter, actually third quarter of this year. So this quarter. So the numbers you will start showing in from this quarter and the next quarter onwards. Okay. It will start showing from next quarter? Sorry to interrupt. No, the numbers will start showing- Sorry to interrupt. From this quarter. The numbers will start showing from this quarter. ... Okay. Thank you, sir. Bye. Thank you very much. Thank you. Ladies and gentlemen, in order to ensure that management is able to address questions from the participants in this conference, please restrict your question one per participant. Should you have a follow-up question, please rejoin the queue. Also, please note, do not ask repetitive questions. The next question is from the line of Sayandip from Eureka Stock and Share Broking Services. Please proceed. Hello. Am I audible? Yeah, hi. Yes, you're audible, sir. Hi, am I audible? Yes. Sir, just first of all, thank you for giving the opportunity and congratulations for the good set of numbers. I just have a simple bookkeeping question. We have seen, steep jump in finance costs as well as other expenses. Can you throw some light upon this? Yeah. Any growing company and rapidly expanding company has always requires working capital, so certain things. Plus we have changed our banks also. So and we have taken new machinery loans also. So those all add up to the finance cost part of it. This will decline over the next two to three quarters because our fundraised money has come in this quarter, actually, on the third quarter. And we are going to sizably use it for working capital as planned. And also we will have our own internal cash flows, which are improving, as you can see. So that's it. It's part of growing a company. Okay. Sir, I just want to know about margin side. We have seen improvement in gross margin over the last 2 years-3 years. I just want to know, does this margin be sustainable for next 2-3 years? And what is your outlook on key raw material costs over the next 2-3 years? As any number grows, you guys are in the number business. Any number grows, the bigger it gets, you cannot sustain the same percentage growth. On a smaller number, you can sustain a percentage growth. On a larger number, it is not possible to sustain a number. It's not technically possible. But because our numbers are small right now, in the foreseeable future, we are okay to see it. There will be a sudden growth in the profits even further in the next 2-3 years, because of the operational efficiencies coming into our high margin business, especially Dermaceutics, especially our pet care, especially our new line of businesses. So you might in fact see a further jump in the profits coming in the next 6 quarters-7 quarters. And then it might have a gradual growth phase from there. So, that's about it. Okay. Thank you. Thank you. Before we take the next question, a reminder to all participants, anyone who wishes to ask question may press star and one on their touchtone telephone. I repeat, participants who wish to ask question, please press star and one on their touchtone phone. The next question is from the line of Dikshit Joshi from Whitestone Financial Advisors. Please proceed. Hello? Hello? Sir, the participant- Hello. Has been disconnected. Can we move further? Yes, sure. The next question is from the line of Gaurav Shukla from Finvest. Please proceed. Good afternoon, sir. I'm audible? Yes. Good afternoon. Sir, congratulations for good set of numbers, and thank you for giving me a chance to ask question. Sir, one thing I want to ask, that deal has happened, India and US and India and EU. What will be effect of this deal in this, our company performance? There will be no effect. We don't sell any products to U.S., and neither do we sell any products to Europe, neither do we intend to sell any products to U.S. The companies which are manufacturing in Europe, who are planning to sell to India, will still be extremely non-competitive into certain of our products that we do. So, overall, the products don't bother us. We are predominantly focused for the next decade to manufacturing in India, for India. So, it does not affect our plans, it does not affect our numbers, doesn't affect our profitability or our sales at all. Okay, sir. In last con call, sir, it is written, it is written that we have outlined that, you, you have said that in FY 2029, our revenue will be fully driven by vintage generics, and FY 2032, 51 will be come from U.S. business. That's why I, I asked. It's not U.S., it's New Age Business. New Age, not U.S.... 51% of our business will come from New Age Business. New Age Business is the brands that we are doing mobility. Written in U.S. Okay, thank you, sir. Maybe. It might be a mistake. I will get them corrected. Not U.S. business, New Age business. In last transcript, U.S. written, so I have asked. Okay, thank you. Okay. Okay. No, no. Yeah. Yeah. Thank you. The next question is from the line of Kush from Care PMS. Please proceed. Hi. I wanted to understand about the seasonality in the business. Generally, March quarter is heavy in terms of revenues, whereas margins are lower versus normal average. What would be the reason for the same? See, like, like all sellers, we are selling to importers, distributors, wholesalers. So like how we have a sale target, they have a purchase target. So if you see our numbers, if you see our business from 1995 onwards, our last quarter is always higher. It's a part of the business that we are in. And when you have a higher number, you have to give schemes, you have to give discounts, month-end schemes, year-end closing schemes. Each distribution, each retail, I mean, CNS and all those have targets, products discount, products discount. So definitely people would want to buy more. It allows our products to penetrate further into the market, and it allows our visibility of our products further. The idea of giving our products in bulk and sometimes giving a slight discount also on it allows that shelf products. And the more our products stay on the shelf, someone else's products is not on that shelf. And that allows us further growth as we go. As we go into a New Age business, that seasonality will change because we're doing the pet care ethical marketing and also OTC marketing. We are doing cosmetics OTC marketing and Dermaceutics ethical marketing. We are also planning specialized Dermaceutics ethical marketing. We are entering into hormones. So over the next months 5 years-6 years the strong change in the last quarter will decline. I think all quarters will be the same. The way our business goes, the first quarter is always the weakest, the last quarter is always the strongest. Got it. Got it. Margins in last 2, 3 quarters have been improving. What would- Yeah. be the sustainable margin that we feel for our current business, say, Uh- Over the next one to two years? See, anything, anything, anything over 5%-6% is a great margin at the rate that we are growing. Because our top line is growing, our margins are also growing. Margin growth, you will see a sudden increase after a few quarters, once the cost efficiencies of the New Age brands start kicking in, because they are intrinsically higher gross margin products, 50%, 60%, 70% gross margin products. But right now we are in the placement, in some places we are in penetration, some places we are in repeat sales and diversifying our portfolio. So over cost efficiencies, once they start hitting in, it will definitely hit our numbers. So but if you, if you see the margins, I, I would say, what we have right now, we should consider it. As I said earlier in the call, I love being conservative. So 5%-6% you mentioned PAT margins? Yeah, that's, that's about it. Okay. Yeah. Okay. And- How would And that. Yeah, yeah, please continue, sir. Yeah, yeah. So that will improve over time, as I've explained to you why. Yes. Yeah. Sure, sure, sure. And, so continuing on the answer, how do you see the trajectory of New Age Business from here onwards, say, by FY 2027, 2028? How do you see the growth, and where do you see the mix? I've said in multiple calls before, by 2029-2030, 51% of the business should be from the New Age business. That's what we are targeting. We are growing, because we are smaller numbers right now, 20%-25% growth in each of the divisions. Year-on-year, some divisions are growing even faster because they have a smaller base. We are quite comfortable in what we have. When you are launching a product across multiple states, you cannot directly determine 5% growth and 10% growth and 50% growth, because there are a lot of challenges that take place in launching the product. However, we have surmounted those challenges, and we have still achieved a 25% growth year-on-year on the new brand since we've launched it, since 2020. So we are comfortable on that growth path. The vintage business will grow at between 12%-18%. Right. Okay, got it. Thank you so much, sir. Thank you. The next question is from the line of Dixit Doshi from Whitestone Financial Advisors Private Limited. Please proceed. Yeah, thanks for the opportunity. So my first question is, if you can give the as of December, how much is our inventory, trade receivable and loan? Yeah. So those, those numbers are already in our balance sheet and things which are declared. Inventories are on the same level as the quarter before, absolutely the same level. And trade receivables have drastically reduced, but they are again dynamic as we are into local sales. Once it goes to the distributor level, the orders are cyclic. You don't, you don't sell, we are not D2C company, so when in certain months you will have higher sales, certain months you will have lower sales. In December, I mean, on 31st March, if we have to consider in Indian market and at least a 90-day credit period, on 31st March, you will see a slightly higher debtor sales. If you see, on, in the first quarter, you will see lower debtor sales. Same thing happened, last calendar year also. So this financial year also. Last year, our inventory, our receivables were INR 177 crore. But, we received almost INR 380 crore of receivables till September 2025. So, again, our receivables went down to around 80-85 crore, even after the turnover increasing by 50%-60%. So, this is not, pharma sales is where you have bulk sales and, you don't have a daily sales. In the sense, you don't sell everything daily, on, per day average. It is for 10 days you will have a lot of sales, then for 2 days-3 days because of the production cycles, because the unique nature of business has this cyclic nature. So, a quarter, sometimes production times are 2 months, sometimes they are 2.5 months, sometimes they are 1.5 months. So the quarters are sharp 3 months, so numbers will change quarter and quarter. But if a sharp financial analyst will understand the nature of business and see the kind of receivables averaged over the last 2 quarters-3 quarters, they will understand that, yes, the receivables are quite robust and the credit levels are remaining the same, and the debtor levels are remain same, plus the inventory is identical to what it was last quarter. Okay. So, more or less- Sorry to interrupt, sir. No, no, I am not- Mr. Mithu. The new question, just reconfirming. All right. So what you are saying that, the trade receivables are, and inventory are more or less at similar level of what it was reported in September? Yes. Yes. Okay. Okay, I'll join back in the queue. Thank you. Thank you. The next question is from the line of Lavnish from New Ocean Asset Management. Please proceed. Yeah, hi, Medhora. Can you hear me? Yeah. Hi, hi. How are you? Very well, thank you. I just have one question and one suggestion. Okay. My suggestion is that, please, you know, as part of your quarterly earnings release, please, you know, provide us the breakup of the legacy business and the, the New Age Business. And that's the metric that most investors are actively trying to figure out. The second question that I also have, the, the question that I have is, the legacy business, with your current, sort of, establishment and cost, what kind of growth can you, can you, get in the, in the New Age Business? And when do you think some of the operating leverage will start to play out? Yeah. As I said earlier, the vintage business, that's what I want to call it, the legacy business, called the vintage business. Uh-hmm. That will be growing at around 12%-18% year-on-year for the next 5 years-7 years. The reason why it will grow at this percent is because we have about 1,300-1,400 registrations in the pipeline. Those registrations are going to keep on kicking in, and they're gonna come on New Age. I mean, in the New Age business, the growth is about 20%-25%. Mm. Operational efficiencies in certain parts, certain divisions. We cannot launch all states at the same time. We have to launch Maharashtra. Mm. Then after, say, 3 months, 6 months, we launch, say, Karnataka, then we launch Kerala. We can't launch the whole India at the same time. Now, Maharashtra will start getting operationally leveraged, say, within 9 months. But, now we have started Karnataka, so you are again going to be putting in funds and energy into that state. So considering that we are doing this off and on for the last 4.5 years for multiple brands, in the next 5 quarters-6 quarters, you will see a good set of numbers, and that is what I told the other participants as well. Uh-hmm. And a few other... I mean, the same questions that were- Yeah asked earlier, that, yes, between 5-7 quarters Yeah -you will see some kind of leverage, coming in some kind of brands. Sure. So the only request I have is, you know, going forward, you know, quarterly earnings release, please try and- Mm-hmm. Give the revenue breakup between sort of Vintage and the New Age business. So, so that's, that's the only suggestion I have. Sure, we'll do that. Thank you. Sure, it's a good suggestion. We'll keep that in mind. Thanks. Appreciate it. Thank you. Thank you. The next question is from the line of Ishika from Priniti Ventures. Please proceed. Yeah. Hi, thank you for taking my question. I just wanted to know as the New Age business scales and takes a larger share of revenue in the mix over the next 2 years-3 years, how should we think about the manufacturing mix, like specifically the CMO versus in-house manufacturing? Will the New Age business be more asset light, or will it increasingly be manufactured internally? Yeah, good question. There are certain products—I mean, of course, one plant cannot manufacture every single product. We are into Mobilitics, mobility products. We are into pet care. We are into herbal nutraceutical. We are ourselves into pharmaceuticals. We have 1,700 products, but at the same time, we have other things. So, there is a lot of variance in kinds of product type. Now we are in our plants, in the cluster of three plants that we have, and the fourth one that we've just started. We are making somewhere close to around 2,000 kind of SKUs. But, definitely, say like in our mobility range, we have walkers and we have wheelchairs, and we have... So, we are definitely not going to start a wheelchair plant and a walker plant, at least anytime soon. So, of course, the new things that we are going to start is going to be asset light. It suits our thing also. We don't want to start manufacturing everything we sell. We want to use someone else's cost efficiencies which have been achieved and use those to penetrate further into the markets that we already have. So, say 4 years-5 years from now, more and more products will be manufactured, not directly by us. Okay, understood. Thank you so much. Thank you. The next question is from the line of Keshav Tosniwal from Kanakia Capital. Please proceed. Hi, Fredun. Congratulations for a great set of numbers again. Like I wanted to understand more with regard to mobility and beauty brand, especially with regard to mobility. Like I see, like you visit any chemist shop, as there is a pamper section, there is a mobility section, too. For a company like us who has always believed into penetration of distribution, like at least one product of Fredun should be there in, like, every chemist shop. How- Yes. How is the mobility going for us? And three, four years down the line, how big you see this mobility brand getting created? Because in mobility- In mobility- Brand is just that product, right? Yes, yes. So I mean, you know, people... I'll just explain on the mobility front. People right now relate to mobility as knee brace, leg brace, back brace, right? But it has more than 800 products. We have also launched a Mobilitics brand, which is our brand. Our ortho brand is called Brace On. Our BP meters, our glucometers is called Kegene, and our nebulizers are called Neb On. We have also launched a physiotherapist product-related brand called Mobilitics, Fredun Mobilitics, which also comes under the Fredun Mobility umbrella. So, we are not only planning, we want, and we will ensure that our products are there in most of the retail outlets. We are adding almost 30-40 retail outlets every week in the markets that we are doing right now, like consistently. The physiotherapy part of it are also being launched in April, where it will go to all the physiotherapists, and those products will be specifically tailored for the physiotherapists, which the physiotherapists can further sell to their clients and also utilize themselves. So that will encompass the entire range of the mobility segment and sector. So we are doing quite well. We are doing quite well, and well, step by step, we are going to launch these products. It is growing almost at 25%-30% year-on-year. This year we'll anticipate further growth also. I mean, I'm talking about the coming year, because we are adding another 4-5 states, and that will kind of complete almost 60% of India. These are volumetric products, so we cannot penetrate like a pharma products, where you can just put in 20,000, 20,000 packs. This, you have to put in 100 chairs, you have to put in 300 chairs. You have to get the market demand for it. You see the products, they will feel it. They will have a tactile understanding of the product. Then they will place further orders, because these are volumetric products. So penetration for any company in Mobilitics is, and in mobility segment is slow. But it is for us, we have got such a good response that we are now selling, I think, I think one of the highest number of wheelchairs in the state. In Maharashtra, at least, we are selling practically most of the places in Mumbai have our products, and that will continue to go across states. Sir, the line for the participant has been disconnected. Can we move further? Yeah, yeah, sure. The next question is from the line of Pal Balar from Trinetra Asset Managers. Please proceed. Hello. Thank you for giving me the opportunity, and congrats on good set of numbers. Sir, I just wanted to ask you, like, do we see any kind of inventory write-off in near future? Inventory write-off is not possible in our. Our write-off of inventory is, like, INR 1,000, INR 1,400, INR 7,000, like that, sometimes if there is any damage. Big inventory, generally in pharmaceuticals, the unit inventory of the raw material is around 3-5 years, so there is no question of any pertinent write-off at this point in stage or even in the conceivable future. Okay. Okay, thank you. That's it from my side, and all the best. Thank you. Thank you. Ladies and gentlemen, that was the last question from the participant. I now hand over the conference to Miss Sakshi Panjwani from Kirin Advisors Private Limited for closing comments. Over to you, ma'am. Thank you everyone for joining the conference call of Fredun Pharmaceuticals Limited. If you have any queries, you can write to us at research@kirinadvisors.com, and thanks for the conference call. Thank you, Keith John. Good day. Thank you. God bless. Thanks. Thank you. On behalf of Kirin Advisors Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.