Please note that this conference is being recorded. I now hand the conference over to Mr. Krishan Parwani. Thank you, and over to you, sir. Yeah. Hi, good evening, everyone, and thank you for joining us on AMI Organics Q1 earnings conference call. Today we have with us AMI Organics Management, represented by Mr. Naresh Patel, Chairman and Managing Director; Mr. Abhishek Patel, Vice President Strategy; and Mr. Bhavin Shah, Chief Financial Officer. I would now like to invite Mr. Bhavin Shah to initiate the proceedings. Over to you, sir. Thank you. Thank you, Krishan. Good evening, everyone. We are pleased to welcome you all to our earnings conference call to discuss Q1 FY 2025 financials. Please note that a copy of our disclosure is available on the investor section of our website, as well as on the stock exchanges. Please do note that anything said on this call, which reflects our outlook towards the future or which could be construed as forward-looking statements, must be reviewed in conjunction with the risks that the company faces. The conference call is being recorded, and the transcript along with the audio of the same will be made available on the website of the company and exchanges. Please also note that the audio of the conference call is the copyright material of AMI Organics and cannot be copied, rebroadcast, or attributed in press or media without specific and written consent of the company. Today on call along with me, we have Mr. Naresh Patel, Chairman Managing Director, and Mr. Abhishek Patel, Vice President Strategy. Now I would like to hand over the floor to our CMD, Mr. Naresh Patel, for his opening statement. Over to you, sir. Thank you, Bhavin. Good evening, everyone. I hope you all are doing well. A warm welcome to our Q1 FY 2025 earnings conference call. Let me start with an overview of the global chemical industry landscape. Geopolitical instability worldwide has led to extended delivery times and higher freight rates over the past quarter. Although input prices have stabilized, they remain low, continuing to exert pressure on the pricing of finished goods. The competitive threat from China's manufacturing capability remains significant, and I expect certain segments of this chemical sector to stay under pressure. However, specialty players, those relying on a technology-driven process and niche products, are less impacted by China's current market challenges. Regarding the industries we solve, in the Pharmaceutical sector, the advanced pharmaceutical intermediate industry is facing challenges due to oversupply from China. However, while there is some impact on pricing due to lower raw material prices, we are not seeing much impact on our products, given most of our products have application in chronic medications where technology and process are more critical than scale. Therefore, our core products continue to grow strongly. The CDMO space is experiencing strong growth globally, with high inquiry levels for new projects. We are in discussions with many customers with few contracts nearly finalizations. In commodity chemicals, while pricing has stabilized, it remains low. We have managed to withstand this pressure through operational improvements and better asset utilization. In the semiconductor sector, despite the current demand handicaps, discussions with customers suggest that this is a short-term issue and demand is expected to normalize by the end of the year. We are working on integrating operations and expanding our product and customer base in other geographies as well. The battery chemical sector is evolving rapidly, and we are also building capacity at fast pace to cater the worldwide demand of electrolyte additives, and are co-collaborating with a global player to establish electrolyte solution capacities in India. The IRA policy in the U.S. and the growing EV battery ecosystem in India present significant opportunities for us. For the quarter, I am pleased to report that we continue to navigate the challenging industry landscape successfully, to achieve strong 15% growth in revenue from operations. This growth was primarily driven by our advanced Pharmaceutical business, while the Specialty Chemical segment saw modest growth due to the subdued performance of Baba Fine Chemicals. Additionally, we successfully concluded the Good Manufacturing Practice inspection by the Pharmaceutical and Medical Device Agency, PMDA, in Japan, with no critical or major obligations. To our knowledge, we may be the only chemical company in India to have successfully completed both USFDA and PMDA inspections in the advanced pharmaceutical intermediate space. This achievement should open additional opportunities for us in Japan and other regions. Historically, even as we always see year-on-year growth in Q1, it is important to understand that our Q1 is always the lowest quarter in terms of revenue each financial year since inception, and we typically see sequential growth from Q1 to Q4. I anticipate similar strong sequential growth in the coming quarters. Looking at our current order book, I am confident that we will comfortably meet our 25% growth guidance for the year. Now I will hand over the floor to our Vice President of Strategy, Mr. Abhishek Patel, for further business updates. Over to you, Abhishek. Thank you, Naresh Bhai. Good evening, everyone. Continuing with our business performance, our advanced pharmaceutical intermediate business reported revenue of INR 135 crore for the quarter, reflecting strong, robust 16.6% YOY growth. This increase was driven by strong performance in both CDMO as well as the core product business. The Specialty Chemical business also grew by 10%, reaching 42%. This growth was largely due to strong performance in the commodity chemical segment, though it was partially offset by the subdued performance of Baba Fine Chemicals business. Elaborating more on Baba Fine Chemicals business, for the past two to three quarters, BFC has been operating around INR 5 crore revenue per quarter, affected by business integration and demand issues from our client side. We expect a recovery to begin in the second half of the year. Post-acquisition, our team has been actively marketing new products, which were already present in BFC's product basket but were not marketed earlier. Marketing efforts driven through participating in semiconductor conferences, engaging with customers in Korea, Japan, and Taiwan, this has led to a new customer collaboration with customers in Korea and Japan at the lab scale. Although this initiative will take some time, we are optimistic about the opportunities in this segment. Now, in the Battery Chemical segment, we have established Enchem AMI Organics Private Limited, a wholly-owned subsidiary of AMI Organics Electrolytes Private Limited, which is in turn a wholly-owned subsidiary of AMI Organics Limited. This step-down subsidiary will focus on electrolytes for lithium-ion batteries and related materials in India. Regarding CapEx updates, for the Ankleshwar project, we are on track to complete the remaining two blocks by the end of quarter Q2 FY 2025. In line with our commitment to combat global warming under the United Nations Global Compact pledge, we have initiated a 16-MW solar CapEx, captive power plant project. This project will meet most of our energy needs, leading to reduced carbon emissions and lower energy costs. We anticipate completing this CapEx by the end of Q2 FY 2025, with energy savings expected to start from Q3 FY 2025, which will further contribute to our EBITDA improvement. As Naresh Bhai mentioned, we have also started CapEx for electrolyte additives, which is on track to complete by the end of this financial year. With that, I will hand over the floor to our CFO, Mr. Bhavin Shah, to provide a financial update. Over to you, Bhavin Bhai. Thank you, Abhishek Bhai. I would like to briefly highlight the key performance metrics for the quarter before we open the floor for questions. Revenue from operations for the quarter reached 176.7 crore, representing a 16.6% increase on a year-on-year basis. As Naresh Bhai noted, this growth was primarily driven by strong performance in the advanced pharma intermediate segment. Gross profit for the year was INR 74.3 crore, reflecting a 1% increase compared to the same period last year. The gross margin was 42.1% up from 40% in Q4 20 FY 2024, but down from 47.9% in Q1 FY 2024. As you all know, to support our clients who were facing pricing pressure, we had resorted to supplying products at a spot pricing to our long-term customers to protect the volume at the cost of margin decline in fluctuating market conditions. This had impacted our gross margin from Q2 onward. As expected, RM prices have stabilized, and we are slowly moving back to old pricing formula with most of the long-term customers, and therefore there was a good expansion of around 210 basis points in gross margin in Q1 FY 2025. EBITDA for the quarter was INR 29.5 crore, at a 13.2% decrease year-on-year, with EBITDA margin at 16.7%, down from 22.1% in the same period last year. Several factors impacted the EBITDA margin. First one is the gross margin. This remains the primary driver for EBITDA, while it improved sequentially. It was lower year-on-year basis. Second is an increase in employee costs. Higher expenses this quarter resulted from annual increments and new hires for the Ankleshwar plant. The other reason is the seasonal trend. As Naresh Bhai mentioned, Q1 is typically our lowest quarter in terms of revenue, therefore Q1 usually has the lowest top line and EBITDA each financial year. Payroll for the quarter was INR 19.7 crore compared to INR 30.9 crore in Q1 FY 2024, leading to a payroll margin of 8.3%. The decline in payroll margin was due to lower EBITDA margins, higher depreciation costs, due to capitalization of one of the blocks at Ankleshwar unit, and increased finance costs. We anticipate higher depreciation costs in the coming quarter, as we will capitalize the remaining blocks of the Ankleshwar unit in the coming quarter. However, with the significant debt repayment, finance costs are expected to decline sharply. Overall, we remain on track to achieve our 25% growth, growth target for the year while maintaining healthy EBITDA margins. With that, I request the moderator to open the floor for questions. Thank you. 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 touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants: you may press star and one to ask a question. The first question is from the line of Vivek Gupta, who is an individual investor. Please go ahead. Hi. Thanks for the opportunity. So, a couple of points that I want to discuss, sir. So, first is, how much did we invest for electrolytes in this quarter? So, electrolyte business is still in the final working-out stage. We are working on both fronts too, in the form of a corporate governing structure as well as the CapEx. So, electrolyte segment sales is yet to start, for us. Last quarter, did we mention that we would invest some part of it in Q1, right? So, contrarily, there are some small invoices for sampling and qualification, but the larger large invoices will be started from H2, as we mentioned. To additives, we are talking about additives. Yes, yes. That's two different sets of business. You asked about the electrolytes, so that is, the electrolyte business is yet to start. If you ask about the electrolyte additive business, so that is, we have some long-term contracts already signed, and we expect that revenue to start from H2 FY 2025. Right now, it's only small quantities related to sampling and all those things. Okay. The other point is, I see the other expenses being greater than PAT. So, what exactly do we have as a part of other expenses? All other expenses include. Apart from, sorry, go ahead. Other expenses include expenses related to manufacturing as well as the marketing, as well as the administrative expenses. Okay. So, we expect a similar trend down the line, as we because it's huge. So, in this case, see, our other expenses should be ranging between 15%-17% of total sales. As we grow, quarter-over-quarter, we'll have, with a better top line, we'll have a savings in this area. So, other expenses should remain between the range of 15%-16% kind of thing. Okay. And I see that we are operating at the lowest PAT margin since FY 2020. So, is there a reason that we have not been able to improve the PAT margins? With regard to PAT margin, see, we have improved our gross margin on a sequential basis. However, in the current quarter, we have higher depreciation expenses, higher finance costs, due to our Ankleshwar unit, which has capitalized last year and which has yet to give a full potential of revenue. So, higher depreciation, higher finance costs, and we have also rolled out an increment in Q1 this year. So, these three factors cumulatively give us a lower payroll margin for the quarter. As we move gradually on a quarter-on-quarter basis, this will improve. What is the EBITDA margin guidance you would give for quarter two? So, we do not generally provide the guidance, but you can expect that in the last quarter also, we had a very good revenue of INR 102.24 crore. And as we progress, we are committed to delivering growth of more than 25% in revenue, and you can expect that, see, first, as Naresh Bhai already mentioned, the Q1 is always a low revenue quarter, and sequentially, it goes higher. So, you can expect kind of similar kind of numbers going forward. So, at least when those revenue top line numbers get going, you can expect around more than 200 basis points improvement at the operational level also. We are also committed to delivering higher margins in terms of material margin, gross margin level also, but 200 basis points around improvement in EBITDA margin because of operational efficiency and also seen at a higher revenue level. That's a kind of EBITDA guidance you can work out at your end. Okay. One last point. So, for the QIP proceeds, we have, like, credited all that debt for the company, right? Yes. What is the net cash on hand currently on books? As on June, net cash on hand is around INR 385 crore. Okay. Okay. That's it. Thank you. Thank you. The next question is from the line of Rikin Shah from The Boring AMC. Please go ahead. Hi. Congratulations on a good quarter. So, I wanted to understand what the timeline for Enchem AMI Organics would be, how would this pan out, and, you know, what deeper plans for this would be? Enchem AMI Organics is a subsidiary for making all manufacturing for electrolyte in India, exclusively for the parent company in Korea. Right now, we are in discussion of finalization of the JV terms and conditions. We cannot throw the exact timeline because it's a complication between two companies, two countries, and also regulatory requirements and all. As it will be as soon as possible, it will be due. All right. Thank you, Naresh Bhai. My second question would be an understanding, you know, how blocks 2 and 3 of the Ankleshwar unit after construction—like, do we have some sort of order book finalized? Or, you know, how would we be utilizing that going forward? We are in an active discussion on, I think not active discussion, but almost a finalization of signing one more contract as a CDMO with one of the originators, based in Europe. All samples, everything is done. Now, validation batches will be planned in the next quarter. So, maybe, end of this quarter or maybe next beginning of next quarter, we will have these, signings. So, it is, we plan very, properly, and, everything is going as per our planning in, in Unit 2. Got it. Thank you so much. That's it from my end. Thank you. Ladies and gentlemen, you may press * and 1 to ask a question. The next question is from the line of Krishan Parwani from JM Financial. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity. Just a couple of questions from my side. So, firstly, on the formula contract, when will we start to see the strong ramp-up from that? Unit two is already signed the validation batches for the qualification at the customer end. By this Q2, starting from Q2, Q3, Q4, it will gradually increase, and it will fully ramp up in FY 2026 up to the maximum level. But this year, we are targeting to have all the validation finishing all 84 countries what they are supplying. So this is slowly slowly ramping up, but this is a very positive, and you know, it's going on as per design and planning by the customer. Understood. So, basically, you know, with this kind of a ramp-up of, I mean, gradual ramp-up, your gross margin trajectory should also improve, going forward. Is that correct? Yes, definitely. Okay. Okay. Got it, sir. And on the tax rate, was there any one-off factor in this quarter? Because I think the tax rate is slightly higher. Was there any one-off? No, see, the cumulative tax rate for Baba is different than this thing. So, when we combine it, it will look on a higher side. Understood. So, for FY 2025, should we build a 25% tax rate or slightly higher? We should be on a slightly higher side. Understood. T hirdly, on the electrolyte additive project, given, you know, you have also done some arrangement with Enchem recently. So, just wanted to check, I mean, I know both the projects are different, but, for the electrolyte additive project per se, do you have firm orders in hand? Electrolyte CMO, we don't have formed because it's yet not formed the final JV. But for electrolytes, yes, we have a long-term contract already signed. And based on this planning only, we are now expanding our capacity for VC, FEC up to 2,000 metric tons. Not apart from that, we had already developed another eight new additives, which are also used in the manufacturing of the solution of electrolyte. And these all are also now started qualification stage at different customer levels as well as with the Enchem as well. So, once these also will be matured, we will start producing that on a apart from VC, FEC, other additives also in AMI Organics electrolyte. Understood. So, basically, these are some of the firm contracts that you have in hand, which is what is driving you to guide for a 25% growth in FY 2025. Is that correct? Yes. Yes. Noted. Lastly, if I may, I think you were facing some challenges and a big setback, but I think, recently, there was a court also confirmed the invalidity of Bristol Myers Squibb. So, are we seeing some uptick there, or will it take some time? Yes. No, no. Yes. It's already started upticking, slowly, slowly. And that is what, in any way, next year is a year of launching, right? So, exclusivity is expiry. So, we have already started getting the trial orders started in different, different customers slowly, slowly. Noted, sir. Thank you for patiently answering my question. Wish you all the best. Thank you. Thank you. The next question is from the line of Sudhanshu from Marcellus Investment Managers. Please go ahead. Good evening, Naresh Bhai. Thank you for taking the question. Sir, first of all, if you can help me understand the volume and value breakup of this 15% YY growth, and the Q2 decline as well, what was the number in terms of the volume movement? So, we have got this 15% hike completely on the volume side. That is 18% growth on the volume side. Okay. So, 18% volume growth and then 3% pricing decrease. Is that how we arrived? Yes. Okay. And this dip, the QQ number, if you can quantify the same for that as well, 21% dip on QQ basis. Can you loudly speak or repeat your question because we are not able to understand? Is it better? Yes. Or you can speak a little slowly. Yeah. Sure, sir. So, this 20%, 21% degrowth on a quarter-on-quarter basis, if you can split that as well in volume and value terms, was there any quarter-on-quarter depreciation as well in terms of our realization? So, let me tell you, this way. As we already mentioned, that, generally, Q1 has always, always been the lowest quarter for us. So, in, largely, in both the segments, it was kind of similar kind of, degrowth. But it was not kind of things which came to us and surprised us. We have already prepared ourselves, for such kind of, revenue. And because of the kind of, visibility we got from the customer, we are again committed to achieve more than 25% growth for the full year. So, for both the segments, we are expecting a kind of similar growth and more than 25% growth and will achieve more than 25% growth at the end of the year. On the, volume and the value side, as Bhavin Bhai mentioned, 18% is the volume growth, for overall, level against the 15% value growth. But segment-wise, the split, we are not providing. Segment-wise, I'm not asking. I'm asking quarter-on-quarter, sir. It will be incremental similarly for quarter-on-quarter as well. And based on that only, we are expecting historically, also, we are expecting, see, same kind of history in last year's exceptions. And we are committed to have 25% growth this year because we have this is all what according to the plan, and we know accordingly, it is moving right now. Understood. Understood, Naresh Bhai. Thank you. And in terms of the challenges that we mentioned, in terms of the integration related issues, for Baba Fine Chemicals, if you can help us understand that piece a little better, like, what exactly is going why the sales are down from the levels at which we bought the partnership stake? See, basically, this is a very high entry-barrier business, semiconductor, and it's very difficult to enter in that system when you are doing with chemicals, which is high-purity chemical. And when we done these acquisitions of ownership change from Baba Fine Chemicals to AMI Organics, we need to comply with several requirements with the buyer Heraeus. So that was all last year. During that period, Heraeus is as a headwind in their business. They will survive with the stock what they have, but now they have a headwind also during these last two quarters. They are facing some challenges of their final product. And that's why it is a little bit sluggish at their end, and that is a cascading effect to us and Baba Fine Chemicals. But contrarily, we are also not sitting on because we were highly dependent on Heraeus on one customer. We had already started promoting other molecules, which we had not committed to Heraeus, to the other segments in Korea and Japan. And we already started supplying few kgs of 1 kg-10 kg level to these customers, and it's also moving very good. So, next 1-1.5 years, it will be improvement for us not only from Heraeus side as well as from other new customers as well. So, we are working strongly on promoting Baba Fine Chemicals in the next 1-1.5 years. Okay. And, sir, if I may just ask a follow-up question on that, the new molecules that we are pitching to Japanese and Korean companies, would it be in the same realization band and profit margin band, or would there be significant difference in terms of what we get from Heraeus versus these Japanese and Korean clients? Yeah. It will be not that great of a, say, 65%, but it will be 40%-60% or 50%-60%. And because the application is not in the same lines, so it depends on, it all depends on the application as well. But it will be much better, much, much better than what our current business is doing. Understood. And one question, Bhavin Bhai mentioned long travel times for the cargo and freight cost increase. So, has that had any effect on our sales as well? Have we lost any sales because of this, two aspects, and availability of containers and long lead times? It is not that great impacted on our sales because we were planning we have an order in hand for a long time, longer, longer period. So, we plan very, strategically about the shipments as well, and accordingly, we booked our containers and all. But yes, it has impacted on the cost of the shipment. It is a little bit incremental. That is also one of the impact temporary impact on our margin, but, that is not that great. So, there that's why we are not, narrated impact of that. But, for the time being, we don't see any supply or any self-distinction because of this, longer shipment time as well as longer awaiting time for the container because we are booking very early about our shipment. Understood. If I may ask, two small questions, one to Naresh Bhai and one to, I think, Bhavin Bhai. Sir, in terms of the apixaban and rivaroxaban sales, you mentioned something to the last participant as well. But are we saying that gradual shipment has started, but the pickup would happen, primarily in Q4 this year, and then, FY 2026 would be the major, pickup for these two molecules? Is that understanding correct? Apixaban, your understanding is correct. Rivaroxaban is still we have to wait because it's it has still time. Okay. But we are moderately selling rivaroxaban as well, but not at the peak right now. All right. All right, sir. And, Bhavin Bhai, we mentioned that this solar plant would basically help us mitigate a lot of our energy costs. So, if you can quantify what percentage of our energy costs at the current level of operations would come down once this solar plant gets completed in Q2? So, see, primarily, we will not quantify the number, but the 16 MW will suppress our existing electricity cost. So, we'll see improvement in that thing. All right. Okay. The detailed reason for that is because Unit 2 is still just commencing, so that's why it is difficult to quantify. Understood, sir. These are all the questions we have. Thank you very much for answering that. Thank you. The next question is from the line of Sudarshan from JM Financial PMS. Please go ahead. Yeah. Thank you for taking my question. So my question is to slightly, you know, understand, you know, how our strength is going to help us, help us during this, you know, situation, where, you know, a lot of our competitors are facing issues in terms of availability of, you know, the freight containers. While I think a few quarters ago, you did mention that, you know, we have largely reduced the impact import dependence and started focusing on a little bit more locally. So, one is, you know, with the current scenario, that is your clients now starting, you know, are starting to come and, you know, ask a little bit more in terms of, more product, I mean, from your side. And second is from, you know, the, you know, overall relationship perspective. I'm talking about the Japanese, FDA that has come and audited the facility. I mean, it is very nice to see that we have, you know, we've been able to ramp up, you know, our relationship with some of the other regions. But with this in place, how do we see us taking our relationship to, you know, into Japan, you know, now that we have capabilities into Grignard chemistry, you know, building it into, you know, continuous flow chemistry, etc.? So, let's first answer your first question related to the logistics and dependency on the raw material as well as availability of the containers and all. Definitely, if you are not dependent more on imports, that will leverage you to be your buyer will be more free for you as a local available raw material, make you more sustainable in terms of supply chain to them. So, that is definitely help us, and that is also one of the reasons that we are getting good projects, every quarter and every year. This quarter also, we have received more than 10 new projects in terms of new supply. In terms of supply to the customer is the second challenge where everybody has the every exporter has the same challenge, which we have as well. In that area, it is the better planning, and that helps you to have early orders from the customer and forecast non-rolling forecast help you to understand that when you require the containers for shipments and all, and that helps you. It will help you to plan, but it will not help you to the cost because cost is not in our hand. But definitely, it will help us to on-time delivery to the customer. So, that is, I hope this will give you an answer about, give you satisfactory answer for your question. Related to the new era opening in Japan, we were already present in Japan in the last 15 years. We are doing sizable business in Japan. But with this PMDA inspection for chemicals open door for us for advanced intermediates and N-1 kind of products in for the APIs manufacturing in Japan, so that helps us definitely in promoting our pipeline, which is we are normally promoting in Europe, U.S., and in India. But that is now open for us as well. So, that will definitely help us to grow our business in Japan. Sure, sir. And, sir, if we are looking at the number of projects that, you know, we are working with, I mean, scaling new clients as well as deepening our relationship with clients, I mean, given that we have spent a fair amount of efforts, you know, and also building capabilities through M&A and directly, can you, you know, qualitatively give some color with respect to, you know, more, you know, products or the, you know, relationships and pipeline, you know, something like how, you know, Fermion works for us? So, you know, qualitatively, say, two, three years ago, how many relationships did we have? And probably now, you know, what is the kind of relationship that we are having? As I always say, that we intercepted based on the originator business only, and we have a very long relationship with big originators. Fermion is one name, but there are so many other names, with whom we are working in Europe. Some concern we received, so I can say the name of Boehringer Ingelheim, one of them, with whom we are working since 20 years. Similarly, we have a lot of other originators with whom we are working. And they, we are time-tested supplier for them, and time to time, they give us a new molecule, which we develop for them, and then we wait for exactly when it is launching. So, so many molecules we have in phase I, maybe in phase II. So, that will be longer period it will go for launching. One of the products, which you know in Fermion, is Darolutamide. But apart from Darolutamide, we have other eight products with the Fermion, which are already either commercialized or in pipeline. So, this is the reason we have more than 570 molecules, which is already invoiced. Sure, sir, one final question before I join back the queue is, you know, at some point of time, we were, you know, doing an EBITDA margin in excess of 20%. Various combinations of several factors that impacted, you know, the margins, which, you know, probably led to the margins coming down. I mean, leaving just this quarter aside, I mean. Negative operating leverage, etc. One is if I'm, you know, mapping the strength of the business in terms of the R&D capabilities and the clientele, it does not necessarily reflect the strength, you know, the margins does not reflect the strength of the business. So, one is, you know, in the near term, when do we see want to go back to the 20%? Second is if you look at the kind of other competitors, I mean, whether it is in India or even globally, the similar kind of work, which the, you know, companies are doing, their margins are significantly higher, not over 25%. Second is as the utilization goes up, when do you see this, you know, 25%+ margins kicking in? It's a really good question. But the issue is that we are not a peer-to-peer comparing with others because we have basket having not only the originator business or not only the CDMO business, but we have also generic business as well as we have commodity business like Specialty Chemical as well, where margin is low and volume is very high. So it's because of that there is a bundle of that when you do the aggregated average, it is impacting a lot. But you are rightly saying that it should not be that low as what we know. But there are as we say that we will go our main target is to go to the our historical margin level of 23% in pharma. We are working on that, and this financial year is definitely a historic for that to reach there. This is our aim. In future also, going forward, new projects are coming. New CDMO will come, which will be also helping us to have a better margin in our profile. Definitely, it will go to the near level of our historical margin. And just to add on this, it's not that far also. It is definitely achievable in short time also because, as we deliver in Q4 FY 2024, when the sales was more than INR 220 around INR 225 crore, we have delivered 19% EBITDA at a gross margin of 40% only. So, today, we are at a gross margin of 42% and with operational efficiency and the large quantity of CDMO business. So, more than 25% EBITDA level is definitely doable in this financial year, also, hopefully, in Q3 and Q4. Sure, sir. Thanks a lot. I'll join back the queue. Thank you. The next question is from the line of Neha Agarwal from SageOne Investment. Please go ahead. Thank you so much. Several of my questions have been answered, so I'll just stick to a couple of more. One is currently, if you look at the overall capacity that we have, all three units put together, I mean, just taking the liberty to add Ankleshwar also. So, I think we will be overall at around if we take full Ankleshwar, then we will the number would be somewhere around 12,000 tons, right? Yeah. In quantity, yes. But then now, in volume-wise, we are now somewhere around 1,000-1,100 kg. So, right now, in the volume, because we have in Ankleshwar, we will do more high-value product at a low volume. Right. Right. So, my question is on Ankleshwar alone, if we leave aside, say, Sachin and Jhagadia for the time being, on Ankleshwar alone, what kind of asset turns are we investigating? So, asset turnover for Ankleshwar, you need to definitely will be more than 3x. But because of we have some good CDMO contract already in place, it can go more than 4x also. Okay. So, given the CAPEX of around INR 300 crore in Ankleshwar, which is a revised number, so we can say around INR 1,200 crore plus kind of a top line at full utilization of all the lines in Ankleshwar. Will that be a fair assumption? Yes, at 100%, we can calculate like this. Okay. And is there any timeline that, again, that you think this could be achievable given the visibility that you have put in, given current order book as well as the discussions which are on board for Ankleshwar? So, you have to understand that at present, we are only calculating our revenue based on the unit block one of the Ankleshwar facility. Block two and block three are yet to get commissioned, which is expected in Q2 FY 2025. So, utilization expected peak utilization for those two blocks is still very premature to conclude to project it in the market as of now. Understood. But typically, please help me understand this better. So, generally, in CDMO, how it works is that when you have, say, the unit or lines in place, then you already start also talking to clients and probably blocking individual lines within the overall block for individual clients, right? So, there could be dedicated lines. So, here in Ankleshwar, I think the first one is already done with. But for two and three, I mean, is there a visibility in place, or do we have some firm contracts, or are we in early stages of discussion? I already announced that in my last answer to someone else that we are in on a very final final stage of signing some contract with one of our reputed buyer in Europe. So, but it is not, we will not be able to say right now about our that planning, considering the confidentiality of the nature of the business. Understood. Understood. And ex of Ankleshwar, if I now go back to your existing Sachin and Jhagadia units, the current utilization there would be, in what range? It will be around 55%. 50%-55% between. At Jhagadia and more than 70% at Sachin. Okay. So, what kind of optimum utilization can we achieve in these? We can go up to 85%, maximum. In both locations, you're suggesting? We have a fungible facility everywhere. So, it can be a multipurpose plant. It's not a dedicated plant. So, it can go up to 85%. In a dedicated plant, you can go up to 100% if it is a continuous one-pot. But in a multiple fungible plant, you can go up to 85%. Okay. Okay. So, given if I take last year's full number, basically, just trying to draw an estimate of the overall all three facilities put together, if we are at optimum utilization, then what kind of growth up to what level can this capture? So, last year, when we closed at closer to INR 725 crores kind of top line, with Sachin and Jhagadia operating further more at a higher utilization, then probably INR 900-1,000 crores for that, and then rather INR 1,200 crores here, maybe INR 2,000 to at a broader range, maybe INR 2,300-2,500 level at a broader range is what we can achieve with the with all of these three put together. Will that be a fair number to estimate? I cannot comment on that. You can calculate on that. Sure. Sure. Sure. And what is your view? Well, I totally understand that there is a timeline, and I mean, there is confidentiality with respect to the order discussions that you cannot disclose. But at an overall level, at a company strategy level, what is your thought process or strategy pertaining to utilization of all of these? I think, would a broader three-year time frame be good enough to assume a full utilization or a closer to optimal utilization of all of these three, or could it take longer? See, all depends on product mix basket, everything. We want to reach 85% in one year, but this is all not possible, right? So, it's all market changing. And also, we are continuously working on our process improvement. So, we are changing a lot of batch process into continuous. So, once we are like in Surat, unit one, where we reach 75%-78% utilization, and then we improve process, and then we reduce to 70% by putting some reactions into continuous flow reactor. So, this is a continuous process, and it's on it cannot be stopped. So, that is how it's not defined that in two years' time, we will reach 85% or something like that. Main purpose is to make high-value product rather than making a commodity product in a pharma and making better utilizations and better revenue and asset turn. This is the main objective of AMI Organics. Sure. Sure. And in terms of product mix, just one last question, this would be. In terms of product mix, where are we in deciding by next year end? So, by FY 2026, given that the formula contract will be we will have one full year of number there. So, overall, CDMO versus commodity specialized, all put together, what kind of product mix can we look at by end of next year, which is FY 2026? For today, I can say that we are at around 50% originator, 50% generic in pharma, whereas 80%-20% in pharma and commodity. In the future, I can't disclose exact number, but that definitely, originator business will be higher beyond above 50%. Understood. Understood. Okay. That is very, very helpful. Thank you so much. I'm sorry, but due to some confidentiality and avoiding some more competition, we are very restricted in some answers. No. That's completely understandable. Thank you. Thank you. The next question is from the line of Jason from IDBI Capital. Please go ahead. Sir, thanks for taking my question. Sir, just wanted to also, sir, just some more clarity on this capacity utilization, but I know there was a detailed question asked before. So, last quarter, sir, you had said that Sachin was at 72% capacity utilization. Okay. And unit three, which is Jhagadia, was under 50%. That is for the specialty chemicals and electrolyte additives, right? So, now also, the capacity utilization more or less remains the same, right, sir, at Sachin and Jhagadia? Yes. So, in Sachin, we reduce 2%, whereas in Jhagadia, we increase 5%. So, it's all a bit depends on product mix. It may vary between plus or minus. And then, because of the product mix changes also, the final value of the product is also changing. So, this is how it and then also, in Jhagadia as well as in Sachin, we introduced some new flow chemistry equipment, which help us to also optimize the capacity a little bit on our utilization side. Sure. And, sir, these electrolyte additives, this is going to be housed in Jhagadia. Is that right? Yes. Yes. 100% in Jhagadia. 100% in Jhagadia. So, with the spec chem business. Okay. And, sir, just wanted to understand, so, this Ankleshwar unit again, there's a question there. Now, what I understand is there are three blocks, and out of that, one block has been particularly dedicated to Fermion. So, just on a percentage basis, 33% is active and 67%, you are still looking to basically employ for future opportunities. Is that understanding correct? Yes. Yes. Yes. Yes. So, 67% still is to be utilized for further upcoming opportunities. It could be from any client whom you're talking to, right? And this CapEx complete CapEx is INR 300 crore for Ankleshwar, right? So, once everything starts only, then you can look at it from a 3x, 4x kind of thing, right? Yes. Yes. Right. Right. Okay. Just wanted that understanding. So, that's good, sir. Sir, also wanted to understand again, now, on an EBITDA margin, we had spoken about in terms of export, sir, just wanted to know you had resorted to this spot basis, basically supplying to your customers. What is the update on that, sir, in terms of spot contracts because of competition, etc., coming in? So, how is that going on? So, as we mentioned during last call also, that to retain our volumes, we have to slightly change our strategy. But now, as we analyzed during last quarter also, that in this quarter, the pricing would stabilize and margin will improve. So, slowly, slowly, as it is evident in our margin also, 200 basis point margins and improve, that slowly, slowly, we are getting back to our normal situation. So, this is how it has been in Q1. And going forward, it will be the normal situation expected for Q2 and Q3, Q4 as well. Sure. Sure. Sure. So, that continues, and I understand prices are under pressure. So, sir, also, in terms of EBITDA margins, sir, how do you look at it from sort of some guidance would you want to give? Of course, I know the scenario is pretty dynamic, but margins have shrunk from those 20%-21%. So, any guidance you would want to give for the upcoming years, 2025, 2026? So, as I mentioned, we have already demonstrated around 19% EBITDA margin in Q4 FY 2024, wherein the revenue was INR 224 crore. So, at similar kind of revenue top line figures, we will achieve those additional 200 basis point operational leverage. Apart from that, we already improved the 200 basis point in terms of gross margin. So, that add-up will definitely reach us more than 20% mark in this financial year only, hopefully, we will achieve in Q3 and Q4. And going forward with additional CDMO businesses coming in our product portfolio, those margins are expected to more than that level also. That is what we are planning in FY 2026. Sure. Sure. And, sir, also, I just wanted to note I mean, you just said that 50% of your business is from generic and 50% innovator-driven. And, of course, as a company would like to move higher up the value chain for CDMO to innovator business, so I just wanted to know certain steps which you are taking as a company to move up the value chain. If you could just give us a broad color on what we are doing to move up the higher up the value chain, higher up the margin chain as well. This is a long-term process, and we established this since several years. Because of that, only now, the qualification from regulatory authority is also one of the crucial parts of this kind of new CDMO for the higher value chain. So, now, we are FDA. Now, we are PMDA. So, that helps us to go in a higher chain against the other competitor also now. So, this is long-term, and we are slowly, slowly marching in our what can I say? The program? Our strategy. Strategy. Sure. Sure. And just lastly, I just wanted to ask you, CapEx guidance still stays at around INR 2.5 billion for each of the years? That's what roughly you had guided last year. So, any changes to that? We have set around INR 250 crore CapEx for this financial year FY 2025, and that remains intact, right? Sure. Sure. Those were all my questions. Thank you so much, sir. Thank you. Thank you. The next question is from the line of Dhara from ValueQuest Investment Advisors Pvt Ltd. Please go ahead. Thank you for taking my question. I had a few questions. First one on the segmental margins, if you can provide the margins for advanced intermediates, and specialty chemicals. Margin for intermediate is at 17.1% and specialty at 13.44%. Thank you, sir. My next question would be, as you mentioned that our depreciation cost during the quarter was higher, how much of the capitalization have we done for Ankleshwar? That is for anchor capacity for one block. The amount that we have capitalized on the balance sheet? That is around INR 110 crore. So, actually, it was capitalized towards the end of quarter Q4 FY 2024, but it was for a very limited time during that quarter. But a full quarter impact was seen in Q1 FY 2025. So, that's the reason you see a higher depreciation figure. But the amount is INR 110 crore. Right. How much CWIP would we have on our balance sheet? Around INR 125 crore. Okay. Thank you so much, sir. That's it for my part. Thank you. The next question is from the line of Prashant Nair from Ambit Capital. Please go ahead. Yeah. Thanks. I had a question on segmental margins, which you just answered. My second question is about the apixaban opportunity. By when do you think this will play out completely, as in across all markets? When would peak sales for this product be? FY 2026. FY 2026. And rivaroxaban also, similar time frame, or would that be? Yeah. It will be in FY 2026 as well. Okay. Thank you. Thank you. Thank you. We have the next follow-up question from the line of Rikin Shah from The Boring AMC. Please go ahead. Hi. Thank you for taking my question again. So, for apixaban, I just wanted to understand that the patent expires in most geographies at the end of CY 2026. And generally, whenever a drug goes off patent, there's almost 90% erosion in the finished drug. So, in light of what has happened in the past for most key drugs, should we sort of expect erosion at an intermediate level as well? And have we taken account of these things? Yes. Definitely, this is part of our business policy, and we develop all the intermediate records considering this kind of launching price pressure. We are very well prepared for this. Okay. And my second question is a follow-up on the earlier questions for Baba. So, you mentioned that this is a very strenuous process in this business to get into the system. And we're probably in sort of a process where we are working with Japanese and Korean clients to get into their system. So, how long would this process be like a ballpark figure for anyone else in this business trying to get into their system? So, we are working with some CDMO in semiconductor segment in Japan, in Korea, big conglomerate in the world. And we are working with them for the new applications and new opportunity with them. So, it's a brand new product with a brand new application, but that product already developed at Baba Fine Chemicals. The chemistry was already developed at Baba Fine Chemicals, and that chemistry we are promoting with an application in different areas. Right. But in timeline terms, how long would you say approval will take? The approval is already in process. It may take 1 year. It may take half year also. It may take 2 years also. Depends on the final application of that final product application and approval from the customer. But it is not that like in generic chemical that you just put the sample and start business. Right. Right. Got it. Okay. Thanks. Thank you. Ladies and gentlemen, we will take that as the last question. I would now like to hand the conference over to the management for closing comments. Thank you to the JM Financial team for hosting our conference call. We appreciate everyone's questions and hope we have addressed most of your queries. If we missed any of your questions, please reach out to our investor relations team, and we will get back to you promptly. Thank you very much, and good evening, everyone. On behalf of JM Financial, that concludes this conference. Thank you for joining us, and you may now disconnect your line.