Ladies and gentlemen, good day and welcome to AMI Organics Limited Q2 FY 2025 Earnings Conference Call hosted by JM Financial Institutional Equities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. And now, I hand the conference over to Mr. Krishan Parwani from JM Financial. Thank you, and over to you, sir. Yeah, hi. Good afternoon, everyone, and thank you for joining us on AMI Organics Q2 and H1 FY 2025 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 afternoon, everyone. Warm Diwali wishes to all of you. We are pleased to welcome you all to our earnings conference call to discuss Q2 and H1 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 statement, must be reviewed in conjunction with the risk 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. 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 afternoon, everyone. I hope you are all doing well. From all of us at AMI Organics, I would like to extend warm Dhanteras and Diwali wishes to you and your family. May Lord Dhanvantari bless you with health, wealth, and success. Now, let me provide some perspectives on the current state of the chemical sector. From the demand side, the demand continues to improve, albeit at a slower pace than what everyone had anticipated. Speaking of various subsegments of the chemical sector, some of the pockets are witnessing growth in the demand, but majority subsegments are seeing stagnant demand. This is driven by the overall slowdown in consumer spending that we all have been witnessing across the sector. Coming to pricing, even though pricing has been stabilized, the upward movement that everyone has been anticipating is taking longer than what we expected. Now, let me give you some more highlights on the different indices that we saw. Starting with pharmaceutical intermediates, the demand has been slowly improving, but what is more painful is the pricing. The pricing for the generic intermediates has been at their lowest. I strongly believe that demand will see a peak in H1 of calendar year 2025, with prices slowly moving upward. Moving on to the battery chemicals, we are witnessing that major car makers and industry players are offering their additional investment in EV battery capacities and related space. I believe the big investment outlined by these companies at the start of the decade got ahead of consumers' appetite for full switch to EVs. Even though I fully believe in the future of EVs and shift to EVs, only point where I do so is the timeline. I believe EVs will take center stage, but it will be later than sooner. That is why we are also taking each step cautiously. As you all know, we are announced CapEx for electrolyte energy only after we receive the firm contracts from the client. Moving on to the semiconductor industry, the part of the industry we are serving is seeing stagnant demand, while we are hoping that tides will turn in our favor soon. I believe the pain will be there for a couple of more quarters. In commodity chemicals, prices remain under pressure driven by oversupply. Overall, I believe the industry has started witnessing revival, but the pace of revival is slower, and therefore, I believe even in this financial year, the pricing pain and demand weakness will continue. Coming to the performance of AMI Organics, even in this difficult industry backdrop, I am delighted to say that we have been able to deliver a stellar revenue growth of 43.2% year-on-year in Q2 FY 2025. Our strategies on building industry-leading infrastructure completed by cutting-edge process technologies developed by our team with a focus on CDMO contracts and chronic products have helped us deliver stronger results. The growth during the quarter was driven by strong performance in pharmaceutical intermediates as well as specialty chemical business. I will let Abhishek to discuss this in detail. Moving on to business updates, during the last earnings call, we had highlighted that we successfully concluded the GMP Good Manufacturing Practice inspection by the Pharmaceuticals and Medical Devices Agency, PMDA of Japan, with no critical or major observations. I'm very happy to share that during the last quarter, PMDA Japan has issued the inspection results report declaring the shipping facility as GMP compliant. I believe we are one of the few, if not the only company in the intermediate segment who has successfully concluded inspection and subsequently received compliant reports from PMDA Japan. Overall, we are seeing a revival in demand for our core molecules, supported by a strong ramp-up in CDMO contracts and robust volume growth in our specialty chemical business. Looking at the order in our hand and the forecast of what we have, we are revising our revenue growth guidance upward from 25% to 30% for FY 2025. Now, I will hand over the floor to our Vice President of Strategy, Abhishek Patel, for further business updates. Over to you, Abhishek. Thank you, Naresh Bhai. Good afternoon, everyone. Happy Diwali to you and your families. Let me elaborate more on the business performance, starting with pharmaceutical intermediate business. The pharmaceutical intermediate business grew strongly by 53% YoY in Q2 FY 2025. The growth was driven by strong performance in key molecules as well as earlier-than-anticipated ramp-up in CDMO business. Anticancer, antidepressant, seizure disorder, antipsychotic, Parkinson's disease, anticoagulant, and cardiovascular continue to be top therapeutic segments for us. Coming to CDMO contract, we witnessed a strong ramp-up in Q2, which was earlier than we had anticipated. The specialty chemical, we believe we delivered a growth of 7.6% YoY. I would like to highlight here that this was mainly driven by subpar performance in our subsidiary, Baba Fine Chem. If we look at the business ex-Baba Fine Chem, then there was more than 25% growth in the specialty chemical business, which was offset by degrowth in BFC. As Naresh Bhai mentioned, the demand scenario for the part of the semiconductor industry that we are serving remains subdued, which is impacting sales of BFC, but we are very much optimistic that this is a temporary situation, and we will soon see growth coming back in FY 2026. As explained in the last conference call as well, we have already started promoting our products of BFC to new geographies and have already sent samples to the customers in Korea and Japan. This will also add to the growth trajectory in the coming years. Now, coming back to the specialty chemical business of ex-BFC, we have seen growth across our entire product portfolio driven by a significant uptick in volumes. Coming to CapEx for the year, CapEx for H1 FY 2025 was INR 80 crore. The majority was for remaining CapEx of Ankleshwar site and some towards solar and electrolyte additive CapEx. Let me give you further updates on the CapEx projects. Starting with the Ankleshwar project, one production block has already been completed, as informed earlier. The remaining work of the other two blocks is progressing, and this is expected to be completed in the current quarter. This was slightly delayed due to an extended rain during Q2. Extended heavy rains in Gujarat also impacted our solar project work. The work progress was impacted during the monsoon, and thereafter, there is a delay. Now, we expect this project to be completed by the end of Q3 FY 2025, with energy savings expected to start from Q4 FY 2025, which will contribute positively to our EBITDA. Moving on to the electrolyte additive CapEx, the project work has been started with the civil structure plan in place, and construction is expected to start soon. We have started ordering machinery as well. Overall, we hope that we will complete the project in H1 FY 2025 of calendar year FY 2025. With that, I will hand over the floor to CFO, Mr. Bhavin Shah, to provide the 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. I will start with the quarterly performance. Revenue from operations for the quarter reached INR 246.7 crore, representing a 43.2% increase on a year-on-year basis. Gross profit for the quarter was INR 107.2 crore, reflecting a 51.5% increase compared to the same period last year. The gross margin was 43.4%, up to 39 basis points on a year-on-year basis and 136 basis points on Q-on-Q basis. Gross margin was driven by the better product mix. EBITDA for the quarter was INR 48.9 crore, almost doubled compared to the same period last year. EBITDA margin was at 19.8%, up by 43 basis points on a year-on-year basis and 312 basis points on Q-on-Q basis. EBITDA margin was driven by gross margin as well as operating leverage. PAT for the quarter was INR 37.6 crore, which grew 1.5x compared to the adjusted PAT of INR 14.7 crore in Q2 FY 2024. PAT margins for the quarter were 15.2%, so the expansion of 668 basis points YoY basis and 682 basis Q-on-Q basis. Moving on to the half-yearly performance, revenue from the operations for the first half of the year reached INR 423.4 crore, representing a 29.8% increase on a year-on-year basis. EBITDA for the H1 FY 2025 was INR 78.4 crore, up 33.4% YoY basis. PAT for H1 FY 2025 was at INR 52.3 crore, up 41.3% YoY basis. Moving on to the balance sheet items, net cash and cash equivalents were at INR 279.5 crore. I am happy to share that even with strong growth, we were able to control our working capital, which was 108 days during H1 FY 2025. This was driven by improved debtor and inventory days. Better working capital management led to a strong generation of cash flow from operations of INR 46 crore, which was 60% of the EBITDA for H1 FY 2025. Overall, as Naresh Sir has mentioned, we are well on the track to deliver 30% growth for the year with 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 with the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Sudarshan Padmanabhan from JM Financial. Please go ahead. Yeah, thank you for taking my question and congrats on the quarter. Sir, you know this quarter, if you can give some color on how the margins for the pharma intermediate and specialty chemicals, you can understand. And also some color on how do we see the margins stay in the next few quarters for both indications. Yes. So as you asked, the margin for pharma intermediate for the quarter is at 21.44%, and for specialty, 11.36%. And as we have already said, that we'll see a better performance from here. So on quarter-on-quarter basis, we'll see improved EBITDA margin from here onwards. Yes, sir. I mean, I'm just taking this quarterly performance specifically on the pharma intermediate. Can you speak to the handset, please? Sure. Me now? Am I audible? Yes, go ahead. Sir, I would just like to look at this quarter has been quite a transformational quarter for us, specifically on the pharma intermediate side. And I think we do have a strong pipeline, including the contracted firm that is there with AMI. So what I'm trying to understand here is you had given a 30% guidance going forward. But if you look at it slightly a little longer, we have built capacities, we have built capabilities, both on the R&D as well as the product synthesis side, and having relationships built over the years. One is primarily mining existing customers like Darolutamide. I mean, the opportunity size is big and growing. So I mean, how do we see the wallet share from the existing clients? And also, if you can give some color with respect to how many products we have, which is in the late stage, which can give more molecules, something like what we are seeing with the Fermion contract. So what I'm trying to understand is this year we are looking at 30%. But if I'm taking three years, what is it that we should be comfortable with as far as growth is concerned? Thank you, sir. It's really a lovely presentation. First of all, considering our past performance of the last 10, 12 years, on an average, we have seen a year of 25%. We are growing. That growing is not only because of the one contract, but because we have a strong pipeline, which we have seeded since 2008, 2009, which is now giving us fruit, which are coming, launching, and all. So that is how we are growing annually 20%, 25% CAGR in terms of the top line. And that is ongoing till 2035. Up to 2035, we have a product, but we have a good visibility of this intermediate, which is apart from the Fermion. And also, not only Fermion, we have other originators also, with whom we are working with CDMO as well as the regulated intermediate. And also, some big general player also is our customer. So that is also giving us confidence that we will grow continuously like 25% annual CAGR. Related to Fermion, whatever the mistake we had done in the past by saying product names, customers, product, and everything, that created a lot of problems for us in terms of competition arise, which is now we learned this mistake, and now hands-on work. We will be not disclosing several CDMO names, product names, and all, but we will give you the cumulative guidelines. So in CDMO factor, it is in the next three years, it will be 30% what we say, similar kind of growth we can consider with this kind of inclusion of the CDMO project. Sure, sir. And sir, with respect to the margins, I mean, this quarter we are at 20%. But given that we have built so much of capacities in place, and I understand that with this capability, our margin should be significantly higher than where we are. So in three years, what should be an aspirational margin that you would be targeting for? The first target of ours is to reach to 21%, where we were 23%. And from there onwards, our main target is to go beyond 25%, and between 25%- 30% is our target to be reaching next three years. Sure, sir. So one final question before I join back with you. I mean, if you can give some color when we see the offtake on the Vinylene Carbonate supplies and the battery chemicals, which we were expecting to be a U.S. large client? We never say we have a U.S. large client. But we have a lot of contracts signed with big manufacturers of EVs and battery manufacturers. We already done validation batches and submitted to them at a commercial scale as well. And now we are waiting for them to start revamping their system to use our chemical for the commercial production. In commentary, also, I try to highlight that all EVs are deferring their timeline, and that also impacting us as we are on the bottom supply chain suppliers. So that also impacting us as well. Sure, sir. Thanks a lot. I'll join back with you. Thank you. Next question is from Rikin Shah from The Boring AMC. Please go ahead. Hi Naresh Sir. Congratulations on a fantastic set of results. My question was pertaining to the weakness highlighted in Baba Fine Chem. So at our client's end, is there an issue on a client-specific level or an industry-level issue that is persisting right now? And with respect to finding new clients in your geographies, how big of a gestation period do we think before we can sign more clients? So when we had the Baba Fine Chem in our basket, when we acquired a controlling stock of Baba Fine Chem, it was running at INR 40 crore of the revenue. Then there is a procedure of changing the ownership and documentation and all. That has created little bit of a sluggishness at both the sides. And that's how our buyer has used their buffer stock to support their production. And we can be able to have a time period which can be utilized for making these changes and all. But during that period, also, there is some sluggishness at the end of the consumption, also a little bit on the service side. But this year will be the last year where we got some muted revenue. But from next year, we are looking good demand. We already received a forecast from them that is showing that we are going back to the normalization from FY 2026. Considering the new clientele, they are with the new product, which we are getting a project from them. And a few are already developed in the past. CR is a commercial combo that helps us to enter. So if there is a different product, it is a longer gestation time. But if it is a new product, which is developed by an achieved manufacturer or a chemical supplier, then it will be faster. So it's a combo of that. And we have very good traction in Korea and Japan for several molecules in this segment. All right. Thank you so much. With respect to what we discussed in the last call for the NCE tie-up for the second block, the second CDMO project, so where are we in terms of timelines with that? We are in line with whatever the expectation of the originator. That is the only disclosure I can be able to provide you for that. All right. And since you mentioned for EVs that there is a deferral at the OEM end and projects are getting deferred, so what does this mean in terms of our Enchem project that we were anticipating to do this year? Enchem is one of our clients, including other contract manufacturers. We got a firm contract in our hand. That is the reason why we are putting CapEx, which is incremental capacity for VC and FEC, you see around 2,000 metric tons each in Jhagadia facility. That will be ready by middle of next year, FY 2026. That is what we have started putting, considering all this demand and projections and forecasts what we received from the customer. Enchem is also in the same pipeline where maybe it will go faster than the others, but it is going well. If you are talking about the deal between AMI and Enchem, that is on the status quo position. We are still discussing several terms and conditions. If that will be fulfilled, then we will go ahead with that as well. All right. Thank you. That's it from my end. Thank you. Next question is from the line of Saransh Gupta from SVAN Investments. Please go ahead. Yeah. Hello. Am I audible? Yes, sir. Yeah. So, apologetic to everyone. I have two questions. Sir, one is that in your QIP that you did for INR 500 crore, in that utilization, you mentioned that the INR 250 crore would be for debt utilization. But from your cash flow, I guess we can see only a INR 200 crore of utilization for debt repayment. If you can throw some light on the mismatch of this. And I have another question. If you want, I can pile it up. Yes. Fine. Fine. So when you see a cash flow, a debt repayment, so there is a debt which we have taken during the period, and it has repaid back. So it is a net debt. I think what you are talking about is the net figure during March 2024 financial. You are right. It was around INR 200 crore at that time. But during Q1 FY 2025, we had took the disbursement of additional fund to complete our rest of the CapEx work at Unit 2. And that was the reason the total debt repaid out of QIP proceeds is again INR 250 crore only, which is in line with the QIP objective. And that has been already spent and closed in September quarter, FY 2025. Okay. Thank you so much. And I have another question in the same utilization. There is a mention that INR 88 crore, INR 88 crore will be used for general corporate purposes. So if you can throw some light on it for which we will be using it. So yes, there was INR 88 crore of general corporate purpose that is for the purpose of some of the working capital requirement and any other future opportunity which we see during our journey. So that portion is largely unutilized as on date. Okay. And that lies in our cash and cash equivalent, right? Yes. Yes. Yes. We have INR 279 crore of cash available on our financial as of 30th September 2024. Yeah. 2000. Sorry. 2025. 2024. Currently, any follow-up question? No. That's it. Thank you. Participants, you may press star and one to ask a question. Next question is from Reena Shah from Subhkam Ventures. Please go ahead. Hi, sir. Thank you for the opportunity and many congratulations on good results. Can you hear me? Ma'am, you can hear me. Yes. Okay. Congratulations on good setup, ma'am. So I wanted to understand your export numbers and revenue numbers from general trade discount. Just wanted to understand what kind of adjustment is being done with the export numbers. Generally, those export numbers are not completely giving the fair and true picture of the actual export done. We are bound with that. We are obviously not following those numbers. There may be different, different sources of those numbers, and we cannot verify that numbers. There is some dual effect, right? If I'm not understanding it correct, there is some dual effect which we generally talk that is there, and hence we get a discounted number on reported numbers. Is there something of that sort? Reena Madam, export number is not a legal disclosure, right? So we cannot comment on that. You can ask any other question related to that. Okay. And sir, one more thing. On Japan, you said that there is an approval of the facilities. Is there going to be any benefit in terms of numbers because of this? Yes, definitely. That is one of our CDMO, which we are doing for the originator. So now originator can sell their product in Japan with which we manufacture in Surat. Okay. Have you ever been with any of the tourist facilities and which was fully utilized? And maybe the new orders will come from English, right? So that's why I had this doubt. Yeah. So that is a planning with the originator that how we can utilize both the facilities with different regulatory area so that we can maximize output on that. Okay. And sir, you talked about your core products have started. So can I assume that Apixaban has now started in good numbers? And we can see more ramp-up going forward? Yes. Apixaban is already started, and it is going slowly ramp-up. But there are some other products which are also now started in launching, and then slowly it will go up. Okay. Okay. Okay. That's it from my side. Thank you, sir. Thank you. Thank you. Participants, you may press star and one to ask a question. Next question is from the line of Jason Soans from IDBI Capital. Please go ahead. Yes, sir. Thanks for taking my question and congratulations on a very good set of numbers. Sir, my first question was just related to the various CapExes which are online. I just sort of missed that. So just wanted to know the various CapExes which are online and when are the expected completed timeline. Now, one thing I know is that Ankleshwar 33% is being blocked sort of Fermion. So basically, we have 2/3 remaining. So just some more color on any other CapEx which is on the board as of now and the expected timeline. So as of now, the CapEx project going on at one of the CapEx projects ongoing is at Unit 2, Ankleshwar site, which is about to get completed in this quarter only. It took some more time, which was expected to get completed by Q2 FY 2025 because of rain. So this will get completed. The total project size was INR 310 crore, out of which INR 70 crore was pending at the end of 31st March 2024, and balance is getting completed in this financial year. Second CapEx project is electrolyte additive project, which we have planned for INR 100 crore CapEx. And that is after we signed some of the long-term contract with some of our customers. And then we have started building up a 2,000 metric ton capacity for VC and 2,000 metric ton capacity for FEC. And that is expected to get completed maybe around quarter one of FY 2026. The third project, which is ongoing right now, is the solar power plant, captive solar power plant project. This is going to get completed by end of Q3 FY 2025, maybe by December 2024. Fruits we will get from the last quarter of this financial year. Okay. So thank you so much for that. Sir, I just mentioned 2,000 electrolyte additives, 2,000 tons for VC, and another 2,000 tons for? FEC. FEC. Okay. Sure. So I just want to clarify this one. I just wanted to know, I mean, in the presentation, you have mentioned that the bolstered, your revenue bolstered, but ramp-up on the CDMO contract. Of course, here you mean the Fermion contract, right? Yes. Yes. Okay. That is one of the CDMO parts. Yes. Sure. Sure. And sir, I just wanted to know from an overall perspective, sir. Last FY 2024 was pretty challenging for a business as well. Now, we did talk about pricing of APIs also being under pressure, Chinese competition, prices getting driven down. So sir, in this quarter, of course, we have seen very, very good growth in numbers. Anything materially changed on the ground in terms of prices or in terms of competition? Now, a lot of talk about China stimulus also. So I just wanted to understand in terms of this dumping and everything, has the picture materially changed on the ground in terms of pricing? Is there a chance for an uptick? Just wanted your view on this thing. So if you follow my last phone call, I think we announced that we are changing back to our normal contract situation where now. Export to that all helping us to go back to the improvement in our margin. Apart from that, because of the lowest price of the raw material is helping us also on the cost side. And we have improved our process and operational efficiency. That also giving us an operating margin improvement. Though there is a pressure on the top line, but still we are managing to improve in our margin, which we have grown several times in the last three years. That is visible in our margins from Q4 to FY 2024 to Q1 FY 2025 and Q2 FY 2025. Sure. And just lastly, from my side, of course, our products are driven from the end product. So just wanted to know, I mean, I don't want specific product names as such because I understand confidentiality issues. But just wanted to know in terms of the therapies, any particular therapy helping us in terms of growth, in terms of our demand for our APIs? We are very strong in anti-cancer, anti-psychotic, anti-depressant, anti-coagulant, and some antiretrovirals, very small amount of antiretrovirals. But these are the where we are very, very strong, and our pipeline is also very strong. That's helping us to move very fast in this area. Sure, sir. Thank you, sir, for answering all my questions. Thank you so much. One missing is anti-diabetic as well. Sorry. Anti-diabetic as well. Okay. Thank you. Next question is from Krishan Parwani from JM Financial. Please go ahead. Yeah. Hi, sir. Congratulations on strong set of numbers. A couple of questions from my side. Firstly, your revised guidance of 30% top-line growth in FY 2025 translate to roughly current quarterly sales run rate of INR 250 crore for the coming quarters as well. So are you being conservative while providing this guidance? Yes. This is a guidance which we are giving, which is based on the forecast, and orders are on hand. Okay. Okay. Noted, sir. And on CDMO side, keeping confidentiality in mind, but would it be possible to kind of highlight how many intermediates you would have in your pipeline for phase II and phase III drugs? Those numbers are very large in phase II. It's in double digits, and there are some in phase III, and some, the larger number is in phase I, then lower in phase II, and very few are in phase III right now, in single digits in phase III. But the numbers are not disclosed because we cannot provide that number because customer has not disclosed to us the status and all. So it's like a guessing number going. It is not advisable for us to say the status. Understood. Understood. But I mean, yeah, I mean, we don't want the names, obviously, because I think you also mentioned in your opening remarks or probably to one of the earlier participants that it is attracting the competition. But yeah, I mean, the number of molecules probably if that's fine. We understand it's double digit is also fine for phase II. Yeah. And on this Enchem JV, I know it's. I think you also mentioned that there has been a slight delay in the overall EV value chain. But any update you would like to give on the same? Because I think that might take care of the growth beyond, let's say, FY 2027 or so. So any update there? See, growth as the narrative I mentioned that we have a strong pipeline for our products till 2045. So it's not growth is only depend on this Enchem JV or electrolyte solution business. We have other area of growth as well. But as we earlier mentioned also that we want to invest only in the business when we see the good visibility in place, and then only we will have some investment done. Considering current scenario and EV market, in particular in India, because this business is focused on India market only. So we have been a little cautious and assessing the situation, and then we'll move forward. And particularly this is an OEM for them. It's like a toll manufacturing from them. We are not going to do any marketing or something like that. It is just a job work, CMO kind of work for them. So it is not directly or indirectly impacting on our planning. It's just an additional arm for us, giving us a leverage of selling over VC, FEC also to them. That will be additional benefit to us. So you can understand that. Yes. Yes. Yes. Fair point. I mean, I meant additional growth beyond FY 2027. I understand that you have obviously a lot of other projects that you will be working on, but I was just wondering if there is anything. But okay, fair point. Got it. And lastly, I think I missed your earlier commentary on the electrolyte additives. I'm not sure whether you mentioned when would the start, when would the revenue start flowing in from the electrolyte additives? If everything goes well, it can be started immediately as well. So we are ready with everything for initial supply. So now we already supplied them the validation batch on a large commercial scale. Now we are waiting for them to move ahead for placing an order, which is a part of the contract. But that all depends on how fast we will move ahead for their approval and final manufacturing. So it will be very soon, as soon as possible, maybe in Q4, maybe in Q3 as well. But you know very well that we are always our guidelines and guidance are always extrapolated from the electrolyte additives. So that will be remaining like that. Very few, minimal portion of INR 30 crore, INR 40 crore revenue we were expecting from VC and GVS. So that may be before if it is not key. Understood. Understood. This is great, sir. Thank you for patiently answering all of my questions. Wish you and the entire AMI Organics team a very Happy Diwali, sir. Thank you. Thank you, sir. Thank you very much. Next question is from analyst Anubhav Sahu from MCPro. Please go ahead. Hello. Yeah. Hi. Thank you. Just a couple of questions. I'm from the Ankleshwar plant. Could tell what is the utilization level for the first block which we have, and can this reach a steady state of peak utilization level? So in the last quarter, Q2, the utilization level was around 20% for the first block which has been capitalized. And of course, when it comes to CapEx, it gets completed fully by end of this quarter. We expect around three years' time to fully occupy the whole capacity. Hello. Yeah. Sorry. So my question was just for the first block. So I mean, 20% we have reached. So particularly for this first block. 20% of the block basis. That is... So 20% is the total capacity of including Block 1, Block 2, and Block 3. Total of 20% is in Block 3 we have utilized. And for Block 3 itself, we are utilizing around 35%-40%. 35%. Okay. Okay. And secondly, I think that the timeline for the CDMO, the second large CDMO contracts which you referred to. And related question would be for the other two blocks which are going to be commissioned this quarter, when do we expect commercial supplies from expansion facility? Which one? The other two blocks, I think. Block 2, I think we should be good to start supply from the Q4 FY 2025. Okay. Okay. And the status on the second CDMO, I mean, have we already signed? No, the supply of the validation batch is already given to them. So now we will start as soon as it is when the qualification finishes, we will start by Q4. Understood. Thanks a lot. Thank you. Next question is from Gautam Rajesh from Northbridge Capital Partners. Please go ahead. Yeah. Afternoon to the management. So I had a question regarding the electrolyte project. Is there any update on the electrolyte project by when do we expect to sign the agreement and start the CapEx on it? Agreement is already signed with several customers, which we already announced last two or three quarters. CapEx will start, already started, and that will be finished by Q1 FY 2026. Right. Right. Okay. Okay. Okay. Yeah. Thank you. Thank you. Thank you. The next participant wants to ask a question. Next follow-up question is from the line of Jason Soans from IDBI Capital. Please go ahead. Yes, sir. Thanks for taking my question again. Sir, I did ask you about the CapEx in terms of the CapEx. That's fine. Just wanted to know, sir, I mean, in light of the QIPs you have done recently. So just wanted to know, in light of that, in terms of CapEx, could you give a guidance for CapEx for 2025 and 2026 both, probably for standalone and subsidiaries both, of course, standalone and then the electrolytes stay separate and BFC also separate if that's possible for 2025 and 2026 both? Yes. For 2025, around INR 70 crore is the CapEx, pending CapEx for Unit 2 Ankleshwar. INR 100 crore is the CapEx for electrolyte additive, and INR 60 crore is the CapEx for so captive solar power plant project. And then around INR 30 crore is the regular maintenance CapEx. These are all around INR 250 crore CapEx is for FY 2025 for AMI Organics. And for Baba Fine Chem, it will be all normal maintenance CapEx only, which is required for regulatory purpose. And the same is for FY 2025 for both Baba Fine Chem as well as AMI Organics Limited. Around INR 30 crore to INR 40 crore is the maintenance CapEx at AMI Organics. Okay. So, sir, roughly you are saying probably around INR 230 crore to, sorry, let's say. INR 250 crore is the CapEx. INR 250 crore-INR 260 crore. Yeah. Yeah. Yeah. Yes. Around INR 40 crore is the CapEx for maintenance CapEx for FY 2026. Sure, sir. So, sir, in terms of what I meant is, when you look at our consolidated cash flow, the CapEx last year for 2024 was around INR 281 crore. So when you look ahead, 2025, 2026, you see roughly on a consolidated basis, we'll do around INR 250 crore, INR 260 crore of CapEx in both the years. No, no. For this year, we are making CapEx of INR 250 crore. And next year, we will be making CapEx of around INR 40 crore. Okay. So this year INR 250 crore and next year INR 40 crores. Okay. Okay. Sure. On a consolidated basis, right? Yes. Yes. Yes. Okay. Okay. And sir, just to clarify, I mean, this capacity utilization, an earlier participant asked, that was for 20%. So that capacity is of the whole Ankleshwar block? Just a little confusing. Could you just elaborate on that? Yes. It is for whole Ankleshwar block. Whole Ankleshwar block is 20% capacity utilization. And in three years, you expect that it will get fully utilized. Is that? Yes. Yeah, and you are also saying that this whole block should be ready to give supplies from around Q4 FY 2025, the whole block. Yes. Yes. Okay. Okay. Okay. That's better. Okay. So that's all from my side, sir. Thank you so much for answering. Thank you. Thank you. Participants do not start and want to ask a question. Next question is from the line of Prince Choudhary from PINC Wealth. Please go ahead. Hello? Yeah. Go ahead. Thanks for taking up my question. I have a couple of questions. First and last phone call, we have mentioned that we are in negotiation with some of our originator clients in Europe, and we expect to sign deal by the end of this Q2 or Q3. So can you please share some traction where we are right now? Yeah, so that is what we said, that it is almost done, and validation batches are sent to them. Once it will be approved, then we will go for the contract and start supplying by Q4 or maybe Q1. Depends how fast they will do the vendor qualification for us in Block 2. Okay. So this is all related to CDMO, right? Yeah. Yeah. 100% CDMO. Okay. Another question was for the 30% growth guidelines which you have mentioned. So this includes CDMO for Fermion or it is still excluded? Right. Everything. The overall growth guidance for AMI Organics, specialty, Baba, everything included. Okay. So this includes Fermion as well, right? Everything. Oh, okay. Yeah. That's it for my side. Thank you. Thank you. Participants, you may press star and one to ask the question. Next question is from Ankur Kumar from Alpha Capital Group. Please go ahead. Hello, sir. Congrats for a very good set of numbers, and my first question is on the increase in other income, which is like INR 8 crore and decrease in finance cost. There is a big reduction in finance cost. So is that all because of QIP money, or is there something else also? So see, you need to understand we have repaid the debt during the quarter. So there is an impact of decreased finance cost. With regard to other income, we have INR 4 crore of interest income and around INR 4.5 crore of exchange fluctuation income. Got it, sir. And sir, on guidance side, you are giving 30% growth guidance for this year. So what kind of margins can we expect? And also, can you comment for FY 2026, can we expect this 25%, 30% growth to continue? Yes. On a margin side, as we mentioned earlier, also the margin is improving because of stabilizing pricing and market situation, and that is going to continue for Q3 and Q4 as well, along with the operational leverage which increased the sales level, and that is expected in FY 2026 as well. Sure. That's it from my side, sir. Thank you. Thank you. Next question is from Prashant Nair from Ambit Capital. Please go ahead. Yeah. Good evening, everyone. On the Fermion contract, is validation for all markets done? So are your supplies now representative of what the overall market demand for the product is, or are some markets still are you supplying only for a few markets now, and the rest is still being supplied by where you saw some earlier? Thank you, Prashant Bhai, for bringing this question because some people might be thinking that 30% with Fermion contract, why slow? It's slowly, slowly ramping up in FY 2025. We already got in a few markets for these, and slowly, slowly FY 2026 will be the fully utilize all the regulated market with them. Currently, we are approved in Japan, in Europe, and some portion of other countries. Then slowly, we will go with all the countries worldwide in FY 2026 with the fully approval for all the regulated markets. Great. Yeah. Thanks. And this product has patent protection till 2032, 2033, that's the timeframe roughly in most of the key markets? Yeah. It will be, and it may be extended also because they already got two new applications already approved, other application approved in clinical trial phase III, so I think that will be much longer what we are expecting, and the demand might be increased because of this new application as well. Thank you. Thanks a lot. Wish you all the best. And a happy event. Thank you. Same to you, Prashant Bhai. Thank you. Participants, you may press star and one to ask a question. Next question is from the line of Piyush Jain, an individual investor. Please go ahead. Piyush, may I request to unmute your line and go ahead with the question, please? Hello? Yes, Piyush. I'm audible? Yes, you are. Yeah. Thank you for the opportunity. And good show, right? Just want to know how much business we did in this quarter in CDMO, and can you share the margin of the CDMO? As Naresh Bhai mentioned, actually, we have stopped giving any product-specific or guidance for revenue or margin from this quarter onward because of confidentiality concerns. Okay. So just as we have spoken also, that excluding CDMO, what type of margin we will do? Will we expand the margin? Because our gross margin has expanded 200 bps only in this quarter. Whereas our EBITDA expanded around 500 bps. So we will not be able to give you the even X CDMO business. Otherwise, people can make out those things. But let me give you that. See, revenue has increased by 42%, and that you can see in our operational margin improvement also. You can see the improvement at the other cost level as well as the employee cost level. In fact, despite of increasing employee cost level, the percentage overall decreased coupled with the improvement of 1.36% at gross level. Okay. Yeah. That I understood. What I'm trying to ask is the gross margin has increased by 2.5% only. So, which I understand is largely supported by CDMO and all. So, have we been able to? Let me ask in a way: have we been able to maintain our margin in intermediates? We are improving margin in all sectors, in intermediates, in specialty, as well as CDMO is not that large in this quarter, but definitely it will be larger from next quarter onwards. Okay. We have given growth guidance revised from 25% to 30% for FY 2025. What is beyond FY 2025, 2026 onwards? We are all conservative in guidance, so it will remain 25% is our standard. Okay, and can you share some details? How many maybe programs which is going on CDMO, which is in pipeline, or which is in discussion with NCE? Can you share some color on this? What should I give answer? So as we already mentioned, that one of the CDMO contracts is already there in the advanced stage of finalization, and we are expecting this to get signed by end of this financial year and next year onwards. That CDMO contract should give us a sizable revenue. In fact, apart from that CDMO, we are working with several other originators in Europe, USA, Japan. And those CDMO projects are already going on. In In some of them, in sampling stage. Some of them are going in next few quarters. So slowly, slowly, all those projects will mature and give us a revenue maybe from next year onwards and thereafter. Okay. Thank you. That's it from my side. Thank you. Thank you. Participants, you may press star and one to ask the question. Next follow-up question is from Gautam Rajesh from Northbridge Capital Partners. Please go ahead. Yeah. Is the full ramp-up of a CDMO project already visible in Q2 numbers, or further scale-ups are expected in the coming quarter? It has just started in Q2. In the later part of Q2, the full ramp-up, the full effect, as well as the ramp-up, is still to get materialized. Okay. All right. Thank you so much. Thank you. Next question is from the line of Varun, individual investor. Please go ahead. Hi. Congratulations on a good set of numbers. Just one question. What is the expected revenue from Ankleshwar unit at full utilization? We expect that our project, all CapEx projects, should give us the more than 3x kind of revenue, and that is what we are expecting from Ankleshwar facility also. Okay. And then what is the full CapEx for Ankleshwar? It is INR 310 crore. Okay, so approximately INR 900 crore is the full expected revenue from Ankleshwar at full utilization. Hi. Can you hear me? Yes. You can work it out that way. Okay. Okay. Thank you. That's it from my end. Thank you. Next question is from the line of Hemant, individual investor. Please go ahead. Thank you for providing the opportunity, and congratulations on a very good set of numbers. Sir, my first question is regarding the capacity. The current capacity is 1,100 KL, right? And as per my understanding, Block 3 of Ankleshwar unit has been commissioned. So once the other two blocks get commissioned, which is in Q3 FY 2025, which is the current quarter, what will it take our total capacity to? For Ankleshwar unit, the total capacity will be 442 KL. Okay. That 1,100 KL capacity which you mentioned, that includes this capacity. Okay. So you mean to say, sir, all the three blocks, if we put together, the total capacity comes out to be 442 KL, and the 1,100 KL capacity includes 442 KL capacity of Ankleshwar unit, correct? Yes. Yes, sir. Yes, sir. Sir, Block 3 of Ankleshwar unit is operational now, right? Yes, sir. Yes. And what is the capacity of Block 3 alone? It's somewhere around 144... 30... KL. Exact number I don't have, but it is somewhere around 134 KL. 144 KL around. 34. 134 KL around. And both the blocks, Block 2 and Block 1, will be operational by Q3 FY 2025, and the commercial production will begin from Q4 FY 2025, right? Yes, sir. Yes. And sir, I mean, did I hear it correctly that the Ankleshwar unit will be fully utilized over the next three years? Yes, sir. Yes. And we are expecting a 20%-25% CAGR over the next three years, right? Yes, sir. Okay, sir. Thanks a lot. Thank you. Thank you very much. Is there no further questions? I'll now hand the conference over to the management for closing comments. I have no further questions. 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 miss any of your questions, please reach out to our investor relations team, and we will get back to you promptly. Once again, thank you very much. Happy Diwali, Happy New Year, and have a good day to you. Thank you. Thank you very much. On behalf of JM Financial Institutional Equities, that concludes this conference. Thank you for joining us, and you may now disconnect from us. Thank you. Thank you.