Ladies and gentlemen, welcome to the Akums Drugs and Pharmaceuticals Limited Q4 and FY 2025 earning conference call hosted by Ambit Capital Private Limited. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions at the end of today's presentation. Should you need assistance during the conference call, please signal an operator by pressing star one zero on your touch-tone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Pranav Chawla from Ambit Capital. Thank you, and over to you, sir. Thank you, Rhea. Good morning, everyone. I'm Pranav Chawla on behalf of Ambit. Welcome you all to the fourth quarter and FY 2025 earnings conference call of Akums Drugs and Pharmaceuticals Limited. Today on the call, we have the following management members: Mr. Rajeev Jain, Managing Director; Mr. Sandeep Jain, Managing Director; Mr. Sumeet Sood, CFO; Mr. Sahil Maheshwari, Head Strategy. I now hand over the call to the management for opening remarks. We'll follow this with Q&A. Thank you, and over to you, sir. Thank you, Pranav, for the introduction. Good morning, everyone, and welcome to Akums Q4 earnings call. I'm Sahil. Let me draw your attention to the fact that on this call, our discussion might include certain forward-looking statements, which are predictions or projections of future events. Our business faces several risks and uncertainties that could cause our actual results to differ materially from what is expressed or implied in such statements. As Akums, we do not undertake any obligation to publicly update any forward-looking statements, whether as a result of new confirmation, future events, or otherwise. Having said that, I hope you all have gone through our investor presentations and financial results that we posted yesterday. I would now like to hand it over to the Managing Director, Sandeep Jain, to discuss our performance. Thank you. Thank you, Sahil. It gives me immense pleasure in declaring the Q4 and full year FY 2025 results of your company. While your company started its journey in 2004, FY 2025 will remain as in its memories as it got listed on the stock exchanges on 6th of August 2024. We once again extend our sincere gratitude to all stakeholders and remain committed to creating long-term shareholder value. As you are aware, that FY 2025 has been a year of significant volatilities for the industry, that is, domestic pharma. We witnessed significant price erosion in API as well as muted volumes. This impacted the core CDMO business as well as further delayed the turnaround of the API business. This results in flat revenue growth of your company. However, despite these headwinds, Akums gripped the spread shown through, and we managed to maintain our margins and generated healthy cash flow. The Q4 volumes grew up by 9% year-on-year, while the FY 2025 volumes grew by 1% higher than the overall market volume group. We increased our R&D spend by 16% to INR 130 crore. We continue to add new growth levers to boost our performance in fiscal 2025. We launched 31 DCGI products, including the recently off-rated empagliflozin and its combination, silodosin and mirabegron bilayer tablet, amongst others. We also expanded recently capabilities for nasal sprays, eye drops, bilayer tablets, ampoules, and FFS small volume parenteral, as well. We continue to increase our niche portfolio offering to our partners. Your company also operationalized a new injectable facility in Q2 FY 2025, which will further cement our trial drug leadership in India. In the coming year, we have a CapEx plan of approximately INR 300 crore, wherein we will expand our product offering by setting up lines for oncology, steroids, FFS, LVP, amongst other things. We took noteworthy steps toward becoming a global CDMO by signing an approximately EUR 200 million contract with a global pharma company. We have already received part consideration, that is, EUR 100 million in April 2025. The supplies for this will commence in 2027. We also got audited by ANVISA in April 2025 for our injectable facilities, and hopefully, we will receive approximate approval in next quarter. Our in-licensing products of Triple Hair, Canada, Caregen Korea are on track and undergoing trials and regulatory commissions. Discussions are also progressing well with the Zambian government to finalize the modus operandi and form a manufacturing JV. These are exciting times as we continue to build a global pharmaceutical company. Now, moving on to operating performance, operating performance of the company in Q4 was robust, with overall revenue growth 12.4% and adjusted EBITDA growing by 13% year-on-year. For the year, our performance was flat for both revenues and EBITDA, as compared to last year. As we mentioned, this was largely on account of price erosion of APIs, as our revenues are built on a cost-plus model, where cost of input API and packaging material are passed to the customers. Further, with muted industry volumes, the overall demand in the Indian pharma market was soft. FY 2024 has had a sizable product development contract of INR 126 crore. If we exclude to account revenue from manufacturing services, CDMO revenues grew by 2%. API EBIT losses continue to, on their downward trend as we continue to focus on bringing profitability to this business. Beyond Indian markets, we are also exploring global markets to improve rationalization. Realization over 10% of our sales in FY 2025 was international market. Over the next 12 months-18 months, we expect to enter the European market with three CEP approvals. We invest around 4% of API revenues in R&D to improve margins, profile of existing portfolio, and build dossier for European market. Our domestic branded formulation business continues to do well with 9% revenue growth and 12% EBIT growth for the full year. Our IPM ranking improved to 58 in FY 2025. Our PCPM improves, improved approximately 20% over the last three years, while we also added around 14% new sales professional to our team. We continue to focus on focusing on specialty physicians, with 70% of our coverage being specialists. Further, 70% plus of our portfolio is chronic, with focus on gynecology and cardiac diabetes. The international branded segment has been performing well for the last few years, registering over 25% CAGR since FY 2022. We are present in 50-plus countries across Africa, Southeast Asia, and penetrating into European, LATAM, and MENA regions. Over the last three years, our 450 dossiers were registered in various global markets, showcasing our R&D and regulatory strengths. Now, I will hand over to Mr. Sumeet Sood, our CFO, for the financials. Thank you, Sandeep Jain, for the insight. I'll take you through the financials of the company. If we look at the full year consolidated numbers of revenue, we were at INR 4,170 crore. This is 1% lower than last year, which was INR 4,212 crore. Adjusted EBITDA for the full year was very similar. On exact numbers, it was INR 2 crore lower. For the current financial year, it is INR 234 crore as compared to INR 220 crore in the previous year. If we go to the quarterly numbers, the March total income came to INR 1,073 crore. That is 12.4% higher on year-on-year basis. INR 954 crore was for the quarter ended March 2024, and it's 5% higher than the December quarter. If we look at the adjusted EBITDA for the CDMO business for Q4, it was INR 111 crore compared to INR 98 crore for March 2024. This is 13% higher, but it is 18% lower than the December 2024 number, which was INR 136 crore. Our PAT stood at INR 44 crore. It was similar to what we did the last quarter. However, this was lower than Q3, which was at INR 66 crore. If we look at what we've done for our financials, is that we were presenting three segments. We have sort of further broken that into five business segments, and we will probably tell you the results of each of these segments separately. For the CDMO, if we look at the overall revenue, it was at INR 3,208 crore. It was 2% lower than last year. EBITDA for the full year was lower by 7%. If you look at, we were at INR 487 crore last year. We touched INR 454 crore this year. For the quarter ended March 2025, revenue was INR 840 crore. It is 15% higher than the last quarter and 7% higher on quarter-on-quarter basis. EBITDA for Q4 was INR 89 crore, 9% higher year-on-year basis, which was INR 81 crore for March 2024, but 27% lower on quarter-on-quarter basis, where it was INR 121 crore. If we look at the business that is on domestic branded segments, the overall full year revenue was INR 434 crore. It is 9% higher than last year, which stood at INR 398 crore. EBITDA for the full year stood at INR 77 crore compared to INR 68 crore l ast year. This is 12% higher. For the quarter ended March 2025, the revenue was INR 104 crore compared to INR 94 crore, which was in March 2024, which is then 10% higher year-on-year basis. However, 6% lower quarter-on-quarter basis, which stood at INR 110 crore. If we look at the EBITDA for the Q4, it was INR 22 crore, 11% lower on year-on-year basis, which was INR 25 crore in March 2024, but 10% higher on quarter-on-quarter basis, which stood at INR 20 crore. The international branded segment has done a total revenue of INR 143 crore compared to INR 125 crore last year. This is 14% higher. EBITDA for the full year stood at INR 28 crore compared to INR 24 crore last year. It stood 15% higher from last year. For the quarter ended, the revenue was INR 40 crore, which is compared to INR 21 crore, 86% higher year-on-year basis, however, 7% lower on quarter-on-quarter basis. EBITDA for Q4 was INR 7 crore, significantly higher than INR 2 crore for the quarter ended March 2024, and 12% higher on quarter-on-quarter basis, which was INR 8 crore for the quarter ended December 2024. API business, as Sandeep Jain had explained, you know, our endeavor is to see how we can reduce the losses. If we look at the total revenue, this year we did INR 219 crore, which was, you know, which was higher than last year, but very nominal, which is INR 6 crore, so 3%, 3.2% higher. For the full year, the EBITDA losses were mildly declined from INR 44 crore, you know, which stood now, and last year it was INR 46 crore. For the quarter ending March 2025, the revenue was INR 50 crore, INR 10 crore higher year-on-year basis, however, 20% higher on quarter-on-quarter basis. For the quarter ending March 2025, EBITDA losses declined to INR 6 crore from INR 8 crore. The trade generic business, the total revenue stood at INR 115 crore, INR 60 crore lower than last, INR 62 crore lower than last year, which stood at INR 176 crore. For the full year, the EBITDA losses have slightly declined to INR 28 crore from last year, INR 33 crore. The quarter ending revenue was INR 22 crore compared to INR 30 crore in the previous quarter. For the quarter ending March 2025, the EBITDA losses were higher at INR 10 crore from INR 7 crore in Q4 FY 2024. The operating cash flow for the group continued to be positive and healthy. We were at INR 465 crore, INR 498 crore last year, and the cash conversion ratios stay at above 90%. The free cash flow also stood at INR 201 crore, INR 212 crore was for the last year. As Sandeep Jain during his session mentioned that we on the 9th of April got, you know, the part payment for the EU-GMP contract, we got INR 950 crore. We had the surplus cash of INR 566 crore. The company today has a war chest and cash surplus of INR 1,520 crore. Our working capital stays healthy. The net working capital has improved from 99 days to 91 days. We are pretty, you know, happy to announce the results of the company. We would request you for your questions now, and we will collectively try to answer all of them. 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 touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the questions are assembled. First question is from the line of Vivek Agrawal from Citigroup. Please go ahead. Hi, thanks for the opportunity and congrats on a decent set of numbers. FY 2025 was a bit challenging because of the pricing and all these things, right? How to look at the numbers as far as the CDMO business is concerned in terms of growth and margin profile for FY 2026? Thank you. Thanks, Vivek. I'll here. So rightly said. If, if, even look at now, the volatility in API prices still continue. While we initially thought that it would subside in a few quarters, but, honestly, today we still see a downward trend in APIs, right? Since, you know, it's a cost-plus model, where almost half of our cost is APIs in our transfer pricing, right? Giving guidance really on the top line is tricky at this point in time given the API prices still continue to be soft. What we can do is, give a broadly a volume guidance. As you mentioned, we grew 9% quarter-on-quarter volumes. So the quar the volumes are coming back, right? That in internally means either the inventory is getting restocked or there's inherent demand for the new products that we have launched, right? What we expect in FY 2026 is that we'll have a single high-digit volume growth. On top of it, if the API revenues, if the API prices stay the same, then we'll have a similar revenue profile. If the API prices continue to move up to their average levels, which are currently very low, we'll have a better revenue growth. As of now, since the API is volatile, we cannot say it, but the volumes will be in single high digit, which you obviously know is much higher than what the overall IPM would do. Understood. In this quarter, CDMO business grew quite decently, right? The margins were slightly on the softer side. Would you like to explain basically how or what caused quite, quite a bit of volatility as far as the margins are concerned? Sure. While you, this should be looked at a quarter-on-quarter Q4- to- Q4. Q4 usually has a product mix or a product profile which is of lower gross margins compared to the other quarters, right? That remained there. If we look at really nine months, and three months of this quarter, broadly, more than half of it was on account of higher COGS, which is a product mix. This is a quarter-on-quarter phenomenon just we saw last year, the year before, and so on. This is why it should be looked as an annual business, which we continue to maintain a similar guidance on. That partly mostly explained. Quarter four also has some bonus payouts and provisions. That is a minor part of it, but largely it is the product mix which drove down the margins. Thanks. Just last question before I jump in the queue. If you look at trade generic and API revenues, API business, right? It is continuously, I think, loss-making. If you look at quarter numbers, trade generic losses have been widened. What is the thought process around this business, continuing this business going forward? Thank you. See, Sandeep [Foreign language], significant, positive results [Foreign language]. Now we are in the process of consolidating this business or at least to maintain [Foreign language] losses [Foreign language]. We are in the process of consolidating this business. [Foreign language] API [Foreign language]? Yeah, yeah. As far as API is concerned, we are still there in the business and we will remain be there in the business. We are trying to curtail our losses. [Foreign language] curtail losses [Foreign language] curtail [Foreign language]. Our revenue [Foreign language] positively [Foreign language] It's around 10%, 10% of the volume growth. Sorry, revenue growth [Foreign language] plan [Foreign language] losses [Foreign language] significantly [Foreign language] plan [Foreign language]. Just, coming back on trade generic. So when you say consolidating the business, means, overall, reducing the overall footprint or overall size of this business, is that a right way to understand? Yeah, yeah. You [Foreign language] right. [Foreign language] business [Foreign language] it is not like we are going to zero down this business. [Foreign language] portion [Foreign language] positive [Foreign language] profit making [Foreign language] portion [Foreign language] live on [Foreign language]. Thank you, sir. This is helpful. Thanks from my side. Yeah. Thank you. Next question is from the line of Gautam Gosar from Monarch AIF. Please go ahead. Mr. Gosar, you can go ahead with your question. As there is no response, we will move ahead to next question. Next question is from the line of Abdulkader Puranwala from ICICI Securities. Please go ahead. Yeah, hi. Thank you for the opportunity. Sir, first on the CDMO growth, this quarter, so partly you explained about volumes. You know, is there any pricing element also in this particular quarter? Have we been able to increase prices or if the mix has just changed and due to that, there is a better realization? [Foreign language]. What we have also done in our investor presentation, what we did, we tried to show a waterfall around it. As the gross margins of the overall CDMO business have improved, the product mix overall has also improved [Foreign language]. This is partly on account of the DCGIs, which we have constantly strived for. This year also we received 31 of them, and also on account of improved product mix. [Foreign language], which we have classified as base and niche being everything which is research-driven or talk-to manufacturer or injectables and so on, [Foreign language] over the last three, four years [Foreign language]. The gross margins are improving in this business. Okay, okay. Understood. Secondly, on any color on the second cell product launch, are we now looking at this for an international market opportunity only? Any color on, you know, when the uptake will happen in the India market? [Foreign language] opportunity [Foreign language] visibility [Foreign language] c lear-cut visibility, [Foreign language] we are not, available to see those clear-cut visibilities. [Foreign language] still we are very much hopeful [Foreign language] business [Foreign language] market [Foreign language] realize [Foreign language] consumers [Foreign language] realize [Foreign language] it is going to be a big business and big margin products as well. [Foreign language] patent holder [Foreign language] cost [Foreign language] international products [Foreign language] w henever there will be a revenue or the profit, it will be an add-on to our guidance. Okay, okay, sir. Understood. Sir, next, you have received this EUR 100 million from the export order, I mean, how do you plan to deploy this cash? Would that be on the books till the time commercial supply starts or is there any plan to utilize it before? We are looking at it as, we are looking at opportunities which will have synergic benefits to the company. Right now, the money is parked, well invested, but businesses which will have synergic advantage with us, profit-making businesses, is what we will probably look at. [Foreign language]. One is the specific money which has been parked, [Foreign language] purpose [Foreign language] purpose [Foreign language] utilize [Foreign language] invoice [Foreign language] product [Foreign language]. Because we are cash positive, we are looking for some merger and acquisition opportunities [Foreign language] different type [Foreign language] merger acqu of course within the pharma space only. [Foreign language] profitable [Foreign language] value add [Foreign language] supply chain [Foreign language] product mix [Foreign language] client base [Foreign language] type [Foreign language] opportunities [Foreign language]. Certainly profit-making businesses [Foreign language] explore [Foreign language]. We are very mindful [Foreign language] public [Foreign language] value add [Foreign language] stakeholder [Foreign language]. Got it, sir. And sir, finally on, okay, top line guidance to the, any color on EBITDA, what does the EBITDA margin or absolute EBITDA look like for next fiscal 2026? So [Foreign language] business size [Foreign language]. CDMO will remain similar margins to this year. [Foreign language]? Akumentis and Unosource are already high margin profile compared to the overall average corporate. So [Foreign language] similar margins of 18%-20% [Foreign language]. As, sir was explaining [Foreign language], consolidate [Foreign language]. The magnitude of losses in the trade generics, we still have to think through. but, will come down. And API, we are significantly focusing on how do we reduce losses. [Foreign language] Q4 [Foreign language] EBITDA loss [Foreign language]. Right? We are significantly working on how do we bring down these losses. [Foreign language] businesses [Foreign language] will maintain a similar margin profile and the loss-making couple of businesses will see losses coming down. The overall margin profile of the company will move up. Got it. Thank you. Thank you. A reminder to all participants, you may press star and one to ask questions. Next question is from the line of Madhaw from Fidelity. Please go ahead. Hello. Hi, good morning. Thank you so much for your time. My first question is on the trade generic business. You know, the revenue has been coming down for us consistently, right? Like if I look at FY 2022, we were at INR 500 crore plus revenue, which is now INR 100 crore. The absolute EBITDA here has actually gone up from INR 20 crore to INR 28 crore. Could you explain what is happening here? You have scaled down this business consistently, but EBITDA is still higher. I mean, how difficult is it to just close the business and, you know, just bring the losses to zero? Because I am not really sure what we are trying to do here. Sure. Thanks, Madhav, for this question. Essentially, if I am business, the trade generics business, it has been this business. One this business. One is, it is characterized by low pricing. [Foreign language]? In an absence of quality parameters, I think pricing is what demands the overall channel play. The second is the working capital requirements of this business are high. Right? So, [Foreign language] question [Foreign language] on EBITDA, this is why we have scaled it down, essentially that the profitability of this business is consistently deteriorating across the board and very significantly for us. Right? [Foreign language], the COGS is significantly higher for us. [Foreign language]? That is the reason the margin profile is coming down as well as given the working capital needs are high. There are some provisions and write-offs in this business. [Foreign language] EBITDA loss [Foreign language]. That's the overall reason why we think that while we have, over the last two, three years seen how we can turn this around. Given the current scenario of the business where a branded player significantly helps you in a trade generic business and, since we are largely a CDMO business, in an absence of a large branded play, we do not see this as a meaningful opportunity to us. So that's exactly my point. Like why don't we just close it? Like just take the revenue to zero and then the EBITDA should go away, right? Madhav, so there's a working capital in the business, right? If I immediately turn off the plug, that money is a risk that entire working capital might get provision for. There are active efforts wherein we'll reduce our exposure on the working capital and when the time is right, we'll take a call on shutting down the states, specific states or what's up, [Foreign language] losses [Foreign language] specific product lines. We'll continue to have some presence in this business if necessary. While I don't say we'll have it, the whole idea is to scale this business down. Okay. Got it. Secondly, I think you had mentioned about looking for some M&A opportunities. Could you help us understand, like, which is it in the CDMO business itself you're looking for M&A and, you know, some more color. Is it for the domestic market play? Is it for export? I guess, just last clarification was, we have INR 1,500 crore cash on the balance sheet, including the money for the European contract. So fair to understand that INR 1,000 crore we will not touch, right? It's only from this INR 500 crore and then any other leverage that we may take. That inferencing will happen or that INR 1,000 crore also we can use for M&A? So, money is valuable, [Foreign language]? So INR 1,000 crore have with us, [Foreign language]? While the endeavor is we'll have this money with us, but if needed, we can already have an OD facility on the FD we have created on it. Right? [Foreign language], since it's INR 1,500 crore, I think it's a good question for the entire group [Foreign language] leverage or use [Foreign language]. So [Foreign language] businesses [Foreign language], right? Let's strike it off, [Foreign language] M&A [Foreign language]. You cannot do an M&A in trade generics. You cannot, we don't want to do in APIs. Right? So these two businesses are off the table. [Foreign language]? On Akumentis, while we plan to grow it above the IPM at double-digit growth rates, inorganic is not a key lever for us for growth in this business, partly because this is not one of the core focuses of the group compared to CDMO and also the market multiples are high in this business compared to other, the corporate. [Foreign language]? That is one business. If we get something very good and synergistic to Akumentis, we might explore, but this is not the top of priority for us. [Foreign language] businesses, CDMO and exports, [Foreign language] we are looking at, M&A opportunities. CDMO [Foreign language] specifically [Foreign language], there are two areas we have drilled it down. One is [Foreign language] capability add [Foreign language]. Right? Maybe a dosage form, a technology which we do not have and it is a commercially profitable technology which we can acquire or a product line or a business we can acquire, which will add capability altogether to us. That is one. The second is a CDMO or a similar business wherein we get exposure to newer markets which we currently do not serve. These are the two kind of businesses we are looking at in CDMO. Within exports, we have shortlisted some of our gold markets, approximately 15 of our countries out of 50 which we currently operate in are gold markets for us, and we constantly will look at if we get some good opportunities to expand our business in those markets. As you know, this is a business of focus for us. We intend to grow at least 20% year-on-year on this business with current high level of EBITDA margins. This is a business where we can look at M&A opportunities. Just to follow up on the CDMO for newer markets, I'm assuming that's obviously export market. We may look to buy a facility as well overseas, or we just want to get market access, so we'll buy some local company with supplies from the Indian plant itself? Because we do have a low-cost advantage, you know, being based in India. While we are open, we are open to both, honestly, Madhav. The tilt obviously will remain to control the manufacturing, right? It should be a facility wherein we can control the end-to-end of it. Okay. Just on the API business guidance, could you give us some timeline by when this loss can go to zero? What's the updated timeline there? See, see, presently we do not see any timeline [Foreign language] zero [Foreign language]. This year, this is going to remain in loss and probably next year also, but the losses are going to be, say, half, by the end of this year. For sure. Okay. Okay. Got it. Thank you. Thank you. Next question is from the line of Anand Padmanabhan from PGIM India Mutual Fund. Please go ahead. Thank you for taking my question. Sir, in FY 2024, you had a product development revenue of close to INR 126-odd crore. Is it fair to assume that in FY 2025 you had zero product development revenues? Yeah. Almost zero, sir. Okay. [Foreign language]. Okay. What is the outlook for this particular line of revenues in terms of do you see is there any visibility of getting these revenues in the coming years? Coming year, yes. I [Foreign language] visibilities [Foreign language], but [Foreign language] factor [Foreign language] business [Foreign language] specific demand [Foreign language] comment [Foreign language]. To [Foreign language] guidance [Foreign language] factor [Foreign language]. Whenever it will be there, it will be an add-on. This product development will typically pertain to the domestic market, right? Or is it for? No, no, it is not. No, no, domestic [Foreign language] mostly [Foreign language] Europe market [Foreign language] regulated market [Foreign language] product development [Foreign language] margin [Foreign language]. Okay. [Foreign language] European contract, contract [Foreign language] long-term contract [Foreign language] EUR 100 million [Foreign language] upfront, for this particular contract, [Foreign language], what is the amount of CapEx and OpEx that you will need to incur before FY 2027 to have the facility or get your capability up and running? So, [Foreign language]. We'll have to get the plant done and we'll have to have the product approved, right? What we are thinking on these lines is that this is roughly a EUR 20 million expense for us, wherein we will develop the dossier, register it in most of the European countries, as well as we'll upgrade our plant to get the European GMP. We are also investing in a new product facility in A11, which is our Baddi 1 facility, wherein we will again set up world-class, high, sophisticated lines to serve to European markets and get the European approval. This contract cost of this would be $20 million? EUR 20 million. Right? It will be EUR 20 million. EUR 20 million. EUR 20 million. Sorry. EUR 20 million. Okay. Okay. Fair enough. Sir, in terms of on a full-year basis, full-year basis, okay, in terms of you said that the pricing continues to be volatile. Even on a Q-Q basis, the prices has, pricing in the CDMO business has been negative, on a Q-Q basis? Yes. Okay. Okay. Okay. Coming on to FY 2020, even in FY 2026, as of now, you don't see any visibility of prices stabilizing? No. So if you look at large end-to-end factors, right, whether you look at amoxicillin, whether you look at cardiodiabetes, telmisartan, and so on. Most of the APIs still continue to be very soft. These are large APIs that dominate the Indian pharma market, right? Pantoprazole and so on. Currently we do not see that the API prices are stabilizing. Given it is a costless model, this honestly does not impact much on our gross margins, but that is not how the facility operates, right? It is a constant endeavor that we will have to optimize our manufacturing expenses, and hopefully these are not the levels which most of the industry would be happy at. Maybe it can take a quarter or two quarters or three quarters. We do not know. These are significantly lower prices compared to our historic averages. Since you operate on a percentage margins, this historically has held true even on a rising API price scenario as well. Correct. Very right. Okay. Thank you, sir. That's all from my end. Thank you. Next question is from the line of Pranav Chawla from Ambit Capital. Please go ahead. Thank you, sir, for giving us the opportunity. Sir, I had a couple of questions. Sir, how, when do we think we'll be able to EBITDA break even the API business given the current scenario of the prices are stable? Are we still targeting end of FY 2026 or we expect it to be pushed to FY 2027? Yes. If we're going to talk about API, most of our revenue, what we get is from the cephalosporins. Cephalosporins were a class of drugs which were hit harder, right? Almost 20%. We saw a price erosion, right? While the endeavor on manufacturing optimization, yield, solvent recovery, those have went well. The overall COGS percent moved up due to sale price reduce over here, right? As we, tentatively, guided that we should be able to bring down the losses by a good fraction, almost, if the endeavor is to bring down by INR 15 crore, INR 20 crore this year from the last year, right? This is what the endeavor is. We might not be able to do positive this year, right? A lot will depend on how the cephalosporin prices move, which will drive our next year profitability. But [Foreign language] the endeavor is to bring down the losses, consistently. Whether these will be zero for the year or it would be single-digit losses, we'll really have to look at because this is a commodity cephalosporin business as of now. [Foreign language] better question, I think, how do we do it? There are two things in parallel we are doing. One is we are exploring the global markets. As Sandeep sir mentioned, [Foreign language] aglestal 18 [Foreign language], the intention is to do three CEPs, and these will be largely across cephalosporins, right? Do three CEPs and get the plant audited and approved by the European authority. [Foreign language] there are lesser players, few players have CEPs, and there are better realizations as well. That is one thing we are constantly doing. The second thing is domestic, maybe expanding the client base to ensure that the kind of market which we serve, we are fully entrenched into the domestic market. Cost reduction [Foreign language] has always been our focus in this business for the last two years, right? This is what we are doing. We are very hopeful and positive, Pranav. At this point in time, you'll understand, get into my shoes, you'll realize [Foreign language] break even [Foreign language], this largely depends on the external API pricing scenario. Sir, do we have any deferred tax credit from this API business? If yes, can you quantify that? Yeah. So it's in a plenty. You know, we have had both the acquisition taxes which came in with this business. We have over INR 850 crore, close to INR 879 crore of, you know, tax losses which came in with this business, and they continue to be here. That's something that is the fact. Are we able to utilize these tax losses as of now, or do we see some time when we'll have to wait for API business to be profitable to utilize these credits? No, no. We should in the next four years be able to utilize these losses. We had mentioned in our earlier calls that to utilize these tax losses, one of the ways we had done was that we had merged this entity with Pure and Cure, right? Some of those benefits we are getting from our largest CDMO business. We think we will be able to utilize them in the next four years. Perfect. One last question from myself, sir. In the opening remarks, we've mentioned we had certain excess provisions in this quarter. Do you want to call out what would be the quantum of this? You know, so we'll give you a broad understanding what are these provisions. I think, a lot of you asked questions around what in the trade generic are we doing. Some of these provisions came in to see that once we are sort of consolidating this business, we try to understand some of these debtors' provisions that could be there. I think broadly for the guidance, it is in line with the strategy that the company is following. I think, that is really where the provisions are. Perfect. Thank you so much, sir. That would be all from my end. Thank you. Next question is from the line of Madhav from Fidelity. Please go ahead. Yeah. Just to follow up, on the export business, you know, where we did about INR 143 crore, in FY 2025, I think could you give us some sense in terms of how the base business can grow? And then also the European contract, you know, which is a very large contract for us, could you give us some timeline in terms of, you know, when does it start and what could be the steady state annual revenue? And anything on the margins as well of this European business? If you could give some conundrum, that would be great. This largely will be, this is a EUR 200 million contract on a six-year basis. Largely, [Foreign language], this will be a INR 300 crore, INR 350-odd crore top-line business, with similar margin profile for us. This will be a similar margin profile in the CDMO business. [Foreign language], this business will fall in the CDMO business for us, right? [Foreign language] if you talk about the base export business, which is our branded business, what we do, this, as I said, this is a base business for us. In absence of any inorganic as of now, this will continue to at least grow in high double digits, 20-odd% growth for us over the next two, three years. The commercial supplies for the European contract will start in 2027, most likely in Q4 of 2027, around February, March of 2027. Q4 FY 2027, so okay. February, March 2027 is in that sense. Okay. Okay. So FY 2028, we should reach the full steady state of INR 350 crore or it takes some time to ramp up? Correct. No, no, no. This is a stable product with a stable market demand. This is not a new launch. This will have a stable demand of INR 30-odd crore monthly. Okay. In the next, like FY 2026 and FY 2027, given we need to incur some cost for, you know, filing the dossiers in Europe, etc., is there any expense that we will put in the payments for this contract, like FY 2026 and FY 2027? You could have some cost coming through or how, how would that work? This on the basis of the accounting standard would work on a composite accounting, right? The expenses get charged off when the revenue recognition happens, right? Because the enduring benefit will be over the period when the revenue comes in. While there would be capital expenditure, which will happen, but as I said, this will be on the basis when the revenue comes in. Okay. FY 2026, for instance, we're not going to incur any cost. Like it will be sort of accounted for when we have the revenue, right? That's the way we should think. Yeah. Yes. There will be an expenditure, but it will not be charged to the P&L. That is what I was trying to reply. Capitalize it. Yeah. Okay. Yes. We'll capitalize it. Yeah. Perfect. Thank you. Thank you. Next question is from the line of Naman Bhansali from Nine Rivers Capital. Please go ahead. Hi, sir. Thank you for the opportunity. My first question is on the utilization level that you've given in the presentation. On average, we are varying around 31%-38% in the FY 2025 full year. My question is, why are we running on such a smaller utilization level versus our peers who report around 50%-60% utilization levels generally? Is it something to do that we have done a much larger CapEx than our business demand currently persists? See, [Foreign language], say, around 1,400 [Foreign language], with 4,000 different products and with around 18,000 different SKUs. [Foreign language], there are so many plants like and all, 50-60 dosage forms as well, may be ampoule, vial, injection, [Foreign language], FFS, large volume nasal, tablets, capsules, hard gel, soft gelatin. [Foreign language] what is multiple products, multiple changeovers? [Foreign language] number of changeovers [Foreign language] capacity, [Foreign language] specific capacity [Foreign language] utilize [Foreign language] in changeovers. One. [Foreign language] it is, like large volume parenterals [Foreign language], injectables [Foreign language] 70%, 80% [Foreign language] capacities [Foreign language] achieve [Foreign language]. Wherein [Foreign language] tablets, capsules [Foreign language] changeovers [Foreign language] capacities [Foreign language] use [Foreign language] hormone facility [Foreign language] hormone facility is running, say, at around 10%, say, 20%. [Foreign language] hormone business [Foreign language]. The same way when we are going to, say, make CapEx on few more businesses, [Foreign language] dosage forms [Foreign language], like we are going for oncology, we are going for steroids, which are not there in our basket. [Foreign language] capacity enhancement [Foreign language] different type [Foreign language] dosage forms [Foreign language]. LVP, we are already short of capacities, [Foreign language] LVP [Foreign language] capacities [Foreign language] build [Foreign language]. The same way we are going to build the capacities [Foreign language] capacity [Foreign language] 40-60 [Foreign language] it is not going to be 100% in pharmaceutical and specifically with our business, wherein, we are having 18,000 different kind of different SKUs. Got it. Got it. So ideally, should we assume that it should be at peak, maybe around 40-50% only and not more than that? No, no, no. [Foreign language] product [Foreign language] check [Foreign language], validate [Foreign language] at up to 60%. So at any point of time, we can go up to 60% very easily without making any efforts or with least minimum efforts or 60%, 65%, 70% [Foreign language] lines [Foreign language]. Got it. It is specific to some future few lines. [Foreign language] lines [Foreign language] 80%, 85% [Foreign language]. Got it. Got it. Understood. Second question is on CIFA, given it's a very competitive market as well as commodity market. Also, given that we have almost 80% of our business from CIFA in the API side, are we looking to enter into any other different API segments or any other different API that we are looking out to diversify this segment and which might help us get more margins quicker? See, we do have two different plants. One is for, one is meant for cephalosporin as [Foreign language] category [Foreign language] cephalosporin [Foreign language] pharmaceutical [Foreign language] we cannot manufacture anything other than cephalosporins in the specific plant. [Foreign language] plant [Foreign language] cephalosporin [Foreign language] strength generate [Foreign language], profit [Foreign language] plant [Foreign language] products [Foreign language] regularly [Foreign language] we are increasing the volume in those plants as well. Got it. Got it. And lastly on the international business, this year I think we grew around 14%, and is there a scope here to grow at more than that range, around 20%? Yes. Yes. [Foreign language] scope [Foreign language] definitely, [Foreign language] achieve [Foreign language]. In this financial year [Foreign language] achieve [Foreign language]. Got it. So then on the dossier side, this year we are almost 70 approved what is last three years. Sorry to interrupt, sir. Can you please move to the question queue for follow-up questions? Sure. Thank you. Next question is from the line of Dheeresh Pathak from WhiteOak. Please go ahead. Yeah. Thank you, sir. So what will be the CapEx in FY 2026? Right. You know, we had given, last time we have said that we will be going to Jammu. We have broken down our CapEx into maintenance CapEx and, you know, growth CapEx. The maintenance CapEx would also take, you know, upliftment of the entire thing. We are looking at almost INR 300 crore CapEx in this year, of which we think close to INR 100 crore, one third of the total CapEx, will go into, you know, basically maintenance and modernization. The growth CapEx would be on INR 200 crore for the year. This INR 200 crore, where are we spending the growth CapEx? [Foreign language] Jammu [Foreign language] liquid oil [Foreign language] European operator [Foreign language] business [Foreign language] additional [Foreign language]. Although we do have a line, [Foreign language] current line [Foreign language] modernize [Foreign language] investment [Foreign language] oncology [Foreign language] steroids [Foreign language] facility [Foreign language]. Okay. Sir, in the cash flow, there is a significant increase in principal payment of lease liabilities from last year, INR 52 crore versus INR 8 crore. What is that related to? Lease liability. My audible? Hi. This mis Sumeet, you know, this is basically for one long-term facility that we have taken to have basically a place as a guest house for people to be there because a lot of people visit from various places to Haridwar. That is where that liability has increased because it is a long-term, you know, long-term lease liability that we have created over 30 years. Guest house. Okay. Yes. Okay. Thank you. Thank you. Next question is from the line of Gautam Gosar from Monarch AIF. Please go ahead. Hi, sir. Thank you for the opportunity. Sir, I have a question on your utilization levels. Since you explained that, I just wanted to understand if you have so many facilities already running, can you please highlight which of your facilities are north of 55%, 60% utilization levels? See, if you facility-wise facility [Foreign language] dosage-wise [Foreign language] current, [Foreign language] old facilities [Foreign language], injectables [Foreign language] 70%, 80% [Foreign language]. Liquid oil [Foreign language] facility [Foreign language] 70% [Foreign language]. While OSG facilities [Foreign language] around 40% [Foreign language] operate [Foreign language] facilities [Foreign language], like [Foreign language] A12 [Foreign language] injectable [Foreign language] facility [Foreign language] which is running more less than 5% because [Foreign language] business [Foreign language] grow [Foreign language]. The same way [Foreign language] facility [Foreign language] Cote around 10% [Foreign language] operate [Foreign language]. [Foreign language] leverage [Foreign language] facilities [Foreign language] client [Foreign language] introduction [Foreign language], product develop [Foreign language] Product develop [Foreign language] stability data [Foreign language]. Sir, except for the new facilities, all our old facilities are north of 45%-60% utilization levels? [Foreign language] old facilities [Foreign language], yes. [Foreign language] plant one [Foreign language] dedicate [Foreign language] exports [Foreign language] plant four [Foreign language] hormones [Foreign language] specific to the dosage form [Foreign language]. Okay. I think then the blended utilization levels should be much higher than what we are reporting, around 50%, 40%. I couldn't get you. Can you repeat your question? Your voice wasn't as clear. Basically, if all our old facilities are north of 45%, 50% utilization levels, then the blended utilization for us should be like more than 40%, 50%, which currently is around 35%, 40%. I cannot understand where the gap is coming from. No, no, no. Let me reclassify. Jahangape, so inherent challenges with a few facilities that the overall market volumes are low. [Foreign language] hormones [Foreign language], that operates at sub 20%. Similarly, plant one we have reserved for Europe, where we are still building volumes. [Foreign language]. Most of our old facilities, [Foreign language] blended average [Foreign language] that comes out to be 40-odd%. Okay. We have added capacity. As you see, over the last four years, we have added almost 1/4 of our capacity. We have added to our list. This is across these dosage forms which we report, right? Some are, injectables we are operating at almost 50% plus. If you pick up the RHPC plant three, we were higher, right? Now you see it's gone down to 32% because the injectable facility, obviously, which is larger in terms of the units that we produce, brought down our utilization for injectables to 32%. Similarly, the kind of investments we are doing in oral liquids has brought down our oral liquids, although oral liquid is a seasonal business. So [Foreign language] in quarter three, it spikes up, and hence we have to keep a headroom. Hence the overall utilization got slow. While we can look at an average level, we have to really think through what is the seasonality and what is the formulation type before we say blended level [Foreign language]. [Foreign language], most of our capacity, as you could see, is for oral solids, which with high changeovers and client needs, [Foreign language] currently [Foreign language] 30%, 35% to 40% [Foreign language], depending on what quarter we play. [Foreign language] fully [Foreign language] 38% [Foreign language]. this what we are saying is, given in oral solids, we can move up to 50%, 55%. If we stick here, don't do further CapEx, over the next two, three years, we can do it. [Foreign language] it takes almost two years to bring up, get the WHO GMP invalidated. In adding CapEx, if we see a business is growing, it's always a wiser decision to plan in advance for at least 24 months. Hence, [Foreign language] base denominator [Foreign language], but [Foreign language] volumes constantly increase [Foreign language]. Okay. Secondly, on the domestic formulation business, on an overall IPM level, we are seeing restricted growth at around 8%, 9%. How should we look at our business as domestic formulations and what growth can we expect from this business? [Foreign language]. So this is a business which we are targeting if we really see through. [Foreign language] price hike [Foreign language]. Obviously, right, so we are focusing on building, branded play wherein we have a prescription-driven, play. Right. So, this is a business where we are targeting a double-digit top-line growth, which is, which will be higher than the overall Indian pharma market. Okay. Lastly, sir, you mentioned about your API losses, which are coming down. Sorry to interrupt. Sorry to interrupt, Sorry to interrupt, sir. Could you please? Okay. I'll get back to you. Thank you so much. Next question is from the line of Dheeresh Pathak from WhiteOak. Please go ahead. Yeah. Sir, thank you for the opportunity again. Sir, [Foreign language], European client [Foreign language] that, contract that we have, if you can just explain, [Foreign language] account [Foreign language], because I don't have that much clarity. So cash flow [Foreign language], and how will it run through the P&L, and what sort of, you know, cash margins are we expecting to make here? [Foreign language] like Sandeep Jain was explaining [Foreign language]. We'll have to take the plant approval, we'll have to take the product approvals, we'll have to put in some CapEx in the plant now. All this investment will continue to happen, which will not be charged off because there is no commensurate revenue, which is coming in, right? While the cash flow has come in, that is, cash which has come into the books of the company. Now, when starting, let's say, let's take the way the contract is structured, on first April, we will probably be starting off the billing. For the whole year, we will probably, whatever revenue will be there, there will be a part which will get adjusted against the payment which has come. And there will be a part which will be adjusted against the expenses that we have made, right? The accounting will only start happening when the revenue will start getting recognized, on this contract. That is how the accounting will work. Okay. So how much cash has already come in, sir? The way we, when we mentioned, we got EUR 100 million as part payment for the contract. EUR 100 million? Euro. Where does it show up in the, it should have put it on the liability side on the balance sheet, right? Where does it show up? No, not on the 31st. No. So it came on ninth of April, right? [Foreign language]. Okay. This is a subsequent event. [Foreign language] net surplus [Foreign language] code numner 566 [Foreign language]. Cash or cash equivalent. [Foreign language] balance sheet [Foreign language] reconcile [Foreign language] knock [Foreign language]. Understood. Understood. Sir, [Foreign language] what kind of margins that we expect to make here? Like in the domestic CDMO, we make a certain set of margins. There is certain working capital requirement, right? What, how the economics different here in this business? See, see, [Foreign language] high margins [Foreign language] grab [Foreign language], it was the very first business, [Foreign language] around 20 countries [Foreign language] entry [Foreign language] investment in terms of getting approvals and [Foreign language] party [Foreign language] reimburse [Foreign language] margins [Foreign language] focus [Foreign language] it is somewhere around 15% margins [Foreign language] net [Foreign language]. Although we are expecting [Foreign language] European business में we will be able to grab more margins. Okay. [Foreign language], sir. Thank you. Thank you. A reminder to all participants, you may press star and one to ask questions. Next question is from the line of Naman Bhansali from Nine Rivers Capital. Please go ahead. Hi, sir. Thank you for the opportunity again. I was just following up on the dossier side for our export business. For effort, 25 years, around 70 dossiers, which used to be much higher over the last three years, around 130-140 over the last couple of years. Now, does this impact, has any impact on the growth going forward in terms of newer dossier approvals reducing this year significantly? [Foreign language]. So, so let's [Foreign language] history [Foreign language]. Naman, this is, largely, on account of years of R&D and dossier filing that happens through, right? So, we think of a dossier, we go develop it, file the regulatory approval. For example, it differs by country to country. Some countries give approvals in six months, others can take as long as three years, right? This is an outcome event that we have received 70. As I mentioned, we are also focusing on fewer goal markets. So the number of countries where we filed dossiers have also reduced [Foreign language] we are now, largely targeting where which markets we can go deeper. This certainly has no impact on the growth. Neither we are seeing we are slowing down on the exports. We are constantly investing in our R&Ds, and developing high-quality products specific to the markets which are of focus to us. Got it. Got it. Secondly, on the management side a bit, this year I think we have received a resignation of the CDMO CEO personnel, as well as last year, I think the domestic formulation CEO resigned. Where are we looking at the hirings from, these two perspectives? See, this is [Foreign language] attrition [Foreign language] normal process [Foreign language] because of his personal reason he wanted to, go. [Foreign language] of course we will, we are in a process of hiring a few key people, [Foreign language] right people [Foreign language], search [Foreign language], business [Foreign language] business [Foreign language] professionally manage [Foreign language], through professionals manage [Foreign language], best in class of the industry [Foreign language] identify [Foreign language]. Got it, sir. Thank you. Thank you. Next question is from the line of Gautam Gosar from Monarch AIF. Please go ahead. Hi sir. Thank you for the follow-up. Sir, my question is on the API business. Sir, what levels should we see the API business breaking even, like can you quantify a number of these levels it can break even, and what growth are we expecting? Earlier I think we were expecting a much higher growth. Are we seeing any slowdown in this business now? I'll rephrase, paraphrase what we said earlier. Essentially, the top-line growth is what we are targeting at 10%, 15% growth, but that is not the key focus. The key focus is how do we reduce losses and move to a path of profitability, right? Last year we did over INR 40 crore of EBITDA losses, which we think this year will be in the range somewhere around INR 25-odd crore. This will largely be driven from how the external market plays in terms of the cephalosporin prices. While the endeavor is to increase our share of general products as well, this is how it will plan out. FY 2026, if I say, we'll still be in losses, but the losses will be significantly curtailed down. FY 2027 is a year which we think we might be breakeven or single digits of EBITDA losses. What revenue can we breakeven? Exactly to, I'll rephrase. Revenue [Foreign language] is, is cephalosporin has come down. So agar [Foreign language] meaning [Foreign language] on the capacity utilizations, we are still decently capacity utilized, almost one-third capacity utilized [Foreign language]. We can do 2x, 2.5x from the current levels of our CapEx, which has gone into. To a point, [Foreign language] breakeven [Foreign language], this is, we currently do roughly INR 200-odd crore. I think once we do almost 2x the size of the current revenues, we'll be better off in terms of a profit-making business. Okay. Last Last question on trade generics. How much working capital is blocked over there? Can you quantify the inventory write-off taken in this quarter? You know, we have given a broad guidance on this, as I said, that this is something that we as a part of our strategy are looking. If we really look at what is the sort of working capital, this is not much overall in our business. If we look at the total trade generic business, we have, say, close to INR 45 crore, INR 46 crore on debtors. We have INR 18 crore, which is on the inventory, and INR 35 crore on basically creditors. There is not much on the working capital. We have made a decent provision, and I do not think there will be any large hits going forward. Okay. Thank you, Naman. Thank you. Ladies and gentlemen, that was the last question of the day. I now hand the conference over to management for closing comments. Thank you everyone for attending Akums Q4 earning call. If you have any remaining questions, you can reach out to the investor relation team. Thank you and have a good day. Namaste. Namaste. Thank you. On behalf of Ambit Capital Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.