Ladies and gentlemen, good day and welcome to Glenmark Life Sciences Limited Q2 FY 2022 results conference call. 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. At that time, participants can enter star and one if they wish to ask a question. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Soumi Rao, General Manager, Corporate Communications. Thank you, and over to you. Thank you, Stanford. Good morning, everyone. Thank you for joining us early this morning. We welcome you all to the Q2 FY 2022 earnings call of Glenmark Life Sciences Limited. Today, we have with us Dr. Yasir Rawjee, our MD and CEO, and Mr. Bhavesh Pujara, our CFO. As we begin the earnings call, here is a summary of our results. For the second quarter of FY 2022, we registered revenue from operations of INR 5,617.6 million, recording a 7.9% YOY growth. EBITDA for the quarter was at INR 1,694.3 million, growing at 33.5% YOY. EBITDA margin for the quarter was at 30.2%. Profit after tax was at INR 1,152 million, registering a growth of 59% against the corresponding quarter of the previous financial year. For the first half of the financial year, the revenues were at INR 10,866.6 million, growing at 18.4% YOY. EBITDA margin for the first half stood at 30.7%. PAT for this period was INR 2,161.1 million, growing at 40.8% YOY. Coming to our business performance, revenue from generic API segment during the quarter increased by 3.9% YOY and by 18.2% in H1 FY 2022. The quarter continued to witness robust growth momentum in LATAM, North America, and Japan regions. Our CDMO revenues rebounded during the quarter and registered a YOY growth of 85.1% in Q2 FY 2022 and 25.2% in H1 FY 2022. Our regulated markets accounted for 70% of net sales in H1 FY 2022, growing at 30.1% YOY. Amongst other business highlights, we filed 5 DMF CPAs across major markets during the quarter, and as on 30 September 2021, our cumulative filings stood at 412. Our capital expenditure during H1 FY 2022 was at INR 467.1 million. The R&D expenditure was 2.5% of the revenues of the first half of FY 2022. On the complex API front, the first drug product filing with our API happened during the quarter. We have three complex ion compounds in our development pipeline. We also expanded our oncology portfolio in Q2 with inclusion of three anti-cancer drugs. Now we have a basket of seven products in the oncology space. We have also declared an interim dividend of INR 10.5 per share. Now I would quickly read the disclaimer. Some of the information in the document, especially information with respect to our plans and strategies, may contain certain forward-looking statements that involve risks and uncertainties. These statements are based on current expectations, forecasts and assumptions that are subject to risks and uncertainties, which could cause actual outcomes and results to differ materially from these statements, depending upon economic conditions, government policies and other incidental factors. Such statements should not be regarded by recipients as a substitute for the exercise of their own judgment. The company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Our actual results may differ materially from those expressed in or implied by these forward-looking statements. With that, I invite Dr. Yasir Rawjee to say a few words before we open the floor for the Q&A session. Thank you. Soumi, thank you very much, and good morning to everyone. I hope, you know, we are coming to the end of this pandemic, you know, at least in India, things are looking very good, but we still need to stay safe, so hopefully everyone is doing that. Coming to this quarter on our business in Glenmark Life Sciences. You've seen the results. Both our levers have fired pretty well. The generic business has done well. The CDMO business has also grown quite nicely. We basically had to deal with a few headwinds, and that's been all over the industry in terms of energy prices, in terms of raw material prices, as well as supplies of raw materials. Of course, there are some freight challenges as well. We've had a set of challenges and, you know, with all this going on, we've still kept a very sharp focus on efficiency, cost management, and as a result of that, our EBITDA margins are still very healthy, you know, at 30.2%. This is something that I think we take a lot of pride in. Our team has done a fantastic job, and I think we're gonna continue this going forward. Just to give you a sense in terms of, you know, our execution priorities, again, I'll sort of break it up into short term, long term and midterm. As far as short term goes, we want to continue to make sure that our customers are serviced, regardless of what happens in the external environment. You know, this is a key priority in the short term. As far as the midterm goes, again, our R&D focus needs to be laser sharp, in terms of our cost improvement projects as well as our filings on the new APIs, and this is something that is happening. In terms of long term, we have two big projects coming on, and those are also going extremely well. The Dahej project, like we had promised, is going to come up in quarter four of this year. In terms of the number of modules, we probably will have two modules this year and then another two modules in Q1 of next year. This should give us a huge benefit in terms of capacity enhancement and, you know, help give us a runway of at least a year and a half to execute on, you know, the growing business. In addition, we got the Solapur land allocated in our name. You know, this is 40 acres sitting in an industrial development zone in Solapur in Maharashtra, and this is going to be our greenfield site. Work has already started, but of course, you know, the early part of the infrastructure is getting started now. But the heavy lifting in terms of the plant and so on will probably begin in December, if not latest in January of next year. That also is very well on track. Again, you know, we have this site as an additional site for a variety of reasons. One is for just to sustain the growth of the generic business, along with, you know, a platform for the CDMO business and some backward integration that we are also very seriously evaluating at this point. This does mean that, you know, our CapEx spend is going to be a little higher, right? With the kind of cash we are generating, in the next few years, I mean, you know, this is something that we would be able to do very comfortably. I think I will stop there, right, and we'll open it up for questions. Thank you very much, sir. Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may please press star then one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star then two. Participants are requested to use handsets while asking a question. Anyone who wishes to ask questions, please press star then one. The first question is from the line of Ritwik Mukherjee, an investor. Please go ahead. Yes, sir. Hi, sir. How are you all doing, sir? It's been a Very good. Thank you. Yes, sir. Sir, there's like one question that I want to ask. Okay, sir. That is, Glenmark Life Sciences working towards development of cancer medicine APIs or anything else sort of like that? Yeah. We have seven molecules, Ritwik. Okay, sir. Seven molecules in the pipeline and three, I didn't mention, but in the Dahej expansion, we also have an oncology plant that is coming up, and that would start functioning in March of next year. So end of quarter four. We have three cancer products that we are going to validate commercially in that plant, you know, in the April to June time frame, with one customer already ready for, you know, all these molecules. I mean, not one per molecule. Okay. Okay, sir. We've got four more, right, in the pipeline that we are developing that will come in later in next year. Okay, sir. That's all for next one. Thank you. Thank you. Participants, to ask a question, please press star then one. The next question is from the line of Deepak Gupta from Reliance Nippon Life Insurance. Please go ahead. Hi. Good morning. Thank you for taking my question. If you could share some perspective on parent concentration in terms of what is Glenmark, what is the parent's contribution to the total top line, for the quarter and for six months? Yeah. Shyam, for the quarter it was about 40%. 30%. 30, 40. 40. 40%. For six months also would be similar? Slightly, yeah, about that same level. For the quarter one was 41. Sure. If you could share, you know, what is the contribution of the COVID portfolio or, you know, API supply for COVID drugs? How much would that be contributing for the quarter and for six months? In the current quarter it will be low single digits%. The first quarter it was about 12%. Got it. You know, if you could give us an update of your two facilities in Dahej and Ankleshwar, any U.S. FDA inspection happening, or are you expecting any FDA inspection to take place in the near-term future? The last inspection in Ankleshwar happened in July 2019, okay? That was a VAI. Dahej happened in November 2018. Right this month, we complete three years, right, in Dahej. That's three years in Dahej and about, let's say, two years and two and a half years in Ankleshwar. Yes, we could expect, you know, an inspection anytime, you know, in the next few months. Sure. I hear that. The last question from my end is, you know, what is the steady-state EBITDA margin is the company targeting, given the fact that, margins have been a bit volatile, last two quarter have been steady, but, you know, previous quarter have been a bit higher. What kind of steady-state margins can we target, from the medium- to long-term basis? Thank you. Given the kind of depth in our portfolio plus the sort of less commoditized portfolio, I believe that in spite of these headwinds that we are facing, we could sort of hover around 30%-31%. Sure. I hear that. Just sorry, one another last question from my end is what is the sourcing from China that you do for raw materials currently? Yeah. It's around 40% that we do. Of course, I must say that our dependence is not 40%. Our dependence is well below 10%. It's just that we've got these very steady relationships with our Chinese suppliers. You know, they've been around. They are in our files and so on, so you know, they continue to give us the value that we need. We continue that relationship, and as a result, it's 40%. Sure. Okay. Thank you so much. All the best. Thank you. Thank you. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Hi, good morning, and thank you for taking my question. Just the first one in your opening remarks, I think you called out quite a lot of headwinds in terms of input costs and raw material costs and stuff, including utility costs. We saw that gross margins have improved sequentially. Just if you could help us understand, what has driven that? Shyam, it's a result of mix. Gross margins are, I mean, of course, there is an impact of input costs and, largely coming from solvents. This quarter, we've had a lot more on the CDMO side, and a lot less on the COVID drugs, on the favipiravir side. As a result, the margins have been better. Of course, had we not had the challenges on the input side and the energy costs, right, we would have done even better. Got it. When you give the 30%-31% margin guidance, how should we look at gross margins? Do you think the CDMO, whatever the uptick that we have seen, is sustainable? Okay. Yeah, I believe it's sustainable, right? With respect to the interplay between the gross margin and the EBITDA, I'll let Bhavesh take that. Yeah. Shyam, you know, on the expense front, our expense base, whatever you see is quite normal now. With the gross margins of 50-50, ranging between 50%-52%, and then, with whatever management we are continuing to do on the expense side, I think we'll be, you know, hitting 30-31% on the EBITDA margins. Okay. Thanks. Helpful, Bhavesh. My second question is just on the industry and how we are positioned on the generic API. If you look at the quarter two for the entire pack, that has been weak. We have seen actually, like up to 10% YOY decline. Even QOQ has been like a mid-single digit decline for most of your peers. Is our portfolio different? You actually called out favipiravir to be a small contributor. I'm just trying to understand how are we bucking the trend in terms of API? Shyam, this is something we've been sort of highlighting, and it's the nature of the portfolio essentially, right? I mean, we have stayed away from a commoditized portfolio. As a result, you know, we've been able to sort of do better when it comes to the cost improvement projects, which a lot of them have happened in these last few months, right? And that's been one big driver. Plus the headwinds, you know, in terms of input costs are a relatively smaller percentage of, you know, the overall product cost. As a result of that, you know, a lesser commoditized molecule. I mean, a combination of that has resulted in, you know, us being able to still manage, you know, with the, you know, the growth as well as the, you know, the margins. Coming to, I think you picked that up already, but our quarter-over-quarter growth has also been there, you know, around 7%, right? Of course, there was a base effect of last, you know, last year's quarter two because of, favi was very big. As a result of that, you know, we've been in the sort of single digit here, right? Without, if we don't consider favi, we would be around, what, 15%, Bhavesh? Yeah. Yeah, 15%, if we take away the favi, right? Growth has been pretty solid, I mean, I would say. Got it. Last question, Dr. Yasir Rawjee team is on, you know, capital allocation. Like you said, again, you're generating quite a lot of cash. I noticed that your R&D has stepped up. Just trying to understand what are the priorities in terms of capital allocation. You highlighted a little bit of CapEx, but just want to understand how we should think about this. Yeah. CapEx in the next couple of years is going to be around INR 360 crore-INR 370 crore. This year itself, we will be spending around INR 150 crore. Next year it's because of Solapur greenfield site coming up, we'd be closer to around INR 210 crore-INR 220 crore. You know, this is most of this, of course, is going towards the capacity build-up, but we are also you know, enhancing our R&D capabilities as well. You know, with a lot of sort of newer technologies on flow chemistry and so on to be able to you know, drive that technology piece as well. Last question here, Yasir. Your dividend policy, we have announced a dividend, so just trying to understand how we should think about that. Decent dividend payout has always been part of our equation, right? We think, you know, we should be able to, you know, do the same in future years also. Bhavesh, is there like 25%-30%, any number that, you know, board is, looks at? Yeah, I think that, sounds like a decent, you know, range that we would be targeting. We would be aspiring to target. Thank you and all the best. Thank you. Thank you, Shyam. Thank you. The next question is from the line of Nitin Agarwal from DAM Capital. Please go ahead. Hi, thanks for taking my question. Yasir, you know, the last six odd months, in fact, six to nine months, the industry, generic industry in general has had significant price compression, so pricing, you know, and as a supplier to the formulation companies, what has your experience been in terms of the pressure that has come back to you, on pricing? Nitin, price pressure is there. It's something that has always been there. I think, you know, as a supplier, this is something we deal with it on a very regular basis. Yes, I think you're probably referring to the U.S. market, right? Yes. In particular. We have had discussions with customers. Now, fortunately, like I was telling Shyam earlier that, look, we've been able to execute quite well on many of our CIP molecules. This we've been able to pass on to the customers, right? Of course, there are some molecules which are still about 6-9 months away in terms of the approval process and so on. There we haven't been able to sort of pass that on to the customer, but we've given them that heads-up that look, it's a matter of another 6-9 months, and we will be able to sustain that pressure for them going forward on those molecules as well. I think overall, you know, this is usually the sort of game plan, and we work very closely with our customers to ensure that they continue to sustain their market share and as a result of which our business continues. That's how we've been sort of working. In your experience over the last six odd months, you know, what has been your time and performance in terms of getting newer clients on board for the existing products? Okay. Nitin, you've seen our LATAM and Japan growth. I mean, we haven't reported it separately, but there's been very significant growth in LATAM and Japan, and that's where we've added a lot of, you know, business, right? I mean, huge increase in our business in both LATAM and Japan. We've added customers there. We've added new projects to existing customers as well. That's going very well. Okay. Again, if I just take it forward, so when I look through the next 2-3 years from a driver perspective, the drivers of business for us, I mean, there are 2-3 things there. Obviously, new product launches are a key component of our growth. On the existing portfolio, new customer additions along with you know, growth in the existing customers. I mean, in terms of ranking, how would you put these three sort of drivers, which is gonna in terms of the salience of these drivers, you know, for our growth going forward? Okay. Nitin, I mean, to be very specific in terms of the order and so on is going to be difficult. I mean, our job, I think, as a business is to drive on everything, right? Geography, we are giving a lot of focus, right? New customers in existing geographies also, we are giving a lot of focus and additional projects with existing customers also continues. All this put together plus the CDMO driver is a big one, right? All these four put together I think is where, you know, the base will also grow. The new launches and, you know, the CDMO piece will also grow. Now, I can't say what will grow more, but if I had to make a guess, I would say that the new launches are going to contribute more, followed by the new customer in the new markets, right? CDMO would be sort of along with that. You know. Because CDMO right now is a smaller base, so even though we are doing well there, in terms of its overall contribution, it would take a while before, you know, that builds up to a significant sort of number. Got it. If I can take one last one on the CDMO. Over the last few quarters, you know, what's your big experience in terms of the kind of conversations you've been having with customers? What's been changing in these conversations, sir? Basically, I had mentioned that we've got three commercial projects, fully commercial, which are also growing, and we've got a fourth one that is going to get commercial very soon. We are expecting quarter four, but it may spill over into Q1, right? This is the one that I said that the customer had, you know, wanted to file in about 57 markets. Okay. The conversation basically is around, you know, what more can we do to sort of help them, right? And the challenge for them is the doctor-patient kind of interaction. When that, you know, improves, you know, with the COVID. Now, you've heard that again, Germany yesterday had like 28,000 cases, right? And the mortality is also pretty significant. The U.S. is around 75,000 cases, right? Again, that sort of free-flowing doctor-patient interaction is not, you know, happening. While, you know, our customers are pretty bullish, right, that it's changing, they're also being a little careful with us, saying, "Guys, you know, this is gonna pick up, but not as fast as, you know, we anticipate. Okay. Thank you. Thank you, Nitin. Thank you. The next question is from the line of Aejas Lakhani from UNIFI Capital. Please go ahead. Yeah. Thanks for the opportunity. Doctor and team, congratulations on an outstanding quarter. I think, given how peers are reporting, you've executed phenomenally. So kudos to you and your team on that. Doctor, two questions. My first one being, again, I wanna probe a little more on this quarter because of the macroeconomic environment also. Has there been any raw materials that you had which had a low base effect, which have also played a part in this quarter's performance? Or is it just been what you mentioned on the call earlier in terms of your abilities to manage costs, all of that. Aejas, I'm not sure. Are you saying in a positive way or a negative way? No, no. I'm asking you in a very much positive way only, doctor. I'm just trying to still decipher a little more about how we are able to extract such, you know, such margins in this environment. I'm trying to really learn that has there been any lower cost raw material source which was available for us for a longer duration, which has helped us at both the gross margin level and to maintain the EBITDA? Or it's been a steady quarter, business as usual, and it's been the efforts of the team on the OpEx side which has helped us to maintain these margins? Aejas, I think we explained the dynamics around the gross margins here, right? Yeah. We did face challenges in terms of input material price rises. However, our business mix has been much better this quarter. We have lower contribution of COVID products, and we have higher contribution of CDMO. Got it. Okay. Just a follow-up on that, you mentioned 40% is raw materials from China, right? Is that correct? Because you said- Yeah. -10% also then. No, no. What I was saying is that the dependence is not 40%. Okay. You see, there's this narrative, right, that has built up over the last year and a half or so that, oh, for some reason, you know, we are not gonna be able to get materials at all from China. So there's always been that effort from our side to de-risk, okay. Sure not depend completely. While, you know, we've done that and done it very effectively in the last almost two and half, three years, right, where we've got now distributed suppliers, you know, from China as well as from India and some even from Europe, right, we still continue to work with our Chinese suppliers, like I said, and we buy, you know, what we are buying is at around 40%. But if for whatever reason, you know, the Chinese supply shuts down or whatever happens, right, we're not gonna be stuck, you know, because we have a distributed supply chain, and that's less than 10%. I mean, the dependence on China there is less than 10%. Got it. Okay. Okay. Yeah. Doctor, one last thing is, Solapur as a site, could you speak a little bit about the infrastructure? Because this is the first time I've heard a pharma company expanding into Solapur. Could you speak a little more about Solapur? Sure. Aejas, we already have a small facility in Solapur. This is our Mohol site, okay? The thing is that we had to. You know, we wanted to do a fairly rapid execution. You know, when we were looking for a place, there is an MIDC in Solapur, so where a lot of industries operate, okay, already. The infrastructure there is, you know, in line with any other, you know, industrial development in the industrial area. We didn't find that to be, you know. We found that to be at par with pretty much everything else. Because we have, you know, a couple of facilities in the neighborhood, so the Mohol site and the Kurkumbh site are there, in terms of being able to execute rapidly, is something that we found advantageous, right, going forward. That's why we are pretty confident even now that in about 15-18 months, we'll have a functioning facility in Solapur. It's a good place. I mean, the other thing about it is that the land is pretty cheap compared to other places. I mean, you know, other industrial areas. Noted. Thanks, Rawjee. All the best. Thank you. Thank you. The next question is from the line of Vikas Sharda from NTAsset. Please go ahead. Yeah, hi, good morning. A couple of questions. One is that, how is the order book or pipeline looking for, CDMO business for the second half of the year? Secondly, when we look at the interim dividend declared for first half, I mean, should one take it more like as a one-off or recurring in terms of, say, payout or absolute amount going forward? Okay. Vikas, I'll let Bhavesh take the dividend question. I'll come back to the CDMO question. Vikas, I didn't get your question. Can you repeat the second part? Yes, I mean, the interim dividend, when we look at it's INR 10.5 per share. Yeah. Should one look at it as a base in terms of, say, payout or absolute amount going forward, or it's more like one-off with the IPO? Yeah, we would aspire to maintain, you know, a decent payout ratio. I think this year, whatever 25%-30% it will work out to, that. See, our cash flow pattern, if you see, we are generating close to INR 450- INR 500 crore cash flow pre-CapEx, right? Our CapEx plan, after we account for it, we have good profitability and good cash flow generation. Combination of these two will guide our dividend payouts going forward. Agree. We just said for the first half it works out to be over 50%. Yes, this is interim dividend, and this is for the year, right? We are looking at it more as an annual from an annual perspective. Oh, okay. The timing of dividend is a function of how we look at our cash flow, right, in terms of phasing. We have our investment plans which are going to get activated going forward. That's how the timing part has been addressed. All right. It's more like an annual dividend, not just for the first half. We will see how it goes, but yeah, probably that would be the case. Understood. Yeah. Coming to the CDMO piece, Vikas I expect this momentum to continue, at least this level of momentum to continue, you know, for the next two quarters as well, because there are three projects driving it, three commercial opportunities driving it. Of course, the fourth one, like I said, is likely to hit us in Q4 but may spill over into Q1. It all depends on the approvals coming through, right, for the customer. They file in a lot of markets. Understood. One more question on favi, Bhavesh. Could you talk about the revenue growth for this quarter, excluding it from the base and the top line and this quarter. Secondly, I mean, as the contribution of favi has come down, still the sales to Glenmark Pharmaceuticals is 40% for the quarter. I mean, I would have expected it to come down, so why is that so? First part, Vikas, so favi was a high base, okay, particularly in the quarter two of last year. Adjust- Mm-hmm. If you adjust for that, in both the quarters, we have growth between 13%-15% in the top line. 13%-15%? Yeah. Okay. Secondly, about this 40% sales to Glenmark Pharma, despite this favi coming down. Yeah. Vikas, favi was there this quarter. It didn't go away completely. We did around INR 30 crore worth of favi, which is around 5%. Okay? Okay. Without that, it will be around 35%, right? 35. This is something that historically has been the same. I mean, because we've got quite a few APIs with Glenmark Pharma, right? 30%-35% is something that we see on a very regular basis. Understood. Perfect. Thank you. Sure. Thank you. Thank you. A reminder to the participants, to ask a question, please press star then one. The next question is from the line of Jiva, an individual investor. Please go ahead. Hello. Yeah, hi. Yeah. Hi, sir. What is the current capacity utilization, sir, for plants? Jiva, we are operating at close to 90%. In fact, it's even higher than 90%, you know, depending, I mean, depending on our mix, but we are at 90, you know, plus some, you know, between 90% and 95% is what we are operating. Okay. Till the upcoming expansion plan, you don't have any capacity constraints. You can obviously meet the commitments, right? Yeah. I'm hoping that with Dahej expansion, coming online, two modules coming in Q4, that will help us out a lot. Plus then another two modules will come in Q1 of next year. Okay. That's going to add an extra 240 kiloliters of capacity, and that's gonna be quite significant. It will give us a runway of at least another year and a half before we need fresh capacity. Okay. For the next leg of growth, capacity utilization is much lower, right? Till now, till then, we can't expect significant revenue growth. Jiva, can you repeat your question here, please? Till the capacity expansion comes in, we don't see any significant revenue growth, right, sir? Still, because we already have a 90% capacity in place here. No, but that's mixed driven, no? Yeah. I mean, we always have a choice, right, to offload some lesser margin products. That's something that we do. Plus we've got two smaller factories, the Kurkumbh and Mohol plants, where we've got some ability to sort of move some of the ROW products. We kind of work that way. Okay. Thank you. I mean, we're not going to get hampered in terms of capacity in the next two quarters, but it's running pretty full, is what I'm saying. Okay. Thank you. That's all from me, sir. Thank you. Thank you. The next question is from the line of Aditya, an individual investor. Please go ahead. Hi, sir. Congratulations on a good quarter. I have a couple of questions. One is, when would you expect the FY 2025 capacities that you're building out closer to, you know, 90% of full utilization? And what would be the mix between the CDMO and API at that time? See, right now, the way how the CDMO and generic API is growing, it's pretty much growing, you know, at a similar rate. CDMO is sort of picking up a little faster, right? With respect to capacity, in FY 2025, we'll have Solapur running. Solapur, you know, we've got, I mean, 40 acres, and we can do a lot in Solapur. We'll do it in a calibrated fashion so that, you know, it tracks, you know, what we are seeing in terms of the, you know, the demand. That's how we'll be building it out. Having said that, just to let you know, I mean, even both are approved sites, right? The FDA approved FDA-inspected sites, that is Dahej and Ankleshwar. Both these sites also have, you know, we have an ability to expand there as well. Just to give you a sense, in Ankleshwar alone, we've got around 20 acres of land that we still have, and we can expand. Okay? You know, if necessary, we would also trigger that option because it's clear, right? I mean, it's an inspected site, and it would take a very minor approval to bring on that minor variation filing to bring that capacity online in one of the inspected sites. Got it, sir. In that case, are there any, you know, number of molecules or size of molecules that you have in the pipeline expecting to launch in the next two or three years? Oh, yeah. I mean, every year we've got, like, three, four molecules. We have two very big launches coming up, right, in quarter three and then quarter four. Launches are something that's very regular, and these are big launches, right? We've got multiple customers here. Understood. Thank you, sir. Yeah. Sure. Thank you. Participants, to ask a question, please press star then one. The next question is from the line of Manoharan, a retail investor. Please go ahead. Hi. Good morning, everyone. Thanks for the opportunity, sir. This is regarding the raw materials, sir. You said actually, like, in the presentation, right, I see there is some backward integration is going to happen in the Ankleshwar facility, right? How that will change the landscape of our raw materials? You said 40% are getting it from China. Manu, sorry to interrupt you. You need to move your mic little away from how you are speaking. Your voice is not clear. Better, sir? No, just move away a little bit, Manu. A little softer because. Okay. Okay. Yeah. Better? Thank you. Yeah. Please go ahead. Sir, my question is around the raw material. With the backward integration that we're planning, will that change the landscape of the raw material that we are importing from China? What will be the impact and what will be the landscape there, sir? It's a very good question. I mean, see, obviously, right, we can't. I mean, the situation that the way how we look at it is that it's not going to completely normalize. Okay? Which means that we have to sort of control our own destiny, right? This plan that we made to get into Ankleshwar for some backward integration is very well in line with that. Our plan, right, is to sort of protect the top 20 molecules, which would drive about 80% or even more of our business in the next 2-3 years, and look at all backward integration options for these top 20 molecules. We started that work, and right now we've got three molecules ready to sort of get into the plant. Like I was telling Jiva earlier, the issue is that we are, you know, from a capacity perspective, we can't take our backward integration molecules immediately into the plant. Considering that this is only an intermediate capacity, it will come online in about seven months' time. We are literally going to be groundbreaking this month. By June, I would have 250 kiloliters of capacity built out, right? Which would help us to backward integrate about 3-4 of our key molecules. This would have a huge impact on our margin profile, but more importantly on supply reliability. I mean, supply reliability would be a bigger thing where we would, you know, it would help us. We are getting into BI in a big way because it's becoming very uncertain. I mean, while you know, we hope the situation will normalize, right? We can't sort of you know, live with that hope alone, you know. Okay. That was helpful, sir. My second question, sir. In one of the TV channels, I saw you actually, you were saying that raw material price was, like, increased like anything, and we are talking to clients to mitigate the risk, right? We are trying to increase the price. Any problems there? Any updates that you can share with us, sir? Yeah, sure. Some clients have agreed, Manu, right? Because very clearly, right, they see they are aware of the macroeconomic situation, and we've been able to convince them that you know they should pass on some of that, you know, they should take on some of that you know cost increase on their side as well. For most customers, what we have been able to do is we've been able to bring in a cost improved process, right, and get it qualified at the right time through the customer. That has helped in a big way to be able to sustain you know these challenges on the raw material side. It's a mix of both. Some customers have agreed to take on you know the price increases, right? For somewhere, you know, they had challenges sustaining their market share, right, we have been able to sort of help them with the next generation process. It's only in a few cases where neither was the customer able to agree to increase prices, nor were we able to sort of, you know, help there. Those processes are going to become commercial in the next six to nine months, like I explained. Hopefully we'll be able to cross that bridge also pretty soon. Sounds great, sir. My last question, sir. Out of this 40%, raw material input that you're doing from China, right, you said 30, you are not completely dependent on China. Are they locally sourced or is it like again it has to be imported from somewhere else? No, these are local. We've got a sort of distributed thing between China and local. The 30%? Yes. Okay. I'm saying if you're not taking it from China, this 30%, we will be taking it from India itself or outside India? Okay. Most of it is from India, but some we have even got from Europe and a couple actually even from South America. Okay. Sounds good. Thanks for the data, sir. Thank you. Thanks a lot. Best of luck, sir. Thank you. Thank you. The next question is from the line of Aditya, an individual investor. Please go ahead. Hi, sir. Thanks again for the question. Forgive my candor, more candid nature of this question, but with the high ROCEs, growth trajectories and the high margins that you guys have, the valuations don't seem to make sense. From speaking to a few people, what it seems like is the fear they have, perhaps it's unfounded, of possible corporate governance issues. Any steps you guys are taking to allay these fears in the minds of investors? Could you repeat, Aditya? I'm not sure I picked that up. I did hear, but I'm not sure I got the sort of drift. Right. Could you please repeat the question? you know, with the kind of business that you guys have created, you know, with the ROCEs and the margins and the growth that they're looking at today, the valuations don't really make sense. you know, speaking to a couple of guys in the investment community, one of the possible concerns they have would be about possible corporate governance issues. You know, even though that might be unfounded, any steps or any views that you guys have in terms of how you can help us allay these fears? Aditya, I'm not aware of any corporate governance issues. Okay? As far as the market goes, right, it's a good time to buy, I would say. Right. I'll let Bhavesh answer in more detail. Aditya, I think we have best corporate governance practices at GLS. We have independent board and all our governance in the area of corporate governance, in the area of compliance, in the area of business conduct. I think we follow the best practices. Sure. All right. Thank you, sir. Thank you. Thank you. Participants who would like to ask questions, please press star, then one. Anyone who wishes to ask questions, please press star, then one. As there are no questions from the participants, on behalf of Alivus Life Sciences Limited, we conclude this conference call. We thank you all for joining us, and you may now disconnect your lines.