Good morning, ladies and gentlemen. Welcome to the Q3 FY 2022 earnings conference call of Glenmark Life Sciences. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the 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, ma'am. Good morning, everyone. Thank you for joining us early this morning. We welcome you all to the Q3 FY 2022 earnings call of Glenmark Life Sciences Limited. Today we have with us Dr. Yasir Rawjee, our MD & CEO, and Mr. Bhavesh Pujara, our CFO. As we begin the earnings call, here is a summary of our results. For the third quarter of FY 2022, we registered revenue from operations of INR 5,225 million, recording a YOY growth of 4.5%. EBITDA for the quarter was at INR 1,496 million, a degrowth of 3.6% YOY. EBITDA margin for the quarter was at 28.6%. Profit after tax was at INR 1,037.1 million, registering a growth of 11.1% against the corresponding quarter of the previous financial year. For the first nine months of the financial year, the revenues were at INR 16,091.6 million, growing at 13.5% YOY. EBITDA margin for the first nine months stood at 30%. PAT for this period was INR 3,198.3 million, growing at 29.5% YOY. Coming to our business performance, revenues from generic API segment during the quarter increased by 0.9% YOY on high base of COVID products in the third quarter of last year. For the nine months of FY 2022, the revenues from operations in generic API segment grew at 12%. Our CDMO revenues registered a YOY growth of 45.1% in Q3 FY 2022 and 30.9% for nine months of FY 2022. Our regulated markets accounted for 71.8% of net sales for nine months of FY 2022, growing at 28.3% YOY. During the quarter, revenues from regulated markets witnessed healthy growth, whereas revenues from the emerging markets were lower due to higher base of COVID product sales last year. Our capital expenditure during Q3 FY 2022 was at INR 319.8 million. For nine months of FY 2022, we incurred a CapEx of INR 786.8 million. Expansion work at our Dahej and Ankleshwar facilities is ongoing, and we plan to commence construction work at our newly acquired site at Solapur in the beginning of the next financial year. The R&D expenditure for the quarter was 2.9% of revenues from operations, and for nine months of FY 2022 it was at 2.7%. Among other business highlights, we filed 6 DMFs/ CEPs across major markets during the quarter. As on 31 December 2021, cumulative filings stood at 418. Today, we have four complex iron compounds in our development pipeline. We also have seven products in the oncology space. Now I would like to quickly read the disclaimer. Some of the information in the document, especially information with respect to our plans, 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 their exercise of their own judgment. The company undertakes no obligation to update or revise any forward-looking statements, 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, thanks very much. Good morning to everyone. Thank you for getting on the call. We are in the second month of the new year, but I'd like to wish all of you a happy new year. Hopefully, you know, COVID will go away soon, right? We'll all be leading more normal lives. Just to give you a sense in terms of how this quarter has gone. Obviously, from a number perspective, the growth has been, you know, in single digits, which is something that I mean, you know, it's probably not expected from Glenmark Life Sciences, but then the macro environment has been such, you know. We've done very well on the CDMO. CDMO's picked up very nicely and it's a sort of trend we are hoping that will continue. Of course, on the generic side of the business, we had a base effect of favipiravir last year. If we take that away then, I mean, we've still. Generic business has grown at a good 10% or so. Just to give you a sense in terms of how the company is focused, like I do every time, I mean, we want to look at the short-term priorities, the midterm priorities and the long-term priorities. As long as we execute on all of these, the company will continue to drive along a very very safe and a good path. Okay, coming to the short-term priorities, I think we need to continue to work with our customers closely and make sure that we service them. They have, I think, bigger challenges than we have. Being a good supplier to our customers is certainly something that will, you know, go a long way. Coming to the midterm priorities, again, you know, our execution on filings on CIP projects is something that is going extremely well and that continues to pay off, you know, in terms of our customer confidence and their ability to retain their market share. On the project side, which is a longer-term priority, I would say that we kind of readjusted. Dahej, which is our brownfield and the big expansion, right now is going well. Owing to some COVID-related slowdowns, Dahej has slowed down by a couple of months. You know, as a result, what we were expecting to come online, you know, in Q4 will probably happen in Q1. There will be a sort of cascading, you know, impact of that as well on the final completion of the project. The other thing to note here is while Solapur is something that will continue to be a focus for the long term, we have made a bit of an adjustment in terms of accelerating the Ankleshwar project. Okay. I had alluded to this last time in terms of backward integration that we are taking aggressively in Ankleshwar. That's... I believe that can pay us a lot more in terms of, you know, in the near term. We've sort of, you know, changed the focus a little bit in terms of the investment, just to get the Ankleshwar projects going much sooner. Being an inspected site already. I mean, that gives us an advantage in terms of also not only on the backward integration, but also on helping us on the capacity, both on the intermediates as well as on the finished API. These are the things that, you know, I'm sure will come up in more detail in the questions. Without much ado, we'll open the floor for questions. Sunny. Thank you. Ladies and gentlemen, we will now begin with the question-and-answer session. Anyone wishing to ask a question may please press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants, I request that you use handsets while asking your questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, if you wish to ask a question, you may please press star and one. The first question is from the line of Kunal, an investor. Please go ahead. Yeah. Hello. Thank you, sir, for this opportunity. I have one question regarding the CDMO project. Our fourth project, which is supposed to be commercialized in the Q4, that has been delayed to the Q3 FY 2023. Any specific reason for this delay, sir? Yeah. Kunal, there is a reason. We said, this fourth project is going to be filed, is being filed in a whole bunch of markets. Now, this obviously, you know, most of, I mean, COVID with the Omicron and stuff, right, has come back, and there has been a slowdown at the customer end in terms of these filings. If you recall, last time we had sort of sensed that Q4 may go to Q1, but given the fact that, you know, there have been COVID-related issues on the customer end, the filings have been delayed, and as a result, we don't expect, you know, commercialization to happen in Q4 or even in Q1. Okay. Understood. Next question is, just could I understand the status of these, your new iron compounds and the oncology products? So I'm trying to understand the status of these products. Is it still in development phase or the R&D is already completed and we'll be commercializing it soon? Okay. Let me take iron first. We've got four projects, right? One has already been filed by the customer. You know the process, right? There'll be queries, and then once queries are answered, then you know, we can more or less predict when it will be commercial. That process has begun already with the customer's filing. That's one. The three other remaining are at various stages in the development pipeline. We plan to validate the second iron project sometime in April-May timeframe. The other two will be towards the end of this financial. One will at least be towards the end of this financial. The fourth one will probably come next year in terms of validating and then supplying to the customer. On onco, we have seven projects. Three of them are basically waiting for the hedge project to be completed, which is planned in April. Once that comes on, we will, you know, again, be able to supply exhibit quantities to our customers for these three APIs. The remaining four are in R&D at various stages in development. Okay. Understood. Thank you. The last one from sir, my side. Sir, our, the EBITDA margin, if you've seen the last couple of quarters, it's little bit volatile. Like, the quarter four last year it was around 36%, and this present quarter it is around 28.6%. In future you want to give any guidance and on will it be stabilized at some range? I think we'll hold, right? See this whole reason for this dip in this quarter, right, has been largely on account of higher cost and higher input costs, okay? Whether they be related to materials or even related to energy costs. Okay. I'll give you an idea. Gas prices that we were buying at INR 35 a unit just four, five months ago are now INR 62. Okay. Mm-hmm. It's nearly double. I mean, you know, the jump in gas prices. I mean, with these kind of, you know, challenges on both, you know, on operational cost as well as on material costs, the EBITDA has dipped. The good news is that these things will ease off, so I'm not that worried that, you know, we'll continue to be there or, you know, go south or whatever. I mean, you know, let's see how it goes. I think we've reached a point where price increases are not gonna happen further. We're at 28.5%, right? I would say that's the sign of kind of, you know, it'll be the bottom, I mean, you know, for us. Maybe we won't be below that, right? Bhavesh, you wanna add something? No, I think that covers it. Yeah. Okay. Thank you. Just one point. This last conference call, you mentioned that you would be expecting some Kunal, do you mind joining back the queue? Sure. Thank you. Thank you. Thanks. Okay. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in this conference, we request you to limit your questions to two per participant only. The next question is from the line of Vikas Sharda from NTAsset. Please go ahead. Yes. Hi. Two questions. One is that, how is the outlook looking for Q4 in terms of, say, margins or the growth outlook on the generic side? And, is favipiravir still playing a role in your revenues currently or in the base, say, Q4 of last year? That's one. And number two, I mean, when you look at, say, I mean the Q4 of last year, it had very high margins of, say, 36%+ EBITDA margins. So I mean, is there some kind of seasonality in your margins or product wise, something that you can highlight? Sure. Because favipiravir is not going to be there, it wasn't there this quarter. It's not gonna be there, you know, in Q4 as well, right? Coming to the margin outlook last year and then how it's gonna play out this year. See, last year we literally had a bolus, okay, of CDMO plus some high margin generic APIs. I mean, that's not a trick that is likely to repeat in Q4. Okay. I think it was 36% last year, last quarter four. Yeah. Right? I can assure you that, you know, it won't go there. Given the fact that, you know, like I just addressed in the last question on the margins would be under a little bit of pressure because while, you know, on the cost side, especially on solvents, things are improving a little bit. We still have a way to go before they normalize to, you know, levels that were there about six to nine months ago, more like a year ago, frankly. It's I think margins will track similarly to what we've seen this quarter. Hopefully we'll improve it a little bit because we do have some cost improvement, you know, initiatives that, you know, we'll get approvals for in this quarter. Got it. How is it likely to pan out, say, in terms of revenue growth? Because, again, the base years are different. Or should one look at QOQ basis? I'm not sure I got the question. What should be the revenue outlook? The revenue outlook should be fine. I mean, I don't think, you know, on the revenue side we have any challenge. It's more the margin. Okay. 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 on the outlook for API in general. Dr. Yasir, from an industry perspective, what are you seeing? We have seen mixed trends for generic API this quarter, you know, in terms of inventory drawdowns by customers. Can you just give us what's happening there? What's also happening to API prices for you in terms of your output? And how is, you know, GLS navigating that space? Which are some of the areas which are growing faster versus slower? Shyam, look, on the outlook for the industry, I think we are pretty much in the same situation as most companies, okay, but there are some differences. The kind of pricing pressures are, I would say, pretty much across the board, right? That we are facing. On the demand side, again, I think because our Q3 was Q4 for most of our customers, right? There has been some destocking impact. Demand did soften a little bit for us. You know, maybe it was a little more for others, but end of the day, we are in a very similar situation to our peers. As far as prices go, see, we are able to pass on some of the cost increases to some customers, okay? This is especially where the customers have got a relatively stable footprint in the front end, and they understand, okay. Some customers, though, are not able to sort of take that price increase, and so we've not been aggressively pushing price increases there. But again, the good news also is that many of our cost improvement projects, CIP in short, right, have yielded good benefit because they came through and customers were happy with, you know, the prices, and at the same time, you know, our margins, you know, were holding steady. So there's a mixed bag over there, Shyam, okay, in terms of how we are managing the prices. It can't be a sort of, you know, one approach for everyone and for every API. Your last question was on how we managing in the short and the long term, right? No, no, in terms of therapy areas, what is doing better, what is doing lower? Shyam, you would have seen right in the investor presentation that cardiovascular remains our, you know, top, you know, therapy area. Although there was some pressure on sartans, okay, like, you know, from the supply side, telmisartan was a bit of a challenge. You may have heard about those accidents that happened in China, okay. As a result of which, you know, there was a shortage, you know, in a key input called benzimidazole. That did have an impact. Overall, cardiovascular for us has done well. Okay, the other good news is that CNS has also picked up quite nicely. On diabetes, the base is small, so we've had a bit of a shrinkage in the antidiabetics. Given the fact that we are going to have some, you know, product introductions in the next two quarters on a couple of diabetic APIs, we expect to bounce back on the diabetic segment as well. These four segments that we are sort of working in are delivering pretty nicely, and our pipeline also follows that as well. It's working well. I mean, you know, there are other. In the newer launches, we've got some new, you know, GI drug, we've got a GI drug and so on. That this is also gonna help in a big way. Overall, I think, therapy areas are doing pretty well, and they'll continue to track the way we've sort of built it out. Yeah. Dr. Yasir Rawjee, just clarifying. When I back calculate CVS, it's the cardiovascular declined this quarter 13%. Is that the sartan issue you're talking about? Yeah, Shyam. I would say, you know, both the sartans that we work on, olmesartan and telmisartan. Olmesartan was a little bit demand, there were demand issues there, mainly driven by the U.S. market, okay? Telmisartan has been more a result of a supply side issue where we were not able to get enough raw materials. In certain cases, we took a call on not taking because, you know, the margins would have gone into negative territory, so we figured we won't do it. Right. Those two have had an impact on the cardiovascular. Got it. Second question is again, just broader. You have had success on- Sorry to interrupt, Mr. Shyam Srinivasan. Yeah. Sir, may we request that you return to the question queue? Sure. There are participants waiting for their turn. Thank you. No problem. Thank you. The next question is from the line of Anish Munka from JST Investments. Please go ahead. Thank you. Sir, we are effectively increasing our capacity by 90% by the end of FY 2023. However, given the R&D work that we have done in the last few years at the higher complexity of the latest molecules that we are planning to tap, can we have a revenue growth which is much higher than 90% once the capacity reaches optimum utilization? Also, it would be helpful if you can talk about our R&D pipeline and the upcoming launches. Thank you. Okay. Anish, in the API business, right, let's remember one thing, right? I mean, as soon as we need to build capacity, and it takes time, right? As soon as the capacity comes online, that's not going to translate into you know a business. Because what happens is we can't sort of bring capacity online very quickly. It takes about a year and a half to sort of get things you know in order. It's basically the build, okay, that takes that time. On R&D, see, our focus is threefold, okay? While we have the higher end APIs, like in iron complexes, we also have the regular focus on the regular sort of generic APIs, which is also continuing at a pretty fast clip. The third piece in R&D is the CIP, the cost improvement projects. When I look at all of them together, in terms of what is going to deliver first, it's the CIP projects that keep kicking in terms of giving us a better position on the base business. The second piece is the regular developments that we are doing for the newer APIs. Again, that has a sort of a monetization or a launch timeline, from 2023 all the way to 2027, 2028. This is a sort of five-year or a six-year window that we track with these APIs. Then the third one, which is the, you know, more complex APIs, again, will depend on its timeline in terms of, you know, when the patents expire. This gives you a sense in terms of how R&D is tracking along with the commercialization timeline. Does that help you, Anish? Yes, sir. Just to reiterate the first part. With the capacity that is coming online, can we generate higher revenues from the same capacity once those complex molecules start coming in by FY 2023 or FY 2027? Anish, you know, if you refer to our investor presentation, a large part of the capacity addition by 2023 is towards the backward integration. That is towards supply chain security for some of the KSMs that we currently outsource, and also in the process drive some margin improvement. That's not a capacity addition towards the top-line improvement. That's a capacity addition towards supply chain security and margin improvement or margin protection. Yeah, fair enough, sir. My second question is, a lot of our customers are talking about the increased pricing pressure they are seeing in the U.S. market, which will continue to be in the foreseeable future. How is it that we are able to consistently pass on the increased raw material pressures in this tough environment and maintain our gross margins? Anish, it's not that we are able to pass on everywhere. Okay. Only certain APIs with certain customers we are able to do it because one is we have those, you know, fairly stable, healthy relationships with them, and they understand that we are under pressure. Margin has taken a hit. It's not that. The helpful thing this quarter was CDMO did much better, right? CDMO margins are higher. I think it was the mix of some price increases, CDMO business that has helped us to keep the margins going. Plus, there was no FARI. Normally FARI plays a drag on the margin, and so that has helped us. Okay. All these factors put together. Pressure is there, okay, on margins. I don't want to. I mean, like I said, we are not different from the industry. The industry is facing similar challenges across. We just happen to be a little fortunate in terms of our mix in terms of portfolio that is giving us an advantage. You know, these three issues that I mentioned have helped us in the quarter. Yeah, makes sense. I'll rejoin the queue. Thank you for the elaborate answers, Yasir, sir. Thank you. Thank you. A reminder to the participants, anyone wishing to ask a question, may please press star and one. The next question is from the line of Nitin Agarwal from DAM Capital. Please go ahead. Hi. Yasir, on the business, given the dynamics which have been there in the macro environment this, you know, last couple of quarters, are you seeing any changes in the landscape, you know, any changes in competitive positioning of players or the way customers are perceiving the suppliers? Are you seeing any changes in the environment? Yeah. Nitin, for sure, right? I think that customers are looking for stable supply, right? Because while they have challenges on the, you know, pricing side and on the front end, right, it's good to have stable suppliers backing them up. You know, this view that we've always taken in GLS, right, is that let's not disturb the customers too much, okay? Because they have like I said earlier, they have bigger challenges than us. This is helping us. Okay. Customers, you know, the reliance that customers have on Glenmark Life Sciences for API, I would say has probably gone up a few notches, and that will certainly help us to sustain those relationships in the longer term, right? Because we've not been aggressive at all with our customers. It's been a very sort of mutual understanding, dialogue-based kind of, you know, work that we are doing with them. I believe that, you know, this will help us, you know, even with newer projects that we are seeding with the same customers, and these are big customers. You know, we work with many of the big customers in the generic side. You know, just the fact that we are getting so many new projects also in terms of seeding and so on, you know, that confidence is definitely coming into play. Right. If I were to take that forward, any meaningful changes that you've seen on the customer side also, given the pressure that you said the customers are facing? Is there a consolidation happening at that end in terms of market share? Are you getting higher volumes for specific similar products from the larger customers? Yeah. See, one good thing again for us, right, is our customers, our top customers, in fact, most of the customers have not lost market share. The only place where we had a challenge was on the Olmesartan in the U.S. Okay. That's the only place where we've seen that the customer has not been able to keep their footing in the market. It's partly because of competition, but partly also because, you know, a strategic decision to sort of get out of the sartans. It's not again, our inability to support them. It's more that, you know, it's a conscious call because sartans have had various issues, you know. Mm-hmm. Right, in the last two, three years, they've taken a conscious call and stepped back saying, "Okay, you know what? We don't want to do this. Right. Lastly, you know, from the way you're looking at the industry, the way dynamics is playing on various cost fronts, is it fair to say that Q3 of maybe H2 2022 pretty much should mark the bottom of this pressure cycle on margins and revenue growth for the industry? I am very hopeful because the big contributor, right, to this whole cost thing has been solvents. The other big contributor has been energy. Okay. Now, energy plays out not only on the operating side, but even on the more basic raw material side. If you look at things like caustic. Okay. Caustic used to be like INR 22 and is now INR 70. Okay? I mean, caustic is used in large quantities, right? The same thing goes for phosphorus, for iodine, for so many basic materials, right, that we don't directly use, but then our suppliers use. On the solvent side, there is some stability now, and things are beginning to go down. Except for a couple of solvents here and there, things are on the downward trend. On the energy side also, hopefully, you know, with the European situation and all that, you know, easing off, right, and the winters going away, you know, I believe that we'll be in a better position with respect to energy prices. Your sort of prognosis on H2 being, you know, bottoming out is I think the right thing, and I'm very hopeful, we are very hopeful that that's the way it's going to play out. Perfect. Thank you and best of luck. Thank you. Thank you. A reminder to the participants, anyone wishing to ask a question, may please press star and one. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Hi, thank you for taking my follow-up. Just, I was trying to ask this question earlier as well. Favipiravir we have had success. If we were to look at the oral, COVID antiviral space, there are newer molecules now that are there. Both Merck and Pfizer probably will be looking for additional API supply. Just your thoughts on that space. Have you developed these two key molecules, and is there something else that you're working on the antivirals? Okay. Shyam, on molnupiravir, right, we had developed the process and it was ready. Then there are six players already in the market. Many of them are backward integrated, right? The demand has not been there at all. While we have the API, we are not doing it commercially, right? On Paxlovid, the Pfizer molecule or other. It's not one single molecule, it's a combo, right, with ritonavir. On that, we have you know, applied to MPP for a voluntary license. We haven't heard yet from MPP. There was a query which came, which we answered about three weeks ago. We expect that a decision on Paxlovid will come soon from MPP. This is Medicines Patent Pool. Okay. Then we take it from there. Got it. Very helpful. Just in terms of just looking at CapEx, and you actually talked about all the projects that are there. Are we comfortable in terms of our internal accruals and the path forward, there is no requirement for debt. I just want to understand capital structure, capital allocation priorities for you. Okay. See, the bulk of the capital will go for capacity. Okay? I mentioned in the opening remarks that Solapur, while it's going to be a big site for us and is going to sort of help us for the future, right? If we slow down Solapur a little bit, it's not gonna hurt us big time. In fact, it's not gonna impact us at all. Given the pace of backward integration that we need to accelerate, we have taken a more aggressive position in terms of the build-up at Ankleshwar. Initially we had planned 250 kiloliters, but we can take it to 400 kiloliters in Ankleshwar. Okay? That's what we are doing now. Okay. There's just been a bit of adjustment for us to, you know, take care of priorities that are more pressing now, especially on the BI side. The hedge is on track. Only thing is the hedge has experienced some COVID-related slowdown because at the peak, we had 500 people working in our hedge facility on the project, and we could not sustain that kind of manpower for the project when the COVID happened. As a result of that, the hedge has slowed down a little bit, maybe by one quarter, you know, one or two quarters, one quarter for the first phase and then, you know, we'll see how the second phase goes, right, on that. Capital allocation, mainly for CapEx. We are doing something on R&D, okay, in order to bring in some newer technologies. I mentioned flow chemistry earlier, right? There are a few more in terms of having more advanced systems for solvent recovery, okay, membrane systems especially. There we might make some investment on the, you know, improvement in, solvent, you know, for solvent recovery. We are working on that as well. That's not gonna be very big. Apart from that, Bhavesh, nothing else, right, on the capital allocation. That's it, Shyam. I mean, nothing more than that. It's capacity and the quality of capacity and what that capacity is going to be used for is where we are gonna be focusing on. Yeah. Dr. Yasir, I was extending the question. All led by internal accruals, right? You don't need external capital, external debt. Yeah. I mean, our cash position is pretty strong. I mean, you know. Perfect. Last data point, Glenmark, how much is the parent contribution this quarter? Thank you. It's 41%. Yeah. Dr. Yasir, this should gradually continue going down, right, fiscal 2023, 2024. Is that how you can look at it? Yeah, Shyam, I think you used the right word, and that's gradually, right? See, there is no artificial effort to reduce the GPL contribution simply because it's a good business, right? You know, we continue to sort of have. I mean, this quarter, you know, even without having favipiravir, we had this because there are four new launches. Right, that we are working on overall, plus three new product reintroductions. That, you know, these kind of things will happen. We expect it to go down, right, gradually. Right, FY 2023 should see some. Then, you know, in the next three, four years, we'll sort of it'll taper off more. Now, not because Pharma is just reducing their stake, but it's because the other growth is going to be more than what Glenmark Pharma's requirement is going to be. That's how it's going to naturally kind of taper off. Got it. Thank you and all the best. Thank you. Thank you. Thank you. We'll move on to the next question. That is from the line of Ajit Kumar, an investor. Please go ahead. Ajit Kumar, your line is unmuted. Please go ahead. Sorry, my question is already answered, so I'm good. Thank you. A reminder to the participants, anyone wishing to ask a question, may please press star and one. The next question is from the line of Saurabh B, an investor. Please go ahead. Hi, good morning. Hi, morning. Hi. Morning, sir. Sir, I just had one question. On a long-term sustainable basis in next four, five years, where are the margins where we see? Because I understand because of the raw material and solvent pricing pressure, the margin has come down to around 28%. Two years back also it was in a similar range. Can we see the EBITDA margin around 25%-27% on long-term sustainable basis? Saurabh, can you repeat your question? I'm not sure I understood. Okay. I'm asking about the EBITDA margins. Yeah. In a medium term, in next 3-5 years on a sustainable basis, can it be in the range of 25%-27%? Yeah, yeah, comfortably. Okay. Because I saw the drop this quarter. I understand it was because of the raw material and solvent pressure. In the long run it will be maintained, you're saying around 27%-28%, or it can be higher as well? Yeah. Because see, the thing is that one is we don't expect the market to go up and then not come down, right? Yes. I mean, this whole thing on solvents, you know, plus raw materials driven by higher energy prices, right, and some shortages has created this situation. It's not a new normal. I mean, I hope not, right? I mean, whatever indications we are getting basically says that things will come back. Now, will they come back to similar levels? We don't know. Even if they come down, right, to a better level, so our margins will be impacted positively there. We are not sitting and waiting, right, for that to happen. Like I said, we are investing on better solvent recovery systems, both on the R&D side as well as in the plants, right, to have better technology as well as more capacity in solvent recovery. So that we are not gonna sit and we'll reduce our overall solvent dependence to a lesser level, okay, than what it is today. We'll take that step. You know, we'll mitigate, that's one. The other thing is this whole backward integration that I just talked about earlier, right, in terms of reallocating CapEx more towards the backward integration that is happening at Ankleshwar. We've already got four projects there in the pipeline that we have geared up to backward integrate and then our target is 2025 API is backward integrated in the next 2-3 years. Once we backward integrate, then the margin profile should improve because we'll be basically capturing more value by going back. Okay. Okay, understood, sir. Thank you. Just one more last question. Sir, when can we see some revenue generation of the oncology and iron products? One product will be commercial as soon as the customer gets approval. They have filed. Okay. Oncology will take a little bit of time because we are basically doing the validation batches for exhibit quantities for three of the projects for our customers, and that will happen in April when our onco block in Dahej is, you know, ready. Commercially, we'll see, you know. Okay. Okay, got it, sir. Just if I can squeeze in one more. Sorry to interrupt, Mr. Saurabh B. Okay. I'll get back in the queue. Thank you. Thank you. The next question is on the line of Pratik Chaudhary from Equirus Securities. Please go ahead. Sir, on the solvent side, could you dwell a little more in detail as to whether it was just a one quarter phenomenon or was it continuing for maybe last several quarters? Like, was it caused by the current Chinese shutdown due to Olympics and the New Year, or are there, you know, other reasons and what's the trajectory going to be? On solvents, it's not this quarter, Pratik. We have had this problem now for the last three quarters. The only difference is that there was an inventory effect, so we had a better cost inventory in the earlier quarters, right? That impact was a bit muted in the first quarter and partly in the second quarter. This quarter, we've got fully hit, okay, on the solvents. Solvents is not completely China-driven, okay? Solvents is more of a universal kind of phenomenon. There are suppliers out of Europe, there are suppliers out of China, and there are suppliers out of India also. You know, given the kind. For some solvents, there is a dependence on crude also. Mm-hmm. Okay? Right. The more sort of hydrocarbon based solvents like hexane, heptane, to some extent toluene, has got a hydrocarbon related thing. Methanol is more gas related. Okay, I mentioned to you, right, that methanol prices in an earlier discussion or maybe today, that methanol prices last year used to be around INR 22. Mm-hmm. Per liter. It went up to INR 45, okay? Double. Now it has come back to around INR 37, INR 36, INR 37. It's kind of staying there, okay? Mm-hmm. While things go up very fast, right? When it comes down, it doesn't come down at the same rate, okay? Mm-hmm. This is the dynamic around solvents, right, you know. There are some solvents like THF, tetrahydrofuran. Mm-hmm. Okay. It used to be about $1.8, right? Mm-hmm. You know, when in better days, about a year back. It has been climbing, and now it's almost like $7, between $7 and $8. Mm-hmm. This has gone up 3.5 times, okay. Mm-hmm. Yeah. Compared to what it used to be. That has not come down, by the way. THF. Mm-hmm. Now, THF is driven more by supply shortages, partly out of China and partly out of Europe, okay? Mm-hmm. Again, you know, I mean, it makes a lot of sense for us to reduce our dependence on THF, which we are doing, and also recover and recycle much more, so that the overall dependence on these kind of solvents that go a little, you know, go really out of whack, right, is taken care of. What would be solvents as a percentage of the total raw material cost? A rough estimate. Roughly about 11%-12%, Pratik, in our overall cost. Okay. Thanks a lot. In your overall raw material cost, you mean? Yeah. Okay. Thank you. Thank you. The next question is on the line of Abhishek Nagpal, an investor. Please go ahead. Yeah, thanks. Good morning, everyone. My question is on the customer data. Do you have the details in terms of the number of customers that have been added? Sorry to interrupt, Mr. Nagpal. Sir, we are not able to hear you clearly. Your audio is sounding very muffled. Is it okay now? Slightly better, sir. Please proceed. My question is on the number of customers. Do you have the availability of data in terms of how many additions in terms of numbers, the customers have been added this quarter and how many customers that have not given the orders this quarter. I don't know the answer, but I can try and give you an idea in terms of how big the base is. We have about 65-70 markets commercially. Easily we would be having about 500-600 customers. Not every customer sort of places orders every quarter. To give you a more sort of qualitative answer, but hopefully, you know, to give a sense, we are adding a lot more geographies, which are bringing in new customers, plus in existing geographies that we are pretty strong, we are adding new customers. Our LATAM market, Japan, has been doing exceedingly well on account of the addition of new customers and new projects with existing customers. Hopefully, you know, Abhishek, I can sort of, but I don't have the exact number. Yeah. Got it. You know. Any budgeted numbers you have in terms of, you know, towards the market plan, marketing plans, for adding up the new customers or to add up the new geographies? Yeah. See, again, here again, it is a kind of, I would say, a three-pronged approach, right? New geographies, which will bring in new customers, obviously, right? Because these are all pharma companies. Okay. Then, additional projects within the existing customer base. Okay. Then, the CDMO expansion. Okay. These are the kind of, you know, on the customer side, the levers. Then the products that we are developing are for all markets, right? We are not developing for particular markets. In very rare cases, you know, we develop for, you know, a limited set of markets. Typically we are developing across markets. Again, we can offer more to everyone, to all our customers. Thank you. The next question is from the line of Surya, an investor. Please go ahead. Surya. Hello. Thanks for giving me this opportunity. Can you explain about CDMO expansion for long term? When can it reach a scale? Hello? Hello, ma'am. May I talk to you? Ladies and gentlemen, the line for the management has got disconnected. Please stay connected while we reconnect the management. Ladies and gentlemen, thank you for patiently holding. We now have the line for the management reconnected. Over to you, sir. Mr. Surya, may we request you to repeat your question for the benefit of the management team? Hello. Thank you, sir. Thanks for the opportunity. Can you explain about our CDMO expansion for long term, when we reach up to 20-25% of the revenue scale? See, 20-25% is a long shot, okay? Because I can tell you that by FY 2026, we probably will be more like 15% of overall. Generic is also growing, right? Now, the good thing in CDMO is that many times you do get a lot of upside. Okay. Today we are at three plus one, three commercial, one in the pipeline. Given the way things are going, I'm pretty confident that by FY 2026 we'll end up having, you know, seven, eight, maybe even 10 projects. Okay. That should give us about 15% market, you know, revenue, you know, contribution from CDMO. That's what we are taking. Okay, but there could be upside. 25% is a little bit, you know, it's on the higher side than what we have factored. My second question is, what about our share price? That depends on you guys. I don't control that, right? Company is doing well, right? I mean, you're seeing consistent performance, very strong fundamentals in terms of, you know, customers, products, profitability. So I can't comment on what happens to the share price. That will depend on how people perceive us. My last question, sir, about any U.S. FDA inspection in near term? We were inspected, our Ankleshwar site was inspected in July 2019. Okay, this year in July we'll be completing three years. Our and that was a VAI, huh? Then we had our Dahej site inspected in November 2018. That we have crossed three years. We could expect you know an inspection. We are you know obviously that's on our radar, right? Sir, my last and final question, sir. When can we increase our revenue, means double our revenue within two, three years? Is it possible? I don't know. I mean, we are already, you know, Yeah, I don't think, you know, Mr. Surya, I think I will skip that, right. About any new updates on new launches, sir, commercial? New launches, yeah, I told you, right? We're having four launches this year and three product introductions, reintroductions. This is in the major markets. In the, you know, smaller markets, we've got a lot of new launches that are coming up, maybe almost 14 or 15 new launches in total. Thank you. Ladies and gentlemen, that was the last question. On behalf of Glenmark Life Sciences, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.