Ladies and gentlemen, good morning and welcome to the Alivus Life Sciences Limited Q1 FY 2027 conference call. As a reminder, all participant lines will remain 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 touch-tone telephone. Please note that this conference is being recorded. I will now hand the conference over to Ms. Soumi Rao, Senior General Manager of Alivus Life Sciences Limited, for opening remarks. Thank you, and over to you. Good morning, everyone. I welcome you all to the earnings call of Alivus Life Sciences Limited for the quarter ended June 30th, 2026. From Alivus Life Sciences Limited, we have with us Dr. Yasir Rawjee, our MD and CEO, and Mr. Tushar Mistry, our CFO. Our board has approved the results for the quarter ended June 30th, 2026. We have released it to the stock exchanges and updated it on the website. Please note that the recording and transcript of this call will be available on the website of the company. I'd like to draw your attention to the fact that some of the information shared as part of this call, 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 which could cause actual results to differ materially from these statements, depending upon the economic conditions, government policies and other incidental factors. Such statements should not be regarded by recipients as a substitute of their own judgment. The company undertakes no obligation to update or revise any forward-looking statement. Our actual results may differ materially from those expressed in or implied by these forward-looking statements. I invite Dr. Yasir Rawjee to say a few words. Thank you, and over to you, doctor. Thank you, Soumi. Good morning, everyone, and welcome to our Q1 FY 2027 earnings call. We are pleased to begin the first quarter on a positive note marked by healthy revenue growth, improving profitability and continuing momentum across our markets. We reported revenues of INR 640 crore, which is a 6.4% year-on-year growth during the quarter. Our performance this quarter was particularly encouraging as it delivered despite a significant decline in the GPL business, reflecting the growing strength of our broader portfolio and the resilience of our business model. Our non-GPL business delivered strong growth of 26.5% year-on-year, driven by successful new product launches and strong demand across all geographies. The momentum we have built in recent quarters continues to strengthen with recently launched products continuing to gain scale across markets. This has provided greater diversification to our revenue base and created a platform for sustainable growth going forward, giving us confidence in the sustainability of this momentum. GPL has been muted as a result of inventory rationalization, and if you recall, Q4 was pretty strong and we saw a dip in Q1, a decline of 52.6% year-on-year. However, the strong execution across the non-GPL portfolio helped us to offset this impact, underscoring the benefits of a broader and increasingly diversified growth engine. While growth in the GPL business is expected to remain flattish in FY 2027, the business has been historically weighted towards the second half of the year, and we expect a similar trend to play out this year, resulting in a stronger H2 performance. At the same time, we expect the healthy growth momentum in the non-GPL business to continue, supported by a robust product pipeline, recent launches and sustained demand across all markets. This provides us confidence in our ability to deliver growth despite the near-term weakness in the GPL business. Overall, the underlying strength of the API business remains intact. Geographically, we saw broad-based growth across all markets during the quarter, highlighting the strength of the diversified business. On the profitability front, a favorable product mix and newer launches helped improve gross margins to 60.2%, an increase in 510 basis points year-on-year. Enhanced operational efficiencies and Forex gains also supported 650 basis points YoY improvement in EBITDA margins to 36.6%. These margins reflect the quality of our growth and disciplined execution. Our CDMO business recorded 3.8% YoY growth during the first quarter. Given the inherently lumpy nature of the CDMO business, the performance does vary from quarter- to- quarter. We've seen that before. However, we can expect the segment to gain momentum in the second half of the year, supported by contributions from newly added projects. On the CapEx front, Solapur continues to progress as planned. There's a little bit of a delay, but it's going to be operational in early Q3 of FY 2027. Construction at Taloja, the R&D center, has begun in earnest and it will happen on schedule. The pipeline remains robust with 617 DMF and CEP filings globally as on June 30. Our high-potent API portfolio continues to advance with 29 products in the active grid, representing a total addressable market of $82 billion. Of these, 13 products have been validated, seven are in advanced stages of development, and the remaining nine products are progressing through lab development stages. While we remain watchful of the evolving geopolitical and demand environment, the strength of our business fundamentals gives us confidence in our growth outlook. We are guiding for revenue growth of 10%-12% in FY 2027, with growth skewed towards H2 FY 2027. We also remain confident of sustaining EBITDA margins in the 30%-32% range. With this, I now turn the floor to our CFO, Mr. Tushar Mistry, who will walk you through our financial performance for the quarter in depth. Thank you, Dr. Yasir. Good morning, everyone. Welcome to our Q1 FY 2027 earnings call. I would like to highlight the key performance updates for the quarter ended 30th June 2026. For Q1 FY 2027, revenue from operations stood at INR 640 crores, a growth of 6.4% year-on-year. Gross profit for the quarter was INR 385 crores, up 16.3% year-on-year. Gross margins for the quarter stood at 60.2%, up 510 basis points year-on-year, driven by new launches, product mix and operational efficiency. EBITDA for the quarter was at INR 234 crores, up 29.1% year-on-year. EBITDA margin for the quarter was at 36.6%, up 650 basis points year-on-year. PAT for the quarter stood at INR 160 crores with PAT margins at 25%. Turning to the therapeutic mix, CVS and CNS continued to anchor growth during the quarter, together contributing 58% to the top line. Overall, chronic therapies accounted for 72% of top line in Q1 FY 2027. R&D expenditure for Q1 FY 2027 was INR 24 crores, which was 3.7% of our sales. On the balance sheet and cash flow movement, our CapEx for the quarter stood at INR 85 crores. We expect to incur a CapEx of approximately INR 540 crores in FY 2027. We generated a strong free cash flow of INR 90 crores, leading to cash and cash equivalents, including short-term investments of INR 880 crores as of 30th June 2026. We continue to remain a debt-free company. Overall, we believe the business is well-positioned to deliver steady growth over the coming quarters while maintaining strong profitability, supported by improving demand trends and continued operational discipline. With that, let us open the floor for Q&A. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Ahmed from Unifi Capital. Please go ahead. Yeah, thanks for the opportunity. Dr. Rawjee, congratulations on the great set of numbers, especially for the non-GPL business. My first question is to understand the gross margins a little better. If you look at last three quarters, obviously the gross margins have improved materially. You have spoken about a lot of process improvements, yield improvements, and so on and so forth. If one has to try to understand the delta which has come in, how much is due to the process improvements you have made, and how much is because certain products, new launches have done well in the initial life cycle, and that may sort of normalize as we move ahead. How should we look at it? And the point I'm trying to understand is whether 60% is a more sustainable gross margin or as things move ahead, it may normalize a little bit. The two main reasons are launches and operational efficiency. The margins from launches will not just drop off, the word you used is normalize, right? Because we are already ready with the second-gen process. Okay. We expect, and these sort of launches have not fully fructified, and there are still markets opening up for the new molecules that we recently launched. That growth, along with the margin stability, will continue. We've had a significant improvement on the operational efficiency side, which also is incremental and will continue to deliver. Sure. In that case, if we assume gross margins to be more sustainable, obviously there will be a quarter or two here or there. The EBITDA margin guidance which you have, it implies it is fairly conservative. Yeah. We can guide to a better margin, frankly, even up to 34%. The issue is this war situation, right, and what it is doing to raw material prices. We need to be a little cautious. There is no point giving you a higher guidance and then not delivering. I would much rather, as a company, we have been always conservative. We tell you what we can do, and if there is an upside, there is an upside. Basically, it is the war situation that has made us a little more cautious in giving a higher guidance. Sure. Secondly, on the war situation itself, how do you see raw material prices? Have they corrected meaningfully from the peak for you as a basket? Have you been able to pass on the pricing? Has there been price hikes in your end products and that helps you mitigate part of the raw material hikes? There has been an increase in raw material prices. It's not been very steep. We have managed to pass on a part of it to our customers. We'll have to see how to manage that. There's a steep increase. Customers do understand, and we've had positive feedback from customers that, "Yeah, we know the situation, and we are okay to support." You can't do that across the board. We need to understand that too. Is it fair to assume as the near term, the 60% margin broadly should hold? It's just wait to wait and watch. Like you said, a quarter here, a quarter there, I think we can hold. On the GPL part of the business, this was a steep degrowth. You have alluded to full-year numbers being flat. Does that confidence come from the conversations in terms of what order pipeline, what product pipeline you want to deliver them over the next three quarters? There is a certain resistance among investors at least that part of the business, if that degrows materially, then the entire efforts on the non-GPL business is sort of offsetted. How should one look at it as a whole for the full year? I understand Q1 was inventory estimation. Those things happen. Full year, if we can give a little more color in what gives us confidence to achieve whatever INR 700 crore-INR 750 crore range which you have been delivering for the last three years in the GPL business. That's exactly right. I mean, what you said is that they are an old customer, okay, and a very big customer spread out. There are more than 50 commercial products that we supply them. Q1 is not an indicator of how the year will go. We are pretty confident that in the sort of worst case, it will be a flattish growth. Sure. On the new launches and HPAPI pipeline, I'm assuming there will be gradual progress happening every quarter in terms of where we reach in terms of commercializing those 28, 29 products we have as of now. Is there anything coming by end of this fiscal year, or it is more tilted towards FY 2028, 2029 and beyond? Are there any new launches we can expect to happen in FY 2027 end or so on? Yeah. It starts off in the end of calendar 2027 with the patent expiries. We have a good run for the next four to five years with the pipeline on HPAPI. Okay. End of calendar 2027. That's more like FY 2028. Sure. Of course, API starts off a little earlier, okay, because they have to buy launch quantities. Customers have to prepare for launch. Correct. We could see something. Okay. Our projections are more FY 2028. Sure. That helps. Ahmed, I do apologize to interrupt you. Could you please join back the queue for follow-up questions? Sure. No worries. Thank you. Thank you. Participants who wish to ask a question, please press star and one. We take the next question from the line of Yog Rajani from Omega Portfolio Advisors. Please go ahead. Hi. Thank you. My first question was regarding the margin improvement. Since our GPL business has come down, would it be a fair assumption that the non-GPL business is more margin accretive than the GPL business? Yeah, we can say that. Okay, great. My second question is if you could give us some more clarity into how we are better positioned with regards to the entire global conflict. As I understand, we are very good at solvent recovery compared to, say, a lot of our peers. Does that put us in a significant competitive advantage in the current situation? Net consumption is favorable for us on our processes, but there's still a requirement now, and we have a pretty wide product basket. Even the range of solvents that we use is much, much bigger than we typically would if we had a sort of lesser portfolio. You've seen oil prices, right, the way they are going. Solvents do have an impact. We're trying to get better. Recently, we introduced a membrane-based technology apart from just regular distillation. That is proving to be pretty effective. We might scale that up. Again, we might improve by about 5% - 10% there on recovery. It's not going to be like we can't recover everything. Okay. All right. Thank you. Sure. Thank you. Participants, a reminder. If you wish to ask a question, please press star and one. We take the next question from the line of Kaustav from Paul Asset. Please go ahead. Thank you for the opportunity. You previously highlighted that you're expecting to close two brand new CDMO contracts in early H2 FY 2027. Is this still on track or are there any changes? It's on track. It's on track, right? Yeah. As I understand, the non-GPL business is more margin accretive, right? Will the EBITDA margins blend lower as GPL revenues improve in H2 FY 2027? Yeah. Well, we factor that in. That's the reason why we are giving slightly, I mean, 32% while we are saying, and doctor mentioned, that it can go to 34%. Given the current quarter is 36.6%, if GPL comes in, it can come down to around 34% in a steady state scenario. Okay, understood. Okay, I'll get back in the queue. Thank you. Participants who wish to ask a question, please press star and one. We take the next question from the line of Sucrit D. Patil from Eyesight Fintrade Pvt Ltd. Please go ahead. Good morning to the team. I have two questions. The first question to Mr. Yasir is, beyond the regular outlook, what are the top two to three execution priorities you are focusing on in the next few quarters? Alongside that, what do you see as the biggest risk in client adoption, regulatory shifts, or compliance pressure? How are you preparing to manage them while strengthening Alivus' position in the API and life sciences solutions? That's my first question. I'll ask my second question after this. Thank you. Wow, that's a big question. You talked about compliance pressure and what else, Sucrit? CapEx, regulatory approvals or the diversification, along those lines. Okay. Solapur will be up and running by Diwali. Okay. We are going to trigger an inspection within a year from some major regulatory agency. We've lined up those products. I would say that if we are able to achieve that within a year of getting Solapur up and running, then that's a big milestone that we would have achieved, because then we get a good runway for the next three to four years for servicing the business with Solapur. Okay. That's one big thing. As far as compliance pressure goes, I think we've had a pretty decent track record. Things have been going well. Because we got the FDA, we got a VAI in the Ankleshwar and an NAI in Dahej, a lot of agencies are actually not coming anymore. Okay. This year has been relatively light in terms of the audit scenario from major agencies. Of course, we continue to have customer audits, those are fine. Those are happening. I don't see any major compliance pressure issues. Okay. You also asked about scaling up the business. What is that? Execution priorities. Look, we've got to get the launches right. Okay. Far, so good. If you've seen the last three quarters, launches have been contributing significantly, and I explained to one questioner, I think Ahmed, before that the launch momentum is pretty strong. Patents don't expire at the same time in all markets. As patents are expiring, our newer products are having a significant volume growth. We need to execute and ensure that we service across markets. Thank you. Can I ask my second question? Yeah. Go ahead. Yeah. My second question is to Mr. Mistry. Along the similar lines of forward-looking ones, from a financial point of view, what key risks or challenges do you anticipate in the coming quarters, and what specific measures are being taken to manage margins, cash flow, and balance sheet strength, especially in areas like raw material cost volatility, receivables, or compliance? Obviously, compliance, you have given a guidance, just along that exactly. Thank you. Yeah. Margins, as Doctor mentioned earlier, we are confident of delivering these margins. Doctor has guided to 32% on a conservative basis, if the steady state affairs remain, even the war-like situation does not impact us significantly, we can be touching 34% margin as well. While we are seeing the raw material prices are going up, in fact, it started from solvents now to KSMs. It is moving towards that. Having said that, we are actively monitoring it almost on a daily basis and looking at as to what is the impact on our cost of production. Taking adequate steps to get engaged with customers and see as to how we can pass on some of these to our customers. While this exercise used to be once in a while, now it is being done on a more regular basis so that we don't get caught on the wrong side of the margins. As far as the cash flows are concerned, cash flows are robust. The receivables, we haven't had any defaults on receivables yet. Receivables are coming in a timely manner. We don't see those challenges. Exchange is favoring us today because of the rupee depreciation to a great extent, because we are net exporters. There will be a slight increase on the inventory side is what we are seeing as we keep on building inventory so that we are able to continue to support our customers in a timely manner and at more predictable prices. That's why we would be covering our inventories at prices which are more suitable to us, that is something that will continue to happen over the next few quarters. Overall, while the balance sheet is having cash, it's a good position to be in. Even in these times of uncertainty, we are well-positioned to face these challenges and see through these challenges very effectively. Thank you and best wishes. Thank you. Participants who wish to ask a question, please press star one. We take the next question from the line of Pratik Kothari from Unique PMS. Please go ahead. Yes. Good morning, sir. If you can break this growth down to volume and price, either in Q1 or - Pratik, I do apologize to interrupt you, but your audio is not clear. I trust this is better. Go ahead, Pratik. Yeah. Sir, my question, one, if you can break this growth down in volume and price, either in Q1 or FY 2027. The non-GPL business, you have seen a 26.5% growth. Yes. Compared to Q1 last year to Q1 this year, the exchange has given us an impact of about 7% in that. If we look at a constant currency growth is about 20%. Within that 20%, the volume growth will be about 21%-22%. The price decline is about 1%-2%, is what we have seen. Okay. Sir, this phase II Solapur seems to have been pushed out by another year in our strategic way forward, what we have shown. Any thoughts, comments on why the delay? Even in FY 2027, the capacities that were supposed to come, I think, have been delayed by a quarter or two. Just on our execution and how are we thinking out in terms of building capacity. See, we have been pretty calibrated with respect to bringing on new capacity. Okay. The key is to get Solapur phase I and 1.1 on track. Once the facility is built out and we get audited by FDA or a European agency, then our ability to use Solapur for the reg markets improves significantly. The thought process is that it's a greenfield. We need to have a functioning facility, which we are going to do by Q3 and then a little later in Q4, right? Once it's operational, then it's how much business we can service out of Solapur. The main thing is going to be to bring an agency in quickly for an inspection. Once we get that inspection, then we can really drive business hard from Solapur. We don't want to hurry it up. Our experience on brownfield is that then it's only the manufacturing infrastructure, and that can come up in about eight, nine months' time. We don't want to hurry it up, just have a large, like phase II you said. If we execute phase II quickly, it will get us into a situation where we'll have a lot of under-absorption, and we don't want to do that. Okay. No point, right? We have Dahej, Ankleshwar, which are reg sites, and Mohol. We are comfortably able to manage the business now because even there is a brownfield expansion happening in Ankleshwar as well as in Dahej, which should give us a lot of comfort for this year and even going into next year. Beyond that, we need to get Solapur basically audited. Mm-hmm. Correct. No, sir. Thank you and all the best, sir. Thank you. Thank you. Participants who wish to ask a question, please press star and one. We take the next question from the line of Ahmed from Unifi Capital. Please go ahead. Thanks for the opportunity again. Question on the similar line on the CapEx front. We have pushed out the timelines little bit over last couple of quarters. The question why I'm asking this is, considering we are already operating at probably 80%-90% utilization or higher, then capacity constraints to grow in second half or thereafter FY 2028? Can that be a challenge considering the Ankleshwar and Dahej has been pushed out? If you can give some sense there. Ankleshwar and Dahej are on track. We didn't push out Ankleshwar and Dahej. Solapur's got a bit pushed out. Part of it was also there's been a slowdown with labor and a few other things. Ankleshwar, Dahej will complete on time. Okay, sir. Because you know that 80%+ of the business is a reg market business, right? We can't do that out of Solapur. Our priority on the CapEx has continued to be completion of the expansion of Dahej and Ankleshwar. Dahej is getting 160 KL and Ankleshwar is getting 100 and something, 110 KL. Sure. Is this capacity enough for us to grow double digits for, this year you've had a 10, 12, and hopefully 2028 also double digits? Is this capacity enough to grow at double digits for 2027, 2028? Yeah. -before Solapur gets inspection and stuff? Yeah. See, the thing is Solapur is not going to run empty. In phase I and 1.1, we've already mapped out enough products to come out of Solapur. Initially we'll be loading it with some intermediates, large volume intermediates, for captive consumption. We also have a big backward integration block that is coming up. All that will keep Solapur pretty busy once it gets started. Only thing is, we can only do ROW business out of Solapur to begin with. For about a year, we'll be parking ROW business. Got it. Sure, sir. Thank you so much, and all the best. Thank you. Thank you. Participants who wish to ask a question, please press star and one. We take the next question from the line of Yog Rajani from Omega Portfolio Advisors. Please go ahead. Hi. Thank you for taking my question again. As I see, we've constantly increased our R&D expenditure as a percentage of our revenue, currently being at around 3.7%. Is there a target cap that we plan to reach? Because it's constantly going up. We just would like to understand what our R&D expenses in the future could look like. We should sort of end up at a steady state of around 4%. Okay. Could you give us some more clarity in terms of the R&D spend in terms of the areas it would be going to? Would it be more CDMO driven or more API driven? It's API and that's new API because you've been seeing the pipeline has been growing pretty nicely, right? Yes. There's significant investment in new API. We also put a fair amount of effort on our second generation processes, next generation processes, in order to keep the margins comfortable. Right? That's a big part of the R&D effort. Yeah, there is some CDMO element also, which is a broader effort, where we support the customers with analytical and regulatory support. These are more the specialty CDMO projects where there are 505(b)(2) filings and so on by the customer. Largely though, it's API. We see a strong enough pipeline that we are developing, and it makes a lot of sense for us to make that investment in R&D today, so that the future is secure. Great. As the R&D spend has gone up, it's not affected our PAT margins. In fact, our PAT margins have gone higher. Is that a trend that we see in the future as well, or do we see the PAT margins coming down as a result of this increased expenditure? No. PAT will continue to be good. There's no problem. Okay, great. I just had one more question- It's a pipeline, right? The whole business is driven by a pipeline. Okay. Okay. -as the pipeline builds better, we continue to drive the business growth as well as the margins. Okay, that's great. I had a question about our acquisition strategy, as we have, say, INR 800 crore on our balance sheet, and we have been thinking about an acquisition. Just wanted some more clarity on it. In case facilities are available, just FDA-approved facilities, is that something that we would be interested in, or are we interested in acquiring companies with their own pipelines available? Capacity is not a challenge for the growth at Alivus. If you know, our facilities are pretty top of the line. We would not spend money on facilities. Right. We have enough capacity. As far as pipeline also goes, pipeline is not, again, unless it's a very different pipeline that comes from a very different platform, is where we will go after it. The fact of the matter is that we will be looking and we are looking actively at synergistic opportunities. We believe that for something that adds greater value to what we already have, not only what it has, but bring greater value. We don't want to do a one plus one is equal to two. We'd rather have a one plus one equal to three or four. That's our thought process. We want to expand laterally. We've been talking about plus, I don't know if you have heard it before from us, we are more driven by API plus. Get more out of the existing portfolio as well as the new portfolio. Of course, whatever the platform technology provides, both for API as well as CDMO. All right. Great. Thank you. Thanks. Thank you. Participants who wish to ask a question, please press star and one. We take the next question from the line of Bhawana Israni from Ambit Asset Management. Please go ahead. Hello. Yes. Congratulations, sir, for the good set of results. Just wanted to check on the CDMO side. We are seeing that the Indian CDMO companies are currently in the sweet spot, gaining more traction. From the Alivus perspective, how many new customers we have added in last two, three quarters or the product addition from the existing customers? How has been the inquiries flow and how we are seeing the CDMO business panning out in the next two to three years? This is- CDMO, we have active discussions with almost on about 7 projects right now. It takes time to sort of fructify and like you said, Indian companies are in a sweet spot. We are seeing that quite nicely, especially from the U.S. Our focus remains on life cycle management as well as speciality. Again, in about one to one and a half year, we can get the project going. Regulatory approvals also don't take that much time. How it will look in the next two to three years? Again, it's going to be a better growth because you realize that we are doing this INR 160 crore, INR 170 crore, which is expected to improve towards second half of this year. The two new projects are kicking in pretty well and the older projects are also coming back. With this kind of traction, we are seeing that CDMO will grow faster than the overall business. I can't put a number on it, Bhawana. It all depends on the size and the number of projects that we are able to crack. Sir, as you said, we are working on the seven projects, any new inquiries- No. One sec. I talked about seven new inquiries that we are working on. You got- Okay. The current revenue is coming out of five projects. Okay. Mm-hmm. Okay. Sir, on the margin front, as the CDMO growth accelerate in the second half of FY 2027 or in FY 2028 as the new product commercialize, can we expect that the margin profile of current 33% can increase from here on also or it is going to be a sustainable basic 33%-34% margin? Because generally CDMO is a high margin business. It does add to margins, the overall volume is small. The API business is also doing very well in terms of margin. Yeah. Mm-hmm. Like we explained, most of this margin growth that has come in the last two to three quarters has come driven partly by CDMO. The new API launches have also contributed quite well. We expect that margin improvement will come as a mix between CDMO as well as the new launches. Got it. Yeah, sir. Thank you, sir. This is from my side. Okay. Thank you. Thanks. Thank you. Participants who wish to ask a question, please press star and one. As there are no further questions from the participants, with that, we conclude the question and answer session. On behalf of Alivus Life Sciences Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your.