Ladies and gentlemen, good day and welcome to Aurobindo Pharma's earnings conference call for first quarter of FY 2027. Please note all participants' line will be in listen-only mode, and there will be an opportunity for you to ask questions after management's opening remarks. Should you need any assistance during the conference call, please raise your hand from the Participant tab on the screen. Please note this conference is being recorded. I now hand over the conference to Mr. Varun Mali. Thank you. Over to you, sir. Thank you, Vandit. Good morning, ladies and gentlemen, and welcome to our first quarter FY 2027 earnings call. I'm Varun Mali from the Investor Relations and Corporate Communications team. We hope you have received the Q1 FY 2027 financials and the press release that was sent out yesterday. These are also available on our website, www.aurobindo.com. I would now like to introduce our senior management team who's on the call with us today, represented by Dr. Satakarni Makkapati, CEO, Aurobindo Biosimilars, Vaccines and Peptide Businesses, and Director, Aurobindo Pharma Limited. Mr. Yugandhar Puvvala, CEO, Eugia Pharma Specialities Limited. Mr. Swami Iyer, CEO, Aurobindo Pharma USA. Mr. Venugopalan Muralidharan, CEO, Europe Formulations Business. Mr. Santhanam Subramanian, CFO, Aurobindo Pharma Limited. We will begin the call with the summary highlights from the management, followed by an interactive Q&A session. Please note that some of the matters we will discuss today are forward-looking, including, and without limitations, statements relating to the implementation of strategic actions and other affirmations on our future business development and commercial performance. While these forward-looking statements exemplify judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors may cause actual developments and results to vary materially from our expectations. Aurobindo Pharma undertakes no obligation to publicly revise any forward-looking statements to reflect any future events or circumstances. With that, I will now hand over the call to our CFO for the business highlights of this quarter. Over to you, sir. Morning, everyone. A warm welcome to Aurobindo Pharma's Q1 FY 2027 earnings call. Thank you for taking the time to join us today to discuss the company's financial and operational performance of the first quarter of the current fiscal year. Q1 marked another quarter of disciplined execution, underpinned by strong operating performance, continued strategic progress and prudent capital allocation. Our diversified business model continues to perform well despite geopolitical issue, positioning us for sustainable long-term value creation. Our consolidated revenues increased by 16% year-over-year to INR 9,150 crore, driven by broad-based performance across our business areas. Europe and growth market maintained strong momentum and our U.S. business contained a sustained growth. Operating EBITDA, excluding one-time impact of INR 43 crore towards our loss on de-recognition of lease receivable, stood at INR 1,924 crore with a margin of 21%. A defining milestone during the quarter was the successful completion of the Lannett acquisition following FTC approval within the stipulated timelines. Beyond adding scale, the acquisition strengthens our U.S. platform, expands our presence in complex and controlled substances, and enhances our long-term competitive position. Further production at our China WSD facility doubled over past 12 months, making significant milestone in the ramp-up of one of our strategic investments for sustained growth. We are pleased to report increase in supply from China to Europe and also to U.S. starting now. Business highlights. Let me walk through you the key business highlights for the quarter. Our formulation business remained a primary growth driver, growing 17% year-on-year to INR 8,101 crore, and contributing approximately 89% of the consolidated revenues, supported by growth across all key markets. API business clocked revenue INR 1,049 crore, accounting for 11% of the overall revenues, supported by our backward integration strategy. U.S. revenue grew by 8.1% year-on-year to INR 3,770 crore or INR 399 million, reflecting resilience of our base business. We launched 10 new products this quarter, filed nine ANDAs, received 10 final approvals, indicating strong pipeline execution and regulatory momentum. Our European business continued its strong trajectory with revenues reaching EUR 267 million, delivering 11% year-on growth in constant currency terms. Growth markets revenue increased by 38% year-on-year to INR 1,063 crore or INR 113 million, supported by strong underlying performance across key market. ARV formulation remains stable at INR 35 million for the quarter, driven by stable volume. Our biosimilar and biological CMO strategy continues to progress well and represent important long-term growth drivers along our base business. Operational and financial highlights. Gross margin remains resilient at 60.4%, compared to 58.8% of Q1 FY 2026, benefiting from an improved business mix and operating efficiency. Our gross contribution amounted to INR 5,523 crore. Net CapEx for the quarter stood at INR 78 million. Capital expenditure remained focused mainly towards TheraNym Biologics. R&D expenses for the quarter is around INR 350 crore, amounting to 4% of the revenue. We expect the current rate to continue, driven by research costs towards the pipeline and the higher base of revenues. Further, since multiple clinical studies are at advanced stage, we expect slightly lower development costs for the upcoming period. Our balance sheet continues to remain strong with a strong net cash position of $42 million after payment of $65 million, $85 million towards buyback and $247 million for Lannett acquisition, reinforcing our strong financial resilience and focus on various accretive growth opportunities while maintaining a disciplined capital structure. Our average finance cost declined to 4.8% from 5% in the previous quarter, reflecting prudent treasury management. Our net effective tax rate is 31.9% on account of not taking the tax credit on loss-making subsidiaries. However, we expect the tax rate to normalize around 28%-29% by year-end. Profit after tax stood at INR 1,032 crore, reflecting a healthy operating leverage and efficient capital management. Return on capital. The investments we have made in the past decade are now approaching an important inflection point. Many of these platforms are transitioning from an investment phase to milestone monetization phase, which we believe will progressively improve margins, cash generation, and returns on capital over the coming years. As we look ahead, our strategic focus is increasingly centered on enhancing the quality of growth rather than simply pursuing scale. Over past several years, we have consciously allocated capital towards high-value businesses, superior margin profiles, and structurally high return on capital. Whether it is complex generics or specialty pharmaceuticals or injectables or biologics or CDMO services or backward integration, each investment is guided by a common objective: building durable competitive advantages while steadily improving capital productivity. We believe Aurobindo is steadily transforming into a more differentiated pharmaceutical company with multiple levers, higher quality earnings, and stronger free cash flows and sustained ROCE. As we look ahead, we are encouraged by the strength of our underlying business and believe we are well-positioned to deliver the next two phase of profitable growth, driven by our focus on complex respiratory product portfolio, significant number of products, including DPAs and MTA, with multiple near-term filings are thereby improving visibility across both revenue and earnings. We continue to reiterate our FY 2027 guidance for double-digit revenue growth with EBITDA margin north of 21% and absolute EBITDA in excess of INR 8,000, with potential upside driven by positive outperformance in our high-value strategic business areas. We now look forward to taking your question. Our senior leadership team is very happy to provide you further insight, more details, clarification wherever required. Thank you. Over to you, Vandy. Thank you, sir. We will now open the call for Q&A session. We will wait for few minutes until the queue assembles. We request participant to restrict two questions and then return to the queue for more questions. Please raise your hand from the Participant tab on the screen to ask the question. The first question is from Surya Patra. Hi, Surya, can you hear us? Okay, we'll come back to you. The next question is from Tausif Shaikh. Good morning, thanks for the opportunity. My first question is related to the growth markets. We have shown a strong growth this quarter. Can you help us understand what is leading this growth? Are there any specific countries which is driving this growth? You're asking overall or any particular government? About growth markets. Our growth markets, all the growth market countries are driving growth, in line with the normal. There is no specific country which is growing extraordinarily, like that. That is the thing. See, we are also getting into new markets, like we have gone into Indonesia, we have gone into China, we have gone into-- I mean, Canada is doing well. Every country is doing well. There is no specific country which is doing extraordinary performance like that. That's helpful, sir. My second question is related to Lannett. With now the acquisition been complete, can you tell us what are the key products in the pipeline for the near term? Specifically, can you talk about a partnership with the Respirent Pharma for the inhalers? Where do we stand currently in terms for ADVAIR and SPIRIVA? I think we have received approval for ADVAIR as well. Hi, Tausif. This is Swami Iyer from Aurobindo USA. With regard to Lannett, as regards the pipeline, we are going to launch ADVAIR anytime in the month of August. Rest of the product, I can't really tell you, share with you on what are the products we are going to launch. That's confidential. We do have fair amount of products in pipeline staggered over a period of time. Is there any other question you wanted? Is there any reason for the delay of launch of ADVAIR? I guess we have received approval earlier this year. It's not delay. It's just that the product had to be ready, and then it had to be positioned, because when you get a certain market share, it should be ready with the inventory. It takes a little time for buildup of the inventory before you launch. That's helpful. I'll get back in the queue. Yeah. Thank you. The next question is from Damayanti Kerai. Hello. Good morning, thank you for the opportunity. My question is continuing on Lannett. Besides the respiratory portfolio, which is building up well for you, can you also update on the existing portfolio if you see headroom to grow it further, especially in the controlled substance product? If so, what kind of upside we can see from current level as well? As far as the existing products are concerned, there are a few. We call them the crown jewels, because they grow well, they grow decently, and fortunately, Lannett has been able to get a fair amount of quotas for the controlled substances. We see some growth there. Controlled substance, you should be knowing that there is an overall limit on how much quota is available. If it's 10,000 kgs, 10,000 kgs for the entire U.S., and it's allocated between different suppliers. Lannett happens to be one of the suppliers. We should not expect any sudden jump unless somebody defaults. If some other supplier defaults, others will get it. Lannett had that opportunity. They have ramped up a bit. They continue to do that. That's all I can say for now as far as the ramp-up is concerned, as far as the increases are concerned. The market, when it expands, the quota will expand. It's not like the other products. The quotas are very limited. They're very careful because these are all controlled substances. Got it. It's fair to assume the incremental sales for Lannett portfolio will be driven by the new launches, especially in the respiratory, right? Yes. It will be driven by new launches, I would say. Respiratory is one of them. That certainly I agree. It's not as though the controlled substance will not go up. When we have an opportunity, it'll go up. It has done in the recent past. Sure. My second question is, if you can update us on the Pen-G plant supplies, and whether you have got any clarity from the government on PLI benefits for this year. Also, in terms of progress for external sales of Pen-G from your sites. The Pen-G plant, we have been continuously achieving a capacity of around more than 800 tons-900 tons, is the range we have been producing. The India market, if you really see, it is around 800 tons- 900 tons, and we have been producing that, and which has been effectively converted into 6-APA and ultimately converted into amoxicillin. We have been doing very well on the amoxicillin in the last two, three months. We have been able to produce 6-APA also effectively. Our yield is also coming out very nicely, in line with our expectations. Regarding the PLI incentive, government, we have filed the application, and they will make the payment in the month of September or March. Whatever be the policy of the government, they will pay it. There is no issue on that. Regarding supply to the external parties. Whoever is asking, we have been supplying Pen-G, we have been supplying external parties. We have been supplying to some of the big corporates in India. Right. 6-APA also, we have been supplying. Wherever they have been asking us, we have been supplying. If you really see the import data also, the level of imports of 6-APA has come down very drastically compared to what it used to be in October to December. These are all mostly on account of the advanced supply mechanism. Re-exporting or exporting, whatever may be the word. That is the main thing. There is no issue. Sure. We have been going on. Yeah. Subbu sir, this year we have this minimum import price benefit, which is in place. When we look at beyond this, what kind of clarity we have on the pricing part, which can safeguard against the cheaper import? What— A year up, yeah. Yeah. What we are trying to do is, irrespective of the MIP or the PLI incentive, we have been working towards achieving the self-reliance on the cost structure and ensuring that we are making profit irrespective of the price, et cetera. That is what we have been working on. We are not actually, we'll be reaching very soon. Maybe by end of the year we'll achieve that status. If MIP and the PLI comes, that will be seen at that particular point of time with respect to the market prices. Okay. Thank you. I'll get back in the queue. Yeah, okay. Thank you. The next question is from Neha Manpuria. Thanks for taking my question. Swami sir, on Lannett, from what I understand, there's a facility in the U.S. which is operating at fairly low utilizations. Given that there is not as much scope to improve, let's say increase market share in controlled substances, how do we plan to essentially improve utilization in that plant? That's the first question. Second question to Subbu sir. For Lannett, what sort of synergy should we look at in terms of timing of synergies, let's say over the next two years? What would you think, does Lannett get to where our U.S. business margins are? Both will be answered by Swami. Swami? Sorry, I was on mute. Sorry. Yeah. Thanks, Neha. Let me take both the questions. First and foremost, Lannett has fair amount of unutilized capacity, which we think is a big plus, because we can use this capacity to bring in products in the U.S. that we could not do earlier. One is the controlled substances itself, some of the products that we can bring in, plus it opens up a lot of markets for us, including the government market. We have also made a plan for the next 12 months. We have created a strategic plan. I can't share too much of details on that. Essentially what we are doing is we are trying to bring in products from our portfolio as site transfer that we have either not commercialized or we have not been able to ramp up, or which is required for the government business in the U.S. There's a plan for it. There are people already working on it. The integration, it's in full speed. It's going on. We think that some of these products would be transferred, and that would enhance the capacity. We have got a staggered approach. In 12 months, what kind of numbers we are going to have in terms of monthly output, and over a three-year period, what we are going to do. We feel very optimistic about it, having seen this opportunity. The team is very good. They have well-trained manpower. They have very good machinery. We think we are in good shape there. As well as the synergy. Yeah. Sorry. Go ahead, sir. You also talked about the synergies. There are a number of synergies that we can talk about. I can talk about it for the whole call, but let's talk about the top ones. First let's talk about the SG&A synergies. SG&A rationalization. When we bought Lannett, prior to 29th of June, that's the date we closed. Prior to that date, they had X number of employees. On 29th June, it was X minus probably 40 or 30 employees. The idea was to reduce the manpower where we have got overlap, especially where it's very expensive. We foresee substantial savings in that. Apart from that, there are a number of other advantages that we get. One is when we start using the facility, there's an operational leverage by better spread of overheads. If you talk about the procurement synergy, Aurobindo is a fairly large player globally. We get vendor synergy, vendor procurement benefits, you get synergy through that. This will enhance our margins overall. We see a lot of other benefits in terms of cost saving, in terms of expanded markets, and very important, which has not been highlighted much so far, is the strategic partnerships that we get. We do get number of partnerships, and this is a good opportunity for us to enhance that kind of partnership. Swami sir, by what time do you think Lannett gets to Aurobindo margins? Would that require this facility ramp-up that you're talking about? Would that take two years, three years? I think it may not require that kind of timeframe. I told you that we already had fair amount of SG&A synergies. In dollar terms, it was a decent value. We are also looking at some of the procurements that is going to be additional benefit. We'll immediately see some amount of increase in the capacity utilization. That will also add up. I think we will see some benefit going forward in the next nine months also. Okay. Sorry, sir, what is the utilization currently at Lannett, and how much do we plan to take it to, let's say, in the 12-month strategic plan that you have? We have about 40% utilization. Then we plan to take it to a decent level. Unfortunately, I think I would not like to disclose the percentage, but we are taking it up to a decent level in the next few months. Okay. Thank you so much, sir. This is a 12 months plan. Yeah. This is very helpful. Thank you so much. Thank you. The next question is from Surya Patra. Hi, Surya. Requesting you to connect your audio and ask the question. We will move to the next. The next question is from Bino. Hi. Good morning. Can I have an update on the biosimilar pipeline, especially biosimilar Soliris filing in the U.S.? Hello, Bino. On the U.S. side of biosimilars filing, we are continuing to engage with the FDA on our Planned first three filings this year, which underpins at least three product in the U.S. aspiration that I laid out in some of the previous earnings calls by 2030. The U.S. filing this year is imminent. One quarter here and there, we expect the first filings to happen, and we are actively engaging with the agency. To answer your part one of the question on the updates, this quarter, we completed a successful ANVISA inspection, securing GMP certification for both our drug substance and drug product facilities. The timing of the certification is particularly meaningful because we currently have a couple of oncology biosimilars under active review with ANVISA in Brazil. I think one of them is under expedited review by a new task force initiative launched by ANVISA. The GMP certification is therefore a key input to the ANVISA's marketing authorization process. Having said that, as I mentioned in the last quarter, we already have a head start in the LATAM market with commercial supplies of three of our oncology biosimilars already underway in Mexico. I think we are already getting some traction there. With respect to other updates, we filed BP16 denosumab. As I mentioned in the last quarter, we are gearing up to file a couple of products. Denosumab, both Filvizi, a biosimilar to Prolia, and Fujevi, a biosimilar to Xgeva. Both of them have been filed with the CHMP or the European Medicines Agency. This will position us to address both osteoporosis and oncology supportive care segments. Likewise, I also gave guidance last quarter about omalizumab. Omalizumab filing is on track. We announced successful phase III results sometime back. The filing is on track for Q3 with European Medicines Agency. The U.S. filing may happen a quarter here and there. To summarize this, broadly, my guidance for a broader seven to eight product EU, U.K., Canada-based by 2028, 2029 is on track, with four approvals already received. On the U.S. side, the two or three product filings this year is imminent, which means that the guidance that I provided earlier about at least three products in the U.S. by 2030, we are truly on track with it. I hope that answers your question. Yes, very much. Thank you very much. A second question is around the biologic manufacturing with Merck. Would you be able to give some sense of the kind of revenue ramp-up we can expect in FY 2028, FY 2029, two years? I would give you some color about where we are right now. As you know, with our disclosure, Unit 1 was inaugurated on third June 2026, and we remain on track to begin qualification activities of the facility and the equipment by November 2026. That is in line with the guidance I have been providing over a couple of quarters. The validation batches for the customer for the anchor product in Unit 1 of TheraNym are scheduled in 2027, after which the customer will file the product from this site in the target markets. I expect steady revenue stream beginning 2028, as I anticipate some stockpiling requirements to be built ahead of the launch for the customer. Now we have milestone payments or the revenues that we generate. 2027, when we conclude our validation batches, we do our engineering and validation batches, there will be a flow of revenues. I see a steady state revenue flow to happen once the customer starts to stockpile the product, and to be honest, I see that to be from 2028. In a nutshell, you can expect a steady revenue stream from 2028, depending on the stockpiling efforts of the customer. That's with the TheraNym Unit 1. TheraNym Unit 2, which is part of the product scheduled that I announced in April, where we are going to set up a pure-play drug substance manufacturing facility, which we call it as TheraNym Unit 2. That would be commissioned by end 2029, provided I get all the statutory clearances and environmental clearance to begin construction this October. 2029 end will be when the facility will be available for qualification. Means a two-year horizon, 2030 will be the PPQ batches, the validation batches. Revenues will start. Again, 2031, I expect, after the filings, the customer to build the stockpiling effort to happen for the commercial launch, which means 2031. Will be when the Unit 2 will start to generate the revenue. In a nutshell, the structure for TheraNym is designed specifically to de-risk the CapEx ramp with contracted volumes from Unit 1, providing revenue visibility from 2028 onwards, before the full capital cycle of Unit 2 completes. Unit 2 will start generating revenues from 2031. I hope that answers your question. Yes. Very much. Thank you. Thank you very much for the explanation. Thank you. Thank you. The next question is from Shrikant Akolkar. Good morning, and thanks for the opportunity. I have a question on the CRO business. We have recently acquired a small CRO business. Can you provide some thoughts that led to this acquisition, and how much of the scalability that you can bring in this business? Shrikanth, we recently bought this AAVON BIOCAM. AAVON BIOCAM, as on date, is having a turnover of around INR 100 crores. Right? The AAVON BIOCAM has started their journey in 2015. In 10 years, they established the entire credibility, and they have developed the business, everything. It is only a CRO. Now they have a capacity limitation to enhance further. That is the reason why they joined us. We are already having enough experience in the API, and what we thought is by acquiring the CRO and along with our existing plant, et cetera, which we can organize it, we can make it into integrated CRDMO. That is what we are working. The AAVON BIOCAM is already having more than 50 customers, and they have executed more than 800 projects in the last 12 years. These are all some of the things which our capabilities will complement with the existing CRO capabilities. This will do. Third thing is it also comes with attractive valuation, and we expedite the access to capabilities compared to the greenfield investment. If we take a greenfield investment to come to this level, I think to start up, it will take five years. We are ahead by five years in the whole process. Having said that, it is our job to take it forward with the accelerate the entire process. That is what we are working on. The closing has not happened. Closing is expected to happen in the next one or two months' time. After that, we will start looking into what to do next on this. Just to answer that INR 100 crore revenue, do you think there is meaningful upside to that going forward? I think at least the existing promoter is going to be the CEO of the new company. He has a very big vision of taking it to at least 3x - 5x over a period of three to five years. Understood. Sir, second question. We have presence in Canada and China. You can talk about what's our plan in the Canadian market, which seems to have turned kind of attractive. In China, where we have a formulation play and a facility. If you can update on that. The China plant, we are having a capacity of more than 2 billion tablets. Last year we did around something like 500 million+. Already we are seeing in this quarter, we have already doubled that. Our objective is to go beyond 2 billion, probably by end of the year or mid of the next year. That is what our plan is like. We are also having, in Canada, we have been supplying material like what we have been doing it for Europe, wherein we reduce the third-party dependency to own captive supply of material to Europe, which has helped us in improving the overall revenue for Europe. Like that, we are also trying to do for Canada. Okay. Sir, last question. Lannett had two products, respiratory products, SPIRIVA and Flovent, under development a few years back. Is there any development on those two filings so far? I think they're working. Yeah. Tell me. Go ahead. Yeah. No, no. Please go ahead, Swami. Yeah. It's still ongoing. It's an ongoing development. Okay. Okay. Thank you so much for your response. Yeah. Thank you. The next question is from [Abdulkader] Yeah. Hi, sir. Thank you for the opportunity. My first question is to Satakarni, sir. Sir, just wanted to understand, with the three products what we have in Europe and one in U.K., how has our experience been in terms of grabbing market share and how has the overall competitive landscape been into this particular geography? This is our first two quarters of commercial supplies and commercial stage operations. I would describe our progress as a modest, steady, and a measured start, which is exactly how we intend to approach the transition from a development and clinical stage biosimilars company to a commercial one. Rather than trying to scale across every market simultaneously. Having said that, on direct commercialization, we have begun catering to the U.K. and EU through our own Aurobindo Europe well-oiled infrastructure there. While the Nordics and Baltics are being served through our partner, Orion, who also have started to pick our product. There is a distinct commercial channel in these territories. What is also an important development for you to note, Abdul, will be our STADA partnership is about to open a further commercialization channel in Europe. We expect a duplicate marketing authorization for an oncology product to be approved very soon, after which we will see commercialization running through STADA as well in its designated territories alongside our own Aurobindo Europe presence. In a nutshell, very early stage around two quarters of supplies. Across the U.K., EU, Nordics, and Baltics, we will effectively have three commercial routes to market running in parallel. Ourselves directly and through Orion and STADA in their respective territories. What is also worth noting is that most oncology biosimilars, this is answering a part two of the question. Most oncology biosimilars in Europe are sold through tenders rather than the open retail channels. Only my next two products, denosumab and omalizumab, are primarily retail products. The products that have been approved so far are tender-based products. What you must also know is the tender participation doesn't translate into supply on the same timeline. There is a natural lag between entering a tender cycle and actually shipping a product. I expect all of these to tie in very well after at least two to three quarters from now. We already see our own Aurobindo Europe picking up the product. Likewise, I see our partners picking up the product. In two to three quarters' time, we will see how the European presence is shaping up. Right now it's slightly early for me, but I tried to give you color of what I think my commercial channels will be in Europe going forward, Abdul. Sure, sir. Very clear. Thank you. Next one on Eugia. Sir, if we can highlight how the injectable revenue trajectory has been and, one final one, if I may, with China and now Lannett coming in, understand we have a guidance, but there has been a subsequent OpEx rise as well. At the China plant and Lannett, what are the kind of margins we are building in when we are talking about the guidance which we have just given on the call? Thank you. Let me take the Eugia part. This year has been a steady growth, but it is not going to be double-digit. It will be single-digit because of lack of new approvals mainly from Unit 3, and we are working with various consultants to do the remediation of Unit 3. This year, we expect that the single-digit growth will continue, and we will clock around $500 million+ revenue for the year. Got it. Sir, part one of the question on the margin front from China and Lannett. Sir, the margin front from China, last year, we had a loss of around $7 million EBITDA. This year we should be doing better than. We should be doing positive. That's what I can tell at this stage. All right, sir. Thank you. Thank you. The next question is from Shyam Srinivasan. Thank you for taking my question. Just on Europe, again, a pretty good set of performance, constant currency 11%. If you could just outline what's happening in the Europe business, and is there any updated guidance for fiscal 27? Good morning, Shyam and all. Thank you for your complimentary words. Yes, the Q1 has been a very strong start for us for the financial year, as we have taken up as a mission to grow our base business of INR 1 billion, which we crossed last year. Obviously, we wanted to do a double-digit growth, we are tracking to that extent. Upcoming quarters, I do see further growth based on the new launches that are happening. Some of them are loss of exclusivity launches, some of them are new to Aurobindo, later launch products. This will augment our further revenue growth ambition. FY 2027, definitely, we are expecting to close with double-digit growth over the previous year. On the EBITDA side also, we are increasing our position. Sir, we have reached 20% or north of 20% for Europe EBITDA? Yes, we have. Yes. Maybe Subbu can add color, yeah. We have achieved 20%. If you recollect, Shyam, we have been single digit some three, four years back, and Murali and the team, as well as the accelerated capital supply and other things, cost reduction programs, et cetera, done by the team, we have achieved 20%. Got it. Sir, second question on Lannett, if you could break it down from a quarterly perspective. Should I assume $60 million quarterly revenue before the launches start kicking in at some point of time and 10% EBITDA? I'm just throwing it in there. No, EBITDA will be much higher. Even earlier, EBITDA was higher. The net sale, $60 million, that's what we would like to see at least without the other product. We feel a little upbeat about this, but there's a process that's ongoing. We have to rationalize something. We'll have to add something. At the end of the day, we have to get value. We believe sooner or later we'll get there, in the medium term get there and do better than that. Helpful, sir. Just if I can squeeze in my last question to Dr. Satakarni. Dr. Satakarni, our commercialization of the CDMO, CMO project is later, but if you could just comment without on the industry, because we have seen a big uptick in quarterly trajectory for some of the CDMO companies this quarter. Maybe from a more customer angle or from a, what you're picking up from the marketplace, is there something that is changing on the ground? How do I answer that question, Shyam? You always come up with some very interesting questions. See, first thing that I wanted to reiterate from my last call and the previous call is that TheraNym is not a CDMO. TheraNym is a pure play contract manufacturing organization. Do I want to be a CDMO after a while? Probably, yes, but today it is a CMO. Now, why there is an uptick in CDMO businesses now? Because there is a realization in the Indian industry that the biologic CDMOs are probably a way to differentiate going forward. You see most of them entering into antibody-drug conjugates, offering contract development at a very early level, et cetera. Where TheraNym differentiates itself or where we try to differentiate TheraNym is that we wanted to get into the global supply chain of an anchor company like MSD, that serves the human health right from day one, which means that I want to be part of the commercial supply chain. That's a big ask, because that's a big leap. Getting into commercial supplies of the products that are already in the market means the credibility is going to be very high for the CMO. Once we achieve that, then for me to backward integrate the CMO into contract development, where technically the margins will be also slightly higher in contract development than in contract manufacturing, is going to be easy. The current uptick in the market that you are seeing is something different to what I am doing, which is primarily contract development. I don't think there are any peers in India who do contract manufacturing of a commercial human health product into regulated markets. I am very careful of my words. Most of them are technically contract development and maybe early-stage contract manufacturing companies. What we are doing is slightly different. You will see a lot more emphasis on biologics and biologics-associated products like the antibody-drug conjugates, et cetera. More investment into contract development and contract development organizations in India going forward, Shyam. That's a trend that I'm also picking, but I don't know why, but that's a trend that I am picking. Thank you. All the best. The next question is from Kunal Dhamesha. Thank you for taking my question. First question on R&D expenses. It seems considerably lower, below INR 300 crore for this quarter. Our usual average is around INR 350+ crore. Is there a lumpiness and what's the overall guidance for FY 2027 for R&D? The R&D expenditure, if you take for Q1 FY 2026, it was INR 367 crores. Yes. INR 365 crores or something, right? Yes. The R&D expenditure for this quarter is around INR 344 crores. There is a drop of around INR 20 crores, which is because some of the phase III clinical has been completed, which Satakarni has explained earlier also. This year it will be somewhere around INR 1,450-INR 1,500. That's the maximum we are seeing. Most of the products he has completed and he is in the filing and then implementation stage. Just to add more color on that, Kunal, that if you remember Subbu's guidance a year ago, around 35%-36% of the R&D expenditure of entire Aurobindo was into biosimilars, and majority of it was to support the phase III comparative efficacy studies. With all the seven wave one programs that we started in 2021- 2022, most of them have completed their phase III studies, with the exception of one product that will complete next year. Naturally, the expenditure in R&D towards the comparative efficacy studies, towards the clinical studies has come down. That's the delta that you are seeing. Hello, can you hear me? Yeah. Subbu sir, I can't just reconcile the numbers. Your press release is saying that EBITDA before R&D of around INR 2,204 crore and EBITDA post R&D of INR 1,924 crore. It shows around INR 284 crore of R&D, right? No. Is the other amount is capitalized? No. You have not taken that INR 43 crores, you have to add it, because you are seeing it from the total. You have to take the operating EBITDA, which is in total INR 1,924 crores. Which is what I've taken, right? EBITDA before R&D. Yeah. I will help you. Okay. After the call, I'll help you with the working. Okay? Okay. Sure. Okay. Second question on Pen -G. Last quarter also, we were at more or less 800 tons-900 tons kind of production. Right. Right. What is kind of stopping us from ramping up more? I assume that 45% of that 15,000 tons was our internal requirement, which would mean that currently of 800 tons-900 tons, 70%-80% is being utilized for ourself. Is it true understanding? There are two, three actions. One, as I told you, the imports during the period of October to December or January was very high. That is getting consumed. We'll be able to supply more material. That is one point. Second point is, if you really see the Indian demand, Indian demand is somewhere around 9,000 tons-10,000 tons. The balance 5,000 tons is going towards the exports. What we are trying to do is, we are trying to supply to the Indian demand on the 6-APA, which we will do that. After that, also, we will be supplying to the overseas market. There is no question of production, this one limitation. The production can be easily 15,000 tons, and the yields are very good. What is the demand overall market, which is expected to go around 11,000 tons-12,000 tons. Sure. Lastly, on this STADA agreement that we did for two biosimilars for Euro, is there any upfront payment that we would have received from STADA? Kunal, we haven't disclosed that. The agreement is structured in a manner that all the regulatory costs of filing for a duplicate MA will be taken care of STADA. I will not be able to disclose beyond that, Kunal. Let's say whatever that amount is, how has that been accounted for? Which one? Like— Which one? The upfront payment we would have received from STADA. No. Once we file for a duplicate MA, it will be reimbursed. Okay. That would be part of revenue? Subbu? It has not been received, Kunal. As and when— Yes. It received, we will see the nature of the invoice, the nature of the agreement, et cetera, in consultation with the auditors we are doing. As on date, it is not there in the June quarter. Sure. Awesome. Thank you, and all the best. Thank you. Okay. The next question is from Tarang Agrawal. Hey, good morning. Am I audible? Yes. I had three, four questions, starting with U.S. onshoring. Given the policy narrative that's getting stated in the U.S., just wanted to check how Aurobindo's positioned. As I understand, unit economics, basically CapEx and conversion costs don't support an economic rationale to manufacture in U.S., especially given the depressed generic pricing environment and the onerous working capital requirements to operate in the market. Even then, it seems like it's going to be a requirement. How are you looking at it, and how will you navigate through this? I think there are two questions in what you've mentioned just now. First is, how are we navigating it? If this becomes mandatory for us to do it, I believe that if somebody is prepared to handle it, Aurobindo is the one, because we already have a manufacturing facility in the form of Lannett, and that we can manufacture up to 350 million as is without too much of CapEx, and we can probably go a little beyond that. Plus, we also have the Aurolife unit, which can be substantially higher than this 350 million I'm talking about. We would be able to meet a significant portion of our demand through these two facilities if we have to do it. Of course, we can do expansion. We have scope for it. We also have another facility in reserve that can be quickly brought online for manufacture. With this, we can meet any exigencies that arise for any kind of product in the U.S. That's one part of it, meeting the demand. Tomorrow, if it is made, we are compelled to do it, we can definitely do it. That's number one. Number two, with regard to your question about cost effectiveness of doing it in the U.S., this is going to be a level playing ground. If I have a product X and that has to be manufactured in the U.S., my competitor also has to manufacture it in the U.S. Today, it may be $1, it may cost $4. If it costs $4, there will not be supply unless you get that money plus whatever margins you have to get. It's a level playing ground. Today, if I do a product that's manufactured, imported from India, and I manufacture in the U.S., I'll be out of the market because in India it will be a lot cheaper. It's simple math. Got it. Are the regulators amenable to these kind of requirements or to include these requirements in the policy? What we understand, while details are soft, what we understand is there's a blanket requirement. Just, if it's a level playing field, it makes sense. If it's not, then how do you navigate? Look, if it is not level playing field, how else can it be? You can't say that these medicines are to be made in U.S. and the product which costs you $2 has to be sold at $1. Who would do it? It's a capitalist society. Anyone will do it if he recovers the cost first, the other one is he gets some margin. Otherwise, nobody would do it. The government is fully aware of it. Whatever they want to do, ultimately, it's going to be more expensive. If they can give some form of subsidies, they can give cheaper land, they can give a lot of other breaks. That's all not going to make up for the cost of labor, cost of setting up the facility, the timelines it takes. It takes a very long time to set up a facility. That's why for us, the land acquisition, we have probably leapfrogged about five years in terms of capacity. Five years, seven years. That's how it is. The facility to set it up, to get the regulatory authorities to approve it, first of all, to get a building permit, it could take substantial amount of time. Then we talk about the FDA, and if it's a DEA product, get DEA approval. We're talking about close to half a decade or more. Got it. That's quite helpful, sir. Second, on Europe, as I understand, and congratulations again for the 11% constant currency growth. As I understand, the flu season in Europe was quite weak in Q1. Given that Aurobindo has a broad basket in antibiotics, has that impacted the business negatively or there has been limited impact? Let me take this, Murali here again. Because Q1, we have seen a very hot spell, months over here, but the flu season or the antibiotic season by itself is more prevalent or more defined during the upcoming months, September, October onwards. Of course, we do have our range of antibiotics and including for EMA. We are one of their trusted partners. We do have regular calls with them. They expect us to stockhold this product or even supply to some of the Aurobindo non-footprint countries, which we have readily responded to. To answer your question, the upcoming months will see higher sales for antibiotics, but as you are able to see in the Q1 net revenue itself, based on our broad portfolio of products being effectively commercialized, we are already demonstrating this double-digit growth. Got it. The last question on biosimilars. Satakarni, sir, we see addition of BP58, BP27, BP25 in your presentation, and then there is a host of products in the following page. How should we see the development of these products? Because unlike your current strategy, which is largely centered around second or even third-wave molecules barring Xolair, the upcoming list seems to be a host of products which are more closer in the first wave. Just trying to understand how should we see the development of these products. Especially, you've got a portfolio of products where a large part of, or a reasonable part of R&D spends is behind you. You are in the process of monetizing those products over the next two, three years. Just trying to understand, but waiting too much to monetize would probably then lead you to fall behind on the list of products that you're looking to develop. How should we look at it? Thanks. Hi, Tarang. Our next wave products are in active development, Tarang. There is nothing called a wait and watch approach. In fact, you will see one product moving into clinical studies, pivotal clinical studies, which are now only phase I PK/PD studies, towards the end of this year. With one more, also a post-2030 asset also entering into clinical studies early next year. The next few products are being developed. What needs to be noted is there are two shifts that are happening in parallel across biologics right now, and we are positioning for both. For example, some of them may not be new products per se. The next product that goes into clinical study is a subcutaneous formulation. You can see, of an existing product, the originator biologics right now are moving from IV to subcutaneous administration to cut infusion chair time and improve patient convenience. The BP58 is a trastuzumab SC, which is the clearest oncology precedent for a subcutaneous route of administration, and it is on track to enter clinical studies in 2026, much ahead of the patent cliff. I think the patent cliff, if I remember it right, is 2029. Some of our next wave products are those with a device combination, because that is one major shift that is happening. The other one is subcutaneous. Also a combination of new products, which will go off the patent from 2032 onwards. To answer your question, we hope to be in wave one for the next wave of products, especially with the regulatory landscape now changing that we are getting waivers on some of the phase III efficacy studies in Europe. In U.S., it is still a draft guideline, but we managed to position our case for one of our products recently and got a phase III waiver. There is no wait and watch. Some of these products that we have selected, at least four of them that you will see them progressing in the next 1.5 years Into clinical studies and into the filing phase, hoping to become part of the first wave. The first wave is very subjective. Any biosimilar that you pick today, there are eight to 10 players. Let's see how it evolves. The intent is that, Tarang. Okay. Thanks. Thank you, sir. Thank you. The next question is from Jigar Valia. Morning. Thank you. My first question is for Dr. Makkapati. Sir, we are struggling to put numbers to our CDMO business sales and margin. If you can just spare a minute of your time and help us understand where does the revenue start and how the full-scale numbers look like, say, in FY 2028, 2029 or 2030, and what margins, kind of some color. You give a lot of qualitative aspects, but just if you can help us. As I told you, the Unit 1 revenues will begin from 2028, if the stockpiling is what the customer wants. Likewise, 2031 from Unit 2. Put together Unit 1 and Unit 2, 2032, you should be looking at around $150 million-$200 million as a good case for the contract manufacturing business between Unit 1 and Unit 2. The margins in this business typically are around, the EBITDA margins will be around 35%-50%. Now, this depends again on the product mix that we are going to work towards, and importantly, we still don't know which sort of products will go into Unit 2. Unit 1, we have fairly good visibility. Unit 2 is still three years away. In all, I expect it to be a $150 million-$200 million revenue guidance from 2032 onwards between both Unit 1 and Unit 2, if that helps you. Very helpful, sir. Thank you. My second question is for Subbu, sir. Congratulations on the great numbers. Should we start locking INR 2,200 crore a quarter run rate from next quarter, I mean, 12? We should be looking at it, let's wait how the geopolitical situation in the Middle East is getting over. That is what our objective and that is what our target is also. Good. Congratulations, thank you once again. Thank you. Thank you. Thank you very much to the Aurobindo management team. Ladies and gentlemen, on behalf of Aurobindo Pharma, that concludes today's conference. Thank you for joining us, you may now disconnect your lines and exit the webinar. Thank you.