Ladies and gentlemen, good day and welcome to the earnings conference call of Divi's Laboratories Limited for the Q2 of financial year 2022. 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 an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. M. Satish Choudhury. Thank you, and over to you, sir. Good afternoon to all of you. I am M. Satish Choudhury, Company Secretary and Chief Investor Relations Officer of Divi's Laboratories Limited. I welcome you all to the earnings call of the company for the quarter ended 30th September 2021. From Divi's Labs, we have with us today Dr. Murali K. Divi, Managing Director, Ms. Nilima Prasad Divi, Whole-Time Director (Commercial), Mr. L. Kishore Babu, Chief Financial Officer, and Mr. Venkatesa Perumalla, General Manager, Finance and Accounts. During the day, our board has approved the financial results for the quarter and half year ended 30th September 2021, and we have released the same to the stock exchanges, as well as updated the same in our website. Please note that this conference call is being recorded, and a transcript of the same will be made available on the website of the company. Please also note that the audio of the conference call is the copyright material of Divi's Laboratories Limited and cannot be copied, rebroadcasted, or attributed in press or media without specific and written consent of the company. Let me draw your attention to the fact that on this call, our discussion will include certain forward-looking statements, which are predictions, projections, or other estimates about future events. These estimates reflect management's current expectations of the future performance of the company. Please note that these estimates involve several risks and uncertainties that could cause our actual results to differ materially from what is expressed or implied. Divi's Labs or its official does not undertake any obligation to publicly update any forward-looking statement, whether as a result of future events or otherwise. Now I hand over the conference to Dr. Murali K. Divi, managing director of the company, for opening remarks. Over to you, sir. Good afternoon, and thank you everyone for joining us on our Q2 financial year 2022 earnings conference call. I hope that all of you, your families, and friends are in good health and keeping safe during this still existing pandemic. It's very heartening to see vaccination drives going at a great pace in nation, completing a billion vaccine milestone. This has been reflected in the severity of COVID-19 cases that was declining till recently. However, we are witnessing the rise of another COVID wave in other parts of the world. Hence, it's important for all of us to be vigilant and responsible even after being vaccinated by following all the COVID-19 protocols. As a part of our focus on the same, we conducted vaccination drives and got more than 90% of our employees and their immediate families vaccinated, as we believe that vaccination is possibly the best way to imbibe the essence of support and confidence in fighting COVID-19. On the business front, our utmost priority is to ensure uninterrupted production and supply to our customers with focus on navigating through a secure and smooth supply chain and getting our expansion operational in the estimated time. We have completed many of the expansion and debottlenecking activities planned during the quarter with slight delay caused by the second wave. During the quarter, we have capitalized INR 296 crores. Most of it was for the fast-track projects. We have INR 440 crores of CWIP outstanding at the end of the quarter in projects, especially for creating capacity for new generic molecules and validation for these new generics are progressing very well. We anticipate to spend another INR 300 crores during the second half of the financial year. Regarding Kakinada project, all cases by the landlords are dismissed by the High Court, and the state government has fixed a price of INR 10 lakhs per acre, which we have already paid. We are waiting for APIIC to hand over 500 acres of land. I would now like to throw some light on the CSR activities during the quarter. Being at the forefront of pharmaceutical industry, we have been contributing to fight pandemic since day one, and are continue to do our part in helping communities around our manufacturing units wherever possible, especially when the economy is slowly opening up. We have been continuing to support the government school by distributing essential stationeries, benefiting more than 600 students from three high schools as they recently opened. We have been taking several initiatives towards development of villages around our manufacturing facilities by contributing towards developing road infrastructure, helping in conducting vaccination drives, canal developments, and many other worthwhile initiatives. We shall continue to manage our operations responsibly and create a positive impact around the communities we operate. Thank you. I would like to turn over the call to Nilima Prasad Divi. Thank you. Good afternoon, welcome everyone to Divi's Laboratories Limited earnings call to discuss the results for the second quarter ended September 2021. I hope that each one of you, along with your family and friends, are safe considering the continued existence of COVID-19 pandemic. On the operations front, many manufacturing industries are experiencing their own challenges with volatility in global supply chain across geographies. For pharmaceutical industry, on procurement side, power outages in China have impacted the supply, creating a shortage, thereby volatility in prices of basic chemicals, commodities, raw materials, and especially the solvents. We have been closely monitoring the recent uncertainties. Production-wise, as of now, we have secured the required materials. However, we are reviewing the long-term strategy to maintain a stable supply chain. In terms of logistics, shipping costs have not only soared but also increased unavailability of containers due to increased crude oil prices, empty containers congestion in U.S. ports and blank sailing causing longer waiting times. We are committed to serve our customers despite all these headwinds. The margins are under watch. We are diligent while closely monitoring the situation and trying to mitigate the risk and trust our operational excellence in ensuring an intact supply chain. Before moving on to our operating efficiencies, I'm delighted to mention that the CapEx programs for debottlenecking backward integration and upgrading of utilities taken up during the last two years are continuously resulting in minimizing supply risks and production disruptions, achieving a more improved financial performance. I am pleased to state that the company has achieved a consolidated total income of INR 2,007 crores during the second quarter, reflecting a growth of 14% year-on-year. Profit before tax for the quarter amounted to INR 760 crores, a growth of about 10% year-on-year. The profit after tax to INR 606 crores, reflecting a growth of 17% year-on-year. For the half year ended September 30th, 2021, the company has earned a consolidated total income of INR 3,996 crores, reflecting a growth of 14% year-on-year. EBITDA of 43%. Profit before tax of INR 1,574 crores with a growth of 16% year-on-year. Profit after tax of INR 1,164 crores, higher by 15% year-on-year. During the half year, exports accounted to 88%. The organization continues to have normal business distribution across regions. Europe and U.S. accounted for 72% of our revenue. Product mix for generics to custom synthesis for half year is 46% and 54% of the revenue respectively. Constant currency growth for the quarter is 15%, while for half year it is 18%. The nutraceutical business for the quarter amounted to INR 168 crores and INR 306 crores for half year. Rupee has strengthened towards end of the quarter. There is a Forex loss of INR 7 crores for the quarter, while the Forex gain has been INR 12 crores for the half year. During the current year, assets worth INR 296 crores have been capitalized during the quarter, and INR 566 crores have been capitalized in the half year. For this, the new assets accounted to INR 281 crores. The Capital Work in Progress is about INR 440 crores as of 30th September. Cash on books is INR 1,763 crores. Receivables as of 30th September amounted to INR 1,852 crores, and inventories INR 2,676 crores. Thank you. Thank you, madam. With this, we would request the moderator to open the lines for Q&A. The first question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead. Thank you for the opportunity. Just on the Molnupiravir, is there any traction that is factored in this quarter to FY 2022? Yes, there are some sales from Molnupiravir in this quarter. Okay. Are you quantifying that? Pardon? Would you be able to quantify? We are bound by confidentiality agreements, and we cannot disclose. Even the information that we manufactured Molnupiravir is already disclosed by Merck. That's how we are able to say that. We are quite bound by confidentiality agreement. I cannot disclose that. Sure. Sure, sir. Sure. Just another one on Molnupiravir. Would you be incurring any further CapEx for this product? we don't anticipate, at least during the next two quarters. Understood. Just lastly, on the API side, there has been some amount of moderation if I look at the year-on-year growth on the generics segment per se, while the custom synthesis is growing at a phenomenal rate. Would you like to comment on some moderation on this API sales trend rate? It's not our intention that we grow more on custom synthesis or grow more on generic. We take all the opportunities that come, and we grow them. It so happened that we have few fast-track products that are really taking off. That's the reason you are seeing the tilt of 55%, 45% to 45%, 55% or 54%, the custom synthesis. We do not see any that generic is going down or custom synthesis is going up. I think both will grow. It is exactly what we said about the 6 growth engines in the last quarter. Sure, sir. And just lastly from my side, while we have been working on backward integration on losartan, given that there is now an impurity issue which has come up for losartan as well, are we on expecting to work on losartan as a product as well? We do have it on the radar, but we do not have any problem of the impurities of nitrosamines or azido impurities in our whole portfolio, so we are quite good at that. Great, sir. Thank you a lot for this. Thank you. Thank you. Before we take the next question, a reminder to the participants, please limit your question to 2 per participants. You may come back in the question queue if you have a follow-up. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Good afternoon, and thank you for taking my question. My first question is on the overall COVID antiviral space. You talked a little bit about Molnupiravir in the past, just from a capacity perspective, you know, just tying back to Merck's comments that this year they're pursuing about up to $1 billion of sales and next year of about $5 billion-$7 billion. Is that how it will also work for us from a degree perspective, given that you and Merck have disclosed that you're one of the largest suppliers? How should we look at this on a next year basis? As I mentioned earlier, that we are bound by confidentiality agreements. We are geared up to produce whatever is required or whatever is ordered. We have considerable capacity to meet the world requirements, and we are producing. I think that's all I can say. Got it. Just clarifying here. Yesterday Pfizer came out with its Paxlovid. Maybe you can answer it from an industry perspective. Do you think oral antivirals are now here? Since you've had past experience of working in this space, do you think you will play a larger role? I'm not trying to tie it down to any specific molecule, but just to understand, is the space very attractive now, and we will be one of the key beneficiaries of this overall move towards antivirals? Right. For the human mankind, the companies are coming up with anti-COVID drugs, which is very good news. One, I think you have heard, I mean, it's already cleared, and what you heard is right from Pfizer as well, that these drugs, once they're available very soon, now not only the countries which cannot afford vaccinations, not only countries where vaccination is not done, these oral drugs will definitely help the population. As a business, we are talking about not just $1 billion, $2 billion, I think it's maybe some $30 billion-$50 billion business per year. Looks like these two are ahead really in the pack runners. I'm sure more will come in future, follow-on products, the first-in-class, best-in-class, then the further, as we have seen earlier in other products, other therapeutic segments. We are here to take to manufacture because we can manufacture any chemistry. We are experts in chemistry, not necessarily a product. We are here to take all the opportunities. Got it, sir. Last question is on the financials. If I were to look at the half yearly balance sheet cash flow statement, we have seen inventory levels increase significantly. Just trying to measure it using operating cash flow to EBITDA, I think we have had one of the weaker halves in terms of conversion. Anything to read into? Does it tie into your earlier comments around the raw materials where we have sourced up inventory? It's not the inventory issue at all. It's a better management by the sourcing, other sourcing departments, where Nilima team has taken a decision of in the volatile uncertainty, delay in procurement. We have enough stocks we have procured. That's number 1. 2. Unlike in generics, in the custom synthesis as well, where we have ensured that we have enough stock to meet the requirements without even a 1 day delay. These usually, these custom synthesis products are lengthier route of synthesis, which will take longer time from start of the day for the shipment. That's how stocks are built up. Because if really speaking, it's more on work in progress between inventory management to for assurance of supply, as well as for the capital work. Sorry. For the work in progress. Got it, sir. Thank you and all the best. Thank you. Thank you. The next question is from the line of Prakash from Axis Capital. Please go ahead. Yeah, thanks for the opportunity, and good afternoon to all. My first question is on, you know, the comment that Nilima madam made on cost, and margins under check. I understand there has been significant power outage and shipping costs have, you know, increased. How do we, you know, see this as a. You know, obviously as a large business you would have some pressures, but, can this be also turned into an opportunity where smaller guys are not able to even meet the customer, demand on time? Do we get into the market share or, are we highlighting more from the cost pressure and margins, can take from here? Some more color will help. I think you are right that the market is volatile throughout the year. In the uncertainty times, the larger players like us get, as somebody, I think earlier I mentioned, increase in inventory is a result of making sure we have enough stocks of raw material so that the assurance of supply will be there. This is what our generic customers, our big Pharmas want to make sure that we don't say that, "Well, stocks improved. Our supplier did not supply, so there is no availability of the product." No. Cost of the goods is one thing, price is another thing, but assurance of supply is the most important thing, on-time delivery. This is where we have a good name, and we want to maintain. It is more opportunity for the bigger players, naturally clearly is. It may be little tougher time for the small companies with the increase of energy, increase of coal price and meeting all the requirements. Understand that. What is our flexibility to increase the prices or pass on the cost? Because if supply obviously at the finished goods product would be a big challenge and the customers would understand that. Is there an acceptability of cost increase by them? Most of our, as you know, that we export more than 88% of what we produce, and our customers are large customers in U.S., Europe and elsewhere. We also have a long-term contract where some of these cost enhancements are going down or automatically built into a calculation whereby we can transfer at least most of the pass of it. Again, how much we can transfer, how much we will absorb, I think these are all. If it's a short term or it's going to be a long term in China, mainly the impact is not just China alone on solvents or materials. Because of the backward integration, we escape a lot of the separation. Some of the basic solvents and methane, ethylene, some of the gases and coal, for example. These are the ones that will impact everybody. We'll see. Our intent is to make sure that somehow retain margin as much as possible, and let us see. Understood. Lastly, on the CapEx guidance, sir, for this year and next year, FY 2022 and FY 2023. I think that the minimum I mentioned about INR 400 crores is about the Capital Work in Progress that would bring us to complete most of our projects. I did mention that another INR 300 crores we should be spending before the end of the year in CapEx, mainly to see some of the products. Next one is on the Kakinada. When they hand over the land to us, probably we are estimating anywhere from INR 1,000-2,000 crores of investment. Okay. what I understand is about INR 900 crores for this year and a similar number for next year. The similar number depends upon the more on how soon we will have Kakinada in our hand and how soon we'll start. Okay. Okay. Got it, sir. Thank you. Thank you. The next question is from the line of Damal Bhanumathi, XIR, please go ahead. Yeah. Good afternoon, sir. Thank you very much for giving me opportunity. I've been a regular follower of your results. Quite good results this quarter also. One thing I'm observing is you are very punctual in providing shareholders bonus every five years. It's almost five years for this third bonus. When we can expect it? I think at an appropriate time we will do that. I think we need to, in the coming quarter, we need to wait and see. Thank you, sir. Thank you very much. Thank you. The next question is from the line of Cinderella Thomas Carvalho from Centrum Broking. Please go ahead. Thanks for the opportunity, and wish you all a happy Diwali. Just want to understand on the generic side of the business, if we look at it, are we saying that the inventories would normalize as we go ahead and the demand should come back along with the two highlighted, you said that there are products which are under validation and they will faster. Along with the new generic products which are coming, how should we see this segment in terms of growth over coming 18 to 24 months? The investments have happened. The investments are happening with CWIP on these generic fast track generics. Sorry, generic opportunities where we said that these are the ones going out of patent in 23. The growth fifth engine where we are validating, we are ready to take the opportunity as and when they grow out of patent. The fifth engine. This is the second engine where we increased the capacity from the current 20%, 30% of the world demand to going towards the 70% of its capacity. Those already happened and we are increasing our market share and it is happening. These are the two things that's happening in the generics. Sir, in terms of, just now we were discussing around the, long-term supply sustainability around all the commodities and raw material increases. Do you see any specific opportunity for us, we being, you know, among the first ones, to backward integrate for our portfolio? Do you see any specific opportunity in terms of backward, further backward integrating our portfolio to ensure that the margins, will sustain? Is there any visibility or is there any thought process that you could share with us? The major products, we have already backward integrated to make sure that we have assurance of supply as well as cost savings. The newer generics which we are entering, yes, there is opportunity to backward integrate. Once we reach a 60%, 70% of the market share, I'm talking about the second growth engine where we were 20% of the market and we are going towards the 70% of the market. Those once we reach the 70%, 60%, 70% of the world's market, yes, there will be opportunities to invest on backward integration again. Just like we did on our naproxen, Dextromethorphan and gabapentin and several other products. Thank you very much, sir. All the best. Thank you. The next question is from the line of Surya Patra from PhillipCapital. Please go ahead. Thank you for this opportunity, sir. Congrats with a good set of numbers. First question on the cost control, sir. Despite the all the challenges in terms of trade, in terms of the container cost and the spike in the solvents, what we have seen in the recent times, along with the raw materials. Still we have seen a kind of very good cost control in terms of material cost, which is despite all this challenging situation, we have maintained our gross margin intact, either on a sequential basis or year-over-year basis. My first question is, did you see any impact of this, all these challenges, sir, and which possibly would have neutralized by your backward integration more and more? What's that the scenario? I think, you know, it's not that we didn't face challenges or we are not facing challenges or we are not going to face challenges. We are facing challenges, no doubt. How quickly we can react to it and how quickly we can start working on it. The advantage for us is the human element. We have continuity. We have the senior management who have been with us, the middle and senior management for more than 15, 20 years with us. They constantly work on assigning it to new technology, atom economy and Fmoc. It's not just recoveries alone, you know, cutting down the weight, consuming less and less raw materials. I think this is not just one thing. Okay. Okay. Just an extension to that, sir. May I know what is the share of the solvent cost in the overall raw material cost, sir, for you? It changes from product to product, also it changes from drawings. Some circumstances projects, they may not allow you to recover the solvent, whereas in some projects we may be able to recycle, recover, and reuse. They may range anywhere from 5%-10% or around that. Cost of solvent. Okay. My purpose of asking that question was that, see, in a challenging time if we are maintaining this gross margin at this level. If there is a kind of improvement in the situation going ahead and more and more backward integration that we might see because of our effort. Then, can we further improve our gross margin situation, sir? There are several plans that is, as I said, it's a continuous planning going on. Now, will we go up to manufacturing our own methanol and ethanol? I think then the question mark, no. Mm-hmm. yes, we will manufacture majority of our key raw materials, key intermediates where chemistry is the key. Key. It's not mass or volume of Methoxyacetic anhydride or mass volume of ethyl acetate. These are not the. They don't add much value as chemistry because these are proven state-of-the-art technologies available. Our consumption is really nothing compared to what other industry consumes. There will be price up and down, sometimes 2x for Ethyl acetate or maybe Methoxyacetic anhydride. These we have to face for some time, but they will come back. Okay. Okay. Just last question on one of the component of your sixth strong growth engine, what you had mentioned. You talked about entering the new APIs, which are likely to be going off patent during FY 2023 and 2024. That's a larger opportunity we are seeing. It is slightly different. I mean, this approach is slightly different compared to our earlier stance. We never used to chase the new generic opportunities. Rather, we used to have a well-integrated product profile before entering any market. That used to provide us greater market share for any new entrants or new product entries. Here, in this case, when we are saying that we are targeting products which are going to be off patent, soon, then how integrated we would be by then and, whether this would be similar in terms of profitability in a way that we have been having? Definitely these products will have either similar profitability or higher profitability because they will be just going out of patent at that time, and we will be entering it when they just become generic. I think two fundamental things I want everybody to remember that we do not manufacture dosage forms. Got it. As a result, we don't compete with our customers. Our customers who make formulations, they prefer to buy their API from independent API manufacturers like us than buying from somebody who makes API and also formulations. Once we start manufacturing, once the patent situation is clear, it becomes generic, we will take the opportunity. We have done this in the past. This is not the first time. Utility is our second growth engine, where we have produced a product immediately after expiry of the patent and slowly expanded to 20% now going towards the 50%. Okay. Sure, sir. Wish you all the best. Thank you, sir. Thank you. Before we take the next question, a reminder to the participants again. Please limit your question to two per participants. You may rejoin the question queue if you have follow-up. The next question is from the line of Vivek Gautam from JK Investment. Please go ahead. Congratulations, sir, on maintaining good set of numbers. Huge wealth has been created by Divi's for Indian shareholders since listing the shares. Just 2 questions. Regarding this, KSM prices, you have been able to solve it in a very exemplary manner, sir. What prevents other pharma companies to going for that? Is it very difficult sort of a thing? How long this crisis of increased KSM prices and freight charges will it abate, sir, in your opinion, sir? If I understand right, you are asking that the increase in prices, what China has done for the APIs and advanced intermediates, we were able to get over with that quickly because we started this three years ago when we started looking at the impurities that they are not consistent. We have done it for two reasons. One, assurance of supply. Two, to have consistent quality with no impurities. Three, a backward integration to help our costing. I think it's not just one objective. We'll follow similar for other products. Now, how long this will happen, I think it depends upon the volatility, what's happening in China. One time it was environment, second time it was safety and explosion, third now it is energy crisis in China or maybe the COVID, something else. It looks like for last three, four years, off and on, more than 50% of the time there is always a price pressure either on API or on intermediates or on starting materials. What prevents other pharma companies to going for the integration to KSM level, sir, in and overall for the pharma sector as such, sir, in Indian pharma sector, sir? I really do my business and I concentrate on my business. Really, I spend less time on what's happening in India with other companies because I am on exports. I interact with all the companies who compete with me in U.S., Europe, in custom synthesis as well as in generics. I don't think we want to comment on anything on other manufacturers in India. Thank you, sir. Keep up the good work, sir. Thank you very much, sir. Thank you. Thank you. The next question is from the line of Rahul Maheshwari from CCBL. Please go ahead. Hi, good afternoon, everyone. I congratulate team Divi's for such a fantastic result. Sir, I just want to understand a small thing. Yesterday, I think Pfizer announced their pill with a 89% efficacy rate, [Foreign Language], estimated 50% efficacy rate. How is this going to impact the overall business for Divi's because of association with Merck? First of all, I think I made a statement. I made a statement saying that the two companies, the Pfizer, Merck, they are bringing these oral formulations which will help the suffering humanity. I think we want to look at it that way first. As you know, recently the other product from Moderna that did not do well. Wishing these two do well is the most important thing. Coming back to opportunity for those two companies and also the custom synthesis manufacturing companies for those two companies, the world is very large. It's the billions of people we are talking about. The opportunity is something like $70 billion. The opportunity is $70 billion at least for these pharma companies. The sky is the limit. There's a wide gap between vaccine and the oral dosage form, which is the easiest way somebody can have access from a general practitioner. We think each one will have their own plans and gains, and we are here to support any requirement of active pharmaceutical ingredient by not only these two company, any company that comes out with complicated chemistry for support. Yeah, well, that kind of thing. Thank you so much. I wish you all the best. Thank you. Thank you. The next question is from the line of Harith Lakani from Unifi Capital. Please go ahead. Oh, yeah. Congratulations on an exemplary quarter. Again, mirroring what all the other participants have said, you've done a phenomenal job, kudos to you on that. Two questions, one tactical and one more strategic in nature. The tactical one being, sir, you called out at the start of the call that, you know, you've had some of the price escalations built into your contracts. Is it fair to assume that the margin trajectory that we were on earlier in 1Q than last year, will we see a move back to that level? That's my first question. Pardon. Can you repeat that? Can you please repeat that? Yeah. Sir, my first question, sir, is that you mentioned at the start of the call that you have some of the price increases built into your contracts to some extent. And we spoke about the KSM situation quite briefly. You mentioned all of that. Is it fair to assume that the margin trajectory that we were on in the last year, you see the situation moving towards that in the second half of the year? Our margins are good, and we always maintain and plan for betterment of the margins. In this volatile situation, I think I said we have to be agile, and we have to closely monitor. In these uncertain times, we just have to be responsible and make sure that we keep continuing our supply chain. That is the most important thing. However, it's difficult to assess, going forward, what will be the upside. I think that will be difficult because it's a very uncertain time. The coal went up from INR 2,500 a ton to INR 8,500 a ton. Tomorrow it could be INR 10,000 a ton. I'm just throwing an example. Or a base chemical, base solvent went up 300%. Now, will it come down by March? Will it come down by April? I think these are some of the things they may impact. We are trying to see that there is the least impact and whatever is there we will take. We have some contracts whereby we can transfer. At the same time, we are working on our prospects and things whereby to perform well. No, fair enough, sir. That's very helpful. I just want to understand that, you know, this is a more broader question that I'd like your commentary on. Probably five years back, the sensitivity to taking a price hike by customers would have been far more, you know, noisier conversation. How much, how much has the conversation shifted from, you know, price hike to more consistent supply, which you have been talking about? Has that noise around, you know, your ability to take price hikes or your sensitivity to take price hikes really reduced from the customer end, sir? I think what is more important, I think I did mention few minutes ago that continuity of supply, assurance of supply, and we play a complementary role, not a competing role. In other words, it's not that I manufacture at $10 a kilo and I sell at $50 a kilo to another formulator, but my formulation has a raw material cost of $10. A company that's making formulations and the API and selling API is competing with their own customers. Whereas I always say we play a complementary role. Our customers, they do help us to see how they can help us in maintaining our share of the market or growth of the market or help us with our upset when the prices are volatile. They do help us because of the long-term relationship contracts and also our continuity of supply even in difficult times. Got it, sir. That's very helpful. Sir, you mentioned the $70 billion dollar market size. What exactly is that market size for? I didn't get that. The $70 billion market size is for what? The $70 billion market size is that for the antiviral oral tablet formulations that are coming up for this COVID. Got it, sir. Thank you, sir. Thank you. The next question is from the line of Damayanti Karai from HSBC Securities. Please go ahead. Hi. Thank you for the opportunity. Sir, my first question is, again, coming to Molnupiravir. Here earlier you mentioned you have three streams, two for export and one for the domestic Indian players. Are you supplying from all the three streams or how you see scaling up supplies here? We are manufacturing all the three streams as per the requirement and demand. Yes. Are prepared to enhance whatever quantity is required even further. Okay. Okay, sir. Sir, my second question is, can you update us on your opportunity, which is one of your growth engine contrast media? How do you see this opportunity playing a key role in near to medium term for you? This is where I did mention in the contrast medium, the raw material of iodine is the key. The iodine once used to be $12 a kilo, what went to $20 a kilo, now it is $50-$60 a kilogram, which is a major raw material for contrast media. I did mention that the recovery, recycle, reuse, and whoever is the most efficient, they remain in business. This is where some of the investment is happening, and we are validating the other contrast media. Once these validations are completed, we will be in the commercial scale. Most likely, we could see some of these opportunities coming in next, two to three years? Three years maybe too long. It might be before that. Okay. Okay, sir. Thank you. Thank you. Thank you. The next question is from the line of Rahul Jivani from IIFL. Please go ahead. Yeah. Hi, sir. Thanks for taking my question. I know you are not commenting much on the Molnupiravir financials as such, but can you qualitatively comment on how the sequential trends have been for you on this product? Because on the custom synthesis side, we have seen your revenue going down sequentially by $18 million. Is that sequential decline largely on account of Molnupiravir? Going down? Your custom synthesis revenue has decreased sequentially by $18 million. Is that $18 million revenue decline in the custom synthesis business, is that on account of lower Molnupiravir sales? I'm talking about the custom synthesis revenue, excluding the nutraceutical segment. Yeah. The custom synthesis used to be around 40%-45% last year and similar numbers the previous years, whereas that has increased to 54% this year, this quarter. The custom synthesis, in fact, has increased substantially in the last, two, three quarters. sir, I'm talking about the sequential decline in the custom synthesis business. If we look at your custom synthesis contribution in 1Q was around 50%, excluding the nutraceutical segment, but this quarter the contribution has come down to 43%. Because Nilima ma'am said that the contributions which you spoke about at 54%, that included the nutraceutical segment and that was for first half. Sequentially, we have seen the business coming off. My question is the sequential decline on account of Molnupiravir and whatever quantities you shipped on Molnupiravir during the second quarter, has the revenue recognition entirely happened for those shipped quantities in 2Q? First of all, we cannot comment on Molnupiravir, its quantities, its exports. I think that is highly confidential, and we cannot talk about that. In general, I commented that the export sales, the custom synthesis sales has increased to 54% from the traditional 40%. Sure, sir. No worries. Just on the COVID antiviral opportunity, you spoke about that the market opportunity is quite big, and we do have exposure to Molnupiravir. Are we working on some other products as well on the COVID antiviral side, which the competitors might be developing? The custom synthesis of these products are highly confidential, and we do sign confidentiality agreements. I cannot comment. The reason I am able to say on Molnupiravir is that because Merck has declared that we are the authorized manufacturer. Otherwise, we wouldn't have even mentioned anywhere about that we are the manufacturers for Molnupiravir. I cannot comment on any other product where we do custom synthesis. Sure, sir. Thanks a lot. Thank you. We take the next question from the line of Lakshmi Narayanan from ICICI Prudential. Please go ahead. Yeah. good evening. Am I audible? Yes, sir, you are. Yeah. My question is that, you know, what are the key business indicators you actually look at on a regular basis, in addition to margins and various other things, right? When you look at business and when you do your MIS on a monthly or a quarterly basis, what parameters we would actually keenly track, Dr. Divi? I follow more on what are the new products, what are the new technologies, and how efficiently we should be able to do them. I think those are the things we need to keep monitoring. It's not just P&L, and it's not the bottom line. What is more important is what new technologies are coming that we could apply those to either our chemical compounds or our custom synthesis. See, the reason people come with, in custom synthesis to us is because we keep investing in new technologies, new equipment, new systems. What is important is that one needs to monitor what's happening in the world with the new technologies, what kind of new products are coming out requiring such technologies. Both I think have to be monitored. Business automatically comes once you are monitoring them. Can you give me just a case example of that, just to understand this better, something which you have done quite recently or in the last one or two years on this front, new technology or products? Yeah. If you recall, the C20 projects that were there is a 20 amino acid peptide that came out from Roche. We looked at it, we followed, and the moment they were looking at the key building block, we made our own starting material, the Di-BOC, which is mainly the BOC protection required. We made all the BOC protected amino acids, Fmoc protected amino acids. We made dipeptides, tripeptides, and we were geared up, and we supplied quite good quantity of these building blocks before even people thought about them. Such kind of thing is the proactive approach one needs to have in both investing in new technology and investing in new chemistry and having a dedicated manpower, dedicated employees who will continue the technology and refine it, refine them than just learn and leave. Got it. Thank you, sir. Thank you. Ladies and gentlemen, there are no further questions. I would now like to hand the conference over to Mr. Satish Choudhury for closing comments. Thank you all for joining us today for the earnings call of Divi's Laboratories Limited. In case you need any further clarification, please reach out to our investor relations. Thank you. Thank you. On behalf of Divi's Laboratories Limited, we conclude today's conference. Thank you all for joining. You may now disconnect your lines.