Ladies and gentlemen, good day, and welcome to the earnings conference call of Divi's Laboratories Limited for Q4 and full year FY 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 now 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 and year ended March 31, 2022. From Divi's Labs, we have with us today Dr. Murali K. Divi, Managing Director, Ms. Nilima Prasad Divi, Full-Time Director, Commercial, Mr. L. Kishore Babu, Chief Financial Officer, and Mr. Venkatesa Perumallu, General Manager, Finance and Accounts. Today, our board has approved the results for the quarter and year ended March 31, 2022, and we have released the same to the stock exchanges, as well as updated the same on 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 this audio call conference is a copyright material of Divi's Laboratories Limited and cannot be copied, rebroadcast, 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 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 officials 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, for opening remarks. Over to you. Good afternoon, and thank you everyone for joining us at our Q4 financial year 2022 earnings conference. I hope that all of you, your families, and friends are safe. The current situation of COVID-19 is significantly improving with more people recovering and less hospitalization. We shall appreciate our government bodies who have made tremendous efforts by conducting mass vaccination drives to tackle COVID-19. Divi's continues to mitigate the uncertainty tactically and adapt to ever-changing customer requirements and business needs. At this moment, I would like to applaud the dedication of all employees across the organization for achieving a milestone revenue of $1 billion with decent profitability despite the hurdles faced during the pandemic. During the year 2021, apart from creating additional capacity for our pipeline products as well as new capacity for emerging custom synthesis projects, we have also augmented and upgraded our utility infrastructure, which also includes environment management. I would like to inform you that our core investments from the last two years on debottlenecking, capacity expansion, and backward integration have started to help us achieve scale and de-risk external supply dependence. Due to the pandemic, there is much more focus on development of oral small molecule for complex therapeutic segments for indigenous administration. With high competency on handling a wide range of complex chemistry as well as rapid commercialization capabilities, Divi's has capacities and capabilities to take on the opportunities that lie ahead. Divi's, as a responsible pharmaceutical firm, has engaged in a number of CSR activities and has spent about INR 42 crore during financial year 2021-22. Our initiatives are mostly focused in the surrounding communities around our manufacturing units. These include enabling vital services like providing clean drinking water, empowering women, promoting education to children, encouraging skill development, to name a few. I would now ask Nilima Divi to brief on operations and financials. Thank you. Hello, good afternoon. I welcome everyone to Divi's Laboratories' earnings call to discuss the results of our Q4 FY 2022 earnings conference. I hope that each one of you, along with your friends and family, are safe. Supply and cost challenges on procurement side persist given the geopolitical tensions and lockdown in China due to COVID-19. We are actively monitoring the developments and managing our inventory based on the product criticality. We are making a huge effort in encouraging and developing domestic Indian sources for some of our material requirements. The risks are mitigated to a large extent, thereby minimizing the impact. Shipping costs and timelines continue to increase. Container shortages, rising oil prices, and port congestion are causing great disruptions across regions. Our logistics team are proactively planning shipments with timely communication to customers, creating a clear supply visibility. Overall, FY 22 has been quite a challenging year for the pharma industry as a whole. Supply continuity despite various disruptions across the supply chain speaks volumes about our abilities as reliable supplier. Globally, pharma companies are diversifying their supply network, focusing on stable supply partners with sustainable business models and strong supply chain controls. Divi's is ready to capitalize on all these opportunities with ready capacity. Moving on to financial performance for the year 2021-22. I'm happy to state we have achieved a consolidated total revenue of INR 9,074 crore for the year, reflecting a growth of 29% over the corresponding previous year. Profit before tax for the year amounted to INR 3,684 crore, a growth of 38%. We earned a profit after tax of INR 2,960 crore during the year, reflecting a growth of 49%. Our EBITDA margin for the year accounted to 44%. We have been able to contain our material consumption in the range of 34%-35% based on product mix despite supply constraints and price volatility. Product mix for generics to custom synthesis is 41% and 59% for the full year. For the quarter ended March 31, 2022, we have achieved a consolidated total revenue of INR 2,571 crore, reflecting a growth of 42% over the corresponding quarter of the previous year. Profit before tax for the quarter amounted to INR 1,076 crore with a growth of 61% year-on-year. We earned a profit after tax of INR 897 crores during the quarter, reflecting a growth of 78% year-on-year. Exports for the year accounted for 90%. Exports to Europe and America accounted for 77% of our revenue. Constant currency growth for the quarter has been 39%, while for the year it has been 34%. Our nutraceutical business for the quarter amounted to INR 157 crores and INR 629 crores for the year. We have capitalized assets worth INR 172 crores during quarter and INR 935 crores during the year. We have a capital work in progress of INR 470 crores. We have a Forex gain of INR 29 crores for the quarter, and for the year, the Forex gain has been INR 38 crores. As of 31st March 2022, we have cash on books of INR 2,804 crores, receivables of INR 2,570 crores, and inventories of INR 2,644 crores. Our net worth now is INR 11,691 crores. Thank you. Thank you, madam. With this, we would request the moderator to open the lines for Q&A. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Tushar Manudhane from Motilal Oswal. Please go ahead. Yes, thanks for the opportunity, and hearty congrats for ending FY 2022 on a very strong note of 28% sales growth. Just would like to understand, given that we continue to have a steady state sales growth of 13%-15%, and against that the FY 2021-22 has been a phenomenal year. Would that growth continue even in FY 2023? Well, I used to project every year a 5%-10% growth year-on-year on the regular business. It's such a dynamic situation right now which we are in, and some of the volumes that came from custom synthesis products for the innovator is a very unique situation. Lots of dynamic changes in the therapy segment. We need to be resilient and quick. We respond to the dynamic changes. Yes. It's a difficult thinking that we would like to maintain, but we also have to look at the reality in the dynamic situation. What I can say is we created capacity with multipurpose blocks. We are ready to produce volume in a short notice. This model has speed of delivery. I think what we are saying is we are fulfilling all contracts. The future is good, but at the same time, with so many things happening in the world on energy, on various fronts and pandemic situation or pandemic, how it is going to behave in the coming year, not knowing, it's very difficult to give projections at this moment. On the receivables that have been sharply increased over the past six months. Could you explain that? There are no bad receivables. All receivables are as per the contracts. What is reflecting is the increase in sales that has happened in the fourth quarter. That's what is reflecting. Got it. Just lastly, if I may, just an update on Kakinada's CapEx. Has that started? We are still waiting for the government clearance to go ahead, though we have all the licenses are received. As soon as it comes, we'll be investing. It's been almost three months where documentation is very much in place, but clearance is not coming through. We are waiting for it. Expecting it any day to happen. All right, sir. That's all from me. Thanks, and all the best. Thank you. Thank you. The next question is from the line of Neha from Bank of America. Please go ahead. Sir, thank you for taking my question. Just wanted to understand what our current capacity utilization is given, you know, the capacity expansion and debottlenecking. The capacity is around 80% right now, and it varies quarter-on-quarter, 80%-85%. What I want you to understand that the 15% of capacity available, it's quite large volume to accommodate anywhere from 5 to 10 projects in large volume. It can accommodate. Mm. We also have two buildings that are ready now to take up new projects constructed already. The 15% available capacity includes these two new buildings? The 15% doesn't include the 2 new buildings because the equipment has to still go into the 2 new buildings. Oh, okay. Buildings that are running right now, we are operating about 80%. Understood. Sir, given that Kakinada is yet to, you know, start construction and our growth rate, do you see a risk, you know, let's say, in FY 2024/2025, where our growth, you know, becomes flattish because of inability to add capacity? Do you run into that risk? Not immediately, but let's say, you know, 18 to 24 months down the line? See, Neha, I think I did mention last time that both unit one and unit two at both sites, we have more than 100 acres of land. At unit one, 200+ acres, and at unit two, 150 acres land available with all infrastructure, so that we could start construction of additional buildings immediately without waiting to take very large volume products. Whereas to accommodate 5-10 projects, we have the buildings and equipment available right now. I don't see that Kakinada delay has anything to do with we being unable to fulfill any new opportunities that might arise in the coming 2-4 years. Understood. Okay. Thank you so much, sir. Thank you. The next question is from the line of Surya Patra from PhillipCapital. Please go ahead. Yeah. Congratulations on the great set of numbers, sir. I have three questions. The first question is on this antiviral drug opportunity. If I remember correct, last quarter that you had mentioned, you are working on multiple molecules on this front, so which could be considered as a limited period opportunity, but you were mentioning about 1-2 year of opportunity on those front. More to that is that, this, the calendar 2022 is likely to see a kind of oversupply of this antiviral drugs. The global estimate suggests that $32 billion worth of antiviral drugs will be supplied by the three players. If that is the case, then API supply opportunity possibly will be $1 billion plus. Given our execution and track record for Molnupiravir and all that, how do you see really is this opportunity really panning out throughout calendar 2022 for the industry and Divi's, particularly in FY 2023? Yes. There are multiple opportunities in the for the pandemic, for the COVID-19. As you have seen the earlier ones, Piperacillin, Ivermectin, Dexamethasone, Chloroquine, Acyclovir, Remdesivir. Several of them, people thought they were highly active, and with the virus changing its course or changing its activity, I think they became inactive or they are being less used. Now, you mentioned the newer ones with the three big pharmas coming up. Another two or three biopharmas, they're also developing. What is going to be the billion dollar question or multibillion dollar question is the how the pandemic behavior is going to be in the next three months, six months, nine months, one year. Now, what kind of changes that will take place in the world? That is the real issue. What I am saying is we are in touch with every big pharma. Every big pharma knows that if they want 100, 500, 1,000 tons of an antiviral drug. Usually antiviral drugs are, especially the oral ones, are not just 5, 15 milligrams, 100 milligrams. These are in grams per day. So if they need, if the product is successful, they need no less than 100-1,000 tons or higher. There are not many companies that could handle such volumes in a very short notice. We are prepared to do that, and we have the equipment, trained employee, and analytical equipment available to handle all such. We will not lose any opportunities that come to us from these big pharmas. That much I can tell you. In terms of quantifying, it's difficult. Sure. That is very, very difficult to quantify. Sure, sir. My second question is on the new product additions. If I see, sir, in the recent past, or after a meaningful gap that we have added products like Orlistat, Brilinta, Lenalidomide. These are the kind of DMF filings that we have done. Possibly Lenalidomide is not a possibly much larger product, compared to our product basket, what used to be. In case of Orlistat and Brilinta, possibly it is a China replacement strategy that you would be looking for. Sure, what is your thought process in selecting these three products in the recent past for filing with the U.S. FDA? In some sense will give a better clarity, sir. It's not just 3 products. I did mention that there are products going out of patent between 2023 and 2025, about $20 billion worth. These products are our real targets for making the next-gen generics to give us a good volume. These, for these, I think this is one of the growth engines I have mentioned, the future generic opportunities, where the products are developed, samples shifted from pilot studies and validations are under progress. We are gearing up for supplies from 2022 between 2023 and 2025 for these good volume products. Okay. Just to ask one question, sir, from my side. Generally, I wanted to have a kind of a big picture view from your side. Let's say, what is our aspiration over next five years? Considering these couple of facts. We know that this China replacement is a much bigger opportunity for particularly in the APIs and intermediate space. That is one. Secondly, the old and standing concern of rising cost, which is been a key factor for outsourcing of manufacturing activity. That is becoming more and more serious only. Third is that your dominant position in that API and intermediate space for both patented molecule as well as generic one. India's favored position in the current timeframe, and also your non-presence in the biologics, which is likely to be one of the key growth drivers. Considering these four factors, what five-year goals and aspirations that you are having, sir? Well, it's unlimited. Great, sir. Those are unlimited because sky is the limit. If one wants to dream, I think I always say dream high, but make sure that your feet are on the ground. I repeat again, dream high, but keep the feet on the ground, live in reality. The reality is we are a debt-free company. We have INR 3,000 crore of cash in the bank, and we have a lot of investments done. We already have capacities, and we are further investing. Now, in the small molecules, I think we are probably one of the first ones to reach $1 billion sales in the small molecules, APIs and intermediates. How soon we can grow from there to the next level. To become a $1 billion company is one thing. Growing from there in the areas where we have chosen, yes, as you said, it's an opportunity, designer replacement, and also the. There are several new molecules coming out. They're not coming from the big pharmas. They are coming from small biotech companies or small companies which are being funded. The big pharmas are buying these companies when they are in phase I, phase II, and all of a sudden they need capacity to manufacture these products in large volumes. We are evaluating some of those or few of those, and we see great opportunity in the coming three to five years in those as big pharmas don't own chemical plants anymore. Though you say that make in Europe, make in U.S., but there are no big API manufacturing facilities. The maximum they can do is maybe take N-1 and finish the API for the requirement of only in U.S. or for the Europe. At least certain quantum to say that it is made in U.S. or made in Europe. We are ready to take all the opportunities that are arising from these areas. Got it. Yeah. Thank you, sir. See you all again. Thank you. The next question is from the line of Jiten Doshi from ENAM Asset Management. Please go ahead. Many congratulations, Dr. Murali K. Divi. This is exceptionally good year with very strong results. My compliments to you and your entire team for achieving this herculean task in this environment. It's really heartwarming to see your results and the value that you have created. Sir, I have just one question. If you look out about 4, 5 years, where do you believe are the sustainable growth rates and the sustainable margins? I'm not discussing a quarter or 2 or 1 year, the coming year. Let's say if you look at 5 years ahead, where do you see sustainable growth rates and sustainable margins? It's not an easy question to answer because we are getting the surprise of pandemic, which hit three years straight in terms of several issues. Fortunately, Divi did not get impacted. Now, looking at the energies, the logistics, I think the main one is the logistics in the world, right from containers to transportation to ports, being blocked or being in trouble. I'm not talking about the Ukraine. I'm not talking about Sri Lanka or China ports or. Overall, I think there is a lot of problem in the transportation also. As a company making APIs and intermediates, sky is the limit, and we are prepared. We are gearing up with all the capacity requirements. As you know, the big pharmas are looking at more and more small molecules because it is easy to administer. When the pandemic came, people tried these Remdesivir and few other things as injectable. Again, that will limit, you know, to take care of the people. Whereas in the oral form, it is much easier to administer mass of millions of people. Several companies are looking at APIs which are administered orally. These are mostly small molecules, and I think we expect a good growth. As you said, not in the next 1, 2 years, 5 years, I think we can expect good growth. Sir, can I take 40% as your base margin without which you don't want to work? I won't say ideally that I don't want to work. We will work towards it. See, if somebody is getting 20% or 30% on a product, we know what to do Kaizen, that the continuous improvement in terms of cost saving, improving yield, increasing productivity, recycling solvents, work on atom efficiency. Where people think that to make a 10% margin is difficult, I can say that we'll make 50% margin in that product. We're doing that in some of our chemistries. It's not that, it's not that it's difficult. We choose a product. We'll always choose a product that will grow, that will be required for a long time. We are not looking at immediately whether there's a 30% margin or 60% margin. It doesn't matter to us. We know we can work on it, and we see the opportunity on atom efficiency, and we go after it. Sure. People where we have the scientific research who are dedicated to work on. Sure. Sir, next 5 years you would be spending what about INR 7,000 crore-INR 8,000 crore of CapEx to accomplish your vision? This plan is about immediately in the next 2-3 years to spend about INR 2,000-3,000 crores. If opportunities require, we don't mind spending INR 4,000-5,000 crores because we do accumulate our reserve. Our reserves do permit such expansion. Sure. Sir, wishing you all the very best and thank you so much for the increased transparency. We highly appreciate that and wishing you all the very best for the coming year and the years ahead. Thank you very much, Dr. Divi. Thank you. Thanks. Thank you. The next question is from Shyam Srinivasan from Goldman Sachs. Please go ahead. Yeah. Good afternoon, and thank you for taking my question. Just the first one on custom versus generic versus nutraceutical. Just want to understand, and this is again, disclosure you put out in the annual report, but I'm just preempting it here. What is the largest product and what is the concentration or how much does it contribute to your total sales for fiscal 2022? We don't disclose by product, by company or by customer. We have been saying from the beginning that custom synthesis, generic, a ratio of anywhere from 40-50% or 60/40%, which keep changing by quarter on quarter or year on year. 40/60/40, generic and custom synthesis. I think right now it's probably the exports are about 90-95, 94%. It happened to be this year it was custom synthesis about 94%. Sorry. 60% custom synthesis and 40% generic. Again, my visceral thinking is that we maintain 50/50. I've been saying all the time that we want to maintain that. That's helpful, Dr. Divi. I'm just referring to your, say, fiscal 2021 Naproxen you've given in your annual report is 20%. I'm not gonna push you there, but maybe we will wait for that disclosure in terms of what the largest product is and if it has changed this year versus last year. My second question is, if I were to use the disclosure of 41% generic, which includes nutraceuticals and 59% for custom for the full year, I'm getting pretty weak numbers for generic API. This is excluding nutraceuticals in for the fourth quarter, like a 25% decline. Maybe some of the numbers are rounded and I appreciate that. But just the decline in the generic API piece over last year. Clearly the ratio has moved from 60/40 to 40/60. I get that. How should we look at it going forward? Do we now have either demand visibility or capacity for the new molecules plus the 23-25 expiries of patents? How should we look at the generic APIs piece? I'm coming from a point where people are worried about, like many other participants, about sustainability of the revenue momentum. Since we don't know what some of these products are contributing, we are trying to strip off and look at what is the base business excluding, say, any one-time opportunity that may be there. That's the context. It's a long question, but I hope you can give us some clarity there. Well, generics as such are under a lot of price pressures. Generics as such the customers, because of the pandemic behavior, either they want it just in time or the way they used to sell directly to the stores now is going to be the big guys are purchasing in mass volume and local distribution centers. Yes, generics are going through price pressures, not volume pressures. The volumes are still there. We did not lose a customer. We did not lose volumes to anybody else. In fact, the opportunities are coming. It's that based on the pandemic, the therapeutic segment demand have changed some of them. Some of them came down, very few went up. Everybody is looking at just use what is required for the pandemic and just postpone purchases of the generic, whether it is anti-inflammatory or whether it is anti-infectives or, painkillers are all being, I wouldn't say neglected, postponed, less consumed. That's where it starts with the end user. It comes to the stores, it comes to the wholesaler and finally to the formulator who directly buys from us. The feeling is that once the pandemic settles, I think it'll come back to normal as we are seeing now many hospitals and many, they have started all therapeutic areas, treatments, surgeries. I think it'll take another six months to one year to stabilize if the pandemic doesn't change its course again. Now, coming back to the 4,159 and generic, how it is going to. How will Divi's get benefited or are we looking at the future? If you recall our growth engines, what we discussed. We have expanded on the existing generics. The contracts are signed, and we don't see any issue with that. Then we have done a lot of increasing capacities for the existing generics where we were playing only a 20% role. Now we have increased that by 60%-80%, and we signed the contract, and they were being implemented slowly because they had earlier contract signed. They cannot abruptly stop supply to the other earlier supplier, whether it is China or some, or some other supplier. We need to make sure that the switch takes place, is taking place. Also, I mentioned about Sartan. Sartan is a good one of the good growth engine to us, where we were strong only in one Sartan, where our microdomain impurities are excellent compared to several other companies which had to close down. Now we have created capacity for the Sartan. We have at least three Sartan, the validations are going on, and we are geared up to take the volumes in the coming years. I mentioned about contrast media. That's another growth engine. This contrast media is now very important situation because there are not many people. There are only two in the world other than Divi, and iodine what used to be $25 is now $55-$70. How efficiently you can consume iodine, how you can recover, recycle with minimum loss where we are excellent, that's the winning situation where we can get as much business possible in the contrast media. I think you'll see in the next 2-3 years a good improvement in contrast media with good numbers. We also mentioned as one of the growth engine that 2 large custom synthesis projects, they are progressing well. Qualification quantities already supplied. Commercial quantities will be starting in the next 1-2 years. Again, these are all long-term projects. They are not disappearing molecules. These are growing molecules. The future generics, where I said between 2023 and 2025 going out of patent, $20 billion. Again, we have the capacity, processes are developed, samples supplied from the pilot plant and validations under progress. As and when patent expires, we are ready to supply. We don't see any reason that we will be having issues in the generics. No. Yes, the custom synthesis opportunities, the unique where we were in a unique situation in the anti-COVID drugs or others, gave us a boost. That doesn't mean that we are not doing well in the generics. Yes, the generics are in price pressures, and I think we will come out in the next few months to a year. Thank you. Dr. Divi, last question, I'll keep it very brief. If I were to look at when any company does like a big pharma does an expedited CapEx when you announce it, let's take the case of Merck, which you did a INR 400 crore CapEx, I think a year before. Should we once this opportunity goes away, how should we look at the return on that CapEx? You said in the opening remarks about multipurpose. Should that be how we should look at it, or do you think that is dedicated and it's once that opportunity goes away that CapEx is not productive? Good question. We never build pilot plants or blocks dedicated to a product. We build always multipurpose blocks. If the customer wants it, we can use that block only to make his product. But if customer says I want only 1,000 times, 500 times, we can use remaining 50% of the time to make any other product, either generic or for any other custom synthesis project. If he says, "I want only 30%, 300 times," we can use it for the next 6, 7 or 8 months for any other product. Because all these equipment are multipurpose and can be switched within a matter of 30-45 days. The bottleneck is the regulatory bodies. What time it takes for the regulators to get an approval for an additional molecule. They're the only one. Whereas we can switch and manufacture any other product. One thing I want you to remember, any product, they won't die. What will happen is instead of 100%, maybe they'll take 70%, 60%, 40%. That's our experience. What seems to be less active or more active may become less active and more active. The molecules behave differently while the pandemic is taking it from variation, bringing some variations. Thank you, Dr. Divi. All the best. Thank you. Thank you. The next question is from the line of Cyndrella Carvalho from JM Financial. Please go ahead. Yes. Thank you for the opportunity. Dr. Divi, if we look at our inventory number at INR 2,800 crores for the full year, should this be considered as a visibility for next year's growth or is there any raw material inventory built into it? Could you please repeat the question again? If we look at the INR 2,800 crore inventory number for the full year, Am I audible, ma'am? Nilima, am I audible? Yes. Yeah. INR 2,800 crore number, if we look at the inventory number, should we consider this as the visibility for our growth in FY 2023? Or is there any inventory, like, you know, risk, that we should, you know, consider when we are looking at this number? No, the inventory is related to the actual product we are manufacturing, and there is no risk to the inventory at all. The reason probably the inventory looks whether it is average or median or high is because the management takes decisions to stock enough product where we may have problems either with solvent or catalyst or some of the raw materials. That's helpful, sir. If we look at the overall scenario on the supply situation, on the entire logistical situation, do you think FY 22 would have some of it impact, and if we can quantify the same? I think it would have a similar impact as what it was last year, considering we have some other additional factors that are hitting the market. It could be the port situation that's happening currently, even with the Colombo port, along with the Shanghai port, or it could be the war that's happening, where the effect is seen slightly in Europe. It is very difficult to quantify at this point of time, considering where the things are going to head and how they're going to melt into. Also we need to see how the pandemic is going to play. Is it going to? Because again, there's many cases where it's increasing across the country and other nations. It's quite difficult to quantify. Yes, we would be slightly conservative, and we would think that we need to operate at with stringent practices as we did this previous financial year. Okay. Nilima, any risk to the 45% EBITDA margin level that you envisioned initially? Pardon me. Can you repeat that? Any risk to the EBITDA margin of 44% that you envisaged initially? We don't see any risk on the EBITDA. I think this is where I always say bottom line that's where we concentrate, not on the top line. The top line automatically happens as we introduce new products, new generics, and new custom synthesis opportunities. The bottom line depends on our efficiency and productivity because of our process development work. It varies, but we try to maintain it that what you said, 40%. That's helpful. Dr. Murali K. Divi, if I may, the last one. We've been talking about immense opportunity for our custom synthesis business. There are a lot of products as per your commentary on the generic side of the business, which will commercialize. Is there any visibility that you can provide? I know I might be asking this question again. Any kind of a broad number that if we will be able to at least maintain the FY 22 number and grow over it at the top line, if any sense that you could help us would be very helpful. No, as I mentioned that, we are in a peculiar situation. I used to project very well year on year. I think with the current situation in the business, we would like to make sure that it's better not to project at least, and wait and watch the pandemic situation, the war situation, the port congestion situation, and also the various molecules coming out, their efficiency situation. I think I'd rather not project. Thank you so much, sir. That's very helpful. All the best. Thank you. A request to all the participants. Please restrict to two questions per participant. If time permit, please come back in the question queue for a follow-up question. The next question is from the line of Alankar from Kotak Institutional Equities. Please go ahead. Hi. Good afternoon, everyone. Sir, my question is on the contrast media segment. It's a pretty consolidated segment with high entry barriers. You just now alluded to your cost competitiveness given higher iodine recovery, and you have, I think, alluded to that in the past as well. Can you elaborate on how has been the early progress in gaining market share in this highly competitive or rather pretty consolidated contrast media segment? See, the contrast media segment is growing at the rate of 15-20% year-on-year. You are talking about if there are, let's say, 4,000 tons of Iopamidol. At 20%, you need around 800 tons of Iopamidol. Companies are not geared up to expand immediately to that kind of volume in this unprecedented time. Yes, there are only two or three big players in this contrast media, if you take the major five products. The opportunity is very high. Entry is difficult. We already entered. So we are seeing more and more. When iodine was $15 or $12, people did not mind without investing into heavy recoveries, the contrast media. Finally, when it goes as injectable to the end user, the contribution was very less. Today, the iodine at the $55-$70 per kilogram. I think people need to make sure that they are conserved and recycled, recovered and to the base. This is where we are good at. We've already installed plants to recover and doing it, and we're doing it. We are seeing good growth in this business. Thank you, sir. Sir, just one follow-up on this because most of the key players in the market right now also control the end consumer channel. I mean, they also are present on the devices front. To that extent, is that an additional entry barrier for someone like us who's not present into devices? You also want to see the growth of it in every market. The people whom you are referring to, probably they are linking it to the equipment supplier. The same thing is being generalized because people are looking at, like, the price pressure. They are putting price pressure on the existing suppliers, and they finally understood that unless you bring down the price to X, we will not be able to sharpen the penciling what we should be charging to the patient. It's coming to that. That is the contrast media plus whatever is the imaging, the cost of the equipment in the hospital. They totally package it to X. X number of rupees or X number of dollars. That is fixed. If the contrast media price goes up, they cannot afford that. This is where the generic player now is having a role or requirement, and we are seeing the encouragement from the wholesalers and whoever are the companies that are coming to play the generic role. Thank you, sir. Just a quick second question. Any possibility of getting into biologics anytime in the near future, or you would be ruling out that possibility altogether? I think we've mentioned again and again we are not averse to biologics. We looked at a long time ago, but we have looked at peptides. We are very strong in the peptide building blocks. We looked at oligonucleotide. We made all the building blocks or even the sugar molecules. We were not in the monoclonal antibodies, and we are not looking at that as an opportunity now because there are good opportunities with the volumes we've built, with the multiples of equipment we created. I think there is still enough opportunities in our field. Sure, sir. Thank you and all the best. Thank you. The next question is from Damayanti Kerai from HSBC Securities. Please go ahead. Hi. Thank you for the opportunity. My question is on generic pricing challenges you mentioned for your customers. In current inflationary environment, where on one hand we are seeing higher raw material prices and at the same time your customers are also getting squeezed on prices. As a API supplier, do you have any scope to pass on cost of higher raw material prices to your customers? Yes. In the long-term contracts what we have with our even generic customers, there is a built-in mechanism for the compensation. But of course there is also 10%, 15%, 20% business. They just would like to see whatever is the best price they can get. That's it. There, yes, there is competition, and there will be price pressure. But again, they are short-lived. Tomorrow when the raw material price goes up by another 10%, they'll be out of business. Whereas people know that whoever wants to be in the dosage form, they want an assured supplier, reliable supplier, shipping on time. This is where we have a lot of credibility in the product we play. We are not. Yes, we are seeing price pressure because of, as Nilima mentioned on the transportation cost, energy cost, post condition, the containers not being available, and all these is one thing. Second thing, what is the demand by the end user, the patient? With the pandemic, we have seen in the last 2-3 years that certain therapeutic segments, they did suffer. People did not use painkillers. People did not use not life-threatening therapies. People spent money on what is required to go through the pandemic. Now we are seeing again lifestyle medicine demand going up. I think it will be positive in the next 1-2 years. It should be in line. Okay, sure. My second question is, you mentioned most of the capacity or all of the capacity which you built is a multipurpose and then, the products which we generally target have long shelf life. Maybe the COVID-19-related products might be exception. Just a clarity, are you still supplying Molnupiravir API or Paxlovid API, or these are dried up? First of all, we are bound by confidentiality agreement, both by the big pharma. Neither we can talk about the volumes nor talk about the product. This product is so happening, we even announced it. One of the two products in the anti-COVID. They announced that Divi's is going to be one of the suppliers. We will supply as long as they need. Yes. We will manufacture as long as they need the anti-COVID products. I think I mentioned a while ago that it will never become zero. Okay. There will be manufacturing and there will be supply. Is it going to be a 20% or is it 100% or 10%? But you are right. What I said was that the equipment where we made these anti-COVID-19 drugs or where we are making the anti-COVID-19 drugs even now are produced in multipurpose equipment. If the campaign doesn't need any more for three months, six months, we will immediately switch to another product, either for the big pharma or for our own generic. Equipment capacity will never be wasted. Okay, sir. That's clear, sir. Thank you. Thank you. The next question is from the line of Dharmil Shah from Marcellus Investment Managers. Please go ahead. Hi. Thank you for taking my questions. Most of the questions have been answered. I just have one question left on the tax rate. If you see YOY, tax rate has come down to around 21% from 25% in FY 2021. Any specific reason for this change, sir? The two new SEZs that we have been expanding has come in operational. The majority of the tax benefits that we have seen is from there. Okay. This is mainly because of the incremental change from these two new SEZ units. Yes. Okay. Thank you. Thank you very much. I now hand the conference over to Mr. M. 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 very much. On behalf of Divi's Laboratories Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.