Ladies and gentlemen, good day, and welcome to the earnings conference call of Divi's Laboratories Limited for Q2 FY 2023. As a reminder, all participant lines will be in 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 half year ended September 30, 2022. 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 Perumallu Pasumarthy, General Manager, Finance and Accounts. During the day, our board has approved unaudited financial results for the quarter and half year ended September 30, 2022. 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, rebroadcast, or attributed in press or media without the 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 expectation of future performance of the company. Please note that these estimates involve several risks and uncertainties and that could cause our actual results to differ materially from what is expressed or implied. Divi's Labs or its officials do 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, sir. Thank you, Satish, for introduction. Thank you everyone for joining us for our Q2 and half-year financial year 2023 results conference call. I hope that all of you, your families and friends are in good health and keeping safe. We have gradually acquainted ourselves to adjusting to the new normal, and yet at Divi's we are vigilant about the continued existence of pandemic and are having the safety protocols in place. Now, I would like to give an operational overview. During the current quarter, we continued to witness normal operations across our manufacturing units. We continue to monitor and be aware of the extremely volatile global market scenario in terms of geopolitical uncertainties, confined mobility in China due to widening COVID spread, energy crisis in Europe and global inflation, and have set up various strategies to ensure uninterrupted supply despite the headwinds. Adding on to the progress of our previous quarter's update, we have filed multiple DMFs for our generic APIs in several of the regulated markets. Our contrast media APIs have been filed in several countries and are in qualification stage at our customers. Two of the contrast media APIs are being produced exclusively for the innovators where all qualification works are in process. Our custom synthesis business has seen very positive progress where we believe a few of our customers' NCEs will cross phase III and closer to launch in the coming times. Divi's continue to manage our operations responsibly and create a positive impact around the communities we operate. We have undertaken several CSR and sustainability initiatives during the quarter. Some of the CSR initiatives include developing the infrastructure of the communities around our manufacturing units, benefiting nearly 75,000 people. As a part of child empowerment initiative, we continue to provide child nourishment and stationery supplies in government schools benefiting approximately 24,000 students. With that, I would like to hand it over to Mrs. Nilima to share some operational and financial highlights of the quarter. Dear ladies and gentlemen, a very good afternoon to all of you, and thank you very much for joining us today to discuss the results for the Q2 FY 2023. I hope that each one of you, along with your friends and family, are in good health. On operational front, during the quarter, we had minimal to no disruptions to customer shipments and are operating with a commitment to fulfill all our customer requirements in time. The global logistics scenario has improved, and we have witnessed receding sea and air freight costs during the quarter. However, minor disruptions stemming from issues like manpower shortages continues, and we are being cautious about the inbound and outbound logistics management to keep our operations smooth and meet our customer commitments. Raw material procurement and availability issues have slightly stabilized, and prices for some raw materials marginally reduced compared to previous quarter. While forex continues to increase. Prices of some base metals, such as lithium and iodine, have multiplied several times since last year, and we anticipate this trend to persist. Some solvents like toluene continue to increase. Energy costs continue to rise, and we are taking steps to mitigate the impact of the same on our operations. Our critical supplier base is growing, and we have enough inventories to meet these difficulties. Our team is also carefully monitoring everyday developments across the globe, considering the geopolitical tensions, China's zero-COVID policy, and escalating energy prices to prevent any delays in customer shipments and ensure a stable supply chain. We continue to geographically diversify our supplier base to mitigate geopolitical risks. Moving on, I shall now take you through the key financial parameters of the quarter Q2 FY 2023. We have achieved a consolidated total revenue of INR 1,935 crore for the quarter, as against a revenue of INR 27 crore for the corresponding previous quarter. PBT for the quarter amounted to INR 615 crore and PAT of INR 494 crore. For the half year period, we have consolidated revenue of INR 4,278 crore and a profit after tax of INR 1,196 crore. Our EBITDA margin for the quarter accounted for 36% and 38.5% for half year. Exports for the quarter accounted for 87%. Exports to U.S. and Europe accounted for 68% of our revenue for the quarter and 71% for the half year period. Product mix for generics to custom synthesis is 57% and 43% respectively for the quarter and 52%-48% for half year. We have a Forex gain of INR 31 crore for the quarter and a gain of INR 87 crore for the half year. As we have lower sales during the quarter due to the change in the product mix, our constant currency growth for the quarter has been negative at 13% for the quarter, while it has been negative at 2% for half year. Our nutraceutical business amounted to INR 163 crore for the quarter and 350 crore for half year. We have capitalized assets of INR 89 crore during the quarter and INR 200 crore for half year. Capital work in progress is about INR 542 crore as at the end of quarter. As of 30th September, we have cash on books of INR 3,336 crores, receivables of INR 1,840 crores and inventories of INR 2,970 crores. Thank you. Thank you, madam. We would request the moderator to open the lines for Q&A. Thank you very much, sir. 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. The first question is from the line of Prakash Agarwal from Axis Capital. Please go ahead. Yeah. Thank you for the opportunity, and good afternoon to all. My question relates to some outlook on the custom synthesis business. As I understand, given that the share is lower and hence the gross margin is kind of little muted, if you could highlight that, some outlook for the second half and next financial year, please. Actually, in fact, our custom synthesis business looked very optimistic and probably much better than any given time. There have been several opportunities we received in the last six months where we think these opportunities are mainly in phase II, phase III, and hopefully in the near future we'll see good results from those products. When you say the bigger opportunity we had on the fast-track projects, it completely depends on whether COVID on the rise or not. The volumes cannot be fixed on year-on-year, but are dynamic, where demand would be very high or very low. Okay. Would there be any, you know, qualitative guidance on the gross margin and EBITDA margin going forward, given there has been some volatility? I think the margins, if you look at material consumption, it remained the same 36% compared with the previous quarters. Yes, there were pressures on the raw material prices, and there were pressures on products, mainly generic price of API, increasing logistic costs. Yes, these have impacted, but we are slowly. Energy costs went up very high due to forex, and we are trying to work on each of these to see how to become less dependent on them. Okay. In summary, can we assume that this quarter margins is the new normal, and then it starts picking up as and when the custom synthesis business picks up again? If you recall, in 2019-2020 we used to have a run rate of total income of INR 1,100 crore-INR 1,400 crores with a PAT of around 24%-25%. As we started taking up several of the expansion plans, it went up to INR 1,700 crores in 2020-2021 and 2021-2022, with slightly higher margins of 28%. In 2021-2022, with the fast-track project, it went to INR 1,900 crores to the highest of INR 2,046 crores. Yes, with a better margin of 31%-37% being the highest. I think in the immediate quarters, one or two we'll be facing probably the same. Going forward with these new opportunities in the Phase III and with several opportunities from the big pharmas, what we got in multiple substance opportunities, we should be able to see quite a bit growth in the. It will always take about 4 quarters-6 quarters before they can yield totally, you know, the qualifications, the secondary site doing the formulation qualification, then I think the commercial volumes will start. Perfect, sir. Thank you and all the best. Thank you. A reminder to the participants, anyone who wishes to ask a question may press star and one. The next question is from the line of Cyndrella Carvalho from JM Financial. Please go ahead. Thanks for taking my question. Sir, I just want to understand, if we look at the top line of INR 1,854 crores for this quarter, should we consider this as a base and from here onwards it will grow? Or is there any kind of shipment delays that have happened or shipment deferrals which have happened for the next quarter in this? Any color on this, especially on the generic side that you can explain? First, I think we have been always saying that we should not be looked at as on quarter-on-quarter basis. It's very difficult either in the generic or in the custom synthesis to look at quarter-on-quarter basis. We have not left any opportunities, and as I mentioned that in the coming quarters, few of the custom synthesis projects which are on, I would say fast track, they should be start doing well. Also the fast track project which we had, we do not know how the customer is looking at it, and it all depends on the pandemic and the strategies. Right. Sir, if we have to understand our new generic launches, you were mentioning to a lot of DMF filings. When should we expect these launches from a timeline perspective? Would second half be part of it or it will be largely from a FY 2024 perspective we should start looking at it? The patent expiry of these new molecules where we submitted DMF files. The expiry itself will start from 2023-2025, depending upon which ones. We will, we should start looking at because the 2024 onwards we should look at the opportunities. Sir, if we are looking at the generic business this quarter, almost around INR 870 crore level, and it is showing some bit of growth for us, given the contribution break up that we have shared. How should we look at this portion in the second half and over coming 3 years-5 years from including all these possibilities and newer launches? You think that the volume should continue to grow or you still see some bit of volume or a demand aspect still stagnant at this point in time? Post-COVID, the other regular therapeutic segment are growing, and we see everything to be either normal or growing in the generics. I'm going with the therapeutic segments. When COVID was severe, all the other therapeutic segments because of the hygiene and nose masks and less communicable. Whereas now everything is open and there is again demand for anti-infectives and anti-arthritic, anti-allergy, and painkillers. I think we see a possibility for the improvement in the generic industry, especially the cough and cold medicine, which I think is getting more in demand as the cold season has just started. This is on a year-on-year, quarter-on-quarter basis. You know, it goes down in summer and again fall and winter it goes up. That's a seasonal variation, but I'm talking about before COVID and after COVID. I think we are reaching a situation soon on therapeutic segments demand going up. Prior to COVID, whatever we had, I think we will reach that. Thank you so much, sir, and all the very best. Thank you. The next question is from the line of Neha Manpuria from Bank of America. Please go ahead. Thank you for taking my question, sir. Sir, on the comment that you made that, you know, a couple of your customers who have products in phase three, we will start seeing contribution from those in 4 quarters-6 quarters. Is it fair to assume that, you know, the custom synthesis improvement will probably come through in, you know, CY 2024, FY 2025 probably, and this is the base that of custom synthesis business we should work with till then? As I said, we have never seen so many opportunities in the custom synthesis. But earlier we used to get them in the very early on phase I, phase II. Now we are also seeing not only we have many opportunities in phase I, phase II, we have a couple of fast track phase III projects which we think will start giving in 2024. Okay. That's not the case usually. Usually you enter in a phase I, phase II, travel through 2 years-3 years, then it'll take one more year for launch, then you see. During COVID, most of the companies concentrated on anti-COVID drugs Everybody. Now once this demand has gone down, they started looking at the next immediate requirement. They looked at their own pipeline and they found some good compounds who were worth launching billions of dollars worth. They started pushing them. This is where I think the fast track project which we took and executed in one year, making hundreds of tons, it's a benchmark in the industry. Nobody from a microgram process had delivered, validated, delivered hundreds of tons in one year. This is the first time in the history in the API industry. Divi's has put that benchmark that it can be done in one year. That's why I'm confident based on again, this is all I think, to the best of our knowledge and also looking at them finally getting clearance. You know, the regulatory clearance or regulatory hurdles. We are quite optimistic at this moment. Understood. From your comment, it's fair to assume that post the fast track project that we executed last year, we are seeing more inquiries for such phase III product, you know, projects which are near phase III increasing. You know, that pipeline is probably becoming much larger than it was pre-COVID. As I said, nothing like seeing the benchmark, seeing the execution, the word spread is a very small community of 10, 15 companies who did this project to X and who did that project to Y. Naturally, I think if somebody needs volumes and quick execution, I think they are looking at us as one of them who can execute and bring the product onto the table. Understood. Sir, an update on, you know, the Kakinada CapEx. You know, what have we seen there? You know, has there been any progress? It stands same as of last time. There is not much movement from the government, and we are still waiting for the clearance. Okay, there's been no change in the status. No change. Okay. Last one, maybe one more, if I may squeeze in. What is the utilization in the current quarter? Around 80%-83%. Okay. Thank you so much, sir. Thank you. 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. Just going back to custom synthesis and what's happened quarter-over-quarter, Q1 versus Q2. Just doing rough rounding up numbers. INR 1,200 crores has gone to about INR 800 crores. We are aware, sir, that you had this fast-track project, COVID-related, but does that explain all the change quarter-on-quarter for this Q2? I don't think we should be looked at as quarter-on-quarter. It's more, I think, in generics it can be looked at, if at all. Whereas in the custom synthesis contract manufacturing, I think we should not be looking at it from quarter-over-quarter. I think sometimes it can lump up based on the delivery, based on the cold container availability. I think more to do on the availability of the containers, refrigerated containers. Got it. You're saying maybe it's not a demand issue. Is that? Sorry, I'm trying to interpret your point here, sir. It could be because of delays, and that's the earlier participant also. Were there any delay because of unavailability of, say, cold containers that led to the Yeah. Lumpiness in the business? No, it is not the lumpiness on the business. It is more of it's not having raw materials. It is not having business. It's mainly, I think, some cold container availability. Probably some of the projects are getting cleared on the certificate of analysis. It took a little longer time for them. It has nothing to do with our regular business in the custom synthesis other than the fast-track project. Sir, anything you can quantify there as how much of that could be booked in the upcoming quarters? Any quantum. I'm not looking at exact crore number because that Q-O-Q is a big slip, right? It can't be just explained just by, you know, fast track going to zero, which you have flagged already last quarter. We are aware of that. The quantum is where there is some surprise. Nobody asked me when the fast track, because of fast track project it went to INR 2,500 crores. You know, nobody asked me why it went up. You know, is it only the fast track project or is it also some other custom synthesis project? I think it's very difficult to explain on quarter-on-quarter basis. I can tell you that 2023 and/or 2024 is going to be a year where we'll have a lot of opportunities in custom synthesis happening. Got it, sir. That's helpful. Second question is on the generic API and nutraceuticals. Generic API on a low base, I think we have grown. If I do like a one or two-year CAGR, it seems to be still flat. If you can talk about industry, either price-volume dynamics. In the past you have mentioned that we are not losing volume share, but we have seen pricing pressure. If you can just update us on what has happened in quarter two, sir. Thank you. Here, I think it has nothing to do with losing any business from our side. It is the price pressures still are there. You know, the two big pharmas who are our competitors, I think, for them, it's not very far from at least one of them going to be, what we hear is that they may be leaving. In such a case, probably we'll have a large chunk shifting to our side as we already expanded and we have plans to expand further. Okay, sir. Thank you and all the best. Thank you. Thank you. The next question is from the line of Sameer Baisiwala from Morgan Stanley. Please go ahead. Thank you so much. The first question is on the custom synthesis. People have already asked before. For the new projects, excuse me, for the new projects where you are expecting some fast track, you know, in 4 quarters-6 quarters, what would be the size of these opportunity? I mean, is it comparable to what we had done in the COVID with the COVID products, or is it going to be different? We believe it's not for COVID. I think I did mention that. Because pre-COVID, they were developed. The COVID took over, and only the COVID drugs were promoted. Now, I think these drugs are not of COVID. How big is the dream? I'm not dreaming. The dreamer is the Big Pharma. We think they are quite big compounds. Okay. You think it's a big compounds. These are not emergency use authorization type of products. These are more of a regular NDA approvals, right? I cannot comment on that. The reason is that I think if I say a little bit, you'll be able to guess what they are, then the Big Pharma will come after me. I don't think I will lose business, but I'll lose my pace of maintaining the confidentiality. Till now, the credibility has been that we maintain the highest confidentiality. We don't even talk about the contract being existing. We don't even talk about which customer want. No worries, sir. Sir, you cite for the generic API business, the opportunities from patent expiration from 2023 to 2025. I'm just a little curious because every year, $15 billion-$20 billion worth of drugs lose patent protection, and it's not going to be too different for those three years. You know, you should be having these as ongoing opportunities rather than for those three specific years. If you can just talk about that. Sir, are you there? Members of the management. We request all the participants to please stay connected while we reconnect the management. Ladies and gentlemen, the line for the management is reconnected. Thank you and over to you, sir. Sameer. Sir, this is Sameer here. I had asked a question on the generic API. Do you want me to repeat the question? Can you please? Yeah, sure. The question was that, every year, we have $15 billion-$20 billion worth of patent expiration, and that probably defines an API opportunity for companies such as yours. You are highlighting those which are, you know, from 2023-2025. Anything that's more specific for those years, your thoughts on that. I think we have never disclosed. We said that 2023-2025, there is $20 billion expiry of the patents. We were developing process. We have completed that. We have filed a few drug master files, and we are in the process of filing the remaining. Soon, some of the qualifications by the customers will be completed. As the patents expire, they will be able to launch, and we will be able to continue supplying the API. Okay. Sure. Sir, with your permission, let me ask just one final question. It's on the Sartan opportunity. If you can just share what's the update over there. On the sartan, we became more stronger because we are backward integrated and no other sartan manufacturer is backward integrated. We make our own ortho-tolyl carbonitrile, which is the starting material. They're using a new technology by what is called photochemistry. People do not even understand photochemistry, but we produce 100 sartans a month using such technology where we have an advantage. And these raw materials are common to all sartans. This is what puts us in the forefront of the sartan. We are already leaders in two sartans. We have a custom synthesis project of sartan, which we, where qualification is complete. Another big pharma sartan, again, qualification is complete, commercial quantity is already manufacturing is under progress. With the two of sartans from the big pharmas and one sartan, two sartans from our own, that leaves only two more sartans in generic that are where qualifications are in progress. I think that would complete the circle of sartan. Okay. Thank you so much. Thank you. The next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead. Tushar Manudhane, your line is on talk mode. Kindly go ahead with your question, please. Yeah. Am I audible? Yes, sir. You're now here. Sir, again, we are unable to hear you. If you can, change the mode of your device. Is it better? Yes, sir. Just on the nutraceutical business, if you could share the capacity utilization? We are about 80% on the nutraceutical utilization right now. With whatever the capacity which we have doubled over past one year, right? Yeah. Yes. The sales run rate has been pretty stable at about INR 155-INR 160 crores. Anything we're missing out here? It depends on the combination of vitamin D, vitamin A, you know, our astaxanthin, beta carotene, the combinations of what campaigns we take up. I think that is one thing, and then the customer demand is another thing. Okay. Receivables also have been sharply down over the past six months. In line with reduced custom synthesis opportunity? What did you say? I'm sorry. The receivables have also been down over the past six months. Which is a good thing. Receivables being down is a good thing because I think the sales are comparatively down than the earlier, and we are again back to what we were in the 2021. Okay, sir. Thank you. That helps. The next question is from the line of Surya from PhillipCapital. Please go ahead. Hello? Hello. Yeah. Hello? Surya, you may please proceed with your question. Okay. Yeah, thanks for this opportunity. Sir, you have been indicating about the contrast media as a kind of a key growth driver for us in the near future. Can you give some more clarity about how many products that currently is there in your portfolio as contrast media? And you also mentioned recently that for one product you got a tie-up with a big pharma, and that could be the true growth driver in the near future. Could you please provide some clarity about that? And how big is that contrast media as a segment for you to target? First, I think we need to understand what are our strengths to enter into contrast media, to be competitive and to sustain. Everything is iodine. Right. Contrast media is based on iodine. Iodine, what used to be $15 a kilogram, today is about $80-$90 a kilogram. Most of the cost of contrast media is iodine. This is where we developed technology to recover iodine, both organic, inorganic, from our waste streams and became very cost effective. This has attracted and given us more opportunities into the contrast media. For two of the contrast media, one with big pharma, another one I don't know whether I should also call big pharma, but they are the largest in the contrast media. We have completed qualifications and are continuing the production. We should see good growth, good sales. Sir, is it possible to share that the contrast media as an opportunity, whether it is in the kind of, like, $1 billion-$2 billion kind of a global market and we are trying to have a kind of a bigger pie of that or bigger picture about contrast media, if you can? I think there are two kinds of contrast media. One is for the CT scans. Yeah. which will check where are the blocks and what's happening in our blood vessels. The second one is which is used for MRI. We have not entered that before, now we are entering into the contrast media of MRI. These are called gadolinium compounds, gadobutrol, gadoteridol. These are all very specialized chemistry which uses gadolinium. Now, we have mastered the iodine-based, and it is not $1 billion, $2 billion, it's several billion dollars. The contrast media. Now, no doctor wants to give you any treatment without a CT scan. Correct. Similarly, you go for neuropathic pain or you get any pain in the brain. Correct. They want to immediately take an MRI, and MRI needs a gadolinium compound. We understood this. We have developed some process for that, and now we are in discussion with the leaders in the contrast media. We should be able to soon have, I think, sample approvals and then qualifications and all that. It'll take more time, it's not just contrast media iodine-based, but there are also another set of media that's called gadolinium, which are for the MRI, which is probably bigger, much bigger market. Sure, sir. Second question is about the, let's say, the new units that we have created over last two-year period. As a kind of a part of our expansion projects. How many units have already been currently under the commercial manufacturing, and how many would be, let's say, have not yet seen commercial manufacturing as of now because of the regulatory clearance or something like that? Most of the units have already commenced. Two units, one is small volume, number of products at a time, hypotensive compound that is under completion. Another one more block that is for commercial compound, where that's why you are seeing the INR 500 crore of capital work in progress. That is other than these two blocks, everything else is done. Even the contrast media, the commissioning, the operations? When you say commissioned, it is validated. Commercial commissioning. Production started. Okay. Just last one question, sir. Rather two points in this. One is that, as per your sense, there was a kind of a component of this COVID product in this quarter as well as in the corresponding previous quarter. As for you, what is the like-for-like growth? And the second point is that, have you seen any kind of a progress in terms of the new contract addition or the project addition because of the kind of the disturbances that we are witnessing in the European world or, let's say, supply disruption coming from the even Chinese segment? Definitely, there is a global inflation at all-time high, confined mobility in China due to widespread of COVID, energy crisis in Europe. You know- Yeah. We just came back from CPHI, where several of our customers they are complaining at homes there is no either connection or there is a premium price for the gas or oil. They all have, you know, loss for the coming winter. What used to be like $50 a month, now it is about $500 a month for the heating or cooling. An increase in logistics is another thing. I think this will play a lot in the coming winter as well as following the winter. Is it fair to believe, sir, this way that since Europe is facing all these kind of a problems as you are indicating, majority of our export happens to Europe, and that could be one reason of lower customers and business operations this quarter? Number one, which I didn't want to share really, but I think the indication that sourcing from China, either generic or the Big Pharmas for the custom synthesis, is going to be very difficult. One, they want to reduce their dependency, where I think confined mobility in China and all of a sudden stopping and, geopolitical, which I don't want to bring it up. I think these are causing every pharma to look outside, either in Europe, U.S. or India. In Europe and U.S., there's not enough capacity to produce anything. India will have a lot of opportunities in the custom synthesis. Irrespective of what the general conditions are in Europe or U.S.A., energy crisis and a few others, people need medicines. That cannot be ignored. We see the demand either it will stay as is or it will go up. We don't see any coming down. Okay. No greater sign of really significant additional business that you're finding. In the custom synthesis, I did mention that of some two fast-track projects and opportunities, phase three and several opportunities in the early stage. That's all custom synthesis. Generic is different. It's our own. Okay. Where we are working on the $20 billion project between 2023-2025. Okay. Sure, sir. If you just lastly you said, like-for-like basis, what growth that you would have seen in the quarter? This is my last question. Pardon? Like-for-like basis without this COVID supplies, what growth that you would have seen, sir? We cannot discuss on quarter-to-quarter. I think it's very difficult for us to discuss because, you know, either generic or custom synthesis, some are driven by the customers, some are driven by, I think, this COVID or container availability. It's very difficult to say. Okay. Sure, sir. Thank you, sir. Thank you. The next question is from the line of Deepak Mehta from Capex Investment. Please go ahead. Thank you. Go ahead. Deepak Mehta, your line is in talk mode. Kindly go ahead with your question, please. As there is no response from the current participant, we move to the next question from the line of Ritwik Sheth from One-Up Financial. Please go ahead. Yeah. Hi. Good afternoon, sir. Thank you for the opportunity. Sir, I have two questions. By the end of FY 2023, we will be close to INR 5,000 crore of gross block. Would it be fair to assume that, on current pricing, we would be around our peak revenue run rate would be around 2x sales as we have been guiding in historically around 2x asset turnover ratio? Could you please repeat the question again? By the end of FY 2023, our gross block would be around INR 5,000 crore. Would it be fair to assume that peak revenue run rate from the gross block would be approximately INR 10,000 crore? Well- At peak utilization. One is the dream. Second is making the dream work. The third is dream becoming true. I think, it's very difficult to comment on, whether it is dream or true. Somewhere in between. Okay. Sure, sir. My second question is related to Kakinada CapEx. Assuming that we were to get clearance from the government, you know, what would be the timelines in terms of starting the CapEx and then commissioning? If you could throw some light on that. I think we have been waiting for 6 months-9 months for the final clearance. I have no say so on when they will clear, because we had all statutory regulatory clearances. Okay. Accepting the clearance from the state government as a final tick off. My question is not related to the approval. I'm saying that hypothetically, if you're getting approval, say, tomorrow, you know, we would start constructing the facilities. What would be the timelines to get it commissioned from start till the end? Would it be 1 year, 2 year, or a period more than that? I think we should complete within one year and start seeing the results starting from the second year. Because again, once you complete, you have to again re-qualify, whether it's our expansion of existing products or new products, we have to validate, re-qualify, and customer has to again give clearance. I would say fair two to three years. Okay, sir. Thank you and all the best. Thank you. The next question is from the line of Nikhil from SIMPL. Please go ahead. Hello. Yeah. Good afternoon. Am I audible? Yes. Yeah. Hi, sir. Two, three questions. One is one clarification. You made a statement that one of the competitors or two players in one of the products it would be going out, one player would be going out. Was it with respect to nutraceuticals or with respect to the API business? During the call you meant, you made a statement that there are two competitors and one of the innovators would be going out. Was it with respect to nutraceuticals or API business? It is in the nutraceuticals. I didn't say the company will go out of business. What I meant is that they may drop some of the products, you know, for nutraceutical, as there were severe price pressures. It may not be of interest to them to continue because they always may have better products to produce in the European/U.S. context. This is what I commented. These companies are too big and they're too diversified, and they have excellent profit-making products, so they don't have to hang on to some products in the nutra that, to continue. We hear, you know, when you say hearsay, we don't know what is the truth in it. We hear that it may not be of interest to them and some of these nutraceuticals they may drop. This is what we heard, so we are ready to take any such opportunity. Okay. Thanks for the clarification. Now two questions, sir. Like, if we follow our last call, like 8 quarter-10 quarter calls, we've done a lot of work on backward integration and improving the yields in our products and improving our cost structure. Still, if I look at our margin profile, this quarter and even adjusting for the one-off products, we are around that 33%-34%, adjusting for the other income. Is it like the cost pressures in the P&L are so high that the benefits or the work we have done on backward integration are not completely reflecting in our P&L as of now? Because of backward integration, we are able to maintain the profitability of what we were in the 2019/2020 at bottom line, 23%-27%. If we did not take up the backward integration, had we been totally dependent on the supply for the raw materials from China, which increased prices anywhere from 20%-40%, it would have troubled us in even staying in business. Now, there are two things that happened because of our backward integration. One, assurance of supply, because in some of the provinces, China just closed the world borders. No shipment of starting materials. We would have been out of our generic business. Two, they just increased the prices 20%-50%. There's no way we can accommodate them. I think this is the benefit we got from the. In spite of the energy cost increase, in spite of other costs increase, we are able to maintain profitability before the fast-track project. Also, I would like to add here that since we have taken up the backward integration and also supplier geographical diversification, our dependency on China this half year has reduced by 20% compared to the previous year's half year. Thank you. Before we take the next question, a reminder to the participants, please limit your questions to two per participant. The next question is from the line of Mithun Aswath from Kivah Advisors. Please go ahead. Yeah. Good afternoon, sir. Just a little bit more broader question. I wanted to understand what would your CapEx plans be for the next couple of years since you're sensing large opportunities on the generic side? Because we've seen quite a lot of CapEx in the last couple of years. Would your next couple of years, what kind of CapEx you would be looking at? Number two is also on that portion you talked about on the starting material side. Do you see the backward integration that you've done is coming to some sort of leveling off? Or is there an opportunity to do a lot more there? Those are the two questions. The first question, I think, we need to expand in the next 2 years-3 years to meet the requirement of some of the fast-track projects we are entering now because it depends on how fast the fast-track project needs are. Is it few tens of tons or few hundreds of tons? Two, also the new contrast media further, as I mentioned, two MRI, few MRI, few compounds we are developing. Once we are successful in developing the chemistries and also qualifying and validating our process, then definitely we need capacities to produce them. I think this is where we see a big opportunity and we need to expand. What's your second question? Sir, I wanted to know in terms of what would be approximate CapEx that you'd be looking at over the next two years? No, your second question was on backward integration, what we did with few compounds. Is it correct way to stay in business or do some more? I think what we are doing is now coming up with new technologies in the backward integration, like the flow chemistry, vapor phase chemistry, liquid-liquid, solid-liquid, electrochemistry. This will make sure that our dependency on n-butyllithium and other metals and solvents will come down. We have introduced new swing technology whereby several of our swing raw materials, solvents could be reused. These are all the things we are way ahead of other companies, whereby we should be efficient and everybody's talking about energy conservation, green chemistry, carbon footprint, less emissions, and we are ahead of them. Thank you. Ladies and gentlemen, due to time constraint, we take that as the last question. I now hand the conference over to Mr. Satish Choudhury for closing comments. Over to you, sir. Thank you all for joining us today for the earnings call of Divi's Laboratories Limited. In case you need any further clarifications, please reach out to our investor relations. Thank you. Thank you. Ladies and gentlemen, on behalf of Divi's Laboratories Limited, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.