Ladies and gentlemen, good day and welcome to the earnings conference call of Divi's Laboratories Limited for Q4 FY 2025. 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 touch-tone 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, 31st March 2025. From Divi's Lab, we have with us today Dr. Kiran S. Divi, Whole Time Director and Chief Executive Officer; Ms. Nilima Prasad Divi, Whole Time Director Commercial; Mr. L. Kishore Babu, Chief Financial Officer; and Mr. Venkateshra Perumalu, General Manager, Finance and Accounts. During the day, our board has approved audited financial results for the quarter and year-ended, March 31st, 2025, 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 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. Let me draw your attention to the fact that on this call, our discussions 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 Laboratories Limited, 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. Kiran S. Divi for opening remarks. Over to you, sir. Good afternoon, everyone, and welcome to Divi's Laboratories Q4 FY 2025 Earnings Call. Thank you all for joining us today. I hope you and your families are safe and in good health. As we convene to review our fourth quarter and full FYM financial performance, I'd like to take a few moments to reflect on our broader operational progress and strategic initiatives as we wrap up fiscal year 2025. This year has been marked by significant external volatility, geopolitical uncertainties, persistent global supply chain constraints, and continued rising pressures, particularly in our generics segment, due to heightened competition. These challenges tested our resilience and demanded nimbleness in how we operate. I am proud to share that our teams across the globe rose to the occasion by implementing targeted pricing strategies, process optimization measures, and enhancing our responsiveness to market dynamics. Hence, we were able to ensure seamless and timely delivery of product to our customers without ever compromising on quality. This operational discipline has enabled us to complete FY 2025 stronger, more agile, and better prepared for the future. Let me now walk you through the key performance of our key business verticals. Starting with our generic business, while pricing headwinds remain a persistent challenge, we have successfully maintained stable volumes in all our core products. The competitive intensity in the market continues to be high. However, Divi's sustained its leadership position by constantly investing in process innovation, operational efficiency, and long-term capability and capacity building. These efforts reinforce our position as a dominant player in the industry. Turning to our custom synthesis segment, we are witnessing strong and sustained momentum in this business. Customer engagement levels remain high, with a healthy uptake in RFPs and regular site visits, reinforcing our stature as a partner of choice in the CDMO space. A significant recent highlight was the signing of a long-term manufacturing and supply agreement for an Advanced Intermediate with a leading global pharmaceutical company. This partnership not only strengthens our presence in custom synthesis space but also opens new avenues for our innovation-led growth. Coming to our peptides business, our peptides business is gaining significant traction as the global demand for novel peptide-based therapies, including GLP-1s, GIPs, and GLP-2 analogs, continues to accelerate. To address this rising demand, we have made strategic investments in both solid phase and liquid phase synthesis capabilities. These investments will be instrumental in expanding our offerings and sustaining our competitive edge in this rapidly evolving therapeutic area. Our progress in the Contrast Media segment remains steady and encouraging. We continue to invest in expanding our capacity and capabilities in this high-growth market as we work towards becoming a leading player in this space. On the manufacturing front, I'm pleased to share that construction and commissioning activity at our Unit 3 facility near Kakinada are progressing as per schedule. Phase correction has already commenced, supporting our backward integration strategy and enhancing our capability to manage input costs effectively. In parallel, we continue to invest in next-generation technologies such as continuous flow chemistry and biocatalysis, both of which are integral to our strategy for sustainable and scalable small molecule manufacturing. Beyond our business operational achievements, we remain deeply committed to create long-term value for our communities we serve. Our corporate social responsibility initiative this quarter continues to focus on core areas of education, healthcare, and rural empowerment. I'm proud to share that these efforts have positively impacted over 1.3 million lives this year alone, truly a statement to our belief that inclusive growth is the foundation of sustainable success. In conclusion, this quarter underscores our continued focus on strengthening our fundamentals through capacity expansion, technological innovation, and proactive risk management. Despite the complex global environment, our integrated efforts across generics, custom synthesis, peptides, and emerging growth areas, supported by resilient procurement and logistical strategies, place us in a strong position to capitalize on future opportunities and enhance our competitiveness in global markets. Thank you once again for your time and continued support. I will now hand over the call to Ms. Nilima Prasad Divi, who will walk you through the financial highlights for Q4 2025 and provide an outlook for the full year ended March 31, 2025. Thank you. Good afternoon, everyone, and welcome to Divi's Laboratories Q4 FY 2025 Earnings Call. It's a pleasure to connect with you today, and I appreciate you taking the time to join us. I hope you and your families are in good health and high spirits. Before we dive into the financial performance for the year, I'd like to begin with a detailed update on our supply chain and logistics operations, areas that have played a critical role in ensuring business continuity and customer satisfaction in a volatile global environment. Let me start with the procurement and raw material sourcing landscape. This quarter, we witnessed relative stability in raw material pricing, which is an encouraging sign given the fluctuations seen in the previous quarter. Our multi-source procurement strategy, spanning suppliers from across the U.S., European Union, Middle East, and Asia while promoting domestic sources, has continued to serve us well, ensuring consistent availability of key inputs and insulating us from regional disruptions. This geographical diversification remains a cornerstone of our supply resilience. However, while pricing remained stable, global transit times were notably impacted by persistent disruptions in maritime routes. Specifically, the security situation in the Red Sea has initiated widespread rerouting of cargo vessels around the Cape of Good Hope in South Africa. This alternate route has extended lead times for shipments from both the U.S. and Europe by approximately two weeks- three weeks, creating ripple effects across planning, production, and cost structure. In response, we have taken several proactive measures. Our teams have intensified inbound logistics planning, optimized safety stock levels, and worked closely with suppliers to implement contingency sourcing models. These efforts are designed to mitigate delays and ensure continuity of raw material inflows, thereby minimizing any operational impact. Looking ahead, we expect this proactive approach, combined with continued price and supply stability, to keep our procurement environment favorable over the next two quarters. Shifting focus to outbound logistics, the Red Sea disruptions have not only affected inbound shipments but have also significantly influenced our global delivery timelines. Vessel diversions and increased congestion at transshipment ports have resulted in extended shipping times and elevated freight costs, especially to key markets such as the European Union, the United States, and Latin America. To tackle these challenges, our logistics and supply chain teams have adopted an active customer-centric approach. We are working in close coordination with reliable freight forwarders, securing container space well in advance and maintaining regular transparent communication with customers through timely sea trade updates. This enables our partners to plan their inventory and production schedules with greater confidence despite prevailing global uncertainties. We have also enhanced our tracking capabilities, allowing us to monitor each shipment closely and respond swiftly to any unforeseen disruptions. This end-to-end visibility has significantly improved our service reliability and allowed us to maintain a high degree of fulfillment assurance across our markets. Looking ahead to the first quarter of FY 2026, we anticipate that sea freight rates will remain broadly stable. However, we do expect air freight charges to gradually normalize in alignment with the revised transit expectations and improve route predictability. Our logistics team will continue to monitor these trends closely and make tactical adjustments where necessary. In conclusion, despite an increasingly complex global trade environment, Divi's Laboratories remains well-positioned to navigate these challenges. Our continued emphasis on strategic sourcing, agile inventory management, and reliable logistics execution ensures that we are able to support our customers efficiently without disruption while preserving operational agility and cost-effectiveness. I will now provide you with an overview of financial performance for the fourth quarter of financial year 2024-2025 and the financial year ended on 31st March 2025. We have achieved a consolidated total income of INR 2,671 crore for the current quarter, as against a consolidated total income of INR 2,382 crore for the corresponding quarter of previous year. Profit before tax for the current quarter is INR 864 crore, as against a PBT of INR 713 crore for the corresponding quarter of previous year. Profit after tax for the quarter is INR 662 crore, as against a PAT of INR 538 crore for the corresponding quarter of previous year. For the current quarter, we have a forex gain of INR 10 crores, as against a forex loss of INR 2 crores for the corresponding quarter of previous year. For the year 2024-2025, we have earned a consolidated total income of INR 9,712 crores, as against INR 8,184 crores for the previous financial year. PBT for the current financial year is INR 2,916 crores, as against INR 2,163 crores for the previous financial year. PAT for the current financial year is INR 2,191 crores, as against INR 1,600 crores for the previous financial year. For the current financial year, we have a forex gain of INR 48 crores, against a gain of INR 30 crores for the previous financial year. Material consumption remains at about 40% of the sales revenue for the current as well as the previous financial year. Our constant currency growth for the current financial year has been at 18%, whereas it was - 2% for the previous financial year. Export for the current financial year remains at about 88% of the total sales revenue. Export to Europe and U.S. accounted to 73% of the total sales revenue for the current financial year, and 70% of the total sales revenue for the previous financial year. Product mix for generics to custom synthesis for current financial year is 46% and 54%, respectively. Product mix for generics to custom synthesis for current quarter is 49% and 51%, respectively. Our nutraceutical business amounted to INR 781 crore for the current financial year and INR 205 crore for quarter-ended 31st March 2025. We have capitalized assets of INR 560 crore during the current quarter, of which assets capitalized for Kakinada project amounted to INR 337 crore. We have capital work in progress of INR 1,022 crores as of 31st March 2025, of which Kakinada project accounts to INR 562 crores. Total amount spent on Kakinada project, including assets capitalized and advances given till 31st March 2025, is INR 1,497 crores. As of 31st March 2025, we have cash on books of INR 3,696 crores, receivables of INR 2,855 crores, and inventory of INR 3,033 crores. Thank you. Thank you, madam. With this, we would request the moderator to open the lines for Q&A. Thank you very much, sir. We will now begin with the question and answer session. Anyone who wishes to ask questions may press star and one on their touchstone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only hands while asking a question. Also, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Surya Narayan Patra from Philip Capital (India) Private Limited. Please go ahead. Yeah, thanks for the opportunity. And congrats for the good set of numbers in the difficult time. My first question is on the growth number that we have witnessed on the generic business side. Interestingly, after kind of a two-year period, we are seeing a kind of a strong momentum in the generic business, both sequentially as it is YOY. And similarly, if I just comparatively see that, even the margins also had seen a similar improvement. The exit rate for the quarter is strongest in the last two-year period. So how should we see this, the generic growth, whether it has been driven by the price rise or what, and whether that has contributed to the overall margin scenario here? As I have mentioned during my speech, right now, the generic performance itself is at a high competition level, whereby we have continuous pricing pressure in the generic side. As market share continues, we are still a dominant player in the market, and we continue to play that role in terms of new molecules that are coming off patent. As and when they come off patent, we will start producing them and slowly start building our share. Okay. In regards to the margin scenario, sir, we are seeing the exit rate for the quarter in terms of either the gross margin or even the EBITDA margin, it is, I think, one of the strongest numbers over the last two-year period. How should one think going ahead? Is it just a quarter-specific product mix that is driving this number, or how should one think going ahead to think about the margin scenario? This is mainly to do with the product mix that we have, and it will keep changing quarter on quarter. I would recommend looking at it on a yearly basis rather than just focusing on one quarter. Okay. Just last question from my side. In the last one-year period, obviously, we have seen a significant rising trend in the RFQs for the CDMOs generally. Obviously, that was supported by the potential implementation of the Biosecure Act, China Plus One, and those kind of things. Now those kind of things are now in the back stage. Any practical change in terms of your RFQs or the customer engagement, although you have indicated there is a heightened engagement that is still there? Since we are completing the financial year, any commentary that you can provide for the next year in terms of your outlook or guidance or anything on that front? Firstly, we have always been in the CS business, in the custom synthesis business, right from the inception. It's not something that we started after China Plus One or the Biosecure Act has started. Our business was there. We've been in this business even before anyone has ever been in it. For us, RFQs, RFPs coming in on a continuous basis is always there. Okay. With the Biosecure Act or China Plus One, we are seeing a little more than what we have seen before. We have several products in the pipeline. Some are going through R&D phases. Some are in pilot fields right now. It's hard for us to put a finger on it because of confidentiality. What I can say is Divi's is very strong in the custom business as well as the generic side of the business. Yeah, I have a couple more. I'll come in the queue, sir. Thank you. The next question is from the line of Neha Manpuria from Bank of America. Please go ahead. Yeah, thanks for taking my question. My first question, just understanding the gross margin expansion that we have seen, while I understand you mentioned the product mix, but has the backward integration, given that Kakinada has just commissioned, has the backward integration from Kakinada started already helping gross margins, or would that take time to reflect, and that's something that we should build in going forward? Kakinada, definitely, we started in January, the production, and the backward integrated material has slowly come into the product. We will see the benefits going in the future as phase I, and slowly we will start constructing phase II where we will add additional blocks. Definitely, we will see benefits that are coming in. Kakinada, more than creating space or controlling our price, the main reason of having Kakinada is for having continuous supply of our own raw materials and our critical starting materials. To avoid any disruption in supply for us to have continuous supply for our customers is why Kakinada also started, apart from pricing and controlling our impeding profiles and several other factors. If I was to think about Kakinada's impact on earnings, would it be fair to assume that it will take a couple of quarters for Kakinada to become like an EBITDA neutral from a cost versus the benefits from Kakinada? Would that be right way to look at it? I would rather, instead of rather looking at Kakinada as a single unit, because see, the raw material, the starting material is producing, goes straightly into one of the units where GMP is being produced, material is being produced. We have to look at the molecule as a whole. We cannot look at the molecule into separate units and then break it up. As a whole, yes, there will be a benefit. I would look at it more as a company and then look at the molecule being manufactured in different areas. My second question is just understanding our peptide site capabilities. Just wanting to know if you've expanded these capabilities to non-GLP-1 areas as well. Just an extended question on the capabilities, if I look at presence across other modalities, are we targeting ADCs or even nucleotides, any updates that we can give on the capabilities that we are developing in terms of client interest on custom synthesis? Could you just repeat your question again, please? First, on peptides, do we have capabilities that extend outside of GLP? Are they extending even to non-GLP areas? Also, what about, are we focusing on ABCs or even nucleotides? When should we start seeing there? Are there investments that we are making there based on client RFPs? I mean, to answer about peptides, we are right now looking at peptides only for manufacturing for the innovators and looking at their pipelines and working with them. As you know, Divi's is very strong in manufacturing their individual peptides and protected amino acids. That is how we have entered, which we have entered about 18 years ago. That is why we are now entering into manufacturing fragments, either by solid phase or by liquid phase. I cannot comment more on these because I am bound by confidentiality, so I can only talk about that we are working with several customers and at several phases right now. Divi's has actively invested in both solid phase and liquid phase so that we can, as and when required, support customer requirements. Coming to your. ABC. ABCs and molecules. Yeah, sorry. It's still in the preliminary phases right now. I cannot comment too much on those molecules. Got it. Thank you so much. Thank you. The next question is from the line of Dr. Kunal Dhamesha from Macquarie. Please go ahead. Hi. Thank you for the opportunity. One more strategic question. Several of the large pharma companies in the U.S. have announced large capital expenditures to kind of reshore the manufacturing. How are you viewing this announcement in context of the overall industry growth rate? Specifically, do you think any read across for Divi's since we kind of work with all these large pharma companies? Recently, because of this, have you seen any change in conversations that you are having with these companies? As you know, Divi's is in both custom synthesis. Custom also includes peptides, or if you look at we are in contrast media, generic. Any business related to custom synthesis is based on a long-term contract. It is not like we just jump in, make something, and then we forget. We have long-term multi-year contracts with structures in it. We are seeing new opportunities in the pipeline. We do not see any issues at this point, but if something arises, of course, we will definitely know. As of now, we do not see anything. Sure. Second one, on the GLP-1 portfolio that we have with multiple innovators, would you say that that portfolio would extend beyond peptide GLP-1s? We would have some non-peptide or maybe small molecule GLP-1s also in the portfolio. Divi's is very, like I told you in my presentation, Divi's is working on GLP-1s, GIPs, GLP-2 analogs, and on small molecules. We are very active with different customers at different phases. They are at different phases in our development or in our advancement. Lastly, if I can just ask one more, but on the Kakinada plant, I think we are more or less done through phase I. One part is how much we can scale here, how many phases we should expect, whether it is a three-phase journey, five-phase journey. In terms of whatever phase I that we have commercialized, what proportion of that is as percentage of total phase one capacity? Kakinada is a total of 500 acres. In 500 acres, we have occupied about phase I. We have used 200 acres. We have built production blocks, about seven of them, which will help us in taking care of certain raw materials so that it helps us in our backward integration. Apart from this, it will also free some of our existing blocks in our unit one and unit two. Thereby, we can add certain molecules and manufacture GMP products while Kakinada goes through its own regulatory phase. We still have 300 acres. Based on the requirement in the market and opportunities we see, we will expand. It can be either in two phases. Maybe it will be phase II and phase III, or it will be in one phase. We may use the remaining 300. Everything is based on the opportunities we have. When, for example, in a CS molecule will come to life and we need space immediately, of course, we have to invest and move forward. Sure. Thank you and all the best. Thank you. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Yeah, good afternoon. Thank you for taking my question. Just the first one on the announcement in April and also from last April, right? Similar kind of amounts, like INR 700 crore odd. But that's a long-term supply agreement. This is, again, a long-term supply agreement. Can we just compare and contrast? I don't know whether you put out anything on the last year, but this year was advanced intermediates. If you could help us, I know you're not going to call out the names, but just want to understand why not API in this one. Just to compare and contrast the type of announcement, these are the largest two announcements we have done. Just want to understand some qualitative color. I mean, that's quite a difficult question because I'm bound by confidentiality, so it becomes very, I mean, both are related to CS projects. Yes, the recent one is an advanced intermediate. The one before, all I can say is it is an active API. Helpful, helpful, Kiran. In opening remarks, you alluded to or just to the latest announcement. You said it has opened new avenues of growth. Can you double-click? Could you repeat your question, please? Kiran, when you were opening the mark, when you talked about the second announcement, you said that this has opened more avenues of growth on the innovation side. What do you mean? Within the peptide division, or if you look at our existing new chemistry development, like continuous flow chemistry, this is a new thing that several customers are looking at. Also on biocatalysis, where we have been investing heavily, and this is where most of the innovation and new molecules are coming from. That's what I meant by new opportunities. Understood. Thank you. Just the second question is on the financials. If I look at earlier fiscal 2025 versus 2024, EBITDA margins have gone from 29%- 32%. Gross margins have been flat, but the biggest delta has come from other expenses, which is the exposing range I am talking about, which has come down by 250 basis points-300 basis points. If you could explain what is driving, and that has been the case for the quarter as well. I just want to understand what are we doing right to keep other expenses actually in fact declining for the year when we had like 18%-19% growth. Can you just repeat your question again? It was not pretty clear, the words. Mr. Srinivasan, I would request you to use your handset, sir. The voice is muffled. Yeah, yeah, sure. Sure. The question was on other expenses. Other expenses as a percentage of sales last year was 17%, and this year was 14%. This is despite we having 18% constant currency growth. Just want to understand what is driving this operating leverage. I'm sorry, ma'am. You are not audible. Oh, I'm sorry. I was speaking at a phone. I would say the major drive behind it could be quite a few things. It's not just one thing that has led to the other expenses being the major. It could be mainly from the point of view of the raw material expenses. Yes. It could be from various expenses. It's not just one expense that I could put my finger on. We did have higher repairs on the older plant and machinery, considering some of the units are quite old, about three decades old. Besides that, there has been an increase in freight and travel expenditures, as well as the environment management expenses. Sorry, maybe the costs have gone down, not gone up. So I'm just confused. These are the ones that have made all the changes. That is what I was trying to say. Understood. Lastly, sorry, but just any guidance for the revenue and EBITDA for fiscal 2026? Thank you. The revenue guidance, I would say, as I have said earlier, we would always look at double-digit growth, and we would always assume, and our work would always be towards making sure the organization grows at a consistent pace of double-digit growth. Thank you. Thank you and all the best. Thank you. A reminder to all the participants to kindly limit their questions to two per participant only. May we also request all the participants to use their handsets for optimum audio quality in the conference? The next question is from the line of Amir from JM Financial. Please go ahead. Yeah. Thank you for taking my question. Most of the questions are answered. One question, incremental question on GLP-1. We said that we are only working with innovators. The next year, which we generally have opportunity in the semag local, which is opening up, are we not going to participate in that opportunity? Number one, like I said, right, we are working with innovators on several phases. As of now, we are not looking at working with GLP-1s at the generic space. Any rationale behind it? Is it because you are bound by the contract with the innovator, or you believe that it's not lucrative enough to enter? See, as of now, I'm bound by confidentiality. So whether I'm producing for innovator, I mean, based on our knowledge, know-how, and everything, we believe we are best suited for now to work on innovative molecules in the GLP space. Sure. For the innovator space, is it possible for you to, because the products have been there in the market for a while now, is there any wallet share being committed to us by the customer, or how are we thinking about that? Like I said, because we have long-term supply agreements with several customers, apart from the ones which are also in the market, you also have to understand there are several molecules in the pipeline at various phases: GLP-1s, GIPs, GLP-2s in place, which are in various stages of development where we are active. We will see when opportunities grow, we have long-term contracts in place, and we will see how it forms out. Sure. The next question I have on the next year, we are given the double-digit growth guidance. Within segments, do you expect API also to grow in double digits, the generic segment? I cannot comment on that. I would say the overall revenue of the organization would be approximately double-digit growth. Sure. Thank you so much. I will join back with you. Thank you. We'll take the next question from the line of Abdul Qadir Puranwala from ICICI Securities. Please go ahead. Yeah. Hi. Thank you for the opportunity. Congrats on the good set of numbers. My first question is with regards to your investment on the new project you talked about, GLP-1, GLPs, and GIPs, and GLP-2 products. In terms of whatever you have spent in terms of your capacity addition, any color if you could provide to us what is the investment done into this space so far? Can you repeat the last part of your question? Yeah. My question was with regards to the capital investment which you would have done for your newer projects, which include GLP-1s and other opportunities. Contrasted it. We have not classified it as a particular investment towards GLP-1s because several of the equipment could be used both for the API or other custom products or GLP-1s. We have not classified it in particular, saying that this is only a GLP-1-based situation. Okay. Next one is on the two new projects which you have announced on the CS side. Any color on when the revenue generation would start from these plants? Secondly, with the quantum of investment, what you have done, any of this project, could it be in line with what the opportunity you would have seen during the COVID time? Firstly, this opportunity is not based on this is a long-term opportunity, is how I would put it, which are quite promising molecules. Number two, most of it is we completely depend on the regulatory approvals of our customers once we produce our batches, our commercial batches. Maybe by 2026 end or 2027 is when we will start. We hope to see commercialization of these projects. Understood. Thank you. I'll get back too. Thank you. The next question is from the line of Bino Patiparampil from Elara Capital. Please go ahead. Hi. Good afternoon. Mostly simple answer. Just one, what will be the CapEx for coming financial year? It would be mainly the projects that have been announced this particular financial year would be the additional CapEx that we are. Sorry. That is around ₹1,400, if I get it correct, plus some maintenance CapEx? Yes. It would be ₹1,400 million plus some maintenance CapEx. I mean, that would be the one that we would be looking forward to. Got it. Thank you very much. Thank you. The next question is from the line of Nitin Agarwal from DAM Capital. Please go ahead. Thanks for taking my question. On the two long-term contracts, by when would the commercial impact of these two contracts likely to be visible? Early '27. I think there would be around late 2026, early 2027. We would be seeing the impact of those. This is also subject to when the regulatory approvals would take place. It's not just the CapEx that we need to look into. One is the CapEx, but also when we start manufacturing, we need to also get regulatory approval. That would take time as well. I mean, just to clarify, this is calendar year 2026 that you're talking about, right? 2026 end? Yes. We're talking about sometime in third quarter, end of 2026, or fourth quarter, or January of 2027, around that time. Hopefully, if all regulatory approvals come in place. Thank you. Secondly, on Kakinada, how much incremental CapEx do we need to have you planned for the first phase? Currently, phase II, we haven't planned anything. We are still in phase I, and we are working on based on the newer opportunities we are getting and how we are planning. We are still working on how to go about phase II. We haven't started anything in phase I. Phase one, we've spent almost INR 1,497 so far. How much more do we have intended to spend in phase I? About INR 200 crore is what we are looking at phase one. Thank you so much. Thank you. The next question is from the line of Lakshmi Narayan from Tunga Investments. Please go ahead. Thank you. So what I understand is the success of our company is dependent on three axes. One is production, one is research, and third is the client development or the business development/sales, right? Now, while on the first angle, you had mentioned the capacity, I just want to understand in the last two years - three years, how have you built up your research capabilities and also your front-end sales capabilities? That's my first question. My second question is that, qualitatively, how do you think the next three years is going to be far better than the past three years? And can you just help me understand what are the two or three things as investors you should look for, and what gives you confidence that the next three years is going to be better than the last three years? I'll answer your second question first. We have always been a conservative organization. We have not been extremely competitive or extremely proactive in sharing our numbers or revenues or growth. We believe in being conservative in the way we project, and we would want to deliver what we promised. My stand on that would be, as I said earlier, we would be thinking about having a double-digit growth for the next few years. Now, coming to your first question, we were not clear what the question is in the first place. Can you please repeat your question again? My question is that success for a company like us comes from three different parts, in my view. One is the production capabilities. Second is the research capabilities. Third are the sales/client mining capabilities, right? While on the first one, you outlined kind of capital expenditure you have incurred in the last couple of years, just want to understand, at least in the last two years- three years, how have we enriched our research capabilities? Some kind of quantitative or qualitative feedback would be helpful, which means that we have increased our workforce in research, or we have actually got into two or three new areas. That could be one way to think about it. The last is from a client mining capability. How have we built up our front-end or so-called front-end workforce? Okay. Coming to research and development, we have always been very proactive and yet being very smart in grabbing opportunities, which has been one of our biggest strengths. I mean, if you look at if you ask what Divi's has done in the last two years- three years and for the years going forward, we have been very active in peptide chemistry. We have been very active in fragments. Then we have gone into solid phase peptide synthesis, liquid phase peptide synthesis. Apart from this, we have gone into flow chemistry, biocatalysis. We are constantly looking at opportunities and discoveries and innovations across the world, understanding what technologies are available and how it helps us in helping us in our own manufacturing by increasing either our yields or going towards green chemistry, or we are looking at atom-to-atom efficiency. Looking at all these factors is one of Divi's biggest strengths. Now, if you look at customer base, what have we done? Our reputation as one of the top CDMO for being on-time delivery for someone who has supplied material with zero recalls, and on-time delivery and maintaining our commitment itself gives us a lot of credibility in the market where there are several customers' approaches, and we have continued business and continued molecules which keep coming to us. Got it. Okay. In terms of your sales or the mining team, how have you enriched that particular part? I didn't get your question. What were you trying to ask? What I understand is we keep going deeper with our end client in terms of their research and trying to understand what are the products they have there, what are the molecules they are coming out with. We are actually proactively looking at it. In that count, how have we increased our sales force or the client development activities qualitatively in the last two years- three years? To answer this, right, Divi's has been in custom synthesis from the inception. It's not that it's something new we started today where people, where I have to develop my BD and then give them incentives and ask them how to move forward. Like I explained to you, our reputation is where we have been given opportunities with several of our existing and new customers. We have already been working with several multinationals. It's not something today that I'm developing this story. I mean, if you go back even 10 years, or 15 years, our CS business was 50% of our total revenue. To answer this question, our teams are already in place. There's nothing new about it. Got it. Okay. Thank you. Thank you for detailed answers. Thank you. The next question is from the line of Gaurav T. from Antique Stockbroking. Please go ahead. Hi. Good afternoon. Congratulations to the team for every accomplishment. We understand the confidentiality nature of the custom synthesis business. We cannot talk about clients or products. Any insight that we can get in terms of the quantum of total order book contracted, which is yet to be executed, any insight on that? I'm sorry. We cannot comment much about that particular kind of numbers. Any insight on how that contractor backlog has been growing over the last two to three years? I respect that you can't disclose a number, but any growth trends historically? Historically and as well as in the future, what we've seen so far has been a double-digit growth year on year, be it generic or our revenue as a whole or custom synthesis. That's something that we also expect to see in the future is the double-digit growth. Okay. Just in terms of understanding the sales cycle from RFP to contracting in the custom synthesis business, how long can that take? From contracting to revenue operation start, typically, what's the timeline you can see? Some kind of insight on your sales cycle, please, if that's possible. Just to give a brief about it, right? When you get an RFP, it could be a phase one, phase two, phase three. You do not know which phase is the molecule first. Once you get an RFP, the time cycle of what the customer is expecting, then his regulatory approvals, then our regulatory approvals, whether the life cycle of the molecule is going to go through. Typically, once you get an RFP, it can be anywhere that we have seen RFPs where we launched it and got it commercialized within one and a half to two years as an executive RFP to all the way we have seen an RFP which we even took about six, seven years. It is hard to comment because there is not a fixed timeline. It completely depends on the nature of the molecule, the approvals from the regulatory bodies, and how interested the agencies are in getting this product into the market. There are several factors entangled in it. We are only a part of it. We only manufacture the active ingredient and then supply it to the innovators who have to take it much, much forward. It is a complete matrix. It is very hard for me to say it goes in certain times. What I can say is we have executed projects within two years' time, and there were also times where even some projects even took six to seven years. Thank you. I'll come back with you. All the best for you. Thank you. The next question is from the line of Nikhil from SIMPL. Please go ahead. Hello. I have two questions. One is, see, in the I hope I'm audible? Yes, I hear you clearly. Yeah. Yes, I'm clearly audible. In the initial comment, Nilima mentioned that there are still issues at the logistics side, and it's taking time and all. If I look at our inventory buildup over the last four years, since Molnupiravir sales, our inventory was held around INR 3,000 crore, INR 2,800-INR 3,000 crore. This year, we've hit the highest sales. Still, our inventory is around INR 3,000 crore. How should we see it? One way to look at it is that you see the RM environment or the material environment on the pricing side and availability side easing a lot, which is why you are not building a larger inventory. How should we understand here? See, if you see the sales that are going up, but also our portfolio is increasing over a span of many products. We are also maintaining the raw materials based on the entire product portfolio. If you are seeing from the time we are looking at Molnupiravir, from that time, there has been some or the other crisis, be it with respect to COVID or be it with respect to China or be it with respect to logistics. We have been constantly facing pressure with respect to various factors. Based on the product mix, the kind of raw material that requires the attention, we've been stocking those kind of raw materials for the product mix we have. Would it be right to say that now going forward, as we clock our double-digit revenue growth, as a percentage of sales, this is the kind of inventory level we would like to keep? Because in the initial year between 2023, 2024, we hit almost 40%-45% of inventory versus our sales, which today on our year-ending sales is around 30%. Is this a normalization on the working capital side? It's difficult to comment on this since it's difficult. I mean, I wouldn't normalize it. I would say it would depend on the products that we are manufacturing, whether it is a large molecule or is it a small molecule project, or is it a combination of which particular unit we are manufacturing it from. Is the material available domestically? Are we developing new sources that are manufacturing locally within the country, or are we forced to procure only from international sources? It all depends on various aspects. If you ask me what my wishful thinking is, I would love to maintain a lean inventory. I wouldn't want to have large inventory stocks. I would definitely want to have a lean inventory wherein I can implement more adjusting time and have it just source what I'm manufacturing at that point in time. Sure. Second question is, see, if I look at our last 15 years, and we've been doing the CSM business for almost 20years-25 years now, and we always had a good relationship with the top 20 pharma companies. Prior to COVID, we never had dedicated blocks. All our plants used to manufacture all our products. Since the time of Molnupiravir, now, this is in a way saying this is third or two molecules where we are going for dedicated blocks. What I'm trying to understand is what are the underlying guardrails on which we decide whether we will go for a dedicated block or not? Is it a quantum of business size which we want to go for? Tomorrow, if someone comes and says for a INR 300- INR 400 crore kind of a top line, even there, we will go for a dedicated block. Just some idea, if you can share what are your guardrails and what are your benchmarks on which you decide whether we go for a dedicated block or not? I would say that we did have dedicated blocks way back if it is a product of large volume and where we are manufacturing throughout the year. We did have multipurpose blocks for products that are smaller volume. We would take advantage of the facility by doing champagne-based production. However, I do not think we ever mentioned that we are setting up dedicated blocks for the expansion plan. We said we are going to invest a certain CapEx of certain value, but we have never mentioned that it is a dedicated block. Okay. So even for the two new molecules, the INR 700 crore-INR 800 crore CapEx we announced, these would all be multipurpose blocks. This is not dedicated for any customer. Since these products are mainly custom synthesis projects, I am not at liberty to divulge on information. I would refrain from answering that question. Sure. Thanks. I'll come back in the queue. Thank you. Ladies and gentlemen, we'll take that as the last question for today. I would now like to hand the conference over to Mr. M. Satish Choudhury for closing comments. Thank you, and 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, members of the management. On behalf of Divi's Laboratories Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.