Ladies and gentlemen, good day, and welcome to the Q4 and FY23 earnings conference call of Eris Lifesciences Limited. We have with us on the call today Mr. Amit Bakshi, Chairman and Managing Director, and Mr. V. Krishna Kumar, Chief Operating Officer and Executive Director. 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 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. V. Krishna Kumar, Chief Operating Officer and Executive Director of the company. Thank you, over to you, sir. Thank you. Good afternoon, welcome to our fourth quarter conference call. I'm Krishna Kumar, I'll be sharing the highlights of the quarter and full year with you. We have reported standalone revenues of INR 315 crores in quarter four, which represents a growth of 11.5%. Our standalone revenues for FY23 stand at INR 1,331 crores, which represents a growth of 9.5%. This has been lower than our guidance due to a couple of factors. First, we had launched an immunity-boosting supplement called ZygBEE during the wave 2 of COVID, which did exceedingly well during the pandemic. Given its strong association with COVID, the sales sell-off was flipped post the pandemic wherein we discontinued the product. We had to take returns and write-offs in FY23. While we did not discuss this as a major point in our commentary during the year, the fact remains that this has impacted some part of our standalone growth for the year. There were a couple of significant brands in FY 23, Zayo being one of them. We cannot talk much about them since the matter is still sub judice, but where we took extended periods of primary sales disruptions that were unforeseen. Adjusted for these two one-time factors, our standalone revenue growth for the year from our continuing business stood at 15.6%. In fact, our base business continues to perform stronger than ever. Our diabetes franchise has grown by 25%, and we have gained a rank in the therapy with Glimisave having become a INR 300+ crore revenue mother brand. Our cardiac franchise has grown by 16%, excluding the impact of Zayo, and our VMN franchise has grown by 16% excluding the impact of Zygbee. We invested INR 1,265 crores in consummating 3 dermatology acquisitions in FY23. This has been our largest single year investment, and that too in a single therapy. Notwithstanding that dermatology is a large and attractive therapy, we need to acknowledge that this investment was not an easy decision, and it took a lot of heart and conviction on our part. This conviction came from 3 aspects of our business understanding. Number 1, our long-standing experience in chronic therapies. Number 2, our ability to build forge lasting relationships with super specialists. Number 3, the stickiness of old gold brands and our ability to build them further. Post the acquisition of Oaknet, we approached the business with an owner-manager mindset and with a complete willingness to roll up our sleeves and do the hard work to create value. We took a slew of value creation initiatives focused on product range expansion, driving sales and marketing excellence, and expansion of specialist coverage. Within six months of the acquisition, we could start seeing early impact in terms of an acceleration in organic growth and margin expansion, and we started getting the conviction that we have a strong base there which we can build on. Hence, when we got the opportunity to bring in complementary products through the Glenmark and the Dr. Reddy's bolt-on deal in quarter four, we had the confidence to go ahead. I'm happy to note that our thesis has delivered tangible results in Oaknet's very first year with us, with the business clocking a 22% organic growth in FY 2023 after a spell of 3 flat years during FY 2020 to FY 2022. The EBITDA margin has expanded from 10% in FY 2022 to 24% in FY 2023. We are confident of a further expansion in FY 2024. On a standalone basis, our EBITDA margin for FY 2023 was 58%, down by 185 bps from FY 2022, largely driven by a 134 bps increase in standalone COGS. The lost sales on account of COVID products and at-risk launches that I just spoke about have also played their part. We continue to maintain a consolidated gross margin of close to 80% despite the dilution in margins caused by the amalgamation of the new businesses, specifically Oaknet and our greenfield Insulin piece. With Oaknet performance becoming stronger and our insulin volumes scaling up, we expect a significant uptick in consolidated gross margin as well as EBITDA margin in FY 2024. Preservation of a consolidated gross margin of 80% has been an integral component of our growth strategy all these years, will continue to remain so in future as well. Eris MJ, which houses our greenfield insulin business, has organically clocked a revenue of INR 17 crores in its first full year of commercial operations. We have two commercial products at present, human insulin and glargine. We are expecting this business to scale up significantly in the coming year with a narrowing of operating losses. In order to simplify our corporate structure and unlock synergies among our business units, effective April 1, 2024, we propose to demerge the domestic formulation business of Oaknet and amalgamate it with the parent company, Eris Lifesciences. Through this merger, we will strengthen our overall go-to-market alongside realizing better operating efficiency, scale benefits, and business synergy. We have already commenced the operational integration of the businesses from 1st of April. This is expected to be completed by the end of June 2023. Our detailed standalone and consolidated financial information is available in our investor presentation uploaded earlier today. These were the highlights for the quarter and the year. We are now happy to open up for questions. Thank you. Ladies and gentlemen, we will now begin with the question-and-answer session. Anyone wishing to ask a question may please press star and 1 on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. 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 on the line of Kunal Damecha from Equirus. Please go ahead. Hi, thank you for taking my question. The first one on the this amalgamation of Oaknet's domestic business, what kind of synergies are we looking at on that front? You know, would we be able to generate some cost savings from there, or what's the thought process there? Second, on the insulin side, I think last quarter we said this quarter, we were expected to do around INR 7-8 crore revenue, but again, we are coming at around INR 6 crore, and that's been flat for two quarters. You know, the burn has also increased a little bit. What are our expectations and probably, you know, what different things we are trying to kind of see the uptick there? Insulin first, we had some supply issues in the month of in the last quarter. Therefore the sales was, you know, little slow. Otherwise glargine has, you know, done well when we look at April. Our plans for the next year remain intact, as we don't see, you know, any significant movement from what we have spoken. We are aiming for, you know, no loss in this year from MJ. We maintain that number both on the top line and bottom line. In synergies from the two things, look, we are looking to cross-sell between women health, dermatology and some endocrinology. You know, we have been strong player in endocrinology, there are two indications which are, you know, which are very good when it comes to dermatology also. One is the PCOS in girls, which is our mainstay, you know, narrative in the women's health business within Eris. PCOS, you know, has a manifestation of skin, you know, skin problems. We see that, you know, we can cross-sell at that, you know, in, at that level. We are also looking at a post-menopausal kind of a scenario, which basically again is an interface between hormone and dermatology. Women endocrinology and dermatology, we are trying to put this together and cross-sell. Great. what will it do? Will it increase our doctor coverage or the products that we take to... Like, in terms of, you know, the benefit, how should we think about the benefit going through for us? Yeah. Higher penetration. Oaknet has just been selling dermatology only to dermatologists at this point of time. We will extend that dermatology bouquet to endocrinologists and gynecologists. You'll see a greater reach in the coming time. Okay. Second one on the Oaknet, you know, I think we have seen a very good growth. So that's great for this year, and we kind of feeling confident. I think, you know, we have operated multiple levers, like increasing the penetration to around 90% of dermatologists and then also launching products. Do you see enough runway, you know, going into FY 2024-2025, where we can continue to see similar growth that we have seen in FY 2023 for Oaknet? Would you say the low-hanging fruits are already there, and then now it's more about, you know, building the existing brands? Kunal, there is, you know, there's too much in hand as of now. I mean, I don't know how far it goes, but we have 24 products lined up for new launches, which we are holding up at least for the first two quarters. We have been working on some formulation development throughout the last year. Some of them are now coming through. There is one or two things which we are talking to a international licensing, which is also in progress. The new brands which we have taken from Glenmark and Dr. Reddy's are showing us a complete new phase of growth. The opportunities are quite high, but we are not taking everything together. We are just walking one step by the other. The first six months would be consolidation of and getting the sales together. We'll include increasing the reach and the specialty which I was talking about. In the second half we will look at expansion. We have got three divisions. I can comfortably tell you that post the second half we will be having the fourth division also. I've been talking to you about this, that you'll. The sales look good. If you look at the presentation, it says we are number three in our covered market, there's a large market which we are not presenting, and that is typically the acne market, which is very large, and the hair care market. We have got everything aligned there from a product to a narrative. There's too much in hand, but we'll take it, you know, one by one. That's how the plan is. The openness and dermatology is going to keep us very busy for the next two years. Sure. Thank you. I I have more question. I'll get back with you. Thank you. Thank you. A reminder to the participants, anyone wishing to ask a question, may please press star and one. The next question is from the line of Punit Pujara from Helios Capital. Please go ahead. Yeah, hi. Thanks for taking my question. I had a question on Insulin Glargine. You referred to the supply issue. Was that from Biocon? No, no glargine issue. It was human issue, the NPH. Understood. Sir, could you just give us an update about the clinical trials are happening in Glargine within this calendar year? Sorry to interrupt, sir. Your voice is breaking up, Mr. Pujara. Yeah. Is this better? Sir, it's still breaking up. Hello. Yes, sir. This is slightly better. Please proceed. Yeah, thanks. Can you give us an update about the Insulin Glargine product that was in clinical trials, which is targeted to be launched in the current calendar year? It's going online, Mr. Pujara. We see, the studies are closed. We have to get them to the DCGI. We are running, you know, on time as far as glargine and also the GLP-1 is concerned. We are very hopeful that we'll see the launch in this year. Nothing changes on that plan. It is going as per the plan. Once we submit the randomization, so my bad, once we submit the clinical trial data, it will take around six months of time. Is that understanding right? Yeah, yeah, you're right. Generally, it is, you know, in the last couple of months, there's a little bit of slowness there in the movement in the department. We expect that to get all right. We are expecting a June or a July hearing. Let's see how it pans out. The study has been completed. Sure, sir. That, that answers my question. Thanks. I'll jump back. Thank you. Sure. Thank you. The next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead. Sir, just a clarity first. Adjusting for Zayo and Zygbee for 4Q FY23, what would be the stronger year-on-year growth? Not done that math, no? I mean, we have not done that math, but most of the, you know, Zygbee return. There will be no Zygbee effect, KK, in the fourth quarter. It will be at-risk product. Yeah. Basically. We can go ahead and get back to you. Yeah. Look, it should be in the range between... It should be around 300 basis point. Largely saying I've not done the math, but you know, from the gut. Zygbee doesn't have anything because we'd finished by that time. Zygbee was almost out. It's only about the at-risk which would be, you know, in the question. It's actually 4Q FY22 had sales of Zygbee and Zayo, or it being not there. That will clear out this. Say that again, I'm sorry. Same quarter last year, did we have Zygbee and Zayo sale? No Zygbee. Zayo, yes, but not in Zygbee. I mean, I'll have to check, Tushar, but Zygbee would be very minimal. Let me, let me check, but anecdotally, I can tell you, we are talking about around 300 basis, and we are talking 11.3%, no? 11 and a half. 11.5. Take it 14.5, 15. That's what it looks like. I understand. Sir, secondly, just to understand how would it be the operational cost related to this Gujarat facility which would come up in FY24? Yeah. That will come in the books in financial year 2024 from a full year standpoint, and it should be, you know, similar to the Guwahati plant level. Understood. Considering the significant launches, considering the operational cost for this facility, still the profitability of the margin can look north for FY 2025. Is that understanding right? Yes, Tushar. Factoring in everything, we are still expecting a meaningful jump in EBITDA margin in this financial year. All good. That helps. Thank you. Thank you. A reminder to the participants, anyone wishing to ask a question, may please press star and one. The next question is from the line of Prakash Agarwal from Axis Capital. Please go ahead. Yeah. Hi, good evening. Thanks for the opportunity. Just trying to understand, you know, the slide 4 better. You know, Aprica and this trade generating EHPL both have made some losses. What are we thinking about these two small ones? your statement on organic standalone growth is taken well, but I'm trying to understand how should we see the margins going? I understand Insulin business can turn EBITDA neutral and Eris Therapeutics also. If you could give some color on these segments that you have described, how does that look for 2024 and 2025? Hi, Prakash. Prakash, look, EHPL was always a drag on the EBITDA, right? I remember telling you in one of the calls that, you know, we are not very gung-ho about the trade generating, so the sentiment continues. We will try and not lose this INR 4 crore in this year, which we lost in the last year. We lost INR 4 crore. Yeah. The plan is, I have no upside on the top line. The plan is simply no loss at a EBITDA level. Regarding Aprica, it was a bad year for Aprica. Aprica is not a bad business. We've been doing well over a period of time, but we had some, you know, some one of its kind situation in Aprica. Aprica, I remain positive. I see Aprica, you know, doing well in this year and getting back in both into the profit EBITDA as well as the top line growth. Okay. Sir, some color on the Eris MJ and Eris Therapeutics. Eris MJ, you know. Eris MJ, I mean, we expected INR 20 crores down by the end of the year when we started, and we are almost there. We wanted it to do INR 20-21 crores, but we ended up INR 17 crores. Some plans didn't work out and some, there were some deficiencies in supplies from MJ, especially in the last quarter. We are aiming for a zero EBITDA there, which you said. Eris Therapeutics is basically where the Gujarat facility. The Gujarat facility is. Yes. The expense that you see is on the facility piece. Yeah, TK. The plant has commercialized in March, Prakash. This will be the first full year where Eris Therapeutics will start booking revenue. Once that starts happening, which has already started happening from April, then you will see the, you know, numbers falling in place. Okay. some color on how... Sorry for the interruption. For all practical purposes, you should see Eris Therapeutics as part of standalone. Correct. It's just a different operating plant, because of which it is in a separate company, but it is part of standalone. Okay, understood. Moving forward, the 2, 3 drags that we had of these one-off products you mentioned and the new initiatives, how do you see, you know, the base business growth and margins for you? Just a little very broad color, guidance. I'm not sure if you've already said. I joined a little late. Yeah, Prakash, because we thought that we'll give you guidance after the end of the first quarter because, you know, Oaknet has now become a prominent part of the entire piece, both from the top line and also expected at the bottom line. This was the first month when, you know, everything was getting together. Not the first month technically, but you know, we booked only INR 12 crore sales of Onabet and Demelan in the first quarter. That was expected because of the pipeline filling and all those things. I mean, April has come out well. Because Oaknet was a considerable and significant piece, we would wait for a quarter to give you know, the guidance for the next year. That's our back. It takes a little more time than that. Regarding the standalone, we just told you, we grew 9.5% on the books, and we wanted to grow 15% at the start of the year. You know, we told you why it got, you know, a little jarred. Okay. We expect. Look, margins have never troubled us in the standalone. We continue to be at 38%-40% margin. The growth in our terms internally has been quite good. Last year has been one of the best year for us internally. Because of all these issues on the financial, you have a stress. We believe that we can continue this kind of trajectory, especially because of the new launches which are shaping up well. If you look at our new diabetes launches, they have shaped well. Remylin, which has been a concern, you know, about the growth, and we've been telling that, you know, it's a product, it's a big product, has now hit more than INR 300 crores at the reflection level. I have no problems in the standalone business other than these moving parts. I believe the journey will be like that. Okay, fair enough. lastly, on the strategy. fiscal 2024, you have two, three assets to turn around and you have some debt. is it fair to assume that the focus will be largely there, that to pay off the debt, versus or you would be open to any opportunistic asset as well? First two quarters, we want to pay it back. That's the idea which we are working. First two quarters of five. Nothing in six months' time, hopefully. That is how we are, you know, we are preparing ourselves. Six months is consolidation and putting everything together. Post six months is the time when we will look at it. Having said that, if there is something which is very, you know, mouth-watering and one-of-a-kind thing, then we might change the view. Okay, fair enough. I have one more, if you allow me, on the, you know, the working capital side. It is largely due to the acquisition last month and having full balance sheet impact? Or is it, you know, going forward also we'll see this or it will come down? It will come down, Prakash. By the end of the financial year, you will see that a lot of it will get normalized. I think standalone net-to-days of, you know, 35 to 40 or around 35, I think that is still something that is normal for the business. There have been too many one-time events that have happened in the financial year because of which you see this number being slightly different, but it will fall in line. Okay, thank you. All the best. Thank you. The next question is from the line of Bino Pathiparampil from Elara Capital. Please go ahead. Hi, good afternoon. Most of my questions are answered. Just one clarification. If I remember correctly, earlier you had given a guidance of your tax rate being about 25% in FY 2025. Now with substantial acquisitions, would there be any change in that at a blended level, overall level? There is no significant change because of the acquisitions. The trigger for the tax rate was related to our Guwahati facility, so that still remains to be the case. How- Having said that, we are able to get a lot of, you know, some of or lot of the dermatology product in our own plant, which is little ambitious for this year. If we are able to get it, then we will see some benefits come rolling out from there. Okay. How would that be? Because if the plant is coming out of the tax holiday, then how would that benefit? Currently the dermatology formulations are all manufactured by third parties. When we get it in, we are working on getting it into our Gujarat facility, which is at a 15% tax rate. Okay, got it. Thank you. Thank you. The next question is on the line of Prashant Nair from Ambit Capital. Please go ahead. Yeah. Hi. Can you share the share of sulfonylurea products in the diabetes portfolio for this fiscal? That's number one. Secondly, you know, how have you seen the diabetes market overall evolve after the sitagliptin launch? Has there been any acceleration shift of the market to sitagliptin away from either sulfonylureas or also, you have vildagliptin as well? How have these products kind of played out with, you know, generic version of sitagliptin coming? Prashant. Kruti will just fetch out the data for sulfonylureas. 60% is what KK tells me. Look, there has been a lot of changes. I mean, let me tell you, we have grown by 25% in the diabetes therapy in this fiscal year. A lot of that growth has been driven by the newer products. We already articulated that from a SGLT and DPP-4 point of view, the contribution has gone up to 41%. This was the last time it or we discussed. The changes are happening quite rapidly actually. We see that, you know, linagliptin which became very big in the first four years, then got shifted to vildagliptin and slowed down. We are seeing a similar trend in plain vildagliptin. Vildagliptin is now driven by the combination of vildagliptin with dapagliflozin. The change is actually swift because we haven't had a time when in four years' time, so many products had come out of the cliff, out of the patent. As far as our condition, you know our condition. We still feel that, you know, the market is still shaping up when it comes to sitagliptin combinations, right? We hold a number three or number four rank, and we put the, both the products together. We still feel that, you know, the, you know, the report is not out yet. The market is still evolving. That's how. That's the overview of, you know, how the newer markets are behaving. Yeah, thanks. Again, on an overall basis, putting all these things together, how do you see this therapy growing for you in the next, say, over the next year or couple of years? In fact, we did an internal analysis which we do for our, you know, reviews, and we are happy to share it with you at some point of time that last year in gliptins we were number one company in terms of gains in gliptins and combination. We continue to have a good share between the new therapies. If you look at diabetes growth, diabetes has been our strength. At no point of time I remember diabetes not growing far, far ahead of the market. Because this product, it is sticky, we believe that we have some kind of a grip in that market. The growth rates will continue in the same trajectory. Yeah. Thanks, sir. Thanks, sir. That's it. Bye. Thanks, Deepak. Sure. Thank you. The next question is on the line of Tarang from Old Bridge Capital. Please go ahead. Hi, good evening. KK, just wanted to double-check. In FY 23, there are no revenues flowing from Zayo or Zayo. Would that be a right assertion? Yes. Okay. There were returns that we took, as I mentioned. Okay. The growth numbers that you enumerated in your opening address, these are all on the business, right? These are not AIOCD numbers. These are on your P&L, correct? All these are from our P&L. No, no. AIOCD also reports a 15% growth for us, 14.5% growth. It does, but in the first para that we spoke about- Yeah. We only spoke about primary numbers. Okay. Yes. We did not refer to AIOCD numbers. Yes. Got it. Thank you. Thank you. The next question is on the line of Ankur Shah from Quasar Capital. Please go ahead. Yeah. Hi, thanks for taking my question. I was referring to slide number 15. Considering that, you know, top 20 brands now account for almost 70% of the revenues and, you know, considering the acquisitions which we have done in the last 1 and half year, sir, can you provide us a sort of a consolidated view on how the company will look 6 months down the line, with what kind of revenues? Once we have set that base, how do we plan to, you know, grow this organically? What will be a sustainable growth rate? Can you throw some light on that? One of the most frequented word in the entire presentation is organic, so you know, it's all over the place. take 1 more quarter to, you know, we understand where you are coming from. Just give us 1 quarter, no? As I already said that, Oaknet has become a big piece for us and, you know, it's just kind of forming up in the new year. maybe, when we talk about the 1st quarter numbers, we have a much big, much better grip on, you know, where the numbers are looking like to go. Okay. Sir, the second follow-up question? Sir, some of the brands are reaching very good scale. Now do we plan to increase our coverage, our distribution? like, how do we plan to take these brands to really, you know, at a mega scale? if you have some thoughts on that? You see last year there has been a significant improvement in the standalone HR also, which means that, you know, we have added people by the end of the year. As per the brand and as per the reach, we keep on adding people whenever required. You know, in the diabetes where the brands are getting bigger, we added some people by the end of the last year. That's a continuous process which we keep on, which we keep on undertaking depending upon what is the reach which is reporting prescription markets and other surveys. We are behind the big brands. Almost at most of the given point, the bigger brands have grown more in the market. We continue to have a very sharp view, on expansion, whether it is people expansion, coverage expansion or the portfolio expansion. Okay. Okay. Sir, last question on the manufacturing side. Sir, you mentioned that, you know, you're trying to transfer a lot of the derma products into the Ahmedabad facility. You know, I was just thinking that the acquisitions have been done in the last year and whereas, our facility was planned since quite some time. Is there any additional CapEx which you will be undertaking to make this facility viable to manufacture derma products? There will be some incremental CapEx. You know, it, right now it's a little bit, you know, we are just talking to the possibilities side. We really don't have the plan as of now, but there is an intent to make it possible. What happens because we have the basic infrastructure done, it's only the bolt-on plant and machinery which is required. The chances are that we should be able to turn around. Once we get there, we will let you know what is the kind of CapEx which we are looking for to get inside, to get these things inside. Sir, the major cost benefit analysis for this particular derma manufacturing is the tax which will, we will be saving on this, right? Otherwise it doesn't make sense, right? There is a gross margin benefit also which we get whenever we bring products from third party to internal manufacturing. We usually pay for itself on a gross margin improvement basis. Correct. The tax thing is a top-up kind of a benefit. If it comes, right? Sir, for gross margins, we will be paying up for CapEx and working capital, right? Yes, but they usually, you know, help you, and you typically don't recover this in one year, right? That's not the intent. Over an acceptable period of time, three to five years, the project usually pays for itself. That's how we think about it. Okay. Okay, sir. Thank you. All the best. Thank you. Thank you. A reminder to the participants, anyone wishing to ask a question, please press star 1. The next question is on the line of Gagan Thareja from ASK. Please go ahead. Good evening. Am I audible? Yes, you are. Yeah. Sir, first question is, simply around your accounts. One, what should we pencil in? The P&L tax rate in FY 2024? Second, what sort of debt repayment are you budgeting for FY 2024? Okay. The effective tax rate that we've targeted for this year should be in the range of 14%-15%. We intend to pay off around INR 400 crores of debt this year, INR 400-500 crores. INR 400-500 crores. On the Oaknet piece, you know, while it's worked out splendidly for you in FY23, is it possible, you know, for you to give us some broad-based idea of how should we think of the Oaknet piece in terms of its scale and in terms of its margin profile for the next couple of years? I mean, what are your plans in terms of populating, you know, adjacencies, if possible, in the Oaknet piece. Also, you know, you acquired brands from Glenmark and Medley. How should we sort of think about the scale of these two? In terms of margins, you know, what's the profile currently, and how do they stack up in the next 2-3 years? Look, I mean, I'm sorry, Vadim, I will have to repeat that. You know, we'll be able to give you broad colors once the quarter is over. I mean, if you insist, I will touch upon a couple of things. Number one is very important. You see, you know, the gross margins of the Oaknet business, entire pharma business will be closer to 80%. It will be in the range of 78%-80%, which gives us a headroom to, you know, for margin expansion. Even if you see we have INR 12 crore of sales from these two products coming in the last quarter, and the margins are where you are. The margins are intact. There has been a good recovery. Recovery, when I say recovery, I mean the sales which was there outside when we bought and how much of that we are able to get inside. There has been a very good recovery in the Glenmark brands. Dr. Reddy's, because it came in in March, we still need one more month to get in. Fairly positive on dermatology. Remember that if we wouldn't have got these two bolt-on acquisition, we were ready with a large number of new introductions, which now we are postponing it for the second half. There is quite a lot which is happening in the dermatology business. You know, as a company, we are very keen because, you know, it's a very large therapy. We are number three in our covered market. Overall, we are number 10 or 11, you know, between that. We have a lot of spaces which are completely empty. There's a lot of excitement in the organization. To give you more color, give me one quarter. Right. I'm just sort of trying to understand that at the optimal level, would Oaknet margins be comparable or similar to what you have on your standalone piece? You know, is that going to be a different sort of a sustainable number? If you could, you know, sort of enumerate what that possibly could be once you've stabilized and optimized it. Secondly, you know, obviously, there will be operating leverage, and you are talking of improvement in overall margins as well. Is it possible to give us, you know, some sort of a broad band to work with? I mean, conservatively, if there is a number that, you know, or a range that you think is safely given by you at this point in time. It's not a question of, you know. Okay, if you want to really scratch that. You know, Eris is 82% gross margin roughly, and is INR 5 lakh YPM, and is 38% of EBITDA. This is the metrics for the standalone Eris. Oaknet is around 80% of gross margin, between 78%-80% of margin. INR 5 lakh of YPM. When these two metrics are there is a strong chance that, you know, the bottom line could be close to the standalone margin. I'm just giving you these three metrics. It's just a matter of time everything comes together. Ma'am, give us a quarter. We'll get back to you. We are excited about this. Thank you. Thank you. I'll get back to you. Thanks for taking my question. Thank you. Thank you. Thank you. We'll move on to the next question that is on the line of Kunal Damecha from Equirus. Please go ahead. Just one bookkeeping question on the write-off that we have taken for ZygBEE and Zayo in this year. What would be the cumulative amount for FY 2023? Zayo, there is no, you know, stock we have taken back. Zayo is something which fell short, so there was no supplies for us. Yes. couldn't supply. Was there any inventory on our book? We finished off the inventory. We ran out of stock. There were no stocks. That's where the sales got disrupted. If you look at the ASCVD, you know, at the peak, it showed INR 50 crore last year. Did you memorize? Mm-hmm. INR 10-20 crore. Seventeen. 17. If you look at the data, within this data, you'll find that ASCVD reports from 50 of peak last to last year, it went to INR 17 crore this year. Clearly we ran short of the inventory and we couldn't service the demand. That's where that loss comes in. As far as Zygbee is concerned. Zygbee is to the tune of INR 20 crores, 20, INR 22 crores. What? Combination of, you know, everything put together. Okay, sure. Zygbee, no, not INR 22 crore. Look what happened Zygbee, some of the Zygbee we destroyed even without putting to the in the market. That piece would only be taken at the cost, at the cost level. You consider INR 7-8 crore from that point of view, wholesale point of view. Okay. Sure. Secondly, while you are not guiding for any EBITDA margin as of now, would you say the with the improvement in FY 2024 would be when we would start seeing that from Q1 itself, or it could be more kind of, you know, towards the end of or second half of FY 2024? Look, the big movement will come, moment will come from, you know, Oaknet. We believe that, you know, well around 75% of the movement will be got in quarter one itself. If we reach 75% of what we are thinking, we are up and running. Sure. Perfect. All the best. Thank you. Thank you. Thank you. Thank you. The next question is from the line of Harshal Patil from Mirae Asset. Please go ahead. Hello. Good evening, just thank you for the opportunity. Sir, one of my questions has already been answered on the margins. Yes, we'll wait for input from you next quarter. Just one clarification wanted from you. You definitely said that there's some postponement of new launches, that was new product launches that was planned in FY23 onto FY24. Can you just, you know, let us know what could be the number of launches that are then lined up for 24? I was talking about the dermatology piece. I was not talking about the entire piece. What we are saying is, when the acquisitions were not planned, we were already developing formulations and talking to, you know, some of the international guys to introduce newer products in this calendar year, in the current financial year, which we are now postponing to the second half of the year. The first half focus is to, you know, put whatever we have acquired together and consolidate on that. The total number of products which we had discussed and had reached some kind of a, you know, conclusion were almost 20, 24. Right. Right. Don't confuse it with diabetes kind of launches. Diabetes kind of launches are very bulky. They are, you know, far and few, but they're very bulky. In dermatology it is far more fragmented, and the brand sizes are not as big as diabetes. So 24 might look like a very big number, but here you don't plan to make brands INR 50 crore, INR 100 crore all the time. Got that. Got that. Got that. Thanks for the clarification. Thank you. Thank you. The next question is from Mr. Prakash Agarwal from Axis Capital. Please go ahead. Yeah, a quick one. On the MR side, how much we have as on March 23 and what is the addition we are looking for fiscal 24? We missed you, Prakash. Please say it again. No, on the MR, twenty-four-. Sorry to interrupt. Sir, there's a lot of echo from your line, Mr. Agarwal. Is it better? Is it better? No, sir. Just a little. Hello? Can I go ahead? Prakash, please go ahead. We can hear you. I can hear you guys. Hello. Yeah, Prakash. Say it. Yeah. No, just wanted to know the MR number for fiscal 23 and likely additions for fiscal 24. What we can see as of now, Prakash, is we might need one more division in dermatology, but that will happen in the second half. A division in dermatology means roughly around 100 people. Take some in, you know, leave some. That is the visibility as of now. What is the current status as on March? Some 700 in Oaknet, close to. That's including 3 dermatology and 1 gynecology. Yeah. Total. Yeah. 700 in Oaknet as of now, might go to 800 by the end of this year. In total? The standalone is INR 2,200 and Oaknet is INR 700. That is largely the total number. Okay. Okay. In the max you will add about 100 here. Yeah, looks like. Looks like, Prakash. Okay. Just one clarification. You said you would demerge Oaknet and Amal again. It will sit in standalone. Your line is breaking, yeah. Can you come again? Okay, no, I'll take it offline. Thank you. The next question is from the line of Punit Pujara from Helios Capital. Please go ahead. Hi, sir. Thanks for the follow-up. Sir, just one clarification. On slide four and slide six, numbers for Oaknet revenue and EBITDA are slightly different. Could you clarify please? Yeah. Slide four shows the numbers that are on our books because the acquisition happened in mid-May. Mm-hmm. Oaknet full year revenues are INR 250, but because Oaknet was with us for 10 and a half months of the year, so what is in our books is INR 226. Okay. slide 6 is pro forma numbers. Yeah, full year. What Oaknet actually did for the full year. Sure, sir. That's helpful. Thanks for taking my question. Sure. Thank you. A reminder to the participants, anyone wishing to ask question, may please press star and one. As there are no further questions, I now hand the conference over to Mr. V. Krishna Kumar for his closing comments. Thank you. Financial year 2023 has been a year of massive investment for us, starting with the Oaknet deal in May 2022, right through to the Dr. Reddy's Laboratories brands deal in March 2023. We are happy to note that things have started coming together well as early as starting this April. We are in the midst of operationally integrating Eris and Oaknet, and we are confident that the combined entity will deliver industry-leading growth along with significant margin expansion. We will continue to focus on good quality growth, which for us means growth achieved without the dilution of gross margin and cash conversion ratio. We will continue to be guided by this thesis as we execute on our multiple growth levers such as power brands expansion, new product pipeline, and acquisitions. Thank you and have a good day. Thank you, members of the management team. Ladies and gentlemen, on behalf of Eris Lifesciences Limited, that concludes this conference call. We thank you for joining us and you may now disconnect your lines. Thank you.