Ladies and gentlemen, good day and welcome to the Q1 FY25 earnings conference call of Eris Lifes ciences Limited. We have with us on the call today Mr. Amit Bakshi, Chairman and Managing Director; Eris Lifes ciences Limited, Chief Operating Officer and Executive Director; Mr. Sachin Shah, Chief Financial Officer; and Ms. Kruti Raval, Head Investor Relations. 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. Please note, this call is being recorded. I now hand the conference over to Mr. V. Krishnakumar, Chief Operating Officer and Executive Director of the company. Thank you, and over to you, sir. Good evening, everybody, and welcome to our Quarter One conference call. So before we dive into the details, it's probably useful to take a couple of minutes to articulate how we think about our business, how the business is structured. There's been a lot of change in the last few months. This also gives you a sense of how this presentation is organized. So we have two business units, strategic business units. One is Domestic Branded Formulations, DBF, which accounted for 90% of our Q1 revenue. And then we have Swiss Parenterals, which is our exports-focused business, which accounts for 10% of Q1 revenue. Now, within Domestic Branded Formulations, we are calling out two separate pieces, the Base business and the Biocon business. So the Base business consists of everything that's been amalgamated, including all the Derma piece and everything, which is fully integrated part of Eris. The Biocon business, which is again being structured into Biocon -1 and Biocon-2. Biocon-1 is the piece that we acquired in November 2023, and Biocon-2 is the portion that was acquired most recently in early April. We are calling out these various segments, and this presentation, we are giving you a lot of color about how the Biocon first piece is done in Q1, how the Biocon-2 piece is done in Q1, and we are also giving you a sense of how we expect these segments to perform through the year. It's probably useful to let you know at this stage that now we will revisit these pieces in Q4. Once we set out a guidance on how we expect them to perform, we'll come back to you in Q4 and tell you how they perform vis-à-vis expectations. But we won't necessarily be calling out this level of detail on these pieces every quarter. So with that context, let's move ahead. We start with the Base business. So happy to share with you that Eris now ranks among the top 20 companies in the market. So just as a reminder, we went public in 2017, and at that time, we were ranked 29. So the company has gained nine ranks since the IPO. Today, we have five brands with more than INR 100 crore of revenue. This includes Basalog and Insugen, and we have 12 brands with revenues of INR 50 crore to INR 100 crore. In terms of Quarter One, as per the AIOCD AWACS report, the covered market for us grew at 8.1%, and we beat the covered market by 460 bips. So 12.7% is where we landed for Q1, and four out of six therapies saw market-beating growth. Oral anti-diabetes market share inching towards 6%, and very good growth in all our big brands. And also, in terms of new product launch and scale-up, we ranked number third in the market in terms of count and value for new products. Moving on to the financial highlights for the Base business, we had an organic revenue growth of 10% in Quarter One. The gross margin in Quarter One was 86%, which is up by nearly 300 basis points on a year-on-year basis. The EBITDA margin for Q1 was at 39%, which is up by 185 basis points on a year-on-year basis. This was again due to a mix of productivity gain, gross margin improvement, and better fixed cost leverage. It's also worthy calling out that our Derma portfolio gross margin was up 100 basis points to 80%. You might recall that we told you that we started manufacturing the Derma products in-house from January. So this is some of that getting reflected. Fixed costs as a percentage of revenue are down by 97 basis points year-on-year. So in terms of guidance for the year, we are looking at an organic revenue growth of 12%-14% with an EBITDA margin of 37%. This is for the Base business. Now, moving to the Biocon -1 business segment, so very strong start to business integration. This is a portfolio that we have acquired in November, so dermatology and nephrology. It's been about six to seven months since acquisition. This portfolio clocked the Q1 revenue growth of 16%, with a 40% growth being seen in the top seven power brands in both Derma and Nephro. This has a Q1 IPM of close to INR 7.5 lakhs. The teams are settled down. They are all well integrated. We augmented the Derma team to around 80 reps. The gross margin for this piece has improved by 1,500 basis points in Quarter One. So you might recall that at the time of acquiring, we had a 50% GC, which is now at 65%, and we expect further upside. The Q1 EBITDA margin for this piece was at 39% versus 19% at the time of acquisition. So again, a 2,000 bips gain in just six to seven months from acquisition. In terms of guidance for the year, INR 125 crore revenue, which is a 25% growth on the acquired base, with an EBITDA margin of 36%, which is up by 1,700 bips from the acquired base. Moving forward to the second Biocon piece, which was acquired in early April. So this piece has insulin, oncology, and critical care. Again, integrated well ahead of schedule, we saw a 13% revenue growth in Quarter One with a IPM of close to INR 8 lakh. Basalog and Insugen, very strong early traction, two more INR 100 crore brands in the kitty. On co-critical care, we have lined up a lot of new product launches. Swiss is manufacturing a good portion of the critical care portfolio. In terms of gross margin and EBITDA margin, this represents what we acquired the business at. So 40% gross margin and 90% EBITDA margin is what we came with, and that is where it is. And we expect a further upside of up to 1,000 basis points in gross margin driven by sourcing initiatives. And in tandem with that, an expected improvement in EBITDA margin as well. In terms of outlook for the year, we are looking at Basalog and Insugen to do a combined revenue of INR 280 crore, which represents a 40% growth over the acquired base. So if I add the Xsulin and Xglar, which are the homegrown insulin products, our insulin franchise for this year should land at about INR 340 crore-INR 350 crore. The Biocon-2 segment, we expect a revenue of around INR 460 crore, which represents a 28% growth on the acquired base, with an EBITDA margin of 28%, which is an improvement of 900 basis points from the acquired base. So this is the Domestic Branded Formulations Q1 financial summary, all three pieces put together. Revenue of INR 632 crore for the quarter, which is close to a 40% growth. EBITDA of INR 225 crore for the quarter. The EBITDA margin, 36% for the quarter, but 39% excluding Biocon, and a IPM of close to INR 5.7 lakhs. So dissecting this further, we have given you the P&L for the DBF segment. Similar set of numbers, but I think the thing that really stands out here, which we are happy to share, is the fixed cost synergies from integration have really started coming in. So we saw a gross margin reduction of close to 600 basis points in Q1 because of change in product mix, Biocon coming in. But we also saw a reduction of around 450 basis points in fixed costs as a percentage of sales, so leading to a Q1 EBITDA margin dip of around 140 basis points. And in terms of guidance for the year, we're looking at a revenue of INR 2,600+ crore with an EBITDA margin of 36%. This is something we would like to call out that the way the business has evolved, it's evolved from a Specialty business to a Specialty Plus Super Specialty business. So the addition of segments like Critical Care, Oncology, and Nephrology, these are Super Specialty Segments which are still growing at 10%+ volume growth per annum. We're also happy about the fact that despite nearly doubling, this is still like a Chronic/ Sub-chronic business for more than 85% of the turnover. So this is something that results in significant headroom for growth going forward. Moving on to Swiss Parenterals, Q1 financials revenue of INR 73 crores with a EBITDA of INR 26 crores. In terms of guidance for the year, we are looking at a revenue of INR 330 crores with an EBITDA of INR 115 crores, which represents a top-line growth of around 14% and an EBITDA growth of around 30%. A lot of building blocks being put in place, new regulatory inspections and qualifications, expanding the product pipeline. They have an order book of nearly INR 130 crores for delivery too. So looking good as of now. This is the consolidated P&L for the quarter, total revenue of INR 720 crores, which represents a 54% growth. Again, Q1 margin movement also reflects the fixed cost synergies. So at a gross margin level, we are at 75%, which is down more than 800 basis points, again, due to business mix and product mix. The EBITDA margin level, we are down only 164 basis points because fixed expenses as a percentage of revenue are down by more than 660 basis points. Q1 EBITDA of INR 250 crores consolidated, which represents a growth of 47%. This is the full impact of all Amort and Depri and finance costs. Book tax rate has increased as guided. We continue to pay cash tax at 17%. The Q1 PAT of INR 89 crores reflects all this impact. Cash flow from operations for the quarter was at 70% of EBITDA. At a cash EPS level, we saw a growth of 10%. Net debt as of 30th June stood at INR 2,700+ crores. We'd like to share an update in terms of an acquisition of an approved loan license site, loan license manufacturing. So this is a site in Bhopal, which was built to Biocon quality specs, very, very good quality fill finish facility for insulins and designed as a broad spectrum biosimilar fill finish facility to handle a wide range of biosimilar products. They have capacity, which is rolling for liquid vials, and we will also look to add cartridges and prefilled syringes, and it has attractive benefits under Section 115 BAB. Now, if you look at the thesis for this, I think we would look at it from two perspectives. One is that this site is a key stepping stone to realize our Biotech vision. So in a lot of ways, we are looking at this site to be a Biotech Hub with injectable manufacturing facility across a wide range of presentations, which is vials, cartridges, and PFS, and across a wide range of product categories: Insulins, Analogs, GLP-1s, MABs, and so on. And the second point is this site really enables us to get GLP ready because an approved fill finish site is the most critical component of the last mile in building competitive advantage for a scalable and profitable GLP play. So I think in the GLP business, I think having a cartridge filling line of this caliber is probably the most valuable asset that one can have today. So we have a lot of plans for this site in terms of where it can potentially take us. In terms of the whole buy versus build rationale, we see that this site has reduced at least 2 years for us in terms of time to market compared to the greenfield operation. We will immediately realize a margin improvement in our insulin segment, which has significant scale now, INR 340 crore-INR 350 crore is the outlook we have given for the year. We see that as soon as we move to the site, we will see a margin bump of at least 1,000 basis points. So this really sets the stage for our large molecules play. Putting it all together, what does the year look like? We're looking at a DBF revenue of INR 2,600 crore with EBITDA margin of 36%. This is how it breaks up between the organic piece and Biocon. At a consolidated level, we're looking at a revenue of INR 3,000+ crores with an EBITDA margin of 35%. In terms of expenditure for the year, the site acquisition is INR 105 crores, and we envisage an additional CapEx of INR 100-120 crores on the various biotech segments that we spoke about. This factors in everything as laid out in terms of depreciation, amortization, interest costs, cash tax rate, and operating cash flow ratio. We remain committed to rebuilding balance sheet strength. This is the balance sheet strategy that we had shared with you at the end of the last financial year that we would want to reduce the debt to EBITDA ratio to less than 2x in 18 months. We are on track. So by the end of fiscal 2025, net debt of INR 2,600 crore or slightly below, and by fiscal 2026, net debt of around INR 2,000 crore. That's where we see us going. In closing, calling out our five strategic priorities for the year, the Base business delivers the organic growth with the EBITDA margin of 35%-37%. In the Biocon piece, we're looking at an overall revenue growth of 27% with a margin expansion of close to 1,000 basis points. Swiss Parenterals delivers the financials INR 330 crore revenue with a 35% EBITDA margin, but more importantly, build the base for accelerated growth in export markets as well as oral solid exports. Rebuild balance sheet strength as per guidance and really take tangible next steps in terms of our large molecule play, which is both in terms of manufacturing capability and product basket. So that brings us to the end of this presentation. Thank you. Thank you very much. We will now begin the question and answer session. To ask a question, please click on the raise hand icon tab available on your toolbar or on the QA tab available on your screen. Kindly turn on your mic when the operator announces your name. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We'll take a first question from Dhruv Maheshwari from Perpetuity Ventures LLP. Please go ahead. Hi, thank you for the opportunity. I have a few questions. The first one is regarding the cardiac portfolio, which has been constantly underperforming the IPMs in the last few years. And this trend has also continued for this year as well. So if you can highlight the reason behind it and what are the initiatives being taken to get this segment back on track. And my numbers are according to the IQVIA database. Yeah. So you're right. Even in AVAX, the data kind of looks similar. But if I remember correctly, June, we had come very close to the market. We were still behind, but I think 100-150 basis. So boss, the basic reason, if you go into the detail, is Zayo. This was sacubitril valsartan, which we launched, which actually got to a INR 5 crore monthly run rate. And when the generalization happened, and we actually ran short of stocks, so we couldn't service the market 3-4 months before the LOE happened. And that is the loss which we created and which we have not been able to kind of get back. So primarily coming from one brand, which is Zayo, which reflection of Zayo now is more like INR 1.5 crore per month from a peak of INR 5 crore. So that's something which is hit us. But I am quite okay to say that from next quarter onwards, we would be hitting the market numbers. And third quarter onwards, you will see us getting ahead of it. Primary two reasons. One is we have got two of our products which have been approved, which you remember we told our R&D basket. One is dapagliflozin and metoprolol, which has already been approved. We will be launching next month. And the second is dapagliflozin with bisoprolol, which also has been approved. We should be launching it in the next month or the next month. So Q2, we'll see two solid launches in cardiology, especially heart failure. So that's the plan from a cardiology point of view. Got it. The next one is regarding the D&A. So during Q4 FY 2024, the guidance was about INR 285 crore for FY 2025, which has been revised to INR 305 crore. So what makes us the majority of the difference between these two numbers? Dhruv, you're not clear what the question is about? Depreciation. Depreciation. Yeah. So it was revised from INR 285 crore to INR 305 crore within this presentation. So what we put out in Q4 were estimates. Now, what we have taken, the actual depreciation and amortization that has come in Q1, we have just analyzed it and given you the kind of what the year is looking like. So it was basically an estimate versus an actual accrual. Nothing major in there. Got it. Got it. These were the two questions I had. Thank you. Thank you. Thank you. Before we take the next question, we'd like to remind participants to ask a question. Please click on the raise hand icon tab available on your toolbar or on the QA tab available on your screen. The next question is from Kunal Dhamesha from Macquarie. Please go ahead. Hi. Good evening. Can you hear me? Yes, yes. Go ahead, please. Okay. Hi. Thank you for the opportunity. The first one on the, I mean, if you can help me understand the clean base of FY24 for our Base business in terms of revenue and EBITDA, on which we have provided guidance of revenue growth of 12%-14% and EBITDA margin of 37% that we did. Kunal, the clean base is around INR 1,850. INR 1,850 revenue and EBITDA? The Base business EBITDA that we've given you, which is 37% last year. What did you check in the chart? It's there in the chart. It's there in the chart. Base business of 37%. So 37% margin stays the same. It's there on the slide 7. Base business EBITDA of 37%. That's our reference point. Which is Q1 or he's asking for the entire year? It was roundabout in the similar form. This is Q1 2024, right? I'm asking about the full year FY2024. Kunal, let us kind of get this number and give it to you. It will be in that vicinity what KK is saying. Yeah. But if you're looking at the basis point level kind of clarity, we can get back to you. The revenue is in the range of INR 1,850. Okay. No, I'm just asking from a perspective as to what kind of EBITDA margin improvement for the Base business that we are baking in on a year-on-year basis and then what would drive that. Since we are expecting strong growth of 12%-14%, I naturally assume that there will be some gains on productivity, etc., for the Base business, right? So then that should also translate to the improvement in margins. Yeah. Very fair. I think we have called out 37% margin for the Base business in FY25. So you're saying what was the equivalent number in FY24? So we'll come back to you with the exact number. Growth will be, I think margin expansion will be a combination of the three levers that we called out in Q1, which is productivity gains, gross margin, and fixed cost synergies. Yeah, Kunal, you're right. It should happen. But at this point of time, we are happy to call it at 37%. Wait a while to see how it kind of comes up. This 1850, sorry to harp on this, 1850 would include Oaknet or anything that we have bought one year before, right? Yes. Yes. It includes the Oaknet, Glenmark, Reddy's, but it does not include any Biocon. Does not include Biocon. Okay. The Swiss Parenterals revenue for this quarter in entire exports? I'm sorry, your voice is breaking, sir. Is it clear now? Yes. Go ahead, please. Yeah. So I'm seeing that the Swiss Parenterals revenue, is it all exports in this quarter? Yes, Kunal. Whatever we have shared with you, INR 73 crore, that's all export revenue. Okay. When we say that we have started some critical care products, etc., that would have been included in our DBF revenue, domestic business revenue? So very quickly, INR 32 crore. Yeah. So the sale is included in Domestic Branded Formulations, and any intercompany is eliminated when we do the consolidation. So whatever you see, INR 73 crore in Swiss is clean revenue. Okay. Okay. Perfect. Now, the standalone Kunal, hi, Sachin here. The standalone revenue of Swiss is INR 92 crore, but what we have shown is 73. It is after elimination of intercompany transactions. So that's only one counting which is sold forward by Eris. So Swiss sells to Eris. Eris sells forward. In domestic business. And in the international business, the same whatever Swiss had a business model that continues. Yeah. Yeah. Okay. Okay. Perfect. And at the end of quarter one, what would have been our MR strength and how should we look that over this year or maybe coming one or two years? Kunal, our DBF MR strength is close to 3,700+ now. So more than 560 reps added through the two Biocon deals. So that's where we stand right now. We don't have any plan, Kunal, as of now, to increase the headcounts for this year. And next year, of course, there would be plan. This year, we are looking to consolidate. Sure. Sure. And this includes first-line business managers? No. These are representative. Okay. Okay. So shall I add like 10% more to that? That number will be bigger, Kunal. We'll get to you. But generally, because we talk IPM, so we generally give the representative number. On the MR. Okay. But my understanding is ABMs also generally they are on the field only, right? Yeah, of course. They're on the field. There are other managers also in the field. But IPM is derived from the representative. So the general practice is to represent MR members. Sure. Sure. I have more questions. I'll join back to you. Thank you and all the best. Thank you. Thank you. We have a next question from Kunal Randeria from Axis Capital. Please go ahead. Hi, good evening, and I hope I'm audible. So my first question on the acquisition that you made, the reason see, I think the entire reason for doing this JV with MJ Biopharm was to expand into insulins and GLP-1s, where they would be responsible for supplying the products and manufacturing and things like that. So just wondering what prompted you to acquire this asset now? Mr. Randeria, can you self-mute whenever you're not asking a question? Thank you. So please go ahead. So boss, look, what you are saying is absolutely right. The scale which we are now acquiring in insulin, the scale is such that we will not be able to service that from MJ. We are looking at some INR 350-360 crores by the end of this year, and the growth is quite good. So therefore, we had to have a second parallel site available for us. Otherwise, also, this business, as KK told you, we are looking for gross margin improvement and more control over the entire supply chain. So these were the reason, primarily because the value and the volumes were beyond MJ to kind of supply. So that is the primary reason. Got it. Thanks. And just secondly, on Biocon 2, margins today are like 19%. I mean, can they go back to company-level kind of margins in the next couple of years? So we are giving a guidance of 28% for the Biocon 2 piece and overall 33% for both Biocon put together. 30%. Fair enough, sir. What I meant was maybe the next two or three years, can they go to mid-30s, late-30s? Boss, the day our plan start functioning completely, we should be there. Got it. So which means that in the next couple of years, we should expect the consolidated margins to be somewhere in late-30s. Yeah, yeah. Consolidated margin even this year would be in late-30s. But if this happens, it has a chance to kind of beat that. Got it. I have a few more questions. Sure. Thank you. Before we take the next question, we'd like to remind participants to ask a question. Please click on the raise hand icon tab available on your toolbar or on the QA tab available on your screen. The next question is from Bino Pathiparampil from Elara Capital. Please go ahead. Hi. Can you hear me? Yes. Please go ahead. Good evening. Just a quick clarification on the tax rate. So the cash tax rate you have mentioned is 17%. The reported rate for the quarter was 22.5% roughly. Would that be the rate for the full year as well? Yes. We expect that to be around 25% tax rate. 24%. The annual tax rate. Yeah. Annualized. Okay. Great. Thank you. So man, what will happen is now, look, we were 80% manufacturing ourselves, and now we are only doing 60% in-house. 40% has gone out, and the major reason is the Biocon piece. So when we build our plan, this is also under the same, what is it called? Section 115BAB. Yeah. So this is also 115BAB. So once the transfer happens, we'll get two kind of runways. One is the margin expansion, and the other is a tax benefit. So going forward, we want to come back to that 80%, and that's where the work is going on. Understood. So when you shift manufacturing to that plan, the reported tax rate will come back to 17%-18%? Yeah, at some point of time, yes. If they're able to achieve that 80%, this is work in progress. But incrementally, you will see that more and more things are coming inside. Understood. Okay. Thank you very much. Thank you. Ladies and gentlemen, to ask a question, please click on the raise hand icon tab available on your toolbar or on the QA tab available on your screen. We'll take the next question from Vijay Karpe from Shriram Life. Please go ahead. Yeah. Thank you for the opportunity. I just have one question. So I appreciate the rationale which has been given for the latest acquisition. As per the management commentary which we had given in the fourth quarter, we had said that there will be no more acquisitions, and it will be all about putting the head down and focusing on execution. Can we expect some more acquisitions, or would this be the last acquisition? No, boss, if you look at our commentary now, we had put in INR 70-80 crores for a greenfield project. So actually, nothing has changed. That INR 70-80 crores of CapEx has moved here. So the plan has not changed. The only thing which has changed is from a greenfield to a brownfield. Otherwise, it remains the same. I reiterate that it's again heads down execution, no acquisition, unless and until our balance sheet comes back in that order. Okay. Thank you. Sure. Thank you. We'll take a question from Kunal Dhamesha from Macquarie. Please go ahead. Hi. Thank you for the opportunity again. So one on the Ahmedabad plant. I think last quarter, we had said that there's some drag of about INR 30 crore on EBITDA. So what's the current drag on the EBITDA from the plant, and what's the current utilization? So Kunal, the plant is ramping up very well, as we see. So just to give you a sense, this year, we are looking at a 70% increase in throughput from the plant. But the operating cost increase is 3% over last year. So the unobserved fixed costs, which we had called out last year, I think it was to the tune of INR 17-18 crore, if I recall. So that will be substantially lower. I mean, quarter four, it should go down to zero. But I think at an annual level, we'll probably be down to less than INR 5 crore. Okay. So this INR 30 crore number that I have was for full year? Yeah. Yeah. No, that was a combination of other factors also. But happy to get on to a separate call and go through that. But there were other items in the INR 30 crores. Yeah. I think, Kunal, it had some acquisition cost. It has some SAP cost. It had some one-time items, which came into full, which was a significant number. Yeah. Sure. Sure. Sure. And so that is fine. And on this debt reduction, we are expecting only around INR 400 crore debt reduction. Versus we should be generating OCF of at least around INR 700 crore this year? Yeah. Yeah. Yeah. So this year, the OCF, yes, you're right. And then we have to service the interest out of that, which is close to INR 240 crores. Then you have the CapEx, which we have called out between the acquisition and the organic CapEx. So net of that, whatever is there, will go towards the servicing, and that should get us to that INR 2,600 or slightly lower kind of a number by the end of the year. And this beyond acquisition CapEx, is it just the maintenance or addition of lines or? Yeah. So we called out all the biotechnology areas. So I think insulins, there's one piece which is this acquisition, and then we have MABs and hormone. So as we have called out, we would like to really build a strong packet to get into a biotechnology play. So this is all going towards that. Nothing maintenance nature here. This is all creating a capability. So Kunal, if you look at the fill finish, right? Yeah. Yeah. Fill finish. Fill finish. There's no DS as of now. It's all fill finish. So how many lines we are putting? In which plant? Like the entire INR 120 crore which we are using for our internal CapEx consumption, how many manufacturing lines will we have? So Kunal, what happens, the final line is something which is only incremental cost. We have to actually make provision for lines. So it depends upon how much sales we are anticipating. So for example, in insulin, we are putting 4 + 2, 4 for the vials and 2 for the cartridges. The hormone plant is very, very early days. We are just kind of digging it up. So for MABs, we will be putting only 2 lines. So depending upon that. But important thing from my side is, Kunal, you look at the way the product mix is happening. We are shifting from a specialty to a little bit of a super specialty also. With this product, we are becoming a little product company and a little tech company. With all this coming through, we will be participating in what some people call high resistance or whatever. High entry barrier. High entry barrier businesses or low competition businesses or the future businesses. So that's the moot point. We think that the mobile facility gives us because I don't agree with KK when he says 2 years. Because getting the licenses itself sometimes takes 1.5, 2 years. So building plus the licenses. Biotech licenses are a little bit time-taking process in India. So in my view, we are better off at least 3-4 years. Sure. So this is the CapEx for this year. This is not the CapEx for the overall project. It will continue for next 2-3 years, right? It will spill over. Yeah. Because my sense, if you are saying 6 lines, if you are even putting 6 lines plus hormone plus MAB, the CapEx would be much higher. That's what my sense is. I might be wrong. Over FY2025 and FY2026, we called out a number of INR 200 crore, which is between insulin, MABs, and hormones. It will be executed over FY2025 and 2026, and the number we have called out is 200. 200. Okay. Perfect. And last one on the tax rate, we expect the effective tax rate to go from 25% to 18% as we ramp up from the new plant. What's the timeline, and how should we see the progression? Is it gradual step jump, like step down in a way in terms of ETR? Kunal, so gradually from 25%, I think in next year, we should be 23%. That's how it, and then 21%. By that time, I think 2, 3 years it will take for us to finish our MAT. So once we finish our MAT, that is there in ELL books. So then we plan to go to 18%. That's how we reach there. It's our book tax rate. Cash tax will only be 17%. Sorry, we just lost his connection, sir. We'll take the next question from Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead. Am I audible? Yes. Am I audible? Yes. Yes, Tushar. Sir, just on this site, just on this site which has been acquired, can you help us know what's the gross block of this site? Gross block? Tushar, the gross block is about INR 65 crore, and the net block is about INR 56 crore. Any particular reason, like it got incorporated in 2020, I understand they would have also taken 2 years to build the facility. But approvals and all are still to take time. And for that matter, the sales is also yet to come. So anything you would like to highlight here? Tushar, as far as we know, I mean, there was a date for the moot point was to get it incorporated under the new law, which allows the 15% tax rate. So that's how it was incorporated after 2019, around that time. And they started their commercial manufacturing before 31st March 2024. So that was the basic idea behind that. Okay. And just on the comment, like all approvals in place for insulin manufacturing, so you mean which geography? Is it like more of a India or? Yeah, only India. Tushar, only India. Only the vials have, we have the licenses for the vials line. The cartridges line, we don't have the licenses, and the line has also to be put up. So these, at least for the India market, like at least to start with for vials, cartridges, and PFS, to start the commercial production in first place, so what is the kind of timeline one should think of? Tushar, I think quarter three, we should be there. Quarter three, we should start the manufacturing of vials first, and the cartridges would take another 1 to 1.5 years, depending upon how soon we are going to get the validation done. And just asking on this particular aspect, how much subsequent further investment would be required in the form of CapEx? In this plant, for the insulin piece alone, we require around INR 20-25 crores. And once we start the MAB lines, it will be an addition. Which is a part of your the CapEx, which you already alluded to. This is not over and above the CapEx. Yes, boss. Same thing. And broadly, how much OpEx would be there for this facility? Because I assume currently it's already at least operational, if not from a compliance point of view, but from the. Tushar, we would not like to give that OpEx number. Let us start the operation first, and then we will be in a better position to tell you about the OpEx. And just on my side, maybe you—sorry. Sorry, sir. You're sounding muffled. Mr. Manudhane? Is this better? Can you repeat your question? Is this better? Yes, go ahead, please. Is this better? Yes. We are already at INR 250 crore EBITDA as we stand on 1Q FY25, right? There is a lot of income business. I'm sorry, you're sounding muffled again. Is this better? A little better. You can ask your question again, please. Yeah. What I was trying to ask is that we are already at INR 250 crore EBITDA for first quarter FY25, and the guidance indicates that we would end FY25 by INR 1,050 crores. Just that the kind of improvement in the operations of both Base business as well as acquired units isn't that too conservative? We are already at that number, more or less, ±INR 10-12 crores as we stand today. So Tushar, I think from a guidance point of view, we'll stick to 1,050. But we'll be happy, very happy if it goes up. So the efforts are on the same side. But from a guidance point of view, we would like to stick there. Okay, sir. Thank you. Thank you, Tushar. Thank you. Before we take the next question, we'd like to remind participants to ask a question. Please click on the raise hand icon tab available on your toolbar or on the QA tab available on your screen. The next question is from Prashant Nair from Ambit Capital. Please go ahead. Yeah. Hi. Amit, in the past, you have mentioned that generally you would like to keep your EBITDA margins in that 35%-36% range and look for growth, reinvest anything over and above that for growth. Now your margins seem to be, given your guidance, tracking a bit above those levels. So is there any change either in thinking or in the way the business has shaped up? Where do you see kind of peak EBITDA margins settling, say, if you take the next three, five years as a timeframe? So hi, Prashant. Prashant, you are right. Look, we also had a little bit of surprise because we haven't done a business which gives 60% gross margins and 40% EBITDA. So there was a little bit of uncertainty around that piece. But having spent some time with business, the productivities are very nice. And there is a tailwind in these businesses. So I kind of will give away that now I can see a chance of margins getting better with all that which is planned. So certainly next year, it should be better if a great change. So now I can tell you that 35% in the next two, three years might not be the case. It should inch up. Okay. Yeah. That's it from me. Thank you. Thank you, Prashant. Thank you. Ladies and gentlemen, to ask a question, please click on the raise hand icon tab available on your toolbar. We have a question from Kunal Dhamesha from Macquarie. Please go ahead. Hi. Thank you for the opportunity. So I thank you for the opportunity. So one question for Amit. Now we have all of these different pieces together. I'm sorry, sir. Your sound was muffled. Okay. Now it's better. Please go ahead. Is it better? Yeah. So now you have these pieces in place. You have been with this business for about 25. What's the kind of growth profile of this entire consolidated business that you are looking at? What? I'm sorry. Is it better now? You're losing your audio. Yeah. Go ahead. As I'm saying that beyond FY25, the growth profile of the business. I'm sorry. Mr. Dhamesha, may I request you to repeat the entire question again, please? Sure. I'm saying that you have acquired a lot of these businesses, and now you spend some time. So beyond FY25, what's the growth profile of this entire consolidated business look like? And the investments which would be required to grow at that pace? So Kunal, how do I answer this? So look, one thing which at this point of time looks clear is that the insulin piece will see a growth going forward, and we are also investing in more insulins. We are right now covering only two pieces. If everything goes well, we should be launching a GLP now, and then there are other insulins which we are investing in. We are not present in Aspart. We are not present in Aspart Mix. We are not present in Lispro. We are not present in Degludec, which is expiring in 2026, if I'm not wrong. So the insulin piece seems to have a lot of headroom from a growth perspective, both from the existing products, and there is a possible new product pipeline, which is also very exciting. So we continue to invest in them while we talk, and we'll keep on informing you at the right time that how is it moving ahead. So that is one piece which I am quite reasonably confident. The other piece, which is oncology and critical care. So critical care, again, the injectable is a large business. We had promised you we'll be INR 100 crore this year, which we will definitely be. But again, there's a lot of scope there. So once things start moving, that is one business which can also give us a better growth. Now, simultaneously, Kunal, the other, as I alluded to, for the cardiovascular, there are new products also coming in. So all that investment which we made last year in the R&D pipeline, those in the form of product, they will also show up. So certainly, there is some kind of a chip in terms of new product and growth. So this piece looks to me something which we can grow beyond that routine 10%-12%. So hopefully, we should be in a trajectory for a couple of years which should be significantly beating the market. Okay. So follow-up question for me is when I look at the growth driver for the last three years. I'm sorry. We lost you again. Is it better now? Yes. Yeah. So I'm saying that when I look at the three years. I'm sorry. Dhamesha, I think your network signal is the net connectivity is a little poor. You're sounding muffled. We can't hear you. Why did you get on a call with me? Yeah. Can we take the next question? I can connect with Kunal later. Sure. We'll take the next from Rahul Agrawal from Himalaya Investment Advisors. Please go ahead. Thanks for the opportunity and congratulations on a very good set of numbers with sharp turnaround in the Biocon businesses. My question is a version of what the previous participant was also asking. From here on, if you look at the next three years, how do you see both growth and margins spinning out? And if you can build up a little bit more on the numbers, like you said, the base may grow at 10%-12%, but what rate would you expect insulin to grow at? And combining it all together, where do you think can we go on the margins? Yeah. I mean, we are coming back to the same point. Look, largely what I can tell you is that we are better prepared for growth because of the organization moving from that specialty to super specialty. So 100%, we are better prepared for a better growth. At the same point, at the same point of time, we are better prepared for a margin expansion also today. But quantifying it for the next three years is something which is a little difficult for us at this point of time. But what we can tell you, the macros and the way the second set of diversification has happened clearly kind of puts up there. So then the execution happens and everything happens. So we are there, but quantification would be a little different thing. I understand. On the Swiss Parenterals' business, when we had done the acquisition, we had said that we may also look at starting a branded formulation sales in emerging markets. Have we made up our mind around that? Is that something we want to pursue? Second, how do you see Swiss Parenterals shaping up over the next few years? Okay, answering the first question, which is an important thing. There was a little bit of change in the plan. First, we thought that we will put in the injectable piece directly into Swiss, and we will run it from there. But then there was some reason which we couldn't do this. We actually bought it in ELL itself. That's why you see it is reflecting here in ELL. Swiss continuously supports the domestic piece, but in an indirect way, not in a direct way. From an export piece, guys, look, there are a lot of stuff which is happening. At this point of time, we have given you the guidance for this year. And I hope you appreciate the fact from export piece needs a little bit more time to kind of turn around because of regulatory things. But if you look at the kind of approvals which we are seeking in this year, they are quite significant, especially the Brazil piece and the Switzerland piece. So we would need some more time to get back to you on that. For this year, our guidance would be, I mean, more or less should be intact. Got it. Thank you so much and congratulations once again. Thank you, boss. Thank you. Ladies and gentlemen, to ask a question, you may please click on the raise hand icon tab available on your toolbar or on the QA tab available on your screen. We'll take a question from Prashant Nair from Ambit Capital. Please go ahead. Yeah. Hi. Sorry. This is just a repeat, probably. Sachin, I missed the comment you made about your tax rate and how it could move over the next few years. Can you just repeat that? So Prashant, I mean, we expect it to be around 25% at a consolidated level this year. And with products moving in-house in the Ahmedabad plant and also the new acquisition that we have, gradually, I think every year should go down by 2%, 2%. And finally, because we also have a market in Eris, right? So we have to consume that also in the next 3-4 years. By that time, I think we should be around 18%-19%. That's where we'll reach. Yeah. Fair enough. Okay. Great. Thank you. Thank you. Ladies and gentlemen, we'll take that as the last question for today. I now hand the conference over to Mr. V. Krishnakumar for closing comments. Over to you, sir. Thank you all for your presence today. In summary, consolidated revenue for the quarter was INR 720 crores, which represents a 54% growth. Consolidated EBITDA for the quarter was at INR 250 crores, which represents a growth of 47%. We've integrated the Biocon acquisitions well ahead of schedule and started realizing significant synergies in our flagship domestic branded business, which accounts for 90% of our revenue. We expect to deliver a growth of over 25% in the Biocon segment in FY25 with a significant jump in operating margins. Our business model has evolved from a specialty model to a specialty plus super specialty model with the addition of segments like oncology, critical care, and nephrology. As a top 20 company in the IPM, we are taking tangible initiatives to step up our game in the biotech space as well. Thank you and have a good evening. Thank you very much, sir. Thank you, members of the management. Ladies and gentlemen, on behalf of Eris Lifes ciences Limited, that concludes this conference. Thank you for joining us, and you may now exit the meeting.