Ladies and gentlemen, good day and welcome to the Gland Pharma Limited Q3 FY 2021-2022 earnings conference call. 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. Sumanta Bajpayee, Vice President, Corporate Finance and Investor Relations. Thank you and over to you, sir. Thank you, Vijaya. Wish you all a very happy new year and a warm welcome to Gland Pharma's earnings call for Q3 FY 2022. We will begin this call with business highlights and overview by Mr. Srinivas Sadhu, Managing Director and Chief Executive Officer, followed by financial overview by Mr. Ravisekhar Mitra, our Chief Financial Officer. After that, after the opening remarks from management, operators will open the bridge for Q&A session. Before we proceed with the call, please note some of the statements made in today's discussion may be forward-looking and are based on management's current expectations, and these must be viewed in conjunction with risks and uncertainties involved in our business. The safe harbor language contained in our press release also pertains to this conference call. This call is being recorded, and the playback shall be made available on our website shortly after the call. The transcript of this call will be submitted to the stock exchanges and made available on our website. I will now hand the call over to Mr. Sadhu for his opening remarks. Thank you all. Over to you, Mr. Sadhu. Thank you, Sumanta. Good evening, everyone. Thank you for joining our earnings call for Q3 of fiscal 2022. I would like to start by wishing you and your families a very happy new year. Every year that passes teaches us something afresh. The last year has given a greater sense of purpose to us at Gland. Our employees understand the impact their work is making in supporting the healthcare infrastructure globally. We are starting this new year with renewed optimism to accomplish many more milestones together. We would like to wish good health to our investors and analysts. We have seen the Omicron variant of COVID-19 virus spreading across the globe recently. While in most cases the symptoms are mild, following the COVID-19 protocols and vaccination must remain the key priorities. At Gland, we continue to follow all COVID-19 protocols to ensure safety of our employees. Almost all of our employees are vaccinated with two doses of vaccine. While there were some material supply delays experienced during the quarter, there are significant delays from three suppliers. Our teams are constantly communicating with our vendors to address the issue. Looking at our business, we continue to maintain the growth momentum this quarter, Q3 FY 2022, with a revenue of INR 10,633 million. That is a year-on-year revenue growth of 22% for the quarter Q3 FY 2022, which is also a growth of 28% for the nine-month period FY 2022 over nine-month period FY 2021. With a PAT of INR 2,730 million, we saw year-on-year PAT growth of 34% for the quarter Q3 FY 2022, resulting in also a growth of 26% for the nine-month period FY 2022 over nine-month period FY 2021. We have generated INR 6,127 million of cash flow from operations for the nine-month FY 2022. Our emphasis on lifecycle management of products and continued focus on revenue diversification across geographies is helping us move forward with a strong footing. I'm glad about our R&D team's ability to ensure timely completion of developmental projects despite the ongoing pandemic. In terms of our R&D progress, we have completed ANDA filings for the four complex injectables targeted to be filed in this financial year during the past quarter. The other development projects are also progressing in line with the project plan. We made 18 ANDA filings during the quarter and also filed three DMFs during the same period. We have filed a total of 27 ANDA filings during the nine-month FY 2022 period, as compared to 19 ANDA filings during nine-month FY 2021. We also received four ANDA approvals during the quarter. Our R&D expenditure for Q3 FY 2022 was INR 6.99 million, which is nearly 6.6% of our revenue from operations. For nine-month period upon excluding capital R&D expenditure, the R&D expenditure stands at 4.5% of our revenue for the period. FY 2022 R&D expenditure as a percentage of revenue is expected to be in line with our historical trend. As on December 31, 2021, we along with our partners have 309 ANDA filings in the U.S. and 1,552 product registrations globally. We have completed technology transfer and submission batches for Sputnik Light. After successful clearance of samples from Kasauli and joint inspection of our drug substance and drug product facilities by CDSCO and BCI during the quarter, we just received the export NOC for 50 million doses from CDSCO. We hope to receive the manufacturing license soon to initiate manufacturing of Sputnik Light vaccine. Let me take you through the business highlights across various geographies. With respect to our rest of world markets, our strategy of expanding our product portfolio in identified geographies has shown good results. We have further strengthened our presence by winning new tenders in our markets. This business accounted for 19% of our Q3 FY 2022 revenue, as against 17% of our Q3 FY 2021 revenue. We have seen 88% year-on-year growth in revenues for the quarter. Our key markets continue to remain in MENA, LatAm and APAC. Among our key products, enoxaparin sodium was the biggest contributor to growth for the rest of the world markets. Our ability to manage our supply chain efficiently has helped us to meet the shorter delivery times required for rest of the world markets. Our strategy for our key markets, namely U.S., Canada, Europe and Australia, has shown good results, with a focus on ensuring timely commercialization of pipeline and lifecycle management of existing products to ensure market competitiveness. Our key markets accounted for 63% of our revenue during Q3 FY 2022, as against 70% during Q3 FY 2021. The new variant of COVID-19 impacted off-take of our core portfolio in the regulated markets. We have seen 10% year-on-year growth in revenues for the quarter. On including India sales for our core markets, the year-on-year growth is at 18%, which is a function of our strong execution capabilities despite the pandemic. The U.S. market has registered a year-on-year growth of 23% for Q3 FY 2022. The key products helping us achieve this growth include micafungin, ketorolac, and heparin sodium. In line with our growth targets from new launches, we launched 6 molecules during the last quarter. India market accounts for 18% of our Q3 FY 2022 revenue, out of which domestic markets account for 6% of sales and Indian sales for export markets account for 12% of our sales. We have seen 31% year-on-year growth in revenues for the quarter on account of volume growth of existing products. Asafanam, which is a new launch this year in the U.S., has shown strong demand from end market. As we continue to scale our operations, our quality and regulatory teams have ensured our quality systems and standards are replicated across additional capacities being established. There were times during the last year when we were operating with less than optimal manpower, yet the quality systems stood the test and ensured compliance. All our plants continue to remain approved by U.S. FDA. Our customers are conducting audits regularly and our team continues to remain prepared for any audit. As you can see from the progress on R&D, our near-term focus on establishing a strong portfolio of complex injectables is progressing in a timely manner. We are also looking at acquisition opportunities to help expedite the development process. At the same time, we are also working towards charting out a roadmap to establish a biosimilar CDMO vertical. Collaboration with established biosimilar players and acquisitions can help us accelerate the push in this regard. We remain optimistic on the prospects for this year and hope to continue the growth momentum for all our stakeholders. I once again wish everyone good health. On that note, I would like to hand over the call to our Chief Financial Officer, Mr. Ravi Mitra, who will share some more insights about our financial performance for the quarter. Thank you very much. Thank you, Mr. Sadu. Good evening, ladies and gentlemen. Thank you very much for attending our Q3 earnings call. Let me start by sharing the financials of Q3 and nine months period of current financial year. Revenue from operations for the quarter three financial year 2022 stood at INR 10,633 million, a year-on-year increase of 24%. We achieved steady growth of 10% across our core market of the U.S., Canada, Europe, and Australia. ROW market continues to record a robust growth of 88%. Our India market, which also includes US sales, witnessed a growth of 31%. Revenue from operations for the nine months of fiscal 2022 stood at INR 32,977 million, a year-on-year increase of 28%. Other income for the Q3 was INR 457 million, which includes interest on fixed deposit of INR 342 million and foreign exchange gains on operations of INR 86 million. For the nine-month FY 2022, the other income was INR 1,587 million, of which interest on fixed deposit of INR 1,033 million and foreign exchange gains on operations of INR 520 million. We have reported an EBITDA of INR 3,946 million in Q3 FY 2022, compared to INR 2,994 million, which is an increase of 32% compared to same period last financial year. EBITDA margin for Q3 FY 2022 stood at 36% as compared to 33% for the same period of previous financial year. EBITDA for the 9 months ended December 2021 was INR 13,205 million compared to INR 10,621 million for the same period last financial year, a growth of 24%. We have reported EBITDA margin of 9-month FY 2022 at 38%. Our net profit for the Q3 was INR 2,730 million, a growth of 34% compared to Q3 FY 2021. During the quarter, we have recorded PAT margin of 25%, which is an improvement of 180 basis points compared to same quarter previous financial year. During the nine months period of current financial year, our PAT was INR 9,258 million, which is an increase of 26% as compared to same period last year. The total R&D expense for the Q3 were INR 699 million and stands at 6.6% of the revenue. As mentioned before by Mr. Sadhu, during Q3, we have filed 18 ANDAs as compared to total nine ANDAs during the first six months of the year. In Q3, we have incurred higher filing fees due to increased number of ANDA filing, and that has resulted higher R&D revenue expenses as compared to first two quarters average R&D expense by INR 299 million. The total R&D expense for the nine months period was INR 1,714 million compared to INR 916 million during the same period of the previous financial year. It stands at 5.2% of the revenue. Our effective tax rate remains at about 25% in Q3 and for the nine months period of the current fiscal year. Cash flow from operations during nine months period was INR 6,127 million. Cash flow from operation has improved during Q3 due to reduced inventory level and receivables position. Net working capital has reduced to INR 19,227 million as on December 31, compared to INR 20,334 million on September 30, 2021. Average cash conversion cycle stood at 190 days for the nine months ending December 2021, which is in line with the same period last financial year. Inventory level has reduced compared to previous quarter end and hence has enabled us to improve overall cash conversion cycle. All our planned CapEx are progressing well. Total CapEx, including routine maintenance CapEx incurred during the year till December 2021, was INR 4,547 million. Our ROCE on ex-cash basis was at 34% on an annualized basis for the nine months period of this fiscal year. Our fixed assets turnover stood at 3.2 x for nine months period of current financial on an annualized basis, which has increased from 2.9 x for the same period last year due to increased capacity utilization. As of December 2021, we had total INR 32,846 million of cash, which we intend to utilize for CapEx and to fund our inorganic growth strategies. With this, I would request the moderator to open the lines for questions. Thank you. Thank you very much. We will now begin the Q&A session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Nithya Balasubramanian from Bernstein Research. Please go ahead. Thank you. Congratulations on another good quarter. My first question is on the complex injectables. Can you tell us what these products are? You've told us what the addressable market is, but can you throw a bit more color? Yes. There are three hormonal products and one complex peptide. The addressable market is around $1 billion for these four products. Are you willing to talk about what these molecules are? No, we can't reveal it yet. Sorry. Okay. Are these Gland's own ANDA or partnered products? Gland owns ANDA. Got it. My next question is on the biosimilar/vaccine investment. If I heard you right, you have the export permission now for up to 50 million doses. However, you're still awaiting some additional manufacturing license to start exporting. There is still a hurdle to start exporting. No. The process is, you know, Once you make batches, you have to submit samples to Kasauli, and then, in parallel, you have to submit an NOC that triggers an inspection. That's what happened. Both sides got inspected, the report went, and then we got issued actually NOC this morning. Now, along with this NOC, we have to submit for license, which is more a documentary protocol, I would say. The license will be issued. We have to go and discuss with RDIF on supplies and where to supply. Hopefully now we should start manufacturing as soon as we get manufacturing license. Over what timeframe do you expect to supply this 50 million doses? Do you have commitment from RDIF that there is demand for 50 million doses of Sputnik V? Yeah. You know, we have a contract in place, now that we are waiting for the NOC to get so that we'll initiate the discussion. Since it's just come up only today, we're going to initiate dialogue, but I'm sure first, you know, we are positive that it might happen in next four to five months. There is a demand for what we've been discussing in some Asian regions where access to the vaccines is not there for some other vaccines. Got it. If I may squeeze just one more in. I think if your eventual intent is to repurpose this facility for biosimilars or a biologic CDMO, and the tech transfer process obviously takes, depending on the product, 12-15 months, have you already started conversations with biosimilar players? Is there anything you can talk about it at this moment? Yes, we do. I know there's a good interest we are seeing, not just outside India. Even some of the Indian players who want to enter in this space are discussing with us and some of our subsidiaries of parent company as well. Any deals that have been signed so far? No, not yet. You know, it's just because, you know, we still waiting for a clear cut idea on the vaccine production and how much demand. Unless that is there, we don't want to enter a deal so that it will not impact the timelines. All right. Thank you so much, and all the best. Thank you. Thank you. The next question is from the line of Ashish Thakkar from Motilal Oswal Asset Management. Please go ahead. Thanks for the opportunity. Could you just reiterate our progress on the biosimilar front in terms of, like, say, where we are in terms of mAbs, insulin, the cell therapies, the E. coli technologies, probably also some virus manufacturing technologies. If you could just give us update where we are in that entire journey. Yes, Ashish. You know, as we reiterated earlier, you know, we are not into the development of products, right? We are only doing a development work for other companies. While we have created a R&D team and a manufacturing team to address all the technologies, we will not be developing on our own any product portfolio. So we'll be doing a service for the biosimilar company, unlike the generic injectables, where we are also developing products. Any timelines, so like this is the questions asked, always in the con call, but any timelines you would like to share, as to when can we see that first dollar revenue coming in for us? We want to have a wrap up of vaccine projects by end of this year, at least Q3 or so, and then start working on the biosimilar end of this year. Hopefully in the Q1 of next year, we should see something happening in this space. One last question on this narcotics. Any update, like how are we planning to take ourselves ahead, it could be through M&As, acquisition of technologies, anything on that, those fronts would be helpful. Could you repeat that, Ashish? Sorry. Anything on the narcotics space in the U.S., which is obviously a complex area, and we are willing to take ourselves there. Any progress and how are we planning to take ourselves into the U.S. market, probably? Yeah. Narcotics, more of the complexity, I think, you know, because it has to be done locally in U.S., that's the key issue. You know, we're still actively looking at assets. COVID didn't help us because there's travel restrictions. But still it's I would say in, you know, we're actively looking at assets in U.S. to address this market. Okay. Yeah. I have no more questions. I'll get back to you, Vishal. Thanks. Thank you. Thank you. The next question is from the line of Saion Mukherjee from Nomura. Please go ahead. Yeah. Hi. Thank you, and good evening. Sir, on the ROW markets, we have seen, you know, steady performance around INR 200-INR 250 crores for the last three quarters. When do you expect a step up in sales in ROW going forward? Vishal, Saion, sorry. Saion, what's the question again? No. I was asking on the ROW markets, you know, you have a quarterly revenue run rate of around INR 200-INR 250 crore. It's been steady for the last 3 quarters. When do we expect any step up in ROW revenues? If you see year-over-year, we are growing very well. You know, this business is that, you know, we need to win tenders and we start supplying in different quarters. There are countries where we have tender for two years, three years. Where we have just started in, say, last quarter, it's a cycle. You'll be seeing the step up from April quarter because normally it's a year-over-year growth you see for our kind of business. Okay, great. Sir, on the U.S. market, in your commentary, you didn't talk about enoxaparin as a growth driver, because I understand you had some supply constraints. If you can just take us through what's happening in the U.S. overall. I mean, you know, the exports from India part has also sort of seen a good leg up. If you can give some more colors as to what is sort of driving growth, what is dragging down. Any commentary on the U.S., any details would be helpful. We even in my last con call, earnings call, I did mention, you know, some of the contracts what we won for some of the products. Micafungin is growing very well. You know, if you see year-on-year it's almost 200% growth. We have two major contracts in place. Enoxaparin again is driving growth because of the large contract we have. We have several launches. If you see the growth of US 23% year-on-year, majority has come from these products, right? Products if you see like dexamethasone, we have few very good contracts in place. That has gone very well. Ertapenem we got contracts. That is doing very well. Four or five products which are large are doing extremely well, and that has contributed to the growth of 23% from the U.S. market. Even the bag products where we were having the capacity utilization of 25%-30%, today we are almost hitting, you know, full capacity. We got contracts in some of the bag products as well. They have really contributed to the growth. We have several launches coming in next few months as well. The market size of that is around $1.3-$1.4 billion in next nine months in terms of launches. Okay. Sir, if I can ask one more question, on gross margin. It's been pretty steady. Any comment on raw material price pressure? How should we think about gross margins in the quarters ahead? For Gland, you know, even I've been talking about this earlier. Gross margin is a little irrelevant because of our model. Because we have a what you call varied model, where we do contract manufacturing, where the gross margin is 100%. We have a licensing income which is 100%. Where we have tech transfer projects where is a different set of gross margin and our own products. Whenever the mix changes, the gross margin looks different. It doesn't mean that there's a pressure on gross margin, unlike other companies where, you know, 100% of business comes from the product sales. We normally have to look more about EBITDA and PAT. If you see that, it's steady. Considering the 18 ANDAs we filed in this quarter, which is almost the filing fee itself costs you around INR 30 crores, right? A normal run rate per quarter for filing fees is around INR 5- INR 6 crores, but this quarter's been heavy in terms of that. It will help in the growth of the business, like you said. If you see last year, entire year, we have filed 21 ANDAs. This year we might file about 28-29 ANDAs. There's an increase of seven-eight ANDAs, and the bulk of it has happened this quarter. If you consider the expenditure made on the ANDA filings, you know, adding that to the PAT and EBITDA, it's in line with our historical trend. Okay, sir. Thank you, and I'll join back the queue. Thank you. The next question is from the line of Amit Kadam from Canara Robeco. Please go ahead. Yeah. Hi. Thanks for giving this opportunity. I have two questions. One is on the enoxaparin. Maybe 10 days back, we had this news from the Indian government issuing some kind of a notice on the like a banning that particular export. So does it impact us in that particular thing? Do we come under that particular gamut under that notification? And the second question is that we had guided earlier that our China commercialization, the first product launches could happen by the end of FY 2022 to the start of FY 2023. Does that timeline remains steady? On the enoxaparin, there are two things, right? One is prohibited and the other is restricted. This product has fallen in the restricted category. Because of the COVID situation, just as a precautionary measure, government has put that under restricted category. We have to file document to get an approval for an export. But as of now they are not really restricting any shipments. With the amount of the number of suppliers in India, we don't foresee any shortage happening in Indian market. The impact won't be that much, I would think. As of now, it's normal business. Only if some shortages happen in Indian market, that's when I think they will look at restricting it. As of now, there's no restriction to export. Does it happen? And on- Like every shipment then we have to take an approval because it's in the restricted category then? No, not every shipment. Whenever we import components or materials to export, we get it under advance license. They actually approve the advance license. Whenever you file for shipping, you have to mention that advance license number, and that will clear at the customs. It could be 40 batches or 50 batches at one shot. Once you have given advance license approval, you can ship whatever covered under that advance license. In this last 10 days as a regular shipment, nothing has impacted our regular flow of shipments to our respective customers? No impact yet. On my second question, sir. The China piece, we're still waiting for the first approval. There's one piece which is still under deliberation. Normally NMPA does inspect the facility first time when they approve a product. It's under that deliberation whether it has to be a virtual audit or a visit. Visit could be a problem. I think it's that stage. Probably if that gets cleared, then this product will get an approval. The timelines could get a little deferment? Yeah, it might defer. We did say that you know, Q1 of next year could be the time when we commercialize. Probably we'll get more clarity. It might happen or it might be pushed by a few months, but we'll give a better clarity in the next earnings call. Okay, thanks. Thank you. The next question is from the line of Sameer Baisiwala from Morgan Stanley. Please go ahead. Thank you very much and good evening, everyone. Just on your four complex injectables for which you have done the filing, the total combined size of the addressable market is $1 billion. Is that correct? That's a gross number by IQVIA, so the net number would be what? 25%-30% lower? Yes. I think that could be the correct. Most of the time, these products have lesser discounted. It's closer to the IQVIA numbers, especially products which are single source. Okay, got it. Are all four of them without any generic or there are some players there in the market? No, these are not generics yet. Oh, excellent. What could be the approval cycle timeline for this? Normally for complex, internally we are assuming two years. It depends on the first response we get from the agency. Okay. Sir, how do you see the competitive outlook for these four products? Like, when you reach the market, would it be one-two player market or you think there are more people in the queue? It's very difficult to say because a lot of people are talking about complex injectables. We have started this program a few years ago. While we have filed for this year, next year we have pipeline of filings, eight complex products. It's very difficult to say because the companies are working on products. If you look at the total portfolio, there's about 30-40 complex injectables. You don't know who are actually working on which products. I can't really comment on how many players will be there. Okay. That's very clear, sir. One last one from my side. And that is for your, you know, the base business, all the injectables in the regulated markets. There's some 250 odd, you know, approved ANDAs. As more and more Indian players, you know, broaden their portfolios, you know, are you seeing competitive, you know, pressures over there in the market? Are you seeing a higher price, you know, price erosion? Your thoughts on this would be great. Thanks. There's very little price pressure, you know, for any product once it gets genericized. But because of the business model, you know, our impact of the price pressure is lower. If you see our growth has come almost 17%-18% from the volume growth and the new launches growth has given around 5%-6%. Majority of the growth has come from either new launches or volume. The prices remain same or it's 1% down, right? The impact is lower for us because the business model what we have, because we are protected by the transition model we have and, you know, the profit share component for a smaller part of the entire business, about 10%. Even the impact is lower. Because of multiple players we have partnership with such every products, we kind of average out the price pressure. Okay. Very clear, sir. Thank you so much. Thank you. The next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead. Yeah, thanks for the opportunity. Just clarification again on this Sputnik, in terms of the timeline for starting the exports. Like three-four weeks timeline or can be faster than that? I wish I could do tomorrow, Tushar. Once we get a manufacturing license, then in parallel we are discussing the RDIF on countries to which, you know, we have to start exporting. Then we have to start manufacturing. The manufacturing process from the minute we start the drug substance to finished product itself is about 45-50 days. Then the samples have to be released by Kasauli and also Gamaleya, Russia. That's another 30 days or so, you know. The dispatch may happen actually the first part of next quarter than this quarter. I think the manufacturing will happen this quarter. Understood. Just coming back to the complex generics filing, are these products into the shortage list, which can compel U.S. FDA for inspection or early approval if at all the file is at, I mean, more or less appropriate? No, because these products are filed from same lines and approved facility, so this doesn't trigger any inspection as such. Anyway, you know, it all depends on when they want to inspect, because of course, we have one of the key injectables suppliers in the U.S. market and lot of products goes from the site. We got inspected in 2019 last. In 2022 anyway it's due. You know, we have to be ready whenever they want to come. This for sure will not trigger an inspection, but normal course of business they might do an inspection this year. Understood. Lastly, on enoxaparin, where on Q4 onwards you were to start the incremental order flow on this product in terms of gaining the market share from, let's say, the previous supplier. Is that on track or, I mean, on account of COVID-related hiccups, is that getting pushed or kind of postponed for later? No. In fact, if you see our numbers, we said this quarter even in enoxaparin for U.S. has gone up. We already started catering to that demand. Excellent demand for the new contract that we have. More will come in from next quarter, but the impact has already started. We started supplying from last quarter more quantities to U.S. Understood. Just lastly, there has been a good increase in the ANDA filings after maybe almost two, three quarters. Is that kind of pent up into this quarter itself or, with the production bit easing on account of COVID? How do we look at this, the pace of filing? No, no. I know we will never try to postpone any ANDA filings. Whenever it has to happen, we do that. Because of four complex injectables, the development took longer time. If you see last year it was only 21 ANDAs. Normally our target is around 24. We did 21 last year. Complex injectable takes longer time to develop. These were in pipeline, and these got ready to file this quarter. There were additional filings which has happened. You know, depending on you know, when the stability gets over and the ANDA batches take happens, that's when you know, we file it. It just incidentally happened this quarter, and that's why you know, it like sort of bulked up in one quarter, say, 18 ANDAs and three DMFs. Understood. Thanks. Thanks a lot for addressing. Thank you. Thank you. The next question is from the line of Vivek Agrawal from Citigroup. Please go ahead. Hi. Thank you for taking the question. The question is related to complex peptides that you have filed this quarter. So far, are you developing the API on your own or you are sourcing it from a third party? Thank you. No, these are outsourced, Vivek. Okay. Basically, is it fair to assume that, as far as API, or as far as the peptide filings are concerned, so most of the products, for example, APIs are outsourced? I'm sorry, Vivek, it is breaking up. Could you repeat that? For all the peptide filings, so are you basically depending on the third party APIs? Is that assumption correct? Not all peptides. Some of the peptides we want, we do have. We buy intermediates and then do final steps. Most critical APIs, yeah, we are dependent on external sources. That's one of the areas we are also looking from acquisition perspective in the long term. Thanks, sir. That answers my question. Thank you. The next question is from the line of Kunal Dhamesha from Emkay Global. Please go ahead. Good evening, and thank you for the opportunity. Sir, if you can provide some, you know, color on what was our profit share this quarter? You want the number, profit share number or you want the percentage? Percentage. Percentage is fine. It's 8% contribution for the revenue. Okay. Just for this quarter. Yes. For the nine months also it would be similar? No. For the quarter it's about 10%. For nine months it's about 8%. The second question is on the biosimilar side again. Obviously we have cited some timeline, but I think there is also another aspect in terms of regulatory clearance of the facility, right? Which also takes time. The current conversations you are having, you know, with prospective clients, whether these are for the ROW markets or for, let's say, Europe market or U.S. market. These facilities are designed for regulated markets, so it will be good enough for all markets from regulatory inspection perspective. Local inspection perspective, you know, we already got approval clearance from the inspectors for the vaccine. The facility is same. It's just that we need to give cleaning the air handling for a month, and then we can start the biosimilar production. Sir, the design of the plant is as per regulatory requirements for the regulated markets. Sure. These regulated market inspection would be triggered after you have certain products which gets manufactured or certain contracts in place, or this can happen before as well. The two things, right? One is, mostly it's the customer approval we need once you sign a contract. It depends on the type of work you do. If you want to take a pilot scale batches, which the product has to be given to humans, then you need a regulatory approval. Otherwise, any development you do in R&D or batches for animal studies, you don't need a regulatory approval for this. The approval from the client is good enough. Sure. Thank you. Thank you. Thank you. The next question is from the line of Rahul Jeewani from IIFL. Please go ahead. Yeah. Hi, sir. Thanks for taking my question. Now with respect to the biosimilar CDMO business, you indicated that, we would not be involved in product development and these products would essentially be, tech transfer products where we will be providing fill finish services to some of the other players. Because this will be a tech transfer portfolio where you will be providing fill finish services, do you think that the biologic CDMO portfolio, would be a lower margin business for us and hence it will be, margin dilutive for us? Yeah. There are two or three different aspects to it, right? One is the products which are already generic, if you really call it the rituximab, the trastuzumab kind of products. Doing work for them, whether it's a tech transfer and you try to get cell lines from the client and then do a scale-up on the substance and then do a fill finish. The other key aspect is the new drugs, not the generic products. That's where the focus is now. All the companies who are developing new drugs, they look at the development work to be done at a smaller companies like us and they'll give, we act as a service provider for that. They will. Whether it could be cell line development or whether it could be scale-up batches, or sometimes they have done already the cell line. We do the drug substance scale-up or we do the pilot scale batches. Several dimensions business. Mostly what we are looking at is working with companies who are working on the new drugs, and lesser on the genericized biosimilars, I would say that. That essentially means you would be targeting some of the way to biosimilars which will go off patent, but you also indicated that the revenue accretion from this project could start in 12-18 months time. How do you time that, given that some of these products which you might be targeting will be going off patent only post FY 2024, 2025 timeframes? Sorry, I think you missed one point. See, what we're saying is we're not worried about the commercial production yet for these products, right? We are looking at development scale-up and then some might. You know, not every product you do development work at the CDMO will actually get commercialized. It's a little different than the generic business. Some will pass through the animal studies, some will pass through the human studies and some may not. Only the products where it will get through all this then it will get to commercialized production. It's mostly we're working on the development side, scale-up side of the business and whichever product is successful, that's when it gets to the commercialization. Sure, sir. With respect to the U.S. business, if you look at the developed markets business, the U.S. business which is booked as part of our developed markets business, the U.S. business has been flat quarter-on-quarter despite the incremental supplies which you have done on enoxaparin for the additional contract. What has led to sequentially the U.S. business being flat? The quarter-on-quarter we really should not compare because you know it depends on what kind of products got dispatched that particular quarter. Are there any launches during that quarter? It depends on how many products get launched in a particular quarter. We should always look at an annual basis then which gets averaged out. You know whether it's any filings or whether it is Sure, sir. Some of the high value products might have dispatched in a particular quarter, may not have dispatched and the volumes also might vary. It all depends on the timing of. Sure, sir. One last question from my end. This is more of a bookkeeping question. Now over the last two quarters you have started calling out the sales which is being booked from India for the export markets and specifically the U.S. business. The growth numbers which you are reporting for U.S. is including the proportion of sales which is being booked from India. We have seen this, that you have started doing this only over the past two quarters. Has anything changed with respect to how you account for these sales which has led to a disclosure being made in this way? If you see two-three years ago the business what was happening to Indian companies to the U.S. was minimal, not that much. Few products got sold by Dr. Reddy's in that market. We have done lot of contracts with different companies, Indian companies over the last sevem years, that kind of started to sell. It's only fair to say that, you know, because the products are ultimately sold in U.S. and that is also generating the growth and the product, for example, ertapenem, it's licensed to an Indian company. You know, that is selling well, and we should not take that away from the U.S. business because now there are several products which we don't license to U.S. companies, only to Indian companies. You know, that should not curtail that. Because the volume of business is a set of products, volume is growing in a large way. We thought kinda the investor should know how much actual domestic product is going to the U.S. market. Because there may be an ambiguity around are we growing 30% in Indian market. No, it's only smaller portion of our business. Most of the business, what we're doing today, shown as India actually is going to the U.S. market, but billed as INR. Okay. Just one clarification on that point. The U.S. market sales which we are booking as part of the developed market portfolio, does that mean you don't book any sales to the Indian companies as part of that developed market portfolio? All your sales which is happening to Indian companies is getting booked as part of the India sales only. Correct. Okay. Sure. Thank you. It's always booked as India. We're only saying that part of that India, X amount, so much percentage and so much quantity is for the U.S. market. That's what we are saying. Okay, thanks. That's it from my side. Thank you. Thank you. The next question is from the line of Vivek Gautam from GS Investment. Please go ahead. Yes, sir. Congratulations on yet another set of good numbers. Consistently we have been getting good numbers post IPO. That's great, sir. Keep up the good work. Sir, one thing I just wanted to know about was the compliance status of ours, because I believe we have stellar track record of maintaining great compliance since 2003, if I'm not wrong. What are the factors behind it and any inspection in our future and post-pandemic FDA approval, FDA team coming up? All our sites are FDA approved. Many of them are approved by other regulatory agencies as well, and it's intact. In fact, just today we have just finished the main planned inspection from ANVISA, physical inspection. This is the first inspection post pandemic, I would say. We had virtual inspection, but more virtual and some other inspections virtually. FDA don't have inspection. We did receive some questionnaires for some of our API files which reduced some inspection last year, and that was submitted. Other than that, I think everything is in compliance, and even inspection with ANVISA went well. That gives us confidence that in spite of no inspections from regulatory authorities for last two years, we are in line with our compliance record. Great, sir. Sir, what has been the Fosun contribution to our growth ever since they took over our company, and what has changed since then, and how is their growth mindset and any entry in China, rest of the world market they're opening doors for us or any positive development, sir? Yeah. I know if you really see it's not just before at listing. Even before listing, we've been growing for three years. It's Yeah. In 2015. Yeah. Correct. So the investments were made, whether it's infrastructure and the portfolio and the plan we made for, you know, long-term, that's all coming to fruition. Post Fosun, it really helped us in some of the markets because if you see the sales in some African markets has gone up very well. Where Fosun's network, we have been trying to sell our products to. China market we never looked at that market actively before. Currently we are looking at it because, like you said, one third of global injectable market comes from that market. So that's a great help in that sense. M&A with, you know, we don't have much experience in that side as well. We get lot of help from that, looking at the different assets and evaluating and doing due diligence activities. There are several areas where we cooperate and, you know, we get help from them. Sir, lastly sir, what are the CapEx plan and any concern on the increasing competition intensity in the injectable space for us, sir, from Indian companies and other companies also? Mr. Ravi addressed the CapEx plan. From competition perspective, you know, I've been saying, you know, any new competitor is good for us because we get one more partner who we can license our products to. Okay. On the CapEx plan, we have spent about INR 450 crores in nine months and would be spending another INR 100 crores in this quarter. That would take care of the INR 550 crores we initially indicated for this financial year's CapEx plan. Mostly it has been incurred on the vaccine facility expansion in Pashamylaram. Next year we are estimating about INR 300 crores of CapEx for further setting up the new lines in Pashamylaram. Also on the API side, we are adding capacity for more vertical integration. That is the CapEx plan for this year and next year. Dividend plans, sir? Giving dividend? Dividend, I think the board has to deliberate and decide. We cannot comment anything on that, no. Okay, thank you. Thank you. The next question is from the line of Prakash Agarwal from Axis Capital. Please go ahead. Hi, sir. Thanks for the opportunity, and congrats on good numbers. Sir, just wanted to understand, you know, a basic question that, you know, we've been doing great growth, and we have a good selection of products. But what we hear from, you know, the large Indian pharma companies also is that second half 2023, they are also coming with complex injectables. Do you think, from 2023, 2024, the competition level will increase and our long-term growth can taper a bit just from the base business, not the biosimilars? I mean, competition is coming from the last three-four years. You know, like I've been saying, our model is different. We are not a front-end company, so we cater to different companies. More competitors can come. We have products to license to this company. That's one. The portfolio buildup happens to any company over a long period of time. You know, it took us so many years to build 300 odd ANDAs, right? No company can develop so many ANDAs in a year. They'll also take time to go to that stage. The throughput we give and the technologies we have across different formats, it takes time for any company to do it. We are not that worried about the growth. Of course, the base is increasing, so not just the portfolio will help us grow the way we've been growing. We are looking at different avenues. That's one of the reasons we've been focusing so much on geographic growth drivers. The areas where we have not touched upon yet, right? I mean, if you look at the products what we have launched, it's only about $5.9 billion worth of products, and we're talking $130 billion across the globe. There's a lot more to do, and I think, you know, a lot of catching up to even for us and, you know, even more for companies who are coming new. That was very elaborate answer. Thank you for that. Secondly, on biosimilars. I heard you saying that currently we have adding capability of fill and finish. What is the three-five-year plan? Are there any therapeutic focus, autoimmune or otherwise? Do we plan to do the complete DS and drug product as everything? Or we would carve out our specialty in part of the business? No, in fact, we are doing both DS and fill finish, not just fill finish to start with. The vaccine DS plant, what we have created, that will be converted to DS once this vaccine project gets over. That's the plan. From beginning itself is a combination of both DS and DP. I think that's where also we have a little advantage over lot of other companies with the track record we have on the fill finish. It's not just fill finish we're looking at, both DS and DP. Sir, the product selection, I mean, is there a therapeutic focus? Are we looking at large products already identified or we are looking at the second wave which are yet to see any biosimilar entry? How are we thinking about product selection and therapeutic selection? Like I said, you know, this, we are not getting into the development of products. Whichever clients want a portion of that work, so we'll be acting like a service provider for them. Unlike the business what we're doing today, where we do both, you know. We do service as well as we do develop products. But for CDMO biosimilars, the idea is to work as a service provider for other biosimilar companies. Okay, got it. Lastly, sir, on the free cash flow generation, how do we think to use the cash over next three years? I mean, would it be largely for CapEx and part of a dividend or I mean, we are open to looking at large assets as well? We are primarily we have to look at areas where we can fill gaps what we have. There are several areas where we don't have capabilities yet in injectables. To build that, it might take years. To cross over that, we have to acquire some assets. There is a primary focus on that. Without putting too much pressure on the balance sheet, we are little risk-averse in terms of what we have to buy. Unless it fits perfectly into our long-term strategy and where we have gaps, that's where we're looking from an acquisition perspective. Also the investments into complex injectables is higher compared to normal injectables, so investments will go into that. We'll evaluate on the dividend and all that when the time comes clear, and the board has to decide based on the cash flow we have. Okay, perfect. Thank you for all your answers. All the best. Thank you. Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to Mr. Sumanta Bajpayee for closing comments. Thank you everyone for joining us today. We appreciate your participation during the call. I request you to get in touch with me if any of your queries still remain unanswered. Thank you. Good night. Thank you. On behalf of Gland Pharma Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.