Ladies and gentlemen, good day and welcome to Indoco Remedies Q2 FY 2025 Earnings Conference Call, hosted by Dolat Capital. As a reminder, all participants' 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 and zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Rashmi Shetty from Dolat Capital. Thank you, and over to you, ma'am. Thank you, Shifa. Good afternoon, everyone. I, Rashmi Shetty, on behalf of Dolat Capital, welcome you all on the Q2 FY twenty-five earnings conference call at Indoco Remedies. I would like to thank the management of Indoco Remedies for giving us this opportunity to host the call. Today, from the management team, we have with us Ms. Aditi Panandikar, Managing Director, Mr. Sundeep Bambolkar, Joint MD, and Mr. Pramod Ghorpade, CFO. I will now hand over the call to the management for the opening remarks. Over to you, sir. Thank you, Rashmi. Good afternoon, everyone. Thank you all for joining this call today. Let me draw your attention to the fact that on this call, our discussion will include certain forward-looking statements, which are projections or estimates about our future events. These estimates reflect the management's current expectation of the future performance of the company. Please note that these estimates involve certain risks and uncertainties that could cause our actual results to differ materially from what is expressed or implied. Indoco does not undertake any obligation to publicly update any forward-looking statement, whether as a result of new confirmation, future events, or otherwise. Thank you. I'll request Aditi Madam for her opening comments. Yeah. Good afternoon, everybody, and once again, thank you for joining us. It gives me immense pleasure to let you all know that, this August, the organization celebrated seventy-seven years of excellence in providing quality medicines and building healthier communities. This has been a tough quarter for us, but let me share some of the general business highlights with you. As regards to India business, we have seen good growth in most of our key brands and majority of our therapy this quarter. Cyclopam, the number one product of the company, the antispasmodic analgesic, has recently crossed a subscriber base of one lakh prescription subscribers in this quarter, and incidentally, the brand is also growing at close to 20%. During the quarter, in the India business, we also launched new products, namely, Rexidin Mouthwash, Sensodent Acid Pro, both in the dental segment, dental ethical segment, and Clatim 250 and 500 mg, which is a clarithromycin antibiotic, in the ethical segment, in our acute, division. Steve Jobs once said, about his life that there were good times and there were hard times, but there were never bad times. For whatever is worth, the international business at Indoco currently is going through difficult times, but very interesting changes happening inside the organization to prepare the company for the future, wherein, especially in the solid oral space, efficiency in manufacturing and agility of, product baskets are going to be the, need of the hour, and the company is preparing for that. As you might be aware, we have close to 15 ANDA in the solid oral space, of which at least two are great opportunities with tentative approvals for the future. Also, in the current basket, which is being supplied to the U.S., we have some excellent products, such as allopurinol, which are vertically integrated. The company has made tremendous strategic plans on a master manufacturing, you know, operations to harmonize our products at various locations, to increase batch sizes, to bring down costs for testing, as well as bring down other costs related to manufacturing. As part of this exercise, some of our plants are currently not in a position to supply all the orders that they have in hand. This added to this, we also have some challenges still in Plant Two, which is our sterile unit, where there is remediation going on across various lines for manufacture of ophthalmics and injectables. This remediation is in line with FDA, U.S. FDA's expectations. These two factors have largely resulted in our inability to supply products to the best of our ability, and we therefore see the international business, particularly that to the U.S. and Europe, having been impacted. Having said that, I would also like to share that in this period, Indoco received the final ANDA approval from U.S. FDA for Lofexidine tablets 0.1, 0.18 mg, with competitive generic therapy designation with 180 days exclusivity. Indoco also received approval from WHO Geneva for albendazole 400 mg chewable tablets. Our contract research organization, AnaCipher CRO at Hyderabad, has expanded its offerings with the new pharmacovigilance services there. Sensodent-K won the prestigious Rising Brands of India 2024 award in the sensitivity oral healthcare market. And we had a very successful launch, recently, of the new validated learning management system. This is all for me. I will now hand over to Mr. Sundeep to share the financial highlights. Yeah. Thank you, Aditi. Good afternoon, everyone. Hope you all are doing fine. Let me first begin with the business highlights. Net revenues of the company for the second quarter twenty-four, twenty-five shows muted growth at INR 3,946 million, compared to 3,942 million, when compared to the immediate preceding quarter. EBITDA in net sales for the quarter is 13.4% at 529 million, compared to 15.6% at 724 million, for the same quarter last year. EBIT to net sales for the quarter is at 128 million, compared to 331 million. Earnings per share for the quarter is INR 1.39, compared to 3.59. The above numbers are on standalone basis. We have declared results with consolidation, which includes results from subsidiaries. Domestic formulation business. Revenues from domestic business for the quarter grew by 2.9% at INR 2,346 million, as compared to INR 2,281 million for the same quarter last year. Major therapeutic segments, namely anti-infectives, respiratory and cardiac, performed well during the quarter as compared to the same quarter last year. On the international business front, revenues from international business are at INR 1,262 million, compared to INR 1,949 million for the same quarter last year. Revenues from regulated markets are at INR 866 million, as against INR 1,495 million. Revenues from US business are at INR 247 million, against INR 814 million. Revenues from Europe for the quarter are at INR 659 million, against INR 634 million. Revenues from South Africa, Australia, New Zealand, are at INR 20 million against INR 47 million, and those from emerging markets for the quarter are at INR 396 million, as against INR 454 million. Revenues from the API business for the quarter are at INR 301 million, against INR 358 million. And revenues from Anacypher CRO and Indoco Analytical Solutions for the quarter are at INR 36 million, against INR 64 million. That's all about the business highlights for the second quarter. I now request the participants to put forth their questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to unmute themselves while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question from the line of Mr. Rajat from Tata. Please go ahead, sir. Yeah, hi. Thanks for taking my question. Am I audible? Yes. Yeah. So as I can see, there is a CapEx of around INR 220 crore, which you have incurred in the first half. Can you just elaborate where this CapEx has gone? Yeah, Rajat. Pramod here. So, CapEx primarily is for the three reason. One is, specifically for the upgrading of the plants, which, I mentioned just now as a master manufacturing plan. We have been increasing, batch sizes, putting, new, machines, replacing old machines. That is, at all oral solid doses, plants. That is one. Secondly, we are upgrading certain lines, at our sterile plant at Goa two. That is another, you know, CapEx. And a certain portion of CapEx, the amount which you mentioned, includes certain advances paid for three lines, which we already ordered, one injectable and one ophthalmic. So these are the three major, you know, CapEx, which happened during last six months. Okay. Incrementally from here, how is the CapEx guidance looks like? So, this year, as previously also we guided close to about 200+ crores. Out of that, close, so about 180 odd crore is already incurred, so we don't see much, you know, incremental CapEx in the remaining six months or so. Sure. Sir, last question from my side. If I look at your Q-on-Q performance, I see there is a very sharp increase in other expenses year up to as roughly around INR 27 crores, while your sales is up only by INR 6 crores. So can you just tell us, like, why your other expenses have moved, so, like, I think it is such a sharp rise? Sure. So, as compared to quarter one, the expenses are increased by about 20-odd crores, particularly in our various sales promotional activities, advertisement sales promotional activities. And, in the travel of field, we have increased certain field force and travel related to that field force; it is also part of this other expenses. There is also some increase in commissions and incentives, since our CDMO divisions are doing very well. Yeah? Sure. Okay, thanks. Thank you so much, sir. We have next question from the line of Sudarshan. Sir, from JM Financial. Please go ahead, sir. Yeah, thank you for taking my question. I would like to understand. I mean, I understand that U.S. is a bit of a problematic zone for us right now, given the remediation, et cetera. But can you elaborate why we are seeing a decline in Europe as well as emerging markets? Yeah. So I think Europe and emerging markets are two different things, but there is one common thing for both these geographies is that both the plants supplying to emerging as well as Europe are also under you know the Master Manufacturing Plan upgradation. So while we have tried our best to stagger it somehow in Q2 it was not possible anymore to keep things pending as they would hurt us in future. Just to give you. And you know our Europe and U.S. plants also geographically we say Goa makes for U.S. and Baddi will make for Europe and Vadodara will make for emerging. As part of our, you know, attempt to have a very agile operations management system, we are trying to align the portfolios at various locations. Therefore, you know, whenever a location comes under renovation to meet with the, you know, the blueprint plan for, as per the Master Manufacturing Plan, a particular product to both geographies suffers. Somehow, in this quarter, that has happened, and one of our larger manufacturing unit, which supplies to Europe particularly, is under remediation, not because the regulators want it, but for us, because we've decided that that is how going forward, we'll get far more output from the same unit, at much lesser cost per unit. Apart from U.S., I mean, how far are we in terms of fixing up and ramping up for the other locations and in Europe and U.S.? I mean, I understand it's always good to harmonize the, you know, quality and other such things. Yeah, yeah. You're asking for solid oral? Yeah, for the solid oral. I mean, I'm just trying to understand now that, you know, as most of the practices and the process has been implemented in the other geographies outside the U.S. Yeah. What was your question exactly? No, earlier, I mean, we are seeing impact in Europe and we, you know, other regions as well, the semi-regulated regions, and we are basically trying to harmonize this and understand, you know, put things in practice. So I'm just trying to understand how the work with the USA, they are just mandatory. The others are working because it is more voluntary. So has the majority of the voluntary work been done for Europe and, you know, the emerging markets and which is starting to grow? Yes. Yes. Because, you know, it's, it depends. I think the perspective is very important to decide what is mandatory and what is necessary and what is voluntary. I think we are all aware of what is happening globally with increasing pace, and yo-yoing cost of goods, and particularly in U.S., with the drop in prices. I think our corporate operations planning have put together with the business teams of Europe, U.S., as well as emerging markets. And we have made a plan which will allow us to ride through these kind of rough cycles. Therefore, you may say it is voluntary, but we feel it is mandatory if we are to, you know, going forward, show better efficiency and better margin, both in Europe and the US. Sure, ma'am. The next question from my side is on the gross margin. If we are looking at, I mean, the API prices, largely my understanding is the chemicals and API prices have remained kind of benign. Would the drop in the gross margin largely be because of the, you know, the mix, the regional mix that we are seeing, or are we seeing any kind of a cost escalation on the? So which period you are looking for drop in GC? I am primarily looking at the second quarter, and probably in comparison with the last year as well as this. Okay, gross margins and costs and other operating. So because of at least two plants, two large plants are under this kind of you know tagged shutdown, planned or compulsory, the operating costs at those sites, other than the material costs, are of a fixed nature, right? So they remain. So finally, that so your... That is how the margins get impacted. Is that your question? Yeah, yeah, that explains the lower gross margin, but we have also seen the raw material prices increase. I mean. Is that primarily because of the mix, or is it primarily because the raw material prices have gone up? I just want to understand that more. Yeah, so Mr. Sudarshan, if you see the raw material prices, the overall trend is on a decreasing side. Of course, not significantly, but certainly we are looking at, you know, certain key raw materials at, you know, at a lower level. Of course, the impact of the same will reflect going forward in its quarters. But yes, product mix does matter. Yes. Because, you know, as of now, when with steroids being really down and whatever business for U.S. has come, it's become solid oral. So naturally, that impact would be seen in the GC, A. B. Also, like we have explained in earlier call, the company is in a transformational phase. In the past, much quite a substantial portion of our revenues for emerging markets used to come from milestone as well as royalties or, you know, profit share, et cetera, et cetera. But less of profit share and more of milestone. Now that Indoco has a front-end in U.S. of our own, and we are therefore keeping IP for ourselves, there is a minuscule amount that is coming from that. So, rather than, you know, the details have gone down, the entire, sort of, portfolio mix or product mix of the business has changed. So in order to keep margins for us in the future, we are kind of foregoing milestone currently. Does that answer your question? Yes, ma'am. And going forward, what should be the trajectory that we should expect in the near term, as well as to say, you know, in 2026, okay? See this, I think you can appreciate the last two quarters, at least Q1 was all right. We saw some impact of these supply constraints. Q2 has taken a maximum impact. Q3, while we remain optimistic, I have to say there would be certain constraints. So at this stage, I would want to wait for another quarter before I give guidance for the future. One final question before I join the queue. I think, you know, if I look at the data on the brands that you had given in the press and also in the AIOCD data and the growth that we are seeing, it looks like our, you know, brands are doing fairly well in the secondary market, but, you know, the primary sales is a little lesser. I mean, one is, what would be the reason, and should we see a capture playing going forward? I mean, should the secondary start reflecting on the primary data in terms of that growth as you start moving toward the primary? Okay, I think, when you say secondaries are good, we are looking at IQVIA or Pharmarack data, and primary, we are looking internal. Is that it? Yes. Yes, yes, yes. Yes, absolutely. So I think when you look at the internal data of IRL standalone, you have to factor in the aspect that two large toothpaste are now with the 100% subsidiary Warren Remedies. So the base sale of these two toothpaste continues to be at last year's same, which is why if you look at growth on primary, it would appear that we are not growing. Does that answer your question? Yes. Yes, yes. Yeah. That answers it. Thanks a lot, ma'am. I'll join back with you. Thank you so much. We have next question from the line of Ankit Minocha from Adezi Ventures. Please go ahead, sir. So, hi, good afternoon. Am I audible? Yes. Yeah. So, actually, I mean, in terms of the pleasure having the gift from the FDA in the last quarter- It is not very clear. I'm getting a lot of echo, maybe. If you can- Is it better now? Yeah, yes, much better. Yeah. Yeah. So, recently, an institution just put out that there was a visit by the FDA in the global facility. So, and there was an OAI indication that had also been stated in the past. So what exactly happened here? And, where does basically the new plan gets back to the other indications that were in the plans that you have to run? Yeah. So in 2023, we were audited by US FDA, and, after that audit, the plant was classified as OAI. While there were not any issues directly related to data integrity, cleaning validation, or any such procedures for a sterile unit. Yeah, FDA had cautioned because they felt that the plant was old and certain areas need remodeling so that more space is created. Also, some of our lines were very old, and, you know, FDA expected us to move from, you know, from glove ports to the, the future, isolator baseline, et cetera. So in order, and therefore we were classified as OAI. After that, we have submitted an outline plan to US FDA of how and when we propose to make these changes and complete the job. And accordingly, routine updates have been going to US FDA. As per this plan, much of the work was to be completed by the end of twenty twenty-four. And now, to our surprise, US FDA once again came in July twenty twenty-four. While the lines were actually opened up and are not ready for any kind of audit, from this audit there were seven observations, and we have responded to those observations, and again, we have got the same status, OAI. So basically, the way we look at it is once all the remediations on lines is over, USFDA is likely to come back for an audit before it can change the classification of the site. Does that explain your question? Yes. So it mostly does. So, just carrying on from there, in that case, at least in the earlier contours, we were expecting this remediation to get done by maybe Q3. So has that been now put delayed onto the entire process, and by when do you expect the- No, we still expect the remediation to get over by quarter three. Whether FDA coming down is going to or not coming down is going to hamper commercials from this site is something that we'll have to wait simply because they have continued the OAI status. But our technical teams are in continuous dialogue with USFDA to try and understand their concerns and understand how we have to move forward now. Because you know I don't know there was some when FDA was on site I think they misunderstood and said that we would be ready in November 2023 and not November 2024 which was really odd because all our communication said November 2024 or later. Okay. All right. And my second question is then coming to, I mean, if I look at operating margins on a, say, on a consolidated level, I look at the times in 2015 to even 2018, 2019, where the margins were around much higher levels. And currently, quarter to quarter level, looks like the OPM is 9%. Yes. I just want to understand from your perspective, where do you see this number kind of, the OPM on a consolidated level, where do you see this number go for the similar upcoming years? If you can offer any kind of trajectory considering all the challenges that you described. Right. Right. So, like I said to one of the earlier questions, at this stage, we are not very. We don't feel is the right time to give guidances. But I can help you understand why the consolidated picture is the way it is. So for consolidation, we have two subsidiaries for which sales are, you know, consolidated to the company, which matter more. One is Warren Remedies, which is making two of our toothpaste OTC, and also manufactures a few intermediate APIs for us for Indoco. The second is the subsidiary SDP, which is Florida Pharma, which is our vehicle for launching products in U.S. Florida Pharma is actually quarter on quarter has made great progress since its acquisition only more than just about a year more than a year ago year and a half ago. We feel very confident in the next six months especially after the supplies to US start smoothly. We expect the drain happening through SDP on the corporate to come down. Coming to Warren where the two toothpastes are in the market this is a phase where as part of the whole OTC you know product launch awareness digital marketing television marketing certain expenses especially on the promotion side are a little bit higher. But that is something which cannot be delayed. As a consequence of that, Warren Remedies is also on the negative, and the consolidated picture appears like this more because the parent, Indoco, you know, revenues are very sharp in comparison to the running costs of the organization. As explained earlier, we have not been able to supply and collect revenues against international business. Okay? Okay. Yeah. Thank you. I come in with you for further questions. Yeah. Thank you. We have the next question from the line of Abhishek from Padmaja Investment. Please go ahead. Yeah. Am I audible, Madam? Yeah. Yeah. So my question has been partially answered. On the European part, you are done with this Master Manufacturing Plan process, and can we expect the ramp-up from Q4? That's my question one. Yes, we can. Okay. So the European part is done. Emerging market part is done. US, so this current... And were there any repeat observations? So currently we see, like, seven observations and- No. Okay. But none were repeat. Okay. Okay. And, like, will it take, like, another one year to again get this classification changed? No, no, no. I don't think it should take one year. Had they not come in July, I feel by Q1 of twenty-five, they would've been the latest time they would have come down. Now that they've just come in July, we will stay optimistic to bring them down. And also, we are in talks with them to understand... And I don't think current supplies are of that size. So once the size comes up and is remediated totally and fully ready, I don't see why we have to wait for FDA audit to start supply. B ut you're going to be getting new approvals? Yeah, but that is not. Yeah, we have enough approvals, and actually, our order book, both for US and Europe, is very empty. So that is not very disturbing, and neither are we missing out on any big deadlines for any product. So that is not a big concern right now. Right now, for me, the urgency with which we can finish the projects, and you know, there are four lines. So one line is up actually just now as we speak, and every 15 days, a line will come up. So the question is whether FDA will want for all four lines to be going before they agree to come down. We are asking for a call with them since they have recently come and seen our site. We'd like to understand, if they have any other concerns. All that is going on, and I'm hoping in the next call, when I speak with you, I can give you a much better guidance. Okay. There has been improvement, sequentially, compared to Q2? Yeah. So US business is not all about sterile for us. We do have a solid oral plant, which is Plant 1, and there is a small amount of business we have currently of solids. That also, work is going on to ramp it up. So, there will be improvements, surely, but, as you rightly said, Q4 would be probably a better time for us to see upside coming from smooth functioning of plant. So on the Europe part, it is completely done now, and in Q4 also it's nothing rampant? Europe is almost done, yes. Okay. But, revenues haven't started yet optimally for it. We will expect it. Yeah. Okay. Thank you, ma'am. That's it. Thank you. We have next question from the line of Ankit Mitra from Fenomics. Please go ahead. Am I audible? Yes. Good afternoon, ma'am. Thanks for taking my question. My name is Ankit Mitra. Ma'am, my first question... I have a couple of questions. The first one is related to the OTC, like, whatever the advertiser or the promotional expenses have been added to the other expenses. As OTC products, these are all from the OTC products, right? So going forward, like this OTC products, you will keep on adding, and so this will this expenses, this promotional expenses, be there going forward? Typically, if you are aware, there are various categories of products. You have frank ethical, then you have BTC, as it's called, behind the counter, then you have OTX, and then you have frank OTC. Depending on where your product is positioned, the amount of expenditure that is required is different. Not all the products we intend to take beyond ethical will always go frank OTC. These two toothpaste had to go frank OTC because the largest competitor we have, which is Sensodyne, has almost close to 70% of its revenues coming from channel outside ethical, that is, chemist. Meaning, they sell at grocers, they sell with modern trade, and they sell even with the panwala. So we had to go there, and since this kind of a supply chain expansion, a shift in the structure of how goods are distributed, in order to keep your new SDs and new, you know, purchase partners and the GTAs, that is, the grocers, you know, sort of positive on the product, because they don't know this product, right? The chemists know the products because they've been there for twelve, one years. So for the channel partners also to get confidence, the company has planned strategically the kind of inputs that we would require, specifically advertising on television and digital spend on YouTube, Facebook, et cetera, and we have been doing that. Coming to your question, future products as they come, as they go OTC, will the spend remain? No, it doesn't mean that with every product, this kind of a spend is there. Also, sometimes for the first time, when a company goes OTC, such a spend is required, and that's what we are doing. Okay. So maybe a small component may be there. You know, if I were you, I would concentrate on growth in sales because we have gone OTC. Because the whole thing about going OTC is getting a much larger market from which to get a share, and while this expenditure initially is like an investment and we should be prepared for that. Yeah? Okay. Okay. Ma'am, my next question is, what kind of revenue addition can we expect from this OTC product in FY 2026? So the two right now only two toothpastes are there, with some various you know SKUs, as in pack sizes. But largely, there are just two, and these two for the current year we expect them to do in excess of INR 120 crores, which would still be a decent growth over their you know, I think if I'm not mistaken, when they were in ethical it was around INR 85 or 90 CR. So this is the first year, but as the awareness with consumer, the reach to consumer, the. We incidentally now subscribe to Nielsen data also, where we measure what is called weighted or numerical distribution, sorry. where we are consistently seeing a 15 month-on-month 15% increase in the counters at which the product is being carried. These are all kind of foundation, you know, activities to prepare for a much larger sale as we go ahead. So I'm very confident, and I feel surely and certainly that in the second year we can definitely expect 25%-30% growth from these two products itself. Okay, great. Thank you. Ma'am, do you position your products in this toothpaste which is a normal toothpaste, or do you, like, consider it as only the cure of Sensodyne? No, not necessarily only Sensodyne, but sensitivity market. As per Nielsen, in the sensitivity market, we are number two to Sensodyne. Okay. Okay. Thank you so much. Best of luck, ma'am. Thank you. Thank you. We have next question from the line of Mr. Sudarshan from JM Financial. Please go ahead, sir. Yeah, thank you for taking my call. I would like to understand a little more on the debt side. If I look at the long-term debt, we are seeing some kind of an increase and also in the short term that we are seeing, you know, kind of an increase. I mean, historically, we never had an issue in terms of interest cost, but given the negative operating leverage, and if we look at the interest today and the first half, you know, it is slightly higher than what one would have expected as compared to what we have ever seen in the past. You know, in the context of, you know, one significant growth- Hello? Hello. I think his line got cut. Sorry for the interruption. The line from his side got disconnected. Oh, shall we wait for him to join back? We can proceed with next question. Okay, okay. So the next question is from the line of Ankit Minocha from Adezi Ventures. Please go ahead. Hello? Please go ahead, sir. Is there a problem in the line by any chance, ma'am? Since the second caller also is not able to speak. Give me a moment, ma'am. Your pass code has been confirmed. Please wait while you're joined to the conference. The conference is now- Yes, Shifa, can you hear us? Rashmi? Rashmi? Sorry for the interruption. Please go ahead with your question, sir. The next question from the line of Bhavani Desai from Turtle Capital. Please go ahead. I think he- Shifa, Rashmi, can you hear us? Hello? Sir, just give me a moment. Sure. Hello? Hello. Mr. Dhananjey, you are on talk mode. Please go ahead. Hi. Am I audible, ma'am? Yes, yes. Please go ahead. So, I have one question on the U.S. business. So in U.S. and, you know, move the business model from kind of licensing out our brand to front end, you know, you know, how long this transition is going to take and whether, you know, all the existing brands and the registered products will also get transferred here? And if so, what is the timeline? If you can talk a bit about that. Yeah, thank you for the question, so no, in answer to your question, not all products which were licensed out are being brought in, but further products are not getting licensed out, so the milestones therefore are not coming in. We have some excellent relationships with front-end, other front-end partners in U.S., with whom we are quite happy, especially in the solid oral space, and those continue. Much of the ophthalmic and sterile opportunities, though, we would prefer to do through FPP going forward. Many of the products which we had licensed out to Teva, for example, are now back with us as part of the arrangement, and those are also being relaunched through FPP. Does that answer your question? Yeah. So, so approximately what percentage of your portfolio now is back to you and now going to front end, existing one? See, volume and value are two different things, because you will get volume in solid orals and value in ophthalmic. So, roughly I would say around 60/40, with 60% going with FPP and 40% still through others. Okay. Okay. And that 40% is now currently everything is now through FPP, right? No, no, no. Sixty would be through FPP, forty is currently with other partners. So 60% is already being done by our own company currently? Yeah, planned to be done. Once the supplies are done. It's not done? No, no. Got it. Thank you, ma'am. That's it from my side. Thank you. We have next question from Ankur Agarwal from RC Business House Private Limited. Please go ahead. Good evening, ma'am. Ma'am, the kind of capacities we have and the product line we have, if we remove this factory, what growth can we predict in the coming three to four years in the company? In the process and top line. Yes. Thank you for the question. You have asked the right question. You know, the kind of things that I said earlier, literally, we are looking at, incrementally getting 50% more from each of our sites, each of the factory. So from each factory, you know, 60% more output can come from solid orals. Not only this, but the capacity of each batch has also been increased, so testing costs associated with it, process times required to manufacture, each batch is being reduced. And I would not like to unnecessarily commit, but, I'm actually hoping that as the numbers come out, you will see the beauty of, what this kind of restructuring does. But, if you understand our whole business, so the India business is branded, and the emerging market business is also branded. U.S. business is generic, that too, earlier it was generic support, now it is our front end, so it will become ours in the future. The Europe business is 90% contract manufacturing even today. And in this kind of business, if you see, the paracetamol that is sold in the U.K., we have 60% of its market. So when we have captured such a large market share in the future, then when its efficiency increases, so indirectly, its benefit comes on the company's margin. And we are waiting for these kind of beautiful things to come out and show by way of profitability. Is there any internal target for this? Yeah, as I understand, we are expecting from a EBITDA perspective, at least great increment to happen. But because of what we are going through right now, you can understand that I would prefer to wait for one more quarter before I give you the answer. So the BioSecure Act that is being passed or has happened in the US, how does it benefit us? The BioSecure Act can give a lot of CDMO business to India. We may get a direct impact from a manufacturing side. We are not in the bio-generics or bio-pharmaceuticals sector today, so we may not get the direct advantage of manufacturing, but the associated research, that is, contract research, to do parts of the work, analytical research, our analytical services division is there. The related - the bio studies related to this, the business that will be given to CRO, and all those advantages we can get. Normalized business, we understand that after April two thousand twenty-five, things will come in line. Yes. Thank you very much. Okay. Thank you, ma'am. Thank you. We have next question from Sudarshan from JM Financial. Please go ahead. Sorry, I got locked up. Ma'am, I would like to understand on the debt side, if I look at you from March to September, both on the long term as well as the short term, there is been INR 80 crore addition. It's more or less like INR 140-INR 150 crore addition. I understand that there is some CapEx that you are undergoing necessarily to utilize in capital. I mean, if I look at it from the context of, you know, the operation, you never had an issue on debt, you know, per se, but given the fact that, you know, our margins are contracting due to a variety of reasons, it tends to impact the profits. So can you give some color on how do you see the debt, you know, evening out, say, in the next couple of years or so? And second is, you know, on the tax, even in the first half, there's a loss. It's more of a bookkeeping question. Should we take, you know, lower tax rate, taking the benefit of the losses that you made in the first half? So let me answer first on the business, and then I will let Pramod take on some of your sticky issues on the borrowing. So you said. I think there is something you said which I feel needs correction. You said margins are contracting, which is actually not true. Margins are not contracting. The efficiency we are building in is to increase the margin and also to prepare for the kind of business we are expecting, both from Europe and US going forward. The enhancement in capacity is being done. So you know, it is correct from your side to wonder why so much CapEx is being companies incurring CapEx, whereas on one side, historically also, you must have seen that utilization was less. You know, there is a very funny aspect of capacity. How you calculate capacity is also very important. What has happened in the generic space, especially in US... and, of course, UK for a number of years, is that in order to ride over the kind of price drops, et cetera, each manufacturing unit has been trying to do a multiple or, various kind of product mix. This kind of a mix, when it comes to operations, poses all kinds of challenges, whether it comes to line change, you know, especially in sterile with the media fills, et cetera. Eventually the unit becomes less agile. On paper, it would look like 60% capacity is utilized, but finally, when you ask them to make one more batch, they have lost so much of downtime that they are not able to cope. What we are doing right now as part of the Master Manufacturing Plan is to bring down all such things. It might appear to you right now that the company is investing when it may not have required this investment, but trust me, that the investments that are being done now are to prepare for a time when the huge volumes will start. Let Pramod now explain to you about the borrowing. Yeah. Thank you. So Mr. Sudarshan, if you see, as compared to March, our long-term borrowing first in Indoco has gone up by about 54 crore, primarily towards the CapEx, what we discussed in detail in our call, the master manufacturing initiatives and the site to site upgradation and the new lines. So that is the primary reason for increasing long-term borrowings. Short-term also, it is increased by close to about 60 crore. So that is all investment into various new initiatives, what we have carried on. Then, there is a slight, you know, increase in borrowing in Warren, one of our subsidiaries. Again, that is towards the CapEx related to Warren new business. You know, API finished goods lines are – we are just order, and we expect that to get finished within the next six months of time. So primarily increase in borrowings towards creating new capacities, investment for the future. In one more area, that is particularly on the stability lab. So we have now centralized stability, newly created at Vadodara. So plan is to basically move most of the stability labs spread across various plants to this one central place, to you know, bring in efficiency, to reduce cost. So all this is for investment for the future, Mr. Sudarshan. Yes, and what would be the debt that you are comfortable? Do we have any number in mind over the long term? Not really. So as we discussed, we don't expect much of the CapEx going forward. You know, it will be like a running maintenance CapEx or so, but that most probably we'll be able to absorb through our internal accruals. But maybe incrementally, may close to about 40 to 50 crore may require intermittently, but not beyond this amount. And I missed your one question that is on taxation. So we are already on a lower tax rate, Mr. Sudarshan, in the core at this point of time. Thanks so much. I stand by. Thank you. The next question is from the line of Abhishek from Padmaja Investments. Please go ahead. Yeah. My question is, currently we have close to twenty-five pending ANDA at our site when it comes to U.S. Close to? Yes. 20, yeah. Of this 25, how many will be sterile and ophthalmic products versus Solid Orals? If I'm not mistaken, close to six are non-sterile. The rest are sterile. Okay, and are there any paracetamol and peptides also in this? I think you will appreciate that we have stopped giving this kind of disclosure now. Oh, okay. Okay, thank you. Thank you. That's all. Thank you. The next question is from Maulik Varia, from B&K Securities. Please go ahead. Hi. Thank you for the opportunity. I hope I'm audible. Ma'am, just wanted a little clarity to your facility supplying to emerging markets and EU were under the renovation under the Master Manufacturing Plan? Yeah. So I might have missed the point, but when is it expected to be completed, or has it been completed by September end? So we have two sites supplying to Europe right now, and one for emerging. The emerging site is almost done. One of the European sites is done. The second one is almost complete. Okay. And during the Q2, was the site completely shut for some? No, not all. One of the European sites was almost not available, and the other two were partially available. Okay, okay. For the entire quarter? Yes. Okay. Okay, okay, ma'am. Thank you. Thank you so much. Thank you so much. We will be taking that as our last question, but as there are no. I would now like to hand the conference over to management for closing comments. Thank you all for the very, interesting questions, which has allowed us to, express our position. Thank you very much and have a good day. Thank you. Thank you. On behalf of Dolat Capital, that concludes this conference. Thank you for joining us. You may now disconnect your lines.