Ladies and gentlemen, good day, and welcome to Indoco Remedies Q1 FY 2027 Earnings Conference Call. As a reminder, all participant lines will be in 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 Ms. Rashmi Shetty from Dolat Capital Market Ltd. Thank you, and over to you. Thank you, Atharva, and good afternoon, everyone. I, Rashmi Shetty, on behalf of Dolat Capital, welcome you to the Q1 FY 2027 Earnings Call of Indoco Remedies. We thank the Indoco Remedies management for giving us this opportunity to host the call. Today, we have with us the senior management of the company represented by Ms. Aditi Panandikar, MD, 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 several 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 information, future events, or otherwise. Thank you. Now, I'll hand over this mic to Ms. Aditi Panandikar for her opening comments. Thank you. Thank you, Pramod. Good afternoon, everyone, and a very warm welcome to our Q1 FY 2027 Earnings Call. I will commence with perspectives on our performance during the first quarter of financial year 2027. Despite operating in a very dynamic market environment, Indoco has maintained its growth trajectory and focus on strategic execution. During Q1 FY 2027, our standalone operational revenue grew by 5.8% year-on-year to INR 4,081 million, with consolidated revenue reaching INR 4,662 million, up by 8.2% year-on-year. Standalone EBITDA saw expansion to INR 422 million, delivering an EBITDA margin of 10.3%. This steady performance highlights our operating momentum backed by strong execution across our core domestic formulations franchise, regulated international markets, and our vertically integrated API platform. On the regulatory approval side, I'm pleased to share that our Baddi Unit I successfully completed Malta Medicines Authority audit, while our Baddi Unit III facility received E.U. GMP certification from the German Health Authority, Berlin. Adding to this, our Goa Plant I successfully cleared the Malta Medicines Authority audit. The facility has E.U. GMP certification from the authority, confirming that it complies with the good manufacturing practice requirements as referred in the EC directive. I'm happy to share that Indoco Stability Center, IAS at Chhatrapati Sambhajinagar, Aurangabad, successfully completed a pre-approval inspection by the U.S. FDA with zero observations. Moving to our domestic operations. Our domestic formulations business recorded revenues of INR 2,040 million in quarter one, FY 2027. As per the IQVIA MAT June 2026 data, Indoco continues to maintain a solid position in the Indian pharma market at the 33rd rank, while maintaining an impressive 20th rank MAT May 2026 in prescription volume. The strong doctor connect is driven by a field force that reaches over 242,000 prescribing doctors across various specialties. Through an emphasis on building and scaling high-margin brands as per IQVIA MAT, June 2026, our top five flagship brands now contribute 42% to our total domestic portfolio. Cyclopam continues its trajectory as a major growth champion, achieving 44% absolute growth since 2022 to now reach INR 196 crore on the verge of becoming a landmark INR 200 crore mega brand. Following the post-COVID market realignments, acute products like Febrex Plus have now stabilized and rebound to a turnover of INR 118 crores. Mid-size brands are emerging as primary growth drivers for our domestic business. Our focused portfolio, including SM Fibro, Rexidin-M, Oxipod CV, and Dropizin, recorded an aggregate growth of 86%, with Dropizin delivering a 3x breakout to reach INR 14 crores. Furthermore, Indoco has established multi-brand market leadership in targeted sub-segments, boasting four distinct brands in the top 20 of the stomatological market. It is worthwhile to mention that the divestment of the ophthalmic division in India and agreed territories in Africa is an important step in sharpening our focus on core therapeutic areas with stronger potential. Now turning to our international operations. International formulations contributed 35% of the quarter one FY 2027 revenue. At INR 1,451 million, while our active pharmaceutical business delivered a stellar performance this quarter, surging to 42% YoY and a turnover of INR 522 million. With consistent growth, this platform provides crucial backward integration for our formulations pipeline, ensuring both cost competitiveness and supply chain security. Looking ahead, I'm confident in our ability to sustain profitable growth across all core businesses. In India, our priorities are scaling mid-size brands into mega brands, deepening specialty prescription share, and expanding our chronic footprint. Internationally, we will leverage our integrated R&D, CRO, and API capabilities to accelerate high-value filings in complex ophthalmics, injectables, and oral solids. Grounding these ambitions is our relentless commitment to cost optimization, operational excellence, and long-term shareholder value. Thank you. I will now hand over to Mr. Sundeep, who will present the detailed financial highlights. Good afternoon, all. Thank you, Aditi. Let me first begin with the business highlights. Standalone net revenues of the company for the first quarter of FY 2026-2027 grew by 5.8% at INR 4,081 million, compared to INR 3,856 million for the same quarter last year. Consolidated net revenues of the company for the first quarter are at INR 4,662 million, compared to INR 4,309 million for the same quarter, and INR 4,559 million for the immediately preceding quarter, that is Q4 FY 2026, at 8.2% and 2.3% growth respectively. Standalone EBITDA to net sales for the quarter is 10.3% at INR 422 million, compared to 3.8% at INR 148 million for the same quarter last year, and for the immediate preceding quarter is 14.7% at INR 630 million. Consolidated EBITDA to net sales for the quarter is 8.8% at INR 410 million, compared to 4.1% at INR 175 million. For the immediately preceding quarter, Q4 FY 2026, EBITDA is 10.9% at INR 497 million. Domestic formulation business. Revenues from domestic formulation business for the quarter are at INR 2,014 million as compared to INR 2,028 million for the same quarter last year. Major therapeutic segments like urology, gastrointestinal, vitamins, stomatology, and dermatology performed well during the quarter as compared to the same quarter last year. Now on the international formulation business front. Revenues from international formulations grew at 2.8% at INR 1,451 million, compared to INR 1,411 million same quarter last year. Revenues from regulated markets for the quarter grew by 19.3% at INR 1,133 million, as against INR 950 million. Revenues from the U.S. business for the quarter grew by 62.2% at INR 459 million, as against INR 283 million. Revenues from Europe for the quarter grew by 2.5% at INR 650 million against INR 635 million. Revenues from South Africa, Australia, and New Zealand are at INR 24 million against INR 32 million. Revenues from emerging markets for the quarter are at INR 317 million as against INR 461 million. Revenues from API business for the quarter grew by 42.4% at INR 521 million as against INR 366 million. Revenues from AnaCipher CRO and Indoco Analytical Solutions for the quarter grew by 36.2% at INR 69 million against INR 50 million. That's all about the business highlights for the quarter. I now request the participants to put forth their questions. Thank you. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their 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'll wait for a moment while the question queue assembles. The first question comes from the line of Nirmam Mehta from Unique PMS. Please go ahead. Yes. Thank you for the opportunity. Ma'am, my first question is, any update from the U.S. FDA about the launch? No, we've not heard anything yet, but let's keep our fingers crossed. Hoping in the next couple of months. Okay. Secondly, on our international business. When we see revenues are largely flat, the U.S. business has grown, but Europe business has not grown, and there's a degrowth in the emerging markets. Are there any concerns or do you expect these markets to grow for this year? Yeah. I'll start with the emerging business. As you know, emerging is a branded formulations market. Sometimes for the March quarter end, there is a bit of a push, and especially with the war-like situation, and there were shortages of products. There was a good amount of primary billing in March. If you look at the March, April in combined, then we are still doing a much better per month sales. I'm sure this is only a temporary one-quarter glitch. Even for the European markets? Yeah. Europe is about rolling orders. Probably it is just about the timing. We must have not been able to sort of release products on time, et cetera. I'm sure there is nothing fundamentally wrong. Okay. On the domestic business, Indoco standalone business plus the Warren, I think, even that business has been flat. Any comments on both of that? If you look at the top 10 large brands of the company, then we have got almost all segments in double-digits positive growth, except two segments. One is anti-infective and the other is respiratory. Both are very seasonal, and this year we did not get rains in June. There was almost a one-month push-over. I expect that is why on a Q1- Q1 basis, you see that drop. If you look at performance on the immediate preceding quarter basis, you will see a good growth because the season has started to come in, but it is not equivalent to what it was last year. Sadly, the wonderful performance by all other brands, whether you look at Cital, Cyclopam, you look at some of the other brands like, I think, even all the dental products have all done very well. It is only Febrex Plus, Karvol Plus and one antibiotic which are heavily degrown on the primary, that too. What would be the potential for these brands? I mean, the India business, can we grow double digits here for next one, two years, or these are high- single-digit growth brands? How do we look at these? As the top 10 brands contribute more and more to total turnover, we are much more in control of delivering a more consistent performance. You should expect higher single-digit to double-digit growth in India business going forward. Okay, ma'am. Lastly, on the margins. While the margins have grown year-on-year, but our gross margins have taken a hit for the quarter. You expect these gross margins? Gross margins, this quarter, we had an impact of the increase in cost of goods because of the war situation. A lot of the products, there were shortages, even in availability of materials, let alone the increased pricing. For this particular quarter, you see COGS impacted and almost by 2 percentage points our cost of goods has gone up. Otherwise, the performance would have been even better. Okay. We expect double-digit margins for the year? EBITDA margins. That is what we are aiming for. Sure, ma'am. Lastly, just on the debt and interest costs. Pramod, if you can highlight the debt number and how do we expect the interest cost to pan out for the year? Overall debt, we have reduced by almost about INR 30- odd crore as compared to what we used to have in March 2026. Overall debt level remains at around INR 930 now as against INR 964 as of March 2026. We have repaid a certain term loans. This is both put together, long term and short term, put together. The interest cost, as we discussed last time also, it is in the range of 9% overall, which is quite competitive at this point of time. That's it from my side. Thank you and all the best. Thank you. Thank you. Before we take the next question, a reminder to all the participants, to ask a question, please press star and one. The next question comes from the line of Sudarshan Padmanabhan from ASK Wealth. Please go ahead. My question is, if I look at the U.S. business, we have a fair basket of ophthalmic products. If you look at it might be one and certain other products as well, like glaucoma, etc. If you can give some color with respect to how do we see launches in the U.S. and probably traction in the existing products, and also some color with respect to how do we see pickup in the European market going forward et cetera? European market, as I said already, this was a one-off quarter where there was a dip. Otherwise, we expect very good consistent performance for Europe. There is a good product basket, very predictable. We supply Europe from our Baddi site and some also comes from Goa. For U.S., you asked specifically about new launches. As you know, for the sterile business, our new product approvals are at aid because of the U.S. audit, which is yet to happen. All the same current products, including brimonidine, dorzolamide, as well as solid orals like allopurinol, glimepiride, varenicline are doing exceedingly well. For the solid orals of the future, of course, we have some products which we will be able to launch post-patent expiry in 2027. There are some early patent expiries expected in Europe next year. We will talk of them as the time approaches. Do we have any aspiration for, say, FY 2027, FY 2028 for European and U.S. business? Specifically with respect to VIGAMOX. How do we see this product gathering momentum, and how big could this product end up being? As I said, at this stage it is better to not say anything about ophthalmics too much. I would wait for the U.S. FDA audit to happen, after which we should discuss more concretely numbers. Ma'am, with respect to the cash that is coming in primarily post the transaction. One, what should be the use of it? If I look at the domestic business, as you mentioned, I think the anti-infectives have been a little bit of a joker in the pack. A little bit more volatile than what was expected. Would you be primarily looking to repay debt or is there a way where we can buy growth in certain? Going forward, definitely the company will look to invest in acquisition of brands possibly for India business. At this point in our journey, it was more important to repay debts, I think. Some of this money that is accrued has gone towards that, for sure. Yeah. Sure. With respect to, one is the operating leverage as the scale picks up. Probably the last few quarters is clearly not the right representative of the business trend. Where do we see the steady state margins going forward, say, in the next six months or the next two years? You must have noted, we are not giving any definite guidances on margins exactly. If you have looked at the performance of the company over the last nine quarters, you will agree the last two quarters show a very clear upward trend in improvement in performance. Okay? Although I agree that international business this quarter has given a bit of a dip, but otherwise, consistently across domestic, international reg, and as well as API, you see a very consistent growth. API division in particular has done very well. We expect margins to keep improving quarter on quarter from here on. Sure, ma'am. One last question before I join the queue is, one is of course operating leverage. Do you see any areas where we can reduce the cost, improve the efficiency, given that we have seen challenges as far as growth is concerned? Right. You remember we must have spoken earlier about our master manufacturing plan, whereby we increased efficiency in the plant, increased batch sizes, looked at reorganizing the product mix across various locations, looked at reducing process time, increasing speed of packing, et c. All that now structurally is in place. As the orders start flowing in, this will result into requisite numbers. Even for this first quarter, if I have to tell you, if we look at the value of product made first quarter last year and first quarter this year, and if you look at the number of batches taken, we have actually manufactured 26% less batches. That definitely will result in efficiency over a period of time. We have also reduced the number of people engaged in operations. Due to the high-speed machines, due to automation, we're able to optimize that. All of this eventually will slowly start showing in the margin. Does that answer your question? Yes, ma'am. Thanks a lot. I'll join the next queue. Yeah. Thank you. The next question comes from the line of Kenil Mehta from Boring AMC. Please go ahead. Ma'am, just wanted to know, any particular reason why we haven't scaled up our emerging market and European business? Over last few quarters, we were very bullish. Yeah. Kenil, like I answered earlier, emerging business is a branded business. Also, to Africa, emerging business, when it is sold, is like booking primaries. I just looked quickly at the secondary growth in the emerging business quarter- on- quarter. They're extremely steady. Good double-digit growth in secondary demand. This kind of fluctuation you see over the March quarter and then the first quarter next year. Of course, there were challenges of product availability because of war issues. There were some challenges related to being able to get the right freight at the right cost. Those things were there, they have not impacted much. The real impact is that after a very high range, emerging was on 110%, 101% last year. You expect a little bit of that, and then the first quarter does take an impact. To that extent, there has been a bit of a impact from emerging, fundamentally, secondaries are doing really well. I therefore expect primaries to rebound immediately as in the second quarter. Coming to Europe, again international business reg did a record-breaking number for the March quarter. For this quarter, looking at the rolling plans from some of our European customers, it is just one quarter where we've not been able to ship a lot and therefore not booked it. I don't expect this to be a very big problem. I think as of now, we have in excess of INR 250 crore of orders in hand for execution. This is not on account of not having orders. It is probably just the timing of it. Okay. This order book is for three to six months or for one year? That is the thing. Most of our buyers and partners, we've been in partnership for a very long time. I think some of my boys, when they do their KRAs, work it out, they push a bit here, push a bit there. What I'm trying to tell you is that the order book position is really very good. Fundamentally there will be good growth. Not to worry. Okay. The target we fully expect doubling our export business in two to three years. Is it in line? Six or seven- Yeah, we are definitely in line for that. Understood. Does that include all the new products also? Yes, definitely. I wanted to. Everything is included. Okay. Wanted to know the capacity utilization for the Baddi plant, MFP, both plants, and the Goa injectable separately and OSD. Okay. I think Goa Plant I, right now on a single shift basis is occupied to 80%, roughly. 70%-80%. 70%-80%. Baddi I, which is a smaller capacity, high-value kind of plant, is also occupied to the range of 70%-80%, on a single shift that too. Baddi III, which is the large plant which makes paracetamol, again in the range of 70%-75%, if I'm not mistaken. Yeah. Okay. All the incremental as we expand our quarterly exports to INR 200 crore mark will lead to higher efficiency than margin expansion? Yes. This quarter unavailability to supply has not resulted in the top line. As you correctly said, as these capacities get further utilized, you will start seeing the efficiency. Understood. Going forward, do you think in this financial year we will see a bad profitability for a quarter going forward, like coming quarters? That's what we are working for. Understood. Ma'am, just a suggestion, can you give the breakup on PPT, FPP, what was the revenue of FPP and profitability and Warren separately so we can get to know where the hanging fruit is. Because if FPP is getting profitable during this quarter, then the Warren should also improve the numbers going forward, so we can get to know the consolidated numbers in a simple manner and where the issue is. It is going or not? We'll send this information. Okay, understood. Thank you. Thank you. The next question comes from the line of [Kaustubh Ghugna] from Kamana Holdings. Please go ahead. Yeah, hi. I'll try to ask this question in a different way. If I look at your FY 2026 numbers, and I add your interest cost and depreciation, that is around INR 250 crore. Around. Right? The last two years, our operating profit of the company is probably half of this number, half of this INR 250 crore number. Obviously, debt has increased, which has increased your finance cost, which is a key trigger to this finance cost increasing and this INR 250 crore number I spoke about. What I am trying to understand is, moving forward in the next couple of years, could you identify the key possible triggers that could take this INR 150 crore-INR 160 crore operating profit towards higher than the finance plus depreciation cost together so as to turn profitable on a PBT perspective? Yeah. If you look at our business, there are three main segments really. One is the India business, which is the most profitable, obviously. Emerging follows very close, almost same levels. These businesses, there is nothing to worry about how profitable they are or whether they return cash and things like that. As these businesses grow fast, of course, this will come into operating profits. The international business, especially the one to Europe, is now of quite a substantial size. Given the kind of investments we have already made in improving efficiency at the plant, this business, on the high number, when profitability of this business improves, it will also come down into operating profit. U.S., on the other hand, is right now in a high growth phase. Meaning it is very small and we will continue to sell more. While this U.S. business at a GC level is very profitable, U.S. has its own challenges on working capital cycles, et c. It will add, but it will not dent too much. As for me, from a scaling of operating profit angle, one should look at India and emerging steadily adding to it, and one should expect increased profit coming from Europe. Okay. What about your debt levels? How do we plan to get this down? Do you have any targets? Yeah. I'll let Pramod handle that. Yes, [Kaustubh]. Our debt level, long-term debt is at currently INR 600 crore. We have another about INR 100 crore + repayment schedule, which is for this particular year, July to March, and short-term is in the range of INR 325 crore. Both put together, we are at around INR 930 crore at this June end. We are repaying as per our repayment schedule. This particular year, as you would have seen our EBITDA number, and probably we'll have better numbers going forward in next three quarters. We'll be able to repay the principal as well as interest component for remaining three quarters. Is it realistic to talk about INR 500 crores long-term plus short-term debt together in a few years, or that's too ambitious? Yeah. Certainly. Our objective is to repay INR 110 crore this year and another INR 150 crore in next year. Around INR 260 crore we are going to repay within next about 17 months-18 months. Okay. Understood. Thank you so much. Thank you. Thank you. The next question comes from the line of Pratik Kothari from Unique PMS. Please go ahead. Hi, good afternoon. First, ma'am, these excellent numbers on other expense and employee. We have been talking about it, but finally, we are seeing it in numbers. These are sustainable and you can just highlight what went behind this to get to these numbers? Yeah. Thank you for that. This is something we've been working on for a very long time. As you know, the company employs close to 6,000 people, and half of them are in field as sales, and a good 40% are employed across various manufacturing sites in particular. Here we have seen maximum efficiency. As I mentioned earlier, 26% less number of batches have been taken to get equivalent or more sales for international business this year. Consequently, we've been able to bring down the number of people engaged in operations via quite a large number, quite honestly. Close to 900 people have been reduced. In addition to that, with the hiving off of Ophthalmic Business Division, 200 people engaged in that activity, their cost also for one and a half month this quarter has come down. We are consistently looking at bringing down employee cost. We are consistently looking at reducing cost of repairs and maintenance, stores and spares. There is a very deep planning involved in operational efficiency to the extent that if we have to run one shift, we run only one shift, nothing more. Keeping utilities in check, looking at unnecessary expenditure which can be postponed. Lot of work going on, and I think you're able to see that. Great. Sorry to interrupt, sir. Your voice is not clear. May I request you to please use a handset? Sure. Is this better? Yeah. Yeah. To Pramod sir, INR 930 crore of debt, 9% interest, that doesn't reconcile with this INR 28 crore a quarter or even if you look at last five quarters, it's been above of INR 25 crore. Can you just highlight where is this? Yeah. Pratik, there are two components. One is term loan and second is working capital, the short-term component. Short-term, INR 320 crore, as I said, it depends on the cycle of collection. In case of domestic, as you know, we have 7 + 21 days of kind of a collection cycle, while in case of exports, each market has different terms. Depending on the collection cycle, our short-term also varies. Sometime it will be less than INR 300 crore, sometime it will be INR 320 crore, INR 330 crore kind of short-term cycle. Based on that, interest value or in terms of quantum will change. That is one. Secondly, certain exchange losses are also factored as a part of finance cost. Purely finance cost 9% on an average of INR 900 crore, you can see roughly about INR 81 crore. If I split between a quarterly, it is around INR 20 crore. That is why average interest cost is about INR 20.5 crore on an overall debt. No, this FX loan that you have. This is in dollar and you'll be paying in dollar, right? It's not notional, it's actual loss. [crosstalk] We have euro. Yeah, euro. We have euro loan. We have very good exports in euro to euro repayment can happen. No. When you say FX notional, it's not actually notional? No, it's not notional. Okay. There are two components. MTM is notional, while the interest payment on the loan repayment, which is in euro is actual. Correct. This INR 20 crores is actual in rupees, I mean, when converting euro to rupees. Yes. Correct. Perfect. Correct. Last, I'll second the earlier participant's question. If you can share the FPP revenue numbers and the losses of profit of your Warren and FPP both? Sure. We'll share. Done. Thank you. All the best. Thank you. Sorry, one last. On the debt part, right? We've got INR 100- odd crores from Ophthalmic and last quarter we called out the land parcel that we have that we intend to sell. This is over and above the INR 140 crores of debt repayment that we intend to do? We'll close that in the month of September, definitely. No, there is nothing additional. I think what you're trying to say is the INR 140 crore repayment that has to be done, part of that will come from some of these proceeds. All of these proceeds will not be used for paying debt. Correct. Debt repayment this year can be higher than INR 140 that is scheduled? We will do what is required. Yes. How it pans out. Yeah. For the working capital requirement also we require funds. Sorry. This INR 100 which came from Ophthalmic, have we utilized that or that's lying on our balance sheet? No, partly lying in as an investment also. Okay. Correct. Great. Thank you, and all the best. Thank you. Thank you. The next question comes from the line of [Sanjoy] from Credent. Please go ahead. Hello. Thanks for the opportunity, ma'am. Actually, I have just one query. Can you share the A&P expenses on a standalone and on a consolidated basis? What expenses? A&P expenses. Sorry, [Sanjoy]? Advertisement & Promotional expenses on a standalone. [crosstalk] A&P. Got it. Approximately in quarter one, at consolidated level, we have about INR 30+ crore of advertisement and sales promotion. There has been substantial done at Warren on the toothpaste, if that is what you were wanting to check. Yes. Actually, ma'am, what I have seen actually on a standalone basis also as a percentage of sales, our A&P expenses has increased over the last couple of years. That is why I am asking this question. Right. Okay. Can you color on that? Because on a standalone basis, which is why it is increasing as a percentage of sales. Because on a consolidated basis, because you are building the brand, you are investing through Warren? On standalone basis also, if you're looking at last three, four years, then post-COVID, naturally there will be increase because in COVID times they were completely dampened. But otherwise also there is lot of if you looked at our new product performance, close to INR 100 crore is now coming on a MAT level from new introduction. There is a lot of investment by way of new products, et cetera, for India business as well as in emerging. Okay. Thank you, ma'am. Thank you. The next question comes from the line of Raja Kumar from RK Investment. Please go ahead. Yeah, good afternoon. Thanks for the opportunity. The first question is on the COG. You mentioned that there's a 200 basis points increase that is affecting the gross margin. Just want to know whether that impact will be there go forward or there will be price actions taken to curtail that? As I said, this is on account of the price increase of starting material. Since we've had to procure so that the running production does not suffer, I expect partly impact of this to continue a little bit into Q3, but after that it should normalize. Okay, that's good. The good work that we have done on the other expenses. Do you expect some more work to be done in the upcoming quarters or this number is to be taken a steady state? There will be work. Work will continuously go on, sir, this number I think is decent right now. I wouldn't like to unnecessarily guide you to something better than this. Below 150 at consol. Yeah. Okay. Last question is on the other operating income, there's a significant drop. Is anything driving this drop? That was, if you look at same quarter last year, there was a INR 20 crore incremental on account of the exchange. Export incentives earnings book versus If you look at immediate preceding also, I think it is INR 8 crore or something like that. On that front, we've not got it for this quarter. Okay, ma'am. Got it. Thank you so much. Thank you. The next question comes from the line of [Dhruv Sitlani] from Leo Capital. Please go ahead. Thanks for the opportunity. Am I audible? Yes. Yeah. Could you please provide me some perspective on the evolution of our oral care business, that is more specifically toothpaste business. I would be needing to understand its current scale, how has it been performing over the last few months or years, and whether the business is operating at healthy unit economics today or not, and what are we expecting in short to medium term? I didn't hear the last but one question. Whether it is operating as? Healthy unit economics today or not? Healthy. Okay. For the first quarter this year, the OTC business of Warren Remedies has delivered a top line of INR 34 crores with a healthy growth. Looking at the kind of expenses, you have to understand this is a very competitive sensitivity and general oral care market. Some products like Kidodent have done exceedingly well. On Sensodyne KAF also, gradually we are able to get better returns. There is significant investment to be done for consumer awareness, digital marketing, and also for the other advertising to come to the level of Since Sensodyne is such a big brand and they do so much of it. I expect that at least for three years, very consistent support will be required by these brands to build a good portfolio. It is very exciting. The sensitivity market is growing, and so is overall oral health care and general toothpaste market. I'm sure we will be able to make a dent here. Okay. Could you please put some picture on the numbers, for example, are we in losses? Are we in profit or not? For this quarter, there is a marginal loss. It's a little bit of INR 6 crore. Yeah, INR 6 crore for Warren Remedies overall, between API manufacturing and the OTC sales. Okay. Thank you. Thank you. The next question comes from the line of Kenil Mehta from Boring AMC. Please go ahead. Ma'am, you had told that you are operating at 25% for the Baddi plant. Is it for one shift or two shifts? One shift. One shift. Okay. If the demand improves, we can double? Yeah. No problem. No problem. There will be no cap expansion. No expansion. Okay. Understand, ma'am, on the API side of Warren plant, are there any customer audit done? Yes. A couple of companies in the top five in India have already audited and started procuring from Warren. As you know, we intend to use this site largely for giving us KSMs for conversion at Patalganga, as well as for finished API from Warren. These are meant for consumption to make formulations for the regulated markets, and that is where we will actually start making money. Yes, we have been audited by some very large players, and most customer audits have gone well. Our CEP has also been logged, and we expect in six to seven months for U.S. FDA also to come in. When will the Warren site as a combined API and all the oral care business will be starting to ramp up as per you? Yeah. Like I said, the dental sales business, you will see a ramp-up in sales soon, but those sales are going to come at the back of consistent support in advertising and promotional expenditure. API business, on the other hand, is very heavy on initial investment in CapEx, which is already done. As we now are able to sell more and more through the regulated markets, I feel from probably Q4 this year, we should see some improvement in API sales coming out of AURIC facility. Understood. Ma'am, cumulatively going forward, we should expect a 12%-15% sales scale over the next few years based on our investment and our product basket and customer commentaries? For Warren, you're saying? No. Overall level. Overall. Yeah. Yes. We'll target that. Understood. No questions. Thank you. The next question comes from the line of [Zain] from Dolat Capital. Please go ahead. Hello, ma'am. Thank you for the opportunity. Hello, am I audible? Yes. Yeah. Thank you for the opportunity. Ma'am, can you please tell me what the CapEx utilized this quarter and what are we expecting for FY 2027? We are expecting just maintenance CapEx this year. On a total, we expect not to spend more than INR 50 crore. Not even INR 40 crore-INR 50 crore overall for the whole year. Okay. Any tax rate guidance for this year? Any plans? Tax guidance? Tax, we are at a regular tax bracket. Considering losses during last year, we have the carry forward loss also. Effective tax will be much less than the current tax rates. Okay. You said gross margin is impacted majorly due to the COGS. Are they expecting this in second quarter as well? Partly. As mentioned sometime back, partly it will have impact on this second quarter also, yes. Okay. Can you please give me R&D guidance? R&D, currently we are less than 5% of our revenue is the R&D spend. Okay. Any product launches you are planning to do in U.S. in oral solids? Like I said, couple of oral solid launches will come by Q4 for Europe. For U.S., we'll have to wait a little longer for incremental. Whereas in India, we continue to launch new products depending on the opportunity. Okay. Are we profitable in U.S. and EU business, Europe business? EBITDA profitable and margins are deteriorating which way? Europe, we are definitely profitable, but as I said, after master manufacturing plan execution, in a couple of quarters, we should be able to see even more improvement happen. U.S., on the other hand, especially at the back of the remediation costs, et cetera, that business was not able to deliver profits as yet, especially the sterile part of it. We'll have to wait a little longer. Okay. Any guidance for the U.S. and Europe business you can publish? No, we'll wait. We'll wait. Okay, ma'am. Thank you. That's it. Thank you. The next question comes from the line of Raghu Ram from Best Pals Research. Please go ahead. Ma'am, thanks for the opportunity. Am I audible, ma'am? Yes. Ma'am, just want to understand it from a three or four-year point of view. As you said, like the base business, like the India and emerging markets would be growing at lower digits. How should we look at the regulated markets growth, ma'am? What do you see the potential for that? One is in terms of the potential, and the second thing is we coming out of these regulatory issues. If these two things are sorted out, what is the potential revenue that we can see in that market from the reg market, like Europe and U.S.? We see, Mr. Raghu Ram, as Madam also explained, we see all three businesses in a different way. Domestic and emerging market, you mentioned about good growth, about 10%-11% kind of CAGR in next two to three years. While in case of reg market, Europe is almost settled. We have been able to supply as per the order book. U.S. market, it depends on the regulatory approval, certain regulatory challenges. We don't want to comment very much on U.S. market at this point of time. But once we get certain clarity about U.S. FDA, only we'll be able to give some guidance on U.S. market. According to you, what could be the timeline for clearing those, U.S. FDA issues? How much- We have been waiting for a U.S. audit for almost more than six months now. Completely ready. We have been also getting assurances from FDA saying that it will happen soon, but it has not happened. I think at this point now, we stop saying it'll happen now or it'll happen next month and wait for it. If we are keeping fingers crossed for an early audit. Okay. Thank you. Thanks a lot. That's it. Thank you. The next question comes from the line of Kenil Mehta from Boring AMC. Please go ahead. Ma'am, just one last question. I wanted to know, earlier we were planning to procure, send our products to Europe also if the U.S. issue doesn't get sorted out. Have we started contacting customers in Europe for our injectable business? Because it's E.U. GMP approved compared to. Yeah. While Europe business is interesting, Europe is not one country really, it is several small countries. For niche segments like sterile, it becomes even smaller niches. Certainly, we'll look at it. At this stage, we don't think it will kind of make up for U.S. Rather, maybe some other geographies like LATAM or emerging might look interesting. Definitely, somebody asked me the other day whether we will endlessly wait for U.S. FDA to come. Obviously not. I'm soon running out of patience. Something we will have to design around that plant and how to get the best out of it otherwise. What will be the, ma'am, operating cost of that business? We run for two years. Operating costs would depend on how many batches are made, how many lines are run for how many days. Currently, because of the many restrictions that are there on the plant, it would be very difficult to come up with a single figure. It is quite high. Naturally, it's a sterile plant. All utilities run 24/7. We are working to try and trim down any excessive costs at the site. That work is continuously going on. Whatever we may do, unless the plant is audited and we are able to run it whole steam, we will not be able to show any great upside. Ma'am, last quarter, we had faced some cash flow issues of not paying suppliers on time. Now, is it sorted out after doing this transaction and all the cash flows we accrue from our emerging business? Yes. Much of it is settled. Okay. Going forward, we aren't going to see a cash crunch like we have seen over last few quarters. Due to high CapEx? No. That's all taken care of. Okay. Understood. ma'am, any plans if the U.S. issue doesn't sorted out of selling down the sterile plant or something. I think at this stage, we should stay hopeful. After all the work we have done and all the expectations we have on this business, we will wait. I'm expecting, as we speak, maybe the FDA will walk in. Understood. Ma'am, U.S. subsidiary is profitable going forward after the one-off issue has been sorted out of inventory write-off. Is it correct now? Yes. This quarter it is positive. Positive. Yes. Okay. Understood. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one. I repeat, to ask a question, please press star and one. As there are no further questions, I would now like to hand the conference over to the management for closing remarks. Thank you, and over to you. Thank you everyone for participating actively and for the very interesting call questions. Have a good week and a good weekend thereafter. Thank you. Thank you. On behalf of Dolat Capital Markets Ltd. That concludes this conference. Thank you for joining us, and you may now disconnect your line.