Ladies and gentlemen, good day, welcome to the Ipca Laboratories Q1 FY24 earnings conference call hosted by DAM Capital Advisors Limited. 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 then zero on your touch-tone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Nitin Agarwal from DAM Capital Advisors. Q1, over to you, sir. Thank you. Good afternoon, everyone, and a very warm welcome to Ipca Labs Q1 FY24 earnings call, hosted by DAM Capital Advisors Limited. On the call today, we have representing Ipca Labs management, Mr. Ajit Jain, Managing Director, and Mr. Harish Kamath, Corporate Counsel and Company Secretary. I will hand over the call to Ipca management to make the opening comments, and then we'll open the floor for questions. Take away, sir. Thanks, Nitin, and DAM Capital for organizing this call. Good afternoon to all participants. Thank you for taking out time and joining us for Q1 FY24 earnings call. Today's hearing call and questions and answer given may include some forward-looking statements based on our current business expectations that must be viewed in conjunction with risk that pharmaceutical business faces. Our actual and future financial performance may differ from those projected and perceived. You may take your own judgment on the information provided during the call. Domestic formulation business has delivered a growth of almost around 40% for the Q1 FY24. The impact of quinoline product price reduction in Q4 FY23 of around 16% on price control segment was largely offset with the WPI-based price increase taken in Q1 FY24. With two ranks gain over FY23, plus rank in chronic segment, and we have maintained 15th rank in H2 segment as per IQVIA in this particular period. IQVIA DSC audit MAT March, MAT June 2023. Ipca has achieved a growth of around 13% is against industry growth of around 11% as per IQVIA data. Export formulation business, more particularly our branded formulation business in Q1, has delivered a growth of around 23% for the quarter, from INR 93 crore to around INR 114 crore for Q1 FY24. Our generic business, excluding institutional business, has delivered a growth of 11% in Q1 FY24, from INR 212 crore to around INR 235 crore. Institutional anti-malarial business declined from INR 97 crore in Q1 FY23 to INR 48 crore. The business is impacted largely due to lower business volumes from sulfadoxine-pyrimethamine and artesunate amodiaquine formulations. There were lower procurement by the global agencies. Lower business of artesunate injection due to plant shutdown for upgradations of trial artesunate API section, which is now operational. It may take around one more month to get its approval from WHO. Business will resume. We have already started the production of injectables here. API business in Q1 FY24 declined by around 23% from INR 384 crore to INR 295 crore for the quarter, mainly due to significant decline in antimalarial API business for the quarter, from INR 63 crore to INR 19 crore, a decline of almost around INR 44 crore due to poor demand of all antimalarial APIs. The price decline on certain APIs due to significant decline, decline in key KSM prices in the market has also impacted overall value of the businesses. Overall business guidelines for FY24 domestic business, we expect that industry will grow around 10%. Our growth may remain around 12%-14% for the domestic business. That's our guidelines. International branded promotional business, we expect a growth around 12%-14%. The lower business growth is projected depreciation in rupee. Rupee has already touched around almost around 96, 97 levels, and there will be some impact on foreign currency realizations on that. Our generic business is expected to grow by around 7%-8% in year. Institutional generic anti-malarial business is likely to decline by around 15% due to lower demand and also due to the anti-malarial injectables, particularly artesunate injectables, because plant was closed in the first quarter of the current year. API business, we see a decline of around 10%-12% due to lower realizations of APIs due to softer KSM pricing, and also because of some decline in demand of anti-malarial APIs. For FY24, our overall growth forecast, because of all these factors, more particularly on decline on institutional antimalarial business and also decline of, likely decline of, API business, will be likely to be around single-digit to maybe 6%-8% for the year. On business margin front, we expect our material cost to sales ratio to improve from around 35.5% in FY23 to in the range of around 31.5%-32%. On improvement of, this will deliver an improvement of around 3.5%-4% for the year. It's mainly due to business margin improvement on formulation business, with lower input costs and overall improvement in productivity of the workforce. Further cost optimization can drive the cost optimization drive in API production. Overall, we expect that EBITDA margin for the FY 2024, Our expectations is around 19%-19.5% for the year, as against 16.22% in FY 2023. Even having given the broad numbers, now I request participants to ask questions. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star then one on their 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 Kunal Dhamesha from Macquarie. Please go ahead. Thank you for the opportunity, sir. First one on the EBITDA margin guidance of around 19%- 19.5%. This you had said, on the base of 18.5% is what we said. The base also- Yeah. The base also includes other income and the guidance also- We have, we have excluded other income from both places now. Now our guidance is excluding other income. Okay. We have excluded, yeah. If I exclude other income from last year reported number, I mean, I get some around INR 926 crore-INR 927 crore EBITDA, with a 15% margin. That's around 16.2%, excluding other income. Yeah. Yes. Okay, okay. Sure, I'll check my number then. Basically the entire, let's say, you know, 300 basis points on margin improvement, we are expecting from more or less gross margin improvement is what we have to best. Is that the right way to understand? Yeah, it's a gross margin improvement. Okay, okay. Manoj, let's say probably because of the lower realization, this time around, API business is declining, but let's say going forward FY25, what is the growth trajectory that we are aiming for this business? Overall, we should be, I think this year is quite large. The anti-malarial business is facing some problems because of lower demand from WHO business also, and also domestic business of API, we are seeing good significant decline in first quarter, and API exports has also declined in this particular quarter. We will see that the malaria demand may be lower in the current financial year. As far as WHO business is concerned, now we have started receiving good orders. Injectable business is largely impacted because of our plant was closed in the first quarter, and we do almost around INR 90 crore worth of your anti-malarial injectables exports, artesunate injection exports to all these global agencies. That business is impacted, but on a normalized basis, I think next year we should be able to deliver much better growth of around 10%-12%. Sure. On this plant closure for, the, you know, injectable artesunate, any particular reason that we have closed that plant, and when is it due to come back online? That one, basically, we wanted to upgrade our trial artesunate API section. Most of the work is already completed and product is validated, and we have filed with the work validation data. It normally takes 60 days time to get an approval. Around almost around 30 days are over, so maybe in a month's time we will get approval. Meantime, we have already started the production here. So maybe I think up to September there may even August and September will also get impacted because of the shipment will start happening only after the your approval from WHO will be received for all the applications. Sure. You said INR 90 crore is what the annual number is for this plant? Injectable business is around INR 90 crore. Annually? Annually. Okay, okay. Thank you, sir. I have more question. I'll join back in. Thank you. A reminder to the participants, if you wish to ask a question, please press star then one on your touch telephone. The next question is from the line of Surya Patra from PhillipCapital. Please go ahead. Yeah, thanks for the... Can you hear me sir? Yeah, yeah. Yeah. Okay. Just one question from the gross margin front. Can you speculate that last four quarters, where the gross margin levels? ... where like, in that range. That was a kind of phase of separation, and now we are to marketing. In this case, so what is driving this? Like, the challenge of the API is, is now we should think of the cost optimization thing or the, the input prices have corrected to such a significant level, hence the benefits that we have given. Could you give some more color to this? I think that the formulation business improvement is good, so that is also driving. Then input costs are also lower, that's also helping. Normally, the, the current year also, your API business is lower. API margins are normally lower than the formulation business. Overall on, overall on, mix, also margins are improving. Plus on API side, we are also taking, furthermore, the cost optimizations and other drive. That is also resulting in a better margins on API. Overall, all these factors will result into almost around 3.5%-4% kind of improvement in the gross margin. This is a sustainable one. This is sustainable one, yeah. The second thing is about the Unichem acquisition. What is the way forward, sir, in that, the first, first part of the trade, this, that has happened. As you are mentioning that once the controlling stake that you acquired, then you start integrating, because the management control that will be happening. Could you throw some light to that acquisition? I think our open offer is opening on 28th of August, and which will close maybe around by 8th September or so. All the payments will be made by around, around 20th of September, around 20th of September. Practically by mid-September end and all, the whole process of integrations and all will start. We have already started working on which are the products on which the market extensions are possible, and we have started interacting with some of their teams. Practically on ground, actions will start only after the, your, completely we are in the management, yeah. That in number integration or the integration of the financials will only happen after the, this thing, after the complete. No, it will, Philip, it will start from September end. Hopefully everything should be over by September 20th. We should be having management control over that company. Okay. second quarter result, consolidation will happen the date we got those controls. Okay. Okay. Maybe I think few more consolidations would happen, but, I think, the major part will have to start happening. Third quarter onwards. Third quarter onwards, yeah. Coming back to the domestic formulation business of the year, Ipca, a positive surprise, which is the kind of the growth and all that. Any one-off, kind of contribution that you have witnessed, or how is it, sir? No, we have done, I think, a business growth of around 14% on this, yeah. That is on the back of, let's say, our, most of the therapies are doing well. In fact, if you look at the business growth, we have, let's say, delivered around 10% kind of growth. Cardiovasculars and antibacterials, more or less around close to 10% kind of business growth on that. Your CNS business has grown by around 31%. Derma business has grown by around 24%. Your urology business has grown by almost around 26%, ophthalmology by 15%. Nutra, we have small business, which has declined by around 11%. Cough and cold business has delivered around 11% kind of growth. Only segment where we have not received good growth is antibacterial, which the business growth was only around 5% in this quarter on the first quarter, yeah. Rest all businesses have done well in the quarter. Both on acute and chronic, we are beating the market. In fact, on chronic, we have had a two-rank jump in this particular period. On acute side, we have maintained the rank, which is 15 overall as per IQVIA. Is it, is it right that in the previous quarter we had seen some kind of a pressure for our key brand, like Zerodol and all? Now it is normalized. Is that the right understanding? Also, about the field force addition that you had in the recent past, whether it is fully, fully captured and just started seeing a kind of, at least significant level of, kind of, contribution from that field force expansion. Yeah, field force expansion is also resulting in much better, and that is also helping us, like, say, your CNS business growth, because we have started one more division, so business growth is much better. In fact, on our rheumatoid arthritis division, the second division. In very first year, it has become productive and started delivering very good growth and margin also. And in cardiovascular, that one division which we have launched, which is Nova, and it has reached to breakeven in very first year. And another division which we have added, it may take one more year to get to the breakeven. As far as the pain segment, and more particularly on the Zerodol side, in that division also we have added almost around 300 people, and there also we are seeing overall good, good traction. Overall, pain market itself, the growth has come down, and therefore, earlier we used to have around 19% kind of growth on pain segment. This quarter we had a growth of around 15% on pain segment. Okay. Okay. Yeah. Yes, I think that is all from my side. Thank you. Thanks a lot, sir. Thank you. The next question is from the line of Vaibhav Badjatya from Honesty and Integrity. Please go ahead. Yeah, sorry, there, there is some technical. I will come back with the question to you later. Thank you. Thank you. The next question is from the line of Rohan Vora from Purnartha Investment. Please go ahead. Thank you for the opportunity. My question was that, when would we start seeing operating leverage flowing in from new people that we acquired? You know, we hired in the last one year, and the trade cost, you know, that has normalized. When would that start flowing into your data margin? Thank you. Let's say trade cost has already normalized, and therefore, you have seen that our, occurring, and energy cost is also somewhat, somewhat stabilized. Therefore, in this quarter, if you see our, your, manufacturing, other expenses have just moved by around 3% or so. There is not much of a increase in other expenditures. Okay. As far as production is concerned, let's say the major people who are added, one is in cardiovascular, rheumatoid arthritis, and also in the division where we are marketing Zerodol. As I have already said that, almost around 300 people are added close to that number in our rheumatoid arthritis second season what we have started, that has become productive in very first year. On cardiovascular, we have started two division more. So one division has already received, received the breakeven in very first year. Second division will receive breakeven, I think, reach to the breakeven level in the next financial year. On Zerodol range where we have added people, that is also redate resulting in the overall productivity increase. Overall, on pain side, if you look at, we were growing by around, almost around 18% or so. This quarter, the growth is lower because pain market itself, growth has little come down. Another big area where we added, the people was one in CNS segment, and in very first year, that division is also becoming productive and above breakeven. Overall, the sale addition of the people, only division where the people will take a little more time to become productive is the ophthalmic division, where it will take almost around three years to, for people to become productive and start delivering breakeven. It has been a, let's say, good additions, and we have already started little, gaining the productivity. Okay. Thank you. Thank you. The next question is from the line of Harsha Upadhyaya from Kotak AMC. Please go ahead. Yeah. Hi. good afternoon. I wanted to clarify one of the earlier statements that you made in terms of the guidance of 10%-12% decline in the API business. There is one element of the malaria API pricing taking a hit. Is there any detriment that's happening on the non-malaria API side? Let's say the major impact has come of malaria, also the impact has also come because all KSM prices are soft. Because KSM prices are soft, the API pricings are also soft, and more particularly on sartans. The starting material used to be around $18-$20, has come down to almost around $6 now, $6.5. It's a significant decline on the KSM prices, which is resulting in the, let's say, around, almost around the price of losartan in the market used to be around $100-$120. Now it's come to maybe around close to the level of 55, 60 level or so. There is a even though you have similar kind of volume, there's an because of price decline, your revenues are declining. That is also resulting in overall, lower, lower numbers for the API business. Okay. It has more to do with the pricing aspect and very limited to do with the volume aspect. I think, on KSM level, significant price declines has happened, and that is resulting in... Practically now, let's say, practically, the KSM manufacturers are losing money now at that rate. It's not that these things will continue for very long. It may be a matter of six months, the KSM prices will again start rising. Okay. This shift in the KSM prices, is this happening from the domestic manufacturing side, or is it happening from the import aspect? Import, it is more and the domestic producers are also, they have to match the prices, otherwise they will not be able to do the business. It is, it is from, but it is more driven by the your import side, and domestic people are matching the pricing. Sure, sir. sir. That's helpful. The margin guidance, at this time we are doing exhaust other income, the 19%- 19.5%, this is purely from the aspect, right? That does not include any aspect of the Unichem consolidation in the entire year. There is no Unichem right now in our, because Unichem has not become still our, we are not in management right now. We will once your open offer gets completed and everything, then only concentrations and everything will start. Sure, sir. If it is possible, can you help us with the productivity of the Zerodol division, if it's possible, the PCPN number? Normally, we don't give the division-wise productivity number. Overall, let's say, our company as a whole on a field force size of almost around 6,000- 6,100 people. Overall monthly productivity is around INR 4.22 lakhs. This last year, same period, it was INR 4.08 lakhs. Sure, sir. That's helpful. I'll join with you. Thank you. The next question is from the line of Naresh Sutar from SBI Life Insurance. Please go ahead. Yeah. Thank you for taking my question. Sir, your guidance on this year's margin, 19-19.5%, which includes the favorable mix in terms of higher India and lower API and other markets. Next year, when the product mix normalizes, will you see some part of any reversing and identify the margin being similar to FY24 level, or do you see more improvement from FY24 level? The margins will definitely improve because our combination business is, is rising faster. The reversal in terms of the product mix. Productivity of people will also go up. Okay. Can you quantify how much product mix led the margin expansion you are seeing in FY24? We have not done the working on overall basis, so I have not done the working on each element-wise. Okay. Maybe I think. Okay. the time we have, next quarter call, I think I will get those numbers also ready. Okay. Thank you. Thank you. The next question is from the line of Kunal Dhamesha from Macquarie. Please go ahead. Sir, thank you for the opportunity again, sir. Sorry to hop back on this topic, but somehow when I rechecked my number, without other income, you were at around 15% margin. I'm not sure where the discrepancy is coming from. In the last year, I'm seeing on consolidated basis. If I include other income last year, it will be 16.5%. We are, we are speaking all numbers on standalone basis, and I think you are going for consolidated. Okay. Okay. Sure, sure. In this quarter then, you know, the any drag from some of our, you know, other subsidiaries like Omni, Tisca, if you can share some, further there may be helpful? The drag is only around INR 3 crore, I think. From consolidation basis, if you look at my numbers. Mm-hmm. In stand alone, we have profit after tax is around INR 166.58. Mm-hmm. After bringing the impact of consolidation, your, the, the, the PAT number is around INR 162.82, so it's around INR 3.76 crore, yeah. Sure. Sir, any, you know, details on our CapEx plans, and, you know, any update in the existing work, plans that is going on? Overall CapEx in current year is likely to be around INR 800,000 crore. Major additions is due to the one biotech plant which we are building at Mumbai. What would be the gross, the CapEx investment there and bioreactor capacity? It will be almost around INR 950 crore. That's bioreactor capacity? I think it's, the, the 1,500 L or I think, 2,000 L is the, that's the kind of reactors are there, and 100 L or something, something of that idea. This, this, this would be focusing more on the Indian emerging market? In the developed market also, we have taken opinions on our clinical protocols from Europe, U.K., and I think U.S., U.S. regulators. Our particular designs are all based on those things, particularly those inputs. It's filing many for global market there. Sure, sure. Last one on the, KSM pricing, you alluded that KSM prices would again probably start going up. To that extent, we would be also be able to take the API price hikes. Is that the fair assumption? Yeah, it's a fair assumption. Yeah. Okay. We'll have those contracts in which there'll be escalation clauses based on KSM prices, right? Normally, we don't sign a long-term contracts for API side. Mm-hmm. It's only with MNCs or some kind of close customer. It may be around six, six months kind of contract. Then the prices, and in the past also, we have been adjusting the prices. There, there are no issue as far as passing on those kind of costs. Mm, mm, mm, mm. Okay. Perfect. Thank you. Thank you, sir, and all the best. Thank you. The next question is from the line of Rahul Jeewani from IIFL Institutional Equities. Please go ahead. Yeah. Thanks, sir, for taking my question. sir, some saw EBITDA margins last year were 100 basis points lower than standalone EBITDA margin. Do you think a similar drag would be there in FY24 as well, from these various possibility of calls? Do you think this drag will come down? The drag is already coming down. Practically, this quarter, this is around INR 3.5 crore. The things are improving, so drag will come down. Sir, that INR 3.5 crore drag is at a higher level, so what would be the drive at the EBITDA level for one thing? There is not much difference between, see, most of those companies, there is no finance cost and, only some depreciation, that's all. Not much. It's around half a percent point, yes. Okay. Sure, sir. After this acquisition of 33%-34% stake in Unichem for INR 960 crore, what is our cash balance as of now? After the open offer also goes, do you think that we will have some sort of higher interest expense going forward? Interest cost is, let's say overall, our borrowing level will remain around INR 1,000 crore or so, so net borrowing. That's. Since the interest rate has moved up, both on the Indian rupee and your foreign currency loans. Earlier, all the foreign currency loans were very, very cheap. Now, the interest rate is almost around 7%-7.5% kind of interest rate. At that level, your overall finance costs may be around INR 100 crore-INR 120 crore for the year. After factoring in whatever you need to pay for Unichem acquisition? Yes, yes. Okay, sure. That's it from me, sir. Thank you. Thank you. The next question is from the line of Surya Patra from PhillipCapital. Please go ahead. Yeah. Yes, please. About your, USPI inspection for the and, what is the kind of expectation on that US business front as far as our group is concerned? Let's say we have, all the three sites are inspected, and we have already replied. There are no issues. There are no repeat observations, and also there are no kind of, any kind of, data integrity kind of issues. We hope that hopefully we should get cleared. I think it's only matter of time because I think somewhere a plan inspection was closed in June, mid of the June. Yes. Probably 90 days thereafter or so, I think hopefully things should, we should hear from, regulator. Okay. Since hypothetically, we assume that, okay, let's say, hopefully things are resolved, getting resolved by the second quarter or let's say first quarter. What will be our business model there in the event? Our focus is the API to start with, with the old API products or, and, and, the old file actually activated, what will really happen? What timeframe that you anticipate to see some supply bustling from your interest security? How would that be complemented or not impacted by, let's say, Unichem acquisition? If you can say something about that. Let's say, I think Unichem has a much bigger platform of your sales, so we would like to integrate those kind of platforms. It will be maybe that that will become our front end. We will definitely look at that. Right now, it will not be right on my part to comment on that one. But we don't know how long it will take, because sometimes the import alert lifting may take some time. Right now, I, we cannot say that when the business will start. We will take all around the time, but our focus is more likely to be more on formulations, not on API. Okay. Okay. Okay, fine. About the formulation export that when you are talking about the formulation business, growth is looking strong. Could you talk something about the formulation export, which has been secured a bit since some time, whether your this challenges what you have been facing in Europe and particularly in U.K., all those things that involve and what is the current outlook in the key markets that you are having for the formulation exports? I think Europe has delivered very good growth. U.K. has started coming back. I think Europe in terms of which include U.K. also. Last year, first quarter, the business was INR 73 crore. This year, first quarter is around INR 119 crore. There is almost around 63% growth, and this trend is continuing. I think for all of the year, U.K. may delivered almost around INR 30 crore business as against INR 64 crore, what we had in last financial year. Overall, we are seeing good traction from European market. The other markets like Australia, New Zealand, and except South Africa, where we may, may see some kind of decline because some of the tenders we have lost there. Your Canada business may remain some muted, but Australia, New Zealand and European business will do well then. Overall, looking at that, we have given the guidelines that in the current year, for on, on generic formulation side, we should have around 78% kind of growth. First quarter, we are seeing a growth of around 11%. On institutional generics, because of your second quarter, the business impact on injectables, so that will also result in lower growth. First quarter, your antimalarial WHO pre-qualified formulation business was lower. Of course, the orders have now started coming in, and good orders are there in hand, but that will definitely impact not only first quarter it has impacted, and some impact will be there of the factors in second quarter. On third and fourth quarter there would be recovery, good recovery. Okay. Okay. Just one last question, sir, about the facility. When it was Unichem was not there in sight, we had a plan of having a end-to-end integrated operation by activating this [Nobel Estero site] in Nagpur. And hence, KSM dedicated facilities in the Nagpur site and all. Now, if Unichem facilities are being added to this acquisition, what, what process that we are currently having about capacity build-up and integrated operation, what we have been thinking on that? We already have good amount of integrations in that from API to formulation. Close to almost around 54%-55% of our, yeah, foundations are based on our own API, so overall on the company as a whole. We have- The KSM integration, sir? KSM integration part, we are already working. We have set up our first plant, the on continuous process. Mm-hmm. I think that plant should start operating from maybe around October or November site. They're under installation right now. Once the validations and all start, I think from that side, first product for your furosemide, one raw raw material, we'll start producing in now through the continuous process. We have around two, three more candidates in pipeline on which we are currently working. So far, we have not placed products. We will learn from this particular product, and thereafter we will place order for the... The plant cost is very small. It's not very large. This continuous process plant for one, one of the KSM, which we have set up, maybe around INR 25-30 crore. It's, plant cost on continuous process is not going to very high, but, overall it will result in much better, throughput and also lower, overhead cost. Okay. If you can update about the first site commissioning and integration and utilization, sir. Dewas site is so far not inspected by any agency. We have started filing, I think four products are validated from there and filed in various markets. Furthermore, validations are happening from that side. Maybe I think by year-end or so, we may have some kind of domestic business or some small business coming in from the markets where no such inspections are required. Probably I think in the second half of the current financial year, some inspections would start happening from European authorities and other, and thereafter the business will scale up. For one, one year, we have already discussed it earlier also that this is a cycle one has to follow, that you do follow through validation of the batches, generate the three batches, and thereafter, file with the regulators. Once they approved of your, inspect the plant, then only the business and approval come, then only all these export business will start. The, the, I think currently also this plant will continue to have losses, yeah. Okay. one more- Validation of products. Continuously establishment and validation of products will do and generate stability data and filing work is currently happening. Just last point, sir, on the front end, which used to our, you know, or which is the key product for our API portfolio. We have seen some security challenges along with the industry last year, and we have been trying to have, you know, new modified from the regulators in Europe. That particular we have already done. Also in the recent past, we have seen enhanced competition from the domestic key leading large players also as far as API is concerned. Now, having seen all these security challenges in the recent past and the enhanced competition, what's your outlook that you are having for your key portfolio expectations? Yeah, I think, security challenges, which were more particularly on nitrosamine and other impurities and all, now it's, let's say, a whole industry is working for last one and a half, two years. Most of the issues are now addressed. This is all, thing of past. Somewhere the processes are filed, somewhere process filings are happening, on the newer APIs and all. Recently regulators, both, U.S. and Europe, both have come out with a guideline together. We don't see any, foresee any reason on any of our API not meeting those kind of guidelines. We now, now we don't have any kind of those challenges. How do you address the competition, enhanced competition for, third terms? It's, basically it's, cost reductions and on continuous basis working on to reduce the cost and, process optimization. That's the only answer. Okay. building the higher volumes. Yeah. Okay. That means we can say that portfolio is kind of a normalized after seeing whatever the excerpts in the research. Yes, it is, it is in the process of normalization because some of the processes which we have reduced cost processes, which we have filed. I think, some market we have received approvals like that, less in Vietnam, less in maybe Brazil and others, those approvals are still to come. Somewhere the costs are still on higher side. Because as we have discussed earlier, that, our first focus was to come out with a process and, the, the, with, We have filed initially the process, which, has a high, little higher cost. Thereafter, we have come up with a much better process where the cost is much, much lower. That process filings has happened, but some market approvals are still pending. Sure, sir. Yeah. Thank you, though. Thank you. The next question is from the line of Vaibhav Badjatya from Honesty and Integrity. Please go ahead. Yes, sir. Thanks for providing me the opportunity. Just trying to understand from a longer-term perspective. You know, post the acquisition of Unichem, I think we can make use of our base as a Beshore platform, which we were earlier not probably able to optimize. What's your thought on that, and can it contribute significantly to profitability on a consolidated basis going forward? Let's say Unichem is much better, bigger platform than Beshore. Okay. For our future U.S. business, we would like to use the Unichem platform rather than using the Beshore platform. Beshore, we'll try to integrate with that of Unichem portfolio. We'll integrate the entire team and other things so that there are more cost reductions on operating side would happen. That, that, that's the line of that's the thinking, but it all will start happening once we are there in one. Yeah, I, I think Unichem doesn't have any front-end, right? Which is our Beshore has. Beshore will continue to be- Beshore has a much bigger front-end. They are almost around more than 30 people, very good team- Okay. Very good U.S. business. Yeah. Okay, got it. Understood. When you provided your overall number, obviously, on a standalone basis, you provided, and we know some of the other subsequent figures that you have. From this onward for six months, you know, the drag will also come from Unichem on a paid or weekly basis. Just for the quarter, just in your thought on it, will there be drag, it will be significant, how much that would be? I don't want an exact number, but a broad, quick comment, it would be helpful. I think Unichem is also improving their performance, and we will only be able to provide you once we are there in the management. Right now, it's not be right on my part to talk of that year. Mm-hmm, mm-hmm. got it. Understood, sir. That, that's it for my... That's my questions have been answered. Thank you. Thank you. Participants, if you wish to ask a question, please press star then one on your touchtone telephone. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to the management for their closing comments. Thank you and over to you all. Yeah. Thank you, thank you for, participating in Q1 FY 24, conference call with us. Thank you, all the participants. Thank you. Thank you. On behalf of DAM Capital Advisors Limited, this is base conference. Thank you for joining. You may now disconnect.