Ladies and gentlemen, good day, and welcome to Laurus Labs Limited Q4 FY2024 earnings conference call, hosted by Antique Stock Broking Limited. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Monish Shah from Antique Stock Broking Limited. Thank you, and over to you, sir. Thank you, Ria. Good evening, everyone, and welcome to Laurus Labs Q4 full- year FY 2024 results conference call. On behalf of Antique Stock Broking, I thank the Laurus management for giving us the opportunity to host this call. Today, we have with us Dr. Satyanarayana Chava, Founder and CEO; Mr. V.V. Ravi Kumar, Executive Director and CFO; and Vivek from the IR team. I would now like to hand the call over to Dr. Satya for his opening remarks. Thank you, and over to you, sir. Thank you, Monish. Thank you for joining us for our Q4 and full- year FY 2024 results conference call. We're pleased to have this opportunity to update you on our progress and answer your questions. Our R&D-led commercial strategy made good progress, and I'm pleased with the resilient performance backed by our robust integrated model. In 2024, we advanced on several pipeline projects across our offerings and augmented our broad technology and manufacturing platforms. Company's BD efforts also resulted in a multi-year CDMO contract with a leading Crop Science company, and over a decade of fruitful long-term collaboration with Krka fructified into formation of a joint venture. Further, we deepened our cooperation with major CDMO clients on green and sustainable technology platforms, especially high-pressure hydrogenation machines, continuous flow chemistry and biocatalysis. We are also currently engaged in delivering on multiple projects involving multi-step complex chemistry, large-scale biocatalysis with in-house enzymes manufacturing. Over the past three years, we made significant investments in our development and manufacturing capabilities to see the next wave of impactful growth for Laurus Labs. Our ongoing innovative CGT investments continue to report significant updates for the period under review, especially the successful NexCAR19 commercial launch in India to treat certain cancers. Further, second large GMP-integrated CAR T facility is under construction to service more patients and making treatment more affordable. With our collaboration on gene therapy with IIT Kanpur, company started GLP, GMP plant construction for the manufacture of viral vectors and gene therapy products. We target to operate phase one by the end of Q3 FY2025. Moving to our financial results, our Q4 core results reflects continued resilience in financial health across our business divisions, despite no COVID treatment-related supplies and significant pricing pressure on the generic APIs. We delivered underlying growth of 9% in revenues to INR 5,041 crores, driven by strong performance in formulations, CDMO, Onco APIs and Bio division. This was achieved because of stabilizing ARV sales. Gross margins were maintained at 52% for the whole year, despite quarter-to-quarter variation. EBITDA margins negatively impacted, and we reported 16% EBITDA margins due to higher OpEx on growth projects and higher R&D spend. Our Q4 results improved sequentially, led by positive contribution from all business, backed by volume increase and healthy R&D. To begin, I'd like to share key updates on our various business segments. In formulations, this division reported overall revenues of INR 430 crore for Q4, increasing by 9% over last year. On sequential basis, revenues further improved to 17%. This is primarily driven by consistent recovery in ARV business, along with growth in developed markets. During the quarter, we signed a joint venture with Krka, with a focus to enhance combined generic portfolio and market presence. I feel it's a great opportunity to utilize our integrated manufacturing capabilities and extensive pipeline from Krka in innovative and complex generics, which offers attractive growth prospects in the long run. Coming to ARV business, the overall market volumes have largely remained stable, partly supported by the stable pricing trend over the last two, three quarters and macro supplies. We believe the impacting ARV franchise are broadly stabilized and expected to stay in this range. While we continue to pursue optimization programs to counter any pricing impact, our extensive know-how, portfolio breadth, including complex formulations and new market, potentially solidify our leadership position in ARVs to withstand any further market challenges. Coming to the biologics market, we continue to perform well across our broader portfolio despite higher competitive intensity. During the FY 2024, we filed eight dossiers, and a total of 199 approvals were received, including two tentative approvals. In U.S., we continue to get good market share on select products and also increasing volumes. Recent U.S. approval flow-through has been very good, and we launched two products to U.S. during the Q4, and two more products launches is under preparation. These launches will support better asset utilization. Cumulatively, we have a total of 40 ANDAs filed so far. Of this, we have 18 final approvals and 14 tentative approvals. We continue to have diverse portfolio and pipeline across ARVs, cardiovascular, diabetes, CNS, and GI. On R&D front, the overall R&D spending to sales for FY 2024 was at 4.8%. Higher R&D spending is in line to enhance our pipeline, which includes spend towards additional initiatives in cell and gene therapy. Commercialization of our first modified release product was done during the last quarter of FY 2024. We continue to invest in portfolio with product-specific approach based on complexity and scale economies. In the generic APIs, revenues for the Q4 was very strong at INR 743 crores, supported from growth across franchises. For FY 2024, the overall growth was down by 2% from the prior, mainly impacted from other APIs, offsetting positive growth in Onco APIs. ARV APIs have retained its volume-led steady momentum and reported a revenue of INR 408 crore for the quarter. For FY 2024, the division has continued to intervene support FDF requirements. Accordingly, the business reported flattish performance for the full- year. The current order book for our API basket looks encouraging. We continue to maintain a leading market share in the first-line HIV treatment. Onco API business reported highest ever quarterly sales of INR 147 crore. For the year, reported strong growth of over 27%. During the year, we have completed validation of few oncology products at our Vizag site, which increased batch sizes and increased capacity multifold for a few products. We believe our portfolio breadth, new capacities, along with ongoing positive market dynamics, will continue to support the additional volumes in this division. Other API segment, which includes cardiovascular, diabetes, and asthma, have recovered sequentially, led by CMO contract delivery, and reported sales of INR 190 crore. FY 2024 revenues for other APIs have declined by 22% due to challenging price environment, mostly offsetting volume growth. While pricing headwind may continue even in FY 2025, we are committed to long-term growth with a clear focus on cost leadership in select high-value APIs. We're accelerating, focusing on increased efficiency, sourcing cost improvements to mitigate inflation and price pressures. We filed four DMFs, three in non-ARV, 1 in ARV. With this, we filed a total of 83 DMFs. In our CDMO business, we did achieve INR 922 crore sales. We saw substantially more RFPs in FY 2024 versus FY 2023 from several big pharma and leading biotechs. Increased RFPs for the late-stage projects will certainly provide a very good opportunity for the company. Besides, we are also increasing our BD efforts towards securing early-stage projects to widen the project pipeline, laying the foundation for long-term growth. We are working on over 70 active projects. Ongoing commercial supplies for about 10 products, including APIs as well as several intermediates. Key CDMO growth projects across our R&D and commercial manufacturing facility is on track. Our crop science unit is under construction, and the Animal Health unit has started commercial validation supplies and scaling as well. These capacities are almost fully contracted with a big pharma partner. The new Animal Health site will have capabilities to handle steroids, hormones, and high-protein molecules, apart from other large volume products. Our focus continues to leveraging significant scientific overlaps and build diverse revenue streams from customers. In the biologics division, full- year reported stronger-than-expected growth of INR 964 crore sales, 28% over the previous year. This was despite transitory, very low Q4 sales because of harvest seasonality. The strong growth was led by diversifying application of our CDMO services and rapid expansion in our customer base.... We continue to grow our enzyme engineering and production for small molecule, clinical and commercial API projects, which will augment our pipeline using green chemistry for sustainable manufacturing. During the year, we operationalized downstream capacity, and R2 capacity increased by 20%. Bio unit is likely to achieve peak revenues during FY 2025. We also made plans to create larger fermentation manufacturing capacity, both in Vizag and Mysore, respectively. Earlier we mentioned only Mysore, but we also initiated construction of Bio at Vizag because of opportunities we saw in the GMP pharmaceutical manufacturing. The facility will be ready by end of FY 2026. Let me share brief on our quality and ESG initiatives. In 2024, the company underwent more than 130 quality audits by multiple regulatory agencies and several customers. The company has successfully passed audit inspections without critical findings. We remain committed in advancing quality systems, meeting stringent requirements from clients as well as global regulatory standards. We're also making good progress on our ESG, EHS agenda for long-term success. Now, let me turn to our broad FY 2025 outlook. We are entering the year with solid foundation and remain committed to unlock sustainable and profitable growth by focusing on technology debt and commercial excellence of the company. We are prioritizing efforts to improve our operating margin, particularly increasing asset utilization across our network and delivering on a few of our late-phase commercial NCE opportunities. We also expect pricing headwinds in the part of the API portfolio, but which we believe will offset from volume increases and continued cost improvement measures. At the same time, we have been investing in Laurus' future and continue to create long-term value for all stakeholders. With that, I would like to hand it over to Ravi to share financial highlights. Thank you, Dr. Satya, and very warm welcome to everyone on our quarter four and FY 2024 earnings call. Excluding large CDMO PO, we have a 9% growth in FY 2024. Total income of operations at INR 5,041 crore, against INR 6,041 crores. In overall, actually, we declined 17, 17%. During the quarter, we reported INR 1,440 crore sale against INR 1,381 crore. It increased 4% year on year and 21% quarter on quarter. The growth supported from all divisions. Gross margin for full- year is around 52%. The reason, main reason for the gross margin decline from quarter three to quarter four is the product mix. Our EBITDA, FY 2024, was 16%, and for the quarter, it was 18%. Our diluted EPS for FY 2024, INR 14.60. Is it correct? No, sorry. INR 2.9, rupees INR 2.9, reporting a decline. And our ROCE is at 6.4% versus 21.3% due to lower operating results and strong capital deployment towards growth projects. On the CapEx front, we invested close to INR 700 crore for the year and continued to invest in CDMO and bio divisions majoritively. Our net debt stood at INR 2,368 crore, as we indicated, around INR 2,500 crore, and debt to EBITDA is around three. It will reduce in the coming year based on the better performance and, capping the debt at the similar levels. Going ahead, we are focusing on gradually returning to growth and prioritizing investment in high-value segments, along with improvement in the working capital efficiencies. You can refer IR presentation for more details. We also would like to take this opportunity to convey that we have proposed a certain board-level reorganization. So Dr. M.V.G. Rao, who is an independent director and non-executive chairman of the board, shall end his second term on 17th May. You're all aware, actually, any board member, independent board director can be there for only two terms. Based on the age, actually, he is retiring, and accordingly, the board of directors are proposing to reorganize to take care of the future requirements. Now, another thing is the company is growing and expanding into new, newer business areas, such as CDMO business, including animal health, Crop Science s, biotechnology, cell and gene therapy, apart from the generics and the Krka JV, under the generics. Therefore, there is a need to groom the next generation to take up the increased responsibility as a part of the succession planning. With that, we are appointing Dr. Ravindranath as a non-executive chairman of the board of directors. It takes effect from May 18, 2024, but of course, Dr. Ravindranath is a board member and independent director since 2017. ... Appointment of Dr. Krishna Chaitanya Chava, Mr. Krishna Chaitanya Chava as the Additional Director and Executive Director. Appointment of Soumya Chava as the Additional Director and Executive Director. Krishna and Soumya are son and daughter of Dr. Satya. Appointment of Shekhar Karanam as the Additional Director. He's a retired banker, and he worked in SBI as a DMD and couple of other public sector banks as a Managing Director. So, with this, we request the moderator to open the queue, open the lines for the call, question and answers. 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 the touchtone telephone. If you wish to remove yourself from question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Sajit Lopez from Amneal Investors. Yeah, hi. Thanks for taking my questions. Dr. Satya, do you believe that the whole can be greater than the sum of parts in the context of offering CDMO services in biocatalysis, enzymes, gene therapy, and of course, various chemistries across animal, crop and human licenses? That's my first question. Sajit, thanks for asking a very interesting question. And the sum of the parts is greater than the whole, definitely. For some projects, we started biocatalysis using third-party supplied enzymes, whereas our big pharma partner decided to use our expertise in R&D and manufacturing of enzymes and provided the plasmids, and we made the enzymes and currently using that for the batches being executed. This integrated approach is definitely going to offer significant advantage when compared to non-integrated players who are not capable in making enzymes themselves. Great. So, has there been any difference in the level of engagement with the innovators, today versus, let's say, five years back, when we were only in the human chemistries, human pharma chemistries, that is, has that level of interest or engagement shifted? Absolutely. The depth and breadth of engagement has gone up. They can talk to one vendor who can offer all this. That is one. And second, for them, there is no need to go to another CMO for a large-scale manufacturing. We can offer enzyme screening, we can offer, in fact, now, most of the projects we're handling are very complex in nature, and it has at least one or more continuous flow chemistry techniques, and also at least one or more biocatalysis. In a 10-12-step complex chemistry, so these are becoming an integral part because the big pharma's commitments towards easy also, pushing them to adopt new technologies, cleaner and greener technologies, pushing them to go to continuous flow as well as, the biocatalytic, approaches. So we are becoming a very interesting partner to offer all these. Sure. Secondly, related to my first question, Dr. Satya, in the context of this Biosecure Act and the stated interest, quite vocally, from various innovators and government organizations across U.S., that they want to move away from China, the dependency on China. And the large C4 players in China have got a significant exposure in terms of CDMO services coming from U.S. And in this context, given that we have the capability and the capacity... Hello? Sajit, we can hear you. Yeah. So, so given— So what I'm trying to understand is, if I look at the large three, four, five CDMO players in China, they, they have got significant exposure to U.S., and now we have got this Biosecure Act and this, desire to move away from, having overly dependent on China. We already, we at Laurus have the capacity and the capability, right? So, are we, are we, positioned to take, advantage of this, shift that is imminent and it's already happening, at various, various discussion levels. So can, can something materially change for, India as a whole, over the next two, three years? I mean, that's, that is the expectation that we have. What— How do you see, I mean, from your vantage point? ... This is a very broad question, Sajal. So this shift in big pharma to diversify their vendor base has started. I think all Indian CDMO companies are at the beginning of that shift. So a few companies will definitely be benefited from this, but it will take its own time. So they have to, if the partner is an existing customer, then onboarding is easier. If they have to onboard a new vendor, it will take its own time. But the benefit of the diversification has started showing results. It is also very clear we got more, RFPs in the last 12 months, for, phase, late phase projects when compared to previous years. That is a indication that there is a diversification effort from big pharma, and it is clearly visible. Sure. And finally, the debt side, we have got 3x net debt to EBITDA today. Is it fair to assume that the debt has peaked, and when EBITDA starts mean reverting, we should be below 2x net debt to EBITDA, or is that kind of aspiration that we have bringing our net debt to EBITDA to somewhere, somewhere under two? Yes, Sajal. Once the EBITDA improves, that is our aim. And if you look at even historically also, at this kind of a range, actually in the last 15 years, we have only for a few years, and we are expecting to come down in the coming year. And your line is not very clear, Sajal. Actually, I think you are, you may be using a, like, a speaker? No, no, not on the speaker, Ranji, but anyway, I think I might got my questions answered. Yeah. Yeah. Thank you so much. Thank you. Thank you. All the best. Thank you. Bye-bye. Thank you. Next question is from the line of Jeevan Patwa from Sahasrar Capital. Please go ahead. Sir, two questions. So one is on the FDF side, formulation side. So we have launched one product in the US, and there are two more products, we are going to launch in US. I remember some two years back, you used to say that we want to be global leader in 15 products, right? So are these three products, are in that list of 15 products we want to be the global leader? Jeevan, that's right. So these are the products which are genericized with significant volume and also still growing. The new approvals came as part of our long-term strategy for global markets, not just U.S. So, couple of products we are also planning to launch in Canada now, those products. Yeah, because all three products have, are, pretty big, products. So- Yeah. But when you say that we want to be global leader, are you actually expecting to have, like, 20% plus kind of market share in this product over a period of time? We don't want to get into market share by disrupting market by only price. So if you look at, for the products where we have increased our market share, it was done over a period of, 12-18 months after approval. We don't want to get on the day one to significant market share, that means we are cutting our own legs. So we, we wait for the right opportunity to get market share. Perfect, sir. Perfect. And secondly, on the formulation, last quarter, last to last quarter, we said that we have actually got a client, where we will be doing tertiary packaging formulation. So is that contract, started or it hasn't yet started, or when it's going to start? Investing more in the packaging lines right now to cater to that contract. And it is not a one-time contract, it is a multi-product, multi-year contract. So we're investing in the packaging lines, in the new formulation capacity building. Okay. So, when, when can we expect it to start, sir? We started supplying finished packs from the existing packaging lines, and we are buying two more packaging lines, which will be qualified by September this year. Okay. Okay. So post that, that contract will start fully? Yeah. Yes, sir. Okay. Okay, perfect, sir. Perfect. And, on the CDMO side, so last few years, we have been adding multiple capabilities, on the CDMO side, but we haven't yet heard about any new contracts that we have signed, sir. So after the agrochemical contract, I think, we haven't yet announced anything on that. Is there anything in the pipeline in the very advanced stage where we expect to have contract? Currently, we don't have any agreements in negotiation for long term. That's but several projects are moving into later clinical phases. For example, currently we are validating one, two APIs. Okay. which, which will go into NDA soon. So the scale at which we are operating move to offering APIs, not just intermediates. That's a significant step. If you look at, in the previous, Sajal was asking question on the, diversification. See, most of these big pharma source APIs from elsewhere, so when they want to have new vendor, they want to have a vendor who can offer APIs, not just starting materials or intermediates. So that is the advantage we are in right now. But you know, these batches, filing, approvals is a long-term process, but the prospects looks very interesting. Sure. And sir, on the bio side, so if I heard right, you said that we are starting work on Vizag and Mysore sites. Earlier, we were working only on one side, Mysore side. You are absolutely right. As Ravi mentioned in his commentary, we have opportunities to produce pharmaceutical grade intermediates and products. Okay. That we want to do with Vizag. Typically, fermentation API, typically you were saying? Pardon? Is it fermentation API that we are talking? Intermediates and APIs, both. So why we changed, augmented our strategy- Mm-hmm. -to non-pharma products at Laurus Bio and pharmaceutical-related fermentation products in Laurus. That is the change what we change in strategy what we had in the recent past. Mysore will be mostly the food protein side, and Vizag will be mostly toward pharma side? Sure, yeah. You're right. Okay. And in that, I have just read one project report which was submitted to the government on the food protein side, Laurus project report, which mentions about 10 different food proteins with total capacity of 1,350 ton. So, is it like the long-term plan of the company of getting into 10 different food proteins from 1,350 tons of capacity? Those are the pipeline products, so those are all contract manufacturing. You see, we... The Laurus Bio is only accept the cell culture ingredients. None of these food proteins are marketed to customers. This is B2B. Okay. Yeah. Because each of these protein is, like, very high value. Is a pretty large capacity. When it is a food, 50 tons is not a big. It is a small. Sure, sure, sure. Okay, sir. Thanks a lot. Thank you. Thank you. Thank you. Next question is from the line of Krish Mehta from Enam Holdings. ARV FDFs versus non-ARV FDFs. Mr. Mehta, we're not hearing you. Could you please use your handset? Yeah, I'm using my handset. I wanted to check for the ARV versus non-ARV- Your voice is not clear. Can you please speak louder? Yeah. Can you hear me? Slightly better. Yeah. Yeah. I wanted to get the mix for ARV versus non-ARV for Q4 and ARV FDS versus non-ARV FDS for Q4. In the API, in Q4, out of our INR 745 crores, INR 417 crores came... INR 408 crores came from ARV, and INR 337 crores came from non-ARV. So you are also seeing the gradual increase in the share of non-ARV APIs and also gradual share increase in the ARV formulations as well. What would be the number for the entire ARV share for Q4? Could you repeat the question? I was asking, what will be the entire number for the total ARV share for Q4, including FDF and ARV? INR 7,709 crore. That is, about 50% of our sales came from ARV in the Q4. Okay, thank you so much. API formulations which are there. Thank you. Thank you. Next question is from the line of Shankar Gawade from DAM Capital. Hi, sir. Thanks for taking my question. So my question is on, you know, you made a few references to late-stage contracts on CDMO. So are you referring to molecules which are already commercial and you would be coming up a second or third source for, you know, the innovator? That is the kind of contract you're talking about over here? What I mentioned, two products under validation, those are actually launched. They are filing NDAs soon. Okay. But besides that, are you also pursuing opportunities where the molecules are already commercialized and where the innovator is looking for a second supply source? For some intermediates, yes. But those are at the very early stages of progress, I would say. I put it that way. So if I were to then probably just summarize some of the things that you've just said, if you can give us some timelines for when would the meaningful impact of A, the Animal Health business contract will start to be visible, and the crop protection contract begin to be visible? ... We can't give you more specific details, but we expect these products and the RFPs what we are receiving will add lot of value for the all the stakeholders. Okay, thank you. Thank you. Next question is from the line of Hello? Hello, can you hear me? Yes, sure. Okay. Good, so let me first a couple of housekeeping questions. What sort of tax rate do you expect for next year and thereafter, regarding now about the corporate tax rates? How do you see this panning out? I think we shifted to the new regime for Laurus Labs, so we expect to be around that 25% plus will be the tax rate. But our subsidiaries we haven't adopted, then we haven't migrated to the new regime. So, then maybe we expect in the similar range what we have this year. Okay. And, what's the CapEx plan for next year? I'm sorry. CapEx. CapEx, I think, will be in the similar range of the current year. Where would that go to? That goes to the bio and the CDMO. Okay. The receivable levels as a% of sales seem to be pretty high this year compared to earlier years. Why is it that, and is it going to remain like that? Sorry? We are not clear to your question. Can you just repeat, you know? The consolidated receivables number, that's what is- Okay. Seems to be higher this year. Is it, why is it, and is it going to stay like that? No, because of the quarter's revenue is higher, the receivables also higher band of the financial year. But it is based on the quarter revenue, the receivable number will change, so. Understood. Okay. And, finally, could you just help me understand the thought process behind this investment in ImmunoACT? I mean, specifically, how did you-- what kind of financial analysis did you do? What kind of opportunity that product has and, you know, what sort of ROI are you looking from it? I think few years back when we had a, when we have, still we have that strategy of investing up to 10% of our profits into disruptive technologies, either in-house or external. When we are explaining this strategy, one of the big fund, actually, they have connected this ImmunoACT team. Then we had a lot of discussions around the world and with a few experts and few oncologists on this treatment, and we found it's very interesting. And that's how we made a first investment of INR 40 crore. Is it a high-risk investment, made a few years back, when it has not even completed a phase I clinical trial? So once the phase I clinical trial completed, and then phase-- before completing the phase II clinical trial, we again, we got an opportunity invest further. But of course, the valuation has been much higher than the first investment because the phase II, it is about to complete the phase II approval. So now the, they got the phase II approval, and then they already launched in the market. They already serviced almost now today, including the clinical trials, they have completed 100 patients treated. We're very happy that, we, we could able to contribute with our money, this, this treatment has come to India. So and then recently, you must have noticed, in IIT Bombay, President of India has dedicated this product to the Indian people. So it's very interesting things going on. They are setting up a large manufacturing facility in the, in the Navi Mumbai. They got a land parcel, and they're building on their own. I think it's an interesting things happening there. And then we also tied. They're also tying up with some other countries, and that, that's also increasing. And they're also trying to get in another treatment, they're also in the. They have to conduct a trial. So this is. It looks interesting today, but we don't have any plans to further increase our stake, and they don't require any money more. When we just look at the kind of investments what we are doing, for the investments what we made in ImmunoACT, so far we're only recognizing our share of losses in our balance sheet. And also invested at almost INR 120 crores. But the opportunity is very big. In like that, we are also investing in R&D as well as in manufacturing assets at IIT Kanpur. These initiatives are putting very, very interesting for long term, but short term, these are very painful investments because we are investing in CapEx, OpEx and all these are going through the balance sheet. But one has to realize that your company is putting money in the right places for long-term and sustainable growth. Okay, understood. Thank you. ... Thank you. Next question is from the line of Bharat from Bosch. Please go ahead. Hello. Hi, sir. We have increased our API capacity by more than 50% recently. But if you see this other API segment, last year we have done around INR 800 crores, and this year we have done around INR 600 crores. So it's around decline of around 20%. How do you see this, like, capacity going up 50% and revenue declining by 20%? The capacity going up is the reactor volume, and most of the reactor volume what we increased is utilizing for the manufacture of the clinical phase programs of big pharma. So the capacity increase is not primarily meant for generic APIs. It's majority meant for clinical programs, for phase two, phase three, and validation batches. So do you see any pricing pressure in other APIs? Because there's a decline of 10% in other API year-over-year. So actually, if you look at the quantum of revenue coming from other APIs is only quarter of our revenues. I mean, that is not the big chunk of our APIs. 50% of API sales comes from ARVs, and then, contract manufacturing and, onco is another, 25%, 30%, actually. Maybe 25%, around 25% is contributed to other APIs. So the growth in other APIs or lack of increased margin in other APIs is not going to impact the entire API segment. Mm-hmm. Okay. And if you see, compare Q3 and Q4, there is no much significant product mix change. In fact, if you see the Onco API contribution increased from 7%-10%. But there's a decline of 450 basis points in gross margin. May know the reason for this? That was primarily driven by the product mix in Q4. If you look at, there is a little growth in our CDMO revenues from Q3 to Q4, but there is significant growth in our ARVs, both APIs and formulation Q4. So these... And also, this is the primary reason for that. I think for 20, if you look at quarter three, bio and Synthesis together, 22%. From there, now in the quarter four it is 18%. So the both Synthesis and bio are the high margin, high gross margin areas. 4% decline is like not changing the part of it. And second, the finished goods and in-process also inventory has come down. So, you know, the part of the overheads will be will be added to the inventory valuation, so that's also is another reason. These are the two reasons. But once the, in the coming years, we are not saying that this will be at the same level, but, it can improve once the CDMO revenue share is being increased or and overall. Okay. Yeah, thanks. That's very helpful. Yeah. And just from my understanding, just to make sure that I understand right, so the R3 in Mysore is 2 million liter capacity, that stays as it is, and then now we are building a new plant in Vizag, and that is also 2 million liter capacity. So in total it's 4 million liter fermentation capacity. Am I right? Can you repeat your question? So in Mysore, the R3 plant in Mysore is a 2 million liter capacity, right? And, the new plant, which we are going to build in Vizag, is also 2 million liter capacity. All right? So it's total 4 million liter capacity. Actually, the fermentation plant we are planning at Vizag will be currently is 500,000 liters only. Okay. So this is on top of R3 in Mysore, right? Mm-hmm. The R3 stays as it is. Okay. Yes. Yeah. Okay. And my last question is that, I understand that management is very bullish in, CDMO segment, but if you see the trend of our CDMO revenue for the last three years, in FY 2022 we have done around INR 900 crores, and in FY 2024 we have done, again, INR 900 crores. So in last three years, it's, it's, you know, almost flat with no growth. How do you see it? It's like, can we expect good growth in coming years? See, if you look at the investments what we made in animal health plant, we'll see revenues, significant revenues in FY 2025. Our crop science plant, you will see investments maybe, next year, not even this year. And many projects are moving from phase one, phase two to phase three are commercial. So I would say this is a transitionary period, for the investments what we have done, to see significant contributions coming from those initiatives. Okay, sure. That's it from my side. Thank you. Thank you. Next question is from the line of Rahul, an individual investor. Please go ahead. Thank you so much for the opportunity. So Dr. Satya, in terms of strategic priorities, beyond the next couple of quarters, can you share your vision for the company's, you know, long-term growth trajectory? So that will be my first question. ... If you look at the transformation and transition the company underwent in the last six to seven years, from a pure play API to integrated formulations, then we started investing in bio, then we started investing into animal health, started investing into crop science chemicals and also selling gene therapy assets being created. So all these will put the company into a very integrated CDMO player, offering broad segments. And each of these segments has their own gestation. For example, scaling genes is easier, crop science is easier. Animal health may have to go through a lot of regulatory pathway, and human health has to go through even more stringent and long regulatory pathway. But all these, we have invested very early into this vendor diversification by the major pharmaceutical companies. So we believe we have created technology platforms and also created capacity to capture that opportunity. We are saying this for the last three quarters, but numbers haven't improved significantly. As one of the investor asked, FY 2020 to FY 2024 revenues were same. It is true. But the typical development timeline is seven to eight years. If it is very short range, five to six years. We have projects in different phases of their life cycle. When we are investing in these initiatives, either we have partner who is willing to work with us, or we have a contract with the partner who is already working with us, or we have conviction that people will come to us, use our capabilities. I think all these will definitely demonstrate, in the, you asked a question in, maybe one or two quarters, but at some point of time, these numbers, will come, and, all of us who have confidence in the company will, definitely benefit from this. Thank you so much. As a follow-up question, since CDMO is an integral part of the business vision, five years out from now, around what percentage do you think CDMO space will be contributing to the overall dev mix for Laurus? In your personal humble opinion, are there any Indian peers that, you or Laurus Labs looks up to, that are doing excellent work in the CDMO division? If you can share your perspective on that, that will be very much appreciated. Thank you so much. CDMO business used to contribute 20% of our revenues in FY 2020, FY 2021. 2023 was a big jump because of the COVID-related supplies. But, again, FY 2024 is similar to 20%, which we had CDMO of us and the bio, about 20%. We expect in the next couple of years, this should grow to, again, one-third. That's our belief. Thank you so much. And any Indian pharma peers that you think are doing great work in the CDMO space that, you know, as a company, we, we can pick up best practices from or, or you look up to? I think, I don't want to comment on this question. No, no worries. I understand. Thank you. Thank you so much, Dr. Satya. Thank you. Next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead. Yeah. Am I audible? Yes, sir. So firstly, on this $40 million fermentation CapEx, so, is this considering the contract already in hand, or we are building the facility and then subsequently we'll look for a contract? A mix of both. Okay. We are also have certain intermediates planned, and some partners want to use our expertise in fermenters. So it's a combination of internal as well as we make products for our partners. Sir, out of this total INR 700 crore CapEx required, in just for FY 2025, how much should be funded from internal crores or will there be further increase in debt? We don't... We, I think, Tushar, we are not trying to increase too much debt. So, we will use, you know, depreciation itself is almost like INR 350 crores, INR 380 crores. So I think we will try to manage without increasing the substantial debt, Tushar. ... Okay, okay. And, the CapEx which we have invested to date, let's say, the INR 2,600 crore, or in particular for the CDMO projects. So effectively, the pickup in timeline, because as we have indicated in the presentation as well, that there has been some delay in the, pickup of the animal health facility, which has been actually operational from November 2023. So, so effectively, when do we see the, you know, meaningful scale-up from the investments which we have done, on the CDMO facility? Is it like second half FY 2025, or is it getting pushed to FY 2026? So not able to hear you. I mean, in this year, FY 2025, we'll deliver large quantities for an animal health NCE program from that site. And we'll be completing validations for, around four products in this financial year, commercial validations. So we started, or we are going to start commercial supplies from animal facility this year, whereas crop science facility will be ready by end of this year, but commercial supplies will come only next year. In the CGT space, we are building vector capacity and then gene therapy, products capacity at Kanpur. Maybe we'll have revenues only in the next financial year. I hope, I answered your question. Yes, sir. And similarly, also, if you could throw light on the API side industry, because at least in FY 2023 also, at the industry level, API has witnessed significant erosion in prices, while, at least FY 2023, companies were able to offset that with higher volume throughput. But broadly, these APIs are like legacy or old APIs, where the demand would be in the range of, say, 5%-7%. So will we be able to offset further price erosion in FY 2025 also, or will we see the pricing headwinds impacting the profitability for FY 2025? We don't expect the pricing will be impacted further, and we will give you more details in the coming quarters, conference calls. See, we are identifying some areas where we could really add value, by making fully integrated, products. We'll give you more light in the coming quarters, what are the areas we're focusing in the API space. Yeah. Okay, sir. Thank you. Thank you. Next question is from the line of Madhav from Fidelity. Please go ahead. Hi, good evening. Thank you so much for your time. Just had one question on the IIT Kanpur link project, which you spoke about, where you said some revenue could start in FY 2026. Could you give some more detail in terms of how much CapEx are we doing here? And, I mean, who are the... Typically, who are the clients for these kind of projects? How many products do we have? It's like a slightly new thing. I don't think you mentioned about revenue starting from this part of the business earlier. We expect some revenues will come next year for vector manufacturing. In that, CapEx and OpEx in the next three years could be potentially closer to INR 300 crores. Next two years, CapEx and OpEx put together. Okay. Okay. So INR 300 crore of CapEx over the next three years? CapEx and OpEx. I'm not saying only CapEx, it's both. Oh, total. Total. Okay, okay. Yeah. So when you say OpEx, it means, like, R&D spends, for, I mean, that's where the area of spend is, only? R&D spend will be in the range of 5% only, yeah, still. Of the company as a whole? Company, the overall company. I think, CGT, what Dr. Satya said, you need to keep in mind that it is assuming that it needs to pass through a clinical trial. Majority costs will be for the clinical trial. So otherwise, if it is not successful, then clinical trial costs will not be incurred. Okay. You are saying INR 300 crore, CapEx and OpEx which will happen is linked to a clinical trial, which will come in if the project moves ahead successfully in the next few phase, sort of, steps that you have. Yeah. Okay. Perfect. All right. Thank you. Thank you. Thank you. Next question is from the line of Aniket Singh from Kotak Institutional Equities. Please go ahead. Hi, thank you for the opportunity. This is Alankar here from Kotak. So just one clarification on gross margins. You made that point on lower contribution from synthesis and bio. We're just trying to understand whether higher CMO contribution in the API segment has also led to lower gross margins in this quarter? The CMO segment in APIs is better than the general APIs, but less than the CDMO. So you are right, that is also a part contributor. Yeah. ...Understood, sir. So then, essentially from an overall EBITDA margin standpoint, would it be fair to say that our EBITDA margins can improve meaningfully and go beyond 20% once again, only once this synthesis and bio contribution increases fairly significantly? And of course, I mean, we need to adjust for the slightly higher CMO contribution in this quarter. But more from a directional standpoint, to go beyond 20%, we need a CDMO synthesis plus bio to increase meaningfully. Understood. And maybe one final question, sir. Regarding your discussions with CDMO clients, are these more with existing clients, or has the engagement with potential new clients increased significantly over the past year or so? Two new clients, but extended more relations with the existing partners. Sorry, I missed the first bit, sir. You mentioned- We added two new clients and extended in the sense, increased our product basket with the existing clients. When you say added two clients, does it mean, on the engagement side, there could potentially be more clients we are discussing with, more new clients we are discussing, potential CDMO contracts? At the early stage, at the very early stage. Yeah. Nothing meaningful will come in the 12 months from the new clients. So by the time we sign CDA, in 6 months it will be over. Fair enough, sir. That's helpful. Thank you and all the best. Thank you. Thank you. Next question is from the line of Forum Parekh from Sharekhan. Please go ahead. Hello. So, sir, I think you said that in CDMO sales, sales from crop protection and CGT sales would not be a part of sales in for the next one to two years. Even animal health sales would be after FY 2027. So with the same amount of CDMO sales, can we assume that EBITDA margin for the next one to two years would be in the same range? Or there is a potential to increase, you know, the EBITDA margins. So how should we look at it? See, don't I mention crop sciences and CGT? No revenues will come from FY 2025. With the animal health, revenues will come in FY 2025 itself, but the peak revenues in animal health will be in FY 2027. Okay. So, with this, so do we at least see 100 basis points increase in EBITDA margin annually? I think we don't want to give specific number. We hope the EBITDA margins will improve, because see, we are not taking any new initiatives. People are there at all these new factories. So any sales coming from, extra sale coming from, will, should add it to the EBITDA margins. Okay. And, sir, my second question is on the ROC. We are at the bottom of the ROC levels right now. So from here on, what is our plan? I mean, what do we have any target ROC in mind, for the next couple of years? We can't tell for the ROCE for the couple of years, but broadly, we always used to aim for 20%-25%. But I think because we made a lot of investments, once we started yielding out of this investment, we can give better ROCE. Okay. That's helpful. Thank you, sir. Thank you. Thank you. Thank you. Ladies and gentlemen, that was the last question of the day. I now hand the conference over to Dr. Satya for closing comments. Thank you for participating in our Q4 FY 2024 and financial FY 2024 results. We appreciate outside in view of the organization and asking very relevant questions. Thank you, everyone. Have a good evening. Thank you. On behalf of Antique Stock Broking, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.