Please note that this conference is being recorded. I'll hand the conference over to Mr. Monish Shah from Antique Stock Broking. Thank you, and over to you, sir. Thank you, Seema. Good evening, everyone, and welcome to Laurus Labs Q1 FY25 earnings conference 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. On behalf of Antique Stock Broking, I thank the Laurus management for giving us the opportunity to host this call. 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, for your introduction. Thank you all for joining us on our Q1 FY25 results conference call. We are pleased to have this opportunity to update you on our progress and answer your questions. As we continue to grow and innovate, we are embarking on Laurus's most significant rebrand initiative in a decade, making the start of our new journey towards expanded horizon. Our new tagline, "Chemistry for Better Living," reflects our dedication and purpose in leveraging scientific innovation and chemistry to enhance the quality of life for people around the globe. I'm confident that the new identity will reinforce our global positioning as a provider of manufacturing as a service in the pharmaceutical and biotechnology landscape. We have begun our FY25 on a positive note, sustaining momentum in our key CDMO clinical projects and demonstrating resilience in our financial health. We are leveraging the power of our wider and sustainable technology platforms and commercial excellence to advance our partners' pipeline projects and maximizing the impact of our robust integrated model in delivering long-term stakeholder value. We are currently engaged in delivering multiple RFPs involving multi-step complex chemistry, large-scale biocatalysis using in-house manufactured enzymes, for our partners' clinical programs. I would say we have imparted large opportunities ahead of us, and we are highly focused on realizing them starting the second half of this financial year. We have invested significantly towards expanding our development and manufacturing capabilities over the last few years, and this has been painful because of significant deleverage. But we believe this will be very rewarding and will significantly support another transition at Laurus of converting from highly generic focus into a well-respected and diversified CMO-focused company. Our commitment to disruptive technology in cell and gene therapy space continues to do well, especially enabling broader access to innovative cell therapy product, NexCAR19, for patients in need. In gene therapy, we are actively progressing on the construction of a GMP lab with a focus on manufacturing GMP viral vectors and gene therapy products. Moving on to our financial results, our Q1 results demonstrated continued strong resilience in financial health, reflecting robust business quality across divisions despite pricing pressure in generic APIs. I would also say that Q1 has been largely on expected lines as we prioritized a lot of resources towards delivering several clinical phase complex projects. The performance is expected to pick up through the second half. For the quarter, we delivered a satisfactory revenue growth of 1% and achieved revenues of INR 1,192 crores. Strong growth in oncology APIs and foreign demand in the ARV portfolio was offset by slightly sluggish performance in CDMO division. Gross margins were strong and maintained above 50% range, while EBITDA margins remained subdued at 14% due to lower asset utilization and dilution from investments in growth projects and new initiatives. I would like to share key updates on various business divisions. In the CDMO division, we continued operational commercial improvements and recorded sales of INR 214 crores. Revenue is on expected lines driven by significant resource allocation to various clinical phase deliveries. This also reflects growing customer confidence in our wider technology platform and capabilities like hydrogenation, flow chemistry, biocatalysis, and large commercial capacity. For the full year, we remain committed to a healthy growth outlook, which is supported by scheduled project deliveries for key late-phase NCE projects in the quarter four of this financial year. Momentum in RFP continues from big pharma and large biotechs, and we are also increasing our business development efforts towards securing early-stage projects to widen the project pipeline. As mentioned earlier, we are working on over 70 active projects, ongoing commercial supplies for about 10 products, including APIs as well as several advanced intermediates. Key CDMO focus growth projects are progressing in line with planned. Animal health facility under early ramp-up phase. Commercial validations are going on. Crop Protection facility qualification is targeted by the end of FY25. R&D center commissioned in the next month, which will further expand our R&D capabilities to support new business opportunities. Our focus continues on leveraging significant scientific overlaps and building diversified revenue streams from customers. In the generic API division, revenues from this division are at INR 664 crore with a 10% growth, supported from strong oncology delivery and foreign demand in the ARV volumes and growth in other APIs. The ARV APIs retain volume-led strategy. Vincent Jensen, please stay connected. The line for the management has got disconnected. Ladies and gentlemen, thank you for patiently holding. We have got the line for the management reconnected, so please go ahead. Thank you. Sorry for the disconnect of the line. I'll continue giving the progress on our generic APIs, especially the ARV API. The ARV APIs have retained its volume-led steady momentum and reported revenues of INR 400 crore. The current order book for our product basket looks encouraging, supported by additional supply contracts secured through successful tender wins by our customers. We continue to maintain a leading market share in the first-line HIV treatment. Oncology APIs reported a Q1 sales of INR 120 crore, 120% growth year-on-year. We have completed validation of new oncology products at our Vizag site with increased batch sizes and currently waiting for regulatory approval for our customers. We believe our portfolio breadth and capacity, along with ongoing positive market dynamics, will continue to support additional volumes in this division on an annual basis. Other API segments, which include cardiovascular, diabetes, and asthma, reported sales of INR 144 crore, growing 6% year-on-year. Sequentially, sales declined by 24%, mainly due to timing of some CMO contract delivery schedules. We are working towards expanding CMO engagements and remaining committed to long-term growth with a clear focus on cost leadership in select high-value APIs. During quarter one, we filed 3 DMFs, all in non-ARV category. With this, the total number of DMFs filed to date is 86. In the generic formulation space, we reported overall revenues of INR 274 crore for Q1, decreasing 4% over last year. On a sequential basis, revenues decreased by one-third, mainly impacted by global agency's buying pattern in ARV formulations. Strategic JV with KRKA has been incorporated and progressing well. Over the medium term, JV focus will continue on delivering synergies and enhancing the product portfolio. Meanwhile, to meet the near-term needs of our partners, we have extended our existing CMO collaboration to include additional oral solid dosage manufacturing lines at our existing Vizag site. These expanded lines will go on stream in the next 18 months. Coming to LMIC business, overall market volumes are largely remained stable, partly supported from stable pricing trend over the last two to three quarters. We continue to pursue optimization programs to counter any pricing impact. We believe the impact in ARV franchise is broadly stabilized and expected to stay in this stage. Coming to the developed market, we continue to perform well across our broader portfolio despite higher competitive intensity. During Q1, we filed one Dossier in the U.S. and obtained four final approvals, three in the U.S. and one in Europe. In the U.S., while the price pressure has continued, we are working towards increasing the volume share on select products. Also, we expect to see the benefit from recent ANDA approvals in the next couple of quarters, supporting our anticipated full-year utilization pickup. Cumulatively, we have a total of 41 ANDAs filed to date. Of this, we obtained 21 final approvals and 14 tentative approvals so far. We continue to have a diverse portfolio and pipeline, including product franchises comprising ARV, cardiovascular, diabetes, CNS, and gastro. We have a total of 62 products in the R&D pipeline, either under review or under development, having a significant addressable market value. On the R&D front, overall R&D spending to sales for Q1 FY25 was at 5.4%, increased by 35% year-on-year. Higher R&D spend is in line to enhance our pipeline and includes spends towards additional initiatives in cell and gene therapy assets. We continue to invest in the portfolio with a product-specific approach based on complexity and scale economics. In the Bio division, we reported sales of INR 43 crore. Sequentially, sales have recovered strongly due to customer orders. The growth was led by diversifying the application of our CDMO services. We initiated discussions with several strategic customers for long-term collaborations. We continue to grow our enzyme engineering and production for small molecule, clinical, and commercial projects, which will augment our pipeline using green chemistry for sustainable manufacturing. Our plan to build larger fermentation capacity in Vizag has broken ground, and we are accelerating efforts based on the availability of support services like ETP and other services. And we also wanted to utilize this facility for GMP pharmaceutical manufacturing. We expect this facility to be commissioned by June 2026. Let me share briefly on our quality side as well. In quarter one, the company underwent 32 quality audits by multiple drug regulatory agencies and several customers. The company has successfully passed audit inspections without any critical findings. This includes successful US FDA inspection of our two large API manufacturing facilities, Unit 1 and Unit 3 in Parawada, Vizag, which has recently received EIR. In summary, our R&D-led commercial strategy is delivering on compelling growth projects. The confidence is strong and also growing, but we are taking the right steps to best position the company for value creation this year and take the company well into the future. With that, I would like to hand it over to Ravi to share financial highlights. Thank you, Dr. Satyanarayana Chava, and a very warm welcome to everyone for our first quarter of FY25 earnings. Total income from operations is INR 1,195 crores, taken as INR 1,192 crores year-on-year, which is a flat rate. As Dr. Satyanarayana explained, quarter one is largely on expected lines, as a lot of resources are prioritized towards delivering several clinical-phase projects, and the performance is expected to pick up mostly from H2, as this was already indicated in our previous call. Supported by on-hand orders by the project deliveries. Gross margin maintained at healthy level at 55%. This is due to product mix and some of the cost savings that we achieved in the non-material price negotiation. Our EBITDA for quarter one is at INR 171 crore, at 14.3%, which is in line with the previous quarter-on-quarter. But we expect improvement in the second quarter, second half. Our valuated EPS for quarter one is at INR 0.323. Our ROCE was at 6%. Of course, because of the lower revenue and lower profitability, we may also not be comparable. On the CapEx front, we invested close to INR 125 crore in this quarter, and our net debt stood at INR 2,633 crore. Going ahead, we remain committed to delivering on our FY25 growth outlook, and we will prioritize investment into high-value business segment to drive medium and long-term growth. Besides, the focus will also continue to improve on our working capital issues. You can refer to our IR presentation for more details. If anything, additional information you need, please contact our IR, and we will provide. With this, I would request the moderator to open the lines for Q&A. Hello. Hello. Hello, sir. Can you hear me? Yes, we can hear you very well. Thank you very much. Ladies and gentlemen, 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 will wait for a moment while the question queue assembles. Thank you. We take the first question from the line of Sajal Kapoor, an individual investor. Please go ahead. Yes, thank you for taking my questions. Hello, Dr. Satyanarayana Chava. In one of the slides, I mean, there was no slide number, so I can't refer to the slide number because there wasn't any. But in one of those slides, it was mentioned that out of the 28 customer audits conducted in Q1, how many were CDMO client audits out of these 28 that happened in Q1? And what are these customers looking for? And I mean, what draws them to Laurus when there are so many other CDMO companies in India? Thank you. Thanks, and we'll have afternoon discussion. I would say at least half of the audits are done by CDMO customers. Some of them are periodic audits because they have to do audits in a stipulated time frame. And some of them are from new customers which we are onboarding. And is the intensity increasing? So what was the number, let's say, two years ago versus today? I mean, do you see an increase in customer visits, customer audits, above and beyond the RFPs? So I know you mentioned RFPs are coming, but are customers actually traveling to India and physically seeing the facilities and the infrastructure? I think there is a significant increase in visits, followed by the quality audits, followed by safety audits, and then they roll out the RFPs. So to get an RFP, we have to go through a long process. See, no big pharma, no NCE customers would like to give an RFP and a project without their commercial team visiting, without their quality team visiting, without their EHS team visiting. They can give a clinical project, but when we are talking about late-stage clinical programs, I think their audits are sometimes multiple days, sometimes involving multiple facilities also. Yeah. Understood. On the Laurus Bio slide, it's mentioned that initiated discussions with several strategic customers for longer-term CDMO collaboration. The question really is, why are customers interested in Laurus Bio given that R2 is fully booked and new capacity will only come online when R3 goes commercial? So when there is no capacity available, how can we engage in discussions 3 years in advance? Because R3 going commercial, I think, is give or take 3 years away, right? It is 24 months away. We are also building fermentation capacity 5 years also, which will come a little earlier to R3. The long-term contracts are customers who are willing to sign long-term contracts are visiting right now because they are running their projects currently at R2. It's not that we are bringing in new customers for R3. Actually, the customers who are using R2 for pilot scale of their programs are talking to us for the large-scale manufacturing in R3. Right. You mentioned Vizag Fermentation, but that's under GMP Fermentation, and that's under Laurus Generics, if I'm not mistaken. That's not under Laurus Bio, correct? No, it is not Laurus Bio. So there are two programs initiated when compared to the last two quarters and right now. Because of the higher demand of GMP intermediate manufacturing in our generic products and also some enzymes which need GMP manufacturing, anything related to GMP manufacturing and which involves organic solvents used after fermentation, those will be done at Vizag. And the fermentation, which doesn't involve any GMP steps, doesn't involve any use of organic solvents, will be done at R3. I think that is a very easy answer why we are keeping R3 under the Bio umbrella and another facility under Laurus umbrella. So we want to segregate GMP manufacturing and non-GMP manufacturing. Understood. And lastly, very quickly, on the OpEx side, during the AGM that was conducted a few weeks back, you mentioned that today 80% of the scientists are on the CDMO side as compared to only 20% a few years ago. And if I look at our scientific count, so 2019, we had about 200 scientists in the synthesis division or the CDMO division versus today we have no less than 800, give or take. And now we have got this new Genome Valley Center coming up, which will add to our OpEx fixed cost further. So it's kind of nearly a five-fold jump in our scientists on the CDMO side, which is giving a significant high OpEx fixed cost, right? I mean, you mentioned H2 is when we see the benefits emerging. How confident are we that we are not misallocating capital or we are overestimating the demand coming on the CDMO services? I mean, is the customer giving us enough assurance that gives us the confidence to increase a five-fold increase in the scientists on the CDMO side? This is a very great question, Rajan. So as you mentioned, a lot of resources are being allocated currently for late-stage projects for big pharma. So if you are putting resources on a phase I molecule with 30 steps and it will take 100 scientists, the outcome may be questionable. But currently, we are taking very minimum early-stage projects so that we don't put resources on a project with uncertainty associated with that. So most of the resources are happening in projects with big pharma, with oncology, some of the projects in oncology, some of the projects in rare diseases with high dosages. Our expanded R&D capabilities will augment our ability to take early clinical projects, as you mentioned in this presentation. We want not to neglect increasing the funnel by taking more early-stage projects. But Satyanarayana, actually, we have not increased five-time resources. So the resources, I think, if I'm not wrong, maybe 25%-30%. But what Dr. Satyanarayana said is reallocating some generics. Generics. That's what he's saying. So understood. Okay. We can allocate because of the new R&D. Yes, it will be done, but it will take your productivity also will improve. Yeah, yeah. Sure, sure. Very quickly. Sorry to interrupt you, Mr. Kapoor, may we ask you to rejoin the question queue, sir? We have several participants waiting for their turn. Thank you. We take the next question from the line of Mr. Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead, sir. Yeah. Thanks for the opportunity. Am I audible? Yeah, yeah. You're audible, Mr. Manudhane. Yeah. So firstly, how much was the ARV sales for the quarter? About ARV, API is around INR 400 crore and formulations. 552. 552. 552. 552 crore. Yeah. More or less INR 552 crore, huh? Yeah, yeah. So the reduction in the year, so basically trying to understand the jump in the gross margin when the custom synthesis sales have been lower and even the formulation sales have been lower on overall basis. If you could explain the sharp jump in the gross margin and sustainable gross margin. Sure. So the gross margin improvement is based on one is the product mix. We have a significant increase in our oncology sales. Also the gross margin in APIs also increased because of the favorable pricing mechanism from ARV, API, RMS. Also the process improvements done in Unit 1, Unit 3, large volume APIs. These three factors led to the improvement in the gross margins. Oncology's proportion has been largely stable as a percentage of sales. May have been fourth quarter or even, let's say, earlier quarters as well. Yeah. The significant impact came from raw material cost reduction in the overall large volume APIs, supported by the process improvements that we have done in the previous quarters, also came in the Q1. Got it. Secondly, on the long-term CMO agreement which is signed in FDA, so two questions to this. How much CapEx will be required while this would be funded by the customer? And this is for a patented product or a generic product? This additional CMO contract we are signing is to give additional manufacturing lines in our oral solid dosage form facility in Unit 2 for our partners. Currently, we do about 2 billion tablets contract manufacturing there. Our partner is asking for additional capacity. We are adding several lines. Eventually, we will give additional 3 billion tablet capacity over a period of time. Most of the CapEx will be funded in the sense they will give advance and we will install the capacity. Yeah. Would this be for, again, the generic product or for a patented product? Mostly, this CMO contract is generic formulations. Yeah. Got it, sir. And lastly, on this fermentation facility at Vizag, how much investment would be there and over what period of time? We expect about INR 200 crore investment into Vizag. We expect it to be ready by mid-2026. All right. Thank you. Thank you. Thank you, sir. The next question is from the line of Mr. Balaji Boina from Kotak Securities. Please go ahead, sir. Sir, Mr. Balaji, your line is in the talk mode, sir. Please go ahead with your question. As there is no response, we move on to the next question from the line of Krish Mehta from Enam Holdings. Please go ahead. Thank you for taking my question. And so his question was on the leverage in terms of net debt to EBITDA. So as our capacity utilization will increase gradually over the next year or two years, how do you see this ratio settling in terms of it being 3.3 and slightly elevated at the moment? But how do you look at it on a steady-state basis? Can you just speak a little louder? Can you repeat your question, please? Yeah. Am I audible? I'm sorry to interrupt you, Mr. Mehta. Are you connected on your phone? Yes. Am I audible? Please switch to your handphone because your voice is echoing. Hello? Yeah, go ahead. Yeah. Sorry. I just wanted to ask on the leverage issue in terms of the net debt to EBITDA being elevated at 3.3x. So as our capacity utilization increases gradually, how do you see this settling? I think the net debt to EBITDA is because of the lower EBITDA. I think by, as we indicated, for a four-year basis, actually, we'll be definitely improving. As we indicated before, we are targeting to make it less than 2.5x by end of March 2025. Okay. That's helpful. I wanted to ask the second question on the mix in terms of the ARV and non-ARV. Given that in Q4 and Q3 of last year, we were around 50% and it gradually come off a bit, how do you see this mix if you look at, say, from a one- to three-year basis going forward? I think, as we mentioned in previous calls, the overall ARV franchises will remain, give or take, around INR 2,400 crores. Yeah, INR 2,400-INR 2,500 crores. That's the range we expect, despite how much effort we put. Because we don't want to invest more in ARVs. The APIs want to, because most of the investment going in other areas. So even in Q1, we might have seen our ARV contributed INR 550 crores out of INR 1,200 crores. So INR 650 crores came from other APIs, other businesses. So as we grow in other businesses, especially what we are saying, our Animal Health facility is going on stream. Our Crop Protection facility is going on stream next year. Most of the clinical programs, late stage, we deliver second half of this year. And the commercials kick in next financial year. So gradually, we expect the revenue contribution coming from ARV, APIs, and formulations. The quantum will remain same, but the percentage will significantly come down over a period of time. Without one comment, the percentage, then you can gauge what is the top line. So we want to leave that space open. Yeah. Okay. Thank you so much. Thank you, sir. The next question is from the line of Jeevan Patwa from Sahastra Capital. Please go ahead, sir. Yes, sir. So our first question is on one of the slides where we mentioned that we have done some INR 2,600 crore CapEx. So out of that INR 2,600 crore CapEx, how much is currently being utilized? How much is not being utilized? Mr. Jeevan Patwa, what is happening in the current capacity utilization which we have built for CDMO projects? Right. We are not utilizing a full capacity. Suppose we are doing 20 chemical steps in a project. We cannot do all 20 steps at a time because the project is not commercial. We do step one, step two, step three, step four. So the facility which we do this complex chemistry, maybe if you see the reactor operation, it could be between 10%-20%, no more. But the facility looks like fully occupied, but the actual utilization will be very, very marginal. So going back to the question, this INR 2,600 crore investment, about three-fourths of that is done for CDMO. Yeah. Okay. Got it. Got it, sir. And second part is, so we are actually seeing last 2 years that FY25 is the year one should be watching out for. But the first quarter actually doesn't look like the quarter. So even last quarter, we said that all bad quarters are behind, right? But Q1 is, again, I don't think it's a good quarter again. So any color on this? Are we still think that FY25 will be the big year or you think 26 will be the big year now? Given that we said our H2 will be better, actually, we have indicated H1 will not be that great, and H2 will be definitely better. That's what we indicated. And frankly speaking, this quarter one is in line with our internal guidance. So we are in line with the thing. And FY25 definitely will be a good year. But we indicated FY26 will be the much better year because some of the assets which were invested, like animal health, etc., will start yielding results. And we have done a lot of work on the CDMO side. So we talked about a lot of processes that we have developed, biocatalysis, continuous flow chemistry, and all that. And we are talking to a lot of big clients since last few quarters. So anything where we see any color on any large contracts or anything which is under negotiation in the last stages or final stages, do you see any? So how do you see that? What we can say, we have utilized our biocatalysis expertise and we are making enzymes and using in the late-stage engineering programs. That's the one good thing. And second, when we are saying continuous flow chemistry, we have delivered registration batches for an API. I would say we have completed registration batch in API. Delivery is in API in this quarter, using continuous flow chemistry. So we are demonstrating our capability, which are going into the registration files of our partner products, large-scale biocatalysis, large-scale continuous chromatography, large-scale continuous manufacturing. These are going into our partner products. And we are also adding continuous manufacturing in hydrogenation also. We are expanding our capabilities. These will go into the files once they get approval, and then the commercials will kick in. Yeah. Great. Great. That's it, sir. Thanks a lot. Thank you. Thank you. Before we take the next question, a reminder to all the participants. If you wish to ask a question, you may press star and one on your touch-tone telephone. The next question is from the line of Bharat from Quest Investment Advisors. Please go ahead, sir. Yeah. Thanks for giving the opportunity. Sir, in annual report, I see that there are 17 Para IV and 11 FDF opportunities. May I know when can we expect the revenue from these Para IVs and FDF? It will come from FY20. The major will come in FY29, not before. Okay. This question is more on the macro level. I want to know your opinion on this Biosecure Act in the U.S. Do you see supply chains shifting away from China for the innovative CDMO? May I know which country will benefit most from this shift? Do you see any supply chains shifting to India? I think because of the Biosecure Act, people will diversify their supply base. That's for sure. India is likely to get benefited from this. It's not going to be a major reaction. Nobody is going to shift in two months. They will take its own time. They visit, they audit, and they give a small project, and then increase the collaboration over a period of time. I think in the long run, it will benefit. In the short run, it is not going to happen in a quarter, in two quarters. It will take its own time. Yeah. In the long run, it is a definite step, good step towards the CDMO opportunities for Indian companies. Okay. Thank you. And sir, you guided that the ARVs in total would be around INR 2,500 crore. And for FY25, also, the guided margin was around 20% EBITDA. Are you still confident of achieving these two guidance, sir? Yes. Yeah. Broadly, yes. Yeah. Okay. And regarding the new CapEx in FDF that is funded by customer, I just want some clarity on this one. So are you going to expand Unit 2 from 10 to 15 billion, or is it Unit 2, 10 billion itself, so you are giving some education to this new customer? We plan to expand. But current 10 billion is not enough for our products and the partner products. So partners need certain type of equipment, certain type of technologies. So we're buying partner-specific equipment and installing. That is an expansion. So in 18 months, our capacity at Unit 2 is going to be 13 billion tablets, not 10. Okay. So INR 3 billion for this new customer and INR 3 billion for joint venture with KRKA, and then the rest would be used for ARVs and our general things, right? Yeah. Okay. Okay then. Yeah. Thank you very much. Thank you. Thank you. We take the next question from the line of Rishabh Jain from Sancheti Family Office. Please go ahead. Hello, sir. Am I audible? Yes, sir. It is good if you can speak a little louder. All right. So yeah, I wanted to understand. In the annual report, it mentions that there will be pricing headwinds in some parts of the API portfolio. So, need some light on the reasons for this and how long will this continue. Further, how much impact on margin this will cause and how much of this? Sorry. I'm unable to hear clearly. Are you using a headset? I'm using my headset only. Am I audible now? Sir, you're having to switch to your handset, sir. Yeah. Headset only. Yeah. Headset on the phone. Sir, could you please take off your phone and speak through your handset? Yeah, sure. Am I audible now? Yeah. Very good. Yeah. Yeah. So my question is, in the annual report, it mentions that there will be pricing headwinds in some ARV portfolio. So, shed some light on the reasons for this and how long will this last? First question. Second, further, how much impact on margins this will cause and how much of this pricing impact company expects to be moderated by cost improvement measures and increase in CDMO and biotech business? As you have seen, our quality of business is very good as we demonstrated gross margins around 15%-50% consistently. Despite price of APIs going down, we were able to maintain that gross margin because if you look at our last few quarters, the growth in CDMO revenue is not big, but we were able to maintain the margins at healthy 50% or above. That was primarily because of our sourcing benefits coming from the softer RM prices and higher opportunities and higher process improvement benefits coming from our R&D efforts. These two are the main reasons we were able to offset the price headwinds in the APIs. All right. Also, I understand. What are your any guidance? Guidance within 4-5 years? I'm sorry. We are not giving guidance, but we are saying, as you mentioned, we are confident that the performance will certainly improve from H2, and we are very confident on delivering some interesting and large CDMO opportunities. All right. Any outlook on Agro side? Agro, no revenues will come this year. Facility will be commissioned only by end of this financial year. All right. All right. Thank you. Thank you. Thank you, sir. The next question is from the line of Mr. Smith from RDA. Please go ahead. Yeah. Thank you for the opportunity. As I can see, we received patents for Ivacaftor. Are we pursuing opportunity in API market or formulation market? We are pursuing several patents, but that doesn't mean all patents will pursue for commercial opportunity. Yeah. Okay. But anything, I mean, what is the market, I mean, addressable market and something like it? No, no. We cannot give product-specific guidances. Okay. Thank you, sir. We take the next question from the line of Marta from Fidelity. Please go ahead. Hi, good evening. Thank you so much for your time. When you speak about the CDMO or the NCE commercial CDMO launches in quarter four or second half of this year, does that mean that the products sort of move through the R&D pipeline for the customer via Laurus and now it's kind of commercializing for the customer with the new launch? Is that how we should look at that opportunity? No. We are not delivering commercial quantities. We are delivering projects for their registration purposes. Okay. Yeah. This is basically after phase III, but before actual launch? After phase III. Yeah. Okay. So if this basically the registration batch succeeds, then FI26, we see commercial volumes coming in for that particular product. Is that how we should look at it? Hopefully. We also expect the same. So the chances of success of these programs generally are very high because these are in the registration phases. So we expect for complex molecules, their supply chain also needs a lot of longer lead times. So hopefully, once we deliver these registration batches, we expect some commercial quantities in the next financial year. Currently, I think, if I understood right from the presentation, we are supplying volumes of? No, you lost you. Sir, the line for Marta has got disconnected. We'll take the next question from the line of Harshil Patil from Mirae Asset Capital Markets. Please go ahead, sir. Yeah. Good evening, sir. Thank you for the opportunity. Sir, just had one clarification. For the PPTs, if I have to refer to the API PPT slide, there's a comment which says that overall sequential decline due to timing of shipments particularly. So is there any problem that we faced, any logistical issue that we faced? And do you see this more as a transient thing or what? No, no. That's not very. We can't give you a specific reason for that. Yeah. Okay. But is it at least transient in nature so we can expect the normalcy to be retained? Yeah. Yeah. That was there, sir. And secondly, with respect to the CDMO thing, definitely you clarified on the NCE schedule deliveries. But with respect to the existing supplies, sir, if you could just talk a bit about the traction and what kind of improvement we could expect for FY25? I think our base of commercial deliveries is, give or take, INR 200 crore per quarter. That doesn't include any additional opportunities what we are delivering at what we are committed to deliver and where we have orders on hand. So once we deliver new opportunities, the value will go beyond our regular supplies. Okay. Got that. Got that. And lastly, if I can just squeeze one, probably on the margins where we're seeing that the API prices are getting a bit more softer, so believe that our margin trajectory, as you've guided, would be maintained as part of that? I think at least gross margin trend, all of you might have noticed, last several quarters, we were able to maintain around 50% gross margin. So I think that we are very confident to maintain at that level. Yeah. So if you look at from in the presentation, second quarter FY23 to first quarter FY25, that means almost nine quarters, eight quarters. Eight quarters. 8 quarters, we were able to maintain around 50% gross margin. Okay. Thank you, sir. That was it from my side. All the best. Yeah. Thank you. We take the next question from the line of Nitin Agarwal from DAM Capital. Please go ahead. Hi, sir. Thanks for taking my question. Sir, on your CapEx plans, given where your various expansion plans are, what kind of CapEx do you envisage for the next two years? Let me give you a chance of CapEx for this year and next year. This year and next year, probably anywhere between INR 1,800 crore-INR 2,000 crore, maybe around that. Yeah. Yes. That looks good. Yeah. Ravi, how would you break that up into broad segments if you can? Gross net, as I indicate, sorry. Segment, the additional out of this, I think majority goes to the CDMO and some part goes to the FDF because of this specific requirement from one of the customers. Sir, on this customer specific requirement, where you mentioned in the presentation, you mentioned that CMO contract should start on F27. How should we think about the potential size or scale of this business? I think these are we know the volumes, we know the products, we know the price. So there are no surprises on either side. We are putting that capacity because we know how much we are going to make on that. Yeah, it is a very stable business. We are building that to a generic customer. We know the markets. We know what percentage of market share he is enjoying. I think that is going to be a very stable business for us. And sir, on this account, now since you're putting up additional capacities and formulations, this quarter, for example, over the last few quarters, we've had extreme volatility in our ARV supplies to LMIC markets. So the capacities that we have for finished formulations, are they fungible across ARVs and non-ARVs, or do we have to use a certain amount of capacity only for ARVs only? Oh, no. Formulation capacity is very fungible. So we can use it for ARV, non-ARV, diabetic cardiovascular. There are no challenges. Only the size of the batch determines which line we use. But is there any reason why? So what proportion of the capacity currently is utilized for ARVs or the formulation side? We are making about $100 million sales on average. So why we will allocate capacity to ARVs to something else? Sorry, sir? He's asking how much percent? No, how much percentage of capacity we're using for ARV? Maybe? Maybe 60-something. Formulation-wise, maybe 25% capacity used for ARVs. 25% of that? Yeah. Okay. Sir, lastly, on the CDMO business, because you obviously are into multiple negotiations, what is the nature of most of the business that comes in? It will be for early-stage projects, or do you have also opportunity for large supplies starting because you're probably taking on some of the more commercialized products? So do we have that commercial supplies coming through immediately, or you'll have contracts where you build up the relationship and then supplies happen over a period of time? Most of the supplies, what we mentioned, will happen in H2 of this financial year are for registration or phase III projects. So the certainty of those moving into the commercial is very high, and we expect some commercial orders will come next financial year. Okay. Thank you. Thank you. Thank you. We take the next question from the line of Marta from Fidelity. Please go ahead, sir. Yes. Sorry, my line had dropped. I was just asking that the one molecule which you spoke about, we're supplying the registration batch. So if I understood right from the presentation, currently, we are supplying 10 commercialized products in the CDMO division. So this one, if it succeeds, it will be the 11th product for us, which is commercialized. Is that how we should understand the business currently? No, no, no. When we said 10 products commercial, those are already in our base sales. What we mentioned, the new projects, those are more and above what we are supplying commercially. Yeah. Sir, basically, commercial doesn't mean that it's a commercialized molecule for the customer, basically. That's not what you're indicating here. No, no. 10 products, what we said, commercial, those are products commercialized that are customer-side also. That's all. Exactly. That's all. That's all. Okay. Okay. And just the other question was, in the CDMO business currently, how many of the supplies that we are expected to do in a certain time are for these registration which is very close to commercialization? Like 2, 3, if you could give some sense there. And how many are in late stages, basically? Typically, when people file NDA, they expect to launch in 12 months. Yeah. If there are no red flags raised by the FDA or the agency, they will launch in 12 months. Got it. For the particular project, is Laurus the sole supplier, or it's going to be like most vendors? We are not talking of one project. We are talking multiple projects. Nowadays, with the global supply chain challenges, nobody's going to use only one supplier for any project. I want to be very clear there.