Good evening, ladies and gentlemen. I'm Kritika, moderator of Marksans Pharma Q1 FY 2023 earnings call, hosted by DAM Capital Advisors Limited. As a reminder, all participants' 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 telephone. Please note this conference is recorded. I would now like to hand over the floor to Mr. Nitin Agarwal of Dam Capital. Thank you, and over to you, sir. Thanks, moderator. Hi, good evening, everyone, and a very warm welcome to Marksans Pharma Limited's Q1 FY 2023 post-results earnings call hosted by DAM Capital Advisors. On the call today we have representing Marksans Pharma management, Mr. Mark Saldanha, Founder, Chairman and Managing Director, and Mr. Jitendra Sharma, Chief Financial Officer. I'll hand over the call to Mark to make the opening comments, and then we'll open the floor for Q&A. Please go ahead, Mark. Thank you, Nitin. Welcome everyone to our Q1 FY 2023 earnings call. I'm pleased to share that we had a strong start to the year with a solid growth in the first quarter across our regions. Our U.S. grew by 25.7%, while U.K. and Europe grew by 13.7%, driven by a strong volume growth and new product launches. Pricing erosion continued to be high in single digits in the U.S., impacting our generic business. However, our ROW revenue doubled while Australia and New Zealand grew by 38%. The inflationary headwind continued in the quarter with an increase in cost of material and freight costs impacting our margins. However, we expect the situation to improve in the current year and cost pressures to be moderate. We have also started passing a price increase to our customers. We have continued to be innovative and launch products supported by R&D capabilities. We have a strong product pipeline and plans to launch several new products in the next two years. This will drive a sustained growth momentum and hopefully improve our profitability. We obviously aim to increase our R&D spend to 4%-5% of sales over the coming years. Our low cost manufacturing capabilities provide us with a competitive edge. We do plan to expand our capacities over the next 12-18 months. This, along with our backward integration plan into API or our core molecules, will help us expand our margins in the near future. Our aim as a company is always to be a fully integrated company with our own API, formulation, manufacturing and a forward integrated business module in the biggest markets. With this, I'd like to turn it over to Jitendra who will update you on the financials before we can start our Q&A. Thank you, sir. I will explain the financial performance of first quarter of financial year 2022-2023. Operating revenue was at INR 433.8 crore, increase of 24.3% compared with INR 349 crore last year. U.S and North America was the highest contributor at INR 173.9 crores and witnessed 25.7% growth year-on-year. EU and U.K. formulations market recorded 13.7% growth, standing at INR 181 crores. Australia and New Zealand formulation market recorded 37.8% growth at INR 52.6 crores, whereas the Rest of World recorded 99% increase in the sales to INR 26.3 crore in Q1 of FY 2023. Gross profit was at INR 218.9 crore in Q1 of FY 2023, increasing by 17.3% year-on-year. Gross margin declined by 302 basis points from 53.5%- 50.5% in Q1 of FY 2023. EBITDA was at INR 72.9 crore, decline of 5.8% year-on-year due to continued cost pressures. Our depreciation was at INR 11.1 crore at a normalized level versus last quarter, where it increased due to Ind AS 116 lease accounting. Consequently, our PAT was INR 60.2 crore in Q1 FY 2023 compared to INR 62.6 crore in Q1 of FY 2022 and INR 29.7 crore in Q4 of FY 2022. Our R&D spend in the quarter was at INR 8.9 crore, that is around 2% of the sales. We continue to remain debt free and our cash and cash equivalent in the books was at INR 339 crores as of 30th June 2022. With this, I would like to open the floor to the question and answers. Thank you very much. Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star and one on your telephone keypad and wait for your turn to ask a question. If you would like to withdraw your request, you may do so by pressing star and one again. I repeat, ladies and gentlemen, if you have a question, please press star and one on your telephone keypad. We will wait for a moment while the question queue assembles. First question comes from Manoj Mathew Jacob of Edelweiss. Please go ahead. Hello. Mark, congratulations on the results. I have just three questions to you. Question number one is, this increase in turnover year-over-year, is it because of the additional capacity that has come into effect in the Goa plant? Because in 2020, after the March results, you said you're gonna double the Goa plant production. Can we expect more turnover this year, or is this the turnover we could expect for the next quarters of this year? The second question is, when can we expect the API to come online? And since you said the core molecule, it'll all be in the pain segment. Hello? Yeah, I can hear you. I'm here waiting for your questions. I'll reply once you finish all the questions. Yeah, I'm done. I'm done with the questions. All right. The increase in sales is obviously proportional to the capacity, and over time, we have increased capacity. Every year we spend a lot of CapEx increasing capacity to meet our demand. We do expect to maintain this trend for this current year. However, that said and done, we have aggressive plans to increase our capacity further in the next 12-18 months, which will again fuel the next year's growth plan. With regards to API, when will the API come online? It's a bit longer than expected. We're working. We expect to file at least two DMFs this calendar year, and maybe three in the next financial year. Obviously, once we file the DMFs, we need to trigger those API onto our active licenses, which normally takes anywhere between six to nine months. Hopefully, by next year, we should have couple of our products onto our licenses where we'll be fully integrated on. Okay. [crosstalk] My last question, okay? Yes. I remember you telling me that in January, April, and July, you have your price renegotiation with the buyer. Yes. With Kroger or Sam's Club and all. Now the price revision is done and over. Can we expect a better EBITDA and net profit next quarter? We have basically asked for price increases, and normally the price increases, like you rightly said, happens at a particular time. Some have happened in April, some are happening now in the month of August. While that's said and done, we still continue with cost increases at the other end. When you do a price recommendation, you start from one point, but if cost escalates further, it again, you know, you're just basically it is just eroding the advantage that you would have got. That said and done, we are seeing prices tapering down, raw material prices coming down. We are seeing oil and crude prices coming down. We do see it basically continuing in this year. By the time it actually kicks into the system, by the time you actually see the end result of that, I have my doubts whether this financial year you will see the direct impact of all this happening. Hopefully the next year will be much better than this year. Okay. This year we can't expect a PAT margin of 20%. It'll still be at 16%. Yeah. Around 15%-16% is, and EBITDA will be about 15%-16%. EBITDA. Okay, thank you, Mark. Thank you. Thank you. Thank you, sir. Next question comes from Yogesh Tiwari from Arihant Capital. Please go ahead. Good evening, sir. Thank you for taking my question. Congratulations on the result. My first question is regarding the U.S. market. As you pointed out, that there was a high single-digit erosion in the U.S. Market. Just wanted to understand, because the revenue grew by about 25%, the volume growth would be about 30%. If you can share some highlights which molecules contributed to this high volume growth, what would be the contribution of new product launches and previous launches in this volume growth? The new product launches, obviously, you will see the impact only in the last quarter and moving beyond the last quarter into the next calendar year. Obviously, you know, we have some contribution coming in. The high cost increase, single digits growth which I mentioned is because of various factors that come into play into raw material cost, you know, the packaging material cost, the freight cost, all contributing. No single molecule per se has contributed to this rise. It's been entire basket of products have basically performed and, you know, given decent revenues. There are a few products which have taken a back seat because of price, you know, erosions. Again, the pain segment, the cough and cold allergy segments and, you know, are main contributors to this driven growth. Sir, how is the pricing environment in the U.S. now? Is it similar, like, high single digit, which was in the previous quarter, or it has moderated currently? So far it is showing that trend, but it is showing a bit of moderation also. Now, with the raw material prices, you know, tapering down a bit. I don't think it will go back to the old number, old pricing of raw materials that we saw two years back. I do see the raw material prices getting better. It's not, at least, increasing further. It's coming down. That said and done, the competition in the U.S., the consolidation which has taken place, the correction which has taken place, it will take some time to see better numbers out there. Challenges remain in the U.S. We are, you know, moving against the trend out here, and we are trying to differentiate ourselves among everyone else. Sure, sir. Is the pricing erosion still similar to Q1, like in high single digit? Yes. Yeah, it is very similar to that. Any consolidation happening in the oral solids in the U.S. because of this challenging environment? Any companies which have shut down operations or maybe? No, actually, consolidation is not happening from the company standpoint of view because they are flushed with capacity and the demand is lower than what it was peak of COVID times. Obviously, the impact of what you see with a lot of companies is basically the consolidation in the distribution channel, which is basically having an impact in the demand and supply situation. This is creating, obviously, price erosion happening and you know, oversupply happening out there. It will take some time to correct, but I do believe eventually it will correct. Yeah. Any data around what would be the inventory of, you know, pain management in the U.S.? Because that might be one of the factors behind the price erosion. Any data between now and previous quarter for pain management? You're talking of inventory? Basically what we understand is like there has been some buildup on inventory in the U.S. market which led to price erosion in previous quarters. No, I don't think that would be the right statement of inventory buildup. I think it is more with the demand and supply situation. There is more supply, more capacity, more capabilities, and the demand has come down. Obviously, that's where you know companies tend to take aggressive stance to utilize their capacity. That said and done, I don't have the numbers of what the inventory is, obviously. I do believe it is mainly related to the capabilities and the capacity versus the actual demand in the U.S. market. Obviously, U.S. is, I mean, on the verge of recession or maybe you know going through a recession. There has been a slowdown in the demand. Sir, we are looking for a price increase in August. What would be that quantum like in the range of how much percentage would we look to, you know, increase prices? It's difficult to mention because it is product-specific and based on molecules where pricing has gone higher, then we are basically trying to pass it down to the clients. The molecules where price increase has not happened, then we would not be increasing. Wherever price increase has happened very negligibly, we pass on negligibly to the customer. There is no fixed rule that, you know, throughout the product or basket we are going to increase it at X%. We don't do that. Sir, lastly on the raw material. The raw material prices have come down, but we must be having some high-cost raw material, previously. I mean, how many months, you know, or when can we expect this benefit of raw? Yeah. That's a good question actually, because you know with such a struggling supply chain, we cannot sustain our commitment with less inventory. We normally keep minimum four months of inventory, three months on hand, four months on hand sometimes, and one month in transit. We are sitting on a good four months plus inventory at our end. That's where even if the pricing improves, you will not see that results for another six months plus. You know? Sure, sir. Thank you. That's all from my side. I'll get back in queue. Thank you. Thank you. Thank you, sir. Ladies and gentlemen, if you have a question, please press star and one on your telephone keypad. I repeat, if you have a question, please press star and one on your telephone keypad. We are having a question from Pretit Choudhary from Green Portfolio. Please go ahead. Good evening, sir. My first question is related to the fall in revenue numbers quarter-over-quarter in Australia and New Zealand. Are there any reasons for this happening, or what is the reason behind it? I just wanted to know. No. Hi, this is Jitendra here. Sorry, we couldn't get you properly. Which market you were talking about? Australia and New Zealand. I'm looking at fall in the revenues in QOQ figures. Yeah, okay. The last quarter, you know, the Q4, you know. Yeah. There was a bit of incremental demand on pain management in Australia on account of the COVID, you know, flare up. There was a good lift up, resulting into, you know, higher sales in Q4 in pain management segment specifically. That is the reason. I think from Q1 onwards now it is stabilizing, and I think the Q1 numbers will give you a bit of idea in terms of the trend of, you know, what we are likely to achieve in this year, so far as Australia and New Zealand market is concerned. Okay. Thank you. My next question is related to the acquisition. In the last con call you had mentioned that you would be acquiring for formulation manufacturing operations, and also, for the land in Madhya Pradesh, you are planning a Greenfield expansion. Are there any updates for the same, what the company plans are? Yeah. For the manufacturing facility, obviously we are in dialogue with companies, and we are hoping that in the next couple of months we would be in a position to put pen to paper. With regards to the Greenfield project, the land that we have taken, obviously it's all revolving around the facility. If we can close this transaction, we will explore whether we move forward with the Greenfield project at this stage or at a later stage. Okay. Apart from that, in the investor presentation you have mentioned couple of acquisitions or the growth plans you have. If you can provide any timeline, what plans you are currently working on, when we can see the possible results for the same? Acquisitions and M&As are very unpredictable. Unless we are nearing something where it you know we believe there could be a possibility of signing something, it is too early to mention that. Obviously, like I've always said in the beginning of the year, that we are optimistic that this year our focus is going to be to expand our geographies and our footprints and the market. We are working on that. Presently there's nothing much to say about it because we don't have anything concrete beyond what we have already spoken about. Okay. Thank you. That's it from my side. Thank you, sir. Ladies and gentlemen, if you have a question, please press star and one on your telephone keypad. I repeat, if you have a question, please press star and one on your telephone keypad. We are having a follow-up question from Manoj Mathew Jacob, an individual investor. Please go ahead. Hello. Mark, I've got one more question to you. Yes. We did INR 433 crore and INR 60 crore net profit, and we have INR 19 crore cash. The rest hasn't gone into investment into capacity expansion. Did you say how much cash? Because our cash. INR 19 crores. No, our cash is INR 300 [audio distortion]. No, no. I'm talking of this quarter's cash accrued to the company. The June quarter cash with the company is INR 19 crores. Yeah. Hi, this is Jitendra here. Yes. Basically that cash, you know, we started the year with a cash of around INR 349 crores. Yeah. In the quarter, we did one acquisition of Access Healthcare. Yeah. Where we have invested around INR 30 crore. Yeah. After utilizing that cash and the cash approval, you know, with the quarter and whatever working capital adjustments we had in the quarter. Yeah. The cash balance for the quarter was INR 339 crore, you know. Basically it got utilized in the working capital movements and partly towards the acquisition of Access Healthcare also. Okay. When do you think you'll crystallize the warrants potential issue? Like INR 375 crores, when it comes in, they don't intend to put it in your balance sheet. Definitely, you're in talks with some for some acquisition or for some CRAMS, something like that. You're not looking into CRAMS? No, no, we are not looking into CRAMS. Of course, the money will come into the balance sheet. You know, it will definitely increase our cash balance. Mm-hmm. Eventually we will plan, we are planning to utilize it for the growth-related revenues. Eventually it will get invested. Don't you not think there are lots of formulation companies now in India up for sale? API, of course, it's difficult, but formulation companies, there are many I think now up for sale. We are looking at, you know, various possibilities and, we are working on that. Okay. Okay, thank you. Thank you. Thank you. Thank you, sir. Next question comes from Madhav Marda from Fidelity International. Please go ahead. Yeah. Good evening, sir, and congratulations for the good numbers. See, I have a query. Right now, I think the platform is well set for us, having very good cash balance. What is our actual future growth plans, sir, for increasing the turnover from INR 2,000 crores and above? Yeah. Basically, obviously, our growth plan is within the same markets. It, you know, I do believe next year we should be trending towards the next milestone of INR 2,000 crores. We have to do a lot of investments to go beyond to take us to another level. For that there may be some M&As, capacity increase and product pipelines which will drive the growth further. Is that directly the same kind of pipeline or something like any complex kind of working are we actually working on, sir? Obviously, as a company evolves, the pipeline evolves and it gets more complex. We are working on different formulation segments, complex molecules. We are venturing into, you know, creams and ointments. We are getting into different segments like I mentioned. The formulations will get more complex as we evolve. Are we looking at something like injectables or something like or beyond the same ointment kind of thing we are working, is it a complex generics? No. Injectables presently we don't, at least for the next 12 months, we don't have it in our near horizons. We've got a plate full with the product pipelines and our wish list of products that we want to invest our resources on. Obviously, we are trying to invest wisely and, you know, as to ensure that we basically get best returns out of our investments. Yeah. Another question, sir. Actually, when I'm going through the raw material cost of goods consumed, the cost of goods have gone up between Q4 to Q1. What could be the reasons? I think about 500 basis points, it has gone up. What could be the reason between Q4 to Q1? Hi, this is Jitendra. You see there are various reasons here. The product mix of course plays a important role. The pricing pressure on input, the input cost pressure again continues, you know, on raw material pricing also even during this quarter. Largely it is the product mix, you know, where which can, you know, have the different gross margin outcome at the quarter end. Okay. Can we expect it will be improved in this, the running quarter means the Q2 and onwards? Can we expect that the Q4 raw material costs, I mean, the commodity is going to be? We are expecting it to remain at these levels at least for next two to three quarters. At Q1 level or Q4 kind of levels, sir? At Q1 levels. Q1 levels. Okay. Yes. Okay. Yeah. Thank you, sir. Thank you for confirming. Thank you. Thank you, sir. Ladies and gentlemen, if you have a question, please press star and one on your telephone keypad. I repeat, if you have a question, please press star and one on your telephone keypad. We are having a question from Sachin Kasera from Swan Investments. Please go ahead. Please go ahead. Yeah, good evening. And congrats for a good set of numbers. I had a few questions. One, you mentioned in the presentation that you intend to increase the R&D from 2% to 4%-5%. One, if you could give a sense, this will happen over what period of time? Secondly, the increase that we will see, will it basically mean that we are looking to move the curve and start filing more complex drugs? Or it will be more driven by that we'll now have far larger number of filings? Yeah. Hi. So basically, in terms of R&D, I think our spend is going to gradually increase. It's not gonna happen in the next six months, but we are planning to invest more into more complex molecules, with cost going up. Our spend in R&D, we do foresee in the next two years will eventually migrate from 2%- 4%. The molecules will be in the complex category. Like I said, as the company evolves, the molecules get more complex at every stage. We are not actually going with a philosophy of number of filings, obviously, because every ANDA cost a big sum of you know amount to do filings. Nowadays ANDAs are not free, so they do charge a huge amount for filings. You got to be very selective in your development and your filing with the vision that you know the product can see light after two years. Sure, sure. Second question is on gross margin. From what I can see in the presentation, compared to the March quarter, there's a sequential improvement in the gross margin. You mentioned that, because of the consolidation and the type of demand supply which is there remains pricing pressure. You also mentioned that, you know, we are trying to take some price hikes. It's a little confusing. I mean, when we are taking price hikes and, you know, low demand and there's pricing pressure? At the same point of time, we are seeing sequentially improving gross margins and you're also talking of price increase. It's a little confusing. If you could tell us how this interplay of those two things will play out as we go ahead? Hi. This is Jitendra here. See, this is a continuous process. On one side we are seeing input cost pressure, wherein the raw material, excipient, packaging material prices are increasing. On other side, definitely we are trying to pass it on to our, you know, consumers. These are parallel activities, you know, which we are trying to work on. You know, that's where, as I said earlier, the gross margin improvement basically in the quarter was due to, like, you know, the product mix, the price, you know, the price increase, which we are seeking from our customers. That's another activity which, you know, we are continuously trying to have with our customers. Yeah, I understand. You know, again, coming to the question, it's a little confusing. On one hand we are seeing we are able to get some price increase on products, and secondly we are seeing there's a lot of pricing pressure. Yes. It's a little confusing for us, what is the reality. No, see, these are the continuous activities which you're like, you know, we are having. They are independent of each other. I mean to say the price increase, the raw material price increase are happening, which everyone knows, you know, what is happening in the chemical and the API sector. The oil price increase has a lot of pressure on the packaging material costs also. The aluminum prices are increasing, you know, which is the main ingredient for our packaging material. The price increase is one part, which is happening, like, you know, and that is what we are trying to pass it on to our consumers. That's where the. Though there is a pricing pressure, but then there are few products where definitely we are able to pass it on to our consumers. It's a mixed bag, wherein some products are seeing pricing pressure, some products we are able to pass it on to the consumers. It all depends on the product, customer, you know, OTC, like, you know, definitely some products, we are able to pass the price increase to the customers. Rx, we are finding it difficult to pass it on. Rx, we are seeing a lot of pricing pressure. OTC, relatively pricing pressure is on lower side. It's a combination. It's a dynamic situation out there in the business, you know, in today's market situation overall. Sure. The next question is just a follow-up to this. Your presentation mentions that, you know, the share of OTC is increasing continuously. If you could tell us a little bit, you know, one, is it that in OTC, the pricing pressure and the gross margins are a little better, and how do we see this ratio coming up? Secondly, within OTC you have mentioned about store brands and own labels. Again, is there any margin difference between the two and how do we see this evolving, the OTC share between own brands and private labels? No. The store brand and the private labels are the same. In terms of pricing competition is there in every segment, every category of products. However, out here, the OTC obviously is more service-oriented, so they do give you some advantage out there. There is obviously a level of stability and predictability in OTC. We are very strong in the OTC because historically we have always given equal importance to OTC. It has. Our competitive edge is our product portfolio and our manufacturing capabilities, where we leverage low cost manufacturing base, which has helped us to gain more market share on that. The volatility in Rx is obviously a different issue, where pricing pressures, because it's on your own label, pricing pressures are more prominent in prescription products than in OTC. With that said and done, OTC business model revolves on contracts, but during the negotiation of contracts, there's always a pricing pressure out there. Net-net, would you say that you get little better margins in OTC versus Rx or they are the same? I think they are pretty much at same, so I would not say. Rx, the advantage of Rx is, you do get short-term gains also. You know, you can, because Rx volatility is very high, so when it hits bottom, it hits bottom, but when it goes up, you can see some advantage out there. You do see the ups and downs in Rx. OTC is more flatlined where that is concerned. Sure. The last question is on the CapEx. There's a mention of INR 200 crores CapEx. This is mainly for capability building. We are foreseeing that we may run out of capacity, hence we are looking to increase the capacity, and that's the main reason for the investment. It is both. Obviously, we have to have a forward-looking statement as to what we anticipate for next year and the year after that, and CapEx takes time. You know, it takes six months to get machines and to put it in place, everything and that stuff. Definitely you got to invest today to see returns tomorrow. That said and done, the investment includes you know, both new infrastructure to basically meet complex molecules. At the same time, expanding current infrastructure to cater to our existing products. It may involve a bit of M&A in terms of the manufacturing facility that we are pursuing. It may involve that to ensure that we get to another level. Thank you. Thank you, sir. Ladies and gentlemen, if you have a question, please press star and one on your telephone keypad. I repeat, if you have a question, please press star and one on your telephone keypad. We will wait for a moment while the question queue assembles. We are having a follow-up question, comes from Yogesh Tiwari from Arihant Capital. Please go ahead. Thank you, sir, for the follow-up question. Sir, can you share how many products are you looking to launch in the U.S. for this year and next year, and also for U.K.? Basically, in the U.S., we are looking at nearly four products this year and next year, another four products, four to five products. Obviously, in the U.K., we have filed nearly about 10 products where we do see at least three products seeing the light, the previous year's filing, three to four products will see the light this year. We have a wish list of in the next 24 months to file nearly about 25 products in the U.K. market and very close to 12-14 products in the U.S. market. Basically, we'll be launching about four products in the U.S. this year and four in the next year. Yes. If I got it correct? Yes. In the UK, about three to four this year. Next year, any target? Sorry. Yeah. It'll probably be about six odd products next year. Six, seven products next year. Okay. six to seven products. Sir, lastly, what if we can get in the rough range, what would be the margin differential between OTC and prescription products? What will be the [crosstalk]. It's difficult to mention that because like I mentioned in my earlier reply, Rx is highly volatile. So while there are good days, you know, you may see bad days also. Sometimes molecules are just not affordable because of the volatility and demand and supply situation. OTC is, like I mentioned, flatlined. It is basically much more stable. If you look at the opportunity, Rx sometimes shows you good opportunities while OTC is more predictable and you know what to get. It's difficult to actually put a number and to say, you know, the difference between the two, because if the Rx is active, we make sure we don't go below a threshold point, which is pretty much what we enjoy in the OTC. We ensure we launch product. We keep our Rx active, to that threshold point, so we don't have a big difference between the Rx and OTC. Normally it will, going forward, you know, in two to three years, it will remain in the same range. It will remain in the same range, or if the Rx comes down below that range, then we decide, you know, we will just stop for some time and we get back into the market at a different time at a different stage. We try to ensure that we don't, we ensure we service accounts where we at least make our desired bottom line. Sir, last question on the U.S. versus U.K. market. Is the proportion of Rx and OTC similar in both, the markets, the U.S. and U.K.? Well, historically, it was similar, very similar. This year, obviously, because of price erosion, high price erosion in the Rx part of it, that's why I mentioned on the volatility. The OTC has taken a bit of the front lead, in terms of market share, but we are hoping that the Rx eventually will come back, and take, you know, and gain some grounds. I do see, in the U.S., OTC, being the front leader compared to the Rx part of it. Historically, we were 49%-51%. Now I do believe Rx, OTC may go to 60% and, so OTC being 60%-65% and, Rx being, you know, 35%-40%. Thank you, sir. That's all from my side. Thank you. Thank you, sir. Next question comes from Aman Kanungo, an individual investor. Please go ahead. Yeah. Thanks for the opportunity, sir. Sir, looking at the current result, can we expect similar momentum for this current quarter going forward? Yeah, I think that's our hope. You know, obviously, we are in control of only what we do. I mean, we don't have control on the global scenarios that happen. We are hopeful that we will continue these numbers in the coming quarters also. Okay, sir. Can you guide when is the next, like, U.S. or, like, auditing of our facilities across all three facilities? I mean, I don't predict those timelines. It's left up to them. Okay. Generally it is every five years or is it just any random, like? No, it's random and it's not five years. It's normally two years or three years. It's two years basically, but it's very random. Yeah, they can come in six months also. Okay. It just depends. Okay. It depends on filing, based on filings and based on what they [crosstalk]. Okay, sir. In the year 2016-2017, like, we had some issues with the U.S. FDA. Okay. Today, going today, like, seeing today, how better are we placed? I must correct you, we didn't have any issues with the FDA. We had in 2015 with MHRA, but not FDA. Okay. How better are we placed today in terms of, you know, in terms of related to our inspection of our facilities and everything and the measures and everything? Oh, well, we have evolved. We have progressed a lot. Okay, sir. Thanks. That's it from my side. Thank you, sir. Ladies and gentlemen, if you have a question, please press star and one on your telephone keypad. I repeat, if you have a question, please press star and one on your telephone keypad. We are having a follow-up question comes from Sachin Kasera from Swan Investments. Please go ahead. Yeah. Hi. You mentioned that you are looking at some core launches in either this year or next year. You also mentioned the presentation that you have around four softgels. Can you tell us whether these eight launches in the next two years are to include all the four softgel launches? Secondly, if you can give us some more granular details about these four softgels, what the type of addressable market and what type of revenue potential it can have for us? Yeah. I mean, see, softgel is a part of our business model, but in terms of, they're all niche molecules. I mean, you know, we basically focus on more niche molecules. We don't look at any molecule being blockbuster out there. The approvals that we are expecting are more solid oral as well as softgel over the next two years. I would give more importance even to our solid oral dosage molecules where you know, because they are more complex in nature. I do believe we are getting into more extended release products, so that gives us that again showcases or highlights our capabilities of getting into more complex molecules. Those are niche molecules and they will pay equal importance as softgels. Sure. Secondly, on the U.K. market, you know, last four, five quarters, our revenue rate was around INR 150 crores, INR 155 crores. This quarter we went to INR 181 crores. Is there some one time in this or because of the new launches and better maybe market share, this is a new number that we should look at? Well, it is better market share, new launches, basically that is resulting into that growth. Should we assume it more like a sustainable number, this INR 180 crores across the quarter, and maybe it can probably improve little bit from here going forward? Yeah, I think it's fair enough to assume that. Sure. Secondly, on the ROW markets, we have seen some strong growth last few quarters. Can you just comment a bit how is that market doing and what are our registrations there, and what is the type of outlook you are seeing there? Any new geographies we are targeting or what is bringing this type of traction in the ROW markets? Well, we are targeting more product launches. Again, new products, more product launches, newer markets. We are exploring markets to, you know, add value. Obviously, now with this new baby, you know, Access Healthcare in Dubai, we do plan to tap into the Middle East also. But yeah. I mean, it's basically new launches and new markets that are basically fueling that growth. Obviously the base being very small, the growth, the numbers, when it grows, the percentage looks larger because the base value is small. Sure. One thing on this Access Healthcare, you know, what was the contribution this quarter from that? You know, I mean, where do you classify this? Is this part of ROW markets, mainly the sales from Access Healthcare geographically, and what type of benefits or growth we are seeing from that particular company? Well, we just got one month in the quarter, so it is not very large. The revenue was very close to INR 4 crores in terms of what it contributed. Because we acquired this only on the first of June, technically only the June month revenue came into the quarter. Yes, it falls in ROW, rest of the world. As you just mentioned in the previous question, that with it coming into the fold, you see ROW market doing much better now with Access under your brand. Yes, I do believe it'll look much more better. Sure. Just one last question. Any sense on what is the type of capacity utilization would be running across all our plants? That's basically we are running at 75% capacity. However, as we speak, we are investing into more capacity, more machinery expansion. You know, as the machines come into play, our capacity keeps increasing. We are trying to stay one step ahead of the demand. Sure. Just last question on the overall EBITDA margin. If I see in the last 12 quarters, you know, we have seen improvement from 13%-14% to like almost 27-28%, and then again correct to 15%-16%. What do you think of this? A lot of volatility? What do you think with the type of changes you are doing to the business model in terms of, you know, getting into more complex and better markets? What do you think over the next two to three years, not from a short-term perspective, the more sustainable EBITDA margin for our company? Yeah. I mean, this year, we anticipate about 15%. 15%, 16% would be more realistic. Obviously, we are hoping next year will get better if the market scenario and pricing pressures and a lot of risks are there, but we are hopeful that will ease down. With that our EBITDA will go back to what it used to be. It's not gonna be an overnight affair. It's gonna take some time to migrate to that levels. Right now for this calendar year and financial year, we are talking of, you know, between 15%-16%. Over a three years, did you think 19%-20% margin is achievable, or you think that would be a very tough ask for? No, I think it is achievable, and we are very hopeful that we will be out there. Sure. Thank you, and all the best. Thank you. Thank you, sir. That will be the last question for the day. I would now like to hand over the floor to management for the closing comments. I thank all of you all for participating in this con call. Please be safe. My request to everyone at home. Take care. Bye. Thank you, sir. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using this conference call service. You may disconnect your lines now. Thank you, and have a pleasant day.