Ladies and gentlemen, good day, and welcome to the Marksans Pharma Q1 FY24 earnings conference call, hosted by DAM Capital Advisors Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Nitin Agarwal from DAM Capital. Thank you, and over to you, sir. Thank you, Carol. Hi, good evening, everyone, a very warm welcome to Marksans Pharma's Q1 FY2024 post-earnings call, hosted by DAM Capital Advisors Limited. On the call today, representing Marksans Pharma, we have Mr. Mark Saldanha, Founder, Chairman, and Managing Director, Mr. Jitendra Sharma, Chief Financial Officer. I'll hand over the call to the Marksans team to make some opening comments, then we'll open the floor for questions. Please go ahead, sir. Thank you, Nitin. Welcome, everyone, and thank you for joining us in our Q1 FY24 earning conference call. We appreciate your continuous interest and support for the company. We've had a strong start to the FY 2024, and our revenue exceeded INR 5 billion in the first quarter. We saw strong growth across our key regions, attributed to share expansion with existing customers and new product launches. We observed a stable market condition in the quarter, and our gross profit expanded mainly on account of better product mix and reduction in the rates of few raw materials. We are on track with the integration of the newly acquired Teva manufacturing unit in Goa and expect a meaningful revenue contribution from this plant to start from Q4 of FY 2024. We are delighted to inform you that we were the first Indian company to receive a USFDA approval on one of our key OTC molecule, which is equivalent to the Advil Dual Action tablets. We would also like to inform you that we've just been added to the MSCI Global Small, Small Cap Index list. We continue to follow a balance sheet, disciplined, growth approach. Our emphasis remain on capturing major market share in the OTC market across geographies, and with the new acquired Teva manufacturing unit serving as a backbone to fuel our strong, strong top-line growth. Our immediate focus is to create a complete product offering in three of our, our key OTC therapeutic segments, that is pain, cough and cold, and digestive. Our backward integration and cost management initiatives will lead to expanding our EBITDA margins in the coming years. We are optimistic about our growth journey in the coming years with a commitment towards our three pillars, which are providing superior value to our shareholders, exemplary service to our customers, and engaging experience to our employees. With this, I'd like to turn it over to Jitendra, who will update you on the financials, and then we can start our Q&A. Thank you, sir. For Q1 FY 2024, our operating revenue was INR 500 crore, an increase of 15.3% compared to INR 433.8 crore in the same quarter last year. U.S. and North America was at INR 193.3 crore, representing an 11.2% increase on a year-on-year basis. U.K. and EU formulation markets grew by 24.8% year-on-year basis to INR 225.9 crore on account of new launches, incremental market share, and also on account of better realization due to currency. Australia and New Zealand formulation market recorded revenue of INR 58.6 crore, an 11.4% increase year-on-year basis. The rest of the world recorded sales of INR 22.2 crore in Q1 FY24. Gross profit was at INR 257.3 crores, up 17.5% year-on-year basis. Gross margin increased by 95 basis points, from 50.5% to 51.5% in Q1 of FY 2024. EBITDA for the quarter was at INR 102 crores, an increase of 39.9% year-on-year basis, and a decline of 6.9% on quarter-on-quarter basis. EBITDA margin for the quarter was at 20.4%. This quarter, our employee expenses increased due to onboarding of Teva's acquired manufacturing facility employees, and other expenses also increased on account of addition of newly acquired facility costs. Profit after tax was at INR 70.4 crores, compared to INR 60.2 crores in Q1 of FY 2023, a growth of 17%. EPS for the quarter was INR 1.52. In Q1 of FY 2024, the cash from operations is at INR 34.3 crore, and the free cash flow is at minus INR 47.2 crore on account of high CapEx in the quarter. The CapEx incurred during the quarter was INR 81.5 crore. This investment is in line with our plan of scaling and acquiring manufacturing unit from Teva Pharma in Goa. We spent INR 8.46 crore in R&D, which amounts to 1.7% of the sales. We continue to remain debt-free. We had a total of INR 636 crore of cash as of 30 of June of 2023. With this, I would like to open the floor to question and answers. Thank you very much. Thank you very much. Ladies and gentlemen, we will now begin the question answer session. Anyone who wishes to ask a question may press star, then one on the 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. A reminder to all participants present in this conference, if you have a question, please press star, then one on your touchtone telephone. The first question is from the line of Viraj Mahadevia, an individual investor. Please go ahead. Hi, Mark, Jitendra. Congratulations on stable results and on getting recognized by MSCI. You mentioned that you had some incremental expenses coming on account of the Teva facility this quarter. Can you give us a sense of the loading on the P&L in the quarter due to the Teva facilities, and when these facilities are likely to turn breakeven later this year? I'll, I'll answer the latter part of your question, and Jitendra can take you through the other numbers. Obviously, like I mentioned in my previous on calls, there will be some pain before any gain, and we do believe in early 2024, maybe the last quarter of this financial year, you will see the optimization and revenue generation from Teva. Although we have started, the plant, the plant is operational, but the revenue generation right now is, is relatively smaller, and we're just supplying a few items as per our contract to Teva. The actual revenue generation with all the CapEx expansions will probably start by Q4 of this financial year. Jiten, you want to add on to the first part of it? Yeah. Viraj, like, you know, in terms of the exact expenses, which are loaded in P&L, both on account of employee expenses and other expenses, there was an increase of approximately around INR 11 crore in the quarter. Understood. Thank you. Given your cash balance, you've been talking about, you know, potentially making some bolt-on acquisitions, Mark, asset-light bolt-on acquisitions in Europe. Can you give us a sense of any progress made on that front? We are in a dialogue, Viraj, with actually two target companies, but nothing in nothing concrete to highlight. We're far away from any pen coming to paper, per se. I think it's too early to discuss anything relevant because these are M&A, and 90% of the times, the probability factors are they don't go through. We would as on today, while we are exploring possibilities, there's nothing concrete. Understood. I'm assuming these are asset-light businesses, it would not involve manufacturing and plants in Europe. Yes. More registrations and teams on the ground? Yes, that's it. You are, you are correct on that. Perfect. All the very best. Thank you. Thank you very much. Thank you. A reminder to the participants, if you wish to ask a question, please press star, then one on your touchtone telephone. Before we take the next question, I'd like to remind all participants, if you have a question, please press star, then one on your touchtone telephone. The next question is from the line of Dhaval Soneji, an individual investor. Please go ahead. Am I audible? Sir, no, I would please request you to speak a bit louder. Your audio is not clearly audible. Mr. Dhaval Soneji, you may please go ahead with your question. Hello? Sir, I'm sorry, we are unable to hear you. If you can please dial back from a different number, you can please press star and one and rejoin the queue for your question. Thank you. A reminder to all participants present in this conference, if you have a question, please press star, then one on your touchtone telephone. I'd like to remind all participants, if you have a question, please press star, then one at this time. The next question is from the line of Mateen, from an individual investor. Please go ahead. Hello. Yes, sir, you may please go ahead. Thanks for the opportunity. I have just a follow-up question on the Teva facility. Mark, can you just help us understand when this facility is likely to be optimally utilized? Probably, can we expect sometime mid-next year, or? Yeah, basically, like I mentioned, while the facility is operational, obviously, but we are investing a lot into CapEx and expansions of capacity and machinery and everything of that stuff. We do see revenue generation happening towards the first quarter of the calendar year, or you can say last quarter of this financial year, we would see some revenue better optimization happening. From a full-fledged point of view, I would be more comfortable to give, maybe the first quarter of next financial year, we would be fully optimized and running, you know, in full flow with regards to the Teva facility. I'm hoping at least towards the end of this financial year, we would see that growth happening from the coming up from the Teva plant. Great. From this facility, it's going to be all new products, new registrations, or it will be some of the existing products which will be shifted from the current? It is gonna be mix of both. Okay. Initially, obviously, we are doing a lot of site variations so that we can jump-start with products which we are, which we historically have done with confidence and, you know, and do site variations. I would say, maybe 60% will come from new items, and maybe 40% maybe from existing items. Great. Just one more question, if I can squeeze in. We are hearing from a lot of Indian pharma companies, exporting to U.S., that there is an less pricing pressure now in the U.S., maybe lower single digit. As a result, many of these companies are able to perform better. In our commentary, our performance was primarily driven by low freight cost and better product mix. I mean, how does it, i t, it's not so much pricing which has favored us and versus the other Indian pharma. Just to get more color on this. Like I mentioned in my commentary, that, obviously, we are seeing a bit of stability up in the market. There's, that is pretty much in common to what all other companies are talking about. Compared to the historic last year, this year as, we have witnessed a good stability, so price erosion has tapered down because probably we've hit a rock bottom where that is concerned. And, and then again, we are talking of optimizing our cost and reduction of cost and raw material corrections of pricing to improve our profitability per se. There will always be some challenges, molecule-specific, but overall, it's not as bad as previous years. This trend seems to be continuing. Yes. Yeah, okay. Great. All the best for future. Thank you very much. Thank you. Before we take the next question, I'd like to remind participants, if you have a question, please press star then one. The next question is from the line of Mahesh Vyas from UTI AMC. Please go ahead. Congratulations for consistent, quarterly performance. Just one question I have on U.K., U.K. geography. Sir, this is a conference call operator. I'm so sorry to interrupt, but may I please request you to use the handset mode while speaking, as there's disturbance from your audio? Am I audible now? Yes, sir. Thank you. So congratulations, sir, for your consistent performance. Just one question on your U.K., U.K. geography. If you can just break down the growth which has been coming, I mean, this has been a tremendous growth which has come from U.K. If you can break down the growth of U.K. in terms of, like, market share being led by volumes or whether any price hikes taken in, from touched agreements or like? It is basically, again, the, the growth and consistency from UK is basically product mix. It is also market share being taken, gaining new market share from, from, present clients, and also product expansion. We are launching products, three to four products every quarter. That value addition is happening, also, you know, I think, I think, it, it, it is on the right path, and it will continue to show consistent, results. Okay. Also, sir, whether our U.S. margins are lower than the average margins of the company? I didn't get you. Whether the U.S. margins? Our U.S., U.S. geography, the margins are lower than the average margin of the company. It is presently because of operational efficiency, operational, you know, there's a minimum, I think once operational leverage has to kick in, and we are seeing that kicking in, so we will definitely perform better than the previous years, and in the coming years, we perform better than this year. It is, it is as and when you... We've invested a lot in terms of manufacturing, in terms of people, in terms of infrastructure. We've got a good platform now to scale it up. As and when your revenue generation grows, your operational leverage kicks in, and you will see better bottom line, you know, expansion happening over time. Hmm. Sir, also, just if I can ask one more question. How you feel U.S. as a market, I mean, in, in terms of size, and what would be the growth expectation for next two, three years, overall market size in the U.S.? Well, overall market size in U.S. is huge. We expect to double our revenue in the coming year, I mean, in the next couple of years. We are relatively very small in the US market, so that gives us the potential of growth. I do see U.S. being a growth driver in the coming years. Okay, sure. Thanks, thank you. Thanks, sir. Yeah. Thank you. The next question is from the line of Vishal from Systematix Group. Please go ahead. Thanks for the opportunity. Hope I'm audible. No, sir. Your audio is not audible. Just a minute. Is this better now? Yes. Hello? Yeah, it's better. Can you share share a revenue and margin outlook for FY 2024? What sort of revenue growth you are expecting, and what margin should we close the year? I, I can tell you, like, like I've told in the previous calls, I am, we are quite, if you extrapolate what we've done in the first quarter, we will cross INR 2,000 crore in this year, and that was our, our commitment that we have done. In terms of our profitability, I would say if we, if we, we would be in range bound, of 17%-19%, by the end of the year. We are, we are targeting that. Obviously, if we, if we do something better than that, it would be great. Looking at the various, various variability factors, I think, we will be range bound where that is concerned. You said 17%-19% range? Yes. Okay. I know, I know the first quarter is 20%, but I'm just. We have to look for the we are trying to extrapolate for the next for the whole year. Should we kind of, should we expect margins to come down in subsequent quarters? Any reasons for that? I don't foresee margins to come down, but there are a lot of variabilities, unforeseen variabilities. We are, you know, the Teva acquisition, which we are spending a lot of resources on. We are not going to break even in the next two quarters where the Teva operation is concerned, because, obviously, we need to get all these revenues generated. I did mention you'll see probably revenue generation happening in the last quarter. That is a bit of an overhang that we have right now. But like I said, no pain, no gain. But we will definitely perform better than histo—than the previous years. We, that's right, we will cross INR 2,000 crore, and we will probably be range bound, from the overall 19%, 17%-19%. We may overshoot that, but I would like to, you know, keep it at that. Can you say the Teva, expected Teva contribution in revenues in the year FY 2024? It will be very less, because right up till December, right up till December, I think, revenue will not be more than, I mean, in this year, you can say around INR 40 crore, you know, will probably come from Teva, but it will be relatively less compared to the overall picture. I'm hoping in the last quarter, you will see some real improvement happening from, from the plant. You said INR 40 crore would be the contribution- Yes. Around INR 40 crores? Yeah, around INR 40 crores. between, say, between around INR 40, between INR 40 to INR 50 crores, coming from Teva, yes. In the previous, as an answer to the previous question, you said INR 11 crore is the cost addition on account of the Teva plant. Yes. Okay. You would probably be kind of more or less breaking even on Teva this year? I would not say breaking even. I would say definitely from the first quarter of next year, we'll be breaking even. The last quarter will probably be the best quarter for Teva. That's my assumption. We would have to scale up operations to get ready for the new manufacturing setup or the new capacity. There will be some more cost additions before revenue gets generated. We anticipate a bit of a overdrag out there for a couple of months, but that said and done, our overall performance will be better than the previous year. Okay. Just a broader question on the U.S. market. We have been seeing discontinuations on the Rx front, prescription front, are we also kind of witnessing discontinuations on the OTC front, companies exiting out of OTC products? That's the nature of the beast. I think, you know, there are different reasons for the for companies to take different calls. Consolidation is, is a, is, is a normal process in pharma industry. Different companies take calls based on product portfolio, product change, focus change. I would not attribute it to the market specifically, but it's more company specific. Okay. Mm-hmm. Any shortages that you see on the OTC front? No. Abandoned stock, so I mean, enough of stock. Okay. Any guidance on the number of launches in U.S. this year? I would say in this financial year, maybe three, if you're lucky, four. Three to four launches. That includes this late, the one announced recently. Yes. Advil. Yes. Yeah. Okay. That's all from my side. Thank you. Thank you. The next question is from the line of Hrishit Jhaveri from Pi Square Investments. Please go ahead. Yeah, congratulations, sir, on this table. Can you what is the current capacity utilization, excluding Teva? I'm sorry, you're not very... you're cracking up. Harshad, I could not understand anything. Audible now? Hello. Go ahead. Yeah. Can you, tell me what is the current capacity utilization, excluding the Teva? Our, our utilization is around, 70%, right now, excluding Teva. Okay. You slide about the tax in the U.K., you mentioned that it has jumped from 19% to 25%. You expect that to be stable? Jiten, you want to highlight on the taxation of the U.K. increasing from 19% to 25%? Yes, Hrishit, as, like, you know, we have mentioned in our presentation, the tax rates in U.K. have gone up to 25%. We believe that this will remain now. They won't increase it further. Like, you know, so 25% will be a normal run rate from here on, so far as the U.K. taxation is concerned. Okay. sir, is there, as I saw, from last two, three years, June is always in the base quarter, and then upon quarter, we grow, significantly. So can we assume that any seasonality in our business in the H1? I'm sorry, Harshad, I, I can't understand anything coming out there. It's cracking. Harshad Zaveri, I'm so sorry to interrupt. May I please request you to use the handset mode, or if you can join from a different number, your audio is not clearly audible. You may please rejoin the queue for your follow-up. Uh- Thank you. The next question is from the line of Neelam Punjabi from Perpetuity Ventures. Please go ahead. Thanks for the opportunity, and congratulations on a good quarter. My first question is on a potential EBITDA margin over the medium term. Once, you know, the Teva facility ramps up and your operating leverage starts kicking in. Neelam, see, we expect our EBITDA margin to improve once we start full-fledged Teva operations. Currently, they are in the range of, say, last year it was around 18%. This year, for the first quarter, it is around, it is in the range of 20%. Gradually, it will go up to, like, you know, 21%-22%, as we utilize more of Teva capacity. Got it. once Teva is at the optimum utilization, our margin can go up to 21%-22%, that's what you're saying? Yes. Okay. You mentioned that you have higher expenses, of about INR 11 crore during the quarter on account of the Teva facility. Is this the base, or are we expecting any further increase in expenses? As we increase the capacity, definitely the expenses will go up. At present, this is the base. Definitely, as the volume increases, we will definitely incur more expenses. Okay. On the gross margins, we've seen a improvement during the quarter. Is the current gross margin sustainable throughout the year? We expect it to, like, you know, remain at this level, yes. Got it. Lastly, on, backward integration into API. You had mentioned in the last quarter that, our backward integration would start from September. Are we on track for the same? Yes. We are, we are on track to file our DMF by September. Got it. Okay. Thank you. Thank you. Thank you. The next question is from the line of Jawahar Soneji, an individual investor. Please go ahead. Hello. Am I audible now? Yes, you are. Thank you, sir. Good evening, and congratulations for the good results. Before acquiring the Teva plant, we already had one plant in Goa, which is considered one of the largest facility in Asia, right? The size of the plant is about 18,000 sq ft, and the land is about two acres. Now, what I am wanted to know is, since we have acquired the Teva plant, which is much, much bigger, 6 x bigger plot than the Goa plant or earlier plant, right? It is almost 6 x bigger land than the earlier existing one. What are your future plans? Are we going in for the world's largest plant? What are your future plans, and how you are going to utilize the land? How much it is being utilized compared to the earlier one? One, in earlier one, almost one-fourth of the land is utilized for the plant, and the other one is three-fourth is open. In this case, how big is your plant now, and what are your plans on that? That's what I wanted to know. Our present plant is about 8 acres, so 7.5 acres, our old plant. It is not 2 acres, it's about 7.5 acres, and it's about 24,000 square meters, and our built-up is about 18,000 square meters. We have utilized a substantial amount of our land out there. Definitely, we are one of the largest in terms of softgels, and we have huge capacities in tablets and capsules. Coming back to our Teva plant, you're right, our Teva plant, it but it's not 6 x bigger than our present plant. It's about 2.5 x, 2.5 x bigger than our, about 2 x bigger than our, our present plant. I think 48,000 square meter built up, 48,000 square built-up compared to, I think, 38,000 sq m compared to about 21, 24,000 sq m. Obviously, Teva, we do expect the capacity to be, overall capacity to be larger than our present plant, and that will address our requirements for the next three years. I would like to say three to five years, but I, being bullish on our front ends, I would say it will at least address our requirements for the next three years. Yeah, good. Thank you. One more question, sir. About the procurement of the raw material for our plants, are we procuring from, local source, or we are importing the raw materials? If at all we are importing, what are the-- what is the security, I mean, assurance given for the long term? We, we sign all contracts. These are all approved vendors we are dealing with for the last 10 to 15 years, some of them maybe 20 years. Mm-hmm. We sign, we sign, yearly contracts or maybe sometimes bi-yearly contracts. And, technically, security is only on, on the contracts and the purchase orders, and normally, unless there's force majeure, situation, most of them honor their commitments. Mm-hmm. We do keep a huge amount of inventory with us, very close to five to six months of stock of raw materials are kept with us. Mm-hmm. We do buy both locally as well as internationally, import, internationally. Is it the major part is imported or major is, local, I mean, indigenous? I, I think it's a mix. I would say maybe 50/50. Fine. Thank you very much, sir. Thank you. The next question is from the line of Viraj Mahadevia, an individual investor. Please go ahead. Thanks, Mark, my question has been answered already. All right, thank you. Sir, do you have any questions? Nothing more from me. Thank you. Thank you. The next question is from the line of Deepesh Sancheti from MAANYA FINANCE. Please go ahead. Hi, am I audible? Yes, you are. Okay. I just wanted to know, what is the capacity utilization and sales, which have come from the new Goa unit of Teva? Right now, right now, the sales is, is just started. It's very negligible. Based on our current, based on the current capacity, and our contracts, with Teva, basically, I would assume we'd probably do INR 40 odd crore, INR 40 crore-INR 45 odd crore by the end of this year. But that's where we are investing into enhancement of capacity, where that additional revenue, you'll probably see happening in the last quarter, you know, trickling in the last quarter of this financial year. Going ahead in the next financial year, 2025, what can we expect? That will be substantial. Maybe that will be substantial revenue coming from the Teva plant. I believe there are two... have we answered and have we received answers? I'm sorry, you, you broke up right now. I could not hear your question. Okay. Am I audible now? Yeah, you're audible now. I asked about the USFDA status on the Goa facility, where I believe we had two observation. We had received observations. Now, have you answered them? Have we, is that clear? I think the due date of answering is this week, we will be answering. They are just normal, normal process of questions that has to be answered, some SOPs that have to be updated and sent to them. I don't, I don't foresee any issues where that is concerned. we should see the resolution, maybe, in this month or in this quarter itself, right? once we answer, normally they take two months to issue the EIR report. you know, so that's what the formality is. Okay, okay. Fine. Congratulations, and all the very best for you. Thank you. Thank you. Thank you. The next question is from the line of Shlok Dave, from CAO Capital. Please go ahead. Yeah, hi, this is August. Am I audible? Yes, you are audible. Yeah. Hi, good evening, and congratulations again for great execution. Mark, I had just one question on the Teva plant, in terms of the fixed overheads that we'll be incurring and what our plant CapEx were, was. Are you seeing any possibilities of any cost overruns there? Any cost, what? Cost overruns. Whatever you had initially planned, is there a possibility that we may have some overruns over and above those targeted costs? No, no, I think, it's pretty much going as per our target, as per our budget. Great. Obviously, we have seen, Jiten has mentioned, the overheads, that we have taken for the quarter- Yes. last time. Great. I think the next quarter will also be in a similar number. Towards the latter part, when we are planning to go full scale, you will see a bit of cost increase happening, because obviously, more people, manpower will have to be added to produce those requirements. The relatively, relatively faster those returns will come in and operational leverage will kick in soon. Great. One question, this is more an industry question rather than company-specific. Can you give some assessment of what is happening on the API pricing? The way specialty chemical and even basic chemical prices are falling, I'm pretty sure sooner or later they will start affecting quite heavily in the API prices. How are you seeing the situation? If there is a dramatic fall, let's say, 20% across the board fall in API prices, from the current levels, do we gain or do we pass on everything to our end users? Obviously, you know, COVID, COVID was an API boom, you know, more than anything else. Right. Prices were highly inflated. That, that had to come down per se. We are witnessing some heavy drops in the API, and to the extent it's going down to the prehistoric low before COVID. I do see a bit of stability happening there for some time. Then obviously, I don't have a crystal ball to predict the roadmap ahead, but I do see a bit of stability happening at least for the next 12 months there as well. Okay, okay. No chances of any significant destocking in the channel, right? Because generally, what happens is, if the prices crap out, people do tend to destock. So how is the channel inventory looking like? Well, it does happen more in the Rx industry. In the prescription industry, you see a high volatility happening and price tanking overnight. Mm-hmm. In the OTC, relatively, it is much more stable because you are, you are sitting on contracts, and eventually the next contract will be at the lower price. Right. So, uh- Right ... it will correct, eventually, but you don't see that volatility. In, in obviously in the Rx, you see an immediate price correction happening overnight, and that's where companies with higher cost of raw materials get impacted, sometimes. Our volumes will not be challenged just because of the channel destocking? Volumes will not, but price will be challenged. Oh, fine. That's fine, that is fine. That's fine. Okay. Thank you very much, Mark. All the best for the next quarters. Thank you. Thank you. The next question is from the line of Jayesh, an individual investor. Please go ahead. Yes. First of all, congratulations on wonderful results. Thank you. Teva Pharm, actually. Target area. I mean, we'll be, we will be selling those products, I mean, U.S., U.K., or rest of the world? The second one is, what is the progress of the backward integration of API molecules? The, if I, if I get this right, so the, the targeted market is basically pretty much the same markets that we are strong in. You're looking at Europe, you're looking at Australia, and you're looking at U.S. All three markets will be targeted markets for the Teva molecule. For the backward integration, like I said, in September, we'll probably be filing our first DMF. We are expecting to file at least two DMFs by this, by this financial year, and maybe the third one by early next year. Thank you. Thank you. Thank you. The next question is from the line of Dinesh Kulkarni, an individual investor. Please go ahead. Thank you. Thanks for the opportunity, and congratulations on the good quarter. I have just one question. I can see working capital cycling for the quarter is about one to two days. In line with the expectations of revenue growth and the big scaling up of the business, where do you see this working capital cycle? Will it be improved, or are any specific measures being taken for that, or is it going to stay around this? No, it will remain in the same range. It has already come down a bit. With Teva plant operating full-fledged, definitely there will be incremental, you know, requirement of materials, and also the receivable will also increase in line with the increase in sales. Overall, I think it will remain in the, in this, range of around 120 days. Okay. Thank you. Thank you. Thank you. The next question is from the line of Harish Shiyad, an individual investor. Please go ahead. Hello? Yeah, Harish. Hello. Yeah, good evening. Hello? Yeah, Harish. Go ahead, please. Sir, please I request you to use the handset mode while speaking. I'm on handset mode, ma'am. Sure, sir. Thank you. Hello? Sir, you may please proceed with your question. Yeah, first of all, the good numbers, management and the team. I have a question about... correctly, that Teva is a part of the standalone Marksans Pharma, I suppose? Yes. Yeah. Okay. Okay. Next, next question is, as you said, that INR 11 crore you have spent this quarter because of the load. Will there be any, there something in doing, planning the plan? Second quarter, will be any more expenses on this? Harish, Your first part of the question was not audible. Hello, I'm talking about the additional expenses you have incurred in the, this quarter on, because of Teva. Yes. Will it repeat in the second quarter also? Yes, it will be there in the second quarter also. There in the second quarter, too. Okay, okay. More about the integration plan on the marketing, distribution, logistic, and the research and development part of it. Hello? see, we, we, we are not getting your question, but, I, I think you are asking that, whether we will incur additional expenditure on marketing, other infrastructure development. Is that your question? No, no, I'm talking about the integrating the marketing and the distribution expenses and operating leverage out of it. I'm sorry, I'm not able to get your question. Mr. Harish Ziad, I would request you to please dial in from a different number, as your audio is not clearly audible. Okay. You may please dial in, and you may press star and one to rejoin the queue. Thank you. The next question is from the line of Willin, an individual investor. Please go ahead. Thanks again, Mark. I think if now I put together all the levers, whether it's Teva facility and also the backward integration and everything, is my assessment correct that our revenue growth for the next two, three years will be higher than our historical growth rate of 15%-16% for the last 10 years, and also margins will be much better with all these benefits and the initiatives that we have taken? Well, you know, as, as your base grows higher, the percentage may not always be proportionate to, to what the query, you're mentioning. Our, our absolute numbers will be much higher in, compared to historic numbers. You know, that's, that's pretty much, what we can summarize with, because obviously the growth, the contribution that will come from our Teva plant will help us to fuel our growth. I, I think, per se, now that we've crossed, we are expecting to cross, let's put it this way, INR 2,000 crore, you know, I'm, I'm hoping that we can aim for the INR 3,000 crore mark now. No, no, I agree, Mark. I'm not putting you on a number, but, since you know, I think even, in your earlier remark, you said that we expect U.S. revenue to also double and with the Teva facility. Even though base is high, is it fair to assume even about 15%, which you used to do historically, at least we'll do that growth rate? Higher, obviously- Yeah. I know you want to be on the conservative side, but we'll do at least 15%, 16% for next two, three years. Yeah, that, that'll be fair enough to say. Okay. Second question: Any major challenge you see doing, to do this, from any front, whether it's the market or competition or execution, any major challenges you see at this point? Not major challenges, but that's the nature of the beast. There will always be challenges. We have to overcome with it, and we have to move forward. We are quite optimistic in what we do. We do believe our growth pattern will continue, and we are working hard to ensure we hit our objectives. Perfect. Thanks a lot. Thank you. Thank you. A reminder to the participants, if you wish to ask a question, please press star, then 1 on your touchtone telephone. The next question is from the line of Vishal from Systematix Group. Please go ahead. Thanks for the opportunity. There have been a few Rx to OTC switches that have been allowed by the USFDA in the recent past. For Marksans to kind of participate in these opportunities, can you kind of participate in this, immediately, or will there be an exclusivity for this, switches that have happened? Again, depends on which items. The present one which has happened is more into nasal and different delivery systems, which we don't have. Obviously, setting up infrastructure specific for a molecule is always more expensive and difficult for us to do right now. In the past, there's always been Rx to OTC switches, where we, where we have launched products relatively fast. I think because those molecules are more older molecules, they don't have an exclusivity per se. Just simply changing from an Rx to an OTC does not give them an exclusivity. It's more molecule specific. There can be an exclusivity if it's a process related or a molecule related, but not for a switch per se. Okay. So kind of if you, if, if potentially you have the capability, you can participate in those categories immediately, the filing process, basically whatever it takes. Yeah, normally what happens is, this happens relatively fast, so the people who are actually working on it, they get the, they get the first bite because they are aware of when, when it's going to happen. The rest of the market follows once approved. Okay. Just, and another general question, with respect to the overall OTC market, is the, this private label market growing faster than the, the brand market, basically, the own brand market? So obviously, the private label market is, it is growing. The branded, we are not into branded right now, and different markets encourage different outlook. There are markets which basically promote only branded, and there are markets which basically promote generics, and there are, in the generics come the private label, so we are more into the generic market. In some markets, you do find some growth happening in the branded per se. Today, the branded market does have a bigger market share, but for that, obviously, you need to invest a lot. We are not into that space right now. Okay. Okay. Thank you. Thank you. A reminder to the participants, if you wish to ask a question, please press star then one on your touchtone telephone. The next question is from the line of Harish Shiyad, an individual investor. Please go ahead. Hello? Yeah. Hello. Am I audible now? Yes, you are. Okay. My question was regarding the Teva facility. I wanted to understand or wanted your view on the integration of the marketing, distribution, logistics, and the research in the both the, both the sector, both the factories, rather. Yeah. What economy of scale we will get and operating leverage we will get out of it, eventually, not immediately. All the marketing, distribution, everything remains the same, so there's not going to be an additional, w e are going to use Teva as more as a manufacturing platform- Okay. more than anything else. The distribution, marketing, everything else, will be leveraged from our existing platform only. Okay. There's not going to be any additional cost, impact out there. Okay. The operating leverage, like I mentioned, will happen only when your production and your output actually gets generated, for which we are investing huge amount of CapEx into the Teva plant, so that the manufacturing, the number of units that come out of the plant will be much higher. Okay. thereby the operating leverage will kick in. Okay, okay. Since our Teva facility will start by end of this year, any ballpark figure for the next year cap plant, FY 2025? Well, it's, it's part of our growth strategy, so I'd like to. I wouldn't like to use it as a standalone business model. Okay. it, it falls within our growth plans of eventually, because we are using our same marketing infrastructure, I would not like to assume that, well, you know, Teva is a different marketing setup, so they will give different revenues. It will help us to fuel our overall growth plans, and get us close to our next target that, you know, we are, we are aiming for. Okay. Okay, okay. Thank you very much, and all the best for the future. Thank you very much. Thanks. Thank you. A reminder to the participants, if you wish to ask a question, please press star then one on your touch-tone telephone. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to the management for closing comments. Thank you, and over to you all. I'd like to thank all our investors for taking their time on a busy day to participate, looking forward for your continued support. Thank you very much. Have a pleasant evening and a great day to come tomorrow. Take care and be safe. Thank you. Thank you. Thank you, everyone. On behalf of DAM Capital Advisors Limited, we conclude today's conference. Thank you for joining. You may now disconnect your lines.