Ladies and gentlemen, good day and welcome to Marksans Pharma Q3 FY 2025 earnings conference call hosted by Elara Securities (India) Private 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 has been recorded. I now hand the conference over to Mr. Bino Pathiparampil from Elara Securities (India) Private Limited. Thank you, and over to you, sir. Hi, good evening and good morning to all of you. This is Dr. Bino Pathiparampil from Elara, welcoming you all to Marksans Pharma quarter three FY 2025 earnings conference call. We have today with us, Mark Saldanha, Founder, Chairman, and Managing Director, and Mr. Jitendra Sharma, Chief Financial Officer of Marksans Pharma. Before I hand over the call to the management, please note that certain statements made by the management in today's call may be forward-looking. These reflect management's best judgment and analysis as of today. The actual results may differ materially from the current expectations based on a number of factors that affect the business. We will begin the call with opening comments from the management, followed by a Q&A session. I hand over the call to Mark. Over to you, sir. Thank you, Bino. Welcome, everyone, and thank you for joining us in our Q3 and nine months FY 2025 earnings conference call. We sincerely appreciate your interest and continued support for the company. I'm pleased to report another strong quarter with an all-time high quarterly PAT. This strong performance was driven by sustained 12 successive quarters of double-digit revenue growth. Our revenue grew by 16.3% year-on-year in Q3 FY 2025, led by continued strong performance in the U.S., followed by U.K., which has improved during the quarter. The U.S. market continued to grow strong, reflecting the strategic focus. It grew by 37% year-on-year, more than double of the overall company growth rate. U.K. and Europe performance improved both year-on-year on a sequential basis. However, Australia and New Zealand were soft due to seasonality impact, while the rest of the world was impacted by continued geopolitical turmoil. We expect the performance to improve in the coming quarters. The improvement in the product mix and the softer import price helped in the gross margin expansion over the previous years. However, investments in the acquired facility and increased freight costs compared to the last year put pressure a bit on the margin. Nevertheless, we delivered a strong EBITDA and an all-time high PAT of INR 105 crore in Q3 FY 2025. The acquired manufacturing facility is ramping up as per plan and will help us boost our growth in the coming quarters. We remain focused on our strategic growth pillars for growing the company in the coming years. Expanding our business with new product launches and ramping our new facility will help us achieve our next milestone of INR 3,000 crore of revenue. With this, I would like to turn this over to Jitendra to update on the financials. Thank you, sir. In Q3 of FY 2025, our operating revenue stood at INR 682 crore, an increase of 16.3% year-on-year compared to INR 586 crore in the same quarter last year. Revenue from U.S. and North America markets stood at INR 353 crore, an increase of 37.1% on a year-on-year basis, driven by the new product launches and increased market share. U.K. and E.U. formulation business grew by 2.6% year-on-year to INR 258 crore. We witnessed mixed demand trends in this market. Australia and New Zealand market recorded revenue of INR 47.2 crore, down by 2.8% year-on-year, affected by seasonality. The rest of the world recorded revenue of INR 24.1 crore in Q3 of FY 2025, affected by geopolitical issues. Gross profit was at INR 384 crore, up 22.4% year-on-year. Gross margin expanded by 279 basis points from 53.5% to 56.2% in Q3 of FY 2025. This was driven by a better product mix and lower raw material prices. We recorded EBITDA of INR 138.8 crore in Q3 of FY 2025, an increase of 4.3% year-on-year. The EBITDA margin for the quarter stood at 20.4%. The reduction in EBITDA margin by 234 basis points was primarily due to the addition of new employees at Teva facility and an increase in freight costs. Profit after tax was at INR 105.1 crore compared to INR 83 crore in Q3 of FY 2024, an increase of 26.6% year-on-year. EPS for the quarter was at INR 2.3. The R&D spend for Q3 came in at INR 11.8 crore, which was 1.7% of the consolidated revenue. Now, talking about the nine-month financial performance, in the nine months of FY 2025, our operating revenue stood at INR 1,914 crore, an increase of 18.4% compared to INR 1,617 crore in the same period last year. The U.S. and North America markets recorded revenue of INR 908 crore, up 34.9% on a year-on-year basis, and contributing 47.4% to the total revenue. U.K. and E.U. markets grew by 6.4% year-on-year to INR 758 crore, contributing 39.5% of the revenue. Australia and New Zealand markets recorded revenue of INR 176 crore, an increase of 13.4% on a year-on-year basis. The rest of the world recorded revenue of INR 74.3 crore. Contribution from these two markets stood at 9.2% and 3.9%, respectively. Gross profit was at INR 1,096 crore, up 29.1% year-on-year. Gross margin increased by 475 basis points to 57.2% in the nine months of FY 2025. EBITDA for the period was at INR 403 crore, an increase of 15.5% year-on-year. EBITDA margin stood at 21% compared to 21.6% in the nine months of FY 2024. The drop in margin is primarily due to the investments in the acquired facility and an increase in freight costs. Profit after tax was at INR 292 crore compared to INR 237 crore in the nine months of FY 2024, a growth of 23%. EPS for the nine months was INR 6.4. In the nine months of FY 2025, the cash from operation came in at INR 131 crore. The CapEx during the period was INR 129 crore, which is in line with our plan to scale up the acquired facility. We spent INR 34.5 crore in R&D in the nine months of FY 2025, which amounted to 1.8% of the consolidated revenue. We continue to remain debt-free, and the cash balance stood at INR 669 crore as of 31st December of 2024. With this, I would like to open the floor for questions and answers. Thank you very much. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone 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, wait for a moment while the question queue is assembled. First question is from the line of Agastya Dave from CAO Capital. Please go ahead. Hello. Am I audible? Yes. Yes, you are. Sir, thank you very much for the opportunity and congratulations on fairly decent set of numbers. Sir, I have two questions. One is the quarterly fluctuation in the gross, in the EBITDA margins. Sir, is there something you would like to call out which happened during this quarter or probably happened last year, same quarter, which is effectively giving an apparent decline of 300 basis points, around 250 basis points in EBITDA margins? Yeah. Hi, this is Jitendra here. So mainly, if we see the expenses which we have incurred during the Q3 in this quarter against the last year, same quarter, there was a rise in employee cost and also in the freight costs. Like I remember, major contributor to this reduction in the EBITDA margin. And I think. So the employee costs, I understand completely, sir. Freight, is this still the problem? Sir, continuing, sir? There is still no resolution on that, sir? No, it has started coming down. So I think that impact you should see in this quarter, in Q4. I think this will no longer be a drag on EBITDA from this quarter onward. And the employee cost also, I think, as revenue grows, it will be again no drag on EBITDA, next one or two quarters. Sir, any headwind or tailwind from the raw material costs? No. The raw material cost is now quite stable. Obviously, it has over time softened. So we don't expect any increase right now on the raw material per se. We do see a bit of stability arising out there. But like Jitendra said, our employee costs because of the new facility. Yes, so that is. Will have a slight drag till operational leverage kicks in. Right. Right. That is completely understandable. Sir, the second question is a hypothetical one. I wanted to understand the setup of the distribution channel in the U.S. and how the pricing mechanism is working out, especially for you guys. The hypothetical part of the question is that there is a lot of talk about the government there imposing universal tariffs on all pharma imports, so I'm assuming that if they actually do it, then we'll also be impacted, but I also think that a lot of it will be passed on to the end user, so how exactly does the pricing pass-through mechanism work in the distribution channel that we have today? What kind of lag can we expect if there is a price pass-through? First of all, can we do a price pass-through? Will the market absorb it? How exactly will it work out? For the portfolio products that we have, are there any local competitors there who can become more competitive with respect to our offerings if there is a completely irrational import duty imposed on our products? So presently, India does not have any tariffs being imposed. It is on China right now. That said and done, we really don't know what will come tomorrow. It's a very valid question. So technically, if it is more if all countries or all major suppliers to the U.S., whether it's raw material or finished product, if tariffs are levied, I think it is fair to say that the price will be passed on. There will be a time lag that may be depending on the inventory being held at old prices. So you are looking at possibly a six-month time lag to pass it on to the retailers or to the clients. But it is not impossible. It will be a higher possibility if it is uniformly if there is no advantage, per se. So there are local manufacturers in the U.S. We have a factory in the U.S., but we import all our ingredients from different parts of the world, including China, and obviously, now that China tariffs have been effective, so technically, anything that comes in from China, the cost will go up by whatever, 10%, if we do continue getting it from China, and if we don't get any price reduction of those materials to compensate that tariff, so what's going to happen is obviously the cost is going to go up, and that cost will have to be passed on to the retailers, but that's where India comes into play, if India does not have any tariffs, then India becomes more advantageous, but we also have our own manufacturing capabilities in India, so we are in a good spot right now where we can leverage both our capabilities to negate any tariff implications. But if tomorrow there are tariffs on all countries, then literally, whether you make it in the U.S., whether you make it in China, whether you make it in India, it's not going to matter. The cost will go up, and that cost will have to be passed down. Mark, the plans that you had with respect to the U.S., that growth is coming in, is expected to come in in the future as well, and is supposed to become a sizable market for us. So all those sales, were you planning to sell everything by making in the U.S., or something was supposed to be exported from India? How were you planning the setup, the manufacturing and supply setup? So all our distribution happens from the U.S., but the manufacturing happens both from the U.S. as well as India. And India contributes a substantial amount of manufacturing support to the U.S. So technically, we do have a balance, and we do manufacture a lot in India while we also manufacture in the U.S. also. So the growth will be. Obviously, we will leverage low-cost manufacturing base, which is India. And that will be always our focus point of manufacturing more in India and shipping out into the U.S. Mark, exactly if I compare. And I'll go back in the queue. Yeah. Okay. I'll go back in the Yeah. Okay. I'll go back in the Yeah. Okay. I'll go back in the queue. Yeah. I have other questions. I'll come back. Thank you very much. Thank you so much. A reminder to all participants to use their star and one to ask questions. The next question is from the line of Adityap al from MSA Capital Partners. Please go ahead. Hi. Am I audible? Yes. Yes, you are. Yeah. Thank you so much for the opportunity and congratulations to the team for a great set of numbers. So if I were to just say that the reason that EBITDA margin has decreased this quarter, and obviously, Jitendra, sir, highlighted during the introduction call, it is, can I say that, because our revenues from the Europe and U.K. market, maybe U.K. market, didn't turn out to be as good as we expected. And a subpart of this would be that now that we have close to 34 products being filed in the U.K., do we see growth acceleration coming from this market? And. See, this is what will increase our EBITDA margin of that type of facility. Yeah. So there are two sets of questions out here. So basically, we are very bullish on the U.K. market, and it's very difficult to analyze it on a quarter-on-quarter basis. Definitely, the season in the U.K., the winter was not all that great in the U.K. It was a warm winter, you could put it this way. So there was a bit of a seasonality part of in the U.K. softening of numbers. But that said and done, we are very bullish on the U.K. We have a growth plan of doubling our revenue within the next five to seven years in the U.K. also. So we do see the U.K. being also a potential growth driver after the U.S. So we have a robust product pipeline which is awaiting approvals, plus what has been filed and plus what has been developed. So we have an exhaustive pipeline out there. The U.K. is a much more mature market compared to the U.S. So we do see that revenue getting unfolded as and when approvals do come into play. With regards to the Teva plant, it has to evolve. We still do believe it will do INR 800-odd crore or INR 800+-odd crore. But it is a process. First is obviously get the plant operational to the level we want. Then the second step is to increase the capacity. And the third step is to get all the variations in place so that the plant that increased capacity can be utilized. We can't skip the process because we can't go and get the business or get the variation before the capacity is there. Otherwise, you'll not be able to deliver the service needed out there. So it is a process that one has to go through. Until then, in the pharma industry, you invest today, you see returns later. So out here, you have to get your team ready. You have to have your headcounts. You have to have highly qualified people. You have to invest. You have to do the training. And so you have a gestation of six months out there before you actually see optimization or operating leverage happening once they come on board. So there will be a time lag. I'm not saying this quarter you will see what we want to see, but definitely from the first quarter, I mean, from the first quarter of next year sorry, from the next quarter, you will probably see a much better. Oh, fair enough. Fair enough. So in terms of Teva, right, Teva, are we on the operational front, operational expenses, that is, employee benefit expenses and other expenses that we've invested in Teva, are we done with that process, or do you see that there'll be a slight bit more ramp-up in our employee benefit expenses, which is today's INR 88-odd crore? Do you see this ramping up furthermore? This is the run rate along with somewhat bonuses and increases. This should be the run rate. 80% of the employment investment is already done in terms of people. I don't see a big variation in people. From a CapEx point of view, there is still a small percentage which is left in CapEx to get us to what we want to achieve. But that once we achieve the next milestone of hitting INR 50-odd crore, then we will talk of doing INR 80-odd crore. So today, we are doing maybe INR 30-odd crore on a month-on-month basis, which is INR 360-odd crore in a year. That's our run rate, and we want to now hit INR 50-odd crore, which will be INR 600-odd crore, and then we talk of INR 80 crore, which will be basically INR 1,000-odd crore, which is INR 2,000-odd crore in a year. If I can just slip in one last question. So just wanted to understand more from a longer-term perspective. So now we have four plants, cumulative capacity would be INR 3, INR 3.5-odd thousand crore of revenue generation. Now, and we plan to achieve INR 3,000-odd crore of revenue milestone by FY 2026. And then that is the capacity. Then there's an entire Europe market that we were planning to tap. So from a longer-term perspective, how do we look at the company? One is from the capacity once we hit 3,000, and the other is from a geographical point of view. Yeah. So basically, from the point of view, obviously, we no longer talk of INR 3,000 crore. We are already working towards the INR 4,000 crore mark, the business model, and the strategy. Our growth drivers will still be the top two countries that we talk about always, that's U.S. and U.K. From a geography point of view, we basically are working on Europe. So we are in dialogue with companies. But that, I think, should be more from a medium to long-term outlook. There is no short-term outlook in Europe per se. So immediate revenue drivers will be the two markets that we are already strong in and getting stronger. But from a medium to long-term, you will see Europe contributing, and you will see the markets that we are already into growing, doubling our revenue in the markets that we are already doing well. Understood. Understood. So once we achieve INR 3,000 crore in FY 2026, do we see capacity being constrained? Because as you rightly highlighted, right, that pharma business is a long gestation period business. Even if we start a greenfield or brownfield project, it takes its own sweet time for either the plant to stabilize or to get these regulatory accreditations. So now, because once we achieve INR 3,000 crore, there might be some capacity constraints that we might face in the shorter time period, not from a medium to long-term perspective. So we do see our present capacity taking us beyond INR 3,000-odd crore and probably closer to INR 4,000-odd crore. But the question is, by the time we start crossing INR 3,000 crore and we talk of INR 4,000 crore, our business model will take shape to go to the next level already. So that's where eventually we would need to look at capacity infrastructure gain to support the growth beyond the INR 4,000-odd crore. So it's not that we wait for us to achieve INR 3,500 crore or INR 4,000 crore and then look at our facility. Because obviously, then our target would be INR 5,000 crore, right? So we would have to probably look at a facility maybe mid of next year, you could say, or towards the end of next year to take us beyond INR 4,000-odd crore. Perfect. Perfect. Sounds exciting. Wishing you and the team all the very best, and thank you so much. Thank you very much. Thank you. The next question is from the line of Bino Pathiparampil from Elara Securities. Please go ahead, sir. Hi. Thank you. Good evening again. Mark, of late, we have heard in bits and pieces from large Indian players about a renewed focus in the OTC space. Are you seeing any increased competition from larger Indian players? Sorry, I didn't get you. Bino, did you say retail players or I didn't get you? Could you repeat it again? Yeah. Yeah, sure. Of late, the large Indian pharma companies, some of them have indicated a renewed focus on the OTC segment in the U.S. So are you facing any increased competition from the larger Indian pharma players in the U.S. market? I mean, this is not a market that we've invented, so we can't say it is like it is something very novel or we've invented. It's been there. There are bigger players than even Indian companies out there. There have been Indian companies, so I don't think anything has changed, and I don't think anything will change, at least in the near future, as to how it operates. We obviously have an added advantage. We are one step ahead of the industry, so we have that advantage to our side. But nevertheless, I don't, like I said, it's the nature of the beast, right, so it's not something that concerns us right now. Understood. Second, coming to M&A, you were, I believe, open to looking at some small bolt-on acquisitions in new geographies, especially continental Europe. Anything coming around on that? We are in dialogue with two companies right now, as you speak. We are in a very initial set of dialogues. We are far away from any due diligence or putting pen to paper, but again, it's difficult. Many a time, we've gone down the road. We've even gone to a due diligence stage, and we bend and come to paper for whatever reasons. So it is very difficult. Actually, it's got a bit more difficult to bridge the expectation gaps in M&As. We are still optimistic. We still work towards achieving those objectives, but we are very conservative in our approach so that we ensure that the shareholders get their return on investments. Understood. One last question for Jitendra. Our depreciation amortization expense has come down YoY. Why has it happened despite the Teva facility ramping up? Yeah, Bino, see, when we acquired the Teva facility, we got the valuation done as per the requirement. And then, based on the remaining life of the few assets which we got in the acquisition, there was accelerated depreciation we had to provide in the initial quarters. And subsequently, now it has normalized. So that's why you see a bit of lower depreciation in this quarter. Now, of course, as we are doing more CapEx, eventually it will go up only. So I think it is because of the accelerated depreciation based on the remaining life of the few acquired assets from Teva. The depreciation was high during previous quarters. Understood. Thank you. Thanks. Thank you. The next question is from the line of Deepesh from Maanya Finance. Please go ahead. Hi. Am I audible? So can you speak a little louder? My question was actually reverse of what the first participant had asked. Firstly, who is the major competition in our OTC segment in the U.S.? And if there are no tariffs levied on India, will that give Marksans a greater advantage over its competitors abroad? Well, yes and no. Because most of the players do originate from India. Like Bino mentioned, there are players originating from India. So we are at level field. But India always gives us a low-cost manufacturing base advantage. And we leverage that out when needed. If tariffs do come into India, then I guess it's level fields for everybody. And that's where we have to then look at the cost implications and then work on passing those cost implications down if we don't get any price advantage. So presently, it is not there on the horizon, but we never know. We never know how politically things change very, very rapidly. So we always hope for the best. So sorry, did I answer your questions or because I? Yeah, you can continue. I mean, if you want to add on anything. No, no, I'm fine. I mean, I try to club both your questions and give you some answers. So I'm just trying to figure out if there are no tariffs on Indian products, then definitely India will have that edge to answer your question. Right. I was trying to understand that whether Marksans will get a better edge than other companies. But since you said that most of the competition is from India, but again, just modifying this question, since we have a manufacturing facility in U.S.A. Is it possible for us to ramp up this facility if need be? Because I mean, Trump being Trump, he can get up in the morning and just announce some tariffs. And I mean, he's going to meet Mr. Modi maybe this week or maybe tomorrow. And looking at him, he might just remember, "Okay, I import a lot of drugs from India. So let me put tariffs." So if that kind of thing happens, can we expand our American facility or can we have a significant advantage? I mean, can we use that as an advantage for a company? So basically, you got to understand when tariffs are put in play, and it depends on how they put sweeping tariffs. Let's take, for example, China, right? So they put sweeping tariffs on China. That means anything and everything, even what you send to Korea has a tariff implication. So basically, now our U.S. plant imports material from Europe, from India, a lot from India, a lot from China, some from Europe. So technically, all the cost will go up because the raw materials originate from countries which have tariffs. So the cost will go up if you make it in the U.S. And that said and done, the finished product cost will also be tariffed to that level. So there is no escaping in terms of cost implications. We just hope that we can leverage that advantage being in the low-cost manufacturing base to our advantage. I still believe that. Let me rephrase it. I'm hopeful that India would not be levied tariffs, and that way, we can have a balancing act. Right. Because these are uncertain times. So if we can have opportunities for our company in this, it would be great. Also, just wanted to understand, we are trying to double our low-cost manufacturing in India from INR 8 billion-INR 16 billion. When is that going to happen? That's already happening, right? So we have already the Teva has done, has finished its first objective, achieved its first objective, which we had kept as INR 30-odd crore of revenue. And now the next milestone is INR 50-odd crore and then INR 80-odd crore. So we have achieved the first objective. So we have broken down to three phases. First phase is complete. We are in the second phase. And then we have to look at the third phase. Okay, and if I can squeeze in one question, what is the capacity utilization of all the plants right now? So Teva right now, Teva utilization is very low, maybe 20-odd%. I would be surprised if it's 20-odd%. It's low. So because we have increased capacity. Because we have increased capacity, our utilization is low. But that gives us a potential of growth, right? So we are working towards utilizing that capacity to fuel our growth through our next milestones. What about the rest of the plants? The rest of the plants are at 70-odd%. 70. What is the, I mean, maximum they can go? Please do follow up. Sure, sure. But what is the maximum they can go if they can just answer that? I would like to say 85%. 85%. Thank you so much. Thank you. A reminder to all participants, you may please press star one to ask questions. The next question is from the line of Hiral Nandu from Kalpvruksh Capital. Please go ahead. Thank you and congratulations for a good set of numbers. One question on tariff has already been asked and answered by you in the previous participant question. The second question, broadly, I would like to understand, in the last 10, 12 years of our journey, we had a peak margin of around 25% and back level 18%. So when do we see we reaching towards that goal in the near future or in what time frame we have it for us? Yeah. See, again, difficult to answer this question. So we are at around 21% right now, and it all depends. I think as sales are growing, we are experiencing operating leverage benefit kicking in, and that definitely will help us to improve our margin, so it will depend on the overall market situation and our market share, so giving timeline is difficult. But is there a possibility that was one of the cases with some, I can say, some surprise gain or that margin are still achievable or possible with whatever conditions remaining favorable and all? So can we expect we going back to that margin at some point in time with some positive scenarios and all? In business, definitely it is possible. Again, very difficult to give timeline or we cannot give any specific commitments on these kind of numbers. Sure. Sure. No problem. Thank you. Thank you and all the best. Thank you. Thank you. The next question is from the line of Chirag Shah, an individual investor. Please go ahead. Yeah. Hi, Mark. And hi, rest of the management. First of all, I'd like to thank you for the tremendous value that you have added to the investors over the last three to four years. Most of the guidances and vision which you set for us, you have exceeded them. I have two questions. One, on a longer term, how do you envision this company now by 2030? What are the large goals that you are working towards? And the other one is more short term. You've targeted INR 3,000 crore by March 2027, but you'll be INR 2,600 crore by the end of this year. So are you going to revise the target? Because the short-term target looks very small. Those are the two questions. Thanks. I'll maintain my target. Nothing is small in this industry. We face geopolitical uncertainties on a daily basis. Like you rightly heard, one of the investors said that depends on which side the President wakes up. But we will maintain the target of INR 3,000 crore. But we no longer share; we no longer talk of INR 3,000 crore. Now, internally, our team is already working on the next milestone, which is INR 4,000 crore. So when you talk of 2030, I would like to see beyond that, if you ask me my frank opinion. But it's difficult to give a number right now because that makes it a statement. But we would like to keep our next goal after 3,000 to our next milestone of 4,000 and then go on to INR 5,000 crore. Yeah, and how does new lines of offerings come into your larger-term goals and a little bit light on the API goals that you had set yourselves? The API goal will play. The API integration will be a part of our strategy, like we always said. It is not going to be we are not an API company to believe that is going to make our foundation on or create a foundation on. But it will just help us to basically leverage during uncertain times. Obviously, nobody expects to go through a core phase again, and we hope that we never see those days. But we just want to cross our T's and dot our I's where that is concerned. But in terms of our growth strategy, our growth strategy is pretty much crystal clear. Obviously, U.S., we no longer talk of 200 million. Now we talk of 300-odd million. We are working towards 300 million, and then we will obviously revise our goal before we reach 300 million. So the same way for U.K., we have a business model to double our revenue and make it five years, seven years. So if you try to put all those pieces in from where we are today, obviously, we are looking at a different number if everything unfolds the way we want it to unfold. Okay. Thank you. Thank you very much, and great job. Thank you. Thank you. The next question is from the line of Dhruv Maheshwari from Perpetuity Ventures LLP. Please go ahead. Hi. Thank you for the opportunity. Just a small question. What were the freight costs for the quarter? For the quarter, freight cost will be in the range of approximately INR 40-odd crore. Okay. Thank you. Thanks. Thank you. The next question is from the line of Agastya Dave from CAO Capital. Please go ahead. Thank you very much for allowing me to follow up. Sir, there has also been a lot of volatility in FX. So how are you handling the cross-currency moves which are happening? And have you changed your hedging policy in any way, or are you running everything open? Because as of now, net, net, we should be a net beneficiary of it. But I'm not sure. I just wanted to know your comments, your views also on it. So our major revenues are coming in U.S. dollar and in GBP. So in terms of, we have seen a lot of volatility in forex rates of late. So as a policy, we definitely do some forward-setting of our revenue in foreign currency. But as a percentage for U.S. dollar, we keep it very small because we see rupee will have a depreciating trend. So by and large, our U.S. dollar exposure, we keep it open. And with GBP, definitely, we see more volatility. And that's where we have a bit higher forward sales on GBP. So broadly, we follow this policy. Okay. So, final question: So, excluding the possibility of tariffs and the currency fluctuation, how are the realizations moving? What kind of drop have you seen YoY in this quarter for your product basket? Is it still mid to slightly high single- digits, or has it changed? So we haven't seen any drop as such. No, there is no drop in our realizations. Absolutely nothing. On a like-to-like basis, it would be at zero. No, no. I couldn't understand your question. Can you repeat again? So your product basket, the prices of your products, have they fallen YoY for this quarter? No, no, no. There is no change in our pricing. There is a usual pricing pressure on Rx, which we keep getting on our Rx basket of product. But as such, there is no reduction or drop in prices on account of tariffs. As such, there is no movement. So excluding any tariffs or excluding any forex volatility, have you seen any price increase? No, no, no, no, no. It is business as usual for us, though there is volatility in forex market. But our overseas business pricing, there is no impact on that. Perfect. So thank you very much for giving me the opportunity. All the best, sir. Thank you. Thank you. A reminder to all participants. They may please press star and one to ask questions. The next question is from the line of Rohan from Prad Capital. Please go ahead. Yeah. Thank you for the opportunity. So my first question is that we have an other income of around INR 28 crore this quarter, which seems much higher than normal. So what does it include? So other income has two broad components. One is interest, and the other is the foreign exchange gains. So during the quarter, we definitely had a better foreign exchange gain. And of course, we have a good amount of interest income also. So could you quantify the foreign exchange gain with? Foreign exchange gain during the quarter was in the range of INR 9-INR 10 crore rupees. Understood. And sir, in your presentation, when you have explained the gross profit margin sequentially, you said that margin declined primarily due to product mix. So what is it in the product mix this quarter that caused the decline? Is more U.S. likely margin dilutive? Is there any more color on the product mix? So in the quarter two, we had a bit high gross margin, which was at 59%. And I think at that time itself, we were very clear. We have given a guidance that these margins are not sustainable. So I think those margins are now becoming more of a now at a level which will be more sustainable. Okay, so the Q3 margins of around 56%, we should be in the ballpark of this number going forward? Yes. Okay. Got it, sir. Thank you and all the best. Thank you. Thank you. The next question is from the line of Hardeep Sohi, an individual investor. Please go ahead. Sir, can you hear me, sir? Yes, we can. Yeah. Sir, I have a very basic question. I have heard a lot of these analysts on the business channels mentioning that CDMO is a big opportunity for Indian pharma companies. So now I wanted to know that where does our company fall into? Are we into this? Would we classify ourselves as CDMO players, sir? No. I don't think we are classified as that. Sir, right, right. Thank you. Thank you. A reminder to all participants that they may please press star and one to ask questions. The next question is from the line of Nirali Shah from Ashika Institutional Equities. Please go. Hi. Just one question. New product that we are planning to launch. What kind of therapy are we looking at in that? And if we are not giving any breakup on therapy-wise for quarter-on-quarter basis, so it would be really helpful if I could get that. Which therapy are we targeting? So it is into pain. It is into digestive therapies. So we have a bit of cough and cold and allergy. So it's pretty broad-based. It is not one therapy that we are focusing on, but it is more diversified into the areas that we already are into. So we don't give a breakup therapy-wise. There's so much of data we've already given. But maybe annually, we basically give up the segments that contribute the maximum to us. So the new products are into the top three therapies that we are targeting: the pain, the cough and cold, analgesic. All the new products are targeting top three of these therapies. Yes. Okay. Thanks. Thank you. The next question is from the line of Deepesh from Maanya Finance. Please go ahead. Yeah. Just a quick question. I think we have around INR 630-INR 660 million as a cash balance. What are we going to do to deploy this to get the same ROE which our business is getting? And secondly, I think you mentioned something that you're going to look at a new project or new company once a manufacturing facility wants to increase your targets to INR 4,000 crore. Are we looking anything? And yeah, I'll go for my next question again later. Yeah. So the answer to your question, are we looking at targets? We are always looking at targets, and we are in dialogue and we are exploring. And that's where cash reserves are needed because when we find something interesting, we need to have the capability of closing that possibility. So these will obviously be always capital-intensive assets that we look at. So technically, you need to have a bit deep pockets where that is concerned. So definitely, we are looking at increasing capacity by the end of next financial year. That may be organically or inorganically. Most likely, we would love to do it inorganically. And M&As is another thing that we are also exploring. So all put together, I think that's where the capital reserves, our reserves need to be intact. So, will we be building a war chest by raising fresh capital in terms of a QIP or a preferential issue for the next foreseen expansions or acquisitions? No, I don't think so. I think we have the reserves. We've kept reserves for that, cash reserves for that, and I don't think we need it right now. That will suffice for the next acquisition? We are hoping. We don't do some crazy acquisition. Our history will say that we've never gone into some really big ticket deals. We are not averse to it, but we try to avoid any risk, or we could say we do a risk mitigation to see that there is no devaluation on what we acquire. So we approach M&As a bit different than most of the Indian companies do. Okay. And the promoter holding is around 43%. Do you think that I mean, you're comfortable with that, or you want to increase this promoter holding? I didn't get you. Do I want to? Increase this? I mean, you hold around 43.8%, right? So are you planning to increase this stake in the near future? I'm not giving much thought, honestly, on that. I'll explore it at a different time, but right now, I'm not giving much thought to that. Because there have been some open market transactions from Sandra, but I mean, in that way, I just wanted to know whether the promoter wants to increase his skin in the game or? Like I said, I'm not giving some thought, and Sandra, I mean, she's free to buy from the market if she really wants to buy. It's not a strategic buying. Technically, when we do give it a thought, we will go and acquire someone from the market. Great, great. Thank you so much, Mark. All the very best. Thank you. Thank you. A reminder to all participants, you may press star and one to ask questions. Is there no further questions from the participants? I now hand the conference over to the management for closing comments. Over to you, sir. Thank you all for taking this time and interest in our company, and totally appreciate all the support and the good wishes for the company. Have a great evening and be safe. Take care. Cheers. Thank you. On behalf of Elara Securities (India) Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.