Ladies and gentlemen, good day and welcome to the Orchid Pharma Limited Q3 FY26 earnings conference call, hosted by Systematix Shares and Stocks (India) 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Manchanda from Systematix Shares and Stocks (India) Limited. Thank you, and over to you, sir. Thank you, Anushka. Good evening, everyone. On behalf of Systematix Institutional Equities, I welcome you to the Q3 FY26 earnings call of Orchid Pharma. We thank the Orchid Pharma management for giving us an opportunity to host the call. Today, we have with us the senior management of the company, represented by Mr. Manish Dhanuka, Managing Director, Mr. Mridul Dhanuka, Whole-Time Director, Mr. Sunil Kumar Gupta, Chief Financial Officer, and Mr. Kapil Dayya, Company Secretary. I'll now hand over the call to the company management. Over to you, sir. Thank you, Vishal. Good evening, ladies and gentlemen. I am Manish Dhanuka, Managing Director of Orchid Pharma Limited, and I welcome you all for our discussion on the results of third quarter financial year 2026. First, a brief about the financial performance. For Q3, our sales stood at INR 207 crores, compared to INR 217 crores in the last financial year, third quarter, reflecting a decline of 5% year-on-year. On a nine-month basis, sales stood at INR 574 crore, versus INR 684 crore last year, which is a decline of 16%. EBITDA for the quarter was at 6% versus 17% last year. For the nine-month period, EBITDA stood at INR 58 crore compared to INR 115 crore last year, with a margin of 10% versus 17% last year. The year-on-year comparison reflects the continued stress in the global antibiotics market. On a sequential basis, volumes have improved compared to the previous quarter. However, pricing across key antibiotic molecules remains depressed, limiting revenue recovery. On a nine-month basis, the oral segment has experienced approximately 12% price erosion and 10% quantity erosion. This is not just product-specific, it reflects broad industry pressure across all geographies. Our oral to sterile mix has remained stable at approximately 2:1, indicating there is no structural change in our portfolio. Geographically, our regulated versus non-regulated mix has historically been one-third regulated and two-thirds non-regulated. However, for this quarter, the split stands at approximately one-fourth regulated markets. This clearly indicates that regulated markets have not revived. The incremental sales that we have achieved in this quarter have largely come from price-sensitive, spot-based business. While this has helped improve volume sequentially, it has exerted further pressure on the gross margins. In addition, we have consciously reduced our inventory during the quarter. While inventory normalization had happened largely in the last quarter, some impact on inventory devaluation has impacted gross margins. We believe this correction would have largely been completed in this quarter. This has been a difficult profitability environment for us. The pressure is clearly pricing driven, not the operation, not the consequence of operational deficiencies. In response to this environment, we have critically reviewed our cost structure. Non-employee costs on a nine-month basis are down approximately 10% compared to the last year. We have trimmed discretionary spends and postponed certain expenditures without compromising on compliance or core operations. While we are optimizing the cost and expenses in all areas, we are not compromising with R&D investments, which have increased to approximately 1.5% of sales, compared to less than 1% last year. These investments are targeted towards differentiated products, development of FDF for regulated markets, and long-term competitiveness. The development of these products will yield benefits when our FDA plant at Chennai becomes operational. Now, a brief about Exblifep. While the base antibiotic environment remains weak, progress on differentiated products is building momentum. A binding term sheet has been signed in one of the key geographies. In addition, we have executed a non-binding term sheet in a major regulated market. We are in advanced discussions with three to four large markets and expect to announce when these get to a definitive stage. We believe, in about four months after acquisition of asset, this is a significantly good progress. In Europe, sales have commenced in Spain and Italy. Compared to the last quarter, volumes have increased significantly. On a small base, growth has been more than 200%, which was expected as these markets opened up. Financial year 2026 effectively becomes the first meaningful commercial year for Exblifep. With Spain and Italy ramping up, we expect a gradual uptick in volumes over the remainder of the year. In the GCC region, we have completed launches in United Arab Emirates and Kuwait. This marks the beginning of commercial presence, of this molecule beyond Europe and India. We expect launch announcements and agreement announcements to become more frequent going forward. Now, a brief about AMS division. The AMS platform continues to mature. The EBITDA drag has reduced significantly in the current quarter, while the sales continue to increase steadily. This reflects improving operating leverage and better cost calibration as the platform scales up. A brief update on the 7-ACA project. The 7-ACA project continues to progress as per the revised execution plan. All fermenters have been erected, a major milestone. Major equipment deliveries are underway, and execution intensity has increased to recover time lost in the earlier phases. We continue to target mechanical completion by September. We are actively working to recoup last year's delays and regain scheduled momentum wherever feasible. On the technical front, at the pilot scale, we have fully absorbed the fermentation technology and are achieving the targeted yield benchmarks. By the time we transition to commercial scale, we expect our fermentation performance to be further strengthened. This project remains strategically critical, not just for Orchid, but also for our country. It will materially enhance backward integration and long-term cost competitiveness once this becomes operational. Our overall outlook remains positive. The core antibiotic market remains under pricing pressure for the last three quarters. However, our past experience shows some cyclic nature in this business. This time, the down, down cycle has been a bit longer. We are seeing some green shoots of recovery in January. However, it remains to be seen if this is sustainable or transient. Our differentiated products ramp up, new geography launches, licensing agreements, and cost discipline are expected to gradually improve revenue mix and medium-term visibility. Financial year 2026 continues to be a transition year. While the base market is weak, Orchid today is strategically stronger and building assets that will change the earnings profile over the medium term. In closing, I would like to thank our employees, partners, and investors for their continued support. We are navigating a difficult industry cycle with realism and discipline, while steadily building long-term value. Thank you. I now welcome your questions. 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 their 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 questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, a reminder to all, in order to ask a question, you may press star and one on their touch-tone telephone. We take the first question from the line of Loveleen Bagga from Systematix Institutional Equities. Please proceed. Thanks for the opportunity. Am I audible? Yes, you are. So for the quarter ended this and nine months ending FY 2026, can you please share the revenue split between exports and domestic? Also, within exports, how is it split between regulated and another markets? Give us a moment, we'll just share it. Domestic business is about 20%, and 80% is export. On the regulated versus non-regulated markets, our split, which we have told, is 1/3 to two-thirds. And my next question is, if you could share the split between sterile and non-sterile API for the three months and nine months ending December 2025? Yeah. We've already shared for nine months, the number was one-third to two-thirds, which is our long-term average. No change there. I don't have the data for three months specifically right now. Okay. For sterile and non-sterile, it's also 1/3 and 2/3? That's right. Okay. Thank you. Thank you. We take the next question from the line of Viraj Parekh from Carnelian Asset Management. Please proceed. Good evening. Am I audible? Yeah, Viraj, go ahead. Yeah, so a few questions. I think Manish just explained, you know, in his opening remarks on the core business. I just missed it. I think he said that in oral, there was a 12% price erosion, followed by that he said something with 10%. Could you please repeat that? 10% quantity erosion, 12% price erosion. This is on a nine-month basis. Got it, sir. And what would be the case for sterile? Sterile, I think, on a nine-month basis, so, the quantity variation is about 10% and value basis is flat. Right. Sir, we had a few two molecules where we were, you know, confident of filing them in the U.S. market, Teflaro and Avibactam. Yeah. Can you give me an update on both those products and their filings? Yeah, we are in the, you know, discussion of, you know, you can say advanced stages of signing of, a partner agreement for both. I'm sure, before our next quarter call, we may be able to announce some of the agreements. So, the filing should happen this year for both the products, or maybe early next year. So like last time we explained, Ceftazidime, Avibactam, we had, we had filed, there were some observations from FDA, and we are seeking those clarifications, how we can refile that submission. We're still awaiting a feedback from them. Whereas for Teflaro, we have signed a term sheet with a partner, and we would be taking up the validation batches of API and APs. Right, sir. So if you can, sir, just elaborate, I mean, I think both these products were supposed to be filed a bit earlier. For whatever reason, they've been delayed. If you can just, you know, I think potential for Teflaro was supposed to be close to approximately, you know, INR 80-100 crore, and Avibactam has approximately a INR 200 crore opportunity, like, you know, as and when they scale up over two to three years period of time. Just wanted to understand the timeline as of now, in terms of the current environment, what opportunity size we can see for both these products? Yeah, with that, so we've not shared in terms of rupee value. I've always shared only the U.S. market size for both the products. So Teflaro continues to be about $125 million-$150 million dollar product. Mm-hmm. The good thing is for Ceftazidime, Avibactam, the U.S. market has significantly increased, from about almost $200 million, it has become more than $350 million. So that's a good thing. We are still within the launch window. I think we missed the 180, you know, the exclusivity on day one, we have missed that last year, but we should be ready to launch on 180 days today, and, for that, we are within track. Hopefully, that partner agreement would also be, you know, we'll conclude shortly and, if our existing batches would work or not, that's a discussion we are having with U.S. FDA or do we need to re-make fresh batches? That's a question we have to answer yet. Got it, sir. Thank you. I'll just move on to the second part of my question, which is related to Exblifep. You said that, you know, Spain and Italy are showing promising sales. Based just on your understanding, I know it's very, it's initial months, what kind of FY 2027 onwards, based on your own internal estimates, what kind of royalty income based on the trajectory of sales, are we expecting from Europe? And secondly, in India, if you could estimate, I think last quarter you did share that we've been ahead of our internal estimates in terms of Exblifep sales in India. So if you can, you know, assign some kind of a, you know, goal or timeline where we can achieve certain kind of sales in India as well for Exblifep. So both these numbers would be helpful. Yeah, sure. So on India sales, overall we have caught up with our estimate by now. One of the key laggards is we had estimated that the partner would penetrate some of the institutional business, which is governed by the government, like defense, government, hospitals and things like that. The movement there has not happened. So, the early advantage where we were running ahead of our projection, we have kind of, you know, narrowing towards that. We will know more in a couple of quarters, but, otherwise, for rest of the regular business, it seems on track. So that's on India business. For Europe, we will not be able to share a country-wide forecast because our agreements prohibited, you know, the, all the licensees in their countries have their own commercial interests. Maybe in the next quarter, once we come up with a new guidance on future, we will be able to share some better color on how we see this. Got it, sir. The last question is kind of a repeating question. If you can just help us understand the debt and the cash on hand as on the quarter end. And I'm assuming for our 7-ACA project, we will be utilizing the debt to the fullest in the interest subvention scheme. So if you can just give me an idea of when would that, the debt would be fully utilized and what that number would be in the coming few quarters, assuming we are targeting, you know, mechanical completion by September? Yeah, that would be helpful, sir. And just other thing, Manish just highlighted in your earnings call at the starting remarks that, you know, more or less of the inventory has been absorbed, the gross margin levels. So going ahead, what... If you can just, I mean, you always maintain 40% ± 1%-2% range for gross margin. Going ahead, if you can just give a similar kind of range as well, would be helpful. Yeah. So the gross margin this quarter was around 31%, and that is largely contributing for the lower EBITDA and profitability. That is also reflected in the fact that our regulated contribution from 1/3 has become 1/4, which is a reflection of higher margins in the regulated market. Basically, our large contract of specific thing, there is still, you know, the recovery is not that good. One of our larger markets is actually Russia. So because of this war, probably Russian business is not... has taken the biggest hit. That is one of the, I would say, the largest and most important reasons for this downfall in the regulated market sales. With respect to your question on the debt, we have planned a INR 450 crore debt on the 7-ACA project, and the drawdown till now is INR 170 crore. Sir, what's the cash as on date? Cash, we are not using any working capital limits right now, and we have cash in QIP and other [crosstalk] Around INR 75 crore cash we have in hand, around INR 50 crore from QIP funds and INR 15 crore in FD. Got it. Working capital [crosstalk] are not used at all. Working capital limits are unused. If you could just give me an idea of, you know, the gross margins which are expected, is it going to be in the range of 30%-35% going ahead, given the current market environment? Like I said, you see the non-regulated margins are also much lower than what we traditionally face. So in January, we have seen there is a slight improvement in non-regulated markets. Even the raw material prices have slightly started improving. So what happens generally, in my experience, you know, when the prices go down, the customers generally slow down their buying, they delay their buying. Now that the prices have started improving, I would find, you know, more interest in buying. The customers tend to reduce their inventory, which situation will reverse. So definitely margins in non-regulated would improve. With respect to regulated markets, our margins remain between 40%-65%, I would say. But it generally depends, if in a particular quarter we get more percentage, higher percentage of regulated sales, our overall margins improve. So this quarter particularly, the sales of the regulated business is much lesser. That is yielded in a lower margin. Thank you so much, sir. All the very best. I'll get back in queue. Thank you. Thank you. Before we proceed with the next question, a reminder to the participants. In order to ask a question, you may press star and one on your touchtone telephone. A reminder to the participants, in order to ask a question, you may press star and one now. We take the next question from the line of Rahul from SWN Co. Please proceed. Hello, everyone. Hope I'm audible. So I have a quick question on the cefiderocol. Like, are there any updates on the cefiderocol in India, or like, when can we expect the cefiderocol in India? Yes. So the project is on stream. The project work is going on fine. The API is already manufactured. We would be able to start the production sometime in December. December 20, 2026, right? December 2026, right. Okay [crosstalk] After that [crosstalk] Thank you. There will be maybe five, six months of registration, and we are hopeful we will get a concurrent waiver since it is important for this molecule. I have one quick question on the Exblifep, because, like, any plans to expand the molecule beyond U.S. and EU., like China and LATAM countries, like, worldwide? Yes, yes. We are talking all across the world for licensing. There are discussions going on in- Okay. More than 10 countries right now. For more than 10 countries. Okay, fine. Yes. In the last quarter, you have mentioned that you are in negotiation for a commercialization agreement for the U.S. market, for Exblifep. Is there any update, like, can you put some light on that? There's nothing that, you know, we could disclose at this point of time. Like I said, if any definitive something is signed, then we will announce, like what we announced about the two term sheets with Okay. Do you have any planning to file the Ceftolozane/Tazobactam in U.S. and EU generics? Can you repeat your question? Sorry, sorry, can you repeat? Okay, okay. Do you have any planning to file the Ceftolozane and Tazobactam in the U.S. and E.U. generics? That's under development, yeah. Launch timeline for that product would be 2031 or after that. That's under development right now, and of course, we will be launching in U.S. and EU. Okay. And what about the Ceftazidime and Avibactam regarding U.S. and EU filing? Are there any updates? Yeah, we had already filed in U.S. There were some observations. We are in discussion with them how to correct those observations. Based on their feedback, we will decide whether we have to take the batches again or the same file can be presented once. Yeah. And on the commercial deals also, we are close to signing commercial deals for this product across world, many geographies. So, once this product goes off patent, I think this is going to be a big win for Orchid. In the EU as well, right? Yes. U.S., Europe, other geographies as well. Okay, okay, okay. Okay, thank you very much, and all the best for your future products. Thank you. Thank you. We take the next question from the line of Yash Mehta from AART Ventures. Please proceed. Yeah, thank you for the opportunity. Will you be able to provide the sales data for Allecra? I think it was acquired in October 2025, right? Yes. So, We did not have any sales. Okay. So, are there going to be any sales from Allecra in Q4 FY 2026 then? We have not acquired Allecra, just to clarify. We acquired the assets from Allecra. The licensing works based on royalty, so whatever royalties come will come to Orchid's bottom line. They will not be reflecting in our sales figures. Okay, so, has there been any contribution in the bottom line of Orchid? As like Manish was explaining, that, the numbers are there, but it's very small, because Spain and Italy are large markets which have just started this quarter. There should be meaningful numbers in this. This year would be practically, you can say, the first full year of commercial operations in Europe and also the launch in EU, UAE, and Kuwait has also happened, so we should see some revenue coming in from GCC countries as well. Okay, thank you. Thank you. Before we proceed with the next question, a reminder to the participants, in order to ask a question, you may press star and one on your touch-tone telephone. Just to remind you again, participants, please press star and one now. We take the next question from the line of Rupesh Tatiya from Long Equity Partners. Please proceed. Yeah, hi. Hi, Manish. Hi, Mridul. Thank you for the opportunity. I joined the call a little bit late, so some of the questions might be repetitive. First question is, Dhanuka Laboratories, where are we on the merger, and can you give nine-month revenue and EBITDA numbers? So on the merger, you know, it's like more like. So from January, we got a date of February, from February, we got a date of March now. So we are waiting for the courts to finally decide. It's been a long, almost three-year process. It will happen when the God bless, I would say, around. Okay, and nine-month numbers, just rough numbers? The nine-month sales is around INR 305 crore, as against INR 370 crore last year, so there's a downfall here also. Margin, EBITDA? It remains in 5%-6%. Sorry? Same what has been traditionally been between 5%-8%. It's in the same range. We don't calculate actually, and it's an unlisted entity, right? So these are very, very broad estimates at this point. Okay, okay. And on enmetazobactam, I mean, starting with Europe, has now... Do we have now approval all across Europe, all 37 countries, or there is still some filings to go? In terms of filings, there is only one, which is already there. So the license partner, which is ADVANZ, their plan is largely focused on Western Europe. In Eastern Europe, they will start discussions with, you can say, a B2B basis with other partners. So we are not privy to their internal discussions. The focus right now is on Western Europe, big five country and some Nordic countries. Is there approval in all those EU five plus Nordic countries? So the regulatory approval is universal across the EU countries, but they have to, you know, every country has a healthcare system, so they have to get an entry, get the product entered into the healthcare system so that, you know, doctors get recommendation to prescribe and then the reimbursement from insurance and all that happens. So that is, that has to be worked through every individual country. That is what is taking time to launch country to country. Okay, okay. So there is no approval barrier, it's just you have to work through insurance and the every country's system. Okay. And Eastern Europe, I didn't understand B2B partnerships. I didn't understand that. Yeah. So ADVANZ on its own does not have the strength to launch. It will go through some sub-licensing. Like, for example, Orchid has licensed to Cipla for India market, along with Orchid. So ADVANZ will probably give a sub-license to other people because they don't have their own presence in Eastern Europe. When is that likely to get finalized, and we can see some sales starting? We don't have any visibility on their business plans. Okay, okay. And, I mean, any sort of two, three year projection from ADVANZ based on, you know, market research or they feel confident about anything you can share? Next quarter, we'll be coming out with the future guidance, hopefully with the merged business, how it's going to look overall. Then we'll talk about some of the segments in the future guidance. Okay, okay. And then coming to U.S., I mean, where are we? Any tentative timeline you can say that in six months we'll see some positive outcome or in 12 months we'll see some positive out-licensing outcome? Yeah, yeah. Hopefully, we should be signing U.S. deal within this year. That's the target. Last quarter, I'd reiterated we take about 12 months. U.S. is the biggest market, and the deal is expected to take some time because they will do due diligence of the entire dossier and things like that. So we are in advanced discussions with several companies. Hopefully within this year, this will be closed. There are discussions [crosstalk] Okay. Going on with three, three parties, so, let's, let's hope we can, we can maybe move faster with our negotiations. Okay, okay. That is, that is good to know. And, and then how, how about ROW? How, how are we looking to target ROW markets? Yeah. So that is a big change in our strategy. That was... In my opinion, that was one of the flaws in the Allecra strategy. We are talking across Latin America, Southeast Asia, North Africa, Russia. So we, I, we are very hopeful, maybe every quarter, at least one or two announcements should have. Okay, every quarter, one or two announcement in some countries? Yeah. We are talking at least five, six regions other than the U.S. Hopefully, we should materialize, they should materialize one by one. Okay. Okay, that's good to know. And 7-ACA, September is mechanical completion? Can you give the timeline, when can we see water trials? When can we see first commercialization? September is mechanical completion, and then first commercial should take a quarter or two from that. Water trials in one quarter and commercial production in the next. Okay, okay. And we're on track in terms of everything, funding, pilot quantity, pilot runs, all that. We're We're on track? Yeah. Yeah, Manish, he explained in this call on the pilot, we have fully absorbed the technology, and we are on target of what we expected. Okay. So, we hope- Okay. Cefiderocol, did I hear that we are already producing API? Yeah, yeah, we produce the APIs. We have put it on stability, but the finished formulation is only that we are going to sell, so that will only happen in December when the plant is ready. So, if I remember right, formulation, we are looking at 1,000,000 vials, right? So we have API capacity to support that entire 1,000,000 vials. That's right, that's right. Okay. And formulation, we still expect like a December first for sort of product, and then six months, registrations after that? That's right. Okay, okay. And base business, next year, you feel confident we will get to, let's say, 10% type of margins, FY 2027? Yeah, I don't have any reason to believe that this down cycle will continue for so long. But, I mean, given the current, you know, geopolitical situation, honestly speaking, you don't know. I mean, one of our large markets, like I said, Russia, for cefiderocol, there are three large brands in Russia, and all three of them use our product. But, with all the sanctions and all, we don't know what to say. Iran is such a big market, Bangladesh is a big market. Egypt is a big market. So these are factors beyond anybody's control, so I don't know. How large is Russia or CIS? Russia is a big market. It's the largest European country by population. Okay, okay. I see. I see. And final. Sorry, I believe even Piyush Goyal does not know whether he will be able to sign the treaty with you tomorrow or it will fall out. So what can I say about, you know, international business? Yeah, yeah. Okay. And then the final question is, can you give some update on the hospital segment? Where are we, and how do you... What do we hope to achieve in FY 2027 in that segment? Yeah. So, the sales have stabilized, and, we are seeing month-on-month growth in the sales. As of now, the biggest challenge is getting the right manpower. I mean, our sanction strength is much higher. We are not able to do enough hiring, otherwise, we would have achieved more than our targets. Besides, our Orbicef, we have also launched another product, which is the first generic. It's the Teflaro generic we have launched in India. So, that is another good... I think that will be a good contributor to our revenues of AMS division. Because other than Pfizer [crosstalk] So this is. We are the only generic available. We launched this in the month of November. I see. I see. So FY 2027, INR 50-60 crores from hospital segment, is, is that like a fair number to pencil? No, it doesn't grow that fast. I mean, I'll be happy if we do INR 20 crores. But this is a launch platform for cefiderocol. Once we sign the commercial licensing with GARDP and Shionogi. So, we are creating a launchpad for cefiderocol. That will be a significant business of injectables formulations. Okay, okay. Thank you. Thank you for answering my questions, and all the best. Thank you. Before we proceed with the next question, a reminder to the participants, in order to ask a question, you may press star and one on your touchtone telephone. We take the next question from the line of Viraj Parekh from Carnelian Asset Management. Please proceed. I would request Mr. Viraj to unmute and then speak. Hi, am I audible? Hello. Now you are. Yeah. So sorry, sir. So in your opening remarks, sir, I missed it. I think you said you, for Exblifep, you signed a binding term sheet in one of the EM markets and a non-binding term sheet in a regulated market. Is that correct? That's correct. Okay. And, the second question is on cefiderocol. I believe sir stated that in December 2026, we should have commercial operation commissioning for the facility. In your previous phone call, you said that, in H1 FY 2027, I think we'll get a clearer idea of whether a waiver for your Indian market will be granted by the government, or else you'll have to, you know, go through the trial for the product. So any color on that? And how long would If you don't get the waiver, then how long would the commercialization take in India? Yeah. So there was a notification that depending on the need of the country, if the product is internationally approved, the DCGI can give a product waiver, give, give a clinical trial waiver. And we have experienced that we got a clinical trial waiver in our Orblicef also. So we are confident. However, if the clinical trial has to be done, then GARDP is going to do the clinical trial. That is in their domain. But I think together, we've had multiple discussions. We are confident, considering the AMR situation now, that the Prime Minister himself talked about AMR in his Mann Ki Baat. So I think DCGI will be cognizant of this issue and the problem that cefiderocol can address about serious infections. So we should—we are confident we should get a clinical trial waiver. It would be, I would say, too much of an injustice to the patients if their, if their access to cefiderocol is delayed. Got it, sir. Thank you so much. Thank you. We take the next question from the line of Loveleen Bagga from Systematix Institutional Equities. Please proceed. Yeah, thanks for the follow-up. I wanted to ask, what are your views on Penicillin G minimum import price, and how would this impact you imminently? Also, does it also have a readout for 7-ACA? So minimum import. See, our majority business is exports. Minimum import price does not apply for the exported goods. You can still import freely Penicillin G if you are exporting the goods manufactured out of that. So I don't see much impact for us largely. It is for, I believe, it will impact largely the domestic business of manufacturers who make amoxicillin. Okay, thank you. And my second question is, what are we in terms of capacity utilization for sterile and non-sterile? So, in last few years, we had increased the capacities significantly. While I would say till two years back, we were at 80% utilization, now it would have come down to 60%. We can generate turnover of more than INR 1,200 crores without... My next question is, can you share the net sales of Exblifep in Europe? No, that we are bound by confidentiality. Okay, no problem. So do we expect to get upfront payments for the licensing deals that we sign on ML, ML title vaccine? Yes. Yes, you know, the fees are linked to some of the milestone events. It's not just upfront. For example, we have received one major milestone payment on the launch in UAE and Kuwait. So the fees are structured that there would be some upfront, some milestone linked to various items going on. So there would be lots of milestone and upfront. And while the sales quantity for the nine months is reduced, was it also for the current quarter, or did we see the volume growth? Sorry? While quantity for the nine months has reduced, was it also for the current quarter, or did we see the volume growth? So for the current quarter, three months on the oral products, we have recouped some of the sales. In fact, we've grown by about 10% in terms of volume- Okay. -not in value. On sterile, I think we are roughly flat. That's why on overall volume basis, we are only down by 10%, as explained by Mr. Manish earlier. Okay. And my last question is, are we trying to diversify our product mix from our traditional products, considering the steeper pricing pressure? Yes, we are continuously working on launching new products. For example, Mr. Manish talked about Ceftaroline, launching in India through our AMS, so we are already producing the API. Ceftaroline, we are, of course, the first launcher in India. Plus, we are now supplying to other markets, seeding now globally, where the patent has expired. And we are in, you know, advanced discussion for partnership in countries where patent is still valid, and we should be the first few to launch. So the idea is always to focus on newer products, while the older products will continue to remain the backbone, largely because-... oral products are easier to prescribe, but sterile products is Orchid's strength, and our key focus will remain there. Okay, understood. Thank you. All the best. Thank you. Thank you. A reminder to the participants, in order to ask a question, you may press star and one on your touchtone telephone. We take the next question from the line of Ankur Chadda, an individual investor. Please proceed. Hello. Yeah. Yeah. I just wanted to ask you if, in this quarter also, we had some inventory pricing adjustment which led to margin compression, or that was dealt with in last quarter only? There was some impact, I would say, some impact during this quarter, but mostly it would have been taken care of. Last quarter was a significant impact. This quarter, impact would be there. Okay. And, like, are you still seeing a lot of competition from the Chinese suppliers? Yeah, when there's a downturn in international market, the biggest competition you face is from the Chinese only. And, as you know, the Chinese economy has not done too well either, so they tend to dump product internationally when their local demand is down. So yes, I would say there are some headwinds from China as well. Okay. But now, like, you know, the Indian rupee has depreciated by almost 10%-12% in the last six months against the Chinese yuan. So does that help Orchid's case and Indian suppliers case a little bit in the international market? I think that has been very helpful. Yeah. Sorry? Depreciation has... Yeah, it has been helpful because our imports are much lesser than our exports. Mm. Rupee depreciation helps us in terms of getting, you know, more rupees for the same dollar. Okay. And, like, in terms of your raw material, like, most of it is imported from China or, like, other countries? Yeah. A significant portion is imported, yes. Like, in terms of what percentage of your raw material is imported and what is, like, from India? It would be around, I would say, out of total raw material, maybe 30%-40% would be imported. Okay, and a big, big part of that is 7-ACA. Is that correct? That contributes a large part of our imports, probably the largest. Okay. So now, like, because the rupee has depreciated, and if the 7-ACA is coming from China, which is, let's say, now 10%-12% more expensive compared to it was earlier, and the economics of our 7-ACA plant, which is coming up in the next few months, that would have improved by a proportionate amount, right? Like, your margins from that 7-ACA project would go up by, whatever, 8%-10% because of this rupee depreciation. Is that correct? Although honestly, we have not worked out, yeah, it's a very valid argument. It will definitely be beneficial to us. It will definitely be beneficial. So, in terms of supplying this cephalosporin players in India, so there is us. Who else is there? So right now, there are only three players in cephalosporin: ourselves, Aurobindo Pharma, and a company called Covalent Labs. Like, on all of them, they are importing their raw material from China, the 7-ACA. Right. That's right. We'll be the only one producing our own 7-ACA going forward, or are they also putting up their plants? As of now, we don't have any news of anybody else setting up a plant. Okay. So that means that kind of makes us the lowest cost producer of cephalosporin by next year? Yeah, that is our objective. Okay. Okay. Okay, I think, that's it for me. Thank you. Thank you. We take the next question from the line of Neeraj, an individual investor. Please proceed. Yeah, hello. Thank you for the opportunity. Sir, I joined a bit late, so apologies if the questions are repetitive. You may choose to skip it. I can go through it, the replay. Sir, updated thoughts on, you know, what is happening at a macro level in our industry, because it never went through such pain. So are you seeing any signs of recovery? That's question number one. I'm not sure if I agree completely. In my experience, API business has remained cyclic all through these years, and once the prices fall, which can have multiple reasons, right from lower demand to reduction in raw material prices, every time that happens, the people try to reduce their buying, they try to reduce inventories. So it happens almost every two, three years, so I'm not very surprised with this. This time it has been a bit longer, but I don't think it is sustainable. The only risk that we carry is if some alternate class of antibiotics start replacing cephalosporin. Thankfully, that has not happened as of now. So and we have the largest range of cephalosporins. If any antibiotic has to sell, we have that in our portfolio. As long as there are infections, I don't see any long-term threat to our business. As of now, we don't see any signs of recovery, or do you have any expectations maybe about that? No, I said I don't see any threat to our business, any long-term threat. With respect to recovery, I said that, in the month of January, we have seen some, you know, 3%-4% improvement in the prices in domestic market. So there is a possibility that, things might improve in the next quarter. But we have to see whether it is sustainable or not, that is to be seen. Right. Thank you. And next question was around, you know, now that we own the entity wherein, you know, we sold the rights regarding royalty. Any status on that? Are you receiving the royalty, any line of sight over there? Yeah. So we've answered this question. You can go through the transcript. There's been extensive discussion around royalty. Fair enough. Thank you. Maybe just the last question, you know, around our various projects. So, any timelines, any updated timelines on when those projects would be commissioned? Yeah, that, that is also already discussed, actually. But just for- Thank you. you. All the best. You wanted to say something? Thank you. We take the next question from the line of Vishal Manchanda from Systematix Shares and Stocks Limited. Please proceed. Hi, sir. Sir, I have a question on this, follow-up question on the Pen G minimum import price. So I wanted to understand, like, So my understanding is cefixime is made from GCLE, and GCLE is made from Pen G, is my understanding. So like, the company that you procure GCLE from is buying Pen G from China. So would that minimum import price apply in that situation? Or you can, that- Yeah. Because it's not you that is directly importing Pen G, it's your supplier that is importing Pen G from China, and that your supplier is supplying to a domestic company. Yeah. So there's a process called advance authorization. When we export cefixime, we give advance authorization to our GCLE suppliers, and they can use that advance authorization to import Penicillin G without MIP restriction. Understood. We get that license from DGFT, and then we can give sub-license to them for importing duty-free and MIP-free. Got it, sir. All right. Sir, just, can cefixime be made from 7-ACA, or Pen G is the most efficient route to do it? As of now, Pen G is the most efficient route, yeah. But there is a possibility to make from 7-ACA also. Okay. Okay. And, like, are we seeing any down, improvement in the Pen G pricing for us? Because, like, lately, the Pen G pricing has moved down. So has it helped us on margin so far, or because of the inventory at higher prices, it's not helped us on margins as of now? So I would say till December, there was no such improvement. But January, like I said, I've seen improvement in. The Chinese have also started quoting higher price, but this is the normal trend before their New Year holidays, so difficult to predict. We will know once they come back from the New Year holidays. But the cefixime prices have definitely improved in the month of January, February. Okay. Okay. And sir, just one final one on branded formulation. You said, you may be able to do INR 20 crore next year. Is that the right number I heard? I said I would be happy if I do INR 20 crore. Okay. Yeah. So including enmetazobactam, we would still, kind of, it would still not be an INR 20 crore business then next year? Enmetazobactam is divided into two pieces, right? We do 15%-20%, 80% business is done by Cipla. Right. That Cipla business is not part of this. Yeah. Branded. I'm talking about only our own marketing business not, not Cipla's business. Okay. So the profit share and supply revenues is, is something different? Is [crosstalk] Yes. It will be the [crosstalk] That is, that is completely different. Got it, sir [crosstalk] Thank you very much. Our brand marketing is what I was talking about. Understood. This is helpful. Thank you very much. Thank you. As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments. Thank you. Ladies and gentlemen, I would like to thank you for your active participation. We remain committed to build long-term value for our investors, and we are working hard, to achieve that goal. Thank you once again. Thank you. On behalf of Systematix Shares and Stocks Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.