Good day. Welcome to Q3 FY 2023 earnings conference call of Piramal Pharma Limited. As a reminder, all participant lines will be in a 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 the conference is being recorded. I will hand the conference over to Mr. Gagan Borana, General Manager, Investor Relations and Sustainability from Piramal Pharma Limited. Thank you, and over to you, sir. Thank you, Yashaswi. Good evening, everyone. I welcome you all to our post-results earnings conference call to discuss our Q3 and nine months FY 2023 results. Our results material has been uploaded on our website, and you may like to download and refer them during our discussion. On the call today with us, we have Ms. Nandini Piramal, Chairperson, Piramal Pharma Limited, Mr. Peter DeYoung, CEO, Global Pharma, and Mr. Vivek Valsaraj, CFO of the company. Before I proceed with the call, I would like to update everyone that the board of directors of the company has approved the recommendation to allot equity shares for an amount up to INR 10,050 crores, subject to receipt of requisite regulatory approvals, market conditions and other considerations. During this event, we will have to abide by the statutory guidelines as issued by the regulator in regards to our disclosures and external communications. Hence, we would not be able to answer any forward-looking statements, nor disclose any further details on the proposed fundraise during the deal window period. Therefore, I request everyone on this call to restrict your today's discussion to Q3 FY 2023 and nine months FY 2023 performance. Since last evening, post declaring our quarterly results, we have received several investor queries. In alignment with regulatory restrictions, we have drafted our response to these queries. We will share our responses to these queries first and then open up the floor for any other questions that you may have. With that, with this, I would like to hand over the call to Ms. Nandini Piramal to share her thoughts. Good evening, everyone, and thank you for joining our call for Q3 and nine months FY 2023. Starting with the performance of the company in Q3 and nine months FY 2023. During the quarter, we registered a year-on-year revenue growth of 11%, with revenues of INR 1,716 crores. Our year-on-year revenue growth of nine months was also 11% and with revenues of INR 4,918 crores. Our CDMO business grew by 14% and 12% respectively during the quarter and the nine months, backed by a growth at Satpur Te, Grangemouth and North America facilities. Our complex hospital generics grew by 6% during the quarter and nine months for the financial year. Our inhalation anesthesia sales continued its healthy momentum in the US, with volume growth driving market share gains. Our India consumer healthcare businesses registered a growth of 37% for the quarter and 19% for the nine months of the financial year, driven by our power brands. EBITDA margins during the quarter nine months were 10%, impacted by higher operating margins, including raw material costs, energy prices, wage inflation and marketing costs. During the year, owing to the tight funding situation in the market, some of our CDMO customers delayed making payments against receivables due to us. As per policy, we have made provisions for the same. We maintained a high-quality track record of zero OAIs as we successfully cleared 29 regulatory inspections, including the U.S. FDA and 155 customer audits for the nine months. Moving on to business-specific highlights. Starting with our CDMO business. In our CDMO business, we're seeing healthy RFPs, requests for proposal inflows, an increasing number of customer visits and audits. The delay in decision-making at the customer's end continues, given the macroeconomic environment and prioritization of our currently pipelined due to limited capital availability. We are also seeing some softer demand for our existing generic and API investments portfolio while we are working on developing new products. We're seeing good demand in the niche areas of high potent API peptides and antibody drug conjugates as we continue to invest to expand their capacities. Our growth CapEx planned over the next 12 to 18 months were on track. Some of the important CapEx that have gone live in the last few months include a new in vitro lab at our Ahmedabad CDF site, a capacity expansion at our peptide facility at Turbhe, and capacity addition at our Riverview facility in the U.S. We have also had a successful quarter in terms of regulatory inspections with a successful U.S. FDA inspection at our Riverview facility in the U.S. At the Sellersville and Lexington facilities, where the US FDA inspection concluded in the month of January, we received Form 483s with the VAI classification. We continue to maintain our zero OAI status across our sites in the last 12 years. Navigating the current inflationary environment on account of high raw material, energy prices, and wage inflation is an important challenge for us in hand. We're trying to offset that through judicious price increases and working on total cost optimization and operational excellence measures. Moving on to our Complex Hospital Generics business. Our inhaled anesthesia portfolio continued its healthy performance in the U.S. market. In the non-U.S. market, we're seeing good demand from our product and are accordingly increasing our capacities to service these markets. Our intravenous portfolio in the U.S. continues to command a leading market share. In the Injectable Pain Management segment, our performance was impacted by supply constraints at our CMO. We're working towards improving the supply of these products and have seen improved traction in production in the past few months. We continue our focus on building a pipeline of injectable products and have 34 SKUs currently in the pipeline. We also launched two new products during the quarter. Moving on to our India Consumer Healthcare business. Despite the high base of the previous year, we have de-delivered a healthy growth in quarter three and first nine months of FY 2023. High growth in our power brands has been a key contributor to the performance, with 39% growth in the first nine months of FY 2023. While power brands contribute 41% to total consumer healthcare sales in the first nine months. Little's, our top brand, grew 66% YOY, and Lacto Calamine grew 44% over the last year in the nine months, powered by new launches and traction on e-commerce. In line with our stated strategy, we're reinvesting our profits in the consumer business to grow our Power Brands. We spent about 15% of our revenue on media and trade promotion, which are yielding good results and are reflected in the performance. Further, we launched 21 new products and introduced five new SKUs during nine months of FY 2023. New products launched over the last two years contributed about 17% of the consumer business sales. We have good reach in the general trade with access to over 2 lac outlets. We're also strengthening our presence in alternate channels of distribution, including e-commerce, modern trade, and our own website. E-commerce currently contributes about 14% of our total consumer business sales and has been growing well. To summarize, I'd like to say that basis our recent increase into customer engagements and continued flow of RFPs, we believe that demand for CDMO services, especially for our differentiated offerings, remain strong. Our inhalation anesthesia portfolio is also seeing a healthy demand. Further, our Indian consumer healthcare business is delivering high growth, driven by the Power Brands. Our team of over 6,500 multicultural employees, 17 manufacturing facilities worldwide, and a global distribution network in over 100 countries give us a solid platform to build scale. We take pride in our quality track record and focus on our patient, customer and consumer centricity. We believe in the potential of our businesses, in line with our aim to grow, the board has approved a recommendation to allot equity shares for an amount not exceeding INR 1,050 crores, subject to requisite regulatory approval to market conditions and other considerations. Our focus over the next few months will be mainly on capturing demand, driving productivity through operational excellence, and executing critical maintenance and planned growth projects. We also aim to execute our products and batches as per customer demands. Finally, we are also conscious of our responsibility towards our planet, society, and all stakeholders. Hence ESG aspects will always remain a key part of our DNA. With this, I'd like to hand over the call to Vivek, our CFO, who will respond to queries we've received since last evening. After that we will open the floor for any questions that you may have. Thank you. Thank you, Nandini, and good evening to all. Thank you to those who have already shared your questions. We have tried to provide responses for all of those. However, in case, any of your questions have not been responded, please feel free to ask them after I finish. The first question has been, why has the management decided to raise money? We believe in the potential of all our businesses. As Nandini mentioned, this is a recent increase in customer engagements and continued inflows of requested proposals. We believe that the demand for CDMO services, especially for our differentiated offerings, remain strong. Also, in our off-patents generics business, we are witnessing a steady demand for inhalation anesthesia products and growth opportunities in our injectable pipeline. Our consumer healthcare business is also delivering consistent growth backed by our Power Brands. In line with our aim to grow, the board has approved the recommendation to allot equity shares for an amount of INR 1,050 crores, subject to receipt of requisite regulatory approvals, market conditions and other considerations. The next question was, we have mentioned about certain CapEx coming on stream at our peptide facility in Turbhe, high potent API facility at Riverview and our Discovery Services facility at Ahmedabad. Can you please just provide some details on this? With respect to our PDS facility, this is largely addition of a new lab with a new capability for in vitro testing. Our high potent API facility at Riverview, we have done an expansion of a bay with a 3 KL and a 2 KL reactor. This will meaningfully increase the capacity. And incidentally, we yesterday initiated our first batch for our customer. Our peptide facility at Turbhe, we've added new 500 centimeter column, which will meaningfully increase capacity. The next question has been, what were the reasons for slower growth in our CDMO business? Firstly, we believe the underlying demand for CDMO business, especially for our differentiated offering, remains strong. As we have mentioned, we are seeing improved traction in customer engagement and our RFP inflows remain stable. Also, some of the growth CapEx backed by customer demand have also come on stream, as I just mentioned, which will help drive growth going forward. However, during this period, our growth was impacted largely because of continued delay in decision-making by customers due to macroeconomic environment and pipeline prioritization based on the limited availability of capital. We have also seen a softer demand for generic API and the vitamins portfolio. A similar question was, what were the reasons for slower growth in the consumer healthcare consumer hospital generics business in Q3 FY 2023? In our inhalation anesthesia portfolio, the market demand outpaced supplies. We are addressing the current supply constraints through debottlenecking exercises and investing in new capacities. In our injectable pain management portfolio, we had scale-up challenges at our new CMOs as we transitioned post-acquisition. This has now largely been addressed and we are seeing good ramp-up in our production. The next question has been what is the reasons for sharp decline in EBITDA margins in the quarter and year-to-date. The primary reason for lower margin is lower revenues, which led to suboptimal absorption of our fixed overheads. Historically, you will see that as revenues go up, our margins have increased quarter-on-quarter. We've had higher sales promotion expenses in our consumer products business, higher operating expenses in terms of energy cost, wage inflation, and raw material costs. The tight funding situation in the market meant that CMO, CDMO customers delayed making payments against receivables. We have, as per policy, made provisions for the same. What are some of the remediation measures the company is taking to address the muted growth and profitability? Firstly, on the demand front, we are focused on increasing proactive selling capacity of our business development team, increasing the number of proposals, velocity and win rates. Targeting new customers, new markets in both our CDMO and CHG business. Capacity expansion to address the supply constraints in CDMO in some of the sites and in our hospital generics business, both in the injectable pain and inhalation anesthesia portfolios. We are also focusing on improving costs, process optimization through operational excellence. There was a question on what are the top five strategic priorities for the company right now. As some of these have already been mentioned, we are focused on capturing demand, executing as per customer expectation, driving productivity through operational excellence, executing on critical maintenance and strategic growth CapEx, and continued compliance on quality and safety. There have been certain question on cost. One of them has been why has your other expenses as seen in the PNL moved up in the sequential quarter and year-on-year. Firstly, on the sequential quarter, Q3 other expenses include the one-time provision for an accounts receivable pertaining to a biotech customer who had a funding challenge. While the customer is in the process of seeking alternate funding options, we have, as per our policy, made provision for the receivables that were due. This quarter also saw an increased FX impact due to weakening of the India, INR against major currencies and also increase in the spend for sales promotion and marketing activities. This expense is not therefore a representative of the quarter. On a year-to-date basis, on a comparable basis and excluding the impact of forex, the accounts receivable provision, the increase in other expenses is 15%. This was largely driven by higher sales promotion expenses in our consumer products business and marketing spend in our CDMO. Excluding this, the growth in other expenses is 11%. There was also a question on why employee expenses are up both sequential and year-on-year quarter. In the sequential quarter the increase was largely on account of FX because of the weakening of the INR versus key currencies. It also included an impact of higher average headcount recruited at our Riverview facility where expansion has now gone live, as I mentioned, and at our Grangemouth facility where a capacity expansion is going to come stream later during this calendar year. On a year-to-date basis, when we compare on a like for like, excluding the impact of forex, the year-on-year increase in employee cost for the nine-month period is about 15%. This largely includes impact of increments and realization of positions which were recruited midway through the previous year and positions which were recruited for training in advance of commercialization of our capital expenditure projects. There was a question on what is the current net debt in the books. The current net debt is about INR 4,800 crores. We also had a question on the quantum of CapEx spend during the nine-month period. It's about $100 million. With this, we will open the floor for 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 a question. Ladies and gentlemen, we will wait for a moment for any questions to assemble. We have our first question from the line of Prakash Agarwal from Axis Capital. Please go ahead. Hi, thanks. Good evening to all. You know, thanks for the, you know, the Q&A and the explanations. First one was on the raise, et cetera. You said, it's largely for, you know, growth CapEx. Your net is sitting at INR 4,800 crore and that is net debt, not even gross. Is there a no thought with respect to, you know, reducing the debt? As you're aware that the entire fundraise process has now commenced and obviously the focus for us is to look at reducing the net debt as well. Yeah. You know, we had a call in November and I think, there was a statement made that, you know, we are looking second half is usually stronger and margins are, you know, at least maintains. Between November to December, I mean, we see that, you know, you talked about costs being higher. Some of the, you know, costs have come because of higher capacity, but capacity maybe has not been productive as of now. Between November to December, what has really gone wrong in terms of guidance? Because the guidance has largely been for the second half, not specifically for a quarter. Secondly, having said that, as we mentioned that, there has been a continued delay in decision-making in our CDMO business customers, due to which some of the orders did not transpire as expected. We also saw a weakening or softer demand for our API generic and vitamins portfolio. Likewise, in our CHG business as I've earlier alluded to, in our injectable filling portfolio, there was some sluggish receipt of our products from the CMOs where the products were recently transitioned. All of this, of course, is being addressed through various initiatives across the organization. Okay. You mentioned it's for second half, so Q3 is gone. Is there any revision in guidance? Prakash, as you're aware, we are in a deal window period, so it may not be appropriate to make a forward-looking statement now. Okay. Just for clarification, you mentioned that, you know, some of the costs related to capacity addition has been made. I understand you can only charge it in the P&L once the revenue also starts. Has the corresponding revenue started? If so, understand that the revenue portion would be much smaller versus the cost. When does it start reversing? Prakash, this is not with respect to the capital expenditure, this is with respect to the workforce who have been hired, who will be the operators running the plant when it goes live. They are in the process of being trained for the eventual commercialization that will happen in the near future or as recently happened. I understand that, but I'm trying to understand that when do they, you know, start covering the top line start covering the cost and actually we become positive for the same, the new capacity. Now that the commercialization has started, the revenues will start flowing in, once the batches are released and eventually invoicing happens. Production for our Rivaroxaban, as I mentioned, has commenced yesterday. Commenced yesterday. Okay. Any other capacity commencement happened during this quarter? As I alluded, discovery services, in vitro labs has gone live. Our peptide facility has also gone live in quarter three of fiscal 2023. Okay. I have no question. I'll join back. Thank you. Thank you so much. Thank you. Thank you. We have our next question from the line of Vivek Ramakrishnan from DSP Investment Managers. Please go ahead. Good evening. My question was on the net debt, net debt to EBITDA covenant of the bonds that you just recently released. Is there any scope... I mean, I understand that, you know, there's business in transition and there are pressures, but is there any scope to decrease the net debt through working capital or delaying CapEx or trade debts and so on, so that you can meet the net debt to EBITDA covenant of 4.5? That's my only question. Thank you. Yeah. Vivek, we are looking at all measures to ensure that the net debt situation is taken care of and our measures are underway. Okay. Look forward to it. Thank you, Vivek. Thank you. Ladies and gentlemen, in order to ensure that the management is able to answer queries from all participants, kindly restrict your questions to two at a time. We have our next question from the line of Rahul Jain from IIFL Wealth. Please go ahead. Hi. My question is regarding the loss-making plants which are in the U.S. and U.K. I mean, our U.S. plants are seriously making loss like Lexington or maybe in U.K., Morpeth. I mean, at the standalone level we have, I mean, net profit which is, I mean, 0.84. At the consolidated level, the losses are increasing continuously. What is the management's focus to bring these plants profitable? Is there any plan to dispose of these plants or what's the long-term vision? Rahul, firstly, as we've always been saying that it's a game of scale. When every site and especially sites in the overseas where the costs tend to be relatively higher, fixed costs tend to be, as they get scale, they'll start making profits. The current challenge has obviously been a subdued demand in our CDMO facilities, which is why the margins currently have been under pressure. As the demand comes back on track and revenues start improving, the margins will automatically start increasing. As of now, we are not looking at in terms of any disposing of any of the sites right now. The, there's belief in the potential of what every site has to offer, and we are working toward improving the financial section. Also, can I get at the plant level also, are there any India plants losing continuously currently at the plant level? No. Okay. That's it from my side. Thank you. We have our next question from the line of Subrata Sarkar from Mount Intra Finance Private Limited. Please go ahead. Hello. Hello. Yes, sir, we can hear you. Yeah. Madam, this is from a perspective with like longer time period perspective. Whoever has tracked your company or pharma sector, this particularly CDMO space, we are seeing a unprecedented kind of a situation. We understand you, majority of your facility gets out of Europe, must be in a special situation. If you take other players also, they are also seeing some pressure both in terms of like margin and in terms of top line. As per whatever my little understanding, this is a unprecedented situation. In this context, can you throw some high light on from the historical perspective, like generally we all know since this kind of situation, these are upfront investment and then return comes, right? Still giving all those track, like, is this normal or is this once in a decade kind of a situation? I think we believe in the medium-term potential because the underlying demand is there. There is R&D innovation happening, and I think, you know, customers will still outsource. Overall, I think it's, you know. I think the overall potential is there. I do think that, I mean, the next six months will be tough for everybody in the industry. I'm not even talking from a six-month perspective. Like, CDMO is like as, madam, you commented. CDMO is something which we have observed, like if you see the last decade also, there is a steady growth. Like, there can be ups and downs, but this is one of the irreversible trend for the big players, like big pharma players. I'm talking from that perspective, madam. Is this what I, my only sin-central point is like what situation we are facing, is this once in a decade kind of a situation or this kind of situation do arise frequently in CDMO space? Although I don't, I don't think so. From that perspective, madam, I'm talking about. I think, I mean, there is a cycle. It is a cyclical industry to some extent. Yeah. Overall, I think, I mean, as I said, the underlying demand is still strong. I think it'll recover. Okay. The overall trend is up. Okay. Madam, from, again, from a business perspective, madam, if we I'm not asking for very specific figures, but what I mean to say, madam, if there is a, let's say, X percentage of reduction in our margin, what I mean, from the fixed cost component also, what I mean to say, madam, are we facing more of a pricing pressure from the our partner or is it because of a elevated cost structure that that's giving more reduction in the from a margin perspective? I think one of the things is that we have seen over the past few months has been inflation in inputs. If, you know, and solvents as well as energy prices due to the, you know, Russia, Ukraine and other supply chain problems. That's also been part of the pressure and general inflation. Yeah. That's on the cost side, madam. Are we facing any pricing pressure? As a contract, in terms of contract, are we facing some reduction? No, our win rate is the same as before. Okay. Thank you, madam. That's all from my side. Thank you. We have our next question from the line of Venkat from SBI. Please go ahead. Yeah. My question is now through the, we have in the balance sheet around consortium. When we can expect to become a zero, madam? What's the future plan? Sorry, Venkat. Could please repeat? I heard about you asking the quantum of debt on the balance sheet, and then what is the next plan. Yes. We are asking for debt now. What is the future plan here? When we can expect to reduce the debt, and what is the plan? As you're aware, the initiatives have already begun. It has got its own time frame. As soon as the procedures for this entire activity is completed, we will move towards reducing the debt. This will take some time. We have to complete the entire process as per regulatory guidelines. Yeah, yeah. How often is your date? What's the timeline to any future item? It might be Q2 of FY 2024. Oh, FY 2024. One more thing, sir. We have a phase III, you know, we have around 56 molecules to commercialize. What's the plan? When we can expect the commercialization in how many molecules or how many molecules we can expect to commercialize near future? The historical trend of phase three is 60%-70% success rate. That's what it is. As and when it happens, it'll happen. Just Medley's focus is to ensure that we capture more of the phase three pipeline, which will ensure steadiness of commercial revenues for the future. In that, which is next two quarters, is it any possibility of some, maybe how many molecules you need to be comfortable commercialize? We can't give forward guidance as to the specific commercialization timelines of our clients' clinical programs. We do expect that most of our clients typically would contract us for at least one of the major markets. We would expect that for whatever we're describing in our phase III program, these would be meaningful. Thank you. We have our next question from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead. Yeah, thanks for the opportunity. With respect to this, commercialization of facility and Riverview facility, what sort of employee cost increase can be expected and even capital expenses? So, uh- That's my first question. Tushar, that's like a forward-looking statement. We would refrain from making a specific guidance on future. Okay. What's the current capacity utilization excluding these two new facilities? For Surat, we had reached peak capacity utilization, which is why this entire formulation column was put in, and that will meaningfully expand capacity for the site. Likewise, for Riverview as well, we had reached peak capacity utilization, and we expect a meaningful relief of capacity with the new block which has gone live. I meant to ask the overall capacity utilization including all the facilities. That's very difficult to give one number, Tushar, because every facility, every line is different. We have got formulations, APIs, development, commercial. To give one number of capacity utilization is practically not correct. Okay. What kind of asset term can be expected for these, the new facilities as well as the new Riverview facility? Eventually it could go up to two and a half. Okay. Lastly, if you could just break down the CDMO business into generics and generic API requirements and the business for innovators. It's about a third for big pharma, a third for biotechs, and a third for genetics. Yes. Generic pharma. Customers. Customers. Thank you. Thank you so much. Thank you. We have our next question from the line of Chintan Shah from JM Financial. Please go ahead. Anil, hi. Thanks for the opportunity. I have two questions. In your opening remarks, you mentioned that we have initiated various cost saving measures. If you can just highlight what exactly those measures are and what impact you foresee from them. Is this cost saving measures? Yes. That's right. I think we're looking at a lot of operational improvement across the site, as well as procurement and, you know, even energy saving measures, things like that. Okay. On those employees, I just wanted to understand the increases broadly on cost. I think that is fully reflected in the current numbers or we could see more impact from the same. No, it's fairly represented here in terms of, the, overall increase year, Chintan. Okay. Sure. Just one last question from my side. In the presentation, I see you mentioned that you're looking at inorganic opportunities. Looking at the current scenario itself, I just wanted to understand the thought. Are we actively looking or just take a more from a long-term target? I think, you know, as a company, we've always historically looked at acquisitions. Obviously in the last few months, valuations have been very, very expensive. I would say in the next few months, our focus would be more on what I talked about earlier in the strategic priorities, which is capturing demand and executing on our current plans. Okay. What multiples would be comfortable for you to pursue an organic opportunity? I think we'll have to see. Yeah. That's again forward-looking, Chintan. We will not go down. I'm not asking what number would be. I'm just saying as a strategy, what you would be comfortable with to pursue this opportunity. I think it's a mix of things, but right now I think the focus is on executing what we have. Okay. Okay, sure. Thanks. Thanks for answering the question. Thank you. We have our next question from the line of Alok Dalal from Jefferies India Private Limited. Please go ahead. Yeah. As a part of the price increases and cost optimization measures are already being undertaken or those will be undertaken now? It's a mix, and we're doing both. When do you expect that things to flow through? I think it'll. You know, some things have started, and some things will take a while. It's sort of. We'll, we should see it over the next year. Okay. What is the mix of generics and non-generics to revenue for CDMO for the quarter and nine months? Predominantly generics, actually. Non-generics is, relatively a smaller portion. In the past, the mix for CDMO used to be 60/40 in favor of generics. Will it continue to mix this quarter and 9 months? It'll be about the same. Similar line. Okay. Okay. Thank you so much. Thank you. We have our next question from the line of Suresh, an individual investor. Please go ahead. I hope I can, I'm audible. Yes. Yeah. Yeah. In consolidated financial results, I have seen that, in expenses, purchase of stocking trade that was, a 150% increase in year-on-year. Can you please give some color on it? That's the only question I have, sir. Sorry, Suresh, you'll have to please repeat your question. Yeah. In expenses, as in the purchase of stocking trade, that from year-on-year, I have seen a 150%. Last Q3 2021, we have INR 135 crore something, and just premium this quarter we have INR 331 crores. If you are comparing the overall stocking trade, you'll have to actually combine all the three items of COGS, which is cost of materials, freights, and changes in inventory for a meaningful comparison. If you're comparing it versus the December quarter, it may not fully be comparable because we had certain transactions that time as we had mentioned in the earlier investor call with CEL on account of the certain government tenders as well as the CFA network. If you actually compare it with the sequential quarter, you will find that the overall material cost as a percentage of sales is actually nearly the same or in fact slightly lower. Okay. Okay, great. Thank you. Thank you. We have our next question from the line of Yesil Lakdawala from Emkay Investments. Please go ahead. Hi, good evening, everyone. You know, the first question was regarding, you know, the commercial products on the 15th of the sort of supply. I think our revenue is about INR 56 billion last year. Are we the primary source of supply, or are you the second source of supply in those, you know, in 19 products? Could you give us an idea there? It's a mix. I think it's a set of products and some of which we are one of multiple sources and then others where we are the only source. That's all we can probably say at that level. You know, among those 15 odd products that you commercialize, you know, could you give us a better understanding of the stage involved, you know, both modalities like CDMOs or are they more traditional small molecules? We haven't historically given a technology or a therapeutic area cut to this. We have described how that pipeline in the past across the different dimensions has grown. That's been our explanation as to the future, is to look at the past trend. I would just continue to look at that overall trajectory in the past. You know, just continuing on the CDMO side. You know, as you said that the teach chain are usually phase III, tend to go towards commercialization. What are some of the, you know, the key types of lot of customers as are those, you know, 50%, about 17 odd molecules. Are they, you know, have they even shown interest of, you know, pursuing potential commercialization with us or will we just be partners in there with them during the discovery and development phase? Our understanding of the business model is that if someone decides to pursue the clinical work for registration with us, their intention and our intention is to be their commercial partner on successful approval and launch. The cost involved for a customer to qualify a company for development and registration and then not later make an order after that would be a very poor investment decision for them because they would have invested a lot of money to qualify us as their CDMO and then not to use it would be a rare if not almost improbable outcome. The most likely course of a general contract, of which we've had many in the past, is that we do the registration work with them. They get the approval, and then we provide the supplies for that. That's the most frequent for not just us, but the overall industry. Thanks for that. I think, in the last call, there was some directional guidance given that we are as a, as a consolidated entity, we are looking at achieving EBITDA margins of 24%-60% in the next 3-5 years. Considering the fact that I think in the, in the generics space of CDMO are probably margins are a lot lower than, some of the, large scale, you know, peers in India. How do you see a mix of the innovator and pre-led CDMO and generics business changing? Because that will have to have a meaningful change over the next 3-5 years for us to achieve our margin guidance, right? If that's understandable. We're somewhat restricted in the forward-looking comments, but we could try maybe point to is that in many of our communications, we've discussed a lot of effort to try and onboard an innovative portfolio and progress that pipeline along with our clients and then lead that to commercialization. I think that is probably the past actions you can look to to guide for the future direction in terms of the mix. With our CapEx sort of. I have another request to come back in the queue, sir. It's just the last question is just to add to that. You know, I just wanted to get to the direction of our focus will be more towards supporting the innovator-led initiatives versus being in the traditional generic. If you look at the locations where the significant CapEx has been deployed or we've made public commitments for the CapEx, it would be places like Aurora, Riverview, Grangemouth. These are all places that have received or are receiving significant CapEx. These are also locations that are operating near or at capacity before the CapEx went in. These are all facilities that predominantly serve on-patent clients, whether they be development or later commercial. These are all facilities that we would describe as being in the differentiated category. These are all facilities that are generally capacity constrained, and these are facilities that generally serve on-patent client work. Thanks a lot, Peter. Thanks a lot. That's really helpful. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to answer queries from all participants, kindly rest your questions with well time. We have a question from the line of Sumit Kamani from Shubh Enterprise. Please go ahead. Yes, my question is more or less related to the macro level. Is it the wrong time when we de-merge the company? My second question is why Mr. Ajay Piramal and Dr. Swati Piramal are not on the board of Piramal Pharma, who drove the company right from the 98th rank to the fourth rank in the Indian pharmaceutical industry and that management are not with us. Is it the wrong time when this de-merge the company, the market punish the company in a way that it kills all the values that has been created? I'll say that, I think they're very much with us and they're quite as shareholders, they're active shareholders, and who guide the strategy of the company. Unfortunately, we can't control the markets, and, we will leave it at that. When we split, demerge the company entity, I am the investor since it was the Sumitran Pharmaceuticals, Swissme, and later on it's Piramal Enterprise, I mean, Nicholas Piramal, then Piramal Pharma. I don't understand what was the purpose behind demerging the company. I mean, pharmaceutical, which is the immense value over there. After the demerging, it just vanished all the values. Even the performance of the company is diminishing quarter-on-quarter. Well, I hope you will keep faith with us. I think we believe in the potential of the company. Yeah. It is our, from the investor community at large, fraternity, humble request to bring them back on the board. That's it from my side. Thank you. We have our next question from the line of Vinod Jain from WF Advisors. Please go ahead. Good evening. My question again relates to the operating expenses which have increased very significantly over the quarter. The turnover has not increased considerably. It has just increased by 11%. Does it mean that the higher replacement cost of employees due to attrition is one of the components? What is the real reason how the increase is being so significantly higher than the profitability of the company has diminished so significantly, sir? Mr. Jain, as I responded in my question earlier, if you look at the other expenses on a YTD basis, it had a one-time impact of certain receivables that was provided as a company policy. It also has an impact of a very volatile Forex with INR weakening against key currencies. Of course, the numbers are not strictly comparable because post de-merger, some of the prior period items are not aligned with the way currently we're accounting for the same is being done. Having said that, if we were to exclude these and make the numbers on a like for like basis, our overall expenses increased by 15%. Just if we were to exclude the impact of the higher sales promotion and the marketing expenses, our increase in expense was 11% in line with the top line growth. That's how it is. I understand that the statements to read as they are right now is challenging and therefore probably, it can mislead if you see on the face of it. Very well. My next question relates to the pricing of the rights issue. Is there any comment can be made as to what could be the discount or what could be the pricing you are looking at in this different time to go ahead with the rights issue? Not yet, Mr. Vinod. As you can imagine, certain procedures need to be followed appropriately. All of those will be disclosed. Very well. Thank you. Yeah. Thank you so much. Thank you. We have the next question from the line of Ranvir Singh from Nuvama. Please go ahead. Thanks. Thanks for taking my question. Just two things I wanted to understand. you know, basically in historical perspective and now what we see over the last, you know, few quarters. In CDMO side, what exactly, you know, where we are, why we are struggling here in terms of margin? Basically what I wanted to understand that $157 million we are going to invest. The current asset, fixed asset turnover is less than 1%, 0.7 x something. I wanted to understand that whether the utilization even for, you know, newer CapEx also the same asset turnover ratio is likely to happen or why it could not, you know, have been done that in existing facilities where better value products could have been substituted. Is there any disconnect in my understanding that you have to which you cannot change. What is actually happening CDMO side and why we are not able to improve the asset turnover ratio, because I compare with the other, you know, peer players. They all have, you know, much, much bigger, better, you know, turnover ratio there. Just if you could highlight something here. Sure, Mr. Singh. Firstly, the question with respect to the CDMO business and margin. The current reason why the margins, overall margins for Piramal Pharma have been suppressed is basically because of the lower scale of turnover. As we have elaborated in CDMO business, because customers are taking time to make decisions and issue orders and slow down in the generic and the vitamins portfolio is where we are seeing slowdown in terms of order inflow for the business per se. There was also an impact of increase in cost, inflationary impact, as you're aware, increase in the price of raw materials, the utilities, which led to margin compression. As far as site-specific asset turnover ratios are concerned, as you're aware, we are present across 15 sites globally. Each of this site has its own distinct capabilities and offerings for the customer, and they are not necessarily fungible. While there can be a small amount of fungibility that may happen within an API or within a formulation site, predominantly these are dedicated sites serving dedicated needs of customers and having very differentiated capabilities. Therefore, you cannot pile up all the incoming demand into one particular site and optimize the revenues from that site. Every site has got its own level of operating costs and its own level of turnover to be able to enhance margins. I hope that helps answer your question. Yeah. I think the last call we mentioned that there was some inventory buildup also from customer side. That was also the reason. I think it's now that why, quite a few quarters now, because these reasons, you know, we can understand for a, you know, three quarters or four quarters. I can understand the last year, during COVID period, everybody was struggling. I think for two or three quarters there was some inventory built up with the customers. Gradually I expect liquidation and the business started, you know, showing some improvement there. My question is that even if we have a dedicated block and if our block is, you know, giving a turnover ratio much, much lower, it's 0.5 or 0.7, isn't it possible to, you know, have a better value product there or substitute customers, there or it is a long-term contract or we are constrained, here? This actually gets back to the question from one of the earlier callers, where one of our strategies has been and continues to be to add innovative products to our offerings and have clients place their innovative business at our locations. This relates to the point that was made earlier about some of the slowdown in decision making and the subsequent prioritization of those clients with new projects that would use up the capacity that as you described, is not fully used. Our big push has been and is to execute on the innovative business growth so that we can utilize the capacity in the best way possible. Those do take time to develop and also transfer in, and that is a major focus of our customer acquisition strategy. We believe that as that executes, the elements you describe will obviously become more favorable for us. Okay. Okay. Okay, fine. last one. I see the inventory turnover has increased significantly on change versus this is also. Last quarter is what is, 181 days, from there it has increased to 205 days. Last year it was 151 days. That inventory is something, is it, a finished site, product inventory or, this is, raw material site inventory? Inventories is both the semi-finished goods as well as the raw material inventory predominantly. You would have historically seen that our quarter four tends to be higher in terms of revenues, which is why the inventory as on the end of quarter three is normally higher to be able to cater to the demands for quarter four. Okay. Okay. Thanks. All the best. Thank you. We have the next question from the line of Nitin Gandhi from KIFS Trade Capital Private Limited. Please go ahead. Yeah. Thank you for offering the opportunity. I have two questions. The plants which have gone live, what are the CapEx on that? When do you see the optimal capacity utilization happening? I understand you said 2.5 have been share of this asset turnover. The second question is related to the fundraising. When do you think that we should be considering pre-turn of the quarters or it will, it could be little more? See, overall investments across the three CapExes that have gone live is roughly about $42 million. I won't comment on, in terms of when they go live because that's forward-looking statement. As far as the right issue, as we mentioned, based on the timelines that we expect it, and it all depends upon regulatory approvals coming in place, it could be somewhere around quarter two of FY 2024. Sorry to continue. I had asked for the CapEx which has gone live, not the one which is yet to come after 40. The capacity I was referring to the same, the capacities which have gone live, the revenues for those have started, but when they'll reach peak, I cannot give a specific period for that at this point in time because of the deal window. Okay. Any breakeven assumptions, not just peak? I guess the only point is that we only are putting CapEx on the growth side in at locations where they were capacity constrained before with the assumption that there is demand for those. That's why we put the CapEx in. Yeah. That's why we are taking the case of the time when you plan and when the plan changes. Do you think that the breakeven could be deferred by another year or so or whether it will be same like what you initially planned and it will be retained? I think right now we, as you know, some of these are growth CapExes, so we'll expect they're, and they're on track right now. Our expectation. We can't tell you the expectations. No issues. Thank you very much. Thank you. We have the next question from the line of Shashikiran Jain, an individual investor. Please go ahead. Thank you for the opportunity. Can you tell me the past acquisitions that have been done, like Hemmo Pharmaceuticals in Kitchener and three more, how is this going to energize into or complement the existing operations and products that we have? Thank you. CCPL was a JV where we were making a critical input into one of our lead products for the complex hospital generics business. Again, the places one can get input on the market are limited, and by taking control of that JV, we can backwardly integrate and assure supply to allow us to meet the growing demand. That one is, the synergy is about margin enhancement and also revenue assuredly in a place where we're growing volumes. In the case of the Turbhe facility or in the Hemmo Pharmaceuticals, this is an area that is considered more attractive than traditional small molecules. There are limited people who can provide it. It is a high margin business with significant historical growth. I can't make forward-looking comments about growth, but we obviously made assumptions in that area. Also we see synergies with our current customers who we were approaching with other business and they would be interested to say, "Well, can you also offer us peptides?" I think finally, one can fill a peptide in a injectable facility, and we have actually a situation where even at the time of the diligence, we had a customer who was getting the peptide made and filling it at our Lexington facility. So there are integrated project synergies you see there. I think your last question was on the Sellersville acquisition, I believe. In that case, we have a number of customers who increasingly post the pandemic would like to have an onshore offering for drug product, particularly for innovative business. We see a significant demand for that offering. In the absence of that demand, let's say we would be providing them a drug substance work at one of our North American facilities, and we would be handing off to a competitor the drug product work. Now by being able to offer an integrated package, we don't have to introduce a competitor into our client relationship, and we can provide either standalone or integrated services in a geography where there's currently a very high interest for that offering. I think those are the three I think you asked about and the rationales behind each of them. Just a couple of follow-up. In case we are going for any further acquisition, Will you be looking for the input space in complex hospital generics or something to enhance it? I think that will depend on the opportunities. I think we take each opportunity as it comes. I think the near-term focus is on maximizing our current assets. Thank you, ma'am. That's my last question. Thank you. Thank you. We'll take the last question from the line of Avinash Kumar, an individual investor. Please go ahead, sir. Good afternoon. Good afternoon. This is Avinash. Congratulations, for revenue growth. There is two question from my side. One is, what is planned CapEx? I'm searching, but, it is not concrete, given anywhere, the different planned CapEx for a 20 more or forward one. How much? Avinash, we can't make a forward statement, in terms of what will be the spends in the future. The past, for this biggest financial year, our CapEx has been about $100 million. $100 million? Yeah. Yeah. Okay. Second question is, out of this CapEx done already done, how much visibility, revenue visibility is there? Each of our growth CapEx has obviously done in, been done in anticipation of potential demand that we've seen in the areas in which we have invested in. As we have mentioned, we have invested in high growth areas in the differentiated offerings that we have, whether it's in high-potency API, whether it's in peptides, or whether it is at our discovery services facility, which all of which have gone live now. There is a good visibility that each of these facilities have. Expected growth potentially, some... Sorry. That's a forward-looking statement again, Avinash. Please excuse us. Okay. Okay. We won't be able to. Okay. No issue. Thanks. Thank you for listening. Thank you so much, Avinash. Thank you. I now hand the conference over to Mr. Gagan Borana for closing comments. Over to you, sir. Thank you, everyone. In case you have any follow-up questions, please feel free to reach out to me. Thank you once again, and have a good day. Thank you. On behalf of Piramal Pharma Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.