Ladies and gentlemen, good day and welcome to RPG Life Sciences Limited Q4 FY 2024 earnings conference call hosted by Systematix Institutional Equities. As a reminder, all participants' lines will be in listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing *100 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Manchanda from Systematix Institutional Equities. Thank you and over to you, sir. Thank you, Riya, and good afternoon, everyone. This is Vishal Manchanda, and on behalf of Systematix Institutional Equities, I welcome you to the Q4 FY 2024 earnings call of RPG Life Sciences. We thank RPG management for giving us an opportunity to host the call. Today we have with us the senior management of the company represented by Mr. Yugal Sikri, Managing Director. Mr. Vishal Shah, Chief Financial Officer. I'll now hand over the call to the company management for the opening remarks. Over to you, sir. Good afternoon. Thank you, Vishal. My good afternoon to everyone. I hope I'm audible. As always, it's my pleasure to share with you briefly RPGLS performance versus the market, and brief highlights of our performance in Q4, full year FY 2024, and since we strongly believe that hallmark and true test of our strategy is consistency, and since FY 2024 marks the fifth year of our transformation agenda, a quick panoramic view of the five years at a glance. Therefore, first, the market. In the context of market, as per the database IQVIA MAT March, market is currently growing at sub-10%, 7.6%. The AIOCD AWACS indicates the growth is ahead of 6% or less than 7%. But what is important for me to share with you is RPGLS, or RPG Life Sciences, is growing at 18.8%, that is 2.5 times the market growth. In terms of volume, market growth is flat, 0.7% is what IQVIA data indicates for market, whereas RPG Life Sciences' volume growth is solid 13%. I'm also pleased to share with you that RPG Life Sciences, on MAT March 2024 basis, has emerged as the seventh fastest-growing company of pharma industries, top 75 companies. Further important for me to share with you is, in Q4, our in-market growth, as reflected by IQVIA, is 19% versus the industry growth of 5.7%, that is 3.3x the market growth. Now, let me move to the key highlights of Q4. Q4 revenue growth is 7.2%. It appears slightly muted due to a couple of transient factors, which have something to do with a couple of products and a couple of markets. One of our products got impacted because of seasonality. Second one, because of one product discontinuation which happened in the Q4 of the last year due to the government order. The third one is with respect to market, where government has imposed some kind of restrictions on the release of import licenses due to the foreign exchange crunch in the country. And I strongly believe that all of these factors are transient and are resolvable. Therefore, what is important for us to note is that the in-market growth has been robust 19%. We have 5.7% market growth in Q4, which I mentioned earlier. Coming to the other financial metrics I'm happy to share with you, they continue to be as robust as they are on full year basis. The growth for EBITDA, PBT, and PAT has been solid 26%, 29%, and 28%, respectively, on year-on-year basis. Margin improvement also continues with the five-year Q4 uptrend, with a significant increase in the margins in Q4 indices. EPS grew at 30%. With this, I'd like to move on quickly to the picture on full year FY 2024, and I'm sure you had the opportunity to look at the investor presentation, which we uploaded in our website, but if not, just presenting you a few highlights. The sales growth is 14%, EBITDA growth 26%, PBT growth 28%, PAT growth 28%. [Foreign language] the market, as mentioned earlier, the market evolution index is 110, our growth 18.8%, which is 2.5x of the market growth, seventh fastest-growing company, as I mentioned earlier. Please also share with you, markets rank have been up by five positions or five notches, and I'm sure you all know our market cap is up by 118%, significantly ahead of the DSC Healthcare Index growth. On the margin front, the EBITDA margin moved from 21% to 23.3%, PBT 17.9% to 20.2%, PAT 13.2% to 15.1%, all of them reflecting a very healthy growth in the year FY 2024. Cash flow: INR 127 crore after paying record INR 51 crore CapEx, which we incurred on the plant modernization, and significantly higher statutory payments. Working capital management continued to be healthy. New product contribution reached closer to 30% of the sales. Productivity uptrend continued. The productivity moved from INR 5.4 lakhs to INR 5.8 lakhs per person. Brand-building exercise continued to happen, which resulted in the newer milestones of our iconic or textbook brand. They happen also to be age-old products. Naprosyn, which we are aspiring to take it to INR 100 crore, made another milestone. It touched close to INR 74 crore turnover in FY 2024. As I mentioned earlier, yet another portfolio which we are aspiring to take to 100%, again, which happens to be an age-old portfolio, is Aldactone around INR 70 crore. So both of them are quickly closing to the INR 100 crore aspirational target which we have set for these products. The legacy products put together contributed 67% of the sales of the domestic business with 15% growth. New product launches continued to be in the segment which you had identified, as well as the line extensions which we have identified in our three-year new product grid. We did two line extension launches for our iconic brand, Naprosyn, two line extension launches for Titan Tablet, and we launched new molecules in our nephro segment. We also launched two molecules in the rhuma segment, and I think that continued to augment our portfolio significantly. In the segmental performance, I think the domestic formulation, as I mentioned earlier, continued to register robust growth, 15%, and the margins of domestic formulation business touched another record high, easily crossing 20%. International formulation also grew at 15%. And again, here again, the margins, and referring to that margin, I'm referring to the EBITDA margin, it also moved up to its own high so far achieved in the last five years. Similarly, API also registered a significant improvement in the EBITDA margin but grew at 7%. Now, the API growth is 7% is perhaps understandable because we have not been able to launch any new molecules since we started focusing on API as the third engine of growth. Recently, after we thought our plant upgradation takes place and we are able to invite the regulators to visit the plant, now we have the strategy in place. We have the new product in place. We have the R&D setup in place. I'm sure going forward, API growth will also be similar double-digit growth, what we have been mentioning earlier. So on all the three segments, the revenues were double-digit based off domestic formulations and international formulations, and in case of API, it was 7%. The EBITDA growth in all the segments has been healthy, double-digit, and that's what gives us the confidence for going forward. I'm sure you have seen the presentation versus presentation. I've given highlights about the five pillars or five growth drivers of domestic formulation business, which are product portfolio rejuvenation, strategic asset building, customer coverage enhancement, productivity enhancement, and cost optimization. Significant strides have been made in each of these five pillars, which is what has resulted in the growth which you have seen. Similarly, both on the COGS front and the OPEX front, all the initiatives continued to be as robust as they could be, and all the six or seven initiatives which we have on margin improvement continue to result in the improvement in the margins as I described to you earlier. Similarly, coming to our API, we have two growth drivers, two basic prerequisites. Considerable progress has been made. One was the plant modernization and capacity expansion. I'm happy to share with you, both the projects have made extremely significant progress. The API is almost complete, and we are expecting the results of the regulators' visit. And similarly, in case of the formulation and Ankleshwar plant, again, it is WIP, and we expect that by the end of the Q3, we have invited the regulator, and the regulator visits the plant, and then we will have that facility also ready for the export. So plant modernization was simultaneously. We had also beefed up the R&D. We had created a bench strength for the chemists and the industrial scientists. We have identified the products, both for API and the formulations, which are currently under development. As I mentioned earlier, our portfolio strategy is a niche strategy so that we are able to have good margins and growth business because it does not attract the attention of the big players. So that's about the three business segments. I just mentioned to you about this. This happens to be the fifth year of our transformation agenda, and therefore, I'm very proud to share with you that if you look at the financial indices, almost all the financial indices are at their benchmark if we compare ourselves to companies in the INR 1,000-crore turnover category. Revenue is up significantly year after year ahead of market. We touched INR 583 crore. EBITDA, we last year crossed INR 100 crore. This year, we touched INR 135 crore. From INR 34.4 crore and INR 35.4 crore in five years has been a significant achievement. Similarly, PBT from INR 15 crore five years back, it is INR 117 crore now, a multiple jump. Similarly, PAT, which was INR 10.8 crore to INR 87.7 crore, is a very significant jump, almost close to 8 times what we can see in the last five years. In terms of margins also, we have EBITDA margin, which was 10%, so it's now 23%+. PBT, which was 4.6%, now it is 20% up. PAT, which was 3.3, is now 15.1% up, and the EPS, which was 6.5, is now INR 53. What is critical and what is important is that not even a single year in the last five years, in any of the financial metrics, there has been a blip. It has been a consistent upward trajectory year after year. Similar story was in case of margin, which I mentioned to you already. Now, that's about the five-year trajectory. Going forward, you will have noticed in our website, in the investor presentation, we indicated there are seven pillars of growth. The first pillar of growth is to have a state-of-the-art plant. Second is the targeted R&D pipeline. I think these two will take care of the business of the three segments, all of them together. We have identified 70 products for three-year product grid, and we are on course to launch the products in the domestic formulation business, international formulation business. Also, we have close to about 10 products. In case of new API, we have close to about 10 products. They are all under development, and therefore, that all are going on at the moment. In case of the plant, as I mentioned to you, we are in the modernization quite at the advanced stages, and we expect the developed markets regulators to come for approval during this year. In case of the API, the visit has already happened. We expect the approval quickly from them. The third pillar is the innovation. Innovation is not a buzzword. It's actually a necessity for us in an old company. We have done institutionalization adoption, institutionalization of the innovation, and every single HOD in our 70 HODs have a targeted innovation agenda. We are working on technology, digitalization, front-end to back-end, and I'm also happy to share with you that GenAI has also found a significant traction in our front-end operations. We have completed 13 initiatives last year and a three-year roadmap. We have nine projects being implemented now. Since we have cash on our books, we have a very targeted M&A agenda going on. Quite a diligent work is going on, and this space is a little more cluttered as many people want to grow through M&As. We are also into the race, but we will do something which is very accurate. But on this agenda, we are active. We also identified certain other areas of growth like, Can we have other than medicines, the MedTech group to get the synergy from the doctors whom we have a strong leadership? That work also is going on a nd last but not the least is the capability building and talent development, particularly in the area of sales and marketing, digital quality manufacturing. So that's in a nutshell. I wanted to give you background before I started the questions. So thank you so much for your patient listening, and I'm all ears to your questions. Thank you. 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 question queue, you may press star and two. Participants are requested to use handsets while asking the questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sudarshan Padmanabhan from JM Financial. Please go ahead. Yeah. Thanks a lot for taking my question, and congrats on not only this quarter but consistently performing for the last three to four years. I think it's been quite transformational, to say the least. So my question is, we have also been investing quite a bit in the chronic business. While I'm happy to see certain brands reaching a scale, if you can talk a little bit more about the aspiration of one, having more than INR 50 crore than INR 100 crore brand as you touch the INR 1,000 crore mark, aspiration and mark. And second is the proportional chronic as a percentage of what you expect from the overall domestic business. The second question is on the margin. I think, as you've said, from FY 2020, FY 2019, you've seen consistently margins across all heads improving, I mean, cost improving. Given that we have some kind of a near-term war-like situation and issues in the sense the Red Sea, etc, how do we see the margin in the near term and also from a longer term? As you touch the INR 1,000 crore, where do you see the EBITDA margin? These are the two things on my end. Yeah. Okay. Thank you for the question, and I think both are very important questions. As I mentioned to you earlier, that product portfolio rejuvenation in domestic business is targeted towards two specific action agendas. One is, since we have very strong, what we call it, textbook or iconic brands, how do we convert those brands where we see promise into megabrands? So that's one. Second is, as Rachel pointed out, or chronic, how do we maximize or enter even the chronic part of the business? Traditionally, historically, we have not been strong in chronic. So there's chronic as well as specialty. So first, as I mentioned, is the textbook iconic brands maximization through a very diligent life cycle management strategy. And the second is entering the chronic and specialty businesses, the chronic area which you identified, new therapy area, rheumatology, dermatology, gastroenterology, and on the mass side, neurology and cardiovascular metabolic disorders segment. So now the actions have happened. One action is do we have the targeted doctor? We didn't have target doctors in our customer list. We have made sure that almost 90% of this particular segment of doctors are covered. So we have put that in place, number one. Number two, we should have products. So we have identified the products. We have a 70-product grid created in which quite a number of products, other than the line extension for the iconic brands, which comes under life cycle management, quite a number of products have been identified in the chronic and the specialty segments. So that's the second part. The third part is the field force training. We have worked on the feedforce training so that they are equipped to launch such products in their respective segments. So these are the actions which we have taken. So as far as the INR 100 crore or INR 50 crore aspiration which you talked about, the aspiration we did it for the Naprosyn as one brand, as I mentioned, which was INR 18 crore 5 years back, is now almost INR 74 crore this year. And we think in a couple of years, we should be able to touch INR 100 crore. So aspirationally, that's one brand which should be INR 100 crore. And second is the portfolio, which is immunosuppressant portfolio. We're very strong in one molecule called azathioprine. Now we have focused on the 4 molecules in that segment. Apart from azathioprine, the other three are mycophenolate, tacrolimus, and cyclosporine. Put together, we are wanting that portfolio to also cross INR 100 crore. So that's on the textbook product or the legacy product. Now, in terms of the chronic, we have products launched in a number of the subtherapy segments in cardiovascular and metabolic disorders, which includes anti-diabetic products, which include gliptins, which include tacrolimus, and their combinations. We have launched some products. We are in the process of launching of the products. We are mindful of the fact that we are a late entrant in this market. Therefore, it would take time for us to establish ourselves and take away the share from the existing players who are hugely invested in that field. We're mindful of that. And yet, we are also okay for a hockey stick kind of growth that we are committed, and we think that chronic would also be able to give us the business because it's important for us in the chronic business that long-term, that's also more profitable. And that's where all the new products which we have identified, new molecules which we have identified, are largely belonging to chronic and the specialty. Now, specialty segment, Nephro, we are strong. So we are continuing to launch new products in Nephro. For example, this year, we launched Ferric Carboxymaltose, FCIRO as a brand which we launched, and Rhuma, which we entered as a life cycle management strategy for immunosuppressant. We have launched Rhuma-specific products. This year, we launched Teriparatide as one of the products, and Iguratimod is another molecule which we will launch in the Rhuma basket. Similarly, the Gastro and Derma are in incubation. We are covering almost 30% to 50% of the targeted doctors already there. That's also part of the life cycle management for immunosuppressant. As we get established in that segment through our immunosuppressant basket, then we launch Derma-specific and the Gastro-specific products. That's where we are this is where our status is on the two segments of growth driver, if I put it that way. One is the existing product life cycle management, and second is the maximization or entry into the chronic and specialty segment. Now, the second question was with respect to margin. Yeah, the margin, you would have seen the margin uptrend trajectory in RPG Life Sciences has been very indicative of the fact that what is leading to margin improvement. As I've been saying every time, our margin improvement story is structural, which means we are addressing the basic elements, basic cost elements, whether they come in the COGS or OPEX, and doing some fundamental changes there, which is why the margin improvements are happening year after year after year. I understand there are issues which are relevant to us also, whether it's the Red Sea or Middle East conflict. They are impacting us as well. I think since our structural agenda is so strong, it is not only able to overcome the negatives of coming out of external factors, but also it's able to improve our margin. That's why you will see the gross margins improving, and so also the EBITDA, PBT, and PAT are improving. I hope I've been able to answer the question. Sure, sir. So we should basically see an improvement in the near term as well, I mean, apart from the long-term operating leverage in terms of the market. Yes. The only rhythm I'll add there is that if you see the slope of our margin improvement is quite steep in the last five years. Going forward, that slope is going to be not as steep. It's going to be a little obtuse. That's the only point I need to put across. Sure, sir. And one final question before I join the queue is, one is on an absolute cost basis, also, we've seen a significant improvement. So I mean, how much more is left, I mean, apart from the structural changes that you talked about? And what, interestingly, has been happening is we have basically seen a phenomenal utilization of our field force in terms of launching products, in terms of line extension. So can you talk a little bit more about your field force? Has the field force already been created for the chronic, which means that every unit of sale, you'll have an operating leverage on margin? I'm talking about more from a structural and a longer-term basis on this side. Yeah, yeah. So in pharma, very important is the prescriptions. And second important is your relationship or the engagement you have been able to do with the customer. Now, you know well that chronic part, for example, is something which is already well entrenched by very age-old players, whether it happens to be Sun or USV or Sanofi. They're all very well entrenched in the cardiovascular area. What we have at our end is we have identified products, as I mentioned to you earlier, which we are launching in a very professional way, and we are training our field force. Another important thing I should mention at this juncture is that we made use of digital in a very, very interesting and productive manner. We have launched an initiative called RPG Serve. The name itself is RPG Serve. We have onboarded close to about 90,000 doctors in this portal, RPG Serve. This portal is providing close to about 34, 35 services to the doctor. What is important is that we keep on changing those services so that there is a new aspector. That is working out a very good tool for us to increase the share of volumes. Otherwise, physically, maximum time a rep can meet the doctor is maybe 24 times a year. But in this case, we are able to reach the doctor through this portal any number of times: 10, 15, 20, 13 a month, depending upon the services which the doctor asks us. These are the areas. These are the things which we are working on, which have given us dividend in the entire legacy portfolio of ours. Therefore, I said it's growing at 15%. I'm sure it will also help us to establish in the new segment which we entered called chronic, and that is particularly CVM. And in fact, there's some traction I see in the API business growing at 20% or so. Though it is small business, it contributes only 3% to our business, but it's growing strong. Rhuma business which we entered just about three, 3.5 years back, is also doing pretty well, contributes close to about 5% to our sales at the moment. And I'm sure similarly, Derma and Gastro will also contribute, as I elaborated earlier. Sure, sir. Sure, sir. Thanks a lot for your elaborate answer. I'll join back the queue. Thank you. Thank you. Next question is from the line of Sejal Kapoor, an individual investor. Please go ahead. Yeah, hi. Thanks for taking the questions. Good afternoon, Mr. Sikri. I have two questions. What's our net cash position currently, and what organic, inorganic plans do we have? Given the trend that is emerging on the acquisition side in the Indian market, I've seen companies acquiring assets at 7x, 8x sales. I mean, is that something that you would be prepared to go for, or what's the overall plan? Because the cash will continue to increase year-over-year or quarter-over-quarter, actually. Yeah. Thank you so much, Mr. Kapoor, for a very relevant question. As you have yourself rightly pointed out, because the operating performance is improving, margins are improving. Therefore, profit volume is improving. And despite the fact that we have invested this cash which we are generating for our future growth by investing in the two plants which we have, API plant and the formulation plant, which needed modernization so that we can use both the plants for exports. We had only 10% contributing plant in the formulation which was being used for exports. Now, we have the entire 100% plant refurbished and waiting for a regulatory approval to happen, and that would be used for expanding the export business. A similar thing for API. Now, what we did was, since in our business, 67% comes from the domestic formulation and 18% comes from the international formulation, 15% comes from API. Obviously, our priority was the domestic formulation. We actually worked on domestic formulation, and I've described five businesses already. Now was the time for international formulation, API. And the prerequisite was that we must have modern plants. I'm very happy to share with you that both plants are modernized. The plant, which is Gesto 65, 55-year-old plant, now you can see it is totally refurbished, ready for approval. I dare say even USFDA readiness has also been considered when we have created a new plant for API. And similar thing is its formulation. So that will help us for the organic growth to make the international formulation API at the second and third engines of growth. So that's on the organic part. In the DF, it is more OpEx-driven because we have to expand field force. We have to launch new products. We have got very, very good CDMOs in the country, and I think we use them to get new product supplies fast when we are launching those new products. So that's the organic part. Inorganic part, as you very rightly mentioned, since we have close to about INR 127 crore in our books now and after investing, as I mentioned, a huge amount of CapEx, close to about INR 140 crore in the last three, four years on the plant modernization, including our office modernization, I should say that. Now, we are looking at the acquisitions. And you rightly mentioned, the market is crazy. There are crazy valuations. I can only tell you that we have created our framework, what kind of molecules, what kind of APIs, what kind of products we are going to acquire, which are likely to acquire, should have all that diligence is going on. We have actually, just to share with you, around 23 proposals reviewed in the last 1.5 years. We also submitted non-binding bids. But the market is a bit crazy. We don't want to do any acquisition unless it makes sense, value creative. But we are hopeful. I have also added into our M&A list APIs as well. Earlier, we were looking only in formulation, including APIs because I think that space is also presenting very good opportunities. So that's where our net cash is being planned to be utilized. I hope I could answer your question a little bit. Yes, Mr. Sikri. As a follow-on question, so the market, the Indian pharmaceutical market, is highly fragmented, right? So if we exclude the top 15, 20, maybe, let's say, top 50 players, there are hundreds of small micro, nano-sized companies. How does that landscape look like in the ecosystem or the emerging ecosystem of this government and generic, generic rollouts, the Jan Aushadhi? And so currently, I understand that the back end of not EU-GMP, the WHO-GMP infrastructure. So there are 12,000 to 10,000 CMOs in India, and most of them, more than 90%, I believe, are not WHO-GMP compliant. So there is a guidance but not the law. So let's say, over the hypothetical scenario, of course, let's say, over the next 2-3 years, majority of these CMOs, either they disappear and they go down under, or they upgrade to become WHO-GMP compliant. Then the government will be in a better position to roll out the generic, generic push. In that context, assuming that that scenario plays out, how will branded generic space perform, and what does that mean for a company like RPG Life Sciences? In that kind of a scenario where we have real push coming on the Jan Aushadhi or generic, generic rollout. Yeah, I think it's a very pertinent question, Mr. Kapoor. Yes. Looking at the way our market characteristics are, it is a very highly fragmented market. We have many, many players. Generic, generic is getting a push from the government. There are Jan Aushadhi Kendras coming up. The government is also issuing directives to the government doctors to prescribe generic, generic. And you rightly described, there are a large number of CMOs, CDMOs, and then the GMP is an issue. I think you have laid out the landscape pretty well. I have some observations and some thoughts, of course, as the things play out and we see. Ours is a branded generic market, almost 90% to 93%, every branded generics. Were generic, generic not there earlier? Generic, generics have been there earlier for decades now. Were Jan Aushadhi Kendra not there earlier? I think somewhere in the early 2000s, the Jan Aushadhi Kendra were launched by the earlier government. Are they under emphasis by the government? Yes. How many they have launched? They have launched somewhere around some 6,000 to 7,000. They plan to take 10,000 or 20,000. Those 10,000 and 20,000, which they plan to launch, even go to 30,000 to 40,000, compared to some 700,000 to 800,000 pharmacies or chemists we have in the country. They will still be much less in terms of percentage, number one. Number two, the performance of current Jan Aushadhi Kendra is lackluster because they have insisted that they should get the supplies from certain authorized manufacturers. If you visit them, you'll find paucity of the brand or products available from there, though they are available at 70% to 80% deeper compared to branded generics one. The second one is you have seen the kind of the news which we get when some children died elsewhere. We see a large number of CDMOs, CMOs, which are not cGMP compliant. We also see the government regulatory infrastructure is just not sufficient enough to manage and regulate such a burgeoning pharmaceutical manufacturing setup in this country. So yes. Is it a threat to branded generics? Yes, in a way, it is. But will it impact so strongly going forward in the foreseeable future? Not to the extent that becomes alarming. Now, the current regulators realize this, that quality is critical. It's just not the cost. The quality is also critical. And therefore, GMP etc., is being talked about and being implemented. So all in all, I think all these points which you mentioned, yes, on the macro environment, they are concerning. But on the ground, will it make an impact in the next 5-10 years? Not to that extent. That's what is my personal assessment or take. Yeah. No, that's helpful, Mr. Sikri. I think my assessment was in line with yours. Because you are an industry veteran, I thought I'd just double-check my understanding with yours. You mentioned quality and not just cost. The thing is, if you start upgrading these non-compliant CMOs in the country, because some companies will force their operating expenses to go up, and then in that scenario, they will be forced to price their products higher, right? And so then the economics that will likely play out will look different from what the cost economics that is currently present because they're not investing in the compliance. The quality is poor. It's not reliable. And therefore, the products are cheaper. Is that a fair assessment? Absolutely. I agree with you. Yes, with this, if the regulators continue to push these reforms, I think it will reset the manufacturing landscape. There are some people who will have to opt out because the quality has a cost. It has a definite cost. And it will reset the manufacturing landscape, i.e., very strongly. It all depends upon how strongly government pushes their agenda. Currently, if you look at the government infrastructure or inspection infrastructure, their ratios are extremely positive. And they have to beef up their own regulating infrastructure. And if they do that, I think the reset of the manufacturing landscape will happen. And what you just mentioned is most likely to happen. That's helpful, Mr. Sikri. So we have been invested in RPG Life Sciences for 10 years now. And thank you for increasing the dividend yet again. Thank you. Yes, sir. Thank you, Mr. Sikri. Thank you. I'm done. I'm done. Thank you. Thank you, Mr. Kapoor. Thank you. Ladies and gentlemen, due to time constraints, please limit your question to strictly one question per participant. Should have a follow-up question, we request you to rejoin the question queue. Next question is from the line of Heemashu K C from JM Financial. Please go ahead. Yeah. Hi, sir. So you have answered my colleague's questions. I'll not take much time. Only one suggestion, sir. The new product launch, sir, we have been tracking since FY 2019. And I understand that's a transformation program that we had. But going forward, if you can change it to last two, three years, that will be helpful for us to track how they are doing. So all the best, sir. Great performance. And not burning question. Thanks. Bye. Thanks. Thanks for the suggestion. I generally have a little long-term perspective because I know in pharma, selling, and marketing, once you launch the product, people forget about it. And then it comes to you later as expires. That's a very common thing. Therefore, I include the new products. And as this tracking helps us to see that everything is going in the right way. Sure. So maybe three years and five years, maybe better bifurcation. As an analyst, we like to see last two to three years how it has been done. So this is a suggestion. Thanks a lot. And all the best. Sure. Sure, Himesh. Sure. Thank you. Thank you. Next question is from the line of Nimish Mehta from Research Delta Advisors. Please go ahead. Yeah. Thanks for the opportunity. And Akeesh, congratulations for consistent performance. A lot of the questions related to the trade changes have already been answered. Just one thing. Sir, how do you look at our own capacity management? So one, are we likely to outsource more, or are we likely to outsource less given that the manufacturing environment that you rightly pointed out is becoming stricter by the day? So you can just give me a temp of what is our current outsourcing percentage, and what do you think is likely to happen when it comes to investing in the capacity? Okay. Okay. Thanks, Nimish, for this question. Very pertinent question. Yeah. As I mentioned earlier, we have modernized our plant. We are in the process of modernizing our plant that I mentioned to you earlier. At the same time, we are also adding to the capacity, capacity which has been added close to about 25% to 30% if I forget the two plants, Formulation API. And with respect to the decision to source the product from the third party or from outsource or internal, I think it's very, very our strategy is extremely clear when it comes to new products. In domestic business, I think we have very good CDMOs available in the country. And being in the industry for a long time, I have my personal connection to large CDMOs. I know that they have not only a good development lab, development scientists, and development plan, but they also have the manufacturing operations with good cGMP being implemented. So our almost entire new product in the domestic business are being outsourced. As far as the existing business is concerned, existing products are concerned, we take a very prudent decision. We see what is gross margin accretive to us. We take a decision on that account. Accordingly, we either manufacture the product in-house or we manufacture the product outside. Broadly, it's about 30% to 35% plus is the domestic formulation business which we are outsourcing. The new products, I already mentioned to you, almost entire new product we outsource. We also plan that if and I think that's a smart strategy. When the volumes pick up for the new products, we do consider to bring those products in-house because that adds up to a few percentage gross margin for our case. We don't have a risk because the product might fail. We only do it when enough volumes, threshold volumes are created, and then we bring the product in-house. Overall, broadly speaking, we would like to use our facility for the exports going forward. And more and more outsourcing we'll do. But before we do the outsourcing, our outsourcing partner selection is very, very robust because we are mindful of the fact that GMP is critical. And in our growth journey, we would like our product to be seen as quality products. So I hope it answers your question. Yeah, pretty much. Just that, so now that we are increasing the number of new products, the percentage of new I mean, outsourced products will also increase, right? So essentially, to that extent, there might be some margin impact like that. Is that a right way to look at it, or no? I should mention that I think margins are also important for us because an upward trajectory of margins for the last five years has been our aspiration, which drives us. So what we are doing, the products which are the chronic products, specialty products, we focus on those products which have good margins, which are relatively a good margin. It should not become margin diluted for us, at least. So selection of the product takes care of the margin part from the CDMOs, plus the relationship with the CDMO and the assurance to them that we will source the product from you. So all that broad arrangement also helps us to have a good margin situation even with the CDMOs. Okay. Okay. Meghan, thank you very much. And much of the problem for you. Thank you, Nimish. Thank you. Next question is from the line of Ankush Pandya from InCred Asset Management. Please go ahead. Yeah. Hi. Thank you. Congratulations on the clear set of numbers. Just one, two questions. In the initial comments, you mentioned that there has been some government has imposed some restrictions from the point of view of international formulation business. Can you give some more clarity on that part? Yeah. See, largely in emerging markets, Ankeet, there are countries where the foreign exchange is being conserved by the governments. So their issuing of import licenses is being regulated by the government, even though the fact is that we have very good customers and the partners there. But that situation is what some hiccups it creates during the year. That's what happened, perhaps, in last year. That's what I mentioned in that context, whether that market is the market of Myanmar, some such restrictions in Iran where the governments are wanting to conserve the foreign exchange for their own priority areas. Now, is pharmaceutical a priority area? Yes, priority area. And that's why I'm confident that these are transient. Since we have very good customers, connected customers there, we think we should be able to ride over these hiccups also because the governments cannot put embargo on the medicines for a long time, particularly when they do not have a large manufacturing base of their own. Okay. Fair enough. So another point related to international formulation was given that for the past few quarters, there have been seen strong growth. And Q4, current quarter, has been largely flattish for the international formulation. So is there any impact of even the Red Sea? There's been a delay in supply chain issue, anything regarding that? No. I think just one happened because, as I mentioned, we are having plant modernization going on simultaneously, for which we had to shut down our plants or not plants, one or two blocks because we were modernizing. This was new facility, new block. So there was some supply issue for particularly one product a nd that's what I just mentioned. But I think that's all over because the plant is ready. In the new plant, the production has actually started a nd we also started getting the delays in the quarter one. So that was the only point. Else I don't see an issue. Further capacity expansion is also for the capacity expansion, I think we have the capacity available to produce the products. Plus, we have done the expansion now that takes away that fear absolutely from our minds of supply being constrained. Okay. So lastly, just on the API, given that you mentioned that we do about plant modernization, and there has been more new launches, and that has been largely completed. So can we expect from the second half of FY 2025 onwards, the growth in APIs should pick up given that we'll be launching new molecules for the API business? And another question on the CapEx front. So last year, we have done around 60%-65% of CapEx. So largely, we think that the majority of the CapEx is done. So how much can we expect in the going forward for the next one to two years? Okay. So Ankush, you are very knowledgeable about pharma. Therefore, first question, on API, you mentioned, we have identified API. First of all, we have created the new state-of-the-art API R&D. We have hired the scientists. This is all a skeleton earlier. We have hired, and we have identified new APIs. And the work is now going on. It takes about one to 1.5 years for a new molecule to be out in the market. That's the development time. And then you have the regulatory approvals required for those products. So last year, we did all of that. We created a new API R&D state-of-the-art. We hired the scientists. We identified the molecules. The R&D work has started. And they are at various stages of the new product development. So this year, second half, we'll get the products. That will be too ambitious. But I think we should start getting the products on the FY 2026 because I see good progress happening. There are very strong reviews happening on all the new products. So I feel that that should start getting reflected properly in FY 2026 instead of FY 2025 because all these products are under various stages of development. Regarding the CapEx, I think you asked about the CapEx. The large part of the CapEx is done, frankly speaking. And now the CapEx, which will come, will be more situational. See, if we get a very good opportunity and for which we have to create a facility or create a particular manufacturing setup, whether it is something to do with granulation, compression, whatever. And we are prepared to do this. And that might have a CapEx. Otherwise, we will have the routine CapEx. We will have the CapEx which gets included in the new product development. Also, the CapEx, which I said, could be when we have an opportunity. Now, for example, we were approached by a customer from the developed market, Australia. They wanted us to develop the product to have a product which was niche product. So we gave them the niche product. We impressed them. Then they came up and told us that they want to get the product delivered or manufactured by us. In a very limited span of time, we created additional facility because we saw that this is a promising business. And we spent CapEx on that. And finally, I'm happy to share with you that actually, the deliveries from the newly created facility have started. So such kind of situations, yes, we will have the CapEx being spent. More or less, I think this is how it is, plus some digitalization agenda, some kind of robotics, etc, when we are improving our manufacturing infrastructure that would entail some kind of Capex. Okay. So just a clarification, the new capacity that you said for the Australian customer. So this is apart from the Ankleshwar capacity expansion that you have done. This is over and above that you have done CapEx, or you'll be doing CapEx? No, it is included. Now, since the facility is created and the manufacturing started, the leads have started, it is included in the CapEx which you have spent already. Okay. All right. Okay. Fine. Yeah, that's it from my side. Thank you, and best of luck. Thank you, Ankeet. Thank you. As a run-over for the questions, I would now like to hand the conference over to management for closing comments. Okay. So I must be grateful to everyone who is on the call today and who has asked a number of questions. Net-net, I can tell you that the results which we have got in the last five years, including the last year, are the result of a very clearly established transformation agenda which is focusing on six or seven tenets. Those six or seven tenets will drive the growth further. That's point number one. Point number two is the growth engine which used to be domestic formulation alone would be aided by two more growth engines which are international formulations and API. The works are in full swing in that direction. Number three is with solid performance improvement happening and the cash flow being generated, we are also wanting to beef up the progress by inorganic growth. When it happens, we can't predict that. But there are very sensitive, diligent efforts going on in that direction that should be able to drive the growth. Overall, put together, we want this company to move the INR 1,000 crore mark. This is the well-conceptualized strategy which we have in place. The kind of recognitions we have got from the industry are really overwhelming. We were featured in Dun & Bradstreet Top 500 Value Creators. It's very humbling. A company of our size got placed there. And so all of this, I think, that gives us renewed confidence that we will be able to achieve not only the target of INR 1,000 crore but also create brands, solid brands which will become multi-hundred-crore brands going forward to get us our new place in the community of the pharmaceutical industry companies. Thank you so much for coming over and your patient hearing. Thank you. On behalf of Systematix Institutional Equities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.