Ladies and gentlemen, good day and welcome to the Sai Life Sciences Q3 FY 2025 earnings conference call. 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 star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Siddesh Chawan from EY. Thank you, and over to you, sir. Thank you, Sejal. Good evening to all the participants on this call. Before we proceed to the call, let me remind you that the discussion may contain forward-looking statements that may involve known or unknown risks, uncertainties, and other factors. It must be viewed in conjunction with our business risk that could cause future result performance or achievements to differ significantly from what it is expressed or implied by such forward-looking statements. Please note that we have mailed the results, and same are available on the company's website. In case you have not received the same, you can write to us, and we will be happy to send the same over to you. To take us through the results and answer your questions today, we have the top management of Sai Life Sciences Limited, represented by Mr. Krishna Kanumuri, Managing Director and Chief Executive Officer, and Mr. Siva Chittor, Chief Financial Officer. We will start the call with a brief overview of the company and quarter gone past, and then conduct a Q&A session. With that said, I will now hand over the call to Mr. Krishna Kanumuri. Over to you, sir. Thank you, Siddesh. Good evening, everyone. Thank you for joining us today. It's my pleasure to welcome you to the first, I guess, conference call from Sai, the public company. It's a great experience for us. We're really excited about the progress we've made, and I really want to share our performance for the last quarter and give you an overview of our strategy going forward. But before we begin, I really want to thank all our investors and shareholders who really participated in the IPO and made this possible for us. And we take this very seriously, and we are really focused on bringing long-term value for all investors. Special thanks to our bankers, legal counselors, and all stakeholders who played a critical role in guiding us through this process. Most importantly, I want to extend my heartfelt gratitude to the entire Sai Life Sciences team. Their dedication and hard work have been instrumental in shaping the company to what it is today. And let me start with a brief introduction of the company. Sai Life Sciences was founded in 1999 with a vision to be a trusted partner to global pharmaceutical and biotech innovators. Our journey began in Hyderabad, India, where our founder, Dr. K. Ranga Raju, recognized an opportunity to create a world-class research and manufacturing organization rooted in scientific excellence and operational excellence. From day one, we've been focused on accelerating the journey of molecules from discovery to the market by providing best-in-class contract research development and manufacturing services. Over the years, we have evolved from being a chemistry provider into an integrated end-to-end solution provider catering to the leading innovators from the U.S., U.K., E.U., and Japan. A key strength of Sai Life Sciences is our culture and team. Our culture is based on a high level of transparency, focus on fundamentals, and building empowered teams. We are one of the most experienced senior leadership teams in the CDMO industry, with over 25 years of average experience, a fully integrated global team across India, U.S., and U.K., which brings diversity of experiences and a foundational scientific team we've developed over the years, and further strengthening our ability to serve clients with industry-leading expertise. This deep sector knowledge, combined with our relations, relentless focus on innovation, has positioned us as a preferred partner for global pharmaceutical companies. Today, we serve 300+ active customers, including 18 of the top 25 global pharmaceutical companies. We have an impeccable track record of 100% successful regulatory inspections across both our R&D and manufacturing facilities, including approval from U.S. FDA and PMDA. One of our early milestones was establishing a cutting-edge R&D center in Hyderabad, which became the foundation for our innovation-driven approach. This phase of development was focused on ready products to reach early clinical supplies. Soon after, we strategically expanded to Bidar, setting up a large-scale manufacturing facility designed to handle and deliver complex, innovative clinical and commercial APIs. In 2020, we established our centers of excellence in Manchester, U.K. for process chemistry, and discovery biology in Cambridge, U.S.A., allowing us to better serve customers closer to the innovation hubs and significantly expand our scientific team. These facilities enable our customers to have face-to-face interactions with the Sai scientists and to accelerate the pace of tech transfer to India and getting new programs started. The expansion reflects our commitment to being a global, integrated CRMO partner and not just an outsourced service provider. Today, Sai Life Sciences is on the forefront of India's rising in the global pharmaceutical landscape. We supply over 31 commercial molecules and have a strong development pipeline of lifesaving medicines across diverse therapeutic areas: oncology, metabolic diseases, CNS disorders, inflammation, antivirals, and rare diseases. While I've said the narrative on an overall basis for who we are, I'd like to focus on a few pointers for investors and analysts to understand our market positioning and aspirations. We are one of the few companies that is globally competitive across the full range of integrated services spanning discovery, development, to commercial manufacturing. The most successful companies in the CDMO sector over the last two decades have been WuXi and Pharmaron. The key to their success has been their ability to offer high-quality services at scale across the drug discovery, development, and commercialization journey. The pharma industry is getting increasingly competitive, with time-to-market being one of the key success factors. All things being equal, innovators want to work with companies offering a broader range of services, as it reduces the time and effort that is needed to transition between development stages, eliminating the need for direct transfer. We admit, from a scale standpoint, we have a way to go. At foundational level and at scientific level, we are now able to compete qualitatively globally on all these areas. Over the last decade, we have built a very long-standing relationship with large pharma innovators and the biotech ecosystem, which has become a strong moat for us as we strive to grow the business by increasing both the breadth and depth of our services and these relationships. And we have seen some tremendous traction and see strong momentum because of relentless pursuit of the strategy and by making strategic investments in both people and infrastructure at appropriate times. The second aspect is the CRMO business itself is inherently lumpy in nature. You're basically working through a complete product development cycle. You're not dealing with a mature product or two. This can give rise to short-term spikes in our financials. These are about new products being launched in markets through the cycle, phase I, phase II, or multiple phases based on quick data. So it's a long lead cycle business, and we would urge all analysts and investors to analyze us from a three-to-five-year horizon perspective as opposed to focus on short-term results, which could then lead to questions that most analysts and most investors. How do they look at our future as we go forward? While we adopted a policy of not giving specific guidance on any parameters, the long-term aspiration is growing to cater to 15%-20% when you consider three-to-five-year blocks and ensure that margins continue improving as we move down this path. Siva will speak a bit more on the financials in his prepared remarks, but I felt it was very important to set this marker so we can focus on the direction of business as we meet the next conference call. Now, turning to our performance for Q3 2025, we are pleased to report healthy performance this quarter, driven by our focus on expanding capacity, embracing cutting-edge technologies, and meeting evolving needs of the industry. This quarter, we delivered 15% year-over-year growth with our CDMO and CRMO business contributing 60% and 40% of total revenue, respectively. Our EBITDA grew by 19% year-over-year with a margin expansion of 110 basis points, while the PAT grew by 29% year-over-year, supported by operational efficiencies and a strong order pipeline. Again, Siva will delve deeper into financials, but I'm just stating the top-line numbers. What gives me the confidence for this business as we move forward? I'd like to enumerate a few areas where we believe our model and expertise will play out. Broader set of offerings. As mentioned earlier, we are not a one-trick pony, and hence our broader sales funnels enable us to bring in customers at different points of the development journey. And we're able to cross-sell more effectively because of our multiple service offerings. And with supply chain diversification post-COVID, everybody is actively looking at credible sources outside of China. India only has 5% of the global market, so we have enough room for significant growth in the coming decade easily. Long-standing relationships. While I've spoken about this initially, this remains our preeminent strength. We work with 80 of the top 25 big pharma companies, and these relationships have been cultivated over the years. With this as a base, customers' expanded service needs across multiple modalities are able to meet these diverse demands and get products to market at the value proposition fewer Indian companies offer. Sustainability remains a key pillar for our long-term vision. We continue to integrate responsible practices across our operations, focusing on energy efficiency, digital transformation, and innovation in sustainable manufacturing. Our investment in renewable energy, including a 2.7 MW wind turbine, has significantly increased the use of green energy at our Bidar facility to 89% in FY 2024. We remain committed to reduce our environmental footprint, enhancing workplace safety, fostering an inclusive workforce, while delivering long-term value to our stakeholders. In closing, we firmly believe that India is entering a golden era in the global pharmaceutical innovation. Historically, only a few companies have successfully scaled as integrated players. But over the next decade, India is set to emerge as a major player in the global innovation ecosystem, with the ability to match China's scale while maintaining the cost efficiencies. India presents a compelling alternative for global pharma companies seeking long-term partnerships. Looking ahead, we are confident in our ability to build on the momentum we've established. We're committed to further enhancing our technological capabilities, investing in infrastructure, and expanding our global footprint. We're excited about the road ahead and remain focused on driving long-term value for all our stakeholders. With that, I would like to hand over to Siva Chittor, our CFO, who will provide an update on financial performance for Q3 2025. Thank you, Krishna. Thank you, everyone, for joining us today. I'm pleased to share our Q3 FY 2025 financial performance. This reflects our continued business momentum, our operational discipline, and strong customer relationship. The small- molecule outsourcing business remains robust, with both the CRO and the CDMO segments meeting anticipated growth trends. Revenue growth across both segments reflects increased business from existing customers and products, as well as new collaborations. This quarter, our revenue from operations grew to INR 440 crore, a 15% increase compared to the INR 384 crore in Q3 FY 2024. This growth was on account of continued momentum across the CDMO and the CRO business, which account for 60% and 40% of the total revenue approximately. Margin improvement remains a key focus, with multiple operational efficiency activities underway. For Q3 FY 2025, our EBITDA margin increased to 28%, up from 27% in Q3 FY 2024. This steady margin improvement reflects enhanced operational productivity, operating leverage, and cost control initiatives that we had undertaken during the year. Our profit before tax saw a significant increase of 35%, rising from INR 53 crore in Q3 FY 2024 to INR 72 crore in 2025. Our profit after tax rose to INR 54 crore in Q3 2025 from INR 40 crore in Q3 2024, which reflects a 36% growth. The improved profitability is primarily driven by strong revenue growth and cost management and stable finance costs. Employee costs for the period increased by 9%, moving from INR 122 crore in Q3 FY 2024 to INR 133 crore in Q3 FY 2025, aligning with the increased billable headcount in relation to the discovery business. This increase also reflects our continued investment in talent and organizational growth, which is very critical for a business that is based on people and talent. Finance costs remained relatively stable at INR 23 crore for Q3 FY 2025 compared to INR 23 crore in the same quarter last year, indicating effective debt management and working capital. As of December 2024, the company had repaid INR 585 crore of debt out of the planned repayment of INR 720 crore of the IPO proceeds. The remaining debt was repaid in January, and we expect a reduction in interest costs in the current quarter. Our earnings per share increased from INR 2.2 in Q3 FY 2024 to INR 2.9 in Q3 FY 2025. This reflects a 32% year-on-year increase. Now, coming to the nine-month performance for the nine month ended December 31st, 2024, as compared to the last year's same period, showed an overall increase in total income from INR 1,052 crore to INR 1,142 crore. This reflects a 9% growth. Our EBITDA margin rose to 24% compared to 17% in the same period last year, and this reflects a 700 basis point improvement. Our profit before tax for the nine month grew significantly from INR 33 crore to INR 109 crore in 2025. This reflects an increase of 228%, and our profit after tax grew 207% from INR 27 crore to INR 82 crore in fiscal 2024. Gross margin for the period was around 73%, up from 69% in the previous period. Employee costs rose in line with our strategic investment in talent and the growth in discovery business. It increased from INR 364 crore in 2024 to INR 398 crore in 2025. Operating cash flows for the nine month ended December 2024 were INR 246 crore. This represents 92% of the EBITDA for the period. The company recorded a positive free cash flow of INR 21 crore during this period. Capital expenditure for the nine months ended December 2024 was INR 300 crore. The company added 100 kL to its manufacturing capacity in November and expects to add another 100 kL in Q1 FY 2026. Average capacity utilization for the nine month ended December 2024 was 65%. In addition to this manufacturing capacity addition, the company expanded the discovery R&D capacity in Hyderabad by 15% through addition of lab spaces for chemistry and biology. We believe that the growth is on account of the long-term growth strategy that was initiated in 2019, and we remain committed to expanding capacities and enhancing technological capabilities to drive long-term growth. Our ongoing investments in digitization and automation are key to improving our operational efficiencies and positioning the business for sustained success. As part of our strategic financial management, we are utilizing the proceeds from the IPO to repay debt, strengthen our balance sheet, and reduce financial leverage. This proactive approach supports our long-term growth and operational flexibility. Over the past five years, we've consistently invested in expanding capabilities, including advanced technology platforms, scientific expertise, and infrastructure enhancements. These investments are translating today into higher customer retention and increasing share of projects and a growing pipeline of opportunities. As alluded by Krishna, we will emphasize improving margin, and we aspire to reach an EBITDA margin range of 28%-30%. For the next four to five years, we aim for a revenue CAGR of around 15%-20%. That said, I would like to reiterate that the business has a certain amount of lumpiness and quarterly swings, and hence we would like the investors to look at a longer horizon to evaluate the company. Looking ahead, we remain confident in our long-term growth trajectory. The global pharmaceutical and biotech industry continues to shift towards outsourcing. This is driven by the need for innovation, efficiency, speed, and scalability. With our established relationship, integrated capabilities, and track record of execution, we are well-positioned to capitalize on this trend. Additionally, we see strong demand across our CDMO business as pharma and biotech companies seek cost-efficient, high-quality manufacturing solutions and supply chain diversification. The aging global population and increasing healthcare needs will continue to drive long-term demand for pharmaceutical innovation, creating significant opportunities for our business. From a financial perspective, our focus will remain on maintaining revenue growth, optimizing margins, and improving cash flow efficiency. We will continue to invest in expanding capacity, strengthening our talent base, and enhancing operational efficiency. This, we believe, will drive sustainable and profitable growth. To conclude, Q3 FY 2025 was a robust quarter marked by healthy top-line growth, improving profitability, and a promising outlook for the future. Our integrated business model, strong customer relationship, and financial discipline position us for long-term value creation. We remain committed to delivering sustained growth, enhancing shareholder value, and strengthening our market leadership. Thank you. I would now like to open the floor for the Q&A session. 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 while the question queue assembles. The first question is from the line of Binay Singh from Morgan Stanley. Please go ahead. Hi team. Thanks for the opportunity and congratulations for a good set of numbers and best wishes for the journey ahead. My first question will be on the biotech funding in the U.S. One of your peers talked about the pace of recovery being more gradual than they anticipated. Does the discovery business revenues were slower than what they were expecting a few quarters back? How is the demand environment that we are seeing? The discovery business, if you look at it, it's in a different cycle at this point. If I just have to go back and take a step back, a lot of money is coming into biotech, but it's going to later phase programs. A number of new company startups have not really started yet. You will probably see the new company formation start right after some consolidation happens. So we're seeing a lot of consolidation right now, and the consolidated entities are raising money, and these are poor, and these companies are expanding. But the new company creation definitely has slowed down. Time frame is hard to judge. It's your guess as good as mine in terms of when new company formation is going to start. But the demand from the larger players has been pretty robust at this point. Right. So in light of that, when we look at seasonality from the limited data that we have, typically quarter four is the strongest for the company. Would that still hold with the visibility that you have today? Yes. Broadly, without giving a specific guidance, Binay, I think quarter four has generally been the strongest quarter that we've had, and quarter three and quarter four, relatively, the H2 is generally stronger than H1, which is the case with most of the CDMO business across, and we also believe that it will be the same way. Lastly, just on capacity and CapEx, I saw the comment that you made about 65% utilization rate of capacity. That would be, as of so innovative November facility would only be available for one month. So the actual utilization rate that you would have in this quarter would have, in a way, come down. So do you expect any adverse impact of that on margins? I don't believe so, Binay. I think the second set of capacity, because we believe that there are products that are ready to go into this facility, not that they will all be at the 65%-70%, but we don't believe that this will impact the margin significantly. That's good to know. And lastly, just on CapEx, we've done around INR 300 crore in the nine- month. If you could give some guidance for the full year number and for next year. I think based on how deliveries and how things reach our site, this expenditure is based on how we book our numbers. We probably expect to add another INR 100 crore -INR 125 crore in this current quarter. How to think about it for next year? We're working on much more details, and as we kind of finalize our plans, we will come back to you with some more specific guidance. Just to give you a perspective, Binay, a little bit about what we've done so far is we've completed some land acquisition in the last quarter. We've doubled the land area we have available for our business center in Hyderabad. We have bought land for another site in Hyderabad for manufacturing, and we also bought a lot of surrounding ground buffer to expand our footprint there. Right now, we are in detailed planning stage, both from a revenue guidance standpoint and investment across all three areas of our business: discovery, CMC, and development. We expect we will have significant investment, not investment, but increase in capacity across all three areas based on the demand we're seeing right now from our customers. And we will update you as soon as we make this little bit more clarity on that numbers. Great, [Team]. That's encouraging to know. I'll come back in the queue. Thanks. Thank you. Before we take the next question, a reminder to all the participants that you may press Star and 1 to ask a question. The next question is from the line of Alankar Garude from Kotak Institutional Equities. Please go ahead. Hi, good evening, everyone, and thank you for the opportunity. So firstly, can you comment on the visibility for the CRO segment in particular, given that the funding environment is not fully backed yet? I think, Alankar, I think what we are seeing, I think based on the whole integrated discovery strategy that we had put in place, we are seeing a reasonable trend in terms of growth, and that is kind of reflected in our numbers for this year. I believe that the funding situation is not 100% back to where it probably was during the COVID period, and I don't believe that we will get to the COVID period funding. But our understanding of what we are seeing is that there is a reasonable amount of traction in the business. That said, one of the increased focus for us as a company is kind of an increased traction with the large pharma customers, which has also helped us kind of take care of any specific shorter-term funding-related issues. Understood. The second one is more on the, I mean, both on CRO and CDMO, actually. Qualitatively, it provides some color on the number of RFPs as well as the number of client audits, which you have been seeing over the last one. Specifically within that, is there any change in these RFPs as well as client audits given the delay in the BIOSECURE Act? Alankar, just we don't really focus too much on RFPs per se. We focus much more on customer visits and what we're seeing. But what I can definitely say is that from the pharma standpoint, nothing has changed. I think pharma has made a long-term decision to kind of diversify from China. It's just a question of customer concentration. I think this deleveraging started back in post-COVID. I think BIOSECURE probably just pushed it in the right direction, but I think nobody seems to be going any slower. I think they're accelerating their plan. Not accelerating their plan, but just to be very candid, pharma came with a five, 10-year horizon. They haven't come and said, "We're here today. I want you to perform tomorrow." They're really building these relationships slowly. So I think fundamentally, I think we are seeing that traction continue. And what you're seeing in terms of the BIOSECURE Act, biotech funding is more to blame rather than the BIOSECURE itself. I think any biotech with funding is looking at both China and India's options. So we are not seeing any change in terms of people's strategy. Just the timing might change based on the funding environment. I think, Alankar, just to, I think just to kind of go back to the prospectus that we had filed, even prior to BIOSECURE and post-COVID, if you look at our number of products that we have tech transferred from other geographies as a means of supply chain diversification, we've actually added more than 15 products that have moved from a different geography into Sai as part of supply chain diversification, and we continue to see a lot more traction in that area. That's helpful, sir. And one bookkeeping question. You mentioned the split between CRO, CDMO for the nine- month. Possible to share that for the third quarter as well? I think it is almost reasonably similar, but I can give you. I can come back to you with specific numbers, Alankar. Fair enough, sir. That's it from my side. Thank you. Thank you. The next question is from the line of Nikhil Mathur from HDFC Mutual Fund. Please go ahead. Yeah, hi. Good evening, all. I think your comments on margins and growth are kind of pretty well understood for me, at least. The challenge I see is that if I assume INR 400 crore-500 crore of CapEx over the next three, four years, I don't find the asset turns to be improving quite meaningfully from where they are at currently. Given that the utilization at 65%, I estimate that the asset turns on a full balance sheet basis will be 1.1x-1.2x, and sorry, 0.5x-0.6x, and on a fixed asset turns basis will be 1.1x-1.2x. So any particular reason why asset turns are stacked on the lower side for a business which is also 40% into CRO? I think it's so Nikhil. I think even when we had given the numbers for fiscal 2024, our asset turn, the net asset, net fixed asset turn, excluding CWIP, was around 1.2. I would guess we would probably be around the same number at the end of the year, somewhere, give or take. CRO does not necessarily mean lower expenditure. I think what we need to understand is biology, the DMPK, automations, all call for huge expansion with respect to equipment and analytical instruments that we need to buy. I do not believe that just because it is discovery that the asset turn should be higher. If you can look at the global trends and Indian peers in CRO, you will find that the asset turns are fairly similar. Okay. So just trying to understand the capital efficiency of the business, where does it settle at? Because margins are improving this year. I think if, let's say, all goes well in FY 2024 and you close FY 2025 by 24%-25% margins and 65%-67% utilization rate, which is what you have disclosed, the capital efficiency of the business or return on equity will be 9%-10%. So what are your thoughts over a three, four-year period where this capital efficiency number can kind of settle at if there is no major lever available on the asset turn side? I think our aspiration on the ROCE side, I'm looking at more return on capital employed, is probably mid- to high-teens over a three- to four-year period. That's really what we aspire to get to. Okay. And for that to happen, a minimum 15% growth figure has to happen, and that you are quite confident of in a three, four-year time frame. Is that the right way of looking at it? That is the right way of looking at it, and that's really what we see today. We believe that that is something that is possible. Okay. Got it. Thank you so much. Thank you. The next question is from the line of Madhav from Fidelity Investments. Please go ahead. Good evening. Thank you so much for your time. My question was similar to the earlier participant's question that if you're investing about INR 400 crore-INR 450 crore in CapEx this year and you wish to maintain that rate going ahead, just that's just an assumption. If your guidance is 15%-20% revenue growth, that would still mean that our assets would remain a bit underutilized. Is it fair to assume that we're being a bit conservative in our guidance that if some of the pipeline comes through, we can grow a bit faster? Is that how we should read it? Because otherwise, we are investing more than what we're guiding for in terms of growth. So just trying to connect the two and make a better understanding. Thank you. So Madhav, I think what we are guiding you is a three to four year period kind of a growth rate. The investment period for any asset to become productive is 18 to 24 months before they actually become productive, even to do 1% utilization. And then at that point in time, you start utilizing the asset. So there is obviously some bit of underutilization that is factored, and that's kind of the nature of the industry. Unfortunately, that's how the industry works. If a customer does not see a facility up and running, a product is at a phase II, let's say, in clinical trial, it'll be very difficult as a partner to kind of go ahead and actually capture that business. So you're right about there is this phenomenon in the industry, and that's why we are saying our and then look at the global trends. Go back and look at WuXi. Go back and look at Pharmaron. If you look at anybody in the global sector, people who have been reasonably successful, considered very successful in the CRO, CDMO business, I think the global asset turns, the ROCE is all guided by factors of continuous investment. And if you do not invest in the shorter term, our overall growth rate over a long term will suffer. And that can, while we will be able to continue to show a better ROCE, we will not be able to show growth and revenue on a consistent basis. No, that makes sense, and given that if you just look at the, of course, we have only three years of data, we have a recently listed company. Seems like we have stepped up on the CapEx. If I look at FY 2022, FY 2023, FY 2024, the combined CapEx that we're doing this year is more than the last three years combined. So basically, is that just a qualitative sign that some of the molecules in the pipeline are a bit more late stage, which could help in growth over a two, three-year period? Is that how we should read it? I mean, is that how the company management is thinking as well? That is true. I think if you look at the commentary we had provided at the DRHP stage too, I think what we had stated is that there have been a lot of molecules that even got tech transferred from China, something that we also alluded to earlier in the conversation. A lot of these molecules are now reaching a phase where they are independently scaling up, and we are seeing capacity is getting utilized. I think what we are seeing from the way we look at the addition is not just the capitalization in the books, but more in terms of stating what we bought during the year. That is what I said, is INR 300 crore. The cash spend will be slightly lower, and that just depends on the timing and payment and everything else. But you're right. There are molecules that are scaling up, and these will kind of get to more efficiency as these molecules kind of become bigger by themselves. I think, Madhav, just adding a little bit, I think as we focus on commercial molecules, another trend which we have to look at, which is we are seeing very clearly, is a lot of the development assets of large pharma are moving to India, especially beyond phase I from China. So we're seeing a significant increase of traction over the last couple of quarters in the number of compounds coming in just from development stage, which all will need plant capacity. So we're seeing a new trend in terms of number of clinical candidates likely to come in as well. So there is definitely a lot healthier pipeline coming in because of the global strategy, which also will hopefully lead to better utilization of the CapEx as we move forward. But the only thing is we can't right now, that's why we say we're doing the detailed planning along with forecasts because we have a lot more data in front of us at this point. That's the best way I can answer it right now. Well, that makes a lot of sense. Just one last follow-up question was these molecules that kind of you're seeing in accelerated pipeline buildout is what I understand. Are more of these molecules versus the past more in the later stage of the development cycle, like maybe phase II, phase III, where we're seeing? Is that how we should understand? Actually, it's an interesting mix of other kinds. I think we have always seen late phase because typically, if you look at what used to happen, most of the molecules were developed in China, primarily as primary source, and they would come to India for secondary source. We used to see products generally later in the process. But what we are seeing is now today, we're seeing both late phase, which are coming from China, but we're seeing a lot more of the phase I to phase III assets coming in, which are moving much earlier than they did post-COVID. So we're seeing a big pipeline of compounds coming much earlier. And that might be relatively key to us because we are very strong in development. That's a big area we focused on. So, I think we are seeing a lot of traction on the development side as well, an early pipeline coming for pharma, which was not the case before. The primary supply now versus being secondary, is that a change as well which happened? It's hard to say at this point. It's too early to see where it's going to pan out. Thank you. Thank you. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Shikha Gupta from Quadria Capital. Please go ahead. Wanted to understand how is the biology services performing for the company? Sorry to interrupt, ma'am, your line is not very clear. I would request you to please use your handset. Ladies and gentlemen, we have lost the connection of the current participant. We will move on to the next participant. The next question is from the line of Alok Dalal from Jefferies India Private Limited. Please go ahead. Yes. Good afternoon, and thank you for taking my questions. So Krishna, just to understand, for the CDMO business for next year, the driver will be these existing products, or is there some new filing which has happened and you can see incremental growth from that? Alok, there are some products from the existing pipeline which are growing, but there are also a lot of other products also we're working on right now, which obviously will contribute. But existing ones will contribute a significant part of that growth from visibility we have at this point. Within those existing, is it that you become a preferred supplier now versus a secondary supplier earlier? I don't have much data on that. I don't want to comment on that at this point. But it's just based on the maturing of molecules and growth of the molecules more than anything else. Okay, and is there any molecule from the partner side which is expected to go off patent? Not next year, no. Okay. Second question is on the overseas side, Boston and Manchester, are they still a drag on profitability, or you've seen a change here? There has been a change. It's not probably at the most ideal point that we would like it to be, but there's been a very positive change in terms of how those businesses are functioning. So basically, they are no longer a drag on profitability when you look at your third quarter or nine-month number? Correct. Okay. Great. And Siva, would you have the sales mix for nine-month FY 2024? So same time last year, would you have the sales mix between CDMO and CRO? Give me a second. Alok, I don't have this ready made with me, but I can send that out to you. Okay. Okay. Thank you, Siva. I'll connect offline. Thank you. The next question is from the line of Rahil Shah from Crown Capital. Please go ahead. Hi, sir. Good evening. Can you hear me? Yes, sir. Yes. Hi. Sir, when you mentioned in the earlier statements that you envisage an EBITDA margin range of 28%-30%, so by when do you expect this starting to show on a P&L? Is it from next quarter? You meant from slowly progressing from next year onwards? I think a 28%-30% steady state that we are saying we'll get there in the next two to three years. That's our stated objective. So this 27% or so which you did in the third quarter of this year, is that also sustainable for the next few quarters? So here's the thing. I think the business inherently has some amount of seasonality. So quarters where your revenues are lower, your fixed cost kind of then impacts your operational efficiency and then EBITDA and profitability. So to that extent, the second half of the year will have a sustainable number that you are seeing today. And then the first half, as we get more commercial products and revenue becomes much more steady state and linear, will actually get us to that 28%-30%. That's why they're giving us a couple of years, two, three years that we're talking about. Okay. And on the revenue front, when you mentioned this 15%-20% CAGR, we can factor that in from the next year onwards, right, FY 2026? Any outlook for this closing year? I don't want to give you any specific guidance, but I think one of the participants asked us this question about the first half being lighter than the second half and Q4 being heavier than Q3. I would like to reiterate that without actually giving you specific guidance. Okay. No problem. Thank you and all the best. Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Radha Kothari from Archer Advisory. Please go ahead. Thank you for the opportunity and congratulations to the management for the impressive and good results. Sir, I just wanted to understand the employee cost. I was just going through your expense base, and the employee cost in your company is relatively very high as compared to the other listed CDMO peers. Is there any runoff or something has been preponed and that should go normalize going forward? Radha, very good question. I think if you look at the mix of the business that we have, 40% of our business is the CRO business and the 60% is CDMO. And we have a very big piece even within the CDMO that kind of works towards development. And in this particular segment of the business, employee is the biggest capital that we actually employ from running this business. And hence, employee costs of Sai cannot be directly compared to a pure-play CMO where employee costs are much lower. Now, having said that, we have invested over the last couple of years in terms of significantly enhancing our employee talent base. This was done during the period when we were actually looking at those 15 tech transfers to augment our overall commercial pipeline. What we believe over the next two, three years, this will help us get better leverage. So if you look at where we are in terms of margin, some of the improvements in margin that we are talking about will also come from the overall reduction of employee costs as a percentage of revenue. This is very helpful, sir. Just the whole industry, we are saying that in the recent past, we're very excited about the upcoming or the potential opportunities coming up in the space, especially in CDMO, and mainly more on GLP-1 space. Are you also in line of pursuing those things? Do we have the capability for that? And have you seen any inquiries or the requests coming for this? Look, I think it's fair to say that there's a big shift in GLP-1 across all pharma companies. Anybody in CDMO business will see traction in GLP-1 space. It could be peptides, it could be building blocks to peptides, or even pure small molecules. We do have clinical assets in that space, but I don't want to comment beyond that. Everybody will be involved in some form or fashion in the metabolic disease area. Just last question. Can you just provide the CapEx? Because I believe that being in the CDMO, the CapEx usually is very high. So what is the CapEx you have earmarked for this year? And if possible, you can show some light on the next year's CapEx as well. So for this year, I think overall, I think nine months, we've said we've incurred INR 300 crores. We'll probably get to another INR 100 crore-INR 125 crore for the remainder of the financial year. As far as fiscal 2026 is concerned, we are working through this process, and we will come back to you when our plans are finalized and we'll give more details to everyone. This would be funded through internal approvals? It would be funded by a combination of internal accruals and debt. Okay. Got it. Thank you very much, sir. Best of luck. Thank you. The next question is from the line of Rahul Jeewani from IIFL Securities Limited. Please go ahead. Yeah. Thanks for taking my question. So within the CDMO business, can you also talk about how do you see commercialization playing out for your phase III pipeline molecules? We had around eight to 10 products in phase III. So how many of those do you see getting commercialized from the next two to three-year period? And whatever your expectations are in terms of some of these phase III products. I think there are a couple of products that are actually getting commercial by the end of this financial year, at least based on the PDUFA date that the regulator has given them. There is one large molecule that we are working on today that is in phase III. We expect that to kind of get to fiscal 2026, 2027 timeframe in terms of commercialization. We have a few other molecules, Rahul, but I'm saying from an overall perspective, there's at least three, four molecules that we are seeing that will get commercialized over the next two, three-year period. Okay. And can you talk a bit more about this molecule in the large molecule category? Because historically, we have focused on the small molecule segment. So what kind of capabilities are we bringing to the table to scale up in the large molecule segment? I think he meant a large size of the market, not the peptide molecules, so I think we're just talking about a large opportunity. Oh, there's not large molecules. Sorry. Okay. Sure, sir. No worries. And sir, with respect to this CapEx, which we are undertaking of around INR 350 crore-INR 400 crore, apart from capacity expansion, what kind of incremental capabilities are we adding on to the business? So at the time of the RHP, we were also talking about having an amidites block, investing in oligonucleotides. So have you seen any traction in some of these niche capabilities or segments? Yeah. I was just going back to what we have stated is that there are four areas we're going to focus on. One is peptides, which we are having a significant traction with. Another one is amidase, which we are part of several commercial products on amidase. We are doing the GalNAc and also amidase. Another is ADCs. And the next one would be basically any kind of conjugation technologies, going for peptide conjugation, protein conjugation. These are all three areas of interest. We have various conversations with multiple customers and opportunities going forward. And that's what we're evaluating of what we're going to prioritize and what we're going to do. But we have traction in all three areas. But we'll prioritize it based on what is the most immediate need and what we can do most effectively. For all of these segments, we would have the requisite capacities in place to drive growth in some of these segments? We will have to. We are doing capacities on some scale, but we might have to enhance capacity depending on the demand situation coming up at this point. We have capabilities. Capacity will depend on the demand situation. But we have capabilities in all these areas. Sure, sir, and one last question from my end. Can you also talk about how has the scale-up been with respect to the dedicated project which we had with the Schrödinger on the CRO side? Thank you. It's going very well. We've expanded that collaboration. I will leave it at that. But it's going well and it's expanded. Okay. So you had around 75 scientists dedicated to that project. So have we increased the number of scientists if you can talk on that? I don't think I'm at liberty to share how much it grew, but it has grown. Okay. Sure, sir. Thank you. Thank you, sir. Thank you. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants that you may press star and one to ask a question. The next follow-up question is from the line of Alankar Garude from Kotak Institutional Equities. Please go ahead. Yeah. Thank you for the opportunity again. So if I look at our presentation, you have mentioned 31 commercial molecules in the current portfolio. Now, if I remember correctly, that number used to be 38 molecules. Can you highlight the reason for this lower number in the current presentation? It's 38 products going to 31 molecules. So those couple might have two intermediates in there. Okay. Understood. The other one is, can you comment about the pricing of FTEs? There have been reports over the last one year about China being more aggressive. Anything which we have seen at our end, or you continue to see the pricing being more or less stable? China has been more aggressive. There's no question about it. They price more aggressively, but we have not dropped pricing. In fact, we continue to grow at the 2%-3% increase annually for most customers, and we're sticking to our pricing at this point. Understood, sir. Yeah, that's it from my side. Thank you. Thank you. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants that you may press star and one to ask a question. As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments. Thank you, everyone, for the call and for all your questions. We remain committed to providing long-term shareholder value, and if you have any specific questions, I think appreciate asking us any questions now, or we would talk to you again in the next call. And just kind of echoing Siva's comments, we actually feel very good about the business. A lot of opportunities are coming our way. We continue to see business momentum, and we will keep you in the loop as we kind of evolve and look forward to it. Any questions, feel free to reach out to us. Thank you. On behalf of Sai Life Sciences, that concludes this conference. Thank you for joining us, and you may now disconnect your line.