Ladies and gentlemen, good day and welcome to Sai Life Sciences Limited Q3 FY 2026 earnings call. As a reminder, all participants' lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Diwakar Pingle. Thank you, and over to you. Thank you, Hina. 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 objectives that could cause future results performance or achievements to differ significantly from what we have expressed or implied by such forward-looking statements. Please note that we have made the results and the same also available on the company's website. In case you have not received the same, please write to us, and we'll 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 Krishna Kanumuri, Managing Director and Chief Executive Officer, and Siva Chittor, Whole-time Director and Chief Financial Officer. To start the call with a brief overview of the quarter gone past, Krishna will give a basic update about the business. Siva will follow it up with a financial highlight, and then we'll open it up to Q&A session. That said, let me hand the floor over to Krishna. Over to you, Krishna. Good afternoon, everyone, and thank you for joining the Sai Life Sciences earnings call. I'm happy to share with you my reflections on the quarter. The global macroenvironment continues to be supportive of our industry, with India increasingly positioned as a preferred destination for pharmaceutical outsourcing. We are seeing a meaningful rise in strategic conversations with large global pharma innovators, driven by their focus on supply chain resilience, access to specialized capabilities, and long-term partnerships. Against this backdrop, we remain confident that the underlying growth environment for our business remains healthy. Our business performance continues to track ahead of plan. In our CRO segment, we are seeing sustained growth momentum led by a clear focus on expanding engagements with large pharma customers. In parallel, we are strengthening our discovery engine to target your industries in next-generation technologies that accelerate speed and productivity, such as AI-based retrosynthesis tools, advanced photochemical and electrochemical platforms, and partnerships with emerging technology innovators. These capabilities are helping us deliver higher scientific value while shortening discovery timelines. Our CDMO business continues to perform well, with over 90% of revenues coming from large pharma customers. During the year, we added 7 molecules to our late-phase and commercial pipeline, further broadening our portfolio. We continue to believe that a larger and more diversified pool of commercial molecules enhances business resilience, helping offset volume variability in individual products that inherently outside the control of the CRDMO. In the development segment, we are seeing strong momentum as global customers increasingly transition to R&D FTEs and developing activities in India. The shift has resulted in meaningful uptick in revenues this year and is creating a steady pipeline downstream opportunities, which translate to our manufacturing portfolio. Over time, this trend is expected to not only support continuous pipeline additions but also improve our overall material margin profile. Our capital expenditure programs remain firmly on track. The first phase of R&D expansion at our recently acquired site in Hyderabad, Unit 8, is scheduled to commission in Q4 FY 2026 with over 200 fume hoods for discovery chemistry. The civil infrastructure for R&D building for our process facility is on track and will be commissioned by September 26, doubling our total Process R&D capacity. Our peptide process development and pilot phases are also targeted for September 26 to significantly expand both our discovery and development peptide capabilities up to pilot scale. Additionally, our OEB laboratories for process development are scheduled to be completed October 26. This is in addition to what is already operational to significantly enhance our ADC capabilities both for discovery and general supplies. Our Bidar manufacturing capacity expansion is also on track. We intend to add 225 KL by June and another 225 KL by the first quarter of FY 2027, almost increasing our capacity by 70% in manufacturing. Our Phase 1 of animal health is targeted to be completed by March 27, enabling validation activities to commence our API production for veterinary products at this point. As we scale these opportunities, our ability to execute will be anchored on three priorities: having the right talent, maintaining the right cost structure, and driving efficiency through automation. We are actively augmenting our talent base through both near-term and long-term initiatives. Along this, we have launched a transformation program focused on improving productivity and operating efficiency. In parallel, we are working with an external consulting firm to define an AI-first roadmap for Sai Life Sciences. As an outcome of this program, we expect increasing automation to allow our scientists to spend more time on high-value science while enhancing consistency and scalability across operations. Taken together, these efforts reinforce our confidence in the trajectory of the business, our ability to deliver sustainable growth, deepen customer partnerships, and create long-term value for all stakeholders. This I'll hand over to Siva to walk you through the finances. Thank you, Krishna, and good afternoon to everyone on the call. I will now walk you through the financial performance for the third quarter and nine months ended fiscal 2026. Sai Life Sciences delivered another quarter of strong financial performance with growth that outpaced broader industry trends. This was supported by a robust commercial pipeline, healthy volume growth across businesses, and continued focus on operational discipline. For the quarter ended Q3 FY 2026, total revenues stood at INR 556 crore, representing a Y-o-Y increase of 27% compared to INR 440 crore in the same quarter last year. Growth was broad-based across the portfolio, with the CDMO business contributing approximately 65% of the revenues and the CRO business contributing the remaining 35%. On a year-on-year basis, CDMO revenues grew by around 31%, while the CRO revenues increased by approximately 19%. EBITDA for Q3 fiscal 2026 was INR 191 crores, an increase of about 54% year-on-year, translating to an EBITDA margin of 34%. Profit after tax for the quarter was INR 100 crores, up 86% year-on-year. Turning to the nine-month performance, revenues for nine months fiscal 2026 were INR 1,590 crores, representing a growth of around 43% year-on-year compared to INR 1,115 crores in nine months fiscal 2025. EBITDA for the period stood at INR 472 crores, up 79% year-on-year, with margins expanding to around 30% from approximately 24% in the prior year. This expansion is mainly due to operating leverage on employee costs of approximately 450 bps and material margin of 100 bps. With nine-month fiscal 2026 EBITDA at 30%, we are on course to achieving our stated goal of 28%-30% EBITDA ahead of schedule. We expect to sustain this margin range of 28%-30% to enable us to maximize growth while managing growth-related challenges and optimizing margin. Profit after tax for the nine-month period was INR 245 crores, reflecting a year-on-year increase of 199%. From an investment perspective, our capital expenditure continues to progress in line with plan and remains closely aligned with long-term customer requirements. As of date, we have invested approximately INR 405 crores towards our fiscal 2026 capital commitment. All expansion projects are progressing as scheduled, positioning well to meet future demands. Current capacity utilization stands at around 60%, providing adequate headroom for growth even ahead of new capacities coming on stream. To conclude, the third quarter and nine-month results reflect healthy revenue growth, strong EBITDA expansion with meaningful margin accretion, and robust improvement in profitability. Supported by solid demand, discipline, execution and CapEx programs progressing as planned, we remain confident in sustaining positive growth momentum and creating long-term value for all stakeholders. With that, we can now open the floor for questions. Thank you. 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 handset 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. I just wanted to go back to this provision that you talked about. So last year, in the March quarter, we had a INR 34 crore provision. Is it the same one that we've sort of done a reversal of INR 16 crore in this quarter? If so, then should we expect the remaining part to get reversed in the next quarter? Yes, you're correct, Binay. So we will do this as we progress in our production on our commercial molecule. And Siva, in the last call, you also talked about a double-digit consultancy charge in second quarter, which again, we'll not repeat. So is this the reason that when you give the forward guidance, you are still in that 28%-30% margin range because these provisions benefit of this year, the consultancy project dropping this year? Those benefits will not be there in OpEx next year, right? Yes, but we are also working on additional things. I think if you look at the presentation, we talked about working on another assignment to get AI enablement from a business perspective. So that also will help us. This is an investment we will make as we start this current quarter and head into the next financial year. So you will have some bits of this, but we are still with the 28%-30% by then after including all of this. In the opening remark, I think if I heard it correctly, you guys talked about seven new commercial molecules this quarter. Did I hear it correctly? We talked about seven late-stage and commercial molecules this financial year, is what we are aiming for. The nine months. In the nine months. Okay. Okay. Earlier, we talked about that the business will have 18%-20% revenue CAGR over a three-year period or so. Now, this year, we'll end up being somewhere in the 30% CAGR or so. So should we look at that, the growth of some of the earlier future years is pulled forward into this year? How to think about it? As we mentioned last quarter, Binay, there is nothing that we have pulled forward from the prior quarter. This is a broad-based guidance of 15%-20%, not specific to a specific year, but we are very confident and bullish about where the business is today. Great. Great. Thanks, team. I'll come back in the queue. Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question comes from the line of Dr. Kartik Bhat from Bajaj Life. Please go ahead. Thank you for the opportunity, and congratulations on a good set of numbers. I just wanted to understand, as I see, CDMO part is increasing faster than the CRO part in terms of percentage of sales and revenue. So do we have any specific target in mind that this would be our ideal percentage of revenue coming from CDMO and CRO? Kartik, thank you. I think we've answered this in the last quarters too. We believe the broad mix between the CDMO and the CRO business remains around the 65-35 and 50-40. In one particular year, the CDMO can grow faster. In another year, the CRO could grow faster. So that's the variability we can make. But broadly, at this point in time, we believe they will remain within this range. Okay. And my second question is on the molecules. Out of all the molecules we have, can you provide us the split between peptides, ADCs, or small molecules? How is it there? How many ADCs are there? We don't provide breakdowns of molecules. I think all that we provide is the number of molecules. Kartik has given data restrictions. Okay. Sure. Thank you. That's it for me, Binay. Thank you. A reminder to all the participants that 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 comes from the line of Rahul Jeewani from IIFL Securities Limited. Please go ahead. Yeah. Hi, sir. Thanks for taking my question. Sir, can you talk about what led to such a strong gross margin expansion for us during the quarter? So both on a Y-o-Y and a quarter-on-quarter basis, we saw almost a 300-400 basis point gross margin expansion. So what led to this, and what kind of a sustainable number you expect going forward? So Rahul, you're an expert on the CDMO business. You know that this business kind of changes and becomes variable quarter-on-quarter. So it's very difficult to kind of the single answer that I will give you is business mix and product mix. That is not going to give you a lot of details, right? But if you look at the 9-month FY 2025 to 2026, the biggest operating leverage actually came from employee costs. We've mentioned this. I mean, we've been saying this consistently over the last 4, 5 quarters, and even during the roadshows. What we have been communicating is that as our business grows, we have upfronted certain R&D-related people costs both here and outside of the country. And that is something that has come through. The nine-month number shows a 4.5% leverage. We've also seen a 1% improvement on the material margin. This is a product mix. This is also on account of the cost debt fee that we've been talking about in the last couple of calls. Something that kind of increases your margins and the material margin there is higher. So that then kind of contributes to an average margin, which then becomes increasingly good. That's what Krishna also stated in his last speech. Sure, sir. So on the employee side, where you have seen an operating leverage playing out this year, so you expect the same will continue going into next year as well? We would broadly think so. There could be periods where we will take decisions on adding employees slightly ahead as we expand. But the broader trend is to get to the 28%-30%. I don't look at it line by line, but what we would commit to the market is a sustainable 28%-30%. Sure, sir. And sir, in your opening comments, you indicated that obviously, you have been outperforming the broader trends in terms of the CDMO industry. So many of your peers are, let's say, have got impacted because of inventory destocking in some of their molecules. Now, this year has been very strong for Sai. And if I look at the presentation, the presentation talks about you sustaining growth momentum going into next year as well. So can you provide some color in terms of how you are looking at growth for FY 2027? And is there something in the base business which worries you, which could see destocking maybe one or two years down the line? So I think the reason why we are confident as we get into the next year, Rahul. I think the business at this point in time, what we are seeing is a fair bit of conversations that are strategic in nature that we had mentioned both in this call and in the prior calls. We've mentioned this multiple times in our discussions. Our belief is that CDMOs, as an entity, do not control stocking or destocking. We probably get to know it at the time when it actually happens, and kind of a lot of time, it gets blindsided. And this is the nature of the business, and that's the fact of the CDMO business. The only way that we can kind of protect ourselves or minimize impacts against destocking is to make sure that you have a slightly larger portfolio, and we are not concentrated on 1 or 2 products that then can impact our revenue. That's the whole objective. That's how our portfolio is slightly more broader. If you look at this year, we began adding we've added close to 7 products this year. There are 3 of them gone to commercial. 6 of them are part of the late-stage. The objective is to kind of mitigate the risk. I do not have a specific today, if you ask me. We don't have any specific visibility of any product that I know is destocking as of today. But do I know, can something destock 2 years or one and a half years later, as you asked? Honestly, we don't know. We don't get that kind of visibility all the time. Our best bet is to kind of protect ourselves by adding more late-phase in commercial and also keep adding the early-phase products from customers. That way, I have a steady inflow into my late-phase. Sure, sir. So of these 7 molecules which you have added, let's say, to late and commercial phase this year, you said 3 are commercial and 4 are phase three. Correct. Sure, sir. And just one question before I join back the queue. In the past, you have indicated the product concentration for the CDMO business. So I think our top product was somewhere around 10%-12% of the CDMO revenue. So are we broadly on those or along those lines for nine months of FY 2026 as well? Our top customer will probably be around 12% or so of our total revenue. Okay. So including both the CDMO and the CRO business, you mean? Correct. Okay. Sure, sir. Sure, sir. I will join back this. Thank you, sir. The year has not ended, so give or take 1% or 2%, right? Sure, sir. Okay. Thank you. A reminder to all the participants that 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 comes from the line of Alankar Garude from Kotak Institutional Equities. Please go ahead. Hi. Good afternoon, everyone, and thank you for the opportunity. Congrats to the management on a strong set of numbers. Sir, more of a continuation of the previous question as well. Based on the visibility you have currently, will growth over the next couple of years be more led by new commercial molecules, or do you expect the three new molecules that you have commercialized in FY 2026 to continue to contribute to growth over the next couple of years? We expect the new molecules that we have added to contribute to our commercial growth. We also believe that there are some molecules within our existing portfolio we are supplying that can probably increase in terms of revenues. In any sense you can provide on, I mean, what would be the larger contributor? Would it be the newer molecules apart from the existing ones which you mentioned would grow? But will we see a slightly higher contribution to growth from the newer ones or the existing ones? So if I have to look at it mathematically, listen, obviously, if a product has reached a certain level, the growth from there is just going to be incremental, whereas the new ones are zero and then starting to go from there. So it's obviously, percentage-wise, it's going to grow higher. But there is enough juice left within certain molecules in our existing portfolio too that can kind of grow. Okay. I was looking at this more from an absolute standpoint, just trying to understand what should be the growth breakup between or incremental revenue breakup between the newer molecules and the existing ones. Alankar, we don't have that much detail at this point in time. Maybe we can give you a color at a later date as we've seen it. At this point in time, some of them have just entered. We've even started in certain cases. We've not even started the first commercial supply yet. It's kind of very difficult. Also, certain times, first order can be higher. Second order can be a little lower. All of these nuances are there. We don't have a very specific number exactly because we don't have that much data from our partners at this time. Fair enough, sir. The second question is, if I look at these three commercial projects and the four which are in the late stage, can you call out in how many of these we would be the primary supplier? I think probably two of the three we will be the primary supplier. Understood. Okay. That's good to know, sir. I mean, the third question is, if you can list down the top three reasons helping us win more commercial contracts. The reason for asking this is the pace has significantly increased over the last couple of years of us winning commercial contracts and that too pretty meaningful ones. So I mean, Krishna spoke about the outsourcing team, and you have been talking about it for some time now. But apart from that, anything else which you would like to highlight which is helping us win more commercial contracts? Look, I think Alankar is if you look at the win rate here, it's not based on one thing, right? These are customers we've engaged for the last 15 years. We've made investments working with them to build standards they need. They're working with the same teams over a long period of time, both from a senior management standpoint and for a long period of time. They've tested us. So these are really coming from years of trust-building exercise. And when you're coming to India, you choose a partner. Obviously, you want to pick one you have a longer history with. If you look at most other CDMOs we're competing with, they're relatively new in this space. So I think the factors are longer engagement, even the breadth of relationships, right, doing across the board. If somebody's looking for pure commercial, there are multiple options, but if it's in development plus commercial, we're probably ahead of the curve. So I think it's really a combination of everything we've done over the years, which are fairly unique to us at this point, which is giving us a disproportionate win rate. There's no one trick saying this is the difference. It's really about 20 years of hard work building this trust with these customers. Mr. Krishna. One final follow-up. In view of the higher win rates, are you increasingly inclined to invest in CapEx slightly ahead of time? We are definitely looking at expansion in CapEx, but we're also balancing out based on the visibility we're seeing from customers. Also, one thing we are doing a little different. We are not building, I would call, capacity ahead of technology. What we're seeing is most of the areas we see, the technology is changing pretty rapidly. So I think we are taking a technology-first approach to our capacity addition rather than just adding capacity for the sake of adding capacity. So I think we want to make sure that our capacity is first-class, as you see, five years down the road, as opposed to having capacity win price immediately. We want to really be able to be the company which is not redundant five years down the road. And we're not chasing the short win. We're chasing the long-term growth. Got it. That's helpful. Thank you and all the best. Thank you. Thank you. The next question comes from the line of Amey Chalke from JM Financial. Please go ahead. Thank you for taking my questions. I have one question on there is a line we have mentioned on the CapEx, Animal Health Phase 1 expansion, which is expected. Is this a block for one customer, or has the contract already signed? And how much we have spent for this unit? To be very candid, this is a unit we had actually built for another purpose, but that product did not succeed. So we pivoted that to animal health facility. And we work with pretty much all animal health companies right now. And so I think we will be working with multiple customers on it, right, it's not just for one customer. Sure. And how much we have spent for this? I think the current investment, Amey, is less than INR 50 crores at this time on that site. But we will have a phased expansion plan. There'll be some additional CapEx. We will probably invest closer on INR 70-75 crores at the next phase. Sure. In last quarter, we had said that we had added one Oligo product. Is it possible to give some color when the supply could start for this product? We don't talk about products. All that we can tell you is it's under validation. Once the validation is completed, we will start commercial supply. Sure, sure. And the last question I have on the CRO momentum. We continue to show 20%+ growth in CRO while the biotech funding still remains weak, and many of the peers are not showing this kind of growth. So what is working in our favor here? So I mean, I think the one factor that has kind of helped us is I think our growth with the large pharma that has happened over the last 4-5 years. Our pharma component of our CRO business was probably negligible, maybe if I would look at 5 years ago. And that increase is what is kind of helping us grow from even over the last 2-3 years. Sure. And you expect this growth to maintain despite the funding remaining weak? Look, I think if you look at the trajectory also, right, you have to understand that we have gone through a significant investment cycle at CDMO business which we're a lot of the work we do is integrated programs as well. So it's just not pure chemistry. So I think a lot of our businesses come from biology, DMPK, etc. Plus, the pharma pipeline is big enough, which is coming to India. It'll probably give you enough cover for the next couple of years. I don't think any meaningful new company formation in biotech is going to start at least for the next 18, 24 months. But I think there's enough growth in this space, large pharma looking at India. So I think we are reasonably well covered for the next couple of years as the biotech funding takes up. Sure. That's quite helpful. Just last thing, if I can squeeze in. We have said the 28%-30% margin guidance we have achieved already. But is there any scope further to improve these margins? And also, what will drive it? What are the areas which can help us to improve margins going ahead? I think the way we look at it, and we've actually put this in the presentation too, Amey, I think our objective is to sustain the 28%-30% while maximizing growth. I would probably use that as the model because growth in large pharma comes with open book and transparent pricing. But that can also give us a larger volume and a faster growth trajectory. We would optimize margins. Can there be additional? Yes, there will be. Our internal targets are generally higher than the street targets. And there is always a push to kind of do this on a day-in, day-out basis. But I would leave the 28%-30% as the margin from a street perspective while we internally work to do higher work to be more intact. Yeah. Look, I think just one thing I also want to put in perspective. I know everybody talks about margin, but the reality is you have to understand that pretty much almost every CDMO player, CRO player is subscale compared to China. We're operating at 28%-30% margin. And at the end of the day, you will have to compete with companies of that scale, which will involve significant investment both in people and cost. So if you over-optimize for margin, you potentially will be leaving market share and never be able to scale and compete in the long term. So I think we have to be careful what we wish for. We believe right now, India should be working on getting market share with reasonable return as opposed to trying to over-optimize the margin but continue to keep working on optimizing your costs, not to mention. But we really have to continue to invest is more so what we're talking about at this point. So, what I understand, so that largely, we have optimized the margins. So there is no low-hanging fruit in terms of where we can get the incremental cost. Let me be clear. I'm not saying there's no scope for improvement. What I'm saying is that there's always a preference to continue to invest and grow and increase your market share as well. So that investment could be different than the technologies, which have a long ramp-up time. It could be higher-quality people, which will take time to settle in. So the question is, you have to optimize between growth and margin there. So I'm just trying to kind of be pragmatic about giving an approach rather than just saying that there's no scope for cost improvement. As we have committed over the last few quarters, right, we will continue to operate with a financial discipline both in terms of operating expenditure and capital expenditure. And that's something that we will continue to do. If you ask me, would you maximize margin or optimize your growth overall, I would probably optimize my growth where I maximize my growth potential and optimize my margin and to stay steady around the 28%-30%. But But grow faster, that would then get us into a larger position. That's essentially what we are saying. We are not saying that there is no levers in the business that is not touched. We are not saying that we've exhausted every possible margin option in the business. But what we are saying is that we would stay there. And as we kind of grow, as we enter into larger CapEx cycles, you will see periods where you will have growth-related challenges, which is utilization, upfront investments in people, technology, which will also need to get factored into your operating cost. That's why we are saying we'll sustain the 28%-30%. I hope we gave you a reasonable answer for this. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit yourselves to two questions. The next question comes from the line of Dhaval Khut from Jefferies. Please go ahead. Hi, sir. I wanted to get your comments on the oligonucleotide space. How do you view this space? Is it a niche capability to build new relationships and then continue to get typical small molecule contracts, or do you think it can become meaningful space in itself on the manufacturing side? I ask this question as most of the indications for oligo drugs are for rare ultra-rare disease, and the volumes are extremely low. So happy to know your thoughts. How do you view this space? I think your point is very valid. So if you look at the oligo space right now, there are very few molecules which are large-volume indication. But interestingly, if you look at the pipeline, early development pipeline, there's a lot of early development going on in terms of new programs in early development. So it's a very old field with few products that have gone commercial. But what we look at pipeline-wise right now is the number of molecules in development always have gone up very significantly. Where the volumes themselves might not be large, the complexity is fairly high. So from a revenue standpoint, they could be meaningful. From the volume standpoint, it might not be that high. But the revenue might be meaningful because of the complexity of the molecule. Does that answer your question? Yeah, yeah. Very helpful. And secondly, you are given sales contribution from new modalities. So any hierarchy among the four modalities that you have mentioned, and specifically, any area that you believe is most promising from the next 2-3 years' perspective based on customer demand and customer conversations that you are having? Yeah. Look, to be honest, if you have to go back in history, you always will have four or five things which are hot, which two will make it, two won't make it. But today, if you have to say which two are going to get very hot, it's very hard to say. But if you look at the history of the discovery sector, it's very hard to pinpoint and say, "This is definitely going to be the hottest thing four years down the road." It might be of these four, only one or two might be hot. Other two might just kind of go on the back burner. So it's very hard to predict at this point what it'll look like four years down the road. Very hard to predict. Okay. If I were to force you to make a guesstimate, which one of these would be? I'm not going to make a guess. I can't. I'm not an analyst. Okay, okay. Just one last one. How are pharma intermediates categorized right now? Are they part of the pharma industry, or will they be categorized as chemical imports, and there could be U.S. tariffs of 18% on them? Or is it part of Section 232, and whatever is the outcome of 232, that will be applicable for various intermediates that many of the CDMOs provide? So where is the categorization? I won't worry about categorization because pretty much all pharmas have exemptions from tariffs right now. Almost every pharma has negotiated with the government for reduced, actually no, tariffs on imports. Majority of them, and majority will. So I don't think that will be a factor in our industry. Those will be negotiated out by pharma sooner than later. Okay, okay. This is very helpful. Thank you. Thank you. The next question comes from the line of Manish Poddar from Invesco AMC. Please go ahead. Hello? Yes. Yeah, Manish. Yeah, yeah. Hi. I just have two questions. One is, if you could talk about the healthcare platform which you are wanting to do versus the earlier approach of working by products, if you could probably spend a couple of minutes to help us understand this platform approach which, let's say, global players adopt, where are we in the journey, and what is the thought process behind it? And let's say. Manish, sorry to interject you. We are not able to hear you clearly. Can you repeat your question, please? Yeah, yeah. So I'm just trying to understand. Let's say, I understand you're incrementally working on a platform approach on the healthcare side versus, let's say, earlier, having products as a product suite. I'm just trying to and this is the approach which a lot of global players adopt. So probably, if you can help me understand what is the broader thought process, and where are we in the journey to better appreciate how is the development for this vertical looking, let's say, from, let's say, a medium-term perspective, that'll be helpful. Thanks. As a service industry, we don't do any platform. If If you're a discovery player or a pharma, you can actually create a platform technology against which you can screen multiple different compounds or kind of get to different therapeutic areas. We don't do that. Our focus is to create ability in, let's say, 80% of the total broad chemistry ranges that kind of gives us the ability to kind of look at a wide spectrum of molecules that you can work with customers. There will always be one or two niche things, let's say, fermentation or whatever that we probably will not have. But the objective is to create capability across a wide spectrum. And that's really what we are focused on. That would be our chemistry platform. And then we add engineering capabilities along that to kind of make sure that we can take it up to the plant. That's really what we do. Okay. And just another one. Hello? Yes. Yeah, sorry. So just another one. I'm sure in the journey of Sai over the years, there would have been years when you would have done significantly well, and there would have been this inventory stocking, destocking, which we see in other players this fiscal year. You would have seen that in some of the years in the last 20, 25 years of existence. What are the measures which the company would have adopted in order to offset that, let's say, from our earlier experiences? If you can help us understand, let's say, two, three variables, that'll be useful. Thank you. And lastly in the comments. We have definitely seen years where we have seen destocking. I'm not going to say this was a few years ago. We have seen products that have undergone destocking, and we've been hit in those years. I think the lesson that we picked up from that scar was that try and keep your portfolio as broad as possible. We don't tend to get excited only if a molecule is $20 million or $50 million. We tend to get excited if a molecule is $5 million-$10 million because that's a reasonable price for, on average, to kind of work for. That also helps you or gives you an ability to quickly add additional molecules within the pipeline to kind of take care of ups and downs because there is no way a pharma services company like us controls the destocking. We get impacted by destocking when it gets announced. So that's the only thing that we can do, and that's what has been our focus. Okay. Got it. No, so because you effectively mentioned that the top customer is 12% and product diversification is at play, and there are new avenues of growth coming into play. So I agree with you. So got it. Thanks. Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question comes from the line of Nirvana Laha from Badrinath Holdings. Please go ahead. Hi. Thanks for the opportunity. I have a couple of questions. The first question is on your revenue recognition. Is it always the case that you recognize revenues after dispatch, or do you also have some take-or-pay kind of contracts where, as per the contract, you recognize revenues even if there are no dispatches? Revenue recognition is based on completion, not based on dispatches. A detailed revenue recognition policy is actually in our financial statements, and you would actually see how we recognize revenue. This is fairly in sync with the global practices and in concern with the IFRS and India's regulations. Sure. Just to sort of clarify, that means that there would be certain commitments or contracts from customers where revenue recognition would happen as part of the contract and not depending on dispatch, right? Yes. Typically, if you're comfortable sharing, what would the mix be out of 100% of these kind of arrangements? We would not share those details. Any contract that becomes eligible, there are certain regulations under India that allow you to recognize revenue on a completion basis. As long as a particular contract satisfies that criteria, then we will be able to recognize revenue. If a contract does not satisfy that criteria, then we will recognize revenue based on dispatches. Sure, sure. Understood. The payment would definitely be linked to dispatch in either case, or would the payment from the customer also sometimes get triggered upon the revenue recognition? In certain cases, it gets triggered by a different milestone other than dispatch. In certain cases, it gets triggered based on dispatch. Okay. That's helpful. Second of the seven molecules, the late-stage ones that you have added this year, could you highlight if you see blockbuster potential in any, or are all of them small? Just curious to understand. We don't look at blockbuster technically from a customer perspective. As long as the API is complex, even if a product is, let's say, $500 million, I may make more money than a $5 billion molecule where I'm doing two steps. So honestly, it does not matter whether the end product is a blockbuster. But broadly, we see at least a couple of products could have decent good run from a Sai revenue perspective. At least that is our read based on what we are hearing from industry sources. Mr. Nirvana, you may rejoin the queue for the follow-up question. The next question comes from the line of Yash Doshi from Unifi Capital Private Limited. Please go ahead. Yeah. Am I audible? Yes, sir, you are. Yeah. Congratulations on good self-explanation. I just had a question. Regarding this Biosecure Act, for the past one month and a half, are we seeing any customer additive for the existing commercialized molecules, like shifting from China to India as second source? So we've seen molecules shifting from China to India. We saw a fairly large transfer on the 2023-24 timeframe. If you actually look at our DRHP, we actually mentioned the number of molecules we've tech-transferred. A significant portion of the molecules that we tech-transferred during that phase was primarily a supply-source diversification. Outside of that, we see tactical movements. Even outside of just a Biosecure worry, I think customers always go for a couple of sources. If a customer already has a China source, they would probably look at an India or a European source to kind of complement that. Or if it's an India source for the first supplier, then they would probably look at a Chinese-European source. So there'll always be a supply chain tactical. And we continue to get opportunities on the tactical side too. We did a fair bit of movement around the 2023-2024 timeframe when there was this first transfer move. Okay. Regarding our facilities, which will be coming online next year, so do we see a ramp-up of those facilities in the near term, or it will basically depend on any customer's demand? I was asking this question. Yeah, you can continue. Please go ahead. Please go ahead. Yeah. I was asking this question in relation to your margins as well because I think in 2022-2023 phase also, I think we commercialized a facility. Then for the initial period, as the demand also was not good, the margins sucked it off a bit. So in that phase, we are adding significant capacity next year. So I was just asking, how will the ramp-up be? So the statement that I made with respect to sustaining the 28%-30% without saying I will grow, I had also suffixed it by saying that this will also take care of growth-related challenges, which could be cost inefficiencies that could get built on account of fronting people investments or operating expenditure investments. And our long-term goal continues to remain the 28%-30% same thing. While you were right in pointing out the fact that in 2022 or 2023, the margin profile had dropped, the fact is that for 2023, we've grown faster, or we've probably had one of the fastest growth in the sector primarily because we had upfronted certain investments. And the decision to invest or take an upfront expenditure on R&D or operating expenditure or even CapEx will be guided or will continue to be guided by longer-term factors and also visibility from our customers. It will not be a one-year decision. That's something that we are willing to take to grow the business longer term. Yeah. Just last question I can ask. Regarding the animal health business, I think a 2020 kind of facility is coming online. Since animal health, generally, what we are seeing is basically a larger size comes with a CDMO partner compared to a pharma product in general. So are we working on molecules in the R&D phase, and do we expect the orders to start? So once the facility gets commercialized, maybe in 2028, say 2028. I think the facility, so it's a little bit of slightly more technical and slightly long-winded, but I will say that we currently do certain products in that bucket. We've also mentioned, and I think Krishna mentioned in his speech that somewhere in 2027, we would start. We intend to validate a product as we complete the Phase 1 expansion from the site. It will probably take filing time before the product becomes commercial. At least that's really the indication at this time, and that's really what we are focusing on. We work with three out of the top five animal health companies, and we believe there are significant opportunities, particularly in the companion health space, which is what we are focused on. Understood. Thank you. Thank you. The next question comes from the line of Rahul Jeewani from IIFL Securities Limited. Please go ahead. Yes, sir. Thanks for the follow-up. So, sir, second half of this calendar year would be quite busy for us in terms of commercialization of several facilities. So we will have the Process R&D lab, the peptide lab, and then this 450 KL incremental capacity also coming in. So can you talk about in terms of how the discussions have been ongoing with customers in terms of ensuring that we hit, let's say, a steady-state kind of utilization for all this infrastructure which we are putting up? And particularly, if you can also talk about in terms of the discussions with the customers as far as the peptide space is concerned? Look, I think as far as capacity, let's say we're talking for ADCs. I think we have several pharma customers right now which we are doing a lot of discovery work with who want to expand with us. There are companies we are doing development work with, optimization of peptides, which we need capacity for. So I think there, we have a reasonable visibility in terms of both peptide expansion as well as the ADC expansion. The plant expansion also is based on the fact that we have several new molecules added in this pipeline. Plus, we also have several commercial discussions ongoing at this point also, which we feel fairly comfortable. We're going to need that capacity to come online to fill it up. Again, what timing? Is it going to be a quarter here, quarter there? When the product comes, it's there. But if it's not capacity building with, let's say, a 3-year visibility upfront, these are shorter windows if we think we can pull the capacity up. But it's not like real-time that the plant is ready, and you'll have something to go because but at least capacity coming online is based on relative visibility with conversations we're having with customers and with customers where we have active engagements going on. Or we have products already in development which will be Phase 2, potentially going to Phase 3, and we see that needing capacity going forward. They might fail. Then they might not make it. So there's not an easy answer, but it's based on an educated guess based on what we're seeing from a pipeline standpoint. Sure, sir. Beyond this 450 KL which we will add in FY 2027, do you think that for a year or two, we might go slightly slow in terms of ramping up this utilization before adding incremental capacity? Or with the visibility which you have right now, do you think that we might need to embark on another capacity expansion in FY 2028 itself? If we had mentioned, we already are starting expansion to a new site on both other sides of Hyderabad where we also are going to start implementing and hopefully have that up and running in the next 18-24 months. And we will need that capacity also coming online. Okay. So this is beyond the 450 KL which you are already adding? Correct. Okay. And have we drawn up plans in terms of what kind of capacity would we be putting up at this new plant? I give you very broad guidelines. There will be non-GMP capacity because a lot of customers want us to go faster early stage. So we will be setting up non-GMP capacity for actual development. There'll be significant peptide capacity based on forecasts from our pipeline and also additional GMP. It's going to be a mixed-use facility coming up. So it'll give us much more diversity of platforms than we have at this point. Okay. Sure, sir. And sir, just one bookkeeping question. You said that the remaining part of the INR 34 crore write-off which you had taken last year, so INR 18 crore, then you would reverse in fourth quarter of this fiscal year. What I said is we will reverse as we kind of get the recognition and the ability to reverse. We will do that. Okay. But not specifically in the fourth quarter. So as you go ahead, you will do that? Yes. As we go ahead, we'll do that. Okay. Sure, sir. Thank you. Thanks for answering my question. Sure. Thank you. Ladies and gentlemen, due to time constraint, we'll take the last question from Dhaval Khut from Jefferies. Please go ahead. Yeah. Hi, sir. Just one question. Wanted to know your comments on GLP-based product in our pipeline. Are they peptide-based, non-peptide-based? Are any of them in the clinical stage, like Phase 1, phase two? That will be very helpful. So, Dhaval, we don't comment on specific product pipeline. Other than two products that are launched, everything is in clinical pipeline only. So, and you know who are the two players who are commercial at this time on the product. So anybody who's working today on it is right now working on a product that's not commercial yet. I'll leave it at that. Yeah. Yeah. So can I interpret that some of them, the products that you are working, are in commercial beyond the discovery stage? So will that be the right interpretation? I will leave you to interpret, Dhaval. I will not comment further. Okay. Okay. No problem. That's it from my side. Thank you. Thanks, Dhaval. Thank you. I would now like to hand the conference over to management for closing remarks. Thanks, everyone, for the presence and taking time on the call. I hope we were able to provide you the right answers. If you have any specific questions that we have not answered, please reach out to us at investorrelations@sailife.com. Thank you. Thank you. Have a great day. Thank you. On behalf of Sai Life Sciences Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.