Ladies and gentlemen, good day and welcome to Syngene International's fourth quarter and full year ended March 2022 financial results conference call. As a reminder, all participant 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Neha Shroff from EY. Thank you and over to you, ma'am. Good afternoon, everyone. Thank you for joining us on this call to discuss Syngene's Q4 and FY 2022 financial and business performance. From the management side, we have Mr. Jonathan Hunt, MD and Chief Executive Officer, Mr. Sibaji Biswas, Chief Financial Officer, and Dr. Mahesh Bhalgat, Chief Operating Officer. Post opening remarks from the management side, we will open the line for Q&A, and we will be happy to answer any questions you may have. Before we begin, I would like to caution that comments made during this conference call today will contain certain forward-looking statements and must be viewed in relation to the risk pertaining to the business. The safe harbor clause indicated in the investor presentation also applies to this conference call. The replay of this call will be available for the next few days and the transcript will be subsequently made available. With this, I will hand it over to Mr. Jonathan Hunt for his opening remarks. Thank you, and over to you, sir. Okay. Thank you, and good afternoon, everybody. Thanks for joining us on the call today to discuss Syngene's fourth quarter and full year results. Let me start with an overview, the fourth quarter financial and business highlights, and then I'll summarize the full year financials, then hand over to Sibaji to give you a more detailed account of the numbers and maybe talk you through some guidance for the year ahead. Syngene's fourth quarter revenue from operations grew by 15% over the corresponding quarter last year, and I was delighted to see the total revenue in the quarter cross $100 million. It's the first time it's hit that mark. As you know, there are some elements of seasonality to our quarterly performance, and the fourth quarter is often the largest of the year. That said, the growth is nicely balanced, driven by solid delivery across all four of our divisions. Development services had a particularly strong quarter that caught up on projects that were deferred from the previous quarter due to supply chain delays and other COVID-related disruption, in addition to good underlying organic growth. EBITDA for the quarter was up 13% to INR 365 crore, while profit after tax before exceptional items was up 7% year-on-year at INR 148 crore. Profit growth was depressed a little by a higher effective tax rate in the quarter compared to last year. You'll recall we mentioned over the last few quarters that we expected a rise in the effective tax rate driven by the expiry of some of the historical tax benefits that we've enjoyed on a number of our facilities that are covered under the SEZ tax benefit. Turning to business highlights for the quarter. Our research businesses, that's discovery services and the dedicated centers, delivered very solid sustained growth. We're seeing good demand in the marketplace for chemistry and biology as many of our Western clients come out of the pandemic and are getting back into their offices. Our integrated drug discovery platform, SynVent, continues to gain traction, proving to be an attractive proposition in the marketplace. Although this approach is still relatively new, I'm delighted by the progress in its first full year. We have 15 integrated drug discovery projects up and running with clients. This gives us, I think, a solid foundation for the year ahead. In manufacturing services, biologics manufacturing continued to make progress, and I think the team's done an excellent job in the year overcoming supply chain challenges stemming from long lead times of some raw materials due to COVID. Again, we're seeing good demand in the marketplace for biologics manufacturing, though the lead time to deal conclusion is a little bit longer than is the normal, say, in our research services businesses. During the quarter, we continued to work with clients on diagnostics, treatments, and vaccines related to the coronavirus. While we retain the voluntary license for Remdesivir, we are committed to continue to manufacture this product as long as the pandemic persists. We've not seen much demand in the fourth quarter. Clearly, how the pandemic evolves through FY 2023 is not possible to know. We'll take a conservative approach to forecasting COVID-related revenue. The intention there is to keep you updated each quarter of the year ahead. In recent weeks, global markets have started to open up for travel, in-person scientific and sales events, which provide the best opportunity for us to engage directly with clients, and they're starting to pick up. I'd expect this to lead to an increase in our sales and marketing activity in the year and consequently an increase in our overall sales and marketing expenditure. Let me now spend a few moments reflecting on the full year. We're pleased with the performance for the full year. On the financial side, we reported revenue from operations growth of 19% to INR 2,604 crore. Profit before taxes in the mid-teens that translated to a profit after tax growth of 10% year-over-year. Of course, with the higher tax rate, none of the taxes at work in there. These results are ahead of our original full year guidance and came in towards the top end of the upgrading guidance range that we gave you last quarter. I'll let Sibaji talk a bit more about that in a moment. As we hopefully start to leave the pandemic behind us, I'm gonna take a moment just to reflect on the last two years. I'm proud of our achievements for a number of reasons. Firstly, Syngene's strong financial fundamentals and business continuity planning delivered a very reliable service to our customers, and this in turn delivered sustained growth. Secondly, this performance allowed us to create more than 1,000 new jobs, continuing to invest in new infrastructure and capabilities. Thirdly, we continue to win new customers in addition to our existing collaborations, and I'm proud that Syngene's continued to operate at near normal levels throughout the pandemic. For many clients, we continue to take their science forward when their own laboratories were shut. Finally, we continue to build capability and capacity to support our growth strategy. In the research business, we upgraded technology capabilities across platforms, therapeutic areas. We've concluded phase three of the expansion for our Hyderabad facility with lab capacity for over 200 scientists. That brings our total number in Hyderabad to around 600. This center will meet the needs of the next phase of growth, and we're already planning a further expansion in FY 2023. In development services, we expect the injectable fill-finish facility to be completed in the first quarter of FY 2023, and that will bring a new capability to our formulation business. We also expanded our biologics manufacturing capacity. The growing demands for biologic manufacturing have encouraged us to continue to build capacity year on year. For small molecules, the facility in Bangalore is making good progress towards the required regulatory approvals. As these investments hit their stride in the years to come, we expect to see a gradual rebalancing between our research businesses, discovery services, and dedicated centers in the development and manufacturing side of the business, with manufacturing starting to take a more prominent role in the company. In conclusion, I think Syngene's well-positioned to meet the positive demand that we're seeing around the world. Barring any adverse impact due to COVID-19 here or in our client markets, we see the outlook as a positive one. Overall, in terms of guidance for FY 2023, we had to take a conservative assumption about no further contribution from Remdesivir, and we expect to deliver revenue growth in the mid-teens with an EBITDA margin of around 30%, single-digit PAT growth. With that, let me hand over to Sibaji. Thank you, Jonathan, and a very good afternoon to you all. I'm happy to take you through our results for the fourth quarter and the full year ended thirty-first of March 2022. I'll also talk about the guidance for financial year 2023 and our outlook for the future as it stands today. As we look back, the last two financial years reaffirmed the significance of resilience in the business. Our ability to continue our operation through a combination of prudent management, disciplined implementation of COVID appropriate protocols in our campuses, proactive supply chain management by advancing purchases and securing supplies, helped us mitigate the pandemic impact on our operations. In a challenging year, we grew our revenues by 19%, maintained margins above 30%, increased our net cash position, and ended up with a strong balance sheet. With a healthy demand environment, we believe this provides a good platform to step up our investment, to take advantage of our good momentum in the market and strengthen the business over the next few years. As Jonathan mentioned, a strong finish in quarter four enabled us deliver financials for the full year at the higher end of the upgraded guidance that I gave in the last quarter. Let me start by analyzing the fourth quarter first. Revenues from operations for the fourth quarter grew by 15% versus the same quarter in the previous year. This growth is on back of a strong fourth quarter in FY 2021, when we also dealt with an accumulation of clients' projects from the previous quarters. This year, much of the credit is due to a particular strong performance from the development services division. We are encouraged to see sustained growth in the research business as we upgraded our technology capabilities across platforms and therapeutic areas. As Jonathan mentioned, we are continuing to expand our footprint in Hyderabad to ensure that we have the level key capacity to absorb future growth. The manufacturing plant in Bangalore is expected to be in a position to trigger key market and regulatory approvals in the next 12-18 months. As you will remember, we have always described this plant as a long-term asset which will provide a full return on investment once it has a proven regulatory track record and can attract a wider scope of projects. Moving to EBITDA performance. The reported EBITDA margin for the quarter was at 34.3%, broadly at the same level as compared to the previous year of 34.5%. The expenditure on raw material increased by 390 basis points. As explained in our last call, this increase is partially attributable to change in mix with more early-stage manufacturing projects. The increase in cost is also attributable to price inflation on certain key raw materials. Employment costs reduced 5% year-on-year due to a special bonus provision that we had made in the quarter four last year to reward our staff for their efforts during the peak pandemic period. In addition, like many other companies, we have seen some increase in staff attrition, which has resulted in lower retirement benefit accrual during the quarter. With good forward planning, our ability to hire kept pace with the increase in staff turnover, which ensured that we were able to remain fully staffed to deliver client projects without any delays. Adjusting for these factors, underlying staff costs increased by 9% year-on-year for the quarter, in line with increase in number of employees. Other expenses, which comprises of selling expenses, IT costs, maintenance expenditures, and other general overheads are up by 24% from INR 89 crores in quarter four FY 2021 to INR 111 crores in the current quarter. Our continued investment in increasing physical capabilities, expansion of commercial activities and the return to international travel led to an increase in other expenses during the quarter. We are also seeing the impact of higher inflation, which is putting pressure on costs, and we expect to see this trend continue somewhat into FY 2023. Moving to hedge gains. The hedge rate for the 12 months was INR 77 per US dollar against a spot rate of INR 75.5 per US dollar, and this delivered a neat improvement in margins by 50 basis points. Overall profit before tax growth was at 14%, broadly in line with the total revenue growth. We kept our belt tight in the whole of pandemic period to ensure that operating leverage remained intact. As you'll see in the titles later, this is set to change somewhat in FY 2023 as we come out of the pandemic with increased confidence to invest in an accelerating growth in the coming year. Turning to tax. As mentioned in the previous calls, FY 2021 had a one-time tax reversal after a favorable court order, which reduced the effective tax rate of FY 2021 to 12%. The effective tax rate for FY 2022 was around 18%, and this increase of effective tax rate provided a headwind for the PAT growth. Due to this one-time tax reversal in FY 2021, our year-on-year PAT growth for the quarter stands at 7% although our underlying growth in profitability remained much stronger, broadly tracking the top line growth. Now let me proactively address one question I often get in my discussions. Over the past decade, Syngene's business has expanded both in size and diversity. A decade ago, the company was mainly a research services company. We now offer a growing range of services and solutions including integrated drug discovery, development and manufacturing solutions for both small and large molecules. Today, we have a well-established position in the contract research market and a strong emerging presence in the contract development and manufacturing services. This is reflected in our business portfolio, where a decade ago, 80% of our revenue came from the research business. Despite the strong and consistent growth in research services, the share of research business now is 66% of revenue, indicating a visible shift in Syngene's revenue mix towards development and manufacturing. While we are relatively new in the drug development and manufacturing businesses, we have seen encouraging results. As we scale up into commercial scale manufacturing for both small and large molecules, we expect the share of business from the services to further increase. FY 2022 laid the foundation, and we see FY 2023 as an important year as manufacturing takes a larger role in driving future growth. Let me now take some time to explain the full year performance of the company. Overall revenue from operations grew 19% year-on-year for FY 2022. This growth in revenue from operations was driven by solid performances from all business divisions. Discovery services grew by 24%, driven by good traction across new and existing clients and the added momentum from the integrated drug discovery portfolio that Jonathan mentioned. In the dedicated centers, revenue grew in double digits in FY 2022. The renewal for five years of the contract with Amgen, together with the 10-year contract extension signed with BMS in FY 2021, provides a good visibility on future of these facilities. The development and manufacturing services grew by 21% year-on-year. In development services, we were able to strengthen our technical capabilities in process development for complex chemistry and extend our capabilities in oligonucleotide polymers and highly potent APIs. These have helped to build client confidence on scale-up manufacturing for clinical supplies and repeat orders. In manufacturing services, we have been investing in biologics, adding key capabilities in process development and scaling up for clinical and commercial scale manufacturing. We expanded the manufacturing capability through commissioning a microbial facility and added capacity in mammalian cell manufacturing facilities. While supply chain challenges and long lead times constrained the biologics growth in FY 2022, we expect things to improve in FY 2023 and expect biologics to contribute an increasing share of revenues going forward. The growth reported in manufacturing services included the manufacturing of Remdesivir during the year. As Jonathan mentioned, we do not know how the pandemic will play out in the future. However, we are prepared to manufacture the product as long as the pandemic persists, but we don't expect it to play any key role in our financials in the current year. Now moving to margins. The EBITDA margin for FY 2022 was at 31.9% compared to 32.7% in the prior year. The expenditure on raw materials increased from 23.4% of revenues to 28.2% due to a shift in the mix of our business towards manufacturing, driven by early-stage development projects, the manufacturing of Remdesivir, and acceleration of biologics manufacturing in the later part of the year. The increase in raw material cost was offset by other cost elements, which increased less than the revenue growth. Employment cost increased by INR 58 crore, an increase of over 9% to INR 718 crore as compared to INR 660 crore in the same period last year. The increase was in line with headcount additions and the salary increment during the year. As I mentioned a few minutes back, the increase was offset by year-on-year reduction related to a special bonus paid at the end of FY 2021 and due to lower accruals of retirement benefits in FY 2022. Coming to other costs, which consists of selling expenses, IT costs, maintenance expenditures, and other general overheads. This declined from 12.7% of the revenue in FY 2021 to 12.5% in FY 2022, driven by effective management of discretionary costs despite inflationary pressures. As the global markets open up for travel and other business activities resume their pre-pandemic levels, we expect some of these costs to increase, as is already visible in quarter four. Now moving to currency and the impact of our currency hedges. The company recorded an exchange gain of INR 55 crore for the full year versus a gain of INR 17 crore in the last year. This reflects the difference between our forward rate versus the prevailing spot rate. As I mentioned earlier, the hedge rate was INR 77 per US dollar as against the spot rate of INR 75 per US dollar during the year. In summary, for the full year, EBITDA for the year was at INR 849 crore versus INR 736 crore in the previous year, an increase of 15%. Depreciation for the year increased by 13% in line with the fixed asset additions. I'll cover CapEx in a bit. Overall, our profit before tax increased nineteen percent year-on-year, which is higher than the upgraded guidance we had given in quarter three. Profit after tax before exceptional items increased 10% year-on-year to INR 420 crores, exceeding the single-digit PAT growth guidance given earlier. The effective tax rate for the year, as I mentioned, was around 18% compared to 12% in the previous year. As mentioned in my earlier part of the commentary, the one-time tax reversal in FY 2021 due to payment tax position benefited the effective tax rate of FY 2021. There are two other factors which are also contributing with increasing effective tax rate. There is a gradual increase in the tax rate as some of our units move out of SEZ tax benefit period, and also an increasing share of business is coming from locations not enjoying SEZ benefits. Adjusted for this tax rate, our underlying PAT growth would be very much in line with the PBT growth during the year. Now let us move to some of the other items such as CapEx and cash flow. Investment during the year was INR 621 crores, approximately $80 million, and this included capital projects under progress and capitalization of lease rentals from long-term lease arrangements. This is in line with the updated guidance provided last year. Total assets capitalized during the year was around INR 512 crores, approximately $68 million. Out of the total $80 million, we invested approximately 70% in the research business, while we added laboratory capacity in Hyderabad in two phases and expanded facilities in Bangalore as part of the contractual commitment for dedicated centers. Around 10% was invested in development services, mainly in completing the clinical scale fill finish facility of our formulation operating unit. Another 10% was invested in the manufacturing business, mainly for the capacity addition of our fourth reactor in biologics, as well as completing the microbial development and manufacturing facilities. The remaining investments were in common assets, including the added power grid capacity, which is commonly used by all divisions. Moving to balance sheet status. Our balance sheet position is healthy, and we have a strong liquidity position. While our inventory levels have increased to INR 179 crore from INR 60 crore at the beginning of the financial year, this was by design to ensure that there is no disruption in client deliveries due to supply chain delays and to compensate for increased lead time from OEMs in case of biologics. We expect to continue high levels of inventory for large part of FY 2023 in view of continuing disruptions in the global supply chain. Our net cash balance increased from INR 647 crore as of March 2021 to INR 732 crore as of March 2022, driven by increase in cash profits. This completes my commentary on the quarter and full year performance. I will now move to financial year 2023 guidance and outlook for the year ahead. We expect revenue in financial year 2023 to grow in the mid-teens. This is after taking into account of the base effect of Remdesivir in FY 2022, which helped the revenue growth. This will mostly play out in the first two quarters of FY 2023. The underlying business growth is expected to be higher. This is obviously under the assumption that there is no more pandemic-related disruption and the evolving geopolitical context does not create any unexpected changes in market access and supply chain. With the positive demand environment we see at FY 2020 as a year to sharpen execution across all parameters to capture the business opportunities. This will require investment in talent, facilities, and other services, and we plan to incrementally invest to put Syngene on a strong growth path for the future. Operating investments in FY 2023 will focus on building new scientific capabilities, IT and digitization initiatives, and continuing to strengthen our commercial activities by expanding our presence in client locations in the US, Europe, and other key markets. This will lead to additional cost in the P&L with a clear objective of accelerating growth in the coming years. While these investments will put pressure on margins during the course of the year, the operating leverage from improved performance from the development and manufacturing business will provide a balancing factor, and we therefore expect EBITDA margins to be around 30%. This is close to 200 basis points dilution compared to FY 2022, and we see this as a required step-up investment to accelerate our growth into the future years. With improved growth trajectory, we expect better operating leverage from FY 2024. The effective tax rate, which was around 18% in FY 2022, will gradually increase as we move some out of SEZ and expansion happens outside of current SEZ units. For modeling purposes, please build an increase in tax over the next few years, reaching up to 25% level. We expect FY 2023 effective tax rate to go up by 200-300 basis points. Here I'll give you a modeling input. While the effective tax rate is going up, we have MAT credit balance of INR 173 crore, which will be utilized over the next few years to enable us and this will enable us to maintain the cash outgo for income tax at the MAT level. Due to increase in tax, we expect to see some dilution of PAT margin, and we expect PAT growth in FY 2023 to be in single digits. CapEx is expected to be around $100 million in FY 2023, with the bulk of CapEx investment focused on adding biologics manufacturing capacity, laboratory space for future expansion of the research business, and capability addition across our service lines. Our investment in infrastructure have closely followed demand to date. Boosted by a strong demand environment, this year we expect to get ahead of the demand curve and create some extra capacity to ensure that we don't lose business due to lack of infrastructure at our end. Having covered the overall guidance for FY 2023, I would like to set expectations for the first quarter. You will recollect that quarter one in FY 2022 was a big quarter, where growth was driven by a couple of factors. Clients restarted projects that were put on hold in the previous year due to pandemic and also due to the manufacturing of Remdesivir. As a result, we posted last year first quarter a 41% revenue growth. At present, with the pandemic waning and the benefits accrued from Remdesivir in the first quarter last year is not expected to repeat again in the first quarter of this year. Hence, you may see a year-on-year decline in revenue in the first quarter. This will also likely depress the profit line for the first quarter. However, our full-year guidance takes account of this impact of quarter one, both on revenue and profitability, and we still expect to grow at mid-teens% for the full year. This indicates that for the remaining nine months, our respective growth rate will be higher, which you can model at your end. With this, I'll conclude my commentary on the quarterly and annual performance for FY 2022 and the future outlook and guidance for FY 2023. We can now open the floor for questions. Thank you very much, sir. 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 Alankar Garude from Kotak Institutional Equities. Please go ahead. Hi. Good afternoon, everyone. So my first question is, given the strong demand environment on the biologics side, where are we in terms of biologics manufacturing capacity? You mentioned about doing some CapEx in FY 2023 pertaining to biologics, but maybe if you could just highlight, where are we in terms of liters of capacity right now? What is the number you are looking forward to in FY 2023? That would be helpful. I have a follow-up on this. I'll just maybe come back after your response. Well, can give me the follow-up question first, and then we can have a think about it. Sure. The follow-up is broadly, would you say, that in terms of progress in this business, is it trending in line with your revenue and profitability assumptions, which we had in our mind, when we started this business about four to five years back? No, I think it's a little bit behind where I would have liked it to have been, but I think two years of a pandemic has slowed most things down. I wouldn't particularly put any great importance in a retrospective comment. I think where we are today is exactly where I'd like to be. Rising demand signals in the market, spare capacity, good capability, and I think if you parse through the comments that we've made on the call and in the guidance, you can see that we're clearly sending a direction of travel, which is, I think, our manufacturing businesses starting in FY 2023. Going into FY 2024 will become increasingly visible and be a driver of growth. We always wanted a twin-engine plane rather than a single-engined. There's nothing wrong with the performance of the research services business. It's grown beautifully over many, many years. It continues to add value to its clients. I think now is about the time that we'll start to see the manufacturing divisions, whether it's biologics or small molecules growing, led by biologics. We'll start to pick up some of that slack and help us build momentum. It'll be through FY 2023. I think there's a subtle comment in the guidance which suggests that FY 2024 will show increased growth and the beginnings of operating leverage. If you parse the English and turn it into Excel, I think that gives you something to model. Sure. That's helpful. My second question is more on the investments which you are planning in FY 2023. Just checking, we had some plans of expanding our international sales force over the last six to seven quarters. Where are we on that? This further investments which you're talking about in FY 2023 would it be basically a continuation of that, and then of course more investments in some of the other areas which are outlined in the presentation? Should we take that more as a continuation? Okay. What is the- You should. I think your question. I'm happy to give you further comment. I think your question's right. We have done some increase in investment in sales and marketing. Certainly, you know, take a look at things like our website. Go and have a look at some of the digital assets, some of the new channels, digital channels that we've put in. That's gone from not really being there three or four years ago to some quite sophisticated digital marketing. That's one of the areas that we've invested in. We now do a regular series of sort of client outreaches, digitally enabled scientific lectures, really good ways of connecting and showcasing our capabilities and our science. Add a little bit of in headcount. We're also gonna add more in the year ahead. It's competitively sensitive, so I'm not gonna give you numbers, but you will see the impact on the P&L this year, which is why we gave you such clear guidance on where we see the EBITDA margin for the year. That's going into a whole range of things. To your question, continued commercial expansion is one of them. I think as the world comes out of the pandemic, there's an opportunity to catch that wave of rising demand. I'd much rather invest and give a clear message to you that margins are gonna be a little bit suppressed this year than not invest and miss the wave. It's much more around business growth foundations in 2023 becoming operating leverage and growth in 2024 and beyond. There's a strategic thought behind those investments. Sure. That's helpful, Jonathan. Thanks and all the best. Thank you. Thank you. The next question is from the line of Prakash Agarwal from Axis Capital. Please go ahead. Yeah. Hi, good afternoon. Thanks for the opportunity. My question is on the gross margin side, cost of goods sold. We have seen some spike there. What is the, you know, the main reason behind this being service company? What is the near-term outlook? Are we continuing to see a higher cost of goods sold on this? Yeah. Super. I'm sure Sibaji Biswas will give you a comment, as he's collecting his thoughts. We are principally a services company, but of course, remember, unusually for us because of the pandemic over the last year, we have in fact also been a product company. Not core to our business, but we have been making and distributing Remdesivir as part of our response and our contribution to the sort of, fight against COVID-19. That may well be a clue to why some element of our P&L has picked up more operating and raw materials costs. Sibaji Biswas, over to you. Yeah. Thanks, Jonathan. Prakash, I kind of highlighted this in my commentary, but I'll try and give an explanation now. As I said, there are few factors that impacted raw material costs. It moved up by 3% of revenue year-on-year. One of them, as Jonathan just mentioned, Remdesivir. In one of the earlier calls, I remember I gave a clear understanding to everybody that Remdesivir raw material cost is almost 55%-60% of the final revenue. That definitely impacted in the early part of the year. Also what happened is that our project mix changed, and this can happen from one year to another year. As you do more early stage projects, the raw material cost as a percentage of revenue is higher, and as they move forward towards more mature stage, that goes down. This is also playing along with another factor, is the increasing of manufacturing and development revenue as a percentage in our revenue mix. There are multiple factors, but over a period of time, we'll see this stabilize. Actually, I expect FY 2023 to be very similar to FY 2022 because, based on our understanding, we're going to see a stable pattern of raw material cost as a percentage of revenue. Sir, question was more from. That's. Q4 perspective. Yeah, partly sir- Yeah ... because question was more from Q4 where there was no Remdesivir sales. Okay. And there is a, uh- Okay. Afterward update. Yeah. That's true, Prakash, but we mentioned that one of the biggest drivers of Q4 revenue has been development services and clinical manufacturing under development services. That also has a high raw material cost attached to it. Again, it's a function of the revenue mix in a particular quarter. Fair enough. Just to call out. Thank you. What would have been the Remdesivir sales for the year? We have given you an understanding of what the year-on-year manufacturing growth, and as you would see that is more than what we have seen in the past. Please go and see, calculate that. We do not give EPS yet to that level, but it will get to the manufacturing growth that has been disclosed. Okay, great. Thanks for that. Lastly, on the Mangalore facility. I hear that you have said operating leverage kicking in from fiscal 2024. Is that the key reason why, you know, that leverage comes in? Or are you talking about from the base business perspective? What's the update on the Mangalore side, I mean, especially from the U.S. supply perspective? Yeah, no update on the Mangalore side. Same guidance we've given four consecutive quarters. It's got a regulatory pathway. We're making good progress on that. I think what's the timing? 12 to- 12-18 months. Yeah. 12-18 months from now is the point where we would expect a major regulatory approval. Downstream of that is when you should start to see that plant become, you know, an attractive supply point for global clients. The operating leverage I was alluding to in FY 2023 clearly isn't linked to Mangalore, so it must be linked to something else. On the manufacturing side, that leads you very clearly to biologics. We're seeing good demand signals in the market. We'd be delighted to update you on the progress of that through the year. I think the guidance gives you quite a clear suggestion that both revenue growth rates and margins start to improve beyond FY 2023s. I think FY 2023s are pretty good, you know, perfectly good top-line growth. Our margin structure is, looks very well compared to many of our competitors around the world. Okay, great. Thank you and all the best. Thank you. Thank you. The next question is from the line of Tarang from Old Bridge Capital. Please go ahead. Hi. Hi, everyone. Thank you for the opportunity. Three questions from my side. Jonathan, if you could, you know, give us a sense on your IDD platform SynVent. I mean, how many of your peers offer a proposition like SynVent and some sense on how you're differentiating your. That's number one. Number two, you know, you've spoken about continued investments looking at the growth outlook. How should we see this? Because, you know, I would personally think that the quantum would not be materially high, in contrast to how the investment cycle has taken place over the last five years, given how most of the manufacturing capacities, you know, remain to be utilized. The third, given the demand environment, would it be fair to presume that in FY 2023, your ex-Remdes business could post high teens, you know, early 20 growth, early 20% growth on a year-on-year basis? Those are three questions from me. Thank you. Yeah, super question. I'll take the first and the third. I'm looking at my colleagues and seeing which one's volunteering for the middle one. Let's do them in reverse order. The last one is a simple yes. Your question was, if you could take Remdesivir or take the pandemic out of our business, what would the year-over-year growth look like? Would it be ahead of the guidance that we've given you? Clearly, it would. I'm not gonna give you a point estimate, but I wouldn't demur or debate it with your number of being in, you know, above 20 and into that sort of range. Yeah, the organic underlying growth, the outlook is pretty strong. Now, going to your first question, IDD. Platform is one of those words that sort of means something to one person and can confuse everybody else. Don't think of it as a platform in the sense of a particular proprietary technology or a piece of kit. It is a combination of a whole bunch of things that we can do brought together into a service offering. Fundamentally, SynVent is most attractive to companies where what they really want is a scientific equal, a partner that can drug hunt with them and for them, and has all of the capabilities to take that from initial scientific idea through ideation into finding a molecule, confirming the validity of a target, all the way into the IND stage and getting a drug into human testing for the first time. That's essentially what we're trying to do and are doing with SynVent. It's got some particular resonance at the moment because of our scale, because of our capability, because of the operating cost advantage we have. If you're a biotech company in the U.S. at the moment that's got funding, but is looking forward at the cash burn rate and thinking about how do I make my funding last so much longer, given that for many there's a nervousness about refinancing, it's a fantastic opportunity because in most cases, if we did the work within Syngene, within the SynVent capability, rather than did that work in our clients' labs, say, in the U.S. or Europe, we can make their cash burn just that much lower, and that gives them real strategic visibility. That would be a practical application given the, you know, current conversations you hear in the U.S. biotech community about financing, refinancing. Another group that's particularly interesting, there are just a lot of companies formed now with an asset-light, science-heavy strategy. Their backers, whether they're venture capital firms or whoever, don't particularly want to put money into the investment to buy infrastructure, buildings, but they do want to really move the science as quickly as they can. That sort of partnership with us fits really nicely. We've got all the scale, all the capability, and all of the infrastructure anybody would need. that, you know, they're buying it by the day, by the hour, philosophically, rather than having to spend the first year of founding a new company building, signing leases, and all of those things. It can increase the speed. It gets you to decision points that much quicker if you're a start-up biotech, and it relieves your owners of all of the concerns if the science doesn't work out, are we left with an overhang of infrastructure, people, and you know, plants and equipment because we just have to give that back in. Did that give you enough? 'Cause that was quite a long answer on IDD, but I hope I can try and convey what we're trying to do. Oh, you asked also does anybody else do it. Yeah, I would say I'd point to a company like Evotec in Europe. I think they've got very sophisticated capabilities. I've got no shame in saying that they got there first and were ahead of us, but I do think we've closed an awful lot of the capability gap. There's plenty of space in the market for more than one. I think some of the Chinese companies do it. I'm less certain that any of our local competitors are at that level of sophistication yet. Got it. Thanks. Tarang, for the second one? Yes. Yeah. I think there was one more question which was on the continued investment. You know, as I told you, FY 2022, we spent around $80 million. Close to 70% of that went into research, business expansion. We expect to spend a similar level of CapEx, close to 50% of our $100 million guidance on research. In research, we are very clear about our criteria for spending. I have always guided that we look for an asset turnover of 1x in 18-24 months. I firmly stand by that. We are seeing already that playing out in our business. We are seeing a strong demand environment with us. We'll keep on spending that kind of money with that 18 months to 24 months, 1x turnover perspective going forward. Of the remaining 50%, large part of that will go towards biologics, as I said. You know, capacity for manufacturing doesn't come up in a year, so we are actually going to spend this money preparing ourselves for capacity creation in FY 2024 and beyond. This we are able to do because we are feeling a lot more confident as a leadership team on the potential of the biologics business. That's where a significant of the rest of the money is going to go. The rest will be on other expansion and creating digital infrastructure capabilities at ORN. That's broadly what it is, how the capital guidance is constituted of. Hope I answered your question. Thanks. Looking forward to how this business evolves. Thank you. Thank you. The next question is from the line of Harith Ahamed from Spark Capital Advisors. Please go ahead. Hi. Thanks for the opportunity. I was looking at the average employee costs for the business and it's been flat for the last couple of years. In fact, in FY 2022, there's been a decline over FY 2021. Any color that you can provide on this, while I see that the number of scientists count has increased by roughly 1,000 in the last couple of years, the average cost, the average overall employee cost has been flattish. Overall employee cost for the year is not flat-ish. If I'm not wrong, it increased by 20%. Average. Yeah. Per employee. Yeah. On an average, yeah. Essentially, I'll repeat what I pointed out. There are two factors to that. In FY 2021, we did give one-time bonus towards the end of the year for you know, for kind of compensating our employees for the challenges they had to go through during the pandemic period. That was one-off expenditure in FY 2021. We don't have it in FY 2022. Plus, you know, the retirement benefits that we have in our balance sheet, which comes out of actual valuation, has also gone down. That benefited us in quarter four, and it's also playing out for the full year. These are the two broad explanations. The other things play out in the salary mix, so nothing to comment on. Are you able to share the percentage of revenues that we have under the FTE model versus the other engagement model that we have? Sorry, I'm not able to. It's a very bad line. If you're on a headset, if you could pick up, that would help. Just restate the question. Yeah, let me try again. Sorry about the bad network. I was asking how much of our revenues are from the FTE engagement model, and versus the other engagement model that we have with our clients. Oh, okay. We don't split out the numbers, but I'll give you a general sense of it. If you think about the business in four divisions, dedicated centers, discovery services, development, and then manufacturing, dedicated centers, everything's an FTE model, effectively. It's sort of the, you know, the definition of how it operates. If you look then at discovery services, the vast majority would be FTEs at the moment, but there is a sizable and growing FFS or fee for service element of it. Strategically, I don't really see a big difference between the two models. It just depends on how the client wants to engage. So I don't put too much importance on it. Development and manufacturing are principally FFS, fee for service businesses, because the nature of the unit of work is a project or a product or a batch. You're not really employing people to do specific things. You're buying a particular outcome. Can I have a, you know, particular piece of development work done? Can I have a clinical trial product made, or can I have an antibody discovered and developed and manufactured? Hopefully, that gives you a sense of it. Yeah, that's helpful. Last one, if I may. In one of your slides, you've listed customers from non-pharma segments like animal health and agrochem. How big is this piece, the non-pharma piece for us today, and how do we see this progressing? Good question. I don't have the specifics of how big it is, but to give you a sense of it, animal health is so close to human health for all intents and purposes scientifically. You need the fundamentally same capabilities, same infrastructure, same sort of scientific acumen. The only thing that's really changed is the end species that the product and the science is applied to, humans into a whole range of things. We've got, I think, one of the better, I'm reluctant to say market-leading positions in animal health. It's not an industry group that traditionally, and by traditionally, I'm looking over the long term, five and 10 years, has done a lot of outsourcing. I do think structurally, and again, if it's an industry you've spent any time looking at, you'll know that many, many animal health companies were divisions within big pharma companies a decade or so ago. As those sort of consortium type companies have disaggregated, they've been spun out, and there are many, many companies on their own. That then has prompted them to think about where do they tap into innovation? How can they tap into innovation more globally? If you think about it, they've gone from being part of a great big scientific organization, and now they stand alone. That, I think, is creating opportunity. I'm not gonna give you a percentage of our business split, but I do think it's an interesting area that's adjacent to what we do, and it's one that we do pretty well in. Some of the others, there are many other industries that we connect through. Consumer goods companies. We've done interesting work in helping people with polymers that may form the next generation of contact lenses. That's a scientific problem that we can address. We've done work on chemicals that have been used in the aviation industry. Coatings are used in car manufacturing. So there's lots of things. Wherever you need a high science approach to a deeply complex scientific problem, we may well be able to help. But those are peripheral to our core business, which is deep science in the human space. Thank you very much, sir. That's helpful. Thank you. Thank you. The next question is from the line of Abhishek Sharma from Jefferies. Please go ahead. Yeah. Hi. Thanks for taking my questions. I hope I'm audible. Yes. You are. Please proceed. Thanks. Just wanted some more color on biologics manufacturing. You said this will add revenues in fiscal 2023. Currently, here, what are we engaged in? Is it non-GMP manufacturing for developed markets like intermediates, or this is trial supplies, or is this for emerging markets? By when do you expect FDA inspection for your biologics facility? Two separate questions. If you'd like to, Mahesh, do you wanna give a comment on that? Yeah, let me take that one. In terms of, you know, what are we doing with utilization of our current capacity, the maximum amount of work that we're doing is with regards to providing clinical supplies. This is GMP material that we are manufacturing that goes into clinical trials. In terms of utilization, we are utilizing both our mammalian capacity for that and our microbial capacity for that. Our mammalian, of course, is going to be used specifically to produce the monoclonal antibodies, and that's the highest level of demand that we have. That's also the maximum capacity that we have. As for your question around U.S. FDA, you know, I'm not going to comment on the specific timing of that because as you know, the way the U.S. FDA approval process works is based on a client who wants to produce commercial material that then triggers a U.S. FDA inspection. That's actually something that will be based on getting to that particular milestone. Structurally, I mean, you'll understand it from the business. As a service provider, we don't control that. It always sits with the clients decide their regulatory strategy and their regulatory timelines. I don't think it'd be appropriate for us to comment. That is clear. Second thing. Sorry, you had an additional comment or should I go ahead? No, go ahead. Okay. Sure. Thanks. Second thing is jump in trial supplies that we saw in Q4. Was this related to biologics or was this on the small molecule side? What? Clinical trial supplies. The question was, did we see a step up in clinical trial supplies in the fourth quarter, and this was it small molecules or biologics? Yeah. It's from a small molecule development space. Well, as I mentioned, progress in the execution picked up towards the end of the year, and we'll see more of biologics coming through the next year. This was from a small molecule space. Got it. Last one, if I may. What is the current bioreactor capacity on the biologic side, and where would you have this by end of FY 2023? Thanks. Super question. You'll forgive me for not answering it. Sufficient would be the answer to meet the rising demand that we see. That one is commercially competitively sensitive, so I'm not particularly keen to put that in the public domain. Yeah. I mean, you used to disclose the bioreactor capacity till last quarter, right? I mean, 10 KL is what I remember from our last quarterly call. Has there been an increase on that or- I'm not sure we did. I'm not sure we did comment on that, but it still wouldn't change the fact that I'm not about to give you the installed capacity base. Happy to guide you through the year as we see progress and then we can pick that up on future quarters. Sure. Okay. Thank you. Thank you. Ladies and gentlemen, in the interest of time, may we request you to limit your questions to one per participant. For any follow-up, may we request you to rejoin the queue. The next question is from the line of Shrikant Akolkar from Asian Markets Securities. Please go ahead. Yeah. Thanks for taking my question. Just one question on biologics manufacturing. If you can call out the capacity utilization in the fourth quarter and maybe in FY 2022. Is that not just the last question repackaged? Yeah, that will really help us to understand where we are going in FY 2023 also. I know. I think there's enough in our guidance of revenue growth, top line mid-teens, dropping down to single digit PAT with an outlook for FY 2024 of improved revenue growth compared to FY 2023 and operating leverage. Okay. I'll join back the queue. Thank you. Thank you. Thank you. The next question is from the line of Rohan Vora from Purnartha Investment Advisers. Please go ahead. Hello. Thank you for the opportunity. My first question was in regards to the CapEx planned in FY 2023 of $100 million. I remember you just stated that 50% of it is going to go towards the research side. I would like to have the breakdown of the remaining 50% between development and manufacturing businesses. I think we said 30% was going into the manufacturing biologics side. Yeah. Okay. The balance would be development? Sorry. Yeah. Small molecule development. It would be spread across. It. If we had a miscellaneous category, it would be that. Fifty percent of the $100 million into research services type business, 30% into biologics, the remaining 20% spread across the business, but covering so many things, we wouldn't break them all down. Okay. Thank you. One last question was in regards to the EBITDA guidance that we have. It would be 30% EBITDA margin for FY 2023. I would just like to know if, you know, some of it is coming from GP margin dilution as well. Just repeat the question. Do we also expect so as we have 30% EBITDA margin guidance for FY 2023, so does some of it come down from GP margin dilution as well? As for the margin dilution, we said only that much part. GP means gross profit you are talking about? Yeah. Gross profit margin dilution. Do we expect gross profit margin dilution in FY 2023? As I said, I expect the raw material cost to remain very similar to FY 2023, 2022. If you are calculating gross profit as revenue less raw materials, the answer is no. Depends on what you are adding before gross profit. There's EBITDA margin dilution which is going to come from, you know, as we mentioned, you know, increased travel, increased activity resuming to pre-pandemic level and our willingness to invest in commercial execution and other areas of technology operation. Okay. Thank you so much. Okay. Thank you. Thank you. Thank you. Ladies and gentlemen, due to time constraint, that was the last question. I now hand the conference over to Ms. Neha Shroff for our closing comments. Over to you, ma'am. Thank you, everyone, for joining today's call. Hope we have answered your questions. If there are any further queries, please do get in touch with our team and we will be happy to get back to you. Have a good day, and thank you once again. Thank you. Ladies and gentlemen, on behalf of Syngene International, that concludes this conference call. We thank you all for joining us, and you may now disconnect your lines.