Ladies and gentlemen, good day, and welcome to Syngene International's second quarter ended September 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 Miss Avantika Mishra from EY. Thank you, and over to you. Thank you, Yashaswi, and good afternoon, everyone. Thank you for joining us on this call to discuss Syngene's Q2 FY23 financial and business performance. From the management side, we have Mr. Jonathan Hunt, M.D. 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'll 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 risks 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 now hand over the call to Mr. Jonathan Hunt. Thank you, and over to you, sir. Thank you, and thank you to those joining us on the call today to discuss Syngene's performance in the second quarter and first half of the year. I'll start by commenting on the headline numbers, then move to some of the operational and strategic highlights for the quarter, and for the year. Sibaji will provide a more detailed insight into the financials in his remarks. I think like all businesses, we're keeping a keen eye on the broader economic environment, including concerns over global economic growth, potential for ongoing slowdown, supply disruption, rising energy costs and geopolitics. I think despite those concerns, I really would reiterate that the second quarter and the first half of the year has been a positive demand environment for Syngene. We continue to see good demand in the main client markets of the U.S. and Europe. That's helped us deliver strong revenue growth and puts us on track to meet our guidance for the rest of the year. Looking at the specifics of the second quarter, the quarter was characterized by positive performances across all four divisions. Revenue from operations grew 26% to INR 768 crore over the corresponding quarter last year. Reported EBITDA was up 22% to INR 232 crore. Profit after tax, PAT, before an exceptional item was up 11% over the corresponding quarter to INR 102 crore. The exceptional item was a one-time downward adjustment of INR 25 crore in the second quarter of last year on account of the government's decision during that quarter to cap the services export incentive scheme, the SEIS scheme, for research and development services at a 5 crore cap for the financial year. The performance during the second quarter was robust and came on the back of a strong first quarter. You may recall that we upgraded our financial guidance for the year last quarter, and against this, we've delivered a first half in line with these higher expectations, and I think this positions us well for the full year. Just turning now to each of the operating divisions. Start with Discovery Services. Overall performance during the quarter for Discovery Services was good. We're seeing a healthy demand environment as clients continue to make up ground they lost during the pandemic, as well as bring new projects forward. This positive demand was most pronounced in Discovery Chemistry, where we saw some of the strongest demand we've seen in recent quarters. Our second campus in Hyderabad played an increasingly important role in Discovery Chemistry operations, now grown to over 600 scientists, and we've got more expansion plans there in Hyderabad. During the quarter of the proprietary integrated drug discovery platform, SynVent continued to gain traction. That portfolio currently stands at 18 integrated programs, and I think we continue to see good demand for that sort of fully integrated research approach. In dedicated centers, as part of the partnership with BMS, we've fully commissioned and now operationalized a new state-of-the-art translational medicine laboratory to help BMS, accelerate the discovery of new therapies. Growth in our development services business was predominantly from repeat orders from existing clients, as well as an increase in the number of collaborations with emerging biopharma companies. In the last two and a half years, while we've sustained the collaborations we have with 15 of the top 20 biopharma companies globally, our partnerships with clients in that small and medium-sized biotech sector continues to accelerate. Now just looking at the manufacturing side of the business over the past few years, I think we've made some important investments in establishing our biologics manufacturing capacity. This groundwork really paved the way for the 10-year agreement we signed with Zoetis in the first quarter, and that's to manufacture the drug substance for Librela, that's a monoclonal antibody for use in animal health. While lots of work is ongoing, the key progress indicators in the second quarter were the completion of the process performance qualification batches for commercial manufacturing and of course, the preparations for the expected regulatory inspections. Subject to the successful completion of the required regulatory audits, we anticipate that manufacturing of the drug substance is likely to begin in the fourth quarter of this financial year, and therefore, that means it becomes a factor for your modeling of revenue from the start of the next financial year. I'll leave it to Sibaji to comment further on that, if needed. Finally, just to preempt a question that comes up each quarter, our small molecule manufacturing facility in Mangalore is on track to obtain the key regulatory approvals around the mid of the next financial year. Beyond the divisional and operational performances, just a brief comment on CapEx. During the first half, we invested close to $30 million out of the total $100 million that we planned for the year. Half of that CapEx has gone into research services, 30% into biologics, and the remainder into common infrastructure, safety-related improvements, replacement of old equipment, et cetera, digitization. Those splits are a reasonable indicator of what we'd expect for the full year. Let me summarize before I hand over to Sibaji. We made good progress on our strategic priorities over the first half. We started the year with strong revenue momentum, and this has continued into the second quarter. Leaves us in a good position with our first half performance. The first quarter performance with underlying revenue from operations growth of around 32% prompted us to upgrade our guidance for the full year, and the performance of the second quarter puts us solidly on track to achieve that upgraded revenue guidance of high teens for the year. With that, let me hand over to Sibaji. Thank you, Jonathan, and a very good morning to all of you, or good afternoon to all of you. Let me start with revenue performance, then take you through margins, profitability and CapEx investments for the company. I'll give you a little color on the impact of currency as it benefited us in the quarter, and I'll also cover our current view on outlook for the full year FY 2023, which is both positive and is also reflective of the upgraded guidance given last quarter. With this context, I'll now cover the Q2 performance. Please note that you'll hear me referring to underlying performance in parts of my comments. Just to be clear, this is performance excluding the impact of Remdesivir manufacturing. We recorded high sales of Remdesivir during the first half of FY 2022, with most of it in the first quarter. As no Remdesivir sales have been recorded in the first half of FY 2023, we think it is helpful to exclude Remdesivir from both periods to illustrate the underlying performance of the ongoing business. As you heard from Jonathan, reported revenue from operations for the second quarter grew by 26% versus the same quarter last year. Underlying revenue growth, that is excluding Remdesivir, was stronger at around 31%, which we believe is a very good performance. As a reminder, the first quarter also delivered a strong underlying revenue growth of around 32%. At constant exchanges, our underlying growth for the quarter, net of Remdesivir, was around 22%. Irrespective of which measure of revenue growth is used, we see a very positive momentum in the business. I'll now move to EBITDA for the quarter. EBITDA from operations, that is excluding interest income for the quarter, came in at INR 217 crores compared to INR 177 crores in the same quarter last year. That's up by around 22%. The reported EBITDA margin for the quarter was at 29.6% versus 30.5% of last year, and the operating EBITDA margin, which is without other income, was at 28.2% for the quarter compared to 29.1% last year. The revenue for the quarter was hedged at INR 78 per US dollar. The depreciation of the rupee versus U.S. Dollar strengthened the top line without commensurate benefit on the bottom line because we book hedge losses as a part of expenses. Our margin guidance for the year was given at the hedged exchange rate. The optics of the EBITDA margin changed due to the average realized rate being around 80 rupees per U.S. dollar in the second quarter, which is reflected in the top line. Normalized for the revenue at the hedged rate for both the years, the operating EBITDA margin for the quarter was at 28.9% as compared to 28.6% in the same quarter last year. I'll now cover other cost line items within the P&L. Material costs for the quarter increased by 19% year-on-year. As a percentage of revenue from operations, it was at 25.9% compared to 27.5% last year. The last year being high due to raw materials for Remdesivir. The current material cost is below the 27% guidance shared previously, and this will move up to the guidance level with the increasing share of manufacturing in our revenue. During the quarter, the staff cost increased by 15% year-on-year and was at 28.4% of revenue from operations as compared to 31% in the second quarter of last year. The year-on-year increase is in line with the increase in headcount and reflects salary increases and changes in the mix of the employee base. Our direct cost, which primarily includes power and utility costs, increased 39% year-on-year and is now at 3.7% of the revenue from operations for the quarter compared to 3.4% for the corresponding period in the previous year. The increase is mainly on account of higher fuel prices for natural gas used for steam generation and high speed diesel used for power backup. In the current environment, we are seeing the benefit of our investments in renewable energy companies, which not only de-risks the energy supply, but also reduces our carbon emissions and consequently our impact on the environment. Despite an increase in consumption due to expansion of facilities and increasing power and fuel tariffs, these investments provide us a mechanism to control cost increases. Other expenses, which include travel, conveyance, repairs and maintenance, digitization, automation and selling expenses increased by 32% year-on-year. This increase is in line with expectations and guidance given at the beginning of the year. As we came out of pandemic restrictions from Q4 last year, global travel and sales execution activities have picked up nearing the pre-pandemic levels. This, along with other operating investments, including expansion of commercial teams, acceleration of digitalization and automation projects across the business, also led to higher costs on a year-on-year basis. Hedge losses during the quarter were INR 19 crore, reflecting the difference between average spot rate during the quarter to the hedge rate. This is compared to the hedge gain of INR 10 crore in quarter two of the previous year. Other income for the period increased from INR 12.9 crore to INR 15.4 crore, an increase of 20% on the back of increasing yields on investments and fixed deposits. Overall reported EBITDA for the quarter was up by 22% year-on-year to INR 232 crore compared to INR 190 crore for the same period last year. Underlying EBITDA growth broadly tracked the top line growth, reflecting the operating leverage in the business. Depreciation and amortization for the period were at INR 90 crores compared to INR 76 crores in the same period last year. This increase of 18% on a year-on-year basis is mainly owing to the new investments in the last 12 months. Our finance cost increased from INR 1.2 crores to INR 11.7 crores. Here we recognize the interest component on newly leased facilities as per the Accounting Standard Ind AS 16, in addition to increase in interest rate on borrowings and translation losses on foreign loans due to rupee depreciation. You should note that a large part of our loan is covered through interest rate swaps and hence does not get impacted by movement in interest rates, but is still impacted from the translation losses on the currency. Profit before tax increased by 15% year-on-year. The lower growth as compared to EBITDA and EBIT is on account of higher interest rates and currency translation losses. The effective tax rate for the quarter was about 21.5% compared to 18.5% during the same period last year. You'll remember that I previously told you that there will be a gradual increase in tax rate as some of our in-units come out of the excess tax benefit period and an increasing share of business is coming out, coming from locations not enjoying its rate benefits. Profit after tax before exceptional items stood at INR 102 crores as compared to INR 92 crores last year, and that's a growth of around 11%. Now moving to results for the half year. Revenue from operations grew by 17% including the impact of Remdesivir in the base. Underlying revenue growth was 32% excluding Remdesivir and on constant currency basis, underlying revenue growth for first half was at 23%. EBITDA for the period grew at 14% year-on-year and the underlying EBITDA from operations grew at 31%, in line with the underlying revenue growth, reflecting a strong first half of the year. Material costs adjusted for Remdesivir impact in the base tracked the revenue growth. Staff costs increased by 14% in line with headcount growth. Other direct costs and other expenses increased by 48% and 38% respectively, driven by inflationary pressures, resumption of activities post-pandemic and other operating investments explained earlier. EBITDA margin from operation was around 28%, which was 90 basis points lower than last year due to the rupee depreciation effect on the top line as explained previously. Normalizing the revenue at hedge rate for the respective years, EBITDA margin for the first half was similar to that of the previous year. CapEx for the first six months of the year was around $30 million. Another 50% of the CapEx guidance of $100 million has been put into execution and the same will be reflected in the books over the next few quarters. Based on the first half results and the overall trajectory of the business, we confirm the guidance for the full year of high teens% revenue growth and EBITDA margin of around 30%. PAT growth as guided before is expected to be in single digits due to the increase in effective tax rate and baseline effect of Remdesivir in FY 2022. With this, I complete my commentary and will hand back to the moderator for questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone 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. In order to ensure the management is able to answer all queries, kindly restrict your questions to two at a time. We will wait for a moment while the question queue assembles. We have our first question from the line of Tarang Agrawal from Old Bridge Capital. Please go ahead. Hi, Jonathan. Ashwa, Chetan, everyone. Congratulations for extremely robust set of numbers. Two questions from my side and probably one small suggestion. The first is on the dedicated business. You know, over the last six to eight months, there's been a lot of news flow around the international innovators coming and Setting up their GCCs in India. I mean, yesterday something around Baxter, Herbalife's gone back and set its own center, and Pfizer, Merck, so on and so forth, in Chennai, in Bangalore and in Ahmedabad. While it does put out a great sort of a story for India, I'm not sure how you know whether it's really a positive or a negative development from a Syngene perspective, and how are you seeing this? Super. Good question. I'm gonna give you a specific. You mentioned Baxter. The announcement they made earlier this week or last week, it's not new news. They've had a center in India for a considerable amount of time, and that's actually our relationship with them, is with that center. That's our partner. It's part of their global network, including their India operations. We're deeply sort of operationally integrated and used to working with that. I get the question. I don't really see it as an inflection point or an either/or. Some clients often, if they've got big operational businesses in India already and they're quite globalized, are very comfortable setting up their centers. It doesn't stop them from working with us on other aspects of our business. Others like that, having a strong local partner that really operates well at scale, is beneficial to them. I mean, the scale we're at, I'm sure we find it a little easier to recruit and operate in India than many standalone startups would. I'm not particularly disturbed by it. Actually with just about every company that you mentioned, the fact they have a center in India actually just makes them more comfortable dealing in this part of the world, and they know us well, and we operate well with them. Okay. Does that make sense? Yes, it does. The second, you know, pertaining to your discovery and development business, and the way we are seeing global trends, a lot of emerging Biopharma companies have been in it. That's basically one of the biggest reasons why, you know, businesses like yours are there helping them come up with cutthroat innovation. At the same time, we are also seeing funding for a lot of these businesses drying up, given the macros that the world is facing. From your perspective, typically, while onboarding a client or getting into an engagement, how do you know, how do you track the credit risk that's associated? Because your relationship would perhaps continue for multiple years. If you could just explain us that piece. I mean, I'll make a general comment, and I'll look to Sibaji to talk about the specific approach we take to credit risk. I think counterintuitively, the tightening of the funding environment, particularly in U.S. Biotech, and it wouldn't be obvious, is driven, I think, a positive for us. Those companies that are sitting on, you know, multiple years of cash, but are concerned about their cash burn rate and their ability to refinance at some future milestone, if they've got cash, and there are a lot that are like that, you know, that are already well funded. Of course, remember the observation you're making is we've been through two or three years of a very, very healthy funding environment for biotechs, and that market now has slowed and dipped. Those that took funding during those boom years are sitting on cash, and they now want to find out how can they make that last longer and deliver all of their science? Well, one of the obvious things they can do is partner with a business like Syngene that offers a very good operating cost arbitrage. For many of them, they could spend their money in the U.S., or they could triple the runway of their cash burn and come and partner with us, and they wouldn't notice a difference in the quality of science and the quality of innovation because we operate right at those global standards. That's the sort of more macro strategic comment. Sibaji, just on the specifics, I mean, we follow the normal rigorous protocols any business would about checking the creditworthiness of your counterparts. Yeah. Thanks, Jonathan. Hi, Tarang. Speaking particularly about how we approach this issue, we do engage with emerging Biopharma and Biotech. However, we do have a very well-structured credit policy and a credit approach. We have multiple categories based on size of the company, market cap, profitability, or and whatever information that we can gather for those companies. We do have a risk rating at our end. For customers where based on the credit rating, we do ask for advances. I think our credit policy was structured and very robust to handle a situation like that. Over the last six, eight months, we haven't really seen any impact. In fact, you know, getting receivables as normal, which is basically saying that our credit policy is working and is very effective. While I understand the question, at this point, no concern for me. Got it. The only other comment I'd say is the actual history has been a very positive one. It's not an area that we've had a lot of concern, but that doesn't mean to say you don't remain sensible and vigilant. Thank you. Got it. Just the last, I mean, the qualitative commentary on each of the businesses is helpful, and it helps us get some sense. Going forward, would it be possible to give us some more, say, detailed quantitative numbers across, say, maybe a revenue segmentation or something else? I mean, say, how many molecules you've got in phase I, II, or III without, you know, naming the customers or, you know. But some more maybe detailed numbers would probably be helpful for us to get a better handle on the business. Otherwise, the disclosures are great. This is just the last suggestion. Thank you. Yeah, no, I always happy to receive helpful suggestions. Do talk to the IR team about things that you think would be helpful. By the way, that's not an irrevocable commitment that everything you suggest is something that we're automatically gonna be able to do, but very happy to have the dialogue. I mean, I would actually go back, and if you look at the extent and breadth of our disclosures, particularly on these quarterly calls, compare where we are today with where we were, say, five years ago. Qualitatively, I think you get an awful lot more information than you used to. We're trying very hard to sort of paint a narrative without necessarily breaking down the inner workings of all of our P&L. You get our P&L on the basis that management runs it too. There's an alignment there. Very happy always to give you a comment. Do talk to the IR team if you've got good suggestions. Okay. Thank you. Thank you. A reminder to participants to press star and one to ask a question. We have our next question from the line of Surya Patra from PhillipCapital. Please go ahead. Yeah. Congratulations for the great set of numbers. My first question is about the incremental collaboration, Jonathan, that you have mentioned in your opening remark, leveraging the advantage of the SynVent. So if you can elaborate a bit, you have said some number also that multiple collaborations that has been added using this SynVent platform. So if you can elaborate number of customers or the project that has been added during the quarter or let's say even last one-year period. Whether this European situation what currently that we are witnessing that is bringing in positive vibes to our business, or how is it that impacting us? Say a bit more just on that because what do you mean by the European situation? Like, it could bring two impacts, right, to us. Say, in terms of, it possibly could bring incremental manufacturing opportunity. That is one, and possibly help us filling our CMO facility quicker. That is one. On the other hand, since there are war issues going on, the clinical trials could be deferred and hence the possible near-term impact could be a negative to us. Let's come back to that. I'll give you. I'll talk a little bit about SynVent, and then maybe if you could, while I'm doing that, and I think, I'm not sure I understand fully the question, but it's the bit you said. Did I hear you correctly, this European situation? I don't know what you're referring to. That's why I'm struggling with the question. Okay. I'm saying practically there are energy challenges, there are war situations impacting the clinical trials and all that. Hence, possibly the supplies, what we would be making, the development quantities and all that. Oh, okay. Sorry. No, I get it. Thank you. Thank you. Geopolitics, basically. Yeah. Well, I mean, given that, I spend a fair proportion of my time living in Europe, working there. Yeah. I wouldn't, I couldn't characterize it as you just did. I'm not sure that we are seeing operational impact in the industry, clinical trials not happening. Remember, the situations in Ukraine and, I mean, it clearly it's a travesty for the people of Ukraine, and I wouldn't comment more on the politics of it. I don't think it is flooding through the rest of Europe and the other, I think, European Union, 850 million people falling within that as a trading bloc. I don't see the operational impact. Go back to SynVent, though. That I am happy to talk about. Yeah. Let me just make sure that we all understand what it is. One of the things that we've seen as our industry, the CRO services, particularly businesses like Syngene over the last 20-30 years, have matured, increased the sophistication of what we do. We've become actually increasingly like our clients if our clients are the world's leading life sciences innovation companies. What I mean by that is if you observed us by capability, by infrastructure, by the processes we follow, by the way we go about doing science, we now sit, I think, at a par with the operations and the innovation that you'd see inside the leading companies around capabilities. That's created, I think, a second market opportunity. The primary one for us is functional services, where we do something like chemistry or biology, and we insert that into the value chain of our clients. They do the other things around it. They do the step before and the step after, but we are a component in their value chain. SynVent is really us offering the fully integrated value chain as a service on demand to clients that want to do it, either because they want to put an additional project outside of their own operations. Let's say they've got more good ideas than they've got capacity. They will do some of those projects in their own labs, but they still want to put other ones outside. We can offer that fully integrated as a service. You've got others that just want to maybe accelerate, or they've got a virtualized business model. They never actually intend, while investing in innovation, to own the infrastructure. For that, we offer a turnkey solution. That's the essence of SynVent, is that it's a fully integrated drug hunting, drug discovery, drug development platform, series of interlinked, interconnected services. And then the number that I mentioned was that we were up to 18 projects. The baseline of that, of course, would be effectively zero from when we launched that whole service to the market. I have to think two, three years ago, around that timeframe. We continue to add projects to it and we see good demand. Does that help? At least that paints a picture. Yeah. of how it differs from Syngene and SynVent. Think of Syngene as component verticalized services, and think of SynVent as the same things flipped through 90 degrees and therefore horizontally integrated as a value stream. This is really helpful. One additional extended thing here that I'm just trying to understand. See, you do mention also the universities that you have tied up with. Here I'm trying to understand whether these associations with universities are for sourcing projects or business opportunities, or it is to build our capabilities with the help of university support. I think it's all of those. It's an integrated one. Sources of talent as well. I mean, we like to have a close and symbiotic relationship with many of the leading universities in India. You know, I'd love every chemistry professor and every biology professor to know that the brightest and the best in their class are very welcome to come and start their scientific career at Syngene. If they know us and we know them, there's more chance of that happening. The other bit is being a super smart academic scientist. It adds value to super smart, for want of a better phrase, industrial scientists, and there's a good relationship between them. Again, we create value intellectually at that interface, as well as they may well be sources of good ideas, good ideas for our clients, innovation, blue sky research. It's a connected sort of community, and we intend to play an active part of that in India, which is why we've increased the number of universities we have relationships with. You know, we welcome that. It's a good source of talent, good source of innovation. Sure, sir. Just last one question about a clarification about the tax rate, what Sibaji sir has mentioned. Sir, do you say that, okay, now whatever tax rate we are currently witnessing for the quarter, it is kind of a likely rate for future also? Surya, what I said is that the effective tax rate for this current financial year is around 21.5%. Over the next three to five years, it will gradually move up to 25%. That's the kind of gap we are looking forward to. That's how we can model a gradual increase. Sure. I have to clarify one thing. This does not have a cash flow impact because- Yeah. We have had enough advanced tax paid in terms of MAT for the next three to four years till the time it reaches FY 2025, 2026, to kind of adjust against the opening tax rate that we have. It's more about the P&L impact. From FY 2025, 2026, we can gradually then assume that the cash tax payout will also start going closer to 25%. That's how we can model it. That's just a modeling input. From a P&L perspective, ETR has been 21.5%, gradually it'll move up to 25%. Sure. Yeah. Thank you, sir. Thanks a lot. Wish you all the best. Thank you. Thank you. Thank you. Ladies and gentlemen, in order to ensure the management is able to answer all queries, kindly restrict your questions to two at a time. We have our next question from the line of Harith Ahamed from Spark Capital. Please go ahead. Hi, good afternoon. Thanks for the opportunity. On the Zoetis contract, you mentioned that there's some qualification batches supplied during the quarter. Qualitatively, can you give some color on whether this was a big contributor to the overall revenues for the quarter and whether it was a major contribution to our, you know, manufacturing services revenues? No. Do you expect this to sustain in the? That's the shortest answer I think I've ever given on a call. No, it wasn't. I don’t, if you think the numbers for the quarter were good, I mean, they came in pretty much a beat versus market consensus on each line of the P&L. It isn't Zoetis that's driving that, it's the rest of the business. Zoetis really won't come online until next year. You know, you should be adjusting your models to think about that as an engine coming on stream from the first quarter of next year. Between now and then, there's bits and bobs, and there's qualification work, and there's a series of regulatory inspections to be cleared. From a capital markets revenue point of view, dial it in for the first of April and not before then. Just to add to that, Harith Ahamed, we have indicated that we are seeing good demand situation in Biologics. We also said in our last call, the commercial manufacturing will start sometime in last quarter of this financial year, which is what Jonathan is also saying. Actually, revenue from commercial manufacturing will start showing up fully on the next financial year. Till that, we may have some small revenue contribution from trial batches, but nothing significant in the overall scheme of things. Okay. This product, if I understood correctly, has been launched in Europe. Any takeaways from the performance there and the ramp-up there so far, in terms of how the- Yeah. I Update will be in the U.S. Yeah, I'll give you a qualitative answer. That's a much better question to put to Zoetis. I mean, that's the bread and butter of their business. It's a marquee product in their industry. It's a real source of innovation. Everything I see tells me it's getting good traction in the market. Really, you know, we're at a different point in the supply chain to be the best people to comment on in-market performance. I mean, that's an issue for them really to comment on. It looks to be a very successful product. If you read the scientific data, it looks good. In terms of inspection timelines by the FDA, so you know, just trying to understand if you know this is likely to happen in the- Second half of- Second half of 2023. Second half of the. And, uh- Yeah, second half of this year and second half of the year is my expectation. I don't drive the FDA schedule. They'll do. You know, we'll let you know when we know the outcome. I think you've got a fairly clear sort of framework. Zoetis wasn't the cause of the positive performance in the second quarter and the first quarter of this year. It's the rest of the business that's driving that. Between now and the end of this financial year, our expectation is to go through and hopefully complete successfully the various regulatory inspections that are needed. Assuming that happens, we'll be into starting commercial scale manufacturing in the fourth quarter of this year, which should, given how long it takes to do a batch, should start to become a revenue factor from the first quarter. I think there's a sequential story and you've got all the moving parts. Thank you. Thank you very much. Thank you. That's all from my side. Reminder to participants to press star and one to ask a question. We have our next question from the line of Mehul Sheth from Axis Capital. Please go ahead. Yeah, thank you for the opportunity. First question on your visibility toward order book. Are you getting any incremental order inquiries even from likely markets like the U.S. or European side, given this, they're looking for some China Plus One strategy? Yeah, I think that's a sort of a general structural trend, but I'm not sure I can parse it out. If you think, depends what your baseline is, the world is just starting to come out of a pandemic. If your question is phrased as are you seeing a change from where we were a year ago, two years ago, I think the answer is gonna be yes for everything and everybody, because the world's coming out of lockdown. What I tried to get to in my comments was that in our industry, remember for most, nearly all of our customers, economically, something that's absolutely central to their business models is creating innovation that's patentable. Those patents are time-bound monopolies, effectively. It's the definition of a patent. That leaves you with an industry that speeds through discovery into development to the market. It's absolutely vital. If you've just been through a two-year pandemic period where things have slowed down, gone more slowly, been delayed, there's a real economic spur on the client side to try and make up for lost ground. I think that's one of the reasons we're seeing quite a buoyant demand market around the world as people are back to work. Not only are they doing what they weren't doing 'cause they weren't at work, but they're trying to catch up on things that got delayed. Hopefully, that gives you enough of a sense. Certainly gives you the tonality that we experienced in the first half of the year, a positive demand environment. I look forward to reporting on how that plays out in the rest of the year. Thank you for that answer. One question on Mangalore plant. Once you are expecting commissioning or the commercialization by second half of next year, there will be some incremental cost or operating cost that will be currently there. You must be incurring. What will be the impact of that incremental cost related to this plant on your EBITDA, if you can quantify the quarterly run rate or something? Okay. I'm looking at Sibaji, whether you have a comment. My headline comment would be, in a business of our size, with the number of subunits, operating units, we wouldn't parse out the EBITDA impact of a particular plant or a particular supply point, largely because I don't think it would be helpful. We wrap all of that up in our overall guidance. Yeah. The guidance we gave for the year is EBITDA margins of around 30% for the full year. We're a little bit below that in the second quarter, which implies a few hundred basis points of uplift in the rest of the year, but no big deal really. I think around 30% is stable. Sibaji. As we mentioned before, the margin is a bit behind because of the rupee depreciation benefit that we're getting in on the top line. If we adjust for that, we are almost close to the guidance and hopefully by the when you look at the full year numbers, we'll be on guidance. Yes, the expenses of Mangalore plant is very much building on overall expenses, but we'll not like to call out the exact numbers over there. Thank you. Okay. Thank you. That, that's it from my side. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Miss Avantika Mishra from EY for closing comments. Over to you. Thank you, everyone, for joining today's call. I 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. On behalf of Syngene International Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.