Good morning, everyone. Thank you for joining the Q4 FY26 earnings conference call of Fredun Pharmaceuticals Limited.

We have today with us Mr. Fredun Medhora, Managing Director of the company.

Before handing over to him to address your questions, let me briefly walk you through the company's performance for the quarter and year ended FY26. During the Q4 FY26, total income stood at ₹213 crores, registering a strong growth of 27.27% year-on-year compared to ₹167.41 crores in Q4 FY25.

EBITDA come in at ₹29.13 crores, reflecting a robust growth of 67.05% year-on-year. EBITDA margin improved to 13.67%, expanding by 326 bps points.

Net profit for the quarter stood at ₹11.07 crores, with a growth of 56.47% year-on-year. Net profit margin improved to 5.19%, expanded by 97 a basis points.

For FY26, the total income reaches ₹639.12 crores, marking of 40.08% year-on-year growth. EBITDA stood at ₹94.79 crores, up by 72.05% year-on-year, EBITDA margin improving to 14.83%, an expansion of 276 basis point.

Net profit increased to ₹33.21 crores, delivering a strong 59.59% growth year-on-year. Overall, the company has demonstrated a strong revenue growth along with a meaningful margin expansion and improved profitability during Q4 and FY26.

With that brief overview, I would now like to hand over to Mr. Fredun Medhora, sir.

We can now open the floor for Q&A. Thank you, and over.

Congratulations, Fredun, for excellent set of numbers. The company has been growing at a crazy pace.

Now, my question is with regard to the recent notification which you have given regard to Dollsell and hormonal products. It seems to be very exciting pact how do you see this products and what is your plan and how do you want this products to pan out in our company?

Yeah. Excellent.

We are launching two sets. One is an hormonal line, and the other is an anti-aging line.

Now, in the hormonal line, the market is quite fragmented. There are these hormones which are used for medicinal purposes, and there are some who abuse it also.

We are going through the doctor channel. We want good hormones in the market.

There is a huge demand as the population is gaining awareness, the population requires certain targeted therapies such as testosterone replacement therapies and so on and so forth, even in terms of pregnancy, even in terms of estrogen, even in terms for both men and women both. Hormones are a sector which is not very focused on, and it is very fragmented in terms of its users.

Because there are not many good hormone products available, many even abuse it. We have gone through our doctor line.

We have created a list of products. Some of the products that we're creating in the hormone line, we will be one of the first or the second in the country to have those products.

We have created a ground-level team. Currently, we are focusing in MMRDA region as we generally do as a company.

Then, we are focusing on certain metros. We also will be the first ones to have medicated hormone products sold online through our website and through our doctor channel which is available, we'll be the first ones in the country to do so.

There, we are going to add not only these products, but also specialized therapeutic products, even for fitness industries, such as specialized pre-workouts, specialized protein powders, because we are already doing an entire protein range in our nutrition range, which is doing phenomenally well under Fredun Energy. We're going to enhance those and create targeted pre-workouts, create a targeted therapies which are going to not only help the fitness industry, but also will do great for doctors as they will have alternative long-term treatments along with their hormonal therapies.

We're going to have a range not just of hormones, but of other protein supplements also, which are targeted in those areas for those people who are on hormone therapy. It will be a complete end-to-end basket for people who are on that prescription.

When it comes to anti-aging, as the number of clinics of anti-aging are growing rapidly. Now, CDSCO has lately finally announced that you cannot, except for doctors, because first, anyone was giving any therapy online.

You would see in newspapers that weddings have these IV bars given for the IV guests and everything, and anyone was administrating anything. The demand is unbelievably huge, but it was not very organized.

Finally, the government has put a very good law, and the CDSCO has put a good law that only certified doctors can prescribe it. It works to our advantage.

We are one of the first manufacturers for NAD, NAD+, we are one of the first ones to have exclusive import rights for the API also, which is right now the talk of the town. With end-to-end supply chain and it has a relatively decent margins also, and we can use our dermaceutical products, our specialized anti-aging products, and we are the first ones to have those licenses, create a basket and go to the dermats, go to the doctors, go to the people who are prescribing these serums and injections and create a range of it.

It is a very high margin, fragmented market, not strong competition, unorganized market, and frankly speaking, a very brownfield for us to build our brand very quickly and very fast.

Hello. Good morning, sir.

Am I audible?

Yes, you're audible. Thank you.

Good afternoon.

Yeah. Sir, I just have one quick question.

Sir, so, can you shed some light on growth strategy for your mobility division? How are you planning to scale this business going forward?

Yes. Mobility has been a very positive division for us.

We have seen phenomenal growth. Last year, we did around almost ₹30 crores of mobility products.

Mobility has four brands in it: It's Freon, DigiOn, Nevon, and now, we are launching this by July, Mobilitix. These products go to the chemist shops, and most of these knee braces, leg braces, your orthopedic products, your digital-based products like thermometers, your BP machines, your glucometers, those are all products which are sold in the chemist line.

We are already doing very big distribution and distributing our products of Fredun GX and our other third-party products also, and our branded products in certain geographies in India. We use the same distribution channel.

We have used the same channel to add on our mobility products. Companies like Vissco and Tynor don't have pharma along to sell it.

We have. That gives us an upper hand in the distribution.

That gives an upper hand in even logistics, which is a big component when it comes to mobility products, like wheelchairs and walkers, and so on and so forth. We have used that to our advantage.

We do not foresee any problem in touching a ₹100 crores within a 2 to 2.5 years from now, calendar 2.5 calendar years from now, and a ₹100 crore run rate. We are looking at easily within the next 5 to 7 years a ₹250 to ₹300 crore enterprise coming out of this.

It is profitable. It is doing well.

It is not burning any of our other resources. We don't burn money to market it.

We are not an online brand. We are completely offline, pure distribution.

In Maharashtra, every single space has our product. We have also gone inroads into Goa, we're getting inroads into Chhattisgarh, we're getting inroads into Karnataka next month.

We are available in many states, but in the states which I've mentioned, we have very strong distribution. Within the next 2.5 years, we should having the same kind of distribution we have in Maharashtra in at least 17 to 18 states.

That division, touch wood, has done phenomenally well for us. I feel we can create amazing brands out of it.

Our Mobilitix brand is a specialized brand which is targeting only physiotherapists, and products which physiotherapists are using. We have created a unique models in order to tap that market, because they are a marginalized community when it comes to doctor community, and they are actually the first-line influencers for most of the products.

We have created a list of products, and we've got phenomenal success. In fact, our pre-booking is completely booked with the physiotherapist as we are planning to launch in July.

Hopefully, that alone should go into a ₹30 to ₹40 crores in the next two years, just the Mobilitix part of Fredun Mobility. It's amazing response, and frankly, it is a no-headache business for us and growing at a almost a 55% to 60% CAGR.

Thank you for the opportunity, sir. Sir, I wanted to ask you regarding your pet care business in terms of aspiration, in terms of product and the range of products that you are going to offer, and numbers, what do you see in next three years, five years?

How big can the business be? I don't want to know the numbers per se.

I just want to know about the products and the services you plan to offer.

Like I've always been saying, sir, that we are the only company to do what we do in the sense that we are the only company manufacturing allopathic formulations, nutraceuticals, herbals, grooming, functional foods, and also do diagnostics, all under the same roof. We have a unique basket.

Our goal, our long-term goal is very crystal clear, succinct, and simple that by 2032, 2033, no pet in India can be born or die without using a Fre宠 product or service. Our targeted pathway is that we create products which are there in all parts of a pet's life, from birth, to youth, to their prime, to their geriatric parts.

The biscuits that we are launching, we are we have launched one of the most novel varieties, including giant biscuits, which have done phenomenally well. In addition to that, we have 42 variants of functional food biscuits that we are launching, and as as we speak, we are launching for all kinds of breeds and all kind of products.

That way, we'll go inroads into the industry even further. Even in grooming, we in in certain markets, we have displaced the market leaders and created because of our products, because we come from a manufacturing background, we come from a human manufacturing background, we already manufacture the best dermaceuticals and cosmetic products in India, where even the big brands use from us.

With the same tech background, with the same knowledge to manufacture pet grooming products, we have come out with an amazing range of products, and they have done phenomenally well. When it comes to certain products, we are in as as I have said last time also, we will be heading in Stage 4 trials.

We have already headed in Stage 4 trials. Within the next 9 to 12 months, we'll come out with some formulations which will will will be the first ones in India for pet, and it will it will be a real game changer for us in the in the pet space also.

Our online platform, Wagr, is also going to be one of the most most awaited things for us right now. We have taken our time, we have taken 3, 4 months longer than necessary, but the final product has come out phenomenally well.

We are in the launch phase right now. Hopefully, by first week of July or mid-June mid-June, we are having a soft launch, first week of July, we'll be launching.

It is one of the most inclusive platforms for pet ever created. It is not just an e-commerce platform.

When when people will see that, when people see our products, when when doctors understand, because when we when we start our our marketing, we do not just go with a product to the doctor. We start our education much, much, much before that.

We start our education programs. We call the the top doctors across the world, and and and create symposiums where the reason for why we've created a product is is is ascertained to the patient to the doctors, like for example, our diagnostics.

The doctors were just We've got a such a phenomenal response, but at the same time, many doctors didn't even know what are the real advantages of good diagnostics. After understanding, we also launched India's first bulletin on radiology and pet imaging.

Once that bulletin went to all the doctors, they started calling us, and they started appreciating what we do. Even for exotics, what we are doing is is is really phenomenal.

Example, last last week, we did a CT scan for a cobra, which is very rare to have that bandwidth, to have that infrastructure, and have the doctor support to diagnose cobra-related CT scan. We are kind of pioneers in what we're doing.

Whenever we have launched a product in the industry, we have ensured that the bar of the industry has been raised irrespective of our sales, and that is our long-term goal anyway. We are quite happy and quite content in in in achieving that.

Hi Fredun. Congratulations on a great set of numbers and keeping up with that consistency as always.

My question is, we all know about the growth capabilities and how you all have performed quarter-on-quarter. I think because of what is happening in Middle East and the whole geopolitical issue, do you see that the raw material cost as a percentage of your sales has started inching up, and are you able to pass on to the customers?

One is that, and second is any slowdown you feel which has come in the last two months because of this whole tension? This is the question I have, Fredun, for you.

Yeah. Excellent.

People have always said that geopolitical issues cause problems, and I always say, no matter how many bombs fall, no matter how many things, people have to take their heart pills. Yes, of course, the prices have increased.

Therein, because we always used to keep 3 to 4 months of stock, that initial jolt of that price increase never bothered us. In fact, we could cater to our clients at the same prices because we had considerable stock in hand.

Something which was considered as a bane on our company could became our boon. That is why our turnover also increased.

In fact, our sales increased because of it. Yes, of course.

Everyone, the price has not increased for Fredun Pharmaceuticals, the price has increased for the world. Luckily, we had buffer stock, and we already, as I have said before, we have orders in hand for 6 to 7 months in hand always.

This time also, we have orders upwards of ₹320, ₹330 crores in hand. As a result, we also give orders ahead to our suppliers in hand, and our orders are kind of booked, which is a very big plus point when it comes to such geopolitical changes.

Yes, it does not affect us. Few percentage, 1% or 2%, the buyer absorbs, sometimes certain products we have to absorb, but it has absolutely no difference to our bottom line.

In fact, it increases our business. It creates a robust line of communication where the buyers are happy, the distributors are happy.

Many of our products are in our own brands, there are decent margins if at all in the future we have to absorb anything. Currently, we do not.

It has not affected us. Yes, the prices have increased.

Yes, certain products we have to increase our prices. Everyone understands that the oil prices have increased globally, the foil prices have increased globally, the PVC price, plastic prices have increased, anything to do with petroleum has increased globally.

It's a phenomena that has bothered the whole world. It is nothing specific to us.

In fact, we have taken advantage of it, and we have used that advantage to propel faster. That is why we are seen this kind of growth, and this year also, I think, we are on track to overachieve our targets.

Hopefully, what we have targeted in 2029 and 2030, we will achieve it faster than anticipated.

Hello. Am I audible?

Hello.

Yeah. Good evening, sir.

Give the revenue break up of how much we get from vintage business and from non-vintage business? Also in that [unclear]

I can't hear you.

Yeah. Am I audible now?

It's better.

Yeah. Can you please give the revenue breakup for your vintage and new business in FY26?

Also in that, which business has contributed what percentage in vintage and new-age?

Yes. Our vintage business, as I've always said, is growing at around 15% to 20% year-on-year, and that will continue to grow so.

Our exports have grown with about ₹110, ₹120 crores. Our tolling is somewhere around ₹24 crores.

Our indirect exports, our institutional sales that add up to about another ₹120, ₹130 odd crores. Our domestic third-party branding also grows to somewhere around ₹45 to ₹50 crores, added on Fredun TC another ₹25, ₹30 crores.

Those are growing rapidly. Our new-age business such as the pet care business done phenomenally well.

We have done around ₹42, ₹43 crores of sales in the pet care business. In the mobility, we have done around ₹29 to ₹30 crores.

We have done in nutraceuticals of around ₹26 crores. We have done cosmeceuticals of our Cosmeceutix mass market cosmetics of around ₹20, ₹22 crores.

We've done dermaceuticals around ₹12 crores. We're doing quite well.

The new-age businesses are growing at around 40% to 50% CAGR because they're coming from a smaller base. The vintage business is also growing because of registrations.

We have about a thousand registrations still in the pipeline, more than a thousand registrations. That is also growing at around 10% to 15%, but that's on a cruise control growth.

Our focus is on the new-age business where the gross margins are also relatively higher at around 45% to 55%. Some products like dermaceuticals have around 80% to 90%.

Some products have even higher. Hormones will have somewhere around 50% gross margin.

We definitely will keep on growing the new-age business also. Within the next few years, the percentage of the business will come to around 50% each.

Within the next 2, 3 years post that, it will be around 70% to 30%. As I've always said, we are transitioning from a contract manufacture normal pharmaceutical generic or branded generic company like Cipla and someone to a more consumer-related products, consumer D2C products, and also growing our pharma line simultaneously.

We are not intrinsically a pharma company anymore. We are a mass market consumer product company as we speak, and we are growing, and hopefully, we'll have that transition done within the next 7 to 8 years with retaining our pharma roots and growing our pharma roots also at the same time.

Yes. Thank you for taking my questions.

Just wanted to understand you mentioned that we'll overachieve our target in FY27. If you could quantify that target, that would be great.

What is the growth that we can see?

Yes. I always underpromise.

If you have seen my BSE guidances for the last 10 years, we have always underpromised and overdelivered. We are not a company which has unreal, unnatural targets.

We can consider a growth, an overall growth of around 25% to 30% on our top line from last year, which will automatically add up and increase from the expectation of what we had given guidances two years ago. We can do better than that, but right now, between 25% to 30% growth on our top line of last year is what we are intending to achieve.

I think we can easily do that. We are on track to do it, and our numbers as we speak and the run rates as we speak are in line to achieve that.

Am I audible?

Yeah. I just wanted to understand, sir, how are we targeting our customers for the pet business?

Are we listed on online marketplaces and how are we marketing the products? See,

currently, most of our products are prescribed products. We had a very novel range of marketing.

Initially, when we started creating brand awareness, we did not go online or we did not go to the doctors like most of the companies. What we did was very different.

We started education program with our first line of influencers. In pet care, we have to understand the first line of influencers are not necessarily doctors or online platforms.

They are the breeders. They're the groomers.

They are the dog walkers, and they're the dog trainers. We went to Tier 1, Tier 2, Tier 3, and Tier 4 cities across India, and we started training.

We started teaching. We started making them understand the benefits of certain products, not necessarily our own products, but certain molecules,

and

why certain things are to be done, certain techniques. That way, we created a bond, and we created a very robust relationships with the real first line of influencers.

Then, when we got our products in, they were very easily accepted. You go meet your doctor when your pet is sick, but you meet the breeder for the first time when you are a pet parent or you get the pet.

You go to your dog walker practically every day. You go to your dog trainer twice a week.

You go to a dog groomer twice a month. Those guys are better influencers in terms of day-to-day products than your doctors themselves.

Then, when we started doing these education programs, the doctors started realizing that, hey, this is not a normal company who has just started pet care. They are very strong in their science.

They're very good with their team. I can proudly say we are one of the best teams for pet care in the country, from India's top nutritionists to India's top cat expert, to one of the best research scientists, to India's first and second vet radiologist, all are on our team.

Because of that approach, we could then go to the doctors, and they started prescribing. We are not a inorganic growth pet care company where we are spending money to sell our products.

Here, our products are taught, are scientifically proven, and that is why we have actually got better success than many online companies also and many online platforms. Plus, most of my products are prescribed, there is no point of selling it on any platform.

My functional foods, yes, but we have our own in-house websites where we can sell and people know about us, and through our distribution channel, it sells very well. We are quite happy and content with our roadmap for pet care.

We want to continue that, and in the next few years, we will pursue this path to get further inroads into the root of the pet industry, rather than be superfluous and sell online only, because we are not a pet food company. We are a pet care company.

Yeah. That's my last follow-up, Fredun.

I only wanted to ask you, right, regarding your awareness with regard to the finance cost, right? You're aware of the cost of finance you're paying, and I guess this is the top most debt levels of our companies.

Yeah. See, debt as an absolute number is not relevant.

Tomorrow when our turnover is ₹1,000, ₹2,000, ₹3,000 crores, the absolute number might increase. The ratios are definitely improving.

For our manufacturing company, for a company which is launching five

Yeah. A moment.

Just a pardon. I just want to address with regarding to the percentage of cost, right?

As our rating has increased, our credit rating, our balance sheet has improved, the percentage of cost should come down drastically.

Yes, yes. That is exactly.

That is the only concern I was just expressing, you should be aware that is the only point. Yes,

yes. We are very much aware.

Who wants to pay more? Of

course, of course.

Nobody works hard to pay interest. People want to make money.

Touch wood, we are making money. We've been able to service the debt comfortably.

At the same time, we are aware, absolute number definitely will increase. We are also looking at the ratios.

That is also going to improve. Right now, our focus is on robust growth.

Yes, there are certain rates which are slightly higher. Within the next 3 to 4 years, you will see a very different picture when it comes to this in terms of your percentage of the spends.

Absolute numbers might increase, decrease. That changes from quarter-to-quarter.

Definitely, we are very well aware of the kind of interest that we are paying, and we are very attuned to the fact that we are going to improve this even further as we are doing for the last few years.

Yes. Thank you for the follow-up question.

Our margins have improved quite a lot. I just wanted to understand what is the growth driver behind this margin improvement and what are the sustainable margins going forward?

As

I've said that the new-age businesses have a higher intrinsic margin. The new-age businesses are growing, but at the same time, the new-age businesses are also adding more demographics.

If you're earning in Maharashtra, we have to spend in Andhra Pradesh to start launching it. We are a brick-and-mortar company, we are not into inorganic growth.

Therefore, we grow at our pace. We earn money, and we spend that money.

Our margins have improved because, since 2016, I have been saying, post ₹50 crores a quarter revenue, the economies of scale in the vintage business will start hitting in. That is exactly what happened in 2021, 2022.

That is when our profitability, which was around 1 or less than 1%, started increasing to 2%, 3%, 4%. Right now, we are at around 6.5%.

That kind of growth will continue as the new-age businesses have a higher EBITDA, they have a higher gross margin. They will balance out.

We're looking at a continuous growth as we have seen for the next 8 to 9 quarters. Then, there will be a sudden spike in the profit.

Why? Because the demographics reach of the new-age products will be kind of satiated.

There would be no further demographics to use. After about 7 to 8 quarters from now, there will be a sudden spike in profitability even further than what it is growing now, and then, it will kind of ease out and plateau, as profit cannot grow infinitely.

Within the next few years, you're easily looking at a 10% to 12% PAT kind of company on a 2x, 3x kind of top line within the next few years. Again, top line and bottom line are very important, but as a company, we are focused on sustainable growth.

Last 19 years, our growth is a 32% CAGR. There's not a single year of de-growth in the last 19 years.

We tend to continue that. We tend to have a sustainable growth in the future.

Pharma definitely will have its cycles. We have seen multiple cycles, and we have grown in spite of those cycles.

We are quite confident in what we are claiming.

Any thoughts on any new product launches? Can you give us commentary on Wagr.ai, how it's doing according to your expectation and what's the future plan?

New products, sir, like I told you, this year, we are going to focus on our hormone and anti-aging, and we are going to increase our demographics for our existing line of ranges. That is what our target's now.

Of course, new molecules will keep on adding within those ranges as part of our long-term plan, and those numbers are quite huge. That will keep on happening autonomously.

When it comes to Wagr.in, it was Wagr AI, now it is Wagr.in, because we want to make it a more inclusive platform. That platform has turned out really, really well.

It is going to launch end of this month and the beginning of July. It has taken longer than usual, as I've said earlier, but it is an amazing platform.

It is something which others have not seen till now. It is not an enormous e-commerce platform, and we are going to use our connects in the pet industry that we have, which other online platforms don't have.

We have a ground-level presence. We have a field force presence.

We have a manufacturing presence. We have a marketing presence.

Having an e-commerce on top of that is a phenomenal advantage for the e-commerce and for our offline distribution as well. We're going to incorporate all our abilities and all our USPs together.

The final product has turned out really, really nice. The team is phenomenal for handling it.

I would say one of the best teams to handle e-commerce platforms like that. It's just not an e-commerce platform, it'll be wrong to just call it e-commerce platform, it's a completely holistic pet care portal for all the needs for a pet parent.

It will definitely keep on upgrading itself. It is using AI.

It is using the latest AI. It is using the latest analytics.

It is using the tools which are required. It's come out good.

Hopefully, you will be able to see it in the next 35, 40 days active and live. You can still Google it, you will find the layouts, but it will be live and active within the next 15 to 20 days.

Hello, am I audible? Hello.

Yeah. Congrats for the excellent set of numbers, Fredun.

You have

given the growth guidance of

Yeah. Just hold on.

Hello. Now am I audible properly?

Yes, yes. Now

Yeah. Congrats for the excellent set of numbers, Fredun.

You have given exactly the same guidance of 20% to 30% for this year and next year also. How much the margin growth do you see from here on 20% to 30% growth?

How much EBITDA margin can go up?

The same growth that we have seen last year, 30% to 40% on what we have. As I told you, the margin growth will keep on increasing for the next eight quarters in the same lines as what is happening in the last four years.

Then, there will be a certain certain spike in the profitability even further than that, because the demographic reach will be satiated by the new products within the next 2.5 to 3 years. Then, of course, there will be further growth.

Profit, of course, cannot go infinitely. We are in the next few years, because we can only target for the next few years, we we are looking after a few years, we're looking at around a 10% to 12% kind of PAT coming up for the company.

My question is how is our manufacturing capacity utilization as of now? What product do we manufacture in-house, and what product do we outsource to the 37 different locations you mentioned in the previous calls?

Yes. Now, we have around 43 locations.

For example, wheelchairs, knee brace, leg brace, ortho brace, electronic wheelchairs that we have come up with, braces, that we cannot manufacture in our pharma plant. There are certain products like liquid injections, PFSs, dry powder injections, beta-lactam kind of products, we cannot manufacture in-house.

Definitely, We have added more locations in considering our future growth as well. Registration takes time, product validation, product standardization, it takes time.

We have not gone now searching for new places where we ourselves outsource, just like how Cipla does, just like how Micro does, just how Pfizer, or Abbott, or Viatris does. We have gone out pre-emptively.

We have planned out for the next 7 to 8 years our requirements, and then we have selected units. Then, we have taken our loan licensing and our contracts, and then we have started our manufacturing.

Right now, I would say above 80% of our products, or more than 80%, gets manufactured in-house. In-house capacities are augmented.

They are expanding even as we speak. We are adding another 12 to 13 packing lines by end of September.

We are also going to construct a new wing within the plant. Hopefully, we will disclose it again when we do it on our BSE guidances and everything.

That will propel us, as I have been saying, we are one of the largest manufacturing plants even right now. Within the next 2.5 years, we should be in the top three, top four manufacturing plants for capacities at a certain location.

We have a cluster of four plants at one location, and we are also setting up facilities for our functional foods, and also planning to set up facilities for manufacturing a lot of wet food products. A lot of exciting stuff is coming up in terms of manufacturing capabilities.

Capabilities, we have one of the highest COPPs for a single plant in the country. We are doing well.

We have used time as our greatest ingredient. I always say, you can spend ₹400, ₹500 crores and replace our infrastructure, it will take you 15, 20 years to come to our validation and licensing levels.

That is our asset. We are utilizing it.

We have created and built it over the last three decades. Now is the time to optimize it and use it to our advantage.

Hi. Am I audible?

You're slightly muffled.

Okay. Now that would be okay.

Yes,

yes.

Only one question is there from my side. Congratulations for the good set of the growth and the numbers.

One question that is really concerning me that I'm a investor in the company from last 2, 2.5, 3 years. Only one thing is working capital requirement.

Free cash flow is not joining with the numbers adjustments. Can you throw some light on that, is there any plan to utilize that cash or the working capital effectively?

Yes. If you're an investor for the last 2.5 years and you're tracking the company, I'm sure before that, you would have noticed that we have constantly improving in terms of our inventory levels.

But 4 years ago, 5 years ago, I used to always say, I require this inventory level because I'm launching multiple brands at the same time, and we have 2,100 SKUs across 27 therapeutic ranges. We need that inventory.

That time, it was very difficult for many people to understand why our company requires ₹200 crores of inventory for a ₹230 crore top line. Then, when it was a ₹350 crore top line, we had a ₹220 crore inventory.

When you're ₹450 crore top line, we had a ₹220 crore. Now, at around ₹700 crores, we still have only ₹270 crores, and our cash flows have constantly improved.

In fact, our cash flows which were strained about 2 years ago, it was a planned decision, it was not unplanned, it was not situation, it was planned. Now, the cash flows have improved.

We have positive cash flows even from our operations as we speak. Working capital is not a worry for us right now.

We have improved our numbers. Our debt to equity is 0.8.

We have done quite well in terms of addressing our issues. The new-age products that are coming in are bringing in profits.

Of course, and when in any growth phase, in any company's phase, and if you're growing step-by-step organically, working capitals will be stretched time and again. We have seen multiple cycles.

We are existing for almost 40 four decades, 40 years. We know how to operate with lower working capital requirements versus what we are doing.

However, we have done well. We are now positive.

Hopefully, it is going to continue to do that because the trajectory of the growth ensures that we will have positive cash flows. Working capital requirements will always be there.

We might require more debt. We might require more working capital as we are growing.

We are growing faster than anticipated. Of course, we're going to require.

Are we improving? Yes.

Are our profits improving? Yes.

Are we reaching more demographics? Yes.

As long as our products are being sustainably well, as long as we're able to repay our debts, as long as we are able to service the interest, as long as we are now in positive cash flow that we were after a long time of investments, we're doing quite well. I completely understand your concern, but we have mitigated those concerns, we have addressed upon it, and the numbers are speaking for itself.

Thank you, everyone, for joining the conference call of Fredun Pharmaceuticals Limited. If you have any further queries, you can write to us at [email protected].

Thank you, Fredun, sir, for your time. Once again, thank you, everyone, for joining the conference call.

Good day.