Thank you, Rutuja. Good evening, friends.

We welcome you to the Q4 and FY26 earnings conference call of Neuland Laboratories Limited. To take us through the results and to answer your questions, we have with us the top management from Neuland Laboratories, represented by Mr.

Saharsh Davuluri, CEO and Managing Director; Mr. Abhijit Majumdar, CFO; and Mr.

Sajeev Emmanuel Medikonda, Head of Corporate Planning and Strategy. We will start the call with a brief overview of the financials by Mr.

Abhijit Majumdar, and then Saharsh will give you the broad highlights of the business trends and what he is seeing in the markets. Post that, we will open the call for the question and answer session.

As usual, the standard safe harbor clause applies as we start the call. With that said, I now hand over the floor to Abhijit.

Over to you, Abhijit, sir.

Thank you, Ravi. A very good evening and a warm welcome to everybody joining our call.

I will take you through our financial performance for the quarter and the year, and then share comments on cash flows, working capital, capex, and the actions we are taking to strengthen financial discipline through cost and process improvements. As we have highlighted in our previous call, given the nature of our business, quarterly performance can be uneven, and it is best to evaluate the business over longer periods.

With that context, let me start with the numbers for quarter four. Total income was 788.7 crores, up 134.9% versus 335.8 crores in the same period last year.

Commercial CMS projects drove the growth, with CMS contributing over two-thirds of revenue this quarter. Gross margin was 62.1% versus 56.3% in quarter four FY25, driven largely by the business mix.

We also managed higher freight costs towards the end of the quarter due to the conflict while ensuring continuity of supply to our customers. As always, gross margin includes manufacturing expenses and other costs directly attributable to the product.

EBITDA stood at 319.4 crores with a margin of 40+%. This exceptional operating margin reflects the record high revenue this quarter, and it is also partly because of a function of the uneven nature of our revenue flows and should not be seen as an indicator of our future performance.

Profit after tax was 212.5 crores versus 27.7 crores in quarter four FY25, and our EPS stands at 165.6 per share. For the full year of FY26, revenue was 2,053.1 crores versus 1,497.3 crores, a growth of 37+%.

EBITDA was 603.4 crores versus 342.8 crores in FY25, with full-year EBITDA margin at 29.4% compared to 22.9% last year. Profit after tax for the full year was 363.1 crore, and EPS stands at 283.01 rupees per share.

Let me now move to cash flows and working capital, which are key focus areas for us. For the financial year FY26, the free cash flow is negative at 49.4 crores, driven primarily by higher working capital during the year along with the increased capital cash outflows.

Capex cash outflow for FY26 was 397.1 crore. Financing activity was 21 crore, including a net increase in long-term borrowings of 60.9 crore.

Closing cash balance of FY26 was 75.4 crores as compared to 130.4 crores at the end of the year. Working capital days stood at 137 days in quarter four versus 107 days in quarter four of FY25, mainly driven by higher inventories and receivables.

We believe that this should normalize in FY27. Net debt remains negative at -157 crores, supported by cash balances of 353 crores.

Our long-term borrowings at the end of quarter four was 197 crores. Our approach to capex remains disciplined, phased, aligned with our strategic priorities, and executed with a clear focus on returns and long-term capability building.

In terms of our priorities, our priority is to ensure that approved capex translates into clear execution milestones and business outcomes. Overall, we continue to maintain a strong financial position.

The balance sheet remains resilient with comfortable liquidity, and we remain focused on preserving flexibility to support both growth investments and have operational resilience. At the same time, we are sharply focused on improving our cash conversion.

Working capital discipline remains a management priority, and we continue to take actions to kind of work on our collections, inventory normalization, and tighter controls so that our profitability translate into cash flows more consistently. Another related focus area is cost and process improvements, which we see as a structural enabler for sustainable profitability and stronger cash generation.

Across the organization, we are progressing on initiatives to improve productivity, reduce variability, strengthen our operating controls, and drive process standardization. This obviously includes tighter cost governance, procurement efficiency actions, and operating discipline across functions aimed at protecting margins, improving our predictability, and building a scalable operating model as the business grows.

Now given the recent developments in the Middle East, we are closely tracking raw material coverage and price volatility and are taking actions to protect our continuity of supplies and manage the cost pressures. As in the past, the presentation shared along with the press release contains additional details.

With that, I would like to hand over the call to Saharsh for his remarks. Thank you.

Thank you, Abhijit, and good evening to everyone on the call. The numbers are out there, and Abhijit has taken you through them in detail.

What I would like to do is spend a few minutes on talking about what's not explicitly in these numbers, but is very important for all of our investors to understand. While we have not given formal guidance in the past, and we do not intend to do so going forward, we did indicate earlier that FY26 would be a year of strong growth when viewed against FY24, especially since FY25 represented a period of slight degrowth.

With the strong performance delivered in Q4, I'm glad to note that this outlook was accurate. We have achieved the kind of performance that we anticipated at the beginning of the year.

In fact, slightly better than expected, aided by the favorable exchange rates. As we look at Q4 and FY26 through this more favorable lens, it's also important to recognize the inherent lumpiness of our business.

The same lumpiness that resulted in a record-breaking Q4, if you recall, also made the previous quarter, which is Q3, a relatively muted quarter. It's worth stating the obvious.

The lumpiness does not recognize financial year boundaries, right? It doesn't recognize, or it doesn't care about March 31st.

Even sometimes a full year may not turn out to be exactly as expected, although in this case, we did have a strong year as expected. Whatever happens even at a year level, what I would like to point out is that it should not detract from the long-term growth, prosperity, and resilience of the business.

In the short to medium term, our business visibility continues to be anchored by commercial and near-commercial molecules. This gives us a strong degree of confidence over the next few years.

Alongside this, while our GDS business was softer in FY26, we see good growth potential ahead and have deployed substantial resources across development, customer engagement, and capability building to support the growth in the short, medium, and long term. Our focus on execution discipline, customer satisfaction, and protection of business fundamentals is central to ensuring that this phase of growth is delivered with minimal disruption, despite the inherent variability in quarterly performance.

Beyond this, long-term growth requires an enterprising vision, a decisive strategy, and careful capital allocation. Much of the work we are doing today is foundational in nature, strengthening capabilities, scale, and technical depth so that we are well-positioned to attract the right opportunities over time.

The outlook for the coming years remains promising. Over the next two to three years, we have visible growth driven by our existing pipeline.

At the same time, we are laying the groundwork for growth beyond this horizon. A key element of this is our investment in large-scale peptide commercial facilities.

This will help us move into a more differentiated space, focused not only on peptide fragments, but also on peptide APIs, thereby expanding both the scope and quality of the opportunities we can pursue. Alongside manufacturing, R&D remains a critical pillar of our long-term strategy.

The new R&D center will be an important step up in our ability to support complex programs across development stages. It will strengthen our scientific depth, enhance cross-functional collaboration, and improve our ability to scale customer programs from early development through commercialization.

The investment is not just about capacity addition, it is about building the kind of technical and problem-solving capability that will allow us to engage earlier and more meaningfully with our customers and support larger, more complex programs. On the business development front, our efforts over the last year have been focused on improving both the quality and maturity of opportunities entering our pipeline.

We continue to see encouraging traction across customer segments, including increasing customer engagement on larger and more complex programs. While conversion timelines in our industry remain long and nonlinear, the nature of discussions we are having today aligns well with the capabilities we are consciously building across R&D, manufacturing, and project execution.

The objective is clear: to prioritize opportunities that offer sustainable, high-quality growth, even if that means being selective and patient in the near term. As we experienced in FY26, growth over the next two to three years is also expected to remain lumpy.

Not every quarter will necessarily show progression. However, if performance is assessed over a longer horizon, say 10 to 12 quarters, a clear trend line should emerge, consistent with the growth outlook that we have always outlined.

On the margins and returns, FY26 benefited from favorable exchange rate movements. While our ROCE remains healthy, it is expected to moderate as we enter longer capital deployment cycles.

We are comfortable with this as long as these investments strengthen our long-term growth engine and competitive positioning. Today, the focus, and in some respects the key constraint of the business, is twofold: first, building an execution engine that can continue to perform reliably at scale; and second, ensuring that we bring the right kind of projects that support high-quality, sustainable growth.

Over the last year, in addition to strengthening our key account management structure, we've also put in place dedicated resources to support larger projects across key operating functions. This enhances our ability to serve existing large customers effectively, while also building capability in anticipation of similar projects in the future, including deeper engagement with big pharma.

Before I close, it is important to briefly acknowledge the risks and uncertainties inherent in our business. Our industry continues to be exposed to factors such as demand variability, customer ordering patterns, regulatory timelines, geopolitical developments, and supply chain volatility.

Given the nature of our business, revenue realization can be uneven, and the timing of project progression, particularly for complex and long-cycle programs, can vary. Additionally, as we embark on larger and longer duration capital deployment cycles, execution discipline becomes even more critical.

Delays in customer programs, changes in development priorities, or shifts in market dynamics can influence both short-term performance and capital productivity. That said, our focus remains on building resilience through diversification of the pipeline, strengthening operational execution, prudent capital allocation, and maintaining a strong balance sheet.

While these factors may create variability in the near term, we believe that they do not alter the fundamental long-term opportunity of the business. To conclude, while individual quarters will continue to reflect variability, we remain confident in the direction of the business, the quality of our pipeline, and the foundations we are putting in place for long-term value creation.

Thank you for your continued trust and support. We'll now be happy to take your questions.

Thank you for giving me opportunity, and congrats to the management and the team for the great set of numbers. First question, obvious question I have is on the performance of our CDMO business for the quarter.

I agree with you that there would have been a benefit of currency depreciation, but it would be to the extent of 10-12%, right? Still, our growth looks phenomenal over year-on-year basis.

What is driving this? Is it the existing commercial projects or have we added any new product in the commercial side?

Was there any bunch of orders from the last quarter which would have also helped during the quarter? Yeah.

Thanks for the question, Amey. Yes, I think currency definitely helps, especially because we had a strong Q4 and a lot of shipments happened as the rupee depreciated.

I think we did see a chunk coming in, but yes, I think it doesn't really take away from the inherent growth we've seen in the business. I think the contribution has come from the products we've been looking at in our pipeline, Amey.

I think we had one new commercialization this year, but we've also had ramp-up of volumes of previously commercialized products. Those have largely driven the growth.

We continue to have newer molecules enter our pipeline. We're probably looking at one commercialization in FY27, and maybe one or two more later.

These don't really come in at a quantum that really changes the trajectory of the growth. I think it's really the existing pipeline and the recently commercial molecules and the volume growth in those which have driven this growth.

There's some volatility. That volatility is just based on shipments.

It could get evened out a little bit, but it's nothing out of the ordinary.

Sure. To summarize, basically it is driven by the existing products with the help of one commercial launch which you had also indicated in Q3.

That's right.

Sure. The second question I have is on the peptide side.

The contract which we had signed and we had also given the notification, products look to be in the early commercial stages. What value add are we doing here as a CDMO first?

If the product move to the late commercials going ahead, they will continue to work along with us? How this contract is structured?

Yeah.

Amey, I think the contract you're referring to, I think, was an announcement made in partnership with our client. To be fully transparent with you, it's a very early stage program, and I would not really associate any near or mid-term revenue coming out of those products because we do have close to 8 to 10 peptide programs in our development pipeline.

Some are advanced, some are early stage. I would categorize the one you're referring to in the early stage.

These are being developed for various therapeutic indications. It will take at least a few years for a program like the one you're mentioning to give us commercial benefit.

The programs that Neuland would expect to be commercialized in our peptide facility are programs perhaps information on them are not available in the public domain. I just wanted to clarify that.

Sure. Additionally, when we are looking to grow our peptide business, what is our key selling point to clients?

Since we have added the client, Elaire Life Sciences, will that help us to add more clients going ahead to work on the similar platform? Is it the platform which we choose which can broader our clientele into the similar category?

How does the thought process behind the peptide business growth going ahead?

I think the pitch we make to peptide clients is that we've invested close to 16, 18 years in the peptide space, and we've kind of worked our way organically by making fragments, building blocks, unnatural amino acid based fragments, and then slowly moved up the value chain, making even peptide APIs. Our biggest strength is the fact that we have done a lot of process development for peptides in-house in Neuland.

We've always had peptide R&D in Neuland for several years, focused on process chemistry, not medicinal chemistry. This is a skill set that is very important when it comes to engaging with clinical stage peptides, especially APIs.

We were able to successfully showcase those capabilities, and once we showcase those capabilities and now we have also started investing and creating manufacturing infrastructure, it's becoming easy for our clients to partner with Neuland. That's kind of what's giving us traction in the peptide space.

Thanks for the opportunity. Hi, team.

It's always good to see the convex side of volatility and lumpiness. Excellent show.

I've got two questions. First is, Neuland has built strong capabilities in complex chemistry and peptides, but the industry's value creation is, in my view, increasingly shifting towards hybrid modalities like ADCs and fermentation-enabled manufacturing.

What do you see as Neuland's biggest capability gap in sort of participating meaningfully in that kind of an ecosystem? How are you addressing all of it today?

That's my first question. Thank you.

Hi. Hi, Sajal.

It's always nice to hear from you. I don't know if I would completely subscribe to the hypothesis.

I think that I would agree with the basic concept that more value is in complex chemistry, complex modalities, but I would probably put peptides into that category as well. I think today if you see the explosion happening in the GLP-1 and the peptide arena, I think some of these peptides, especially the innovator volumes, are going into multi-metric tons.

The commercial value for a CDMO business is running into billions of dollars per molecule. I would argue that the peptide CDMO opportunity is as or more attractive than maybe some of these oligo, ADC kind of opportunities because just based on my limited understanding of the oligo business, the oligo CDMO business is not as big as the peptide CDMO business.

That's because oligos have not reached the kind of scale. ADCs is again slightly different because there's a map component, there's a biologics component over there.

I think, yes, it is definitely a future modality from a CDMO perspective. I think the way Neuland is approaching it is that we are a small company.

I think we're barely scratching the surface when it comes to this business. I think we have a long runway of growth in front of us.

I think if we continue to sharpen our skills in the small molecule, complex small molecule space, we strategically get into the peptides and start making complex peptides in a meaningful way, and then we slowly start looking for other adjacencies. For example, a peptide capability can help you make linkers for ADCs.

Then you're slowly getting into the ADC space through the peptide capability. Then maybe through some strategic acquisitions, etc., you could climb yourself into these new modalities.

I would see a decade of growth by being invested in these current skill sets, including peptides. I would not say we should be limited to this area.

That's where I would agree with you that you should keep going into these adjacencies. I definitely see peptides as more compelling today compared to, let's say, an oligos or even some of these RNAi-based therapies.

ADCs, yes, I agree, but ADCs is a different ball game, and I think that's something maybe a future adjacency that we would pursue.

No, that's very thoughtful, as always, Saharsh. Thank you for that.

Second, a lot of newer enzymatic and bio-enabled manufacturing routes, they kind of look attractive at lab scale, but commercial manufacturing is ultimately constrained by yield consistency, purification economics, contamination controls, and of course the regulatory aspects are always there. Which of these do you believe is the biggest real bottleneck today, and where does advanced synthetic chemistry is still kind of retains a more durable economic advantage over these emerging biotech-led manufacturing routes?

No, I think it's very again, thoughtful question, Sajal. I'll just give you the businessman's perspective.

I'm not a scientist or a chemical engineer, but I think your encapsulation of the challenge is very accurate. I think synthetic chemistry based techniques gives far higher scale and are more reliable over long term.

The biological processes are always challenging. Just if you look at peptides, for example, 10, 15 years ago, the largest volume peptide would be say a leuprolide, maybe 100 kilos per year.

Today, some of the GLP-1s are made at a metric ton scale. The reason why the industry is able to make metric tons of peptides is because of the advancements in synthetic chemistry, our ability to maybe bypass these cumbersome downstream techniques and come up with modern techniques which avoid stuff like lyophilization, etc.

The reason that has happened is because academia and industry has invested a lot in chemical engineering techniques that avoid the use of these biological processes and have brought in synthetic processes. I think we as a CDMO cannot obviously make those kind of investments in fundamental research, but our R&D groups would follow those developments very closely.

Therefore, as new techniques become available, our goal would be to partner with these kind of knowledge-driven organizations and try to make them scalable. Short answer is yes, I think synthetic chemistry based techniques in peptides, maybe even in oligos, would be the area we would like to focus on.

I think there's a lot of growth opportunities over there.

Good evening. Thank you for taking my question.

Just two quick ones. First one is on the recent development, 1st of May, when one of your big customers of bempedoic acid, Esperion, has been taken over, or at least there's been a bid from Archimedes.

Just not getting into that transaction, but more from a longevity of this business, is there any change in course, you think, or the dedicated capex we put some time back? What are some of the messaging you are actually picking up from this transaction?

Because one of the key concerns from an investor perspective is what happens to bempedoic acid post-patent expiry sometime later this decade, right? Just want your thoughts on how this product is evolving.

Shyam, thanks for the question. Shyam, I think just given that these CDMO molecules are under confidentiality clauses, we will not be able to comment or acknowledge what molecules we make for whom and what the underlying transaction that you're referring to.

I think general comment I can give you, which might be helpful, is that, see, generally for all our CDMO businesses, M&A of sponsor companies is a very natural part of the business. I think a lot of biotechs get acquired.

Some of the biotechs we've contracted with have gotten acquired by big pharma. One, supply agreements usually have inherited clauses, change of ownership does not necessarily annul or create any kind of a disruption to the supply agreement.

Second of all, usually for these kind of CDMO relationships, customers are looking for securities of supply and making sure that the patients are getting the medicines. What we have seen from all our conversations with our CDMO customers is that typically no one wants to disrupt supply chains.

People are looking for continuity. I think any kind of disruption might happen if there is a clear performance problem or some kind of a strategic change.

Usually when these kind of M&A transactions happen, we don't see any immediate risks. Even if we were to see anything, then we would obviously not be able to comment on specific CDMO molecules, but we will obviously as a responsible company temper our outlook and modify our outlook and indicate if we see some short-term challenges.

For that, I would ask you to just revert back to the opening comments I made where I made comments about short-term, medium-term growth and our visibility of business from these commercial molecules.

Helpful. Thank you, Sahas.

Just second question just on outlook only. Should we rely on some of your past guidance on quantitative elements of the growth and margins?

We have talked about 18 to 20% CAGR over time and not pinning it down to a year. Also margins, is it better to look at H2 margins rather than Q4 margins as a place to start and if we were to look at fiscal '27 or '28, and so you want to talk about how should we look at, say, growth and margins, please?

My CFO started laughing at your second question, but I won't let him answer. I think the 18 to 20% is a fair assumption, not necessarily linearly.

We've always been a little bit conservative in terms of how we've looked at our margins. That's because how we fundamentally budget our numbers, whether it's exchange rates, raw material pricing, volumes.

We tend to be slightly on the conservative side, and therefore, the margins play out better than expected. I don't know off top of my head what the H2 versus H1 is, I don't want to comment on it.

I think you can see a trend line, Shyam. I can't give you a better prediction than that.

I would say nothing's changed fundamentally. I think things are looking slightly better than what we typically paint the picture to be.

Hi. Thank you for the opportunity, and congratulations on a very good FY26 performance.

Would it be possible for the management to provide the capacity utilization across the three units at the moment?

The current capacity utilization of two of the three units are close to between 85 to 90%, and the last unit is around 65%.

Okay. In the initial comments you talked about the longer capital deployment cycle now.

Can you elaborate a little more on this as to what are we thinking in terms of capex and the utilization of the cash that we have generated in FY26?

I think maybe I'll just give a answer, and then maybe I'll request Abhijit to add if there's anything after that. I think what we were alluding to is that as the facilities are getting utilized and we are seeing the business grow in scale, we are also looking at long-term growth slightly differently.

I think our planning, and I think the way we are thinking about capital allocation has become a little bit more long term from being tactical. I think just to illustrate this point, I think two, three years ago, we built a production block for a CDMO molecule, and we built that block because we had a long-term contract that was secure.

Therefore, for us, it was a very comfortable investment. Now I think for us, our thinking also has fundamentally started to change because now when you are at a 2,000 crore revenue and you're going to grow, eventually you'll be adding hundreds of crores every year, maybe 500 crores, maybe even in the future 1,000 crores a year, which requires a different level of preparedness in terms of creating a base, creating production blocks, and being ready to engage, especially with newer clients, clients like big pharma clients.

I think that's the game that needs to be played, and that requires a different mindset of capital allocation, which is what was being referred to in the opening remarks.

Very good evening. Am I audible?

Thanks a lot for the opportunity and congratulations on a great set of numbers. I wanted to have an understanding of what are the reasons for the leadership transition with Saharsh taking over as CEO and MD from [unclear] become a Vice Chairman?

Thanks for the question. Yes, I think the role change between Sucheth and me effective April 1st was part of a pre-planned transition.

Basically, the background is that as the business is growing, both Sucheth and I, as whole-time directors, promoters, were focusing on essentially similar parts of the business. Both of us were looking at the day-to-day business.

What the board felt as the business is ramping up, it would be more effective for the organization if one of us was to focus more on the day-to-day business and how the business is operating on a ongoing basis, and the other promoter focuses more in terms of the long term and areas that are important to the business, especially as we grow in size. That's how the roles have evolved.

I think for me personally, just given my role in the building of the CDMO business, and just to give you the background, I've been with Neuland for close to 19 years now, and my role in the company was essentially to build the CDMO business. As the CDMO business has been ramping up, we also felt at the board that it would be logical for me to drive the day-to-day business since I understand the business from an end-to-end perspective, and it would be more meaningful for Sucheth to take on a slightly long-term role.

He's been responsible for operating the Neuland Foundation, which is a new initiative that the organization is taking. I think as a organization that's manufacturing-oriented, we're also looking at enterprise risk, sustainability, and these are all areas that were in the past not really covered between both of us.

It's more of a role clarity and a role separation, but Sucheth also continues to be equally involved in the business.

Thanks a lot for the answer. My next question was, and you've answered this partially earlier so [unclear]—

Is it better?

Thank you. Thanks a lot for the answer, sir.

The next question is that as per the S&P Global data from March, the global PE, VC biotech funding has declined sharply since 2021. I understand that you answered partially, but how is this trend impacting your business, the RFQs and client inquiries, and how do you plan to navigate this trend?

Vivek, if I were to understand your question correctly, you're talking about how the funding environment is affecting our business, right? I think as we have said in the past, I think a lot of our business and our growth is driven more by molecules which are in the close to commercial and in the clinical stages, and a lot of the funding has affected more the discovery and the early phases.

We haven't seen that affect our business as much. At the same time it affects the pipeline and tunnel over a period of time.

The focus for us continues to be molecules where the IND is being filed, that is where they're entering Phase I onwards. I think there we continue to have good visibility, and irrespective of the funding environment, molecules with good data continue to do well.

I think our focus, the BD team's focus is such molecules. I think we have been fortunate that even our customers, some of their molecules have done well in terms of their data.

We don't see this impacting us in the short to medium term. Thanks.

Sir, thank you for taking my question. First question is on peptide facility.

We had earlier talked about this getting operational in July. Are we on track for this, and by when do we expect commercial quantities to start?

Do we already have firm contracts for this facility?

Yes, thanks, Ritika. The facility will be ready by July as per schedule.

There has been no change in the dates for that. We have projects that will ramp up in this facility, and we have visibility for these projects.

I would probably not go as far as to say that we have firm contracts because these are early stage projects, and yes, they are near commercial, but I think we will probably focus first on completing validations, qualifications, and go through that process, which is pre-commercialization, and then maybe we will in the same time get into contracts and stuff. I think we're very excited.

I think we have project visibility, there is enough pipeline to feed into this facility.

Thanks for the opportunity, and I've joined a bit late, apologies if I'm repeating the question. First question is with respect to the quarterly results or H1 results, however you wish us to look at.

Bringing in the context of past, there is volatility in the business. Any comments is that the nature of volatility changing, and it would be much less volatile?

How much of the Q4 results is kind of one-off, lumpy, etc., etc.? That's the first question that I have.

Thanks for the question. I think volatility and how long it will last is difficult for us to say because we're seeing a very dynamic growth in the business, and some of the newer molecules are also fairly high value.

Typically, volatility is brought about by newer molecules. The older molecules tend to be less volatile.

When the new molecules are also significant in terms of value contribution, then this volatility will continue. I don't even necessarily see it as a negative thing.

I think as long as we have investor alignment that this volatility is part of our business, I think it's something that we should be okay with. I would not see us going to a 25% times four kind of a situation anytime in the near future because the moment these newer molecules stabilize, then there's a possibility that some new molecules will come and they will bring in the volatility.

Sometimes these newer projects are also very high value projects. It's not like the base has become big, the volatility is reducing.

We are also finding it very challenging to kind of demystify the volatility. That's the reality of our business, and I would go back to the comment I made saying that look at a multi-quarter trend, and then make your deduction in terms of the growth rate and the margin.

I think that will give you a better comfort for your modeling and visualization.

Hello. Congratulations, sir, on the good set of numbers.

My question is for the CFO, Mr. Abhijit.

Sir, in Q3 concall, an individual investor has asked a question about inventory manipulation, but in the transcript, some words are changed which has changed the essence of the question. Whereas the audio on your website is crystal clear, and SEBI guidelines also don't allow these changes.

This looks like actual manipulation somewhere. Can you please justify this?

I'll have to check back on what you have mentioned and then revert back to you, Shilpa. I don't have the facts and figures right in front of me to react to your question.

Which quarter is she referring to?

Q3. Sir,

Q3 FY26 at 24 minutes, 26 seconds.

We'll check and get back to you.

Hello, sir. Congratulations on a great set of numbers.

Sir, you are explaining to one of the participants, Mr. Sajal Kapoor, about that we don't see that peptides are less complicated than ADCs.

I understand that peptides are mainly using GLP-1s, but what leads to the complexity, actually, if you can help me for a person, a layman like me?

Sure. Just full disclosure, I'm an electrical engineer, I might find it a little difficult to explain it technically.

I just want to clarify that to Sajal's query, I did not say that peptides are more complicated than ADCs. See, ADCs are a biologic molecule which is tethered to a small molecule using a peptide linker.

Even a rudimentary textbook definition will tell us that ADCs are more complicated. What I was telling Sajal is that peptides are very lucrative as a business, and when compared to the oligonucleotide business, I believe the CDMO business value of peptides is higher than the oligo business.

When it comes to ADCs, the molecules are far more complicated, and therefore I would be very clear to reiterate that ADCs are more complicated than peptides. However, I'll still respond that peptides are long-chain molecules, and they're made of series of amino acids.

They tend to be very delicate, and if they're not synthesized in the appropriate way, they tend to fold and they tend to form a lot of impurities. The synthesis of peptides is considered to be far more complex and challenging than synthesis of traditional small molecules.

When you look at the business from the prism of small molecules, peptides are far more complex, and therefore they're far more value-creating if you're able to make them. Because of the explosion of these GLP-1s for metabolic diseases and other indications, there are a lot of molecules out there that are peptides, and there is a need for CDMO services for these peptides, especially on the NCE side.

That's the area we want to target because we believe that as a small company, we have a lot of opportunity in that area, which is the point that was being made earlier to Sajal.

Hi. Over many quarters and years, actually, you've been very fair and consistent in guiding about the character of the business and inherent up and down character of the business, so that quarterly kind of precision that unfortunately investors are looking for all the time is something which is not inherent in the business.

You've been very, very fair and consistent in guiding the kind of rough, wavy trend that Neuland business is. You made a comment that compared to FY24, FY26 has finally registered a meaningful growth if we regard as FY25 is a blip.

When after all the ups and downs over this two-year period, the growth is about roughly 10% compounded over this two-year period when we measure it from '24 to '26. For all the so much volatility, relative underlying velocity of output finally is somewhat underwhelming.

Or am I being unfair in saying this?

Thanks for the question, Bharat. I think whether it's underwhelming or overwhelming, I think those are individual deductions and I think it's certainly not our place to comment on it.

I believe that the kind of growth we've demonstrated and the growth we aspire to is, I think that's what we are talking about. I think the 18 to 20% CAGR that we talked about is a potential that we see, and I think the kind of growth we have seen in FY26, where we ended at 2,000 crores, I think we talked about it on the base of FY24, which was sitting at about 1,500 plus crores.

Yes, I think when you pick a period of time or a frame of reference, I think the numbers will kind of not be as promising or as attractive as the management may portray it. Nonetheless, I think we look at a longer horizon, and in fact when I even talk to investors about 18, 20% CAGR, I always talk about it over a five-year period, and I always talk about it as aspirational.

I would just ask you to look at those comments in that context. I would not probably get into a debate in terms of whether this is attractive or not.

I think that's for you to decide. I think the business that we have built, I think, is very attractive, and I think the base we have today in terms of the pipeline and the potential we have is fairly strong.

I think it is an attractive business. I really don't want to either agree or challenge the hypothesis that you made.

Hi, Saharsh. Congratulations on a strong set of numbers.

Two questions from my side. Neuland is the oldest player in the peptide chemistry working on this thing from last 18 years.

When you see from the longer-term perspective, let's say five years, five plus down the line, and the kind of pipeline that you are having, the kind of capex that you are conducting, from an investor's perspective, from five years or more than that, is it fair to assume that the capability that we are creating, the capacity that we are creating has enough visibility to create one more Neuland in terms of numbers?

Could you just quickly repeat the question? I couldn't fully understand.

Sir, I will. Am I audible properly?

If you could just speak a little loudly and a little slowly, and you can keep the question short, but

yeah, please. Sure.

Saharsh, we are in the peptide capability from last 16, 18 years. We are working on that.

We have developed several molecules from basic to complex range. Now we are putting the capacity also.

From an investor's point of view, seeing the company from five years and more than five years down the line, does this category in itself has the potential to create one more Neuland in terms of numbers? I don't want to know the name of the specific molecule, specific capability, just what the company is building and how should the investor look at it from next five-year perspective.

Is it fair to assume that this category in itself has a potential to create one more Neuland in terms of numbers?

See, I think if you look at the market potential, I think we've also had outside consulting firms evaluate the space before we committed to our peptide investment. We were told that it's a $5-6 billion just the CDMO space, $5-6 billion market opportunity, and it has a very healthy CAGR as a industry because there's a lot of GLP-1s coming in.

It's not just about the weight loss drugs that have been commercialized, but it's also about the next-gens, not just from the large companies, but other companies as well. There is a plethora of development candidates which are peptides, and that creates a very attractive value proposition.

I think the short answer is that it has the potential to create another Neuland for sure. It may take a few years.

It may take more than a few years. I think that really depends on the nature of the opportunity.

I think from Neuland point of view, I think we're looking at this business as a current capability plus peptides. We're not really looking at leaving our small molecule capabilities.

We're looking at adding that on. We think there's a lot of magic that can happen between small molecules and peptides because a lot of also work you can do on the small molecule side which feeds into the peptide business.

I think aggregately, it will be a very exciting business model. How big this business can be, I think really depends on how the opportunities play out.

Our goal is simply to just be kind of on the forefront at least from our part of the world and make investments, be ready, and create the opportunities. We really have to see how it plays out.

This is kind of like the CDMO story we were talking about five, seven years back when the CMS business was 10, 15% of our total revenues. We knew that it has potential, but we were not quite sure how it would scale up.

I think we're in a similar kind of a situation with peptides where we believe it will grow, but obviously we also don't want to get ahead of ourselves by making it sound concrete.

Yeah. Good evening, sir.

Sir, how we are using the AI for our operation, for manufacturing processes? Are we gaining some advantage because of using the AI?

Raghunath, thanks for your question. I think at this stage we are, in terms of manufacturing, we are still exploring.

I think there are certain areas in say R&D and certain other operations where we have done a few pilots. I think that is where we are at this point of time.

I think there are three basic layers of AI, and I think the base layer, which is trying to get repeat tasks or tasks which are kind of redundant, if you can get AI to use them. I think R&D is definitely one area, as Sajeev talked.

In manufacturing, I think the only area that we are exploring is if we can get AI to scan a lot of manufacturing data and be able to point to where the root cause of investigations are. I think that's an area that's being explored.

I think it's still very early days for that, but we're very committed towards bringing in AI applications meaningfully into the business.

Good evening, everyone. Thank you once again for your interest in Neuland and for your questions which helped us to also answer as well as speak a little bit more about the business.

Even as we probably haven't been able to answer all the questions in the queue because of the paucity of time, please do reach out to Ravi of EY in case you have further questions. With that said, good evening, everyone.