Thank you, Pari. A very good evening to all of you, and thank you for joining us today for Viyash Scientific Limited earnings conference call for the first quarter of financial year 2027.

Today, we have with us Dr. Haribabu, Managing Director and Group CEO; Mr.

Rajaram, Executive Director and CEO Animal Health; and Mr. Ramakant, CFO of the company, to share the highlights of the business and financials for the quarter.

I hope you have gone through our results release and the investor presentation, which have both been uploaded on our website as well as the stock exchange website. The transcript for this call will be available in a week's time on the company's website.

Please note that today's discussion may be forward-looking in nature and must be viewed in relation to the risks pertaining to our business. At the end of this call, in case you have any further questions, please feel free to reach out to the investor relations team.

I now hand over the call to Dr. Haribabu to make his opening remarks.

Thank you, Abhishek. Good afternoon, everyone.

Welcome to Viyash Scientific investor call for Q1 FY '27. Thanks for taking the time to join us today.

I'm happy to say that Q1 FY '27 is again a very good quarter for us, and it shows that not a one-quarter story, but a company which delivers consistent results quarter after quarter. Our integration is now complete.

This will be one of the few successful integrations you can find in the industry, and that too in record time period. Starting with the quarter performance, revenue from operations for Q1 FY '27 was ₹946 crores, grown by 20% year-on-year.

EBITDA was ₹205 crores, grown by 59% year-on-year, with EBITDA margin at 21.6%, expanding by almost 530 basis points over last year. Profit after tax was ₹79 crores, which has more than doubled year-on-year.

Our EBITDA to PAT conversion is showing good improvement both year-on-year as well as quarter-on-quarter. Our balance sheet continues to show improvement.

Net debt has come down to ₹86 crores, and net debt to EBITDA is now 0.1x versus 0.24x last quarter, and almost 1x a year back. In four quarters, we have gone from a leveraged combined entity to a company which is virtually debt-free on a net basis.

This gives us tremendous opportunity with respect to brownfield expansion as well as exploring inorganic opportunities. Coming to segment performance, our animal health formulation business continues to grow very strong across all regions, and we believe the growth will continue with our continuous focus on new product launches, geo-extension for our existing products to other countries, expanding R&D, and accelerating new product development.

We continue to invest in expanding our manufacturing operations. We are also seeing strong growth in domestic market as well, up to 60%, and here we are looking to expand our field force and product portfolio further to grow aggressively.

Coming to human formulation, our US business has grown 60%, showing results of our efforts to moving towards backward integrated, more complex products that is now translating into real growth along with profitability improvement. API revenue has been broadly flat quarter-on-quarter due to timing issues on account of raw material price volatility as customers were in wait-and-watch approach.

As all you guys know, the war is continuing, nobody knows when it's going to end. During the June, most of the customers wanted to wait and see how it's going to work out.

Now we see good traction, a lot of orders are coming back, and I can see this quarter is going to the best quarter for API for us. Coming to where we are investing for growth, we have signed SPA for Bioforlife acquisition in Italy, and we are expecting to close acquisition in next few months, basis on fulfillment of certain conditions as per the agreement.

This acquisition, as I mentioned on previous call, aligns with our focus on companion animal as number one strategic growth area for the next five years. Bioforlife gives us direct market access in Italy, one of the largest companion animal markets in Europe.

It comes with a companion animal portfolio about 85 products, which can be extended to our core markets, and sales force with about 85% vet clinic coverage in Italy, plus strong local talent. Combined with our BI partnership in India, which is now scaling up, our own R&D and manufacturing investments in companion animals, this is a very meaningful step in building the entire companion animal platform across world.

On farm animals, we are focusing on filling the white spaces in our current portfolio, as well as expanding the market for existing products to other geographies. We want to focus our new product development on molecules which have potential across multiple geographies.

For human formulations, as I mentioned earlier, we'll continue to focus on first-to-file opportunities with focus more on high-potent complex formulations with fully backward integration support on key molecules. In API and CDMO, focus is on Day 1 launch, complex molecules, expanding our CDMO business to create differentiations.

We have strong relationship built with innovators across human as well as animal health, strong credentials in manufacturing, which helps us create a mutually beneficial partnership models on the CDMO side. To summarize, Q1 FY '27 shows continuity, sustained double-digit revenue growth, EBITDA margins around 20%-22% as indicated earlier, balance sheet now strongest ever in the history.

With this platform and this balance sheet strength, we are very well positioned to keep investing both organic in R&D and manufacturing, and selectively inorganic wherever we find the right asset, while maintaining the discipline on margins. With that, we'll now hand over to Ramakant, our CFO, to take you through the detailed financials.

After that, we'll be happy to open the floor for questions and answers. Thank you.

Thank you, Doctor. Good afternoon, everyone, and thank you for joining us.

I'm pleased to present the financial performance of Viyash Scientific Limited for the first quarter of FY '27. We have started FY '27 on a strong note, with continued momentum in revenue growth, significant improvement in profitability, and sustained expansion in margins.

Our performance reflects the benefits of initiatives undertaken over the past few quarters across businesses, along with continuous focus on operational efficiency and disciplined cost management. Revenue from operations stood at ₹946 crores, registering a strong 19.5% year-on-year growth and a 2.9% sequential growth.

Gross margin improved to 54.1% compared with 51.9% in Q1 FY '26, representing an improvement of approximately 220 basis points year-over-year. Adjusted EBITDA increased by 59.2% year-on-year to ₹205 crores, with EBITDA margin expanding to 21.6% compared to 16.2% in the corresponding quarter last year.

Profit before tax increased by 132% year-on-year to ₹112 crores compared with ₹48 crores in Q1 FY '26. Profit after tax increased by 115% year-on-year to ₹79 crores compared with ₹37 crores in Q1 FY '26.

Our finance cost declined to ₹12.5 crores from ₹20.4 crores in Q1 FY '26, reflecting the benefits of our continuous focus on balance sheet strengthening and debt reduction. Pursuant to the composite scheme of amalgamation and upon receipt of necessary approvals during the quarter ended 30th June, the company has granted 1.3 crore employee stock options, representing 2.8% of post-amalgamation paid-up share capital of the company.

This has resulted in an incremental expense of ₹19 crores for the quarter ended 30th June 2026. Profit before tax of ₹112 crores and profit after tax of ₹79 crores for the quarter ended 30th June 2026 are after considering the expenses on account of these additional employee stock options.

We remain encouraged by the strong start to FY '27 and continue to focus on disciplined execution and capital allocation to deliver sustainable and profitable growth. With that, I conclude my opening remarks.

Thank you for your attention. I would now request the moderator to open the floor for question-and-answer session.

Pari, we are good to take questions.

Hello. Can you hear me?

Yeah.

Thanks for the opportunity. I have a couple of questions.

Starting with the EU region, if you look in terms of the YoY growth on constant currency basis, EU revenue has been largely flat. Anything to highlight over here and what would be the outlook?

Raja, you want to explain? EU region actually Q1 showing 13% growth, what he is saying actually.

In terms of the EUR, constant currency, if we look, €16.8 million would be the sales figure versus 1Q FY '26, €16.9 million. On a euro terms, EUR terms, it has been flat.

Actually if you look at the fourth quarter tends to be a little bit more of a management of how the phase have gone, because on a full-year basis, if you look at it, the growth will be closer to 20% for the EU region. Some of it is more a bit of phasing between one quarter and another quarter.

By and large, we are growing volume over there, and the volume growth plus the pricing growth should get us back to the levels at which we've typically been, which should be closer to 18%-20% growth. This is more a question of how the quarter-on-quarter looks.

Really the way to look at some of these businesses is on a year-to-year basis, because EU is a set of markets where one market may in one particular quarter show a little bit of a lower sales than the other quarter.

Is there any seasonality in terms whether 1Q is lower versus, let's say, 4Q?

Generally, third quarter is better.

We generally have a peaking around third quarter, second, third quarter. It's also a question of some businesses are, which are tender-linked or some of them are linked to outbreak of, vaccination-related issue.

You could have a bit of a movement on that. Yes, you tend to have a higher sort of growth coming typically in quarter three and a little bit in quarter one.

Yeah. Then quarter four.

You're really talking of growth. From a growth point of view, if you look at it quarter-on-quarter, it is more a question of phasing of what was last year same quarter versus this quarter.

There's nothing which indicates that, we are this is anything which is disturbing. It's more like a steady volume plus pricing plus foreign exchange growth.

Yeah.

No. Actually, I was comparing on a YoY basis only, not just on a quarter-on-quarter basis.

YoY also it is flattish only in EUR terms.

YoY I think you're saying on FY—

1Q FY '26 versus 1Q FY '27.

Yeah. That's what I'm saying.

On the quarter very specifically is more a function of the phasing of what kind of contracts may have been there in the respective two quarters. The way to look at it is really on a full-year basis, which is when you will have some movements between different quarters.

EU continues for us to be a market which is closer to an 18%-20% kind of a growth.

18%-20% kind of growth on a INR basis, right?

Or EUR or— On an INR basis. On an INR basis.

Also

as few of the European countries, we started building last few years. Our major countries like Spain is doing extremely good, but few other countries like Bremer, Benelux where we are building.

That's taking some time, but we are very confident this year we'll grow much better.

Got it. In terms of emerging markets, emerging markets has actually surprised positively in terms of growth this quarter.

We were looking at more of a mid-teens kind of a growth, but on a constant currency, let's say, if we go on a dollar terms, it has grown almost around 23 odd percent. Do you expect this momentum to continue or what were the drivers of such a strong growth?

Emerging markets mainly Turkey, Brazil, we have very strong product pipeline, of course. Few launches also happened last quarter.

Both countries started growing volume, because from last year, we are seeing the volume growth. Earlier, Turkey used to be only pricing increase.

Last few quarters, we see good potential to growing volume. Looking at the volume, looking at all our product launches, we are confident to grow close to that.

That's how we see. Both markets are doing extremely well.

These are the three countries: Turkey, Brazil, Mexico. All are doing extremely good on this business.

Got it. If I may, there are a couple of questions.

In terms of, let's say, the US business also has seen a very strong growth. Albeit on a lower base, anything particular to highlight why was almost around 45% YoY, 6% on a QoQ basis growth in dollar terms?

As I mentioned earlier calls also, with US, we've been tried to restructure a little bit last two, three years. Post-COVID, we struggled a little bit pricing issues since we had manufacturing in US.

That's how we started moving volume products to India, and also couple of products we tried to fully vertically integrate. Those actions happened last year.

Couple of products started shipping from India with our API. That's where margin profile improved, and also we are able to maintain our market share.

Last year, of course, we had one good launch. Still, we are having 50%-55% market share.

These are the few things changing the strategy, moving volume products to India, full integration with APIs, and adding few new products. R&D also stepped up actually.

Our R&D revenue also itself slightly improved. All these actions actually worked out very well this year, and it's going to work on that.

If you ask me, is it going to 60%, answer is no. It's pretty stable.

We have very confident now actually to grow this business on that, because most of the products, whatever we develop or commercially launch goes with fully integrated thing, and all volume products, we tied up with Indian manufacturers strategically. We can see strong growth potential in this business as well.

Just to summarize in terms of whether my understanding is correct, basically earlier let's say for few products the API is now getting manufactured in India, which was not happening earlier. Hence, we saw a margin increase in, let's say, FY '26 versus FY '25.

If I look at Appco's income statement, the EBITDA margins have sharply improved from 1 odd percent to 34%-35% odd percent. Do you expect this to continue, this kind of EBITDA margins for the US business?

We are expecting this will continue.

Okay. Also, if you could highlight in terms of how has been the animal API growth and the human API growth for the quarter?

API, as you see, it's a flat because of few reasons. We don't see any business loss in this.

Basically, last quarter, especially June, everybody expected war is going to end by June. In fact, it stopped in a few weeks, you know that.

When the raw material prices was high in last quarter, we also increased the price. Most of the guys where they have inventory, they tried to actually a little bit postpone their procurements.

It happened one month, but when they realized after July now it's not going to over, now we are getting back all product orders. This quarter is going to be very good quarter for API.

I think this quarter is going to the best quarter in the history for us. We see a lot of traction, a lot of enquiries to get back those APIs.

It's only timing issue of that few weeks. Everybody wanted to take that advantage, if raw material or solvent prices come down, we may reduce that.

Now it's stabilized. Everybody understood, realized.

Now this quarter is going to be good. It's only timing issue, nothing wrong in that API business.

This quarter is going to the best quarter for both animal health and human health. Of course, animal health, albendazole we have been talking capacity expansion, couple of approvals.

Now we are expanded capacity, we got US approval also for Vizag site. We also expanded at Vizag site, just started commercialization from July.

This quarter is going to be the best quarter for API.

Any color in terms of what would be the revenue run rate for the animal API business? If I remember, we had crossed the ₹100 crore mark.

I mentioned earlier will grow 20% plus, but we'll grow a little more than that. We'll grow more than 20%, I can see.

One for Ramakant, sir. Sir, if you could highlight in terms of how should we look at ESOP cost going ahead, whether it should be like a ₹5 crore the Sequent ESOP plus now the Viyash employees getting that ₹190 or sorry, ₹19 crore kind of additional ESOP for this year on a quarterly basis or it will increase from Q2 onwards?

Yeah. As we mentioned, this 1.3 crore additional options were granted during the quarter.

The charge for the quarter was about ₹19 crores. In total, ESOP cost for Q1 was about ₹25 crores.

Q2, Q3, and Q4, the number in total would be about ₹40 crores. From next year onwards, this will come down.

Next year, it's going to be flat, small maybe after completing this 1.3 crores. That why it's happened.

We had ESOP scheme in Viyash. When we merged, part of amalgamation, of course, it's was clearly mentioned in the merger document also.

Since actually it's allotted it's delayed, when the share price was high, it was at ₹230, that's that's the reason it's showing more. It's going to complete by mostly this year and next year first quarter something, but after that it's a routine, very small.

We don't see any big things or one-time things after that.

Next question.

Yeah. Thank you for the opportunity, and congratulations, sir, with excellent set of numbers, sir.

Sir, with respect to the kind of traction you're seeing on the API side, sir, is it possible that we will exceed the 20% growth for, say, maybe a couple of quarters now going ahead, and would that mean you would do higher on the whole-year basis in your guidance? For

API, I mentioned animal health, okay, we are going to grow 20% plus percentage. Overall, I mentioned actually double-digit, 13%-14% this year.

Mostly next year, it's going to increase, we have few launches. This year, we can expect double-digit, maybe mid-teens or that level together, because other API business is bigger, much bigger than animal health.

We see good traction, but human health, most of the products, big launches is going to come in future. This year, we can expect that mid-teens, 13%-15% kind of thing together.

Got it. Secondly, during the Investor Day, you had also alluded upon adding new tablet capacity for companion animal and building some more R&D capabilities as well.

How are those things progressing?

R&D already initiated last quarter. We hired people also, whatever approved, and equipment also we placed order.

Coming to the manufacturing, we finalized the design, mostly it's going to start next few weeks or next month, and target to complete by January, February to be ready for taking exhibit batch. We are on track on that.

Mostly it will be done by January, February.

Got it. Just one clarification from Ramakant, sir.

I think what you said is the ESOP cost could be ranging in roughly ₹40 crores for the nine months. Is that correct understanding?

Yeah. For FY '27, the total would be about ₹150 crores.

For FY '28, it will come down to around ₹25-₹30 crores.

Remaining three quarters, ₹40 crores each around, that's right.

Yeah.

Okay. I get it now.

Thank you, sir.

Good afternoon and congratulations, Haribabu, Rajaram ji, and Ramakant ji on excellent performance. Hello?

Yeah. Thank you, Bharat ji.

Please continue. Yeah.

Sir, I have one, two question. One is particularly you stated in your opening remark about growing the business of high-potent human healthcare.

If you can give a little more color, what kind of a current run rate is and how do we see what is the capability that we have and capacity also we have built up, and I understand it's a more complex and will have a better EBITDA margin also. If you can give a little more color on that.

Sure. High-potent is mostly oncology products.

We started building that capability two years back API, last 18-24 months. We built R&D potent lab, we built manufacturing, of course.

We have three modules, and we started developing a lot of products last two years.

That's

API thing, and started selling, and we partnered also with many customers in the form of partnership or CDMO or direct selling. That's a one of the core business for future.

Recently, last 12 months, we also initiated the formulation development and partnering with that. As I indicated earlier also, we are investing on formulation R&D high-potent lab.

It's done now, it's going to be operational. In fact, last week, we completed high-potent formulation development lab.

We started actually all high-potent products formulation, and also we tied up with one of the strategic manufacturer who is having oncology manufacturing site. We aligned with R&D, manufacturing, we started working with partners.

These things, you have to keep in mind, it's a long-term. All these products, high-potent products, unless you start developing minimum 5-7 years early patent expiry, will not able to get the business.

Most of the revenues, whatever we developed APIs and partners, it's going to start from '29. The big products revenue with the formulation, it starts after '30, 2030.

We geared up now. We have R&D, we have manufacturing, and also we have couple of partners.

We are waiting for filing and patent expiry, most important patent expiry. We filed at least 5-6 products APIs already.

The first product we are expecting in '29. If you get there also there's opportunity for exclusivity that product.

If you are lucky, if you get exclusivity, that's a big thing. Majority revenues are going to be long-term after '30.

Okay. How many products we have in this pipeline, first-to-file also, which you said?

I think last time, I indicated API multiple products, first-to-file and a few formulation. I don't have exact number, but at least 50% of our portfolio is either first-to-file or first-to-launch.

Okay. One more question just only for Ramakant ji.

Ramakant, how do we see interest cost from here onward annualized, and second thing, I understand last time Doctor mentioned that how we see depreciation side. I

okay, I can explain you a little bit. I'm also learning little finance now.

The depreciation, goodwill amortization, you must have seen every quarter ₹25 crores. This year, first quarter ₹25 crores, next quarter is going to be ₹10 crores, close to ₹10-₹11 crores.

After that, you can see that ₹25 crores is not going to reflect depreciation. Third quarter onward next quarter, I think you can see ₹15 crores benefit.

Third quarter onwards, that ₹25 crores is going to be PAT conversion. The interest rates, today we are working and optimizing a lot on those things.

Of course, you can see our finance cost also is coming down continuously. We are trying to restructure where high interest cost.

Last year, we did Sequent India debt, we restructured. Now we're currently working with Ireland interest restructuring.

We're working various things on that to reduce interest burden as well as tax portion. I think you can see next year, it's good.

We are at par with any big companies in that interest, we are not paying too much on those things even today. We are going to save more on that.

Yeah.

Okay. Thank you and all the best, sir.

Thank you. Thanks.

Yeah. Thank you for giving me the opportunity, and good afternoon, team.

Just a couple of questions from my side. First is, as Viyash moves from integration now into much more complex phase of R&D, manufacturing, geographic expansion, and M&A hopefully, what are the few non-negotiable principles that management uses to ensure that growth does not compromise execution, quality, and cash generation?

Thank you.

If I had to put it three things, one is compliance. No second thought and discussion, whether it is regulatory compliance, finance, statutory, or quality compliance, or EHS.

There's no second thought on that, the governance thing. As you mentioned, we are actually going in multiple complex area, but in fact already we are in most of the things.

Most of our team is very well experienced on those things. If you see complex products like onco, we have been doing last two, three years, and entire team is very experienced.

We know the market, we know the products. That's not the thing.

The second thing, if you see that combined company, overlap is very limited to the API. The formulation, it's still animal health and human health is going to run paralyzingly.

These are the two, three things. Compliance, we never compromise; governance, we never compromise.

Of course, the financial discipline also is most important. After seeing that Sequent story four, five years back, we know what we can do, and we can see a lot of opportunities keep on coming on M&As.

We always look at only whatever is going to fit into our strategic direction defined even our Analyst Day, whether companion animal or CDMO or actually complex areas, we are going to stick with that. It's not just go and acquire since our balance sheet's strong, go and acquire to add numbers.

That's not the plan. It's only whatever is going to fit into our strategic direction, that's going to be that, whether it is inorganic or organic expansions.

Hope I think I clarified your question.

Yes. No, that explains.

M&A is one of the key areas, obviously, because if we see the history of Sequent, the earlier management used to pay single-digit EV/EBITDA for most of the acquisitions, but again, it depends on the quality and the strategic fit. Valuation alone can never be the criteria.

You answered all my questions, Dr. Haribabu.

Thank you. My second question is, given the long gestation periods and uncertainty in pharma where uncertainty in terms of where the downside from major capital allocation decisions can take years to emerge because the game is the clock speed is such that it's a long-cycle game.

Capital allocation today may not deliver the desired outcome or may not even signal green or red for many years. In that context, what do you consider an appropriate level of personal economic exposure for those making such decisions?

Does the current ownership, senior management, I know Carlyle has got significant ownership, how do you reflect that principle within the organization, not just at the senior management level, but also at the middle management level? Because whatever as a team the decision is being made at the management level then presented to the board, the downside, if any, may not emerge immediately.

That's the kind of question I have. Thank you.

It's a long question. Thank you for that.

First thing is this company, whatever decision we take, decision to consider the long-term growth for the company, not based on the investor, whether the management or Carlyle or XYZ. Whatever we have been doing last two years investment, we never compromise on the short-term and long-term benefits for the company.

When you say the long gestation period, okay, huge capital thing, when you're doing for new company, new setup, for example, if I am doing only high-potent separately as a separate vertical, okay, that investment is huge, there is a lot of risk involved in that because of gestation period is high. In our case, if you see, today business is 90% is a matured business where we don't need to do too much capital allocation.

Whatever we are doing actually, if you look at existing business versus what CapEx we are going to put, it's not substantial. That itself existing business is able to take care of all these things.

Because of that, we have large portfolio and we have multiple geographies, multiple businesses where there's no dependency on either one country or one product or few products. That's where risk is already mitigated, and our new capital allocation is not that much compared to our existing business.

That's where I don't see much risk. Whatever you are putting the CapEx, whatever we indicated, I think ₹250-₹300 odd crores for a year, that's not the big looking at the company's size and business.

That's where I don't see any risk on that. One is investor perspective, other company perspective, I don't see any risk on that perspective.

Looking at our size, our investments, I don't see that. Thank you.

Yeah. No, thank you, Dr.

Haribabu. That clarity of thought is amazing and really appreciated.

Thank you so much.

That's

all from my side.

Thank you.

Yes. Thank you for the opportunity and congrats on the excellent set of numbers.

Sir, one question is on the minority interest. Last year, we had a 18% minority share on pre-minority profits, right?

How should one look at minority interest going forward?

We are evaluating continuously that we have minority share in two geographies. One is US and the Spain.

Since last we were busy few quarters with integration, we were busy few quarters actually to finish our roadmap for strategic direction. Now we have clarity what we are going to do.

We're evaluating continuously whether we can buy back, that's not a issue today. Still we are exploring whether to buy back today or actually when there is a opportunity to invest M&A to do that now, we are exploring.

Next 1, 2 years, it's going to be acquired 100%. That's what our plan.

Next 1, 2 years, we never know. It may happen soon, but outer limit, I can say 2 years we're going to do that.

Meanwhile, we are looking at various opportunities like Bioforlife recently. We're also exploring if something comes up to accelerate our strategic growth areas.

We are exploring those things. Maybe we'll come back soon on those things.

Annually, how much outlay we should expect for this year or next in terms of pre-minority charge profits? Last year, it was around 18%.

How much, I don't minority—

Minority interest, if you look at for the quarter, is around 17%, and last year full year was about 20%. You can assume that it will be in the same range, around 16%-17% of the total profit.

16%-17%.

Fair

enough. Got it,

sir.

The CapEx you mentioned about ₹250 to ₹300 crore for the year,

right?

That should be the number we should walk with.

CapEx at minority thing? No.

The total CapEx is what—

No, CapEx overall. No, total investment on the gross block, you mentioned around ₹250 to ₹300 crore for the year.

That should be the number.

Yeah. Yes.

Okay. Sir, if I have to look at the business, the API portion basically, what will be the split between human API and the animal API within that?

Formulation also if you can provide how much is human and how much is animal health. No,

you can see the formulation whatever we reported even at Analyst Day. Europe, emerging markets, India together are the animal health.

Only US is the human health, what we reported, ₹126 crores out of ₹383 out of actually ₹554, ₹126 crores for human health formulation.

Okay.

API, we're at this point actually ₹100 crores run rate at animal health, but it's going to grow now. Today bigger portion is human, but animal health is growing very fast this year.

Got it. Within the human API, do you see the growth rate to increase?

You mentioned positive impact likely to be happening in Q2, but do you see stronger growth over there versus overall business?

Human health, as I mentioned earlier also, since we moved to more complex areas where products are coming out of patent little later, okay, but major growth is going to come from '28, '29 onwards. Till that time, we are anticipating 13%-14% growth.

Sometimes if you are lucky to get one or two products, when you're targeting for Day 1 launch, it's ended up actually one player or 10 players. If you're a lucky, one player, actually it's a bigger.

Looking at my experience, we expect next two years 13%-14%. Later '29, since these most of the complex products, more than 50% are first-to-launch kind of things, we'll have bigger advantage on that.

Animal health, since it was not Yeah.

Sorry?

Sorry,

that 13%-14% growth you're talking about the overall consolidated revenue or just human API?

API. Human, actually you can take to the 13%-15%, whatever it is.

Animal health, it's going to be 20% plus, but since it's a contribution is small actually, average you can take 13%-15% kind of thing. As I said, this most of the products, our 80% portfolio, we develop the new products, which are coming out patent later.

We don't do too many mature products, commodity products, that's not our strength. We stopped developing volume mature products.

We're more trying to do differentiated products where we can have good margins on that perspective.

Right. Animal health formulation, how should one look at overall pace growing?

It's good, but we mentioned to you $1 billion in 2032 altogether, it's going to happen.

Got it. All the best, sir, and thank you for answering.

Thank you.

Thank you.

Yes. Hi, sir.

Thank you for the opportunity. Sir, I just had one question on Europe.

We talked about 18% to 20% growth this year. Is that including the benefits of the new acquisition, the Bioforlife, or will those be over and above this 18%

to 20% growth?

No, This does not include anything of the acquisition. The acquisition is not yet closed.

We expect it to complete—

FY '28 will include

that. It will the thing.

In FY '27, I think a general sort of growth of volume plus price, even leaving out the forex, should take us into double digits. Then we'll see what comes out of the forex.

Understood. Sir, one more question.

The emerging markets business this quarter grew by 36%. Is it possible for you to break out this between what was the volume growth and then the pricing growth and then there is some benefit from currency, favorable currencies, if you can break that out?

We see good volume growth last quarter. Emerging markets, volume is grown by 25% plus 25%.

Majority growth came from volume. Of course, one or two new launches, but don't expect a volume is going to grow every quarter 25%, but we can see the good volume growth in these countries, markets.

Understood. Thank you, sir, for answering my questions.

Yeah.

Thank you, sir.

Am I audible? Please go ahead.

Gaurav, we can't

hear you.

Can we take the next question in the meantime?

Okay. Am I audible, sir?

No, still it's not clear.

Take next right now.

Yeah. Congrats on great set of numbers, sir.

My question is regarding human API. You said we have almost 50% of first-to-file opportunities.

If I'm not wrong, some of those APIs are mavacamten, neratinib. The brand TAM is around $2 billion, if I'm not wrong.

If you can highlight what is the target opportunity for us, sir, in terms of opportunity size for this first-to-file and what kind of market share we plan to take in initial years? No,

when you compare brand for API, that may mislead you. If I put it all our products or development pipeline, today brand is more than $20 billion kind of thing.

API always you have to discount depending on the API, how much actually it's going to price eros and it comes to generic launch. General APIs are going to price erode by 95%.

When it comes to oncology or this high-potent, we can expect at least 50%-60% price erosion. API contribution is around 20% of the formulation thing.

All these things, we always every product, whatever we try to do, we want to do as much as possible, majority market share, at least 25%-30%. Average, we are expecting 10%-15% market share when one product actually can do bigger, other product maybe actually depending on the competition.

We target always 10%-15% market share. It's very difficult to see based on the $2 billion actually brand today, then formulation price erosion, then API contribution, then 50%-60% erosion and we need to do product-wise.

We see our target is actually try to do Day 1 where we take reasonable market share, and most important, it's sustainability. If we enter Day 1, the chances of sustainability is high compared to coming as a alternate API supplier.

Got it, sir. Sir, my second and last question is, so as you said, next 2 years, we should expect around 15% to 17% kind of growth.

Then some of these first-to-file launches will happen. Is it we will have a better runway of growth from 2029 given our 2032 aspiration?

This 2032 aspiration, is it something which we are fairly confident of or this is something which is highly aspirational or we feel this is the bare minimum we will do given things will go on a better track from 2029, a better means some of these molecules going live?

I will not go either way, too ambitious or too conservative. We see the realistic.

If you calculate from FY '27 numbers, $1 billion is actually working out to 18% CAGR. We feel that's very comfortable, practical aspiration.

We have clear plans on that about organic and inorganic. There are two things if I club, one is 18%.

Second thing is looking at our balance sheet, we have flexibility to do some M&As, not just for sake of doing M&As. Doing to these together, I'm personally very confident to achieve that.

If not more, but definitely that.

Thank you and wish you all the best.

Thank you. Thanks.

Hello, sir. Good afternoon.

Thank you so much for the opportunity. Sir, my first question is regarding the acquisition in Italy.

Sir, once the acquisition is complete and we are able to leverage the capabilities in other parts of Europe, how much would it add to the top line in the next one year and the next two years?

It takes normally two years. How is the process it works, once we complete acquisition, mostly it will be done in next 2 months, 2-3 months.

Once you start that, you have to start registering that product into other countries. Our first phase of doing that is wherever we have front-end presence like Spain or Turkey or Brazil, whatever is accessible and have market, we are going to do that.

All this process normally takes 24 months odd. If you are lucky, few things can happen early.

The minimum expectation is 18-24 months. We can see bigger revenue coming from after 24 hours.

There's a two-way strategy. One is expanding those products into other region wherever it's possible.

We are doing a lot of new products we started, like we said actually R&D is ramped up now, it started developing companion animal products. We are getting ready our manufacturing plant by January.

We are preparing all bigger launches with full integration from '29 onwards. These are the products mostly.

One or two products are coming '27, that also we are targeting launch that one. That's the two way.

It takes 2 to 3 years practically. You don't expect actually jump from next year.

Whatever it is, a natural growth from Italy that's going to grow double-digit. Bigger growth is going to happen after 2 years by the time we complete all registrations and prepare for marketing.

Sir, after 2 to 3 years, what kind of top line will it contribute to?

All put together, we mentioned $150 to $200 million companion animal by '32. We didn't work out this particular thing because one is that this is going to use as a launchpad for Europe.

Europe actually how it's going to work, when you develop and file the product, you have to start filing one product. That country when the regulator is reviewing, it's extend to other markets.

This is going to be the bigger portion, not only Biofor products. The intent of acquisition is not only promoting those products, it's using as a launchpad for all those things.

I may not able to give you that separately those Biofor products, but we are going to grow bigger actually. Maybe you can expect actually definitely 25%-30% growth after '28, '29.

Of course, today also we are growing bigger than that, but the base is small. We see good potential there.

Sir, this is very helpful. Sir, how much does the API contribute to our top line overall?

Overall, API contributes, if I put this quarter, Ramakant?

₹383 crores is what we have.

It's all maybe put together 40% yearly maybe, 40%-45%. Around 40% you can expect.

Around 40% is current contribution of API to our top line?

Yes, yes. Whatever we assume this year close to ₹4,000, in that you can expect 40% plus percent odd, in between 40% to 45% quarter-to-quarter.

Right, sir. Sir, this API, it is partly animal health and partly human?

Yes, yes, yes. Majority human at this point, but animal we are growing.

Today it's maybe two-third human, one-third animal. Animal is going to grow faster now.

Whatever products we have for animal health is only 100% API or is there anything else as well?

Animal health, you have bigger formulation, right?

Okay.

I'm not getting your answer. Animal health, if you see, our bigger portion is the formulation.

We are expanding API now. We have API, but bigger thing is formulation.

Is that question or something? I don't know.

Okay. Okay.

Yeah. Thank you so much for the opportunity.

Sir, couple of questions. The first question is our acquisition Bioforlife.

Last time Sequent acquired Alivira, we had, apart from the purchase price, obviously we had a lot of issues, structural changes, local market stresses, there was restructuring, insurance payout. There were too many issues.

That's an experience that India Inc., right, not just pharma or Viyash in particular, but everybody who acquires Europe has an issue, right? The purchase price looks too cheap, but eventually the costs are too high to pay eventually, right, in the life cycle of the business.

In general, what are the guardrails you've had to purchase Bioforlife, because our past experience both in Sequent via Alivira acquisition and India Inc. experience for acquiring Europe has been terrible.

You're right. 5-10 years back, it's all we experience from that, right?

Even from my side also, we are seeing one acquisition. Those days, always Indian companies, we want to acquire cheaper and try to manage like India.

It never works out. Now all we experience on that, what is the complication, how it works actually.

You can't actually Indianize Europe operations. When you're working in Europe, you have to understand that Europe business right, and do it that way.

Earlier, 5-10 years back, whenever everybody acquired, we thought if products can move to India, and it never happens. We are very clear strategy on that.

Of course, it's a small thing. Most important, it's utilize our launchpad, and we know, and also there's no manufacturing, it's mostly brands there.

We have clear idea with earlier experience. We have taken care everything, we don't see any issue on that.

Now you can see last I don't know whether you have reviewed last few years Indian companies operating in Europe doing pretty well. It's not only us, but we know fully on that since do it.

Got it. Very heartening to hear, sir.

Sir, second question. The rate of growth will increase because of patent cliff both on the animal side and the pharma side, and animal side patent cliff is happening '28, '29 and pharma side is '29, '30.

Is that the right way to think about why the growth will accelerate beyond this year?

Talking API, most of the human API we have portfolio under development, it's up to 2040. Most of the products are coming to after 2030.

Animal health APIs, since there was some lag, we have taken products quick development up to 2035. Majority of the products in animal health, the bigger products are coming out patent from '27 to '32, '33.

After '33, mostly biological is going on. We are attacking both actually animal health as quickly as possible.

Most important, try to vertically integrate also formulation in that. Any product API, whether it is human or animal health, once you start developing the product, it's a minimum gestation period is 3 to 5 years.

This company is a new company, Viyash, we started 2 years. We can expect the gestation period 3 to 5 years minimum kind of thing.

That's how I always say the majority revenue is going to come from '29. We can develop and manufacture, that's not a issue.

The registration, tying up with somebody, all it and more than that, patent expiry, these things will take its own time. It takes minimum 5 years kind of thing.

That's where we see from '29 onwards, real new products revenue is going to come for us.

Got it. Very helpful, sir.

Thank you so much. Congrats.

sir. Thank you everyone for our continuous support.

I can tell we are in a good position. Our team is committed.

We are going to do good. That what I can tell you guys.

Thank you so much.