Thank you, Michelle. A very good evening to all of you, and thank you for joining us today for Vyash Scientific Limited's earnings conference call for the fourth quarter and financial year 2026.

Today, we have with us Dr. Haribabu Bodepudi, 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 and financial year.

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

Please know that today's discussion may be forward-looking in nature and must be viewed in relation to the risk pertaining to our business. After the end of this call, in case you have any further question, 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, and welcome to Vyash Scientific Limited investor call for the quarter four and financial year 2026.

Thanks for taking the time to join us today. Today is an important milestone for us as we are discussing first-time combined entity 12-months annual results.

Q4 FY 2026 is the strongest quarter in the company history. EBITDA surpasses 200 crores, FY 2026 EBITDA up by 59.6% and PAT by 1,324%, last year it was negative.

It's a good free cash flow, and most important, strong foundation for future growth. Fiscal year 2026 has been a transformative year for Vyash Scientific Limited, marked by the successful integration of business, operations, and corporate functions into one unified strong platform.

The integrated platform has strengthened execution, improved operating leverage, contribute sustainable growth, which reflects quarter-on-quarter results. As we enter FY 2027, we are very excited about our product pipeline, infrastructure, strong management team, and sustainable growth road map.

With a significant leveraged balance sheet, we are also actively evaluating selective inorganic opportunities in addition to organic scale up to further strengthen our platform and create long-term value. As we explained earlier, operationally we have taken multiple actions across all the businesses over last few quarters, which are reflecting in the results.

On the animal health formulation business, all regions are growing very strong, and we believe the growth will continue with our continuous focus on new product launches, geos extension for all our existing products to various countries, expanding R&D, and accelerating new product developments. Manufacturing expansion at Spain and debottlenecking capacity at Turkey manufacturing, which are very important to grow for future business, we have initiated, we are working on that.

Strengthened front-end team to expand business new markets and scale up existing markets. Many existing markets, we try to add products, we try to add people, in addition to adding the new markets.

Coming to the human health formulation business, I think it was a great year for human health formulation US. We had done fantastic job FY 2026.

Accelerating new product development and moving into complex products with internal APIs. As I mentioned earlier also, finished products, we changed our strategy last 2 years.

One is changing our product mix, moving into little more complex products, and all mature products, volume products, we try to internalize APIs, and also bringing manufacturing into India manufacturing. That's where we are able to sustain the products and grow.

Also most important, margins are growing. Recently, we initiated creating dedicated potent lab in R&D to take care of all our new oncology product development for finished products.

Coming to API and CDMO business, this is again one of our core business and strong business. Most important to note this year, animal health, all you guys must be tracking last couple of years, last 5 years it was stable, neither growing nor actually de-growing.

It was 350 plus or minus 10 crores business. The first year after 5 years, we are able to take it to 400 crores run rate.

We are very confident coming years it's going to grow very strong. Already we see the growth, and we are going to grow very strong in next coming years.

Most important, animal health, we relooked at entire strategy. Of course, that's a part of strategy of synergy exercise.

We identified few areas, execution capability especially on the manufacturing, and most important, R&D speed, efficiency, and portfolio development. We initiated all those areas last 6 months.

It's working very well on those things. We are able to develop couple of products already last 6 months, and we are covering product development up to at least 2035 patent expiry.

We see the huge potential to grow on that business. Other area, operational efficiency improvement, and we see tremendous improvement in animal health API operations last 6 months, and capacities are growing.

We are able to optimize. That's where it shows growth as well as margins improvement.

Coming to human APIs, like formulation business, last 2-3 years, we tried to optimize the various aspects, taking out commodity products, taking out little intermediates and converting into API business. We did a big exercise last 2-3 years.

That's how we are able to improve the gross margins drastically. Last year also, we did some optimizing of intermediate business.

All intermediates, whatever we're doing, either we are trying to convert into API and which, in fact, is going to convert into finished products. We started last 18-24 months and started getting approvals.

That's where you can see the growth near future. Other strong area for APIs are continuous development on the new products.

As I mentioned earlier call also, last 12-18 months, we moved out from general volume products to complex and little more high-potent areas. We were able to do large number of products validated and lock-in with many customers.

Launches are going to come near future and also in the long-term perspective. Whatever we developed last 3-4 years, we acquired this companies '21 and started rebuilding R&D from '22 and filing many products from '23, '24, '25, which started coming approvals now.

This year onwards, we are expecting reasonable number of approvals, which give good value for top line as well as bottom line. Other area where strategically we are focusing, of course we were talking CDMO different areas.

One of the area where we are strongly focusing with innovator business on the life cycle management. All you guys are aware, animal health almost 70%-80% goes to innovators.

We see the strong potential to grow near future. Whatever we are doing this year, I can expect next year at least 30%-40% growing innovator business.

Innovator business is quite sustainable and reasonably profitable business. That's where we are focusing, and we see a good potential to grow, and you can see '27 itself growing that business.

Finally, which is very important, of course, integration and synergies. As I mentioned earlier, teams have been integrated very well, whether it's operational or business, or most important, corporate functions.

Most important thing is entire team is fully charged up for future growth. That's where is my excitement personally.

Coming to the synergies, synergies are tracking pretty well. It's tracking better than what we anticipated during the merger, and we are continuously looking for additional synergies.

At this point, I will stop, and today maybe we will allow time for more questions or clarifications. With this, I will hand it over to Ramakant to take care of financials.

Thank you, everyone.

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

I am pleased to present the highlights of our strong financial performance for Q4 and full year FY 2026. I begin with the highlights for Q4 FY 2026.

Total revenues stood at ₹920 crores, reflecting a year-on-year growth of 19.1%. Formulations revenue increased by 28% to ₹499 crores, while API revenues grew 5% to around ₹384 crores.

Gross margin improved by around 236 basis points to 55.1%, compared to 52.8% in the same period last year. Adjusted EBITDA rose sharply by about 64% to ₹200 crores, with EBITDA margins expanding by 593 basis points to 21.7%.

Profit before tax improved significantly, moving from a loss of ₹37 crores to a profit of ₹125 crores in the current quarter. Profit after tax also recorded a sound turnaround, rising from [52?]

, rising from a loss of ₹32 crores to a profit of ₹56 crores year-over-year. Coming to FY 2026 full-year performance, total revenues for FY 2026 reached ₹3,420 crores, representing a growth of 13.8% over ₹3,007 crores reported in FY 2025.

Formulations revenue grew 18% to ₹1,866 crores, while API revenue increased 8% to ₹1,491 crores. Gross margins expanded by 321 basis points to 54.3%, compared to 51.1% in FY 2025.

Adjusted EBITDA increased 59.6% to ₹702 crores, with margins improving by 590 basis points to 20.5%. Profit before tax grew more than 26 times to ₹349 crores, compared to ₹13 crores in the previous year.

Profit after tax increased more than 14 times to ₹225 crores, up from ₹16 crores last year. Our balance sheet remains strong, supported by healthy liquidity and comfortable leverage position, which gives us flexibility to pursue growth opportunities, both organic and inorganic.

We continue to focus on disciplined working capital management, ongoing improvements in operational efficiency across the business. These strong financial parameters were reflected in the external credit rating upgrade, with long-term rating moving from A to AA- and short-term rating improving from A1 to A1+.

Looking ahead to FY 2027, our key priorities include strengthening merger synergies, improving operational performance, allocating capital efficiently to drive sustainable growth, further reducing debt, and maximizing cash flow generation. With that, I conclude my opening remarks.

Thank you for your attention, and I would like to invite the moderator to open the floor for question-and-answer session.

Hi. Good evening, everyone, and thanks for the opportunity.

Congratulations on a very strong set of numbers. Sir, could you kind of share some color on the CDMO business as to how we are looking to build that and how we are placed currently in terms of either number of clients or number of products that we are doing on CDMO side and any potential leads that we have to take this forward in a meaningful manner?

Sure, Vishal. Thank you, good question.

I explained last call also the same thing CDMO. CDMO, there are 3-4 models.

Working with innovators on NCE molecules, okay, where we start with phase 3, move to the commercial things. Second thing is start with the life cycle management.

Whatever their products, normally once it's patent expires, they look for alternatives. That's the second business.

Third business, now there's a lot of opportunities for specialty companies both in Europe and also in US big companies where they don't have infrastructure to develop and manufacture. They're coming and looking for CDMO business for specialty products.

First one, I'll come little later. The second and third, life cycle management business, now I can say at least we work with 8 to 10 innovators, big innovators, both human health as well as animal health.

I see good traction last 6-9 months. Okay.

Animal health, we were struggling a little bit on delivering their expectations, but now we have come out from those things. We are able to grow a lot life cycle management products in next 1-2 years.

With 8 to 10 customers, few products are waiting for approval what we initiated 2-3 years back. It's coming for approvals, start from end of this year.

Started getting approval for few markets, but entire global thing it's going to happen by end of this year. Like that, we see good growth potential near future.

FY 2027, I can say at least innovator business on this life cycle management, I am expecting to grow 40% as the base is around 200, ₹225 crores, some that. The third thing, specialty companies, last time also explained two-three models.

We develop the product, we manufacture, and they file the product, and we have some profit share also. We did almost 16-17 products, I don't have number, but it's a little more than 16 products on that.

All these are complex products coming for little later launches. Start from maybe '29 to '30 kind of things, and it goes up to 2035, '37.

That's we are adding continuously on that, and why we see the good potential on that. In the same category, we also adopted one more model on that.

Instead of just working, developing, and doing for them with some profit share, we also initiated few products, complex products, joint development. Pure formulation player where they have strong presence on developed markets, we are working with them with the joint development program.

We take risk on the API development and API quantities, and they develop formulation. One way it's very faster development since they are reasonably stronger formulation where we are strong on API.

The development cycle is faster and simple, and more important, it's efficient. We initiated 3-4 products, already we have done one product.

In addition to that partnership, few products last call I mentioned mature products. These two areas growing very fast, but Vishal, these things will take time.

When you are looking for CDMO, always it's a longer-term perspective. Any CDMO starts with life cycle management.

Once you have strong relationship build with innovator, then go to the first one actually where you can start with phase 3 and converts to the commercial. That's where we are building infrastructure.

Started building resources this year. That takes couple of years, Vishal.

That's our CDMO. I am very practical on this.

It's easy to say CDMO I can work with innovators, but I don't want to go into that. Whatever we say, we follow.

That's how second and third areas we are working very actively. The first one, NCE, it takes time, to be frank.

That's where we are building. We are looking at various opportunities.

If we get something on that area, some inorganic option, we are open to look at. We are looking continuously, but we don't want to acquire just for sake of showcase something or showcase numbers.

We are looking it's a good asset if something comes out. That's where we are looking on that.

Hope I answered your question, Vishal.

Sir, just follow-up on this basically. When you say specialty, you mean So you do only the API, right, not the formulation?

The API is basically maybe it's a complex API, is that how we should look at it, the specialty? The

two things here, Vishal. Formulation, we have our own setup already.

Most of our products we do that, right? I will explain that.

This is mostly this API CDMO partner with our formulation partners are reasonably complex or high potent, because as we have two high potent dedicated facilities. Capabilities starts from as small as half a kg or 1 kg to 100 kg batches.

These capacities very few companies are having that flexibilities. That's where our strength with R&D scientist we are able to do that.

The formulation, as I mentioned in my remarks, we are moving into the complex. That's how we are building our R&D onco lab, which is getting ready soon, mostly this quarter and next quarter.

We are moving into the complex products in formulation. The formulation is always partnership model with Vishal.

What we do today, we develop the products once we identify the product and once we come up with proof of concept, we go to the partners, all big companies, and we work with them. They pay for development and we continue development.

We get approval and we do manufacture, and profit share is mostly 50-50%. Formulation entire business what we do is directly or indirectly comes into the CDMO business, but it's mostly with the big generic players like Cipla or Dr.

Reddy's, all big players in the US. That's what we do.

Got it. Sir, like you said, about 200 crores of the business is currently CDMO.

Your top line in API is about 1,500 crores, roughly 15%. Over next 2-3 years, would this become I'll say about 30%-35% of your top line, the CDMO business?

Are these relationship with innovators very old, or you have recently built this relationship, and hence there's a scope for you to ramp them up much larger?

Most of the relationships are very old, long maybe last 10-15 years. The two things, one is relationship with Vyash, relationship with Sequent Animal Health, and also our past relationships where we work.

Most of us we worked in big companies, had experience with these guys. Most of the relationships are already commercially demonstrated.

This 200 crores business it's coming from last 7-8 years. The Sequent bigger business is that.

Last 6-9 months, that credibility or the relationship is improved further, where we focused on the quality on the R&D products or efficiencies, improving quality systems. That's where they started getting more comfort and looking for more products on that, Vishal.

To answer to your question, maybe 90-plus percent is our existing relationships. 2-3 products what we are anticipating approval this year, next year, those are the relationships we build in last 2 years.

Got it, sir. Thank you very much.

I'll join back the queue. Thank you.

Thank you.

Congrats on a good set of numbers. My first question is, there is almost a 14 crore quarterly gap between the reported PAT and the PAT, the minority.

Wanted to understand which subsidiary accounts for this minority interest, and what is the scale of the subsidiary in terms of revenue, EBITDA, and how is that going to grow in FY 2026? That's my first question.

I will start, maybe Ramakant can add if something I miss. We have two subsidiaries.

One is in US, which is human health formulation. We have manufacturing in US, of course, R&D in Hyderabad, manufacturing is a subsidiary.

We have majority control on that. Revenue, I think we reported that revenue is around 300 sorry, 425 crores revenue.

I don't know EBITDA, Ramakant, PAT, he can tell. Other subsidiaries is in Spain.

Both are having majority. We are working on that next 1-2 years actually to get the remaining thing.

We are working closely with that. We have option to buy back that.

I think Spain, Raja, correct me if I'm wrong, Spain by '28 I think there's option to buy

back.

US, we have option to exercise anytime. Okay.

We are looking at various options. Maybe we look at next 1-2 years on that.

The number specific to, I don't know whether you fact rate specific PAT numbers, but overall percentage is, maybe Ramakant you can explain. Yeah.

As Doctor mentioned, we own US formulation business. We own 60% of the stake and minority remains at around 40%.

Annual revenue is about 400, 425 crore. In Spain, again, we own 60%, and the revenue from Spain is about 550 crores for FY 2026.

Currently, whatever you just mentioned, about 20% of the EBITDA or the profit margins are coming from minorities.

20% of PAT.

20% of PAT is from these minority interest.

Got it. Just if you could throw some more color on the animal health portfolio.

You mentioned that for the last 5 years, it was kind of stable, and this year we'll grow and more contribution from the innovators. What kind of products and geographies are you targeting, and how much of it will be companion animals in this?

Also some color on the distribution partnership with the Boehringer Ingelheim for the India portfolio.

Two-three things in animal health portfolio what I mentioned. One is API.

API, we do majority business with innovators. It goes to everywhere, every geography in the world.

Most of the products what we have been doing till last year are the mature products, like albendazole, fenbendazole, a few mix of large animal as well as companion animals. Most of the products are mature products.

Last 2 years, of course, we started a few new products which are coming out of patent from '28 onwards. That's where our focus is going to be on API while expanding that existing mature product business, adding most important on the new API products, which are coming out of patents.

Up to 2035 we looked at. Our R&D started working up to '25.

We identified almost 15-20 products, and 5-6 products are very large products coming out of patents. If you know a little bit on the laners, those are the big products on that.

The another advantage of developing in API this, since we are in the formulation this thing, we can extend to the formulation development also. That's what we are doing.

That's where API business, few products existing clients are adding, and few products it's adding geography. Couple one or two products they're doing for only India.

Now they started qualifying last year for all other geographies, which are bigger geographies like China, some of the Europe countries. That's where that 100-odd crores whatever I mentioned is the existing products adding geography on that.

All new products whatever is coming, it reflects from maybe '28, '29 on that. Also it helps us to protect and lead formulation business with internal APIs.

Couple of products are specialized APIs. It's not easy to get sourcing.

Even if you get, there are very limited sources. That's how to protect and grow the product formulation we are doing that.

Coming to the formulation, there are two segments. One is large animal thing where we had a lot of focus till last year.

From last year, we are extending that focus to companion animals. On large animals, we're adding few geographies, like we are very strong in Spain, we are very strong in Turkey.

Last 2 years, we started expanding geo-expansion, trying to add all European countries because both sites are approved by EU GMP. Whatever products we're manufacturing, injectables at Turkey and powder solutions at Spain, we are expanding to Europe markets on the large animals.

The same way, the Brazil, we have manufacturing site for large animals, that we are expanding it to the LATAM countries. We see good growth from Mexico this year.

Other area, few other countries, Southeast Asia countries like Vietnam, we just started our front-end activity, that's one of the bigger market for large animals. Also we are exploring for Africa, all these things, large animal products.

Large animal products advantage is we covered almost 80%-90% of the entire portfolio in that segment. The growth comes on the market expansion on that.

Coming to the companion animal, which is the strategic growth area for us next 5-6 years, multiple things we are doing. One is with partnership with BI, that's the first step we started last quarter.

We want to expand entire our companion animal platform front end through this partnership. We are going to distribute entire BI segment, whichever are coming even future also we're going to do that.

With that platform, we are able to develop and enter the market. We expanding a lot in the companion animals.

We already initiated R&D expansion. It's going to happen next 6 months, and the product development is going to increase by 5-6 times whatever we are doing.

Few products today, it's going to add large number. At least we are looking at 7-8 products per year.

Most important, the products are coming out of patent maybe '29 or '30, and some of those products are differentiated products. As you guys know, cat and dog requires various combinations on that.

We are working on that little bit differentiation and new products. R&D started expansion.

We gave CapEx clearance for R&D on the companion. People, we started hiring, and most important, manufacturing infrastructure also we're adding this year.

That gives a lot of opportunity to expand companion animal. India, we're expanding front end.

Whatever product portfolio we are doing, we are going to launch everywhere. Both focus areas are at first phase Europe and India, and where we have presence today, strong presence like Turkey and Brazil.

This year, FY 2027, is a platform building for companion animals. R&D, manufacturing, and front end wherever is required, and also we are looking at some inorganic options for these things.

We are looking at few options. That's the broader area companion animals.

This is our focus area on that.

Got it. Thank you so much.

Thank you.

Welcome. Thank you.

Hi. Thank you.

Dr. Hari, pure play intermediates and API companies such as Alyvus Lifesciences have been reporting gross margins in the 55% to 60% range.

Now given Vyash's exposure to formulations, APIs, CDMO, complex intermediates, how should we think about the sustainable gross margin profile over the next 3 to 5 years? Do you see gross margins inching up from here?

We are already at a decent level, but when you add formulations, you expect a higher gross margin, otherwise there is absolutely no point doing formulations in addition to APIs.

Yeah. I think you answered the question yourself.

One is, when you say it's a decent gross margin, as I explained, intermediate and API stand-alone, maintaining 55% gross margin for generic play, it's not easy unless we have different strategy. That's how we followed last 2 years.

Our gross margins 3 years back, if you compare our EBITDA, gross margin, or PAT 3 years back, which was completely different. Why?

Because mix of intermediates and API where we sell and large business actually intermediate contribution used to be much more. That's how we changed our strategies to maintain or improve gross margins.

What we have adopted, wherever there are intermediates where we have strong presence, try to do forward integration. What it mean?

Forward intermediate take it to API, take it API to formulation wherever we can do that. The similar way wherever we are strong in the formulation or API, try to backward integrate.

We try to optimize continuously, taking out commodity products where you'll not able to make good gross margin. Generally, commodity gross margins are 30%-35% and making those products in highly regulated environment.

You're able to survive, but it's not easy to improve. That's how we tried to optimize the product mix.

We did very well last 2 years. With that mix, we sell intermediates with a reasonable gross margins, and also sell intermediates wherever we are using API so that we can utilize the capacity.

That's how we're trying to do that. With this mixed strategy, moving to API, API to formulation, formulation to back, we are able to manage the gross margin.

Knowing this business last 30 years, even if it improves plus or minus 1%-2%, but unless maybe up to 5-6 years till we go to that, I think this gross margins will be maintained. Once you move to CDMO NCE, it maybe improve.

Otherwise, at this stage, I feel this is reasonable, and we are confident to maintain those gross margins. Year out there, plus or minus 1%, 1.2% kind of thing.

No, that's helpful.

That's helpful. I was following the commentary from Zoetis management, the animal innovator leader in the US.

They sounded cautious in terms of generic opportunities, and the reason is that some of the American consumers are consciously shifting into generic or more affordable drugs for their companion animals. This was not a trend that was seen earlier.

In this changing landscape, logically thinking, companies like us should be able to gain more traction maybe through licensed and life cycle management and even directly offering our own IP, the generic molecules, that is. What is your thought process?

Thank you.

That's exactly what we're trying to do. This entire companion animal segment what we are projecting, what we are strategically working next 5 years.

Europe companion animals, it's moving little faster genericization. Today developed markets, innovator controls fully animal health segments, whether it's animal or companion animals.

Under-developing countries moved into the generic business, but developed countries still controlled by innovators. For companion animals, it's moving fast.

Last 2-3 years, if you see, still it's a larger opportunity because the volume is growing. There is no rocket science here.

Last 3-4 years post-COVID, pets are growing day by day. Pet is like kids.

Every country is growing. I was surprised to see US, there were 94 9.4 crores dogs and 9.4 9.2 crores cats.

They together 18.6 crores. That means each family is having at least one.

Europe is growing every day. Surprisingly, cats are growing much faster than dogs.

When the volume is growing, and another issue in this, especially Europe, unlike human health, insurance coverage is not full. It's covered by 25%.

We visited all distribution centers and hospitals, everything. Insurance covered is by only 15%.

Hence the volume is growing, it's naturally it has to convert into generic. That's where we see the bigger opportunity.

That's how we want to start with Europe, India, where the bigger markets are growing, and next step is go to US. US is still little complicated, especially companion animals.

Guidance is not very clear. Is it actually some of the solutions we do something for humans, but BA/BE sometimes it's not acceptable same as human.

It requires a little more studies. It little complex guidance in US, that's where actually our next 2-3 years focus is on where we can do faster growth Europe phase.

Since we have experience, exposure, actually we see that's a faster growth. Next phase is going to US by doing ourselves or look for something else.

Exactly we are doing that. That's the area where we are accelerating.

That's the reason we decided to go quickly R&D expansion as well as manufacturing expansion for companion animals.

Very very helpful. Thank you.

Lastly, this time around, the receivables growth, and that's common, receivables often outpace the revenue growth in a scaling business is a common observation, nothing unique to us, but it has happened this time around. As manufacturing eases and next constraint may shift somewhere else, what is the next bottleneck you see in the system and what operating discipline will keep cash conversion and execution quality intact as the complexity increases going forward?

Thank you.

Few things when you want to grow faster and big, okay, these are the natural things sometimes inventory, receivables. Few countries, countries like Turkey, all these countries credit period is very high when you are growing bigger things, where we don't see any risk.

Looking at various things, we always look at networking capital things, and this year our focus area, you might have seen this quarter when our EBITDA is 200 crores versus PAT 60 crores, that's one of the key focus area, how can we convert into EBITDA to PAT better. Various options, of course, our finance burden is going to come down, and we are looking at the tax structure also differently.

That's how we are moving couple of subsidiaries from old tax regime to new tax regime. Old tax regime, India 34%-35%, it's moving to 25%.

We are looking at the various options. Sometimes, it's exceptions receivable when the market demand, we are working closely on all these things.

Ramakant, if you want to add something, you can.

Yeah. Just to add, I think absolute number does reflect the growth in revenue.

The absolute number of receivables if you see that increase is majorly because the revenue growth. If you look at the number of days, it has been within a small range, maybe about 5-6 days of increase that we have seen in Q4.

Which we believe is in control, we don't see any concerns there. As Doctor said, the focus continues to remain on how do we convert from EBITDA to net profit, how do we optimize that conversion or maximize that conversion is the focus area for the next couple of quarters.

Thank you. Thank you so much for answering all my questions.

Thank you.

Thank you.

Hello, sir. In last con-call, you had spoken about companion animals generic penetration being just 15%-20%.

If you can talk more about that data in terms of what is the total addressable market both in India and globally and what is relevant for us, how this market is growing, if you can give more details on this.

I think where we are focusing market, Raja, maybe you can add if I miss something. Companion animals mainly Europe is the thing.

US, of course, bigger market is US since most of the market is the branded market, innovators. I think Europe is close to $1 billion market, right, Raja?

That's the addressable.

Without the addressable market would be that if you leave out vaccines, yeah.

Without vaccines where we are planning, it's close to billion. Most of the products we are working on that.

That's the thing. Also we see that genericization also is improving in that market.

That's the more developed market. India market is not big, but we see at least it's going to grow.

India, we're also looking at various things near future. At this point, mostly we look at medicines, so that's what we distribute, vaccines for BI, all products.

It's going to be few hundred crores in India. The addressable what we are looking at the billion-dollar market in Europe at this point, and we are preparing all for that, whether it is R&D, front end, or manufacturing on that perspective.

US is the next stage, that's a bigger market. We take it in the next phase.

If in between something comes up right opportunity, inorganic, we may look at. Our first priority is to address Europe and also to address countries like Brazil, these countries.

If I may just add, I think the important thing is that unlike human generics where the pricing drops very drastically to almost 10%-15% of the innovator's price, what happens in animal health generics is that the pricing drop to the generic is far slower. It tends to be more like 60%-70% of the innovator's price.

Therefore, you're right in observing that, one, there is a 15, the genericization is much less in animal health, it is increasing very fast. Europe's an interesting opportunity.

Also because there's an opportunity if you have a front end to actually distribute branded generics at reasonably good margins. I think that's the other piece which is happening.

Thank you.

Good thing about our strategy is now we have understanding on everything. Front end, we have great understanding since already we're doing.

We're very strong on API, we are strong on operations. With integrated play, definitely we believe we can differentiate this and grow bigger.

Thank you.

Great. Thanks for the detailed response, sir.

One last question. Our performance has been commendable.

I think what you guided for FY 2028, you achieved much before, and we are much above the 20% guided margin. Do you see further scope for synergies and cost advantages, or this is the optimum we should consider or is there more to extract in terms of optimizing the margins?

It's the two things, we have to balance margin versus growth. This year, we are going to invest a lot.

As I mentioned, our R&D investments are growing a lot. Substantial investment is going to happen on finished product formulation, both human health and companion animals, because and most of these are complex molecules.

We are going to invest a lot on R&D. Also when you are building additional capacities, there will be some pre-OpEx on that.

It's try to balance, but we are very confident to maintain these margins. Next phase is the investment phase.

Whatever we did last 2-3 years optimizing existing infrastructure, but next 2 years, we are going to build and invest on the R&D and all things. We are very confident to maintain these levels.

I'm always try to be practical on that. Okay.

If you get some few products good things we may, but we are thinking at this level gross margins.

Sure, sir. Thanks a lot, and I will come back in the queue.

Wish you all the best, sir.

Thank you. Thank you so much.

Hi, sir. Thank you very much for the presentation.

Sir, my first question is with respect to the synergy benefits. I think we are targeting something like 60-70 crore.

Can you tell us, and you mentioned that there could be some more synergy benefits. How much has been accrued, and how much more we can see in the next year?

Rough math I can say annualized we are accruing close to what you mentioned 50-60 crores. Initially, when we decided this merger, we anticipated 50-60 crores overall.

Now we are going to do much more. At this point, I think tracking 50-60 crores annualized numbers, but again, the bigger portion also is coming from in next 12-18 months because the synergies operations, we have to develop and file, approval, all these things will take its own time.

As last quarter also I mentioned, we invested CapEx for albendazole capacity increase in Vyash. We are waiting for approval.

Once that comes, it's going to have further synergies. We are hoping all together at least maybe 125, 150 crores at this point annualized.

We are tracking at this point 60, but next 12-18 months, it's going to happen that 125, 150.

Got it. Next question is, sir, because of the recent geopolitical issues, many chemical companies have been facing raw material availability issues as well as volatility in prices.

Could you throw some color on that on how we are placed over next one-two quarters and is the raw material availability secured for us?

As it started beginning of the March. There was a small impact in March, but it's not material.

Two things, we are able to manage on one is inventory, all key materials we have enough inventory to manage one or two quarters. The bigger impact on two things, one is the solvent where we cannot keep inventory for months together.

The second one is the freight. Freight impacted a little bit 1-2 crores in fourth quarter.

Solvents, there was impact. We are able to that how we are balancing, since we are recovering very efficient solvents, that's the consumption is we're trying to minimize whatever best possible.

Another area, we are trying to increase the prices. We're able to increase the prices to balance this thing.

Far we're able to manage very well till now. This quarter also we're confident to manage.

If it continues further, okay, maybe next one-two quarters, we need to see that how much we can increase the price. At this point, I don't see any material impact on that.

Whatever we do, price increase versus raw material increase or freight increase, we are able to balance. There may be a little impact, but I don't see bigger thing at least for this quarter.

Next quarter, we need to work on that. We are managing very efficiently on that way.

Understood. Sir, with respect to tax rate, how much should we model for FY 2027 and '28 as a percent of PBT?

I think around 27%.

Yeah. Average tax rate should be around 27%.

27%.

This quarter was more because of we are moving from old regime to new regime. Old regime, some of the areas are 35%.

There was some tax adjustments because of integration or merger. All these things are going away.

That's also we're trying to optimize that. I think next year onwards it's going to be 26%-27% levels.

That's right.

Understood. Sir, one last question is with respect to let's say over next 5 years, and given that we have multiple levers for growth lined up across formulation, API, and CDMO, can we expect a growth rate of in the range of let's say 15% to 20% kind of, is it possible given the market fit conditions also and the initiatives that we are taking?

Yes, 15% definitely quite possible. Still we are working on the detailed strategy.

Maybe sometime in soon, we are trying to hold a investor meeting with the detailed strategic plan, what we are going to do, how we are going to do that. You'll be able to tell you that looking at our current business and what I have idea, I think 15% is possible.

Understood. Got it, sir.

That answers all my questions. Thank you very much, sir.

Hi. Sir, I want to understand how you see the company's journey from EBITDA of 700 crores that we do today to 1,000 crore and then to 1,500 crore.

In how many years can we achieve these EBITDA growth targets, and how does margin volatility due to raw material cost or volatility in different geographies that we do business in, volatility in different business segments we operate in impact our EBITDA growth targets?

I I'll answer second question first. Market volatility, raw material, as we do most of our business API business, especially, is the quality markets, developed markets or regulatory markets.

The pricing was reasonable, a little bit sustainable. We are able to pass it on here and there.

With my experience last 5-10 years, these are the things sometimes it comes, we have to manage time to time. With our base, with our product pipeline, with our market access, I don't see any volatility in going forward these businesses what we do API.

Formulation, there are few businesses. Like US business, post-COVID, there was 3-4 years, it was bad time.

Large number of players came from India, it became highly commodity business. That's how we restructured our business, tried to move to entire internal API and also move manufacturing.

That's where you are able to manage that. Few markets, other markets like Turkey, volatile, hyperinflation, whatever it is.

We see the good growth last 1 year. FY 2026 also we see the good volume growth in addition to whatever adjusting inflation.

In the all looking at our product pipeline, market access, all those things, I don't see much volatility or impacting margins or growth. The first one, whatever you asked, 700 crores versus going to 1,000 crores and 1,500 crores.

We we indicated 800 crores FY 2027 or '28. Somebody says '28, somebody says '28, but '27 my internal target was '27.

We are able to achieve that run rate now. You have seen last 2-3 quarters start from quarter two numbers.

That's where we started integrating two companies. Couple of things, synergies and market access happened better than what we anticipated.

So 1,000 crores we are targeting. Maybe next 2-3 years, of course, next session when we come in June, June meeting.

Mostly we'll able to indicate, but at this point, 1,000 crores. I'll confirm this, don't take it maybe '29 or whatever it is,

'28. Doctor, you already said that annual growth rate could be 15% from there.

It's

easy guess on when we'll hit 1,000 crores.

Yeah. Anyway, we'll come up during that investor meeting.

Thank you and all the best.

Welcome. Thank you.

Hello, sir. Yeah.

Post the merger, we have been bullish on API as a business. If we see the numbers recently on a quarterly and year-on-year basis, growth has been around 7% to 8%, like a single-digit growth.

Is there any particular reason for this, like taking into consideration that our business may be lumpy, or is it sustainable, or do we look forward to double-digit group in the API business?

Two things. Synergies is not only API, first of all, to answer to.

The second thing is API why this growth is single digit for this year. As I explained earlier, we tried to optimize low-hanging or actually commodity business, intermediate business.

We are growing API business, which is a quality business like animal health business. It has gone from 350-odd crores to 400 crores, and APIs are growing double digit.

Intermediates actually we purposefully reduced that sales. That's the reason quality of the business is growing.

Going forward, you can see double-digit growth. Now we are seeing large number of approvals coming this year, next year on human health APIs, and we see animal health APIs step up this year.

You can see comfortably double-digit growth next year, more or less same as formulation growth.

Sir, one more question that I have is that now that we are expanding, do we have any plans on hiring more R&D talent or investing in R&D expansion or taking forward the scientists?

API R&D, we have a big team. We have, including analytical process, all together close to 250 scientists.

It's a very strong team, which is enough for API. Finished formulation, we are expanding the team, as I explained.

Large expansion in animal health, and formulation also we have reasonable good number of team, human health around 55-60 scientists, that's good enough. Only wherever it requires specialized talent, we are adding in human health formulation.

Animal health formulation, we are expanding a lot. That's a focus area this year.

R&D, scientists, CapEx, everything we are adding on that. We are going to add at least big thing, CapEx also and R&D resources for animal health we're adding.

Sir. Thank you.

Just one last question on the bookkeeping side. If you could give some color on the depreciation going forward.

If we see this quarter, our depreciation expense was slightly on the higher side. If we are doing further CapEx in the future, do we see it increasing or yeah, some color on the depreciation?

The two things in this depreciation, this quarter or this year, okay. Every quarter, there's a close to 25 crores depreciation on goodwill amortization.

That's going to be reduced next quarter onwards. Last year, it was 100 crores on that.

This year, it's going to be 35 crores. Second half, it's going to be zero that 25 crores.

50 plus second quarter maybe 10-15 crores. That depreciation is going to come down around 65 crores from existing base annually.

The new CapEx, whatever we are adding, I don't think it will increase substantially. Why?

Because I think the run rate is going to go same level, whatever is the new CapEx, the existing depreciation. I don't see much difference on that.

Ramakant, if you can

add something. That's right.

As Doctor mentioned, the current number, if you look at annual number, about 100 crores is depreciation or amortization coming from amortization of intangibles. That will go away.

In the next year, it is going to be here at about 35 crores. The depreciation excluding this amortization, we believe that it should be similar to the current year

in FY '27. Sir.

Yeah. Thank you, sir.

That was helpful. Thank you.

Thank you, guys. Thank you.

Let me say thank you so much for your continuous support. I know you guys had a lot of patience last 4-5 years, and it's hard to believe also when we said this company is going to go turn around.

Fortunately, we have fantastic team. We are working as one team, both companies.

Things are going well. I am very confident this company will have great potential in future.

Thank you. Thank you so much for your support.

We are always available if somebody needs any clarification or anything. Whatever we can do, the timing of business sensitive, wherever it is, we can explain.

Thank you, everyone.