Thank you, Bharat. Hi, good evening, everyone, and a very warm welcome to Laurus Labs Q1 FY27 earnings call hosted by DAM Capital Advisors Limited.

On the call today, we have representing Laurus Labs management, Dr. Satyanarayana Chava, Founder and CEO; Mr.

V.V. Ravi Kumar, Executive Director and CFO; Mr.

Krishna Chaitanya Chava, ED, Head CDMO; Mrs. Soumya Chava, ED, Generics and Commercial; and Mr.

Vivek Kumar, AVP, Investor Relations. Before we proceed, I would like you to remind you that some of the statements made during the call today could be forward-looking in nature, and a safe harbor statement to this effect has been included in the press release that has been shared on the company's website.

I hand over the call to Dr. Chava to make the opening comments, and then we'll open the floor for questions.

Please go ahead, sir.

Thanks for the introduction. Good afternoon to all our stakeholders.

We continue to make steady progress in a strong demand environment for multiple complex technology platforms and integrated manufacturing capabilities. We reported significant acceleration in our CDMO business, maintained sustained momentum in Affordable Medicine portfolio, and continued to show tangible advancement in our mid and late-stage commercial projects with global innovators.

We are executing well on our transformation strategy with clear focus and determination to realize near-term opportunities. At the same time, we continue investing in capacity readiness to better meet our client needs, new technologies, emerging and complex modalities like peptides, ADCs, gene therapy, etc., to seize the next wave of business opportunities that will positively drive future value creation for all stakeholders.

Moving on to financial results, Laurus maintained its strong growth momentum, delivering highest quarterly revenue, EBITDA, and profits during the first quarter. The company's revenues were ₹2,026 crores, showing a 29% growth.

This was mainly driven by growing contribution of commercial supplies in CDMO segment and continued strength in Affordable Medicine portfolio. Gross margins were also very healthy and maintained around 62.7%, and EBITDA margins further expanded over previous quarter by 7 percentage points to 31.8%.

Our product mix within the business divisions and operating leverage have continued to do well, supporting healthy margins overall. We also achieved several milestones in our operations.

The first one is we signed a development and commercial agreement with Aarvik Therapeutics for two ADC molecules for India markets, those are in the clinical stage. We have onboarded a big pharma client with significant opportunities ahead of us.

The third one, the final handover of 500-plus acres of land parcel from AP government is in the final stages now. I would like to thank our dedicated team for their relentless effort and strong progress we are achieving now.

I would request Mr. Krishna Chaitanya Chava to share key updates on our CDMO segment.

Thank you, sir. Within the CDMO side, the division has continued to deliver strong operation execution in Q1, reporting a growth of 69% with sales of ₹835 crores on the small molecule side.

This is mainly driven by acceleration in the late-stage clinical and commercial deliveries of the programs for multiple global partners. We continue to see good and encouraging progress across both human health and animal health businesses, both on volume ramp-ups with existing portfolios and also new potential customer engagements.

As we continue to strengthen capabilities of our CDMO platform, we are constantly enhancing the service efficiency and also conversion of the opportunities at various different clinical stages, reflecting client trust in our technical and commercial capabilities. Continued investment into capacity creation at our Vizag site and also advancing quite well on the commercial scale peptide capacities based on customer demand.

I would say with customers' ongoing demand for enabling services, our strong CDMO business model, and the management execution, in line with which the company is confident to sustain a very healthy business growth. Now, moving on to the Laurus Bio side of things, Bio division reported a Q1 sales of about ₹35 crores, which is about 21% growth year-on-year, which is broadly in line with our expectation.

The growth is supported by customer revenue diversification and also continued pipeline progress on some of the larger global accounts, both in the animal-origin-free space and also in the CDMO side. We have continued to demonstrate significant value add through the expanded application and capabilities, especially in the enzymatic and biocatalysis platform across various different clinical phases, further deepening long-term customer partnerships.

Construction work for the commercial-scale fermentation facility and strengthening of our downstream processing infrastructure is progressing in line with the plan, and we expect Phase 1 of this capacity, which is a little over 400 kiloliters, is expected to be operational towards the end of this year. Thank you.

Thank you, Krishna. Now, I would like to request Mrs.

Soumya Chava to share the key updates on our Affordable Medicines business.

Thank you. Our Affordable Medicine division delivered a strong quarter-one performance, with revenue reaching to ₹1,156 crores, which is an increase of 10% year-on-year.

Our growth was driven by higher volumes across our established portfolio, including ARVs and onco, where we continue to maintain our market leadership. Our recently launched products in the developed markets also sustained their strong momentum.

Operational execution remained robust, supported by consistent supply reliability, improving efficiencies, and greater resilience across manufacturing and the supply chain. Despite a dynamic and external environment, our teams continued to proactively manage production, shipping, and inventory to ensure uninterrupted customer deliveries and execution excellence.

We're also accelerating product registrations across key emerging markets, building a stronger and more diversified growth pipeline. The establishment of a new office in South Africa further strengthens our commercial presence and positions us to capture the growing opportunities in this region.

We continue to make a study progress on regulatory filings. Our cumulative DMF filings now stand at 92.

In developed market formulation dossiers, we filed two dossiers during Q1, taking our cumulative product filings to 96. Thank you.

Thanks Krishna, Soumya for the overview of Affordable Medicines and CDMO business segments. On R&D front, we spent 5.8% of our revenue on R&D, which is significantly higher, 72% more than the previous year.

This was on account of capability development and efforts for our gene therapy, ADC technology infrastructure, and there are some complex pipeline building activity on Affordable Medicines side as well. Having said that, the recurring spends are in line with full-year target to maintain our commitment to invest in portfolio focusing on product complexity, scale, and sustainable technology platforms.

Let me share brief on quality and ESG side as well. In quarter one, the company underwent 24 quality audits by multiple regulatory and customers.

Company has successfully passed these audit inspections without any critical findings. On ESG side, we continue to take steps towards meeting our ESG commitments with a focus on clean energy.

In Q1, the Science Based Targets initiative was validated our targets to reduce our near-term emissions. You can refer our IR for more details on this.

As we look forward, we continue to see robust demand for our specialized technology offerings and the integrated manufacturing capabilities. This is significantly accelerating our global position and expanding various market opportunities.

We, therefore, remain confident in our ongoing transformation strategy and in our ability to deliver sustained growth and value creation for all our stakeholders. Now, I request Mr.

Ravi Kumar to share overall financial highlights.

Thank you, Dr. Satya, and very warm welcome to everyone on our Q1 FY27 earning call.

Total income from operations is around ₹2,026 crores, this resembling our current year, current calendar year, registering a growth of 29%. The main driver is CDMO and, of course, Affordable also has been contributed.

Gross margin maintained at 62.7%, about 3.3% higher than before. This is due to the division mix and the process improvement efforts.

EBITDA for the quarter one stands at ₹644 crores with EBITDA margin of 31.8%, which is about 7% higher than before, which is consistently improving since last several quarters. This is largely on account of improvement in capacity efficiency driven by the growth of late-stage clinical and commercial projects.

Our profit after tax is around ₹368 crore, and ROCE is around 19%, which against 17.7% of the previous year. On the capex front, we invested about ₹394 crores for the quarter.

Our net debt stood at ₹2,656 crores, and debt by EBITDA is around 1.28 against 1.25 of the last quarter on the back of strong internal cash flows. Slight increase in the debt is due to the capex plans.

On the capital allocation part, our strategy remains unchanged, and we will continue to prioritize investment into high-value business segments to drive near and long-term growth and returns for our shareholders. You can refer our IR presentation for more details.

With this, I would request the moderator to open the lines for Q&A. Thank you.

Hello? Hello, am I audible?

You're audible.

Congratulations team, and it's very heartening to see these kind of numbers. Just two questions.

First question is regarding the capex that you've guided. We started with ₹1,000 crores, then upguided to ₹1,500 crores, and in our AGM, we spoke about ₹2,000 crore of capex for FY27.

Could you please explain what would have changed in the last six, eight months that you've close to doubled your guidance on capex?

The increase in numbers for the capex spend was broadly based on our requirement for capacity to meet our customer demands. The current year investments into capacity expansion is based on what our customer demands are and creating capacity to meet that demand.

Yeah.

Got it, sir. For the second year, which is FY28, would you continue to maintain the older guidance, or any revision there?

We changed our guidance. Last quarter we said ₹3,000 crores for FY27 and '28.

We may do more than that, but we don't have a correct number to give you in this call. Yeah.

Got it, sir. Last question from my end, just a bookkeeping question.

What would be our operating cash flow for this quarter?

Operating cash flow, we have not disclosed. We'll get back to you.

Sir. Thank you so much.

Wishing you all the very best. Thank you.

Thank you.

Thanks for the opportunity, and congratulations on good set of numbers. Sir, if you could firstly highlight what was the constant currency growth for the quarter?

Constant currency growth, revenue is around ₹36 crores.

Sure you

are asking this only, right?

I meant constant currency growth.

₹36 crores only.

Percentage.

Percentage you are asking?

Yes, sir.

Percentage is about 2%.

Year-over-year?

Yeah. Correct, boss.

2%.

Okay. Sir, secondly, with respect to the delivery of late-stage molecules, this is with respect to supplying to the customer in terms of anticipation of product approval, or these are with respect to products which are approved and we have initiated the supplies for these projects?

It's a mix of both, towards preparation of launch and also for products that have already garnered the approval.

Can you share the sort of mix so that which can be a sustainable number and which could sort of have a temporary pause once the inventory build-up completes?

In this small molecule CDMO business, about 55% of revenue came from commercial supplies.

Understood. Sir, if you could just lastly let know what was the let's say customer advance in this quarter or let's say compared to what it was in FY26?

No, we didn't have any customer advances during this quarter.

Got it, sir. Thank you.

Thank you for taking my question, and congratulations on these numbers. Sir, I just wanted to get the split between your FDF and API within the ARV revenue, if you could just disclose that.

The second question I had is that, now this quarter we're seeing that mix of ARV versus non-ARV coming back down to the one-third, two-third split, which we have spoken about for a while. How do you think about this going forward for the next three, four years?

Are we going to be at this mix now? Have we reached that stable level of one-third, two-third?

I'll answer the last question. See, currently two-thirds is non-ARV and one-third is ARV.

We expect this will be the highest. I expect it will go down further, but I don't think it'll go up beyond this number.

To answer your first question, for ARV APIs, we did with about ₹415 crores, and ARV FDF is ₹254 crores. Together, total ARV revenue is ₹669 crores.

Thank you very much.

Thank you.

Hi. Good evening, team, and congratulations on a strong quarter.

I have two questions. First is, Dr.

Satya, take us back to 2023, please. The numbers were weak, the stock was under pressure, yet you kept investing.

What was going through your mind during that period? What gave you the conviction to stay the course?

I would also like to hear Ravi ji's comments on this question, please. Thank you.

See, in the CDMO business, what we have realized, customer would like to see the capacity before giving products. Second, the trend what we are also seen, when they put a very important program of theirs, they don't want to see batch size increases, they don't want to see change of manufacturing lines, change of manufacturing sites to minimize the regulatory complexity.

Since we realized this very early in the CDMO growth, we did invest aggressively. We realized we're taking risk, but we are not taking risk putting the company at a bankruptcy.

We decided to invest aggressively, created capacity, and that attracted customers, that attracted complex project, that also attracted projects at scale.

That's helpful. Ravi ji, being the CFO, it's your job to not approve any project, right?

I'm sure you must be having a very close scrutiny on at that point in time because the environment was foggy and at least to us as investors, it was very less visible. Looking at the numbers, the ROCE was collapsing, the margins, the sales.

The CDMO segment itself saw a big collapse because of disappearing of that purchase order. What gave you the conviction to sign on the capital allocation decisions that the team was making?

Sajal ji, actually, your question has an answer. FY23 is the best year because of that execution of large purchase order.

Maybe the execution itself is a classic example or precedent to approve a capex. Had we not had capacity before accepting that order, actually, we should have been missing the entire CDMO opportunity maybe in the next future years.

That created a milestone, and fortunately, I'm there in this business and with Dr. Satya for a long time.

We know we may have some times, but we go together. That's how we have done, and then only seven quarters we had a not so great results.

Those seven quarters we read Bhagavad Gita well, we were having a balance of mind, and then we were using our judgment to invest continuously. That has really paying well for last five quarters, and then it will repeat in the next years.

I hope I answered your question, Sajal ji.

Definitely, Ravi ji. You read the most important book at the point in time which you created the maximum return on that investment of your time on that one.

Thank you for answering that. Second question is, Laurus now seems to be at a stage where some investments are being harvested, others are scaling, while a third set is still being seeded.

How do you think about balancing these three horizons when allocating capital? Because a lot of what you're seeding today will not be visible to us as outsiders or investors maybe next five years, maybe four years, who knows.

The one segment our investments are not going to give returns is our advanced biologics, our investments into gene therapy, ADCs and all. That investment we're doing consciously because those modalities are the one which are growing faster than others.

Except that, our investment into small molecule APIs, small molecule drug product, I think, as you always say, the CDMO CMO business is lumpy, but predictable. Now capex investment is very heavy because we are able to predict better than earlier.

I just want to add one more point to Sajal ji.

Sure, Ravi ji, please.

Few years back we have taken a call when we started generating a more cash. We took a call that up to 10% of our investments or our profits into a disruptive technologies either in-house or external.

That's also is paying well, and then, for example, some of the initiatives what we have taken, they're not even generating any revenue or maybe not yet generating a meager revenue. I think the combination of all these strategies or three points what you have said, which can create a sustainable organization.

The other point I want to add here is see, any major investment, new areas, it will take four, five years. Unless we invest right now for our growth in FY30 onwards, we don't see significant growth coming after four, five years.

Yes, absolutely. Unlike generics, as you said, Dr.

Satya, ours is a lumpy business, but it also is predictable. How predictable you think is the fermentation and the precision fermentation, the Laurus Bio, including the Vizag 400-plus KL that will go commercial starting early next year?

How predictable is that side of the business? See,

that business currently giving, give or take, ₹200 crores right now. That ₹200 crores we are very confident that will generate.

Next ramp-up, we are banking on multiple products. I hope all will not succeed, at the same all will not fail also.

We are hopeful some products will succeed, and then that will give a massive upside. Our next 12 to 18 months will very crucial which molecule, which program in our precision fermentation will take off, which will not take off.

That is the reason this gestation period, we expect 18 months for our bio business to see significant ramp-up. Yeah.

The capacity there is fungible, right? Even if some molecules fail, the lesson and the learning will be deployed to the next set of opportunity, and we could use the same infrastructure to manufacture something completely different there.

The capacity what we have created upstream, downstream are fungible, we can use the same capacity for multiple programs.

Oh, thank you. Thank you, that answers all my questions.

Best wishes. Thank you.

Thank you.

Yeah. Congrats for good set of numbers.

Regarding this FY27 capex guidance, as one of the participant already raised, you have effectively doubled capex from ₹1,000 crores to ₹2,000 crores in just six months, yeah? Could you help us understand what has changed in the six-month period?

What new opportunities have emerged that made you to do two successive upward revision of capex? Is it due to increase inquiries from big pharma due to supply chain diversification?

See,

it is from the capacity needed for our existing customers. Some programs we're doing advanced intermediates, maybe we have to do API.

We were expanding our offerings in the programs. We're investing in new modalities within the small molecules also.

This capex, unlike earlier capex what we have done, this we're doing for a purpose, for a product, and capacity what is needed in the near term for our partner's needs.

Thank you. Thank you very much, sir.

That is from my side, yeah.

Hello? Am I audible?

Sir. Is it audible now?

Sir, I have one question regarding where we can witness the impact of CDMO ramp-up in our margins or in our profits. Whether we can see them in gross profit or operating profit, as we compare with respect to the last quarter, our CDMO business has improved a lot.

However, our gross margins have not improved and operating profit have improved. Further, raw material cost, if we consider that there may be some higher cost due to the Middle East or West Asia crisis.

In case of API, I think the prices reflect around one quarter after the raw material we procure. Can you please explain or to understand the business in this regard?

As you have mentioned, our CDMO business increased significantly, and so our gross margin also improved from 61 to 63%. That's from quarter-on-quarter.

When compared to year-on-year, it is almost a little over 3% increase was there. We have seen some pressure on margins because of the global conflicts, but that margin pressure is not that significant to take a shelter that because of that margins have gone down.

We expect the similar margins will be maintained for the coming quarters as well. Yeah.

Sir. Thanks.

Sir, second question is regarding the asset turns. Would we expect the gross asset turns around 1.5 as we ramp up our CDMO business?

We have clearly mentioned in our investor presentation our first target is to asset turnover ratio take a little over one, 1.0. That's the target.

We are almost there right now, but we want it to take it a little more than 1.0. Yeah.

Sir. Sir, last question from my side.

In this quarter, where CDMO business is significantly contributing around, I think, 44% something, and so I want to know this is contribution from the two, three products, or there are multiple products in this regard?

Thanks for asking the question. Our CDMO business is well diversified.

No product or no customer are contributing significantly in our business. Diversified CDMO segment.

Okay. Thank you, sir.

Thank you.

Good evening, and thanks for taking my question. Congratulations to the management for great set of numbers.

My question to Dr. Chava is, sir, if I remember correctly, your promise by 2030, our CDMO turnover will be more than 50% of the total turnover.

Are we still sticking to that, or are we going to prepone that target to 2028 or 2029?

At this point, we're very comfortable to say that by FY30, we will definitely reach our target of at least 50% of revenue come from CDMO segment. Achha, sir.

Secondly, sir, just I wanted to know what is the amount of exchange gain we have made during this quarter?

Forex gain on the balance sheet is about ₹5 crores.

₹5 crores?

Forex gain as a separate head is a ₹5 crore.

₹5 crores. Thirdly, sir, if I see your presentation, you are mentioning some in-licensing of two antibody this thing.

Can you throw some light on this, sir, exactly when we will be able to generate revenue out of it?

These programs are at the preclinical stage. We have to continue process optimizing in Hyderabad, do GLP toxicity, file IND, and data are good, then we have to do Phase 1, 2 trials in India.

It will take three to four years, yeah, in India at least.

Sir. That's all from my side, sir.

Again, congratulations, sir, for the great setup.

Good evening, sir. I have just one question on capex side.

Sir, you have guided long-term target of 1.1x asset turnover and 25% ROCE. Sir, given the cumulative capex has now crossed ₹3,700 crore, what is the expected trajectory for this ratio over the next four quarters or you are seeing?

I think asset turnover ratios will be more 1.0 for sure, and the ROCE, because of heavy capex this year, maybe going to 25% will take some time. We expect ROCE will continue to grow from last year it is 17.7, this year is 19.something, and we continue to grow our ROCE returns as well.

Sir. Just last one more question if I can ask.

Sir, we have previously observed pilot scale shipments for GLP-1 peptides like semaglutide. Sir, has the company now qualified commercial scale synthesizers, and when do we expect meaningful revenue contribution from this category?

Within GLP-1 space, while there are a few different opportunities that we are working on, unfortunately, we are not able to discuss any project-specific details, but we expect peptides to be a meaningful area for Laurus as a company.

Sir. Fine now.

Thank you. I'll jump back in the queue.

Hello? Am I audible?

Manoj. You're audible.

Congratulations, Dr. Chava and entire Laurus team, for a very strong quarter.

I have three questions. First question is, as you mentioned that in CDMO 55% of the revenue is on the commercial side and 45% is on the startup where the filling of inventory may be there.

Just wanted to understand whether this 45% portion of the revenue is going to sustain? How do you see the sustainability of this portion?

That is my first question.

The majority of the revenue which is not commercial is for Phase 3 supplies. We expect they will become commercial soon.

For one of the program where we supplied Phase 3 supplies, the approval also obtained. We expect it will become commercial soon.

Okay. Second part is if you can give us some update on Karka JV, how much more capex will be required in that and when do we expect the revenues and what will be our guidance, if any, on this part?

Karka JV, we are doing two things. One is oncology, small volume oncology formulations and large volume normal solid orals.

The oncology facility will be ready early next year, and then solid oral facility will be second half of 2027 calendar year. Currently, we have invested so far ₹400 crores, and then that facility needs another ₹400 crores, and part of that investment will come from loan from our partner.

Yeah. Sir, my last question is on our animal part of CDMO.

I think, if I remember, out of 16, 18 molecules, around two or four tech transfer did happen. If you can give us an update there also, the kind of jump we are seeing, have we received more tech transfer, has number of molecules gone up there?

Not in a position to share the specific number of molecules that we are working on, but there are a few programs or molecules in that space that are being commercially supplied as we speak.

Okay. Got it, sir.

That's it from my side. Thank you so much.

Thank you.

Hello, Dr. Chava.

Am I audible?

Audible, Sachin.

Many congratulations to entire Laurus team for wonderful results. Dr.

Chava, I'm very impressed the way each success of Laurus is feeding another success. For example, API seeded formulation, formulation seeded CDMO.

Now, what I need to understand, if you see Laurus three to four years from here on, what's your big picture, Dr. Chava?

It will be a fully integrated pharmaceutical company offering end-to-end in pharmaceutical value chain from API to drug product, both in our generic CMO as well as our NCE also, our desire is to offer fully integrated program, not just starting materials, intermediates, API, but to offer including formulations for our big pharma CDMO customers. That is our goal, and we are going in the direction right now.

Understood. More particularly, how you see Laurus Bio evolving say next three to four years?

Because as of now, it's comparatively pretty small, but in your scheme of things, how you see next three, four years Laurus Bio can shape up?

There are two segments where we have invested a lot of money. One is Bio, and second one is crop sciences.

We need maybe another 18, 24 months to assess how big the opportunity, what else we need to do. Do we add more customers, more projects, more infrastructure, or more resources in R&D or more resource BD?

I think that's at the evolving stage right now. If you look at in the broad scheme of things, both divisions put together creating ₹250 crore revenue.

That's not significant, but we are investing significantly in both these, and we need 18, 24 months to assess where those divisions will take us from the current stage.

Understood. I think that's from my side, Dr.

Chava.

Thank you.

Thank you.

Good evening, sir, and congratulations on a great set of numbers. It is very heartening to know that how you have navigated your company in last 10 years from an ARV to a full-fledged integrated CDMO.

Hearty congratulations to your entire team, sir.

Thanks.

Sir, my question to you is, if you see our quarter one exit rate for CDMO is roughly about 828 roughly about ₹800-plus crores. Now, and the overall share in the basket is now approximately 42%.

Do you firmly believe that we can keep growing our CDMO business at about 30 to 40% for the next 3, 4 years based on the capex that we are doing for this? This entire capex is for the CDMO, or we are also investing in other segment of the businesses, if you could just throw on this particular questions?

Majority of capex is for small molecule, whether it is API or CDMO, and we do expect to grow significantly. I may not be able to give you a number what we will grow, but we have good visibility and a lot of confidence and conviction that CDMO will definitely give a lot of growth for us.

Yeah. Sir, is it possible for you to give us a total TAM of this CDMO pipeline that we have built over last so many years so that we get some confidence as to the company is on a very serious growth trajectory for the next 3 to 5 years?

Is it possible for you to share the number? I am certain that there are a lot of confidential agreements, but just sort of broadly if you can give us what could be the addressable opportunity in this whole piece?

I think we don't want to confuse all our investors by giving a certain number of projects we're handling at certain percentage of and all. It all depends on the value of each program is more important than the number of programs.

That's more important. See, addressable market is that CDMO market is growing, a lot of opportunities are there.

It is our ability to create capacity, create technology platforms, and absorb customer projects and all. Krishna, you want to add anything here?

No, I echo your thoughts, sir, because from a number perspective, in the CDMO space, we have commercial programs, be it intermediate or API, that are maybe less than a million, and there are programs that are in the double-digit or even beyond, right? Just giving a number might not give a complete picture, and thereby that was one of the reasons why we've categorically tried to refrain from giving a breakup because that might not be a accurate representation of how the business is doing, sir.

Or

is it possible for you to share how much each product or each program would be contributing to the overall? Is there a top three or a top five, or it's a basket of products that is sort of contributing to the growth in the overall CDMO business?

Fortunately, within the CDMO space, the revenues are well diversified, and we don't have any particular high concentration of any particular program or customer, for that matter. It's a well-diversified set of products that currently we have, sir.

Also within the CDMO, what percentage would be for the patented molecule and non-patented molecule?

Within the way Laurus Labs as a company represents CDMO, all of these are innovator programs which are on-patent molecules. All the off-patent molecules that we support for various different companies from contract manufacturing point of view are internally referred to as CMO, and the value from this is captured in the Affordable Medicines revenue.

Which means a very significant, 70 to 80% or 90% of the business would be from the patented molecules?

In the CDMO space, predominantly yes. Maybe even more than, yeah.

Maybe even more than that. Okay.

The therapeutic concentration also is very well diversified, or one or two therapies contribute significant to the overall CDMO business?

Therapeutic area also is well diversified. There's no specific therapy area that has any high concentration risk.

Right. Sir, you have been primarily into an investment curve, and this investment curve also seems to be continuing.

Obviously the growth obviously we can see that your CDMO business is growing at upward of 35, 40%. Just to sort of map Laurus on return metrics, on return on capital employed, if I were to sort of dissect your CDMO and sort of build up P&L for your CDMO business, would your return on capital employed at maturity or maybe at good scale-up would be significantly higher than the total ROCE of the company?

We can't separate the CDMO and the generics part of it, we can't have a calculate the separate ROCE for CDMO.

Thank you. Great, sir.

Thank you very much.

Thank you.

Hi, sir. Just wanted to get some more comments on your custom synthesis sales run rate, given that we do have high visibility typically at least for next two quarters.

Is it fair to say ballpark maybe plus minus ₹100 CR here and there, but we can maintain the current run rate? Is that a fair understanding?

That's a fair statement to make, sir. Yes.

Okay. Also, can you give what was the commercial sales contribution within the custom synthesis for FY26?

You said it's 55% for 1Q FY27.

It's in the same number, but we expect in the coming quarters and years that will grow. It's 50% came from commercial supplies last financial.

Okay. One for Ravi sir.

Sir, if I got it correctly, you said it's 2% constant currency growth for the quarter. Can you explain because against most currencies, especially the dollar and euro, I think INR depreciation is in 10% rate.

How is our constant currency growth so low given that INR growth is 30%?

We have even a rupee sales also, right? The entire sale is not in the dollar terms.

What I said is for the FY26 and the first quarter comparison.

Okay. What would be the total export percentage in terms of total consol revenue?

Export direct exports is I think about 55, 60%. I have to just check.

Okay. Lastly, one more if I can.

Can you throw some more color on the Laurus Bio division in terms of what category of products are currently largest within that division? Is it insulin, food protein, industrial enzymes currently?

In terms of new product, what are going to be the largest category of product?

Currently, about 40% revenue comes from animal-origin-free cell culture ingredients and enzymes, and the remaining 60% coming from various CDMO molecules at the early stages. It's spread over some alternate food proteins, some colors, some super absorbent polymers.

It's spread. It's not one segment which is concentrating more.

Okay. That's it from my side.

Thank you.

Hi. Good evening, everybody.

Congratulations on a fantastic set of numbers. I have a question with regards to the Aarvik Therapeutics two ADC contracts that you signed.

I just did a quick Google search, and I noticed that they have a different type of ADC. Can you give more disclosure on the product that you're developing?

Are you partnering with them and to develop it from scratch, or there is already a certain product that is already there and they're asking you to help them scale it up?

We also made a small investment into Aarvik Therapeutics long back. We have in-licensed two preclinical assets which completed in vitro proof of concept, and we need to do GLP tox here in India.

That will be mid of next year we expect to start preclinical tox, and based on that, we will plan our future course of action. These are part of their MOTA program, and these are for two therapeutic categories.

We will give you more details later, both are solid tumor. Yeah.

Another question is with regards to the organization itself. I think you've clearly demonstrated that you're capable of executing small molecule CDMO contracts, and you're positioning yourself as a large molecule player with all your investments in cell gene therapy, peptide, ADCs.

Would you like to give a more visionary disclosure to the investors with regards to the next five years?

See, we already make a few payload linker programs for big pharma. See, for us to wet our hands, we need to get technology absorption instead of developing.

We thought to invest in a small biotech company and get access to their technology. Now with this two ADC programs, we have access to their conjugation, purification, and fill-finish opportunities there.

That is one area where we're investing. We also licensed some patents from IIT Kanpur.

Those are helping in our gene therapy programs. Our investment into ImmunoACT helping us to understand the lentiviral and then cell therapy.

Based on the programs what we have from partners, we also invested, as Krishna mentioned earlier, into large peptide manufacturing capacity as well. Eventually we are investing in the future modalities where the market is moving.

Okay. One last question with regards to the peptides.

Everybody in the market is trying to focus on the peptides for the weight loss, the GLPs. I think there is a lot of revolution that's happening in the peptide treatments for other sectors, right?

Like gastro, I think I was reading it something. There's a lot of work going on in it.

Would you like to disclose more that saying that are you looking at the overall sector, or are you looking at specific sectors where the growth is, because I think the market itself is growing around 30% plus? If you can give some more details on it.

There's a few different class of programs that we expect to support in this space, which we will give additional color in due course. It's multiple classes that we expect to support in this.

Not just GLP, we also have programs other than GLPs, yeah.

Thank you so much. Best of luck.

Thanks for the opportunity, and sir, just a clarification. The constant currency growth in Q1 FY27 over Q1 FY26, if you could sort of clarify.

Vivek will come back to you on that. Actually, what I said is on the full year of FY26 and quarter one of FY27.

No, I meant to ask Q1 FY27 over Q1 FY26.

That's what Vivek will offline tell you.

Sure, sir. With respect to this incremental capex, while it is for a specific customer, but is it for a specific product?

These are not meant for one customer, multiple customers and multiple products.

The capex guidance which you raised from 1,500 to 2,000, incremental 500 crore is for multiple products, is that the way to understand?

You're right.

If you could just clarify, again, for animal health, crop science, or human health, and for API or intermediate?

It's a mix of both human health and animal health portfolio.

Okay. Again, for API or intermediate?

Both. As you've seen, Laurus is investing more in serving our partners API needs.

We do have some business in advance intermediates in CDMO segment, but mostly it is API for us.

Yeah. Yeah.

That's correct.

Got it, sir. Just this last one, if I may, this regulatory approval for your customer where the product offtake is sort of expected to scale up, this is for the global market, regulated market, emerging market, if you could give some color to that.

We expect it is global, regulated and LMICs as well, but it's global portfolio.

Got it. Thanks a lot for addressing my questions.

Thank you, sir, for opportunity. This is just a follow-up question regarding the CDMO business.

As Dr. Chava mentioned that we have very well-diversified CDMO business, can we know in terms of the percentage if our any molecule in the and product becomes blockbuster, how much we can earn in our business?

That is my first question, sir.

I think we can't give you those granular details, product-wise and customer-wise revenue, because of our confidentiality issues, we can't give you beyond what we have disclosed.

No, I don't want that regarding any particular molecule, I just the idea in this regard that if one molecule becomes blockbuster in what we make in our CDMO business, how much percentage we can earn in our business in that molecule? Just an example.

That's interesting question. The answer to that, sir, is it is not very easy to come up with the percentage potential contribution to our top line based on the blockbuster status of the customer.

The reason why I say that is because there might be programs that use, let's say, 500 milligram dosage per day, or there might be programs that use, let's say, 1 or 2 milligrams a day or even less. Also comes down to what value of that each milligram is, right?

While the program might mean blockbuster for our customer, what it means or what it entails to us as an API supplier could mean completely different based on that particular nature of their product.

Okay. Thank you, sir.

Just one small follow-up if I can get. Do we have molecules in our CDMO business which are generating around ₹200 crore or more?

I think the answer is yes. Yes, we do have.

Yes, sir.

Okay. Thank you, sir.

That's from my.

Thank you, everyone, for your very insightful questions and your continued support to the organization. Thank you.

Thank you.