Thank you, Anushka. Good evening, everyone.

On behalf of Systematix Institutional Equities, I welcome you to the Q3 FY26 earning call of Orchid Pharma. We thank the Orchid Pharma management for giving us an opportunity to host the call.

Today, we have with us the senior management of the company represented by Mr. Manish Dhanuka, Managing Director; Mr.

Mridul Dhanuka, Whole-Time Director; Mr. Sunil Kumar Gupta, Chief Financial Officer; and Mr.

Kapil Dayya, Company Secretary. I'll now hand over the call to the company management.

Over to you, sir.

Thank you, Vishal. Good evening, ladies and gentlemen.

I am Manish Dhanuka, Managing Director of Orchid Pharma Limited, and I welcome you all for our discussion on the results of third quarter financial year '26. First, a brief about the financial performance.

For Q3, our sales stood at ₹207 crores compared to ₹217 crores in the last financial year third quarter, reflecting a decline of 5% year-on-year. On a nine-month basis, sales stood at ₹574 crore versus ₹684 crore last year, which is a decline of 16%.

EBITDA for the quarter was at 6% versus 17% last year. For the nine-month period, EBITDA stood at ₹58 crore compared to ₹115 crore last year, with a margin of 10% versus 17% last year.

The year-on-year comparison reflects the continued stress in the global antibiotics market. On a sequential basis, volumes have improved compared to the previous quarter.

However, pricing across key antibiotic molecules remains depressed, limiting revenue recovery. On a nine-month basis, the oral segment has experienced approximately 12% price erosion and 10% quantity erosion.

This is not just product-specific, it reflects broad industry pressure across all geographies. Our oral to sterile mix has remained stable at approximately 2:1, indicating there is no structural change in our portfolio.

Geographically, our regulated versus non-regulated mix has historically been one-third regulated and two-third non-regulated. However, for this quarter, the split stands at approximately 1/4 as regulated markets.

This clearly indicates that regulated markets have not revived. The incremental sales that we have achieved in this quarter have largely come from price-sensitive spot-based business.

While this has helped improve volumes sequentially, it has exerted further pressure on the gross margins. In addition, we have consciously reduced our inventory during the quarter.

While inventory normalization had happened largely in the last quarter, some impact on inventory devaluation has impacted gross margins. We believe this correction would have largely been completed in this quarter.

This has been a difficult profitability environment for us. The pressure is clearly pricing driven, not the consequence of operational deficiencies.

In response to this environment, we have critically reviewed our cost structure. Non-employee costs on a nine-month basis are down approximately 10% compared to the last year.

We have trimmed discretionary spends and postponed certain expenditures without compromising on compliance or core operations. While we are optimizing the cost and expenses in all areas, we are not compromising with R&D investments, which have increased to approximately 1.5% of sales compared to less than 1% last year.

These investments are targeted towards differentiated products, development of FDF for regulated markets, and long-term competitiveness. The development of these products will yield benefits when our FDF plant at Chennai becomes operational.

Now, a brief about Exblifep. While the base antibiotic environment remains weak, progress on differentiated products is building momentum.

A binding term sheet has been signed in one of the key geographies. In addition, we have executed a non-binding term sheet in a major regulated market.

We are in advanced discussions with three to four large markets and expect to announce when these get to a definitive stage. We believe in about four months after acquisition of asset, this is a significantly good progress.

In Europe, sales have commenced in Spain and Italy. Compared to the last quarter, volumes have increased significantly.

On a small base, growth has been more than 200%, which was expected as these markets opened up. Financial year '26 effectively becomes the first meaningful commercial year for Exblifep.

With Spain and Italy ramping up, we expect a gradual uptick in volumes over the remainder of the year. In the GCC region, we have completed launches in United Arab Emirates and Kuwait.

This marks the beginning of commercial presence of this molecule beyond Europe and India. We expect launch announcements and agreement announcements to become more frequent going forward.

Now, brief about AMS division. The AMS platform continues to mature.

The EBITDA drag has reduced significantly in the current quarter, while the sales continue to increase steadily. This reflects improving operating leverage and better cost calibration as the platform scales up.

A brief update on the 7-ACA project. The 7-ACA project continues to progress as per the revised execution plan.

All fermenters have been erected, a major milestone. Major equipment deliveries are underway, and execution intensity has increased to recover time lost in the earlier phases.

We continue to target mechanical completion by September. We are actively working to recoup last year's delays and regain scheduled momentum wherever feasible.

On the technical front, at the pilot scale, we have fully absorbed the fermentation technology and are achieving the targeted yield benchmarks. By the time we transition to commercial scale, we expect our fermentation performance to be further strengthened.

This project remains strategically critical not just for Orchid, but also for our country. It will materially enhance backward integration and long-term cost competitiveness once this becomes operational.

Our overall outlook remains positive. The core antibiotic market remains under pricing pressure for the last three quarters.

However, our past experience shows some cyclic nature in this business. This time the downcycle has been a bit longer.

We are seeing some green shoots of recovery in January. However, it remains to be seen if this is sustainable or transient.

Our differentiated products ramp up, new geography launches, licensing agreements, and cost discipline are expected to gradually improve revenue mix and medium-term visibility. Financial year '26 continues to be a transition year.

While the base market is weak, Orchid today is strategically stronger and building assets that will change the earnings profile over the medium term. In closing, I would like to thank our employees, partners, and investors for their continued support.

We are navigating a difficult industry cycle with realism and discipline, while steadily building long-term value. Thank you.

I now welcome your questions.

Thanks for the opportunity. Am I audible?

Yes, you are.

Sir, for the quarter ended this and nine months ending FY26, can you please share the revenue split between exports and domestic? Also within exports, how is it split between regulated and another markets?

Give us a moment, we'll just share that.

Domestic business is about 20% and 80% is export. On the regulated versus non-regulated markets, our split which we have told is 1/3 is to 2/3.

My next question is if you could share the split between sterile and non-sterile API for the three months and nine months ending December '25.

We've already shared for nine months the number was 1/3 is to 2/3, which is our long-term average, no change there. I don't have the data for three months specifically right now.

Okay. For sterile and non-sterile is also 1/3 and 2/3?

That's right.

Thank you.

Good evening, sir. Am I audible?

Viraj. Go ahead.

Yeah. Sir, a few questions.

I think Manish just explained in his opening remarks on the core business. I just missed it.

I think he said that in oral there was a 12% price erosion followed by that he said something with 10%. Could you please repeat that?

So,

10% quantity erosion, 12% price erosion.

This is on a nine-month basis.

Got it, sir. What would be the case for sterile?

Sterile, I think on a nine-month basis we look, the quantity variation is about 10% and value basis is flat.

Right. Sir, we had two molecules where we were confident of filing them in the US market, Teflaro and Avycaz.

Can you give me an update on both of those products and their filings?

Yeah. We are in you can say advanced stages of signing off a partner agreement for both.

I'm sure before our next quarter call, we may be able to announce some of the agreements. The filing should happen this year for both the products or maybe early next year.

Like last time we explained, ceftazidime-avibactam we had filed, there were some observations from FDA, and we are seeking those clarifications how we can refile that submission. We're still awaiting a feedback from them.

Whereas for Teflaro, we have signed a term sheet with a partner, and we would be taking up the validation batches of API and FDF soon.

Right, sir. I think both these products were supposed to be filed a bit earlier.

For whatever reason, they've been delayed. I think potential for Teflaro was supposed to be close to approximately ₹80 to ₹100 crores and Avycaz approximately a ₹200 crore opportunity, as and when they scale up over a two- to three-year period of time.

Just wanted to understand the timeline as of now in terms of the current environment, what opportunity size we can see for both these products.

Yeah. Viraj, we've not shared in terms of rupee value.

I've always shared only the US market size for both the products. Teflaro continues to be about $125 to $150 million product.

The good thing is for ceftazidime-avibactam, the US market has significantly increased from about almost $200 million, it has become more than $300, $350. That's a good thing.

We are still within the launch window. I think we missed the 180, the exclusivity on day one, we have missed that last year.

We should be ready to launch on 181st day. For that, we are within time.

Hopefully, that partner agreement we'll conclude shortly. If our existing batches would work or not, that's a discussion we're having with US FDA or do we need to make fresh batches, that's the question we have to answer yet.

Got it, sir. Thank you.

I'll just move to the second part of my question, which is related to Exblifep. You said that Spain and Italy are showing promising sales.

Based just on your understanding, I know it's initial months, FY27 onwards, based on your own internal estimates, what kind of royalty income, trajectory of sales are we expecting from Europe? Secondly, in India, if you could estimate, I think last quarter we did share that we've been ahead of our internal estimates in terms of Exblifep sales in India.

If you can assign some kind of a goal or timeline where we can achieve specified sales in India as well for Exblifep, both these numbers would be helpful.

Sure. On India sales, overall we have caught up with our estimates by now.

One of the key laggards is we had estimated that the partner would penetrate some of the institutional business which is governed by the government, like defense, government hospitals, and things like that. The movement there has not happened.

The early advantage where we were running ahead of our projection, we have kind of nearing towards that. We will know more in a couple of quarters.

Otherwise, for rest of the regular business, it seems on track. That's on India business.

For Europe, we will not be able to share a countrywide forecast because our agreements prohibit it. All the licensees in their countries have their own commercial interest.

Maybe in the next quarter once we come up with a new guidance on future, we will be able to share some better color on how we see this.

Got it, sir. The last question is kind of a housekeeping question.

If you can just help us understand the debt and the cash on hand as on the quarter end. I'm assuming for our 7-ACA project, we will be utilizing the debt to the fullest in the interest subvention scheme.

If you can just give me an idea of when the debt would be fully utilized and what that number would be in the coming few quarters, assuming we are targeting mechanical completion by September. That would be helpful, sir.

Just other thing, Manish just highlighted in his earnings call at the starting remarks that more or less of the inventory has been absorbed for the gross margin levels. Going ahead, you always maintain 40% plus/minus 1% to 2% range for gross margin.

Going ahead, if you can just give a similar kind of range as well would be helpful.

Yeah. The gross margin this quarter was around 31%, and that is largely contributing for the lower EBITDA and profitability.

That is also reflected in the fact that our regulated contribution from 1/3 has become 1/4, which is a reflection of higher margins in the regulated market. Basically, our large market of cefixime, the recovery is not that good.

One of our larger markets is actually Russia. Because of this war, probably Russian business has taken the biggest hit.

That is one of the, I would say, the largest and most important reasons for this downfall in the regulated market sales. With respect to your question on the debt, we have planned a ₹450 crore debt on the 7-ACA project, and the drawdown till now is ₹170 crores.

Sir, what's the cash as on date?

Cash, we are not using any working capital limits right now, and we have cash in QIP and others.

Around ₹75 crore cash we have in hand, around ₹50 crore from QIP funds and ₹15 crore in FD.

Working capital limits are unused. Okay.

Sir,

if you could just give me an idea of the gross margins which are expected, is it going to be in the range of 30%, 35% going ahead, given the current market environment?

Like I said, you see the the non-regulated margins are also much lower than what we traditionally face. In January, we have seen there is a there's a slight improvement in non- non-regulated markets.

Even the raw material prices have slightly started improving. What happens generally, in my experience, when the prices go down, the customers generally slow down their buying, they delay their buying.

Now that the prices have started improving, I would I would find, more interest in buying. The The customers tend to reduce their inventory, which situation will reverse.

Definitely margins in non-regulated would improve. With respect to regulated markets, our margins remain between 50 between 40% to 65%, I would say.

It generally depends if if in a particular quarter we get more percentage, higher percentage of regulated sales, our overall margins margins improve. This this quarter particularly, the the sales of the regulated business is much lesser.

That is yielded in a lower margin.

Thank you so much, sir. All the very best.

I'll get back in queue.

Thank you.

Hello, everyone. Hope I'm audible.

I have a quick question on the cefiderocol. Are there any updates for the cefiderocol in India or when can we expect the cefiderocol in India?

Yeah. The project is on stream.

The project work is going on fine. The API is already manufactured.

We would be able to start the production sometime in December.

December 2026, right?

December 2026, right. After that, there will be maybe five, six months of registration.

We are hopeful we will get a waiver considering the importance of this molecule. Right.

I have one quick question on the Exblifep. Any plans to expand the molecule beyond US and EU like China and LATAM countries, like worldwide?

Yes, yes. We are talking all across the world for licensing.

There are discussions going on in more than 10 countries right now.

For more than 10 countries. Fine.

In the last quarter, you have mentioned that you are in negotiation for commercialization agreement for US market for Exblifep. Is there any update?

Can you put some light on that?

There's nothing that we could disclose at this point of time. Like I said, if any definitive something is signed, then we will announce, like what we announced about the two term sheets which have been signed.

Okay. Do you have any planning to file the ceftolozane-tazobactam in US and EU generics?

Can you repeat your question? Sorry.

Sorry, can you repeat?

Okay. Do you have any planning to file the ceftolozane and tazobactam in the US and EU generics?

That's under development right now.

Launch timeline for that product would be in '31 or after that. That's under development right now, and of course, we will be launching in US, EU.

Okay. What about the ceftazidime and avibactam regarding US and EU filing?

Are there any updates?

We had already filed in US. There were some observations.

We are in discussion with them how to correct those observations. Based on their feedback, we will decide whether we have to take the batches again or the same file can be presented once.

Yeah. On the commercial deals also, we are close to signing commercial deals for this product across many geographies.

Once this product goes off-patent, I think this is going to be a big win for Orchid.

In the EU as well, right?

Yes, US, Europe, other geographies as well.

Thank you very much. All the best for your future quarters.

Thank you.

Yeah. Thank you for the opportunity.

Sir, will you be able to provide the sales data for Allecra? I think it was acquired in October 2025, right?

Yes. We did not have any sales.

Okay. Are there going to be any sales from Allecra in Q4 FY26 then?

We have not acquired Allecra, just to clarify. We have acquired the assets from Allecra.

The licensing works based on royalty. Whatever royalties come will come to Orchid's bottom line.

They will not be reflecting in our sales figures as such.

Okay. Has there been any contribution in the bottom line of Orchid?

Manish was explaining that the numbers are there, but it's very small because Spain and Italy are large markets which have just started this quarter. There should be meaningful numbers, this year would be practically you can say the first full year of commercial operations in Europe.

Also the launch in UAE and Kuwait has also happened, we should see some revenue coming in from GCC countries as well.

Okay. Thank you.

Yeah. Hi Manish, hi Mridul.

Thank you for the opportunity. I joined the call a little bit late, some of my questions might be repetitive.

First question is Dhanuka Laboratories, where are we on the merger? Can you give nine months revenue and EBITDA numbers?

On the merger, it's more like tareekh pe tareekh chal raha hai. From Jan we got a date of Feb, from Feb we got a date of March now.

We are waiting for the courts to finally decide. It's been a long almost three-year process.

It will happen when the God bless, I would say.

Okay. Nine-month numbers, if rough numbers?

The nine-month sales is around ₹305 crore rupees as against 370 last year, there's a downfall here also.

Margins, EBITDA?

It remains same, 5%, 6% range.

Sorry?

Same what has been traditionally been between 5% to 8%, it's in the same range.

We don't calculate actually, it's an unlisted entity, right? These are very, very broad estimates at this point.

Okay. On enmetazobactam, let's start with Europe, do we have now approval all across Europe, all 27 countries, or there is still some filings to go?

In terms of filing, there is only one, which is already there. The licensed partner, which is Advanz, their plan is largely focused on Western Europe.

Through in Eastern Europe, they will start discussions with, you can say, as B2B basis with other partners. We are not privy to their internal discussions.

The focus right now is on Western Europe big five countries and some Nordic countries.

Is there approval in all those EU5 plus Nordic three?

The regulatory approval is universal across the EU countries, but every country has a healthcare system, they have to get the product entered into the healthcare system so that doctors get recommendation to prescribe and then the reimbursement from insurance and all that happens. That has to be worked through every individual country.

That is what is taking time to launch country to country.

Okay. There is no approval barrier.

It's just you have to work through insurance and the every country's system, okay. Eastern Europe, I didn't understand B2B partnerships.

I didn't understand that.

Advanz on its own does not have the strength to launch. It will go through some sublicenses, like for example, Orchid has licensed to Cipla for India market along with Orchid.

Advanz will probably give a sublicense to other people because they don't have their own presence in Eastern Europe.

When is that likely to get finalized and we can see some sales starting?

We don't have any visibility on their business plans.

Okay. Any sort of two-, three-year projection from Advanz based on market research or if they feel confident about anything you can share?

Next quarter, we'll be coming out with the future guidance. Hopefully, with the merged business, how it's going to look overall.

Then we'll talk about some of the segments in the future guidance.

Okay. Then coming to US, where are we?

Any tentative timeline? You can say that in six months, we'll see some positive outcome or in 12 months, we'll see some positive licensing outcome.

Yeah. Hopefully, we should be signing US deal within this year.

That's the target. Last quarter, I reiterated we'll take about 12 months.

US is the biggest market and the deal is expected to take some time because they would do due diligence of the entire dossier and things like that. We are in advanced discussions with several companies.

Hopefully, within this year, this would be closed.

There are discussions going on with three three parties, let's hope we can maybe move faster with our negotiations.

Okay. That is good to know.

Then how about ROW, how are we looking to target ROW markets?

That is a big change in our strategy. That was, in my opinion, one of the flaws in Allecra's strategy.

We are talking across Latin America, Southeast Asia, North Africa, Russia. We are very hopeful maybe every quarter at least one or two announcements should happen.

Every quarter one or two announcement in some countries.

We are talking at least five, six regions other than the US. Hopefully, they should materialize one by one.

Okay. That's good to know.

And 7-ACA, September is mechanical completion? Can you give the timeline when can we see water trials, when can we see first commercialization?

September is mechanical completion, and then first commercial should take a quarter or two from that. Water trials in one quarter and commercial production in the next.

Okay. We're on track in terms of everything, funding, pilot quantity, pilot runs, all that, we're on track.

Yeah. Manish explained in this call on the pilot, we have fully absorbed the technology and we are on target of what we expected.

Okay.

We hope

Cefiderocol, did I hear that we're already producing API?

Yeah. We produced the API, we have put it on stability.

The finished formulation is only that we are going to sell, so that will only happen in December when the plant is ready.

If I remember right, formulation we are looking at 1 million vials, right? We have API capacity to support that entire 1 million vials?

That's right.

Okay. Formulation, we still expect a December first sort of product and then six months registrations after that.

That's right.

Okay. Base business next year, you feel confident we'll get to, let's say, 10% kind of margins, FY27?

I don't have any reason to believe that this downcycle will continue for so long, but given the current geopolitical situation, honestly speaking, you don't know. One of our large markets, like I said, Russia for cefixime, there are three large brands in Russia, and all three of them use our product.

With all these sanctions and all, we don't know what to say. Iran is such a big market, Bangladesh is a big market, Egypt is a big market.

These are factors beyond anybody's control, I don't know.

How large is Russia or CIS?

Russia is a big market. It's the largest European country by population.

Okay. I see.

Final

Sorry, I believe even Piyush Goyal does not know whether he will be able to sign the treaty with EU tomorrow or it will fall out, what can I say about international business?

Yeah. Okay.

Then the final question is can you give some update on the hospital segment, where are we and what do we hope to achieve in FY27 in that segment?

Yeah. The sales have stabilized, and we are seeing month-on-month growth in the sales.

As of now, the biggest challenge is getting the right manpower. Our sanctioned strength is much higher, we are not able to do enough hiring, otherwise we would have achieved more than our targets.

Besides our Orblicef, we have also launched another product, which is the first generic, it's the Teflaro generic we have launched in India. I think that will be a good contributor to our revenues of AMS division.

Because other than innovator, we are the only generic available. We launched this in the month of November.

I see. FY27 ₹50, ₹60 crore from hospital segment, is that a fair number to pencil?

No, it doesn't grow that fast. I'll be happy if we do ₹20 crores.

I think this is a launch platform for cefiderocol. Once we sign the commercial licensing with GARDP and Shionogi, we are creating a launch pad for cefiderocol.

That will be a significant business of injectables formulations.

Okay. Thank you for answering my questions, and all the best.

Thank you.

Hi, am I audible? Hello?

Now you are.

Sorry, sir. In your opening remarks, sir, I missed it.

I think you said for Exblifep, you signed a binding term sheet in one of the EM markets and a non-binding term sheet in a regulated market. Is that correct?

That's correct.

Okay. Sir, second question is on cefiderocol.

I believe, sir, stated that in December '26, we should have commercial operation commissioning for the facility. In your previous con-call, you said that in H1 FY27, I think we'll get a clearer idea whether a waiver for Indian market will be granted by the government or else we'll have to go through trials for the product.

Any color on that? If we don't get the waiver, then how long would the commercialization take in India?

Yeah. There was a notification that depending on the need of the country, if the product is internationally approved, the DCGI can give a clinical trial waiver.

We have experience that we got a clinical trial waiver in our Orblicef also. We are confident.

However, if the clinical trial has to be done, then GARDP is going to do the clinical trial, that is in their domain. I think together we've had multiple discussions.

We are confident considering the AMR situation now that the Prime Minister himself talked about AMR in his Mann Ki Baat. I think DCGI will be cognizant of this issue and the problem that cefiderocol can address about serious infections, we are confident we should get a clinical trial waiver.

It would be, I would say, too much of an injustice to the patients if their access to cefiderocol is delayed.

Got it, sir. Thank you so much.

Thanks for the follow-up. I wanted to ask what are your views on Penicillin G minimum import price and how would this impact you imminently?

Also, does it also have a red-out for 7-ACA?

See our majority business is exports, minimum import price does not apply for the exported goods. You can still import freely Penicillin G if you're exporting the goods manufactured out of that.

I don't see much impact for us largely. I believe it will impact largely the domestic business of manufacturers who make amoxicillin.

Thank you. My second question is what are we in terms of capacity utilization for sterile and non-sterile?

In last few years, we had increased the capacities significantly. While I would say till two years back we were at 80% utilization, now would have come down to 60%.

We can generate turnover of more than ₹1,200 crores with our capacities current.

My next question is can you share the end sales of Exblifep in Europe?

No, that we are bound by confidentiality.

No problem. Do we expect to get upfront payments for the licensing deals that we sign on enmetazobactam?

Yes.

Yes, and the fees are linked to some of the milestone events, it's not just upfront. For example, we have received one major milestone payment on the launch in UAE and Kuwait.

The fees are structured that there would be some upfront, some milestone linked to various items going on. There would be lots of milestone and upfront.

While the quantity for the nine months is reduced, was it also for the current quarter or did we see the volume growth?

Sorry?

While quantity for the nine months has reduced, was it also for the current quarter or did we see the volume growth?

For the current quarter three months on the oral products, we have recouped some of the sales, in fact, we've grown by about 10% in terms of volume, not in value. On sterile, I think we are roughly flat.

That's why on overall volume basis we are only down by 10% as explained by Mr. Manish earlier.

Okay. My last question is are we trying to diversify our product mix from our traditional products, considering the steeper pricing pressure?

Yes, we are continuously working on launching new products. For example, Mr.

Manish talked about ceftaroline launching in India through our AMS. We're already producing the API.

Celta-Avi, we are of course the first launcher in India, plus we are now supplying to other markets seeding now globally where the patent has expired, and we are in advanced discussion for partnership in countries where patent is still valid and we should be the first few to launch. The idea is always to focus on newer products, while the older products will continue to remain the backbone largely because oral products are easier to prescribe.

Sterile products is Orchid's strength, and our focus will remain there.

Understood. Thank you, all the best.

Thank you.

Hello.

Yeah.

Yeah. Hi, I just wanted to ask you if in this quarter also we had some inventory pricing adjustment which led to margin compression, or that was dealt with last quarter only?

There was some impact, I would say some impact during this quarter, but mostly it would have been taken care of. Last quarter was a significant impact, this quarter [unclear] effect will be there inventory reduction.

Okay. Are you still seeing a lot of competition from Chinese suppliers?

When there's a downturn in international market, the biggest competition you face is from the Chinese only. As the Chinese economy has not done too well either, they tend to dump product internationally when their local demand is down.

Then yes, I would say there are some headwinds from China as well.

Okay. Now the Indian rupee has depreciated by almost 10%, 12% in the last six months against the Chinese yuan.

Does that help Orchid's case and Indian suppliers' case a little bit in international market?

I think that has been very helpful. Rupee depreciation has It has been helpful because our imports are much lesser than our exports.

Rupee depreciation helps us in terms of getting, more rupees for the same dollar.

Okay. In terms of your raw material, most of it is imported from China or other countries?

Significant portion is imported, yes.

In terms of what percentage of your raw material is imported and what is from India?

It would be around, I would say, out of total raw material, maybe 30% to 40% would be imported.

A big part of that is 7-ACA, is that correct?

That contributes a large part of our imports, probably the largest.

Okay. Now because the rupee has depreciated and if the 7-ACA is coming from China, which is let's say now 10%, 12% more expensive compared to it was earlier, and the economics of our 7-ACA plant which is coming up in next few months, that would have improved by a proportionate amount, right?

Your margins from that 7-ACA project would go up by whatever 8%, 10% because of this rupee depreciation, is that correct?

Although honestly, we have not worked out, yeah, it's a very valid argument, it will definitely be beneficial to us. It will definitely be beneficial.

In terms of supplying this cephalosporin players in India, there is us, who else is there?

Right now there are only two three players in cephalosporins, ourselves, Aurobindo Pharma, and a company called Covalent Labs.

All of them they are importing their raw material from China, the 7-ACA?

Right, that's right.

We'll be the only one producing our own 7-ACA going forward, or are they also putting up their plants?

As of now, we don't have any news of anybody else setting up a plant.

Okay. That means that kind of makes us the lowest cost producer of cephalosporin by next year?

That is our objective.

I think that's it for me. Thank you.

Hello. Thanks for the opportunity.

Sir, I joined a bit late, apologies if the questions are repetitive. You may choose to skip it, I can go through the replay.

Sir, any updated thoughts on what is happening at a macro level in our industry because it never went through such pain. Are you seeing any signs of recovery?

That's question number one.

I am not sure if I agree completely. In my experience, API business has remained cyclic all through these years.

Once the prices fall, which can have multiple reasons right from lower demand to reduction in raw material prices, every time that happens, the people try to reduce their buying, they try to reduce inventories. It happens almost every two, three years, I'm not very surprised with this.

This time it has been a bit longer, but I don't think it is sustainable. The only risk that we carry is if some alternate class of antibiotics start replacing cephalosporins.

Thankfully, that has not happened as of now. We have the largest range of cephalosporins, if any antibiotic has to sell, we have that in our portfolio.

As long as there are infections, I don't see any long-term threat to our business. Understood.

As of now, we don't see any signs of recovery, or do you have any expectations maybe by I

don't see I said I don't see any threats to our business, any long-term threat. With respect to recovery, I'd said that in the month of January, we have seen some 3%, 4% improvement in the prices in domestic market.

There is a possibility that things might improve in the next quarter. We have to see whether it is sustainable or not, that is to be seen.

Right, thank you. Next question was around you said now that we own the entity wherein we sold the rights regarding royalty, any status on that?

Are we receiving the royalty, any line of sight over there?

We've answered this question. You can go through the transcript.

There's an extensive discussion around royalty.

Fair enough, thank you. Maybe just the last question around our various projects.

Any updated timelines on when those projects would be commissioned?

That is also already discussed actually. Just for

Sir. All the best.

Okay. You wanted to say something?

Hi, sir. Sir, I had a follow-up question on the Pen G minimum import price.

My understanding is cefixime is made from GCLI and GCLI is made from Pen G, is my understanding. The company that you procure GCLI from is buying Pen G from China.

Would that minimum import price apply in that situation? Because it's not you that is directly importing Pen G, it's your supplier that is importing Pen G from China, and then your supplier is supplying to a domestic company.

Yeah. There's a process called advance authorization.

When we export cefixime, we give advance authorization to our GCLI suppliers, and they can use that advance authorization to import Penicillin G without MIP restriction.

Understood.

We get that license from DGFT, and then we can give sublicense to them for importing duty-free and MIP-free.

Got it, sir. Right.

Sir, can cefixime be made from 7-ACA, or Pen G is the most efficient route to do it?

As of now, Pen G is the most efficient route, yeah. There is a possibility to make from 7-ACA also.

Okay. Are we seeing any improvement in the Pen G pricing for us?

Because lately, the Pen G pricing has moved down. Has it helped us on margin so far, or because of the inventory at higher prices, it's not helped us on margins as of now?

I would say till December, there was no such improvement. January, like I said, The Chinese have also started quoting higher price, but this is the normal trend before their New Year holidays.

Difficult to predict. We will know once they come back from the New Year holidays.

The cefixime prices have definitely improved in the month of January, February.

Okay. Sir, just one final one on branded formulation.

You said you may be able to do ₹20 crores next year. Is that the right number I heard?

I said I would be happy if I do ₹20 crores.

Okay. Including enmetazobactam, kind of it would still not be a ₹20 crore business then next year?

Enmetazobactam is divided into two pieces, right? We do 15%, 20%, 80% business is done by Cipla.

That Cipla business is not part of this.

I'm talking about only our own marketing business, not Cipla's business.

Okay. That profit share and supply revenues is something different is with the

That is completely different.

Got it, sir. Thank you very much.

Our own branded marketing is what I was talking about.

Understood. This is helpful.

Thank you very much.

Thank you. Ladies and gentlemen, I would like to thank you for your active participation.

We remain committed to build long-term value for our investors, and we are working hard to achieve that goal. Thank you once again.