Marksans Pharma Earnings Call for Q4FY26 & Full Year

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[00:00:00]for FYI26 earnings conference call hosted by DAM Capital.

[00:00:05]As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation concludes.

[00:00:14]Should you need assistance during this conference, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.

[00:00:24]I now hand the conference over to Mr. Nita Nagarwal from DAM Capital. Thank you and over to you sir.

[00:00:31]>> Thank you. Hi, good afternoon greeting everyone and a very warm welcome to Marx Sama's Q4 F26 post reserves earnings call hosted by Dan Capital Advisor Limited. On the call today we have representing Marx Sama Management Mr. Mark Sandana founder, chairman and managing director and Mr. Jendra Sharma chief financial officer. I will hand over a call to Mark to make the opening comments and we'll open the floor for questions. Uh please go ahead sir. Uh thank you Nathan. Welcome everyone and thank you for joining us for our Q4 and FI26 earning conference call. We sincerely appreciate your interest and continued support for the company.

[00:01:12]Over the last several years, we've been consciously building a diversified global healthcare company with multiple growth drivers across regulated markets.

[00:01:23]FI26 marks an important milestone in that journey.

[00:01:27]During the year, we crossed 3,000 crores in net income for the first time and delivered our highest ever profitability.

[00:01:35]More importantly, we strengthened the quality of business through geographical uh diversification, portfolio expansion, improved margins and strong cash generation.

[00:01:48]We expanded our international footprint through new market entries in Germany, Canada, Ireland while also strengthening our presence in Australia through our entry into branded prescription genetics.

[00:02:01]Talking about regional growth, starting with North America, this remains our largest and fastest growing market.

[00:02:10]Revenue for FI26 reached 1,533 crores, reflecting a growth of 24% yearonear.

[00:02:20]Over the last four years, the revenue in this market has increased from 635 crores to 1,533 crores, demonstrating the scalability of our operating model and the strength of our customer relationship.

[00:02:36]During the year we launched 112 SKUs and and currently have 51 additional products in the pipeline.

[00:02:45]In UK the business saw a clear recovery of trajectory during the second half of the year while FI26 revenue were were marginally impacted by pricing pressure during the early part of the year.

[00:02:59]However, the Q4 performance was encouraging with revenue reaching an all-time quarterly high of 308 crores representing a growth of 12.3% yearonear.

[00:03:13]We currently have 18 product approvals, new product approvals, 30 products under review, 24 products awaiting approvals.

[00:03:23]Our next four years, we intend to file over 200 products in the UK market.

[00:03:28]increasing and creating a strong medium-term visibility.

[00:03:34]Europe represents the next important phase of our growth strategy.

[00:03:40]Australia's was another important highlight during the year. Our Q4 revenue reached 123 crores reflecting a strong growth but sequentially uh strong growth both sequentially and on year-on-year basis. More importantly through Nova Pharma, we have entered the prescription segment for the first time and launched 11 branded generic products.

[00:04:08]Having uh having built a deep OTC capabilities over the last two decades, this expansion meaningfully increases our address opportunities in Australian market and create an additional long-term growth driver for the business.

[00:04:26]Coming to profitability, FI26 saw a strong improvement across all key operating metrics. Gross margin improved to 56.7% while EITA margin expanded to 20.4%.

[00:04:40]The Q4 margin was particularly strong at 22.8%.

[00:04:45]This improvement was driven by better product mix operating leverage, soften raw material cost during the second half and continued focus on execution either the market. At the same time, we remain mindful of the near-term external headwinds.

[00:05:04]We expect uh obviously some infl uh inflam uh inflammatory pressure on raw materials uh cost during Q1 FI27 due to the ongoing geopolitical and supply chain disruption.

[00:05:23]A balance sheet uh continues to remain a significant strength for the company. We closed FI26 with a cash and cash equivalent of approximately 990 crores.

[00:05:36]This provides us with a sub substantial flexibility in invest behind future growth opportunities while remaining disciplined capital allocation approach.

[00:05:49]In line with a commitment to create a long-term shareholder value, the board has recommended a final dividend of 900 per equity share representing a 90% payout on face value for FI26.

[00:06:06]Overall, we believe the company is entering the next phase of growth from the position of considerable strength.

[00:06:13]We will continue to build the diversified global company, expand into new regulated markets, strengthen our product pipeline, improve profitability and maintain a very robust balance sheet. More importantly, we believe in creating a business that is scalability, that is scalable, resilient, and positioned to deliver sustainable long-term value for all our stakeholders. With this, I hand it over to Gunda.

[00:06:43]Thank you sir.

[00:06:47]In Q4 of FY 26, our operating revenue stood at rupes 856 crores, an increase of 20.8% yearonear compared to rupees 78 crores in the same quarter last year.

[00:07:00]Revenue from the US and North America market stood at rupes 46 crores, an increase of 23.6% 6% on a YUI basis, reflecting sustained demand momentum and strong execution in the US market. UK and EU formulation business recorded revenue of rupees 308 crores, an increase of 12.3% yearonear, marking the highest ever quarterly revenue. Q4 momentum was driven by multiple new product launches and improved order flow. Australia and New Zealand market revenue stood at rupes 123 crores delivering 61.3% yi growth. The rest of the world's revenue stood at rupees 19 crores.

[00:07:43]Gross profit for the quarter grew by 21.5% yearon year to rupees 465 cr with a gross margin of 54.4%.

[00:07:52]An expansion of 27 bits on a y basis. We recorded a bit of rupes 195 cr in Q4 of FI26 up 54% on a Y basis. AITA margin expanded by 491 basis points on a Y basis to 32.8% reflecting strong operating leverage as revenue scaled up and cost control measures. Profit after tax stood at rupees 149 crores an increase of 64.3% on a Y basis. EPS for the quarter was Rs 3.3. Moving to FI26 performance, our operating revenue stood at rupes 2,951 crores compared to rups 2623 crores in the same period last year. An increase of 12.5% on a yi basis. The US and North America market recorded revenue of 1533 crores up by 24% on a y basis and contributed 52% of our total operating revenue. UK and EU market revenues to debt rupes 1,5 crores contributing 34.4% of the revenue. Australia and New Zealand market recorded revenue of 303 crores. The rest of the world market recorded revenue of rupes 99 crores.

[00:09:04]Contribution from these two markets stood at 10.3 and 3.4% respectively. The gross profit was at rupes 1,674 crores up 13.2% on a yi basis. Gross margin expanded 32 basis points on the YUI at and stood at 56.7%.

[00:09:24]Abita for the period was rupees 6001 crores with the AITA margin at 24.4%.

[00:09:30]Profit after tax was at rupes 420 crores. EPS for FY26 was rupes 9.2.

[00:09:38]In FI26, cash intrated from operation amounted to rupees 458 crores with the capex during the period being rupes 151 cr primarily for the new facility and ongoing maintenance capex with a major capex cycle now complete. Free cash flation continues to improve steadily.

[00:09:56]We deliver free cash flow of rupes 328 cr during the x596.

[00:10:02]Our working capital remained at at 138 days. We invested rupes 89 cr in R&D of 526 which amounts to 3% of our consolidated revenue. We continue to remain debtfree and the cash balance stood at rupes 9990 cr as of 31st March of 2026. With this I would like to open the floor for question and answers.

[00:10:24]Thank you very much.

[00:10:26]>> Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question assembles.

[00:10:52]Our first question comes from the line of Ahmed Mada with Unifi Capital. Please go ahead.

[00:10:58]>> Yeah, thanks for the opportunity. uh just to understand your comments on the raw material cost inflation. How should one look at the margins coming through?

[00:11:09]You you spoke about the impact in Q1, but I'm assuming there will be some contractual pass through with a technical lag or something. So you can elaborate a bit uh how should we thinking about the price hikes and gross margins and near term.

[00:11:25]>> Yeah. So we we are uh witnessing obviously um raw materials which uh directly or indirectly have petroleum related ingredients or intermediates uh involved in that. So we are we are seeing a price uh escalation of over 20 to 30% of these raw materials. That said and done, we are presently having inventory uh of a decent amount of uh inventory of u you know raw materials and everything. But um obviously our hope is that uh this war comes to an end as soon as possible.

[00:12:02]Um and u you know and it's not only us it's I guess a global uh wish list for everyone. Everyone's hoping for the same thing. Um but if if it does uh come to an end then obviously we see a correction of uh petroleum related uh ingredients or products and uh you know prices correcting or softening back to its original uh levels. But today we do see a slightly u higher level of raw materials cost and that's where we we u u so far we don't we are not seeing a big impact but if we do run out of material then we would have to buy it at a higher cost uh and that's where we u you know I mentioned that so that uh a bit of awareness comes into play out there >> sure but on your conversation with your customers uh how is that going through because it's I mean obviously everyone is hoping for the things to settle down but if not uh how will how will be your uh contracts being renegotiated and secondly are you seeing uh raw material cost inflation in the APIs paracetamol those sort of APIs or the solvent costs uh where you see a major problem >> because yeah I think directly indirectly they all have some petroleum related products either solvents or something going into them. So technically the cost uh even on commoditized uh molecules have gone up. I I don't see any raw material which has not gone up per se with regards to uh renegotiating our contracts with uh our end customers.

[00:13:50]That's always an option open but because there is no clarity that you know um we would like to wait and watch um because if tomorrow things do uh correct then it will um the overall market will correct uh dramatically and um and the last thing we need is to press a panic button today because we are sitting on inventory or you know a lot of uh products so uh I think uh everyone's waiting even watching and if you had asked me 30 days back I would have said the war will probably come to an end you know sometime back but it is still going on and every day it's like tomorrow right so but I do believe that um uh every's hopeful uh that it will come to an end and u and I don't think it benefits anyone including the US for for for continuing u what what's happening today >> sure and believe me to assume we have inventory through Q1 or uh Q2 as well.

[00:14:54]>> We we we have we have inventory to Q1 uh to a great extent. Uh obviously this is being um you know while we talk of prices going up we are also held up on the forex part of it you know so uh so we do have some cover because obviously the foreign currencies uh have gone up so some leverage is there to absorb that cost price.

[00:15:22]Sure. You know the logistics side. Uh last time when the red sea rise happened, we had 1 2% margin in >> um but uh but now it is it is still it is still around the same uh about 2%.

[00:15:40]But again, you know, this keeps dragging. I I don't have a crystal ball, but uh right now um you know, the logistics per se is very uh uh is very prone to price changes depending on on circumstances. And if this uh comes to a stop, it will go back to its uh historic lows. But right now, it is uh it is creeping up, but nothing to be alarmed of.

[00:16:08]>> Sure. The other question was on the TV unit. Uh how has been the utilization been in Q4 and any comments on the new product launches universe?

[00:16:21]>> Yeah, I mean it's new product launch is happening every quarter but it is getting better and you can see the results are a reflection of our strategy that we did in tea. the um a consolidated number itself is a reflection of uh you know u the uh the decision that we took to get into the facility and invest uh resources. So obviously it is playing out very well as per expectation uh we still uh have a potential of uh maybe uh 40 to 50% of growth coming from there and we are working towards that.

[00:17:00]>> Sure. Uh thank you so much. Welcome my >> thank you.

[00:17:07]Our next question is from the line of mric with choice institutional equities.

[00:17:13]>> Please go ahead.

[00:17:15]>> Just two questions that I have. One is on the uh revenue guidance. So given the current macro situation, are you still on track to achieve the 4,000 cr revenue at 78?

[00:17:25]And uh second is on the pipeline. Uh what sort of pipeline launches have you planned in North America and Europe uh for FI 27? That's all.

[00:17:37]>> Yeah. Um so to uh to give some uh color and guidance, yeah, I mean we are our target is still there for 4,000 crores in the next two years. Um we have uh we have we have come up with a you know we are a business strategy and a business model. uh we have come up with a uh with a road map to you know double our revenue in the next 3 to 5 years. So um yeah I mean 4,000 crores within the next two years is uh very much uh on the plate right now. And with regards to pipeline our pipeline keeps growing because obviously it's a uh it's a never ending uh pipeline. We keep developing products because that fuels a bit of our growth uh that's a part of our growth strategy. Uh so we've got a health healthy pipeline and we do see 20 26 27 pipeline increasing um by like I mentioned about 50 odd products uh in the US and in other geographies it's much larger than what what is there in the US. Um so uh we are keeping in uh tune based on uh requirements of the market and u you know finding the niche u uh products uh into the respective markets uh so that we can be differentiated at all given times. So uh so we do have a 3 to 5 year uh horizon obviously whatever we invest today or file today you'll see results only in end of 27 or early 28 because it takes about a about a year or so to get approved.

[00:19:18]>> Okay. Thank you so much.

[00:19:22]>> Thank you. Our next question is from the line of Aditya Pal with MSA. Please go ahead.

[00:19:30]>> Hello. Am I audible?

[00:19:32]>> Yes.

[00:19:33]>> Yeah. Thank you so much for the opportunity. Uh great set of results. uh last time uh you had said that 3,000 cr would be missed but you completely exceeded the guidance. So congratulations on that. Uh the last part of my question has been but I just wanted to touch upon a couple of uh years back we had signed a CMO contract with an with a domestic API manufacturer and will that come into play uh to protect us from uh from from a margin from a gross margins uh getting affected because of the AP?

[00:20:14]um not not to a great extent because um you know what's driving the prices up are the intermediates.

[00:20:23]It is uh ultimately the intermediates that are driving the prices up. Um the while the prices uh so we are keeping a tap of every intermediate also that goes into API right. So um but uh obviously we are getting we have more uh more uh sites on our licenses. So we have that flexibility to play around but at any given time at least from that that raw material we sit on a good you know 5 to 6 months of inventory at all given time. So we are sitting on inventory which we don't feel may impact us if the war was called off tomorrow.

[00:21:04]>> Understood. Understood. The the other part was uh you mentioned about currency impact which is benefiting. So uh definitely the on the revenue side >> yes but on the raw material side also yuan and other raw materials which are predominantly denominated in either USB or yuan they also strengthening against uh the INR so are we facing impact on that because it's a it will be a dual thing right your your overall uh USD or yuan denominate price also going up and then the currency is also standing against iron So we we'll be facing the raw material impact on that as well.

[00:21:47]>> Uh yes, you're right. Uh import will get a bit more expensive but you know um but the value chain of getting into finished product and shipping it out is always higher than only the activives and hence uh the overall dollar benefit is much better and it does leverage that increase in raw material price. I mean it does um absorb a decent amount of the raw material price.

[00:22:14]>> Understood. Understood. This this last question I'll merge my two questions. So one one is uh when you were answering to the previous participant on passing on prices. So what I largely understand that these are fixed uh the OTC side of business is largely fixed two-year contracts until where uh where where the where you don't really invoke a clause everything comes back to the table because last time uh when the tariffs which happened uh you said that if we invoke the force force measure then the entire uh contract is back to back into the negotiation table and the other thing is on the on the on the on the on the uh passing on the price. Uh the other thing is on the fates the fates have also the the prices have close to two and a half or tripled what we saw during the Red Sea and Red Sea impact the Red Sea crisis had impacted us. So are we seeing that same the quantum of impact the same or a bit lower?

[00:23:16]>> No, it is much lower than the Red Sea.

[00:23:19]It is very low compared to the Red Sea if you're taking that as a comparison.

[00:23:23]Um because out here uh see the vessels are free uh are moving freely except for the street of Homo right and those are more oil tankers related and all that stuff. So it is not the containers that are getting um you know clogged up and everything of that stuff. So I think uh although the transit time is increased slightly marginally but u uh vessel uh vessels are flowing freely from other routes. So uh so the impact on freight barring the uh the fuel and the fuel cost is not gone up to that level due to scarcity of containers or uh or stoppage of uh shipping line.

[00:24:06]>> Understood. Understood. And on the OTC contacts, >> the OTC contacts see uh uh while it is for a longer duration, you're right on that. Uh but historically, if you look at it during co times, we went through that and you know, we we were successful in revising our prices without actually triggering of any force major. The the problem that we have in this situation right now, we don't everyone expects if I go to the buyer, everyone expects the war to end tomorrow at least. uh as as for the president of the United States says like you know the deal is imminent.

[00:24:43]So um so that's that's where the lack of clarity to some extent and hopes that it will end tomorrow is is something that no one is panicking or no one believes that this will drag on because I don't think uh anyone can afford it to drag on no country can afford it uh to drag on uh and uh and everyone's globally is impacted by it. So I I believe that there will be some outcome u but obviously we always expect it to be uh earlier the better uh and that's where we don't want to go for something where tomorrow the crude uh uh you know comes down or prices come down and then the buyer comes to us and says okay let's revise your prices or we've got cheaper cost of goods from somewhere else. So nobody right now everyone's waiting and watching and if it if it does prolong or if it does go into full full blown out war then obviously we will have to have a different discussion with the buyers at that time but it is possible to go and uh we look into this because everyone knows this is like a post measure it's beyond our control.

[00:25:53]>> Understood. Makes sense. Makes sense.

[00:25:55]Wishing you the team all the very best.

[00:25:57]Thank you so much for answering so patiently.

[00:26:00]>> Thank you.

[00:26:02]Thank you. Our next question is from the line of Rajat G with Fortune. Please go ahead.

[00:26:08]>> Uh yeah. Am I audible?

[00:26:10]>> Yes.

[00:26:11]>> Yeah. Yeah. Top-notch results sir. Uh my query is more with respect to 7 to 8 years long-term. Uh so I think back in Q2 you had mentioned expanding on current land banks to achieve uh 9 to 10,000 cr capacity. So by which FYI should we achieve this uh roughly $1 billion capacity and what should be the approximate cost because I'm looking at road map for us to reach a billion dollar revenue by FI34.

[00:26:43]>> Yeah that's that's a that's a good outlook.

[00:26:49]uh but uh see I mentioned in the previous call that we have a we have a road map and a business module to double our revenue in the next 3 to 5 years and uh we are we are uh we are quite optimistically working towards those objectives. Um we have uh different geographies our focus is into. But in terms of infrastructure um we still have spare capacity and um as and when we believe it is a time to expand our capacity through land banks or through acquiring new plants we are we are already looking out and we already planning for that stage. So I think um I think uh we we may be a bit early but we are still working on that.

[00:27:40]>> Okay. Okay. Okay. Okay sir. And uh just uh one more question uh with this respect to uh this uh do we have any impact because of Trump RX uh like uh like this time cap labs does it have any partnership with uh Amazon pharmacy?

[00:27:55]>> This RX is this RX is not something new.

[00:27:58]It's a very old uh mark tube in the RX.

[00:28:02]So um there's nothing new out there and we are not impacted with this.

[00:28:06]>> Okay, great. Uh that's all from me sir.

[00:28:08]Uh all the best for the FI27. Thank you.

[00:28:11]>> Thank you.

[00:28:13]>> Thank you.

[00:28:15]>> Our next question comes from asset. Please go ahead.

[00:28:22]>> Hi. Hi Mark. Congratulations on a good Q4. Um can we take Q4 as a exit run rate for FY27 i.e. could you replicate this level of revenues and profits for the full year?

[00:28:38]Um so so uh renewals are basically historic if you look at a historic trend over the last couple of years the first quarter is normally the on the always because of seasonalities right uh first quarter is always on the lower side >> the second quarter is better than the first quarter. Third quarter is actually a peak and then the fourth quarter obviously uh uh is stronger but not as strong as the third quarter but obviously this time it was a bit different but it is historically that's how it goes depending on how long the season the winter season actually prolonged so that's where the fourth quarter remains but historically the first quarter so we I've always stressed in all all my uh calls that u we cannot because of our business model the way it is we cannot look at it on a quarter-to- quarter basis, but on a year-to-year basis, >> we we definitely are very optimistic of growth and hitting our objectives.

[00:29:33]>> Great. Uh secondly, sir, can you update on the tea facility? What is the utilization there? Is has it fully ramped up? Is there still a lot of capacity in room? Are you adding more lines?

[00:29:45]>> So, uh we are at uh very close to 50% of our capacity today. um maybe shy shying away from the 50% but very close to that. Uh we still have a a huge scope of um utilization out there. Uh so we optimistic on that. We are planning uh some capex but within the facility because it's huge. Uh but that is to launch u uh different dosage forms or something which is not already there uh in that in the plant. So um uh so we are working it's a part and part part and parcel of our pipeline products that we need a different uh dosage forms to be launched. So for that obviously we need to have missionary or cap capex involved to ensure that we uh you know get those products uh into a pipeline.

[00:30:39]>> Understood. And on the 990 crores of net cash uh any plans to deploy it any suitable acquisition candidates? I think we've been on the lookout. You've publicly said >> for better part of the last two years.

[00:30:53]>> Yeah.

[00:30:53]>> And you thought any plans to distribute it to shareholders?

[00:30:58]>> Yeah. So, so basically obviously we have declared dividends but primarily the reason uh we were we are an active uh dialogue for two uh two uh two u uh targets and uh as a matter of fact one target we are doing due diligence the other one is not started yet. So I'm more optimistic that yeah 2027 we'll see some M&A transactions happening and that's where we've kept the corus because we look at 990 cr and we feel in terms of absolute value it is big but if you look at it from a >> position you need that much yeah >> yeah I mean you you you spend 50 $60 million and uh and you wonder where the money is gone you know >> right and would these targets be in Europe, US any particular therapy, manufacturing, front-end licenses, just a little bit of flavor around what these potential targets look like.

[00:31:56]>> So these targets are a mixed basket.

[00:31:58]Obviously, we are looking at uh platforms, we are looking at different geographies. So my focus is always to diversify in different geographies. That said and done, if a target does come up um come across in a geography that we are very strong in, we will obviously explore and take it to another level. Uh but for us, we've been always very conservative to make sure that whatever we acquire is value u uh basically return on investment and u you know creates value for the shareholders. So we are very conservative in in the valuation. We don't go for uh some high ticket deals and throw money out.

[00:32:37]Absolutely fully aware of that. Yeah.

[00:32:40]>> But we are looking at it and we are optimistic that um 2027 we'll see u some activity out there.

[00:32:49]>> Great. Thank you. All the very best.

[00:32:51]>> Thank you.

[00:32:53]>> Thank you ladies and gentlemen to ask a question you may please press star and one.

[00:32:59]Our next question is from the line of Nishita Sanesha with Sapphire Capital.

[00:33:04]Please go ahead.

[00:33:06]Um yes um thank you for taking my question. Uh so I just had two questions. Uh one is that uh you mentioned that our margins uh could be impacted due to the uh RM price inflation we see. So uh like for the full year FI27 can we still the margins in the same range of 20 21% or do we expect them to be lower? I think >> no I think it'll be the same.

[00:33:36]Okay. And uh if you can give some guidance on the topline level, can we see the growth of 18 20% or is it what range can we expect the growth to be in?

[00:33:48]>> I mean uh conservatively because I always like to be that way but uh you know between 15 to 20%.

[00:33:56]>> Okay. Okay. Okay. Thank you so much.

[00:33:59]>> Thank you.

[00:34:01]>> Thank you. Our next question is from the line of Mana with Fundrise Capital.

[00:34:06]Please go ahead.

[00:34:09]>> Hi, congratulations on for a good set of numbers. Uh my first question would be uh that you've entered the Europe market organically. So do you still plan to look at any uh possible opportunities for M&A in the region?

[00:34:26]>> Uh yeah, you know, we've organically entered into Germany. uh Europe is a cluster of different countries and uh different zones like you have north uh north Europe, you have uh the Nordics, you have uh Eastern Europe. So it's it's it's a cluster of many countries and many cultures and many different u each country has its own um u modus of opery or uh you know the sales that happen. So yes uh we are exploring obviously to uh expand our footprints and become prominent players in Europe per se not only in Germany. So uh we are looking at uh different uh uh countries within Europe also.

[00:35:12]>> Got it. And uh so my second question would be when will we see some uh revenue contribution from new markets uh like Germany um Ireland and Canada.

[00:35:26]>> Um so uh Canada products are on the filing uh and we should see uh a small part of it trickle in uh towards the end of the financial year. Um but uh Europe um we are expecting it to be earlier than uh expected. Uh I mean within this year uh you know we we are expecting maybe second half for it to see some results.

[00:35:52]>> Noted I'll come back in the queue.

[00:35:55]>> Thank you.

[00:35:57]Thank you ladies and gentlemen. If you wish to ask questions you may please press star and one on your touchstone telephones. Our next question comes from the line of Kamal, an individual investor. Please go ahead.

[00:36:12]>> Hello, I'm >> Yes.

[00:36:15]>> Yeah. Thanks, sir. And your team for set of numbers. My simple question is uh what is operational capacity available out of 26 million units as of now?

[00:36:27]>> Are you asking for the capacity uh utilization capacity? Yeah, right now uh we have total capacity of 56 billion units and even though 8 billions for Goa plant might be expendable. So what is right now operation capacity available?

[00:36:46]>> That's uh 50 uh slightly below 50% for the tea plant.

[00:36:51]>> No no no sorry uh let me out of 26 million are we near about 18 million units per year already available operation capacity.

[00:37:01]Okay.

[00:37:02]Yeah. Different different facilities. Uh you're talking of all three facilities put together.

[00:37:07]>> Yeah. Yes. Yes. Yeah. Yeah.

[00:37:09]>> Yeah. So, um we we are at uh 13 to 14 billion.

[00:37:15]>> Okay. Okay. Thank you.

[00:37:16]>> 50%. You can say like I said around 50 50 to 55%.

[00:37:21]>> Okay. And what about the or med which strategically get into the company uh four years back and some stage they have shown what is their plans either they are they objective has been achieved or what's some color on it sir >> well I can't speak for them but I think uh I think they see the strength of the company and uh they they see u they they are quite happy with uh the progress and um and uh the road map that we have in place. So I I can't speak beyond that uh on on the outlook but um I'm sure they are happy with uh with our strategy.

[00:38:03]>> Okay. Uh R&D spending near 3%. What is outlook for next year to five years for R&D spend? Um how much of >> like to keep it at that?

[00:38:14]>> Okay, keep it that uh it will continue like that. Uh uh last question is uh do we have any land bank outside Goa? I think few years back some news are there and in Nagpur we have some land bank etc for new faculty or something. Is it right or it is >> outside outside Goa? Presently we don't have anything >> and bank. Okay. Thank you sir.

[00:38:36]>> Thank you.

[00:38:38]>> Thank you. Our next question is from the line of Ahmed Mada with Unifi Capital.

[00:38:43]Please go ahead.

[00:38:45]>> Yeah. Thanks for the opportunity again.

[00:38:47]Uh two questions. Firstly on Australia geography living out the seasonality in the cuff cold season. what sort of growth rate can we uh can we sustain with the all the new launches we have done? Obviously Q4 was very strong but uh moving forward what sort of growth rate one can assume and what sort of scale >> uh like the previous in the previous uh calls that I mentioned are we we have a business module to see us a road map to see us uh to hund00 million uh I think we reached halfway uh mark out here uh but I very optimistic u and very confident that within the next three years we should hit those objectives of uh of hitting our first milestone of $100 million.

[00:39:36]>> Okay. Sure. And in terms of the new geographies uh EU markets and Canada, can you give some uh sense of what progress you made in the Canada market? You spoke about the European region in the call earlier.

[00:39:53]>> The Canadian market a lot of products are on the Friday right now. So um you know and um uh we see approvals trickling in uh somewhere towards the latter part of uh this financial year and uh primarily we are creating uh it'll be an organic setup but we have creating an organic setup that uh you know uh operations but we still have time to create that because um you know product approves are not there so we don't want to set up to be sitting idle out there but we do see revenue generation uh one has to understand that Canada is relatively a smaller market than any of our countries any other geographies we are into. So it is but it's a part of our strategy of expanding our footprints into different geographies and that's where Canada comes into play.

[00:40:45]>> Sure. Thank you so much.

[00:40:48]>> Thank you.

[00:40:50]Our next question comes from the line of Mir Damana with Fid asset management company. Please go ahead.

[00:40:57]>> Yeah, just just one question for my side. Considering that we have uh a decent uh roadway uh for growth New Zealand around 100 million uh Australian dollars or so. Uh my understanding is that we still currently only hold around 60% in the uh entity the Australian entity. Uh and considering you also added 1,000 crores cash in the books, why not just buy the outright 40%. Or is there some constraints in that?

[00:41:31]>> Yeah. Well, the management is running that right. So the the other 40% is working hard and growing the company and helping us achieve our objectives. So we are happy with that.

[00:41:44]uh do we not have like a call option or any discussions of just increasing the stake monetizing some >> we don't have that and uh again you know I I do believe we can grow a lot uh as as partners than individually so um you know we uh the management is very capable of uh basically driving growth uh moving forward so um I think uh so far We we are happy with what we see.

[00:42:16]>> Okay. And while uh currently uh let's say sitting right now at closer to 3,000 crores or uh we've done a very good job stealing this uh company into a US and a developed market generic company. uh but if you look at uh after a particular scale uh a lot of other companies are moving into uh some some are moving into CDM or some are moving into biologics but we are still currently uh still focusing on uh oral solid pain pillars uh like generic products do you see any merits uh in diversifying maybe 3 to five years down the line into other adjacency or do you think they still runway for growth at least for the next to five years before you kind of pivot to uh something different.

[00:43:05]>> So every geography, every country we operate different uh so that we don't have a thumb rule. If you look at our portfolio in uh UK, it is more tilted into RX than into OTC. Um and our revenue is much more split but every country that we operate we basically have a very diversified and balanced portfolio. So as time goes by we will basically cover any stone uh I mean we'll ensure no stone is left unturned.

[00:43:32]Uh but um we do see uh we I do believe uh 3,000 C is the tip of the iceberg and we have a lot of potential of growth uh based on our strategy that we are executing as on today. So uh we've come to one uh we've achieved a great milestone but we've still got a long way to go.

[00:43:55]Okay, got it. Thank you.

[00:43:58]>> Thank you.

[00:44:00]>> Thank you. Ladies and gentlemen, to ask a question, you may please press star and one.

[00:44:07]Our next question comes from the line of Jugal Sha, an individual investor.

[00:44:11]Please go ahead.

[00:44:13]>> Thank you. Hi Mark. Uh congratulations on the great set of number. I've been your investor for last five to seven years. Uh so last couple of quarters were challenging u so good to see this quarter and especially the dividend which you have provided uh which is uh again very welcome. Uh I have two questions. One mark is on the working capital side. I do see that decreasing uh year over here. So just wanted to have an understanding like what is the comfort level and do we see it going down?

[00:44:50]So um you know basically um uh last year we were hit with the uncertainties of tariffs. If you look at uh the whole of uh the past year uh there was a huge amount of uncertainties and it went on there was a lot of chaos prevailing. So it was a conscious decision for us to ensure before our products nobody knew what will happen uh tomorrow. So before our products get uh into uh any tariff zone, we decided to go heavy on inventory both finished product as well as uh raw materials. So um uh you know I mean it uh it was better safe than sorry and um you know our board and everyone we discussed and we decided let's just be uh just secure ourselves as much as we could produce or whatever material we could keep on stored. Now if you look at it retrospect uh this year we have different challenges and that's uh related to fuel but it is helping us in terms of what we did last year. So we have uh you know we are we are not panicking that the prices are going up because we are sitting on whatever we built last year. So we are depleting some of that inventory that we built but uh again uh it's typical to uh uh ideal case scenario we would love to u go a bit lighter but geopolitically we don't know what comes next so we have to just keep u keep a track of that and be one step ahead if possible. Um I'm I'm least concerned about the uh the working uh cycle today because uh you know we are it is it is basically helping us out in what we are doing today.

[00:46:36]>> Okay good enough. Thanks Mark. Uh the the last question which I have Mark is from now onwards to the next two to three years whatever guardian you are giving where would you see the highest amount of revenue in terms of percentage if you could just give a broader idea in terms of a five like EU Australia New Zealand.

[00:46:56]So I I do see I do see eventually if you look at three to five years obviously US will be a growth driver always uh but at the same time I would I would put a lot of stress I would put a lot of weightage on Europe uh UK is also growing nicely and obviously I've already given a guidance for Australia so I'm quite confident on Australia part of it so all our geographies will grow but the uh but the new geographies that come into play will be Europe And uh we're working hard to ensure that we'll be uh within one of our allied subsidiaries which are which are doing decent uh milestones out there.

[00:47:38]Is it safe to assume the pricing power would be higher in US compared to other geographies?

[00:47:47]>> Pricing power >> I mean sorry in terms of margin >> am I in terms of margin?

[00:47:54]uh you know in terms of market obviously US is highly very competitive so it won't be the uh it's a huge market so lot of uh price uh pricing pressure comes out there but I do believe Europe is relatively better and then again uh UK is also doing fantastically well depending on uh depending on the product basket mix that you know we offer u so it's it's quite evenly distributed from all angles.

[00:48:25]>> Okay, thank you Mark. Uh once again congratulations and uh good luck for the entire team.

[00:48:32]>> Thank you.

[00:48:34]>> Thank you. We have no further questions ladies and gentlemen. I would now like to hand the conference over to the management for closing comments. Over to you.

[00:48:44]>> Uh thank you everyone for uh for the continued support and interest and u please be safe and uh take care and have a great evening. Thank you. Thank you.

[00:48:55]>> Thank you. On behalf of Dam Capital Advisor Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.