Alivus Life Sciences (NSE:ALIVUS) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the q two FY twenty seven Earnings Conference Call of Alivus Life Sciences Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

0:26 Please note that this conference is being recorded. I now hand the conference over to miss Swamy Rao from Alivus Life Sciences. Thank you, and over to you, ma'am. Good morning, everyone. I welcome you all to earnings call of Alivus Life Sciences Limited for the quarter ended 09/30/2026. From Alivus Life Sciences, we have with us Doctor. Yasir Raoji, our MD and CEO and Mr. Tushar Mistry, our CFO. Our Board has approved the results for the quarter ended 09/30/2026. We have released it to the stock exchanges and updated the website. Please note that the recording and the transcript of this call will be available on the website of the company. Now I'd like to draw your attention to the fact that some of the information shared as part of this call, especially information with respect to our plans and strategies may contain certain forward looking statements that involve risks and uncertainties. These statements are based on current expectations, forecasts and assumptions that are subject to risks, which could cause actual results to differ materially from these statements depending upon the economic conditions, government policies and other incidental factors.

1:30 Such statements should not be regarded by recipients as a substitute of their own judgment. The company undertakes no obligation to update or revise any forward looking statement. Our actual results may differ materially from those expressed in or implied by these forward looking statements. With that, I invite Doctor. Yasir Raoji to say a few words. Thank you, and over to you, Doctor. Thank

1:50 you, Shami. Good morning, everyone, and welcome to our Q2 earnings call. Let me begin by extending our long wishes for the upcoming activities. Turning to our performance, we are pleased to report another quarter of healthy execution, reflecting the strength of our underlying business and a significant improvement in profitability. During quarter two, revenue from operations stood at INR682 crores, up 16% year on year, driven by new product launches and a healthy demand across our existing portfolio. Our non GPL business grew 20.8 year on year and now contributes 79% of our overall revenues.

2:40 Performance remains healthy across Europe, Japan, North America, LatAm and ROW markets. Recently launched products continued to gain traction across geographies, further diversifying our revenue base. GPL revenues recorded marginal growth of 1% year on year. For FY 'twenty seven, we expect the business to follow its historical trend with a stronger contribution in H2 and expect full year revenues to be around 700 crores to INR $7.50 crores. Our generic API business grew 11% year on year in Q2, supported by healthy demand across regulated and emerging markets. The broader product portfolio continues to seeing growth market.

3:31 The

3:35 a U. Year on year. This was driven by improved traction across existing projects and was complemented by new projects. We continue to see CDMO as an important growth opportunity as our project portfolio progresses.

4:00 More importantly, we are seeing a clear improvement in the quality of our portfolio that is impacting our earnings. A better revenue mix and improved operating efficiencies are translating into stronger underlying profitability. Coming to our expansion plans. The Sholapur facility continues to progress as planned, and Phase I is expected to become operational in Q3 of FY 'twenty seven. Construction of our R and D center at Taloja is also progressing well, and we hope to be on schedule early next year. Our pipeline remains robust with over six thirty DMF and CEP filings globally as on 09/30/2026.

4:50 Our high potent API portfolio continues to advance with 30 new products in the active grid, representing a total addressable market of $86,000,000,000 Of these, 14 products have been validated, seven are in advanced stages of development and the remaining nine products are progressing through lab development. As we move into the second half of FY 'twenty seven, we remain mindful of the evolving external environment. At the same time, the continuing momentum in our core business progress across CDMO and the depth of our development pipeline provide us with confidence in our growth outlook. So accordingly, we reiterate our FY 'twenty seven revenue growth guidance of 10% to 12%.

5:39 We are confident of delivering EBITDA margins in the 35% to 36% range in FY 'twenty seven. Overall, our priorities remain clear, executing on our growth strategy, scaling our portfolio and strengthening our presence across key global markets.

6:00 We believe that these initiatives provide a solid foundation for sustainable growth in the future. So with this, I now turn the floor to our CFO, Mr. Prashar Mistry, who will walk you through our financial performance for the quarter in-depth. Over to you, Prashad. Thank you, Doctor. Alivus. Good morning, everyone. Welcome to our Q2 FY 'twenty seven earnings call. I would like to take a moment to highlight the key performance updates for the quarter and half year ended 09/30/2026.

6:34 For quarter two FY 'twenty seven, revenue from operations stood at INR 82 crores, a growth of 16% year on year. Gross profit for the quarter was INR $4.39 crores, up 29.5% year on year. Gross margin for the quarter stood at 64.4%, up four twenty basis points quarter on quarter and six seventy basis points year on year. This was on account of favorable product mix and recent launches.

7:01 EBITDA for the quarter was at INR $2.85 crores, up 47% year on year. EBITDA margin for the quarter were at 41.8%, up five twenty basis points quarter on quarter and eight eighty basis points year on year. Excluding the onetime income, adjusted EBITDA margin was approximately 39.5%, reflecting improved operating efficiencies.

7:22 PAT for the quarter stood at INR 197 crores with PAT margins at 28.9%, up three ninety basis points quarter on quarter and six eighty basis points year on year. For first half FY 'twenty seven, revenue from operations stood at INR $13.22 crores, a growth of 11.1% year on year. Gross profit for H1 was at INR $8.25 crores, up 22.9% year on year. Gross margins for H1 stood at 62.3%, up five ninety basis points year on year. EBITDA for first half was at INR $5.19 crores, up 38.4% year on year. EBITDA margin for first half was 39.3%, up seven eighty basis points year on And PAT core, it constituted INR $3.57 crores with PAT margins at 27%, up five ninety basis points year on year.

8:16 Looking at the therapeutic mix. CVS and CNS continue to lead the growth during the quarter with both therapies contributing 50% to the top line. Chronix therapies contributed 67% to the top line in Q2 FY 'twenty seven. R and D expenditure for Q2 FY 'twenty seven was INR 27 crores, which was 4% of our sales. For H1 FY 'twenty seven, it was INR 51 crores at 3.9% of our sales.

8:41 On balance sheet and cash flow movement, CapEx for the quarter was INR 105 crores and for the first half, it was INR 190 crores. Crores. We continue to remain a net debt free company, and we have generated a strong free cash flow of INR $2.70 crores, leading to cash and cash equivalents, including short term investments of INR $10.12 crores as of 09/30/2026.

9:02 Looking ahead, healthy demand trends and enhanced visibility for H2A527 provide us with confidence in sustaining our growth trajectory through the remainder of the year. With that, let us open the floor for Q and A.

9:16 Thank you. We will now begin the question and answer session. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

9:47 The first question comes from the line of Ahmed Madhav with Unifi Capital. Please go ahead. Yeah. Thanks for the opportunity and congratulations on a very good set of numbers, Doctor. Praush and the team. First, just to understand the nature of one off we mentioned, can you explain it, I believe the calculation says about INR 24 crores, 25 crores.

10:11 Can you explain the nature of the one off income? So there are two components here. There's a validation supply of a complex product, okay, that had very high margins, okay, and contributed to it, plus... Plus, there was some income approval, which was done in this quarter, which is a one off kind from one of the customers that we would be getting,

10:42 which is one off in nature. Got it. Understood. So is it fair to assume that this gross margin still to sustain about 60 percentage, which we have also executed last two quarters?

10:55 Obviously, current quarter was 64 plus. Is that fair way to look at it? Yes, we expect it around that going forward. And just can you give some more sense on we've been mentioning about new product launches contributing to higher margins and the margins range, if I look at excluding other income, it was close to 30%, has moved to 34%, 35%. You continue to guide that sort of sustain more or less. More clarity in terms of just more sort of nuances in terms of how should we look at it in terms of new launches, which have contributed margins, a little bit of explanation that can help us sort of triangulate what things we have achieved in terms of getting margins, which are probably close to industry leading?

11:56 See, certainly, it's the new products, the launches that we've had that is contributing to higher margins, okay?

12:08 And when we say new products, it's not just what we launched this year, okay? There have been launches of last year that have been sustaining the momentum, not only in terms of growth, but also in terms of margin profile. So as we keep moving ahead, I mean, we're kind of building it up with the new pipeline.

12:33 And that's why even after we take away this onetime, we are seeing much improved margins. I won't be able to give you which products because frankly, we don't get into a product wise discussion. But we can say this much that the quality of our portfolio is steadily improving in

12:58 terms of more complex, more higher end molecules. And that helps to the overall growth as well as the margins. I understand we can't disclose product names, but let me put it other way. Sometimes what we see in the industry is when there are new launches, the margins are extremely high. And then as the formulation partner sells the product and then they face a price erosion probably a year or two later, the margins for API player as well as the formulation partner will erode. So is this kind of a nature of the new launches we have had, where because of the ramp in the initial ramp up, the pricing you are getting is much

13:45 higher, same will be the case with your customer. And then as things move forward, margins will normalize or this is sort of a case where there is certain step jump in the margins because of the quality of your incremental portfolio?

14:00 The margins on newly launched products have a sort of shelf life, should I say, right, of maybe eighteen to twenty four months. And then it starts normalizing. But then if we keep enhancing the portfolio with newer launches, then it should sustain. We don't see a challenge there. And and he Sorry to interrupt, Mehmet. I would request you to rejoin the queue. Thank you. The next question comes from the line of Yog Rajani with Omega Portfolio Advisors. Please go ahead. Hi. Thank you for taking my question. And once again, great numbers, sir. My question is regarding the second half of the year. So second half, we normally see higher GPL contribution, which, as you highlighted earlier, is a lower margin business than our non GPL and CDMO business.

14:55 So how do you see the margins being affected for the second half?

15:02 Yes, you're right. FY I mean, the second half of the year, GPL generally picks up the volumes, and that is what we are expecting in H2 as well. While we have been maintaining that it's comparatively the non GPL business is a better margin business. But GPL business is not very low margin business. It is a good stable margin business, and we should see that kind of margin for H2 as well.

15:35 And that's why we are confident of the guidance that Doctor. Mentioned in his commentary of about 35% to 36% EBITDA margin in the for the overall financial year. All right. My second question is regarding the CDMO business. We've recently seen a huge growth in our CDMO business Y o Y as well as Q o Q. Could you give us some more insights into what is happening in the CDMO business? And how can we see the growth going from here? So we haven't added new projects. We are still driving the CDMO business with these five projects, but we've seen an uptick in demand across these projects. And certainly, the newer projects that we've added last year are contributing quite substantially.

16:26 So that's what led to that improvement. And would we see further improvements? As we said, we have a lot of clients that we like potential clients that we are talking to, and we have new facilities that are also coming up in the second half of this year. So is there any guidance in terms of how we would be scaling up the CDMO business?

16:46 Even qualitative is alright. I understand we can't get into... Yeah. That's what... We we have a number of projects that are we are in discussions. And hopefully, we should close in the first half of next year on a couple, but certainly, one more project will get added, okay? So they are in advanced stages.

17:10 And so that should drive keep driving the momentum, the new projects. But we have quite a few that we are in discussions. The next question comes from the line of Ankit Minocca with Adaisy Family Office. Please go ahead.

17:35 Hi. Good morning. And congratulations on the excellent set of numbers. My first question is with regard to, I mean, now that we have several new promoters on board and you have all of these new launches and a reasonable margin trajectory also going ahead. Should we recalibrate maybe our growth expectations from the company? I mean, I believe in earlier concourse, you also always mentioned at profitable growth. So I mean, profitable growth currently looks

18:07 probable. So I mean, should can we move to a higher double digit growth range or over the next two or three years at the company?

18:20 See, Ankit, we have grown our non GPL business almost 21% this quarter. Okay. So in that sense, we are already there at double digit. Now you know this, if you've been following us, that the GPL contribution has remained relatively flat, and it's quite substantial. So as a result of that, when we add it all together, we don't want to sort of we want to be clear that, that's a good business, like Tushar said, we'll keep that going. But when you put it together, then we are in this 10% to 12% range in terms of the growth.

19:03 Okay. Sure. And in terms of margins, I mean, this quarter, obviously, there's some one off and there is but there are significant higher margins because of new product launches. You're talking about 35% to 37% mix for this entire year. How should we look at FY 'twenty eight? I mean, do we think of maintenance of that kind of margin profile from the receivable and what the kind of the value in that as well? We should be aiming for that, right? But as a floor, right, as a floor, let's say, nothing works out. We'll still be between the 30 to 32 range. I mean we have enough we have reasonable visibility for next year. And like I said, we will aim to achieve similar margins as FY 'twenty what we are guiding to FY 'twenty seven.

19:57 But just to keep it balanced, I think if nothing works out, we'll still be at 30% to 32%, okay? But the way things are going, we see that there is enough launch momentum from launch products. And so we should continue. Plus, there's the global situation, right? I mean, we so far, we've been able to manage it reasonably well because we've kept we've taken good calls on inventory, and that has helped us as well. So it's not only the new launches, but also the way we managed the whole cost escalation, right, by having judicious sort of inventory interventions.

20:51 And finally, in terms of the pricing environment, how does it look like for the company, the different molecules and overall for the sector? You come back again, the pricing environment you said? Yes, the pricing environment that you're currently seeing. Are there pricing pressure or are pricing is pricing doing well? I mean, see, the generic business does have that, right? So we do factor in some level of erosion. I must say that the erosion has been a little less this first half, okay? But it's reasonable because we are in regulated markets, and there's a fair understanding of what the customers are also able to do at the front end.

21:44 So it's not unreasonable. It's kind of regular on the erosion. So the pricing environment, I would say, is quite stable.

22:02 The next question comes from the line of Nitin Agarwal with DAM Capital. Congratulations team for a brilliant set of numbers. Doctor. Nathal, two things. One is, a, on the input cost inflation that you talked about, which is coming through over the last few quarters. I mean, has it been easy for you to pass it on to your customers?

22:28 Yes. It has we have been able to pass I mean, Nitin, we have had price inflation on our raw materials, okay? But largely speaking, we've been able to pass it on to the customers. Okay. That's good. And secondly, with the Shola facility coming on stream in the first phase in the second half of the year, as you mentioned, I mean, strategically, what kind of impact does it have on the business, both on the generic and the CDMO side, right? I mean, not from near term, but even take a two, three year view of... It's with the large capacity, which was not there for us available at any point in time from our fresh green fleet capacity capability. I mean, what kind of tailwind does it bring to the business possibly to you in your assessment? It's going to be a big contributor in two to three years' time because it's a large facility. We have a good runway for bringing in newer products that will be coming in.

23:22 Ankleshwar today contributes almost 65% to our revenue, okay? So it would be nice to have a similar facility of this size. It also helps us on the CDMO side because we can offer these kind of capacities to potential customers, okay, for larger volume APIs and maybe even high value intermediates. So it's a I mean, Sholapur, we are looking at Sholapur as a pretty I mean, in the two to three year time frame as a pretty big growth driver. And does that I mean, sort of just trying to understand there, the fact that we were a bit of capacity constrained in the last few quarters, I mean, rather you were opting at optimized capacity, does it has it really led to any sort of supply misses also for us? Business we had to forego because capacities are not there?

24:24 Fortunately not because where we did have some crunch was on the intermediate side. Pharma capacity was quite we managed that quite reasonably. So we haven't lost any kind of business or had to postpone orders or anything of that sort. And secondly, on the new product launches, I think we've got a large so the two things, one is, a, of the DMF to be filed in The U. S, how many are yet to be commercialized? And two, are sort of high value complex DMFs around HP high potency API and iron sucrose. Over what frame do you see these getting commercialized? So of the 160 odd DMFs that we have in The U. S, we are working on the commercially, we have about around 90 to 100 is what is contributing commercially.

25:25 Another 60 still have to come off patent, okay? So we have that runway that should fructify in the next sort of three- to five year period. Some may go even beyond that, but most of them should start giving us commercial benefit in a three- to five year time frame. Coming to the high potent portfolio, Nitin, most of our portfolio essentially goes off starts coming off from FY late FY 'twenty eight to around FY 'thirty three, FY 'thirty four.

26:10 So it's a five- to six year window in which we expect to commercialize most of these high potent molecules. And then there is another element here. We are seeing that a lot of these Onco products did not get filed. The patents did not get filed in many ROW markets. So that's an early entry opportunity that we are also looking at with our customers in those markets. So just pushing on that point, so there is a lot of companies typically high potency oncology has been an area where a lot of companies have been focusing on over the last few years, even from an India ecosystem perspective. What gives us an edge? What is the right to win versus the peer set here?

26:58 See, so far, the tie ups that we've had across geographies have been pretty reasonable. So I mean, once we get those tie ups in place, then at launch, we would have we know we would have customers and we would be entering those markets. So, getting a last one. On the formulation CR that we acquired last quarter, any more if you can give us some color on how you're looking at this business over our next two, three year perspective, I mean, this segment? So we will be building we've already identified a portfolio of around 25, 30 dossiers that would be developed in the next three years, okay, and have a reasonably close commercialization window.

27:55 So we expect to start seeing that portfolio sort of coming in in about three to four years' time. And the momentum with that will continue at the rate of around 10 to 12 filings every year. And these will be across not just focused on North America and Europe. The next question comes from the line of Alankar Garude with Kotak Institutional Equities. Sir, can you take us through the technology platforms that you have been working on over the past few years? You've spoken about flow chemistry in the past and how some of these initiatives have been helping improve the quality of the portfolio, as you mentioned, and hence, that repercussion on EBITDA margins.

28:58 So Alankar, see, I would sort of break it up into one is that we went quite aggressively on the oncology side, okay? We got started just four years ago, lot growth And we're seeing three, FY 'thirty four, we should see that a commercialization. Lot of Flow chemistry, we have already commercialized one project. And it's amazing how we've been able to knock down the COGS to less than half of what we had. It was a product that we already had and did have and had a number of customers. But with flow chemistry, we've been able to knock down the COGS to less than half of what we were doing with the batch processing. So flow is definitely going to play a big role going forward because we have five projects right now that we should execute commercially in flow in about eighteen to twenty four months.

30:15 And then, of course, there's the filing and so on. So that has certainly led to will be a good addition to our overall on the platform side. Then, of course, we have the IQGenics platform that, again, I just mentioned what we are planning to do with that. And another area that we've developed internally is pellets, okay? So we have currently 15 pellet products that we have already developed, and we're going to validate them within this next year to be able to launch those as well.

31:04 That's very helpful, yes, sir. Very sorry, carry on, sir. No, I mean, that pretty much sums up what we've been doing in the last and of course, there's a complex products that we've been talking about. And on the iron complexes, and that is coming along pretty well. So we've already got four products that we are developing in various stages of development. Understood, sir. So just a follow-up on the formulations part. From a manufacturing standpoint, where do you stand? And broadly, if you could break it up between oncology and nononcology, what is going to be our strategy on the manufacturing side?

31:53 So like I said, we'll be building up a portfolio for around 25 products, right, in the next three years. And there is a strong inclination within the company to have our own manufacturing facility. We haven't taken a call yet to do it for sure because there are third party manufacturers that we can tap at least in the short term. But then we feel that to protect intellectual property and to keep a good handle on quality, We might be better off if we build our own facility, which could take about eighteen to twenty four months. So we would be well timed in terms of being able to manufacture our own products that could see approval in about three to four years' time.

32:49 That said, coming to the Onco, what is interesting about most of the Onco portfolio that we have, and we do intend to go aggressively with the oncology portfolio for the front end. When I say front end, I mean, our business will remain a B2B. But we will and we will stay sort of in the out licensing space, okay, to with that. But the good part about most of the Onco portfolio that we have is that it's an oral solids. I mean, the larger chunk of the business, and this will come from oral solids rather than on injectables.

33:36 I mean this is the newer portfolio that we are working on. I mean if you look back, earlier oncology therapies were largely driven by injectable therapies. So here, again, there is a good synergy. If we build a facility here, right, we would not initially go for an injectables facility because most of the Onco portfolio would also be an oral portfolio. Understood, sir. The second question is again on margins. If you look if we adjust the margins for the two one offs, the margins are EBITDA margins are still expanded by almost six fifty, 700 basis points in the first half.

34:21 Broadly, what would be the contribution of the stable pricing environment that you mentioned, lesser erosion in the first half to this margin expansion in the first half? I would say around 2.5. Understood. And broadly, you expect that to continue over the foreseeable future? Let's see. I mean, it's also driven by the mix, right?

34:51 Okay. So if we maintain this mix and we should be able to keep it going. Let's see. I mean and then there is the GPL element that Tushar just spoke about some time back, right? That with the higher GPL revenue coming in, we should see that going down a bit. We'll see. It's a little difficult to predict at this point.

35:19 Got it. That's helpful, sir. That's it from my side. Thank you. Sure. Thank you. The next question comes from the line of Ejaz Lakhani with Unifi AMC. Please go ahead.

35:34 Yes. Doctor. Alivus, firstly, congratulations to you and the team for really very steadfast and very good set of numbers. Great job, sir. Sir, my query is on the non GPL business, which is now inched up in the current range. Do you expect this number to kind of sustain for the next couple of quarters in the same INR 500 crore kind of a range? Yes. We expect that to happen.

36:05 Understood. And doctor, do you expect I mean, are there any tailwinds on account of, I don't know, container shortages or sorry, headwinds on account of any container shortages or any costs which you are able to see as headwinds that you are facing in the near term? Yes. So see, this global situation in the that is getting impacted by the Middle East conflict, okay, has the potential to I mean, freight is one issue, but really, freight doesn't even if freight has gone up, but it hasn't significantly impacted us, we are paying more for freight. But it's a small component. So we can kind of manage that. Where there are evidences on the prices of solvents that are driven by crude.

37:04 So here, like I was explaining, we've taken inventory positions at the right time and managed that in the last

37:15 three quarters, okay? Going forward, we hope to continue to do that. But you never know. I mean, if crude, let's say, touches $200 a barrel, I mean, solvent prices accordingly would get impacted. And

37:34 that is probably the only headwind that we see based on our experience of these last eight, nine months, right, that could come and get us. Apart from we've managed on the raw materials. Even on operations, our operational costs have been fairly stable because we moved away from gas, okay? Gas prices are going crazy, and that is impacting operational costs as well. But we we went for biobrickets for our fuel for running the boilers. And here, again, we have that has benefited us from an operational cost perspective.

38:25 So we are okay with the gas but like I said, crude prices could impact solvents, and that will have quite a good quite a significant impact on our cost structure. Understood. And the solvent cost as a percentage of our basket would be could you call out a range?

38:50 Yes. On the overall basket, maybe around it's around 10% to 12% on our raw material costs. So on the COGS, it would be more like 7% to 8%. Understood. And Doctor, just on the R and D, you spoke about flow chemistry and particle engineering and all these capabilities that you're sort of trying to build out. From a team perspective and r and d perspective, is that team build out sort of completed?

39:20 Or is there other additions of, you know, people on that side that that that will continue to take place? We are pretty for all these platforms that I mentioned earlier to Alankar's question, right, we've got those specialized teams working on all these projects.

39:43 Understood. Yes, we are the hero there, right? But I mean, overall, the teams are pretty stable in R and D. Got it, doctor. Thank you and all the best. Thank you. The next question comes from the line of Prateek with UniquePMS. Please go ahead. Hi, good morning sir. Sir, one question on the CDMO. Is capacity constrained in any way kind of not helping us win more projects?

40:16 See, there are large CDMO projects in terms of volume, and many times they relate to intermediates. Now here, we've not entertained any of that because we really didn't have the capacity. But now with Shulapur coming, that we can open that door. And my own personal experience in this space is that many times, large pharma companies would start off with an intermediate and then migrate us to the API. So certainly, with Shurapur coming up, that window or rather that opportunity also can be tapped with a high level of confidence.

41:04 And for the 5%, yes, this is remain to be in the $57,000,000 per molecule range. Yeah. I mean, I I think that... That's what we are, you know, we are seeing in terms of the ticket size. And then even for projects that would be quite an advancement of closed cost, would be a similar size that we are currently targeting?

41:30 It's a range, Prateek. I mean, I won't say that it's exactly between five to seven because see, there's also a relationship element that we have to factor in. If we are bringing in innovators who have a deep pipeline, they do want to test the waters with us, right, with smaller projects in the beginning. And we are okay to entertain those projects. So we don't want to be too picky. And as long as we can deliver within the capacity and we don't have to make significant investments, we are entertaining even smaller projects. The next question comes from the line of Siddharth Nigandhi with CWC.

42:27 Please go ahead.

42:29 Hi. Congratulations, doctor. And the team for a great set of numbers. I have three questions. First off, considering your guidance of the upper end of your guidance of 12% growth with 35% margins, right, 35%, 36% margins. So both on the upper end leaves us with about 13% growth and 33% margins for the second half. Considering how the first half has panned out and the expected GPL growth in the second half, do you believe that the overall FY 'twenty seven guidance has an upside potential? That's question one. Question two, you spoke on biobrickades.

43:17 Now considering how the year has panned out on crops, right? And then there is bio briquettes from maize, which is likely now to have ethanol usage. Do you see supply being a challenge? And is the gas and briquette fungible to that extent as fuel source?

43:39 That's question two. And question three was on CVMO, right? That business is clearly lumpy, right? And therefore, on a sustained basis from where we are this quarter, do we continue to bump in these kind of numbers? Should we see some lumpiness quarter on quarter? And therefore, on an annual basis, what kind of CDMO growth are you targeting?

44:08 I'll take the last two. Tushar will take the first one. Tushar, you want to go ahead on the upside Yes, Siddharth, your calculation on the full year or the second half numbers is right. If you had to do that kind of numbers, and that is the growth and that is the margin that

44:29 we have assumed. Considering two factors. One is, of course, the GPL business will take up or take off in the second half, which we have mentioned is reasonable margin, but not as good a margin as the non GPL business. So that will have its own impact from a margin perspective. On the growth side, the non GPL business generally sees the fourth quarter a bit subdued compared to the other quarters. And that would also result in this kind of growth in the second half. I mean while non GPL business will pick up the sorry, the GPL business will pick up, The non GPL business will be kind of flattish or slightly lower than the current quarter that you are seeing.

45:18 Got it. That's helpful. Okay. Coming to the biobrickage situation, see, there's a number of inputs, okay, in terms of biobrickage. It's corn, it's sugarcane, groundnuts. But basically, it comes from the waste, okay, which essentially has a reasonably high calorific value and really is at the end of the life cycle in terms of that product. So when you ask about ethanol, yes, ethanol is produced with corn.

45:57 But after all that is done, you will still have a solid waste with a fairly high calorific value. And so this gets then converted to briquettes. And we are not limited to corn here. Like I said, we have sugarcane, groundnut and so many other crops. And India is a large agricultural country. So I mean, we don't see any problem there. In these last few months, we've seen very little escalation really in terms of the biobricket cost also. So we are not seeing much challenge

46:31 in biobrickets. CDMO, I agree with you, it's not a quarter on quarter thing. So one should not assume that we'll just keep hammering away, okay? But it's basically driven by the number of projects that we have that they are able to deliver. And we look at it at least on a yearly basis. So we expect it to perform much better than last year, okay? And we have enough indication that it will. But I won't put a number yet on it, right, in terms of giving you that, okay, we'll close the year with X or Y or whatever. I mean, you can make your conclusions. Sure.

47:17 What I wanted to know was more a longer term three year understanding what growth you would target on the CDMO business rather than just, okay, what's the rest of FY 'twenty seven going to look like?

47:30 Okay. Then it's a different answer here because see, basically, the whole idea of adding new platforms to the API platform and getting into an API plus mode basically broadens the scope of what we can offer, okay? And then we can go after a very different set of customers that are looking for just more than not just API, but even more.

48:03 So that's how we are going forward. I mean, the IQGenics platform, for instance, is not only going to work for producing dossiers, but we are also going to be able to offer that along with the API development platform to customers who are looking to for a formulation as well, right? Then of course, there are pre formulated products like pellets and granules and so on that we could also that we not could, but we will be offering to our CDMO potential customers. So that then has a very different sort of expansion mindset in two to three years, okay? We will be bringing in those in.

48:50 IQGenics is not the only platform that we are bringing in. There will be a few more of this kind that we would bring in to sort of have a

49:01 more comprehensive offering to the CDMO customers. Got it. One last one on the intermediates. You called out the constraint on intermediates,

49:16 while there was no constraint in terms of overall capacity, there was a constraint on intermediates, which I assume would have meant that you would have purchased those. So with Solapur coming up, does that mean that over a period of time, there could be more insourcing of intermediates, which which improves margins? And and then, you know, considering solar port comes up, obviously, initially at a lower capacity utilization, I'm assuming. What sort of margin margin impact do we see on that?

49:51 And on Solarport, can we get to the same three asset terms that we were historically at over, say, two to three years?

50:04 See, we have started off with Sholapur to be to start off as a BIA site. Because like we had explained earlier that we have certain technologies developed already. So certainly, on certain large products where we see a benefit in insourcing, those technologies would be put in place in Sholapur, and we would start buying from we would start making it ourselves. That is certainly the plan. It will have an impact on margins, okay?

50:39 But longer term, Sholapur will be both an intermediate and an API site because we do have a plan that once it starts off, then we will trigger, if not U. S. FDA within a year, then at least the European EU GMP inspection so that we can start catering to the API market as well. Having said that, we expect that in two to three years, our asset turns in Sholapur should be pretty good, more in line with what we have today. But in the short term, that is not likely to happen, okay? We don't we can't get to those level of asset terms partly because of the BI. And then also,

51:28 we can't cater to REG markets for API supply from Sholabur. Thank you. The next question comes from the line of Nitin Agarwal with TAM Capital. Please go ahead. Thanks for taking my question again. Doctor, you mentioned something about the pellets, the product that you're working. So can you just give us some more color on the opportunity that you see Yes. I mean, see, the thing is that there's a pretty significant

52:06 interest in our portfolio and our API portfolio, not as API, but as pellets. Because there are quite a few companies that are, for instance, in the OTC space, okay, that would like a more ready product for them to quickly sort of fill into a capsule and then pack and sell. So there's quite a good overlap with what we have in our API portfolio. So here, we got into this development about a year back, and we are seeing a number of opportunities that we can tap. Now on the regulatory side also, there is a benefit here because we essentially can file a drug DMF rather than get into any kind of dossier filing for driving this business.

53:03 So it's coming together. The only thing is that we've got to ensure that we find a good manufacturing partner initially before we make our own facility, which should take about eighteen to twenty four months. So the filing element and then the approval and then be able to sell, that should be about a year from now. So this is going to be what, a replacement value added product to the API offering and the incremental market that we'll be creating for ourselves?

53:36 It's both. It's a value add to the API, and we open up to other customers as well who would not typically buy API. The next question comes from the line of Prasanthjit Pohl with Pohl Asset Management.

53:59 First of all, congratulations for the great set of numbers. Sir, we have a strong cash in our balance sheet. And every quarter, we are generating strong cash flow, which is great. Now now my question is with this amount of cash, we can grow organically, inorganically. We have a lot of options. So do you have any long term vision, like, let's say, five years or, like, twenty, thirty, we wish to reach at that level? And what could be that growth path? Organic growth, inorganic growth, or, like, CDMO led growth? Just want to focus on the long term vision with the growth acceleration, cash balance, and all. Yes. So we certainly are looking in a few directions to grow. And we have looked at a number of inorganic opportunities in the last fifteen months or so.

54:59 And the clear sort of the clarity that we have with respect to what we want to get is basically something that will enhance the platform, the API platform that we have built. So it would need to have a good level of synergy with the API platform because then we are

55:29 we can sort of continue to add more value to what we already do. And like I answered the last question on the pellets, right, it's a value add. Plus, we open up to a whole new set of customers. So that's the thought process. We are continuing to make the investments on the organic side. Like I said, very likely that we'll take a call soon to build a formulation oral solids facility, and we should get that done in about eighteen to twenty four months. But it's not just that. I mean, we'd be looking at other things as well on the CDMO side also to see what more we can do to create more value with this API portfolio that we have.

56:22 So yes, we are open to both. Organically, it's simpler because we just sort of make the plans, build a portfolio and then keep filing and then we go ahead. So that's a relatively straightforward pathway. On the inorganic side, we have to be careful, okay, in terms of making sure that there is a clear synergy build when we go for something inorganic. So that's all I can say at this point. But clearly, we want to be able to create more value and add more value to what we have already done. So any long term ballpark figure or aspiration in your mind, okay, by 2030, you wish to reach there or CDMO should be that much of our overall revenue.

57:19 Any such thing? You mean in terms of a financial target? Yeah. Yeah. They are there, but I mean, the thing is that, see, what's more important is the underlying sort of philosophy in the company that whatever we do, we've got to do a good job at it and make sure that it's a quality business that we build. Okay. As long as we stay with that kind of fundamental thinking in terms of building a quality business and both in terms of margins, but also in terms of longer term sustainability. That will lead to its own numbers. I can't tell you what we...

58:10 Except the fact that CDMO, we have been guiding that we will double the business from where it is today in next three to four years' time, which would effectively contribute to about between 12% to 15% of the overall revenues is how we are looking at the CDMO business. Others, we don't want to give a number, but then there are, as Doctor. Explained, there are a good amount of initiatives that are there, which we are working on and should lead to that kind of organic as well as inorganic growth opportunities. Okay. Thanks a lot for the answer and wishing you all the very best.

58:55 Thank you. Thank you. Ladies and gentlemen, as there are no further questions from the participants on behalf of Alivus Life Sciences Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.