Sai Parenterals (NSE:SAIPARENT) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Sai Parenterals Limited Q1 FY 'twenty seven Earnings Conference Call. This conference call may contain forward looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements do not guarantee the future performance of the company and may involve risks and uncertainties that are difficult to predict. 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. Please note that this conference is being recorded.

0:51 I now hand the conference over to Mr. Anil KK, Chairman and Managing Director, for the opening remarks. Thank you, and over to you, sir. Good evening, everyone. Thank you for joining our earnings conference call to discuss the performance of Q1 FY 'twenty seven. I hope everyone had an opportunity to go through the financial results, press release and investor presentation, which are uploaded on the stock exchanges as well as on our company's website. Q1 FY twenty twenty seven is only our second quarter of reporting on the enlarged consolidated base, a base that was first captured in the fourth quarter of financial year twenty twenty six.

1:44 NewMed Pharmaceuticals was consolidated with effect from 11/12/2025. Consequently, the first quarter of the previous year, that's Q1 FY twenty twenty six, carries no contribution from New Med and thus year on year comparison is not like for like. Consolidated total revenues for the quarter stood at 182 crores against $20.01 crores in the Q4 FY 'twenty six. Gross profit was INR 76 crores at gross margin of 41.8%. EBITDA stood at INR 27 crores at a margin of 14.9% and profit after tax at INR 8 crores at margin of 4.3%.

2:33 Mr. Anil Kumar, CFO, will take you through the details shortly. The first quarter therefore represents approximately 24% of our full year revenue target of crores. That is ahead of where the first quarter needs to be given our guidance that the year splits 40 five-fifty five between the two halves. Our order flow has always been weighted towards the second half, with the fourth quarter historically our strongest. Gross margin improved to 41.8% from 38.1% in the preceding quarter, an expansion of three seventy basis points.

3:19 Our contracts carry a window of ninety to one hundred twenty days between a price revision being notified and being realized, that lag is now being beginning to unwind in our favor. The recovery of raw material cost increases remain partial at this stage, and we expect some further benefit to flow across the contract book through the second quarter. EBITDA of INR27 crore at margin of 14.9%, an improvement of 50 basis points over the 14.4% recorded in Q4 FY twenty twenty six. I would emphasize that this improvement was achieved on a lower revenue base, and it was achieved despite absorbing elevated air freight costs in Australia.

4:06 The situation in West Asia delayed consignments from the Indian contract manufacturing network into our Australian market. This affected the industry as a whole, and we took the decision to move available inventory by A rather than by C in order to protect our customer commitments. That decision carried a cost. In absence of such constraints, our margins for the quarter would have been better. Let me now turn to the strategic developments approved by the Board of Directors yesterday. The Board has approved a proposed variation in the optics of the IPO issue. In substance, we propose to redeploy INR 83.83 crore originally earmarked for the capacity expansion and upgradation of our manufacturing facilities, that is Unit 1 and Unit 2, and 18.02 crores originally earmarked for the establishment of new research and development center towards majority stakes in our two operating pharmaceutical assets.

5:08 The aggregate amount involved is INR101.85 crores. The proposal is subject to the approval of shareholders. The purpose for which the IPO funds were raised, namely European GMP compliant injectable capacity for regulated markets and a dedicated research and development platform remains entirely unchanged. What is being varied is only the manner of execution. The reason for the variation is a change in the regulatory position in Hyderabad. Under the Hyderabad Industrial Lands Transformation Policy, which is called as Hague Policy, units situated within the outer Ring Road may convert that land and relocate outside it and materially for us, upgradations within the outer growth are no longer permitted.

6:02 Unit 1 And 2 at Elymaetla Falls squarely within that parameter. There is also physical constraint we cannot work around. The GEMETLA site measures approximately 3,100 square yards against the 12,000 to 13,000 square yards that a UGMP injectable plant of this scale requires. The site cannot be expanded, so no adjoining land is available to us. So the alternate of building from the ground up afresh would have cost us extended time. A greenfield project began today with... Would have required seven to eight months for land allotment alone before construction and it could even commence.

6:48 I know that background, the company proposes to acquire 60% equity stake in SAIPARITI Parma Private Limited, a newly established company for 83.83 crores. SAIPARENT has been formed for the purpose of constructing a critical care injectable facility at Gumarbala outside the Outer Ring Road on a site of over 15,000 square yards, where already approvals are in place and three work is already underway. The facility is being built to European GMP and USFDA standards. With their dedicated capability in complex injectables, lyophilization and GLP along with size general injectable capacity.

7:36 I want to be precise on one point, I anticipate you may inquire. This is an investment into a project under construction. It is not the purchase of an established business. On the funding structure, the total project cost is estimated INR215 crores. The company contribution is INR83.83 crores is unchanged from the amount originally earmarked for upgrading one and two. The balance 40% is being funded by the promoters of SAIPARENT and the residual requirement to project debt. The entire 83.83 crores is applied towards the construction of the facility and no part of it represents consideration for an existing business, a customer base or a management team.

8:25 This proposed group delivers approximately 154,660,000 units of injectable capacity against approximately 105,000,000 units under the original oxidation plan. That is roughly 47% more capacity on a larger and long lived effect at an unchanged CapEx outlay from the company and with the completion extended only about a month through April 2027. Alongside the facility, we gain access to SAIPARITI's existing domestically critical care center via approximately 52, which will be in due course to be manufactured from the same new site. The second transaction addresses the research and development.

9:17 Our dedicated research and development subsidiary proposes to acquire a 60% equity in thirty eight Laboratories Private Limited for 15 crore, while the quantum originally earmarked for a greenfield research plant center was 18.02 crore. The state operation established research and development center at the Genome Valley in Hyderabad with three years of operating history, 65 personnel including 28 research scientists and a pipeline of 150 SKUs across 86 molecules with proven capability in lifeless liposomal and nano based complex injectables and in oncology injectables. Acquiring an operating platform in place of a building, one allows development work to commence immediately upon acquisition.

10:07 It removes the construction cycle and it removes what is included considerably harder task that assembling a scientific team of this caliber. The transaction is expected to complete on or before September 30, with the case becoming a step down subsidiary of the company, and will be named as Sai Parenterals. Definitive agreements and shareholders approvals as and when materialized, we will keep the market appropriately informed as those steps are completed. Moving to Australia. On the concluding $5,000,000 required to complete the Australian facility, 3,500,000 is being contributed by the company through its wholly owned Singapore subsidiary and $1,500,000 by the existing Australian shareholders, which has already been invested.

11:01 The company infused 1,750,000 approximately six weeks ago, and the Board has approved the balance 1,700,000 for deployment within the coming week. With this funding of million program stands complete. Construction is on schedule with physical completion targeted for January 2027. The PGA licensing inspection anticipated by 03/31/2027 and phase one manufacturing expected from April 2027. The board also has approved the incorporation of the subsidy in The United States to be held as a standalone subsidiary through SAIPAR ENT PTE Singapore. The entity is being created to support the complex evaluation of an entry into The United States market.

11:51 This evaluation is at a preliminary stage, and we will make appropriate disclosures as and when there are developments to report. Let me close my remarks by recreating our guidance of INR $7.50 crore in revenue for FY twenty twenty seven at an EBITDA margin of around 17%. The year is weighted towards the second half in line with how this business has already behaved. We shall enter the upcoming quarters with the deferred volumes still to be recovered at our Australian facility approaching completion. FY 2027 remains a year of building. FY 2028 is when the build should start showing in our performance. With that, I'll hand over to Mark Kilburn, Chief Executive Officer of Numis Pharmaceuticals, who will speak to the Australian platform in greater detail. Over to you, Mark.

12:48 Thank you, Anil, and good evening to everybody on the call. I'd just like to spend a few minutes on the Australian and New Zealand platform, basically to cover across the structure of the business, which explains a good deal of what you should expect to see in the term over the next two years. NewMed is an IP registration holder, and that is the foundation of everything that we do inside the business. We develop or acquire the dossier. We secure the TGA approval, we and bring first to market product to multinationals and generics. That said approval is what allows us to enter the private label supply agreement with a particular supply chain and deal with the particular pharmacy, which then retails the product under its own consumer brands. The pharmacy chains own the brands, but we own all the registration and hold the IP.

13:45 They do no manufacturing. That is precisely the gap that NewMed fills as providing the turn... Turnkey solution whilst we hold the market authorization. And we also hold the inventory, manage the logistics, forecasting, and providing warehousing distribution and regulatory support. Inclusive of that covers across the pharma divisions. Today, we hold five exclusive long term contracts, and we hold 10 exclusive supply molecule contracts, covering five twenty six SKUs. The typical terms of five years and more and written with product wise annual volume forecast, actual offtake and has consistency of run ahead of those forecasts At this present stage, in forecasting on some of these molecules, it's increased by around about 8% overall in the market.

14:41 On the customer side, our two largest customer relationships are West Farmers Health, which sit in the top 20 of the ASX listed group, supplied through Crossline private label and Pharmacy Health generic brands, and with the eBoss group in the top 150 ASX listed companies supplied through the Cherry White, Kenmark banner and the Pharmacy Choice generic brands, which operates across Australia, New Zealand and Southeast Asia. Alongside these, we also supply Eyenova with the Demizen and Duritas brands in Australia on an exclusive nature. Enabled by the group's research and incorporating Sai's development center, taken together, the West Farmers Health and EVOS Sandoz networks cover across over 2,900 pharmacies of the 5,500 pharmacies that exist in Australia.

15:34 The balance of the pharmacies is covered across our multinational network with such brands covered by Eyenova and other parties as multinationals. And these being vertically integrated into our business from the supply side. In New Zealand, our position rests the same on contracts, one through the Pharmac tender position and strengthens by our exclusive intellectual property rights on several registered products, inclusive of all high heating narcotics that we supply into New Zealand. Before I come to Adelaide, let me spend a moment on the exclusive OTC supply agreement that we have just renewed with the eBOS group being Kerry White, Kenmark and Pharmacy Choice. This agreement was renewed on the 07/01/2026, and this renewal is a platform of our relationship of providing turnkey solutions that has been renowned materially in increasing the pharmacy's profit margin and also to supply product on shelf, which increases a wider portfolio and a longer tenor of significant higher value than the agreement that it replaces.

16:42 It is valued the agreement as a whole is valued at $2.00 2,000,000 AUD or approximately INR 1,300 crore at $1 to Rs 64.5. The agreement is set in stone exclusively for seven point five years. That works out to be around about AUD 27,000,000 a year. And there is a further period of a three year extension by mutual agreement, which would take the agreement out to two thousand and thirty six. Two features of that agreement are worth drawing down on. The first is that it is built to grow. The targets, the addition of 12 new products every year by utilizing our integration with Sai and its development platform through its r and d center, also value the scope of the contract and increase its life for each of those launches.

17:38 The second is the scope that follows through NewMed as we continue to manage our manufacturing, product sourcing, regulatory compliance, TGA registrations, warehousing, quality assurance, and nationwide distribution. The chain has entrusted NewMed with the entire value chain as a single partner for a long extended period of time. And through that process, it has now increased its level in the market to deal with market conditions from NewMed and supplying them with ease. In practical terms, it locks in the predictable recurring revenue for the balance of this decade and gives a firmer base on which we can plan our capacity. Because of the renewal because of this renewal that takes effect from the 07/01/2026, its contribution begins in quarter two FY 'twenty seven and runs through the balance of that year.

18:35 Turning to q one FY twenty seven. As Anil noted, the West Basin situation delayed consignments from the Indian contract manufacturing network into the Australian market. This this was an industry wide disruption and rather than a new med specific one. Our service level agreements and minimum supply obligations to the pharmacy chains have all been met. Whatever the quarter looks like at this point in time, we have released ourselves from any severe penalties through any contracts in relation to do with our continuity of supply. So we've moved inventory available by air rather than by sea. And as Neil alluded to, the cost of doing so has obviously hit the quarter's margin.

19:23 Also, we would like to note that we've absorbed cost increases over the past three months. On the Adelaide facility, the facility at this point in time is on schedule. The internal builds such as clean rings, HVAC, water and power rings, drain rings and equipment is complete with all equipment now in process of order and delivery. We're working towards physical completion at the end of January twenty twenty seven, which will commence the starting and validation work of our first packing lines through December and January, with completing of that validation in February and TGA licensing and inspection by March 2027 and the grant of our license of Phase I manufacturing.

20:15 The starting point in Phase one, and I must take note to call out the Phase one process. With the period of the Iranian position and the disruption in supply chain, the facility in Australia has now become paramount to NewMed and Sai's success as an incorporated company together. It alleviates stock pressure and stock issues that we have to deal with in relation to do with supply out of the CMO network and ensures the supply to our partners. Hence, in turn, while our partners have increased most of their contractual base for long extended periods of time as NewMed being able to offer through the facility tablets, liquid orals, nasal sprays, creams, ointments, and it's supported through the process of the federal government grants of $20,000,000 under the modern manufacturing initiative for sovereign capacity and supply within Australia.

21:15 The facility changes is not the revenue, but what we do is earn from that. Today, product is largely sourced, as we're aware, from third party manufacturers. This will then start to withdraw, and we will be utilizing our own internal network with SAIPARENTOS and our self manufacturing. There is also a second quite different benefit to this, and that is our service levels and our stock levels of supply will change. At this point in time, we're into a position of having to mandible hold nine to ten months' worth of inventory due to the sixty day, ninety day shipping lead times from India and other networks in our CMO criteria. Local manufacturing removes this lead time, and we expect inventory to ease to around five to six months' worth of inventory base.

22:08 Equally, one Indian sourced container of inputs and materials replaces eight finished goods containers, which frees both warehouse space and working capital. Vertically integration also extends upstream, and NewMed draws on size packaging, raw material and API sourcing leverages throughout India to incur that we sit in a position of lower costs and inputs. In the short, in summary, we own the registration. We hold a contract customer relation of considerable tenure, and we will shortly own the manufacturing as well. This has been favorably adhered to from our customers, whilst our customers are signing on longer term contracts for for continuity of supply.

22:55 With that, I'd like to hand over to Mr. Anil Kumar, our Chief Financial Officer. Thank you, Mark, and good evening, everyone. I'll take you through the financial performance for the quarter, beginning with the stand alone business and then moving to the consolidated results. On a stand alone basis, total revenue stood at INR36 crores, against INR20 crores in Q1 of last year, a growth of 175%. We recorded a gross profit of INR 22 crores against INR 10 crores, a growth of 127% at a gross margin of 39% against 37% in the corresponding quarter of last year.

23:42 EBITDA was at about INR17 crores against INR4 crores, a growth of more than 4x at a margin of about 39% against 30% of the previous year. That is an expansion of eight ninety basis points year on year and it is primarily on account of operating leverage. PAT stood at INR9 crore at a margin of 15%, a growth of more than 11x over the 0.8 crore reported in Q1 of FY twenty twenty six. Moving to the consolidated results and repeating the period that Mr. Amin Kumar Karusala said based at the outset, Q1 FY 'twenty seven includes a full quarter of e mail com typical, whereas Q1 FY 'twenty six includes none. New net have been consolidated with effect on November 2025.

24:30 The year on comparison is accordingly not like for like. Consolidated total revenue, including other income stood at INR 180 crores. Gross profit stood at INR 76 crores at a margin of 41% as against 38% in last quarter that is of Q4 of FY twenty twenty six. EBITDA was at INR27 crores at a margin of 14.9% against 14.4% in Q4 of FY twenty twenty seven. Profit after tax stood at a growth at a margin of 4.3. The sequential decline impact against 13.2% in Q4 of FY twenty twenty six reflects a lower revenue base and importantly a normalized cap charge in Q1 of FY twenty twenty seven.

25:19 As of 06/30/2026, the debt stood at approximately about INR310 crores as against March debt of about INR319 crores, with cash and cash equivalents of about INR 184 crores. FY 'twenty seven is expected to be a peak year of debt growth for the existing business as we complete the ongoing CapEx and acquisition program with deleveraging from FY twenty twenty eight as these assets begin to contribute to earnings and cash flows. Even at peak debt, the growth trajectory equity ratio is comfortably placed at 0.6 times. I would add that the project debt associated with the new injectable facility sits at the subsidiary level and will get added on as and when it materializes.

26:09 As indicated, we are well placed on a for a turnover of INR $7.50 crores with EBITDA of about 17%. With that, I would request the moderator to open the floor for questions. Thank you. Thank you. We will now begin with the question and answer session. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of with Antra Group Capital.

27:12 Please go ahead. Congratulations, sir, on good set of numbers and a detailed explanation. A couple of questions. First one was on the order that you won from a pharmacy in Australia, the $2.00 2,000,000 AUD order. There we have spoken about we would be developing on 12 newer drugs. So does the existing order size include those 12 drugs? Or would they be above the order value? Mark will take this question, Rajeev. Thank you very much. I think Mark will be the right person to answer this. Mark, over to you. Thank you. Yes. The 12 products that are NPD year on year, these products have been the first two years products. So the first 24 products have already been identified between NewMed and the customer.

28:13 With that, Sai will be actually developing and has already started development, but they will be developing eight of these products with six already started. Four other products are exclusive contracts on supply that we've taken up for the Australasian area, and the remaining of those products are actually being developed through a strategic partnership that we have with Catalent out of The U. S. And they are based on softgels, which we don't manufacture softgels in any of our facilities at this point in time. So that's the first 24 NPDs. And then from there, we'll get another set of NPDs as each year rolls on, and we normally get them between eighteen to twenty four months in advance.

29:04 Fair to assume that the other value consists of the expected revenue from these drugs or would these drugs will be up and above the other one? No. These drugs will be up and and above the value. The value that we have tabled is the existing value of the existing supply portfolio. Okay. Second question is on how are we able to win this kind of a large contract given that there would be other players? And should we expect such kind of other order wins of this size over the next one year? The order value, because this order value is all forecasted and the run rate is forecasted, so the order is fairly sound at $27,000,000 for the next twelve months.

30:07 Their standardized growth year on year has been running at around about 8%. And that what that comes back to is the number of new pharmacies that they bring into their portfolio and change. So in a stabilized environment over a twelve month period, Terry White, EBOS would bring on around about, say, 35 pharmacies. They may lose between 12 to 14 pharmacies, and they would have a net growth of around about 16 pharmacies. So across their network, they would normally grow at a standard of between 5% to 8% year on year. So should we expect such kind of order wins over the next one year? Should there be more order wins of this size for Nunet over the next one year?

30:56 Sorry, could you repeat that question again? You broke up a little bit. Okay. Should there be more such order wins for NewMite over the next one year? Yes, there should. That's correct. Okay. Okay. And last question is with the new Australia plant coming up, what kind of CMO opportunities do we have in pipeline right now? And how do you see that playing out? There are several CMO opportunities from multinationals at this point in time, not just utilizing our own intellectual property, our own IP dossiers, but also tech transferring product in from them.

31:41 I can't elaborate any further at this point in time on that, but I can say that there are several multinational multinational companies that we have engaged very serious conversation with. The next question comes from the line of with EVNA Advisors. Please go ahead. Hi, sir. Am I audible? Yes,. Yeah. So I have three questions, actually. First is the company is undertaking several initiatives simultaneously, the new med integration, new manufacturing capacity, r and d expansion, and The US entry.

32:29 How are you ensuring that the management bandwidth has not become a constraint to execution? Second question Sure. So... Yes, sir. Please go ahead. Yeah. Once she... I'll answer this question and once she's done the... I'll take up the second question. Sure. See, at every acquisition, you should see the NewMed acquisition. Sai is not only investing money on the acquisition, it is investing the money on the management. See, for example, we own 74.6% in NewMed and 25.4% is owned by Mark and his team. Mark and his team are the people who deliver everything at NewMed. So they are the people instrumental in getting this business to this level.

33:17 And they are the people successful people in putting up Newmark business platform under this platform. So it's it's the Newmark bandwidth who performs, and we will be supporting them in terms of manufacturing, in terms of fund arrangement, in terms of the other things, whatever they had need help from r and d space on the on the procurement from India, everything will do it. The same case with I have reiterated in that Pratek laboratories also. The reason why we went to the Pratek laboratories is with respect to the 67 people who are already on board out of this four people under management who are performing quite consistently for the last three years, and they made the difference.

34:04 And we are retaining them, and they will be part of the uptake going forward in the r and d because each one of them owns at least more than twenty eight years experience in New Delhi, so they will add more value here. So it's not that Sai is doing everything. Sai is acquiring a facility where there is enough of potential people who are running the business. So we are betting on them also, not only on the... What we are acquiring the stakeholders, but we are also believing in the potential of the existing bandwidth of the management availability there. Understood, sir. So my next question is on the revised utilization of the IPO proceeds.

34:50 Could you explain the strategy, Krishnan, for acquiring 60% of the new manufacturing entity rather than upgrading the existing facilities as originally in such? Yeah. I'll do that. So what happened is we filed its IPO document in October October 09/30/2025, And the objectives are formed during that part of time and we went with the objectives of upgrading the facility one and two. What happened is in the month of February, when she did was in government order from the government of Telangana, The units which are categorized under red category and the orange category, which are within the premises of the Outer Ring Road has to go out of the Outer Ring Road in terms of the pollution control measures.

35:41 And they want... Don't want after three years the units to be surviving in the existing industrial estates of red ring orange category. So, incidentally, they also enlightened us that we can't give any further permissions for the upgradations in these facilities because government has taken a firm decision of moving out red category and orange categories out of the outer indoor perspective that is outside the city. So that is this order has come in the month of February, March in 2026. Then we went back to the drawing board and we we understood that investing another 83 crores at the existing facility is not going to help us because in the next two to three years, again, we have to relocate as of the new government regulations.

36:32 That's exactly where we went to the government for an allotment of land, and we were promised to give the allotment, and we started quoting for the lands. At that point of time, we must understood that the land allotment and the and the permission for the land are going to take at least not less than six to eight months for getting the permissions. During which part of the time where when we are scouting for the land, we came across one facility which was started in the last month. They have procured the land. They have started the facility exactly the same facility what we want to set up. The liquid injectable line with the localization, the GLP, the dry powder injectable, and the ampull and vial combination.

37:21 So they are doing it for their own marketing purpose because that company is having a business in the domestic business in India, and they are doing their own 52 crores worth of sales. So they are setting up this manufacturing plant for themselves. When we went to them and understood that they are also having the sales and they are also to be part of it. To do, again, wait for another eight months for the land development and the approvals, we said, don't we acquire this completely? So we went for the proposal to acquire it 100%, but they proposed it that they also want to be manufacturing a lot of their domestic whatever they want to be manufactured from this site. So after a lot of deliberations and discussions, they agreed to give 60% of the stake in that company, wherein we will be investing our 83 crores into that company, and they will be investing their portion.

38:19 And the facility we built is being built on that facility on the plant, which we now last earlier we were starting we were talking we will go only for The US approval. Now this will qualify for the US FDA with another 50% of the addition in the facility in the manufacturing outcome. So it's a win win situation for me. One is the time. The second is their existing manufacturing which comes into the manufacturing into the specialty, their existing business will come into the specialty. So the FX cost will get breakeven in the first period itself. And this becomes a larger entity in terms of a facility. And we can go and all out with USFD also whenever we want to do the registration with The US, we can start registering this company in U. S. Also.

39:10 Understood, sir. That clarifies. Sir, one last question from my end. The new facility offers around 47% higher injectable capacity and USFDA EU GMP compliant cap... Capabilities. What incremental product, customers, or markets do you expect this facility to unlock? To go for EU and ROW market expansion. We will still start with ROW and the markets. The potentially the the case laboratories r and d, which we are now which we are investing and buying low. There are already 125 critical care injectable development already happened at that site.

39:58 Now, the biggest advantage for us is we just have to transfer the technologies to the new plant. So with this, we don't have to waste time on the development of the products at the new facility we've already done at our r and d setup, We just have to transfer them. That is the biggest advantage where we are getting on the particular laboratories acquisition. Already 150 molecules are there, which are already developed, which form critical care ingestibles, which are the exact products which we are going to transfer to the existing site. So typically, what we are going to do is first, we will target Europe, then in Southeast Asia, Latin America and Middle East. These are the first that we have identified and what we have spoken in the IPO objective, we'll still stick to that. But going forward, now we have an option of going to The U. S. Markets, which we'll be reviewing at a later date.

40:54 Given a chance, we will still go to the U. FDA after this is completed. Understood, sir. Thank you. Thank you so much for answering my questions and all the best. Thank you very much, Sai. The next question comes from the line of Mohammed Namir with EcoQuantum Solutions. Over the past few years, we have observed downward trend in the license for Injectables segment. Management share insights with the primary drivers behind this pricing pressure such as increased market competition, shifting product mix or regulatory pricing of actions.

41:53 Can you just repeat the question because it's a little not audible? Sorry? Yes, yes. No worries. Over the past few years, we have observed a downward trend in realization for injectable segment. Could you please add the reason for that? Yes. So Yes. Now the important reason for our injectable growth, what we are anticipating is, if we see our past growth, our unit one and two is majorly we are doing a domestic market, and we are not we're not going anything out of the country for our European markets because they are not qualified under the existing facilities. That is one of the basic reasons why we went with an upgradation to eUGMP plant.

42:44 Currently, whatever the exports we are doing, the entire exports are only oral dosage formulations and cephalosporins. Till now, we did not cater any of our injectable space into exports. Given it, because we have done some marketing on, we have done a survey of the critical care injectables marketing in our world of the new markets in Europe. And we have seen a lot of space available there in those markets. That's the primary reason where we are going with the lyophilization and GLP, which is having a much more market in these areas. And we're just trying to establish that market position there in the ROW and Europe markets. Understood. Another question was regarding NOMET.

43:31 As in RSP, there is a revenue of around INR $3.16 crore for NOMET, whereas the other expense is INR 126 crores. So I just want to understand whether it is one off or will it continue with such higher expense going forward as well? One second, ma'am. My CFO will answer this question. Mahmud, what do you want is you are saying that NewMed Australia, we have one off expenses. That's what you want to clarify? Yes. Their expenses is higher at INR 126 crores versus INR 300 Yes. Odd Last quarter, as Mark had indicated that there were supply constraints.

44:17 So based on those supply constraints, we had to incur additional costs on freight and regulatory costs. So there has been delays and that's why revenue has dropped a bit in the last quarter for NewMed. So there was onetime hits in the last quarter because of constraints of supplies, which we had to incur additional costs. The The next question comes from the line of Arvind Arora with A Square Capital. Please go ahead. Hello. Hi. So congratulations, sir, on the good set of numbers. So sir, is there any upward revision in the guidance that you are planning? Since like there is sort like since we acquired Amlan as you were planning like eight months will take on the land development and other activity from compliance perspective.

45:21 So is there any thought process on the upward revision for the next year as well? Arun, I'm sticking my neck only to $7.50 crores with 17% EBITDA for this year. And if there is any anything to be reported in a division, I will look at it in the next quarter. But as of now, we were picking the number with INR $7.50 crores with 17 percent EBITDA. And we will be taking the call as and when we go into the next tender the last quarter. Sir, I'm asking for FY 'twenty, not for 'twenty. Yeah. Yeah. '28, I mean, we we just not thought more on that because still we are... We want to see how the three quarters goes in.

46:13 Then we want to be pretty sure that we give the number to the market. We want to be we want to see how the numbers plans to go in the next two quarters, then we'll get a better idea and then we'll put the number before the last quarter. Understood. Understood. And sir, can I see this quarter as in like what is overdone kind of things like the margins and everything will be improved from this quarter onwards? Yes. I want you to see when compared see, you have to you should not compare me to the last quarter because the reason because I told very clearly, fourth quarter is always a heavy quarter for us. Obviously, it's an outstanding performance last quarter.

46:59 This quarter, if you see whatever I put on my money on INR $7.54 crores, I said 44 crores, 55 crores will be the ratio. Even in the last earnings call, I was making it very, very point that first half will be at 44 and the second half will be at 55. So if you see that numbers, we have performed more than what we said. And the only thing what we have done is EBITDA of another 2%. That's only because of the disruptions in the supply chain, the age for tech new net. But that's once now I think next quarters, I don't think we'll have the challenges coming in. And you can clearly see a visibility of that 75017% crossing on very, very smoothly and comfortably.

47:47 Understood. Okay, sir. Thank you. Thank you and all the best. Thank you, again. The next question comes from the line of Devanshi Shah with HUF Capital. Please go ahead. Hi. Thank you for the opportunity. So I had a couple of questions from my end. So, sir, I wanted to understand, is Sai Preeti a related party in any form? No. It's not a related party. It was established by the promoters of SAIPARENT and their own. Now, since we did we did not get this approval from the shareholders, we did not we just announced to the board permission and post shareholders approval, then we will have an entry into that once the shareholders approve it.

48:39 We don't have any connection with SAIPARENT as of today. Got it, sir. Also, could you provide more clarity on the remaining 40% ownership in the new entity? And then who is the shareholder? What strategic value does it bring? And what is the eventual plan for acquiring the balance stake? Two things, sir. One is the financing of that is the who owns that, the 100% as of today. And they substitute Questus Pharma, which is which is going into the domestic marketing is is there in in their arm of Questus Pharma is of the strategic in pharma, they both are the shareholders in that company, number one. Number two, the 40% shareholding, whatever they are holding in, they will get the investment. I explained in the... My previous listing.

49:45 Now the project cost is costing us around 217 crores, out of which we will be investing 83 crores as a 60%. The balance 40% will be invested by them around roughly around 56 crores. They will get daily investment into the company. They've already started investment on the land, on everything they've already started, and it's still going good. And the balance whatever is required, we will go for a project debt. So this is how we were looking at the means of finance for this. Number two, also, there will be, as I explained to you last time in the just a few minutes before, their existing portfolio of the products, they have an existing portfolio of the products in domestic marketing, where they are doing around 52 to 53 crores of domestic sales year on year, which currently they are manufacturing from a CMO network across India.

50:41 Now going forward, how it looks is once the security comes in, Sai also will get the products manufactured in Sai Preeti for our injectable profile, whatever we are existing things. They will also use the facility and they will also get the products manufactured from this. These exports will happen from Sai Preeti directly. The same will happen directly from. So it's all about people coming together, and we... There is a lot of topics saver here when we're doing the first in the first three regions. Got it, sir. Got it, sir. Also, on the r and d acquisition, what are the key capabilities of the team, you know, major molecules under development and the commercial potential of the existing one fifty SKUs and 86 molecules?

51:36 So there are quite number of products. The more coming of life life and critical care injectable, liposomal injection, and oncology products. And they are also there some regular critical care cephalosporin products also get developed. It's a product of 150 with 86 molecules and 150 SKUs. So the team which is there, total 67 people are there, out of which 28 people are very, very senior level people. And they have been working in this for the last three years. And all five of them is having an experience of more than twenty five years in this r and d development earlier. So they have the team has a great capability of doing every molecule. In fact, they're now right now doing the complex molecules. So for them, going with the oral dosage facility, oral dosage molecule development is very easy for them, because they are already done the complex molecules. So it's going to be this from day one, once we acquire the r and d will start its activity for versus five in.

52:45 What are all the developments we have to do at the five level in development? We will be taking it up from the first day in. Got it, sir. That was helpful. Thank you. That's it from my end. The next question comes from the line of Mohit O'Brien with PJ Capital. Please go ahead. Hello, sir. Just wanted to confirm if I'm audible. Yes, Mohit. Please go ahead. Okay. Thank you. So I have a few questions. First one is that you have announced plans to establish a U. S. Subsidiary. What is the precise strategy? Will this initially be a sales or commercial platform or eventually involve local manufacturing?

53:32 And when do you expect the U. S. Business to start contributing meaningfully? Yeah. What? No. It's too premature to discuss this part because now the US subsidiary, whichever we are going to, which we took the permission on the board to start a US subsidiary. There are certain things which we are working on with the evaluation path, where we we can have an entry into The US market. Everything is is under consideration, not a decided everything, we will come to the shareholders and the market at the right appropriate time. When the opportunity is seized, and our evaluation gets completed, then obviously we come to the market and we will we will declare that.

54:21 So as of now, it's just a substitute formation to evaluate the opportunities going forward. Okay. So my second question is that, is the decision to establish the U. S. Subsidiary through the Singapore entity driven by any specific tax, regulatory or tariff considerations? Okay. When we established Singapore entity, we had in mind investment arm at Singapore because that is the arm which we have used for acquisition of NewMed Australia. There are tax benefits between Australia and and Singapore, and that's where it was established.

55:11 Right now, US is very, very preliminary. We have not yet evaluated tax benefits and going forward scenario for US entity. But as and when we progress with it, we will revert on this. We will evaluate and revert. Okay, sure. And my last question is about debt that this existing debt of around INR 300 crore and incremental debt of the new initiatives, what should we consider the peak debt level over the next two to three years? And what is the intended deleveraging part thereafter? Okay. Yes. Mohammed, the current debt as of June 2027 is about 310 crores.

56:01 As against last quarter of March twenty six, we had about 320 crores. So the debt has gone up by about sorry, the debt has come down by about INR 10 crores. If you remember the IPO proceeds, we had envisaged that we will repay two of the loans, one from Tata Capital of about 14 crores and one of the acquisition of 36 crores. So we repaid a loan of 50 crores. So there has been the overall reduction is about 10 crores as we had taken certain loans for new med acquisition for the CapEx plan. So the debt has come down by about INR 10 crores as against last quarter.

56:48 So the debt is probably at a group level without taking into new projects is fairly well placed, and it will only keep going down as we repay our debts. However, for the Sai Pit acquisition, there will be an additional debt based on 60%, 40% ratio of equity and balance will be funded through a debt. But I would see that debt equity ratio should be in the range of point 6%, which should be fairly well fixed for us. Okay, sir. Thank you so much. That was very Thank you. That was straightforward, sir. Thank you. Ladies and gentlemen, that was the last question for today. For any further queries, you can contact the SGA investor relations team.

57:38 On behalf of Sai Parenterals Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.