Amanta Healthcare Limited (AMANTA) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the AMANTA Healthcare Limited Q1 FY27 Earnings Conference Call. 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. Should you need assistance, during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note this conference is being recorded. I now have the conference over to Ms. Soumya Chajet from GoIndiaAdvisors. Thank you and OTV.

Good morning, everyone, and welcome to Q1FI27 Earnings Conference Call of Amanta Healthcare Limited. We have on call with us Mr. Bhavesh Patel, Chairman and Managing Director, Mr. Paris Netta, Chief Financial Officer. We must remind you that discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risk per dating to the business. I now request the management to take this to the same and provide more insight on the quarter gone by. Post that, we'll open the floor for Q&A. Thank you and over to you, sir.

Namaste and good morning, everyone, and thank you for joining us for Amanta Healthcare Q1 FY27 earnings call. On behalf of the management, I would like to sincerely thank our shareholders, customers, healthcare partners, lenders, and employees for their continued trust and support. The cooperative reflects our continued focus on disciplined execution while laying the foundation for the company's next phase of growth. Despite a challenging operating environment marked by inflationary pressure and higher operating costs, We delivered a resilient financial performance and remained focused on executing our long-term strategic priorities. During the quarter, we reported revenue of Rs.69 crore up by roughly 5% year-on-year while maintaining a healthy beta margin of approximately 22%. While the quarter witnessed cost pressures, our focus on operational efficiency enabled us to sustain healthy profitability. Our confidence in the business is driven, not just by quarterly performance, but by the strategic investment we are making to strengthen our manufacturing, capabilities, and product portfolio. Our Steriport platform, which now contributes around 44% of our revenue, continues to witness strong customer acceptance. Built on advanced ISBM technology, Steriport offers superiority in terms of sterility, enhanced safety, and lower patient risk compared to conventional packaging solutions. While the existing facility operating at healthy utilization level, they are expanding capacity from 6.6 crore bottles per year to roughly trial crore bottles per year to cater to increasing demand across high value therapies such as oncology, critical care, anesthesia, and pediatric. While the stereoport expansion was originally targeted for commissioning during Q1, The operational delays, mainly due to the delay in the civil construction activity, have shifted the commencement to Q2 FY27. We remain confident that this expansion will significantly enhance our manufacturing scale and operating leverage over the coming years. Alongside this, we continue to strengthen our small volume panel SVP portfolio. This is primarily export-centric business, addressing attractive segments such as inhalation solutions, ophthalmics, and preservative-free unit doses. The SVP business contributed around 20% of FY26 revenue, and we expect the new facility to commence operations during Q4-FY27, further expanding our presence in high-margin export market. On the cost optimization front, our 10.8 MW captive solar power project has already been commissioned since June 26. It is expected to meaningfully reduce power cost, improve operating margins, and further strengthen our ESG initiatives. With differentiated trial manufacturing technologies, a growing portfolio of complex products, expanding capacities, and continue to focus on operational excellence, We believe Amalta Healthcare is well positioned to create sustainable long-term value for all stakeholders. Before I conclude, I would once again like to thank all our stakeholders for their continued confidence in Amalta Healthcare. And before I hand over this call to our CFO, Mr. Paras Mehta, I just want to share that Steriport Line 3, which was being commissioned. We have got the plans approved by the FDA on Tuesday, and The validation and qualification activities are going on, which are likely to get over by 18th of August, and we intend to take the commercial production in the last week of August. Whenever we reach that stage, we will keep you posted. Thank you once again, and now over to our CFO, Sri Paraswai Mehta.

Thank you, sir. Good morning, and welcome to all and one to this Q1 result call for the Amenta Healthcare. During the quarter, the performance has remained stable. Company has delivered a stable financial performance despite Operating in an environment which is characterized by inflationary cost pressures as well as business lowdown due to Iran war situation across all segments. Q1 27 revenue as our MD rightly pointed out, despite all this, we could register 5% year-on-year growth supported by improved product mix as well as the better price realizations during the quarter. Operational discipline continued to support our profitability. We reported EBITDA of about 15 crore, with EBITDA margin remaining at about 22 percent. And despite higher raw material price pressure, employee cost, and other operating costs, which already started during the quarter for the new facilities, we could get this result. Looking ahead, we expect the commissioning of our stiport expansion. By end of current month, followed by SVP facility by end of Q427, both this is supposed to strengthen our revenue mix towards higher margin products, and operating leverage will also expected to help us for the maintaining our current profitability. Combined with benefit from captive solar plant and continued cost optimization initiatives, we believe that operating leverage will improve. Meaningfully, over the coming quarters as we move forward. With that, we conclude our opening remarks and would now be happy to take the questions from shareholders and investors. Thank you once again.

Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-down telephone. If you wish to remove yourself from the question queue, you may press star and do. Participants are requested to use handset 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 Agnish Varman with Vicaria. Please go ahead.

Hi, good morning. Thanks for taking my question. So, just a couple of questions on the Stereo 4 line 3. I think in one of the earlier calls you had mentioned that the peak revenue from this line would be about 110 to 120 crores. I just wanted to know because you had also mentioned that there is a supply-demand mismatch here. Will this peak revenue of 110-120 crore be realized within the 12 months of commissioning, or what would be the timeline for that?

So, that is an annualized number. So, the production capacity and the net realization that we envisage are not changing. So, on annualized basis, we should be getting 120 crore top line.

Okay, and this 120 will be realized within the 12 months from the commissioning of the line, which will be Augustine, right? Yes, yes, yes. Okay, understood. And, sir, how much should we estimate the depreciation to increase because of this new line on a quarterly run rate? Can I ask Paras where to take this question?

So estimated depreciation will be about 4.5 crore from the EU line.

This is annual, I'm guessing. Annual, annual. Okay, 4.5 crores of incremental depreciation on an annual basis. Okay.

Yeah, from this line, from this line, the new line, as you specifically asked for it, on full year basis, annualized basis, compared to FY26, our total depreciation will increase by about 6 crores annually, because this new line, Along with SVP and the solar plant, all the three will have additional depreciation. So total depreciation for the company will be 6 crore additional compared to F526.

Yeah, understood. Very clear. One more thing, sir. Again, in one of the earlier calls you had for after the after the teleport line, you had mentioned that the margins will expand by three to four percent. I just wanted to clarify this margin expansion is only because of the product exchange or it also includes the I think nine CR cost savings because of the power project.

So, I think the 9CR saving due to power, captive power is a separate contributor, but Steripop 9-3 commissioning is going to substantially contribute to absorbing overheads. So, the incremental overheads envisaged post-commissioning are far, far insignificant as compared to what we have right now. So, that was one of the main driver. Other thing is, when we commission stereo port line 3, it will be dedicated 500 ml platform. So, on the existing line, we will be making only one SKU. So, that also helps in increasing the output to some extent. Although, it is difficult to quantify the impact of that, but it will be definitely favorable. So, these two things put together will be contributing to ebit expansion, plus solar captive would be an additional contributor.

And this 3-4% because of off-layer, this is on the console margin, right? So, for example, if FY26 was 21%, this 3-4% expansion is on the console number plus the 9 crore cost level. Is that the right way to understand?

9 crore could be, so we were targeting 5% expansion with 9 crore saving. So, 4 to 5% with 9 crore.

So, it could be fairly accurate. Okay, so 4% to 5% consult EBITDA margin expansion, including the 9%. Including solar benefit, yes. Last question, this is for my understanding. Generally, the seri port realization is, in my understanding, lower than the single port LVP realization. Other way round. Okay. So, okay, maybe I've got the data wrong, but from the DRHP, I was estimating maybe that the steady-pore realization is 20 rupees a unit on an average, and the single-pore LVP realization is 40 rupees per unit. You're saying it's the other way around?

So, LVP, conventional pack, 40 rupees was never the case, but LVP, BFS, in our case, it is having more of formulation. So, formulations generally, they have higher NRV for the comparable pack size. So, that could be the reason probably why you could have captured those numbers, but it could never be 40 rupees.

Okay, okay. So, because of the formulation, I understand. Formulation. I get it.

So, conventional pack has both formulation as well as classic IV fluid. So, formulation is typically, again, it has a wide spectrum. It has low yielding product and high volume product. And the other ADO spectrum, it has a high value product with a low volume kind of thing.

I'll get back in a bit. Thank you.

The next question comes from the line of Nikhil Agarwal with Alpha EIF. Please go ahead.

Oh, hello sir. Very good morning and congratulations on the great set of numbers.

Thank you Nikhil ji.

Sir, in the presentation you said there was some cost pressures. I wanted to understand what were those.

Okay, so one is it was difficult for us to comprehend how the Middle Eastern crisis would lead in terms of polymer pricing. Although the effect of that is not much in this quarter. Secondly, sizable part of that has been absorbed in the price correction. But the main cost pressure was on account of the overheads which we have absorbed. On account of expansion, because generally you have to have manpower ahead of the, you know, before you get commercial. And the commercial process has got delayed by one quarter. So in this quarter, we are absorbing the overheads without any contribution from Stericode 93 due to delay. So that's what we meant.

And sir, do we expect to see more pricing fees in the polymer pricing in the raw materials market?

So, polymer price is by and large a function of the barrel oil price. So, now that the oil prices are softening, the polymer prices have already started softening. In fact, they started softening ahead of oil in anticipation. So, this pipe was very short-lived. It was, I think, for two to two and a half months only.

Okay, I mean, please, the price is about two rupees for the counter's expect, right?

I think they have come to very close to what they used to be earlier, and I think within 2-3 months, it will come to normal pricing.

Got it, sir. And, sir, when are we expecting to commercialize the SVP facility, and how far are we on the requirements of overheads, like employees and everything?

The first question I understood, when we are likely to commercialize SVP, to answer that, it would be somewhere in March, February to March 27th, because our FAQ is scheduled in USA in the second week of November.

Got it.

So, it will be at our site by December and then two months from there onwards. The good part is that there is not much of civil work required for this, so it is less speculative in terms of timeline. But second question I did not get.

I was asking how far we are on the overhead expenses of SCV facilities, like hiring of separate work persons and dingles.

So SVP, there was no need to hire significant workforce because we already have manpower for that. But for our focus, as far as SVP is concerned, our focus is on product pipeline development. So there are 20 products in pipeline which are being developed. Two products have been developed already. We have taken exhibit batches and I think one would be commercialized very soon, in mid-September. So, that is an inhalation product. And so, as far as SVP is concerned, for that initiative, our overhead would be mainly in F&D only. And that we already have onboarded people for that. So, there wouldn't be any increase on that account.

Got it, sir. Thank you. And that's just one message.

Yeah, thank you.

The next question comes from the line of P.C.R. with Blue Star Capital. Please go ahead.

Am I audible, sir?

Yes.

First of all, congratulations. Good set of members. Sir, my question is with the full capacity of the line of Stericode and the line which will come in Q4, so what could be the total revenue we can achieve at peak utilization?

I had annualized number, but so we are in August already. So for the, so we have seven months with us. So in those seven months, teleports should contribute roughly 70 crore in top line. And the baseline number right now, so roughly we can, in spite of five months delay on teleport line three, we can still close at roughly 370 or so.

370.

This is without SVP, huh? This is without SVP.

And sir, for FY20A, what could be the peak utilization? What could be the revenue at all? Like, Steriport plus SEP and the current capacity.

So, you are referring to year 2728?

Next year, next year, sir. For next year, as all the capacities will be live, what could be the peak revenue we can achieve?

Roughly 425 crore.

425 crore. Okay. And sir, what could be the EBITDA margins?

So EBITDA margin would be roughly 116.

Sorry? 116. Margin, sir.

About 25, 26%.

25 to 26%. And same for FY27 and FY28.

Correct. Almost. 1% plus minus.

Got it. All the best, sir. And thank you. Yeah, thank you very much.

Thank you. The next question comes from the line of Divya Dugga with VGSPL. Please go ahead. Thank you.

Hello, sir. I have two questions. First, I want to know who are the competitors in India. And my second question is, when are we operationalizing the SVP part and the teleports? In which month are we expecting it?

Okay, so SteriPort, as I said earlier, we have got the plans approved by FDA, which is the first step. The validation and qualification of line is going, while we are talking at this moment, it's going on. All the trial runs, etc., section-wise, have been taken last month. And validation qualification will get over by 18th, and we are likely to get operational by 24th or 25th of August. So, this also depends upon when the FBA comes and finally inspects. So, inspection is scheduled on 21st. If they come on 21st, by 24th or 25th, they will become operational for Seripode 9-3. SVP will get operational in March 27. So, that is on schedule. Seripode 9-3 got delayed by 4-5 months due to civil construction delay. But SVP would be on track as projected in our IPO briefing. Thank you. So, Steriport as a product is classified as, not Steriport particularly, but government has classified product in a manner where you have glass bottle, simple plastic bottles, and plastic bottles with special features. So, Steriport happens to be a plastic container with special features as per the classification. In this category, nationwide, you have... There are quite a few companies, but main companies who are active in this space, who are promoting and who get very good traction in hospitals are, apart from Amanta, we have Otsuka, it's a Japanese MNC, Frizeneskabi, it's a German MNC, B. Brown, but confined only to major cities, and then you have AccuLife. Again, not very, I mean, nation right, they don't have presence nation right, but they are somewhat active. So, this is a competition profile in a special category.

Okay, as we are expecting the seriport capacity from August, will it impact our Q2 numbers as we are already utilizing 90-95% of our capacity?

So, Q2 numbers, the middle may not move much. Except that we will have one September month contributing towards it. So that little may move only to that extent. The solar power, the capital solar power plant probably would contribute more than the steriport. But from Q3 onwards, we will see proper impact of steriport line 3.

Okay, and one last question. Are we expecting stress in our gross profit margin in this quarter?

This quarter, there would be a little bit stress on account of polymer price volatility. The polymer price is rent up by roughly 70 to 80 percent, but this pipe was only for two months. And now they have come to normal level almost, 80% they have come down. So, but we are absorbing that in our price correction. So, we are hopeful that during the quarter, we should be able to absorb this spike by at least 70% or so, and remaining can be absorbed in the following quarter. But on a yearly basis, we should be able to absorb it.

Okay. Okay. Thank you.

Thank you. The next question comes from the line of Shivam Shah with Jai Nivesh. Please go ahead.

Good morning, sir. Thank you for the opportunity. So, my question is, with the ferry port and SVP expansion expected to conclude by the end of PASI 27, what are your next major growth drivers expected to be? Like, is the management plan for any next phase beyond this? So that's what I was referring to, that Steripod and Solar would contribute in terms of quantum and would scale up our overall operation size. And SVP line that we are commissioning is going to be very versatile. So that platform will be making inhalation products, preservative-free single-dose ophthalmic products, and nasal drops mainly for European market. Now, to support these activities, we need to have a solid backup of formulation development activity. So, we developed a team of FND. We have five scientists now working on 20 products, and they have been working for last one year. So, one inhalation product is likely to get commercialized by 15th September. We have taken the exhibit batches. Stability is clear. And we'll take the first exhibit and commercial by 15th September. And likewise, we will have around 20 products in the pipeline. And we are likely to complete this project within 18 months. So that would be a main growth driver. So SPP line, when it gets commissioned, it can give, it can produce plain vanilla products. For average EBITDA margin. But inhalation portfolio, if we standard that, then that will give us additional EBITDA. So that's what the future growth driver would be. So to summarize what I said, inhalation products, ophthalmics, And diluents in advanced market. These are going to be our key growth drivers for 27, 28, 29.

Got it, sir. Thank you.

But we are not exploring any adjacent products in terms of healthcare equipment. No, not at this stage, but because right now the focus would be to, see, Terryport is not bothering us because that capacity built up and getting, I mean, it's an India-centric initiative. So, there are no regulatory hurdles or speculations regarding product approval. But SVP is a slow process in terms of product approval, market penetration. So, that will be an ongoing program for at least two years. So, once SVP line is commissioned, then it will not be, we won't need extra capex. We would need activities to support and to gear up our operation. So it would be all activity-centric and in SVP particularly. But 27 onwards, we are exploring other dosage forms. For instance, right now, we are doing only plastic as a primary packaging material. The moment we say plastic, our product universe shrinks to maybe very, very small part of the overall universe. But going forward, we cannot grow only by way of sticking to plastic as a primary packaging material. So we will have to explore other drug delivery mechanisms, other packaging materials like glass and so on and so forth. But that is still slightly premature. But it's there, we are working on it, and we will have clarity in six months' time or so. So maybe in subsequent earning calls or whenever we have an interaction, we would have more clarity by December or January.

Okay, sir. Thank you. Thank you so much.

Yeah, thanks.

The next question comes from the line of Nikhil Gupta with Vayu Capital. Please go ahead.

Thank you for the opportunity. My question is almost similar to the previous participant's question. So, what is the long-term vision of the company in terms of growing top line? Is there a vision to cross a thousand crore mark over the next 4-5 years? And once this teripode and SDB expansion is done, and all the other projects you mentioned we are working on, what should more we do in terms of getting that particular target over the next four-five years?

So, we have never attempted to translate our vision into rupees, but... We see it this way, that we have very good traction in India's hospital space. Steriport is patronized by intensivist, pediatrician, oncologist, cardiologist. So, we would like to leverage our presence in hospital market. The long-term vision of the company is to stay focused on sterile dosage form. Anything that is sterile in nature would be of our interest, and that is such a huge space. It's a very specialized space. It's capex intensive and activity intensive. So, to summarize, we will stay wedded to sterile dosage comb. But there will be departure. We will not remain inward looking to an extent that whatever is possible to do in plastic only we have been doing so far. But going forward, we would have other packaging solutions, process solutions, etc. And there are quite a few innovations that are happening in the industry, and we are capturing those things. We are alive about it, and the long-term vision to rephrase it is to stay focused on sterile dosage form. Anything which is sterile would be of our interest.

Thank you.

Best of luck.

Yeah, thanks.

Thank you. The next question comes from the line of Ulmer Shah with Money Visers. Please go ahead.

Yeah, hi. Thank you for the opportunity. So, my first question is, you just spoke about price fluctuations in polymer, and you also said that you have absorbed most of it. So, I want to know, how have you done it? Is there a pass-through mechanism for us, or, you know, how do we mitigate those?

So, usually, whenever there is a bullet of this kind, we take corresponding price correction.

Okay. Okay. So, if you could quantify the number on a ballpark basis, because when you said that the prices were risen by 70-80%, and of course, now they have come back. So, what was the price correction that you took?

So, polymer in Steriford particularly is a smaller part of our overall call structure. So, I think we increased the price by one rupee fifty paisa or so. Yeah. So, the selling price was increased by one rupee fifty paisa. And the impact of the polymer increase was roughly two rupees twenty-five paisa.

Okay, sir. So when you say that, you know, we will be seeing a margin expansion, do you take into account these price fluctuations? Is that the right way to go about it?

No. When we projected the Ebitda, I mean, teleport commissioning and projections post-commissioning, we really don't know about this crisis, and this crisis can lead to such huge volatility. This is unprecedented. We have seen volatility, but not to this extent. But the mitigation will happen differently. For instance, the input price went up and came down, and it remained there for two months. But the price correction would have longevity. It will be there for, you know, a longer time. So if you increase price by 1 rupees 50 paisa, even if it has to come down, it may come down by 25 paisa or 30 paisa, but it will remain 1 rupee plus for longer time. So you may have to absorb the polymer price spike in a quarter, but your recovery may spill over two quarters, something like that.

Okay. Okay, sir. So, my next question is, why are we, you know, looking to enter a regulated market like UK, which requires a longer approval and timeline, rather than going further deep into our already existing markets? So, we do both.

If you break up our revenue, and if you go by the therapeutic segment, 90% of the revenue in SVP comes from export. And this 90% revenue, out of 90%, more than 60% comes from advanced or semi-advanced markets. Now, we have very decent experience and appreciation about the advanced markets for very niche products. For example, diluvents and two diluvents presentations. Amanta has been the only company which has exported this product to Australia and Canada for three years.

Right.

No other company has ever exported BFS container from India to these two markets in injectable form. So we understand, but we did not continue because we didn't add capacity. Now that capacity is being added, so the first logical step with SVP expansion would be to address peak market. So going forward, we would have Maybe 60-70% of revenue of S&P coming from advanced markets only. Okay. So, my final question. Yes, sir. So, we have initiated the compliance because the PIC guideline has undergone a sea change in last six months to one year. The EU annexure one has also changed. And particularly for blow-fill seal operation, there are a couple of hardware corrections which we have to do. So, they are being done. And once that is done, then we will get PIC approval. Right. Okay, sir.

Sir, my final question before I join back is, our networking capital based for FY26 stands at 141, and our debt to equity, obviously, it has been on a decreasing trend, but still stands at 1.06. So, you know, can we see further improvement in that?

Actually, there was a significant improvement, but we took additional debt for solar captive. So, this solar captive was a no-brainer, because it is saving roughly 75 lakh rupees a month. So, if you take out that debt, then you will see that downward trajectory moving even faster.

Okay.

But I think the debt overall annually will keep reducing by 30-35 crore.

Okay. And the networking capital days, can it go from 140 to around 120?

So, working capital cycle generally is longish in our case because we have quarantine of 15 days at least.

Okay.

And when it comes to export, that quarantine duration can reach up to 25 to 1 month. Because of shipping lineups, sometimes customers, they want to have pre-shipment inspection and things like that. So, out of this, at least 20 to 25 days have to be reduced for quarantine purpose. So, that's why it remains a little longish. And this is very typical about all the hybrid food manufacturers and injectable manufacturers for advanced markets.

Okay, sir. Got it. I will join by the king for further question. Thank you. All right. Thank you.

Thank you. The next question comes from the line of Mukesh Pajwani with WC Securities. Please go ahead.

Yeah. Hi, sir. Good morning.

Sir, in this financial year, like there has been margin pressure for, we can say, like for five months, and next seven months would be like better. So what kind of annualized EBITDA margin we can expect this year?

So, the margin pressure was not for five months. In these five months, the polymer spike was there for maybe 45 days or two months, nearly. And the other additional cost that we are incurring is on account of overheads, where we have taken the team. In anticipation, Stericode line commissioning. So, that is already absorbed now. And as we said, we have seven months of operational time available for this year from September 1st onwards. So, that should give us roughly 70 crore of top line. How much? 70 crore. Okay, okay, okay. Okay, and sir, how should we see our interest expense this year? So, interest cost has been reducing, because the debt has been reducing, the interest cost was also reducing, but if you see this quarter, there is marginal increase in the interest cost, that's because of solar power, solar capex. Okay, okay, yeah. Okay, thank you.

But again, in the following quarters, you will see the interest was reducing further. Oh, okay. Thank you. Thank you.

Thank you. A follow-up question? Okay. The next question comes from the line of Saket Saurabh with Sagari Capital. Please go ahead. Am I audible? Yes, sir.

Yeah. So, sir, you mentioned that, you know, especially for near to medium term, I think the three axis of growth that we see, especially via SVP, one is geography, the advanced or regulated market. Second was getting into newer packaging forms beyond polymer. And third, of course, you are getting into new therapy areas or formulations. So if I'm just going one by one, so within a regulated market, which would be, say, top two to three markets where we are focusing most of our efforts, like UK, EU, Canada, US, just can you specify some of those top regulated countries?

So, at the moment, if you say advanced market, then it is mainly coming from UK and Ireland only. But in the past, we have sold diluents and some OTCs in Australia and Canada. So, we are familiar with these markets. We understand the regulatory expectations. We know the hospitals' preferences, what they like, what they don't like. And there we were competing with the likes of AstraZeneca and Pfizer and D. Brown, and they're doing fairly well. But because we did not have additional capacity and that would have victimized our UK business, so we had to choose between the two. Now that capacity is being expanded, our focus now would be on ophthalmics for EU, Australia and Canada.

Okay, sir. So what would be our, say, current R&D spend and what percentage would be, say, dedicated towards regulated markets? And what is the likely trajectory of, say, R&D spend for the coming years? Is it likely to go higher? I'm talking in more percentage of revenue terms.

So, honestly, I have not quantified. I don't have the numbers with me at this moment. But earlier, we did not have dedicated F&D department. Our QA and QC infrastructure was used by the same team to develop the product. Because there are very few products which we can do in plastic in BFS particularly. But now that we are going to have inhalation portfolio, We have dedicated team of five scientists, and while we are talking, we are constructing a separate center for formation development. I believe that we would have around 8 to 10 people only in F&D, and around 3 to 4 people in regulatory affairs for advanced, semi-advanced market. This is the kind of team I am envisaging. But to answer question, I don't have the numbers, how much we spend in R&D. We can, I think, quantify the numbers, both the overhead and the spending, and then we can circulate it.

Sure, that would be great. Now, my next question would be that, you know, many of these companies like Vibron's and the Sukas of the World, they focus a lot on, you know, say, not just the packaging as well as formulation part. So, when it comes to at your end, we're only focusing on, say, formulations going forward or say we could also come up with, say, newer drug device combinations like we also do fill finish, like you talked about in relation portfolio. So, then there are different kind of dispensers nowadays to dispense these medicines. So, are you working aggressively on your dispenser mechanism as well, like inhalers or, say, how you can better administer those drugs? So, that requires a very different kind of capability, right? So, is there a focus on integrating those capabilities also within the fold?

No. So, at the moment, we are going to restrict our efforts in BFS portfolio, which can be used with nebulizer. So, that would be the area of interest, because right now our manufacturing capability is only to offer BFS products, and that market itself is huge, both in India and outside. I think that's one of the fastest growing subcategory in India. So, we will stay focused on that. Once we strengthen that, then we have customer facing operations in hospitals by virtue of IV feed portfolio. So, we would leverage that infrastructure and do front ending for inhalation products also in hospitals. And that would be a great departure for us because the way we have developed a terry port brand, likewise we intend to develop this inhalation portfolio also. So that would be done in a staged manner. So that would be one. As far as ophthalmic is concerned, we want to develop out of 20 products in pipeline, probably 7 to 8 are in ophthalmics. But we don't intend to do front ending there in India at least. Because that requires different kind of setup and different team. So we don't want to get distracted in that space. We would stay focused only on hospital offering. And because the inhalation portfolio finds its way to hospitals, so there is a synergy with what we are doing.

Got it, sir. So, if I look at, say, the current outline strategy, it seems, you know, SVP is more near to medium term because, again, given the dependence for different kind of approvals as well as product development that you are focusing on. So, it will keep us, say, engaged for, say, next two to three years at least. Now, as far as share report is concerned, it seems within a year itself, you would be able to, say, utilize the entire capacity. So, how do we look at, say, growth drive, and FVPs largely exports being one of the major drivers. So, for domestic, is there any further capex in besides within the SteriPort itself because it seems there is demand supply mismatch. So, are you likely to go for another round of capex for SteriPort?

No. So, let me clarify the driver part first, and then I will come to this. So, in this year, the main growth driver would be sterile port capacity built-up, which is India-centric, non-fragmented market. So, there are no regulatory hurdles, no speculation about the timeline, and that would be the main contributor towards growth in this year. Next year onwards, it would be SVP, inhalation. Plus, diluents in advanced markets, which we have done in the past. And then going forward, there are many other innovations, like you have IV bag line, then you have injectable, lyophilized, you have cartridges, but that's all in glass. So, the follow-through CAPEX for Indian market and for advanced market would be that. So, Gradually, a part of SVP will take a color of CDMO, for finished dosage injectables, going forward.

Got it, sir. No, thanks, sir. A real best wishes, and thanks for answering my questions. Thank you.

Thank you. The next question comes from the line of DHS with FHIR Capital. Please go ahead.

Hi, sir. Thank you for taking my question. So, can you please provide the amount we have invested in static port line 3 and SVP, and how much we are going to spend in FY28?

I didn't get your question.

How much CAPEX we have done in line 3 and SVP expansion?

Okay. Paras, can you take this question?

Terriport Line 3 is expected to have 90 crore of total capex, out of which almost 80 crore has been spent so far. SVT is expected to have about 30 crore of capex, out of which about 7 crore has been spent so far, and remaining will be spent in coming quarters.

Okay, sir. Thank you.

Thank you.

Ladies and gentlemen, this will be our last question. It's from the line of Agnish Verma with Vicaria.

Please go ahead.

Mr. Amnish, your line has been unmuted. Please go ahead with your question.

Can you hear me now? Hello, can you hear me? Yeah, sorry. So my question was on the incremental KPEX on the new line 3 for Stericode. I'm working on basic assumptions like 90 crore KPEX and about 110 networking days of capital. Please correct me if I am wrong, but I am getting an incremental ROC of about 16-70% on the new line. Can you clarify, is this broadly the right number? Incremental ROC, ROI.

Yes, yes. Yeah, broadly this is correct.

Okay. And a similar calculation on the SVP was giving me a number of about 13-14% because I guess the asset turns is a little less than the steady quote line. Is that also a right number for the SVP?

Yeah, almost right. Couple of percentage here and there. So, it should be around 14-15%.

14-15%. Understood. And what should we assume as a tax rate for FY27 and FY28? Is that going to be the same as 30% as we've shown previously?

26% effective tax rate in books.

26.

Okay.

And just coming back on the ROIC, any reason why the ROIC for Sherry Portline is 15% to 17%? I mean, this number seems to be a little low. So is there any reason for that?

No, it's a traditional business, I mean, existing business what we are doing currently. So, immediately it may not jump on because our capital base is already higher now with the new capital from IPO and the including the share premium. And internal accrual may be used in form of cash for the expansion, but on books you will always see the profit accumulated to going to reserves. Capital employed will keep on increasing year on year. So, to match that number, you need to have a speed of profit higher than the rate of capital employed increment, which is not possible in the short term, but over a longer period, it will happen.

Okay, and in the industry, typically, this is what the incremental ROIC is in any incremental steroid line?

We are little better than industry. If you study the other companies which Biosur has already named, their numbers will be almost same or little lower. So we are little better than the industry.

See, the only problem is that amongst the listed other companies, they may not have exact scale or exact product basket that we have. So some diversions could be because of that.

Okay. Last question from my side. On the interest, you said that in the coming quarters, it will reduce. Right now, it's at a run rate of about 60 hours per quarter. What would be, like, what's the interest number for FI 27-28, given, I mean, that you're probably beyond a peak traffic cycle?

It should be on annualized basis. It should be about 18-19 crore.

This is for FI 27?

28.

And twenty-seven?

Twenty-seven should be about twenty-one crore.

Twenty-seven.

Thank you so much.

Thank you, sir. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for closing comments.

Thank you, Go India team, and thank you all the investors and analysts. When we meet next time, probably I would be able to share more news about Steripod Commissioning and our product development activities that we are doing right now. Thank you once again.

Thank you, sir. On behalf of Go India Advisors that can do this conference, thank you for joining us and you may now disconnect your lines. Thank you.