Orchid Pharma Limited (ORCHPHARMA) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to Orkid Pharma Limited Q1 and F527 owning conference call, hosted by Systematics Sharesense Talks. 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. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinion, and expectation of the company as on date of this call. These statements are not guaranteed of future performance and involve risk and uncertainties that are difficult to predict. I now hand the conference over to Ms. Lavleen Bagga from Systematics Shares and Stock. Thank you, and over to you, Ms. Lavleen.

Thank you, Dhanesh. Good evening, everyone. On behalf of Systematics Institutional Equities, I welcome you all to the Q1 FY27 earnings call of Orchid Pharma. We thank the Orchid Pharma management for giving us an opportunity to host the call. Today, we have with us the senior management of the company, represented by Mr. Manish Dhanuka, Managing Director, Mr. Vridul Dhanuka, Whole-Time Director, Mr. Nishan Talal, VP Finance, and Mr. Kapil Zahia, Company Secretary. I will now hand over the call to the company management. Thank you.

Good evening, ladies and gentlemen. I am Manish Dhanuka, Managing Director of Corporate Pharma, and I welcome you to our discussion on the results for the first quarter of financial year 27. As you may be aware, on 10th of July, the merger with Dhanuka Laboratories became effective with an appointed date of post-April 2024. Accordingly, the FY25 comparative and FY26 results have been restated to reflect the combined operations of Orchid Pharma and Dhanuka Laboratories. The financial numbers that we will discuss today are therefore on a combined and comparable basis. They will differ from the ORCID-only numbers discussed in earlier calls. As we had indicated in our last call, financial year 26 was a difficult year for cephalosporin business. It was among the most challenging environments our cephalosporin franchise has faced in the last 15 to 20 years. In a number of important products and markets, both volumes and pricing were affected, with declines of 15 to 20 percent depending on the product. On a restated combined basis, revenue from operations was 1,233 crores for financial year 26, compared with 1,398 crores for the financial year 25. After the first quarter, our focus was on protecting volumes and customer relationships in the challenging market. This involved accepting some pressure on margins, particularly because of product mix and pricing conditions. Consequently, combined gross margin moderated by approximately 4% to 32% in financial year 26 compared to approximately 36% in financial year 25. We remain disciplined on controllable costs. Combined employee and other operating expenses were broadly flat at 353 crores in FY26 compared with approximately 353 crores in FY25. However, this cost discipline could only partially offset the effect of lower revenue and gross margin compression. Turning to the current quarter, we have begun financial year 27. On a better footing, revenue from operations increased to 304 crore in Q1 27 from 263 crore in corresponding quarter last year representing growth of approximately 15%. Combined gross margin improved by approximately 3% points to 33% in Q1-27 compared with approximately 30% in Q1-26. EBITDA improved to 25 crore in Q1-27 compared with EBITDA of 10 crore in Q1-26. Though we can see some improvement in sales over last year, we feel the industry is still facing overcapacities leading to cutthroat competition. Our focus remains on growing volumes with discipline, improving product mix, maintaining site control over operating costs, and progressively strengthening the underlying profitability of the combined platform. We have also started a number of focused integration projects to crystallize savings from this merger. We expect initial benefits of these initiatives to begin becoming visible in the next financial year. The AMS business continues to be managed with financial discipline. Its quarterly EBITDA drag has reduced significantly while we continue to build the platform and its long-term strategic relevance in antimicrobial stewardship. I will now move to the operational and strategic updates on other businesses and projects. Let me begin with XpliFeb. We continue to make measured progress in building XpliFeb as a global commercial platform. In Russia, the estimated 10-year value of our licensing arrangement is approximately USD 178 million. This is an estimated long-term value and not current period revenue. Execution will depend on registration, launch, and market development over time. In Europe, the business is growing at a steady manner, while volumes grew by approximately 300% in Q3 of 26, 170% in Q4 of 26, and about 50% in Q1 of 27. So, there is a significant Q-by-Q growth in the volumes. We remain focused on building the business country-by-country rather than extrapolating early growth rate. In the Middle East and Africa, registration in South Africa has been completed. We now have coverage across the GCC markets. Planned launch activity in the region has been affected by the recent regional conflict, And timing of commercial rollout will depend on normalization of conditions in the Middle East. We continue to engage with potential partners in other markets and are at an advanced stage of discussion for South America, Mexico, Philippines, Thailand, Morocco, and Australia. These agreements will lead to large-scale availability of XBLIFAP across the globe. We are also in discussion with prospective candidates in US and China. Coming to Sephedropole, the project remains on schedule. Some equipment originally sourced from China had to be rerouted through Italy. While this created execution complexity, it has not changed the overall project timelines. We target commissioning by December of 26, followed by validation and initial batches during January to March 27 period. Commercial launch will be subject to the approval process from DCGI. Separately, GuardPree has floated a global RFP process for broader market access, and once they finalize the distributors in different countries, as you know, 135 countries are entitled to get the product from GuardPree. We hope to start the supplies as per their progress in the agreements. Finally, on the 7ACA project, our objective remains unchanged, commissioning and the first commercial batch by March of 27. This is among the largest and most complex fermentation project being executed in the country. It's a critical backward integration project, which can provide the advantage of scale to ORCID, and we are putting our best efforts to execute the project successfully. More broadly, while the first quarter has shown improvement, it would be premature to assume the straight-line recovery. Pricing and demand conditions in our core markets remain competitive, and the benefits of mergers synergies, product mix improvement, and new projects will emerge progressively rather than all at once. Our near-term priority is clear, protect and grow the core business with cost discipline, improve margins through volumes and product mix, and execute our capital projects safely and on time. Over the longer term, we remain constructive about the opportunities before us. The combined Orchid-Ghanuka platform, backward integration into 7ACA, the Sephedra-Cole-Express project, ex-Blicef commercialization, and selective expansion into regulated finished-toothed markets create a more diversified set of value creation opportunities than the company had in the past. However, these opportunities will create value only through consistent execution. We will therefore remain focused on operational discipline, prudent capital allocation, regulatory compliance, timely project delivery, and transparent communication with all the stakeholders. Thank you for your continued trust and support in Orchid Pharma. We now welcome your questions.

Oh, yeah. Hi. Am I audible?

Yes, sir, you are. Please.

Yeah. Congrats for a good result. I just wanted to, I just had two questions. The first, it was that, as you said, that the industry pricing pressure cycle is still on. I wanted to understand what is management thinking. Will there be any margin recovery in S2 or will it take more time? Will it go to FI 28?

See, I believe that in the non-regulated market, the competition will continue. And generally, it depends on the cycle of demand. So it's very difficult to predict in that area. But for us, what is important is the regulated market demand, which also is kind of cyclical. And we have seen that the quarter where we have more of the regulated products demand, that is much better. And I would consider this quarter as a midioper in that terms. So, we hope in the next two, three quarters, our demand for the regulated products will improve, and we can do better performance.

Okay. And another one was that since the Jammu facility of 7-ACA will, you know, start in February 2027, so I wanted to know what's the expected ramp-up curve and utilization trajectories for that facility, And how much will the output be captive and how much will be a third-party change?

Hi. So, our ramp-up plan is to go to about 80% to 100% by the end of the first year. Initially, it would be slow and then increasing progressively. With respect to utilization, our long-term guidance on this is 80% in-house use and 20% selling to third-party. Initially, the entire product would be used in-house as we develop customer approvals from the new site because it's a pharmaceutical product, so our customers would have GMP approval cycle. Once that starts, third-party sales can also start.

Okay, thank you. That's from my side.

Thank you. Our next question comes from the line of Tarun Krishna with iPod PMS. Please go ahead.

Thank you for the opportunity. So, is it like exports of 7AC from China to India is concentrated with two to three Chinese companies or is it like there are a lot of companies that are exposed to India and you can name some of them? And another one, are you expecting them to drastically reduce their prices once 7AC is fully commissioned?

Yeah, thanks for your question, Sarun. It's concentrated between three to four companies only. Not too many companies make this product. It's a complicated commentation synthesis. The second question is with respect to price reduction. So, although you can't predict the Chinese, but what I believe is all the companies now want to make profit. It's a different situation compared to what used to be 15, 20 years ago when the state was funding most of the companies. So, private enterprises want to make profit. The pricing in 7EC has been stable over the last 10 to 12 years. The weighted average is about $60. So, we believe that there is not much room to reduce prices drastically.

Can you name some of these Chinese companies as well?

So, there's a company called Finopharm Vichida, there's a company called Zhuhai United, there is Yeeley Pharmaceuticals, and there's a company called Lifzone Pharmac.

Okay, got it. And next one on commercializing, I'm going to talk about them. So, for the countries that we have signed the marketing partnerships with, will we be also manufacturing the products for those partners?

So, we have acquired the asset from Aletra, and they already had a CMO in China. They have a long-term agreement of providing the product from the CMO in China. So, the supplies will start from that CMO itself, but we will have our margin in the supplies. And we do have the right to start manufacturing and as our Sepertropole project will get started, say, in the next year, then we will take validation batches. And hopefully, after two years, we will be able to, once we are able to register the product from our site, we would be able to supply some percentage from our site. That's our long-term plan. No, we are producing for our consumption for domestic market. We manufacture supply to Cifla, and we sell in our own brand, Orglyseps, in India. That is manufactured by us completely.

Okay, so all the international sales of Enmetazabactam is from the third party?

It will come from our CMO in China to begin with. And slowly, we will, you know, get registration from our site and partially start to supply from here also.

Okay, understood, understood. The next one on GCLE, so can we talk around where exactly is this product used in our value chain, and will commencement of a 7ACA plant affect our procurement of GCLE?

No, it will not. GCLE is used for different products, and 7ACA is used for different products.

Okay, got it. And our share of business with Votsuka chemicals

I am not really aware how much you are talking about from the related party report. Are you reading from there? So that is the procurement of GC LLRG that you can see there. So it is dependent on the product demand. As he said, last year, the number had significantly reduced due to overall demand reduction of 15 to 20%. So that is why you see a decline in the overall value.

Yeah, absolute value, yeah. But if I take it as a percentage of materials cost, that number has been increasing since the last few years. That's the point I'm over to you.

I am not sure which number you are reading from, so unfortunately I cannot clarify further on this call.

Actually, the prices also vary and the volumes vary depending on our demand, so that would have led to some changes. But as such, in a strategic alignment with Otsuka with respect to GCLE, there is no change.

Okay, understood. That is it for me. Thank you.

We procure our 100% GCLE from Utsuka. So, the values may change depending on our demand and the pricing.

Okay, that's all. Thank you.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and 1. Our next question comes from the line of Nishita with Sapphire Capital. Please go ahead.

Yes. Hello. Am I on the list? Yeah, so I just wanted to understand, with the new facility coming in, everything, what kind of CAPEX have we budgeted for F527?

So, as such, we have not considered very significant CAPEX in the next financial year. In this financial year, we will be completing our projects of separate role and seventh year.

So, the entire CAPEX would be spent.

Okay, like, can you quantify the KPS?

Yeah, it's already there is the presentation, but 750 crores is for the 7ACA project, and 20 to 25 million dollars, I don't remember the crore amount we have disclosed, for the sector of all projects.

Okay, okay, understood. And the next question is on, so you mentioned that for regulated markets also are demand is cyclical. So, like, can you specify more, like, in which quarters do we have more demand? So, you mentioned that Q1 was mediocre in markets.

The second half is generally having more demand from the regulated. It's probably the winter season there.

Right, right. So, like, can we expect the QOQ growth to be better than in H2? Like, in Q1, we had a 15% QOQ growth. So, can we expect that growth number to be better in H2?

Yeah, we hope to have better sales Q1, Q1.

Okay, so, like, if you could give some sort of guidance, what sort of growth can we do for, at least, at least 7? Because we are going to have a QOQ growth. So, I'm assuming we can, like, can we achieve around 30% growth for the whole year?

I don't think it will be prudent to give you any number at this time.

Okay, okay. That's understandable. Thank you so much.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question, press star and one. Our next question comes from the line of Dhonil Desai with Total Capital. Please go ahead.

Hi, good afternoon, everyone. So, my first question is on the 7ACA project, and I think in line with one of the earlier participants. So, what happened in Panjee with Arbindo, you know, the way China dumped and reduced prices, and we have seen that across many APIs where you start new capacity and try to take market share China, it's just doing irrational pricing. So, do we have a plan B on that just in case if they decide to dump at a price which is not sustainable, what will happen to the KPEX investment, anything on that?

See, I would say rather than having plan B, we decided to have a good plan A, and that's the reason we went to Jammu, get some GST benefit, go to a state where the electricity cost is the cheapest in India. The water is abundantly available. The boiler, the steam cost is lower due to available of abundant agricultural waste. So, and obviously we are working aggressively and towards improving our overall tighter concentration so that our yields can improve. Our pilot plan team is working towards that. I think the best you can do is use all your resources to improve your efficiency and that is our target.

And when you compare with Penji, what happened, you know, we have talked about earlier in other calls, you know, in Penji, three of the large manufacturers came together and decided to, you know, collectively increase prices because they knew India could not buy from anyone. And because they increased the prices from $10, $12 to $30, $40, they had that opportunity to crash the price. So you can see the price crashing after PLI. But in 7ACA, that joint cooperation or whatever you want to call it was never happened. And the prices have been stable. So therefore, I said I don't see much room for China to drop the prices. But having said that, they are unpredictable. Sometimes other things can still happen.

What he is trying to say is that even in Penji, the Chinese have not dropped the prices to below pre-PLI level. If you look at the prices of Penji, the current prevailing prices are the same as they were in 2019 or 2020. So, because of the PLI, they had increased to properly create a war chest. They were preparing themselves to fight when the PLI companies start their production. And they brought it back to the normal level. Like Mradul said earlier also, now these companies are largely privatized and we don't know what future holds for us, but the intent is not as it used to be 20 years back to just flood the market. They want to work on a profitable model. That's the general belief now for the Chinese companies. And we have seen in other products also, we believe that they are dumping the product, but whenever they reduce the price, they definitely have some cost advantage. So we have changed, at least I have changed my thinking about the Chinese. If I find that the Chinese selling something cheaper, I would want to believe that their technology is better, and I should look at my technology. That's my belief these days.

Got it, sir. Got it. Very clear.

The second question is, you know, I think we have a technology partner and I think they also supply to the Chinese manufacturers. So, do we have only the process technology transfer or the strain part also is given by them, you know, because the high-end strain will make a lot of difference in terms of the end competitiveness. So, you know, how is it working?

We have a comprehensive agreement with them. They will handhold us during the manufacturing process. They will support us in the production stabilization. They will continue to develop strain and provide with better strains when they come up with that. And they will help us in improving the technology over the years. They have some incentive to give us those improvements.

Okay. And last question. So, sir, with all this in place, you know, typically we have seen that fermentation product takes, you know, a longer time to ramp up. So, where are we today? And when you say commercial batch, I think that would be a very small, the first part of the ramp up. But eventually the stabilization will take, you know, what, 12 to 15 months? Is that the timeline that you guys are working with?

We've been guiding 12 months, but, you know, and I've said that again earlier, that Arbindo, looking at other experience, it might be longer. Although we have, like Mr. Mani said, the technology partner with us all the way to make sure the risks are lesser, but it is something unpredictable, and we'll have to wait to see what actually happens. We have been successfully being able to commercial scale up our existing pilot plant by 20x, and we have to another do about 800x from there to Jammu, but it's a little unpredictable. We still remain hopeful that we'll be able to reach full utilization in one year, by the end of one year.

Okay, and we'll come to know the end output is good in terms of quality and yield by March, right? That's a fair way to, so 20 to 800x that we're talking about. That will happen in February, March of 27.

Yeah, the first batch, yes.

The first batch, yeah. Okay, got it. Very good. Thank you.

Thank you. Our next question comes from the line of Rupesh Tatia with Long Equity Partners. Please go ahead.

Hi, Manish. I'm Ridul. First question is, some data you gave on vials. I don't know if it was for inventors or back terms. Could you please just repeat that?

Which one?

Russia.

178 million for Russia. That's what you're talking about?

No, no, no, some vials. You gave some growth data, Q2, this many vials, Q3, this many vials. So what was that?

So that data actually came up with. Europe's number of vials growth data, we were just trying to talk about how the business is growing in Europe as more and more markets get added. So in Q3, FY26, there was a 300% growth, QOQ. And in Q4, over Q3, it was 175%. And in Q1, FY27, there was a further 50% growth over that. So, as the volumes are increasing, we are seeing this J curve continue to play out. That's what we were trying to share.

Okay. Okay. So, now, have Advanced Firma launched the product in all the markets where it is registered?

Sorry? Advanced Pharma what?

Have they launched in all the markets, or are there still some markets where launch is pending?

Advanced Pharma is focused in Western Europe. Big 5 would be their largest markets, which is Spain, Italy, Germany, France, and UK. They've launched in all of those Big 5 markets and some of the other notary countries. But for Eastern Europe, they will have B2B partnerships that they will forge. They have the license for full EU, but the rest of the Eastern Europe, they have not made the partnerships to launch yet.

Okay, okay. And, I mean, I don't know, at what point does this advanced pharma stream start becoming, you know, 5%, 10% of the revenue? Do you think it is a 528, a 529?

I would not guide on advanced pharma specifically becoming 10% of our revenue, although I would be happy to see that. So our long-term guidance on this is remaining the $1.1 to $2 billion that we came up with in 2021. And looking at even the Russian numbers, you know, we remain optimistic that the partners continue to believe that it's a viable asset. But to actually We sell a product and get value out of it is a long-term thing, and things can change over time. So it would be difficult to say the answer to your question.

Okay, okay. And Russia, what are the timelines for registration and commercial launch?

So the agreement is just signed, we announced last month. And since that time, I think registration dossier's permission and launch would take about one and a half to two years. Okay.

Okay. Okay. Now coming to Cephid or a call, any update on trial wave-off? How is that discussion? Go on.

Sorry?

Trial, trial, right? DCGI, we have to do a trial for Cephid or a call for launching in India. And I think we are hoping for a waiver on that.

Yeah, that we will come to know only after we apply. So, as you know, there's a SEC committee that sits in the ECGI after your application. So, we are working with GuardP to engage the stakeholders in the usefulness of the product and the strong unmet need in the country. But the actual result will come to know after the application.

Is there any precedent for the waiver? Is there any precedent for where, you know, DCGI has granted a waiver in the past?

Yeah, yeah. Our specific point and metazobactam itself is a precedent. We got the waiver because the committee thought that because of the antimicrobial resistance, the country needs new antibiotics. So we ourselves have got this waiver. That's why we are more hopeful, actually.

I see, I see. Okay, okay. And this GARPI RFQ, do you need any registrations or regulatory approvals? How does that work for 125 countries or just WHO enables you to supply to 125 countries?

Yes, so the overall target is getting the WHO PQ. If you get WHO PQ, then the process of registration in many countries becomes very simplified. And when the product is distributed by non-profit organizations like CHAI and GARTP, then it becomes further, I would say, faster. So our target is to file with WHO Geneva and get the PQ.

How much time does it take to get a PQ after filing?

It takes two years, around two years.

Around two years, okay.

We are banking on our sales in India. I think that will be our first market.

First market, okay. And any update on U.S. formulation strategy? I mean, just somebody maybe can give where we are at, where will we go in next, you know, Yeah.

So, Rupesh, we just talked about that strategy first time last quarter, and the guidance is still 2030. I don't think there will be quarterly updates on that. You know, we'll be sharing possibly annual updates on that only. So, things won't move much in QO quarter to quarter.

But, I mean, have you, I don't know, have you started looking at the products?

No, no, the products are already identified in part of our presentation, which products we are going to launch. So, it's Cepta-AVI, Cepta-Rolin, Cepta-Rosane, Tazobactam, three new molecules, and three older molecules in Cepha-Pine, Cepta-Axone, and Cepha-Zolin.

Okay, okay, and are we, I mean, where are we on end-of-filings, BMS, for those, we also know from distributors in the U.S., yeah. Yeah.

So, yeah, those will take time. For the generic molecules, we'll be using our cephid aeropol facility to file. So, that will require taking validation batches, USFD approver, filing, all of that, which will take a few years' time. For the newer molecules, we'll be using a CMO to launch faster in the market, but nothing starts before 28 sometime. Some of the new molecules might be filed by end of next year, but nothing before that.

Okay, okay. And how, I mean, what was the EBITDA loss for AMS division in quarter one? Where do you see that for the full year? And how is the discussion to, you know, get the distribution license for Sephidore of all?

It was around 50 lakhs for this quarter.

Sorry?

About 50 lakhs for this quarter. The results were much better than the last quarter.

Okay, okay. And, I mean, if you can share the number also, revenue number from the division?

Yes. It was revenue for AMS was 5 crores.

Cephedorocall, distribution, I mean, whatever, process, license.

Cephedorocall. No, not Cephedorocall. Orglysef and VF, couple of other brands that sales through AMS division was around 5 crores of sales.

Yeah, but eventually we are looking to get it to become a distributor of CephidroCole, right?

So, when we launch, will we be the distributor? Yes, yes, yes. We are building this network for CephidroCole launch itself. That is the main purpose. And we are in advance discussion to finalize our distribution agreement with God.

Thank you. Our next question comes from the line of Nishita with Sapphire Capital. Please go ahead.

Yeah, thank you for the follow-up question. So, I just, if you could just reiterate, when are we going to, like, start commercial operations in both of our projects, 7ACA and Cephidora Call? I missed it. If you could just repeat that.

7 ACA is March 27th, and CEPIDERA call, you know, facility would be ready by December, and cost product approval will take 6 to 9 months from there for CEPIDERA call approval in India, depending on DCGI granting the clinical trial date. So, that would mean Q3 of next financial year.

Right. So, 7 ACA revenue contribution we can see from, it's by 28, right? Okay. Thank you so much.

Thank you. Next question comes from the line of Ankur Chedda, an individual investor. Please go ahead. Ankur, you may please proceed ahead with the question. Thank you.

Hello. Sorry. Just one question. Is there any risk to the PLI benefits due to the situation in the timeline or has it been set in the government?

Sorry, can you repeat the question?

We will probably be entitled for two years. Based on the current scenario, we will be entitled for two years.

Okay, so any scope of getting extension on that?

We will maybe try for extension only once the plant gets started.

Okay. Okay. And just one more question on this NPNC business, which came from Dhanokar Rotary. So, in this quarter, of this 350 euro revenue, what's the portion of NPNC business?

We'll just come back. We'll check and come back. Just check. That's a relatively smaller part of the business as of now.

Thank you. Thank you.

It's around 20-25 crores per quarter. For this particular quarter, we will have to separately check and come back.

Thank you, sir. Ladies and gentlemen, anyone who wishes to ask a question, we press star and one. Our next question comes from the line of Pratik Srivastava with Nivesh Wisdom. Please go ahead.

Thank you for giving me this opportunity, sir. Sir, my question, again, is, you know, more broader, but beyond safety recall, you know, or 7ACA, what are, like, the 5-6 target, you know, products that are probably furthest along in the filing and approval process, sir?

Sorry, I did not understand the question, Prati. Can you repeat?

What are the 5 to 6 target products which probably are furthest along in the filing or approval process?

I mean, it depends on which market we are talking about. Like, we have recently launched this product called Sektarolin in India, and our brand is called Ortero. This is a molecule which was only provided by Pfizer, and they are trying to withdraw this product from India, because probably their cost manufactured in Europe is not viable. So, like that is one product which we will slowly manufacture and export to other ROW countries. And if you are talking about the U.S. market, that is one product, ceftoroline, which we plan to file AMDA. And of course, ceftazine, avibactam combination is another product that we wish to file in the regulated markets. Then after that, in the pipeline is a molecule called ceftalozine and tazoractam. That is in our R&D stage at this point of time. So, we feel these are a couple of molecules which are going off at hand in the injectable space, and relatively, there are less number of players who can manufacture such complex molecules, first of all, and less number of regulated market facilities for the CEP injectables. We feel that that will give a significant edge to ORCID in the coming years.

Correct. Thank you, sir. And one more question on the enzyme metazobactam, sir. I think you, if I'm right, you mentioned that 1 to 2 billion lifetime sales potential that we get around, you know, year 4 to 5 post-launch. So, and I think we are active in India, but any other, you know, markets or regulated markets today, we are active with this product, and what could be the realistic revenue contribution from this for FY27?

No, Pratik, we don't give yearly number guidance on this. The $1 to $2 billion is lifetime sale, not the fourth year or the fifth sale. And besides India, it's already selling Europe. And GCC is approved, which is the Middle East market, and South Africa is approved. Launching would be shortly, it would be launched. And like Mr. Manish explained's speech, we are talking to several markets in Latin America, Southeast Asia, U.S., China to launch it in other geographies. We hope that by end of this financial year, it would be launched in three, four more. Agreements would be in place for three, four more places, of course.

Okay. Thank you. Thank you very much, sir. And all the best for future.

Thank you. Our next question comes from the line of Vishal Manchanda with Systematics. Please go ahead.

Good evening, sir. Thanks for taking my question. On C7ACA, have you seen any material price changes on a quarter-over-quarter basis?

No, it's pretty stable for last one year.

And on our final APIs like Cephexin, Sephiroxin, are they also stable?

Sifixim is the one having maximum pressure. Sifiroxim and other 7-ACA-based, fortunately, seem to be more stable compared to Sifixim.

Okay. But on Sifixim, would our spreads be narrowing or does spreads remain the same?

Sifixim does not start from 7-ACA. That starts from PENG and GCM.

Yeah, but the spreads are kind of going down or they remain as they are?

Yes, Sithiglin as a product is under maximum stress with respect to margins.

Okay, and it is so for even the regulated markets or it's only for the rest of world markets?

It's for the rest of the world market where, you know, the volumes are huge and that's where the pressure comes from.

Okay. Anything that we are going to kind of reduce our dependence on this product since this is PENG-derived and we are not backward integrated there?

Yeah, I mean, we are trying to work on other products, and we have a couple of other products that we manufacture in Danuka. We are trying to create a situation where we remain the sole player of those products. Our focus, our strategy is completely different from our competitors, who are more focused on the volume business. We are more focused on the value-based We are the only company which can make about 20 to 25 products, whereas the others, they make 3 or 4 products and focus on the volume. So our strategy, per se, as a cephalosporin player is completely different from our competitors in India. And how it plays out, I mean, that The reason we, I mean, we could see that the generic business of Salesforce for an API is going to become a low margin business. And that is the reason we sought to go for a backward integration and a forward integration. And in that mission only we decided to set up 7AC and the injectable facilities. So, we think we are trying to de-disk ourselves from the traditional API business, which is becoming more complicated.

So, post, like once you have 7ACA, is there a, like, Ceftrioxon is potentially another large market within the cephalosporin space. So, would we, is there an opportunity for us to scale up there and kind of scale up quickly there in a shorter time frame?

Yeah, that's our plan. So, for September, not just sterile, we would be supplying to all other players like Aurobindo and other sterile players in India, the non-sterile part, which they are currently importing from China. So, the market is not just our own sterile product, but our competitors also become our customers.

Okay. So, you will supply the non-sterile version, not the sterile version?

Yeah, absolutely.

Okay, but would you have capacities to sell the sterile version to your sterile? Are there adequate capacities if you want to do that?

I would not say our sterile can completely consume our 7-ACA capacity, but we are re-engineering our non-sterile capacity so that we are able to convert the product and supply the non-sterile. I think that is a better model rather. You see, I mean, selling a sterile product needs an approval process, which is more long-drawn. So it would make more sense to work with our other players in India. Then there are three, four players. They can take large part of your volume production rather than getting approval process in 200, 300 customers. It's better to collaborate with these four manufacturers of sterile who already have the capacity and who already have worldwide approvals. So, I don't see much benefit of competing and creating overcapacity. We would rather collaborate with them. Understood.

Understood. Answer on, as Evicefta, you had once indicated, you have been trying to do a non-infringing route for an early launch in Europe. Is that work under progress and any timelines to that?

Yeah, I mean, we have customers who are taking this product for us for their own development. We also have plans to take our own validation batches and file in Europe. The U.S. plan, although unfortunately last filing had some objections, we still continue to have plans to refile, and that is going on.

The filing should be should happen this year for in the US for Xevi-Septa.

I'm hoping maybe validation batches maybe this year or early next year and then six months for filing.

Thank you.

My next question comes from the line of Rupesh Tathya with Long Equity Partners. Please go ahead.

Yeah, hi, hi. Thank you for the follow-up. One question on 7ACA, there is this, you say, cancellation of VAT refund. So, is that applicable for 7ACA manufacturers also in China?

Sorry, I'm not sure what you're talking about.

In battery or solar in a host of other industries, Chinese government used to give a tax refund to the manufacturers, and then government now is cancelling the refund from April, for some industries April, some industries January, like that. So my question is, where 7ACA manufacturers in China are getting this refund, and is it now getting cancelled?

Honestly, not aware about this. We heard that slowly the VAT refunds are getting reduced, but not aware exactly of this.

Okay, okay. And another question is, what was the sale of, you know, NPNC segment in maybe last year or this quarter, and any, sorry, any high-value APIs that were working on in NPNC?

Yeah, so this quarter's sales was 21 crores, and we are working on a couple of molecules. We are also planning to scale up and backward integrate in these molecules also.

So that launch would be this year, next year?

Yeah, I mean, it's a continuous process. You see in synthetic, you continue to, you know, introduce new products. It's not something, I would not say it's a news that we would want to discuss on a large scale. Yeah. It's an incremental improvement that you continue to do NPNC synthetic. You have to keep working either by increasing capacities or introducing new products. So we keep evaluating which options are better at any point of time.

But, I mean, will it become, let's say, 25% of our revenue in three, four years?

25% no. Thank you.

Ladies and gentlemen, as there are no further questions from the participant, I now hand the conference over to the management for the closing remarks. Thank you, and over to you, team.

Thank you. We thank you, dear investors, for your continued interest in Orkut Pharma. We value your input and feedback. Thanks once again for your participation.

Thank you. Thank you so much, sir. Ladies and gentlemen, on behalf of Systematic Share-In-Stock, let's come to today's call. Thank you for joining us, and you may now disconnect your links.