Sai Parenterals Limited (SAIPARENT) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the SAI Parenterals Limited Q1 FY27 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. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. 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 Admin's conference call to discuss the performance of C1 F527. I hope everyone had an opportunity to go through the financial results, trust release, and investors' presentation, which are uploaded on these stock exchanges, as well as on our company's website. Q1-FI-27 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 2026. Neumat Pharmaceuticals was consolidated with effect from 12 November 2025. Consequently, the first quarter of the previous year, that's Q1-FI-26, carries no contribution from Neumat. And thus, year-on-year comparison is not like-for-like. Consolidated total revenue for the quarters stood at 182 crores, taking as 201 crore in the Q4 SI26. Gross profit was 76 crores at gross margin of 41.8%. Edita stood at 27 crores at a margin of 14.9%. And profit of the tax at 8 crores at margin of 4.3%. Mr. Anaykumar's CFO will take you through the details shortly. This first quarter, therefore, represents approximately 24% of our full-year revenue target of 750 crores. That is, ahead of where the first quarter needs to be, given our guidance that the EX split 45-55 between the two halves, Our overflow 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 370 basis points. Our contracts carry a window of 90 to 120 days between a price revision, being notified, and being realized. That lag is now beginning to unwind in our favor. The recovery of rometry cost increases remain partial at this stage, and we expect soon further benefit to flow across the contract book through the second contract. Ebit of 27 crore at margin of 14.9% and improvement of 50 basis coins over to 14.4% recorded in Q4 F526. I would emphasize that this improvement was achieved on a lower revenue base, and it was achieved despite absorbing elevated air price costs in Australia. The situation in West Asia delayed consignment 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 radiation in the objects of the IPO issue. In substance, we propose to redeploy 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 two operating pharmaceutical assets. The aggregate amount involved is 101.85 crores. The proposal is subject to the approval of shareholders. The purpose for which the IPO funds were raised, namely, European GNP 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 radiation is a change in the regulatory position in Hyderabad. Under the Hyderabad Industrial Lands Transformation Policy, which is called as health policy, units situated within the outering road may convert that land and relocate outside it, and materially, for us, upgradations within the outering road are no longer permitted. Unit 1 and 2 at GD Metla falls squarely within that parameter. There is also physical constraint we cannot work around. The GDMetlar site measures approximately 3,100 square yards against the 12,000 to 13,000 square yards that a UGMP injectable plant at this scale requires. The site cannot be expanded, so no adjoining land is available to us. So the alternative buildings from the ground up afresh would have cost us extended time. A greenfield project began today would have required 7-8 months for land allotment alone before construction and it could even commence. Against that background, the company proposes to acquire a 60% equity stake in Psycrete Pharma A newly established company for 83.83 crores. SAI 3K has been formed for the purpose of constructing a critical care injectable facility at Gumbardala outside the Outer Ring Road on a site of over 15,000 square yards, where already approvals are in place and civil work is already underway. The facility is being built to European GMP and US FBA standards, with their dedicated capability in complex injectables, lyosolization, and GLP. Along with size, general injectability capacity. I want to be precise on one point that 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 215 crores. The company contribution is 83.83 crores, is unchanged from the amount originally earmarked for upgrading 1 and 2. The balance 40% is being funded by the promoters of society and the residual requirement through project debt. The entire 83.83 crore 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. This proposed route delivers approximately. 154.66 million units of injectable capacity against approximately 105 million units under the original upgradation plan. That is roughly 47% more capacity on a larger and longer effect at an unchanged capex outlay from the company and with a completion extended only about a month to April 2027. Alongside the facility, we gain access to SkyCreative's existing domestically critical care quantity of approximately 52 crore, which will be in due course to be manufactured from the same new site. The second transaction addresses the research and development. Our dedicated research and development subsidy proposes to acquire a 60% equity in Tucket Laboratories Private Limited for 15 crore, while the quantum originally year mark for a greenfield research plant center was 18.02 crore. PASC operates an established real-person development center at 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 light-light, 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. It removes the construction cycle, and it removes what is in truth the considerably harder task that assembling a scientific team of this caliber. The transaction is expected to complete on or before 30th September, with Pratake becoming a shutdown subsidiary of the company, and will be named as Psy Pratake. Definitive agreements and shareholders' approvals as and when materialized, we will keep the market appropriately informed as those steps are completed. Moving to Australia, of the concluding 5 million required to complete the Australian facility, 3.5 million is being contributed by the company through its own wholly owned subsidiary, Singapore subsidiary. And 1.5 million by the existing Australian shareholders, which has already been invested. The company infused 1.75 million approximately six weeks ago, and the board has approved the balance 1.7 million for deployment within the coming weeks. With this funding of 53 million Australian programs times complete, construction is on schedule with residual completion targeted for January 2027. The TGA licensing inspection anticipated by 31st March 2027, and phase 1 manufacturing expected from April 2027. The board also has approved the incorporation of the subsidiary in the United States to be held as a step-down subsidiary through SAIF, Parent Health, PTE, Singapore. The entity is being created to support the company's evaluation of an entry into the United States market. 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 re-trading our guidance of 750 crore in revenue for FI 27 at an EBITDA margin of around 17%. The year is weighted towards the second half in line with how these businesses have always behaved. We shall enter the upcoming quarters with a deferred volume still to be recovered at our Australian facility approaching completion. The SI-27 remains a year of building. SI-28 is running. The build star should start showing in our performance. With that, I will hand over to Mark Kilbone, Chief Executive Officer of Numet Farm Citibus, who will speak to the Australian platform in greater detail. Over to you, Mark.

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. NUMED 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, and we bring first-to-market product to multinationals and generics. At that 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 branch. The pharmacy chains own the brands, but we own all the registration and hold the IP. They do no manufacturing. That is precisely the gap that NUMED fills as providing the turnkey solution whilst we hold the market authorisation, and we also hold the inventory, managed logistics, forecasting, and providing warehousing, distribution, and regulatory support. Inclusive of that covers across the pharmacovigilance. Today, we hold five exclusive long-term contracts, and we hold 10 exclusive supply molecule contracts. Covering 526 SKUs, the typical terms of five years and more, and written with product-wise annual volume forecasts, actual offtake, and has consistency of run ahead of those forecasts. At this present stage, in forecasting on some of these molecules is increased by around about 8% overall in the market. On the customer side, our two largest customer relationships are Westpharmers Health, which sit in the top 20 of the ASX listed group, supplied through Priceline, Private Label, and Pharmacy Health generic brands, and with the eBoss group in the top 150 ASX listed companies, supplied through the Terry White, Ken Mark Banner, and the Pharmacy Choice generic brands. which operates across Australia, New Zealand, and Southeast Asia. Alongside these, we also supply Inova with the Demason and DuraTus brands in Australia on an exclusive nature. Enabled by the group's research and incorporating SAI's development centre, taken together, the West Farmers Health and EBOS Sandoz networks cover across over 2,900 pharmacies of the 5,500 pharmacies that exist in Australia. The balance of the pharmacies is covered across our multinational network with such brands covered by Inova 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 bio-exclusive intellectual property rights on several registered products, inclusive of all high-hitting narcotics that we supply into New Zealand. Before I come to Adelaide, let me spend a moment on the exclusive OTC apply agreement that we have just renewed with the eBoss group being Kerry White, Kenma and Pharmacy Choice. This agreement was renewed on the 1st of July, 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 display of product on shelf, which increases a wider portfolio and a longer tenor of significant higher value than the agreement that it replaces. It is valued... The agreement as a whole is valued at $202 million AUD, or approximately $1,300 crore, at $1 to RS64.5. The agreement is set in stone exclusively for 7.5 years. That works out to be around about $27 million AUD a year. And there is a further period of a three-year extension by a mutual agreement, which would take the agreement out to 2036. Three features of that agreement are worth drawing down on. The first is that... It is built to grow. The targets, the addition of 12-year products every year by utilising our integration with SAI and its development platform through its R&D Centre, also value the scope of the contract and increase its life for each of those launches. The second is the scope that follows through NUMED as we continue to manage our manufacturing. Product sourcing, regulatory compliance, TGA registrations, warehousing, quality assurance, and nationwide distribution. The chain has entrusted NUMED 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 NUMED 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 this renewal that takes effect from 1 July 26, its contribution begins in Q2 FY27 and runs through the balance of that year. Turning to Q1 FY27, as Anil noted, the West Asian situation delayed consignments from the Indian Contract Manufacturing Network into the Australian market. 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. 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 rooms, 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 2027, 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 with TGA licensing and inspection by March 2027, and the grant of our licence of Phase 1 manufacturing. The starting point in Phase 1, and I must take note to call out the Phase 1 process. With the period of the Irani position and the disruption in supply chain, the facility in Australia has now become paramount to Numed and Sire'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 it assures 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 NUMED 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 grant of $20 million under the Modern Manufacturing Initiative for Sovereign Capacity and Supply within Australia. 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 utilising our own internal network with side rentals and our self-manufacturer. 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 magically hold nine to ten months' worth of inventory due to the 60-day, 90-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. Equally, one Indian-sourced container of inputs and materials replaces eight finished goods containers, which frees both warehouse space and working capital. Vertical integration also extends upstream, and NUMED 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 shorts. 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 favourably adhered to from our customers, whilst our customers are signing on longer-term contracts for continuity of supply. With that, I'd like to hand over to Mr Inil 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 standalone business, and then moving to the consolidated business. On a standalone basis, total revenue is at 36 crores, against 30 crores in Q1 of last year, a growth of 175%. We recorded a gross profit of 22 crores against 10 crores, a growth of 147%, at a gross margin of 39% against 47% in the corresponding quarter of last year. Ebilica worked at about 17 crores against 4 crores, a growth of more than 4 times, at a margin of about 29% against 30% of previous year. That is an expansion of 890 basis points year-on-year, and it is primarily on account of operating leverage. That stood at 9 crore at a margin of 60%, a growth of more than 11 times over the 0.8 crore reported in Q1 of FI26. Moving to the controller results, and repeating the caveat that Mr. Amil Kumar Karusala said placed at the outset, Speed 1 and 527 includes the full quarters in my pound typical. Whereas Q1-FI26 includes none. NUMED have been consolidated with assets from 12th November, 2025. The year-on comparison is accordingly not like for life. Consolidated token revenue, including other incomes, stood at 180 crores. Lost profits stood at 76 crores at a margin of 41%, as against 38% in last quarter, that is of Q4 of FI26. EBITDA was at 27 crores at a margin of 14.9% against 14.4% in Q4 of FI26. Profit after tax stood at 8 crores at a margin of 4.3%. The sequential decline impact against 13.2 crores in Q4 of FI26 reflects a lower revenue base and, importantly, a normalized tax charge in Q1 of FI27. As on June 2026, The debt stood at approximately about 310 crore, as against March debt of about 319 crore, with cash and cash equivalent of about 184 crore. FI27 is expected to be a feature of debt growth for the existing business, as we complete the ongoing capex and acquisition program with delivery from FI28, as these assets begin to continue to earnings and cash flows. Even a peak debt that goes direct to equity ratio is comfortably placed at 0.6 amps. 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. As indicated, we are well placed for a turnover of financial security costs with a data of about 17%. With that, I will request the moderator to open the floor for questions.

Thank you. Thank you. We will now begin with the question and answer session. Anyone who wishes to ask a question, please press star and 1 on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. 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 Vandit Dharamshi with Antra Grove Capital. Please go ahead.

Congratulations on a good set of numbers and a detailed explanation. I have a couple of questions. First one was on the order that we won from a pharmacy in Australia, the 202 million 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, Dhanshi. 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 NUMED and the customer. 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 Catalan out of the US, and they are based on soft gels, which we don't manufacture soft gels 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 18 to 24 months in advance.

I have to assume that the order value consists of the expected revenue from these drugs, or would these drugs be up and above the order value?

No, these drugs will be up and above the value. The value that we have tabled is the existing value of the existing supply portfolio.

Okay, 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 the size of the next one year?

The order value, because this order value was all forecasted and the run rate's forecasted, so the order value is fairly sound at 27 million for the next 12 months, their standardised growth year on year has been running at around about 8%. And what that comes back to is the number of new pharmacies that they bring into their portfolio and change. So in a stabilised environment over a 12-month period, Terry White eBoss 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 auto wins over the next one year? Should there be more auto wins of the price for NUMED over the next one year?

Sorry, could you repeat that question again? You broke up a little bit.

Okay, should there be more such auto wins for NUMED over the next one year?

Yes, there should. That's correct.

Okay, and last question is, with our new Celia 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 utilising our own intellectual property, our own IP dossiers, but also tech transferring product in from them. I can't elaborate any further at this point in time on that, but I can say that there are several multinational companies that we have engaged very serious conversation with.

Well, I'm wishing you all the very best. Thank you so much.

Thank you. The next question comes from the line of Vanshi Shah with EVNA Advisors. Please go ahead.

Hi, sir. Am I audible?

Yes, Vanshi.

Yeah, so I have three questions, actually. First is, the company is undertaking several initiators simultaneously, the new MED integration, new manufacturing capacity, R&D expansion, and the U.S. entry. How are you ensuring that the management bandwidth does not become a constraint of execution? Second question. So, yes, sir, please go ahead.

Yeah, I'll answer this question. I'll take up the second question. At every acquisition, if you see the NUMET 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 NUMED and 25.4% is owned by Mark and his team. Mark and his team are the people who deliver everything at NUMED. So, they are the people instrumental in getting this business to this level, and they are the people, successful people in putting up NUMED business platform under this platform. So, it's the numeric 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 need help from R&D space, on the procurement from India, everything we do it. The same case with, I have recreated in that Pratheic Laboratories also. So, the reason why we went to the Prathek Laboratories is with respect to the 67 people who are already on board, out of which. Four people under management who are performing quite consistently for the last three years, and they made the difference. And we are retaining them, and they will be part of the project going forward in the R&D, because each one of them owns at least more than 28 years experience individually, so they will add more value there. So it's not that Pai is doing everything. He's acquiring the facility where there is enough of potential people who are running the business, so we are betting on them also. Not only on what we are acquiring the stakeholders, but we are also believing in the potential of the existing bandwidth of the management available in there.

And the structure. Sir, my next question is, on the revised utilization of the IPO proceeds, could you explain the strategic rationale for acquiring 60% of the new manufacturing entity rather than upgrading the existing facilities as originally and such?

Yeah, I'll do that. So, what happened is, we filed this IPO document in October, September 30th, 2025. And the objectives were formed during that part of time, and we went with the objectives of upgrading the facility 1 and 2. What happened is in the month of February, there was a government order from the government of Telangana. The units which are categorized in the red category and the orange category, which are within the premises of the outer wing row, has to... Go out of the outer in-road in terms of the pollution control measures, and they don't want after three years the units to be surviving in the existing industrial states of red and orange category. So, incidentally, they also enlightened us that we can't give any further permission 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 in-road perspective, that is, outside the city. So this order has come in the month of February, March in 2026. Then we went back to the drawing board and 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, to relocate after the new government regulations. 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 scouting for the lands. At that point of time, we understood that the land allotment and the permission for the land are going to take at least not less than six to eight months for getting the permissions. During this part of the time 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 liquidization, the GLP, the dry powder injectable, and the ampoule and vial combi level. 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 around 52 crew worth of sales. So, they are setting up this manufacturing plan 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 allotment and the approvals, we said, why 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 side. So, after a lot of deliberations and discussions, they agreed to give 60% of... The state in that company, wherein we will be investing our 83 crores into that company, and they will be investing their portion, and the facility will be built, is being built on that facility on the plant, which will now, last, earlier we were starting, we were thought we will go only for EU approval, now this will qualify for the US FDA, with another 50% of gradation 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 this facility, their existing business will come into this facility. So, the FX cost will get break-even in the first stage itself, and it becomes a larger entity in terms of a facility, and we can go and all out with the USFDA also whenever we want to. Do the registration with the U.S., we can start registering this company in the U.S. also.

Understood, sir. That clarifies. Sir, one last question from me. The new facility offers around 47% higher injectable capacity and U.S. FTA EU GMP compliant capabilities. What incremental product customers or markets do you expect this facility to unlock?

The plan was to go for EU and ROW markets. We will still start with ROW and markets. The potential is the perfect laboratories R&D, which we are now, which we are investing and buying out. There are already 125 critical care injectable development already happened at this site. 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 have already done at our R&D setup. We just have to transfer them. That is the biggest advantage where we are getting on the Prathek Laboratories acquisition. Already 150 molecules are there which are already developed, which form critical care injectables, which are the exact products which we are going to transfer to the existing site. So, if you can leave... What we are going to do is first we will target Europe, then Southeast Asia, Latin America, and Middle East. These are the first what we have identified and what we have spoken in the IPO objective. We will still stick to that. But going forward, now we have an option of going to the US markets, which we will be reviewing at a later date. Given a chance, we will still go with the USFDA after this is completed.

Understood, sir. Thank you. Thank you so much for answering my questions in all the way.

Thank you very much, Ranjit.

A reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Mohammed Namir with Eco-Quantum Solutions. Please go ahead.

Yeah, thank you for the opportunity. Over the past few years, we have observed a downward trend in the relations for injectable segment. Could management share insights into the primary drivers behind this pricing pressure, such as increased market competition, shifting product mix, or regulatory pricing octactions?

Can you just repeat the question, because it's a little not audible? Sorry.

Yeah, yeah, no worries. For the past few years, we have observed a downward trend in a realization for insectivore segment. Could you please add a reason for that?

Yeah, so now the important reason for our injectable growth, what we are anticipating is, if we... If you see our past growth, our unit one and two is majorly we are doing a domestic market and we are not going anything out of the country for ROWR European markets because they are not qualified under the existing facilities. That is one of the basic reasons why we went with an accreditation to EUGMP plant. Currently, whatever the exports we are doing, the entire exports are only oral doses formulations and cephalospurins. Till now, we did not scatter any of our injectable space into exports. Given a source, because we have done some marketing on, we have done a survey of the critical care injectables marketing in ROW markets and 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 legalization and GLP, which is having a much more market in these areas, and we are just trying to establish that market position there in the ROW and Europe markets.

Understood. Another question was regarding Nomad. In the RSP, there is a revenue of around 316 crore rupees for Nomad, whereas the other expense is 126 crore. I just want to understand whether it is one-off or will it continue with such higher expense going forward as well?

Yeah, one second. Mohamed, what do you want us? You are saying that NUMED Australia, we have run-off expenses. That's what you want to clarify?

Yeah, yeah, yeah. Their expenses is higher at 126 crores, whereas revenue is 300 crores.

Yeah. Last quarter, as Mark had indicated, that there are supply constraints. 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 NUMED. So, there was one-time hits in the last quarter because of constraints of supplies, which we had to incur additional costs.

Okay.

Thank you, Dr. Fahmasek.

Thank you.

A reminder to all participants, you may press star and want to ask a question. The next question comes from the line of Aravind 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 a sort, like, since we acquired and then as you were planning, like, a month will take on the land development and other activity from compliance perspective. So, is there any thought process on the upward revision for the next year as well?

I will, I am sticking my neck only to 750 crores with 17% EBITDA for this year, and if there is anything to be reported in a revision, I will look at it in the next quarter, but as of now, we were sticking the number with 750 crores with 17% EBITDA. And we will be taking the call as and when we go into the next time, the last quarter.

No, sir, I am asking for FY28, not for 23.

Yeah, yeah, 28,000, we would just not talk more on that, because still we are, we want to see how the three quarters goes in. When 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, worst is overdone kind of thing, like, the margins and everything will be improved from this quarter?

Yeah, I want me 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. This quarter is always a heavy quarter for us. Obviously, it's an outstanding performance last quarter. This quarter, if you see, whatever I put on my money on 750 crores, I said 44-55 will be the ratio. Even in the last earnings call, I was making it very, very point. The 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 a bit of another 2%. That's only because of the deceptions in the supplies and the age fight of NUMET, but that's gone. Now, I think next quarter, I don't think we have the challenges coming in, and you can clearly see a visibility of the 750 and 70% crossing on very, very smoothly and comfortably.

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 H-U-F capital. Please go ahead.

Hi, thank you for the opportunity. So, I had a couple of questions from my end. So, I wanted to understand, is Thaykriti a related party in any form?

No. It's not a good related party. It was established by the promoters of Cycric and the room. Now, since we did not get this approval from the shareholders, we just took the board permission and post a shareholder approval. Then we will have an entry into that once the shareholders approves it. We don't have any connection with Cycric as of today.

Got it, sir. Also, could you provide more clarity on the remaining 40% ownership in the new entity, as in who is the shareholder, what strategic, you know, values does it bring, and what is the eventual plan for acquiring the balance stake?

Two things, sir. One is... We cite the balancing of that critical trauma is the one who holds that the 100% as of today. And their subsidiary of Crestos Pharma, which is doing into the domestic marketing, is there in their arm of Crestos Pharma is of the Cretogen Pharma. They both are the shareholders in that company, number one. Number two, the 40-person shareholding, whatever they are holding in, they will get the investment. I explained in my previous this thing. 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 their investment into the company. They have already started investment on the land, on everything they have already started and it is still going good. And the balance, whatever is required, we will go for a project rate. So this is how we were looking at the means of finance for this. Number two, also... As I explained to you last time, in 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 as well, domestic sales year on year, which currently they are manufacturing from a CMO network across India. Now, going forward, how it looks is once the facility comes in. Cy also will get the products manufactured in Cy3T for our injectable profile, whatever your existing sales. They will also use the facility, and they will also get the products manufactured from there. The exports will happen from Cy3T directly. The CMO will happen directly from Cy3T. So, it's all about people coming together, and there is a lot of OPEX saver here when we go in the first day itself.

For it, sir. For it, sir. Also, on the R&D acquisition, what are the key capabilities of the team, you know, major molecules under development and the commercial potential of the existing 150 SKUs and 86 molecules?

So, there are quite a number of products, the more coming of liposomal injections, and oncology products. And they are also there, some regular critical care cephalosporin products also they have developed. It's a product of 150 with 86 molecules and 150 SKUs. So the team which is there, a 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 the top five of them is having an experience of more than 25 years. In this R&D development earlier. So they have the team has every capability of doing every molecule. In fact, they are 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 in the complex molecules. So, it's going to be just from day one, once we request, the R&D will start its activity for the SPI in NUMIS. What are all the developments we have to do at the Psi level and UMass development, we will be taking at the present of those days in practice.

Got it, sir. That was helpful. Thank you. That's it from Ayat.

The next question comes from the line of Mohit Obray with PJ Capital. Please go ahead.

Hello, sir. I 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? And when do you expect the U.S. business to start contributing initially?

Now, it's too premature to discuss this part because now the U.S. subsidiary, whichever we are going to, which we took the permission from the board to start a U.S. subsidiary, there are certain things which we are working on with the evaluation part where we can have an entry into the U.S. market. Everything is under consideration, not a decided everything. We will come to the shareholders and the market at a right, appropriate time. When the opportunity is seized and our evaluation gets completed, then obviously we'll come to the market and we will declare that. 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 a U.S. subsidiary through the Singapore entity driven by any specific tax, regulatory, or tariff considerations?

The English 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 Singapore, and that's where it was established. Right now, U.S. is very, very friendly. We have not yet evaluated the tax benefits and going forward scenario for U.S. entity. But, as and when we progress with it, we will revert on this. We will evaluate and revert.

Okay, Shabhi. And my last question is about debt. That with existing debt of around Rs. 300 crore and incremental debt compared to new initiatives, what should we consider the peak debt level over the next 2-3 years? And what is the intended D&D leveraging path thereafter?

Mohit, the current debt as of June 2027 is about 310 crores. As against last quarter of March 26, we had about 320 crores. So the debt has gone up by about, sorry, the debt has come down by about 10 crores. If you remember the IPO proceeds, we had an message that we will repay. We received two of the loans, one from Tata Capital of about 14 crores and one of the acquisitions of 36 crores. So we paid a loan of 50 crores. So there has been, the overall reduction is about 10 crores as we had taken certain loans for human acquisition for the CapEx plan. So the debt has come down by about 10 crores as against last quarter. 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 PsyCity 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 0.6%. This should be fairly well-takes for us.

Okay, sir. Thank you so much. That was very helpful. Thank you. That was a great conversation.

Thank you. Ladies and gentlemen, that was the last question for today. For any further queries, you can contact the SGA Investor Relations Team. On behalf of SAI Parentals Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.