Thank you very much. We will now begin the question -and-answer session. The first question is from the line of Samitinjoy from Kotak Institutional Equities.

Hi sir, good afternoon. My first question is related to our contrast media business. So our revenues declined by around 40% on a sequential basis. Ganesh sir, you highlighted that there was certain recognition of revenues, which were actually postponed to the next quarter. So could you quantify this quantum of revenues, which will be recognized in 2Q? And also in this context if you could provide the utilization levels for contrast media for us in 1Q and in the previous quarters as well?

Maybe I'll just take the first question. Closing cut-off, what you call goods in transit is higher by INR30-odd crores compared to opening cut off. But in other words, the goods in transit is higher by INR30 crores. And in a nutshell, that is the sales we would be recognizing in the next quarter.

Can you give any colour on the utilization levels?

Plant utilization level?

Yes.

That we are at 70-odd percent steady. So, in terms of production, there is absolutely no change. If you look at from production to dispatches that is going at 100%.

Okay. Okay. My second question, so for the Iodinated Contrast Media Intermediate, has there been any development towards supply of commercial batches or are validation batch is still ongoing?

Okay. End of Q2 or beginning of Q3. And thirdly, just another bookkeeping question. So the other operating income for us this quarter was INR16.5 crores. So what was the main reason for this jump? It used to be earlier around INR2- INR3 crores.

I think a couple of things. One is on foreign exchange gain. Second, we also have higher interest income. Because if you notice our total investment in mutual fund is also going up. But if you compare it with Q4, Q4, we had a much higher forex gain and certain insurance claim. So that's why like if you compare it with Q4, the number would be lower by INR7 crores. But I would actually attribute the predominant part of INR15-INR16 crores to bid more on forex.

No, sir, actually, I was talking about other operating income. So the revenues on that...

So the other operating income is driven by byproduct sales. And this is actually like linked to the product mix, what we have and the byproduct which is generated. So if the product mix has more of PI-API, to that extent, you will have higher other income.

Does that mean that we are, like, the entire incremental INR14 crores that is pertaining to the PI API segment? Or how do you perceive this?

Sorry, that's what you are referring to is export incentive. That will be based on our export commitment, whatever we have.

Do we expect this quarterly run rate to sustain in FY27.

It depends on your exports. So its just as a percentage on your export where we break this incentive. So it will be the same range. If you see the percentage to exports that will be the ratio. The export is a breakeven.

Okay. Thank you.

Thank you. The next question is from the line of Sanjesh from ICICI Securities.

Yes, thank you and good evening to all. Thanks for taking my questions. First question on the Bempedoic, this quarter, PI API has jumped quite sharply. Can you help us understand what is the visibility for PI API and unlike last time, will be equally volatile, lumpy? Or you think the incremental inventory or incremental sale is because it is more linked to h ow the end market is growing, so it will be more secular. How should we think about PI API revenue?

Hi Sanjesh. I think both. So there is clear secular growth at the front end. So the formulation market or the prescriptions of the patients, there is very consistent consumption and very strong monthly or quarter-on-quarter growth. On our side, we have a s trong order book now. And the plant is running very consistently. Production is happening consistently. So at least for the next 3 or 4 quarters, I think we have very good visibility.

Okay. Got it. Second, on the price increases, we said that it comes with a lag for the contract. I think that's true for most of the contracts. I don't think we would have had any material pricing

pass-through in this quarter. On a blended basis of the portfolio, how much price increase are we expecting largely because of the increase in the raw material prices?

See, there is no price increase clause which we have triggered in this quarter.

Okay.

To answer your question, see, it is a combination of price increase as well as rupee devaluation, okay? So there is a price increase, which is actually getting offset by rupee devaluation. Being a long-term contract, we actually like watch for raw material price to stabilize. As we speak, we are looking at August trend. And we will be actually like on a case by case, we will actually evaluate how this price increase would be actually passed on.

Yes. I think just to add on to that, I think, Sanj esh, the situation is a bit dynamic, but being the segments that we operate in, I think the customers are quite flexible in understanding the situation and I think it's a known fact and they've been very supportive so far. I mean, our contractual indicators, but in general also, across the board, there's a lot of increase in the solvent prices you might be also aware of.

Got it. The last question on the Mahad capex, now we are spending INR250 crores. I know a small portion goes into APD CPT, but what else we are planning to use Mahad facility for?

I think the immediate focus would be to validate this production line and scale up these quantities. But this particular capex that we have done, I think it helps us to make a few derivatives for contrast media just like APD CPT, there are other derivatives also that we can evaluate. It's a flexible line. And so far, we're just validating the equipments over there. And hopefully, we'll start the production as we VK mentioned.

And just to add on to it, are we registered for the APD CPT because I think that would be one of the requirements from -- because it's a pharma product, right?

Sanjesh, this is very confidential. We cannot really speak on these aspects. So we are tied with very strong CDAs. I mean we -- I think it will be inappropriate on our part to share anything more than what we have.

That's fine. Just one thing. We were also planning to do the new high-intensity sweetener here, sample batches, we still intend to do that. Does the plant has the capability to do that? Or we need to wait for Vizag plant to commercialize for our new high-intensity sweetener to rollout?

As we mentioned, right now, we are in the pilot stage. So the pilot is happening in our existing facility. And the real scale up will happen from Vizag, you're absolutely right.

But some revenue will start kicking in from the existing facility, right?

And the last one on the -- any new product pipeline, you want to talk about some late stages we have been talking about for the last few quarters. Where are we in the process and any success there which could come in '27 or '28.

We feel that at least 2 of these opportunities, the high conviction opportunities, which are shaping up well, should fructify in the time frame that you have mentioned, how large they would be we should neither guess nor guide at this moment. But the 2 that we are talking about are interesting and significant opportunities with the innovators.

With the innovator?

Yes.

Got it. One last on the R&D efforts, the new facility at the Hyderabad, what will be the focus area there in that facility?

So Sanjesh, I think you are very well conversant with the platforms that we are very strong in and the platforms on which the current business is built on. Going forward, we thought that there should be platform diversification not led to be able to increa se our addressable market. But because of the CDMO tailwind that we are seeing the inquiries that we started getting were also on many occasions and platforms, which were those which we did not have. So the new R&D setup will have certain new platforms which we spoke about and significant RFPs are coming on that side, and that was the reason that we have very -- on a very, very rapid scale onboarded very good pedigree talent for that R&D.

The next question is from the line of Naveen Baid from Nuvama AMC.

I just wanted to check on the rise in the PI API segment. Is it only to do with our supplies to Europe? Or have we also started to supply to Japan?

I would say we'll guide you at the appropriate time. At this stage, the businesses that we had, we have extremely good visibility and a very strong order book. But at the right time, we'll specifically guide you on that. All that we can probably say at thi s point of time is that as suppliers of intermediate, we are globally qualified.

Got it. And when we speak of the visibility being there for the rest of the year, are we also accounting for the 2 or 3 molecules and a couple of lateral entries that we have been seeing off in recent times? Or this is only for the existing portfolio?

So we are accounting for some new opportunities. But since -- as you understand that whenever we get to these new products, which are in different NCE phases, then the first phase is the trial quantities or the validation quantities. So those small quantities are factored in, but the main bulk of what we believe, we will do on the PI segment will be from the existing portfolio -- existing commercial portfolio.

The next question is from the line of Aaryan Mehta from Shravas Capital. Please proceed.

A large custom synthesis player in the latest earnings call commented about signing long -term contracts with 2 customers for iodine -based contrast media. So, commercialization for one has already started and they might even enter gadolinium. So, should we consider this as a tailwind considering that we can sell them KSMs or intermediates or are they backward integrated enough so this could be a headwind for us. So I'd like to...

I don't know if the question is for us, I guess, but difficult to answer it without knowing the company you spoke about?

Divis recently mentioned this in their earnings call that they have signed long-term contracts?

But I don't think so we gave any customer-specific guidance.

Okay. So, can this be a tailwind for us considering they can be a potential customer? Or do you see this as competition?

Not to answer this question at this point in time.

Okay. Sure. And so, the 4 programs that you mentioned earlier in the call. So, by when can we expect some commercialization? I know it will take some time in validation batches. And also in the previous call, you had mentioned 2 molecules where we have lat eral entry and dedicated blocks at Vizag. Is the potential for these 2 lateral entries similar to the anchor like the cardiovascular molecule we have.

I'll take the first part first, that on the LCE opportunities that we are guiding, we still maintain that 2 of them should fructify. The initial quantities that will go will not be significant because there will be small validation or clinical type of quan tities, but then the programs moving with high conviction forward into the next phase. On the lateral entries, I think maybe it will be better if we make some definitive comment in the next quarter.

The next question is from the line of Venkat from Three Sigma Finance.

So can you please share the growth numbers for the next quarter. My first question is on growth numbers. And also, the buyer of the elevator has offered some $40 million incentive if they increase the sales to $360 million, which is more than 100% of the last year's sales. Will this translate to an equal amount of growth in sales for us? And do we have the capacity for that?

Next quarter, November, I think Ganesh will answer. But on the sale aspect, if you are indicating the cardiovascular opportunity, then we go more by the orders that we have on hand, and we would rather avoid prospecting or going on to any type of here say or something. So, we'd rather stick to the order that we have...

No, no, this is not a hear a say. This is the statement made by the CEO himself of the Elevator company.

So, we'll see how it translates because it has to translate into orders for us and we have a good order book right now, and we'll update you at the moment we have any further information on that.

But I think it's a very good observation you made, and these are encouraging signs for the candidates that we are tracking. So hopefully, it turns out for us also.

Okay. Good. Then the next thing is during the initial call, you mentioned about 4 molecules are in commercialization phase. Can you throw some light on those 4 molecules where are we, what therapeutic areas are the kind of like covering? You mentioned they are chronic, but what therapeutic areas are recovering like?

So there -- in the chronic space, there are a couple of opportunities on the oncology side and some on the CNS side. And then there's another category that we are prevented by a CDA from mentioning. But at a top level, that is also in the chronic side as well.

Okay. So, the last quarter, you have mentioned about peptides. You are introducing peptides in your R&D. So, in this quarter, you did not mention it looks like the whole world is moving towards -- the CDMO world is moving towards peptides. So, what is our strategy? And how are we planning our investments moving forward? Because so many CDMO companies are moving towards the peptides. So, if you can throw some light, that would be great.

I think it's a very good observation that you have. But if you would just look at what we spoke on this call as well, we did mention about peptides and peptide fragments, and we very clearly mentioned that while we have capability today, we look -- we as a company are also looking at it as a big opportunity. And at the Vizag expansion project, which is going to set the footprint for manufacturing for the next several years for Blue Jet. We are planning a capacity for peptides and peptide intermediates. You have observation on a lot of capacity, a lot of people talking about peptide is also very correct. And it is for this reason that our first port of call is not so much the end peptide. We are looking more at peptide fragments because the DNA of Blue Jet is more about intermediates. And that's why we'll be looking at first at the peptide fragments where we do not -- we see much more price resilience. And then, of course, forward integrating into the final peptide will be a natural outcome, but very selectively on the CDM model for eit her the very large CDMOs or the innovator companies. We will not be participating in the front -end generic peptide opportunity where you see cutter and a lot of price erosion.

The next question is from the line of Manan Vandur from Wallfort PMS. Please proceed.

Congratulations. Sir, one of my questions was I understand that you all have C DAs. Yet I just wonder a little bit more understanding that you said in CMI , then in the sweetner space and in

the PI API, we got a few candidates. So, could there be any names that you could do? Or what kind of molecule is it? Any idea on those 3 spaces. Could you give us that sir.

I think as soon as we scale up these molecules, we will ask for specific exceptions and perhaps we would be in the position to disclose this information. But I think since we've been in this segment for quite some time in contrast media and artificial sweeteners, I think the selection of molecules is quite encouraging. And hopefully, it can lead to better conversions.

The next question would be on asset term. I understand that the company does not really give any guidance. So, I was just looking at the past and we were able to do about 4 to 5x of asset turn. So, I just needed an understanding from your end that we are doing a first stage capex of around INR1,000 crores. So just to get an understanding that we already have around INR300 crores in our CWIF. So, what should our asset terms look like, not 1 year or 2 year, like maybe 3, 4 years from now what would our asset turn would be.

See, today, if you look at our significant capex is going to be in Vizag and commercialization would start from end FY29 to FY30. So, it is true maybe not appropriate to put a number at this stage because to achieve the ramp-up, maybe one would actually look at FY31 or FY32. Based on the investments and based on the products we are looking at, we expect the industry norm whatever we will we will be achieving. I think that's one. And second, the current asset turn is because of our depreciated asset block. I think that is something keep in mind. And so, the 4% or anything above 3.5% is a bit on the higher side. And once you see the capitalization, we will be at par with the industry standards.

Okay, understood. That's it from my side. Thank you, sir.

The next question is from the line of Saket Saurabh from Sagari Capital. Please proceed.

So sir, my first question would be pertaining to recent, I think, approval for Merck, Lipfendra, right, which also is into this oral product focused on lowering cholesterol. So, is that likely to be, say, one of our potential commercial competitors going forward? Any color that you may have because you had the -- cholesterol lowering effect also has been quite encouraging for this product. So, any thoughts or comments on that, sir?

Honestly speaking, we are suppliers as intermediate. And we are not experts on the PK/PD or how the molecule behaves or its capability on cholesterol lowering. All that we can say , and that's a conversation that we can have offline more for academic interest. All that we are concerned with is the visibility that we have and our order book, which is all very robust. And we have a very good forecast for the future. In all 3 key markets, US, Europe and Japan. The molecule is getting some extremely good action and extremely good clinical reviews. So, I would imagine that, while we can always debate on threats from new entrants but then that's a

reality of the pharmaceutical world. As far as we are concerned, the order book is robust, and we are very confident of the next several quarters.

Okay. So that's really encouraging. So, sir, one of the focus areas of the management has been to diversify its PI/API portfolio. Now if you have talked about multiple programs apart from the cardiac one. Now if I look at, say, 2 to 3 years out, do you think that, say, if I look at, say, '27 '28 or if not even for FY29 will those new offerings or new molecules that we are currently investing in would say diversified the order book enough or adequately. So, say, for example, they contribute more than 50%, 60% a year downtime because currently, it seems it revolves more around PI/API. And that's the nature of the beast. It's not a specific to Blue Jet, but most companies who are embarked on this journey ha ve initially had to rely on 1 or 2 success stories and then they have deployed that cash as well as scientific capability to then build it further. So, any color on that, sir, like how confident are we about the coming molecules? And how -- what percentage are they likely to contribute just based on high-level numbers, like say, in FY30 or something like that?

So, I think your observation is very valid and spot on. And in your question, you have yourself partially answered the question. One part is that there will be diversification. And therefore, automatically, the concentration that we have on the PI segment will get addressed. There will be diversification. As far as product is concerned, there will be diversification as far as platform chemistries are concerned. In this, you mentioned, that's the nature of the beast, we have indicated about 20 RFPs that we are tracking. But these are high conviction RFPs, the total RFPs that we are tracking are actually more. Even if we say that 20% of the high conviction RFPs will materialize. I think we are looking at a very good portfolio in the next 2, 3 years. And today, even for the innovator companies, it is not easy to predict that when the molecule crosses the regulatory phase and enter the commercialization phase, how it will gain access to the market and how the prescriptions will roll out. But then given that they are all in the chronic space and they are with very large companies, I would say that these could possibly be opportunities to reckon with.

Got it. Thanks. Sir, my other question would be that we recently were awarded the EcoVadis medal now. We have seen companies trying to further move up like for gold to platinum. Now just for our understanding, do these same certifications really help us in commercial succ ess as well, for example, say, RFPs from certain geographies mandate that give us an extra points for having such certification? Or it is more like because most of our peers are also now going after. So maybe it becomes more of a hygiene factor. So any color on that?

See at Blue Jet, this ESG maturity is something that we have been tracking for the last five years, very consistently. Our renewable energy capabilities were built about three years back, and it was a blend of both solar and wind because if you have just one, then the impact is a little more

lopsided. Besides that, there are a lot of other things which are happening in the company as far as the ESG part is concerned. Now your observation is very valid that today, this becomes an essential factor. It may not help us so much, I would say, commercially, but given their environment, it is no longer good to have. It's a must have, and it's like a part of the prequalification process. But with the certification, pre-qualification becomes simpler, because then the audits become simpler. They don't have to dive deep because a third party has already certified us. It helps in that fashion.

Got it. So it's also about agility, right? So that if I understand you correctly.

Absolutely. It is speed of prequalification. It is like saying that the boy is not only smart, but he is a B. Tech engineer when you hire.

The next question is from the line of Viraj from Kotak AMC.

Thank you for the opportunity. So first on your contrast media segment. How are you seeing the market for your CMI products, especially from the point of view of your major customer over there. How are the trends that you are seeing there? And also in terms of the iod inated ABA-HCL, I think how is the traction there? Are there any sales booked this quarter. Fair to say that in contrast media this quarter as well in Q1, all of the growth has majorly been volume volume-driven?

I think just trying to give you a general feedback around contrast media. I think the overall segment is doing well. And the usage of contrast media across geographies is increasing. And from our standpoint, the optic requirements are quite stable. As you are aware that they are backed by long-term arrangements. So we see a lot of stability in the segment and a good traction because we would be launching a few intermediates in this phase too. In terms of iodinated products, I think Ganesh has already answered. So we need to wait for some time. But the customer feedback is quite encouraging for a scale up to happen.

Okay. So I think it was mentioned mostly that price hikes was not the protocol. And I think in terms of one last in terms of your Mahad capex, you can refresh what was your capex plan there and as of now, how much is capitalized?

Mahad is yet to go commercial. So everything is in work in process of CWIP. And once it gets commercial, you would actually see an addition of anywhere between more than INR200 crores in the asset block.

No, this is only for backward integrated product, which goes into the intermediate what we make. So today, we are actually dependent on imported supplies, but we will be actually making it captive. And we will also have an opportunity to have third -party sale once we stabilize the operation.

Sorry to interrupt, Mr. Viraj. May we request you to join the question queue for your follow - up? Thank you. The next question is from the line of Amlan Das from JP Morgan. Please proceed.

Sir, my question is regarding the margins. Now in the next quarter, if we assume that the that the goods in transit resource gets resolved. How should we think about the about the flow into EBITDA from the incremental INR30 crores sales that we will be booking in the next quarter? So, would we see expansion in EBITDA from the current levels?

See this cutoff is an ongoing topic, okay? Only when there is a significant variation between the opening and the closing, then you have such issues. If you have identical numbers, then technically, you won't have this challenge. So , this is part of the business. I think our customer contracts are in place. And with the accounting standards. This is how accounting would work. And we actually take it more as part of the business. And this is just to highlight like why the turnover was lower this year, this quarter. And we cannot actually predict what the closing goods and transit would be for September quarter. So , it depends how that number is then only we can actually like come with some meaningful assessment. Otherwise, this could also be recognized as a turnover once it reaches the customer.

And next, sir, I may missed in the opening remarks. Do you maintain your FY27 capex guidance of INR400 crores? Or has there been any increment in this capex guidance for this year?

At the company level, it will be similar amount.

The next question is from the line of Ravi Purohit from Securities Investment Management. Please go ahead.

The two lateral entries that you referred to, you mentioned this as innovators. Can you give some background as to how -- are those like already established commercial products and if so, are these like a 100 million per product or 1 billion product? And roughly, I understand you can't specify the brand, but if you could just give some background, it will help us kind of understand.

See, we have already mentioned that the space is chronic. They are lateral entries, which means that the products are commercial in mature phase and they are blockbusters. So, I think -- but as I said earlier as well that we would be in a better position to speak about them in a quarter.

The next question is from the line of Samitinjoy from Kotak Institutional equities. Please proceed.

We intend to give this clarity in the coming quarters.

Okay, the other question is given there are multiple Indian CDMO companies which are now investing for this peptides space over the next few years. So , this is going to be a fairly competitive environment in the upcoming -- in the next 3 to 4 years. So , what do you believe differentiates Blue Jet from these other players? And also, if you could talk about some of the capabilities, which you are planning to install, are these liquid or solid phase -- the reactors or are we mainly targeting short chain and long chain peptides. So, what kind of reactor sizes are you planning, if you could elaborate on this part.

As I mentioned in the first phase, we'll be looking at peptide fragments. So, it is not so relevant at this point of time to speak about solid phase or most of these fragments will be a liquid phase. And if you would see the last 4 or 5 years of how the company has performed, then you realize that -- it's about how we choose the se gment, how we choose the category and how we choose the product. So, we'll be very selective in it. We are not going to become a catalog company. And the way we will choose the client and the product, I think the margins will be in step with what we have today.

Thank you. The next question is from the line of Nishant Gupta from Kotak AMC. Please go ahead.

All my questions have been answered. Thank you so much for the opportunity.

Thank you. That was the last question for today. I would now like to hand the conference over to the management for the closing comments. Over to you, sir.

Thanks for the participation, and we hope to meet you in with Q2 investor call. Thank you very much.

On behalf of Blue Jet Healthcare Limited. That concludes this conference. Thank you for joining us, and you may now disconnect your lines. ____________________________________________________________________________________________________ (This document was edited for readability purpose.)