Thank you very much. We will now begin the question and answer session. The first question is from the line of Alankar Garude from Kotak Institutional Equities. Please go ahead.

Sir, first question, our year-on-year API sales growth has been relatively low for the past 3 quarters now. Specifically, for this quarter, the base was also favourable. So can you highlight the issues which impacted API sales in this quarter? And also, if you could talk a bit about the scale-up of the Limbasi facility? Is it going in line with your expectations?

Sure. So last quarter, as indicated earlier, we had certain challenges in getting regulatory approval for one of our products, which was intended to go to Europe market which we got by the end of March and supplies of that product to Europe has already started. So that is going on well and it is in line with what we have been looking on an annual basis. However, as I mentioned that the rest of the molecules which are there, there was a heavy uptake of the products across different geographies in Q4. And it was a heavy quarter for us. And usually, this has been, what we have observed is that -- quarter 1 is usually on the lighter side. To just give you for the previous year, we had grown by close to around 8% last year. Compared to that, this year, we have grown by 11%. So, this is a usual phenomenon that we have seen over the many years. But on a broader level on an annual basis, we do not see any challenges in terms of meeting our guidance for both API and Formulation. With respect to the scaling up at the Limbasi facility, it is going as planned. Many of the customers have already started buying commercial quantities for the regulated markets from the Limbasi facility. And as we speak, this is an ongoing process because we have a lot of customers, so all of those customers qualifying the Limbasi facility does take time, but many of those customers have already shifted to Limbasi. So now they have derisked themselves in terms of buying materials from both Dholka and the Limbasi facility. And many of the new products that we are planning to launch in the coming years, and some which are at very late stages of commercialization, those products are also being taken at the Limbasi facility. So to sum it up, it's coming out quite well and in line with what our expectation is from Limbasi facility.

My question was actually more on the year-on-year sales growth specific to the API segment. So I understand the point on the sequential drop, fourth quarter is usually high for us. But if you look at the first quarter FY '24 growth in the API segment, we were just at 5% and again, in this quarter, in first quarter FY '25, we are similarly at 5% growth. So just trying to understand from a year-on-year standpoint, given the fact that Limbasi should have ideally scaled up meaningfully in the last 12 months, why is the API growth only 5% on a year-on-year basis?

Again, if I would say that this is, if we would have got the approvals for that one product last year, on an annual basis, sales would have been much higher on an annualized basis. But again, just to highlight, we do not see any specific challenges that on the API front, all the products that we are commercial on are seeing good traction. As a matter of fact, some of the products which were just launched a couple of years back, particularly in the Anti-infective segment are seeing good traction and the likes of Teicoplanin and all. And we are already seeing good pickup in those products in the Indian market. So difficult for me to say that why on a compared to last quarter, it was 5%, why this is here 5%. But when you see it on an annualized basis, it is very much in line, the challenge that we faced is something that I spoke about which was particularly with respect to one product which was a significant contributor to the API sales. So it was more of a timing issue, something that we do not envisage in this year. So this year's API sales should be very much in line with what our expectations are.

Understood. The second question is linked to this mix between API and Formulations. Now given that we have been growing really well in Formulations, while API has been relatively soft in terms of growth. Would you like to revisit the long-term guidance of keeping formulation share at 20%? And maybe a follow-up there would be, in general, our understanding is Formulations EBITDA margins are lower than API? So from a longer-term standpoint, does higher Formulations share pose any risk to our EBITDA margins?

So again, we'd like to mention that we stand by our long-term guidance of 80/20 with 20% Formulation and 80% API. And even on an annualized basis, how we are seeing it, it would be pretty much in line with what our long-term guidance is. So, we do not see any changes in that. And as rightly said, the EBITDA margin in the Formulation is definitely lower than the API but given that we are looking at the same mix of 80/20, we do not see any significant impact on our long-term EBITDA guidance. As a matter of fact, once the injectable plant starts contributing significantly over the next 2 to 3 years, we would expect that the formulation margin would slightly improve given that the EBITDA margins in injectable is better off than the OSD. So that's how we would be looking at both business segments.

Fair enough, Ankur. And one final question, if I may. There seems to be some delay again in the injectable facility. We were earlier talking about our first quarter FY '25 commencement, then it got pushed to early 3Q. And now I think you mentioned fourth quarter of this fiscal. Any reasons for the delay?

So earlier, we were looking at quarter 2. However, we have started doing all the qualifications. It's taken slightly longer because we're not doing media fill studies and smoke test and getting the facility in order to take the exhibit batches. It is a little time consuming in those activities. But that being said, by beginning of the quarter 4, we are expecting to take our exhibit batches of some of our products there. So it is just that certain activities took a slightly longer term, but we have now got all the necessary approvals from the local regulators in order to initiate the production activities, and we are now just taking certain qualification activities so that we can proceed with the exhibit batches. So that was the reason for some bit of delay happening while taking the exhibit batches.

Thank you. The next question is from the line of Chintan Sheth from Girik Capital. Please go ahead.

Congrats on the good set of numbers. First question is on the API export part. If you see there is a degrowth in API exports, any reason for the same, if you can highlight? The one product you mentioned, apart from that, any offtake issue or any pricing issue in any of the API products?

No. So we do not see any challenges on the export sales for our APIs. There is something that we had mentioned last time as well that since one of our customers had moved their facility from Puerto Rico to India. So, export sales to that percentage would get impacted. but other than that, for the rest of our customers, we do not see any challenges. So as a matter of fact, we are expecting with a good mix of new products that are becoming commercial, we expect similar lines to be maintained for the export sales. So other than that one customer, things are pretty much in line with what has been last year and how we see going forward.

Sure. And if you can provide utilization of the plants it would be helpful for the quarter?

For unit 1 the plant utilization has been in the range of around 76% to 77%. For Formulation, it's around 24% against 20% last year. And for the Limbasi facilities, it is 38% against 34% last year.

Thank you. The next question is from the line of Monish Shah from Antique Stock Broking Limited. Please go ahead.

So the question is on the CDMO business. Can you just help us understand what is our expertise in this? That is one. And second, are we looking for any commercial revenues to begin in this financial year or it will be next financial year?

So on the CDMO front, over the last quarter or so, we've filled out several RFQs and are engaging with those potential customers to kind of see when those opportunities could translate into business for us. And as we speak, there are few other RFQs that we are also filling out, which could be potential opportunities for us as well. And these are, again, more of contract manufacturing than contract development opportunities. So once if any of those opportunities does fructify, it could lead to potential revenue contribution and profitability improvements. But again, as we mentioned earlier, that these are opportunities which could take time because change switching facility from their existing to an alternate is usually a big decision when we specially talk about these large MNC companies. So earlier during our IPO times as well, we had kept this opportunity as a growth lever for a long term opportunity. However, we are hopeful that this could be from a short term to a medium-term opportunity. But since nothing has right now, we don't have clarity in terms of what the timelines could be, it will be difficult for us to give the same to you as well. but I would say that a lot of work is going towards this particular segment that we would want to build on.

Okay. Got it. And lastly, on the API division, are we seeing any pricing pressure in the top 5, top 7 products?

No, not really. So our prices have been stable across the products that we are commercial in.

Thank you. The next question is from the line of Raj Mehta from Wisdom Advisor. Please go ahead.

So I wanted to know that how do we see the Formulation business panning out? We have seen a good growth, so do we envisage the similar growth trajectory for coming years? And also, what will be the margin differential between API and Formulation business?

So we have growth levers in both API and formulation. So while in the API, we have the new Limbasi facility, which is operating at relatively low utilization. So we see a lot of growth opportunity in the API. Similarly, in the injectable side, we are seeing good traction in domestic market as well as in global markets for our oral solid dosage and this is particularly coming from the emerging markets along with the India market. And with the injectable plant also getting commercial by this financial year, it would also start contributing over the next 18 to 24 months. So given that there are growth levers in both these 2 segments, we see good growth opportunities in both segments. But as mentioned earlier, we expect that the split would remain similar like 80-20 with 20% formulation. So while the formulation business will see significant growth once we are commercializing new products in OSD as well as in the injectables, but the split would remain the same which is 80-20 is what we expect. In terms of the margin differential, there is a big delta between the fermentation APIs and the finished formulations and, I would say, it is primarily because if we talk about in fermentation space, we would be one of the very few players who have such a large portfolio and are addressing the global markets whereas in the Formulation, we have a number of players who we are competing with across different geographies. So definitely, because of that, one would see a very different margin profiling between the 2 segments.

And sir, on R&D side, what kind of molecules we are looking as we aim to commercialize some of them, so also what will be a typical addressable market for these molecules?

So the molecules that we are currently developing across the Oncology, Anti-infectives and Antifungal, and if I have to say, out of the 3, most of the products are in the Anti-Infective segment. And again, these are niche anti-infective products where we see very limited competition and they are highly complex niche products. So much of the work is going towards development of molecules across these 3 segments.

Thank you. The next question is from the line of Jigar Shah from Elevate research. Please go ahead.

Sir, I have a couple of questions on the exports front. We have seen a decline in the export business. Can you let us know which geography is seeing lower demand? And what will be our split of revenue from U.S. and rest of the world for exports business?

The split between the U.S. and rest of the world, export market is 17% and 33%. 33% in the rest of the world and 17% is from U.S. markets.

And just to add there that here we are just talking about direct sales to U.S. However, in terms of our deemed exports, this would be a much larger number because we do supply APIs to domestic players whose end market is the markets such as U.S. and Europe. But from our end, it would be difficult to quantify that number. But I would say that we make quite a large volumes of sales to companies who are targeting these regulated markets. Talking about the exports where we have seen a little bit of dip, Japan is one such market where we have seen some bit of dip, and this is again more so from a procurement perspective by some of the companies in Japan which we are seeing getting improved in the subsequent quarters, and that also is getting reflected in our sales to JV. So the rest of the market, again, being a 5% growth over the last quarter, 5% growth only over the last year. Sales have been relatively muted, but we do not see any significant challenges in terms of meeting our guidance over the next few quarters there.

Got it. Sir, second, can you let us know on your competition from domestic and global markets, can we be a tangible supplier to large pharma companies as a Tier I supplier?

So if we talk about competition, other than Concord, there is just one other company who's in the Fermentation segment where we compete with them on around 4 to 5 molecules. Of course, we've been gaining significant market share compared to them over the last several years. And I think based on our focus on this segment and our expertise, we continue to add more molecules within the different therapeutic segments that we operate in. And that gives a lot of comfort and confidence to our customers. So from India perspective, that's the only competition that we see for the regulated markets. And from a global perspective, this segment which is fermentation, we are seeing a lot of consolidation happening. So more and more companies are shutting down, which gives us an opportunity to make more gains and inroads into gaining market shares for our productsand it also gives us an opportunity to evaluate new products where we see less competition, which are more complex niche products, which we can add into our portfolio. So the competition is actually shrinking globally, and that creates a lot of opportunity for us.

Ladies and gentlemen, this was the last question. I now hand over the conference to the management for the closing comments.

So thank you, everyone, for joining on our quarter 1 FY '25 earnings call. We hope we have been able to address all your queries. For any further information, please get in touch with us or SGA, our Investor Relations Advisors. Thank you once again. Have a good evening.

Thank you. On behalf of Concord Biotech, we conclude this conference. Thank you for joining us and you may now disconnect your lines.