The first question is from the line of Saion Mukherjee from Nomura. Please go ahead.

Thanks for taking my question. Just wanted to check on Cenexi. So from the current level to breakeven to high teens, what's the timeline and please give some more granular details on the key milestones that you should look out for as far as EBITDA margin improvement is concerned with the timelines please?

So, our goal to reach high -teen margins is a mid to long -term goal. And there are a number of actions that we have to take. The first one, as you've seen in the presentation is to fix our operational issues and improve our operational results. The second one is to speed up our tech transfers to our HSE site in France. And of course, continue on all the business development actions that have already been initiated to gain new customers. And for that, we need, of course, to invest in new capex to increase our capacity.

How should we think about Cenexi EBITDA for next fiscal and the year after that and I just want to understand what’s the mid- to long-term timeline means here. if you can guide for FY '25 and '26 on the margins?

Question on the base business, We have seen a very strong recovery here in the U.S. and other markets growing EBITDA margin getting to 37%, how should we think about this number going forward. We're seeing good traction. Maybe you will have more products on the partnerships coming in? How should we think about EBITDA margin, gross margins as the business kind of stabilizes and goes from here?

Yes. I think the pricing wise it's kind of stabilized. If you see year -on-year, its price is almost same, I would say, 1% negative, but it's almost same. But with the relaunches what we have done, what we have lost last year, everything got re -launched, so that kind of brought back the volumes. So, the combination of our new product launches and relaunches which is 17% that has got back the numbers what we have. In addition to that, if you look at our top 10 products, almost 8 products have grown substantially, including Enoxaparin we got the contracts back what we have lost earlier. We're aggressively pricing and w e did several things to work on the cost , So, it could get a few major contracts back. So the growth on those are almost like 2x to 3x. And we were, of course, the Enoxaparin business, we are always saying it was a temporary, they were not taking up. So, to see what we have done in the last 2 quarters and the first 2 quarters is completely different. And so, we're headed back to what we've been guiding the market in terms of volumes in 1 9 or 20 million syringes and we're also looking at a bit higher opportunities as well. So, a lot of products are took actually what the market share what we had earlier and become strong. So, kind of confident on those because we kind of got back the GPO contracts. And the margins are also kind of stabilized the regulatory landscape, what's in the market? So that also helped us in some of oncology products. We've got a good market share, products like platins so that way, the base business is improving. Yes, I would say it's more stabilized now.

So, sir, now the run rate that you have in the base business in the U.S. So, is that stable? How much can it grow? And on top of that you will have new launches, if we can just talk about the headroom that's available with all the disruptions and your recovery from what we have seen in this quarter?

So, we kind of guided last time also. I think we still want to stick to that about 14 to 15% growth rate on an annual basis, combination of the base and the new launches for them and because now it's a larger base. So, we want to stick to that.

Okay. So just I can ask one last question. What is the milestone and profit share numbers that you can share for fourth quarter and for full year?

It's in the similar range, 2%, 3% this way that way. What you have to understand, we're also doing now some complex products. So, milestones will be a little higher than earlier. So probably a couple of percentage. But otherwise, on an annual basis, still it's in similar range.

Congratulations to the management for good set of numbers. So, the first question I have is related to FY '25 outlook. Like this year, we are seeing a good amount of contribution coming in from the new product launches, are we expected to replenish the similar kind of sales from the new products next year? Because I expect there would be some price erosion happening, which could be substantial for the new products which have been launched last year. And the second question I have related to this is, generally, when we have CRAMS players supplying the products, we see the flu ctuate of volatility in the contracts. So, if we have seen a good amount of ramp-up this year, do you expect that similar kind of contracts to get repeated next year? Or you think the inventory adjustment could happen, that could brag the growth a bit in next year?

Yes. So, when you're saying new launches, I did mention that a lot of these are relaunches with over 30 plus molecules relaunched what we lost last year because of the Athenex and Alvogen exit in the market. So that got relaunched. So kind of got back the product volumes what we lost. So, it's not like these are new products where the pricing erosion will happen because it's already like very generic products where it's already kind of settled. So new products that we launched in terms of the entire business what we have grown, does not impact that much in the scheme of things in terms of new launches, how much it has contributed to the growth. The other question about the contracts, a lot of contracts what we signed recently; it is the second part of the year also. So, if you actually annualize it, the volumes have increased because we signed some in last quarter, some in the previous quarter also. So, it's actually not the annualized numbers. That should have stabilized as you said, initially, there will be a higher offtake because they also fill the pipeline. But we need to consider that if you see the numbers, it's going up from third quarter to fourth quarter. So, most of the these contracts are signed and getting launched those quarters as well. So even now some are still not yet launched. So that way, once you annualize it, I think it should balance the whatever you're talking about the initial uptake.

Sure. The other question I have is on the biologics. It's been while since we had acquired this unit, what steps we have taken to ramp up our position in this space and how we can improve the utilization of this unit?

Yes, the efforts are there, small projects we are doing, but biologics normally takes a longer time compared to others. And in last one year, so many headwinds on different aspects. The focus was how to get the base business back and lot of efforts went into that in terms of how we need to reduce our costs and be more competitive. And also, the exact situation in the US a lot of funding has stopped. And whenever you have a new asset, especially guys entering the biologic space, you need to work with the smaller development companies where the funding has stopped. So, efforts are there and continued discussions are happening. So that will be, I would say, it's a slow process, but we have to stay there because, on the CDMO side, that's the area we want to grow in the near future. So currently, it's more on technical side and skill development of people strengthening that's what we are focusing on. And I think that's once you have that, everything else will follow.

Next question is from the line of Bino from Elara Capital.

A couple of questions. One, could you comment a bit on the opportunity in this Eribulin product as I see you are the only approved generic in the market? Do you expect competition near term?

It's around $170 million, $180 million product, and we are the first one to launch. And we just launched last month, so we have to see how the market behaves, because a couple of people have filed it. We don’t know the status of approvals yet and we are not aware what stage they are in. But generally, when you are the first in line you tend to get the contract. So, we're just hoping good results from the market. But just to give you a number, it's too early, I would say.

Okay. So, a normal assumption would be over the next 6 to 18 months you may see one or two more entrants in the market?

I can't really comment on somebody's filing, but you can see in the next 6 months or 12 months, I'm not sure.

Understood. Second, if I remember last year, there was a plant shutdown in Cenexi during summer holidays. Is that a routine thing? Or will that happen this year as well? And which months would that be?

I think I did mention in the last call that we are trying to invest in a new line. So the plan is that we're pushing the supplier to get that line before that shutdown happens so that we can utilize that time for the installation of the line. So that once these lines get added, then we can have additional capacity where today we're struggling. Today, the issue is not orders. We have EUR20 million to EUR25 million orders of backlog and the consent is the capacity. So I would say that's the steps we are taking so that we can install this new line in no time.

Okay. So, shutdown is happening? Which months would that be?

That's August.

That's August. Okay. And last, just one question on tax rate. This year, the overall consolidated tax rate has come to 35%. It's a big jump over the last few years. So, the consolidated tax rate, we are looking forward to in the next 2 or 3 years?

So currently, the 35% is because there is no negative tax or deferred tax asset created at Cenexi level because of the losses. However, the normal tax rate at Cenexi is 27% in France. So, the time it starts to be at PBT positive level, this tax rate which really come down.

Sir, my first question is on US revenue medium-term growth. So, when we think about the ramp- up of US base from here, how do we look at it in terms of drivers? How much of it would come from new product launches versus adding partners in the existing product?

Our large base, we still see 3% to 4% coming from pure new launches and some from the relaunches. So normally, it's around 10% to 11% is the growth we get from the launches, combination of relaunches and purely new products.

Okay. So, the other proportion is, is it basically expanding market share from the current partners itself? Or do we see scope of adding new partners in the products that we have?

It's a combination of both. So basically, you want to increase your market share when you add up both sides. So it's a combination of both, but mostly getting into some contracted situations just like I said, some we have entered a large product into the c ontract, which gets annualized. The growth will come from those markets also. So, whenever these GPO contracts are opening up, we are focusing on how to get those contracts.

Okay. Sir, my next question is on Cenexi. So, this quarter, we have seen higher costs for the business. So, going ahead, how do we see the cost from this level? Do we expect to incur additional costs over this? Or can we see this as the base?

So, this cost related to typically maintenance will come down. And we expect there would be a lower cost base in actual terms also, as we complete our expansion, and the volume growth and fixed cost gets more utilized. So, on a percentage basis and as well as absolute term, we would expect the cost to be lower than today. Of course, there will be certain inflation to counter that.

Sir, this would start reflecting from the next quarter as well? Or do you expect this to happen a few more quarters down the line?

It will take a few more quarters because as Mr. Sadu just explaining that there is going to be a new line, the high-speed line, which is being installed in September quarter. And post that, we would expect the volume to grow.

Okay. So, the absolute cost as well will happen after the September quarter? Or is it the revenue ramp-up that you are saying will happen after the September quarter?

No. So, September quarter, the installation will start and then it will take a quarter or so to start the commercial and ramp up to happen.

So, we are expecting an impact to Q1 or Q2 next year, depending on how the ramp-up goes.

Next question is from the line of Shyam Srinivasan from Goldman Sachs.

First one is on Cenexi. For the 11 months, I think in euro terms, we have done a revenue of Euro 166 million, I’m just annualizing it for the 12 month s, it’s around 180 million and maybe I ’m wrong. But this used to be a 200 million run rate. So is the 20 million, is that the lost opportunity that we have seen because of some of the challenges. And for the quarter, I think it came at EUR40 million. So just if you could help us quantify what is the missing part that should have rightly come through this quarter and may actually flow through potential in the future?

So, like you mentioned, about 20 million is the backlog orders we have in other than the supply because of the operational issues we are facing. So that itself should cover the difference what you mentioned. So, it’s a slow ramp -up of EUR 40 million could be the base and we ’ll see a slow ramp-up of the revenue. And any revenue add, if you ’re seeing the gross margin of 77%, it just slows down to the bottom line. So, the initial focus now is how to make it more efficient line so that we also wi ll increase that we can make more supplies th en the top line increases automatically flows down and then work on the new lines in parallel. So, we have unlike Gland where we have we put up a new line, we have space and then we remove the line with transfer products. We don ’t have that flexibility there. We have to work on. because the capacity is 100% utilized today, several lines where the demand is high. So, we have to partially take some actions so that it did not impact the running business. At the same time, install lines and newer machinery so that it helps to grow the business. So, it’s a little different volume compared to what we do here.

Sorry, I’m unable to understand. So, I get the 20 million order backlog, but should we look at quarter 1, quarter 2, quarter 3, when we look next fiscal for Cenexi, is it the 40 million run rate is what we think we can do or there’s a ramp at some point of time?

It will ramp up slowly. It could be some it could be from Euro 40 million, it might go to 43 and 45, something like that.

Yes. And at what time, when we reach the 50 million run rate quarterly, I'm just sorry, I'm looking at historical numbers, that's when we reached whatever the pre -acquisition run rate of over EUR200 million is when we'll potentially get the EBITDA margin t o be positive. Would that be fair?

Around 3 quarters to get to that 50 million quarter number.

Okay. And at that pace, at 50 million, we should be having positive EBITDA. I'm not asking you to quantify any specific margin number. But do you think that is where?

Yes, that's correct.

Okay. Second question is just on the whole shortages scenario in the US. Some of the data external IQVIA data seems to suggest it's that a multi -decadal high. So, what are some of the benefits that we may have accrued? Do we benefit from it? In the past, Mr. Sadu you've told us it's very cyclical. So, it may come some years, goes away some years. But do you think, given the focus on trying to reduce shortages, could this be a sustainable advantage longer than usual? And when we look at the margins of 37% for the quarter. Is there an element of shortages that is helping us reach there?

I wonder maybe shortages at least for this quarter which has helped, that this shortage has been happening for many years and with more regulatory issues in the recent past that have increased. It's very difficult to say when it will go away and on the oncology side, we did get benefit out of it. Earlier, we were not competitive enough to compete in that space. But because of the shortages, we did get benefit of certain products for sure. But timing -wise, I can't really say how long this will stay. But historically, consistently you saw the shortage s in the US. market. And that's a combination of how many people want to actually sell this product because the margins are low and being only injectable we stay there.

Thank you and all the best. Thank you.

Thank you very much. As there are no further questions, I'll now hand it back to Ankit sir, for closing comments.

Thank you, everyone, for joining today. We appreciate your participation. If there are some questions that are not still answered, you can reach out to us. Thank you, once again, looking forward to host you again next quarter.

Thank you very much. On behalf of Gland Pharma, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you. This transcript is provided without express or implied warranties of any kind and should be read in conjunction with the accompanying materials published by the company. The information contained in the transcript is a textual representation of the company's event and while efforts are made to provide an accurate transcription, there may be material errors, omissions, or inaccuracies in the reporting of the substance of the event. The transcript has been edited wherever required for clarity, correctness of data, or transcription error. The company takes no responsibility of such errors, although an effort has been made to ensure high level of accuracy.