The first question is from the line of Vivek Patel from Ficom Family Office.

I just had a quick question on bempedoic acid. I know we recently launched it. How is the molecule performing? What are the revenues like? And the overall competitive landscape of that molecule, if you could expand?

Bempedoic acid is a new product. So it is still, I would say, just launched and some initial trial qualities have gone. So we have not closed any commercial deals with that. So maybe in the coming 2 to 3 quarters, we'll be able to give you some good numbers. But this product was not approved in the U.S. market for a long time. And Indian market, of course, is still very far away. But this is a very promising product. I do not have the overall details, the details about it since this is a relatively new launch.

We will take the next question from the line of Saurabh from Insight Trend.

Sir, can you throw color on the margin? Your margin has not been constantly improving. Can you throw me the color on this?

Margins, particularly, I would say, on the different areas, different categories, they h ave been varying according to the time and situation because of the -- of course, earlier time, the pre - COVID level was almost stable. COVID level we were very high in FY '23, everything fell because of the drop in prices. And then last year, there was an increase in prices of raw material from China. I would say, particularly on the API front, there have been fluctuations. And on the devices, we have been growing -- increasing and increasing because we are doing all backward integration. And on the finished dosage and OTC, so in the finished dosage, we had some investment phase for 3, 4 years where we are installing new teams and hiring new -- opening new territories. So now last year, bad phase is over, and we are positive on both finished dosage and over -the- counter drugs. So there's no worry on the overall margin story, except that the global fluctuations and more particularly, I would say, the China factor is a concern. Otherwise, from a selling point of view, even in India market, as I was telling that we are preferring more export because the India market is not very profitable because it is solely dependent on China import prices. As China import prices increased, and we do not get a relevant proportionate increase in the prices in India. So we try to avoid that market. Otherwise, we are pretty comfortable on the margin front.

As I shared earlier that we do not have much exposure in the U.S. market in the finished dosage. So whatever Mr. Trump is trying to do, he's trying to more for the prescription drugs, wh ich mostly are under patent. So once the prescription drug is under patent has expires, then it comes to generics. So thankfully, we are on the other side of the river. So we are the generic player. We give them products at almost 10% of the innovator's price. So there is no way that we would be effective. Rather, you might have seen, and I shared in my commentary earlier, that Mr. Trump has perhaps, I'm just using a word perhaps Mr. Trump has perhaps learned that it's not India, which is charging high, an d it's not because of India, your prices are high. It's because of these multinationals and patented drugs, they charge millions and billions of dollars for R&D and other things. And they are the ones who have to be, I would say, punished, not India and I would say, any other country who is giving generic supplies. So Mr. Trump had been perhaps very vocal about it, and we had already levied 59% cut in the prices of the patented drug, prescription drugs. So we are on the generic side, we do not have anything to loose. And as a company, we are not much affected because our U.S. exposure is only 6% to 7%.

We take the next question from the line of Raaj, Arjav Partners.

Sir, overall at a company level for FY '26 and FY '27, how much growth are we anticipating?

We usually do not give any guidance, but we are working between 10% to 15%.

10% to 15% over at the company level?

At a company level. I want to call it a guidance because as per the SEBI norm, we are not supposed to share. But in general, we are saying.

Yes. And overall, are we expecting an improvement in the EBITDA? Or are we expecting an EBITDA to stabilize at this level?

Yes, Raaj, basically, EBITDA is a function of the product mix. Our API business is very strong and stable, and we continue focusing on the export, our EBITDA level in the export would increase. And of course, it has to increase with the overall capacity increase also. O ur capacity increase is coming. So API will be seein g increase in the EBITDA level. Finished dosage, as we shared earlier, is always at a higher margin that always has almost 70% gross margin as against 30% to 40% gross margin in case of API. So finished dosage is a higher gross margin business. So EBITDA would increase there also. Initially, it may have some investment phase. So it may for 1 or 2 years, we may have to invest in the teams. But long term going, long term, EBITDA would increase. And third, of course, is medical devices, which has been consist ently increasing because of the large volume, because of the backward integration. So where we are already at higher teens. We are already between 15% to 17% in medical devices. So the whole purpose and object is to increase EBITDA. That's how we are working.

We'll take the next question from the line of Avnish Burman from Vaikarya.

Sushil, can you please explain the reason for a sharp sequential as well as Y-o-Y decline in gross margins? That is one. And also, I saw that the other expenses has also materially fallen down. I think it's because of selling -- the selling and distribution expenses. So can you please explain that?

Of course, my CFO, Ajay is on the call, but he will share with you the expenses part. But on the gross margin, Avnish, year as a whole, so we are just only 1% or 2% here and there. But on the expenses front, Ajay can explain. But on the EBITDA front, so we have improved. On the PAT front, we have improved. So Ajay, can you add some light on the gross margin and on the expenses side?

Yes. Gross margin, we have already mentioned that there is a bit of price falling. It has affected our EBITDA margin in the API business. As far as expenses are concerned, definitely, we are keeping our expenses under control, keeping in view of our lower sales realization. And secondly, other expenses has also come down. We explained our note as well because there was -- early rent was charged to expense. Now as per AS 116, so we had amortized it. So th at part from other expenses that has gone to the depreciation. So net -net, there is an impact of INR116 lakh PAT. But overall, it is only headline changes there. But on the PAT level, so a difference of only INR1.16 crores. So that is how all about expenses, selling expenses as well as other expenses. This primarily contains rent. Otherwise, we are keeping a tight leash on administrative expenses and other things, keeping in view the whatever margin we are able to realize from the trade primarily the API a s well as we are increasing our revenue with the Rx and OTC business. So as the revenue increases, so there is a proportion decrease in expenses. So that's overall we can say that the expenses are coming down. And moving further, as you were asking about E BITDA as well. So expenses will come down and EBITDA may increase in the coming times as well.

I understand. So basically, that also explains a sharp increase in depreciation on a sequential basis.

Yes.

Some of the expenses, which were selling have been taken out from the other expenses and...

There is a new accounting standard, which says that lease rentals, any lease, whether office lease, house lease, whatever, any lease rental you have, that should be treated not this way, it should be treated this way. We never found any logic to it for 2 years, but our internal...

But net-net, there is hardly any impact of only INR1.16 crores.

No, no. I understand. On the PAT, there will not be any impact. But if you look at -- if you just compare the sequential numbers on a like-to-like basis, which means if you like kind of subtract the depreciation from that amount and add back, it looks that the compression in EBITDA is sharper than what has been reported, maybe because of the price pressures in the API business.

Right. We already mentioned that because we are doing more of production in API and price is falling down. So Chairman has already explained. So this is the typical of the API business. But we understand that it should stabilize because there is some certain level, this price can come down. So we should see that this fiscal '26 EBITDA margin and the gross margin should improve.

So Sushil ji, you mentioned in the slide, and it was a great slide to explain how the API prices have been coming, your realizations have been coming down over the last 2 years. What are the signs we should look for to basically assess, when this will bottom out because it can't just keep happening like that, right? So at some point in time, it will bottom out and will support your margins or maybe help you improve them. But what are the green shoots that we should look out in terms of finding out when that might happen?

Avnish, I would say that finding out when is the same question what we have in the market every day has the bottom come, but I would say not like this here. I think we are all sitting in a commercial world. There's a certain level below which I cannot go because I don't cover my expenses. And there is a certain level of, I would say, comfort which our vendor has got, we stop buying from the vendor, so his factory will stop. So ultimately, the equilibrium comes. If I stop buying raw material because I can't sell, so we are 70% of this revenue. So they also come back to us, okay, what price why are you ready to buy. But if they say, okay, we don't want to reduce the price, our prices are, this is what we are. So I would say this is all a practical situation. If prices go so low, then we stop production, we stop quoting that product. Ultimately, it's a demand and supply. Ultimately, when demand come, prices go up. But I think last 2 years were very in teresting to note that China had collected lot of huge inventories during FY '22, '23. So they were sitting on the inventory. They had to sell up those inventories at any cost. They had almost put up a flat sales that when we were visiting their offices and warehouses, they were just showing the warehouses, okay, pick up anything you tell, you give the price. We are ready to give. But now they have liquidated everything. Now they are coming back with a normal costing. And that's what I was telling that in the last 2 years, the prices have come down 24%. Now our raw material prices have gone up. So obviously, sale prices have not come down. But our Indian customers are still not accepting the price fall. That's where we are in wait and watch. And even if we have to compromise for 1 or 2 months or even 1 or 2 quarters in the revenue numbers, we will do, but we will not go down a certain level. So I would say in that way, if we say we are almost at the bottom now. We are at the bottom, I would say.

As there are no further questions, I would now like to hand the conference over to the management for closing comments.

Now I would say good afternoon, everybody, again. So since we have given a detailed commentary this year, I hope there ar e no more questions left. In the case there are any good questions, you please apply on the e-mail. And looking at the overall environment, I would say stay safe, stay away from gossips and stay away from rumours. So we are confident of our political situation. We are confident about our army, whatever good, bad, ugly happens in the news and borders it fine, but we are very safe in the hands of our great army and great team of leadership. Thank you very much, guys. Stay safe.

Okay, and good day.

On behalf of Motilal Oswal Financial Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.