Aarti Drugs Limited (AARTIDRUGS.NS) Q2 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to the Q2 and H1 FY '26 Earnings Conference Call of Aarti Drugs Limited. [Operator Instructions] Please note that this conference is being recorded. Before we begin, a brief disclaimer. 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 date of this call. These statements are not the guarantees of future performances and it may involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Adhish Patil, COO and CFO from Aarti Drugs Limited. Thank you and over to you, sir.

Thank you. Good morning to all stakeholders and thank you for joining us today for Aarti Drugs Q2 and H1 FY '26 Earnings Conference Call. Joining me on the call today are Mr. Harshit Savla, our Joint Managing Director; Harit Shah, Whole-Time Director, Aarti Drugs Limited; Mr. Vishwa Savla, Managing Director, Pinnacle Life Sciences; and SGA, our Investor Relations Advisers. I hope you have had the opportunity to view our financial results and investor presentation for the quarter and the half year ended 30th September 2025, which are available on the stock exchanges and our website. Let me begin with some notable operational and business highlights before moving to the financial highlights. Q2 FY '26 marked continued progress on our strategic priorities of backward integration, capacity expansion and strengthening cost competitiveness even as the broader industry witnessed soft domestic demand trends, particularly in the antibiotic category. Export demand, however, remained robust offsetting the weakness in the domestic market and contributing to improvement in overall margin performance. To begin with, our new manufacturing facility at Sayakha, Gujarat commenced commercial production on September 4, 2025 and is currently in its early operational phase. This facility manufactures dimethylamine, monomethylamine, triethylamine and their derivatives; key intermediates used in the production of various downstream APIs and specialty chemicals, including antidiabetic products such as metformin. The facility has already commenced operations and achieved expected performance benchmarks during initial ramp-up. Around 40%, 50% of captive requirements are now being met internally and once the facility reaches full utilization by the end of FY '26, we expect to achieve 100% captive consumption for our antidiabetic series. The MMA and TMA output are being monetized through external sales, further diversifying our revenue mix. As this facility stabilizes, it will structurally enhance raw material security, improve cost efficiency and contribute meaningfully to margin expansion over the medium term. The plant is expected to scale up to fulfill the entire captive demand over next 6 to 12 months. At present, production is primarily catering to domestic demand. However, we aim to expand into export markets as volume scale and opportunities rise. This facility marks a significant milestone in our backward integration journey aimed at reducing external raw material dependency, enhancing supply chain reliability and improving long-term margin revenue. Looking ahead, our focus will remain on ramping up capacity utilization at Sayakha and stabilizing production of new intermediates, particularly those supporting our antidiabetic portfolio. This is expected to bring structural improvement in cost efficiency and gross margin stability in the coming quarters. Moving to the salicylic acid chain. Our Tarapur facility continues to progress through its stabilization phase with consistent improvement in operational performance and capacity ramp-up. Production visibility is improving with 300 tonnes per month achievable in the near term and a targeted ramp-up to 500 tonnes per month for Q4 FY '26. We expect the plant to turn EBITDA positive once it crosses around 800 tonnes per month. This vertical will also supply our upcoming 400 tonnes per month salicylic line enabling downstream integration, better overhead absorption and improved margin stability. Together, these projects aim to convert India's import dependence into domestic supply with the salicylic chain emerging as a key value driver. Moving back to our API segment. We are also witnessing early signs of stability in global API pricing, which should support both volume growth and price recovery in H2 FY '26. On the regulatory and compliance front, we are in the process to receive EU certifications for several key products from our large scale plants allowing us to shift EU registered products to lower cost facilities and thereby expand export margins. We are targeting metformin filings in the U.S. market post FY '26 once ongoing validation processes are completed. An important milestone in our plan to reenter regulated markets with higher margin products. We are also advancing on our BIS standard approval, which will support domestic competitiveness and strengthen import substitution efforts. During the quarter, we also received a voluntary closure direction from the Maharashtra Pollution Control Board for the chloro-sulphonation process at our Tarapur T-150 unit following an isolated HCl gas leakage incident on September 8, 2025. Importantly, no injuries or casualties were reported. The closure was a precautionary measure under applicable environmental regulations and we have already completed a comprehensive safety audit and are working closely with the relevant authorities to secure the required approvals. This has no material financial or operational impact as we have adequate inventory and alternate sourcing arrangement in place and all other processes at the Tarapur unit continue to operate normally. Additionally, CRISIL ESG ratings assigned an independent rating of CRISIL ESG 52 to Aarti Drugs reflecting the company's steady progress in environmental management, governance standards and social responsibility. Our broader ESG road map remains focused on energy transition to renewable sources, waste reduction and safety enhancement. The upcoming solar project being developed through our JV with Prozeal Green Power is an important step towards reducing our power cost and carbon footprint while supporting our long-term sustainability commitments. Now let's discuss some consolidated financials for Q2 FY '26. Revenue stood at INR 652.9 crores as compared to INR 599.8 crores in Q2 FY '25 reflecting a growth of 9% Y-o-Y driven by favorable export volumes. EBITDA stood at INR 84.4 crores versus INR 68.5 crores in Q2 FY '25, up 23% year-on-year with EBITDA margin at 12.9% versus 11.4% in Q2 FY '25, an expansion of 150 basis points. PAT stood at INR 45.2 crores as compared to INR 35 crores in Q2 FY '25, up 29% year-on-year translating to a PAT margin of 6.9% versus 5.8% last year, an improvement of 110 basis points. The CapEx incurred during Q2 FY '26 was approximately INR 45.6 crores. For H1 FY '26, revenue stood at INR 1,243.7 crores as compared to INR 1,156.3 crores in H1 FY '25 reflecting a growth of 8% year-on-year. EBITDA stood at INR 158.8 crores versus INR 134.6 crores in H1 FY '25, up 18% year-on-year with EBITDA margin at 12.8% versus 11.6% in H1 FY '25, an expansion of 120 basis points. PAT stood at INR 99.1 crores as compared to INR 68.3 crores in Q2 FY '25, up 45% year-on-year translating to a PAT margin of 8% versus 5.9% last year, an improvement of 210 basis points. Total debt during H1 FY '26 also reduced by INR 41 crores to INR 571 crores in total leading to reduction in our finance cost and a record low debt-to-equity ratio of 0.39. With respect to stand-alone business for Q2 FY '26 revenue stood at INR 578.9 crores versus INR 543.1 crores in Q2 FY '25, growth of 7% year-on-year basis. Stand-alone business contributed 89% to the consolidated revenue. 58% of the stand-alone revenue came from domestic market and 42% from the export market. Within the API business, the antibiotic therapeutic category contributed 36.1%, antidiabetic around 15.3% , antiprotozoal 18.8%, anti-inflammatory 11.8%, antifungal 11.7% and the rest contributed 6.4% to total API sales. Let's discuss about Formulation segment. Revenues from formulations stood at INR 82.4 crores in Q2 FY '26 compared to INR 65.6 crores in Q2 FY '25, up 26% year-on-year basis. Exports contributed 68% to this revenue. For H1 FY '26, formulations revenue was INR 162.8 crores compared to INR 136.6 crores in H1 FY '25, up 19% with exports accounting for 63% of total formulation sales. With that, I'd now like to open the floor for questions. Thank you.

[Operator Instructions] The first question is from the line of Rehan Saiyyed from Trinetra Asset Managers.

So my first question is just understanding on your R&D pipeline commercialization timeline in the API. Sir, you have mentioned developing complex APIs and formulations for regulated markets like the U.S. and Europe. So could you please highlight 2 or 3 key products expected to be commercialized over the next 12 to 18 months and the potential contribution to revenue that we are expecting?

For the complex U.S. and other regulatory markets products, I would like to ask Vishwa to highlight few of our R&D products in formulations.

Yes. So we will be commercializing first product in U.S. in this quarter, which is bicalutamide and we are also expecting to commercialize a few antidiabetic products in Europe, U.K. and other regulated markets ex U.S. between the next 6 to 9 months. So these new products combined should give us an additional top line of anywhere between INR 60 crores to INR 70 crores.

I would like to add up on that. Definitely this was a near term. We have a long pipeline for next 2 to 3 years. And as far as our stand-alone segment is concerned, so there we are in the process of formulating a new product portfolio for regulatory as well as for nonregulatory markets in the API segment, but this is not restricted to API segment. We are also focusing on the derivatives of the 2 main greenfield projects, which we have started. And we would try to identify few key derivative products, large derivative products, from these 2 chemistries.

Okay. Just a bit of follow-up on this only on the domestic side. So like while export demand remains strong. So like what we are seeing in the domestic side especially if antibiotics continue to stay soft? Are you witnessing any recovery trend in the domestic API market [indiscernible]?

So as far as overall demand is concerned, it is fine. But in the antibiotic category, we did face issues in a few of the products. Now Q3 is typically a lean quarter anyways for the acute therapy. So we hope that from Q4 onwards, there should be some slight pickup in the domestic demand. But we'll come to know within 2 to 3 months.

Okay. And last 1 bookkeeping question. [indiscernible] So like is there any -- you have to put any margin guidance going forward for EBITDA margin?

Yes. So right now on a stand-alone basis, we slightly crossed 13% and pre-COVID levels, we were doing 15% to 16%. No doubt the industry has changed, the markets have changed , the competitors have changed over the past so many years. But definitely we have certain drivers which we are working on, which can help us to take the EBITDA margins on a consolidated basis back to 15%. It will take some time, maybe sequentially quarter-on-quarter, we hope to see continuous improvements in these margins.

The next question is from the line of Pramod Dangi from  Ratnatrayi Investment Management LLP.

Congratulations for good set of numbers in terms of recovery in the margin. My question is on the 2 fronts.

Pramod, I'm not able to hear you clearly.

Yes. So I'm just saying on the pricing side, what we are seeing today, is that price bottomed out or year-on-year they are flat, they are going up quarter-on-quarter and year-on-year on the API side? That is first. Second is what was the volume growth in the API this quarter?

Okay. So year-on-year basis if you talk about the volume growth so domestic was quite flat frankly speaking because of lackluster demand in antibiotic category. In fact there was slight degrowth of around couple of percent, but export did fantastic means we had more than 30% volume growth in export sales. So it got compensated. So overall, we had around 9.33% volume growth in the API segment in this quarter.

Okay. So that means 2% around negative contribution from the pricing if I look at from the 7% and 9%. And second, you said that our business has changed. But at the same time [Audio Gap], we have the new specialty product. So in terms of the margin, if I look at 12 months of the or 18 months of the year, should we be crossing the [Audio Gap]?

Yes. As far as margins are concerned so on a stand-alone basis, we just crossed 13% not too much, just you can say 13%. So couple of percent we still see. No doubt we are still absorbing around INR 3.5 crores of losses in salicylic acid plus we just commercialized our Sayakha plant for just 1 month and initially always the capacity utilization would be low and that expenses also we have absorbed. So in spite of doing all this, the margin is 13%. So we are quite confident that once we get all these things in order, on a quarter-on-quarter basis sequentially our margins should steadily keep on increasing and our ultimate target should be somewhere between 15% to 16%.

The line for the participant is disconnected. The next question is from the line of Candice Pereira from Dolat Capital.

So I can see that the other income is very low compared to last year. So will it be in this range only for the second half as well?

Okay. Frankly speaking, I cannot comment on that. But more or less if you add up the other income for the entire year, it should be steady. Sometimes it might shift from one quarter to another. For the entire year it should be steady, but I can't comment. I don't have the number right now with me, unfortunately.

Okay. And any tax rate guidance for FY '26 and '27?

Yes. So our tax rate will continue to be in that means everything inclusive around 25% tax rate. So we have already gone into that tax regime. This year for the first quarter, we had some tax refunds from the previous years and that is the reason why for the first quarter, our tax rate was so low. And we are expecting a little bit more refund, but mostly that should be completed in this financial year only in Q3, Q4.

Okay. So that will be in the range of 25%, correct?

But for the next year, it should be ideally in the range of 25%.

Okay. For next year so that is FY '27?

FY '27.

Okay. And the overall revenue guidance range you're providing?

Yes. Actually, we had targeted in early teens in terms of volume growth when we started the year. Definitely first 2 quarters -- I mean first quarter, the demand was quite low what we saw. In second quarter, the export demand picked up really well, but domestic demand still suffered a little bit mainly on the account of antibiotic therapy. So right now for this quarter, we made around 6% value growth. For H2, we will definitely aim towards high single-digit value growth for H2 FY '26.

The next question is from the line of Sanil Jain from AMBIT Capital.

Congratulations on a good set of numbers. I just have a couple of questions regarding the backward integration. So how much is the capacity that you have added for this backward integration?

Okay. So the total methylamine plant is around 60 TPD and we can scale it up to 80 TPD as well. That is the methylamine capacity.

And what is the total CapEx amount that is spent on this CapEx and what can be the asset turn?

Asset turn? So the thing is total means roughly, just to give a ballpark figure. We had told earlier that for both our greenfield projects, we had spent somewhere around INR 200 crores each. But obviously not everything in a greenfield project goes towards a single product. There are a lot of common amenities which are developed as well. And for both the greenfield projects, this is the Phase 1 of the investments. So still land parcel is little empty and we can still go for Phase 2 investments, which will be at much lower CapEx, but with much higher asset turn. So for the first phase, I would say the asset turn will not be great. It will be in the range of 1 to 1.5. But the reason for that is it is first phase. So lot of common facilities are being constructed for which we require heavy CapEx in the Phase 1.

Okay. Understood. And will this capacity be fully utilized for captive consumption or some things will be sold outside?

So our main idea was to go for captive consumption. But this chemistry has side chain products, which we will need to sell outside.

Okay. So can you give a ballpark range how much will be captively consumed and how much will be sold in?

Yes, yes. Ballpark would be roughly [ 50% to 50% ] we will try to consume captively.

The next question is from the line of Jainam Ghelani from Svan Investments.

In our earlier call, you had mentioned that we should be growing by 15% CAGR for FY '26 and FY '27 and now we are saying that around FY '26 revenue growth should be in the single digit. So do we expect that FY '27 to be in the higher 20% range and maintain our guidance or we expect to decrease our guidance for the year?

Yes, interesting question. So the thing is the negative rate variance is now behind us. So there won't be any negative rate variance. So going forward if I compare FY '26 -- FY '27 versus FY '26, then we definitely feel that we can try to hit those midteens of volume growth because on the account of newer products, newer capacities which are installed. So it does put us in a very favorable position to achieve that kind of growth if everything goes well. The key challenge will remain would be the ramp-up of salicylic acid. If that happens very quickly and very successfully, then it will be that much easier to achieve those numbers. Along with that, the Sayakha project is doing pretty well, very well. The customer acceptance of the product is good. In fact even for salicylic, recently in last 2, 3 months we were able to sell quite a bit of product. So the market acceptance of the product quality is now very good. Now it is just that you require multiple batteries for a bigger tonnage plant and we had done modifications. Because still under scale up, we had done some modification in 1 or 2 batteries and tried to check the quality and we have achieved that. Now that it is achieved, what we foresee is -- now that we have achieved the quality so we are just putting up the batteries and setting up the plant. So definitely FY '27 looks promising. If everything goes well, then we can try for 15% to 20% growth for next year.

So what would be the utilization that we are aiming for the salicylic acid? Like if we were to meet our 15%, 20% growth aspirations, what would be the desired utilization for it?

So more than means I would say, let's say, what our total potential was earlier what we had thought of. As compared to that, it should be at least 60% utilization roughly.

Okay. And sir, any year by which we expect our 15% to 16% margin guidance that can be achieved?

Which year you're asking?

So as you were guiding earlier that 15% to 16% margins can be achieved. So which year do you think that it can be FY '27 or FY '28?

So the thing is if we achieved all the volumes in FY '27 as promised, then at least towards the end of FY '27 we should start hitting that run rate of 15%. That is what we target internally. The rest depends on the market conditions. But then we can target 15% by the end of FY '27. I'm not talking about the entire FY '27, but let's say, H2 or something like that.

The next question is from the line of AM Lodha from Sanmati Consultant.

Just I wanted the CapEx plan to be incurred in FY '26 and FY '27. This is the question number one. How much CapEx company is planning to incur in FY '26 and FY '27?

Yes. So for FY '26, we already incurred not entirely, but near about INR 100 crores for the H1, somewhere in late 90s and we estimate around INR 150 crores to INR 200 crores of CapEx, investing cash flow in this particular year. Total INR 200 crores. And we have some expansion plans for metformin as well for next year. If everything goes smoothly, then we might require around that much similar kind of investment in FY '27 as well. And for next round of big CapEx, we are doing -- we are in the process of developing a product portfolio and as soon as we finalize the blueprint of that, then we will be announcing it to the investors that what kind of further CapEx the company plans to achieve growth from long-term perspective. When I say long term, more of like 5- to 10-year perspective.

Sir, my second question is relating to debt. What is the present debt and how the company is planning to reduce the debt?

Yes. So steadily means quarter-on-quarter, year-on-year, our debt-to-equity ratio has been coming down. As we said, for stand-alone it is 0.33, for consolidated it is 0.39 debt-to-equity ratio. And the total debt as it stands on 30th September on a consolidated basis is around INR 571 crores.

Long term as well as working capital, both.

Both inclusive, INR 571crores.

What is the target of the company reducing the debt in next FY '27 and by the end of FY '26?

Yes, yes. So historically at Aarti Drugs, we had always maintained the debt-to-equity ratio somewhere between 0.5 to 0.6. Earlier it was much higher. But our target is to keep the debt-to-equity ratio between 0.5 to 0.7. The main reason for that is that it gives us a good leverage and it also help us enhance the ROE. What we believe here is that we do give around 25% to 30% of our PAT back to shareholders every year, year-on-year. So with that kind of shareholder payout in mind and with the higher ROE target, we like to maintain the debt-to-equity ratio at 0.4 to 0.7 because if the debt goes down too less, then probably we'll do a shareholder payout, something like that. So our target would be in 0.4 to 0.7 range debt to equity.

That means the company is not planning any debt reduction. You will keep.

No, we don't need to be. Because if we don't do shareholder payouts within 2, 3 years, the debt would be wiped off. But then the thing is we have always been for last 41 years dividend paying company. So we'll continue to do that in the future as well.

The next question is from the line of Sajal Kapoor from Antifragile Thinking.

Adhish, how satisfied are you with the current yield and purity profile of the output from both the Sayakha greenfield and the salicylic greenfield compared to where the Chinese players are today because basically we are using these as import substitution, right?

Okay. So there is 1 Sayakha. So in Sayakha, we are doing methylamines. So methylamines is not an import substitute product. Definitely salicylic acid, which we had done in Tarapur, that greenfield is absolutely, as you correctly said, it is the import substitute product. So as far as yield and purity profile of salicylic acid is concerned as against the Chinese quality material means earlier, I would say in January in the start of this calendar year, we were a little behind frankly speaking. But then with great efforts from our R&D team, now 2 months back I would say, we were able to achieve the required purity profile for salicylic acid. Definitely we still have to work a lot on the process improvement part because right now we are focusing on achieving the quality parameters. So the quality parameters are met. Fortunately, now the product is widely accepted in the market. We have sold to majority of the salicylic acid customers in India. So the quality is very well accepted as of today. Now we need to focus more on the cost improvement part for salicylic acid. And as far as the Sayakha project goes, which we just commercialized in September month, 2 months back. Fortunately, there the quality is spot on right from the day 1. Obviously the derivative part, which is under -- which we are captively consuming, I think we are pretty much there. So Sayakha project would be online in a much faster way than what happened with the salicylic acid project. And for the Sayakha project, we are not competing with the imports, but it is the other domestic manufacturers with whom we are competing.

Yes, absolutely. So the broader strategy at the Sayakha plant is to reduce dependence on the external suppliers and enhance the gross margins by integrating backward, correct?

Correct.

And when I look at the presentation so I'm on Slide 7, our gross margins have shown a significant improvement of more than 300 basis points. The question really is what is the driver behind this improvement? Is it this backward integration or is it better realization, some sort of process improvement? What exactly is kind of contributing to this improvement in gross margins? And what could perhaps be a sustainable gross margin going into fiscal '27, if you can…?

Okay. So as you are referring to that particular slide, so what happened in last 2 to 3 years from FY '23 onwards; '23, '24, '25, '26; now because of that Russian war in Jan '22, so March quarter 2022. After that, the oil spike in the prices went up very sharply for the first 9 months and then it started to cool off very sharply when India started purchasing oil from Russia. So the prices cooled off. And since then, the prices of the raw materials have been coming down slowly and steadily means it had been coming down slowly, slowly, slowly across the globe. Now in that scenario, what happened because we carry an inventory of around 90 to 100 days in total, including raw material, WIP and finished goods. In the declining prices scenario, we always take a little bit of hit on -- the gross margin always take a hit because of the FIFO basis of the accounting. And that was the reason why the margins were artificially compressed for last year means for the last financial year. Not that our efficiency was less or anything like that. But now that the decline has stopped since last almost 9 months I would say, 9 to 12 months. The decline is so less now the volatility has gone down and because the volatility has gone down, the true margins are now coming down. The price variation effect in the gross margins have now been going out and that is why we can see there is a steady increase in the gross margin. However, I would like to point out that in spite of taking losses, you can say very little gross margin in salicylic acid kind of a product, still we are able to maintain this profit margin number. So we are pretty much hopeful that once salicylic acid gets in line, then our P&L statement will improve drastically.

Yes. So you mentioned the number of 800 tonnes if I heard it correct.

Can you please rejoin the queue? [Operator Instructions] The next question is from the line of Aman Goyal from Axis Securities.

Congratulation on a great set of numbers. Sir my question is related to the next big opportunity in the pharma sector, which is GLP-1. So we are already in the API for antidiabetics through metomorphine. So are we seeing any potential in entering into GLP-1 intermediaries or API? Are there any internal discussion or early stage evaluation to entering into this opportunity?

Yes. So just few minutes back we discussed that right now, as you pointed out, we are in the early phase discussion to put a new product portfolio taking into account growth of next 5 to 10 years not for next 3, 4 years because next 3, 4 years growth would be majorly driven by the capacities what we have already installed as of now with 2 greenfield projects and other brownfield expansions what has been going on in last year and even in this year. So the next round of growth, let's say, for a company to grow from INR 5,000 crores to INR 10,000 crores of revenue, we are forming a product portfolio. We will consider these molecules as well, what you mentioned right now, into account and looking at our strengths and weaknesses and the kind of markets, kind of client profile with certain molecules has and whether we are already dealing with those clients; based on all these factors, we will narrow down the list and start working towards that growth.

The next question is from the line of Nilesh Ghuge from HDFC Securities.

Sir, my question is regarding our Sayakha mine facility. See, as you mentioned, it's a step in the backward integration and it will enhance your raw material security as well and the margin resilience. So what kind of a benefit in terms of percentage or bps in your gross profit margin or EBITDA level you expect because of this Sayakha once the plant is running at a full capacity?

This is Adhish. As we all know that this particular chemistry, the product line, as of today, the margins look fantastic, no doubt about that. But as we scale up, the additional capacity which will come in the market probably it would be prudent to expect some bit of price reduction in these products. But in spite of that, the main reason for us going backward integrated was because we are really dependent on one of these raw materials and that is a big chunk of our overall business. So easily, I would say it will be taking care of 10% to 13% of backward integration. The product which we are contributing 10% to 14% of our revenues, that will be further backward integrated by this particular facility. And plus we'll be selling the side chain products outside, which are quite profitable as well. Definitely the profit margin what we expect is much better than our current aggregate profit margin of the company. I'm actually sorry because I cannot estimate exactly how much it will add on. If everything goes well, definitely the profit looks very high, but I would not like to point out that number because we don't feel that the things will remain as they are right now. Slowly, slowly the selling prices should come down. But what we still expect is from this project, at least we should try to make around 18% to 20% EBITDA margins is what we feel from this project, Sayakha project.

Okay. 18% to 20%, okay. And are we looking for a merchant sale of this product as well or just for the captive consumption? I mean I'm talking about the methyl derivatives.

You're talking about specific derivatives. So if it is specifically for which we are talking about specific intermediate, then the intention is not to sell that intermediate outside. The intention is to captively consume that. But the side chain products because to manufacture that product, a couple of side chain products are automatically produced. So that we will have to sell outside, there is no option. And fortunately, one of the side chain products is going to our group companies itself. They have a heavy demand for that side chain product. So fortunately, from the demand perspective, we have seen a very good response from the market. Two products are already secured because one, because of captive consumption; second, because of group company sale; and the third one, we are seeing very good acceptance in the market. So we hope that this project will do better, a lot quicker than what we saw in sulfuric acid.

Sir, the second product, you mean in the case of the caffeine, the key raw material is caffeine.

No, no, no. What I'm trying to say that there are 3 methylamines, which are being manufactured; MMA, DMA and TMA. So what I was talking about is the DMA derivatives that will go in antidiabetic therapy for our backward integration. For MMA and TMA, those will be sold outside.

Okay. And you can tell the volume or how much volume you were procuring earlier and how much is the replacement as of now?

I gave 1 number that roughly plus/minus plus -- around 40% of the captive consumption requirement as of today we are satisfying. But we are trying to ramp it up very quickly. We have to resolve certain issues, equipment-related issues. Once they are done, then we can ramp up pretty fast. But main thing is our metformin capacities as of today, it stands at 1,400 metric tonnes per month as of today. But we plan to expand that as well going forward. So once we expand that, then our requirement for captive consumption will go up and even that we have taken care of in the existing facility.

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

Thank you. So before we conclude, I would like to reiterate that Aart Drug is entering a key growth phase where multiple strategic initiatives undertaken over last 2 years are starting to converge. We expect to see the impact of these efforts more visibly in the coming quarters as utilization improves, product mix strengthens and new capacities begin contributing meaningfully to profitability. Our focus remains on disciplined execution, operational excellence and continuous enhancement of technological capabilities across our value chains. Thank you for your continued support and trust in Aarti Drugs. For any further queries, please reach out to SGA, our Investor Relations advisers. Thank you and have a nice day.

Thank you very much. On behalf of Aarti Drugs Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.