Caplin Point Laboratories Limited (524742) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Caplin Point Laboratories Q1 FY '27 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Candice Pereira. Thank you, and over to you, ma'am.

Thank you, Atharva. Good evening, everyone. I, Candice Pereira on behalf of Dolat Capital, welcome you all to the Q1 FY '27 Earnings Call of Caplin Point Laboratories Limited. Today from the management team, we have with us Mr. C.C. Paarthipan, Chairman; Mr. Vivek Partheeban, Vice Chairman; Mr. Ashok Partheeban, Vice Chairman; Dr. Sridhar Ganesan, Managing Director; and Mr. D. Muralidharan, CFO. I would like to now hand over the call to the management for their opening remarks. Over to you, sir.

Thank you, Candice, and thank you to Dolat Capital. Welcome, everyone, to our earnings call to discuss the results of Q1 FY '27. Please note that a copy of all our disclosures are available on the Investors section of our website as well as on the stock exchanges. And do know that anything said on this call, which reflects our outlook for the future or which could be construed as a forward-looking statement must be reviewed in conjunction with the risks that the company faces. The conference call is being recorded, and the transcript along with the audio will be made available on the company's website as well as the exchanges. Do note that this conference call is copyright material of Caplin Point and cannot be copied, rebroadcasted or attributed in press or media without specific written consent of the company. With that, I would like to hand over the floor to our Chairman for his opening remarks.

Thank you. Good evening all. Welcome to the investors call for the quarter ended June 2026. When everyone said Caplin was no more, we proved that we are now here. Ours is a turnaround story. Today, we are neither a parrot that talks too much but can't fly nor an Eagle which has the power to touch the sky. However, Caplin is Jonathan Seagull, which aims to fly like an Eagle and eventually makes it also. Now let me present you the operating architecture of our manufacturing and marketing. And my colleagues will present to you about the various factories that are being built, unbuilt for the regulated markets. Further, our registration in smaller and larger geographies created the compounding effect to our company. The proof of the competitive moat is the free cash flow stands at free cash reserves stands at INR 1,500 crores and the total liquid asset is in the region of INR 2,875 crores. Our assets in the form of actually factories and others will become the engine of growth in the years to come. And now we encourage actually women empowerment in our shop floors. They are more obedient and disciplined, that has really brought actually productivity also in the shop floors compared to the earlier days. Now most of our machines are totally automated, either they are imported from Germany or Italy for our future facilities and also for the expansion in the current facilities. And we digitized the entire factories. In fact, CSL, we have completed it to 80% to 90%. And in the next actually 6 months, it will become paperless. We will try to replicate the same in all our facilities so that the digitalization will be completed and the factories will become paperless. In addition to that, we also -- we are introducing the video masters for visual learning, which will help the individual actually from the individual memory to the institutional memory. And also that will give us the institutional intelligence. Video masters will help us actually to capture the entire qualifications so that what will happen, even if the person who actually involved in the qualification leaves the company, the knowledge will remain in the video in the company. And we also further introduced the AI cameras, and then we are planning to go for digital twins, maybe in 1 or 2 years from now, which will help us to do the remote monitoring, which alone can help us actually to understand the transparency in the facilities also. Ours is also a vertically integrated infrastructure with intermediate APIs and finished goods for the regulated markets. And most of the APIs that we want to manufacture will be for the curative consumptions. And the commodity APIs, we will not go for our own manufacturing. We'll rather buy either from India and China for our regulated market business. Now marketing. Today products may get commoditized, but the business model, if it is unique, it will never get commoditized. That's the reason now our cash flow and profit continue to be actually growing in spite of actually the presence in the smaller geographies of Latin America. We have created the compounding effort to our business, as I told you before, now that we are entering into the bigger geographies where we currently have a mix of tender and private market business. However, we focus more on private market where there is less competition for generics from India and China. We now plan to buy a distribution company in Mexico, which will make our job easier to understand the product selection and customer identification. Our current challenge is not in the form of depth of orders, but lack of capacities in our 2 major factories, which is CP-1 in Pondicherry and the CSL in Gummidipundi. Hence, we are expanding to new factories. It's a question of time before we complete these factories. Once we complete these factories, although it may take 1, 2 years or 2.5 years, we are sure of increasing our business manifold. Our profit and cash flow will continue to be there because of our business model. And most of the time, our business, as I told you, continue to be flourishing because 20% of our products, the fast-moving products always stay in the warehouses which is next to the customer. And the goods 20%, which I say, is always for 6 months of good in the warehouses. It helps the customer and it has created actually a fan club for Caplin products. Once we complete our all regulated market factories with all kinds of pharmaceutical formulation in 2 to 2.5 years from now, as I told you, we are sure to reach greater heights. The compounding effect will build our business, and the strategic redundancies that is created in our factories will protect our business. We are moving from a manufacture to customer towards a customer proximity inventory model by planning to buy registration in the bigger geographies too. The proximity plus strategic redundancy, plus compounding effect model of Caplin will continue to actually flourish in the future too. Also, the manufacturer faraway, that is either India or China with inventory close to demand and intelligence even closer to demand with data dominance of facilities are going to be our operating philosophy for Caplin Point. It will define our business. Our business is not defined by others. Let me end with a nice narrative, that the frame of the candle also does not fear the dark. It defines us. It defines it. We are sure of creating the right transition from good to great. Thank you. Now I invite Vivek to give his presentation.

Thank you. Thank you, Chairman. Once again, welcome to everyone for joining us on this call. We have always believed the real strength of Caplin is not just in any individual product or geography or any particular quarter. It is the consistency of the underlying business model, our ability to grow across existing markets and new markets, while at the same time, generate healthy cash flow, profitability and grow our top line as well and meticulously reinvest in capabilities that will support our next phase of growth. I think Q1 is another good reflection of that. Our emerging market business continues to be a very dependable growth engine for us. Latin America has been built over 2 decades by Caplin through a combination of a strong distribution network, supply chain consistency, and more importantly a deep understanding of the markets in which we operate. We continue to see opportunities virtually across all the existing markets, which goes to show you how the Caplin's existing markets continue to grow. What is particularly encouraging is that we are not just trying to extract more growth from existing businesses. We expand the addressable opportunity through new areas such as oncology segment, branded generics, and also new markets such as Chile and Mexico. Coming to Mexico, we have a substantial pipeline of our internally developed products and also in-licensed products planned for filing. Chile and Central America are continuing to see good traction in tender and private market business. Coming to U.S. we continue to see robust growth in cash flow, bottom line and top line, which are the three most watched parameters for us in that particular order. We have spent several years building the capabilities to participate meaningfully in the U.S. sterile injectable space, and we are slowly starting to see the results of that now. We have a very good blend of critical care injectable products that are used in every health system in the U.S. and other markets, also supplemented by a growing ophthalmic products portfolio. Going forward, we will also see products with a lot more complexity coming out of CSL, which should add to our bottom line. The important point for us is that this is no longer about only supplying products into the U.S. We are gradually building a much more integrated platform from R&D and manufacturing to regulatory capabilities and also having our own label for commercial operations and direct relationships with customers. This will shortly be augmented by our own API, which will also give us very good control on our supply chain, which is a critical area in this space. Caplin Steriles U.S. is an important part of our evolution. We have already launched a meaningful number of products under our own label, and we are increasingly developing direct relationships with the large and small IDNs in addition to the big wholesalers in the U.S. We believe this gives us greater control over the commercial side of the business, longevity on products. And over time, it should allow us to capture more of the value we are creating. And this brings me to the most important part of our strategy. We are investing ahead of our growth. As Chairman was saying about the CapEx we are putting in, the next phase of Caplin is going to be very different from simply adding more products to our existing platform. We are building capabilities across the entire value chain. We are increasing our sterile manufacturing capacity. We have already expanded into oncology. We are developing API capabilities to increase backward integration, and we are expanding our oral solids and dermatology capabilities also. Soon enough, we are also planning to build manufacturing capabilities closer to the market in Mexico. We are investing also into expansion in our Amaris clinical for a larger number of these studies for our growing portfolio of products. And importantly, we are doing this from a position of financial strength. We have not taken a single dollar from outside in the form of a bank loan. Our CFO will throw more light on our balance sheet strength. So when we talk about being future ready, this is what we mean. And we -- as we look ahead, our ambition is not just to become a larger pharmaceutical company. We want to build more into a platform with a strong presence across geographies, a broader portfolio and greater vertical integration and strength across manufacturing and R&D capabilities. And the first phase of Caplin was about building a successful business model. The next phase is about scaling that model and building capabilities around it. So we try and identify what patterns have worked for us in the past and try to repeat those patterns for our growth in the future as well. With that, I hand it over to our CFO to take us through the financial performance for this quarter, and we'll be opening up the floor for questions after that. Thank you.

Thank you, Mr. Vivek. Good afternoon, ladies and gentlemen. I'd like to take this opportunity to thank everyone for taking time off to be participating in this call. I'm pleased to reiterate what I said during our Q1 investors call for FY '26. What is well begin is half done. So we have well begun this quarter with few of the highlights, which I would like to throw. Overall revenue grew by 20%, supported the 18% growth in our conventional market, and more importantly, 26% growth in the U.S. market. The LatAm business recorded strong growth, supported by a major tender won in El Salvador and supplied mostly in the last quarter. U.S. revenue growth predominantly driven by the U.S. subsidiary, which Vivek mentioned, where revenues increased from INR 14.4 crores in the previous year to INR 43.1 crores, which is about threefold increase. Absolute growth of INR 30 crores over a base of INR 14.4 crores. The business is well-positioned to make a significant contribution to CSL and the group's overall growth going forward. Gross margin stood at 59.8% which is in line with our targeted and expected, and we expect to remain at similar levels through the year. U.S. contributed approximately INR 25 crores of the total INR 50 crores increase in the gross profit. This shows how CSL is coming into party, and then they will be a more significant player in the future growth of the company. Operating expenses increased in absolute terms from INR 137 crores to INR 151 crores. However, as a percentage of revenue, they declined from 23.7% to 23.6%. This improvement in operating efficiency more than offset the movement in gross margin, resulting in an increase in EBITDA margin from 37.1% to 38.4%. The depreciation increased by INR 5.3 crores, primarily due to the capitalization of Line 6 in CSL and the oncology project, injectable project in Kakkalur and Vizag API plant from addition 4 and above what we initially purchased. PBT grew by 22.1%, increasing from INR 184.5 crores to INR 223.2 crores. The effective tax rate stood at 20.5%, in line with target of 20%. Tax stood at INR 1,009 crores, representing a 19% increase over the previous year. Cash flow from operations is expected to improve from the current INR 95 crores reported for the quarter. This is primarily due to conscious decision to increase warehouse stock from INR 429 crores in March to INR 505 crores, an increase of about INR 76 crores, which in terms of space will be at least 200 acres, to shield against potential supply disruptions and ensure supply chain continuity amid the ongoing geopolitical situation. Additionally, to shield against potential increases in raw material prices arising from escalation oil fluctuation, we have increased our RMPM inventory by INR 15 crores. These are the two factors. Apart from that, the receivables also have gone up by about INR 46 crores as compared to March, primarily due to supplies to government this quarter, and then these are all expected to be received by Q3 of FY '27. So these are the primary reasons why you would see a moderation in the CFO as compared to our conventional increase. So these increases are not likely to repeat the same quantum going forward in the Q2 onwards. So it will -- the entire profit will flow into the CFO. Cash and cash equivalents, as Mr. Chairman put it, increased by INR 266 crores. We were at INR 1,307 crores -- INR 1,237 crores as of last June, and we are at INR 1,500 crores as of June '26. Liquid assets increased by 30%, that is INR 668 crores from INR 2,207 crores to INR 2,875 crores, primarily consisting of cash, receivables, and inventory. Shareholders funds were net worth increased by 25% in the last 1 year of INR 762 crores. From INR 3,013 crores, it has increased to INR 3,776 crores in June 2026. So we will have to be modest in saying that when we compare our peers in terms of ratio, like EBITDA, PBT and PAT, we are way ahead of our comparable peers in the market. With this opening remarks, I would like to conclude, and we will be able to answer any questions from the participants. Over to you, Mr. Vivek.

Thank you, Mr. Murali. We can open up the floor for questions now, please.

[Operator Instructions] The first question comes from the line of Abhi Jain from AJ Capital.

First of all, sir, congratulations on a same set of numbers. Good to see, that the growth rate is maintained and you are on track to achieving your long-term goals. So congratulations on that. I had two questions. First, I wanted to discuss the rest of the world's profitability on the PBT level. If I look at the numbers year-on-year, in Q1 of FY '26, that was at 37.5%, the PBT profitability for rest of the world. That came down to 34.6%, 7%, then Q4 of FY '26. This quarter, it is down again to about 33-odd percent. So, I just want to understand that what do you see this holding up to? Can you guide us in terms of what this level would be for FY '27 and future purposes? Because we are seeing that quarter-on-quarter, it is inching down by 1 to 2 percentage points in the last 12 months. Can you guide us on that?

Yes. Okay. And you have one more question to complete? Or is it okay to answer?

Yes. The second question is on capital allocation. So, I can ask, once you have answered this, we can get on to that.

Okay. See, that 1% and 0.5% which you are talking, yes, is actually true. But again, I would request you to look at actually the free cash reserves and the total liquid assets. See, it is quite normal actually for any company. There is a possibility of 1% or 1.5% decrease, because when the business actually, especially the generic business, is in a position to actually generate cash and generate profitability, which is substantial compared to our peers, I think it is fairly okay. But now our focus also, in addition to these markets, we are moving to other markets also. And then, the second most important thing is our expenses are also slightly increasing in these places because the products that we have been marketing, it is more of generic. And the second level of marketing now, it takes that, of course, increase the expenses also. So that 1% or 0.5% is not going to be like getting reduced every year-on-year basis or every quarter-on-quarter basis. It might even improve. I am sure it will improve actually after a point of time, when we are planning to go for actually more and more of products, which will actually create value to our generic business also. The reason being, this is not a commodity kind of a business where no generics gives you this kind of properties because of the business model differentiation. Yes, please. Please go ahead.

Can I get the permission?

Yes. Director of finance also to give his comments.

I have one more point for the information. Actually, if you recollect what we have set as a target or committed is about 55% of the contribution margin. Okay. We are way ahead. We have performed better. And then if you compare it to 55% what we have committed, and 59.8%, there is nothing to worry about. And this is, as Chairman rightly put it, this is a quarter-on-quarter, we cannot say. We have to see as a year as a whole. It depends on what product we sell, which market we sell in a particular quarter, and what contributions they yield. So please rest assured, we have given a -- we have said that in my remarks also, I said 59.8% is what we achieved. We say put around that, about 60% is what. Though 55% and 25% is the fact we committed, we are way ahead in both the parameters.

No. No, I understand that, sir. You are obviously maintaining and achieving your overall numbers. I just wanted to get into the details of it. I wanted to understand the business a bit better. So I just wanted to understand what is a steady state level of profitability in rest of the world that we can expect. That was my question. So sir, coming on the second part of the question, actually, you answered that the cash can result in a bit of a drag. I wanted to understand your capital allocation. Now I see that you have this INR 1,000 odd crores of cash in hand, and most of them is invested in debentures and bonds, et cetera. Any thoughts around improving the yield by investing in index funds? I mean, if you look at Nifty 50, Nifty 500, these have a steady compounding of 9% to 10%, give and take any 4-year, 5-year horizon you see. So any plans to invest part of it in index funds? These are relatively safe. They provide a yield of 100 to 200 basis points higher than the corporate bond. So just wanted to keep it on the table. If you could put it into consideration, it will help improve the profitability also, annual profitability by 100 to 200 bps, looking at the INR 1,000 crores of cash reserve that you have.

So this -- No, thank you and valid suggestion. In fact, this was discussed during our recent Board meeting also. We've gone from a state of being ultra-conservative and having everything and only in FDs to slowly moving up the risk chain, if you want to call it that. But your points are well taken. In fact, one of our directors also suggested that we can be slightly, I wouldn't call it adventurous, but we don't have to be right at the bottom in terms of the risk appetite when it comes to investing our reserves. I think slowly, slowly we'll be moving up. Already, I think we are into credit funds and debt funds and things like that. I think index funds could be the next in line for us to evaluate. Maybe what we can do is, over a period of time, work on having an investment policy per se for excess funds. But again, we always want to make sure that capital protection is more important than the returns. But once again, point well taken. I think 1 or 2 percentage points with this kind of a quantum will certainly be a large number, and we should not be ignorant to that. Yes.

Yes, sir. The biggest investor and the -- yes, sir. Go ahead, sir.

Just to add 1 more point. So in terms of the long-term investment, actually, as we have been discussing in every meeting, that we are also keeping our eyes and ears open on inorganic opportunities as well. So we would like to have the cash at our disposal at any point of time there. If we need, yes...

For sure. But a part of your portfolio, a part of that INR 1,000 crores can be parked.

We understand. We make a small beginning. Point well taken, we will do that. And capital protection...

Because the biggest investor, Mr. Warren Buffett, uses his cash reserves when investing in index funds, investing in safe equities. So obviously, I mean, we shouldn't be so scared about it. And Indian equities, especially the index funds, have a long track record of over a 4 to 5 period horizon, giving at least 9%-10% return. So I think we can be a bit more open about it. It helps improve our profitability by 1 to 2 percentage points every year, so why not do that? That was just only a suggestion. We can start with maybe 200, 300 odd crores, 20%-30% of the portfolio. And 70%, you can use it for inorganics and acquisitions, et cetera. But just thinking out of the box. If Warren Buffett can do it, certainly we can do it at our end.

Point taken.

[Operator Instructions] The next question comes from the line of Prakshal Sakaria from Sakaria Investment.

I have three questions. The first question is that I think Mr. Vivek mentioned that they are looking at a distribution company in Mexico. So have we narrowed down to any right now?

Yes, I'm the one who told that one. There are opportunities like 3 to 4 companies, the Vice Chairman of the company, Ashok Partheeban has looked at it and of course, is going to collect the details and send it to us. After that, we will have to do the due diligence and take a call.

Okay. So we can expect an acquisition soon, maybe...

It all depends. If it is a meaningful acquisition. As I told you, the idea of going for a distribution company is to understand actually the products, the select -- mainly for selection of products and selection of customers. And this will also give you an opportunity about the entire reach of the distributor. If distributor covers the entire country, that's a major opportunity. So that we'll understand which are the pharmacies, which are the small chains, which are the smaller hospitals, which are the private hospitals, the distributor is covering, then accordingly, we'll have to take a call. We'll have to take a decision. Those three types are very crucial. If he's actually selling only multinational products, it doesn't make a difference to us. If he is selling the local company products, we'll be very keen. We would like to actually buy even at a little higher cost. But if he's only selling multinational products, you know very well multinational products have been sold in this kind of -- any market for that matter, say 100 years or 60, 70 years, and above. Local companies means it will not be more than actually 20, 30, 35 years. So that also makes a lot of difference. Multinational products, most of them are actually patents, and they get expired, and that became actually a generics. Local companies, they only manufacture the patent-expired products, so something similar to our model, generic business.

Okay. Understood. And my second question is to Mr. Vivek. I think, we are right now running 5 sterile lines and moving towards 17 sterile lines, which will be one of the biggest in the country. So I mean, what gives us the confidence about the healthy utilization of those 17 lines? Because 17 lines is like huge. So are we expecting that much demand from us? Do we have -- are we getting a lot of queries right now?

Yes. Can I get into it first and then I'll actually...

Yes. I mean, anyone can answer. I mean, I...

Currently, last 4 years, I've been sitting in the factory. So I would like to actually give a bit of this thing right question to you also. See, now, out of 7 lines that we have here today, we find it very difficult to handle actually the orders that are coming to us. One main reason is when we were smaller and we didn't know much of actually the technology, we didn't balance it properly. Most of our -- like 3 of our lines is a mix of TS and aseptic. And then whenever we expanded, we expanded in such a way that it was not really actually correct also. So it leads to a lot of actually complications in the sense it is not a major issue in the form of quality issues or integrity issue or a safety issue, but it leads to breakdowns. The first phase of our actually injectables, it took 10, 2 years already. We got our first USFDA inspection in 2016. Then the second phase, they were all new lines actually like Line 4, 5, 6. So when we go for actually the Phase 3, we will not go for all the 7 lines, we'll start with 3 lines, and move all the aseptic to the aseptic actually the same line where it will be with isolators, which means the aseptic practices will be totally eliminated because isolator lines doesn't require aseptic practices. Then when we go for actually ophthalmic products, ophthalmic machine, which we are going to import from Germany, this one also is a very sophisticated line and then it involves lesser human intervention. Then the third one is, as I told you, we are not only getting into the automated machines, we are also getting into digitization. Once you complete the digitization, especially the LIMS and QC and micro, and then the entire digitized in the form of eLog, eBMR, eBPR, it becomes paperless. The third one, as I told you actually, the visual intelligence. People will learn everything through video, because seeing is believing. People can learn by. If someone teaches, there is a possibility of forgetting. But if someone happens to see and do the work, it becomes easy also for them. So with all these additional advantages in addition to AI cameras and all, when we go to the customer, we'll be one of the few companies of our size who has actually the wherewithal. So I'm sure that we'll be in a position to get actually good business going forward. Because of, A, the entire actually state-of-the-art actually model that we have told you in terms of machine, in terms of actually digitization, in terms of video way of doing things in the form of the entire qualifications. Most of the time it was done by people. And people when they leave, the summary and the intelligence both leave. But now that it will live actually in the video library. So not necessarily you'll have to worry about the people. You'll have to bother more about the system, that too if the system is integrated with AI cameras, then the MIS also comes to us easier, and it's easier to manage also. And then someone who is actually in U.S., if they want to see whether we have taken up the products for production, they can as well see from U.S. also when the production is on actually in the nights here. Actually, the night here is day there. Injectable is one thing now which goes 24/7. So like that, I can tell you there are a lot of advantages every customer will have. And most of the CMOs of our size may not have this type of actually advantages. And on top of it, we also have R&D both for API and formulation. We will be in a position to also do something actually for the R&D and other things in the form of tech transfers, everything. These are few advantages which we have. So I'm sure, we are very confident we will be in a position to increase our business. Now, I'll invite actually the Vice Chairman to say a few words about it also.

Yes. So, from the commercial side, if you see, we are actually booked out till almost February of next year. So we've been just about barely able to keep up with demand, and we know that expansion of capacity is extremely crucial for us to keep up with the growing demand. Number 2, out of the 60 odd ANDAs that we have, only 39 has been launched. We have to continue working on launching the remaining products as well. Number 3 is we have another 40 plus products in the pipeline in both pre-filled syringes, ophthalmic suspensions and all of that needs to also come into play. And in the new facility, we are also getting in two very niche areas such as blow-fill-seal products, inhalation products, and potentially also getting into other sterile dosage forms. All put together will be close to 15 plus lines. So, I am not even taking into account any of the capacity requirements that we will need when we get into full scale operations in Brazil and Mexico and stuff. So by no means, we think this is overexpansion or anything like that. In fact, we are expanding a little bit ahead of time. Finally, the last one is, we've always had an eye on getting into early-stage biosimilars, especially with a partnership with large Chinese companies that we're already in touch with over the last couple of decades from our presence in China. So all of these put together, we feel that with all the automations that Chairman has been talking about, we feel very confident that the sterile space is going to be an important space for us to expand in.

And the most important point I forgot to mention, it's not debt actually driven. It's all from the internal cash flow, which means, suppose if it's slightly delayed also, we don't have to much worry about it. Of course, which will not happen. However, this is not actually a debt-driven infrastructure that we have created.

Just to draw a parallel without mentioning names, the largest capacity of injectables in India has close to 30 lines, like 29 or 30 lines. And that company also continues to invest into more, just to draw a parallel.

Okay. Thank you so much for such a detailed answer. And I just have one last question is that, I'm tracking the company since past 5 years. And I have this -- I really look up to you, but I just want to know one thing that as a visionary, what do you see the company in the next 3 to 4 years, maybe by 2031, '32, you always say that we will be a big company, big company. How do you define big? And how do you see the company in the next 3, 4 years?

Okay. This is actually something what you are asking is actually like former self to future self. So what is that? See, it is not that how much we have grown, what kind of a company are we becoming. So if I want you to actually tell me the size, more than the size, look at actually the kind of infrastructure we are building. Be it injectable, be it tablet and capsule, be it ointments, be it any area, we will have all the facilities which will be in line with actual international standards, so that we can get into the regulated markets worldwide. We could be a global dosier in future. Second important thing, in addition to that, we also have plans to go for markets like -- sorry, countries like Mexico to start our factory, where we have already bought the land. The advantage is, if you set up a factory there, 16% of price advantage for getting into the tenders. The business that we do, we are not only interested in doing business in tenders, we are also interested in doing business more in private markets, which of course is not easily replicable by companies of our size. And the big companies are not very keen to get into the private market. You can even verify. Maybe few products they import or buy and sell it to the local people. And even if they have an office there, they will sell to actually the top distributors. Whereas we will go to the length and breadth of these countries because my son, who is the Vice Chairman of the company, he has been there in this part of the world for the last 22 years. Our maximum actually focus will be there in Mexico and Brazil by Ashok, and U.S. by Vivek. So even in U.S., 70% may be controlled by actually three top companies, but there is 30%. We look at the 30%. If you could do at least 10%, 15% of 30%, that itself is a huge market. So once you create the infrastructure, once you digitalize it and modernize everything, once they understand this is going to be -- these four pillars in the form of integrity, quality, safety is ensured, the productivity will not be an issue. I am sure. So if you ask me to quantify it, see, I would prefer to be one among the top 20 companies of the country.

[Operator Instructions] The next question comes from the line of Abhi Jain from AJ Capital.