Dishman Carbogen Amcis Limited (DCAL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q3 FY '21 Earnings Conference Call of Dishman Carbogen Amcis Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Arpit Vyas, Global Managing Director of Dishman Carbogen Amcis Limited. Thank you, and over to you, sir.

Thank you, moderator. Dear all, welcome to the Q3 con call of DCAL. The progress of the company is going very well. The performance at a global level has been truly commendable, even in such difficult and challenging times. Starting with India, the company, with its 50% less resources, have been able to achieve a spectacular progress. As mentioned earlier, the CAPA submitted for EDQM observation has been accepted by the EDQM. The progress on the CAPA has been challenging with limited resources, but the team has been working day and night to make sure that we are on track. This gives us, the management, a lot of progress and -- for our people of their current dedication, loyalty and faith towards the company. We have been able to successfully take on more globally renowned consultants to help with not only the CAPA, but also with the upgrades that the company wishes to do to bring its capability to the next level. Just to give a gist of the fields that we are taking consultation in, are the likes of engineering, information technology and quality, where the people provided by these consultants are working very well with the in-house teams, increasing a lot of knowledge on both sides and, hence, the progress of the company. We also know that working with consultants forever is not a sustainable model. And hence, we have tied up with 2 of the top 5 recruitment companies of the country to help us get the level of manpower that we wish and desire for. On the customer front, we have been able to now successfully complete the risk assessments of all the products and their customers. We did 2 virtual audit requests by 2 of the biggest customers of CRAMS, and the audit went very well. We are extremely happy with our support and progress, for which reason we are going to push for approval with the local authorities and with confidence. Once the approval is obtained from these authorities, the work will resume in full force with them and will be nonstop since they have been not supplied any material for almost a year. We expect this to happen in the next 2, 3 months. We will also safely assume that, once the local authorities give that approval, majority of the work, particularly related to CRAMS, should resume with most of the customers. We have not received a single recall request or anything negative from the customers and/or the regulators of all the risk assessments we provided for the APIs sold in the previous years. We wish and hope that you all appreciate the mammoth task done and achieved by limited people of the company. We, as a management, felt that this is truly extraordinary. Following on for India, we have -- we are confident that we will come out of this with flying colors. For Swiss, we are on track with achieving possibly the highest revenue in the history of the company. Netherlands too, after 1 of its major customers opened its own cholesterol facility, has been able to not only close the gap, but achieve beyond what was forecasted. China, you, like all of us, would be happy and relieved to know that has turned into a profit after a long, long, long time. We are very proud and hope that you all feel the same. U.K. is doing well and is on track, negative is only because of the account of depreciation and nothing to be alarmed about. France, we have been able to achieve the first milestone for the expansion we wish to make, which is the groundbreaking ceremony. We are extremely excited of its future. Last from my side, then I will hand the call to Mark and Harshil to give you the details of the summary I provided, in that, in Switzerland, we had an overwhelming response from the bank syndicate that was formed. Our first phase of the 2 phases in which we'll be raising funds, first phase was CHF 90 million, got oversubscribed by 3x. We felt truly proud of the trust and the belief put in by the banks who are extremely conservative. And with that, I would like to hand over the call to Mark.

Thanks, Arpit. So just expanding a little bit on what Arpit has explained to us this afternoon. India operations now is starting at the Bavla site to really gain some headway in terms of manufacturing, getting back into our mode of operation for -- a new mode of operation for supplying our customers. And we've had a couple of successful audits, which is a really good stimulation for the team in Bavla, who have worked incredibly hard to bring this out to the EDQM challenges. We've still got work to do, but the steps we've taken are being validated by the audits that are being carried out by our customers and products are starting to flow. So we're working with a Swiss company at the moment, manufacturing a very complex intermediate for one of their APIs. That's due to be delivered any day now. One of the critical intermediates to enable the Swiss manufacturing units to finalize an API for one of our long-standing customers is now substantially underway, and the product should be delivered to Switzerland by the end of this quarter, and we're starting now. Plus all the other activities that are going on. Naroda, the site where we make a lot of our Marketable Molecules, our disinfectants and quats, has been working incredibly hard to the point where we're proud to say that this organization has delivered over 300 metric tonnes of disinfectant and antimicrobial products to the world in the fight against COVID. And that is an incredible achievement for the Naroda site. And we're very proud of those guys doing it well. Moving out of India to the rest of the world. We continue to follow the trajectory that we've been talking about all year with Carbogen Amcis. We are continuing to commercialize products at a rate which is at least the same or even a little bit higher than we've been projecting. We have a number of key projects that have hit key milestones in the last quarter or the quarter that we've reported. And we can give you some -- a little bit of detail on those, which I believe is in the investor pack anyway. But one of the key products, which is a linker and a payload for an oncology ADC for an Asian Far Eastern company, was finally concluded in terms of its validation at site. So that means that we will be looking at the next -- delivery of that product will actually be our first commercial delivery out of the site for that product. And that's a fantastic milestone for the team in Switzerland. We've also completed the validation of a hypoparathyroidism product. We're now working with the client to develop the supply agreement and detailed forecast for the ongoing commercial supply of that API. And we just had great news from our first full ADC. So this is a project where we actually make the linker, the payload, and we do the conjugation. And we do the fill in France, and they've had their IND approved by the FDA. And that is a tremendous, tremendous milestone for our organization and repays the faith that the management has put in the people to develop our ADC offer. Three more programs have just entered Phase III trials with customers. One of them is for a large pharma based -- large U.S. pharma. And that's an ADC drug linker. We've been working on that one for a number of years, but that linker is a platform for a number of new drugs that they're investigating. And we have 2 others for small to medium biotech who owns an oncology drug. The other one is for hypoxia. We're not sure whether that one may or may not get accelerated review because we suspect the client is also testing in COVID patients, and it could well be a benefit there. But again, we don't know. We'll be reacting to customers' needs. So all in all, I think, as Arpit said, the business is moving forward. The team are working very, very hard on the sites to continue to deliver the results that we've projected. Of particular note, as Arpit mentioned, is the team in Holland. Those guys have really pulled out all the stops this year and have exceeded our expectations both from an output perspective and also from a revenue and EBITDA perspective. We still maintain very, very high belief that, that business will continue to grow. We are investing in R&D, as we've mentioned before. And we have some other decent views there on patents and things that I'm sure we'll get into in the discussions. So with that, I'd like to hand over to Harshil and to talk you through the numbers and look forward to a lively and positive discussion with you after that. Thank you very much. Harshil?

Thank you very much, Mark. Hello, everybody. I'm sure everybody has had a chance to look at the numbers. But just for the sake of repetition and further analysis, I'll go through the numbers segment-wise at a later point and first of all give you a snapshot of the reported numbers. Our revenue from operations for the third quarter stood at INR 463 crores as compared to INR 519 crores in the comparable quarter of last year, which is a degrowth of about 10%, but that is solely attributable to the lower sales from the Bavla site, where now we are already seeing the green shoots of the production of certain CRAMS products already starting. So in the third quarter, we had 2 products that we started manufacturing from the Bavla site on the CRAMS side. And we have already undergone, as Arpit mentioned, 2 successful remote audits from the customers. So we should be starting the production of other CRAMS projects pretty shortly. The cost of goods sold for the quarter was INR 85 crores, so that represents close to about 18% of the percentage of the sales. The employee expenses were at INR 224 crores as compared to INR 192 crores. This increase in the employee expenses is largely on account of the ForEx fluctuation. As you are already aware, most of our employee expenses -- they sit at Carbogen Amcis AG, so -- and which is denominated in Swiss francs. So because of the conversion from Swiss francs to INR, we have seen an appreciation in the employee expenses as compared to the last year. The EBITDA for the quarter stood at INR 62.6 crores. This includes a ForEx impact of about INR 21 crores. So the EBITDA ex ForEx impact stood at INR 84.57 crores as compared to INR 122 crores in the comparable quarter last year. So as far as segment-wise breakup is concerned, the Swiss entity -- so we classify the CRAMS into 3 buckets: CRAMS India; CRAMS Switzerland, France and China; and CRAMS U.K. So what we saw was that CRAMS Switzerland, France and China had a very strong quarter, close to about INR 300 crores of revenue. For the first 9 months, the revenue stood at INR 928 crores as compared to INR 803 crores in the first 9 months of last year. So there is a growth of almost 15% -- 15.5% as compared to last year first 9 months. CRAMS India, obviously because of the EDQM observations, as we have explained earlier, the CRAMS India revenue stood at INR 20 crores for the quarter and for the first 9 months stood at about INR 40 crores as compared to INR 240 crores last year. CRAMS U.K. did a revenue of INR 24 crores for the quarter as compared to close to INR 20 crores in the comparable quarter last year. For the first 9 months, it did a revenue of INR 77 crores as compared to INR 81 crores. So it's more or less in line with last year. Moving on to the Marketable Molecules segment, where the vitamin D business contributes the highest. Carbogen Amcis BV did a revenue of INR 64 crores as compared to INR 57 crores in the comparable quarter. And for the first 9 months, it did a revenue of INR 189 crores as compared to INR 185 crores. The others, within the Marketable Molecules segment, which comprises of the disinfectants, quats, intermediates, generic APIs, did a revenue of about INR 55 crores for the quarter as compared to INR 59 crores in the comparable quarter. For the full year, it did INR 144 crores as compared to INR 160 crores. So overall, the CRAMS revenue for the quarter was INR 343 crores as compared to INR 402 crores in the comparable quarter last year. And for the first 9 months, it stood at INR 104 crores (sic) [ INR 1,045 crores ] as compared to INR 112 crores in the 9 months of FY '20 -- INR 1,125 crores, sorry for that. The Marketable Molecules segment for the third quarter stood at INR 120 crores in terms of revenue as compared to INR 117 crores in the comparable quarter last year. For the first 9 months, it stood at INR 333 crores as compared to INR 345 crores. As far as margins are concerned, the CRAMS Switzerland, France and China did an EBITDA margin of about 19% for the quarter, and it was a similar percentage for the 9 months. For the third quarter last year, that margin was 21% and 20% for the 9 months. So overall, on a margin front, we are more or less in line with what we did last year as far as CRAMS Swiss operations are concerned. CRAMS U.K. this quarter was at about 21% as compared to 14% in the last year same quarter and 19% for the 9 months as compared to 17% for the 9 months last year. Within the Marketable Molecules segment, Carbogen Amcis BV did an EBITDA margin of 35%. So again, a strong quarter on the margins front, as compared to 31% in the comparable quarter last year and 34.5% for the first 9 months as compared to 33.8% in the 9 months last year. In the Others segment, we had an EBITDA margin of 18% as compared to 9% last year same quarter and 15% for the 9 months as compared to 10% in the 9 months of last year. So overall, it was a very strong quarter for all the subsidiaries outside of India. As we see more revenue contribution from India coming through in the coming quarters, we should see the revenues as well as the margins improving from here on. As far as the foreign exchange loss is concerned, in this quarter, as I mentioned, we had INR 22 crores of foreign exchange loss. This was largely on account of mark-to-market because of the U.S. dollar-Swiss franc movement. And in the comparable quarter of last year, we had a gain of about INR 3 crores. So that's more or less the highlights on the financial part. The capital expenditure for the projects that we are doing between France and Switzerland, up till December 31, we had spent about CHF 7 million. This was largely incurred in the third quarter of financial year '21. And our net debt as on December 31 was at about USD 112 million. With that, I would like to hand over the call to Mr. Sanjay Majmudar, our Independent Director.

Good afternoon, everyone. As Arpit and Mark and Harshil has explained, the key reason for a relatively lower Q3 is attributable to India where the EDQM impact, although the teams are trying their level best to come out of it ASAP, it's still taking its own time, but the positive green shoots, as Harshil mentioned. A couple of companies have already cleared the remote audit, and now the production has started in Q3, of course, with a little lower than expected of anticipated progress. But Q4, reasonably good level of production and sales are expected. But still, overall, as we had predicted in the first quarter after the March '20 results, there would be still, I would say, about overall 10% degrowth on a consolidated basis, entirely attributable primarily to the EDQM thing. But from next year onwards, we feel that from Q1 of next fiscal, that is FY '21/'22, that things will be near to normal both in terms of production and sales from Bavla. And that should see that the company is back to its original track. The good part is that a lot of efforts have gone in, and a lot of structural corrections have happened, which will see significant long-term benefit. And that is where Arpit explained in the opening remarks that some very good internal progress has happened, which will ensure that going forward such things are taken care of in a much, much better way and that should augur well for the long-term prospects of the company. I think Mark has already explained that what are the new products and what is the pipeline on horizon. So if we take FY 2021 as an aberration, I think from '21, '22 onwards, we should be business as usual. . I think, with this, I will request the moderator to throw the house open for Q&A.

[Operator Instructions] The first question is from the line of Ranvir Singh from Sunidhi Securities.

Yes. I appreciate the kind of performance despite this challenging environment. Sir, 2 things I wanted to understand. In your presentation, you have mentioned segment-wise EBITDA. So just wanted to understand that in India CRAMS, where have you booked this admin overhead cost? Because against INR 20 crore of revenue, there would have been some overhead costs. So which segment have you presented in this presentation?

So the overheads for India, that would be coming under the CRAMS. So the overheads will be split into 2 segments, CRAMS as well as Marketable Molecules for the India segment. So since most of the overheads will be related to the CRAMS part of the business, that would be classified under CRAMS India.

This apportionment.

The apportionment.

Okay. So basically what have been the overhead cost there in -- on quarterly basis on India CRAMS business?

For India CRAMS the total overhead cost. Just a second.

It is actually an internal apportionment. But if you see the India stand-alone results...

So of the total overhead that we have in India, about 80% would be attributable to the CRAMS part of the business. Because from the Bavla site, which predominantly does CRAMS business for us, most of the overheads are related to CRAMS. So if you see the India stand-alone performance, which -- where the total overheads -- just a second. Just a second, Ranvir. We're just pulling it up.

Can you ask your further question while they are assimilating this data?

Yes, yes, sure, sure. And the second one on -- once we are through with this compliance issue and things are normalized, then would you be able to capture the same client, which we have been supplying?

Yes, yes, yes. Of course. Of course. We are working very hard for the client, and all the clients are extremely happy with the kind of support that we have provided them to continue with their supply chain.

Okay. And if you could give update on the income tax issues, which have cropped up last quarter. So what is the status there?

So essentially, over there, what we understand is that the investigation part of the process is already completed. So what we are right now doing is filing the tax returns for whatever years that they require. So that is something that we are in the process right now.

Revised.

So for -- it's -- yes. So if there is any revision, we have that opportunity, if you want to revise something. But that is the process that we are in right now. And post that, the assessing officer will do the assessment and then maybe, if dissatisfied, we will go for an appeal, et cetera. But that is the status right now that we are filing the tax returns for the previous years.

Okay. So should that be clear by the end of this year?

Well, yes, so the assessment at the assessing officer level should take maybe another 12 months' time -- 12 to 15 months' time. And then depending upon whatever the -- whatever comes out in the assessment order, we would have a chance to appeal against it, if at all. And that would be a process which would then continue.

Okay, okay. That's it from my side.

So Ranvir, sorry, to address your question. The overheads on the CRAMS side would be close to about INR 54 crores.

Okay. INR 54 crores.

For the 9 months period.

No, this is for the quarter.

Yes. Okay.

INR 54 crores is for quarter, right?

Yes, that's correct.

Okay. So this is part of other expenses. Other expenses is some INR 25, INR 26 crores on a stand-alone basis.

No. So here, we are considering all the expenses. So this would be the other expenses as well as the raw material costs, employee expenses, all of those put together. So whatever gets calculated in order to determine the EBITDA for the CRAMS segment is all calculated in this cost. See, effectively, if you see, with INR 20 crores of revenue and about INR 53 crores, INR 54 crores of expenses, the negative EBITDA for us would be at about INR 31 crores. But it also includes the ForEx impact, which is close to about INR 10 crores.

ForEx negative impact. Yes, negative impact. Yes. Okay.

Yes.

[Operator Instructions] The next question is from the line of [ Dhiral Bhansali ], an individual investor.

Yes. Well done despite a challenging quarter for you. I have a few questions. Am I audible?

Yes, yes, yes.

My first question is regarding the budgetary announcement this year, where it has been said that the goodwill of a business or profession will not be considered as a depreciable asset. And there would not be any depreciation on goodwill of business or professional in any situation. So -- and we have done -- we have raised some goodwill via merger of Carbogen Amcis into Dishman. So would we have to reverse the depreciation availed? What would be the impact of it?

So thank you, [ Dhiral ], for your question. So still that has to be enacted into -- it has to become still a law. But from whatever we have heard and based upon our interactions with the consultants and certain senior counsels, what we understand is that there are 2 aspects to this. One, the depreciation, which has already been claimed before 1st of April 2020. There would not be any impact on the depreciation on goodwill for those years because the law is effective from 1st of April 2020. So as of 1st of April 2020, out of the INR 1,350-odd crores of goodwill, we had already return of INR 1,075 crores. So whatever is the tax benefit or the depreciation on that goodwill is something which is already tax deductible and that is something that we have claimed for. The remaining INR 275 crores is something that we will have to evaluate, depending upon what exactly comes out in the law. Because for us, this is not just about nomenclature of goodwill. It is actually the underlying intangible that we have valued. So that would include the technical know-how, the customer contract, et cetera, where each of these intangible assets have been assigned a specific value. So essentially, it is not in the nature of general goodwill, which has been mentioned right now in the finance bill. So that is something that we are still under discussion. And once it actually becomes a law, we would have to see whether the remaining INR 275 crores is something which we can claim the depreciation on or not.

Yes. But weren't we suppose to depreciate this goodwill over 15 years? And we -- I think we effected the merger somewhere around 2016.

So that's correct. So the 15-year period is for the accounting purpose. So under the accounting standards, we will be depreciating it on a straight-line method basis over a period of 15 years. However, under the tax laws, the regulation states that you have to depreciate at 25% on the written-down value basis. Hence, most of the goodwill is already written off as far as the tax books are concerned.

So what proportion of the -- already very high depreciation that we have on our books, what proportion of that is attributable to this particular merger?

INR 85 crores.

So the total goodwill is close to about INR 1,350 crores, which is attributable to the merger. Every year in the books, INR 89.8 crores or close to about INR 90 crores is something which gets written off. Under the tax laws, it is 25% of this INR 1,350 crores on a written-down value basis.

Okay. So that would eventually lead to a lesser tax outgo initially and then higher?

That's correct. So under the tax -- as per the income tax books, we would have a carryforward business loss because there has been an accelerated reduction of the depreciation on goodwill in the initial year, and there will be a lower deduction in the later years.

Okay. My next question is regarding the OFS. I mean what necessitated the management to come out with an OFS at already such a low valuation for our stock. Any reason behind it?

So the purpose of the OFS was largely to get certain funds into the company. So earlier, about 12 to 13 years back, one of the entities, Dishman Infrastructure, was a wholly-owned subsidiary of Dishman, when there were SEZ benefits that were available. And hence, what we had -- what the management and the directors had decided at Dishman was that the next phase of expansion should happen on the SEZ land, basis which there were certain lease advances which were given to Dishman Infrastructure. Later on that entity became a promoter-owned entity and hence so the advances were showing as outstanding between Dishman Pharma, the erstwhile entity, and Dishman Infrastructure. So what we wanted to do is that reverse all of these advances, so that we become more cleaner from a governance perspective as well and hence the OFS. So it was not for the benefit of the family or the promoters, but to get that money back into the company. So all of the money that has been raised has already been put back into the company. So all the cash remains within the business.

Yes. So what is the total amount that you are expecting to generate out of the OFS? Any target...

So the total amount -- yes, so our target was close to about INR 130 crores to INR 140 crores. We raised about INR 87 crores.

Okay. So can we expect another OFS or another, say, a placement of shares to somebody?

It would be very difficult to say that right now. But only if there is a strong interest from some large investor, we might look at it at a proper valuation. But yes, I mean, right now, there is not an intention, I would say.

Yes. This is what actually bewilders me is that -- I mean, our company is basically one of its kind company. There is no comparable peer to Dishman in the listed space and I presume in the unlisted space for an Indian company. And despite that, Dishman is not getting the valuation that it actually deserves. So what is it that is missing? What is the missing link between the perception of the market and what the management is doing? What is it that is missing which is not giving Dishman the kind of valuation it deserves? Because I mean, going by my limited study of the stocks -- I mean the companies in the CRAMS sector, even a coveted company like BV does not have a portfolio like Dishman, right? BV's still a 60% generic portfolio, whereas Dishman is a totally 100% innovator molecule portfolio, which puts us in a very advantageous position. And in fact, it's a dream position for any company to -- in fact, if anybody wants -- any company wants to buy out Dishman, it would be ready to pay more than $1 billion or $2 billion, even at the current financials. So what is it that is missing?

I think we have heard you in the beginning itself you answered the question yourself. That it is the one-of-its-kind company, which is not being able to be understood by the investors in our country because the business is a long-term business. Our job is to mainly cater to the customers where they come up with an idea of a new chemical entity to be made. And as soon as we join hands, depending on which phase they are in, it becomes a long journey to see some benefits reap out of a single product. Some good molecules take about 8 to 10 years. Some weak molecules take about 8 to 10 years to come to launch. Some good molecules can be as quick as 3 years from the time we go to pivotal trials to clinical trial. But this gestation period is long. We are fully committed to our customers. And hence, we are achieving what we are supposed to achieve with the talents that we have. But unfortunately, the investor community is not able to understand. We have tried our level best to make them understand what CRAMS is truly meaning for us, which is really not comparable to anyone in the country and only possibly 1 or 2 other companies in the globe, which the foreign investors do understand but the Indian investors are unable to as of yet. But our strategy is to keep performing the way we are. And then hopefully, one fine day, they will be able to get what kind of business we are in. Because you said it right. Essentially, even at INR 500 crores turnover of a company, particularly in India, if you say, that constitutes for billions of dollars for the customers in terms of formulations. Same if you talk about Carbogen Amcis, it converts into billions of dollars for revenue -- as revenue for the customers who are into formulations and doing the clinical trials. So overall, in the group, we are API manufacturers at INR 2,000 crore turnover, who can easily say that the global economy that is being handled by the whole globe is close to not less than $20 billion in terms of the customers.

So this is just to add very quickly a couple of things. You see, you're right that from an investor standpoint, it is also a matter of performance. Now what I -- as I understand and I see, this year, unfortunately, while if you see last year, we were on track and things were looking up. This year this EDQM came and put us frankly on a back burner, but that is only -- not a structural thing, but it is just a short-term thing.

Sanjay bhai, my question is not particularly about this quarter.

Sir, just give me a moment. I think from next year onwards, if you look at the pipeline, what was the challenges, are we ready with the right kind of pipeline which can give you a consistent, reasonable, comprehensible set of numbers. I believe that with 18, 19 late Phase III molecules, with a lot of efforts that are being put globally, from next year onwards, performance will come. Performance will speak. There will be a consistency that you will be able to see. And I'm sure that, over a period of time, whatever is the gap between the performance and the perception, I think we should be able to catch up. As a company, the responsibility is to be honest in what we are doing, to communicate it honestly, if there is a problem to say there's a problem. We believe that, from next year, everything should look to be normal, and time will probably answer your question more directly than -- rather than making any promises from our side. But I'm sure, if you look at a 3-year horizon from next year, we should be fine. I think everything should look okay.

But, [ Dhiral ], it is basically what you understand about the business, there are very few who understands. That is the issue.

Yes, Arpit bhai. But isn't it the mission the management to take the prerogative to come out in the open. Maybe you have an investor meet where you invite people to Ahmedabad, your plant, so that they can have a look at the scale of your operations, the quality of your business. Because this clearly seems to be a very big disconnect, because I don't find a single company comparable to Dishman. And then yet, I see there is more value destruction than value creation. That is what hurts. I have been a long-term investor in your company, and that is why you can perhaps feel the pain in my words.

No, no, we do, we do, and we feel the same pain as well, and we actually relate to it. And plainly speaking, the plan was to go on a educational road show for the company here around India as well as in Hong Kong and Singapore to illuminate for investors. But unfortunately, when we finalized on the plan, we were stuck with COVID.

And EDQM.

And EDQM as well. So then that plan got delayed. But we do sympathize and relate to the pain that you are feeling. And we are as -- we are very confident to come out of it and become extremely strong. And that we absolutely appreciate and thank you for the trust that you've put in. And we would also request, in the future, we can connect one on one to get help on getting an understanding of your perspective of how the company should be portrayed for a better understanding of the investors.

[Operator Instructions] The next question is from the line of Nitin Agarwal from DAM Capital.

Harshil, on the India business, for the matter, by when do we see going back to the FY '19/'20 EBITDA numbers?

FY '19/'20.

No, no, no. By when? So next year probably.

When we'll go back to the FY '19/'20? So I think that would be from the next year itself.

I mean, we were like almost INR 200 crores EBITDA business last year in the last couple of years, roughly. We hope -- we believe that we should be able to get there all over again by next year?

Yes. So Nitin, if you see, with most of these CRAMS projects coming back to normal, we should be able -- because even right now, as we see, we have orders in hand close to about 25 million to be serviced from the India facilities. So those orders we are expecting to be served over the next 12 months. So in addition to that 25 million, there would be additional orders that would be coming in from the new customers or the customers for which we are not supplying right now because of the EDQM issue. So we do expect that the next year should be a normal year for the company as far as the India operations are concerned. And we should start seeing a good amount of revenue contribution right from Q1 up to Q4.

Okay. And secondly, on the India business, you've highlighted a bunch of incremental developments on the contract manufacturing side. How much of that essentially pertain to business from India? And is it largely what a Carbogen pipeline that you've highlighted in the press release?

So one of the products here -- that is for the largest product that we have across the group, for which India manufactures 4 steps. So that is something that would be supplied to Carbogen Amcis for further manufacturing the API, which then goes to the customer. But apart from that, rest of the projects are directly to be supplied from India to the customer.

So directly from India or from Carbogen?

No, the rest of the projects, which we are manufacturing out of the Bavla site, that gets supplied directly from India to the customer.

Through Europe or USA.

Through our marketing subsidiaries, yes.

Harshil, my question was, in the press release, you mentioned a whole series of projects where there is significant progress, which is there, and there is optimism around revenue contribution on these projects from FY '22 onwards. So what I meant to ask is, how many of these projects would have revenues coming from India? And how much you have -- how many of them would be largely conduct -- sort of executed out of Switzerland?

So as far as the CRAMS new molecules are concerned, right now, those products will be supplied from the Swiss entity because those molecules are just on the verge of getting approval or have been recently approved. So those molecules would be supplied from the Swiss facility right now. And we are simultaneously evaluating if certain intermediates for those products can be manufactured from the India site. So that evaluation is happening right now as we speak.

Right. And lastly, on the India business, how much have you guys managed to reduce the fixed cost by with the restructuring you have undertaken?

So overall, so majorly, the bigger cost which we have been able to reduce right now is the employee expenses. So on an average, our employee expenses, which was close to about INR 7 crores per month has currently come down to about INR 5 crores.

So about INR 20 crores, INR 25 crores, INR 24 crores per annum is the cost saving has come through in India business?

Right, exactly. So having said that, what we are also doing right now is we are hiring some of the top talent from the other pharmaceutical companies in India. So as we explained earlier as well, we are going for a little bit more of senior level hiring, and also kind of replace part of the people whom we have removed as part of the restructuring process. So as we see increase in the production over the course of the next 12 to 18 months, we would see an addition to the manpower as well. So we're not saying that INR 5 crores would remain sacrosanct for the next 12 months, but the INR 5 crores could become maybe around INR 6 crores. But still, we would see INR 12 crores to INR 15 crores of cost saving over there.

Okay. And lastly, Mark, on the new CRAMS project that you've highlighted in the press release, how many of them do you expect to get commercialized during FY '22, where you probably start commercial supply starting and how many of these products going forward in '22?

A couple, Nitin. The headline one, the big one, which really could be a game changer for the entire business. Having completed the validation now, the next supply is going to be the first commercial supply out of the site, nominated as a commercial supply. The validation material's already going into the commercial product. But the true commercial supply will be this year. So we come out of validation. We've done very well with the validation. Multi-digit millions in terms of the validation work, and that will continue roughly at that sort of level for the next year or so in commercial work before it ramps. I mean, the strategy for the customer is very simple. They have 2 suppliers at the moment of the intermediate. One is themselves, which is, I think, the payload, and the other is another European company. They want to take themselves out of the supply chain. So they need 2 external suppliers so that they can take themselves out of the supply chain, and that's us. So we see the volumes ramping if they continue to get the success they're getting in multiple indications. We see those volumes ramping as per previous guidance within the next 3 to 4 years. But certainly, the level of revenue will be the same as it was through validation. So that's really good news for us. And there's a couple more -- there's one more that we'll -- is already essentially we've completed. Validations of commercial supply will probably start towards the end of this coming year. And then we've got a couple more coming through. So the turnover in the pipeline is incredibly encouraging. And it's -- we've got a pipeline, which we've never had before. Frankly, never seen these numbers before. So we're in a good position.

That's good to hear. Sir, largely on the China business? In China, we expect...

China. We -- yes, China will continue to -- on its trajectory now. As Harshil said and Arpit has said, it is now not a drain on the resources of the organization. We have 3 projects which are slanted to go in there. They are intermediates and larger-scale complex molecules that we will use to support API manufacturer and the rest of the group. Interestingly, we have had notification that there's likely to be a Chinese FDA inspection this coming year in China. We don't know yet when that is, but that is for a product that a European customer is going to be launching in China. And once we get the Chinese FDA, that really does start to open the flood gates positively for us in terms of getting other regulatory inspections. That's the piece of China. The piece of China now is to get the regulatory inspections, and we have to do that for the customers, of course, because we don't manufacture our own product. So that's the game there. But China is now positively contributing, and it's no longer a drain on the resources of the organization. And interestingly, I will add this, from a market perspective, the China new chemical entity development arena is exploding, in terms of Chinese companies not doing linking products, not doing generics, but actually investing money and time and resources in developing new molecules. And that is something we predicted is going to happen, and it's actually happening. And we've got 4 or 5 customers now actively talking to us about doing development work in China for companies who are Chinese start-ups. So that's happening. That's really happening. And that, again, is an exciting opportunity for our facilities outside of Europe, very exciting opportunities.

The next question is from the line of from [ Ritwik Sheth ] from [indiscernible] Financial Consultants.

Sir, 1 question on the Bavla site. Any more remediation measures that we need to submit to the agency?

So we are -- as mentioned earlier, we are on -- with the CAPA plan which is a long 50-page CAPA plan that was submitted to the EDQM, which consisted of a lot of things. We are on the verge of completing everything one by one. And I think we are about 50% to 60% completed. The remaining is a time-bound activity, which is to do with the information technology. And the software that we need for, which are 21 CFR compliance software, which we have already placed the order for and soon the pickup will happen, which would be completed in the next 2 to 3 months. And in about 1 or 2 months after that, it will be going live. But from the perspective of the EDQM or any regulatory authorities, as long as we are moving in this direction, that gives them the comfort, that yes, the company is going to -- taking the right steps, and hence, it may not delay any sort of approvals, which are based on submitting the CAPA plans.

Okay. So we need to do the software compliance, which is IT-related, and after that, we can start production. Is that understanding right?

So that is -- the IT-related thing is one part of it. We will -- the remediation plan plant-wise is already -- meetings are taking place where 2 of the plants have already made the remediation plan, and we have started manufacturing of some key intermediates, which are required to be supplied to our entity in Switzerland for 1 of the major APIs and also some other direct customers who we are supplying these key stage materials to. And the rest, 3 plants are on the verge of being remediated with the help of the consultants, as mentioned, have -- which have come aboard since past 3 months, which is going to happen in the next couple of months. And then we will be able to start the manufacturing based on the remediation plans.

Okay. And sir, on the goodwill, we have about INR 3,600 crores on the consolidated balance sheet. So any tax cash outflow that we envisaged because of the change in -- I understand you mentioned that we need to assess. So does the consolidated impact the goodwill in case it is not favorable to us?

So, [ Ritwik ], that INR 3,600 crores has 2 parts to it. One is the goodwill, which was created on account of the merger, which is about INR 1,350 crores, which is the one eligible for amortization, and that's the goodwill on India business. The second part to it, the INR 2,300-odd crores, that's just a good bit on consolidation. So since we have -- since they have all of these subsidiaries overseas, the valuation of the subsidiaries was carried out when we did the merger. And whatever was the incremental value to the book value at the time of merger is classified as part of the goodwill on consolidation. So this Indian tax ruling has no impact on that goodwill. I mean that would continue, and that would keep on getting restated at the closing foreign exchange rate every year. The INR 1,350 crores, of that, INR 1,100 crores is already amortized under the tax laws, and the rest is something that we would get a clarity maybe in a month's time or so.

Okay. So basically, only INR 250 crores is possible that we might have to take...

Take out there, yes.

Yes, about 277.

That's not very large. So that's not very large for us.

Exactly. Absolutely.

Sure. And sir, can you give some time lines on the Switzerland and France CapEx? Sir, you mentioned that France has just broken ground. So what kind of CapEx, and what is the time line for building these facilities?

Okay. So the French facility, we've broken ground now. A lot of the long lead items have been already -- commitments have been placed on long lead items. We believe that around about 16 to 18 months will get us to full completion. And then we'll start trials of qualifications of parenteral sterile facility. So it's not an API facility. So there's quite a lot of qualification to do. We expect another 6 to 8 months of qualification. So around about 2 years before we're actually generating significant revenue out of the site. That being said, the pipeline is already growing for that project. These have quite a long gestation period, as Arpit mentioned. So we're already in discussions with customers about the scope of the new facility, and they're already looking at how that scope fits their needs in future. So that's the French facility. The facilities that we're building in Europe, these are enabling projects which allow us to extend our capabilities until the new API plant is ready in Europe, which is going to be about 3 or 4 years' time, okay? So the enabling projects will last, and there's about 6 enabling projects which will extend capability and capacity. One of them is directly related to one of the key projects where the customer is co-funding some expansion of our capabilities to enable them to continue to supply the market. That's one of the priority projects. We believe that will be completed in the next 12 to 13 months, okay? And then we have a number of other smaller projects, which will roll through over the next 18 to 36 months. It's a breach of time [indiscernible] facility.

Sure. So anywhere from 1 to 3 years, the 6 enabling projects will be commissioned?

Yes, that's a reasonable planning scenario, yes.

Sure.

And what we plan to do is to give you a brief update -- give the investors a brief update every quarter on where we're going with these. But you'll understand they're construction projects. So from this quarter to next quarter -- yes, we've broken ground in France, but the building isn't going to be built in 3 months. Of course, it's construction. So -- but we will give the market an update on how these projects are moving forward.

Okay. Sure. And what would be the CapEx at the French facility and the 6 enabling projects?

Harshil?

CHF 97 million total CapEx.

Yes. So the total CapEx is going to be CHF 90 million, of which about CHF 7 million has been spent in the third quarter.

Okay. So there is cumulative CHF 90 million for...

Yes. That's what...

That's in phase I.

Over 3 years.

So the Swiss francs and the IT projects. The IT projects, yes.

The next question is from the line of Bhavik Mehta from Roots Ventures.

So pardon me for my lack of understanding here. So I'm trying to understand, despite the EDQM remediation being pending, so the current manufacturing that you are doing for your own facility in Switzerland and for other clients, so is there any specification where you can still do that while you're still under EDQM remediation?

So I think EDQM only pertains to Bavla. There is no restriction or limitation on the Swiss or the France expansion. There's nowhere -- no correlation at all.

Sir, I mean, from the Bavla facility.

[indiscernible] India facility.

Yes. So I'm just trying to understand that the current manufacturing which is still happening within the India facility. So that is for which divisions or for which clients, which you mentioned. So that facility is still under remediation, right? So who are you supplying from there?

No, no, no. So yes, I understand the question now. So yes, what we have are a couple of facilities, which are not really subjected majorly to the EDQM. Those facilities, we have restarted with new staff, and we are manufacturing intermediates and key starting materials, one direct for a customer in Switzerland, and it's a Swiss customer, and the other is an intermediate, which goes to our facilities in Switzerland, where we manufacture with that material the final API and then we sell to the customer. So those are the 2 key activities going on right now in Bavla, along with a number of other internal projects, some of the quats, some of the disinfectants and some intermediates and things like that. So those are the 2 key projects.

So is it right to understand that this is incremental revenue other than what would pertain if the EDQM remediation is completed?

We would be manufacturing these regardless of EDQM or not.

Okay. So like-to-like which is completely different, right?

Yes, yes. These are projects that we've had for a number of years. And these are the ones where we're familiar, we're very confident with the chemistry, we've worked with it a number of times. It's a great way to restart the facility and get people back into a proper working mode. And that's why we started to do those along with the demands of the customers in terms of time lines.

Sure, understood.

But these project orders were received a long time ago.

Okay. Understood. And the INR 160 million order pipeline, does this include the complete functioning of post EDQM remediation? Or that excludes that order pipeline?

No, that's only the Swiss facility.

Okay. So is there any -- I know it's too early to understand. But once the entire process is completed, what would be the potential revenue from this facility?

Which one? The one that...

Yes, the one in India.

Okay. So if you see the last year, the last financial year, the Bavla facility did a revenue of close to about INR 350 crores on a consolidated basis. So this is excluding whatever gets supplied to Netherlands or to Carbogen Amcis AG. So these are the direct supplies from India.

Okay. My next question is relating to the 3 programs that entered the late Phase III. So is it possible for you to give market sizes of the branded eventual manufacturers? What would be the market sizes for these 3 specific ones?

No. Completely impossible. One of them is in oncology, single biggest unmet clinical need. How big is the oncology market? Well, we all know how big it is. I know what the customers' projections are, but we never bank on customers' projections because they're always wrong, either too low or too high. The other 2, one of them is difficult, really difficult to say. And if I give you a number, it's going to be wrong. So I'd rather not give you a number because 2 years later, you'll come back to me and say, ah, you said it was going to be like you said. But one of them is actually showing some interesting potential in COVID. So the sky is the limit. You just don't know. If we can't...

So I understand that it's difficult to project. But given the current wordings, it's as complex as it gets, which we probably cannot be certain what exactly are we looking at, but I'll try again. But on the oncology front, at least if you could give the indication for it, sir? What indication is this safely?

The one for the big U.S. customer is actually a platform for an antibody drug conjugate, and they're using it for 3 different -- they're using this payload for 3 different oncology indications. So one of them is bowel, another one is breast, and the other one I don't know. So there's 3 indications with that one, and it's a platform. So it's a product that they're using. It's a particular payload and linker that they use in 3 different indications that they're filing.

Okay. That is for the oncology ADC that you're talking about, right?

That's for the new one that's gone into Phase III with us. We've been working on this molecule for about 5 years through the various 3 phases. So that's now going into Phase III for 1 indication, okay?

Okay.

And the other 2, it's just so difficult. I'd rather not give you a number because, ultimately, I'll get killed because it won't be right. The hypoxia one. Hypoxia is...

So I think -- okay, so

Go ahead.

No, no. So my -- so as with the previous caller as well, so the whole idea is to get us -- I think no one -- everyone understands that these are not sacrosanct numbers that you'll be presenting. But just to understand the larger market sizes of these drugs, right? It's very important that -- to understand for an investor that how big are these markets as a -- practically, we all know how big the oncology is, and we are working in a sub-domain within that. So we pretty much appreciate your reluctance to give out these numbers, but at least there could be a better way to represent these, maybe, or just taking them out.

Yes, I mean, I can give you rough numbers. So for the first one, okay, which is a platform for 3 oncology drugs for a large pharma company, if that project takes off in 1 indication, I could imagine that, that might be worth to Carbogen Amcis, it might be worth [ 15 million ] on a yearly basis for 1 indication.

Okay.

It's got to get approved.

Yes.

So -- and not all of these get approved, okay?

Sure.

The other one, it's a U.S.-based in oncology is for lung cancer, okay? Well, lung cancer is a huge problem around the world, but specifically in Asia and specifically in China. So it could be, I don't know, it could be [ 30 million, 40 million, 50 million ] for us at maturity. It's just come out of Phase I, and it's going straight into Phase III. We've got another 18 months to 2 years before we validate that. So these are just numbers. I mean, any commercial product at a niche scale. We're not looking at things here, which are -- what we do is complex, difficult, small volume, very, very rare, difficult to make piece. These projects, if they go to maturity, could be anywhere between [ 10 million and 40 million ] a year for us. But in that time period -- bear in mind, in that time period, the other products that we've been making are going generic, some of which stay with us and some of which we lose. So it's this replication. All the time, what we have to do is to replicate ourselves time and time and time again, okay? And in replicating ourselves, drive the value higher and higher and higher. And that's what we've been able to do over the last 6 or 7 years with the facilities in total, is we've been able to replicate ourselves to new businesses, to replace business that has either been lost, it dies or it's gone generic, but the business that's coming in has been of better value than the previous work. So that's the game that we continually play every year.

Sure. I think -- appreciate that, and -- yes, as a matter, yes -- so I think in future maybe we could discuss more on this. And if I could pull in one more question here, if I'm allowed.

[Operator Instructions] The next question is from the line of Vishal Manchanda from Nirmal Bang Institutional Equities.

On CRAMS India, I just want to understand, so once things get normal next year, so would that also mean you would also get to do the backlog that -- so there would be -- there will be demand for FY '21 also that you would need to serve? So would the revenues be much higher than the run rate? Or have the customers got their supplies from somewhere else?

Yes. So we do expect that the revenue should be in line with what we did last year at a minimum, Vishal. But yes, I mean, if more orders come in, it could be even higher. But right now, what we are also factoring in is that it might take another 2, 3 months' time for the CRAMS India business to come to normalcy. So we are also kind of discounting that in giving out or mentioning the numbers. So what we can say right now that it could be at least equivalent to what we did in the last financial year, which is the orders that we already have on hand. Sorry, Vishal?

So FY '20 numbers should be the minimum number that you would do, and there could be an upside to that.

Exactly, yes. That's...

That's in, yes.

And on CRAMS Carbogen Amcis, could you kind of share what would be the constant currency growth this year so far in the 9 months?

Yes. So the constant currency growth would be -- just a second. Please hold on. Without ForEx -- business growth last year. So the revenue for the 9 months was at INR 124 million as compared to INR 110 million in the first 9 months last year. So the growth is roughly about 10%.

And how -- is this growth coming largely from manufacturing or from custom research? Where is this growth coming from?

It's both. It's both. But the biggest contributor in terms of true value is manufacturing. But you need to be doing the development work. Otherwise, you can't generate that value in manufacturing. So it's this case over time is, if you've been listening to what we've been saying for the last few years, we need development work to feed the pipeline. Once we've got the pipeline, the commercial products are the ones that generate the most opportunity. But you never get those chances if you're not doing the development work. And what we are able to do is to generate revenue out of the development work as well. So it's continually reinventing yourself all the time. That's what we're having to do. The pipeline for development work as of December was CHF 94 million. That's our pipeline of unstarted work.

And this kind of pipeline of order book needs to be executed over the next 12 months?

Easily, easily. I mean, I've never seen -- and I've been associated with Carbogen Amcis for 20 years. I've never seen this level of interest, this level of commitment from customers to book capacity and to reserve resources. Our order inquiries are what we call an RFP, a request for proposal, is up 10% this year. It's remarkable, which is why we're continuing to invest money to expand our capabilities in Switzerland or France because the market has significant appetite. So I don't see that dropping off. As far as I can predict, I don't see it dropping off. I see it being at that sort of level, if not a little bit higher, in the next 2 or 3 years.

So can we kind of continue to execute growth with existing capacities in FY '22? Or we have -- we need to build additional capacities to get growth in FY '22?

Well, that's -- yes, you've hit the nail on the head. That is exactly why we're doing the bridging projects. The projects in France is a very simple calculation. We bought that facility 9 years ago to understand a bit about formulation. We understand formulation now. That facility was ailing, losing money. We bought it. It's now making significant money. We know that there's an opportunity in the market for what we are offering, which is why we're spending money in France to expand, to provide more capability and to go further up the value chain. That's an easy calculation. With the traditional Carbogen Amcis business, which is very similar to the traditional Dishman business in terms of chemistry, we have capacity and it's people and it's equipment. We have work now that will basically book out our capacity, okay? We're turning work away. At that point, when we're turning work away, we want to reinvest. And that's why we're doing these bridging projects, these enabling projects, which are enabling us to expand our capacity in certain areas where we see a lot of interest from customers. So that's why we're doing it. You hit the nail on the head perfectly.

So broadly, like India CRAMS back in FY '22, we should also be back to our consolidated EBITDA number -- margins number at 27%, 28%? Would that also be fair to assume?

Yes, I would say so. And with more of these projects getting into commercial, the high-margin projects, we should see an improvement in the margins as well over the next 3 years or so.

The next question is from the line of [ Hiral Bansali ], an individual investor.

My question is for Mark. Mark, we had -- as far as I remember, we have got 4 molecules, 4 partner molecules getting approved last year -- last financial year.

Yes.

Yes. Are there any more molecules approved this year?

Unlikely. Simple as that, unlikely. And last year, I was predicting 2 to 3. So it really does depend. But I don't think so, not for the rest of this financial year. I think we've already exceeded our own expectations. And I think that we should rejoice in that, take a breather because next year is going to be even busier.

Yes. So how many in all are the molecules that are approved in the recent past?

In the last 3 years, probably about 7. With 4 of them being this year, 2 the year before, and 1 year before that, 7 or 8, something like that. I tend not to keep count of the past because we can't change it.

Okay. So how many -- for how many of those 7 have we started commercial supplies?

Probably -- probably 5 or 6, I would say.

Okay.

And to preempt your next question, why haven't you seen an increase in the revenue, okay? So [ chief fact is ] what I've always consistently said, yes, is validation is where we make per unit of product, the most money and the most margin. So a recent project -- and I won't use names, as you know, I don't like using names. The recent project during the validation which was about an 18-month project, year to 18 months, generated CHF 16 million of revenue, okay? We've completed the validation and the commercial supply to initially launch this 10 million to 12 million for the first year. So we've already made -- we haven't -- during validation, we haven't made 0 revenue, you see. So we've already made quite a bit of money. And then what we do is we're entering into commercial supply, hopefully, and we then start to generate revenue from commercial supply. The validation is where we make the per unit of product the most money, both at top line and its margin. And that's where we do most of the work, frankly. It reflects the fact that there's a huge amount of effort in validation to get things through the regulatory bodies these days. So when you think about a project, to compare it from a value perspective to the -- to our organization in validation versus commercial, sometimes, we're actually making a bit less money at commercial, but commercial is very predictable. So that's why we talk about baseload. Because if somebody offers me 16 million in 1 year, but there's a lot of risk associated with it or for the next 5 years, 10 million, I'll take the next 5 years and 10 million because that gives me a baseload that I don't really have to worry about too much. There's little risk associated to it.

Yes, so out of the pipeline of 25 early Phase III and 18 late Phase III, how many do you expect to get approved in the next 3 years?

I would say somewhere in the region of 1.5 to 3 per year, on average, over 3 years, blended. So please don't come back to me next year and say, "Why haven't you done 4? You did 4 a year before." It's not in our control.

No, I understand business myself. I do understand. I understand there are obvious delays in the business.

Yes, 1.5 to 3 per year. So top number could be 9 over 3 years or it could be 4 -- 3.5, 4.

Yes. So what -- I'm basically trying to understand the time lag. So a molecule getting approved and the commercial supply contract being signed and then we start supplying, what is the time lag, and then the molecule reaching a peak potential?

The shortest I've experienced in 20 years is actually using validation products for commercial products. And that happens quite a lot, actually. So that's immediate. Basically, you've made your validation product. And instead of that material being set somewhere and everybody tapping themselves on the back, it's actually going into patients. And that's an approval that the regulatory agencies need to give that you can use validation material for commercial use. And that does happen, especially if there's a clinical need. From a traditional route, which is to do your validation, you get the approvals from the clients, go into commercial, you negotiate the supply agreement, somewhere between 6 to 10 months is not unreasonable.

Okay.

Traditionally. I've seen commercial supply agreements take 2 years, I've seen them take 2 weeks. It depends how motivated the customer is. And the other side of this, of course, is when somebody gets a commercial hit, especially if they're a small to medium biotech, 99% of the time a big pharma is going to jump in and either partner with them or they're going to try and acquire the business, and then that changes the math complete. Once a large pharma gets involved, supply agreements can take years.

So that's a risk element, you mean to say?

It's a risk element. 9 times out of 10, you don't lose the compounds. It does happen. But 9 times out of 10, you don't lose the compounds because of all the time. A large company is not going to come in and invest in a small biotech. And the first thing they do is say, all the work you've done before, forget it. All the money that you spent before, forget it. We're going to do it ourselves. There are companies that do that. Hoffmann-La Roche is one of them. So if Hoffmann-La Roche acquire the product, we know that there's a damn good chance that they're going to bring it in-house because that's their strategy. They always bring an API in-house, unless it's very old API. But they're probably 1 of only 1 or 2 large pharmas that do that. Most of the large pharmas are very used to working with an outsourced model for companies like us. So -- but if Hoffmann-La Roche acquire a company, then I can pretty much guarantee that we won't be making that API for very long. But I can't control that.

A similar thing maybe happened with Tesaro?

Yes. That was the thing that happened with Tesaro, GSK or another one, yes. That's exactly what happened with Tesaro. But we made our money. We weren't banking on. We didn't sell our services cheap hoping that we would get commercial supply. So we did okay out of that molecule. It's a disappointment that we didn't go further with it, but our organization did very well out of that.

Yes. And what could be the time to peak potential?

Sorry, what could be the time for what?

To peak potential. Peak potential revenue from the commercialized molecule.

If it's not approved for any other indications or anything like that, probably these things reach peak in 3 to 5 years. Depends on the marketing capability of the company that owns it. But 3 to 5 years is normally peak. And again, traditionally, what you tend to get is you get a buildup of supply. At the start, you maybe use your validation material plus another -- plus the first commercial batch and you're building stock. And then once you build stock, you're burning that stock down and you're starting to understand what the market looks like for your product. So sometimes you get a little peak at the start when it starts off and you understand the market and the market matures further. And then you've got reasonable predictability. But let me tell you, I mean Brinzolamide, which is the product that we make for Alcon, that product was getting smaller and smaller. And then they started using it as a combination therapy and opened up a couple of other markets, and we're making more Brinzolamide than we've ever made. And that product is 27 years old. So it's -- there are always outliers. That's all I'm saying. I'm not saying that's a norm, but there are always outliers. And these days, development companies are looking to repurpose old molecules, and we're seeing that a lot, especially with ADCs, oncology, things like that. People are going back into the files and looking at old molecules and saying, how can we repurpose this for today? Because the approval route is very, very quick in that case, which means you can get a market -- a molecule to market fairly quickly than a brand-new chemical entity. So market trends are driving that as well. So some of these old molecules are getting fresh life being used in combination with other drugs.

Okay. So out of the last 7 molecules that you mentioned that have been approved in the last 3 years, is there any molecule that has reached a peak potential?

For the last 3 years, no, probably not. Probably not.

Okay. So I'm asking is this on the perspective of revenue gains that might come to Dishman out of it.

Well, at the end of the day, as Harshil said, if you look at Switzerland and you look at the trajectory Switzerland is on, the biggest single problem we've got today is capacity. It's not the fact that there's no business out there. And what you've seen with the rise in money coming into the business is we've been very picky about the sort of projects we've been taking because, obviously, we don't want to tie up our capacity on a project, which is only earning 10% EBITDA when we could actually have done a project that's 40% EBITDA. So we're walking that tight rope all the time. And the difficulty is, you don't know what these potentials are going to be for commercial going forward. So it's a bit of a -- not a gamble. I wouldn't say it's a gamble, but it's an educated judgment as to which projects you go after. But I think once we've got the capacity -- and Harshil will be able to give us the numbers, but once we've got the enabling projects done, Harshil, what is our -- excluding France, what is our projection for the increased capacity and therefore, the revenue in 3 to 4 years' time when we've got these enabling projects done?

So -- yes. So the total CapEx that we will be incurring would be close to about 40 million for the Swiss site, which would include the enabling projects and the IT projects across the Carbogen Amcis Group. And we are expecting close to about 1.5x as the asset turn. So you can expect close to about 60 million to 70 million as the additional revenue that would be coming in because of the CapEx that we will be doing.

Yes. And I'll come back to what I said in one of the previous calls, is this is the biggest single capital investment program that's been carried out in Carbogen Amcis since 2001 -- since 2000, 2001, 2002, okay? The previous elements put in 100 million to extend the capacity. And through the 2 recessions we've had since then, we've been focusing on utilizing that capacity. We've done some CapEx. We've added more labs. We've done some more [ hire pros ], things like that. But this is the first time we've really, really made a significant investment to extend the capacity beyond little bits and pieces. And it's -- the business is there for us. That's the message. The business is there. This is less speculative. It's more factual. We're turning business away. And some of that business may or may not be really valuable in 5 to 10 years' time, we just don't know. But we're focusing on what can generate the biggest buck in a reasonable time line. And that's where you see the growth, and that's where you see the growth, but we're getting to the point where we just haven't got enough room anymore to put more work in. So that's why we need to do this. It's a really nice problem to have, actually.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Arpit Vyas for closing comments.

Thank you all for the questions. As always, they are truly appreciated, and it gives us a lot of insight and directions for the company. Last but not the least, thank you all for your continued trust and faith in the company, especially during its most challenging times and when it's really needed. As always, we ensure you that we will not let you and it down. Thank you.

Thank you, everyone.

Thank you. On behalf of Dishman Carbogen Amcis Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.