Gland Pharma Limited (GLAND) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Gland Pharma Limited Q1 FY '27 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Shriniwas P. Dange, Investor Relations at Gland Pharma Limited. Thank you, and over to you, sir.

Thank you, Darwin. Good evening, everyone. We welcome you to Gland Pharma Earnings Conference Call for Q1 of FY '27. I'm Shriniwas Dange, from the Investor Relations team at Gland pharma. Today, we have Mr. Srinivas Sadu, Executive Chairman; and Mr. Ravi Mitra, Chief Financial Officer from India Office. We will begin the call with the business and operational highlights from Mr. Sadu, followed by the group financial overview by Mr. Ravi. Before we proceed, I would like to remind everyone that some of the statements made today will be forward-looking and are based on management's current estimates. These statements should be considered in light of the risk associated with our business. This call is being recorded. The playback and script will be available on our website shortly. With that, I hand over the call to Mr. Sadu for his opening remarks.

Thank you, Shriniwas. Good evening, everyone, and a warm welcome to all of you to Gland Pharma's earnings call for the first quarter of fiscal year 2027, ended June 30, 2026. I will begin with the business and strategic overview, and Ravi will subsequently walk you through the financial performance for the quarter. We have started FY '27 with a strong momentum, delivering healthy year-on-year growth in revenues, EBITDA and profit after tax. Our performance reflects the resilience of our business model and the successful execution of our strategic priorities. Growth during the quarter was driven by continued strength in our CDMO and TV businesses, contribution from recent product launches, increasing volumes from existing products, improved capacity utilization and sustained operational efficiency initiatives across the organization. For the first quarter of FY '27, we reported revenues of INR [indiscernible], representing a growth of 20% year-on-year. Adjusted EBITDA for this quarter stood at INR 5,102 million with margins of 28% while profit after tax was INR 3,170 million, reflecting a healthy growth of 47% year-on-year with PAT margin of 18%. The quarter demonstrates our ability to consistently execute multiple growth progress while maintaining strong profitability. We continue to benefit from a balanced business mix and initiated manufacturing capabilities. continued operating leverage improved capacity utilization and disciplined cost management have further supported our profitability during the quarter. Let me now provide an overview of our performance across business segments. Our CDMO business continued to deliver strong growth during the quarter and remains one of the key pillars of our long-term strategy. Revenue from the CDMO segment stood at INR 8,915 million, which grew by 20% year-on-year and contributed 50% of total revenue in the quarter. Growth was driven by recent product launches and progression of the existing commercial programs. Our customer engagement remains strong, and we continue to attract robust global pharmaceutical companies seeking reliable tile manufacturing of partners. Our pipeline of development and commercial opportunities remain healthy and provides good visibility for future growth. The continued expansion of our CDMO partner and product portfolio validates our investments in capabilities, infrastructure and customer relationships over the last several years. Our B2B business revenue stood at INR 9,088 million, contributing 50% of total revenues and recorded a healthy growth of 19% year-on-year. The growth was supported by increased demand from existing customers, new contract wins and higher volumes across several key products. Recent product launches together with strong execution and supply reliability have enabled us to deepen customer relationships and expand market share across select products and markets. Having discussed our performance of business segments, let me now provide an overview of our key geographic markets. The United States continues to be our largest market and delivered under strong quarter. Revenues for the quarter stood at INR 9,810 million, reflecting a growth of 32% year-on-year. Growth in the U.S. was driven by recent product launches from the CDMO segment and volume expansion in existing products. [indiscernible] has reduced an encouraging launch and continues to ramp up as expected. During the quarter, we launched 4 products in the U.S. In Europe and other regulatory markets, revenues for the quarter stood at INR 4,488 million, reflecting a growth of 11% year-on-year. Growth was supported by increasing customer engagement, contribution from various branches and improving momentum across both commercial and CDM activities. We continue to strengthen our presence in these markets through differentiated products, expanded customer relationships and improved commercial execution. In the recent past, we have licensed 4 products of various partners across several countries and several active discussions are underway in Europe. In the rest of the world markets, revenues for the quarter stood at INR 3,039 million, broadly in line with the corresponding period last year. While demand across several key markets remain healthy, fees in the quarter were impacted by supply disruptions in Saudi Arabia, one of our important markets. The award of Nucor tenders has been delayed, and we expect the results to be announced shortly. Looking ahead, we continue to see attractive opportunities to expand our presence across key international markets, supported by our broad product portfolio and strong manufacturing capabilities. In India, revenues for the quarter stood at INR 666 million. At an overall growth -- at an overall level growth across geographies reflects increasing diversification of our revenue base deeper customer relationships and the success of our strategy to build a balanced business across regulated and emerging markets. Our recent new launches are going well. These new products are expected to remain important growth drivers to FY '27 and beyond. In addition to these launches, we are seeing healthy demand across several existing products. Growth has been supported by volume expansion from existing customers and improved competitiveness enabled through our cost optimization initiatives. Increased capacity utilization across manufacturing facilities is further contributing to operating leverage and supporting profitability. Our CDMO business continues to show strong traction. During the quarter, we secured multiple new CDMO contracts, including a new GLP1 collaboration and expanded our pipeline across complex injectables, peptides and drug delivery platforms. We continue to see strong customer interest and of opportunities that provides confidence in the long-term growth prospects of this business. Yesterday, we announced the execution of a strategic manufacturing and supply agreement with one of the leading global pharmaceutical companies by the technology transfer manufacturing superior portfolio of sterile injectables to the global markets. The portfolio comprises a diversified basket of oncology and non-oncology products. [indiscernible] prefilled syringe presentations, covering both complex and conventional injectable formulations. The agreement is expected to provide strong long-term business visibility with revenue generation anticipated from current 2029. The current agreement covers 55 SKUs to be manufactured across the 3 sites, with scope of adding more products soon. Once all products are coil revenue potentially is expected to be approximately USD 90 million to USD 100 million. Technology transfer activities are planned for completion within 2 years, with revenues expected to come in from calendar year 2029. We also entered a strategic collaboration with Neuland laboratories for the manufacture of sterile APIs or microparticle depot products. Long-acting depo formulations continue to represent an attractive and growing pharmaceutical segment globally. And this partnership strengthens our capabilities in complex injectable technologies while complementing our broader strategy of building differentiated and high-value product platforms. As demand continues to be across our businesses, capacity creation remains a key strategic priority. Building on our recently announced CapEx program, we are actively progressing multiple brownfield and greenfield expansion initiatives across our manufacturing network. These investments are intended to support growth from existing products. upcoming launches and increased CDM demand and newer specialty technology platforms. We continue to evaluate additional capacity requirements to ensure that we remain well positioned to capture future growth opportunities while maintaining operational flexibility and best-in-class service levels. Another important strategic development during the quarter is our in-licensing agreement with a China-based development company, for the development, manufacturing, commercialization of a niche liposome product for the U.S. and European markets. This partnership strengthens our entry into differentiated drug delivery systems and expand our product portfolio. This collaboration has a potential to extend beyond a single product given the partner's extensive pipeline for complex injectable products. Given the development time lines involved, we expect commercial opportunities and meaningful revenue contribution to start from FY '30, creating another important long-term growth driver for the company. Our R&D efforts remain focused on building a differentiated pipeline. During Q1 FY '27, we spent INR 772 million on R&D representing around 4% of consolidated revenue. In the U.S., we filed 3 ANDAs, received 7 approvals and launched 4 products. Our pipeline is increasingly focused on complex injectables and differentiated platforms which will drive long-term value. Let me now touch upon the continued progress being made across our European manufacturing operations. Cenexi's revenue stood at EUR 48 million with an EBITDA of EUR 2 million. Despite the disruption of activities caused by the summer heat wave in Europe, the Fontana facility delivered a good performance, benefiting from the production ramp-up of a new ampoule line and higher operational efficiency. During the summer shutdown as part of our ongoing modernization efforts, we will discontinue one of the older ampoule lines and replace it with a new capacity, high capacity line. This new line is expected to enter production in early 2027, and will add approximately 30 million ARPUs of annual capacity for enhancing efficiency, competitiveness and growth potential for the site. At the Herail facility, activity levels continue to increase steadily. Revenue growth is being supported by higher volumes from 2 products successfully launched during 2025, which continued to gain momentum. We are seeing encouraging customer demand trends, improving utilization levels and a steadily strengthening operating profile. Compared with ongoing cost optimization measures, we remain optimistic about the site's performance trajectory. In Bengaluru, we secured a prefilled syringe manufacturing program for an injectable orphan drug for European customer. This further centers the sites order book and reflects the continued momentum in business development and customer acquisition activities. We continue to see encouraging traction in new business generation across our European operations. Across the organization, we remain focused on initiatives aimed at improving productivity, procurement efficiency, manufacturing yields, automation and energy optimization. These programs continue to develop tangible benefits and together with high utilization levels, support margin expansion and long-term competitiveness. To summarize, we have delivered a strong start to FY '27 with healthy growth across revenue and profitability. We continue to strengthen our commercial portfolio expand our manufacturing capabilities, deepen customer relationships and invest in the future growth platforms. We remain highly confident in our CDMO strategy, execution capabilities and long-term growth trajectory. Thank you for your continued trust and support. I will now hand over the call to Ravi for the financial review. Over to you, Ravi.

Thank you, Mr. Sadu. Good evening, everyone, and thank you for joining us today as we review our financial performance for the first quarter of financial year 2027. I am pleased to share that we have delivered a strong start to the year with healthy revenue growth, robust profitability and strong cash generation. Our performance during the quarter was driven by continued momentum across our CDMO and B2B businesses, contribution from recent product launches, increasing volumes from existing products, and the benefits of operating leverage and ongoing cost optimization initiatives. As the Executive Chairman highlighted earlier, we continue to see encouraging traction across our business segments, geographies and product portfolio, positioning us well for sustained growth in the coming quarters. Before I discuss the quarterly performance in detail, I would like to mention that as integration benefits between Gland Pharma and Cenexi continued to increase, Cenexi is now fully integrated into our broader CDMO business. Accordingly, its contribution is increasingly reflected in our consolidated performance. Let me begin with the financial performance for the quarter. For Q1 FY '27, our consolidated revenue stood at INR 183 million, reflecting a growth of 20% year-on-year. Growth during the quarter was driven by continuous contributions from recently launched products, expansion in CDMO revenue and continued volume growth in existing products. From a business segment perspective, both our CDMO and B2B businesses delivered healthy growth during the quarter. The contribution from CDMO continues to increase and remains an important driver of our long-term growth and profitability profile. Moving to margins. Overall gross margin for the quarter stood at 65% reflecting the benefits of a favorable product mix, increasing contribution from CDMO projects, improved operational efficiencies and procurement initiatives. Margin improvement was also supported by yield improvement alternate sourcing and manufacturing optimization. Aligned with our strategy of building a differentiated portfolio of complex injectable products and advanced drug delivery platforms, our R&D investments continue to remain healthy. R&D expenditure for the quarter stood at INR 772 million, representing approximately 4% of consolidated revenue, an increase from INR 723 million in the previous quarter and INR 664 million in Q1 FY '26, demonstrating a 16% year-on-year increase. Our investments continue to focus on complex injectable peptides, EO products, drug delivery technologies and live consumer products. We remain committed to strengthening our development pipeline and expanding our technology capabilities to support long-term growth. Coming to the facility. Reported EBITDA for the quarter stood at INR 4,930 million with EBITDA margin of 27%, higher as compared to 24% in corresponding quarter of previous year. This is after excluding ForEx losses of INR 36 million in this quarter. Adjusted for noncash, we saw expense of INR 172 million. Adjusted EBITDA stood at INR 5,102 million, reflecting an adjusted EBITDA margin of 28%, up from 25% in the corresponding quarter of the previous year. The year-on-year improvement in profitability was driven by a combination of higher CDMO revenue, favorable contribution margin mix, operating leverage, productivity improvements and cost optimization initiatives, continued utilization improvement across our manufacturing operations and the growing contribution from value-added products also supported margin expansion during the quarter. Other income comprising primarily interest income stood at INR 612 million in Q1 FY '26. During the quarter, there was a ForEx loss of INR 36 million, which is included in other expense as compared to ForEx gain of INR 508 million in Q4 FY '26 and INR 39 million in Q1 FY '26 included in other income. Profit after tax for the quarter stood at INR 3,170 million, representing a sharp growth of 47% year-on-year with PAT margins of 18%. However, as compared to Q4 FY '26, the decline impact is largely attributable to ForEx loss in this quarter vis-a-vis ForEx gain in the previous quarter. The effective tax rate for the quarter stood at approximately 27%. Our balance sheet continues to remain strong and provides significant flexibility to invest in future growth opportunities. As of June 30, 2026, total cash and cash equivalents at the group level stood at INR 35,466 million. External debt remained at a minimal level, and our overall financial position continues to be strong and well capitalized. With healthy cash in hand, we are a net cash surplus company with a net cash position of INR 32,929 million. Cash flow from operations during the quarter remained healthy at INR 3,183 million, reflecting strong operating performance and disciplined working capital management. Our focus on inventory optimization, receivables management and supply chain efficiency continues to support cash generation while ensuring uninterrupted customer service levels. Capital expenditure during the quarter amounted to INR 1,132 million, primarily towards capacity expansion projects capability enhancement initiatives, infrastructure additions and investments supporting future growth opportunities across our CDMO and fill finish platforms. As discussed earlier, we have commenced execution of a recently announced INR 2,000 crores capital expenditure program. Ongoing projects of wild ophthalmic DFS lines, and liposome products, among others, at our India sites remain on track. In addition, capacity expansion projects to cater to the anticipated demand arising from increasing CDM collaboration have been approved and are being prioritized for execution. These investments are intended to support increasing demand across existing portfolio, upcoming product launches, expanding CDM programs fill-finish opportunities and future product and technology platforms. At Cenexi, the CapEx for the addition of new block with [indiscernible] and high speed ampoule line at [indiscernible] are also on track to finish by the end of next year. Overall, we are pleased with the strong path to start to FY '27, quarter reflects the benefits of strategic investments we have made over the last several years in manufacturing infrastructure, capabilities, R&D and customer relationships. With multiple strategic levers in place, and optimal cash deployment priorities, we believe we are well positioned to deliver sustainable growth while maintaining a strong profitability to file. With that, I would now request the moderator to open the line for questions. Thank you.

[Operator Instructions] Our first question comes from the line of Saion Mukherjee with Nomura.

Sir, I just wondered if you can throw some light on this strategic manufacturing agreement, which was announced -- is this with a big pharma innovator kind of company? Or are these generic products? If you can throw some light? And the manufacturing would be largely out of India and whether you talked about $90 million, $100 million of peak revenue potential. So how should we think about once the commercialization starts in 2029, how much -- how would be the revenue wrap up to those levels of $90 million, $100 million since?

So this is a specialty pharma global company. So the revenue is a mix of generics as well as complex and specialty pharma. So probably 30%, 40% of the revenue comes from specialty business. So the portfolio was getting transferred to -- these are all from Indian sites in manufacturing happening at Indian sites. And it's a mix of all these products, including oncology and non-oncology across several spread across different formats and different products. It will also extend into the development pipeline in terms of specialty products what they have. So the estimate that we gave is the preliminary of the products what is getting transferred in next 2 years. But probably, there's a potential to add more products in the future. Now the tech transfer actually will start from September of this year. And the first year will be transferred in 24 months. Every quarter, we'll be filing certain. So the 60% of the products are for the U.S. market, about 50%, I would say. European market and the rest of the world are about 15%, 20%. The Cenexi players are a little part in this as well. They wanted an end-to-end solution for the products because it has to be global supply. So some of the products, which go to Europe, the Cenexi build warehouse certain products and probably a package for you and also do a final QP release for the European market. So that's a role Cenexi will play, but basically, the agreement is in Gland and manufacturing will happen at planned manufacturing sites. To be fair, without Cenexi, it shouldn't have happened in a way. So that's also strengthens our strategic initiative when we acquired Cenexi because otherwise, we couldn't have provided the full desolation for the partner and the revenues will ramp up from '29 because the filings will start happening from next year, and as soon as the products get approved, especially U.S. one, it's an easier one because it's a CY '30 format. So then it started getting launched in CY '29. So it will -- the ramp-up will happen from '29 to '30. So hopefully, by CY '30, we should see this entire portfolio getting launched.

That's very clear. And sir, I just wanted to understand, like could we expect or are you like looking for such type of contracts, which are like for strategic? Can we expect more of such contracts? Or this is like one of a kind opportunity?

So this is -- to be honest, this is what we're looking at because we're trying to give a solution to a big pharma where a lot of the large companies are procuring products from over 80 to 100 different sites because over a period of time, they'll invest products or getting contract manufacturing. So now we're reaching out saying that we'll give us end-to-end solutions for them for different markets. It also helps them in a way because currently, if the sites are in Europe, it's 5 to 6x more expensive than India. So it also helps to get market share in ROW markets, increase the market margins in the products that we're making. And also with the new situation of branded products to be manufactured in U.S. they want to move the branded versus their own sites or the CDMO sites where they're doing, then the operational leverage is lost. So the companies are looking at these kind of options and with the track record we have in quality and the breadth of platforms we provide, it's helping us, yes.

Great. Sir, just one more question before I join back. On CapEx, you had announced INR 2,000 crore CapEx. One is the time line around that. And now with these new initiatives. And you also mentioned in your prepared remarks that new CapEx has also been approved by the Board. So can you share a revised CapEx estimate now?

So I would say for one immediate CapEx is going about INR 165 crores. We're investing in an isolated line in oncology plant, where several of these oncology products are getting manufactured. Likely, we could get a line quicker. So that will be in start in January this year. So this is specific, I would say, a priority for us in terms of -- for this project, what we just announced. And there's another CapEx on the new land collaboration, what we said on the API front.

Yes. So for that, we will be building a block. That also has been starting the product now. And to answer your question, I answer this year, we are going to spend about INR 550 crores CapEX and this will scale up as and we start building the brownfield, which we had already announced earlier. Right now, the [indiscernible], we are adding a new wireline BFS and ophthalmic line. So along with the recently CDMO contract for which we need to spend CapEx of INR 165 crores mentioned just now. This is going to be our priority. And we -- considering the demand and volume growth we are looking at. We need to look at brownfield have been pretty quickly, and that's what we are currently working on.

Our next question comes from the line of Vivek Gautam with -- I'm sorry, GS Investments.

So congratulations on good numbers, sir. I just wanted to understand how sustainable is the turnaround of the NXP and what were the factors behind it? When was it the one subsidiary which was dragging our performance down and now things have improved a lot. Second question is about the -- what is the opportunity size for expected growth rates and our differentiating factor in USPs, which can help us in maintaining the growth ahead, sir.

So from the growth front, we did mention last time that we're looking at 15% CAGR in the next 4, 5 years. With the new contract signing, if you look at some current top line, I think this will cover almost like 12% of our current revenue. So if you -- 3 years down the line, probably it's still about 9% to 10%. So we're reevaluating the CAGR with a few of other contracts we're discussing now with other partners, probably will export have more clarity on the growth for the next 4 years. But as of now, with this new contract in place, we are looking at 20% -- around 20% growth next 4 years. While the current year, we still with the constant currency, we're still estimating -- we're not estimating, but probably 15% is clearly achievable. But we're also looking at a couple of lines like the bag line and the ophthalmic products, we have a tight capacity constraints. Bag line we're expecting approval in the third quarter. If it happens as planned, then probably they began cross 15% but it's a new land to be approved by FDA. So if it's approved by August, September, then probably we'll exceed the 15% growth for this year. But otherwise, we'll be constant [indiscernible] to 15% and then see where it goes for the current year. But I think next 4 years, we're looking at 20-odd percent, but we'll get a clear clarity next quarter. We'll go let [indiscernible] once we also see how the other initiatives that you have taken up in the recent past will pan out, probably we'll get a clear picture by August, September -- September, October.

Our next question comes from the line of Neha M. with Bank of America.

So the 50% DMO number that you have indicated for this quarter. If I were to look at FY '28, probably exit, I understand the big contract is coming in '29. But in the next 2 years, how much of a business do you think would come from CDMO? How does it change our margin profile? Is it fair to assume that CDMO has much superior margins versus the existing standalone margins?

So the idea is to balance between CDM, our B2B business. The target is to reach as a console basis, in a nearby near term, we're looking at 30% near term as a control basis. So next, growth, the target for Cenexi is the profitability there in the top line. So we need to work -- we are working towards that. So today, we are at 28% consol EBITDA percent. So near term, a way to working towards 30%, and we'll see midterm to long term, ultimately always we look like a profitable company. We want to be a profitable company, sitting those 37% EBITDA. Hopefully, [indiscernible] that once we get all these CDMO contracts on track. But for near term, we're looking at -- because we're also growing other businesses as well in the same range of CDMO, and it's a large base. So we still feel -- once we hit CY '28, probably, there should be fewer the CDMO business will be larger than the B2B business. So probably next 2 years, it will be around 50-50 kind of a business.

Understood. And on the [indiscernible] given that we have the impact of heat wave in France. Does that mean that second quarter would end up being better than the usual seasonal decline that we see because of the shutdown, it won't be as sharp because of the shipments would have moved to the second quarter. Is that a fair assumption?

Sorry, can you repeat that?

I think, sir, you mentioned that Cenexi was impacted because of the extreme summer in first quarter. I understand the second quarter usually tends to be seasonally weak, but will the seasonality be lower because some of the shipments would have moved into the second quarter. Would that be a fair assumption?

I would say it will be better than last year, for sure. Some -- because some releases couldn't happen last quarter because of the heat wave. The impact was more on the quality release. So that will help better next quarter over the last year, yes.

And currently, we're still maintaining Cenexi guidance of INR 200 million and high single-digit margins for FY '27?

That's correct, yes.

Our next question comes from the line of Ashish with LEO Capital.

Sir, on GLP-1, could you give us an update on the scale-up of the business? What is the current status of the commercialization and capacity ramp-up?

So from capacity, the new line is on track. We are taking some [indiscernible] batches from some of the customers when we have signed up in the last few quarters. We signed a new contract this quarter again, and the transfer activity will happen in next quarter or 2. The [indiscernible] we signed is both for semi and tezepetide for U.S. and EU markets. Now we are also evaluating when we said that this year, we're still trying to [indiscernible] that 50% constant currency growth. But there are also some positives could be upside. One of our customers has filed in Canada, it would be an opportunity to launch in the last quarter if that happens, then there could be an upside. But otherwise, as of now, it's more of exhibit batches taking for different customers and then filing and then waiting for them to commercialize.

And how should we think about the revenue potential or contribution from GLP-1 over the next 3 years?

Very limited, we have not assumed too much of that because the [indiscernible] volume will come from the U.S. when it goes in FY 2031. So we're not considered much in next few years other than the direct transferees what we get for transferring. So if anything happens in Canada or any other markets for the customers because these are the side of business, we don't have a clear visibility on the front-end approval status of these products. So it's very difficult to assume the number for them. So that's we're keeping close to adjust how that pans out, but that will be upside if it pans out well.

Our next question comes from the line of Chintan Sheth with Girik Capital.

Congrats for the good set of numbers as well as continue to custom new rail and projects [indiscernible]. Just one clarification on the -- on the opening remarks if NXC revenue, you mentioned 68 million units and 2 million EBITDA.

Revenues, INR 48 million revenue and INR 2 million EBITDA.

Okay. It's flat on a Y-o-Y basis. But EBITDA numbers [indiscernible] So EBITDA, you mentioned that because of the extreme sales that also impacted bit of profitability this quarter?

No, the profitability in the same trend like what we said is 4% EBITDA. So by the end of the year, we want to get into double-digit EBITDA.

Okay. Because last year, I think we were at 2% EBITDA, which has improved [indiscernible]. And in terms of the 15 products, which are in pipeline, the ANDAs were the co-development products. What could be the opportunity [indiscernible]? I think [indiscernible] and NDAs, if you can enter any time lines around those launches, if you can provide some insights.

Can we come back to exactly how much is the market?

And for the year, what kind of launch pipeline we are looking at, if you can -- any significant ones, which can [indiscernible] us in terms of growth?

Ladies and gentlemen, the line for the management seems to have disconnected. Please stay with us while we reconnect. Ladies and gentlemen, we have reconnected with the management. Over to you, sir.

I was asking about launch pipeline for the current year. We launched molecules this quarter. If you provide some insight on which are the key molecules to look out for the current year, which can contribute to our growth as [indiscernible]

So the products we launched, we launched MBI [indiscernible] launched Dalba [indiscernible]. And the MBI, we have exclusivity. So we don't see competition coming in soon. It's a very difficult product to make. Dalba, while there is a competition, but still we have enough contracts on place to continue for next few years.

And expected launches, anything to call out, which [indiscernible]

We can come back to you later.

Our next question is from the line of Karan Vora with Goldman Sachs.

My first question is with respect to the CDI business. So just wanted to get a sense with respect to do we have in the current base any products which we are supplying to say, supplying which have patent protection? And what would that number look like, say, 3 or 5 years out?

We cannot read those numbers because some of these belong to customers. There are a few products which are [indiscernible] which is also patent. But if you're talking about innovative products, no, we don't have any innovative products right now. .

Okay. And anything in the pipeline just qualitatively?

It's under discussion. So it's not yet signed.

Okay. Got it. Got it. And is it fair to assume that some of them could also be on the bio side where we were investing in the Bio CDMO front? Or that is mainly -- this is mainly on the small molecule side, what discussions you are doing?