Hester Biosciences Limited (HESTERBIO.NS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Hester Biosciences Limited Q1 FY '21 Earnings Conference Call hosted by IIFL Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Jeewani from IIFL Securities Limited. Thank you, and over to you, sir.

Good afternoon, everyone. This is Rahul from IIFL Securities. I thank the Hester management team for giving us the opportunity to host this call. From Hester, we have with us today, Mr. Rajiv Gandhi, CEO and Managing Director; and Mr. Chetas Patel, Chief Financial Officer. I will now hand over the call to the management for their opening comments, post which we can have the Q&A session. Over to you, sir.

Yes. Good afternoon to everybody. As always, it's very nice to again interact with you as always, and here I am today to talk to you on the Q1 FY '21 results. I'm sure that all of you already have the press release with you. And I would just directly go on to the subjective matters. The ratios, et cetera, are also mentioned on Page 1 of the press note. And after I finish, we would be open to taking question answers. And if there are any specific finance-related question, our CFO, Chetas would answer them. So coming to the business, Q1 FY '21, if we compare it to the Q4 of last year and we compare it to Q1, the sales in Q1 last year, the sales were higher. So were the sales also in Q4 higher. Last year, as you were aware, it was a tough period for us all throughout the year, and there were certain reasons for our profitability reaching to whatever it was. So coming back to the Q1, though, our sales have been less this year as compared to Q1 and the last Q4, we have done reasonably okay compared to the COVID-19 situation, plus in the month of April, where we were in an extremely tight situation because of lockdown as well as transportation issues. We were not able to move material. Coming under life-saving category, we were allowed to manufacture, but then, of course, we could not move the goods. And then things slowly started opening up in the end of April, then May and June. And so therefore, our sales with residual sales in April, we did reasonably good in May and better than that in the month of June. Yes. Totally, we still fell short of the corresponding Q1 at that point of time. As I said, the sales progressed upward. Our gross margins, again, showed a little bit of a decline, and this decline is mainly due to the nature of situation in Q1. Now Q1, due to COVID, there was a situation where poultry farms, dairy farms, all of them were as much fighting for survival as what overall industry was fighting for survival. During that survival time, it would be automatic that the procurement would be done for those goods and services, which are just essential. Likewise, if you talk of vaccines and health products, only the essential vaccines or health products were being bought by the end user and our sale of certain products which would have been otherwise high-value products for selling, like growth promoters, enhancement of weight, improving the efficiency of feed, improving the milk yield, all those type of products, which are even more profitable for us to sell as against a typical antibiotic or 1 or 2 low-cost vaccines, which are given continuously to the poultry farms. So we did sales, but we did sales of products which are lesser in value, lesser in profitability. And therefore, our gross margin showed a little bit of a decline. But this surely was a temporary situation, and things are now getting back to normalcy. At the end of the day, a poultry farm, a dairy, et cetera, they need all inputs, they need all scientific input to take on their business further and to efficiently produce, meat, eggs, milk, wool, et cetera, because ultimately, it is an income source for them. That is the whole basis of their rearing these animals. So I definitely see that there will be a trend change coming back to the usual. Expenses did seem -- have gone down. They could have gone down more, but for the moment, we have succeeded in definitely reducing our expenses partly. I mean naturally because of less travel, less movement, there has been a complete lockdown on travel expenses, along with the actual lockdown and also during this time, we tried to improve and look at certain efficiencies in terms of transport. There was a lot of time that we had on hand in trying to look at various aspects of business, et cetera. So we have taken it up upon ourselves. And as committed in the past calls in my notes, in my report, that the bottom line is as important for us, and it is my assurance and commitment to rise up back to the profitability -- the near past historical profitability that we have shown on a year-on-year basis. So we have already started working on them. And even we have adapted ourselves to the new philosophy of working, reorganizing things, et cetera. Coming to exports. Our exports were 0 in the month of April, 0 in the month of May. But we had pending orders, and we did a reasonable good export business in 1 month itself. And there was a total growth on a quarter-to-quarter basis by 12%, which considering that there was no sale in 2 months and all the sale happened just in 1 month, we are quite happy. And even as we speak in the month of July, also orders are being executed. Now there are international cargo flights that have opened up, and things are definitely looking up for exports overall because of all the hard work that we have put in, in the earlier quarters towards registering, towards creating a sales team, et cetera. And taking things further from here, I definitely, personally see a positive trend, domestic, as well as internationally, and this is visible absolutely in the second quarter. And various internal steps in Q1, which also would impact the coming quarters is that we have always mentioned that we want to reduce the dependency on any one division or any one product, et cetera. We are -- as you know, we are into vaccines as well as health products. Health products include medicines, curative, preventive, growth promoters, et cetera. We are definitely now -- in the vaccine, we have got a reasonable good market share as far as poultry is concerned. On the animal side, cattle, sheep, goat, buffalo, et cetera, 90% of the vaccines are supplied through tender, where there is no actual marketing efforts that we need to make. We have now started focusing aggressively on the health products which in terms of revenues, could be -- would be rather bigger than vaccines overall in days to come. So this focus with health products would definitely make a positive impact as well as make the top line grow reasonably fast. And if you're coming on to the vaccine for the animal health, specifically, the Brucella vaccine as you are aware, I have been saying this, I did mention in the last quarter and in the quarter earlier than that, that we bid. We -- the tenders have been opened. The Government of India was to start procuring the Brucella vaccine from February. Unfortunately, due to the COVID reasons, this whole thing has got delayed in our communication with the central government with the Ministries with the Department of Animal Husbandry. I have reasons -- personally I have reasons to believe that this should start very soon, probably in the next 60 days or so towards the Government of India, starting their procurement of Brucella vaccine for which we are 1 of the 2 contenders for this Brucella vaccine supply under the National Animal Disease Control Program of the Government of India. Talking about the human COVID vaccine. The -- our status remains that things are under research and development. And as committed, we seem to be heading to start the animal trial sometime in the month of November, December. The time line continues to be what we had earlier told. And as far as the current status is concerned, it truly gives us an indication that we are moving positively towards maintaining the time line, at least for this moment. So overall, the COVID pandemic situation has impacted micro as well as macro level issues. It's been a game changer in many ways, and we are working hard towards adapt ourselves to the changing environment as well as towards the changing needs internally within the organization. And there have been -- everything has changed in terms of communication, in terms of people moving, meeting, creating demand, et cetera, all these things, there has been many changes. We are adapting ourselves. And all this definitely, I think, is headed towards getting in more efficiencies into our organization. Coming to Hester Nepal, we have done significantly low because of the lockdown. Nepal, there was a lockdown plus complete stoppage of all international flights. Even as on today, there aren't any international flights moving in and out. So had there been orders, we would have not been able to execute it. There weren't any orders. So it is not that we have lost any business. It's just that orders have not come from FAO, but now things have started moving. Tenders have started coming, and things are looking up. Besides FAO procurement, there are direct country orders. There are 2 orders which we have already confirmed in this financial year. Based on that, what we already have, we believe that we will be able to meet our this year's top line and the bottom line target as far as Hester Nepal is concerned. The focus also is now on the domestic sales. In fact, the sales that we have done at the moment in Nepal, it's all the residual sale, it's all come from domestic sales. But everything was, in fact, more shut than what it is even over here. Texas Lifesciences, our subsidiary, which manufactures health products, as I mentioned earlier, that we intend to focus on our animal health product range, we have made an additional investment. We had a rights issue of INR 1.5 crores, that is INR 15 million towards expanding our assets buying -- we acquired the neighboring plot, which already has a building, which was -- which is rather a pharma formulation unit. So having acquired that, we will now expand our capacity towards producing more of the products that we are already producing as well as adding other type of product range over there like injectables, et cetera. So we would add on to this, and we would grow the business in Texas Lifescience incommensurate to the growth that what we see in Hester Biosciences India, notwithstanding the registrations of Hester of Texas, we would do also independently in Africa. So we would also, in the next 6 to 8 months' time, we foresee that Texas would also directly export to Hester Tanzania. Hester Tanzania, the surprising part or the difference between our lockdown over here and in Tanzania was that in Tanzania, the lockdown implications are now being seen. In the early times, there weren't as many strict -- it was not as a strict lockdown as what we have seen in India. But now things are catching up even over there. The only problem that we have now is that we are not able to move people from India to Tanzania to execute all the installation of equipment, utilities, et cetera. Work is going on there as we see, there is a delay of approximately 2 weeks at this point of time. There could be a little more delay because of this, the inability to move from here to there. But we do not foresee anything major delay because we are also seeing, in fact, in some of the agencies, et cetera, the work has been faster for things which we are not dependent. Anything from outside Tanzania, things have happened fast, the whole construction is over, roads are ready, cemented roads in the whole plant, et cetera. So that way, we are moving reasonably fast in our manufacturing facility that we are constructing over there. And we have got a lot of support from the government in a way that they are very supportive in issuing us licenses, in trying to help us towards every single thing in getting visas, et cetera. There is no delay that we see in terms of our needs. I mean there are no unfulfilled needs that we have as far as the Government of Tanzania is concerned. So overall, it has been a little bit of low sales in this year. If you talk about geography and domestic, we were down by 11% in sales, exports grew by 12%. On the poultry, the poultry division, there was a degrowth of 11%. But on the animal health care, there was a growth of 6% and the overall, as you know, the sales have gone down by 8%. So this is all from me, from my side. And with this, I give the mic back to the host, and I'm willing to take questions.

[Operator Instructions] The first question is from the line of Kuntal Shah from Oaklane Capital.

So I have questions on, we are beginning R&D on human vaccine fronts. But my question was, what are the skill sets, costs and time line and risk involved you perceive in this area? And how does this compare with the animal companion vaccines for pet dogs and cats and all those things because that's an area which is not yet covered by us. Secondly, or as far as diagnostic initiatives are concerned for both poultry and large animals, what are the new products you have in development? And are you planning to set up lab in Nepal and Tanzania, similar to one you've done in Anand. On FMD side, what are your CapEx plans for Nepal, Tanzania and India? And as far as the financials are concerned, can you give the exact number of gross debt and receivable situation and inventory situation, which was pertaining to the last quarter where we saw inventory had spiked to INR 63 crores and receivables was more than INR 58 crores. Also, the question is, we have a healthy cash balance, and we had debt also. So can we -- I'd presume that once our CapEx is over, we will be getting capital grant. So can we use some kind of a flexi term where our cash is better utilized to repay the debt in short term and some kind of short term, we don't miss out on the difference between the borrowing costs and the costs of the money we keep in the bank?

Okay. Question one on human vaccines, time line, et cetera. On the human vaccine side, we are all geared up to complete up to the animal trials at this point of time, and then we would have to take on the commercial or the production and then the human Phase I, Phase II, Phase III, Phase IV trials, et cetera. We are in talk with companies for who would -- who are keen to work with us towards the manufacture as well as, say, taking the human trials, et cetera. So at this point of time, I would not be able to really give you an idea about those things. The talks are at a reasonable confidential level, but definitely, they are at a reasonable high level in terms of finalizing on how we would want to take it further. So we have been able to identify probable partners who would take -- who could work with us towards everything after the animal trials have been successfully over. So that's for the human thing. The second one was diagnostics. You have mixed up 2 things. One is the diagnostics laboratory. And one is the diagnostics kits that we could manufacture. So these 2 are different things. In Anand, we have a diagnostics lab where we get samples and we do analysis on the health of the flock, on the health of the cattle, sheep, goat. Yes, we would, in days to come, have a laboratory of that sort in Africa, in Tanzania, we hope to set up such a lab. At the moment, we have no plans to set up a lab like of that sort in Nepal because the country is very small. Most of our business is export related. Getting the samples, everything from outside into Nepal would definitely be a challenge, et cetera. So that is not what we are going to be doing. On the -- then what was your next question? I mean I...

So another question was on the -- any thoughts on the animal -- companion animal?

Companion animal, at the moment, there are no plans that we have to get into companion animals. We don't see anything in the near horizon to get on to companion animal. Companion animal market is a very big market in the West and in the United States. But in India, that market is relative. I would say, on a relative basis, it is extremely small, and we would continue our focus on production animals at this point of time.

Okay. So my unanswered questions were regarding FMD.

Foot-and-mouth disease?

Yes.

Yes. FMD is a desire that we would get into. We are working and looking at various options. We are yet a little far away from me able to give you a surety on a plan further. If we get into FMD, it will definitely -- that we will construct a new plant, we will raise finances, and we will start the whole project by ourselves. But at this point of time, I'm not in a position to give you any precise time line or a commitment on that.

Okay. And sir, any comment on the -- what is the status of exact gross debt we have right now and is there receivables and inventory situation spilled over from last quarter?

I may have -- just a minute. Our gross debt in India is INR 39.12 crores in Q1 FY '21. As on Q1 FY '20, it was INR 41.35 crores margin reduction.

And the receivables?

And the -- I do not have the receivables figure with me while I am talking to you. But to give you a little idea on the receivables, during the COVID time, we could have done much, much bigger sales had we been loose and had we been more -- less restrictive and not worrying about payment. But we have been as restrictive in our sales as what we were before. Definitely to some clients, we have given more credit, et cetera. But I have reasons to believe that our receivables have not shot up in any which way, higher than what they would have been in those earlier times. In fact, yes, while I'm talking to you, our receivables are -- this is in -- 44. And in Q4, it was also 44. So it has not gone up at all. Marginally by some INR 10 lakhs or something like that.

So we have capital work in progress in Tanzania, around INR 74 crores, and we have debt of around INR 76 crores, and we have cash of around INR 23 crores. So is there some way to have some kind of working capital which gets knocked off. So we don't end up paying the difference between the cost of keeping money in our bank versus cost of borrowing? And what is the cost of borrowing, anyway, we are incurring in this?

Our cost of borrowing is 3% per annum. Yes. So probably, that answers your question that it is not a thing. And our focus right now is just setting up this whole plant properly. I mean even as we have money, we have not deployed funds anywhere in trying to reduce our -- or earn something out of all those things. We have just kept it. It's a foreign country. We are very conservative in this way, and we would want to play it conservative.

The next question is from the line of [ Viraj Mahadevia ], an individual investor.

Rajiv, not bad results, I guess, given the circumstances. Couple of questions from my end. One is, Hester achieved sales of poultry vaccines and health care products of INR 100 crores to INR 125 crores. Clearly, these were difficult conditions for poultry customers. Can we assume INR 125 crores as a base for this business?

And you are talking at vis-à-vis over last year's turnover?

That is absolute amounts, INR 125 crores. Is that the absolute bottom level for this category?

No, no. We will do more than that. Yes.

So this is the worst it will get, is what you're saying?

Yes, yes. I mean yes, yes. Absolutely.

That was the question. Can you share the value of exports in consolidated sales in FY '20? And what was the growth during the year? And what growth do you expect in the new financial year?

I do -- on a consolidated basis, where is the consolidated? There are so many -- sorry? Yes. The approximate growth in terms of export in terms of percentage has been 11%.

In FY '20?

In the whole -- no, I'm talking about Q1. In FY '20, I think, I would have shared the figure earlier with you last time in the call, but the total exports, yes, they were around 10% or something as compared to the sales last year, if I'm not mistaken. Yes, they were around 10%. This year, it has gone to 11% in Q1, but this percentage will definitely increase. I mean you can imagine there was 0 sale in April and May.

Right. So the share of exports this year will increase?

Yes, yes. The share of exports will increase in domestic versus international business, and the share of health products will increase in terms of vaccines versus health products.

Then tell me, Rajiv, if health products increase, I would suspect health products are slightly lower-margin products, right, versus our vaccine? So if we have an adverse mix change towards health products, our blended margins will move down? Are you suggesting that?

Our selection of products is such even on the health products, that, yes, there is a little difference. But the difference is little, as I said, it's not something that here, we have gross margin, while if you take our gross margins in the 60s, but then the health products are at a gross margin of 40s. So that the whole average shifts, it's nothing of that sort.

Okay. Okay. Understood. Can you share the status of Brucella and PPR for India as well as PPR exports from India and Nepal?

PPR -- I'll tell you, last year, we have -- see, these are figures of last year, which I would have covered in my last -- in my call last year, and because we have done reasonably well in Nepal, where we converted ourselves into becoming profitable. In terms of -- we have reasons to believe that Q1 has gone dry. But Q2, Q3, Q4, we will make up, and we will definitely cover up because this movement is going to pick up. There is no other way, but for the movement to pick up. In terms of Brucella, the tenders are out, bids accepted. It's just a matter of time before which the business would start for Brucella vaccine in India and that in itself is -- we are looking forward to that business.

Excellent. And can we assume that the working capital terms on these tenders are pretty reasonable and in line with your broader working capital or can we expect...

Absolutely. I can tell you that there has been no delay as far as -- I mean, this is the first time that we would be dealing under a central tender, but we have been supplying Brucella, PPR in India to states. Everything is -- it's more or less in line with our usual credit terms. It's nothing extraordinary at all. It's completely secured, to answer your question.

Sorry?

Yes, it's secured. It's fully secured.

Okay. Perfect. Last question, Rajiv, you mentioned that there's some cost cutting that you all have done. Clearly, in the last call, you mentioned that we are increasing our field force for the field sales and marketing. So that's going to increase, I guess, some of the employee benefits expenses. So I mean, you're talking about other expenses as the category -- as you reported it, where you all are looking to prune costs, and this will be the new normal going forward?

Yes. One is, of course, there has been no salary cuts in the organization, but travel costs have come down tremendously. And a lot of other administrative operational costs, we have cut down. And that definitely is helping us. And you will see this -- see, in this quarter, had our sales been even higher by INR 2 crores to INR 3 crores or INR 4 crores, Viraj, the whole thing would have appeared differently because if you see our costs and everything has gone -- our costs have gone down in this quarter itself. It's the lesser sale that is making us compare ourselves with Q4 in terms of expenses or corresponding Q1. But had this quarter had given us a little more sale, I mean, our figures would have reflected that very easily.

The next question is from the line of [ Udit Jain ] from KARVY Stock Broking.

I wanted to ask about how do we see the health segment going forward, let's say, 3 to 4 years down the lane.

Health segment is a big, very big segment. And I think this segment is definitely going to grow. We are adding more products. We have many products in the pipeline to come up. And if you see a typical animal health company worldwide, the sales of their health products is always much more than the sales of their vaccines, maybe 2 or 3x. We are one of those very different or whatever you call it, where vaccine sales is some 3x or something to that of the health product sales. So I think the opportunities are immense, and we are now putting in a lot of efforts as far as health products is concerned. Another thing that I would want to -- just I remembered right now while talking -- while I was answering Viraj's call that he mentioned that the gross margins would be less. The capital investment required initially to make health products is far more lesser than what it requires for vaccines. So our initial cost, capital cost itself would be very low. That would also contribute towards higher profitability. And so coming back to your question, health products is definitely a growth area that we are looking at very seriously. And when I say health products, it includes medicines, health products, growth promoters, disinfectants, et cetera.

And sir, when you say the health segment should be, let's say, 3 to 5x of the vaccine segment, do you feel that kind of customer level awareness is there in India to take that forward?

I mean to give you some -- I mean, I do not have statistics to give you an idea. You can take some of these companies that are big in India on the animal health side, Virbac, and you can say, Zoetis, you can even take the Animal Health division of Zydus, et cetera. I mean their 70% of the sales would be coming from the health products, and that too on the animal side rather than the poultry side.

The next question is from the line of Krishna Parikh from Sameeksha Capital.

Congratulations, this was a good quarter, given the scenario. I just wanted to ask what was the maintenance CapEx for FY ‘20.

The maintenance CapEx in the sense the engineering side, the maintenance of the plant? I have not understood.

So the certain CapEx that you have to do to maintain the capacity is at the same level?

Okay. Okay. I do not have that figure in mind, but I would not mind sharing that figure with you. I do not have it right now.

Okay. That's fine. That's okay.

With all the papers that I have, but I don't have this figure with me. I'm sorry. But I will share it with you, nonetheless.

Okay. And also, Hester Tanzania, I might have missed that part, but why are we having such a huge increase in profit?

Hester Tanzania is a trading company, and products over there in Africa are sold at much more higher prices than what they would be sold over here. So it could be that this quarter we sold products where our profitability was even higher than what it would have been otherwise. So it would have just been that product mix. The sales, yes, the profitability is high, but the sales are low. I have not dwelled into myself on actually the product mix that has been sold over there because there are health products as well; it's not just vaccines alone. So -- but profitability overall in Africa is higher than what it is in India.

Okay. Because we have doubled our sales, and I think more than, I think, from INR 0.25 million to INR 3.78 million is the profitability. So that's a mind-boggling jump. So...

Yes. No, no, I'll tell you. See now while I -- while you were asking the question, I was just -- internally, I was being told that there are 1 or 2 products, and there are 1 or 2 customers from where we got some specific orders, which were extremely highly profitable. So over and above the normal profit. So that has also contributed towards us making this high level of profit in Tanzania.

[Operator Instructions] The next question is from the line of Manish Jain from GormalOne.

Rajiv, first of all, congratulations on very steady numbers despite the COVID background. Now on a strategic level, the world has realized how difficult it is to make vaccines. And your vaccine range will be the largest in the world once Tanzania starts. Now you have mentioned in your press release that certain game-changing impact, longer term, has happened for Hester. So can you just give us some insight -- strategic insights, what are the positives -- broad positives and negatives longer term, which has happened due to the pandemic?

See, due to the pandemic, there was a lot of time for introspection, not only for us, for I'm sure everybody, all of us who are on this call and everywhere in the world. So it has given us a lot of time to think and relook at things which probably we -- I would not say doing it wrong, but we would have been doing it in a certain manner, but because of the constraints that -- one, because of the constraints of actual business not happening and two, because of a lot of time in our hand, we started viewing things in a different manner and trying to make sure that how we are able to really move further with these changing things. Another thing is that I have come to a firm conclusion that on the marketing side, the cost of marketing due to the travel, the movement of the sales team, definitely, the marketing costs should go down not only for us across horizon for most of the companies, whether it is rural or whether it is urban marketing, because marketing through talking on the phone or video conferences or trying to show it through the laptop. A simple thing is what I'm trying to say, is that even in terms of annual report being printed, now we don't have to print the annual report. So all these things all put together, they have reduced our costs. Even internationally, people are now willing to talk, willing to discuss. I'll tell you earlier, we had to go to certain countries to talk to their higher officials. During this time, we have been talking to 2 government officials and all is -- everything is on video. And now hopefully, we might be getting the PPR orders directly from the country. So this whole travel cost, one, it is going to change. And in terms of efficiency, I think it'll have a long-term impact because we have been internally thinking on many of these things and how to change things, et cetera. Another thing is that we have spent a lot of time in reorganizing things internally, looking at projects, which projects have been doing good, which have not been doing good. In the earlier times, when you have been just busy continuously doing things, you overlook many of these things, and you just hope that things are happening. But all these things, overall has changed. And I think the mindset of people is now much more clearer, and as no physical meeting is required to do business, that in itself is a very big change, I would say.

Great. And I just needed one clarification. You were mentioning that Brucella opportunity in India is around INR 100 crores per annum. PPR is around INR 12 crores to INR 15 crores per annum. Conservatively, how much share can Hester get from that?

In terms of our production capabilities, given a 6 months' time, we could gear up to any level as what the Government of India might want us to produce Brucella vaccine, but we would definitely need 6 to 8 months' time to gear up. As on today, if you ask us what is our capacity for Brucella vaccine, we are, in any case, geared up to around, you can say, around INR 40 crores.

The next question is from the line of [ Manish Gandhi, ] an individual investor.

I just have 2, 3 questions. The first question is related to Tanzania plant. So is there even a small risk of we're not getting the funding from Bill Gates and...

0.

0. And...

The money has already come in our bank account.

Okay. That's great. And so pardon me, I always ask about risk part. The second thing is our dependence on say, FAO tenders, and as we have seen in India and Nepal, that it's a lumpy business. And what is happening in the world geopolitically, and there are murmurs of WHO structurally going -- we don't know. So how dependent we are? And what are the risks you see in even Tanzania regarding that?

Tanzania plant has not been constructed or not been planned for FAO tenders. Nepal, definitely. We are concerned with FAO and not WHO, but yes, both belong to the United Nations. On the other side, as FAO tenders have happened less last year, there have been countries who are now directly even buying the PPR vaccine from their own funds rather than waiting for FAO tenders. It's something like this, that PPR is a disease which is causing a lot of commercial loss in sheep and goat farming. And this loss can only be mitigated by use of PPR vaccine. And the cost benefit ratio is like 1:100, you spend INR 1 on a vaccine, you save or you earn INR 100. So even to whatever happens in terms of funding, yes, things can get delayed. But I would say that there is no chance of this becoming an issue that oh here, we have a plant, and now nobody is buying PPR. No chance at all. If you look at the world requirement, what FAO was to spend on 1-5, $15 billion in 15 years, $1 billion every year, in $1 billion, say, 50% of the cost goes towards buying the vaccine and 50% administering, 50% is $500 million. Let's talk of business which is coming to 10% of that. Even if it comes to 10% of them, trust me, we would be running around helter-skelter trying to execute orders.

Let us hope for the best. And lastly, Rajiv, so in animal health, as you suggested, so we comparatively -- a late entrant into animal health and vaccines. And our competitors are much bigger than us in size, say, 3, 4, 5 years before when we started. So how our competitive position has moved vis-à-vis competitors? And why...

In terms of -- yes, we are a small player at the moment on the animal health, I agree with you. On the -- but on the vaccine side, figures are available on the net, tenders that have been issued by states, supplies that have been made as far as PPR and Brucella is concerned, anybody can verify that data. Hester Biosciences in terms of PPR, we have made supplies to 8-0, 80% of the country's state tenders that have been issued and in Brucella, we would be more or less at that level, maybe 10% less level, say, 70%. So in terms of company, yes, in the turnover, we would be smaller. But in terms of this particular vaccine, because other companies are even making other vaccines also. So if you look at Brucella and PPR alone, definitely, we are bigger than any company that you would say. In fact, I would want to make one bold statement for all of you to know, Hester Biosciences between India and Nepal, today is the world's biggest supplier of PPR vaccine. There is nobody, even half of our size who has supplied, I mean, who has -- there's nobody big who has even made even 50% of supplies of what Hester Biosciences has made in the world. So that's something which definitely should give you an idea as far as our vaccine capability is concerned. In terms of health products, we are growing the business. We are very small. We know we are very small. There are companies which have even in India INR 100 crores, INR 200 crores, INR 300 crores turnover. We are working towards becoming big.

Right. So do you plan to take market share from others? Or do you feel that market itself will grow in animal health product? And why, if I'm a farmer, if I'm buying some bigger competition, will now buy product from Hester?

One is that we have to snatch something from the current market. I cannot say that our products will only be penetrated where the market is growing. Definitely, we are here to take a part of the existing market share. And why should one buy our product vis-à-vis the competitors' product or what they're already buying, that is for our sales team and us to pursue, push and convince them and to make them buy. This is a continuous process for anybody in marketing, anywhere in the world, whether it is vaccines, computers, health products, furniture, anything. So we have to push ourselves in, and we will push ourselves in. That's all.

The next question is from the line of Anirudh Shetty from Solidarity Portfolio.

Just to continue with the last question on the market share gains on health products. So do we have any sort of cost advantage, like a better product that will allow us to gain market share?

I mean everybody says that their product is the best, so do we also. But there are competitors, everybody selling similar products, if not similar, a little change in formulation, et cetera. It is at the end of the day, our marketing capability, the philosophy and the zeal, the zest, the determination and the technical inputs of a product with which we try to sell a product is going to make a product sell. So I mean, product is good, and a lot is also on the marketing capabilities of the company. All companies, whether it is animal health or anything, everybody has similar products. So we definitely -- I cannot say that our product, ProtinC or some other product is the only product, and it is completely different, et cetera. I would -- It would be a wrong statement. But we have to show what are the benefits of our product. The cost-benefit analysis has to be given, and we will try to sell our product that way.

Okay. And sir, and then my next question was on the FAO PPR opportunity. Intuitively, it seems very large. But just wanted some sense on if you guys have done some math on over the life of this program. Essentially, how many goats or sheep will be vaccinated and approximately what is the cost for vaccine? So then what can the market opportunity be for this?

Yes. Point number one, it is not an -- it doesn't -- it's not intuitive. There is an FAO document that is available. And if you have access to that, if you can just do a Google search on FAO PPR, you will be able to access that document. I do not have those figures ready with me in hand right now. But over 15 to 20 years, they want to eradicate this disease. There is a past -- there are past historical data available on how a disease has been eradicated. For example, small pox in human being, rinderpest in cattle. So there are instances. This should be a repetition of what has happened in the past. And there is a good reasoning available for succeeding towards eradicating this disease. To answer your question, I do not have specific figures in hand right now, number of sheep going to be vaccinated, et cetera.

Okay. And just a basic question on the vaccine. So just for our key products like PPR, Brucella and some of our poultry vaccines, what is the frequency the animal or the poultry needs to be given the vaccine? Is it like a onetime thing? Or does it have to be given over the life?

Various disease -- yes, yes, various diseases have to be addressed in a different manner. To give you a simple example, one takes polio vaccine once in one's lifetime, while you might take an influenza vaccine every year. So likewise, there are some diseases which require a onetime shot, some diseases, which require a repetitive shot. Now the repetition depends upon the characteristic of the disease and the animal or the host's ability to have the protection against it. So different diseases have different ways and vaccination schedule. In poultry, Marek's is a disease where you only vaccinate them once on day one of the 1-day old chicks. Brucella is a vaccine, you vaccinate only once to a calf. In poultry, there are -- see, PPR and all these vaccines are to be given repeatedly. In poultry, there is a Newcastle disease vaccine live, which might have to be given every 3 to 4 months, depending on the nature of the disease in that environment. So each disease has its own characteristic and the host's ability to protect itself from that.

[Operator Instructions]

I think the questions are over.

No questions in the queue as of now.

Okay. Then I just ...

So over to you all for closing comments.

Yes. So thank you all for being there asking questions. If there are unanswered questions, please direct them, directly to me, I would make sure that I would satisfactorily answer all the questions towards -- I think there was a question on the maintenance. We'll even try to answer that question. One more thing that if you all have seen our press note, on Page 3, in the end, we have given the link for the Brucella disease and the Brucella disease vaccine, a film that we have made as Hester Biosciences. I would urge each one of you to have a look at this video film. It's not for the promotion of the vaccine to any one of you, but it will give you a little idea on the Brucella disease. It's just a general knowledge that could help towards understanding the Brucella disease as well as the vaccine. So with that, I thank all of you to come onto the call, taking out time, considering us as relevant enough to come and hear me out and ask questions. Hope this thing continues in future, every quarter. And thank you all once again, and we shall remain in touch. Thank you.

Thank you. Ladies and gentlemen, on behalf of IIFL Securities Limited, that concludes this conference. Thank you all for joining us. And you may now disconnect your lines.