Jubilant Pharmova Limited (530019) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the Jubilant Life Sciences Limited conference call to update on company's position with respect to COVID-19 pandemic. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vineet Mayer, Senior Manager, Investor Relations from Jubilant Life Sciences Limited. Thank you, and over to you, sir.

Thank you. Good evening, everybody. I'm Vineet Mayer from Investor Relations at Jubilant Life Sciences. I thank you for joining this call. The purpose of this call is to provide an update about the company's position with respect to COVID-19 pandemic. We would discuss our fourth quarter FY '20 and full year '19/'20 financial/operational performance and business outlook in our fourth quarter earnings call and disclosures after our Board meeting in May end. We would appreciate your questions at the end of the call, are restricted only to the company's position with respect to COVID-19, and not to discuss specifics of the Q4 and full year '19/'20 performance, financial guidance and outlook. I would like to mention that some of the statements made on the call today may be forward-looking in nature and a detailed disclaimer in this regard has been included in the Q3 FY '20 press release that has been shared on our website. On the call today, we have Mr. Alok Vaish, President and CFO; Mr. Pramod Yadav, CEO, Jubilant Pharma; and Mr. Rajesh Srivastava, CEO, Life Science Ingredients. I now invite Mr. Vaish to share his comments.

Thank you, Vineet. Good evening, everyone, and thank you for joining this call. The world today is in an unprecedented situation brought on by COVID-19. Most of the countries impacted have been surprised and shocked by the speed and magnitude of the spread of COVID-19, and the effects it has brought on to the governments, people and economy at large. This pandemic has the potential to become one of the worst health crisis the world has seen in recent memory and also disrupt the world economy in a very significant way. Closer home, Indian government has taken some very tough measures to break this chain of transmission, while these are the right measures, but they also have huge economic impacts to the business, livelihoods and more particularly, to the low-income daily wage earners. We are already witnessing a huge migrant crisis, which could have some long-lasting effects. In this highly uncertain and volatile backdrop, we're doing this call with our investors and stakeholders to address their concerns and provide an overview on how this evolving situation is impacting our various businesses. The company is taking numerous proactive steps to mitigate the impact of COVID-19 on our operations, including leverage business continuity plans. The good news is that we are currently witnessing steady performance across our businesses, which is a result of strong position in our various businesses, geographic diversity, and the recent initiatives that we have taken -- we have undertaken globally to mitigate the impact of COVID-19 related disruptions. Most of our businesses are under essential commodities category. And hence, we are able to maintain near-normal production, barring a few instances, which we will elaborate upon shortly. Logistics considerations have been complex due to COVID-19; however, thanks to our plants and supply chain teams working tirelessly, we have been largely successful in mitigating these challenges. These include several measures we have undertaken recently to further diversify our supply chain through initiatives such as alternate vendor development. We have ensured adequate stocks of all key materials -- key raw materials in our businesses, along with security of future supplies. Our strong supplier relationships and engagements have ensured that we have not yet witnessed any significant variation in the availability and purchase prices of key raw materials. We have been taking proactive and preventive measures to protect the health, safety and well-being of all our employees and their families, business partners in local communities during these challenging times while maintaining safe and reliable operations. We have implemented several measures to protect the health and safety of our workforce while continuing to deliver products as well as medicines for patients who need them. These actions include a mandatory work-from-home policy for a global workforce, who can perform their jobs from home as well as restrictions in business travel, workplace and in person meetings. As it relates to manufacturing personnel, we are taking every precaution to ensure the safety and health of our workforce, who are coming to each of our sites to perform business-critical activities. We are following the direction from local health and government authorities in the various geographies and continue to monitor the situation closely and update our measures as appropriate. With this, I would like to request Pramod to talk about the impacts in our Pharma business, followed by Rajesh to discuss the LSI business. Over to you, Pramod.

Thank you, Alok, and good evening, everyone. In our Pharmaceutical business, we continue to execute in our ability to supply medicines to our customers and health care providers. We are diligently monitoring our manufacturing and supplies facilities in the United States, Canada and India. While we have had some disruptions, we are happy to state that largely we have been able to keep the plants running and producing the medicines and not disrupt their supplies to the health care sector across geographies. Currently, we hold adequate amount of safety stocks at appropriate levels based on anticipated needs. On the demand side, as of now, we have not witnessed any significant impact on most of our businesses, and we continue to provide important medicines to serve those health care providers and patients with urgent and significant treatment needs. The businesses where we are seeing some impact, our radiopharmacy and the allergy therapy business, where hospital visitations and visits to allergists have seen some reductions. We are monitoring this very closely, and we'll have a better update during the Q4 earnings call. Let me now share some good news on the regulatory fronts. Our Solid Dosage facility at Salisbury, Maryland, USA, has received Establishment Inspection Report, EIR, with Voluntary Action Indicated, VAI, status from the U.S. FDA in the respect of the inspection conducted by regulatory agencies from February 24 to February 28, 2020. With the receipt of the EIR, the inspection is then successfully closed. The Nanjangud API plant update. I would like to update you on our API Nanjangud plant operations had been temporarily suspended for a few days due to positive testing of 2 employees at the plant for COVID-19. The company assigns utmost importance to the health and safety of its employees as well as of the nearby community. We are taking all necessary precautions, including sanitizing the facilities, ensuring quarantine of all the employees, and importantly, following government protocols. To facilitate the well-being of our employees, we are arranging food and other necessary items. Additionally, our CSR team are in the field, spreading awareness and ensuring the safety of the community. This includes distributing masks and soaps, sanitizers and providing all the help and support to the community and local administration. We are taking further steps through these existing measures to prevent such cases at our other facilities or offices. We don't anticipate that the situation will have a material impact on the company's performance at the consolidated level. Also, we have adequate finished goods at the API plant and also API at the Roorkee plant, which will ensure that impact of this temporary suspension will be minimal. With this, I would like to turn it over to Rajesh.

Thank you, Pramod. Good evening to everyone. As we all know, we are passing through an unprecedented situation due to COVID-19. My best wishes to you and your family to stay healthy and safe. I would like to give you an update on what actions we have taken at our end to maintain business continuity, keeping in mind the health and safety of our employees and all the stakeholders. As early as 5th of March, when we started hearing about early stage of COVID-19 spread, we have immediately taken several actions: including stopping domestic as well as international travel of all our employees; and restricting entry of visitors to all our facilities. Our employees were informed to report immediately, in case, they feel any early symptoms and take rest at home for the next 14 days. In this regard, I'd like to thank all our employees, vendors, suppliers, customers for their cooperation with us to implement these measures to avoid any untoward incident. Now coming to our business. I am pleased to inform you that we continue to operate all our plants. This large number of products manufactured by us are falling under essential commodities, which are being supplied to pharmaceutical, food and nutrition industry, et cetera. In doing so, we have been abiding with all the necessary government regulations, which are presently advised or may come from time-to-time to support fight against the pandemic spread. We have also been able to source raw materials globally to operate our plants with forward planning and maintaining adequate inventory and working closely with our suppliers. We undertook several measures in the past to diversify our supply chain through initiatives such as alternate vendor development. This has ensured that we have adequate stocks of all key raw materials in our businesses, along with security of future supplies. Our strong supplier relationship and engagement ensures that we have not yet witnessed any major variation in purchase price of key raw materials. On the demand side, as of now, we have not witnessed any major impact on most of our business. Our global customers continue to operate their plants and have been asking for regular deliveries of our products. However, as you know, logistics and transportations are currently remain slow in India, driven by the lockdown. However, now with the guidelines issued by Minister of Home Affairs, allowing all essential as well as normal truck movement, this should help greatly in facilitating movement of the [indiscernible] -- in coming days. DDDS updates, the Drug Discovery and Development Services update. We are witnessing stable demand for our Drug Discovery and Development Services business from international customers. Both Noida and Bangalore sites are currently operational and working as per their service delivery plan. However, due to lockdown, we are witnessing lower employee turnout, which is improving day by day. With this, we would like to conclude our opening remarks. We will now be happy to address any questions that you may see.

[Operator Instructions] The first question is from the line of Rahul Veera from Abakkus Asset Managers.

Sir, I wanted to understand the demand side of -- on the Chemicals division for us, how is that -- I mean, what is happening on that side, sir?

Sorry, Rajesh, we're not able to hear you.

Hello?

Yes.

Can you hear?

Yes. Yes. So as I said in my speech, most of our customers in international market as well as in domestic market, we have not seen any impacts on demand, except for some logistic disturbances in India. So from demand side, we don't have any problem as of now. It looks that all our customers are needing material because they are operating. Even in Europe and U.S., we keep getting the customer requirements and orders. So we have not seen any setback in demand.

Okay, okay. So where are in the demerger process, sir?

So on demerger, we have done the first step where we have received the NOCs from the stock exchanges. We have filed the scheme with the NCLT. And as things stood before COVID, we were looking at time lines of maybe around July, August, to get that completed, but with this COVID situation locked down and NCLT also in that mode, we might have to see some delay on that. So it's an evolving situation depending on when the lockdown gets lifted up and how quickly NCLT will be back online to look at things. So if these -- I think there will be some bit of delay. Beyond the July-August time frame, it's what we're expecting earlier.

The next question is from the line of Nimish Mehta from Research Delta Advisor.

Firstly, I just wanted to know how much of the inventory do we have in terms of, how much is it likely to last them? How much time will it take to replenish the required inventory, it is imported from China? So are there -- is there any likelihood of disruptions there? Going forward and so far not, when I understand, but going forward, is there any likelihood of disruption there?

So I believe your question is about Roorkee if I heard you correctly?

Yes, imported inventory from China. Basically, imported materials from China and the related disruptions you might have.

Yes, so this is Pramod. When the China had the lockdown over there, that time, we really didn't have any impact because we had the inventories. And immediately after the lockdown, we have been able to move the inventory through air. So on our Roorkee business, we didn't see any impact because of China inventory. As of now, from the China, all the plants, more or less, there, are operational, and we are seeing movement of material.

But is it back to the old levels where they used to supply whatever the inventory we require? Are we back to that level? Or is it still lower than that?

So yes, one is that we are not buying everything from China. In fact, for the Roorkee plant, our dependency on China is not much. And whatever we are buying from China on that for the Roorkee, we don't see any issue as of now. We are seeing the material flow.

Okay. Okay. The second thing I wanted to know was is there any absenteeism in the plants that we see? I mean, are people coming, whoever should be coming to the manufacturing? I mean, are they all coming? If not, what is the rate at which the absenteeism we're seeing?

So if this question is for the Pharma business, I can say that we are seeing some absenteeism in the Roorkee plant, not much in our operations at North America. Of course, little bit impact will be there, but not significant. And the Nanjangud plant, I mentioned, currently the operations are suspended. For the LSI business...

And for...

I'll turn over to Rajesh to give an update.

Yes. So for chemical plant, as you know, that we have because of the lockdown -- we have really asked those employees to come where we have material to produce and where we don't need to produce, we are not running the plant. So we are going as per the demand, what -- of the customer to produce. So we are actually not going full hog of production. So we have to maintain the physical distancing. We have to maintain -- we have to take care of the safety of people. So we ourselves are calling those people, who are required to be in the plant. And therefore, in general, the employees' strength in the plant is lower than normal. And this is exactly what we are doing very strategically wherever it is required to run our facility to meet customer demand, we are doing that.

The next question is from the line of Amit Goela from Rare Enterprises.

Sir, you -- this is regarding your pharma operations. Unlike a lot of other companies, you have a fair amount of operations based in U.S. and Canada itself. So where -- their situation is quite different. There is no lockdown there, but we keep reading a lot of things about U.S. also. Could you throw some light on your U.S. operations, please?

Yes, so this is Pramod again. In U.S., we are seeing mixed response across our businesses. So if you talk about Solid Dosage Forms there, we have not seen any impacts on the demand. Rather, the demand has little bit gone up because there, our most of the products are the maintenance products. And government, as of now, here has relaxed the prescription fill in time lines. So the people are buying a little bit more. On our content manufacturing operations also, similarly we have not seen any impact of the demand. So there also, demand remains fairly stable. We have seen some impact in our Allergy business, and we have seen some impact in Radiopharma business because in both these businesses, the product also have the use for the elective diagnosis, where as of now in the medical system, there is too much of the pressure, so all those diagnoses are being postponed.

But you're not experiencing any issue in your dosage or your contract manufacturing right now?

That's correct.

Okay. And no issues in running the plants and all that also? What is the arrangements?

No. So as Rajesh said earlier, all those employees who can operate from home, we have already asked them to operate from home. Those who require to be at the place of manufacturing, those employees are coming. And we are running operations successfully as of now.

The next question is from the line of Tushar Manudhane from Motilal Oswal.

Sir, just on the capacity utilization for the pharma and LSI separately with lower employees at the plant level?

Sorry, can you please repeat the question?

Just would like to understand the capacity utilization currently? Given this employees all -- less number of employees coming in at the plant level?

Yes. So for the North America, I'll say that in all the manufacturing location, the business is running as usual. We have not seen any impact on capacity utilization than what it was previously. For the Pharmaceutical Indian operation, Nanjangud plant operations are suspended as of now. And for the Roorkee plant because of the lockdown, some of the employees do face problem in reaching at the operations. So that plant is the -- as of now running a bit lower than the capacity. For the chemical plant, I'll ask Rajesh to give updates.

If you could quantify for Roorkee plant?

Yes, this is Rajesh Srivastava. It will be difficult to quantify because the employee strength changes almost on a daily basis. So when the lockdown happened, there was an immediate impact. But thereafter, day by day, we are seeing improvement because now slowly, slowly things are stabilizing. Government has given the permissions. Pharma, as such, coming into the essential commodity, so the government has included the passes. We are bringing employees through the bus. So we are making all the arrangements, by which those employees are needed to be at the place of operation are able to reach. We have taken permission from district magistrates to bring all those employees by the bus, drop them again by the bus and ensuring even that all the social distancing norms are being maintained. So all those arrangements are paying the dividend and day by day, the capacity utilization is improving, but it's not yet optimal.

Okay. And on the LSI side?

Yes. So on LSI side, again, it's very difficult to talk about product wise. But in general, as I explained to you, that we are first prioritizing that all our dispatches start taking place. The customer demand starts moving out. So currently, as you know, we are facing challenges on logistics. So the government is doing overnight to really help businesses to start moving material. And last 4, 5 days, we will start seeing that now the material is moving. As you know, you may be aware that now domestic movements is very smoothened, but still we are facing challenges at the port level in India. So therefore, depending on what material is moving out, we are operating our plants. So it is very difficult to say what percentage is product-wise, but one thing I can assure you that as and when we get opportunity of dispatches, we move the material and we replenish by production. So that's the way we are running our facility. But I can't tell you that we are meeting 100% of our customer demand, mainly because of logistic challenges, which I'm happy to share that there is a significant improvement in last 4 days, 3 to 4 days. So I'm very hopeful that in coming days, going forward things will smoothen and our plant utilization will keep improving.

Okay. That was comforting. Apart from social distancing, any specific measures we are taking so that whatever happened at Nanjangud plant do not repeat as any other plants?

Yes. So let me tell you some of them, like we are doing 100% compression monitoring, right? So that is happening. Some of our employees who are coming from outside, we are keeping a full track of their movement and we are asking them to declare that they are not going and meeting anyone. And then we are making sure that some of the people who are coming by the bus, we earlier used to run 1 bus, now we are running 3 bus as against 1 bus, so that everybody can sit in distance. And every day, these buses are being sanitized. At the plant level, we have asked people to do the washing off hands 2 to 3 times in a day, and there are availability of sanitizers at every plant. And also the food, earlier we used to offer the food in the canteen. Now we have closed the canteen for sitting and eating. We have asked the canteen person to pack the food, and we are giving the packed food to the employee at his workplace, and we are not offering the tea in the group. So a lot of initiatives and actions which can led to keep the physical distancing, but the operation running has been taking place. There are many, many. There are minute work has been done by the team to ensure that we can run the operations safely.

The next question is from the line of Alankar Garude from Macquarie.

Firstly, sir, can you help us understand the debt repayment schedule for the next few years?

So we have these -- at the pharma level, we have these bonds, which are outstanding, 2 tranches of $200 million each. The first tranche was raised in 2016. That comes up for repayment in 2021, October 2021, about 1.5 years from now. And then the second tranche was raised in 2019, and that obviously will go until 2024. So there's a fair bit of time there. So in terms of debt repayment on the pharma side, those will be the only significant part that comes up next year. On the LSI side, we've just refinanced our NCDs to repay the bank debt that we had raised. So there is a fair bit of time on those. Those, again gets staggered in terms of repayment over a 3-, 4-year time frame. And then rest will be the working capital facility.

Understood, sir, that's very helpful. And secondly, with so much of uncertainty, are you looking to scale back on your CapEx plans for FY '21? And also if you could just help us understand if there are any cost control initiatives, which you are thinking about?

So on the CapEx, for sure, given this uncertain environment, I think we will be looking at everything with a lot more sharper focus. And our intent would be right now to kind of maintain enough liquidity for the business. So I think we will try and make sure we only kind of take care of maintenance and regulatory CapEx. Any new CapEx, obviously, will be kind of put on hold for some time till there is some bit of confidence back in the economy. And the business, from an outlook perspective, I think, till that time, we will try and hold back on some of this new CapExes. So it's a developing situation. As things stand today, that's our philosophy. But hopefully, things will turn around fast. Then we will look at revisiting any of these decisions.

And sir, anything on the cost side, did we have any plans before COVID-19? And are there anything else -- is there anything else which we are thinking about?

So obviously, there have been cost improvement plans, is a continuous exercise, it's not a onetime exercise, which we continue to do on a regular basis even without this COVID. So both in terms of our sourcing, in terms of our overheads, factory overheads, all of those, it's a continuous business excellence exercise that we run. I can ask Pramod or Rajesh to comment on any specific specifics on those. Over to Rajesh or Pramod?

Yes. So in terms of cost, as Alok has stated that we are continuously working on business excellence to be competitive in each of our product. We are -- actually, at this moment, we are not seeing any key business interruption because on the contrary, as I said that specifically, I can talk about the Life Science Ingredient business. Our customer demand is stable, and our customers in Europe actually are looking forward more and more to source material from us in comparison if they have an option to buy from China. So we are finding that if we can sustain this period of COVID spread, we will be in a position to come out further stronger. And I don't see that we will have any major disruption in business to be worried. But having said so, as Alok said, our cost competitiveness, cost reduction exercise in a continuous process.

Understood. And sir, one...

' Yes. And so what Rajesh said, we have this huge program of business excellence under which we use various tools like Six Sigma, Lean, CPM, et cetera. We have the master black belts and black belts, green belts, yellow belts. There's a huge program of the training on using all these tools through which each department takes various projects, and we look at each and every efficiency improvement and each and every opportunity to bring down the cost and make the processes more lean. It's an ongoing exercise and we have -- year-on-year have seen continuous improvement into that in our overall performance.

Understood, sir. And one final question from my side on -- specifically on the LSI business. Now with crude falling so sharply, how should we think about the profitability in this business?

Yes. So you see when the crude goes down, some of our raw material prices go down, as you can see that acetic acid price has gone down. Now in our commodity LSC business, Life Science Chemical business, though the price pass-on happened, but there is a lag, which is about a month or 1.5 months, and that's why whenever the price falls down sharply, we see some negative impact in our Life Science Chemical business. But having said so, because the prices are passed on, the -- after that period of 45 days, I think the business comes around with the similar profitability. So this is a continuous -- we keep watching that price falling of acetic acid, which impacts our LSC business for some period, which is a lag period. But apart from this, other businesses, the raw material price going down actually gives us positive impact because other products like Specialty Ingredients and Advanced Intermediates, most of our prices are also -- are either quarterly committed or annually committed. So there, any reduction of raw material prices impact us positively. So in nutshell, in overall, I don't think it makes huge difference in our profitability of Life Science Ingredient business if the crude is falling so much. On demand side, if there is a disruption, then the profitability get impacted, which we do not see as of now because products like ethyl acetate, which is also a large commodity today, is being used because packaging industry in India has been declared as a essential commodity industry, and ethyl acetate is used very large volume in packaging industry and also in pharma industry. So both these big industries have been -- are still into essential commodity. So therefore, I don't see a demand disruption or price reduction in ethyl acetate. The demand is stable. Raw...

Sorry to interrupt, sir, we lost the line. Sir, I'm sorry, we can't hear you.

Rajesh, I think you broke off the last 10 seconds.

[Operator Instructions]

Margaret, I think Mr. Srivastava got disconnected. We can continue with the next question till the time he joins back.

[Operator Instructions] All right. We have him in the call now. Mr. Srivastava, you may go ahead.

Yes, I am there. Yes, I am there. So I hope you've heard me completely. If you have missed me, please let me know.

Yes, sir, you were mentioning about packaging as well as pharma industry. Yes.

Yes. So the demand side, if you see ethyl acetate, which is very, very quickly affected because of price reduction, and acetic acid is also the product today is going strong because of packaging industry and pharmaceutical industry since it's still operating as a essential commodity products. So as of now, we don't see the demand reduction. However, as I said that whatever impact we will see, it will be mostly because of logistics and material movement. As of now, we are not seeing the reduction in the demand for these products.

The next question is from the line of Ranvir Singh from Sunidhi Securities.

Sir, I understand the demand side, it remains there where it was. But from perspective of supply side, are we witnessing any issues in transporting materials in U.S. to your distributors or the other customers?

This is Pramod again. So in U.S., we have not seen any issue on the supply side, though like a few of the flights have been discontinued. But the commercial flights are still operating. So we haven't seen any impact so far.

So far, we are in last week of March, but because the situation is prolonging, our situation is not improving there in U.S. So have we done any assessment, the kind of impact we can see if that situation goes on, for example, up to end of April?

So we are doing the assessment almost on continuous basis. And as long as the commercial flights will be operating, we don't see any impact on the supply chain as of now. So the most of the places from where we bring the material into the U.S., at those places the plants are operating. The only problem will come if the government takes the decision to even halt the commercial flights. If that happens, then, yes, some of the logistics will get impacted. So we continue to watch the situation.

That's fine. So like in Sartans market, earlier, we had a very good position there, so what's the current scenario now? We keep on holding our market share or we have seen any changes there?

So on the Sartans, if you remember in our previous last earnings call, we mentioned that now the most of the problems of the nitrosamine impurities in Nanjangud plants have been resolved. And we had started moving material. So with that, our market share in the Sartans has only gone up.

Okay. And in Nanjangud, what's the status on U.S. FDA's compliance issue?

So the Nanjangud plant was under OAI, Official Action Indicated, and it remained at that status, it didn't escalate to the warning letter. It was a concurrent inspection by Health Canada and U.S. FDA. Last quarter, we had the audit of TGA Australia, who had a mutual collaboration with Health Canada. The audit went extremely well, and TGA Australia gave us a GMP A1 rating by which Health Canada has already removed the OAI status. As far as U.S. FDA is concerned, we were expecting them to come for the audit. But now since, for them also, travels are restricted, so we are exploring opportunities. We are engaged with U.S. FDA to see that how they would like to go ahead into the process.

Okay, fine. So just indicative because in Q4 is almost over. In Q1, would you like to give any sort of to quantify the kind of impact we can see in Q1 in terms of loss of revenue or on margins, if you could guide something?

So the Nanjangud plant as of now is expected to resume operations sometime in mid of April in a normal way. So if operations are resuming in mid of April, we really don't see any much impact on Q1 performance because of this because we already have stocks of the finished goods. We have stocks of the raw material. So as soon as authorities will allow us, we'll start the operations and then the plant at capacity. There will be minimal impact, but not substantial, not of material.

[Operator Instructions] The next question is from the line of Kunal Randeria from Antique Stockbroking.

Sir, you mentioned that Nanjangud plant has been centrally suspended for operations. So I just want to understand a bit more on what happens next. So have the -- do the employees have to be quarantined for 14 days? So what are the requirements from health care authorities to restart production? So just wanted to get a bit more sense on what happens now?

So employees have been quarantined for 14 days. And during those 14 days, if they don't develop the symptoms and they are all right, authorities will be allowing them to move and come to the manufacturing locations. The plant, as of now, since operations are suspended. So once we will resume the operations, we will have to do complete protocol, which is required to resume the operations, like doing calibration of all the instruments, et cetera, again. That will take maybe a couple of days, and then plant should be back to normal.

Right. So I mean, what you're trying to say is max -- within 14 days -- after 14 days the plant can get back to normal potential?

Yes. That's what is the assumption as of now, but we continue to monitor the situation because the virus issue in India so far remains very much under control in comparison to what's happening elsewhere in the world. So we need to keep on watching the situation.

Right, sir. Right. Has the FDA given any sort of a guidelines on how to manage this?

So they are the set quality protocols when a plant is being shut temporarily like this and when the plant has to be started. So we have a detailed SOP on that. And our team is already working on that to do all the planning to ensure that in the minimal time, we are able to bring back the operations to normal following the entire SOP and all the protocols.

Right, sir, and the time line are the same with what the Indian -- what the health care authorities have guided to.

Sorry, this I didn't get.

Sir, in the FDA, I mean, the protocols the FDA has set are quite similar to what the Indian health authorities have given for the time line, who gave that thing?

I'll have to get into specifics of that, that what is the difference in the protocol of the Indian FDA and U.S. FDA. But I believe in terms of the safety to the patient, ensuring that the products are manufactured as per the process and as per the specifications, I will believe that the guidelines will be more or less on the similar lines. But if you are asking a specific difference, probably I need to check that.

[Operator Instructions] The next question is from the line of Deepika Mehta from Axis Bank.

My question is with regards to the government's announcement last week on -- about INR 10,000 crores of -- I mean, package for the bulk drug parks. How positive do you feel about it? And what amount of import can we cut back if -- as in when this commences?

Alok, you are taking this question?

Sorry, could you repeat that question? I didn't get that.

Yes. So the government announced the package of about INR 10,000 crore a week back for developing bulk drug parks across the country and providing production-linked incentive. So how positive do you feel about that? Because we already have the draft pharma policy in 2017, but it did not take off. And how much impact do you think this announcement can make? And what -- how much imports on API can India cut because of this package?

Yes. So this is the extremely positive step by the Government of India in the right direction. So far, the India has been depending a lot on APIs and some of the KSMs from China. Government has given a very lucrative package for the Indian industry to develop those products within India. This package will definitely lead to the people making investments in those areas where they have been hesitating because of the price competition from China. So for some of the products, we are also in the process of doing the evaluation, where we can expand the capacities or we can get into the manufacturing of few of the APIs or the KSMs and take the benefit of this package. It's too early to say whether how much we will be able to do. But like we are doing the evaluation, I am sure, like this, many other pharma companies in India must be doing that. And then ultimately, it will lead to more of the production of APIs and the relevant KSMs in India and bring down dependency on China.

How much would that be any idea? Any sort of rough number?

I will tend to believe that the pharmaceutical industry will be able to take advantage of more or less the entire package, which has been announced by government.

The next question is from the line of Jigar Shroff from Financial Research Technologies.

I'm sorry, I joined a little late. I just wanted to clarify, I mean, did you all mention anything related to pledge shares issues, of promoters having been sold in the market in the last 1 month or so?

No, there isn't anything on that.

And how much of the promoter stake would be pledged at this point of time?

Nothing on the Jubilant Life Sciences.

It's 0 pledge, right? The entire promoter stake is free.

Yes.

The next question is from the line of Sandeep Baid from Quest Investment.

In your initial remarks, you had mentioned about EIR for one of the plants. Can you again talk about it? I missed that comment.

Yes, so this is Pramod. I was talking about our Solid Dosage facility in U.S. in Salisbury, where we had the inspection by U.S. FDA in Q3 -- sorry, in Q4. And there, we have received the EIR as VAI, Voluntary Action Indicated. So with that, the inspection is hence closed.

The next question is from the line of Kunal Mehta from Vallum Capital.

So I wanted to understand, sir, barring the present situation with respect to COVID, sir, how do you see the Radiopharmaceuticals business going forward for the next few years? I mean, we have certain few -- we have taken a few steps to grow this business in the last few years. We acquired Triad, and we are trying to forward integrate into the distribution of Radiopharmaceuticals. And during December, we saw very positive ruling on RUBY-FILL. So can you just given us an understanding of how do you see this -- the Radiopharmaceutical business in the next -- in the coming times, your views?

Yes, so Pramod again. On -- in terms of our strategy for Radiopharma business, nothing has changed. The strategy remains as robust and as is strong, as we have been indicating in the past. And with very favorable outcome on the RUBY-FILL litigation, we were in full mode to implement that strategy very aggressively. So 2 things -- 3 things on that front. One is we need to continue to grow our RUBY-FILL and need to continue to install that at more and more sites. Other than that, we had a -- we have a very robust pipeline of the development of products. And those projects continue to run on the schedule. And third is our forward integration of the pharmacy business, by which we are able to distribute the product and have a connect with the end customer directly. So on all the 3 fronts, we continue to move aggressively. Other than that, we are also looking at opportunities to get into adjacencies or acquiring more of the products or the technologies, and that will continue to evaluate.

Sure, sir. And sir, this second question, I wanted to understand was that the -- in terms of forward integration, the prior, can you give us a further understanding of how you're planning to do that? I mean, what will be the strategy to do that in the next 2, 3 years? How are we going to leverage Triad acquisition?

So the Triad acquisition is already integrated completely within the Jubilant system. And both the businesses are now integrated in terms of the pharmacies as well as pharmaceutical manufacturing. So that integration has already happened. Our plan is now to grow our own distribution network. So opening up more of the pharmacies at the location where we are not and also, at the same time, refurbishing the existing pharmacies to ensure that they are ahead in terms of the quality compliances. So we are making investments on that business, which will help us to bring our all the pipeline products in the market with a much higher market share.

Okay. So this is a last follow-up on this. What are your CapEx plans for this? So you mentioned that you would have to open some new pharmacies, so would it be capital intensive? Or since we have to pay down debt in October '21, we would now go a bit slow on CapEx and improve our free cash?

So I'll ask Alok to deliberate on this repayment part. But as of now, the plans, whatever we have made for the capital investment, and the cash, what we have available with us, with that we don't see any issue on the repayment as well as executing our capital investment plan.

Ravi Sundaram from Sundaram Investment.

I have a quick question. I missed the pledge part, which was asked earlier. So what is the positive of promoter pledge?

So as I said, there's nothing on that?

Hello?

I said there's nothing on the pledge front that we need to -- I mean, there's nothing on that front for me to discuss on this call.

Okay. My second question is on the Specialty Pharma business. So when globally, all the hospitals are focusing on treatment of COVID corona patients, how much of utilization actually goes into the products that are part of Specialty Pharma?

So Specialty Pharma contributes little more than 50% of our overall revenue. And since hospitals currently are focusing on -- more on the COVID-19, so some of the products which are being used for elective diagnosis, they are -- the hospital is also asking patients to postpone, and the patients are also avoiding the visit to the hospitals. So for those products, we are seeing some difference in the demand. But we expect that as soon as the situation normalizes, all this demand to bounce back.

Okay. And a last question on the debt. Probably, you missed it. How much is the dollar-denominated debt because rupee has been depreciating? And what is our impact?

So it's the -- it's about $400 million, which is in bonds. And some -- maybe about $30 million or $35 million of working capital facility. But all of this is outside of the country. And all of this will be repaid through dollar proceeds from the business. So there isn't really any impact on the overall business from a ForEx perspective.

The next question is from the line of Tushar Manudhane from Motilal Oswal.

Just to understand this, on the Radiopharma side, will the weakening nature of the product, on the raw materials we use, so now that patients have reduced, will that have any impact on the revenue breakup?

So I mentioned that the patient flow is kind of deferred. So a bit of the deferral will not cause that much of the major issue. So as of now, we don't see much impact.

So in a broad, kind of, time line again, first, help us understand that it would be continued for a month, still getting of the impact that it could go beyond a month or 2 months, then the raw material cost will get something or -- return -- raw material cost will have to get returned. Any time line you can help us with?

Yes. I wish I could forecast how this COVID-19 situation will be actually developing. But the way it's evolving almost on a daily basis, very difficult to say that by when it will be normalized.

No, no. From the life of raw materials that this came?

So we don't see any issue on that front. Yes, we do have the commitments on the raw materials, but everything is covered under force majeure clauses. So if we don't have the consumption, we don't have to buy that much of the raw materials. So we don't see any issue of that.

On the pharmacy side, it is pretty much just-in-time material supply given the short shelf life of the product. So if the visitations come down to that extent, then obviously we will have -- we'll source lesser material from that perspective as well.

[Operator Instructions] The next question is from the line of Charulata Gaidhani from Dalal & Broacha.

Yes, my question pertains to the CRAMS business. How are you ensuring continuity there? Or is there an impact?

More CD amount. She asked about CRAMS. Sorry, can you please repeat that question?

Yes. My -- I wanted to know how you are ensuring continuously in the CRAMS business.

Yes, Rajesh?

Rajesh on the DDDS service, please.

So you are talking about Debt Discovery and Development Solutions. So in JDDS, our order position is strong as usual. But because of this disruption, we had -- few days, we had to really struggle. Our employee could not come, but I think after 3, 4 days, our facilities started operating. Our employees selectively keeping the physical distancing, et cetera, in mind and hygiene, health of people, operation is running. But of course, the number of scientists, which we are having in the site, is less than what it should be usual. Depending on what is necessary and required to run our services, we are calling scientists, and we are running partially our operation as depending on the priority because we can't run the CRAMS business, Discovery business, with full operation because we have to also maintain the physical distancing and also the hygiene and health and safety. So it is running, but yes, at a reduced level.

Okay. So what is the kind of impact that you would expect in Q1?

Yes. So we are hopeful that we should be in a position to improve on the turnaround of people and in terms of people coming to office and we can really see things improving. To the extent, I can tell you today is the impact will be to the tune of lockout period, which is still 14. So I'd say on the quarter wise, it will have not a very significant impact, but there will be impact. Very difficult to justify in terms of percentage right now.

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

So thank you, everyone, for taking the time out from a busy schedule. We would like to highlight that Jubilant Life Sciences and its businesses are fully committed to the health and safety of our employees, customers and stakeholders. And we understand the increasing spread of the coronavirus is of concern to everyone. We want to assure you that we're closely monitoring this ever-changing situation and are taking all necessary precautions while continuing to execute on our operating discipline, while this is a challenging time, but we believe we're in a pretty good position. And it is an evolving situation, but based on things as they stand today, we want to reassure you that we're running the business to the best of our abilities. And hopefully, we will come out much stronger from this challenging situation. We would also like to take this opportunity to thank all our employees, customers, vendors, government authorities, all the stakeholders in this challenging situation, who have helped us and support to continue to grow the Jubilant business. Thank you, everyone. I appreciate your time.

Thank you. On behalf of Jubilant Life Sciences Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.