RPG Life Sciences Limited (RPGLIFE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the RPG Life Sciences Conference Call hosted by Dolat Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Rashmi Shetty from Dolat Capital. Thank you, and over to you, ma'am.

Thank you, Navi. Good afternoon, everyone. I, Rashmi Shetty, on behalf of Dolat Capital, welcome you all on the Q2 FY '25 earnings con call of RPG Life Sciences Limited. I would like to thank the management of RPG Life Sciences for giving us this opportunity to host the call. Today from the management team, we have with us Mr. Yugal Sikri, Managing Director; and Mr. Vishal Shah, Chief Financial Officer. I now hand over the call to the management for the opening remarks. Over to you, sir.

Thank you, Rashmi. Good afternoon, everyone. Thank you very much for joining us on this call. As always, it's my pleasure to share with you briefly RPGLS performance versus the market and the brief highlights on our performance, both for the quarter 2 and the FY '25 H1. So first, talking about the market. As per IQVIA MAT data, market is currently growing at 7.7%. RPGLS is registering an impressive growth of 14.7%, which is 2x the market growth. If you deep dive a bit into the growth, you would find while in case of the market, the growth is being driven by price increases, new introduction and almost negligible volume growth. In case of RPG Life Sciences, the story is consistent. Our growth is largely happening through volume, which reflects the number of prescriptions and the demand. In our 14.7% total growth, 10.1% growth is coming because of volume, 2.6% coming because of the price, and 2.0% coming because of the new introductions. This is as per life-for-like IQVIA data. Let me now get into quarter 2 performance. Quarter 2 performance has been yet another very strong quarter the company registered. We have a growth of -- a sales growth, a business growth of about 12.1% Y-o-Y. And Q-o-Q, our growth has been 4.1%. Profit growth, again pretty impressive, in line with what we have been doing earlier, close to about 22% growth on Y-o-Y basis on all the 3 profit matrices, which are EBITDA, PBT and PAT. Q-o-Q, again, a very impressive growth registry, which is 16%, 18% and 18%, respectively, for EBITDA, PBT and PAT. But what's very, very heartening for me to share with you, the record profitability or record EBITDA margin achieved in the quarter 2, which has been 27.8 percentage points. Versus last year, we had -- the EBITDA was up by 230 basis points, PBT was up 190 basis points, and PAT has been up 150 basis points. As I mentioned, it has been a record profitability, which we have achieved. Moving to segmental performance. As you know, we have 3 business segments. In Domestic Formulation, the one which leads with 66% contribution; IF, I mean International Formulation, 19%; and API, 15%. And all the 3 businesses registered a healthy double-digit growth. Now let me quickly move to the first half FY '25 H1 actual performance. Again, same story, a strong all-round performance. Business growth has been 12%, 2x the market growth, profit growth. Again, EBITDA, PBT and PAT has grown at 22%, 21% and 21%, respectively. And this is before the exceptional items, which I'll cover a little separately. Then similarly, the profit margin growth, again for the H1, has been pretty impressive. The 220 basis points for EBITDA, 180 basis points of PBT, and 140 basis points for PAT. Segmental performance. Similar trend, the way which I shared with you for quarter 1. The contribution of the 3 segments, Domestic Formulations, International Formulations and API, has been 66%, 19% and 15%, respectively. And all the 3 businesses registered a healthy double-digit growth. What is further heartening to know is the new product contribution continue to go up. This quarter, we have -- the product which we had launched in the last 4 to 5 years are contributing close to about a little over 1/3 of the company business, which is 34.1%. Sales force productivity, a similar story, consistent increase. This quarter, we see INR 6 lakh productivity per month, up for the last time, INR 5.8 lakhs. And with the result, the ROCE is moved again from 29.7% to 31%, and return on equity moved from 22% to 23.4%. As you would have known, the exceptional item of INR 27 crores or so has come because as we discussed last time, we reviewed our -- all the manufacturing assets. We were wanting to make our operations efficient. And therefore, when we looked at our API plan, we thought we will be able to efficiently manage our manufacturing with good upside of capacity expansion. Thereby, we could release a substantive part of the land, which we had -- we are monetizing now. And we -- you are aware of the deal, which we signed. And the -- as a part of the deal, we had to pay certain charges on the ULC, and those charges are the ones which are reflected here. However, when we created the deal, this expense has to be -- was part of the total consideration, which the buyer had to pay. And therefore, this is an expense which is featuring over there. But in the subsequent quarters, quarter 2 or quarter 3, when the deal gets closed, this will get nullified. So this is, in a way, a transient piece which is available in this quarter performance. And therefore, when I talk about the -- all the profit indices, both in terms of value and percentage, I would refer to what I call adjusted EBITDA, adjusted PBT and adjusted PAT because that reflects the true operational performance of the company. Now all of this, what performance you are seeing, is a part of a larger transformation journey, which we embarked upon about 5 or 6 years back. It had been a smart strategy being well executed, which has 4 distinct components. The first component is creating a winning product portfolio. Second is identify high-impact projects from revenue perspective, from cost perspective, and monitor them diligently. Third has been create competitiveness in your business, either through technology or through certain business-specific parameters. And the fourth one is have a culture of performance-focused happy teams. And this result, this Q2 and Q1 performance we are seeing, is a continuation of the last 5-year journey, which has seen we jumping [ 11x ], EBITDA up by 4x, with margin increase of 1,290 basis points, PAT going up by 8x with margin increase of 1,180 points, ROCE going up by 2,130 points, ROE going up by 1,670 points, and the debt of the company being paid up. And today, we can boast of having the cash surplus in our books. Part of the cash surplus, we have utilized in modernizing and capacity expansion of our existing plants, both API and formulation, at Navi Mumbai and Ankleshwar, respectively. And with the results, I'm sure you would have noticed that we have a almost 15x increase in the market capitalization in the last 5, 6 years. So this is thanks to the strategy, which we identified in the beginning, which is being implemented with clearly identified KPIs and the team responsible for implementing it. That's for today. Going ahead, we will continue to strive to grow our business faster than the market. And we've had so far focused largely on the Domestic Formulations business, which contributed 2/3 to our turnover. Now with the plant modernization, capacity expansion having taken place, we have now identified International Formulations and APIs, the second and the third business segment, also as our growth drivers. For this, there are 7 pillars, which are identified. Just for your information, I'm just reading out something which we have also mentioned in our investor presentation. So the first pillar I just mentioned is to have the state-of-art plant. We have invested CapEx close to over INR 140 crores. Our -- I'm happy to report to you that the API plant is functional. It's just in the last leg of completing a couple of other parts of the plant. But otherwise, largely that API plant is functional. The Ankleshwar plant, the formulation plant, the work is going on in full swing. You would remember, we have got the Australian TGA approval for the API plant already. And similar strategy is to get the EU GMP approval for Ankleshwar plant. So that's pillar 1, a state-of-art plant. Second is a targeted R&D pipeline. And I'm happy to report to you that the -- our R&D, newly created R&D, which is there in the Navi Mumbai, are fully functional. The bench strength has been increased, and we are currently working on -- diligently working on the new products, both in the API and formulation business. And the new product framework has been very defined to see that we have a profitable growth continuing. The third and fourth pillar are something to do with innovation and digitalization. They make our operations efficient. There's a good amount of work which is going on. Innovation has been institutionalized in the organization. Almost every single [ SOD ] has got innovation projects so that we start looking on the newer way of doing those things. Technology is helping us to improve the efficiency, improve our share of voice, and make our operation more transparent. And both, total put together, we had 26 projects going on, 13 projects have been completed. There are other projects at work in process. Now with the cash in our hands, the fifth pillar automatically is inorganic part, we are very actively looking at mergers and acquisitions. And I would have shared with you earlier, we had over 18 to 20 proposals we have seen. We submitted 2 nonbinding bids. We are also currently also looking at proposals for formulations. And as I shared with you, we have opened up our APIs. Good work is going on, on API. And hopefully, with the increased cash surplus, which we have post -- we will have -- post our monetization of the land, we should be able to have pretty good enough to invest in interesting and productive proposals. We -- I also mentioned here, the sixth was we were also looking at adjacencies. Med tech, the work is going on. And I can share with you, some good science work is going on there. And hopefully, those should also help us to contribute to our business going forward. And the last pillar, which is critical, is the capability building and talent development. Great amount of work which is going on, as I mentioned to you earlier. This is a very, very important piece. We have 22 critical positions identified in the organizations, and long-term development action plans are being created. And I'm happy to share with you, close to about 70% of the positions, we have the successors identified. And I know we keep asking about the organization. The organization is getting strengthened at all levels, so that we continue the growth trajectory, which we have set up for RPG Life Sciences in the last 5 years or so. So I wish to stop here. I hope I'm able to give you a good perspective of our business, on the quarter 2 perspective, from H1 perspective as well as in the larger context of 5-year perspective, just to give you the strategic framework which we are following to propel our growth going forward. So I'll stop here and look forward to questions.

[Operator Instructions] The first question is from the line of [ Sajal Kapoor ], an individual investor.

All long-term shareholders are extremely grateful for bringing operational efficiencies and measurable improvement in the business performance over the last 4 to 5 years. We have seen the press release and the announcements yesterday, so we wish you a well-deserved and peaceful retirement after April next year. On a lighter note though, I would have loved to see the next stage of the scale-up continuing under your leadership, but you have decided to scale out instead. And rightly so, you have had 4 decades of illustrious career in the pharmaceutical industry. So I hope you have a very well deserved and happy retirement. The question that I have for you, Mr. Sikri, is for our India-branded business, how much manufacturing is done in-house versus outsourced to CMOs?

Okay. Mr. [ Kapoor ], it's always a pleasure to have you in the conference, and thank you so much for your kind wishes. And I only can assure you that the strategic framework, which has been put in place, and the rigor with which that strategic framework and its 5 or 6 tenets are being executed, you would have seen in my investor presentation, there are 10 projects we are talking about, 10 very bold moves we are talking about. All of these are being pursued very rigorously and very diligently by the team. And therefore, I'm -- I might be retiring. But someday, others will retire, like I'm also retiring. But I think the team which has got evolved, the processes which have been setup, should drive the organization forward maybe at a much more angle now. Because we had only growth engine one earlier, and now we have growth engine 2 and 3 also propelling the growth. Now to the specific question which you asked, whether how much is the component of in-house and outsourced, it is 30-60. 30% is roughly the outsourced, and 70% is in-house. It keeps varying between 30% to 35%. But more or less, that's the number we have between in-house and outsourced. I hope I answered the question.

Yes, sure. Sure, Mr. Sikri. And yes, I'm sure that the kind of systems and controls and the processes that you have put together will continue to serve the organization long after you've left. So thank you for that reassurance. Second question is on this Navi Mumbai R&D center that we have set up. Would you be able to share some more color in terms of some of the tangible numbers, i.e., the number of scientists we have already hired and how we plan to scale up that number over the next foreseeable future? How many products are currently in the pipeline? And what therapeutic categories we are aiming to develop, so that we are able to differentiate? I know one of our differentiation is we are only targeting products, where the big guys will not be interested on. So that's one. But other than that, if you could share any color around the strategy, around target therapeutics? I mean, is it you're going more after chronic or whatever you may share, please, on the Navi Mumbai R&D center?

Okay. So thanks for raising that very pertinent question because that's in the -- that's very, very critical pillar 2 in our 7-pillar strategy, which I just mentioned to you for the company. Now I think you recall correctly, we have created the R&D infrastructure very, very well. The 3 R&Ds that are typical for us. One is the API R&D. Second is the formulations R&D. And third is the analytical R&D, which services both the API R&D and the formulation R&D. And all the 3 are in the new place, new building where our modernization has happened. We have created a new block there in Navi Mumbai, and all are functioning well. They have been equipped with all the necessary equipment, machinery, laboratories, equipment which are required. They are all equipped with this. We have -- we are very, very open on the scientists. Currently, the number is close to 35 scientists, which are working. But we are identifying products and we are increasing the scientists. So this number is, maybe when you're here next time, maybe even more because we are in the process of identifying more and more new products. And we are also in the process of hiring the most scientists also to make sure that our R&D pipeline gets built up ASAP. And for the international business, both for API and formulations, the new products are very, very critical for us. And you also know that we need to have a larger product portfolio if we want to succeed in International Formulation and the API business, and that's why this flexibility. Now talking about what kind of products we focus. As far as the formulation is concerned, the focus, if you recall, I mentioned is, one, we will have a niche immunosuppressant portfolio into our export range. So we have azathioprine, mycophenolate, tacrolimus, cyclosporine, all the 4, we have the -- we have identified them. And we -- since we want to be in this niche very, very strongly entrenched, there were a number of line extensions, which we did not have earlier. Currently, the development work is going on in the lab for these line extensions. I should also share with you the advantage of this kind of approach. And we have been exporting to Germany, but we did not have a complete range available. We developed one particular line extension, which was missing in azathioprine range. We developed that, got it approved by regulatory, and we won that AOK tender from Germany, which we supplied last year. And now we are quoted once again for that tender. And so first part of the product portfolio strategy for exports in formulation was we must have a well-entrenched niche of immunosuppressant. Second, we thought that we must have a product, which has some kind of product complexity, and the volumes are lower. So that's the second area which we are focusing. And you remember, the Nicorandil is the first product, and we are in the process of identifying more products now to see that this range gets expanded. And the third one is where we need some kind of production complexity, which means low temperature, low RH conditions. And there's a good range of products, which have been identified. Having got the sodium valproate PR prolonged release formulation exported to U.K., we are exporting that to Australia now, and that has also given us a filling. So these are the broad 3 segments, which we have for this formulation. Coming to API. We have the niches which we identified are largely pertaining to the CNS and some of them are CVM, which we are developing, apart from the immunosuppressant niche, which also takes the priority in the API development. Put together, we have 10 to 12 molecules. Just to exemplify, some of the molecules, which we are developing, are sertraline, rupatadine, agomelatine, melatonin are some of the ones which we are developing. We have the azathioprine in our API range. Now we are also looking at mycophenolate, so that we have -- these are the 2, which we can develop in our chemical synthetic API unit. And God willing, when we have -- when we grow our biologics business and this business, then tacrolimus and cyclosporine also, we would be able to manufacture in our own plant if we get to have that plant in our -- which is there in our horizon 3 right now. So I hope I could answer your question, Mr. [ Kapoor ].

You indeed did, Mr. Sikri. And that's so very helpful. And thank you for that elaborate answer as usual.

The next question is from the line of Sudarshan Padmanabhan from JM Financials.

Congrats on a great set of numbers. Sir, my question, I mean, I would like to understand a little bit more if I look at our cost savings. I think for a company of our size, I don't see many companies which deliver the kind of margins that we have. So in that context, I mean from a strategy side, -- if I look at our sales, specifically in the Domestic Formulation, we are still subscale. I mean, running at around INR 112 crores, INR 115 crores a quarter. I'm trying to understand, I mean, you talked a lot about the 7 legs in terms of performance, et cetera. But as a strategy, one is from this INR 450-odd crores moving to, say, INR 1,000 crores in 2, 3 years, in terms of scale? And second is to maintain the level of profitability as well as the ROCE, if you can give some color with respect to on these 2 sides. Where do we see the growth coming in from the existing products? I mean we have one large brand today, and we have one cluster doing well. So I mean organically from this, how much we can mine? Are we looking at adding new products to the cap? And second is if we go to INR 1,000 crores, I mean, from the current rate, I mean what is aspirationally you would consider to be a healthy EBITDA margin given that you would also have to reinvest in growth?

Okay. Thanks for that question, Mr. Padmanabhan. Could I say your name correctly?

Yes, sir.

Okay. So I think you touched again another important aspect. You talked about the margins. And you also talked about the revenue increase thought of the company. And you also talked about whether we'll be able to return the EBITDA margin going forward. First thing I should share with you that the margin improvement story of RPG Life Sciences, which we have been tracking for the last 5, 6 years, has been a structural story. What I mean by structural story is that we have got these savings by attacking those cost elements, which we have looked at very differently than what we were doing earlier. A couple of examples, organization structure. Organization structure has been revisited to look at the layers and span of control. And that org structure is working very well and delivering results, so there's no reason why we would go back on the org structure. So that's one structural intervention. Second structural intervention, on the back-end side as an example, I can give it to you, is product reengineering. We are an old company. We have 50, 60 years old products in the market. And luckily for us, this part wasn't looked by in earlier times, so we revisited. We had 80% of the sales-contributing SKUs reformulated, reengineered and the quality tested. They are out in the market, and that's not going to go back. And third, from the sales hygiene perspective, I must tell you that we have very strong systems and processes in place, so that the leakages in the P&L or those additional expenses which go in the expiries and sales returns, et cetera, do not get repeated. So this is -- these are 2 or 3 examples of structural intervention I said, which is the reason why the profitability is continuing to go up going forward. And I must share with you that the cost reduction is coming both from the cost of goods side as well as from the operating expenditure side. And it's a good mix, which is helping us to continue with our margins. And as the revenues are increasing, the fixed cost being to an extent constant, it adds to the margin in the P&L. And that's what has helped us to continuously sustain the margin improvement. Another important point, all the decisions which we are taking with respect to product mix, this is a very important consideration at the back of our mind that we must have a profitable product mix. So we avoid the product, which are in DPCO. And we -- our stated strategy is that we launch all the new products in the chronic and specialty segment, and the chronic and specialty segments are -- have better margins. And that is what is helping us to improve our business going forward. Yes, the scale from current, you talked about INR 1,000 crores. Yes, INR 1,000 crores ambition, we have a strategy in place. That's twofold. One is life cycle management of our existing products, legacy products, which are textbook products and which can give us good mileage. We have exemplified in the form of Naprosyn, which has moved from INR 18 crores to INR 70-plus crores. And we have ambition to take it to even not only INR 100 crores or INR 200 crores but even to INR 500 crores because this has a good potential of OTC going forward. We have identified the portfolio, which you talked about. And having said that there are a couple of other good products in our portfolio, which also can become good candidates for us going forward for making a big brand by a good life cycle management strategy. Second, we were very -- not so strong in chronic, and we were strong in only one specialty called nephrology. We have -- we are expanding, on one hand, the therapies, the specialty therapies. On the other hand, we are also expanding the customer segments there. And just to quote you examples is one is -- we are only in nephrology now. We are well entrenched in rheumatology. We are getting into dermatology and gastroenterology going forward. And all of these are -- will add to our portfolio. Cardiovascular, metabolic disorders, we have been traditionally not so strong. And all the new launches that are happening in the CVM portfolio, that would also add to our portfolio. Is there a constraint on this? No. As I have been stating every time, any therapy we enter, we make sure that in a couple of years, we are able to cover 80% to 90% of the customer segments. So that's where the investment will happen in the form of OpEx, and that will help us to drive the volume going forward. So I think one hand, LCM, life cycle management; second hand, new therapies; and third, new products in these 2, 3 segments I talked to you. And accordingly, corresponding increase in the customer coverage and the field force increase should help us to reach to that target, which we are talking about. We're not stopping here. We know that, that would take us to a particular goal. We have our cash surplus available to us, and we are very actively looking at M&As to drive our business, both from organic and inorganic routes. So that's what I would like to answer. And then last question, which you asked me, was aspirationally, what is our EBITDA? I generally don't give guidance. But one can easily extrapolate for the last while, where we have got good data points in the graph now to extrapolate. Only caution I put is it will be more abused now. It will not as vertical as we go along. But our journey on cost optimization will continue, and that should continue to add some basis points to our margins going forward. I hope I could answer your question, Mr. Sudarshan.

Yes, sir. Thanks a lot for the elaborate answer. I have another question. I mean interestingly, even I wanted to discuss about the cash generation. I think we have been generating very strong cash, I mean, in the past. And every quarter that goes by, we'll continue to generate cash, I mean, by the nature of the business. But on the acquisition side, I mean, what is it that you're looking at in terms of a fit? I mean, we are strong in immunosuppressants. So are we looking at a fit in terms of therapies where we can kind of plug and play along with this? Or are we looking at something in the chronic, which relatively is small for us, where we can grow big? Or are we primarily looking at something different in terms of distribution or manufacturing? If you can give some color on what is it that you think is the right spot, which you would like to fill?

Okay. I think, Mr. Sudarshan, your question has the answer in built. We are -- we want -- we are hungry. We want to grow. We have very clearly identified strategic framework for our acquisition. And incidentally, what you mentioned is included in our strategic framework, which is strengthening our immunosuppressant basket, which is our stated strategy across. That's one. Second is we are not strong in chronic. We would like to be strong in chronic. And therefore, those are the candidates which we are looking at. The -- having said this, this is a biased market. And therefore, what you wish, you don't get all the time. So therefore, we have also expanded our canvas, and we are also looking at the growth opportunities in those molecules, which are growing. Say they have registered a CAGR of 10% or so. They have gross margins say around 60% plus or so. And we are strong in acute. We have representation of certain customers. So if the product belongs to that particular customer franchise, we will be interested in that particular product. So that's the way we are looking at the candidates for acquisition in the formulation space. In the API space, again, low-volume, high-profitability product, which does not invite the attention of the [ biggies ], are the -- are preferred spot. You would have seen the kind of the candidates we identified more or less belong to that particular space. I hope I could give some color to your question.

Yes, sir. Definitely.

The next question is from the line of Ajay Sharma from Maybank.

I just want to check, do you expect the growth rate for the International Formulation and API to accelerate now that you have the new capacity? And how do you see the mix changing in the next 3 to 5 years?

Yes. Thanks for that question, Ajay. Yes, we are looking at because we have taken these as growth engine 2 and 3. We have invested CapEx in the plants so that we can grow this international business. So one could reasonably -- reasonable in expecting a better growth rate going forward. However, you know that the new product development has its own time lag. So if the R&D is working on the new products, new products are being identified. And I think it may take a year or so or a couple of years or so to have a true reflection in this. Frankly, with the current growth also, whatever you see is also healthy double digit. It's also coming. There's this couple of products which we have identified in the last 2, 3 years. We worked on those products and those products are launched today in the market, and that's what has propelled the growth to good healthy double digit. So we -- you are right in expecting that the growth rate must accelerate as the product pipeline becomes richer.

And do you see the mix changing? Like domestically becoming like 50% in the next 3 to 5 years? Or how should one look at that?

If you see it, the -- that's how the industry is. If you see that how the good large successful companies have built up their global portfolio or global business, it's that as the international business exports move up, the -- it doesn't mean that the domestic business is growing lesser. It's just that the international business is growing a little faster, so the mix changes. If you recall, that happened in the industry as well. Today, industry is 50-50 today because the exports have moved up. And there are companies which have the exports of around 60%, 70%, and the domestic business is around 20%, 30%. So that is a natural phenomenon, natural transition, to my mind.

Okay. Just lastly, on the M&A, right? Is there any valuation metric you are looking at? Because I don't want you to end up paying, I mean, too high a multiple just to acquire something. So is there some discipline or some valuation benchmarks you're looking at before you acquire something?

Yes, so those benchmarks exist. That's the reason we are in search of that candidate, that which fits into our benchmark. But there are strict benchmarks which we are following. We are very, very clear that it should be value accretive. We are very, very clear that the product which we are picking up has a very strong growth potential. I just mentioned, the growth should be -- of the molecule should be 10% plus. There are other criteria, which we have booked up -- picked up. It's -- it should have a solid strong prescriber base and patient base. All of these are the criteria set which we have. We subject the -- any candidate which comes to us from that particular lens. So your expectation is our -- we need to await and -- which is exactly the strategy is going forward.

Any numbers like in terms of enterprise value to EBITDA or enterprise value to sales? Anything -- any metric you can guide us to?

See, I mentioned this earlier. I think this all becomes very theoretical, to my mind. It's a seller's market, right? And if it is a seller's market, then you need to take a call case by case. And see, I shared with you. Earlier, we have said that we've only been chronic. We're only in specialty. We're only in this business. But we realize that no, we need to open up a bit to see that we get a candidate. So it is case by case. It's very difficult for me to give you any kind of such a benchmark. But you would have seen, we are a company, which is -- which has a clearly stated objective of profitable growth, sustainable or sustained profitable growth. So we will not do anything which disturbs that particular paradigm for us.

The next question is from the line of [ Basanth Franzel ], an individual investor.

I have the question on exceptional items, which we have charged to P&L. So was it possible for us to amortize it over the residual period of our leasehold asset?

I have my CFO, Vishal. I will request him to respond to you.

Yes. Thanks for the question. So this ULC transfer charge, which is reflected in the exceptional item of INR 27.3 crores, is pertaining to a past transaction of earlier period. And that's the reason that we are not able to like amortize over a period of more number of years. So we had to take it as a hit in the P&L in the current year itself.

Okay. So you mean to say that leasehold -- that lease period has already expired?

No. So it is not that lease period has already expired. This is a transfer charge, which was levied under the Urban Landfilling Act in the past. And due to that, when the transfer happened of our portion of the land in the previous period, this transfer charge was supposed to be levied by MIDC in the earlier period, but they did not levy at that point of time. And now we are going to do another transaction of a transfer, and that is the point of time where MIDC is asking for the same. And we have to pay this ULC transfer charge right now.

No, no. So I understood the nature of transaction, so what you have explained is very much implied. My point is that if we don't have that leasehold asset on which this transfer charge is levied, we could have amortized it over the residual period of that leasehold asset.

No. So under the Urban Landfilling Act, there were certain conditions attached to that. And at that point of time, one of the condition attached was we should not have -- we could not transfer the portion of the leasehold land. And since that was the condition over that point of time, and that was there, and that's why this transaction was -- ULC transfer charge was levied. But since this portion of the land is now no more with us, and that's why we are not able to like amortize over the remaining period of the asset, which is there with us.

As there are no further questions, I would now like to hand the conference over to the management for the closing comments.

Okay. So in a nutshell, the performance in the quarter and the first half has been in line with the trend, which we have in RPG Life Sciences for the last 5 years. And we have 3 business segments. Today, we are targeting all the 3 business segments to be our growth drivers. And for those growth drivers to happen, we have the 7 pillars, which have been identified to drive that business going forward. And that gives us the confidence to reach our financial goals and the aspirational goals, which we have set for ourselves. Thank you very much for joining us in this call, and have a good evening.

Thank you. On behalf of Dolat Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.