Vimta Labs Limited (524394) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Vimta Labs Limited Quarter 3 Investor Conference Call hosted by Systematix Institutional Equities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Manchanda from Systematix Institutional Equities. Thank you, and over to you, sir.

Thank you, Rhea. Good morning, everyone. On behalf of Systematix Institutional Equities, I welcome you to the Q3 FY '24 Earnings Call of Vimta Labs. We thank the Vimta Labs management for giving us an opportunity to host the call. Today, we have with us the senior management of Vimta represented by Ms. Harita Vasireddi, Managing Director; Mr. Satya Sreenivas Neerukonda, Executive Director; Mr. Narahari Naidu, Chief Financial Officer; and Mr. Sujani Vasireddi, Company Secretary. I now hand over the call to the CFO, Mr. Narahari Naidu, for his opening remarks. Over to you, sir.

Thank you, Vishal. Good evening and good morning, and a very warm welcome to our quarter 3 FY '24 earnings call. Our investor presentation and the financial results are available on the company website and on the stock exchanges. Please note that anything said on this call, which reflects our outlook for the future or which could be construed as a forward-looking statement must be reviewed in conjunction with the risk of the company, which the company faces. The conference call is being recorded, and the transcript, along with the audio of the same will be made available on the website of the company as well as exchanges. Please also note that the audio of the conference call is the corporate material of Vimta Labs Limited and cannot be copied, rebroadcasted or attributed in the press or media without specific or written consent of the company. Now I would request our Managing Director, Ms. Harita Vasireddi, to provide you with the updates on the quarter. Over to you.

Thank you, Narahari. Good morning, everyone, and thank you for joining our Q3 and 9 months FY '24 earnings call. I hope you all had a great start to the year and hoping 2024 brings prosperity to all of us. Before I discuss Vimta's results in detail, I will briefly touch upon the economic and industrial landscape. With the start of 2024, the global economy was shrouded with uncertainly influenced by a multitude of factors such as geopolitical issues, continued impact of tight monetary policy, restrictive financial conditions and a rather tepid environment for global trade and investments and also persistent inflation. Following the sharp jump in demand post COVID, there was a noticeable shift in the latter half of 2023, leading to a subdued demand environment affecting various industries. In a more detailed look at the TIC and CRO industry, focusing on 2 of our major service area, in food testing, persistent inflation and dampened consumer demand continued to impact the import/export volume as well as domestic demand. However, there seems to be an indication of gradual recovery. After a lackluster Q2 in terms of volume, there has been improvement slightly in the food segment. Coming to the Life Sciences industry, the overall demand environment remains quite steady, especially we experienced good demand in the preclinical services. We see a strong traction in India. The electronics and electrical product testing market also seems to be gaining momentum, but it is still in the early stages and comparatively smaller in size. Moving on to Vimta's results for the quarter. As we guided in the previous call, we have witnessed a good recovery in the business. Total income for the quarter stood at INR 826 million with 9.4% sequential growth. The recovery was driven by our food business, where we witnessed better volumes coupled with good up drive in Life Sciences businesses, especially in preclinical studies. Other segments such as diagnostics and environment have remained flat, actually a little bit constrained. And E&E services, our electronics and electrical products testing services, have seen very strong traction. With regards to operations, I would like to just share with you that our Pharma Analytical division has undergone a good European regulatory audit by EMA. Our expansion project, our new facility that we are building is delayed by about 6 to 7 weeks and we expect to start moving into the new facilities mid-March onwards. As such, the financial year '24 has not really panned out to our expectations, especially in Q2. And we observed a slowdown in discussions with prospective clients and the decrease in volume of food business. However, our discussions have resumed again with us, particularly on the Life Sciences side and we are eyeing bigger opportunities. Although the process of converting these prospects into tangible outcomes might take a little time in this highly competitive market. I'm very confident that we will have some good success soon. Lastly, I want to reassure you that we are working on various strategies, which I believe will help us grow sustainably in the coming years. With these few introductory remarks, I would like to now hand over the call to our CFO, Mr. Narahari, to discuss the financial highlights for the quarter.

Thank you, Ms. Harita. Once again, I thank you all for joining us on our Q3 and 9 months FY '24 earnings conference call. I would like to walk you through the consolidated financial performance for the quarter ended December 31, 2023, after which we can open the floor for question and answers. Let me begin with the consolidated financial highlights for the quarter. Total income for Q3 FY '24 stood at INR 826 million as compared to INR 785 million in Q3 FY '23, up 5.2% on a Y-o-Y basis. EBITDA stood at INR 227 million in Q3 FY '24 as compared to INR 226 million in Q3 FY '23, a growth of 0.7% on Y-o-Y basis. EBITDA margins for the quarter stood at 27.5%. Profit after tax in Q3 FY '24 stood at INR 101 million as compared to INR 102 million in Q3 FY '23, which is a flat performance on a Y-o-Y basis. PAT margins for the quarter stood at 12.3%. Moving on to 9 months performance. Revenue from operations for 9 months FY '24 stood at INR 2,421 million as compared to INR 2,391 million in 9 months FY '23. This is a growth of 1.2% on a Y-o-Y basis. EBITDA stood at INR 659 million in 9 months FY '24 as compared to INR 735 million in 9 months FY '23, which is a degrowth of 10.4% on a Y-o-Y basis, translating into EBITDA margins of 27.2%. Profit after tax in 9 months FY '24 stood at INR 287 million as compared to INR 355 million in 9 months FY '23, which is a degrowth of 19.2% on a Y-o-Y basis. PAT margin stood at 11.8%. On the balance sheet side, we continue to generate strong cash from operations, driven by minute focus on working capital efficiency, which led to generation of strong cash flows from our operations of INR 575 million. As you all know, we are currently engaged in CapEx to expand our capacity for which we have spent close to INR 628 million, even after the ongoing capital expenditure. We continue to have net debt-free balance sheet with cash and cash equivalents including other bank deposits of INR 325 million as on December 31, 2023. With this, we can now open the floor for Q&A. Thank you.

[Operator Instructions] The first question is from the line of Ankit Gupta from Bamboo Capital.

I just wanted to get your sense on the guidance that we had given for reaching INR 500 crores. Let's assume if that is not achieved in FY '25, but even for us to get to INR 500 crores in FY '26, we might have to grow by 25%, 27% CAGR for FY '25 and FY '26. This year, most probably we will end up with somewhere around INR 325 crores, INR 335 crores kind of revenue on a normal basis. From there, the journey to INR 500 crores will require significant growth. So what is our view on the outlook, which was given -- guidance which was given earlier? And how confident are we of achieving those numbers, if not in FY '25, now FY '26 also seems to be a bit difficult?

With regards to the target that we have taken for FY '26, which is INR 500 crores, yes, it's not going to be as easy as we thought maybe a year ago. This year has practically been flat. But we have not given up our hope. We remain very committed to that number. We will be putting extra efforts. We are planning those efforts. So we have not shaken from that target.

Right. Sure. But how is the pipeline looking for us, especially on the pharma side because that is our major segment? So how does it -- how is the pipeline in the pharma side because that has to shoulder the major burden of reaching INR 500 crores apart from other segments will also contribute. But given the pharma has to take the lead and second would be the food segment. So if you can share your views on pharma pipeline?

So one thing is pipeline, the other is the various knowledge assets that we have built during the last year or so. I might have mentioned this in my previous interactions as well, but we are now building capabilities for large molecules. So that is something that we are confident about. The opportunities look very strong for large molecules. And we have the capability to support large molecules right from the preclinical stage to the clinical stage and of course, the entire analytical spectrum. So that's one capability that we have built. Agricultural preclinical activities, we don't call them preclinical, we call them non-animal studies. So there also, we have been building capabilities. There were capacity constraints, which we will now not be having as we move into the new facility. So that gives us more actually infrastructure to drive that business with greater focus. Similarly, we had constraints even for adding equipment for our analytical division. So those constraints will not be there once we inaugurate this new facility. So I reiterate that we are still very committed to that number. It is achievable. It's not going to be easy, but it is achievable, and we are going to work very strongly towards that number.

So one thing was on the capacity side, capacities will be building up when the CapEx coming in, let's say, next month in March. So -- but the other thing is on the demand side. So demand and order pipeline, especially on the pharma side, if you can talk about it, although the recovery we have seen, but is it a long-driven grind because globally, the sector itself is facing a bit of challenges on the funding side, and also if you can talk about it.

The demand is good. And I think pharma companies are also changing their development pipelines. There is some more and more thrust on specialty smaller molecules than the rather routine generics. So we don't see any dip in demand on the pharma side.

Okay. And my last question was on the food side. How is the food business doing? Because in our press release, you mentioned that food segment has seen a bit of demand recovery after subdued last 2 quarters. So if you can talk about the food segment as well as our JNPT lab, NFL lab set up. How is it doing?

Yes, food was low in Q2, we saw recoveries in our routine business in Q3. The NFL JNPT revenues, the import volumes seem to be low because the samples are not really picking up. They're still at very low numbers. So yes, that is slightly impacting the plans that we have for food in this year. But then we have our other routine business, which we hope to work on and meet those numbers.

But the challenges that we have with regards to getting more samples through our laboratory and not giving those samples to the other smaller laboratory, is that still continues to persist? Or you're seeing some improvement in that, if the challenges continue to persist, what steps are we taking to mitigate that?

Challenges around low-sample volumes at NFL, they continue. And there is not much we can do. It's the decision of the regulator. So we don't influence those kind of decisions.

Okay. Okay. Any changes you see in that or that is expected to continue?

Sorry, can you repeat, please?

Any changes that you see in FSSAI approach in the near term? Or it will continue like this?

I won't be able to comment on that. We are definitely putting our case forward to them continuously. The outcome of that continuous effort is quite unknown to me also at this point of time.

[Operator Instructions] Next question is from the line of Ankeet Pandya from InCred Asset Management.

Congratulations on a great set of numbers. The first question is on the food business. Like given that currently due to the Red Sea challenges that are happening, so are you seeing any slowdown in the import of food business? Or do you see any impact going forward, probably like for next 1 or 2 quarters that the food segment might get impacted?

The import volumes are low. Even year-on-year, when we compare the numbers, the volumes seems to be lower than last year. Will they pick up in the next couple of quarters, I must say I don't have that kind of information with me. But with regards to how we are going to plan our business around this is we are not going to take any increase here into account. We will work on our other streams of revenues for food.

But so probably due to this, given 1 or 2 quarters might see further slowdown or muted kind of a growth in the food business, any challenge do you see in the medium term?

I don't know if they will go down further. They're already quite low. So I'm not expecting them to go down even further.

And in the Pharma segment, given you have already in a way to a question answered that the funding challenge issue was there. But like what are the steps or strategy that you'll be doing like to target the big pharma or big molecules going forward? So how is that going to pan up? What is the strategy for -- from the company perspective on this side? Because given that the pharma is one of the biggest segment for us, so how do you plan to target the big molecules and the big pharma companies going forward?

We have already started that journey of building capabilities for large molecules. You obviously have to develop the science, the knowledge within the organization before you give the confidence to your prospective customers that you are capable of delivering those services with good science. So that -- those POCs have already been begun. And we've had a good response from people who have been working with us for a long time. They know us, they trust us. So the first few studies will come from such good partners. And once we are able to build a track record, I think then we stand on a better ground in going and soliciting more business from newer companies. And so that's on the operational side. On the business development side, we have stepped up after COVID our reach out into Europe and U.S. So that continues. Usually, these services have a little longer lead time. And we started this exercise almost a couple of years ago. So we see the conversions happening. We see good traction. The kind of projects that we are able to get, that's quite encouraging.

Okay. Lastly, just directionally, if not any guidance or number-wise, directionally, like we have previously also done margins of around 30%, 31%. But given that we have one newer facility coming on board, like you said, in the next 6 to 8 weeks that and plus a bit of a muted demand scenario currently. By when can we like target to achieve 30%, 31% plus EBITDA margin directionally, not any particular year-wise, but directionally, when can we see that? And what will be the drivers for that?

The growth in top line will be the key driver for coming back to the 31 percentage is kind of bottom line. Yes, the new facility will have some impact, the depreciation will increase the cost of maintenance. These are laboratories, a good amount of expenditure is around the maintenance of these facilities. So the sooner we are able to consume the capacity that we have built, the faster we will be able to get back to those margins. And it's all a question of driving the top line.

[Operator Instructions] Next question is from the line of [ Dhaval Dama from Turquoise Capital ].

Ma'am, my only question is regarding NFL. The kind of CapEx and operating expenditure that we are doing on NFL and the continuous disappointment as both a minority shareholder and majority shareholders you are seeing in that. How does this affect -- or I mean what kind of judgment do we take in terms of future capital allocation? Because in the last few years, a few of our capital allocation decisions have not turned out to be correct. So whether it's the diagnostic space or NFL, whenever we have gone slightly different from our core businesses, the -- at least in the near term, it does not seem to be reaping any benefits for the shareholders. Would you care to comment on that, please?

Respectfully disagree with your comment on not adding value to the shareholders. I think the past few years growth would refute the statement. Coming to the investments that we have made in NFL. That's a very efficient lab that we have built. And we have reallocated the resources from our other lab to set up that lab. So it's a profitable lab, even with such unexpectedly low volume, that's a profitable lab. So I wouldn't say that we failed there. On the diagnostics, yes, but that is mostly on the operational expenditure side, not on the CapEx side. We were a bit, I think, unduly confident with our expansion into Delhi and Kolkata, which have not really worked out for us. So that we stand corrected now that we realized is not our strength, therefore, will not be our strategic focus also going forward.

[Operator Instructions] Next question is from the line of V.P. Rajesh from Banyan Capital.

Congratulations on a good quarter-over-quarter rebound.

Could you speak a little louder?

Yes. Am I audible now?

Yes, sir.

Okay. What I was saying is congratulations on a good rebounce on a sequential basis. My question was more on the year-to-year side. If you look at your numbers, the revenue has gone up by 5.2%, but your EBITDA is almost flat year-over-year and majority of that is because of your material and testing costs and the employee cost. So the point I'm trying to make is one doesn't see the operating leverage flowing through. So if you can comment on that, that will be helpful.

Thanks for the question. On the margin spend, of course, as you rightly mentioned, so we had expected higher numbers in top line, which we didn't realize because of Q2 underperformance than the expectation. That has kind of impacted our overall margin achievement. So going forward, we are expecting this to improve definitely from the current levels. Does this answers?

Okay. So I think somebody else also...

Sorry, it's not clear.

Yes, I was just saying that what I'm hearing from you is that this 27.5% EBITDA margin can get better in the next coming quarter. Is that the way I should think about your comment?

Yes. Yes. It can become better than 27.5% because we are expecting the growth levels to continue or rather improve from the current levels.

Understood. Understood. Okay. So just on the cost of materials, you're saying that there is nothing out of normal in that number in this current -- in the quarter that went by?

No. There is no one-off item included in cost of material.

Okay. And just very quickly, what was the cash number you mentioned? Sorry, I didn't catch that.

You mean cash, right?

Yes. Cash at the end of the quarter, you mentioned the number that you are positive cash. It was I think INR 83 crores? Or what is the exact number? I didn't understand it.

Yes. So we had generated a positive operating cash flow of close to INR 57 crores, INR 58 crores for the period ended December 2023. And we were sitting on a cash close to INR 38 crores by the end of December 31. This is despite we incurring a significant amount of CapEx towards the project expansion. Despite that, we are in a very comfortable cash position.

And that INR 38 crores at the end of the December quarter, correct?

Correct.

[Operator Instructions] Next question is from the line of Ankeet Pandya from InCred Asset Management.

Just on the CapEx front, I just wanted to get some clarity. Now given that food and pharma that we have built capacities and just that demand will see the growth. Given that in the long term, you have also alluded that electronic and environment segment will be also a big driver for the top line growth. So going forward, by when do you see like the next CapEx cycle will come for the company because given that environment and electronic is relatively a smaller segment for us currently. But when such starts scaling up, by when do you see that we might go into a CapEx phase for that particular segment?

We have already created additional space to add one more EMI/EMC chamber in the new facility that will commence soon. So maybe our expectation is we might get a new chamber in the next 6 to 8 months.

For the electronic and environmental division?

Electronics and electrical product specific division.

Okay. And what will be the roughly, let's say, CapEx requirement that goes into that?

That chamber typically costs about INR 4.5 crores to INR 5.5 crores.

Okay. So not a major CapEx plan at least for the next 1 year, 1.5 years, except for this part?

We are just in the process of making our business plans for this upcoming new financial year. So if there are some exciting opportunities in terms of adding new capabilities to our existing services, then such ideas demand that we infuse CapEx to get those technologies, then we might spend more. But at this point of time, I'm not sure what could be the spending. We are yet to look at the budget proposals.

Next question is from the line of Ankit Gupta from Bamboo Capital.

On the electrical and electronics side, given the response for our service has been quite good, how do you see the scale up happening in the segment over the next 2, 3 years? Can this segment become INR 50 crores kind of contributor to our overall revenue in FY '26 or '27?

'26, '27 is about 3 years away. So yes, INR 50 crores would be a stretch, but definitely about INR 30 crores in the next 2 to 3 years.

[Operator Instructions] Next question is from the line of [ Vileet Sahu ], an individual investor.

Ma'am, there are basically 2 questions. One in Life Sciences, you talked about our aspiration to become bigger and larger in longer projects. Can you give us some qualitative view on the proof of concepts we are doing? Has there been a material shift in the quality of POCs we do in Life Sciences. So whether it is in terms of geography, are we more into developed regulatory markets versus India? And in terms of India, is the customer mix changing from our traditional small molecule customers to maybe a new-age customer? So that is one question. The second is in terms of electronics and electrical, can you tell us some sectoral tailwinds, particularly we see defense, there's a lot of spending, et cetera. So can you give us what kind of a trigger you are getting from the marketplace from your sales team?

I just want to reconfirm my understanding of your question in the second half. You want to understand which industries within the electronics and electrical products are giving us a good outcome. Is that your question?

Yes. So my understanding is we are mostly into industrial electronics and electrical equipment and not as much into consumer electric and electronics, for example. I could be wrong, just correct me. So I just want to see -- understand what kind of segments you are focusing more and where you see opportunities in the next 3 to 5 years? As you said, you reach around INR 30 crores, INR 35 crores, which is like 50%, 60% growth, although on a much smaller base. Just trying to understand what kind of industries will give you that kind of a growth?

Okay. So I will answer the second portion of your question first. So Hyderabad is a defense component manufacturers hub. So we do get a lot of -- major portion of our business comes from these defense component manufacturers. The kind of products that we test, actually the range is quite impressive. Right from the defense components, we do even communication systems used in railways, used in aircraft. We test for drones. We test drones that are used in military. We test drones that are used for agricultural purposes. We have tested even industrial products like the HVAC systems, even domestic products like fans. It's a huge variety because the specs that we have built in our lab in terms of the technology capability is quite impressive and can address a lot of product testing requirements. So that is about E&E. Coming to the former question about how our customer mix is changing in India. We work with most of the customers -- sorry, most of the manufacturers who have their businesses in Europe, progressive markets of Asia and America. So mix as such is not changing for us. Some of the big players here in India are now expanding their pipelines into peptides and large molecules. So we work with them on the small molecules side and we wish to build good partnerships on the large molecules side as well. POCs, when it comes to large molecules, they are underway. We have our projects in hand. We are just waiting for the samples to come to kickstart those projects. Did I answer all the segments of the question...

What I was -- on the second one certainly. But on the first one, what I was trying to understand more clearly is if we -- if the quality and the quantity of POCs are mechanically shifting towards more complex projects and larger life cycle, we are basically analytics, we are known for that. So is there a material shift you are seeing because this will result in 2, 3 years of business going forward to indicate a direction for next 2, 3 years?

Our revenues come from during product development and also during the manufacturing of the product. So when we are supporting the product development, then the project sizes tend to be larger, longer also in duration. But once the product is tested, I mean, developed and then validated, then the recurring continuous samples start coming in. So they have a complementary and actually a compounding effect when we start supporting our customers in developing their products.

Sure, sure. So one last question. Last quarter, you talked about some regulatory headwinds in pharmaceutical testing, particularly getting approvals, et cetera. Is that problem still -- is it continuing? Or is there -- has been some respite?

No, no, the licenses are flowing nicely again now. They have come back to the normal timelines. No issues now.

[Operator Instructions] Next question is from the line of [ Manav from Quad Investment ].

I'm really sorry if I have missed the first portion, first 30 minutes I wasn't there in the call. So not really sure. If it's repeat, just let me know the remaining information. So my question, ma'am, there are 3 parts to the question. As we had discussed the CapEx for the year of INR 90 crores. So are we in line with the quarter 4 also looking in the same lines to complete the CapEx? And how has the additional capacity, we're doubling our office space, how has it been done? And also, have we seen the utilization properly used because you've said that you'll be using the same people, the same machinery will be relocated because we didn't have space. So how are we seeing that space being utilized now?

Okay. CapEx, there were 2 components to our CapEx this year. One was for the project, there I think we are going as per our budget. And then the other one was for our routine investments. That we have not spent as much as we were hoping to spend because we didn't do that much of sale. We didn't need to spend that much. Coming to capacity utilization, yes, initially, we will be moving a couple of divisions into the new building. As and when we are able to grab more opportunities, we will be adding capacities in terms of manpower and equipment.

Okay. Okay. Ma'am, in the last call, you had mentioned that the Europe and U.S. economy is a little bit cautious on their pharma R&D spend, are we seeing the recovery happening this quarter or the third quarter also, there are some, what do you say, green shoots or any such sorts of recovery signs or metrics you're tracking from those economies?

This is Sreenivas. Europe, I mean, on the business front, when it comes to their manufacturing and all, I think that's where the challenge is, but not in the pharma and biotech segment, because Europe is at the forefront of biotech development, and that is not slowing down for them. So I think when you look at the pharma side of the business, I think they're doing good.

[Foreign Language] you are seeing some recovery happening over there?

This segment was always protected, and also Europe also leads in the agrochemical and specialty chemical business. So we don't see any slowdown there. And these are agrochemical and specialty chemical is highly regulated subject in most of the European countries. So there is also strengthening of regulations where they want to tighten the limit for most of these agrochemical and specialty chemicals, so that's why for us, CRO, I think this is opportunity that way.

Okay. Sir, then upcoming year FY '25, what are you seeing, whether the recoveries to be as they were in the 2021-'22 cycles. Are we seeing those kind of spending coming in again? Because I think the 2 years, there was a slowdown or some recessionary period. So do we see that coming back, just I wanted to make this as the conclusion.

It is coming back, yes, the market is coming.

It is reviving. Okay, sir. Sir, on the third part, on the JNPT, we see the volumes have increased, but the values have been the same thing. How have these been impacted from these volumes and the values are the same, but have we increased our proportion of business? And also, if you can just provide some certainty of revenues or any kind of, what do you say, profitability projection from JNPT side because we are very -- there very -- [Foreign Language] it's government regulated. So if any certainty or any surety can be given on revenues, what can be expected going forward? Because we had predicted INR 100 crores will be coming in from '25. So do we see -- are we reaching those lines per year?

Yes, that we're still thinking, we hope we get INR 100 crores, but we never made that statement. And again, the volumes are directly proportional to the value. If the volumes are there, the value will also increase, so there's no decrease in value because of doing more work and getting less value, so that's not the right assumption again. And we had already spoken in detail about this question earlier also. This is -- the volumes are controlled highly by the regulators. We keep making our consultations to the regulator because capacity-wise we have built the lab, which can sustain additional volume. Again, it's in the hands of the regulator, how they -- what was their forward thinking is or how they think moving forward and allocate more volumes going forward.

Perfect. Sir, I just wanted to understand your strategy on the large molecule. How is it developing? If you can just comment any development, any substantial. Have you seen on the large molecules side, what is the progress going on, on that side? If you can just comment on it.

If you look at the 2023 global filings and approvals of the new molecules segment, only 34% is from small molecules -- sorry, 36% is from small molecules, the rest is from the large molecules, right? And these large molecules eventually will come to the generic market as well. India is today a major generic player for biologics. We are not an innovator except for 1 or 2 companies. And our pharma companies are still fighting to get approvals in either Europe or the North American markets. So as such, the investments are good. Some companies are still very positive. And more and more products are being added to their product lines. We as a company are on CRO side. We got into this almost a decade ago. We started doing the ancillary services at that time. But from the last 5 years, we have developed capabilities to service these markets in all the 3 aspects, on the preclinical testing, animal testing side, human testing as well as analytical testing.

Okay. Sir, just a follow-up on a large molecule. Do we have any plans? Or do we foresee anything like contract manufacturing, CRM also being done except from -- sorry CDMO also being done, except from just the research and, what do you say, preclinical and the clinical stage, apart from manufacturing, do we foresee any such subsidiaries or any venturing onto with other players like associations or JV kind of structure?

As of now, nothing that we have looked at very seriously, but yes, it's a logical expansion and we will take the call when the right opportunities comes.

That is open -- [Foreign Language] this point is open for discussion in the Board?

Yes.

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

Thanks, everyone, for attending this call and for the nice question and answers that we had. I just want to thank Vishal and our partners E&Y for joining us in this call. Have a good day. Bye.

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