Laurus Labs Limited (LAURUSLABS) Q3 FY23 Earnings Concall Transcript

Laurus Labs Limited (NSE:LAURUSLABS) Q3 FY23 Earnings Concall dated Jan. 30, 2023.

Corporate Participants:

Satyanarayana Chava — Founder & Chief Executive Officer

V V Ravi Kumar — Executive Director & Chief Financial Officer

Analysts:

Monish Shah — Antique Stock Broking Limited — Analyst

Sajal Kapoor — Individual Investor — Analyst

Bharath — Quest for Value Capitals — Analyst

Nikhil Mathur — HDFC Mutual Fund — Analyst

Krish Mehta — Enam Holdings — Analyst

Surya Patra — PhillipCapital — Analyst

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

Devvrat Mohta — Capital International Inc. — Analyst

Harith Ahamed — Avendus Spark — Analyst

Anandha Padmanabhan — PGIM India Mutual Fund — Analyst

Nitin Agarwal — DAM Capital — Analyst

Kunal Dhamesha — Macquarie — Analyst

Jeevan Patwa — Sahasrar Capital — Analyst

Hussain Kagzi — Ambit Asset Management — Analyst

Palak Shah — Infina Finance — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Laurus Labs Limited 3Q FY ’23 Earnings Conference Call hosted by Antique Stock Broking. [Operator Instructions] Please note this conference is being recorded. I now hand the conference over to Mr. Monish Shah from Antique Stock Broking. Thank you, and over to you, sir.

Monish Shah — Antique Stock Broking Limited — Analyst

Thank you, Vikram. Good evening, and welcome to Laurus Labs 3Q FY ’23 Results Conference Call. We thank the management for giving us the opportunity to host this call. Today, we have with us Dr. Satyanarayana Chava, Founder and CEO; Mr. V.V. Ravi Kumar, Executive Director and CFO; and Vivek from the IR team.

I will hand the call over to Dr. Chava his opening comments. Thank you, and over to you, sir.

Satyanarayana Chava — Founder & Chief Executive Officer

Thank you, Monish. Thank you for joining us for our Q3 and 9 months FY ’23 results conference call. We are pleased to have this opportunity to update you on our business progress and answer your questions. Now let me share three thoughts on our performance. Our business has continued to perform well, both during the quarter and also on a 9-month basis, reflecting a sustained momentum across our key growth drivers. We are all well positioned to close the year with strong double-digit revenue growth with steady margins.

We remain firmly focused on our strategic priorities, to diversify, drive growth and delivering long-term sustained value to our customers, partners and our stakeholders. In addition, we’ll continue investing in mechanization, automation and, with digital initiatives, to boost operational efficiency. We also like to update that recently, Laurus Labs has been selected as a panel supplier by the global fund for RV drug procurement, and the contract will run for a period of three years.

For over a decade, our company has been committed directly and indirectly to the cause of HIV. And this tender offers us, again, a great opportunity to make HIV treatment accessible to more than 150 countries through global fund and other multilayer agencies. During this quarter, Unit 5 received AR from U.S. FDA. Moving on to our financial results; we are pleased to report that we achieved ALD top line and bottom line growth for both quarter and 9 months.

We made additional advancements in our R&D initiatives, pipeline enhancement, diversification and new capacities qualified and ready for commercial production. We are confident in the underlying demand for our portfolio and scale as we continue to see momentum in our business. We have achieved INR1,545 crore revenues for the quarter, showcasing a 50% growth year-on-year. And for 9 months, we plot revenues of INR4,660 crores, a growth of 33% for year-on-year. Our strong results are driven by [Indecipherable] growth in our Non-ARV revenues, especially CDMO and the APIs other than ARVs.

Our growth was also supported by much-anticipated recovery in ARV formulations and — which is expected to continue further. Our profitability margins have sustained despite ongoing disruption in business environment caused by inflationary headwinds and also geopolitical risks. To begin, I would like to share key updates on our Formulation business. Our Formulation division has sequentially recovered with 67% growth and reported overall revenues of INR747 crores for 9 months with a decline of 46% year-on-year.

If you look at our Q3 revenue, although there is a degrowth of 43% but it has seen a healthy recovery over Q2 base, and we expect it to further normalize during the next few quarters. Coming to the LMSE business while broader demand environment in ARV have continued to stay softer, our business have shown from respect of Q2 low base. But pricing has largely remained depressed. We remain optimistic over a gradual stabilization in a volume offtake ahead. This is partially supported from open orders and visibility from new global fund HIV tender. During 9 months, we launched two products, lopinavir and ritonavir and tenofovir-lamivudine combinations.

Additionally, we are awaiting a few more product approvals, which should help us in stabilizing business in coming quarters. As articulated in the past, we will continue to evaluate our portfolio changes in this business and play selectively for value over volume alone. Coming to developed market; we continue to perform well across our broader U.S. portfolio despite higher competitive [Indecipherable]. We continue to get good market share on select products and also increasing volumes for our recently launched products.

We continue to leverage our front-end presence in the U.S. market for new product launches. During the quarter, we filed two ANDAs, taking the total filings to 5 ANDAs for the 9 months in the current financial year. We intend to make a few more filings in the current quarter. And cumulatively, we have a total of 37 ANDAs to-date. Of these, we have a total of 14 final approvals and 12 [Indecipherable] approvals. In Canada, we received two approvals during the Q3 FY ’23, taking total approvals to 13, of which we have launched eight products, and we intend to launch at least one product every quarter for the next few quarters.

For new markets, we have validated three products as part of the contract manufacturing partnership. We expect a significant upside from these products in the coming quarters. We have a basket of 11 upgrade products in Europe, of which we have already launched 6, and we will be launching a few products shortly. Based on a healthy product pipeline in progress, we continue to invest in our Non-ARV FDA infrastructure, with the total commission capacity of 10 billion units. We anticipate that these brownfield capacities that we have added recently should start to get better utilized during the course of next year as we begin to see better demand visibility in ARV business, scale up visibility in the partner portfolio and also key product approvals.

On the R&D front, we continue to make good progress and invest in portfolio, with product-specific approach based on complexity and economies of scale. We are pleased to share that we filed our first NDA for our HIV pediatric product during Q3. We believe this unique drug product delivery form for pediatric HIV treatment should complement our existing offering. And we continue to do further developmental work on orally disintegrating film platform, which can be leveraged to create innovative pipeline in other therapeutic areas.

Our sterile R&D labs, which has already started working on priority projects, and we expect to complete development phase for at least three products in the next few quarters. Overall, R&D spending to sales for the quarter was at 3.2%. We have a total of 60 [Indecipherable] R&D pipeline either on development are under review, having an addressable market of over 40 billion brand sales. So far, we have filed 37 ANDAs in the U.S., 12 dossiers in Europe, 19 products in Canada, 9 with WHO, 5 dossiers in South Africa, 20 dossiers in India and 22 products filed in various rest of the world markets.

Of the 37 ANDAs filed in U.S., we have 16 para 4 filings and 11 [Indecipherable] opportunities having a sizable market. From the beginning, our approach remains product-specific and not market-specific. Coming to the Generic API business, our antiviral API sales for this quarter is at INR376 crores. As indicated earlier, we expect volumes and pricing are going to stabilize around the current levels. We continue to maintain a leading market share in the current product pipeline and also expect increase in our supplies to developed market.

Onco API business declined 13% during Q3 but improved sequentially, 45%, and we achieved INR74 crores sales for the current quarter. For 9 months FY ’23, the segment has seen a decline of 14%. As you’re aware, Laurus Labs are have of the largest high-potent API capacity in India. We’re also expanding the high-potent API manufacturing capabilities in Unit 4 to meet continued demand for such products. Our other API segment sales, which include cardiovascular, diabetes and asthma products, have seen steady ramp up, both for the quarter and 9 months. For the Q3, we achieved a sales of INR182 crores, growing at 33% year-on-year.

For 9 months, the growth is very robust at 65%, supported by new contract supplies. During the Q3, we filed three DMS drugs, all in Non-ARV category. With this, total number of DMS filed today is 77. We initiated validation of few APIs, and I expect to see good potential over coming years. We are also working on CMO opportunities with few global generic companies, and some of them are in advanced stages of implementation at the plant. When it comes to Synthesis business, which has continued to sustain robust growth over 200% year-on-year for the quarter, and we achieved sales of INR642 crores. During the 9 months FY ’23, our CDMO business have grown over 2.5 times to INR1,939 crores.

This growth is driven by robust underlying demand from both new and existing clients and our ability to do some commercial execution. We remain quite excited about this division as we are focused on both commercial execution as well as expanding our pipeline projects in various clinical phases. We continue to work on over 60 active projects at different stages, ongoing commercial supplies for about 10 products, including APIs as well as several intermediaries. Our greenfield investments towards building a dedicated R&D center for this division at Genome Valley and two manufacturing units in Vizag is progressing as scheduled.

New sites for synthesis division will have capabilities to handle, animal health as well as agro. The facilities will have dedicated advance for steroids, hormones and high potent molecules apart from large value products. We expect to qualify one of the dedicated animal health manufacturing site by mid of next fiscal. Laurus Bio revenues were largely muted at INR22 crores due to unplanned downtime, resulting to some production deferments during Q3. This was — this has been rectified and brought online. For 9 months, Bio sales grew by about 22%.

We do anticipate pick up with the ramp-up of new capacities with our large-scale CDMO partners in the coming quarters. We have completed scheduled expansion at [Indecipherable], including new R&D block, along with balancing equipments. We initiated passes for acquiring land for R3 greenfield expansion near Mysore. We believe that the new site should further strengthen our Laurus Bio capable bias in offering CDMO services in animal origin pre-proteins as well as growth factors. We believe global opportunity in alternative food proteins is an exciting phase, but will — this will be a fast-growing segment in the long term. Our focus is to have right scale, cost and functionality, which will drive our technology differentiation.

With that, I would like to hand it over to Mr. Ravi Kumar to share financial highlights.

V V Ravi Kumar — Executive Director & Chief Financial Officer

Thank you, Doctor and a very warm welcome to everyone for our quarter three and 9 months earnings call. Total income from operations for the 9 months is INR4,660 crores as against INR3,511 crores, showcasing a 33% growth. During the quarter, we have done at INR1,543 crores against INR1,029 crores with a 50% growth. Gross margin for the first 9 months is at 55.4%. Our EBITDA for 9 months is INR30.7 crores with EBITDA margin of around 28%, whereas quarter 3, INR404 crores with a margin of 26.1%.

The lower margin is due to the negative operating leverage. Our diluted EPS for the 9 months is [Indecipherable] annual basis with a 14% growth. Our ROCE is at 26% on an annualized basis on the back of sustained operational leverage across units, of course, despite of investments into the capex. On the capex front, we invested around INR200 crores for the quarter and — slightly more than INR600 crores for the 9 months.

We’ll be — we have guided INR2,000 crores capex in the FY ’23 and FY ’24. I think we are still committing to around that number for this year and next fiscal. And we believe our capital allocation framework, including commitment towards diversification and strengthening of Non-ARV portfolio, building niche capabilities, invest in disruptive technologies by core integration programs and improving operational efficiencies will continue to be in force in creating a long-term lately.

With this, I would request the moderator to open the lines for the Q&A. Thank you.

Questions and Answers:

Operator

Thank you very much, sir. [Operator Instructions] We have a first question from the line of Sajal Kapoor [Phonetic], an investor. Please go ahead.

Sajal Kapoor — Individual Investor — Analyst

Two questions. Given that our CDMO synthesis business will be self-reliant in about two years’ time, is it fair to expect that management would disclose gross and operating margins, balance sheet and cash flows in CDMO synthesis separately in FY ’25? That’s one. And secondly, my sense is that once there’s significant CDMO synthesis capex at Vizag is complete, there will be time consumed in validation batches.

There will be an extended qualification period for regulatory audits and U.S. FDA, plus other approvals. So there will be a lag before we actually start commercial shipments in a meaningful way. But on the presentation, slide 14, it says and expect to qualify dedicated animal health unit by mid-2023. So can you help us understand the anticipated commercial shipment time lines for all three new facilities currently under construction? Thank you.

Satyanarayana Chava — Founder & Chief Executive Officer

Thank you, Sajal. So the two facilities for CDMO, which are on construction, one is for animal health, the one we will also start construction for agrochemicals. We want to update you. For agrochemicals, we already completed construction of a pilot plant for the registering [Indecipherable]. So registration batches already produced in the agrochemical plant. When it comes to animal health plant, currently, one NCE program validation was done in a dedicated block in one of the other manufacturing of the parent company.

Once the new site is qualified, this will be a new site to be added into the file. And there are some products in some markets, the approval times are shorter. So this site will cater to the global markets, not just U.S. market for animal health. And that is answering your qualification of the programs. When it comes to the separate balance sheet and P&L numbers for this division, I’ll leave it to Ravi Kumar answer.

V V Ravi Kumar — Executive Director & Chief Financial Officer

The — right now, we are using the same common facilities, and it is very difficult to segregate balance sheet and P&L account. So whatever we can segregate, we can — the revenue only can be segregated. That’s how we are showing only the revenue breakdown. Probably in the next three to four — maybe three to four years and we have a separate — we have a subsidiary, it could have been under a subsidiary and tell you how we will know the balance sheet and P&L of this synthesis upgrade.

Sajal Kapoor — Individual Investor — Analyst

Thanks, Dr. Satya, for your qualification and the commercial shipment response. That’s really helpful. Mr. Ravi Kumar, the reason — the only reason investors are interested in knowing more about the economics of our CDMO synthesis is that the economics of — and as a division are significantly better than the rest of our businesses. So when we say that we will have an independently self-sustaining sort of business in two years’ time that is FY ’25, it should also mean that we’ll have enough room in the balance sheet to raise external resources if required.

But otherwise, our operating cash flows adjusted for working capital should be able to sustain the growth momentum of this business going forward because, as we understand, the CDMO synthesis business has a very long runway of growth ahead. And the way team Laurus has executed in the last 7, 8 years, I mean, we were just INR100 crore, including the ingredients and the innovator synthesis back in 2016. So we have come a long way, but we are still scratching the surface. So it would really help all investors to have a better color on the economics of this business, not immediately, but yes, as I said, two to three years out. That’d be helpful.

V V Ravi Kumar — Executive Director & Chief Financial Officer

I appreciate that point, but the only challenge is because there is a common facilities, the segregation is very difficult. But over a period of time, we will see what best can be done.

Sajal Kapoor — Individual Investor — Analyst

Thanks Ravi. I have more questions. I’ll join the queue. Thank you.

V V Ravi Kumar — Executive Director & Chief Financial Officer

Thank you.

Operator

Thank you. We have next question from the line of Bharath [Phonetic] from Quest for Value Capitals. Please go ahead.

Bharath — Quest for Value Capitals — Analyst

Yeah. Sir, in many forums in the past, you said that ARV business, both API and Formulation combined will be less than one-third by FY ’25. Do you still think that you can achieve this by FY ’25?

Satyanarayana Chava — Founder & Chief Executive Officer

We — if all our diversification plans goes as we are thinking, it is possible. As you see for 9 months, our ARV APIs is 25% of our revenue. And our ARV Formulation is about 10% of our revenue for 9 months. So that is 35% of revenue came from ARVs, APIs and Formulations in the coming — this 9 months period. So we do anticipate rest of the divisions will grow faster than ARV. We are hopeful that by FY ’25, the ARV business will be one-third of our business.

Bharath — Quest for Value Capitals — Analyst

Okay. Thank you. And currently, we have around 5,000 employees, and revenue contribution per employee is around INR1.2 crores. In one of the recent interview, you said that you have vision to double the number of employees that is from 5,000 to 10,000 and also have a revenue contribution per employee from INR1.2 crores to INR2 crores per employee. May I know, like, by when you want to have this vision to be achieved?

Satyanarayana Chava — Founder & Chief Executive Officer

I think we didn’t put a time line to that. We didn’t put time line. But currently, we think.

Sajal Kapoor — Individual Investor — Analyst

Do you think like in three years or five years?

Satyanarayana Chava — Founder & Chief Executive Officer

Currently 6,000 team size now, close to 6,000 team size. And we have added about 20% new colleagues in this current financial year and about 25% new capacities in APIs. 50% new capacities of Formulations were added during the current year. I think we can’t give you a specific timeline when we will be 10,000 team size.

V V Ravi Kumar — Executive Director & Chief Financial Officer

You said the only 10,000 team size not the other one.

Bharath — Quest for Value Capitals — Analyst

Okay, thank you. And regarding this global fund allocation, which we bought for the period ’23 to ’25, may I know — the volumes allocated is more than the previous allocation, and also like how much price erosion was there compared to the previous allocation?

Satyanarayana Chava — Founder & Chief Executive Officer

We can’t give you the price erosion in absolute terms or also volume in absolute terms. We got fair share of business. We are not the lowest to bid us in the tender. That much I can tell you. Yeah.

Bharath — Quest for Value Capitals — Analyst

Okay, okay. Thank you. That’s helpful. And also sir, with a sharp jump in number of active projects in CDMO, in Q2 presentation, it was mentioned as 50. And now in the latest presentation, it’s 60. So there’s increase of 10. May I know what led to the sharp increase in the number of active projects?

Satyanarayana Chava — Founder & Chief Executive Officer

We got awards for clinical supplies. And we expect this number will continue to grow. Yeah.

Bharath — Quest for Value Capitals — Analyst

Okay. Thank you. And my last question is — you have increased the API capacity by 1 million, I guess, in Q3, and also you’re planning to increase other 1 million in Q4. That’s almost 2 million increase in API capacity. May I know which division will you use this additional 2 million [Indecipherable]? Is it for non-ARV API or for captive [Indecipherable] or for CDMO?

Satyanarayana Chava — Founder & Chief Executive Officer

It’s a very interesting question. Most of the increased capacity will be used for Non-ARVs.

Bharath — Quest for Value Capitals — Analyst

Non-ARV API, you mean the other API, is it?

Satyanarayana Chava — Founder & Chief Executive Officer

Yes, other APIs and CDMO.

Bharath — Quest for Value Capitals — Analyst

And CDMO?

Satyanarayana Chava — Founder & Chief Executive Officer

Yeah.

Bharath — Quest for Value Capitals — Analyst

Okay. Okay. Thank you. And one more question, if I may. So I see that in the investor presentation that there is new capacity planned for Laurus Bio adjacent to R2. So I mean is it a brownfield expansion of R2 you’re talking about here?

Satyanarayana Chava — Founder & Chief Executive Officer

See, in R2, Laurus Bio, we had a mismatch of downstream processing when it comes to upstream processing. So we are debottlenecking that. We have taken land adjacent to R2. So with that, our output will go up. Our upstream capacity is much larger, downstream is less. So we’re removing that mismatch because we know what products from the CDMO partners. We have a better visibility, how much downstream is needed. We are doing that. Our real expansion will happen in R3 where we have identified and paid the advance for land near Mysore. So that will be the real expansion where, eventually, that site will have a two million liters of fermentation capacity.

Bharath — Quest for Value Capitals — Analyst

Exactly. So this R3.

Operator

Sorry to interrupt Mr. Bharath. Would you like to come back in the question queue?

Bharath — Quest for Value Capitals — Analyst

Okay. Thank you. Thank you very much.

Operator

Thank you. [Operator Instructions] Your next question from the line of Nikhil Mathur from HDFC Mutual Fund. Please go ahead.

Nikhil Mathur — HDFC Mutual Fund — Analyst

Yeah, hi, sir. Good evening. I have a couple of questions. My first question is on the Formulation business. In 9 months, the business has roughly declined by around 45%. Can you give some understanding how much of this decline is concrete, is attributable to ARV Formulations and how much of this attribute is Non-ARV Formulation?

Satyanarayana Chava — Founder & Chief Executive Officer

Close to two-thirds is the ARV. One-third is Non-ARV.

Nikhil Mathur — HDFC Mutual Fund — Analyst

Two-thirds ARV and one-third Non-ARV. Okay. What is the reason behind the decline in Non-ARV Formulation? Although many other export-oriented companies are also reporting — been reporting soft numbers, is it something you would destocking or more competition in the market? What are the reasons can you pinpoint why the Non-ARV business is also under pressure in the Formulation side?

Satyanarayana Chava — Founder & Chief Executive Officer

Our Formulation contribution from Non-ARVs was around 20%, 25%. Because of the ARV revenues were less, the — percentage-wise Non-ARV has contributed to one-third. But otherwise, we didn’t see a decline in Non-ARV Formulation in absolute terms.

Nikhil Mathur — HDFC Mutual Fund — Analyst

Okay. Okay. So this entire decline is basically the ARV Formulation piece then?

Satyanarayana Chava — Founder & Chief Executive Officer

Yes. Yes.

Nikhil Mathur — HDFC Mutual Fund — Analyst

Okay, understood. Also in your investor presentation, you have mentioned that the FY ’25-’26 role is to have more than 25% revenues from Synthesis. I’m not sure what [Indecipherable] 25% means, that it could be 25%, 30%, it could be more than 30% as well. But it does seem that from 42% for the 9 months FY ’23, the decline, the synthesis a contribution. So the question here is that what happens to margins in this case if your customer Synthesis contribution will go down over the next couple of years because the broad understanding that customer usually the higher-margin business. So does it imply that the margins could be in some sort of a pressure over the next couple of years?

Satyanarayana Chava — Founder & Chief Executive Officer

So when we are looking at our investor presentation outlook slide, that was the goal, over 25% doesn’t mean it will come down to 25%. So that is the goal we wanted to keep for our internal. That’s already achieved. You can consider that the goal is achieved much earlier than 2025. This goal we put when our Synthesis revenues were contributing 18% to our revenues last year.

Nikhil Mathur — HDFC Mutual Fund — Analyst

Okay. Yeah. But sir, intuitively, I mean, this is a very strong year for the Synthesis business in FY ’23. I’m not sure if you’re calling out the level of un-sustainability in this scale in FY ’22. The asset contribution should only go down in ’25 — ’24 and ’25, right? So wouldn’t that imply that margins should be under pressure next couple of years?

Satyanarayana Chava — Founder & Chief Executive Officer

Are you there in the line?

Nikhil Mathur — HDFC Mutual Fund — Analyst

Yes, sir. I’m there.

Satyanarayana Chava — Founder & Chief Executive Officer

Okay. So the — in FY ’25, when we say 25%, so it is on the increase in revenue of FY ’25, right? So in an absolute number this will be much higher than what it is today.

Nikhil Mathur — HDFC Mutual Fund — Analyst

Okay. Understood, sir. Thank you.

Operator

Thank you. We have next question from the line of Krish Mehta with Enam Holdings. Please go ahead.

Krish Mehta — Enam Holdings — Analyst

Hi. Thank you for taking my questions. I just had two questions. One is what is the absolute ARV revenue for this quarter?

V V Ravi Kumar — Executive Director & Chief Financial Officer

Absolute ARV for this quarter, API is INR367 crores, INR376 crores for APIs and INR140 crores for the Formulations, about INR516 crores. About one-third — 36%, 35% of revenues came from ARVs, both APIs and Formulations.

Krish Mehta — Enam Holdings — Analyst

Okay. And what was ARV FDF for this quarter?

V V Ravi Kumar — Executive Director & Chief Financial Officer

INR140 crores.

Krish Mehta — Enam Holdings — Analyst

Okay. Thank you so much.

Operator

Thank you. We have next question from the line of Surya Patra with PhillipCapital. Please go ahead.

Surya Patra — PhillipCapital — Analyst

Yeah. Thank you for the opportunity, sir. Just wanted to understand freight cost — or to understand the cost equation better. Sir, what is the share of the overall cost of the freight cost? And what would be the rise in the energy cost for this quarter over last year? If you can share that.

Satyanarayana Chava — Founder & Chief Executive Officer

Freight cost, I think at an overall level, it could be very significant. It’s not very significant.

Surya Patra — PhillipCapital — Analyst

Okay. Any specific reason? I think generally, freight cost is around mid-single digit kind of number. And last year, the way it has had appreciated — so that has become a kind of important number. Or I’m reading slightly differently?

Satyanarayana Chava — Founder & Chief Executive Officer

Most of the export sales happen in the sea — by sea. If it is by air, actually, I agree with you that the costs are too high. So it will impact. Most of the sales happens through by sea.

Surya Patra — PhillipCapital — Analyst

Even the freight cost are — sea-based freight cost had.

Satyanarayana Chava — Founder & Chief Executive Officer

Gone up significantly. But when it comes to percentage to revenues, it’s not very high. It’s not very high. You were asking about the power cost increases. During the.

V V Ravi Kumar — Executive Director & Chief Financial Officer

First quarter.

Satyanarayana Chava — Founder & Chief Executive Officer

First quarter, we have seen significant rise in the energy cost. Because of lack of power in our industrial zone, we did buy from private power, which was expensive at that time. But now situation improved, and we are not buying any private power higher than the grid power asset.

Surya Patra — PhillipCapital — Analyst

Okay. Sir, if I just compare the FY ’22 energy cost number versus FY ’21. So then during ’21, it was 2% of revenue was energy cost, which became 4% in the FY ’22. And it is believed that FY ’23 numbers are much higher, obviously, than FY ’22. So that is why I was trying to understand whether it is now around 5%, 6% of the total cost.

V V Ravi Kumar — Executive Director & Chief Financial Officer

No. The energy cost, not only power. Actually, the coal cost also there. Within the coal cost, coal prices have also shoot up. And then now the coal prices also become normal. So the — I think that kind of a substantial increase is not there, but definitely increase is there. But if you need any specific percentage, actually, we will let you know.

Surya Patra — PhillipCapital — Analyst

My ultimate question was that even this quarter performance if you see the gross margin has sequentially come down, although you have indicated that the product mix would have, to some extent, impacted. But if you see the revenue mix, there is not much change sequentially. And there is a 2% kind of gross margin erosion. And on the other expenses front, if I see, from the pre-COVID level, now it is almost like 4% kind of rise. So these two things I wanted to understand a bit. If you can elaborate, that is fine.

Satyanarayana Chava — Founder & Chief Executive Officer

Yes, we’ll try to answer your question. So when it comes to the decline in gross margin that was primarily driven by the ARV, APIs and Formulations. We don’t expect further decline in ARV, APIs and Formulations as the revenue from other divisions increased. So the margins will continue to grow. We don’t expect the margins will come down further.

Surya Patra — PhillipCapital — Analyst

Okay. About other expenses, if you?

Satyanarayana Chava — Founder & Chief Executive Officer

Other expenses higher because of several new capacities were qualified in API as well as in Formulations. As you know, company’s philosophy is to expense all preoperative expenditure. There was an operational deleverage. Yeah.

Surya Patra — PhillipCapital — Analyst

Okay, okay, sure, sir.

Operator

Thank you. [Operator Instructions] We have next question from the line of Tushar Manudhane with Motilal Oswal Financial Services. Please go ahead.

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

Thanks for the opportunity Just extending previous questions of how much would be the operational costs related to this expanded Formulation facility of 5 million liters?

Satyanarayana Chava — Founder & Chief Executive Officer

We can give you the new block has about 300 colleagues right now. So we can’t give you the specific number, but I can reiterate the company’s philosophy to expense all those. Yeah.

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

Okay. And sir, just secondly, given that we are sort of exploring CDMO across three fronts, pharma, agrochemical and animal health, if you could elaborate what kind of asset margins of the written ratios, you would have sort of thought about when utilizing the, let’s say, the capital allocation for CDMO across these three different spaces?

Satyanarayana Chava — Founder & Chief Executive Officer

Based on our current understanding, the animal health and human health CDMO have similar different ratios, whereas agro, asset turnover is higher but the margins are a little lower when compared to this. But when you multiply asset turnover margins, I think return ratios could be similar.

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

And in terms of opportunities, in terms of the developments happening across animal health or the agrochemical in particular?

Satyanarayana Chava — Founder & Chief Executive Officer

Animal health is a fixing portfolio right now. We know what to make, how much to make, our price and it is with one customer and the entire program whereas agro, we already have two. And it is a limited portfolio right now we are exploring further. We’ll give you more details as and when we are in a position to share.

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

Sir, and just lastly, while you’ve said that the margin would be stable. So given that 9 months, we have 28% but for Q3, in particular, we are down to roughly 26%. So does it mean that we would be expecting a good uptick in the margins for the fourth quarter?

Satyanarayana Chava — Founder & Chief Executive Officer

The next year — this year will be closer to 28% probably. But next year, because — the one reason why we are confident is we don’t expect further price drops in ARV, APIs and formulations. So — and we don’t expect significant growth also. The segment, which are growing at higher margin than ARV, APIs and formulations that’s the reason we — our belief the margin should improve.

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

Sure, sir. Alright, sir. Thanks.

Satyanarayana Chava — Founder & Chief Executive Officer

Thank you.

Operator

Thank you. We have next question from the line of Devvrat Mohta with Capital International Inc. Please go ahead.

Devvrat Mohta — Capital International Inc. — Analyst

Hello.

Operator

Please go ahead, sir.

Devvrat Mohta — Capital International Inc. — Analyst

Hi. Devvrat here. I had one question. I wanted to just follow up on margins. If you look at the export data until Q2, there had this big benefit from certain intermediates, which you are supplying, which it seems like the intermediate probably demand for that will probably fall off significantly as we go forward. And if I look at the numbers, roughly, I said INR400-odd-crores of revenue from that one intermediate. And if I work with a 40% EBITDA margin assumption on that single product, I mean, that basically means that the underlying business was probably low 20s EBITDA margin this quarter. So what gives you confidence, if that product goes away as well that your margins hold up at 30% versus the underlying margin kind of 20% — low 20s now?

Satyanarayana Chava — Founder & Chief Executive Officer

There is — as we have — as you might have seen, the active projects have increased from 50 to 60, and we expect that number will go further. So there are projects, which are not one-off in our CDMO. So that will drive our growth. Sorry, go ahead.

V V Ravi Kumar — Executive Director & Chief Financial Officer

And the second is the, whatever [Speech Overlap]. Sorry. Go ahead.

Satyanarayana Chava — Founder & Chief Executive Officer

Sorry, Ravi. Go on.

V V Ravi Kumar — Executive Director & Chief Financial Officer

What would be the negative operating leverage, which was pulled down the margin this year? And when we have a better operating leverage that also will improve the EBITDA margin, Devvrat. Devvrat, are you there?

Devvrat Mohta — Capital International Inc. — Analyst

Yes, I’m there. I lost you for a second though.

V V Ravi Kumar — Executive Director & Chief Financial Officer

Okay.

Satyanarayana Chava — Founder & Chief Executive Officer

Okay. Yeah.

Operator

Sir, do you have any further questions, Mr. Mohta?

Devvrat Mohta — Capital International Inc. — Analyst

No. That’s it for me. That’s it.

Operator

Thank you. We have next question from the line of Harith Ahamed with Avendus Spark. Please go ahead.

Harith Ahamed — Avendus Spark — Analyst

Hi, good evening, sir. Thanks for the opportunity. You mentioned in your presentation that you’ve been selected as a partner supplier in the global fund tender. So what exactly does it mean being a panel supplier?

Satyanarayana Chava — Founder & Chief Executive Officer

See, they allocate majority of their procurement — percentage of their procurement. So we know how much percentage we are getting global procurement for ’23, ’24 and ’25. So this panel supplier will have issued quantity from global fund.

Harith Ahamed — Avendus Spark — Analyst

Okay. And then would you be able to share the percentage allocation?

Satyanarayana Chava — Founder & Chief Executive Officer

No, no. We can’t share those numbers.

Harith Ahamed — Avendus Spark — Analyst

Okay. Okay. So last quarter, you had — after revising your guidance — revenue guidance for FY ’23, you had lowered that number to around INR6,500 crores. Do we still maintain that guidance for FY ’23 revenues? You mentioned double-digit growth.

Satyanarayana Chava — Founder & Chief Executive Officer

We’re working to match that.

Harith Ahamed — Avendus Spark — Analyst

Okay. And this NDA that you filed for this ODF technology-based product, is it a PEPFAR filing or is it a normal NDA for the U.S. market?

Satyanarayana Chava — Founder & Chief Executive Officer

We — I think eventually, we will sell that in developed markets as well. Yes. See, right now, this oral filling is not there in the guidelines for WHO. So they will put into the guidelines once we get an approval from FDA. Yeah.

Harith Ahamed — Avendus Spark — Analyst

Okay. Yeah. Last one from my side. This supply is under the purchase order. Can you share some directional sense versus 2Q? Was it maintained at the same level or do you see a very sharp decline in the supplies? And how we should think about the fourth quarter and FY ’24 for this particular contract?

Satyanarayana Chava — Founder & Chief Executive Officer

We can’t share details on that contracts.

Harith Ahamed — Avendus Spark — Analyst

Okay. Thank you, sir, for taking my questions.

Satyanarayana Chava — Founder & Chief Executive Officer

Thank you.

Operator

Thank you. We have next question from the line of Anandha Padmanabhan with PGIM India Mutual Fund. Please go ahead.

Anandha Padmanabhan — PGIM India Mutual Fund — Analyst

Thanks for answering my question. Am I audible?

Satyanarayana Chava — Founder & Chief Executive Officer

Yes you are.

Anandha Padmanabhan — PGIM India Mutual Fund — Analyst

Yeah. I couldn’t understand your response to the question of the earlier participants with regard to the guidance for the full year basis. So what is the current visibility that Laurus has based on whatever contracts that are in hand in terms of achieving that guidance of INR6,500 crores on a full year basis?

Satyanarayana Chava — Founder & Chief Executive Officer

We’re hopeful to meet that.

Anandha Padmanabhan — PGIM India Mutual Fund — Analyst

Okay. Okay. And with regard to the CDMO business, you said that even do that one contract for those supply integrated [Indecipherable] you have other contracts which you see good visibility. So how should we look at the current run rate? So if I look at the average CDMO run rate, it comes to around INR650-odd-crores. So should this be taken as the base business run rate for the CDMO business going forward for FY ’24 or one should work with a much lower number?

Satyanarayana Chava — Founder & Chief Executive Officer

CDMO business for anyone is a lumpy business. Yeah.

Anandha Padmanabhan — PGIM India Mutual Fund — Analyst

So I’m talking about on a full year basis. So if I just add.

Satyanarayana Chava — Founder & Chief Executive Officer

What we are looking at is are we getting new partners into CDMO? We have added two new [Indecipherable] in this current year. And a number of active [Indecipherable] has gone up from 50 to 60. And we are building dedicated capacity for CDMO. And we are building a dedicated R&D for CDMO. All those should clearly indicate that we have a very high focus on this segment. And all the investments happening in the company to support this sustained growth.

Anandha Padmanabhan — PGIM India Mutual Fund — Analyst

Okay. And final question with regard to the margins. So when you come to the next year, you would see that the contribution from ARV business would go up as your population — ARV formulation revenue picks up the CDMO while that could be lumpiness. But probably as a percentage of revenues will start coming down. Inherently, the business mix would be inching towards more lower margin business than what it is currently. So should we work with much lower margins for FY ’24 than what we have achieved in the first 9 months of FY ’23 or you are of opinion that the current margins of FY ’23 on a 9-month basis, whatever we have achieved is something that is still sustainable?

Satyanarayana Chava — Founder & Chief Executive Officer

I think, we’ll give some flavor during our whole year finance results. We can’t give you any guidance right now.

Anandha Padmanabhan — PGIM India Mutual Fund — Analyst

Okay, okay. But from a longer-term basis, beyond FY ’24, if all your projects workout, you’re confident that you’d be able to make [Speech Overlap].

Satyanarayana Chava — Founder & Chief Executive Officer

Yeah. That’s for sure. Yes.

Anandha Padmanabhan — PGIM India Mutual Fund — Analyst

Okay, okay. Thank you. I’ll get back in the queue.

Satyanarayana Chava — Founder & Chief Executive Officer

Thank you.

Operator

Thank you. We have next question from the line of Nitin Agarwal with DAM Capital.

Nitin Agarwal — DAM Capital — Analyst

Hi, sir. Thanks for taking my question. Sir, on the CDMO business, in your assessment, animal health and the crop protection business can comprise of what proportion of our CDMO business over the next three, four years? Only I presume all our CDMO businesses on human health only?

Satyanarayana Chava — Founder & Chief Executive Officer

Our CDMO business is also well diversified, Nitin. So we have a portfolio of steroids and hormones. That business is very stable right now. And our human health side is growing very well with NCE programs. And we also have CDMO — CMO for dietary supplement [Indecipherable] also. That is also growing very well. And animal health, we are seeing very small base right now. But the — once the facilities are confined, that business will grow. And crop production serious revenues will come only in FY ’26 actually. Yeah. FY ’25. Not before. We only facilities we are constructing the qualifying that [Indecipherable].

Nitin Agarwal — DAM Capital — Analyst

Sir, these two segments have the potential to be, what, one-third to half of your CDMO business or will continue to dominate by human health only.

Satyanarayana Chava — Founder & Chief Executive Officer

It’s too early to give a number in that direction, Nitin. Yeah.

Nitin Agarwal — DAM Capital — Analyst

Okay, sir. And sir, secondly, on the new developments that have happened on the ARV tenders, I mean, how do you look at your INR3,000 crores per annum guidance for ARV, Formulation and APIs. I mean are we in a position to exceed that or it’s going to be — you still see that’s going to be an optimal number where we’ll be operating the business at?

Satyanarayana Chava — Founder & Chief Executive Officer

We lowered that number to 2,500, both ARVs and Formulations. I think we are pretty on targets of that.

Nitin Agarwal — DAM Capital — Analyst

And so even on a going on basis, you don’t see increase happening to that much number, much beyond this?

Satyanarayana Chava — Founder & Chief Executive Officer

We — if growth comes, we are okay. Even if the growth doesn’t come, we are okay because we are not adding any capital allocation to the ARVs, and Formulations. We are putting more focus on high-margin, high-growth business rather than trying to run around the business, which stabilized. And there’s not much growth, even we are not anticipating.

Nitin Agarwal — DAM Capital — Analyst

Okay. And sir, when you talk about this ARV business guidance, do you take into account the new NDA that you filed over the last two quarters? I mean do have a potential to add meaningfully to these numbers or they will be part of this overall mix only?

Satyanarayana Chava — Founder & Chief Executive Officer

I think depending on how to put guidelines for the pediatric treatments, we are also developing a portfolio of fillings, not just ARVs and other therapy areas also. I think this platform is very exciting. We’re adding more products there.

Nitin Agarwal — DAM Capital — Analyst

Okay, sir. And then lastly, on the other API segment, I mean, you’ve had pretty strong growth in the last two quarters in particular. Any particular reasons? Any one-offs, any nonrecurring elements in this number or this is like a new base on which the business goes on from here?

Satyanarayana Chava — Founder & Chief Executive Officer

This is based on our product portfolio. Our diversification efforts are giving results. Yeah. Okay, sir, okay. Thank you, sir.

Operator

Thank you. We have next question from the line of Kunal Dhamesha with Macquarie. Please go ahead.

Kunal Dhamesha — Macquarie — Analyst

Well, thank you for taking my question. First one on the global fund allocation that we have got. So while we have some clarity, some of the volume allowance for the next few years. The pricing at which it would have happened? Would it remain stable going forward or there will be annual revision on that?

Satyanarayana Chava — Founder & Chief Executive Officer

Prices will be stable. Yes.

Kunal Dhamesha — Macquarie — Analyst

So whatever prices you would have bid would be the price that would continue to 2025 or would that be like next round of bidding, which will happen maybe one year down the line?

Satyanarayana Chava — Founder & Chief Executive Officer

The pricing already depressed. We don’t expect prices will go down forever on this.

Kunal Dhamesha — Macquarie — Analyst

Okay. Okay. And second question, given my belief is that API facilities are generally fungible, except for a very different chemistries, and given that the ARV, API seems to be going down probably in terms of pricing, and hence, the return ratios or whatever capacity that we employ would also be going down. So why then go for new capacities for CDMO business and why not just utilize — rationalize some of the ARV portfolio where we are not making that much return and utilize that kind of API capacity?

Satyanarayana Chava — Founder & Chief Executive Officer

Good question. But if you look at the size of the agro business book [Indecipherable] and partners, it’s not smart. It is significant. So we don’t want to divert the RV facilities to CDMO. CDMO, we’re building anywhere. Yes.

Kunal Dhamesha — Macquarie — Analyst

So then the other way to [Indecipherable], that’s my final question is whatever capital we would have invested in ARV business. Would have we got that back by now in terms of the payback, or let’s say, over the next few years that will happen in terms of [Indecipherable]?

Satyanarayana Chava — Founder & Chief Executive Officer

Just to give you where we are of capacity utilization of ARV presently, it’s pretty good actually.

Kunal Dhamesha — Macquarie — Analyst

Okay. Perfect. Thank you.

Satyanarayana Chava — Founder & Chief Executive Officer

Thank you.

Operator

Thank you. We have next question from the line of Jeevan Patwa with Sahasrar Capital. Please go ahead.

Jeevan Patwa — Sahasrar Capital — Analyst

Thanks a lot. So I think Dr. Satya, what’s happening is — basically, I just want to understand whether we’ll be able to maintain the gross margin at a 54% level and above for next year and onwards when we basically start the new FDA Formulation contracts, both ARV Non-ARV. Because if you are able to maintain 50% gross margin, I think we will be able to maintain on the EBITDA once we get the operating leverage. So the question would be will you be able to maintain the 54% kind of gross margin number?

Satyanarayana Chava — Founder & Chief Executive Officer

Currently, where the operational deleverage is happening. Once the operational deleverage is lower, then the margins profile will improve EBITDA margin. Yeah, EBITDA margins.

Jeevan Patwa — Sahasrar Capital — Analyst

Basically, I’ll just give you the overview where I’m coming from. So if I just look at the best quarter that we had Q4 FY ’21, we had similar gross margin of 54%. But that time, our employee cost was 6%, and our other expenses are 14%, and that’s how we actually reported 34% EBITDA margin. Now what is happening is our employee cost has gone up to almost 9.5%, and other expenses gone up to 18.5%. And that’s where our EBITDA margin is down. So once we have the operating leverage and we are able to utilize our capacity better. So if we are able to do run rate of, say, INR2,000 crores a quarter, I think we’ll get back to that EBITDA margin again. But we need to maintain the gross margin of 54%. So that’s why the question is whether we’ll be able to maintain a gross margin of 54% gross margin.

Satyanarayana Chava — Founder & Chief Executive Officer

I think it all depends on the product mix then the business division mix also, right? So it all depends.

Jeevan Patwa — Sahasrar Capital — Analyst

Right. So we are getting — so we are starting new orders next year, right, both ARV and Non-ARV Formulation orders. Will we be able to have this kind of gross margin?

V V Ravi Kumar — Executive Director & Chief Financial Officer

Jeevan, your point is well taken. The employee benefit expenses was — FY ’21 was 9%. For the current 9 months is 10% whereas other expenses was 14% and current is 18%. Yeah. So there’s — a lot of deleverage is there, and we appreciate your view. But if leverage starts kicking in, even the margins are steady, EBITDA percentage will go up.

Satyanarayana Chava — Founder & Chief Executive Officer

He’s talking about gross margin.

V V Ravi Kumar — Executive Director & Chief Financial Officer

Gross margin remains same, leverage kicks in, then EBITDA will go up.

Jeevan Patwa — Sahasrar Capital — Analyst

So that gross margin — so the question basically, we’ll be able to maintain the gross margin of 54% and above?

Satyanarayana Chava — Founder & Chief Executive Officer

Yes. Hopefully. Yeah.

Jeevan Patwa — Sahasrar Capital — Analyst

Okay. Thanks a lot, sir.

Satyanarayana Chava — Founder & Chief Executive Officer

Thanks.

Operator

Thank you. We have next question from the line of Hussain Kagzi with Ambit Asset Management. Please go ahead.

Hussain Kagzi — Ambit Asset Management — Analyst

Hi. Thank you for taking my question. So sir, my question is with regards to our Non-ARV Formulation division. If I see that we must have done roughly INR278 crores in the first 9 months. And I remember that most of our capacity, what we have, 10 million out of that, I think, around two-third is towards Non-ARV Formulation with further capacity or brownfield addition of 5 billion possible. So sir, I just wanted to get a sense of the division between how much of this revenue what we are doing currently is CMO-based and how much would it be on the basis of the ANDAs, which we have signed — this is because mainly, I wanted to understand the strategy going ahead that will we be focusing more on CMO side or probably go more after the ANDAs, which we are filing? So yeah, that’s the question. Yeah.

Satyanarayana Chava — Founder & Chief Executive Officer

So current capacity utilization is over 50%, but maybe I would say a number of the 10 billion is qualified. Currently, we are at 6 billion usage. Out of that 1.5 billion is CMO.

Hussain Kagzi — Ambit Asset Management — Analyst

Sorry, you said 1.5 billion is CMO in [Indecipherable].

Satyanarayana Chava — Founder & Chief Executive Officer

Yeah, 25% of capacity is used for CMO.

Hussain Kagzi — Ambit Asset Management — Analyst

Okay. Okay. And is this what — going ahead, will we focus more on the CMO part or is it more on the, say, launching our own products in the market? I mean how do we distinguish between that strategy going ahead?

Satyanarayana Chava — Founder & Chief Executive Officer

I want to clarify one point here when we are saying CMO of Formulations. We are not offering CMO for our Formulations unless we make the API. So for the Formulations, we also make API. Even the CMO.

Hussain Kagzi — Ambit Asset Management — Analyst

Okay, okay. Got it. All right. Thank you.

Satyanarayana Chava — Founder & Chief Executive Officer

Thanks.

Operator

Thank you. We have next question from the line of Palak Shah with Infina Finance. Please go ahead.

Palak Shah — Infina Finance — Analyst

Hi, sir. Thank you for taking my question. Just one from my end on your synthesis business. Given the number that we have reported, does it have any new contract that we have recently won in the last two quarters? So the contribution despite of one-off project going off, it’s still at INR650 crores.

Satyanarayana Chava — Founder & Chief Executive Officer

We have a healthy pipeline in our CDMO. Several active — several new active projects kicked in. And that looks very promising. We can give you that details.

Palak Shah — Infina Finance — Analyst

Okay. If I clarify a bit, would that mean that the annual — quarterly run rate of INR120 crores to INR150 crores that which total debt, actually jumps to INR350 crores to INR400 crores now or on above that?

Satyanarayana Chava — Founder & Chief Executive Officer

There are lot of active projects, I go back to my statement, a lot of active projects. We can’t give you a specific number right now.

Palak Shah — Infina Finance — Analyst

Got it, got it. Sir, thank you so much for this.

Satyanarayana Chava — Founder & Chief Executive Officer

Thank you.

Operator

Thank you. We have next question from the line of Sajal Kapoor, an Independent Investor. Please go ahead.

Sajal Kapoor — Individual Investor — Analyst

Yeah, thanks a lot. Question on sterile injectable. Last year, we commissioned our sterile injectable R&D labs, and we started working on a few priority projects. So as a broad long-term vision, where can we go in the sterile injectables in terms of commercial scale over the medium term of, say, three, four years? That’s one. And then a quick question on Laurus Bio. So I heard about this debottlenecking at R2 to enhance the downstream and resolve the mismatch between the upstream and the downstream, which is a common phenomenon in biotechnology. So what is the anticipated sort of time line for this completion of debottlenecking on — in the next sort of plant or land that we have acquired? And on R3, are we still on track to get to one million new capacity by FY ’25?

Satyanarayana Chava — Founder & Chief Executive Officer

I think I will answer the last question first. So in the Bio, debottlenecking at R2 will be completed in the next 6 to 9 months. Yes. Construction already started. When it comes to R3, we will do — instead of two phases, we’ll plan to do three phases to go to two million. Probably we’ll do less than one million in Phase 1, maybe around 650,000 liters. So three phases, three equal phases, 650,000 each to go to two million liters ended up one plus one. That’s the current plan in R3. We are in the design finalization phase right now with R3. Once the construction starts, we are expecting to take between 18 and 24 months to go commercial.

Sajal Kapoor — Individual Investor — Analyst

Sure. And on the sterile injectable, if you could just shed some color around the medium term.

Satyanarayana Chava — Founder & Chief Executive Officer

We started several projects in R&D. And we are yet to start the compensation of commercial facility in for sterile products. We have taken land, but construction not started it.

Sajal Kapoor — Individual Investor — Analyst

And in terms of the commercial scale, I mean, three, four, five years out, I mean, do we have sort of a rough sketch in terms of how big we want to be in this area over the medium term?

Satyanarayana Chava — Founder & Chief Executive Officer

We have a plan in place.

Sajal Kapoor — Individual Investor — Analyst

Right. That’s very helpful.

Satyanarayana Chava — Founder & Chief Executive Officer

Yes. We will give more details when we complete R&D stability and then ready to go for commercialization.

Sajal Kapoor — Individual Investor — Analyst

Yeah, of course. And we have always followed that approach, R&D first and commercial manufacturing later. Really happy to have all those responses, Dr. Satya. Wish the entire team very best.

Satyanarayana Chava — Founder & Chief Executive Officer

Thank you.

Operator

Thank you. Ladies and gentlemen, due to time constraint, that was the last question. I’d now like to hand the conference back over to the management for closing comments. Over to you, sir.

Satyanarayana Chava — Founder & Chief Executive Officer

Thank you, Monish, for organizing this call, and thank you, the participants, investors for your very active participation and very insightful questions. Thank you.

Monish Shah — Antique Stock Broking Limited — Analyst

Thank you.

Operator

[Operator Closing Remarks]