Q1 2027 Neuland Laboratories Ltd Earnings Call

August 5, 2026

Speaker #1: Ladies and gentlemen, good day, and welcome to Neuland Laboratories Limited Q1 and FY27 earnings conference call. As a reminder, all participants' lines will be on listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Operator 3: Ladies and gentlemen, good day and welcome to Neuland Laboratories Limited Q1 and FY27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Rujun Jian from E&Y. Thank you. Over to you, ma'am.

Operator: Ladies and gentlemen, good day and welcome to Neuland Laboratories Limited Q1 and FY27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Rujun Jian from E&Y. Thank you. Over to you, ma'am.

Speaker #1: Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note recorded. I now end the conference over to Ms. Renjun Chen from ENY. ma'am.

Speaker #1: Thank you, and over to you,

Speaker #2: Neuland Laboratories Limited. To take us through the results and to...

Rujun Jian: Neuland Laboratories Limited. To take us through the results and to

Runjhun Jain: Neuland Laboratories Limited. To take us through the results and to

Speaker #1: Renjun, please, please. Renjun, I'm sorry to interrupt you. Please start from the beginning. Thank you. Please start again, ma'am.

Operator 3: Rujun, please. Rujun, I'm sorry to interrupt you. Please start from the beginning. Thank you.

Operator: Rujun, please. Rujun, I'm sorry to interrupt you. Please start from the beginning. Thank you.

Rujun Jian: Thank you very much.

Runjhun Jain: Thank you very much.

Operator 3: Please start again, ma'am.

Operator: Please start again, ma'am.

Rujun Jian: Thank you. Good evening, everyone. We welcome you to the Q1 FY27 earnings conference call of Neuland Laboratories Limited. To take us through the results and to answer your questions, we have with us the top management, represented by Mr. Saharsh Davuluri, CEO and Managing Director; Mr. Abhijit Majumdar, CFO; and Mr. Satish Madikonda, Head of Corporate Planning and Strategy. We will start the call with a brief overview of the financials by Mr. Abhijit Majumdar, and then Saharsh will give you the broad highlights of the business trends and what he's seeing in the market. After that, we will open the call for Q&A session. As usual, the standard safe harbor clause applies as we start the call. With that said, I now hand over the floor to Mr. Abhijit. Over to you, sir.

Runjhun Jain: Thank you. Good evening, everyone. We welcome you to the Q1 FY27 earnings conference call of Neuland Laboratories Limited. To take us through the results and to answer your questions, we have with us the top management, represented by Mr. Saharsh Davuluri, CEO and Managing Director; Mr. Abhijit Majumdar, CFO; and Mr. Satish Madikonda, Head of Corporate Planning and Strategy.

Speaker #2: Corporate Planning and Strategy. We will start the call with a brief overview of the financials by Mr. Abhijit Majumdar, and then Sahish will give you the broad highlights of the business trend and what he is seeing in the market.

Runjhun Jain: We will start the call with a brief overview of the financials by Mr. Abhijit Majumdar, and then Saharsh will give you the broad highlights of the business trends and what he's seeing in the market. After that, we will open the call for Q&A session. As usual, the standard safe harbor clause applies as we start the call. With that said, I now hand over the floor to Mr. Abhijit. Over to you, sir.

Speaker #2: Post that, we will open the call for Q&A session. As and Mr. Sashiv Medikonda, Head of usual, the standard safe harbor clause applies, as we start the call.

Speaker #2: With that said, I now hand over the floor to Mr. Abhijit. Over to you, sir.

Speaker #3: Okay, thank you very much, Renjun, and good evening. A warm welcome to everyone joining our call. I will begin by taking you through the financial performance for the first quarter of FY27, followed by a brief update on working capital, capital expenditure, and a few observations on the operating environment before handing over the call to Sahish.

Abhijit Majumdar: Thank you very much, Rujun, and good evening and warm welcome to everyone joining our call. I will begin by taking you through the financial performance for Q1 FY27, followed by a brief update on working capital expenditure, and a few observations of the operating environment before handing over the call to Saharsh. The financial performance for Q1 FY27 is as follows. The total income for the quarter was INR 650.1 crores as compared to INR 300.6 crores in the corresponding quarter of the previous year, representing a growth of 116.3%. The commercial CMS projects contributed a majority share of the revenue and were the primary drivers of growth during the quarter. The quarter also witnessed healthy execution across our project portfolio and customer programs.

Speaker #3: The financial performance for Q1 FY27 is as follows: the total income for the quarter was ₹650.1 crore, as compared to ₹300.6 crore in the corresponding quarter of the previous year.

Abhijit Majumdar: The total income for the quarter was INR 650.1 crores as compared to INR 300.6 crores in the corresponding quarter of the previous year, representing a growth of 116.3%. The commercial CMS projects contributed a majority share of the revenue and were the primary drivers of growth during the quarter. The quarter also witnessed healthy execution across our project portfolio and customer programs.

Speaker #3: Representing a growth of 116.3%. The commercial CMS projects contributed a majority share of the revenue, and were the primary drivers of growth during the quarter.

Speaker #3: The quarter also witnessed healthy execution across our project portfolio and customer programs. Even though the quarterly revenue performance was broadly in line with our expectations, I'd like to reiterate our long-standing view regarding the inherent uneven nature of our business and the need to assess performance over a longer period.

Abhijit Majumdar: Even though the quarterly revenue performance was broadly in line with our expectations, I'd like to reiterate our longstanding view regarding the inherent uneven nature of our business and the need to assess performance over a longer period rather than through a single quarter. EBITDA for the quarter stood at INR 231.1 crores with an EBITDA margin of 35.5%. The higher revenue base, operating leverage, and the favorable customer mix contributed to the profitability profile during the quarter. The gross margin for the quarter was 61.2% as compared to 55.2% in Q1 FY26. Again, a function of our business mix during the quarter. This gross margin as always includes manufacturing expenses and other costs directly attributable to the product.

Speaker #3: Rather than through a single quarter. EBITDA for the quarter stood at $231.1 crores, with an EBITDA margin of 35.5%. The higher revenue base operating leverage and the favorable customer mix contributed to the profitability profile during the quarter.

Abhijit Majumdar: The higher revenue base, operating leverage, and the favorable customer mix contributed to the profitability profile during the quarter. The gross margin for the quarter was 61.2% as compared to 55.2% in Q1 FY26. Again, a function of our business mix during the quarter. This gross margin as always includes manufacturing expenses and other costs directly attributable to the product.

Speaker #3: The gross margin for the quarter was $61.2%, as $55.3% in Q1 FY26, again a function of our business mix during the quarter. This gross margin, as always, includes manufacturing expenses and other costs directly attributed to the product.

Speaker #3: Profit after tax for the quarter stood at ₹147.4 crore, as compared to ₹13.7 crore in Q1 FY26. Earnings per share for the quarter stood at ₹114.9 per share.

Abhijit Majumdar: Profit after tax for the quarter stood at INR 147.4 crores as compared to INR 13.7 crores in Q1 FY26. Earnings per share for the quarter stood at INR 114.9 per share. One of the key highlights of the quarter was the improvement in working capital efficiency. Working capital days improved from 137 days at the end of FY26 to 84 days in FY27. Optimal utilization of cash remains the key priority for us, and we continue to focus on inventory optimization, disciplined execution, and further strengthening cash conversion across the business. The improvements witnessed during the quarter reinforces our focus on balancing growth with prudent management of working capital. As part of our investment, there was a cash outflow of INR 121.6 crores towards capital expenditures during Q1 FY27, which was primarily driven by new R&D and prepay facilities.

Speaker #3: One of the key highlights of the quarter was the improvement in working capital efficiency. The working capital base improved from $137 million at the end of FY26 to $84 million in FY27.

Speaker #3: Optimal utilization of cash remains a key priority for us, and we continue to focus on inventory optimization. Disciplined execution and further strengthening cash conversion across the business.

Abhijit Majumdar: Optimal utilization of cash remains the key priority for us, and we continue to focus on inventory optimization, disciplined execution, and further strengthening cash conversion across the business. The improvements witnessed during the quarter reinforces our focus on balancing growth with prudent management of working capital. As part of our investment, there was a cash outflow of INR 121.6 crores towards capital expenditures during Q1 FY27, which was primarily driven by new R&D and prepay facilities.

Speaker #3: The improvements witnessed during the quarter reinforces our focus on balancing growth with prudent management of working capital. As part of our investment, there was a cash outflow of $121.6 crores towards capital expenditures during Q1 FY27, which was primarily driven by new R&D and peptide facilities.

Speaker #3: During the quarter, we also approved capital investments of approximately $203 crores of which $196 crores was earmarked for strategy growth initiatives largely related to capacity expansion at our unit one.

Abhijit Majumdar: During the quarter, we also approved capital investments of approximately INR 203 crores, of which INR 190 crores is earmarked for strategic growth initiatives, largely related to capacity expansion at our unit one. Against our total approved CapEx of INR 1,460 crores over the last 13 quarters, we have spent INR 870 crores to date, with the balance committed towards projects under implementation. We continue to maintain a disciplined approach towards capital allocation while ensuring adequate investments towards building future capabilities. During the quarter, we continued to closely monitor the evolving geopolitical environment and broader global trade developments. While we have not experienced any material impact on our operations, supply chain continuity, or customer commitments thus far, we remain vigilant and continue to monitor developments closely. Our focus remains on ensuring business continuity, maintaining customer service levels, and managing risks in a proactive manner.

Speaker #3: Against a total approved capex of $1460,460 crores over the last 13 quarters, we have spent $870 crores today, with the balance committed towards projects under implementation.

Speaker #3: We continue to maintain a disciplined approach towards capital allocation, while ensuring adequate investments towards building future capability. During the quarter, we continue to closely monitor the evolving geopolitical environment and broader global trade developments.

Abhijit Majumdar: During the quarter, we continued to closely monitor the evolving geopolitical environment and broader global trade developments. While we have not experienced any material impact on our operations, supply chain continuity, or customer commitments thus far, we remain vigilant and continue to monitor developments closely. Our focus remains on ensuring business continuity, maintaining customer service levels, and managing risks in a proactive manner.

Speaker #3: While we have not experienced any material impact on our operations, supply chains, or continuity of customer commitments thus far, we remain vigilant and continue to monitor developments closely.

Speaker #3: Our focus remains on ensuring business continuity, maintaining customer service levels, and managing risks in a proactive manner. To summarize, the financials for FY27 were again broadly in line with our expectations.

Abhijit Majumdar: To summarize, the financial FY27 growth again was broadly in line with our expectations. The performance reflects disciplined execution, operating leverage, and a favorable mix during the quarter. We continue to believe FY27 will be a year of growth for the company and remain focused on prudent financial management, operational excellence, and creating long-term value for our stakeholders. As always, our presentation has been shared with the press unit and contains more details on the quarter. Before I conclude and hand over to Saharsh, I want to make a clarification regarding a question posed during the Q4 call in terms of manipulation of the transcript. On the issue of manipulation, our earnings calls are recorded, and we publish the full unedited audio on our website. That audio is a complete record of everything on the call.

Speaker #3: The performance reflects disciplined execution, operating leverage, and a favorable mix during the quarter. We continue to believe FY27 will be a year of growth for the company and remain focused on prudent financial management, operational excellence, and creating long-term value for our stakeholders.

Speaker #3: As always, our presentation has been shared with the press release and contains more details on the quarter. Before I conclude and hand over to Sahish, I want to make a clarification regarding a question posed during our third quarter four call in terms of manipulation of the transcript.

Abhijit Majumdar: As always, our presentation has been shared with the press unit and contains more details on the quarter. Before I conclude and hand over to Saharsh, I want to make a clarification regarding a question posed during the Q4 call in terms of manipulation of the transcript. On the issue of manipulation, our earnings calls are recorded, and we publish the full unedited audio on our website. That audio is a complete record of everything on the call.

Speaker #3: On the issue of manipulation, our earnings was recorded and we published the full unedited audio on our website. That audio is a complete record of everything on the call.

Speaker #3: The written transcript is prepared by an agency which conducts the call and is slightly edited from a readability perspective. However, in this case, our team missed out on editing a minor mistake.

Abhijit Majumdar: The written transcript is prepared by an agency which conducts the call and is slightly edited from a readability perspective, or in this case, our team missed out on editing a minor mistake. As we went back and checked the uploaded version and the version received from the agency, we found that there has been no change in this section. With that, I would like to hand over the call to Saharsh for his remarks. Over to you.

Speaker #3: As we went back and checked the uploaded version and the version received from the agency, we found that there has been no change in the section.

Speaker #3: With that, I would like to hand over the call to Sahish for his remarks. Over to you.

Saharsh Davuluri: Thank you, Abhijit. Good evening, everyone, and thank you for joining us today. As Abhijit discussed, Q1 FY27 was broadly in line with our expectations and represents a good start to the year. I will use my remarks to provide some perspective on the business performance during the quarter, the opportunities we are seeing across our business, and how we are positioning Neuland for the future. Starting with this quarter, we were encouraged by the performance across both our GDS and CMS businesses. Within GDS, the quarter was supported by a number of products that performed well and contributed meaningfully to the business. Products such as ezetimibe, mirtazapine, escitalopram, and erythromycin were among the key contributors during the quarter and reflect the strength of the portfolio that we have been building over time. More importantly, the underlying strategic direction of the GDS business continues to evolve.

Davuluri Saharsh: Thank you, Abhijit. Good evening, everyone, and thank you for joining us today. As Abhijit discussed, Q1 FY27 was broadly in line with our expectations and represents a good start to the year. I will use my remarks to provide some perspective on the business performance during the quarter, the opportunities we are seeing across our business, and how we are positioning Neuland for the future. Starting with this quarter, we were encouraged by the performance across both our GDS and CMS businesses.

Speaker #2: Thank you, Avijit. Good evening, everyone, and thank you for joining us today. As Avijit discussed, Q1 FY27 was broadly in line with our expectations and represents a good start to the year.

Speaker #2: I will use my remarks to provide some perspective on the business performance during the quarter, the opportunities we are seeing across our business, and how we are positioning Neuland for the future.

Speaker #2: Starting with this quarter, we were encouraged by the performance across both our GDS and CMS businesses. Within GDS, the quarter was supported by a number of products that performed well and contributed meaningfully to the business.

Davuluri Saharsh: Within GDS, the quarter was supported by a number of products that performed well and contributed meaningfully to the business. Products such as ezetimibe, mirtazapine, escitalopram, and erythromycin were among the key contributors during the quarter and reflect the strength of the portfolio that we have been building over time. More importantly, the underlying strategic direction of the GDS business continues to evolve.

Speaker #2: Products such as Ezetimibe, Mirtazapine, Escitalopram, and Eliquitrazole were among the key contributors during the quarter and reflect the strength of the portfolio that we have been building over time.

Speaker #2: More importantly, the underlying strategic direction of the GDS business continues to evolve. We remain focused on expanding our portfolio of differentiated products even as we also increase our presence in key markets like Brazil, Japan, South Korea, and Turkey.

Saharsh Davuluri: We remain focused on expanding our portfolio of differentiated products, even as we also increase our presence in key markets like Brazil, Japan, South Korea, and Turkey. We have also initiated pursuing lifecycle management opportunities with innovators, where our process chemistry, development experience, and manufacturing capabilities can create long-term value. Coming to the CMS business this quarter, we have most of the revenues coming from our top commercial products. Having said that, the order book from pipeline molecules is quite encouraging, and we will see that panning out over the course of the next few quarters. We continue to see healthy engagement across both the development and commercial programs. The depth of customer conversations today is significantly stronger than it was a few years ago, and we are increasingly engaging on broader capability-led discussions rather than individual projects alone.

Davuluri Saharsh: We remain focused on expanding our portfolio of differentiated products, even as we also increase our presence in key markets like Brazil, Japan, South Korea, and Turkey. We have also initiated pursuing lifecycle management opportunities with innovators, where our process chemistry, development experience, and manufacturing capabilities can create long-term value. Coming to the CMS business this quarter, we have most of the revenues coming from our top commercial products.

Speaker #2: We have also initiated pursuing lifecycle management opportunities with innovators, where our process chemistry development experience and manufacturing capabilities can create long-term value. Coming to the CMS business this quarter, we have most of the revenues coming from our top commercial products.

Speaker #2: Having said that, we order book from pipeline molecules is quite encouraging and we will see that panning out over the course of the next few quarters.

Davuluri Saharsh: Having said that, the order book from pipeline molecules is quite encouraging, and we will see that panning out over the course of the next few quarters. We continue to see healthy engagement across both the development and commercial programs. The depth of customer conversations today is significantly stronger than it was a few years ago, and we are increasingly engaging on broader capability-led discussions rather than individual projects alone.

Speaker #2: We continue to see healthy engagement across both the development and commercial programs. The depth of customer conversations today is significantly stronger than it was a few years ago, and we are increasingly engaging in broader, capability-led discussions rather than individual projects alone.

Speaker #2: While building relationships with large pharmaceutical companies is naturally a gradual process, we believe we are making meaningful progress. The investments we have made in capabilities, infrastructure, and talent combined with evolving geopolitical and macroeconomic dynamics that continue to drive supply chain diversification are creating opportunities for us to engage with customers in a much more strategic manner.

Saharsh Davuluri: While building relationships with large pharmaceutical companies is naturally a gradual process, we believe we are making meaningful progress. The investments we have made in capabilities, infrastructure, and talent, combined with evolving geopolitically and macroeconomic dynamics that continue to drive supply chain diversification, are creating opportunities for us to engage with customers in a much more strategic manner. One of the themes we discussed extensively as we brainstormed regarding the CMS business was the increasing importance of becoming a long-term strategic partner to customers rather than being viewed as a provider for individual projects. We continue to see customer interest across existing and emerging areas, and the nature of discussions is increasingly centered around capabilities, supply assurance, technical expertise, and long-term collaboration. We believe this positions us well in the industry as we continue to evolve.

Davuluri Saharsh: While building relationships with large pharmaceutical companies is naturally a gradual process, we believe we are making meaningful progress. The investments we have made in capabilities, infrastructure, and talent, combined with evolving geopolitically and macroeconomic dynamics that continue to drive supply chain diversification, are creating opportunities for us to engage with customers in a much more strategic manner.

Speaker #2: One of the themes we discussed extensively as we brainstormed regarding the CMS business was of increasing importance of becoming a long-term strategic partner to customers rather than being viewed as a provider for individual projects.

Davuluri Saharsh: One of the themes we discussed extensively as we brainstormed regarding the CMS business was the increasing importance of becoming a long-term strategic partner to customers rather than being viewed as a provider for individual projects. We continue to see customer interest across existing and emerging areas, and the nature of discussions is increasingly centered around capabilities, supply assurance, technical expertise, and long-term collaboration. We believe this positions us well in the industry as we continue to evolve.

Speaker #2: We continue to see customer interest across existing and emerging areas, and the nature of discussions is increasingly centered around capabilities, supply assurance, technical expertise, and long-term collaboration.

Speaker #2: We believe this positions us well in the industry as we continue to evolve. A second theme that I would like to highlight is the increased velocity of investments across Neuland.

Saharsh Davuluri: A second theme that I would like to highlight is the increased velocity of investments across Neuland. Over the last three years, and continuing into FY27, we have been investing at a pace and scale that is meaningfully higher than in the past. Whether it is manufacturing infrastructure, R&D capabilities, peptides, sterile APIs, or future capacity expansion, these investments are being made with a long-term perspective. Our objective is to ensure that Neuland remains relevant and competitive as customer requirements evolve and market opportunities emerge. Peptides are perhaps the clearest example of this philosophy. We had built peptide process development capabilities for over 15 years, and around two years ago decided to invest in commercial-scale manufacturing of peptides. At that point, the investment was based on our conviction regarding long-term attractiveness of the segment. Today, we are beginning to see external validation of that thesis.

Davuluri Saharsh: A second theme that I would like to highlight is the increased velocity of investments across Neuland. Over the last three years, and continuing into FY27, we have been investing at a pace and scale that is meaningfully higher than in the past. Whether it is manufacturing infrastructure, R&D capabilities, peptides, sterile APIs, or future capacity expansion, these investments are being made with a long-term perspective.

Speaker #2: Over the last three years, and continuing into FY27, we have been investing at a pace and scale that is meaningfully higher than in the past.

Speaker #2: Whether it is manufacturing infrastructure, R&D capabilities, peptides, sterile APIs, or future capacity expansion, these investments are being made with a long-term perspective. Our objective is to ensure that Neuland remains relevant and competitive as customer requirements evolve and market opportunities emerge.

Davuluri Saharsh: Our objective is to ensure that Neuland remains relevant and competitive as customer requirements evolve and market opportunities emerge. Peptides are perhaps the clearest example of this philosophy. We had built peptide process development capabilities for over 15 years, and around two years ago decided to invest in commercial-scale manufacturing of peptides. At that point, the investment was based on our conviction regarding long-term attractiveness of the segment. Today, we are beginning to see external validation of that thesis.

Speaker #2: Peptides are perhaps the clearest example of this philosophy. We had built peptide process development capabilities for over 15 years, and around two years ago, decided to invest in commercial-scale manufacturing of peptides.

Speaker #2: At that point, the investment was based on our conviction regarding long-term attractiveness of the segment. Today, we are beginning to see external validation of that thesis.

Speaker #2: Even before the peptide manufacturing asset is fully ramped up, customer interest continues to grow, discussions have expanded and we have started seeing encouraging conversion of opportunities that provide greater visibility around module one utilization.

Saharsh Davuluri: Even before the peptide manufacturing asset is fully ramped up, customer interest continues to grow, discussions have expanded, and we have started seeing encouraging conversion of opportunities that provide greater visibility around Module 1 utilization. These developments reinforce our confidence that investments we have made are aligned with where the market is headed. At the same time, these opportunities also place a greater emphasis on execution. Our focus is now on ensuring that we deliver consistently, build customer confidence, and establish the foundation for long-term participation in this segment. Another important development regarding which you would have seen our press release is our strategic collaboration with Gland Pharma. We believe this partnership creates a differentiated platform in sterile APIs by combining complementary strengths of both organizations.

Davuluri Saharsh: Even before the peptide manufacturing asset is fully ramped up, customer interest continues to grow, discussions have expanded, and we have started seeing encouraging conversion of opportunities that provide greater visibility around Module 1 utilization. These developments reinforce our confidence that investments we have made are aligned with where the market is headed. At the same time, these opportunities also place a greater emphasis on execution.

Speaker #2: These developments reinforce our confidence that the investments we have made are aligned with where the market is headed. At the same time, these opportunities also place a greater emphasis on execution.

Speaker #2: Our focus is now on ensuring that we deliver consistently built customer confidence and establish the foundation for long-term participation in this segment. Another important development regarding which you would have seen our press release is our strategic collaboration with Gland Pharma.

Davuluri Saharsh: Our focus is now on ensuring that we deliver consistently, build customer confidence, and establish the foundation for long-term participation in this segment. Another important development regarding which you would have seen our press release is our strategic collaboration with Gland Pharma. We believe this partnership creates a differentiated platform in sterile APIs by combining complementary strengths of both organizations.

Speaker #2: We believe this partnership creates differentiated platform in sterile APIs by combining complementary strengths of both organizations. Beyond the immediate opportunity, it also demonstrates our commitment to the specialty GDS business and our strategy of building niche capabilities in areas where technical complexity creates meaningful differentiation.

Saharsh Davuluri: Beyond the immediate opportunity, it also demonstrates our commitment to the specialty GDS business and our strategy of building niche capabilities in areas where technical complexity creates meaningful differentiation. We believe these types of capabilities will increasingly define competitive advantage in our industry over the coming years. At the same time, it is important to recognize that our business operates in an environment that continues to be dynamic. Geopolitical developments, regulatory timelines, customer ordering patterns, and broader macroeconomic conditions can influence the timing and shape of growth from quarter to quarter. As we consistently stated in the past, variability remains an inherent characteristic of our business, and quarterly performance should be viewed in that context. Having said that, when we look beyond individual quarters, our outlook as we consider FY27 and FY28 periods remains in line with our long-term ambition.

Davuluri Saharsh: Beyond the immediate opportunity, it also demonstrates our commitment to the specialty GDS business and our strategy of building niche capabilities in areas where technical complexity creates meaningful differentiation. We believe these types of capabilities will increasingly define competitive advantage in our industry over the coming years. At the same time, it is important to recognize that our business operates in an environment that continues to be dynamic.

Speaker #2: We believe these types of capabilities will increasingly define competitive advantage in our industry over the coming years. At the same time, it is important to recognize that our business operates in an environment that continues to be dynamic.

Speaker #2: Geopolitical developments, regulatory timelines, customer ordering patterns, and broader economic macroeconomic conditions can influence the timing and shape of growth from quarter to quarter. As we consistently stated in the past, variability remains an inherent characteristic of our business, and quarterly performance should be viewed in that context.

Davuluri Saharsh: Geopolitical developments, regulatory timelines, customer ordering patterns, and broader macroeconomic conditions can influence the timing and shape of growth from quarter to quarter. As we consistently stated in the past, variability remains an inherent characteristic of our business, and quarterly performance should be viewed in that context. Having said that, when we look beyond individual quarters, our outlook as we consider FY27 and FY28 periods remains in line with our long-term ambition.

Speaker #2: Having said that, when we look beyond individual quarters, our outlooks as we consider FY27 and FY28 period remains in line with our long-term ambitions.

Speaker #2: The customer interest we are seeing, the opportunities under discussion, the capabilities we are bringing online and the investments we have made across the businesses all reinforce our confidence in the medium-term trajectory of the company.

Saharsh Davuluri: The customer interest we are seeing, the opportunities under discussion, the capabilities we are bringing online, and the investments we have made across the businesses all reinforce our confidence in the medium-term trajectory of the company. Our focus remains on execution, customer service, operational excellence, and creating sustainable long-term value for all stakeholders. To conclude, we believe Neuland is entering an important phase of its evolution. Many of the investments we made over the last several years are beginning to create new opportunities across the business. While there will inevitably be periods of unevenness along the way, we remain confident in the direction of the company, the opportunities ahead of us, and our ability to create long-term value. With that, we would be happy to take your questions. Thank you.

Davuluri Saharsh: The customer interest we are seeing, the opportunities under discussion, the capabilities we are bringing online, and the investments we have made across the businesses all reinforce our confidence in the medium-term trajectory of the company. Our focus remains on execution, customer service, operational excellence, and creating sustainable long-term value for all stakeholders. To conclude, we believe Neuland is entering an important phase of its evolution.

Speaker #2: Our focus remains on execution, customer service, operational excellence, and creating sustainable long-term value for all stakeholders. To conclude, we believe Neuland is entering an important phase of its evolution.

Speaker #2: Many of the investments we made over the last several years are beginning to create new opportunities across the business. While there will inevitably be periods of unevenness along the way, we remain confident in the direction of the company.

Davuluri Saharsh: Many of the investments we made over the last several years are beginning to create new opportunities across the business. While there will inevitably be periods of unevenness along the way, we remain confident in the direction of the company, the opportunities ahead of us, and our ability to create long-term value. With that, we would be happy to take your questions. Thank you.

Speaker #2: The opportunities ahead of us and our ability to create long-term value. With that, we would be happy to take your questions. Thank you.

Speaker #1: Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question, you may press star and one on the touchstone telephone.

Operator 3: Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question, you may press star and one on their touchtone telephone. Participants connected through webcast may post their text question. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Amey Chalke with JM Financial. Please go ahead.

Operator: Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question, you may press star and one on their touchtone telephone. Participants connected through webcast may post their text question. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Amey Chalke with JM Financial. Please go ahead.

Speaker #1: Participants connected through webcast may post their text question. If you wish to remove yourself from the question queue, you may press star and two.

Speaker #1: Participants are requested to use handshakes while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question come from the line of Amit Chalke with JM Financial.

Speaker #1: Please go ahead.

Speaker #3: Yeah. Thank you for taking my question, and congrats to the management on the good numbers. My first question is on the quarterly and yearly performance.

Amey Chalke: Yeah. Thank you for taking my question, and congrats to the management on good numbers. First question I have on the quarterly and yearly performance. I understand the CDMO business typically is volatile on a quarterly basis. But we have strong start for the year, and generally we do have good visibility on six months order book as a CDMO company. What kind of growth should we expect for full year of FY27? Also, on the other side, should we be wary of any risk from the destocking perspective for any of our commercial contracts?

Speaker #3: I understand the CDMO business typically is volatile on the quarterly basis. But we have strong start for the year, and generally we do have good visibility on six months order book as a CDMO company.

Speaker #3: So, what kind of growth should we expect for the full year of FY27? Also, on the other side, should we be wary of any risk from the de-stocking perspective for any of our commercial contracts?

Speaker #1: Thanks so much, Adam.

Speaker #2: Yeah, thanks for the question, Amit. With regards to the visibility for the year, you're absolutely right. The CMS business, especially, has fairly deep visibility in terms of the order book.

Saharsh Davuluri: Yeah, thanks for the question, Amey. With regards to the visibility of the year, you are absolutely right. The CDMO business especially has a fairly deep visibility in terms of order book. I think for us, we have always been reluctant to fully reveal what the order book is or what the exact year's performance is expected to be. But I would just go back to the comment I had made in the opening remarks. I think we have always aspired to grow at about 20%, and we expect that 2027 or 2028 also, we expect to grow that way. I think beyond that, talking specifically about 2027, I think it might again kind of come across like we are guiding towards a particular growth rate. But we have also cautioned in the past that we expect a particular year to be a flat year.

Davuluri Saharsh: Yeah, thanks for the question, Amey. With regards to the visibility of the year, you are absolutely right. The CDMO business especially has a fairly deep visibility in terms of order book. I think for us, we have always been reluctant to fully reveal what the order book is or what the exact year's performance is expected to be. But I would just go back to the comment I had made in the opening remarks.

Speaker #2: I think for us, we've always been reluctant to fully reveal what the order book is or what the exact year's performance is expected to be.

Speaker #2: But I would just go back to the comment I made in the opening remarks. I think we've always aspired to grow at about 20%, and we expect that in '27 and '28, we also expect to grow that way.

Davuluri Saharsh: I think we have always aspired to grow at about 20%, and we expect that 2027 or 2028 also, we expect to grow that way. I think beyond that, talking specifically about 2027, I think it might again kind of come across like we are guiding towards a particular growth rate. But we have also cautioned in the past that we expect a particular year to be a flat year.

Speaker #2: I think beyond that, talking specifically about '27, I think it might again kind of come across like we are guiding towards a particular growth rate.

Speaker #2: But we have also cautioned in the past that we expect a particular year to be a flat year. We had indicated that FY25 would be a flat-ish year, and that's what it happened.

Saharsh Davuluri: Like we had indicated that FY25 would be a flattish year, and that is what had happened. We are not giving such indications right now. But at the same time, we would be cautious not to say, okay, it is going to grow at a certain percentage. So that is with regards to question one. What was the question two? It was about any risk in terms of destocking maybe. Not really, Amey. I think because the order visibility is consistent with the commentary, I would say destocking or stocking is factored into that. We do not expect something to hit us abruptly. So those are conversations that might play out over beyond FY27, but for now, I think we do not see any surprises coming out of destocking.

Davuluri Saharsh: Like we had indicated that FY25 would be a flattish year, and that is what had happened. We are not giving such indications right now. But at the same time, we would be cautious not to say, okay, it is going to grow at a certain percentage. So that is with regards to question one. What was the question two? It was about any risk in terms of destocking maybe.

Speaker #2: We are not giving such indications right now. But at the same time, we would be cautious not to say, "Okay, it's going to grow at a certain percentage." So that's with regards to question one.

Speaker #2: What was the question two?

Speaker #3: Who would be risk in terms of de-stocking?

Speaker #2: Not really, Amit. I think because the order visibility is consistent with the commentary, I would say de-stocking or stocking is factored into that. We don't expect something to hit us abruptly.

Davuluri Saharsh: Not really, Amey. I think because the order visibility is consistent with the commentary, I would say destocking or stocking is factored into that. We do not expect something to hit us abruptly. So those are conversations that might play out over beyond FY27, but for now, I think we do not see any surprises coming out of destocking.

Speaker #2: So those are conversations that might play out over beyond FY27. But for now, I think we don't see any surprises coming out of de-stocking.

Speaker #3: Sure. That's helpful. Second question I have on the products where we had increased capacity last year. What is the current utilization there on the increased capacity?

Amey Chalke: Sure. That is helpful. Second question I have on the products where we had increased capacity last year, what is the current utilization there on the increased capacity, and is it fair to understand this block will be used throughout the year? Do you expect similar quantities to be produced every year from this block, or how will that work?

Speaker #3: And is it fair to understand this block will be used throughout the year? And do you expect similar quantities to be produced every year from this block, or how will that work?

Speaker #1: Thank you. The next question comes from the line of Shyam Srinivasan with Goldman Sachs. Please go ahead.

Operator 3: Thank you. Our next question comes from the line of Shyam Srinivasan with Goldman Sachs. Please go ahead.

Operator: Thank you. Our next question comes from the line of Shyam Srinivasan with Goldman Sachs. Please go ahead.

Speaker #4: Yeah. Good evening. Thank you for taking my question. This is the first one on your development revenues, and I remember you saying at least fiscal '27 could likely see better development revenues.

Shyam Srinivasan: Yeah. Good evening. Thank you for taking my question. Just the first one on your development revenues. I remember you saying at least fiscal 2027 could likely see better development revenues. I think you alluded to it in the opening remarks as well, that the pipeline on development is looking good. If you could highlight how that piece could likely pan out.

Speaker #4: And I think you alluded to it in the opening remarks as well that the pipeline on development is looking good. So if you could highlight how that piece could likely pan out.

Saharsh Davuluri: Can you share our screen?

Davuluri Saharsh: Can you share our screen?

Speaker #2: Enjoy that screen.

Shyam Srinivasan: Hi, this is Shyam. Am I audible?

Speaker #4: Hi, this is Shyam. Am I audible?

Speaker #1: Yes, sir, you are audible.

Operator 3: Yes, sir, you are audible.

Operator: Yes, sir, you are audible.

Shyam Srinivasan: Should I repeat my question because I completed my first question?

Speaker #4: Excellent. Repeat my question because I completed my first question.

Speaker #2: Yeah, sorry. I think, yeah, your first question, Shyam—sorry, we were having some trouble unmuting the line. It's about the development.

Saharsh Davuluri: Yeah. I think, yeah. Your first question, Shyam, sorry, we were having some trouble unmuting the line, is about the development.

Davuluri Saharsh: Yeah. I think, yeah. Your first question, Shyam, sorry, we were having some trouble unmuting the line, is about the development.

Speaker #4: That's right. Yeah.

Shyam Srinivasan: That's right, yeah.

Speaker #1: I'm sorry to interrupt management. You're unmute.

Operator 3: I'm sorry to interrupt, management. You're on mute.

Operator: I'm sorry to interrupt, management. You're on mute.

Speaker #2: Sorry, the line's getting muted. Is there a way you can unmute it in case it gets muted again?

Saharsh Davuluri: Sorry, the line's getting muted. Is there a way you can unmute it, in case it gets muted again?

Davuluri Saharsh: Sorry, the line's getting muted. Is there a way you can unmute it, in case it gets muted again?

Operator 3: Okay, sure. We'll try.

Operator: Okay, sure. We'll try.

Speaker #1: Okay, sir.

Speaker #2: Okay. So, Shyam, sorry, please go ahead and ask your question again one more time. We'll try.

Saharsh Davuluri: Okay. Shyam, sorry, please go ahead and ask your question again one more time.

Davuluri Saharsh: Okay. Shyam, sorry, please go ahead and ask your question again one more time.

Speaker #4: Yeah, yeah. So I was saying to Harsh, development revenues, I thought we had a better outlook than last year. Fiscal 26 on development revenues.

Shyam Srinivasan: I was saying, Saharsh, the development revenues, I thought we had a better outlook than last year, FY26 on development revenues, and I think you alluded to it in your opening remarks. Just wanted qualitative additional color on development revenues for this year.

Speaker #4: And I think you alluded to it in your opening remarks. So just wanted qualitative additional color on development revenues for this year.

Speaker #2: Yeah, definitely very a lot more exciting start to the year, Shyam. I think in FY27, we've seen at least two new projects come in.

Saharsh Davuluri: Yeah, definitely a lot more exciting start to the year, Shyam. I think in FY27, we've seen at least two new projects come in. I would not say these are commercial, these are fairly advanced in the clinic. I think I'm muted again. Are we muted again?

Davuluri Saharsh: Yeah, definitely a lot more exciting start to the year, Shyam. I think in FY27, we've seen at least two new projects come in. I would not say these are commercial, these are fairly advanced in the clinic. I think I'm muted again. Are we muted again?

Speaker #2: I would not say these are commercial, but these are fairly advanced. In the clinic, and I think you're muted again. Are we muted again?

Speaker #4: We can hear you, sir.

Amey Chalke: We can hear you.

Shyam Srinivasan: We can hear you.

Speaker #1: We can hear you.

Operator 3: We can hear you.

Operator: We can hear you.

Saharsh Davuluri: Okay. Yeah. We are seeing a couple of new projects come in, obviously we'll be careful in painting a picture around these projects because they're still under development, and you never know what could happen. That kind of visibility and the potential of these molecules, I think is very exciting for us. We will deliver on development quantities this year, but I think they definitely pave the way for larger volumes in the future. I think some of these projects are also peptide projects, which were not visualized a year ago. There is definitely a lot of enthusiasm and excitement in the system. It may not be very helpful, or it may be premature to try to quantify that revenue for this year.

Davuluri Saharsh: Okay. Yeah. We are seeing a couple of new projects come in, obviously we'll be careful in painting a picture around these projects because they're still under development, and you never know what could happen. That kind of visibility and the potential of these molecules, I think is very exciting for us.

Speaker #2: Yeah. So the so we have seen a couple of new projects come in. And obviously, we'll be careful in painting a picture around these projects because they're still under development and you never know what could happen.

Speaker #2: But that kind of visibility and the potential of these molecules I think is very exciting for us. And we will deliver on developmental quantities this year.

Davuluri Saharsh: We will deliver on development quantities this year, but I think they definitely pave the way for larger volumes in the future. I think some of these projects are also peptide projects, which were not visualized a year ago. There is definitely a lot of enthusiasm and excitement in the system. It may not be very helpful, or it may be premature to try to quantify that revenue for this year.

Speaker #2: But I think they definitely paved the way for larger volumes in the future. And I think some of these projects are also peptide projects, which were not visualized a year ago.

Speaker #2: So there is definitely a lot of enthusiasm and excitement in the system. It may not be very helpful or it may be premature to try to quantify that revenue.

Speaker #2: For this year.

Speaker #4: Helpful. Thank you. Just my second question is on the peptide. Since you talked about module one utilization or expansion of scope with some of the discussions you have had, can you add some more additional color?

Shyam Srinivasan: Helpful. Thank you. Just my second question is on the peptide. You talked about Module 1 utilization or expansion of scope with some of the discussions you have had. Can you add some more additional color? Is there potentially a commercial project that could likely come this year? Just some color around peptides and where are plants. I think the plant is now ready, right? Or one of the Module 1 is ready? Thank you.

Speaker #4: Is there a potentially a commercial project that could likely come this year? So just some color around peptides and where are planted? I think they're planted now already, right?

Speaker #4: Or, whenever the Module 1 is ready. Thank you.

Speaker #2: Yes. Yes, Shyam. So the plant itself is going to be commissioned next month. And then it will be ready for manufacturing qualification will be done by then.

Saharsh Davuluri: Yes, Shyam. The plant itself is going to be commissioned next month, it will be ready for manufacturing. Qualification will be done by then. We have multiple projects lined up.

Davuluri Saharsh: Yes, Shyam. The plant itself is going to be commissioned next month, it will be ready for manufacturing. Qualification will be done by then. We have multiple projects lined up.

Speaker #2: We have multiple projects lined up.

Tirumala Reddy: I just landed my first trade successfully.

[Analyst]: I just landed my first trade successfully.

Speaker #3: Hi, this is Leander. My first quick.

Speaker #4: Successfully.

Speaker #3: Very good. Thank you very much

Operator 3: Very good. Next question comes from the line of Sajal Kapoor with Antifragile Thinking. Please go ahead.

Operator: Very good. Next question comes from the line of Sajal Kapoor with Antifragile Thinking. Please go ahead.

Speaker #1: Thanks, we can come from the line of Sejal Kapoor with antifragile thinking. Please go ahead.

Speaker #3: Yeah, hi team. I'm not too sure if I'm audible or not. On a lighter note, this Zoom intra is still awaiting GMP validation, that's for sure.

Sajal Kapoor: Yeah. Hi, team. I'm not too sure if I'm audible or not. On a lighter note, this Zoom infra is still awaiting GMP validation, that's for sure. If you guys can hear me, I've got two questions. First is, commercial CMS has scaled very strongly without much change in the number of commercial programs, as far as I could see. Is that growth becoming more evenly spread across molecules and customers, or are a few large programs still doing most of the heavy lifting? That's my first question. Thank you. Operator, I think it's better to reschedule this earnings call. I mean, there's no point trying and failing.

Speaker #3: If you guys can hear me, I've got two questions. First is, commercial CMS has scaled very strongly without much change in the number of commercial programs, as far as I could see.

Speaker #3: So, is that growth becoming more evenly spread across molecules and customers, or are a few large programs still doing most of the heavy lifting?

Speaker #3: That's my first question. Thank you. Operator, I think it's better to reschedule this earnings call. I mean, it's no point trying and failing.

Speaker #2: I don't think he's able to hear us. Sajal, are you able to hear us?

Saharsh Davuluri: I don't think he's able to hear us. Sajal, are you able to hear us?

Davuluri Saharsh: I don't think he's able to hear us. Sajal, are you able to hear us?

Speaker #3: I can hear you now, Saharsh, but not in the last 60 seconds if you are talking.

Sajal Kapoor: I can hear you now, Saharsh, but not in the last 60 seconds if you were talking.

Saharsh Davuluri: Oh. Sajal, would you mind repeating the question one more time?

Davuluri Saharsh: Oh. Sajal, would you mind repeating the question one more time?

Speaker #2: Sajal, would you mind repeating the question one more time?

Speaker #3: Yeah, sure. So my question, Saharsh, is that.

Sajal Kapoor: Yeah, sure. My question, Saharsh, is that.

Speaker #4: Sejal, we can hear you. Please proceed.

Shyam Srinivasan: Sajal, we can hear you. Please proceed with your question.

Davuluri Saharsh: Sajal, we can hear you. Please proceed with your question.

Speaker #3: Yeah, sure. So this we are just following on from Q4 execution as far as the commercial CMS is concerned. And again, Q1 has done pretty well on that front.

Sajal Kapoor: Yeah, sure. We are just following on from Q4 execution as far as the commercial CMS is concerned. Again, Q1 has done pretty well on that front. The question really is the growth more diversified, spread across molecules and customers, or are we experiencing a few large programs doing majority of the heavy lifting, both in Q4 as well as in Q1 this time?

Speaker #3: The question really is, is the growth coming is the growth more diversified, spread across molecules and customers, or are we experiencing a few large programs doing majority of the heavy lifting both in Q4 as well as in Q1 this time?

Saharsh Davuluri: Sejal, if you see, I think a big part of our growth is coming from CMS commercial. CMS commercial is being driven by a handful of molecules. There are not too many of them, I would say maybe about three of them that really drive our business. These molecules are fairly active. As in, we produce them every quarter, and we see a fairly healthy future for them over the next five to six years. Yes, there will be certain lumpiness in how they perform, like maybe you will not have orders every quarter, et cetera, but there is nothing which is like a one-off performance from the commercial CMS pipeline that we have. The reality is that there are only a handful of these molecules, and to be frank, be glad that it's a handful and it's not just one.

Davuluri Saharsh: Sejal, if you see, I think a big part of our growth is coming from CMS commercial. CMS commercial is being driven by a handful of molecules. There are not too many of them, I would say maybe about three of them that really drive our business. These molecules are fairly active. As in, we produce them every quarter, and we see a fairly healthy future for them over the next five to six years.

Speaker #2: Sajal, if you see, I think a big part of our growth is coming from CMS commercial and CMS commercial is being driven by a handful of molecules.

Speaker #2: They're not too many of them. I would say maybe about three of them that really drive our business. And these molecules are fairly active.

Speaker #2: As in, we produce them every quarter, and we see a fairly healthy future for them over the next five to six years. Yes, there will be certain lumpiness in how they perform.

Davuluri Saharsh: Yes, there will be certain lumpiness in how they perform, like maybe you will not have orders every quarter, et cetera, but there is nothing which is like a one-off performance from the commercial CMS pipeline that we have. The reality is that there are only a handful of these molecules, and to be frank, be glad that it's a handful and it's not just one.

Speaker #2: Like maybe you will not have orders every quarter, etc. But there is nothing which is like a one-off performance from the commercial CMS pipeline that we have.

Speaker #2: But the reality is that there are only a handful of these molecules, and to be frank, we're glad that it's a handful and not just one.

Speaker #2: But I think that will be how our next two to three years commercial growth will be driven by them. But we are also quickly adding a lot of projects which are also picking up.

Saharsh Davuluri: I think that will be how our next two to three years' commercial growth will be driven by them. We are also quickly adding a lot of projects, which are also picking up. As I had mentioned in the past, we expect to have one more commercialization this year, probably have one or maybe even two next year, and therefore you will see a greater diversity in these molecules. Yes, so I think short answer, yes, there are only a handful driving this. Two, they're not like a lot of one-offs. There will be lumpiness, but it's not like we see something that's exceptional that is contributing to the revenue.

Davuluri Saharsh: I think that will be how our next two to three years' commercial growth will be driven by them. We are also quickly adding a lot of projects, which are also picking up. As I had mentioned in the past, we expect to have one more commercialization this year, probably have one or maybe even two next year, and therefore you will see a greater diversity in these molecules. Yes, so I think short answer, yes, there are only a handful driving this. Two, they're not like a lot of one-offs. There will be lumpiness, but it's not like we see something that's exceptional that is contributing to the revenue.

Speaker #2: As I had mentioned in the past, we expect to have one more commercialization this year. Probably have one or maybe even two next year.

Speaker #2: And therefore, you will see a greater diversity in these molecules. But yes, so I think short answer, yes, there are only a handful driving this.

Speaker #2: But two, they're not like a lot of one-offs. They will be lumpiness, but it's not like we see something that's exceptional that is contributing to the revenue.

Speaker #3: Sure, sure, sure. And on the development side, even last year, I think in Q3, I asked about the development pipeline keeping pace or how is it keeping pace with the commercial growth.

Sajal Kapoor: Sure. On the development side, even last year, I think in Q3, I asked about the development pipeline keeping pace, or how is it keeping pace with the commercial growth. A year on, how comfortable are you that the quality and the maturity of today's development pipeline can replenish the commercial basket three to five years out, when these handful of commercial molecules may start kind of receding on a higher base? Because we got to replenish them with fresh infusion of better size, because our base would have grown three to five years out. The development pipeline today must be strong and robust enough to build on top of that higher base, three, four, five years out.

Speaker #3: So year on, how comfortable are you that the quality and the maturity of today's development pipeline can replenish the commercial basket three to five years out when these handful of commercial molecules may start kind of receding on a higher base?

Speaker #3: Because we got to replenish them with fresh infusion of better size because our base would have grown three to five years out. So the development pipeline today must be strong and robust enough to build on top of that higher base three, four, five years out.

Sajal Kapoor: Because we got to replenish them with fresh infusion of better size, because our base would have grown three to five years out. The development pipeline today must be strong and robust enough to build on top of that higher base, three, four, five years out.

Speaker #2: I think it's a great question, Sajal. And I think it's very appropriate I would say that it's a relative degree of comfort. I'm feeling a lot better today than what I was feeling perhaps a year ago or definitely what I was feeling two years ago.

Saharsh Davuluri: I think it's a great question, Sejal, and I think it's very appropriate. I would say that it's a relative degree of comfort. I'm feeling a lot better today than what I was feeling perhaps a year ago, or definitely what I was feeling two years ago. If you even go back, I think when we wrote down the opening remarks, we talked about how we don't want to be project-focused, but more relationship-focused, account-focused. We believe that our future will be about working with companies on a set of programs, almost work like a platform partner for large innovative companies so that we can do a handful of molecules for them.

Davuluri Saharsh: I think it's a great question, Sejal, and I think it's very appropriate. I would say that it's a relative degree of comfort. I'm feeling a lot better today than what I was feeling perhaps a year ago, or definitely what I was feeling two years ago. If you even go back, I think when we wrote down the opening remarks, we talked about how we don't want to be project-focused, but more relationship-focused, account-focused. We believe that our future will be about working with companies on a set of programs, almost work like a platform partner for large innovative companies so that we can do a handful of molecules for them.

Speaker #2: And if you even go back, I think when we wrote down the opening remarks, we talked about how we don't want to be project-focused, but more relationship-focused, account-focused.

Speaker #2: And we believe that our future will be about working with companies on a set of programs, almost working like a platform partner for large innovator companies, so that we can do a handful of molecules for them.

Speaker #2: As we take up this approach and as we see validation for this approach in the development projects that we are seeing, I feel fairly confident that three, four, five years from now, we will have healthy set of new molecules that will start to almost overtake or even kind of make insignificant some of the other molecules that are currently contributing.

Saharsh Davuluri: As we take up this approach and as we see validation for this approach in the development projects that we are seeing, I feel fairly confident that 3, 4, 5 years from now, we will have a healthy set of new molecules that will start to almost overtake or even kind of make insignificant some of the other molecules that are currently contributing. Definitely, we see as the company's base is growing, we see an increasingly healthy pipeline of projects. Obviously, we should be careful not to sound overconfident because many of these projects are still in clinical development, and a lot of these relationships are relatively new for us.

Davuluri Saharsh: As we take up this approach and as we see validation for this approach in the development projects that we are seeing, I feel fairly confident that 3, 4, 5 years from now, we will have a healthy set of new molecules that will start to almost overtake or even kind of make insignificant some of the other molecules that are currently contributing.

Speaker #2: So definitely, as the company's base is growing, we see an increasingly healthy pipeline of projects. Obviously, we should be careful not to sound overconfident, because many of these projects are still in clinical development, and a lot of these relationships are relatively new for us.

Davuluri Saharsh: Definitely, we see as the company's base is growing, we see an increasingly healthy pipeline of projects. Obviously, we should be careful not to sound overconfident because many of these projects are still in clinical development, and a lot of these relationships are relatively new for us.

Speaker #2: But going by the confidence we have in our execution and the likelihood of the success of these molecules because they're an advanced clinic, I think in three to five years, we would have very healthy pipeline of new molecules that would completely overshadow the current pipeline.

Saharsh Davuluri: Going by the confidence we have in our execution and the likelihood of the success of these molecules, because they are in advanced clinics, I think in 3 to 5 years, we would have very healthy pipeline of new molecules that would completely overshadow the current pipeline.

Davuluri Saharsh: Going by the confidence we have in our execution and the likelihood of the success of these molecules, because they are in advanced clinics, I think in 3 to 5 years, we would have very healthy pipeline of new molecules that would completely overshadow the current pipeline.

Speaker #3: Sure, sure. Thank you so much. And that's all from my side.

Sajal Kapoor: Sure. Thank you so much. That's all from my side.

Speaker #1: Thank you. Next question comes from the line of Roland Nandu with Tidal Wise Public Alternatives. Please go ahead.

Operator 3: Thank you. Next question comes from the line of Prolin Nandu with Edelweiss Public Alternatives. Please go ahead.

Operator: Thank you. Next question comes from the line of Prolin Nandu with Edelweiss Public Alternatives. Please go ahead.

Speaker #4: Yeah. Thank you so much for taking my question. And there have been few participants who have not been able to ask questions. So maybe you can take them as well because it just creates the confusion, right?

Prolin Nandu: Yeah. Thank you so much for taking my question. There's been few participants who have not been able to ask questions, so maybe you can take them as well, because it just creates the confusion, right? Like last quarter on the inventory side of things, right? My question is on the opening remarks that you made, right? In terms of the conversation that you are having with the customers. While you have partially answered it, right, in the answers to the previous question. How should one think about monetization of these relationships, right? While they might be slow, but as you said, right, maybe on the peptide platform, the conversation is already moving towards our intended direction. How should one think about the more and more platforms getting added, or will we have much more deeper conversations in the peptide platform?

Speaker #4: Like last quarter on the inventory side of things, right? But my question is on the opening remarks that you made, right? In terms of the conversation that you are having on the with the customers, while you have partially answered it, right, in some of the previous to the in the answers to the previous question, but how should one think about monetization of these relationship, right, while they might be slow?

Prolin Nandu: How should one think about monetization of these relationships, right? While they might be slow, but as you said, right, maybe on the peptide platform, the conversation is already moving towards our intended direction. How should one think about the more and more platforms getting added, or will we have much more deeper conversations in the peptide platform?

Speaker #4: But as you said, right, the maybe on the peptide platform, the conversation is already moving towards our intended direction. So how should one think about the more and more platforms getting added?

Speaker #4: Or will we have much more deeper conversation in the peptide platform? And because we have a decent track record, right, in the last five years, are these conversations becoming much more easier than they were in the past?

Prolin Nandu: Because we have a decent track record, right, in the last 5 years, are these conversations becoming much more easier than they were in the past? Just some more qualitative color on the statement that you have made in the opening remarks would help.

Speaker #4: So just some more qualitative color on your the statement that you have made in the opening remarks would help.

Speaker #2: Yes, I think it's definitely a very important question. And don't mean to sound too confident in terms of the path, but the way we've seen this CMS business grow over the last at least eight to 10 years, the kind of pipeline we have, the list of RFPs, the list of customers, the kind of conversations we have, we get a very clear sense of what the overall portfolio of business is likely to be.

Saharsh Davuluri: Yes, I think it's definitely a very important question and don't mean to sound too confident in terms of the path, but the way we've seen this CMS business grow over the last at least 8 to 10 years. The kind of pipeline we have, the list of RFPs, the list of customers, the kind of conversations we have. We get a very clear sense of what the overall portfolio of business is likely to be. Of course, there is a conversion ratio, there is a probability of achievement, and there are a lot of variables at play. As we get into accounts which are more known to Neuland, companies we've been working for 3 years, 5 years, who are now talking about increasing their total business to Neuland or increasing their total exposure to Neuland.

Davuluri Saharsh: Yes, I think it's definitely a very important question and don't mean to sound too confident in terms of the path, but the way we've seen this CMS business grow over the last at least 8 to 10 years. The kind of pipeline we have, the list of RFPs, the list of customers, the kind of conversations we have. We get a very clear sense of what the overall portfolio of business is likely to be.

Speaker #2: Of course, there is conversion ratio, there is a probability of achievement, and there is there are a lot of variables at play. But as we get into accounts which are more known to Neuland, companies we've been working for three years, five years, who are now talking about increasing their total business to Neuland or increasing their total exposure to Neuland, I think that starts giving us very clear qualitative input on, okay, yes, there is some business that we are going to get from here.

Davuluri Saharsh: Of course, there is a conversion ratio, there is a probability of achievement, and there are a lot of variables at play. As we get into accounts which are more known to Neuland, companies we've been working for 3 years, 5 years, who are now talking about increasing their total business to Neuland or increasing their total exposure to Neuland.

Saharsh Davuluri: I think that starts giving us a very clear qualitative input on, okay, yes, there is some business that we are going to get from here. Second, when we have technologies like peptides, which places us in a very unique position. A lot of these peptide relationships that we are talking about, which may seem like new conversations, but we are not unknown to these customers. We've been working with them for 5, 10 years. We've been doing small scale work. We've been doing maybe peptide starting materials. Now the relationships have matured into something more advanced. A lot of this confidence comes from qualitative, substantiated conversations. If we look at the value of these opportunities, they are far larger than what we used to see, and I think ultimately that's what gives us the confidence that we will see more business.

Davuluri Saharsh: I think that starts giving us a very clear qualitative input on, okay, yes, there is some business that we are going to get from here. Second, when we have technologies like peptides, which places us in a very unique position. A lot of these peptide relationships that we are talking about, which may seem like new conversations, but we are not unknown to these customers.

Speaker #2: Second, when we have technologies like peptides, which places us in a very unique position, a lot of these peptide relationships that we are talking about, which may have kind of may seem like new conversations, but we are not unknown to these customers.

Speaker #2: We've been working with them for five, 10 years. We've been doing small-scale work. We've been doing maybe peptide starting materials. And now the relationships have matured into something more advanced.

Davuluri Saharsh: We've been working with them for 5, 10 years. We've been doing small scale work. We've been doing maybe peptide starting materials. Now the relationships have matured into something more advanced. A lot of this confidence comes from qualitative, substantiated conversations. If we look at the value of these opportunities, they are far larger than what we used to see, and I think ultimately that's what gives us the confidence that we will see more business.

Speaker #2: So a lot of this confidence comes from qualitative substantiated conversations and if we look at the value of these opportunities, they are far larger than what we used to see and I think ultimately that's what gives us the confidence that we will see more business.

Speaker #2: I mean, if I have to just kind of illustrate it, five years ago, the largest molecule that we could visualize was maybe a 50 crore per year kind of a molecule.

Saharsh Davuluri: If I have to just kind of illustrate it, 5 years ago, the largest molecule that we could visualize was maybe an INR 50 crore per year kind of a molecule. Today, we can visualize INR 500 crores per year or even INR 1,000 crore per year molecule. It doesn't mean that every opportunity we engage with is an INR 500 crore or INR 1,000 crore opportunity. When you look at it in totality, you're seeing the aggregate value of the business is increasing just in terms of prospects. That gives us a certain sense.

Davuluri Saharsh: If I have to just kind of illustrate it, 5 years ago, the largest molecule that we could visualize was maybe an INR 50 crore per year kind of a molecule. Today, we can visualize INR 500 crores per year or even INR 1,000 crore per year molecule. It doesn't mean that every opportunity we engage with is an INR 500 crore or INR 1,000 crore opportunity. When you look at it in totality, you're seeing the aggregate value of the business is increasing just in terms of prospects. That gives us a certain sense.

Speaker #2: Today, we can visualize 500 crores per year or even a thousand crore per year molecule. It doesn't mean that every opportunity we engage with is a 500 crore or a thousand crore opportunity.

Speaker #2: But when you look at it in totality, you're seeing the aggregate value of the businesses increasing just in terms of prospects. So that gives us a certain sense that is also very useful input for us in the kind of investment journey we have to go through over the next two, three years, which is something also I had alluded to in the opening remarks is that we need to I think based on the quality of the conversations we have, based on the relationships that we are now beginning to form, we are also looking at making more bold moves in terms of our capex cycles and the kind of investments we have to make.

Saharsh Davuluri: That is also a very useful input for us in the kind of investment journey we have to go through over the next two, three years, which is something also I had alluded to in the opening remarks, is that we need to, I think based on the quality of the conversations we have, based on the relationships that we are now beginning to form, we are also looking at making more bold moves in terms of our CapEx cycles and the kind of investments we have to make. I know it's not a very pointed answer, but we do feel pretty good in terms of where we are today, and I think we definitely feel the interest from companies as being like one of these top-tier partners out of India.

Davuluri Saharsh: That is also a very useful input for us in the kind of investment journey we have to go through over the next two, three years, which is something also I had alluded to in the opening remarks, is that we need to, I think based on the quality of the conversations we have, based on the relationships that we are now beginning to form, we are also looking at making more bold moves in terms of our CapEx cycles and the kind of investments we have to make. I know it's not a very pointed answer, but we do feel pretty good in terms of where we are today, and I think we definitely feel the interest from companies as being like one of these top-tier partners out of India.

Speaker #2: So I know it's not a very pointed answer, but we do feel pretty good in terms of where we are today and I think we definitely feel the interest from companies as being one of these top-tier partners out of India.

Speaker #4: Sure. No, thank you so much. So that confidence is quite encouraging. The second question is on the point that you only touched upon, right, in terms of capex.

Prolin Nandu: Sure. No, thank you so much. That confidence is quite encouraging. The second question is on the point that you only touched upon, right, in terms of CapEx, or the next phase of investment. When you talk about the next phase of investment would look very different and you need to make some bold moves. Is it just the quantum of the investments, or do you think that the qualitative aspects of this investment will also be very different in terms of the capabilities, in terms of the plant qualities? Is it just the quantum that you're talking about, or the quality of these investment will also be very different? If yes, then how different it would be versus what we have done on CapEx and expansion in the past?

Speaker #4: Right? Or the next phase of investment. Now, when you talk about the next phase of investment would look very different and you need to make some bold moves.

Speaker #4: Is it just the quantum of the investments or do you think that the qualitative aspects of this investment will also be very different in terms of the capabilities, in terms of the planned qualities?

Prolin Nandu: Is it just the quantum of the investments, or do you think that the qualitative aspects of this investment will also be very different in terms of the capabilities, in terms of the plant qualities? Is it just the quantum that you're talking about, or the quality of these investment will also be very different? If yes, then how different it would be versus what we have done on CapEx and expansion in the past?

Speaker #4: So could you I mean, is it just the quantum that you're talking about or the quality of these investment will also be very different?

Speaker #4: And if yes, then how different it would be versus what we have done on capex and expansion in the past?

Speaker #2: No, no, that's another great question. I think for us, both will be different. I think the quantum will be different because obviously what has brought us here will not take us into the kind of growth journey that we are looking at.

Saharsh Davuluri: No, that's another great question. I think for us, both will be different. I think the quantum will be different because obviously what has brought us here will not take us into the kind of growth journey that we are looking at. Obviously, the forward CapEx will be much higher than the CapEx that we've deployed so far. Qualitatively, it will be different as well. Because if you look at Neuland, and perhaps it may be challenging for outsiders to analyze it, but Neuland operates in a space that is very unique. We are operating at that convergence of GMP and complex chemistry. That's where we operate. That's why we like to be in complex API. We're not very big in non-human health. We're not very big in starting materials, KSMs or stuff like that. We like to operate in a certain area.

Davuluri Saharsh: No, that's another great question. I think for us, both will be different. I think the quantum will be different because obviously what has brought us here will not take us into the kind of growth journey that we are looking at. Obviously, the forward CapEx will be much higher than the CapEx that we've deployed so far. Qualitatively, it will be different as well.

Speaker #2: So obviously, the forward capex will be much higher than the capex that we've deployed so far. Qualitatively, it will be different as well. Because if you look at Neuland and perhaps it may be challenging for outsiders to analyze it, but Neuland operates in a space that is very unique.

Davuluri Saharsh: Because if you look at Neuland, and perhaps it may be challenging for outsiders to analyze it, but Neuland operates in a space that is very unique. We are operating at that convergence of GMP and complex chemistry. That's where we operate. That's why we like to be in complex API. We're not very big in non-human health. We're not very big in starting materials, KSMs or stuff like that. We like to operate in a certain area.

Speaker #2: We are operating at that convergence of GMP and complex chemistry. That's where we operate. That's why we like to be in complex APIs. We're not very big in non-human health.

Speaker #2: We are not very big in starting materials, KSMs, or stuff like that. We like to operate in a certain area. And if our modus operandi is complex chemistry, then our future is only has to be more and more complex.

Saharsh Davuluri: If our modus operandi is complex chemistry, our future it only has to be more and more complex. It cannot be more and more simpler, which means that we will be seeking presence in newer modalities, more complex modalities. I think our entry into peptides is again a progression in that line. If you have to look at further progression, you will have to look at perhaps geographic diversification. If you're looking at getting into more complex modalities, it may not make a lot of strategic or economic sense to build those kinds of infrastructure or capabilities maybe in India. You might have to look at maybe either an M&A kind of an opportunity, or you might have to look at some organic but overseas kind of investment. That is where they may not be big bets, but they will definitely be qualitatively different.

Davuluri Saharsh: If our modus operandi is complex chemistry, our future it only has to be more and more complex. It cannot be more and more simpler, which means that we will be seeking presence in newer modalities, more complex modalities. I think our entry into peptides is again a progression in that line. If you have to look at further progression, you will have to look at perhaps geographic diversification.

Speaker #2: It cannot be more and more simpler. Which means that we will be seeking presence in newer modalities more complex modalities. I think our entry into peptides is again a progression in that line.

Speaker #2: And if you have to look at further progression, you will have to look at perhaps geographic diversification. Because if you're looking at getting into more complex modalities, it may not make a lot of strategic or economic sense.

Davuluri Saharsh: If you're looking at getting into more complex modalities, it may not make a lot of strategic or economic sense to build those kinds of infrastructure or capabilities maybe in India. You might have to look at maybe either an M&A kind of an opportunity, or you might have to look at some organic but overseas kind of investment. That is where they may not be big bets, but they will definitely be qualitatively different.

Speaker #2: To build those kind of infrastructure or capabilities maybe in India. You might have to look at maybe either an M&A kind of an opportunity or you might have to look at some organic but overseas kind of investments.

Speaker #2: So that is where they may not be big bets but they will definitely be qualitatively different. And I believe that those are the kind of meaningful progression that you will see Neuland making in the next one, two years.

Saharsh Davuluri: I believe that those are kind of meaningful progressions that you will see Neuland making in the next one to two years. Of course, that coupled with our conventional organic growth journey, which will require us to create more infrastructure, R&D, manufacturing peptides, complex molecules. I think that's something that will continue as well. You will see quantitatively more investments, and you will also see a qualitative move in towards newer modalities, that's where we believe we have been successful, and that's where we would like to play.

Davuluri Saharsh: I believe that those are kind of meaningful progressions that you will see Neuland making in the next one to two years. Of course, that coupled with our conventional organic growth journey, which will require us to create more infrastructure, R&D, manufacturing peptides, complex molecules. I think that's something that will continue as well. You will see quantitatively more investments, and you will also see a qualitative move in towards newer modalities, that's where we believe we have been successful, and that's where we would like to play.

Speaker #2: And of course, that coupled with our conventional organic growth journey, which will require us to create more infrastructure, R&D, manufacturing, peptides, complex molecules. I think that's something that will continue as well.

Speaker #2: So, you will see quantitatively more investments, and you will also see a qualitative move towards newer modalities. Because that's where we believe we have been successful, and that's where we would like to play.

Speaker #4: Thank you so much and all the very best.

Prolin Nandu: Thank you so much, all the very best.

Speaker #1: Thank you. Next question come from the line of Chirag with Whitepine Investment Management. Please go ahead.

Operator 3: Thank you. Our next question comes from the line of Chirag with Whitepine Investment Management. Please go ahead.

Operator: Thank you. Our next question comes from the line of Chirag with Whitepine Investment Management. Please go ahead.

Speaker #4: Yeah, thanks for this opportunity. Congratulations for this set of numbers and for thanks for the deliberative answers till now. So I have two questions.

[Company Representative] (Whitepine Investment Management): Yeah, thanks for this opportunity. Congratulations for this set of numbers, and thanks for the elaborative answers till now. I have two questions. First is a slightly short-term question. If I look at Q4 and Q1 results, sequential results for Q1, how much of this sequential decline would be due to excessive stocking up done by the customer due to initiate supply in Q4? That's one. Can we view Q1 as a normalized commercial run rate for the two or three molecules that you are referring to?

Chirag Shah: Yeah, thanks for this opportunity. Congratulations for this set of numbers, and thanks for the elaborative answers till now. I have two questions. First is a slightly short-term question. If I look at Q4 and Q1 results, sequential results for Q1, how much of this sequential decline would be due to excessive stocking up done by the customer due to initiate supply in Q4? That's one. Can we view Q1 as a normalized commercial run rate for the two or three molecules that you are referring to?

Speaker #4: First is a short-term slightly short-term question. If I look at Q4 and Q1 results, sequential results for Q1, how much of the sequential decline would be due to excessive stocking up done by the customer due to initial supply in Q4?

Speaker #4: That's one. And is this can we assume Q1 as a normalized commercial run rate for the two or three molecules that you are referring to?

Saharsh Davuluri: I think, see, if you go back to the Q4 earnings call, Chirag, we had very emphatically said that Q4 was actually more of Q3 spill-over into Q4. In fact, we were very relieved that we had a good Q4 so that at least we were more or less on par for FY26. I would look at Q4 as an exceptionally inflated quarter because it was more of a Q3 plus Q4 kind of a performance, and if you recall, Q3 was not a very good quarter for us. I will de-hyphenate Q4 because Q4 is exceptionally big. Therefore, the question of the sequential Q4 to Q1, I think is not really valid.

Davuluri Saharsh: I think, see, if you go back to the Q4 earnings call, Chirag, we had very emphatically said that Q4 was actually more of Q3 spill-over into Q4. In fact, we were very relieved that we had a good Q4 so that at least we were more or less on par for FY26. I would look at Q4 as an exceptionally inflated quarter because it was more of a Q3 plus Q4 kind of a performance, and if you recall, Q3 was not a very good quarter for us. I will de-hyphenate Q4 because Q4 is exceptionally big. Therefore, the question of the sequential Q4 to Q1, I think is not really valid.

Speaker #2: I think, see, if you go back to the Q4 earnings call, Chirag, we had very emphatically said that Q4 was actually more of Q3's spillover into Q4.

Speaker #2: And, in fact, we were very relieved that we had a good Q4, so that at least we were more or less on par for FY26.

Speaker #2: So I would not really so I would look at Q4 as a exceptionally inflated quarter because it was more of a Q3 plus Q4 kind of a performance than if you recall Q3 was not a very good quarter for us.

Speaker #2: So I will de-hyphenate Q4 because Q4 is exceptionally big. So therefore, the question of the sequential Q4 to Q1 I think is not really valid.

[Company Representative] (Whitepine Investment Management): Fair

Chirag Shah: Fair

Speaker #2: Because Q4 is not really a relevant point. I think is Q1 the base? Obviously, I will not answer that question because we, again, don't want to give any kind of indication of what FY27 is likely to be other than the broader guidance we've talked about.

Saharsh Davuluri: because Q4 is not really a relevant point. I think is Q1 the base? Obviously, I will not answer that question because we, again, don't want to give any kind of indication of what FY27 is likely to be other than the broader guidance we've talked about. Please take it for granted that our business tends to be lumpy just the way Q4 was lumpy. There will be lumpiness. Let's not try to standardize or look at a base. I think, again, like I said, we don't have exceptions in Q1. We don't have one-offs, we don't have de-stocking. At the same time our commercial revenues are driven by a handful of molecules, so they are subject to volatility, and that volatility will be there. Therefore, we are cautious in not giving you any indications of how things will go.

Davuluri Saharsh: because Q4 is not really a relevant point. I think is Q1 the base? Obviously, I will not answer that question because we, again, don't want to give any kind of indication of what FY27 is likely to be other than the broader guidance we've talked about. Please take it for granted that our business tends to be lumpy just the way Q4 was lumpy. There will be lumpiness. Let's not try to standardize or look at a base. I think, again, like I said, we don't have exceptions in Q1. We don't have one-offs, we don't have de-stocking.

Speaker #2: Please take it for granted that our business tends to be lumpy. Just the way Q4 was lumpy, they will be lumpiness. So let's not try to standardize or look at a base.

Speaker #2: I think again, like I said, we don't have exceptions in Q1. We're not we don't have one-offs. We don't have destocking. But at the same time, our commercial revenues are driven by a handful of molecules.

Davuluri Saharsh: At the same time our commercial revenues are driven by a handful of molecules, so they are subject to volatility, and that volatility will be there. Therefore, we are cautious in not giving you any indications of how things will go. We believe 2027 will be a good year, and 2028 will be a good year as well, and that's something that I'm happy to reiterate.

Speaker #2: So they are subject to volatility. And that volatility will be there. So therefore, we are cautious in not giving you any indications of how things will flow.

Speaker #2: But we believe 27 will be a good year. And 28 will be a good year as well. And that's something that I'm happy to reiterate.

Saharsh Davuluri: We believe 2027 will be a good year, and 2028 will be a good year as well, and that's something that I'm happy to reiterate.

Speaker #4: Okay. So there is no excessive stocking-related supply, at least in your assessment. Fair point. So, second question is on the development side. If I go back into the history, we used to have a reasonably high absolute number of developments.

[Company Representative] (Whitepine Investment Management): Okay. There is no excessive stocking-related supplies, at least in your assessment. Fair point. Second question is on the development side. If I go back into the history, we used to have a reasonably high absolute number of development. As high as even INR 300 crore. Currently, we are doing anywhere between around INR 100 crore. If I say FY26, it was INR 90-odd crore of development revenue, and if I go to FY24 or even earlier, it used to be much higher number in absolute terms. Obviously, percentage terms also we are at all-time low kind of a number because of good commercial sales. Is there a change in the way you are selecting the development products versus what it was say in 2022, 2023, 2024 or earlier years, where you are very choosy or very specific, only those molecules which you think can be big?

Chirag Shah: Okay. There is no excessive stocking-related supplies, at least in your assessment. Fair point. Second question is on the development side. If I go back into the history, we used to have a reasonably high absolute number of development. As high as even INR 300 crore. Currently, we are doing anywhere between around INR 100 crore.

Speaker #4: As high as even 300 crore. Currently, we are doing anywhere between around 100 crore. So if I say F26, it was 90 odd crores of development revenue.

Chirag Shah: If I say FY26, it was INR 90-odd crore of development revenue, and if I go to FY24 or even earlier, it used to be much higher number in absolute terms. Obviously, percentage terms also we are at all-time low kind of a number because of good commercial sales. Is there a change in the way you are selecting the development products versus what it was say in 2022, 2023, 2024 or earlier years, where you are very choosy or very specific, only those molecules which you think can be big? Is there a change in the approach and hence the development revenue will always look absolute low versus 2024 as a base?

Speaker #4: And if I go to F24 or even earlier, it used to be much higher number in absolute terms. Obviously, percentage terms also, we are at all-time low kind of a number because of good commercial sales.

Speaker #4: Is there a change in the way you are selecting the development products versus what it was saying 22, 23, 24 or earlier years? Where you are very choosy or very specific only those molecules which you think can be big?

Speaker #4: Is there a change in the approach and hence the development revenue will always look absolute low versus a 24 as a base?

[Company Representative] (Whitepine Investment Management): Is there a change in the approach and hence the development revenue will always look absolute low versus 2024 as a base?

Speaker #2: No, I think the see, I'll tell you, Chirag, the development the reason why we separate development revenue from commercial in our disclosures, Chirag, is because we think it's important for analysts, investors to know what is the recurring part of the business.

Saharsh Davuluri: No. I'll tell you, Chirag. The reason why we separate development revenue from commercial in our disclosures, Chirag, is because we think it's important for analysts, investors to know what is the recurring part of the business. That's the reason why we separate the development from the commercial. What we would like folks to look at is look at a long-term pattern of commercial and see how it's moving, and that's a general indicator of what the base is going to be like. The development revenues are very product specific, Chirag. If we were making, say, 10, 20 tons of launch quantity of an NCE, and we were shipping 10, 20 tons of a high-value NCE over a three-quarter period, it's very possible that we would have had INR 200 crore of development revenues.

Davuluri Saharsh: No. I'll tell you, Chirag. The reason why we separate development revenue from commercial in our disclosures, Chirag, is because we think it's important for analysts, investors to know what is the recurring part of the business. That's the reason why we separate the development from the commercial.

Speaker #2: That's the reason why we separate the development from the commercial. What we would like folks to look at is look at a long-term pattern of commercial and see how it's moving.

Davuluri Saharsh: What we would like folks to look at is look at a long-term pattern of commercial and see how it's moving, and that's a general indicator of what the base is going to be like. The development revenues are very product specific, Chirag. If we were making, say, 10, 20 tons of launch quantity of an NCE, and we were shipping 10, 20 tons of a high-value NCE over a three-quarter period, it's very possible that we would have had INR 200 crore of development revenues.

Speaker #2: And that's a general indicator of what the base is going to be like. The development revenues are very, very product-specific, Chirag. If we were making say 10, 20 tons of launch quantity of an NC and we were shipping 10, 20 tons of a high-value NC over a three-month three-quarter period, it's very possible that we would have had 200 crores of development revenues.

Saharsh Davuluri: There may be other situations where we are making only a couple of tons or maybe INR 50 crore of development revenues, because the customer is not ordering that much launch quantities. The key point here is launch quantities we always categorize as development revenues. Therefore, you may have historically seen that there were these large development revenues. It's quite possible they might happen again, but just because we are not seeing those large development revenues does not mean that there is a correlation to commercial revenues. Not every customer would prepare for those kind of launches, and every strategy is different. It doesn't take away from the point that our pipeline still has very exciting large value molecules. Therefore, my answer to you is that the pattern of development revenue may not give you the kind of insight you are looking for.

Davuluri Saharsh: There may be other situations where we are making only a couple of tons or maybe INR 50 crore of development revenues, because the customer is not ordering that much launch quantities. The key point here is launch quantities we always categorize as development revenues. Therefore, you may have historically seen that there were these large development revenues. It's quite possible they might happen again, but just because we are not seeing those large development revenues does not mean that there is a correlation to commercial revenues.

Speaker #2: They may be other situations where we are making only a couple of tons, or maybe 50 crores of development revenues. Because the customer is not ordering that much launch quantities.

Speaker #2: The key point here is launch quantities we always categorize as development revenues. And therefore, you may have historically seen that there were these large development revenues.

Speaker #2: It's quite possible they might happen again. But just because we are not seeing those large development revenues does not mean that there is a correlation to commercial revenues.

Speaker #2: Because not every customer would prepare for those kind of launches. And every strategy is different. But it doesn't take away from the point that our pipeline still has very exciting large-value molecules.

Davuluri Saharsh: Not every customer would prepare for those kind of launches, and every strategy is different. It doesn't take away from the point that our pipeline still has very exciting large value molecules. Therefore, my answer to you is that the pattern of development revenue may not give you the kind of insight you are looking for.

Speaker #2: So therefore, my answer to you is that the pattern of development revenue may not give you the kind of insight you are looking for.

Speaker #2: The commercial revenue trend is what we are trying to give you. I think development pipeline, the health of development pipeline, I think you will have to rely on our quality to analysis.

Saharsh Davuluri: The commercial revenue trend is what we are trying to give you. I think development pipeline, the health of development pipeline, I think you will have to rely on our qualitative analysis, which we try to be consistent and give to you as well. You may not get the insight you are looking for, but I can assure you that our quality of development pipeline is only getting better and better.

Davuluri Saharsh: The commercial revenue trend is what we are trying to give you. I think development pipeline, the health of development pipeline, I think you will have to rely on our qualitative analysis, which we try to be consistent and give to you as well. You may not get the insight you are looking for, but I can assure you that our quality of development pipeline is only getting better and better.

Speaker #2: We try to be consistent and provide that to you as well, but you may not always get the insight you are looking for. However, I can assure you that the quality of our development pipeline is only getting better and better.

Speaker #4: Great. This is helpful. Thank you very much and all the best.

[Company Representative] (Whitepine Investment Management): Great. This is helpful. Thank you very much, and all the best.

Chirag Shah: Great. This is helpful. Thank you very much, and all the best.

Speaker #1: Thank you. Our next question come from the line of Kushal Shovatia with Nomura. Please go ahead.

Operator 3: Thank you. Our next question comes from the line of Kushal Chovatia with Nomura. Please go ahead.

Operator: Thank you. Our next question comes from the line of Kushal Chovatia with Nomura. Please go ahead.

Speaker #4: Yeah, hello. So my question is with regard to the strategic collaboration which you announced with Grand Pharma. Is this for some particular suite of products, or what is it for?

Kushal Chovatia: Yeah, hello. My question is with regards to this strategic collaboration which you announced with Gland Pharma. Is this for some particular suite of products, or what is it for? Why have you partnered with Gland? What made you choose them as your partner?

Speaker #4: And why have you partnered with Grand? What made you choose them as your partner?

Speaker #2: You want to answer that?

Saharsh Davuluri: You want to answer that?

Davuluri Saharsh: You want to answer that?

Speaker #3: Yeah. So I think basically, we are looking at this collaboration with Gland forest. They're re sterile manufacturing capabilities which I think we have talked about in the past too that there's a part of our specialty GDS portfolio where we are we have a few molecules where we are working with niche players in certain markets and those are molecules with a specific technologies.

Sajeev Emmanuel Medikonda: Yeah. I think, basically we are looking at this collaboration with Gland for their sterile manufacturing capabilities, which I think we have talked about in the past too, that there's a part of our specialty GDS portfolio where we have a few molecules where we are working with niche players in certain markets, and those are molecules which require specific technologies. This is something that we have looked at in terms of this sterile API manufacturing. It's something which Gland has established themselves as one of the key players when it comes to this specific kind of sterile manufacturing, which is not very prevalent, not just in India, but across the globe too. There are very few players.

Sajeev Medikonda: Yeah. I think, basically we are looking at this collaboration with Gland for their sterile manufacturing capabilities, which I think we have talked about in the past too, that there's a part of our specialty GDS portfolio where we have a few molecules where we are working with niche players in certain markets, and those are molecules which require specific technologies.

Speaker #3: And this is something that we have looked at in terms of this sterile API manufacturing is something which Gland has established them as a one of the key players when it comes to this specific tile kind of sterile manufacturing which is not very prevalent not just in India but across the globe too.

Sajeev Medikonda: This is something that we have looked at in terms of this sterile API manufacturing. It's something which Gland has established themselves as one of the key players when it comes to this specific kind of sterile manufacturing, which is not very prevalent, not just in India, but across the globe too. There are very few players.

Speaker #3: There are very few players. So given their capabilities and their regulatory track record and even our capability and even our strategy of working with niche molecules also developing processes which are complex not just at a API level but also in terms of the way that we sterilization should be done.

Sajeev Emmanuel Medikonda: Given their capabilities and their regulatory track record, and even our capability and even our strategy of working with niche molecules, also developing processes which are complex, not just at the API level, but also in terms of the way that this sterilization should be done. We had done that work, and we felt like over a period of time, this is the area that we want to continue to focus on. Customers are dependent on Neuland for this. As we see that the long-term market for some of these products is going to be significant, and it is something that we see happening over a period of time, we have decided to come together with Gland and to make this strategic collaboration.

Sajeev Medikonda: Given their capabilities and their regulatory track record, and even our capability and even our strategy of working with niche molecules, also developing processes which are complex, not just at the API level, but also in terms of the way that this sterilization should be done. We had done that work, and we felt like over a period of time, this is the area that we want to continue to focus on.

Speaker #3: So we had done that work and we felt that over a period of time there's a area that we want to continue to focus on customers are dependent on Neuland for this.

Sajeev Medikonda: Customers are dependent on Neuland for this. As we see that the long-term market for some of these products is going to be significant, and it is something that we see happening over a period of time, we have decided to come together with Gland and to make this strategic collaboration.

Speaker #3: So as we see that the long-term market for some of these products is going to be significant and it is something that we see happening over a period of time, we have decided to come together with Gland and make this strategic collaboration.

Speaker #2: Yeah, I think just to add to what Sajeev said, I think for us, we also see a very strong synergy with Gland because one, we don't compete with each other.

Saharsh Davuluri: Yeah. Just to add to what Sajeev said, I think for us, we also see a very strong synergy with Gland because one, we don't compete with each other. There's a lot of synergies between what they do, what we do. They have a fantastic track record in managing sterile products. We have very good experience in making complex APIs. For us to move into making sterile product would attract a lot of risks associated with managing sterile facilities. That's something that, as management of Neuland, we thought we should try to avoid. At the same time, someone like Gland, who's very good at sterile, but maybe not necessarily got their energy focused on developing complex APIs. It's a very good partnership.

Davuluri Saharsh: Yeah. Just to add to what Sajeev said, I think for us, we also see a very strong synergy with Gland because one, we don't compete with each other. There's a lot of synergies between what they do, what we do. They have a fantastic track record in managing sterile products. We have very good experience in making complex APIs.

Speaker #2: There's a lot of synergies between what they do, what we do. They have a fantastic track record in managing sterile products. We have very good experience in making complex APIs.

Speaker #2: For us to move into making sterile products would attract a lot of risks associated with managing sterile facilities. That's something that, as the management of Neuland, we thought we should try to avoid.

Davuluri Saharsh: For us to move into making sterile product would attract a lot of risks associated with managing sterile facilities. That's something that, as management of Neuland, we thought we should try to avoid. At the same time, someone like Gland, who's very good at sterile, but maybe not necessarily got their energy focused on developing complex APIs. It's a very good partnership.

Speaker #2: At the same time, someone like Gland who's very good at sterile but maybe not necessarily got their energy focused on developing complex APIs. It's a very good partnership.

Speaker #2: We see a very good runway not just for the few products that we have collaborated with now, but we see opportunity for collaborating with for few more products as well.

Saharsh Davuluri: We see a very good runway, not just for the few products that we have collaborated with now, but we see opportunity for collaborating with future products as well. I think it's also a great opportunity for us because it's an asset-light arrangement for us. Without necessarily getting into the rigmarole of creating an asset and managing it, et cetera, we are able to rely on this partnership. We're very excited, and we think it's going to be a long-term collaboration.

Davuluri Saharsh: We see a very good runway, not just for the few products that we have collaborated with now, but we see opportunity for collaborating with future products as well. I think it's also a great opportunity for us because it's an asset-light arrangement for us. Without necessarily getting into the rigmarole of creating an asset and managing it, et cetera, we are able to rely on this partnership. We're very excited, and we think it's going to be a long-term collaboration.

Speaker #2: And I think it's also a great opportunity for us because it's an asset-light arrangement for us. So, without necessarily getting into the rigmarole of creating an asset and managing it, etc., we are able to rely on this partnership.

Speaker #2: So we're very excited and we think it's going to be a long-term collaboration.

Speaker #4: Okay. And just to clarify, so these products for which you've collaborated with them are all genocides products?

Kushal Chovatia: Okay. Just to clarify, these products for which you've collaborated with them are all generic side products?

Speaker #2: Yeah, these are all from the niche generic categories. You know how we have the prime category and the niche category, right? These are all niche categories.

Saharsh Davuluri: These are all from the niche generic category.

Davuluri Saharsh: These are all from the niche generic category.

Kushal Chovatia: Okay, thank you.

Saharsh Davuluri: You know how we have the prime category and the niche category, right? These are all the prime niche category.

Davuluri Saharsh: You know how we have the prime category and the niche category, right? These are all the prime niche category.

Speaker #4: Okay. Understood. Thank you. That's all from me.

Operator 3: Okay. Understood. Thank you. That is all from me. Thank you. Our next question comes from the line of Ketan Acharya with Promore Broking Private Limited. Please go ahead.

Kushal Chovatia: Okay. Understood. Thank you. That is all from me.

Speaker #1: Thank you. Our next question comes from the line of Ketan Acharya with Promore Broking Private Limited. Please go ahead.

Operator: Thank you. Our next question comes from the line of Ketan Acharya with Promore Broking Private Limited. Please go ahead.

Speaker #5: Am I audible?

Ketan Acharya: Am I audible?

Speaker #1: Yes, sir. You are.

Operator 3: Yes, sir. You are.

Operator: Yes, sir. You are.

Speaker #2: Yeah.

Speaker #5: Sir, congratulations on excellent quarter with commercial molecule driving growth. Another capacity expansion announced today and EBITDA margins expanding significantly. Should investors view this as a beginning of a structurally higher earning phase for Neuland rather than just a favorable product mix quarter?

Ketan Acharya: Sir, congratulations on excellent quarter with commercial molecules driving growth. Another capacity expansion announced today, and EBITDA margins expanding significantly. Should investors view this as a beginning of a structurally higher earning phase for Neuland rather than just a favorable product mix quarter? Also, should we think about sustainable margin capacity utilization and commercial molecules growth over the next two to three years?

Speaker #5: Also, should we think about sustainable margin capacity utilization and commercial molecules growth over next two to three years?

Speaker #2: Yeah, no, thank you. Thank you for your kind words. We I think we see this quarter's performance indicator of the progress we've been making as a CMS-focused, CDMO-focused company.

Saharsh Davuluri: Yeah. No, thank you for your kind words. I think we see this quarter's performance again as a good indicator of the progress we've been making as a CMS-focused, CDMO-focused company. It definitely points to the direction in which we're growing. Again, not every quarter is going to be even. I think there's always going to be ups and downs, but I think the trend line is very clear. If you look at the slide where we talk about our last 10 to 15 quarters, I think it's very clear that we are progressing in the right direction. That data speaks louder than any of the words that I might say. In terms of EBITDA margins, again, I think we're a very conservative company. We always have been telling you guys that expect a 25% kind of an EBITDA from Neuland.

Davuluri Saharsh: Yeah. No, thank you for your kind words. I think we see this quarter's performance again as a good indicator of the progress we've been making as a CMS-focused, CDMO-focused company. It definitely points to the direction in which we're growing. Again, not every quarter is going to be even. I think there's always going to be ups and downs, but I think the trend line is very clear.

Speaker #2: And I think it definitely points to the direction in which we are growing. Again, not every quarter is going to be even. I think there's always going to be ups and downs.

Speaker #2: But I think the trend line is very clear. And I think if you look at the slide where we talk about our last 10 to 15 quarters, I think it's very clear that we are progressing in the right direction.

Davuluri Saharsh: If you look at the slide where we talk about our last 10 to 15 quarters, I think it's very clear that we are progressing in the right direction. That data speaks louder than any of the words that I might say. In terms of EBITDA margins, again, I think we're a very conservative company. We always have been telling you guys that expect a 25% kind of an EBITDA from Neuland.

Speaker #2: And I think that data speaks louder than any of the words that I might say. In terms of EBITDA margins, again, I think we were a very conservative company.

Speaker #2: We always have been telling you guys that expect a 25% kind of an EBITDA from Neuland. I'm glad to see that we've been on the right side of that number.

Saharsh Davuluri: I'm glad to see that we've been on the right side of that number. Also, I have to be honest to say that we've had favorable conditions in terms of exchange rates and things like that. Therefore, I would say you will see maybe higher EBITDA. I think in terms of our plans, in terms of our long-term, 25% plus is what we would be gunning for, and anything that's above that is kind of a bonus. That's where I would leave it at, and I think let each quarter unfold. Definitely don't expect even performance every quarter.

Davuluri Saharsh: I'm glad to see that we've been on the right side of that number. Also, I have to be honest to say that we've had favorable conditions in terms of exchange rates and things like that. Therefore, I would say you will see maybe higher EBITDA. I think in terms of our plans, in terms of our long-term, 25% plus is what we would be gunning for, and anything that's above that is kind of a bonus. That's where I would leave it at, and I think let each quarter unfold. Definitely don't expect even performance every quarter.

Speaker #2: But also, I have to be honest to say that we've had favorable conditions in terms of exchange rates and things like that. Therefore, I would say you will see maybe higher EBITDA but I think in terms of our plans, in terms of our long-term, 25% plus is what we would be running for.

Speaker #2: And anything that's above that is kind of a bonus. So that's kind of where I would leave it at. And I think let each quarter unfold.

Speaker #2: But definitely don't expect even performance every quarter.

Speaker #5: And to add to that, sir, is this going to be due to high utilization of existing commercial molecules or new commercial molecule launches would support this?

Ketan Acharya: To add to that, sir, is this going to be due to high utilization of existing commercial molecules or new commercial molecule launches would support this? Just the last thing, are we looking at any stock split or bonus? Because that question has been asked in several con calls but never answered.

Speaker #5: And just the last thing, are we looking at any stock split or bonus? Because that question has been asked in several concalls but never answered.

Saharsh Davuluri: I think this year we'll see development revenue go up, and we have talked about it. I think that development revenue will lead to commercial revenue. I'm not sure it'll lead to substantial commercial revenue in FY27, but 2028 onwards, you can see more molecules contributing to the commercial revenue. In terms of your second comment about stock split, I think that's something that I think was even mentioned by a few shareholders in the annual shareholders meeting yesterday. As you know, it's a board matter, and we will definitely take the suggestion and discuss it in our board and look at all the elements that surround that decision and we will try to see what can be done about that. Definitely appreciate your comment on that.

Speaker #3: No, I think the I think this year will see development revenue go up and we have talked about it. I think the development revenue will lead to commercial revenue I'm not sure it'll lead to substantial commercial revenue in FY27, but 28 onwards, you can see more molecules contributing.

Davuluri Saharsh: I think this year we'll see development revenue go up, and we have talked about it. I think that development revenue will lead to commercial revenue. I'm not sure it'll lead to substantial commercial revenue in FY27, but 2028 onwards, you can see more molecules contributing to the commercial revenue.

Speaker #3: To the commercial revenue. And in terms of your second comment about stock split, I think that's something that I think was even mentioned by a few shareholders in the annual shareholders meeting yesterday.

Davuluri Saharsh: In terms of your second comment about stock split, I think that's something that I think was even mentioned by a few shareholders in the annual shareholders meeting yesterday. As you know, it's a board matter, and we will definitely take the suggestion and discuss it in our board and look at all the elements that surround that decision and we will try to see what can be done about that. Definitely appreciate your comment on that.

Speaker #3: As you know, it's a board matter and we will definitely take the suggestion and discuss it in our board and look at all the elements that surround that decision and we will try to see what can be done about that.

Speaker #3: But definitely appreciate your comment on that.

Speaker #5: Thank you so much, sir. And it's great to be a 10-year investor in your company.

Ketan Acharya: Thank you so much, sir, it's glad to be a 10-year-old investor in your company.

Speaker #2: Thank you.

Saharsh Davuluri: Thank you.

Davuluri Saharsh: Thank you.

Speaker #3: People in the 18th?

Speaker #4: So Danish.

Speaker #1: Thank you so much. Thank you so much. I now hand the conference over to Ranjun to take the webcast questions. Over to you, Ranjun.

Operator 3: Thank you so much. I now hand the conference over to Ranjan to take the webcast questions. Over to you, Ranjan.

Operator: Thank you so much. I now hand the conference over to Ranjan to take the webcast questions. Over to you, Ranjan.

Rujun Jian: Thank you. I'll just read out few questions from the webcast. Sir, there's a question from Mohit Saraf, an individual investor. We have talked about acquiring adjacent lands and integrating them with our existing units in order to skip through the gestation period and expand without triggering greenfield approval cycles. Apart from 6, 7 acres adjacent land that we've acquired at Unit 1, we haven't heard anything else on that front. Some color on where we are on this. Once we are done with this exercise, how much adjacent land would be able to acquire and within what timeline?

Runjhun Jain: Thank you. I'll just read out few questions from the webcast. Sir, there's a question from Mohit Saraf, an individual investor. We have talked about acquiring adjacent lands and integrating them with our existing units in order to skip through the gestation period and expand without triggering greenfield approval cycles.

Speaker #4: Thank you. So I just read out a few questions from the webcast. Sir, we have a question from Mohit Sharaf, an individual investor. We have talked about acquiring existing lands and integrating them with our existing units.

Speaker #4: In order to skip through the gestation period, an expand without triggering green tree approval cycle. Apart from six, seven acres existing land that we've acquired at unit one, we haven't heard anything else on that front.

Runjhun Jain: Apart from 6, 7 acres adjacent land that we've acquired at Unit 1, we haven't heard anything else on that front. Some color on where we are on this. Once we are done with this exercise, how much adjacent land would be able to acquire and within what timeline?

Speaker #4: So, some color on where we are on this—once we are done with this exercise, how much existing land would we be able to acquire, and within what timeline?

Speaker #3: Yeah, sure. So again, I think the way I would respond to that is acquiring adjacent lands for expanding the site, as was acknowledged, is—I think it's a convenient strategy for the short to medium term because it helps us amalgamate land into an existing site, and it helps us get FDA approvals, environmental clearances, etc.

Saharsh Davuluri: Yeah, sure. Again, I think the way I would respond to that is acquiring adjacent lands for expanding the site, as was acknowledged, I think it's a convenient strategy for the short to medium term because it helps us amalgamate land into an existing site, and it helps us get FDA approvals, environmental clearances, et cetera, because those things are very easy to do. We are also looking at long-term plans as well, and that would involve. We currently operate 3 manufacturing sites. We would be looking at additional manufacturing sites where we would have larger headroom for capacity. Ultimately, for the organization to grow beyond the 3-year, 4-year period, we would need to have possession of more industrial land, larger pieces of land, and that is something that you should expect from the company in the near future.

Davuluri Saharsh: Yeah, sure. Again, I think the way I would respond to that is acquiring adjacent lands for expanding the site, as was acknowledged, I think it's a convenient strategy for the short to medium term because it helps us amalgamate land into an existing site, and it helps us get FDA approvals, environmental clearances, et cetera, because those things are very easy to do. We are also looking at long-term plans as well, and that would involve.

Speaker #3: Because those things are very easy to do. But we are also looking at long-term plans as well. And that would involve we currently operate three manufacturing sites.

Davuluri Saharsh: We currently operate 3 manufacturing sites. We would be looking at additional manufacturing sites where we would have larger headroom for capacity. Ultimately, for the organization to grow beyond the 3-year, 4-year period, we would need to have possession of more industrial land, larger pieces of land, and that is something that you should expect from the company in the near future. Yeah, for now, I think the acquisition of land around the site is only a short-term opportunistic move to help us ensure that next 2, 3 years we are comfortable in terms of servicing the needs of our customers.

Speaker #3: We would be looking at additional manufacturing sites where we would have larger headroom for capacity. Ultimately, for the organization to grow beyond the three-year, four-year period, we would need to have possession of more industrial land, larger pieces of land.

Speaker #3: And that is something that you should expect from the company in the near future. But yeah, for now, I think the acquisition of lands around the sites is only a short-term opportunistic move to help us ensure that next two, three years, we are comfortable in terms of servicing the needs of our customers.

Saharsh Davuluri: Yeah, for now, I think the acquisition of land around the site is only a short-term opportunistic move to help us ensure that next 2, 3 years we are comfortable in terms of servicing the needs of our customers.

Rujun Jian: It's helpful, sir. The next question comes from Gulraj Thodi, again, an individual investor. Do we feel that this margin profile is peak, particularly if we see in terms of product mix in analyzed manner? Still we have more scope of operating leverage with CMS products export? We try to attract CMS?

Runjhun Jain: It's helpful, sir. The next question comes from Gulraj Thodi, again, an individual investor. Do we feel that this margin profile is peak, particularly if we see in terms of product mix in analyzed manner? Still we have more scope of operating leverage with CMS products export? We try to attract CMS?

Speaker #4: It's helpful too. The next question comes from Gurlab Soni. Again, an individual investor. Do we feel that this margin profile is peak particularly if we see in terms of product mix in analyzed manner or still we have more scope of operating leverage with CMS products exploit?

Speaker #4: How will we try to attract CMS or VDS because it has a stamp?

Speaker #3: I think our margin profile is in a fairly comfortable space, Ranjan. And I think this is a reasonable margin to expect from this business.

Saharsh Davuluri: I think our margin profile is in a fairly comfortable space, Ranjan, and I think this is a reasonable margin to expect from this business, although there is a fairly divergent set of molecules. We see molecules which are having lower margins and higher margins. Eventually, it's the mix that will determine what the average profile is. I think you can expect the margin profiles to be healthy, as I had indicated to the previous question as well. ROC is something that maybe is going to kind of ebb and flow because right now our three-year ROC is quite healthy. If we are going to go into an expansion mode and we will have to deploy more capital for long term, we should have the ability to absorb a longer gestation period, which would mean lower ROC for a shorter period.

Davuluri Saharsh: I think our margin profile is in a fairly comfortable space, Ranjan, and I think this is a reasonable margin to expect from this business, although there is a fairly divergent set of molecules. We see molecules which are having lower margins and higher margins. Eventually, it's the mix that will determine what the average profile is. I think you can expect the margin profiles to be healthy, as I had indicated to the previous question as well.

Speaker #3: Although there is a fairly divergent set of molecules, we see molecules which have lower margins and higher margins. So eventually, it's the mix that will determine what the average profile is.

Speaker #3: I think you can expect the margin profiles to be healthy as I had indicated to the previous question as well. ROC is something that maybe is going to kind of ebb and flow because right now, our three-year ROC is quite healthy.

Davuluri Saharsh: ROC is something that maybe is going to kind of ebb and flow because right now our three-year ROC is quite healthy. If we are going to go into an expansion mode and we will have to deploy more capital for long term, we should have the ability to absorb a longer gestation period, which would mean lower ROC for a shorter period.

Speaker #3: But if we are going to go into an expansion mode and we will have to deploy more capital for long-term, we to absorb longer gestation period which would mean lower ROC for a shorter period.

Speaker #3: But I think we will have guardrails around that. So we will be mindful. But you should see maybe dip in ROC, but not necessarily a dip in margins.

Saharsh Davuluri: I think we will have guardrails around that, so we will be mindful. You should see maybe dip in ROC, but not necessarily a dip in margins. Again, I would not benchmark against Q4 or Q1. I would go back to the 25% that I had indicated earlier.

Davuluri Saharsh: I think we will have guardrails around that, so we will be mindful. You should see maybe dip in ROC, but not necessarily a dip in margins. Again, I would not benchmark against Q4 or Q1. I would go back to the 25% that I had indicated earlier.

Speaker #3: But again, I would not benchmark against Q4 or Q1. I would go back to the 25% that I had indicated earlier.

Speaker #1: Thank you so much for answering webcast questions, sir. We'll move again with the audio question. Our next question comes from the line of Peter Mallas Reddy, an individual investor.

Operator 3: Thank you so much for answering webcast questions, sir. We'll move again with the audio question. Our next question comes from the line of Tirumala Reddy, an individual investor. Please go ahead.

Operator: Thank you so much for answering webcast questions, sir. We'll move again with the audio question. Our next question comes from the line of Tirumala Reddy, an individual investor. Please go ahead.

Speaker #1: Please go ahead.

Speaker #4: Hi. Am I audible?

Tirumala Reddy: Hi. Am I audible?

Speaker #1: Yes, sir, you

Operator 3: Yes, sir, you are.

Operator: Yes, sir, you are.

Speaker #4: Yeah, yeah. I'm just subscribed manufacturing plan. So you have mentioned that if we month it will be going to be commissioned. So do we have any order book visibility from this peptide manufacturing block?

Tirumala Reddy: On this peptide manufacturing plant, you mentioned that within a month it will be going to be commissioned. Do we have any order book visibility from this peptide manufacturing block? Or do we have to go through an FDA audit inspection and then wait for commercialization?

Speaker #4: Or do we have to go

Speaker #4: for are. commercialization?

Saharsh Davuluri: I think both questions are actually independent, Tirumala Reddy. The order book, I would say we definitely have visibility. I had indicated to, I think the gentleman earlier, we have a couple of projects which are going to use this new peptide facility. We are very excited that this facility, even before commissioning, has projects that are ready for entering. That's a great place for us to be in. This facility is in our FDA-approved manufacturing site. In some ways, it is part of an FDA-approved facility. However, given that it is a new building, it's subject to FDA audit, that is really dependent on how the FDA would look at the filing when it's made. We expect that there will be an FDA inspection in the future.

Davuluri Saharsh: I think both questions are actually independent, Tirumala Reddy. The order book, I would say we definitely have visibility. I had indicated to, I think the gentleman earlier, we have a couple of projects which are going to use this new peptide facility. We are very excited that this facility, even before commissioning, has projects that are ready for entering. That's a great place for us to be in.

Speaker #3: I think both questions are actually independent. The order book, I would say we definitely have visibility. I had indicated to, I think, the gentleman earlier, we have a couple of projects which are going to use this new peptide facility.

Speaker #3: So we are very excited that this facility even before commissioning has projects that are ready for entering. So that's a great place for us to be our FDA-approved manufacturing site.

Davuluri Saharsh: This facility is in our FDA-approved manufacturing site. In some ways, it is part of an FDA-approved facility. However, given that it is a new building, it's subject to FDA audit, that is really dependent on how the FDA would look at the filing when it's made. We expect that there will be an FDA inspection in the future. We don't necessarily see that as a gating issue because the plant itself that it is located at, one, is an FDA-approved site.

Speaker #3: So in some ways, it is part of an FDA-approved facility. However, given that it is a new building, it's subject to FDA audit. But that is really dependent on how the FDA would look at the filing when it's made.

Speaker #3: So we expect that there will be an FDA inspection in the future. But we don't necessarily see that as a gating issue. Because the plant itself that it is located is one is an FDA-approved site.

Saharsh Davuluri: We don't necessarily see that as a gating issue because the plant itself that it is located at, one, is an FDA-approved site.

Speaker #4: Yeah, yeah. Thank you, sir. That's from my side.

Tirumala Reddy: Yeah. Thank you, sir. That is from my side.

Operator 3: Thank you so much. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for the closing comments. Thank you, and over to you, team.

Operator: Thank you so much. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for the closing comments. Thank you, and over to you, team.

Speaker #1: Thank you so much. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for the closing comments.

Speaker #1: Thank you, and over to your team.

Speaker #3: Thank you again. Thank you, everyone, for joining in today. I apologize for the break in between. Thank you for your interest in Neuland. And I think even if there are further questions, please do reach out to Ranjan and Meenakshi of EY.

Saharsh Davuluri: Once again, thank you everyone for joining in today. I apologize for the brief break in between. Thank you for your interest in Neuland. I think even if there are further questions, please do reach out to Ranjan and Meenakshi of EI. With that said, good evening, everyone.

Davuluri Saharsh: Once again, thank you everyone for joining in today. I apologize for the brief break in between. Thank you for your interest in Neuland. I think even if there are further questions, please do reach out to Ranjan and Meenakshi of EI. With that said, good evening, everyone.

Speaker #3: With that said, good evening, everyone.

Speaker #1: Thank you so much, sir. Ladies and gentlemen, on behalf of Neuland Laboratories Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Operator 3: Thank you so much, sir. Ladies and gentlemen, on behalf of Neuland Laboratories Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Operator: Thank you so much, sir. Ladies and gentlemen, on behalf of Neuland Laboratories Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Rujun Jian: Goodbye.

Runjhun Jain: Goodbye.

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Q1 2027 Neuland Laboratories Ltd Earnings Call

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