Q1 2027 Sai Life Sciences Ltd Earnings Call

August 7, 2026

Operator: Ladies and gentlemen, good day and welcome to the Sai Life Sciences Limited Q1 FY 2027 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.

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

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 that this conference is being recorded.

Operator: Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Devakar Pinglé from EY Investor Relations. Thank you and over to you, sir.

Speaker #1: I now hand the conference over to Mr. Devakar Pingle from E&Y Investor Relations. Thank you, and over to you, sir.

Speaker #2: Thank you so much, Sagar. Good evening to all the participants on this call. I warmly welcome you to the Q1 FY27 earnings call of Sai Life Sciences Limited.

Diwakar Pingle: Thank you so much, Sagar. Good evening to all the participants on this call. Warmly welcome you to the Q1 FY2027 earnings call of Sai Life Sciences Limited. Before we proceed on the call, let me remind you that the discussion may contain forward-looking statements that may denote known or unknown risks, uncertainties, and other factors. It must be viewed in conjunction with our business risks that could cause future result performance or achievement to differ significantly from what is expressed or implied by such forward-looking statements. Please note that we've mailed the results and the same are available on the website too. In case you've not received the same, you can write to my team at EY and we'll be happy to send the same over to you.

Speaker #2: Before we proceed on the call, let me remind you that the discussion may contain forward-looking statements that may involve unknown risks, uncertainties, and other factors.

Speaker #2: It must be viewed in conjunction with our business risks that could cause future results, performance, or achievement to differ significantly from what is expressed or implied by such forward-looking statements.

Speaker #2: Please note that we've mailed the results, and the same is available on the website too. In case you have not received them, you can write to my team at EY, and we'll be happy to send them over to you.

Speaker #2: To take us through the results and answer your questions today, we have the top management of Sai Life Sciences Limited, represented by Mr. Krishna Kanumuri, Managing Director and Chief Executive Officer, and Mr. Shivaj Chittor, Whole-time Director and Chief Financial Officer.

Diwakar Pingle: To take us through the results and answer your questions today, we have the top management of Sai Life Sciences Limited, represented by Mr. Krishna Kanumuri, Managing Director and Chief Executive Officer, and Mr. Siva Chittoor, Wholetime Director and Chief Financial Officer. We will start the call with a brief overview of the quarter gone past and then conduct the Q&A session. With that said, I'll now hand over the call to Krishna Kanumuri. Over to you, Krishna.

Speaker #2: We will start the call with a brief overview of the past quarter and then conduct the Q&A session. With that said, I'll now hand over the call to Krishna Kanumuri.

Speaker #2: Over to you, Krishna.

Speaker #3: Thank you, Devakar. Good evening, everyone, and thank you for joining us for our Q1 FY27 earnings call. We are pleased with the progress we have made in the first quarter and, importantly, with the momentum we are seeing across our business.

Krishna Kanumuri: Thank you, Devakar. Good evening, everyone, and thank you for joining us for our Q1 FY27 earnings call. We are pleased with the progress we have made in the first quarter and importantly with the momentum we are seeing across our business. Revenue from the quarter grew by 12% year-over-year, supported by growth across two businesses, particularly in the CRO, which grew by 26% year-over-year. The Q1 performance has been in line with our expectations, and we remain confident of our growth trajectory and prospects. As we have discussed in the previous earnings call, we expect a stronger H2 with planned capacity expansion going live in the H2 of the year. As we look ahead, we believe Sai is at an important point of evolution from being a strong small molecule CRO/CMO to becoming a technology-led multimodality partner with capabilities spanning discovery through commercial manufacturing.

Speaker #3: Reviews for the quarter grew by 12% year-over-year, supported by growth across two businesses, particularly in the CRO, which grew by 20% year-over-year. The Q1 performance has been in line with our expectations, and we remain confident about our growth trajectory and prospects.

Speaker #3: As we discussed in the previous earnings call, we expect a stronger H2, with planned capacity expansion going live in the second half of the year.

Speaker #3: As we look ahead, we believe Sai is at an important point of evolution, moving from being a strong, small-market CRDMO to becoming a technology-led, multimodality partner with capabilities spanning discovery through commercial manufacturing.

Krishna Kanumuri: Let me begin with the broader environment. From a customer standpoint, geopolitical uncertainty and concerns around intellectual property have made India an increasingly important part of their diversification strategies. I would say this trend has not only continued but strengthened. In the biotech environment, we have seen several large acquisitions and about 18 IPOs in the US. As investors cash out, we expect capital to flow back into funding new biotech companies. The clear message we are picking up is that these new companies will be built with even leaner in-house capabilities, which should continue to support healthy demand for our sector. Our pipeline is being built for the long haul. Through dedicated FTE models, we are building deep, durable relationships with our customers' development teams. This impacted our pipeline in three distinct ways. Molecules from biotech companies that we have supported being acquired by our pharmaceutical operators.

Speaker #3: Let me begin with the broader environment. From a customer standpoint, geopolitical uncertainty and concerns around intellectual property have made India an increasingly important part of their diversification strategies.

Speaker #3: I would say this trend has not only continued, but strengthened. In the biotech environment, we have seen several large acquisitions and about 18 IPOs in the US.

Speaker #3: As investors cash out, we expect capital to flow back into funding new biotech companies. The Q4 message we are picking up is that these new companies will be built with even leaner in-house capabilities, which should continue to support healthy demand for our sector.

Speaker #3: Our pipeline is being built for the long haul to dedicate F3 models. We are building deep global relationships with our customers and development teams. This is impacting our pipeline in three distinct ways.

Speaker #3: Molecules from biotech companies that we have supported being acquired by our pharmaceutical collaborators; molecules from acquired companies transferred to us; and finally, molecules from our F3 relationships progressing to late-stage development.

Krishna Kanumuri: Molecules from acquired companies transferred to us. Finally, molecules from our existing relationships progressing to late-stage development. Together, these three create a broad and sustainable funnel for the business. As we engage with our customers, it is clear that the complexity and range of technologies we are pursuing are broader than ever. This aligns very well with our strategy of building strong R&D capabilities across diverse range of modalities. We believe the biggest long-term opportunity is to continue building a fully integrated delivery engine from discovery through commercial manufacturing. We are seeing a clear traction with our clients beginning to engage across the full spectrum of our services. We are well-positioned to transition from integrated small molecule CRO/CMO to full-size multimodality integrated CRO/CMO. We have already made meaningful progress, and we'll continue to accelerate this build-out. Peptides are an important modality for us.

Speaker #3: Together, these three create a broad and sustainable foundation for the business. As we engage with our customers, it is clear that the complexity and range of technologies we are pursuing are broader than ever.

Speaker #3: This aligns very well with our strategy of building strong R&D capabilities across a diverse range of modalities. We believe the biggest long-term opportunity is to continue building a fully integrated delivery engine, from discovery through commercial manufacturing. With clear traction, and our clients beginning to engage across the full spectrum of our services, we are well positioned to transition from an integrated, small-market CRDMO to a full-fledged, multimodality integrated CRDMO.

Speaker #3: We have already made meaningful progress and will continue to accelerate this build-out. Peptides are an important modality for us. We are one of the largest and fastest-growing peptide teams in discovery.

Krishna Kanumuri: We have one of the largest and fastest-growing peptide teams within discovery. While GLP-1 received significant attention, there is substantial work underway in macrocyclic peptides, peptide drug conjugates, and related industry applications. Our first dedicated peptide development lab is coming online shortly for a top-tier pharma company. We are also expanding the scope of our peptide center of excellence to support both discovery and development teams, which again, will deliver higher quantities for clinical trials. In addition, we plan to break through a peptide manufacturing facility at our new greenfield site near Hyderabad, which is expected to be operational in 2028. We are close to opening our bioconjugate center of excellence, which will support both discovery and development teams in the synthesis of payloads, linkers, and conjugation across antibodies, peptides, BOTOX, and oligonucleotides. There is increased need to support our development programs with greater speed and flexibility.

Speaker #3: While 021s receive significant attention, their substantial work underwent microcycling peptides, peptide drug conjugates, and radiochemistry applications. Our first dedicated peptide development lab is coming online shortly for a top-tier pharma company.

Speaker #3: We're also expanding the scope of our peptide center of excellence to support both discovery and development teams, with the ability to deliver pilot quantities for clinical trials.

Speaker #3: In addition, we plan to break through in the peptide manufacturing industry at our new greenfield site near Hyderabad, which is expected to be operating in 2028.

Speaker #3: We are close to opening our XTC Center of Excellence, which will support both discovery and development teams in the synthesis of payloads, linkers, and conjugation across antibodies, peptides, PROTACs, and oligonucleotides.

Speaker #3: We have an increased need to support our development programs with greater speed and flexibility. We are working on building new capacity specifically designed for early- to mid-stage deliveries, and it will be an important part of our expansion of our new greenfield manufacturing site.

Krishna Kanumuri: We are working on building new capacity specifically designed for early to mid-stage programs, and will be an important part of expansion by our new greenfield manufacturing site. Bioconjugation is another area we are entering. While we are still about six months away from being operationally ready, we are seeing significant interest from our pharma partners. There is a clear demand for integrated offering that can deliver both trusted human API and drug product with speed, helping us to accelerate development timelines. Scientific excellence remains the heart of this evolution. For the past few years, we have deliberately invested in strengthening our scientific capabilities, infrastructure, and talent across the organization. Recent successes have been reinforcement belief that we are on the right trajectory. For example, we recently developed capability in ADC bioconjugation characterization and analysis and recently published our work in high impact peer-reviewed scientific journal.

Speaker #3: Combination is another area we're entering, while we are still about six months away from being operationally ready. We are seeing significant interest from our pharma partners, with a clear demand for an integrated offering that can deliver both personal human APIs and drug product with speed, helping customers accelerate development timelines.

Speaker #3: Planetary Excellence remains at the heart of this evolution. Over the past few years, we have deliberately invested in strengthening our scientific capabilities and infrastructure talent across organizations.

Speaker #3: Recent successes have reinforced the belief that we are on the right trajectory. For example, we advanced our capabilities in ADV bioconjugation characterization and analysis, and recently published our work in high-impact, peer-reviewed scientific journals.

Krishna Kanumuri: During the quarter, we also published one paper with AstraZeneca on experimental approach determining reaction kinetics early in development. Objective is to generate better process understanding early in the life cycle and ultimately supports smoother scale-up or technology transfer. We believe these are important indicators of the scientific depth we are building at Sai and not only in terms of services we provide to customers, but also are able to develop and contribute new approaches to solving complex scientific and technical problems. Technology remains central to the proposition we offer customers. We are making meaningful progress in advanced process technologies. Recently, we successfully scaled up a late-stage GMP intermediate for large pharmaceutical customer at our manufacturing facility using flow chemistry. We are currently considering downstream operations, including extraction, distillation, and crystallization with a longer-term objective to developing more flow application in our commercial manufacturing.

Speaker #3: During the quarter, we also published Beyond Paper with AstraZeneca on our experimental approach to determining gastroenteritis early in development, with objectives to generate better process understanding early in the lifecycle and ultimately support smoother scale-up of technology transfer.

Speaker #3: We believe these are important indicators of the scientific depth we are building at Sai, not only in terms of the services we provide to customers, but also in our ability to develop and contribute new approaches to solving complex scientific and technical problems.

Speaker #3: Technology remains central to this population we offer customers. We are making meaningful progress in advanced process technologies. Recently, we successfully scaled up a late-stage GMP intermittent large pharmaceutical customer at our manufacturing facility using flow chemistry.

Speaker #3: We accelerated continuous downstream operations, including extraction, distillation, and crystallization, with a longer-term objective of developing more flow applications in our commercial manufacturing. These capabilities are particularly relevant as we see increasing complexity in molecules entering our development and manufacturing pipelines.

Krishna Kanumuri: These capabilities are particularly relevant as we see increasing complexity in molecules entering our development and manufacturing pipeline. Talent development is an important part of this journey. We have kick-started a campus strategy program led by a former board member. The objective is to establish Sai as an employer of choice for life science talent. We are putting in place a more structured approach to how we attract, develop, and retain scientific and technical talent. We are establishing structured management development programs for first-time experienced managers based on external technical and behavioral assessments, making them more targeted and outcome-oriented. We have also increased the intensity of Sai Academy, our strategic capability building program designed to create common scientific, engineering, and operational standards across the organization. We believe building this depth of talent and capability is essential as we take on more complex programs and move into new modalities.

Speaker #3: Talent development is an important part of this journey. We have kickstarted a campus strategy program whereby former board members have established Sai as an employer of choice for life-saving talent.

Speaker #3: We are putting in place a more structured approach to how we attract, develop, and retain scientific and technical talent. We are establishing structured management development programs with first-time and experienced managers, based on external technical and behavioral assessments, making them more targeted and outcome-oriented.

Speaker #3: We are also increasing the intensity of Sai Academy, our strategic capability-building program designed to create common scientific, technical, and operational standards across organizations.

Speaker #3: We believe building this depth of talent and capability is essential as we take on more complex programs and move into new modalities. In conclusion, there's a clear evolution in what large pharmaceutical companies are looking for from their outsourcing partners.

Krishna Kanumuri: In conclusion, there is a clear evolution of what large pharmaceutical companies are looking for from their outsourcing partners, expecting to work strong scientifically led partners who can take great ownership of discovery and development programs rather than simply executing individual pieces of work. We believe that the combination of our technology-based scientific talent and culture is a key reason why large pharmaceutical companies are increasingly bringing significant work to Sai through strategic engagements. These engagements will create a healthy and sustained pipeline over the next few years. With that, let me hand over to our CFO Siva to take you through the financial performance and progress we are making in the business.

Speaker #3: Expectations of strong, scientifically led partners who can take great ownership of discovery and development programs, rather than simply execute individual pieces of work. We believe that a combination of our technology-based scientific talent and culture is a key reason why large pharmaceutical companies are increasingly bringing significant work to Sai through their strategic engagements.

Speaker #3: These engagements create a healthy and sustained pipeline over multiple years. With that, let me hand over to our CFO, Shiva, to take you through the finance, performance, and progress we're making in the business.

Speaker #2: Thanks, Krishna. Good evening, good morning, everyone. Let me start with the financial performance for the process and provide commentary on a few businesses. For the quarter ended Q1 FY27, total revenue stood at ₹553 crore, representing a year-on-year increase of about 12% compared to ₹496 crore in the quarter last year.

Siva Chittor: Thanks, Krishna. Good evening, good morning, everyone. Let me start with the financial performance for the quarter and provide commentary on the key businesses. For the quarter ended Q1 FY 2027, total revenues stood at INR 553 crores, representing a year-on-year increase of about 12% compared to INR 496 crores in the quarter last year. The CDMO business contributed approximately 60% of our revenues and the CRO business the remaining 40%. On a Y-o-Y basis, CRO revenues increased by about 26%, while the CDMO revenues grew by around 6%. Our balance sheet remains healthy, and we continue to maintain the financial flexibility required to invest behind the opportunities we see across the business. We will continue to balance investments in future growth with disciplined capital allocation and returns. In the discovery business, the discovery chemistry services continue to scale.

Speaker #2: The CDMO business contributed approximately 60% of our revenues, and the CRO business made up the remaining 40%. On a year-over-year basis, CRO revenues increased by about 26%, while CDMO revenues grew by around 6%.

Speaker #2: Our balance sheet remains healthy, and we continue to maintain the financial flexibility required to invest behind the opportunities we see across the business. We will continue to balance investments in future growth with disciplined capital allocation and returns.

Speaker #2: In the discovery business, the discovery chemistry services continue to scale. During the quarter, we successfully converted a pilot collaboration with a large pharmaceutical company into a long-term, high-volume discovery chemistry partnership.

Siva Chittor: During the quarter, we successfully converted a pilot collaboration with a large pharmaceutical company into a long-term, high-volume discovery chemistry partnership. This is exactly the kind of progression we were looking for, starting with a focused engagement, demonstrating value, and expanding the relationship over time. We have also completed a large-scale DMPK data generation project for a biotech customer and have continued to build capacity to support our growing base of large pharmaceutical customers. A few years ago, we made a deliberate decision to move beyond being a low-value chemistry services provider and invest significantly in biology and DMPK while continuing to expand our discovery chemistry capabilities. Those investments in infrastructure, technology, and people are now translating into integrated service delivery for approximately 65% of our customers, today, primarily biotech customers. We are now seeing the same model gaining traction with large pharma.

Speaker #2: This is exactly the kind of progression we were looking for—starting with a focused engagement, demonstrating value, and expanding the relationship over time. We've also completed a large-scale DFDK data generation project for a biotech customer and have continued to build capacity to support our growing base of large pharmaceutical customers.

Speaker #2: A few years ago, we made a deliberate decision to move beyond being a low-value chemistry services provider and invest significantly in biology and DMPK.

Speaker #2: While continuing to expand our discovery chemistry capabilities through investments in infrastructure, technology, and people, we are now translating these into integrated service delivery for approximately 65% of our customers.

Speaker #2: Today, our primary customers are in biotech. We are now seeing the same model gaining traction with large pharma. We are already in discussions with several large pharmaceutical companies and hope to transition at least two large pharmaceutical customers to an integrated model this year.

Siva Chittor: We are already in discussions with several large pharmaceutical companies and hope to transition at least two large pharmaceutical customers to an integrated model this year. Moving now to the CMC business. The underlying health of the CMC business continues to be strong, with 33 active commercial molecules and 13 molecules in late phase. As Krishna mentioned in his opening remarks, dedicated FTE development contracts are expected to be a key differentiator for Sai Life Sciences in augmenting our pipeline of late-phase and commercial molecules. Over the last 15 months, we have added six late-phase molecules to our pipeline, five of which have come through large pharma clients with whom we have ongoing FTE engagements. One such collaboration with a top-tier market pharma company, which began at a small scale, has now expanded into a sizable dedicated FTE contract.

Speaker #2: Moving now to the CMC business, the underlying health of the CMC business continues to be strong, with 33 active commercial molecules and protein molecules in late phase.

Speaker #2: As Krishna mentioned in his opening remarks, dedicated FTE development contracts are expected to be a key differentiator for Sai Life Sciences in augmenting our pipeline of late-phase and commercial molecules.

Speaker #2: Over the last 15 months, we have added six late-phase molecules to our pipeline, five of which have come through large pharma clients with whom we have ongoing FTE engagements.

Speaker #2: One such collaboration with the software market pharma company, which began at a small scale, has now expanded into a sizable, dedicated FTE contract. With this customer, our engagement now extends end to end.

Siva Chittor: With this customer, our engagement now extends end to end, truly from discovery to commercial, with active programs across the life cycle from early discovery to late-stage manufacturing. We've also begun negotiations for another large pharma FTE engagement on the process development side, which we expect to close by the end of Q2, with work expected to commence from Q3. With respect to the phase III pipeline, one of our customers received an approval during FY 2026. Two more have regulatory milestones during this financial year, and one is expected in Q2 of FY 2028. An equally important indicator for the quality of our customer relationship is the level of repeat business we generate. We continue to add new customers, but returning customers accounted for over 90% of our revenue in fiscal 2025 and 2026.

Speaker #2: Truly, from discovery to commercial, we have active programs across the life cycle, from early discovery to late-phase manufacturing. We've also been in negotiations for another large pharma FTE engagement on the process development side, which we expect to close by the end of Q2, with work expected to commence from Q3.

Speaker #2: With respect to the phase three pipeline, one of our customers received an approval during Q1 '26. Two more have regulatory milestones during this financial year, and one is expected in Q2 of '28.

Speaker #2: An equally important indicator of the quality of our customer relationships is the level of repeat business we generate. We continue to add new customers, but returning customers accounted for over 90% of our revenue in fiscal '25 and '26.

Siva Chittor: We believe this is a strong reflection of customer satisfaction and the value we are creating for customers over the course of their programs. It also reflects our ability to deepen engagement with clients over time. We are also increasingly seeing evidence of our ability to support customers through the full life cycle. In calendar 2025, Sai contributed to five FDA-approved molecules, meaning we were part of either discovery or development of commercial manufacturing for the product. Over the past five years, we have supported 17 launches, demonstrating our ability to supply launch quantities and play a meaningful role in commercialization. I am also pleased to report that we secured the prestigious EcoVadis platinum rating 2026, placing us among the top 1% of the companies assessed worldwide for sustainability performance. Overall, we believe this quarter reflects continued progress across both the businesses and our longer-term strategic priorities.

Speaker #2: We believe this is a strong reflection of customer satisfaction and the value we are creating for customers over the course of their programs. It also reflects our ability to deepen engagement with clients over time.

Speaker #2: We're also increasingly seeing evidence of our ability to support customers through the full life cycle. In calendar 2025, Sai contributed to five FTA-approved molecules, meaning we were part—you know, we were part of either discovery, development, or commercial manufacturing for the product.

Speaker #2: Over the past five years, we have supported 17 launches, demonstrating our ability to supply launch quantities and play a meaningful role in commercialization. I am also pleased to report that we secured the prestigious EcoVadis Platinum rating for 2026, placing us among the top 1% of companies assessed worldwide for sustainability performance.

Speaker #2: Overall, we believe the quarter reflects continued progress across both the businesses and our longer-term strategic priorities. Notwithstanding the inherent lumpiness in the business, the long-term opportunities for the CRDMO sector remain robust, and our integrated model with strong pharma relationships and technology investment positions us well for sustained growth.

Siva Chittor: Last but not least, inherent lumpiness in the business, the long-term opportunity for the CRDMO sector remains robust, and our integrated model with strong pharma relationships and technology investments position us well for sustained growth. We remain confident in our ability to sustain our longer-term revenue growth guidance of 15% to 20% and the EBITDA range of 28% to 30%. With that, we'll be happy to take your questions.

Speaker #2: We remain confident in our ability to sustain our longer-term revenue growth guidance of 15% to 20% and the EBITDA range of 28% to 30%.

Speaker #2: With that, we'll be happy to take your questions.

Speaker #1: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and then one on their touch-tone phone.

Operator: Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then one on their touchtone phone. 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. Again, to register for a question, please press star and then one. Your first question comes from the line of Binay Singh with Morgan Stanley. Please go ahead.

Speaker #1: 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.

Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, please press star, then one.

Speaker #1: Your first question comes from the line of Vinay Singh with Morgan Stanley. Please go ahead.

Binay Singh: Hi, team. Thanks for the opportunity. In the opening comments, we talked about strengthening our relationship with big pharma. We talked about integrated CRDMO, long-term discovery contracts, more FTEs, and you also made a comment on intellectual property. Do you think these things have accelerated this calendar year, or it is more a continuation of what you were seeing last year also was similar, or there is some sort of a change in environment where we are highlighting these more in this calendar year?

Speaker #3: Hi team, thanks for the opportunity. In the opening comments, we talked about, you know, strengthening our relationship with big pharma. We talked about integrated CRDMO, long-term discovery contracts, more FTEs, and you also made a comment on intellectual property.

Speaker #3: Do you think these things have accelerated this calendar year, or is it more a continuation of what you were seeing last year also—a similar trend—or is there some sort of a change in environment where we are highlighting these more in this calendar year?

Speaker #2: So, Vinay, I think we are, looking at the progression of business, I think if you look at what is really happening, customers are trying to build sustained relationships over the next 5 to 10 years.

Siva Chittor: Binay, I think we are looking at the progression of business. I think if you look at what is really happening, customers are trying to build such a relationship for the next five, 10 years. You will see a gradual increase in these relationships in terms of one service at a time and starting small and growing big.

Krishna Kanumuri: Binay, I think we are looking at the progression of business. I think if you look at what is really happening, customers are trying to build such a relationship for the next five, 10 years. You will see a gradual increase in these relationships in terms of one service at a time and starting small and growing big.

Speaker #2: So, you will see a gradual increase in these relationships in terms of one service at a time, starting small and growing big. So, I think we are at a very early part of this journey in terms of expanding these relationships.

Krishna Kanumuri: I think we are very early part of this journey in terms of signing these relationships. We think that these risks all have potential to expand significantly over the next five, 10 years. I think they are all in the early stage of infusion, but we are seeing acceleration in terms of the scale and scope of service we offer.

Speaker #2: So we think that these risks all have potential to expand significantly over the next five to ten years. So, I think they're all in the early stage of evolution, but we are seeing acceleration in terms of the scale and scope of the services we offer.

Speaker #2: I think, just to add, Vinay, I think, you know, when we started, for example, with the FTE relationship that you pointed out, right, we started this 15 months ago.

Siva Chittor: I think just to add, Binay, I think when we started, for example, on the FTE relationship that you pointed, we started this 15 months ago. We said this is starting small. We know this is very different. This is how China built some of the larger CDMOs, and we said we are seeing this for the first time in India. If you look at where we are today, we are today, we are seeing one customer already on an end-to-end basis. We are talking about molecules that have transitioned. It is not just early phase development, it is late phase development. As Krishna mentioned, we are talking about molecules that are being acquired by pharma that is being pushed into our SE development so that a robust development process can be developed and then scaled up.

Speaker #2: We said this is starting small. We know this is very different. This is how China built some of the largest CDMOs. And we said we are seeing this for the first time in India.

Speaker #2: But if you look at where we are today—you know, we are already staying with one customer on an end-to-end basis.

Speaker #2: We are talking about molecules that have transitioned, so it's not just early-phase development. It's late-phase development, as Krishna mentioned. We are talking about molecules that are being acquired by pharma, that are being pushed into our FTE development so that a robust development process can be developed and then scaled up.

Speaker #2: So I've talked about six molecules in phase three over the last 15 months come to this process. So there is a progression happening. I think the broader sentiments are there.

Siva Chittor: I've talked about six molecules in phase III over the last 15 months come through this process. There is a progression happening. I think the broader sentiments are there. It remains same, as we kind of get into this and start working with the customers, acceleration with respect to size is what we are seeing. That's the sentiment that we are expecting.

Speaker #2: It's the same, but as we kind of get into this and start working with the customers, acceleration with respect to Sai is what we are seeing.

Speaker #2: That's the sentiment that we're experiencing.

Krishna Kanumuri: Binay, to give you a little more context. If you look at this as a WuXi model, the customers are doing discovery, integrated discovery services. They're doing all the SE development services and commercial manufacturing. What India has seen as a first service is discovery chemistry services, then tech transfer and late-stage commercial manufacturing. What we are seeing now is the middle part, which is FTE collaboration, where basically we here develop all the relationships, starting to migrate here. We're also starting early phases here that discovery program going to integrated programs. It just shows that this is a very early kind of opportunity. I think these have a long way to go in terms of scaling.

Speaker #3: So, Vinay, to give you a little more context, right—if you look at, let's say, the WuXi model, the customers are doing integrated discovery services.

Speaker #3: Then they’re doing all the FTE development services and commercial manufacturing. But India is seen, as a first phase, as discovery chemical services and then tech transfer at late-stage commercial manufacturing.

Speaker #3: But what we are seeing now is the middle part, which is FTE collaboration, where basically Wuji adopts all the relationships starting to migrate here.

Speaker #3: And we're also starting in the early phases of that discovery program as we go into integrated programs. So it just shows that this is a very early kind of opportunity.

Speaker #3: I think these still have a long way to go in terms of scale.

Binay Singh: Thanks for that detailed answer, team. My second question is, earlier in the call, I think in the last call, Krishna had commented that how in financial year 2027, the H2 will be stronger than the H1. If you see in the past also, leaving aside financial year 2026, that is generally the trend, 40-60 between H1, H2. This year you called it out as more because of more capacity coming this year, that the skew of H2 will be a little heavier than H1. Is that the reason you had called it out?

Speaker #1: Thanks for that detailed answer, team. My second question is: earlier in the call, I think in the last call, Krishna had commented that in financial year '27, the second half will be stronger than the first half.

Speaker #1: But if you see in the past also, leaving aside financial year '26, that is generally the trend—you know, 40:60 between first half, second half.

Speaker #1: So this year, you called it out as more because of more capacity coming this year, that this queue of second half will be a little heavier than first half.

Speaker #1: Is that the reason you had called it out?

Siva Chittor: That is true. Plus also fiscal 2026 for us was a little out of the ordinary in terms of how our numbers panned out. It was roughly 48, 52, if I remember the number right, Binay. This was, fiscal 2026 for us was slightly, I would say, very different. It has always been historically 40/60 kind of a period, fiscal 2026 kind of was almost flat hence we just, for the last call, just try to make sure that we kind of give advance intimation on how we are seeing our next year.

Speaker #2: That, that is true. Plus, also, fiscal '26 for us is a little out of the ordinary in terms of how our numbers stand out.

Speaker #2: We're roughly 48-52, if I remember the number right, Vinay. And this was fiscal '26 for us—was slightly, you know, I would say very different.

Speaker #2: It is always been historically 40, 60 kind of a period, but fiscal 26 kind of was almost flat and hence we just. Of the last call just kind of make ake sure that we kind of give advance intimation on how we are seeing our next year.

Binay Singh: Great. Thanks, team. I'll come back in the queue.

Speaker #1: Great, great. Thanks, team. I'll come back in the queue.

Speaker #2: Thank you.

Siva Chittor: Thank you.

Speaker #1: Thank you. Participants, if you wish to register for a question, please press star, then one. Your next question comes from MHRK with GM Financial.

Operator: Thank you. Participants, if you wish to register for a question, please press star and then one. Your next question comes from Amey Chalke with JM Financial. Please go ahead.

Speaker #1: Please go ahead.

Speaker #3: Yeah, thank you for taking my question. And congrats to the management on the good numbers. I have a first question on CRO. As mentioned in the opening remarks and also in the PPT, we have added one large customer on the CRO side in chemistry for this quarter.

Amey Chalke: Yeah, thank you for taking my question, and congrats to the management on good numbers. I have first question on CRO. We have said in the opening remark also in PPT that we have added one large customer in the CRO side on chemistry in this quarter. How big is this relationship could be for us in terms of number of projects or revenue, if any quantification you can provide. Thank you.

Speaker #3: What has worked in our favor to convert these relationships, and also, how big could this relationship be for us in terms of number of projects or revenue?

Speaker #3: If any quantification you can provide, thank you.

Krishna Kanumuri: Generally, we don't quantify what we're doing with each customer. It's just not one. We've sampled a couple this quarter. There's multiple risks we are actually converting, it's just not one. Some of them are converting more linearly. Some of them are basically going more integrated. We have more than one customer we expanded collaboration for this quarter.

Speaker #2: Generally, we don't quantify what we're doing with each customer, but it's just not one. We converted a couple this quarter, so I think that tends to—with multiple risks—we are actually converting, not just on one.

Speaker #2: We just, some of them are converting more linearly. Some of them are basically going more integrated. But we have more than one customer where we expanded collaboration for this quarter.

Amey Chalke: Sir, your voice is not bit clear, what I heard is our integrated platform, it is what helped us to convert this customer. Is that right?

Speaker #3: Sure. Your voice is not a bit clear, but what I heard is that our integrated platform, it is what helped us to convert these customers.

Speaker #3: Is that right, or?

Speaker #2: No, no, I'm just saying we're seeing both growth in terms of scale and in certain lines of service, like, let's say, discovery chemistry.

Krishna Kanumuri: No, I'm just saying we are seeing both growth in terms of scale, in terms of certain lines of service, like I said, discovery chemistry. Some customers are also expanding more gradually in terms of integrated services as well. This growth is not contributed by one customer. There are multiple customers with this who are potentially relevant as well.

Speaker #2: But some customers are also expanding more gradually in terms of integrated services as well. And this growth is not counted by just one customer—there are multiple customers with risk who are potentially scalable.

Amey Chalke: Got it. The second question I have on the four commercial contracts which will be added this year. I think three of them have been added in Q1. Is it possible for us to give some clarity in terms of modalities where these four products would be? Also whether we would be a primary supplier or the secondary supplier for these projects. Have these projects already been commercialized, or these are newly commercialized products? Thank you.

Speaker #3: Got it. And the second question I have is on the four commercial contracts which are, which will be added this year. I think three of them have been added in the first quarter.

Speaker #3: Is it possible for us to give some clarity in terms of the modalities where these four products would be? And also, whether we would be a primary supplier or a secondary supplier for these projects?

Speaker #3: And have these projects already been commercialized, or are these newly commercialized products? Thank you.

Siva Chittor: These are the four that we will be working on this year, as we had mentioned during the last call, will be commercial supplies. Primary, secondary, as we've discussed before, I think we probably are primary in two out of the three, but this is more anecdotal than what I can tell you at this point.

Speaker #2: So, three of the four that we will be working on this year, as he had mentioned during the last call, will be commercial supplies.

Speaker #2: Primary, secondary, as you know, as we've discussed before, right, they are—you know, I think we probably are primary in two out of the three, but this is more anecdotal than what I can tell you at this point in time.

Amey Chalke: At least if you can provide the revenue per product potential, would it be in line with some of our top commercial products? Will it be sizably below or over and above that? If you can give color on that.

Speaker #3: Or at least, if you can provide the revenue per product potential, would it be in line with some of our top commercial products? Or will it be sizably below, or over and above that?

Speaker #3: If you can, give color on that.

Speaker #2: I think what we mentioned in the last call, Amir, was that we said this would be a decently sized product. You know, looking at our size and revenue, we said this is a decently sized product.

Siva Chittor: I think what we had mentioned in the last call, Ane, was that we said this would be a decently sized product. Looking at our size and revenue, we said this is a decently sized product. Three of them would be decently sized products, and one of them will be a lower volume product. It's what we had proposed. One we said will be a lower volume product. That's what we had mentioned last year, last quarter. We'll stay with the same comment.

Speaker #2: The three of them would be decently sized products, and one of them will be a lower volume product. It's what we had—the first one we said will be a lower volume product.

Speaker #2: That's what we had, so we'll stay with the same comment.

Amey Chalke: By size, you mean value or volume for all three?

Speaker #3: So, by size, do you mean value or volume for all three?

Amey Chalke: By size, you mean value or volume for all three?

Siva Chittor: Value. Volume does not matter. Value is what I'm talking about.

Speaker #2: Value.

Speaker #3: Volume does not matter, right? No value is what I'm talking about.

Speaker #2: No.

Siva Chittor: Got it.

Amey Chalke: Got it.

Siva Chittor: I'm talking value with respect to how our revenues are. I think it's a decent size value.

Speaker #3: I'm talking value, you know, with respect to how our revenues are. I think it's a decent-sized volume. Sure, sure. Thank you so much.

Amey Chalke: Sure. Thank you so much. One more question I have on the formulation capabilities where we are entering. What kind of formulation capability would that be? I think we have taken drug products, so is it a biologic and the fill and finish facility which we expect to construct here, or is it something else? What visibility we have in the pipeline for these projects?

Speaker #3: And, one more question I have on the formulation capabilities, where we are entering. What would be the—like, what kind of formulation capabilities would that be?

Speaker #3: I think we have written drug product. So, is it a biologic? And the fill-and-finish facility, which we expect to construct here?

Speaker #3: Or is it something else? And what visibility do we have in the pipeline for these projects?

Krishna Kanumuri: As of now, we are building the small molecule, primarily oral solids of different forms up to phase I and phase II. We have significant interest from multiple of our large pharmaceutical partners already who are working with on the chemistry side. We are able to support them on their early clinical formulation. We have significant interest for that piece.

Speaker #2: As of now, we're building the small molecule, small molecule primarily oral solids, different forms up to phase one and phase two. we have, significant interest interest from multiple of our large pharma partners already, who are working with our chemistry side.

Speaker #2: We have to support them on their early clinical formulation, so we have significant interest in that piece.

Amey Chalke: Typically we have not seen CDMO entering into oral solid formulation capabilities. What's the thought process here? The reason being is the profitability in these segments are typically on a lower side. Is it something different for these projects?

Speaker #3: So, typically we have not seen CDMOs entering into oral solid formulation capabilities. So, what's the thought process here? The reason being is the profitability in these segments is typically on the lower side.

Speaker #3: So, is it something different for these projects?

Krishna Kanumuri: Look, right now we're only talking about clinical up to phase II supplies. We're not talking about commercial supply at this time. This was driven by our discussion with customers where the need is, and their need is very specific to supplying China Plus One, where they're getting all the connectivity related, and this fits in with the China Plus One strategy of our partners at this point. This only works well when you have existing relationships on the development side, not standalone.

Speaker #2: Look, right now we're only talking about clinical up to phase two suppliers. We're not talking about commercial supplies at this time. And this was written based on our discussion with customers, where the need is.

Speaker #2: And their need is very specific to supplying China plus one, where they're getting a lot of clinical material ready to use. And this system, with the China plus one strategy, our partners at this point—

Speaker #2: And, and this only works well when you have existing relationships on the development side, not standalone.

Amey Chalke: Sure, sir. Thank you so much. I will join back. Thank you.

Speaker #3: Sure, sir. Thank you so much. I will join that. Thank you.

Speaker #4: Thank you. A reminder to all participants: If you wish to register for a question, please press star, then one. Your next question comes from the line of Akshay from AK Investment.

Operator: Thank you. A reminder to all the participants, if you wish to register for a question, please press star and then one. Your next question comes from the line of Akshay from AK Investment. Please go ahead.

Speaker #4: Please go ahead.

[Company Representative] (AK Investment): Hi, sir. Thanks for the opportunity. My first question is about the therapeutics. Why is the split in the revenue? What is the therapy-wise currently split or exposure for different therapeutic makes in the revenue? Also in the pipeline as well, which are the therapeutics areas are we focusing on?

Akshay Kaila: Hi, sir. Thanks for the opportunity. My first question is about the therapeutics. Why is the split in the revenue? What is the therapy-wise currently split or exposure for different therapeutic makes in the revenue? Also in the pipeline as well, which are the therapeutics areas are we focusing on?

Speaker #5: Hi, sir. Thanks for the opportunity. So, my first question is about the therapeutic-wise split in the revenue. What is the current therapy-wise split or exposure for different therapeutic mixes in the revenue?

Speaker #5: And also, in the pipeline as well, which therapeutic areas are we focusing on?

Siva Chittor: I think we've given the therapeutic distribution for the last financial year. I think that's part of the investor deck. We do it on an annual basis, on a quarterly basis, it does not make any sense. It's available in the deck that we have uploaded on the investor presentation. We've given you a detailed presentation on that one. If I remember, it's slide number 21 on the investor presentation.

Speaker #2: So, I think we've given the therapeutic distribution for the last financial year. I think that's part of the investor deck. We do it on an annual basis and on a quarterly basis, if that's not making any sense.

Speaker #2: So, it's available in the deck that we have uploaded for the investor presentation. We've given you a detailed presentation on that one. This is, if I remember, slide number 21 in the investor presentation.

[Company Representative] (AK Investment): Okay, sir. For the pipeline in the product as well, that would be more or less similar in that line also?

Akshay Kaila: Okay, sir. For the pipeline in the product as well, that would be more or less similar in that line also?

Speaker #5: Okay, sir. And for the pipeline in the product as well, that would be more or less similar in that line also.

Speaker #2: I'm sorry?

Siva Chittor: I'm sorry? Can you repeat your question, please?

Speaker #5: Can you repeat your question, please?

Speaker #4: Yeah, yeah, definitely. Sir, also for the products in the pipeline as well, that split will be more or less similar in that category as well?

[Company Representative] (AK Investment): Yeah. Definitely. Sir, for the products in pipeline as well, that split will be more or less similar in that category as well?

Akshay Kaila: Yeah. Definitely. Sir, for the products in pipeline as well, that split will be more or less similar in that category as well?

Siva Chittor: It's difficult to say, right? It's about what our pharma customers are looking to innovate on. Finally, we will be driven by what the innovative pipeline looks like. This is just a reflection of where we are today or how our revenues were in the last year. I see from our books perspective, that's really what we have reflected there.

Speaker #2: It's difficult to say, right? It's about what our pharma customers are looking to innovate on. Finally, we will be driven by what the innovator pipeline looks like.

Speaker #2: But this is just a reflection of where we are today, or how our revenues were in the last year, at least from our books' perspective.

Speaker #2: That's really what we have reflected there.

Speaker #4: Okay, sir. My second question is: What is the capex guidance for FY27 and FY28?

[Company Representative] (AK Investment): Okay, sir. My second question is, what is the CapEx guidance for FY2027 and FY2028?

Akshay Kaila: Okay, sir. My second question is, what is the CapEx guidance for FY2027 and FY2028?

Siva Chittor: Sir, what is that for 2027 and 2028, sir?

Speaker #2: So, what is that for '27 and '28, sir?

[Company Representative] (AK Investment): CapEx, capital expenditure guidance for FY2027 and 2028.

Akshay Kaila: CapEx, capital expenditure guidance for FY2027 and 2028.

Speaker #4: Capex, capital expenditure guidance for FY27 and FY28.

Siva Chittor: We have given a FY2027 CapEx guidance of INR 1,100 to 1,300 crore. That's still planned. We haven't provided a guidance on fiscal 2028. We will come back to you with the guidance at an appropriate time.

Speaker #2: So, we have given an effective 2027 Capex guidance of ₹1,100 to ₹1,300 crore. That still stands. We haven't provided a guidance on fiscal 2028.

Speaker #2: We will come back to you with guidance at an appropriate time.

Speaker #4: Okay, sir. Fair enough, fair enough. Thank you so much, and all the best.

[Company Representative] (AK Investment): Okay, sir. Fair enough. Thank you so much, and all the best.

Akshay Kaila: Okay, sir. Fair enough. Thank you so much, and all the best.

Speaker #2: Thank you.

Siva Chittor: Thank you.

Speaker #4: Thank you. Your next question comes from the line of Sajal Kapoor with Antifragile Thinking. Please go ahead.

Operator: Thank you. The next question comes from the line of Sajal Kapoor with Antifragile Thinking. Please go ahead.

Sajal Kapoor: Yeah, thank you. Hi, Krishna and Siva. Congratulations. What stands out over the last year is not just the growth, but the deepening big pharma relationships and Sai getting involved earlier in the development cycle. Very well done. Two questions. You mentioned that five of the six late-phase molecules added over the last 15 months came through large pharma FT relationships. Does getting involved through these dedicated development teams materially increase Sai's probability of retaining those molecules for commercial manufacturing versus programs where you enter later through an RFP or tech transfer? Thank you.

Speaker #5: Yes, thank you. Hi, Krishnan. Siva, congratulations. What stands out over the last year is not just the growth, but the deepening Big Pharma relationships and Sai getting involved earlier in the development cycle.

Speaker #5: So, very well done. Two questions. You mentioned that five of the six late-phase molecules added over the last 15 months came through large pharma FT relationships.

Speaker #5: Does getting involved through these dedicated development teams materially increase the size or probability of retaining those molecules for commercial manufacturing, versus programs where you enter later through an RFP or tech transfer?

Speaker #5: Thank you.

Siva Chittor: The first intent of every pharma company is to leave the program with us for commercial. I think it's only in a case where there must be maybe a mismatch in capacity where we would reroute. The primary intent, a stated intent, is leave it with Sai all the way through the life cycle of the product.

Speaker #2: The first intent of every pharma company is to lead the program because of the commercial. So I think it's only in cases where there may be a mismatch in capacity that we will reroute.

Speaker #2: But the primary intent, as stated, is to leave it with Sai all the way through the life cycle of the product.

Speaker #5: Sure. And you also said around 65% of discovery customers now use integrated services, and you hope to transition at least two large pharma customers to that model this year.

Sajal Kapoor: Sure. You also said around 65% of discovery customers now use integrated services, and you hope to transition at least two large pharma customers to that model this year. As the large pharma moves from single service engagements to integrated programs, do you see a meaningful change in revenue per customer and relationship duration? In other words, getting more wallet share per relationship.

Speaker #5: So, as large pharma moves from single-service engagements to integrated programs, do you see a meaningful change in revenue per customer and relationship duration—in other words, getting more wallet share per relationship?

Siva Chittor: Yes. That's the reason we also brought up the point on while we look at our growth, right? Last year we grew 30%, but 90%, more than 90% of our revenue came from our existing customers. Whatever we've done over the last few years, it's now that you are working with 19 of the top 25 pharma companies, there is a tail end with respect to how India outsourcing is panning out. The objective is to go find out how much wallet share can you increase and what kind of services. You want to be careful when we do the wallet share increase. One, we want to increase commercial, but we also want to increase the spectrum of services that we go. We are able to then transition work across.

Speaker #2: Okay. Yes. Yes. So that's the reason we also brought up the point on why we look at our growth, right? Last year, we grew 30%, but more than 90% of our revenue came from our existing customers.

Speaker #2: So whatever we've done over the last few years is kind of, you know, now that you are working with 19 of the top 25 pharma companies, there is a tailwind with respect to how India outsourcing is standing out.

Speaker #2: So the objective is to go find out how much wallet share you can increase, and what kind of services. So, we want to be careful when we pursue the wallet share increase.

Speaker #2: One, we want to increase commercial, but we also want to increase the spectrum of services that we offer. We also then kind of, you know, are able to transition and work across.

Speaker #2: We are able to kind of, you know, be present in every part of their services. And it also helps us de-risk our overall revenue concentration, even within the same customer.

Siva Chittor: We are able to be present in every part of their services, it also helps us de-risk our overall revenue concentration, even within the same customer.

Sajal Kapoor: Can I ask one more, please?

Speaker #4: No. Can I—can I ask one more, please?

Speaker #2: Sure.

Siva Chittor: Sure.

Speaker #4: Yeah. Thank you. So,

Sajal Kapoor: Yeah. Thank you. You are entering a much heavier investment cycle with up to INR 1,300 crore of CapEx, which includes a greenfield for peptides. Given the greater customer and pipeline visibility you now have, what internal return threshold do you use before committing this capital, and what would make you slow down or defer an investment? Thank you.

Speaker #5: You are entering a much heavier investment cycle with up to ₹1,300 crore of capex, which includes a greenfield for peptides. Given the greater customer and pipeline visibility you now have, what internal return threshold do you use before committing this capital?

Speaker #5: And what would make you slow down or defer an investment? Thank you.

Siva Chittor: Typically, we have certain internal hurdle rates, which will be generally higher than the ROCE, ROE from a company perspective targets that we put. That will be slightly higher than that. We kind of use that as the model. Then we kind of stress test it based on what we are seeing. We evaluate capital expenditure as we kind of put things in. There are certain expenditures that you are putting in because you have to build a capability, and you are expecting certain amount of revenue based on certain assumptions once you build that capability. In those cases, it may be slightly difficult to defer unless there are severe business circumstances. If you're doing a capacity addition, we evaluate the capacity addition as we kind of run through our CapEx.

Speaker #2: So typically, see, we have certain internal hurdle rates, which will be fairly higher than the ROIC or ROE, from a company perspective, targets that we put.

Speaker #2: That would be slightly higher than that, so we kind of use that as the model, and then we kind of stress-test this based on what we have seen.

Speaker #2: We evaluate capital expenditure as we put things in. There are certain expenditures that you are putting in because you have to build a capability.

Speaker #2: And you were expecting a certain amount of revenue based on certain assumptions. Once you build that capability, in those cases, it may be slightly difficult to defer unless there are, you know, severe business circumstances.

Speaker #2: But if you're doing a capacity addition, we evaluate the capacity addition as we kind of run through our capex. And there are times in history where, you know, even in Sai, where we've demonstrated that when we have seen capacity addition requirements slow down, we slow down the capex.

Siva Chittor: There are times in history where, even in Sai, where we've demonstrated that when we have seen capacity addition requirement slows down, we slow down the CapEx, and that's the only way to kind of control and be modular and be as just in time as possible, as is needed for the business.

Speaker #2: And that's the only way to control, be modular, and be as just-in-time as possible, as is needed for the business.

Speaker #5: No, that's very helpful. Thank you so much. We wish you all the very best.

Sajal Kapoor: No, that's very helpful. Thank you so much. We wish you all the very best.

Speaker #2: Thank you.

Siva Chittor: Thank you.

Speaker #4: Thank you. Participants, you may press star, then one to ask a question. Your next question comes from the line of Siddharth Meghandi with CWC.

Operator: Thank you. Participants, you may press star and then one to ask a question. Your next question comes from the line of Siddharth Nigandi with CWC. Please go ahead.

Speaker #4: Please go ahead.

Siddharth Nigandi: Hi. Thank you for the opportunity. One of the things that you've mentioned in previous presentations is to share updates on AI initiatives that you've been taking, and this time you've mentioned part of high throughput experimentation platform. Just wanted to understand if that was basically the AI initiative that you were talking about, or if you could give us some color on that. In terms of the capacity expansion that is there, just to check on whether that is in line as what we'd guided earlier, or do we see that timeline moving in any way? Yeah, those were my two questions.

Siddharth Negandhi: Hi. Thank you for the opportunity. One of the things that you've mentioned in previous presentations is to share updates on AI initiatives that you've been taking, and this time you've mentioned part of high throughput experimentation platform. Just wanted to understand if that was basically the AI initiative that you were talking about, or if you could give us some color on that. In terms of the capacity expansion that is there, just to check on whether that is in line as what we'd guided earlier, or do we see that timeline moving in any way? Yeah, those were my two questions.

Speaker #3: Hi. Thank you for the opportunity. One of the things that you've mentioned in previous presentations is to share updates on AI initiatives that you've been taking.

Speaker #3: And this time you've mentioned a high-throughput experimentation platform. I just wanted to understand if that was basically the AI initiative that you were talking about, or if you could give us some color on that.

Speaker #3: and in terms of the capacity expansion that is there, just, just to check on whether that is in line in, as, as what we'd guided earlier, or do we see that, timeline moving any in any way?

Speaker #3: Yeah, those were my two questions.

Siva Chittor: On the capacity addition, I think Becky's mentioned we are largely on schedule. You could see one to two months. We can't see the immediate capacity need. We talked about a few things at the end of last quarter or when we began this financial year. We talked about a discovery capacity that we were going to build that was going to come on stream in Q1. The facility has come on stream in Q1, and that facility is actually sold out at this point in time. What we thought we will probably need a year to fill in or a year and a half to fill in has already been filled in. On the capacity in Vizag, we had talked about building 2 production blocks of 225,000 each, so 450,000. The first production block will come on stream.

Speaker #2: So on this capacity addition, I think we've, in the best we've mentioned, we are largely on schedule. You could see one, two months, you know, but essentially the immediate capacity needs.

Speaker #2: So, we talked about a few things at the end of last quarter, or when we began the financial year. We talked about a discovery capacity that we were going to build, that is going to come on stream in Q1.

Speaker #2: The facility has come on stream in Q1. and that facility is on is, is actually sold out at this point in time. what we thought we will probably need a year to com you know, fill in or a year and a half to fill in has already been filled in.

Speaker #2: On the capacity—these are, we had talked about building two production blocks of 225 KL each, totaling 450 KL. The first production block will come on stream; we had talked about and planned getting it completed and ready for operation in batch two or Q3.

Siva Chittor: We had talked about plants getting completed and ready for operation in H2 or Q3. The plan currently remains the same, and we are on track for that. Broadly, other capabilities that we talked about, we will bring a Formulation capacity into operation this year. Krishna just mentioned we are 6 months away, so it still will be in the current fiscal year. Broadly, we are on track for this. On the first question on AI is slightly different. What HT is more high-throughput experimentation that allows you to do multiple scenarios and generate more data points on the same experiment. The AI initiative that we talked about is slightly different. This more focuses on how you can eliminate wastage in terms of non-value adds that today a chemist or an operator at the plant are doing.

Speaker #2: The planned current — the plan currently remains the same, and we are on track for that. I think broadly, other capabilities that we talked about — we will bring a formulation capacity into operation this year.

Speaker #2: And Krishna just mentioned we're six months away, so it still will be in the current fiscal year. But broadly, we are on track for this.

Speaker #2: On the first question on AI, I think AI is slightly different. I think what the HPE is more high throughput experimentation that kind of allows you to kind of do, you know, multiple you know, scenarios and kind of generate more data points on the same experiment.

Speaker #2: The AI initiative that we talked about is slightly different. This one focuses more on how you can eliminate wastage in terms of non-value-adds that, today, a chemist or an operator at the plant is doing.

Siva Chittor: It is necessary, but it's not the core value add that we can substitute with either some help from AI, some help from document generation. Also working on seeing how can you take data from scientific literature, provide help on an online as you look through something. That's the thing that we are working on. We talked about it in detail last time. Working through this, we thought we'll give you another update maybe before the end of the year because we are building certain things and as we see progress, we will provide an update on that.

Speaker #2: It is necessary, but it's not the core value-add that we can substitute with either, you know, some help from AI, some help from document generation. Also, we are working on seeing how we can take data from, you know, scientific literature to kind of help provide help, you know, online as you look through something.

Speaker #2: So, that's the thing that we are working on. We talked about it in detail last time. Working through this, we thought we'd give you another update, you know, maybe before the end of the year because we are building certain things.

Speaker #2: And I think, as we see progress, we will provide an update on that.

Siddharth Nigandi: Got it. On the peptide one, just if I may add in one more question. On the peptide one, you mentioned about GLP-1s as well as PDCs. You're building capabilities in both or should we look at this as GLP-1s followed by PDCs? How should one think of your peptide capabilities?

Siddharth Negandhi: Got it. On the peptide one, just if I may add in one more question. On the peptide one, you mentioned about GLP-1s as well as PDCs. You're building capabilities in both or should we look at this as GLP-1s followed by PDCs? How should one think of your peptide capabilities?

Speaker #3: Got it, got it. And on the pesticides one, just if I may add in one more question—on the peptide one, you mentioned about GLP-1s as well as PDCs.

Speaker #3: So, are you building capabilities in both, or should we look at this as GLP-1s followed by PDCs? And how should one think of your peptide capabilities?

Siva Chittor: No, the comment we made is that peptides go beyond GLP-1. Peptide as a modality has expanded. When you talk peptides, you only talk about GLP-1. Now peptides, look at this year, three blockbusters of peptides which have been launched. You have the Merck CPX-393, which is basically called

Speaker #2: On the comment, if we may, is that peptides go beyond GLP-1. The peptide is a modality expander, right? So, without peptides, you may talk about GLP-1.

Speaker #2: But now peptides, look at this year, there are three blocks. First, the peptides which have been launched—we have the Merck PCSK9, which is basically for cholesterol.

Speaker #2: You have the, you have basically the J&J peptide. What is the peptide which is launched basically for immunology? So you'll see peptide is a modality going up dramatically with blockbuster potential.

Siddharth Negandhi: Thank and all the best.

Siddharth Nigandi: My question regarding the number of molecules that we have in the late stage and the potential revenue out of that. What will be the completion period of the molecules that we have in the stage, let's say, 1 or 2?

Speaker #2: It goes beyond GLP-1. And you're seeing PDCs as a big part of the pipeline going forward as well. So what we're saying is we are not solely focused on just the GLP-1 space.

Speaker #2: We are taking a very big position due to support peptides across the therapeutic window. That's the comment we're making, so that we're not just taking a single modality.

Speaker #2: We're really building broad-based capability in peptides and working on a significant technology platform for peptides.

Speaker #3: Yeah. And this will be across discovery, development, and at some point in time, commercial manufacturing, correct?

Speaker #2: Absolutely.

Speaker #3: Got it. Thank you, and all the best.

Speaker #2: Thank you.

Speaker #1: Thank you. The next question comes from Karan Gupta with Aseet C. Mehta Investment. Please go ahead.

Speaker #4: Yeah. Hi. My question is regarding the number of molecules that we have in the latest stage and the potential revenue out of that. And what will be the completion period of the molecules that we have in this stage?

Siddharth Negandhi: My question regarding the number of molecules that we have in the late stage and the potential revenue out of that. What will be the completion period of the molecules that we have in the stage, let's say, 1 or 2?

Speaker #4: Let's say 102.

Siddharth Nigandi: We mentioned this before, that the number of exits at phase I and phase II is fairly huge. Given that while we work on a large set of molecule and we've actually given data as a lot more than 150, 160 molecules, we believe we should treat them as projects just given the amount of failures that happen at that stage. That's why we track only late stage and commercial and present this as data, because the probability of success on the commercial side is higher. With respect to the late stage commercialization and potential, I can answer data with respect to commercialization as we know. As you will appreciate it, this is a material non-public information for the pharma companies that are disclosing this information.

Speaker #2: So, we mentioned this before, but we, you know, the number of exits at Phase 1 and Phase 2 is fairly huge. Given that, while we work on a large set of molecules—and we've actually given data as a mass, more than 150, 160 molecules—we believe we should treat them as projects, just given the amount of failures that happen at that stage.

Siddharth Negandhi: We mentioned this before, that the number of exits at phase I and phase II is fairly huge. Given that while we work on a large set of molecule and we've actually given data as a lot more than 150, 160 molecules, we believe we should treat them as projects just given the amount of failures that happen at that stage. That's why we track only late stage and commercial and present this as data, because the probability of success on the commercial side is higher. With respect to the late stage commercialization and potential, I can answer data with respect to commercialization as we know. As you will appreciate it, this is a material non-public information for the pharma companies that are disclosing this information.

Speaker #2: That's why we track only weight-based and commercial and percentages data because the probability of success on the commercial side is, is higher. with respect to the late stage, you know, commercialization and potential, I can answer data with respect to commercialization as we know as you will be, as you will appreciate it, this is a material nonpublic information for the pharma companies that are disclosing this information.

Siva Chittor: We also pick up information from publicly available sources, and we presented data for the four molecules that we are aware of. We put that as part of I actually talked about it in my speech. Potential is very difficult to say. It's still in phase III. Assuming pharma, you probably should have a decent size. Otherwise pharma would not take up a molecule and go to phase III. That's broadly what we think. I'm not able to give you more specification on this.

Speaker #2: So, we also pick up information from publicly available sources. And we presented data for the four molecules that we are aware of. And we put that as part of—you know, I actually talked about it in my speech.

Speaker #2: potential is kind of very difficult to say. It's we're still in phase three. you know, we you know, assuming pharma is probably should have a decent size is how, you know, otherwise pharma would not pick up a molecule and go to phase three.

Speaker #2: That's broadly what we think. I'm not able to give you more specific numbers.

Speaker #4: Okay, okay. So one question on the growth guidance of 15 to 20 percent. Just wanted to have some clarity on this. Basically, the number that you said—15 to 20 percent—how we have come to that 15 to 20 percent only, as we have a huge pipeline of late-stage one and two molecules.

Siddharth Nigandi: Okay. One question on the growth guidance of 15% to 20%. I just wanted to have some clarity on this. Basically, the number that you said, 15% to 20%, how we come to that 15% to 20% only, as we have a huge pipeline of late stage 1 and 2 molecules. Why we are constrained on 15% to 20%, or is it the conservative guidance that you are giving? Sequentially, Q1 and Q2, Q4 and Q1, we have slowed down the growth as compared to the previous quarters. Just wanted to have some clarity on the guidance side.

Siddharth Negandhi: Okay. One question on the growth guidance of 15% to 20%. I just wanted to have some clarity on this. Basically, the number that you said, 15% to 20%, how we come to that 15% to 20% only, as we have a huge pipeline of late stage 1 and 2 molecules. Why we are constrained on 15% to 20%, or is it the conservative guidance that you are giving? Sequentially, Q1 and Q2, Q4 and Q1, we have slowed down the growth as compared to the previous quarters. Just wanted to have some clarity on the guidance side.

Speaker #4: Why are we constrained to 15 to 20 percent, or is this the conservative guidance that you are giving? Because sequentially, you know, in Q1 and Q2, Q4 and Q1, we have slowed down the growth as compared to previous quarters.

Speaker #4: So, I just wanted to have some clarity on the guidance side.

Siddharth Nigandi: First of all, one is we keep saying this, our guidance is overall, given how the industry has its own lumpiness in terms of how the business functions. Look at the industry in terms of direction over the. We've given a three to five-year guidance of this 15% to 20%. That's really what we've stated. That said, we're not going to constrain business for growth, right? Look at the last year growth while you talked about Q4. If you look at our last year growth, we grew close to 30% on an annualized basis. Your shipments and dates of shipments and when your order came and when you need to deliver will decide at what those revenues are. Personally, would like to receive the business on a longer-term basis. That's when you will actually get to see the trend.

Speaker #2: So, first of all, I think, you know, one is we keep saying this. I think our guidance is over— I think we've given how the industry has its own lumpiness in terms of how the business functions.

Siva Chittor: First of all, one is we keep saying this, our guidance is overall, given how the industry has its own lumpiness in terms of how the business functions. Look at the industry in terms of direction over the. We've given a three to five-year guidance of this 15% to 20%. That's really what we've stated. That said, we're not going to constrain business for growth, right? Look at the last year growth while you talked about Q4. If you look at our last year growth, we grew close to 30% on an annualized basis. Your shipments and dates of shipments and when your order came and when you need to deliver will decide at what those revenues are. Personally, would like to receive the business on a longer-term basis. That's when you will actually get to see the trend.

Speaker #2: Look at the industry in terms of direction over the—you know, we've given a three- to five-year guidance of this 15% to 20%.

Speaker #2: That's really what we've stated. Now, that said, you know, we're not going to constrain business for growth, right? Look at the last year's growth—while you talked growth, we grew close to 30% on an annualized basis.

Speaker #2: So, your shipments, the dates of shipments, when your order came, and when you need to deliver will decide a quarter's revenue. So, I would personally, you know, you know, like you to see the business on a longer-term basis.

Speaker #2: That's when you will actually get to see the trends. We demonstrated last year—we demonstrated a 30% growth. Our mid-term growth guidance is 15% to 20%.

Siva Chittor: We demonstrated last year, we demonstrated a 30% growth. Our mid-term growth guidance is 15% to 20%. It's just have I put all my bets on it and every last dollar to get the 15%, 20%. Obviously, we will also want to kind of make sure we will meet and beat guidances that we give to the market. That's the broader thought process. I will not be able to elaborate more on this one, but what we look at is from a direction perspective and what we are trying to build is our way of looking at it.

Speaker #2: Is this have I put all my bets on it and every last dollar to get the 15, 20 percent? Obviously, we will also wanna kind of make sure we will meet and greet guidance that we give to the market.

Speaker #2: So that's the broader thought process. I will not be able to elaborate more on this one currently, but broadly, look at it from a directional perspective and what we are trying to do.

Speaker #2: It’s our, you know, our way of looking at it.

Speaker #4: Okay. Okay. Thank you.

Siddharth Nigandi: Okay. Thank you.

Siddharth Negandhi: Okay. Thank you.

Speaker #1: Thank you. A reminder to all the participants: if you wish to register for a question, please press star, then one. The next question comes from Rajath Baldeva with Kizuna Wealth.

Operator: Thank you. A reminder to all the participants, if you wish to register for a question, please press star and then one. Your next question comes from Rajat Baldeva with Kizuna Wealth. Please go ahead.

Speaker #1: Please go ahead.

Speaker #2: Okay. Hi, sir. Thanks for giving me the opportunity. My question is on the...

Rajat Baldeva: Hi, sir. Thanks for giving the opportunity. My question on the-

Rajat Baldewa: Hi, sir. Thanks for giving the opportunity. My question on the-

Operator: Sorry to interrupt. Rajat sir, your audio is slightly muffled. If you are using any other mode, I request you to use the handset, please.

Speaker #1: Sorry to interrupt, Rajath Sir. Your audio is slightly muffled. If you're using any other mode, I request you to use the handset, please.

Speaker #2: Am I audible now?

Rajat Baldeva: Am I audible?

Rajat Baldewa: Am I audible?

Operator: Yes, sir. This is better.

Speaker #1: Yes, sir. This is better.

Speaker #2: Yeah, thank you for giving me the opportunity. My question is on the CDMO side. In this quarter, we have been growing 6% year-over-year. So, can you share some outlook for after '27 and after '28, given that CDMO has some lumpiness in the business?

Rajat Baldeva: Yeah. Thank you for giving me the opportunity. My question on the CDMO side, in this quarter, we have been growing 6% YOY. Can you throw some outlook for FY27 and FY28, given that CDMO is a lumpiness of the business?

Rajat Baldewa: Yeah. Thank you for giving me the opportunity. My question on the CDMO side, in this quarter, we have been growing 6% YOY. Can you throw some outlook for FY27 and FY28, given that CDMO is a lumpiness of the business?

Siva Chittor: We don't split our growth guidance. We've given you a 15%, 20% growth guidance over a mix term. As you've rightly pointed out, business is lumpy based on how the deliveries and orders, purchase orders come in. We've also stated that our H2, the second half of this financial year will be better than the first half. We've given more capacity is also coming on stream by the end Q2 or early Q3.

Speaker #2: So, we don't split our growth guidance. You give me a 15–20% growth guidance over the mid-term. And, as you rightly pointed out, business is lumpy based on how the deliveries and purchase orders come in.

Speaker #2: And we've also stated that our H2, the second half of this financial year, will be better than the first half. We've given that more capacity is also coming on stream.

Speaker #2: by the end of Q2 or early Q3.

Rajat Baldeva: Okay, sir. Just a last question. Just to confirm, we are in line with our capacity building to reach 1,150 kiloliter by FY27, right?

Rajat Baldewa: Okay, sir. Just a last question. Just to confirm, we are in line with our capacity building to reach 1,150 kiloliter by FY27, right?

Speaker #3: Thank you, sir. And sir, just one last question—just to confirm, we are on track with our capacity building to reach 1,150 per liter after 2027, right?

Speaker #2: Yes.

Siva Chittor: Yes.

Rajat Baldeva: Okay, sir. Thank you very much.

Rajat Baldewa: Okay, sir. Thank you very much.

Speaker #3: Okay, sir. Okay. Great, sir. Thank you very much.

Speaker #1: Thank you. The next question comes from the line of Thirumala Reddy, an individual investor. Please go ahead.

Operator: Thank you. The next question comes from the line of Thirumala Reddy, an individual investor. Please go ahead.

Speaker #2: Yeah, thanks for taking the question. Hope I heard everything. Yes. Yes.

Thirumala Reddy: Yeah. Thanks for taking the question. Hope I am audible. Hello.

Operator: Yes, sir. Please go ahead.

Speaker #1: Yes, sir. Please go ahead.

Thirumala Reddy: Is there any particular reason for not entering into monoclonal antibodies or any space?

Speaker #2: So, is there any particular reason for not entering into monoclonal antibodies or NDAs today? Please repeat your question; it was not clear. So, I think we will set that as a time, and we will discuss the strategy at a later point.

Thirumala Reddy: Is there any particular reason for not entering into monoclonal antibodies or any space?

Thirumala Reddy: Can you please repeat your question? My voice is not clear.

Siva Chittor: Can you please repeat your question? My voice is not clear. I think we will touch that at the time when we will announce. We will discuss this probably at a later point.

Krishna Kanumuri: I think we will touch that at the time when we will announce. We will discuss this probably at a later point. Okay. Thanks a lot. What is the contribution of this fermentation capacities building in the current CapEx wave?

Thirumala Reddy: Okay. Thanks a lot. What is the contribution of this fermentation capacities building in the current CapEx wave?

Speaker #3: Okay, thank you all. And what is the contribution of this fermentation capacities building in the current capex?

Siva Chittor: We don't have the fermentation at all.

Speaker #2: We don't do fermentation at all.

Thirumala Reddy: Okay. Thank you. Thanks for your time.

Speaker #3: Okay. Okay. Thanks a lot. That's from me.

Speaker #1: Thank you. Participants, you may press star then one to ask a question. The next question comes from Siddharth Negandhi with CWC. Please go ahead.

Operator: Thank you. Participants, you may press star and then one to ask a question. The next question comes from Siddharth Nigandi with CWC. Please go ahead.

Operator: Thank you. Participants, you may press star and then one to ask a question. The next question comes from Siddharth Negandi with CWC. Please go ahead.

Siddharth Nigandi: Hi. Thanks for the follow-up. Just, sir, if you could give us some color on how the two offshore facilities in Boston and Manchester are shaping up. Currently, we are obviously seeing the difference in the standalone and consolidated revenue reflecting from one of those facilities. If you could give us some color around how are those shaping up, and is that commercially adding to our revenue?

Siddharth Negandhi: Hi. Thanks for the follow-up. Just, sir, if you could give us some color on how the two offshore facilities in Boston and Manchester are shaping up. Currently, we are obviously seeing the difference in the standalone and consolidated revenue reflecting from one of those facilities. If you could give us some color around how are those shaping up, and is that commercially adding to our revenue?

Speaker #4: Hi, thanks for the follow-up. Just, sir, if you could give us some color on how the two offshore facilities in Boston and Manchester are shaping up.

Speaker #4: Currently, we are obviously seeing, the difference in the m the standalone and consolidated revenue reflecting from one, one of those facilities. But if you could give us some color around, you know, how, how are those shaping up and is that, is that, commercially adding to, to our revenues?

Speaker #2: So I think, yes, I think the way to look at Boston and Manchester, they're independent at this time. I think we mentioned this. I think if you look at the, you know, the Boston P&L, that you would see it's a better attribute to the business.

Siva Chittor: I think yes. I think the way to look at Boston and Manchester, they're independently at this time. I think we've mentioned this. I think if you look at the Boston P&L that you would see, it's a good additive to the business. The way we look at both Boston and Manchester are satellite centers that help us bring larger business back to India. For example, on the CMC site, on the discovery site, there have been many instances. One of the reasons we've been consistently growing on the discovery side, and one big reason is that we are able to actually cultivate customers even before they actually have a need for a discovery service or for Medicinal Chemistry or DMPK at a later stage. We are talking to these customers much before they would need to seek out an Indian operation.

Speaker #2: And the way we look at both Boston and Manchester are as satellite centers that help us kind of bring larger business back to India. For example, from the CMC site, on the CMC, on the discovery site, there have been many instances.

Speaker #2: One of the reasons we've been, consistently growing on the on the discovery side and one big reason is that we're able to, actually cultivate customers even before they actually have a need for a discovery service or for NetChem or DMPK at a later stage.

Speaker #2: We are actually looking at, you know, we are talking to these customers much before they would need to seek out an Indian operation. So, by the time you actually help them do a direct target identification, sitting at their backyard, you’ve probably developed relationships.

Siva Chittor: By the time you actually help them do a target package identification sitting at their backyard, you have probably developed relationships, they understand your business, they understand how your teams function. I think that gives them that comfort to get business, that's borne out in the overall numbers. We established Boston in somewhere around the end of 2020, assuming 2021, a little bit of wash out for COVID. If you look at the discovery revenue, it's probably in the last four or five years, it's grown at a CAGR of closer on 30% to 35%. On Manchester, I think the skill sets and the requirements are different. What we brought in is a set of individuals who've worked in large pharma, look at things very differently. I think the way today we look at these two teams function together, they bring in very complementary skill sets.

Speaker #2: They understand your business. They understand how your teams function. I think that kind of gives them that comfort to get business. And that's kind of shown up in the overall numbers, right?

Speaker #2: You know, we established Boston in somewhere around the end of 2020, assuming 2021 is a little bit of washout for COVID and if you look at the discovery revenue, you know, it's, it's probably in the last four, five years, it's, you know, grown at a figure of closer on 30, 35 percent.

Speaker #2: On Manchester, I think the skill set and the requirements are different. What we've brought in is a set of individuals who have worked in large pharma and look at things very differently.

Speaker #2: I think the way today we look at these two teams is that they function together, but then they bring in very, very complementary skill sets. And both the teams have kind of helped us to be where we are, be it in terms of getting our relationships based, in terms of deliveries and scale-ups.

Siva Chittor: Both the teams helped us to be where we are, be it in terms of getting our relationships, be it in terms of deliveries and scale-ups. That's how we look at all of the India and the US teams for their respective businesses as one single team, and they work in tandem.

Speaker #2: That's the that's how we, we look at all of the India and the and the US teams for the respective businesses is one single team and they kind of work in tandem.

Siddharth Nigandi: Got it. Thank you.

Siddharth Negandhi: Got it. Thank you.

Speaker #4: Got it. Thank you.

Speaker #1: Thank you. Participants, if you have a question, please press star then one now. The next question comes from the line of Yasir Lakrawala with M3.

Operator: Thank you. Participants, to ask a question, please press star and one now. The next question comes from the line of Yasir Lakdawala with M3. Please go ahead.

Speaker #1: Please go ahead.

Yasir Lakdawala: Hi, Krishna. Just to get some qualitative understanding, I think when we say that we were about between 4% to 5% of our revenues from new modalities, is it mostly on the CRO side, or are we doing anything on the development and the commercial aspect?

Yasser Lakdawala: Hi, Krishna. Just to get some qualitative understanding, I think when we say that we were about between 4% to 5% of our revenues from new modalities, is it mostly on the CRO side, or are we doing anything on the development and the commercial aspect?

Speaker #4: Hi, Krishna. I, you know, I, just, just to sort of get some qualitative sort of understanding. You know, I think when we say that we were at about, you know, between 4 to 5 percent of our revenues from new modalities, is it mostly on the CRO side, or is it like, is there a—are we doing anything on the development and the commercial aspect?

Siva Chittor: We are not doing it on the commercial side, but we are doing on all the development and the discovery side.

Speaker #3: We're not doing it on the commercial side, but we are doing it on all the development and discovery sides.

Yasir Lakdawala: Development discovery side. Fair enough. Typically, when you have some biotech customers, if they're acquired and you're in different phases, be it phase I, phase II, by a big pharma company. Historically, have we seen those orders post-acquisition? Does that project necessarily stay with us? What sort of percentage of those projects stay with you? Do the big pharmas have their own sort of CDMO networks, and they tend to shift those projects? If you could just help us understand that.

Yasser Lakdawala: Development discovery side. Fair enough. Typically, when you have some biotech customers, if they're acquired and you're in different phases, be it phase I, phase II, by a big pharma company. Historically, have we seen those orders post-acquisition? Does that project necessarily stay with us? What sort of percentage of those projects stay with you? Do the big pharmas have their own sort of CDMO networks, and they tend to shift those projects? If you could just help us understand that.

Speaker #4: Development, discovery side, right? fair enough. And, you know, you know, typically, you know, when we have like some biotech customers, you know, and if they're re acquired and, you know, in different phases, be it like a phase one, phase two by a big pharma company, you know, historically have we seen, those orders you know, post-acquisition, does that project necessarily stay with us?

Speaker #4: Like what sort of percentage of, you know, those projects stay with you? do they the big farmers have their own sort of CDMO networks and they tend to sort of, you know, shift those projects?

Speaker #4: If you could just help us understand that.

Siva Chittor: I think Krishna actually addressed this as part of his opening remarks. I think one of the biggest advantages that we have is we work with 19 out of the 25 large pharma companies.

Speaker #2: I think Krishna actually addressed this as part of his opening remarks, right? I think so.

Speaker #4: Uh-huh.

Speaker #2: One of the biggest advantages that we have is we work with 19 out of the 25 large pharma companies. Our pipeline today, as Krishna mentioned, is growing in three different ways, and we're building our CDMO pipeline specifically.

Siva Chittor: Our pipeline today, as Krishna mentioned, is growing on three different ways as we're building our CDMO pipeline specifically. We have products that we are seeing our biotech customers acquired by pharma companies that we work with that continue to remain in our funnel.

Speaker #2: You have, you know, products that are— you know, we are seeing our biotech customers acquired by pharma companies that we work with, that continue to remain our partners.

Siva Chittor: We are seeing pharma companies putting something on the FTE development deals, which then progress into our late-stage funnel. We are also seeing situations where pharma acquires a biotech company, with whom we've not worked before, but then the product gets transferred to us, primarily because we are one of their preferred vendors. That's how we work. Finally, just given the pharma relationship, this is what happens.

Speaker #2: We are seeing, you know, pharma companies putting something on the SC development deals, which then progress into our late-stage partners. We are also seeing, you know, situations where pharma acquires the biotech company.

Speaker #2: with whom we have not worked before, but then the product gets transferred to us, you know, primarily because we are one of their preferred vendors.

Speaker #2: So that's how we work. Finally, just given the pharma relationship, this is what happens.

Speaker #4: Sure, sure. Anyway, thanks—thanks a lot. And, well, I wish you guys all the best. Thanks, thanks for that.

Yasir Lakdawala: Sure. Anyway, thanks a lot, and I wish you guys all the best. Thanks a lot.

Yasser Lakdawala: Sure. Anyway, thanks a lot, and I wish you guys all the best. Thanks a lot.

Speaker #2: Thank you.

Siva Chittor: Thank you.

Yasir Lakdawala: Yeah.

Yasser Lakdawala: Yeah.

Speaker #4: Yeah.

Speaker #1: Thanks. Thank you. The next question comes from Doval with Jefferies. Please go ahead.

Operator: Thanks. Thank you. The next question comes from Dhawal with Jefferies. Please go ahead.

[Company Representative] (Jefferies): Yeah. Hi, sir. Thank you for taking my question. I wanted to get few more details on the peptide program. Can you inform us, how many different projects are we working on within the peptide space, and how many different customers are there? The facility which is coming up in 2028, that is the pilot scale facility that you are talking about or is it something different?

Dhawal Khut: Yeah. Hi, sir. Thank you for taking my question. I wanted to get few more details on the peptide program. Can you inform us, how many different projects are we working on within the peptide space, and how many different customers are there? The facility which is coming up in 2028, that is the pilot scale facility that you are talking about or is it something different?

Speaker #5: Yeah. Hi, sir. Thank you for taking my question. I wanted to get a few more details under the peptide program. So, can you inform us, like, how many different projects are we working on within the peptide space?

Speaker #5: And how many different customers are there? And the facility which is coming up in 2028, that is the pilot-scale facility that you are talking about?

Speaker #5: Or is it, something different?

Siva Chittor: Well, at this point, the majority of the work we are doing is in the early-stage discovery space, multiple customers, almost every significant number of large pharma customers, as well as biotech. The development lab, we have one lab system which is dedicated to a pharma company, and they're going much broader. Basically right now, which is coming online, which will do GMP pilot supplies for clinical, and it will support both development, GMP supply. What we're building out for 2028 is a true commercial capacity as well. Clinical capacity is coming online sooner, and commercial capacity is coming online in 2028.

Speaker #2: Doval, in this one, the majority of the work we are doing is in the early-stage discovery space, with multiple customers—almost every significant number of large pharma customers as well as on the biotech side.

Speaker #2: The development lab—we have one lab that has come up with a dedicated pharma company. And there's one much broader facility right now, which is coming online, that will do GMP pilot supplies for chemicals.

Speaker #2: And there is support for both development and GMP supplies, as well as discovery support. What we're building out for 2028 is the true commercial device process.

Speaker #2: So chemical capacity is coming online sooner, and commercial devices are coming online in 2028.

Speaker #5: Okay. And, just so I understand, you know, these are still the initial years, but based on your experience, what kind of work are customers willing to give on the manufacturing side, or for peptides?

[Company Representative] (Jefferies): Okay. Just, I understand these are still initial years, but based on your experience, what kind of work are customers willing to give on the manufacturing side for peptides? Are they willing to give out the manufacturing of longer chains, like 8, 10, 12 amino acid kind of chain, or is it restricted to maybe dipeptides or chain length of four, five amino acids? What's your initial sense? Is it going to be something that they want to start with smaller chains and gradually are very much willing to take it up into the higher value chain work?

Dhawal Khut: Okay. Just, I understand these are still initial years, but based on your experience, what kind of work are customers willing to give on the manufacturing side for peptides? Are they willing to give out the manufacturing of longer chains, like 8, 10, 12 amino acid kind of chain, or is it restricted to maybe dipeptides or chain length of four, five amino acids? What's your initial sense? Is it going to be something that they want to start with smaller chains and gradually are very much willing to take it up into the higher value chain work?

Speaker #5: Are they willing to give out, you know, the manufacturing of longer chains, like 8, 10, 12 amino acid kind of chain? Or is it restricted to maybe dipeptides or, you know, chain length of four, five amino acids?

Speaker #5: What's your initial sense? Or is it going to be, you know, something that they want to start with smaller chains and gradually are very much willing to take it up into the higher value chain work?

Speaker #2: So, I think, depending on who you ask, right? Right now, because we're doing development and technology, people are doing longer chains with us.

Siva Chittor: I think depending on who you ask, right? Right now, because we're doing development technology, people are doing longer chains with us. If we're commercial, probably people are starting with smaller chains, which are already mature pipelines. We are seeing customers working with longer chains right now rather than small chains.

Speaker #2: With the commercial, probably people are starting with smaller chains, which are already mature pipelines. But we are seeing customers working with longer chains right now, rather than smaller chains.

Speaker #5: Okay. And just one last question on conjugation. Do you think the next steps on the conjugation side will be to establish a pilot-scale facility and then, if everything goes well, go deeper on a larger scale?

[Company Representative] (Jefferies): Okay. Just last one on conjugation. Do you think the next steps on the conjugation side will be to establish a pilot-scale facility, and then if everything goes well, go deeper on a larger scale? Are those the next steps if the program continues to do well on the discovery side?

Dhawal Khut: Okay. Just last one on conjugation. Do you think the next steps on the conjugation side will be to establish a pilot-scale facility, and then if everything goes well, go deeper on a larger scale? Are those the next steps if the program continues to do well on the discovery side?

Speaker #5: Are those the next steps if the program continues to do well on the, you know, discovery side?

Siva Chittor: We already are building a pilot facility. We do have more plans there, which we'll give you more details once we have a clearer perspective on the plans we have in terms of that area. We already have a significant footprint we're building, which spans both discovery and development for all ADCs.

Speaker #2: We already are building a pilot-scale facility. But we do have more plans ahead, which are very much more detailed once we have clearer specifics on the plans we have in terms of that area.

Speaker #2: But we already have a significant footprint we're building, which spans both discovery and development of all XCPs.

Speaker #5: Oh, okay. And by next year, what would be the total spend that we would have done on the peptide side? Let's say towards the end of 2028, when the facility is coming online.

[Company Representative] (Jefferies): Okay. By next year, what would be the total spend that you would have done on the peptide side, let's say towards the end of 2028, when the facility is coming online, ballpark?

Dhawal Khut: Okay. By next year, what would be the total spend that you would have done on the peptide side, let's say towards the end of 2028, when the facility is coming online, ballpark?

Speaker #5: Ballpark.

Siva Chittor: That one is probably going to be less than $300 million.

Speaker #2: Doval is probably going to be less than ₹300 crores.

Speaker #5: Okay. Okay. Thank you. That's it from my side.

[Company Representative] (Jefferies): Okay. Thank you. That's it from my side.

Dhawal Khut: Okay. Thank you. That's it from my side.

Speaker #1: Thank you. A reminder to all the participants: you may press star, then one, to ask a question. Participants, you may press star, then one, to ask a question.

Operator: Thank you. A reminder to all the participants, you may press star and then one to ask a question. Participants, you may press star and then one to ask a question. As there are no further questions from the participants, I now hand the conference call over to the management for closing.

Speaker #1: I'll set a note for the questions from the participants. I now hand the conference call over to the management for closing.

Speaker #6: thank you everyone

Siva Chittor: Thank you everyone for joining the call. I'd like to reiterate that we continue to remain bullish on the business, and the projection that we have set for ourselves seems to get validated quarter on quarter as we work with our customers. We continue to believe the path that we are taking with respect to building a development-centric business that kind of helps us build the science capability first before we build the capacity is the right way to go for us. We continue to believe that this will help us deliver value over a longer-term period. Thank you all for joining the call.

Speaker #2: Thank you for joining the call. I'd like to reiterate that we continue to remain bullish on the business. The trajectory that we have set for ourselves seems to get validated quarter on quarter as we work with our customers.

Speaker #2: we continue to believe the path that we are taking with respect to building and development-centric business, that kind of helps us, you know, build the science capability first before we build the capacity.

Speaker #2: It's the right way to go for us, and we continue to believe that this will help us deliver value over a longer-term period.

Speaker #2: Thank you all for joining the call.

Speaker #1: Thank you. On behalf of Sai Life Sciences Limited, that concludes this conference. Thank you everyone for joining us. And you may now disconnect your lines.

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

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Q1 2027 Sai Life Sciences Ltd Earnings Call

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