Caplin Point Laboratories (NSE:CAPLIPOINT) Q1 2026 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Caplin Point Laboratories q one FY twenty seven 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. Should you need assistance during this conference call, please signal an operator by pressing star then 0 on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to miss Candice. Thank you and over to you ma'am. Thank you,. Good evening everyone. I, Candace on behalf of Dollar Capital, welcome you all to the Q one FY twenty seven earnings call of Caplin Point Laboratories Limited.

0:47 Today, from the management team, we have with us mister chairman, Mr. Vice chairman, Mr. Managing director and Mr. I would like to now hand over the call to the management for their opening remarks. Over to you, sir. Thank you, Candace, and thank you to Capital. Welcome everyone to our earnings call, to discuss the results of q one, FY twenty seven. Please note that a copy of all our disclosures are available on the Investors section of our website as well as on the stock exchanges. And do know that anything said on this call, which reflects our outlook for the future or which could be considered as a forward looking statement, must be reviewed in conjunction with the risks that the company faces.

1:40 The conference call is being recorded, and the transcript along with the audio will be made available on the company's website as well as the exchanges. Do note that this conference call is copyright material of CAPLIPOINT and cannot be copied, rebroadcasted or attributed in press or media with a specific written consent of the company. With that, I would like to hand over the floor to our Chairman for his opening remarks. Thank you. Good evening all. Welcome to our investors call for the quarter ended June 2026. When everyone said Caplin was no more, we proved that we are now here. You know, our sister turnaround story. Today, we are neither a parent that talks too much, but can't fly, nor an eagle which has the power to touch the sky.

2:29 However, Caplin is a. We change to fly like an eagle, and eventually, it makes it also. Now let me present you the operating architecture of our manufacturing and marketing. And my colleagues will present you about the various factories that are being built and built for the regulated markets. Further, our registration in smaller and larger geographies created the compounding effect to our company. The proof of the competitive note is the free cash flow stands at free cash reserves stands at 1,500 crore, and the total liquid asset is in the region of 2,875 crore. Our assets in the form of actually factories and others will become the engine of growth in the years to come.

3:21 And now we encourage actually women empowerment in our shop flows. They are more obedient and disciplined that has really brought actually productivity also in the shop floor compared to actually the. Now most of our missions are totally automated, either they are imported from Germany or Italy for our future facilities and also for the expansion in the current facilities. And we digitize the entire factories. In fact, CSL, we have completed it to 80% to 90%. And in the next actually six months, it will become paperless. We will try to replicate the same in all our facilities so that the digitalization will be completed and the factories will become paperless.

4:13 In addition to that, we also... We are introducing the video masters for visual learning, which will help the individual actually from the individual memory to the institutional memory. And, also, that view... That will give us the institutional intelligence. Video masters will help us actually to capture the end of qualification so that what will happen. Even if the person who actually involved in the qualification leaves the company, the knowledge will remain in the video in the company. And we also further introduced the AI cameras, and then we are planning to go for digital twins maybe in one or two years from now, which will help us to do the the remote monitoring. It alone can help us actually to understand the transparency in the facility also.

5:02 Ours is also a vertically integrated infrastructure with the intermediate API that unfinished for the regulated market. And most of the API that want to manufacture will be for the captive consumption. And the commodity APIs, we will not go for our own manufacturing. We'll rather buy either from India and China for our regulated market business. So Today, products may get commoditized, but the business model, if it is unique, it will never get commoditized. That's the reason now. Our cash flow and profit continues to be actually growing in spite of actually the percent in the smaller geographies of Latin America.

5:48 We have created the company effort to our business, as I told you before. Now that we are entering into the biggest geographies where we currently have a mix of tender and private market business. However, we'll focus more on private market where there is less competition for generics from India and China. We now plan to buy a distribution company in Mexico, which will make our job easier to understand the product selection and customer identification. Our current challenge is not in the form of depth of products, but lack of capacities in our two major factories, which is CP1 in Pondicherry and the CSL in Gubri Pondicherry. Hence, we are expanding to new factories.

6:36 It's a question of time before we complete these factories. Once we complete these factories, although it may take one, two years or two point five years, we are sure of increasing our business many fold. Our profit and cash flow will continue to be there because of our business model. And most of the time, our business, as I told you, continue to be flourishing because 20% of our products, the fast moving products, always stay in the warehouse, which is next to the customer. And the goose 20% which I say is always for six months of goose in the warehouse that we tell the customer and we have created actually a fan club for CAPLIPOINT products. Once we complete our all regulated market factories with all kinds of pharmaceutical formulation in two to two point five years from now, we as I told you, we are sure to reach greater heights.

7:34 The compounding effect will build our business on the status redundancies that is created in our factories will affect our business. We are moving from a manufacturer to customer towards a customer proximity inventory model by planning to buy registration in the bigger geographies too. The proximity plus strategy redundancy plus compounding effect model of CAPLIPOINT will continue to replenish in the future too. Also, the manufacturer far away, that is either India or China, with inventory close to demand even closer to demand with data dominance facilities are going to be our operating philosophy for Caplin Point.

8:26 We define our business with our business is not defined by others. Let me end with a nice narrative with the frame of the can also does not clear the dark. It defines us. It defines it. We are sure of creating the right transition from to great. Thank you. Thank you. Thank you, gentlemen. Once again, welcome to everyone for joining us on this call. We have always believed the real strength of CAPLIPOINT is not just in any individual product or geography or any particular quarter. It is a consistency of the underlying business model. Our ability to grow across existing markets and new markets, while at the same time generate healthy cash flow, profitability and grow our top line as well. And meticulously reinvest in capabilities that will support our next phase of growth. I think Q1 is another good reflection of that. Our emerging market business continues to be a very dependable growth engine for us. Latin America has been built over two decades by CAPLIP through a combination of a strong distribution network, supply chain consistency, and more importantly, a deep understanding of the markets in which we operate. We continue to see opportunities virtually

9:56 across all the existing markets, which goes to show you how that CAPLIPOINT's existing markets continue to grow. What is particularly encouraging is that we are not just trying to extract more growth from existing businesses, we expand the addressable opportunity through new areas such as oncology segment, branded generics and also new markets such as Chile and Mexico. Coming to Mexico, we have a substantial pipeline of our internally developed products and also in licensed products planned for filing. Chile and Central America are continuing to see good traction in tender and private market business. Coming to U. S, we continue to see robust growth in cash flow bottom line and top line, which are the three most watched parameters for us in that particular order.

10:46 We have spent several years building the capabilities to participate meaningfully in The U. S. Sterile injectable space, and we are slowly starting to see the results of that now. We have a very good blend of critical care injectable products that are used in every health system in The U. S. And other markets, also supplemented by a growing ophthalmic products portfolio. Going forward, we will also see products with a lot more complexity coming out of CSM, which should add to our bottom line. The important point for us is that this is no longer about only supplying products into The US. We are gradually building a much more integrated platform from r and d and manufacturing to regulatory capabilities and also having our own label for commercial operations and direct relationships with customers.

11:33 This will shortly be augmented by our own API, which will also give us very good control on our supply chain, which is a critical area in this space. Caplin Point U. S. An important part of our evolution. We have already launched a meaningful number of products under our own label, and we are increasingly developing direct relationship with the large and small IDNs in addition to the big wholesalers in The US. We believe this gives us greater control over the commercial side of the business, longevity on products. And over time, it should allow us to capture more of the value we are creating. And this brings me to the most important part of our strategy. We are investing ahead of our growth. As chairman was saying about the CapEx we are putting in the next phase of Caplin is going to be very different from simply adding more products to our existing platform. We are building capabilities across the entire value chain. We are increasing our several manufacturing capacity.

12:31 We have already expanded into oncology. We are developing API capabilities to increase backward integration, and we are expanding our oral solids and dermatology capabilities also. Soon enough, we are also planning to build manufacturing capabilities closer to the market in Mexico. We are investing also into expansion in our Americas clinical for larger number of BA studies for our growing portfolio of products. And importantly, we are doing this from a position of financial strength. We have not taken a single dollar from outside in the form of a bank loan. Our CFO will throw more light on our balance sheet strength. So when we talk about being future ready, this is what we mean. And we... As we look ahead, our ambition is not just to become a larger pharmaceutical company. We want to build more into a platform with a strong presence across geographies, broader portfolio, and greater vertical integration and strength across the manufacturing and R and D capabilities.

13:33 And the first phase of Caplin was about building a successful business model. The next phase is about scaling that model and building capabilities around it. So we try and identify what patterns have worked for us in the past and try to repeat those patterns for our growth in future as well. With that, I hand it over to our CFO to take us through the financial performance for this quarter, and we'll be opening up the floor for questions after that. Thank you. Thank you, Mr. Venk. Good afternoon, ladies and gentlemen. So let's take this opportunity to thank everyone for taking time off to be participating in this call. I'm pleased to reiterate what I said during our Q1 investor calls for FY twenty six. What is well begun is often.

14:20 So we have well begun this quarter with few of the highlights which I would like to throw. Overall, when we grew the 20%, supported the 18% growth in our conventional market and more importantly, six percent growth in The U. S. Market. The LatAm business recorded strong growth, supported by a major tender, one in El Salvador and supplied mostly in the last quarter. U. S. Revenue growth predominantly driven by the U. S. Subsidiaries, we mentioned, where revenue increased from INR 14.4 crores in the previous year to INR 43.1 crores, which is a three times threefold increase, an absolute growth of INR 30 crores over a base of INR 14.4 crores.

15:06 The business is well positioned to make a significant contribution to CAPL and the group's overall growth going forward. Gross margin stood at 59.8%, which is in line with our targeted and expected and we expect to remain at similar levels through the year. We have contributed approximately INR 25 crores of the total INR 50 crores increase in the gross profit. This shows how CSL is coming into party and then they will be a more significant player in the future growth of the company. Operating expenses increased in absolute terms from INR 137 crores to INR 151 crores. However, as a percentage of revenue, they declined from 23.7% to 23.6%. This improvement in operating efficiency more than offset the movement in gross margin, resulting in an increase in EBITDA margin from 37.1% to 38.4%.

16:01 The depreciation increased by INR 5.3 crores, primarily due to the capitalization of Line 15 PFS and the non quality project, injectable project in Papuru and Vaida API plant from addition four and above what we initially purchased. PPT grew by 22.1%, increasing from 184.5 to 223.24 The effective tax rate stood at 20.8%, in line with the target of 26. So cash stood at 139 crores, representing a 19% increase over the previous year. Cash flow from operations is expected to improve from the current INR 98 crores reported for the quarter. This is primarily due to conscious recent increase in Claro's stock from INR $4.29 crores in March to $50.05 crores, an increase of about INR $7.56 crores, which in terms of state will be at least 200 bps to shield against potential supply disruption and the initial supply chain continuity amid the ongoing geopolitical situation.

17:05 Additionally, to shield against potential increases in raw material prices, I think from escalation oil situation, we have increased our RMTM inventory by INR 15 crores, right? So these are the two factors. Apart from that, the receivables also have gone up by INR 46 crores as compared to March, primarily due to supply to government in the quarter and then these are all expected to be received by two year of a '27. So these are the primary reasons why you would see a moderate in the year compared to our conventional increase. So these increases are not likely to repeat. The sales we were at 1,300 crores, INR 1,300 and of last June and we are at 1,400 crores as of June 26.

18:10 We could have had increased with 30%, that is INR $6.58 crores from INR 2,207 crores to INR 2,838 crores primarily consisted of cash, receivables and inventory. Sharon understands her net worth increased by 25% in the last one year or INR $2.52 crores. From 3,013 crores, it has increased to 3,754 to 2,026. So we we have to be modest in saying that when we compare our peers in terms of ratio, like EBITDA, PBT and PAT, we are ahead of our comparable peers in the market. With these opening remarks, I would like to conclude, and we'll be able to answer any questions from the participants.

18:59 Over to you, Mr. Vijay. Thank you, Mr. Muralid. We can open up the floor for questions now, please. 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 one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question.

19:45 Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Abhijit Jain from AJ Capital. Please go ahead. Hi, good afternoon. Who are you modeling? Yes. First of all, sir, congratulation on a steady set of numbers. Good to see that the growth rate has maintained and you're on track to achieving your long term goals. So congratulations on that. I had two questions. First, I wanted to discuss the rest of the world profitability on the PPT level.

20:39 If I look at the numbers year on year, you know, in Q1 of FY twenty six, that was at 37.5%, the PBT profitability for rest of the world. That came down to 34.6%, 7% in Q4 or FY 'twenty six. This quarter, it is down again to about 33 odd percent. So I just want to understand that what do you see this holding up to? Will you be able to can you guide us in terms of what this level would be for FY 'twenty seven and future purposes? Because we have seen that quarter on quarter, it has been down by one to two percentage points in the last twelve months. Can you guide us now? Yes. Okay. You have one more questions to complete or is it okay to answer? Yes. The second question is on capital allocation. So I can ask you once you've answered it, we can get on to that.

21:32 Okay. That 1.5 that you're talking, yes, is actually true. But again, I would request you to look at actually the free cash results and the total liquid assets. See, it's quite normal actually for any company. There is a possibility of one or two... One or 100% decrease because when the business actually, especially the generic business is in a position to actually generate cash and generate profitability, which is substantial compared to our peers, I think it's fairly okay. But now our focus also, in addition to these markets, we are moving to other markets also. And then the second most important thing is our expenses are also slightly increasing in these places because the products that we we have been marketing, you know, is more of generic.

22:24 And the second level of marketing, you know, it sticks that, of course, increase the expenses also. So that 1% or half percent is not going to be, like, you know, red... Reduced... Getting reduced every year on year basis or every quarter on quarter basis. It might even improve. I'm sure it will improve, actually, after a point of time when we are planning to go for actually more and more of products, which will actually create value to our generic business also. The reason being, it is... This is not only a... This is not a commodity kind of a business where no generics gives you this kind of a properties because of the business model differentiation. Yes, please. Please go ahead.

23:14 Director of Finance also to give you some... I have one point for this information. Actually, if you recollect what we have set as a target or committed to about 50% of the contribution margin, Okay. We are Right. We performed better. And then if you compare it to 55%, what we have committed and 59.8, there is nothing to worry about. And this is as Kevin rightly put it, it's a quarter on quarter we can't say. Because we have to see as a year as a whole, depends on what product we sell, which market we sell in particular quarter and what contributions they need. So we have said to give a we have said that in my remarks also, it's a 51.8% is what we actually stay put around it, about 50% is what. So those 5528% is the fact we committed, the way I said in both the parameters.

24:10 No. I understand that, sir. You are obviously maintaining and achieving your overall numbers. I just wanted to get into, you know, details of, like, one to one understanding a little bit better. So just wanted to understand what is a steady state level of, you know, probability profitability in that we can expect. That was my question. So just coming on the the second part of the question, actually, you answered that, you know, the cash can result in in a bit of a drag. I wanted to understand your capital allocation. Now I see that, you know, you have this thousand odd crores of cash in hand, and most of them is invested in the ventures and bond, etcetera. Any thoughts around improving the yield by investing in index fund? I mean, if you look at fifty fifty, 5,500, right, these have a steady compound of nine to 10%, give and take any four year Pfizer for IBUC.

24:59 So any plans to invest part of it in in the funds, these are relatively safe. You know, they provide a yield of 100 to 200 bps higher than the corporate bond. So just wanted to keep it on the table. If you could put it into consideration, it will help improve the profitability also and with profitability by 100 to 200 bps looking at the INR 1,000 crores of cash reserve that you have. So this Yeah. So this... No. Thank you. And and valid suggestion. In fact, this was discussed during our Good work. You know, recent board meeting also. We've gone from a state of being ultra conservative and having everything and only in SDs to slowly moving up the, you know, risk risk change, if you wanna call it that, you know. But your points are well taken. In fact, one of our directors also suggested that, you know, we can be slightly...

25:54 You know, I wouldn't call it adventurous, but we don't have to be right at the bottom in terms of the risk appetite when it comes to investing our reserves. I think slowly, slowly, we'll be moving up. Already, I think we are into credit funds and debt funds and things like that. I think index funds could be the next in line for us to evaluate. Maybe what we can do is over a period of time, on having an investment policy per se, you know, for extra extra funds. But, again, we always want to make sure that capital protection is more important than the returns. But once again, point will take. And I think one or two percentage points and with this kind of a quantum will certainly be a large number and we should not be ignorant to that. Yes, sir. Yes, ahead. Yes, sir. Just add more point.

26:46 So in terms of the long term investment, actually, as we have been discussing in every meeting that we are also keeping our eyes and ears open on inorganic opportunities as well. So you would like to have the cash at our disposal at any point of time that. The question. So if we use... Yeah. Also, also, but a part of the portfolio, a part of that 1,000 crores can We'll make a small a small beginning point when taken, we'll do that. And capital production But the biggest investor, mister Warren Buffett uses his cash reserves and investing in index fund and investing in, you know, save equity. So, obviously, I mean, we shouldn't be so scared about it. And Indian equities, especially the index funds that, you know, long track record of over the four to five period horizon giving at least nine to 10% return.

27:36 So I think we can be a bit more open about it. It helps improve our profitability by one to two percentage points every year. So why not do that? That's what the strong definition. You can start with maybe 200,300 of growth, 25, 3% of the portfolio. And 70%, you can use it for, you know, inorganic and acquisitions, etcetera. But I was just thinking that Yeah. Point can do it, but he can do it at the. Thank you. Thank you. Thank you. You. The next question comes from the line of Prakashal Sakaria from Sakaria Investments. Go ahead.

28:23 Hi. Am I audible? Yes. Yes. I have three questions. The first question is that I think mister Vivek mentioned that they are looking at a distribution company in Mexico. So have we narrowed down to any in... Right now? Yes. I am the one who pulled that one. Oh, yeah. Sure. Opportunities, like, you know, three to four companies. The white chap and other company, Ashok has looked at it, and, of course, is going to collect the details and send it to us. After that, you know, let's do the due diligence and take a call. Okay. So we can expect an acquisition soon? Maybe if if if It does not come up. It was a meaningful acquisition. As I told you, the idea of going for distribution company is to understand actually the products to select for... Mainly for selection of products and selection of customers.

29:20 And this will also give you an opportunity about the entire reach of the distributor. If distributor covers the entire country, that's a major opportunity so that you will understand which are the pharmacies, which are the small chains, which are the smaller hospital, which are the private hospitals, the distributor is covering. Then accordingly, we'll have to take a call. We'll have to take a decision. Okay. So people are very crucial. If he's if he's actually selling only multinational products, it doesn't make a difference to us. If we're selling the local company product, we'll be very keen. We would like to actually buy even at a little higher cost. But if it's only selling multinational product, you know very well multinational products have been sold in this kind of... Any market for that matter, say, years or sixty, seventy years and above.

30:09 For local companies, means it will not be more than actually twenty, thirty, thirty five years. So that also makes a lot of difference. Marginational products, most of them are actually, you know, patents and they get expired and that became actually a generic. Local companies, they only, you manufacture the patent expired products. So something similar to our model, generic display. Okay. Okay. Understood. And my my second question is to mister Vivek. I think we are right now running five terra line and moving towards 17 terra lines, which will be one of the biggest in the country. So, I mean, what gives us the confidence about the healthy utilization of those 17 lines?

30:54 Because 17 lines is, like, huge. So are we expecting that much demand from us? Are we... Do we have... Are we getting a lot of queries right now? Yes. Can I get into it first? And then, yeah, I'll actually ask you answer. Any... I mean, anyone can answer. I mean, I I Yeah. Currently, last four years, I've been sitting in the factory, so I would like to actually give a a bit of more... This thing, you know, the right question to you also. Mhmm. See, now out of seven lines that we have here today, we find it very difficult to handle, actually, the orders that are coming to us. One main reason is when we were smaller, when we are... When we didn't know much of, actually, the technology, we didn't balance it properly. Most of our...

31:40 Like, you know, three of our lines is a mix of TS and aseptic. And then whenever we expand that, we expanded in such a way that, you know, it was not very actually correct also. So it leads to lot of, actually, complications. In the sense, you know, it is not a major issue in the form of quality issues or integrity issue or a safety issue, but it leads to breakdowns. The first phase of our actually injectables, it took ten, twelve years already. We got our first US FDA inspection in 2016. Then the second phase, they're all new lines, actually, like line four, five, six. So when we go for, actually, the phase three, we will not go for all the seven lines. We'll start with three lines and move all the aseptic to the aseptic, actually, the same line where it will be with the isolator, which means the aseptic practices will be totally eliminated because isolated line doesn't require a aseptic practices. Sir.

32:43 Then when we go for actually ophthalmic products, ophthalmic machine, which we are going to import from Germany, this one also is a very sophisticated line, and then it involves lesser human intervention. Then the third one is, you know, as I told you, we are not only, you know, getting into the automated missions, we are also getting into digitization. Once you complete the digitization, especially the links and QC and micro, and then the entire digitized in the form of e log, e b m r, e b p r, it becomes the. Now the third one, as I told you, actually, the visual intelligence, people will learn everything through video because seeing is believing. People can land by... You know, if someone teaches, there is a possibility of positive. But if someone happens to see and do the work, it becomes easy also for them. So with all these additional advantages in addition to cameras and all, when we go to the customer, we'll be one of the few custom... Few few companies of our side who has actually the.

33:49 So I'm sure that we'll be in a position to get that, you know, good business going forward. Because of a, the entire actually state of the art actually model that we have told you in terms of mission and in terms of actually digitization, in terms of video way of doing things in the form of the entire qualifications, most of the time it was done by people. And people, when they leave, the summary, you know, and the intelligence both leave. But now that it will leave, actually, in the video library. So not necessarily, you'll have to worry about the people. You'll have to bother more about the system. That too, if the system is integrated with AI cameras, then the MS also comes to us easier, and it's easier to manage also. And then someone who is actually in US, if they want to see whether we have taken up the products for production, they can as well see from US also when the production is up actually in the nights here. You know, actually, the night here is dead there.

34:49 You know, injectable is one thing now which goes 24 by seven. So like that, I can tell you there are a lot of advantages every customer will have. And the CMOs... Most of the CMOs of our size may not have this type of actually advantages. And on top of it, we also have r and d both for APA and formulation. We'll be in a position to also do something, actually, for the r and d and the other things in the form of, you know, tech terms with everything. These are few advantages which we have. So I'm sure, you know, we are very confident we'll be in a position to increase our business. Now I'll invite, actually, the right chairman to say a few words about it also. Yeah. So from the commercial side, if you see, we are actually booked out till almost February of next year.

35:39 You know? So we've been, you know, just about barely able to keep up with demand, and we know that expansion of capacity is extremely crucial for us to kinda keep up with the growing demand. Number two, out of the 60 odd ANDAs that we have, only 39 has been launched. We have to continue working on launching the remaining products as well. Number three is we have another 40 plus products in the pipeline in both prefilled syringes, you know, ophthalmic suspensions and all of that that needs to also come into play. And in the new facility, we're also getting into very niche areas such as glow filled seal products, inhalation products, potentially also getting into other sterile dosage forms. All put together will be close to 15 plus lines. You know? So I'm I'm I'm not even taking into account any of the capacity requirements that we will need when we get into full scale operations in Brazil and Mexico. So so by no means, we think this is over expansion or anything like that.

36:44 In fact, we are expanding as a little bit ahead of time. Finally, the last one is we've always had an eye on getting into early stage biosimilars, especially with come... With the partnership with the large Chinese companies that we're already in touch with over the last couple of decades from our presence in China. So all of these put together, we feel that with all the automation that chairman has been talking about, we feel very confident that And that that current space is going to be an important space for us to expand it. And the the most important point I forgot to mention is not data driven. It's all from the internal cash flow, which means, you know, suppose if it's slightly delayed also, we don't have to much worry about it. Of course, which will not happen.

37:32 However, this is not actually a debt driven actually infrastructure that we have created. Just to just to draw a parallel without mentioning names, the largest capacity of injectables in India has close to 30 lines, like 29 or 30 lines. You know? And that company also continues to invest into more just to draw a parallel. Okay. Okay. Thank you so much for such a, you know, detailed answer. And I just have one last question. Is that I'm tracking the company since past five years. And Thank you. And I I have this... And I really look up to you, but I just want to know one thing that as a visionary, what do you see the company in the next three to four years? Maybe by two thousand thirty one, thirty two, You always say that we will be a big company, big company. How do you define big? And how do you see the company in the next three, four years?

38:26 Okay. This is actually something what you're asking me is actually, you know, like, farmer self to future self. So what is that... See, it's not that how much you are growing. What kind of a company are we becoming? So if I want you to actually tell me the size more than the size, look at actually the kind of infrastructure we are building. Be it injectable, be it tablet and capsule, be it diamonds, be it any area. We'll have all the facilities which will be in line with actually international standards so that we can get into the related markets worldwide. It could be a global dose here in future. Second important thing in addition to that, we also have plans to go for markets like... Sorry, countries like Mexico to start our factory where we have already bought the land. The advantage is if you set up a factory there, 16% of price advantage for getting into the tenders.

39:20 Then the business that we do, we are not only interested in doing business with... In tenders, we are also interested in doing business more in private market, which, of course, is not easily replicable by companies of our size. And the big companies are not very keen to get into the private market. You can even verify. Maybe few products they import or buy some sell it to the local people. And even if they have an office there, they will sell to actually the top distributor. Whereas, we will go to the length and breadth of these countries because my son, who is the right chairman of the company, he has been there in the this part of the world for the last twenty two years. Our maximum actually focus will be there in Mexico and Brazil by Ashok and US by Vivek.

40:07 So even in US, 70% will be controlled by actually, you know, three top companies, but there is 30%. You look at the 30%. If you could do at least 10, 15% of 30%, that itself is a huge market. So once you create the infrastructure, once you digitalize it and modernize everything, once they understand this is going... These four pillars in the form of integrity, quality, safety is ensured, the productivity will not... Productivity will not be an issue. I'm sure. So if you ask me to quantify it, see, I would prefer to be one among the top 20 companies of the country. Okay. Okay. Okay. Got it. Got it. Thank you. Thank you so much for answering. Thank you.

40:53 Thank you. Thank you. Good luck. Good luck. Thank you. Ladies and gentlemen, to ask a question, please press star and 1. The next question comes from the line of from AJ Capital. Please go ahead. So just one follow-up question on capital allocation.

41:39 Do you foresee an increase in dividend payout going ahead? Or do you think that you can deploy the capital better in acquisitions and investment profile? Is there some clarity around that? It is difficult to answer to this question because if you find very opportunity, definitely we we would like to put our money actually in acquisition if it is a meaningful Obviously, obviously. Yeah. Otherwise, you know, we would like to share actually the deal... This this thing in the form of dividend also. I'm sure, you know, I would be able to continue this way. That's not going to dent our, actual cash flow. Right. Alright. Now, obviously, you should prioritize acquisitions and increasing your capital base for sure. But if in any year you see that you don't have that opportunity, then probably a special dividend or an interim dividend can be a better deal.

42:36 That is a fee on the board. Just to progression. Correct. Correct. Hello? Thank you. The next question comes from the line of from Investment. Please go ahead. Hi. Just a follow-up question. We are... When are we expecting all the 17 lines to be running, you know, completely? And when can we start expecting numbers from those 17 lines? Yeah. It will start from one end of year to three years. Like, you know, in the... Another six to seven months, we will start our line seven.

43:22 And then, you know, in one end of year, actually, we will start. See, at the end of the day, when we say we start, the commercials will start. But, again, the restriction of the products, even if you have extra, actually, ANDAs, it has to be transferred to the other facility, which is totally a different company. It's not actually a part of CSL. It's a subsidiary of Caplin Point, but it's not part of CSL. So that registration and other sorry, the change in dose how to change the dose here, all these things, of course, Vivek will be in a position to tell you. Please go ahead, Vivek, and tell you. Yeah. So right now, we have six lines in the facility, and the seventh one is coming up. And then if you look at our onco... Oncology facility, we have a line over there as well. So at this point, we are talking about eight lines already.

44:12 In the next year, this time next year, we should have five more lines from the new facility. That is what we call as phase phase three. And then finally, we have provision for three, four more lines, which we will activate potentially by '29 and beyond only. So I would say we have complete visibility on when 13 lines are going to be around, including the oncology side. The provision for the last three, four lines will be the provision for the last three, four lines, I think we will have to take a call closer to commercializing of the existing one. Revenue wise, when you're talking about moving a product from a current client to a new line, especially in The US market, you're looking at at least around nine to ten months for that to start because there is a there is something called the post approval supplement where you need to run batches, put them in stability for three months, and then file it. That takes six months to get approved and all of that. So any product that gets converted from current facility to a new one will take about nine to ten months for it to start getting commercially operational profit.

45:22 Okay. Okay. Okay. Okay. Got it. Thank you. Thank thank you, Anshul. Thank you. The next question comes from the line of, an individual investor. Please go ahead. Hello. Hello. Am I audible? Yes. Yes. Yes. So I had a couple of questions. The first one, I think last quarter, you mentioned that we had a banking tender, and I think it was in the Ecuadorian market. So I just wanted to know what would the spillover from that tender be in this quarter, and what can we expect next quarter onwards? Like, is that tender completely done? Yeah. I think this is El Salvador, not Okay. Yeah. El Salvador. Yeah.

46:13 And our CFO can throw some light on. It it might not be completely accurate, please, because these are... You know, you continue to have, you know, get replenishment tenders and all of that, so we can give you a basic picture. Go ahead, mister Bodhi. Yes. Thank you, sir. The original vendor has been completely supplied. And then there are supplementary vendors which we have been getting in do not in the Korean volume, say, 10% to 15% of original volume. We expect that to be obviously the participation and then we are expecting that to be declared in a plus months. Hopefully, we should get it also, but we are not committing anything as of now. But the supplementary vendors will keep coming. Whatever products we supply additional quantity keep coming quarter and quarter.

47:04 Okay. Understood. And secondly, if you could throw some light on Ameris Pinnacle and its contribution to a company right now as well as how do you see it's contributing, you know, to zero down the line? Yeah. So Ameris will be, by and large, a backward integration for us. We used to have some commercial operations out there with third party companies. But right now, with the existing 17 beds and our increase up to 120 beds in the near future will be largely to cater to our internal bio city. Just to give you an idea, if we did bio studies at an external b center, if something costs us around, let's say, a $100,000 per study at a marriage that will cost around 50% of that. So the value addition will be indirect, not directly in terms of numbers.

48:00 And in the future, do you expect it to be internal, or would we be willing to offer In future as well. At least, you know, next couple of years, we expect this to be... Because we have a a significant number of products that we are doing from our oncology sites, from our softgel site. And also in future, if you take... Get into the inhalation space, this is something that we envision doing internally as well, the bio studies of it. You know? So we expect next couple of years for it to be catering only to CAPLIPOINT requirements. Thank you. And from that, please. Thank you. Thank you. Thank you. You. The next question comes from the line of an individual investor.

48:50 Please go ahead. Hi. Is my line audible? Yes. First of all, congrats on the set of numbers. You have been very consistent on every quarter on quarter, great set of numbers. Sir, my question is around in the last Q4 result, we mentioned about GLP-one product approval for Central American region we were pursuing. I did not saw any update for the same in this current quarter presentation. Yeah. So it's a work in progress. The GLP one product. GLP. Yes. GLP one product. They are under registration. We we don't have any commercial business out of that products yet. As of when we have some updates on that, we will let you know. They continue to be under registration at the moment.

49:44 Okay. Thank you, sir. That's all my question. Thank you. Thank you very much. Thank you. The next question comes from the line of, an individual investor. Please go ahead. Yeah. Hi. Thanks for the opportunity. I really don't have any questions. I just want to convey my compliments for the wonderful performance. You keep delivering further on quarter. So the issue got sweet. Thank you so much. Thank you. Thank you so much. You so much. The next question comes from the line of Ajay, Individual Investor. Please go ahead. Yes. So hello. Yes. Can you speak a little louder, please?

50:31 You are not fully audible. What about sound? Hello? Yes, yes, yes. Much better. So I just had a follow-up on like our organic growth strategy. Are we also looking at some opportunities in the Indian market and distribution or otherwise, like, normal generative? No. We are not looking for any distribution companies in India. But if there is an opportunity for us to go for a meaningful acquisition in the Indian market, we'll also look at it, but not a distribution company. Because generics in India, you don't make money in generics. Only in brand mark... Brand marketing, which, of course, you are also our. And we always prefer to go for a clear distributor in Latin America mainly or maybe in US. That, of course, you know, we will be in a position to decide. He has been taking care of that area.

51:29 And coming to Latin America, we know that will add value to our entire business and the entire business that we are doing currently. You know? That will add some value to it that can help us to increase our base from one level to the next level because the countries currently we are into in the form of Mexico, Chile, and later actually in Colombia and Brazil and all. These are all huge countries. And once you get this distribution company, you'll be in a position to understand the entire client list. That's why we are interested in a distribution in Latin America. So so that ticket has start in our main plans to enter the Indian market, but if there is an opportunity, then we might.

52:21 But to... Indian market, to be very honest, you know, we don't have that kind of expertise, actually, to take care of some brand marketing in India. And, moreover, you also will agree because it's better to focus on our core competence. We have been doing well in Latin America. The pattern, of course, you know, which you have seen also, we continue to grow well. So we'll focus more on that one, actually. That's what we are planning to do, and we will do more, actually, when US too. So it will be more of North And South America, which will be our focus in future. Okay. And just a last question on the new tariffs that have been announced on pharma companies by the Trump administration. We have found the right... How do we look at it and how we can Correct. You you know... I could not hear it properly, please. Please tell me. So recently, American administration announced payment tariffs on generic, right, which will come in two years later.

53:22 So I know it's See, you it's very... See, you must be knowing also. He has been announcing lot of tariffs. And, of course, we will cross the bridge when we reach there. And every country, of course, they... Every country will go for they have to protect their own industries. That's how they are different because the deglobalized world. Definitely, there will be opportunities when we go for our own factories in various bigger geographies, but we love to see whether it's the ideal time to go. Probably, it will take some more time because starting a generic factory in US will not be, you know, cost effective. And maybe when the machine learning in the form of, you know, other thing, what do you call, I think robots... When the robots come into manufacturing of generics, yes, every country, even if you manufacture in US or in another country where the cost of production is high also, it will be one or the same like India.

54:25 So we should wait and watch. We should wait and watch. Understood. Thank you. Thank you very much. Thank you. Participants who wish to ask a question may press star and 1. I repeat. Participants who wish to ask a question may press star and 1. As there are no further questions, I would now like to hand the conference over to the management for closing comments. Thank you, and over to you. Yeah. Thank you. Thanks once again to everybody that participated in the investors call.

55:14 We also appreciate the Capital for hosting it, And we look forward to more interactions in the near future with all of you. Thank you. Thanks to all of you. Thank you. Thank you very much. Thank you. On behalf of Dollar Capital Markets Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.