Ladies and gentlemen, good day and welcome to Q1 FY 2026 Earnings Conference Call of Alembic Pharmaceuticals Ltd. We have with us today Mr. Pranav Amin, Managing Director; Mr. Shaunak Amin, Managing Director; Mr. R. K. Baheti, Executive Director; Mr. G. Krishnan, CFO; Mr. Ajay Kumar Desai, Senior Vice President, Finance. As a reminder, this conference call is only for analysts and institutional investors. All participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. R. K. Baheti. Thank you, and over to you, sir.
Thank you. Am I audible ?
Yes, sir, please go ahead.
Thank you, everyone, for joining our first quarter 20 26 conference call. I'm very happy to introduce my colleague, Mr. G. Krishnan, who has joined us as our CFO, effective 7th of July 2025. I'm pleased to hand it over to him for the opening remarks.
Thank you. Thank you, Mr. Baheti, for the introduction. Good afternoon, everyone. This is my first earnings call, my interaction with all of you as a CFO of Alembic . I'm truly pleased to be here, and it's an honor to join a company with such a rich legacy of innovation, operational excellence, and strong stakeholder trust. Over the past few weeks, I've been spending time engaging with various teams, understanding our business views, appreciating the disciplined approach that the company brings to execution. I look forward to working very closely with the leadership team to continue driving sustainable growth, operational efficiency, and long-term value creation. Now, let me briefly take you through the numbers for the quarter ended June 30, 2025. We delivered a good start to the financial year. Total revenue for the quarter grew by 10% year-on-year ` to INR 1,711 crores.
The growth was broad-based across businesses, despite pricing pressure in U.S. generics and API. The gross margin, that is, net of material costs, improved from 74.8% in Q1 last year to 76.2% in Q1 this year, primarily driven by product mix. We also embarked on cost improvement programs in manufacturing operations that drove the margin uplift. EBITDA margins before R&D expenses were at 25% of revenue at INR 424 crores for the quarter. It grew by about 23% over the last year, reflecting revenue growth, better gross margins, and improved utilization in some of the facilities that were launched last year. R&D expenses increased by 26% compared to the previous year to INR 145 crores. This is in line with the full-year guidance that we gave at the beginning of this year, which is supposed to be around INR 600- 650 crores in R&D expense.
EBITDA after R&D expense was at INR 288 crores, which is 17% of revenue and grew by 20% year-on-year. Profit before tax grew by 21% to INR 191 crores. Net profit growth was at 15% to INR 154 crores. EPS for the quarter stands at INR 7.85 per share compared to INR 6.84 per share for the previous year. Working capital as of June was broadly similar to what we had in March. We had better collections, which was partially offset by increasing inventory in line with our strategic approach on managing working capital. Borrowing, the gross debt was at INR 1,185 crores, while net debt stands at INR 967 crores for the quarter as of June 30th. With this, I have given a broad overview of the financials, and I'll now request Shaunak to take you through the India-branded business. Over to you, Shaunak.
Yeah, good afternoon, everyone. I think this quarter on India, we under-delivered with only a 5% year-on-year growth, which reached INR 599 crores in revenue for the quarter. There are some specialty areas which have shown some momentum, but I think in terms of building a more robust, sustainable business to deliver a strong double-digit growth going forward, there have been some challenges which we tried to tackle, including adjusting some underlying factors as well as having a far more rigorous and robust mechanism of what we build, how we capture in-market inventory. Also, along with that, a more rigorous alignment to UCPMP norms that we have to follow as an industry.
As a part of these, we also understand that certain execution levels are not up to standard, and we are working on those and trying to move people, but getting 7,000+ people to move overnight does take a challenge, but we are definitely working on it. We have a very clear idea on where the gaps and what we need to do to get back into a double-digit kind of growth number that we have promised for the year. We are working on it on a daily basis, and I'm sure that very soon we should start seeing some of these stats set out in terms of our growth numbers. I highlight, obviously, animal healthcare continues to do well because of our robust execution in that area, and we hope to match the rest of the product categories to that level or that standard of growth going forward.
Thank you. I'll pass it on to Pranav. Thank you.
Thanks, Shaunak. Pleased to present the performance of the first quarter of FY 2026 for the international business and the API. We began the first quarter on a strong note. It was driven by a 21% increase in the rest of the world's generics. It reflects a significant expansion in execution across the geographies. Despite ongoing pricing pressure in the U.S., our U.S. business also grew by 13%, supported by volume gains. We launched four products in the market, and we also picked up market share in some other products. We expect the U.S. to continue growing in the next couple of quarters on the back of some interesting launches as well. The API business was flat, as I've said, that it's been a little neutral due to some issues due to data availability in India, and was flat at INR 261 crores for the quarter.
As we ramp up the utilization of our new manufacturing facilities and continue to drive cost optimization initiatives, we expect to benefit with improved operating leverage, which will help our margins as well. We filed two ANDAs during the quarter. We received six approvals and launched four products in the U.S. We expect to launch four to five more products in Q2 of this year as well. With that, I will open the floor for Q&A.
Thank you. We will now begin 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 two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mr. Tushar Manudhane from Motilal Oswal. Please go ahead, sir.
Am I audible?
Yeah.
Yes, sir.
Sir, just on domestic formulation while there as an under performance, but if you could throw some light on the specialty segment in particular while a fter many quarters, we have seen some muted performance for this quarter. That was first. And secondly, in terms of you highlighted rebuilding the team. If you could just elaborate in terms of what exactly are you trying to do here?
Yeah. I think what I was trying to allude to is that the way we build sales, we try to keep it far more strict compared to what the industry norm is as well as where we used to be in the past. In terms of our primaries versus secondaries, we've also implemented a mechanism to capture secondaries from the market automatically, so we have better control on what our inventory levels in the market . Some of that also impacted our sales in Q1. Largely, like I said, I think we have to focus more on execution, and we're more committed to driving underlying growth through our prescribers and prescriptions for a sales that is more sustainable in the future.
Is this impacting a particular therapy, or this has been across the therapies within?
This is across the therapies. This is across the therapies. It's for the whole organization. There's no specific therapy which will have it. Like I said, we're quite confident we have full visibility on what's going on, and we're quite confident of where the gaps are and what we need to do to address these.
Acute has been better. So any particular attributes to this?
I think acute, we're coming off. If you know the history, I think we came off a very high base, and then last year the market was extremely low base for us. Sorry, it was extremely bad. From a base point of view, there is some advantage there. Again, like I said, I think a little better execution on the acute side also, along with some better stability in the market, has allowed us to do this.
Got it, sir. That's it from my call. I'll come back in the queue .
Thank you. The next question is from the line of Nirali Shah from Ashika Stock Services. Please go ahead, ma'am.
Yeah, thanks for the opportunity. I have two questions. First, from the peptide front, now that we have a dedicated block, which is commissioned, and correct me if I'm wrong, we have allocated almost 35% of R&D towards this peptide and complex injectables. We just wanted to know if you could update us on the timelines for the first peptide filing. Also, any update on filing for semaglutide and ROW markets? Like you had indicated about tirzepatide , we are planning for a day one launch in the U.S . Any filings or any inventory on that front?
I think we haven't said that we've allocated 35% of R&D to peptides. I think it's just not what we've said ever . Yeah, peptides is something that we are looking and pursuing. What I have said is that we were late for the first peptide, which is semaglutide for the U.S. market. We won't be there in the first wave of launch for semaglutide. Tirzepatide, which is the second one, Mounjaro is something that we're looking at, and the follow-on GLP-1s that we're doing. Apart from that, we have other peptides in the system as well that we're working on, which are going into some of the complex injectables.
Yeah, understood. It's like you mentioned we are late for semaglutide, but we were aiming for ROW markets .
Yeah, so we are looking at some of the ROW markets for semaglutide. As I said, we were a little late for the first wave markets. After the second wave markets, it's something that we will pursue.
Any specific, if you can name which ROW segment are you looking at, which market?
I would not like to name them right now because I just want to get the filings done and ensure that the regulatory strategy is in place before we give a comment on that.
Okay. My second question is, you had earlier indicated that we do have limited competition in injectable launches, which will probably start contributing by FY 2027. Any launch expected in FY 2026, and if you can elaborate more on the segments, are they niche segments or any complex dosage forms?
Yes, we have a few complex injectable filings that we will get. One approval that we did receive in the public domain is on the doxorubicin product. Like that, we'll get a few more as we go along slowly as we keep getting approvals.
Okay, understood. Thank you.
Thank you.
Thank you. The next question is from the line of Dhammayanti Kerai from HSBC. Please go ahead.
Yeah, hi. Thank you for the opportunity. My question is again on India business. Shaunak, you mentioned you are clear about the gaps and you are working towards fulfilling those gaps, etc. According to you, how long will it take before you can catch up with the market growth rates first and then may outpace the IPM growth? Approximately, this will be how many years of effort according to you?
No, I think what we're talking about is not years. I think we're talking in months in terms of time frames.
When do you see your India growth going back to, say, a market-level growth?
I can't do the exact comment, but like I've said, I think probably seeing India is a big country, I think executing in the country is challenging. I think to get to 100% of execution for every district in the country that we cover, I can't give you an exact timeframe, but like I said, I think it's a matter of months to be something double-digit growth and beating or matching market growth.
Okay, you're confident about the steps which you might have outlined and which can help you to really pick up from here on?
Yes. We benchmarked a couple of the top two, three companies which we feel have set an example of this, and a lot of the work we've done is based on those benchmarks. In terms of companies, if we feel are UCMP compliant and have been able to deliver strong growth over the last few years, we have benchmarked those kinds of companies. We have worked on operations to ensure that we meet those benchmarks so they can get to keep aligned with our double-digit market.
Okay. On the people's part, you don't need to add any more ?
No, we don't need to add any more people. We don't need to add any more people.
Okay, it's basically more execution, more expansion on kind of?
Yeah, it's more about better execution, like I said, in every district, in every headquarter we cover in the country.
Okay. That's helpful. My second question is in India, sorry, international business. First on the U.S., Pranav, just want to understand, you have seen a pickup in the U.S. sales despite price erosion and, as you mentioned, due to volume expansion, etc. A couple of your peers have mentioned that in the U.S., they are seeing challenges talking a bit. I think in anticipation of the tariff, etc., there was a stocking up, and now it's getting unwinding. Do you see a similar situation?
No, we haven't seen it yet. Either channels stocking or de-stocking , we haven't seen because it's been so uncertain, right? I see sometimes we're talking about tariffs, and there's no tariffs, and there's tariffs, right? We have not seen that. At least from our buyers, we haven't seen it so far. I think where we saw growth in the U.S. is, as I know, as you said, as I said, we launched four products. Apart from that, some of the other older products where there was some uncertainty in the market is where the buyers came to us, and we managed to pick up accounts at a pricing that worked for us.
Okay. Going ahead, also, while the uncertainty remains on the tariff part, you will be focusing more on new launches, right, to keep pickup from ?
Exactly. I think, right. On the tariffs, there's nothing you can do about the tariffs. I have a theory that it's going to be tough for pharma, right, because what's going to happen is the issue is going to be on the high-volume wafer-thin margin products where you will have an issue with the tariffs. By putting tariffs there, those, because of wafer-thin margins, they're not going to be viable to manufacture in the U.S. as well. That's a catch-22 that's going to come. As for us, we're continuing with what we do. We're just trying to get whatever products we can, work on better supply chain, work on being a better supply chain partner. As we get a little more complex and a little more injectable business, that will help a little bit as well.
Some of your peers are, again, focusing on engaging a bit of manufacturing footprint in the U.S. as a risk management strategy. Any thoughts from your side?
No. That's something that I'm not, okay, let's put it this way. Increasing manufacturing footprint in the U.S. because of tariffs is something in my opinion, it's not something that we're considering. If there's a strategy based on U.S. business or U.S. government business, or something that you can get at a better pricing, then you would look at a manufacturing strategy in the U.S. But purely for the de-risk perspective, i t doesn't make sense to allocate so much capital for setting up manufacturing in the U.S. If there's going to be more generic pricing and competition, we are not approaching it from that angle.
Okay. That's helpful. My last question is on your API business. You mentioned pricing rose is something which impacted the performance during the quarter. Is it something specific to your portfolio, or is it an industry-wide phenomena which you are observing?
No, it's a good question. I think it's an industry-wide phenomena, and it's across the quarter. I think it's over the last six, seven quarters, as you see, our API business has been quite muted on its degrown because the API business, our API business over the last three years, has been a fantastic business, very high margin business, very high EBITDA for us. What's happening is, because again, we had a good footprint in the account for compliance, you could get better pricing in the market. Now, with this data that is getting leaked through Chinese traders, now everyone knows what stick is selling and to which buyer. That's really caused a lot of upheaval and a lot of uncertainty in the broad pricing.
Sorry, Pranav, what is this update from Chinese players you mentioned? Can you elaborate a bit?
Yeah. As I mentioned, there's a lot of data that is leaked by Chinese traders who give data about all exports from India. I think that is what is causing this. It's not just pharma. It's every sector they have data from, and that is what is causing this issue in the API business.
How do you see this business in the coming quarters? Maybe in the near term, we can see similar trends continue, but any scope of improvement?
Of course. I think what's happened is we will continue doing well. It's just the pricing that is coming to the issue, right? The pricing is coming in. We may have lost some accounts, but the inherent business and our strength of being a good supply chain partner, development partner, that continues, right? I think it's in a couple of quarters, it'll be tough, and then slowly we'll start growing again from there.
Okay. Sure. Very helpful comments. Thank you. I'll get back in the queue.
Thank you. Participants, if you wish to ask a question, you may press star and one on your touch-tone telephone. The next question is from the line of Foram Parekh from Bank of Baroda Capital Markets. Please go ahead, sir.
Yeah, thank you for the opportunity. My first question is on ROW markets. We have been doing very well in this region. Is it possible for the management to give us a detailed idea? I mean, what's going right in this region?
Thank you. Yes, the ROW part of the business has been a good business for us. If you feel over the last decade or so, the CAGR has seen well over 15%, almost 20% odd, if I'm not mistaken. It's been a very good business. I think it's nothing, no rocket science per se. I think just the clarity and strategy in terms of what markets we wanted to go, number two, and execution in terms of supply chain. At the heart of everything that's worked for us has been the supply chain execution. I think good supply chain execution has led us to good partners who trust us with the products, and we've been able to supply and grow in these markets with a better market profile.
Is this kind of growth rate sustainable going forward also?
Q1 of last year was a little muted quarter for the ROW business. That's why this quarter it looks much higher. Having said that, I expect for the full year we will grow. We will grow close to about 10%-15%, at least in the ROW market.
Okay. My second question is on the raw material cost contribution, which has come quite low in this quarter, which has aided in gross margin. Going forward, how should we look? I mean, should we look at this contribution as the base or a benchmark and go above it? How should we look at it?
Raw material cost is a combination of product mix and you know how things happen between API and generics, right? I think it will be anywhere between 25%- 30% depending on which quarter we're looking at and how the product mix is going on, right? Historically, we've been in that range. I think we'll continue to be in that range going forward as well.
Okay. Lastly, on the API, if you can just guide us for the full year API rate.
I think current quarter we are at around 19%. I think we'll be in the range of 17%- 18% overall for the full year.
That's helpful. Thank you.
Thank you. Participants, if you wish to ask a question, you may press star and one on your touch-tone telephone. The next question is from the line of Mrs. Sanjay from Renaissance Investment Managers. Please go ahead, sir.
Thank you for the opportunity. The question is in the U.S. generic business. If you're excluding the oral solids, we've got about 70 ANDAs across derma, ophthalmic, and injectables. For these 70 ANDAs, how many products have been launched, and broadly, if you can indicate what would be the contribution to your U.S. revenues?
The U.S. revenues as a total from all our businesses is about 29% of business. In terms of the products that are launched, can you just, I don't have the data, but can you just mention?
I'm referring to only these, you know, the 70 ANDAs across non-oral solids.
Non-oral solids. Okay. Sorry. How much?
You don't give a revenue breakup between the non-oral solids and OHCs?
We will get back to you offline. W e don't have it handy.
Okay. Could you indicate how many products have been launched out of these 70 so far?
We can get back to you later on this one .
Okay. Sure. My second question is, you know, I probably missed your exact number. Can you indicate your gross debt and net debt at the end of the quarter?
Gross debt was at INR 1,185 crores as of June, and net debt was at INR 967 crores.
Thank you so much.
Thank you. The next question is from the line of Saion Mukherjee from Nomura Securities. Please go ahead.
Yes, hi. Thanks for taking my question and good afternoon. Pranav, you mentioned about the tariff and its impact. It looks it's inevitable. I'm just wondering, if you have a 10% tariff tomorrow or 20% or even higher, how do you think the industry would be reacting? I'm wondering for Alembic , given your size of around $250 odd million with a wide basket of products, how in that scenario you think Alembic will be impacted? If you can just take me through your thoughts.
It's just too many variables there, and it's very tough to say. I think we have to be very clear. As I said, you have to have clarity of what we want to do as a company. As I said earlier to the last prompt about the tariffs earlier, that manufacturing in the U.S. for me right now is not making sense. I don't see it because of large shareholder capital, large capital allocation for setting up a manufacturing in the U.S. for the generic business, which we already think I think is better. It really depends on what kind of tariffs come and what kind of pass-through you can. Now, the pass-through that will go to the end consumer, it's not up to me. I would like to pass on everything. It really depends on what the competition also does.
If everybody else, they said, "No, we will work on wafer-thin margins or we'll reduce our margins [we're on the supplied losses]," the business would get dumped. The business would, of course, be unviable. As far as we are concerned, we are cognizant of our bottom line. If we feel that it doesn't make sense to manufacture for the U.S., we will walk away from some of the businesses if need be.
Currently, how would you think about your profitability, let's say, pre or post R&D at the scale that you're operating?
Our profitability right now across the ROW and the U.S. is pretty good at a pre-R&D level. Of course, there's a higher R&D allocation for the U.S. market. At a pre-R&D level, we're very healthy margin. At a post-R&D level, also, the U.S. has a decent margin. The only thing that drags down the margins for the U.S. is we're operating with facilities, the facilities which are not fully utilized. As we go along, as we have more utilization from these facilities, that will aid the margins as well. At a gross margin and at a net level, even after R&D, the margins are pretty good for all the businesses.
Okay. There is no discussion on tariff with the trade and channel yet, is it? I mean, is the industry discussing any feedback you're getting, or?
Nothing. I think it'll come down to who can negotiate or what kind of deals you c an do. As I said, if everybody else decides to take the brunt of the tariff hike, then the trade is not going to accept o ne company going. It's a lot of conversations, but I think everyone's still varying. There's a lot of variables there right now.
Okay. Thank you. Thank you. [audio distortion]
Thank you. The next question is from the line of Mr. Tushar from Motilal Oswal. Please go ahead, sir.
Thanks. Sir, just on the U.S. service side, where the launches are very tight, it's at $60 million-62 million per quarter. How do you think about this given that you have a good pick of launches in the coming quarters as well?
Yeah. I think for the US business, the quarter one was a good quarter. Moving forward, Q2 also is going to be an interesting quarter, Q2, Q3, and Q4. I expect to grow roughly 10% in the US business in all the across right now in every quarter, at least. We have a few interesting launches that are going to happen in the second quarter as well. One just got launched, the big product Entresto. There is a fair bit of generic competition. I think we should do okay on that product. The U.S., this year should have a good growth.
Specifically, for Entresto, as I understand, you have the API. We don't have API in-house, and many other players have.
[audio distortion]
We have in-house API.
Okay. Thank you . Any price erosion we have seen in this product in-house? I f you could share some?
Entresto?
Yeah.
There is price erosion, of course, because it was an innovator product and generics have gotten a fix. It just still had the launches happen a couple of weeks back. I say there is a fair bit of price erosion, but it's still a decent market. Let's see over the next few weeks how it shifts a bit more and comes in and we try picking our business.
Got it. Thanks for the information.
Thank you. The next question is from the line of Gagan Thareja from ASK Investment Managers. Please go ahead.
Yes, good evening. The first question is pertaining to the tariffs. First of all, you know, there's some, at least in my mind, there's some confusion as to whether the 25% d uties tariffs that were announced . Do they exempt the pharmaceuticals? In your assessment, do they exempt pharmaceuticals?
Yes, I think as per the whole team that I've seen, currently, it looks to me that pharmaceuticals are exempted.
Okay. Therefore, are you saying that you know it's only through the Section 232 that subsequently, you know, tariffs will be announced ?
Exactly, exactly.
Okay. The second one is, you know, under the HTS classification for tariffs, the determination of the country of origin, you know, is dependent upon where the substantial transformation of the products happens.
If the API comes from China or if you have a multi-API product where, you know, significantly there is coming from China and some is coming from India, does it mean that the tariffs on the product will depend upon the growth of API and therefore, you know, again, some degree of complexity there?
I don't think so because if that is there,
It is right now in the US.
See, anyway, right now, in terms of generics, there's just not enough capacity. Forget in the U.S., all over the world, to deal with the formulation generic volumes. If you put the API into it, then where are you going to get the product from? API, there's almost nothing. No API manufacturing, generic API manufacturing facilities in the U.S. There's a dime a dozen. I mean, so there's hardly you can count them on your fingers, you know.
I don't believe that API will come. If that comes, it'll be catastrophic.
My point is, while you know that itself is a question by itself, my question is that let's say you have a product, you know, manufactured by an Indian company which purchases its API from China. Under the HTS tariff code, the tariff is, you know, determined by the country where the substantial transformation of the product has happened. In which case, if you know, the API is sourced from China or the final formulation, you know, it would make, it would be a reasonable inference that substantial transformation has happened in China. Therefore, the formulation tariffs applicable to China are applicable on the product, or is it the formulation tariffs applicable to India, which are applicable on the product?
I think from India only, not China.
Okay. All right. In terms of your U.S.
business, can you perhaps, you know, give some idea as to how do you see the full year panning out this year, especially, you know, given in context of the number of approvals you've had and as this scale-up going ahead?
Yeah. I expect the U.S. business to grow for the full year anywhere between 10%- 15%. We have a whole, I think we've launched about four products in the U.S. in Q1, I think. The rest of the year, we'll launch another 10- 15 products. We should have a fair bit of launches in the U.S. market, and we'll pick up some shares, we believe. I believe about 10%- 15% is what I'd expect for the U.S. business to grow this year.
Okay. How should we think of the India business?
I mean, the first quarter, you indicated, you know, was a bit tougher, and you had some constraints around the UPCMP. Is the whole year going to be a bit impacted by these changes, or do you think a recovery is in the works in the next quarter or two?
No, it's, like I said, it's a part of the process. It's not a year-long thing. It's not a yearly thing. Like I said, it's a matter of months because we're working on it SOS to resolve it. I think, like I said, our timeframes are in a matter of months, not in the year. Like I said, that's what I said.
Can you give the gross debt numbers and also how, you know, you see the debt sort of panning out through the year and roughly what numbers you could throw here?
You meant on gross debt?
Yes.
Gross debt was at INR 1,185 crores, as I mentioned earlier. Net debt was at INR 967 crores. This is still close to what we had at the end of March in terms of the gross debt. We see that, of course, the debt movement will depend on how the working capital ranges during the quarter. We'll be mindful of what we need to borrow going forward.
Is it reasonable to presume that, going ahead, the debt can reduce and reduce substantially in the year?
Maybe we discuss that in the next quarter. We see how the trajectory of business growth is and what is the need for investing in working capital in the next few quarters considering the dynamics in the U.S. market specifically, right? We need to wait on what. I'll hold my comment on how the net debt will move, whether there is going to be a drastic reduction or not. We'll get to see in the next couple of quarters.
Okay. Thank you. I'll get back to the queue. Thank you for taking the question.
Thank you. The next question is from the line of Damayanti Kerai from HSBC. Please go ahead.
Hi. Thank you for the opportunity again. Pranav, you mentioned in some of the plants, utilization is right now very, you know, low. At the network level, at what utilization are your U.S. plants operating, and how do you see this moving?
You don't get plant-wise utilization, but just to give you a flavor, formulation plant F1 is the largest plant that's at practical peak capacity, right? At the practical capacity, they're running at full capacity. The API plants are running pretty cool as well. It's the injectable, derm, and the onco, and the new OSD facility, which is actually the new OSD facility is ramping up now, and that's at a decent capacity utilization. It's just the injectable and the onco and the derm facility which are a little lower in terms of capacity utilization.
Okay. My second question is, during the quarter, your depreciation expense moved up notably. Is this a new base to look for?
Q1 of this year, we commissioned our indoor plants, the new manufacturing facility for the branded business. That has added to the depreciation cost.
Okay. The current quarter represents the new base to look for the depreciation number. Now the.
Yes.
Okay. Thank you. Yeah, that's good.
We also guided for a CAPEX of about INR 400 crores at the beginning of the year. It will not happen all in one quarter. As and when it gets capitalized, that will also flow through into the depreciation.
Okay. Can you remind us where is this new, sorry, where is this capital expenditure getting deployed?
As we said in the last quarter call as well, most of the projects have got completed in terms of capacity augmentation. This CAPEX is going to be more towards maintenance, replacement, and debottlenecks wherever required.
Okay. It's majorly for maintenance, and maybe it's very related towards the expansion or in the upgrade part?
Yes, that's right.
Okay. That's helpful. Thank you.
Thank you. With this, that was the last question for the session. I would now like to hand over the conference over to Mr. G. Krishnan for closing comments.
Thank you for all the questions. I hope you got clarity on our performance relating to quarter one. In case there are further follow-up questions, please do reach out to the team. Thank you.
Thank you, sir. Ladies and gentlemen, on behalf of Alembic Pharmaceuticals Ltd., we conclude this conference. Thank you for joining us, and you may now disconnect your lines.