Ladies and gentlemen, good day, and welcome to the Q1 FY 2023 earnings conference call of Cohance Lifesciences. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rishabh Barar from CDR India. Thank you, and over to you, sir.
Good day, everyone, and thank you for joining us on this call to discuss the Q1 FY 2023 earnings for Cohance Lifesciences. We have with us Mr. Venkat Jasti, the Managing Director, and Mr. Venkatraman Sunder, Vice President, Corporate Affairs, and Mr. Subba Rao, CFO. Before we begin, I would like to mention that some statements made in today's discussion may be forward-looking in nature and may involve risks and uncertainties. Documents relating to the company's performance have been mailed to you earlier. I now request Mr. Jasti to share his perspectives on the performance and outlook. Over to you, sir.
Thank you, Rishabh. Thank you, everyone, for tuning in, and good evening to you all. As you know, Suven results will not be comparable quarter-on-quarter basis because it has its own parity because of the nature of the business. You can see that quarter-on-quarter there is a little less growth. I mean, little less revenue, but compared to the last year at the same quarter, it's much better growth both in terms of revenue and EBITDA profitability, all aspects. Last year is a very good year for us. As you know, some of these old molecules which were repurposed for the COVID as additional sales. Also, there's one other COVID molecule was launched by the global innovator. Those things were there, and they may be short-lived ones, as you know, because it's a pandemic.
You may not get that every year, and that may be considered as a one-off. that filling that gap for this year itself is going to be a task for us. that we are hopeful that we will do the way last year and at least meet the numbers of the last year. One thing I want to bring up is there are costs, increased costs due to the logistics, due to some of the raw materials especially solvents going up and the higher inflation. All these are affecting a little bit on the profitability, but we could able to more or less maintain this profitability even under these trying circumstances. As I was telling, the last results were because of the COVID-related activity and all that stuff. There is a little transformation.
This year will be a transformation year because the global innovators themselves are now coming back to the original goal of inventing molecules for all of the diseases rather they are concentrating only on COVID molecules. There is a little gap that is going to happen. Since I have only six months visibility, I am telling you right now it will be whatever we're going to perform is going to be like last year's, filling in the gap of those that are lost to the COVID. We hope in quarter three, we have a better idea how that will wrap up and surpass the last year's numbers.
The other thing what I want to tell you is, the little less sales in the specialty chemicals and formulations is the reason why it was quarter-on-quarter basis, so it's little bit less revenue growth this quarter. That will keep changing quarter-on-quarter element in other quarters anyway. As you know, we have gotten Casper in April, and we were telling you last time that a few months later, we should have the inspection done by the FDA. I'm glad to inform you that on 26th to 29th of July, the inspection was carried out by the U.S. FDA, and the inspection passed without any observations.
Already we have filed about four ANDAs, and the goal dates ranging back from March 2023 onwards. The revenue accretion will take place only post that. Another 10 will be filed within this year. The revenue generation from Casper will happen post that. I mean, in the 2023, 2024 timeframe. We're all hopeful and all very confident. This is the natural progression, and we're happy that things are going well without any delays. In general, things are better. I mean, as I was telling you, the getting the new projects are a little bit slower because of the transformational process from the big pharma.
We'll know by November, December timeframe when the new budgets are taken care of by the pharma, then it will, based on the talk we have with the customers, so it will be coming back to the normal and, it'll have a good traction in the CDMO. I just want to give you these qualitative things and then, I look forward for your, comments and questions, so I can answer you better.
Should we open up for questions?
Yes, please.
Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone wishing to ask a question may please press star and one on your touchtone 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 Sudarshan Padmanabhan from JM PMS. Please go ahead.
Yeah. Hello. Thank you for taking my question. Can you hear me, sir?
Yes.
Yeah. My question is on the cost. As you had, you know, talked in the fourth quarter and also in the opening commentary that, you know, raw material costs, the solvent cost as well as the transportation costs being higher. My, you know, question to you is when you're looking at it from a, you know, trajectory perspective, how does the cost look when we are in the second quarter? Have we seen some kind of cost coming off, and how are you placed on this side?
Not that much difference we see. I mean, whatever it is, that they put up compared to earlier quarters, but they're still continuing.
Sure. My second question is, you know, we are embarking on this, you know, CapEx spending INR 200 crores annually, and that is also, you know, you had mentioned that, you know, one of the specialty chemicals, you know, could see commercialization later this year, where, you know, a bunch of pharmaceutical CRAMS products which you know are in the late stages can get into commercial. If you can give some color, I mean, I'm not talking about on a quarter-to-quarter basis, but when we take, say, the next two to three years, I mean, we talked about, you know, Casper, you know, gaining some momentum going forward, say from FY 2024. Specifically from the pharma CRAMS and specialty CRAMS, how do we see the commercialization gathering momentum, especially in the light of CapEx?
It is not in our hands. As I was telling every time, we see the success of the molecule that the clinical trial will give us the opportunity to sell the product. Even the customer will not be knowing the results until the trial is over. Then only we can. As of now, there is no indication, but going by the past few years, the track record is much better. Sometimes it can happen two or three molecules can go in a quarter or not. Sometimes two, three quarters nothing can go also. In general, the track record, I mean, seamless transition of the projects are happening.
With the new what is coming in at the end of the year for the R&D proposals and going forward with all the other indications other than the COVID, we see based on the talks we had better traction. Better. Naturally, the traction and hopefully the success of the molecule that the clinical trial will give. I cannot give you quantitatively, but qualitatively we are very confident that things are moving in the right direction. Quantitatively I cannot give because I don't have any data, neither my customer has the data.
Sure, sir. Can you share how much of molecules in the CRAMS and specialty are in the late-stage, which can potentially get into the commercialization?
I mean, again, you see the number has no meaning in this space. I mean, if I say 100 and only 50 to 20 are only giving you the revenues. See, it is not a percentage like in a generic I can give you a percentage basis. It can give you a 0 to 1. There's no in between. So number of molecules has no meaning because it's only the mix math is the one that's giving us the things and also the continued revenue generation from the already marketed products. But giving you a guidance based on how many we covered and all that stuff is a very big gap, and we don't have a visual on that, neither my customers.
Sure. Thanks a lot for the agenda.
Thank you.
Thank you. The next question is from the line of Ankush Agarwal from Surge Capital. Please go ahead.
Yeah. Hello, Mr. Jasti. Thank you for taking my question. Firstly, on opening comment that you mentioned that last year we had some COVID-led extra revenues and this year the organic growth would largely lead to filling up those revenues that won't be there. Would you be able to quantify how much of FY 2022 revenues were because of this spike which won't be available this year?
About INR 120 crores.
INR 120 crores. Okay. Which quarters we saw that impact? Because I remember last quarter Q4 FY 2022 asking you this question if you know, the higher growth of 40% that we were seeing for last two quarters, if that had some impact of COVID. You mentioned at that time, you know, that this is broadly not COVID-led growth. This is largely, you know, organic growth. What changed that?
No, it is, I mean, it was all quarters and the third and fourth quarters were a little bit higher, especially fourth quarter. What I'm saying is the organic growth will fill that gap. That's what based on the existing orders and also based on the communications we have, I will figure out the units.
Okay, okay. Secondly, sir, on the Casper business. Now we have this approval in place, and you also mentioned that the timeline when you start seeing revenues. Would it be possible to share more color on the kind of opportunity that is there for Suven in terms of, you know, the end market size of the three products that we have filed?
See, we are not going after the big blockbusters. We keep telling you. I mean, these are the niche molecules, and they're small volume molecules. The total number will be filed by 14-15 in Casper itself. Out of that, four are already filed, where the inspection has taken place. The goal is to expect starting in March 33 onwards, and one maybe below before that. At this time, it's very difficult for me because until we get into the year or two before we can give you a quantification.
You know, despite, you know, not molecule specific, but, you know, what do you see that Casper would bring forth to Suven in the next three, four, five years? You know, some guidance on that.
Say that again.
Like, not molecule specific in terms of end market size, but as an opportunity for us, Suven, what kind of, you know. I remember in one of the interviews you mentioned that it could be INR 300 crore. Sorry.
Yeah. I mean, by the time 2025, 2026 comes, it will be around INR 300-INR 400 crore, we expect the formulation business to drive.
Okay. Just a clarification lastly on this. This is a pure, profit sharing model, right? We are not getting any manufacturing margin out of it, so it's not a CMO kind of-
All together. You get both put together. The sale price, which is, cost plus and also the profit sharing.
What kind of percentage is that, sir? Is it like normal 50/50 or so?
No, it'll keep changing depending on the molecule.
I'm sorry. Okay. Got it. That's all. Thank you.
Thank you.
Thank you. The next question is on the line of Amit Khurana from Dolat Capital. Please go ahead. Amit Khurana, your line is on the talk mode. Please go ahead. Mr. Amit Khurana, we are unable to hear you. Please go ahead. As there's no response from the current participant, we'll move on to the next. That is on the line of Darshit Shah from Nirvana Capital. Please go ahead.
Hi there. Thanks for taking my questions, and congratulations on these good results of this quarter.
Thank you.
You clarified that around INR 120 crore last year was due to this COVID drug. Could you tell us roughly how much was, if at all it was in this Q1, first quarter? Is there any contribution for the COVID drug?
I mean, we are not giving drug by drug things, and we're only giving you the combined because so it doesn't make sense to give you something which is not going to be repeated. Then again, people will just put in exercises and coordinate it, and then we will not be able to meet that. The best thing is to give you the things, especially the COVID-related drug, as I said last time, and so it will be one-off kind of thing. One-off means one year, something like that.
Yeah. Now only I wanted to understand because you said, out of the INR 120, major contribution came in Q4 in fourth quarter. If you look at Q1 numbers currently versus last year's Q1, we have done fairly well, and we have grown around 30% year-on-year. Just wanted to have a read on that.
You cannot compare, say, like generics, where we have same product given. You cannot compare. The product mix will be there, and the valuations of the products are also there, and the stage of the product also is there. Many variables. You cannot compare. Year-over-year, yes, but not quarter-over-quarter.
Got it. If you look at, you know, annual report this time, you're talking quite a bit about, you know, forward integrating, you know, whether we want to make intermediates to more intermediates and KSMs and APIs, and also full lifecycle management services for a few of our global innovators. You're informing that we are in conversation with few of the clients, but that has been delayed due to COVID. Where does it stand now, and how which
We are restarting. We are restarting that activity with the customers. The travel has not started yet. The activity which we are starting now hopefully will culminate into their travel into India so that they can start the activity. We are started all over again.
This is going to be a very good opportunity to materialize in next two to three months?
Yeah. It takes a lot. Even for any change in the way that it takes at least a minimum of three years before you see any tangible results. We hope. Unfortunately, we started this activity way back in 2019. The COVID came in, and we lost 2021 completely now. I think, 2025 timeframe, we should be able to get some, hopefully some kind of a traction into this activity of forward integrating it and also the lifecycle management.
Sir, my last question to you is on how much was the cash in books now after paying off Casper Pharma around $20 million?
We have INR 380 crores now.
Okay. Thank you, sir, and all the best.
Thank you.
Thank you. The next question is from the line of Abdulkader Puranawala from Elara Capital. Please go ahead.
Yeah. Hi, sir. Thank you for the opportunity. Congrats.
Sorry to interrupt, sir. Yes, your audio is sounding very soft. Can you speak a bit louder?
Is this better?
No, sir, it's still the same.
Yeah. Is this better now?
Yeah, much better. Thank you. Please proceed.
Yeah. Hi. Hi, sir. My first question is on the CDMO side. From the last two quarters, I mean, you know, if I just look at the quarterly sales run rate, I mean, we are at close to INR 210 crore. Since just to better understand, you know, this sort of a revenue, I mean, whether it is the chemical molecules which are driving the pace or there are some traction what you are seeing on the commercial side. Again, I'm not looking out for any specific numbers, but directionally if you could highlight would be useful.
It's a combination. It's 60/40. It's tilting towards the commercial.
Okay. Also secondly on your guidance. Earlier you have been guiding for a mid-teen, 10%-15% growth. Are we still maintaining that on the INR 120 crore base what you have, or excluding that we are maintaining the guidance?
No, as I mentioned in my earlier opening statement, last year's growth, which is because of the COVID, which is to the tune of INR 120 crores, that we filling that gap itself organically is a challenge for us, and we are hoping that it will be done. 10%-15% growth I have not given this time because, as I said, this is a transformation year, not only for us, but also for the customers who are always I mean, mainly focused on the COVID is now coming back into the main field into an R&D. That will give us a traction to the new projects and that will give you things. In the end of third quarter, I think we're able to give you much better growth.
As of now, we are sticking to the last year's numbers.
Okay. Sure. Just finally, on the CDMO specialty chemical business. Here we had added one molecule, which had got commercialized towards the start of FY 2022. How is the traction there? Because you know
No, that is an initial requirement only because unlike, this is not going to be a global one, unlike the formulation. I mean, unlike the human medication, so it will be a small quantity and it will be at least a year and a half or two years before we get the repeat business.
Got it, sir. Thank you so much, and wish you all the best.
Thanks a lot.
Thank you. The next question is from the line of Amit Khurana from Dolat Capital. Please go ahead.
Yeah, thanks for the opportunity. This is Rashmi Sancheti from Dolat Capital. My question again on CRAMS business. Can you give us the total number of molecules? Can you give the breakup in phase I, phase II, and phase III currently we have?
We have stopped giving you that breakdown because the numbers are not giving you right indications. Because if I give you, as I was telling earlier, if I have 100 but my revenue generation is only on 20, the number has no meaning. We are especially with that a very difficult thing for us to go ahead and to tell which one gives you this and which one is going to give you that one, which phase. Because there is a gap for everything. For phase I to phase II, it is a year gap. For phase II to phase III, it's a year and a half to two-year gap. Pre-II to last, it's a three-year gap. All these things. It's really difficult for us.
That's why we're doing a combined activity in the CRAMS. Both the commercial and the what do you call, the pre-clinical.
We had five products in phase III. Out of that also we were expecting that, you know, one product will get commercialized.
I have not gotten any indication so far. Phase III, as I said, it takes three years before you see any results. Out of that, only one is a one and a half year old. The other ones are one year old only. It's a long way to go. That's why we cannot give any guidance on that and also breakup also.
As of now, sir, today we have total, five products in the commercial stage, right? Which we are supplying, and the last being the anti-infective, which is a COVID molecule.
Yeah.
Sir, when you said that, you know, CRAMS has really done well because of both base CRAMS as well as, because of the commercial supply. Commercial supply, you meant that, you know, the fifth molecule we have supplied in a big way in this quarter, and how is it expected in the subsequent quarters?
We didn't say it's a big way. We have supplied and also I said that this COVID molecule is going to be a one-off kind of a thing. You cannot expect that to continue ramp up. That is not the indication what we got from the customer.
Okay. Sir, on specialty side, currently we have around three molecules, right?
Yeah.
Any particular guidance like earlier you used to always say that, you know, we will be doing a flattish growth because the third molecule will gradually pick up. Do you still stick to your guidance that, you know, we will be doing more or less what you call flattish growth? Or we see that, you know, that molecule can pick up?
Yeah, as of now, I stick to the same old guidance since the third molecule, as you said, at least one year away before we get a repeat business. So that award will not be there. So with that also, I just stick to the same thing. Maybe 5% or this way or that way can happen. Other than that, not much difference.
Okay. Sir, on formulation business, you know, you said that Casper, we have filed four ANDAs. Can you give us, you know, organically how much ANDAs we have filed? I think we have around eight products on shelf in the U.S. market, right? If you can give, you know, how much Suven has filed or if you can just club totally and give the numbers to us.
As of now, we have filed about 20 in Suven. We are not talking about Casper. Okay? Out of that, 10 are approved, 10 are launched already. In Casper, we have filed four and the goal date starting March 2023 onwards. Another 10 will be filed during the year in Casper. Another seven or eight will be filed in Suven. It will be that by that time, about 40 will be filed by the end of March 2023. All together.
Sir, what did you say in FY 2023 Casper? Are we expecting any launches from this Casper? Or, you know, we expect that it will take around one or two years' time.
No, no. It will start doing from March of 2023. That means the results will be in fiscal 2034.
Okay. Sir, my last question again on the breakup. You know, in your overall formulation and other services of around INR 11 crore, how much is the formulation business in Q1 FY 2023 and versus quarter four FY 2021?
That's formulation only, no?
No, sir. Whatever numbers we are doing.
Services will be, I mean, INR 1-INR 1.5 crore.
Sorry, I didn't get it, sir. There is a formulation and tech services.
Services will be less than INR 2 crores.
Other services would be INR 2 crore you said.
Yes.
Rest all is for at least INR 8 crore is formulation only.
Right.
Sir, similarly, last quarter in Q1 FY 2022?
I don't have the numbers handy right now.
Sir, INR 25 crore was the total reported sales from formulation and other services. Roughly, how much was the formulation that time?
Formulation was INR 11 crores.
INR 11 crore. Okay. It has really declined.
Yeah. I guess, yeah. It depends on the when we launch and all that stuff. When we launch, that time is more. Then when the repeat business comes, then it takes time. You can have it more maybe next quarter.
Okay. All right, sir. Thank you. That's it from my side.
Thank you.
Thank you. A reminder to the participants. Anyone wishing to ask a question, may please press star and one. The next question is from the line of Sachin Kasera from SVAN Investment. Please go ahead.
Good afternoon, sir. One question on the formulation business. Earlier, you had mentioned about four things that you are putting in there. You also are mentioning that once they start to do well, there will be a significant in growth and profitable driver. Can you give us some sense, you know, which year are we looking when all these four things start to do well? Is it like FY 2025, 2026? Any broad idea you can give me?
As I said, by the time 2025, 2026 comes in, we should have about INR 300-INR 400 crores on both sales plus profitability numbers put together.
Okay. I thought INR 340 you were mentioning was only Casper. The INR 340 is including Suven's own formulation.
The Casper is not even a starter, right? We are putting it together.
Secondly, sir, you have mentioned about new service offerings of forward integration and lifecycle management for existing clients. Can you give us some more perspective on that, sir?
I mean, as I said, we started this activity way back in 2019, and some of the customers, they showed willingness, and they want to put resources to it, but unfortunately, COVID stopped all that activity. We are restarting that activity this year because now they have started slowly coming to visit facilities. I think it will take another four to five months and six months. Hopefully in the calendar 2023, calendar year 2023, we should be able to have them come here and then do the diligence and all that stuff. If everything goes well, at least it takes three years before you can get any tangible results out of this whole initiative.
What the 340, sir, can this be a good part of our revenue, or it is just a small extension to what we do? Or can it be a significant revenue driver over the three to four years?
The intent is there and it is there. There's a speculation to give a huge run-up opportunity, right? Naturally, it will have value-added things, and it will be additional revenue and all that stuff. Additional ramp-up eventually. Right now, even we have not started yet, even getting an approval. It's not fair on my part to give you a number on that. It will be accretive and additional. It may start slowly, but it will increase naturally like a correct success.
Sure. Finally, sir, can you give some status update on CapEx? How much you plan to do in FY 2023 and if anything on 2024 also, if you can give some visibility.
FY 2023 will be about INR 235 crore-INR 250 crore altogether. Including the replacement CapEx.
2024 also we should see some similar numbers?
Yes, sir, 200 to 50 caps. See, this is already 600 we have marketed. This is the first tranche we are doing this. It is a replacement CapEx for the Suryapet unit. We're putting a new block instead of old block. The volume may be a little bit higher, but it's not going to be too much of a higher volume creation because it's only a replacement of the 35-year-old block with a new block. It's modern equipment and modern systems and meeting both the EHS, the safety and regulatory, all aspects are taken care of for this.
Sure. Lastly, any approvals expected soon for the medicines? This is on the ANDA side. You mentioned that around 10, some 15, 16 we have filed and some are pending.
Yeah. Now nothing is visible. Yeah, we are expecting five or six to come in the next three to four months.
Good. Great. Thank you and all the best.
Thank you.
Thank you. The next question is from the line of Darshan Shah from White Equity. Please go ahead.
Yeah, thanks for the opportunity. Just a bookkeeping question from my end. What would be the revenue contribution from top two customers in FY 2022?
It keeps changing. Why restrict to one year? Because every year, every quarter it keeps changing because if I supply commercial molecule to the same customer, he will be number one customer that quarter. Then there will be a gap of six months to nine months when again it will come. It's very difficult, sir. It is out of the top six people, it keeps changing number one and two. Only specialty chemicals completely always is number one.
I was specifically asking for this because, in this year's annual report, we have not.
I can't really give you a breakdown of every customer by customer. It's not possible because it's not consistent. I cannot tell you. If I say a customer is giving 40% discount and next quarter he may not be anything, so it doesn't make sense now to give instead of the numbers. You need the final number and the profitability, not customer by customer. The third, it is switching between six top customers and out of the top 20, it keeps changing.
Okay. That is from my end.
Thank you.
Thank you. The next question is from the line of Girish from White Oak. Please go ahead.
Yeah, thank you for taking my question, sir. Just one clarification. Like last year you said that in pharma CDMO there is INR 120 crore of, you know, one-off. This quarter in the INR 210 crore, is there any one-off or this is, you know, like the base?
What is that? Yeah, small amount of one-off is there, yes.
Okay. Sir, last question. On this INR 600 crore that you said, just can you refresh, like, INR 200 crore in replacement and rest is on the-
Let me give you once and for all, sir. I keep telling and you people keep asking.
Yeah.
INR 600 crore we are taking. Out of that, INR 400 crore is replacement CapEx. One is for the, what you call the Suryapet block, that's the INR 200 crore. When we have to move on Visakhapatnam R&D, then that will be for INR 200 crore. That can be next year or a year after. The other INR 200 crore is only mainly for the technologies and for the additional block in Pashamylaram. As and when we see the traction and we have to do proactively ahead of time, that most probably we'll do during the next year. That will be next year. We have started only the replacement CapEx. Suryapet, we just started.
We have spent about INR 40 crores, INR 35 crores-INR 40 crores now, but that INR 200 crores will be spent before the end of March, so that the replacement block will be operational.
Understood. This year CapEx is largely replacement CapEx, the INR 250 you mentioned.
Yes.
Okay, sir. Thank you.
Welcome.
Thank you. The next question is from the line of Abdulkader Puranawala from Elara Capital. Please go ahead.
Yeah. Thank you for the follow-up. Just one question on the formulation business. It's been said that by 2025 it would become a INR 300 crore-INR 400 crore of the top line. Just wanted to also understand how would the margin profile look of this business? Would it be in line with what the company-wide margins are? Or some color on that will be helpful.
Yes. I want to give clarification to everyone that it's unlike the pure generic formulation. This is like a CDMO activity for us, and our margins will profile to almost in the same level as not of the full tranche, but in between the specialty chemicals and tranche.
Got it, sir. Thank you.
All right.
Thank you. The next question is from the line of Mayur Parkeria from Wealth Managers (India) Private Limited. Please go ahead.
Good evening, sir. Am I audible?
Yes, sir.
Yes, sir. Good evening, sir, and good set of numbers, sir. Sir, just two questions actually, something related to the previous one only. The CRAMS business, the Casper business, which, we, you know, earlier had indicated that it's a relatively lower margin compared to our base business. Will FY 2024 actually be, given whatever scale-up happens, will it impact the weighted average margin at the company level or the business will still be small enough that the overall margin may not impact so much?
It will not impact. As far as we are concerned, that's what our guess estimate is, but only time will tell. As of now, based on the, whatever little experience we have with the formula supplied only in last few years, and based on the products we are choosing and the profitability, I mean, what do you call it, profit sharing aspect. We think we are in a better shape than the most of the other guys. Volumes may not be tremendous like other people.
Right. Okay.
Right.
Sir, the second one was actually same thing, the block which we are replacing right now, is it that because of the continuous CapEx continuously going on, there is a constraint on the revenue growth from that side. Had that not been then could we have done better?
Nothing like that. I mean, see, we are talking about, you know, safety aspects, the 35-year-old block and also regulatory constraints, which we need to take into consideration. This will give an opportunity to do the forward integration products rather than only API stage intermediates also. All this will happen, but, there's nothing like, not having done with us, anything like that. I haven't done will gain anything because neither the volume is growing up other than the regulation, I mean, upgradation is taking place. What happens is some cost will be better because those days we have smaller size reactors, now you can take a bigger size reactors. Naturally, throughput will be more. The consumptions will be better, the throughput will be better.
Some cost advantage will be happening. That all will happen in due course of time.
No major impact on the capacity we currently have because of that. That's definitely.
No. Replacement means we are going to replace this block only for once this is in place, the other one will be taken off.
Okay. Right, sir. Thanks for answering this.
Thank you.
Thank you. The next question is from the line of Ankush Agarwal from Surge Capital. Please go ahead.
Yeah. Again, just clarifications, you just mentioned that the formulations margins will be somewhere between the specialty chemicals and pharma CDMO. Did I hear that right?
Yes.
sir, you know, going back again to what you said in Q4 FY 2022 that, you know, formulation margin will be somewhere around 25% EBITDA margin. again, there is a difference between what you have said earlier and now what you are saying now.
What is that again?
You know, in Q4 FY 2022 conference call, you said that formulation EBITDA margin would be 25%. Right? Now you're saying that-
You only heard me there, but you all, after that I also came back and said that my initial guess estimate is wrong because I did not have much experience on this side. Now that we have some experience on the profitability, we have toned it down that number, not 25% of the total volume. I said last time itself, not with this time.
No, you said 25% margin, not margin volume.
I don't know. I said it already. If not on air, at NBP maybe. Well, I told already clearly. Previously I did not, I expected that the 25% should happen, but that did not happen. On profitability side, we are very happy.
What I'm saying is, you earlier mentioned that, formulation EBITDA margins would be 25%, right? Now you're saying that formulation margin would be somewhere between specialty chemical and the pharma CDMO. That would be like 35%-40% kind of a EBITDA margin I'm seeing.
I never said 30% EBITDA margin. I said profit sharing. Profit sharing changes. It is 50%, 40%, 10%, 25%. When you say profit sharing is a pure, this, profit. But to that, add up this, whatever the plus, I mean, cost plus basics. It will be more than what number is actually, you know, because that way you have to look at it.
Thank you. The next question is from the line of Ranvir Singh from Edelweiss. Please go ahead.
Yeah, thank you for taking my question. Just one clarity. On ANDA filing, you indicated that total 40 ANDA would be filed by end of FY 2023. Just wanted to understand, that,
Together, both places.
Sorry, come again.
Both in Suven and Casper put together.
Yeah, I wanted to understand whether Casper that all the ANDAs would be partners or there would be some of them directly will be selling.
No, no. I have six customers already, including Rising. Right? So if the bulk of it will be for the Rising because all the Casper things will be for Rising, as you know. In Suven, it is spread out to all the other people also.
Rising is not the only partner, I think.
As far as Casper, it's Rising the only one, but in Suven it's six customers are there already.
Okay. For example, if 20 ANDA is filed on like Casper, that all 20 ANDA will go to Horizon Pharma, right?
That one, Casper, yes.
Okay. Yeah, that's it. That's clear.
Thanks.
Thank you. A reminder to the participants, anyone wishing to ask a question may please press star and one. As there are no further questions, I now hand the conference over to the management for the closing comments.
Thank you everyone for tuning in for this quarter results of Suven Pharmaceuticals Limited. As I said, the last year is a good year, and there are some one-offs, and those one-offs will be built usually, I mean, organically this year. The transformation at the customer level and also the transformation from the COVID-led to other growth, we're not able to give you any additional guidance other than meeting the last year's numbers. Hopefully, I'll be able to give you a guidance at the end of this third quarter, and hope to surpass the last year's numbers. That's all for now. I thank you again for tuning in, and talk to you next update after the quarter two results. Thank you.
Thank you. Ladies and gentlemen, on behalf of Suven Pharmaceuticals Limited, that concludes this conference call. We thank you for joining us. You may now disconnect your lines. Thank you.