Aarti Pharmalabs Ltd Concall Notes - Feb 2025 Financial Performance: Achieved record-breaking quarterly performance in Q3 FY25. Consolidated top line of ₹538 crores, a 20% increase YoY. EBITDA was ₹129 crores, up 34% YoY from ₹96 crores in Q3 FY24. Profit after tax for Q3 FY25 was ₹74 crores, indicating a 40% increase YoY from ₹53 crores. Business Segments: Operates in three segments: Xanthine derivatives, API Intermediates, and CDMO/CMO. Xanthine derivatives contributed 44% to turnover; highest quarterly volume sales recorded. API and Intermediate business contributed 42% to turnover; best quarterly revenue performance achieved. CDMO/CMO segment contributed 13% to turnover; currently working with 21 customers and 56 active projects. Market Dynamics: Facing competition from China, with spot market prices declining by over $1 per kg. Long-term customer relationships and world-scale capacity are key competitive advantages. Shift towards regulatory-oriented customers to mitigate price volatility. Operational Updates: Temporary shutdown of Vapi plant due to a notice from the State Pollution Control Board; restarted after two weeks with no long-term impact anticipated. Brownfield expansion for Xanthine derivatives capacity from 5,000 to 9,000 metric tonnes is progressing as planned. Greenfield project in Atali, Gujarat for CDMO/CMO and Intermediate manufacturing is facing minor delays; Phase-1 expected to be commissioned in Q1 FY26. Sustainability Initiatives: Solar energy project of 21 MW DC at Akola, Maharashtra commissioned in Q2 FY25. Another solar project of 9 MW DC for Gujarat units expected to commission in Q2 FY26. Plans to install multi-fuel boilers using bio briquettes at two plants in Maharashtra in Q4 FY25. Growth Guidance: Optimistic about exceeding previously provided guidance of 10% to 12% EBITDA growth for FY25. Anticipates significant growth in the CDMO segment, with a target to exceed last year's sales of ₹170 crores. Challenges: Price corrections in the Xanthine segment could impact margins; however, management is focused on maintaining high-value contracts to mitigate this. Some CDMO/CMO sales may be pushed to Q1 FY26 due to temporary plant shutdown. Future Outlook: Management remains confident about overall business prospects, with a focus on revenue growth, cost optimization, and operational efficiency. Plans to provide detailed guidance for FY26 during the next conference call.