Erez Israeli: So, yes for both. The caveat is still our business is not that big. So I cannot say but it’s an overall global trend, but the trend that we see is the growth. And we do invest in capacity both in the lab as well as for production, for products that we have contracts and we know that the capacity will be, of course, depraved by those contracts.
Shyam Srinivasan: So then I’m just trying to understand from a capital allocation standpoint, will this be significant for you or you think we have enough other projects in the pipeline for us to be or do you think this will be a small part and will not be ramping up?
Erez Israeli: With CDMO, it’s not — the overall scheme of some factor, which we love with it, but it’s a business that should go from tens of millions of dollars to hundreds of millions of dollars with expectation. But in the overall scheme of things of this, the overall size of the company is relatively small.
Shyam Srinivasan: Got it. Helpful. Just a second, it’s a financial question to Parag. I’m just looking at your disclosure around net cash generated after removing taxes. I’m looking at FCS, right? So it’s been, the conversion has been low. So just want to understand, I know there has been an acquisition you paid out for in the quarter one, but just want to understand either in terms of CapEx or in terms of intangible buildup, is there something that we need to keep in mind?
Parag Agarwal: So I think the only thing I would point out is what it is mentioned, which is, we are investing in strategic inventory buildup. So we are investing in new product pipeline buildup also in, because of the supply chain, the sea routes disruption, we don’t want to, lose any sales. So we are also increasing inventory in our front end market. So it’s primarily the working capital impact, apart from the sea level increase, which is aligned with normal sales. So that’s the key reason. Otherwise our cash flows on various fronts continue to be healthy, the conversion is healthy.
Parag Agarwal: Got it Parag. Thank you and all the best.
Operator: Thank you. [Operator Instructions] The next follow up question is from the line of Kunal Dhamesha from Macquarie. Please go ahead.
Kunal Dhamesha: Thank you for the opportunity again. Just continuing on the last question on the inventory buildup. So how much of our product would be probably be going through sea route now and anything going to red sea route as of now?
Erez Israeli: So the majority of the products are going through the sea route, Actually, the situation creates an opportunity actually to move something by air. In a strange way, certain products even better to be by air now. But of course, this is a volatile situation and may change. But in general, we are trying to press the majority. The majority means for us it should be 80% plus. The second one is that we are trying to have as much inventory in the U.S. very close to the customer is part of our service. To address customer needs, we feel that as an advantage for us as we can give the customer a service that they may not get from others. So this strategy, of course we have a healthy biological health.
Kunal Dhamesha: Sure. And just one related question in the U.S., over the last three to four quarters, how has the one-time or short-term supply opportunities behaved for you? Are those supply opportunities increasing when we come into you or decreasing in the last three to four quarters?
Erez Israeli: I would say that the one-time situation is not big and there is no tangible trends in that. So it makes more of the effect that if we are gaining share, we are gaining for the long term. This is more something that we are focusing on. And most of the work we have now, this product is no longer in nature rather than one-time buy.
Kunal Dhamesha: So is it fair to say that now the agreements that are being done are for a little longer period of time versus what it used to be, let’s say two years back?
Erez Israeli: Every customer has its own pattern. For the procurement I don’t want to go into details, but in general, we do appreciate the process. So we are trying to be positioned as a partner for our customers in certain areas.
Kunal Dhamesha: Sure. And one on the India business, so we have said that we want to focus on our key brands. We have identified in India where we want to grow 1.5 times a market rate. Could you provide some ballpark number as to how much of these key brands will be contributing to our India business?
Erez Israeli: So, most of the contributions to this overall competition that India is supposed to be, it will come from those brands. So when they will grow at the pace that you mentioned, the overall India business will grow by double digit.
Kunal Dhamesha: Sure. And the last one, because we are focusing on the GLP-1 opportunities, can you provide some color on how much is our product manufacturing capacity and are we manufacturing anything currently for regulated or semi-regulated market?
Erez Israeli: We are focusing on GLP-1, we are focusing on the other peptides, et cetera. But your point, yes, we are making, but most of the most of the volume is yet to be launched because the products are still under patents or are still under approval process by either ourselves or by partners, experiment partners.
