Ajanta Pharma Ltd — Q4 FY26

Ajanta Pharma Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=8mvewhLZ464 Published: 8 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to agenda for ARMA Q4 FY2026 earnings conference call. As a reminder, 0:10 10 seconds all participant lines will be in the listenon only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should 0:18 18 seconds you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchstone phone. Please note that this conference is being recorded. 0:29 29 seconds I now hand the conference over to Mr. 0:31 31 seconds Yogesh A Shagarwal, managing director of Agenda Pharma Limited. Thank you and over to you sir. 0:38 38 seconds Thank you. Good afternoon everyone and welcome to Ajenda Farah. 0:44 44 seconds With me I have Mr. Rajal our joint managing director, Mr. Arindraal our CFO, Mr. Rajival our VP finance and investor relations. 0:55 55 seconds I hope all of you have received the financial results by now. I will take you with our overall business 1:02 1 minute, 2 seconds performance first. It is a pleasure to share that Ajenta has achieved several important milestone in FY 2026 1:12 1 minute, 12 seconds with revenue surpassing 5,000 crores and net profit crossing,000 crores. This marks a significant step forward in our 1:20 1 minute, 20 seconds growth journey. The year reflects strong well-rounded performance across all areas of business reinforcing the strength of our strategy and execution. 1:32 1 minute, 32 seconds Our revenue from operations grew by 21%. 1:36 1 minute, 36 seconds While margins grew by 18%. Reflecting strong operating performance alongside continued investments to support future 1:44 1 minute, 44 seconds growth. All our businesses are progressing in line with our plan giving us confidence in sustaining this growth 1:52 1 minute, 52 seconds momentum in the coming periods. This strength is also evident in our returns. 1:58 1 minute, 58 seconds As of March 2026, return on capital employed stood at 33% and return on net worth at 25% underscoring our position 2:07 2 minutes, 7 seconds among the best performing companies in the industry. 2:10 2 minutes, 10 seconds Now moving on to the business details, let me take you through our key business verticals. Starting with the branded journey business in Asia and Africa, which contributed 38% to total revenue. 2:22 2 minutes, 22 seconds We continue to invest consistently in people's portfolio expansion and market development to support sustainable long-term growth. 2:32 2 minutes, 32 seconds Let's move to Asia. During the quarter, the Asia branded general business recorded sales of 274 crores compared to 2:40 2 minutes, 40 seconds 303 cr in the same period, reflecting a decline of 10%. 2:45 2 minutes, 45 seconds For the full year, sales stood at 1176 cr versus 11 191 cr last year, a marginal decline of 1%. 2:55 2 minutes, 55 seconds While we had expected a recovery in Q4, geopolitical developments in the Middle East led to significant supply chain 3:02 3 minutes, 2 seconds disruptions impacting dispatches during the quarter. 3:07 3 minutes, 7 seconds For the full year, the performance remained below our internal expectations largely due to logistic challenges. We 3:14 3 minutes, 14 seconds remain confident that the business will regain its growth momentum in coming quarter. 3:20 3 minutes, 20 seconds During the year we launched 15 new products primarily in chronic therapies further strengthening the quality and 3:27 3 minutes, 27 seconds sustainability of Asia business. Let's move to Africa. During the quarter the Africa branded Germany business 3:35 3 minutes, 35 seconds delivered strong performance with sales of 182 cr compared to 133 cr last year registering a growth of 37%. 3:45 3 minutes, 45 seconds For the full year, sales stood at 861 cr versus 750 cr last year, reflecting a growth of 15%. 3:54 3 minutes, 54 seconds During the quarter, we introduced one new product, taking the total launches for the year to eight, supporting continued expansion in the region. 4:04 4 minutes, 4 seconds Overall, our branded genic business continues to progress in line with our guidance and we remain confident of delivering healthy performance in the coming quarters. 4:15 4 minutes, 15 seconds Let us move to another two verticles is our international business US generics. As indicated the US generic 4:22 4 minutes, 22 seconds business delivered an excellent performance during the quarter sales stood at 505 cr compared to rupees 325 4:29 4 minutes, 29 seconds cr in the same period reflecting a strong growth of 56%. 4:35 4 minutes, 35 seconds For the full year, sales reached rupees 155 1,557 cr versus rupees,47 4:43 4 minutes, 43 seconds cr last year, registering a robust growth of 49 crores. 4:48 4 minutes, 48 seconds This performance was driven by eight new launches over the past 15 months supported by consistent execution and strong customer relationship. 4:59 4 minutes, 59 seconds On the back of this momentum, the contribution of the US generic business to total revenue increases 99% during the financial year. We continue to be 5:08 5 minutes, 8 seconds preferred partner for distributors and customers anchoring anchored in reliable supply, strong quality standards and 5:15 5 minutes, 15 seconds disciplined execution. We now move to Africa institution. During the quarter, the Africa institutional business 5:22 5 minutes, 22 seconds reported sales of rupes 49 cr compared to rups 28 crores last year delivering a growth of 71%. 5:30 5 minutes, 30 seconds For the full year, sales stood at rupees 160 cr versus rups 147 cr reflecting a growth of 9%. 5:39 5 minutes, 39 seconds The institution business contributed around 30% to the company's total revenue during the financial year. At the start of the year, we had anticipate anticipated a softer performance. 5:51 5 minutes, 51 seconds However, improved order flow in the second half supported a steady performance for the full year. Now, I 5:58 5 minutes, 58 seconds invite Mr. Raji Shakraal, our joint managing director. Thank you and over to you. Thank you. Good afternoon to all of you. 6:07 6 minutes, 7 seconds I will take you through the performance of our India business. We have concluded both the fourth quarter and the financial year on a strong note. I am 6:15 6 minutes, 15 seconds glad to inform you that Ajenta is now among the top 25 companies in the Indian pharmaceutical market as per IQIA Matt March 2026. 6:25 6 minutes, 25 seconds Our ranking has improved to rank 24th against rank 26th last year. During the year, the India business contributed 30% 6:34 6 minutes, 34 seconds to the company's total revenue supported by the launch of 26 new products including five first time launches in 6:41 6 minutes, 41 seconds the country. During the just concluded financial year, our revenue reached at 1,654 6:48 6 minutes, 48 seconds crores versus rupes, 1452 crores in the previous year, registering a healthy 6:55 6 minutes, 55 seconds growth of 14%. In the fourth quarter, our sales stood at rupees 404 cr 7:02 7 minutes, 2 seconds compared to rups 369 cr in the same quarter last year reflecting a growth of 9%. Our India business includes revenue 7:11 7 minutes, 11 seconds from trade generic segment which contributed rups 49 crores in Q4 for both years. 7:19 7 minutes, 19 seconds For the full year, Trade Generics recorded sales of rupees 188 crores compared to rupees 179 crores last year. 7:29 7 minutes, 29 seconds Let me now take you to Ajenta's performance as per IQ MAC March 2026. 7:35 7 minutes, 35 seconds We continued to outperform the IPN by a healthy margin with Ajenta delivering growth of 13% compared to the IPM growth 7:43 7 minutes, 43 seconds of 10%. We also continue to lead in volume growth and new product introductions relative to the market. 7:50 7 minutes, 50 seconds This momentum is visible across most of our key therapeutic segments where our growth consistently exceeds the segment 7:58 7 minutes, 58 seconds growth. The data variance in IQVR for our cardiac portfolio continues for this quarter and we are hopeful to be to get this resolved over time. 8:10 8 minutes, 10 seconds We remain confident of sustaining our growth trajectory in the coming quarters. 8:16 8 minutes, 16 seconds In the covered market, we rank among the top five companies in the IBM and feature within the top 10 across all our 8:24 8 minutes, 24 seconds core therapeutic segments. Cardiology contributed 36% to the India branded sales followed by opthalmology at 31% 8:33 8 minutes, 33 seconds and dermatology at 23% with the remaining 10% coming from the same segment. Our new therapy in gynecology 8:41 8 minutes, 41 seconds is progressing well and is expected to contribute meaningfully to our future growth. During the year, we added around 8:48 8 minutes, 48 seconds 300 medical representatives across our therapeutic areas, taking our total field force to approximately 3,750 mass. 8:59 8 minutes, 59 seconds The newly onboarded teams are being integrated with a clear focus on productivity and effective field execution. With this, I invite Mr. Mr. 9:07 9 minutes, 7 seconds Arvinal our CFO to take you through the financial performance of the company. Thank you and over to you Arvin. 9:15 9 minutes, 15 seconds Thank you and good afternoon to all. 9:18 9 minutes, 18 seconds Before I begin, I would like to mention that during this call, we may make certain forwardl lookinging statements. 9:26 9 minutes, 26 seconds These statements are based on management's current expectations and are subject to risks and uncertainties that may cause actual results to defer 9:35 9 minutes, 35 seconds materially. The company does not undertake any obligation to update these statements publicly. 9:43 9 minutes, 43 seconds I will now take you through the consolidated financial performance on a year-on-year basis. 9:49 9 minutes, 49 seconds Coming to revenue, total revenue for the fourth quarter stood at 1422 cr compared to 1,170 9:58 9 minutes, 58 seconds cr last year reflecting a healthy growth of 21%. 10:03 10 minutes, 3 seconds For the full year, revenue reached 5,453 cr versus 4,648 10:11 10 minutes, 11 seconds cr last year, resisting a robust growth of 17%. 10:16 10 minutes, 16 seconds Our diversified business model continues to support consistent growth even as certain market experience temporary 10:24 10 minutes, 24 seconds variations which are part of normal business cycle. 10:30 10 minutes, 30 seconds Coming to the gross margin, gross margin stood at 79% for the quarter and 78% for the full year. We expect gross margins 10:38 10 minutes, 38 seconds to remain around 77% with a variation of plus or minus 1% in the coming year. 10:45 10 minutes, 45 seconds Personal cost personal cost for the quarter stood at rupees 341 cr compared to rupees 280 cr last year reflecting an increase of 22%. 10:57 10 minutes, 57 seconds For the full year, personal cost stood at 1,291 cr versus 190 cr last year, an increase of 18%. 11:06 11 minutes, 6 seconds This increase was partially contributed by the addition of medical representatives across our branched and dictionary businesses. Also during the 11:15 11 minutes, 15 seconds year, the government of India new labor code became applicable and based on our assessment an additional provision of rupees 9 cr has been made towards related liability. 11:27 11 minutes, 27 seconds Coming to other expenses, uh other expenses for the quarter stood at rupes 443 cr compared to rupees 310 cr last year reflecting an increase of 43%. 11:39 11 minutes, 39 seconds This includes a mark tomarket head loss of 42 cr. Excluding this, the increase was 29%. 11:46 11 minutes, 46 seconds for the full year. Other expenses to run rupes 1,583 cr versus rupes 1,28 cr last 11:55 11 minutes, 55 seconds year, an increase of 13%. This includes a mark to market h loss of 103 crores. 12:02 12 minutes, 2 seconds Excluding this, the increase was 21%. 12:06 12 minutes, 6 seconds The h loss was on account of depreciation of the INR against the US dollar and euro during the year. The 12:13 12 minutes, 13 seconds increase in expenses reflects our continued studies investing in products, brands and people across the brand and 12:20 12 minutes, 20 seconds generate portfolio. We expect other expenses to remain broadly aligned with current trends. 12:27 12 minutes, 27 seconds Coming to the R&D, R&D spent included within personal and other expenses remained at 5% of total revenue and is expected to continue at similar levels. 12:38 12 minutes, 38 seconds R&D expenditure for the quarter to be 70 cr compared to the 63 crores last year while for the full year it stood at 252 12:46 12 minutes, 46 seconds cr versus 224 crores last year. 12:51 12 minutes, 51 seconds IITA for the quarter stood at rupes 333 cr compared to rups 297 cr last year to 12:58 12 minutes, 58 seconds the rate of 12%. For the full year, IITA stood at 1,395 cr versus 1,260 cr last year, 13:07 13 minutes, 7 seconds registering a growth of 11%. IITA margin stood at 23% for the quarter and 26% for 13:15 13 minutes, 15 seconds the full year. Excluding the impact of mark foreign exchange movement, IITA margins remain aligned with our guidance 13:22 13 minutes, 22 seconds of around 27% for the full year. The mark market forest cost recorded under other expenses stood at 103 cr while 13:30 13 minutes, 30 seconds forex and other income stood at rupees 97 cr. We remain confident of maintaining evida margin of 27% with a 13:39 13 minutes, 39 seconds variation of plus or minus 1% in the coming year as well while making further investment in developing our market. 13:52 13 minutes, 52 seconds Profit after tax for the quarter stood at rupes 267 cr compared to 225 cr last 13:58 13 minutes, 58 seconds year reflecting a growth of 18%. For the full year pat stood at rupes 1,56 cr 14:06 14 minutes, 6 seconds versus 920 crores last year reflecting a growth of 15%. Pat margin remained steady at 19% for both the quarters and the full year. 14:16 14 minutes, 16 seconds [clears throat] 14:18 14 minutes, 18 seconds Coming to the tax rate, the effective tax rate for the year stood at 23%. It is expected to increase in the coming year as one of our manufacturing 14:26 14 minutes, 26 seconds facilities transition out of the exemption period. 14:32 14 minutes, 32 seconds Capital expenditure uh for the full year stood at rupes 330 crores in line with our guidance. As we 14:39 14 minutes, 39 seconds embark upon new capex cycle to meet our continued growth requirements, we expect capex to increase to around 400 cr in 14:47 14 minutes, 47 seconds the fi 2037 which includes 150 cr of maintenance and balance for new capacity expansion. 14:56 14 minutes, 56 seconds Working capital uh trade receivable stood at 125 days compared to 94 days last year reflecting the shift from 15:04 15 minutes, 4 seconds factoring to working capital loans enabling better interest efficiency. 15:08 15 minutes, 8 seconds This remained neutral toward the P&L supported by corresponding investment income. Inventory levels improved to 63 15:16 15 minutes, 16 seconds days from 72 days last year restricting continuous focus on enhancing purchasing capital efficiency. 15:23 15 minutes, 23 seconds With this, we now open the floor for question and answer. Thank you. 15:28 15 minutes, 28 seconds Thank you very much. We will now begin with the question and answer session. 15:33 15 minutes, 33 seconds Anyone who wishes to ask a question may press star and then one on their touchstone phone. 15:39 15 minutes, 39 seconds If you wish to remove yourself from the question queue, you may press star and then two. 15:45 15 minutes, 45 seconds Participants are requested to use handsets while asking a question. 15:50 15 minutes, 50 seconds Ladies and gentlemen, we will wait for a moment while the question assembles. 15:54 15 minutes, 54 seconds Again, to register for a question, please press star and then one. 16:12 16 minutes, 12 seconds Your first question comes from the line of Sedat Nandhi from CWC. Please go ahead. 16:18 16 minutes, 18 seconds Hi. Uh thanks for the opportunity uh uh and congrats on a good set of numbers just 16:25 16 minutes, 25 seconds one if you could share your ACPMS uh in in the domestic business. Second uh if you could give some color in terms 16:33 16 minutes, 33 seconds of how are you looking at the generic semiutide opportunity primarily from what I understand you looking at this 16:41 16 minutes, 41 seconds outside India and and what's the update on that yeah that's the two questions the second part generics you are 16:50 16 minutes, 50 seconds referring to the generics in the domestic market the pre generics and in outside of India is what 16:58 16 minutes, 58 seconds okay I will hand it and they do to yeah outside of India uh we are going to start out filing uh this quarter and 17:08 17 minutes, 8 seconds normally the approvals takes somewhere between one and a half years to two years so as and when we keep getting approvals in various markets we will 17:16 17 minutes, 16 seconds keep launching so yeah uh I think it is work in progress we'll see as the filing happens and what approvals we get and I 17:25 17 minutes, 25 seconds will keep launching them got it and and I'm assuming uh India is not as much of a focus market for G uh semiglutide or is that uh not the case? 17:36 17 minutes, 36 seconds India is also a focus market for us and uh we are in the you know we are also in the race for sure uh it's too early to 17:46 17 minutes, 46 seconds comment on how it will pan out but we are definitely one of the contenders and on the productivity the PCPM for the 17:52 17 minutes, 52 seconds last full year has worked out to 3.7 lakhs per man per month but uh keep in 18:00 18 minutes mind that this is also uh uh after the addition of 300 more representatives that we have 18:08 18 minutes, 8 seconds made in the current year and maybe couple of 300 maybe two to 300 more last year which are yet to come to this level. So we have been keeping on 18:17 18 minutes, 17 seconds incrementally adding uh to our field strength. So therefore uh it may seem what it looks like right now. 18:26 18 minutes, 26 seconds Got it. That's helpful. If you could just give me a sense of uh uh given that given the significant additions to the 18:33 18 minutes, 33 seconds pay force or the mature force what what's the average uh uh ACPM and how 18:41 18 minutes, 41 seconds much is that higher by maybe that gives a sense of how that steady state looks like. 18:49 18 minutes, 49 seconds I think four to four and a half laptop is the steady state PCPM we are looking for. 18:59 18 minutes, 59 seconds Got it. Thank you. Okay. Thank you. Thank you. 19:07 19 minutes, 7 seconds Your next question comes from the line of Anish Burmal from Varia. Please go ahead. 19:13 19 minutes, 13 seconds Hi, good evening. Thanks for taking my question. Uh so just your comments on uh the impact on the business because of the ongoing Middle East conflict and you 19:22 19 minutes, 22 seconds can I mean it will be great if you can divide it into how you are uh managing the cost in your domestic business versus the international business. 19:32 19 minutes, 32 seconds I didn't get your question. How are you managing what the increase in cost that you would have experienced because of the Middle East 19:39 19 minutes, 39 seconds conflict? the increase in cost of either raw material or utilities. 19:46 19 minutes, 46 seconds Yeah. So the rates have increased uh both air and sea uh across geography. It 19:53 19 minutes, 53 seconds is not only restricted to the Middle East supplies but the rates have increased uh in general for the air and 20:00 20 minutes sea. Uh since last quarter was only one quarter we saw the impact. we will come to know for the next whole year how the 20:08 20 minutes, 8 seconds cost will sit because it's still a evolving landscape where how long this war continues and whether it will better 20:15 20 minutes, 15 seconds than after that what will be the cooling off so I think that is yet to be seen and we are seeing the increase in the 20:22 20 minutes, 22 seconds R&DM cost also but uh since last quarter we had uh inventory with us we did not 20:29 20 minutes, 29 seconds see the impact of the same in the quarter and maybe coming quarter also it may not as impacted because there were 20:36 20 minutes, 36 seconds some inventories and some old orders given. But I think if the war continues, I think going forward a quarter after 20:45 20 minutes, 45 seconds probably we should start seeing some increase in the cost of the goods also R&B cost and the freight cost. 20:52 20 minutes, 52 seconds Okay. So uh the freight and insurance cost increase that you are witnessing right now are you able to pass it on to your customers or are you partly absorbing it in your P&M? 21:04 21 minutes, 4 seconds it is absorbed by DNR. 21:06 21 minutes, 6 seconds Okay. And uh just last question uh let's say the I mean the the conflict last for uh longer than your inventory then in 21:15 21 minutes, 15 seconds that case the R&P and cost that is increasing will that also will be born by uh the marketing company like 21:24 21 minutes, 24 seconds yourself or is it like passed on through the entire supply chain like the CMO partners and the customers? How does it happen? 21:31 21 minutes, 31 seconds Uh no it is observed by us only. It is observed by the manufacturing companies. 21:38 21 minutes, 38 seconds Okay great that was my question. Thank you so much. 21:42 21 minutes, 42 seconds Thank you. The next question comes from the line of Tushar Manuan from Motila Losa. Please go ahead. 21:49 21 minutes, 49 seconds Thanks for the opportunity. So firstly on the margin guidance with FY 26 we have ended with 27.7% margin. 21:59 21 minutes, 59 seconds uh maybe Q4 relatively weaker quarter traditionally uh just trying to understand why the 22:08 22 minutes, 8 seconds housing guidance is lower at 27% for that's my first question given that we 22:16 22 minutes, 16 seconds will have decent growth across the geography yeah that is sure the growth will 22:24 22 minutes, 24 seconds definitely be there but however as you know we are investing 22:30 22 minutes, 30 seconds in terms of in terms of addition across the market all that investment is going 22:37 22 minutes, 37 seconds on. So that investment also is something which is charged to P& the we are also 22:44 22 minutes, 44 seconds proposing to increase the filing across the market. So that also will increase the R&D cost a little bit. So 22:52 22 minutes, 52 seconds all these things will definitely impact the le profitability. So we are currently looking at all these aspects 23:00 23 minutes and then giving you the guidance of credit and how many you intend to add in India for 23:10 23 minutes, 10 seconds I think 23:22 23 minutes, 22 seconds there is some disturbance on the line not able to hear. Uh that is uh I'm so sorry to interrupt. This is the moderator Tushar sir. Uh if you can self 23:30 23 minutes, 30 seconds the line when the management is answering the question because there's a lot of background noise coming from behind. Sure. 23:39 23 minutes, 39 seconds Yes. So we are looking at an addition of 250 to 300. This is a very broad ballpark working. Of course it will keep 23:46 23 minutes, 46 seconds unfolding uh every quarter. This is to optimize the coverage uh as we go around. 23:53 23 minutes, 53 seconds Uh this is for India market for Asia Africa market also do we intend to add Mr. 23:59 23 minutes, 59 seconds Yes, we are intending to add MR1 in Asia also again five to 6%. So you can imagine about 130 150 per people will be added there as well. 24:12 24 minutes, 12 seconds And uh now the this is sorry coming back to India market MRS this would be largely spread out across the therapies 24:20 24 minutes, 20 seconds or uh this is more for specific therapy as far as fi3 and MR addition is concerned across all therapies all teams. 24:33 24 minutes, 33 seconds But and just lastly uh how much would have been the inventory days for US market 24:41 24 minutes, 41 seconds uh we don't give out such a break up of the inventories market wise so broadly not specific but in general how much inventory we carry for years. 24:53 24 minutes, 53 seconds Oh that that may normally we carry about 3 months inventory. Yeah. 24:59 24 minutes, 59 seconds Okay. So effectively which is where we are concerned that Q1 presumably can be still okay in terms of uh execution but 25:09 25 minutes, 9 seconds this middle east issue might um given that we are already sitting in May. So you know what kind of uh sort of uh 25:17 25 minutes, 17 seconds visibility we have as far as suit or maybe like the second quarter onwards uh availability of material both in terms of raw material as well as availability 25:25 25 minutes, 25 seconds of finished goods for US market or for other geography if you can you know uh share your thoughts. So the guidance 25:33 25 minutes, 33 seconds which we have given is considering all those factors considering what are the prevailing rates of R&P and if they will continue going forward the rate what are 25:42 25 minutes, 42 seconds prevalent currently they are going forward so those are factored in into the gu items which we have given of 27% 25:49 25 minutes, 49 seconds so any change positive or negative in that will have the corresponding impact on the on the diagram 25:59 25 minutes, 59 seconds on the revenue growth how what Maybe I miss the guidance on the revenue group. 26:07 26 minutes, 7 seconds Uh revenue. Yeah, go ahead. 26:14 26 minutes, 14 seconds No, overall for the company uh uh we are looking at the 26:21 26 minutes, 21 seconds guidance of uh team. 26:29 26 minutes, 29 seconds Yes. Yeah. Yeah. 16 to 18% right. 26:39 26 minutes, 39 seconds Yeah. Height is something which we are really looking at. Got it. Thank you. That's it. 26:48 26 minutes, 48 seconds Thank you. 26:52 26 minutes, 52 seconds Thank you. The next question comes from the line of Abdul Kadir Puranwall from ICICI Securities. Please go ahead. 27:00 27 minutes Yeah. Hi sir, thank you for the opportunity. Uh so my first question is pertaining to your India business. So 27:07 27 minutes, 7 seconds this quarter as compared to you know the first 9 months we have seen some bit of a slowdown in uh the India business where the growth has been 9 and a half%. 27:17 27 minutes, 17 seconds So if you could uh you know help us understand any market leading factors or know we expect uh to bounce back from 27:25 27 minutes, 25 seconds this current growthful level in the coming quarters. 27:30 27 minutes, 30 seconds uh if you look at the annualized uh performance we have call it 14% growth which is significantly higher than the 27:37 27 minutes, 37 seconds IPM growth rate as well as the covered market and the subset of segment growth rates. Uh this one quarter has been an 27:45 27 minutes, 45 seconds aggression uh due to unexplicable kind of uh reasons. However, if I correlate 27:51 27 minutes, 51 seconds that with the SMSRC prescription data as well as the INMS uh secondary data, they're all very positive. So, our 28:00 28 minutes interview, they will all fall in line. I I don't see this to be an uh cause of concern. 28:08 28 minutes, 8 seconds Understood, sir. And secondly, on the Asia business where I heard your commentary, you know that the the performance was not in line with our 28:16 28 minutes, 16 seconds expectation. So any sense on you know what is the kind of standard inventory into the system and uh you know by say 28:24 28 minutes, 24 seconds the first half or second half uh you know we should back be back to delivering at least some sort of growth into this business. 28:33 28 minutes, 33 seconds Yeah. So uh we have seen that the logistics have been now streamlined. In a way when I say streamline that is the 28:41 28 minutes, 41 seconds earlier the inventory stocks which were on the high field they got stuck they got localized at various places where they were in the transit and they were 28:49 28 minutes, 49 seconds not moving but at least now the uh logistics has been sorted out just the timeline has increased the total transit 28:58 28 minutes, 58 seconds time because it has to be rooted from multiple ports and somewhere it has to be called on the surface. So you see 29:05 29 minutes, 5 seconds that the slowly the logistics have been coming coming in place just the transcre 29:14 29 minutes, 14 seconds we have not seen any uh demand uh challenge or the demand has not been impacted. It was more of a supply chain 29:21 29 minutes, 21 seconds uh know concern or issue with that supply chain now getting streamlined. In fact we are looking that in the next 29:29 29 minutes, 29 seconds year our guidance for the Asia is in the high double digits. So we should be able to uh [snorts] deliver a good performance. 29:39 29 minutes, 39 seconds Uh got it sir. And uh so just one final one if I may. So on your US business. So 29:46 29 minutes, 46 seconds you know again very still quarter on that front. Um but uh you know if you if you want you know if you can guide us 29:55 29 minutes, 55 seconds something on uh how the trajectory going ahead would be and you know how confident are we on achieving this uh 30:02 30 minutes, 2 seconds over 500 crores of revenue what we have seen in this quarter and you know in effect moving into effect 27. 30:10 30 minutes, 10 seconds Uh no this uh whole year has been exceptionally strong uh on back of various things which we have been giving the commentary in the earlier turning 30:19 30 minutes, 19 seconds calls of number of products we launched uh in last 15 months the increase in market share of products and also this 30:26 30 minutes, 26 seconds quarter is also elevated because we have one seasonal uh product which is for the flu and typically we see the demand for 30:34 30 minutes, 34 seconds that or sales for that happens in this quarter it's somewhere slightly in December but most of it happens in this quarter starting January. So generally 30:43 30 minutes, 43 seconds the quarter is slightly elevated and this quarter also got slightly more elevated because of another factor which I just explained. So I think going 30:51 30 minutes, 51 seconds forward for the next year we are looking at a mid single digit growth for the US business considering that for the whole 30:59 30 minutes, 59 seconds year we have delivered a extremely robust growth of 49%. 31:04 31 minutes, 4 seconds On back of that, so the base is very high. On back of that, we are projecting to be a mid single digit growth. 31:13 31 minutes, 13 seconds Got it sir. Thank you. All the best. Yeah. Thank you. 31:18 31 minutes, 18 seconds Thank you. The next question comes from the line of go ahead. 31:27 31 minutes, 27 seconds Hi. Um good afternoon. Uh couple of questions. Um one uh how is the shipments to Middle East happening? uh 31:35 31 minutes, 35 seconds is it uh happening normally or is it not? 31:41 31 minutes, 41 seconds I just answered that uh a minute back but I repeat uh earlier when the the conflict started the shipment got 31:50 31 minutes, 50 seconds started at whichever place they were but now they got rerooed and barring the air shipments when the things are uh the 31:59 31 minutes, 59 seconds confuses on but otherwise we've seen that the the sea shipments are kind of resumed and it's taking longer to reach 32:07 32 minutes, 7 seconds because we have to reroot it from different ports somewhere it has to be hauled through the surface. So overall the supply chain is the supplies the 32:15 32 minutes, 15 seconds logistics are settled. It is just taking longer and cost has gone up. 32:23 32 minutes, 23 seconds Got it. Um second uh your revenue guidance of uh high does it uh take into 32:30 32 minutes, 30 seconds account the high uh DB depreciation in IR 32:38 32 minutes, 38 seconds was not audible including account what take into account the depreciation in INR depreciation. 32:47 32 minutes, 47 seconds Yeah. Yeah. So it is considered on the current exchange rate whatever current 32:55 32 minutes, 55 seconds okay um and if I heard correctly u the uh raw material cost increases that are 33:03 33 minutes, 3 seconds currently there that has been built into your AIDA margin guidance of 27%. 33:08 33 minutes, 8 seconds Um correct so okay got it okay thank you back cost of cost of R&P as well as the 33:17 33 minutes, 17 seconds both are embedded in the guidance which we have given increase cost in the thank you I'll jump back to you 33:26 33 minutes, 26 seconds thank you next question comes from the line of Rohan from Nvision Capital please go ahead hello uh thank you for the opportunity 33:35 33 minutes, 35 seconds uh so sir this question was in regards to the US FDA inspection that happened in our python plant. So just wanted to 33:43 33 minutes, 43 seconds understand you know uh what is the kind of impact uh this can have uh in our plants going forward and for the uh supply that we are doing today. Thank you. 33:54 33 minutes, 54 seconds No, so the 483 as we have informed on the stock exchange, we have what the five observations call facility and uh 34:03 34 minutes, 3 seconds observations means uh there is some uh what FA wants. There are some procedural or some other kind of uh things which we 34:11 34 minutes, 11 seconds have to comply meeting to the FDA requirement. So we are moving forward to uh submit our response to the FDA as 34:18 34 minutes, 18 seconds well as describe the timeline and uh yeah that is the thing on the 43. 34:26 34 minutes, 26 seconds So uh so I just wanted to understand you know uh this impact any of our filings that we planned to launch or or any of 34:35 34 minutes, 35 seconds our existing products. Uh I mean just wanted to understand on that side. No no the impact is what uh impact can be seen only if there is any elevated concerns. 34:45 34 minutes, 45 seconds So there are no impact on the filings also we continue business as normal. Okay. Okay. Thank you. 34:56 34 minutes, 56 seconds Thank you. 34:58 34 minutes, 58 seconds The next question comes from the line of Praash from Value Research. Please go ahead. 35:11 35 minutes, 11 seconds So we not able to hear you. Uh Mash line is uh very bad. 35:21 35 minutes, 21 seconds Yeah. Uh hello. Am I audible now? 35:24 35 minutes, 24 seconds Uh this is much better sir. Yes, please go ahead. Yeah. So I just have a couple of questions to my first one being we 35:32 35 minutes, 32 seconds have been pretty consistent in terms of new product launches uh in the recent year. So if we could give a rough break up on let's say over the last two years 35:41 35 minutes, 41 seconds what is the uh revenue generated by the new product. 35:47 35 minutes, 47 seconds Okay that figure we don't have it uh at hand at this moment. I would encourage you to email it to the investor relations team and we'll come back to 35:55 35 minutes, 55 seconds you. However, what I can share with you is last 12 months the breakup position 36:03 36 minutes, 3 seconds of the 13% growth which I think we have 2020. 36:11 36 minutes, 11 seconds So uh our new product contribution within that is 4.7% out of 13%. As against the industry which stands at 36:20 36 minutes, 20 seconds 2.8% out of 10%. So our new product contribution is significantly higher compared to the industry new product uh 36:28 36 minutes, 28 seconds contribution as to uh you know know the overall 36:36 36 minutes, 36 seconds growth prospects and everything are we highly dependent on consistent new product I get the new products have to be launched but uh let's say we go 36:45 36 minutes, 45 seconds behind or due to some kind of issue we are not able to follow up on the target that they set for new product launches will 36:52 36 minutes, 52 seconds uh will it have a material impact on revenue or you know existing products or older products will continue to grow at the same pace as as they did when they were lost. 37:03 37 minutes, 3 seconds Yeah. So interesting question they are totally disconnected uh from one 37:09 37 minutes, 9 seconds another. Our base volume growth is also uh much higher 30% higher than the 37:16 37 minutes, 16 seconds industry volume growth. Right? So which means my legacy brands my larger brands such as metel not a cockpit range 37:25 37 minutes, 25 seconds combinations and all of those are growing at a very healthy pace. So uh while I deliver exceptionally well on 37:32 37 minutes, 32 seconds the new product I'm also able to uh build better than the industry in terms of the existing and the older brands. So 37:41 37 minutes, 41 seconds so one they don't they are not interlin as such in best of my experience. 37:46 37 minutes, 46 seconds Okay. And for the last question, I just want to get a picture of the promoter level. If we look at the number over the 37:53 37 minutes, 53 seconds last year, it has dried uh a bit and I get that you know we help to avail and 38:00 38 minutes everything but since we generate adequate cash flow uh we do not require much of a loan. So what is the top or is 38:08 38 minutes, 8 seconds it for personal reason or is it purely for know? 38:14 38 minutes, 14 seconds I just want to get a a brief or overall picture on why have been and why has it been increasing for the last 38:23 38 minutes, 23 seconds yeah I'll tell you as far as promoters are concerned there are four brothers who are owning the shareh out of that 38:32 38 minutes, 32 seconds two brothers Raj Shagra and Yogi Shagraal both of them are in the helm of Ajata Parma and there are two other 38:39 38 minutes, 39 seconds brothers who are developing their own businesses so for their new businesses they are using the share and borrowing 38:48 38 minutes, 48 seconds for that nothing to do with agent farmer borrowing at all okayish 38:56 38 minutes, 56 seconds yeah sorry yeah please go ahead and they don't have any pledge at all so there is zero pledge from their side 39:05 39 minutes, 5 seconds it's only the other two brothers who are developing their new businesses they have to borrow the money Okay, if I could just one last question. 39:15 39 minutes, 15 seconds Uh you had given a very strong guidance for Asia business for the next year. I just want to know what is the you know basis for the guidance in the sense that 39:24 39 minutes, 24 seconds are you expecting ro in any particular geography or uh is it any periodically or new product launches that you are anticipating? I just want to get over 39:32 39 minutes, 32 seconds guys. I know we cannot go into specific but still yeah I think it is basically on the back of the low performance last year because 39:42 39 minutes, 42 seconds Asia has deowned minus 1% in the last year. So naturally that lower performance was basically again because 39:50 39 minutes, 50 seconds of the logistic issues which are there in Middle. So I hope we should be able to really recover that and should be able to grow in double digit. 40:04 40 minutes, 4 seconds Okay. Thank you. That's it. 40:09 40 minutes, 9 seconds Thank you. Before we take the next question, a reminder to everyone. You may press star and one to ask a question. The next followup question comes from Tashar Manutan from Motil. 40:20 40 minutes, 20 seconds Please go ahead. Yes. 40:33 40 minutes, 33 seconds Am I? Yes, you are. Yes. 40:37 40 minutes, 37 seconds So, so just on the guidance again where US probably would slow down in FI27. Uh India doing better than IPM but IPM itself probably would grow at 8 to 10%. 40:48 40 minutes, 48 seconds So effectively Asia Africa would be the strong uh growth driver. So in Africa also what is it that you know if you can 40:56 40 minutes, 56 seconds just uh we've already grown at 15% in branded gener. 41:02 41 minutes, 2 seconds So what kind of uh you know uh factors will drive much higher growth in Africa market. So that that's my first question. 41:11 41 minutes, 11 seconds Africa also we are looking at a high double digit growth. Africa also we should be able to perform well. 41:21 41 minutes, 21 seconds Okay. And this is in a way semi rooted will actually for contribute in any of the geographies probably a 41:29 41 minutes, 29 seconds no no there is no sim which is faced in this is from our existing business uh addition of people which we have done 41:38 41 minutes, 38 seconds over last two years addition of people not that many let's say 25 which we done here so I think okay let's discount that that may not contribute so much but uh 41:47 41 minutes, 47 seconds all the new people products which we have launched over last year or two here uh that is going to contribute to this 41:54 41 minutes, 54 seconds growth and as far as capex is concerned it's at the existing site uh the the growth capex 42:03 42 minutes, 3 seconds so can you take that yes uh this will be on the existing site uh because we have the extra land 42:11 42 minutes, 11 seconds available in the site so could be there so we're looking at about 150 crores of 42:18 42 minutes, 18 seconds routine traffic maintenance capital and 250 crores lo for the capacity additions and expansions. 42:27 42 minutes, 27 seconds And just lastly, how much effective tax rate for F27? 42:33 42 minutes, 33 seconds Uh we are expecting about 26 to 26 and a half%. 42:39 42 minutes, 39 seconds All thank you. Thank you. 42:44 42 minutes, 44 seconds Thank you. The next question comes from Danovi from Ask IM. Please go ahead. 42:52 42 minutes, 52 seconds Hi sir. Uh thanks for the opportunity and congratulations on a good set of numbers. Uh sir, so we have guided for a mids singledigit growth in the US 43:00 43 minutes formulations business. Uh so are there firstly any launches that you are scheduling for the next year? Uh or is it going to be that the existing base 43:09 43 minutes, 9 seconds business itself is going to kind of continue at that rate? That is my first question. 43:14 43 minutes, 14 seconds No, there are launches which are planned. There are about four to five launches which will be planned but they are all going to go towards the later 43:22 43 minutes, 22 seconds second half of the year. So there will be uh some growth coming in from there also but it is most part first half will be existing products. 43:33 43 minutes, 33 seconds Understood sir. Uh also coming back to the semagitted opportunity. So while the filings are happening currently as we 43:40 43 minutes, 40 seconds speak uh how do you uh envisage the launches to happen and you know at what point could it reach a material scale maybe you know anywhere between 100 to 43:49 43 minutes, 49 seconds 150 crores kind of a top 10 contribution I think it'll be two years by the time 43:57 43 minutes, 57 seconds uh product will get commercialized in various markets I think that three years from third year from today uh is when we should start seeing the revenues and 44:05 44 minutes, 5 seconds probably fourth year would be where we'll have launched and we would have probably increased our penetration in the market and got [clears throat] 44:13 44 minutes, 13 seconds some market share. So I think three to four years is the time when we should start seeing these kind of the kind of meaningful impact industry. 44:23 44 minutes, 23 seconds Understood sir. Thank you and all the best. Thank you. Thank you. 44:29 44 minutes, 29 seconds Thank you. The next followup question comes from the line of Sedart Nandi from CWC. Please go ahead. 44:36 44 minutes, 36 seconds Thanks for the opportunity. Just wanted to understand you mentioned uh high double digit growth for Africa, right? 44:43 44 minutes, 43 seconds Um uh low low double digit for Asia, mid uh uh mid single digits for US and 44:51 44 minutes, 51 seconds assuming the same level for as FI26 for Africa institutions, India growth works out to be high double digits upwards of 20%. 45:02 45 minutes, 2 seconds uh even if I take the lower end of your uh high singledigit uh guidance which is 45:09 45 minutes, 9 seconds 16% growth for the overall business. So if you could just help us uh get some understanding of broadly what's the 45:18 45 minutes, 18 seconds range at which you're looking to grow the India business and considering the India business has higher margins as you 45:25 45 minutes, 25 seconds mentioned earlier uh you know uh despite that what's the reason for uh margins 45:32 45 minutes, 32 seconds coming in around 27%. Yeah that's my question. 45:37 45 minutes, 37 seconds So first of all I think Asia you are seeing low double digit actually it is high double digit again so that's what 45:44 45 minutes, 44 seconds we mentioned and for India we are talking 45:54 45 minutes, 54 seconds thank you yeah and then on the margins yeah on the margins I think we never 46:02 46 minutes, 2 seconds said India is higher or other markets are lower actually the margins are quite wellspring and the entire branded generic business is almost at the same 46:10 46 minutes, 10 seconds level. Uh the only thing which is happening is that we are investing in the market simultaneously you know for the future growth. So product 46:18 46 minutes, 18 seconds registrations, people additions etc is continuously going on. So that is why and also we have factored in some amount of uh increase in the freight cost and 46:27 46 minutes, 27 seconds the material price cost due to the war situation for at least about two to three months. So all that has been 46:34 46 minutes, 34 seconds sucked in and on that basis we have given you the data. Got it. Thank you. 46:44 46 minutes, 44 seconds Thank you. 46:46 46 minutes, 46 seconds Thank you. The next question comes from the line of forum Parik from PB Capital. Please go ahead. 46:52 46 minutes, 52 seconds Yeah, thank you for the opportunity. Uh my first question is on the receivable days we see significant jump in FI26. Um 47:02 47 minutes, 2 seconds so what is the reason for the spike and how should we look at it? I mean is 125 day the normal weight that we should consider or can it come lower? 47:15 47 minutes, 15 seconds So I think this is mainly because of the higher shares at US as you are aware the 47:21 47 minutes, 21 seconds US outcomings are little longer and US very very high this year with 50% increase. So that is the contribution 47:30 47 minutes, 30 seconds which has come in and I think at this moment of time I think we can consider this as a new normal now. 47:37 47 minutes, 37 seconds Okay. Uh thank you for that. And my second question is on your strategic priorities that you have mentioned in 47:44 47 minutes, 44 seconds the presentation where one of the priorities is focus on digitalization. 47:50 47 minutes, 50 seconds So just wanted to understand here are we talking on the AI front and if yes so just wanted to understand how does 47:59 47 minutes, 59 seconds adoption of AI actually impact our P&L and basically on the R&D side does it 48:06 48 minutes, 6 seconds increase our R&D expense or it lowers our R&D expense if you can just show throw some light there. 48:15 48 minutes, 15 seconds uh no we have remark on the on the AI initiative and uh we are progressing well we have formed a team in Alabama 48:24 48 minutes, 24 seconds and we've identified the areas so yes which is one of the priorities for us but uh we've been on this journey for 48:31 48 minutes, 31 seconds for a while uh not particularly AI it got uh AI journey started let's say about last 3 months or so 6 months or so 48:39 48 minutes, 39 seconds but we've been on a journey of the digitalization in all our verticals whether it is sales and marketing in India there marketing in uh overseas 48:48 48 minutes, 48 seconds markets whether it is or facilities. So we have a very uh digitalization which gives us lot of rich data and now our 48:56 48 minutes, 56 seconds plan is to integrate that take that data and uh uh apply a layer of AI on that and see how we benefit from all this 49:04 49 minutes, 4 seconds data to make better decisions sound decisions. So that is going to be the next uh the focus for the current year 49:11 49 minutes, 11 seconds for how we want to use the data and how we can impact how can make use of that for the for the for the benefit and building more efficiently but I don't 49:20 49 minutes, 20 seconds think uh on the R&D side there is any significant impact that will be there because of something like this at least not in the near near term. 49:29 49 minutes, 29 seconds Sure. Um thank you for that. Uh yeah that those were my two questions. Yeah thank you. Sure. Thank you. 49:38 49 minutes, 38 seconds The next question comes from the line of Ankit Sha from CRMC. Please go ahead. Hello. Am I audible? 49:47 49 minutes, 47 seconds Yes. 49:48 49 minutes, 48 seconds Yes. Uh thanks for the opportunity. My question pertains to the US market. Uh are you seeing any stability in the 49:56 49 minutes, 56 seconds pricing environment or any uh restocking demand because of the logistics disturbances in that market? Any comment on that? 50:07 50 minutes, 7 seconds No, I think uh logistics to us is not impacted as costs have gone up. So there is no supply chain disruption any which 50:16 50 minutes, 16 seconds way. So the market in US continues uh normal. So whatever the earlier factors of price erosion and things like that 50:23 50 minutes, 23 seconds they continue which is the normal one there has no sign no impact on the US. 50:31 50 minutes, 31 seconds Got it. Got it. That's it for me. Thank you. Sure. Hm. 50:36 50 minutes, 36 seconds Thank you. Your next question comes from the line of Yogesh Sony from Highong Securities. Please go ahead. 50:46 50 minutes, 46 seconds Yeah, good evening sir and thanks for the opportunity. Uh one question uh I just wanted uh clarity uh uh 50:54 50 minutes, 54 seconds clarification on uh whether our US business margins have improved and whether they have reached nearer to a corporate level margins. 51:03 51 minutes, 3 seconds We don't give out the vertical wise uh margins or I think I'm sorry I'll not be able to share those granular details. 51:12 51 minutes, 12 seconds Okay. Uh one more question if you could just uh help me understand uh how much is the chronic share uh in the combined Asia and Africa branded genetics market. 51:22 51 minutes, 22 seconds Uh because for the past few quarters we have been focusing on growing our uh chronic therapy areas in these markets. 51:29 51 minutes, 29 seconds So if you could help me with the numbers. 51:34 51 minutes, 34 seconds Uh I think combined figures we may not have that right now. 51:39 51 minutes, 39 seconds Uh if you could broadly help me understand I mean how is the revenue split between cronic and uh acute in these two markets combined. 51:48 51 minutes, 48 seconds Broadly I think we can take some markets with 80% some markets are 30%. But 51:56 51 minutes, 56 seconds overall if you take I think it will be 50% at this point of time 52:03 52 minutes, 3 seconds this portfolio consistently going forward. 52:08 52 minutes, 8 seconds Understood. And sir on the India business uh it's been now one and a half years since we have entered into GC and 52:14 52 minutes, 14 seconds nephrotherapies. So if you could help us uh uh understand how the performance has been uh in these two new therapy areas 52:23 52 minutes, 23 seconds and how are we planning to uh grow these two therapies over the next two years. 52:30 52 minutes, 30 seconds I uh have a short reference in the opening comment also on the gynecology. The progress has been very encouraging. 52:38 52 minutes, 38 seconds um we have been received uh uh very well in the segment itself by the key opinion 52:45 52 minutes, 45 seconds leaders uh in uh in that sense. So so we are progressing very well in direct better than what we were expecting 52:53 52 minutes, 53 seconds internally. I see that uh to be contributing meaningfully in the coming two three years. Um so that is that is 53:01 53 minutes, 1 second as far as Danak is concerned. we will also strengthen within gynecology by way of adding more MR in the in the coming 53:09 53 minutes, 9 seconds year. Uh nephology as we said was a smaller task force if you recolct when we uh entered the segment. Um it's a 53:17 53 minutes, 17 seconds much more difficult segment to have a crack at. It will take some time and we were prepared for that. So uh but there are some positive signs but it will take 53:26 53 minutes, 26 seconds it'll take longer than what it is taking in the grand. 53:32 53 minutes, 32 seconds Okay. Thank you sir. Thank you for your answers. 53:36 53 minutes, 36 seconds Thank you. The next question comes from the line of Adita from Incred Asset Management. Please go ahead. 53:44 53 minutes, 44 seconds Uh hi good evening. Uh can you please break your India growth into price holding and new product? 53:52 53 minutes, 52 seconds So overall grown at 13.3% 13.1% against IPM of 10%. And our growth breakup is as 54:01 54 minutes, 1 second follows. 3.6% from the volume. Price growth has contributed 4.8%. 54:09 54 minutes, 9 seconds And new product launches have contributed 4.7% to the total growth. 54:16 54 minutes, 16 seconds Okay. That was that's it. Sure. 54:21 54 minutes, 21 seconds Thank you. The next question comes from the line of Niharika Agarwal from Inc. Please go ahead. 54:27 54 minutes, 27 seconds Um good evening sir thank you for uh taking my question. So given your increasing exposure to US generics and 54:35 54 minutes, 35 seconds Africa institutional both of which are tenderdriven and competitive markets how are you managing price erosion risk at the portfolio level. 54:48 54 minutes, 48 seconds Can you come again uh with your question? Uh yeah. So I was uh given your increasing exposure to tender-driven and competitive markets. 54:58 54 minutes, 58 seconds So that is US generics and Africa institutional how are you managing the price erosion risk at the portfolio 55:06 55 minutes, 6 seconds level because we both of them are you know highly competitive markets. 55:10 55 minutes, 10 seconds Yeah. No the we always bring in the price erosion every year in the guidance we give out. So the current the forwardl 55:19 55 minutes, 19 seconds lookinging guidance for the next year also for each of these businesses we have given is considering those price erosions uh calculations as well. 55:31 55 minutes, 31 seconds All right thank you that is all from I think thank you 55:40 55 minutes, 40 seconds as there are no further questions I would now like to hand the conference over to Mr. Yog Shakarwal for closing comments. 55:47 55 minutes, 47 seconds Okay, thank you everyone. Thank you for joining this uh town hall uh today. If there are any questions we got uh left which got left unanswered, please reach 55:56 55 minutes, 56 seconds out to our investor relations. Thank you for joining. Thank you everyone. 56:03 56 minutes, 3 seconds Thank you members of the management. On behalf of Ajenta Pharma, that concludes this conference. Thank you for joining us and you may now disconnect