Cipla Ltd — Q4 FY26

Cipla Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=pW6kp1JPLvA

0:03 3 seconds Ladies and gentlemen, good day and welcome to the Suppla Limited's Q4 FY26 earnings conference call. As a reminder, 0:11 11 seconds all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation concludes. Should 0:19 19 seconds you need assistance during the conference call, please signal an operator by pressing star then zero on your Touchstone phone. Please note that 0:28 28 seconds this conference is being recorded. We have with us today Mr. Ashin Gupta MD and global CEO, Mr. Ashi Sharukia, 0:38 38 seconds global CFO and Miss Diksha Maheshwari, head investor relations. I would now like to hand the conference over to Miss 0:46 46 seconds Diksh Maheshwari. Thank you and over to you ma'am. 0:52 52 seconds Thank you Sarah. Good afternoon. Welcome to SIPLA's Q4 FI26 earnings call. I'm Dsha Maheshwari from the investor relations team at SIPLA. 1:03 1 minute, 3 seconds Let me draw your attention to the fact that on this call our discussion will include certain forward-looking statements which are predictions, 1:10 1 minute, 10 seconds projections or other estimates about future events. These estimates reflect management's current expectations of the future performance of the company. 1:19 1 minute, 19 seconds Please note that these estimates involve several risks and uncertaintities that could cause our actual results to differ materially from what is expressed or 1:28 1 minute, 28 seconds implied. The plan does not undertake any obligations to publicly update any forward-looking statement whether as a 1:35 1 minute, 35 seconds result of new confirmations, future events or otherwise. I hope you have received the investor presentation that 1:42 1 minute, 42 seconds we have posted on our website. I would like to request Achim to report. 1:47 1 minute, 47 seconds Thank you Da. Good afternoon everyone and thank you for joining us for our fourth quarter's earning call for financial year 2026. 1:55 1 minute, 55 seconds 2026 was a year of milestones uh for us. 1:58 1 minute, 58 seconds We completed our 90th anniversary for the business and we achieved significant milestones across all of our businesses 2:06 2 minutes, 6 seconds one India, North America, one Africa and EMU. 2:10 2 minutes, 10 seconds uh in India we crossed a significant threshold uh with the business surpassing 12,500 crores in revenues 2:17 2 minutes, 17 seconds underscoring the strength and resilience of our domestic franchise which is our largest franchise in North America. The 2:24 2 minutes, 24 seconds successful generic ventin approval from our US facility marked an important strategic inflection point and 2:32 2 minutes, 32 seconds reinforced our R&D capabilities. Our one Africa business continued to deliver market beating growth and our EMEU 2:39 2 minutes, 39 seconds operations scaled meaningfully to become a 400 million plus business unit. 2:44 2 minutes, 44 seconds Together these achievements highlight our disciplined execution and our commitment to sustainable as well as diversified growth across geographies. 2:53 2 minutes, 53 seconds Now let me touch upon the individual businesses. Our one one India business delivered a robust performance this 3:00 3 minutes quarter growing at 15% year-on-year driven by strong double-digit growth across branded prescription trade generics as well as consumer health 3:09 3 minutes, 9 seconds folar growth stands at 9% by on the branded prescription business uh our key chronic therapies respiratory 3:18 3 minutes, 18 seconds anti-diabetes cardiac and urology delivered a strong double digit market growth our chronic mix stands at 60% as 3:25 3 minutes, 25 seconds per IQVA match March 26 for our leading inhalation brand surpassed the revenue of thousand crores reaffirming its position as a respiratory market leader. 3:36 3 minutes, 36 seconds Meanwhile, Gutor our cardiac brand has established itself as a five uh as a 650 3:43 3 minutes, 43 seconds crore brand delivering 25% YI growth. Uh this year we expanded our presence in the IPM by adding four brands with 3:51 3 minutes, 51 seconds revenues exceeding 100 crores bringing the total to 33 such brands and our footprint in the top 300 brands in the industry now has 23 such brands. 4:05 4 minutes, 5 seconds Uh this year our growth has also been helped by a series of successful differentiated product launches across 4:11 4 minutes, 11 seconds the core therapies. In respiratory, we launched uh products into the inhalation franchise including forgi 4:20 4 minutes, 20 seconds siphaler and the triple combination volt trio uh which are strengthening adherence while delivering therapeutic 4:27 4 minutes, 27 seconds benefits in antimicrobial resistance. We launched Zambry, SIP and MET, ESPLOSIP 4:34 4 minutes, 34 seconds uh which underlines our presence uh and and leadership in resistant and critical uh infections and EMR. In urology, we 4:44 4 minutes, 44 seconds launched a novel product called Stricter which expands our leadership in non-antibiotic management of recurrent UTI. 4:52 4 minutes, 52 seconds uh in our diabetes franchise we launched HD SDLT2 LE portfolio including empa 4:58 4 minutes, 58 seconds glyphosin and in uh dermatology we launched an innovative solution uh perca for scar management together these 5:07 5 minutes, 7 seconds launches reflect our execution strength it reflects our focus on complexity and our commitment to driving sustainable 5:14 5 minutes, 14 seconds growth through improved patient outcomes during the year we also enhanced our pipeline and portfolio through strate 5:21 5 minutes, 21 seconds strategic partnerships. Uh we entered into a collaboration with Liy for your peak making our entry into the fast 5:30 5 minutes, 30 seconds growing obesity segment with uh best-in-class molecules. Our partnership with Mankind Corporation of US brought 5:38 5 minutes, 38 seconds Aphresa, India's first rapid acting inhaled insulin, reinforcing our focus on differentiated diabetes solutions and 5:45 5 minutes, 45 seconds we also gained exclusive rights to FISA's key established brand further strengthening our access to strong brands in the IPN. 5:54 5 minutes, 54 seconds Additionally, the acquisition of Inspera Healthcare enhanced our portfolio on pediatric and wellness product sites. 6:02 6 minutes, 2 seconds Put together these efforts meaningfully enhance our portfolio and reinforce supply long-term growth ambitions. 6:10 6 minutes, 10 seconds On trade generic side, we continued the strong growth momentum delivering double-digit growth yi for the quarter as well as for FI26. 6:18 6 minutes, 18 seconds This performance was driven by a focused execution across distribution, a robust pipeline of strategic new product launches and meaningful advancements in 6:27 6 minutes, 27 seconds technology enabled operations. We will continue to expand portfolio and use that as a key driver for growth. Uh with 6:33 6 minutes, 33 seconds 17 new launches planned this year, our consumer health business continued its strong upward growth trajectory with 6:41 6 minutes, 41 seconds Nicotex, Omnitell and Cipla team consolidating their number one positions in the respective segments. The business is driving very healthy secondary growth 6:50 6 minutes, 50 seconds and actively exploring opportunities to invest in products and channels to further expand our distribution network. 6:56 6 minutes, 56 seconds Operating profitability has improve improved in CHL uh reflecting the strength and scalability of our consumer health strategy. 7:05 7 minutes, 5 seconds Coming to North America, the business reported quarterly revenue of $155 million US and an annual revenue of uh 7:14 7 minutes, 14 seconds $780 million supported by demand in our differentiated portfolio and a Teddy 7:21 7 minutes, 21 seconds based business. Albutrol market share increased to 19.6%. 6% as per IQVR match 7:28 7 minutes, 28 seconds March 26. During the year we advanced our portfolio with several key assets including LRA glutide, naden and 7:35 7 minutes, 35 seconds dapagosin. Notably we received regulatory approval for the first AB rated generic ventilin with CGT 7:43 7 minutes, 43 seconds representing the first commercial MDI product to be manufactured from our US facility. 7:49 7 minutes, 49 seconds This milestone reinforces our growing confidence and capability to deliver complex generics not just from India but also from our US manufacturing facility. 7:59 7 minutes, 59 seconds We are expecting to launch this product within the coming months. Our Goa facility together with two US facilities 8:07 8 minutes, 7 seconds is well equipped to support the launch of all four respiratory assets planned for FI27 enabling a seamless and wellcoordinated supply to the market. 8:16 8 minutes, 16 seconds Our one Africa business grew at an impressive 14% year-on-year growth rate during the quarter with a fullear growth 8:24 8 minutes, 24 seconds of 7% Y in USD terms powered by firm performance across key markets. In the private market, our secondary growth 8:33 8 minutes, 33 seconds outpaced uh uh outpaced the market growth uh with 6.6% versus 4.8% for the 8:41 8 minutes, 41 seconds market in EMU. Our focus strategy on deep penetration has built a strong foundation enabling the business to 8:49 8 minutes, 49 seconds breach the $400 million US uh revenue mark. This is despite the significant volatility that has been happening in the recent month because of uh the war. 9:00 9 minutes Uh the business remained resilient during the quarter navigating geopolitical uncertainty and disruptions 9:07 9 minutes, 7 seconds with strength and discipline. uh it was led both by DTM and B2B categories alongside consistent margin stability and internal pipeline assets. 9:16 9 minutes, 16 seconds On the regulatory front during the year, US FDA conducted and concluded inspections at three of our manufacturing facilities in India, uh 9:25 9 minutes, 25 seconds Bulmaundra in Bangalore, Scitec at Mumbai and Medispray in Goa. All of these inspections resulting in a VI or 9:33 9 minutes, 33 seconds NI classification. This accomplishment reflects our sturdy dedication to quality, compliance, and operational 9:40 9 minutes, 40 seconds excellence. A quick update on our US pipeline. We continue to prioritize organic investments with sustained focus 9:48 9 minutes, 48 seconds on advancing R&D capabilities for the US market in particular. Uh we remain very confident in our US business outlook uh 9:58 9 minutes, 58 seconds which is supported by a pipeline of nearly 40 to 50 products to be filed over the next three years. And this 10:05 10 minutes, 5 seconds includes 12 first to five and eight uh B2 opportunities that they're targeting 10:12 10 minutes, 12 seconds in the respiratory portfolio. Five assets have been filed including the generic ventoolin. Uh four of these are expected to be commercialized in F527. 10:23 10 minutes, 23 seconds We are also going to uh deepen this pipeline with four additional respiratory assets scheduled for filing 10:30 10 minutes, 30 seconds over the next 24 months. Importantly, we remain committed to sustainability and innovation with two respiratory assets 10:37 10 minutes, 37 seconds incorporating green propulents expected to be filed over the next 24 months as well. In peptides and complex generics, 10:44 10 minutes, 44 seconds eight assets are already filed with select launches projected between FY 27 and 28. We aim to file three more 10:52 10 minutes, 52 seconds peptides and complex generic assets in the next 12 to 24 months. Additionally, we're working on oligoucleotides and 10:59 10 minutes, 59 seconds we're also having two global biosimilar assets. One is undergoing uh clinical study under an IND and the 11:08 11 minutes, 8 seconds other is uh in earlier stage of development. 11:11 11 minutes, 11 seconds We uh see biosimilars as a very large and underpenetrated opportunity and with the recent change in some of the 11:19 11 minutes, 19 seconds guidelines we believe this to be an upcoming almost $200 billion opportunity 11:26 11 minutes, 26 seconds uh with around 100 such biologics expected to lose exclusivity over the next decade. Uh so we are going to enhance our efforts on biosimilars. 11:37 11 minutes, 37 seconds uh we have a JV with Chemwell uh which is focused on execution which has an initial pipeline of respiratory assets 11:46 11 minutes, 46 seconds and oncology assets. uh we are looking at adding at least one to two assets uh 11:52 11 minutes, 52 seconds on in-house biosimilar development through this JV which will uh which will really build our presence in the 12:00 12 minutes biosimilar space over the next 5 to seven years. 12:05 12 minutes, 5 seconds Uh on the back of these ambitions and with a very solid foundation of 12:12 12 minutes, 12 seconds execution we are also accelerating our AIE transformation. 12:17 12 minutes, 17 seconds Um our strength has always been on execution across quality manufacturing and regulatory and uh with the AI 12:25 12 minutes, 25 seconds transformation we aim to become a leading AI farmer organization. We have invested in robust data and technology 12:32 12 minutes, 32 seconds foundations which allows us to scale this up in a structured and sustainable way and also in a very timely fashion. 12:40 12 minutes, 40 seconds Uh so we will be focusing a lot on driving efficiency, productivity and better decision making with the help of AI. uh over the coming uh through to 12:49 12 minutes, 49 seconds through uh you know coming year. I would now like to invite Ashish to present the financial and operational performance. 12:58 12 minutes, 58 seconds Thank you. Thank you Ash. Uh I'd like to present the key financial highlights for the quarter and the financial year. Uh 13:05 13 minutes, 5 seconds so we reported a quarterly revenue of 6,541 cr and as a result of that we ended the 13:13 13 minutes, 13 seconds year with 28,163 cr. Uh the epida margins for the quarter 13:21 13 minutes, 21 seconds stood at 15.2% and uh 21% for the year and uh like 13:28 13 minutes, 28 seconds every time this does not include uh other income. uh the gross margin after material costs stood at 65.6% 13:38 13 minutes, 38 seconds for the quarter and uh 66 uh% for the full year and uh this was primarily 13:46 13 minutes, 46 seconds driven by the product mix uh in the revenue. Uh total expenses for the quarter include the employee cost and 13:53 13 minutes, 53 seconds other expenses which stood at 3,296 cr. This was higher by about 10% Y. Uh 14:03 14 minutes, 3 seconds annually the expense were 12,689 cr which was again a similar percentage 14:11 14 minutes, 11 seconds uh increase Y. The increase in employee cost reflects a planned investment in talent 14:19 14 minutes, 19 seconds both to support our markets as well as to strengthen uh our manufacturing readiness in both India as well as in 14:27 14 minutes, 27 seconds the US. Overall the operating expenses also include uh continued investment in 14:33 14 minutes, 33 seconds R&D which stood at 509 cr uh which is at about 7.8% 8% of the 14:41 14 minutes, 41 seconds revenue for for the quarter and uh for the year it was 1,974 cr which is at about 7% of the revenue. 14:52 14 minutes, 52 seconds Uh these investments are aligned with our pipeline priorities. It enables our new launches and it builds readiness for 15:00 15 minutes the upcoming product. As a result, we are scaling up our annual filings uh 15:07 15 minutes, 7 seconds like it has been highlighted by a In addition, we have started to see some impact of ongoing geopolitical situation 15:16 15 minutes, 16 seconds within the operating expenses which we are closely monitoring. Uh in in the 15:24 15 minutes, 24 seconds near quarters we don't see much a meaningful impact but uh in the future quarters uh as the revenue uh inventory 15:32 15 minutes, 32 seconds gets consumed you'll see that impact coming through. uh for the quarter pad stood at 555 cr representing 8.5% of 15:41 15 minutes, 41 seconds sales with an uh effective tax rate of 22.2%. 15:47 15 minutes, 47 seconds On the full year basis the PAT amounts to 3,879 cr accounting to 13.8% of sales while the ETR for the year is 25.9%. 15:59 15 minutes, 59 seconds Our Roy stood at uh 22.9% for the year and of course fat also 16:08 16 minutes, 8 seconds assumes a certain impairment that we've had uh during the quarter. Our free cash flow generation and operating efficiency 16:15 16 minutes, 15 seconds endures to drive healthy net cash position. 16:20 16 minutes, 20 seconds uh as of 31st March 2026 the debt on our balance sheet including the lease 16:27 16 minutes, 27 seconds liabilities stood at 614 cr with net cash equivalent balance at 10,526 16:34 16 minutes, 34 seconds cr uh looking ahead actually key priorities will include uh for one India 16:42 16 minutes, 42 seconds it could be to focus on execution to sustain the growth momentum and to outperform the market in branded chin uh 16:50 16 minutes, 50 seconds generic trade generic as well as in consumer wellness. We will further strengthen our presence in chronic 16:56 16 minutes, 56 seconds therapies including diabetes, cardiology, urology and dermatology while maintaining the robust trajectory 17:05 17 minutes, 5 seconds that we've built in respiratory in North America. We will concentrate on enhancing our commercial execution and 17:12 17 minutes, 12 seconds accelerating new product introductions and our aim is to cross 1 billion mark 17:19 17 minutes, 19 seconds as a run rate towards the end of uh this financial year i.e FY27 17:27 17 minutes, 27 seconds in South Africa. Our focus will be on improving the private mix with correction in uh tender contribution in 17:36 17 minutes, 36 seconds EMU. Our top priority is to drive topline growth by deepening penetration in core markets while maintaining a strong margin trajectory. 17:48 17 minutes, 48 seconds Uh looking ahead to FY27 supported by a ramp up of new launches and investments that we've made across 17:56 17 minutes, 56 seconds our manufacturing facilities and ongoing expense optimization initiatives. We expect the EITA margins to be in the 18:05 18 minutes, 5 seconds range of 18.5% to 20%. 18:10 18 minutes, 10 seconds uh with and this would be uh actually achieved uh sequence with a sequential 18:17 18 minutes, 17 seconds improvement quarter on quarter with uh the key improvement being in the second 18:24 18 minutes, 24 seconds half of the year and an overall basis you'll have 18.5 to 20% kind of a range and this guidance does not include any 18:33 18 minutes, 33 seconds uh contribution from landotide in uh FY27 u I I thank you for your attention and 18:41 18 minutes, 41 seconds we'll revert back to the moderator to open up for the question questions and answers. 18:57 18 minutes, 57 seconds So sir should we open the floor for questions? Yeah sure please. 19:03 19 minutes, 3 seconds Thank you very much. We will now begin with the question and answer session. 19:07 19 minutes, 7 seconds Anyone who wishes to ask a question may press star and then one on their touchdown phone. If you wish to remove yourself from the question queue, you may press star and then two. 19:18 19 minutes, 18 seconds Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 19:35 19 minutes, 35 seconds Your first question comes from the line of Vishal Mandanda from systematics. Please go ahead. 19:41 19 minutes, 41 seconds Hi, good evening and thanks for the opportunity. Uh during the quarter, did we uh kind of book any shelf stock adjustment for Reb? 19:53 19 minutes, 53 seconds Uh no, I think we had shared this in the last quarter as well. We did not have any SSA adjustment. 20:00 20 minutes Okay. And second on generic uh bentoin launch that you are expected to do next 20:06 20 minutes, 6 seconds month. So just wanted to understand if the innovator is supposed to launch a green version of ventoin sometime by third quarter of this uh financial year. 20:19 20 minutes, 19 seconds So as hypothetically if the innovator is replaced is able to replace all of their ventilin product with the new version would that impact zipla? 20:30 20 minutes, 30 seconds Uh right generic to the existing ventilin uh the switching to another variant is uh I 20:40 20 minutes, 40 seconds think that will be a process you know which is not an automatic process under the US law at this point of time. So we 20:48 20 minutes, 48 seconds do not anticipate any uh near-term impact of that change as and when the transition starts to happen. 20:57 20 minutes, 57 seconds Okay. And uh if you could update on the uh respiratory pipeline the key assets 21:03 21 minutes, 3 seconds adear synindicot uh QR flowent uh so I think as we had guided we were expecting four approvals this year. 21:13 21 minutes, 13 seconds Ventrolin uh has already got approved. 21:17 21 minutes, 17 seconds Um we are uh you know having different uh gold dates for different products. So 21:24 21 minutes, 24 seconds during the year we are expecting uh uh you know uh where to be and then one other asset to get approved. Uh so this 21:33 21 minutes, 33 seconds will happen during I think uh you know H1 and one is H2 as well. 21:39 21 minutes, 39 seconds Okay. and what is holding back AdWare uh for so long? 21:45 21 minutes, 45 seconds Um I think your question is probably more historic. Uh if you recall we had 21:53 21 minutes, 53 seconds uh OI at our indoor facility. So we had to take transfer to the US which caused the delay. Uh but now we're we're ready 22:01 22 minutes, 1 second with everything. So it's just a matter of receiving and just one final one. Right. Sorry. Sorry, just to complain. 22:09 22 minutes, 9 seconds We've been through a pre-approval inspection on our US facilities for this particular product. 22:14 22 minutes, 14 seconds Got it. And just one final one. Do you expect to see any benefit out of the EU FDA uh for your respiratory portfolio 22:23 22 minutes, 23 seconds because you source a lot of the basic basic uh devices from Europe? 22:32 22 minutes, 32 seconds Um at this point, we're not expecting any meaningful impact of that. I think it's more business as usual at this point in time. 22:40 22 minutes, 40 seconds So is there a change in the duty structure there or it's it remains the same pre and post EUFT? 22:49 22 minutes, 49 seconds It it remains the same. So there is no uh benefit uh as such and in EU we already 22:58 22 minutes, 58 seconds uh selling respiratory devices which are inhouse. Uh so you know there's no significant up benefit that we see 23:06 23 minutes, 6 seconds coming from uh you have my question was more from a sourcing standpoint like the raw m the key raw materials that come from Europe would they be cheaper for you? 23:16 23 minutes, 16 seconds Uh no sir it's we get some raw materials from there uh especially on the devices 23:23 23 minutes, 23 seconds side uh but there's no any such benefit that we we have out there. 23:29 23 minutes, 29 seconds Okay. Okay. Thank you. 23:34 23 minutes, 34 seconds Thank you. Your next question comes from the line of Sedart Nandhi from CWC. Please go ahead. 23:41 23 minutes, 41 seconds Hi, thanks for the opportunity. Uh just uh wanted to understand the specific uh initiatives around AI which you 23:50 23 minutes, 50 seconds mentioned. if you could share any specific initiatives that you've taken and um and uh anything any uh other 23:59 23 minutes, 59 seconds pilot initiatives that you see scaling up in future. 24:04 24 minutes, 4 seconds Yes. So uh AI is a broad-based implementation that we're targeting uh which will focus across multiple 24:11 24 minutes, 11 seconds functions uh and the difference between what used to happen in the past versus now is we are focusing on end to end 24:19 24 minutes, 19 seconds processes versus uh small uh limited use cases. So this will be we have 24:26 24 minutes, 26 seconds implementations across uh quality regulatory corporate functions um and uh 24:33 24 minutes, 33 seconds a lot of the R&D related use cases as well. Uh so the idea is to use it in a 24:40 24 minutes, 40 seconds way that uh helps obviously faster and better decision making but also ultimately gives us productivity benefits 24:49 24 minutes, 49 seconds right and and on the biosimbars front uh just want to understand in terms of your uh strategy for biosimilars are you 24:57 24 minutes, 57 seconds looking at in licensing or are you looking at your own development and what sort of a pipeline and timeline are you 25:06 25 minutes, 6 seconds looking at for that uh both from a US and EU perspective uh and is that is that sort of accelerated given the new FDA uh do guidelines? 25:19 25 minutes, 19 seconds Yes. So uh we have an predominantly an in-house strategy where we have two assets currently under development for 25:28 25 minutes, 28 seconds developed markets. Uh one of them is already under clinical trial under an IND of US. uh we will be adding one to 25:37 25 minutes, 37 seconds two assets each year uh which will then therefore you know start resulting into a pipeline of 6 to8 in-house assets over 25:46 25 minutes, 46 seconds the next uh you know 5 to 8 years. On top of that we are considering a uh you 25:53 25 minutes, 53 seconds know limited amount of in licensing where there are near-term opportunities that are not within our in-house portfolio. So for those we are open to 26:02 26 minutes, 2 seconds considering some in licensing opportunities as well. But we see this as a newer space uh more so because of 26:10 26 minutes, 10 seconds the changes to the guidelines which have uh you know placed in a good position 26:18 26 minutes, 18 seconds um where we you know can uh run these like the other complex projects and uh 26:25 26 minutes, 25 seconds we can benefit from uh the overall economics of developing these projects. 26:33 26 minutes, 33 seconds Thank you so much. Thank you. 26:38 26 minutes, 38 seconds The next question comes from the line of SuryaR from Philip Capital. Please go ahead. 26:44 26 minutes, 44 seconds Yeah, thank you for this opportunity sir. My first question is on the US revenue guidance what you are talking about uh about a billion dollar by the 26:54 26 minutes, 54 seconds end of this year. Sir uh if and uh also simultaneously you have mentioned that in your guidance for 27 you have not factor lantide. 27:04 27 minutes, 4 seconds So that means in your expectation for fi26 you are not considering lantite and 27:11 27 minutes, 11 seconds obviously this lenal ID is not there. So uh so if we kind of deduct these two 27:19 27 minutes, 19 seconds product revenue from the $780 million annualized revenue of FI26 for US. So the number what you're talking about is 27:28 27 minutes, 28 seconds almost like double the size of this US business for of FI26. 27:35 27 minutes, 35 seconds So what is the kind of a bridge that you are talking about where from this revenue buildup that will happen? Can you give some clarity sir? 27:49 27 minutes, 49 seconds Uh yeah so uh the guidance uh I just wanted to clarify is a billion dollar run rate by the end of the year. We are 27:56 27 minutes, 56 seconds not guiding for a billion dollar revenue during the year right uh and the reason for that is because a lot of this is 28:04 28 minutes, 4 seconds contingent on pipeline maturing. So we have one approval already in hand as we mentioned there are three other 28:12 28 minutes, 12 seconds respiratory approvals. There's one big peptide approval and there are three other products which have already got approved in the year smaller assets etc. 28:20 28 minutes, 20 seconds So as these products get approved our run rate will keep improving and we will get to that billion dollar by the end of FI27 28:28 28 minutes, 28 seconds uh which puts us in a very good position because what historically I you know we were shy of that we would want to see 28:37 28 minutes, 37 seconds the year ending at a good run rate of million in the US. 28:42 28 minutes, 42 seconds Okay. So, so that means kind of in the second half we will see a run rate of almost like $100 million incremental 28:50 28 minutes, 50 seconds revenue versus the quarterly run rate in the first half. Yeah. Yeah. 28:57 28 minutes, 57 seconds Okay. Uh and uh now uh is it fair means since you have mentioned that land you 29:06 29 minutes, 6 seconds have not factored while guiding the margin for the year. Uh so is it uh so 29:13 29 minutes, 13 seconds what is the outlook that we are uh giving for landotide for this year and for the subsequent period 29:22 29 minutes, 22 seconds uh given the kind of total disruption that we are currently seeing for that molecule. 29:30 29 minutes, 30 seconds Yeah. So for landriotide uh we have uh you know the partner who's working on the remediation efforts 29:39 29 minutes, 39 seconds uh that's in full swing and we are helping them as much as possible on navigating that path. So I think maybe 29:47 29 minutes, 47 seconds by next quarter we'll have closer visibility on their exact remediation timelines uh which will also include a 29:56 29 minutes, 56 seconds reinspection from so that we can come back and guide after a quarter but in parallel uh we have 30:04 30 minutes, 4 seconds also identified alternate supplier for this uh alternate manufacturing site u you know which will be based out of the 30:13 30 minutes, 13 seconds US. uh so the objective is to be able to file by early next year next calendar 30:19 30 minutes, 19 seconds year or so Q4 of uh this financial year uh that gives us a twopronged approach to overcome this uh uh so I think you 30:29 30 minutes, 29 seconds know it will it will come back it's a very interesting opportunity being a long-lasting injectable and uh you know 30:36 30 minutes, 36 seconds once we are able to resolve either of these two and now we have two shots at gold uh we will be back in this Uh 30:44 30 minutes, 44 seconds definitely from an FI 28 perspective it will be sure sir uh sir on on ventiline uh that 30:53 30 minutes, 53 seconds is the next question. So uh when uh means we we already mentioned that uh we 31:00 31 minutes have a around 22% kind of or more than 20% kind of market share in the uh the 31:07 31 minutes, 7 seconds albitrol market itself in the US. So now uh with another variant of alvitrol is 31:14 31 minutes, 14 seconds getting approved uh do you find any changes to the kind of market dynamic in terms of the pricing or in terms of the 31:22 31 minutes, 22 seconds competition or in terms of your scope in albbitral as a whole. Uh whether it will lead to incremental business or not 31:31 31 minutes, 31 seconds since it is a variant of albbitrol only and the prescription would be based on on albbitral HA that way. 31:40 31 minutes, 40 seconds Yeah. Yeah. No, these are different products because they get substituted to the different innovator products. So, 31:47 31 minutes, 47 seconds it's a different NDC, different market and we have CGT on the generic vent. So, we will actually be exclusive uh you 31:56 31 minutes, 56 seconds know for 6 month period. Uh and we expect a significant update. there is no cannibalization that will happen on the 32:03 32 minutes, 3 seconds other variant which is a generic to you know another variant of same molecule. 32:09 32 minutes, 9 seconds So we're more likely to take the share from uh uh you know the existing ventilin suppliers rather than you know go from the other franchise. 32:21 32 minutes, 21 seconds Okay just last one question from my side sir uh is there any scope of rationalization of the cost on the cost 32:29 32 minutes, 29 seconds front? See because if the revenue is likely to slide on the US front particularly. So are we likely to see 32:36 32 minutes, 36 seconds any any any uh uh reduction in any cost line item for FI27. 32:47 32 minutes, 47 seconds Uh so look there are two parts of working on number of productivity 32:54 32 minutes, 54 seconds enhancement measures which will help us optimize the cost uh including some of the tech related 33:01 33 minutes, 1 second transformation that we spoke about but you know the short term there are disruptions because of the war situation 33:08 33 minutes, 8 seconds on sourcing side. So uh right now we having visibility to what we've seen so far but you know if it prolongs that's 33:17 33 minutes, 17 seconds something that is uh uh you know that's some still yet to be quantified. Uh but to answer your question on basic 33:24 33 minutes, 24 seconds efficiencies and productivity uh yes we're working on that and it will materialize as we go through uh during 33:31 33 minutes, 31 seconds the year. there there's one more point which I think you should keep in mind is we had invested in our North America 33:39 33 minutes, 39 seconds facilities for these complex products and so far the cost has been there in the last quarter or two but the revenues 33:46 33 minutes, 46 seconds have not commenced come so we will see that uh corresponding revenue with the new launches uh and therefore the 33:53 33 minutes, 53 seconds economies of scale will improve as we go along. 33:57 33 minutes, 57 seconds Sure. Sure. Yeah. Thank you. Wish you all the best. 34:03 34 minutes, 3 seconds Thank you. Your next question comes from the line of Tshar Manutani from Motilal Oswal Financial Services. Please go ahead. 34:11 34 minutes, 11 seconds Yeah, thanks for the opportunity. So just on the R&D uh connecting R&D spend overall almost 2,000 crores and but at 34:20 34 minutes, 20 seconds the same time very few andas file. So is it that the R&D spend pera is significantly higher 34:28 34 minutes, 28 seconds uh maybe for fi 26 25 compared to the earlier uh let's say the philosophy of R&D spend 34:35 34 minutes, 35 seconds for anda that's my first question yes actually we have gone up 34:45 34 minutes, 45 seconds including some um which are on oligoucleotide side as well. So we've gone into more 34:54 34 minutes, 54 seconds respiratory, more peptide and more oligo which is resulting in a higher spend per filing 35:02 35 minutes, 2 seconds and some of these also involve litigation cost as well. So that also leads to a higher R&D spend which has 35:10 35 minutes, 10 seconds got everything uh in that R&D spend that you see both API cost uh your R&Ds that you buy 35:19 35 minutes, 19 seconds litigation etc etc and of course some of these uh olucides etc we go outside to CRO CMOS 35:28 35 minutes, 28 seconds as well so there is also cost involved in that so typically at least for without 35:36 35 minutes, 36 seconds getting into product specific details but let's say for respiratory and oligo uh products like per anda R&D spend 35:44 35 minutes, 44 seconds broad number you would like to call out uh I I think that's very case specific 35:54 35 minutes, 54 seconds so it's difficult to call out an average number um we are guiding towards uh you know 36:03 36 minutes, 3 seconds 7%ish on R&Ds we spend as a percentage of sales and we're also going to I think in 36:11 36 minutes, 11 seconds the mix the uh mix will also change slightly in the coming year because as I 36:17 36 minutes, 17 seconds said 40 to 50 filings with respiratory with uh first to file and certain number 36:24 36 minutes, 24 seconds of peptides etc. So hard to put a metric on per filing because the nature of that filing changes a little bit. But our 36:33 36 minutes, 33 seconds endeavor is to go after complex opportunities which keeps the business sustainable and NPV per project has to be high. Right? That's the internal criteria. 36:45 36 minutes, 45 seconds Got it. 36:47 36 minutes, 47 seconds And uh and secondly u the the albbitral market share has sort of reduced quarter 36:54 36 minutes, 54 seconds quarter while the number had was at 19.5 and it moved up to 22 and we are now back to 19.5. Anything to read through in that? 37:04 37 minutes, 4 seconds No I think it's it's hardly a reduction that you see out there of 4% or so that 37:11 37 minutes, 11 seconds we've seen. So I think 19 to 20 or rather 19 and a half to 20 is something that uh you should pencil in. 37:20 37 minutes, 20 seconds uh we are ranked one out there and uh uh if if supply was uh if you could supply 37:27 37 minutes, 27 seconds more then we could you know there's a potential to increase the share as well and just to complete on that uh the R&D 37:35 37 minutes, 35 seconds part is this indoor site uh regulatory issue also one of the reason for let's say is it delay in filing because of the 37:43 37 minutes, 43 seconds regulatory issue at indoor site or the indoor site classification has got nothing to do with the filing of the assets 37:51 37 minutes, 51 seconds No. So now we have Dest out of Indor. So our assets are fired from US and as one 38:00 38 minutes of the assets we are doing from Goa because Goa is uh clear. 38:05 38 minutes, 5 seconds No, I was referring to let's say prospective filing not the ones which are already spent. Let's say where we do R&D spend where the product probably 38:14 38 minutes, 14 seconds from a validation or exhibit batches are ready but because of classification at indoor site the acceptance of filing by 38:21 38 minutes, 21 seconds USFDA is there is there that kind of a delay also happening? 38:28 38 minutes, 28 seconds same likewise for potential filings also uh we are focusing more on uh Goa and US sites 38:36 38 minutes, 36 seconds uh yeah and and and uh indoor I think we will accelerate uh as and when as soon as it clears. Yeah. 38:47 38 minutes, 47 seconds Got it sir. And just lastly on ventiline um this this product will see a gradual 38:54 38 minutes, 54 seconds pickup in terms of market share uh like what's your strategy if you could highlight given while we have exclusivity but will the pickup be 39:03 39 minutes, 3 seconds gradual enough or we can have a sizable business in say uh two to three quarters timeline. 39:10 39 minutes, 10 seconds Yeah. So you will see towards second half uh a ramp up happening in uh generic ventilator 39:19 39 minutes, 19 seconds uh though we will launch it uh within the uh quarter one and uh quarter one. 39:26 39 minutes, 26 seconds Yeah. And but but the wrap up will happen in uh half two and capacity won't be the constraint for this product. 39:36 39 minutes, 36 seconds No no we we have US uh facility for it. 39:43 39 minutes, 43 seconds uh from the device combination as well perspective from which sorry come again 39:52 39 minutes, 52 seconds from the drug device while drug would be there from not a problem at all on the devices side. 40:01 40 minutes, 1 second Got it. Thanks. Thanks a lot. 40:09 40 minutes, 9 seconds Thanks. Thanks a lot. Thank you. 40:15 40 minutes, 15 seconds Thank you. The next question comes from the line of Damian Kerai with HSBC. Please go ahead. 40:22 40 minutes, 22 seconds Hi. Uh thank you for the opportunity. Uh my question is again on your US uh exit guidance of 1 billion invest 27. So you 40:32 40 minutes, 32 seconds indicated couple of interesting products in respiratory peptides etc. which can help you to achieve this uh rate. So 40:39 40 minutes, 39 seconds Mike two questions there. Uh what kind of visibility you have uh on these products which gives you confidence that 40:46 40 minutes, 46 seconds uh you can receive approval in this year and uh second is uh for some of the bigger assets uh what kind of risk 40:54 40 minutes, 54 seconds mitigation strategies uh which you have already implemented. So if you can uh elaborate on these two points. Thank you. 41:06 41 minutes, 6 seconds No. So see I think it you know it's it's uh in terms of confidence in each of these assets we are seeing some uh uh 41:16 41 minutes, 16 seconds developments happening like for example in adware now you've had a PI that has happened okay ventilin where we 41:26 41 minutes, 26 seconds expecting around the same time we've got the uh approval in certain uh other assets also 41:34 41 minutes, 34 seconds uh there is an ongoing uh you discussion readiness that is there. Of course, we can't anticipate when the approval will 41:43 41 minutes, 43 seconds come through uh but in some of them we are aware of the gold etc. uh us well 41:51 41 minutes, 51 seconds for quarter 3, quarter 4 uh you know ramp up to happen to a billion dollar kind of a run rate and that's what we 41:58 41 minutes, 58 seconds have envisaged uh in our uh business plan and from facility point of view uh all these facilities are also uh needed. 42:09 42 minutes, 9 seconds So from internally it's only pending approval from internally we are ready to uh you know kind of launch these assets as soon as the approval comes through. 42:21 42 minutes, 21 seconds Sure. So when you say facilities uh issues or dies so most of these filings are filed from two sides say one from 42:29 42 minutes, 29 seconds India and one from US. Uh is that the case? 42:33 42 minutes, 33 seconds No no that won't be the case. uh right now these these are filed from uh US or from Goa you'll have one or two assets 42:42 42 minutes, 42 seconds filed but uh and these are respiratories that I'm talking about the peptide is 42:48 42 minutes, 48 seconds with a partner site outside so uh we don't anticipate any that's why I'm 42:56 42 minutes, 56 seconds suggesting that we don't anticipate any uh risks in the facility uh Goa has recently got inspected as 43:04 43 minutes, 4 seconds well Uh there are two observation we are waiting we've responded to those observations we're waiting for the 43:11 43 minutes, 11 seconds classification can't comment on that uh but but uh nevertheless that's that's 43:18 43 minutes, 18 seconds the status of opportunities there sure uh my second question is on your India business so obviously fourth 43:27 43 minutes, 27 seconds quarter I believe is very strong uh and full year you ended at 9% growth uh for the segment 43:35 43 minutes, 35 seconds So u when we look ahead say 27 28 u do you think you can outpace uh IPM growth 43:44 43 minutes, 44 seconds in say next one or two years or it it might take slightly longer because say market growth also improved in uh recent 43:51 43 minutes, 51 seconds time we are seeing around low double digit growth for market. So on that perspective you are uh you are just like 43:58 43 minutes, 58 seconds close by but not outpacing the market as of now. 44:04 44 minutes, 4 seconds Yeah. So, uh we are confident that we'll be able to deliver a strong double-digit growth as well as a market beating 44:11 44 minutes, 11 seconds growth in FI 2728. And we've been seeing that consistent trend over the last uh you know couple of quarters. 44:20 44 minutes, 20 seconds So, uh okay. So, you think uh it's possible. Okay. And uh my last question 44:27 44 minutes, 27 seconds is on your uh gross margin trends. uh if qualitatively you can give some color 44:34 44 minutes, 34 seconds given now your uh product pipeline is becoming uh more complex generics heavy so in that sense how should we look at 44:42 44 minutes, 42 seconds your gross margins in failure term or in medium term yeah see it's a large uh mixed bag in 44:51 44 minutes, 51 seconds the gross margin so there are many factors that go into it so like in the last quarter I had highlighted that we 44:59 44 minutes, 59 seconds had uh you know R&D cost, material cost going up due to which the gross margin had got impacted. So some bit of that 45:08 45 minutes, 8 seconds has got reversed uh in this quarter where the margin is better because also you know not just the product mix but 45:16 45 minutes, 16 seconds also because the R&D material cost was lower in comparison to the previous quarter that you saw. Uh I think uh the 45:26 45 minutes, 26 seconds way I look at it is that of course lenolumite was a high volume uh but most of our recipe assets that are coming are mostly in-house products. 45:37 45 minutes, 37 seconds So in-house products will always give you a a higher end of the margin uh more than the company average that you're 45:45 45 minutes, 45 seconds seeing today. So it'll only agree to your uh company gross margin. uh but at 45:52 45 minutes, 52 seconds the same time you know some of the peptides that we're talking about and oligo oligo is much later but peptides 46:00 46 minutes that we're talking about uh they are partnered products so while the gross margin could be high out there but there 46:08 46 minutes, 8 seconds is also a profit share uh as as a royalty that we end up paying which goes 46:15 46 minutes, 15 seconds into gross net. So therefore your gross margin in those products will be after 46:22 46 minutes, 22 seconds the profit share which kind of brings it down but at the same time the SND etc in the US at least is not much. So it is 46:31 46 minutes, 31 seconds accretive significantly to your uh EITA margin. Uh in India we are moving more 46:38 46 minutes, 38 seconds and more towards chronic. So chronic will definitely come with a 5 to 10% 46:45 46 minutes, 45 seconds better uh gross margin. Uh and we are keeping a very tight control on how much 46:52 46 minutes, 52 seconds whats we do. So keeping all these things in mind uh I think gross margin should 46:59 46 minutes, 59 seconds have a positive bias. And the last thing that I just want to highlight is that generally you will see in the results 47:07 47 minutes, 7 seconds also there's a strong control this that we have over costs. So every year we take some target to actually reduce the 47:15 47 minutes, 15 seconds costs such that it is lesser than the revenue growth that you see out there. 47:21 47 minutes, 21 seconds So I think these are the things that uh we take care of. Of course there is this 47:28 47 minutes, 28 seconds whole geopolitical and war risk that is there. We had some impact of that in 47:35 47 minutes, 35 seconds quarter 4. Uh we have some impact in quarter 1. Not significant though. uh 47:43 47 minutes, 43 seconds but you know some of these inventories that you're buying today as it should get consumed in second half there may be 47:51 47 minutes, 51 seconds some cost but that's temporary like I think your question was more around longer term sustainable 47:59 47 minutes, 59 seconds longer term I've talked about but there may be some bl here and there because of the reason that I mentioned 48:06 48 minutes, 6 seconds sure uh thank you thank you very much for your response all the Thank you. Our next question comes from 48:15 48 minutes, 15 seconds the line of Nikil Matur with HDFC mutual funds. Please go ahead. 48:20 48 minutes, 20 seconds Um yeah. Hi, good afternoon. Um I'm sorry to be hopping on the US guidance. 48:25 48 minutes, 25 seconds Uh one clarification when you saying that you'll be at a billion dollar exit run rate uh does it include landide or it doesn't include any contribution from landide? 48:36 48 minutes, 36 seconds So at the moment we've left that out of this guidance. So that will be an upside to plan uh if you can successfully uh 48:44 48 minutes, 44 seconds you know get back in the market before that. 48:47 48 minutes, 47 seconds Okay. Um so if I analyze this quarter's US revenue you are at around $620 million. Uh we are talking about a 48:54 48 minutes, 54 seconds million exit. So this is about $380 million of incremental revenue. Um just wanted to understand the skewess of this 49:02 49 minutes, 2 seconds $380 million. U so there are I think six seven products that you're launching this year. U how what kind of 49:10 49 minutes, 10 seconds contribution will be from one or two products in this incremental revenue will it be a uh skew towards one or two products or can there be an equitable 49:17 49 minutes, 17 seconds distribution among six seven products because it's I'm just asking so that it doesn't create a big risk in FI28 because if competition comes in then 49:25 49 minutes, 25 seconds again you kind of face situation which you faced in development this year. 49:32 49 minutes, 32 seconds So uh Nikl um in terms of annualized revenues from these products I think 49:39 49 minutes, 39 seconds couple of them we are expecting 100 million plus annualized opportunities right and the other two are also 49:46 49 minutes, 46 seconds significant right so uh and and then there's a so this is respiratory and then there's a peptide 49:53 49 minutes, 53 seconds asset which is also big so we are expecting big contributions I think the reason we're not able to give a quarter wise kind of break up or a product wise 50:01 50 minutes, 1 second break up is because the timing of launch if it moves one or two months you know that affects the uh full year number but 50:09 50 minutes, 9 seconds run rate wise assuming we have uh uh these uh launches you know we will be 50:16 50 minutes, 16 seconds able to cross that uh run rate by the end of the year. So there are you know two three big opportunities and couple of medium mediumsiz opportunities. 50:28 50 minutes, 28 seconds Got it. and and what kind of a tale are we looking at in these uh plus 100 million opportunities? I mean uh can they continue for let's say couple of 50:36 50 minutes, 36 seconds years 28 and 29 or in 28 onwards only we can see some bit of erosion starting to happen. 50:44 50 minutes, 44 seconds So see these are these are not like the six months exclusivity kind of opportunities. So you know even if competition enters they will taper off 50:53 50 minutes, 53 seconds slowly right. So they are more like the way to look at it is what you saw on our alutrol or what you saw on our 51:01 51 minutes, 1 second landriotide prior to supply disruption issues. These are more steady opportunities. Uh so where we have to 51:08 51 minutes, 8 seconds manage some level of price erosion uh but not not a cliff kind of scenario right so these are steady opportunities 51:16 51 minutes, 16 seconds and and if there is a price erosion uh with new competition coming in you may see some volume going up. So you'll have 51:24 51 minutes, 24 seconds to manage it as a dollar value rather than looking at it as volume or a price gain. 51:33 51 minutes, 33 seconds Understood. Um on the India business uh can you quantify the contribution from your peak in 4Q? I imagine it's only 4Q 51:42 51 minutes, 42 seconds where your peak would have contributed not in KQ right? 51:47 51 minutes, 47 seconds Uh yeah it it wasn't that large because you know real sales started happening in Jan. So Jan Feb March you know we've 51:55 51 minutes, 55 seconds seen growth internally in secondaries uh April also we saw an improvement over March on secondaries but yeah I mean it's not out of the 15% overall one 52:04 52 minutes, 4 seconds India we've reported it's not going to be a meaningful percentage um sub 1% is is that the sub one or sub 52:14 52 minutes, 14 seconds 2% is that how we should read it I think those figures are broadly available in the market uh if you look 52:22 52 minutes, 22 seconds at IQ we'll give you a direction of how much primary we are doing. 52:27 52 minutes, 27 seconds Okay. And uh is there any M&A component or in licensing component that I might have missed which is also leading to this double digit growth in 4Q. 52:39 52 minutes, 39 seconds Yes, we had in licensing uh of some FISA products. Um and we had a small acquisition of a business called Inspera. 52:51 52 minutes, 51 seconds So add that yeah I think yeah the base base will still be double digit I think the presentation also we had mentioned uh I 53:00 53 minutes think the four or last last time or we've already announced these three fours 53:07 53 minutes, 7 seconds and acquisitions that we have made okay thank you so much 53:15 53 minutes, 15 seconds thank you our next question comes from the line of Sion Mukharji with Namura please go ahead. 53:24 53 minutes, 24 seconds Yeah hi thanks for taking my question. 53:26 53 minutes, 26 seconds Um over the next uh let's say 2 3 years how should we think about uh you know your capital deployment 53:35 53 minutes, 35 seconds both uh let's say organically or inorganically uh if you can give any color the kind of assets and capabilities that you're looking at. 53:47 53 minutes, 47 seconds Yeah. So uh look I think we are uh preparing for a solid growth over the next uh you know five years and beyond 53:56 53 minutes, 56 seconds and for that I think the number one deployment is going to be on R&D side. 54:00 54 minutes So uh we are we have plans to accelerate R&D pipeline. So respiratory assets we have some under approval more which 54:08 54 minutes, 8 seconds we're filing complex products which we outlined for peptides you know other differentiated products but also we're 54:16 54 minutes, 16 seconds going to step up on biosimilar side uh where we would want to do uh you know roughly uh six to eight internally and if we 54:25 54 minutes, 25 seconds find a couple of good opportunities we can supplement through inorganic as well so that will consume some capital. 54:32 54 minutes, 32 seconds uh then we have capeex uh which we have increased steadily over the last uh 3 years. uh so this cycle will probably 54:40 54 minutes, 40 seconds reduce after another year or so because you know we've built enough capacity for the products that we want to supply and beyond that we will be led more by productivity initiatives. 54:50 54 minutes, 50 seconds Um on top of that inorganic you know we are interested in looking at assets we you know we evaluate several assets. uh 55:00 55 minutes our bias is more towards differentiated specialty kind of products uh for developed markets you know which is US 55:08 55 minutes, 8 seconds and Europe uh which give us a more sustainable uh growth and some capabilities as well. So I think those are the areas where we would want to 55:17 55 minutes, 17 seconds deploy capital um in order to you know sustain the entire trajectory over a longer period of time. 55:26 55 minutes, 26 seconds Yeah. anything in India or emerging markets like more in branded generic space you think uh SPLA would be looking 55:33 55 minutes, 33 seconds at or this would be largely organically built. 55:39 55 minutes, 39 seconds So uh India we've actually put a slide in the investor deck on the partnerships we've 55:46 55 minutes, 46 seconds done acquisition uh a large acquisition in India is uh you know little difficult 55:54 55 minutes, 54 seconds for us because we are a number two number three player you know we're actually number one by volume so whenever we start looking at some of 56:01 56 minutes, 1 second these you know there's a significant overlap that we have to uh you know account for so emerging market remains a very good opportunity for us. 56:12 56 minutes, 12 seconds We're looking at that and if we find opportunities where we get uh you know business plus capabilities that would 56:20 56 minutes, 20 seconds excite us a little bit more because then that gives us a platform for future growth as well. 56:27 56 minutes, 27 seconds Right. Actually just one clarification because your cash on balance sheet is pretty large now. Uh and you know the 56:34 56 minutes, 34 seconds kind of uh expansion organically and inorganic opportunity it appears that you know it won't get consumed. Uh so I 56:43 56 minutes, 43 seconds mean are we then thinking about uh high dividend payout? Um what what are your thoughts on on the cash that you have on on your books now? 56:54 56 minutes, 54 seconds So as you said you know see there are opportunities to deploy uh we need to be selective you know we when we look at it 57:01 57 minutes, 1 second as uh you know in absolute rupee dump it looks high but if you were to chase one or two large transactions meaningful 57:08 57 minutes, 8 seconds transactions you know this is not a very high amount of cash so I don't think you know um uh we are worried about the cash 57:17 57 minutes, 17 seconds on our books it gives us flexibility and it gives us opportunities to look at options age uh you know which can help the future growth of the organization. 57:27 57 minutes, 27 seconds At the same time we do remain selective because um you know of the kind of opportunities that we're looking at you 57:36 57 minutes, 36 seconds know have to really spark all our filters in terms of uh you know diligence and and adding strategic value. 57:46 57 minutes, 46 seconds Right. Thanks and all the best. Thank you. 57:53 57 minutes, 53 seconds Thank you. The next question comes from the line of Niha Manpurya with Bank of America. Please go ahead. 58:01 58 minutes, 1 second Yeah. Uh thanks for taking my question. 58:03 58 minutes, 3 seconds Uh a quick question on the India business. Um I think you mentioned we grew double digit in the trade generic business. Um and I see we are growing 58:11 58 minutes, 11 seconds double digit in consumer healthcare as well you know in FI26. So is it fair that the branded generic business has actually been pretty muted for the 58:19 58 minutes, 19 seconds entire year? Therefore, what gives us confidence that we'll be able to beat India growth uh in the next year? 58:28 58 minutes, 28 seconds Um yeah, so I think uh you know we uh mentioned that uh you know all the three segments of the business have done 58:36 58 minutes, 36 seconds really well in especially Q3 and Q4. Q1 we had a muted quarter on the branded uh 58:45 58 minutes, 45 seconds RX business but that is behind us now right there were reasons related to seasonality etc but we've not seen those 58:53 58 minutes, 53 seconds similar reasons as we started you know this particular financial year so uh with the products we have and the 59:00 59 minutes strategies that are there we are uh you know we are quite confident and we've seen that trend now over you know uh at 59:08 59 minutes, 8 seconds least a two quarter which gives us confidence that this will continue and you know also we should still 59:17 59 minutes, 17 seconds acknowledge that acute is uh a fair representation in our in our 59:24 59 minutes, 24 seconds mix in comparison to other players and market. Okay. So and and that is season 59:32 59 minutes, 32 seconds dependent and uh last couple of years we've had challenging seasons. So it we have to work much harder in other part 59:40 59 minutes, 40 seconds of our portfolio to achieve that growth which at least we've been able to do in the la second half of the year. 59:48 59 minutes, 48 seconds So in that case given that we've had a you know fairly low base on seasonality uh ideally even a normal season should give you that tailwind uh for India 59:57 59 minutes, 57 seconds growth this year right that would be a fair assumption even if we didn't have like even a normal season should help. 1:00:05 1 hour, 5 seconds Yeah. So that's why we're saying you know we are confident about a double digit growth uh because uh we these seasonal patterns you know don't happen 1:00:14 1 hour, 14 seconds too many years in a row right so I think the base uh was low for last year on some of these acute uh things but also 1:00:21 1 hour, 21 seconds the chronic portion particularly diabetes cardiology has grown significantly so we we have also 1:00:29 1 hour, 29 seconds diversified beyond that seasonality dependent portfolio so yes we we will overcome 1:00:36 1 hour, 36 seconds Okay. And my second question is on the margin uh guidance that we mentioned 18 and a half to 20. Given that a lot of the you know US growth will be sec the 1:00:45 1 hour, 45 seconds high value launches would be second half weight rated. Um is it fair to assume that in the second half our margins could be north of the 20% range and therefore the average that you've given? 1:00:56 1 hour, 56 seconds Uh would that be a fair assumption? 1:00:59 1 hour, 59 seconds Yeah. Yeah. So uh that's that's exactly what I had uh mentioned uh initially that uh in 18 and a half to 20% that we 1:01:07 1 hour, 1 minute, 7 seconds guiding it will be more in the favor of H2 where you'll have better than average 1:01:16 1 hour, 1 minute, 16 seconds and first two quarters where we don't have the benefit of new launches 1:01:22 1 hour, 1 minute, 22 seconds uh we we will see a lower margin uh than the average that giving. Uh so yeah, 1:01:32 1 hour, 1 minute, 32 seconds that's that's the trend that you will see. 1:01:41 1 hour, 1 minute, 41 seconds Thank you. 1:01:47 1 hour, 1 minute, 47 seconds We take our last question for the day from the line of Vive Agraal from City Group. Please go ahead. 1:01:54 1 hour, 1 minute, 54 seconds Yeah, thanks for the opportunity. I'm just uh again trying to understand your AIDA margin guidance. Uh given the outlook you provided for uh the US 1:02:02 1 hour, 2 minutes, 2 seconds business $1 billion plus run rate and India double double digit growth in FI27 this 18.5 to 20% uh appear a bit 1:02:11 1 hour, 2 minutes, 11 seconds conservative just trying to understand have you baked in significant impact of let's say input cost increase or impact of geopolitical institution etc or 1:02:19 1 hour, 2 minutes, 19 seconds anything that is holding you back uh from giving a better guidance. Thank you. 1:02:27 1 hour, 2 minutes, 27 seconds See I think you know we have made a lot of investment in the last one or two years both on people as well as on R&D. 1:02:36 1 hour, 2 minutes, 36 seconds Okay. And uh both these cost is going to sustain uh people cost will continue to 1:02:44 1 hour, 2 minutes, 44 seconds be uh high because we've made in manufacturing facilities and to add ports etc. 1:02:52 1 hour, 2 minutes, 52 seconds uh I think more or less that investment phase is coming to an end but of course that people cost is now sitting with us 1:03:00 1 hour, 3 minutes and revenue of that will start coming in like a said later with the new launches coming in R&D also while it is 1:03:09 1 hour, 3 minutes, 9 seconds discretionary and in hand but still will continue to be at about 6 to 7% but more 1:03:17 1 hour, 3 minutes, 17 seconds biased towards 7% because we are increasing the number of programs etc. 1:03:22 1 hour, 3 minutes, 22 seconds So therefore I think uh uh you know 18 and a half to 20 is a fair uh margin to 1:03:31 1 hour, 3 minutes, 31 seconds assume uh you know we are taking in more moderate kind of a war risk and we hoping that 1:03:40 1 hour, 3 minutes, 40 seconds it's temporary and not really going to sustain. If it sustains then of course 1:03:46 1 hour, 3 minutes, 46 seconds uh you know uh this margin we'll still try to mitigate through other measures but nevertheless uh you're not in a very 1:03:54 1 hour, 3 minutes, 54 seconds long-term kind of a uh sustained impact of that. 1:04:00 1 hour, 4 minutes Yeah. Understood. And uh given that you are suggesting two edge margins uh to be better than one edge and uh it will 1:04:08 1 hour, 4 minutes, 8 seconds affect uh new launches in the US. So is it fair to understand that 28 margins or F28 margins can be materially different or better than F27? 1:04:21 1 hour, 4 minutes, 21 seconds That would be our target right. So we will obviously work towards continue to improve our uh targeted margin. You know 1:04:31 1 hour, 4 minutes, 31 seconds to be fair I think it should 20 plus is something that we should uh anyway sustain going forward. 1:04:38 1 hour, 4 minutes, 38 seconds Last question on one product Natan. Uh so how material this product can be? So is it a very short-term opportunity for two three months or uh it can last 1:04:46 1 hour, 4 minutes, 46 seconds throughout this year? It's going to help us understand. Thank you. 1:04:52 1 hour, 4 minutes, 52 seconds Um it's not a very large product but uh you know we've got good market share so it's doing well for us. We've had a few 1:05:01 1 hour, 5 minutes, 1 second other launches as well already in the year but these are not uh I don't would not call them out separately. the thought of that. 1:05:09 1 hour, 5 minutes, 9 seconds Thank you ladies and gentlemen. That was the last question for today. I would now like to end the conference over to Miss Dsha Maheshwari for closing comments. 1:05:21 1 hour, 5 minutes, 21 seconds Thank you everyone for joining in. If you have any further questions, please write it to investor.reations at greatsipla.com. Thank you. 1:05:32 1 hour, 5 minutes, 32 seconds Thank you. On behalf of Simpla Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.