Eris Lifesciences Ltd — Q3 FY26

Eris Lifesciences Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=-U0dURnQCTo Published: 3 months ago

0:00 Ladies and gentlemen, good day and welcome to the Q1 FY26 earnings conference call of AIS Licenses Limited. 0:09 9 seconds Today we have with us on the call Mr. 0:11 11 seconds Amit Bakshi, chairman and managing director, Mr. V. Krishna Kumar, Chief Operating Officer and Executive 0:17 17 seconds Director, Mr. Sachin Sha, Chief Financial Officer, and Miss Koti Rahul, Vice President, M&A and investor relations. 0:27 27 seconds As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation 0:35 35 seconds concludes. Please note this call is being recorded. I would now like to hand the conference over to Mr. V. Krishna 0:42 42 seconds Kumar, Chief Operating Officer and Executive Director of the company. Thank you and over to you all. 0:51 51 seconds Thank you. Good evening everybody and welcome to our uh Q1 uh earnings call. 1:02 1 minute, 2 seconds So to get started the key highlights of the quarter uh the domestic branded business segment which is now uh 1:10 1 minute, 10 seconds representing the fully integrated uh uh segment consisting of all acquisitions. 1:16 1 minute, 16 seconds It has grown 11% this quarter thereby outperforming the IPM by 330 basis points and if we uh exclude the impact 1:24 1 minute, 24 seconds from discontinued FDC's and some insulin shortages we've seen this quarter uh the segment growth was 13 to 14%. The 1:32 1 minute, 32 seconds operating margin of the DBS segment has expanded to 37% uh despite the addition of 300 MRS this 1:39 1 minute, 39 seconds year. The value creation in the bioon segment continues. The Q1 operating margin for this segment was at 30% which 1:48 1 minute, 48 seconds is up from 19% at the time of acquisition. The EPS acceleration has kicked off as per our guidance. We 1:55 1 minute, 55 seconds recorded a 41% growth in packstroke EPS in the quarter. We've taken a decision to ramp down the trade generics 2:03 2 minutes, 3 seconds business. We took an IITA loss XTBF of around 5 crores in this quarter. After significant delays, we are happy to 2:11 2 minutes, 11 seconds share that we have commenced the manufacturing of insulin wires at Bopal and we expect the production of insulin cartridges to commence from quarter 4. 2:19 2 minutes, 19 seconds uh we expect the upside from the RSI cartridge market opportunity to acrew starting November December of this year 2:26 2 minutes, 26 seconds and the OCF to EIAR ratio from protein operations came in at 65% this quarter and post adjustment for strategic 2:33 2 minutes, 33 seconds stocking up of Bioon products inventory stood at 40% we'll talk more about this going forward 2:42 2 minutes, 42 seconds the key numbers for the quarter DBF revenue of 702 crores versus 632 crores 2:48 2 minutes, 48 seconds So 11% growth year on year. DBAITA margin 37.2% an expansion of 155 pips yearon year. 2:57 2 minutes, 57 seconds Bioon segment margin of 30% versus 19% at acquisition. Consolidated revenue of 3:04 3 minutes, 4 seconds 773 crores up 7.4% yearonear. Consolida margin of nearly 36% up from 35% in the 3:14 3 minutes, 14 seconds last in the Q1 of last year. and consolidated profit after tax of 125 crores in the quarter up from 89 crores in Q1 of last year. 3:28 3 minutes, 28 seconds Some key updates on the insulin business. So the the DS shortage is you know by and large behind us. However, 3:35 3 minutes, 35 seconds the DP shortages continue to persist. So we took a revenue hit of around 10 crores in this quarter on that account. 3:42 3 minutes, 42 seconds uh in response to that we have created a strategic stockpile of insulins to help us in the subsequent quarters. This has 3:49 3 minutes, 49 seconds created a working capital increase of 73 crores in this quarter with a consequent effect on OCF uh mobile manufacturing 3:57 3 minutes, 57 seconds commissioned as already articulated and we have also initiated the supply of insen wires from MJ Bioarm site as an 4:05 4 minutes, 5 seconds additional source. Uh the cartridge operation in Bopal is expected to be commissioned in Q4 and we are on track 4:13 4 minutes, 13 seconds to leverage the market opportunity in RHI pencils starting November December. 4:19 4 minutes, 19 seconds This is a visual of the wireless line which is operational at Bopal which is capable of handling liquid as well as lifolized biologicals. 4:29 4 minutes, 29 seconds Key updates on the GLP front. Uh so the the the cartridge line from Boschian struggle is under installation. Uh it is 4:38 4 minutes, 38 seconds the latest KFM series line which is built to regulated market standards and we will be using this for RHIGN as well as GLP1. 4:46 4 minutes, 46 seconds In terms of the market uh front uh we we see a significant uh you know uptick in the market activity and the market buzz 4:54 4 minutes, 54 seconds around the weight loss therapy. Uh so this is uh this is more or less in line with our expectation that there would be 5:01 5 minutes, 1 second a large GLP1 market formation in India post LOE. In terms of uh driving BP 5:08 5 minutes, 8 seconds self-sufficiency, we have initiated the validation of synthetic semaglutide at our Swiss parental facility in Ahmedabad. 5:17 5 minutes, 17 seconds We have the cartridge line under installation as discussed and uh we are planning to take validation batches of our recombinant semaglutides at the 5:25 5 minutes, 25 seconds Bopar site in quarter 4. Also happy to share that the recominant sema candidate is on track to enter phase 1 in quarter 5:33 5 minutes, 33 seconds 4. So we retain our position that we expect to be among the first launches in India poste. 5:43 5 minutes, 43 seconds Moving to our small molecule R&D pipeline, we uh have shared with you before that we have 25 candidates that 5:50 5 minutes, 50 seconds went into uh development this year. This is a combination of uh oral solids as well as injectables products. So some of 5:59 5 minutes, 59 seconds the launches where we have clarity on calling them out for quarter 2 and quarter 3 are as outlined on the slide 6:07 6 minutes, 7 seconds uh including uh several combinations of dapa glyphosin glypin and eakanom. 6:18 6 minutes, 18 seconds Cutting over to the international business uh glad to share that uh most of the investments that have gone in 6:25 6 minutes, 25 seconds over the last 12 to 15 months have uh we can see clear line of sight now. So just to give a bit of recap at the time of 6:33 6 minutes, 33 seconds acquisition Swiss had a 20-year legacy in injectables but largely from the RO markets. So despite having two EU 6:40 6 minutes, 40 seconds approved plants, Europe accounted for less than 3% of their revenue and this revenue mix was carried forward in FI25 6:47 6 minutes, 47 seconds and the current year is also likely to be similar. Uh one of the biggest uh decisions we took post deal was to pivot the business so that we deepen our EU 6:56 6 minutes, 56 seconds presence. Uh we consciously chose the CDMO model uh so that we would have proprietary contracts with marquee 7:04 7 minutes, 4 seconds generic companies. uh we have been able to leverage our advantage of having the widest range of dosage forms among all 7:12 7 minutes, 12 seconds the EU approved injectable manufacturers in India and what we essentially sought to do was to migrate the business to the top of the pyramid in terms of clients 7:20 7 minutes, 20 seconds as well as market. This has been our strategy in our DBF business as well and and this is something that we sought to mirror in international. So happy to 7:29 7 minutes, 29 seconds share that this business is on the cusp of exciting growth starting the next financial year. We have confirmed contracts of more than 100 crores 7:37 7 minutes, 37 seconds revenue peranom which are in various stages of execution and this is just to give you a flavor of what some of those contracts look like. So we have a 7:45 7 minutes, 45 seconds contract for a range of corticosteroids uh across several EU countries. Uh we have some niche betalactum DPI. So the 7:54 7 minutes, 54 seconds the whole EU accredititation has opened up Canada and A&Z for us as well. uh because the same GMP is uh adequate to 8:03 8 minutes, 3 seconds supply to these markets. Uh the client mix consists of global and regional generic players and uh starting with 8:11 8 minutes, 11 seconds less than 3% uh in FI28 we expect that at least three out of the top five European countries will rank among our top 10 international markets. 8:22 8 minutes, 22 seconds the quarter 1 update uh export revenue of 68 crores versus 74 crores uh yearon-year and EITA consequently of 22 8:31 8 minutes, 31 seconds crores uh and in terms of the regulatory updates uh we received the EUGMP approval for both the injectable sites 8:39 8 minutes, 39 seconds uh as well as a bunch of additional approvals in terms of the key inspections done during the quarter the Latin American inspections are you know 8:47 8 minutes, 47 seconds among the top in terms of uh commercial significance uh our new product develop Velment approach has also been pivoted with an 8:54 8 minutes, 54 seconds EOentric approach. So we added a very interesting LOE opportunity to our injectable pipeline. We are targeting to be among the first generic launches in 9:03 9 minutes, 3 seconds Europe. We also added several niche products in critical care women's health where there are only one or two uh players in Europe. Uh so these are all 9:12 9 minutes, 12 seconds products that we will uh look forward to launching in subsequent quarters. Uh we are on track to deliver the guidance. uh 9:20 9 minutes, 20 seconds Swiss is a lumpy business. Quarter 1 uh is the lowest quarter for them. Though growth over the next 18 months as we have called out will be driven by 9:28 9 minutes, 28 seconds migrating to the top of pyramid in terms of markets and clients. Uh we do have some capacity constraints in a couple of lines which will ease up once the new unit gets commissioned. 9:40 9 minutes, 40 seconds Summary of consolidated financials uh revenue of 773 crores for the quarter uh with a growth of 7 12%. So couple of 9:48 9 minutes, 48 seconds things dragging it down. One is exports which is lumpy as we've called out and the second piece is the trade generics business which we have started ramping 9:56 9 minutes, 56 seconds down. So we got a revenue of 3 crores this quarter versus 13 crores in the quarter 1 of last year. This has also led to an AITA loss of 5 crores at a 10:04 10 minutes, 4 seconds consolidated level. EITA margin for Q1 has expanded uh from 35 to 36% at a 10:11 10 minutes, 11 seconds consolidated level and we got around a 20% interest reduction interest expense reduction yearon year. Uh so quarter 1 10:20 10 minutes, 20 seconds PAT stands at 125 crores which is a year-on-year growth of 41%. 10:28 10 minutes, 28 seconds So quarter 1 net debt uh stood at 2,300 odd crores uh which is uh 100% uh sorry 100 crores over what we closed FI25 at. 10:39 10 minutes, 39 seconds This has been on account of a couple of factors capex of 66 crores and the inventory buildup of the bioon products. 10:46 10 minutes, 46 seconds Uh having said that we reaffirm our net debt guidance of 1,800 crores by the end of the year which will bring us to a net debt to a bit of around 1 and a halfx. 10:57 10 minutes, 57 seconds The details of our consolidated financials I think we've uh we've covered all the major uh points on the earlier slide. EPS for the quarter came 11:05 11 minutes, 5 seconds in at around 9 rupees and cash EPS at around 12 rupees. 11:11 11 minutes, 11 seconds In summary, we are on track to uh execute all our strategic priorities for the year in the anti-diabetes segment, 11:20 11 minutes, 20 seconds in the base business, in the international business as well as with respect to our balance sheet and uh we 11:27 11 minutes, 27 seconds reaffirm our consolidated guidance for the year as uh called out in the previous quarter. 11:34 11 minutes, 34 seconds This brings us to the end of the presentation and now we can uh take questions. 11:42 11 minutes, 42 seconds Thank you sir. Ladies and gentlemen, we will now begin the question and answer session. Participants who wish to ask questions may do so by clicking the 11:51 11 minutes, 51 seconds raise icon at the bottom of your screen and wait for your turn to speak. 11:56 11 minutes, 56 seconds When prompted, you can accept the prompt on your screen. Unmute your audio and ask your questions. 12:04 12 minutes, 4 seconds You wait for a moment while the question queue assembles. 12:23 12 minutes, 23 seconds Okay, the first question comes from Harit Ahmed. 12:30 12 minutes, 30 seconds Please go ahead with your question, sir. 12:35 12 minutes, 35 seconds Yeah. Uh good evening. Uh thanks for the opportunity. 12:38 12 minutes, 38 seconds So, uh my first question is on the regret. In the past, you had said that this uh should be an interesting opportunity for us. But when I look at 12:47 12 minutes, 47 seconds AOCD data, we don't see much traction for us for our brand. So uh given that this is the only uh GLP1 drug approved 12:56 12 minutes, 56 seconds for uh obesity indication that's launched in India till date, the uh slow 13:03 13 minutes, 3 seconds ramp up is a bit of a surprise. So any color here? 13:10 13 minutes, 10 seconds Yeah. So look uh little bit of a uh you know check there. We have two products which have been approved for obesity in 13:18 13 minutes, 18 seconds India. Now uh the first one we all know was Mangaro and then subsequently Viguvi also kind of got approved with the same 13:27 13 minutes, 27 seconds similar indication and the last thing is we haven't yet got the uh power obesity lea which is a three 3 mig lea commonly called sixenda. 13:38 13 minutes, 38 seconds uh we haven't got the permission yet. So we are just waiting. There's some little bit hiccup there. So that's uh on the uh 13:46 13 minutes, 46 seconds obesity approval in India. Second uh why is not picking up LRA is uh look now the competition is stiff. 13:55 13 minutes, 55 seconds What we believe is that till the time the higher cost JSPs are available the patient would logically get on LRA as a 14:04 14 minutes, 4 seconds followup but that will take some time that will take a lag another 3 months uh roughly so our plan was to kind of ramp 14:12 14 minutes, 12 seconds up our uh sexenda generic sixender which hasn't been launched yet and we were not expecting uh so much of action from two 14:22 14 minutes, 22 seconds brands which have come in we were we were thinking about one brand which would have come by this point of time. 14:27 14 minutes, 27 seconds So our expectation from uh generics extender has you know internally we have lowered it for the remaining part of this year. Uh but I think VA should ramp 14:36 14 minutes, 36 seconds up. Give us another 3 months it should ramp up but uh you know please remember we've always talked about post sema 14:44 14 minutes, 44 seconds patent expiry NRA would have a limited run. Okay. 14:52 14 minutes, 52 seconds Uh and on uh second one on sema uh you mentioned you confirmed that you you're planning to be there at market 14:59 14 minutes, 59 seconds formation. Uh just to confirm whether this is for both indications diabetes and obesity and if you could give some 15:07 15 minutes, 7 seconds color on the status of development for your partner. Have they completed the trials? Uh any any indication on their 15:16 15 minutes, 16 seconds filing timelines etc. just to get more comfort around the uh you know launch. 15:23 15 minutes, 23 seconds No, I I completely agree with you. So yes, we maintain that we should be first of the block in SEMA as far as uh you 15:30 15 minutes, 30 seconds know the regulatory approvals are concerned. So we would be having our last patient in uh by the end of August. 15:40 15 minutes, 40 seconds So the randomization has been done. The last pat we have recruited the larger larger part of the patients have already been recruited. So we will have the last 15:49 15 minutes, 49 seconds patient in by the end of October by the uh end of August which makes it 6 months from there 15:57 15 minutes, 57 seconds for the final uh report which is say December Jan and then another two months for approval you know on a higher side. 16:07 16 minutes, 7 seconds So that's how we are placed. So as of now it looks safe to say that we should be there. 16:14 16 minutes, 14 seconds Okay. uh and with your permission if I can ask one more uh your comment that uh shortages 16:22 16 minutes, 22 seconds persist in in uh drug product. So you know while the opportunity in uh uh 16:30 16 minutes, 30 seconds human insulin uh due to Noah's exit is going to open up uh later this year will 16:37 16 minutes, 37 seconds uh the shortage of capacities for the product be a constraint for us in terms of capturing a share of that opportunity. 16:46 16 minutes, 46 seconds Yeah. So you know I indicated earlier that there will be a little touch and go when it comes to DP but you know there 16:54 16 minutes, 54 seconds the situation is getting actually little better. So the thing which we were expecting to happen earlier in terms of 17:01 17 minutes, 1 second shortages will now take a while longer and uh you know if you would have seen the uh presentation there's a picture 17:10 17 minutes, 10 seconds which we show of you know Boston stubble uh machine being installed. So we received the machine uh in the month in 17:17 17 minutes, 17 seconds late late in July and the ramp up is starting now. If you're lucky and both of these uh things kind of coincide then 17:26 17 minutes, 26 seconds uh you know it will be a huge amount of supply which we will have and you know if it takes 1 month or 2 months we will have to struggle for that time. Our 17:35 17 minutes, 35 seconds struggle is still limited to 20% of what we wanted. So if you were planning for 10 we are good at eight. So that 20% gap 17:42 17 minutes, 42 seconds still persist. We have added another site uh you know for insulin but that is again for vials because v is also 17:50 17 minutes, 50 seconds something which we were kind of you know we were having a little bit of a shortage. So as of now the plans which 17:57 17 minutes, 57 seconds we have given has been keeping in mind uh the kind of supply we had but because 18:04 18 minutes, 4 seconds it has gone delayed and this is also coming. So if it happens together then we are actually in a better position but we'll wait it out for the next quarter to uh you know be really on top of that. 18:15 18 minutes, 15 seconds But uh I mean specifically on the cartridge front because that's where the opportunity is opening up right. Yes. 18:21 18 minutes, 21 seconds So yes how's our readiness on on that front? 18:25 18 minutes, 25 seconds readiness in terms of the new facility you're talking. 18:28 18 minutes, 28 seconds Yeah. Yeah. Yeah. Uh will we be ready with the new capacities or will the will the shortages on the cartridge front ease by the time you know towards the 18:37 18 minutes, 37 seconds end of the year which is what you indicated? 18:39 18 minutes, 39 seconds That's the calculation which we are doing as of now. Okay. 18:43 18 minutes, 43 seconds This is the calculation which our machine has already arrived. It will now start the the whole process will start then we will take the you know validation batches and all those things. 18:52 18 minutes, 52 seconds So as of now it looks good. So we are still saying that Q4 is the time when we will get it out and we are also saying 18:59 18 minutes, 59 seconds that November December is the time when the shortages will actually kick in. 19:04 19 minutes, 4 seconds If these two go inside then we are you know better than what we think. If there is a delay then again you know we have a 20% kind of a risk which lingers. 19:15 19 minutes, 15 seconds Okay. Okay. Okay. I'll get back in with you. Thanks for taking my question. Thank you. 19:22 19 minutes, 22 seconds Thank you. 19:24 19 minutes, 24 seconds The next question comes from Kunal Damesha. 19:29 19 minutes, 29 seconds Mr. Kunal, you can unmute the prompt on your screen. Unmute your audio and ask your question. 19:36 19 minutes, 36 seconds Hi, can you hear me? Yeah. 19:39 19 minutes, 39 seconds Hi. Yeah. Hi. Thanks. Thanks for taking my question. Uh the first one on the uh current GLP1 market. So uh you know both Lily and uh you know is in the market. 19:52 19 minutes, 52 seconds Do we have any uh view as to let's say the current market size whether these medications are primarily being 20:00 20 minutes prescribed for type 2 diabetes or for obesity or any proportion uh in between 20:10 20 minutes, 10 seconds early but you remember maybe we were one of the first to call out that you know uh we expect this market post LO to be 20:19 20 minutes, 19 seconds 2,000 to 3,000 crores and at that point we had a discussion on this but as the things are getting clear you know as we 20:28 20 minutes, 28 seconds can see more of it now you know our confidence is only going up so let's get the first thing which we spoke last time may maybe a quarter 20:36 20 minutes, 36 seconds earlier that the market formation is very encouraging right the pentup demand has was there for uh weight loss and we see the 20:45 20 minutes, 45 seconds pent-up demand uh you know being met the first of the hook is the weight loss diet they are more motivated with the 20:54 20 minutes, 54 seconds current cost prices they are kind of you know more their readiness is bigger so unless and until the prices come down 21:01 21 minutes, 1 second which happens after NOE I feel it could be more like 7030 but once it opens up I 21:07 21 minutes, 7 seconds believe it will be 3070 30 for weight loss and 70 for diabetes 21:15 21 minutes, 15 seconds which is what it is globally now right for the innovator also yeah it's roughly 70% You are right. You are right. You are 21:23 21 minutes, 23 seconds this is what has happened after you know after a decade of these drugs being available. So for us it will happen little early. This is what I estimate. 21:32 21 minutes, 32 seconds Kal very interesting kural you know we are working on the adjacencies also and we find even that is very interesting. 21:41 21 minutes, 41 seconds We'll talk about it later but the adjacencies to GLP seems to be very interesting. 21:47 21 minutes, 47 seconds Sure. Sure. Sure. That's great. Second one on the export business uh I mean know it has obviously year on year it 21:54 21 minutes, 54 seconds has come off and you suggested that the uh timing of shipment etc but is there any change in the outlook for that 22:02 22 minutes, 2 seconds business uh for FI26 or we stick to it there's been deferred shipment which will come in Q Q2 or something. So right 22:10 22 minutes, 10 seconds now we don't uh we do not we don't believe that there's any change in what we have said and the business has been 22:17 22 minutes, 17 seconds look 30 35% has always been in H1 historically so nothing changes from that point of view in fact we have told you we have 22:25 22 minutes, 25 seconds you know we have tried to convey on the slide that how we are trying to you know improve the only problem which we see in 22:32 22 minutes, 32 seconds uh in the export business injectable is a little bit of a cap capacity problem and this would remain for at least one 22:41 22 minutes, 41 seconds and a half years. So most of the growth or all of the growth will come from a higher ticket size of what we have been 22:49 22 minutes, 49 seconds preparing in the last one and a half years and we you know we showed you in the slides that we have some deals jotted down already and some of them are 22:58 22 minutes, 58 seconds in the pipeline but all in all you know we got the EU approval which was a good thing uh you know for us to get and the 23:05 23 minutes, 5 seconds other approvals are also work in progress. So we our belief is that we will be able to rack up the ticket size. 23:14 23 minutes, 14 seconds Uh but the volume will remain a little bit of a problem unless we have the new uh you know the new capacity coming up 23:21 23 minutes, 21 seconds which will take a year and a half from where we are right and this is not conservative. So it can be 1 and a half 23:28 23 minutes, 28 seconds to two years on the you know on the other side but once it uh comes up uh punal we are then preparing for a 3x 23:36 23 minutes, 36 seconds capacity of what we are because you know numbers which used now we are doing a lot of uh you know there's a lot of rationing which is happening not being 23:45 23 minutes, 45 seconds able to supply the lower margin for us and concentrating on the higher margins and what it also takes when once you get 23:52 23 minutes, 52 seconds into EU markets and bigger clients then what happens you have to call the companies also for an inspection. So 24:00 24 minutes those guys also come for inspection and that causes a little bit delay on the average production time. So all together 24:08 24 minutes, 8 seconds we believe we will be uh numbers will be done in this year and the ticket style good or ticket size would improve and 24:16 24 minutes, 16 seconds once the capacity comes in this business might see a better than expected ramp up. 24:24 24 minutes, 24 seconds Then what should be the steady state profitability of this business? Let's say without taking into account the new capacity with their current existing 24:33 24 minutes, 33 seconds capacity, how should this kunal the base business has been always 24:40 24 minutes, 40 seconds been a 34 35% operating margin business and there's no reason to believe that it should change. uh I think from a quarter 24:48 24 minutes, 48 seconds one perspective you see a slightly slow low number because it's carrying the cost of some investments which we've made which will start seeing results in 2027 onwards. 24:57 24 minutes, 57 seconds Yeah. 24:57 24 minutes, 57 seconds But there's no uh there's no reason to believe that the profitability of the business is going to change substantially. If anything with the product mix and the market mix and the 25:05 25 minutes, 5 seconds client mix improvement which Ahmed spoke about it should only improve. We are we are inducting a lot of people. 25:11 25 minutes, 11 seconds So but you know that's not a cost which is really kind of you know like CDMO is a whole new team. Yes. 25:17 25 minutes, 17 seconds Because a CDMO business is a very different business in terms of you know it's a solution selling business not a product selling business. So it's a 25:24 25 minutes, 24 seconds different ecosystem altogether. So all those costs are being carried by the business but the revenues are not here yet. Right. 25:33 25 minutes, 33 seconds And CDMO revenues we are expecting it to start from FI28 27. Quarter 27. 25:40 25 minutes, 40 seconds Yeah. quarter 127. So, so then in that case some of these products should already be in a tech transfer state 25:47 25 minutes, 47 seconds required to tech transfer validation multiple stages. So, we have we have outlined uh 25:54 25 minutes, 54 seconds five uh contracts on a no-name basis. So those are the ex you know those are illustrations of the kind of products we are dealing with and as you rightly 26:02 26 minutes, 2 seconds pointed out they are in various stages of development and just a last clarification what does BPI stand for 26:11 26 minutes, 11 seconds action beta lect is an antibiotic right yes yes 26:19 26 minutes, 19 seconds there are for that I'm surprised I can take that off yeah so there are there are general there are DPS which are non on beta 26:26 26 minutes, 26 seconds lactum which is which is part of unit one and then we have okay got it dry injection 26:35 26 minutes, 35 seconds yeah sorry yeah thanks and all the best thank you thank you next question comes from 26:43 26 minutes, 43 seconds Tushar Manodan please go ahead with your question 26:54 26 minutes, 54 seconds Mr. Tusha, I request you to accept the prompt on your screen and ask a question. 27:11 27 minutes, 11 seconds There seems to be no response. 27:14 27 minutes, 14 seconds There's the next question from Bino Patiparumpil. 27:21 27 minutes, 21 seconds Hi. Uh, good evening. Um, can you hear me? Yes, you can. 27:25 27 minutes, 25 seconds Okay. Um, couple of questions. One, um, if looking at the, uh, depreciation and amortization number, uh, compared to 27:33 27 minutes, 33 seconds last year's quarter, it has come down by 78 crores at 70 crores. Uh, from your 27:40 27 minutes, 40 seconds notes to accounts, I see that you have done some reclassification in the Swiss parental assets. Is that the only reason or any other reason? 27:51 27 minutes, 51 seconds So depreciation coming high unpatched. So uh the reclassification is of PPA. 27:56 27 minutes, 56 seconds The impact is only.13 K. So that's the general uh timeline that happens that uh 28:04 28 minutes, 4 seconds we do the uh initial uh PPA based on uh basic numbers and then the final report comes in and we do that impact is only 28:12 28 minutes, 12 seconds 1.13 cr. So the impact as you see in deprecation because of the assets large number of assets were capitalized last year. You see that number is better. 28:23 28 minutes, 23 seconds Uh so do you see there's no change in amotization the change is in depreciation. 28:32 28 minutes, 32 seconds Okay then I understood but uh if I look at your intangible S of FI24 and FI25 FI25 has gone up for FI24. 28:44 28 minutes, 44 seconds So uh why would the depreciation uh sorry amotization number come down in this year 28:52 28 minutes, 52 seconds has not come down depreciation has come down that's what I'm saying okay umization 29:02 29 minutes, 2 seconds has been 56 crores for both the quarters current quarter as well as quarter one of last year okay so you your fixed assets have 29:11 29 minutes, 11 seconds gotten depreciated so this 70 cr is the number we should uh assume is the sustainable number for the near future. 29:20 29 minutes, 20 seconds Yeah. On a bas to at a basic level. Yes. 29:24 29 minutes, 24 seconds But more and more assets coming in and we doing a lot of capital investments this year as when they capitalize the depreciation will go up. 29:33 29 minutes, 33 seconds We know highly here. So we had guided that for FY26 the depreciation and amotization for the full year will be 29:41 29 minutes, 41 seconds about 335. So I would request you to not take a quarterly not go for a quarterly trend but look at this number more as a 29:50 29 minutes, 50 seconds as a uh as an annual figure. Got it. Now that's fine. 335 cr is fine. Perfect. Uh second question on this insurance 29:58 29 minutes, 58 seconds shortage. Uh could you elaborate on the nature of the shortage because you said said that um you lost some sales because 30:06 30 minutes, 6 seconds of shortage but then you also said you have taken some strategic resource. So how can both these happen? Uh you know 30:14 30 minutes, 14 seconds you need some access to take a strategic serve right. So is it a different product or could you elaborate on that please? Yes sir I will. Uh so there are 30:24 30 minutes, 24 seconds two different thing one is the drug substance which is the API and the second is the drug product which is the formulation. So it is the API which we 30:32 30 minutes, 32 seconds have bulked up considering that our own uh facility will start soon. It's the problem which we kind of were talking 30:41 30 minutes, 41 seconds about was more from the formulation point. So we typically call it in our parliament drug drug product. 30:48 30 minutes, 48 seconds So that's the difference. 30:51 30 minutes, 51 seconds Understood. So um so okay so uh but but API there is no 30:59 30 minutes, 59 seconds shortage per se right. So then how does this strategic help? No API API is a API is a challenging thing bots in insul 31:07 31 minutes, 7 seconds instant because our dependency is only in bioon. So we would always like to maintain you know a large reserve as far 31:15 31 minutes, 15 seconds as possible. So the reserve will always be much higher than the other products which are easy to get. This is a mode product. It's it's our mode. So and 31:24 31 minutes, 24 seconds there's only one supplier which we completely depend upon. So we would uh generally also build a larger uh 31:31 31 minutes, 31 seconds inventory. And this time we just kind of exceeded that number also. 31:36 31 minutes, 36 seconds Understood. Um and last on your guidance. So if I remember correctly the your original guidance was a growth in 31:43 31 minutes, 43 seconds the range of 15 to 21%. First quarter is a bit low at 7 or 7 and a half. So would you be revising that or for the time being you will maintain it? 31:54 31 minutes, 54 seconds Yes. So for the time being we will uh we will maintain it. Uh other than the caveat that you know there was a 50 cr number last year. So you know we we will 32:03 32 minutes, 3 seconds talk about let's talk about DBS which is very a large part of the sales and also a larger part of the profits. So within 32:10 32 minutes, 10 seconds the DBS we maintain our guidance and uh that's the guidance which we have given at a consolidated level. The only moving 32:18 32 minutes, 18 seconds part as of now looks like the generic fees which we want to ramp down. So that did almost 50 crores last year. We don't 32:27 32 minutes, 27 seconds expect more than say 7 8 crores in this year. So that is the gap which might uh come in the consult in the console numbers but uh it was never profitable. 32:38 32 minutes, 38 seconds So that's the reason we are ramping it down. So because of that reason might not have any impact. 32:45 32 minutes, 45 seconds Understood. Thank you very much. Thank you. 32:49 32 minutes, 49 seconds Thank you. The next question comes from Madav Marda. I would request you to accept the prompt on your screen. Unmute 32:57 32 minutes, 57 seconds your audio. introduce a firm you represent and ask your question. 33:04 33 minutes, 4 seconds Uh hi, my name is Madav. I'm with Fidelity International. Uh my question was on the uh generic sama opportunity. 33:12 33 minutes, 12 seconds You said that the opportunity could be uh larger than what we earlier thought which is 2 to 3,000 crores. Uh I think that's what we've indicated earlier. 33:20 33 minutes, 20 seconds Could you give some sense in terms of uh how you all are thinking in terms of the market opportunity for the first year and uh if you could break it down in 33:28 33 minutes, 28 seconds terms of you know what could be the price point at which the generics would be launched as well that would be very helpful. Thank you. 33:35 33 minutes, 35 seconds Yeah. So this is something which I have we've already stated in one of our calls. So I was just trying to reiterate 33:41 33 minutes, 41 seconds that. Uh so we we uh but we we we were confident that this will be you know 2,500 to 3,000 kores in the first year 33:49 33 minutes, 49 seconds of LOE and now we more confident about that uh you know looking at looking at how the market is accepting the whole thing 33:58 33 minutes, 58 seconds the price point you know you'll have to wait it out we have a certain price point in mind but that is little strategic nature so not being able to 34:05 34 minutes, 5 seconds tell but it'll be very very significantly lower than what you see the uh you know the innovators product at this point of time. Regarding uh how 34:15 34 minutes, 15 seconds has how do we see that playing out in the market? The acceptance is really going up and you know we feel a lot of 34:23 34 minutes, 23 seconds people are now ready to adopt. So we have been selling LRA glutai for quite some time now and we were seeing it 34:31 34 minutes, 31 seconds slowly kind of was building up but then as soon as these products were launched it just ramped up to a different level 34:39 34 minutes, 39 seconds and the kind of uh you know awareness which is happening today in the marketplace the number of education programs which are going up the amount 34:48 34 minutes, 48 seconds of talk which is there and the kind of confidence I see among the practitioners so that gives me more confidence that 34:55 34 minutes, 55 seconds this this is going to be a large market creation. 34:59 34 minutes, 59 seconds Okay. Got it. Got it. And just a second question was on the uh the domestic the DBF business. Uh could you help us with 35:07 35 minutes, 7 seconds how much was the bioon business? I think you usually used to split that up but uh I'm not sure if I saw it in the presentation. 35:14 35 minutes, 14 seconds Yeah. So Mu, we split it up for one year's time. That's been a standoff. Okay. 35:18 35 minutes, 18 seconds So once the 12 months or four quarters are over, then everything comes together. 35:22 35 minutes, 22 seconds Okay. Sure. No, makes sense. But uh what I just wanted to check is the um I guess this business was facing some issue with the supply side which you said will take 35:30 35 minutes, 30 seconds a bit of time to resolve. So um do you when do we see traction building up for this? Um I don't know if you already answered that but when do you see sort of uh this ramping up again? 35:41 35 minutes, 41 seconds So there are two uh two parts. If you uh if you isolate the whole thing from the opportunity which we are getting from the discontinuation piece is quite nice. 35:50 35 minutes, 50 seconds Okay. 35:51 35 minutes, 51 seconds The growths are very good. Everything is online. We are more or less in line of what we had thought. 35:58 35 minutes, 58 seconds But if you take that opportunity which is a large opportunity that is still to come. So that we think we have mentioned in the slides we think that November 36:06 36 minutes, 6 seconds December is the time when that particular piece kicks in and if we are ready by that time in our own facility 36:13 36 minutes, 13 seconds we will be having enough and more capacities and if there is a gap then we will have a little bit of you know here and there as far as capacities are 36:21 36 minutes, 21 seconds concerned. So that's where we stand as of course. Okay. Yep. Thank you. 36:28 36 minutes, 28 seconds Thank you. 36:32 36 minutes, 32 seconds Thank you. The next question comes from Kunal Kunal Randera. 36:37 36 minutes, 37 seconds I would request you to accept the prompt on your screen, unmute your audio, introduce the firm you represent and ask a question. 36:47 36 minutes, 47 seconds Hi everybody from Axis Capital. Uh Amit, just to a clarification on this human insurance opportunity. So is Noah 36:55 36 minutes, 55 seconds exiting all the human instrumental brands that it has in the country or is it just mixed and even in mixed are the existing you know I mean is an entire 37:03 37 minutes, 3 seconds exit or is just a few forms like a cartridge or a while or a pen if you can just elaborate on that. So the 37:12 37 minutes, 12 seconds information which we got from the press release was that all human film cartridges will be discontinued. 37:19 37 minutes, 19 seconds All human film cartridges will be discontinued. uh they would still play the play on in the wilds category 37:28 37 minutes, 28 seconds right so India was largely a wild market right so cartridge opportunity would be how big would be like an 800 cr brand so 37:36 37 minutes, 36 seconds how big would the cartridge be 500 so I don't I mean what I remember the whole cartridge was more like 500 600 critic 37:44 37 minutes, 44 seconds yeah the entire cartridge piece yeah so the entire cartridge piece which according to us uh will get discontinued is more like 600 to 800 cr. 37:56 37 minutes, 56 seconds Right. Right. Right. So that includes mixtar and other brands that it has in the country like extra paid and all these. Yeah. Absolutely. Absolutely. 38:04 38 minutes, 4 seconds Right. Right. That's helpful. Uh second question just on your CDMO opportunity, right? And you said that you have a visibility of 100 cr plus uh order. So 38:14 38 minutes, 14 seconds you know if you hope to have let's say three of the top five players. I'm wondering you know what's the kind of investments you're looking to make 38:22 38 minutes, 22 seconds because uh I'm sure you would like to make this business a big one in the next five years. So the kind of ax you would be doing uh what's the current gloss 38:31 38 minutes, 31 seconds block and what's the five year kind of a revenue opportunity. 38:35 38 minutes, 35 seconds So kunal look at this point of time we are not very fancied about you know CDMO and you know all those uh kind of things. This is a natural progression 38:44 38 minutes, 44 seconds which we are leading the business to because the plant is EU approved. which was always EU approved and we are getting more approvals. So right now 38:52 38 minutes, 52 seconds what I can tell you that in the next 2 years the capacity is a constraint post the capacity opening up the ramp up 39:00 39 minutes could be very significant but we don't what uh what clarity we had till this point of time we have put it in the 39:08 39 minutes, 8 seconds slides we feel in the next financial year we would create a 100 cr opportunity from the CDM business beyond 39:15 39 minutes, 15 seconds that everything will work out depending upon how fast we are able to put our uh the new facility and how fast we are 39:22 39 minutes, 22 seconds able to ramp it up. Now revenue if you remember we have talked about that there is a good possibility of the 39:30 39 minutes, 30 seconds international businesses going up to a,000 cr in FY2829 that was a number 39:37 39 minutes, 37 seconds right and that would also include our OSP business where uh we've already have the inspection and we are expecting the 39:46 39 minutes, 46 seconds N visa approval to come at any point of time which of course we inform Right. Right. So it's more of a longer 39:54 39 minutes, 54 seconds term post FI28 is something that you know you would be kind of know keen to uh you know uh explore as of now it 40:02 40 minutes, 2 seconds could be largely DBF driven by insulin and then GP ones. Yes. Yes. Yes. 40:08 40 minutes, 8 seconds Perfect. That's that's great. Thank you. 40:13 40 minutes, 13 seconds Thank you. Participants who wish to ask questions may do so by clicking the ryzen icon at the bottom of your screen and wait for your turn to speak. 40:25 40 minutes, 25 seconds The next question comes from Nalisha. 40:30 40 minutes, 30 seconds I would request you to accept the prompt on your screen, unmute your audio, introduce the firm you represent and ask a question. 40:41 40 minutes, 41 seconds Yeah, thanks for the opportunity. Um I just wanted to continue on the CDMO question. Um so we have mentioned about 40:48 40 minutes, 48 seconds 30 cr plus CDMO pipeline which is set up to uh ramp up from FIA 27. Um could you give some more color on this? Um 40:57 40 minutes, 57 seconds basically um wanting to know how much of it is formed up via binding agreements and how much of it is in soft commitments. 41:06 41 minutes, 6 seconds Yeah. Hi. First the number we called out is 100 crores not 30 crores. Yeah I mentioned 100 crores. 41:12 41 minutes, 12 seconds Okay. Sorry, I I must have misheard. And then we uh so this 100 crores is basically what uh we put out based on 41:20 41 minutes, 20 seconds confirmed assignments. And uh we have also given you discussed examples of some of the contracts that are under 41:27 41 minutes, 27 seconds execution. So this is not uh uh a prospective number. This is a number based on confirmed contracts. 41:36 41 minutes, 36 seconds Understood. 41:38 41 minutes, 38 seconds And uh one more question I had uh on the bioon margin. So it has improved from 19% to 30%. 41:45 41 minutes, 45 seconds Uh just wanted to know what's the steady state margin that you can expect for this vertical once cartridge volumes normalize and um how much is the further 41:53 41 minutes, 53 seconds scope that we see for F26 and onwards 27 28. 41:59 41 minutes, 59 seconds It's the I mean little difficult to put a specific answer to that but I'll try to answer it in a different way. So I mean you've seen you've seen how our 42:07 42 minutes, 7 seconds acquisitions have played out and uh what I would say about the error system is that I think it automatically rejects anything which is not high margin or or 42:15 42 minutes, 15 seconds does not have the potential to become high margin. So our DBF aggregate margins are at 37%. So I would say you know that is the kind of aspiration we would have at the very least. 42:26 42 minutes, 26 seconds Correct. Understood. Got it. Thanks. 42:34 42 minutes, 34 seconds Thank you. The next question comes from Pragati Nunawavat. 42:40 42 minutes, 40 seconds I would request you to accept the prompt on your screen. Unmute your audio. 42:44 42 minutes, 44 seconds Introduce the firm you represent and ask a question. Am I audible? 42:55 42 minutes, 55 seconds Yes. 42:56 42 minutes, 56 seconds Uh what are the reasons for the ram down in gender segment? 43:03 43 minutes, 3 seconds We I think uh you know our ability to ramp up that business didn't come through and uh m we didn't have any at 43:12 43 minutes, 12 seconds least we couldn't have kind of you know thought about good margins in this business. So we we kind of did our work and we found even if we scale up to say 43:21 43 minutes, 21 seconds four times where it is today the margins will still be very scratchy and we have so much on the plate at this point of time and lot more is happening actually. 43:31 43 minutes, 31 seconds So we just wanted to preserve ourself to you know get to the core of Buddhist 43:45 43 minutes, 45 seconds question. Can you take the next question please? 43:53 43 minutes, 53 seconds Sure ma'am. The next question comes from Tushar Manodan. 43:58 43 minutes, 58 seconds I would request you to accept the prompt on your screen, unmute your audio, introduce the firm you represent and ask a question. 44:17 44 minutes, 17 seconds Mr. Your voice is not audible. 44:21 44 minutes, 21 seconds Please unmute yourself and ask a question. Huh? 44:31 44 minutes, 31 seconds Then there seems to be no response. Now the next question from Rahul Lagarval. 44:36 44 minutes, 36 seconds I would request you to accept the prompt on your screen. Unmute your audio. 44:40 44 minutes, 40 seconds Introduce the firm you represent and ask your question. Um hi am I audible? 44:50 44 minutes, 50 seconds Yes. 44:51 44 minutes, 51 seconds Thanks for the opportunity. This is Rahul from Everflow Partners. Uh my question is that on the insulin side with the exit of NOO uh what's the 45:00 45 minutes current run rate that you are at and once all of the stocks are out from the market over the next three four quarters what sort of a run rate are you targeting? 45:13 45 minutes, 13 seconds Yeah, Rahul. Hi, we've called out earlier that you know this market opportunity is uh something where you know we can get a upside of 200 plus cr 45:22 45 minutes, 22 seconds peranom on a steady state basis uh once you know all the stocks are exhausted 200 crores on top of what we have today. 45:32 45 minutes, 32 seconds Yes, this is the I'm I'm assuming I'm assuming you're talking about the RHA penill opportunity. Exactly. Yes. 45:39 45 minutes, 39 seconds Yeah. 200 crores peranom incremental to our current base. 45:43 45 minutes, 43 seconds Yes. Because the current market that is being vacated is of the order of 500 crores peranom. 45:49 45 minutes, 49 seconds Got it. Got it. And on regulated markets I think Amit made a comment that you're talking about 1,000 crores by FI29. 45:56 45 minutes, 56 seconds So I'm assuming Swiss today is around 350 400 crores 100 crores from the CDMO in Europe next year. Um and the balance 46:04 46 minutes, 4 seconds 500 550 crores from other semi-regulated markets and as the new capacity comes up and that happens over FI2829 46:12 46 minutes, 12 seconds is that understanding broadly correct or thousand crores is a number all all international put together which is 46:19 46 minutes, 19 seconds regulated and RO uh which will be a combination of all of these things coming together which is the RO based business the CDMO business 46:28 46 minutes, 28 seconds the OSD exports business there is also a B2C piece which we are working on which we are not we can talk about it to you 46:36 46 minutes, 36 seconds in a few quarters. So all of this coming together will get us to that 1,000 cr number. 46:41 46 minutes, 41 seconds And today the base there is only about 350 400 crores. Right. That is right. 46:46 46 minutes, 46 seconds Got it. Uh and on GLP1 your presentation mentions that the line is going to be in line with regulated market standards. Do 46:54 46 minutes, 54 seconds we have plans to potentially go beyond just a branded generic opportunity in GLP1 to export or we'll just stick to the domestic market? 47:05 47 minutes, 5 seconds Yeah. So there there's some things which we are exploring at this point of time. 47:09 47 minutes, 9 seconds So largely you know how would how I would like to put it in a manner that look having a card facility a biocard 47:17 47 minutes, 17 seconds facility at this point of time is quite you know is quite a good thing and our capacities are good at this point of time. So you know there are people who 47:26 47 minutes, 26 seconds are talking about different things including export because both our line and our uh you know our setup we think 47:34 47 minutes, 34 seconds is completely doable for you know regulated market like EU and visa. We don't talk about US at this point of time. So a lot of things are happening 47:42 47 minutes, 42 seconds but we will not be able to put a finger on that but yes we are open and we are talking. 47:48 47 minutes, 48 seconds Got it. No thank you so much. Those were the questions from my side. Thank you so much. Thank you. 47:57 47 minutes, 57 seconds As there are no further questions, I would now like to hand the conference over to Mr. V. Krishna Kumar for the closing comments. Over to you, sir. 48:06 48 minutes, 6 seconds Thank you all for your participation today. In summary, we delivered a DBF revenue growth of 11% in the quarter with an AETA margin of 37% and a 48:15 48 minutes, 15 seconds year-on-year growth of 16%. We continue to create value in the bioon segment which clocked the 30% aeta margin in Q1 48:22 48 minutes, 22 seconds even before we bring the insulin production inhouse. Q1 console revenue stood at 773 crores with an AITA of 277 48:30 48 minutes, 30 seconds crores. Year-on-year console AITA margin has expanded from 35% to 36%. Quarter 1 PA came in at 125 crores which 48:39 48 minutes, 39 seconds represents 41% year-on-year growth. OCF from routine operations came in at 65%. 48:46 48 minutes, 46 seconds We incurred a capex of 66 crores largely towards insulin GLP1 and general injectables in the quarter. Net debt 48:53 48 minutes, 53 seconds stood at 2,300 odd crores and we reaffirm a net debt guidance of 1,800 crores by the end of the year. The international business delivered a Q1 49:01 49 minutes, 1 second revenue of 68 crores and the European CDMO segment is well on track for commercialization in FI27 with significant contribution expected from 49:09 49 minutes, 9 seconds the top five European markets. We are well on track to execute the strategic priorities outlined for the year in the areas of insulence, GLP1, our R&D pipeline and international operations. 49:21 49 minutes, 21 seconds Thank you and a good evening to all. 49:24 49 minutes, 24 seconds Thank you very much sir and thank you members of the management. Ladies and gentlemen, on behalf of Aris Life 49:31 49 minutes, 31 seconds Sciences Limited, that concludes this