IPCA Laboratories Ltd — Q3 FY26

IPCA Laboratories Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=XEW8lATCIco Published: 2 months ago

0:00 Ladies and gentlemen, good day and welcome to IPAka Laboratory's earnings conference call of Q3 NFY hosted by Dan 0:08 8 seconds Capital. As a reminder, all participants line will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation 0:16 16 seconds concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please 0:25 25 seconds note that this conference is being recorded. I now hand the conference over to Mr. Nit Agraal from Dan Capital. 0:31 31 seconds Thank you and over to you. 0:34 34 seconds Thank you. Hi, good afternoon everyone and a very warm welcome to IPALabs Q3 F26 post earnings call hosted by Dan 0:42 42 seconds Capital Advisors Limited. On the call today we have representing IPA Labs management uh Mr. AK J Chan managing director and Mr. Harish Kamas corporate 0:51 51 seconds council and company secretary. I will hand over the call to Mr. J to make your opening comments and then we'll open the floor for questions. Uh please go ahead sir. 1:02 1 minute, 2 seconds Good afternoon. 1:03 1 minute, 3 seconds Thanks Nathan and Dan Capital for organizing this call. Today's hearing call and discussions and answer given may include some forward-looking 1:12 1 minute, 12 seconds statement based on our current business expectations that must be viewed in conjunction with risk that pharmaceutical business faces. 1:21 1 minute, 21 seconds Our actual future financial performance may differ from what is projected and perceived. You may use your own judgment on information given during the call. 1:32 1 minute, 32 seconds Our domestic business for Q3 FI26 has delivered a growth of around 12% for the quarter. 1:41 1 minute, 41 seconds M December 26, our rank continue to remain at 16th as per IQVIR. 1:46 1 minute, 46 seconds On both chronic and acute segment we have out outpaced the IPM on overall let's say IPM has grown by around 8.9% has grown by around 10.6%. 1:59 1 minute, 59 seconds On acute segment the IPM growth was around 6.9% our growth is around 8.4%. 2:06 2 minutes, 6 seconds On chronic segment IPM growth was around 12% and we have grown uh this business by around 15% as per IQVR. 2:16 2 minutes, 16 seconds IPA's market share for the quarter continued to be remaining at around 2.08% mid December 2025. 2:28 2 minutes, 28 seconds Our export formulation business in Q3 has delivered a growth of around 17%. 2:33 2 minutes, 33 seconds And for 9 months period, export formulations has delivered growth around 6% from 1 1,395 2:40 2 minutes, 40 seconds cr to around 1,477 cr. 2:45 2 minutes, 45 seconds API business during the quarter was flat at around 317 cr for 9 months of the current financial year. That business 2:53 2 minutes, 53 seconds has grown by around 14% to around uh 1,51 cr from 924 cr. 3:03 3 minutes, 3 seconds Q through cons consolidated business has delivered growth of around 6.5% to 3:08 3 minutes, 8 seconds around 2245 cr from 2393 cr and for 9 months of the current financial year 3:17 3 minutes, 17 seconds consolidated business has grown by around 8.44% 44% to around 6,993 3:23 3 minutes, 23 seconds cr from uh from 6,993 cr to 7,258 cr. 3:31 3 minutes, 31 seconds Our standalone IITA margin for the quarter has improved to 26.09% 3:38 3 minutes, 38 seconds from Q3 FI26 margin of around 24.25% and a overall improvement of around 1.81%. 3:48 3 minutes, 48 seconds Consolidated EITA margin for Q3 FI26 is at around 22.15%. 3:54 3 minutes, 54 seconds Is again 19.87% in Q325 an improvement of around 2.28%. 4:01 4 minutes, 1 second And for first 9 month of current financial year IITA margins is at around 20.79%. 4:07 4 minutes, 7 seconds For as against 19.18% for first 9 month of last financial year and improvement of almost around 1.61%. 4:17 4 minutes, 17 seconds Having given the broad numbers, now I request participant to ask questions. 4:22 4 minutes, 22 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone 4:29 4 minutes, 29 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are 4:36 4 minutes, 36 seconds requested to use handsets while asking a question. Ladies and gentlemen, they will wait for a moment while the question assembles. The first question is from the line of Anel Jan from Lotus. 4:48 4 minutes, 48 seconds Please go ahead. 4:51 4 minutes, 51 seconds Around UNIM, our current cost of goods sold is 45%. And assuming it to stay the same in upcoming quarters, suppose the 4:59 4 minutes, 59 seconds company aims to reach 18 to 20% AITA margins in say around 18 to 24 months with operating leverage and some further 5:07 5 minutes, 7 seconds cost cutting. Can you provide a road map around the same? 5:14 5 minutes, 14 seconds Unique business in last current financial year has faced some problem because they lost certain businesses in US and gain certain businesses. So 5:24 5 minutes, 24 seconds overall overall unicams the business was uh has grown by I think basic business what 5:31 5 minutes, 31 seconds they were doing other than IKA portfolio has just grown by around 2% in current financial year and the businesses where 5:39 5 minutes, 39 seconds it is lost is mainly which is a high volume businesses where uh the plants was also recovering good amount of 5:46 5 minutes, 46 seconds overhead so that business loss has impacted little of Unicam's overall margins and there Beta margins in this 5:54 5 minutes, 54 seconds quarter is almost around close to around 8% in the current financial year. Their European business is improving now and 6:02 6 minutes, 2 seconds uh now more and more filings are also happening. So in time to come I we hope to do better there and as far as US 6:10 6 minutes, 10 seconds business also uh their uh overall uh business growth is good because of uh 6:17 6 minutes, 17 seconds let's say the the portfolio which they have got from IKA. So overall I think first nine months of the current year US 6:24 6 minutes, 24 seconds business has grown by around almost around 15%. 6:29 6 minutes, 29 seconds 15%. And for the quarter US business has grown by around 17%. Yeah. 6:38 6 minutes, 38 seconds But so for EIA improvement can we have some any road map around the same? Do you have any plans for it for 6:46 6 minutes, 46 seconds improvement in EIA margins? Improvement in ITA margins will come from uh let's say higher utilizations of capacity 6:54 6 minutes, 54 seconds better US business and which we hope to do uh in in time to come and also improvement the business which is currently happening in Europe. Yes. 7:05 7 minutes, 5 seconds Okay sir. And uh regarding the proceeds that the company has of around 275 K 7:12 7 minutes, 12 seconds from the land sale can you provide some color around that? Are there any plans around it? 7:20 7 minutes, 20 seconds Let's say that uh uh uh uh their cash flow was also impacted because of 7:26 7 minutes, 26 seconds payment of European uh union uh uh that fine which was to be paid on past issue of parentopins 7:34 7 minutes, 34 seconds uh some issues. So almost around 181 cr has gone there. So they are healthy cash flow right now. uh they are sitting with almost around more than 250 cr of cash 7:43 7 minutes, 43 seconds in the bank and uh uh uh currently there are hardly any expansion plan except the 7:50 7 minutes, 50 seconds someone solar project which is currently going on to uh use the more green energy and that will have a capital outlook 7:58 7 minutes, 58 seconds almost around 50 cr so other than that they don't have any kind of major uh capital expenditure plan 8:07 8 minutes, 7 seconds okay sir thank Thank you. The next question is from the line of Surya Narayan Patra from Philip Capital. Please go ahead. 8:18 8 minutes, 18 seconds Yeah, thank you for the opportunity sir. 8:21 8 minutes, 21 seconds Uh so my first question is on the uh the promotional brands growth what we have seen. I think this is such a strong 8:28 8 minutes, 28 seconds growth after many quarter that we are witnessing. uh anything that can be attributed to this growth or uh is it to 8:36 8 minutes, 36 seconds some extent led by the rupee depreciation factor? 8:41 8 minutes, 41 seconds I think West Africa has done very good business in this quarter and overall I think for the whole of the year West B which is more of a French speaking 8:50 8 minutes, 50 seconds African market and all that business has grown by almost around 41% for the first nine months and in uh Q3 that has grown 8:59 8 minutes, 59 seconds by almost around 69%. So that's one business. Latin America has grown by 20%, uh, Middle East Africa by around 9:07 9 minutes, 7 seconds 27%, East Asia is almost around 36%. CIS business during the quarter has remained 9:15 9 minutes, 15 seconds by and large flat. So overall business growth is good. Uh, for first 9 month it has grown by almost around 14%. But for 9:24 9 minutes, 24 seconds whole of the year, we don't expect business growth to remain at even 14%. 9:28 9 minutes, 28 seconds It's likely to be around 11% or or so for the first 9 months of the current year. 9:35 9 minutes, 35 seconds Okay. Uh uh sir uh relating to the domestic formulation business. So we 9:42 9 minutes, 42 seconds have been outpacing the industry growth and uh we have been one of the top five or top 10 player in terms of the growth. 9:51 9 minutes, 51 seconds But it looks like that from the uh uh the pharma track it is the growth would 9:58 9 minutes, 58 seconds have to some extent moderated for us also. And uh going ahead uh if we see the GLP as a kind of a key growth driver 10:07 10 minutes, 7 seconds for the industry as a whole but we are not there on the first wave of the commercialization of the GLP. So given 10:14 10 minutes, 14 seconds that uh is it likely we would underperform to the kind of our larger peer in terms of growth in the domestic 10:22 10 minutes, 22 seconds market we are also working for in licensing so yeah we we we can come with the GLP it's 10:30 10 minutes, 30 seconds not that in-house we will not be manufacturing but yes we are looking for those kind of opportunity and overall let's say for us this growth is going to 10:38 10 minutes, 38 seconds remain better because uh the trend whatever we are seeing uh that better. 10:44 10 minutes, 44 seconds Let's say our pain segment uh which is over 50% now is continuously driving the business. In this quarter also pain has 10:52 10 minutes, 52 seconds grown by around 13%. Our cardiovascular business uh because last year we have uh yeah in the beginning of current year we 11:01 11 minutes, 1 second have done the reorganization. So first few month that growth was little lower because of restructuring. Now that business has also started delivering 11:09 11 minutes, 9 seconds good growth and I think for current quarter cardiovascular domestic business has grown by around 16%, anti- diabetes 11:18 11 minutes, 18 seconds business has grown by 14%. So overall that business is also good in spite of antimmalarial declining by almost around 11:25 11 minutes, 25 seconds 21% in this quarter. Other business has done really very well like CNS business has grown by around 19%. Derma business 11:34 11 minutes, 34 seconds has grown by around 22%. Urology has grown by around 17%. 11:39 11 minutes, 39 seconds And other businesses small small businesses which has also grown by 13%. 11:43 11 minutes, 43 seconds So overall let's say business is good and uh we expect to continue to beat the market. Yeah. Okay. Uh in terms of the 11:52 11 minutes, 52 seconds gross margin s uh there is a kind of a uh meaningful uh positive surprise that we have seen in this quarter. any 12:00 12 minutes specific quarter specific factor that is there or it is the rupee depreciation factor or it is the product mix factor 12:08 12 minutes, 8 seconds what would have played this and how sustainable that you think this gross margin that we can see going ahead 12:16 12 minutes, 16 seconds uh let's say overall gross margin is the function of overall topline growth uh when domestic grows when branded 12:24 12 minutes, 24 seconds business grows where we have good margins even in uh generic businesses we have very good margin margins and that business growth was also very good. 12:33 12 minutes, 33 seconds Institutional business in this quarter is decline but other businesses has grown very well and we have very good margins there. So overall uh for 12:42 12 minutes, 42 seconds standalone if you look at material cost to sales ratio has come down to around uh 24%. 12:49 12 minutes, 49 seconds Material prices are by and large stable slightly upward moment but not very significant. It's all the product mix 12:57 12 minutes, 57 seconds change and higher margin businesses growing uh uh higher in this quarter. uh that has also resulted in higher margin 13:06 13 minutes, 6 seconds and for first 9 months of the current year also if you look at we have improved by almost around uh uh standalone I'm talking by around 3.336 13:15 13 minutes, 15 seconds basis point from 28.73% material cost in last year in first 9 months material cost ratio is around 25 13:24 13 minutes, 24 seconds 37% so almost around 36 uh percentage point improvement and In 13:32 13 minutes, 32 seconds this quarter improvement is a little more. It is around 3.64%. 13:37 13 minutes, 37 seconds But overall I think it will remain for whole of the year maybe 3 uh 3 or 3.4% kind of overall improvement in the 13:44 13 minutes, 44 seconds material cost to sales ratio standalone for IPA. Yeah. 13:49 13 minutes, 49 seconds Okay. Just last one point so from my side uh see going ahead uh in terms of our focus what would be the key areas 13:57 13 minutes, 57 seconds like see whether it is the integrated manufacturing or optimizing the US or EM integration 14:05 14 minutes, 5 seconds uh or it is like cap capability buildup in terms of the bioimul injectables hormones so what would be the kind of a 14:13 14 minutes, 13 seconds couple of key focus area which should drive growth for let's say next over next two 14:20 14 minutes, 20 seconds So all these are all focus areas because let's say there are different different teams and this is the focus area for then let's say domestic continue to 14:28 14 minutes, 28 seconds remain focus area uh branded business is also focus area and also your generic businesses because there are different 14:35 14 minutes, 35 seconds teams who looks after that business and uh they are uh and our overall filing is also building up in uh all these market 14:44 14 minutes, 44 seconds R&D output has now increased so that is also uh we'll have uh in future uh that will also have better impact on overall generic 14:53 14 minutes, 53 seconds businesses and also RO filings are moving up. So uh we hope to do on all these businesses good in the time to come. 15:01 15 minutes, 1 second Okay. 15:02 15 minutes, 2 seconds And as far as the your biosimilar business is concerned, we we have now five candidates and now we already 15:09 15 minutes, 9 seconds started process of technology transfer for two products and hopefully uh that manufacturing will start uh shortly. 15:16 15 minutes, 16 seconds Yeah, that is even targeting adult market sir. 15:20 15 minutes, 20 seconds That will target all global market with I think we have already taken opinion on our uh regulatory frame framework from 15:30 15 minutes, 30 seconds UK MH we have taken from European authorities and also from uh US FDA. So all the three agencies we have taken uh 15:38 15 minutes, 38 seconds that opinion on protocols and everything. So everything is going on deadlines. Yeah. 15:44 15 minutes, 44 seconds Sure. Yeah. Thank you sir. I wish you all the best. Thank you. 15:48 15 minutes, 48 seconds Thank you. Anyone who wishes to ask a question may press star and one. The next question is from the line of Sasham 15:56 15 minutes, 56 seconds Krishna Kumar from MK Global. Please go ahead. 16:00 16 minutes Hi. Uh thanks for taking my question. Uh so my first one was on the domestic API business. Um I think in our export API 16:08 16 minutes, 8 seconds broadly realizations have started stabilizing. U but in the domestic API just wanted to get some sense if the Y 16:16 16 minutes, 16 seconds decline is still largely a function of realizations remaining under pressure or have volumes also sort of come down just 16:24 16 minutes, 24 seconds wanted to get some sense on I think overall domestic business we also do a lot of antimaterial business 16:32 16 minutes, 32 seconds that business has little come down that impact is there and also some businesses on sharashopi days there's uh which were 16:41 16 minutes, 41 seconds getting it manufactured from crafts facility and all. So that has declined. 16:46 16 minutes, 46 seconds So other than that uh there is no meaningful uh difference over. 16:53 16 minutes, 53 seconds Got it. Uh so secondly just on the margin expansion that we have seen uh this quarter on a YI basis. So I think 17:00 17 minutes the console margin expansion uh is a bit higher versus what you have seen on a standalone basis. Um uh though unique 17:08 17 minutes, 8 seconds margins I think have come down. So wanted to get some color around what is driving that and is it also sort of linked to the fact that the X of UNIM 17:17 17 minutes, 17 seconds revenue if I look look at it from for other stuff that is a bit lower this quarter. So is that linked to that I 17:23 17 minutes, 23 seconds wanted to get some uh color around basically it's a standalone business that is driving and also the neutrutical 17:33 17 minutes, 33 seconds business which we have in tropic wellness that is also doing very well. 17:39 17 minutes, 39 seconds So yeah both these businesses has done well and that is what is driving the business the margins here 17:48 17 minutes, 48 seconds sir thank you and all the best thank you participants who wish to ask a 17:55 17 minutes, 55 seconds question you may press star and one at this time the next question is from the line of Dhil Sha from Dhmouth Capital 18:03 18 minutes, 3 seconds Management please go ahead hi thank you for taking my questions My questions are more specific on unique in 18:12 18 minutes, 12 seconds the quarter um our revenues have declined by 2% and you have already mentioned that it's largely on account 18:18 18 minutes, 18 seconds of market share loss in the key products but that was already a part of H1 drivers. So is there any incremental 18:27 18 minutes, 27 seconds market share loss in Q that we have seen? 18:31 18 minutes, 31 seconds No actually that decline started from Q2 it will perhaps continue for one or two more quarters. 18:41 18 minutes, 41 seconds Okay, understood. And how do you plan to regain the market share? Is it like a 18:48 18 minutes, 48 seconds yearly thing that you get the business for this? 18:52 18 minutes, 52 seconds Launching four, five more molecules in the US market and we are also taking uh necessary steps to regain the market 19:01 19 minutes, 1 second share where the market is lost for two three major molecules. 19:08 19 minutes, 8 seconds So suddenly because of increase in the competition uh and price reduction they lost some business. 19:14 19 minutes, 14 seconds So we will recover that business. It may take another uh one or two more quarters. 19:21 19 minutes, 21 seconds These contracts usually are for one year or I mean how not necessarily 3 months 6 months it's 19:29 19 minutes, 29 seconds not a hard and fast rule. Everything is for one one uh 12 month contract. 19:35 19 minutes, 35 seconds Understood. And I mean what gives you confidence? I mean is it gaining market share in the same molecules or is it the new product launches 19:44 19 minutes, 44 seconds molecule also we will uh recover our market share whatever you have lost help at a lower price plus new products also 19:51 19 minutes, 51 seconds they are uh continue to uh launch in the marketplace. 19:58 19 minutes, 58 seconds Understood. So should we assume that gross margins and I mean overall a beta margin should be under pressure although we might 20:06 20 minutes, 6 seconds one or two more quarters it will be definitely under pressure from there on it should improve. 20:13 20 minutes, 13 seconds Understood and post that as well I mean if we are I mean bidding at lower prices then gross margin should be under 20:21 20 minutes, 21 seconds pressure right? No but they will be also doing some uh IPA business which is shaping up and growing well. So UNIM is 20:30 20 minutes, 30 seconds our marketing partner in US and we have already launched five molecules in which over a period of say one one 20:37 20 minutes, 37 seconds and a half year we have now have lot of market share and another four five more IPA molecule also get launched in the US 20:44 20 minutes, 44 seconds market. So unique US will also have that benefit going forward. 20:50 20 minutes, 50 seconds Understood. And is it molecules how big the business would be in next one or two years? Just to about 10 molecule 20:58 20 minutes, 58 seconds business in the US 7 8 years back we were doing about 300 crores. Okay. 21:04 21 minutes, 4 seconds So out of that we have currently launched around five molecules which are all backward integrated. Another four to five molecule will get launched in the next uh uh 6 to 12 month period. 21:17 21 minutes, 17 seconds Understood. Got it. 21:20 21 minutes, 20 seconds Got it. And just a broad chance, how do you see Ulicam's growth for next two years? FYI 25, FYI 28. 21:28 21 minutes, 28 seconds Now that FY 26 is almost unique growth and margin will improve once whatever filing they are doing currently in the 21:35 21 minutes, 35 seconds Europe and all will get uh registered and those products will come in the marketplace. They are also doing many 21:42 21 minutes, 42 seconds registration in the RO branded space. So all this will cumulatively help them in growing their business and margin over a period of next two to three years. 21:54 21 minutes, 54 seconds If you were to give the guidance, I mean how how much growth do you expect from business on the top line or 22:03 22 minutes, 3 seconds once this whatever market loss they have in the US gets recovered then over a period of time they should grow their 22:10 22 minutes, 10 seconds top line anywhere between 8 to 10%. And our aim is to reach eBa margin to begin 22:17 22 minutes, 17 seconds with around 15% maybe in 2 3 years time and gradually improve it to about 20% 22:25 22 minutes, 25 seconds when uh all their filing and registrations will come in the European market and that business will grow. 22:34 22 minutes, 34 seconds I'm sure but will have a lot of capacity in their manufacturing plants. Once that starts getting utilized their margins will automatically improve. 22:45 22 minutes, 45 seconds Understood. But the Europe business will take time right because we have just filed 22:52 22 minutes, 52 seconds anywhere between 1 to two years. So filings are happening few are already filed few more are getting filed. So it will take some time. 23:04 23 minutes, 4 seconds Understood. 23:05 23 minutes, 5 seconds Got it. Okay. And 8 to 10% you meant for US business or the overall revenue growth. No no overall I am talking. 23:14 23 minutes, 14 seconds Understood. Yeah. Thank you so much. This is really helpful. Yeah. Yeah. Thank you. 23:21 23 minutes, 21 seconds Thank you. The next question is from the line of Nikl Mur from HDFC Mutual Funds. Please go ahead. 23:29 23 minutes, 29 seconds Yeah. Hi, thank you sir for this opportunity. Um um so two three questions. So first I wanted to ask on the branded formulations in exports. I'm 23:38 23 minutes, 38 seconds talking about IPA X UNIM. Um so you have given some sort of guidance for this year at around 11% growth. Uh you mind 23:46 23 minutes, 46 seconds giving some outlook for FI 27 and 28 as well and and how do we see the business shaping up from a 35 year perspective? 23:56 23 minutes, 56 seconds Let's say our promotional branded business is very stable business except uh when the currencies goes for a toss 24:04 24 minutes, 4 seconds in the market uh it's only around that time uh this uh this business get impacted. So I think overall uh this 24:13 24 minutes, 13 seconds promotional branded market should continue to have around around 10 to 12% kind of growth over a longer period of 24:20 24 minutes, 20 seconds time. As far as generics are concerned, I think we are we will now grow faster in Europe and US also growth will be 24:29 24 minutes, 29 seconds faster. So overall genriic businesses uh we expect around similar kind of around 24:36 24 minutes, 36 seconds 10 to 12% kind of growth. API business will have slightly low little lower growth and domestic business is also around 10 to 24:45 24 minutes, 45 seconds 12% kind of growth. So overall the company the growth is around around 10 24:51 24 minutes, 51 seconds to 11%. That is what is uh uh overall broadly and detailed guidelines we will provide on uh the overall business and 25:00 25 minutes margins once our current year's budget exercise and that is complete by March and thereafter we will view the detailed guidelines. 25:08 25 minutes, 8 seconds Um so promotional brand I understand uh on the generic side sorry I didn't understand. So you are saying only a 10 25:14 25 minutes, 14 seconds 12% growth despite the US from IPA standpoint coming back right of that 300 core business that's that were discontinued six seven years back. So 25:23 25 minutes, 23 seconds any particular reason why the softness on the generic formulation side that uh despite us coming back it's basically uncertainties on the 25:32 25 minutes, 32 seconds institutional business that is what we are keeping in mind okay X of institutional how what will be the outlook if I keep aside a tender 25:41 25 minutes, 41 seconds business maybe one or two% more yeah growth 25:46 25 minutes, 46 seconds okay got it uh okay um so uh if I look 25:52 25 minutes, 52 seconds at a a better margin trajectory now. Um I think a better margin this year uh if I again extrude unique it is kind of 26:00 26 minutes trending better than what you have been guiding in last couple of quarters. Um so any particular reasons why the margins are coming in better especially 26:08 26 minutes, 8 seconds on the on the gross side. Uh and given that uh there's a big improvement now over the last two years on the emitter margin side is there still scope for 26:16 26 minutes, 16 seconds margin improvement in FI27 and FI28? I'm talking about Xun. 26:21 26 minutes, 21 seconds So it's a function of topline growth. If topline growth is around 10 to 11% margin will definitely improve by one and a half% plus 26:31 26 minutes, 31 seconds one and a half% per year or over a 2-year period. Every year. 26:36 26 minutes, 36 seconds Every year. Okay. So, so there is a potential of 300 points uh 300 basis point margin improvement in next two years provided the growth remains at 101%. 26:45 26 minutes, 45 seconds Yeah. Got it. Thank you. So this is helpful. 26:52 26 minutes, 52 seconds Thank you. A reminder to all the participants, if you wish to ask a question, you may press star and one at this time. 27:00 27 minutes To ask a question, please press star and one. Now, anyone who wishes to ask a question, you may press star and one. 27:13 27 minutes, 13 seconds The next question is from the line of Chiag from DSP investment managers. Please go ahead. Yeah. So, thank you for the opportunity. 27:22 27 minutes, 22 seconds Sir, where are we on the US business? 27:24 27 minutes, 24 seconds Uh, if you can talk about the third quarter run rate. Um, I understand that this is assumed in the UNICEM uh uh 27:32 27 minutes, 32 seconds revenue, but you don't give it out. You don't give us the regional script for UNICEM. So, uh for our uh IPA US 27:41 27 minutes, 41 seconds business, what where is that number? uh and if you can talk about 9 month and 3 month uh and what is the outlook there 27:48 27 minutes, 48 seconds over the next couple of years in last quarter Q3 the US business was almost around 395 cr consolidated I'm 27:58 27 minutes, 58 seconds talking and unique put together and uh Q325 that business was around 339 cr so it's there is a growth of around 17%. 28:09 28 minutes, 9 seconds All these growth in the US business is largely because of IKA portfolio. IKA portfolio of its own product and IKA 28:17 28 minutes, 17 seconds portfolio which was there of uh Bashor under for which third party products which were we were trading around that time. So put together that business is 28:26 28 minutes, 26 seconds grown by around 17%. Overall if you look at first nine months of the current year that business is almost around 1,140 28:34 28 minutes, 34 seconds cr and last year that business was around 990 cr so there is a growth of almost around 15% in the US business and 28:43 28 minutes, 43 seconds uh most of this business growth is by and large because of uh either Ika portfolio and portfolio of which meor 28:52 28 minutes, 52 seconds portfolio which has gone to uni. Yes, sir. Can you talk about the IPA manufactured product uh portfolio please? 29:00 29 minutes Uh that 500 I think overall uh uh around 10 to 11 million kind of business they have already done. Yeah. 29:10 29 minutes, 10 seconds In 9 months in 9 months. Yeah. Correct. And what is the exit date sir? 29:15 29 minutes, 15 seconds Um uh in the third quarter business is going to be better. 29:23 29 minutes, 23 seconds Understood. And how are we thinking about this business uh in the next couple of years? Sir, Mr. Kamak has already spoken on this 29:30 29 minutes, 30 seconds matter. Yeah, we have about 35 registrations out of which five we have commercialized. 29:38 29 minutes, 38 seconds Another five to seven molecule will get commercialized over next 12 to 15 months. So gradually every year we will be adding five or six new products in the US market of IFKA portfolio. 29:50 29 minutes, 50 seconds But you don't want to give a uh revenue number. See the thing is uh to get a market share after launch of products it takes very 29:59 29 minutes, 59 seconds long time. See whatever five products I am today marketing it is almost now two years and now we have uh reached uh a 30:07 30 minutes, 7 seconds market share most of the molecules 25% plus because they are all our backward integrated molecules and there is 30:14 30 minutes, 14 seconds further scope to improve market share on these molecules itself the five what we are now marketing so there is a 30:23 30 minutes, 23 seconds opportunity and uh we are working towards that understood and just one feedbacks are 30:29 30 minutes, 29 seconds incrementally uh s if you can also for unique m provide the re uh you know geographic mix of topline that will help 30:37 30 minutes, 37 seconds us evaluate the uh business better uh on a quarterly basis if you can do that that area helps 30:45 30 minutes, 45 seconds see almost uh 23 of their business is from US other than that they have a small RO branded formulation business 30:53 30 minutes, 53 seconds some APA business and uh generic business especially in UK and one or two countries of Europe. That's all. 31:05 31 minutes, 5 seconds Okay sir. Thank you so much. 31:09 31 minutes, 9 seconds Thank you. The next question is from the line of Kunal and from Access Capital. Please go ahead. 31:17 31 minutes, 17 seconds Hi good afternoon sir. uh sir I still don't understand the gross margin excluding unique mim it's already in 31:24 31 minutes, 24 seconds mid70s and I think very few farmer companies report these kind of margins and also given the fact that you know 31:31 31 minutes, 31 seconds API business would be facing you know lower gross margins so just want to understand because I think couple of years back it would have been high 60s 31:40 31 minutes, 40 seconds so what is driving it besides currency and secondly what is the ceiling uh you know to to this uh It is pure product mix nothing else. 31:52 31 minutes, 52 seconds Wherever margins are better those businesses are growing faster. For example in the domestic business our chronic segment is growing faster than 32:01 32 minutes, 1 second the acute segment where margin is less because most of them are antimmalarial business. Similar thing in the international ro market also and generic business also. 32:12 32 minutes, 12 seconds No, I understand the problem. Sorry to push you, but I mean mid70s margin. 32:20 32 minutes, 20 seconds Is it because your voice is muffled? 32:30 32 minutes, 30 seconds Sorry. Hello. 32:35 32 minutes, 35 seconds I I don't Yeah, rejoin the queue, please. 32:41 32 minutes, 41 seconds Thank you. The next question is from the line of Sai Mukharji from Namura. Please go ahead. 32:49 32 minutes, 49 seconds Yeah. Hey sir. Uh good evening. Just one question I had. Have we started uh making filings for the US market uh from 32:57 32 minutes, 57 seconds the IPA side if you can share how many filings have been made and if any opportunity there you see over the next two three years. 33:06 33 minutes, 6 seconds I think current year we already made four filings and I think annual basis also around five to six filings would happen every year. 33:16 33 minutes, 16 seconds Okay. And when do you see these new filings getting commercialized if any timeline in mind? 33:23 33 minutes, 23 seconds It will all depends on approval timeline. uh but uh let's say uh we still have I think u uh we have over 30 33:33 33 minutes, 33 seconds filings and uh we still have around 8 10 approvals still pending past approvals and thereafter the new filing approval. 33:41 33 minutes, 41 seconds So it will all depends on how how the filing m approvals start coming in based on that it's difficult to give right now 33:50 33 minutes, 50 seconds the numbers but yes uh it all will depend on that. 33:56 33 minutes, 56 seconds Okay. There any colors you can give on the uh uh your European business? You know, there was some issue in the past. 34:05 34 minutes, 5 seconds Uh how do you see growth in the unbranded uh generic outside of US color? 34:14 34 minutes, 14 seconds Let's say most of our businesses are happening in smaller geographies in Europe, Australia, New Zealand, Canada. 34:21 34 minutes, 21 seconds And uh that business is uh good uh good business. We have very good margins and all. Uh we have uh some business in 34:30 34 minutes, 30 seconds Euro, UK. Uh that business was fiercely competitive and uh practically in that market uh there was a bloodbath on 34:39 34 minutes, 39 seconds pricing practically. Uh a lot of products were selling at losses in that market. Uh but last one month we have 34:46 34 minutes, 46 seconds started seeing a sharp recovery again in prices and uh the recoveries are as high as 30 40% kind of recoveries are seen. 34:55 34 minutes, 55 seconds uh so it's uh only that kind of uh sometimes probably in the market when the inventories become large people just 35:04 35 minutes, 4 seconds try and uh dispose of the materials short expiry materials and all that which kills the pricing. So I think uh 35:11 35 minutes, 11 seconds last financial year most of our portfolios were facing that kind of problem but now we are seeing that uh much better recovery and we hope to do 35:19 35 minutes, 19 seconds better business there but that's the lowest margin business in uh we have in uh Janjik market uh by and large our uh 35:28 35 minutes, 28 seconds the business which are coming from Scandi countries and other smaller European countries we are not there in currently in Germany we are not there in 35:36 35 minutes, 36 seconds uh France or Italy or those kind of market but uh we are have good presence in Spain and other market and overall margin profile is far better. 35:49 35 minutes, 49 seconds Okay. So just one last question uh if I can ask u you know I mean you have you have talked about uh your margins have 35:57 35 minutes, 57 seconds improved uh we have seen improvement also you mentioned uh like you should see 150 basis point expansion in aida 36:05 36 minutes, 5 seconds margin uh from the steady business that you have in India uh I don't know you uh you don't uh you know spell out the 36:14 36 minutes, 14 seconds margin number for India but if you can talk about uh if you can give that number it would be great otherwise you Qualitative we can talk about how the 36:22 36 minutes, 22 seconds margin in the domestic business has been fairing. Has it improved significantly steady or if you can give some color 36:29 36 minutes, 29 seconds around uh you know how the domestic business margin is fair. 36:35 36 minutes, 35 seconds If you look at overall uh our highest eida margins come from promotional branded business in international market. 36:44 36 minutes, 44 seconds The second level would be there is a domestic business. Third will be generic business which we do other than other than UK. 36:55 36 minutes, 55 seconds Uh then then comes is the institutional business. Then uh last will be UK 37:01 37 minutes, 1 second business and thereafter API business. So margin wise if you look at uh the domestic business branded business would be second for us. Yeah. 37:12 37 minutes, 12 seconds And how is it trending sir? I mean uh if you can give some color there and what is your expectation because that's a pretty steady business right you would 37:21 37 minutes, 21 seconds continue to grow at 10 12% you mention let's say in promotional branded business our material cost is very very 37:28 37 minutes, 28 seconds low uh it's it's maybe 10 12% kind of material cost so any improvement in that 37:34 37 minutes, 34 seconds business uh similarly our since our uh domestic business is also now antimmalarials and all these 37:42 37 minutes, 42 seconds antibacterials are very small part of it and we are more going towards the CNS, urology, cardiology that's the kind of 37:51 37 minutes, 51 seconds business which is growing faster. So margin profile on that is also increasing improving uh significantly. 37:58 37 minutes, 58 seconds So overall the the the the at 10 to 12% growth it's very easy to improve overall margin by around a bit margin by one and 38:06 38 minutes, 6 seconds a half%. The quality of business is uh that way. Mhm. Okay sir. Thank you sir. 38:15 38 minutes, 15 seconds Thank you. The next question is from the line of H Bhartya from Bandhan Mutual fund. Please go ahead. 38:25 38 minutes, 25 seconds Yeah. So thank you uh hope and vulnerable. Yeah. 38:33 38 minutes, 33 seconds Uh so in terms of the uh comments for the European market uh on the pricing 38:39 38 minutes, 39 seconds part and the recovery uh most of the pricing deterioration uh 38:47 38 minutes, 47 seconds there could be multiple reasons but most of it was led because of paraphrated uh issues and dumping or was there anything particularly uh uh oneoff to the angle? 39:00 39 minutes uh if you could spell out some reasons as to why there was significant price deterioration in the European market and 39:08 39 minutes, 8 seconds is it more sustainable in terms of the recovery that we have seen in the last one month? 39:15 39 minutes, 15 seconds My comment was only for this UK business not on European business. European business is very steady and absolutely no problem. 39:25 39 minutes, 25 seconds My comment was only on the UK business. 39:32 39 minutes, 32 seconds So uh in terms of the uh in terms of the clarifications for uh one of the 39:39 39 minutes, 39 seconds comments you made this is for the US business uh when the guidance of the unique m uh growth u I think 8 to 10% or 39:49 39 minutes, 49 seconds 9 to 10% uh for the next 2 three years uh this is uh pure unique u uh growth Right? Are we 39:59 39 minutes, 59 seconds building in or are we assuming if cara US sales driving uh the US growth for 40:06 40 minutes, 6 seconds the unique business is that the case or we are just assuming pure uni US division to grow by itself? 40:15 40 minutes, 15 seconds We've already said uh current uh financial year first 9 month unique US business their own portfolio is lower 40:23 40 minutes, 23 seconds because of loss of market share in one or two molecules which they hope to gain regain maybe in another two to three 40:32 40 minutes, 32 seconds quarters time. So on a standalone basis once they regrow regain that particular market share lost they should also grow 40:40 40 minutes, 40 seconds in their portfolio by 7 to 8% uh annually going forward with launch of uh four to five new molecules uh next two to three years. 40:54 40 minutes, 54 seconds Okay sir, thank you. 40:56 40 minutes, 56 seconds And over and above that whatever growth will come in the IPSA US business also will be there growth in the US market. 41:11 41 minutes, 11 seconds Thank you. A reminder to all the participants if you wish to ask a question you may press star and one now. 41:18 41 minutes, 18 seconds To ask a question please press star and one now. Anyone who wishes to ask a question, you may press star and one at 41:25 41 minutes, 25 seconds this moment. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments. 41:34 41 minutes, 34 seconds No madam, we can uh close the we have answered all the questions. There is nothing more to add. 41:40 41 minutes, 40 seconds Okay. Thank you. On behalf of Laboratories and DAM Capital, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.