Torrent Pharmaceuticals Ltd — Q3 FY26

Torrent Pharmaceuticals Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=rk7MO4dvSUU Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Q3 FY26 earnings conference call of Torrent Farmer. As a 0:08 8 seconds reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:18 18 seconds Should you need assistance during this conference, please signal an operator by pressing star and then zero on your touchstone phone. Please note that this conference is being recorded. 0:29 29 seconds I now hand the conference over to Mr. 0:31 31 seconds Sudir Menan, executive director of finance and CFO. Thank you and over to you sir. 0:39 39 seconds Thank you. Uh good evening everyone and welcome to the third quarter earnings call uh for quarter 3 FI26. 0:47 47 seconds Uh this quarter we continue to see healthy performance in our branded markets which accounted for roughly 75% of the overall revenues this quarter. 0:57 57 seconds Our two largest branded markets, India and Brazil, each continue to deliver healthy double-digit growth. India business grew at 14% and Brazil grew at 27%. 1:08 1 minute, 8 seconds Constant currency growth in Brazil for the quarter was 10% while the secondary sales grew at 13%. 1:16 1 minute, 16 seconds On the generic side, US business grew at 19% and Germany grew at 8%. In constant currency terms, Germany revenues have 1:24 1 minute, 24 seconds declined by 6% mainly due to the continued disruption at the third party supplier. 1:30 1 minute, 30 seconds Uh quickly on the financial performance for quarter 3, revenues were 3,33 crores up by 18%. 1:38 1 minute, 38 seconds Operating AIDA at 1088 crores grew by 19%. 1:44 1 minute, 44 seconds And operating aida margin stands at 32.9%. 1:49 1 minute, 49 seconds A very quick update on uh JB Pharma acquisition. 1:53 1 minute, 53 seconds So we have acquired the controlling stake of 46.39% in JB on 21st of January followed by 2:01 2 minutes, 1 second another 2.41% stake purchased from certain employees. 2:06 2 minutes, 6 seconds So effectively from 21st January JB will start getting consolidated into torrent farmer. 2:14 2 minutes, 14 seconds As a next step, uh we expect the SB approval for the merger scheme soon and we will file the merger application with 2:23 2 minutes, 23 seconds NCT over the next few days. Overall, we remain on track to complete the transaction as per previously indicated timelines. 2:32 2 minutes, 32 seconds I'll now hand over the call to Ammon for India business. Thanks Sudir. 2:38 2 minutes, 38 seconds India revenue at 1798 crores registered a growth of 14%. 2:43 2 minutes, 43 seconds As per the AIO city farmer track market data the IPM growth for the quarter was 10%. 2:50 2 minutes, 50 seconds We are seeing continued volume outperformance over the IPM in chronic and subchronic therapies led by cardiac gastro and diabetes segments. 3:01 3 minutes, 1 second The curatio business grew at 27% in Q3 and also 27% in YTD 9 months for the 3:08 3 minutes, 8 seconds year driven by strong demand generation on account of OTC ad spends and field force expansion. 3:16 3 minutes, 16 seconds We are hopeful that the high growth now should continue for the rest of the financial year as well. Our field force strength at the end of the quarter 3:23 3 minutes, 23 seconds stands at 6,900 versus 6,800 last quarter and we remain on track to close the financial year with a strength of just over 7,000. 3:34 3 minutes, 34 seconds Going forward, we expect our India business to continue outperforming the market growth. Our focus during the rest of the year will be to continue improving our market share in focus 3:43 3 minutes, 43 seconds therapies, improving field force productivity in the expansive business and scaling up of of the curio business. 3:51 3 minutes, 51 seconds An update on JB. Uh following the acquisition of controlling interest of 48.8% in the company, our priority now 3:59 3 minutes, 59 seconds is to ensure continuity in business operations and ensure there is a smooth transition under the new leadership team. 4:07 4 minutes, 7 seconds I will now hand over to Mr. Sanjay Gupta for the international business of torrent. Thanks. We'll start with the branded generics market of Brazil. Based 4:16 4 minutes, 16 seconds on internal sales, Q3 constant currency revenue was Brazilian rare 224 million registering a 10% year-on-year growth. 4:23 4 minutes, 23 seconds IQVR data shows Q3 market growth at 7% with Torrent growing at 13%. We are seeing healthy volume growth coupled with mids singledigit pricing increase. 4:34 4 minutes, 34 seconds Torrent has a rich pipeline of 60 molecules which are currently awaiting approval at NVA. 4:40 4 minutes, 40 seconds On in Germany, a German business business registered a constant consistency revenue of 29 million euros down by 6%. As highlighted last quarter, 4:48 4 minutes, 48 seconds growth continues to be impacted due to disruption at the third party supplier. 4:52 4 minutes, 52 seconds In the US, we registered constant currency revenues of $36 million up by 12%. Growth is coming from our new 5:00 5 minutes launches where we have achieved our target market share and we are also seeing increased purchase volume on existing contracts. I would like to 5:07 5 minutes, 7 seconds conclude the opening comments here and open the call up for questions. 5:13 5 minutes, 13 seconds Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. 5:22 5 minutes, 22 seconds If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. 5:32 5 minutes, 32 seconds Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our 5:42 5 minutes, 42 seconds first question comes from the line of Damayant Karay from HSBC. Please go ahead. 5:48 5 minutes, 48 seconds Hi. Uh thank you very much for the opportunity. Uh my first question is on JB uh acquisition. So uh you mentioned 5:56 5 minutes, 56 seconds uh now you have 48.8% uh stake and it will be consolidated as part of your financials. So will it be a 6:04 6 minutes, 4 seconds line by line consolidation or how you uh account for it before like the complete merger happens? 6:11 6 minutes, 11 seconds So consolidation damati is line by line only. So effective from 21st of January till 31st of March the quarter four numbers will include JB numbers. 6:22 6 minutes, 22 seconds Okay. Okay. 6:25 6 minutes, 25 seconds uh and on India uh segment the 14% growth uh can split across volume price and new launches the way you generally do. 6:35 6 minutes, 35 seconds Yeah. Uh so as per the AIO city farmer track data uh our reflected growth is 14% which is the same as the reported 6:44 6 minutes, 44 seconds growth. The breakup of 14% is 5.5% volume versus 1.2% of the market. 5.8% 6:52 6 minutes, 52 seconds 8% price versus 5.6% of the market and 2.7% new products versus 2.8% of the market. 7:02 7 minutes, 2 seconds Okay. Uh thanks. My last question is in Germany. So u uh we uh like we are yet to see a resolution of this supply disruption. So uh what is the timeline? 7:13 7 minutes, 13 seconds When do you think uh things can come back on track here? 7:17 7 minutes, 17 seconds U so unfortunately Nandi I cannot give a timeline because our supplier is caught up in regulatory issues and I don't have 7:25 7 minutes, 25 seconds visibility as to when he will start manufacturing again and these days it's very complicated in Europe because they also consider the observations of the US 7:33 7 minutes, 33 seconds FDA etc. So it's it's it's a little different you know this currently than what I have seen in the past. There is a lot of interaction between the CMA and 7:41 7 minutes, 41 seconds the FDA. So things are taking longer to resolve. So so honestly cannot give you guidance. 7:48 7 minutes, 48 seconds Okay. And is is there a possibility to move to alternative supplier or even that will be very time consuming? 7:55 7 minutes, 55 seconds Well it is timeconuming but we are working on it. So we have started work on it already last quarter. So, but it's it'll take at least three to four quarters to to get an ultimate supplier 8:04 8 minutes, 4 seconds on board. So, we're trying to move some of the forests to our own facility, but it's it's time. 8:11 8 minutes, 11 seconds Okay. Thank you. I'll get back in the queue. 8:15 8 minutes, 15 seconds Thank you. Participants, you may press star and one to ask a question. 8:20 8 minutes, 20 seconds Our next question comes from the line of Goautam Rajes from Leo Capital. Please go ahead. 8:26 8 minutes, 26 seconds Hi, good evening. Thank you for taking my question. My question was for the GLP1. Uh do you have any Philip Finnish 8:33 8 minutes, 33 seconds capacity for it and uh is that for Indian market or the emerging market? 8:40 8 minutes, 40 seconds No, we do not. We only have uh capacity for the oral. Everything else will be partnered for India and other markets. 8:48 8 minutes, 48 seconds Uh all right. And uh who would be our partner? Is that possible to reveal? Uh we can share that once we launch. 8:57 8 minutes, 57 seconds Understood. And uh which geographies will you be launching in? And uh only in 9:04 9 minutes, 4 seconds India would it be partnership or everywhere else? I I uh for the injectable partnership is 9:11 9 minutes, 11 seconds across all territories. The first launch is most likely going to be India followed by other markets. Uh so we can 9:20 9 minutes, 20 seconds share an update once uh the launch is done next quarter. 9:24 9 minutes, 24 seconds Understood. and other markets you don't want to reveal right now or is that possible? 9:29 9 minutes, 29 seconds No, we had already shared uh about Brazil last time as well. Nothing changes in terms of timelines. It's a bit behind uh what we would have liked. 9:38 9 minutes, 38 seconds Uh so probably sometime in the next financial year. Uh so even though we would be late uh to the game, the market 9:46 9 minutes, 46 seconds opportunity is much larger than the Indian market. Uh so it should still be an interesting opportunity. 9:52 9 minutes, 52 seconds Understood. Thank you. Thank you. 9:58 9 minutes, 58 seconds Our next question comes from the line of Nha M from Bank of America. Please go ahead. 10:04 10 minutes, 4 seconds Yeah, thanks for taking my question. Uh Sud, uh now that we have you know we've acquired the sting GB um I know that the merger still depends on approval etc. 10:14 10 minutes, 14 seconds But how should we think about you know uh other than the continuity of operation and condition that you've mentioned the synergies that we should 10:21 10 minutes, 21 seconds see would that essentially all come through once the merger is done I mean if you could just tell us you know what we can expect in the next let's say 6 10:29 10 minutes, 29 seconds months or 12 months and probably longer term how should we look at the synergies from the 10:36 10 minutes, 36 seconds so I think in terms of timelines until the effective merger order both 10:43 10 minutes, 43 seconds the entities will remain uh separate and it's only and in case in terms of timelines we think once we file to NCT 10:53 10 minutes, 53 seconds then probably 6 to 9 months as indicated earlier should be the timeline we should be looking at uh in terms of integrating both the entities. Okay. 11:05 11 minutes, 5 seconds uh I think in terms of synergy uh some part of the synergy will start flowing 11:13 11 minutes, 13 seconds uh from now on uh and maybe a major part of that will come post the integration happening 11:22 11 minutes, 22 seconds and what what part of the synergy I mean I if you don't want to quantify it I mean what areas of synergy do you think you can get now before the merger and I 11:30 11 minutes, 30 seconds understand what can come after the merger but what do you think you know we can bring to the table now before the merger happens. No, I think we we're happy to quantify at 11:39 11 minutes, 39 seconds this stage. I think we've uh we're waiting to understand uh the business a bit more over the last couple of quarters. So, broadly, I would say that 11:47 11 minutes, 47 seconds our synergy number is looking like 400 450 crores over the next 2 to 3 years. 11:53 11 minutes, 53 seconds Uh you know, maybe 20% of that could be in the first year, up to 80% of that could be in the second year and the rest in the in the third year. So, that's what it currently looks like. 12:05 12 minutes, 5 seconds So you said 400 to 450 crores in the next two to three years. That's correct. 12:10 12 minutes, 10 seconds And the first year is the you know starting now right? It's not first year after the merger. 12:16 12 minutes, 16 seconds Uh no first year would mean now. Uh obviously some of the the the effect would come on subsequently in the coming 12:24 12 minutes, 24 seconds quarters but the we will start seeing some benefit in the in the subsequent quarters already. 12:31 12 minutes, 31 seconds And again this 20% that you're talking about synergies these would be you know largely cost synergies that we would see uh you know initially because I'm 12:39 12 minutes, 39 seconds assuming revenue synergies would require a merger probably or would it be mix this this number is only cost we have 12:46 12 minutes, 46 seconds not looked at revenue synergies yet we'll wait for first year business topline to stabilize and then we can look at revenue synergies 12:55 12 minutes, 55 seconds understood so thank you so much very helpful thank Thank you. Participants who wish to ask questions may press star and one. 13:06 13 minutes, 6 seconds Our next question comes from the line of Adita Vikram from DB Securities Private Limited. Please go ahead. 13:16 13 minutes, 16 seconds Hi, am I audible? You are audible sir. You may proceed. 13:20 13 minutes, 20 seconds Yeah, thank you. So quick question. Once the JB merger happens right, what would be the margin guidance if at all? uh 13:28 13 minutes, 28 seconds considering you are going to have cost savings JB currently have an AIA margin of 18 to 19%. you are sitting at 32. 13:38 13 minutes, 38 seconds Even if we consider the synergies, is this going to be margin accretive for our businesses? I understand that you 13:46 13 minutes, 46 seconds haven't done on the revenue side so far, but you must have some ballpark number in your head. 13:54 13 minutes, 54 seconds Oh, so I think the firstly JB's margin is closer to 28 29% margin. uh I think our margin this year has been in the range of 32 1/2 to 33. 14:07 14 minutes, 7 seconds So there is definitely a scope to bring JB's margin closer to our base business margin in the next financial year. Uh 14:16 14 minutes, 16 seconds we've already given the number on the synergy cost synergy target for the next 3 years. So I guess you can work out the margin potential there. uh I think it'll 14:25 14 minutes, 25 seconds be a bit too complicated to look at the combined margin at this stage but standalone JB certainly there is uh significant scope for margin improvement. 14:38 14 minutes, 38 seconds Okay. Uh thanks for that. And and in terms of uh US uh how are you seeing the 14:46 14 minutes, 46 seconds growth there? Is it stabilizing with this tariff news out of the way? 14:52 14 minutes, 52 seconds Uh sorry to interrupt Aditya but your line is not clear. May I request you to please ask your question again? Sure. Is it better now? 15:00 15 minutes Uh this is slightly better. 15:02 15 minutes, 2 seconds Yeah. Okay. So uh how is US looking for you? I know there was no tariff on pharma in any case, right? But after 15:11 15 minutes, 11 seconds this tariff news out of the way, are you seeing the potential to grow above 20% on the US side in the subsequent quarters? 15:22 15 minutes, 22 seconds So US so we are very small player. We do 35 36 million a quarter and uh it really depended upon new launches but also upon 15:30 15 minutes, 30 seconds the level of competition that we see in the new launches. So we have a healthy pipeline and we are augmenting the pipeline for the US. But it's hard to 15:38 15 minutes, 38 seconds give guidance today. Depends really as on when the new launch will happen and the competitive landscape at that point in time. 15:47 15 minutes, 47 seconds Okay. And I just want to clarify something one more time. In your opening remarks uh you guys said that you will 15:55 15 minutes, 55 seconds continue with the doubledigit volume growth uh for India business in subsequent quarters as well. Is that correct? 16:04 16 minutes, 4 seconds Uh what we had said was we'll continue the above market volume growth doubledigit growth overall increase price in new products and our volume 16:12 16 minutes, 12 seconds growth is about 5 and a half% for the quarter. 16:15 16 minutes, 15 seconds Okay, understood. Thank you very much for clarifying. 16:22 16 minutes, 22 seconds Thank you participants. You may press star and one to ask a question. Our next question comes from the line of Kunal 16:31 16 minutes, 31 seconds Dandera from Access Capital. Please go ahead. 16:34 16 minutes, 34 seconds Good evening sir. Uh sir in the previous call you mentioned that the Brazil GLP1 market is around a billion dollars. So 16:43 16 minutes, 43 seconds uh in the first wave of launches in March uh what would be the competitive scenario that you see and typically 16:51 16 minutes, 51 seconds what's the kind of price duration that you would expect uh you know uh based on your understanding of the market 17:00 17 minutes so we don't think we'll be the first one to launch right so I I don't know it'll be somewhere uh in the range of between 17:08 17 minutes, 8 seconds three to third to fifth five launch and uh we filed of Zent which is today a $270 million market and the rest is as 17:17 17 minutes, 17 seconds you as you know has been taken over by Vgoi. Uh so Vgoi will will come to us 17:23 17 minutes, 23 seconds but uh it's a little bit down the line and um uh I I can't really give guidance on Brazilian pricing in ocean because it 17:31 17 minutes, 31 seconds depends really on how many players come to the market and who are the players who come to the market. Some of the players are known for very aggressive 17:39 17 minutes, 39 seconds pricing and some others are much more reasonable but to be safe you can take like at least 50 50% price 45% price 17:48 17 minutes, 48 seconds erosion on on the Brazilian on the Brazilian market but honestly it's hard because it's it's been all 17:55 17 minutes, 55 seconds over the map. So I've seen price erosion of 90% on a couple of products and I've seen price erosion of 20% also. It 18:03 18 minutes, 3 seconds honestly depends upon this side the same thing how many players and what's the nature of the the players. 18:09 18 minutes, 9 seconds Sure. So uh in March it's only the generics which are hitting the market or are some players also launching vigor generics? 18:17 18 minutes, 17 seconds So generally the vigori generics and vis are behind. So the was the first one that was launched in vigori came much later by the innovator. So hence the 18:25 18 minutes, 25 seconds vigori generics are all running behind a big one. 18:32 18 minutes, 32 seconds Right. But do you think there could be some substitutioning substitution happening because would become cheaper? 18:39 18 minutes, 39 seconds Uh you know versus it's hard because the laws are very strict and I think the Brazilian law requires the pharmacist to to keep a 18:46 18 minutes, 46 seconds copy of the prescription and to make sure the right product is dispensed against the right uh right prescription. 18:52 18 minutes, 52 seconds So the government has been very strict with this hemagnetide usage. Um and it's hard for a pharmacist to substitute. So I expect the substitution to be minimal. 19:03 19 minutes, 3 seconds Got it sir. And so my my assumption I mean if I understand correctly you'll be launching this year and then we go sometime next year. 19:12 19 minutes, 12 seconds I I can't give you the exact timing because it's in the hands of the regulator. Our products have been with the regulator for you know a substantial number of months. So uh and they are 19:22 19 minutes, 22 seconds giving some kind of priority review for such an important product. So they've kind of improved our ranking in approval. So the queue look for 19:30 19 minutes, 30 seconds semigodide you you get a opportunity to move up the queue. So they've moved us up also in terms of prioritization of approval as 19:39 19 minutes, 39 seconds compared to other molecules. So but I I cannot give guidance as to when we'll get approved and launched. But we we 19:46 19 minutes, 46 seconds have the pieces in place. So once we get approved, we'll be ready to launch. Got it. Sir and just one more if I can. 19:54 19 minutes, 54 seconds I think uh for in the India business you have said the sales force would go up to 7,000 by the end of FI26. 20:01 20 minutes, 1 second So would you be on track for that or there would be any changes to that? 20:05 20 minutes, 5 seconds Yeah, that's correct. It'll be just over 7,000. So maybe close to 7,100 and uh as of now we see maybe some 20:14 20 minutes, 14 seconds additional visibility in the next coming year as well financial year uh could be around 7,500 uh maybe by end of FY27. 20:25 20 minutes, 25 seconds Of course that's very helpful. Thank you and all the best. Thank you. 20:31 20 minutes, 31 seconds Our next question comes from the line of Vive Aarwal from Cityroup. Please go ahead. 20:37 20 minutes, 37 seconds Yeah, thanks. So, thanks for the question. Question in Germany. You have highlighted that there is there is some kind of disruption from one of your 20:45 20 minutes, 45 seconds supplier etc. Right. So, just want to understand whether the disruption is fully there in the numbers or is it like it is partly reflected or for example you can see the sales or not. Thank you. 20:57 20 minutes, 57 seconds No, it's fully there. Okay. One question I have on your side. 21:04 21 minutes, 4 seconds So for quite some time actually if you look at uh this your sales numbers are largely hovering around somewhere around $335 million a month. So now if you look 21:12 21 minutes, 12 seconds at both of your facilities major facilities are clear. So when I think you are expecting a kind of a meaningful 21:19 21 minutes, 19 seconds jump in your sales or any any possibility that it can go up to 45 50 it'll it can only go up from here. 21:29 21 minutes, 29 seconds That's my hope actually because it's already kind of low. So I I would guide towards a higher sales number from where we are and I would guide towards at 21:37 21 minutes, 37 seconds least five to seven launches a year. Now uh depending upon the timing um you know a US launch if it's 10 days late is too 21:45 21 minutes, 45 seconds late. So it has to come on time and sometimes it helps that your competitors are not on time. So I I but we are looking at a one directional sales 21:54 21 minutes, 54 seconds growth uh in the US from here on. So but how fast we are not happy with this 22:00 22 minutes current level of 150 160 million. So the first thresh I'm looking to cross is 200 millions per year and uh hopefully next 22:08 22 minutes, 8 seconds year we'll do that. I mean I'm being optimistic uh and taking a punt on the launches that we will have. 22:15 22 minutes, 15 seconds So you are suggesting that 270 million are kind of US numbering us. I I'm targeting based on what I see in our 22:24 22 minutes, 24 seconds launch plans but uh again it's not in my not in Doran's hands 22:31 22 minutes, 31 seconds and one question uh if I can ask from JB right so uh Vive sorry to interrupt sorry to interrupt Vive you do sound a little 22:39 22 minutes, 39 seconds muffled may I request you to please check the device mode that you're using okay okay sorry uh on GB acquisition 22:48 22 minutes, 48 seconds right so uh as Is there any possibility that the growth of this company right that can 22:56 22 minutes, 56 seconds slow down maybe during integration etc there kind of disruption uh because of the the transaction or do you think that 23:04 23 minutes, 4 seconds this company can keep growing the way it is growing uh over the last few years during the transition 23:12 23 minutes, 12 seconds there's u so our view strongly is that the fundamentals of the business are fairly robust so the medium short-term 23:21 23 minutes, 21 seconds long-term prospects are looking uh pretty much as what we expected pre-acquisition and now. What we do 23:28 23 minutes, 28 seconds expect is a bit of a course correction in this current Q4 because in any change of control situation there are changes 23:36 23 minutes, 36 seconds of business practices and uh I mean you have to kind of integrate processes and so on. So Q4 could be a little bit muted 23:45 23 minutes, 45 seconds uh in both India and international but Q1 onwards they should be pretty much absolutely back on track. 23:53 23 minutes, 53 seconds Uh thank you. Just one more question if I can squeeze in. Uh this is uh on Brazil. Uh it looks like that uh and you 24:02 24 minutes, 2 seconds have highlighted the product uh launch seems to have been delayed and post to next year. So data itself is 24:10 24 minutes, 10 seconds taking time to approve the filings out there. Uh any color actually uh that would be helpful if you can uh help us 24:18 24 minutes, 18 seconds understand that how the regulator is taking the filings or there is a possibility that even the market formation can get delayed by the detail. 24:30 24 minutes, 30 seconds So I can tell you two things one is the file is solid and the second thing is the regulators prioritizing this product. That's all I I don't know I 24:38 24 minutes, 38 seconds can't give you exact month and date but I know that the regulator is prioritizing generics and I know that the file that we have sent is complete 24:46 24 minutes, 46 seconds uh in all ways that we can think of. So other than that really not much to say. 24:53 24 minutes, 53 seconds Uh thank you sir that's my thank you. Our next question is from the line of Bansi Desai from JP Morgan. 25:04 25 minutes, 4 seconds Please go ahead. Yeah. Hi, thanks for taking my question. 25:07 25 minutes, 7 seconds So my first question is u you know until the JB merger concludes uh how should we think about u you know uh uh you know 25:16 25 minutes, 16 seconds the so how how will the marketing of JB brands work? So does torrent MRS get to market JB brands or that that will 25:24 25 minutes, 24 seconds remain separate till the time we merge the entities? 25:28 25 minutes, 28 seconds No, it will be separate. All the divisions of JB will remain within JB till merger. uh only post merger can any such change be possible. 25:37 25 minutes, 37 seconds So then in that event if there is you know MR attrition on the JB side then how do we ensure that you know we do not 25:45 25 minutes, 45 seconds see disruption u you know in sales the attrition in the last 6 months where 25:52 25 minutes, 52 seconds the period between the announcement of the deal and till now the attrition has been pretty much the same as the 25:58 25 minutes, 58 seconds historical attrition. it hasn't gone up and we don't uh see any reason why it can go up especially after the closure 26:06 26 minutes, 6 seconds of transaction. In fact, we'll probably do our best to reduce attrition as much as possible. So, we don't really see that to be an issue post uh uh I mean post our change of control. 26:17 26 minutes, 17 seconds Okay. And um uh also on the purchase price um you know could we get understanding of break up into goodwill 26:24 26 minutes, 24 seconds and intangible and uh you know how many years should we think about um you know amortizing you know this. 26:32 26 minutes, 32 seconds So the amotization policy for torrent has been 15 years. You'll just have to wait for one quarter because that whole 26:41 26 minutes, 41 seconds uh purchase price allocation uh work is going on and maybe by end of 26:49 26 minutes, 49 seconds February we should have the numbers in place. 26:52 26 minutes, 52 seconds Uh so so I think uh once that is done I should be able to guide you. Uh all right and and also lastly um how should 27:01 27 minutes, 1 second we think about um debt repayment in in how many years you know do we get back to you know our net cash position. 27:10 27 minutes, 10 seconds Yeah I think this is something which I had uh uh guided earlier. 27:16 27 minutes, 16 seconds So I think the way I'm looking at is uh uh if I correctly remember the numbers uh FI27 27:25 27 minutes, 25 seconds will be the first year of integrated uh torrent 27:30 27 minutes, 30 seconds uh FI28 my net to EIDA should be around 1.1x 27:40 27 minutes, 40 seconds and FI 29 it should be around 6 and what I member uh plus minus here and there. I think this is the broad guidance I can give. 27:51 27 minutes, 51 seconds Okay. And um what should we assume as um you know uh cost of interest here? 27:58 27 minutes, 58 seconds So average cost of interest is roughly 7.6%. All right. Thank you. 28:07 28 minutes, 7 seconds Thank you. Our next question comes from the line of Abdul Kadar Puranwala from ICICI securities. Please go ahead. 28:17 28 minutes, 17 seconds Yeah. Hi sir, thank you for the opportunity. So my first uh question is pertaining to the GBK acquisition. So 28:24 28 minutes, 24 seconds while you know the complete control or you know the merger of the two entities may take another 6 to 8 months. uh in 28:32 28 minutes, 32 seconds the near term uh you know how are we dealing at the senior level attrition especially where you know the CEO and 28:40 28 minutes, 40 seconds CFO of JB has resigned so I mean are we going to have two different managements in place or it would be the torrent team 28:48 28 minutes, 48 seconds completely taking over in certain critical roles like CFO there will be a a separate CFO for JB 28:56 28 minutes, 56 seconds similarly wherever any such uh critical role is required there will be a separate team running uh at the senior 29:04 29 minutes, 4 seconds level and eventually it should all merge into torrent industrial and second one I had is a 29:11 29 minutes, 11 seconds bookkeeping question so while in you know most of the geographies it seems like uh you know you have a currency 29:17 29 minutes, 17 seconds benefit while your other income it's still negative for the quarter so you know what explains that negative other 29:25 29 minutes, 25 seconds income for the quarter uh so there's a hedging loss which we have booked in other income. It's close to 45 crores. 29:35 29 minutes, 35 seconds Understood. Thank you. Thank you. 29:39 29 minutes, 39 seconds Thank you. The next question is from the line of Gorav D from Ambit. Please go ahead. 29:49 29 minutes, 49 seconds Yeah. Hi. Uh thank you and good evening. 29:52 29 minutes, 52 seconds Uh just a clarification on the synergy number. uh you know 400 to 450 K in next 29:59 29 minutes, 59 seconds 2 to 3 years is that uh so JB has this uh Noatis is off portfolio which is 30:07 30 minutes, 7 seconds currently in licensing you know there's an opportunity for growing gross margin on that portfolio by FI28 30:14 30 minutes, 14 seconds so the 4450 K number is inclusive of that you know gross margin synergies on the offile portfolio of noises 30:23 30 minutes, 23 seconds no it does not include that there's two parts there's uh novatist business of the optal portfolio and the aada 30:30 30 minutes, 30 seconds portfolio. Uh so this synergy number does not include either of these. 30:36 30 minutes, 36 seconds Perfect. Okay. Thank you. Uh secondly on you know the Brazil act of demand 30:43 30 minutes, 43 seconds I think uh one of your peers uh reported quarterly numbers where you know they had a new launch and high growth 30:51 30 minutes, 51 seconds uh with DAPA. So any guidance on the number of new product launches in Brazil XM and you know how that growth 30:59 30 minutes, 59 seconds trajectory can look like over the next two to three years please. 31:02 31 minutes, 2 seconds So we have good visibility on new launches. So uh so we'll be doing about time to state launches here 31:12 31 minutes, 12 seconds and in terms of growth you know can that translate to a 20% kind of a growth kagger x of sema over the next two three years. 31:22 31 minutes, 22 seconds So uh the the market growth itself has slowed down considerably. Uh so we are seeing a market growth of 67 and I'm targeting 10 to 15% growth for for 31:30 31 minutes, 30 seconds torrent. So driven by new products uh and pricing is increases in Brazil have muted considerably because they've 31:39 31 minutes, 39 seconds managed to keep inflation under control with crazy high interest rates. So the the inflation is pretty low and the price increases we are seeing is not 31:47 31 minutes, 47 seconds like old times. Nowadays we are seeing four and five which also companies are not able to take because of competition. 31:54 31 minutes, 54 seconds So combining muted pricing increase some volume increase and new products I think in the range of 10 to 15% is is 32:01 32 minutes, 1 second reasonable to expect. In terms of secondary sales growth, demand growth, prescription growth and primary sales grow your varies up and down a little 32:09 32 minutes, 9 seconds bit based on wholesale decisions on inventory. 32:14 32 minutes, 14 seconds Sure. Thank you for that. I'll join back to you. Thank you. 32:21 32 minutes, 21 seconds The next question is from the line of Tushar Man from Motila Losal Financial Services Limited. Please go ahead. 32:28 32 minutes, 28 seconds Yes, thanks for the opportunity. So just one more on the GB side. So u any any therapy in India or let's say fragment 32:37 32 minutes, 37 seconds in India and then uh likewise in the international market which you think is not going to be renovated or not align 32:46 32 minutes, 46 seconds with the foreign farmer strategy which you would like to eliminate or reduce considerably. 32:53 32 minutes, 53 seconds Uh not therapy exactly but certainly the JB trade generics business is not something which we are looking at 33:00 33 minutes continuing. uh it's been practically run at zero margin. So and and if we keep running it, it'll keep giving us stock 33:09 33 minutes, 9 seconds returns. So we're planning to uh if not discontinue at least shift some of it to our base trade generic business at the 33:16 33 minutes, 16 seconds early possible that is as far as India business and on the international market side 33:25 33 minutes, 25 seconds international is all fairly complimentary. So nothing that we see there which doesn't align with our current strategy. 33:34 33 minutes, 34 seconds Got it sir. And for at a group level right within let's say Europe or Latam or any other let's say developed markets 33:42 33 minutes, 42 seconds where uh you know we've been uh doing pretty well may it been India Brazil US 33:49 33 minutes, 49 seconds we just sort of growing Germany certain temporary constraints but any other geographies where torrent would intend 33:56 33 minutes, 56 seconds to you know make uh mark or you know start building uh in addition to these core geographies. 34:04 34 minutes, 4 seconds So uh you're talking in the context of JB right? No uh editorial group. 34:12 34 minutes, 12 seconds So four large markets like India, Brazil, Germany, US and we are preparing future large markets like Russia 34:21 34 minutes, 21 seconds then Mexico then the Philippines. Um so these should be become in the medium-term roughly $50 million markets 34:28 34 minutes, 28 seconds and that's what we are targeting. And then there's another series of markets below that that are currently in the 10 million range and we want to take them 34:35 34 minutes, 35 seconds up to 25. So that is the way we look at our let's say geographical portfolio 34:42 34 minutes, 42 seconds and 50 million uh each of the combined I mean u 34:50 34 minutes, 50 seconds and over what period so it take three four years but the JB doesn't bring us much in terms of front 34:57 34 minutes, 57 seconds end sales in Mexico neither in the Philippines and so in Russia they do add so we have 35:04 35 minutes, 4 seconds current business of 20 million and they let's say another 50% of that. So, so it 35:12 35 minutes, 12 seconds it it leads to a scale improvement generally in all emerging markets especially in Africa and Eastern Europe 35:18 35 minutes, 18 seconds and and Russia. So, this combined scale provides you an opportunity to to to be more visible on the market to invest more on the market to increase profitability and to increase momentum. 35:37 35 minutes, 37 seconds Thank you ladies and gentlemen to ask a question you may press star and one. Our next question is from the line of Girish Bakru from Orbe Med. Please go ahead. 35:49 35 minutes, 49 seconds Yeah hi thanks for taking the question Sanjay. I was just trying to understand N visa better here. You know I know you don't have a crystal ball but given that 35:57 35 minutes, 57 seconds there are 11 12 filers on semma I mean has it happened in the past where regulator has had the situation where 36:05 36 minutes, 5 seconds there are so many uh filers on the new product and I mean how many um can it approve in the first wave I mean 36:13 36 minutes, 13 seconds typically NVA approves I think two three products in in any semester right no no no it's not like that no they can 36:22 36 minutes, 22 seconds it's pretty much like anyway anywhere else in the world. There's no kind of kota system in in Brazil. So they give some flexibility for you to prioritize 36:30 36 minutes, 30 seconds and indicate to them which are your priority doses and then you can kind of push them up the queue but they can improve as many as you want. I've never 36:38 36 minutes, 38 seconds never seen any limitation from an in terms of number of approvals. 36:42 36 minutes, 42 seconds So when you say wave of launch you being let's say maybe in the second wave first wave can be as big as five approvals also right? 36:50 36 minutes, 50 seconds Yeah. Yeah. I'm hoping to be in the first five but let's see uh because the file is there but again we areic which is ahead wiggoi is behind so and the 36:59 36 minutes, 59 seconds bigger market is big understood and typically I mean for a product like this uh supply chain is 37:08 37 minutes, 8 seconds different or is like again same like other generics no so I mean uh it's not a torrent 37:15 37 minutes, 15 seconds supply chain on this one right because we are not manufacturing so and then it's a device. Uh so it's slightly different but otherwise it'll work. We have the systems to make it work. 37:26 37 minutes, 26 seconds No. My my question is more on the like distribution side. Do we have to have large distributors local distributors like you know RD and this Abraa tied up to get large market. 37:38 37 minutes, 38 seconds So these big distributors they have a refrigerated supply chain. So we don't anticipate any problems because they're so large. So Santa Cruz, Zabra farmers 37:46 37 minutes, 46 seconds that you mentioned, they all have capabilities to distribute refrigerated products, temperature controlled products. So not an issue. 37:54 37 minutes, 54 seconds But would they take more than three four supplies? I mean I understand capacity can be an issue here. So they may take 38:02 38 minutes, 2 seconds typically let's say whoever gets in the first wave would lock in these distributors, right? 38:07 38 minutes, 7 seconds You can't lock in distributors so easily because basically Brazil is a prescription market, right? So you have to convince the physician that your product is a viable product. So pretty 38:16 38 minutes, 16 seconds much like India right? So if the physicians writing and you know they are seeing the RX is coming in they they would stop your product. So the battle 38:24 38 minutes, 24 seconds is less it's not like a trade market right. Brazil is more a prescription driven market. So we have to convince the doctors that our product has the right quality right price uh and you 38:33 38 minutes, 33 seconds know we give the right service level. So it it it should be fine as far as the distributors. We do that every day 38:40 38 minutes, 40 seconds controlling chains and distributors that's part of our bread and butter and uh we don't anticipate a barrier to entry on that front. 38:48 38 minutes, 48 seconds Understood. And and I just wanted to also check uh oral pin is already filed by no in Brazil. I I think approval may 38:57 38 minutes, 57 seconds maybe probably I don't know this year late or next year but do would you file oral in Brazil in India? So we looking 39:05 39 minutes, 5 seconds at that because Aman has that product in India and potentially we can extend it to Brazil but we haven't filed it as yet. 39:15 39 minutes, 15 seconds Understood. Thank you so much. 39:18 39 minutes, 18 seconds Thank you. The next question is from the line of Vivea Garwal from Cityroup. Please go ahead. 39:25 39 minutes, 25 seconds Yeah thanks for the followup. Although you are not uh quantifying as far as the revenue synergies are concerned from JBD 39:33 39 minutes, 33 seconds but any possibility that can what kind of the or is there real possibility for any kind of revenue synergies over a 39:41 39 minutes, 41 seconds period of time uh etc any qualitative color actually that would be helpful I mean qualitatively if we look at some 39:51 39 minutes, 51 seconds of the past revenue synergies that we've been able to kind of deliver most recently being in Q ratio brands and 39:58 39 minutes, 58 seconds divisions. It's generally where uh the torrent division has had a kind of longer duration of presence in those 40:07 40 minutes, 7 seconds regions in areas where you then start selling or cross-selling over time that does really kind of show uh positive 40:15 40 minutes, 15 seconds outcomes. So you would have seen the growth of the curatio basket of drugs uh or products has increased every year 40:24 40 minutes, 24 seconds sequentially as a result of this. So not not saying that this is what we can expect in the case of every acquisition 40:32 40 minutes, 32 seconds or in JB but there are certainly pockets where even within the established JB brands there are areas where the torance 40:41 40 minutes, 41 seconds divisions or field force has had a much longer presence or has a stronger brand equity or you know corporate equity 40:48 40 minutes, 48 seconds which can be leveraged. So this would be across cardiac and gastro especially which are the two largest business contributors for torrent and JB both. So 40:57 40 minutes, 57 seconds because of our number of field force that we have in torrent the opportunity is is quite significant to at least get the reach enhanced as quickly as 41:06 41 minutes, 6 seconds possible and even in overlapping areas there could be low market share of JB versus higher market share of torrent in some products and there you can really 41:14 41 minutes, 14 seconds look at opportunities but this is something that we would not want to focus on in the first year. uh first year would be pretty much in terms of 41:22 41 minutes, 22 seconds topline business as usual. First year would be probably more on the cost side and second year onwards this is when we 41:28 41 minutes, 28 seconds can start really looking at this that's thank you that's quite helpful thank you 41:36 41 minutes, 36 seconds thank you the next question comes from the line of Tar Manudan from Motila Losal Financial Services Limited please 41:43 41 minutes, 43 seconds go ahead Tushar your line has been unmuted you 41:51 41 minutes, 51 seconds may proceed with your question yes Uh so thank you for the followup just the net debt number uh at the end 41:58 41 minutes, 58 seconds of so net debt number as in December is roughly 880 crores 42:07 42 minutes, 7 seconds and uh how how this trajectory with this acquisition uh while we have shared the 42:15 42 minutes, 15 seconds net debt to aid ratio but if you could just quantify at the end of FI 26 subsequently 27 the net date 42:24 42 minutes, 24 seconds No, I think at this point it's difficult to tell you the numbers Tar but the guidance which I gave you or which I 42:32 42 minutes, 32 seconds gave earlier I think that that you should be able to work it out. 42:39 42 minutes, 39 seconds Okay. 42:43 42 minutes, 43 seconds Thank you ladies and gentlemen. We will take that as our last question for today. I would now like to hand the conference over to 42:51 42 minutes, 51 seconds Mr. Sanjay Gupta, executive director of international business for closing comments. Over to you sir. 42:57 42 minutes, 57 seconds Thank you very much um for joining this call and look forward to updating you in the future about our progress. Thank you. 43:06 43 minutes, 6 seconds Thank you on behalf of Torrent Pharma. 43:09 43 minutes, 9 seconds That concludes this conference. Thank you all for joining us. You may now disconnect your lines.