Welcome to Lupin Limited Q2 FY23 earnings conference call. Please note that all participants line will be in listen-only mode, and there will be an opportunity for you to ask questions after the opening remarks. Please note that this conference is being recorded. I now hand the conference over to management. Thank you, and over to you, sir. Hi, everyone. This is Vinita Gupta here. Very warm welcome to our Q2 earnings call. I have with me our Managing Director, Nilesh, as well as our CFO, Ramesh, and members of our finance and investor relations teams. Trust you all have seen our numbers for the quarter, and Ramesh will share a deeper analysis of our performance. As you would have noted, our business has improved. Revenue growth was driven by the bounce back of our U.S. business, along with continued growth in our India business, and also growth across all other geographies. On the margin front, we see the benefit of our optimization measures in addition to the revenue growth in the business. We are focused on sustaining this positive momentum for the rest of the year. I would like to share some of the business highlights with you. On the US front, we have continued to evolve our business with optimization of oral solids, driving growth of complex generics, respiratory franchise in particular, and executing on our new product launches. During the quarter, our respiratory franchise contribution increased, and we executed on a couple of new product launches, in particular, Suprep, that will help growth in Q3 and Q4. It had some contribution in Q2, but since it was launched in September, more to come in Q3 and Q4. In addition, we closed our acquisition of the Sunovion brands, Brovana and Xopenex, that will enable us to enhance our respiratory position in the US while contributing to revenue as well as profitability growth. As we look at the quarters ahead, we have new product launches like Spiriva, diazepam gel, Nascobal nasal spray, and darunavir, multiple products where we have exclusivity or first to market position that will enable us to grow our U.S. business in a profitable manner. On Spiriva, while we had hoped to get an approval by now, we are close. We have responded to all the queries the agency has had raised, and are working closely with the FDA to get approval by our eligible launch date. We will know more in the next few weeks, and we'll share what we learn with all of you. In any case, we see this as a substantial contributor for fiscal year 2024 and will definitely have a significant runway based on the competitive position at present. Switching to India, the largest part of our business. While our growth in the quarter and the first half has been below market, this is primarily due to the loss of Cidmus from our cardiovascular portfolio and genericization in the gliptins. For the diabetes portfolio, our India business grew ahead of the market. Also the diabetes franchise, while impacted in the near term, we expect growth in the mid to long term given the continued growth in diagnosis and increased affordability with generics coming to the market and our own generics. In our top therapy areas, respiratory and cardiac growth was in line with the market and therapeutic areas that we are trying to build, like GI and women's health, were well above the market. We expect the second half of the year to be better than H1 from a growth perspective and are committed to get our India business back to double-digit growth in the quarters and years to come. All of the markets continued to grow and perform as per expectations. In particular, we saw a really strong local currency growth in Mexico and strong double-digit growth across Australia, Germany, Canada, and U.K., our other developed markets. On the margin front, we have seen significant efforts that we have had underway in the last 12 to 18 months pay off. Our margins did improve, and we expect to see this benefit continue in the quarters to come despite inflationary pressures. A word on the compliance front. You know, we have made progress this past year with the clearance of Goa and Somerset warning letters and successful inspection of Ankleshwar and Nagpur. However, the warning letter at Tarapur certainly was disappointing for us. We have clarified with the agency that it is only specific products that we have discontinued over the last couple of years from the site, and we continue to manufacture a number of key products with a clear commitment to meet the FDA's concerns on nitrosamine and cross-contamination that they highlighted to us during the inspection and in the warning letter. Overall, we are moving in the right direction, as you can see from what we have delivered in the quarter, and are really committed to grow both revenues and profitability in the quarters to come while executing on our strategic plan. With this, I will hand it over to Ramesh for a deeper analysis of our performance. Thank you, Vinita. Sales for Q2 FY23 are INR 4,091 crore as compared to INR 3,604 crore in the previous quarter, a growth of about 13.5% quarter-on-quarter. Year-on-year basis was about 2.2% as compared to Q2 FY22 sales of INR 4,003 crore. I would just go on to the margins bit. FY23 Q2 gross margin was 58.1% as compared to Q1 of 55.3%. This is mainly due to one-time shelf stock adjustment in the previous quarter. In this quarter we also had optimization of freight costs, both mix and rate and other rate terms and better product mix as well. There was of course some price erosion, which was well contained though. On the employee benefit bit Q2 FY23 is INR 771 crore. We saw the 778 crore in the previous quarter. Manufacturing expenses very well contained again. FY23 was INR 1,226 crore. We saw it was INR 1,191 crore in line with the sales development itself. EBITDA, operating EBITDA excluding FX and other income is 10.6% in Q2 FY23. Quarter-on-quarter growth in EBITDA is about 610 basis points, which is led by expansion of gross margins over Q1 and higher sales growth at the, you know, which was again reported across various regions. R&D is flat at, as compared to Q2 FY 2022 at, 8.3%. ETR. Normalized ETR is expected to be between 31% and 34% as few subsidiaries like LI, LOI, digital and healthcare continue to make losses. Operating working capital. DOS improved about 140 days in Q2. We saw it was 147 days in Q1 of FY 2023. Reduction in inventory despite delivering higher sales. With this, may I open the floor for discussions? Please raise your hand from the participant tab on the screen to ask a question. While asking questions, request you to please identify yourself and your company. We'll wait for a while. First question is from Neha. Yeah, thanks for taking my question. Ramesh, on the operating cost in the quarter, you know, last quarter we'd indicated a fair bit of, you know, cost optimization efforts that, you know, we were expecting. While we've seen gross margin improvement or operating costs especially, you know, employee costs, other expenses hasn't seen the reduction. You know, we had also indicated closure of facility. Could you give us some color there, please? Yeah, sure, Neha. You know, there are several initiatives that we have been carrying on. You know, we have been focusing on gross margins in terms of, apart from what we are doing on the top-line front itself. You know, we're working on alternate vendor development in terms of routes to synthesis, et cetera, for the gross margins. In terms of, you know, the manpower itself, yes, we did go through in fact with the workforce planning at the factory level. There was a reduction, and you'd find a lot more coming up in Q3 and Q4 as well. There's a shift between lines. You know, essentially that's the reason why you actually found it to be a little flattish when it comes to, you know, the manpower lines itself. Believe me that there has been overall reduction which has come through. On the SD&A front, there is a lot more of sales promotion in line with the overall sales development itself, and that's across various regions, including India. Despite all of that, you would see that the overall margins have actually gone up. You know, that's in line with the development of the gross margins front as well as, you know, the evolution of the sales front. You know, are we sticking to the guidance that we gave last quarter of exit margins? It really depends on the product, top-line profile really. If we do get the kind of products that we were anticipating, then you would look at, you know, an exit rate, which is more in line with our overall anticipation for the future. Okay. Which would be the number that we'd mentioned before in the last quarter? Yeah. Around that. Okay. Got it. Vinita, you know, on the U.S. business, you know, given we had a lot of one-off and moving parts in the last quarter, if I were to look at the base business, one, have we seen how has the pricing erosion been on the base? And have you been able to regain some of the, you know, lost share in the existing products, or was all of the improvement driven by new launches? No. Neha, part of the improvement was just the fact that we had the one-time correction, right, in Q1, and we had a normalized quarter in Q2. In our in-line products, you know, about the bulk of the oral solid portfolio, we had reasonable price erosion, not double digit. Definitely price erosion was more measured. On the respiratory franchise, actually we have seen a good improvement. You know, it's become a larger part of our business. That contributed nicely to revenue growth as well as profitability growth. The new product launches, we had three, and Suprep was material, but also Suprep was in the last, the end of the quarter in September. We got, you know, a little bit of contribution in Q2. We'll have more to come in Q3 and Q4. Majority of the revenue growth was the existing portfolio, both, you know, oral solids as well as respiratory. Got it. Last question, if I may. We added the two brands that we've acquired in the current quarter. Given we already have a generic there, the thought process of acquiring these brands? It enhances our respiratory portfolio. You know, we have added Xopenex as a product in our respiratory offering, which certainly enhances our position on the respiratory front. On the Brovana front, you know, we were already a partner, authorized generic partner, and we had a percentage, you know. We obviously have synergies there and have the end-to-end PNL on the Brovana front, which is attractive to us. You know, we will continue to maximize the two products and look at ways and means of stabilizing the revenues of Xopenex and potentially building synergies on both products given our manufacturing capability across both MDIs as well as respules. Got it. Thank you so much. Thank you. The next question is from Saion Mukherjee. Yeah, hi. This is Saion from Nomura. Vinita, just to carry on Xopenex and Brovana, can you share the size that you're looking at for these two products? You mentioned about stabilizing sales, so what is the dynamics on Xopenex here? On Brovana, I understand brand still has around 13%-14% market share. So is that what you would be continuing selling? So if you can give just some indication on the size. Also the $75 million, how do you sort of amortize it? What's the timeframe for that? Just taking the $75 million first, I mean, the franchise is accretive in year one. You know, we are very pleased to be able to transact at the level that we closed. You know, I can't share product specific details because, as you know, Brovana is part of our generic portfolio. The authorized generic is part of our generic portfolio. I mean, you can look at the IMS dollars of both products, you know, as well as the authorized generic. It's substantial from IMS dollars. Needless to say, you know, the products have been accretive, will be accretive in the current fiscal year. You know, provide synergies both in Brovana as well as obviously incremental revenues and profitability of the residual brand. You know, it gives us a residual brand revenue line and potential synergies on our cost of goods going forward. When you say accretive, you're meaning EPS accretive, and that's why I was asking how we amortize the $75 million. Yes. EPS accretive. You know, you should be amortizing it over what period, the $75 million? Insofar as Brovana is concerned, it's going to be a much lower period. For sure. For that, it's gonna be more in terms of what we think is an appropriate period. Mm-hmm. The accounting rules doesn't provide for anything more than 10 years, so it's going to be shorter than that anyway. It's much shorter than that. Yeah. Vinita, can you share, like, which one is a bigger franchise now, Xopenex or Brovana? I mean, I know you can't share the exact revenue number. You know, in terms of dynamics, do you expect competition in Xopenex at some point, or you expect it to be sort of a stable brand? Yeah, we expect it to be a stable brand. You know, between the two products, they are kinda equal right now. Okay. in terms of revenue. Brovana obviously has got multiple generic competitors. We expect it to come down, you know, while still having some residual revenues in the brand. While Xopenex we see as a stable opportunity in the foreseeable future, just given the scale of the product, the size of the product, and the fact that one would have to do a clinical study, you know, to be able to get a generic version approved and the like. Okay. Thank you. Thanks. I'll join back. Thank you. The next question is from Prakash Agarwal. Hello? Am I audible? Yes. Yeah, good afternoon. Just, you know, a quick update on Spiriva, where are we, you know, last time you said you had query on the product, so, what is the timeframe, and have you replied, and when are we expecting? Yeah, Prakash. We have responded to the queries fully within October. We have filed also for priority review, which we're working with the agency. We'll know in the next couple of weeks the status of our request. We are working closely with the agency to get approval on eligible launch date later this fiscal year. Okay. Eligible launch date is in Q3 or Q4? It was Q3, right? No, it was the second half, end of second half. Understood. Just, you know, was checking, I mean, how is the flu season? Has it started? Hearing that it can be a flu season this year. Are we hopeful of the Tamiflu we had in the past or that is now much endemicized? No. The first time after a couple of years, we are seeing some impact of the flu season. We've seen an uptick in anti-infectives as well as Tamiflu a little bit in Q2. We're expecting a strong flu season. If you hear all of the predictions in the U.S., I mean, they're talking about a strong flu season, COVID, as well as RSV. A combination of multiple issues. We're also seeing you know, the flu season impact on our purchase orders on the API front, on the cephalosporins. Both the U.S. indicators as well as API you know, forecasts suggest that the flu season right now seems to be picking up. Okay, perfect. Lastly, you know, you made the acquisition of these two brands. Going forward, I mean, it was just opportunistic or that could be a strategy going forward, and that too, specifically in respiratory or it could be any therapy? Yes, it wasn't opportunistic. It was actually strategic. We had told our team that we want to grow our respiratory franchise with established brands. We didn't you know multiple opportunities on new pipeline programs, but didn't want to get into dilutive assets. We had looked at multiple opportunities and you know really focused on this one to look at what we can do from a synergy perspective. Certainly had synergies on Brovana. As we looked at Xopenex as well we really like the product. We like the product profile. It hasn't been promoted in multiple years, so we will evaluate the potential of promoting the product with a small scale investment. Look at leveraging our manufacturing capability to improve the margin profile of the product. Right now it's contract manufactured and we'll certainly continue the relationships in the next couple of years. As we look at maximizing value from the opportunity, we'll look at also bringing in synergies from a manufacturing capability. Okay, great. Lastly, on the margin outlook, you know, the margin outlook was around 15%-16%. Correct me if I'm wrong, and this is without the Spiriva opportunity exit rate of Q4. No, I would say that it really is a function of the kind of products that we bring. If you know we have Spiriva coming in in the fourth quarter, it will certainly have its bearing on the margin there. The exit guidance that I spoke about was essentially based again on Spiriva coming in. Yeah. That's, I think, fair to say that you'll see continued improvement on margin quarter after quarter. That's true. Really to get to that 16% level plus, which we are working towards, we need material launches like Spiriva. We have a good, you know, few products coming with Spiriva, hopefully in Q4. And soon after that, products like Darunavir, where we have exclusivity, plus, you know, Nascobal nasal spray a little bit later in Q1 next year. Diazepam gel. We have a couple of new product approvals that we're chasing. You know, hopefully in the next couple of months we'll have a better idea of the launch timelines of each. There's a very strong focus on trying to bring them to market at present. As we launch these material products, in particular products like Spiriva, Darunavir, we expect the margins to improve to that 16% plus level. Okay, lovely. Thank you and all the best. Thank you. The next question is from Kunal. Yeah, thanks for taking my question. I think at some point we were expecting plant inspection related to Spiriva approval. Is it still the case or we still don't have clarity on that? We actually had a record review, plant record review. We have also gone through an assessment on PK and PD satisfactorily. We believe that we have you know given the agency everything that they've asked for. Again, it's their prerogative to come and inspect if they wanted to. We'll find out in the next couple of weeks, you know, where our priority review re-request stands, and that'll give us a good idea if there will be any plant inspection. Do we have any target date as of now? Like I said, we just filed for priority review, and we'll have a target date in November for the request in the next couple of weeks. You will get target date in November. Yes. Okay, the second question on the acquisition, I think our president mentioned that we'll also have whatever infrastructure is required for this product. Does it include any kind of manufacturing line or something? No, it's just an asset acquisition. No manufacturing. We have the manufacturing capability. Currently it is manufactured by someone else. You would bring it to our own plant. Is it? Over time, you know, some Brovana sooner than Xopenex. We have the opportunity, the potential of bringing it back in-house. Okay. Let's say one last question on the cost initiative. I think we were very sure that there'll be, you know, INR 20 crore savings in the employee cost line item in, you know, quarter two. What has changed? Why it has not materialized, or it has materialized and there is some cost inflation that has, you know, come in in the quarter two? It has certainly very well materialized. There is, of course, savings there, but there has been a shift between lines. You know, it shifted from, in fact, some travel lines for certain incentives, et cetera, to trade to the salesman, which has come into the sales figure. Employee. Employee figure. For India. Yeah, in India. For India. There have been savings on the workforce planning that we did in the last quarter. Mm-hmm. Offset by. A shift in lines. Yeah. Okay. If I may ask just a last one, in terms of the FTS failure to supply penalties, what would be that number for this quarter? It was marginal, actually. Absolutely. It's come down significantly. Actually, there was a good amount of savings both in failure to supply penalties as well as freight costs, as Ramesh mentioned as well. Last quarter it was $4 million, and this quarter is almost $0. It's under $2 million. Yeah. It's marginal, actually. Okay. Yeah. Thank you. Thank you. The next question is from Dino. Hi, am I audible? Hello? Yes. Okay, great. Hi, thanks. Congrats on a great improvement and thanks for taking my question. Vinita, just a couple of clarifications. For Darunavir, did you say Q1 FY 2024? That's right. Okay. Just a couple of other product queries. Any update on Dulera filing? Yeah. Dulera, we had a CRL that we responded to the agency very recently. Okay, do you expect to hear anything in the next 6 or 12 months? Yeah, we expect in the next couple of months to find out if the agency is satisfied with our response or we need to do more work on the product. Understood. There is this product, generic Myrbetriq, in which you have a final approval. Any timelines for the launch? It doesn't, I don't know exactly when the launch date is for that product. The near-term products, as I mentioned, are Spiriva, Darunavir, diazepam and Nascobal, where we have exclusivity as well. Beyond that, products like Vernakalant, you know, will be material next year as well. Injectable products, you know, based on our inspection of our biotech plant, we would expect pegfilgrastim approval based on the inspection of our Nagpur facility recently. We expect glucagon to be approved and the like. Understood. Great. Final question to Ramesh. You know, the tax rate is running around 31%-34%, which is much higher than the corporate tax rates in India. How do you see this panning out over the next couple of years when you have a plan in place to bring it down? While, if you look at Lupin standalone results, the absolute numbers in India and the percentage would be lower. It's only the presence of, in fact, some loss-making subsidiaries in various parts that is actually causing this number to deteriorate. In the first quarter, of course, there was this anomaly because of lower sales in America caused by because of the stock situation being what it was. We are very much conscious of this. For the full year, actually, you would see it going down. In the fourth quarter, for example, it could be pretty much in line with normal rates. In the next 2-3 years, we expect the tax rates to come down for sure in India. We also expect profitability to come back to in a lot of the other regions, you know. That could potentially bring down the overall effective tax rate of the company. Got it. Thank you very much, and best of luck. Thank you. The next question is from Damayanti. Hello, am I audible? Yes. Okay, thanks. Ramesh, you have been mentioning about some cost initiative, results of which will be hopefully visible in coming quarters. Can you a bit elaborate, like which are the areas where we are expecting significant cost benefits to come in, where you have been working for, say, last few quarters? We have been working on a number of initiatives. You know, as I said, you know, a few minutes ago, we have been working on actually, on, you know, the direct costs also in terms of alternate vendor development, in terms of routes to synthesis. Apart from that, we have been working on, you know, on optimizing, you know, the workforce at the factory level, you know, addressing the footprint, reducing the overall idle time, looking at the footprint rationalization also. Apart from that, optimization of, you know, the workforce at the R&D level, and a host of other measures to ramp up the productivity of the sales force and the like. Apart from that, there was of course freight. You know, in terms of the mode of transportation to America. You know, the FTS issues that we were facing in the past. Of course, the stock returns. You know, how do we actually make sure that the returns were also kind of brought down, the quantum of returns in America itself. All of this is actually moving in the right direction. There has been tremendous progress in this, and over the next year, you would see. All of this will certainly contribute to the EBITDA margin improvement that I'm speaking about. Say, like, Spiriva comes by end of this fiscal, and all these initiatives start yielding results. You're hopeful that by next year, your margins should be definitely better than 16% or so, or maybe, like, moving to high teens. Yes. That's absolutely true. Okay. Just a question on the marketing team in the U.S. Right now, you do not have any team for promotion, right? If required, you might build a small team for the acquisition which you did recently. Yeah. At present, we haven't planned to build a team, you know, to promote the products. They haven't been promoted for a couple of years. We expect to continue to, you know, deliver the revenues that we have planned without an investment. We will assess if it makes sense to invest into sales promotion. Okay. After Solosec team disintegration, right now you do not have any specialty team in the U.S., right? No By my understanding. We don't have a specialty sales force. We promote Solosec through a partner, through Exeltis, and likewise have the option of promoting also Xopenex through a partner if we wanted to. Okay. Good to hear that. My second question on the respiratory franchise. Obviously, you have done very well in the Albuterol franchise. Can you talk a bit about your progress in Fostair? Like, what has been the pick-up in the European market, if you can quantify any number there, in terms of sales or how you have moved in? Yeah. It has ramped up. It's still, you know, compared to the Albuterol contribution, it is relatively speaking very small, given that the UK market itself is a fraction of the overall Fostair market. Our market share has ramped up to double digit at this point and continues to ramp up week after week. You know, we expect to launch the product into other markets in the last quarter of the fiscal year based on our launch date agreement. We would expect to expand our position with Fostair you know beyond UK into other markets in the quarters to come. That will also help us really access larger part of the market. The key product continues to be a very good contributor to the U.K. market. The U.K. business grew significantly on a small base, but primarily on the back of Fostair. Okay. My last question is, how do you see R&D moving from here on, and what are your priority segments? Sorry. Actually, the R&D number is pretty stable, and we expect it to continue more or less at this level. Obviously the high investment areas are areas like inhalation, injectables, then, you know, some biosimilars, and obviously a steady portfolio of the oral solids, ophthalmic kind of products as well. Over the period of the last few years, we've obviously changed from focusing primarily on oral solids to these differentiated dosage forms, and our intention would be to continue that. I think the budget is. The numbers are pretty well set. You know, as you've seen, I think last couple of years, we've basically stayed at this kind of number, including the number that we reported this quarter as well. We feel that this is a really good number for us to be able to work with. Okay. Thanks. That's helpful. Thank you. The next question is from Sameer. Hi. Thank you. Very good evening, everyone. Ramesh, if I'm not wrong, I thought the exit EBITDA margin for fiscal 2023, you had earlier guided to 18%. I think there are very different numbers being spoken of in this call. It is going to be a function of, you know, launch of products, Sameer. You know, it could be anywhere between the 16%-18% range. At the lowest it could be 16%, at the highest level it could be 18%, which will be the exit run rate in the fourth quarter. Okay. No, that's fine. This follow-up to that is what's the expectation for fiscal 2024, both on the top line growth excluding Spiriva and, you know, margins, including everything? If you can just help with that. You know, as I said, we are going to be. You know, Spiriva is certainly going to be a very important addition to our overall portfolio. The overall evolution on the margin front would certainly be dependent on that. Whilst we make progress on various initiatives, you know, that we just spoke about, you know, getting the top line moving is going to be extremely important. Sure, Ramesh. The question is excluding Spiriva, what could be the top line growth for fiscal 2024? I mean, is it going to be mid-teens or any guidance on that? It'd be difficult to kind of estimate at this stage, you know, there would be because there are several moving parts in America, including, in fact, the OSD business being what it is and so on. I would say that there is secular growth across various other geographies, but the one factor which is very difficult to kind of estimate is indeed America. We've seen in the past, you know, in the recent past at least, that there has been a lot of surprises coming in. Spiriva is going to be a very important factor whilst we are of course working on rationalizing of our overall portfolio itself, make sure that there is optimization on the costs associated with running our American business. Okay. Sure. Just on Suprep, Vinita, if my number is correct, I mean, is it a $30-$35 million kind of opportunity over six-month period, and after that it gets very competitive? Yeah. I'm gonna stay away from a product specific guidance but it is a nice size product. You know, right now it looks like you know we share the market of course with the brand. They preemptively launched an authorized generic. We've got you know close to 50% share from you know customers that we have locked down with the product. The market share that we have got from a customer's perspective. We also think that the exclusivity might be a little bit longer, you know, based on what we have learned from a supply perspective. We believe that some of our competitors might be delayed and we might have the product, the runway a little bit longer than six months. Okay, great. One final question, with your permission. Given that Spiriva is so important, anything on the supply chain, different components, anything that you think, you know, can make a difference? Or you think it's more or less streamlined? No, we have been working, you know, pretty much for the last couple of months, you know, on ensuring that we have, you know, adequate supply of everything that we need, whether it's, you know, the capsules and the devices and all of it, to ensure an effective launch. We are well into launch mode from a supply perspective. Okay, great. Good luck. Thank you. Thank you. Thank you. The next question is from Kunal. Hi. Good evening. Vinita, just one clarification on the Tarapur API warning letter. I think the warning letter states that you're suspending production of drugs for the U.S. market. I think you mentioned in the media that, you know, I think the supplies are continuing. Just there's a bit of a confusion here, if you can just clarify that. Yeah, let Nilesh take that question. Yeah. We've clarified to the FDA. Basically, there is a misunderstanding based on what we had shared with FDA. There were certain products that we had suspended in the past, and the misunderstanding was that we are suspending supplies from the plant altogether. We've clarified and we, you know, we have FDA's acknowledgement on the clarification as well. We obviously continue supplying multiple products, you know, many products. Tarapur is pretty important in the U.S. scheme of things. We also don't anticipate any disruption of supply from that facility. Of your outstanding filings, how dependent would you be on Tarapur? Nothing really. There's no meaningful pending approval from Tarapur. Okay. Got it. Second question is on, again, Spiriva. Now, you know, I think the Spiriva prescriptions, I believe, have been falling over the years, and after the introduction of Respimat, I think they've gone down even further because I think Respimat has taken 50% or so of the market. Just wondering what's the covered market that you are actually targeting? Would it be around $500 million and maybe, you know, you're aspiring for a 20%, 22% kind of market share? No. I think you can take a look at the IMS revenues and, you know, we target the entire market when we look at, you know, the brand pricing and, you know, what price we launch at. You know, when you look at the net sales after the rebates for a brand, that's more relevant for the brand than it is for generic. I mean, the IMS revenues are still a billion-dollar or close to a billion-dollar product, so material product, where we expect to be a sole generic with maybe an authorized generic in the near-term future. We will see what happens when the product goes generic. We've seen in cases like this where brand has shifted the franchise to a new dosage form that sometimes a lower priced product is able to take some of the share back. We'll wait to see that. It continues to be a sizable opportunity for us in the next couple of years. Sure. If I can squeeze in just one more. On the biosimilar front, I think you have a couple of products for the U.S. market, pegfilgrastim and ranibizumab, which is still under, I think, clinical trials. I mean, the market might be set up by the time you enter, just wondering how we should sort of look at these opportunities. ranibizumab is, of course, in development and p egfilgrastim, the PFS, is what we were inspected for by the FDA in the last couple of weeks. We're actively looking at ways and means of leveraging that product once we get approved in the marketplace, whether it is through our institutional sales force or through a partner. We have both options, and we are actively looking at both opportunities based on, you know, again, you know, the investment in a commercial infrastructure versus the upside. you still think it could be meaningful opportunity for you because the price erosion has been very steep in biosimilars in products like pegfilgrastim in the U.S. Yes. We're tracking the pricing very closely. Obviously, both on pegfilgrastim ranibizumab as well as other products. As the market uptick has improved, competitive intensity has increased. We've certainly seen significant price erosion. That's why we're weighing options. Like I said, we have options of both partnering or you know, leveraging our institutional infrastructure that we will have in place for our injectables to you know, be able to build you know, share gain market share with the products. Well, it's a different situation with pegfilgrastim and ranibizumab. ranibizumab is two years away. Pegfilgrastim is you know, in the next 6-12 months. Also we will weigh, you know, the launch of the next product after pegfilgrastim to determine what makes sense for us. Got it. Thank you, and all the best. Thank you. Thank you. Next question is from Surya. Yeah. Thank you for this opportunity. First question is on the R&D spend frontline. You had indicated about hiving off your NCE research and hence, to some extent reducing our R&D spend on the basic research front. Any update on that? Yeah. We've been trying, of course. In essence, we really wanted to move from, you know. We've been looking at multiple options there. I think the first option was to spin out oncology altogether, transition the entire engine into an engine that produces oncology assets. You know, it's obviously been a tough financial market at this time. We decided to focus primarily on the development assets that we have. We have five development assets, pretty much all in the oncology space. Those are the ones that we're taking ahead. In the meanwhile, we've scaled down the NCE team. We've reduced the burn very significantly. The primary burn going forward will be the investment into the clinical development of these five assets. Okay. That will not have any meaningful spike in the overall R&D spend then. No. We see a reduction right now, first of all, because the last quarter it was actually there in the numbers. We'll, in Q3, Q4 we'll see a reduction in the R&D line on account of that. Small, but it'll happen. We don't see a material increase. I don't think we are gonna get into a deep global clinical development on these yet. In any case, these are really phase one assets. They'll go through that process. They'll go through certain clinical trials before meaningful investment will come up. That is useful. Secondly, on the diagnostic investment. We have not spoken much about this diagnostic foray, but we have already created a kind of a right base, in that business space. Could you share that, okay, what is the kind of, cost that we are currently incurring on that side, and to what extent our margins are suffering because of that? When do you think that we- Yeah. The business is small right now, and that's the reason why we've not been talking about it. We said we'll let it go to critical mass before we really talk about it. The investment is also not heavy, and it's already fully baked into the numbers. We don't see really an increase in the burn that'll happen than what is already captured in the numbers. We'll really let the business grow for the next, you know, one and a half year before we talk about it. It's performing well ahead of our expectations, well ahead of their own business plan as well. I think we need to let it grow for some more time before we really start talking about it. Sure. Just one more question on the, let's say, the India business, which has been kind of relatively subpar in terms of growth. That is one. The other emerging market and the ROW market and the Europe and all those are kind of doing relatively better in terms of growth. On these market, how do you see that, okay, when you are expecting there is a profitable progress for your company as a whole, the role of these market and your aspirations in these market and your strategy. You know, or how, in what manner these markets are going to contribute to your profitable progress of, Lupin? I think we talked a little bit about it, but you know, when you look at other emerging markets, it's roughly 11% of our revenues. You look at the other developed markets, roughly 10% of our revenues. Both growing extremely well. You know, the emerging markets, whether it's Latin America, South Africa, Philippines, grow double digits. It's a profitable business at a EBITDA margin well above the company average. We continue to you know, drive growth in the emerging markets. You know, look at opportunities opportunistically, again, look at what we can help grow them faster. We are looking to you know, find ways and means of growing the emerging markets, other emerging markets to a lot of the entire pie. Likewise, the developed markets are roughly 10% of our revenues, and that's Canada, Australia, you know, and Europe. Out of which Australia is the largest now. I mean, done extremely well. I think that region probably was the fastest growth, you know, part of our business in this past quarter. You know, and one, because we had the integration of Southern Cross in Australia. Two, we had products like Fostair growing the U.K. business and the like. You know, Canadian, German business also has performed pretty well. I mean, the developed markets, I think, really have good growth drivers that have a synergy with our U.S. market. When you look at the inhalation pipeline, when you look at the complex injectables pipeline, when you look at our biosimilars pipeline, there's significant potential in all developed markets. You know, our inhalation plans are global, especially for the developed markets, it's material opportunity. Likewise, the injectables and biosimilars. We expect, you know, the other developed markets to grow very nicely in the years to come as we evolve our pipeline and bring these complex platforms effectively to market. If I can just add on India, you know, that is obviously our largest market at this point of time. We're very aggressive about our growth prospects in India. We're substantially adding to the sales force. At this point of time we are obviously launching multiple new products and new divisions as well. So that double down on India will continue. Yeah. Surya, you might be on mute. Sorry. On Enbrel, if you can tell us whether it has reached some size of $10-odd million kind of size or it is less than that. Some sense on that would be useful. Yes. We'll be well beyond the INR 10 million plus size. Questions from outside. At this point. Okay. Yeah. Thank you. Thank you. The next question is from Tushar. Yeah. Thanks for the opportunity. Just on the Xopenex, if you could just help understand the kind of market share this could be having in Albuterol, as a molecule. It is all of 100% of the labetalol market. Xopenex is labetalol. Okay. Secondly, on the SpeediCap part, like, any particular reason that this after addressing the queries there is to be again refiled as a priority product, refiling? I presume this would have already done, earlier, and that would have what triggered inspections and the other regulatory actions by the U.S. too. Yeah. Whenever you file a response to a CRL, you'll, you know, to get priority review, you have to file for priority review. Okay. I thought it would have been more from the U.S. FDA side to determine whether the product will be taken on the priority basis or not. That's the question. No, I mean, you have to file with a request and then they respond. Okay. Okay. That's it from me. Thank you. Thank you. The next question is from Vivek. Yeah, my question is on Darunavir. Can you please shed some light on the product? Because there are multiple forms, tablet, suspension, et cetera. What exactly will you be launching and will you be having a sole exclusivity on this product or is it going to be shared with some other partner? Thank you. Yeah. It's a material product. It's a tablet dosage form that we will be launching. We have exclusivity. I believe you've assumed that there'll be an authorized generic in the marketplace. Mm-hmm. Needless to say, it's a material opportunity. Would you like to highlight what is the addressable market size when you launch it? I think it's around $300 million, if I'm not mistaken. Okay. Thank you. The second question is on the respiratory pipeline as well as some of the complex injectable products. Can you talk a bit more there? Are these products in terms of planning? How long, for example, are these products away from filing, et cetera? Thank you. We have multiple products in the pipeline on the respiratory front, the MDIs, DPIs and soft mist inhaler. You know, at the forefront will be products like, you know, the DPIs, you know, the Ellipta franchise and the soft mist inhaler, the Respimat franchise. We are in different stages of development, in some case pilot PK studies and in other cases earlier stage. I would expect that we would start filing the DPI and SMI products in the next, you know, I think you'd see one filing in the next year and then couple more the year after. We also have, you know, a few MDI products that we are pursuing, you know, and you will see those also will be filed in the next couple of years. I'd say a number of these, we have 9 or 10 products in the pipeline that are all in active development to be filed in the next 2-3 years. On some of the depot products that you are developing, how far are these products in terms of filing? Yes, we made significant progress actually on the depot front with our first one, Risperdal Consta, out of our Netherlands platform facility. We got a positive you know endpoint study, PD study, that we completed successfully earlier this year in the last couple of months. We are expecting to file that this year. End of this fiscal year. Excellent. Thanks. That is helpful. The last question if I can see. India this year has been impacted because of generic competition in some of the products, especially in the diabetes. How we see the growth next year, so possible to grow in double digits next year? Any color would be helpful. Yeah, we should be back to the double-digit growth next year. I think diabetes will still continue to be suppressed even next year. On the back of growth on the other chronic areas like respiratory, on the cardiac segment itself, even other segments like GI and the like, we certainly would get back to double-digit growth. Thanks. That was my last. Thank you. The next question is from Krishnendu. Krishnendu, I think you're on mute. Hello, can you hear me? Yeah. Yeah. Hello? Hello? Go ahead. Can you hear me? Yes. Hello, can you hear me? Yes, we can hear you. Hello? Hello? I can't hear us. Can we go on to the next one? Yeah. Maybe we take Asif's questions. Okay. The next question is from Bharat. Yeah, hi. Thanks for the opportunity, and good evening, everyone. Sir, just wanted to understand, partly on the cost containment measures. We have, last quarter we outlined that we are going to save around INR 500-700 crores in the ensuing years. However, whatever we have detailed out in terms of, the things which we are, working out to contain the costs doesn't seem to add up to save around INR 500-700 crores. What is the exact reason? Because, you know, just changing the vendor or something will not lead to a INR 500 crore of savings. What exactly we are doing to do that, achieve that number? The savings are across various buckets, you know. There is a portion which is actually going into the gross margins also because of various initiatives that we have taken. While we actually started outlining, in fact, our other cost measures on the, you know, below that line, you know, and we spoke about several things, including idle time, workforce planning. We spoke about trade, we spoke about, you know, stock returns, FTS and the like. Action on all of those have actually been, you know, we have been going through that over the last several months, so to speak. Some of these have actually started flowing into the various lines. There'll be more to come in the days to come as well, for sure. There have been some offsets. You know, essentially, as I was saying, while the workforce planning, for example, there has been a reduction on the salaries, on the manpower costs. There has been shifts from potentially some other lines which have cost that doesn't actually, you know, kind of reveal what kind of savings that we have been able to bring about. Rest assured that the overall target is very much within our reach, and we believe that it'll come out when we actually. You know, all of this will actually pave the way for potentially the optimization that we spoke about. In your assessment, how much we have already achieved and by when we can achieve this exact INR 500-700 crore, whether it is something which will be achieved towards the end of next year or how it is? We went about wanting to achieve close to about INR 750-odd crores. By the end of this fiscal, we think close to about INR 400-odd crores would be achieved. Ramesh, I think the point that you're making is that there are inflationary price increases. Also. There are selling price reductions that happen. Obviously, some of the delivery that's happening right now on the numbers is happening because of that optimization. A good part of that gets eaten away by inflationary measures as well. On the gross margins front for sure, and other parts as well, yeah. Right. Nilesh, last quarter, actually, you mentioned that we'll be clocking double-digit margin irrespective of the new launches. How do you see that comment playing out for us? Yeah. Whether we are or we- Yeah, unfortunately, it didn't work out that way, right? We very clearly thought that we'll get that bounce back in both the cardiac space and the diabetes space. Cardiac has improved a little bit. I think pretty much back to 10-odd%. Diabetes continues basically at two percentage points growth for us. For- I'm sorry. Actually, I was referring from the margin perspective. Oh, I'm sorry. Double-digit margin. Sorry. Yeah. Actually last I think we've said this many times over, right? I think for getting back to double-digit margin, we're first of all already there. We're gonna have sequential increase in the quarters on the margin as well. To get back to that 18%-20%, certainly we see that happening next year, but we see it on the back of the new launches, and we at least see 3 interesting products that we'll be launching in the US in the next year. Obviously next year we get back to that 18%-20% kind of number. We're hoping that it happens in Q1. If not in Q1, I think likely at this point of time, Q2 onwards, we should be at significantly higher margin numbers. I understand. Just wanted to understand, without new launches, can we go back to margins like 12% or 13% odd, or it will be all driven by the new launches? Just wanted to understand. We're already doing that. Without new launches. I think when we talk about sequential improvement in Q3, Q4, we'll get to those kind of numbers without the new launches. That's great. On the part of India expansion, what sort of sales force expansion we are doing? How many sales force we have and how many we are adding? We have about 6,000 representatives right now, about 7,200 people in all. This year we will add another 850 people, 850 representatives, by the end of the fiscal. What sort of cost escalation will that lead to or no? I think it's baked in into the numbers that we've planned. I don't have the number offhand because basically it's really getting those people ready for the next fiscal. In the last two years, we've obviously not added much to the representatives. In the top ten companies we are possibly the second smallest in terms of sales force size, so I think there's significant room for expansion that we see. There will be at least four more divisions that we'll be launching with this new sales force addition. It's fair to say that we will continue to improve our margins in the next two quarters despite this investment, and we believe this investment is material for us to get the India business back to the double-digit growth. Right. Before I move back to this queue, just wanted to clarify one thing. When we said that we are going to get back to 12%-13% margin third quarter and fourth quarter, here we are including Suprep, right? Yes, we are. All right. Thanks. Okay. I think we are on. I think we are out of time. Maybe one last question. Yes. The last question is from Krishnendu. Can you hear me? Can you hear me? Yes, we can. Sorry. Left it last. Just a couple of understanding. The flu season is on in the U.S. It's been the average for the last whatever historic. Just trying to. If you can give us a flavor as to how it would look like in the past, on the historic basis, or how much it could add in the coming, say, year or so, and how long does it last? That is one. Number two, I believe 25% of our Indian revenue is on a licensing basis. So how much of it would come for repricing or rebidding like we lost Cidmus to Dr. Reddy's? If you can let us know, let me know that. Dulera inhaler, which you said is 24. Just to clarify, how big is the market? Those are three questions. Yeah. The first question on the flu season, you know, it's hard to predict given that three years we've had no flu season. Yep. Fair to say that we have started to see some pickup, both in the U.S. as well as what we're hearing from our team on the API side. They're seeing the Cephalosporins business pick up. It's hard to really, you know, put a scale and around it. You know, it's fair to say that we should be able to do better than the past couple of years. You know, this season will really establish what it looks like going forward. Usually, the flu season lasts from, you know, October onwards till April, May. We would expect. Again, it varies from season to season, so we'll see where we end up. We are looking forward to a strong flu season and serving patients in a strong flu season. Is that number baked in, when we speak about the margins or the top line in the U.S.? Is that number we take into account or we don't, we just as usual, we take in the last two years' figures? Yes. Yes, we have. Oh, I see. Okay, thank you. With regard to our Cidmus and the in-license product contribution- He said the saving is 25%, it is not true. It's actually 16% at this stage. I see. You will see this progressively coming down to much lower numbers, you know. Because there is going to be lots of exclusivity coming up over the next couple of years also. Yeah. The four divisions which we launch and two more, we take care of the falls which would happen in the coming years? Yes. You know, so we expect in fact the, you know, growth from our newer products that we are speaking about as well as the in-line portfolio to kind of take care of that. Okay. I see. If you could, sorry, third question even I forgot about. On Dulera, the market size- Yeah. Yeah, Yeah, yeah INR 200 million or thereabouts. Okay. If I can just line up with that. Like it'll be like Spiriva, Dulera and Darunavir which is gonna get launched. When does that get launched? Well, we talked about Spiriva and Darunavir. Yes. Darunavir is a tablet just launched? Sorry, I didn't get that part, so I'm repeating the question. It's Q1 this year. Yeah. It's gonna be Q1 of next fiscal is when we expect Darunavir to launch. We've already got approval and we are first to file on the tablet dosage form. So expect to launch it in time. We are getting launch ready for that product as well. We have diazepam gel, which is a smaller product, but again, you know, significant amount of complexity. So we expect that to be a nice launch for us in the next 3-6 months. We have Nascobal, where we are first to file out of Somerset that we hope to launch in either the first or the second quarter of next fiscal year. Right. Okay. Okay, I get it. Somerset is still on with us, so we will keep the plant running and we'll keep it working just the way it was in the past. We will not. Actually, it is a very efficient plant now. I mean, we had a lot of failure to supply out of there as well because of the compliance issues. Yeah. Now that the compliance issues are behind us, the team there has done a great job in getting the service levels up to 98% plus, the same as India. Mm-hmm. That is what has really got our FTS failure to supply penalty is down significantly that we talked about, you know, in the last hour. The efficiency from the plant has gone up significantly and the new product launches will just add to what the plant can, you know, contribute to the business. Oh, okay. Sorry, I'll just ask one last question. On Tarapur, the API plant, it doesn't have anything to do with the growth in the Goa plant. When do we see that coming through? How does it? How do we tie those things up? They're unconnected, right? In Goa, we'd already cleared the 4 and 3 and 1 letter issues, right? In Tarapur, you know, it's an API plant with no pending. Mm. No meaningful pending approvals. Like we've already clarified, the continuity, the supply continuity remains as is. Okay. Goa plant is not very much dependent on AP. Sorry, this is my mistake. Thank you. Thank you for it. Thank you. Best of luck. Thanks. Okay. Very good. Okay. With that, we will wrap it up. Hope you have got answers to all your questions. As you can see, you know, we are committed to deliver continuous improvement on our business as we execute on our strategic plan. This quarter certainly was a turnaround for us and we'll continue to build upon this, build on the momentum in the next two quarters. There were a number of questions around our cost improvement measures. Some of you know, we have got significant benefit and will continue to do so in the quarters to come, and some of it will show in the margin improvement. Some will go to offset the inflationary pressures that we see. Needless to say, as we get into a period of, you know, getting approvals for some of our bigger products like Spiriva and Darunavir and the like, we expect to get to a very strong double-digit margin, you know, 16, 18% plus in the next fiscal year. We look forward to connecting with you again and look forward to sharing updates on our business in the next couple of months. Thank you. Thank you. That concludes today's conference. You may now disconnect your lines.