Hello, good evening, and welcome to Lupin Limited, Q1 FY 2024 earnings conference call. Please note that all participants' line will be in listen-only mode. 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 the management. Thank you. Over to you. Thank you. Good afternoon, folks. I'm very pleased to welcome you to our Q1 fiscal year 2024 earnings call. I have with me our MD, Nilesh, as well as our CFO, Ramesh. We look forward to sharing our Q1 highlights and outlook for the fiscal year. We are really pleased to start the new fiscal year strong, with continued momentum across our major regions, improving compliance position, multiple new product approvals, and improvement in operating margins. Our India business is firmly back to double-digit growth, and our US business margin has continued to improve. We expect to see material improvement in the rest of this fiscal year as we launch tiotropium and other new products in the US, as well as our sales force expansion in India starts yielding expected productivity from Q2 onwards. Our India business recorded 11.5% growth quarter-over-quarter, 10.2% growth year-over-year, this is after the NLEM impact, as well as the Cidmus brand that we had in the base last year. Cardiology and respiratory therapeutic areas grew better than market, diabetes, which has been a challenge for us for the last many quarters due to loss of exclusivity of key in-licensed brands, is now back to growth as planned by our team. As we look at Q2 and beyond, based on the momentum we have established and the enhanced productivity from the sales force expansion, we now feel confident of consistent above-market growth. Switching to the U.S., our margins continued to improve for a fourth quarter in a row on the strength of a stable base business, continued performance of key in-line products like albuterol, lisinopril, and SUPREP, launch of darunavir, where we had exclusivity on the 800 milligram strength. In addition to revenue growth and better product mix, and therefore better gross margins, we also continued to deliver on reducing SG&A as well as distribution cost. With the approvals of products like tiotropium, cyanocobalamin, diazepam gel, and other approvals now likely due to Pithampur Unit II warning letter clearance, we have a rich pipeline of products to drive revenue and margin growth in the U.S. for the rest of the fiscal year and beyond. Apart from India and the U.S., all other regions performed well, too. In particular, our institutional tuberculosis business and API business did extremely well during the quarter. On the R&D front, our spend increased quarter-over-quarter, driven by patent litigation expenditure on key products, ranibizumab clinical trial, and long-acting risperidone completion. On the NCE front, we were very pleased to receive the milestone from AbbVie for our program advancing into the clinic. Our pipeline is now positioned well to evolve our business into complex generics, with inhalation, MDI and EPI, injectables from Nagpur, and partnered products, as well as complex ophthalmic products from Pithampur Unit II. On the compliance front, we have made progress with positive outcomes on Pithampur Unit II warning letter that will enable us to launch important products like Prolensa, where we are first to file, as well as other ophthalmic products next year. Out of the five sites we had under warning letter, we have now cleared three and continue to make progress on our remediation efforts in Tarapur and Mandideep. We are committed to ensure that we will get all our sites to a consistent and sustainable level of compliance. We are excited to start fiscal year 2024 on a strong note and look forward to executing on our new product launches, continued momentum in India, and operating margin improvement as we grow our business in the year. We expect fiscal year 2024 to be strong, with quarter after quarter improvement in revenues and profitability. With this, I will hand it over to Ramesh Swaminathan for a deeper analysis of our performance. Thank you, Vinita. Friends, welcome to a refreshing set of numbers. On the last occasion that we met, we did promise you that our results and margins would get to be better in successive quarters. We have endeavored to live up to that guidance. On the sales front, sales for Q1 FY 2024 came in at INR 4,742 crore, as compared to INR 4,330 crore in Q4 FY 2023, a growth of 9.5%. On a year-on-year basis, the company registered a growth of 31.6% for Q1 FY 2023 sales of INR 3,602 crore. The sales of Q1 FY 2024 includes $25 million income from AbbVie, with the key milestones of initiation of phase I clinical trials. Excluding the same, our sales was INR 4,537 crore, which represents a growth of 4.8% quarter-on-quarter and 25.9% year-on-year. Our sales for this quarter has been robust across all our geographies. The US market registered a growth of 3.6% quarter-on-quarter, and 49% year-on-year in LC terms, in local currency terms, whilst the India branded business registered a growth of 11.5% quarter-on-quarter and 10.2% year-on-year. The API business registered a growth of 4.5% year-on-year and 32.1% quarter-on-quarter. US business. During the quarter, the US business registered a growth of 3.6% in USD terms on quarter-on-quarter basis, as sales went up to $180 million from $174.5 million in the previous quarter. In Q1 FY23, the sales were only $121.3 million. Products in Dynavige, SUPREP continue to in this robust performance. We are continuing to maximize the high-value products, resulting in sustainable and profitable US business. India region. India branded formulations business sales grew by 11.5% over quarter-on-quarter, and against previous year, the sales improved by 10.2%. Our growth, excluding Cidmus and NLEM, is a robust 13.6%. On the API front, API business sales grew by 4.5% on quarter-on-quarter basis, due to higher 7-ACCA sales as core cephalosporin API sales recovered handsomely during the quarter. Similarly, on year-on-year basis, sales growth was 32.1%, led by higher sales, thanks to a good demand pickup in cephalosporins API. Gross margins. Q1 FY 2024, gross margins are 65.4% and at 63.8% ex-NCE income as compared to Q4 FY 2023, gross margins are 59.6%, a variance of about 6.8%. The improvement in margins quarter-on-quarter is driven by U.S. as well as by India. In the U.S., we had NPL launches, better mix, higher price realizations in a few products, and reduction in freight expenses. The margins also expanded due to higher, better mix, higher and better mix, both in India region and API, apart from other reasons. We do expect this margin to sustain. We improved significantly from last quarter, from last year, quarter one, where our gross margins are 55.3% to the current levels of 63.8%. The improvement is gain, in gain was driven by US margins, as Q1 margin last year in, in US was an all-time low. Improvement in India and API margins are also major contributories. Employee benefit expense. Q1 FY 2024 is INR 853 crore, which translates to 18.5% of adjusted sales, we service INR 773 crore in Q4 FY 2023, which translates to approximately 18%. The same was INR 779 crore, or 24% of sales in Q1 FY 2023. The quarter on quarter increase is mainly due to annual increments, which is a tune of 7.5% across the globe. Manufacturing other expenses. Q1 FY 2024, manufacturing other expenses came in at INR 1,472 crore. We serviced INR 1,303 crore in FY 2023. These expenses were reported at INR 1,192 crore in Q1 FY 2023. The quarter on quarter increase is on account of higher spends in R&D, increased consultancy charges for nitrosamine-related impurities, increase in selling and promotion expenses in India due to sales force expansion. The same reasons were also responsible for the year-on-year increase. R&D. R&D is INR 367 crore in Q1 FY 2023, as compared to INR 101,280 crore in full year FY 2023, which is 7.9% of sales. The increase in R&D quarter-on-quarter is on account of investment in newer platforms of biosimilars and injectables. EBITDA. Our EBITDA came in at INR 879 crore in absolute terms, representing an 18.5% margin. Excluding one-time NCE income, Forex and other income, our EBITDA margin is 14.4% or INR 651 crore, reflecting an improvement of 50 basis points in comparison to previous quarter. The improvement in EBITDA is primarily driven by higher gross margins, partially offset by higher expenditure on R&D, higher employee cost due to salary hikes, and higher PLI income in the previous base quarter. The effective tax rate was 18.9% in Q1 against 20 ATR of 36.9% for the whole of last year. The lower ATR is primarily on account of U.S. subsidiary, which has seen a turnaround, offsetting the net operating losses of prior years, and the ATR is also lower on account of second tax benefits. The ATR for the full year is expected to remain between 21%-22%. On the balance sheet front, operating capital, working capital was INR 5,195 crore as at June 30, 2023, which translates to 103 working days, operating days. This is reduced from 119 days as at the previous year end. Net debt as at June 30th stands at INR 1,310 crore, which has come down from INR 2,500 crore at the end of FY 2023. We've done repayment of packing credit loans in India and also retired some debt in Australia. With this, we could open the floor for discussions. Thank you, very much, sir. We will now begin the question and answer session. Please raise your hands from the participant tab on the screen to ask questions. We will wait for 30 seconds for the queue to assemble, so bear with us, please. Yeah. The first question is from Damayanti Kerai. Please go ahead, ma'am. Yeah. Hi, good afternoon. My first question is, can you update us on your launch plan for Spiriva in the U.S., in terms of preparation, when you are going to launch it, and also your view on the market, specifically, market ship, which could possibly happen from Respimat to HandiHaler? That's my first question. Yeah. We are actively working towards a launch this quarter. We expect to launch it later this quarter. Well, time will tell if we can really switch share back from Respimat to Spiriva. I mean, at this point, we believe that we will be the only generic in the marketplace. We haven't heard of an authorized generic launching, so we will look to really find a way to substitute as much as possible to a generic. Okay. Second quarter launch towards the end, that's your target for this particular product? That's right. Okay. Ma'am, earlier, I think you mentioned the addressable market size for you is around 1 billion, or, like, what is the addressable market you, you'll be working for, this particular launch? Yeah, it's, around that $1 billion size. That include both the HandiHaler and Respimat, right? It's a total market, not only the HandiHaler part. No, the Respimat was on top of that. It's on top of that one billion market which. That's right. you are looking. Okay. My second question is, your other expense trend. Ramesh Swaminathan obviously mentioned what has led to quarter-on-quarter increase as well as year-on-year increase. Should we take the current quarter number as the base going ahead, or we expect further increase in this number? I'm asking specifically because you have been talking about cost-saving goals, et cetera. Where we can see benefit of cost saving on, say, other OpEx, like other operating expense or some other line item? Yeah. Let me explain. You know, we do expect, in fact, the gross margins to kind of sustain at the current level, so it is certainly going to be elevated. But you would also appreciate, we've been talking about, in fact, a higher quantum of investments on the, on the sales and promotion front, especially in India. We've added about 1,300 people in, in Q3, Q4 of last year. You know, so obviously, you know, this will also be reflected in higher expenditure on account of that, which will, you know, then a commensurate increase in terms of the sales itself. This particular quarter, there has been increase in nitrosamine spends on account of nitrosamine quality assurance and the like, on account of compliance. Of course, there is, you know, an R&D spend, which is, which is on the higher side. We expect the R&D to kind of sustain at this, this levels. Of course, there has been a provisioning for non-litig- non-product li- related litigation. That's kind of one time. The, the parts of this, which will certainly continue into the future, but what we actually had guided for is successive increase on the EBITDA front, you know, that's what we would be concerned about, and you will certainly see this in two, three, and four. Okay. My last question, since now you are more positive on growth outlook ahead and then profitability also, so do you inch up your margin guidance for FY 2024? Earlier, you mentioned you'll be you'll be somewhere like mid-teen margins for FY 2024, with exit rate of high teens. Yeah. What we had said was, perhaps in the fourth quarter, you could see an exit rate of over 18%. We're sticking to that, and we are confident of actually exceeding that. You can exceed 18%+, or say, high teen margins towards the end of this fiscal? Yeah, for the whole year, yes. sorry, Ramesh Swaminathan, I just... Not the whole year. End of the fiscal year. 18% and above is what I said, yeah. Sorry, sorry to interrupt, but, 18% for the whole year, or? No, no, 18% in the, the fourth quarter, and above the, you know, 15% mark, above whatever that we guided for in the past, for the full year. Okay, thanks. Thanks for your response. I'll get back. Thank you so much, ma'am. The next question is from Neha Manpuria. Please go ahead, ma'am. Yeah. Thanks for taking my question. My first question is just a follow-up on the R&D that we mentioned. Ramesh Swaminathan, when you say, you know, we would likely to sustain it at this level, does it mean as a percentage of sales, you know, this is what we should be factoring in? On absolute level, this is what we would continue to spend. A follow-up on that is on the biosimilar pipeline. I think, Vinita, you called out that we are, you know, trying to build out a biosimilar injectable pipeline. If you could give us some update on when we can see monetization from this, both on the biosimilar and in the injectable front. When can this be a meaningful contributor? On the first part of the question, let me clarify that what we expect to kind of sustain is, is an absolute amount. As a percentage of sales, that potentially could come down because we expect the sales to certainly go up. Second part, Vinita could answer. Yeah, on the biosimilars pipeline, as you know, so far, we have commercialized, etanercept, and we continue to work on launching etanercept in new markets. That's on the, on the plan, on, on the cards for the next couple of quarters with, you know, partnership, through Biostress, now Biocon. We continue to work with the FDA to try to get clarity on our inspection outcome. At our Pune, you know, site for Pegfilgrastim. We hope to be able to get clarity on that soon. The R&D that I'd spoken about was, you know, the clinical trial spent on ranibizumab, that we had incremental, you know, spend this quarter versus the previous. We continue to pursue ranibizumab, in particular for the U.S., as well as, through partners in, into other markets as well. That's on as far as the biosimilars go. On the injectables front, we are actively adding to our pipeline right now with both 505(j) as well as 505(b)(2) opportunities. With the Nagpur approval, FDA inspection and approval, we now expect to get multiple product approvals out of the site for the US. Certainly at the later in this fiscal year, we hope to be able to get products like Glucagon onto the market. you know, in this last quarter, we launched Thiamine, which was out of a partnership with. Caplin Point. Caplin Point. Thank you. We have a combination of both, internal products as well as, partner products, that we expect to help build the injectables business starting this year, but more so, also, into the next fiscal year and beyond. I mean, we have, within our pipeline, a large percentage of, the products that we are pursuing now are injectables. Yeah, that's helpful. Just on Spiriva, you know, what sort of ramp-up should we expect for Spiriva? Would it be, you know, given that we are the sole generic, you talked about there not being an AG, so would this be a much sharper uptake versus what we saw in albuterol? Should we assume a much more gradual uptake, you know, in the generic? When we looked at the analogs, when we look at the other, you know, DPI, in particular, Advair, I mean, the substitution that we saw was a ramp-up over time. Mm-hmm. You know, of, starting, at 25%, 30%, and then building up to the 40%+ level. So what we are planning for right now is a similar kind of substitution rate, hopefully enhanced with some of our efforts. We have, you know, active, marketing efforts in terms of HCP awareness, pharmacy awareness on the generic, but, you know, still, potentially gonna be looking at a ramp-up over the next couple of quarters, and certainly over the next, two years. Sorry. you think we get to a fair share, you know, by middle of next year, the 40% substitution that you're talking about? We hope so. Okay, thank you so much. Yeah. Thank you so much, ma'am. Before we move on, this is just a reminder to everyone to please raise their hands on the participant tab, yeah? The next question is from Surya Patra. Yeah. Thanks for, for this opportunity, and congrats for the good set of numbers, ma'am. My first question is on the authorized generic possibility in Spiriva. I think in the previous quarter, you have been anticipating when there, but so far there is no development on that side. Is it fair to believe that there is no authorized generic even next year kind of timeline? It's hard to predict that. You know, we would hope, but we can't really predict what the brand is gonna do. I mean, at this point, it looks like, you know, they're not planning to launch authorized generic imminently. You know, based on the substitution rate, maybe they will wait to see next year where we get from a substitution standpoint to determine whether they launch or not. The positive for us is, we had expected an authorized generic, and we, we don't expect it anymore, so our launch quantities, our, you know, supply chain planning has been geared towards a higher, higher volume, obviously. Okay. Okay. Do you find any rational or why there is not a authorized generic? Basically, a kind of sizable opportunity. Is it that there are no... since we have not seen any filer for this, so hence the scope of authorized generic is not coming that way. That is a way to think, or how is it that? I think it's just, given that we are a sole generic on this, and substitution is going to be over time, perhaps the brand is thinking that they can maximize the brand value- Okay. while we ramp up our share. You know, that's the way I think about it, you know. Okay. Yeah. Yeah, I mean, additional authorized generic will be additional competition from a pricing perspective. Sure. Yeah, yeah, of course. My second thing is that, on the register side, whether you have already seen the kind of a meaningful, or large portion of the anticipated benefit in the quarter, or that is to be seen in the subsequent period? No, we've seen a good amount of, benefit- Mm-hmm. -in the quarter, in particular for the 800 milligram strength, where we were exclusive. Okay. We had a load-in into the quarter, but we'll continue to see it in the next quarter as well. Sure. Just for the remix, if you can just clarify, what is this tax benefit for from the Sikkim side that you are getting? Whatever the tax rate guidance that you have given, that is only for the current financial year because of this Sikkim benefit and may not be there in- No, no, no. next year? It will be sustained. Essentially, what we were saying is there's a higher quantum of sales coming from Sikkim, and there's, of course, the benefit of a tax-free regime out there. The second benefit is essentially because we are now profit, generating profits in America, and previously that was not indeed the case. To the extent we still have NOLs of a large quantum, and the quantum of tax that we actually pay on the profits would, would be to that extent, about 80% is still exempt because the NOLs carry forward, and we pay only on the balance and to that extent. Of course, there is state taxes as well. Okay. The total, absolute quantum of taxes paid, you know, across Lupin would potentially be lower because of all of that. Okay. Nothing in a lower ETF. When you are saying the profitability of US has gone up, so that is excluding of this milestone payment? Yeah, inclusive. Yeah. Absolutely. Excluding. It's I'm talking about operating pro, you know, based, again, on the portfolio that we have out there. Okay. just last one question, ma'am. see, in fact, sometime, like, in a, media communication, I think you, you indicated about, even entering into the basic research kind of activity, so discovery research, and potential spending that side. So can you update on that? See, initially, there was a kind of thought process that we will be hemming of our discovery research. Then in the interim, there was a kind of say about potentially looking into that again. Hence, at this juncture, what is the kind of final, thought process there, and what is the kind of investment likely beyond the R&D spend, what we are talking about? Actually, we have curtailed our spend significantly on the NCE front, as I think we shared even last quarter. You know, we had a discovery effort that we pretty much closed down, which was the bulk of the investment, and we decided to pursue the three pipeline programs to see if we can really, you know, get any signal in terms of efficacy on the programs. You know, in trials that we're doing in India at a fraction of what it would cost us in the U.S. Right now, the effort is, you know, pretty low single-digit in terms of millions of dollars. You know, one program in the clinic in Phase one. You know, if we see positive results, really it will lead to licensing effort or an effort to finance it through external funding. You know, we don't have plans to commercialize these, the NCs ourself or take on major risk on the NC front ourself. Okay. Okay, sure. Just last, ONE, bookkeeping number question. See, Sir, can you just clarify, what is this consultancy fees that you have indicated, means quantum-wise, for the quarter? We don't want to actually talk about quantum. You know, essentially, this is, essentially relating to, you know, QA testing for nitrosamines and the like. This is a step up on, in fact, what we spent in Q4, and that's what is recorded out here. I'm only saying that this is not going to sustain into the long term. You know, it'll perhaps... Okay. peter off over time. Okay. Well, there is also- Not a meaningful- We're working towards remediation on the nitrosamine front, and the industry has a goal of trying to get October this year, end of this year, as much as possible. You know, the FDA, and the other regulatory authorities have set guidelines on the nitrosamine front that we are trying to meet. Therefore, the spend is ramped up right now, but it should come down in the second half of the year. Sure, ma'am. thanks a lot. wish you all the best. Thank you, Mr. Patra. We'll take the next question from Mr. Krishnendu Saha. Hi, can you hear me? Yes. Yes. Yeah. Thanks. We are already six months into the year, practically, and we guided for 18% exit. What is the view on... How do you see that 18% being sustainable over FY 2025? That's question number one. Vinita, are we supposed to launch Spiriva at the end of the quarter? It's already August. Have you started shipping some quantities out there? Yes, we have. I see. we already have production well underway and shipments as well, well underway. Okay. To your first question on, you know, what gives us the confidence of 18% exit, I mean, just based on where we are right now and the products that we plan to bring to market, you know, Spiriva in particular, will be a material one. Apart from that, we have cyanocobalamin, we have diazepam, smaller products, but then later in the year, we also have products like Prolensa, where again, we have exclusivity. At the end of this fiscal year, we expect products like Mirabegron, where based on the litigation outcome, we think that there's an upside opportunity. All of this put together, you know, in the current year, plus then leading into the next fiscal year, you know, gives us the confidence that we should be able to sustain the momentum on the margin. I see. Yeah. we could we could sustain the FY 24 exit margins into 25? ... the launches, and perhaps exceed that also going, going forward. Yeah, everything in that direction. Vineetha, when we are launching come, come the end of- Sorry, we didn't catch that. Hello, can you hear me? Yes. Yeah. I'm just trying to understand the launches we are preparing for. Are we preparing for a normal, a soft launch, or we are going to have a pretty... We're going full force? No, we're going full force on, are you talking about tiotropium in particular? Yeah, yeah. Yeah. Yeah, we are going full force, but we expect the generic substitution rate to ramp up over time. Yeah. I come back in queue. Thank you. Okay. Thank you so much. The next question is from Saion Mukherjee. Yeah. Am I audible? Yes, you are. Yeah. Yeah, thanks. Vineetha, can you, you know, you know, on the Indore site of getting cleared, how should we think about- Sorry, you're going in and out. We can't hear you now. Is it clear now? Yes. Yes. Okay, sorry for that. On Indore, now the site getting cleared, how should we think about launches? Anything which you, you know, see meaningful still there that can come out of Indore? Also would like to hear on, you know, complex assets, where are we in terms of development, if you can give us an update and when you expect some of the key filings to ha-ha, you know, happen. Yeah. You know, out of Indore, in particular, ophthalmic products, we see a nice opportunity around in five or six products that we have filed from the site. Some of them were just pending because of facility, which now should happen. Like, Prolensa is the first of the pipeline opportunities that you know, really is an upside for us this fiscal year. The other, you know, we have, like, products like brimonidine, products like prednisone, you know, like five or six products that are meaningful out of the ophthalmic facility. In particular, now, with the shortages in the marketplace on the ophthalmic front, we see a nice opportunity for these products. We should have Prolensa this year, and we think, we think that, three or four products are gonna be next year, next fiscal year. To your second question on the evolution of our pipeline into complex generics, in on the inhalation front, of course, MDIs and now with Spiriva DPI, you know, nicely expanding our, our, portfolio franchise. We are actively working on other DPI platforms. Ellipta in particular, we have made significant progress. We hope to report at the end of this fiscal year, a material milestone on that front, on one of our products. On Respimat also, we have made significant progress. You know, we'll, we'll make more so in the next fiscal year. Ellipta, we have made significant progress, in, you know, so far. On the MDI front, there are a couple of products that we are pursuing. We are actively also taking a look at, the whole move towards green propellants in the U.S. and Europe, and working on, on both, you know, the current product, 505G to the current product, as well as, you know, the novel propellant versions of the MDIs that can enable us to potentially have some differentiation and exclusivity in the marketplace. I'd say that, strong progress on the DPI front and Respimat and some progress on the MDI front. Especially given the green propellant move, we are watching that carefully, so that we don't have to, you know, we make an investment and have to redo a product completely. That's on the inhalation front. On the injectables front, as I mentioned earlier, we are adding to our pipeline very actively right now. We have multiple, you know, 505G products and 505(b)(2) products that we have added to our pipeline already. 9 products in active pipeline this year have been added to the injectable pipeline. You know, apart from that, I'd say, I think on the, back on the respiratory front, we also have nasal sprays that we are actively working upon. Lastly, I'd say, you know, on the implants and devices, we have made good progress on products like Nexplanon and Mirena, you know, where we have, you know, developed, you know, e-equivalent versions of the products and are actively working on the clinic right now. Okay. thanks for that explanation. you know, I mean, when I look at the R&D spend today, let's say, you know, you'd be doing, say, INR 1,400 crore annually, is it possible to sort of split up, like, how much approximately you're spending on all these inhalation assets and, you know, biosimilars? if you can, you know, take us through some split on the R&D front? you can cockpit essentially for, you know, more than 50% would potentially be for, the complex ones, you know. Right. I have the. Yeah, I think it's, like, 20% on inhalation, 20% on injectables, roughly. Really. 10% on bio-biosimilars... Yeah. The like. Okay. Okay. Just one last question, if I can. You know, so you've got $25 million from AbbVie. I think couple of years back, we had, like, two large deals signed. Are there any milestone payments that we can now... I mean, do we have some visibility this year, next year? I mean, is there any visibility on the licensing income that you can get on these out licensing deals that you had? I think it's gonna be a couple and, couple years out to the next milestone. I think what's happened is the risk profile of the product has improved significantly. Mm. Potentially, the probability of a future milestone goes up. It's gonna be a couple of years out for the next milestone now. Understood. Okay. Thank you. Thank you very much. Thanks, Sean. The next question is from Kunal Dhamesha. Hey. Hi, thank you for the opportunity, and congratulations on the good set of numbers. First, on the product, this Medtronic on the litigation front, is this the new patent that the innovator has kind of, you know, sued the generic filers over or this is an old patent litigation? So there is a new patent that the innovator is suing everybody on, but we feel confident about the outcome of that. Okay, perfect. Would you kind of, give some market sizing for that product? It will be It's like a sizable, it's a $2+ billion product, so significant. Okay. Do we have an exclusivity here, or it's going to be a multiplayer launch at day one? We believe there's gonna be a limited number of players day one. Perfect. you know, since we have talked a lot about the injectable business or the injectable pipeline, so do we have, you know, some, some form of aspiration as to, you know, where we see this injectable business, probably two year, three year down the line, for the US market? We do. We do have a size. You know, building it to a multi-hundred million dollar business. There's still work to be done to get there. Mm-hmm. Mm-hmm. I mean, our current pipeline gets us to $100+ million, but. Okay. you know, we'd like to be well above that in the next five years. The pipeline you're talking about is a filed pipeline and not the pipeline under development? Um, the- Would that be the correct assumption? Near to, you know, products that we expect to launch within the next five years. Already, that gets us to $100+ million, but like I said, you know, we'd like it to, like to grow it to a different level. From the plant perspective, which are the important plant for this 100+ million opportunity? One, I think is... It's just Nagpur. Oh, Nagpur. Okay. Nagpur. Yeah. Okay, perfect. You know, did I hear that correctly, that we have completed our trials for the Risperdal Consta? Yes, we have. Successfully. Okay, when are we planning to file that? Next quarter. Any probable timeline in terms of approval for these kind of, you know, long-acting injectables. We hope that the agency will, just given that there is no approval, hopefully the agency will engage with us on trying to get the product approved sooner rather than later. We're expecting, you know, after we file, two, 2+ years or so to launch. Perfect. Last, if I may, on the, you know, future inhalation pipeline, where we have talked about the Ellipta product. Right, I believe the Ellipta product segment is more like DPI, and they are also like more than one API, right? That, that is where last time we hit a roadblock in terms of generic Advair. Yeah. you know, which was a mix of two APIs. You know, what gives us confidence there? you know, what has changed? What have we learned from the generic Advair, which would help us, crack these products? Yeah. generic Advair certainly was a big challenge for us, partly due to the fact that it was not under our roof. We were doing the development and the partnership with, you know, Celon and Poland, which made it a challenge for us. This is being developed in, Coral Springs, you know, our team is excited about the development. They've made progress already on the dual formulation, you know, the two drug combination, and are working on the three drug combination right now. They've, they've, you know, the learnings that they had from, Advair, they certainly have applied here. We feel good about the fact that, we have, you know, a, a good, prototype in place, to scale up. Sure. Thank you and all the best. Thank you. Thanks, Kunal. Next question is from Mr. Shyam Srinivasan. Good evening, and thank you for taking my question. Just the first one on the U.S. generic pricing environment. We've had multiple companies during this quarterly season talk about an improvement slash stabilization. You know, the only challenge that I have is many of them have one-off opportunities in terms of special products that are there as well. You don't have that, at least currently. I just want to understand how, what are kind of the trends you're seeing on the base business, and maybe you could elaborate around shortages, inventory changes that are happening, or, you know, any new business opportunities. Just the entire piece and how Lupin is probably seeing things at this point of time. Yeah. Certainly, has changed a bit compared to the last few years. We see, you know, price erosion really at a low single digit percent at this point. Mm-hmm. on in-line products on our base portfolio. That's as a result of the fact that over the last couple of years, there's been so much pricing pressure, it pushed a number of companies out of markets. I mean, we got out of a number of products, you know, that we had announced last year that didn't make sense. They were not economically viable anymore. Likewise, a number of our peers got out of products, and I think that has led to drug shortages. Right now, drug shortages is a huge concern that we've heard from, you know, folks on the Hill in the U.S., as well as from the FDA, as well as other stakeholders. I, I think, the, the fact that it has become such a tough gene- environment for the generic industry, finally has struck home and, has led to this price stabilization, which, we hope will, will continue and, going forward. Vinita, the low single digit, you know, there's base of, say, last year, which is making it, right? Do you think, like, the next nine months of the, of the fiscal we'll see similar? Or you think this is transient, and we go back to given how the whole GPO structure is, that, you know, we will go back to higher price erosion, or you think this is sustainable? Just repeating the question again. Yeah, we, we hope it's sustainable. It's hard to predict. inline portfolio, right? Yeah. To clarify, for example, today we have exclusivity on..., whereas that, you know, as more competition comes into that- We'll certainly see. We will see erosion there. You're saying for the inline- For the inline products, we think that it should be low to mid-single digit. Got it. Very helpful. The second question is on the India domestic piece, right? I think earlier guidance was for growth to come back Q2, so we have seen it one quarter earlier, perhaps. I think, if you exclude Sigmus, if I remember the opening, it, we had 13%, right? What's happening? Right. Yeah. What is happening right here? I know, I know we have added quite a few MRs over, over the period, so just want to understand, what are the checkboxes that are happening right in the India piece, and what's the outlook for the remainder of the year? Yeah. I think it is more what is going wrong. Just to clarify, it was 13.6%, if you adjust, but 10.2% unadjusted. You know, I, I think it's just the focus, right? Like we said, the real main point, pain point was the in-license portfolio, which was facing exclusivity challenges, certain products like Sigmus, that went out of the portfolio as well. The core business was growing at a very healthy rate, and we, we always guided towards that, and you just see that reflection coming out now, you know. This is, you know, I, I think we still have to see productivity gains from the representatives that we've added. We... Some of those divisions, most of those divisions have already started performing, but you'll see even better results from that Q2 onwards. I think this is just the core business kicking in. You know, respiratory, we're growing pretty much at double the market rate. Cardiology, we're growing ahead of the market. Diabetes, we are growing, which we were actually degrowing before. I think it's the three core therapies that are focused on chronic, which is coming through. We're doubling down on India, from our perspective, you know, I think the representatives have resulted in 6 new divisions. There's a new extra urban division that we've launched as well. I think there's a lot of really good energy in India, and we would certainly expect this growth rate to continue. Yeah, yeah, listen, just last follow-up, and I'll stop after that. Any other products that are going off patent in the innovative portfolio that we may need to be aware of in the next three, six months? Yeah. I think we have Ondero, which will go off patent next August, right? This August, right. Ondero is gonna go. I think a lot of that is, has, is already reflected in the reduced pricing that we have. There'll be a little bit more, and I believe that in 2025. ... 2026, when you have two products. We have one other product as well. Mm-hmm. This was kind of the mainstay, the, the big products which are going at this point of time. We, I, I, I think You know, I, I don't think we'll get into a position where we see, you know, very tepid growth in India again, but, you know, there are, there is gonna be lumpiness in some of the quarters as some of these exclusivities go. We stick to the kind of double digit, at least it was from Q2, last time we spread, but full year now, you can do double digit in India, looks like. Yes, absolutely. Great. Thank you, and all the best. Thank you, so much, Shyam. The next question is from, Harsh Bhatia. Yeah. Hi, good evening. Am I audible? Yes. Yes. Yeah. Thank you. Just one quick clarification in terms of the injectable portfolio that we have been talking about for, let's say, the expected filings and the expected launches, without getting into particular products. Would it be fair to assume that most of these, or a large part of these, have been filed through, the Nagpur unit, Nagpur unit two, because, that's the injectable, the main injectable facility, right? Yes. Okay. For the next one or two years, whatever is there in terms of the launches and expected filings would be through Nagpur unit two? Well, also some partner products. Okay. All right. Thank you. Thank you so much, Harsh. Since we have addressed most of the questions, we'll just wait for 10 seconds for any further questions to be taken, because we can't see any raised hands currently. We'll wait for 10 seconds. You've got a few there. Hmm. Sahar Krishnendu again. Okay. Yeah, Krishnendu, you can come in. Hello? Go ahead, Krishnendu. Krishnendu, are you there? Yeah. Yeah. Just on the India piece, your strategy, we have 9,100 marks right now. How do we see it going, and do we see like, I'm just looking at Mankind and seeing they are high into Tier 2 and beyond. What kind of do we look into any space like consumer health or something like that? Is there any other differential strategy which we're doing from currently, something different from what we're doing right now? Right now, I think most of the representatives that we've added have resulted in new divisions, and the focus has been on decluttering and, and focusing on key brands. Like I said, there is a next urban pilot that we have started as well. That is something that I would hope that we would scale up, but, you know, we'll have to go through that and see, see how it does before. The primary focus at this point of time has been decluttering and focusing on building bigger brands. We're not- it's not that much of regional expansion at this point of time, but we certainly would like to hope for, for more going forward. We don't see big expansion this fiscal anymore. Obviously, we want these things to stabilize. There's possibly one more division that we're gonna launch in this financial year, but then after that, we would programmatically expect to add 500 odd representatives each year. Any missing therapy areas which we like to acquire or something? We are heavily into chronic, with diabetes- Yes. Amongst our peers, we're obviously, you know, heaviest on the chronic side, but we're not number one in any. I think, I think there's significant headroom to grow in respiratory, in cardiac and diabetes. I think, you know, women's health is shaping up very nicely. Yeah. GI is shaping up very nicely, even, even areas like ophthalm picking up. We're, we're severely underrepresented in oncology, in the CNS space, so a lot of headroom, from my perspective, and, you know, that-that's what we're going after. Right. Respiratory is INR 1,000 crore for us right now, and we should cross the antibiotic and the CV space by, say, another one or two years? Yeah. I think, we were already at the INR 1,000 crore mark on both of those. Respiratory was the last to get to that number. You know, certainly there's a lot more room to grow. We're still number three only in both of those therapy areas, in cardiac and in diabetes. Mm-hmm. Thank you. Thank you. This is the clinical direction. Thank you. Thanks, Krishanu. Next question is from Alok Dalal. Hi. You incorporated a subsidiary, Lupin Manufacturing Solutions, for undertaking contract development and manufacturing activities. What is the plan here? What kind of investments will it require? Let's say, isn't there a case for conflict of interest here with the generics model that you have? I think we've just incorporated it at this point of time. I think it's a thought that we have, but I think to enable anything in life, we needed to first incorporate a subsidiary to really consider any next steps at all. There is an opportunity on API, which I think large generic companies are not doing well with. You know, I think several of our peers have shown good progress in this front. There's a whole bunch of new players who, you know, in the API and intermediate space, which are not large generic companies. I think the intent is that there is an opportunity to be chased here, but I, you know, I think we're talking a little prematurely. We still need to finalize our internal plans before we have anything more here. We will come back to you guys once we finalize our plans. Nikish sir, just one question on capital allocation. With diagnostics and then with CDMO, wouldn't it be a better off opportunity, if you invest in the core business itself? Yeah. I, I think the lion's share of our incremental capital allocation is going towards the India region and into other geographies where we expect high growth. That will continue as far as the parent company is concerned. As far as, you know, just this kind of subsidy was concerned, eventually, you would obviously go for external capital on something like this as well. It's not your own capital alone that would get allocated there. Okay. Okay, thank you for taking my questions. Thanks, Alok. The next question is from Gagan Thareja. Yeah, I, I hope I'm audible. You are, you are. Yes. Yeah. The first question is on the gross margins, where you pointed out to an improvement in mix there. Would softer API and solvent prices also have benefited? Could you enumerate what? Yeah, in a general sense, yes, you know, there has been, in fact, softening of prices across, except for excipients, others have actually been coming down, API, KSM, chemicals, and solvents for sure. There's, of course, a bit of a lag effect because, you know, it's been coming down, and there is, of course, some of it, it will be captured in the cost of production, but not necessarily sold in, of course, the quarter itself. Will certainly, you know, give us a, a benefit in the, in the quarters to come. Thank you. Do you also avail of any PLI benefits, and if so- Yes. Can you enumerate the number? It's there in the other operating income, you know, so there's, you know, so there, that's a component, that is there. And this quarter, the, the emerging markets piece has been slightly weakened, probably not just for Lupin, for some of the other companies as well. Yeah. There are two or three parts there. Essentially, the first was, you know, South Africa has had a, a bumper Q4 in anticipation of a price hike in Q1, and that obviously, it, it in fact subdues the results, the outcomes for, for Q1 itself. Likewise in Philippines. In Mexico, in fact, an issue in terms of the plant, which will, which will get sorted out. All of these actually, you know, brought down the overall result in the first quarter. How should we think of this piece for the year? I think it will pick up, you know, so because it's actually, this resonates by, in fact, in past patterns. Philippines and South Africa, you know, we have seen this, this trend kind of, persist over, over years. Of course, you know, Mexico, the plant issues that get sorted out. It's just a question of time. Last one on SUPREP, do you, do you see yourself maintaining your current run rates going ahead, or, or, generic competition will materially impact SUPREP going ahead? So far, we have sustained the levels over the last couple of quarters and haven't really seen any imminent additional competition coming in. Any, any take, do you, do you see this, for certain happening in the second half, so generic for the generic end? It's hard to predict. Okay. Just, we just don't see anyone coming in the next couple of weeks or months. Thanks. Thank you. Thanks. We'll take, last two questions. Yes, sir. Thank you so much, Gagan. Vibha, you can go next. Vibha here. Vibha. Can you hear me? Yes. Okay, just a question regarding the expansion into a adjacencies, you know, regarding digital therapeutics or even diagnostics, or as you just spoke about, CDMO. Are these, you know, opportunities that you are really far off that you're looking at just as a de-risking, or is it like you have serious plans for these new segments? I think the core India prescription business is gonna be, you know, is the, gonna be the main focus area. As far as diagnosis is concerned, we're already starting to see some synergies with the core prescription business. The digital, again, feeds into our expertise in the cardiac space, and it is an extended offering from, from that front. You know, if you want to do a meaningful play into CDMO, then yes, that would be, that would be a different play compared to the other stuff that we would do, but we obviously have capabilities for doing that. No, I think we're, we're, you know, as far as the core business model is concerned, we are extremely upbeat on India. We're extremely upbeat on the complex generic story in the U.S. At some point of time, we want to build out the innovation piece all over again. The emerging markets have always been double-digit growth markets for us, with, you know, pretty much, you know, better than co- company average EBITDA. I think the core focus remains on the, on the business as is. We've got plenty to do in this space. Okay, thank you. Thanks, Vibha. For the last question, let's have Saion Mukherjee back. Yeah. Thank, yeah, thank you. Thank you for the follow-up. Just two quick question. You know, firstly, on the API piece, you know, you mentioned some, you know, that it's kind of coming back, so how should we think about that, and what is really driving it? Is it the, is it the cephalosporin piece? If you can just, you know, highlight the dynamics there, and what your, what are your expectations, going forward on API? Sure. So it's actually been depressed for the last two years, and, and that's the part that's coming back. We actually see that bounce back, but that's primarily in the Cephalosporins. Our, our big categories are the anti-TB products and Cephalosporins, so that's where that would come from. We, we definitely see it picking up, not across the board, but certainly in, in certain products we, we see it picking up. I think it's come back to that level. It's kind of gonna stay at this level. It's not gonna keep increasing from this level. That increase will come from new products, and we, we have a portfolio of new products within our API portfolio. You'd appreciate that Penicillin G prices are still rolling at a pretty high over the last few, several quarters. Right. Right. The last one, Vinita, on, on Europe, Fostair, we have seen some pickup in UK, now you've got approval in Germany. You know, what are your peak sales expectation, and when you expect, you know, that to achieve? We are already doing pretty well in UK, and Germany actually launched in the last month. The other countries through our partners in Italy and other countries, we've also begun launching the product. It's well on its way. By next year, fiscal year 25, should be a peak year for Fostair. Okay. Can you share what kind of peak sales you're expecting in Europe? I don't think we have shared, like, product-wide sales, but suffice to say that it's gonna be a good percentage of our revenues in Europe. I mean, do you think that it would be like meaningful number from where we are today in FY 25? Yes. Okay. Okay, thank you. Thank you very much to all the participants for being so patient. I now hand the conference over to the management for closing comments. Over to you. Thank you all for your very thoughtful questions. Hopefully, we were able to respond to majority of them. Any that we haven't been able to, we'll certainly catch up offline. We are very energized with the start of this fiscal year, as you can see, and look forward to continue to execute, especially given the opportunities that we have now in the next couple of quarters, and again, catch up with you in the next quarter, hopefully with a better set of numbers. Thank you again. Thank you, very much, ma'am. On behalf of Lupin Limited, that concludes this conference. Thank you for joining us and you may now exit the webinar. Thank you.