Ladies and gentlemen, good day, and welcome to Torrent Pharmaceuticals Ltd Q3 FY 2022 earnings conference call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sudhir Menon. Thank you, and over to you, Mr. Menon. Thank you, Nirav. Good evening and welcome to quarter three FY 2022 earnings call of Torrent Pharma. Very quickly, the financial performance highlights during the quarter is as follows. The revenues were INR 2,108 crores, up by 6% on year-over-year basis. EBITDA was at INR 585 crores, down by 5% on a year-over-year basis. The profit before tax was at INR 357 crores, same as corresponding quarter in the previous year. Net profit after tax was at INR 249 crores, which is down by 16% essentially because of the tax change which has happened during the year. Profitability for the quarter was impacted due to higher than anticipated price erosion in the US-based business, coupled with under absorption of certain amount of plant overheads and certain one-offs, which have come during the quarter. We have rolled out cost optimization initiatives and we are confident to revise the margins in the shortest possible time. Today the board of directors have recommended interim dividend of INR 25 per equity share. I would now hand over this call to Aman to take us through the India business performance during the quarter. Yeah. Thanks, Sudhir. India revenues at INR 1,072 crores grew by 15% versus the market growth of 6%. Even as per the AIOCD data, Torrent's growth for Q3 was 15%. Growth was driven by robust performance of top brands in all our focused therapies. PCPM for the quarter was INR 9.9 lakhs with an MR count to 3,600. Torrent continues to focus on brand building and specialty approach and has 16 brands in the top 500 of the IPM, with 11 brands more than INR 100 crores sales as of March-December 2021. I'll now hand over to Mr. Sanjay Gupta for the international business. I'd like to start with Brazil. Brazil Q3 sales were about BRL 135 million, up by 8%. Year-to-date sales in Brazil were about BRL 353 million reais, up by 13%. Growth was aided by market growth together with performance of top brands and new launches. During the quarter, Torrent has launched a new division in the CNS segment. Further, Torrent has recently launched rivaroxaban, which has a market size of about BRL 800 million, which is the largest market in which we would participate in Brazil. With resilience in market growth and launch of a new division, we expect continued strong momentum in Brazil growth. Moving on to Germany. Germany sales were EUR 28 million, down by 6% on year-on-year basis. The German market growth in Germany continues to be negative. For the calendar year 2021, the market was essentially at 0% growth. The tender segment is also witnessing increased amount of competition. For the U.S., sales were $31 million, down by 21% on a year-on-year basis. Sales were lower due to price erosion in the base business and lack of new approvals pending re-inspection of facilities. The manufacturing facility at Levittown, U.S. was inspected by the U.S. FDA during December 2021, and they did not give any observations. As of December 31, 2021, 51 ANDAs were pending approval with U.S. FDA, and seven tentative approvals were received. two ANDAs were approved during the quarter. I would like to conclude by highlighting that the growth momentum continues in branded generic markets, including in our India business. Delay in the inspection of U.S. facilities together with price erosion in certain one-offs have adversely affected the U.S. business. We are confident that the cost optimization measures initiated during the quarter would aid us in reviving margins in the coming quarters. Nirav, we can open the call to questions now. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Tushar Manudhane from Motilal Oswal. Please go ahead. Yeah. Thanks for the opportunity. You alluded to certain one-offs during the quarter. On the U.S. business in specific or on the overall basis, can you quantify that? Oh, yeah. When I said one-off, Tushar, there are two or three items I would like to highlight. Number one, during the quarter versus quarter two, there has been an increase in the freight expenses almost by 1%, I would say. This is something which has happened because of this whole Omicron surge related disruptions which has happened which we feel should come back in a quarter or two. That's something which has happened this quarter, around 1% impact. The other 1% impact is, there were certain failure to supply provisions we made again for the U.S. business on one of the product where we had contracts and we decided to discontinue that particular product. So that is another 1%. What's actually happened this quarter is that the actual manufacturing volumes were much lower than what was planned, which led to under absorption of overheads, which has impacted the margin by almost 1%. So all in all, 3% is something we believe that it's a one-off for this quarter, and we should come back in a quarter or two. That's the one-off which I was talking about. Got you, sir. Got you. With respect to this failure to supply, basically the product economic viability was much lower it seems that it was better off to take provision for failure to supply rather than supplying the product. I mean, is that the logic for this? No, not really, Tushar. Tushar, we had some issues with respect to this product availability, and therefore we decided to discontinue. In that process, certain contracts which were there had to be canceled, and therefore, we've made provisions of failure to supply, assuming that this would come and hit the P&L. Understood. Just lastly, with this, run rate and given the lack of approvals basis, the inspection not happening, so this can be a sustainable run rate to go by or you see further headwinds from the U.S. business in particular? Yeah. Sanjay, you want to take that? Yeah, sure. Generally, I mean, until we get new approvals, we would expect the share of the U.S. business in total revenues to continue to decline. We have a you know few set of approvals expected in Q4. I would say the biggest among them is Dapsone, which is a dermatology product, roughly $135 million with two players. If that approval comes through as expected on February 18, that would provide a boost to top line. Other than that, the bigger boost we will have to wait for the plant inspections to happen, right? Because we have about more than 50 ANDAs waiting for approval, out of which about 27 have nothing, no pending issues except facility clearance. Can you just rename the product? I missed the name of the product. The one we expect on February the eighteenth is the Dapsone, D-A-P-S-O-N- Oh, okay. Got you. Yeah, it's a derma product. Yeah. All right. That answers my question. Thank you. Thank you. Thank you. The next question is from the line of Prakash Agarwal from Axis Capital. Please go ahead. Yeah, hi. Thanks for the opportunity. Good evening to all. My question is, like all the three things that you said, which is about a percentage each is part of gross impact of gross margins. Would that be correct? No. Only 1%, no. I think all of them are basically, Prakash. No, because I see two things happening, right? One is your gross margins have gone down. That is one. Second is your other expenses has also gone up. Which is hitting where? Because there is a clearly 200-300 basis point miss on the gross margin and about 500 basis point lower in EBITDA. Could you just help us understand? I mean, gross margin could be this, you know, the under absorption that you spoke about and provision of US supply, so 2%. And freight would be part of other expenses, right? Absolutely. Freight and failure to supply provision is in the middle line. As far as under absorption of overhead is concerned, again, I would say some part would be in the middle line and some part would be in the gross margin, because essentially I think the inventory valuation which happens along with material costs and overheads. I would say 2.1% in gross margin is surely because of the price erosion which has happened in the U.S. out of the 2.4% lower gross margin compared to quarter two, and the rest would be, I would say, the under absorption of overheads. Okay. This other expenses, even if we add back this, still it is on the higher side. What do you think is a sustainable number for this piece? No. I think 2% is what I said, right? I mean, definitely, let's say 2.3, 2.4 is definitely what we spoke about as one-time. This should get corrected over a period of time. There's no problem from that perspective. In addition to that, I think there's an increase in R&D spend by INR 10 crore. I think to that extent, here and there should be fine. Definitely 2.2.3% should get reversed from the other expenses, is what I believe. The other is ± INR 10 crore here and there, Prakash. Okay. This you are saying would be like Q4 phenomena, or it will take couple of quarters to reverse? Definitely Q1, I feel I'm very positive, is what I can say. Quarter four we should see something happening. I mean, I'm not too sure about it, but definitely quarter one we should see these things happening. Perfect. My second question, sir, is on, you know, the India business. A very strong growth. How are we seeing, you know, in terms of new launches, in terms of any, you know, any big launches that you anticipate for next year, especially in diabetes, et cetera? Where are we in, you know, in terms of new launches for next year? Yeah. In Q3, we've had about 10 new launches. Some of those would be combination and extensions. Some would be in sizable markets, so the opportunity would be fairly large. Q4 also we plan to launch around 10. Out of that 10 we've already launched two, one of them being the dydrogesterone, which is a large opportunity, and second is molnupiravir. Yeah. Any growth expectation for next year? If we look at Q4, at least right now, what we hope is that the IPM growth, which is at 6% in Q3, that should increase sequentially. Upwards of maybe 9%-10% is what the IPM hopefully should deliver. We are confident of maintaining this growth from the higher in the market. Next year, of course, there's been a base effect in Q1. Growth reported may not be as high. Underlying growth we believe should continue at 10% of the broader market. Our growth should be higher than that for this quarter. Okay, perfect. Thank you and all the best. I'll join back the queue. Thank you. The next question is from the line of Sriraam Rathi from BNP Paribas. Please go ahead. Yeah, thanks for the opportunity. It was just two questions, one on the gross margin. Gross margin is down by almost two-three percentage points on QQ or YY basis. I think 1 reason of course is the U.S. generic pressure, but, I mean, there has to be something more to that, right? I mean, so what exactly would have been the reason for this? No, Sriraam, the net drop versus quarter two if we look at it is around 2.4%. Of which we are saying 2.1% is because of the price erosion which has happened in the U.S. Almost 19% price erosion we've seen this quarter happening versus quarter two, not on YOY. That's the major component. As I said, some portion of the under-absorption which is happening. Right. That effectively talks about that 2.4%. How should we look at this number going forward? I mean, because the US continues to increase pressure. No, absolutely. No, absolutely. No, I think that's a good question actually. So, US price erosion is something which will remain, right, at least for quarter four. The way I look at from next year perspective is that the recovery would definitely happen in terms of the price increases which we would be taking on the branded generic piece. That's something which for sure is going to happen as far as branded piece is concerned. I think as a portfolio the share of the total revenue, 65% is branded generic businesses. If you calculate back of the envelope, I think 1%-1.2% of this should get offset with these price increases which will come in branded generic prices, is what I believe. What we also expect is, with the U.S. business, the U.S. FDA inspection is happening next year. There are few launches which can start happening, next year. Not all the products will be giving a better margin or a higher realization, but there will be some products which would give. That's point number two. Point number three is there's already a few products from the eR&D, the external R&D pipeline, which would start coming in actually, for the next year. We don't see problems for those products coming in. Those could also help in pushing up the margin. All in all, I personally believe that most of this drop, which is happening quarter two, quarter three, in the gross margin should come back in the next year. Okay. Got it. Secondly, on SG&A expenses, I mean, of course there is significant increase almost, I mean 15%-20% increase in absolute amount. Explain the reason for that. I mean, like we were doing 350-370 crore kind of expense every quarter. From Q1 assuming that freight cost normalizes, should we be back to that kind of number or it will be on the higher side? Right. There are two main impact items, Shriram. As I said, 1% is because of that freight, right? Which is, let's say 1% of the revenue is INR 21 crore. Out of INR 542 crore, INR 21 crore is contributed by this incremental freight which has come in. That should normalize is what I said by Q1 at least next year. The other impact which I said 1% is the failure to supply provisions which we made in Q3, right? Another 1%, that's also INR 21 crore. That should also come back. I mean, that impact should not be there in the future quarters. All in all, if I put these two items together, then we are talking about INR 42 crore, right? 542 becomes 500 against an average of 490, which we were clocking in the previous quarters. 490, 500, 505, I should, I think that should be the base number on which next year I believe at least 8%-9% increase is something I would take on a normal basis. Great. Right. That's helpful, sir. Thank you. Thank you so much. Yeah. Thank you. The next question is from the line of Damayanti from HSBC. Please go ahead. Hi. Thank you for the opportunity. My question is again on gross margin. You explained majority of decline is due to the price erosion part. How about decline due to raw material price increase, and how do you see this part for next few quarters, the raw material price inflation? No, Damayanti, you're right, actually. I think the drop in margin which was explained was versus quarter two. If you ask me whether the raw material prices has further gone up in quarter three versus quarter two, maybe not. I don't see that kind of an impact. Yes, I mean, during the year we've seen some increase in prices, both API and in active raw material. Some of the inactive raw material, almost 50% price hike we've seen. As a portfolio, since we are more focused on the chronic segment and the dependency on China factor is quite low from that perspective. Because I think most of the price increases we've seen on the acute side, not on the chronic side. If I look at from an overall perspective, yes, I mean, the gross margin could have got impacted by maybe 0.8%-1%, but that's there in quarter two as well as quarter three, I would say. Okay. Sequentially, we haven't seen additional, I'll say impact of this, raw material price inflation. You said 0.8%-1% on a YOY basis, right? For the year, yeah. Okay. YOY. Okay, that helps. My second question is, do you have any visibility on timeline for FDA inspection of the pending issues at Dahej and Indrad? What about the supply situation from Levittown plant? Actually we don't have any visibility on inspection at Dahej and Indrad. The supply situation from Levittown is by March 2023 we should have about 10 products on the market and well on the way to generate about, you know, between, say, $6 million-$10 million of annual revenue. Sorry, sir, I just missed. By fourth quarter you said, we should be going back to this $8 million-$10 million kind of run rate from the Levittown plant. Yeah. Correct. Yeah. Correct. With about 10 products on the market. Okay. Okay. Thank you. I'll get back in the queue now. Thank you. The next question is from the line of Neha from Bank of America. Please go ahead. Yeah, thanks for taking my question. I have two questions. First, in your opening remarks you mentioned, you know, cost optimization steps that you would plan to take. If you could just give us some color on what these would be. My second question, if I remember correctly, we'd indicated that we could potentially look at investing back in India, you know, to increase our sales force. You know, by when should we expect that? Or do you think we can support growth in the India business with the current sales force? Thank you. Yeah. Neha, I'll take the first question, and then probably I'll give the second one to Aman to answer. So, when we spoke about cost optimization, that was more in terms of the plant overheads, where you know, we've done some amount of work on that. What we are doing is that we are trying to maximize the volumes at one particular plant. As far as the other plant is concerned, we are trying to cut down on the shift for that particular plant. In this whole process also optimize the volumes for different geographies in such a way that at least some part of the plant overheads can be optimized. That's what we said that, you know, the cost optimization measures have already been undertaken. That's something which you'll start seeing as far as gross margin is concerned, definitely from quarter one of next year. Yeah. For the India field strength and expansion, so we would be undertaking some level of expansion during this quarter, which has been initiated already. I would say about half of the total plan would be implemented by end of Q4, and the second half would be probably by the end of H1. Looking at something about between 400-500 reps addition to the current field force. In which case there would be some additional cost pressures that we will see because of this field force addition, right? That would be an incremental expense over and above, you know, so some of the price increase will be offset by the higher employee cost that we could see. Is that the right way to look at it? Sorry, Neha, can you repeat your question? The 400-500 additional people would increase our employee cost, which would be another cost headwind, a margin headwind, you know, for next year. Therefore the price increase that we would see in India would partly get offset by this, you know, cost increase. Is that the right way to look at it? It's a logical way to think. The other thing which I have been talking about is that on an overall basis you'll see the operating leverage kicking in, right? Because the top line will be growing much faster than the middle line. Yes, to a certain extent it's a logical thinking that, you know, the price increases will help in offsetting this particular expense, which will not be substantial, Neha. It should be less than maybe 0.5%. Mm-hmm. Other expenses also playing out, there will be operating leverage kicking in. I think on an overall basis it should not be a major impact on the overall margins. It should get offset against the incremental benefit which is going to come. Understood. Thank you so much. Expenses tend to be more gradual when it comes to Q4's expansion. Over maybe a nine-10-month period would it be really in full implementation rather than upfront? Got it, sir. Thank you so much. The next question is from the line of Abdulkader Puranwala from Elara Capital Plc. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity. So just, would you be able to provide the breakup of the 51 ANDAs which are pending with the US FDA? I mean, as to how much would be filed from Dahej and Indrad and how much would be third-party ANDAs? The exact number we won't be able to provide, but majority of them are from Dahej and Indrad. I've mentioned about, out of these, 27 have nothing pending except the facility, right? We should expect those approvals in quick time after the inspection. Generally the timeframe for the FDA is, if you can assume that inspection takes place in month one, you would get the EIR, if everything goes well, about four months. Normal timeframe for FDA is about 90 days after the EIR to start approving any ANDAs. You know, I mean, if the inspection takes place next month, eight months after that, you can expect October-November timeframe products to start getting approved. Sure. My next question was on Germany. I mean, we saw last quarter in Q2 as well, you know, you reported a close to 4% decline. This quarter again you're facing some headwinds. Going ahead, how should we view this business, especially on the tender side, and you know, what is your kind of growth you should build up for next year? If you could help us guide us from that way. Last six, seven quarters, we've seen sales, you know, vary in the range of between EUR 28 million to EUR 30 million per quarter. It's been kind of stagnant, I mean, the delta is very little. It's usually in this range between 28 and 30. There are two types of factors behind this. One is I would call more market related factors, and one is Torrent specific factors. Market related factors is overall the market has been flat. Usually German market used to grow between, you know, 2%-3%. That has not happened. 2021 we saw, 0. Second market related factor is we've seen, new players come in and, some kind of price erosion. Over the last one year, I've seen about 7% price erosion. It's not yet to U.S., but it is becoming, like, more competitive and more price sensitive in Germany. On a Torrent specific factor, we've noticed two or three things. One is we've lost a few tenders. You know, because of the pricing pressure, we've lost a few tenders. Also where we have won tenders in two or three player markets, we've not been able to convert our market share effectively. The steps we are taking is more, you know, we've done a cost optimization exercise so that we can be more aggressive in the forthcoming tenders. Also we've kind of worked with the channel and the wholesalers and the pharmacists to increase the attractiveness of the Torrent products to them, so that we can get the better market share where we win tenders. Unfortunately the next series of tenders will not really come before October. You know, I don't expect any short-term turnaround in the next quarter or two. As new tenders come up, we would be well placed to win. I would say more share in them as compared to the recent past. That's how we are planning to validate. Got it. Sure, sir. Thank you so much for answering my question. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Anubhav Agarwal from Credit Suisse. Please go ahead. Hi, guys. Good evening. First question, just trying to understand the U.S. price erosion 19%. We had quarterly sales of $35 because of that. Now, this is a portfolio average, so this implies in some products we should have seen erosion of 40%-50% as well. We are not a company where we have a very high product concentration. Just trying to understand this 40%-50% erosion in certain products. Is that permanent or was it like some companies were having inventory, they dumped it and this was one-off pricing or has that become a new pricing? Sanjay sir, can you explain the background what this very high price erosion? Yeah. Sanjay, you want to take that? Sure. Anubhav, yeah. You go on, Sanjay. Correct. You know, actually, just to highlight what are the products behind this, right? Number one product that is responsible is a product called Nebivolol. Nebivolol is something that had approval since a long time, and we launched it in last quarter and it was essentially a four-player market with good pricing. In the end of December or middle of December, we had some two additional players come into the Nebivolol market, and that actually, you know, brought down prices dramatically with some adjusting stock adjustments to be paid to the customers. As a result of which, that was the number one factor. The second factor I would say we had also launched one of the statins at a decent price. Then again, there were new players that came into the Olmesartan family of products because of which there was a dramatic price reduction. I would say there have been a disproportionate price reduction on a few products which has resulted in this happening. Okay. This is a new base effectively, sir. Yes, Anubhav. I would say so. Where have you been gaining volumes because 35 going to 31? You've been gaining volumes as well. Can you also mention the product where you gained? On a portfolio basis, our volumes last four years have been between INR 375 crores and INR 400 crores. We are still running at the same run rate. After the mix changes, the overall size of the volume of the business has been fairly consistent. A question on the U.S. business, which is Dapsone. Just to understand it, you have tentative approval and you have a settlement date eighteenth of February, you can launch it without any ifs and buts, right? No, the GDUFA date is on eighteenth of February, so we need the FDA approval on the eighteenth to be able to launch the product. We have the settlement in place, yeah. Don't you have a tentative approval on this? It is Aczone 7.5%, yeah. Correct. Yeah, exactly. We have a tentative approval, and we expect the final approval on the GDUFA date. Understood. Okay. This is back to Sudhir Menon, sir. Just trying to understand this freight increase. I did not follow this when you said that Omicron surged-related disruption. Can you elaborate on this. Yeah. It's basically on the international freight. I mean, in some of the pockets like Europe and Brazil, we saw the prices and the freight cost going up substantially, I would say. That's because of the availability of space, the airspace, which was much lower compared to quarter two, I would say. There was some disruption we saw during quarter three in terms of the availability of space, and therefore the air freight shot up like anything. What you're seeing now, has that somewhat moderated or still running very high? No, it will moderate, Anubhav. That's the feedback which I'm getting internally, in terms of, our procurement guys talking to the, agents. We believe they should come back fast, to the nominated level, Anubhav. When you said the manufacturing volumes are lower in this quarter, what led to that lower manufacturing volume? It basically, I mean, the change of product mixes which has been happening for years, I would say. There was some plan which was made in terms of maintaining some level of inventory and the product mix is changing because of the contracts, the new contracts coming in for some products and some products going off and that caused a reworking. We saw that quarter three, the manufacturing volume really came down from what we had planned in the beginning of the year. Okay. Just last question for Aman. Actually, so when you talk about 400-500 people expansion in India, can you also give some indication where are you adding these people majority? Is it to your core therapies like cardiology, CNS, et cetera? Are you adding them to the newer therapies that you want to grow, et cetera? Is the objective to increase doctor coverage, et cetera? Can you just give some high level idea? Yeah. This would be predominantly for the existing focused therapies. CVD, CNS, gastro and so on. This would per division add up to up to maybe 30%-40% increase per division in coverage with this new strength. The idea is to expand now that we've reached a fair level of market share within the covered universe. The idea is to go beyond the covered universe. That's where the expansion has been conceptualized. Okay. Let's say per division you are almost adding 30%-40% increase. Are you really going to launch so many products in this division or how are you going to make this less productive? No, it would be a mix of both. There would be new launches as well, and also coverage expansion. I mean, it would be for the existing products as well. Let's say in GP coverage we would be not as high as some of the top players in this therapy. We're trying to now catch up to that. Whereas in specialty coverage, our coverage is 100% in all specialties that we focus on. Okay. Thank you, Aman. I'll join back. Thank you. Thank you. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Hi, good evening, and thank you for taking my question. Just, first one on the India business. Can you just split out into the growth of 15% into price, volume, and new products? Just whatever the AIOCD equivalent that you quote. Yeah. The AIOCD growth is 15%, volume is 4.4%, price is 8%, and new products is 3%. Got it. In the past, we have talked about maintaining this, you know, 8% price increase, and I think earlier in the call you have spoken about similar increase in next year as well. Is there any impediments you think that could alter that scenario? Is volume growth sufficient enough for you to think that there is no demand issue? No, I think this range should continue. Again, every year we'd have to look at the comparative scenario. Within this range, ±1.5%, I think is something that we think should be sustainable. Got it. Just one follow-up last on the India business is on the trade generics. You know, how is it progressing? What is the contribution in the quarter? What are some of the dynamics you're noticing in this segment? We've stabilized at about 2% of total contribution to the India business now. This is based on the first phase of SKU launches, and we'll be planning an equal number of SKU launches sometime next year. This 2% should hopefully increase in contribution as we go along by the end of next year. This base is now stabilized, and I think we've reached this level fairly quickly in a sustainable way. Got it. Second question, and I can stop after that, is on the R&D costs, right? QQ, they have come off. I know year-over-year they're up. How should we look at this, you know, and where are we filing some of our newer ANDAs, so how do we manage it given that our two plants in India are like under the this one. How should we look at that and R&D costs? Shyam, I think R&D costs at least for the next one or two years should not be more than 6% is what my guess is. Okay, your filing strategy? Sorry, filings? Filing strategy. Where are we filing the next products from? No, no. It will continue from Indrad and Dahej. There's some portion of eR&D which anyway will continue every year. Mm-hmm. The majority of in-house development which is happening will be filed from Indrad and Dahej only. Got it. Thank you, and all the best. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Kunal from Edelweiss Financial Services. Please go ahead. Good evening, and thanks for taking my question. Since you mentioned it is very difficult to pinpoint when the FDA will clear Indrad and Dahej plants, have you made backup plans for high-value launches like the Revlimid or any other launches you now have in the pipeline? For this particular product, it's not being manufactured at Torrent. I can tell you that. You know, some of the other products, we have alternate sites in our plant. I don't know. I can't say more than that, but except that for certain high-value products, we have backup sites, yeah. Sure. Sir, could you just share your debt numbers at the end of Q3, and how much do you expect to pay down in the next three quarters? I think overall, in terms of repayments, we've done roughly INR 750 crores. I think by March, we should be close to INR 900 crores in terms of repayments. Sure, sir. Any sort of similar numbers should we expect in FY 2023? Yes. Yes. Yes. It should be around 900-1,000, yeah. Okay. Got it, sir. Thank you very much. Thank you. The next question is from the line of Aditya Khemka from InCred Asset Management. Please go ahead. Yeah. Hi, thanks for the opportunity. Sanjay, sir, you're also experiencing raw material price increase in Brazil as well as American products. In Brazil, are we able to take price increases to set off the raw material pressure? Aditya, in Brazil, you know, we have annual price increases approved by the government in April of each year. Generally, price increases are divided into three categories of products. What you call the most competitive product, moderately competitive, and then less competitive areas. Just to give you an example, in April 2021, the government allowed 10% for, I would say, very competitive products, 8.4% for medium competitive, concentrated or medium competitive, and 6.7% for highly concentrated products. That is. Generally, most companies take these price increases. I mean, it might vary product to product based on the competitive scenario, but you can generally expect 6%-8% price increases on average, depending on how your portfolio is split amongst the concentrated and non-concentrated labs. Understood. For the U.S. market, you know, I understand new product introduction will obviously help you to overcome some margin pressures. Is there any scenario in which you envisage passing on the input cost pressure on a given product to its customers? I am alluding to price inflation in the U.S. generic market. Is that at all a possibility, or that is completely ruled out? I will not rule it out because at some point it becomes unsustainable, so the choice before the manufacturer is either to discontinue the products or to pass on some price increases. We have seen that when faced with uncertainty of supply of high volume products, your customers are a little bit flexible. Not very, but there's been some degree of flexibility to secure supplies of high volume, I would say, you know, products. So you can actually work with them and you know, with some back and forth, there can be smallish price increases to offset increasing costs of input materials. Would that be determined by that competitiveness as well as the volume, or just the volume is enough? I would say, I mean, the competitiveness is always a factor, right? If they can get it cheaper from somewhere else and, like, some other larger, other reliable suppliers are not really pass on the input price increases, that would be a factor in the decision-making. You know, there comes a point when everybody is faced with the same pressures. You know, it's not a question of efficiency, it's just a cost question of basic material costs and what are you recovering over them. I would say that, you know, there are several products where we benchmark our costs, and they're in line with the best in class. If we are facing the pressures, we can be pretty sure that others are facing also. Got it. Sir, sorry, just a clarification on the Brazil response that you gave. 6%, 8% and 10% was the last time the price increase that they gave to less somewhat mild and intensely competitive products. This time around, is the expectation of a similar sort of thing, or do you think, given the raw material inflation, the ministry will be more conducive to a higher number? In all honesty, we don't know. Generally, the factors that we take into consideration is the inflation rate and the exchange rate, right? Because Brazil imports most of the APIs that go into the pharmaceutical manufacturing and the local inflation rate. Our expectation as of today is it would be fairly similar. Understood. Thank you, Sanjay sir. All the best. Thank you. Bye. Thank you. The next question is from the line of Anubhav Agarwal from Credit Suisse. Please go ahead. Yeah. Question to Aman. Aman, basically with this expansion of 400-500 reps, and assuming the portfolio grows by 10% plus next year, so you think that productivity should be maintained around INR 10 lakhs level, right? Yeah, yeah. That, I mean, there may be a temporary dip for maybe a quarter or two, but overall level, this level of productivity should be maintained within, by the end of next year, I would say. How do you think can this be a more regular phenomenon for you? Like for example, you can maintain this productivity at this level and keep whenever needed keep expanding your sales force or, you know, how this is, I mean, roadmap is very clear for next year, but on a medium-term period, how are you thinking about this? Is, I mean, when you would have done your analysis, what is the need? Have you done an analysis that by adding, let's say, right now you're expanding your sales force by 10%, but if you were to expand by 20%, 30%, you could get much higher growth, et cetera? Well, it's a function of two things essentially. One is the increase in number of doctors every year. I mean, since we haven't really expanded for quite some time, we were covering a very large amount. That kind of natural expansion would need to happen. Second would be part of the portfolio when there are new launches coming in. Next couple of years we anticipate a good number of launches similar to last year as well. Those two would be the key driving factors. Beyond that, expanding may not give the best results and that would dilute PCPM as well. Okay. Very clear, Aman. Second question on this understanding question that when you look at your buyers today, for example, the organized pharmacy chain as well as, let's say including e-pharmacy, what percentage of sales would they account today, rough number? Are we talking in India? Yeah, India. The organized chains, including offline, online, would not be more than 5%, I think. Give or take a few%. Their market share in the overall IPM market is already double digit, right? So, your share is much lower, is it? Not really. It would be almost the same. Particularly in chronic, it may be higher because chronic purchases on e-pharmacies tend to be higher. I think it would be pretty much the same as in the overall IPM. That the margins that you offer to the other guys versus that you offer to this guy, is there any difference in the offers of the margins to this guy? No, no. It's all the same throughout for all distributors and retailers. There's no differentiation that we're doing. Okay. Thank you very much. Yeah. Thank you. Participant line, press star and one to ask a question. The next question is from the line of Nitin Agarwal from DAM Capital Advisors. Please go ahead. Sure. Yeah. Thanks for taking my question. So, this is on the external R&D projects. Can you just give us a little bit more color on how many such projects are? I mean, two, three or four things. One is how many such products have you filed so far? How many of these approvals are you expecting over the next couple of years? And you know, what is the pipeline really looking like over here? Are you referring to a particular geography or overall? For the U.S. For the U.S., in fact the number of projects is about close to 50. It's a diversified basket of products, right? There are products which are in dermatology, there are products which are oncology, and there's a series of potentially CBER products, and then there are some oral solids and liquids. It's a diversified basket. Our goal is, I mean, not so much linked to the number of ANDAs. The number of ANDAs, generally, you know, we used to do close to 50-20. Now we are doing somewhere closer to 10 per year. The complexity and the cost of per ANDA has gone up. I mean, we are doing products, which, for example, in oncology, we have a new onco site which is coming on stream, and we'll be filing the first three onco products in the coming year. We are doing products which require in-patient studies. You know, kind of expensive, difficult to do. The portfolio mix is evolving continuously and it's more trending towards, I would say, more expensive, more risky and projects, but a smaller number of projects. I was trying to understand, just on how many of the product filings that you've done so far are through partners? Through partners, I would say as of today, we have about five-six filings. In your- Yeah. We have three products which are approved. You know, one we have. Yeah. Okay. How many do we expect approvals for this year? To the extent, I guess these approvals can potentially come through without, you know, FDA inspection, hindrances. 3. We expect about 3 approvals in the coming year. Okay. Lastly, I think sort of call out Dapsone launch in Q4. When you look through your launch potential launch calendar over the next, say, four to six quarters, how many more such reasonably high value approvals or rather launches do you foresee? It's hard to predict, right? Based on a lot of factors, but generally I would say in a, you know, normal year, we should expect about, you know, low single digit, three-four such launches. Will FY 2023 qualify in your estimation to be such a normal year? I mean, issues basically. That's what I was referring to. Okay. Sorry. Going forward, how are you looking at this partnership, you know, how important is this partnership for your incremental R&D filings, the pipeline going forward? Every year we try to do, let's say 3-5 projects, and, you know, in areas where Torrent doesn't have capabilities or infrastructure. That is the kind of trend that we would continue. Okay. Thank you. Thank you. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants, you may press star and one to ask a question. As there are no further questions, I will now hand the conference over to Mr. Sudhir Menon for closing comments. Yeah, thank you, Nirav, and thank you everyone for joining Torrent's quarter three FY 2022 call. If you have any follow-on questions, please feel free to contact me or Sapan or drop a mail at our investor services email. Thank you. Thank you very much. On behalf of Torrent Pharmaceuticals Ltd, that concludes this conference. Thank you for joining us. You may now disconnect your line. Thank you.